Exhibit 10.5
SUBLEASE AGREEMENT
THIS SUBLEASE (this "Sublease") dated this 12th day of May, 1999, is
entered into by and between Blue Cross and Blue Shield of North Carolina,
hereinafter referred to as "Sublandlord," and Trimeris, Inc., hereinafter
referred to as "Subtenant."
WHEREAS, Sublandlord, as tenant, and Hamad Jassim Althani, as landlord,
hereinafter referred to as "Prime Landlord," entered into that certain lease
agreement dated November 8, 1994, as amended by first amendment to lease
agreement dated December 15, 1995, and second amendment to lease agreement dated
February 1999 (as amended, the "Prime Lease") pertaining to the rental of
approximately 15,658 rentable square feet known as Suite 390, which is the
entire third floor of that certain building known as South Park Office Center,
located at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxxxx (the
"Premises").
WHEREAS, Sublandlord desires to sublet the Premises to Subtenant, subject
to the written consent of the Prime Landlord, and Subtenant desires to sublet
the Premises from Sublandlord in accordance with the terms and provisions
provided herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Sublandlord and Subtenant hereby agree as follows:
1. The Sublandlord hereby sublets and demises to the Subtenant, and the
Subtenant hereby leases from the Sublandlord, the Premises, together
with Sublandlord's rights in all improvements located thereon and with
all rights, privileges and appurtenances thereto or therein to the
extent of the Premises, for a term commencing on the day that this
Sublease is fully executed by the parties, approved in writing by
Prime Landlord, and the Premises is delivered to Subtenant, but in
no event later than May 15, 1999; and expiring on December 31, 2001
(the "Term").
2. Subtenant shall pay Sublandlord monthly rent throughout the Term, in
advance on the first day of each and every month of the Term in the
amounts set forth in the Prime Lease and adjusted annually by Prime
Landlord. Sublandlord shall notify Subtenant promptly of any increase
in rent once Sublandlord has received notice from Prime Landlord.
Subject to paragraph 10 hereof, all rent and any other sums due to
Sublandlord shall be paid to Sublandlord at Attn: Xxxxx Xxxxxxxxxxxx
Blue Cross and Blue Shield of North Carolina, X.X. Xxx 0000, Xxxxxx,
Xxxxx Xxxxxxxx 00000 or at such other address directed by Sublandlord.
The first monthly installment of rent, Twenty-three Thousand Six
Hundred Fifty Six and 63/100 ($23,656.63), shall be paid and delivered
to Sublandlord at execution of this Sublease by Subtenant, provided,
however, that if the Term commences on a date other than the first day
of the month, rent for the first month of the Term shall be prorated
based on the number of days remaining in the first month of the Term.
3. In addition to the monthly rent stated above, Subtenant shall also
reimburse Sublandlord for Sublandlord's proportionate share of the
operating expense increases within 10 days of receiving invoice, as
outlined in the Prime Lease, which amounts shall be paid to Sublandlord
upon receipt of invoice. Sublandlord shall notify Subtenant promptly of
any change in such operating expenses once Sublandlord has received such
information from Prime Landlord.
4. Unless otherwise defined in this Sublease, all capitalized terms used
herein that are defined in the Prime Lease, shall have the meaning
ascribed to such term in the Prime Lease.
5. Except as otherwise provided in this Sublease, the terms, provisions and
conditions contained in the Prime Lease are incorporated herein by
reference, and are made a part hereof as if set forth at length herein;
provided, however, that:
a. each reference in the Prime Lease to "Lease" shall be deemed a
reference to "Sublease";
b. each reference in the Prime Lease to the "leased premises" or
"Leased Premises" shall be deemed a reference to the "Premises";
c. each reference in the Prime Lease to "Lessor" and "Lessee" shall
be deemed a reference to "Sublandlord" and "Subtenant,"
respectively; provided, however, the following provisions of the
Prime Lease are expressly not incorporated herein by reference:
paragraphs 2, 22, 23, 35(c), 35(d), 35(g), and 37; the section
entitled "Lessor's Liability"; the section entitled "Lessor
Improvements on exhibit A; exhibit D; exhibit F; paragraphs 7 and
8 of the first amendment to lease agreement;
d. except as provided in this Sublease, (i) all terms, covenants,
and conditions which Sublandlord is bound to comply with under
the Prime Lease shall be binding upon Subtenant hereunder, (ii)
Subtenant agrees to observe or perform the terms, covenants and
conditions on its part to be observed and performed by
Sublandlord as tenant under the Prime Lease and Subtenant agrees
to be bound by the provisions of the Prime Lease, and (iii) the
remedies of the parties, as Subtenant and Sublandlord hereunder
shall be the same as the respective remedies of the Lessor and
Lessee under the Prime Lease;
e. Sublandlord shall have no obligation or liability to Subtenant in
the event that the Prime Landlord fails to perform any of its
obligations under the Prime Lease, unless such failure arose as a
result of Sublandlord's defaulting in the performance of any of
Sublandlord's obligations under the Prime Lease beyond any
applicable cure periods contained therein, and Subtenant shall
look solely to the Prime Landlord for the performance of any such
obligations; provided, however, Sublandlord shall use its
reasonable good faith efforts to cooperate with Subtenant to
obtain Prime Landlord's performance of its obligations or to
cause Prime Landlord to perform its obligations; and
f. each obligation of tenant under the Prime Lease assumed hereunder by
Subtenant by operation of this Sublease shall commence as of the
Commencement Date, and in no event shall Subtenant be liable for any
costs, claims, damages, or violations of the Lease caused by
Sublandlord or on behalf of Sublandlord prior to the Commencement
Date.
6. Sublandlord shall not commit or permit to be committed any act or
omission which shall violate any term or condition of the Prime Lease
or do anything which would result in a default by it under the Prime
Lease, cause the Prime Lease to be terminated, rejected or forfeited,
or cause the Sublease or the Term to be terminated or forfeited.
Sublandlord covenants that it shall not, by any action, avoid or seek
to avoid the observance or performance of the terms to be observed or
performed by Sublandlord under the Prime Lease.
Page 2
7. Sublandlord agrees that it will not modify, amend or change the Prime
Lease in any manner that would affect the Subtenant's right hereunder
without Subtenant's prior written consent and that it will not do
anything or permit anything to be done that would cause the Sublease or
the Term hereof to be terminated or forfeited.
8. Sublandlord represents and warrants, that as of the date hereof, (i)
neither Prime Landlord nor Sublandlord are in default (or with the mere
passage of time or the giving of notice would ripen into a default) under
the terms of the Prime Lease; and (ii) a true, correct and complete copy
of the Prime Lease is attached hereto as exhibit A.
9. Notwithstanding anything in this Sublease to the contrary, Sublandlord
hereby irrevocably appoints Subtenant as its attorney-in-fact coupled with
an interest to seek performance of Prime Landlord's obligations under the
Prime Lease directly from Prime Landlord to the extent that such
obligations are those which Sublandlord owes to Subtenant under this
Sublease.
10. Intentionally omitted.
11. Sublandlord covenants and agrees to deliver to Subtenant, within one
(1) business day of receipt by Sublandlord, copies of any notices of
default or of events, which with the further passage of time could
ripen into a default, received by Sublandlord from Prime Landlord under
the Prime Lease. Upon receiving any other written notice, statement or
other written communication from Prime Landlord which pertains to the
Premises, the party receiving such notice shall forward a copy of such
notice to the other.
12. Subtenant agrees at its expense to keep and maintain the Premises in good
repair and in a good, sanitary and safe condition and to return the
Premises to Sublandlord at the end of the Term in as good a condition as
received, normal wear and tear and casualty excepted.
13. Subtenant acknowledges that this Sublease shall not be effective unless
and until Prime Landlord's written consent is given.
14. It is understood and agreed upon by all parties hereto that neither the
Sublease of the above described Premises, nor anything contained in
this agreement shall release the Sublandlord from its duty and
obligation to perform and be bound by all the covenants, terms, and
conditions contained in the Prime Lease with the Prime Landlord
provided, however, that Subtenant shall perform all such duties and
obligations and be bound by such covenants, terms, and conditions in
the first instance.
15. Sublandlord agrees that if Subtenant pays all rent and other sums due
hereunder and performs all of the terms and conditions of this Sublease
and of the Prime Lease required hereunder, that Subtenant's quiet
enjoyment of the Premises for the Term shall not be disturbed or
interfered with by Sublandlord.
Page 3
16. Notwithstanding anything herein to the contrary, Subtenant agrees that it
will not assign this Sublease or sublet the Premises without the prior
written approval of the Prime Landlord and Sublandlord, which approval by
Sublandlord will not be unreasonably withheld, conditioned or delayed.
17. During the term of this Sublease, Subtenant, at its sole cost and
expense and for the mutual benefit of the Sublandlord, Prime Landlord
and Subtenant shall carry and maintain comprehensive public liability
insurance, including property damage, insuring Sublandlord, Prime
Landlord, and Subtenant against liability for injury to persons or
property occurring in or about the Premises arising out of the use or
occupancy thereof, and Subtenant shall name Sublandlord and Prime
Landlord as additional insureds hereunder. Said liability insurance
shall be in amounts as called for in the Prime Lease. On or before the
commencement of this Sublease, Subtenant shall deliver to Sublandlord a
copy of a certificate of insurance evidencing that such insurance has
been purchased and is in effect. Any insurance which Subtenant is
required to maintain under this Sublease shall include a provision
which requires the insurance carrier to give Prime Landlord and
Sublandlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage. Further, if Subtenant
fails to maintain said liability insurance, this act shall be a
material breach of this Sublease, and Sublandlord may elect any of its
remedies under this Sublease, and, in addition, Sublandlord may obtain
such insurance on behalf of Subtenant, in which case Subtenant shall
reimburse Sublandlord for the costs thereof within fifteen (15) days
after receipt of a statement indicating the cost of such insurance.
18. Subtenant shall not do or permit to be done or omit or permit to be
omitted any act or thing that will constitute or cause a breach or
violation of any of the terms, covenants or conditions of the Prime
Lease or this Sublease. Each party will indemnify and hold harmless
the other from and against all losses, costs, damages, expenses and
liability, including reasonable attorneys' fees actually incurred,
which may be incurred or pay out by reason of injuries to person or
property occurring in, on or about the Premises, occasioned by such
party's use, occupancy, negligence or intentional acts or by reason of
any breach or default of this Sublease.
19. Sublandlord hereby represents that to the best of its knowledge it
knows of no facts or circumstances related to environmental matters
concerning the Premises that could lead to any future environmental
claims, liabilities, responsibilities against Subtenant. Sublandlord
shall indemnify and hold Subtenant harmless from all costs, losses,
damages, liabilities or claims (including reasonable attorney's fees)
arising out of the operations or activities or presence of Sublandlord
on the Premises relating to environmental matters.
20. The Premises shall be delivered to Subtenant in AS-IS condition. Any
improvements to be performed within the Premises must have
Sublandlord's and Prime Landlord's prior written consent, which consent
by Sublandlord will not be unreasonably withheld, conditioned, or
delayed. Such improvements shall be paid for by Subtenant and removed
by Subtenant at the expiration of the Term if so required under the
Prime Lease and with all resulting damage to the Premises from such
removal also repaired to its original condition as at the commencement
of the Term by Subtenant at its sole cost and expense.
Page 4
21. Together with the payment made at Sublease execution of the first
monthly installment of rent, and expenses, Subtenant shall deposit with
Sublandlord the sum of Twenty-three Thousand Six Hundred Fifty Six and
63/100 dollars ($23,656.63), as security for Subtenant's obligations
under this Sublease. Sublandlord will not be required to keep the
security deposit separate from its general funds and Subtenant shall
not be entitled to interest on the security deposit. The security
deposit will not be a limitation on Sublandlord's damages or
other rights under this Sublease. If Subtenant pays all such due
amounts and performed all of its obligations under this Sublease,
Sublandlord will return the unused portion of the security deposit to
Subtenant within thirty (30) days after the expiration or earlier
termination of the Term.
22. The parties also agree that (a) Subtenant shall use and occupy the
Premises solely for uses permitted in the Prime Lease; (b)
Sublandlord's refusal to consent to or to approve any matter or thing,
whenever Sublandlord's consent or approval is required under this
Sublease or under the Prime Lease, shall be deemed reasonable if Prime
Landlord has refused to give such consent or approval; provided
Sublandlord agrees to use reasonable efforts and good faith to assist
Subtenant in obtaining Prime Landlord's consent; (c) if for any reason
the term of the Prime Lease shall be terminated prior to the expiration
date of the Sublease, the Sublease shall thereupon be automatically
terminated, and Sublandlord shall not be liable to Subtenant by reason
thereof, unless such termination shall have been affected because of
the breach or default by Sublandlord under the Prime Lease not
occasioned by any breach or default by Subtenant, but Subtenant shall
be entitled whatever rights and remedies against the Prime Landlord
that may be available to Sublandlord in connection with such
termination, provided, however, that Subtenant shall receive from
Sublandlord prompt notice of any default under the Prime Lease by
Sublandlord and Subtenant shall have the right to cure such default;
and (d) Subtenant acknowledges and agrees that in the event Subtenant
fails to vacate the Premises when required hereunder, Sublandlord may
incur damages under the terms of the Prime Lease, in which event,
Subtenant agrees to indemnify and hold harmless Sublandlord from and
against any and all costs, expenses and liabilities (including
reasonable attorneys' fees) incurred by Sublandlord arising out of such
failure.
23. Any notice required to be given by either party to the other shall be
in writing and shall be (a) delivered personally, and the giving of
such notice shall be complete on the date of delivery; (b) sent by
reputable overnight delivery service, and the giving of such notice
shall be complete on the immediately succeeding business day after such
notice is deposited with such delivery service, or (c) sent by United
States registered or certified mail, postage prepaid, return receipt
request, and the giving of such notice shall be complete on the
immediately succeeding second business day after such notice is
deposited into the U.S. mail; at the following addresses:
If to Sublandlord:
Blue Cross and Blue Shield of North Carolina
Xxxx Xxxxxx Xxx 0000
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx
Senior Director - Corporate Services
If to Subtenant:
Trimeris, Inc.
Two University Place, Suite 100
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Financial Officer
Page 5
With a copy to Prime Landlord:
Hamad Jassim Althani by Xxxxx Xxxxx
c/o CB Xxxxxxx Xxxxx
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx
Either party may change its address by written notice to the other.
24. Sublandlord and Subtenant each represent and warrant to the other that it
had no dealings with any broker or agent in connection with the Sublease
except for Vector Properties, LLC and Corporate Realty Advisors.
Sublandlord shall be responsible for payment of any and all fees payable
to Vector Properties, LLC and Corporate Realty Advisors as a result of
this Sublease.
25. To the extent any terms or provisions or this Sublease are inconsistent
with or shall conflict with any other terms or provisions of the Prime
Lease, the terms and provisions of this Sublease shall control.
26. This Sublease and the exhibits incorporated herein by reference set forth
all of the agreements, covenants, representations and warranties of
Sublandlord and Subtenant. No modification or amendment of this Sublease
shall be binding or effective unless in writing signed by Sublandlord and
Subtenant.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease the day
and year first written above.
Blue Cross and Blue Shield of North
Carolina
By:/s/ Xxxxxxx X. Xxxx XX
-------------------------------------
Name: Xxxxxxx X. Xxxx XX
-----------------------------------
Its: President
------------------------------------
Date: May 12, 1999
-----------------------------------
Trimeris, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Its: President
------------------------------------
Date: April 27, 1999
-----------------------------------
Page 6
CONSENT OF PRIME LANDLORD TO SUBLEASE
The Prime Landlord, Hamad Jassim Althani, as landlord, entered into that
certain Prime Lease pertaining to the rental of the Premises, and hereby
consents to the sublease of the Premises under the terms and conditions set
forth in the Sublease dated as of May 12, 1999, by and between Blue Cross
and Blue Shield North Carolina and Trimeris, Inc., to which this consent is
attached. This consent shall apply only to this Sublease and shall not be deemed
to be consent to any other sublease or assignment by Sublandlord. The Prime
Lease remains in full force and effect and the obligations of the Prime Landlord
and the Sublandlord pursuant to the Prime Lease are not modified or extinguished
by this Sublease. Prime Landlord agrees to accept the tender of rent and the
performance of other obligations of Sublandlord under the Prime Lease from
Subtenant as if tendered or performed by Sublandlord.
Prime Landlord represents and warrants to Subtenant, that as of the date
hereof, (i) neither Prime Landlord nor Sublandlord are in default (or with the
mere passage of time or the giving of notice would ripen into a default) under
the terms of the Prime Lease; (ii) a true, correct and complete copy of the
Prime Lease is attached hereto as exhibit A; and (iii) no further consent or
approval is required of any lender having an interest in the Premises or any
other party claiming an interest in and to the Premises through Prime Landlord
to the sublease of the Premises.
As a material inducement for the Subtenant to enter into the Sublease,
Prime Landlord hereby agrees with the Subtenant that after the commencement of
occupancy of the Premises by Subtenant, if Sublandlord shall fail at any time to
make any payment or perform any obligation as tenant under the Prime Lease in
accordance with its terms and if Prime Landlord shall then declare Sublandlord
in default under the Prime Lease, Prime Landlord shall not exercise any remedy
for the Sublandlord's default which would affect any rights of the Subtenant
under the Sublease, including, but not limited to a termination of the
Sublandlord's rights of possession to the Premises under Prime Lease, or a
termination of the Prime Lease, without in each instance the Prime Landlord
giving the Subtenant notice of such default under the Prime Lease with
particularity at the address set forth in Sublease and an opportunity of the
Subtenant to cure such Sublandlord's default. If the Sublandlord's default under
Prime Lease is a monetary default, Subtenant shall have the right, but not the
obligation, over a period of ten (10) days after written notice from Prime
Landlord of the default to make such payment, and if the Sublandlord's default
is a non-monetary default, then Subtenant shall have the right, but not the
obligation, over a period of thirty (30) days after written notice from Prime
Landlord of the default to perform such obligation the subject of the default,
provided however, if such performance cannot be completed within such thirty
(30) day period, Subtenant shall be permitted to proceed with such cure for as
long as Subtenant continues and diligently proceeds to complete same, and upon
the performance by the Subtenant as set forth above, the default of the
Sublandlord under the Prime Lease shall be deemed cured. Prime Landlord agrees
to accept the performance by Subtenant as set forth herein as performance by the
Sublandlord under the provisions of the Prime Lease; provided, however, that the
performance by the Subtenant of the Sublandlord's obligations under the Prime
Lease in curing such default shall not prejudice the Subtenant's rights against
the Sublandlord.
Page 7
The execution of this consent by Prime Landlord is not a release by Prime
Landlord of Sublandlord of any of its duties and obligations under the Prime
Lease.
PRIME LANDLORD:
Hamad Jassim Althani
By:_____________________________________
Page 8
