EXHIBIT 10.10
AGREEMENT
CEDAR BROOK CORPORATE CENTER, L P.
AND
CHRYSALIS DNX TRANSGENIC SCIENCE CORP.
TABLE OF CONTENTS
Section
Page
1 Leased Premises 1 2 Term of Lease 2 3 Construction 2 4 Rent 8 5 Parking and Use of Exterior Area 9 6 Use 10 7 Repairs and Maintenance 10 8 Common Area Expenses, Taxes and Insurance 12 9 Signs 15 10 Assignment and Subletting 15 11 Fire and casualty 17 12 Compliance with Laws, Rules and Regulations 18 13 Inspection by Landlord 20 14 Default by Tenant 21 15 Liability of Tenant for Deficiency 23 16 Notices 23 17 Non-Waiver by Parties 24 18 Right of Tenant to Make Alterations and Improvements 24 19 Non-Liability of Landlord 25 20 Reservation of Easement 25 21 Statement of Acceptance 25 22 Force Majeure 25 23 Statements by Landlord and Tenant 26 24 Condemnation 26 25 Landlord' s Remedies 27 26 Quiet Enjoyment 27 27 Surrender of Premises 27 28 Indemnity 28 29 Bind and Inure 29
30 Inclusions 29 31 Definition of Term " Landlord" 29 32 Covenants of Further Assurances 29 33 Covenants Against Liens 30 34 Subordination 30 35 Exculpation of Landlord 30 36 Net Rent 31 37 Security 31 38 Brokerage 32 39 Late Charges 32 40 Press Releases 32 41 Performance of Work for Tenant Improvements 32 42 Waiver of Jury Trial 33 43 Laws of
New Jersey 33 Schedule A Description Schedule B List of Approved Contractors
AGREEMENT, made as of August , 1998, between CEDAR BROOK 11 CORPORATE CENTER, L.P., 1000 Eastpark Blvd., Cranbury, New Jersey 08512 " Landlord" ; and CHRYSALIS DNX TRANSGENIC SCIENCE CORP., 301 College Road East, Princeton, New Jersey 08540, " Tenant" .
WITNESSETH :
WHEREAS, the Landlord intends to lease to the Tenant a portion of 5 Cedar Brook Drive, Cranbury, New Jersey 08512, (the " Building" ) constituting a portion of the office/industrial park known as CEDAR BROOK CORPORATE CENTER (" Office Park" ); 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
1.1 The leased premises shall consist of approximately 34,018 rentable square feet in the Building, consisting of approximately 5,315 square feet of " Unimproved Space" (as said term is defined in Paragraph 41(a), below; all other leased space being sometimes hereinafter referred to as " Improved Space" ) and 28,703 square feet of Improved Space measured from outside of glass to center line of common wall, of laboratory/office space, as identified on the plan attached hereto and made a part hereof as Schedule " A" (collectively, the " Leased Premises" ), together with all improvements to be constructed thereon by the Landlord for the use of the Tenant, and all improvements, tenements, 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 and any expansion space. Tenant shall also have the right to use all common areas of the Building and the Office. Park in a similar manner as other Office Park tenants. It is acknowledged that 1,495 equate feet of the Unimproved Space is subject to governmental approval of a change in the footprint of the Building.
2. TERM OF LEASE
2.1 The term of the Lease shall be (ten) 10 years, to commence on the Commencement Date and to and on the last day of the month in which occurs the tenth 10th anniversary of the Commencement Date. The term " Commencement Date" shall mean the first day of the next succeeding month following the occurrence of all of the following conditions:
(a) Landlord shall have achieved Substantial Completion (as that term is defined in Paragraph 3.2 hereof); and
(b) Water, gas, and electricity utility service shall be available to the Leased Premises and in working order.
The Commencement Date is projected to be April 15, 1999. Landlord shall advise Tenant two weeks in advance of the anticipated actual Commencement Date. Thereafter, Landlord shall promptly advise Tenant of any changes in such date so as to enable Tenant to coordinate the move of its business. Subject to Paragraph 22, in the event the Commencement Date has not occurred on or before December 1, 1999, Tenant shall have the right to cancel this Lease upon notice to Landlord; provided however, that added on to such " drop dead" date shall be each and every day of " Tenant Delay" as said term is defined in Paragraph 3.1a(iv), below.
3. CONSTRUCTION
3.1 (a) Landlord shall complete the construction of the Leased Premises in a competent and workmanlike manner and in accordance with plans and specifications to be prepared in the following manner.
(i) On or before September 15,1998, Tenant shall furnish Landlord with a complete set of drawings (the " Plans" ) of the machinery, fixtures and equipment to be constructed and other improvements to be installed by Landlord in the Leased Premises in order to ready the same for Tenant' s use and occupancy (the " Tenant Improvements" ). The Plans shall be of sufficient detail to permit Landlord to prepare a construction budget for the Tenant Improvements and shall, at a minimum, include the following information: (i) position layout (dimensioned); (ii) door location and door schedule; (iii) reflected ceiling plan; (iv) telephone and electrical outlets with locations (dimensioned); (v) electrical service requirements; (vi) special electrical air-conditioning and/or
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plumbing work; (vii) mechanicals; (viii) special loading requirements, such as the location of file cabinets and/or special equipment; (ix) openings in the walls or floors; (x) all necessary specifications, sections and details for special equipment and fixtures; and (xi) finishes including, without limitation, carpentry and millwork, floor coverings and wall coverings.
(ii) Within ten business (10) days after Landlord' s receipt of the Plans, Landlord shall prepare a construction budget (the " Construction Budget" ) and submit the same to Tenant and its Architect. Within five (5) business days of receipt of the Construction Budget, Tenant shall indicate its acceptance or rejection thereof by written notice to Landlord. Failure by Tenant to give such written notice within said five (5) business day period shall constitute acceptance of the Construction Budget. In the event Tenant rejects the Construction Budget, Tenant shall advise Landlord in said written notice of the reasons for such rejection, whereupon Tenant and its Architect shall work with Landlord in good faith to revise the Tenant Improvements and/or the Construction Budget so that the Construction Budget may be approved by Landlord and Tenant within five (5) business days after such rejection.
(iii) If Landlord and Tenant are unable to agree upon the Construction Budget, then the following provisions shall govern:
A) Within ten (10) business days after the parties' acknowledgment that they are unable to agree upon the Construction Budget, Tenant shall furnish Landlord with a competitive bid for construction and installation of the Tenant Improvements (the " Competitive Bid" ). The Competitive Bid must be given by one of the contractors named on Schedule B, approved by Landlord and Tenant, attached hereto (the " Approved Contractors" ). If the difference between Construction Budget and the, Competitive Bid (hereinafter the " Price Differential" ) is ten (10%) percent or less, then the Construction Budget proposed by Landlord shall be deemed to be accepted by Tenant, and Landlord shall proceed to perform the Work for the Tenant Improvements. [For example, on a per square foot basis, if the proposed Construction Budget is $240 and the Competitive Bid is $225, then the Construction Budget shall be deemed to be approved at $240 because the Price Differential of $15.00 is less than 10% of $240]. In order to be valid for the purposes of this Lease, any Competitive Bid must have a mark-up of not less than 2% for general conditions, 10% for overhead, and 7% for profit.
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B) If the Price Differential is greater than ten (10%) percent, then Landlord may elect to perform the Tenant Improvements at the price of the Competitive Bid. If Landlord fails to make such election, then Landlord and Tenant shall in good faith attempt to reconcile their differences and agree upon a price; however, if they are unable to do so, then Tenant shall have the right to have the Approved Contractor who submitted the Competitive Bid perform the work for the Tenant Improvements, provided that Price Differential is not greater than 20%. If the Price Differential is greater than 20%, then Landlord shall have the right to cancel this Lease upon notice to Tenant. If the parties agree upon a price and Landlord performs the work, the time involved in going through the Competitive Bid process shall be added to the time for achievement of Substantial Completion.
C) If the Approved Contractor performs the work for the Tenant Improvements, then notwithstanding anything herein contained to the contrary, the provisions of Paragraph 41 shall prevail over all other terms contained in this Lease which are inconsistent therewith.
(iv) In order for Substantial Completion (as defined below) to occur by April 15, 1999, it is essential that the Plans and the Budget be agreed upon no later than October 28, 1998. In the event agreement upon the Plans and/or Budget is delayed beyond October 28, 1998, then the date for Substantial Completion shall be deferred for a period time equal to the period of delay. Furthermore, if such delay is attributable solely to Tenant (" Tenant Delay" ), Substantial Completion of the Leased Premises shall be deemed to be on the date when they would have been ready but for such delay by Tenant. In order for Tenant Delay to have occurred, Landlord must give prompt notice to Tenant of the event(s) giving rise to such Tenant Delay, coupled with an explanation as to the possible duration of the delay.
(v) A set of the Plans shall be initialed by and given to both parties. Thereafter, any changes shall be governed by Paragraph 3.1(c).
(b) Landlord shall allow Tenant One Hundred ($100.00) Dollars per square foot of the Leased Promises toward the construction costs of Tenant' s Improvements for the Improved Space. If the construction costs of Tenant' s Improvements exceed $100.00 per square foot, Landlord shall increase its allowance up to $185.00 per square foot (subject to adjustment in Base Rent as
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hereinafter provided in Paragraph 4.1(a)). Any cost in excess of such allowance shall be the responsibility of Tenant (" Tenant' s Cost Share" ). The Construction Budget shall include Landlord' s mark-up of 2% for general conditions, 10% for overhead, and 7% for profit. Upon approval of the Construction Budget and if the budget exceeds $185.00 per square foot, Tenant shall immediately pay to Landlord, prior to Landlord' s commencement of work on Tenant Improvements, a sum equal to fifty percent (50%) of Tenant' s Cost Share. Upon Substantial Completion of Tenant Improvements, Tenant shall pay to Landlord within ten (10) days after its receipt of an invoice thereafter, a sum equal to the remaining balance of Tenant' s Cost Share. In the event Tenant fails to pay to Landlord, upon approval of the Construction Budget a sum equal to fifty percent (50%) of Tenant' s Cost Share, Landlord shall not be obligated to commence work on the Tenant Improvements for the Leased Premises, and such failure to pay shall not delay the Commencement Date of this Lease or any of Tenant' s obligations hereunder including, without limitation, Tenant' s obligation to pay all rent. In the event that Tenant fails to pay to Landlord, upon Substantial Completion of the Tenant Improvements for the Premises, a sum equal to the remaining cost of Tenant' s Cost Share, such failure shall constitute a default under this Lease; and Tenant shall not be permitted to occupy the Leased Premises; and Landlord shall be entitled to all rights and remedies available hereunder, at law or in equity, or otherwise, which rights shall be cumulative. All sums so owing to Landlord shall constitute Additional Rent (as hereafter defined) and shall be subject to the imposition of late charges as provided in this Lease.
(c) In order to be binding, any change orders to the Plans proposed by either party must be agreed to in writing by both Landlord and Tenant and must set forth (i) any increase or decrease in the cost of the Tenant Improvements for such change, and (ii) any delay in the date for Substantial Completion that may be occasioned thereby. If such change order is executed, and if in fact there is a delay in the date for Substantial Completion as a result thereof, then the date for Substantial Completion shall be deemed to occur on what would have otherwise bee a the date for Substantial Completion had the subject change order not been executed. Any increase in cost resulting from an approved change order which increases the Construction Budget above $185.00 per square foot shall be paid for by Tenant as follows: one half upon the execution of the change order and the balance upon Substantial Completion as provided in Subparagraph 31(b). Any increase in cost resulting from
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an approved change order where the Construction Budget remains below $185.00 per square foot shall result in an adjustment to the Base Rent as provided in Subparagraph 4.1(a), below. In determining the construction costs charged by Landlord for an approved change order, the cost charged by subcontractors, material suppliers and/or governmental authorities shall be marked up for general conditions, overhead and profit as follows:
Change order cost = Landlord' s cost x 1.02 x 1.10 x 1.07.
Landlord may disapprove and reject any change order proposed by Tenant for work which has already been performed and/or for materials or equipment that have already been ordered, unless Tenant agrees to pay to Landlord all cost and expense that Landlord will sustain as a result of the implementation of such proposed change order.
(d) Landlord shall be responsible for constructing the Tenant Improvements to the " Unimproved Space," as said term is hereinafter defined in Paragraph 4.1(a), below, in accordance with plans developed pursuant to the procedures set forth in Subparagraph 3.1(a); but in no event shall Landlord be obligated to improve the Unimproved Space after the fifth (5 th ) anniversary of the Commencement Date. The allowance for Tenant Improvements shall be in accordance with Subparagraph 3.1(b); subject to the following modifications: (i) in no event shall the Construction Budget therefor exceed $100 per square foot; and (ii) the Base Rent of $26.00 per square foot for such Unimproved Space then being improved shall be increased at the rate of six and one half ($0.065) cents for each month that elapses between the Commencement Date and the date that Substantial Completion for such Unimproved Space occurs. Any constriction costs in excess of such $100.00 per square foot allowance shall be the responsibility of Tenant and shall comprise Tenant' s Cost Share, and shall be payable one half upon agreement as to the plans for such Tenant Improvements and the other one half upon completion thereof,
(e) During construction of Tenant Improvements, representatives of each party shall inspect the site no less frequently than every 2 weeks and verify and agree that work in progress has been completed in a manner acceptable to both Landlord and Tenant.
(f) During construction of Tenant Improvements, Tenant shall have access to the Leased Premises in order to install its own equipment provided:
(i) it delivers to Landlord a certificate of insurance for the coverage set forth in Paragraph 8.4; and
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(ii) it shall coordinate its work with the work being performed by Landlord in the manner directed by Landlord so that there shall be no material interference with, delay, or interruption of Landlord' s work; and
(iii) no labor forces are used by Tenant which are incompatible with Landlord' s labor forces, so there are no strikes, picketing, work stoppages or slow downs.
3.2 The Leased Premises shall be considered substantially completed, and rent payments shall commence, upon the issuance of a Temporary or Permanent Certificate of Occupancy, or a Temporary or Permanent Certificate of Acceptance (" CO/CA" ) issued by the governmental instrumentality having jurisdiction thereof (" Substantial Completion" ), provided that the Tenant Improvements installed by Landlord are operable so as to permit Tenant to conduct its business in the ordinary course without material interference. Material interference shall mean by way of example such things as the tissue culture room or the dark room being inoperable; and shall not mean that one or two electrical outlets or hoods are not working. 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. If the date of Substantial Completion occurs on a day other than the first day of a month, 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). During said period of partial monthly occupancy, all other terms and conditions of this Lease shall apply.
3.3 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, pre vided said substitutions conform with applicable building codes and that Tenant gives its consent (which shall not be unreasonably withheld or delayed) to the substitution of any materials or equipment that have a material effect upon its business operations, such as laboratory equipment.
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4. RENT
4.1 Tenant shall pay, as rent for the Leased promises, the following:
(a) During the first five (5) years of the term, an annual base rent per square foot (" Base Rent" ) of Twenty Six and 00/100 ($26.00) Dollars per annum for Improved Space (which includes a $100 per square foot allowance for Tenant Improvements) and Six and 00 /100 ($6.00) Dollars per annum for Unimproved Space for an aggregate Base Rent of Seven Hundred Seventy Eight Thousand One Hundred Sixty Eight and 00/100 ($778,168.00) Dollars. If the allowance for Tenant Improvements exceeds the $100.00 per square foot set forth in Paragraph 3.1(b), then for every $40.00 increase in the allowance up to $150.00 per square foot, the Base Rent shall be increased at the rate of $7.00 per square foot and for every $40.00 increase in the allowance in excess of $150.00 per square foot the Base Rent shall be increased at the rate of $8.00 per square foot. Said rental rate amounts shall be appropriately adjusted if an incremental increase in the allowance is less than $40.00. The parties acknowledge that the Plans will show certain parts of the Leased Premises as not being initially improved (the " Unimproved Space" ). If and when the Unimproved Space becomes the subject of Tenant Improvements, then the annual Base Rent therefor shall he adjusted in accordance with the terms of this Subparagraph (a) and Subparagraph 3.1(d).
(b) During the second five (5) years of the term, the Base Rent for the Improved Space shall be increased by $3.90 per square foot ($26.00 plus a 15% increase); and the Base Rent for the Unimproved Space shall be increased by $.90 per square foot ($6.00 plus a 15% increase): and the Base Rent for Unimproved Space which was converted to Improved Space shall be increased on a proportionate basis at the rate of 3% per year [for example if Substantial Completion of the newly Improved Space occurs on the second anniversary of the Commencement Date, the Base Rent for such Space shall be increased by $2.70 ($26.00 plus a 9% increase, and $6.00 plus a 6% increase.).
(c) All payments assume rentable square footage as set forth in Paragraph 1.1, above, and all payments are based upon a rental rate of $26.00 per square foot for Improved Space and $6.00 per square foot for Unimproved Space during the term, subject to adjustment as set forth in the immediately preceding Subparagraph and in Subparagraph 4.1(a), plus the payment of all Additional Rent as herein provided.
(d) To the extent the actual rentable square footage (recognizing the difference between Improved Space and Unimproved Space) differs from the figures set forth herein, the Base Rent shall be adjusted to reflect the proper amount. At lease thirty (30) days prior to the Commencement
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Date, Landlord' s architect shall certify the amount of rentable square footage comprising the Leased Premises as well as the amount of Improved Space and Unimproved Space.
(e) All payments required to be made by Tenant under this Lease other than pursuant to this Paragraph 4.1 shall be deemed to be and are sometimes referred to in this Lease as " Additional Rent."
(f) The Base Rent shall be payable in advance in equal monthly installments on the first day of each calendar month, and shall be prorated (at a rate of 1 /30th of the monthly rent per day) for any partial month during the term.
4.2 Tenant shall pay as Additional Rent, as detailed in Paragraph 8.1, below, its Proportionate Share of the cost of repairs, maintenance, taxes, insurance and any other charge as herein provided, allocated amongst the tenants. Tenant' s Proportionate Share shall be adjusted as of each first day of January during the term, based on the relationship between the gross square footage leased to Tenant and the gross square footage of building construction completed and occupied or previously occupied in the Office Park as of such first day of January.
4.3 Tenant covenants to pay the Base Rent and Additional 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 herein above set forth, or at such other place as Landlord may, from time to time, designate by notice to Tenant.
4.4 The Base Rent and Additional Rent shall be payable by Tenant without any set-off or deduction of any kind or nature whatsoever and without notice or demand; and all Additional Rent under this Lease shall constitute rent payable hereunder, without regard to the party to whom same may be payable,
5. PARKING AND USE OF EXTERIOR AREA
The Tenant shall have the right to use sixty (60) parking spaces for their employees and visitors on an unallocated and 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
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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 for offices and commercial laboratory research and development, and for no other purpose or use. Animal breeding and testing may involve mice, rats or other rodents and other species of animal, but not primates, dogs and/or cats. Tenant covenants and agrees that all of its operations at the Leased Premises shall be conducted in accordance with all applicable laws, rules and regulations Said uses are expressly subject to all applicable zoning ordinances, rules and regulations of any governmental instrumentalities, boards or bureaus having jurisdiction thereof. Tenant' s manner of use of the Leased Premises shall not interfere with the peaceable and quiet use and enjoyment by other tenants at their respective leased promises 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. To Landlord' s knowledge, Tenant' s proposed use of the Leased Premises does not violate any provision of this Paragraph 6.
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. 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 and HVAC system. 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 Premise, unless the repair is necessitated by any act of Tenant or its agents, in which event the responsibility for payment of the cost of repair shall be that of Tenant.
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(b) Landlord shall guarantee the Tenant Improvements for the first one year of the term of this Lease, provided that with respect to the HVAC system, the manufacturer' s warranty remains in effect. If the manufacturer' s warranty for the HVAC becomes void during said one year due to Tenant' s conduct, then upon such occurrence the Landlord' s guarantee of the HVAC shall automatically expire. Landlord shall assign to Tenant all manufacturers' warranties for Tenant Improvements. In the first instance, Tenant agrees to rely on said warranties in the event of any problem with such covered items. Landlord' s guarantee shall be limited to repair and/or replacement of the subject improvement, as appropriate. In no event shall Landlord be liable for consequential damages that may occur as the result of any defect, deficiency or improper construction or installation of any Tenant Improvement.
7.2 The Tenant shall, at its own cost and expense, pay all utility meter and service charges for utilities used by Tenant, including gas and electric servicing the Leased Premises. Landlord shall have the option to install, at its own cost, a separate water meter in order to monitor Tenant' s water usage. The Tenant agrees to maintain all leased areas at a minimum temperature of 45 degrees Fb0. excluding cold rooms or other rooms designated for a lower temperature, to prevent the freezing of domestic water and sprinkler pipes; provided that Tenant shall have no liability for breach of the foregoing covenant if utility service to the Building has been interrupted, for reasons not caused by Tenant. Tenant shall not store any garbage or recyclables outside the Limed Premises, and shall deliver its garbage and recyclables to the central receiving area on the lo.
7.3 Landlord shall provide the following during the term of this Lease:
(a) Continually cooperate with Public Service Electric and Gas to have Public Service Electric and Gas provide gas and electrical service to the point where it enters the Leased Premises for Tenant' s permitted uses;
(b) Extermination and pest control when necessary;
(c) 24-hour access to the Leased Premises;
(d) Continually cooperate w ...