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EXHIBIT 10.11
LEASE AGREEMENT (the "Lease"), made March , 2005, between CEDAR
BROOK 7 CORPORATE CENTER, L.P., 1000
Eastpark Blvd., Cranbury, New Jersey 08512,
"Landlord"; and VALERA PHARMACEUTICALS,
INC., having an office at 8 Clarke
Drive, Cranbury, NJ 08512, "Tenant".
W I T N E S S E T H :
WHEREAS, the Landlord intends to lease to the Tenant a portion of
7
Clarke Drive ("Building") constituting a
portion of the office/industrial park
known as Cedar Brook Corporate Center
("Office Park"); and
WHEREAS, the portion of the Building to be leased to Tenant is
currently occupied by another tenant who
will be vacating the space; and
WHEREAS, the Tenant will have no liability for any obligations
of
the vacating tenant; and
WHEREAS, Tenant is leasing three other spaces in 8 Clarke Drive
under separate lease agreements and
amendments, the current terms of which will
be extended to become co-terminus with this
Lease; and
WHEREAS, the parties hereto wish to mutually define their
rights,
duties and obligations in connection with
the Lease;
NOW THEREFORE, in consideration of the promises set forth
herein,
the Landlord leases unto the Tenant and the
Tenant rents from the Landlord the
leased premises described in Paragraph 1,
and the Landlord and Tenant do hereby
mutually covenant and agree as follows:
1.
LEASED
PREMISES
The leased premises shall consist of 21,274 rentable square feet
of
office and laboratory space ("Leased
Premises") as measured from outside of
exterior walls to center line of common
walls, together with all improvements
currently existing (the "Existing
Improvements") for the use of the Tenant, and
all easements, tenements, appurtenances,
hereditaments, rights and privileges
appurtenant thereto. Tenant shall also have
the right to use all common areas of
the Office Park in a similar manner as
other Office Park tenants.
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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2.
TERM OF
LEASE
2.1 The term of the Lease shall be 10 years, to commence on the
Commencement Date and to end on the day
before the 10th anniversary of the
Commencement Date. The term "Commencement
Date" shall mean the first day of the
month following the date that Landlord
notifies Tenant in writing that the prior
tenant has vacated the Leased Premises. The
Commencement Date is projected to be
between mid March and mid April, 2005.
During any period of partial monthly
occupancy prior to the Commencement Date,
Rent from such day until the first day
of the following month shall be prorated
(at a rate of 1/30th of the monthly
Rent per day), and all other terms and
conditions of this Lease shall apply
during such partial period.
2.2 Tenant currently occupies three separate spaces in 8 Clarke
Drive, pursuant to separate leases and
amendments with distinct terms (the
"Existing Leases"). At the Commencement
Date of this Lease, Landlord shall use
its best efforts to cause Cedar Brook
Corporate Center, L.P., the owner of 8
Clarke Drive and landlord under the
Existing Leases, to modify all three
Existing Leases to extend their current
terms to be co-terminus with the term of
this Lease. The rental rates, renewal
options and other terms and conditions of
the Existing Leases shall remain as
written.
3.
TENANT
IMPROVEMENTS
3.1 The Tenant agrees to accept the Leased Premises free of
debris
and broom clean, but otherwise in its "as
is" condition one day after the
Landlord notifies it that the space is
available. The Leased Premises shall be
delivered to Tenant with certain personal
property left by the prior tenant, all
of which shall belong to the Landlord
("Landlords's Personal Property"), but
which Tenant shall have the right to use
during the term of this Lease. Promptly
following Landlord's notice that the Leased
Premises is available, Landlord and
Tenant shall meet at the Leases Premises
for the purpose of inventorying
Landlord's Personal Property, which is
anticipated to include desks, office
tables, side chairs, cubicles, credenzas,
conference room tables, lunch room
tables, chairs and appliances, telephone
system, fixtures, laboratory benches
and laboratory hoods. In the event Tenant
requires any alterations, additions,
improvements or other construction ("Tenant
Improvements") to be performed at
the Leased Premises after the Commencement
Date, such construction shall be
performed by Landlord and Tenant shall be
responsible for all of the costs of
such construction.
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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4.
RENT
4.1 Tenant shall pay, as rent for the Leased Premises, the
following:
(a) From the day following Landlord's notification that the
Leased Premises are vacant until June 30,
2005 an annual base rent per square
foot of $24.28, payable monthly in the sum
of $43,044.39 ("Base Rent").
(b) From July 1, 2005 until June 30, 2010 an annual base rent
per square foot of $25.28 for an aggregate
annual Base Rent of $537,806.72,
payable monthly in the sum of
$44,817.23.
(c) Commencing July 1, 2010, and continuing until the
expiration of the Lease, an annual base
rent per square foot of $33.28 for an
aggregate annual Base Rent of $707,998.72,
payable monthly in the sum of
$58,999.89.
(d) The annual Base Rent shall be payable in advance in equal
monthly installments on the first day of
each calendar month.
4.2 Tenant shall pay the following which shall be referred to
herein
as "Additional Rent":
(a) A fixed fee per square foot for the Common Area Expenses
(as hereafter defined).
(b) Its proportionate share of the real estate taxes
("Proportionate Share"), which shall be
adjusted as of each January 1st during
the term, as necessary, based on the
relationship between the rentable square
footage of the Leased Premises to the
rentable square footage of building
construction completed and occupied in the
Office Park .
(c) Any other charges as provided in this Lease. The Base Rent
and Additional Rent shall be referred to
hereafter as "Rent".
4.3 Tenant covenants to pay the Rent in lawful money of the
United
States which shall be legal tender for the
payment of all debts, public and
private, at the time of payment. Such Rent
shall be paid to Landlord at its
office address hereinabove set forth, or at
such other place as Landlord may,
from time to time, designate by notice to
Tenant.
4.4 The Rent shall be payable by Tenant without any set-off or
deduction of any kind or nature whatsoever
and without notice or demand. All
increases required to be paid as Rent
in
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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accordance with this Lease, shall be paid
to Landlord within 10 days following
the giving of notice hereof by Landlord of
such increases.
5.
PARKING
AND USE OF EXTERIOR AREA
The Tenant shall have the right to use parking spaces on a
non-exclusive basis in common with other
tenants of the Building. Landlord
reserves the right to allocate specific
parking spaces if it chooses. The
Landlord and Tenant mutually agree that
they will not block, hinder or otherwise
obstruct the access driveways and parking
areas so as to impede the free flow of
vehicular traffic on the property. In
connection with the use of the loading
platforms, if any, Tenant agrees that it
will not use the same so as to
unreasonably interfere with the use of the
access driveways and parking areas.
Tenant shall not store trailers or other
vehicles on any portion of the access
driveways or parking areas, and may not
utilize any portion of the land or
Building outside of the Leased Premises for
any purpose unless consented to in
advance by Landlord.
6.
USE
The Tenant covenants and agrees to use and occupy the Leased
Premises only as office and laboratory
space, which use is expressly subject to
all applicable zoning ordinances, rules and
regulations of any governmental
instrumentalities, boards or bureaus having
jurisdiction thereof. Tenant's use
of the Leased Premises shall not interfere
with the peaceable and quiet use and
enjoyment by other tenants at their
respective leased premises located at the
Building or in the Office Park, nor shall
Tenant's activities cause Landlord to
be in default under its leases with such
other tenants.
7.
REPAIRS
AND MAINTENANCE
7.1 Tenant shall generally maintain and repair the Leased
Premises,
in a good and workmanlike manner, and
shall, at the expiration of the term,
deliver the Leased Premises in good order
and condition, damages by fire or
casualty, the elements and ordinary wear
and tear excepted. Tenant covenants and
agrees that it shall not cause or permit
any waste, damage or disfigurement to
the Leased Premises, or any overloading of
the floors. Tenant shall maintain and
make all repairs to the floor surface,
plumbing and electrical systems including
all ballasts and fluorescent fixtures
located within the Leased Premises, and
the entire HVAC system. Landlord shall be
responsible for repairs necessary to
the roof, exterior load-bearing walls, and
electric and plumbing systems to the
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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point where they enter the Leased Premises,
unless repair is necessitated by any
act of Tenant, or its agents, employees or
contractors.
7.2 The Tenant shall, at its own cost and expense, pay all
utility
meter and service charges, including
telephone, cable service, gas and electric
servicing the Leased Premises. Landlord
shall have the option to install, at its
own cost, a separate water meter and
invoice Tenant directly for its water/sewer
usage. The Tenant agrees to maintain the
Leased Premises at a minimum
temperature of 45 degrees and no higher
than 78 degrees. Tenant shall not store
any items outside the Leased Premises, and
shall deliver its garbage and
recyclables to the central receiving area
on the lot. Tenant shall dispose of
all hazardous/medical waste with an
approved hauler at its own cost.
7.3 Landlord does not warrant that any services Landlord or any
public utilities supply will not be
interrupted. Services may be interrupted
because of accidents, repairs, alterations,
improvements or any other reason
beyond the reasonable control of
Landlord.
8.
COMMON
AREA EXPENSES, TAXES AND INSURANCE
8.1 The Tenant shall pay to the Landlord, monthly, as
Additional
Rent the amounts set forth herein for the
following items all of which shall be
known as Common Area Expenses:
(a) In consideration of the costs incurred by the Landlord for
the operation, maintenance or repair of the
Office Park ("Operating Costs"), an
amount fixed at $1.97/square foot for the
year 2005 and increased by 3% each
January 1st commencing on January 1, 2006
("Operating Costs") including, without
limitation, the following items:
(1) lawns and
landscaping;
(2) standard
water usage and standby sprinkler charges;
(3) exterior and
interior common area Building lighting;
(4) exterior
sewer lines;
(5) exterior
utility lines;
(6) repair and
maintenance of any signs serving the Office
Park;
(7) snow
removal;
(8) standard
garbage disposal and recycling;
(9) general
ground maintenance;
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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(10) parking lot,
driveways and walkways;
(11) maintenance
contracts for the roof;
(12) pest control;
(13) central station
monitoring for fire sprinkler system;
and
(14) other ordinary
maintenance expenses normally incurred
by Landlord relating to the Building and common areas
of the Office Park;
The $1.97/square foot, as increased annually, shall include the
cost
of the annual insurance premiums charged to
the Landlord for insurance coverage
which insure the buildings in the Office
Park. The insurance shall be for the
full replacement value of all insurable
improvements with any customary
extensions of coverage including, but not
limited to, vandalism, malicious
mischief, sprinkler damage and
comprehensive liability, and insurance for one
year's rent. The Landlord shall maintain
said insurance in effect at all times
hereunder. Any increase in the insurance
premiums due to a change in rating of
the Building which is solely attributable
to Tenant's use, or due to special
Tenant equipment, shall be paid entirely by
the Tenant. Tenant expressly
acknowledges that Landlord shall not
maintain insurance on Tenant's furniture,
fixtures, machinery, inventory, equipment
or other personal property. Tenant
shall at all times, at its own cost and
expense, carry sufficient "All Risk"
property insurance on a replacement cost
basis to avoid any coinsurance
penalties in applicable policies on all of
Tenant's furniture, furnishings,
fixtures, machinery, equipment and
installations as well as on any alterations
or improvements made to the Leased Premises
by Tenant at its own cost and
expense subsequent to the Commencement
Date. Such coverage is to include
property undergoing additions and
alterations, and shall cover the value of
equipment and supplies awaiting
installations. On an annual basis, Tenant shall
furnish Landlord with certificates of the
existence of such insurance; and
(b) Tenant's Proportionate Share of the real estate and
personal property taxes assessed against
the Office Park for land, building and
improvements, along with any levy for the
installation of local improvements
affecting the Office Park assessed by any
governmental body having jurisdiction
thereof, which taxes and levies are
estimated to be $1.50/square foot for 2005,
provided, however, that Tenant shall be
entitled to Tenant's Proportionate Share
of any refund obtained by Landlord with
respect to any taxes. The real estate
tax obligation of the Tenant shall
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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include any tax or imposition for parking
lot usage which may be levied by any
governmental body having jurisdiction
thereof. In addition to its Proportionate
Share of the above items, Tenant shall pay
directly all real estate taxes
assessed by the municipality on its Tenant
Improvements. Anything in this
Section 8.1(b) or elsewhere in this Lease
to the contrary notwithstanding,
Tenant shall not be obligated to pay any
part of (1) any taxes on the income of
the Landlord or the holder of an underlying
mortgage and any taxes on the income
of the lessor under any underlying lease,
(2) any corporation, unincorporated
business or franchise taxes, (3) any estate
gift, succession or inheritance
taxes, (4) any capital gains, mortgage
recording or transfer taxes, (5) any
taxes or assessments attributable to any
sign attached to, or located on, the
Building or the land or (6) any similar
taxes imposed on the Landlord, the
holder of any underlying mortgage or the
lessor under any underlying lease; and
(c) A management
fee of 3% of the Tenant's Base Rent.
8.2 Tenant's obligation to pay Common Area Expenses for any
calendar
year, part of which falls within the term
of this Lease and part of which does
not, shall be appropriately prorated.
8.3 If at any time during the term of this Lease the method or
scope
of taxation prevailing at the commencement
of the lease term shall be altered,
Tenant's Proportionate Share of such
substituted tax or imposition shall be
payable and discharged by the Tenant in the
manner required pursuant to the law
which shall authorize such change.
8.4 The Tenant covenants and agrees that it will, at its sole
cost
and expense, carry liability insurance
covering the Leased Premises in the
minimum amount of $1,000,000.00 per
accident for 1 person, $3,000,000.00 per
accident for 2 or more persons, and a
minimum amount of $300,000.00 for property
damage. The Tenant shall add the Landlord
as an additional insured on such
policy and will furnish Landlord with a
certificate of said liability insurance
prior to the Commencement Date and annually
thereafter. The certificate shall
contain a clause that the policy will not
be canceled except on 10 days written
notice to the Landlord.
8.5 The parties covenant and agree that the insurance policies
required to be furnished in accordance with
the terms and conditions of this
Lease, or in connection with insurance
policies which they obtain insuring such
insurable interest as Landlord or Tenant
may have in its
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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own properties, whether personal or real,
shall expressly waive any right of
subrogation on the part of the insurer
against the Landlord or Tenant. Landlord
and Tenant each waives all right of
recovery against the other, its agents or
employees for any loss, damage or injury of
any nature whatsoever to property or
person for which the waiving party is
required by this Lease to carry insurance.
9.
SIGNS
Landlord will provide a sign monument listing all of the tenants
in
the Building. At its sole expense the
Tenant shall have the right to install on
the interior doors at the Leased Premises,
only such signs as are required by
Tenant for the purpose of identifying the
Tenant.
10.
ASSIGNMENT AND
SUBLETTING
10.1 The Tenant may not assign or sublet the Leased Premises
without
Landlord's consent, which shall not be
unreasonably withheld, conditioned or
delayed. The Tenant may not assign or
sublet the Leased Premises to an existing
tenant in the Office Park or assign or
sublease any space in the Office Park
from another tenant, without Landlord's
consent, which consent shall be within
the sole discretion of Landlord. Tenant
shall advise the Landlord in writing, by
certified mail, return receipt requested of
its desire to assign or sublease and
Landlord shall have 40 days from receipt of
such notice to notify Tenant whether
it rejects or consents to the assignment or
sublease. Landlord shall also have
the option to elect to re-capture the
Leased Premises and terminate the Lease.
If Landlord elects to recapture the Leased
Premises, Tenant shall surrender the
Leased Premises no later than 90 days after
Landlord's written notice of its
election to recapture.
10.2 The Landlord's consent shall not be required and the terms
and
conditions of Paragraph 10.1 shall not
apply as to Landlord's right to recapture
if the Tenant assigns or subleases the
Leased Premises to a parent, subsidiary,
affiliate or a company into which Tenant is
merged or with which Tenant is
consolidated, or to the purchaser of all or
substantially all of the assets of
Tenant.
10.3 In connection with any permitted assignment or subletting,
(i)
the Tenant shall pay monthly to the
Landlord 50% of any increment in rent
received by Tenant per square foot over the
Rent then in effect during the year
of the assignment or subletting, which
payment shall be made monthly together
with the required Rent hereunder; and (ii)
if Tenant receives any consideration
or value for such assignment or subletting,
Landlord shall be paid 50% of any
such consideration or
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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value within 10 days after receipt of the
same by Tenant. As a condition
hereunder, Tenant warrants and represents
to Landlord that it will furnish to
Landlord a copy of all pertinent documents
with respect to any such assignment
or subletting so as to establish Tenant's
obligation to Landlord hereunder.
10.4 Except as may otherwise be agreed to by Landlord in writing,
in
the event of any assignment or subletting
permitted by the Landlord, the Tenant
shall remain and be directly and primarily
responsible for payment and
performance of the within Lease
obligations, and the Landlord reserves the
right, at all times, to require and demand
that the Tenant pay and perform the
terms and conditions of this Lease. In the
case of a complete recapture, Tenant
shall be released from all further
liability with respect to the recaptured
space. No such assignment or subletting
shall be made to any tenant who shall
occupy the Leased Premises for any use
other than that which is permitted to the
Tenant, or for any use which may be deemed
inappropriate for the Building or
extra hazardous, or which would in any way
violate applicable laws, ordinances
or rules and regulations of governmental
boards and bodies having jurisdiction.
11.
FIRE AND
CASUALTY
11.1 In case of any damage to or destruction of any portion of
the
Building by fire or other casualty
occurring during the term of this Lease (or
previous thereto), which shall render at
least 1/3 of the floor area of the
Leased Premises or the building
untenantable or unfit for occupancy, which
damage cannot be repaired within 180 days
from the happening of such casualty,
using reasonable diligence ("Total
Destruction") then the term hereby created
shall, at the option of the Landlord or
Tenant, upon written notice to the other
party within 15 days of such fire or
casualty, cease and become null and void
from the date of such Total Destruction. In
such event the Tenant shall
immediately surrender the Leased Premises
to the Landlord and this Lease shall
terminate. The Tenant shall only pay Rent
to the time of such Total Destruction.
However, in the event of Total Destruction
if neither Landlord nor Tenant shall
elect to cancel this Lease within the 15
day period the Landlord shall repair
and restore the Building to substantially
the same condition as it was prior to
the damage or destruction, with reasonable
speed and dispatch. The Rent shall
not be accrued after said damage or while
the repairs and restorations are being
made, but shall recommence immediately
after the Leased Premises are
substantially restored as evidenced by the
issuance of a
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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CO/CA by municipal authorities. Issuance of
a CO/CA shall not relieve Landlord
of its obligations to complete the repairs
and restorations of the Building in
order to put the Building in substantially
the same condition as it was prior to
the damage or destruction. In any case
where Landlord must restore,
consideration shall be given for delays
under the Force Majeure paragraph in
this Lease (Paragraph 22). Whether or not
this Lease has been terminated as a
result of a casualty, in every instance,
all insurance proceeds payable as a
result of damage or destruction to the
Building shall be paid to Landlord as its
sole and exclusive property.
11.2 In the event of any other casualty which shall not be
tantamount to Total Destruction the
Landlord shall repair and restore the
Building and the Leased Premises to
substantially the same condition as they
were prior to the damage or destruction,
with reasonable speed and dispatch. The
Rent shall abate or shall be equitably
apportioned as to any portion of the
Leased Premises which shall be unfit for
occupancy by the Tenant, or which
cannot be used by the Tenant to conduct its
business. The Rent shall recommence
immediately upon substantial restoration of
the Leased Premises as evidenced by
the issuance of a CO/CA by municipal
authorities. Issuance of a CO/CA shall not
relieve Landlord of its obligations to
complete the repairs and restorations of
the Building in order to put the Building
is substantially the same condition as
it was prior to the damage or
destruction.
11.3 In the event of any casualty caused by an event which is
not
covered by Landlord's insurance policy; the
Landlord may elect to treat the
casualty as though it had insurance or it
may terminate the Lease. If it treats
the casualty as though it had insurance
then the provisions of this paragraph
shall apply. The Landlord shall serve a
written notice upon the Tenant within 15
days of the casualty specifying the
election which it chooses to make.
11.4 In the event the Landlord rebuilds, the Tenant agrees, at
its
cost and expense, at Landlord's reasonable
request, to move or remove any and
all of its equipment, fixtures, stock and
personal property in order to permit
Landlord to expedite the construction. The
Tenant shall assume at its sole risk
the responsibility for damage to or
security of Tenant's equipment, fixtures,
stock and personal property in the event
that any portion of the Building area
has been damaged and is not secure.
12.
COMPLIANCE WITH
LAWS, RULES AND REGULATIONS
Initial: Landlord
Tenant
Lease Version Date: 3-2-05
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12.1 (a) The Tenant agrees that upon acceptance and occupancy of
the
Leased Premises, it will, at its own cost
and expense, comply with all statutes,
ordinances, rules, orders, regulations and
requirements of the Federal, State
and Municipal governments arising from the
operations of Tenant at the Leased
Premises. The Tenant also agrees that it
will not commit any nuisance or
excessive noise, and will dispose
