STATE OF NORTH CAROLINA
This Agreement (“Agreement”) is made effective as of the 16 th day of January, 2001, by and between The GMH Independence Limited Partnership, a North Carolina limited partnership (“Lessor”), Aventis Pharmaceuticals Products Inc. (f/k/a Rhone-Poulenc Rorer Pharmaceuticals Inc.,) a Delaware corporation (“Lessee”), MERIX Bioscience, Inc., a Delaware corporation (“Sublessee”), and Rhone-Poulenc Rorer Inc., a Pennsylvania corporation (“Guarantor”);
WHEREAS, Lessor executed that certain Lease with Ex Vivo Therapies, a Delaware joint venture pursuant to Joint Venture Agreement dated as of June 3, 1993, originally by and among Rhone-Poulenc Rorer, Inc., a Pennsylvania corporation, Rorer Merger Corp., a Delaware corporation, Applied Immune Sciences, Inc., a Delaware corporation and Applied Immune Sciences Venture, Inc., a Delaware corporation (now Aventis Pharmaceuticals Products Inc.) (“Original Tenant”), dated as of June 14,1995 (the “Lease”) pertaining to approximately 20,000 square feet of space situated at 4233 Technology Drive, Durham, North Carolina (the “Premises”) which Premises are more particularly described in the Lease; and
WHEREAS, the Original Tenant assigned all of its rights, title and interest in and to Lessee by way of Assignment of Lease made effective as of the 5 th day of August, 1996 by and between Lessor, Original Tenant, Lessee and Guarantor; and
WHEREAS, the Lease along with the Assignment of Lease (which also modified the Lease) are hereinafter referred to as the “Lease”; and
WHEREAS, the Lease is guaranteed by Guarantor by Guaranty dated as of the 2 nd day of June, 1995 (the “Guaranty”); and
WHEREAS, Lessee desires to sublet the Premises to Sublessee pursuant to the terms of the Sublease Agreement dated January 16, 2001 by and between Lessee and Sublessee, a copy of which is attached hereto as Exhibit A (the “Sublease”), and Lessor is willing to consent to the same subject to the following terms and conditions; and
WHEREAS, Guarantor has agreed to consent to the Sublease and to confirm that it remains liable under the terms of the Sublease;
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Continued Obligations . Notwithstanding the sublease of the Premises from Lessee to Sublessee or Lessor’s consent thereto or Lessor’s acceptance of payments from Sublessee, Lessee and Guarantor shall remain liable to Lessor for all payments due Lessor under the Lease and for performance of all obligations by it to be performed under the Lease and the consent given herein below shall not be construed as relieving Lessee from obtaining the express written consent of Lessor to any further assignment or subletting or as releasing Lessee from any liability or obligation whatsoever under the Lease or as releasing Guarantor from any liability or obligation whatsoever under the Guaranty. It is expressly understood and agreed that no lease exists or is made hereby between Lessor and Sublessee and that all rights of Sublessee regarding the Premises or any portion thereof are derivative through Lessee and that if Lessee’s rights under the Lease shall for any reason terminate, so also shall Sublessee’s rights terminate.
2. Joint and Several Liability . Lessee and Sublessee each hereby agree for the benefit of Lessor that hereafter they shall each be jointly and severally liable to Lessor for the payment of all sums due to be paid Lessor under the Lease and for the performance of all obligations to be performed by Lessee under the Lease.
3. Notices . Henceforth any notice required or permitted to be given by Lessor to Lessee under the Lease shall be deemed to have been sufficiently given for all purposes when made by personal delivery, by overnight courier service or sent in the United States mail as certified or registered mail, return receipt requested, postage prepaid and addressed as follows:
Notice shall be deemed given when received by personal delivery or overnight courier or within three days after mailing if sent by certified or registered mail, return receipt requested.
4. Indemnity . Sublessee and Lessee shall jointly and severally indemnify and hold Lessor harmless from and against any and all claims arising out of (a) Sublessee’s use of the Premises or any part thereof, (b) any activity, work, or other thing done, permitted or suffered by Sublessee in or about the Premises or the Building, or any part thereof, (c) any breach or default by Sublessee in the performance of any of its obligations under the Sublease, or (d) any act, omission or negligence of Sublessee, or any officer, agent, employee, contractor, servant, invitee or guest of Sublessee; and in each case from and against any and all damages, losses, liabilities, lawsuits, costs and expenses (including reasonable attorneys’ fees at alt tribunal levels) arising in connection with any such claim or claims as described in (a) through (d) above, or any action brought thereon. If such action be brought against Lessor, Sublessee upon notice from Lessor shall defend the same through counsel selected by Sublessee’s insurer or other counsel, in each case acceptable to Lessor, in its reasonable discretion. All insurance required by Lessee under the Lease shall also be provided by Sublessee as provided in the Sublease.
5. Consent . Subject to the terms and conditions of this Agreement Lessor hereby consents to the Sublease. This Consent shall not be construed to relieve Lessee from obtaining the express written consent of Lessor to any modification of the Sublease or to any further assignment of the Lease or subletting of the Premises, except as expressly stated herein. Notwithstanding the foregoing, nothing in the Sublease shall be deemed to amend or modify the Lease and in the event of a conflict between the Lease and the Sublease, the terms of the Lease shall control.
6. Use . Lessor hereby consents to the proposed use of the Premises by Sublessee as set forth in the Sublease; provided, however, the second and third sentences of Section 6 of the Lease shall remain in full force and effect.
7. Assignment of Sublease by Sublessee . Sublessee shall have the right to assign the Sublease to a MERIX Entity (as hereinafter defined) without Lessor’s consent, provided that at the time of making such assignment of Sublease (i) Lessee is in not in default of any of the provisions of the Lease and Sublessee is not in default under any provision of the Sublease, (ii) there is no event which, with notice or passage or time, would be deemed to be a default under the Lease or the Sublease, (iii) Sublessee gives Lessor ten (10) days written notice prior to the execution of such assignment, (iv) any assignment shall not result in Guarantor, Lessee or Sublessee being released or discharged from any liability under the Guaranty, Lease or Sublease, as the case may be, and Guarantor, Lessee and Sublessee remain liable for the full performance of the terms, covenants and conditions of the Guaranty, Lease and Sublease, (v) the assignee shall agree in writing to comply with and be bound by all the terms, covenants, conditions, provisions and agreements of the Lease and this Agreement and verifies that its use of the Premises complies with Section 6 of the Lease, and (vi) Sublessee shall deliver to Lessor and Lessee promptly after execution an executed copy of such assignment. For purposes of this Agreement, a “MERIX Entity” shall mean (i) MERIX Bioscience, Inc. (“MERIX”) or (ii) an affiliate of MERIX. An affiliate shall mean any corporation which directly controls or is controlled by or is under common control with MERIX. Control shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation through the ownership of voting securities.
8. Upfit . Lessor hereby consents to the upfit by Sublessee of 10,000 square feet of unfurnished space in the Premises (the “Shell Space”) at Sublessee’s sole cost and expense, subject to (a) the approval of Lessor of the plans for such upfit; (b) the plan shall provide that the upfit will be performed and Sublessee shall perform the upfit in a good and workmanlike manner using materials that are substantially similar and of better or equal quality to those presently contained in the Premises; (c) the plan shall provide Sublessee shall use contractors and engineers that are licensed in North Carolina and are qualified to perform the work to prepare the Premises for its intended use, each as reasonably acceptable to Lessor; (d) Sublessee shall not commence any such work without first delivering to Lessor a policy or policies of workers’ compensation and commercial general liability insurance naming Lessor as an additional insured; (e) Sublessee and Lessee warrant that any upfit installed by Sublessee will not violate the permitted uses of the Premises, will comply with all applicable building codes and zoning laws, and will not impact the structure of the Shell Building, the Shell Space or the Tenant Upfit; (f) Sublessee shall furnish Lessor with all permits required prior to commencement of the upfit work and all certificates and approvals with respect to the upfit that may be required by any governmental authority and deliver to Lessor properly executed general and subcontractor affidavits stating that all laborers and materialmen have been paid in full and final waivers of liens and lien releases from all general contractors and subcontractors who have performed the upfit or furnished materials to the Premises as a result of the upfit by Sublessee; and (g) Sublessee, at its expense, shall deliver, within thirty (30) days after completion of the upfit, the as-built plans to the Lessor. All Tenant Upfit and other upfit currently in the Premises as of the date of this Agreement and the Sublease, all Lessor Trade Fixtures (as hereinafter defined) and all upfit performed by the Sublessee shall immediately become Lessor’s property without compensation to Lessee or Sublessee and shall remain on the Premises upon the termination or earlier expiration of the Sublease, and Lease.
9. Trade Fixtures . For purposes of this Agreement, (i) Trade Fixtures shall mean the moveable and free standing personal property and equipment not affixed to the Premises, such as freezers and fume hoods, but shall not include case work (which is deemed Lessor’s property), and (ii) Lessor Trade Fixtures shall mean all of the case work, facility management system (Dell), flow cytometer (Eples XL), manifolds (CO2), mirrors, stainless steel tables and stainless steel work benches in the Premises as of the date of this Agreement and the Sublease. Lessor Trade Fixtures shall not include any enterprise management systems, including without limitation, any material resource planning systems or any manufacturing execution systems, installed by Sublessee after the commencement of the Sublease. All Lessor Trade Fixtures in the Premises at the commencement of this Agreement shall remain the property of Lessor and may not be removed by Sublessee or Lessee at any time. All other Trade Fixtures either placed in the Premises by Sublessee or in the Premises as of the date of the Sublease and identified on Exhibit B shall remain the property of Sublessee and be removable at any time, provided at the time of removal Sublessee shall promptly and at its own expense repair any damage to the Premises in removing any such Trade Fixtures and reconnect all connections.
10. Restoration . Lessor hereby agrees that neither Sublessee nor Lessee shall be obligated to restore the Premises to the condition which existed upon the commencement of the term of the Lease and that the provision of Section 9 of the Lease which require such restoration are hereby waived; provided, however, that all tenant upfit (including, but not limited to, the Tenant Upfit), case work, the heating, ventilating and air conditioning equipment located on the Premises at the termination of Sublessee’s occupancy of the Premises and the Lessor Trade Fixtures shall be the property of Lessor without compensation to Sublessee or Lessee and shall remain on the Premises at the termination of Sublessee’s occupancy of the Premises.
11. Ownership of Improvements . It is understood and agreed that all alterations, Improvements and Tenant Upfit and Lessor Trade Fixtures, whether constructed by Lessor or Lessee, and notwithstanding the provisions of the Lease, shall be and hereby is the property of Lessor, without compensation to Lessee. In connection therewith, Lessee does hereby grant, bargain, sell, transfer, convey, assign and deliver to Lessor, as of the date of this Agreement, all of Lessee’s right, title and interest, of whatever kind and character, in and to the Tenant Upfit and Lessor Trade Fixtures, free and clear of any and all liens, mortgages, encumbrances, pledges and security agreements of any nature whatsoever, to have and to hold unto Lessor, its successors and assigns forever, all of the Tenant Upfit and Lessor Trade Fixtures hereby granted, bargained, sold, transferred, conveyed, assigned and delivered. Lessee covenants that it is seized of the Tenant Upfit and Lessor Trade Fixtures in fee and has the right to convey the same in fee simple, the same is free and clear of all encumbrances whatsoever, and Lessee will warrant and defend the title thereto against the lawful claims of all persons whomsoever,
12. Duke Guaranty . Duke has agreed to guaranty certain obligations of Sublessee under the Sublease to Lessee, a copy of which is attached hereto as Exhibit C (the “Duke Guaranty”). A condition precedent to Lessor’s consent to the Sublease and this Agreement is the delivery to Lessor of an original fully executed Duke Guaranty.
13. Lease . Lessor’s consent to this Agreement is conditioned upon and subject to the execution and delivery of a lease for the Premises, satisfactory to Lessor, commencing on September 1, 2006 for a five (5) year term.
14. Property Line . The parties agree that the Property as described in the Lease may be modified by Lessor without Lessee’s or Sublessee’s consent on the southern property line and the western property line; provided, however, that the movement of the property line shall not adversely affect the ingress or egress to the Premises or the ability of Lessee or Sublessee to conduct business in the Premises. Upon notification by Lessor of the revised Property and description thereof, the Property shall be so defined. Neither Sublessee nor Lessee shall be liable for any cost incurred in connection with modifying the property line, including, without limitation, any costs incurred in connection with repaying the parking lot and altering any utility lines, if any.
15. Ratification by Lessee . Lessee expressly ratifies and confirms the terms and provisions of the Lease and acknowledges its continuing direct liability under the Lease. The Lease remains in full force and effect and is unaffected by the Sublease or by the Duke Guaranty.
16. Ratification by Guarantor . Guarantor hereby ratifies and confirms the terms and provisions of the Lease and the Guaranty and acknowledges that it remains directly and uncondi-tionally liable under the Guaranty and the Lease. The Guaranty remains in full force and effect and is unaffected by the Sublease or by the Duke Guaranty.
17. Modification . To the extent applicable, the Lease is hereby amended by the terms of this Agreement.
18. Capitalized Terms . All capitalized terms not otherwise defined in this Agreement shall have the same meaning as set forth in the Lease.
19. Entire Agreement . This Agreement contains the complete agreement of the parties regarding the terms and conditions of the consent to the Sublease and there are no oral or written conditions, terms, understandings or other agreements pertaining thereto which have not been incorporated herein.
20. Governing Law and Jurisdiction . The laws of the State of North Carolina shall govern the validity, interpretation, performance and enforcement of this Agreement. All parties hereby submit to the jurisdiction of the state courts situated in Durham County, North Carolina.
21. Modification and Waiver . No provision of this Agreement shall be amended, waived or modified except by an instrument in writing signed by the parties.
22. Binding Effect; Survival . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, heirs and assigns.
23. Counterparts . To facilitate execution, this Agreement may be executed in any number of counterparts as may be convenient or necessary and it shall not be necessary that the signatures of all parties hereto be contained on any one counterpart hereof. Additionally, the parties hereto hereby covenant and agree that for purposes of facilitating the execution of this Agreement, the signature pages taken from separate individually executed counterparts of this Agreement may be combined to form multiple fully executed counterparts. All executed counterparts of this Agreement shall be deemed to be originals, but all such counterparts, taken together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, Lessor, Lessee, Sublessee and Guarantor have caused this instrument to be duly executed under seal, all as of the day and year first above written.
STATE OF NORTH CAROLINA
AGREEMENT OF SUBLEASE made as of the 16 day of January, 2001, by and between Aventis Pharmaceuticals Products Inc. (f/k/a Rhone-Poulenc Rorer Pharmaceuticals Inc.), a Delaware corporation (“Sublessor”), and Merix Bioscience, Inc., a Delaware corporation authorized to do business in North Carolina (“Sublessee”).
W I T N E S S E T H:
WHEREAS, Sublessor is the Tenant under a certain Lease (the “Lease”) dated as of June 14, 1995, with The GMH Independence Limited Partnership (“Lessor”) as Landlord, pertaining to approximately 20,000 square feet of space (10,000 square feet of which is finished as office and lab space (the “Finished Space”) and 10,000 square feet of which is unfinished space (the “Shell Space”)) located at 4233 Technology Drive, Durham, North Carolina (the “Subleased Premises”), a copy of which is attached hereto as Exhibit “A” and made a part hereof (Terms used and not otherwise defined herein shall have the meaning ascribed to them in the Lease); and
WHEREAS, Sublessor is the Tenant under the Lease by way of Assignment of Lease (“Assignment”) made and effective as of the 5 th day of August, 1996 by and between Lessor, Ex Vivo Therapies, a Delaware joint venture (“Assignor”), Sublessor as assignee and Rhone-Poulenc Rorer, Inc. (“Guarantor”), a copy of which is attached hereto as Exhibit B; and
WHEREAS, Sublessee desires to sublease the Subleased Premises from Sublessor and Sublessor desires to sublease the Subleased Premises to Sublessee, subject to the terms and conditions of this Sublease Agreement.
NOW, THEREFORE, in consideration of the premises, which are incorporated herein by reference, and of the terms, conditions and covenants set forth herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Subleased Premises . Sublessor hereby sublets to Sublessee, and Sublessee hereby subleases from Sublessor, the Subleased Premises, shown as Exhibit “C” attached hereto and made a part hereof, and consisting of approximately 20,000 rentable square feet of office space consisting of the Shell Space and the Finished Space situated at 4233 Technology Drive, Durham, North Carolina.
2. Term of Sublease . The term (the “Term”) of this Sublease shall commence on the date that Sublessor has received all of the following: (a) a copy of this Sublease Agreement executed by Sublessee and Sublessor; (b) an executed copy of the Lessor’s and Guarantor’s consent to this Sublease; and (c) an executed copy of a Guaranty from Duke University guaranteeing the payment of the Base Rent and Additional Rent (each as defined below) under this Sublease for the time period specified in the Guaranty (the “Commencement Date”), and shall end on the 1 st day of September, 2006, (or until such term shall sooner cease or expire as hereinafter provided) (the “Termination Date”). Possession of the Subleased Premises shall be delivered to Sublessee on the Commencement Date. The parties agree that the consent by Lessor and Guarantor shall include (i) a consent to the proposed use by Sublessee of the Subleased Premises as set forth in Section 4 of this Sublease; (ii) a consent to the upfit of the Shell Space at Sublessee’s sole cost and expense, subject to (A) the approval of Lessor of the plans for such upfit; (B) the plans shall provide that the upfit will be performed and Sublessee shall perform the upfit in a good and workmanlike manner using materials that are substantially similar and of better or equal quality to those presently contained in the Subleased Premises; (C) the plans shall provide and Sublessee shall use contractors and engineers that are licensed in North Carolina and are qualified to perform the work to prepare the Subleased Premises for its intended use, each as reasonably acceptable to Lessor; (D) Sublessee shall not commence any such work without first delivering to Lessor a policy or policies of workers’ compensation and commercial general liability insurance naming Lessor as an additional insured; (E) Sublessee and Sublessor warrant that any upfit installed by Sublessee will not violate the permitted use of the Subleased Premises and will materially comply with all applicable building codes and zoning laws and will not impact the structure of the Shell Space; (F) Sublessee shall furnish Lessor with all permits required prior to commencement of the upfit work and all certificates and approvals with respect to the upfit as may be required by any governmental authority and deliver to the Lessor properly executed general and subcontractor affidavits stating that all laborers and materialmen have been paid in full and final waivers of liens and lien releases from all general contractors and subcontractors who have performed the upfit or furnished materials to the Subleased Premises as a result of the upfit; and (G) Sublessee, at its expense, shall deliver within 30 days after completion of the upfit the as built plans for the Shell Space to the Lessor; (iii) a waiver by Lessor of any obligation of Sublessee or Sublessor to restore the Subleased Premises to the condition that existed prior to the Commencement Date or the commencement date of the Lease, respectively; provided, however, that all tenant upfit (including but not limited to Tenant Upfit), case work, the heating, ventilating and air conditioning equipment located on the Subleased Premises, work above the ceiling of the Shell Space installed by Sublessee, and all Lessor Trade Fixtures (as defined below) shall remain on the Subleased Premises at the termination of Sublessee’s occupancy of the Subleased Premises without compensation to Sublessee, unless Lessor requests the removal of same at the time Lessor approves such installations. For purposes of this Sublease, “Lessor Trade Fixtures” means the building management system, flow optometers, manifolds, mirrors, stainless steel tables and stainless steel workbenches located on the Subleased Premises as of the Commencement Date of this Sublease and shall not be deemed to include any enterprise management systems, including without limitation any material resource planning systems or any manufacturing execution systems installed by Sublessee. In addition, on or before November 10, 2000, Lessor shall have delivered to Sublessee an agreement to lease the Subleased Premises directly from Lessor upon the expiration of the term of this Sublease upon terms that are satisfactory to the Sublessee (the “Additional Lease”). If Lessor fails to give such consent and deliver the Additional Lease by December 15, 2000, then Sublessee may cancel this Sublease by giving written notice of cancellation to Sublessor. Neither party shall have liability to the other for any termination or cancellation under this Section 2, unless such party by its willful act caused Lessor to refuse timely to consent to this Sublease.
3. The Lease .
(a) As between Sublessor and Sublessee, all of the Articles of the Lease are incorporated into this Sublease as if fully set forth in this Sublease, except the following: Sections l,2,5,6,7(a) and (d), 8, 15, 49, and 55. Where applicable, references in the Lease to Landlord will mean Sublessor and to Tenant will mean Sublessee, provided, however, Sublessor shall not be released thereby. Sublessor represents and warrants that it has full right, power and authority under the Lease to enter into this Sublease, subject to Lessor’s consent as provided therein. Sublessor further represents and warrants that the Lease is in full force and effect and has not been modified, amended or terminated except as stated in the Assignment. The copy of the Lease and Assignment attached hereto is a complete and accurate copy of the Lease and Assignment. Sublessor also represents and warrants that Sublessor is not in default under the terms of the Lease and no condition exists which with the giving of notice or passage of time, or both, would be a default under the Lease. Sublessor shall not modify or terminate the terms of the Lease without the written consent of the Sublessee.
(b) Sublessee acknowledges that it has reviewed and is familiar with all of the terms, covenants and conditions of the Lease that are incorporated herein and made a part hereof. Sublessee assumes and agrees to perform, observe and comply with all of the terms, covenants and conditions on the Lessee’s part to be performed, observed and complied with under the Lease and Assignment. This Sublease is expressly made subject and subordinate to all of the terms, covenants and conditions of the Lease. In the event of a conflict between the terms of the Lease and this Sublease, the terms of the Lease as modified by the Assignment shall control. At all times where consent is required of the Lessor under the Lease for an act of Sublessor as Tenant, consent shall be required by Lessor for such act by Sublessee.
(c) Sublessor shall deliver a copy of any notice of default received by Sublessor from Lessor with respect to the Lease within two days of receipt thereof. Sublessor shall provide Sublessee an opportunity to cure any such default within the cure period proved in the Lease, if any, but Sublessee shall not be obligated to do so. Nothing herein shall affect the rights of Lessor under the Lease.
4. Occupancy .
(a) Sublessee shall use and occupy the Subleased Premises solely for (i) research and development; (ii) cell culturing and other operations for the preparation of therapeutic vaccine and/or other services for (A) support of human clinical trials and (B) potential commercial purposes; and (iii) the development and or commercialization of other products related or substantially similar thereto. Sublessee has conducted an inspection, or been afforded the opportunity to inspect, the Subleased Premises and shall accept the Subleased Premises “as is” and “where is”, subject to Lessor’s obligations for maintenance and repair under the Lease and subject to any latent defects.
(b) Sublessee covenants that it will occupy the Subleased Premises in accordance with the terms of the Lease and will not suffer to be done or omit to do any act that may result in a violation of or a default under any of the terms and conditions of the Lease, or render Sublessor liable for any charge or expense arising out of, by reason of, or resulting from, Sublessee’s failure to perform or observe any of the terms and conditions of the Lease pertaining to the Subleased Premises.
(c) Sublessee agrees that Sublessor shall not be required to perform any of the covenants and obligations of Lessor under the Lease and, insofar as any of the covenants and obligations of Sublessor hereunder are required to be performed under the Lease by Lessor thereunder, Sublessee acknowledges that Sublessor shall be entitled to look to Lessor for such performance. Any default or failure of performance by Lessor shall not affect this Sublease or waive or defer any of Sublessee’s obligations hereunder; provided, however, that in the event of any such default or failure of performance by Lessor, Sublessor shall take such action as may reasonably be required, under the circumstances, to secure such performance upon Sublessee’s written request therefor and at Sublessee’s cost and expense.
5. Rent; Security Deposit .
(a) Base Rent . Sublessee shall pay to Sublessor base rent (“Base Rent”) as specified below:
Provided, however, that Sublessee shall not be obligated to pay Base Rent for the first sixty (60) days after the Commencement Date.
(b) Additional Rent . Sublessee shall be obligated to reimburse Sublessor for those costs and expenses that Sublessor is obligated to pay to Lessor under Sections 10(b), 14(a) and 16(a) of the Lease (collectively, “Additional Rent”); provided, however, that all such expenses and costs shall be prorated and adjusted between Sublessor and Sublessee as of the Commencement Date or the date the Sublease terminates, as the case may be. Sublessor shall notify Sublessee of any amounts due under such Sections of the Lease, including copies of all invoices received from Lessor with respect thereto, and Sublessee shall pay any such amounts to Sublessor within thirty (30) days of receipt of such notice.
The respective amounts set forth above for Base Rent shall be paid by the first day of each month in lawful money of the United States at Sublessor’s address specified for notices in Section 16. If Sublessee fails or refuses to pay any installment of Base Rent within five business days of when due, Sublessor shall be entitled to collect interest on the amount of the late payment equal to the Prime Rate of Interest as disclosed by Wachovia Bank, N.A. In addition, Sublessee shall pay a late fee of eight percent multiplied by the amount of the late payment commencing on the date the payment is delinquent until paid in full to compensate Sublessor for the additional expense involved in handling delinquent payments and not as interest; provided, however, that Sublessee shall not be obligated to pay a late fee unless Sublessee has paid Base Rent late two other times in any consecutive twelve-month (12) period. If the payment of a late charge required by this Section is found to constitute interest notwithstanding the contrary intention of Sublessor and Sublessee, the late charge shall be limited to the maximum amount of interest that lawfully may be collected by Sublessor under applicable law, and if any payment is determined to exceed such lawful amount, the excess shall be applied to any unpaid rent then due and payable hereunder and/or credited against the next succeeding installment of Base Rent payable hereunder.
(c) Security Deposit . On the Commencement Date, Sublessee shall pay to Sublessor a security deposit in the amount of $ 15,833.33 (the “Security Deposit”). If Sublessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Sublease, Sublessor may use, apply or retain all or any portion of the Security Deposit for the payment of any rent or other charge in d