EXHIBIT 10.27
LEASE
JULY 26, 1995
from
COMMERCIAL BUILDING ASSOCIATES
to
NEUROGEN CORPORATION
LEASE
THIS INSTRUMENT IS A LEASE, dated as of July 26, 1995, in which the Landlord
and the Tenant are the parties hereinafter named, and which relates to space in
the Building located at 00 Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx. The
parties to this instrument hereby agree as follows:
ARTICLE I
Reference Data and Exhibits
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1.1 DATA
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LANDLORD Commercial Building Associates
00 Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
A Connecticut General Partnership
TENANT Neurogen Corporation
00 Xxxxxxxxx Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
ADDITIONAL RENT Those amounts to be paid by Tenant to Landlord under Section
3.4 of this Lease in addition to Basic Rent.
ANNUAL BASIC RENT
Initial Term Per Square Foot Annual Rent Monthly Rent
------------- --------------- ----------- ------------
Lease Years 1 - 5 $5.25 $126,000.00 $10,500.00
Lease Years 6 - 10 $6.30 151,200.00 12,600.00
Extended Term
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Lease Years 11 - 15 $7.00 168,000.00 14,000.00
Lease Years 16 - 20 $7.75 186,000.00 15,500.00
If the Term shall commence or end on a date other than the first day of a
calendar month, the Monthly Basic Rent for such months shall be prorated.
APPURTENANT
RIGHTS Appurtenant Rights are the (i) the right in
common with other tenants of the Building to use
the sidewalks and parking, loading and other
common areas of the Property, (ii) the right to
construct and maintain an enclosed walkway
between adjoining premises of the Tenant and the
Building; and (iii) the exclusive use of at
least 63 parking spaces in the parking lot.
BUILDING
RENTABLE AREA Thirty-nine Thousand (39,000) net rentable square feet.
COMMENCEMENT
DATE As defined in Section 3.2 of this Lease.
DEFAULT An event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an
Event of Default as forth in Article XII of this Lease.
EXTENDED TERM The ten (10) year Term following The Initial Term as provided
for in Section 2.3 of this Lease.
FULL INSURABLE
VALUE Actual replacement cost of the Building and other
improvements on the Property, including the costs of
demolition and debris removal.
INITIAL TERM The period commencing on the Commencement Date and expiring
on the last day of the tenth (10th) Lease Year (the
"Expiration Date," as the same may be extended pursuant to
Section 2.3 of this Lease).
LEASE YEAR Lease Year shall mean the period from the Commencement Date
to the expiration of the first full twelve (12) calendar
month period of the Term of this Lease and each succeeding
twelve (12) month period for the Term of this Lease and any
Extended Term. If the Commencement Date is not the first date
of a calendar month, the first Lease Year shall be twelve
(12) months plus the remaining portion of the partial month
of the Commencement Date.
LEGAL
REQUIREMENTS All statutes, codes, ordinances, rules, regulations, orders,
judgments, or decrees of governments, authorities, agencies,
officials, and officers, which now or at any time hereafter
may be applicable to the Property or any part of it.
NET AWARD Any insurance proceeds or condemnation award payable in
connection with any damage, destruction, or Taking, less the
costs, fees and expenses incurred in the collection thereof.
OPERATING AND
TAX EXPENSES The aggregate of the Operating Expenses and Taxes.
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OPERATING
EXPENSES The aggregate costs reasonably incurred by Landlord with
respect to the Casualty Insurance and Utilities (unless
separately metered to a tenant) for the Property.
OPERATING YEAR Each calendar year in which any part of the Term of the Lease
shall fall.
PERMITTED USES Use of the Premises for the purposes of a research, office
and manufacturing facility and for any and all other uses
permitted aS of right or otherwise by applicable zoning
regulations.
PREMISES That portion of the Building consisting of Spaces B, C and D
and in the aggregate containing Twenty-four Thousand (24,000)
rentable square feet (the "Premises Rentable Area"),
calculated in accordance with the Measurement Method as
described hereinafter), together with a certain portion of
the land area which is agreed to be located as shown on
Exhibit B annexed hereto, together with the Appurtenant
Rights.
PREMISES
RENTABLE AREA Twenty-four Thousand (24,000) rentable square feet as
measured in accordance with the Measurement Method and as set
forth hereinabove under the definition of "Premises".
PROPERTY The parcel of land known as 00 Xxxxxxxxx Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx as described on Exhibit A, together
with the Building and other improvements situated thereon.
RESTORATION The restoration, replacement, or rebuilding of the Premises
or any portion thereof as nearly as practicable to its value,
condition, and character immediately prior to damage,
destruction, or Taking or at the Commencement Date, as Tenant
may elect.
TAKING A taking of all or any part of the Property, or any interest
or right accruing thereto, as a result of or in lieu of or in
anticipation of the exercise of the right of condemnation or
eminent domain pursuant to any laws general or special, or by
reason of the temporary requisition of the use or occupancy
of the Property or any part thereof, by any governmental
authority.
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TAX EXPENSES The real estate taxes assessed with respect to the Property
and/or any other tax if the same replaces the current method
of assessment of real estate taxes in whole or in part or is
additionally imposed on the Property and is generally
applicable to owners of similar properties (specifically
excepting herefrom any tax associated with income from said
property imposed on Landlord), together with all personal
property taxes levied upon equipment, machinery, devices,
apparatus, implements and all other articles of personal
property which are affixed to the Building and utilized in
connection with the operation thereof but which may be taxed
as personalty by the Town of Branford, including, for
example, security cameras and console monitors, energy
management computing system equipment and other similar items
of personalty.
TENANT'S
PROPORTIONATE
SHARE That fraction, the numerator of which is the Premises
Rentable Area and the denominator of which is the Building
Rentable Area which the parties agree is 0.615.
TENANT'S SHARE
OF OPERATING AND
TAX EXPENSES Tenant's Proportionate Share of the amount of the Operating
and Tax Expenses.
TERM The period commencing on the Commencement Date and expiring
at 5:00 p.m. on the Expiration Date. The Term shall include
any Extended Term if Tenant exercises its extension option as
provided for in Article II hereof.
1.2 Effect of Reference to Data or Defined Words. Each reference in this Lease
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to any of the titles or defined words contained in Section 1.1 shall be
construed to incorporate the data stated under that title and the definition.
1.3 Exhibits. The exhibits listed below in this Section are incorporated in this
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Lease by reference and are to be construed as a part of this Lease.
EXHIBIT A Plan showing the Premises and the Property
EXHIBIT B Schedule of Insurance
EXHIBIT C Preliminary Scope of Tenant's Improvements
EXHIBIT C-1 Tenant's Improvements Subject to Removal
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EXHIBIT D Purchase Option Agreement
EXHIBIT E Subordination, Non-Disturbance and Attornment
Agreement and Insurance Proceeds Agreement
EXHIBIT F Notice of Lease and Purchase Option
ARTICLE II
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Premises and Term
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2.1 Premises. Landlord hereby demises and leases to Tenant and Tenant hereby
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leases from Landlord for the Term, upon the terms, covenants, conditions and
provisions of this Lease, the Premises. The Tenant has examined the Premises,
and accepts them in their present condition and without any representations on
the part of the Landlord or its agents as to the present or future condition of
the Premises, except as otherwise expressly set forth herein.
2.2 Initial Term. TO HAVE AND TO HOLD for the Initial Term beginning on the
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Commencement Date and continuing for the balance of the Initial Term.
2.3 Option to Extend. Tenant shall have the right and option to extend this
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Lease for one (1) period of ten (10) years (the "Extended Term"), by delivering
notice in writing to Landlord of its exercise thereof not less than one (1) year
prior to the expiration of the Initial Term, provided that both at the time of
such exercise of this option and at the expiration of the Initial Term, Tenant
is not then in material default in the performance or observance of any of the
covenants, agreements, terms, provisions or conditions contained herein and on
its part to be performed. The Extended Term shall commence on the date
immediately succeeding the Expiration Date of the Initial Term.
All of the covenants, agreements, terms, provisions and conditions of this
Lease shall apply during said Extended Term, it being understood that the Annual
Fixed Rent for said Extended Term shall be as set forth above. The "Lease Term"
shall refer to the original term and, if the option is exercised, the Extended
Term.
ARTICLE III
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Rent
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3.1 Payment of Rent. Commencing on the Commencement Date hereof, Tenant
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covenants and agrees to pay Annual Basic Rent and Additional Rent to Landlord at
the address of Landlord shown above or such other place as Landlord may by
notice in writing to Tenant from time to time direct, as shown below.
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3.2 Commencement Date. The Commencement Date hereunder shall be a date ten (10)
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days following the date on which the Tenant receives notice from Landlord that
Space B, C or D is available for delivery to the Tenant, broom clean and free
and clear of all tenancies and occupants, which date for delivery of the entire
Premises shall in no event be later than one hundred twenty (120) days from the
date of this Lease. The Basic Rent and Additional Rent shall be prorated based
on the relative square footage of each space delivered until the entire Premises
shall be delivered to the Tenant.
3.3 Basic Rent. Tenant covenants and agrees to pay to the Landlord as Basic Rent
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for the Premises the Annual Basic Rent, in equal monthly payments, in advance on
the first day of each month (the "Rent Payment Dates") during the Term.
3.4 Additional Rent. Tenant shall pay as Additional Rent to Landlord, Tenant's
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Share of Operating and Tax Expenses.
(a) Additional Rent for Taxes. Additional Rent for Tenant's Proportionate
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Share of Tax Expenses shall be paid by Tenant to Landlord in two (2)
installments; fifty percent (50%) of the amount due shall be paid on each July
15th and the balance on the next succeeding January 15th. Tenant's
Proportionate Share of other municipal assessments or charges shall be paid to
the Landlord fifteen (15) days prior to the date payment by the Landlord is due
to the government. Tenant shall have the right, at Tenant's sole cost and
expense, to contest the real estate taxes and other assessments made by the Town
of Branford against the Property and Landlord agrees to fully cooperate with
Tenant in any appeal at no cost or expense to Landlord. Any reduction obtained
by Tenant as a result of any appeal of any amount previously paid to Landlord
shall be repaid to Tenant by Landlord.
(b) Additional Rent for Casualty Insurance. Landlord covenants and agrees
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that during the term of this Lease it shall provide and keep in force fire and
extended coverage insurance on the Property for the Full Insurable Value thereof
(the "Casualty Insurance") and shall be responsible for payment of all premiums
for the same, based on the insurance rates imposed for a basic general purpose
office and industrial building. Additional Rent for Tenant's Proportionate Share
of Casualty Insurance shall be paid within fifteen (15) days of presentation of
the xxxx by Landlord, together with any increased premium costs based solely on
Tenant's use of the Premises. The parties shall investigate the benefits of
other insurance policy arrangements.
(c) Additional Rent for Utilities and Charges therefor. Tenant agrees to
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pay, as Additional Rent, directly to the authority charged with the collection
thereof, all charges for water, gas, electricity, telephone and other utilities
used or consumed in the Premises. Tenant shall make its own arrangements for
such utilities and Landlord shall be under no obligation to
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furnish any utilities to the Premises and shall not be liable for any
interruption or failure in the supply of any such utilities to the Premises, nor
shall any interruption or failure entitle Tenant to an abatement of rent. If a
charge shall be made from time to time by the public authority having
jurisdiction of the Premises for the use of the sanitary system, Tenant shall
pay Tenant's Proportionate Share of the same.
3.5 Late Payment of Rent. In the event a payment due by the Tenant hereunder is
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not made within ten (10) days after receipt by Tenant of notice from Landlord
given following the due date, interest at the rate of eight percent (8%) per
annum shall accrue on such payment until the date of payment.
3.6 Prepaid Rent. Two (2) months Annual Basic Rent (a total of $21,200.00) shall
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be payable upon the execution of this Lease. The payment shall be applied to the
final two months of the Initial Term.
ARTICLE IV
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Construction of Improvements
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4.1 Tenant's Improvements. The parties acknowledge that the Tenant will need to
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make and construct extensive improvements, additions and alterations to the
Premises. The preliminary scope of these improvements is shown on Exhibit C. The
Tenant reserves the right to alter and amend the scope and design of these
initial improvements as Tenant in its sole discretion deems appropriate, and
nothing contained herein shall obligate Tenant to make any addition, alteration
or improvement to the Building. The Tenant shall be permitted at any time during
the Term to make improvements, additions and alterations to the Premises and the
Building, whether structural or otherwise as the Tenant in its sole and
exclusive discretion shall determine without the consent or prior approval of
the Landlord, provided only that all such work shall be done in accordance with
the provisions of section 4.3 hereof.
4.2 Retention of Improvements. Except as provided in section 5.1, no Tenant's
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improvements, alterations or additions need be removed and the Tenant will be
allowed to leave all such improvements, alterations or additions in place upon
termination or expiration of this Lease.
If Tenant elects to remove any of Tenant's improvements, alterations or
additions, it shall repair any resulting damage to the Premises in a good and
workmanlike manner. All articles of personal property and all business fixtures,
machinery and equipment and furniture owned or installed by Tenant solely at its
expense in the Premises ("Tenant's Removable Property") shall remain the
property of Tenant and may be removed by Tenant at any time prior to expiration
of this Lease, provided that Tenant, at
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its expense, shall repair any damage to the Premises caused by such removal.
4.3 Tenant's Work. Tenant agrees that it will perform all alterations,
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additions or improvements to be done by Tenant ("Tenant's Work"), in a good and
workmanlike manner, using materials of good quality, in accordance with all
applicable governmental requirements. Tenant shall be responsible, at its own
cost and expense, for the obtaining of all approvals and permits required in
connection therewith. Tenant agrees to cause such contractors employed by
Tenant to carry Workmen's Compensation Insurance in accordance with statutory
requirements and Comprehensive Public Liability Insurance covering such
contractors on or about the Premises in amounts at least equal to the
limits set forth in Exhibit B hereto and to submit certificates evidencing such
coverage to Landlord upon request.
ARTICLE V
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Removal of Improvements
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5.1 It is contemplated that the Tenant may exercise its option to purchase the
Property of which the Premises is a part. In the event, however, that the
Tenant does not purchase the Property, the Premises might not be readily
rentable at the end of the Initial or Extended Term, because of its then
configuration, and it might be necessary to require that certain of Tenant's
improvements be removed.
It would be inequitable to require either the Landlord or the Tenant to
restore the Premises to its condition on the Commencement Date of this Lease.
The parties therefore agree that when the Landlord regains possession of the
Premises for any reason, if after reasonable efforts the Landlord is not able to
rent any portion of the Premises at a reasonable rental to another tenant
because of the presence of certain improvements installed by Tenant as shown on
Exhibit C-1, then the Landlord shall have the right to require the Tenant to
remove the improvements shown on Exhibit C-1 within a reasonable time after
being requested to do so, at the Tenant's own expense.
The parties agree to create Exhibit C-1 at such time as Tenant shall have
finalized its initial improvement plans and to thereafter amend Exhibit C-1 at
such times as other improvements are to be constructed on the Premises by the
Tenant to include those improvements which the parties may agree are a potential
impediment to releasing of the Premises.
ARTICLE VI
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Intentionally Omitted
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ARTICLE VII
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Additional Covenants
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7.1 Affirmative Covenants of Tenant. Tenant covenants at its expense at all
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times during the Lease Term and such further time as Tenant occupies the
Premises or any part thereof and agrees:
(a) Use. To use the Premises only for the Permitted Uses.
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(b) Maintenance. To keep the Premises in its entirety in good order and
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condition (except for ordinary wear and tear or damage caused by casualty or a
Taking) and shall make all repairs and take all other action necessary or
appropriate to keep and maintain the Premises in good order, repair and
condition. Landlord will not be liable for any labor, services, or materials
furnished or to be furnished to the Premises or any part thereof, other than for
removal of ice and snow from parking areas and for grounds maintenance. No
mechanics' or other liens for any such labor or materials shall attach to or
affect the interest of Landlord in and to the Premises.
(c) To make all repairs, alterations, additions or replacements to the
Premises required by any law or ordinance or any order or regulation of any
public authority and arising because of Tenants use of ths Premises; to keep the
Premises equipped with all safety appliances so required because of such use; to
procure any licenses and permits required for any such use; to pay all municipal
or state taxes assessed against personal property of any kind owned by or placed
in, upon or about the Premises by Tenant; and to comply with the orders and
regulations of all governmental authorities required because of such use. Tenant
may defer compliance so long as the validity of any such law, ordinance, order
or regulation shall be contested by Tenant in good faith and by appropriate
legal proceedings, if Tenant first gives Landlord assurance reasonably
satisfactory to Landlord against any loss, cost or expense on account thereof.
(d) Perfomance and Payment for Tenant's Work and other Work. To pay
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promptly when due the entire cost of any work to the Premises undertaken by
Tenant and to bond against or discharge any liens for labor or materials within
ten (10) days after written request by Landlord; to procure all necessary
permits before undertaking such work; and to do all of such work in a good and
workmanlike manner, employing materials of good quality and complying with all
governmental requirements.
(e) Landlord's Right to Enter. To permit Landlord and its agents upon
------------------------
reasonable notice to examine and enter the Premises at reasonable times.
Landlord agrees to use its best efforts to minimize any interference with
Tenant's operations at the Premises resulting from any such entry.
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(f) Personal Property at Tenant's Risk. That all of the furnishings,
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fixtures, equipment, effects and property of every kind, nature and description
of Tenant and of all persons claiming by, through or under Tenant which, during
the continuance of this Lease or any occupancy of the Premises by Tenant or
anyone claiming under Tenant, may be on the Premises, shall be maintained on the
Premises at the sole risk and hazard of Tenant, and if the whole or any part
thereof shall be destroyed or damaged by fire, water or otherwise, or by the
leakage or bursting of water pipes, steam pipes, or other pipes, by theft or
from any other cause, no part of said loss or damage is to be charged to or to
be borne by Landlord, except if due to the gross negligence or willful
misconduct of the Landlord.
(g) Payment of Landlord's Cost of Enforcement. To pay on demand Landlord's
-----------------------------------------
reasonable and necessary out-of-pocket expenses, including reasonable attorneys'
fees, incurred in enforcing any obligation of Tenant under this Lease or in
curing any default by Tenant under this Lease after the expiration of any grace
period or cure period provided for in this Lease.
(h) Yield Up. At the expiration of the Lease Term or earlier termination of
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this Lease and subject to the provisions of this agreement and except as
otherwise provided for in section 5.1 hereof, to remove all trade fixtures,
personal property, and additions made by Tenant, to repair any damage caused by
such removal, and yield up the Premises, broom clean and in the same good order
and repair in which Tenant is obligated to keep and maintain the Premises by the
provisions of this Lease, reasonable wear and tear and damage by casualty
excepted. Any property not so removed shall be deemed abandoned and may be
removed and disposed of by Landlord in such manner as Landlord shall determine
and Tenant shall pay Landlord the expense incurred by it in effecting such
removal and disposition and in making any incidental repairs and replacements to
the Premises.
7.2 Negative Covenants of Tenant. Tenant covenants at all times during the Lease
----------------------------
Term and such further time as Tenant occupies the Premises or any part thereof:
(a) Assignment and Subletting. Not to assign, transfer, mortgage or pledge
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this Lease or the leasehold estate hereby created or any other rights arising
under this Lease to be assigned, transferred or encumbered, in whole or in part,
whether voluntarily, involuntarily or by operation of law, or permit the
occupancy of the Premises by anyone other than Tenant without first having made,
executed and delivered an assignment agreement by the assignee and a guaranty of
performance agreement by the Tenant, all in such form as may be reasonably
required by the Landlord. Each subsequent tenant and each such assignee shall be
and remain primarily liable jointly and severally with the original Tenant named
as such in this Lease for the payment of all rental obligations hereunder,
including any additional rent, and for the due performance of all the
obligations, terms,
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covenants, conditions and agreements herein contained on Tenant's part to be
performed for the balance of the Term of this Lease and the obligation of such
original Tenant under this Lease shall continue in full force and effect as the
obligation of a principal.
(b) Waste. Not to dump, flush or in any way introduce any prohibited waste,
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hazardous substances, or toxic substances into the septic, sewerage or other
waste disposal system serving the Premises or generate, store or dispose of
hazardous substances in or around the Premises or dispose of hazardous
substances from the Premises to any other location except in compliance with
applicable Environmental Laws in each such case. "Hazardous substances" as used
in this section shall be as defined in the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. paragraph 9601, et
seq. and regulations adopted pursuant to said Act.
If Tenant's storage, use or disposal of any Hazardous Substances in, on or
adjacent to the Premises results in any contamination of the Premises, the soil
or surface or groundwater requiring remedial, removal or cleanup action under
Environmental Laws (as defined hereinafter), Tenant agrees to undertake such
action with regard to contamination caused by Tenant, in accordance with cleanup
standards promulgated or proposed under Environmental Law. For purposes of this
Section 7.09, "Environmental Laws" shall mean any Federal, State or local
statute, law, regulation, ordinance, code, policy, standard or rule of common
law in effect and in each case as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, relating to the environment, health, safety or hazardous
materials.
7.3 Affirmative Covenants of Landlord.
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(a) Compliance with Law. Landlord covenants that the Premises and the
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Building, and the fixtures and appurtenances thereto, do conform or that
Landlord will promptly cause them prior to the Commencement Date hereof to
conform to all Legal Requirements and all requirements of any Board of
Underwriters, rating bureau or similar organization, and the requirements of the
carriers of all insurance furnished or carried by Landlord on or relating to the
Premises or Building.
(b) Maintenance. Landlord shall at all times keep the parking lots and
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common areas free of snow and ice and shall maintain in a good condition and
repair the parking lots and grounds of the Property.
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ARTICLE VIII
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Insurance
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8.1 Public Liability Insurance.
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(a) Landlord agrees to maintain in full force throughout the Term of this
Lease a policy of public liability insurance covering property damage, injuries
and death occurring within the Building and the Premises ("Landlord's Policy").
Landlord's Liability Policy shall be in at least the amount of the Initial
Public Liability Insurance specified in Exhibit B and a duplicate original or
certificate of Landlord's Liability Policy shall be delivered to Tenant from
time to time upon the request of Tenant. Landlord agrees that, if it shall be
capable of doing so without additional cost to Landlord, it shall cause Tenant
to be named as an additional insured party on such policy or policies of
insurance.
(b) Tenant agrees to maintain in full force from the date upon which Tenant
first enters the Premises for any reason, and throughout the Term of this Lease,
and thereafter so long as Tenant is in occupancy of any part of the Premises, a
policy of public liability insurance ("Tenant's Liability Policy"). Tenant's
Liability Policy shall name Tenant as an insured and Landlord shall be named as
an additional insured. Tenant's Liability Policy shall be in at least the amount
of the Initial Public Liability Insurance specified in Exhibit B.
8.2 Casualty Insurance. Landlord shall obtain and maintain in effect at all
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times insurance on the Building against loss or damage by fire, casualty and
such other risks as are insurable under available standard forms of fire and
extended coverage insurance for one hundred percent (100%) of the Full Insurable
Value thereof, with a deductible or deductibles not to exceed Fifteen Thousand
Dollars ($15,000). Landlord agrees that it shall cause Tenant to be named as an
additional insured party on such policy or policies of insurance. Landlord shall
provide to Tenant, upon request of Tenant made from time to time, a certificate
or certification evidencing that such insurance has been procured and is in full
force and effect. Such policy shall be non-cancellable and non-amendable with
respect to the Tenant without thirty (30) days' prior written notice to Tenant.
8.3 Waiver of Subrogation. Landlord and Tenant mutually agree that any property
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damage insurance carried by either shall provide for the waiver by the insurance
carrier of any right of subrogation against the other, and they further mutually
agree that, with respect to any damage to property, the loss from which is
covered by insurance then being carried by them, respectively, the one carrying
such insurance and suffering such loss releases the other of and from any and
all claims with respect to such loss to the extent of the insurance proceeds
paid with respect thereto.
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8.4 Insurance Company. All such insurance shall be maintained with companies
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reasonable acceptable to each of the parties and well rated by a recognized
national rating organization.
8.5 Blanket Policies. The policies may be carried under blanket policies
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maintained by Tenant if they comply with the provisions of this subsection.
8.6 Initial Policy. The policies to be maintained at all times hereunder shall
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contain coverage and provisions at least equal to those shown on Exhibit B.
8.7 Insurance Certificates. Each Party shall deliver to the other promptly after
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this Lease commences, insurers' certificates evidencing all insurance that such
party must maintain under this Lease, and, within thirty (30) days before any
such insurance expires, other certificates evidencing its renewal.
ARTICLE IX
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Indemnification
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Tenant hereby indemnifies, and shall protect and hold Landlord harmless from
and against all liabilities losses, claims, demands, costs, expenses, and
judgments of any nature arising, or alleged to arise, from or in connection with
the following: (a) any injury to, or the death of, any person or loss or damage
to property on or about the Premises or Property arising from or connected with
the Tenant's use of the Premises during the Term; (b) performance of any labor
or services or the furnishing of any materials or other property in respect of
the Premises or any part thereof by or at the request of Tenant.
Landlord hereby indemnifies and shall protect and hold Tenant harmless from
and against all liabilities, losses, claims, demands, costs, expenses, including
reasonable attorneys' fees, and judgments of any nature arising, or alleged to
arise, from or in connection with any injury to, or the death of any person or
loss or damage to property on or about the Property arising from or connected
with the performance by Landlord, its employees, agents or servants of any of
its obligations under this Lease or arising out of the gross negligence or
willful misconduct of the Landlord, its employees, agents or servants.
Notwithstanding the foregoing, Landlord and Tenant hereby release each other
from liability for loss or damage occurring on or to the Premises or the
Building or to contents of either thereof, caused by fire or other hazards
covered by fire and extended coverage insurance policies which are maintained as
provided for in Article VIII and each waives all rights of recovery against the
other for such loss or damage.
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ARTICLE X
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Right of First Refusal To Rent Additional Space
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If at any time during any term of this Lease all or any portion of the World
Gym Space, being Space A as shown on Exhibit A, is free of that tenant's
existing leasehold interest, Tenant shall have a first right and option to lease
said space. Landlord shall immediately notify the Tenant in writing as and when
Space A becomes vacant and shall offer to lease Space A to the Tenant. Tenant
shall have a period of thirty (30) days from the receipt of the notice to
exercise its option to lease Space A. If the option is exercised in writing
within the thirty (30) day period, then this Lease shall be amended to include
Space A as part of the Premises of this Lease for the balance of the Initial
Term and the Extended Term at the same per square foot price paid for Basic Rent
and Additional Rent and upon all other terms and conditions as set forth in this
Lease.
ARTICLE XI
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Condemnation and Casualty
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11.1 Condemnation or Insurance Awards. Tenant hereby assigns to Landlord any
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award or payment on account of any Taking which is payable in connection with
the Property. However, Tenant shall be entitled to that portion of the net award
representing payment for its leasehold interest, Tenant's improvements, trade
fixtures, moving expenses, business interruption, or loss of profits. All
amounts paid pursuant to an agreement with a condemning authority in connection
with any Taking shall be deemed to constitute an award on account of such
Taking. This Lease shall control the rights of both parties in any such award,
and any contrary provision of any present or future law is hereby waived.
In the event of fire or other destruction to such property, Landlord agrees
to immediately collect or cause to be collected the insurance proceeds and to
thereupon turn them over to an Insurance Trustee to be agreed upon between the
parties, to be disbursed for the Restoration of the Premises by the Tenant as
provided for herein.
11.2 Notice. If there is any damage to or destruction of the Property or if any
------
proceedings or negotiations are instituted which do or may result in a Taking,
each party will promptly give notice thereof to the other, describing its nature
and extent.
11.3 Restoration. Subject to subsection 11.8, Tenant will, upon receipt of the
-----------
Net Award from the Insurance Trustee, promptly commence and complete Restoration
of the Premises in accordance with plans and specifications to be prepared by
Tenant. Within ninety (90) days after the occurrence, Tenant shall prepare plans
and specifications reflecting the requisite nature and scope of the Restoration
improvements and submit copies of them to
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Landlord for its approval. The plans and specifications shall be deemed approved
by Landlord unless it notifies Tenant, within ten (10) days after receipt, of
any reasonable objections to them, and specifies the nature of the objections.
Landlord shall not unreasonably withhold, delay or condition its approval of the
final plans and specifications.
11.4 Contractor Bids, Contracts. Within ten (10) days after Landlord has
--------------------------
approved or is deemed to have approved the plans and specifications, Tenant
shall solicit a bid from one or more reputable and responsible contractors
selected by the Tenant for the construction and completion of the Restoration
improvements, which bid request shall require the bid to be submitted within a
reasonable time. Within thirty (30) days after receipt of bid(s), Tenant shall
designate the contractor who has submitted the bid acceptable to the Tenant to
construct the Restoration improvements and shall thereafter forward to Landlord
a copy of the general construction contract to be executed by Tenant.
11.5 Completion Date. The Insurance Trustee shall turn over to Tenant the Net
---------------
Award held by it in conformance with the provisions of the construction contract
as work progresses upon request of the Tenant and Tenant shall diligently
proceed with the construction of the Restoration improvements and shall complete
them within the time period provided for in the construction contract, but this
date shall be extended for all delays in construction resulting from causes
provided for in Section 15.5 hereof.
11.6 Work Standards and Completion. Tenant shall cause the general contractor to
-----------------------------
construct the Restoration improvements in a good and workmanlike manner and in
material compliance with plans and specifications and all Legal Requirements.
11.7 Landlord Inspection and Work. During the course of construction, Landlord
----------------------------
or its representatives may enter upon the Premises after notice at all
reasonable times for the purpose of inspecting the construction to determine
that the work is being completed in accordance with the plans and specifications
and General Construction Contract.
11.8 Termination Events. A Material Taking shall be a Taking of all of the
------------------
Property or such portion which Tenant determines shall render the remaining
Premises unsuitable for Tenant's continued use and occupancy. This Lease, at the
election of the Tenant, made within thirty (30) days of (i) a Material Taking
shall terminate as of the date of the occurrence of the Material Taking, or (ii)
a casualty loss or damage if the damage or destruction occurs during the last
three (3) years of the Initial Term or during the last three (3) years of the
Extended Term. In any such event, the Basic Rent, Additional Rent, and other
payments to be made by Tenant shall be apportioned as of the date of the
occurrence or Taking and Tenant shall have no obligation to commence any
Restoration and all Casualty Insurance proceeds
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obtained pursuant to Section 8.2 hereof shall be retained by the Landlord.
11.9 Tenant's Failure to Restore. If Tenant does not commence Restoration in
---------------------------
accordance with the terms herein, or does not prosecute the Restoration with due
diligence, except if such failure is excusable due to Force Majeure, Landlord,
upon sixty (60) days' notice to Tenant, may either (i) commence and complete
Restoration at Landlord's expense, in which event Tenant shall make the Net
Award available to Landlord for such purpose, or (ii) terminate this Lease,
unless within said sixty (60) day period Tenant shall prosecute the Restoration
with due diligence.
11.10 Rent Abatement. Upon damage or destruction to the Property or upon its
--------------
Taking which does not result in termination of the Lease, the Basic Rent,
Additional Rent, and all other payments to be made by Tenant hereunder shall
xxxxx as of the date of the occurrence. In the case of partial damage,
destruction or Taking which does not cause Tenant to discontinue use of the
Premises, the above payments shall be equitably apportioned.
ARTICLE XII
-----------
Defaults and Remedies
---------------------
12.1 Events of Default.
-----------------
(a) If Tenant shall default in the performance of any of its obligations to
pay rent, Annual Basic or Additional, hereunder and if such default shall
continue for fifteen (15) days after receipt by Tenant written notice from
Landlord designating such default, or if within sixty (60) days after receipt by
Tenant of written notice from Landlord to Tenant specifying any other default or
defaults, Tenant has not commenced diligently to correct the default or defaults
so specified or has not thereafter diligently pursued such correction to
completion, or (b) if any assignment shall be made by Tenant for the benefit of
creditors, or (c) if Tenant's leasehold interest shall be taken on execution, or
(d) if a petition is filed by Tenant or any guarantor of Tenant for adjudication
as a bankrupt, or for reorganization or an arrangement under any provision of
the Bankruptcy Act as then in force and effect, or (e) if an involuntary
petition under any of the provisions of said Bankruptcy Act is filed against
Tenant or any guarantor of Tenant and such involuntary petition is not dismissed
within sixty (60) days thereafter, then, and in any of such cases, after the
expiration of the applicable notice and grace period provided for herein,
Landlord lawfully may, in addition to and not in derogation of any remedies for
any preceding breach of covenant, immediately or at any time thereafter and
without demand but after notice to quit and with process of law enter into and
upon the Premises or any part thereof in the name of the whole or mail a notice
of termination
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addressed to Tenant at the Premises, and repossess the same as of Landlord's
former estate.
12.2 Remedies. If there is any default under the above Section 12.1 specified
--------
beyond any applicable notice or cure period provided for herein, then and in any
of said events, the Landlord may at that time, in its sole discretion, elect to
terminate this Lease, and in the event of such termination, may at any time
thereafter without re-entry recover possession thereof in the manner prescribed
by the statute relating to summary process; it being understood and agreed that
no demand for the rent and no re-entry for condition broken, as at common law,
shall be necessary to enable the Landlord to recover such possession pursuant to
the statute relating to summary process, but that all right to any such demand
or any such re-entry is expressly waived by the Tenant; and it is hereby further
agreed between the parties hereto that whenever this Lease shall terminate,
either by lapse of time or by virtue of any of the express provisions herein, or
otherwise, the Landlord shall not be liable to the Tenant for any part of the
rentals paid by the Tenant under the terms of this Lease.
12.3 Any suit brought to collect the deficiency for any month shall not
prejudice in any way Landlord's rights to collect the deficiency for any
subsequent month by a similar proceeding. Landlord may make all alterations,
repairs, replacements, and decorations in the Premises that it, in its sole
judgment, considers advisable and necessary for the purpose of reletting the
Premises. Such action by Landlord shall not operate or be construed to release
Tenant from its liability under this Lease. Landlord shall use its best effort
to mitigate all damages and to relet the Premises if there is any Event of
Default by Tenant resulting in a termination of lease or a repossession of the
Premises. Nothing contained in this Lease shall, however, limit or prejudice the
right of Landlord to prove for and obtain in proceedings for bankruptcy or
insolvency by reason of the termination of this Lease, an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be proved, whether or not
the amount be greater, equal to or less than the amount of the loss or damages
referred to above.
12.4 Remedies Cumulative. Any and all rights and remedies which Landlord may
-------------------
have under this Lease, and at law and equity, shall be cumulative and shall not
be deemed inconsistent with each other, and any two or more of all such rights
and remedies may be exercised at the same time insofar as permitted by law.
12.5 Landlord's Right to Cure Defaults. If Tenant shall default in the
---------------------------------
performance of any covenant required to be performed by it under the Lease,
Landlord may, but shall not be obligated to, cure or perform the same for the
account and at the expense of the Tenant at any time, following thirty (30)
days' prior written notice to the Tenant, except in cases of emergency
-17-
when no notice could be reasonably provided, and whenever the Landlord so
elects, all reasonable and necessary costs and expenses incurred by the
Landlord, including reasonable attorneys' fees, in curing a default or
performing the obligations of the other shall be paid within thirty (30) days of
receipt of invoices by the Tenant.
12.6 Effect of Waivers of Default. No consent or waiver, express or implied, by
----------------------------
Landlord to or of any breach of any covenant, condition or duty of Tenant shall
be construed as a consent or waiver to or of any other breach of the same or any
other covenant, condition or duty.
ARTICLE XIII
-------------
Option to Purchase Property
---------------------------
At the time of the execution of this Lease Agreement, the Landlord shall
execute and deliver to the Tenant the Option Agreement and Notice of Option
Agreement attached as Exhibit D.
ARTICLE XIV
-----------
Representations by Landlord
---------------------------
Landlord covenants, warrants and represents that (i) it is the owner in fee
simple absolute of the Property and Premises situated therein and has good and
marketable title thereto; (ii) Landlord has full right and lawful authority to
execute this Lease for the term, in the manner, and upon the conditions and
provisions herein contained; (iii) there is no deed or lease restriction or
other legal impediment to the use of the Premises for the purposes for which
they are let hereunder; (iv) Landlord is a partnership duly formed, validly
existing and in good standing under the laws of the State of Connecticut; (v)
neither the execution by Landlord of this Lease nor the performance by Landlord
of the terms hereof will conflict with or violate any other agreement or
instrument or any writ, order or decree to which Landlord is a party or by which
Landlord is bound; (vi) there is no litigation currently pending or, to the best
of Landlord's knowledge, threatened against Landlord or any partner or affiliate
of Landlord which could adversely affect Landlord's ability to perform any of
its obligations hereunder; (vii) so long as Tenant is not in default hereunder,
Landlord agrees to execute landlord's waivers in form and content reasonably
satisfactory to Landlord in conjunction with the financing of Tenant's
improvements, fixtures, inventory and equipment; and (viii) neither World Gym,
Inc., nor any other third party has any option or right to lease any portion of
the Premises nor claim thereto.
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ARTICLE XV
----------
Miscellaneous Provisions
------------------------
15.1 Notice from One Party to the Other. Any notice from Landlord to Tenant or
----------------------------------
from Tenant to Landlord shall be deemed duly served if delivered by hand, if
mailed by registered or certified mail, if sent by courier, if to Tenant, at the
Original Address of Tenant or such other address as Tenant shall have last
designated by notice in writing to Landlord and, if to Landlord, at the Original
Address of Landlord or such other address as Landlord shall have last designated
by notice in writing to Tenant. Service of notice, however, is subject to the
condition subsequent that there is proof that the party to whom the notice is
sent actually received the notice.
15.2 Quiet Enjoyment. Landlord agrees that upon Tenant's paying the rent and
---------------
performing and observing the agreements, conditions and other provisions on its
part to be performed and observed, Tenant shall and may peaceably and quietly
have, hold and enjoy the Premises during the Lease Term without any manner of
hindrance or molestation from Landlord or anyone claiming under or through
Landlord, subject, however, to the terms of this Lease and to any mortgage which
may be superior to this Lease.
15.3 Lease Not to be Recorded. The parties agree that they will not record this
------------------------
Lease, but will execute and record the short form Notice of Lease and Option
attached as Exhibit G.
15.4 Bind and Inure: Limitation of Landlord's Liability. The obligations of this
--------------------------------------------------
Lease shall run with the land, and this Lease shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the original Landlord named herein shall only be liable for
obligations accruing before the beginning of the Lease Term, and thereafter
during the period that the Property shall be owned by the original Landlord.
15.5 Force Majeure. In any case where either party hereto is required to do any
-------------
act (other than Tenant's obligation to pay rent) delays caused by or resulting
from Acts of God, war civil commotion, fire or other casualty, labor
difficulties, shortages of labor, materials or equipment, government regulations
or other causes beyond such party's reasonable control shall not be counted in
determining the time during which such act shall be completed, whether such time
be designated by a fixed date, a fixed time or "a reasonable time".
15.6 Applicable Law and Construction. This Lease shall be governed by and
-------------------------------
construed in accordance with the laws of the State of Connecticut. If any term
of this Lease, or the application thereof to any person or circumstances, shall
to any extent be invalid or unenforceable, the remainder of this Lease, or the
application of such term to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not
-19-
be affected thereby, and each term of this Lease shall be valid and enforceable
to the fullest extent permitted by law. There are no oral or written agreements
between Landlord and Tenant affecting this Lease. This Lease may be amended
only by instruments in writing executed by Landlord and Tenant. The titles of
the several Articles and Sections contained herein are for convenience only and
shall not be considered in construing this Lease.
15.7 Investment Tax Credit. It is the parties' intent that Tenant shall at all
----------------------
times be considered the owner and original user of all fixtures, trade
fixtures, equipment,and other property upon or used in connection with the
Premises and that Tenant shall be entitled to and may claim an investment tax
credit in accordance with any applicable provisions of the Internal Revenue
Code.
15.8 Time of Essence. Time is expressly declared to be of the essence of this
---------------
Lease.
15.9 Entire Agreement. This Lease supersedes all agreements previously made
----------------
between the parties relating to its subject matter. There are no other
understandings or agreements between them.
15.10 Arbitration. Any controversy or claim arising out of or relating to this
-----------
Lease shall be conclusively settled by arbitration in New Haven, Connecticut in
accordance with the commercial arbitration rules of the American Arbitration
Association and judgment upon the award obtained in such arbitration may be
rendered in any court having jurisdiction thereof, and such determination shall
not be subject to judicial review.
15.11 Nondisturbance Agreement. Upon execution of the herein Lease Agreement,
------------------------
Landlord shall provide to Tenant a fully executed "Subordination, Nondisturbance
and Attornment Agreement" in form and manner as set forth in Exhibit E hereto,
from each mortgagee or other lien holder whose lien shall encumber either the
Premises or the Property.
15.12 Estoppel Certificates. Within thirty (30) days following any written
---------------------
request which Landlord or Tenant (the "Requesting Party") may make from time to
time to the other party hereto (the "Responding Party"), the Responding Party
shall execute and deliver to the Requesting Party, mortgagee or prospective
mortgagee, a sworn statement certifying as to: (a) the Commencement Date of this
Lease, (b) the fact that this Lease is unmodified and is in full force and
effect, or if there have been modifications hereto, that this Lease is in full
force and effect, as modified (and attaching a copy of such modifications), (c)
the date to which the Base Rent has been paid, the amount of such Base Rent,
Tenant's Proportionate Share and Tenant's current monthly payments on account of
estimated Operating and Tax
- 20 -
Expenses, (d) the fact that there are no current defaults under this Lease nor
any events or conditions which, with notice or the lapse of time or both, would
constitute a default, by the Responding Party or, to the best of the Responding
Party's knowledge, the Requesting Party, except as specified in the Responding
Party's statement, (e) the extent to which any options to extend the Term or
expand the Premises have been exercised by Tenant, (f) the amount of any
Security Deposit held by Landlord, (g) the fact that Tenant has not assigned,
pledged or transferred any interest in the Lease or sublet any portion of the
Premises or, if Tenant has so assigned, pledged, transferred or sublet, the
extent of such assignment, pledge, transfer or subletting, (h) to the best of
the Responding Party's knowledge, all of Landlord's obligations with respect to
the installation of improvements to the Premises to prepare them for Tenant's
use have been satisfied (or the extent to which they have not been satisfied),
(i) that (if the Responding Party is Tenant) no actions, whether voluntary or
otherwise, are pending against Tenant under any bankruptcy laws of the United
States or any state thereof, and (j) such other matters reasonably requested by
the Requesting Party.
15.13 Moving Expenses. Tenant agrees to contribute up to Eighty-five Thousand
---------------
Dollars ($85,000) toward all of Landlord's costs incurred in connection with the
relocation of the two (2) existing tenants.
15.14 Signage. Tenant, at its sole cost and expense, may erect and maintain such
-------
signage on the exterior of the Building and on the Property as Tenant may elect,
provided only that all such signage shall comply with all applicable building
and zoning requirements.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first written above.
Signed, sealed and delivered
in the presence of:
COMMERCIAL BUILDING ASSOCIATES
By /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------
Xxxxxxx X. Xxxxx, Xx.
General Partner
By /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxx
General Partner
-21-
NEUROGEN CORPORATION
By /s/ Xxxxx Xxxxx
----------------------------
Its Vice President - Finance
STATE OF CONNECTICUT )
: ss. Branford July 26, 1995
COUNTY OF NEW HAVEN )
Personally appeared Xxxxxxx X. Xxxxx, Xx., a General Partner of Commercial
Building Associates, signer and sealer of the foregoing instrument, and he
acknowledged the same to be his free act and deed as such general partner, and
the free act and deed of said Commercial Building Associates, before me.
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Commissioner of the Superior Court
STATE OF CONNECTICUT )
: ss. Branford July 26, 1995
COUNTY OF NEW HAVEN )
Personally appeared Xxxxxx X. Xxxxxxxxx, a General Partner of Commercial
Building Associates, signer and sealer of the foregoing instrument, and he
acknowledged the same to be his free act and deed as such general partner, and
the free act and deed of said Commercial Building Associates, before me.
/s/ Xxxxxxx Xxxxxxxxx
----------------------------------
Commissioner of the Superior Court
STATE OF CONNECTICUT )
: ss. Branford July 26, 1995
COUNTY OF NEW HAVEN )
Personally appeared Xxxxx Xxxxx, V.P. Finance of Neurogen Corporation,
signer and sealer of the foregoing instrument, and he acknowledged the same to
be his free act and deed as such officer, and the free act and deed of said
Neurogen Corporation, before me.
/s/ Xxxxxx Xxxxxxxxxx
---------------------------------
Notary Public
-22-
