North Carolina-Durham-6110 Quadrangle Drive Lease - I-40 Properties and Applied Analytical Industries Inc.
NORTH CAROLINA
DURHAM COUNTY
LEASE AGREEMENT
This Lease Agreement is made and entered into as of the 23rd day of
December, 1993, by and between I-40 Properties, a North Carolina Partnership
("Landlord") and Applied Analytical Industries, Inc. (AAI), a Delaware
Corporation, ("Tenant").
WITNESSETH:
WHEREAS, Landlord owns certain real property located at 6110
Quadrangle Drive, Durham, Durham County, North Carolina ("Tract") and the
building and other improvements on the same ("Building") more fully described
in Exhibit A (property description) attached hereto and incorporated herein by
reference; and
WHEREAS, Tenant is desirous of leasing the Building as more fully
described below and Landlord is willing to lease said property to Tenant.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, conditions and agreements herein contained, the parties hereby agree
as follows:
DEMISED PREMISES
Landlord hereby demises and leases unto Tenant those premises located
in the Building and more fully described in Exhibit B (siteplan and space
plans) attached hereto and incorporated herein by reference ("Demised
Premises"). The parties agree that the Demised Premises contain approximately
thirty thousand and thirty one (30,031) rentable square feet and that the
Building contains approximately thirty thousand and thirty one (30,031)
rentable square feet.
1.
USE AND ACCEPTANCE OF DEMISED PREMISES
The Demised Premises shall be used by Tenant for USES WHICH ARE
DIRECTLY OR INDIRECTLY RELATED TO PHARMACEUTICAL PURPOSES. Tenant shall not
vacate or abandon the Demised Premises. TENANT ACCEPTS PREMISES WHICH INCLUDES
31 FUME HOODS, A BIOLOGICAL CLEAN ROOM AND LAB BENCHWORK AND CABINETS AS SHOWN
ON EXHIBIT B-1 AND B-2 (FLOOR PLANS). LANDLORD WARRANTS THAT ALL MECHANICAL
SYSTEMS AND FUME HOODS ARE IN WORKING CONDITION. (*) By accepting possession
of the Demised Premises, Tenant agrees that the Demised Premises are
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(*) During the initial ninety (90) day period of this Lease Agreement.
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in proper condition and are in all respects suitable for Tenant's use except as
otherwise provided in Section 4 below.
2.
TERM OF LEASE
(a) The term of this lease shall commence on January 1, 1994
("Commencement Date"), and shall end on March 31, 2004 ("Termination Date.")
Beginning with the day immediately following the Initial Termination Date,
Tenant shall have the right, if Tenant is not at any time in default hereunder,
to extend the term of the Lease for one (1) consecutive period(s) of sixty (60)
consecutive calendar months upon written notice to Landlord at least 12 months
prior to the expiration of the then expiring initial term. All of the
provisions of this Lease Agreement shall apply to the extended term, including
annual base rent increases of $.75 per rentable square foot above rent per
square foot paid the last month of the initial term and all operating expense
pass-throughs.
(b) If Tenant has not been in default, Tenant will have the right
to cancel this lease AT THE END OF THE 63RD MONTH OF THE LEASE TERM BY
PROVIDING 2 YEARS PRIOR WRITTEN NOTICE TO LANDLORD OF SUCH TERMINATION AND
PAYING LANDLORD $200,000 WITHIN 30 DAYS OF VACATING THE PREMISES. TENANT MAY
ALSO TERMINATE THIS LEASE WITHOUT PENALTY AT THE END OF THE 87TH MONTH OF THE
LEASE TERM BY PROVIDING 2 YEARS ADVANCE WRITTEN NOTICE.
3.
COVENANT TO PAY RENT
(a) Throughout the term hereof and any extensions or any holdover
periods, Tenant shall pay, without demand and without counterclaim, deduction
of set-off, monthly minimum rent as follows, payable on or before the first day
of each calendar month:
<TABLE>
<CAPTION>
PRSF ANNUAL MONTHLY
---- ------ -------
<S> <C> <C> <C> <C>
Jan. 1 - Mar. 31 1994 $ 0 $ 0 $ 0
Apr. 1 - Dec. 31 1994 13.75 412,926.00 34,411.00
Jan. 1 - Dec. 31 1995 14.50 435,450.00 36,287.00
Jan. 1 - Dec. 31 1996 15.25 457,973.00 38,164.00
Jan. 1 - Dec. 31 1997 16.10 483,499.00 40,292.00
Jan. 1 - Dec. 31 1998 17.00 510,527.00 42,544.00
Jan. 1 - Dec. 31 1999 18.00 540,558.00 45,047.00
Jan. 1, 2000 - 18.50 555,574.00 46,298.00
Mar. 31, 2004
</TABLE>
(b) The above minimum rent is net of all costs for janitorial,
water, electrical and interior maintenance, all of which are costs paid for
directly by Tenant.
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(c) Tenant shall furthermore pay any additional rent required
under this lease when due without demand and without counterclaim, deduction or
setoff.
4.
LANDLORD'S AND TENANT'S WORK
Landlord and Tenant shall, at their own respective expense, perform
the additional work described as "Landlord's Work" or "Tenant's Work" in
Exhibit C attached hereto and incorporated herein by reference. It is
expressly understood and agreed that Landlord's obligation with respect to the
construction and finishing of the Demised Premises shall be limited to the
scope of work described as Landlord's Work in Exhibit C and shall in no event
include any work not described in Exhibit C. All Landlord's Work and Tenant's
Work shall constitute improvements to the Demised Premises which shall become
sole property of Landlord and shall remain at the Demised Premises upon
expiration of this Lease Agreement or termination of Tenant's right to
possession of the Demised Premises unless Landlord notifies Tenant otherwise in
writing. Possession of the Demised Premises shall be delivered to Tenant on or
before the Commencement Date, subject to extension for all delays resulting
from causes beyond the reasonable control of Landlord. All work by Tenant or
Landlord shall be performed in a lawful and workmanlike manner in accordance
with all ordinances, building codes or other governing law and in accordance
with plans and specifications prepared by Tenant at Tenant's sole cost and
expense and approved by Landlord, which approval Landlord may grant or withhold
in Landlord's sole discretion. Tenant shall take no action which may result in
a claim of lien against the Tract, Building or Demised Premises and Tenant
shall liquidate and discharge the same as provided in Section 12.
Tenant shall provide Landlord with construction drawings for ALL
MATERIAL improvements and changes it makes to the Premises, and shall provide
Landlord with updated "as built" space plans on a periodic basis.
5.
REAL ESTATE AND OTHER TAXES AND SPECIAL ASSESSMENTS
(a) During the term hereof and any extension or holdover period,
Tenant shall promptly and timely pay as additional rent all ad valorem taxes
LEVIED AGAINST THE TRACT, or assessments levied by any federal, state, county,
or municipal authority on Tenant's personal property in or on the Demised
Premises.
(b) Tenant shall pay as additional rent within thirty (30) days of
billing by Landlord Tenant's share as below defined of the amount of ad valorem
taxes LEVIED AGAINST THE TRACT, or assessments levied from time to time by the
foregoing authorities ON TENANT'S PERSONAL PROPERTY AS STATED IN PARAGRAPH 4
ABOVE. THE FOREGOING
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LIMITATION RELATIVE TO PERSONAL PROPERTY OF TENANT SHALL APPLY TO ASSESSMENTS
ONLY AND SHALL IN NO WAY LIMIT OR APPLY TO AD VALOREM TAXES DURING THE TERM
HEREOF AND ANY EXTENSION OR HOLDOVER PERIOD. Tenant's share as used herein
shall be the difference in Base Year (actual taxes paid in 1993) and actual tax
costs for succeeding calendar years. Landlord may estimate Tenant's pro rata
share of such taxes and assessments and Tenant shall pay such estimated amount
as additional rent with Tenant's payment of monthly minimum rent. In the event
Tenant's actual prorata share exceeds its estimated share, Tenant shall pay the
deficiency to Landlord as additional rent within thirty (30) days of billing by
Landlord. In the event Tenant's actual prorata share is less than its
estimated share, Landlord shall credit the amount thereof to the monthly rents
next becoming due from Tenant.
6.
LANDLORD'S SERVICES
(a) Landlord shall cause to be furnished to the Demised Premises
24 HOURS A DAY 365 DAYS A YEAR the following services: maintenance of casualty
insurance by Landlord on the Building in such form and amount as is
satisfactory to Landlord, water to the extent available, electricity to the
extent available for normal general office use, removal of trash from site
receptacles in accordance with city schedules, normal heating and air
conditioning for the reasonably comfortable use and occupancy of the Demised
Premises (provided heating and cooling to any governmental regulation
prescribing limitations thereon shall be deemed to comply with this service),
Building repair and maintenance as set forth in Section 8 below, and Common
Area Maintenance as set forth in Section 14 below. All costs resulting from
Tenant's usage of water, heating, air conditioning, electricity, trash removal,
or other services shall be paid by Tenant. Tenant shall not install equipment
with unusual demands FOR A PHARMACEUTICAL LABORATORY for any of Landlord's
services without Landlord's prior written consent which Landlord may withhold
if Landlord reasonably determines that such equipment is not suitable for the
Building or may not safely be used therein. Landlord shall not be responsible
for any failure of or interruption in utility or other services to the Building
or Demised Premises.
(b) Tenant shall pay the Landlord as additional rent hereunder
within thirty (30) days of billing by Landlord the increase of Landlord's
Building Operating Expenses over Base Year 1993 as operating expenses are
defined below. BEGINNING CALENDAR YEAR 1995 AND THEREAFTER THE INCREASE OF
LANDLORD'S BUILDING OPERATING EXPENSES (EXCLUDING TAXES) THAT CAN BE PASSED
THROUGH TO TENANT SHALL BE LIMITED TO 105% OF THE INCREASE IN EXPENSES FOR THE
PRIOR CALENDAR YEAR. Landlord may estimate Tenant's Operating Expenses from
time to time and Tenant shall pay such estimated amount as additional rent
within thirty (30) days of billing by Landlord. In the event Landlord
determines that Tenant's actual
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costs exceeds the estimated amount, Tenant shall pay the deficiency as
additional rent within thirty (30) days of billing by Landlord; and if the
estimated amount exceeds Tenant's actual prorata share, Tenant shall be
entitled to a credit for said excess against the next succeeding monthly
payments thereof.
(c) Landlord's "Operating Expenses" shall mean any and all costs and
expenses paid or incurred by Landlord or its agents for any of Landlord's
services specified above or otherwise in this Lease and for all wages of
maintenance personnel, material, and service costs and expenses and any and all
other costs or expenses paid or incurred by Landlord's agents in connection
with the operation, servicing, maintenance, and repair of the Building, HVAC
units, boilers and chillers, Common Areas or Tract in accordance with generally
accepted accounting principles, consistently applied. Provided, however,
Operating Expenses shall exclude: tenant upfitting costs or other concessions
paid or provided to tenants or the Building; INTERIOR MAINTENANCE TO THE
DEMISED PREMISES WHICH IS THE OBLIGATION OF TENANT IN ACCORDANCE WITH (E)
BELOW; leasing commissions; advertising and marketing expenses; capital
improvements to the Building or the Tract; principal and interest on any
indebtedness; depreciation; any ground rent payable by Landlord; special
services provided to tenants which are to be billed directly to such tenants;
and the prorated portion of any of the above components of Operating Expenses
allocated to activities of personnel or services provided for the benefit for
any development or property other than the Building and the Tract. Upon
Tenant's written request, Landlord shall provide Tenant a summary showing
Landlord's calculation of its Operating Expenses from time to time.
(d) Tenant shall pay or cause to be paid all charges for telephone
or any other communication or utility service used in or rendered or supplied
to the Demised Premises throughout the initial and any extended term of this
Lease Agreement or any holdover period which Landlord does not provide above
and Tenant shall indemnify the Landlord and hold Landlord harmless against any
liability or damages (including Landlord's reasonable attorneys' fees and
expenses) on such account.
(e) All maintenance inside the Demised Premises will be Tenant's
responsibility. This includes but is not limited to all lighting replacement,
plumbing repairs, ceiling tile replacement, any interior wall and door repairs
and any maintenance on the bathrooms.
7.
SECURITY DEPOSIT
Tenant shall deposit with Landlord on the signing of this Lease
Agreement the sum of thirty five thousand ($35,000) as security for the
performance of Tenant's obligations under this
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Lease Agreement, including without limitation, the surrender of possession of
the Demised Premises to Landlord as herein provided. If from time to time
Landlord applies any part of said deposit to cure any default of Tenant, Tenant
shall upon demand immediately deposit funds with the Landlord sufficient to
restore the full initial balance of the security deposit. This deposit shall
BE INVESTED IN AN INTEREST BEARING ACCOUNT and, unless the Landlord uses the
same to cure a default of Tenant including restoring the Demised Premises to
the condition that Tenant is required to leave them at the conclusion of the
Term, Landlord shall within thirty (30) days of the termination of the Lease
Agreement refund to Tenant so much of the deposit as Landlord continues to
hold, INCLUDING ANY REMAINING INTEREST ACCRUED.
8.
REPAIR, PRESERVATION AND MAINTENANCE OF THE DEMISED
PREMISES
(a) Landlord at Landlord's sole cost and expense shall keep and
maintain the roof, foundation and the structural soundness of the exterior
walls of the Building and Demised Premises in good repair exclusive of matters
due to Tenant's willful misconduct or gross neglect, which Tenant shall
promptly remedy and repair. Tenant at Tenant's sole risk, cost and expense
shall maintain the remainder of the Demised Premises in good, clean and
sanitary condition and repair. Tenant furthermore shall not injure, deface,
overload or waste the Demised Premises or any part thereof or permit the same
to occur, nor shall Tenant engage in or permit any action which would threaten
to injure, deface, overload or waste the Demised Premises or any part thereof.
Tenant shall not permit the accumulation of waste or refuse matter in or on the
Demised Premises or adjacent thereto.
(b) Tenant shall return the Demised Premises to Landlord at the
end of the initial or any extended term of any holdover period in such
condition as they were in as of the Commencement Date or the date of completion
with respect to any improvements made after the Commencement Date, ordinary
wear and tear only excepted. Tenant shall hold Landlord harmless from any
loss, cost or damage (including Landlord's reasonable attorneys' fees and
expenses) caused by Tenant's failure to comply with Tenant's maintenance
obligations under this Lease Agreement or caused by the maintenance or repairs
made by Tenant or Tenant's agents, servants or employees, or by persons coming
on the Demised Premises at the express or implied invitation of the Tenant.
9.
TENANT'S GENERAL INDEMNITY
Landlord shall not be liable to Tenant, or to any other person or
entity whatsoever, EXCEPT GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT BY
LANDLORD, for any injury, loss or damage to any
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person or property in or upon the Demised Premises or otherwise resulting from
Tenant's use of the Demised Premises or of the Building, the Tract or any
Common Areas designated from time to time by Landlord as below provided.
Tenant furthermore hereby covenants and agrees to assume all liability for or
on account of any injury, loss or damage above described or resulting from any
breach by Tenant or any of Tenant's obligations under this Lease Agreement
(including Landlord's reasonable attorneys' fees and legal expenses), and
Tenant shall save and hold Landlord harmless therefrom except as otherwise
provided in Section 17 of this Lease Agreement EXCEPT WHERE SUCH INJURY, LOSS
OR DAMAGE IS THE RESULT OF GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT BY
LANDLORD.
10.
ASSIGNMENT
Tenant shall neither assign, mortgage, pledge nor otherwise encumber
this Lease Agreement, nor sublet the whole or any part of the Demised Premises
without first obtaining the written consent of Landlord, which consent Landlord
shall not unreasonably withhold. Such consent by Landlord shall not relieve
Tenant of any of Tenant's obligations under this Lease Agreement. For purposes
of this Section, an assignment shall include a transfer of more than a thirty
percent (30%) ownership interest OF VOTING STOCK in Tenant whether all at once
or over time; PROVIDED, HOWEVER, THE FOREGOING PROHIBITION SHALL NOT APPLY TO A
PUBLIC OFFERING OF STOCK BY TENANT.
11.
STOCK IN TRADE AND FIXTURES AND INSURANCE THEREON
Tenant's stock in trade and fixtures and all other property of Tenant
or any third parties in or on the Demised Premises shall be at the sole risk of
Tenant or such third parties. Landlord shall not be liable to Tenant or any
third parties for any damage to personalty or fixtures at the Demised Premises
or Building or Tract for any reason, including but not limited to loss or theft
or damage due to leakage of water, gas, sewage or steam due to electrical or
other utility failure.
12.
ALTERATIONS, ADDITIONS AND SIGNS
(a) Tenant shall not make any alterations or additions to the
Demised Premises, WITH THE EXCEPTION OF THESE SET FORTH IN EXHIBIT C, without
first obtaining the written consent of Landlord, which consent Landlord shall
not unreasonably withhold. All alterations, additions and improvements to the
Demised Premises (whether made by Landlord or Tenant) shall become the property
of the Landlord and shall remain upon and become a part of the Demised Premises
at the termination of this Lease Agreement or Tenant's right to possession of
the Demised Premises unless Landlord otherwise notifies Tenant
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in writing. Any alterations performed by Tenant and approved by Landlord shall
be in accordance with all applicable statutes, ordinances, regulations and
applicable law and shall be performed in a workmanlike manner with materials
and contractors approved by Landlord. Tenant in the event of any construction
work shall procure and maintain in force until completion and acceptance of any
completed improvements all risks builder's risk insurance, including vandalism
and malicious mischief, in form and amount reasonably acceptable to Landlord
covering improvements in place and all material and equipment at the job site
and Tenant shall deliver to Landlord satisfactory proof that worker's
compensation insurance has been procured to cover all persons employed in
connection with the construction. Tenant furthermore shall not in any event do
anything that may create or be the foundation for any lien upon the Demised
Premises or the Building or Tract, or upon any of the improvements on the
foregoing; and should any such lien be created or filed, Tenant at Tenant's own
cost and expense shall liquidate and discharge the same in full within ten (10)
days after the earlier of the notice or filing thereof.
(b) Tenant shall not place, paint or otherwise affix any signs
visible on any of the exterior portions of the Demised Premises or Building
without Landlord's prior written consent, which consent Landlord may grant or
withhold in Landlord's sole discretion, EXCEPT AS PROVIDED IN EXHIBIT E. All
Tenant signs must comply with all applicable municipal or other governmental
rules and regulations.
13.
UNLAWFUL, IMPROPER OR OFFENSIVE USE
Tenant shall not make nor allow to be made any use of the Demised
Premises or Common Areas designated from time to time by Landlord as below
provided which is unlawful or which in Landlord's judgment is improper,
dangerous or offensive. Tenant shall furthermore promptly comply with all
ordinances, regulations, rules or orders of any federal, state, county or
municipal authority applicable to the Demised Premises and Tenant shall not
bring hazardous materials or waste upon the Demised Premises or permit the same
to occur IN VIOLATION OF ANY OF THE FOREGOING. Tenant shall use, store or
dispose of any hazardous MATERIALS PERMITTED AS AFORESAID in a safe and
reasonable manner and in full compliance with all applicable federal, state,
municipal, county and other governmental laws, rules, and regulations. Tenant
shall be responsible for and shall pay all damages and charges to the state or
city government or any other persons or entities of any nuisance made or
suffered during the term of this Lease Agreement on or from the Demised
Premises or any such Common Areas resulting from the activities of Tenant or
its agents, licensees or invitees or otherwise. TENANT SHALL PROVIDE ON AN
ANNUAL BASIS A COPY OF TENANT'S ENVIRONMENTAL IMPACT STATEMENT WITHIN 30 DAYS
AFTER PREPARATION THEREOF.
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14.
COMMON AREAS AND PARKING
Landlord hereby grants Tenant and Tenant's invitees, licensees and
agents the right, in common with other tenants of the Building, to use such
areas of the Tract, including parking areas, as Landlord may designate from
time to time to be common areas (the "Common Areas"). Tenant's use of
available parking shall not exceed the limit specified by Landlord for Tenant
from time to time. Any such usage by Tenant and Tenant's invitees, licensees
and agents of the Common Areas shall be incident to Tenant's business
activities hereunder, shall be lawful and reasonable, and shall be subject to
Landlord's rule making authority per this lease. Landlord shall have exclusive
control over the operation and maintenance of any such Common Areas. Landlord
and its agents' costs and expenses incurred in operating and maintaining the
Common Areas shall be Operating Expense reimbursable to Landlord as provided in
Section 6 above.
15.
DAMAGES TO PREMISES BY FIRE OR CASUALTY
AND TAKING FOR PUBLIC USE
(a) IN THE EVENT THE DEMISED PREMISES IS DAMAGED BY FIRE OR OTHER
CASUALTY, LANDLORD SHALL GIVE TENANT NOTICE OF ITS INTENTION TO REPAIR OR
RESTORE WITHIN 15 DAYS AFTER THE OCCURRENCE OF SUCH DAMAGE. If the Demised
Premises shall be damaged by fire or other casualty, which damage can
reasonably be corrected within ONE HUNDRED FIFTY (150) days and for a sum not
exceeding the insurance proceeds actually received therefor by Landlord,
Landlord shall be entitled to RESTORE AND REPAIR THE DEMISED PREMISES, retain
any excess insurance proceeds, AND TENANT SHALL BE OBLIGATED TO REOCCUPY THE
PREMISES UPON COMPLETION OF SUCH REPAIRS WITH TENANT'S SOLE REMEDY BEING THE
ABATEMENT OF RENT IN THE PORTION OF THE DEMISED PREMISES WHICH WERE NOT
TENANTABLE. In the event the Demised Premises cannot reasonably be so repaired
or replaced, either Landlord or Tenant may terminate this Lease Agreement by
written notice to the other provided, however, that (i) Tenant may not
terminate this Lease Agreement after Landlord has begun to repair or
reconstruct the Demised Premises and (ii) any obligations of the parties
existing under this Lease Agreement at the time of such termination shall be
unaffected by such termination, provided however there shall be an equitable
abatement of rent proportionate to the demised premises damaged by fire or
casualty and (iii) in the event such casualty occurs during the last twelve
(12) calendar months of the term or any extended term, Landlord may elect not
to rebuild and may retain the insurance proceeds received.
(b) In the event the whole of the Demised Premises shall be taken
by any public authority under the power of eminent domain or like power or by a
deed in lieu thereof, this Lease Agreement shall terminate as of the date that
possession of the Demised Premises
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shall be delivered to the appropriate authority. In the event of only a
partial such taking, this Lease Agreement shall not terminate (unless either
party, by written notice to the other party, chooses to terminate the same) but
there shall be an equitable abatement of rent proportionate to the part of the
Demised Premises taken. Any termination of the Lease Agreement shall not
affect the obligations of the parties existing under the Lease Agreement up to
the time of termination. Tenant shall not be eligible to receive any part of
any award or awards from any eminent domain proceeds or deed in lieu thereof,
and Tenant hereby assigns all of its right, title and interest in and to any
such award or awards to Landlord. However, Tenant may, to the extent permitted
by law, and at Tenant's own expense and cost, take independent or related
proceedings against the public authority exercising the power of eminent domain
to pursue and establish any damages Tenant may have incurred for the taking of
Tenant's property and for business interruption or relocation expenses
resulting from the exercise of power of eminent domain (including any deed in
lieu thereof) provided that any such action by Tenant shall not reduce or
adversely affect the amount of Landlord's award.
16.
INSURANCE
(a) Throughout the term of this Lease Agreement and any extended
term or terms, Landlord shall provide fire and extended insurance coverage for
the Demised Premises and the Building for 100% of the replacement value
(defined as actual replacement cost excluding the costs of excavation,
foundation and footings) in a form and amount satisfactory to Landlord as
provided in Section 6 above WHICH INSURANCE SHALL BE OBTAINED FROM A COMPANY
RATED AAA BY BEST & COMPANY AND SHALL BE IN FORM REASONABLY ACCEPTABLE TO
TENANT. The costs of such insurance (as well as the costs of any other
insurance of any nature that Landlord shall choose to obtain for the Building,
Common Areas, Tract or any part thereof) shall be one of Landlord's Operating
Expenses reimbursable to Landlord in accordance with Section 6 above.
Throughout the term of this Lease Agreement and any extended term or hold over
period, Tenant shall provide, at Tenant's sole cost and expense, in addition to
the fire and extended insurance coverage for Tenant's property at the Demised
Premises required by this lease, public liability insurance for the Demised
Premises, including property damage with no less than One Million Dollars
($1,000,000.00) limit per occurrence and death and personal injury coverage
with no less than One Million Dollars ($1,000,000.00) limit per person. Such
policy shall name Landlord as an additional insured. Tenant shall also
maintain all worker's compensation and similar insurance required by applicable
law.
(b) With respect to all policies of insurance required to be
carried by either party under this Lease Agreement, either party
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shall provide the other party with copies of the certificates of such insurance
at or prior to their effective dates. All such policies of either party shall
provide that the same may not be modified or cancelled without at least thirty
(30) days prior written notice to the other party and either party shall
provide the other party with copies of the certificates for all modified,
renewed or new insurance policies on or before their effective dates.
(c) To the extent possible without additional cost, each party
shall obtain, for each policy of insurance, provisions permitting waiver of any
claim against the other party for loss or damage within the scope of the
insurance. Such waiver coverage at an additional premium shall be obtained by
either party upon written notice from the other party seeking the same
accompanied by reimbursement by such other party for the additional expense.
(d) Tenant shall not take any action or permit anything to be done
which will increase the rate of fire or other insurance coverage on the Demised
Premises or any part thereof or adjacent thereto or on the Building or the
Tract. However, in the event the Tenant shall take any such action then, in
addition to any other rights Landlord might have under this Lease Agreement or
otherwise, Landlord may require Tenant, upon demand, separately to pay or
reimburse Landlord as additional rent the amount of any increased insurance
premiums attributable to such action which are in excess of those charged at
the date of this Lease Agreement.
17.
WAIVER OF SUBROGATION
(a) Landlord hereby releases Tenant, but only to the extent of
Landlord's insurance coverage and only to the extent payment is actually
received under such coverage by Landlord, from any liability for loss or damage
covered by any insurance policies which the Landlord carries with respect to
the Demised Premises, Building or Tract or any interest or property therein or
thereon whether or not such insurance is required by this Lease Agreement and
even if the insured peril shall be brought about by the default, negligence or
other action of the Tenant, Tenant's agents, employees or any of them;
provided, this release shall be in effect only with respect to an insured loss
only so long as Landlord's policy applicable to such loss contains a clause to
the effect that this release shall not affect the right of Landlord to recover
under such policy. Landlord does not waive and hereby reserves the right to
secure compensation from Tenant for any uninsured loss, any amounts not paid
because of deductibles and other amounts not paid for any reason whatsoever
OTHER THAN FOR LANDLORD'S FAILURE TO MAINTAIN INSURANCE UNDER SECTION 16.
(b) Tenant hereby releases Landlord, but only to the extent of
Tenant's insurance coverage and only to the extent payment is
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actually received under such coverage, from any liability for loss or damage
covered by any insurance policies which the Tenant carries with respect to the
Demised Premises, Building or Tract or any interest or property therein or
thereon whether or not such insurance is required by this Lease Agreement and
even if the insured peril shall be brought about by the default, negligence or
other action of the Landlord, Landlord's agents, employees or any of them;
provided, this release shall be in effect only with respect to an insured loss
and only so long as Tenant's policy applicable to such loss contains a clause
to the effect that this release shall not affect the right of Tenant to recover
under such policy. Tenant does not waive and hereby reserves the right to
secure compensation from Landlord to which Tenant is otherwise entitled for an
uninsured loss, any amounts not paid because of deductibles and other amounts
not paid for any reason whatsoever. This section does not modify the
limitations of Landlord's liability to Tenant provided under any other sections
of this Lease Agreement.
18.
TENANT'S OBLIGATIONS AT THE END OF TERM AND HOLDING OVER
(a) Tenant shall, at the expiration of the initial or any extended
term of this Lease Agreement or hold over period, peaceably surrender the
Demised Premises to Landlord in the condition required in Section 8 above. At
such time, in addition to any other obligations of Tenant under this Lease
Agreement, Tenant shall leave the Demised Premises broom clean, shall fasten
and lock all doors and windows, shall return to Landlord all keys to the
Demised Premises, and shall notify Landlord of the address to which any balance
of the Security Deposit should be sent.
(b) Any holding over by Tenant at the Demised Premises after the
expiration of the term of this Lease Agreement or any final extended term shall
at most result in a tenancy from month to month, terminable at will of
Landlord. All of the obligations of Tenant under this Lease Agreement shall
apply to any such hold over period, except that the monthly portion of the Base
Rent shall be ONE HUNDRED TWENTY FIVE PERCENT (125%) in amount of each month
that Tenant remains in possession.
(c) Upon vacating the Premises, Tenant must have performed an
environmental audit to ensure that the facility is free of any materials and
residue which might be contaminated with any materials potentially hazardous to
health. UPON VACATING THE PREMISES, TENANT WILL PROVIDE DOCUMENTATION THAT THE
PREMISES ARE FREE OF POTENTIALLY HAZARDOUS MATERIALS TO THE SAME EXTENT AND
LEVEL USING SIMILAR METHODOLOGY (WITH THE SAME DEGREE OF TECHNOLOGY AVAILABLE
ON JANUARY 1, 1994), AS SPECIFIED IN (I) THE GLAXO LETTER OF CERTIFICATION
DATED _______________ CONCERNING BETA LACTAMS, (II) THE SPHINX LETTER OF
CERTIFICATION DATED DECEMBER 21, 1993 CONCERNING BETA LACTAMS, AND (III) THE
DUKE UNIVERSITY ANALYSIS OF
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THE PREMISES DATED DECEMBER 2, 1993. TENANT WILL INCUR ALL COSTS TO FREE
PREMISES OF SUCH MATERIALS IF SUCH DO EXIST UPON LEASE TERMINATION.
19.
REMOVAL OF FIXTURES AND OTHER ITEMS AT END OF LEASE
To the extent consistent with other terms of this Lease Agreement,
Tenant at the expiration of this Lease Agreement shall remove all furniture and
other personal property, including fixtures, trade or otherwise, which Tenant
or any other third parties have installed upon or placed within the Demised
Premises during the term of this Lease Agreement or any extended term or
holdover period and to which Landlord is not entitled if such items can be
removed without material injury to the Demised Premises; provided, however, all
repairs to the Demised Premises required by such removal must be properly and
promptly made by Tenant at Tenant's sole cost and expense incident to such
removal. All property of Tenant remaining at the Demised Premises after the
last day of the term of this Lease Agreement or any extended term or holdover
period shall conclusively be deemed abandoned and may be removed by Landlord at
Tenant's expense or retained by Landlord.
20.
LANDLORD'S ENTRY
Landlord at all reasonable times AND UPON PRIOR NOTICE may enter to
view or inspect the Demised Premises and to make repairs which Landlord may see
fit to make in accordance with Section 9 or otherwise, EXCEPT EMERGENCY REPAIRS
FOR WHICH LANDLORD IS RESPONSIBLE AND FOR WHICH LANDLORD SHALL NOT BE OBLIGATED
TO GIVE PRIOR NOTICE. During a reasonable period not less than six (6) months
preceding the expiration of the initial or any extended term and throughout any
holdover period Tenant will permit Landlord to place and keep upon and about
the Demised Premises a notice that the Demised Premises are for rent or for
sale and during such period Landlord may enter the Demised Premises to show
them to prospective tenants or purchasers. LANDLORD ACKNOWLEDGES THE
CONFIDENTIAL NATURE OF TENANT'S BUSINESS OPERATIONS AND AGREES TO USE ITS BEST
EFFORTS NOT TO DISRUPT ORDINARY BUSINESS OPERATIONS IN EXERCISING ANY OF THE
RIGHTS GRANTED HEREIN.
21.
RULES AND REGULATIONS
Tenant shall comply with the rules and regulations attached as Exhibit
E as Landlord may prescribe from time to time for the use, safety, care and
cleanliness of the Demised Premises, the Building, the Tract, and any Common
Areas; provided the same are applicable equally to all occupants of the
Building.
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<PAGE> 14
22.
QUIET ENJOYMENT
Landlord agrees that if Tenant shall pay the rent as aforesaid and
perform the covenants and agreements herein contained on Tenant's part to be
paid and performed, Tenant shall peaceably hold and enjoy the Demised Premises
without hindrance or interruption by the Landlord or by any other person or
persons claiming through Landlord, DIRECTLY OR INDIRECTLY.
23.
SUBORDINATION AND TENANT'S ESTOPPEL
(a) This Lease Agreement shall be deemed subject and subordinate
to any mortgage or deed of trust which may heretofore or hereafter be executed
by Landlord covering the Demised Premises or any part thereof or the Building
or the Tract and to all renewals, modifications or extensions thereof. The
Landlord's interest in this Lease Agreement may be assigned as security for any
financing now or hereafter required by Landlord. In the event any proceedings
are brought or notice given for foreclosure of any mortgage or deed of trust on
the Demised Premises or the Building or for the exercise of any rights pursuant
to any mortgage, deed of trust or assignment Tenant will attorn to the holder
of the deed of trust, mortgagee, assignee or purchaser at a foreclosure sale,
as the case may be and will recognize such holder, assignee, mortgagee or
purchaser as Landlord, providing such holder, assignee, mortgagee or purchaser
agrees not to disturb Tenant's possession so long as Tenant is not in default
under the terms of this Lease Agreement.
(b) Tenant shall execute and deliver to Landlord at Landlord's
request from time to time, and within TEN (10) BUSINESS days thereof (i)
instruments evidencing the subordination position of this Lease Agreement
and/or (ii) estoppel certificates setting forth the date Tenant accepted
possession of the Demised Premises, that Tenant occupies the Demised Premises,
the termination date of the Lease Agreement, the date to which rent has been
paid, and the amount of monthly rent in effect as of such certification,
whether or not Tenant has any defense to the enforcement of Tenant's lease, any
knowledge Tenant has of any default or breach by Landlord, any other matters
requested by Landlord and that the Lease Agreement is in full force and effect
except as to modifications, agreements or amendments thereto, copies of each of
which including the Lease Agreement shall be attached. Failure by Tenant to
RESPOND TO any such request within such TEN (10) BUSINESS day period shall be
deemed a conclusive admission by Tenant that this Lease Agreement remains in
full force and effect, that Tenant has no defense thereto and that Landlord is
not in breach thereunder.
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<PAGE> 15
24.
CURING DEFAULTS AND LATE CHARGES
(a) If Tenant is required to perform or comply with any agreement
or provision hereof and shall fail to do so within the time provided therefor
(or if no time is provided therefor then within ten (10) days after WRITTEN
NOTICE AND demand for compliance shall have been provided to Tenant) then, in
each such case, upon the expiration of the time provided in this Lease
Agreement (except in the case of emergency situations in which event the time
frame may be shortened as appropriate) Landlord may perform and comply
therewith for the account and at the expense of Tenant; and Tenant upon receipt
of an itemized invoice of the cost and expense thereof, agrees to pay as
additional rent within thirty (30) days of billing by Landlord the cost and
expense incurred by Landlord.
(b) Tenant shall pay a late charge of the lesser of four percent
(4%) of all sums past due more then fifteen (15) days or the maximum amount
allowed by law and interest at the lesser rate of eighteen percent (18%) per
annum on all past due sums from the due date to the date payment is received or
the maximum amount allowed by law.
(c) NOTWITHSTANDING ANYTHING IN THE FOREGOING TO THE CONTRARY, IN
THE EVENT LANDLORD SHALL HAVE GIVEN TENANT WRITTEN NOTICE HEREUNDER TWO (2)
TIMES IN ANY TWELVE (12) CALENDAR MONTH PERIOD DUE TO THE FAILURE OF TENANT TO
MAKE TIMELY PAYMENT HEREUNDER, THEN UPON THE OCCURRENCE OF THE THIRD (3RD)
FAILURE OF TENANT TO MAKE TIMELY PAYMENT WITHIN SUCH TWELVE (12) CALENDAR MONTH
PERIOD, SUCH FAILURE ON THE PART OF TENANT SHALL AUTOMATICALLY CONSTITUTE AN
EVENT OF DEFAULT WITHOUT NECESSITY FOR WRITTEN NOTICE THEREOF FROM LANDLORD.
25.
EVENTS OF DEFAULT
(a) For purposes of this Lease Agreement, the occurrence of any
one or more of the following shall constitute an "Event of Default" hereunder
IF NOT CURED PURSUANT TO PARAGRAPH 24:
(i) Tenant fails to pay any rent or additional rent as and when
due;
(ii) Tenant breaches any other agreement or obligation herein set
forth and shall fail to cure such breach within ten (10) days
after written notice is sent by Landlord;
(iii) The commencement in any court or tribunal of any proceeding,
voluntary or involuntary, to declare Tenant insolvent or
unable to pay its debts as and when due;
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<PAGE> 16
(iv) The assignment by Tenant of all or any part of Tenant's
property or assets for the benefit of creditors;
(v) The levy or execution, attachment, or taking of the leasehold
interest of Tenant HEREUNDER by process of law or otherwise in
satisfaction of any judgment, debt or claim OR THE LEVY,
EXECUTION, ATTACHMENT OR TAKING OF OTHER PROPERTY OR ASSETS OF
TENANT WHICH MATERIALLY ADVERSELY AFFECT TENANT'S ABILITY TO
PERFORM TENANT'S OBLIGATIONS HEREUNDER;
(vi) Tenant files any petition or action for relief under any
creditor's law (including bankruptcy, reorganization, or
similar actions), either in state or federal court;
(vii) Any petition or action for relief under any creditor's law
(including bankruptcy, reorganization, or similar actions),
either in state or federal court is filed against Tenant;
(viii) Tenant conveys away substantially all of Tenant's assets
without adequate consideration; or
(ix) Tenant is dissolved, liquidated, ceases to exist or do
business or becomes insolvent.
(b) The remedies of terminating the term, of terminating
possession or otherwise as provided in this Lease Agreement shall be cumulative
and in addition to and not in limitation of any rights and remedies otherwise
available to the Landlord and the exercise of any rights and remedies on
default shall not preclude the exercise of any other rights and remedies
available to the Landlord at law or in equity or otherwise.
26.
LANDLORD'S RIGHTS ON TERMINATION OF TERM OR POSSESSION
(a) Upon any termination of the initial or extended term hereof,
whether by lapse of time or otherwise, or upon any termination of Tenant's
right to possession or occupancy only, without terminating the term hereof,
Tenant shall surrender possession and vacate the Demised Premises and shall
deliver possession thereof to the Landlord; and Tenant hereby grants to
Landlord full and free license to enter into and upon the Demised Premises in
such event to repossess the Demised Premises as of Landlord's former estate and
to expel or remove Tenant and any others who may be occupying the Demised
Premises and to remove therefrom any and all property, without being guilty of
or liable for trespass, eviction or forcible entry or detainer and without
relinquishing Landlord's right to rent or any other right given to Landlord
hereunder or by operation of the laws of the State of North Carolina. Upon the
occurrence of any Event of Default after
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<PAGE> 17
written notice thereof and the expiration of any applicable time for curing
such Event of Default, Landlord shall be entitled to the rights and remedies
set forth in Paragraph 24 and hereinafter in Paragraph 26.
(b) If Landlord elects to terminate Tenant's right to possession
only as above provided, without terminating the term hereof, Landlord at its
option may enter into the Demised Premises, remove Tenant's property and other
evidences of tenancy and take and hold possession thereof without such entry
and possession terminating the term hereof and without releasing Tenant from
its obligation to pay rents and other monetary obligations herein reserved for
the full term hereof. Upon and after entry into possession without terminating
such obligations, Landlord shall use reasonable efforts to relet the Demised
Premises, or any part for the account of Tenant to any person, firm or
corporation other than Tenant for such reasonable rent, for such time, and upon
such reasonable terms as Landlord in its sole discretion shall determine. If
any rent is to be collected by Landlord upon any such reletting for Tenant's
Account is not sufficient to pay the full amount of rent or any other rent
herein reserved (including additional rents and other charges) and any other
monetary obligations hereunder, and not heretofore paid by Tenant, together
with the reasonable costs of retaking possession and any repairs, alterations,
or redecoration necessary for such reletting, Tenant shall pay to Landlord the
amount of the entire deficiency upon demand, and if the rent to be collected
from such reletting is more than enough to pay the full amount of the rents
reserved hereunder and all of the aforementioned costs, Landlord shall be
entitled to retain such excess. In accordance with the foregoing, Tenant shall
continue to be entitled to make timely payment of the aforesaid amounts due
hereunder as and when such payments are due and payable; provided, however, in
the event Tenant shall fail to make any such payment in a timely manner,
Landlord shall have the right and remedy and be entitled to accelerate the rent
and other monetary obligations herein reserved for the full term hereof,
subject to applicable offset or credit as aforesaid. The obligation of Tenant
to pay rent and other monetary obligations hereunder constitutes evidence of
indebtedness. Notwithstanding any termination of the right to possession
without termination of the term, the Landlord expressly reserves the right, at
any time after the termination of possession, to terminate the term of this
Lease Agreement by notice of such termination to Tenant.
(c) The foregoing rights and remedies of Landlord are in addition
to any other rights and remedies Landlord may have at law or in equity.
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<PAGE> 18
27.
NO WAIVER
The acceptance of rentals and other payments by Landlord for any
period or periods after a default under any of the terms, covenants, and
conditions herein contained to be performed, kept and observed by Tenant shall
not be deemed a waiver of any rights on the part of the Landlord to terminate
this Lease Agreement for any other failure or for the continued failure by
Tenant to so perform, keep or observe its covenants, terms and conditions to be
kept, performed and observe by it. No waiver by Landlord of any of the terms
or conditions of this Lease Agreement shall be construed as a waiver by
Landlord of any subsequent default on the part of Tenant.
28.
NOTICES
All notices, demands and requests to be given hereunder by either
party shall be in writing and must be hand delivered or sent by registered mail
or by certified mail, return receipt requested, and shall be deemed properly
given when hand delivered or sent to the following addresses or at such other
address as either party shall designate by written notice to the other.
*Landlord: 1-40 Properties
P.O. Drawer 850
Burlington, NC 27216-0850
Attn: Mr. Milt Petty
Tenant: AAI
1206 N. 23rd Street
Wilmington, NC 28405
Attn.: Mr. Forrest Waldon
*With a copy to
Landlord's Agent: Vanguard Associates, Inc.
Attn.: Property Manager
Post Office Box 13866
Research Triangle Park, NC 27709-3866
*With a copy to: Mr. James L. Waters
1153 Grove Street
Framingham, MA 01701
*And also with a
copy to: Dr. Frederick D. Sancilio
7845 Masonboro Sound Road
Wilmington, NC 28409
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<PAGE> 19
29.
LEGAL COSTS
Should either party institute any legal proceedings against the other
party for breach of any provision herein contained, and prevail in such action,
the non-prevailing party shall be liable for the reasonable costs and expenses
of the other party, including the other party's reasonable attorney's fees and
expenses.
30.
LIABILITY OF LANDLORD
In the event Landlord shall fail to perform any covenant, term or
condition of this Lease Agreement upon Landlord's part required to be
performed, or if Tenant shall make any claim arising out of Tenant's occupancy
or use of the Demised Premises based upon any action or omission of Landlord,
Tenant covenants and agrees to look solely to Landlord's interest in the
Building for any recovery of money judgment from Landlord from and after the
date of this Lease Agreement. In no event shall the stockholders, partners,
directors, officers, agents or employees of Landlord (either individually or
severally) be personally liable for any such judgment. Furthermore, in no
event shall Tenant be entitled to an award of incidental or consequential
damages arising out of any breach by Landlord including but not limited to any
award for damage or destruction of Tenant's or any other person or entity's
personalty or fixtures located in or about the Demised Premises, moving
expenses, storage expenses, alternative leasing costs and expenses and costs
and expenses of locating and procuring alternative leased space.
31.
ENTIRE AGREEMENT
This Lease Agreement is executed with the express intent and
understanding that it shall supersede any and all prior discussions and/or
agreements between the parties hereto, it being understood and agreed that this
Lease Agreement contains the entire understanding and agreement concerning the
Lease Agreement of the Demised Premises.
32.
AMENDMENTS
Changes and amendments to this Lease Agreement shall be in writing and
signed by the parties affected by such change or amendment.
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<PAGE> 20
33.
CONTROLLING LAW
The Lease Agreement shall be governed by the laws of the State of
North Carolina.
34.
SUCCESSORS AND ASSIGNS
All of the covenants, agreements and conditions of this Lease
Agreement shall accrue to the benefit of and be binding upon the respective
parties hereto and their heirs, successors and assigns.
35.
NO JURY TRIAL
To the extent such waiver is permitted by law, the parties hereby
waive trial by jury in any action brought in connection with this Lease
Agreement or the Demised Premises.
36.
NO AGENCY
The execution of this Lease Agreement or the performance of any act
pursuant thereto shall not be deemed or construed to create between Landlord
and Tenant the relationship of principal or agent, or of a partnership or joint
venture.
37.
SEVERABILITY
In the event any provision of this Lease Agreement shall be determined
to be invalid or unenforceable, the remaining provisions of this Lease
Agreement shall continue in full force and effect.
38.
FORCE MAJEURE
In the event Landlord or Tenant is unable to perform any actions or
obligations required hereunder by virtue or acts of God or other events beyond
Landlord's or Tenant's control, Landlord or Tenant shall not be in breach
hereunder but shall use due diligence to perform such act or obligation when
and to the extent possible. Notwithstanding the foregoing, this shall not
excuse Tenant from the prompt payment of rent or other monies due under the
Lease.
39.
RECORDATION AND LEASE MEMORANDUM
This Lease Agreement may not be recorded without both parties prior
written consent, but each party agrees on request of the other to execute a
memorandum hereof for recording purposes.
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40.
ASSIGNMENT BY LANDLORD
Landlord may sell the Tract, Building or any portion thereof at any
time and this Lease Agreement may be assigned by Landlord. In the event of any
such assignment, the assignee shall be deemed the Landlord hereunder as of the
effective date of any such assignment, Tenant shall attorn to the same, and the
undersigned Landlord shall have no further liability hereunder for matters
arising after the effective date of any such assignment.
41.
DUE AUTHORIZATION
Tenant warrants that all necessary corporate and/or other action has
been taken by Tenant to authorize Tenant's execution of this Lease Agreement.
42.
BROKERS
Landlord and Tenant respectively represent and warrant to each other
that neither of them has consulted or negotiated with any broker or finder with
regard to the Demised Premises except as identified below in this Section 42.
If none, indicate "none." Each such party shall indemnify the other against and
hold the other harmless from any claims for fees or commissions from anyone
with whom the indemnifying party has consulted or negotiated with regard the
Demised Premises not identified herein.
Vanguard Associates, Inc., WHOSE FEE IS THE SOLE RESPONSIBILITY OF LANDLORD.
43.
RELOCATION OF DEMISED PREMISES.
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IN WITNESS WHEREOF, Landlord and Tenant have executed and sealed this
Lease Agreement in triplicate originals, all as of the day and year first above
written.
LANDLORD:
I-40 PROPERTIES (seal)
By: /s/ Maurice Koury (seal)
--------------------------
General Partner
TENANT:
APPLIED ANALYTICAL INDUSTRIES,
INC., a Delaware corporation (seal)
ATTEST: By: /s/ Frederick D. Sancilio
--------------------------------
Authorized Signatory
/s/ R. Forrest Waldon
---------------------
(CORPORATE SEAL)
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<PAGE> 23
STATE OF NORTH CAROLINA
COUNTY OF NEW HANOVER
I, Jonna Bradoc, a Notary Public for said County and State do hereby certify
that R. Forrest Waldon, Secretary of Applied Analytical Industries, Inc.,
personally appeared before me this day and acknowledged the due execution of
the foregoing instrument.
Witness my hand and official seal, this the 23rd day of December,
1993.
/s/ Jonna Bradoc
-------------------
Notary Public
My commission expires 8/27/97
<PAGE> 24
STATE OF NORTH CAROLINA
COUNTY OF ALAMANCE
I, Susan B. Stout, a Notary Public for said County and State do hereby certify
that Maurice J. Koury, personally appeared before me this day and acknowledged
the due execution of the foregoing instrument.
Witness my hand and official seal, this the 23rd day of December,
1993.
/s/ Susan B. Stout
---------------------
Notary Public
My commission expires 7/26/94