EXHIBIT 10.19
SUBLEASE AGREEMENT AND LESSOR CONSENT
AGREEMENT OF SUBLEASE AND LESSOR CONSENT (this "SUBLEASE AGREEMENT")
made as of the 1st day of April, 2004 by and among Xxxxx Laboratories, Inc., a
Texas corporation d/b/a Xxxxx Respiratory Therapeutics (the "SUBLESSEE"),
Cardinal Health PTS, LLC, a Delaware limited liability company (the
"SUBLESSOR"), and The Estate of Xxxxx Xxxxxxxx, Deceased ("LESSOR").
W I T N E S S E T H:
WHEREAS, CCP Investment Properties, Ltd., a Texas limited partnership
("ORIGINAL LANDLORD") and Sublessee have previously executed a document entitled
"Industrial Lease Agreement" (as amended as described below, the "LEASE") with
regard to 71,108 square feet of lease space currently occupied by Sublessor
located at 00000 Xxxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxx (the "ORIGINAL PREMISES");
and
WHEREAS, Original Landlord and Sublessee previously executed a document
entitled "Amendment to Industrial Lease Agreement" dated October 29, 1990, and
AEW # 14 Corporation, as successor landlord, and Sublessee executed a document
entitled "Second Amendment to Industrial Lease Agreement" dated March 15, 1991,
both of said amendments relating to the security deposit due under the terms of
the Lease; and
WHEREAS, Metropolitan Life Insurance Company, as successor landlord
("METROPOLITAN"), and Sublessee executed a document entitled "Third Amendment to
Industrial Lease Agreement" dated January 27, 1993 (the "THIRD AMENDMENT") which
amendment added 36,020 square feet of "Expansion Premises" to the Original
Premises; and
WHEREAS, Metropolitan and Sublessee executed a document entitled
"Fourth Amendment to Industrial Lease Agreement" dated July 27, 1993 (the
"FOURTH AMENDMENT"), which amendment added 3,000 square feet of "Second
Expansion Space" to the Original Premises so that the premises covered by the
Lease, as amended by the Third Amendment and the Fourth Amendment, totaled a sum
of 110,128 square feet; and
WHEREAS, Metropolitan and Sublessee executed a document entitled "Fifth
Amendment to Industrial Lease Agreement" on January 19, 1995 (the "FIFTH
AMENDMENT") which amendment added 36,020 square feet of "Third Expansion Space"
to the Premises; and
WHEREAS, Metropolitan and Medeva Pharmaceuticals, Inc. ("MEDEVA"), as
successor to Xxxxx Laboratories, Inc., and Xxxxx Laboratories, Inc., an entity
then-new to the Lease and now being Sublessee, executed a document entitled
"Partial Assignment and Sixth Amendment to Industrial Lease Agreement" dated
February 25, 1998, by which document, among other matters, 1) Sublessee assumed
the terms of the Lease as to the Premises as contemplated by the Fourth
Amendment, 2) Medeva remained tenant
under the Lease as to the 36,020 of "Third Expansion Space" as discussed in the
Fifth Amendment, and as to which space the Lease has terminated, and 3) the
Lease Term was extended so as to terminate on January 31, 2006 (Terms used and
not otherwise defined herein shall have the meaning ascribed to them in the
Lease); and
WHEREAS, Sublessee and Lessor agreed in a document entitled "Seventh
Amendment to Industrial Lease Agreement" dated June 1, 2002 (the "SEVENTH
AMENDMENT") that the Third Expansion Space was no longer subject to the terms of
the Lease and to add 20,000 square feet to the Premises, so that as of June 1,
2002 the Premises consisted of 130,128 square feet (the "PREMISES"); and
WHEREAS, pursuant to an Assignment and Assumption Agreement and Lessor
Consent dated March 24, 2004, Sublessee assigned all of its rights and
obligations under the Lease to Sublessor and Sublessor assumed all of such
obligations; and
WHEREAS, Sublessee desires to sublease from Sublessor approximately
7,500 square feet of space in the Building plus approximately 1,040 square feet
or warehouse space and Sublessor desires to sublease such space to Sublessee;
and
WHEREAS, Lessor desires to consent to such sublease.
NOW, THEREFOR, in consideration of the premises, which are incorporated
herein by reference, and of the terms, conditions and covenants set forth herein
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Subleased Premises. Sublessor hereby sublets to Sublessee, and
Sublessee hereby subleases from Sublessor, approximately 8,540 square feet of
209,088 space located at 00000 Xxxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxx (the "SUBLEASED
PREMISES"), as further described on EXHIBIT A, attached hereto and incorporated
herein by reference.
2. Term of Sublease.
The initial term (the "TERM") of this Sublease Agreement shall
commence on April 1, 2004 (the "COMMENCEMENT DATE"), and shall end on the
earliest to occur of: (i) January 31, 2006; or (ii) the date of termination
under that certain Supply Agreement dated of even date herewith between
Sublessor and Sublessee; or (iii) the date on which Sublessor discontinues
manufacturing operations in the Premises under the Lease. If the Commencement
Date is a date other than the first day of a calendar month or if this Sublease
Agreement terminates on a date other than the last day of a calendar month, then
the monthly payments of rent due hereunder for such month or months shall be
prorated based on the number of days in such month that occur during the Term.
Possession of the Subleased Premises shall be delivered to Sublessee on the
Commencement Date.
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3. The Lease.
(a) Sublessor represents and warrants that it has full right,
power and authority under the Lease to enter into this Sublease Agreement,
subject to Lessor's consent.
(b) Except for Xxxxxxxxxx 0, 0(x), 0(x), 0, 0, (xxxxxxx at the
end of the fourth sentence), 10 (except the last paragraph of Paragraph 10,
which is incorporated) 14, the third, fourth and fifth paragraphs of Paragraph
15, Paragraphs 26, 31, 41, 42, 43 and 44, and Xxxxxxxx X, X-0 and C of the
Lease, and to the extent not otherwise inconsistent with the agreements
expressed in this Sublease Agreement or applicable only to the original parties
to the Lease, the terms, provisions, covenants and conditions of the Lease are
hereby incorporated herein by reference, modified by the terms of this Sublease
or otherwise as appropriate in the circumstances so as to make such incorporated
terms, provisions, covenants and conditions applicable only to the subleasing
hereunder by Sublessee of the Subleased Premises. For the avoidance of doubt and
in furtherance of the foregoing: (i) Sublessor shall perform its covenants and
obligations under the Lease which do not require for their performance
possession of the Subleased Premises (including, without limitation, the
obligation to maintain in full force and effect all insurance required of
Sublessor as "tenant" under the Lease) and which are not otherwise to be
performed by Sublessee on behalf of Sublessor; and (ii) Sublessee shall perform
all affirmative covenants, and shall refrain from performing any act which is
prohibited by the negative covenants, of the Lease, where the obligation to
perform or refrain from performing is by its nature imposed upon the party in
possession of the Subleased Premises. Subject to the foregoing, Sublessee shall
be subject to, bound by and comply with all of said terms, provisions, covenants
and conditions of the Lease with respect to the Subleased Premises, shall
satisfy same in accordance with the Lease in favor and for the benefit of both
Sublessor and Lessor, and shall not do, suffer or permit anything to be done
which might result in an event of default under the Lease or cause the Lease to
be terminated or forfeited, it being understood and agreed that wherever in the
Lease the word "Tenant" appears, for the purposes of this Sublease Agreement the
word "Sublessee" shall be substituted, and wherever in the Lease the word
"Landlord" appears, for the purposes of this Sublease Agreement, the word
"Lessor" (and, as applicable hereunder, "Sublessor") shall be substituted; that
Sublessor shall have and may exercise all rights and remedies granted to Lessor
by the Lease; and that, without limitation of the foregoing or any other rights
and remedies Sublessor has or may have, upon the breach of any of said terms,
provisions, conditions or covenants of the Lease by Sublessee or upon the
failure of Sublessee to pay Rent or comply with any of the terms, provisions,
conditions or covenants of this Sublease Agreement, Sublessor may exercise any
and all rights and remedies granted to Lessor by the Lease. In the event of any
conflict between this Sublease Agreement and the Lease, the terms of this
Sublease Agreement shall control (unless such conflict would cause a default
under the Lease). Whenever the provisions of the Lease incorporated as
provisions of this Sublease Agreement require the written consent of Lessor,
said provisions shall be construed to require the written consent of both Lessor
and Sublessor. Sublessee hereby acknowledges that it has read and is familiar
with all the terms of the Lease, and agrees that this Sublease Agreement is
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subordinate and subject to the Lease and that any termination thereof shall
likewise terminate this Sublease Agreement. In addition to the foregoing:
(a) The exculpation and release of Sublessor and the indemnity
in favor of Sublessor and Sublessor's agents and employees in Paragraph 11 of
the Lease include, and Sublessor shall not be liable to Sublessee for, any
injury, damage, loss, liability, claims, suits, costs, and expenses that would
otherwise be covered by such Paragraph 11, EVEN IF THE FOREGOING RESULT FROM
AND/OR ARE CAUSED IN PART OR WHOLE BY THE NEGLIGENCE (BUT NOT THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) OF SUBLESSOR.
(b) Sublessee does not require a Non-Disturbance Agreement
pursuant to Paragraph 12 of the Lease.
(c) The exculpation and release of Sublessor in Paragraph
19(c) of the Lease includes, and Sublessor shall not be liable to Sublessee for,
any damages that would otherwise be covered by such Paragraph 19(c), EVEN IF THE
FOREGOING RESULT FROM AND/OR CAUSED IN PART OR WHOLE BY THE NEGLIGENCE (BUT NOT
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF SUBLESSOR.
(d) The waiver of claims and subrogation in Paragraph 24 of
the Lease include any rights of recovery, claim, action or cause of action that
would otherwise be covered by such Paragraph 24, EVEN IF THE FOREGOING RESULT
FROM AND/OR ARE CAUSED IN PART OR WHOLE BY THE NEGLIGENCE (BUT NOT THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE PARTY (PARTIES) BENEFITING FROM
PARAGRAPH 24.
(e) It shall be the obligation of Lessor (i) to provide or
cause to be provided all services to be provided by Lessor under the terms of
the Lease and (ii) to satisfy all obligations and covenants of Lessor made in
the Lease. Sublessee acknowledges that Sublessor shall be under no obligation to
provide any such services or satisfy any such obligations or covenants, subject
to Section 4(c) below.
(f) Sublessee's obligations with respect to maintenance,
repair, and replacement (including, without limitation, those arising pursuant
to Section 8(b) of the Lease, as incorporated herein) shall be limited to those
items located on the interior of the Subleased Premises only, and shall
specifically exclude, without limitation, those components of building-wide
systems that are located within the Subleased Premises but which also serve the
remaining portions of the Premises under the Lease.
4. Occupancy.
(a) Sublessee shall use and occupy the Subleased Premises in
accordance with the uses set forth in Section 1(g) of the Lease. Sublessee has
conducted an inspection, or been afforded the opportunity to inspect, the
Subleased Premises and
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shall accept the Subleased Premises "AS IS," "WHERE IS," and "WITH ALL FAULTS"
and without any representation or warranty of suitability or habitability or of
any other kind. Sublessor is not required to make any repairs or alterations to
prepare the Subleased Premises for Sublessee's occupancy.
(b) Subject to Section 3(b) hereof, Sublessee covenants that
it will occupy the Subleased Premises in accordance with the terms of the Lease
and will not suffer to be done or omit to do any act that may result in a
violation of or a default under any of the terms and conditions of the Lease, or
render Sublessor liable for any charge or expense arising out of, by reason of,
or resulting from, Sublessee's failure to perform or observe any of the terms
and conditions of the Lease pertaining to the Subleased Premises. Subject to
Section 3(b) hereof, Sublessor covenants and agrees that it will timely pay all
rent and other sums due under the Lease, and will not otherwise suffer to be
done or omit to do any act that may result in a violation of or a default under
any of the terms and conditions of the Lease.
(c) Sublessee agrees that Sublessor shall not be required to
perform any of the covenants or obligations of Lessor under the Lease and,
insofar as any of the covenants and obligations of Sublessor hereunder are
required to be performed under the Lease by Lessor thereunder, Sublessee
acknowledges that Sublessor shall be entitled to look to Lessor for such
performance. Sublessor hereby grants to Sublessee the right to receive all of
the services and benefits with respect to the Subleased Premises which are to be
provided by Lessor under the Lease. Any default or failure of performance by
Lessor shall not affect this Sublease Agreement or waive or defer any of
Sublessee's obligations hereunder, except to the extent that such default or
failure of such performance excuses Sublessor's performance under the Lease;
provided, however, that in the event of any such default or failure of
performance by Lessor, Sublessor shall take such action as may reasonably be
required, under the circumstances, to secure such performance upon Sublessee's
written request therefor and at Sublessee's cost and expense.
(d) Sublessor shall not agree to an amendment to the Lease
which would have a material adverse effect on Sublessee's occupancy of the
Subleased Premises or its use of the Subleased Premises for their intended
purposes as of the effective date of this sublease, unless Sublessor shall first
obtain Sublessee's prior written approval thereof, which approval shall not be
unreasonably withheld or delayed.
5. Rent.
(a) Sublessee shall pay to Sublessor as Basic Rental as for
the Subleased Premises during the Term of this Sublease Agreement the amount set
forth below:
Period Monthly Rent
------ ------------
Commencement Date to Expiration $6,118.13
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In addition to the Basic Rental, Sublessee shall also pay to Sublessor
all Additional Rent payable by Sublessor under the Lease including self
insurance costs, to the extent allocable to the Subleased Premises. For purposes
of calculating such Additional Rent, Sublessee's "proportionate share" shall be
a fraction, the numerator of which is the space contained in the Subleased
Premises (8,540 square feet as of the Commencement Date) and the denominator of
which is the entire space contained in the Building (209,088 square feet).
The respective amounts set forth above shall be paid on or before the
1st day of each month of the Term. If Sublessee fails or refuses to pay any
installment of Basic Rental within five (5) business days after the date such
installment is due, or Additional Rent within fifteen (15) business days after
Sublessee's receipt of written demand therefor, Sublessor shall be entitled to
collect a late charge equal to five percent (5%) multiplied by the amount of the
late payment to compensate Sublessor for the additional expense involved in
handling delinquent payments and not as interest. If the payment of a late
charge required by this Section is found to constitute interest notwithstanding
the contrary intention of Sublessor and Sublessee, the late charge shall be
limited to the maximum amount of interest that lawfully may be collected by
Sublessor under applicable law, and if any payment is determined to exceed such
lawful amount, the excess shall be applied to any unpaid rent then due and
payable hereunder and/or credited against the next succeeding installment of
rent payable hereunder. If all rent payable hereunder has been paid in full, any
excess shall be refunded to Sublessee.
(b) Intentionally Deleted.
6. Sublessor Rights and Obligations. Upon reasonable advance notice,
Sublessor shall be granted access to the Subleased Premises at all times.
Sublessor shall not unreasonably interfere with Sublessee's operations in the
Subleased Premises in connection with any such access.
7. Sublessee Rights and Obligations. Sublessee shall be obligated to
provide the insurance required under the Lease as it relates to the Subleased
Premises and shall name the Sublessor and Lessor as additional insureds under
its policies. Sublessee is obligated to provide proof of such insurance to
Sublessor on or before the Commencement Date and upon request at any time during
the Term (but not more frequently than annually). Sublessee acknowledges that
Sublessor will not provide insurance for the Subleased Premises, unless a
failure to so provide such insurance would result in a default under the Lease.
8. Casualty, Condemnation and/or Termination. If the whole or any part
of the Subleased Premises shall be taken or condemned in any manner by any
competent authority for any public or quasi-public use, or if the Lessor under
the Lease shall terminate the Lease as provided in the Lease by reason of
casualty or otherwise as permitted therein, in any such event, the term of this
Sublease Agreement shall cease and terminate as of the date of vesting of title
or such condemnation or termination, as the case may be. If the Lease is not
terminated as a result of any casualty loss and Sublessor
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is entitled under the Lease to a rent abatement or other concession as a result
thereof, then Sublessee shall be entitled to Sublessee's "proportionate share"
of such abatement or concession unless the effect on the Subleased Premises of
such casualty loss shall be substantially disproportionate to the amount of such
abatement or concession, in which event the parties shall equitably adjust the
abatement or concession as between themselves, based upon the relative impact of
the casualty loss.
9. No Assignment or Subletting. Sublessee, for itself, its successors
and assigns, expressly covenants that it shall not assign, mortgage or encumber
this Sublease Agreement, or sublet, or suffer or permit the Subleased Premises
or any part thereof to be used by others except as provided under the Lease,
without the prior written consent of Lessor and Sublessor.
10. Quiet Enjoyment. Sublessor covenants and agrees with Sublessee
that, provided Sublessee pays and performs all of its covenants, agreements and
obligations under this Sublease Agreement, Sublessee may peaceably and quietly
enjoy the Subleased Premises, subject, nevertheless, to the terms and conditions
of this Sublease Agreement and the Lease.
11. Sublessor. The term "Sublessor" as used in this Sublease Agreement
refers to the Tenant under the Lease at the time in question, so that if the
Lease shall be assigned, such covenants, conditions and agreements shall be
binding upon each successor assignee.
12. Indemnity.
(a) Sublessee shall indemnify and hold Sublessor harmless from
and against any all claims and liabilities arising from Sublessee's improvements
to and use of the Subleased Premises, and from the conduct of Sublessee's
business and from any activity, work or thing done, suffered or permitted by
Sublessee in or about the Subleased Premises and shall further indemnify and
hold Sublessor harmless from and against any and all claims and liabilities
arising from any breach or default in the performance of any obligation on
Sublessee's part to be performed under the terms of this Sublease Agreement, or
arising from any negligence of Sublessee, or any of Sublessee's agents, and from
and against any and all costs, attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon. If any action or proceeding is brought against Sublessor by reason of
any such claim, Sublessee, upon notice from Sublessor, shall defend the same at
Sublessee's expense utilizing counsel reasonably satisfactory to Sublessor.
Sublessee, as a material part of the consideration hereunder to Sublessor,
hereby assumes all risk of damage to property or injury to persons, in, upon or
about the Subleased Premises arising from any cause (INCLUDING THE NEGLIGENCE OF
SUBLESSOR AND EXCLUDING ONLY THE GROSS NEGLIGENCE OF SUBLESSOR) and Sublessee
hereby waives all claims in respect thereof against Sublessor. The foregoing
agreement to indemnify and hold harmless Sublessor from and against claims and
liabilities includes any such claims and liabilities asserted by Lessor against
Sublessor.
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(b) Sublessor shall indemnify and hold Sublessee harmless from
and against any all claims and liabilities arising from the conduct of
Sublessor's business and from any activity, work or thing done, suffered or
permitted by Sublessor in or about the Premises under the Lease (but excluding
the Subleased Premises) and shall further indemnify and hold Sublessee harmless
from and against any and all claims and liabilities arising from any breach or
default in the performance of any obligation on Sublessor's part to be performed
under the terms of this Sublease Agreement or the Lease, or arising from any
negligence of Sublessor, or any of Sublessor's agents, and from and against any
and all costs, attorney's fees, expenses and liabilities incurred in the defense
of any such claim or any action or proceeding brought thereon. If any action or
proceeding is brought against Sublessee by reason of any such claim, Sublessor,
upon notice from Sublessee, shall defend the same at Sublessor's expense
utilizing counsel reasonably satisfactory to Sublessee. Sublessor, as a material
part of the consideration hereunder to Sublessee, hereby assumes all risk of
damage to property or injury to persons, in, upon or about the Premises under
the Lease (but excluding the Subleased Premises) arising from any cause
(INCLUDING THE NEGLIGENCE OF SUBLESSEE AND EXCLUDING ONLY THE GROSS NEGLIGENCE
OF SUBLESSEE) and Sublessor hereby waives all claims in respect thereof against
Sublessee. The foregoing agreement to indemnify and hold harmless Sublessee from
and against claims and liabilities includes any such claims and liabilities
asserted by Lessor against Sublessee.
13. Broker's Commission. Each party represents to the other that it has
not dealt with any brokers in connection with this transaction, and each
representing party will indemnify the other party and hold such other party
harmless from and against any and all claims of any broker with respect to a
commission or fee in connection with this Sublease Agreement who purports to
have acted with or on behalf of the indemnifying party.
14. Miscellaneous Costs. Sublessee shall reimburse Sublessor for the
legal and other expenses incurred by Lessor in connection with the review of
this Sublease Agreement within thirty (30) days of receipt of an invoice
therefor.
15. Attorney's Fees. If Sublessor, or Sublessee shall commence an
action against the other arising out of or in connection with this Sublease
Agreement, the prevailing party shall be entitled to recover its costs of suit
and reasonable attorney's fees.
16. Consent of Lessor Under Lease. Lessor hereby consents to this
Sublease Agreement. Lessor's consent shall be deemed to evidence Lessor's
agreement that Sublessee shall be entitled to the benefit of any waiver of
claims and waiver of subrogation rights for damage to Lessor's property
contained within the Lease for the benefit of Sublessor, to the same extent as
if such waivers were originally made in favor of Sublessee.
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17. Notices. Any and all notices that are or may be required to be
given pursuant to the terms of this Sublease Agreement or the Lease shall be
sent by Certified Mail, Return Receipt Requested or overnight courier service to
the parties hereto at their respective addresses set forth below. Any notice
given pursuant to this Sublease Agreement shall be in writing and will be deemed
given to a party when (a) received or rejected by addressee, if sent by
Certified Mail, Return Receipt Requested or (b) the next business day following
deposit with a nationally recognized overnight courier service.
SUBLESSOR: SUBLESSEE:
--------- ---------
Cardinal Health PTS, LLC Xxxxx Laboratories, Inc. d/b/a
14 School House Road Xxxxx Respiratory Therapeutics
Xxxxxxxx, XX 00000 000 Xxxx Xxxxxx
Telecopier: 000-000-0000 Xxxxxxx, XX 00000
Attention: Legal Department Telecopier No: (000) 000-0000
LESSOR:
The Estate of Xxxxx Xxxxxxxx
c/o_______________________
18. Binding Effect. The covenants, conditions and agreements contained
herein shall be binding upon and inure to the benefit of Sublessor and Sublessee
and their respective heirs, executors, administrators, successors and permitted
assigns.
19. Governing Law. This Sublease Agreement is entered into in the State
of Texas, and its validity and interpretation shall be construed in accordance
with the laws of that State.
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IN WITNESS WHEREOF, Sublessor, Sublessee and Lessor have each caused
this Sublease Agreement to be executed by its duly authorized partner or officer
and the appropriate corporate seals have been hereunto affixed all as of the day
and year first written.
SUBLESSOR:
ATTEST: CARDINAL HEALTH PTS, LLC
By: /s/ Xxxxxx X. Xxxxxx [Corporate Seal] By: /s/ Xxxxxx X. Xxxxxx (Seal)
-------------------- --------------------
Its: -------------------- Its: --------------------
SUBLESSEE:
ATTEST: XXXXX LABORATORIES, INC., d/b/a
XXXXX RESPIRATORY THERAPEUTICS
By: /s/ Xxxxx Xxxxxx [Corporate Seal] By: /s/ Xxxxx Xxxxxx (Seal)
---------------- ----------------
Its: Chief Financial Officer Its: Chief Financial Officer
----------------------- -----------------------
LESSOR:
ATTEST: THE ESTATE OF XXXXX XXXXXXXX,
DECEASED
By: __________________ [Seal] By: ____________________ (Seal)
Its: __________________ Its: ____________________
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