EXHIBIT 10.6
SUBLEASE
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THIS AGREEMENT OF SUBLEASE made as of this 31/st/ day of July 1998, by and
between Inspire Pharmaceuticals, Inc., a Delaware corporation (hereinafter
referred to as "Sublessor") and SciQuest, Inc., a Delaware corporation having a
principal place of business and mailing address of 0000 Xxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxx Xxxxxxxx 00000 (hereinafter referred to as "Sublessee").
WITNESSETH:
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WHEREAS, on December 23/rd/, 1997, Sublessor, as Lessee, entered into a
Lease (which lease is hereinafter referred to as the "Master Lease") with Petula
Associates, Ltd., an Iowa corporation, (hereinafter referred to as the "Master
Lessor"), which lease concerns 5400 square feet of space in the building known
as Royal Center II in the Imperial Center office park and located at 0000
Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx Xxxxxxxx (the "Premises"); and
WHEREAS, Sublessee desires to sublease the Premises from Sublessor, and
Sublessor desires to sublease the Premises to Sublessee.
NOW, THEREFORE, in consideration of the rents and covenants hereinafter set
forth to be, paid and performed by Sublessee, Sublessor does hereby demise,
lease and let unto Sublessee, and the Sublessee does hereby lease and take from
Sublessor upon the terms and conditions hereinafter set forth the Premises, as
described in the Master Lease, which is attached hereto as Exhibit A and
incorporated herein by reference (hereinafter referred to as the "Subleased
Premises").
1. RELATIONSHIP T0 MASTER LEASE. The Sublease and all its terms,
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covenants and provisions are and each of them is subject and subordinate to (i)
the Master Lease under which Sublessor is in control of the Subleased Premises;
(ii) the rights as contained in the Master Lease of the owner or owners of the
Premises and/or the land and building of which the Subleased Premises are a
part; (iii) all rights of Master Lessor as contained in the Master Lease; and
(iv) to any and all mortgages or encumbrances now or hereafter afflicting the
Subleased Premises to which the Master Lease would be subordinated. Sublessee
expressly agrees that, if Sublessor's tenancy, control or right to possession of
the Subleased Premises shall terminate by expiration or any other cause, this
Sublease shall thereupon immediately cease and terminate and Sublessee shall
give immediate possession to Sublessor; provided however, that the liability of
the Sublessee to the Sublessor or the liability of the Sublessor to the
Sublessee for any termination caused by the applicable party's default under
this Sublease shall not be discharged by reason of such termination.
2. PERFORMANCE OF MASTER LEASE TERMS. With respect to the Subleased
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Premises, Sublessee shall receive all benefits which accrue to Sublessor under
the Master Lease as it relates to the Subleased Premises Sublessee hereby
expressly, and without condition or reservation, agrees to assume the obligation
for performance of all Sublessor's responsibilities under the Master Lease with
respect to the Subleased Premises and during the term hereof to be subject to
and bound by, and to faithfully and punctually perform and comply with all of
the covenants, conditions, stipulations, restrictions and agreements contained
therein except as excluded herein. Sublessee hereby agrees to indemnify and hold
harmless Sublessor from and against any loss, claim, damage, expense or injury
(including reasonable attorney's fees and court costs) which Sublessor may incur
as a result of Sublessee's failure to perform such obligations on behalf of
Sublessor. Sublessor covenants and agrees that if and so long as the Sublessee
fully, faithfully and punctually observes the covenants and conditions hereof
and of the Master Lease, Sublessee shall quietly enjoy the Subleased Premises,
subject, however, to the terms of this Sublease and the Master Lease.
3. TERM. The term of this Sublease shall commence on August 15, 1998
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("Commencement Date") and shall expire at midnight on August 14, 1999. Sublessee
shall have access to the Subleased Premises prior to August 15, 1998 for
purposes of installation of telecommunications wiring, equipment, and other
furnishings, provided, however, that all insurance and indemnification
provisions of this Sublease shall apply during any such early occupancy period.
Sublessee shall have the right to extend the term of this Sublease for an
additional term of six (6) months provided that Sublessee shall give Sublessor
at least ninety (90) days' prior written notice of its election to so extend,
time being of the essence with respect to such notice. Rent for such first
extension term shall be $4,837.50 per month. Sublessee shall also have the right
to extend the term of this Sublease for a second additional term of six (6)
months after the end of the initial extension term provided that Sublessee shall
give Sublessor at least one hundred and twenty (120) days' prior written notice
of its election to so extend, time being of the essence with respect to such
notice. Rent for such second extension term shall be the same as for the first
extension term. Sublessee's right to extend for the second extension term shall
be subject to Sublessor's election to notify Sublessee, within thirty (30) days
of Sublessor's receipt of Sublessee's notice of election to extend for a second
extension term, that Sublessor elects to occupy the Subleased Premises for
Sublessor's own purposes, in which event Sublessee shall not receive a second
extension of the term of this Sublease.
4. RENT. During each month of the one-year term of this Sublease,
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Sublessee covenants to pay Sublessor as base rent the sum of $4,612.50.
In addition to base rent, Sublessee shall pay to Sublessor, as additional
rent, Sublessor's proportionate share of taxes, insurance and ail building
operating costs and other pass-through items as required of Sublessor in the
Master Lease. Sublessee shall pay Sublessor such base rent and additional rent,
without offset or deduction, prior notice or demand, in advance on the first day
of each calendar month of the term hereof. If the Commencement Date is a day
other than the first day of a calendar month, base rent and additional rent for
the month in which the Commencement Date Occurs shall be prorated. All base rent
and additional rent shall be paid to Sublessor at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxx Xxxxxxxx 00000. Sublessee shall contract for and shall pay
for its own utilities and janitorial services. Sublessor shall provide notice to
Sublessee of the amount of any additional rent due from Sublessee at such time
as Sublessor receives such notice from Master Lessor or at such other time as
Sublessor becomes aware of the amount of any additional rent due from Sublessee
5. USE. Sublessee shall use the Subleased Premises for only those
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purposes permitted under Section 6 of the Master Lease.
6. CONDITION OF PREMISES. SUBLESSEE (i) ACCEPTS THE SUBLEASED PREMISES
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IN THEIR "AS IS" CONDITION ON THE COMMENCEMENT DATE HEREOF, (ii) ACKNOWLEDGES
THAT SUBLESSOR HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES CONCERNING
THE CONDITION OF THE SUBLEASED PREMISES OR THEIR FITNESS FOR THE USE INTENDED BY
SUBLESSEE, AND (iii) AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW THE
SUBLESSEE WAIVES ANY CLAIM IT HAS, MAY HAVE, OR OUGHT TO HAVE AGAINST THE
SUBLESSOR, BASED ON OR ARISING OUT OF THE CONDITION OF THE SUBLEASED PREMISES.
Sublessee shall, at all times during the term hereof, keep and maintain the
Subleased Premises in good condition and repair as required by the Master Lease.
Sublessee shall have the right to extend power poles from ceiling to floor to
support systems furniture provided that Sublessee shall remove the same prior to
the end of the term of this Sublease and shall repair any damage caused by such
installations and shall otherwise return the Subleased Premises to its original
configuration, ordinary wear and tear and loss by insured casualty excepted.
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7. INSURANCE AND INDEMNIFICATIONS. At all times during the term of this
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Sublease, Sublessee shall, at Sublessee's expense, keep in effect (i) a policy
of Comprehensive General Liability insurance with a reputable company in amounts
not less than $2,000,000 combined single limit and $2,000,000 property damage,
which policy shall name Sublessor and Master Lessor as additional insureds, (ii)
a policy of Workers' Compensation insurance in at least the statutory amounts-,
and (iii) insurance covering loss to Sublessee's personal property by fire or
other casualty. Sublessee shall otherwise comply in all respects with all
insurance provisions of the Master Lease. Except to the extent of matters caused
by the negligent acts or ommissions or the willful misconduct of Sublessor, its
agents, employees or contractors, from which matters Sublessor shall indemnify
and hold harmless Sublessee, Sublessee shall indemnify, defend and hold harmless
Sublessor from and against any loss, claim, damage, expense or injury to persons
or property caused by or arising out of (i) Sublessee's use of the Subleased
Premises, (ii) Sublessee's default in the performance of its obligations
hereunder,- or (iii) any negligent or intentional act or omission by Sublessee,
its agents, employees or contractors.
8. SURRENDER. At the expiration or earlier termination of this Sublease,
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Sublessee shall surrender the Subleased Premises to Sublessor in broom clean
condition in the same condition as on the Commencement Date hereof, ordinary
wear and tear excepted. Sublessee warrants and covenants that it will pay the
full cost of any repairs or maintenance necessary to restore the Subleased
Premises to the same condition as on the Commencement Date hereof, ordinary wear
and tear and loss by insured casualty excepted.
9. ASSIGNMENT AND SUBLETTING. Sublessee may not assign this Sublease or
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further sublet all or any part of the Subleased Premises without the prior
written consent of Sublessor, which consent shall not unreasonably be withheld.
conditioned or delayed, provided, however, that the provisions of Section 22 of
the Master Lease as to the respective rights and obligations of Landlord and
Tenant thereunder shall apply as to the respective rights and obligations of
Sublessor and Sublessee with respect to the matters set out therein.
10. DEFAULT. If Sublessee shall default in the payment of any base or
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additional rent hereunder within three (3) days of when due or if Sublessee
shall default in the performance of any of the other terms, covenants and
conditions of this Sublease or the Master Lease, then Sublessor may (i) avail
itself of any remedy available to the Master Lessor under the Master Lease; (ii)
avail itself of any statutory or other remedy provided by the laws of the state
in which the Subleased Premises are situated; (iii) re-enter, retake and
repossess the Premises through summary proceedings or an action of unlawful
detainer; and/or (iv) terminate this Sublease. Notwithstanding the foregoing,
Sublessee shall be entitled to written notice and a five (5) day cure period
with respect to the failure to pay any base or additional rent due hereunder as
follows: one (1) time during the term of this Sublease and one (1) time during
each renewal term, if any.
11. ACCESS. Sublessor shall be permitted access to the Subleased Premises
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at all reasonable times upon reasonable advance notice, or at any time in case
of emergency, to inspect the Subleased Premises or to show the Subleased
Premises to other potential subtenants. provided however, that, without the
prior consent of Sublessee, which shall not unreasonably be withheld,
conditioned, or delayed, Sublessor's right to enter the Subleased Premises to
show it to potential subtenants shall only apply (1) for the ninety (90) day
period after Sublessee fails to provide Sublessor with written notice of Its
intention to renew the term of this Sublease for the first renewal term or (II)
for the one hundred and twenty (120) day period after Sublessee fails to provide
Sublessor with written notice of its intention to renew the term of this
Sublease for the second renewal term. Sublessor shall attempt to conduct all of
its activities permitted under this Paragraph in a manner which will not
unreasonably inconvenience, annoy or disturb the Sublessee in its use and
occupancy of the Subleased Premises.
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12. NOTICE. Any notice required or permitted to be sent pursuant to this
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Sublease shall be sent by FAX or certified mail, return receipt requested,
postage prepaid to the parties at the following addresses or FAX numbers and to
such other addresses or FAX numbers as they shall from time to time indicate:
Sublessee: Sublessor:
SciQuest, Inc. Inspire Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Phone # (000) 000-0000 Phone # (000) 000-0000
Fax # (000) 000-0000 Fax # (000) 000-0000
ATTN: Xxxxxx Xxxxxxxx ATTN: Xxxx Xxxxxxxxxxx
With a copy to.
Xxxxxxxx X. Worm. Esq. Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx & Xxxxx PLLC Xxxxxx Xxxxxxx Xxxxx & Xxxxxx LLP
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
13. SUBLESSOR RELEASED FROM LIABILITY IN CERTAIN EVENTS. Sublessor shall
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not be responsible to Sublessee, at any time or in any event, for deterioration
or change in the condition of the Subleased Premises not caused by Sublessor's
willful misconduct or gross negligence. Sublessor shall also not be responsible
for any damage to Sublessee's property contained therein, including injury to
persons whether caused by riot or civil commotion, fire or earthquake damage, or
overflow or leakage upon or into the Subleased Premises, of water, steam gas or
electricity, or by any breakage in pipes or plumbing, or breakage, leakage or
obstruction of sewer pipes or other damage occasioned by water being upon or
coming through the roof, skylight, trapdoors, walls, basement or otherwise,
nor for failure of the heating (steam) plant, nor for loss of property by theft
or otherwise, nor for any damage arising from any act or neglect of any co-
tenant or other occupant of the Subleased Premises, or for that of any owner or
occupants of adjoining or contiguous property unless said damage, loss or injury
results from the willful misconduct or gross negligence of Sublessor or its
agents, employees or contractors.
14. CONSENT OF MASTER LESSOR; SUBLESSOR. This Sublease is subject to and
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conditioned upon the consent of the Master Lessor. If such consent is not
obtained prior to August 15., 1998, this Sublease shall be voidable by either
party. Sublessor shall immediately ask Master Lessor for consent.
15. ENTIRE AGREEMENT. This Sublease (including the provisions of the
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Master Lease incorporated herein by reference) contains the entire agreement
between the parties and any agreement hereafter made shall be ineffective to
change, modify or discharge it in whole or in part unless such agreement is in
writing and signed by the parties hereto.
16. SUBLESSOR'S REPRESENTATIONS AND WARRANTIES. Sublessor represents and
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warrants that (i) the Master Lease is in full force and effect; (ii) to
Sublessor's knowledge, there exists
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no circumstance, condition, or act of default which would entitle or permit the
Master Lessor to terminate the Master Lease or to abridge any rights of
Sublessor thereunder; (iii) it will not modify or surrender the Master Lease
without the prior written consent of Sublessee which shall not be unreasonably
withheld; (iv) in the event of a default by Master Lessor under the Master
Lease, Sublessor shall use its commercially reasonable best efforts to obtain
Master Lessor's performance of its obligations thereunder.
17. MISCELLANEOUS.
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a. If any term, covenant or condition of this Sublease or the
application thereof to any circumstances or to any person, corporation or other
entity shall be invalid or unenforceable to any extent, the remaining terms,
covenants and conditions of this Sublease shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law.
b. The paragraph headings contained in this Sublease have been
included for convenience only and shall not be used in the construction or
interpretation of this Sublease,
c. This Sublease shall be governed by and construed in accordance
with the laws of the State of North Carolina.
18. ATTORNEYS FEES. In the event that any action or proceeding shall be
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brought by any party hereto against the other with respect to any matter arising
under this Sublease, the prevailing party shall be entitled to recover from the
other costs of suit and reasonable attorney's fees actually incurred. All costs
and expenses (including without limitation reasonable attorney's fees incurred
by Sublessor in connection with enforcement of its rights and remedies
hereunder) shall be paid to Sublessor by Sublessee as additional rent hereunder.
19. SUCCESSORS AND ASSIGNS. This Sublease shall be binding upon and inure
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to the benefit of the parties hereto and their respective successors and
permitted assigns.
20. HOLDOVER. In the event the Sublessee holds over after the expiration
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or earlier termination of the Master Lease. then the Sublessee shall assume all
of the Sublessor's obligations under Section 30 "Holding Over" of the Master
Lease. Nothing herein shall be construed as Sublessor's consent to any holding
over by Sublessee.
21. BROKERAGE Sublessee represents and warrants that it has dealt with no
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real estate broker or agent and Sublessor warrants that it has dealt with no
real estate broker or agent with respect to this transaction except for
Corporate Realty Advisors whose commission shall be paid by Sublessor. Each
party shall indemnify and hold harmless the other from and against all claims of
any other broker or agent claiming to have represented Sublessee or Sublessor as
the case may be in this matter.
22. SECURITY DEPOSIT. On or prior to the Commencement Date, Sublessee
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shall deliver to Sublessor the amount of $4,612.50, which shall be held as a
security deposit in an account of Sublessor's choosing during the term of the
Sublease (the "Security Deposit") for the faithful performance by the Sublessee
of the terms, covenants and conditions of this Sublease. Sublessor may comingle
such Security Deposit with Sublessor's other funds and shall not be accountable
to Sublessee for interest earned thereon, if any. If Sublessee defaults with
respect to any provisions of this Sublease, including but not limited to the
provisions relating to the payment of rent, additional rent or any other
monetary sums due under this Sublease, Sublessor may (but shall not be required
to) use, apply or retain any part or all of the Security Deposit for the payment
of any amounts which Sublessor may spend or be obligated to spend by reason of
Sublessee's default or to compensate Sublessor for any loss or damages which
Sublessor
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may suffer by reason of Sublessee's default. Return of the Security Deposit
shall be subject to the foregoing and Sublessee's surrender of the Subleased
Premises and Sublessor's or its agents' inspection of the Subleased Premises
following expiration or earlier termination of the Sublease and determination
that there is no damage to the property (ordinary wear and tear excepted) and no
delinquencies in rent or other sums payable under the Sublease. Sublessor's
holding of the security deposit shall not release Sublessee of its obligation to
pay the last month's rent under the Sublease.
IN WITNESS WHEREOF, Sublessor and Sublessee have duly executed this
Agreement of Sublease effective as of the day and year first above written.
SUBLESSOR: SUBLESSEE:
INSPIRE PHARMACEUTICALS, INC. SCIQUEST, INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ M. Xxxxx Xxxxxxx
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Title: Vice President Development, Title: Chief Executive Officer/President
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Chief Operating Officer
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Attest: /s/ Xxxxx X. Xxxxx Attest: /s/ Xxxxxx Xxxxxxxx
-------------------- ---------------------------------
Title: Vice Chairman Title: Vice President Business
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Development
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(Corporate Seal) (Corporate Seal)
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LEASE AGREEMENT
BY AND BETWEEN
PETULA ASSOCIATES, LTD.
(ASLANDLORD)
AND
INSPIRE PHARMACEUTICALS, INC.
(AS TENANT)
1
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
------------------------------------
9. LANDLORDS COVENANT TO REPAIR AND REPLACE ......................... 10
----------------------------------------
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
---------------------------------
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. LANDLORDS RIGHT OF ENTRY
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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 -- NONWAIVE .................................. 20
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30. HOLDING OVER ..................................................... 20
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31. NOTICES .......................................................... 21
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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
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THIS LEASE AGREEMENT (the "Lease") made and entered into as of the 30/th/ day of
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December, 1997, by and between PETULA ASSOCIATES, LTD., an Iowa corporation,
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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.
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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 ______ and more
particularly described on 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
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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 measurement shall be borne by Landlord.
2. TERM.
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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
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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.
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3. RENTAL.
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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.
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(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 installments 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/1 00 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]
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(c) Tenant's Share of Taxes.
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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, additions 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.
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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
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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.
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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 I of
each calendar year of 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 I 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.
6
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.
7
(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
8
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.
9
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 of 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, fames, 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.
-------------------------------------
10
(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 appliable 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 downspounts 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
11
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
12
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 coverings; (e) plumbing fixtures and equipment; or (f)
permanent shelving. Landlord hereby waives any lien interests 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 of any personal property within the Premises or 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
13
the Premises as is rendered untenantable. Any such abatement of rent shall not,
however, create an extension of the Term. 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 or 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 by 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)
14
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.
15
(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/100 Dollars ($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
Commencement 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 Premises 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:
16
(i) Tenant's failure to pay any 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 proper-ties 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.
--------------
17
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
nondisturbance 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 nondisturbance 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,
18
(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 or 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, 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 of 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, then 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
19
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 record 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 exercising
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
20
"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 X 00
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.
-------------------
21
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
22
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.
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(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 or 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) or instrument(s) shall be deemed to be additional rental due
hereunder and shall be payable by Tenant as provided above.
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IN WITNESS WHEREOF, the parties have caused this Lease to be duty executed
and sealed pursuant to authority duly given as of the day and year first above
written.
"LANDLORD"
PETULA ASSOCIATES, LTD.
ATTEST:
/s/ By:/s/ Xxxxxxx X. Xxxxxx
--------------------- ---------------------
XXXXX X. XXXXXXX XXXXXXX X. XXXXXX
VICE PRESIDENT AND CORPORATE SECRETARY VICE PRESIDENT
"TENANT"
INSPIRE PHARMACEUTICALS, INC
ATTEST:
____________________ By: /s/ Xxxxx X. Xxxxx
--------------------------
__________Secretary Xxxxx X. Xxxxx President
-----------------
[CORPORATE SEAL]
00
XXXXX XX XXXX
----
XXXXXX XX XXXX
----
This 30/TH/ day of DECEMBER 1997, personally came before me
------ -------------------------
XXXXXXX X. XXXXXX , who, being by me duly sworn, says that he is____________
--------------------
President 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. Xxxxxxx
---------------------------
[NOTARIAL SEAL] Notary Public
My Commission expires:
XXXXXX X. XXXXXXX
MY COMMISION EXPIRES
MAY, 19, 2000
STATE OF NORTH CAROLINA
--------------
COUNTY OF DURHAM
------
This 5/TH/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:
AUG. 5, 2001
------------
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[MAP APPEARS HERE]
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[FLOORPLAN APPEARS HERE]
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EXHIBIT "C"
-----------
FINAL PLANS
[To be attached upon approval by Landlord]
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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:
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(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 of the Building.
(c) Except for "seeing-eye" dogs, keep animals or birds on the Premises.
(d) Deposit waste 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 recorders 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.
(1) 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.
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(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 Building 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.
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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.
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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
34
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 within one (1) business day of the exchange and opening of
envelopes, then, within ten (10) business days of the 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.
35
