Exhibit 10.11
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") dated as of the 22nd day of April,
2004, to
be effective as of the Commencement Date hereinafter set forth, is
made and
entered into by and between NOBLEGENE DEVELOPMENT, LLC, a Tennessee
limited
liability company (the "LANDLORD") and BIOMIMETIC PHARMACEUTICALS,
INC., a
Delaware corporation ("TENANT").
IT IS AGREED BY AND AMONG THE PARTIES AS FOLLOWS:
ARTICLE 1
LEASED PREMISES; TERM; COMMENCEMENT DATE
1.1 LEASED PREMISES AND LEASED IMPROVEMENTS. Upon and subject to
the terms
and conditions hereinafter set forth, Landlord hereby leases,
demises and lets
to Tenant, and Tenant hereby leases, rents and hires from Landlord,
the
following described property:
(a) Sixteen Thousand (16,000) square feet of rentable space (as
determined under applicable BOMA standards) in the area designated
on Exhibit A
hereto (herein the "INITIAL SPACE") in the office building (the
"BUILDING")
being constructed or to be constructed by Landlord and known as the
Cool Springs
Life Sciences Center located on Nickol Mill Lane (the Initial
Space, together
with the additional rentable square feet added to the Initial Space
under
Section 1.2 hereof or otherwise herein the "LEASED PREMISES");
(b) a right in common with all other tenants and occupants of the
Building to use certain other improvements useable in Tenant's
business
including certain laboratory and related spaces, if any, lobbies,
common areas,
corridors, landscaping, alleyways, crosswalks, sidewalks, parking
areas and
roadways appurtenant to such buildings and structures now or
hereafter situated
upon the land upon which the Building is located (collectively, the
"LEASED
IMPROVEMENTS") (said Building and the Leased Improvements are
sometimes
hereinafter referred to individually as a "Facility" and
collectively as the
"FACILITIES");
1.2 EXPANSION RIGHTS AND OBLIGATIONS. Tenant shall have the right
to lease
certain additional space within the Life Sciences Center comprised
of
approximately six thousand (6,000) rentable square feet (such space
herein the
"FIRST EXPANSION SPACE"). The right to lease the First Expansion
Space may be
exercised by written notice from the Tenant to the Landlord not
less than thirty
(30) days prior to desired occupancy date at any time from the
Commencement Date
until the date which is Eighteen (18) months from the Commencement
Date (herein
the "FIRST EXPANSION EXPIRATION DATE"). In the event Tenant has not
exercised
such right on or before the First Expansion Expiration Date, such
right shall be
deemed automatically withdrawn and of no force and effect.
1.3 TERM; COMMENCEMENT DATE; CERTAIN CONDITIONS.
(a) The initial term of the Lease (the "INITIAL TERM") shall be for
a
period commencing at 12:01 a.m. on the 1st day of the third month
following the
month in which "Substantial Completion" of the Building has
occurred (the
"COMMENCEMENT DATE"). This Lease shall remain in effect for a
period of SEVEN
(7) calendar years, expiring at midnight on the
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date (the "TERM EXPIRATION DATE") that is SEVEN (7) calendar years
from the
Commencement Date. On the Term Expiration Date, this Lease shall
terminate as to
the Initial Space, the First Expansion Space, and any other area
which may then
comprise the Leased Premises. The Landlord currently estimates that
Substantial
Completion shall occur on or before April 31, 2005. For purposes of
this Lease,
the term "Substantial Completion" of the Building shall mean that
(1) the
Landlord's architect shall have delivered its Certificate of
Substantial
Completion for the Building shell in which the Leased Premises are
located (here
in the "Building Shell"), and (ii) the Landlord shall have obtained
a
Certificate of Occupancy or the local equivalent for the Building
Shell.
(b) In accordance with the provisions of Section 1.3(a) of this
Lease,
Landlord shall notify Tenant in writing of the exact date of the
Commencement
Date once the Commencement Date has been determined. The
Commencement Date
specified in such writing shall be binding on the Landlord and
Tenant and shall
supercede any Commencement Date described or otherwise identified
elsewhere in
this Lease.
(c) If condemnation, in whole or in part, or any threat of
condemnation or
similar taking occurs or if a casualty of any type occurs
respecting the
Facilities or any part thereof prior to the Commencement Date,
Landlord or
Tenant may, at either party's option, either cancel this Lease, in
which event
this Lease shall become null and void, and the parties hereto shall
be released
of all obligations to each other, except for any obligations which,
by their
terms, expressly survive. Notwithstanding the foregoing, such right
to terminate
this Lease prior to the Commencement Date shall not be applicable
if the
Landlord determines that it will rebuild the portion of the Leased
Premises so
taken or damaged or that the portion so threatened and does not
prevent
construction of the Building, in which event this Lease shall
remain in full
force and effect. Under no circumstances, however, shall Tenant
have any
interest in insurance or condemnation proceeds payable as a result
of either a
condemnation or other taking or as a result of casualty.
(d) The parties hereto also hereby acknowledge and agree that the
Landlord's obligations and those of its successors and assigns
under this Lease
are conditioned on and subject to (a) Landlord's securing all
necessary or
desirable regulatory, subdivision, zoning or other permits or
approvals for the
construction, operation and use of the Building for the purposes to
which
Landlord desires, all as Landlord may determine in its discretion;
(b) the
Landlord's obtaining of financing for construction and/or permanent
ownership of
the Building; and (c) the construction of the Building and the
Leased
Improvements, all as Landlord may determine in its discretion. In
the event that
the foregoing conditions are not satisfied or the Landlord
determines that it is
or will be unable to fulfill any of the foregoing conditions, then
Landlord may
terminate this Lease immediately by delivering in writing notice
thereof to the
Tenant.
(e) Landlord anticipates the Building will be completed by the
estimated
Commencement Date set forth in Section 1.3, but Tenant understands
Landlord
cannot guarantee completion by that date. Tenant acknowledges and
agrees that
(a) completion of the Building may be delayed by causes that are
beyond
Landlord's control; (b) Landlord will not be liable for any delays
in completion
of the Building or in the Commencement Date; (c) Landlord will not
have to make
for or provide Tenant with any alternative accommodations or
compensate for
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Tenant's costs as a result of any delays; and (d) any delays will
not permit
Tenant to cancel or amend this Lease or otherwise diminish any of
Tenant's
obligations under this Lease. Tenant acknowledges and agrees that
the granting
of any limited right of possession or access by Landlord to Tenant
prior to the
Commencement Date shall not constitute a waiver by Landlord of any
of Landlord's
rights or Tenant's obligations under this Lease.
(f) For purposes of this Lease, "Lease Year" shall mean a period of
twelve
(12) successive calendar months commencing on the Commencement Date
and on the
same date in each successive year during the term of this Lease.
The terms "Term
of this Lease", "Lease Term", or "Term", when hereinafter used in
this Lease,
shall mean and include the Initial Term of this Lease, as the same
may be
shortened by any early termination of this Lease, and, to the
extent this Lease
may be extended or renewed, any Renewal Term of this Lease.
ARTICLE 2
GLOSSARY OF TERMS
2.1 DEFINITIONS. For all purposes of this Lease, except as
otherwise
expressly provided or unless the context otherwise requires, (i)
the terms
defined in this Article have the meanings assigned to them in this
Article and
include the plural as well as the singular, (ii) all accounting
terms not
otherwise defined herein have the meanings assigned to them in
accordance with
generally accepted accounting principles at the time applicable,
consistently
applied, (iii) all references in this Lease to designated
"Articles", "Sections"
and other subdivisions are to the designated Articles, Sections and
other
subdivisions of this Lease and (iv) the words "herein", "hereof and
"hereunder"
and other words of similar import refer to this Lease as a whole
and not to any
particular Article, Section or other subdivision:
"Award" means all compensation, sums or anything of value awarded,
paid or
received on a total or partial Condemnation.
"BOMA" means the Building Owners' and Managers' Association.
References to
area measurements which refer to BOMA shall mean and refer to the
BOMA
publication "Standard Method for Measuring Floor Area in Office
Buildings",
ANSL'BOMA Z65.1
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday
which is not a day on which national banks in the City of
Nashville, Tennessee,
are closed.
"Charge" has the meaning set forth in Article 11.
"Commencement Date" has the meaning set forth in Article 1.
"Common Areas" has the meaning set forth in Section 4.4(d).
"Condemnation" means the exercise of any governmental power of
condemnation
or eminent domain, whether by legal proceedings or otherwise, by a
Condemnor or
the transfer of all or any part of the Leased Premises as a result
thereof.
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"Condemnor" means any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation or on
whose behalf
the power of Condemnation is exercised.
"Event of Default" has the meaning set forth in Section 15.1.
"First Expansion Expiration Date" has the meaning set forth in
Section 1.2.
"First Expansion Space" has the meaning set forth in Section 1.2.
"GAAP" means generally accepted accounting principles consistently
applied.
"Hazardous Substance" means any hazardous or toxic substance,
material, or
waste which is or becomes regulated by any local governmental
authority, the
State of Tennessee or the United States Government, including,
without
limitation, (i) any substance, chemical or waste that is or shall
be listed or
defined as hazardous, toxic or dangerous under Hazardous Materials
Law, (ii) any
other chemical, material or substance, exposure to which is
prohibited, limited
or regulated by any federal, state or local governmental authority
pursuant to
any environmental, health and safety or similar law code,
ordinance, rule,
regulation, order or decree and which may or could pose a hazard to
the health
and safety of occupants or users of the Leased Premises or any part
thereof, any
adjoining property or cause damage to the environment, (iii) any
petroleum
products, (iv) PCBs, (v) leaded paint, and (vi) asbestos.
"Hazardous Materials Law" shall include the Comprehensive
Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 et
seq., the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section
6901 et seq., the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the
Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq, the Toxic
Substances Control
Act, 15 U.S.C. Section 2601 et seq., and the Safe Drinking Water
Act, 42 U.S.C.
Section 300f through 300j- 26, as such Acts have been or are
hereafter amended
from time to time; any so called superfund or superlien law; and
any other
federal, state and local statute, law, ordinance, code, rule,
regulation, order
or decree regulating, relating to or imposing liability or
standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or
material as now
or any time hereafter in effect.
"Impositions" means, collectively, all taxes, assessments and
governmental
charges relating to the Leased Premises or the Facilities as
applicable,
including all ad valorem, real or personalty, sales and use, gross
receipts,
privilege, rent or similar taxes, assessments (including all
assessments for
public improvements or benefits), water, sewer or other rents and
charges,
excises, tax levies, fees (including license, permit, inspection,
authorization
and similar fees), and all other governmental charges, in each case
whether
general or special, ordinary or extraordinary, or foreseen or
unforeseen, of
every character in respect of the Leased Premises or the Facilities
as
applicable (including all interest and penalties thereon due to any
failure in
payment by Tenant), applicable to periods of time within the Term
of this Lease
which at any time during or in respect of the Term hereof may be
lawfully
assessed or imposed on or in respect of, or be a lien upon, (a) the
Leased
Premises or any part thereof or any estate, right, title or
interest therein, or
(b) any occupancy, operation, use or possession of, sales from, or
activity
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conducted on, or in connection with, the Leased Premises or use of
the Leased
Premises or any part thereof; provided that nothing contained in
this Lease
shall be construed to require Tenant to pay (1) any tax based on
net income
(whether denominated as a franchise or capital stock or other tax)
imposed on
Landlord, (2) any transfer or net revenue tax of Landlord, and (3)
any tax
imposed with respect to the sale, exchange or other disposition by
Landlord of
any portion of the Leased Premises or the proceeds thereof.
"Initial Space" has the meaning set forth in section 1.1(a).
"Initial Term" has the meaning set forth in Section 1.3.
"Insurance Requirements" means all terms of any insurance policy
required
by this Lease and all requirements of the issuer of any such
policy.
"Landlord" means Noblegene Development, LLC, a Tennessee limited
liability
company, its successors and permitted assigns.
"Lease" means this Lease Agreement.
"Leased Improvements" has the meaning set forth in Section 1.1.
"Leased Premises" has the meaning set forth in Section 1.1(a).
"Legal Requirements" means all federal, state, county, municipal
and other
governmental statutes, laws, rules, orders, regulations,
ordinances, judgments,
decrees and injunctions affecting the Leased Premises or the
Facilities, as
applicable or the construction, use or alteration thereof whether
now or
hereafter enacted and in force, including any which may (a) require
repairs,
modification or alterations of or to the Leased Premises, or (b) in
any way
adversely affect the use and enjoyment thereof, and all permits,
licenses,
authorizations and regulations relating thereto, and all covenants,
agreements,
actions and encumbrances contained in any instruments, either of
record or known
to Tenant (other than encumbrances created by Landlord without the
consent of
Tenant), at any time in force affecting the Leased Premises.
"Material Adverse Effect" means those events or occurrences which,
individually or in the aggregate, would have a significant adverse
effect on the
financial or other condition, operations, business or prospects of
a party to
this Lease.
"Officer's Certificate" means a certificate of Tenant signed by the
Chief
Executive Officer or another officer authorized to so sign by the
Board of
Trustees, or any other person whose power and authority to act has
been
authorized by delegation in writing by any of the persons holding
the foregoing
offices.
"Operating Costs" has the meaning set forth in Section 4.4.
"Overdue Rate" means, as of any date, a rate per annum equal to the
Prime
Rate as of such date, plus three (3) percent, but in no event
greater than the
maximum rate then permitted under applicable law.
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"Payment Date" means any due date for the payment of the
installments of
Rent under this Lease.
"Primary Intended Use" has the meaning set forth in Section 6.1.
"Prime Rate" means the annual rate announced by the Wall Street
Journal or
its successors from time to time as being the prime rate. The prime
rate is an
index rate used by the Wall Street Journal to establish lending
rates and may
not necessarily be the most favorable lending rate. Any change in
the Prime Rate
hereunder shall take effect on the effective date of such change in
the prime
rate as established by the Wall Street Journal, without notice to
Tenant or any
other action by Landlord. Interest shall be computed on the basis
that each year
contains three hundred sixty-five (365) days, by multiplying the
principal
amount by the per annum rate set forth above, dividing the product
so obtained
by 365, and multiplying the quotient thereof by the actual number
of days
elapsed.
"Rent" has the meaning set forth in Section 3.1.
"Replacement Property" has the meaning set forth in Section 8.1(e).
"Security Deposit" has the meaning given it in Section 4.6.
"Taking" means a taking during the Term hereof of all or part of
the Leased
Premises, or any interest therein or right accruing thereto or use
thereof, as
the result of, or in settlement of any Condemnation or other
eminent domain
proceeding affecting the Leased Premises whether or not the same
shall have
actually been commenced.
"Tenant" means BioMimetic Pharmaceuticals, Inc., a Delaware
corporation,
its successors and permitted assigns.
"Tenant Improvement Allowance" has the meaning set forth in Section
9.3.
"Tenant Work" has the meaning set forth in Section 9.3.
"Tenant's Personal Property" means all machinery, equipment,
furniture,
furnishings, computers, signage, trade fixtures or other personal
property and
consumable inventory and supplies of Tenant used or useful in the
operation of
the Leased Premises for its Primary Intended Use, together with all
replacements
and substitutions therefore.
"Tenant's Proportionate Share" has the meaning set forth in Section
4.2.
"Unavoidable Delay" means delays due to strikes, picket lines,
boycotts,
lockouts, power failure, acts of God, governmental acts or
restrictions, war
(whether or not declared), enemy action, revolution, terrorism,
riots,
insurrections, civil commotion, fires, floods, freezes, accidents,
unavoidable
casualty, inability to obtain materials or labor, scarcity or
rationing of
gasoline or other fuel or vital products or personnel, or other
causes
reasonably beyond the control of the party responsible for
performing an
obligation hereunder, provided that lack of funds shall not be
deemed a cause
beyond the control of either party hereto.
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"Unsuitable for Its Primary Intended Use" or "Unsuitable for Its
Primary
Intended Uses", as used anywhere in this Lease, shall mean that, by
reason of
damage or destruction, prohibition of use by any governmental
entity, or a
partial Taking, in the good faith judgment of Tenant, reasonably
exercised, the
Leased Premises cannot be operated on a commercially practicable
basis for its
Primary Intended Use, taking into account, among other relevant
factors,
available parking, the amount of square footage and the estimated
revenue
affected by such damage, destruction, or prohibition.
ARTICLE 3
RENT
3.1 BASE RENT. Tenant shall pay to Landlord, without notice or
demand, in
lawful money of the United States of America, at Landlord's address
set forth
herein or at such other place or to such other person, firm or
corporation as
Landlord, from time to time, may designate in writing, Base Rent
for each Lease
Year during the Term of this Lease in an annual amount equal to
$17.50
multiplied by the number of rentable square feet within the Leased
Premises, as
such amount shall be adjusted from time to time under the terms of
this Lease.
The annual Base Rent shall be due and payable in twelve (12) equal
monthly
installments initially in the amount of Twenty Three Thousand Three
Hundred and
Thirty Three Dollars and Thirty-Three Cents ($23,333.33) each,
payable in
advance, beginning on the Commencement Date (as hereinafter
defined) and
continuing on the first day of each successive calendar month
thereafter during
the Term of this Lease, subject, however, to adjustment as and when
the rentable
square feet contained in the Leased Premises increases under the
terms of this
Lease. If any payment of Base Rent owing by Tenant to Landlord
after the
Commencement Date shall not be paid within five (5) days of the
date when due,
such unpaid amount shall be considered delinquent, and shall (i) be
assessed a
Late Fee in the amount of five percent (5%) of the unpaid amount,
and (ii) bear
interest at the Overdue Rate from the date such Rent Payment was
due to the date
of actual payment.
3.2 ADJUSTMENTS TO BASE RENT. Landlord and Tenant agree that Base
Rent
payable under this Lease in accordance with Section 3.1 shall be
subject to
adjustment as set forth in this Section 3.2. Beginning with the
second Lease
Year, Base Rent shall be adjusted to reflect changes year to year
in the
Consumer Price Index ("CPI") as set forth below. The basis for
computing the CPI
adjustment shall be the unadjusted Consumer Price Index for all
Urban Consumers
- all Items (1982-84=100) published by the Bureau of Labor
Statistics of the
United States Department of Labor (the "Index"). The Index for the
third
calendar month preceding the beginning of the second Lease Year
shall be the
"Base Index Number." The Index for the same month in the year of
the applicable
Adjustment Date shall be the "Current Index Number." On each
anniversary of the
Commencement Date during the Term of this Lease (each such date an
"Adjustment
Date"), Base Rent shall be adjusted as follows (a) by an increase
of three
percent (3%) of the then current Base Rent or (b) if larger, by
adjustment to
reflect the increase in the CPI over the preceding Lease Year, not
to exceed
five percent (5%). If Base Rent is to be increased pursuant to
clause (b), the
new Base Rent shall be the product obtained by multiplying the Base
Rent then in
effect (the "Initial Base Rent") by a fraction the numerator of
which is equal
to the Current Index Number and the denominator of which is equal
to the Base
Index Number. If the Index is not in existence at the time of such
determination, the parties shall use an
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equivalent price index as is published by a comparable governmental
agency in
lieu of the Index or a mutually acceptable similar price index as
published by a
non-governmental agency.
3.3 NET LEASE. The Rent (as defined in Section 4.1) shall be paid
absolutely net to Landlord, so that this Lease shall yield to
Landlord the full
amount of the installments of Base Rent and the payments of
Additional Rent, as
hereinafter defined, throughout the entire Term. The covenant to
pay Rent as set
forth in this Lease is independent of the covenants of Landlord
hereunder.
Tenant shall have no right of offset, deduction, abatement,
recoupment or charge
under this Lease and shall pay all Rent as and when due without any
deduction
whatsoever.
ARTICLE 4
COSTS PAID BY TENANT
4.1 ADDITIONAL RENT; Operating Costs; Insurance Costs. In addition
to the
Base Rent as set forth in Section 3 herein, Tenant shall pay
Landlord
"Additional Rent', which term shall be defined to include the
following:
(a)
"Tenant's Proportionate Share" of "Operating Costs";
(b) any sum owed for separately metered utilities, if any,
including,
without limitation, electricity;
(c) all charges for insurance coverage required to be maintained
pursuant to Article 12 hereof during the Term of this Lease; and
(d) any other sums owed by Tenant pursuant to the terms of this
Lease
or otherwise arising in connection with Tenant's occupancy of the
Leased
Premises as expressly agreed upon by both parties in writing.
For purposes of this Lease, Base Rent and Additional Rent shall
hereinafter
be collectively referred to as "Rent".
4.2 PROPORTIONATE SHARE. "Tenant's Proportionate Share" shall mean
the
rentable area of the Leased Premises divided by the rentable area
of the
Building on the last day of the calendar year for which "Operating
Costs" (as
defined in Section 4.4) are being determined. Except as provided
expressly to
the contrary herein, the rentable area of the Building shall
include all
rentable area of all space leased or suitable for lease in the
Building, which
Landlord may reasonably re-determine from time to time, to reflect
any
re-configurations, additions or modifications to the Building. If
the Building,
or any development of which it is a part, shall contain non-office
uses,
Landlord shall have the right to determine in accordance with sound
accounting
and management principles, Tenant's Proportionate Share or of such
development,
in which event, Tenant's Proportionate Share of the Building shall
be based on
the ratio of the rentable area of the Leased Premises to the
rentable area of
such office portion and/or other areas used or useable by Tenant.
As and when the Building shall become part of or shall include a
complex or
group of buildings or structures collectively owned, leased or
managed by or on
behalf of Landlord or any of its affiliates, Landlord may allocate
among the
buildings within the complex or group of buildings those categories
of Operating
Costs which relate to any facilities which are for the common use
or benefit of
the complex or group of buildings, among such buildings in
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accordance with sound accounting and management principles. Such
common use or
benefit facilities shall include, but shall not necessarily be
limited to,
parking facilities and driveways, sidewalks, connecting bridges and
corridors,
lobbies, foyers and other public areas, maintained for the common
benefit and
use of buildings within the complex or group.
For purposes of determining Tenant's Proportionate Share, but
subject to
Landlord's right to re-determine the rentable area of the Building
from time to
time pursuant to this Section 4.2, Landlord has calculated the
rentable area in
the Leased Premises and the Building in its reasonable discretion
with respect
to the layout of multi-tenant floors. The rentable area in the
Leased Premises
as set forth in Section 1.1 of this Lease is hereby stipulated to
be the
rentable area of the Leased Premises for all purposes under this
Lease, whether
the same should be more or less as a result of minor variations
resulting from
actual construction and completion of the Leased Premises and for
actual
occupancy; provided, however, in the event Landlord re measures the
Leased
Premises in accordance with commercially reasonable procedures and
if the
rentable area of the Leased Premises is different than above
stated, Landlord
may give Tenant written notice of the change and the new number of
square feet
shall become the rentable area of the Leased Premises for all
purposes effective
as of the date of such notice.
4.3 PAYMENT OF OPERATING COSTS. Tenant shall be responsible for and
shall
pay Tenant's Proportionate Share of Operating Costs for all
calendar years
during the term of this Lease.
(a) As soon as reasonably possible prior to the beginning of each
calendar year during the Term, Landlord may furnish Tenant with a
statement of
Landlord's estimate of Tenant's Proportionate Share of Operating
Costs for such
calendar year. By the first day of each month thereafter during
such calendar
year, in addition to Base Rent due hereunder at such time, Tenant
shall pay a
monthly installment equal to 1/12th of Tenant's Proportionate Share
of Operating
Costs as estimated and set forth in such statement, if any, for
such calendar
year. If Landlord fails to deliver such statement prior to January
1 of the
applicable year, Tenant shall pay 1/12th of Tenant's Proportionate
Share
Operating Costs for the prior year, if any, until such statement is
received. If
Landlord furnishes Tenant such a statement, to the extent the new
estimate is
greater to or less than the estimates paid to date for such
calendar year, a
lump sum payment or credit shall be made in the next monthly
payment to adjust
for such differential and, thereafter, Tenant shall pay 1/12th of
Tenant's
Proportionate Share of Operating Costs as set forth in the new
estimate.
(b) Within ninety (90) days after the end of each calendar year
during
the Term, Landlord shall furnish to Tenant a statement of actual
Operating Costs
and Tenant's Proportionate Share of Operating Costs for the
previous calendar
year (provided Landlord's right to collect Tenant's Proportionate
Share of
Operating Costs shall not be affected if Landlord fails to deliver
such
statement within such ninety (90) day period). A lump sum payment
(which payment
shall be considered a payment of rent for all purposes) will be
made by Tenant,
within thirty (30) days of the delivery of that statement, equal to
the excess,
if any, of the actual amount of Tenant's Proportionate Share of
Operating Costs
over all amounts paid by Tenant hereunder with respect to Tenant's
Proportionate
Share of Operating Costs for the preceding calendar year. If the
amount of
Tenant's Proportionate Share of the Operating Costs is less than
the estimated
amounts paid by Tenant hereunder with respect to Tenant's
Proportionate Share of
Operating
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Costs for such calendar year, Landlord shall apply the difference
(the
"Overage") to the next accruing installment of Rent due hereunder
or, if
necessary, subsequently accruing installments of Rent until the
entire Overage
amount is credited; provided that if the term of this Lease has
expired at the
time Landlord's Statement is delivered, Landlord shall refund the
amount of any
Overage within 30 days of the issuance of Landlord's Statement. If
actual
Operating Costs for any calendar year are less than estimated
Operating Costs,
then Tenant shall not be entitled to any portion of the
differential.
(c) In the event Tenant's Proportionate Share of Operating Costs
for
the final calendar year of the Term is not finally calculated until
after the
expiration of the Term, then Tenant's obligation to pay the same
and Landlord's
obligation to refund any Overage shall survive the expiration or
termination of
this Lease. Accordingly, Landlord shall have the right to continue
to hold
without interest Tenant's Security Deposit, if any, following
expiration of the
Term until Tenant's Proportionate Share of Operating Costs has been
paid in
full, unless an alternative security (letter of credit or
otherwise) is
furnished to the satisfaction of Landlord. Tenant's Proportionate
Share of
Operating Costs for the calendar years in which the Term commences
and ends, if
any, shall be prorated on the basis of the number of days of the
Term within
each such calendar year.
4.4 OPERATING COSTS DEFINED. "OPERATING COSTS" shall mean all
amounts paid
or payable, whether by Landlord or by others on behalf of Landlord,
arising out
of the ownership, management, maintenance, operation, repair,
replacement and
administration of the Building and the land upon which the Building
is located
and any parking areas and facilities associated with the Building,
including,
without limitation:
(a) the cost of all real estate, personal property and other ad
valorem taxes, and any other levies, charges, impact fees and local
improvement
rates and assessments whatsoever assessed or charged against the
Building, the
land upon which the Building is located, the equipment and
improvements
contained therein or thereon, or on or in any part thereof, by any
lawful taxing
authority (collectively, "Taxes"), including all costs associated
with the
appeal of any assessment of Taxes;
(b) the cost of insurance obtained by Landlord, including, but not
limited to, casualty insurance, liability insurance, rent
interruption
insurance, and any deductible amount applicable to any claim made
by Landlord
under any such insurance;
(c) the cost of security, landscaping, window cleaning, garbage
removal, trash removal and all of the services provided to Tenant
and other
tenants of the Building by Landlord (other than any services which
are
separately billed to Tenant or any other tenants);
(d) the cost of heating, ventilating and air conditioning of the
(i)
Common Areas of the Building ("COMMON AREAS" being defined for
purposes of this
Lease as areas of the Building that provide service to Building
tenants but that
are not part of any tenant's leased premises including but not
limited to
lobbies, atria, security desks, conference rooms, vending areas,
lounges, food
service facilities, locker or shower facilities, mail rooms,
courtyards,
mechanical or equipment rooms, washrooms, public corridors,
elevators and
stairwells), and (ii) the leased premises and other rentable space
in the
Building, if the Building is equipped with a central or any shared
heating,
ventilating and air-conditioning system;
10
(e) the cost of all gas, water, sewer, electricity and any other
utilities used in the maintenance, operation, use and occupancy and
administration of the Building (including all rentable space in the
Building)
and the Common Areas, excepting, however, any such utilities as are
separately
metered or separately sub-metered to Tenant or any other tenants of
the
Building, unless the cost of which separately metered or separately
sub-metered
utilities is the responsibility of Landlord;
(f) salaries, wages and other amounts paid or payable for all
personnel involved in the management, repair, maintenance,
operation, leasing,
security, supervision or cleaning of the Building, any Common Areas
and the
rentable space within the Building including fringe benefits,
unemployment and
workmen's compensation insurance premiums, pension plan
contributions and other
employment costs, as well as the cost of engaging independent
contractors to
perform any of the foregoing services;
(g) auditing, accounting and legal fees and costs;
(h) the cost of repairing, replacing, operating and maintaining the
Building, the Common Areas of the Building and the Leased Premises
and other
rentable space in the Building and the equipment serving the
Building, such
common areas, and such rentable space;
(i) the cost of the rental of any equipment and signs (not
including
Tenant's signage);
(j) all management and administrative costs and fees;
(k) capital expenditures for improvements and/or equipment which
are
required by law and/or which are designed to result in a labor or
cost savings,
in which case the capital expenditures shall be amortized over the
useful life
of the improvements or equipment as determined by Landlord, not
exceeding ten
(10) years and shall be included on an annual basis in Operating
Costs;
(l) costs incurred by Landlord to conduct any environmental tests
required by municipal, county, state or federal law, including
administrative
agencies, or by Landlord;
(m) without duplication of any of the foregoing, if the Building is
subject to the condominium form of ownership, all condominium
assessments, fees
and charges levied against or attributable to the condominium units
in the
Building; and
(n) all other expenses, costs and disbursements of every kind and
nature which Landlord shall pay or become obligated to pay in
respect to or in
connection with the operation and maintenance of the Building and
which are
usually considered "operating expenses" of a commercial office
building in
accordance with generally accepted accounting practices,
consistently applied.
Operating Costs shall not include the cost of any work or service
provided
to any tenant of the Building that is in addition to that which
Landlord is
obligated or permitted to provide to Tenant under the provisions of
this Lease
or the comparable provisions of the other tenant leases of the
Building. If the
Building is not at least ninety percent (90%) occupied during any
calendar
11
year, actual Operating Costs and estimated Operating Costs shall be
determined
as if the Building had been ninety percent (90%) occupied during
each such
calendar year.
4.5 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of
Ten
Thousand and No/100 Dollars ("$10,000.00") (the "Security Deposit")
as security
for the full and faithful performance by Tenant of all of Tenant's
obligations
hereunder. Tenant grants to Landlord a security interest in such
security
deposit to secure Tenant's obligations under this Lease. No
interest shall be
paid upon the security deposit nor shall Landlord be required to
maintain the
deposit in a segregated account, unless required by applicable law
in which
event Landlord will comply with such legal requirement. The
security deposit
shall not be construed as prepaid rent. In the event that Tenant
shall default
in the full and faithful performance of any of the terms hereof,
then Landlord
may, without notice, either retain the security deposit as
liquidated damages,
or Landlord may retain the same and apply it toward any damages
sustained by
Landlord, including but not limited to actual, consequential or
other direct or
indirect damages sustained by the Landlord by reason of the default
of Tenant,
including but not limited to any past due rent. In the event of
bankruptcy or
other debtor-creditor proceedings, either voluntarily or
involuntarily
instituted by or against Tenant, the security deposit shall be
deemed to be
applied in the following order: to damages, obligations and other
charges,
including any damages sustained by Landlord, other than unpaid
rent, due to
Landlord for all periods prior to the filing of such proceedings;
to accrued and
unpaid rent prior to the filing of such proceeding; and thereafter
to actual
damages, obligations, other charges and damages sustained by
Landlord and rent
due the Landlord for all periods subsequent to such filing. In the
event of a
sale of the Leased Premises or all or any portion of the Building,
Landlord
shall have the right to transfer the security deposit to the buyer,
and Landlord
shall thereupon be relieved of all obligations to return the
security deposit to
Tenant, and Tenant agrees to look solely to the buyer for the
return of the
security deposit. If Tenant fully and faithfully complies with all
of the terms
hereof, the security deposit or any balance thereof shall be
returned to Tenant
within thirty (30) days after expiration of this Lease, including
any renewal
thereof.
ARTICLE 5
OWNERSHIP OF LEASED PREMISES AND TENANT'S PERSONAL PROPERTY
5.1 Ownership of the Leased Premises. Tenant acknowledges that the
Leased
Premises is the property of Landlord, and that Tenant has only the
right to the
possession and use of the Leased Premises upon and subject to the
terms and
conditions of this Lease.
5.2 Tenant's Personal Property. Tenant may, at its expense,
install, affix
or assemble or place in the Leased Premises any items of the
Tenant's Personal
Property, and may remove, replace or substitute for the same, from
time to time,
in the ordinary course of Tenant's business. Tenant shall provide
and maintain,
during the entire Term, all such Tenant's Personal Property as
shall be
necessary in order to operate its business or the business of its
subtenants in
compliance with all applicable Legal Requirements and Insurance
Requirements and
otherwise in accordance with customary practice in the industry for
the Primary
Intended Use.
12
ARTICLE 6
USE OF LEASED PREMISES
6.1 USE OF THE LEASED PREMISES.
(a) After the Commencement Date and during the entire Term, Tenant
shall use the Leased Premises or cause the Leased Premises to be
used as
offices, light manufacturing and laboratory space for its own use
and for such
other uses as may be reasonably necessary in connection with or
incidental to
such purposes and uses (together, the "Primary Intended Use").
Tenant shall not use the Leased Premises or any portion thereof for
any
other use without the prior written consent of Landlord, which
consent shall not
be unreasonably withheld, conditioned or delayed.
(b) Tenant covenants and agrees that during the Term of this Lease
it
will continuously use and operate the Leased Premises in accordance
with its
Primary Intended Use.
(c) Tenant shall not commit or suffer to be committed any waste on
the
Leased Premises, nor shall Tenant cause or permit any nuisance
thereon.
(d) Tenant shall neither suffer nor permit the Leased Premises or
any
portion thereof, to be used in such a manner as (i) might
reasonably tend to
impair Landlord's title thereto or to any portion thereof, or (ii)
may
reasonably result in a claim or claims of adverse usage or adverse
possession by
the public, as such, or of implied dedication of the Leased
Premises or any
portion thereof.
6.2 ENVIRONMENTAL MATTERS. Except in compliance with all Hazardous
Materials Laws, Tenant will not store or dispose of nor permit any
subtenant,
licensee, occupant or operator to store or dispose of any Hazardous
Substances,
the removal of which is required or the maintenance of which is
prohibited or
penalized by any Hazardous Substances Law, on the Leased Premises.
Tenant will
not cause, allow or permit the release or discharge of any
Hazardous Substances
from the Leased Premises, and will not directly or indirectly
transport or
arrange for the transportation of any Hazardous Substances from the
Leased
Premises, or permit or suffer any subtenant, licensee, occupant or
operator of
the Leased Premises to do so, except in strict compliance with
applicable
Hazardous Materials Laws. Tenant covenants and agrees to maintain
the Leased
Premises at all times free of any Hazardous Substances, except in
