Exhibit 10.12
L E A S E A G R E E M E N T
BY AND BETWEEN:
GAMMA THREE ASSOCIATES LIMITED PARTNERSHIP,
a New Jersey Limited Partnership,
"LANDLORD"
- and -
INSTITUTE FOR BIOLOGICAL RESEARCH
AND DEVELOPMENT, INC.,
a Delaware corporation,
"Tenant"
Premises: 105 Neptune Boulevard
Neptune Business Center
Neptune Township, New Jersey
DATED: November 27, 1991
PREPARED BY: ROBERT K. BROWN, ESQ.
#13740-198
RKB Disk #279
TABLE OF CONTENTS
3. RENT........................................................6
4. PARKING AND USE OF EXTERIOR AREA............................6
5. USE.........................................................7
6. CONSTRUCTION................................................7
7. REPAIRS AND MAINTENANCE.....................................8
8. UTILITIES..................................................11
11. SIGNS......................................................13
12. FIXTURES...................................................13
13. BROKERAGE..................................................14
14. FIRE AND CASUALTY..........................................15
15. COMPLIANCE WITH LAWS, RULES AND REGULATIONS................16
16. INSPECTION BY LANDLORD.....................................19
17. DEFAULT BY TENANT..........................................20
18. LIABILITY OF TENANT FOR DEFICIENT..........................24
19. NOTICES....................................................24
20. NON-WAIVER.................................................25
21. RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS.......25
22. NON-LIABILITY OF LANDLORD..................................26
23. RESERVATION OF EASEMENT....................................27
24. POLLUTION..................................................27
25. STATEMENT OF ACCEPTANCE....................................28
26. FORCE MAJEURE..............................................28
27. STATEMENTS BY LANDLORD AND TENANT..........................29
28. CONDEMNATION...............................................29
29. LANDLORD'S REMEDIES........................................30
30. QUIET ENJOYMENT............................................31
31. SURRENDER OF PREMISES......................................31
32. INDEMNITY..................................................32
33. LEASE CONSTRUCTION.........................................33
34. BIND AND INURE CLAUSE......................................33
35. DEFINITIONS................................................33
36. DEFINITION OF TERM OF "LANDLORD"...........................33
37. COVENANTS OF FURTHER ASSURANCES............................34
38. COVENANT AGAINST LIENS.....................................34
39. SUBORDINATION..............................................34
40. EXCULPATION OF LANDLORD....................................35
41. NET RENT...................................................35
42. SECURITY...................................................35
43. ASSIGNMENT AND SUBLETTING..................................36
44. OPTION TO RENEW............................................39
45. FINANCIAL STATEMENTS.......................................42
46. TENANT'S FIRST RIGHT OF NEGOTIATION........................42
47. LANDLORD IS DEFAULT........................................43
THIS AGREEMENT, made the day of 1991, by and between GAMMA THREE ASSOCIATES
LIMITED PARTNERSHIP, a New Jersey Limited Partnership, having an office at 14A
Worlds Fair Drive, Franklin Township, New Jersey 08873 (P.O. Box 5850, Somerset,
New Jersey 08875) hereinafter called the "LANDLORD"; and INSTITUTE FOR
BIOLOGICAL RESEARCH AND DEVELOPMENT, INC., a Delaware corporation, about to have
an office at 105 Neptune Boulevard, Suite Neptune, New Jersey 07753, hereinafter
called the "Tenant".
W I T N E S S E T H :
WHEREAS, the LANDLORD intends to lease to the Tenant a portion of the
building commonly known as 105 Neptune Boulevard, Neptune Township, New Jersey
(the "Building"), which portion is located on the first floor of the Building
and contains 11,100 square feet, outside dimensions to center line of common
wall, identified on the plot plan attached hereto and made a part hereof as
Schedule "A", hereinafter referred to as the "Leased Premises"; and
WHEREAS, the parties hereto wish to mutually define their rights, duties
and obligations in connection with the said Lease,
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for the rents
reserved, the mutual considerations herein and the parties mutually intending to
be legally bound hereby, the LANDLORD does demise, lease and let unto the Tenant
and the Tenant does rent and take from the LANDLORD the Leased Premises as
described in
ninety (90) days following the date of execution of this Lease Agreement. If the
LANDLORD has not delivered possession of the Leased Premises to Tenant as
required by this Lease by May 31, 1992, Tenant shall have the right to terminate
this Lease. The foregoing right of termination is expressly subject to and
contingent upon the execution of this Lease Agreement by LANDLORD and Tenant,
and the approval of Tenant's Plan as well as the cost of installation of all
improvements set forth thereon, by November 25, 1991; for each day of delay
beyond November 25, 1991, the "outside" date hereinabove set forth of May 31,
1992 shall be extended for an additional day. In the event of termination of
this Lease in accordance with this Article 2.1, LANDLORD hereby agrees that it
shall refund to Tenant all monies previously paid to LANDLORD in accordance with
the terms and conditions of this Lease, including the Tenant's Contribution as
hereinafter defined in Article 6.2.
1.
2.
2.1
2.2 Subject to the terms and conditions of this Lease, in the event the
Leased Premises are delivered to the Tenant in the manner provided in Article
2.1 above, prior to or after February 1, 1992, the Lease term of five (5) years
shall commence on the first day of the next succeeding month following delivery
of possession to the Tenant (hereinafter called the "Commencement Date") and
shall continue for a term of five (5) years thereafter. The Tenant
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shall, however, pay to the LANDLORD a sum equal to the pro rata share of one (1)
month's rent for that portion of the month prior to the Commencement Date.
During said period of partial monthly occupancy" if any, all other terms and
conditions of this Lease shall be applicable to the occupancy of the Leased
Premises by the Tenant.
2.3 It is expressly understood and agreed that for the purpose of this
Lease, wherever and whenever the term "substantial completion" is used, the term
"substantial completion" shall not include items of maintenance, service or
guarantee, which may be required pursuant to the terms and conditions of this
agreement. The Building and improvements shall be considered substantially
completed upon the issuance of a Certificate of Occupancy.
3. RENT
3.1 Tenant covenants and agrees to pay the annual rent as follows:
RENT PER MONTHLY
LEASE YEAR SQUARE FOOT ANNUAL RENT INSTALLMENT
- ---------- ----------- ----------- -----------
1 $10.00 $111,000.00 $ 9,250.00
2 $10.30 $114,330.00 $ 9,527.50
3 $10.60 $117,660.00 $ 9,805.00
4 $10.80 $119,880.00 $ 9,990.00
5 $11.00 $122,100.00 $10,175.00
The figures for "Annual Rent" and "Monthly Installment" are subject to
adjustment as of the Commencement Date based Upon the gross
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rentable area of the Leased Premises, as shall be certified by LANDLORD's
architect or engineer, multiplied by "Rent Per Square Foot".
All of the foregoing monthly installments shall be paid promptly in
advance on the first day of each and every month during the term of the Lease
without demand and without off-set or deduction, together with such additional
rent and other charges required to be paid by Tenant as are hereinafter set
forth.
3.2 Simultaneously with the execution hereof, the Tenant has delivered
to the LANDLORD the first month's installment of annual rent payable hereunder.
4. PARKING AND USE OF EXTERIOR AREA
4.1 The LANDLORD shall reserve for the Tenant's exclusive use twelve (12)
parking spaces at the Building. Otherwise and in addition thereto, the Tenant
shall have the right to use the parking spaces on a non-exclusive basis in
common with other tenants of the Complex and to use the access driveways and
allocated parking spaces for its business purposes and for those of its agents,
servants, employees or invitees. The LANDLORD reserves the right to allocate
designated parking spaces if LANDLORD chooses. The LANDLORD and Tenant mutually
agree that they will not block, hinder or otherwise obstruct the access
driveways and parking areas so as to impede the free flow of vehicular traffic
in and out of the Complex. In connection with the use of the loading platforms,
if any, both LANDLORD and Tenant agree that
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they will not use the same in connection with the conduct of their business so
as to unreasonably interfere with the use of the access driveways and parking
areas.
4.2 The Tenant may not utilize any portion of the land outside of the
Leased Premises for outside storage of raw materials or finished products.
5. USE
The Tenant covenants and agrees to use and occupy the Leased Premises for
general offices and for an in-patient and outpatient clinic, biomedical research
facility and future analytical laboratory together with ancillary medical and
professional offices for the purpose of conducting pharmaceutical testing in
compliance with applicable FDA procedures for Phases I, II, III and IV, which
use by Tenant, however, is and shall be expressly subject to all applicable
zoning ordinances, rules and regulations of any governmental instrumentalities,
boards or bureaus having jurisdiction thereof.
6. CONSTRUCTION
6.1 Subject to the prior written approval of the Tenant and LANDLORD's
architect, the LANDLORD shall construct and complete Tenant's Leased Premises in
accordance with the Building Standard set forth on Schedule "B", and in
accordance with the plan annexed hereto and made a part hereof as Schedule "B-1"
("Tenant's Plan") , provided that the LANDLORD shall have the right to
substitute for the materials and equipment required by the Building Standard and
Tenant's Plan, materials and equipment of equal or
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better quality and standard, provided said substitutions conform with applicable
Building Codes.
6.2 Upon execution of the within Lease Agreement, Tenant shall deliver to
LANDLORD the sum of SEVENTY FIVE THOUSAND AND 00/100 ($75,000.00) DOLLARS (the
"Tenant's Contribution"), which Tenant's Contribution represents the estimated
cost of installation of all items set forth in Tenant's Plan which are in excess
of Building Standard (which, for the purposes of this Article, is hereby deemed
to include all cabinetry to be installed by LANDLORD in accordance with Tenant's
Plan) . In the event the actual cost of installation of such excess requirements
of Tenant shall be less than the sum of SEVENTY FIVE THOUSAND AND 00/100
($75,000.00) DOLLARS, the difference shall be rebated to Tenant upon
establishment of the actual cost of such work. In the event that the cost of
installation of leasehold improvements which exceed the Building Standard shall
exceed the sum of SEVENTY FIVE THOUSAND AND 00/100 ($75,000.00) DOLLARS, the
Tenant shall deliver the amount in excess of Tenant's Contribution to the
LANDLORD upon the Commencement Date. Prior to the commencement of the term of
this Lease, LANDLORD shall provide Tenant with a detailed schedule of all costs
for labor and materials actually paid by LANDLORD for completing Tenant's Plan.
6.3 LANDLORD hereby agrees that it shall give Tenant at least thirty (30)
days prior written notice of the estimated date upon which the Leased Premises
shall be delivered to the Tenant.
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7. REPAIRS AND MAINTENANCE
7.1 The Tenant shall pay to the LANDLORD monthly, as additional rent, a sum
equal to Tenant's Building Percentage of costs incurred by the LANDLORD for
maintenance, repair and replacement of the structural parts of the Building,
including the walls, roof, concrete floor, foundations, structural steel, the
electrical system, together with the air-conditioning and heating plant, the
plumbing, pipes, sewer lines and conduits, and fixtures belonging thereto,
except for repairs or maintenance occasioned by the negligence or deliberate act
of Tenant, or its agents, servants, employees and invitees, which shall then be
repaired by LANDLORD at the cost and expense of the Tenant. LANDLORD warrants
and represents that all fixtures, equipment and systems described herein shall,
at the commencement of the term of this Lease, be new and in first-class
condition and working order. In addition, the LANDLORD hereby warrants the
condition of the foregoing items for a period of one (1) year following the
Commencement Date hereunder, it being understood that Tenant shall nonetheless
be responsible for its Building Percentage of the cost of all maintenance (but
not repair and replacement) of said items.
7.2 The Tenant shall pay to the LANDLORD monthly as additional rent a sum
equal to Tenant's Common Area Percentage of cost incurred by the LANDLORD for
maintenance, repair and replacement of the following: (i) parking lot and
roadways, driveways, sidewalks, walkways,
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exterior lighting; (ii) exterior sewer and utility lines; (iii) lawns and
shrubbery; (iv) snow removal; (v) signs serving the Complex; and (vi) detention
ponds. In addition the Tenant shall pay the LANDLORD monthly as additional rent,
Tenant's Building Percentage of costs incurred by the LANDLORD for the
maintenance, repair and replacement of the following: roof, gutters, leaders,
flashings, metal gravel stops and roof drains. Nothing hereinabove contained in
Articles 7.1 and 7.2 shall require the Tenant to pay any portion of the
construction costs applicable to the initial construction of other phases of the
Complex. In addition LANDLORD hereby agrees that in the event the replacement of
the roof, foundation, exterior walls, structural steel, heating, ventilating and
air-conditioning system or the parking lot serving the Building is necessary
during the term of this Lease, the cost of any such replacement shall be
amortized over the useful life of the item being replaced [not to exceed ten
(10) years in any event] and Tenant shall only be responsible to reimburse
LANDLORD for that portion of said amortized expense as shall be applicable to
the remaining term of this Lease. The remaining term of this Lease shall be
deemed to include any extension or renewal of this Lease, effective as of the
exercise by Tenant of its option to renew as hereinafter contained in Article
44, or upon execution of an agreement by and between LANDLORD and Tenant
otherwise extending the term of this Lease.
7.3 Tenant agrees to keep the Leased Premises in as good repair as they are
at the beginning of the term, reasonable use and wear thereof and
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damage by fire or other casualty not caused by Tenant excepted. Tenant further
agrees not to damage, overload, deface or commit waste of the Leased Premises.
Tenant shall be responsible for all damage of any kind or character to the
Leased Premises, including the windows, glass, floors, walls and ceilings,
caused by Tenant or by anyone using or occupying the Leased Premises by, through
or under the Tenant. LANDLORD shall repair the same, and Tenant agrees to pay
the costs incurred therefor to LANDLORD upon demand. Anything hereinabove
contained to the contrary notwithstanding, it is expressly understood and agreed
that the Tenant shall, at its sole cost and expense, be responsible for the
repair, maintenance and replacement of any items installed by LANDLORD for
Tenant's use as leasehold improvements over and above the improvements furnished
by LANDLORD, as part of LANDLORD's work.
7.4 During the first year of the Lease term, the LANDLORD shall estimate
the cost of all of the maintenance, repair and replacement services required
pursuant to Articles 7.1 and 7.2 above. LANDLORD shall furnish such estimate to
the Tenant, and Tenant shall pay to LANDLORD one-twelfth (1/12th) of its Common
Area Percentage or Building Percentage thereof, as applicable, during each month
of the Lease year as additional rent. At the expiration of the first twelve (12)
months of the Lease term, the LANDLORD shall furnish to Tenant a breakdown,
certified by the LANDLORD, as to the total cost of maintenance, repair and
replacement for the prior twelve (12) months. In the event Tenant's pro rata
share shall be more than the aggregate
9
paid by the Tenant during the preceding twelve (12) month period, Tenant shall
pay to the LANDLORD, in one lump sum, any difference in such obligation, said
sum to be paid within fifteen (15) days after demand. In the event Tenant shall
have overpaid its pro rata share, any such overage shall be applied to the
monthly maintenance, repair and replacement charges prospectively due under the
Lease. This procedure shall be followed during each year of the Lease term, and
at the expiration of the Lease, any overage or underage shall be credited or
paid after computation by the LANDLORD, which obligation of LANDLORD and Tenant
shall survive the expiration of the Lease term.
7.5 Upon receipt of written request from Tenant, LANDLORD hereby agrees
that it shall deliver copies of applicable invoices and supporting documentation
which form thebasis of any statement delivered to Tenant pursuant to Article 7.4
hereof, within thirty (30) days of receipt by LANDLORD of Tenant's request
therefor, it being the intention that Tenant shall be obligated to pay its pro
rata share of such reasonable expenses as are actually incurred by LANDLORD.
7.6 LANDLORD shall be obligated to maintain the Building, Common Area,
Complex and all other portions of the Property in a first-class condition.
8. UTILITIES
8.1 The Tenant shall, at its own cost and expense, pay all utility meter
and service charges applicable to the Leased Premises, including gas,
10
sewer, electric, water, janitorial and garbage disposal services and Tenant's
Building Percentage of standby sprinkler charges, if any, based upon invoices
which will be submitted by LANDLORD to Tenant. It is understood and agreed that
the Leased Premises are separately metered for gas and electrical consumption.
8.2 The LANDLORD is hereby granted the privilege of entering the Leased
Premises for the purpose of repairing any
9.
10.
10.1 sprinkler damage, flood insurance and comprehensive liability for the
whole of the land, Building and improvements of which the Leased Premises are a
part, including LANDLORD's cost for umbrella insurance (excess coverage) in an
amount not to exceed FIFTEEN MILLION ($15,000,000.00) DOLLARS. Tenant shall pay
the full premium attributable to casualty rent insurance, insuring the value of
one (1) year's gross rental obligation of Tenant hereunder, including taxes and
insurance premiums. Any increase in the premiums hereinabove referred to due to
change in rating of the Building, attributable to the use of the Leased Premises
by the Tenant shall be paid entirely by the Tenant. LANDLORD covenants and
agrees that it shall carry the aforementioned insurance policies and LANDLORD
shall certify annually, the annual cost of such insurance premiums, and shall
furnish to
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Tenant, if requested, a copy of all insurance premium bills for which Tenant has
been charged its pro rata share thereof.
10.2 In addition to the above, the Tenant covenants and agrees that it
will, at its sole cost and expense, carry liability insurance covering the
Leased Premises in the minimum amount of ONE MILLION ($1,000,000.00) DOLLARS per
accident for one (1) person, THREE MILLION ($3,000,000-00) DOLLARS per accident
for two (2) or more persons, and a minimum amount of TWO HUNDRED FIFTY THOUSAND
($250,000.00) DOLLARS for property damage, and the Tenant further covenants and
agrees that it will add as a party insured by such policy the interest of the
LANDLORD and will furnish LANDLORD with a certificate of said liability
insurance.
10.3 It is expressly understood and agreed that all policies of insurance
shall contain a clause that the same shall not be cancelled except on thirty
(30) days' written notice to any and all parties in interest.
10.4 The parties hereto mutually covenant and agree that each party, in
connection with insurance policies required to be furnished in accordance with
the terms and conditions of this Lease, or in connection with insurance policies
which they obtain insuring such insurable interest as LANDLORD or Tenant may
have in its own properties, whether personal or real, shall expressly waive any
right of subrogation on the part of the insurer against the LANDLORD or Tenant
as the same may be applicable, which right to the extent not prohibited or
violative of any such policy is hereby expressly
12
waived, and LANDLORD and Tenant each mutually waive all right of recovery
against each other, their agents, or employees for any loss, damage or injury of
any nature whatsoever to property or person for which either party is required
by this Lease to carry insurance.
11. SIGNS
Tenant shall have the right and privilege of placing a sign on the Building
containing the Leased Premises which shall be of sufficient size and design so
as to be clearly visible to vehicles and pedestrians on adjacent and contiguous
streets. The said sign shall comply with the applicable rules and regulations of
the applicable governmental boards and bureaus having jurisdiction thereof, and
shall be approved by the LANDLORD, which approval shall not be unreasonably
withheld. No other exterior signage of Tenant shall be permitted.
12. FIXTURES
The Tenant is given the right and privilege of installing and removing
property, machinery, equipment and fixtures in the Leased Premises during the
term of the Lease subject to compliance with applicable rules and regulations of
governmental boards and bureaus having jurisdiction thereof. However, if the
Tenant is in default and moves out, or is dispossessed, and fails to remove any
property, machinery, equipment and fixtures or other property prior to such
default, dispossess or removal, then and in that event, the said property,
machinery, equipment and fixtures or other property shall be
13
deemed, at the option of the LANDLORD, to be abandoned; or in lieu thereof, at
the LANDLORD's option, the LANDLORD may remove such property and charge the
reasonable cost and expense of its removal, storage and disposal to the Tenant.
The Tenant shall be liable for any damage which it causes in the removal of said
property from the Leased Premises.
13. BROKERAGE
The parties mutually represent to each other that JACOBSON, GOLDFARB &
TANZMAN ASSOCIATES, Ten Woodbridge Center Drive P.O. Box 1408, Woodbridge, New
Jersey 07095, and GRUBB & ELLIS, Two Research Way, Princeton Forrestal Center,
Princeton, New Jersey 08540, are the sole brokers who negotiated and consummated
the within transaction, and that neither party dealt with any other broker in
connection with the within Lease, it being understood and agreed that the
LANDLORD shall be responsible, at its sole cost and expense, to pay the real
estate brokerage in connection with this Lease transaction. LANDLORD agrees to
indemnify, defend and save harmless Tenant in connection with the claims of any
other real estate brokers claiming commissions in connection with the within
transaction and claiming authority from LANDLORD. Tenant agrees to indemnify,
defend and save harmless LANDLORD in connection with the claims of any other
real estate brokers claiming commissions in connection with the within
transaction and claiming authority from Tenant.
14. FIRE AND CASUALTY
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14.1 In case of any damage to the Building by f ire or other casualty
occurring during the Term or previous thereto, which renders the Leased Premises
wholly untenantable so that the same cannot be repaired within one hundred
eighty (180) days from the happening of such damage, then the Term hereby
created shall, at the option of the LANDLORD, terminate from the date of such
damage. If the LANDLORD elects to terminate the Lease, LANDLORD shall notify the
Tenant of such election within thirty (30) days of the happening of the fire or
casualty, and in such event the Tenant shall immediately surrender the Leased
Premises and shall pay Fixed Rent and Additional Rent only to the time of such
damage and the LANDLORD may re-enter and re-possess the Leased Premises,
discharged from this Lease. In the event the LANDLORD can restore the Leased
Premises within one hundred eighty (180) days, it shall advise the Tenant of
such fact, and the Lease shall remain in full force and effect during the period
of LANDLORD's restoration, except that all rent reserved hereunder shall abate,
upon the happening of fire or casualty, and while the repairs and restorations
are being made, but the rent shall recommence upon restoration of the Leased
Premises and delivery of the same by the LANDLORD to the Tenant. LANDLORD agrees
that it will undertake reconstruction and restoration of the Leased Premises
with due diligence and reasonable speed and dispatch, subject to the terms and
conditions of Article 8.
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14.2 If the Building shall be damaged, but the damage is repairable within
one hundred eighty (180) days the LANDLORD agrees to repair the same with due
diligence and reasonable speed and dispatch subject to the terms and conditions
of Article 8. In such event, the rent accrued and accruing shall not abate,
except f or that portion of the Leased Premises that has been rendered
untenantable and as to that portion the rent shall abate, based on equitable
adjustments.
14.3 The Tenant shall immediately notify the LANDLORD in case of fire or
other damage to the Leased Premises.
14.4 Notwithstanding anything contained in Article 14.1 or 14.2 above, if
such repairs are for any reason not completed within two hundred ten (210) days,
then the Tenant shall have the right to terminate this Lease upon written notice
to the LANDLORD of such election, and in such event of termination LANDLORD and
Tenant shall thereupon be released of liability one to the other, and the within
Lease shall be deemed null and void.
14.5 Rent, as referred to in this Article 14, is intended to include annual
rent, additional rent and all other Lease charges required to be paid by Tenant
pursuant to this Lease.
15. COMPLIANCE WITH LAWS, RULES AND REGULATIONS
15.1 (i) The Tenant covenants and agrees that upon acceptance and occupancy
of the Leased Premises, it, will, during the Lease term, promptly, at Tenant's
cost and expense, execute and comply with all statutes,
16
ordinances, rules, orders, regulations and requirements of the Federal, State
and Municipal governments and of any and all their instrumentalities,
departments and bureaus, applicable to the Leased Premises, as the same may
require correction, prevention and abatement of nuisances, violations or other
grievances, in, upon or connected with the Leased Premises, and arising from the
operations of the Tenant therein.
(ii) The Tenant covenants and agrees at its own cost and expense, to
comply with such regulations or requests as may be required by the fire or
liability insurance carriers providing insurance for the Leased Premises, and
will further comply with such other requirements that may be promulgated by the
Board of Fire Underwriters, in connection with the use by the Tenant of the
Leased Premises in the conduct of its business.
(iii) The Tenant covenants and agrees that it will not commit any
nuisance, nor permit the emission of any objectionable sound, noise or odors
which would be violative of any applicable governmental rule or regulation or
would per se create a nuisance. The Tenant further covenants and agrees that it
will handle and dispose of all rubbish, garbage and waste in connection with the
Tenant's operations in the Leased Premises in accordance with reasonable
regulations established by the LANDLORD from time to time in order to keep the
premises in an orderly condition and in order to avoid unreasonable emission of
dirt, fumes, odors or debris which may constitute a nuisance or induce pests or
vermin. In addition, the Tenant shall handle and
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dispose of all medical waste, at Tenant's sole cost and expense, in accordance
with all applicable statutes, laws, rules and regulations of governmental
entities having jurisdiction thereof.
15.2 In case the Tenant shall fail or neglect to comply with the aforesaid
statutes, ordinances, rules, orders, regulations and requirements or any of
them, as hereinbefore provided, or in case the Tenant shall neglect or fail to
make any necessary repairs, then the LANDLORD or the LANDLORD's agents may after
thirty (30) days' written notice specifying the applicable statute, ordinance,
rule, order, regulation or requirement, the nature of Tenant's failure or
neglect to comply with the same and the required repair or other cure (except
for emergency repairs, which may be made immediately) enter the Leased Premises
and make said repairs and comply with any and all of the said statutes,
ordinances, rules, orders, regulations or requirements, at the cost and expense
of the Tenant and in case of the Tenant's failure to pay therefor, the said cost
and expense shall be added to the next month's rent and be due and payable as
such, or the LANDLORD may deduct the same from the balance of any sum remaining
in the LANDLORD's hands. This provision is in addition to the right of the
LANDLORD to terminate this Lease by reason of any default on the part of the
Tenant, subject to the rights of the Tenant as hereinabove mentioned in the
manner as in this Lease otherwise provided. Notwithstanding anything hereinabove
contained, the Tenant shall have right to contest any of the aforementioned
statute, ordinances, rules, orders,
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regulations and requirements, provided that Tenant shall indemnify, defend and
save harmless the LANDLORD from and against any and all claims or liabilities
which may be incurred by LANDLORD due to Tenant's non-compliance with same. No
such contest may be conducted which shall result in the imposition of any lien
on the Complex or which would affect the use and occupancy of the Complex by any
other tenant thereof.
15.3 Without limiting anything hereinabove contained in this Article 15,
Tenant expressly covenants and agrees to fully comply with the provisions of the
New Jersey Environmental Cleanup Responsibility Act (N.J.S.A. 13:1K-6, et seq.)
hereinafter referred to as 11ECRA11, and all regulations promulgated thereto
with respect to Tenant's use of the Leased Premises prior to the expiration or
earlier termination of the within Lease, or at any time that any action of the
Tenant triggers the applicability of ECRA. In particular, the Tenant agrees that
it shall comply with the provisions of ECRA in the event of any "closing,
terminating or transferring" of Tenant's operations, as defined by and in
accordance with the regulations which have been promulgated pursuant to ECRA. In
the event evidence of such compliance is not delivered to the LANDLORD prior to
surrender of the Leased Premises by the Tenant to the LANDLORD, it is understood
and agreed that the Tenant shall be liable to pay to the LANDLORD an amount
equal to two times the annual rent then in effect, provided on monthly basis,
together with all applicable additional rent from the date of such surrender
until such time as
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evidence of compliance with ECRA has been delivered to the LANDLORD, and
together with any costs and expenses incurred by LANDLORD in enforcing Tenant's
obligations under this Article 15.3. Evidence of compliance, as used herein,
shall mean a "letter of non-applicability" issued by the New Jersey Department
of Environmental Protection, hereinafter referred to as "NJDEP", or an approved
"negative declaration" or a "cleanup plan" which has been fully implemented and
approved by NJDEP. Evidence of compliance shall be delivered to the LANDLORD,
together with copies of all submissions made to the NJDEP, including all
environmental reports, test results and other supporting documentation. In
addition to the above, Tenant hereby agrees that it shall cooperate with
LANDLORD in the event of the termination or expiration of any other Lease
affecting the Property, or a transfer of any portion of the property indicated
on Schedule "A-l", or any interest therein, which triggers the provisions of
ECRA. In such case, Tenant agrees that it shall fully cooperate with LANDLORD in
connection with any information or documentation which may be requested by the
NJDEP. In the event that a cleanup of the Property is required in connection
with the conduct by Tenant of its business in the Leased Premises, Tenant
expressly covenants and agrees that it shall be responsible for that portion of
said cleanup which is attributable to the Tenant's use and occupancy thereof.
Tenant hereby represents and warrants that its Standard Industrial
Classification No. is .., and that Tenant shall not generate, manufacture,
refine, transport, treat, store,
20
handle or dispose of "hazardous substances" as the same are defined under ECRA
and the regulations promulgated pursuant thereto. Tenant hereby agrees that it
shall promptly inform LANDLORD of any change in its SIC number or the nature of
the business to be conducted in the Leased Premises. The within covenants shall
survive the expiration or earlier termination of the Lease term.
16. INSPECTION BY LANDLORD
The Tenant agrees that the said LANDLORD's agents, and other
representatives, shall have the right to enter into and upon the Leased
Premises, or any part thereof, at all reasonable hours for the purpose of
examining the same, or for exhibiting the same to prospective purchasers (at any
time) and tenants [within the last twelve (12) months of the term of this Lease,
or during any period during which Tenant is in default under the terms and
conditions of this Lease] upon reasonable advance oral notice of not less than
twenty-four (24) hours (except in the event of emergency), or making such
repairs or alterations therein as may be necessary for the safety and
preservation thereof, or to repair and maintain the common utilities without
unduly or unreasonably disturbing the operations of the Tenant (except in the
event of emergency. LANDLORD understands and acknowledges that the nature of
Tenant's business is such that one or more areas within the Leased Premises may
be restricted by Tenant because of the presence of trade secrets or proprietary
information or for reasons of patient confidentially. With respect
21
to such areas Tenant may restrict all non-emergency access or, at Tenant's
option, grant non-emergency entrance on condition that each entrant sign a
confidentiality statement in form and substance satisfactory to Tenant. Upon
LANDLORD's prior oral request, Tenant hereby agrees that it shall specify a time
that the entire Leased Premises may be inspected or exhibited by LANDLORD,
during normal business hours, which time shall be within seven (7) days of
receipt by Tenant of LANDLORD's oral request. LANDLORD agrees that any such
inspection or exhibition shall be arranged to be made in the presence of a
representative of Tenant, with due regard for Tenant's security requirements.
LANDLORD hereby agrees that anyone inspecting the Leased Premises shall be
required to sign a confidentiality statement, as hereinabove set forth.
17. DEFAULT BY TENANT
17.1 Each of the following shall be deemed a default by Tenant and a breach
of this Lease:
(1) (i) filing of a petition by the Tenant for adjudication as a
bankrupt, or for reorganization, or for an arrangement under any federal or
state statute, except in a Chapter 11 Bankruptcy where the rent and
additional rent stipulated herein is being paid and the terms of the Lease
are being complied with;
(ii) dissolution or liquidation of the Tenant;
(iii) appointment of a permanent receiver or a permanent trustee
of all or substantially all of the property of the Tenant, if such
appointment shall not be vacated within one hundred twenty (120) days,
provided the rent and additional rent stipulated herein is
22
being paid and the terms of the Lease are being complied with, during said
one hundred twenty (120) day period;
(iv) taking possession of the property of the Tenant by a
governmental officer or agency pursuant to statutory authority for
dissolution, rehabilitation, reorganization or liquidation of the Tenant if
such taking of possession shall not be vacated within one hundred twenty
(120) days, provided the rent and additional rent stipulated herein is
being paid and the terms of the Lease are being complied with,. during said
one hundred twenty (120) day period;
(v) making by the Tenant of an assignment for the benefit of
creditors;
(vi) abandonment, desertion or vacation of the Leased Premises by
the Tenant. There shall be no abandonment, desertion or vacation provided
that Tenant is current in the payment of rent and other sums due under this
Lease, and further provided that prior written notice of such a vacation of
the Leased Premises is given to LANDLORD which notice shall set forth the
length of time that Tenant expects the Leased Premises to be vacant; the
Tenant shall be responsible for any increased costs for insurance premiums
or security services which may be necessitated by the vacation of the
Leased Premises by the Tenant.
If any event mentioned in this subdivision (1) shall occur, LANDLORD may
thereupon or at any time thereafter elect to cancel this Lease by thirty (30)
days' notice to the Tenant and this Lease shall terminate on the day in such
notice specified with the same force and effect as if that date were the date
herein fixed for the expiration of the term of the Lease.
(2) (i) Default in the payment of the rent or additional rent
herein reserved or any part thereof for a period of seven (7) days after
the same is due and payable as in this Lease required.
(ii) A default in the performance of any other covenant or
condition of this Lease on the Oath of the Tenant to be
23
performed for a period of thirty (30) days after written notice. For
purposes of this subdivision (2) (ii) hereof, no default on the part of
Tenant in performance of work required to be performed or acts to be done
or conditions to be modified shall be deemed to exist if steps shall have
been commenced by Tenant diligently after notice to rectify the same and
shall be prosecuted to completion with reasonable diligence, and if the
LANDLORD is indemnified against loss or liability arising from the default.
17.2 In case of any such default under Article 17.1 (2), at any time
following the expiration of the respective grace periods above mentioned,
LANDLORD may serve a notice upon the Tenant electing to terminate this Lease
upon a specified date not less than seven (7) days after the date of serving
such notice and this Lease shall then expire on the date so specified as if that
date had been originally fixed as the expiration date of the term herein
granted; however, a default under Article 17.1 (2) hereof shall be deemed waived
if such default is made good before the date specified for termination in the
notice of termination served on the Tenant.
17.3 In case this Lease shall be terminated as hereinbefore provided, or by
summary proceedings or otherwise, LANDLORD or its agents may, immediately or any
time thereafter, reenter and resume possession of the Leased Premises or such
part thereof, and remove all persons and property therefrom, either by summary
proceedings or by a suitable action or proceeding at law, without being liable
for any damages therefor. No re-entry by LANDLORD shall be deemed an acceptance
of a surrender of this Lease.
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17.4 In case this Lease shall be terminated as hereinafter provided, or by
summary proceedings or otherwise, LANDLORD may, in its own name and in its own
behalf, relet the whole or any portion of the Leased Premises, for any period
equal to or greater or less than the remainder of the then current terms, for
any sum which it may deem reasonable, to any tenant which it may deem suitable
and satisfactory, and for any use and purpose which it may deem appropriate, and
in connection with any such Lease LANDLORD may make such changes in the
character of the improvements on the Leased Premises as LANDLORD may determine
to be appropriate or helpful in effecting such Lease and may grant concessions
or free rent. LANDLORD hereby agrees that it shall use reasonable efforts to
relet the Leased Premises, so as to mitigate the damages otherwise payable by
Tenant hereunder. LANDLORD shall not in any event be required to pay Tenant any
surplus of any sums received by LANDLORD on a reletting of the Leased Premises
in excess of the rent reserved in this Lease.
17.5 (1) In case this Lease be terminated by summary proceedings or
otherwise, as provided in this Article 17, and whether or not the Leased
Premises be relet, LANDLORD shall be entitled to recover from the Tenant, the
following:
(i) a sum equal to all expenses, if any, including reasonable
counsel fees, incurred by LANDLORD in recovering possession of the Leased
Premises, and all reasonable costs and charges for the care of the Leased
Premises while vacant, which damages shall be
25
due and payable by Tenant to LANDLORD at such time or times as such
expenses shall have been incurred by LANDLORD; and
(ii) a sum equal to all damages set forth in this Article 17 and
in Article 18.
(2) Without any previous notice or demand, separate actions may be
maintained by LANDLORD against Tenant from time to time to recover any damages
which, at the commencement of any such action, have then or theretofore become
due and payable to the LANDLORD under this Article 17 and subsections hereof
without waiting until the end of the then current term.
(3) All sums which Tenant has agreed to pay by way of adjustments to
rent or equitable adjustments in utility charges shall be deemed rent reserved
in this Lease within the meaning of this Article 17 and subsections hereof.
17.6 In addition to any other remedy, a ten (10%) per cent late charge
shall be due and payable on any portion of rent or other charges not received by
LANDLORD on or before the fifth (5th) day of the month in which it is due. This
is liquidated damages for the added costs incurred by the LANDLORD.
Notwithstanding the above, the foregoing late charge shall not be imposed until
five (5) days following oral notice to the Tenant that any such payment is
overdue, in connection with the first episode of late payment occurring during
any twelve (12) month period during the term of this Lease.
18. LIABILITY OF TENANT FOR DEFICIENT
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In the event that the relation of the LANDLORD and Tenant may cease or
terminate by reason of the default by the Tenant and the re-entry of the
LANDLORD as permitted by the terms and conditions contained in this Lease or by
the ejectment of the Tenant by summary proceedings or other judicial
proceedings, or after the abandonment of the Leased Premises by the Tenant, it
is hereby agreed that the Tenant shall remain liable to pay in monthly payments
the rent which shall accrue subsequent to the re-entry by the LANDLORD, and the
Tenant expressly agrees to pay as damages for the breach of the covenants herein
contained the difference between the rent reserved and the rent collected and
received, if any, by the LANDLORD, during the remainder of the unexpired term,
as the amount of such difference or deficiency shall from time to time be
ascertained, subject to the LANDLORD's obligation to attempt to mitigate damages
in accordance with Article 17.4 hereof.
19. NOTICES
All notices required or permitted to be given to the LANDLORD shall be
given by certified mail, return receipt requested, at the address hereinbefore
set forth on the first page of this Lease, and/or such other place as the
LANDLORD may designate in writing.
All notices required or permitted to be given to the Tenant shall be given
by certified mail, return receipt requested, at the Leased Premises, with a copy
to Institute for Biological Research and Development, Inc., P. 0. Box
27
19759, Irvine, California 92713-9759, Attn: Thomas B. Semler, Executive Vice
President/Chief Financial Officer, and/or such other place as the Tenant may
designate in writing.
20. NON-WAIVER
The failure by either party to insist upon strict performance of any of the
covenants or conditions of this Lease, or to exercise any option herein conf
erred (except for Tenant's Option to Renew, which must be exercised strictly in
accordance with its terms) in any one or more instances, shall not be construed
as a waiver by such party of any of its rights or remedies in this Lease, and
shall not be construed as a waiver, relinquishment or failure of any such
covenants, conditions, or options, but the same shall be and remain in full
force and effect.
21. RIGHT OF TENANT TO MAKE ALTERATIONS AND IMPROVEMENTS
21.1 The Tenant may make non-structural alterations, additions or
improvements to the Leased Premises having a cost of TWENTY FIVE THOUSAND AND
00/100 ($25,000.00) DOLLARS or less without the consent of LANDLORD. Tenant
may make alterations, additions or improvements having a cost of more than
TWENTY FIVE THOUSAND AND 00/100 ($25,000.00) DOLLARS, or those which are
structural, only with the prior written consent of the LANDLORD, which
consent shall not be unreasonably withheld, provided such alterations,
additions or improvements do not require structural changes
28
in the Leased Premises, or do not lessen the value of the Leased Premises.
Tenant hereby agrees to deliver to the LANDLORD revised "as built" plans showing
any such alteration, addition or improvement, together with evidence of all
required governmental approvals necessary for the performance of such work. Any
consent which may be required of LANDLORD shall be conditioned upon Tenant
furnishing to LANDLORD, detailed plans and specifications with respect to any
such changes, to be approved by LANDLORD in writing. LANDLORD reserves the right
to require Tenant to remove, at Tenant's sole cost and expense, any such
alterations or additions prior to the expiration of the Lease term. If LANDLORD
does not require such removal, any such alterations or additions shall be deemed
to be part of the realty upon installation. LANDLORD and Tenant hereby agree
that they shall perform a walk through inspection of the Leased Premises at
least ninety (90) days prior to the date of expiration of the within Lease
Agreement, at which time LANDLORD shall determine which improvements that have
been installed by the Tenant are to be removed by the Tenant and which of said
improvements are to remain. It is expressly understood and agreed that the
LANDLORD shall have the right to require the Tenant to remove all or any portion
of the built in cabinetry which shall be installed by LANDLORD prior to the
Lease term in accordance with Tenant's Plan. All such alterations, additions or
improvements shall be only in conformity with applicable governmental and
insurance company requirements and regulations applicable to the Leased
29
Premises. Tenant shall hold and save LANDLORD harmless and indemnify LANDLORD
against any claim for damage or injury in connection with any of the foregoing
work which Tenant may make as hereinabove provided.
21.2 Nothing herein contained shall be construed as a concert on the part
of the LANDLORD to subject the estate of the LANDLORD to liability under the
Mechanic's Lien Law of the State of New Jersey, it being expressly understood
that the Landlords estate shall not be subject to such liability.
22. NON-LIABILITY OF LANDLORD
22.1 It is expressly understood and agreed by and between the parties to
this agreement that the Tenant shall assume all risk of damage to its property,
equipment and fixtures occurring in or about the Leased Premises, whatever the
cause of such damage or casualty.
22.2 It is expressly understood and agreed that in any event, the LANDLORD
shall not be liable for any damage or injury to property or person caused by or
resulting from steam, electricity, gas, water, rain, ice or snow, or any leak or
flow from or into any part of said Building, or from any damage or injury
resulting or arising from any other cause or happening whatsoever, except for
such damage caused by the breach by LANDLORD of any warranty or representation
made by LANDLORD or a failure by LANDLORD to perform any obligation on its part
to be performed hereunder.
23. RESERVATION OF EASEMENT
30
The LANDLORD reserves the right, easement and privilege to enter on the
Complex and Leased Premises in order to install, at its own cost and expense,
any storm drains and sewers and/or utility lines in connection therewith as may
be required by the LANDLORD, provided that such entry and/or installation does
not materially interfere with the conduct of Tenant's business and subject to
the restricted area provisions of Article 16. It is understood and agreed that
if such work as may be required by LANDLORD requires an installation which may
displace any paving, lawn, seeded area or shrubs the LANDLORD, shall, at its own
cost and expense, restore said paving, lawn, seeded area or shrubs. The LANDLORD
covenants that the foregoing work shall not unreasonably interfere with the
normal operation of Tenant's business, and the LANDLORD shall indemnify and save
the Tenant harmless in connection with such installations, notwithstanding any
other provision of this Lease.
24. POLLUTION
The Tenant expressly covenants and agrees to indemnify, defend, and save
the LANDLORD harmless against any claim, damage, liability, costs, penalties, or
fines which the LANDLORD may suffer as a result of air, water or ground, toxic
or hazardous waste pollution caused by the Tenant in its use of the Leased
Premises. The Tenant covenants and agrees to notify the LANDLORD immediately of
any claim or notice served upon it with respect to any such claim the Tenant is
causing water, air or ground pollution; and the
31
Tenant, in any event, will take immediate steps to halt, remedy or cure any
pollution of air, water or ground, toxic or hazardous waste caused by the Tenant
by its use of the Leased Premises. The within covenant on the part of the Tenant
shall survive the expiration or earlier termination of this Lease.
25. STATEMENT OF ACCEPTANCE
Upon the delivery of the Leased Premises to the Tenant, pursuant to the
terms and conditions of this Lease, the Tenant covenants and agrees that it will
furnish to the LANDLORD a statement that it accepts the Leased Premises (subject
to LANDLORD's continuing responsibility for "punch list" or "pick-up" items and
latent defects) and agrees to pay rent from the date of acceptance, subject to
the terms and conditions of the Lease as herein contained, which statement may
be in recordable form if required by the LANDLORD, and which statement shall set
forth the Commencement Date and the date of expiration of the Lease term.
26. FORCE MAJEURE
Except for the obligation of the Tenant to pay rent and other charges as in
this Lease provided, the period of time during which the LANDLORD or Tenant is
prevented from performing any act required to be performed under this Lease by
reason of fire, catastrophe, strikes, lockouts, civil commotion, acts of God or
the public enemy, government prohibitions or preemptions, embargoes, inability
to obtain material or labor by reason of governmental regulations or
prohibitions, the act or default of the other party,
32
or other events beyond the reasonable control of LANDLORD or Tenant, as the case
may be, shall be added to the time for performance of such act.
27. STATEMENTS BY LANDLORD AND TENANT
LANDLORD and Tenant agree at any time and from time to time upon not less
than ten (10) days' prior notice from the other to execute, acknowledge and
deliver to the party requesting same, a statement in writing, certifying that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications) that it is not in default (or if claimed to be in default,
stating the amount and nature of the default) and specifying the dates to which
the basic rent and other charges have been paid in advance, if any; it being
intended that any such statement delivered pursuant to this Article may be
relied upon as to the facts contained therein.
28. CONDEMNATION
28.1 If due to the condemnation or taking or seizure by any authority
having the right of eminent domain, (i) more than fifteen (15%) percent of the
Leased Premises is taken or rendered untenantable, or (ii) in the event that
more than twenty-five (25%) percent of the ground allocated to the Building is
taken (including the parking areas, but exclusive of front, side and rear set
back areas) , or (iii) if access to the Leased Premises be denied, which taking
in the manner hereinabove referred to and in excess of the foregoing percentage
amounts shall unreasonably or unduly interfere with the use of the
33
Building, ground area, parking area, or deny access to the Leased Premises, then
and in either of such events as hereinabove provided, the Lease term created
shall, at the option of the Tenant, terminate, cease and become null and void
from the date when the authority exercising the power of eminent domain takes or
interferes with the use of the Building or the Leased Premises, its use of the
ground area, parking area, or area of access to the Leased Premises. The Tenant
shall only be responsible for the payment of rent until the time of surrender.
In any event, no part of the LANDLORD's condemnation award shall belong to or be
claimed by the Tenant. Without diminishing LANDLORD's award, the Tenant shall
have the right to make a claim against the condemning authority for such
independent claim which it may have and as may be allowed by law, for costs and
damages due to relocating, moving and other similar costs and charges directly
incurred by the Tenant and resulting from such condemnation.
28.2 In the event of any partial taking which would not be cause for
termination of the within Lease or in the event of any partial taking in excess
of the percentages provided in Article 28.1, and in which event the Tenant shall
elect to retain the balance of the Leased Premises remaining after such taking,
then and in either event, the rent shall abate in an amount mutually to be
agreed upon between the LANDLORD and Tenant based on the relationship that the
character of the property prior to the taking bears to the property which shall
remain after such condemnation. In any event, no part of
34
the LANDLORD's condemnation award shall belong to or be claimed by the Tenant.
However, the LANDLORD shall, to the extent permitted by applicable law and as
the same may be practicable on the site of the Leased Premises, at the
LANDLORD's sole cost and expense, promptly make such repairs and alterations in
order to restore the Building and/or improvements to usable condition to the
extent of the condemnation award.
29. LANDLORD'S REMEDIES
29.1 The rights and remedies given to the LANDLORD in this Lease are
distinct, separate and cumulative remedies, and no one of them, whether or not
exercised by the LANDLORD, shall be deemed to be in exclusion of any of the
others.
29.2 In addition to any other legal remedies for violation or breach by or
on the part of the Tenant or by any undertenant or by anyone holding or claiming
under the Tenant or any one of them, of the restrictions, agreements or
covenants of this Lease on the part of the Tenant to be performed or fulfilled,
such violation or breach shall be restrainable by injunction at the suit of the
LANDLORD.
29.3 No receipt of money by the LANDLORD from any receiver, trustee or
custodian or debtors in possession shall reinstate, continue or extend the term
of this Lease or affect any notice theretofore given to the Tenant, or to any
such receiver, trustee, custodian or debtor in possession, or operate as a
waiver or estoppel of the right of the LANDLORD to recover
35
possession of the Leased Premises for any of the causes therein enumerated by
any lawful remedy; and the failure of the LANDLORD to enforce any covenant or
condition by reason of its breach by the Tenant shall not be deemed to void or
affect the right of the LANDLORD to enforce the same covenant or condition on
the occasion of any subsequent default or breach.
30. QUIET ENJOYMENT
The LANDLORD further covenants that the Tenant, on paying the rental and
performing the covenants and conditions contained in this Lease (within
applicable notice and cure periods as are set forth within this Lease) , shall
and may peaceably and quietly have, hold and enjoy the Leased Premises for the
term aforesaid.
31. SURRENDER OF PREMISES
On the last day, or earlier permitted termination of the Lease
term, Tenant shall quit and surrender the Leased Premises in good and orderly
condition and repair (reasonable wear and tear, and damage by fire or other
casualty excepted) and shall deliver and surrender the Leased Premises to the
LANDLORD peaceably, together with all alterations, additions and improvements
in, to or on the Leased Premises made by Tenant as permitted under the Lease.
The LANDLORD reserves the right, however, to require the Tenant at its cost and
expense to remove any alterations or improvements installed by the Tenant, and
not permitted pursuant to the terms and conditions of this Lease, which covenant
shall survive the surrender and the
36
delivery of the Leased Premises as provided hereunder. Prior to the expiration
of the Lease term the Tenant shall remove all of its property, fixtures,
equipment and trade fixtures from the Leased Premises. All property not removed
by Tenant shall be deemed abandoned by Tenant, and LANDLORD reserves the right
to charge the reasonable cost of such removal to the Tenant, which obligation
shall survive the Lease termination and surrender hereinabove provided. If the
Leased Premises be not surrendered at the end of the Lease term, Tenant shall
indemnify LANDLORD against loss or liability resulting from delay by Tenant in
surrendering the Leased Premises, including, without limitation any claims made
by any succeeding tenant founded on the delay.
32. INDEMNITY
Anything in this Lease to the contrary notwithstanding, and without
limiting the Tenant's obligation to provide insurance pursuant to Article 10
hereunder but subject to the provisions of Article 10.4, the Tenant covenants
and agrees that it will indemnify, defend and save harmless the LANDLORD against
and from all liabilities, obligations, damages, penalties, claims, costs,
charges and expenses, including without limitation reasonable attorneys' fees,
which may be imposed upon or incurred by LANDLORD by reason of any of the
following occurring during the term of this Lease:
(i) Any matter, cause or thing arising out of Tenant's use, occupancy,
control or management of the Leased Premises and any part thereof;
37
(ii) Any negligence on the part of the Tenant or any of its agents,
contractors, servants, employees or licensees;
(iii) Any accident, injury, damage to any person or property occurring
within the Leased Premises;
(iv) Any failure on the part of Tenant to perform or comply with any
of the covenants, agreements, terms or conditions contained in this Lease
on its part to be performed or complied with, to the extent the same are
not covered by any insurance which is carried by LANDLORD. The foregoing
shall not be deemed to impose liability for consequential damages based
solely on the non-payment of rent by the Tenant.
LANDLORD shall promptly notify Tenant of any such claim asserted again*t it and
shall promptly send to Tenant copies of all papers or legal process served upon
it in connection with any action or proceeding brought against LANDLORD by
reason of any such claim.
33. LEASE CONSTRUCTION
This Lease shall be construed pursuant to the laws of the State of New
Jersey.
34. BIND AND INURE CLAUSE
The terms, covenants and conditions of the within Lease shall be binding
upon and inure to the benefit of each of the parties hereto and their respective
successors and assigns.
35. DEFINITIONS
The neuter gender, when used herein and in the acknowledgment hereafter set
forth, shall include all persons and corporations, and words used
38
in the singular shall include words in the plural where the text of the
instrument so requires.
36. DEFINITION OF TERM OF "LANDLORD"
When the term "LANDLORD" is used in this Lease it shall be construed to
mean and include only the owner of the title to the Building containing the
Leased Premises. Upon the transfer by the LANDLORD of the title, the LANDLORD
shall advise the Tenant in writing by certified mail, return receipt requested,
of the name of the LANDLORD's transferee. In such event, the LANDLORD shall be
automatically freed and relieved from and after the date of such transfer of
title of all personal liability with respect to the performance of any of the
covenants and obligations on the part of the LANDLORD herein contained to be
performed, provided any such transfer and conveyance by the LANDLORD is
expressly subject to the assumption by the grantee or transferee of the
obligations of the LANDLORD to be performed pursuant to the terms and conditions
of the within Lease.
37. COVENANTS OF FURTHER ASSURANCES
If, in connection with obtaining financing for the improvements on the
Complex, the Mortgage Lender shall request reasonable modifications in this
Lease as a condition to such financing, Tenant will not unreasonably withhold,
delay or refuse its consent thereto, provided that such modifications do not in
Tenant's reasonable judgment increase the obligations of Tenant
39
hereunder or materially adversely affect the leasehold interest hereby created
or Tenant's use and enjoyment of the Leased Premises.
38. COVENANT AGAINST LIENS
Tenant agrees that it shall not encumber, or suffer or permit to be
encumbered, the Leased Premises or the fee thereof by any lien, charge or
encumbrance, and Tenant shall have no authority to mortgage or hypothecate this
Lease in any way whatsoever. Any violation of this Article shall be considered a
breach of this Lease.
39. SUBORDINATION
This Lease shall be subject and subordinate at all times to the ,, lien of
any mortgages or ground leases or other encumbrances now or hereafter placed on
the land Complex without the necessity of any further instrument or act on the
part of Tenant to effectuate such subordination, but Tenant covenants and agrees
to execute and deliver upon demand such further instrument or instruments
evidencing such subordination of the Lease to the lien of any such mortgage or
ground lease or other encumbrances as shall be desired by a mortgagee or
proposed mortgagee or by any person. LANDLORD hereby agrees that it shall use
its best efforts to obtain a subordination, non-disturbance and attornment
agreement from LANDLORD's current mortgagee, which agreement will be on said
mortgagee's customary form.
40. EXCULPATION OF LANDLORD
40
Neither LANDLORD nor its principals shall have any personal obligation for
payment of any indebtedness or for the performance of any obligation under this
Lease but the payment of the indebtedness and the performance of obligations
expressed herein may be enforced only against the Complex, and the rents, issues
and profits thereof, and the Tenant agrees that no deficiency judgment or other
judgment for money damages shall in any event be entered by it against the
LANDLORD or its principals personally in any action; provided, however, that the
provisions of this paragraph shall in no way affect Tenant's other remedies for
the payment of any indebtedness or for the enforcement of LANDLORD's covenants
under this Lease.
41. NET RENT
It is the purpose and intent of the LANDLORD and Tenant that the rent shall
be absolutely net to LANDLORD, so that this Lease shall yield, net, to LANDLORD,
the rent specified in Article 3 and all additional rent and charges under the
terms hereof, in each month during the term of the Lease, and that all costs,
expenses and obligations of every kind and nature whatsoever relating to the
Leased Premises which may arise or become due during or out of the term of this
Lease, shall be paid by the Tenant, except for such obligations and charges as
have otherwise expressly been assumed by the LANDLORD in accordance with the
terms and conditions of the Lease.
42. SECURITY
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The Tenant shall deposit with the LANDLORD, at least seven (7) days prior
to the Commencement Date hereunder, the sum of THIRTY THOUSAND AND 00/100
($30,000.00) DOLLARS as security for the full and faithful performance of this
Lease upon the part of the Tenant to be performed. Anything herein contained to
the contrary notwithstanding, it is expressly understood and agreed that the
said security deposit shall be held by Epstein, Epstein, Brown & Bosek in an
interest-bearing trust account, with interest to follow the deposit. Tenant
covenants and agrees that it will not assign, pledge, hypothecate, mortgage or
otherwise encumber the aforementioned security during the term of this Lease. It
is expressly understood and agreed that the LANDLORD shall not have the right to
co-mingle the security funds with its general funds and said security shall be
required to be segregated. Upon termination of this Lease, and providing the
Tenant is not in default hereunder and has performed all of the conditions of
this Lease, the LANDLORD shall return to the Tenant the said sum of THIRTY
THOUSAND AND 00/100 ($30,000.00) DOLLARS, together with interest thereon.
43. ASSIGNMENT AND SUBLETTING
43.1 Tenant shall neither assign this Lease nor sublet all or any portion
of the Leased Premises to any person or entity other than a parent, subsidiary
or affiliate of Tenant without LANDLORD's prior consent, which consent shall not
be unreasonably withheld, subject to LANDLORD's rights hereinafter provided in
Article 43.4. LANDLORD may withhold such consent if,
42
in the reasonable exercise of its judgment, it determines that any of the
following enumerated conditions are applicable:
(a) the proposed assignee's or subtenant's financial condition is not
sufficient to meet its obligations undertaken in such assignment or
sublease;
(b) the proposed use of the Leased Premises is not appropriate for the
Building or in keeping with the character of its existing tenancies;
(c) such assignee's or subtenant's occupancy will cause an excessive
density of traffic or make excessive demands on the building's services,
maintenance or facilities;
(d) such assignee or subtenant is a tenant of and is vacating premises
in the Building, the property known as Neptune Business Center or any other
building owned by or through the persons constituting LANDLORD hereunder,
including any corporation in which LANDLORD's principals are majority
stockholders, and any affiliates, subsidiaries or parent o f such
corporation;
(e) the rental obligation of such assignee or subtenant would be less
than eighty (80%) percent of Tenant's rental obligations hereunder;
(f) less than ninety (90%) per cent of the Building's rentable area is
then rented; or
43
(g) LANDLORD wishes to accept the offer as provided in Article 43.4.
43.2 Any request by Tenant for LANDLORD's consent to an assignment of the
Lease shall state the proposed assignee's address and be accompanied by a profit
and loss and balance statements of the proposed assignee for the prior three (3)
years, as well as duplicate original of the instrument of assignment (wherein
the assignee assumes, jointly and severally with Tenant, the performance of
Tenant's obligations hereunder).
43.3 Any request by Tenant for LANDLORD's consent to a sublease shall state
the proposed subtenant's address and be accompanied by profit and loss and
balance statements of the proposed subtenant for the prior three (3) years, as
well as a duplicate original of the instrument of sublease (wherein Tenant and
the proposed subtenant agree that such sublease is subject to the Lease and such
subtenant agrees that, if the Lease is terminated because of Tenant's default,
such subtenant shall, at LANDLORD's option, attorn to LANDLORD).
43.4 Any request by Tenant for LANDLORD's consent to an assignment of the
Lease or a sublease of all or substantially all of the Leased Premises shall
clearly set forth the proposed terms of such proposed assignment or sublease and
shall constitute Tenant I s of f er to cancel the Lease. LANDLORD may accept
such of f er by notice to Tenant within thirty (30) days after LANDLORD's
receipt thereof, in which event, the Lease shall
44
terminate as of the end of the month following the month in which such notice is
sent (with the same effect as if such date were the date fixed herein for the
natural expiration of the term), annual rent and additional rent shall be
apportioned to such date, Tenant shall surrender the Leased Premises on such
date as herein provided, and subject to payment of required Lease adjustments,
the parties shall thereafter have no further liability one to the other. If
LANDLORD fails to send such notice, Tenant, within twenty (20) days after the
expiration of such ninety (90) day period, may assign the Lease or sublet all or
substantially all of the Leased Premises to the proposed assignee or subtenant
and upon the terms specified in such request, subject, however, to LANDLORD's
rights under Article 43.1(a) through (f). In any event, Tenant shall pay to
LANDLORD, as additional rent, amounts received by Tenant from the assignee or
subtenant in excess of the annual rent and additional rent payable by Tenant
hereunder.
43.5 In the event of a permitted assignment, LANDLORD may collect annual
rent and additional rent directly from the assignee. In the event of a permitted
sublease, LANDLORD may, if Tenant defaults hereunder, collect annual rent and
additional rent directly from the subtenant. In either such event, LANDLORD may
apply any amounts so collected to the annual rent and additional rent hereunder
without thereby waiving any provisions hereof or releasing Tenant from liability
for the performance of its obligations hereunder.
45
43.6 LANDLORD's consent to any assignment or sublease hereunder shall not
be deemed a consent to any further proposed assignment or sublease by Tenant or
any one claiming under or through the Tenant, except in accordance with this
Article 43.
43.7 It is expressly understood and agreed that Tenant's Option to Renew,
as hereinafter set forth in Article 44, shall be personal to Tenant only (for
the purposes of this Article 43.7 being deemed to include any parent, subsidiary
or affiliate of Tenant) , and may not be exercised by any permitted assignee or
subtenant hereunder. It is understood and agreed that Tenant I s Option to Renew
shall be null and void in the event that fifty (50%) percent or more of the
Leased Premises have been sublet by the Tenant prior to the date set for the
exercise by Tenant of any Option to Renew hereinafter set forth.
44. OPTION TO RENEW
Provided the Tenant is not in default pursuant to the terms and conditions
of this Lease, the Tenant is hereby given the right and privilege to renew the
within Lease for two (2) successive five (5) year periods, to commence at the
end of the initial term of this Lease, which renewals shall be upon the same
terms and conditions as in this Lease contained, except as follows:
(1) During the first five (5) year renewal term, Tenant shall pay to
LANDLORD annual rent in the amount of ONE HUNDRED FORTY SIX THOUSAND FIVE
HUNDRED TWENTY AND 00/100 ($146,520.00) DOLLARS per annum, payable in equal
monthly installments in the
46
amount of TWELVE THOUSAND TWO HUNDRED TEN AND 00/100 ($12,210.00) DOLLARS
per month in the manner provided in Article 3 of this Lease.
(2) (a) During the second five (5) year renewal term, there shall be
paid annually the minimum annual rent of ONE HUNDRED FORTY SIX THOUSAND
FIVE HUNDRED TWENTY AND 00/100 ($146,520.00) DOLLARS hereinafter referred
to as the "Original Base Rent". The Original Base Rent shall be increased,
if applicable, in the event of an increase in the Cost of Living Index
based on application of the Cost of Living formula which is hereinafter
defined as follows:
At the inception of the second five (5) year renewal term, there shall
be compared the "All Items" Index figures for the New
York-Northeastern New Jersey average of the "Consumers Price Index for
All Urban Consumers" (revised CPI-U) (1982-84 equal to 100) published
by the Bureau of Labor Statistics of the U.S. Department of Labor (in
this paragraph hereinafter referred to as the "Index") for the first
month of the first five (5) year renewal term of this Lease with the
first month of the second five (5) year renewal term. If there is an
increase in the Index for the first month of the second five (5) year
renewal period compared to the applicable Index for the first month of
the first five (5) year renewal term of this Lease, said increase in
Index figures shall be used to determine the applicable percentage of
increase which shall be the basis for determining rent increase over
the Original Base Rent in accordance with the formula hereinbefore set
forth, and as shown in the following example:
EXAMPLE: If the Index figure for the first month of the first five (5)
year renewal term of this Lease is 100 (the denominator) and
the Index figure for the first month of the second five (5)
year renewal
47
term is 110, the increase in the Index figures will produce
an increase of 10%.
(110-100)
-------
100
Applying the formula, 10% of $146,520.00 is equal to
$14,652.00. Adding said sum of $14,652.00 to the original
Base Rent of $146,520.00 produces an annual renewal rent of
$161,172.00 payable in equal monthly installments of
$13,431.00.
Since the rent payment for at least the first month of the second five (5) year
renewal term will have been paid prior to the determination of any applicable
rent increase in excess of the Original Base Rent payable for the second five
(5) year renewal term, any increase for months already elapsed after
commencement of the second five (5) year renewal term shall then be added to the
next monthly rent payment then becoming due and payable.
(b) Anything herein contained to the contrary notwithstanding, it
is expressly understood and agreed that the minimum rent during the second
five (5) year renewal period shall not be less than ONE HUNDRED FORTY SIX
THOUSAND FIVE HUNDRED TWENTY AND 00/100 ($146,520.00) DOLLARS per annum.
(c) It is understood and agreed that should the applicable Index
figure not be published for any particular month when the same shall be
applicable under the terms of this Lease, the last published figure prior
to that date shall be used, but in no event shall such figure be
retroactive for a period in excess of three (3) months. In the event that
the applicable Index figure is
48
discontinued by way of publication with respect to the entire Index, then
and in that event, the parties shall agree on an equivalent and substituted
Cost of Living Index to be applied in the same manner as in this Lease
provided. In the event the parties cannot mutually agree as to the
equivalent substituted Index, then and in that event the question should be
submitted for arbitration to the American Arbitration Association.
(d) If the base year (1982-84 equal to 100) hereinabove referred
to with respect to the "Index" shall be changed after the execution of this
Lease, appropriate adjustments based on such new Index shall be made so as
to have a proper application of the Cost of Living formula.
(3) The right, option, and privilege of the Tenant to renew
this Lease as hereinabove set forth is expressly conditioned upon the
Tenant delivering to the LANDLORD, in writing, by certified mail,
return receipt requested, six (6) months' prior notice of its
intention to renew, which notice shall be given to the LANDLORD by the
Tenant no later than six (6) months prior to the date fixed for
termination of the original term or first renewal term of this Lease,
as applicable.
(4) In addition to Tenant's obligation to pay the renewal
rent as hereinabove provided, Tenant shall be responsible to pay all
Additional Rent and other charges as are in this Lease provided.
(5) LANDLORD further agrees that it shall repaint and
re-carpet the Leased Premises at the commencement of each five (5)
year
49
renewal term, using building standard paint and carpeting. Tenant
hereby agrees that it shall fully cooperate with LANDLORD in
connection with the performance of such work so that the same may be
accomplished as quickly as is possible and at the least possible cost
to LANDLORD.
45. FINANCIAL STATEMENTS
The Tenant agrees, at the request of the LANDLORD, to be made not more than
once during any lease year, to furnish its latest current financial statements
provided by the accountant and certified to by an officer of the corporation.
46. TENANT'S FIRST RIGHT OF NEGOTIATION
46.1 Tenant is hereby granted the first right to negotiate for the leasing
of the balance of the space in the Building upon the following terms and
conditions. Prior to leasing any unoccupied space within the Building to any
other tenant, the LANDLORD hereby agrees that it shall give oral notice to the
Tenant at such time as LANDLORD is actively discussing the leasing of such
unoccupied space to any other person or entity. Tenant shall then have five (5)
days within which to notify the LANDLORD, in writing, of its intention to
negotiate a lease agreement with LANDLORD for such additional space. In the
event Tenant elects to negotiate for the leasing of said space with LANDLORD, it
is understood and agreed that an amendment to the within Lease Agreement shall
be entered into by LANDLORD and Tenant within two
50
(2) weeks following the date upon which LANDLORD originally shall have given
oral notice to the Tenant, as hereinabove set forth. In the event that Tenant
does not respond to LANDLORD's notice within the five (5) day period hereinabove
set forth, or in the event LANDLORD and Tenant do not enter into a lease
amendment for such additional space within the two (2) week period hereinabove
set forth, LANDLORD shall be entitled to lease such space to any third party,
free and clear of Tenant I s rights hereunder. Tenant expressly acknowledges
that the LANDLORD is currently involved in negotiations with Jersey Shore
Medical Center for the leasing of approximately 2,100 square feet of the
Building, and it is understood and agreed that Tenant shall have no rights
whatsoever to negotiate for the leasing of said space. Nothing hereinabove
contained shall prevent or prohibit the LANDLORD from extending the term of any
lease agreement in the Building. Notwithstanding anything hereinabove contained,
the LANDLORD hereby agrees that it shall not lease the space immediately
contiguous to the Leased Premises, containing approximately 3,800 square feet,
prior to January 1, 1992.
46.2 In addition, the Tenant shall have the first right of negotiation for
the leasing of up to 10,000 square feet of the next building to be constructed
by LANDLORD on the Complex, in the same manner as is hereinabove set forth in
Article 46.1. said right shall expire on June 30, 1992. In the event that Tenant
enters into a lease for any space within said building, the Tenant shall be
given the additional first right of negotiation on all space
51
contiguous to that leased by the Tenant, which right shall continue for the
balance of the initial term of the within Lease Agreement.
47. LANDLORD IS DEFAULT
Notwithstanding the provisions of Article 3.1 to the contrary, in the event
LANDLORD's failures to perform any obligation on its part to be performed after
receiving thirty (30) days' prior written notice of such failure from Tenant,
then, in addition to all other rights and remedies of Tenant at law or in
equity, Tenant shall be entitled (but shall not be obligated) to remedy such
failure and to charge the reasonable cost thereof to the LANDLORD. Nothing
herein shall entitle the Tenant to any offset or deduction from the rent
otherwise payable in accordance with the terms and conditions of this Lease.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals or
caused these presents to be signed by its proper corporate officers and caused
its proper corporate seal to be hereunto affixed, the day and year first above
written.
WITNESS: /s/ Sandra A. Steinberg GAMMA THREE ASSOCIATES
LIMITED PARTNERSHIP
BY: /s/ Herbert Punia
---------------------------
ATTEST: /s/ Lisa M. Stensness INSTITUTE FOR BIOLOGICAL
RESEARCH AND DEVELOPMENT, INC.
52
BY: /s/ Thomas Semler
--------------------------
53
STATE OF NEW JERSEY )
) SS.:
COUNTY OF SOMERSET )
BE IT REMEMBERED, that on this 27th day of November 1991, before me, the
subscriber, Sandra A. Steinberg personally appeared Herbert Punia Partner of
GAMMA THREE ASSOCIATES LIMITED PARTNERSHIP, a New Jersey Limited Partnership,
who, I am satisfied, is the LANDLORD mentioned in the within Instrument, and
thereupon he acknowledged that he signed, sealed and delivered the same as
his act and deed, for the uses and purposes therein expressed.
/s/ Sandra A. Steinberg
STATE OF CALIFORNIA )
) SS.
COUNTY OF ORANGE )
BE IT REMEMBERED, that on this 26th day of November 1991, before me,
Lisa Stensness the subs personally appeared Thomas Semler who, I am
satisfied, is the person the within Instrument as of INSTITUTE FOR BIOLOGICAL
RESEARCH AND DEVELOPMENT, INC., a Delaware corporation, the Tenant named
therein, and he thereupon acknowledged that the said instrument made by the
corporation and sealed with its corporate seal, was signed, sealed with the
corporate seal and delivered by him as such officer and is the voluntary act
and deed of the corporation, made by virtue of authority from its Board of
Directors.
/s/ Lisa M. Stensness
55
LIST OF SCHEDULES
Schedule "A" - Site Plan
Schedule "A-1" - Metes and Bounds Description
Schedule "B" - Building Standard Work Letter
Schedule "B-1" Tenant's Plan
56