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Exhibit 10.9
LEASE AGREEMENT
BY AND BETWEEN:
Cedar Brook Corporate Center, L.P.
"Landlord"
- and -
National Patent Development Corporation
"Tenant"
PREMISES: 8 Cedar Brook Drive
Cranbury, New Jersey 08512
DATED: _________, 199__
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TABLE OF CONTENTS
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1. LEASED
PREMISES.....................................................
1
2. TERM OF
LEASE.......................................................
1
3.
CONSTRUCTION........................................................
1
4.
RENT................................................................
2
5. PARKING AND USE OF
EXTERIOR AREA.................................... 3
6.
USE.................................................................
3
7. REPAIRS AND
MAINTENANCE.............................................
3
8. COMMON AREA EXPENSES
& MANAGEMENT FEE............................... 4
9.
SIGNS...............................................................
6
10. ASSIGNMENT AND
SUBLETTING........................................... 7
11. FIRE AND
CASUALTY...................................................
7
12. COMPLIANCE WITH LAWS, RULES
AND REGULATIONS......................... 9
13. INSPECTION BY
LANDLORD.............................................. 11
14. DEFAULT BY
TENANT...................................................
11
15. LIABILITY OF TENANT FOR
DEFICIENCY.................................. 13
16.
NOTICES.............................................................
14
17. NON-WAIVER BY
LANDLORD.............................................. 14
18. RIGHT OF TENANT TO MAKE
ALTERATIONS AND IMPROVEMENTS................ 14
19. NON-LIABILITY OF
LANDLORD........................................... 14
20. RESERVATION OF
EASEMENT............................................. 15
21. STATEMENT OF
ACCEPTANCE.............................................
15
22. FORCE
MAJEURE.......................................................
15
23. STATEMENTS BY LANDLORD AND
TENANT................................... 15
24.
CONDEMNATION........................................................
16
25. LANDLORD'S
REMEDIES.................................................
16
26. QUIET
ENJOYMENT.....................................................
17
27. SURRENDER OF
PREMISES...............................................
17
28.
INDEMNITY...........................................................
17
29. LEASE
CONSTRUCTION..................................................
18
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<TABLE>
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30. BIND AND INURE
CLAUSE............................................... 18
31.
INCLUSIONS..........................................................
18
32. DEFINITION OF TERM
"LANDLORD"....................................... 18
33. COVENANTS OF FURTHER
ASSURANCES..................................... 19
34. COVENANT AGAINST
LIENS.............................................. 19
35.
SUBORDINATION.......................................................
19
36. EXCULPATION OF
LANDLORD............................................. 19
37. NET
RENT............................................................
20
38.
SECURITY............................................................
20
39.
BROKERAGE...........................................................
20
40. LATE
CHARGES........................................................
20
41. RESERVED
SPACE......................................................
20
42. OPTION TO
RENEW.....................................................
21
</TABLE>
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AGREEMENT, made ___________, 1997, between Cedar Brook
Corporate
Center, L.P., 1000 Eastpark Blvd.,
Cranbury, New Jersey 08512, "Landlord"; and
National Patent Development Corporation,
Suite 4170, 9 West 57th St., New York,
NY 10019, "Tenant".
WITNESSETH:
WHEREAS, the Landlord intends to lease to the Tenant 8 Cedar
Brook
Dr., Cranbury, New Jersey 08512, ("Leased
Premises") constituting a portion of
the office/industrial park known as Cedar
Brook Corporate Center; and
WHEREAS, the parties hereto wish to mutually define their
rights,
duties and obligations in connection with
the said 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 7672 square feet of office
space
and 4800 square feet of
Laboratory/Production space, outside dimensions to
center line of common wall, identified on
the plot plan attached hereto and made
a part hereof as Schedule "A", together
with all improvements to be constructed
thereon by the Landlord for the use of the
Tenant, and all easements,
improvements, tenements, appurtenances,
hereditaments, fixtures and rights and
privileges appurtenant thereto, and any and
all fixtures and equipment which are
to be installed in said building by the
Landlord for the use of the Tenant in
its occupancy of the Leased Premises.
2. TERM OF LEASE
The term of the Lease shall be 5 years, to commence on or about
February 1, 1998 and to end January 31,
2003, which dates are subject to the
construction provisions set forth
below.
3. CONSTRUCTION
3.1 The Landlord shall substantially complete the Leased Premises
in
accordance with the plans, specification
and work letter ("Plans") to be agreed
to between the Landlord and
<PAGE>
AGREEMENT, made ___________, 1997, between Cedar Brook
Corporate
Center, L.P., 1000 Eastpark Blvd.,
Cranbury, New Jersey 08512, "Landlord"; and
National Patent Development Corporation,
Suite 4170, 9 West 57th St., New York,
NY 10019, "Tenant".
WITNESSETH:
WHEREAS, the Landlord intends to lease to the Tenant 8 Cedar
Brook
Dr., Cranbury, New Jersey 08512, ("Leased
Premises") constituting a portion of
the office/industrial park known as Cedar
Brook Corporate Center; and
WHEREAS, the parties hereto wish to mutually define their
rights,
duties and obligations in connection with
the said 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 7672 square feet of office
space
and 4800 square feet of
Laboratory/Production space, outside dimensions to
center line of common wall, identified on
the plot plan attached hereto and made
a part hereof as Schedule "A", together
with all improvements to be constructed
thereon by the Landlord for the use of the
Tenant, and all easements,
improvements, tenements, appurtenances,
hereditaments, fixtures and rights and
privileges appurtenant thereto, and any and
all fixtures and equipment which are
to be installed in said building by the
Landlord for the use of the Tenant in
its occupancy of the Leased Premises.
2. TERM OF LEASE
The term of the Lease shall be 5 years, to commence on or about
February 1, 1998 and to end January 31,
2003, which dates are subject to the
construction provisions set forth
below.
3. CONSTRUCTION
3.1 The Landlord shall substantially complete the Leased Premises
in
accordance with the plans, specification
and work letter ("Plans") to be agreed
to between the Landlord and
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Tenant, in writing. The Plans shall be
prepared by the Landlord after
consultation with the Tenant and shall
incorporate the tenant improvements set
forth in the letter of Cedar Brook
Corporate Center, L.P. dated July 14, 1997.
The Plans shall be approved by both parties
at least 90 days prior to the
Commencement Date, or such date shall be
extended by mutual agreement. The cost
of such work shall be borne by the
Landlord, with completion evidenced by either
a Permanent or Temporary Certificate of
Occupancy, or a Permanent or Temporary
Certificate of Acceptance ("CO/CA") issued
by the governmental instrumentality
having jurisdiction thereof. It is agreed
that for the purpose of this Lease,
wherever and whenever the term "substantial
completion" is used, it shall not
include items of maintenance, service,
punch list or guarantee. The Leased
Premises shall be considered substantially
completed upon the issuance of a
CO/CA. In the event this Lease is executed
on or before September 30, 1997, and
Landlord has not obtained the CO/CA by May
11, 1998, Tenant may terminate this
Lease. However, if the Lease is executed
after September 30, 1997, one day shall
be added to the May 11, 1998 termination
date for each day that the execution of
the Lease is delayed beyond September 30,
1997.
3.2 After consultation with the Tenant, the Landlord shall have
the
right to substitute for the materials and
equipment required by the Plans,
materials and equipment of equal quality
and standard, provided said
substitutions conform with applicable
building codes. In the event the premises
are substantially completed prior to or
after February 1, 1998, the lease term
shall commence on the first day of the next
succeeding month (hereinafter called
the "Commencement Date") and shall continue
for a term of 5 years thereafter.
The Tenant shall, however, pay to the
Landlord a sum equal to the pro rata share
of one (1) month's rent for that portion of
the month prior to the Commencement
Date. During said period of partial monthly
occupancy, all other terms and
conditions of this Lease shall apply.
4. RENT
4.1 The Tenant covenants and agrees to pay the annual rent of
$311,800, ("Original Base Rent") in equal
monthly installments in the sum of
$25,983.33, which monthly payments shall be
made promptly in advance on the
first day of each and every month during
the term of the Lease without demand
and without off-set or deduction, together
with such additional rent and other
charges required to be paid by Tenant as
are hereinafter set forth, all of which
charges shall be considered additional
rent.
2
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4.2 Tenant shall pay as additional rent its proportionate share of
the
repairs, maintenance, taxes, insurance and
any other charges allocated amongst
the Tenants as set forth in Paragraph 8.
Tenants Proportionate Share shall be
based on the relationship between the gross
square footage leased to Tenant and
the gross square footage of building
construction completed in the
office/industrial park to date. Tenant's
Proportionate Share shall adjust over
time as additional space is constructed in
the office/industrial park. Tenant
shall also pay additional rent for the
Reserved Space set forth in Paragraph 41
hereof. Notwithstanding this Paragraph 4.2,
the amount set forth in Paragraph
8.1 shall constitute the non-tax portion of
the Common Area Expenses.
5. PARKING AND USE OF EXTERIOR
AREA
Landlord shall allocate 4 parking spaces in the front of
Tenant's
space, for the exclusive use of Tenant and
the Tenant shall have the right to
use all other parking spaces in common with
other tenants of the
office/industrial park. Landlord reserves
the right to allocate any other
parking spaces as 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 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 laboratory, production and office
use, as set forth in the letter from
Hydro Med Sciences attached hereto as
Schedule "B", which use is expressly
subject to all applicable zoning
ordinances, rules and regulations of any
governmental instrumentalities, boards or
bureaus having jurisdiction thereof.
Landlord shall provide the municipal zoning
officer with a copy of Schedule "B"
and obtain a confirmation from him that all
such uses are permitted in the
Leased Premises.
7. REPAIRS AND MAINTENANCE
7.1 Tenant shall generally maintain and repair the Leased
Premises,
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. The Tenant covenants and
agrees that it shall not cause or
permit any waste, damage or disfigurement
to the Leased Premises, or any
3
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overloading of the floors. The Tenant shall
make all repairs to the floor
surface, the electrical and plumbing
systems located within the Leased Premises,
including all ballasts and fluorescent
fixtures. Landlord shall be responsible
for repairs necessary to the roof, exterior
and load-bearing walls, and electric
and plumbing systems to the point where
they enter the Leased Premises, unless
repair is necessitated by any act of Tenant
or its agents. Landlord shall also
be responsible for the repair, replacement
and maintenance of the HVAC system,
except for emergency situations in the
laboratory area where Landlord shall only
be responsible for the cost of parts and
materials. In such emergency
situations, Tenant shall arrange for the
repair and replacement of the HVAC
system and shall separately bill the
Landlord for the cost of parts and
materials.
7.2 The Tenant shall, at its own cost and expense, pay all
utility
meter and service charges, including gas
and electric. The Tenant agrees to
maintain the warehouse area at a minimum
temperature of 45 degrees to prevent
the freezing of domestic water and
sprinkler pipes. Tenant shall not store any
garbage or recyclables outside the Leased
Premises, and shall deliver its
garbage and recyclables to the central
receiving area.
8. COMMON AREA EXPENSES &
MANAGEMENT FEE
8.1 The Tenant shall be responsible for its Proportionate Share of
the
following items all of which shall be known
as Common Area Expenses:
(a) The costs incurred by the Landlord for the expense, maintenance
or
repair of the following:
(1) lawns and
shrubbery:
(2) water and standby
sprinkler charges;
(3) exterior
lighting;
(4) exterior sewer
lines;
(5) exterior utility
lines;
(6) repair and
maintenance of any signs serving the
office/industrial park;
(7) snow removal;
(8) garbage
disposal;
(9) general ground
maintenance;
(10) parking lot, driveways and walkways;
(11) maintenance contract for the roof, HVAC and building site;
4
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(12) pest control;
(13) central station monitoring; and
(14) other maintenance expenses normally incurred by Landlord.
(b) The annual insurance premiums charged to the Landlord for
insurance coverage which insures the
building of which the Leased Premises is a
part. 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. 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 shall pay the cost of
the items set forth in Paragraphs 8.1
(a) and (b) to the Landlord, monthly, as
additional rent, based on the following
schedule:
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<CAPTION>
Year $ amount/sq.ft. of leased
space
----
-------------------------------
<S>
<C>
1998
1.57
1999
1.65
2000
1.73
2001
1.82
2002
1.91
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8.2 Tenant shall also pay, as additional rent, its proportionate
share
of the real estate and personal property
taxes assessed against the Leased
Premises for land, building and
improvements, along with any levy for the
installation of local improvements
affecting the Leased Premises assessed by any
governmental body having jurisdiction
thereof. Landlord shall provide Tenant
with an annual statement indicating the
amount of its monthly tax payment, along
with a copy of the municipal tax bill. The
real estate tax obligation of the
Tenant shall 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. In the
event the building has not been assessed or
Landlord has not received a tax bill
by the Commencement Date, Tenant shall
still be responsible for its
proportionate share of taxes, and shall pay
same, retroactive to the
Commencement Date, within 10 days of
receiving an invoice from Landlord.
8.3 In addition to Common Area Expenses, Landlord shall charge
a
management fee of $.45 per square foot for
the Leased Premises, not to include
the Reserved Space.
5
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8.4 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,
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.
8.5 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 a
party insured on such policy and will
furnish Landlord with a certificate of said
liability insurance prior to the
Commencement Date. The certificate shall
contain a clause that the policy will
not be cancelled except on 10 days written
notice to the Landlord.
8.6 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 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 mutually
waive all right of recovery against each
other, their agents, or employees for
any loss, damage or injury of any nature
whatsoever to property or person for
which either party is required by this
lease to carry insurance.
9. SIGNS
At its sole expense the Tenant shall have the right to install at
the
Leased Premises, at a location to be
approved by the Landlord, only such signs
as are required by Tenant for the purpose
of identifying the Tenant, which signs
are compatible with the design plan for the
complex of buildings known as Cedar
Brook Corporate Center and are approved by
the Landlord. The signs shall comply
with the rules and regulations of the
applicable governmental boards and bureaus
having jurisdiction thereof. The
installation of such signs shall not cause any
structural damage to the building and shall
not be permitted on the roof.
Landlord shall not unreasonably withhold
any approval of signs requested by
Tenant.
6
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10. ASSIGNMENT AND SUBLETTING
10.1 The Tenant may not assign or sublet the Leased Premises or
any
part thereof, unless it shall first advise
the Landlord in writing, by certified
mail, return receipt requested. In such
event, the Landlord shall have 60 days
from receipt of such notice to elect to
re-capture the Leased Premises and
terminate the Lease or to consent to the
assignment of the Lease or the sublease
of the Leased Premises.
10.2 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.
10.3 In connection with any permitted assignment or subletting,
(i)
the Tenant shall pay monthly to the
Landlord one-half 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 one-half of
any such consideration or 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 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. 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 disreputable 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 of which the Leased Premises is a
part 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
7
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the happening of such casualty, using
reasonable diligence ("Total Destruction")
then the term hereby created shall, at the
option of the Landlord, upon written
notice to the Tenant 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 Te
