Exhibit 10.5
LEASE AGREEMENT
THIS LEASE AGREEMENT
(“Agreement”), made and
executed to be effective as of August 10 , 2004, by
and between NEW RIVER PHARMACEUTICALS INC. , a Virginia
corporation (“NEW RIVER”), and THIRD SECURITY,
LLC , a Virginia limited liability company (“THIRD
SECURITY”),
W I T N E S S E T
H:
For and in consideration of the
covenants, undertakings and rents reserved herein and the mutual
benefits to be derived herefrom, the parties hereto agree as
follows:
1. LEASE OF PREMISES
: THIRD SECURITY hereby provides to
NEW RIVER, and NEW RIVER hereby accepts from THIRD SECURITY, upon
the terms and conditions herein set forth, the license to use that
certain part of the building located at 1881 Grove Avenue, Radford,
Virginia 24141 (the “Building”) consisting of the area
shown with cross-hatch on the floor plan annexed hereto marked
Exhibit A (hereinafter the “Premises”). This
Agreement and the fees reserved herein also cover NEW RIVER’s
right to use the common area described herein, in common with THIRD
SECURITY and other tenants of the Building, and access to visitor
parking, as needed by NEW RIVER.
2. AGREEMENT TERM : This Agreement and the tenancy hereby created
shall have a term of two (2) years (the “Term”)
commencing on August 10, 2004 (the “Commencement
Date”). Provided Tenant is current in its obligations and is
not in default in accordance with the terms of this Agreement, NEW
RIVER shall have the option, by providing written notice to the
THIRD SECURITY at least sixty (60) days before the expiration of
the Term, to renew this Agreement for three (3) consecutive one (1)
year periods upon the same terms and conditions as the original
Term, except the license fee which shall be hereinafter set
forth.
3. FEES :
|
|
(a)
|
Base
Fee .
NEW RIVER promises to pay to THIRD
SECURITY, as a rental fee for the Premises, the total shown on the
Floor Space Schedule annexed hereto marked Exhibit B for
each and every calendar month of the term of this Agreement (the
“Base Fee” ); provided, however, such Base Fee
may be adjusted from time to time as provided in paragraph 4
hereof. If NEW RIVER exercises its right to renew the Term as
provided in paragraph 2, the Base Fee shall increase by an amount
representing the percentage increase, if any, in the Consumer Price
Index for All Urban Consumers (“CPI-U”) issued by the
United States Department of Labor, Bureau of Labor Statistics (or a
properly adjusted substitute index if hereafter changed) for the
period beginning January 1 and ending December 31 of the previous
year for each year and continue to be payable in monthly
installments.
|
1
|
|
(b)
|
Payment . Commencing on the Commencement Date and
continuing on or before the first day of each month thereafter, NEW
RIVER shall timely pay to the THIRD SECURITY the Base Fee and all
additional sums to be paid by NEW RIVER to the THIRD SECURITY under
the terms of this Agreement, without deduction, offset or
counterclaim. All payments owed pursuant to this Agreement during
the Term hereof shall be paid to THIRD SECURITY at such place as
THIRD SECURITY may, from time to time, designate in writing and
until further such designation, such place shall be the business
office of THIRD SECURITY at 1881 Grove Avenue, Radford, Virginia
24141. In the event NEW RIVER fails to pay any fee or other payment
owed to THIRD SECURITY pursuant to this Agreement within fifteen
(15) days after such payment is due, NEW RIVER agrees to pay to
THIRD SECURITY, as an additional late fee, a sum equal to five
percent (5%) per month of each such delinquent payment.
|
4. FEE ADJUSTMENTS :
NEW RIVER agrees that the monthly
Base Fee payable as provided in Paragraph 3 hereinabove will be
increased if the floor space used by NEW RIVER exceeds those
figures used in the Floor Space Schedule annexed hereto marked
Exhibit B . In that case, Exhibit B will be adjusted
accordingly and the revised Base Fee will be payable effective with
the first month after the additional floor space is used. NEW RIVER
acknowledges that all requests for additional space are subject to
space availability.
5. COMMON AREAS : Common areas include parking areas, entrances
and exits thereto, driveways, sidewalks, landscaped areas,
reception area, unrestricted hallways, unrestricted lavatories, and
other areas and facilities provided and designated by THIRD
SECURITY for the common or joint use and benefit of all occupants
of the Building, and their respective employees, agents, customers
and invitees. THIRD SECURITY shall maintain all of the common areas
in such a manner and at such a cost as THIRD SECURITY may determine
necessary and proper. THIRD SECURITY reserves the right to alter
said common areas and to exercise control and management of the
common areas and to establish, modify, change and enforce such
rules and regulations as THIRD SECURITY, in its sole discretion,
may deem necessary or desirable, including, without limitation,
reasonable regulation of traffic patterns within parking areas and
the designation of specific parking spaces to be used by all
customers, employees and officers of NEW RIVER. NEW RIVER agrees to
abide by and conform to such rules and regulations and shall be
responsible for compliance with the same by its employees, agents,
customers and invitees. The failure of THIRD SECURITY to enforce
any such rules and regulations against NEW RIVER or any other
tenant of the Building shall not be deemed to be a waiver thereof.
THIRD SECURITY shall have the right to close portions of the common
areas at such times and for such periods as THIRD SECURITY may deem
necessary and proper for purposes of maintenance and repair as may
be required from time to time.
6. AUTHORIZED USE : NEW RIVER shall use and occupy the Premises
during the entire Term as office space for senior executives of NEW
RIVER, and for no other purpose, without the prior written consent
of THIRD SECURITY, which consent may be withheld by THIRD SECURITY
in its sole discretion. No use shall be made of the Premises nor
any act
2
done in or about the Premises that is unlawful
or that will increase the existing rate of insurance on the
Building. NEW RIVER agrees to observe such rules and regulations as
may be adopted and published by THIRD SECURITY from time to time
for the safety, care and cleanliness of the Premises and for the
security of THIRD SECURITY’s business.
7. POSSESSION : So long as NEW RIVER shall fully comply with
and promptly perform all of the material terms, covenants and
conditions of this Agreement and the rules and regulations on its
part to be complied with and performed, NEW RIVER shall have and
quietly enjoy possession of the Premises for the Term set forth
herein. NEW RIVER’s occupation and possession of the Premises
as of the Commencement Date shall be deemed NEW RIVER’s
agreement and acknowledgment that the Premises are then in a
tenantable and good condition.
8. SECURITY : NEW RIVER acknowledges that access to the
Premises is limited and strictly controlled. NEW RIVER agrees to
cause all of its employees, agents, customers and invitees to
comply with any and all rules and regulations established by THIRD
SECURITY to assure the security if its Building. NEW RIVER’s
officers, employees, agents, customers and invitees shall not
access portions of the THIRD SECURITY’s Building other than
the Premises, the Common Areas, and the areas specifically
designated accessible to NEW RIVER by THIRD SECURITY. THIRD
SECURITY shall distribute access control cards to NEW RIVER to be
used only to gain access to the Premises. NEW RIVER shall not
reproduce or permit reproduction of the access control card. In the
event that a person to whom an access control card is issued shall
leave the employ of NEW RIVER or shall no longer be an officer of
NEW RIVER, such access control card shall be returned to NEW RIVER
immediately. Upon the expiration or sooner termination of this
Agreement, all access control cards distributed to NEW RIVER shall
be surrendered immediately to THIRD SECURITY.
9. MAINTENANCE AND SERVICES PROVIDED BY
COMPANY : THIRD
SECURITY shall maintain the roof, exterior walls and structural
members of the Building, in reasonably good order and condition,
except for damage occasioned by the acts of NEW RIVER or NEW
RIVER’s officers, employees and agents.
THIRD SECURITY shall provide
lighting, electrical power (110-volt AC power), air conditioning,
water, sewer service, refuse disposal service and janitorial
service, all within the normal requirements of such utilities and
services for which the occupancy of NEW RIVER under this Agreement
is contemplated. THIRD SECURITY shall also provide a security alarm
system for the Building. THIRD SECURITY reserves the right to stop
any of the aforesaid services provided through it immediately upon
notice at the Premises, if and when THIRD SECURITY reasonably deems
such stoppage necessary and prudent because of an emergency. THIRD
SECURITY also reserves the right to stop any of said services after
reasonable notice of at least thirty (30) days, for repairs and/or
improvements of the Building; provided, however, THIRD SECURITY
shall not cause such stoppage if it would not, in the ordinary
course of business, cause such a stoppage if it affected its own
switching equipment located in the Building. THIRD SECURITY does
not warrant that any services provided through it will be free from
interruptions caused by labor controversies, governmental
regulations, accidents, inability to obtain fuel, water or
supplies, or other causes beyond the reasonable control of THIRD
SECURITY, but THIRD SECURITY shall use commercially reasonable
efforts to restore such services within a reasonable period of time
following such interruption.
3
THIRD SECURITY shall maintain in
common areas of the Building, the parking areas and the common
access areas which are part of the Premises in reasonably good
order and condition, except for damage occasioned thereto by the
acts of NEW RIVER or NEW RIVER’s officers, employees and
agents, and THIRD SECURITY shall furnish such areas with required
utility services during ordinary business hours of the Building and
shall provide lighting replacement for such areas. THIRD SECURITY
shall not be liable to NEW RIVER for any loss or damage caused by
or resulting from any variation, interruption or failure of utility
services to be provided by THIRD SECURITY pursuant to this
Agreement due to accident or strike or conditions or events not
under THIRD SECURITY’s control, nor shall such variation,
interruption or failure of utility services be deemed an eviction
of NEW RIVER or release NEW RIVER from any of NEW RIVER’s
obligations hereunder.
10. SPECIAL SERVICES
: To the extent that NEW
RIVER’s requested use of facsimile machines, photocopiers,
printers and conference rooms present in the common area of the
Building does not interfere with THIRD SECURITY’s use of such
resources and facilities, NEW RIVER shall be permitted to use such
resources and facilities at no additional monthly fee.
11. CARE OF PREMISES, REPAIRS AND
ALTERATIONS :
