<PAGE>
Exhibit 10.1
SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT ("Sublease") is made and entered into as of the
25th day of July, 2000 by and between TREGA BIOSCIENCES, INC., a Delaware
corporation ("Sublandlord") and NEUROVIR THERAPEUTICS, INC., a Delaware
corporation ("Subtenant").
WHEREAS, AID ASSOCIATION FOR LUTHERANS, a Wisconsin corporation, as
landlord ("Landlord"), and SUBLANDLORD, as tenant ("Tenant"), entered into a
lease dated September 24, 1997 ("Master Lease") whereby Landlord leased to
Tenant those certain premises ("Master Premises") consisting of the entire
building (and containing 71,510 rentable square feet) located at 9880 Campus
Point Drive, San Diego, California 92121 (the "Building"), as more particularly
described in the Master Lease, upon the terms and conditions contained therein.
All capitalized terms used herein shall have the same meaning ascribed to them
in the Master Lease unless otherwise defined herein. A true, correct and
complete copy of the Master Lease is attached hereto as Exhibit "A" and made a
part hereof.
WHEREAS, Sublandlord and Subtenant are desirous of entering into a
sublease of that portion of the Master Premises shown cross-hatched in black on
the demising plan annexed hereto as Exhibit "B" and made a part hereof
("Sublease Premises") on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto mutually
covenant and agree as follows:
1. DEMISE.
Sublandlord hereby subleases and demises to Subtenant and Subtenant
hereby hires and subleases from Sublandlord the Sublease Premises agreed to
contain 16,723 rentable square feet upon and subject to the terms, covenants and
conditions hereinafter set forth.
2. LEASE TERM.
(a) LEASE TERM. The term of this Sublease ("Term") shall
be for five (5) years commencing on the earlier of (i) July 25, 2000, or (ii)
the date upon which Subtenant, or any person occupying any of the Sublease
Premises with Subtenant's permission, commences business operations from the
Sublease Premises ("Sublease Commencement Date") and ending, unless sooner
terminated as provided herein, on the last day of the month in which the fifth
(5th) anniversary of the Sublease Commencement Date occurs ("Sublease Expiration
Date"); provided, however, in no event shall the Sublease Commencement Date
occur prior to the receipt of Landlord's consent in accordance with Section 16
below.
(b) OPTION TO EXTEND.
(i) OPTION. Tenant shall have one (1) option to
extend the Sublease Term (the "Renewal Option"), on all the provisions
contained in this Sublease except as
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Exhibit 10.1
to the Base Rental, subject to the terms herein. The Renewal Option
shall be for an additional thirty (30) month period ("Option Term")
after the expiration of the initial Sublease Term.
If Subtenant elects to exercise the Renewal Option, such
Renewal Option shall be exercised by Subtenant giving written notice of
its irrevocable exercise of the Renewal Option (the "Option Notice") to
Sublandlord at least nine (9) months, but not more than twelve (12)
months, before the expiration of the initial Sublease Term. If such
Option Notice is not sent during such three (3) month period, such
Renewal Option shall be null and void and in no event shall Subtenant
have any right to extend the initial Sublease Term or renew the
Sublease beyond the initial Sublease Term as provided herein. Subtenant
agrees that time is of the essence of this provision.
(ii) OPTION PERSONAL. The Renewal Option is
personal to Subtenant and may not be exercised, voluntarily or
involuntarily, by any person or entity other than Subtenant or an
affiliate of Subtenant ("Affiliate"). For purposes hereof, an Affiliate
shall include an entity which controls, is controlled by or is in
common control with Subtenant, or an entity with which Subtenant is
merged or to which Subtenant sells substantially all of its assets.
Under no circumstances whatsoever shall the assignee under a complete
or partial assignment of the Sublease (other than an Affiliate), or a
sub-subtenant under a sub-sublease of the Sublease Premises, have any
right to exercise the Renewal Option granted herein. The Renewal Option
is not assignable, voluntarily or involuntarily, separate and apart
from the Sublease. If the Sublease or Subtenant's right to possession
of the Sublease Premises shall terminate in any manner, or if Subtenant
shall have assigned the sublease or sub-sublet more than twenty percent
(20%) of the Sublease Premises on or prior to the expiration of the
initial Sublease Term to other than an Affiliate, then immediately upon
such termination, assignment or sub-sublease, the Renewal Option herein
granted shall simultaneously terminate and become null and void and
neither Subtenant, nor any assignee or sub-sublessee, shall have the
right to extend the Sublease Term beyond the initial Sublease Term
pursuant to the terms of the Renewal Option.
(iii) EFFECT OF DEFAULT ON RENEWAL OPTION. At
Sublandlord's election, Subtenant shall have no right to exercise the
Renewal Option and extend the Sublease Term beyond the initial Sublease
Term, as appropriate, pursuant to the terms herein if, at the time
Subtenant delivers Subtenant's Option Notice or any time prior to the
expiration of the initial Sublease Term, a default has occurred and is
continuing after applicable notice and grace period under any of the
provisions of the Sublease.
(iv) BASE RENTAL DURING THE OPTION TERM. All Rent
payable during the Option Term shall be payable in the same manner and
under the same terms and conditions as Rent is paid during the initial
Sublease Term.
Subtenant shall pay to Sublandlord, as Base Rental for the
Sublease Premises during the Option Term, the Fair Market Rental Rate
(as hereinafter defined). "Fair Market Rental Rate" shall mean the rate
being charged to new subtenants in the Building as of the expiration of
the initial Sublease Term (or if necessary, because no such new
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<PAGE>
Exhibit 10.1
subtenants exist, in other comparable buildings in the San Diego
submarket area ("Comparable Buildings")), for space of equivalent
quality, size and location in the Building or Comparable Buildings, as
appropriate (or adjusting the rental rate as appropriate for
differences therein), but disregarding any so-called "concessions" then
being offered to prospective new subtenants in the Building or
Comparable Buildings.
Sublandlord shall determine the Fair Market Rental Rate by
using its good faith judgment. Sublandlord shall use its best efforts
to provide written notice of such amount within thirty (30) days after
Subtenant sends the Option Notice to Sublandlord exercising the Renewal
Option. Subtenant shall have fifteen (15) business days (the
"Subtenant's Review Period") after receipt of Sublandlord's notice of
the Fair Market Rental Rate within which to accept such rental or to
reasonably object thereto in writing. In the event Subtenant objects,
Sublandlord and Subtenant shall attempt to agree upon such Fair Market
Rental Rate, using their best good faith efforts. If Sublandlord and
Subtenant fail to reach agreement within ten (10) business days
following Subtenant's Review Period (the "Outside Agreement Date"),
then each party shall place in a separate sealed envelope their final
proposal as to Fair Market Rental Rate and such determination shall be
submitted to arbitration in accordance with subsections (A) through (E)
below. Failure of Subtenant to so elect in writing within Subtenant's
Review Period shall conclusively be deemed its approval of the Fair
Market Rental Rate determined by Sublandlord. In the event that
Sublandlord fails to timely generate the initial written notice of
Sublandlord's opinion of the Fair Market Rental Rate which triggers the
negotiation period of this provision, then Subtenant may commence such
negotiations by providing the initial notice, in which event
Sublandlord shall have fifteen (15) days ("Sublandlord's Review
Period") after receipt of Subtenant's notice of the proposed Fair
Market Rental Rate within which to accept such rental. In the event
Sublandlord does not affirmatively in writing consent to Subtenant's
proposed Fair Market Rental Rate, such proposed rental shall be deemed
rejected and Sublandlord and Subtenant shall attempt in good faith to
agree upon such Fair Market Rental Rate, using their best good faith
efforts. If Sublandlord and Subtenant fail to reach agreement within
fifteen (15) days following Sublandlord's Review Period (which shall
be, in such event, the "Outside Agreement Date" in lieu of the above
definition of such date), then each party shall place in a separate
sealed envelope their final proposal as to Fair Market Rental Rate and
such determination shall be submitted to arbitration in accordance with
subsections (A) through (E) below.
(A) Sublandlord and Subtenant shall meet with
each other within five (5) business days of the Outside
Agreement Date and exchange the sealed envelopes and then open
such envelopes in each other's presence. If Sublandlord and
Subtenant do not mutually agree upon the Fair Market Rental
Rate within one (1) business day of the exchange and opening
of envelopes, then, within ten (10) business days of the
exchange and opening of envelopes Sublandlord and Subtenant
shall agree upon and jointly appoint a single arbitrator who
shall by profession be a real estate broker who shall have
been active over the five (5) year period ending on the date
of such appointment in the leasing of comparable commercial
properties in the vicinity of the Building. Neither
Sublandlord nor Subtenant shall consult with such broker as to
his or her opinion as to Fair Market
3
<PAGE>
Exhibit 10.1
Rental Rate prior to the appointment. The determination of the
arbitrator shall be limited solely to the issue of whether
Sublandlord's or Subtenant's submitted Fair Market Rental Rate
for the Sublease Premises is the closer to the actual Fair
Market Rental Rate for the Sublease Premises as determined by
the arbitrator, taking into account the requirements of this
Section regarding same. Such arbitrator may hold such hearings
and require such briefs as the arbitrator, in his or her sole
discretion, determines is necessary.
(B) The arbitrator shall, within thirty (30)
days of his or her appointment, reach a decision as to whether
the parties shall use Sublandlord's or Subtenant's submitted
Fair Market Rental Rate, and shall notify Sublandlord and
Subtenant thereof.
(C) The decision of the arbitrator shall be
binding upon Sublandlord and Subtenant.
(D) If Sublandlord and Subtenant fail to agree
upon and appoint an arbitrator, then the appointment of the
arbitrator shall be made by the Presiding Judge of the San
Diego Superior Court, or, if he or she refuses to act, by any
judge having jurisdiction over the parties.
(E) The cost of arbitration shall be paid by
Sublandlord and Subtenant equally.
(v) DOCUMENTATION. Sublandlord and Subtenant
shall execute and deliver appropriate documentation to evidence any
renewal of the Sublease pursuant to the Renewal Option and the terms
and conditions of the Sublease during the Option Term.
3. USE.
The Sublease Premises shall be used and occupied by Subtenant for the
uses permitted under and in compliance with Section 10 of the Master Lease and
for no other purpose.
4. SUBRENTAL.
(a) BASE RENTAL. Beginning with the Sublease Commencement
Date and thereafter during the Term of this Sublease and ending on the Sublease
Expiration Date, Subtenant shall pay to Sublandlord the following monthly
installments of base rent ("Base Rental"):
<TABLE>
<S> <C>
Year 1 $31,940.93 per month/$383,291.16 per annum (calculated at
the rate of $1.91 per rentable square foot per month)
Year 2 $44,148.72 per month/$529,784.64 per annum (calculated at
the rate of $2.64 per rentable square foot per month)
</TABLE>
4
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Exhibit 10.1
<TABLE>
<S> <C>
Year 3 $45,653.79 per month/$547,845.48 per annum (calculated at
the rate of $2.73 per rentable square foot per month)
Year 4 $47,326.09 per month/$567,913.08 per annum (calculated at
the rate of $2.83 per rentable square foot per month)
Year 5 $48,831.16 per month/$585,973.92 per annum (calculated at
the rate of $2.92 per rentable square foot per month)
</TABLE>
The first monthly installment of Base Rental shall be paid by Subtenant
upon the execution of this Sublease. Base Rental and additional rent (including
without limitation, late fees) shall hereinafter be collectively referred to as
"Rent."
(b) PRORATIONS. If the Sublease Commencement Date is not
the first (1st) day of a month, or if the Sublease Expiration Date is not the
last day of a month, a prorated installment of monthly Base Rental based on a
thirty (30) day month shall be paid for the fractional month during which the
Term commenced or terminated.
(c) ADDITIONAL RENT. Beginning with the Sublease
Commencement Date and continuing to the Sublease Expiration Date, Subtenant
shall pay to Sublandlord as additional rent for this subletting all special or
after-hours cleaning, heating, ventilating, air-conditioning, elevator and other
Building charges incurred at the request of Subtenant.
(d) OPERATING EXPENSES. Beginning with the Sublease
Commencement Date and thereafter during the Term of this Sublease, Subtenant
shall pay to Sublandlord as additional rent for this subletting twenty-three and
39/100ths percent (23.39%) ("Subtenant's Share") of the amount that Sublandlord,
as Tenant, has to pay Landlord, as Tenant's Pro Rata Share of Building Operating
Expenses and Tenant's Pro Rata Share of Project Operating Expenses pursuant to
Sections 5.2 and 7 of the Master Lease (including, without limitation, any and
all costs incurred by Landlord with respect to the internal facility support and
maintenance); provided, however, in no event shall Subtenant's Share of Building
Operating Expenses and Project Operating Expenses increase by more than 3.5% per
year on a compounded and cumulative basis per annum. Subtenant's Share is a
percentage which reflects the ratio of the rentable square feet in the Sublease
Premises to the rentable square feet in the Master Premises. Current estimate of
Building Operating Expenses and Project Operating Expenses for the first twelve
(12) months of the Sublease Term is $.21 per rentable square foot per month.
(e) PAYMENT OF RENT. Payment of Rent Except as otherwise
specifically provided in this Sublease, Rent shall be payable in lawful money
without demand, and without offset, counterclaim, or setoff in monthly
installments, in advance, on the first day of each and every month during the
Term of this Sublease. All of said Rent is to be paid to Sublandlord at its
office at the address set forth in Section 13 herein, or at such other place or
to such agent and at such place as Sublandlord may designate by notice to
Subtenant. Any additional rent payable on account of items which are not payable
monthly by Sublandlord to Landlord under the Master
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<PAGE>
Exhibit 10.1
Lease is to be paid to Sublandlord as and when such items are payable by
Sublandlord to Landlord under the Master Lease unless a different time for
payment is elsewhere stated herein. Sublandlord shall provide Subtenant with
copies of any statements or invoices received by Sublandlord from Landlord
pursuant to the terms of the Master Lease with respect to which Subtenant shall
be responsible for payment in whole or in part, as herein provided.
5. SECURITY DEPOSIT.
Concurrently with the execution of this Sublease, Subtenant shall
deposit with Sublandlord the sum of Ninety-Nine Thousand Eight Hundred
Thirty-Six and 31/100 Dollars ($99,836.31) ("Deposit"), which shall be held by
Sublandlord as security for the full and faithful performance by Subtenant of
its covenants and obligations under this Sublease. The Deposit is not an advance
Rent deposit, an advance payment of any other kind, or a measure of
Sublandlord's damage in case of Subtenant's default. If Subtenant defaults in
the full and timely performance of any or all of Subtenant's covenants and
obligations set forth in this Sublease, then Sublandlord may, from time to time,
without waiving any other remedy available to Sublandlord, use the Deposit, or
any portion of it, to the extent necessary to cure or remedy the default or to
compensate Sublandlord for all or a part of the damages sustained by Sublandlord
resulting from Subtenant's default. Subtenant shall immediately pay to
Sublandlord within five (5) days following receipt of demand, the amount so
applied in order to restore the Deposit to its original amount, and Subtenant's
failure to immediately do so shall constitute a default under this Sublease. If
Subtenant is not in default with respect to the covenants and obligations set
forth in this Sublease at the expiration or earlier termination of the Sublease,
Sublandlord shall return the Deposit to Subtenant promptly after the expiration
or earlier termination of this Sublease. Sublandlord's obligations with respect
to the Deposit are those of a debtor and not a trustee. Sublandlord shall not be
required to maintain the Deposit separate and apart from Sublandlord's general
or other funds and Sublandlord may commingle the Deposit with any of
Sublandlord's general or other funds. Subtenant shall not at any time be
entitled to interest on the Deposit.
6. SIGNAGE. Subtenant is granted the right, at or about the
inception of the Term of this Sublease, to install a monument signage, lobby
signage and one directional sign identifying Subtenant, subject to Landlord's
and Sublandlord's prior written approval, which approval shall not be
unreasonably withheld, delayed or conditioned. Except for the foregoing,
Subtenant shall have no right to maintain Subtenant identification signs in any
other location in, on, or about the Sublease Premises. The size, design, color
and other physical aspects of all such permitted signs shall also be subject to
Landlord's and Sublandlord's prior written approval, which approval shall not be
unreasonably withheld, delayed or conditioned and shall also be subject to any
covenants, conditions or restrictions encumbering the Sublease Premises and any
applicable municipal or other governmental permits and approvals. The cost of
all such signs, including the installation, maintenance and removal thereof,
shall be at Subtenant's sole cost and expense. If Subtenant fails to maintain
its signs within a reasonable period of time after receipt of notice from
Sublandlord, or if Subtenant fails to remove same upon the expiration or earlier
termination of this Sublease and repair any damage caused by such removal,
Sublandlord may do so at Subtenant's expense and Subtenant shall reimburse
Sublandlord for all actual costs incurred by Sublandlord to effect such removal.
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Exhibit 10.1
7. PARKING.
Subtenant shall have the right, during the Term of this Sublease, to
non-exclusive access to and use of the parking facilities within the Project as
set forth in Section 14.2 of the Master Lease. All such parking privileges shall
be subject to the terms and conditions set forth in the Master Lease.
8. INCORPORATION OF TERMS OF MASTER LEASE.
(a) This Sublease is subject and subordinate to the
Master Lease. Subject to the modifications set forth in this Sublease, the terms
of the Master Lease are incorporated herein by reference, and shall, as between
Sublandlord and Subtenant (as if they were Landlord and Tenant, respectively,
under the Master Lease) constitute the terms of this Sublease except to the
extent that they are inapplicable to, inconsistent with, or modified by, the
terms of this Sublease. In the event of any inconsistencies between the terms
and provisions of the Master Lease and the terms and provisions of this
Sublease, the terms and provisions of this Sublease shall govern. Subtenant
acknowledges that it has reviewed the Master Lease and is familiar with the
terms and conditions thereof.
(b) For the purposes of incorporation herein, the terms
of the Master Lease are subject to the following additional modifications:
(i) In all provisions of the Master Lease (under
the terms thereof and without regard to modifications thereof for
purposes of incorporation into this Sublease) requiring the approval or
consent of Landlord, Subtenant shall be required to obtain the approval
or consent of both Sublandlord and Landlord; provided, however, that in
any instance in which the approval or consent of Landlord may not be
unreasonably withheld, conditioned or delayed, the same limitation
shall apply to the approval or consent of Sublandlord.
(ii) In all provisions of the Master Lease
requiring Tenant to submit, exhibit to, supply or provide Landlord with
evidence, certificates, or any other matter or thing, Subtenant shall
be required to submit, exhibit to, supply or provide, as the case may
be, the same to both Landlord and Sublandlord. In any such instance,
Sublandlord shall determine if such evidence, certificate or other
matter or thing shall be satisfactory.
(iii) Sublandlord shall have no obligation to
restore or rebuild any portion of the Sublease Premises after any
destruction or taking by eminent domain.
(c) The following provisions of the Master Lease are
specifically excluded: Sections 2, 4, 5.1, 6, 8, 9.1, 9.5, 11, 24, 38, 40,
Exhibit B and Exhibit C.
(d) Sublandlord shall not modify or amend the Master
Lease in any way which would materially adversely affect Subtenant's use of,
access to or quiet enjoyment of the Sublease Premises, or which would materially
increase Subtenant's obligations, or materially diminish Subtenant's rights,
under the Sublease without Subtenant's consent, which consent Subtenant may
withhold in its sole and absolute discretion.
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<PAGE>
Exhibit 10.1
9. SUBTENANT'S OBLIGATIONS. Subtenant covenants and agrees that
all obligations of Sublandlord under the Master Lease shall be done or performed
by Subtenant with respect to the Sublease Premises, except as otherwise provided
by this Sublease, and Subtenant's obligations shall run to Sublandlord and
Landlord as Sublandlord may reasonably determine to be appropriate or be
required by the respective interests of Sublandlord and Landlord. Subtenant
agrees to indemnify Sublandlord, and hold it harmless, from and against any and
all claims, damages, losses, expenses and liabilities (including reasonable
attorneys' fees) incurred as a result of the non-performance, non-observance or
non-payment of any of Sublandlord's obligations under the Master Lease which, as
a result of this Sublease, became an obligation of Subtenant. If Subtenant makes
any payment to Sublandlord pursuant to this indemnity, Subtenant shall be
subrogated to the rights of Sublandlord concerning said payment. Subtenant shall
not do, nor permit to be done, any act or thing which is, or with notice or the
passage of time would be, a default under this Sublease or the Master Lease.
10. SUBLANDLORD'S OBLIGATIONS. Sublandlord agrees that Subtenant
shall be entitled to receive all services and repairs to be provided by Landlord
to Sublandlord under the Master Lease. Subtenant shall not, under any
circumstances, seek nor require Sublandlord to perform any of such services, nor
shall Subtenant make any claim upon Sublandlord for any damages which may arise
by reason of Landlord's default under the Master Lease, unless Sublandlord shall
have failed to comply with the provisions hereof. Any condition resulting from a
default by Landlord shall not constitute as between Sublandlord and Subtenant an
eviction, actual or constructive, of Subtenant and no such default shall excuse
Subtenant from the performance or observance of any of its obligations to be
performed or observed under this Sublease, or entitle Subtenant to receive any
reduction in or abatement of the Rent provided for in this Sublease, unless
Sublandlord's performance or observance is so excused or Sublandlord is entitled
to such a reduction or abatement. In furtherance of the foregoing, Subtenant
does hereby waive any cause of action and any right to bring any action against
Sublandlord by reason of any act or omission of Landlord under the Master Lease.
Sublandlord covenants and agrees with Subtenant that Sublandlord will pay all
fixed rent and additional rent payable by Sublandlord pursuant to the Master
Lease to the extent that failure to perform the same would adversely affect
Subtenant's use or occupancy of the Sublease Premises. Sublandlord further
covenants and agrees with Subtenant that Sublandlord shall perform its other
obligations under the Master Lease (except with respect to the Sublease Premise
which shall become the obligation of Subtenant pursuant to the terms and
conditions of this Sublease), remedy any default by Sublandlord under the Master
Lease and enforce its rights under the Master Lease.
In the event Sublandlord is prevented from performing any of its
obligations under this Sublease by a breach by Landlord of a term of the Master
Lease, then Sublandlord's sole obligation in regard to its obligation under this
Sublease shall be to use reasonable efforts in diligently pursuing the
correction or cure by Landlord of Landlord's breach.
11. DEFAULT BY SUBTENANT. In the event Subtenant shall be in
default of any covenant of, or shall fail to honor any obligation under this
Sublease, in each case after applicable notice and grace period as set forth in
the Master Lease, Sublandlord shall have available to it against Subtenant all
of the remedies available (a) to Landlord under the Master Lease in the event of
a similar default on the part of Sublandlord thereunder or (b) at law.
8
<PAGE>
Exhibit 10.1
12. QUIET ENJOYMENT. So long as Subtenant pays all of the Rent due
hereunder and performs all of Subtenant's other obligations hereunder,
Sublandlord shall not do anything or permit anything to be done to affect
Subtenant's right to peaceably and quietly have, hold and enjoy the Sublease
Premises.
13. NOTICES. Anything contained in any provision of this Sublease
to the contrary notwithstanding, Subtenant agrees, with respect to the Sublease
Premises, to remedy any default in this Sublease or the Master Lease which is
Subtenant's obligation to cure, within the period allowed to Sublandlord under
the Master Lease, even if such time period is shorter than the period otherwise
allowed therein due to the fact that notice of default from Sublandlord to
Subtenant is given after the corresponding notice of default from Landlord to
Sublandlord. Sublandlord agrees to forward to Subtenant, not later than one (1)
day after receipt thereof by Sublandlord, a copy of each notice of default
received by Sublandlord in its capacity as Tenant under the Master Lease.
Subtenant agrees to forward to Sublandlord, promptly upon receipt thereof,
copies of any notices received by Subtenant from Landlord or from any
governmental authorities. All notices, demands and requests shall be in writing
and shall be sent either by hand delivery or by a nationally recognized
overnight courier service (e.g., Federal Express), in either case return receipt
requested, to the address of the appropriate party. Notices, demands and
requests so sent shall be deemed given when the same are received. Notices to
Sublandlord shall be sent to the attention of:
9880 Campus Point Drive
San Diego, California 92121
Attn: Mr. Jerry Wills
with a copy to:
Pillsbury Madison & Sutro LLP
725 South Figueroa Street, Suite 1100
Los Angeles, California 90017
Attn: Jackie Park, Esq.
Notices to Subtenant shall be sent to the attention of:
9880 Campus Point Drive
San Diego, California 92121
Attn: Mr. Jeffrey Ostrove, Ph.D.
with a copy to:
Mintz, Levin
One Financial Center
Boston, MA 02111
Attn: Lewis J. Geffen, Esq.
14. BROKER. Sublandlord and Subtenant represent and warrant to
each other that, with the exception of Irving Hughes ("Broker"), no brokers were
involved in connection with the negotiation or consummation of this Sublease.
Sublandlord agrees to pay the commission of the
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<PAGE>
Exhibit 10.1
Broker pursuant to a separate agreement. Each party agrees to indemnify the
other, and hold it harmless, from and against any and all claims, damages,
losses, expenses and liabilities (including reasonable attorneys' fees) incurred
by said party as a result of a breach of this representation and warranty by the
other party.
15. CONDITION OF PREMISES.
(a) IMPROVEMENTS. Pursuant to the full execution of this
Sublease by the parties hereto and the receipt of Landlord's consent to this
Sublease, Sublandlord shall at its sole cost and expense make the following
improvements to the Sublease Premises (collectively, "Improvements").
(i) Demise the Sublease Premises from the
remainder of the Master Premises;
(ii) Install a card reader security system; and
(iii) Construct a server room to house Subtenant's
equipment.
(b) SUBSTANTIAL COMPLETION OF IMPROVEMENTS. Sublandlord
shall deliver the Sublease Premises to Subtenant with the Improvements
"substantially complete," and otherwise in conformance with all applicable laws,
rules, regulations and codes affecting the Sublease Premises and all underlying
covenants, conditions and restrictions to which the Sublease Premises are
subject, including without limitation the provisions of Section 16 of the Master
Lease. The term "substantially complete" shall mean that Sublandlord has
completed the Improvements, notwithstanding the fact that minor details of
construction, mechanical adjustments or decoration which do not materially
interfere with Subtenant's use of the Sublease Premises remain to be performed
(items normally referred to as "punch-list" items). The "punch-list" items shall
be completed by Sublandlord within thirty (30) days following the date such
items on the "punch-list" have been agreed to by Sublandlord and Subtenant. The
Sublease Premises shall be deemed to be "substantially complete" even though
Subtenant's furniture, telephones, telecopier, computers, and other business
machines or equipment have not been installed, the purchase and installation of
which shall be Subtenant's sole responsibility.
(c) WARRANTIES. Sublandlord shall assign to Subtenant (or
otherwise enforce all warranties received from, or rights against, all
contractors and subcontractors involved in the Improvements.
(d) EARLY ENTRY. Subtenant may enter into the Sublease
Premises upon receipt of Sublandlord's consent, for the purpose of installing
furniture, special flooring or carpeting, trade fixtures, telephones, computers,
photocopy equipment, and other business equipment. Such early entry will not
advance the Sublease Commencement Date, provided (a) Subtenant does not commence
business operations from any part of the Premises, and (b) Subtenant's early
entry does not interfere with, or delay, the completion of the Improvements. If
Subtenant is allowed early entry, Sublandlord shall not be responsible for, and
Subtenant is required to obtain insurance covering, any loss, including theft,
damage or destruction to any work or material installed or stored by Subtenant
or Sublandlord, or any contractor or individual involved in the completion of
the Improvements, or for any injury to Subtenant or Subtenant's employees,
10
<PAGE>
Exhibit 10.1
agents, contractors, licensees, directors, officer, partners, trustees, visitors
or invitees or to any other person. Sublandlord shall have the right to post the
appropriate notices of non-responsibility and to require Subtenant to provide
Sublandlord with evidence that Subtenant has fulfilled its obligation to provide
insurance pursuant to this Sublease.
Subtenant acknowledges that it is not authorized to make or do any
alterations or improvements in or to the Sublease Premises except as permitted
by the provisions of this Sublease and the Master Lease and that it must deliver
the Sublease Premises to Sublandlord on the Sublease Expiration Date in the
condition required by the Master Lease.
16. CONSENT OF LANDLORD. Section 24 of the Master Lease requires
Sublandlord to obtain the written consent of Landlord to this Sublease.
Sublandlord shall solicit Landlord's consent to this Sublease promptly following
the execution and delivery of this Sublease by Sublandlord and Subtenant, at
Sublandlord's sole cost and expense. In the event Landlord's written consent to
this Sublease has not been obtained within forty-five (45) days after the
execution hereof, then this Sublease may be terminated by either party hereto
upon notice to the other, and upon such termination neither party hereto shall
have any further rights against or obligations to the other party hereto.
17. TERMINATION OF THE LEASE. If for any reason the term of the
Master Lease shall terminate prior to the Sublease Expiration Date, this
Sublease shall automatically be terminated and Sublandlord shall not be liable
to Subtenant by reason thereof unless said termination shall have been caused by
the default of Sublandlord under the Master Lease, and said Sublandlord default
was not as a result of a Subtenant default hereunder.
18. RIGHT OF FIRST REFUSAL.
(a) RIGHT OF FIRST REFUSAL. During the initial Sublease
Term as it may be extended, Subtenant shall have a right of first refusal to
sublease any space in the Building that Sublandlord elects to sublease during
the Sublease Term (the "Expansion Space") on the terms and conditions contained
herein. Subtenant shall lease the Expansion Space in its "then as-is" condition
on the terms and conditions stated in the Offer (as defined below).
(b) EXERCISE OF RIGHT OF FIRST REFUSAL. Sublandlord shall
give notice to Subtenant of the material terms and conditions of any offer
received by Sublandlord (which offer is acceptable to Sublandlord) from any bona
fide third party ("Offeror") to lease the Expansion Space, including, without
limiting the generality of the details of said notice, the base rent, term, and
security deposit. A copy of the offer shall be attached to the notice
(collectively, the "Offer").
Subtenant shall thereupon have fifteen (15) business days in which to
irrevocably notify Sublandlord of its intent to lease the entire Expansion Space
which is the subject of the Offer on the terms and conditions contained in the
Offer ("Subtenant's Right of First Refusal Exercise Notice").
If Subtenant's Right of First Refusal Exercise Notice indicates
Subtenant's irrevocable intent to lease the entire Expansion Space which is the
subject of the Offer, Sublandlord and Subtenant shall execute and deliver
appropriate documentation to evidence Subtenant's lease of
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Exhibit 10.1
such Expansion Space subject to the terms and conditions contained in the Offer
and, to the extent not inconsistent with the terms and conditions specified in
the Offer, on the terms and conditions contained in this Sublease.
The foregoing right of first refusal shall apply only with respect to
the entire Expansion Space, and may not be exercised with respect to only a
portion thereof, unless only a portion shall first become available (in which
case, the foregoing expansion right shall apply to such portions, as the same
becomes legally available to sublease). Failure of Subtenant to deliver
Subtenant's Right of First Refusal Exercise Notice to Sublandlord in the time
period set forth above shall constitute Subtenant's intent not to lease the
Expansion Space which is subject to the Offer on the terms and conditions
contained in the Offer. If Subtenant rejects the Offer or fails to notify
Sublandlord as provided above, Sublandlord may then lease the Expansion Space
which is subject to the Offer pursuant to the Material Terms and Conditions (as
hereinafter defined) of the Offer or Material Terms and Conditions more
favorable to Sublandlord. If any of the Material Terms or Conditions as stated
in the Offer are changed and made materially less favorable to the Sublandlord
prior to the lease of such Expansion Space to the Offeror or any third party,
Sublandlord shall repeat the right of first refusal procedure set forth above,
setting forth all modified terms. "Material Terms or Conditions" shall mean
rent, additional rent, term of lease, tenant improvement allowance, options and
other material financial terms. In the event any such Expansion Space is not
leased to any other party within 180 days after notice thereof was given to
Subtenant, the provisions of this Section 18 shall again be applicable to such
Expansion Space.
(c) DELIVERY OF EXPANSION SPACE. If Subtenant shall
exercise the right of first refusal granted herein, Sublandlord does not
guarantee that the Expansion Space will be available on the commencement date
for the sublease thereof, if the then existing occupants of the Expansion Space
shall holdover, or for any other reason beyond Sublandlord's reasonable control.
In such event, Rent with respect to the Expansion Space shall be abated until
Sublandlord legally delivers the same to Subtenant, as Subtenant's sole
recourse. Notwithstanding the foregoing, if Sublandlord does not deliver the
Expansion Space to Subtenant within one hundred eighty (180) days after the date
the Expansion Space was to be delivered to Subtenant, Subtenant shall have the
right, at Subtenant's sole option, to elect to terminate the lease of the
Expansion Space by delivery to Landlord of a notice (the "Termination Notice"),
which termination shall be effective upon receipt of the Termination Notice by
Sublandlord.
(d) DEFAULT. Subtenant's exercise of the right of first
refusal shall not operate to cure any default by Subtenant of any of the terms
or provisions of the Sublease, nor to extinguish or impair any rights or
remedies of Sublandlord arising by virtue of such default. The right to sublease
the Expansion Space shall, at Sublandlord's election, be null and void if
Subtenant is in default under the Sublease, after applicable notice and grace
period, at the date Sublandlord would otherwise notify Subtenant of the
availability of the Expansion Space or at any time thereafter and prior to
commencement of the sublease for the Expansion Space.
(e) PERSONAL. If the Sublease or Subtenant's right to
possession of the Sublease Premises shall terminate in any manner whatsoever
before Subtenant shall have exercised the right herein provided, or if Subtenant
shall have assigned the Sublease or sub-
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Exhibit 10.1
sublet more than twenty percent (20%) of the Sublease Premises to other than an
Affiliate, then immediately upon such termination, assignment or sub-sublease,
the right to sublease the Expansion Space herein granted shall simultaneously
terminate and become null and void. Such right is personal to Subtenant, and
under no circumstances whatsoever shall the assignee under a complete or partial
assignment of the Sublease, or a sub-subtenant under a sub-sublease of the
Sublease Premises, have any right to exercise the expansion right granted
herein. Subtenant agrees that time is of the essence of this provision.
(f) DOCUMENTATION. After Subtenant validly exercises the
right of first refusal set forth herein, the parties hereto shall execute an
amendment to the Sublease adding the Expansion Space, or a new sublease for the
Expansion Space, or such other documentation as Sublandlord shall require in
order to confirm the addition of the Expansion Space to the Sublease Premises;
provided, however, that a valid exercise of the right of first refusal contained
herein shall be fully effective, whether or not such confirmatory documentation
is executed by the parties hereto.
19. MAINTENANCE.
(a) MAINTENANCE OF PREMISES. Subject to Landlord's repair
and maintenance obligations set forth in Section 17 of the Master Lease,
Sublandlord shall maintain the Sublease Premises in accordance with the terms
and conditions of the Master Lease.
(b) HAZARDOUS MATERIALS. Sublandlord shall, at its sole
cost and expense and prior to Subtenant's move-in into the Sublease Premises,
conduct a Base Line Phase I Environmental Assessment ("Baseline Study"), a copy
of which shall be provided to Subtenant. Subtenant shall, at its sole cost and
expense and prior to vacating the Sublease Premises, also conduct a Base Line
Study, a copy of which shall be provided to Sublandlord. If the Subtenant's
Baseline Study reveals contamination not revealed in the Baseline Study
conducted by Sublandlord, Subtenant shall be solely responsible for and shall
defend, indemnify and hold Sublandlord, its agents, contractors and employees
harmless from and against any and all claims, costs and liabilities (including
attorneys' fees), charges and disbursements arising out of or in connection with
any removal and/or clean up of Hazardous Materials and any restoration and
materials required hereunder to return the Sublease Premises and any other
property of whatever nature to their condition existing prior to the time of any
such contamination.
Subtenant shall use the Sublease Premises in accordance with the terms
and conditions of the Master Lease, including, without limitation, Section 38
with respect to Hazardous Materials. Sublandlord and Subtenant shall each
indemnify, defend and hold the other party harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including,
without limitation, attorneys' fees) which arise during or after the Sublease
Term as a result of either party's use of Hazardous Materials in violation of
the terms and conditions of the Master Lease.
20. ENTIRE AGREEMENT. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Sublease and
this Sublease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Sublandlord to Subtenant with
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Exhibit 10.1
respect to the subject matter thereof, and none thereof shall be used to
interpret or construe this Sublease. This Sublease, and the exhibits and
schedules attached hereto, contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Sublease Premises and shall be considered to be the
only agreements between the parties hereto and their representatives and agents.
None of the terms, covenants, conditions or provisions of this Sublease can be
modified, deleted or added to except in writing signed by the parties hereto.
All negotiations and oral agreements acceptable to both parties have been merged
into and are included herein. There are no other representations or warranties
between the parties, and all reliance with respect to representations is based
totally upon the representations and agreements contained in this Sublease. This
Sublease may be executed in any number of counterparts which together shall
constitute the Sublease.
IN WITNESS WHEREOF, the parties have entered into this Sublease as of
the date first written above.
SUBLANDLORD:
TREGA BIOSCIENCES, INC.,
a Delaware corporation
By: /s/ Gerard Wills
---------------------------
Its: CFO
---------------------------
SUBTENANT:
NEUROVIR THERAPEUTICS, INC.,
a Delaware corporation
By: /s/ Jeffrey Ostrove
---------------------------
Its: COO
---------------------------
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Exhibit 10.1
EXHIBIT "A"
COPY OF MASTER LEASE
[*TO BE ATTACHED*]
15
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Exhibit 10.1
EXHIBIT "B"
DEMISING PLAN
[*TO BE ATTACHED*]
16
