Document:

exv10w25

 

Exhibit 10.25

LEASE

     THIS LEASE (this “Lease”) is made and entered into on the 1st day of October, 2005, between
Steve Lewis and Mike Mimms, hereinafter individually and collectively referred to as “Landlord,”
and Professional Veterinary Products, Ltd., a Nebraska corporation, hereinafter referred to as
“Tenant.”

     Section 1. LEASE AND AUTHORITY. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord, the premises located in the Building at 3473 U.S. Highway 60, Hereford, Texas
(the “Premises”) which contain approximately 15,625 rentable square feet. The Premises are to be
used and occupied by Tenant for storing and warehousing of veterinary products. “Building” shall
refer to the building in which the Premises are located. Landlord owns the Building and Premises
and has the right, title and authority to lease the Premises to Tenant.

     Section 2. TERM AND RENTAL. Unless sooner terminated under the provisions hereof,
this Lease shall be and continue in full force for a term of five (5) years, commencing the 1st day
of October, 2005 (the “Commencement Date”) and ending at midnight on September 30, 2010. Tenant
agrees to pay to Landlord for use of the Premises, from and after the Commencement Date, in lawful
money of the United States, a base rental (hereinafter “Base Rent”) as follows:

     a. For the period from the Commencement Date of the Lease Term to the end of the
Twelfth (12th) full month of the Lease Term, the Base Rent shall be Fifty-Four Thousand Six
Hundred Eighty Seven and 60/100 ($54,687.60) payable in equal monthly installments of Four
Thousand Five Hundred Fifty-Seven and 30/100 Dollars ($4,557.30) ($3.50 per square foot).

     b. For the period from the start of the Thirteenth (13th) month of the Lease Term to
the end of the Twenty-Fourth (24th) full month of the Lease Term, the Base Rent shall be
Fifty-Six Thousand Two Hundred Fifty and 00/100 Dollars ($ 56,250.00) payable in equal
monthly installments of Four Thousand Six Hundred Eighty-Seven and 50/100 Dollars
($4,687.50) ($3.60 per square foot).

     c. For the period from the start of the Twenty-Fifth (25th) month of the Lease Term to
the end of the Thirty-Sixth (36th) full month of the Lease Term, the Base Rent shall be
Fifty Seven Thousand Eight Hundred Twelve and 52/100 Dollars ($57,812.52) payable in equal
monthly installments of Four Thousand Eight Hundred Seventeen and 71/100 Dollars ($4,817.71)
($3.70 per square foot).

     d. For the period from the start of the Thirty-Seventh (37th) month of the Lease Term
to the end of the Forty-Eighth (48th) full month of the Lease Term, the Base Rent shall be
Fifty Nine Thousand Three Hundred Seventy-Five and 04/100 Dollars ($59,375.04) payable in
equal monthly installments of Four Thousand Nine Hundred Forty-Seven and 92/100 Dollars
($4,947.92) ($3.80 per square foot).

     e. For the period from the start of the Forty-Ninth (39th) month of the Lease Term to
the end of the Sixtieth (60th) full month of the Lease Term, the Base Rent shall be

 

 

Sixty
Thousand Nine Hundred Thirty-Seven and 56/100 Dollars ($60,937.56) payable in equal monthly
installments of Five Thousand Seventy-Eight and 13/100 Dollars ($5,078.13) ($3.90 per square
foot).

     Section 3. ADDITIONAL RENT. Tenant shall pay to Landlord as additional rent (the
“Additional Rent”), as described and at the times hereinafter set forth, an amount equal to
Tenant’s Share of Operating Expenses.

     On or after January 1 of each calendar year Landlord will notify Tenant of (i) Landlord’s
estimate of the Operating Expenses payable by Tenant for the current calendar year and (ii) the
amount of any Additional Rent due from Tenant on account of the difference, if any, between the
Additional Rent paid by Tenant for the preceding calendar year and the actual Additional Rent for
the preceding calendar year. Tenant shall, upon receipt of such notice, pay to Landlord (i) a sum
equal to one-twelfth (1/12) of the amount of Tenant’s Share of such estimate of the Operating
Expenses for such current calendar year for each full or partial month elapsed from January 1 of
said current calendar year to the date of receipt by Tenant of such notice and (ii) the total
balance of the Additional Rent, if any, due from Tenant for the preceding calendar year. Following
receipt of such notice Tenant shall pay to Landlord, on the first day of each succeeding calendar
month during said current calendar year, one-twelfth (1/12) of the amount of Tenant’s Share of such
estimate of the Operating Expenses for said current calendar year.

     If Landlord’s estimate of Additional Rent is more that the actual Additional Rent for any
calendar year the amount of the excess Additional Rent paid by Tenant shall be credited against the
next installments of Additional Rent and rent as they become due.

     In the event the term of this Lease ends on a day other than the last day of a month, the
amount of Additional Rent payable by Tenant for such partial month shall be prorated on the basis
of a thirty day month. Notwithstanding that the Lease has terminated, the amount of any Additional
Rent due hereunder shall be payable promptly upon receipt of a statement from Landlord, and
conversely any credit due Tenant for any excess Additional Rent paid shall be promptly refunded
after Landlord’s calculation thereof, subject to Landlord’s right to apply any credit due Tenant
against any sums due Landlord hereunder.

     “Operating Expenses” shall be defined as the sum of any and all costs, expenses, and
disbursements of every kind and character which Landlord shall incur, pay, or become obligated to
pay in any calendar year in connection with the ownership, operation and maintenance of the
Building and Premises and all related appurtenances thereto, which shall be limited to the
following: real estate taxes and assessments; insurance premiums; utilities; management of the
Building by Landlord or third parties; materials; security; maintenance and upkeep costs of all
trees, sidewalks and common areas. Landlord, at its option, at any time from time to time, may
perform any of the services and provide any of the supplies included within Operating Expenses at
reasonable rates or charges, or contract for the same from third parties.

     Operating Expenses shall specifically not include any other expenses, including: the
cost of capital improvements (except those made specifically to reduce operating costs); expenses
for repairs, replacements, and general maintenance paid by proceeds from insurance or by Tenant or
other third parties; alterations attributable solely to lessees of the Building other than Tenant;
principal and interest payments made by Landlord on mortgages on the Building; depreciation; or
leasing commissions.

2

 

     “Tenant’s Share” is 100% (15,625 square feet). If the rentable square feet in the Building
increases by reason of addition of rentable space to the Building or by reason of replacement or
amendment of existing leases for space in the Building, Tenant’s Share shall be decreased
accordingly immediately upon occupancy of that space. If the rentable square feet in the Building
decreases by reason of reduction of rentable space to the Building or by reason of replacement or
amendment of existing leases for space in the Building, Tenant’s Share shall be increased
accordingly immediately upon such changes.

     In the event of non-payment of Additional Rent, Landlord shall have all the rights and
remedies as provided Landlord in the case of non-payment of Base Rent.

     Section 4. UTILITIES. Landlord shall provide and pay for water, electricity, gas,
telephone service, cable, and other utilities. Tenant’s share of the utility charges shall be paid
by Tenant as Additional Rent.

     Section 5. TIME OF PAYMENTS AND LATE CHARGES. Base Rent and Additional Rent shall be
due and payable in advance beginning on the first day of each month during the entire term of this
Lease to Landlord at W. Highway 60, P.O. Box 1756, Hereford, Texas, or to any other person or agent
and at any other time or place that Landlord may designate. Tenant shall pay a late fee equal to
five percent (5%) of the total rent then due if the Base Rent or Additional Rent is not received by
Landlord on or before the tenth (10th) day of the month. When a late charge is incurred by the
Tenant, it is then due and payable immediately. The assessing of a late charge shall not restrict
Landlord from the use of any other remedy as herein provided. Not assessing the late charge at any
time shall not constitute a waiver of Landlord’s right to do so in the future.

     Section 6. RENEWAL OPTION. Tenant shall have the option to renew the initial Term of
this Lease for two (2) successive three (3) year terms. Under no circumstances will the Base Rent
increase by more than $.10 per square foot during each three-year renewal term. In order to
exercise its option to renew: (a) Tenant shall have notified Landlord, in writing, of its election
to renew the term at least thirty days (30) prior to the commencement of such renewal term; and (2)
Tenant shall not be then in default (after expiration of any applicable cure periods) under any of
the terms, covenants or conditions of the Lease.

     Section 7. EXPANSION OF BUILDING AND PREMISES. Upon Tenant’s request, Landlord will
increase the size of the Building and will lease the additional space in the Building to Tenant
pursuant to a separate lease agreement. The cost of the construction of the addition to the
Building will be borne solely by Landlord. If Landlord does not agree to increase the size of the
Building within thirty (30) days of the request, Tenant may immediately terminate this Lease with
no further liability hereunder.

     Section 8. CONDITION OF PREMISES. Landlord shall provide the Premises to Tenant in
its “as is” condition. Tenant’s acceptance of possession of the Premises shall be conclusive
evidence that Tenant is satisfied with the physical condition of the Premises.

     Section 9. REPAIRS: Landlord shall maintain the foundations, exterior walls (except
store fronts, plate glass doors and other breakable materials used in structural portions) and

3

 

provide for roof replacement, but not repairs, of the Building and, if necessary or required by the
proper governmental authorities, make modifications or replacements thereof.

     Section 10. SIGNAGE. Tenant may install, at its expense, identification signs on the
Premises providing the installation of such sign(s) has the prior written approval of Landlord.
Upon expiration of the Lease, Tenant will repair any damage caused by the installation of the
signage. All signage must adhere to all city/county ordinances and any historical landmark
designations.

     Section 11. ASSIGNMENT AND SUBLETTING. Tenant will not without the prior written
consent of Landlord, which consent will not be unreasonably withheld, sell, assign, mortgage, deed
in trust or transfer this Lease, in whole or in part, or sublet all or part of the Premises. Any
assignee, transferee or subtenant shall assume and be deemed to have assumed this Lease and shall
be liable jointly and severally with Tenant for the payment of Base Rent and Additional Rent and
for the total performance of all of the terms, covenants, conditions and agreements herein
contained, on Tenant’s part to be performed, for the Term of this Lease.

     Section 12. ENTRY FOR INSPECTION, REPAIRS, AND ALTERATIONS. Upon 24 hours advance
notice, Landlord shall have the right to enter the Premises in order to inspect the Premises, make
necessary or agreed repairs, alterations or improvements, or to supply necessary or agreed
services; provided, however, in the event of any emergency, Landlord may enter the Premises without
notice.

     Section 13. COVENANT OF QUITE ENJOYMENT. Landlord hereby warrants that as long as
Tenant shall pay the Base Rent and the Additional Rent as provided herein, and perform each and
every of the covenants, undertakings and agreements of this Lease to be performed by Tenant, Tenant
shall during the lease term have and enjoy the Premises without hindrance or disturbance of
Landlord, or by any other person or persons acting on behalf of Landlord.

     Section 14. LICENSE AND LAWS. The Tenant shall, at its own cost and expense, obtain
all necessary licenses and/or permits which may be required for the conduct of its business.
Tenant and Landlord shall, at their own cost and expense, observe and comply with all present and
future laws, ordinances, requirements, orders, directions, rules and regulations (referred to
generally as “regulations”) of governmental authorities having or claiming jurisdiction over the
Building, the Premises or the conduct of their businesses.

     Section 15. PERSONAL PROPERTY. Tenant agrees and acknowledges that any personal
property (including vehicles) of Tenant or of any occupant of the Premises kept and/or maintained
in or about the Premises, or the Building, including the parking area, by Tenant or such occupant
shall be at the sole risk of Tenant or such occupant unless such loss or damage is intentionally
caused by Landlord or caused by the negligence of Landlord.

     Section 16. DAMAGE BY FIRE OR OTHER CASUALTY. If, during the term of this Lease, the
Premises shall be so damaged by fire or other casualty as to be rendered wholly or partially
untenantable, rent shall abate while untenantable; provided that if the Premises are rendered only
partially untenantable for Tenant’s purposes and proper conduct of its business as reasonably
determined by Landlord, then the rent shall be abated proportionately according to the portion of
the Premises thus rendered untenantable. In the event of such damage the Landlord shall, within
thirty (30) days after such damage, elect whether to repair the Premises or

4

 

to cancel the Lease,
and shall notify the Tenant in writing of its election. In the event the Landlord elects to repair
the Premises, the repair work shall begin promptly and shall be carried on without unnecessary
delay. In the event Landlord elects not to repair the Premises, the Lease shall be deemed canceled
as of the date of the damage. In the event that the Building is destroyed to the extent of not
less than twenty-five percent (25%) of its replacement cost, Landlord may elect to terminate this
Lease whether the Premises are damaged or not.

     Section 17. INSURANCE COVERAGE. During the term of this Lease, Tenant, at Tenant’s
own cost and expense, shall provide and keep in force comprehensive general liability insurance
against claims for personal injury, death or damage occurring on, in or about the Premises or areas
appurtenant thereto in limits not less than $1,000,000.00 per occurrence for bodily injury and not
less than $500,000.00 per occurrence for property damage, or in such other amounts as Landlord may
from time to time reasonably request. The limits of said insurance shall not limit the liability
of Tenant under this Lease. All insurance coverage shall be subject to Landlord’s approval, which
approval shall not be unreasonably withheld.

     Landlord shall keep in force property insurance and general liability insurance covering the
Premises, and any common areas in the Building.

     Section 18. HOLD HARMLESS.

     a. Tenant shall indemnify and save Landlord harmless from and against all costs,
expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties,
claims and demands of every kind or nature, including reasonable attorneys’ fees, by or on
behalf of any person, party or governmental authority whatsoever arising out of (i) any
failure by Tenant to perform any of its obligations under this Lease or (ii) any accident,
injury or damage which occurs in or about the Premises, however occurring, except those
accidents, injuries or damages occurring as a result of the negligence or intentional acts
of Landlord, its agents or employees.

     b. Landlord shall indemnify and save Tenant harmless from and against all costs,
expenses, liabilities, losses, damages, injunctions, suits, actions, fines, penalties,
claims and demands of every kind or nature, including reasonable attorneys’ fees, by or on
behalf of any person, party or governmental authority whatsoever arising out of (i) injuries
occurring in the common areas or any other portion of the Building outside the Premises;
(ii) any intentional act, or negligence of Landlord or Landlord’s agents, employees, or
independent contractors; or (iii) any breach or default in the performance of any obligation
on Landlord’s part to be performed under this Lease.

     Section 19. SURRENDER — HOLDING OVER: Tenant shall, upon termination of this Lease,
whether by lapse of time or otherwise, peaceably and promptly surrender the Premises to Landlord.
If Tenant remains in possession after the termination of this Lease, without a written lease duly
executed by the parties, Tenant shall be deemed a trespasser. If Tenant pays, and Landlord
accepts, rent for a period after termination of this Lease, Tenant shall be deemed to be occupying
the Premises only as a tenant from month to month, subject to all the terms, conditions, and
agreements of this Lease, except that the rent shall be one hundred fifty percent (150%) of the
monthly rent specified in the lease immediately before termination.

5

 

     Section 20. EFFECT OF CONVEYANCE OR ASSIGNMENT BY LANDLORD. This lease shall be
fully assignable by Landlord or its assigns. If Landlord, or any successor Landlord, shall convey,
assign or transfer this Lease to any party, joint venture or entity whatsoever, and such party
assumes the Landlord’s obligations under the Lease, Tenant shall look to the purchaser, assignee or
transferee of Landlord’s or any successor Landlord’s interest in this Lease for the performance of
Landlord’s obligations hereunder, and Landlord or any successor Landlord shall from and after such
conveyance, assignment or transfer be relieved and discharged from any and all liabilities and
obligations under this Lease. Tenant agrees to and does hereby attorn to any such purchaser,
assignee or transferee and agrees to execute any written attornment agreement reasonably requested
by such purchaser, assignee or transferee.

     Section 21. DEFAULT OR BREACH: Each of the following events shall constitute a
default or a breach of this Lease by Tenant:

     a. If Tenant fails to pay Landlord any rent or other payments when due hereunder;

     b. If Tenant vacates or abandons the Premises;

     c. If Tenant files a petition in bankruptcy or insolvency or for reorganization under
any bankruptcy act, or voluntarily takes advantage of any such act by answer or otherwise,
or makes an assignment for the benefit of creditors;

     d. If involuntary proceedings under any bankruptcy or insolvency act shall be
instituted against Tenant, or if a receiver or trustee shall be appointed of all or
substantially all of the property of Tenant, and such proceedings shall not be dismissed or
the receivership or trusteeship vacated within thirty (30) days after the institution or
appointment; or

     e. If Tenant fails to perform or comply with any other term or condition of this Lease,
or any of the rules and regulations established by Landlord, and if such nonperformance
shall continue for a period of ten (10) days after notice thereof by Landlord to
Tenant, time being of the essence.

     Section 22. EFFECT OF DEFAULT: In the event of any default or breach hereunder, in
addition to any other right or remedy available to Landlord, either at law or in equity, Landlord
may exert any one or more of the following rights:

     a. Landlord may re-enter the Premises immediately and remove the property and personnel
of Tenant, and shall have the right, but not the obligation, to store such property in a
public warehouse or at a place selected by Landlord, at the risk and expense of Tenant.

     b. Landlord may retake the Premises and may terminate this Lease by giving written
notice of termination to Tenant. Without such notice, Landlord’s retaking will not
terminate the Lease. On termination, Landlord may recover from Tenant all damages
proximately resulting from the breach, including the cost of recovering the Premises and the
difference between the rent due for the balance of the Lease term as though the Lease had
not been terminated and the fair market rental value of the

6

 

Premises for the balance of the
Lease term as though the Lease had not been terminated which sum shall be immediately due
Landlord from Tenant.

     c. Landlord may re-let the Premises or any part thereof for any term without
terminating this Lease, at such rent and on such terms as it may, choose. Landlord may make
alterations and repairs to the Premises. In addition to Tenant’s liability to Landlord for
breach of this Lease, Tenant shall be liable for all expenses of the re-letting, for any
alterations and repairs made, and for the rent due for the balance of the Lease term, which
sum shall be immediately due Landlord from Tenant. The amount due Landlord will be reduced
by the net rent received by Landlord during the remaining term of this Lease from re-letting
the Premises or any part thereof. If during the remaining term of this Lease Landlord
receives more than the amount due Landlord under this sub-paragraph, the Landlord shall pay
such excess to Tenant, but only to the extent Tenant has actually made payment pursuant to
this sub-paragraph.

     Section 23. PROOF OF CLAIM. Nothing in this Agreement shall limit or prejudice
the right of Landlord to prove and obtain as liquidated damages in any bankruptcy, insolvency,
receivership, reorganization or dissolution proceeding an amount equal to the maximum allowed by
any statute or rule of law governing such proceeding, whether or not such amount is greater, equal
to or less than the amount of damages referred to in any of the preceding sections.

     Section 24. CONDEMNATION. If the whole or any part of the Premises shall be taken by
public authority under the power of eminent domain, then the term of this Lease shall cease on that
portion of the Premises so taken, from the date of possession, and the rent shall be paid to that
date, with a proportionate refund by Landlord to Tenant of such rent as may have been paid by
Tenant in advance. If the portion of the Premises taken is such that it prevents the practical use
of the Premises for Tenant’s purposes, then Tenant shall have the right either (a) to terminate
this Lease by giving written notice of such termination to Landlord not later than thirty (30) days
after the taking, or (b) to continue in possession of the remainder of the Premises, except that
the rent shall be reduced in proportion to the area of the Premises taken. In the event of any
taking or condemnation of the Premises, in whole or in part, the entire resulting award of damages
shall be the exclusive property of Landlord, including all damages awarded as compensation for
diminution in value to the leasehold, without any deduction for the value of any unexpired term of
this Lease, or for any other estate or interest in the Premises now or hereafter vested in Tenant.

     Section 25. SUBORDINATION AND ATTORNMENT: Landlord reserves the right to place liens
and encumbrances on the Premises superior in lien and effect to this Lease. This Lease, and all
rights of Tenant hereunder, shall, at the option of Landlord, be subject and subordinate to any
liens and encumbrances now or hereafter imposed by Landlord upon the Premises or the Real Estate or
any part thereof, and Tenant agrees to execute, acknowledge, and deliver to Landlord, upon request,
any and all instruments that may be necessary or proper to subordinate this Lease and all rights
herein to any such lien or encumbrance as may be required by Landlord.

     In the event any proceedings are brought for the foreclosure of any mortgage on the Premises,
Tenant will attorn to the purchaser at the foreclosure sale and recognize such purchaser as the
Landlord under this Lease. The purchaser, by virtue of such foreclosure, shall be deemed to have
assumed, as substitute Landlord, the terms and conditions of this Lease

7

 

until the resale or other
disposition of its interest. Such assumption, however, shall not be deemed an acknowledgment by
the purchaser of the validity of any then existing claims of Tenant against the prior Landlord.

Tenant agrees to execute and deliver such further assurances and other documents, including a new
lease upon the same terms and conditions contained herein, confirming the foregoing, as such
purchaser may reasonably request. Tenant waives any right of election to terminate this Lease
because of any such foreclosure proceedings.

     Section 26. NOTICES. All bills, statements, notices, demands and requests (referred
to in this Lease as “notices”) hereunder by either party to the other shall be in writing and shall
be deemed given (if orderly delivery of the mail is not then disrupted or threatened) when
deposited, registered or certified, postage prepaid, in the United States Mail or by Federal
Express or similar nationwide air courier providing verification of delivery, addressed to the
respective parties at its address set forth below, or at such different address as it shall have
theretofore advised the other party in writing:

	 	 	 	 
	 	Landlord:

	 	Steve Lewis and Mike Mimms
	 	 

	 	W Highway 60
	 	 

	 	P.O. Box 1756
	 	 

	 	Hereford, Texas 79045
	 	 
	 	 
	 	Tenant:

	 	Professional Veterinary Products, Ltd.
	 	 

	 	10077 S. 134th Street
	 	 

	 	Omaha, Nebraska 68138

     Tenant shall furnish a copy of all notices given to Landlord to the holder of any mortgage on
the Land or Building or any interest therein, upon written request from such holder giving the
address to which such copies are to be sent. Landlord and each such holder shall also each have
the right to have an additional copy of notices sent to such persons and addresses as either such
party may designate by written notice to Tenant.

     Section 27. ESTOPPEL CERTIFICATE. Landlord or Tenant shall, at any time and from
time to time, upon not less than ten (10) days prior notice from the other party hereto, execute
and deliver to such other party a statement in writing certifying that this Lease is unmodified and
in full force and effect (or if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), and the dates to which the Base Rent and
Additional Rent have been paid, and stating whether or not to the best knowledge of the signer of
such certificate the other party is in default in the performance of any covenant, agreement, term,
provision or condition contained in this Lease, and if so, specifying each such default of which
the signer may have knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by any prospective purchaser or lessee of the Building, or any interest therein,
Landlord’s or Tenant’s interest hereunder, or by any lender or prospective lender of either party.
Tenant shall also execute and deliver from time to time such other similar certificates as may be
reasonably required by an institutional lender having an interest in this Lease.

     Section 28. SUCCESSORS AND ASSIGNS. Each provision hereof shall extend to and shall,
as the case may require, bind and inure to the benefit of Landlord and Tenant and their respective
heirs, legal representatives, successors and assigns, provided that this Lease shall not

8

 

inure to
the benefit of any assignee, heir, legal representative, transferee or successor of any Tenant
except as provided in this Lease.

     Section 29. ENTIRE AGREEMENT; CAPTIONS; SEVERABILITY. This Lease shall be governed
by the laws of the State of Nebraska. Any action arising out of this Lease Agreement or the
tenancy contemplated by this Lease Agreement shall be filed and tried in a court of appropriate
jurisdiction in the State of Nebraska. This Lease contains the entire agreement between the
parties, and any executory agreement simultaneously or hereafter made shall be ineffective to
amend, modify, or terminate it in whole or in part unless such executory agreement is in writing
and signed by the party against whom enforcement of the amendment, modification, or termination is
sought.

     The captions in this Lease are inserted only as a matter of convenience and for reference and
no way define, limit or describe the scope of this Lease nor the intent of any provision thereof.

     Each and every covenant of this Lease is distinct and severable and if any provision of this
Lease is held invalid by a court of competent jurisdiction or other governmental authority the same
shall be stricken herefrom without affecting the validity of this Lease.

     Section 30. MEMORANDUM FOR RECORDING. Tenant may, at Tenant’s cost, record a Notice
of Lease in the public records without Landlord’s prior consent. Landlord agrees to execute the
Notice of Lease upon Tenant’s request, so long as such Notice of Lease does not vary from the terms
of this Lease.

     Section 31. HAZARDOUS WASTE. Landlord represents that to the best of Landlord’s
knowledge and belief, the Building does not contain any Hazardous Materials. For purposes of this
Lease, “Hazardous Materials” means asbestos or any waste, substance or material containing
asbestos, and any hazardous, toxic or dangerous waste, substance or material containing asbestos,
and any hazardous, toxic or dangerous waste, substance or material subject to regulation under the
Comprehensive Environmental Response, Compensation, and Liability Act or any other Environmental
Law.

     Section 32. DISCLAIMER OF WARRANTIES. Landlord expressly disclaims any warranties,
either express of implied, and Tenant acknowledges that neither Landlord nor its agents have made
any representations or promises with respect to the Premises except as expressly set forth in this
Lease. No rights, easements or licenses are acquired by Tenant by implication or otherwise except
as expressly set forth herein. The taking of possession of the Premises by Tenant shall be
conclusive evidence that the Tenant has found the Premises to be in satisfactory condition.

     Section 33. ADDITIONAL INSTRUMENTS. Tenant agrees to execute and deliver any
instruments in writing necessary to carry out any agreement, term, condition, or assurance in this
Lease whenever occasion shall arise and reasonable request for such instrument(s) shall be made by
Landlord.

     Section 34. WAIVER. A waiver by Landlord of a breach of any covenant or duty of
Tenant under this Lease is not a waiver of a breach of any other covenant or duty of Tenant, or of
any subsequent breach of the same covenant or duty.

9

 

     Section 35. MISCELLANEOUS. The submission of this Lease for examination by Tenant
does not constitute a reservation of or option for the Premises, and this Lease shall become
effective only upon execution and delivery thereof by Landlord and Tenant. All Exhibits referred
to herein and attached hereto are hereby made a part hereof. All covenants and agreements of
Tenant and Landlord hereunder shall be deemed to be covenant running with the land, and each such
covenants and agreement shall be deemed to be and shall be construed as a separate and independent
covenant of the party bound by or making the same and shall not be dependent on any other provision
of this Lease except as specifically provided for herein.

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date and year first
above written.

	 	 	 	 	 
	Signed and Acknowledged
in the presence of:

	 	STEVE LEWIS AND MIKE MIMMS
	 
	 	 	 	 
	/s/ [Signature Illegible]

	 	By:
	 	/s/ [Signature Illegible]
	 

	 	 	 	 
	Witness

	 	 	 	/s/ [Signature Illegible]
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	PROFESSIONAL VETERINARY PRODUCTS, LTD.
	 
	 	 	 	 
	/s/ Neal B. Soderquist

	 	By:
	 	/s/ Dr. Lionel L. Reilly
	 

	 	 	 	 
	Witness

	 	 	 	Dr. Lionel Reilly, President

10exv10w26

 

Exhibit 10.26

LEASE AGREEMENT

     This
Lease Agreement (“Agreement”) is entered into and effective as of the 8th day of
November, 2005, by and between Professional Veterinary Products Ltd., a Nebraska corporation with
its principal place of business at 10077 South 134th Street, Sarpy County, Omaha,
Nebraska, 68138 (“PVP”), and Independent Veterinary Group LLC, a Kentucky limited liability company
(“IVG”), with its principal place of business at 324 Henry Street, Fayette County, Lexington, KY
40508.

     1. Premises. IVG hereby leases to PVP, and PVP hereby leases from IVG, for the
“Term” (as defined herein), at the rental and upon all of the conditions set forth herein, certain
real property located in Fayette County, Kentucky, as more particularly described on Exhibit
A attached hereto and made a part hereof (“Leased Premises”).

     2. Use of Premises. PVP may use the Leased Premises for any lawful purpose. PVP
will not use or permit the use of the Leased Premises for any use or purpose in violation of any
laws, ordinances or regulations, and PVP generally will in all respects and at all times fully
comply with all applicable health, fire, and police regulations, and shall not permit the Leased
Premises to be used in such a manner to constitute a nuisance.

     3. Term. The term of this Lease shall be for a period of seventeen months,
commencing on November 1st, 2005 (“Commencement Date”), and ending (unless sooner
terminated pursuant to the provisions of this Lease) on March 31, 2007 (the “Term”).

     4. Rental. During the Term, PVP shall pay rental (“Rent”) to IVG in seventeen (17)
regular monthly installments of three thousand six hundred fourteen and 00/100 beginning on
November 1, 2005 ($3,614.00). The Rent shall be due and payable to IVG on the 1st day of each and
every calendar month during the Term, provided that the first installment of Rent shall be due and
payable to IVG upon execution of this agreement. PVP shall pay the Rent to IVG at the address
specified herein or to such other persons or at such other places as IVG may designate in writing.

     5. Improvement of the Leased Premises. Subject to the approval of IVG, PVP shall
have the right to make such nonstructural modifications, improvements and/or alterations to the
Leased Premises including, without limitation, such modifications, improvements and/or alterations
as may be necessary to accommodate PVP’s intended use of the Leased Premises. PVP agrees to hold
IVG harmless from claims for mechanics, materialmen or other liens arising in connection with any
such modification, improvements and alterations made to the Leased Premises, and PVP will, if
required by IVG, furnish waivers in connection with the making of alterations, additions or
improvements to the Leased Premises. PVP shall not commit waste, or allow or permit waste to be
committed on the Leased Premises. PVP shall surrender the Leased Premises at the termination of
this Lease in good condition, reasonable wear and tear excepted.

     6. Insurance.

          6.1 Fire and Hazard Insurance. IVG warrants and represents to PVP that a policy or policies
of insurance covering loss or damage to the Leased Premises and the building(s) thereon in the
amount of the full replacement value thereof, providing protection against all

Page 1 of 7

 

In the event IVG fails to maintain the Leased Premises as
provided in this Section 9, PVP shall send written notice of such failure to IVG. Ten (10) days
after sending such notice to IVG, PVP may perform or cause to be performed the maintenance, repairs
or replacements that IVG failed to perform, and perils included
within the classifications of fire, extended coverage, vandalism, malicious mischief and special
extended perils (all risks), and hazard insurance under a standard fire and extended coverage
endorsement, shall be kept in force at all times during the Term of this Lease which insurance
shall name PVP as an additional insured, as its interest may appear. IVG shall cause certificates
evidencing the existence of such insurance policies to be delivered to PVP prior to the
Commencement Date of this Lease.

          6.2 Liability Insurance. PVP shall, at its sole cost and expense, obtain and keep in force at
all times during the Term of this Lease, an insurance policy or policies of comprehensive public
liability insurance insuring IVG and PVP against all liability arising out of the use or occupancy
of the Leased Premises and the building located thereon, in the amount of at least $1,000,000.

          6.3 Personal Property Insurance. All personal property placed in or on the Leased Premises by
PVP shall be at the risk of PVP. PVP shall, at its sole cost and expense, obtain and keep in force
at all time during the Term of this Lease a policy or policies of insurance covering loss or damage
to PVP’s personal property and fixtures located in or on the Leased Premises, providing protection
against all perils included within the classifications of fire, extended coverage, vandalism,
malicious mischief and special extended perils (all risks).

          6.4 Waiver of Subrogation. IVG and PVP each hereby waives any and all rights of recovery
against the other, or against the directors, officers, employees, agents and representatives of the
other, for loss or damage to such waiving party or its property or the property of others under its
control, to the extent such damage or destruction is insured against under any insurance policies
in force at the time of such loss or damage. IVG and PVP agree to cause their insurance policies
with respect to the Leased Premises and property contained therein to be endorsed to permit the
foregoing waiver of subrogation.

     7. Utility Charges. PVP shall pay all utility charges which may be levied, accessed
or imposed upon or against the Leased Premises, including, but not limited to, all charges for
heating, electricity, air conditioning, telephone, water, sewer and trash removal services.

     8. Property Taxes. PVP shall be responsible for the payment of all taxes, if any,
assessed and levied upon its business operations conducted at the Leased Premises and upon all
trade fixtures, furnishings, equipment and other personal property of PVP contained in or on the
Leased Premises.

     9. Maintenance of Leased Premises. IVG shall be solely responsible, at its sole cost
and expense, for the repair and maintenance of the interior and exterior of the Leased Premises
including, without limitation, the repair, maintenance and/or replacement of all structural
elements, HVAC units, duct work, electrical systems, plumbing and all other mechanical systems.
IVG shall indemnify and hold PVP harmless from all claims, losses, damages and expenses, including,
without limitation, reasonable attorneys’ fees, arising out of IVG’s failure to maintain the Leased
Premises in accordance with this Lease. PVP shall be responsible for
any structural, physical or other damage that occurs for the premises
or any of its operating systems which are caused by PVP’s
activities or the activities of its employees, agents, or business
invitees who are not Members of the Kentucky Independent Veterinary
Group. PVP

Page 2 of 7

 

agrees to
repair any such damage, restoring the premises or any operating
system damaged as defined by this paragraph to the condition existing
at the time the damage occurred. In the event IVG fails to maintain
the Leased Premises as provided in this Section 9, PVP shall
send written notice of such failure to IVG. Ten (10) days after
sending such notice to IVG, if IVG has refused in writing to make
such repairs, PVP may perform or cause to be performed the
maintenance, repairs or replacements that IVG failed to perform, and
IVG shall be liable for the total cost of any such
maintenance, repairs or replacements; provided that PVP will request and
provide IVG with at least two good faith, arms length estimates of the
cost of making such repair or replacements or providing such
maintenance. PVP may, in its discretion, deduct the costs and expenses
incurred by PVP only from the Rent otherwise due to IVG hereunder.

     10. Damage or Destruction. If, during the Term, the Leased Premises shall be totally
damaged by fire, the elements, casualty, war, insurrection, riot, public disorder or any other
cause so as to be totally destroyed, then this Lease shall be deemed terminated as of the date of
such occurrence, and the Rent due hereunder shall be prorated through the date of such termination,
with any Rent paid in advance refunded to PVP. If, during the Term, the Leased Premises shall be
partially damaged by any cause as described in the foregoing sentence, IVG shall restore the Leased
Premises to the extent of insurance proceeds actually received by IVG, provided that the Rent due
hereunder during such period of restoration shall be reduced to such extent as may be fair and
equitable under all of the circumstances.

     11. Condemnation.

          11.1 Total Taking. If the whole or any substantial part of the Leased Premises or access
thereto should be taken for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, this Lease shall terminate and the Rent and other sums
due hereunder shall be abated during the unexpired portion of this Lease, effective when the
physical taking of the Leased Premises shall occur.

          11.2 Partial Taking. If less than a substantial part of the Leased Premises or access thereto
shall be taken for any public or quasi-public use under governmental law, ordinance or regulation,
or by right of eminent domain, this Lease shall not terminate, but the Rent and others sums due
hereunder during the unexpired Term of this Lease shall be reduced to such extent as may be fair
and equitable under all of the circumstances.

          11.3 Condemnation Awards. In the event of any taking, IVG and PVP shall each be entitled to
receive and retain such separate awards and portion of lump sum awards as may be allocated to their
respective interests by the court in any condemnation proceedings.

     12. Indemnification. IVG shall indemnify and hold PVP harmless from and against all
costs, expenses, losses and damages of any kind or nature, including attorneys’ fees, which PVP may
incur because of any breach of any of the representations and warranties and covenants of IVG
herein contained. IVG will indemnify PVP and save it harmless from and against any and all claims,
actions, damages, liability and expenses (including attorney fees) in connection with the loss of
life, personal injury or damage to property arising from or out of any occurrence in, upon or at
the Leased Premises, or the occupancy or use of the Leased Premises
or any part

Page 3 of 7

 

thereof where
occasioned wholly or in part by any act or omission of IVG, its agents, contractors, employees,
servants, or concessionaires.

     13. Default. In the event that a “Default” (as hereinafter defined) shall occur,
then IVG shall have the right immediately to terminate this Lease and shall have the immediate
right of re-entry and repossession of the Leased Premises without any obligation to compensate PVP
in any manner therefor. “Default” is defined as (i) the failure by PVP to make any payment of Rent
or other payments required hereunder within 15 days following
PVP’s receipt of written notice
thereof from IVG; or (ii) the failure by PVP to observe or perform any of the covenants, conditions
or provisions of this Lease to be observed or performed by PVP, and the continuance of such failure
without curing the same for a period of 30 days after receipt by PVP of written notice thereof from
IVG, which notice shall specify in detail the nature of such failure.

     14. Miscellaneous.

          14.1 Notices. All notices, requests, consents, demands and other communications required or
permitted to be given or made under this Lease shall be in writing and shall be deemed to have been
duly given (a) on the date of personal delivery or (b) on the date of deposit in the United States
Mail, postage prepaid, by registered mail, return receipt requested, or (c) on the date of
transmission by telegram, cable, telex or telephonic facsimile transmission, or (d) on the date of
delivery to a nationally recognized overnight courier service, in each case, addressed as follows
or to such other person or address as either party shall designate by notice to the other parties
in accordance herewith:

	 	 	 	 	 
	 

	 	If to IVG:
	 	IVG LLC
	 

	 	 	 	Attn: William V. Woodson III
	 

	 	 	 	324 Henry Street
	 

	 	 	 	Lexington, KY 40508
	 
	 	 	 	 
	 

	 	If to PVP:
	 	Professional Veterinary Products LLC
	 

	 	 	 	Attn: Steve Price
	 

	 	 	 	10077 South 134th Street
	 

	 	 	 	Omaha, NE 68138

          14.2 Entire Agreement. This Lease constitutes the entire agreement of the parties hereto
pertaining to its subject matter, and supersedes all prior or contemporaneous agreements,
undertakings and understandings of the parties in connection with the subject matter hereof.

          14.3 Commissions. Each of the parties hereto hereby represents and warrants to the other that
there are no real estate commissions or brokers’ fees due in connection with the transactions
contemplated hereby, and each of them agrees to indemnify and hold the other harmless for any
damage or loss suffered as a result of a breach of this warranty by either party.

          14.4 Risk of Loss. All risks of loss of any kind with respect to the Leased Premises,
including, but not limited to, damage or destruction of the Leased Premises and condemnation of the
Leased Premises, shall remain upon IVG until the Closing.

Page 4 of 7

 

          14.5 Binding Effect. This Lease shall run to the benefit of, and be binding upon, IVG and PVP
and their respective successors and assigns.

          14.6 Headings. Descriptive headings herein are for convenience only and shall not control or
affect the meaning or construction of any provision of this Lease.

          14.7 Time of Essence. Time shall be of the essence with respect to the performance of all
obligations of IVG and PVP hereunder.

          14.8 Governing Law. This Lease is being delivered in the Commonwealth of Kentucky and shall
be construed, interpreted and enforced in accordance with the laws of such State.

          14.9 Waiver. The waiver by any party hereto of a single breach of any covenant,
representation, or warranty herein contained shall not be deemed a continuing waiver of such breach
nor a waiver of any breach of any other covenant, representation, or warranty herein contained; but
to the contrary, demand may be made at any time for the cure of any such breach.

     15. Attorney Fees. If IVG and PVP shall default with respect to any of their
respective obligations hereunder and there is litigation with respect to any such default, the
non-prevailing party shall pay the court costs and a reasonable attorney’s fee of the prevailing
party.

     16. Subordination. IVG agrees that it will, upon written demand by PVP, execute such
documents as may be required at any time and from time to time to subordinate the rights and
interest of IVG in this Lease to the lien of any mortgage, mortgages, trust deed or trust deeds
pertaining to the leasehold estate of PVP created hereby.

     17. Recording. Either party shall, upon request of the other, execute, acknowledge
and deliver to the other a “short form” memorandum of this Lease for recording purposes.

     18. Signs. IVG, upon request, agrees to fully cooperate in any proceeding and to
execute any necessary consents or applications in respect thereto which may be required by law to
permit the erection of PVP’s signs on the Leased Premises.

     19. Quiet Enjoyment. Upon payment by PVP of the Rent herein provided and upon the
observance and performance of all the covenants, terms and conditions upon PVP’s part to be
observed and performed, PVP shall peaceably and quietly hold and enjoy the Leased Premises for the
Term without hindrance or interruption by IVG or any other person or persons lawfully or equitably
claiming by, through or under IVG, subject to the terms and conditions of this Lease.

Page 5 of 7

 

     In Witness Whereof, the parties have entered into this Agreement as of the date first
written above.

	 	 	 	 	 
	 	Professional Veterinary Products Ltd

 	 
	 	 	 	 
	 	By:  	/s/ Dr. Lionel L. Reilly
 	 
	 	 	 	 
	 	 	 
	 	Title:  	President
 	 
	 	 	 	 
	 	 	 
	 	Date:  	November 08,
2005
 	 
	 	 	 	 
	 	 	 	 
	 
	 	Independent Veterinary Group LLC

 	 
	 	 	 	 
	 	By:  	/s/ William V. Woodson III 	 
	 	 	 	 
	 	 	 
	 	Title:  	Member
 	 
	 	 	 	 
	 	 	 
	 	Date:  	November 7,
2005
 	 
	 	 	 	 
	 	 	 	 

Page 6 of 7

 

	 	 	 	 	 

Exhibit A

     The Leased Premises includes the real property at 324 Henry Street, Lexington, Kentucky,
40508, which is outlined on the attached drawing. (A copy of the legal description of Leased
Premises is available for review at IVG’s offices and will be incorporated into this Exhibit A upon
PVPL’s request.)

     For purposes of this Lease Agreement, and specifically Section 6.2, the insurance which PVPL
is required to keep in force shall only cover the Leased Premises – PVPL specifically shall not be
required to provide insurance coverage for any additional real estate, including but not limited to
any part of the building which contains the Leased Premises which is not leased to PVPL.

[Drawing]

Page 7 of 7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]