LEASE
THIS LEASE is made as of March 6, 1998, by and between XXXXX-XXXXXX
AND COMPANY, a Minnesota general partnership ("Landlord"), and CIMA LABS, INC.,
a Delaware corporation ("Tenant").
RECITALS:
A. Landlord and Xxxxx'x Fashions, Inc. ("Sublandlord") are parties
to that certain lease (the "Prime Lease") dated as of December 11, 1980, as
amended by that certain First Amendment to Lease dated as of June 10, 1981, as
further amended by that certain Second Amendment to Lease dated as of December
19, 1986, and as further amended by that certain Third Amendment to Lease dated
as of January 18, 1994, relating to certain premises (the "Leased Premises")
consisting of the real property described on Exhibit A annexed hereto, together
with all buildings, surface driveways and parking areas constructed thereon,
all as more particularly described in the Prime Lease. Tenant and Sublandlord
are parties to that certain sublease (the "Sublease") dated as of February 16,
1994, whereby Tenant subleased the Leased Premises from Sublandlord. Tenant,
Landlord, and Sublandlord are parties to that certain Consent, Non-Disturbance
and Prime Lessor's Agreement (the "Consent Agreement") dated as of February 22,
1994, whereby Landlord consented to the Sublease.
B. Sublandlord rejected the Prime Lease in bankruptcy effective as
of September 30, 1996. Pursuant to Section 2 of the Consent Agreement,
Landlord is not disturbing Tenant's current possession of the Leased Premises.
Tenant is exercising its option for a Direct Lease, and Landlord and Tenant are
entering into this Lease.
C. In fulfillment of the terms of the Consent Agreement, Landlord
wishes to lease the entire Leased Premises to Tenant and Tenant wishes to lease
the entire Leased Premises from Landlord, upon the terms and conditions
contained herein, and effective as of the date of this Lease. This Lease
supersedes in all respects the Prime Lease and the Sublease with respect to all
periods from and after the date of this Lease.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below, the parties hereby agree as follows:
1. TERM. Landlord hereby demises and leases to Tenant, and Tenant
hereby hires and takes from Landlord, the Leased Premises for an initial term
commencing effective as of September 30, 1996 (the "Commencement Date") and
expiring June 1, 2009.
2. TENANT'S OPTION TO EXTEND. Tenant shall have the right to
extend the initial terms of this Lease (the "Extension Option") for one (1)
period of ten (10) years, provided the following conditions are met:
(a) There shall be no Event of Default outstanding under
this Lease on the date Tenant exercises its option hereunder nor as
of the beginning of the extended term.
(b) Tenant shall send Landlord written notice by certified
mail, return receipt requested, of its election to extend the term of
this Lease on or before September 1, 2008. Said notice shall be
effective upon mailing. Tenant shall include a check (the "Extension
Deposit") for one-twelfth of the then-current annual rent with its
mailed extension notice. Landlord shall apply the Extension Deposit
towards the first month's rent during the extended term, and Landlord
may retain the Extension Deposit as liquidated damages should Tenant
fail to occupy the Leased Premises pursuant to its exercise of the
Extension Option.
(c) If this Lease is canceled or terminated prior to the
natural expiration of the initial term, Tenant's option to extend
hereunder shall be null and void, having no further force or effect.
(d) The terms of this lease shall remain in full force and
effect during the extended term; provided, however, that the annual
rent during the first five years of the extended term shall be the
greater of (i) $500,000 or (ii) Adjusted Rent as defined in Section
4.2 hereunder, and the annual rent during the second five years of
the extended term shall be the greater of (i) $550,000 or (ii)
Adjusted Rent as defined in Section 4.2 hereunder.
(e) If Tenant exercises the right to extend the term of
this Lease, this Lease shall be extended for the extended term
beginning immediately following the expiration of the initial term.
Tenant may assign or transfer the Extension Option without Landlord's consent
to any entity to which Tenant would be entitled to assign this Lease under
Section 16.3 herein. Landlord's consent shall be required for any other
assignment or transfer of the Extension Option.
3. USE. Tenant shall use the Leased Premises solely for
general office space, warehouse and light industrial manufacturing and assembly
applications (including, but not limited to, production of pharmaceutical
products) which do not involve Hazardous Materials (as defined herein), unless
otherwise specifically permitted herein,
and for no other purpose. Tenant may also use the Leased Premises for other
lawful uses provided Tenant obtains Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed. Tenant shall use the
Leased Premises in conformance with all applicable codes, ordinances and
zoning regulations and shall not exceed any applicable load restrictions
within the building.
4. RENT.
4.1 ANNUAL RENT. Tenant shall pay to Landlord as annual
rent the greater of (i) Initial Rent or (ii) Adjusted Rent, as such terms
are defined in Section 4.2 hereunder, payable in equal monthly
installments of one-twelfth (1/12) of Initial Rent or Adjusted Rent, as
the case may be, in advance and on or before the first day of each month.
4.2 RENT CALCULATION. For the purposes of this Lease,
"Initial Rent" shall mean Three Hundred Sixty Eight Thousand and no/100
Dollars ($368,000.00) per annum. "Adjusted Rent" shall mean a per annum
amount, calculated on June 1, 1996 and June 1 of every fifth year
thereafter, equal to the sum of $368,000, plus (or minus, in the event of
decrease) (x), plus (or minus, in the event of decrease) (y), where (x)
equals 13,000 (the approximate number of office square feet in the Leased
Premises) multiplied by the amount by which the then-existing NAIOP Office
Rate has increased or decreased in comparison with the 1991 NAIOP Office
Rate, and (y) equals 62,000 (the approximate number of warehouse square
feet in the Leased Premises) multiplied by the amount by which the then-
existing NAIOP Warehouse Rate has increased or decreased in comparison
with the 1991 NAIOP Warehouse Rate. For the purposes of this Section 4.2,
the term "NAIOP Office Rate" shall mean the stated "average" office space
rental rate (measured in annual dollars and cents per square foot) for
"office warehouse" properties in the "Southwest Suburban" submarket (or
other appropriate description of the submarket in which the Leased
Premises are located), as published by the Minnesota Chapter of the
National Association of Industrial Office Parks in the June update to
their annual Industrial Space Update, and the term "NAIOP Warehouse Rate"
shall mean the stated "average" warehouse space rental rate (measured in
annual dollars and cents per square foot) for "office warehouse"
properties in the "Southwest Suburban" submarket (or other appropriate
description of the submarket in which the Leased Premises are located), as
published by the Minnesota Chapter of the National Association of
Industrial Office Parks in the June update to their annual Industrial
Space Update. In the event that the National Association of Industrial
Office Parks ceases to publish the data necessary to calculate the "NAIOP
Warehouse Rate" and/or "NAIOP Office Rate", Landlord and Tenant shall
reasonably agree on an alternative method for calculating these amounts.
The applicable NAIOP Office Rate for 1991 and 1996,
respectively, was $6.88 psf and $6.87 psf, and the applicable NAIOP
Warehouse Rate for 1991 and 1996, respectively, was $3.48 psf and $3.56
psf The Adjusted Rent effective as of October 1, 1996, is $372,829.92.
Notwithstanding anything contained herein to the contrary, in no event
shall the annual rent payable by Tenant hereunder be less than the highest
of any previously established annual rent, whether "Initial Rent",
"Adjusted Rent" (during either initial or extended term), or, during the
extended term, the amount of minimum annual rent specified in Section 2(d)
above for the extended term.
4.3 UTILITIES. Tenant shall pay, prior to delinquency,
for all utilities and similar services provided to the Leased Premises
during the term of this Lease. Such payments shall be made directly to
the supplier of the utility or service. Any payments made by Landlord on
Tenant's behalf for such utilities or services shall be considered
additional rent hereunder. All additional rent obligations shall be
prorated for partial calendar years.
4.4 REAL ESTATE TAXES. Tenant shall be responsible for
payment of, prior to delinquency, one hundred percent (100%) of the real
estate tax obligations and installments of special assessments due and
payable for the Leased Premises during the term of this Lease. Tenant
shall deliver paid receipts evidencing Tenant's payment of real estate
taxes within ten (10) days after the dates such payments are due under
Minnesota law (e.g., by no later than May 25th and October 25th) (for the
purposes of an Event of Default, the foregoing shall be considered a
monetary obligation). Landlord shall use reasonable efforts to deliver
the real estate tax statements covering the Leased Premises to Tenant in a
timely manner, provided, however, that Landlord's failure to do so shall
not be a default hereunder and shall not affect Tenant's obligation to pay
real estate taxes in a timely manner. Tenant shall, at its sole expense,
have the right to contest real estate taxes assessed against the Leased
Premises provided it does so in good faith, in strict accordance with all
applicable laws and rules and either makes all payments required prior to
delinquency or provides sufficient security to Landlord and to protect its
interest in the Leased Premises.
4.5 PAYMENT. All annual rent, additional rent and other
charges due under this Lease shall be paid by Tenant without setoff,
deduction or demand except as expressly permitted in this Lease. All
rents hereunder shall be paid to Landlord at the address and in the manner
directed by Landlord, and shall be paid in United States funds by check
drafts from a United States banking institution. If any rental check
fails and is returned to Landlord because of insufficient funds, then, at
Landlord's option, all future rental payments shall be made in certified
funds. All rental for any partial month shall be prorated on a per diem
basis.
4.6 LATE CHARGES AND INTEREST. In the event any portion
of the rent payable hereunder is not received when due, Tenant shall pay,
as additional rent, a service charge of Two Hundred Dollars ($200.00) for
bookkeeping and administrative expenses. If real estate taxes are not
paid prior to delinquency, Tenant shall be solely responsible for all
penalties and interest in conjunction therewith, as well as Landlord's
damages attributable thereto. In addition, any Rent not paid when due
shall accrue interest at the lesser rate of fifteen percent (15%) per
annum or the highest lawful rate of interest until payment is received by
Landlord. Such service charges and interest charges shall not be deemed
consent by Landlord to late payments, nor a waiver of Landlord's right to
insist on timely payments, nor a waiver of any remedies to which Landlord
is entitled hereunder.
5. INSURANCE.
5.1 LIABILITY INSURANCE. Throughout the term of this
Lease, Tenant shall maintain commercial general liability insurance
covering claims for personal injuries, death and property damage occurring
in or about the Leased Premises with a combined single limit of at least
the Minimum Insurance Amount. For the purposes of this Lease, the term
"Minimum Insurance Amount" shall initially mean $2,500,000. Commencing
effective as of December 31, 2001, and as of each succeeding fifth
anniversary of said date thereafter during the initial term of this Lease
and any extensions thereof (each, an "Adjustment Date"), the Minimum
Insurance Amount for the five (5) year period prior to the next-succeeding
Adjustment Date (each, an "Adjustment Period") shall be adjusted, based
upon any increases or decreases in the Consumer Price Index for All Urban
Consumers (CPI-U), North Central/B, All-Items, 1982-84 = 100, as published
by the Bureau of Labor Statistics, United States Department of Labor (the
"Index"), in the following manner:
(i) The Minimum Insurance Amount for the subject Adjustment
Period shall be calculated by multiplying (A) the then-current annual
Minimum Insurance Amount by (B) the quotient obtained by dividing (1) the
Index figure applicable to the month prior to the subject Adjustment Date
(the "Adjustment Index") by (2) the Index figure applicable to December
1997 (the "Beginning Index"), and then rounding this number off to the
nearest $500,000; provided, however, that in no event shall the Minimum
Insurance Amount be less than $2 500.000.
(ii) Not later than fifteen (15) days following the Adjustment
Date, Landlord shall notify Tenant of Landlord's calculation of the Minimum
Insurance Amount for the next succeeding Adjustment Period. Unless Tenant
shall notify Landlord within ten (10) days after receipt of Landlord's
notice that Tenant disputes
Landlord's calculation of the Minimum Insurance Amount, Landlord's
calculation shall be deemed to be correct.
(iii) If the Index is no longer published, then a successor index
published by the Bureau of Labor Statistics of the United States
Department of Labor shall be substituted for the Index, and the base used
by any substituted index shall be reconciled to the Index.
5.2 PROPERTY INSURANCE. Throughout the term of this
Lease, Tenant shall maintain property insurance on an "All Risk" form
insuring the building and other permanent improvements on the Leased
Premises, and insuring all Tenant's improvements, betterments, fixtures,
merchandise and personal property owned or installed in the Leased
Premises, for 100% of replacement value, with a standard coinsurance
endorsement of not more than 90%, with a deductible of $5,000.00 or less.
5.3 STANDARDS. The insurance required by this Section 5 shall:
(a) be placed with reputable insurance companies authorized to do business
in Minnesota and having a rating by Best's of A or better; (b) name
Landlord as insured, as its interests may appear; (c) provide that such
insurance may not be canceled, and no change in the amount or terms of
said coverage shall be allowed, without 30 days' advance written notice to
Landlord; (d) contain such terms, conditions and endorsements of coverage
as are reasonably required by Landlord from time to time, and (e) waive
subrogation rights against Landlord. The liability insurance required by
this Section 5 shall provide claims-made coverage provided Tenant
continues such coverage through the end of any applicable statute of
limitations period, or otherwise provides occurrence-based coverage. Not
later than fifteen (15) days prior to the commencement of the term of this
Lease and thereafter at least thirty (30) days prior to the expiration of
current policies, Tenant shall deliver to Landlord certificates of
insurance evidencing coverage which complies with the requirements of this
Lease.
5.4 LANDLORD'S RIGHT. If Tenant fails to comply with any of
its obligations under this Section 5 regarding the obtaining and
maintenance of insurance coverages, Landlord shall have the right to
obtain any or all such coverages at Tenant's expenses, plus an
administrative fee of 20%. Tenant shall pay such sums to Landlord as
additional rent upon demand.
6. CARE OF PREMISES. Tenant shall not perform any acts or
carry on any practices which may injure the building or the Leased Premises, or
be a nuisance or menace, and Tenant shall keep and maintain the premises under
its control clean and free from rubbish and dirt and in good order at all
times, and shall store all trash and garbage within the Leased Premises and
arrange for the regular removal of such trash
and garbage. Tenant shall at all times, keep the Leased Premises in a clean
and sanitary condition in accordance with the laws, directions, rules and
regulations of the governmental agencies having jurisdiction, at the sole
cost and expense of Tenant; and in all respects Tenant shall comply with all
requirements of law applicable to operation of its business. Tenant shall
forthwith at its own cost and expense replace any broken glass in exterior
and interior windows and doors in or upon the Leased Premises, with glass of
the same quality, including plate glass. At the expiration of the tenancy
hereby created, whether by lapse of time or otherwise, Tenant shall surrender
the Leased Premises in good condition, reasonable wear and tear excepted, and
Tenant shall surrender all keys for the Leased Premises to Landlord at the
place then fixed for payment of rent and shall inform Landlord of the
combinations for locks, safes and vaults, if any, in the Leased Premises
which have been placed therein by Tenant and not removed as hereinafter set
forth.
7. REPAIRS AND MAINTENANCE. Tenant shall at all times be
responsible for all structural, nonstructural, interior and exterior repairs
and maintenance of the Leased Premises, including, but not limited to, repair
and maintenance of the grounds, parking lot and the building and repair and
maintenance of all doors, windows, partitions, fixtures, equipment and
appurtenances (including lighting, heating, plumbing fixtures, air conditioning
and ventilation systems) in good order, condition and repair. If Tenant
refuses or neglects to repair property as required hereunder to the reasonable
satisfaction of Landlord, as soon as possible after written demand, Landlord
may make such repairs without liability to Tenant for any loss or damage that
may accrue to Tenant's merchandise, fixtures, or other property or to Tenant's
business by reason thereof, and upon completion thereof, Tenant shall reimburse
Landlord for the cost of making such repairs on or before the date on which the
next payment of rent becomes due.
8. COVENANT TO HOLD HARMLESS. Tenant agrees to indemnify and
hold Landlord harmless against and from any and all claims, damages, cost and
expenses, including reasonable attorney's fees, arising from the conduct or
management of the business conducted by Tenant in the Leased Premises or from
any breach or default on the part of the Tenant in the performance of any
covenant or agreement to be performed by Tenant pursuant to the terms of this
lease, or from any act of negligence of Tenant, its agent, contractors,
servants, employees, sublessees, concessionaires or licensees in or about the
Leased Premises. In the event any action or proceeding is brought against the
Landlord by reason of any such claim, Tenant, upon notice from Landlord,
covenants to defend such action or proceeding and employ legal counsel
satisfactory to Landlord. Landlord shall not be responsible or liable for
damages at any time to Tenant, or to those claiming by, through or under
Tenant, for any loss of life, bodily or personal injury, or damage to property
or business, or for business interruption, that may be occasioned by or through
the acts, omissions or negligence of any other persons, or any sub-tenants or
occupants of any portion of the Leased Premises. Landlord shall not be
responsible or liable for damages at any time for any defects, latent or
otherwise, in any buildings or improvements in the Leased Premises or any of
the
equipment, machinery, utilities, appliances or apparatus therein, nor shall
Landlord be responsible or liable for damages at any time for loss of life,
or injury or damage to any person or to any property or business of Tenant,
or those claiming by, through or under Tenant, caused by or resulting from
the bursting, breaking, leaking, running, seeping, overflowing or backing up
of water, steam, gas sewage, snow or ice in any part of the Leased Premises
or caused by or resulting from acts of God or the elements, or resulting from
any defect or negligence in the occupancy, construction, operation or use of
the Leased Premises, or any of the equipment, fixtures, machinery, appliances
or apparatus therein.
9. ALTERATIONS AND IMPROVEMENTS. Tenant shall have the right,
from time to time, to make such alterations and improvements to, and decoration
of, the Leased Premises as shall be necessary and appropriate in the Tenant's
judgment for Tenant's conduct of its business thereon; provided, however, that
Tenant shall not suffer or permit any additions, alterations or improvements to
the Leased Premises without the prior written consents of Landlord as to the
plans and specifications therefor. The consent of Landlord shall not be
unreasonably withheld or delayed. Any additions, alterations or improvements
made to the Leased Premises by Tenant shall be made in accordance with plans
and specifications prepared by Tenant ("Tenant's Plans"). Tenant shall submit
any required plans and specifications to Landlord and Landlord shall have
thirty (30) days to review the same. If, within thirty (30) days after such
plans and specifications are submitted by Tenant to Landlord for such approval,
Landlord shall not have given Tenant notice of disapproval thereof, stating the
reason for such disapproval, such plans and specifications shall be considered
approved by Landlord. Notwithstanding the foregoing Tenant may, without
Landlord's consent, make non-structural alterations and improvements to the
Leased Premises at an out-of-pocket cost to Tenant not exceeding $25,000 for
any alteration project. In making any such additions, alterations,
improvements or decorations, Tenant shall comply with all applicable laws,
codes, ordinances and regulations.
10. DAMAGE OR DESTRUCTION, UNTENANTABILITY. Except as
hereinafter provided, in the event at any time during the term of this lease,
the Leased Premises or any portion thereof, shall be damaged or destroyed by
fire, explosion, windstorm or other casualty, Landlord will, after collecting
the proceeds from insurance, at its own expense, repair, restore and rebuild
the same to substantially the same condition which existed prior to such damage
or destruction, but Landlord shall not be obligated to expend any amount
greater than the proceeds of such insurance and, if the cost of repairing and
restoring the Leased Premises to substantially the same condition shall exceed
the proceeds of any such insurance, Tenant shall pay to Landlord the amount of
any such excess costs. Rent shall xxxxx during the time and to the extent that
Tenant reasonably shall be unable to conduct his business in the Leased
Premises. If Tenant shall be able to conduct business in only part of the
Leased Premises during such restoration, rent shall
xxxxx in proportion to the extent of such damage until the Leased Premises
have been repaired or rebuilt.
11. EMINENT DOMAIN. If the entire Leased Premises shall be
acquired or condemned by eminent domain for any public or quasi-public use or
purpose, then the term of the lease shall cease and terminate as of the date
that the condemning authority takes physical possession of the Leased Premises,
and all rental shall be paid up to that date. Any 'd rent shall be refunded to
Tenant. If a part of the Leased Premises shall be acquired or condemned as
aforesaid, and such part is such that the floor area of the building situated
on the Leased Premises is reduced by more than twenty percent (20%), then the
term of the lease shall cease and terminate as to the part so taken as of the
date the condemning authority takes physical possession, and at the option of
either party hereto, this lease may be terminated in its entirety. Either
party may exercise its option at any time after receiving notice of said
condemnation but prior to the date on which the condemning authority takes
physical possession of the Leased Premises. The termination date, in the event
either party exercises its option to terminate, shall be as of the date the
condemning authority takes physical possession of the Leased Premises, unless
otherwise mutually agreed by the parties hereto. Rent shall be paid to the
termination date and prepaid rent shall be refunded to Tenant. If less than
twenty percent (20%) of the floor area of the building situated on the Leased
Premises is acquired or condemned as aforesaid, and this lease is not
terminated, then Landlord, at its sole expense, shall as promptly as reasonably
possible after physical possession of said part has been taken by the
condemning authority, restore the remaining part to as near the condition which
existed immediately prior to the taking as is then reasonably possible, but
Landlord shall not be obligated to expend any sum greater than an award of
proceeds which it receives. If part of the building is acquired or condemned
as aforesaid and this lease is not therefor terminated by Tenant as provided
above, the rental payments hereunder shall be proportionately reduced from and
after the date the condemning authority takes physical possession of the part
of the Leased Premises subject to such proceedings, based upon the proportion
so taken. Any award on account of a taking of all or any portion of the Leased
Premises shall be the sole property of Landlord and Tenant waives any right to
seek any award or claim on account of loss of its leasehold estate.
12. SURRENDER. Subject to the further obligations set forth in
Paragraph 20 herein, Tenant shall peacefully and quietly vacate and surrender
the Leased Premises to Landlord at the expiration of the term of this Lease, or
at any earlier termination as may be provided elsewhere herein. Tenant shall
surrender the Leased Premises in broom clean condition and Tenant shall have
removed all of its trade fixtures and equipment (including, without limitation,
signage), repairing any damage caused by such removal or the installation or
operation of the fixtures or equipment. In no event shall Tenant remove any
fixtures or equipment owned by Landlord.
13. LANDLORD'S REPRESENTATIONS. Except as specifically provided
below, Landlord makes no representations or warranties, express or implied, as
to (i) the condition or state of repair of the Leased Premises, (ii) the
compliance of the Leased Premises with any laws, ordinances, rules or
regulations, or (iii) the suitability of the Leased Premises for utilization
for any particular purpose. Furthermore, Landlord further represents that, to
its knowledge without inquiry, the Leased Premises in general currently comply
with all federal, state and local laws, ordinances, rules and regulations which
are now applicable with respect to the Lease Premises. EXCEPT AS PROVIDED IN
THE PRECEDING SENTENCE, TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED
PREMISES, INCLUDING WITHOUT LIMITATION UTILITY SYSTEMS AND COMPLIANCE WITH THE
AMERICANS WITH DISABILITIES ACT, AND AGREES TO ACCEPT THE LEASED PREMISES "AS
IS".
14. INDEMNIFICATION. Except to the extent resulting from the
negligence or intentional misconduct of Landlord, its agents, employees or
contractors, Landlord shall not be liable for, and Tenant releases Landlord
from all liability for, any personal injury, loss of life, or damage to or loss
of property occurring on or near the Leased Premises or arising out of Tenant's
occupancy. Tenant agrees to indemnify, defend and hold Landlord harmless from
all liability, cost and expense (including without limitation attorneys' fees
and other litigation costs) arising out of or connected with (i) Tenant's
failure to perform any agreement, term or condition of this Lease, (ii) any
personal injury, loss of life, or damage to or loss of property which occurs on
or near the Leased Premises, or (iii) Tenant's failure to comply with statutes,
ordinances, regulations or orders of any government authority. Landlord will
not be liable for any damages (except to the extent resulting from the
negligence or intentional misconduct of Landlord, its agents, employees or
contractors) or for any loss of profits due to the interruption of Tenant's
business for any cause whatsoever, including without limitation fire or other
casualty or unavoidable accident, strikes or lockout.
15. DEFAULT.
15.1 EVENTS OF DEFAULT. Any of the events listed below shall be
an Event of Default: (i) Tenant violates or fails to perform or observe
any covenant, obligation or provision requiring the payment of monies
contained in this Lease and Tenant fails to cure such violation or failure
within five (5) business days after Tenant receives notice of such
violation or failure; or (ii) Tenant violates or fails to perform or
observe any non-monetary covenant, obligation or provision contained in
this Lease, and Tenant fails to cure such violation or failure within
twenty (20) days after Tenant receives notice from Landlord of such
violation or failure (except that Tenant shall have a reasonable period in
excess of 20 days in the event necessary to cure the default, provided
Tenant commences the cure within the 20 day period and diligently
prosecutes the same to completion); or (iii) Tenant files for bankruptcy
or becomes insolvent, or the property of Tenant comes into the
hands of any assignee for the benefit of creditors or anyone acting under
the order of any court; or (iv) Tenant assigns or attempts to assign this
Lease, or Leases or attempts to Lease all or any portion of the Leased
Premises, in violation of this Lease.
15.2 REMEDIES.
15.2.1 TERMINATION/REPOSSESSION. If an Event of
Default shall have occurred and be continuing, Landlord may do either
or both of the following: (i) Landlord may terminate this Lease upon
giving written notice of termination to Tenant; or (ii) Landlord may
enter and repossess the Leased Premises by force, summary
proceedings, ejectment, or otherwise, and may remove Tenant and all
other persons and property from the Leased Premises.
15.2.2 RELETTING. After repossessing the Leased
Premises as provided in this Section 15, whether or not this Lease
has been terminated, Landlord shall have the right, but not the
obligation, to attempt to relet the Leased Premises for the account
of Tenant in the name of Landlord or otherwise, for such term or
terms (which may be greater or less than the period which would
otherwise have been the balance of the term of this Lease) and on
such conditions (which may include concessions or free rent) and for
such uses as Landlord, in its sole discretion, may determine, and may
collect and receive the rent therefor. Any rent received shall be
applied against Tenant's obligations under this Lease, but Landlord
shall not be responsible or liable for any failure to collect any
rent due upon any such reletting.
15.2.3 TENANT'S OBLIGATIONS. Neither the
termination of this Lease nor the repossession of the Leased Premises
by Landlord under this Section 15 shall relieve Tenant of its
liabilities and obligations under this Lease, all of which shall
survive any such termination or repossession. If such termination or
repossession occurs, whether or not the Leased Premises shall have
been relet, Tenant shall pay to Landlord the rent and other sums and
charges to be paid by Tenant up to the time of such termination or
repossession, and thereafter Tenant, until the end of what would have
been the term of this Lease in the absence of such termination or
repossession, shall pay to Landlord, as and for liquidated and agreed
current damages for Tenant's default, the equivalent of the amount of
the annual rent and other sums and charges which would have been
payable under this Lease by Tenant if this Lease were still in
effect, less the net proceeds, if any, of any reletting done under
this Section 15 after deducting all of Landlord's commercially
reasonable expenses as to such reletting, including without
limitation all repossession costs, brokerage and management
commissions, operating expenses, legal expenses, attorneys' fees,
alteration costs, costs of repairs and removal of Tenant's equipment,
fixtures, alterations and other installations, and expenses of
preparation for such reletting. Tenant shall pay such current
damages to Landlord monthly on the days when the annual rent would
have been payable under this Lease if this Lease were still in
effect, and Landlord shall be entitled to recover the same from
Tenant on each such day. At any time after such termination or
repossession, whether or not Landlord shall have collected any
current damages as provided above, Landlord shall be entitled to
recover from Tenant, and Tenant shall pay to Landlord on demand, as
and for liquidated and agreed final damages for Tenant's default, an
amount equal to the then present value of the excess of the annual
rent and other sums or charges reserved under this Lease from the day
of such termination or repossession for what would have been the then-
unexpired term of this Lease if the same had remained in effect, said
present value to be arrived at on the basis of a discount rate of
four percent per annum.
15.2.4 REIMBURSEMENT. In addition to all other
remedies of Landlord, Landlord shall be entitled to reimbursement
upon demand of all reasonable attorneys' fees, court costs and costs
of investigation incurred by Landlord with respect to an event of
Default or enforcement by Landlord of its remedies therefor.
15.2.5 NO LIMITATIONS. The rights, options,
powers, and remedies of Landlord under this Lease shall be cumulative
and in addition to any other rights given to Landlord by law. The
exercise by Landlord of any right, option, power, or remedy shall not
impair Landlord's right to any other rights, options, powers, or
remedies. The passage of time after the occurrence of an Event of
Default shall not limit Landlord's rights, options, powers, or
remedies.
16. ASSIGNMENT & SUBLETTING.
16.1 LANDLORD'S CONSENT. Tenant shall not, voluntarily or
by operation of law, sell, assign, mortgage, or pledge this Lease (each,
an "Assignment"), or sublet the Leased Premises or any part thereof (each,
a "Subletting"), without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. Any change in the
ownership of Tenant (whether by transfer of shares of stock or partnership
interest, or by merger or reorganization) that, when combined with all
transfers and other dispositions since the date of this Lease, exceeds
fifty percent of the ownership interest in Tenant, shall be deemed an
Assignment.
16.2 NO RELEASE. No Assignment or Subletting (with or
without the consent of Landlord) shall release Tenant from its obligations
under this Lease. No consent by Landlord to an Assignment or Subletting
shall be deemed to be a consent to, or relieve Tenant from obtaining
Landlord's consent to, any subsequent Assignment or Subletting. The
collection or acceptance of rent by Landlord from any person or entity
other than Tenant shall not constitute a consent by Landlord to an
Assignment or Subletting.
16.3 AFFILIATES. Notwithstanding the foregoing, Tenant
may, without the consent of Landlord, assign this Lease to any corporation
resulting from the consolidation or merger of Tenant into or with any
other entity, or to any Affiliate. As used in this Lease, the term
"Affiliate" shall mean a person or business entity, corporate or
otherwise, that directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with Tenant. The
word "control" means the right and power, direct or indirect, to direct
the management and policies by ownership of partnership interests or
voting securities. Notwithstanding anything contained herein to the
contrary, the following shall not be deemed an assignment or violation of
this Lease: (a) any public offering of stock of Tenant or (b) the
conversion of Tenant from a publicly held corporation to a privately held
corporation, or vice versa. Notwithstanding anything contained herein to
the contrary, in no event shall Tenant be relieved of any liability
hereunder in the case of any assignment whether or not permitted by
Landlord.
17. SUBORDINATION AND NON-DISTURBANCE. Landlord hereby
reserves the right to subordinate this lease at all times to the lien of any
mortgage or mortgages now placed, or hereinafter placed, upon Landlord's
interest in the Leased Premises and Tenant agrees to enter into any written
agreement, at Landlord's request, which will subordinate this lease to any such
mortgage; provided, however, that Landlord's rights and Tenant's obligations
under this Section 17 are contingent upon the proposed mortgagee entering into
a commercially reasonable non-disturbance and attornment agreement with Tenant.
18. SIGNS. Tenant shall affix to or display from any part of
the outside of the building on the Leased Premises only signs and
advertisements which comply with all applicable laws, ordinances and
regulations and are reasonable and customary in the business. Landlord agrees
to join with and cooperate with Tenant in securing the necessary permits and
other authorizations for the erection and maintenance of signs. Tenant shall
remove all of its signage from the Leased Premises upon the expiration or
earlier termination of this Lease and shall repair all damage caused by the
installation and/or removal thereof.
19. NOTICE. All notices required or furnished under this Lease
shall be mailed by U.S. certified mail, postage prepaid, and addressed as
follows, until such addresses are changed by 30 days' notice in writing:
LANDLORD: Xxxxx-Xxxxxx and Company
c/o G.A. Xxxxxx
0000 Xxxxxxxx Xxxxxxx
Xxxxx, XX 00000
TENANT: CIMA LABS INC.
Attn: Xxxxx Xxxxxxxx
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Notices shall be effective upon the earlier of (i) delivery to (or rejection
by) the addressee or (ii) the third business day after deposit in the mail in
accordance with the above.
20. FIXTURES & EQUIPMENT.
20.1 TELEPHONES. Tenant accepts the current telephone system
serving the premises in its "as is" condition, acknowledging that Landlord
makes no warranties or representations as to the condition or utility of
the same. Tenant shall be responsible for all repairs and maintenance of
the telephone system. If Tenant desires to replace the telephone system,
it may do so pursuant to plans and specifications approved by Landlord
(which approval shall not be unreasonably withheld or delayed) and
provided that the new telephone system shall be considered a fixture of
the Leased Premises which must be abandoned in place by Tenant, in good
condition and repair, upon Tenant's surrender of the Leased Premises.
Notwithstanding the foregoing, Tenant shall be allowed to remove any new
telephone system which it installs to replace a previous system if, and
only if, Tenant commenced to install such new system within eighteen (18)
months before the expiration of then-current term of this Lease. If
Tenant has the right to remove said system, Tenant shall replace said
newest telephone system with the telephone system which served the Leased
Premises immediately prior to the installation of the newest telephone
system, provided that Tenant shall not be obligated to abandon in place
any current main-frame computer units or servers which serve substantive
purposes other than providing the telephone services. However, it is the
intent of the parties hereunder that when the Leased Premises are
surrendered by Tenant, the Leased Premises shall contain a fully
operational telephone system.
20.2 MODULAR PARTITION SYSTEMS. Tenant accepts the current
modular partition systems in the Leased Premises in their "as is"
condition, acknowledging that
Landlord makes no warranties or representations as to the condition or
utility of the same.
20.3 REMOVAL. All fixtures, equipment and furniture installed
or placed on the Leased Premises by Tenant, whether attached to the
building or not, may be removed by Tenant provided that Tenant is not in
default under this Lease or in default on any other obligation that Tenant
has with Landlord. Tenant, at its expense, shall repair any damage to the
Leased Premises caused by such removal.
21. ADDITIONAL REPRESENTATIONS. Tenant represents that (a) it is
duly organized and in good standing under the laws of the State of Delaware;
(b) it has full power and authority to enter into this Lease and to perform its
terms; (c) its directors and shareholders have duly authorized Tenant's
officers to execute this Lease and to perform its terms; and (d) it is
authorized to do business in the state where the Leased Premises are located.
Landlord represents that (a) it is duly organized and in good standing under
the laws of the State of Minnesota; (b) it has full power and authority to
enter into this Lease and to perform its terms; (c) its partners have duly
authorized Landlord to execute this Lease and to perform its terms; and (d) it
is authorized to do business in the state where the Leased Premises are
located.
22. NON-WAIVER. No waiver of any default of Tenant or of Landlord
hereunder shall be implied from any omission by the non-defaulting party to
take any action on account of such default if such default persists or is
repeated. One or more waivers by Landlord shall not be construed as a waiver
of a subsequent breach of the same covenant, term or condition. The consent to
or approval by Landlord of any act by Tenant requiring Landlord's consent or
approval shall not waive or render unnecessary Landlord's consent to or
approval of any subsequent similar act by Tenant. Time is of the essence of
each and every provision of this Lease.
23. WORDS AND PHRASES. Words used in this instrument in the
masculine gender include feminine and neuter, the singular number includes the
plural and the plural the singular wherever the context so requires.
24. HAZARDOUS MATERIALS.
24.1 IN GENERAL. Tenant shall not use, transport, store,
maintain, generate, manufacture, handle, release or discharge and
Hazardous Materials upon, about or under the Leased Premises, or permit
Tenant's employees, agents, contractors, invitees or other visitors or
occupants of the Leased Premises to engage in such activities on or about
the Leased Premises. However, the foregoing shall not prohibit the
transportation to and from, and the lawful and compliant use, storage and
handling within the Leased Premises of substances customarily used in the
business or activity expressly permitted to be undertaken in the Leased
Premises provided (a) such substances shall be used and maintained only in
such quantities as are reasonably necessary for such permitted use and in
the ordinary course of
Tenant's business, (b) such substances shall be
used and maintained only in strict accordance with all applicable federal,
state and local Laws and the highest prevailing standards of Tenant's
industry and the insurance industry, as well as in strict accordance with
the manufacturer's instructions and recommendations therefor, (c) such
substances shall not be disposed of, released or discharged in or about
the Leased Premises, and shall be safely transported away from the Leased
Premises in compliance with all applicable Laws and industry
recommendations, and as Landlord shall reasonably require, (d) all such
substances shall be completely, properly and lawfully removed from the
Leased Premises upon the expiration or earlier termination of this Lease,
and (e) for purposes of removal and disposal of any such substances,
Tenant shall be named as the owner and generator, obtain a waste generator
identification number, and execute all permit applications, manifests,
waste characterization documents and any other forms required by Laws.
Within thirty (30) days after the date hereof, Tenant shall deliver to
Landlord a complete listing of any Hazardous Materials to be used, stored,
handled or generated within the Leased Premises.
24.2 NOTIFICATION. Tenant shall immediately notify Landlord of
(i) any enforcement, cleanup or other regulatory action or threatened
action by any governmental or regulatory authority with respect to the
presence of any Hazardous Materials on the Leased Premises or the
migration thereof from or onto the Leased Premises, (ii) any demands or
claims made or threatened by any party relating to loss or injury from any
Hazardous Materials on the Leased Premises, (iii) any release, discharge
or non-routine, improper or unlawful disposal or transportation of any
Hazardous Materials on or from the Leased Premises in violation of this
Lease and (iv) any matters where Tenant is required by Law to give a
notice to any governmental or regulatory agency respecting any Hazardous
Materials on the Leased Premises. By no later than the lease anniversary
date each year, Tenant shall provide Landlord with a written list,
certified to be true and complete, identifying any Hazardous Materials
then used, stored, transported, maintained or generated on or in the
Leased Premises and the use and approximate quantity of each such
substance.
24.3 DEFINITION. The term "Hazardous Materials" for purposes
hereof shall mean any chemical, substance, compound, material or waste or
component thereof which is now or hereafter listed, defined or regulated
as a hazardous or toxic chemical, substance, compound, material or waste
or component thereof by any federal, state or local governing or
regulatory body having jurisdiction, or which would trigger any employee
or community "right-to-know" requirements adopted by such body.
24.4 CLEAN-UP. If any Hazardous Materials are released,
discharged or disposed of by Tenant or its employees, agents, contractors,
invitees or other visitors or occupants of the Leased Premises in
violation of the foregoing requirements, Tenant shall immediately,
properly and in compliance with all applicable Laws clean up and remove
the Hazardous Materials and clean or replace any affected property at
Tenant's expense (without limiting Landlord's other remedies therefor).
Such clean up and removal shall be subject to Landlord's prior written
approval (except in emergencies), and shall include, without limitation,
any testing, investigation and preparation and implementation of any
remedial action plan required by any court or governmental or regulatory
authority with jurisdiction, all at Tenant's expense and using qualified
contractors and specialists acceptable to Landlord.
24.5 TENANT'S INDEMNIFICATION. In addition to the foregoing, if
the presence of any Hazardous Material on the Leased Premises has arisen
out of the action of Tenant or Tenant's agents, employees, contractors or
business invitees, Tenant shall indemnify, defend, protect and hold
harmless Landlord from any and all direct damages, sums paid in settlement
of claims, judgments, claims, clean up costs, penalties, fines, costs,
liabilities, losses or expenses (including without limitation commercially
reasonable attorneys, consultants and expert fees and any fees incurred by
Landlord to enforce the indemnity) which are a direct result of any such
release or contamination of the Leased Premises, including without
limitation, any and all commercially reasonable costs incurred in
connection with any investigation of site conditions or any clean up,
remedial, removal or restoration work required by any Federal, State or
local governmental agency or political subdivision because of Hazardous
Materials present in the soil or ground water on, under or originating
from the Leased Premises.
24.6 LANDLORD'S INDEMNIFICATION. If the presence of any
Hazardous Material on the Leased Premises has arisen out of the action of
Landlord or Landlord's employees, agents, contractors or business
invitees, Landlord shall indemnify, defend, protect and hold harmless
Tenant from any and all direct damages, sums paid in settlement of claims,
judgments, damages, clean up costs, penalties, fines, costs, liabilities,
claims, losses or expenses (including without limitation commercially
reasonable attorneys, consultants and expert fees and any fees incurred by
Tenant to enforce the indemnity) which are a direct result of any such
release or contamination of the Leased Premises, including without
limitation, any and all commercially reasonable costs incurred in
connection with any investigation of site conditions or any clean up,
remedial, removal or restoration work required by any Federal, State or
local governmental agency or political subdivision because of Hazardous
Materials present in the soil or ground water on, under or originating
from the Leased Premises. Tenant shall be excused from all obligations
under the Lease during any period of time that Tenant is unable to
operate because of Hazardous Material present in the Leased Premises as a
result of the actions of Landlord, its agents, employees or contractors.
If Tenant is unable to operate, as a result of Landlord's violation of the
foregoing provision, for a period of more than ninety (90) days, Tenant
shall have the right to terminate this Lease and Landlord shall reimburse
Tenant for all of Tenant's actual out-of-pocket costs relating to
leasehold improvements, fixtures, closing and relocation expenses.
25. MISCELLANEOUS.
25.1 SUCCESSORS. The terms and conditions of this Lease shall
be binding upon the heirs, successors, personal representatives and
assigns of the respective parties. If Tenant is two or more persons,
their liability under this Lease shall be joint and several.
25.2 ENTIRE AGREEMENT. This Lease (together with the attached
exhibits and guaranty, if any), reflects the entire agreement of the
parties, and no representations, inducements or agreements, whether oral
or otherwise, between the parties not contained in this Lease shall be of
any force or effect. This Lease may be modified only by a writing which
is executed and delivered by both parties, and which explicitly says it
modifies this Lease. If any provision of this Lease shall, to any extent,
be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby, and every other provision of this Lease shall be valid
and enforced to the fullest extent permitted by law.
25.3 NO OFFER. By submitting this document to Tenant, Landlord
is not offering to Lease the Leased Premises to Tenant, promising to
reserve the Leased Premises for Tenant, or giving Tenant an option to
Lease the Leased Premises. This Lease shall not be binding on either
party until it has been executed and delivered by both Landlord and
Tenant.
25.4 FINANCIAL STATEMENTS. Tenant agrees to furnish Landlord
with (i) a copy of each Form 1O-Q and Form 10-K (each, a "Form") (or
reasonably similar public documents should the nomenclature for such
documents be changed) that it files with the United States Securities and
Exchange Commission (the "SEC") during the term of this Lease (including
any extensions thereof) and (ii) a copy of each "Annual Report" that it
sends to shareholders during the term of this Lease (including any
extensions thereof). Tenant shall send to Landlord's then-current notice
address a copy of a given Form within thirty (30) days of filing the Form
with the SEC and a copy of a given Annual Report at such time as the
document is distributed to shareholders.
25.5 NO PARTNERSHIP. Landlord shall not be in any sense a
partner of Tenant in the conduct of Tenant's business, and the
relationship between the parties hereto shall be solely that of Landlord
and Tenant.
IN WITNESS WHEREOF, the parties have executed this Lease as of the
date first written above.
LANDLORD:
XXXXX-XXXXXX AND COMPANY
By: /s/ Xxx Xxxxxx
------------------------------
Its:
------------------------------
TENANT:
CIMA LABS INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Its: V.P. Finance & CFO
------------------------------
EXHIBIT A
LEGAL DESCRIPTION
Xxx Xxx (0), Xxxxx Xxx (0), Xxxxx'x Xxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxx
