EXHIBIT 10.5
FIRST AMENDMENT TO LEASE BETWEEN
SCIENCE PARK DEVELOPMENT CORPORATION
and
GENAISSANCE PHARMACEUTICALS, INC.
Date: December 1, 1999
This First Amendment to Lease (this "FIRST AMENDMENT") is made and
entered into as of the 1st day of December, 1999 by and between SCIENCE PARK
DEVELOPMENT CORPORATION, a Connecticut corporation having a principal place of
business at 00 Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxxx 00000 (herein referred to as
"LANDLORD") and GENAISSANCE PHARMACEUTICALS, INC., a Delaware corporation having
a principal place of business at Xxxx Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxxx 00000
(herein referred to as "TENANT").
WHEREAS, Landlord and Tenant are parties to a certain Lease dated as of
September 15, 1998 (the "LEASE"), pursuant to which Tenant leases from Landlord
certain space in the building known as Building 5 North in Science Park, New
Haven, Connecticut;
WHEREAS, Landlord desires to lease to Tenant and Tenant desires to
lease from Landlord certain space on the first floor of Building 5 North, which
space consists of approximately 7,953 rentable square feet as shown on the floor
plan attached hereto as EXHIBIT A-1 and certain mechanical space on the third
floor of Building 5 North, which space consists of approximately 156 rentable
square feet as shown on the floor plan attached hereto as EXHIBIT A-2 (herein
collectively referred to as the "FIRST AMENDMENT SPACE"), upon and subject to
the terms, covenants and conditions contained in the Lease as modified by this
First Amendment; and
WHEREAS, Landlord and Tenant desire to amend the Lease in certain
respects;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each of the parties, Landlord and Tenant
hereby agree as follows (capitalized terms used herein which are not otherwise
defined herein shall have the meaning given to such terms in the Lease):
1. PREPARATION OF FIRST AMENDMENT SPACE. Landlord, at its expense, shall
(i) obtain required demolition permits and selectively demolish and
remove tenant improvements from the First Amendment Space, (ii) cause
to be removed from the First Amendment Space all asbestos, which
removal shall be performed in compliance with all applicable
Environmental Laws and Title 19a ("Public Health and Well-Being") of
the Connecticut General Statutes, including but not limited to Sections
19c-332 through 332e, concerning asbestos, and any regulations
promulgated thereunder, (iii) cause to be removed from the First
Amendment Space all lead-based paint, which removal shall be performed
in compliance with applicable laws, such that as a result of the
removal no occupants of Building Five North shall be exposed to
airborne lead at levels over the action level, as defined in 29 CFR
Section 1910.1025, and (iv) otherwise prepare the First Amendment Space
for delivery of same to Tenant in a vacant, broom clean condition, free
of all furnishings, equipment, litter and debris. Landlord agrees to
use its best efforts to deliver exclusive possession of the First
Amendment Space to Tenant in the condition specified in the immediately
preceding sentence by December 15, 1999.
2. LANDLORD'S NOTICE. Promptly after the conditions of Subsections 1(i)
-(iv) have been satisfied, Landlord will deliver written notice thereof
to Tenant ("LANDLORD'S NOTICE") .
3. FIRST AMENDMENT SPACE LEASE COMMENCEMENT DATE. Landlord hereby agrees
to lease to Tenant and Tenant hereby agrees to lease from Landlord the
First Amendment Space, upon and subject to the terms of the Lease, as
modified by this First Amendment. Landlord shall deliver, and Tenant
shall accept, exclusive possession of the First Amendment Space on the
date Tenant receives Landlord's Notice, which date shall be deemed to
be the Lease Commencement Date with respect to the First Amendment
Space (the "FIRST AMENDMENT SPACE LEASE COMMENCEMENT DATE").
4. FIRST AMENDMENT SPACE. Commencing on the First Amendment Space Lease
Commencement Date, the Leased Premises shall be deemed to include the
First Amendment Space for all purposes under the Lease, and the terms,
covenants and conditions of the Lease, as modified by this First
Amendment, shall govern the rights, obligations and liabilities of
Landlord and Tenant with respect to the First Amendment Space. The
Leased Premises, as described in Section 1.1(a) of the Lease and as
shown on Exhibits A-1 and A-2 of the Lease, are sometimes referred to
in this First Amendment as the "ORIGINAL LEASED PREMISES".
5. CONFIRMATION OF TERM & EXTENSIONS. Landlord and Tenant hereby agree
that the Rent Commencement Date with respect to the Original Leased
Premises was March 1, 1999 and the Expiration Date of the initial
5-year Term of the Lease with respect to the entire Leased Premises,
including the Original Leased Premises and the First Amendment Space,
is February 28, 2004. The two 5-year Extension Options granted in
Section 2.2 of the Lease shall apply to the entire Leased Premises,
including the Original Leased Premises and the First Amendment Space.
Tenant may not exercise an Extension Option with respect to less than
the entire Leased Premises.
6. FIRST AMENDMENT SPACE RENT COMMENCEMENT DATE. Subject to extensions
pursuant to Sections 2.3B. and 2.3C. of the Lease, the Rent
Commencement Date with respect to the First Amendment Space (the "FIRST
AMENDMENT SPACE RENT COMMENCEMENT DATE") shall mean the earlier of: (i)
the date of the issuance of a temporary or permanent certificate of
occupancy for the First Amendment Space, or (ii) five (5) months after
the date of Tenant's receipt of Landlord's Notice. In interpreting the
provisions of Sections 2.3B and 2.3C of the Lease to this Amendment,
the term, "Interior Work" as used therein shall mean, "Interior Work"
as defined herein, and the term, "Rent Commencement Date" as used
therein shall mean, "First Amendment Space Rent Commencement Date" as
defined herein. At the request of either Landlord or Tenant, Landlord
and Tenant shall execute and deliver to each other a writing confirming
the First Amendment Space Lease Commencement Date and the First
Amendment Space Rent Commencement Date.
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7. RENT.
(a) In accordance with the provisions of this First Amendment,
Tenant shall pay to Landlord base rent for the First Amendment Space
commencing on the First Amendment Space Rent Commencement Date and
thereafter as follows:
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LEASE YEAR BASE RENT/RSF MONTHLY RENT ANNUAL RENT
--------------------------------------------------------------------------------
1 3/1/99 - 2/28/00 $11.40 $ 7,704 $ 92,443
--------------------------------------------------------------------------------
2 3/1/00 - 2/28/01 $12.20 $ 8,244 $ 98,930
--------------------------------------------------------------------------------
3 3/1/01 - 2/28/02 $13.05 $ 8,819 $105,822
--------------------------------------------------------------------------------
4-5 3/1/02 - 2/28/04 $16.05 $10,846 $130,149
--------------------------------------------------------------------------------
(b) Commencing on the First Amendment Space Rent Commencement
Date and continuing thereafter until the Expiration Date of the Lease,
Tenant shall: (i) pay to Landlord Base Rent for the First Amendment
Space at the same rate per rentable square foot as Tenant is required
to pay from time to time with respect to the Original Leased Premises,
as more particularly set forth in Section 7(a) hereof; (ii) pay for
electricity and gas consumed within the First Amendment Space in
accordance with Section 3.4 of the Lease, (iii) pay Additional Rent
with respect to the First Amendment Space in accordance with Section
3.5 of the Lease, and (iv) a portion of the Taxes in accordance with
Article 4 of the Lease, as hereby amended.
(c) In addition, commencing in the sixth Lease Year, with
respect to First Amendment Space only, Tenant shall pay Tenant's OE
Share (as hereinafter defined) of increases in Operating Expenses over
the Base Expense Year in accordance with the terms of Article 37 of the
Lease, as amended by this First Amendment.
8. DEFINITIONS.
(a) The second sentence of Section 4.1(a) of the Lease is
hereby deleted and substituted therefor is, "The Building shall mean
Xxxxxxxx 0 Xxxxx xxx Xxxxxxxx 0 Xxxxx."
(x) The first sentence of Section 4.1(d) of the Lease is
hereby deleted and substituted therefor is the following:
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"TENANT'S PRO-RATA SHARE" shall mean a fraction, the
numerator of which shall be the total number of
rentable square feet in the Leased Premises, as same
may increase or decrease from time to time, and the
denominator of which shall be the total number of
rentable square feet in Building 5 North and Building
5 South combined, as same may increase or decrease
from time to time; Landlord represents that as of the
date hereof the combined area of Building 5 North and
Building 5 South measured in rentable square feet is
102,938 rentable square feet.
(c) The Term " Property defined in Section 1.1(a) of the Lease
is also known as Map 256, Block 0393 and Lot 00100 in the New Haven Tax
Assessor's office.
9. TAX PAYMENT; ENTERPRISE ZONE The text of Section 4.2 of the Lease is
hereby deleted and substituted therefor is the following:
(a) TAX PAYMENT.
(i) Commencing on the Rent Commencement Date up to
the day immediately preceding the First Amendment Space Rent
Commencement Date, with respect to the Original Leased
Premises, Tenant shall pay to Landlord as Additional Rent due
hereunder, for any Tax Year, any part of which shall occur
during the Term or any Extension Term, an amount (the "TAX
PAYMENT") equal to: (i) Tenant's Pro-Rata Share (as defined in
the Lease without reference to the First Amendment) of the
Taxes attributable to the land underlying the Building that
constitutes part of the Property and those portions of the
Building that do not constitute improvements made by, or on
behalf of Tenant or other tenants (collectively, the "BASE
BUILDING"), plus 100% of the Taxes attributable to the
Tenant's Work (as defined under the Lease without reference to
the First Amendment).
(ii) Commencing on the First Amendment Space Rent
Commencement Date with respect to the entire Leased Premises
including the Original Leased Premises and the First Amendment
Space, Tenant shall pay to Landlord as Additional Rent due
hereunder, for any Tax Year, any part of which occurs after
the First Amendment Space Rent Commencement Date and during
the Term or any Extension Term, an amount (also the "TAX
PAYMENT") equal to: (i) Tenant's Pro-Rata Share (as defined in
this Lease as amended by the First Amendment) of the Taxes
attributable to the Base Building; plus (ii) 100% of the Taxes
attributable to all of the Tenant's Work (which for purposes
of the balance of this
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Article 4, unless specified to the contrary, shall mean
Tenant's Work both as defined under this Lease and under the
First Amendment).
(iii) Landlord shall request the New Haven Tax
Assessor's informal opinion regarding apportionment of the
Taxes among the Base Building and the Tenant's Work in order
to calculate the Tax Payment due under subsections 4.2(a)(i)
and 4.2(a)(ii) above. Absent manifest error, the New Haven Tax
Assessor's opinion shall be binding on the parties. If the New
Haven Tax Assessor refuses to participate in such
apportionment, the Landlord shall make the initial
determination, and if Tenant disagrees therewith, Tenant shall
pay its portion of the Taxes in accordance with Landlord's
determination without prejudice, and shall otherwise have the
same right to audit and challenge Landlord's determination as
Tenant has with respect to Landlord's determination of the
Enterprise Zone benefit pursuant to Section 4(d) below.
(b) ENTERPRISE ZONE BENEFITS. Notwithstanding anything to the
contrary contained herein, Tenant shall be entitled to apply
for Enterprise Zone tax treatment with respect to the Tenant's
Work and the Building 5 Improvements, and Landlord shall
cooperate with Tenant in connection with any such application.
Tenant shall be entitled to 100% of the benefits available
from the Enterprise Zone program with respect to the Tenant's
Work and Tenant's Pro-Rata Share of the benefits available
from the Enterprise Zone program with respect to the Building
5 Improvements. All Enterprise Zone benefits to which Tenant
is entitled hereunder shall reduce the Tax Payments due from
Tenant hereunder. Landlord shall request the New Haven Tax
Assessor's opinion, formal or informal, regarding
apportionment of the Enterprise Zone tax benefits among the
Tenant's Work (with reference to the cost of the Tenant's
Work) and the Building 5 Improvements (with reference to the
cost of the Building 5 Improvements). Absent manifest error,
the New Haven Tax Assessor's opinion shall be binding on the
parties.
(c) APPORTIONMENT OF BENEFITS.If the New Haven Tax Assessor is
unable or unwilling to apportion the benefits of the
Enterprise Zone program to Tenant's Work separate and apart
from the Building 5 Improvements, Landlord, again with
reference to the cost of the Tenant's Work and the Building 5
Improvements, shall apportion the Enterprise Zone benefits
among the Tenant's Work and the Building 5 Improvements and
Tenant shall share in such benefits in accordance with the
provisions of subsection (b) above.
(d) AUDIT RIGHT. If Tenant disagrees with Landlord's
determination of the Enterprise Zone benefits attributable to
the Building 5
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Improvements and/or to the Tenant's Work (in the absence
of a determination by the New Haven Tax Assessor), Tenant
shall pay its Taxes without prejudice, and may give
Landlord notice that it disputes Landlord's determination.
Within forty-five days following Landlord's receipt of such
notice, Tenant shall have the right to audit Landlord's
calculations. If the parties fail to agree on the correct
measure of Enterprise Zone benefit due Tenant, either party
may submit the dispute to binding arbitration under the
commercial leasing rules of the American Arbitration
Association with three (3) arbitrators, each having at least
ten (10) years of commercial real estate leasing experience in
New Haven County. If the arbitrators award Tenant Enterprise
Zone benefits that are three (3%) percent or greater than the
amount Tenant would have received under Landlord's original
determination, Landlord shall pay all costs of the
arbitration, including Tenant's reasonable attorneys fees,
otherwise, Tenant shall pay all costs of the arbitration
including Landlord's reasonable attorneys fees.
10. TAX RELIEF. Section 4.4 of the Original Lease is hereby deleted and
substituted therefor is the following: "Tenant shall be entitled to
Tenant's Pro-Rata Share of any real estate tax relief or other forms of
assistance or relief that may be negotiated by Landlord with the City
of New Haven in connection with the refurbishment of Building 5 North
and Building 5 South and the underlying land that is part of the tax
parcel containing Building 5 North and Building 5 South."
11. THE BUILDING. The phrase "Building 5 North" in Section 11.4 of the
Original Lease is replaced by the phrase "Building 5 North and Building
5 South".
12. PARKING. The rental of the First Amendment Space will include the use
of twenty-five (25) parking spaces in addition to the eighty (80)
parking spaces provided for under the Lease, for a total of one hundred
five (105) parking spaces, all of which parking spaces shall be made
available to Tenant as of the date Tenant takes occupancy of the First
Amendment Space for the purpose of conducting its business therein. The
term "TENANT'S PARKING SPACES" as used in the Lease shall mean said 105
parking spaces, of which four (4) spaces shall be designated with
signage as being reserved for Tenant's visitors. The four (4) spaces
designated as Tenant's visitor parking shall be in addition to the
fifteen (15) spaces reserved for Tenant's exclusive use pursuant to
Section 1.2 of the Original Lease. Tenant's Parking Spaces shall be
located in the areas shown on EXHIBIT A-4 attached hereto and made a
part hereof. Tenant shall use Tenant's Parking Spaces in common with
the other tenants of Science Park (except for its 15 reserved spaces
and its visitor parking spaces which are for Tenant's exclusive use),
but shall have the right to use all of Tenant's Parking Spaces within
the areas shown on EXHIBIT A-4 at all times during the Term, and any
Extension Term.
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13. AS-IS CONDITION. Subject to completion of the Landlord's obligations
set forth in this First Amendment, including without limitation,
completion of the Interior Work, as set forth in this First Amendment,
Landlord shall tender Tenant possession of the First Amendment Space in
its then "as is" condition and Tenant agrees to accept possession of
the First Amendment Space in its then "as is" condition, broom clean.
14. LANDLORD'S WORK AND INTERIOR WORK.
(a) Pursuant to the provisions of Sections 2.4B, 2.4E - H and
2.6 of the Lease, Landlord, at its expense, shall undertake the work
described on EXHIBIT B-1 [CONTINUED] and EXHIBIT B-3 attached hereto
and made a part hereof (collectively, the "LANDLORD'S WORK").
(b) As part of the Landlord's Work that Landlord is obligated
to perform hereunder, Landlord hereby agrees to complete all of the
work described on EXHIBIT B-3 attached hereto and made a part hereof
(the "INTERIOR WORK"). Landlord hereby agrees to complete the
Landlord's Work in a good and workmanlike fashion. Except as otherwise
provided herein to the contrary, Tenant relies on no warranties or
representations, express or implied, of Landlord or any agent or other
party associated with Landlord as to its condition or repair, or as to
taxes or any other matter relating to the First Amendment Space, except
as otherwise expressly provided in the Lease, as modified by this First
Amendment. Substantial completion of the Landlord's Work shall be
evidenced by issuance of a certificate of occupancy. Landlord and
Tenant shall each use their best efforts to collectively cause Xxxxx
Corporation and Svigals Associates to coordinate the Interior Work with
the Tenant's Work (as defined in Article 12 of this First Amendment)
with respect to the First Amendment Space in order not to delay
completion of the Tenant's Work with respect to the First Amendment
Space. That portion of the Landlord's Work, not including the Interior
Work, shall be finished pursuant to the existing time requirements for
completion of the Landlord's Work under the Original Lease.
(c) It shall be Landlord's obligation to perform the Interior
Work at Landlord's expense. Landlord shall use its best efforts to
substantially complete all of the Interior Work by the First Amendment
Space Rent Commencement Date. In addition, Landlord represents that all
electrical, mechanical, plumbing and other building systems serving the
First Amendment Space will be in working order on the First Amendment
Space Rent Commencement Date. In addition, Landlord's representation
regarding compliance with laws set forth in the second sentence of
Section 8.1 of the Original Lease is hereby deemed repeated with regard
to the Landlord's Work, as is the limitation on Tenant's remedy set
forth in the balance of said Section 8.1.
15. TENANT'S WORK. Tenant, at Tenant's expense, agrees to make improvements
to the First Amendment Space pursuant to plans and specifications
approved by Landlord. Such improvements shall be deemed "TENANT'S WORK"
and such plans and specifications shall be deemed "TENANT'S PLANS", and
the terms of Section 2.7(a) of the Lease shall govern
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the approval of same. Tenant shall proceed with reasonable due
diligence to perform Tenant's Work following funding of Tenant's new
loan from Connecticut Innovations, Inc. (the "NEW CII LOAN") and the
issuance of a building permit therefor.
16. LIMITATION ON LANDLORD'S LIABILITY. Notwithstanding anything to the
contrary contained in the Lease or this First Amendment, if the Science
Park Development Corporation transfers fee simple title to the
Property, voluntarily or involuntarily, or if the Landlord converts
from a non-profit to a profit organization, the Lease shall be amended
by deleting Sections 11.3A and 11.3B in their entirety and substituting
therefor the following:
A. Landlord shall not be liable to Tenant, and to the
fullest extent allowed by law, Tenant, for itself and its
employees, contractors, subcontractors, agents, licensees and
invitees hereby waives any and all claims, actions and causes
of action which they or any of them may have now or in the
future arising from Landlord's negligence including, without
limitation, claims for damages resulting from loss of life,
bodily injury or damage to any property on or about the
Property or the approaches, entrances, streets, sidewalks or
corridors thereto, except as herein otherwise provided and
except that the foregoing shall not apply in the event of
breach of this Lease by, or gross negligence of, and/or
willful misconduct of Landlord, its employees or agents.
Tenant shall promptly notify Landlord of any defective
condition in the Building of which it becomes aware.
B. [INTENTIONALLY OMITTED]
17. SUBORDINATION AND NON-DISTURBANCE. As used herein, the term "LANDLORD'S
LENDERS" shall mean and refer to the Connecticut Housing Finance
Authority ("CHFA"), the Connecticut Development Authority ("CDA") and
each future lender who may from time to time extend credit to Landlord
which extensions of credit may be secured in whole or in part by a
mortgage, deed of trust, ground lease or other security interest
affecting the real property of which the First Amendment Space is a
part. Tenant's obligations under this First Amendment are subject to
receipt of non-disturbance agreements: (A) from CDA, simultaneously
with the execution and delivery of this First Amendment, and (B) from
CHFA, both of which shall be substantially similar in form and content
to the form of Non-Disturbance, Subordination and Attornment Agreement
attached as EXHIBIT H and made a part of the Lease. Provided CHFA and
CDA execute and deliver said non-disturbance agreements, the Lease, as
modified by this First Amendment, shall be subject and subordinated to:
(a) all security interests in favor of CHFA and CDA affecting the
Leased Premises, including without limitation the First Amendment
Space, or the property of which the Leased Premises are a part, and (b)
all present and future mortgages, deeds of trust and other security
interests, including leasehold mortgages, granted by Landlord in favor
of CHFA and CDA and affecting the Leased Premises, including without
limitation the First Amendment Space, or the property of which the
Leased Premises are a part. Tenant agrees to execute, at no expense to
Landlord, any
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instrument which may reasonably be deemed necessary or desirable by
Landlord, CHFA or CDA or to further effect the subordination of the
Lease, as modified by this First Amendment, to any such security
interest, provided however, Tenant's non-disturbance rights are not
affected. The Tenant's failure to strictly comply with this section
will constitute an Event of Default under this Lease.
18. NEW CII LOAN A.Tenant has a commitment from CII for a new loan in the
amount of $2,720,000 to finance construction of the Tenant's Work in
both the First Amendment Space and other space in Building 5 South.
Section 15.1B of the Lease is hereby modified to permit Tenant to
assign its right, title and interest in and to the First Amendment
without Landlord's consent to CII as collateral security for the New
CII Loan, or to any Tenant's Lender as collateral security for a
similar loan to Tenant. Tenant's Lender, including, without limitation,
CII shall be entitled to assign its rights under the First Amendment or
to sublet the First Amendment Space to any entity, subject to the
provisions set forth in subsections 15.1B(a)-(d) of the Original Lease.
B. Upon at least five (5) business days notice, Landlord, at its
expense, hereby agrees to enter into a new Consent and Intercreditor
Agreement substantially similar in form and substance to the
Intercreditor Agreement (as defined in Section 15.5(d) of the Original
Lease) but relating to the New CII Loan and the First Amendment.
C. Upon the closing of the New CII Loan, Landlord agrees to execute and
deliver an affidavit (a) verifying the nonexistence of any tenants'
rights in the First Amendment Space, (b) verifying the nonexistence of
any security interests in personal property and fixtures that form a
part of the First Amendment Space, other than the rights therein, if
any, of CDA and CHFA as the current Landlord's Lenders, and United
States Department of Commerce, Economic Development Administration and
(c) that Landlord has no notice of any facts or circumstances not of
record which could give rise to the claim of any third party to rights
of adverse possession or use over the First Amendment Space or any part
thereof in derogation of Landlord's title. Upon the execution of this
First Amendment, Landlord further agrees to obtain and deliver a
subordination of mechanic's liens, subordinated as to the lien in favor
of CII, executed by any contractor(s) who have furnished any labor,
services or materials in connection with construction or repair work to
the Building on behalf of Landlord and would have a right to file a
mechanic's lien that would have priority over the mortgage filed in
connection with the New CII Loan.
19. SIGNS. Article 28 of the Original Lease is hereby amended by
designating same as subsection "A" and adding the following as a new
second paragraph:
B. Notwithstanding anything to the contrary contained herein,
Tenant shall have the exclusive right to install a sign with
its name and logo on the outside of the Building that is
clearly visible from the streets bounding the Building.
Landlord shall have the right to approve such sign, and such
approval shall not be unreasonably
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withheld. Tenant, at its sole cost and expense, shall be
responsible for obtaining any approvals required by applicable
law in connection with having any such sign, and shall remove
such signage at the expiration of the Term, as same may be
extended. Tenant, at its expense, shall use reasonable
diligence to restore the facade of the Building to the
condition it was in at the time Tenant installed the sign,
reasonable wear and tear and loss by fire or other casualty
excepted.
20. AMENDED NOTICE OF LEASE. Article 30 of the Lease is hereby amended to
provide that at the request of either party, the notice of lease
relating to the Lease shall be amended to reflect the addition of the
First Amendment Space.
21. HVAC SERVICE. The text of Article 36 of the Lease is hereby deleted and
substituted therefor is the following:
"A. Landlord, at its sole cost, shall operate the Building's boilers
and chillers to supply hot and chilled water sufficient to operate
Tenant's air-conditioning, heating and ventilating systems ("TENANT'S
HVAC SYSTEM") and Landlord's heating, ventilating and cooling systems
serving the common areas of the Building Monday through Friday from
8:00 a.m. to 6:00 p.m. ("BUSINESS HOURS"). Landlord, at its expense,
may install submeters or energy measuring devices (on the two chillers,
the boilers, and on the hot and chilled water supply lines that serve
Tenant's HVAC System) to measure the energy supplied to the Tenant's
HVAC System. Landlord, at its expense, shall also operate the boilers
and chillers to supply hot and chilled water to Tenant's HVAC System
and other systems serving the said common areas outside Business Hours.
Landlord's responsibility as to costs of operating the boilers and
chillers outside of Business Hours shall be without regard to the
requirement to supply Tenant's after-hours HVAC requirements and only
to the extent required to maintain temperatures within the Building at
off-hours setback points normal for an office building.
B. If required for Tenant's laboratory requirements, Landlord shall
operate the boilers and chillers 24 hours a day, 365 days a year to
provide heated and chilled water to Tenant's HVAC System. Tenant shall
reimburse Landlord as Additional Rent due hereunder for its share of
the costs of energy to supply chilled or hot water outside of Business
Hours over and above the costs for which Landlord is responsible absent
a laboratory requirement pursuant to the last sentence of Section 36A
hereof. Tenant's share of the costs of such after-Business Hours
operation of the boilers and chillers shall be apportioned daily among
those tenants using such services for HVAC outside of Business Hours on
the basis of the floor areas of such tenants, after accounting for the
basic off-hours needs of the Building to be attributed to the Landlord
as set forth in the last sentence of Section 36A hereof. Alternatively,
if Landlord installs an energy measuring system to track directly the
energy supplied by the chillers and boilers to each of the tenants in
the Building requiring hot and cold water outside of Business Hours,
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over and above the after-hours costs for which Landlord is responsible
pursuant to Section 36A hereof, the cost of the energy used shall be
computed and billed as Additional Rent based on actual utilization.
C. Landlord's share of the cost of operation of the boilers and
chillers outside of Business Hours shall be determined as promptly as
possible after the date hereof by an impartial professional engineer
selected by mutual agreement of Landlord and Tenant. Said engineer, at
Landlord's expense, shall compute the share of energy costs for the
Landlord to maintain the Building outside of Business Hours at normal
office building temperatures absent laboratory use and under various
weather and temperature conditions over a one-year period. The balance
of the costs of such operation outside of Business Hours shall be
apportioned proportionately among the Tenants requiring such services
on the basis of the tenant's rentable square footage. If a direct
energy measurement system is installed to track the after-Business
Hours energy requirements of tenants in the Building, the engineer
shall establish proper procedures for the utilization of said system so
that Landlord and all tenants pay for their proper share of after-hours
energy utilization. Landlord shall provide Tenant with a copy of the
engineer's report as well as an opportunity to discuss details of the
analysis and of the energy management system.
D. Landlord shall xxxx Tenant monthly for its share of after-Business
Hours operation of the boilers and chillers, commencing on the Rent
Commencement Date with respect to the Original Leased Premises, and on
the First Amendment Space Rent Commencement Date with respect to the
First Amendment Space, throughout the Term as long as Tenant maintains
a requirement for hot and chilled water outside of Business Hours. All
such xxxxxxxx shall be accompanied by Landlord's calculation of
Tenant's share of such cost for each month as well as the appropriate
reports from metering and reporting devices.
22. OPERATING EXPENSES. The Lease is hereby amended by adding a new Article
37 as follows:
ARTICLE 37. OPERATING EXPENSES
37.1 DEFINITIONS. As used in this Article, the following terms
shall have the following meanings:
(a) "First Amendment Space" shall have the same meaning as set
forth in the First Amendment to Lease.
(b) With respect to the First Amendment Space, "Base Expense
Year" shall mean the twelve month period commencing on the
date Tenant first occupies the First Amendment Space for
purposes of conducting its business therein.
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(c) "Building" shall mean the entirety of Building 5 North and
Building 5 South of Science Park, including any below grade
portions thereof.
(d) "Operating Expense Year" shall mean each calendar year
following the Base Expense Year, all or any portion of which
falls within the Term of this Lease, as extended from time to
time. Notwithstanding the foregoing, the first Operating
Expense Year shall commence on the first day following the
expiration of the Base Expense Year and shall end on the
following December 31, and the last Operating Expense Year
shall end on the last day of the Term. Tenant's obligation
under this Article to pay estimated and actual amounts towards
Operating Expenses for the first and last Operating Expense
Year shall be prorated by multiplying the total estimated or
actual (as the case may be) Operating Expenses paid or
incurred during the first or last (as the case may be)
Operating Expense Year, as well as the total Operating
Expenses paid or incurred during the Base Expense Year, by a
fraction, the numerator of which shall be the number of days
in the first or last (as the case may be) Operating Expense
Year, and the denominator of which shall be 365.
(e) "Operating Expenses" shall mean all reasonable and
customary operating expenses (other than Taxes and Building 5
Improvements) incurred or borne by Landlord in connection with
the operation, maintenance and repair of Building 5 North and
Building 5 South and the Park Expenses (as hereinafter
defined) including:
1. Reasonable wages and salaries of all employees below the
level of manager engaged in the physical operation and/or
maintenance of the Building, including Landlord's portion of
social security taxes and any other taxes which may be levied
against Landlord on such wages and salaries.
2. Property management fees paid or incurred with respect to
the Building.
3. Costs incurred in connection with supply of electricity to
the common areas of the Building
4. Costs incurred in connection with the normal and customary
use by all tenants of the Building of all energy sources,
including gas, water and sewer and hot water charges (but not
including those amounts paid directly by Tenant pursuant to
this lease or by the tenants of the Building pursuant to their
leases).
12
5. The cost of janitorial and office supplies and similar
materials used in the operation and/or maintenance of the
Building.
6. The cost of all maintenance and services incurred in the
operation of the Building and all service agreements pursuant
thereto, including, but not limited to, protection and
security service, window cleaning, tenant area and common area
cleaning and janitorial service, plant and landscaping service
(to the extent not included in the Park Expenses) including
maintenance of the grounds, plantings and replantings (after
completion of the Building 5 Work), trash removal and
recycling pick-up.
7. Insurance premiums for liability, fire and loss of rents
insurance for the Building, and insurance premiums for both
Workers Compensation Insurance and Unemployment Compensation
Insurance covering employees below the level of manager to the
extent that their employment related activities are
attributable to operation of the Building.
8. The cost of all required non-structural repairs,
replacements and maintenance in the Building (in each case, to
the extent not covered by insurance, manufacturer's or
installer's warranties or condemnation proceeds), including
but not limited to, window glass, heating and cooling units
and systems, bathroom fixtures and all plumbing facilities,
all common area interior walls, floors and covering, utility
conduits and force mains, signs, elevators, sidewalks and
steps, all building service equipment, lighting units and
fixtures including bulb and tubes, all other building fixtures
and equipment, except to the extent any of the foregoing
repairs, replacements or maintenance is necessitated by the
acts or omissions of one tenant and except to the extent
excluded pursuant to Section 37.1(f) below.
9. Any costs incurred by Landlord for any capital
improvements, repairs or replacements, other modifications or
structural repairs to the Building (not attributable to latent
defects or the Building 5 Improvements), which are required by
a change in the law or a new law applicable to the Property
passed after the First Amendment Space Commencement Date with
respect to the First Amendment Space; the costs for any item
in this clause, (or series of related items, undertaken within
a reasonably short period of time, which, if taken together,
would reasonably constitute a single item) shall be amortized
over the maximum useful life of such item(s), in accordance
with the U.S. Internal Revenue Code and Regulations in effect
from time to time.
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10. Any costs incurred by Landlord in making structural
repairs, capital improvements or other modifications to the
Building (which are not attributable to latent defects or the
Building 5 Improvements), which will reduce Operating
Expenses; the costs for any such item (or series of related
items, undertaken within a reasonably short period of time,
which, if taken together, would reasonably constitute a single
item) shall be amortized, over the maximum useful life of such
item(s), in accordance with the U.S. Internal Revenue Code and
Regulations in effect from time to time; provided however, any
required annual amortization amount will not exceed the
reduction in Operating Expenses realized by Tenant for the
relevant Operating Expense Year and the amortization schedule
will be extended beyond the maximum useful life, if necessary,
to fully amortize same.
(f) Notwithstanding anything to the contrary contained in the
Lease as amended, "Operating Expenses" and "Park Expenses" (as
hereinafter defined) shall not include:
1. Items which are the direct responsibility of any tenant or
are caused by the intentional or negligent act of any tenant,
its agents, licensees or business invitees;
2. Expenses of alterations to any portion of the Building for
the accommodation of a specific tenant or tenants;
3. All third party costs and expenses of leasing space in the
Building, including, without limitation, legal fees and
broker's commissions and advertising, and the salary of any
employee of Landlord dedicated exclusively to leasing space in
Science Park;
4. Costs actually covered by Landlord's insurance or other
manner of reimbursement and for which payment is received by
Landlord;
5. The cost of any capital improvement, repair or replacement
except as specifically provided in Sections 37.1(e) 9 and 10
above;
6. Cost attributable to the Building 5 Improvements;
7. Costs incurred due to Landlord violations of any of the
terms and conditions of any leases in the Building and/or
costs attributable to enforcing leases against tenants in the
Building, such as attorney's fees, court costs, adverse
judgments and similar expenses;
14
8. Overhead and profit paid to subsidiaries or affiliates of
the Landlord for management services or materials to the
extent that the costs of those items would not have been paid
had the services and materials been provided by unaffiliated
parties on a competitive basis;
9. Debt service on any mortgages of the Landlord and rental
under any ground or underlying lease and charges and fees
incurred by Landlord in connection with the procurement and
recording of any such mortgage or ground or underlying lease,
and amortization of debt;
10. Repairs and other work occasioned by fire, or other
casualty or condemnation, whether or not the Landlord is
reimbursed by insurance proceeds or condemnation award;
11. Any costs, fines or penalties incurred due to violations
by Landlord of any governmental rule or authority and the
defense of same;
12. All items and services for which Landlord is reimbursed
under other leases for space in the Building, or under other
provisions of this Lease; and/or
13. Notwithstanding anything to the contrary herein set forth,
the cost of any environmental remediation, monitoring,
cleanup, testing, reporting, investigation or study, or any
damages payable by Landlord.
(g) "Controllable Operating Expenses" shall mean all Park
Expenses and all Operating Expenses, except for the cost of
utility charges (electricity, gas, water and sewer) and
insurance included in the definition of Operating Expenses.
(h) "Operating Expense Cap" shall mean that Tenant shall not
be charged for any increase in Controllable Operating Expenses
in excess of five (5%) percent over the Controllable Operating
Expenses for the Base Expense Year, with respect to the first
Operating Expense Year, or in excess of five (5%) percent over
the Controllable Operating Expenses for the immediately
preceding Operating Expense Year, with respect to each
succeeding Operating Expense Year.
(i) "Tenant's OE Share" with respect to the First Amendment
Space shall mean a fraction, the numerator of which shall be
the total number of rentable square feet in the First
Amendment Space and the
15
denominator of which shall be the total number of rentable
square feet in the Building, which Landlord represents is
currently 102,938 rentable square feet.
(j) "Park Expenses" shall mean a fraction (equal to the
rentable area of the Building divided by the rentable area of
all buildings then owned by Landlord in Science Park including
Buildings 4, 5 and 25) of the reasonable and customary
overhead, administrative and operating expenses (other than
Operating Expenses that are not Park Expenses, Taxes and
Building 5 Improvements) incurred or borne by Landlord in
connection with the operation and maintenance of the Property
(as defined in Section 1.1 of the Original Lease) and
including, without limitation, employee salaries up to and
including the level of building manager, together with the
reasonable salary of the executive director of the Landlord
(subject to the provisions of Section 37.2 hereof), security
guard services, snow plowing of the driveways and parking
areas and landscaping maintenance. Landlord hereby represents
that currently the said fraction described above is equal to
approximately 30.00%.
37.2 GROSS-UP PROVISION. If the Building is not fully occupied
during all or a portion of the Base Expense Year, Landlord
shall, in accordance with sound accounting and management
practices, determine the amount of Operating Expenses that
would have been included in the Base Expense Year if the
Building had been fully occupied, and the amount so determined
shall be deemed to be the Operating Expenses incurred in the
Base Expense Year. In addition, if the Building is not fully
occupied during all or a portion of any Operating Expense
Year, Landlord may, in accordance with sound accounting and
management practices, determine the amount of Operating
Expenses that would have been paid or incurred had the
Building been fully occupied, and the amount so determined
shall be deemed to have been the amount of Operating Expenses
for such year. Notwithstanding anything to the contrary
contained herein, once the Landlord hires an Executive
Director, the reasonable salary of the Executive Director
shall be added to the Park Expenses included in each Base
Expense Year.
37.3 OPERATING EXPENSE PAYMENTS. In addition to Base Rent and other
Additional Rent due and payable by Tenant pursuant to the
other provisions of this Lease, Tenant shall pay to Landlord ,
as Additional Rent, commencing in the fifth (5th) Operating
Expense Year, an amount equal to Tenant's OE Share of the
amount of Operating Expenses paid or incurred by Landlord
during each Operating Expense Year in excess of the amount of
Operating Expenses paid or
16
incurred by Landlord during the Base Expense Year; provided,
however, that for purposes of the calculations made under this
Article: (i) in no event shall Tenant be charged for Operating
Expenses in excess of the Operating Expense Cap; and (ii) in
no event shall Landlord charge Tenant more than Tenant's OE
Share of 100% of the actual cost of Operating Expenses
incurred by Landlord. Operating Expenses for partial Operating
Expense Years shall be divided by the number of months in such
partial year and multiplied by twelve (12) for purposes of
determining whether the Operating Expense Cap has been
exceeded.
37.4 ESTIMATED OE PAYMENTS. Additional Rent due and payable by
Tenant to Landlord pursuant to this Article shall be paid in
the following manner:
(a) Landlord shall reasonably estimate in advance the amounts
Tenant shall owe under this Article for any full or partial
Operating Expense Year. Beginning in the fifth Operating
Expense Year, Tenant shall pay such estimated amounts, on a
monthly basis, on or before the first day of each calendar
month during the fifth and each following Operating Expense
Year. Such estimate may be reasonably adjusted from time to
time by Landlord.
(b) Within 120 days after the end of each Operating Expense
Year, or as soon thereafter as practicable, Landlord shall
provide a statement (the "STATEMENT") to Tenant showing: (i)
the amount of actual Operating Expenses for such Operating
Expense Year, with a listing of amounts for major categories
of Operating Expenses, and such amounts for the Base Expense
Year, (ii) any amount paid by Tenant towards Additional Rent
payable under this Article during such Operating Expense Year
on an estimated basis, (iii) any revised estimate of Tenant's
obligations for Operating Expenses for the current Operating
Expense Year, and (iv) a calculation of whether the Operating
Expense Cap has been exceeded.
(c) If the Statement shows that the estimated payments made by
Tenant during the Operating Expense Year were less than
Tenant's actual obligations for the payment of Additional Rent
under this Article for such Year, Tenant shall pay the
difference. If the Statement shows an increase in Tenant's
estimated payments for the current Operating Expense Year,
Tenant shall pay the difference between the new and former
estimates, for the period from the first day of the
then-current Operating Expense Year through the month in which
the Statement is sent, subject to the Operating Expense Cap.
17
Tenant shall make such payments within thirty (30) days after
the Statement is deemed to have been given under the terms of
this Lease.
(d) If the Statement shows that Tenant's estimated payments
exceeded Tenant's actual obligations for the payment of
Operating Expenses under this Article, or if for some reason
Tenant's estimated payments exceeded the Operating Expense
Cap, then Tenant shall receive a credit for the difference
against payments of rent next due. If the Term shall have
expired and no further rent shall be due, Tenant shall receive
a refund of such difference, within sixty (60) days after
Landlord sends the Statement. Notwithstanding anything to the
contrary contained herein, if Tenant's estimated payments
would cause the Operating Expense Cap to be exceeded, Tenant
shall only be obligated to make estimated payments up to the
Operating Expense Cap with respect to each Operating Expense
Year.
(e) No delay by Landlord of nine (9) months or less in
providing the Statement (or separate statements) shall be
deemed a default by Landlord or a waiver of Landlord's right
to require payment of Tenant's obligations under this Article.
After such nine (9) month period, Landlord shall be estopped
from billing for past Operating Expenses. In no event shall a
decrease in Operating Expenses below the Base Expense Year
amount ever decrease the monthly Base Rent, or give rise to a
credit in favor of Tenant.
37.5 BOOKKEEPING AND AUDITING. Landlord shall maintain records
respecting Operating Expenses and determine the same in
accordance with sound accounting and management practices,
consistently applied. Tenant or its representative shall have
the right to examine those books and records of Landlord and
any managing agent reasonably necessary for purposes of
auditing the Statement in question, provided Tenant gives
Landlord reasonable prior notice specifying the particular
respects in which the Statement is claimed to be incorrect.
Such examination shall take place during normal business hours
at the place or places where such records are normally kept
with forty-five (45) days following such notice from Tenant.
Each Statement shall be considered final, except as to matters
to which exception is taken after examination of Landlord's
records in the foregoing manner and within the foregoing
times. If Tenant takes exception to any matter contained in
the Statement as provided herein, Landlord shall refer the
matter to an independent certified public accounting firm
having a national practice, whose certification as to the
proper amount shall be final and conclusive as between
Landlord and Tenant. Tenant shall promptly pay the cost of
such
18
certification unless such certification determines that Tenant
was overbilled by more than two (2%) percent. Pending
resolution of any such exceptions in the foregoing manner,
Tenant shall continue paying, without prejudice to Tenant's
position, Tenant's OE Share of the excess of Operating
Expenses paid or incurred during the applicable Operating
Expense Year over the applicable Base Expense Year in the
amounts determined by Landlord, subject to adjustment after
any such exceptions are so resolved, and subject to the
Operating Expense Cap.
37.6 SURVIVAL. The parties obligations set forth in this Article 37
shall survive the expiration or earlier termination of this
Lease for a period of one year, but such survival shall not be
deemed to effect the waiver set forth in Section 37.4(e)
hereof.
23. EFFECT. The Lease, as modified by this First Amendment, remains in full
force and effect.
24. MERGER. All understandings, letters of intent or agreements between
Tenant and Landlord, which predate this First Amendment are merged
herein. No oral statements or representations or prior written
communications by or between the parties dealing with the subject
matter of this First Amendment shall be binding or effective. This
First Amendment and the Lease are the sole and complete expression of
the agreement between Landlord and Tenant as to the subject matter
thereof.
25. SEVERABILITY. If any of the provisions of this First Amendment, or its
application, is held by any court or in arbitration to be invalid or
inapplicable, such decision shall not affect any other term, provision,
covenant or condition of this First Amendment. Notwithstanding the
foregoing, if the invalid provision has the effect of reducing the rent
to be paid by Tenant, Landlord may cancel the Lease.
26. GOVERNING LAW. The laws of the State of Connecticut will govern the
interpretation of this First Amendment.
27. BINDING NATURE. This First Amendment shall be binding upon the parties
hereto and upon their heirs, administrators, executors, successors and
assigns, and shall not be construed against the party that drafted it.
The paragraph headings are for the parties' convenience and shall not
be deemed to effect the meaning of this First Amendment or otherwise.
19
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
SCIENCE PARK DEVELOPMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
Director of Development
Duly Authorized
GENAISSANCE PHARMACEUTICALS, INC.
By: /s/ Xxxxx Xxxxx
-----------------------
Xxxxx Xxxxx
Executive Vice President
Duly Authorized
20
Pursuant to Section 34.2 of the Lease dated September 15, 1998 by and between
Science Park Development Corporation and Genaissance Pharmaceuticals, Inc., the
undersigned hereby consent to the foregoing First Amendment to Lease.
CONNECTICUT DEVELOPMENT AUTHORITY
By: /s/ Xxxxxxx X. Xxxxxxx Date: 12/14/99
----------------------
Print Name: Xxxxxxx X. Xxxxxxx
Print Title: Senior Vice President
THE CONNECTICUT HOUSING FINANCE AUTHORITY
By: /s/ Xxxx X. Xxxx Date: 12/16/99
----------------------
Print Name: Xxxx X. Xxxx
Print Title: President and
Executive Director
CONNECTICUT INNOVATIONS, INC.
By: /s/ Xxxxxx Xxxxxxx Date: 12/14/99
-----------------------
Print Name: Xxxxxx Xxxxxxx
Print Title: President and
Executive Director
21
EXHIBIT A-1
FLOOR PLAN OF FIRST AMENDMENT SPACE
XXXXX XXXXX XXXXXXXX 0 XXXXX
00
XXXXXXX X-0 [CONTINUED]
FLOOR PLAN OF FIRST AMENDMENT SPACE
THIRD FLOOR BUILDING FIVE NORTH
23
EXHIBIT A-4
LOCATION OF PARKING SPACES
24
EXHIBIT B-1 [CONTINUED]
LANDLORD'S WORK - BUILDING 5 NORTH
1. Building 5 North's entryway, including its exterior door, will be
renovated to include painting, new carpeting, acoustical ceilings.
2. All non-double pane windows will be replaced to match the new windows
at Building 5 North.
3. The fire alarm system will be updated as required by code
4. The roof will be repaired or replaced as required
25
EXHIBIT B-3
INTERIOR WORK - FIRST AMENDMENT SPACE
1. Piping and supply of chilled and hot water sufficient to operate
Tenant's HVAC system will be installed up to the First Amendment Space.
2. Modifications and/or upgrades to fire alarm system and sprinkler system
if required by fire marshal.
3. Installation of hot water supply and return.
4. Installation of baseboard heating system.
5. Window replacement work.
