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EXHIBIT 10.17
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 29,
1996, is made by and among IOMED, Inc., a Utah corporation ("IOMED"), Ciba-Geigy
Corporation, a New York corporation ("Purchaser"), acting through its
Pharmaceuticals Division, and Dermion, Inc., a Delaware corporation (the
"Company").
RECITALS:
The Company desires to issue and sell to Purchaser, and Purchaser
desires to purchase from the Company, shares of the Company's Common Stock, par
value $.001 per share (the "Common Stock"), on the terms and subject to the
conditions set forth herein.
The Company and Purchaser are entering into this Agreement in
connection with their execution of the Research and Development Agreement, dated
of even date herewith, by and between the Company, Purchaser and IOMED (the "R&D
Agreement"). Capitalized terms not otherwise defined herein shall have the
meanings given to them in the R&D Agreement.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter contained, and intending to be legally bound, the parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01 Stock to Be Purchased. Subject to the terms and conditions
contained in this Agreement, the Company agrees to issue and sell to Purchaser
at the Closing (as defined in Section 1.03), and Purchaser agrees to purchase
from the Company, Two Hundred Thousand (200,000) newly issued shares of Common
Stock (the "Shares").
1.02 Purchase Price. The purchase price for the Shares (the "Purchase
Price") shall consist of cash in the amount of One Million Dollars ($1,000,000).
The Purchase Price shall be paid at the Closing, in the form of a check made
payable to the Company or in such other form agreed upon by the parties.
1.03 Closing. The closing of the purchase and sale of the Shares under
this Agreement (the "Closing") shall take place simultaneously with the
execution of this Agreement.
1.04 Delivery of Shares. At the Closing, the Company shall deliver to
Purchaser certificates representing the Shares, registered in the name of
Purchaser.
1.05 Legal Opinion. At the Closing, the Company will deliver to
Purchaser an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the Company, in the
form of Exhibit A attached hereto.
1.06 Further Assurances. In addition to the actions, documents and
instruments specifically required to be taken or delivered hereby, the Company
and Purchaser shall execute
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and deliver, or cause to be executed and delivered, such other instruments and
take such other actions as the other party may reasonably request in order to
complete and perfect the transactions contemplated by this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. Representations and Warranties of the Company and IOMED. The
Company and IOMED hereby jointly and severally represent and warrant to
Purchaser on the date hereof as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company is duly licensed or qualified to do business, and is in good standing
under the laws of, each state in which the Company is required to be so licensed
or qualified. The Company has the corporate power and authority to own or lease
its properties, rights and assets and to conduct its business as now conducted
or presently proposed to be conducted. Since its date of incorporation, the
Company has not engaged in any activities or operations of any nature, except as
contemplated by this Agreement and the Transaction Documents. IOMED is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah.
(b) The Company and IOMED have full corporate power and
authority to enter into this Agreement, the Patent License Agreement in the form
attached as Exhibit B hereto (the "License Agreement"), the Support Services
Agreement in the form attached as Exhibit C hereto (the "Services Agreement"),
the Agreement of Sublease (the "Sublease Agreement") in the form attached as
Exhibit D hereto, the Stockholders' Agreement in the form attached as Exhibit E
hereto (the "Stockholders' Agreement"), the, Contribution Agreement in the form
attached as Exhibit F hereto (the "Contribution Agreement") and the R&D
Agreement (collectively, the "Transaction Documents"), and to carry out the
transactions contemplated hereby and thereby. All corporate action on the part
of the Company and of IOMED required to authorize the execution, delivery and
performance by the Company and IOMED of this Agreement and each of the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby, has been taken. This Agreement and each of the Transaction
Documents has been duly and validly authorized, executed and delivered by the
Company and IOMED, and each constitutes a valid and binding obligation of the
Company and IOMED, enforceable against each of them in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights and to
general equitable principles.
(c) The execution, delivery and performance by the Company and
IOMED of this Agreement and each of the Transaction Documents do not and will
not (i) violate or breach the certificate of incorporation or bylaws of the
Company or the articles of incorporation or bylaws of IOMED, (ii) violate or
conflict with any applicable law, (iii) violate, breach, cause a default under
or otherwise give rise to a right of termination, cancellation or acceleration
with respect to (presently, with the giving of notice or the passage of time)
any material agreement, contract or
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instrument to which the Company or IOMED is a party or by which any of their
respective assets are bound, or (iv) result in the creation or imposition of any
lien, pledge, mortgage, claim, charge or encumbrance upon any assets of the
Company or IOMED.
(d) Assuming the accuracy of Purchaser's representations and
warranties in Section 2.02(e), no consent, authorization, license, permit,
registration or approval of, or exemption or other action by, any governmental
authority or other person is required in connection with the Company's or
IOMED's execution and delivery of this Agreement or any of the Transaction
Documents, or with the performance by the Company or IOMED of their respective
obligations hereunder or thereunder, except in each case for any consent,
authorization, license, permit, registration or approval as have been obtained
and remain in full force and effect.
(e) The authorized capital stock of the Company consists of
Four Million (4,000,000) shares, of Common Stock, of which Eight Hundred
Thousand (800,000) are issued and outstanding, all of which issued and
outstanding shares are owned beneficially and of record by IOMED, and One
Million (1,00.0,000) shares of Preferred Stock, $.001 par value per share, none
of which are issued and outstanding. Upon consummation of the transactions
contemplated by this Agreement and the Contribution Agreement, One Million
(1,000,000) shares of Common Stock will be issued and outstanding. The Shares
will, upon issuance pursuant to the terms of this Agreement, be duly and validly
authorized and issued, fully paid and nonassessable. Except as set forth in the
Stockholders' Agreement, the Company does not have outstanding any rights
(preemptive or other) or options to subscribe for or purchase, or any warrants
or other agreements providing for or requiring the issuance by the Company of,
any of its capital stock or securities convertible into or exchangeable for its
capital stock, nor is the Company under any obligation to repurchase or redeem
any shares of its capital stock or securities convertible into or exchangeable
for its capital stock.
(f) The Company has provided to Purchaser true and correct
copies of all agreements executed by the Company and IOMED pursuant to the
Contribution Agreement.
(g) The Company is the owner or licensee of the Dermion
Technology, and has the right to license said Dermion Technology free of any
Lien (other than the obligations to pay royalties as provided in the University
of Utah License) in the manner set forth in the R&D Agreement. IOMED is the
licensee of the IOMED Technology and has the right to license said IOMED
Technology free of any Lien (other than the obligation to pay royalties as
provided in the Alza License) in the manner set forth in the R&D Agreement.
There are no existing defaults under the Alza License or University of Utah
License (or events which, with notice or lapse of time or both, would constitute
a default) either by IOMED or, to the best of IOMED's knowledge, by any other
party thereto, and true and correct copies of such licenses have been delivered
to Purchaser. Except as set forth on Schedule 7.01(e) to the R&D Agreement,
neither IOMED nor the Company has assigned or conveyed any interest in the
Dermion Technology or the IOMED Technology which may be inconsistent with the
rights granted under the R&D Agreement; to the best knowledge of the Company and
IOMED, the practice of the Dermion Technology and the IOMED Technology by the
Company and IOMED in connection with their
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respective business activities does not infringe any rights of third parties;
neither IOMED nor the Company is aware that any third party is infringing any
Dermion Technology or any IOMED Technology; with respect to all Patent Rights
constituting Dermion Technology or IOMED Technology which were prosecuted by
IOMED, such Patent Rights have been prosecuted in good faith; and neither IOMED
nor the Company has reason to believe that any patent included within the
Dermion Technology or the IOMED Technology would be invalid or would be held to
be unenforceable by a court of competent jurisdiction. To the best of IOMED's
and the Company's knowledge, after reasonable inquiry, Schedules 1.1(b)(i) and
1.1(b)(ii) to the R&D Agreement set forth all Patent Rights and identifiable
Know-How owned or licensed by IOMED or the Company or their respective
Affiliates, applicable to the development of the Systems.
(h) IOMED has contributed to the Company assets, properties
and rights that are sufficient, when taken together with the facilities to be
made available to the Company pursuant to the Sublease Agreement and the
services to be made available to the Company pursuant to the Services Agreement,
for the conduct of the Business as previously conducted by IOMED, other than the
IOMED Technology. The Company currently owns or has full-right to use all
assets, rights and properties (including all authorizations, approvals and
consents of Governmental Authorities) necessary to (i) to conduct, the Business
as previously conducted by IOMED and (ii) to perform the transactions
contemplated by this Agreement and the R&D Agreement except, in each case, for
the IOMED Technology.
(i) Attached as Schedule 2.01(i) is the unaudited pro forma
balance sheet of the Company as of March 29, 1996, (the "Balance Sheet"). The
Balance Sheet fairly presents the assets, liabilities and financial position of
the Company (assuming consummation of the transactions contemplated by the
Contribution Agreement as of such date) and was prepared in accordance with
generally accepted accounting principles.
2.02 Representations and Warranties of Purchaser. Purchaser represents
and warrants to the Company and to IOMED as follows:
(a) Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
(b) Purchaser has full corporate power and authority to enter
into this Agreement and each of the Transaction Documents to which it is a party
and to carry out the transactions contemplated hereby and thereby. All corporate
action on the part of Purchaser required to authorize the execution, delivery
and performance of this Agreement and each of the Transaction Documents to which
it is a party and the consummation of the transactions contemplated hereby and
thereby, has been taken. This Agreement and each of the Transaction Documents to
which it is a party has been duly and validly authorized, executed and delivered
by Purchaser, and each constitutes a valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equitable principles.
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(c) The execution, delivery and performance by Purchaser of
this Agreement and each of the Transaction Documents to which it is a party do
not and will not (i) violate or breach the articles of incorporation or bylaws
of Purchaser, (ii) violate or conflict with any applicable law, (iii) violate,
breach, cause a default under or otherwise give rise to a right of termination,
cancellation or acceleration with respect to (presently, with the giving of
notice or the passage of time) any material agreement, contract or instrument to
which Purchaser is a party or by which any of its assets is bound, or (iv)
result in the creation or imposition of any lien, pledge, mortgage, claim,
charge or encumbrance upon any assets of Purchaser.
(d) No consent, authorization, license, permit, registration
or approval of, or exemption or other action by, any governmental authority or
other person is required in connection. with Purchaser's execution and delivery
of this Agreement. or any Transaction Document to which it is a party or with
the performance by Purchaser of its obligations hereunder or thereunder, except
in each case for any consent, authorization, license, permit, registration or
approval as have been obtained and remain in full force and effect.
(e) Purchaser is acquiring the Shares for investment for its
own account and not with a view to, or for resale in connection with, any public
distribution, and understands that neither the Shares nor the shares of Common
Stock issuable upon conversion thereof have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent as
expressed herein.
ARTICLE III
DISCLAIMER OF IMPLIED WARRANTIES, REPRESENTATIONS
AND COVENANTS: SURVIVAL
3.01 Disclaimer. In entering into this Agreement, Purchaser, the
Company and IOMED have relied solely upon the representations and warranties set
forth in this Agreement and the Schedules hereto and the information referred to
herein as having been supplied by one to the other, and there are no
representations, warranties, covenants or agreements, express or implied, made
by any party to any other party in connection with the transactions contemplated
hereby other than as set forth in this Agreement and/or such Schedules.
3.02 Survival. The representations and warranties of the Company and
IOMED set forth in Sections 2.01(g), (h) and (i) shall survive the consummation
of the transaction contemplated herein and any examination or investigation of
the parties for a period of two years after the Closing Date. All other
representations and warranties of the parties set forth in this Agreement shall
survive the consummation of the transactions contemplated herein, and any
examination or investigation of the parties, indefinitely, without limitation as
to the duration thereof.
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ARTICLE IV
INDEMNIFICATION
4.01 Indemnification by the Company and IOMED. Subject to the
provisions of this Article IV, the Company and IOMED shall jointly and severally
indemnify, defend and hold harmless Purchaser from and against any and all loss,
claim, liability, damage, cost and expense (including reasonable attorneys' fees
and expenses) (hereinafter referred to as a "Loss") asserted against, resulting
to, imposed upon or incurred or suffered by Purchaser or any assignee or
successor of Purchaser as a result of or arising out of any of the following:
(a) Any breach of any of the representations or warranties of
the Company or IOMED set forth in this Agreement or in any Schedule to this
Agreement; or
(b) Any breach or nonfulfillment by the Company or IOMED of
any of the covenants or agreements of the Company or IOMED contained in this
Agreement.
4.02 Indemnification by Purchaser. Subject to the provisions of this
Article IV, Purchaser shall indemnify, defend and hold harmless the Company and
IOMED from and against any and all Loss asserted against, resulting to, imposed
upon or incurred or suffered by the Company or any of its successors or assigns
as a result of or arising out of any of the following:
(a) Any breach of any of the representations or warranties of
Purchaser set forth in this Agreement or in any Schedule to this Agreement; or
(b) Any breach or nonfulfillment by Purchaser of any of the
covenants or agreements of Purchaser contained in this Agreement.
4.03 Procedure for Indemnification.
(a) Demands, Etc. Each indemnified party hereunder agrees that
upon its obtaining knowledge of facts indicating that there may be a basis for a
claim for indemnity under the provisions of this Agreement, including receipt by
it of notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (such third party actions being collectively
referred to hereinafter as the "Claim"), with respect to any matter as to which
it may be entitled to indemnity under the provisions of this Agreement, it will
give notice thereof in writing to the indemnifying party within a reasonable
time after obtaining such knowledge, together with a statement of such
information respecting any of the foregoing as it shall then have. The
indemnifying party shall be obligated to indemnify the indemnified party
notwithstanding failure to give such notice in a timely manner, except if and to
the extent that the indemnifying party is materially prejudiced by any delay in
delivering, or non-delivery of, such notice.
(b) Right to Contest and Defend. The indemnifying party is
entitled at its cost and expense to contest and defend by all appropriate legal
proceedings any Claim with respect to
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which it is called upon to indemnify the indemnified party under the provisions
of this Agreement; provided, however, that notice of the intention so to contest
shall be delivered by the indemnifying party to the indemnified party within
thirty (30) days after the indemnifying party becomes aware of such Claim (or
within such shorter period of time as may be necessary to avoid prejudice to the
rights of the indemnified party hereunder). Any such contest may be conducted in
the name and on behalf of the indemnifying party or the indemnified party, as
may be appropriate. Such contest shall be conducted by attorneys employed by the
indemnifying party, but the indemnified party shall have the right to
participate in such proceedings and to be represented by attorneys of its own
choosing at its cost and expense. If the indemnified party joins in any such
contest, the indemnifying party shall have full authority to determine all
action to be taken with respect thereto. If after such opportunity, the
indemnifying party does not elect to contest any such Claim, the indemnifying
party shall be bound by the result obtained with respect thereto by the
indemnified party and the indemnified party shall be entitled to abandon the
contesting of the Claim or to settle or compromise the Claim, and the
indemnifying party shall be bound by all actions of the indemnified party with
respect to such Claim. At any time after the commencement of defense of any
Claim by the indemnifying party, the indemnifying party may notify the
indemnified party in writing of the abandonment of such contest or of the
payment or compromise by the indemnifying party of the asserted Claim, whereupon
such action shall be taken; provided, however, that the sole relief provided is
monetary damages that are paid in full by the indemnifying party; provided,
further, that the indemnified party may determine that the contest should be
continued, and shall so notify the indemnifying party in writing within 15 days
of such notice from the indemnifying party. In the event that the indemnified
party determines that the contest should be continued (and provided the timing
of notice condition has been met and the sole relief provided is monetary
damages that are paid in full by the indemnifying party), the indemnifying party
shall be liable hereunder only to the extent of the lesser of (i) the amount
which the other party to the contested Claim had agreed to accept in payment or
compromise as of the time the indemnifying party made its request therefor to
the indemnified party, or (ii) such amount for which the indemnifying party may
be liable with respect to such Claim by reason of the provisions hereof.
Notwithstanding the foregoing, if the indemnified party determines in, good
faith that there is a reasonable probability that an action regarding a Claim
either (i) may materially and adversely affect it or its Affiliates other than
as a result of monetary damages, or (ii) will substantially impair its ability
to continue to conduct its business or the business of the Company as previously
conducted, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise or settle such action, but the
indemnifying party shall not be bound by any determination of an action so
defended or any compromise or settlement thereof effected without its consent
(which shall not be unreasonably withheld or delayed). All of the foregoing is
subject to the rights of any indemnified party's insurance carrier which is
defending any such above proceedings.
(c) Cooperation. If requested by the indemnifying party, the
indemnified party agrees to cooperate with the indemnifying party and its
counsel in contesting any Claim which the indemnifying party elects to contest
or, if appropriate and not inconsistent with the reasonable commercial interests
of the indemnified party, in making any counterclaim against the person
asserting the Claim, or any cross-complaint against any person and further
agrees to take such other action as reasonably may be requested by an
indemnifying party to reduce or
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eliminate any loss or expense for which the indemnifying party would have
responsibility, but the indemnifying party will reimburse the indemnified party
for any expenses incurred by it in so cooperating or acting at the request of
the indemnifying party.
(d) Payment of Losses. The indemnifying party shall pay to the
indemnified party in cash the amount of any Losses to which the indemnified
party may become entitled by reason of the provisions of this Agreement, such
payment to be made within fifteen (15) days after any such amount of Losses is
finally determined either by mutual agreement of the parties hereto or pursuant
to the judgment of a court of competent jurisdiction. Any claim for which
indemnification occurs hereunder shall be, to the extent appropriate, assigned
to the indemnifying party.
ARTICLE V
MISCELLANEOUS
5.01 Publicity. Except after consultation with the other parties, no
party shall publicize, advertise, announce or describe to any
Governmental Authority or other Person, the terms of this Agreement,
the parties hereto or the transactions contemplated hereby, except as
required by Applicable Law or as required pursuant to this Agreement.
5.02 Assignment. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties and their respective successors and
permitted assigns. No party may assign or delegate this Agreement or
any of its rights or duties under this Agreement (including, without
limitation, by operation of law) without the prior written consent of
the other parties, except (i) to an Affiliate of such party who
expressly assumes the obligations of the assigning party hereunder and
(ii) in the case of Ciba, to a successor to Ciba's Pharmaceuticals
Division, whether by merger, consolidation, stock sale, asset sale or
otherwise.
5.03 Amendment. This Agreement may be amended, modified or supplemented
only by a written instrument specifically referring to this Agreement
that is signed and delivered by duly authorized officers of each party.
5.04 Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed to be a waiver of
any such provision and will not effect the validity of this Agreement
or any part hereof or the right of such party to enforce any such
provision. No waiver of any breach hereof will be construed to be a
waiver of any other breach.
5.05 Notices. All notices and communications required or authorized to
be given hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by messenger, (b) upon actual receipt if
sent by telecopy (with receipt confirmed), provided that a copy is
mailed by registered or certified mail, postage prepaid, return receipt
requested, or (c) when received by the addressee, if sent by overnight
courier, in each case to the appropriate address or telecopier:
If to IOMED or the Company:
IOMED, Inc.
3385 West ▇▇▇▇ ▇▇▇▇▇
▇
▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attn: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Ciba-Geigy Corporation
Pharmaceuticals Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ciba-Geigy Corporation
Pharmaceuticals Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Division Counsel
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as any party may designate in writing from
time to time.
5.06 Disclaimer of Agency. This Agreement shall not be construed to
constitute the parties as partners, joint venturers, agents or otherwise as
participants in a joint or common undertaking. No party (or its agents and
employees) is the representative of the other party for any purpose and no party
has power or authority as agent, legal representative, employee or in any other
capacity to represent, act for, bind, or otherwise create or assume any
obligation on behalf of, any other party for any other purpose whatsoever.
5.07 Further Assurances. The parties shall each perform such acts,
execute and deliver such instruments and documents, and do all such other things
as may be reasonably necessary to accomplish the transaction's contemplated in
this Agreement.
5.08 Expenses. The parties shall each bear their own costs and expenses
(including attorneys' fees) incurred in connection with the negotiation and
preparation of this Agreement
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and, except as otherwise provided herein, consummation of the transactions
contemplated hereby.
5.09 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of New York, without giving effect to the conflicts
of laws provisions thereof.
5.10 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, each of which is incorporated herein by this reference,
contains the entire agreement and understanding of the parties, and supersedes
any prior understandings and agreements, with respect to its subject matter,
including the Interim Agreement.
5.11 Severability. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth herein. In such event, the
parties shall negotiate, in good faith, a substitute, valid and enforceable
provision or agreement which most nearly effects the parties' intent in entering
into this Agreement.
5.12 Broker's Fees. Each of the parties represents and warrants that it
has not dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement, and, to its knowledge, no broker or
other Person is entitled to any commission or finder's fee in connection with
any of these transactions. Each of the parties shall be responsible for, and
shall indemnify and hold the other parties harmless against, the fees of its
investment bankers and other advisors, if any.
5.13 Article and Section Headings. The article and section headings
included in this Agreement are for convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
5.14 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall contribute an original instrument but all of
which, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
IOMED, INC., a Utah corporation
By:/s/▇▇▇ ▇. Weinsheaker
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▇▇▇ ▇. Weinsheaker
Its: President and Chief Executive Officer
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CIBA-GEIGY CORPORATION,
a New York corporation, acting through its
Pharmaceuticals Division
By:/s/ signature illegible
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Its:
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DERMION, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Secretary
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[▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP LETTERHEAD]
March 19, 1996
Ciba-Geigy Corporation
Pharmaceuticals Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Dermion, Inc.
Ladies and Gentlemen:
We have acted as counsel for Dermion, Inc., a Delaware corporation (the
"Company"), in connection with the purchase by Ciba-Geigy Corporation, a New
York corporation ("Purchaser"), acting through its Pharmaceuticals Division, of
Two Hundred Thousand (200,000) shares (the "Shares") of the Common Stock, $.001
par value per share (the "Common Stock"), of the Company pursuant to a Stock
Purchase Agreement, dated of even date herewith (the "Agreement"), by and
between Purchaser, the Company and IOMED, Inc., a Utah corporation ("Iomed").
This opinion is furnished to you pursuant to Section 1.05 of the Agreement.
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Agreement.
We have examined originals or copies of the following documents (the
"Documents"):
(i) the "Agreement"; and
(ii) the Stockholders' Agreement, dated of even date herewith, by and
between Purchaser, the Company and Iomed (the "Stockholders'
Agreement").
In addition, we have examined such records, documents, certificates of
public officials and of the Company, made such inquiries of officials of the
Company, and considered such questions of law as we have deemed necessary for
the purpose of rendering the opinions set forth herein.
We have assumed the genuineness of all signatures and the authenticity of
all items submitted to us as originals and the conformity with originals of all
items submitted to us as copies. In making our examination of the Documents, we
have assumed that each party to one or more of the Documents other than the
Company has the power and authority to execute and
12
Ciba-Geigy Corporation ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Pharmaceuticals Division
March 29, 1996
Page 2
deliver, and to perform and observe the provisions of the Documents, and has
duly authorized, executed and delivered such Documents, and that such Documents
constitute the legal, valid and binding obligations of such party.
Our opinion in paragraph (a) below as to the qualification and good
standing of the Company is based solely upon certificates of public officials in
the states named in that paragraph. In rendering our opinion in paragraph (d)
below, we have assumed the accuracy of the representations and warranties of
Purchaser set forth in Section 2.02(e) of the Agreement.
Whenever our opinion herein with respect to the existence or absence of
facts is indicated to be based on our knowledge, it is intended to signify that,
in the course of our representation of the Company in connection with the matter
described in the first paragraph hereof, we have not acquired actual knowledge
of the existence or absence of such facts. We have not undertaken any
independent investigation to determine the existence or absence of such facts,
and no inference as to our knowledge of the existence or absence of such facts
should be drawn from the fact of our representation of the Company.
The opinions hereinafter expressed are subject to the following further
qualifications and exceptions:
(1) the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws relating to or affecting the
rights of creditors generally, including, without limitation, laws relating to
fraudulent transfers or conveyances, preferences and equitable subordination;
(2) limitations imposed by general principles of equity upon the
availability of equitable remedies or the enforcement of provisions of the
Documents; and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied
covenant of good faith and fair dealing, or would be commercially unreasonable,
or where a default under the Documents is not material;
(3) the enforceability of provisions of the Documents providing for
indemnification or contribution to the extent such indemnification or
contribution is against public policy; and
(4) the enforceability of provisions of the Documents providing for
arbitration of disputes to the extent that arbitration of a particular dispute
would be against public policy.
Based upon and subject to the foregoing, we are of the opinion that:
13
Ciba-Geigy Corporation ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Pharmaceuticals Division
March 29, 1996
Page 3
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and is duly qualified
and in good standing in the State of Utah.
(b) The Company has the corporate power and authority to execute and
deliver, and to perform and observe the provisions of, the Documents.
(c) The Documents have each been duly authorized, executed and
delivered by the Company. The Documents constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms.
(d) No registration with, consent or approval of, notice to, or other
action by, any governmental entity is required on the part of the Company for
the execution, delivery or performance by the Company of the Documents, or if
required, such registration has been made, such consent or approval has been
obtained, such notice has been given or such other appropriate action has been
taken.
(e) The execution, delivery and performance of the Documents by the
Company are not in violation of its Certificate of Incorporation or Bylaws.
(f) The authorized capital stock of the Company consists of Four
Million (4,000,000) shares of Common Stock, of which Eight Hundred Thousand
(800,000) are issued and outstanding, all of which issued and outstanding shares
are owned beneficially and of record by Iomed, and One Million (1,000,000)
shares of Preferred Stock, $.001 par value per share, none of which are issued
and outstanding. To our knowledge, except pursuant to the Stockholders'
Agreement, the Company does not have outstanding any rights (preemptive or
other) or options to subscribe for or purchase, or any warrants or other
agreements providing for or requiring the issuance by the Company of, any of its
capital stock or securities convertible into or exchangeable for its capital
stock, nor is the Company under any obligation to repurchase or redeem any
shares of its capital stock or securities convertible into or exchangeable for
its capital stock.
(g) The Shares, which are to be issued to you pursuant to the Agreement,
have been duly authorized for issuance, and, when issued and delivered against
payment therefor in accordance with the Agreement, will be validly issued, fully
paid and nonassessable.
We express no opinion as to matters governed by any laws other than the
substantive laws of the State of New York (without reference to its
choice-of-law rules), the Delaware General Corporation Law, and federal laws of
the United States, in each case as in effect on the date hereof.
14
Ciba-Geigy Corporation ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Pharmaceuticals Division
March 29, 1996
Page 4
In addition, we call your attention to the arbitration provisions of the
Documents and to the existence of differences between the arbitral and judicial
processes. We have based our opinion upon an assessment of legal authorities
which would be applicable in judicial proceedings.
This opinion is solely for your benefit and may not be relied upon by, nor
may copies be delivered to, any other person without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
15
SUPPORT SERVICES AGREEMENT
THIS SUPPORT SERVICES AGREEMENT (the "Agreement"), dated as of March 29,
1996, is made by and between IOMED, Inc., a Utah corporation ("IOMED") and
Dermion, Inc., a Delaware corporation (the "Company").
A. The Company has been formed to conduct the business (the "Business")
of conducting research with respect to or developing iontophoretic transdermal
drug delivery systems on its own behalf and/or on behalf of third parties, as
previously conducted by IOMED.
B. Pursuant to a Contribution Agreement, dated of even date herewith
(the "Contribution Agreement"), IOMED has contributed certain assets to the
capital of the Company in exchange for Eight Hundred Thousand (800,000) of the
issued and outstanding shares of Common Stock, $.001 par value per share
("Common Stock"), of the Company.
C. Pursuant to a Stock Purchase Agreement, dated of even date herewith
(the "Stock Purchase Agreement"), the Company has issued and sold to Ciba-Geigy
Corporation, a New York corporation ("Purchaser"), acting through its
Pharmaceuticals Division, Two Hundred Thousand (200,000) of the issued and
outstanding shares of Common Stock.
D. As a result of the transactions contemplated by the Contribution
Agreement and the Stock Purchase Agreement, IOMED and Purchaser have acquired
all of the issued and outstanding shares of capital stock of the Company.
E. Pursuant to a Research and Development Agreement, dated of even date
herewith (the "R&D Agreement"), Purchaser, IOMED and the Company have agreed to
conduct a research and development program on the terms and subject to the
conditions set forth therein.
F. As contemplated by the Stock Purchase Agreement and the R&D
Agreement, IOMED and the Company desire to enter into this Agreement in order
to provide for the provision by IOMED to the Company of certain support
services, all on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Services Provided by IOMED. During the term of this Agreement, IOMED
agrees to provide the Company with the following support services
(collectively, the "Support Services"):
o EXECUTIVE MANAGEMENT SERVICES: strategic management and business
development services
o HUMAN RESOURCE SERVICES: including assistance with recruiting and
screening of applicants, preparation of position descriptions,
maintenance of employee records, maintenance of employee drug testing
program, assistance with regulatory
1
16
compliance and mandatory reporting requirements, including EEOC and
OSHA, maintenance of employee policy manuals
o PAYROLL ADMINISTRATION: including semi-monthly payroll, annual
preparation of W-2s, quarterly payment of withholding taxes,
management of garnishments
o BENEFITS ADMINISTRATION: including medical and dental insurance
plans, 401(k) savings plan, life and disability plans
o INSURANCE ADMINISTRATION: negotiation of renewals and maintenance of
proper coverage of all insurance, including facilities, property and
casualty, general liability, products liability and worker's
compensation
o CONTRACT ADMINISTRATION: general contract administration, including
the negotiation, compliance with and maintenance of collaborative
development, service and licensing agreements
o CORPORATE SECRETARIAL SERVICES: maintenance of corporate records,
records retention and maintenance of required permits and licenses
o LEASE ADMINISTRATION
o FACILITIES MAINTENANCE: including general facilities maintenance and
contract administration for security, janitorial, waste management,
landscape and snow removal services
o CASH MANAGEMENT SERVICES: including investment and treasury services,
negotiation and administration of debt service and capital or
operating lease agreements, treasury account reconciliations
o PURCHASING SERVICES: including purchase order processing, shipping
and receiving services as necessary
o BOOKKEEPING SERVICES: general ledger account maintenance, including
accounts receivable, collections and accounts payable processing,
maintenance of fixed asset records, financial reporting (internal and
external, including audit if required), preparation of project
reporting and other special reports as required pursuant to
development agreements
o TAX SERVICES: payment of all property, sales and use taxes, including
maintenance of appropriate records, coordination and preparation of
state and federal income tax returns (independent or consolidated).
2. Standard of Care. IOMED shall provide all Support Services in
compliance with applicable law and sound business practices, and in a manner and
of a quality consistent with the analogous services provided by IOMED in
connection with its operation of the Business prior to the date hereof.
3. Compensation. In consideration for the Support Services, the Company
shall pay IOMED each month an amount equal to IOMED's direct out of pocket
costs (which shall not
2
17
include any allocated overhead costs, including without limitation salary and
benefit costs) of providing the Support Services plus an overhead allocation
(including salary and benefit costs) in the amount of Twenty Thousand Dollars
($20,000) per month. In the event any such out of pocket costs benefit both the
Company and IOMED, IOMED shall invoice the Company for, and the Company shall
be required to pay, only the portion of such costs as are related solely to the
Company. The monthly overhead allocation shall be subject to review by the
parties at the end of each fiscal year of IOMED, and shall be adjusted at such
times to a level agreed to by the parties that reflects any changes in the cost
to IOMED of the overhead so allocated.
4. Invoices: Payment Terms. IOMED shall invoice the Company once each
month for Support Services rendered hereunder, and each such invoice shall be
payable in full by the Company within thirty (30) days of the invoice date.
Each invoice submitted by IOMED shall be accompanied by reasonably detailed
records, including, where applicable, original invoices or copies thereof,
supporting the out of pocket costs being submitted to the Company for payment.
5. Term. The term of this Agreement shall commence on the date hereof
and shall terminate upon the later to occur of (a) termination of the R&D
Agreement and (b) three (3) years after the date hereof; provided, however,
that the Company shall have the right, exercisable by it at any time upon
thirty (30) days written notice to IOMED, to terminate this Agreement in whole
or in part. As used in this Agreement, "Affiliate" means, with respect to any
person, a person controlling, controlled by or under common control with such
person, and "control" means ownership of a majority of the outstanding voting
securities of such person. Notwithstanding anything to the contrary contained
herein, the obligation of the Company to pay for Support Services rendered
under this Agreement prior to a termination shall survive any such termination.
6. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without reference
to its conflict of law rules.
7. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, three (3) business days after mailing by certified or
registered mail, return receipt requested and postage prepaid, and one (1)
business day after transmittal by overnight courier.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
9. Waiver. No waiver of any provision of this Agreement or any right or
obligation of any party hereunder shall be effective unless set forth in a
writing, specifying such waiver, signed by the party against which such waiver
is being enforced. Any such waiver shall be effective only in the specific
instance and for the specific purpose stated in such writing.
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18
10. Entire Agreement: Amendments. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof and
supersedes any prior oral or written communications, representations,
understandings or agreements existing between the parties with respect to such
subject matter. This Agreement may not be amended, in whole or in part, except
by a writing, specifying such amendment, signed by both parties.
11. Assignment. Neither the rights nor obligations of any party under
this Agreement may be transferred or assigned, directly or indirectly, without
the prior written consent of the other party, which consent will not be
unreasonably withheld; provided, however, that each party may freely assign its
rights and obligations hereunder to any Affiliate.
12. Binding Agreement. The terms of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first written above.
IOMED, INC., a Utah corporation
By: [SIG]
------------------------------
Its: Secretary
-----------------------------
DERMION, INC., a Delaware corporation
By: [SIG]
------------------------------
Its: President and CEO
-----------------------------
4
19
AGREEMENT OF SUBLEASE
THIS AGREEMENT OF SUBLEASE (this "Sublease") is entered into as of this
29th day of March, 1996, between IOMED, Inc., a Utah corporation, (hereinafter
referred to as "Sublessor"), and Dermion, Inc., a Delaware corporation
(hereinafter referred to as "Sublessee").
W I T N E S S E T H:
1. Master Lease. Pursuant to the Lease Agreement by and between Textron
Collective Investment Trust, a Rhode Island trust and successor in interest to
▇▇▇▇▇▇ Alliance (hereinafter referred to as "Lessor") and IOMED, Inc., a Utah
corporation and successor in interest to Motion Control, Inc. ("Sublessor"),
dated October 1, 1986, as amended by the First Amendment to Lease Agreement,
dated as of March 9, 1988, the Second Amendment to Lease Agreement, dated as of
May 5, 1989, the Third Amendment to Lease Agreement dated as of July 10, 1989,
the Fourth Amendment to Lease Agreement dated as of July 18, 1989, the Fifth
Amendment to Lease Agreement dated as of February 7, 1992, and the Sixth
Amendment to Lease Agreement dated as of July 20, 1994 (as amended, the "Master
Lease"), Sublessor has leased from Lessor certain premises located in the
office building situated at 1290 West 2320 South (the "Building") in West
Valley City, Salt Lake County, State of Utah. Attached as Exhibit A is a copy
of the Master Lease.
2. Sublease. Sublessor upon the following terms and conditions hereby
subleases to Sublessee, and Sublessee hereby subleases from Sublessor, a
portion of the premises subject to the Master Lease consisting of approximately
8,100 square feet of office, warehouse, research and development space,
situated in the building identified as "K", as shown on Exhibit B attached
hereto (hereinafter referred to as the "Subleased Premises"). Sublessee shall
also be entitled to the non-exclusive use for the term of this Sublease of the
parking stalls adjacent to the Subleased Premises as shown in Exhibit B.
3. Use of Subleased Premises. Sublessee shall use and occupy the
Subleased Premises in strict accordance with Article 5 and all other terms of
the Master Lease for the sole purpose of conducting its research, development
and manufacturing of iontophoretic transdermal drug delivery systems and other
medical devices.
4. Term of Sublease. The term of this Sublease shall commence on the
date hereof and shall terminate on the date on which the Master Lease
terminates, subject to early termination by mutual agreement of Sublessor and
Sublessee. As used herein, "affiliate" means, with respect to any person, a
person controlling, controlled by or under common control with such person, and
"control" shall mean ownership of a majority of the outstanding voting
securities of such person.
1
20
5. Rent.
(a) Sublessee shall pay to Sublessor as rent for the Subleased Premises,
the sum of SEVENTY THOUSAND EIGHT HUNDRED DOLLARS ($70,800) per annum, payable
in equal monthly installments of FIVE THOUSAND NINE HUNDRED DOLLARS ($5,900).
(b) Sublessee shall pay to Sublessor, as additional rent, the
proportional share, adjusted on a pro rata basis to the number of square feet
comprising the Subleased Premises, of the utilities, Taxes, insurance premium
costs, Building Common Area expenses, and Development Common Area expenses as
required under (and as defined in) the Master Lease.
(c) In the event of any increase in base rent or other amount payable by
Sublessor to Lessor pursuant to the Master Lease, Sublessee shall pay Sublessor
its proportional share of any such increases, adjusted on a pro rata basis to
the number of square feet comprising the Subleased Premises divided by the
number of square feet subject to the Master Lease; provided, however, that
Sublessee shall have no liability for any such increase resulting from an
amendment to the Master Lease effected after the date hereof without Sublessee's
written consent.
(d) All payments of base rent, any additional rent and any other amount
required to be made by Sublessee shall be paid in advance on the first day of
each calendar month of the term of this Sublease (to the extent ascertainable
as of such date) and shall be payable without notice or demand, and without any
deduction, offset or abatement, in lawful money of the United States of America
to Sublessor at the address stated herein, or to such other persons or at such
other places as Sublessor may designate in writing. Any such payment not
ascertainable as of the first day of each calendar month of the term of this
Sublease shall be paid by Sublessee within ten (10) days after its receipt of a
written invoice from Sublessor, including reasonable supporting documentation,
for such amount. The rent for any partial month during which the term of this
Sublease commences or terminates shall be equitably prorated.
6. Condition of Premises. The Subleased Premises sublet hereunder shall
be taken and leased by Sublessee on an "as is" basis.
7. Waiver of Liability: Indemnification. Without limiting in any way the
effect or generality of all indemnification and waiver provisions contained as
part of the terms of the Master Lease, which are incorporated herein pursuant
to paragraph 10 below, the parties hereby agree that:
(a) Neither Sublessor nor Lessor shall be liable to Sublessee, and
Sublessee hereby waives all claims against Sublessor and Lessor, for any injury
or damage to any person or property in or about the Subleased Premises and/or
Building by or from any cause whatsoever other than by reason of the negligence
or willful act of Sublessor, its agents, servants, employees or invitees, or
Lessor.
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21
(b) Sublessee shall defend, indemnify and hold Sublessee and Lessor
harmless against any and all claims or liability for any injury or damage to any
person or property whatsoever if and to the extent that such injury or damage
shall be caused by the act, neglect, fault of, or omission of any duty with
respect to the same, by Sublessee, its agents, servants, employees, or invitees;
(i) occurring in, on, or about the Subleased Premises or any part thereof, and
(ii) occurring in, on, or about any facilities (including, without prejudice to
the generality of the term "facilities," elevators, stairways, passageways or
hallways) the use of which Sublessee may have in conjunction with other tenants
of the Building.
(c) Sublessee shall not be liable to Sublessor, and Sublessor hereby
waives all claims against Sublessee, for any injury or damage to any person or
property in or about the Subleased Premises and/or Building if and to the
extent caused by reason of the negligence or willful act of Sublessor, its
agents, servants, employees or invitees, or Lessor.
(d) Sublessor shall defend, indemnify and hold Sublessee harmless against
any and all claims or liability for any injury or damage to any person or
property whatsoever if and to the extent that such injury or damage shall be
caused by the act, neglect, fault of, or omission of any duty with respect to
the same, by Sublessor, its agents, servants, employees, or invitees; (i)
occurring in, on, or about the Subleased Premises or any part thereof, and (ii)
occurring in, on, or about any facilities (including, without prejudice to the
generality of the term "facilities," elevators, stairways, passageways or
hallways) the use of which Sublessee may have in conjunction with other tenants
of the Building.
(e) Any indemnification payments pursuant to Section 7(b) or 7(d) above
shall be net of any insurance recoveries by the indemnified party.
8. Notices. All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing. All notices
and demands shall be deemed to have been duly given (a) when delivered by
messenger, (b) upon actual receipt if sent by telecopy (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, postage prepaid,
return receipt requested, or (c) when received by the addressee, if sent by
overnight courier, in each case to the appropriate address or telecopier:
If to the Sublessee:
Dermion, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
3
22
If to the Sublessor:
IOMED, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as the parties may designate in writing
from time to time. All notices shall be deemed to have been received at the
time of delivery, if personally delivered, or forty-eight (48) hours after
deposit in the United States mail as specified above, if mailed.
9. Assignment and Subletting.
(a) Sublessee shall not sell, assign, encumber or otherwise transfer by
operation of law or otherwise this Sublease or any interest herein, sub-sublet
the Subleased Premises or any part thereof, or suffer any other person to
occupy or use the Subleased Premises or any portion thereof, without the prior
written consent of Sublessor, which consent may be granted or denied in
Sublessor's absolute and sole discretion, nor shall Sublessee permit any lien
to be placed on the Sublessee's interest by operation of law or otherwise.
(b) Any sub-subletting hereunder by Sublessee shall not result in
Sublessee being released or discharged from any liability under this Sublease.
Any consent by Sublessor to any sub-subletting of the Subleased Premises or any
part thereof by Sublessee shall not be deemed to be a consent to any other
sub-subletting of the Subleased Premises and shall not constitute a waiver of
the requirements of Sublessor's consent to any other sub-subletting of the
Subleased Premises as such requirement is stated herein. Any sale, assignment,
encumbrance, sub-subletting, occupation, lien or other transfer of this
Sublease which does not comply with the provisions of this paragraph 9 shall be
void.
10. Incorporation of Terms of Master Lease. It is expressly understood,
acknowledged and agreed by Sublessee that all of the other terms, conditions
and covenants of this Sublease shall be those stated in the Master Lease as
attached hereto, except for Articles 2, 10, 11 and 26, and, to the extent
discussed above, Articles 4, 7, 25 and 28. Sublessee shall and hereby agrees to
be subject to and bound by and to comply with all of said Paragraphs and
Subparagraphs of the Master Lease with respect to that certain space leased
therein encompassed by this Sublease and to satisfy all applicable terms and
conditions of the Master Lease for the benefit of both Sublessor and Lessor, it
being understood and agreed that wherever in the Master Lease the word "Tenant"
appears, for the purposes of this Sublease, the word "Sublessee" shall be
substituted, and, subject to Section 11 below, wherever in the Master Lease the
word "Landlord" appears, for the purposes of this Sublease, the word
"Sublessor" shall be substituted, and that upon the breach of any of said
terms, conditions or covenants of the Master Lease or upon the failure of the
Sublessee to pay rent or comply with any of the provisions of this Sublease,
Sublessor may exercise any and all rights and remedies granted to Lessor by the
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23
Master Lease. Sublessee hereby acknowledges that it has read and is familiar
with the terms of the Master Lease, and agrees that this Sublease is
subordinate and subject to the Master Lease and that any termination thereof
without the fault of the Sublessor shall likewise terminate this Sublease.
11. Limitation of Liability. Notwithstanding anything to the contrary
contained herein, it is understood and agreed that the Sublessor has no duty or
obligation to the Sublessee with respect to the Master Lease other than (a) to
maintain the Master Lease in full force and effect during the term of this
Sublease (provided, however, that Sublessor shall not be liable to Sublessee
for any earlier termination of the Master Lease which is not due to the fault
of Sublessor), (b) to refrain from taking any actions that would preclude
Lessor from performing its covenants under the Master Lease insofar as they
relate to the Subleased Premises, and (c) upon request of Sublessee, to use
commercially reasonable efforts to enforce against Lessor any provisions of the
Master Lease reasonably requested by Sublessee relating to Sublessee's use and
enjoyment of the Subleased Premises. Any costs and expenses incurred, and any
damages or other amounts recovered as a result of, any actions pursuant to
clause (c) above shall be shared by Sublessor and Sublessee in accordance with
the relative number of square feet occupied by each of them that is the subject
of any such matter.
IN WITNESS WHEREOF, the parties have executed this Sublease the date first
above written.
Sublessor: IOMED, Inc., A Utah corporation
By: [SIG]
-----------------------------
Its: Secretary
Sublessor: Dermion, Inc., a Delaware corporation
By: [SIG]
-----------------------------
Its: President and CEO
5
24
EXHIBIT A
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made and entered into as of this 1st day
of October, 1986, by and between ▇▇▇▇▇▇ Alliance - a Joint Venture whose
managing partner is ▇.▇. ▇▇▇▇▇▇, III, hereinafter referred to as the
"Landlord," and Motion Control, Inc. - a Utah Corporation, hereinafter referred
to as the "Tenant":
W I T N E S S E T H :
ARTICLE 1. PREMISES AND TERM. Landlord hereby leases and by these presents
does lease and demise to the Tenant, and the Tenant does lease and take from
the Landlord, the premises described on Exhibit B attached hereto, consisting
of approximately 10,000 net usable square feet of office, warehouse, research
and development space, situated in the building identified as "K" on Exhibit
"A" attached hereto (the "Building") in the space indicated thereon (the
"Premises"), together with all the easements, rights, privileges and
appurtenances thereunto belonging or in any way appertaining thereto together
with access and ingress thereto and the right to enjoy the common areas.
TO HAVE AND TO HOLD the Premises, together with all and singular the
improvements, appurtenances, rights, privileges and easements thereunto
belonging to or in anywise appertaining, unto Tenant for a term commencing as
of the date set forth herein under Article 3 and continuing thereafter to and
including the date four (4) years from the first day of the first month
immediately following the Commencement Date, subject, however, to extension and
renewal as hereinafter provided.
ARTICLE 2. CONSTRUCTION OF IMPROVEMENTS. Landlord agrees, at Landlord's
sole cost and expense, to construct interior improvements within the premises,
in accordance with the plans and specifications prepared by ▇.▇. ▇▇▇▇▇▇
Construction Company, copies of which have been attached hereto and
incorporated herein as Exhibit "B", (Metro building "K" floor plan), and
Exhibit "B1", (specifications for interior
25
improvements of the Premises) and initialed by the parties, which plans and
specifications the parties have reviewed and approved. All such improvements
shall be completed in a good workmanlike manner and in accordance with
applicable governmental codes and regulations including, but not limited to
"life and safety" requirements.
ARTICLE 3. TENANT'S POSSESSION. The preliminary term of this Lease shall
commence on the date hereof and continue until, and expire upon, the first day
of the original term. The original term ("Term") shall commence thirty (30) days
after the date Landlord delivers to Tenant possession of the Premises and upon
which date Tenant accepts and approves the Premises as having improvements to
the state of being ready for occupancy provided in no event will such date be
prior to November 15, 1986 ("Commencement Date"). The words "ready for
occupancy" shall mean the date upon which (i) the construction work referred to
in Article 2 is debris free and substantially completed in accordance with the
plans and specifications referred to therein (except for minor finishing details
of construction, minor omissions, decorations, and mechanical adjustments which
do not materially interfere with Tenants installation of its improvements and
trade fixtures and, (ii) a permanent "certificate of occupancy" has been issued
by the appropriate authorities. Tenant shall thereafter have five (5) days
within which to inspect the Premises before the Commencement Date at which time
Tenant shall confirm whether the same is ready for occupancy and provide
Landlord with a list of items (punch list) to be completed, or otherwise
corrected by Landlord. When the Commencement Date has been determined, Landlord
and Tenant shall enter into an agreement in recordable form setting forth such
date. Landlord shall notify Tenant when it deems the Premises are ready for
occupancy. By taking possession of the Premises, Tenant acknowledges having
inspected the same and accepts the Premises as in such condition and repair and
that the improvements have been completed in accordance with the
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provisions of this Lease except (i) as to those items on the above referenced
punch list provided by Tenant to Landlord, which items shall be accepted when
completed by Landlord in accordance with the provisions of this Lease Agreement
and, (ii) to items or conditions not readily apparent from such inspection or
defects which are latent. Landlord shall complete the items on the punch list
within thirty (30) days after said punch list has been provided by Tenant.
Landlord agrees to have the Premises ready for occupancy no later than 60 days
after leases and floor plans have been finalized by both Landlord and Tenant.
ARTICLE 4. OBLIGATIONS OF TENANT AND LANDLORD.
Surrender of Premises -- Maintenance of Adjacent Areas. At the termination
or expiration of this Lease or any renewal thereof, Tenant agrees to deliver up
the Premises and improvements (other than improvements or personal property of
Tenant) to Landlord in as good order, condition and state of repair as when
received by Tenant, reasonable wear and tear thereof and damage by fire, acts
of God, or the elements excepted.
Property Taxes. Landlord shall pay before delinquency thereof all real
property taxes and assessments which are levied against or which apply with
respect to the Building and the real property underlying the same ("Taxes). In
addition to the rents outlined in Article 7. Rent. below, Tenant shall pay to
Landlord as additional rental for each calendar year of the Term or any Extended
Term of the Lease Tenant's proportional share of the Taxes, which amount shall
be determined by multiplying (1) the Taxes for each such calendar year by (2) a
fraction, the numerator of which is the total gross square footage of floor
area of the Premises and the denominator of which is the total gross square
footage of floor areas of the Building (such fraction is hereinafter referred
to as "Tenant's Proportionate Share").
Equitable adjustments shall be made so that only that prorata part of the
Taxes shall be paid by the Tenant for
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fractions of the Term at the beginning or end of the Lease. Tenant shall
reimburse Landlord for its Proportionate Share of the Taxes computed hereunder
on or before the later of (i) fifteen (15) days before the date the Taxes must
be paid before becoming delinquent or (ii) fifteen (15) days from the date
Tenant receives from Landlord a statement setting forth the amount due Landlord
under this paragraph, together with the original tax ▇▇▇▇ or a true and correct
copy thereof and a computation of the amount to be paid by Tenant as provided in
this paragraph. If Landlord shall be required by its mortgagee to maintain a tax
impound account, Tenant shall, at Landlord's request, pay 1/12 of Tenant's
proportionate share of the estimated annual taxes in advance each month in
addition to the minimum rental payment.
The Tenant shall pay all taxes levied and assessed against its personal
property located within the Premises. Nothing in this lease contained shall
require or be construed to obligate the Tenant to pay any franchise, excise,
corporate, estate, inheritance, succession, capital levy or transfer tax of the
Landlord, or any income, profits or revenue tax upon the income of the Landlord.
Insurance. The Tenant shall, during the entire term of this Lease, at the
Tenant's sole cost and expense, but for the mutual benefit of the Landlord and
Tenant, maintain general public liability insurance against claims for personal
injury, death or property damage occurring upon, in or about the Premises
attached hereto, such insurance to afford protection to the limit of not less
than $500,000 in respect to injury or death to a single person, and to the limit
of not less than $1,000,000 in respect to any one accident, and to the limit of
not less than $100,000 in respect to property damage or a combined single limit
policy not less than $1,000,000 per occurrence. All policies shall name Landlord
and the mortgagee of the Building as an additional named insured, as their
interest may appear. The initial mortgagee shall be Travelers Insurance Company.
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Tenant agrees to maintain or cause to be maintained liability insurance
against claims for bodily injury, loss of life or property damage occurring on
the Building Common Area (as that term is defined below) with bodily injury,
loss of life and property damage coverage in a combined single limit of not
less than One Million Dollars ($1,000,000.00) for a total claims for any one
occurrence. All policies shall name Tenant, Landlord and the mortgagee of the
Building as an additional named insured, as their interest may appear.
Tenant shall also provide hazard insurance coverage to the extent of the
full replacement value covering all of Tenant's property, fixture, equipment,
tools, improvements, stock, goods, wares or merchandise, that it may have in or
on or about the Premises.
To the extent that Tenant fails to provide the foregoing insurance, either
hazard or liability, Tenant shall be responsible to Landlord, as his interest
appears, for such damage that would have been insured by said policies but for
Tenant's failure to obtain such insurance.
Landlord agrees to keep the building insured against loss or damage by
fire and the perils (including loss of rents insurance) commonly covered under
the standard extended coverage endorsement to the extent of one hundred percent
(100%) of the replacement value thereof, including all improvements,
alterations, additions and completed changes made by Landlord, but excluding
fixtures and equipment owned by Tenant. All such insurance shall be carried for
the protection of both Landlord and Tenant. Landlord shall provide Tenant with
satisfactory evidence of such insurance coverage upon Tenant's written request.
In case of loss or damage covered by said building insurance, the proceeds of
such insurance shall be used by Landlord to restore the Premises as provided
in this Lease to the extent that such proceeds are required for such purpose.
Tenant shall reimburse Landlord for Tenant's Proportionate Share (as
defined above in Article 4. Property Taxes.) of such
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insurance premium costs as additional rent hereunder within ten (10) days of
receipt from Landlord of an invoice evidencing payment of such premium. If
Landlord is required by its mortgagee, to maintain a building insurance premium
impound account, Tenant shall pay 1/12 of Tenant's proportionate share of the
estimated annual building insurance premium in advance each month along with
the minimum rental payment.
The policies for the foregoing insurance shall provide that the proceeds
thereof shall be payable to the Tenant and to the Landlord, as their respective
interests may appear. Such insurance policies shall provide that Landlord
shall be given thirty (30) days written notice of cancellation or alteration of
any policy.
Landlord and Tenant hereby waive any rights each may have against the
other on account of any liability claim, loss, or damage occasioned to Landlord
or Tenant, as the case may be, their respective property, the Premises (or its
contents) or to portions of the Building. Neither Landlord or Tenant or any
other parties of the Building shall not be liable to the other or anyone
claiming by, through or under such party, including an insurance carrier or
carriers, for any insurable loss or damage, and no such carriers shall have the
right to subrogate against the other party, or any other such parties. All of
the insurance policies required hereunder shall contain an endorsement by the
insurance carrier or carriers waiving any and all rights of subrogation against
Landlord, Tenant and any other parties, a copy of which endorsement or
endorsements, or evidence thereof by way of certificate shall be furnished to
the Landlord and Tenant by the other hereto.
ARTICLE 5. TENANT'S USE. The Tenant may use the premises for conducting
its research, development and manufacturing of artificial limbs and other
medical devices. Tenant shall use the Premises only for lawful and proper
purposes, which are permissible under applicable law (including under
applicable zoning laws). Tenant shall not make any use of
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the Premises which will cause cancellation of any insurance policy covering the
same and shall not keep or use on the Premises any article, item, or thing
which is prohibited by the terms of the hazard insurance policy covering the
Premises. Tenant shall not commit any waste upon the Premises and shall not
conduct or allow any business, activity or thing on the Leased Premises which
is or becomes unlawful, prohibited, or a nuisance or which may cause damage to
Landlord, to occupants in the vicinity of the Premises, or to other third
parties.
Compliance with Laws. Tenant covenants to Landlord, and Landlord covenants
to Tenant, not to violate any health, building or zoning laws, ordinance, rule
or regulation of any governmental authority pertaining to the Premises, the
Building, or Common Areas, as the case may be.
ARTICLE 6. POSSESSION/LANDLORD'S TITLE. Landlord represents, warrants and
covenants the Premises shall be delivered to the Tenant by Landlord as herein
provided, free and clear of all tenants and occupants and the rights of either.
The Premises shall also be free of liens (except those presently of record),
encumbrances and violations of laws, ordinances and regulations including
mortgages and trust deeds none of which Landlord represents shall adversely
affect the use and occupancy of the Premises. Prior to the Commencement Date
and upon Tenant's written request to Landlord, Landlord shall furnish evidence
that title to the Premises is in the condition required hereunder.
ARTICLE 7. RENT.
Minimum Rent. The Tenant agrees to pay the Landlord at such address as
shall from time to time be designated by Landlord, as minimum rental during the
initial Term and commencing on the first day of the Term without right of
offset or deduction, the monthly amount of:
1st Lease year - $1,550.00/mo. 1st-4th mo.
- $3,065.00/mo. 5th-8th mo.
- $4,550.00/mo. 9th-12th mo.
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2nd Lease year - $5,300.00/mo.
3rd Lease year - $5,300.00/mo.
4th Lease year - $5,300.00/mo.
The minimum rental shall be payable monthly, in advance, without demand on
the first day of each calendar month throughout the Term. Should the Term of
this Lease commence on any day other than on the first (1st) day of the
calendar month, the monthly rental for such fractional month shall be prorated
accordingly.
Late Penalty. After written notice has been provided to Tenant and the ten
(10) day "cure period" provided in said notice has expired, (as further
clarified in Lease Article 15) such unpaid amounts shall bear interest at a rate
equal to fifteen percent (15%) ("Default Interest Rate") from such date to the
date of payment.
ARTICLE 8. SIGNS. With the prior written approval of Landlord, which
approval shall not be unreasonably withheld or delayed, Tenant shall have the
right to place on the Building or Premises signage necessary for the operation,
identification, and advertisement of Tenant's business. Such sign installation
shall not adversely affect or damage the physical structure of the Building,
nor detract from the overall harmony of he Building and the Metro Business Park
development. All such signs must conform with the codes and regulations of West
Valley City and adhere to the signage criteria for the development. (See
Exhibit "D" attached hereto and incorporated herein.)
ARTICLE 9. FIXTURES, PERSONAL PROPERTY, AND ALTERATIONS. All fixtures (not
including trade fixtures) permanently installed or attached to the Premises by
and/or at the expense of Tenant shall become the property of Landlord upon the
expiration or earlier termination of this Term. Any trade fixtures installed in
the Premises by Tenant or personal property of Tenant located within or on the
Premises shall remain the property of the Tenant or Tenant's Lessors, and the
Landlord agrees that so long as Tenant is not in default hereunder, Tenant or
its Lessors shall
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have the right at any time, and from time to time or within thirty (30) days
after the expiration or earlier termination of this Term or any extension or
renewal thereof, to remove any and all of its trade fixtures or personal
property which it may have stored or installed in the Premises, provided,
however, that (a) Tenant will repair all damage to the Premises occasioned by
such removal, and (b) if Tenant utilizes all or any portion of the thirty (30)
day period allowed for removal of such fixtures and equipment beyond the Term
or renewal thereof, it shall pay to the Landlord as rental therefore, a sum
equal to the monthly rental or a pro rata portion thereof. Landlord expressly
agrees to waive and/or subordinate any claim or lien which Landlord may or
might have against the Premises or trade fixtures and personal property of
Tenant in favor of a lessor who intends to lease any of the same to Tenant or
any entity providing financing for acquisition of the same. Tenant shall make
no structural alteration, additions, or deletions to interior leasehold
improvements in the Premises without express written consent of Landlord, such
consent not to be unreasonably withheld or delayed.
ARTICLE 10. UTILITIES. During the Term, the Tenant shall pay for all
water, gas, electricity, and other costs of utilities connected with, consumed,
or used by it in connection with its occupancy of the Premises. Prior to the
Commencement Date, Landlord shall cause, at its sole expense, the natural gas
and electrical power utility facilities to be separately metered to the Premises
and Tenant shall pay for such metered consumption directly to the appropriate
utility company. Additionally, prior to the Commencement Date Landlord shall
install an "inline" water meter to determine Tenant's consumption and use of
water and sewer utilities for billing purposes. Landlord shall "read" said
inline meter every other month and shall ▇▇▇▇ Tenant for such usage every other
month based upon such readings. Tenant shall pay Landlord for such usage within
10 days after receipt of such billing as additional rent hereunder.
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In the event any utility service to the Premises is interrupted or
temporarily discontinued for any reason other than the intentional acts or
negligence of Landlord or unless covered by the warranty given hereafter,
Landlord shall not be liable therefor to Tenant and the rent required to be
paid hereunder shall not be abated as a result thereof, and Tenant waives any
claims it might otherwise have against Landlord as a result of any such
interruption or discontinuation.
ARTICLE 11. CONSTRUCTION WARRANTY. Subject to the required adequate
maintenance by Tenant as defined in Article 12, and in addition to Landlords
obligation of repair, Landlord hereby warrants to Tenant that the materials,
machinery, equipment, and workmanship of the Premises and Building are and
shall be free of defects for a period of one (1) year commencing with the
Commencement Date. Additionally, Landlord hereby warrants the roof of the
Building against leakage for a two (2) year period commencing with completion
of the interior improvements as further defined in Article 3 herein. Landlord
shall promptly repair any defects in the items covered in this warranty. After
such warranty periods, Landlord shall assign to Tenant, any equipment and
fixture warrantys issued by manufactures which shall extend beyond Landlord's
warranty period. Landlord shall not be responsible for any maintenance or
repair caused by the fault or neglect of the Tenant.
ARTICLE 12. MAINTENANCE AND REPAIRS.
(a) Landlord agrees to make and pay for all structural repairs, to
exterior walls, structural columns and systems and the structural floor of the
Building which collectively enclose or affect the Premises including without
limitation, structural support portions of the roof, foundation, structure
supports, and walls. Landlord further agrees to make and pay for all repairs to
the interior of the Premises which may be of a structural nature and which are
not made necessary by the negligent use of the Premises by Tenant, and such
other repairs structural or otherwise, to the interior of the Building as may
be necessary by
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reason of Landlord's failure to maintain the exterior.
(1) Landlord shall be liable for damages sustained by Tenant, including
damage to Tenant's trade fixtures, supplies, inventory and other property on the
Premises (unless covered by insurances Tenant is required to furnish under the
provisions of Article 4 Insurance) resulting from the failure of Landlord to
make any repairs required to be made by Landlord; provided, however, Landlord
shall not be so liable unless Tenant has given written notice to Landlord of the
need for such repairs and Landlord has failed to make the same with due
diligence.
(2) Landlord agrees that if in an emergency it shall become necessary to
make any repairs thereby required to be made by Landlord and Landlord cannot be
timely notified of the need for such emergency repairs; or in the event Landlord
fails to make repairs it is obligated to make pursuant to this article, Tenant
may, at its option, have the repairs made and pay the cost thereof and in such
event Landlord agrees to reimburse Tenant within thirty (30) days after receipt
from Tenant of true and correct copies of any reasonable invoices and/or
reasonable billing statements received by Tenant from the persons making any
such repairs providing said amounts do not exceed the reasonable value for the
work performed and the materials supplied. If Landlord fails to do so, Landlord
will also pay Tenant interest on such amounts at the Default Interest Rate until
paid. The rights of Tenant hereunder specifically do not include the right to
offset or deduct any amounts claimed hereunder from rentals due.
Landlord reserves the right, after reasonable notice to Tenant, to enter
upon the Premises (in a manner that will not unnecessarily interfere with the
business of Tenant) during business hours at any time to inspect the same and to
make necessary repairs to fulfill Landlord's obligation hereunder.
(3) Landlord shall be responsible for the initial painting of the
improvements and Tenant shall be responsible for painting thereafter. Landlord
shall not be responsible for any
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maintenance or repair caused by the fault or neglect of the Tenant, or due to
hazards and risks covered or required to be covered by insurance hereunder
except as insurance proceeds are available therefor.
(b) Tenant agrees to make and pay for all other maintenance and repairs
which are not the responsibility of Landlord, to the Premises, including
painting of interior walls, maintenance, repair and replacement of equipment,
the roof, interior walls, wires, conduits, sewers, drains and other utility
facilities, except for such maintenance and repairs as defined under Article 11.
Construction Warranty. Tenant further agrees to make and pay for all repairs to
the Premises which may be of a structural nature which are made necessary by the
negligent use of the Premises by Tenant, and such other repairs structural or
otherwise to the Building as may be necessary by reason of Tenants failure to
maintain the Premises.
(1) Tenant shall be liable for damages sustained by Landlord including
damage to the Building and other property on the Premises (unless covered by
insurances Landlord is required to furnish), resulting from the failure of
Tenant to make any repairs required to be made by Tenant provided, however,
Tenant shall not be so liable unless Landlord has given written notice to Tenant
of the need for such repairs and Tenant has failed to make the same with due
diligence.
(2) Tenant agrees that if in an emergency it shall become necessary to
make any repairs thereby required to be made by Tenant and Tenant cannot be
timely notified of the need for such emergency repairs; or in the event Tenant
fails to make repairs it is obligated to make pursuant to this article, Landlord
may, at its option, have the repairs made and pay the cost thereof and in such
event Tenant agrees to reimburse Landlord within thirty (30) days after receipt
from Landlord of true and correct copies of any reasonable invoices and/or
reasonable billing statements received by Landlord from the persons making any
such repairs providing said amounts do not exceed the reasonable value for the
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work performed and materials supplied. If Tenant fails to do so, Tenant will
also pay Landlord interest on such amounts at the Default Interest Rate until
paid.
(c) It is understood and agreed that should either party to this
Agreement fail or refuse to start and to proceed thereafter with due diligence
to make any repairs or maintenance as may be reasonably necessary for the
purpose of fulfilling the terms and conditions of the agreements herein set
forth within a reasonable length of time (not to exceed seven (7) days) after
being notified in writing of the need thereof, that the other party hereto may
make such repairs at the cost and expense of the party so failing or refusing.
ARTICLE 13. RESTORATION OF DAMAGE. If the Premises or the Building are
damaged by fire, the elements or other casualty, Landlord shall promptly repair
all damage and restore the Premises to their condition immediately prior to the
occurrence of such damage including any improvements or alterations or Tenant's
improvements made by Landlord or Tenant. During the period of reconstruction
referred to above, rent or other sums payable by Tenant shall ratably ▇▇▇▇▇,
based upon the percentage of the Premises usable during reconstruction or upon
the degree Tenants use of the same is impaired. The Term of the Lease shall
extend one additional day for each day the Premises are not usable due to the
reconstruction process.
If the Premises shall be totally destroyed or the Building damaged to such
extent and/or shall it be determined that more than 120 days will be required
to rebuild the Premises, and/or the Building (as the case may be) both Landlord
and Tenant shall have the right to terminate this Lease upon written notice to
the other within 30 days of the occurrence at which time this Lease shall become
null and void, and Landlord shall refund any prorated amount of prepaid rent.
ARTICLE 14. EMINENT DOMAIN.
(a) In the event that at any time during the continuance of this Lease,
the Premises, or any portion thereof, be taken or
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appropriated or condemned by reason of eminent domain, there shall be such
division of the proceeds and awards in such condemnation proceedings in
accordance with the respective interests of the parties in the condemned
property as specified in paragraph (b) below. If legal title to more than
thirty percent (30%) of the entire Premises be taken by condemnation, or if
condemnation makes the Premises unsuitable for the use it was being put to at
the time of the notice of condemnation, then the Lease shall be, at the option
of the Tenant, terminated at the time of possession by the governmental
authority. In the event that less than 30% of the Premises shall be taken, or
Tenant shall determine not to so terminate the Lease as provided herein, then
the rent shall be abated or reduced according to the extent Tenant is deprived
of the use or benefit of the Premises.
(b) In any taking of the premises or any part thereof, whether or not
this Lease is terminated as in this Article provided, the parties hereto shall
claim and shall be entitled to receive an award or compensation therefore in
accordance with their respective legal rights.
ARTICLE 15. DEFAULT IN PAYMENT OF RENT OR ABANDONMENT. In the event of
default by Tenant in the performance of its obligation to pay rent hereunder,
or in the event Tenant shall abandon the premises, (after written notice has
been provided from Landlord to Tenant stating Tenant's default for non payment
of rent or abandonment of the Premises said notice providing Tenant a "cure
period" of ten (10) days after such written notice), or in the event Tenant, or
any guarantor hereunder, shall be adjudicated as bankrupt for the benefit of
creditors, or enter into an arrangement or participate voluntarily or
involuntarily in any bankruptcy or related proceeding under Federal or State
Law, Landlord shall have the right to terminate this Lease and to re-enter the
Premises or any part thereof with or without process of law; or Landlord, at
his option, without terminating this Lease, shall have the right to re-enter
the Premises and sublet the whole or any part thereof, for the
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account of the Tenant, upon as favorable terms and condition as the market will
allow provided Landlord shall use reasonable efforts to obtain the best rent
available thereon. In the latter event, the Landlord shall have the right to
collect any rent which may thereafter become payable under such sublease and to
apply the same first to the payment of any reasonable expenses incurred by the
Landlord in the dispossessing the Tenant and in subletting the Premises, and
Landlord may charge interest at the rate equal to one percentage point higher
than the price bank rate of Valley Bank & Trust in Salt Lake City, which rate
shall vary from time to time as the prime bank rate varies, per annum on such
expenses; and, second, to the payment of the rental herein reserved and the
fulfillment of Tenant's covenants hereunder, and the Tenant shall be liable for
amounts equal to the installments of rent as they become due, less any amounts
actually received by the Landlord and applied on account of rental as
aforesaid. The Landlord shall not be deemed to have terminated this Lease by
reason of taking possession of the Premises unless written notice of such
termination has been served on the Tenant.
ARTICLE 16. OTHER DEFAULTS OF TENANT. It is mutually agreed that if the
Tenant shall default in performing any of the terms or provisions of this Lease
other than as provided in the preceding Article, and if the Landlord shall give
to the Tenant notice in writing of such default, and if the Tenant shall fail
to cure such default within fifteen (15) days after the date of receipt of such
notice, or if the default is of such a character as to require more than
fifteen (15) days to cure, and if Tenant shall fail to use reasonable diligence
in curing such default, then in such applicable event the Landlord may cure
such default for the account of and at the cost and expense of Tenant, plus
interest at the rate equal to one percentage point higher than the prime bank
rate of Valley Bank & Trust, in Salt Lake City, which rate shall vary from time
to time as the prime bank rate varies, per annum, and the sum so expended by
the Landlord and
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interest thereon shall be deemed to be additional rent and on demand shall be
paid by the Tenant on the day when rent shall next become due and payable.
Failure to pay any additional rent as provided in this Article shall be deemed a
failure to pay rent within the meaning of Article 15. Default in Payment of
Rent or Abandonment. Subject to the cure period provided for therein.
ARTICLE 17. LANDLORD DEFAULT. If Landlord fails to make any repairs or do
any work required of Landlord by the provision of this Lease or in any other
respect fails to perform any of the covenants, terms or conditions of this
Lease to be performed by Landlord and, unless another time limit is elsewhere in
this Lease specifically provided, such default continues for a period of thirty
(30) days after written demand for performance is given by Tenant, then and in
any of such events, Tenant may, in addition to any other remedies provided for
in this Lease or by law (including the right to ▇▇▇ for damages, an injunction,
specific performance or termination), elect to make such payments and cure such
defaults on behalf of Landlord and, in connection therewith, do all work
and make all reasonable payments deemed necessary by Tenant, including costs and
charges in connection with any legal action which may have been commenced or
threatened. Landlord agrees to reimburse Tenant upon demand the amounts so paid
by Tenant providing said amounts do not exceed the reasonable value for the
work performed and material supplied and accrued interest at Default Rate.
ARTICLE 18. QUIET ENJOYMENT AND SUBORDINATION. Landlord warrants and
covenants it is lawfully seized of the Building and Premises, has full
authority to grant this Lease and perform the Terms hereof to be performed by
Landlord and that Tenant shall and may peacefully and quietly have, hold and
enjoy the Premises for the full term of this Lease. Tenant understands that
other persons and entities conduct businesses in the Building. Tenant covenants
and agrees to conduct its business in such a manner as to not unreasonably
interfere with other occupants of the Building. Landlord shall take all
reasonable efforts, including
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covenants given to Landlord in leases to other Tenants in the Building, to
assure other Tenants will conduct their businesses in the Building so as not to
be a nuisance or to interfere with Tenants occupation of the Premises.
Without waiving or releasing Landlord from its obligation of quiet
enjoyment herein contained, Tenant agrees that upon written request of Landlord
it will subordinate its interest herein to any mortgages currently encumbering
the Premises and to renewals, extensions or refinancing thereof and, upon
reasonable request of Landlord, execute any and all documents reasonably
necessary to evidence that the leasehold interest of Tenant hereunder is
subordinate to existing mortgages and that Tenant will also execute such
documents as may be necessary and required to subordinate its leasehold
interest to mortgages that may hereafter be placed on the Premises by Landlord
or its successors or assignors, so long, as in both instances, the mortgage
holder agrees to Tenant that neither it nor any purchasers at foreclosure of
such mortgage shall terminate the Lease, or disturb the Tenant so long as it is
not in default hereunder. Landlord warrants that any mortgage presently
encumbering the premises provides for quiet enjoyment of the premises by Tenant
in the event of foreclosure by the mortgage holder, providing Tenant is not in
default hereunder and Landlord agrees to supply evidence of such rights of
quiet enjoyment.
ARTICLE 19. WAIVER. No delay or omission by either party hereto to
exercise any right or power accruing upon any non-compliance or default by the
other party with respect to any of the terms hereof shall impair any such right
or power to be construed to be a waiver thereof, and every such right and power
may be exercised at anytime during the continuance of such default. It is
further agreed that a waiver by either of the parties hereto of any of the
covenants and agreements hereof to be performed by the other shall not be
construed to be a waiver of any succeeding breach thereof or of any other
covenants or agreements herein contained.
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ARTICLE 20. ATTORNEY'S FEE. In the event of any action at law or in equity
between Landlord and Tenant to enforce any of the provisions and/or rights
hereunder or to recover damages for breach hereof, the unsuccessful party to
such litigation covenants and agrees to pay to the successful party all costs
and expenses, including reasonable attorney's fees, incurred therein by such
successful party, and if such successful party shall recover judgment in any
such action or proceeding, such costs and expenses and attorney's fees shall be
included in and as part of such judgment.
ARTICLE 21. NOTICES. Any notices or demand required or permitted to be
given under this Lease shall be deemed to have been properly given when, and
only when, the same is in writing and has been deposited in the United States
Mail, with postage prepaid, to be forwarded by certified mail and addressed as
follows:
TO THE LANDLORD AT: ▇/▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
TO THE TENANT AT: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Notice shall be deemed effective upon receipt. Such addresses may be changed
from time to time by either party by serving notices as above provided.
ARTICLE 22. ASSIGNMENT AND SUBLEASING. With the specific prior written
consent of Landlord first obtained, which consent shall not be unreasonably
withheld or delayed, Tenant can, at any time, assign this Lease or sublet all
or any portion of the Premises. Any purported assignment or sublease without
Landlord's prior written approval shall be null and void and of no force and
effect whatsoever.
ARTICLE 23. SCOPE OF THE AGREEMENT. This Lease shall be considered to be
the only agreement between the parties hereto. All negotiations and oral
agreements acceptable to both parties
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are included therein. No term of this agreement shall be construed to deny the
parties of any provision under the laws of the State of Utah.
ARTICLE 24. OBLIGATIONS OF SUCCESSORS. Landlord and Tenant agree that all
of the provisions hereof are to be construed as covenants and agreements as
though the words importing such covenants and agreements were used in each
separate paragraph hereof, and that all of the provisions hereof shall bind and
inure to the benefit of the parties hereto, and their respective heirs, legal
representatives, successors and assigns.
ARTICLE 25. PARKING. Tenant shall have the right to non-exclusive use of
the parking stalls adjacent to the Premises and as set forth on Exhibit "A"
depict hereto. Such parking and maintenance thereof shall remain under the
control of Landlord (subject to reimbursement as hereinafter set forth) and
Landlord shall have the right from time to time to publish reasonable
non-discriminatory regulations for Tenant's use of the parking which shall not
unreasonably restrict Tenants use of the same, with which regulations Tenant
covenants to comply. Landlord shall provide four "handicapped" parking stalls
adequately identified in close proximity to the main entrance to the Premises
as designated on Exhibit "A".
ARTICLE 26. METRO BUSINESS PARK DEVELOPMENT. Exhibit "C" hereto contains a
proposed site plan for Landlord's entire construction project to be known as
Metro Business Park (hereinafter referred to as the "Development"). Tenant
acknowledges that the site plan for the Development is subject to change and
that Landlord may construct the Development in a totally different
configuration or may not develop certain portions; provided however nothing
herein contained shall allow Landlord to alter the Development in any manner
which would limit ingress or egress to the Building from adjacent streets or in
such a manner which would substantively increase Tenants cost of occupancy of
the Premises. Landlord reserves the right to sell the Development or portions
thereof as developed with buildings
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or as undeveloped property provided any sale of the property described on
Exhibit "A" shall be subject to this Lease. The parties understand that in the
event of Landlord's sale of portions of the property of the Development, prior
to such sale, Landlord shall place cross easement, access and parking
easements, suitable to Landlord upon released and unreleased portions of the
Development to facilitate its continued integral use. Common Area Maintenance
provisions contained in the next immediate paragraphs of this Lease shall be
unaffected by any such partial sale and the Landlord shall exercise its best
efforts to ensure the parking and common areas of the entire Development, as
built, will be under common management.
ARTICLE 27. COMMON AREAS. Those areas within the outer property lines of
the property as delineated on the plat attached hereto marked Exhibit "A",
exclusive of areas therein depicted as the Building area shall be known as
Building Common Areas, which areas shall be for the mutual non-exclusive use of
all Landlord's Tenants, including Tenants of the Building, their employees,
customers and invitees. All other areas of the Development, (exclusive of the
Building Common Area as defined above) for joint use of all Tenants within the
Development shall be known as Development Common Areas as shown on Exhibit "C"
attached hereto and incorporated herein. Landlord covenants and agrees at its
sole cost and expense to improve said Common Areas by installing and
constructing thereon access roads, pedestrian walkways, sidewalks, exterior
canopies, delivery and landscaped areas and lighting facilities as depicted
therein to the extent to which Landlord shall determine to be necessary.
Notwithstanding anything elsewhere herein contained, Landlord reserves the
right from time to time to make reasonable changes in, additions to and
deletions from the Common Areas (so long as parking is available to Tenant and
Tenant's ingress and egress shall not be effected by said changes), and the
purposes to which the same may be devoted, and the use of Common Areas shall at
all times be subject to such reasonable rules and regulations as may be
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promulgated by Landlord.
ARTICLE 28. COMMON AREA MAINTENANCE. Landlord will maintain or cause to
be maintained the Building Common Areas and Development Common Areas and Tenant
will reimburse Landlord for Tenant's Proportionate Share of the cost of such
maintenance and other Common Area expenses as hereinafter provided.
(a) Building Common Area maintenance costs and expenses shall be those
expenses incurred by Landlord in the operation, maintenance and repair of the
Building Common Area (as shown on Exhibit "A" attached hereto and incorporated
herein), which, in accordance with generally accepted accounting principles
consistently applied and allocated to any particular calendar year, are
properly chargeable and reasonably applicable to the operation, maintenance and
repair thereof including, but shall not be limited to, upkeep, exterior
painting, repairs, replacements and improvements in the Common Areas, snow
removal, sweeping and cleanup, repair of building components in common with
other Building Tenants, depreciation allowance (calculated on a straight-line
basis over the useful life of each item of equipment) on any machinery and
equipment owned by Landlord and used in connection therewith; payroll and
payroll costs of on-site employees (to the extent employed for the benefit of
maintenance of the Building common areas), utility services including fire line
water service charges, police protection, night watchmen, premiums for
property damage and fire insurance required hereunder which shall insure
Landlord in the Building Common Areas, any real estate tax consultant expense
incurred for the purpose of maintaining equitable tax assessments and all
property taxes or assessments levied or assessed against all Common Areas. In
addition, such costs shall include administrative costs equal to ten percent
(10%) of the total cost paid or incurred by Landlord under this paragraph.
Tenants proportionate share of the Building Common Area expenses shall be
determined in the same manner as previously defined in Article 4. Property
Taxes.
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(b) Development Common Area maintenance costs and expenses shall be those
expenses incurred by Landlord in the operation, maintenance and repair of the
Development Common area, roadways and other common facilities for use of all
Tenants within the Development (as shown on Exhibit "C" attached hereto and
incorporated herein), which, in accordance with generally accepted accounting
principles consistently applied and allocated to any particular calendar year,
are properly chargeable and reasonably applicable to the operation, maintenance
and repair thereof including, but shall not be limited to upkeep, exterior
painting, repairs, replacements and improvements in the Common Areas, snow
removal, sweeping and cleanup, depreciation allowance (calculated on a
straight-line basis over the useful life of each item of equipment) on any
machinery and equipment owned by Landlord and used in connection therewith;
payroll and payroll costs of on-site employees (to the extent employed for the
benefit of maintenance of the Development common areas), utility services
including fire line water service charges, police protection, night watchmen,
premiums for public liability, property damage and fire insurance required
hereunder which shall insure Landlord in the Development Common Areas, any real
estate tax consultant expense incurred for the purpose of maintaining equitable
tax assessments on the Development, all property taxes or assessments levied or
assessed against all Common Areas, which, if not separately assessed, shall be
determined, for land, by the ratio of land area designated for Common Area use
to the total land area in the Development and, for improvements, on a fair and
equitable allocation among the various improvements in the Development, giving
weight to the factors which determine the amount of the real property tax or
assessment in question. In addition, such costs shall include administrative
costs equal to ten percent (10%) of the total cost paid or incurred by Landlord
under this paragraph. Tenants Proportionate Share of the Development Common
Area expenses shall not be the Tenant's Proportionate Share as previously
defined but rather that portion
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of all such expenses which are equal to the proportion which the number of
square feet of gross leasable area of the Premises bears to the total number of
square feet of gross leasable area of buildings in the Development as are from
time to time completed as of the commencement of each calendar year.
(c) Those costs not considered to be Building Common Area Expenses or
Development Common Area Expenses (hereinafter referred to as the "Common Areas")
and which are to be excluded for purposes of determining any Common Area
Expenses payable by Tenant are: (a) wages and salaries of off-site personnel
employed by Landlord or affiliates of Landlord; (b) repairs, maintenance and
janitorial services for the Premises which are paid or contracted for directly
by Tenant; (c) costs of alterations to the Premises; (d) real estate brokers; or
agents; leasing commissions; (e) capital expenditures, being expenditures of
such a nature and amount or character which under generally accepted accounting
principles were or are required to be capitalized in the year made; (f) repairs
of a structural nature to the building as required by Landlord hereunder or for
cracking or breakage of glass, exterior doors, and exterior surface of the
Building caused by structural failures of the Building, design or construction
defects, foundation settlement, or Landlord's negligence; (g) depreciation and
other noncash expenses other than those expressly included above; (h) interest
and principal payments on mortgages, construction loans or other debt costs; (i)
costs of Building improvements, alterations, or work done by Landlord for other
tenants of the Building; (j) costs of installation, maintenance and repair of
tenant improvements for other tenants of the Building; (k) tenant operating
costs for other tenants of the Building which are separately, or directly
provided to such tenant or tenants by means of separate metering or separate
charges or otherwise.
(d) Tenant shall pay, as additional rent to Landlord, Tenant's
proportionate share of the Common Area expenses in the following manner:
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(1) From and after the Commencement Date of the Term, but subject to
adjustment as hereinafter in this subparagraph (1) provided, Tenant shall pay
Landlord in advance on the first day of each calendar month of the Term an
amount computed by applying the rate of two and one-half cents ($.025) per
square foot to the gross leasable area of the Premises. The foregoing rate per
square foot may be adjusted by Landlord by notice to Tenant at the end of any
calendar month on the basis of Landlord's experience and reasonably anticipated
costs.
(2) Within thirty (30) days following the end of each calendar year
of the Term, Landlord shall furnish Tenant a statement covering the calendar
year just expired, showing the total operating expenses for the Common Areas
the amount of Tenant's Proportionate Share of the Common Area expenses for such
calendar year and the payments made by Tenant with respect to such calendar year
as set forth in subparagraph (d) 1. If Tenant's Proportionate Share of such
Common Area expenses exceeds Tenant's prepaid and estimated payments so made,
Tenant shall pay Landlord the deficiency within ten (10) days after receipt of
such statement. If said payments exceed Tenant's prorata share of such common
area expenses, Landlord shall pay Tenant the excess within ten (10) days after
receipt of such statement and if Landlord fails to do so tenant shall be
entitled to offset such amount against any future Common Area amounts owing (not
to be interpreted as an offset against minimum rental).
Landlord will make available to tenant, at any reasonable time, upon ten
(10) days' prior written notice from Tenant, Landlord's books and records
relating to the Common Area expenses and Tenant will have the right to have
such records inspected and copied during normal business hours by tenant's
employees or agents. If such inspection discloses that a verifiable error has
been made in Landlord's favor which results in an overpayment by Tenant of five
percent (5%) or greater than the amount actually due on an annual basis,
Landlord will reimburse Tenant such overpaid amount. If Landlord does not
agree that there has been
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an overpayment, Tenant may request an audit of the Common Area expenses by an
independent certified public accountant. If such audit discloses an overpayment
by Tenant of more than five percent (5%) of the amount due, Landlord will pay
the cost of the audit, and will refund the overpayment to Tenant. Otherwise,
Tenant will pay the cost of the audit.
There shall be appropriate adjustment of Tenant's share of the Common Area
expenses as of the commencement and expiration of the term of this lease. The
term "Gross Leasable Area", as used herein, shall be deemed to mean and include
all fully enclosed areas for the exclusive use and occupancy by Tenant, measured
from exterior surface of exterior walls (and from the extensions thereof, in
the case of openings), including warehousing or storage areas, clerical or
office areas, mezzanines or the second levels of any space and employee areas.
"Gross Leaseable Area" shall not include docks, areas for truck loading and
unloading nor any utility and/or mechanical equipment vaults or rooms (to the
extent such facilities lie outside exterior building lines).
Anything to the contrary notwithstanding, in the event Landlord or his
designated agent do not maintain the entire Common Areas, then and in that
event, for the length of time such condition may exist, Landlord's
responsibility shall only be towards the maintenance and repair of those
portions of the Common Area not maintained by others, and the "expense in
connection with said Common Areas" shall only refer to such areas maintained by
Landlord. In this event, Tenant's proportionate share of the expenses shall be
determined on the basis of the proportion of such expenses which the number of
square feet of gross leasable area in the Premises bears to the total number of
square feet of gross leasable area of buildings in the entire Development which
are from time to time completed as of the commencement of each calendar year,
exclusive of the area occupied and maintained by others.
ARTICLE 29. RIGHT OF FIRST REFUSAL ON ADJACENT AND CONTIGUOUS SPACE. Tenant
shall have a right of first refusal
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(the "Right of First Refusal") on all space in the Building. Any vacant space
in the Building shall be offered by Landlord to Tenant at the same rent and on
the same terms as Landlord intends to offer it to a bona fide prospective
tenant who has made an offer to lease such space and Tenant shall have the same
rights to lease the entire space available that Landlord intends to extend to
such a prospective tenant. Following written notice by Landlord to Tenant that
such space is available, Tenant shall have ten (10) business days within which
to provide Landlord with written notice of its intention to lease such space
and such notice, if given, shall constitute an acceptance of Landlord's terms
on such space and failure to so respond shall be deemed a rejection thereof. In
the event Tenant does not exercise its Right of First Refusal, Owner may not
thereafter lease such space at an effective rent that is more than five percent
(5%) per net rentable square foot per year less than the effective rent
proposed to Tenant or upon other terms which are substantially more favorable
unless such space is first reoffered to Tenant at such lower rent and/or more
favorable terms, in which case, when reoffered, Tenant shall have three (3)
business days within which to provide Landlord with written notice of its
intention to lease such space and such written notice, if given, shall
constitute an acceptance of Landlords reoffer terms on such space. Failure to so
respond shall be deemed a rejection thereof.
ARTICLE 30. EXPANSION/RELOCATION. At such time as Tenant requires
substantial additional space, and if the adjacent and contiguous space is not
available, Landlord will use best efforts to relocate Tenant into larger space
within the Metro Business Park development or any other development or space
which is under Landlords control. Should Landlord be able to relocate Tenant as
defined above, a new Lease Agreement shall be entered into between the parties
and said new lease shall supersede and take the place of this Lease Agreement.
ARTICLE 31. LEASE RENEWAL OPTION. Landlord hereby grants Tenant the right
and option to renew this Lease Agreement for one
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50
(1) additional and successive four (4) year period under the same lease terms
and conditions subject to an adjustment of rental defined below. Tenant must
provide written notice to Landlord stating Tenant's desire to renew this Lease
at least One Hundred Twenty (120) days prior to the expiration of the Term.
Tenant must be current under all Lease terms and conditions for this Lease
renewal right and option to be effective.
The adjusted minimum monthly rental for the renewal term shall be as
follows:
1st lease renewal year - ****
2nd lease renewal year - ****
3rd lease renewal year - ****
4th lease renewal year - ****
ARTICLE 32. SECURITY DEPOSIT. Tenant shall pay Five Thousand Dollars and
00/100 cents ($5,000.00) at the time of signing of this lease, to be held by
Landlord as security for the faithful performance of Tenant throughout the
Lease term. The security deposit shall be refundable to tenant within 30 days
of the end of the Term.
ARTICLE 33. The submission of this Lease for examination does not
constitute a reservation of or option for the lease premises and this Lease
becomes effective as a Lease only upon execution and delivery thereof by
Landlord to Tenant.
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51
IN WITNESS WHEREOF, the Landlord and Tenant have duly executed and affixed
their respective seals to this Lease Agreement on the day and year first above
written.
LANDLORD: ▇▇▇▇▇▇-ALLIANCE
a Joint Venture
By /s/ ▇.▇. ▇▇▇▇▇▇ III
---------------------------
▇.▇. ▇▇▇▇▇▇ III
Managing Partner
TENANT: MOTION CONTROL, INC.
a Utah Corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President
Attached hereto and incorporated herein:
Exhibit A - Building Site Plan
Exhibit B - Building Floor and Electrical Plan
Exhibit C - Overall Metro Business Park Site Plan
Exhibit D - Metro Business Park Signage Criteria
Exhibit E - Declaration of Easements and Covenants
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52
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement is made and entered into this 9th
day of March, 1988, by and between Textron Collective Investment Trust, a Rhode
Island Trust (Landlord) and IOMED, Inc., a Utah Corporation (Tenant).
WHEREAS, on October 1, 1986, a Lease Agreement (the Lease) was entered
into between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control
Inc., a Utah Corporation (Tenant), relating to certain real property situated
at 1290 West 2320 South, West Valley City, Salt Lake County, State of Utah,
consisting of approximately 10,000 square feet of office/warehouse/research and
development space as further described in the Lease. ▇▇▇▇▇▇ Alliance, on
February 17, 1988, sold its interest in the subject property to Textron
Collective Investment Trust, hereinafter referred to as Landlord,. Motion
Control Inc. on December 18, 1987, changed its name to IOMED Inc., hereinafter
referred to as Tenant.
WHEREAS, Landlord and Tenant are desirous to amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of TEN DOLLARS AND
NO CENTS ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. Commencing May 1, 1988, Tenant hereby leases from Landlord an
additional and approximate 3,410 square foot contiguous
office/warehouse/research and development space improved as shown on
Exhibit "A", attached hereto and incorporated herein. As of May 1, 1988,
the Demised Premises shall mean the entire approximate 13,410 square foot
space and the Lease term for the entire Demised Premises shall be as
specified in the Lease Agreement.
2. Landlord shall provide and install at Landlord's expense, the
improvements in the subject additional space as shown on Exhibit "A" with
an improvement allowance of $78,280.00.
3. Article 7. Rent. shall be revised to read in its entirety as
follows:
Minimum Rent. The Tenant agrees to pay the Landlord at such address
as shall from time to time be designated by Landlord, as minimum rental
during the initial Term and commencing on the first day of the Term without
right of offset or deduction, the monthly amount of:
1st Lease Year (1-1-87/12-31-87) - $36,660.00 per year
$1,550.00 per month - (1-1-87/4-30-87)
$3,065.00 per month - (5-1-87/8-31-87)
$4,550.00 per month - (9-1-87/12-31-87)
2nd Lease Year (1-1-88/12-31-88) - $94,974.72 per year
$5,300.00 per month - (1-1-88/4-31-88)
$9,221.84 per month - (5-1-88/12-31-88)
3rd Lease Year (1-1-89/12-31-89) - $111,097.92 per year
$9,258.16 per month
4th Lease Year (1-1-90/12-31-90) - $111,538.08 per year
$9,294.84 per month
The minimum rental shall be payable monthly, in advance, without
demand on the first day of each calendar month throughout the Term. Should
the Term of this Lease commence on any day other than on the first (1st)
day of the calendar month, the monthly rental for such fractional month
shall be prorated accordingly.
53
Late Penalty. After written notice has been provided to tenant
and the ten (10) day "cure period" provided in said notice has expired,
(as further clarified in Lease Article 15) such unpaid amounts shall
bear interest at a rate equal to fifteen percent (15%) ("Default
Interest Rate") from such date to the date of payment.
4. Article 31. Lease Renewal Option shall be revised to read in
its entirety as follows:
Article 31. Lease Renewal Option. Landlord hereby grants Tenant
the right and option to renew this Lease Agreement for one (1)
additional and successive four (4) year period under the same Lease
terms and conditions subject to an adjustment of rental defined below.
Tenant must provide written notice to Landlord stating Tenant's desire
to renew this lease at least one hundred twenty (120) days prior to the
expiration of the Term. Tenant must be current under all Lease terms and
conditions for this Lease renewal right and option to be effective.
The adjusted minimum monthly rental for the renewal term shall
be as follows:
1st Lease Renewal Year -- (1-1-91/12-31-91)
$82,308.00 per year -- $6,859.00 per month
2nd Lease Renewal Year -- (1-1-93/12-31-92)
$84,877.80 per year -- $7,073.15 per month
3rd Lease Renewal Year -- (1-1-93/12-31-93)
$87,504.00 per year -- $7,292.15 per month
4th Lease Renewal Year -- (1-1-94/12-31-94)
$90,240.00 per year -- $7,520.00 per month
5. Considering the increase in square footage Leased by Tenant
as of May 1, 1988, Tenant's proportionate share of property taxes,
insurance, utilities and common area maintenance (as referred to in the
Lease) shall apply as well to the subject additional space Leased.
All the terms, covenants and provisions of the Lease Agreement
including all Lease attachments shall remain unchanged and shall continue in
full force and effect except as specifically amended herein.
EXECUTED this day and year first above written.
LANDLORD: ▇▇▇▇▇▇ Property Management, as Agent for
Textron Collective Investment Trust,
a Rhode Island Trust
By /s/ ▇. ▇▇▇▇▇▇, III
---------------------------
▇. ▇▇▇▇▇▇, III
AGENT
TENANT: IOMED Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
PRESIDENT
54
SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement is made and entered into this 5th
day of May, 1989 by and between Textron Collective Investment Trust, a Rhode
Island Trust (Landlord) and IOMED Inc., a Utah Corporation (Tenant).
WHEREAS, on October 1, 1986, a Lease Agreement (the Lease) was entered
into between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control
Inc., a Utah Corporation (Tenant), relating to certain real property situated
at 1290 West 2320 South, West Valley City, Salt Lake County, State of Utah,
consisting of approximately 10,000 square feet of office/warehouse/research and
development space as further described in the Lease. ▇▇▇▇▇▇ Alliance, on
February 17, 1988, sold its interest in the subject property to Textron
Collective Investment Trust, hereinafter referred to as Landlord. Motion
Control Inc. on December 18, 1987, changed its name to IOMED Inc., hereinafter
referred to as Tenant.
WHEREAS on March 9, 1988, a First Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's Lease of approximately
3,410 square feet of additional and contiguous office/warehouse/research and
development space.
WHEREAS, Landlord and Tenant are desirous to further amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of TEN DOLLARS AND
NO CENTS ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. Commencing June 1, 1989, Tenant hereby leases from Landlord an additional
and approximate 4,107 square foot contiguous space as shown on Exhibit "A",
attached hereto and incorporated herein. As of June 1, 1989, the Demised
Premises shall mean the entire approximate 17,517 square foot space.
2. Tenant hereby accepts and leases from Landlord the subject additional and
contiguous 4,107 square foot space in its existing state of improvement, repair
and condition ("as is"). In the event Landlord should made any improvements,
modifications and/or repairs to the subject additional space on behalf of
Tenant, the cost of such shall be borne by Tenant in either a lump sum payment
to Landlord upon completion; or the cost of such shall be amortized over the
remaining initial Lease term and shall be repaid to Landlord as additional
rent, all to be agreed upon between Landlord and Tenant.
3. The base Lease term shall be extended for one (1) full year (January 1,
1991 - December 31, 1991) for an expiration date of December 31, 1991.
4. ARTICLE 7. RENT, as revised in the First Amendment to Lease Agreement,
shall be further revised to read in its entirety as follows:
Minimum Rent. The Tenant agrees to pay the Landlord at such address as
shall from time to time be designated by Landlord, as minimum rental during the
initial term and commencing on the first day of the term without right of
offset or deduction, the monthly amount of:
1st Lease Year (01-01-87/12-31-87) - $36,660.00/yr.
(01-01-87/04-30-87) $1,550.00/mo.
(05-01-87/08-31-87) $3,065.00/mo.
(09-01-87/12-31-87) $4,550.00/mo.
2nd Lease Year (01-01-88/12-31-88) - $94,974.72/yr.
(01-01-88/04-31-88) $5,300.00/mo.
(05-01-88/12-31-88) $9,221.84/mo.
3rd Lease Year (01-01-89/12-31-89) - $123,557.92/yr.
(01-01-89/05-31-89) $9,258.16/mo.
(06-01-89/12-31-89) $11,038.16/mo.
4th Lease Year (01-01-90/12-31-90) $11,146.04/mo. - $133,752.48/yr.
5th Lease Year (01-01-91/12-31-91) $8,784.25/mo. - $105,411.00/yr.
55
The minimum rental shall be payable monthly, in advance, without demand on
the first day of each calendar month throughout the Lease Term. Should the term
of this Lease commence on any day other than on the first (1st) day of the
calendar month, the monthly rental for such fractional month shall be prorated
accordingly.
Late Penalty. After written notice has been provided to Tenant and the ten
(10) day "cure period" provided in said notice has expired, (as further
clarified in Lease Article 15) such unpaid amounts shall bear interest at a rate
equal to fifteen percent (15%) ("Default Interest Rate") from such date to the
date of payment.
5. ARTICLE 31. LEASE RENEWAL OPTION, as revised in First Amendment to
Lease, shall be further revised to read in its entirety as follows:
ARTICLE 31. LEASE RENEWAL OPTION. Landlord hereby grants Tenant the right
and option to renew this Lease Agreement for one (1) additional and successive
three (3) year period under the same Lease terms and conditions subject to an
adjustment of rental defined below. Tenant must provide written notice to
Landlord stating Tenant's desire to renew this Lease at least one hundred twenty
(120) days prior to the expiration of the Term. Tenant must be current under all
Lease terms and conditions for this Lease renewal right and option to be
effective.
The adjusted minimum monthly rental for the renewal term shall be as
follows:
First Lease Renewal Year
(01-01-92/12-31-92) - $9,075.41/month - $108,904,92/year
Second Lease Renewal Year
(01-01-93/12-31-93) - $9,374.35/month - $112,492.20/year
Third Lease Renewal Year
(01-01-94/12-31-94) - $9,685.64/month - $116,227.68/year
6. Considering the increase in square footage leased by Tenant as of June
1, 1989, Tenant's proportionate share of property taxes, insurance, utilities
and common area maintenance (as referred to in the Lease) shall be appropriately
increased to reflect such increase in square footage leased and Tenant's
obligations, as referred to in the Lease, shall apply as well to the subject
additional space Leased.
All terms, covenants and provisions of the Lease Agreement and the First
Amendment to Lease Agreement, including all Lease attachments, shall remain
unchanged and shall continue in full force and effect except as specifically
amended herein.
EXECUTED this day and year first above written.
LANDLORD: ▇▇▇▇▇▇ PROPERTY MANAGEMENT, as Agent for
TEXTRON COLLECTIVE INVESTMENT TRUST,
a Rhode Island Trust
By /s/ ▇. ▇. ▇▇▇▇▇▇, III
-----------------------------------
▇. ▇. ▇▇▇▇▇▇, III
Agent
TENANT: IOMED INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
56
THIRD AMENDMENT TO LEASE AGREEMENT
This Third Amendment to Lease Agreement is made and entered into this 10th
day of July, 1989 by and between Textron Collective Investment Trust, a Rhode
Island Trust (Landlord) and IOMED Inc., a Utah Corporation (Tenant).
WHEREAS, on October 1, 1986, a Lease Agreement (the Lease) was entered into
between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control Inc., a
Utah Corporation (Tenant), relating to certain real property situated at 1290
West 2320 South, West Valley City, Salt Lake County, State of Utah, consisting
of approximately 10,000 square feet of office/warehouse/research and development
space as further described in the Lease. ▇▇▇▇▇▇ Alliance, on February 17, 1988,
sold its interest in the subject property to Textron Collective Investment
Trust, hereinafter referred to as Landlord. Motion Control Inc. on December 18,
1987, changed its name to IOMED Inc., hereinafter referred to as Tenant.
WHEREAS, on March 9, 1988, a First Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's Lease of approximately
3,410 square feet of additional and contiguous office/warehouse/research and
development space.
WHEREAS, on May 5, 1989, a Second Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's Lease of approximately
4,107 square feet of additional and contiguous office/warehouse space in
addition to an extension of the base Lease term for one (1) additional year.
WHEREAS, Landlord and Tenant are desirous to further amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of TEN DOLLARS AND
NO CENTS ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. LEASE ARTICLE 5. TENANT'S USE, which is a section of the Lease
Agreement, is hereby revised and rewritten to read in its entirety as follows:
ARTICLE 5. TENANT'S USE. The Tenant may use the premises for conducting
its research, development and manufacturing of artificial limbs and other
medical devices. Tenant shall use the Premises only for lawful and proper
purposes, which are permissible under applicable law (including under applicable
zoning laws). Tenant shall not make any use of the Premises which will cause
cancellation of any insurance policy covering the same and shall not keep or use
on the Premises any article, item, or thing which is prohibited by the terms of
the hazard insurance policy covering the Premises. Tenant shall not commit any
waste upon the Premises and shall not conduct or allow any business, activity or
thing on the Leased Premises which is or becomes unlawful, prohibited, or a
nuisance or which may cause damage to Landlord, to occupants in the vicinity of
the Premises, or to other third parties.
Compliance with Laws. Tenant covenants to Landlord, and Landlord covenants
to Tenant, not to violate any health, building or zoning laws, ordinance, rule
or regulation of any governmental authority pertaining to the Premises, the
Building, or Common Areas, as the case may be.
57
Tenant represents to Landlord that neither Tenant or any affiliates of
Tenant will improperly generate, improperly store or improperly dispose of any
Hazardous Substances (as defined below) at or in the area of the Demised
Premises.
Tenant covenants with Landlord: a) to prohibit any unlawful generation,
unlawful storage or unlawful disposal of Hazardous Substances at the Premises,
b) to deliver promptly to Landlord true and complete copies of all notices
received by Tenant from any governmental authority with respect to the unlawful
generation, unlawful storage or unlawful disposal by Tenant of Hazardous
Substances; and c) to permit entry onto the Premises by Landlord or Landlord's
representative(s) at any reasonable time to verify Tenant's compliance with the
foregoing.
Tenant agrees to indemnify and defend Landlord (with legal counsel
reasonably acceptable to Landlord) from and against any costs, fees or expenses
(including, without limitation, cleanup expenses, third party claims and
environmental impairment expenses and reasonable attorneys' fees and expenses)
incurred by Landlord in connection with Tenant's unlawful generation, unlawful
storage, or unlawful disposal of Hazardous Substances at or near the Demised
Premises in accordance with the foregoing and with Tenant's compliance with the
foregoing representations and covenants. This indemnification by Tenant shall
survive up to five (5) years after termination or expiration of this Lease.
Landlord agrees to not hold Tenant responsible for the consequences of any
unlawful generation, unlawful storage, unlawful disposal, or cleanup or any
Hazardous Substances by any previous Tenants and that all costs, fees, or
expenses (including, without limitation, cleanup expenses, third party claims
and environmental impact expenses and reasonable attorney's fees and expenses)
associated with any previous Tenants Hazardous Substance activities will not be
the responsibility of Tenant.
"Hazardous Substances" shall mean (i) hazardous substances as defined in
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended, (ii) "PCBs", as defined in 40 C.F.R. 761 et seq. and "TCDD" as defined
in 40 C.F.R. 755 et seq. (or in either case analogous regulations promulgated
under the Toxic Substances Control Act, as amended), (iii) "asbestos" as
defined in 29 C.F.R. 1910.1001 et seq. (or analogous regulations promulgated
under the Occupational Safety and Health Act of 1970, as amended), and (iv)
waste oils.
All terms, covenants and provisions of the Lease Agreement, the First
Amendment to Lease Agreement and the Second Amendment to Lease Agreement,
including all Lease attachments, shall remain unchanged and shall continue in
full force and effect except as specifically amended herein.
EXECUTED this day and year first above written.
LANDLORD: ▇▇▇▇▇▇ PROPERTY MANAGEMENT, as Agent for
TEXTRON COLLECTIVE INVESTMENT TRUST,
a Rhode Island Trust
By /s/ ▇.▇. ▇▇▇▇▇▇ III
-----------------------------
▇.▇. ▇▇▇▇▇▇ III - Agent
TENANT: IOMED INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ - President
58
FOURTH AMENDMENT TO LEASE AGREEMENT
This Fourth Amendment to Lease Agreement is made and entered into this 18
day of July, 1989, by and between Textron Collective Investment Trust, a Rhode
Island Trust (Landlord) and IOMED Inc., a Utah Corporation ("Tenant").
WHEREAS, on October 1, 1986, a Lease Agreement (the Lease) was entered into
between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control Inc., a
Utah Corporation (Tenant), relating to certain real property situated at 1290
West 2320 South, West Valley City, Salt Lake County, State of Utah, consisting
of approximately 10,000 square feet of office/warehouse/research and development
space as further described in the Lease. ▇▇▇▇▇▇ Alliance on February 17, 1988,
sold its interest in the subject property to Textron Collective Investment
Trust, hereinafter referred to as Landlord. Motion Control Inc. on December 18,
1987, changed its name to IOMED Inc., hereinafter referred to as Tenant.
WHEREAS, on March 9, 1988 a First Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
3,410 square feet of additional and contiguous office/warehouse/ research and
development space.
WHEREAS, on May 5, 1989, a Second Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
4,107 square feet of additional and contiguous office/warehouse space in
addition to an extension of the primary Lease term for one (1) additional year.
WHEREAS, on July 10, 1989, a Third Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to a revision of Lease
Article 5. Tenant's Use.
WHEREAS, Landlord and Tenant are desirous to further amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of Ten Dollars and
No Cents ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. Landlord shall provide and install, at Landlord's expense, the
improvements in the Demised Premises as shown and described on Exhibit "A" with
an improvement budget of $75,706.80. The rent structured and described below is
based on the improvement budget of $75,706.80, amortized over a twenty-nine (29)
month period commencing September 1, 1989 at eleven and one-half percent (11.5%)
interest rate. In the event the actual cost to improve (plus fifteen percent
(15%) for overhead and profit) is more or less than said budget, the rent shall
again be revised by Amendment to Lease to reflect the actual improvement costs,
plus fifteen percent (15%). The calculation formula for determining the rent
portion attributable to improvement costs shall be as follows:
Actual Improvement Cost + 15% x .▇▇▇▇▇▇▇▇▇▇ (monthly amortized constant at
11.5% interest over a 29 month period) = monthly improvement rent coefficient.
The monthly improvement rent coefficient shall then be added to the
minimum monthly rent specified in the Second Amendment to Lease Agreement
producing the total minimum monthly rental to be paid by Tenant. Landlord shall
use best reasonable efforts to complete said improvements by August 31, 1989.
2. Considering Landlord's amortization of the above described
improvements at the $75,706.80 budget price over the remaining primary Lease
term, ARTICLE 7. Rent. as revised in the Second Amendment to Lease Agreement,
shall be further revised to read in its entirety as follows:
59
Minimum Rent. The Tenant agrees to pay the Landlord, at such address as
shall from time to time be designated by Landlord, as minimum rental during the
initial term and commencing on the first day of the term without right of
offset or deduction, the monthly amount of:
1st Lease Year (01-01-87/12-31-87 - $ 36,660.00/yr
(01-01-87/04-30-87) - $1,550.00/mo (4 months)
(05-01-87/08-31-87) - $3,065.00/mo (4 months)
(09-01-87/12-31-87) - $4,550.00/mo (4 months)
2nd Lease Year (01-01-88/12-31-88 - $ 94,974.72/yr
(01-01-88/04-31-88) - $5,300.00/mo (4 months)
(05-01-88/12-31-88) - $9,221.84/mo (8 months)
3rd Lease Year (01-01-89/12-01-89 - $135,330.71/yr
(01-01-89/05-31-89) - $9,258.16/mo (5 months)
(06-01-89/06-30-89) - $10,800.83/mo (1 month)
(07-01-89/08-31-89) - $11,038.16/mo (2 months)
(09-01-89/12-31-89) - $14,040.69/mo (4 months)
4th Lease Year (01-01-90/12-31-90) - $14,148.57/mo - $169,782.84/yr
5th Lease Year (01-01-91/12-31-91) - $11,786.78/mo - $141,441.36/yr
The minimum rental shall be payable monthly, in advance, without demand on
the first day of each calendar month throughout the Lease term. Should the term
of this Lease commence on any day other than on the first (1st) day of the
calendar month, the monthly rental for such fractional month shall be prorated
accordingly.
Late Penalty. After written notice has been provided to Tenant and the ten
(10) day "cure period" provided in said notice has expired, (as further
clarified in Lease Article 15, such unpaid amounts shall bear interest at a rate
equal to fifteen percent (15%) ("Default Interest Rate") from such date to the
date of payment.
All terms, covenants and provisions for the Lease Agreement and the First,
Second, and Third Amendments to the Lease Agreement, including all exhibits and
attachments, shall remain unchanged and shall continue in full force and effect
except as specifically amended herein.
EXECUTED this day and year first above written.
LANDLORD: ▇▇▇▇▇▇ PROPERTY MANAGEMENT, as Agent for
TEXTRON COLLECTIVE INVESTMENT TRUST,
a Rhode Island Trust
By /s/ ▇. ▇. ▇▇▇▇▇▇ III
---------------------------------------
▇. ▇. ▇▇▇▇▇▇ III
Agent
TENANT: IOMED INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
60
FIFTH AMENDMENT TO LEASE AGREEMENT
This Fifth Amendment to Lease Agreement is made and entered into this 7th
day of February, 1992, by and between Textron Collective Investment Trust, a
Rhode Island Trust (Landlord) and IOMED Inc., a Utah Corporation ("Tenant").
WHEREAS, on October 1, 1986, a Lease Agreement (the Lease) was entered
into between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control)
Inc., a Utah Corporation (Tenant), relating to certain real property situated
at 1290 West 2320 South, West Valley City, Salt Lake County, State of Utah,
consisting of approximately 10,000 square feet of office/warehouse/research and
development space as further described in the Lease. ▇▇▇▇▇▇ Alliance on
February 17, 1988, sold its interest in the subject property to Textron
Collective Investment Trust, hereinafter referred to as Landlord. Motion
Control Inc., on December 18, 1987, changed its name to IOMED Inc., hereinafter
referred to as Tenant.
WHEREAS on March 9, 1988 a First Amemdment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
3,410 square feet of additional and contiguous office/warehouse/research and
development space.
WHEREAS, on May 5, 1989, a Second Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
4,107 square feet of additional and contiguous office/warehouse space in
addition to an extension of the primary Lease term for one (1) additional year.
WHEREAS, on July 10, 1989, a Third Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to a revision of Lease
Article 5. Tenant's Use.
WHEREAS, on July 18, 1989, a Fourth Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to Landlord's amortization of
the cost of additional improvements requested by Tenant and the modification of
rent derived therefrom.
WHEREAS, Landlord and Tenant are desirous to further amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of Ten Dollars and
No Cents ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. Landlord shall provide and install, at Landlord's expense, the
improvements in the Demised Premises as shown and described on Exhibit "A" with
an improvement budget of $113,936.00. The rent structured and described below
is based on the improvement budget of $113,936.00, amortized over a thirty-six
(36) month period commencing January 1, 1992 at ten and one-half percent
(10.5%) interest rate. In the event the actual construction cost to improve
(plus five percent (5%) for construction management fee) is more or less than
said budget, the rent shall again be revised by Amendment to Lease to reflect
the actual improvement costs, plus five percent (5%). The calculation formula
for determining the rent portion attributable to improvement costs shall be as
follows:
Actual Improvement Cost + 5% x .39 (annual amortization constant at 10.5%
interest over a 36 month period) = annual improvement rent coefficient.
2. Considering Tenant's renewal of the Lease for a three (3) year term
(January 1, 1992 through December 31, 1994), as specified in the Second
Amendment to Lease Agreement and considering Landlord's amortization of the
above described improvements at the $113,936.00 budget price over the three (3)
year Lease renewal term, ARTICLE 7. Rent. as revised in the Second Amendment to
Lease Agreement, shall be further revised to read in its entirety as follows:
61
Article 7. Rent
Minimum Rent. The Tenant agrees to pay the Landlord, at such address
as shall from time to time be designated by Landlord, as minimum rental
during the lease renewal term and commencing on the first day of the term
without right of offset or deduction, the monthly amount of:
1/1/92 - 12/31/92 - $153,339.96/year - $12,778.33/month
1/1/93 - 12/31/93 - $156,927.24/year - $13,077.27/month
1/1/94 - 12/31/94 - $160,662.72/year - $13,388.56/month
The minimum rental shall be payable monthly, in advance, without
demand on the first day of each calendar month throughout the Lease term.
Late Penalty. After written notice has been provided to Tenant and the ten
(10) day "cure period" provided in said notice has expired, (as further
clarified in Lease Article 15), such unpaid amounts shall bear interest at
a rate equal to fifteen percent (15%) ("Default Interest Rate") from such
date to the date of payment.
All terms, covenants and provisions of the Lease Agreement and the First,
Second, Third and Fourth Amendments to the Lease Agreement, including all
exhibits and attachments, shall remain unchanged and shall continue in full
force and effect except as specifically amended herein.
EXECUTED this day and year first above written.
LANDLORD: S-PM, Inc., a Utah corporation, as Agent for
TEXTRON COLLECTIVE INVESTMENT TRUST,
a Rhode Island Trust
By /s/ ▇. ▇. ▇▇▇▇▇▇, III
------------------------------------
▇. ▇. ▇▇▇▇▇▇, III
Agent
TENANT: IOMED INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President
62
\ SIXTH AMENDMENT TO LEASE AGREEMENT
This Sixth Amendment to Lease Agreement is made and entered into this 20th
day of July, 1994, by and between Textron Collective Investment Trust, a Rhode
Island Trust (Landlord) and IOMED, Inc., a Utah Corporation ("Tenant").
WHEREAS, on October 1, 1996, a Lease Agreement (the Lease) was entered
into between ▇▇▇▇▇▇ Alliance, a Joint Venture (Landlord) and Motion Control
Inc., a Utah Corporation (Tenant), relating to certain real property situated
at 1290 West 2320 South, West Valley City, Salt Lake County, State of Utah,
consisting of approximately 10,000 square feet of office/warehouse/research and
development space as further described in the Lease. ▇▇▇▇▇▇ Alliance on
February 17, 1988, sold its interest in the subject property to Textron
Collective Investment Trust, hereinafter referred to as Landlord. Motion
Control Inc., on December 18, 1987, changed its name to IOMED Inc., hereinafter
referred to as Tenant.
WHEREAS, on March 9, 1988 a First Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
3,410 square feet of additional and contiguous office/warehouse/research and
development space.
WHEREAS, on May 5, 1989, a Second Amendment to Lease Agreement was entered
into between Landlord and Tenant relating to Tenant's lease of approximately
4,107 square feet of additional and contiguous office/warehouse space in
addition to an extension of the primary Lease term for one (1) additional year.
WHEREAS, on July 10, 1989, a Third Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to a revision of Lease
Article 5. Tenant's Use.
WHEREAS, on July 18, 1989, a Fourth Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to Landlord's amortization of
the cost of additional improvements requested by Tenant and the modification of
rent derived therefrom.
WHEREAS, on February 7, 1992, a Fifth Amendment to Lease Agreement was
entered into between Landlord and Tenant relating to Landlord's amortization of
the cost of additional improvement requirements requested by Tenant and the
modification of rent derived therefrom.
WHEREAS, Landlord and Tenant are desirous to further amend the said Lease.
NOW, THEREFORE, for and in consideration of the payment of Ten Dollars and
No Cents ($10.00) and other good and valuable consideration to Landlord, the
receipt and sufficiency of which is hereby acknowledged, the parties mutually
agree as follows:
1. The term of the Lease shall be extended for three (3) years
commencing January 1, 1995 and expiring December 31, 1997.
2. The rental for the extended Lease term shall be as follows:
01/-1/95 - 12/31/95 $10,025.00/month - $120,300.00/year
01/-1/96 - 12/31/96 $10,376.00/month - $124,512.00/year
01/-1/97 - 12/31/97 $10,739.00/month - $128,868.00/year
Rental shall be payable in equal monthly payments, in advance, without
offset or demand on the first day of each calendar month throughout the
extended Lease term.
1
63
3. Tenant continues to lease the Demised Premises in its present
condition, configuration and state of improvement ("as is").
All terms, covenants and provisions of the Lease Agreement and the First,
Second, Third, Fourth and Fifth Amendments to the Lease Agreement, including
all exhibits and attachments, shall remain unchanged and shall continue in full
force and effect except as specifically amended herein.
EXECUTED this day and year first above written.
LANDLORD: Rhode Island Hospital Trust National Bank, as Trustee for the
TEXTRON COLLECTIVE INVESTMENT TRUST, a Rhode Island Trust
By RREEF America Partners, L.P.,
Its Investment Manager
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Authorized Representative
TENANT: IOMED, Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President & CFO
2
64
EXHIBIT B
[IOMED EAST BUILDING MAP]