EXHIBIT 10.39
LEASE AGREEMENT DATED MARCH 1, 1997
Exhibit 10.39
* Portions of this agreement marked "[TEXT REDACTED]*" indicate
portions that have been omitted from this agreement and filed
separately with the Commission pursuant to a Confidential Treatment
Request.
LEASE AGREEMENT
This is a Lease, which is effective as of the 1st day of March,
1997. The names and addresses of the parties are as follows:
NAME ADDRESS DESIGNATION
NaPro Bio Therapeutics, Inc. 0000 Xxxxx Xxxx, Xxxx X
Xxxxxxx, XX 00000 Lessee
Xxxxxxx Nursery, Inc. 00000 Xxxxxx
Xxxxx Xxxxx, XX 00000 Lessor
BACKGROUND INFORMATION
A. Lessor is the owner of a parcel of real property located in
Xxxxxxxx Township, Ottawa County, Michigan, together with certain
improvements located thereon.
B. Lessee wishes to lease such property, including the
improvements, and the Lessor has agreed to lease such property and
improvements to the Lessee.
C. The Lessee has purchased certain [TEXT REDACTED]* Trees and
[TEXT REDACTED]* Trees from the Lessor pursuant to an Agreement for
Sale and Purchase of Nursery Stock dated March 1, 1997 between the
parties ("Purchase Agreement").
D. The parties have entered into a Culture Agreement of even
date herewith, pursuant to which the Lessor has agreed to transplant
and care for the trees purchased under the Purchase Agreement and for
certain additional trees. The Culture Agreement requires that the
Lessee lease the property described herein from the Lessor for the
purpose of transplanting and growing all or certain of such trees
thereon.
E. The parties acknowledge that their obligations hereunder
will commence as soon as the leased premises are needed for the
transplanting which will occur (under the Culture Agreement) between
January 1, 1997 and June 30, 1997 and that a substantially similar
lease for additional real property may be executed by the parties for
the purpose of transplanting certain trees (under the Culture
Agreement) between January 1, 1998 and June 30, 1998.
X. Xxxxxx and Lessee wish to define the terms of their
agreement and commit it to writing.
AGREEMENT
For their mutual convenience and protection, and in consideration
of the mutual covenants and benefits contained in this Agreement, the
receipt and adequacy of which is hereby acknowledged, Lessor and
Lessee mutually agree as follows:
SECTION ONE: GENERAL AGREEMENT
1.1 Leased Premises. Lessor leases to Lessee and Lessee leases
from Lessor, the real property described in Exhibit 1.1 (attached
hereto and made a part hereof) together with all improvements located
thereon (collectively referred to as the "Premises").
SECTION TWO: TERM
2.1 Term. The term of this Lease shall begin immediately and
automatically upon the preparation, use, or occupancy of any portion
of the Premises for the purpose specified in paragraph 4.1, but no
later than June 30, 1997. The parties shall endeavor to execute a
written certification specifying such date; however, the parties
failure to execute such a certification shall not affect the
commencement of the term. The term of this Lease shall expire at
11:59 p.m. on February 28, 2006. The term of this Lease shall also
include any extensions of this Lease for any period of time as agreed
to by the parties.
SECTION THREE: RENTAL
3.1 Rental. The rent for the Premises is [TEXT REDACTED]* per
acre for each year during the term of this Lease. The parties have
agreed that the Premises consists of [TEXT REDACTED]* acres, and
therefore that (I) the total rent for the Premises for each year of
the Lease term is [TEXT REDACTED]*, and (ii) that the total rent for
the Premises for each month of the Lease term is [TEXT REDACTED]*.
Such monthly rental payment shall be paid in addition to any other
sums expressly agreed to be paid by the Lessee under this Lease and
shall be payable in advance on the first day of each month during the
term of the Lease. If the term of the Lease begins on a date other
than the first day of the month, the monthly installments of the rent
for the first and last fractional months of the term of this Lease
shall be prorated in the proportion that the number of days of
Lessee's tenancy bears to thirty (30 days).
SECTION FOUR: USE AND COMPLIANCE WITH LAW
4.1 Use. The Lessee shall use the Premises for the purpose of
transplanting, growing and culturing the Taxus Media Hicksii Trees
delivered to the Lessor under the Culture Agreement (which Trees
include those Taxus Media Hicksii Trees purchased from Xxxxxxx under
the Purchase Agreement and those other Taxus Media Hicksii Trees which
have not been purchased from Xxxxxxx but which have been delivered to
Xxxxxxx for care under the Culture Agreement). Lessee shall comply
with the statutes and regulations of Michigan and of the United
States, and any and all ordinances and regulations of any other
governmental body having jurisdiction over the Premises. The Lessee
shall further comply with all health, fire, and police rules and
regulations affecting the Premises.
SECTION FIVE: LESSEE'S IMPROVEMENTS AND PERSONAL PROPERTY
5.1 Improvements. The Lessee and the Lessor acknowledge that the
Lessor will be caring for the Premises and all crops and trees thereon
pursuant to the terms of the Culture Agreement. Therefore, the Lessor
shall have the right to construct and erect any fences or other
improvements on the Premises as the Lessor shall deem appropriate and
necessary to perform its obligations under the Culture Agreement. All
such fences, buildings, and other improvements shall remain the
property of the Lessor as of the expiration or earlier termination of
this Lease.
5.2 Personal Property. The Lessor shall have the right to place
on the Premises any personal property or equipment as the Lessor shall
deem necessary or appropriate to perform its obligations under the
Culture Agreement. Any such property or equipment shall remain the
sole property of the Lessee and may be removed by the Lessee at any
time during the Lease or at its termination. Any such personal
property which is not removed as of the termination of this Lease
shall be deemed abandoned by the Lessee and shall thereupon become the
absolute property of the Lessor.
SECTION SIX: LESSEE'S TREES
6.1 Ownership. The Lessee shall have the right to transplant on
to the Premises trees for culture pursuant to the terms of the Culture
Agreement. Subject to the terms of the Purchase Agreement and the
Culture Agreement, any and all trees grown or maintained on the
Premises by the Lessee, shall be the sole property of the Lessee, and
may be harvested and removed from the Premises pursuant to the
Lessee's instructions under the Culture Agreement at any time during
the term of this Lease.
SECTION SEVEN: QUIET ENJOYMENT
7.1 General. If the Lessee pays the rent and performs all of
the covenants and agreements on its part to be performed pursuant to
this Agreement, Lessor agrees that Lessee shall have peaceful and
quiet enjoyment of the Premises. Lessor agrees that Lessee's rights
to lease the Premises shall be exclusive and that Lessor will not
lease any interest in or portion of the Premises, including but not
limited to any oil, gas, or mineral interests, to any other party
during the term of this Lease.
SECTION EIGHT: ASSIGNMENT AND SUBLETTING
8.1 Prohibition Without Consent. This Lease shall not be
assigned, nor shall any part of the Premises be sublet by the Lessee
without the prior written consent of the Lessor, unless the rights of
the Lessee under the Purchase Agreement and the Culture Agreement have
also been assigned with the consent of the Lessor. If such assignments
have occurred with the consent of the Lessor, then the Lessor's
consent to the assignment of this Lease shall not be unreasonably
withheld.
SECTION NINE: TAXES
9.1 Real Property. During the term of this Lease, the Lessor
shall pay promptly, before any penalties or interest charge attach,
all general real estate taxes and installments of special assessment
and any other governmental charges levied upon the Premises; provided,
however, that the Lessor reserves the right to withhold any such
payments in the event of a bona fide dispute (between the Lessor and
the taxing authority) regarding the same. The Lessor shall provide
proof of such payments to the Lessee upon request. If the Lessor
fails to make any such payments, then in the absence of a bona fide
dispute (between the Lessor and the taxing authority), Lessee shall
have the option to make such payments on behalf of the Lessor and
deduct such amounts from the rental payable hereunder and/or collect
such amounts from the Lessor immediately.
9.2 Personal Property. Lessor shall pay all personal property
taxes assessed against the personal property owned by the Lessor and
located on the Premises which is assessable for personal property tax
purposes.
9.3 Trees. Lessee shall pay all personal property taxes assessed
against the Trees located on the Premises which are accessible for
personal property tax purposes.
SECTION TEN: UTILITY SERVICES
10.1 General. Lessor shall make payment for all gas,
electricity, water, sewer, and any and all other public utilities used
or consumed on the Premises during the term of this Lease. Lessor
shall be reimbursed therefor by the Lessee pursuant to the terms of
the Culture Agreement.
SECTION ELEVEN: REPAIRS AND MAINTENANCE
11.1 General. Lessor shall make and pay for all repairs,
alterations, and maintenance of the buildings, structures, and
improvements owned by the Lessor on the Premises. Lessor shall be
reimbursed therefor by the Lessee pursuant to the terms of the Culture
Agreement.
SECTION TWELVE: EMINENT DOMAIN
12.1 Rent and Termination. In the event that any part of the
Premises is taken by condemnation, eminent domain proceedings, the
rent payable thereafter shall be decreased in proportion to the
portion of the Premises taken. However, if all of the Premises are
taken, or if the taking precludes the Lessee from reasonably using the
Premises for its farming and growing operations, this Lease shall
terminate at the time possession must be surrendered, and the Lessee
shall be relieved of all future rental payments. Lessor shall not
voluntarily sell the Premises or any part thereof in connection with
any such proceedings that may be threatened or instituted without
giving Lessee the opportunity to resist such condemnation at Lessee's
expense, in which case the Lessor shall resist such proceedings (if
requested to do so by Lessee) at Lessee's expense in the court or
forum having jurisdiction thereof.
12.2 Lessee Rights. In addition to the Lessee's rights as
provided in paragraph 12.1, Lessee shall have the right to collect
from the condemning authority damages by reason of loss of business,
business interruption, depreciation or damage of crops, fixtures and
equipment, removal and planting costs, and such other damages to which
it may be legally entitled.
SECTION THIRTEEN: ENVIRONMENTAL CONTAMINATION
13.1 Warranty. The Lessee warrants that it will comply with all
federal, state, and local rules, regulations, statutes, and ordinances
pertaining to the protection of the environment in conducting any
activities on the Premises.
13.2 Indemnification. The Lessee agrees to defend and indemnify
the Lessor against any obligations, costs, and liabilities (including
but not limited to reasonable attorneys' fees) relating to the
Premises arising out of claims for investigation, study, remedial
work, monitoring, or other costs or expenses regarding any
environmental contamination of the Premises caused by the Lessee,
including but not limited to groundwater or soil contamination, water
pollution, air pollution, personal injury, or property damage.
SECTION FOURTEEN: INSURANCE
14.1 Public Liability and Indemnity. Lessee shall indemnify and
save harmless Lessor from any liability for any loss, damage, injury,
or other casualty to persons or property caused or occasioned by or
arising from any act, use, occupancy, or negligence by or of Lessee or
any of its agents, servants, visitors, licensees, or employees
occurring during the term of this lease or any extended term. If any
action or proceedings are brought against the Lessor by reason of any
such claim, Lessee on timely notice from Lessor shall resist and
defend such action or proceedings by counsel employed by the Lessee,
which shall include the taking of all permissible appeals, unless full
release of expense is obtained by way of settlement of compromise at
the expense of Lessee or its insurance carrier.
The Lessee shall furnish to Lessor a certificate or other
evidence indicating that Lessee has had issued to it a policy or
policies of insurance insuring against damage to property in the
minimum amount of One Million Dollars ($1,000,000.00) in bodily
injury, including death, and the minimum amount of One Million Dollars
($1,000,000.00) for injury to one (1) person and One Million Dollars
($1,000,000.00) for injury to more than one (1) person, in one
accident or occurrence, naming Lessor as additional insured, and the
Lessee shall pay all premiums thereon and furnish evidence of such
payments to Lessor, if requested to do so.
14.2 Insurance on Buildings of Lessor. Lessor shall, at its
expense, insure any buildings, structures, or improvements owned by
Lessor on the Premises against loss or damage under a policy or
policies of fire and extended coverage insurance, including
"additional perils". Such policy or policies shall contain appropriate
clauses or endorsements under which the insurer waives all right of
subrogation against Lessee, its agents, employees, invites, and
licensees with respect to losses payable under such policy or
policies. In addition, Lessor hereby waives all rights of recovery
which it might otherwise have against Lessee, its agents, employees,
invites, or licensees for any loss or damage to the property which is
covered by said policy or policies, notwithstanding that such loss or
damage may result from the fault or negligence of Lessee, its
employees, invites, or licensees. Such policy or policies shall be
issued in an amount equal to the estimated replacement value of all
buildings, structures, and improvements owned by the Lessor on the
Premises. Lessor shall furnish proof of such policy or policies upon
request to the Lessee.
14.3 Lessee's Personal Property. Any personal property, trees,
or crops kept on the Premises by Lessee shall be at the Lessee's sole
risk and responsibility. Any insurance maintained by Lessee on such
personal property shall contain a clause or endorsement under which
the insurer waives all right of subrogation against Lessor, its agents
or employees, with respect to losses payable under the policy, and
Lessee hereby waives all right of recovery which it might otherwise
have against Lessor, its agents or employees for any damage to its
personal property which is covered by a policy of insurance regardless
of the amount of such insurance, notwithstanding that such damage may
result from the negligence or fault of Lessor, its agents or
employees.
14.4 Failure to Obtain Insurance. If Lessee or Lessor, at any
time during the term of this Lease, fails to secure or maintain the
insurance as required in this section, the other party shall be
permitted to obtain such insurance and shall be compensated by the
defaulting party for the cost of the insurance premiums immediately,
and, in the case of payments made by the Lessee in such case, shall be
entitled to deduct such amounts from the rental payable hereunder.
SECTION FIFTEEN: RENEWAL AND EXTENSION OF LEASE
15.1 Terms. For and in consideration of the sum of one dollar
($1.00), paid by the Lessee to the Lessor, the receipt of which hereby
acknowledged, the Lessor hereby grants to the Lessee the exclusive
right and option to renew this Lease for two separate five (5) year
renewal terms on the same terms and conditions of this Lease except as
otherwise provided below in paragraph 15.2; provided, however, that
the Lessee shall not be entitled to renew the Lease for any renewal
term unless the Lessee simultaneously renews the Culture Agreement for
a renewal term of the same duration. In the event that the Lessee
elects to exercise such option, the Lessee shall serve the Lessor with
a written notice of election to renew, not less than one hundred
eighty (180) days before the end of the original term of this Lease.
Upon receipt of such notice by the Lessor, this Lease shall remain in
full force and effect for the renewal term. If Lessee elects not to
renew this Lease and remains in possession following the end of the
term of this Lease, the Lessee shall be a tenant from month to month,
unless the parties otherwise agree in writing.
15.2 Rental During Renewal Terms. If this Lease is renewed
pursuant to the provisions of paragraph 15.1, the rent for each
renewal term shall be agreed upon by the Lessor and the Lessee, and
shall be documented in a writing signed by the Lessor and the Lessee
prior to the beginning of any such renewal term. If the Lessor and
the Lessee cannot agree on the amount of the rent before the
commencement of the renewal term, then the rent hereunder shall be the
fair market rental value of the Premises as determined by an appraiser
who shall be selected as follows: (1) one appraiser shall be selected
by the Lessor, and one shall be selected by the Lessee. The two
appraisers shall each agree upon and select a third appraiser, who
shall conduct the appraisal. The appraisal conducted by the selected
appraiser shall be binding upon the Lessor and the Lessee hereunder
and the Lessor and the Lessee shall each be responsible to pay
one-half (1/2) of the costs and fees associated with such appraisal.
SECTION SIXTEEN: DEFAULT
16.1 Default in General. If the Lessee defaults in the payment
of rent when due, or if the Lessee violates or neglects to fulfill any
of the covenants and agreements under this Agreement or under the
Culture Agreement or under the Spring Agreements, and such default
continues for thirty (30) days after written notice by the Lessor to
the Lessee specifying the breach or default, the Lessor and his
attorney(s), heir(s), representative(s), or assign(s) shall have the
right to: (1) terminate this Lease, to re-enter into and to repossess
the Premises and to remove and put out Lessee and each and every other
occupant either by summary proceedings or other lawful means and to
recover immediately those damages permitted by law, and/or (2)
terminate the Lessee's right of possession, repossess the Premises,
and without terminating this Lease, relet the Premises, and recover
its damages from time to time as permitted by law.
16.2 Removal Rights. Notwithstanding the foregoing paragraph
16.1, if the Lessee defaults and the Lessor invokes its rights under
this paragraph, and if the Lessee pays to the Lessor all past due
rental payments and other sums due to the Lessor hereunder as well as
the rentals due hereunder for ninety (90) additional days, the Lessee
shall have the right to care for, harvest, and remove within ninety
(90) days from the date of termination of this Lease, any trees
growing or cared for on the Premises at the time of the termination of
this Lease. Any rights of the Lessor, any subsequent Lessee or, any
other party with a subsequent interest in the Premises, with regard to
the Premises shall be subject to such rights of the Lessee.
16.3 Abandonment. Any trees, crops, or personal property which
remain on the Premises as of the termination of this Lease (or as of
the date 90 days thereafter if the Lessee invokes its rights under
paragraph 16.2) shall be deemed to be abandoned by the Lessee and the
Lessor shall automatically take title thereto. Even though the
Lessor's ownership rights are self-executing, the Lessee agrees to
execute such documents as may be necessary to affirm or give notice of
such transfer of title.
SECTION SEVENTEEN: FIRE AND CASUALTY
17.1 General. If any buildings, structures, or improvements
owned by the Lessor are damaged by fire or by the elements or other
casualty, Lessor, as soon as reasonably may be done, shall
reconstruct, repair or rebuild the same to the extent necessary to
make them substantially similar in character and value to their status
prior to the damage. If such loss renders the Lessor's buildings,
structures, or improvements totally unusable to the extent that they
cannot be used by the Lessee, rent shall xxxxx until said buildings,
structures, or improvements are put back in a condition substantially
similar to their condition immediately prior to the loss. However, if
such buildings, structures, or improvements are partially destroyed by
fire or the elements or other casualty, and are not rendered totally
unusable by Lessee, the Lessee shall pay that proportion of the rental
as the part of the Lessor's buildings, structures, improvements that
may be used for the business of the Lessee bears to the whole thereof.
SECTION EIGHTEEN: RIGHT OF ENTRY
18.1 Lessor Rights. Lessor and its agents shall have the right
to enter the Premises at such reasonable times as will not interfere
with the Lessee's normal use thereof, for the purposes of inspection
or repair, or other purposes as permitted by Lessee.
SECTION NINETEEN: SUBORDINATION; ATTORNMENT;
ESTOPPEL CERTIFICATE
19.1 Subordination. This Lease shall be subject and subordinate
to the interests of the holders of any notes secured by mortgages on
the Premises, now or in the future, and to all ground or underlying
leases and to all renewals, modifications, consolidations,
replacements and extensions thereof, and while the provisions of this
section are self-executing, Lessee shall execute such documents as may
be necessary to affirm or give notice of such subordination.
19.2 Attornment. Lessee shall attorn to any foreclosing
mortgagee or to any purchaser of the Premises at any foreclosure sale,
or sale in lieu of foreclosure, for the balance of the term of the
Lease on all of the terms and conditions herein contained.
19.3 Estoppel Certificate. At the Lessor's request, the Lessee
shall, within ten (10) days deliver to the Lessor, or anyone
designated by the Lessor, a certificate stating and certifying such
information as may be reasonably requested to verify the status of the
Lessor/Lessee relationship established by the Lease.
LESSOR'S COSTS
20.1 General. Any costs or expenses hereunder which are required
to be borne by the Lessor hereunder may be charged back to the Lessee
to the extent permitted under the terms of the Culture Agreement.
SECTION TWENTY-ONE: MISCELLANEOUS
21.1 Copies. This Lease may be executed in multiple
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
21.2 Captions. The captions in this Lease are for convenience
only and shall not be considered as part of this Lease or in any way
limiting or amplifying the terms and provisions hereof.
21.3 Definitions. Words used in the singular number shall
include the plural number; words used in the plural number shall
include the singular number. The use of pronouns or other terms
referring to the male gender shall include the female and/or neuter
gender, and use of pronouns or other terms referring to the female
gender shall include the male gender. Reference to any person or
gender shall include the male gender. Reference to any person or
entity herein is presumed by any designation of such person or entity.
The word "person" includes a firm, association, partnership, joint
venture, corporation, trust or equivalent entity or a combination of
them as well as a natural person.
21.4 Benefit. This Lease shall inure to the benefit of and be
binding upon the Lessor, its or their personal representatives, heirs
and assigns, and the Lessee, its successors and assigns.
21.5 Notice. Any notice, reports or statements required to be
given hereunder shall be sufficiently given if sent by certified
United States mail, return receipt requested, to the parties, at their
addresses set forth on page one. The notice shall be effective when
deposited in such mail.
21.6 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto and may be amended or terminated
only by a writing signed by each party unless otherwise set forth
herein.
21.8 Michigan Law. This Agreement shall be governed by and
construed according to the laws of the State of Michigan.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year above provided.
XXXXXXX NURSERY, INC.
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Vice President
NAPRO BIOTHERAPEUTICS, INC.
/s/ Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
