EXHIBIT 10.10
LEASE AGREEMENT
BY AND BETWEEN
PETULA ASSOCIATES, LTD.
(AS LANDLORD)
AND
INSPIRE PHARMACEUTICALS, INC.
(AS TENANT)
TABLE OF CONTENTS
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1. DESCRIPTION OF PREMISES............................................... 1
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2. TERM.................................................................. 1
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3. RENTAL................................................................ 2
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4. DELIVERY AND UPFITTING OF PREMISES.................................... 5
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5. ALTERATIONS AND IMPROVEMENTS BY TENANT................................ 7
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6. USE OF PREMISES....................................................... 7
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7. TAXES ON LEASE AND TENANT'S PROPERTY.................................. 9
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8. FIRE AND EXTENDED COVERAGE INSURANCE.................................. 9
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9. LANDLORD'S COVENANT TO REPAIR AND REPLACE............................. 10
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10. TENANT'S COVENANT TO REPAIR........................................... 11
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11. TRADE FIXTURES AND EQUIPMENT.......................................... 11
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12. UTILITIES............................................................. 12
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13. DAMAGE OR DESTRUCTION OF PREMISES..................................... 12
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14. GOVERNMENTAL ORDERS................................................... 13
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15. MUTUAL WAIVER OF SUBROGATION.......................................... 14
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16. SIGNS AND ADVERTISING................................................. 14
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17. INDEMNIFICATION AND LIABILITY INSURANCE............................... 14
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18. LANDLORD'S RIGHT OF ENTRY............................................. 15
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19. EMINENT DOMAIN........................................................ 15
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20. EVENTS OF DEFAULT AND REMEDIES........................................ 16
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21. SUBORDINATION......................................................... 17
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22. ASSIGNING AND SUBLETTING.............................................. 18
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23. TRANSFER OF LANDLORD'S INTEREST....................................... 19
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24. COVENANT OF QUIET ENJOYMENT........................................... 19
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25. ESTOPPEL CERTIFICATES................................................. 19
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26. PROTECTION AGAINST LIENS.............................................. 19
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27. MEMORANDUM OF LEASE................................................... 20
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28. FORCE MAJEURE......................................................... 20
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29. REMEDIES CUMULATIVE - NONWAIVER....................................... 20
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30. HOLDING OVER.......................................................... 20
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31. NOTICES............................................................... 20
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32. LEASING COMMISSION.................................................... 21
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33. MISCELLANEOUS......................................................... 22
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34. SEVERABILITY.......................................................... 24
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35. REVIEW OF DOCUMENTS................................................... 24
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") made and entered into as of the 30th
day of December, 1997, by and between PETULA ASSOCIATES, LTD., an Iowa
corporation, hereinafter called "Landlord"; and INSPIRE PHARMACEUTICALS, INC., a
Delaware corporation, hereinafter called "Tenant":
W I T N E S S E T H:
In consideration of the mutual covenants and agreements contained
herein, the parties hereto agree for themselves, their successors and assigns,
as follows:
1. DESCRIPTION OF PREMISES.
Landlord hereby leases to Tenant, and Tenant hereby accepts and rents
from Landlord, that certain office/warehouse space (the "Premises") containing
approximately 5,400 rentable square feet known as Suite 225 and more
particularly described in Exhibit "B", located in the building known as Royal
Center II (the "Building") on a tract of land located at 0000 Xxxxxxx Xxxxxxxxx,
Xxxxxx, Xxxxx Xxxxxxxx, in Imperial Center Business Park (the "Business Park"),
more particularly described on Exhibit "A" attached hereto; together with the
nonexclusive right to use all parking areas, driveways, sidewalks and other
common facilities furnished by Landlord from time to time. Landlord may, at any
time prior to, or during the first six (6) months of the first Lease Year (as
hereinafter defined), have its architect or engineer measure the actual total
square footage of the Premises. In the event the Premises shall contain an
amount of square footage which exceeds the amount of square feet referenced
above by more than two percent (2%) of such amount, the square footage of the
Premises shall be adjusted to reflect the actual square footage and the Annual
Rental (as hereinafter defined) shall be proportionately adjusted based on
actual square footage multiplied by the applicable square foot rental rate (and
such adjustment shall relate back to the Commencement Date if there is a
variance). The reasonable cost of such measure shall be borne by Landlord.
2. TERM.
Unless otherwise adjusted as hereinbelow provided, the term of this
Lease (the "Term") shall commence on the earlier of: (a) the date Tenant, or any
person occupying any portion of the Premises with Tenant's permission, commences
business operations from the Premises, or (b) December 1, 1997 (the
"Commencement Date") and shall end at midnight on the date (the "Expiration
Date") which is six (6) full years from the Commencement Date (as same may be
adjusted as hereinbelow provided); provided, however, for purposes hereof,
Tenant's installation or storage of furniture, fixtures and equipment within the
Premises shall not be deemed the commencement of business operations. Tenant
shall have the option to extend the Term in accordance with Exhibit "E" attached
hereto and incorporated herein by reference. As used herein, the term "Lease
Year" shall mean each consecutive twelve-month period of the Term, beginning
with the Commencement Date (as same may be adjusted as hereinbelow provided) or
any anniversary thereof.
3. RENTAL.
During the term, Tenant shall pay to Landlord, without notice, demand,
reduction (except as may be applicable pursuant to the paragraphs of this Lease
entitled "Damage or Destruction of Premises" or the paragraph entitled "Eminent
Domain" of this Lease), setoff or any defense, a total rental (the "Annual
Rental") consisting of the sum total of the following:
(a) Minimum Rental.
(i) Beginning with the Commencement Date and continuing through the
earlier to occur of: (i) December 1, 1998, or (ii) the date upon which the
Tenant Improvements (as hereinafter defined) are substantially completed and a
permanent Certificate of Occupancy is issued for the Premises (the "Adjustment
Date"), Tenant shall pay a minimum annual rental (the "Minimum Rental") of
Thirty-One Thousand Fifty and No/100 Dollars ($31,050.00) [which represents a
rate of $5.75 per rentable square foot of the Premises], payable in equal
monthly installment of Two Thousand Five Hundred Eighty-Seven and 50/100 Dollars
($2,587.50) each in advance on or before the first day of each month.
(ii) Beginning with the Adjustment Date and continuing through the
Expiration Date or earlier termination of this Lease, Tenant shall pay Minimum
Rental of Fifty-One Thousand Three Hundred and No/100 Dollars ($51,300.00)
[which represents a rate of $9.50 per rentable square foot of the Premises],
payable in equal monthly installments of Four Thousand Two Hundred Seventy-Five
and No/100 dollars ($4,275.00) each in advance on or before the first day of
each month. In addition, Minimum Rental shall be increased annually, beginning
on the first anniversary of the Adjustment Date and continuing on each
anniversary of same thereafter, by an amount equal to three percent (3%) of the
Minimum Rental for the immediately preceding twelve (12) month period. For
purposes hereof, if the Commencement Date is a date other than the first day of
a calendar month, the Minimum Rental shall be prorated daily from such date to
the first day of the next calendar month and paid on the Commencement Date.
(b) Additional Rental. [Intentionally Deleted]
(c) Tenant's Share of Taxes.
Tenant shall pay an amount equal to Tenant's "proportionate share" of
any ad valorem taxes (or any tax hereafter imposed in lieu thereof) imposed upon
the Building and the Premises. Tenant's "proportionate share" of the taxes, the
insurance premiums and common area maintenance costs, as described below, shall
be a fraction, the numerator of which shall be the number of rentable square
feet within the Premises and the denominator of which shall be the number of
rentable square feet within the Building, which is currently estimated to be
32,713 rentable square feet. Tenant's proportionate share of taxes shall be paid
as provided in subparagraph (f) below. Provided, any increase in ad valorem
taxes on the Premises as a result of alterations, addition or improvements made
by, for or on account of Tenant shall be
reimbursed by Tenant to Landlord within thirty (30) days after receipt of
written demand therefor.
(d) Tenant's Share of Insurance Premiums.
Tenant shall pay an amount equal to Tenant's "proportionate share" of
any premiums charged for fire and extended coverage and liability insurance with
all endorsements carried by Landlord on the Building payable for any calendar
year (including any applicable partial calendar year), provided such premiums
are not a direct result of another tenant's use of its premises in the Building.
Tenant's proportionate share of premiums shall be paid as provided in
subparagraph (f) below.
(e) Tenant's Share of Common Area Operating and Maintenance Costs.
Tenant shall pay an amount equal to Tenant's "proportionate share" of
the reasonable costs for operating and maintaining the Building's common areas,
including, but not limited to, building management (such management fees to be
consistent with customary fees in the Raleigh/Durham area), the cost of grass
mowing, shrub care and general landscaping, irrigation systems, maintenance and
repair to parking and loading areas, driveways, sidewalks, exterior lighting,
garbage collection and disposal, common water and sewer, common plumbing, common
signs and other facilities shared by the various tenants in the Building, and of
the Building's share of the common area operating and maintenance costs for the
entire Business Park (including without limitation a general Business Park fee).
Landlord shall use good faith efforts to keep the operating and maintenance
costs in line with costs for other similarly situated buildings in the
Raleigh/Durham market, taking into account rent and other relevant factors.
Tenant's proportionate share shall be paid as provided in subparagraph (f)
below. For purposes hereof, the expenses identified in subparagraphs (c), (d)
and (e) of this Section shall be deemed the "Tenant Expenses."
(f) Payment of Proportionate Shares.
Tenant shall pay to Landlord each month, along with Tenant's
installments of Minimum Rental (and Additional Rental, if applicable) a sum
equal to one-twelfth (1/12) of the amount estimated by Landlord (in its
reasonable discretion) as Tenant's proportionate share of the taxes, insurance
premiums and common area maintenance costs (including the Business Park fee) for
each calendar year. For the first calendar year beginning with January 1, 1998,
the amount of Tenant's estimated proportionate share of all Tenant Expenses
shall be Eight Thousand One Hundred and No/100 Dollars ($8,100.00) [which
represents $1.50 per rentable square foot of the Premises], payable in advance
in equal monthly installments of Six Hundred Seventy-Five and No/100 Dollars
($675.00). Landlord will make reasonable efforts to provide Tenant with
Landlord's estimate of Tenant's proportionate share of Tenant Expenses for the
upcoming calendar year on or before December 15 of each calendar year during the
term hereof. If Landlord fails to notify Tenant of Tenant's revised
proportionate share of Tenant Expenses by such date, Tenant shall continue to
pay the monthly installments of the proportionate share amount, if any, last
payable by Tenant until notified by Landlord of such new estimated amount.
No later than May 1 of each calendar year from the Term, Landlord shall deliver
to Tenant a reasonably detailed written statement setting forth the actual
amount of Tenant's proportionate shares for taxes, insurance premiums and all
common area maintenance costs for the preceding calendar year. Tenant shall pay
the total amount of any balance due shown on such statement within thirty (30)
days after its delivery. In the event such annual costs decrease for any such
year, Landlord shall, within thirty (30) days after delivery of such written
statement, reimburse Tenant for any overage paid and the monthly rental
installments for the next period shall be reduced accordingly, but not below the
Minimum Rental. For the calendar year in which this Lease commences, the
proportionate shares of such amounts shall be prorated from the Commencement
Date through December 31 of such year. Further, Tenant shall be responsible for
payment of its proportionate share of Tenant Expenses for the calendar year in
which the Term expires, prorated from January 1 thereof through the Expiration
Date. Tenant shall pay any unpaid estimated proportionate shares within thirty
(30) days after the Expiration Date, which estimate shall be made by Landlord
based upon actual and estimated costs for such year. After the exact amount
payable for such proportionate shares shall have been determined, Landlord shall
return any excess security deposit to Tenant or Tenant shall promptly pay any
deficiency.
Tenant may audit Landlord's records and all information pertaining to
Tenant Expenses in order to verify the accuracy of Landlord's determination of
Tenant's proportionate share of same provided that:
(i) Tenant must give notice to Landlord of its election to undertake
said audit within one hundred twenty (120 days after receipt of the statement of
the actual amount of Tenant's proportionate share for the preceding calendar
year from Landlord;
(ii) Such audit will be conducted only during regular business hours at
the office where Landlord maintains records of Tenant Expenses and only after
Tenant gives Landlord fourteen (14) days' advance written notice;
(iii) Tenant shall deliver to Landlord a copy of the results of such
audit within fifteen (15) days of its receipt by Tenant and no such audit shall
be conducted if any other tenant of the Building has conducted an independent
audit for the time period Tenant intends to audit and Landlord furnishes to
Tenant a copy of the results of such audit;
(iv) No audit shall be conducted at any time that Tenant is in default
of any of the terms of this Lease;
(v) No subtenant shall have any right to conduct an audit and no
assignee shall conduct an audit for any period during which such assignee was
not in possession of the Premises; and
(vi) Such audit review by Tenant shall not postpone or alter the
liability and obligation of Tenant to pay any amounts due under the terms of
this Lease.
Within thirty (30) days after Tenant's receipt of such audit, Tenant
must give notice to Landlord of any disputed amounts and identify all items
being contested in Landlord's statement of Tenant's proportionate share of
Tenant Expenses. If Landlord and Tenant cannot agree upon any such item as to
which Tenant shall have given such notice, the dispute shall be resolved by an
audit by a major accounting firm mutually acceptable to Landlord and Tenant and
the cost of said audit shall be paid by the non-prevailing party; provided
however, Tenant will not be considered the "prevailing party" for purposes of
this paragraph unless the accounting firm's audit reveals an overcharge by
Landlord in excess of five percent (5%) of Tenant's proportionate share of
Tenant Expenses for the particular calendar year in question.
Any adjustment required as a result of any audit shall be made by
adjustment to Tenant's proportionate share of Tenant Expenses so that said
adjustment is fully made (or recovered) in equal installments over the twelve
(12) month period immediately following the final resolution of said audit.
(g) Documentary Tax.
Landlord represents that there is currently no documentary stamp tax,
sales tax or any other tax or similar charge (exclusive of any income tax
payable by Landlord as a result hereof) which will be levied on the rental,
leasing or letting of the Premises, however, in the event that any such charge
or tax, whether local, state or federal, becomes applicable to the rental,
leasing or letting of the Premises and is required to be paid due to the
execution hereof or otherwise with respect to this Lease or the payments due
hereunder, the cost thereof shall be borne by Tenant and shall be paid promptly
and prior to same becoming past due. Tenant shall provide Landlord with copies
of all paid receipts respecting such tax or charge promptly after payment of
same.
(h) Late Payment.
If any monthly installment of Minimum Rental, Additional Rental (if
any) or any other sum due and payable pursuant to this Lease remains due and
unpaid ten (10) days after said amount becomes due, Tenant shall pay as
additional rent hereunder a late payment charge equal to the greater of (i) Five
Hundred and No/100 Dollars (500.00) or (ii) a sum equal to three percent (3%) of
the unpaid rent or other payment; provided, however, subject to Tenant's not
being in default hereunder, Tenant shall be entitled to one (1) additional ten
(10) day grace period per Lease Year during which Tenant may make such payment
without paying the late charge as hereinabove described. All unpaid rent and
other sums of whatever nature owed by Tenant to Landlord under this Lease shall
bear interest from the tenth (10th) day after the due date thereof until paid at
the lesser of two percent (2%) per annum above the "prime rate" as published in
the Wall Street Journal from time to time (the "Prime Rate"). Acceptance by
Landlord of any payment from Tenant hereunder in an amount less than that which
is currently due shall in no way affect Landlord's rights under this Lease and
shall in no way constitute an accord and satisfaction.
4. DELIVERY AND UPFITTING OF PREMISES.
Landlord shall deliver the Premises to Tenant in its base building
condition on or before December 1, 1997. Tenant agrees that it is accepting the
Premises in its "as is" base building condition without any further improvements
thereto by Landlord. Tenant agrees to deliver the final plans and specifications
for the design and upfitting of the Premises (the "Plans") to Landlord for
Landlord's approval. Landlord shall not unreasonably withhold or delay its
approval of such of the Plans and agrees to provide Tenant with notice of any
objections to the Plans within twenty (20) days after Landlord's receipt of
same. At such time as Landlord approves the Plans, Landlord shall identify those
improvements described in the Plans which must be removed from the Premises upon
the expiration or earlier termination of this Lease as herein described;
provided, however, Landlord reserves the right to subsequently direct Tenant to
leave certain items previously designated for removal in the Premises. Upon
approval by Landlord of the Plans, they shall be attached as Exhibit C to this
Lease and made a part hereof. Once the Plans have been approved by Landlord,
tenant shall be responsible for the installation of the Tenant Improvements (as
hereinafter defined) in the Premises in accordance with the Plans. The general
contractor retained by Tenant to install the Tenant Improvements shall be
subject to Landlord's prior written approval, such approval not to be
unreasonably withheld, conditioned or delayed; provided further, Landlord and
Tenant shall mutually designate up to five (5) general contractors which shall
be deemed approved by Landlord.
Tenant will supervise the design, construction and installation of the
initial improvements in the Premises (the "Tenant Improvements") in accordance
with the Plans at Tenant's sole cost and expense. Landlord agrees to pay Tenant
at the time and in the manner set forth below an allowance (the "Tenant
Improvement Allowance") in the amount of Twenty-Two and No/100 Dollars ($22.00)
per rentable square foot of the Premises to cover the costs associated with the
design, construction and installation of the Tenant Improvements in the
Premises. Upon receipt of evidence from Tenant that such amounts have been
expended in connection with the design, construction and installation of the
Tenant Improvements (together with such other information as Landlord may
reasonably request from Tenant), Landlord shall, within twenty (20) days of
Landlord's receipt of such documentation, pay to Tenant the amount of all cost
and expenses shown thereby less the amount of any such payment or payments
previously made by Landlord to Tenant; provided, however, such disbursements of
the Tenant Improvement Allowance shall occur not more frequently than monthly
and the aggregate amount of all sums to be paid by Landlord to Tenant hereunder
with respect to the Premises shall not in any event exceed the sum of One
Hundred Eighteen Thousand Eight Hundred and No/100 Dollars ($118,800.00);
provided further, that Landlord shall have no obligation hereunder to make any
payment with respect to any such improvement which, when made, shall not be a
fixture and thus part of the Building to be surrendered to Landlord upon the
expiration of or earlier termination of this Lease (for purposes of this
Paragraph 4, all telephone, telecommunications and computer wiring equipment
shall be deemed a fixture). All savings or unused portions of the Tenant
Improvement Allowance shall be retained by Landlord.
In connection with the upfitting of the Premises, Tenant agrees to pay
Landlord a construction management fee equal to four percent (4%) of the total
cost of constructing the Tenant Improvements. In addition to the Tenant
Improvements, Tenant shall be solely responsible for the cost of constructing
any demising wall(s) required by Landlord and any
required suite entrances or at Landlord's election, Landlord may proceed to
construct such demising wall(s) and reduce the Tenant Improvement Allowance by
the reasonable cost of same.
Notwithstanding anything contained herein to the contrary, upon the
expiration or earlier termination of the Term or Tenant's vacating the Premises,
Tenant shall, at its sole cost and expense, restore the Premises to its "base
building condition," which for purposes hereof, shall be defined as the
condition of the Premises as it existed when received by Tenant together with
such other Tenant Improvements as Landlord has approved as hereinabove provided
(ordinary wear and tear, damage by fire and other casualty, condemnation and
acts of God above excepted), or otherwise directs be left at the Premises;
provided, however, Tenant's restoration obligations with respect to the slab
floor in the Premises shall be limited to restoring the floor to a level slab of
commercially reasonable tolerances (i.e. one-eighth of an inch per ten feet).
Within ten (10) business days after Tenant's request for same (such request to
be made no earlier than sixty (60) days prior to the expiration or earlier
termination of the Term), Landlord shall provide Tenant with a list of those
Tenant Improvements which Landlord directs be left at the Premises upon the
expiration of the Term.
5. ALTERATIONS AND IMPROVEMENTS BY TENANT.
Tenant shall make no structural changes respecting the Premises or the
Building and shall make no changes of any kind respecting the Premises or the
Building that are visible from the exterior of the Premises without Landlord's
consent, to be granted or withheld in Landlord's sole discretion. Except for the
initial upfitting of the Premises in accordance with the Plans, any other
nonstructural changes or other alterations, additions, or improvements to the
Premises shall be made by or on behalf of Tenant only with the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed. All alterations, additions or improvements, including without
limitation all partitions, walls, railings, carpeting, floor and wall coverings
and other fixtures (excluding, however, Tenant's trade fixtures as described in
the paragraph entitled "Trade Fixtures and Equipment" below) made by, for, or at
the direction of Tenant shall, when made, become the property of Landlord, at
Landlord's sole election, and shall, unless otherwise specified by Landlord at
the time Landlord gives its consent thereto, remain upon the Premises at the
expiration or earlier termination of this Lease.
Notwithstanding anything contained herein to the contrary, all
alterations and improvements undertaken by Tenant shall be consistent with the
then-existing quality, color scheme (where appropriate), general aesthetic
appearance and tenor of the balance of the Building and, in any event, Landlord
may withhold its consent to any proposed alteration or improvement by Tenant
unless Tenant agrees to remove said improvement at the end of the Term and/or
restore the Premises to the condition in which it existed prior to the
undertaking of the proposed alteration or improvement.
6. USE OF PREMISES
(a) Tenant shall use the Premises only for office, warehouse, storage
and light assembly and or laboratory purposes, all of which shall be consistent
with the pharmaceutical
industry or similar scientific, research or technical industry and for no other
purposes. Tenant shall comply with all laws, ordinances, orders, regulations or
zoning classifications or any lawful governmental authority, agency or other
public or private regulatory authority (including insurance underwriters or
rating bureaus) having jurisdiction over the Premises. Tenant shall not do any
act or follow any practice relating to the Premises which shall constitute a
nuisance or detract in any way from the reputation of the Building as a real
estate development comparable to other comparable buildings in the
Raleigh/Durham market taking into account rent and other relevant factors.
Tenant's duties in this regard shall include allowing no noxious or offensive
odors, fumes, gases, smoke, dust, steam or vapors, or any loud or disturbing
noise or vibrations to originate in or emit from the Premises.
(b) Without limiting the generality of (a) above, and excepting only
(i) office supplies and cleaning materials used by Tenant in its ordinary day to
day business operations (but not held for sale, storage or distribution) and
customarily used in facilities such as the Building, and (ii) certain Hazardous
Materials (as herein defined) used in the ordinary course of Tenant's business,
and then only to the extent used, stored (but not any bulk storage),
transported, and disposed of strictly in accordance with all applicable laws,
regulations and manufacturer's recommendations and in a manner consistent with
commercially reasonable standards for comparable first-class flex-space
buildings, the Premises shall not be used for the treatment, storage,
transportation to or from, use or disposal of toxic or hazardous wastes,
materials, or substances, or any other substance that is prohibited, limited or
regulated by any governmental or quasi-governmental authority or that, even if
not so regulated, could or does pose a hazard to health and safety of the
occupants of the Building or surrounding property (collectively "Hazardous
Substances"). Prior to its occupancy of the Premises, Tenant shall provide
Landlord with a list of any Hazardous Substances which it plans to introduce to
the Premises and thereafter, on each anniversary of the Commencement Date,
Tenant shall update said list and identify which Hazardous Substances have been
used within the Premises and which Hazardous Substances may be used within the
Premises in the future. In addition, prior to Tenant's occupancy of the
Premises, Tenant shall submit a plan detailing the method of disposal, storage
and treatment of such Hazardous Substances to Landlord for Landlord's approval.
Tenant shall be liable for, and shall indemnify and hold Landlord harmless from,
all costs, damages and expenses (including reasonable attorney's fees) incurred
in connection with the use, storage, discharge or disposal of any Hazardous
Substances by Tenant or Tenant's Invitees.
(c) Except for possible restrictions with respect to signage (which
Tenant agrees to abide by in connection with its use of the Premises), there are
currently no restrictive covenants relating to the Building.
(d) Tenant shall exercise due care in its use and occupancy of the
Premises and shall not commit or allow waste to be committed on any portion of
the Premises; and at the expiration or earlier termination of this Lease, Tenant
shall deliver the Premises to Landlord in as good condition on the date of
completion of the Tenant Improvements in the Premises, ordinary wear and tear,
fire or other casualty, condemnation and acts of God alone excepted.
(e) Tenant shall save Landlord harmless from any claims, liabilities,
penalties, fines, costs, expenses or damages resulting from the failure of
Tenant to comply with the provisions of this paragraph 6. This indemnification
shall survive the termination or expiration of this Lease.
7. TAXES ON LEASE AND TENANT'S PROPERTY.
(a) Landlord represents that there are currently no taxes, documentary
stamps or assessments of any nature which will be imposed or assessed upon this
Lease, Tenant's occupancy of the Premises or Tenant's trade fixtures, equipment,
machinery, inventory, merchandise or other personal property located on the
Premises and owned by or in the custody of Tenant; provided, however, in the
event any such charge or tax becomes applicable to this Lease, Tenant's
occupancy of the Premises or Tenant's equipment, Tenant shall be fully
responsible for the payment of same and shall pay such amount as promptly as all
such taxes or assessments may become due and payable without any delinquency.
(b) Landlord shall pay, subject to reimbursement from Tenant as
provided in the paragraph entitled "Rental" of this Lease, all ad valorem
property taxes which are now or hereafter assessed upon the Building and the
Premises, except as otherwise expressly provided in this Lease.
8. FIRE AND EXTENDED COVERAGE INSURANCE.
Landlord shall maintain and pay for fire and casualty special form "all
risk" insurance, with extended coverage, covering the Building equal to at least
eighty percent (80%) of the replacement cost thereof. Tenant shall not do or
cause to be done or permit on the Premises or in the Building anything deemed
extra hazardous on account of fire and Tenant shall not use the Premises or the
Building in any manner which will cause an increase in the premium rate for any
insurance in effect on the Building or a part thereof. If, because of anything
done, caused to be done, permitted or omitted by Tenant or Tenant's Invitees,
the premium rate for any kind of insurance in effect on the Building or any part
thereof shall be raised, Tenant shall pay Landlord on demand the amount of any
such increase in premium which Landlord shall pay for such insurance and if
Landlord shall demand that Tenant remedy the condition which caused any such
increase in an insurance premium rate, Tenant shall remedy such condition within
five (5) days after receipt of such demand or such reasonable time thereafter as
is possible, provided Tenant has commenced such cure and is diligently pursuing
the completion of same. Tenant shall maintain and pay for all fire and extended
coverage insurance on its contents in the Premises, including trade fixtures,
equipment, machinery, merchandise or other personal property belonging to or in
the custody of Tenant.
Notwithstanding anything herein to the contrary, Landlord reserves the
right for itself, successors and assigns to self-insure against any risk
required hereunder to be insured or otherwise assumed by Landlord so long as any
such program of self-insurance affords the same coverage of risks and benefits
which would be afforded in the event Landlord procured insurance from a
third-party insurer.
9. LANDLORD'S COVENANT TO REPAIR AND REPLACE.
(a) During the Term, Landlord shall be responsible only for repairs or
replacements to the roof, exterior walls (including downspouts and gutters),
structural members (including foundation and subflooring of the Premises) and
for the central plumbing and electrical systems serving the entire Building up
to the respective applicable points of entry of same into the Premises except
for repairs or replacements caused by the negligent acts or omissions or
misconduct of Tenant or Tenant's Invitees unless such amounts are paid to
Landlord pursuant to an insurance policy. Landlord shall maintain such items in
compliance with applicable laws, regulations, ordinances and codes or
alternatively, any non-compliance shall not materially impair Tenant's use and
enjoyment of the Premises or constitute a threat or danger to the health or
safety of Tenant or Tenant's Invitees. Landlord's repairs and replacements shall
be made as soon as reasonably possible using due diligence and reasonable
efforts, taking into account in each instance all circumstances surrounding the
repair or replacement including without limitation, the materiality of the
repair or replacement to Tenants use and operation of its business within the
Premises and the relation thereof to the enjoyment of same. If Landlord cannot,
using due diligence, complete its repairs within one hundred eighty (180) days
after written notice from Tenant, then (unless the need for such repairs or
replacements is the result of the negligent acts or omissions or misconduct of
Tenant or Tenant's Invitees, in which event Tenant shall not be entitled to
terminate this Lease) either party may terminate this Lease effective upon
thirty (30) days' prior written notice, without prejudice to Landlord's rights
to receive payment from Tenant for uninsured damages caused directly or
indirectly by Tenant or Tenant's Invitees. If the need for such repairs or
replacements is the result of the negligent acts or omissions or misconduct of
Tenant or Tenant's Invitees, and the expense of such repairs or replacements are
not fully covered and paid by Landlord's insurance, then Tenant shall pay
Landlord the full amount of expenses not covered. Landlord's duty to repair or
replace as prescribed in this paragraph shall be Tenant's sole remedy and shall
be in lieu of all other warranties or guaranties of Landlord, express or
implied; provided, however, in the event Landlord fails to fulfill its
obligations under this Paragraph 9(a) with respect to a leak in the roof of the
Premises within thirty (30) days (or such longer period as may be required in
the exercise of due diligence) following receipt of written notice of such
failure to perform from Tenant, Tenant shall be entitled to hire a contractor
reasonably acceptable to Landlord to make the necessary repair or replacement to
the roof of the Premises, provided such activities shall not in any way void or
negatively impact Landlord's warranty on the roof of the Premises or the
Building, and thereafter, to the extent not reimbursed to Tenant within fifteen
(15) days after demand therefor, Tenant may pursue an action against Landlord
for collection of the actual costs of such repair or replacement to the extent
same is an obligation of Landlord hereunder.
(b) Landlord shall not be liable for any failure to make any repairs or
to perform any maintenance required of Landlord hereunder unless such failure
shall persist for an unreasonable period of time after written notice from
Tenant setting forth the need for such repair(s) or replacement(s) in reasonable
detail has been received by Landlord. Except as set forth in the paragraph of
this Lease, entitled "Damage or Destruction of Premises", there shall be no
abatement of rent. Except to the extent of the negligent acts or omissions or
misconduct of Landlord or Landlords Invitees, there shall be no liability of
Landlord by reason of any injury to
or interference with Tenant's business arising from the making of any repairs,
replacements, alterations or improvements to any portion of the Building or the
Premises, or to fixtures, appurtenances and equipment therein. To the extent
permitted under applicable law, Tenant waives the right to make repairs at
Landlord's expense under any law, statute or ordinance now or hereafter in
effect.
10. TENANT'S COVENANT TO REPAIR.
Tenant shall be responsible for the repair, replacement and maintenance
in good order and condition of all parts and components of the Premises (other
than those specified for repair, replacement and maintenance by Landlord above),
including without limitation the plumbing, wiring, electrical systems, HVAC
system, glass and plate glass, equipment and machinery constituting fixtures,
unless such repairs or replacements are required as a result of the negligence,
misconduct or intentional acts or omissions of Landlord, its agent(s) ,
employee(s) or invitee(s) in which event Landlord shall be responsible for such
repairs. At the end of the Term, Tenant shall return the Premises to Landlord in
as good condition as they were when received, excepting only normal wear and
tear, acts of God, repairs required to be made by Landlord hereunder and damage
by fire and other casualty and condemnation (but only to the extent any casualty
proceeds applicable to the Tenant Improvements are paid over to Landlord).
Tenant's duty to maintain the HVAC system shall specifically include the duty to
enter into and maintain at Tenant's sole expense during the entire term of this
Lease a contract for the routine and periodic maintenance and regular inspection
of such HVAC system, the replacement of filters as recommended and the
performance of other recommended periodic servicing in accordance with
applicable manufacturer's standards and recommendations. Such contract: (a)
shall be with a reputable contractor reasonably satisfactory to Landlord; (b)
shall satisfy the requirements for routine and periodic maintenance, if any,
necessary to keep all applicable manufacturer's warranties in full force and
effect; and (c) shall provide that in the event this Lease expires or is earlier
terminated for any reason whatsoever that said contract shall be immediately
terminable by Landlord or Tenant without any cost, expense or other liability on
the part of Landlord.
11. TRADE FIXTURES AND EQUIPMENT.
Prior to installation, Tenant shall furnish to Landlord notice of all
trade fixtures and equipment of a permanent nature which it intends to install
within the Premises and the installation of same shall be subject to Landlord's
consent which shall not be unreasonably withheld, condition or delayed. Any
trade fixtures and equipment installed in the Premises at Tenant's expense and
identified by Tenant in notice to Landlord shall remain Tenant's personal
property and Tenant shall have the right at any time during the Term to remove
such trade fixtures and equipment. Upon removal of any trade fixtures or
equipment, Tenant shall immediately restore the Premises to substantially the
same condition in which it existed when received by Tenant, ordinary wear and
tear, condemnation damage by fire and other casualty and acts of God alone
excepted. Any trade fixtures not removed by Tenant at the expiration or an
earlier termination of the Lease shall, at Landlord's sole election, either (i)
become the property of Landlord, in which event Landlord shall be entitled to
handle and dispose of same in any manner Landlord deems fit without any
liability or obligation to Tenant or any other third party
with respect thereto, or (ii) be subject to Landlord's removing such property
from the Premises and storing same, all at Tenant's expense and without any
recourse against Landlord with respect thereto. Without limiting the generality
of the foregoing, the following property shall in no event be deemed to be
"trade fixtures" and Tenant shall not remove any such property from the Premises
under any circumstances, regardless of whether installed by Landlord or Tenant:
(a) any air conditioning, air ventilating or heating fixtures or equipment; (b)
any lighting fixtures or equipment; (c) any carpeting or other permanent floor
coverings; (d) any paneling or other wall covering; (e) plumbing fixtures and
equipment; or (f) permanent shelving. Landlord hereby waives any lien interest
which it may have in Tenant's personal property; provided, however, and
notwithstanding anything contained herein to the contrary, in no event may
Tenant encumber or otherwise impair Landlord's title to the Premises, the
Building or the Building's common areas through the financing or any personal
property within the Premises of any other activities.
12. UTILITIES.
Tenant shall pay for all utilities or services related to its use of
the Premises including without limitation electricity, gas, heat, water, sewer,
telephone and janitorial services. To the extent that water and/or sewer usage
are not separately metered for the Premises, Tenant shall pay its proportionate
share of the applicable charges therefor, with such proportionate share being as
defined in subparagraph 3(c), and the manner for payment thereof shall be as set
forth in subparagraph 3(f). Landlord shall not be responsible for the stoppage
or interruption of utilities services other than as required by its limited
covenant to repair and replace set forth above, nor shall Landlord be liable for
any damages caused by or from the plumbing and sewer systems.
13. DAMAGE OR DESTRUCTION OF PREMISES.
If the Premises are damaged by fire or other casualty, but are not
rendered untenantable for Tenant's business, either in whole or in part,
Landlord shall cause such damage to be repaired without unreasonable delay and
the Annual Rental shall not xxxxx. If by reason of such casualty the Premises
are rendered untenantable for Tenant's business, either in whole or in part,
Landlord shall cause the damage to be repaired or replaced without unreasonable
delay, and, in the interim, the Annual Rental shall be proportionately reduced
as to such portion of the Premises as is rendered untenantable. Any such
abatement of rent shall not, however, create an extension of the Terms.
Provided, however, if by reason of such casualty, the premises are rendered
untenantable in some material portion, and Landlord, in its reasonable
estimation, determines that the amount of time required to repair the damage
using due diligence is in excess of two hundred ten (210) days, then either
party shall have the right to terminate this Lease by giving written notice of
termination within thirty (30) days after the date of casualty, and the Annual
Rental shall xxxxx as of the date of such casualty in proportion to the part of
the Premises rendered untenantable. Notwithstanding the foregoing, in the event
the casualty giving rise to an election to terminate is caused by the
negligence, misconduct or acts of omissions of Tenant or Tenant's Invitees,
Tenant shall have no right to terminate this Lease. Notwithstanding the other
provisions of this paragraph, in the event there should be a casualty loss to
the Premises to the extent of fifty percent (50%) or more of the replacement
value of the Premises or if the Premises is rendered
untenantable for the conduct of Tenant's business operations during the last
Lease year of the Term or any extended term, as determined by Landlord in the
exercise of its reasonable discretion, either party may, at its option,
terminate this Lease by giving written notice within thirty (30) days after the
date of the casualty and the Annual Rental shall xxxxx as of the date of such
notice. Except as provided herein, Landlord shall have no obligation to rebuild
or repair in case of fire or other casualty, and no termination under this
paragraph shall affect any rights of Landlord or Tenant hereunder because of
prior defaults of the other party. Tenant shall give Landlord immediate notice
of any fire or other casualty in the Premises.
14. GOVERNMENTAL ORDERS.
Except as hereinbelow set forth regarding compliance of the physical
structure of the Premises with applicable governmental regulations including
without limitation, compliance with the applicable requirements of the Americans
with Disabilities Act and the implementing regulations (the "ADA") as of the
Commencement Date, Tenant agrees, at its own expense, to comply promptly with
all requirements of any legally constituted public authority that may be in
effect from time to time made necessary be reason of Tenant's use or occupancy
of the Premises. Landlord agrees to comply promptly with any such requirements
if not made necessary by reason of Tenant's use or occupancy. With regard to the
physical structure of the Premises, Landlord agrees to use good faith and due
diligence to undertake those actions that are "readily achievable" (as such term
is defined in the ADA) in order to attempt to bring the physical structure of
the Premises in compliance with the applicable requirements of the ADA in effect
as of the Commencement Date. If it is determined that for any reason Landlord
shall have failed to cause the physical structure of the Premises to be brought
into compliance with the ADA as of the Commencement Date (to at least the
minimum extent required under applicable regulations then in effect), then
Landlord, as its sole obligation, will take the action(s) necessary to cause the
physical structure of the Premises to so comply, and Tenant acknowledges and
agrees that Landlord has and shall have no other obligation or liability
whatsoever to Tenant, or to anyone claiming by or through Tenant, regarding any
failure of the Premises or the activities therein to comply with the applicable
requirements of the ADA. Landlord and Tenant agree, however, that if in order to
comply with any of the above requirements, the cost to Landlord or Tenant, as
the case may be, shall exceed a sum equal to one (1) year's rent, then the party
who is obligated to comply with such requirements is privileged to terminate
this Lease by giving written notice of termination to the other party, which
termination shall become effective sixty (60) days after receipt of such notice,
and which notice shall eliminate the necessity of compliance with such
requirement by the party giving such notice, unless the party receiving such
notice of termination shall, before termination becomes effective, pay to the
party giving notice all costs of compliance in excess of one (1) year's rent, or
secure payment of said sum in a manner satisfactory to the party giving notice.
Notwithstanding anything contained herein to the contrary, it is agreed that:
(a) Tenant is exclusively responsible for all compliance with all requirements
of any legally constituted public authority in the event non-compliance relates
to Tenant's use of, or operations from, the Premises and (b) in the event of
non-compliance for which Landlord is responsible, Landlord shall not be deemed
in breach of this Lease if such non-compliance does not materially impair
Tenant's use of the Premises or threaten or endanger the health or safety of
Tenant or Tenant's Invitees.
15. MUTUAL WAIVER OF SUBROGATION.
For the purpose of waiver of subrogation, the parties mutually release
and waive unto the other all rights to claim damages, costs or expenses for any
injury to property caused by a casualty or any other matter whatsoever in, on or
about the Premises to the extent that such damage, cost or expense has been paid
to such damaged party under the terms of any policy of insurance. All insurance
policies carried with respect to this Lease, if permitted under applicable law,
shall contain a provision whereby the insurer waives, prior to loss, all rights
of subrogation against either Landlord or Tenant.
16. SIGNS AND ADVERTISING.
(a) Tenant may install, in Tenant's sole discretion and at Tenant's
sole cost and expense, a tenant identification sign in accordance with Building
standards, such sign to be located at or near the Tenant's front entrance to the
Premises within the Building; provided, however, Tenant shall install, at a
minimum, the suite numerals of the Premises in accordance with Building
standards at or near the front entrance to the Premises within the Building. The
Tenant Improvement Allowance shall be reduced by an amount equal to any costs
incurred by Landlord in preparing or installing Tenant identification signage or
graphics on or within the Building or the Premises.
(b) In order to provide architectural control for the Building and
Business Park, Tenant shall not install any exterior signs, marquees,
billboards, outside lighting fixtures and/or other decorations on the Premises.
Landlord shall have the right to remove any such sign or other decoration and
restore fully the Premises at the cost and expense of Tenant if any such
exterior work is done without Landlord's prior written approval, which approval
Landlord shall be entitled to withhold or deny in its sole discretion. Tenant
shall not permit, allow or cause to be used in, on or about the Premises any
sound production devices, mechanical or moving display devices, bright lights,
or other advertising media, the effect of which would be visible or audible from
the exterior of the Premises.
17. INDEMNIFICATION AND LIABILITY INSURANCE.
(a) Except to the extent of the negligent acts or omissions or
misconduct of Landlord or Landlord's Invitees, Tenant shall indemnify and save
Landlord harmless against any and all claims, suits, demands, actions, fines,
damages, and liabilities, and all costs and expenses thereof (including without
limitation reasonable attorneys' fees) arising out of injury to persons
(including death) or tangible property occurring in, on or about, or arising out
of the Premises or other areas in the Building if caused or occasioned wholly or
in part by any act(s) or omission(s) of Tenant or Tenant's Invitees, except if
caused by any act(s) or omission(s) on the part of Landlord. The non-prevailing
party shall also pay all costs, expenses and reasonable attorneys' fees that may
be incurred by the prevailing party in enforcing the agreements of this Lease,
whether incurred as a result of litigation or otherwise. Tenant shall give
Landlord immediate notice of any such happening causing injury to persons or
tangible property.
(b) At all times during the term of this Lease, Tenant shall at its own
expense keep in force adequate public liability insurance under the terms of a
commercial general liability policy (occurrence coverage) in the amount of not
less than Two Million and No/100Dollars ($2,000,000.00) single limit with such
company(ies) as shall from time to time be reasonably acceptable to Landlord
(and to any lender having a mortgage interest in the Premises) and naming
Landlord and Landlord's agent as an additional insured (and, if requested by
Landlord from time to time, naming Landlord's mortgagee as an additional
insured). Such insurance shall include, without limitation, personal injury and
contractual liability coverage for the performance by Tenant of the Indemnity
agreements set forth in this Lease. Tenant shall first furnish to Landlord
certificates of insurance evidencing the required coverage prior to the Commence
Date and thereafter prior to each policy renewal date. All policies required of
Tenant hereunder shall contain a provision whereby the insurer is not allowed to
cancel or change materially the coverage without first giving thirty (30) days'
written notice to Landlord.
(c) Landlord shall keep in force during the Term insurance in such
amounts and coverages as Landlord deems appropriate or is otherwise required of
Landlord by a third party such as its lender.
18. LANDLORD'S RIGHT OF ENTRY.
Landlord, and those persons authorized by it, shall have the right to
enter the Premises at all reasonable times and upon reasonable notice for the
purposes of making repairs, making connections, installing utilities, providing
services to the Premises or for any other tenant, making inspections or showing
the same to prospective purchasers and/or lenders (at any time during the Term
hereof), or prospective tenants (during the last nine (9) months of the Term) as
well as at any time in the event of emergency involving possible injury to
property or persons in or around the Premise or the Building.
19. EMINENT DOMAIN.
If any substantial portion of the Premises is taken under the power of
eminent domain (including any conveyance made in lieu thereof) or if such taking
shall materially impair the normal operation of Tenant's business, then either
party shall have the right to terminate this Lease by giving written notice of
such termination within thirty (30) days after such taking. If neither party
elects to terminate this lease, Landlord shall repair and restore the Premises
to the best possible tenantable condition and the Annual Rental shall be
proportionately and equitably reduced as of the date of the taking. All
compensation awarded for any taking (or the proceeds of a private sale in lieu
thereof) shall be the property of Landlord whether such award is for
compensation for damages to the Landlord's or Tenant's interest in the Premises,
and Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, Landlord shall not have any interest in any separate award
made to Tenant for loss of business, moving
expense or the taking of Tenant's trade fixtures or equipment if a
separate award for such items is made to Tenant and if such separate award does
not reduce the award to Landlord.
20. EVENTS OF DEFAULT AND REMEDIES
(a) Upon the occurrence of any one or more of the following events (the
"Events of Default," any one an "Event of Default"), the party not in default
shall have the right to exercise any rights or remedies available in this Lease,
at law or in equity. Events of Default shall be:
(i) Tenant's failure to pay an Annual Rental payable hereunder
within five (5) days after same becomes due; provided, however, Tenant
shall be entitled to written notice and a five (5) day cure period with
respect to its failure to pay any Annual Rent once during each Lease
Year;
(ii) Tenant's failure to pay any other sum of money payable
hereunder within ten (10) days after written notice thereof from
Landlord of a deficiency in such payment;
(iii) Failure by either party to perform any other of the
terms, covenants or conditions contained in this Lease if not remedied
within thirty (30) days after receipt of written notice thereof, or if
such default cannot be remedied within such period, such party does not
within thirty (30) days after written notice thereof commence such act
or acts as shall be necessary to remedy the default and shall not
thereafter diligently prosecute such cure and complete such act or acts
within ninety (90) days after written notice thereof;
(iv) Tenant shall become bankrupt or insolvent, or file any
debtor proceedings, or file pursuant to any statute a petition in
bankruptcy or insolvency or for reorganization, or file a petition for
the appointment of a receiver or trustee for all or substantially all
of Tenant's assets and such petition or appointment shall not have been
set aside within sixty (60) days from the date of such petition or
appointment, or if Tenant makes an assignment for the benefit of
creditors, or petitions for or enters into an arrangement; or
(v) Tenant allows its leasehold estate to be taken under any
writ of execution and such writ is not vacated or set aside within
thirty (30) days.
(b) In addition to its other remedies, Landlord, upon an Event of
Default by Tenant, shall have the immediate right, after any applicable grace
period expressed herein, to terminate and cancel this Lease and/or terminate
Tenant's right of possession, and, in accordance with applicable laws, to
reenter and remove all persons and properties from the Premises and dispose of
such property as it deems fit, all without being guilty of trespass or being
liable for any damages caused thereby. If Landlord reenters the Premises, it may
either terminate this Lease or, from time to time without terminating this
Lease, terminate Tenant's right of possession and make such alterations and
repairs as may be necessary or appropriate to relet the Premises and
relet the Premises upon such commercially reasonable terms and conditions as
Landlord deems advisable without any responsibility on Landlord whatsoever to
account to Tenant for any surplus rents collected. No retaking of possession of
the Premises by Landlord shall be deemed as an election to terminate this Lease
unless a written notice of such intention is given by Landlord to Tenant at the
time of reentry; but, notwithstanding any such reentry or reletting without
termination, Landlord may at any time thereafter elect to terminate for such
previous default. In the event of an elected termination by Landlord, whether
before or after reentry, Landlord may recover from Tenant damages, including the
costs of recovering the Premises and any costs incurred in reletting the
Premises, and Tenant shall remain liable to Landlord for the total Annual Rental
(which may at Landlord's election be accelerated to be due and payable in full
as of the Event of Default and recoverable as damages in a lump sum) as would
have been payable by Tenant hereunder for the remainder of the term less the
rentals actually received from any reletting or, at Landlord's election, less
the reasonable rental value of the Premises for the remainder of the term. In
determining the Annual Rental which would be payable by Tenant subsequent to
default, the Annual Rental for each Lease Year of the unexpired term shall be
equal to the Annual Rental payable by Tenant for the last Lease Year prior to
the default. If any rent owing under this Lease is collected by or through an
attorney, Tenant agrees to pay Landlord's reasonable attorneys' fees to the
extent allowed by applicable law. Landlord shall be required to reasonably
mitigate its damages.
21. SUBORDINATION.
This Lease is subject and subordinate to any and all mortgages or deeds
of trust currently existing on the property of which the Premises is a part, and
this clause shall be self-operative without any further instrument necessary to
effect such subordination; however, if requested by Landlord, Tenant shall
promptly execute and deliver to Landlord any such certificate(s) in a
commercially reasonable form as Landlord may reasonably request evidencing the
subordination of this Lease to or the assignment of this Lease as additional
security for such mortgages or deeds of trust; provided, further, upon Tenant's
request, Landlord shall use reasonable efforts to obtain a non-disturbance
agreement in a commercially reasonable form from any such mortgagee, trustee or
beneficiary currently having an interest in all or any portion of the Premises.
Subject to the condition precedent that Landlord provide Tenant with a
non-disturbance agreement in a commercially reasonable form in favor of Tenant
from any mortgagee, trustee or beneficiary this Lease shall be subject and
subordinate to any mortgage or deed of trust which may hereafter encumber the
property of which the Premises is a part. Tenant's obligations under this Lease
shall continue in full force and effect notwithstanding any such default
proceedings under a mortgage or deed of trust and shall attorn to the mortgagee,
trustee or beneficiary of such mortgage or deed of trust, and their successors
or assigns, and to the transferee under any foreclosure or default proceedings
and subject to the terms of the non-disturbance agreement, the mortgagee,
trustee or beneficiary or their successors or assigns shall be bound by all of
the obligations of Landlord under this Lease which accrue after such foreclosure
or default proceeding. Tenant will, upon request by Landlord, execute and
deliver to Landlord or to any other person designated by Landlord, any
instrument or instruments in a commercially reasonable form required to give
effect to the provisions of this paragraph.
22. ASSIGNING AND SUBLETTING.
Tenant shall not assign, sublet, mortgage, pledge or encumber this
Lease, the Premises, or any interest in the whole or in any portion thereof,
directly or indirectly, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. In the event
of any assignment, sublease, mortgage, pledge or encumbrance, Tenant shall: (i)
remain primarily liable for the performance of all terms of this Lease, (ii) pay
all reasonable costs, including without limitation, attorney's fees, incurred by
Landlord in connection with such assignment, sublease or mortgage, and (iii) pay
to Landlord fifty percent (50%) of any rental or any fees or charges received by
Tenant (less the actual, reasonable expenses incurred by Tenant in connection
with such reletting as evidenced by written receipts thereof) in excess of the
Annual Rental payable to Landlord hereunder as further rental under this Lease.
Landlord's consent to one assignment or sublease will not waive the requirement
of its consent to any subsequent assignment or sublease as required herein. Upon
notice to Landlord of a proposed sublease or assignment of all or any portion of
the Premises for the balance of the Term (the "Proposed Space"), Landlord shall
have the option within fifteen (15) days after its receipt of such notice, to
terminate this Lease with respect to the Proposed Space, whereupon the parties
hereto shall have no further rights or liabilities with respect to the Proposed
Space except as otherwise expressly set forth herein. Tenant may assign or
sublet all or any portion of the Premises upon ten (10) days advance written
notice to Landlord (but without Landlord's consent), to an entity controlled by
Tenant or which controls Tenant or in connection with a merger, consolidation,
corporate reorganization, or a sale of all or substantially all of its assets,
provided that the new controlling entity has a consolidated net worth greater
than or equal to Tenant's consolidated net worth at the time of the proposed
transfer.
In the event of a proposed assignment of this Lease or subletting of
all or a part of the Premises, Tenant shall submit to Landlord, in writing, (i)
the name of the proposed assignee or sublessee, (ii) current financial
statements, if any, available to Tenant disclosing the financial condition of
the proposed assignee or subtenant, (iii) the nature of the business of the
proposed assignee or sublessee, and its proposed use of the Premises (any
assignment or subletting being subject to restrictions on use contained in this
Lease, the violation of which by the proposed assignee or sublessee shall
constitute absolute grounds for Landlord's denial of the requested assignment or
subletting, such grounds not being the exclusive grounds for denial under clause
(iii)) and (iv) the proposed commencement date of the assignment or subletting,
together with a copy of the proposed assignment or sublease. Within fifteen (15)
days after its receipt of such notice, Landlord shall either approve or
disapprove such proposed assignment or sublease in writing or give Tenant notice
of its election to terminate this Lease with respect to the Proposed Space (as
hereinabove described).
Notwithstanding anything in this Lease to the contrary, Tenant further
agrees that any assignment or sublease shall be subject to the following
additional limitations: (i) in no event may Tenant assign this Lease or sublet
all or any portion of the Premises to an existing Tenant of the Business Park or
its subtenant or assignee (unless Landlord consents to such assignment or
sublease); (ii) in no event shall the proposed subtenant or assignee be a person
or entity with whom Landlord or its agent is negotiating and to or from whom
Landlord, or its agent, has given
or received any written oral proposal within the past six (6) months regarding a
lease of space in the Business Park; and (iii) Tenant shall not publicly
advertise the rate for which Tenant is willing to sublet the Premises, and all
public advertisements of the assignment of the Lease or sublet of the Premises;
and all public advertisements of the assignment of the Lease or sublet of the
Premises, or any portion thereof, shall be subject to prior written approval by
Landlord, such approval not to be unreasonably withheld or delayed. Said public
advertisement shall include, but not be limited to, the placement or display or
any signs or lettering on the exterior of the Premises or on the glass or any
window or door of the Premises or in the interior of the Premises if it is
visible from the exterior.
23. TRANSFER OF LANDLORD'S INTEREST.
If Landlord shall sell, assign or transfer all or any part of its
interest in the Premises or in this Lease to a successor in interest which
expressly assumes the obligations of Landlord hereunder, the Landlord shall
thereupon be released or discharged from all covenants and obligations
hereunder, and Tenant shall look solely to such successor in interest for
performance of all of Landlord's obligations and such successor shall be
obligated to perform all of Landlord's obligations under this Lease which accrue
after the date of such transfer. Tenant's obligations under this Lease shall in
no manner be affected by Landlord's sale, assignment, or transfer of all or any
part of such interest(s) of Landlord, and Tenant shall thereafter attorn and
look solely to such successor in interest as the Landlord hereunder.
24. COVENANT OF QUIET ENJOYMENT.
Landlord represents that it has full right and authority to lease the
Premises and Tenant shall peacefully and quietly hold and enjoy the Premises for
the full Term hereof, and any extensions or renewals terms, so long as no Event
of Default occurs hereunder.
25. ESTOPPEL CERTIFICATES.
Within twenty (20) days after a request by Landlord, Tenant shall
deliver a written estoppel certificate, in form supplied by or acceptable to
Landlord, certifying any facts that, to the best of Tenant's knowledge, are then
true with respect to this Lease, including without limitation that this Lease is
in full force and effect, that no Event of Default exists on the part of
Landlord or Tenant, that Tenant is in possession, that Tenant has commenced the
payment of rent, and that Tenant claims no defenses or offsets with respect to
payment of rentals under this Lease. Likewise, within ten (10) days after a
request by Tenant, Landlord shall deliver to Tenant a similar estoppel
certificate covering such matters as are reasonably required by Tenant.
26. PROTECTION AGAINST LIENS.
Tenant shall do all things necessary to prevent the filing of any
mechanics', materialmen's or other types of liens whatsoever, against all or any
part of the Premises by reason of any claims made by, against, through or under
Tenant. If any such lien is filed against the Premises, Tenant shall either
cause the same to be discharged of records within thirty (30) days after filing
or, if Tenant in its discretion and in good faith determines that such lien
should be contested, it shall
furnish such security as may be necessary to prevent any foreclosure proceedings
against the Premises during the pendency of such contest. If Tenant shall fail
to discharge such lien within said time period or fail to furnish such security,
then Landlord may at its election, in addition to any other right or remedy
available to it, discharge the lien by paying the amount claimed to be due or by
procuring the discharge by giving security or in such other manner as may be
allowed by law. If Landlord acts to discharge or secure the lien then Tenant
shall immediately reimburse Landlord for all sums paid and all costs and
expenses (including reasonable attorneys' fees) incurred by Landlord involving
such lien together with interest on the total expenses and costs at an interest
rate equal to the Prime Rate plus two percent (2%).
27. MEMORANDUM OF LEASE.
If requested by Tenant, Landlord shall execute a recordable Memorandum
or Short Form Lease, prepared at Tenant's expense, specifying the exact term of
this Lease and such other terms as the parties shall mutually determine.
28. FORCE MAJEURE.
In the event Landlord or Tenant shall be delayed, hindered or prevented
from the performance of any act required hereunder, by reason of governmental
restrictions, scarcity of labor or materials, strikes, fire, or any other
reasons beyond its reasonable control, the performance of such act shall be
excused for the period of delay, and the period for performance of any such act
shall be extended as necessary to complete performance after the delay period.
However, the provisions of this paragraph shall in no way be applicable to
Tenant's obligations to pay Annual Rental or any other sums, monies, costs,
charges or expenses required by this Lease.
29. REMEDIES CUMULATIVE -- NONWAIVER.
Unless otherwise specified in this Lease, no remedy of Landlord or
Tenant shall be considered exclusive of any other remedy, but each shall be
distinct, separate and cumulative with other available remedies. Each remedy
available under this Lease or at law or in equity may be exercised by Landlord
or Tenant from time to time as often as the need may arise. No course of dealing
between Landlord and Tenant or any delay or omission of Landlord or Tenant in
exercise any right arising from the other party's default shall impair such
right or be construed to be a waiver of a default.
30. HOLDING OVER.
If Tenant remains in possession of the Premises or any part thereof
after the expiration of the Term, whether with or without Landlord's
acquiescence, Tenant shall be deemed only a tenant at will and there shall be no
renewal of this Lease without a written agreement signed by both parties
specifying such renewal. The "monthly" rental payable by Tenant during any such
tenancy at will period shall be one hundred fifty percent (150%) of the monthly
installments of Minimum Rental and one hundred percent (100%) of the monthly
installments of any Additional
Rent and other pass-through changes payable during the final Lease Year
immediately preceding such expiration. Tenant shall also remain liable for any
and all damages, direct and consequential, suffered by Landlord as a result of
any holdover without Landlord's unequivocal written acquiescence.
31. NOTICES.
Any notice allowed or required by this Lease shall be deemed to have
been sufficiently served if the same shall be in writing and placed in the
United States mail, via certified mail or registered mail, return receipt
requested, with proper postage prepaid or delivered by a nationally recognized
overnight courier, and addressed as follows:
AS TO LANDLORD: Petula Associates, Ltd.
Commercial Real Estate Equities
000 Xxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
WITH A COPY TO: Tri Properties
Royal Center Property Manager
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
AS TO TENANT: Inspire Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
WITH A COPY TO: Wyrick, Robbins, Xxxxx & Xxxxxx LLP
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
The addresses of Landlord and Tenant and the party, if any, to whose
attention a notice or copy of same shall be directed may be changed or added
from time to time by either party giving notice to the other in the prescribed
manner.
32. LEASING COMMISSION.
Landlord and Tenant represent and warrant each to the other that they
have not dealt with any broker(s) or any other person claiming any entitlement
to any commission in connection with this transaction except Corporate Realty
Advisors (the "Broker"). Landlord and Tenant agree to indemnify and save each
other harmless from and against any and all claims, suits, liabilities, costs,
judgments and expenses, including reasonable attorneys' fees, for any leasing
commissions or other commissions, fees, charges or payments resulting from or
arising out of their respective actions in connection with this Lease. Landlord
agrees to be responsible for the leasing commission due Broker pursuant to a
separate written agreement between Landlord and Broker, and to hold Tenant
harmless respecting same.
33. MISCELLANEOUS.
(a) Rules and Regulations.
Landlord shall have the right from time to time to prescribe reasonable
rules and regulations (the "Rules and Regulations") for Tenant's use of the
Premises and the Building. A copy of Landlord's current Rules and Regulations
respecting the Premises and the Building is attached hereto as Exhibit "D".
Tenant shall abide by and actively enforce on all its employees, agents,
invitees and licensees such regulations including without limitation rules
governing parking of vehicles in designated areas, provided Tenant has received
written copies of such regulations and any amendments or revisions thereto. The
Rules and Regulations shall be applied uniformly to all tenants in the Building.
(b) Evidence of Authority.
If requested by Landlord, Tenant shall furnish reasonable legal
documentation evidencing the valid existence and good standing of Tenant and the
authority of any parties signing this Lease to act for Tenant.
(c) Limitation of Landlord's Liability.
If Landlord shall fail to perform any covenant, term or condition of
this Lease upon Landlord's part to be performed within thirty (30) days after
written notice from Tenant (unless such condition is incapable of being cured
within said thirty (30) day period, in which event it shall not be deemed a
default so long as Landlord is diligently pursuing the completion of same), and,
as a consequence of such default, Tenant shall recover a money judgment against
Landlord, such judgment shall be satisfied solely out of the proceeds of sale
received upon execution of such judgment levied thereon against the right, title
and interest of Landlord in the Building as the same may then be encumbered
(including without limitation Landlord's interest in the rents and profits
arising out of Landlord's interest in the Building); and neither Landlord nor,
if Landlord be a partnership, any of the partners comprising Landlord shall have
any personal liability for any deficiency. It is understood and agreed that in
no event shall Tenant or any person claiming by or through Tenant have the right
to levy execution against any property of Landlord other than its interest in
the Building as hereinbefore expressly provided.
(d) Nature and Extent of Agreement.
This Lease, together with all exhibits hereto, contains the complete
agreement of the parties concerning the subject matter, and there are no oral or
written understandings, representations, or agreements pertaining thereto which
have not been incorporated herein. This Lease creates only the relationship of
landlord and tenant between the parties, and nothing herein shall impose upon
either party any powers, obligations or restrictions not expressed herein. This
Lease shall be construed and governed by the laws of the state in which the
Premises are located.
(e) Binding Effect.
This Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors and assigns. This Lease
shall not be binding on Landlord until executed by a Vice President of Landlord
and delivered to Tenant. No amendment or modification to this Lease shall be
binding upon Landlord unless same is in writing and executed by a Vice President
of Landlord.
(f) Captions and Headings.
The captions and headings in this Lease are for convenience and
reference only, and they shall in no way be held to explain, modify, or construe
the meaning of the terms of this Lease.
(g) Security Deposit.
Tenant has paid to Landlord upon signing this Lease Ten Thousand and
No/100 Dollars ($10,000.00) (the "Deposit") as security for Tenant's performance
of all obligations hereunder. The Deposit may be held by Landlord in such manner
as it shall elect and Landlord shall be entitled to any interest which accrues
on the Deposit. In the event of a default by Tenant, Landlord may, at its
option, apply all or any part of the Deposit to cure the default, and thereupon
Tenant shall immediately redeposit with Landlord the amount so applied in order
that Landlord will always have the full Deposit on hand during the term of this
Lease. Upon the termination of this Lease, provided that Tenant is not in
default hereunder, Landlord shall refund to Tenant any of the remaining balance
of the Deposit subject to final adjustments for payment of any rental required
by this Lease. If the Premises is sold, Landlord shall have the right to
transfer the Deposit to the new owner, and upon the new owner's express
assumption of the obligations for the Deposit required by this Lease, Landlord
shall thereupon be released from all liability for such Deposit, and Tenant
thereafter shall look only to the new owner for such Deposit provided that such
new owner has provided notice to Tenant of its assumption of such obligations.
The terms hereof shall apply to every transfer of the Deposit.
(h) Right to Relocate. [Intentionally Deleted]
(i) Lease Review.
The submission of this Lease to Tenant for review does not constitute a
reservation of or option for the Premises, and this Lease shall become effective
as a contract only upon execution and delivery by Landlord and Tenant.
(j) Attorney's Fees. If either party places in the hands of an attorney
the enforcement of this Lease or any part thereof, for the collection of any
rent due or to become due hereunder, or recovery of the possession of the
Premises, or otherwise files suit hereunder, the non-prevailing (or defaulting)
party shall pay the other party's reasonable attorneys' fees and court costs.
(k) Principal Mutual Approval. This Lease is subject to approval by the
Principal Mutual Life Insurance Company Investment Committee and the Board of
Directors of Petula Associates, Ltd., such approval to be granted or denied
within ten (10) days after the full execution of this Lease.
34. SEVERABILITY.
If any term or provision of this Lease or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by law
notwithstanding the invalidity of any other term of provision hereof.
35. REVIEW OF DOCUMENTS.
If, following the execution of this Lease, either party hereto requests
that the other party execute any document or instrument that is other than (i) a
document or instrument the form of which is attached hereto as an exhibit, or
(ii) a document that solely sets forth facts or circumstances that are then
existing and reasonably ascertainable by the requested party with respect to the
Lease, then the party making such request shall be responsible for paying the
reasonable out-of-pocket costs and expenses (within thirty (30) days of such
parties receipt of reasonably detailed evidence supporting such expenses),
including without limitation, the attorneys fees, incurred by the requested
party in connection with the review (and, if applicable, the negotiations)
related to such document(s) or instrument(s), regardless of whether such
document(s) or instrument(s) is (are) ever executed by the requested party. In
the event the requesting party is Tenant, all such costs and expenses incurred
by Landlord in connection with its review and negotiation of any such
document(s) instrument(s) shall be deemed to be additional rental due hereunder
and shall be payable by Tenant as provided above.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and sealed pursuant to authority duly given as of the day and year
first above written.
"LANDLORD"
PETULA ASSOCIATES, LTD.
ATTEST:
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
--------------------- ----------------------
President
[CORPORATE SEAL]
"TENANT"
INSPIRE PHARMACEUTICALS, INC.
ATTEST:
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx Doutz
--------------------- ----------------------
Secretary President
[CORPORATE SEAL]
STATE OF IOWA
COUNTY OF POLK
This 30th day of December, 1997, personally came before me Xxxxxxx X.
Xxxxxx, who being by me duly sworn, says that he is Vice President of Petula
Associates, Ltd., an Iowa corporation, and that said writing was signed by him,
in behalf of said corporation by its authority duly given, and acknowledged the
said writing to be the act and deed of said corporation.
/s/ Xxxxxx X. Mischike
---------------------------
Notary Public
[NOTARIAL SEAL]
My Commission expires:
May 19, 0000
XXXXX XX XX
XXXXXX XX Xxxxxx
This 5th day of December, 1997, personally came before me Xxxxx X.
Xxxxx, M.D., who being by me duly sworn, says that he is _____ President of
Inspire Pharmaceuticals, Inc. a Delaware corporation, and that said writing was
signed by him, in behalf of said corporation,by its authority duly given, and
acknowledged the said writing to be the act and deed of said corporation.
/s/ Xxxx X. Xxxxx
---------------------------
Notary Public
[NOTARIAL SEAL]
My Commission expires:
August 5, 2001
Exhibit A
DRAWING
Exhibit B
DRAWING
EXHIBIT "C"
FINAL PLANS
[To be attached upon approval by Landlord]
EXHIBIT "D"
RULES AND REGULATIONS
The following rules and regulations have been adopted by the Landlord
for the care, protection and benefit of the Building and for the general comfort
and welfare of the tenants. These Rules and Regulations shall remain in full
force and effect until Tenant is notified in writing by Landlord of any changes
and amendments. To the extent any of the Rules and Regulations set forth herein
are inconsistent with the provisions of the Lease, the terms and conditions of
the Lease shall prevail.
1. The sidewalks, entrances, halls, passages, elevators and stairways
shall not be obstructed or used by Tenant for any other purpose than for ingress
and egress. All loading and unloading of goods, furniture, fixtures, equipment
and supplies shall be done only in areas and through entrances designated for
such purposes.
2. Toilet rooms and other plumbing facilities shall not be used for any
purpose other than those for which they are constructed and no foreign substance
of any kind shall be disposed of therein. All repairs required due to breakage,
stoppage or damage resulting from a violation of this provision shall be at
Tenant's sole expense.
3. Tenant shall not do anything in the Premises, or bring or keep
anything therein, which shall in any way conflict with any law, ordinance, rule
or regulation affecting the occupancy and use of the Premises, which are or may
hereafter be enacted or promulgated by any public authority or by the Board of
Fire Underwriters.
4. Tenant shall at all times maintain an adequate number of suitable
fire extinguishers on the Premises for use in case of local fires, including
electrical fires.
5. Tenant shall keep the Premises heated at a temperature sufficiently
high to prevent freezing of water in pipes and fixtures.
6. Trucks shall not be allowed to remain overnight in the common area
whether loaded, unloaded or otherwise, without Landlord's prior written consent.
7. All garbage and refuse shall be placed for collection in containers
specified by Landlord outside the Premises or Building. Tenant shall pay the
cost of removal of any of Tenant's refuse or rubbish.
8. Tenant shall, at Tenant's expense, provide for regular pest
extermination within the Premises, as necessary, and shall provide Landlord with
a copy of such extermination contract.
9. In order to insure proper use and care of the Premises, neither the
Tenant nor agent nor employee of Tenant shall:
(a) Allow any furniture, packages or articles of any kind to remain in
corridors except for short periods incidental to moving same in or out of
Building or to cleaning or rearranging occupancy of leased space.
(b) Xxxx or defile elevators, toilet rooms, walls, windows, doors or
any part of the Building.
(c) Except for "seeing-eye" dogs, keep animals or birds on the
Premises.
(d) Deposit waster paper, dirt or other substances in corridors,
stairways, elevators, toilets, restrooms, or any other part of the Building not
leased by Tenant.
(e) Except for pictures, wall hangings and other customary decorations
and items which would not cause permanent damage to the structural elements of
the Building, fasten any article, drill holes, drive nails or screws into walls,
floors, doors, or partitions or otherwise mar or deface them by paint, papers or
otherwise, without Landlord's prior written consent.
(f) Operate any machinery within the Building except customary
warehouse, training and office equipment, such as computers, dictaphones,
calculators, electric typewriters, televisions, video cassette records and the
like. Special equipment or machinery used in the trade or profession of the
Tenant may be operated only with Landlord's prior written consent.
(g) Leave Premises unoccupied without locking all exterior doors and
turning off all water outlets
(h) Burn any trash, refuse, debris or garbage of any kind in or about
the Premises or Building.
(i) Attach awnings, air-conditioning units or other fixtures to the
outside walls or window xxxxx, or otherwise affix such so as to project from the
Premises or Building without Landlord's prior written consent..
(j) Except for Tenant's installation of a key card security system,
install additional locks or bolts of any kind on any doors or windows of the
Premises without Landlord's prior written consent. On the termination of
Tenant's tenancy, Tenant shall deliver to Landlord all keys to the Premises,
either furnished to or otherwise procured by Tenant.
(k) Install or operate any engine, boiler, machinery, or stove, or use
oil or any burning fluid (other than gas) for heating, warming or lighting, or
use any lighting other than incandescent or fluorescent electric lights, on the
Premises without Landlord's prior written consent. All stoves permitted in the
Premises shall be placed and installed. according to city ordinances. No
articles deemed extra hazardous on account of fire, and no explosives, shall be
brought into the Premises.
(l) Use loudspeakers, televisions, radios or other devices in such a
manner as to be heard outside the Premises, or make, or permit to be made, any
unseeming or disturbing noises, nuisance or other activity objectionable to
other tenants.
(m) Use the Premises for the purpose of lodging or sleeping rooms, or
for any illegal purposes.
(n) Install any aerial, antenna, satellite dish or other equipment or
structure on the roof or exterior walls of the Premises, or on the grounds
without, in each instance, the prior written consent of Landlord. Any
installation so made without such prior written consent shall be subject to
removal without notice at any time, at Tenant's expense.
10. Landlord shall have the right to prohibit any advertising by Tenant
which, in its opinion, shall damage the reputation of the Building or its
desirability, and upon written notice from Landlord, Tenant shall discontinue
any such advertising.
11. Except for deliveries in the ordinary course of Tenant's business,
Landlord reserves the right to designate the time when and method whereby
freight, furniture, safes, goods, merchandise and other articles may be brought
into, moved or taken from the Building and the Premises leased by Tenant; and
workmen employed, designated or approved by Landlord must be employed by Tenants
for repairs, painting, material moving and other similar work that may be done
on the Premises.
12. Tenant will reimburse Landlord for the cost of repairing any damage
to the Premises or other parts of the Building caused by Tenant or the agents or
employees of Tenant, including replacing any glass broken.
13. Tenant shall not install in the Premises any metal safes or permit
any concentration of excessive weight in any portion thereof without first
having obtained the written permission of Landlord.
14. Landlord reserves the right at all times to exclude newsboys,
loiterers, vendors, solicitors and peddlers, from the Building or common area
and to require registration, satisfactory identification and credentials from
all person seeking access to any part of the Building or common area outside of
ordinary business hours. Ordinary business hours shall mean Monday through
Friday, 8:00 a.m. to 6:00 p.m., except on legal holidays. Landlord shall
exercise its best judgment in the execution of such control but shall not be
held liable for the granting or refusal of such access. Landlord reserves the
right to exclude the general public from the building after ordinary business
hours and on weekends and holidays.
15. The attaching of wires to the outside of the Building is absolutely
prohibited, and no wires shall be run or installed in any part of the Building
without the Landlord's permission and direction.
16. Requests for services of janitors or other Bulding employees must
be made to the Landlord. Agents or employees of Landlord shall not perform any
work or do anything outside of their regular duties unless under special
instructions from Landlord.
17. Signs or any other Tenant identification shall be in accordance
with building standard signage. No signs of any nature shall be placed in the
windows so as to be visible from the exterior of the Building. All signs not
approved in writing by Landlord shall be subject to removal without notice.
18. Except as otherwise set forth in the Lease, any improvements or
alterations to the Premises by Tenant shall be approved in advance by Landlord
and all such work, if approved, shall be done at Tenant's sole expense under the
supervision of Landlord.
19. Tenant shall have a non-exclusive right to use of all driveways and
parking areas designated for Tenant and Tenant's employees, if deemed necessary
by Landlord.
20. If additional drapes or window decorations are desired by Tenant,
they shall be approved by Landlord and installed at Tenant's expense under the
direction of Landlord. Lining on drapes visible from the exterior shall be of a
color approved by Landlord.
21. The possession of weapons, including concealed handguns, is
strictly forbidden on the Premises and Building.
22. Tenant shall not use nor permit the use of the common area by its
employees, agents or invitees for the purpose of displaying or selling personal
property, automobiles, equipment, furniture, fixtures, merchandise or any other
item whether owned by Tenant or its employees, agents or invitees.
23. So long as such rescissions or amendments do not materially
interfere with Tenant's standard business operations within the Premises,
Landlord reserves the right to rescind, amend, alter or waive any of the
foregoing rules and regulations at any time in a reasonable and
nondiscriminatory manner, or make such other reasonable and non-discriminatory
rules and regulations as, in its sole judgment it deems necessary, desirable or
proper for its best interest and for the best interests of the tenants, or as
may from time to time be necessary for the safety, care and cleanliness of the
Premises, the Building or adjacent areas, and for the preservation of good order
therein. Any such rescission, amendment, alteration or waiver of any rules or
regulations or creation of any such new rules or regulations shall be effective
five (5) days after all tenants have been given written notice thereof. Landlord
shall not be responsible to any tenant for the non-observance or violation by
any other tenant of any of these rules and regulations at any time.
EXHIBIT "E"
OPTION TO EXTEND
1. Notice and Exercise. Provided no Event of Default has occurred and is
continuing under this Lease, Tenant is hereby granted the option to extend
the Term once for an additional period of five (5) years (the "Renewal
Term") commencing upon the expiration of the initial Term on the same terms
and conditions (except as provided in this Section) as contained in the
other provisions of this Lease. This option shall be exercised only by
delivery of written notice (the "Renewal Notice") to Landlord no later than
nine (9) months prior to the scheduled Expiration Date referred to in
Paragraph 2 of this Lease. The Minimum Rental for the Premises shall be the
then fair market rental ("Market Rate") applicable to the Premises. Upon
Landlord's receipt of Tenant's election to extend the Term as herein
provided, Landlord shall notify Tenant in writing of Landlord's
determination of the Market Rate for the Renewal Term. If Tenant disagrees
with the Market Rate specified by Landlord for the Renewal Term, and
Landlord and Tenant cannot, using good faith reasonable efforts, agree upon
a mutually acceptable Market Rate for the Renewal Term, Tenant may, as
Tenant's sole right and remedy, revoke its election to extend the Term by
so notifying Landlord in writing within thirty (30) days following
Landlord's receipt of the Renewal Notice (the "Tenant Review Period"). In
the event Landlord and Tenant cannot agree upon a mutually acceptable
Market Rate for the Extension Term and Tenant fails to revoke its election
to extend the Term prior to the expiration of the Tenant Review Period, the
Market Rate for the Renewal Term shall be determined in accordance with
Section 2 hereunder and such determination shall be final and binding upon
both Landlord and Tenant. Notwithstanding anything contained herein to the
contrary, upon the expiration of the Tenant Review Period, Tenant shall
have no right to rescind or otherwise revoke its election to extend the
Term. Tenant's occupancy of the Premises during any renewal period shall be
subject to all other terms and conditions of this Lease, expressly
including without limitation, the obligation to pay Tenant's proportionate
share of the taxes, insurance premiums and common area maintenance costs;
provided, however, Landlord shall have no obligation to provide any
upfitting allowance for the Renewal Term and Tenant agrees to continue
leasing the Premises in its "as-is" condition.
2. Determination of Market Rate. For purposes of this Exhibit "E", the term
"Market Rate" shall mean the annual amount per rentable square foot that
comparable landlords of comparable buildings have accepted in then-current
transactions between non-affiliated parties from new, non-expansion,
non-renewal (unless the lease involved a procedure invoked by landlord and
tenant for a 100% determination of "fair market rental") and non-equity
tenants of comparable credit-worthiness, for comparable space, for a
comparable use, for a comparable period of time ("Comparable
Transactions"). In any determination of Comparable Transactions appropriate
consideration shall be given to the annual rental rates per rentable square
foot, the standard of measurement by which the
rentable square footage is measured, the ratio of rentable square feet to
usable square feet, the type of escalation clause implemented, the extent
of tenant's liability under the lease, abatement provisions reflecting free
rent and/or no rent during the period of construction or subsequent to the
commencement date as to the space in question, parking considerations,
length of the lease term, size and location of premises being leased,
building standard work letter and/or tenant improvement allowances, if any,
or any other tenant concessions and other generally applicable conditions
of tenancy for such Comparable Transactions. The intent is that Tenant will
obtain the same rent and other economic benefits that Landlord would
otherwise give in Comparable Transactions and that Landlord will make, and
receive the same economic payments and concessions that Landlord would
otherwise make, and receive in Comparable Transactions.
Upon expiration of the Tenant Review Period, Landlord and Tenant shall
each place in a separate sealed envelope their final proposal as to Market
Rate and such determination shall be submitted to arbitration in accordance
with subsections (a) through (e) below.
(a) Landlord and Tenant (together with or through their designated
representatives) shall meet with each other within five (5) business days of the
Outside Agreement Date and exchange the sealed envelopes and then open such
envelopes in each other's presence. If Landlord and Tenant do not mutually agree
upon the Market Rate with one (1) business day of the exchange and opening of
envelopes, then, within ten (10) business days of exchange and opening of
envelopes Landlord and Tenant shall agree upon and jointly appoint a single
arbitrator who shall by profession be a real estate appraiser, lawyer or broker
who shall have been active over the five (5) year period ending on the date of
such appointment in the leasing of comparable commercial properties in the
vicinity of the Building (the "Arbitrator"). Neither Landlord nor Tenant shall
consult with such Arbitrator as to his or her opinion as to Market Rate prior to
the appointment. The determination of the Arbitrator shall be limited solely to
the issue of whether Landlord's or Tenant's submitted Market Rate for the
Premises is the closer to the actual Market Rate for the Premises as determined
by the Arbitrator, taking into account the requirements of this Section 2. Such
Arbitrator may hold such hearings and require such briefs as the Arbitrator, in
his or her sole discretion, determines as necessary. In addition, Landlord or
Tenant (together with or through their designated representatives) may submit to
the Arbitrator with a copy to the other party within five (5) business days
after the appointment of the Arbitrator any market data and additional
information that such party deems relevant to the determination of Market Rate
("MR Data") and the other party may submit a reply in writing within five (5)
business days after receipt of such MR Data.
(b) The Arbitrator shall, within thirty (30) days of his or her
appointment, reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted Market Rate, and shall notify Landlord and Tenant of such
determination.
(c) The decision of the Arbitrator shall be binding upon Landlord and
Tenant.
(d) If Landlord and Tenant fail to agree upon and appoint an
Arbitrator, then the appointment of the Arbitrator shall be made by the
Presiding Judge of the Superior Court, or, if he or she refuses to act, by any
judge having jurisdiction over the parties.
(e) The cost of arbitration shall be paid by Landlord and Tenants
equally.
Immediately after the base rent for the applicable Extension Period is
determined pursuant to this Exhibit, Landlord and Tenant shall execute an
amendment to the Lease stating the new base rent in effect.
