SECOND AMENDMENT TO LEASE
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This Second Amendment to Lease (the "Agreement"), made this 14th day of
November, 1996 by and between Xxxx Xxxxxx Realty Income Partnership II, L.P.,
located at c/o Xxxx Xxxxxx Realty, Inc. Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, hereafter called "Landlord", and Covalent Research Alliance
Corp., a corporation organized and existing under the law of Pennsylvania,
hereinafter called "Tenant".
WITNESSETH THAT:
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WHEREAS, Landlord and Tenant entered into an Agreement of Lease dated
September 9, 1994, as amended March 25, 1996, providing for the leasing of
office space at One Glenhardie Corporate Center 0000 Xxxxxxxx Xxxx, Xxxxx, XX
00000; and
WHEREAS, Landlord and Tenant desire to amend said Lease;
NOW, THEREFORE, in consideration of the agreements of each other, Landlord
and Tenant agree that effective upon the earlier of December 1, 1996 or Tenant's
occupancy of the first floor space as indicated on Revised Exhibit "A" (the
"Effective Date"), said Lease shall be and the same is hereby amended as
follows:
2. Demise.
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Landlord does hereby lease and demise to Tenant and Tenant does hereby
hire and take from Landlord, for the term and subject to the provisions hereof,
the space (hereinafter, together with all fixtures, equipment, improvements,
installations and appurtenances which at the commence of or during the term of
this Lease are thereto attached, referred to as the "Premises") shown cross-
hatched on the floor plan (the "Floor Plan") attached hereto as Revised Exhibit
"A", on the first floor of the building (hereinafter referred to as the
"Building") known as occupying or to occupy the parcel of land bounded as
described on Exhibit "B" attached hereto (the "Land"), The Building and Land are
sometimes collectively referred to in this Lease as the "Property".
3. Term.
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(a) This demise shall be for the term (hereinafter referred to as "the
Term") beginning on the Effective Date as defined above and ending, without the
necessity of notice from either party to the other, five (5) years and one (1)
month from and after the Effective Date if the Effective Date shall be the first
day of a month, if the Effective Date shall be other than the first day of the
month, then from and after the first day of the month next following the
Effective Date. Tenant shall vacate the space now occupied by Tenant on the
second floor of the Building
on the Effective Date. If Tenant fails to vacate such space on the Effective
Date, Tenant shall pay Landlord as Additional Rent an amount equal to Two
Hundred Eight Dollars for each day after the Effective Date that Tenant occupies
the former premises on the second floor through December 31, 1996 and Four
Hundred Fifteen Dollars for each day after January 1, 1997 that Tenant occupies
the former premises on the second floor.
(b) Is hereby deleted.
(c) Landlord estimates, but does not warrant, that the Premises will
be provided on or about November 5, 1996.
(d) Is hereby deleted.
(e) When the Effective Date is established, Landlord and Tenant shall
promptly execute and acknowledge a memorandum of the Effective Date and the date
of expiration of the Term.
(f) Shall remain as currently defined.
4. Fixed Rent; Tenant Energy Costs; Annual Operating Costs; Lease Taxes.
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(a) Tenant shall pay to the Landlord as rent under this Lease the
aggregate of: (i) Fixed Rent (as defined in Article 4 (b) of this Lease;) (ii)
Tenant's share of Tenant Energy Costs (as defined in Article 4 (d) of this
Lease); (iii) Tenant's proportionate share of increases in Annual Operating
Costs (as defined in Articles 4 (c) and 4 (e) of this Lease) over Base Operating
Costs (as defined in Article 4 (e) (i) (C) of this Lease); and (iv) all other
sums payable by Tenant to Landlord pursuant to the provisions of this Lease.
(b) Fixed Rent.
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(i) The minimum fixed annual rent shall be the sum of Two
Hundred Forty Three Thousand Nine Hundred Dollars and Eighty Four Cents
($243,900.84) lawful money of the United States of America, subject to increase
as set forth in Article 4 (b) (ii) of this Lease, payable in equal monthly
installments in advance and without demand, notice, set-off or deduction in the
sum of Twenty Thousand Three Hundred Twenty Five Dollars and Seven Cents
($20,325.07) on the first day of each and every month during the Term (the
"Fixed Rent"). Notwithstanding anything to the contrary above, Tenant shall not
pay rent for the first month of the Term.
(ii) - (iv) Shall remain as currently defined.
(c) Tenant's Proportionate Share. As used in this Lease, "the square
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foot area of the Premises" shall be deemed to be Eleven Thousand Seven Hundred
Twenty Six (11,726) square feet, "the total square foot area of the Building"
shall be deemed to be sixty-three
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thousand eighty-one (63,081) square feet and "Tenant's proportionate share"
shall refer to the percentage relationship between the foregoing, namely 18.59%.
(d) Shall remain as currently defined.
(e) Annual Operating Costs.
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(i) (A) - (B) shall remain as currently defined.
(C) The term "Base Operating Costs" shall mean the sum
of the actual 1997 Annual Operating Costs.
(ii) Shall remain as currently defined.
(iii) Shall remain as currently defined.
The remaining terms of this section of the Lease shall remain as currently
defined.
8. Improvement of the Premises.
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Sections (a) through (f) shall remain as currently defined in the
Lease.
(g) Standard Tenant Work; Special Tenant Work.
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Landlord agrees to provide the Premises in its "as-is" condition. All
work to be performed by Landlord shall be "Special Tenant Work". All Special
Tenant Work shall be furnished, installed and performed by Landlord, utilizing a
general contractor or construction manager ("Landlord's Contractor") selected by
Landlord (which may be an affiliate of Landlord or a partner in Landlord or an
affiliate of a partner in Landlord) for and on behalf of Tenant at Tenant's sole
expense, based on "Landlord's Cost". "Landlord's Cost" shall be deemed to mean
Landlord's out-of-pocket contract or purchase price for materials, labor and
services (including, without limit, any reasonable contractor's fee for the
contractor's overhead and profit and charges for cutting, patching, cleaning up
and removal of waste and debris), plus architects; and engineers' fees, plus the
product obtained by multiplying (i) the sum of all of the foregoing less FIfty
Eight Thousand SIx Hundred Thirty Dollars ($58,630.00) by (ii) ten percent (10%)
added for Landlord's expenses and profit. Notwithstanding anything to the
contrary above, Landlord shall provide an allowance equal to Fifty Eight
Thousand Six Hundred Thirty Dollars ($58,630.00) to be used toward construction
of the Premises. Any unused portion of the foregoing allowance may be credited
against Fixed Rent.
31. Name of Building; Titles; Construction; Exhibits; Brokers. The
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BUilding may be designated and known by any name Landlord may choose and such
name may be changed from time to time at Landlord's sole discretion. The Titles
appearing in connection with various sections of this Agreements are for
convenience only. They are not intended to indicate all of the
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subject matter in the text and they are not to be used in interpreting this
LEase nor for any other purpose in the event of any controversy. As used herein
(i) the term "person" shall be deemed to mean a natural person, a trustee, a
corporation, a partnership and any other form of legal entity; (ii) all
references in the singular or plural number shall be deemed to have been made,
respectively, in the plural or singular number as well. Each and every document
or other writing which is referred to herein as being attached hereto or is
otherwise designated herein as an exhibit hereto is hereby made a part hereof.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania. Tenant represents and warrants that it did not deal with any
broker, finder or other intermediary to whom a fee or commission is or will
become payable in connection with this Lease except Xxxx Realty Group, Inc. and
Xxxxxxx Realty Group.
32. Security Deposit.
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(a) Tenant, concurrently with the execution of this Lease, shall be
obligated to deposit with Landlord the sum of Fifteen Thousand Seven Hundred
Eighty Seven Dollars and Forty Nine Cents ($15,787.49) which will be added to
the Four Thousand Five Hundred Thirty Seven Dollars and Fifty Eight Cents
concurrently held by Landlord as security deposit, bringing the total security
deposit held by landlord to Twenty Thousand Three Hundred Twenty Five Dollars
and Seven Cents ($20,325.07), which sum shall be retained by Landlord without
interest and not in trust or in a separate account as security for the payment
by Tenant of the rent herein agreed to be paid and for the faithful performance
of the covenants contained in this Lease. If at any time Tenant shall be in
default under any of the provisions of this Lease, Landlord shall be entitled,
at its sole discretion to apply such security deposit (i) to payment of (A) any
rent for the payment of which Tenant shall be in default as aforesaid, (B) any
expense incurred by Landlord in curing any such default, and/or (C) any other
sums due to landlord in connection with such default or the curing thereof,
including, without limitation, any damages incurred by Landlord by reason of
such default; or (ii) to retain the same in liquidation of all or part of the
damages suffered by Landlord by reason of such default. Any portion of such
deposit which shall not be utilized for any such purpose shall be returned to
Tenant following expiration of this Lease and surrender of the entire Premises
to Landlord.
(b) - (c) Shall remain as currently defined.
Article 37. is hereby deleted and replaced with the following:
37. Option to Extend. Tenant shall have the right to be exercised as
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hereinafter provided, to renew this Lease for one (1) additional term (the
"Extension Term") of five (5) years, commencing on the day following the then
expiration date, upon the following terms and conditions:
a. Tenant's right to renew is subject to the requirement that at the
same time of the exercise of the option and at the time of the commencement of
the Extension Term, Tenant
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shall not then be in default under any of the terms and conditions of this Lease
beyond the expiration of any applicable notice and/or cure periods.
b. The renewal shall be upon the same terms and conditions as are in
effect immediately prior to the expiration of the current Term, except that:
(i) during the Extended Term, effective as of the commencement
thereof, the Base Year for Operating Expenses shall be changed to the calendar
year in which the Extended Term commences ("New Base Year for Operating
Expenses");
(ii) the Base Rent during each Extended Term, effective as of
the commencement thereof, shall be as follows: an amount equal to the
"Prevailing Market Rental Rate" (as hereinafter defined) for leases for
comparable space in the Glenhardie Corporate Center, as of the date which is six
(6) months prior to the commencement of such Extended Term plus the amount of
the New Base Year for Operating Expenses.
(iii) Landlord shall provide the Premises in "as-is" condition.
c. There shall be no further privilege of renewal beyond the
Extension Term expressly set forth above.
d. Tenant may exercise its renewal option only by giving written
notice to Landlord, at least nine (9) months prior to the expiration of the then
current term, of the exercise of its renewal right (the "Notice"), which shall
then be binding on both Landlord and Tenant.
e. "Prevailing Market Rental Rate" shall mean the annual rental rate
per rentable square foot less Operating Costs included in such rental rate then
being paid under leases, including both original lease transactions and those
resulting from renewals, in the Glenhardie Corporate Center in space comparable
to the Premises.
The Prevailing Market Rental Rate shall be determined as follows:
(i) On or before the day which is thirty (30) days following
Landlord's receipt of the Notice, Landlord shall notify Tenant in writing of
Landlord's determination as to the Prevailing Market Rental Rate and the Base
Rent which Landlord proposes to charge during such Extension Term. If Tenant
either (A) notifies Landlord in writing within thirty (30) days after the date
of Landlord's notice that Tenant agrees to the Base Rent proposed by Landlord or
(B) fails to object in writing to such proposed Base Rent within such thirty
(30) day period, then the Base Rent proposed by Landlord shall be final and
conclusive. If Tenant shall object in writing to the proposed Base Rent, then
Landlord and Tenant shall endeavor to reach agreement on fair rental value
within the thirty (30) day period succeeding Tenant's notice of objection.
If Landlord shall fail to provide such written notice of the Prevailing
Market Rent, then Tenant shall not be released from it's commitment to extend
the Term of the Lease, but shall
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request in writing from Landlord the Prevailing Market Rate, which Landlord
shall provide within thirty (30) days from the receipt of Tenant's request.
(ii) If pursuant to subparagraph (i), Tenant and Landlord cannot
agree on the Prevailing Market Rental Rate shall be determined in accordance
with subparagraph (iii) below.
(iii) If pursuant to subparagraph (i) the parties cannot reach
agreement within the such thirty (30) day period, then "Prevailing Market Rental
Rate" shall be determined by arbitration as follows:
Arbitration held under this Lease shall be before one disinterested arbitrator
selected by the parties, provided, however, that if the parties cannot agree
upon the selection of an arbitrator within 10 business days following notice by
a party requesting arbitration, then the dispute shall be submitted to three
arbitrators designated in accordance with the rules of the American Arbitration
Association then in effect in Xxxxxxxxxx County, Pennsylvania. The arbitration
shall be conducted in accordance with the rules of the American Arbitration
Association, except the Federal Rules of Evidence and Procedure, including but
not limited to, discovery rights, shall prevail.
c. The Prevailing Market Rental Rate shall be determined by the
arbitrators. Any costs of arbitration shall be paid equally by the parties
within 30 days after issuance of the arbitrators' decision.
d. Neither Landlord nor Tenant shall have the right to appeal the
decision of the arbitrators.
All capitalized terms in this Amendment will have the meaning set forth in the
Lease, except as specifically amended hereby.
All other lease terms and conditions shall remain in full force and effect,
unmodified.
IN WITNESS WHEREOF, Landlord and Tenant have executed this instrument by
proper person thereunto duly authorized so to do on the day and year first
written above.
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Landlord:
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Xxxx Xxxxxx Realty Income Partnership II, L.P.,
A Delaware limited partnership
By: Xxxx Xxxxxx Realty Income Properties II, Inc., a
Delaware corporation
its Managing General Partner,
By: /s/ X. Xxxxxxxx Xxxxxxx, Jr.
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X. Xxxxxxxx Xxxxxxx, Jr.
President
Witness: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President
Tenant:
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By: Covalent Research Alliance Corp.,
a Pennsylvania Corporation
By: /s/ Xxxxx XxXxxx
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President
Xxxxx XxXxxx
Attest: /s/ Xxxxx Xxxxx
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