EXHIBIT 10.26
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 27th day of July, 2000, between GLOBE
CENTER REALTY FIVE, L.L.C., a Delaware limited liability company ("Landlord"),
and the Tenant named below.
Tenant: PHARMANETICS, INC., a North Carolina corporation
Tenant's representative: ▇▇▇▇ ▇▇▇▇▇▇▇
Tenant's address and phone no.: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; Phone (▇▇▇) ▇▇▇-▇▇▇▇.
Premises: That portion of the Building, containing approximately 59,420 rentable square feet, as
determined by Landlord, as shown on Exhibit A.
Project: Globe Center (Approximately 598,504 square feet)
Building: Globe Center Five, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (approximately
111,128 square feet)
Tenant's Proportionate Share of Project: 9.9%
Tenant's Proportionate Share of Building: 53.5%
Lease Term: Beginning on the Commencement Date and ending on the last day of the one hundred
twentieth (120th) full calendar month thereafter.
Commencement Date: The later to occur of (i) Substantial Completion of Tenant Improvements, estimated to be
October 15, 2000, or (ii) January 1, 2001.
Initial Monthly Base Rent: $25,005.92
Initial Estimated Monthly 1. Utilities: Tenant's Responsibility
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Operating Expense Payments:
(estimates only and subject to 2. Common Area Charges: $2,228.25
adjustment for actual costs and
expenses according to the 3. Taxes: $2,228.25
provisions of this Lease)
4. Insurance: $ 148.55
5. Others: $ 0.00
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Initial Estimated Monthly
Operating Expense Payments: $ 4,605.05
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Initial Monthly Base Rent and
Estimated Operating Expense
Payments: $29,610.97
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Security Deposit: $29,610.97, See Paragraph 5, Page 2 of this Lease.
Broker: ▇▇▇▇▇▇ Commercial (Commission to be paid by Landlord per Paragraph 36)
Addenda: Addenda One through Three
1. Granting Clause. In consideration of the obligation of Tenant to pay rent
as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease.
2. Acceptance of Premises. Subject to Landlord's completion of the initial
Tenant Improvements per Addendum One, Section II, Tenant shall accept the
Premises in its condition as of the Commencement Date, subject to all applicable
laws, ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant's intended purposes. Except as provided in Addendum
One, Section II and/or Paragraph 10, in no event shall Landlord have any
obligation for any defects in the Premises or any limitation on its use. The
taking of possession of the Premises shall be conclusive evidence that Tenant
accepts the Premises and that the Premises were in good condition at the time
possession was taken except for items that are Landlord's responsibility under
Addendum One, Section II and/or Paragraph 10 and any punch list items agreed to
in writing by Landlord and Tenant.
3. Use. The Premises shall be used only for the purpose of office space,
light manufacturing of hospital and health care products, operating a medical
laboratory and for receiving, storing, shipping and selling (but limited to
wholesale sales) products, materials and merchandise made and/or distributed by
Tenant, and for such other lawful purposes as may be incidental thereto. Tenant
shall not conduct or give notice of any auction, liquidation, or going out of
business sale on the Premises. Tenant will use the Premises in a careful, safe
and proper manner and will not commit waste, overload the floor or structure of
the Premises or subject the Premises to use that would damage the Premises.
Tenant shall not permit any objectionable or unpleasant odors, smoke, dust, gas,
noise, or vibrations to emanate from the Premises, or take any other action that
would constitute a nuisance or would disturb, unreasonably interfere with, or
endanger Landlord or any tenants of the Project. Outside storage, including
without limitation, storage of inoperable trucks and other vehicles not used in
Tenant's daily business operations, is prohibited without Landlord's prior
written consent. Tenant, at its sole expense, shall use and occupy the Premises
in compliance with all laws, including, without limitation, the Americans With
Disabilities Act, orders, judgments, ordinances, regulations, codes, directives,
permits, licenses, covenants and restrictions now or hereafter applicable to the
Premises (collectively, "Legal Requirements"). The Premises shall not be used
as a place of public accommodation under the Americans With Disabilities Act or
similar state statutes or local ordinances or any regulations promulgated
thereunder, all as may be amended from time to time. Tenant shall, at its
expense, make any alterations or modifications, within or without the Premises,
that are required by Legal Requirements related to Tenant's use or occupation of
the Premises. Tenant will not use or permit the Premises to be used for any
purpose or in any manner that would void Tenant's or Landlord's insurance,
increase the insurance risk, or cause the disallowance of any sprinkler credits.
If any increase in the cost of any insurance on the Premises or the Project is
caused by Tenant's use or occupation of the Premises, or because Tenant vacates
the Premises, then Tenant shall pay the amount of such increase to Landlord.
Any occupation of the Premises by Tenant prior to the Commencement Date shall be
subject to all obligations of Tenant under this Lease.
4. Base Rent. Tenant shall pay Base Rent in the amount set forth above. The
first month's Base Rent and the first monthly installment of estimated Operating
Expenses (as hereafter defined) shall be due and payable on the date hereof,
and Tenant promises to pay to Landlord in advance, without demand, deduction or
set-off (except as may be otherwise expressly provided herein), monthly
installments of Base Rent on or before the first day of each calendar month
succeeding the Commencement Date. Payments of Base Rent for any fractional
calendar month shall be prorated. All payments required to be made by Tenant to
Landlord hereunder shall be payable at such address as Landlord may specify from
time to time by written notice delivered in accordance herewith. The obligation
of Tenant to pay Base Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall have no
right at any time to ▇▇▇▇▇, reduce, or set-off any rent due hereunder except as
may be expressly provided in this Lease. If Tenant is delinquent in any monthly
installment of Base Rent or of estimated Operating Expenses for more than 5
days, Tenant shall pay to Landlord on demand a late charge equal to five percent
(5%) of such delinquent sum. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as a penalty.
5. Security Deposit. Tenant shall not be required to deposit the Security
Deposit until the date which is six (6) months prior to the scheduled date of
expiration of the Lease Term. The Security Deposit shall thereafter be held by
Landlord as security for the performance of Tenant's obligations under this
Lease. The Security Deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon each occurrence of an
Event of Default (hereinafter defined), Landlord may use all or part of the
Security Deposit (if then deposited) to pay delinquent payments due under this
Lease, and the cost of any damage, injury, expense or liability caused by such
Event of Default, without prejudice to any other remedy provided herein or
provided by law. Tenant shall pay Landlord on demand the amount that will
restore the Security Deposit to its original amount. Landlord's obligation
respecting the Security Deposit is that of a debtor, not a trustee; no interest
shall accrue thereon. The Security Deposit shall be the property of Landlord,
but shall be paid to Tenant when Tenant's obligations under this Lease have been
completely fulfilled. Landlord shall be released from any obligation with
respect to the Security Deposit upon transfer of this Lease and the Premises to
a person or entity assuming Landlord's obligations under this Paragraph 5.
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6. Operating Expense Payments. During each month of the Lease Term, on the
same date that Base Rent is due, Tenant shall pay Landlord an amount equal to
1/12 of the annual cost, as estimated by Landlord from time to time, of Tenant's
Proportionate Share (hereinafter defined) of Operating Expenses for the Project.
Payments thereof for any fractional calendar month shall be prorated. The term
"Operating Expenses" means all costs and expenses reasonably incurred by
Landlord with respect to the ownership, maintenance, and operation of the
Project including, but not limited to costs of: Taxes (hereinafter defined) and
fees payable to tax consultants and attorneys for consultation and contesting
Taxes; insurance; utilities; maintenance and repair of all portions of the
Project to the extent such repair is not necessitated because of the negligence
of another tenant in the Project, including without limitation (exclusive of
latent defects, if any), paving and parking areas, and mowing, landscaping,
utility lines, lighting, electrical systems and other mechanical and building
systems; reasonable amounts paid to nonaffiliated contractors and subcontractors
for work or services performed in connection with any of the foregoing; charges
or assessments of any association to which the Project is subject; property
management fees payable to a property manager, including any affiliate of
Landlord; security services, if any; trash collection, sweeping and removal; and
additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant) provided that the cost of additions or alterations
that are required to be capitalized for federal income tax purposes shall be
amortized on a straight line basis over a period equal to the lesser of the
useful life thereof for federal income tax purposes or ten (10) years.
Operating Expenses do not include costs, expenses, depreciation or amortization
for capital repairs and capital replacements required to be made by Landlord
under Paragraph 10 of this Lease, debt service under mortgages or ground rent
under ground leases, costs of restoration to the extent of net insurance
proceeds received by Landlord with respect thereto, leasing commissions, or the
costs of renovating space for tenants.
Notwithstanding anything contained herein to the contrary, for purposes of
computing Tenant's Proportionate Share of Operating Expenses hereunder, in no
event shall "Controllable Operating Expenses" for any calendar year during the
Lease Term, commencing with calendar year 2002, exceed the "Cap". As used
herein, (i) "Controllable Operating Expenses" shall mean all routine Operating
Expenses other than the costs of utilities, insurance, Taxes and snow and ice
removal; and (ii) the "Cap" shall mean (A) relative to calendar year 2002, the
amount obtained by multiplying Controllable Operating Expenses (as computed
hereunder) for calendar year 2001 by 1.06; and (B) relative to each calendar
year subsequent to 2002, the amount obtained by multiplying the Cap for the
previous calendar year by 1.06 (i.e., from and after calendar year 2003, the Cap
computation will not be affected by the actual level of Operating Expenses or
Controllable Operating Expenses for any given year).
If Tenant's total payments of Operating Expenses for any year are less than
Tenant's Proportionate Share of actual Operating Expenses for such year, then
Tenant shall pay the difference to Landlord within 30 days after demand, and if
more, then Landlord shall retain such excess and credit it against Tenant's next
payments. For purposes of calculating Tenant's Proportionate Share of Operating
Expenses, a year shall mean a calendar year except the first year, which shall
begin on the Commencement Date, and the last year, which shall end on the
expiration of this Lease. With respect to Operating Expenses which Landlord
allocates to the entire Project, Tenant's "Proportionate Share" shall be the
percentage set forth on the first page of this Lease as Tenant's Proportionate
Share of the Project as reasonably adjusted by Landlord in the future for
changes in the physical size of the Premises or the Project; and, with respect
to Operating Expenses which Landlord allocates only to the Building, Tenant's
"Proportionate Share" shall be the percentage set forth on the first page of
this Lease as Tenant's Proportionate Share of the Building as reasonably
adjusted by Landlord in the future for changes in the physical size of the
Premises or the Building. Landlord may equitably increase Tenant's
Proportionate Share for any item of expense or cost reimbursable by Tenant that
relates to a repair, replacement, or service that benefits only the Premises or
only a portion of the Project or Building that includes the Premises or that
varies with occupancy or use.
7. Utilities. Tenant shall pay for all water, gas, electricity, heat, light,
power, telephone, sewer, sprinkler services, refuse and trash collection, and
other utilities and services used on the Premises, all maintenance charges for
utilities, and any storm sewer charges or other similar charges for utilities
imposed by any governmental entity or utility provider, together with any taxes,
penalties, surcharges or the like pertaining to Tenant's use of the Premises.
Landlord may cause at Tenant's expense any utilities to be separately metered or
charged directly to Tenant by the provider. Tenant shall pay its share of all
charges for jointly metered utilities based upon consumption, as reasonably
determined by Landlord. No interruption or failure of utilities shall result in
the termination of this Lease or the abatement of rent. Tenant agrees to limit
use of water and sewer for normal restroom use.
8. Taxes. Landlord shall pay all taxes, assessments and governmental charges
(collectively referred to as "Taxes") that accrue against the Project during the
Lease Term, which shall be included as part of the Operating Expenses charged to
Tenant. Landlord may contest by appropriate legal proceedings the amount,
validity, or application of any Taxes or liens thereof. All capital levies or
other taxes assessed or imposed on Landlord upon the rents payable to Landlord
under this Lease and any franchise tax, any excise, transaction, sales or
privilege tax, assessment, levy or charge measured by or based, in whole or in
part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any net
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income taxes imposed on Landlord unless such net income taxes are in
substitution for any Taxes payable hereunder. If any such tax or excise is
levied or assessed directly against Tenant, then Tenant shall be responsible for
and shall pay the same at such times and in such manner as the taxing authority
shall require. Tenant shall be liable for all taxes levied or assessed against
any personal property or fixtures placed in the Premises, whether levied or
assessed against Landlord or Tenant.
9. Insurance. Landlord shall maintain all-risk property insurance covering
the full replacement cost of the Building. Landlord may, but is not obligated
to, maintain such other insurance and additional coverages as it may deem
necessary, including, but not limited to, commercial liability insurance and
rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included
in a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless thirty (30) days' prior written notice shall have been
given to Landlord, contain a hostile fire endorsement and a contractual
liability endorsement and provide primary coverage to Landlord (any policy
issued to Landlord providing duplicate or similar coverage shall be deemed
excess over Tenant's policies). Such policies or certificates thereof shall be
delivered to Landlord by Tenant upon commencement of the Lease Term and upon
each renewal of said insurance.
The all-risk property insurance obtained by Landlord and Tenant shall include
a waiver of subrogation by the insurers and all rights based upon an assignment
from its insured, against Landlord or Tenant, their officers, directors,
employees, managers, agents, invitees and contractors, in connection with any
loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all-risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. As to personalty only, Landlord and its
agents, employees and contractors shall not be liable for, and Tenant hereby
waives all claims against such parties for, business interruption and losses
occasioned thereby sustained by Tenant or any person claiming through Tenant
resulting from any accident or occurrence in or upon the Premises or the Project
from any cause whatsoever.
10. Landlord's Repairs. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded. The term "walls" as used in
this Paragraph 10 shall not include windows, glass or plate glass, doors or
overhead doors, special store fronts, dock bumpers, dock plates or levelers, or
office entries. Tenant shall promptly give Landlord written notice of any
repair required by Landlord pursuant to this Paragraph 10, after which Landlord
shall have a reasonable opportunity to repair.
Notwithstanding any contrary term or provision in this Lease, if Landlord
fails to complete any repair required of Landlord hereunder within the Landlord
Cure Period (as hereinafter defined) and such failure results in a significant
adverse impact on Tenant's business operations in the Premises (or a portion
thereof), then the following terms and provisions shall be applicable:
(a) Without waiving or releasing Landlord from any obligation
hereunder, Tenant may (but is under no obligation to) take action to
perform the relevant repair. Provided, however, Tenant must undertake any
such curative action in good faith.
(b) If Tenant incurs expenses in performing a repair to completion
pursuant to this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ shall reimburse Tenant for the
reasonable costs so incurred within thirty (30) days after Landlord's
receipt from Tenant of a statement itemizing such costs.
The "Landlord Cure Period" shall be defined as thirty (30) days after
Landlord receives written notice from Tenant of the need for such repair, or
such longer period as Landlord may reasonably require given the nature of the
required repair, provided that Landlord commences such repair within such thirty
(30) day period and diligently prosecutes such repair to completion.
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11. Tenant's Repairs. Landlord, at Tenant's expense as provided in Paragraph
6, shall maintain in good repair and condition the parking areas and other
common areas of the Building, including, but not limited to driveways, alleys,
landscape and grounds surrounding the Premises. Subject to Landlord's
obligation in Paragraph 10 and subject to Paragraphs 9 and 15, Tenant, at its
expense, shall repair, replace and maintain in good condition all portions of
the Premises and all areas, improvements and systems exclusively serving the
Premises including, without limitation, dock and loading areas, truck doors,
plumbing, water and sewer lines up to points of common connection, fire
sprinklers and fire protection systems, entries, doors, ceilings and roof
membrane, windows, interior walls, and the interior side of demising walls, and
heating, ventilation and air conditioning systems. In this regard, Landlord
agrees to assign to Tenant or otherwise make available to Tenant all
construction guaranties and warranties issued in favor of Landlord relative to
any Building components or systems which are maintained by Tenant under the
terms hereof. Heating, ventilation and air conditioning systems and other
mechanical and building systems serving the Premises shall be maintained at
Tenant's expense pursuant to maintenance service contracts entered into by
Tenant or, at Landlord's election, by Landlord. The scope of services and
contractors under such maintenance contracts shall be reasonably approved by
Landlord. At Landlord's request, Tenant shall enter into a joint maintenance
agreement with any railroad that services the Premises. If Tenant fails to
perform any repair or replacement for which it is responsible, Landlord may
perform such work and be reimbursed by Tenant within ten (10) days after demand
therefor. Subject to Paragraphs 9 and 15, Tenant shall bear the full cost of
any repair or replacement to any part of the Building or Project that results
from damage caused by Tenant, its agents, contractors, or invitees and any
repair that benefits only the Premises. Landlord shall bear the full cost of
repair or replacement to any part of the Building that results from damage
caused by Landlord, its agents, contractors or invitees due to negligence of
Landlord.
12. Tenant-Made Alterations and Trade Fixtures. Any alterations, additions,
or improvements made by or on behalf of Tenant to the Premises ("Tenant-Made
Alterations") shall be subject to Landlord's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. In this
regard, Landlord acknowledges that, from time to time, Tenant shall likely be
requesting Landlord's consent to various alterations required in order to ensure
compliance with federal Food and Drug Administration ("FDA") requirements.
Tenant shall cause, at its expense, all Tenant-Made Alterations to comply with
insurance requirements and with Legal Requirements and shall construct at its
expense any alteration or modification required by Legal Requirements as a
result of any Tenant-Made Alterations. All Tenant-Made Alterations shall be
constructed in a good and workmanlike manner by contractors reasonably
acceptable to Landlord and only good grades of materials shall be used. All
plans and specifications for any Tenant-Made Alterations shall be submitted to
Landlord for its approval. Landlord may monitor construction of the Tenant-Made
Alterations. Tenant shall reimburse Landlord for its reasonable costs in
reviewing plans and specifications. Landlord's right to review plans and
specifications and to monitor construction shall be solely for its own benefit,
and Landlord shall have no duty to see that such plans and specifications or
construction comply with applicable laws, codes, rules and regulations. Tenant
shall provide Landlord with the identities and mailing addresses of all persons
performing work or supplying materials, prior to beginning such construction,
and Landlord may post on and about the Premises notices of non-responsibility
pursuant to applicable law. Tenant shall provide certificates of insurance for
worker's compensation and other coverage in amounts and from an insurance
company satisfactory to Landlord protecting Landlord against liability for
personal injury or property damage during construction. Upon completion of any
Tenant-Made Alterations, Tenant shall deliver to Landlord sworn statements
setting forth the names of all contractors and subcontractors who did work on
the Tenant-Made Alterations and final lien waivers from all such contractors and
subcontractors. Upon surrender of the Premises, all Tenant-Made Alterations and
any leasehold improvements constructed by Landlord or Tenant shall remain on the
Premises as Landlord's property, except to the extent Landlord requires removal
at Tenant's expense of any such items or Landlord and Tenant have otherwise
agreed in writing in connection with Landlord's consent to any Tenant-Made
Alterations. Tenant shall repair any damage caused by such removal.
Tenant, at its own cost and expense and without Landlord's prior approval, may
erect such shelves, bins, laboratory and manufacturing equipment, machinery and
trade fixtures (collectively "Trade Fixtures") in the ordinary course of its
business provided that such items do not alter the basic character of the
Premises, do not overload or damage the Premises, and may be removed without
injury to the Premises, and the construction, erection, and installation thereof
complies with all Legal Requirements and with Landlord's requirements set forth
above. Upon the expiration or earlier termination of the Lease Term, Tenant
shall remove its Trade Fixtures and shall repair any damage caused by such
removal.
13. Signs. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent, which
consent shall not be unreasonably withheld or delayed. In this regard, Landlord
acknowledges that Tenant shall be permitted to place its identification signage
panel on the monument sign for the Building and, subject to Landlord's approval
of such signage (not to be unreasonably withheld or delayed) and compliance of
such signage with all applicable governmental requirements, shall be permitted
to place certain signage on the exterior of the Building. Upon surrender or
vacation of the
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Premises, Tenant shall have removed all signs and repair, paint, and/or replace
the building facia surface to which its signs are attached. Tenant shall obtain
all applicable governmental permits and approvals for sign and exterior
treatments. All signs, decorations, advertising media, blinds, draperies and
other window treatment or bars or other security installations visible from
outside the Premises shall be subject to Landlord's approval and conform in all
respects to Landlord's requirements.
14. Parking. Tenant shall be entitled to park in common with other tenants
of the Project in those areas designated for nonreserved parking. Landlord may
allocate parking spaces among Tenant and other tenants in the Project if
Landlord determines that such parking facilities are becoming crowded. Landlord
shall not be responsible for enforcing Tenant's parking rights against any third
parties. In the event Tenant notifies Landlord during the Lease Term that
Tenant has a need for additional parking, Landlord will negotiate with Tenant
regarding the construction, in return for Tenant's agreement to a Base Rent
increase or other economic consideration satisfactory to Landlord, of additional
parking areas for Tenant's use in the area identified as "Proposed Future
Parking" on Exhibit E attached hereto and incorporated herein by reference.
15. Restoration. If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within sixty
(60) days after such damage as to the amount of time Landlord reasonably
estimates it will take to restore the Premises. If the restoration time is
estimated to exceed six (6) months, either Landlord or Tenant may elect to
terminate this Lease upon notice to the other party given no later than thirty
(30) days after Landlord's notice. If neither party elects to terminate this
Lease or if Landlord estimates that restoration will take six (6) months or
less, then, subject to receipt of sufficient insurance proceeds, Landlord shall
promptly restore the Premises excluding the improvements installed by Tenant or
by Landlord and paid by Tenant, subject to delays arising from the collection of
insurance proceeds or from Force Majeure events. Tenant at Tenant's expense,
except if same is necessitated by Landlord's acts or omissions, shall promptly
perform, subject to delays arising from the collection of insurance proceeds, or
from Force Majeure events, all repairs or restoration not required to be done by
Landlord and shall promptly re-enter the Premises and commence doing business in
accordance with this Lease. Notwithstanding the foregoing, either party may
terminate this Lease if the Premises are damaged during the last year of the
Lease Term and Landlord reasonably estimates that it will take more than one
month to repair such damage. Tenant shall pay to Landlord with respect to any
damage to the Premises the pro-rata amount of the commercially reasonable
deductible under Landlord's insurance policy (currently $10,000) within ten (10)
days after presentment of Landlord's invoice. If the damage involves the
premises of other tenants, Tenant shall pay the portion of the deductible that
the cost of the restoration of the Premises bears to the total cost of
restoration, as determined by Landlord. Base Rent and Operating Expenses shall
be abated for the period of repair and restoration in the proportion which the
area of the Premises, if any, which is not usable by Tenant bears to the total
area of the Premises. Such abatement shall be the sole remedy of Tenant, and
except as provided herein, Tenant waives any right to terminate the Lease by
reason of damage or casualty loss.
16. Condemnation. If any part of the Premises or the Project should be taken
for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking, in Tenant's reasonable
judgment, would prevent or materially interfere with Tenant's use of the
Premises or in Landlord's judgment would materially interfere with or impair its
ownership or operation of the Project, then upon written notice by Landlord or
Tenant (as the case may be) this Lease shall terminate and Base Rent shall be
apportioned as of said date. If part of the Premises shall be Taken, and this
Lease is not terminated as provided above, the Base Rent payable hereunder
during the unexpired Lease Term shall be reduced to such extent as may be fair
and reasonable under the circumstances. In the event of any such Taking,
Landlord shall be entitled to receive the entire price or award from any such
Taking without any payment to Tenant, and Tenant hereby assigns to Landlord
Tenant's interest, if any, in such award. Tenant shall have the right, to the
extent that same shall not diminish Landlord's award, to make a separate claim
against the condemning authority (but not Landlord) for such compensation as may
be separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.
17. Assignment and Subletting. Without Landlord's prior written consent,
which consent shall not be unreasonably withheld, conditioned or delayed, Tenant
shall not assign this Lease or sublease the Premises or any part thereof or
mortgage, pledge, or hypothecate its leasehold interest or grant any concession
or license within the Premises and any attempt to do any of the foregoing shall
be void and of no effect. For purposes of this paragraph, a transfer of the
ownership interests controlling Tenant shall be deemed an assignment of this
Lease unless Tenant's ownership interests are publicly traded. Notwithstanding
the above, Tenant may assign or sublet the Premises, or any part thereof,
without the prior written consent of Landlord, (i) to any entity controlling
Tenant, controlled by Tenant or under common control with Tenant (a "Tenant
Affiliate"), or (ii) provided that the relevant assignee or subtenant has a net
worth on the effective date of such assignment or sublease which is equal to or
greater than the net worth of Tenant on the date immediately preceding the
effective date of the proposed assignment or sublease, in connection with a
merger or consolidation involving Tenant or in connection with a sale of all or
substantially all of Tenant's assets. Tenant shall reimburse Landlord for all
of Landlord's reasonable out-of-pocket expenses in connection with any
assignment or sublease.
6
Notwithstanding any assignment or subletting, Tenant and any guarantor or
surety of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent and for compliance with all
of Tenant's other obligations under this Lease (regardless of whether Landlord's
approval has been obtained for any such assignments or sublettings). In the
event that the rent due and payable by a sublessee or assignee (or a combination
of the rental payable under such sublease or assignment plus any bonus or other
consideration therefor or incident thereto) exceeds the rental payable under
this Lease, then Tenant shall be bound and obligated to pay Landlord as
additional rent hereunder fifty percent (50%) of all such excess rental and
other excess consideration within ten (10) days following receipt thereof by
Tenant.
If this Lease be assigned or if the Premises be subleased (whether in whole or
in part) or in the event of the mortgage, pledge, or hypothecation of Tenant's
leasehold interest or grant of any concession or license within the Premises or
if the Premises be occupied in whole or in part by anyone other than Tenant,
then upon a default by Tenant hereunder Landlord may collect rent from the
assignee, sublessee, mortgagee, pledgee, party to whom the leasehold interest
was hypothecated, concessionee or licensee or other occupant and, except to the
extent set forth in the preceding paragraph, apply the amount collected to the
next rent payable hereunder; and all such rentals collected by Tenant shall be
held in trust for Landlord and immediately forwarded to Landlord. No such
transaction or collection of rent or application thereof by Landlord, however,
shall be deemed a waiver of these provisions or a release of Tenant from the
further performance by Tenant of its covenants, duties, or obligations
hereunder.
18. Indemnification. Subject to the provisions of Paragraph 9 hereof, and
except for the negligence or willful misconduct of Landlord, its agents,
employees or contractors, and to the extent permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord's agents, employees
and contractors, from and against any and all losses, liabilities, damages,
costs and expenses (including attorneys' fees) resulting from claims by third
parties for injuries to any person and damage to or theft or misappropriation or
loss of property occurring in or about the Project and arising from the use and
occupancy of the Premises or from any activity, work, or thing done, permitted
or suffered by Tenant in or about the Premises or due to any other act or
omission of Tenant, its subtenants, assignees, invitees, employees, contractors
and agents.
Subject to the provisions of Paragraph 9 hereof, Landlord covenants and
agrees to indemnify and save Tenant, its employees and agents harmless of and
from any and all claims, costs, expenses and liabilities, including, without
limitation, attorneys' fees, arising on account of or by reason of claims by
third parties for injuries or death to persons or damages to property resulting
from the negligence or willful misconduct of Landlord or its agents, employees,
or contractors, to the extent not attributable to any negligence of Tenant, any
assignee or subtenant of Tenant, or their respective employees, agents, or
contractors.
The furnishing of insurance required hereunder shall not be deemed to
limit either party's obligations under of this Paragraph 18, except as expressly
provided in Paragraph 9 hereof.
If a claim under either of the foregoing indemnities is made against an
indemnitee which the indemnitee believes to be covered by an indemnitor's
indemnification obligations hereunder, the indemnitee shall promptly notify the
indemnitor of the claim and, in such notice shall offer to the indemnitor the
opportunity to assume the defense of the claim within 10 business days after
receipt of the notice (with counsel reasonably acceptable to the indemnitee).
If the indemnitor timely elects to assume the defense of the claim, the
indemnitor shall have the right to settle the claim on any terms it considers
reasonable and without the indemnitee's prior written consent, as long as the
settlement shall not require the indemnitee to render any performance or pay any
consideration, and the indemnitee shall not have the right to settle any such
claim. If the indemnitor fails timely to elect to assume the defense of the
claim or fails to defend the claim with diligence, then the indemnitee shall
have the right to take over the defense of the claim and to settle the claim on
any terms the indemnitee considers reasonable. Any such settlement shall be
valid as against the indemnitor. If the indemnitor assumes the defense of a
claim, the indemnitee may employ its own counsel but such employment shall be at
the sole expense of the indemnitee. If any such claim arises out of the
negligence of both Landlord and Tenant, responsibility for such claim shall be
allocated between Landlord and Tenant based on their respective degrees of
negligence. This indemnity does not cover claims arising from the presence or
release of Hazardous Materials, which are separately addressed in Paragraph 30
hereof.
19. Inspection and Access. Subject to any reasonable limitations on such
access rights as may be imposed under FDA regulations from time to time (which
limitations shall be described to Landlord in a written notice from Tenant),
Landlord and its agents, representatives, and contractors may enter the Premises
at any reasonable time to inspect the Premises and to make such repairs as may
be required or permitted pursuant to this Lease and for any other business
purpose. Landlord and Landlord's representatives may enter the Premises during
business hours for the purpose of showing the Premises to prospective purchasers
and, during the last year of the Lease Term, to prospective tenants. Landlord
may erect a suitable sign on the Premises stating the Building or Project is
available for sale. Landlord may grant easements, make public dedications,
designate common areas and create restrictions on or about the Premises,
provided that no such easement, dedication,
7
designation or restriction materially interferes with Tenant's use or occupancy
of the Premises. At Landlord's request, Tenant shall execute such instruments as
may be necessary for such easements, dedications or restrictions.
20. Quiet Enjoyment. If Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or under
Landlord.
21. Surrender. Upon termination of the Lease Term or earlier termination of
Tenant's right of possession, Tenant shall surrender the Premises to Landlord in
the same condition as received, broom clean, ordinary wear and tear and casualty
loss and condemnation covered by Paragraphs 15 and 16 excepted. Any Trade
Fixtures, Tenant-Made Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored,
removed, and disposed of by Landlord at Tenant's expense, and Tenant waives all
claims against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and obligations concerning the
condition and repair of the Premises.
22. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal to double the
Base Rent in effect on the termination date, computed on a monthly basis for
each month or part thereof during such holding over (provided, however, relative
to the initial thirty (30) days of the holdover period, Base Rent shall be only
150% of the monthly Base Rent in effect on the termination date). All other
payments shall continue under the terms of this Lease. In addition, Tenant
shall be liable for all damages incurred by Landlord as a result of such holding
over. No holding over by Tenant, whether with or without consent of Landlord,
shall operate to extend this Lease except as otherwise expressly provided, and
this Paragraph 22 shall not be construed as consent for Tenant to retain
possession of the Premises.
23. Events of Default. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or any other
payment required herein when due, and such failure shall continue for a period
of five (5) business days from the date such payment was due (provided,
however, relative only to the first two (2) such payment delinquencies in any
twelve (12) month period, an Event of Default shall not have occurred unless
Tenant fails to pay the delinquent amount within five (5) business days of
receipt of notice of such delinquency from Landlord).
(ii) Tenant or any guarantor or surety of Tenant's obligations hereunder
shall (A) make a general assignment for the benefit of creditors; (B) commence
any case, proceeding or other action seeking to have an order for relief
entered on its behalf as a debtor or to adjudicate it a bankrupt or insolvent,
or seeking reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or its debts or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or of any
substantial part of its property (collectively a "proceeding for relief"); (C)
become the subject of any proceeding for relief which is not dismissed within
sixty (60) days of its filing or entry; or (D) die or suffer a legal
disability (if Tenant, guarantor, or surety is an individual) or be dissolved
or otherwise fail to maintain its legal existence (if Tenant, guarantor or
surety is a corporation, partnership or other entity).
(iii) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or shall be reduced or
materially changed, except, in each case, as permitted in this Lease, and such
default shall continue for a period of five (5) business days after Landlord
shall have given Tenant written notice of such default.
(iv) Tenant shall not occupy or shall vacate the Premises or shall fail
to continuously operate its business at the Premises for the permitted use set
forth herein for a period of fifteen (15) consecutive business days, whether
or not Tenant is in monetary or other default under this Lease.
(v) Tenant shall fail to discharge any lien placed upon the Premises in
violation of this Lease within 30 days after any such lien or encumbrance is
filed against the Premises.
(vi) Tenant shall fail to comply with any provision of this Lease other
than those specifically referred to in this Paragraph 23, and except as
otherwise expressly provided herein, such default shall continue for more than
thirty (30)
8
days after Landlord shall have given Tenant written notice of such default, or
such longer period as may be reasonably required to cure such default,
provided that Tenant commences to cure such default within such thirty (30)
day period and diligently prosecutes such cure to completion.
24. Landlord's Remedies. Upon each occurrence of an Event of Default and so
long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: terminate this Lease or Tenant's right of possession
(but Tenant shall remain liable as hereinafter provided) and/or pursue any other
remedies at law or in equity. Upon the termination of this Lease or termination
of Tenant's right of possession, it shall be lawful for Landlord, without formal
demand or notice of any kind, to re-enter the Premises by summary dispossession
proceedings or any other action or proceeding authorized by law and to remove
Tenant and all persons and property therefrom. If Landlord re-enters the
Premises, Landlord shall have the right to keep in place and use, or remove and
store, all of the furniture, fixtures and equipment at the Premises.
If Landlord terminates this Lease, Landlord may recover from Tenant the sum of
all Base Rent and all other amounts accrued hereunder to the date of such
termination; the reasonable cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing commissions
incurred by Landlord, and costs of removing and storing Tenant's or any other
occupant's property, repairing, altering, remodeling, or otherwise putting the
Premises into condition acceptable to a new tenant or tenants, and all
reasonable expenses incurred by Landlord in pursuing its remedies, including
reasonable attorneys' fees and court costs; and the excess of the then present
value of the Base Rent and other amounts payable by Tenant under this Lease as
would otherwise have been required to be paid by Tenant to Landlord during the
period following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to
the 90-day U.S. Treasury ▇▇▇▇ rate at the date of such termination.
If Landlord terminates Tenant's right of possession (but not this Lease),
Landlord shall use commercially reasonable efforts to relet the Premises for the
account of Tenant for such rent and upon such terms as shall be satisfactory to
Landlord without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant; provided, however, Tenant
acknowledges that Landlord shall not be obligated to attempt to relet the
Premises unless and until all other then-vacant space in the Building has been
leased. For the purpose of such reletting Landlord is authorized to make any
repairs, changes, alterations, or additions in or to the Premises as Landlord
deems reasonably necessary or desirable. If the Premises are not relet, then
Tenant shall pay to Landlord as damages a sum equal to the amount of the rental
reserved in this Lease for such period or periods, plus the cost of recovering
possession of the Premises (including attorneys' fees and costs of suit), the
unpaid Base Rent and other amounts accrued hereunder at the time of
repossession, and the costs incurred in any attempt by Landlord to relet the
Premises. If the Premises are relet and a sufficient sum shall not be realized
from such reletting [after first deducting therefrom, for retention by Landlord,
the unpaid Base Rent and other amounts accrued hereunder at the time of
reletting, the cost of recovering possession (including attorneys' fees and
costs of suit), all of the costs and expense of repairs, changes, alterations,
and additions, the reasonable expense of such reletting (including without
limitation brokerage fees and leasing commissions) and the reasonable cost of
collection of the rent accruing therefrom] to satisfy the rent provided for in
this Lease to be paid, then Tenant shall immediately satisfy and pay any such
deficiency. Any such payments due Landlord shall be made upon demand therefor
from time to time and Tenant agrees that Landlord may file suit to recover any
sums falling due from time to time. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect in writing to terminate
this Lease for such previous breach.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination
can be effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms "enter," "re-enter, " "entry" or "re-entry,' as used in this Lease,
are not restricted to their technical legal meanings. Any reletting of the
Premises shall be on such terms and conditions as Landlord in its sole
discretion may determine (including without limitation a term different than the
remaining Lease Term, rental concessions, alterations and repair of the
Premises, lease of less than the entire Premises to any tenant and leasing any
or all other portions of the
9
Project before reletting the Premises). Landlord shall not be liable, nor shall
Tenant's obligations hereunder be diminished because of, Landlord's failure to
relet the Premises or collect rent due in respect of such reletting.
25. Tenant's Remedies/Limitation of Liability. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its obligations
hereunder within thirty (30) days after written notice from Tenant specifying
such failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of thirty (30) days, then after such period
of time as is reasonably necessary); provided, however, Landlord shall use
commercially reasonable efforts to perform any of its obligations hereunder as
quickly as practicable if Landlord's failure to perform such obligations would
result in an emergency situation which could lead to significant bodily injury
or destruction of property within the Premises or which would cause Tenant to be
unable to operate critical manufacturing operations. All obligations of
Landlord hereunder shall be construed as covenants, not conditions; and, except
as may be otherwise expressly provided in this Lease, Tenant may not terminate
this Lease for breach of Landlord's obligations hereunder. If Landlord defaults
in the performance of its repair obligations pursuant to Paragraph 10 of the
Lease and does not cure such default within thirty (30) days after written
notice from Tenant specifying the default (or does not within said period
commence and diligently proceed and continue to cure such default within a
reasonable period of time), Tenant, without waiver of or prejudice to any other
right or remedy it may have, shall have the right, at any time thereafter, to
cure such default for Landlord's account, and Landlord shall reimburse Tenant
within thirty (30) days of receipt of invoice for any reasonable amount paid to
effect such cure and any expense or contractual liability so incurred, with
interest from the date of disbursement at the Default Rate. All obligations of
Landlord under this Lease will be binding upon Landlord only during the period
of its ownership of the Premises and not thereafter. The term "Landlord" in
this Lease shall mean only the owner, for the time being of the Premises, and in
the event of the transfer by such owner of its interest in the Premises, such
owner shall thereupon be released and discharged from all obligations of
Landlord thereafter accruing, but such obligations shall be binding during the
Lease Term upon each new owner for the duration of such owner's ownership. Any
liability of Landlord under this Lease shall be limited solely to its interest
in the Project (including the rents and profits therefrom), and in no event
shall any personal liability be asserted against Landlord in connection with
this Lease nor shall any recourse be had to any other property or assets of
Landlord.
26. [INTENTIONALLY DELETED]
27. Subordination. Subject to the terms and conditions of this Paragraph 27,
this Lease and Tenant's interest and rights hereunder are and shall be subject
and subordinate at all times to the lien of any first mortgage, now existing or
hereafter created on or against the Project or the Premises, and all amendments,
restatements, renewals, modifications, consolidations, refinancing, assignments
and extensions thereof, without the necessity of any further instrument or act
on the part of Tenant. Landlord shall use commercially reasonable efforts to
obtain a Subordination, Non-Disturbance and Attornment ("SNDA") agreement from
Landlord's current mortgagee (if any) in form and content reasonably
satisfactory to such mortgagee (if any), and Tenant agrees upon demand to
execute, acknowledge and deliver such agreement. With regard to any future
mortgagee acquiring a security interest in the Project or the Premises, Tenant's
interest and rights under this Lease shall not be subordinated to such
mortgagee's interest unless Landlord obtains an SNDA reasonably satisfactory to
Tenant from such mortgagee. In this regard, Tenant hereby acknowledges and
agrees that, for purposes of this Paragraph 27, any SNDA executed by Tenant and
Landlord's current mortgagee shall be deemed satisfactory to Tenant in all
respects relative to and for purposes of any SNDA requested by any such future
mortgagee. Tenant hereby irrevocably appoints Landlord attorney-in-fact for
Tenant (such power of attorney being coupled with an interest) to execute,
acknowledge and deliver any such SNDA requested by any such future mortgagee for
and in the name of the Tenant and to cause any such instrument to be recorded.
Notwithstanding the foregoing, any such holder of a mortgage may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust.
28. Mechanic's Liens. Tenant has no express or implied authority to create
or place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who may furnish materials or perform labor for any construction or
repairs. Tenant covenants and agrees that it will pay or cause to be paid all
sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises and
that it will save and hold Landlord harmless from all loss, cost or expense
based on or arising of asserted claims or liens against the leasehold estate or
against the interest of Landlord in the Premises or under this Lease. Tenant
shall give Landlord immediate written notice of the placing of any lien or
encumbrance against the Premises and cause such lien or encumbrance to be
discharged within thirty (30) days of the filing of recording thereof; provided,
however, Tenant may contest such liens or
10
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such thirty (30) day period.
29. Estoppel Certificates. Within ten (10) days after receipt of a written
request therefore by Landlord, Tenant, or any mortgagee of Landlord's interest
in the Premises, or in the event that upon any sale, assignment or hypothecation
of the Premises, or any part thereof or interest therein by Landlord, if an
estoppel certificate shall be required from Landlord or Tenant, Landlord or
Tenant (as the case may be) agrees to deliver, in recordable form, a certificate
to any mortgagee or proposed mortgagee or purchaser, or to Landlord or Tenant
(as the case may be), certifying to any matter requested which is true with
respect to the Lease, or the Premises, including that Tenant is in possession of
the Premises, has unconditionally accepted the same and is currently paying the
Base Rent reserved herein; that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the Lease is in full force and
effect as modified and stating the modifications); that there are no defaults by
Landlord or Tenant (as the case may be) therein, and no defenses or offsets
thereto, or stating those claimed by such party. Such certificate shall also
state the date to which the Base Rent and other charges hereunder have been paid
by Tenant. Failure of Landlord or Tenant to respond within said ten (10) day
period in addition to constituting a default hereunder, shall constitute an
acknowledgment that the matters set forth in such request and the proposed
certificate, if any, so submitted are true and accurate. Tenant shall also
cause each Guarantor of Tenant's obligations under this Lease, if any, to join
in such estoppel certificate.
The estoppel certificate to be obtained from Tenant shall specifically
include, to the extent true, the following:
"Tenant has not assigned its interest in the Lease or sublet any
portion of the Premises except as follows:
__________________________________________________________; Tenant has
received no notice of any prior sale, assignment or pledge of the Lease
or the rents thereunder; Tenant has no right or option to purchase the
Building or the Project including the right of first refusal; there are
no other agreements, written or oral, between Tenant and Landlord with
respect to the Lease; Tenant has no right or option to cancel the Lease
prior to its stated expiration date other than perhaps upon certain
defaults by Landlord under the Lease or in certain circumstances arising
from a casualty or condemnation; Tenant has no expansion rights with
respect to additional space in the Building except as may be specified in
the Lease and this estoppel; upon receipt of written notice from the
holder of a mortgage on the Property that Landlord is in default under
its loan, Tenant will pay all rent directly to the mortgagee; and any
such certificate may be relied upon by Landlord or any prospective
purchaser or present or prospective mortgagee of all or any portion of
the Property."
30. Environmental Requirements. Except for Hazardous Material contained in
products used by Tenant in de minimis quantities for ordinary cleaning and
office purposes and except for those materials set out on Exhibit F attached
hereto and incorporated herein by reference, Tenant shall not permit or cause
any party to bring any Hazardous Material upon the Premises or transport, store,
use, generate, manufacture or release any Hazardous Material in or about the
Premises without Landlord's prior written consent. Tenant, at its sole cost and
expense, shall operate its business in the Premises in strict compliance with
all Environmental Requirements and shall remediate, to the extent required and
in compliance with all Environmental Requirements, any Hazardous Materials
released on or from the Project by Tenant, its agents, employees, contractors,
subtenants or invitees. Tenant shall complete and certify to disclosure
statements as requested by Landlord from time to time relating to Tenant's
transportation, storage, use, generation, manufacture or release of Hazardous
Materials on the Premises. The term "Environmental Requirements" means all
applicable present and future statutes, regulations, ordinances, rules, codes,
judgments, orders or other similar enactments of any governmental authority or
agency regulating or relating to health, safety, or environmental conditions on,
under, or about the Premises or the environment, including without limitation,
the following: the Comprehensive Environmental Response, Compensation and
Liability Act; the Resource Conservation and Recovery Act; and all state and
local counterparts thereto, and any regulations or policies promulgated or
issued thereunder. The term "Hazardous Materials" means and includes any
substance, material, waste, pollutant, or contaminant listed or defined as
hazardous or toxic, under any Environmental Requirements, asbestos and
petroleum, including crude oil or any fraction thereof, natural gas liquids,
liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural
gas and such synthetic gas). As defined in Environmental Requirements, Tenant
is and shall be deemed to be the "operator" of Tenant's "facility" and the
"owner" of all Hazardous Materials brought on the Premises by Tenant, its
agents, employees, contractors or invitees, and the wastes, by-products, or
residues generated, resulting, or produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless from and against
any and all losses (including, without limitation, diminution in value of the
Premises or the Project and loss of rental income from the Project), claims,
demands, actions, suits, damages (including, without limitation, punitive
damages), expenses (including, without limitation, remediation, removal, repair,
corrective action, or cleanup expenses), and costs (including, without
limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
30, regardless of whether such removal or management is
11
required by law) which are brought or recoverable against, or suffered or
incurred by Landlord as a result of any release of Hazardous Materials for which
Tenant is obligated to remediate as provided above or any other breach of the
requirements under this Paragraph 30 by Tenant, its agents, employees,
contractors, subtenants, assignees or invitees, regardless of whether Tenant had
knowledge of such noncompliance. The obligations of Tenant under this Paragraph
30 shall survive any termination of this Lease. Landlord represents and warrants
that as of the date hereof, to the best of Landlord's knowledge, no violation of
Environmental Requirements has occurred in or about the Premises.
Landlord shall have access to, and a right to perform inspections and tests
of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations.
Such inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.
31. Rules and Regulations. Tenant shall, at all times during the Lease Term
and any extension thereof, comply with all reasonable rules and regulations at
any time or from time to time established by Landlord covering use of the
Premises and the Project. The current rules and regulations are attached
hereto. In the event of any conflict between said rules and regulations and
other provisions of this Lease, the other terms and provisions of this Lease
shall control. Landlord shall not have any liability or obligation for the
breach of any rules or regulations by other tenants in the Project.
32. Security Service. Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33. Force Majeure. Landlord shall not be held responsible for delays in the
performance of its obligations hereunder when caused by strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefor, governmental restrictions, governmental regulations,
governmental controls, delay in issuance of permits, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of Landlord ("Force Majeure").
34. Entire Agreement. This Lease constitutes the complete agreement of
Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.
35. Severability. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby. It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.
36. Brokers. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease (which broker's
commission shall be payable by Landlord), and Tenant agrees to indemnify and
hold Landlord harmless from and against any claims by any other broker, agent or
other person claiming a commission or other form of compensation by virtue of
having dealt with Tenant with regard to this leasing transaction.
37. Miscellaneous.
(a) Any payments or charges due from Tenant to Landlord hereunder shall
be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.
12
(c) All notices required or permitted to be given under this Lease
shall be in writing and shall be sent by registered or certified mail, return
receipt requested, or by a reputable national overnight courier service,
postage prepaid, or by hand delivery addressed to the parties at their
addresses below, and with a copy sent to Landlord at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Either party may by notice given
aforesaid change its address for all subsequent notices. Except where
otherwise expressly provided to the contrary, notice shall be deemed given
upon delivery.
(d) Except as otherwise expressly provided in this Lease or as
otherwise required by law, Landlord retains the absolute right to withhold any
consent or approval.
(e) At Landlord's request from time to time (provided, however,
Landlord shall not be entitled to make such request more than one (1) time
during any twelve (12) month period during the Lease Term), Tenant shall
furnish Landlord with true and complete copies of its most recent annual and
quarterly financial statements prepared by Tenant or Tenant's accountants and
any other financial information or summaries that Tenant typically provides to
its lenders or shareholders.
(f) The Lease shall not be filed by or on behalf of Tenant in any
public record. Either Landlord or Tenant shall be entitled to prepare and file
(at its own cost and expense) a memorandum of this lease in form and content
reasonably satisfactory to both parties.
(g) The normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party
until execution of this Lease by both parties.
(i) Words of any gender used in this Lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
(j) Any amount not paid by Tenant within 10 days after its due date in
accordance with the terms of this Lease shall bear interest from such due date
until paid in full at the lesser of the highest rate permitted by applicable
law or twelve (12) percent per year. It is expressly the intent of Landlord
and Tenant at all times to comply with applicable law governing the maximum
rate or amount of any interest payable on or in connection with this Lease. If
applicable law is ever judicially interpreted so as to render usurious any
interest called for under this Lease, or contracted for, charged, taken,
reserved, or received with respect to this Lease, then it is Landlord's and
Tenant's express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be governed by
the laws of the state in which the Project is located, excluding any
principles of conflicts of laws.
(l) Time is of the essence as to the performance of Tenant's
obligations under this Lease.
(m) All exhibits and addenda attached hereto are hereby incorporated
into this Lease and made a part hereof. In the event of any conflict between
such exhibits or addenda and the terms of this Lease, such exhibits or addenda
shall control.
(n) Landlord hereby confirms that Landlord's insurance policy premium
shall not increase because of the use of the Premises for the storage of rugs
and carpets. Tenant's vacation or abandonment of the Premises shall not be a
breach or default by Tenant hereunder, as long as Tenant agrees to pay
increases in Landlord's insurance occasioned thereby, continues to service all
of the systems servicing the Premises and continues to comply with all other
terms of the Lease.
(o) Landlord warrants and represents that as of the commencement date,
the fire protection/sprinkler system serving the Premises shall be in good
condition and repair and in compliance with all applicable codes, laws and
other governmental requirements.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.
13
TENANT: LANDLORD:
PHARMANETICS, INC., GLOBE CENTER REALTY FIVE, LLC, a
a North Carolina corporation Delaware limited liability company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer ---------------------------------------
Title: President
--------------------------------------
14
ADDENDUM ONE
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000 BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
SECTION I - BASE MONTHLY RENTAL SCHEDULE
----------------------------
Months 1 through 12 $25,005.92 per month
Months 13 through 24 $25,756.09 per month
Months 25 through 36 $26,528.78 per month
Months 37 through 48 $27,324.64 per month
Months 49 through 60 $28,144.38 per month
Months 61 through 72 $28,988.71 per month
Months 73 through 84 $29,858.37 per month
Months 85 through 96 $30,754.12 per month
Months 97 through 108 $31,676.75 per month
Months 109 through 120 $32,627.05 per month
SECTION II - CONSTRUCTION
------------
(a) Landlord agrees to furnish or perform prior to the Commencement Date those
items of construction and those improvements, including, but not limited to, all
associated architectural, engineering, permitting and construction management
(the "Tenant Improvements"), which are shown as being Landlord's responsibility
on the final construction drawings and specifications for the Premises
(collectively, the "Final Tenant Plans"). The Final Tenant Plans shall be
prepared by Landlord based on Tenant's initial layout plans for the Premises
which are attached hereto as Exhibit B and incorporated herein by reference and
shall be delivered to Tenant for its review and approval (which approval shall
not be unreasonably withheld). Tenant, acting reasonably and in good faith,
shall have ten (10) days from Landlord's delivery of the Final Tenant Plans to
advise Landlord, in writing, as to whether or not Tenant desires any changes to
the Final Tenant Plans. If Tenant fails to respond during such ten (10) day
period, Tenant shall automatically be deemed to have approved the Final Tenant
Plans. If Landlord and Tenant cannot mutually agree, in good faith, upon the
Final Tenant Plans on or before the date which is twenty (20) days after the
date that Landlord initially delivers the Final Tenant Plans to Tenant, Landlord
shall have the option, exercisable in its sole discretion, to terminate the
Lease.
Landlord shall pay for the aggregate costs of or related to the Tenant
Improvements up to a maximum amount of $297,100 ("Tenant Improvement
Allowance"), and Tenant shall pay for such aggregate costs of the Tenant
Improvements in excess of such amount (the "Excess Costs"). Prior to the
commencement of construction of the Tenant Improvements, Landlord shall submit
to Tenant a written estimate of the cost to complete the Tenant Improvements,
which written estimate will be based upon the Final Tenant Plans, taking into
account any modifications which may be required to the Final Tenant Plans by the
appropriate governmental authorities in connection with the issuance of a
building permit (the "Work Cost Estimate"). Tenant will not have an approval
right relative to the Work Cost Estimate, but shall have the right, during the
seven (7) day period immediately following Tenant's receipt of the Work Cost
Estimate, to comment on the Work Cost Estimate or any components thereof. After
the passage of such seven (7) day period, Landlord will have the right to
commence construction of the Tenant Improvements. If the cost of the Tenant
Improvements is estimated to exceed the Tenant Improvement Allowance, such
estimated Excess Costs overage shall be paid by Tenant before Landlord begins
construction and a final adjusting payment based upon the actual costs of the
Tenant Improvements shall be made when the Tenant Improvements are complete. If
the cost of such Tenant Improvements is less than the Tenant Improvement
Allowance, Landlord shall make such remaining amounts available to Tenant for
additional improvements Tenant may require for the operation and set up of its
warehousing operation.
Notwithstanding the foregoing provisions of this paragraph (a) to the
contrary, in the event there are any Excess Costs, Tenant shall be entitled to
amortize such Excess Costs, up to a maximum amount of $2,000,000, into the Base
Rent due hereunder, in which case the Base Rent payable by Tenant hereunder
shall be increased to include an amortization of such Excess Costs over the
initial Lease Term. The monthly amounts payable pursuant to such amortization,
and the then-current effective interest rate for such amortization, shall be as
set forth in notices provided to Tenant by Landlord from time to time.
15
The parties agree that the effective interest rate for such amortization shall
be adjusted from time to time throughout the initial Lease Term to reflect a per
annum interest rate equal to Landlord's average cost of funds during such
initial Lease Term.
(b) Landlord shall commence and proceed diligently with and complete the
construction of the Tenant Improvements in a good and workmanlike manner in
conformance with the Final Tenant Plans. As soon as such improvements have been
Substantially Completed, Landlord shall notify Tenant in writing of the date
that the Tenant Improvements were Substantially Completed. In addition,
Landlord shall use good faith, diligent efforts to notify Tenant, in writing, at
least 10 days prior to the date Landlord anticipates that the Premises shall be
Substantially Completed. The Tenant Improvements shall be deemed substantially
completed ("Substantially Completed") when, (i) in the reasonable opinion of the
construction manager (whether an employee or agent of Landlord or a third party
construction manager), the Premises have been substantially completed except for
punch list items which do not prevent in any material way the use of the
Premises for the Tenant's contemplated use thereof, (ii) a certificate of
occupancy (or a temporary certificate of occupancy) is issued for the Premises
allowing for the legal occupancy of the Premises by Tenant (provided, however,
such certificate of occupancy shall not be required as a condition to
Substantial Completion in circumstances where certain improvements or personalty
to be installed by Tenant must be installed for the applicable governmental
authorities to issue a certificate of occupancy), and (iii) the Landlord has
delivered possession or has attempted to deliver possession of the Premises to
Tenant. Landlord agrees to assign to Tenant or otherwise make available to
Tenant all construction guaranties and warranties issued in favor of Landlord
relative to any and all components of the Tenant Improvements. After the
Commencement Date, Tenant shall, upon demand, execute and deliver to Landlord a
letter of acceptance of delivery of the Premises.
(c) The failure of Tenant to take possession of or to occupy the Premises
shall not serve to relieve Tenant of obligations arising on the Commencement
Date or delay the payment of rent by Tenant. Subject to applicable ordinances
and building codes governing Tenant's right to occupy or perform in the
Premises, and subject to the provisions of Paragraph 12 of the Lease, Tenant
shall be allowed to install its tenant improvements, machinery, equipment,
fixtures, or other property in the Premises during the final stages of
completion of construction (but in any event no later than 10 days prior to the
estimated date of Substantial Completion) provided that Tenant does not thereby
unreasonably interfere with the completion of construction or cause any labor
dispute as a result of such installations, and provided further that, subject to
Paragraph 9 of the Lease, Tenant does hereby agree to indemnify, defend, and
hold Landlord harmless from any loss or damage to such property, and all
liability, loss, or damage arising from any injury to the Project or the
property of Landlord, its contractors, subcontractors, or materialmen, and any
death or personal injury to any person or persons arising out of such
installations, except to the extent any such loss, damage, liability, death, or
personal injury was caused by Landlord's negligence. Any such occupancy or
performance in the Premises shall be in accordance with the provisions governing
Tenant-Made Alterations and Trade Fixtures in the Lease, and shall be subject to
Tenant providing to Landlord satisfactory evidence of insurance for personal
injury and property damage related to such installations and satisfactory
payment arrangements with respect to installations permitted hereunder. Delay
in putting Tenant in possession of the Premises shall not serve to extend the
term of this Lease or to make Landlord liable for any damages arising therefrom.
(d) Except for incomplete punch list items, and except as otherwise provided
in this Paragraph (d), Tenant, upon the Commencement Date, shall have and hold
the Premises as the same shall then be without any liability or obligation on
the part of Landlord for making any further alterations or improvements of any
kind in or about the Premises. Upon Substantial Completion of the Tenant
Improvements, Tenant and Landlord shall jointly conduct a walk-through ("Joint
Walk Through") of the Tenant Improvements and shall jointly prepare a punch list
("Punch List") of items needing additional work ("Punch List Items"); provided,
however, the Punch List shall be limited to items which are required by the
Final Tenant Plans, as amended by any approved change orders or other agreed
upon changes. Landlord shall thereafter diligently complete all Punch List
Items and in any event no later than 30 days after the date of Substantial
Completion. Landlord shall be responsible for repairing any latent defect in the
construction of the Tenant Improvements, provided (i) Tenant notifies Landlord
within thirty (30) days after Tenant first learns of the relevant defect and
(ii) Landlord receives such notice within one (1) year after the date that the
Tenant Improvements are Substantially Completed.
SECTION III - TWO RENEWAL OPTIONS
-------------------
(a) Provided that as of the time of the giving of the Extension Notice and the
Commencement Date of the Extension Term, (i) Tenant is the Tenant originally
named herein, (ii) Tenant actually occupies all of the Premises initially
demised under this Lease and any space added to the Premises, and (iii) no Event
of Default then exists or would exist but for the passage of time or the giving
of notice, or both; then Tenant shall have the one time right to extend the
initial Lease Term for two additional terms of five (5) years (such additional
term is hereinafter called the "Extension Term") commencing on the day following
the expiration of the initial Lease Term (hereinafter referred to as the
"Commencement Date of the Extension Term"). Tenant shall give Landlord written
notice (hereinafter called the "Extension Notice") of its election to extend the
term of the Lease Term at least six (6) months, but not more than twelve (12)
months, prior to the scheduled expiration date of the Lease Term.
16
(b) The Base Rent payable by Tenant to Landlord during the Extension Term
shall be the greater of (i) the Base Rent in effect during the last year of the
Lease Term, escalated by three percent (3%), with such Base Rent subject to
further annual escalation for each year after the initial year of the Extension
Term to the amount obtained by multiplying 1.03 by the Base Rent payable for the
prior year or (ii) the "Fair Market Base Rent" for the Extension Term. As used
herein, "Fair Market Base Rent" shall mean the monthly base rental amount per
rentable square foot of the Premises that a willing tenant would pay and a
willing landlord of comparable property in the relevant market area would accept
at arm's length for space in a comparable building or buildings, with comparable
tenant improvements and in a comparable location and for a comparable term, and
giving appropriate consideration to all other applicable market conditions and
factors. Such Fair Market Base Rent shall be determined as described below in
Paragraph (i) hereof.
(c) The determination of Base Rent does not reduce the Tenant's obligation to
pay or reimburse Landlord for Operating Expenses and other reimbursable items as
set forth in the Lease, and Tenant shall reimburse and pay Landlord as set forth
in the Lease with respect to such Operating Expenses and other items with
respect to the Premises during the Extension Term without regard to any cap (if
any) on such expenses set forth in the Lease.
(d) Except for the Base Rent as determined above, Tenant's occupancy of the
Premises during the Extension Term shall be on the same terms and conditions as
are in effect immediately prior to the expiration of the initial Lease Term;
provided, however, Tenant shall have no further right to any allowances, credits
or abatements or any options to terminate, contract, renew or extend the Lease.
(e) If Tenant does not give the Extension Notice within the period set forth
in Paragraph (a) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice.
(f) If the Lease is extended for the Extension Term, then Landlord shall
prepare and Tenant shall execute an amendment to the Lease confirming the
extension of the Lease Term and the other provisions applicable thereto (the
"Amendment").
(g) If Tenant exercises its right to extend the term of the Lease for the
Extension Term pursuant to this Addendum, the term "Lease Term" as used in the
Lease, shall be construed to include, when practicable, the Extension Term,
except as provided in (d) above.
(h) Landlord and Tenant shall have fifteen (15) days after Landlord receives
the Extension Notice from Tenant during which to agree on the Fair Market Base
Rent for the Extension Term. If Landlord and Tenant are unable to agree upon
the Fair Market Base Rent for the Extension Term within such fifteen (15) day
period, then within ten (10) days after the expiration of such fifteen (15) day
period, each party, by giving notice to the other party, shall appoint a
licensed commercial real estate broker with at least five (5) years of
experience dealing with premises comparable to the Premises in the city and
county where the Premises is located to determine the Fair Market Base Rent. If
the two (2) brokers so selected are unable to agree on the Fair Market Base Rent
for the Extension Term within fifteen (15) days of the expiration of the
foregoing ten (10) day period, such brokers shall select a third broker meeting
the qualifications stated above in this Paragraph (i) within five (5) days after
the expiration of the aforementioned fifteen (15) day period provided for the
two brokers to set the Fair Market Base Rent. The third broker, however
selected, shall be a person who has not previously acted in any capacity for
either party. Within ten (10) days after the selection of the third broker, a
majority of the brokers shall set the Fair Market Base Rent for the Extension
Term. If a majority of the brokers is unable to set the Fair Market Base Rent
within said ten (10) day period, the two (2) closest determinations of the
brokers shall be added together and divided by two (2). The resulting quotient
shall be the Fair Market Base Rent for the Extension Term. Each party shall be
responsible for the costs, charges and fees of the broker appointed by that
party plus one-half of the cost of the third broker.
SECTION IV - RIGHT OF FIRST REFUSAL
----------------------
(a) "Offered Space" shall mean that certain 51,128 square foot section of
-------------
space, or any portion thereof, within the Building immediately adjacent to the
Premises, and shown on Exhibit C attached hereto and incorporated herein by
reference.
(b) Provided that as of the date of the giving of Landlord's Notice, (x)
Tenant is the Tenant originally named herein or an affiliate or subsidiary
thereof, (y) Tenant actually occupies all of the Premises originally demised
under this Lease and any premises added to the Premises, and (z) no Event of
Default or event which but for the passage of time or the giving of notice, or
both, would constitute an Event of Default has occurred and is continuing, if at
any time during the Lease Term any lease for any portion of the Offered Space
shall expire (i.e., Tenant's rights under this Section IV shall not apply to
"first generation" leasing of any Offered Space) and if Landlord intends to
enter into a lease (the "Proposed Lease") for such Offered Space with anyone (a
"Proposed Tenant") other than the tenant then occupying such space (or its
affiliates), Tenant shall be entitled to lease
17
the Offered Space upon all the terms and conditions of the Proposed Lease (which
terms and conditions may be contained in a document other than a complete lease,
as provided below).
(c) Landlord shall provide Tenant with a written notice (hereinafter called
the "Offer Notice") designating the space being offered and shall specify the
terms for such Offered Space which shall be the same as those set forth in the
Proposed Lease. Tenant may accept the offer set forth in the Offer Notice by
delivering to Landlord an unconditional acceptance (hereinafter called "Tenant's
Notice") of such offer within 7 business days after delivery by Landlord of the
Offer Notice to Tenant. Time shall be of the essence with respect to the giving
of Tenant's Notice. If Tenant does not accept (or fails to timely accept) an
offer made by Landlord pursuant to the provisions of this Addendum with respect
to the Offered Space designated in the Offer Notice, Landlord shall be under no
further obligation with respect to such space by reason of this Addendum. In
order to send the Offer Notice, Landlord does not need to have negotiated a
complete lease with the Proposed Tenant but may merely have agreed upon the
material economic terms for the Proposed Lease, and Tenant must make its
decision with respect to the Offered Space as long as it has received a
description of such material economic terms.
(d) Tenant must accept all Offered Space offered by Landlord at any one time
if it desires to accept any of such Offered Space and may not exercise its right
with respect to only part of such space offered under an Offer Notice. In
addition, if Landlord desires to lease more than just the Offered Space to any
tenant, Landlord may offer to Tenant pursuant to the terms hereof all such space
which Landlord desires to lease, and Tenant must exercise its rights hereunder
with respect to all such space and may not insist on receiving an offer for just
the Offered Space.
(e) If Tenant at any time declines any Offered Space offered by Landlord,
Tenant shall be deemed to have irrevocably waived all further rights under this
Addendum, and Landlord shall be free to lease the Offered Space to the Proposed
Tenant or any other party whatsoever.
18
ADDENDUM TWO
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
Move-Out Conditions.
--------------------
Per Paragraph 21, Tenant is obligated to check and address prior to move-out of
the facility the following items. Landlord expects to receive the space in a
well maintained condition, with normal wear and tear of certain areas
acceptable. The following list is designed to assist you in the move-out
procedures but is not intended to be all inclusive.
1. All lighting is to be placed into good working order. This includes
replacement of bulbs, ballasts, and lenses as needed.
2. All truck doors and dock levelers should be serviced and placed in good
operating order. This would include the necessary replacement of any dented
truck door panels and adjustment of door tension to insure proper
operation. All door panels which are replaced need to be painted to match
the building standard.
3. All structural steel columns in the warehouse and office should be
inspected for damage. Repairs of this nature should be pre-approved by the
Landlord prior to implementation.
4. Heating/air conditioning systems should be placed in good working order,
including the necessary replacement of any parts to return the unit to a
well maintained condition. This includes warehouse heaters and exhaust fans
(if any). Upon move-out, Landlord will have an exit inspection performed by
a certified mechanical contractor to determine the condition.
5. All holes in the sheet rock walls should be repaired prior to move-out.
6. The carpets and vinyl tiles should be in a clean, stain free, condition and
should not have any holes or chips in them. Landlord will accept normal
wear on these items provided they appear to be in a maintained condition.
7. Facilities should be returned in a clean condition which would include
cleaning of the coffee bar, restroom areas, windows, and other portions of
the space.
8. The warehouse should be in clean condition with all inventory and racking
removed. There should be no protrusions of anchors from the warehouse floor
and all holes should be appropriately patched and forklift marks, oil and
other stains removed and the warehouse floor otherwise cleaned. If
machinery/equipment is removed, the electrical lines should be properly
terminated at the nearest junction box.
9. All exterior windows with cracks or breakage should be replaced.
10. The Tenant shall provide keys for all locks on the Premises, including
front doors, rear doors, and interior doors.
11. Items that have been added by the Tenant and affixed to the Building will
remain the property of Landlord, unless agreed otherwise. This would
include but is not limited to mini-blinds, air conditioners, electrical,
water heaters, cabinets, flooring, etc. Please note that if modifications
have been made to the space, such as the addition of office area, Landlord
retains the right to have the Tenant remove these at Tenant's expense.
12. All electrical systems should be left in a safe condition that conforms to
code. Bare wires and dangerous installations should be corrected prior to
move-out.
13. All plumbing fixtures should be in good condition and working order,
including the water heater. Faucets and toilets should not leak.
14. All dock bumpers must be left in place and well secured.
19
15. Tenant shall not be required under any provision of this Lease to place any
portion of the Premises in better condition in which same was delivered to
Tenant.
20
ADDENDUM THREE
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
LETTER OF CREDIT
----------------
(a) As security for the performance of its obligations under the Lease,
Tenant, within fifteen (15) business days after each party executes and delivers
this Lease (the "Lease Date"), shall deliver to Landlord an irrevocable,
unconditional, transferable, stand-by letter of credit issued in favor of
Landlord, as beneficiary, and issued for Tenant, as account party, to be renewed
annually during the term of the Lease (the "Letter of Credit"), in the amount of
$2,000,000 (the "Letter of Credit Amount"). Provided, however, (i) in the event
that (A) no monetary Event of Default by Tenant has occurred during the Lease
Term and (B) no non-monetary Event of Default has occurred and remains uncured,
the required Letter of Credit Amount may be reduced by an amount equal to the
reduction in principal which has occurred pursuant to the amortization of the
Excess Costs during the previous twelve month period, such reduction to be
effective as of each successive twelve (12) month anniversary of the
Commencement Date. In the event Tenant fails to deliver to Landlord, by the end
of the tenth (10th) business day after the Lease Date, the Letter of Credit
(which Letter of Credit shall comply fully with all terms and provisions of this
Addendum Three) in the Letter of Credit Amount, Landlord may, until such time as
such Letter of Credit is delivered to Landlord by Tenant, terminate the Lease by
giving written notice of such termination to Tenant. All costs and fees
incurred in connection with the issuance of the Letter of Credit shall be borne
entirely by Tenant. The Letter of Credit shall be issued by a federally-
chartered bank which is approved by Landlord (which approval shall not be
unreasonably withheld). Additionally, the Letter of Credit shall be in form and
content reasonably satisfactory to Landlord, shall (to the extent not
inconsistent with the requirements of this Addendum Three) be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, shall permit partial
draws and shall have an expiration date (the "Letter of Credit Expiration Date")
that is the last day of the twelfth month after the Commencement Date.
Thereafter, Tenant shall ensure that a substitute Letter of Credit in the then-
applicable Letter of Credit Amount and otherwise reasonably satisfactory to
Landlord is issued to Landlord, with the original of such substitute Letter of
Credit delivered to Landlord, not less than thirty (30) days prior to the
expiration date of the existing Letter of Credit. If Tenant is obligated to
deliver a substitute Letter of Credit to Landlord pursuant to the immediately
preceding sentence and Tenant fails to do so at least thirty (30) days prior to
the expiration date of the existing Letter of Credit, the notice and cure
periods afforded to Tenant pursuant to Paragraph 23 in the Lease or elsewhere in
the Lease shall not be applicable and such failure by Tenant shall entitle
Landlord to immediately draw upon the full outstanding amount of the Letter of
Credit and to hold the proceeds as a security deposit, subject to the provisions
of Paragraph 5, as modified by this Addendum Three. Additionally, Landlord
shall be entitled to draw upon the Letter of Credit to fund the performance of
any other obligation(s) of Tenant under the Lease if Tenant is in default in the
performance of such obligation(s) beyond the expiration of any applicable notice
and cure period pursuant to the Lease. The issuing bank shall be required (up
to the then-face amount of the Letter of Credit) to disburse amounts to Landlord
under the Letter of Credit based solely on the written statement of Landlord (i)
certifying that Tenant is in default in the performance of its obligation(s)
under the Lease beyond the expiration of any applicable notice and cure period
(if any) pursuant to the Lease and (ii) certifying the amount due to Landlord as
a result of such uncured default(s) (which shall be the amount payable, up to an
aggregate ceiling amount equal to the then-face amount of the Letter of Credit,
to Landlord under the Letter of Credit). If Landlord's interest in the Premises
is sold or otherwise transferred, Landlord shall have the right to transfer the
Letter of Credit to the new owner (and the Letter of Credit shall expressly
permit such transfers), and, upon the assumption by Landlord's successor of
Landlord's obligations under this Lease, Landlord shall thereupon be released
from all liability for the safekeeping and administration of the Letter of
Credit and Tenant shall thereafter look solely to such new owner for the
safekeeping and administration of the Letter of Credit. The terms hereof shall
apply to every transfer of the Letter of Credit.
(b) If Tenant shall provide Landlord with then-current and audited
financial statements and complete documentation of Tenant's financial condition
demonstrating to Landlord's reasonable satisfaction (i) that Tenant has a net
worth of at least $35,000,000 of which at least $15,000,000 is liquid (i.e.,
cash or cash equivalents); (ii) that Tenant has had at least $3,000,000 in total
operating net income (excluding, e.g., non-recurring income such as investment
income and income from asset sales) over the previous four quarters, and (iii)
that Tenant is not in default under any terms of any of its lines of credit,
loans, or other debt facilities or instruments, and if at such time there is no
uncured Event of Default by Tenant under the Lease, Landlord shall promptly
return the Letter of Credit to Tenant and Tenant shall have no further
obligation to provide a Letter of Credit to Landlord, unless, at any time
thereafter during the Lease term, Tenant's net worth falls below $35,000,000 or
Tenant's liquid net worth (i.e., cash or cash equivalents) falls below
$15,000,000. In such event, Tenant shall, within thirty (30) days of demand by
Landlord, deliver to Landlord a replacement irrevocable, unconditional,
transferable, stand-by letter of credit
21
(the "Replacement Letter of Credit") on the same terms as the Letter of Credit
and in the same amount as the Letter of Credit Amount which Tenant would have
been required to maintain pursuant to Paragraph (a) of this Addendum Three.
Landlord shall hold any such Replacement Letter of Credit on the same terms and
conditions as were applicable to the initial Letter of Credit provided by Tenant
(including, without limitation, the provisions of this Paragraph (b)).
22
EXHIBIT A
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
DESCRIPTION OF THE PREMISES
---------------------------
23
EXHIBIT C
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
RIGHT OF FIRST REFUSAL ("OFFERED SPACE")
----------------------------------------
24
EXHIBIT D
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
RULES AND REGULATIONS
---------------------
1. The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, of its agents, or used by them for any purpose other
than ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas
outside of its Premises, or on the roof of the Project, except that Tenant
shall be permitted to install a Hiwaymax antenna in a location to be
mutually agreed upon by Landlord and Tenant which is at or proximate to the
Premises, and except that, subject to Landlord's approval of the location
of same (not to be unreasonably withheld or delayed), Tenant may place
certain outdoor furniture in certain areas outside the Premises.
3. Except for seeing-eye dogs, no animals shall be allowed in the
offices, halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the making of
loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric
connections in the Premises, Landlord or its agent will direct the
electrician as to where and how the wires may be introduced; and, without
such direction, no boring or cutting of wires will be permitted. Any such
installation or connection shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or
boiler, or other mechanical apparatus in the Premises, except as
specifically approved in the Lease. The use of oil, gas or inflammable
liquids for heating, lighting or any other purpose is expressly prohibited.
Explosives or other articles deemed extra hazardous shall not be brought
into the Project. Notwithstanding the foregoing, subject to Landlord's
approval of the location of and plans related to same (not to be
unreasonably withheld or delayed), Tenant may place a nitrogen tank and up
to five gas generators in the area outside the Building.
7. Parking any type of recreational vehicles is specifically prohibited
on or about the Project. Except for the overnight parking of operative
vehicles, no vehicle of any type shall be stored in the parking areas at
any time. In the event that a vehicle is disabled, it shall be removed
within 48 hours. There shall be no "For Sale' or other advertising signs on
or about any parked vehicle. All vehicles shall be parked in the designated
parking areas in conformity with all signs and other markings. All parking
will be open parking, and no reserved parking, numbering or lettering of
individual spaces will be permitted except as specified by Landlord.
8. Tenant shall maintain the Premises free from rodents, insects and
other pests.
9. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in
violation of the Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by the janitors or any other employee or person.
11. Tenant shall give Landlord prompt notice of any defects in the water,
lawn sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus, or any other service equipment affecting the Premises.
12. Tenant shall not permit storage outside the Premises, including
without limitation, outside storage of trucks and other vehicles, or
dumping of waste or refuse or permit any harmful materials to be placed in
any drainage system or sanitary system in or about the Premises; provided,
however, subject to Landlord's approval of the location of same (not to be
unreasonably withheld or delayed), Tenant may place cooler trucks outside
the Building which provide additional storage capacity.
13. All moveable trash receptacles provided by the trash disposal firm
for the Premises must be kept in the trash enclosure areas, if any,
provided for that purpose.
14. No auction, public or private, will be permitted on the Premises or
the Project.
15 No awnings shall be placed over the windows in the Premises except
with the prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking
(except in connection with the operation of an employee cafeteria) or for
any immoral or illegal purposes or for any purpose other than that
specified in the Lease. No gaming devices shall be operated in the
Premises.
17. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the
needs of other
25
tenants, and shall not use more than such safe capacity. Landlord's consent
to the installation of electric equipment shall not relieve Tenant from the
obligation not to use more electricity than such safe capacity.
18. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage.
19. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.
20. Tenant may bring upon the Premises and Property such hazardous
substances as may be typically used for Tenant's permitted use or to
fulfill Tenant's obligations under this Lease, without being in default
hereunder, as long as said hazardous substances are used, stored and
transported in compliance with all applicable laws, and specific written
notice thereof is given to Landlord.
26
EXHIBIT E
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
PROPOSED FUTURE PARKING AREA
----------------------------
27
EXHIBIT F
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED JULY 27, 2000, BETWEEN
GLOBE CENTER REALTY FIVE, L.L.C.
and
PHARMANETICS, INC.
LIST OF PERMITTED HAZARDOUS MATERIALS
-------------------------------------
28
STATE OF NORTH CAROLINA :
FIRST LEASE AMENDMENT
COUNTY OF WAKE :
THIS FIRST LEASE AMENDMENT made and entered into this 25th day of September
2000 by and between GLOBE CENTER REALTY FIVE, L.L.C., a Delaware limited
liability company (hereinafter "Landlord"), and PHARMANETICS, INC., a North
Carolina corporation (hereinafter "Tenant").
WITNESSETH:
----------
WHEREAS, Globe Center Realty Five, L.L.C. and Tenant entered into that
certain Lease Agreement dated July 27, 2000 (the "Lease") wherein Globe Center
Realty Five leased to Tenant approximately 59,420 rentable square feet of space
(the "Premises") within that certain building known as Globe Center Five (the
"Building") at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, said
Premises being depicted on Exhibit A attached to said Lease, and
WHEREAS, both parties hereto desire to amend the Lease as set forth below,
THEREFORE, effective as of August 18, 2000, the Lease Terms are hereby
amended as follows:
1. The Building location as set forth in the Lease on Page 1, shall
hereafter be "Globe Center Five, 9401 Globe Center Drive, Morrisville, North
Carolina",
2. Under Addendum One, Section II, Page 12 of the Lease, the construction
provision provides for Landlord to amortize up to a maximum of $2,000,000 over
the Tenant Improvement Allowance of $297,100 into the Base Rent due. This
provision is hereby revised to provide that any costs for construction exceeding
the Tenant Improvement Allowance of $297,100 shall be paid for by the Tenant.
Landlord will submit invoice(s) to Tenant covering said costs of construction
overages and Tenant shall remit payment to Landlord for such invoice(s) within
ten (10) days of receipt thereof, provided however that in the event Tenant has
a lender providing funds for such upfit, Landlord will cooperate and make
reasonable efforts to comply with such lender's reasonable inspection and draw
requirements, if any.
3. The provisions of Addendum Three, "Letter of Credit" on Page 16 of the
Lease are
1
hereby deleted and no longer in effect.
NOW, THEREFORE, for and in consideration of the mutual covenants of the
Landlord and Tenant, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Landlord and Tenant hereby
contract and agree each with the other that, except as amended herein, all other
terms, conditions and provisions of the Lease, not otherwise inconsistent
herewith, shall be and remain in full force and effect. All defined terms from
the Lease used herein shall have the same meanings as used in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Lease
Amendment in duplicate originals, all as of the day and year first above
written.
LANDLORD:
GLOBE CENTER REALTY FIVE, L.L.C. a Delaware
limited liability company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
TENANT:
PHARMANETICS, INC., a North Carolina corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CFO
2
