COMMERCIAL LEASE
THIS LEASE is made on the 1st
day of December , 2003.
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The Landlord hereby agrees to
lease to the Tenant, and the Tenant hereby agrees
to hire and take from the
Landlord, the Leased Premises described below pursuant
to the terms and conditions
specified herein:
LANDLORD: Union Square, L.P.
TENANT(S): PROTALEX, Inc.
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Address: P.O. Box 59
Address: 717 Encino N.
E., Suite 17
New Hope, PA 18938
Albuquerque, NM
87102
Telephone:
(215) 862-1014
Telephone: 215-598-1179
Facsimile:
(215) 862-1023
Facsimile: 215-598-9590
1. Leased Premises. The
Leased Premises are those premises described as:
Building: "A"
Building
Address:
_145_ Union Square Drive
New Hope, PA
18938
Gross Floor Area of Leased
Premises:
3,795 square feet,
pursuant to attached
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plan.
2.
Term.
A. The
term of the Lease ("Initial Term") shall be for a period
of Three ( 3 ) years, unless sooner terminated or extended,
as
hereinafter provided, and shall commence on the 9th day
of
January , 200_4 ("Commencement Date") and end on the 28th
day
of February , 200_7 ("Expiration Date").
B.
Commencement Date of the Initial Term is determined by
allowing sixty working days for build-out of the Leased
Premises, from the date Landlord receives a building
permit
for the Leased Premises. (See Paragraph 9 below, Delivery
of
Possession.)
C. If
Tenant remains in possession of the Leased Premises with
the written consent of the Landlord after the lease
Expiration
Date stated above (without exercising, if applicable, an
option to extend) this Lease will be converted to a
month-to-month Lease and each party shall have the right
to
terminate the Lease by giving at least one month's prior
written notice to the other party.
D. The
period commencing on the day the tenancy begins, and
ending on the last day of the twelfth month next
succeeding
the commencement of the Initial Term of this Lease,
shall
constitute the first lease year as used herein, and each
successive period of twelve months shall constitute a
lease
year.
3. Option to Extend. Tenant
is granted the right and option to extend the term
of this Lease for an
additional one or two years beyond the Initial Term
hereof
(each, an "extension period",
together with the Initial Term, the "Term"), the
first extension period to
commence upon the expiration of the initial term of
this Lease, provided that: A.
Such option must be exercised, if at all, by
written notice from Tenant to
Landlord given at least six (6) months prior
to the expiration of the then current Term;
B.
At the time of exercising each option, and at the
commencement
of each extension period, this Lease shall be in full
force
and effect and there shall exist no Event of Default by
Tenant; and
C.
In the event the foregoing option is effectively
exercised,
all the terms and conditions contained in this Lease
shall
continue to apply during any extension period.
4.
Base Rent.
A. The
Tenant agrees to pay the ANNUAL BASE RENT of Ninety-One
Thousand, Eighty Dollars ($91,080.00 ) payable in equal
installments of $7,590.00 in advance on the first day of
each
and every calendar month during the Initial Term of this
Lease
without deduction or demand. (Note: See Paragraph 6,
Additional Rent, below)
B. Rent
shall be payable to Landlord's address above.
C. Rent
shall increase 5% per year during the Initial Term. Rent
for years one and two of the optional extension period of
this
Lease shall increase at 2.5% per year.
D.
Tenant shall pay a "late charge" of ten percent (10%)
each
month on a cumulative basis of any installment of Rent (or
any
such charge as may be considered Additional Rent under
this
Lease) when paid more than ten (10) days after the due
date.
E.
Tenant shall pay $50.00 for any checks returned by the
bank
for insufficient funds.
5. Base
Rent Adjustment. If in any tax year commencing with the
fiscal
year 2005 , the real estate taxes and property insurance on the
land
and Building, of
which the Leased Premises are a part, are in excess of
the amount of real estate taxes and property insurance thereon for
the
fiscal year 2003 (hereinafter called the "Base Year"), Tenant will
pay
to Landlord as Additional Rent hereunder, when and as designated
by
notice in writing by Landlord, 100% percent of Tenant's
proportionate
share of such increase in the real estate taxes and property
insurance
over the Base Year that may occur in each year of the term of
this
Lease or any extension or renewal thereof and proportionately for
any
part of a fiscal year.
6.
Additional Rent.
A. All
sums of money required to be paid by Tenant under this
Lease (except for Base Rent), whether or not the same
are
designated "Additional Rent", shall be owed by Tenant to
Landlord as rent. Base Rent and Additional Rent shall be
referred to sometimes as Rent.
B.
Electric utilities for year one shall be charged for at a
rate
of $2.00 per square foot ($632.50 per month).
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Utilities for subsequent years of the Term, or any
extension
period thereof, shall be based on Tenant's pro-rata
share of the average monthly electric bill from year one
of
the Lease Term. In the
event Tenant, and the tenant
for the adjacent space at 140 Union Square Drive, agree
upon
terms to divide proportionate shares of the actual
monthly metered electric utility bill for the entire
6,164
square foot
space, this Additional Rent shall
terminate and the electric utility bill shall be agreed
upon
and paid for by the two tenant parties. If this
agreement for pro rata payment between the two tenant
parties
terminates, then Tenant shall resume payment as
designated above, beginning with year two.
7.
Common Area Maintenance Rent. Tenant shall be required to pay
to
Landlord Additional Rent for maintenance of common areas, which
shall
include cleaning of common hallways, washing the interior and
exterior
of windows, common area utilities, trash removal, snow
removal,
landscape maintenance and any other maintenance expenses that are
of a
general nature. The annual amount of Common Area Maintenance Rent
for
the first year of this Lease term is $2.00 per square foot of
gross
floor area. The monthly amount of Common Area Maintenance Rent for
the
Leased Premises for year one is $632.50.
8.
Security Deposit. Upon
execution of this Lease, the sum of
Seven Thousand, Five Hundred Ninety Dollars ($7,590.00 )
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shall be deposited by the Tenant with the Landlord as security for
the
faithful performance of all the covenants and
conditions of the lease by the said Tenant ("Security Deposit").
The Security Deposit is not an advance rent deposit or
measure of Landlord's damages in case of Tenant's default.
Upon each
occurrence of an Event of Default hereunder,
Landlord may use all or part of the Security Deposit to pay
delinquent
payments due under the Lease and the cost of any
damages injury, expense of liability caused by such Event of
Default
without prejudice to any other right or remedy
provided under this Lease, and law or in equity. Tenant shall pay
Landlord
on demand the amount that will restore the
Security Deposit to its original amount. If the Tenant
faithfully
performs all the covenants and conditions on his part
to be performed, then the Security Deposit (or portion
thereof
remaining) shall be returned to the Tenant, without
interest. This
Security Deposit is not required to be placed in an
escrow account.
9.
Delivery of Possession. If for any reason
the Landlord cannot deliver possession of
the Leased Premises to the Tenant on the
Commencement Date, this Lease shall not be
void or voidable, nor shall the Landlord be
liable to the Tenant for any loss or damage
resulting therefrom. However, there shall be
an abatement of Rent for the period between
the date upon which the Landlord delivers
possession, which shall become the adjusted
Commencement Date of the Term of this Lease
and the date of payment for the initial
installment of Base Rent.
10.
Use of Premises. The Leased premises may be
used only for the following purpose(s):
Office space and bio-tech
laboratory
11. Condition
of Leased Premises; Maintenance and Repair: At the time
of
delivery of possession, the Leased Premises shall be in good order
and
repair and in the condition described in the Specifications for
Union
Square attached hereto as Exhibit B. The Tenant agrees to take
good
care of and maintain the Leased Premises in good condition through
the
term of the lease.
Subject to the provisions of this Lease, Tenant shall make and pay
the
costs of all repairs and maintenance of all interior painting;
repairs
and maintenance of approved signs; and repairs and replacements of
all
floor coverings, lighting, and other fixtures and equipment inside
the
Leased Premises, and repair and restoration of all damaged plate
glass
in the Leased Premises unless such repairs are required due to
the
neglect of Landlord. Landlord will maintain the HVAC system at its
sole
cost, unless any repairs are a result of the Tenant's negligence,
in
which case, Tenant shall pay as Additional Rent, the cost of any
such
repairs. In the event Tenant's fit-out to the previously existing
space
layout require HVAC adjustment, any such adjustments shall be
at
Tenant's expense.
12. Utilities. Responsibility
for all utilities and services that are furnished
to the Leased
Premises shall be as designated below. The application for
and
connecting of utilities, as well as all services, shall be made by
and
only in the name of the responsible party.
Electric Tenant
(see 6 B. above)
Water/Sewer
Tenant
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Trash Landlord
Cleaning (interior)
Tenant Telephone
Tenant
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13. Compliance
with Laws and Regulations. Tenant, at its expense, shall
promptly comply with all federal, state, and municipal laws,
orders,
and regulations, and with all lawful directives of public
officers,
which impose any duty upon it or Landlord with respect to the
Leased
Premises. Tenant at its expense, shall obtain all required licenses
or
permits for the conduct of its business within the terms of this
Lease,
or for the making of repairs, alterations, improvements, or
additions
to the Leased Premises after delivery of possession. Landlord,
when
necessary, will join with the Tenant in applying for all such
permits
or licenses.
14.
Alterations and Improvements. Tenant shall not make any
alterations,
improvements or additions to the Leased Premises
without the prior written consent of Landlord, which consent
shall
not be reasonably withheld. Tenant shall supply
Landlord with a list of contractors and subcontractors,
and
with plans and specifications for all such alterations,
improvements and additions prior to requesting such consent.
All alterations, improvements and additions made by
Tenant
shall remain upon the Leased Premises at the expiration or
earlier
termination of this Lease and shall become the
property of Landlord unless Landlord shall, prior to or
after
the termination of this Lease, have given written notice
to
Tenant to remove same or any of same, in which event Tenant
shall
remove such alterations, improvements and additions and
restore the Premises to the same good order and condition in
which
it was on the Commencement Date. Should Tenant fail
so to do, Landlord may do so, and Tenant shall reimburse Landlord
for Landlord's expenses, on demand. All of such
alterations, improvements or additions shall be made
solely
at Tenant's expense;
and Tenant agrees to indemnify, defend
and save harmless Landlord (a) on account of any injury to
third
persons or property by reason of any such improvements,
additions or alterations, and (b) from the payment of any
claim
on account of bills for labor or materials furnished or
claimed to have been furnished in connection therewith.
Tenant
agrees to procure all necessary licenses, permits and
approvals before undertaking such work and to do all such work
in
a good and workmanlike manner, employing materials of
first class quality and complying with all applicable
governmental
requirements.
15.
Assignment/Subletting Restrictions. Tenant may not assign
this
agreement or sublet the Leased Premises without the prior
written
consent of the Landlord, which consent shall not be
unreasonably
withheld. Any assignment, sublease or other purported license to
use
the Leased Premises by Tenant without the Landlord's consent shall
be
void and shall (at Landlord's option) terminate this Lease. In
the
event that Landlord shall provide its consent to an assignment
or
sublease of the Leased Premises, such consent (i) shall not
constitute
a waiver of Landlord's right to withhold its consent to a
subsequent
assignment or sublease; and (ii) shall not reduce Tenant's
obligations
under the Lease.
16.
Insurance.
A. By
Landlord. Landlord shall at all times during the term of
this Lease, at its expense, insure and keep in effect on
the
Building in which the Leased Premises are located, fire
insurance with extended coverage. The Tenant shall not
permit
any use of the Leased Premises which will make voidable
any
insurance on the property of which the Leased Premises are
a
part, or on the contents of said property or which shall
be
contrary to any law or regulation from time to time
established by the applicable fire insurance rating
association. Tenant shall on demand reimburse the
Landlord,
and all other tenants, the full amount of any increase
in
insurance premiums caused by the Tenant's use of the
premises.
B. By
Tenant. Tenant shall, at its expense, during the term
hereof, maintain and deliver to Landlord, upon request,
public
liability and property damage and plate glass insurance
policies with respect to the Leased Premises. Such
policies
shall name
the Landlord and Tenant as insured, and have limits
of at least $1,000,000.00 for injury or death to any one
person and $1,000,000.00 for any one accident, and with
respect to damage to property and with full coverage for
plate
glass. Such policies shall be in whatever form and with
such
insurance companies as are reasonably satisfactory to
Landlord, and shall name the Landlord as additional
insured,
and shall provide for at least ten days prior notice to
Landlord of cancellation.
17.
Indemnification of Landlord. Tenant shall defend, indemnify, and
hold
Landlord harmless from and against any claim, loss, expense or
damage
to any person or property in or upon the Leased Premises, arising
out
of Tenant's use or occupancy of the Leased Premises, or arising out
of
any act or neglect of Tenant or its servants, employees, agents,
or
invitees.
18.
Condemnation. If all or any part of the
