EXHIBIT 10.23
LEASE FOR COMBINATION
OFFICE/WAREHOUSE SPACE
AT
EAGLEVIEW CORPORATE CENTER
BUILDING NO.
LANDLORD: THE XXXXXX GROUP
TENANT: VIROPHARMA INCORPORATED
TABLE OF CONTENTS
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Page
1. LEASED SPACE AND PURPOSE.........................................1
2. TERM.............................................................1
3. RENT.............................................................3
5. NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES...............7
6. LATE PAYMENT.....................................................9
7. CONSTRUCTION OF LEASED SPACE....................................10
8. TENANT'S ALTERATIONS............................................11
9. MECHANIC'S LIENS................................................12
10. CONDITION OF LEASED SPACE.......................................13
11. COMMON AREA MAINTENANCE.........................................13
12. ASSIGNMENT AND SUBLETTING.......................................14
13. ACCESS TO LEASED SPACE..........................................15
14. REPAIRS.........................................................15
15. TERMINATION AND EXTENSION.......................................17
16. SURRENDER OF LEASED SPACE.......................................17
17. INDEMNIFICATION AND INSURANCE...................................18
18. FIRE OR OTHER CASUALTY..........................................19
19. CONDEMNATION....................................................21
20. ESTOPPEL CERTIFICATES...........................................21
21. DEFAULT.........................................................22
22. REMEDIES........................................................22
23. CONFESSION OF JUDGMENT FOR POSSESSION IN LIMITED
CIRCUMSTANCE....................................................24
24. WAIVER..........................................................25
25. QUIET ENJOYMENT.................................................25
26. FORCE MAJEURE...................................................25
27. SUCCESSORS......................................................26
28. LANDLORD'S LIABILITY............................................26
29. SUBORDINATION...................................................26
30. RULES AND REGULATIONS...........................................27
31. GOVERNING LAW...................................................27
32. SEVERABILITY....................................................27
33. NOTICES.........................................................27
34. BROKERS.........................................................28
35. SIGNS...........................................................28
36. SECURITY DEPOSIT; SECURITY
INTEREST........................................................28
37. USE OF INFORMATION IN
ADVERTISING.....................................................30
38. CAPTIONS........................................................30
40. ACCESS TO THE LEASED SPACE AND COMMON AREAS.....................30
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Page
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41. ATTORNEY FEES...................................................30
42. SELF-HELP.......................................................31
43. MEMORANDUM OF LEASE.............................................31
44. LANDLORD REPRESENTATIONS AND WARRANTIES.........................32
45. RENEWAL OPTION..................................................34
46. SPACE RESERVATION AND EXPANSION OPTION..........................36
47. RIGHT OF FIRST REFUSAL.........................................38
48. RESTRICTION ON LEASING TO COMPETITORS...........................39
49. CREDIT AGAINST LAND PURCHASE....................................39
50. CHANGE TO CPI INDEX.............................................39
51. CERTAIN COVENANTS REGARDING THE DECLARATION.....................39
52. ADDITIONAL PERMITTED TITLE EXCEPTIONS...........................40
53. SEWER CAPACITY ALLOCATION.......................................41
54. CALCULATION AND REIMBURSEMENT OF UNAMORTIZED VALUE OF
DIRECT PAYMENT PORTION..........................................41
Exhibits
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A - Description of Leased Space
B - Work Letter
C - Rider to Lease or Agreement of Sale Regarding Industrial Waste Discharge
Within Eagleview Corporate Center
D - Rules and Regulations
E - Permitted Title Exceptions
F - Building Standard Specifications
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LEASE
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LEASE is made this 21st day of July, 1997 between THE XXXXXX GROUP, a
Pennsylvania general partnership ("Landlord"), with its office at Eagleview
Corporate Center, 000 Xxxxxxxxxxxx Xxxxx, X.X. Xxx 000, Xxxxx, Xxxxxxxxxxxx
00000, and VIROPHARMA INCORPORATED, a Pennsylvania corporation ("Tenant"), with
its office at 00 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
1. LEASED SPACE AND PURPOSE.
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(a) Landlord hereby rents to Tenant 48,400 rentable square feet of space
("Leased Space") within the building to be constructed by Landlord at 000
Xxxxxxxxx Xxxxxxxxx ("Building"), also known as Lot 10 within the center
("Center" or "Eagleview Corporate Center") known as Eagleview Corporate Center,
Route 100, Lionville, Uwchlan Township, Xxxxxxx County, Pennsylvania. The
location of the Leased Space within the Building is shown and outlined in red in
the plan attached hereto as Exhibit "A". The Leased Space include all fixtures,
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improvements, additions and other property installed therein at the Commencement
Date (hereafter defined), or at any time during the term of this Lease (other
than Tenant's movable personal property and trade fixtures), together with the
right to use, in common with others, the parking lot and all other public
portions of the Building and of the Center.
(b) The Leased Space shall be used and occupied as a mixed-use facility
consisting of general office space, warehouse space and laboratory space in
connection with Tenant's Business (hereafter defined) and for no other purpose.
For purposes hereof, Tenant's Business shall be deemed to be the development and
commercialization of pharmaceutical products and research activities in
connection therewith.
2. TERM.
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(a) The term of this Lease and Tenant's obligation to pay rent hereunder
shall commence upon a date ("Commencement Date") which is the earlier of:
(i) the date when the Leased Space is "ready for occupancy"; or
(ii) the date when Tenant shall take possession of the Leased Space
other than to complete installation of Tenant's Work (as defined in the Work
Letter),
(b) The Leased Space shall be deemed "ready for occupancy" when Landlord
has "Substantially Completed" the Landlord's Work described in the Work Letter
attached hereto as Exhibit "B" ("Work Letter"). "Substantial Completion" or
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"Substantially Completed" shall mean such completion as shall enable Tenant to
reasonably and conveniently use and occupy the Leased Space for the conduct of
Tenant's Business. Substantial Completion shall be deemed to have been achieved
even though minor or insubstantial details of construction, mechanical
adjustment or decoration remain to be performed, the non-completion of which
does not materially interfere with Tenant's use of the Leased Space,
installation of finishing work or the conduct of Tenant's Business therein. In
no event, however, shall Substantial Completion be
deemed to have occurred prior to (A) the issuance of a permanent certificate of
occupancy for the Leased Space by the municipality, and (B) the issuance of a
certificate of substantial completion by Landlord's general contractor which is
verified by Tenant's Consultant (as defined in the Work Letter); provided that
any disagreement as to whether Substantial Completion has occurred shall be
settled in the manner provided in the Work Letter. If the Commencement Date
does not occur on or before the Target Date (hereafter defined), Tenant shall
have the following rights:
(i) Landlord shall be entitled to a fifteen (15) day grace period,
such that if the Commencement Date occurs within fifteen (15) days after the
Target Date, Tenant shall have no rights under subsections (ii) through (iv)
below;
(ii) If the Commencement Date occurs more than fifteen (15), but
within forty-five (45) days after the Target Date, Tenant shall receive one (1)
free day of Rent for each two (2) days within such period until the earlier of
the end of such period or the Commencement Date;
(iii) If the Commencement Date occurs more than forty-five (45) days,
but within seventy-five (75) days after the Target Date, Tenant, in addition to
the rent credit provided above in subsection (ii), shall receive one (1) free
date of Rent for each day within such period until the earlier of the end of
such period or the Commencement Date; and
(iv) If the Commencement Date occurs more than seventy-five (75) days
after the Target Date, (A) Tenant, in addition to the rent credit provided above
in subsections (ii) and (iii), shall receive two (2) free days of Rent for each
day from the beginning of such seventy-five (75) day period to the Commencement
Date or (B) Tenant may elect to terminate this Lease, in which event neither
party shall have any further rights or obligations hereunder except that the
Security Deposit (hereafter defined) and Direct Payment Portion (as defined in
the Work Letter) paid by Tenant shall be returned by Landlord to Tenant within
thirty (30) days of such termination, and if not so paid, such unpaid amounts
shall accrue interest at the Default Rate (hereafter defined) from the date of
termination until paid in full. (The limitations set forth in Section 28 hereof
shall not apply Landlord's liability for payment of the foregoing amounts.)
For purposes hereof, the Target Date shall be March 1, 1998 as such date may be
extended by reason of "Tenant Delay" or "Change Orders" (as such terms are
defined in the Work Letter) or "Force Majeure" (as defined in Section 26 below).
(c) Tenant shall execute and deliver to Landlord a declaration of the
Commencement Date upon presentation by Landlord prior to taking occupancy. The
term ("Term") of this Lease shall end ten (10) years after the Commencement Date
unless sooner terminated or renewed in accordance with this Lease; provided,
however, that if the Commencement Date is not the first day of a calendar month,
the Term shall extend to the last day of the calendar month which is ten (10)
years after the Commencement Date occurs. The first ten (10) year period is
sometimes referred to herein as "Initial Term."
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3. RENT.
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(a) Definitions.
(i) Tenant and Landlord acknowledge and agree that the initial
rentable area of the Building will be 48,400 square feet and that, subject to
the terms and conditions of this Lease, Landlord may expand the rentable area of
the Building to a maximum of 86,500 square feet. Until the expansion of the
Building, the rentable area of the Building leased to Tenant will be 48,400
square feet and "Tenant's Proportionate Share" shall be 100%. Once expansion of
the Building shall be undertaken, Tenant's Proportionate Share shall be adjusted
in accordance with the ratio of Tenant's rentable area of the Building to the
total amount of rentable area available in the Building, whether occupied or
not.
(ii) "Real Estate Taxes" shall mean all taxes and assessments levied,
assessed or imposed at any time by any governmental authority upon or against
the Building and the land upon which the Building is situate, and also any tax
or assessment levied, assessed or imposed at any time by any governmental
authority in connection with the receipt of income or rents from said Building
or land to the extent that the same shall be in lieu of (and/or in lieu of an
increase in) all or a portion of any of the aforesaid taxes or assessments upon
or against the said Building and/or land. If, however, any assessment included
within Real Estate Taxes is payable in installments extending beyond the term of
this Lease, Tenant shall only be obligated to pay those installments coming due
during the term of this Lease. "Real Estate Taxes" shall not include any
penalty or interest as a result of Landlord's late payment. Landlord further
agrees to make payment of Real Estate Taxes in a timely manner so as to take
advantage of any applicable discount and to provide to Tenant copies of receipts
for paid Real Estate Taxes not later than thirty (30) days after the Real Estate
Taxes are due. Failure of Landlord to provide such receipts to Tenant shall
permit Tenant to suspend payment of Tenant's Proportionate Share of Real Estate
Taxes until such receipts are furnished to Tenant.
At any time and from time to time during the term of this Lease,
Tenant, at its expense, shall have the right to institute proceedings
challenging the amount of Real Estate Taxes. Landlord agrees to reasonably
cooperate with Tenant in connection therewith. Any refund awarded shall be
reimbursed first to each party in proportion to the expenses incurred by such
party in prosecuting such appeal, with any balance thereof next being refunded
to Tenant in an amount equal to Tenant's Proportionate Share of (A) the balance
of such award remaining after the foregoing cost reimbursements (B) multiplied
by a fraction (1) the numerator of which shall be the number of days during the
tax year for which the refund is awarded for which Tenant has paid Real Estate
Taxes pursuant to this Lease and (2) the denominator of which is 365.
(iii) "Operating Expenses" shall mean that part of any and all
expenses reasonably and actually incurred by Landlord in connection with its
ownership, maintenance and operation of the Building, the land upon which the
Building is situate, excluding Real Estate Taxes and interest or amortization
payments on any mortgage, but including, without limitation, electricity (other
than as billed directly to tenants based on usage); insurance maintained on the
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Building in accordance herewith; all direct and indirect labor costs; a
management fee for Landlord's management of the relationships with contractors
(other than the Association) providing yard and landscape maintenance, snow
clearance and insurance required to be maintained hereunder if Landlord, upon
request of Tenant, is able to place such insurance at more favorable premium
rates than Tenant is able to obtain, which management fee shall not exceed four
percent (4%) of the annual amount actually paid under such contracts
("Management Fee"); legal expenses; service contracts and supplies used in
connection with the cleaning, operating, labor and maintenance of the common
areas of the Building; all repairs required to be performed by Landlord as
provided for in this Lease (other than "Landlord's Work" as defined herein);
common area decoration, repairs and maintenance; snow removal; building
supplies; all charges for the common areas of the Building for electricity and
water, removal of trash, rubbish, garbage and refuse; the cost of operating an
identification sign or signs for the Building; replacing of paving, curbs,
walkways, directions or other signs; drainage; maintenance and monitoring of
fire sprinkling systems (if any); the Building's proportionate share of common
expenses owed to the Eagleview Corporate Center Association or its successor or
any other similar entity which owns and maintains the common areas of the Center
(collectively, "Association"); and such other expenses as Landlord may deem
necessary and proper in connection with the operation and maintenance of the
common areas of the Building, excluding any costs which under generally accepted
accounting principles ("GAAP") are capital expenditures; provided, however, that
Operating Expenses shall also include the annual amortization (over the
anticipated useful life established in accordance with GAAP) of a capital
improvement falling within any of the following categories: (i) a labor saving
device or improvement which is intended to reduce or eliminate any other
component of Operating Expenses; (ii) an installation or improvement required by
reason of any law, ordinance or regulation, which requirement did not exist on
the date of this Lease and is generally applicable to similar buildings; (iii)
an installation or improvement which directly enhances safety of tenants in the
Building or Center generally. Landlord shall have the right to xxxx Tenant
directly for any items of Operating Expenses which can be attributed directly to
Tenant's use only.
Notwithstanding any provision to the contrary, Operating Expenses
shall not include:
(A) any payments (such as salaries or fees) to the Landlord's
executive personnel or in-house site managers except for the Management Fee;
(B) depreciation or interest, except to the extent permitted
above in connection with capital improvements;
(C) mortgage or ground lease payments;
(D) taxes on the Landlord's business (such as income, excess
profits, franchise, capital stock, estate, inheritance) except to the extent
same are in lieu of Real Estate Taxes or increases in Real Estate Taxes;
(E) leasing commissions, broker's fees or legal fees incurred in
connection with leases of space in the Building;
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(F) legal fees that do not directly benefit Tenant or the
Building (provided that legal fees incurred in connection with leases of space
in the Building or in enforcing tenant obligations shall not be deemed to
benefit the Building);
(G) costs to correct original construction defects or defective
repairs or replacements hereinafter provided by or at the direction of Landlord;
(H) costs of repairs covered by valid warranties;
(I) expenses paid directly by a tenant for any reason (such as
excessive utility use, direct utility consumption, damage for which such tenant
is responsible);
(J) costs for improving any tenant's space;
(K) any repair or other work necessitated by condemnation, fire
or other insured casualty;
(L) any costs, fines and the like due to Landlord's violation of
any law, governmental rule or authority;
(M) refinancing costs;
(N) costs for any conversion of the heating system to gas heat
except to the extent such conversion is undertaken in an effort to reduce
Operating Expenses and the cost thereof is treated in the same manner as a
capital improvement;
(O) costs paid to Landlord or its affiliates other than the
Management Fee which exceed those reasonably charged in arms length transactions
with third parties in the general area of the Building; and
(P) services, benefits or both provided to some tenants but not
to Tenant.
(b) Tenant shall pay Landlord the minimum annual rent ("Minimum Annual
Rent") during the Initial Term in the amounts set forth below, which annual
amount shall be paid in equal monthly installments as set forth below on the
first day of each calendar month in advance. The first monthly installment of
Minimum Annual Rent shall be due on the Commencement Date. If the Commencement
Date is not the first day of a calendar month, rent from the Commencement Date
to the first day of the following month apportioned at the Minimum Annual Rent
rate (based on a 365-day year) shall be paid. All rent shall be payable, in
advance, and without prior notice or demand, at the address of Landlord set
forth in the heading of this Lease or at such other place, or to such other
person, as Landlord may from time to time direct in written notice to Tenant.
During the Initial Term, Minimum Annual Rent for each lease year (being 12
months from the Commencement Date or anniversary thereof) shall be as follows:
Rate per Rentable
Lease Year Square Foot Annual Rent Monthly Installment
---------- ----------- ----------- -------------------
1 $11.38 $550,792.00 $45,899.33
2 $11.88 $574,992.00 $47,916.00
3 $12.38 $599,192.00 $49,932.67
4-10 $13.38 $647,592.00 $53,966.00
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In addition to the foregoing, Tenant shall pay all amounts when and as required
in the Work Letter.
(c) In addition, Tenant shall pay to Landlord as Additional Rent in
equal monthly installments one twelfth (1/12) of Tenant's Proportionate Share of
annual Real Estate Taxes and Operating Expenses, at the time of payment of each
monthly installment of Minimum Annual Rent, based upon the most recent costs of
Operating Expenses and Real Estate Taxes available. For the period from the
Commencement Date until the issuance of a statement pursuant to subparagraph
3(d) below, such monthly installment shall be equal to $9,000.
(d) Within ninety (90) days of the expiration of each calendar year
Landlord shall furnish Tenant with a written statement of the actual Operating
Expenses and Real Estate Taxes incurred for such year itemizing the expenses
claimed by Landlord in reasonable detail. Within ten (10) days of the rendition
of such statement, Tenant shall pay any amounts in excess of those collected
pursuant to the payments on account of Real Estate Taxes and Operating Expenses
pursuant to paragraph 3(c) hereof, and any overpayments shall be credited
against the next installment(s) of rent due under this Lease or, at Tenant's
option, refunded to Tenant. In the event the first and/or last years of the
Term of this Lease shall not be full calendar years, then Tenant's obligation
for Operating Expenses and Real Estate Taxes attributable to such years shall be
pro rated. Tenant may, at its own cost and expense, after full payment of all
sums due and owing, audit Landlord's books and records not more than once each
year within sixty (60) days after Landlord's delivery of its annual statement of
Operating Expenses, which books and records shall be maintained in accordance
with GAAP. Notwithstanding the foregoing, if any said review of Landlord's
books and records reveals that any item(s) were incorrectly included in
Operating Expenses, Tenant shall have the right to inspect Landlord's books and
records with respect to such items for each prior lease year and an adjustment,
if any, shall be made in accordance herewith. If Tenant's audit determines that
Landlord's total charges for Operating Expenses or Real Estate Taxes for a given
lease year exceed by more than 5% the total amount properly chargeable to Tenant
under this Lease for such year, Landlord, in addition to reimbursing Tenant such
excess amount, shall pay Tenant an amount equal to the cost of the audit.
4. ADDITIONAL RENT.
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Tenant shall pay to Landlord as "Additional Rent" (in addition to sums payable
pursuant to paragraphs 3 (c) and 3(d)) the following:
(a) Expenses Incurred by Landlord as a Result of Tenant's Default.
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All sums which may become due by reason of Tenant's failure to comply with any
of the terms, conditions and covenants of this Lease to be kept and observed by
Tenant, and any and all damages, costs and expenses (including without
limitation thereto reasonable attorney's fees) which Landlord may suffer or
incur by reason of any default of Tenant and any damage to the Building or the
real estate of which the Building is a part caused by any negligence or wilful
misconduct of Tenant or violation of Tenant's covenants in Section 5(a) below,
together with interest to the date of
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payment (whether before or after entry of judgment and issuance of execution
thereon) at a rate equal to five percent (5%) above the prime interest rate (or
similar rate if the prime interest rate is no longer published) of First Union
Bank or its successor, in effect on the date during the period said payment is
due ("Default Rate"), which shall continue to accrue interest at the Default
Rate after entry of judgment and issuance of execution thereon until paid in
full.
(b) Use and Occupancy Taxes. All use and occupancy taxes imposed by
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any governmental body allocable to the Leased Space.
(c) Utilities. All charges for heat, gas, water, electric, trash and
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sewage disposal for the Leased Space, whether billed directly by the providers
of the same to Tenant or by Landlord as the owner of the Building, which charges
shall not exceed the charges actually incurred by Landlord therefor.
For purposes of this Lease, the term "Rent" or "rent" shall be deemed to refer
to Minimum Annual Rent and Additional Rent.
5. NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES.
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(a) Tenant will not:
(i) damage the Leased Space or any other part of the Building;
(ii) bring into or permit to be kept in the Leased Space any
dangerous, explosive or obnoxious substances except as may be used in Tenant's
Business which use Tenant shall undertake in compliance with all applicable laws
regulating same;
(iii) conduct itself or permit its agents, servants, employees or
invitees to conduct themselves in a manner that in Landlord's judgment
reasonably exercised is improper or unsafe except that the operation of, or
activities related to, Tenant's Business shall not be deemed to violate this
provision, provided same are undertaken in compliance with all applicable laws;
(iv) manufacture any commodity other than in the course of Tenant's
Business or prepare or dispense any food or beverages in the Leased Space,
except for consumption in the Leased Space by Tenant, its employees or invitees;
(v) remove, attempt to remove or manifest any intention to remove
Tenant's goods or property from the Leased Space other than in the ordinary
course of business;
(vi) do or suffer to be done, any act, matter or thing objectionable
to Landlord's fire insurance companies or Board of Underwriters whereby the fire
insurance or any other insurance now in force or hereafter to be placed by
Landlord on the Leased Space or the Building or Center shall become void or
suspended, or whereby the same shall be rated as a more hazardous risk than at
the Commencement Date. Tenant agrees to pay to Landlord as Additional
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Rent, any and all increases in premiums for insurance carried by Landlord on the
Leased Space, or on the Building, caused in any way by the occupancy of Tenant.
(b) Tenant's Responsibility Regarding Hazardous Substances.
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(i) The following definitions shall apply herein:
(A) Hazardous Substances. The term "Hazardous Substances," as
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used in this Lease, shall include, without limitation, flammables, explosives,
radioactive materials, asbestos, polychlorinated biphenyls (PCB's), chemicals
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, petroleum and petroleum
products, and substances declared to be hazardous or toxic under any law or
regulation now or hereafter enacted or promulgated by any governmental
authority.
(B) Tenant Responsible Parties. The term "Tenant Responsible
--------------------------
Parties" as used in this Lease shall mean Tenant, its employees, agents,
contractors and/or invitees.
(ii) Tenant's Restrictions. Tenant shall not cause or permit to
occur:
(A) Any violation of any federal, state, or local law,
ordinance, or regulation now or hereafter enacted, related to environmental
conditions on, under, or about the Leased Space or Center, arising from the use
or occupancy of the Leased Space by any Tenant Responsible Party, including, but
not limited to, soil and ground water conditions; or
(B) The use, generation, release, manufacture, refining,
production, processing, storage, or disposal of any Hazardous Substance on,
under, or about the Leased Space or Center except as may be used in Tenant's
Business which use Tenant shall undertake in compliance with all applicable Laws
(defined below).
(iii) Environmental Clean-Up.
(A) Tenant shall, at Tenant's own expense, comply with all laws
regulating the use, generation, storage, transportation, or disposal of
Hazardous Substances ("Laws") by Tenant Responsible Parties.
(B) Tenant shall, at Tenant's own expense, make all submissions
to, provide all information required by, and comply with all requirements of all
governmental authorities ("Authorities") under the Laws as are applicable to use
of Hazardous Substances by Tenant Responsible Parties.
(C) Should any Authority or any third party demand that a clean-
up plan be prepared and that a clean-up be undertaken because of any deposit,
spill, discharge, or other release of Hazardous Substances that occurs during
the Term of this Lease at or from the
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Leased Space and which arises at any time from the use of Hazardous Substances
by Tenant Responsible Parties, then Tenant shall, at Tenant's own expense,
prepare and submit the required plans and all related bonds and other financial
assurances, and Tenant shall carry out all such clean-up plans.
(D) Tenant shall promptly provide all information regarding the
use, generation, storage, transportation, or disposal of Hazardous Substances by
Tenant Responsible Parties that is requested by Landlord. If Tenant fails to
fulfill any duty imposed under this subparagraph (iii) within a reasonable time,
Landlord may do so; and in such case, Tenant shall cooperate with Landlord in
order to prepare all documents Landlord deems necessary or appropriate to
determine the applicability of the Laws to the Leased Space and use of Hazardous
Substances by Tenant Responsible Parties, and for compliance therewith, and
Tenant shall execute all documents promptly upon Landlord's request. No such
action by Landlord and no attempt made by Landlord to mitigate damages under any
Law shall constitute a waiver of any of Tenant's obligations under this
Subparagraph (iii).
(E) Tenant's obligations and liabilities under this Subparagraph
(iii) shall survive the expiration of this Lease.
(iv) Tenant's Indemnity.
(A) Tenant shall indemnify, defend, and hold harmless Landlord,
the manager of the Center, and their respective officers, directors,
beneficiaries, shareholders, partners, agents and employees, from all fines,
suits, procedures, claims, and actions of every kind, and all costs associated
therewith (including reasonable attorneys' and consultants' fees) arising out of
or in any way connected with any deposit, spill, discharge, or other release of
Hazardous Substances that occurs during the Term of this Lease at or from the
Leased Space and which arises at any time from use of Hazardous Substances by
Tenant Responsible Parties, or from failure by Tenant Responsible Parties to
provide all information, make all submissions, and take all steps required by
all Authorities under the Laws with respect thereto.
(B) Tenant's obligations and liabilities under this Subparagraph
(iv) shall survive the expiration of this Lease.
(C) Attached to this Lease as Exhibit "C" and made part hereof
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is a Rider regarding Industrial Waste Discharge within Eagleview Corporate
Center.
6. LATE PAYMENT
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If any payment required by Tenant under any of the terms hereof shall not be
paid within five (5) days after written notice from Landlord that such payment
is overdue, Tenant shall, upon demand, pay a late charge to Landlord equal to
the greater of (a) Fifty ($50.00) Dollars or (b) $.05 for each dollar so due,
and such late charge shall be deemed Additional Rent for purposes of this Lease;
provided, however, that such late charge shall be due immediately without notice
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upon any failure to pay when due during any twelve (12) month period in which
Landlord shall have given such written notice on two (2) prior occasions.
7. CONSTRUCTION OF LEASED SPACE.
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(a) Landlord shall, without cost to Tenant except as provided in the
Work Letter, complete "Landlord's Work" as defined in the Work Letter attached
hereto. Tenant shall, without cost to Landlord, furnish the drawings and
specifications as Landlord may require to complete the Tenant Improvements and,
in addition, shall complete the construction and other items of work in the
Leased Space which are not within the scope of Landlord's Work. If, at Tenant's
request, Landlord performs any items of work or furnishes any materials which
Landlord is not required to perform or furnish hereunder, Tenant shall pay
Landlord for such additional work and materials, at such reasonable rates as
Landlord may charge. If the TI Plans as defined in the Work Letter, or a
description thereof which is reasonable to identify same, have not been attached
hereto upon execution hereof, the TI Plans when completed in accordance with the
Work Letter shall be initialed for identification by Landlord and Tenant and
become part of this Lease when so initialed.
(b) Within thirty (30) days after the Commencement Date, Tenant shall
give Landlord a written list ("Final Punch List") of all contended defects, if
any, in Landlord's construction work and of all contended variances in
Landlord's Work from the requirements hereof. Except for defects or
deficiencies which are not then discoverable by Tenant, or which are covered by
third-party warranties or Landlord's warranty set forth in the Work Letter
(collectively, "Defects"), any and all variances not set forth in the Final
Punch List shall be deemed to be waived by Tenant. Landlord shall correct all
items on the Final Punch List that constitute valid defects or variances within
sixty (60) days after Landlord's receipt of the Final Punch List, unless the
nature of the defect or variance is such that a longer period of time is
required to repair or correct the same, in which case Landlord shall exercise
due diligence in correcting such defect or variance at the earliest possible
date and with a minimum of interference with the operation of Tenant. If
Landlord does not complete such work within the time specified above, Tenant
shall have the right to complete such work at Landlord's expense. Any
disagreement that may arise between Landlord and Tenant with respect to whether
an item on the Final Punch List constitutes a valid defect or variance shall be
conclusively resolved in the manner contemplated by the Work Letter.
(c) By occupying the Leased Space as Tenant, Tenant shall be deemed to
have accepted the Leased Space and to have acknowledged that the Leased Space is
in the condition required by this Lease, except as to any defects or variances
set forth on the Final Punch List or Defects.
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8. TENANT'S ALTERATIONS.
--------------------
(a) Except as hereafter provided, Tenant shall make no alterations,
additions or improvements ("Tenant Alterations") to the Leased Space without the
consent of Landlord, which consent shall not be unreasonably withheld, delayed
or conditioned. At the time of Landlord's consent, Landlord shall designate
whether Tenant shall be required to remove the proposed Tenant Alteration upon
termination of this Lease, and the absence of such designation in Landlord's
written consent shall be deemed Landlord's agreement that Tenant shall not be
obligated to remove Tenant Alterations upon the termination of this Lease.
Landlord also may impose such reasonable conditions as part of its consent as
Landlord deems appropriate, taking into consideration the nature of the proposed
Tenant Alteration, including, without limitation, requiring Tenant to furnish
Landlord with security for the payment of all costs to be incurred in connection
with such work, insurance, and copies of the plans, specification and permits
necessary for such work. Nothing herein, however, shall be construed to obligate
Tenant to construct any Tenant Alteration for which Landlord has given its
consent.
(b) Landlord's consent shall not be required for Tenant Alterations which
(i) do not adversely impact the structural integrity of the Building or the
systems serving the Building or their operation, (ii) are not visible from the
Building exterior and (iii) qualify under the following:
(A) The Tenant Alteration is to be made to portions of the Leased
Premises other than the laboratory areas and the cost thereof is $10,000 or less
with respect to any Tenant Alteration project (or $20,000 or less in the
aggregate with respect to Tenant Alteration projects undertaken over any twelve
(12) consecutive month period); or
(B) The Tenant Alteration is to be made to the laboratory areas of
the Leased Premises and the cost thereof is $50,000 or less with respect to any
Tenant Alteration project (or $100,000 or less in the aggregate with respect to
Tenant Alteration projects undertaken over any twelve (12) consecutive month
period).
Tenant Alterations described in this subsection (b) for which Landlord's consent
is not required hereinafter are called "Permitted Tenant Alterations."
Notwithstanding the foregoing, painting or carpeting of the interior of the
Leased Space and like cosmetic improvements shall not be deemed Tenant
Alterations regardless of the cost thereof. Tenant shall not be obligated to
remove Permitted Tenant Alterations upon the termination of this Lease unless an
Event of Default has not occurred which is then continuing and Landlord so
requires such removal.
(c) All Tenant Alterations shall be done at Tenant's expense by
contractors approved by Landlord, which consent shall not be unreasonably
withheld, delayed or conditioned and shall be deemed given unless Landlord
notifies Tenant of its objections within ten (10) business days after delivery
of Tenant's request for consent. With respect to Tenant Alterations other than
the Permitted Tenant Alterations, no work shall be performed until the plans
therefore have been approved by Landlord, which approval shall not be
unreasonably withheld, delayed or
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conditioned and shall be deemed approved unless Landlord notifies Tenant of
objections to the proposed plans within ten (10) business days after delivery to
Landlord of a complete set of the plans therefor. In connection with the review
of plans submitted by Tenant, Landlord shall be reimbursed by Tenant for
Landlord's cost in reviewing such plans at the rate of $60 per hour; subject to
reasonable increase to reflect the then current hourly charge imposed for such
review by Landlord for its tenants in the Center generally, and prior to
undertaking any such review, Landlord shall provide a statement of the maximum
review hours to be dedicated to such review. With respect to Permitted Tenant
Alterations, Tenant shall provide Landlord with a copy of Tenant's application
for a building permit therefor, if applicable, (together with all attachments
thereto), and no review fee shall be charged to Tenant by Landlord in connection
therewith nor shall Landlord's approval of such application be required. Tenant
shall provide copies of as-built plans and specifications for all Tenant
Alterations to Landlord within a reasonable time of completion of the Tenant
Alteration. All Tenant Alterations shall be done in a first class, workmanlike
manner and shall comply with all insurance requirements then made available to
Tenant and all applicable laws, ordinances, rules and regulations of
governmental authorities having jurisdiction thereover, and, where applicable,
with all reasonable requirements of Landlord imposed as a condition of such
consent.
(d) If, as a condition of Landlord's consent, removal of a Tenant
Alteration is required at termination of this Lease, Tenant shall promptly
remove such Tenant Alterations and repair any damage occasioned by such removal.
In default thereof, Landlord may effect said removal and repairs at Tenant's
expense. With respect to any Tenant Alterations which Tenant is not obligated
to remove hereunder (including without limitation Permitted Tenant Alterations),
such Tenant Alterations, if not removed by Tenant upon the termination of this
Lease, shall be deemed abandoned by Tenant, and deemed a part of Landlord's
property, notwithstanding any provision of Section 16 to the contrary.
9. MECHANIC'S LIENS.
----------------
Prior to Tenant's performing or ordering (other than through Landlord or
Landlord's contractors) any construction or other work on or about the Leased
Space for which a lien could be filed against the Leased Space or the Building,
Tenant shall enter into a written waiver of liens agreement with the contractor
who is to perform such work, and such written agreement shall be filed, in
accordance with the Mechanics' Lien Law of the state where the Building is
located prior to the commencement of such work. Tenant's failure to enter into
or record such waiver of liens shall not be deemed a default hereunder.
Notwithstanding the foregoing, if any mechanics' or other lien shall be filed
against the Leased Space or the Building purporting to be for labor or material
furnished or to be furnished at the request of the Tenant other than through
Landlord or Landlord's contractors, then Tenant shall at its expense cause such
lien to be discharged of record by payment, bond or otherwise, within fifteen
(15) days after Tenant receives notice of the filing thereof. If Tenant shall
fail to cause such lien to be discharged by payment, bond or otherwise within
such period, Landlord may cause such lien to be discharged by payment, bond or
otherwise, without investigation as to the validity thereof or as to any offsets
or defenses thereto, and Tenant shall, upon demand, reimburse Landlord for all
amounts paid and costs incurred,
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including attorneys' fees, in having such lien discharged of record. If,
however, Tenant notifies Landlord during such fifteen (15) day period that it
disputes the validity of such lien and provides security reasonably acceptable
to Landlord in an amount which is sufficient to discharge such lien in full,
Landlord shall refrain from satisfying such lien for a period not to exceed one
hundred twenty (120) days.
10. CONDITION OF LEASED SPACE.
-------------------------
Tenant acknowledges and agrees that, except as expressly set forth in this
Lease, there have been no representations or warranties made by or on behalf of
Landlord with respect to the Leased Space or the Building or with respect to the
suitability of either for the conduct of Tenant's Business.
11. COMMON AREA MAINTENANCE.
-----------------------
(a) Landlord shall provide all maintenance, repairs and replacements to
the common areas of the Building if the Building is a multi-tenant Building, and
to all common areas external to the Building. The cost of same shall be included
in the Operating Expenses to the extent provided in Section 3(a)(iii) unless the
necessity for the foregoing arises (a) from the gross negligence or willful and
wanton misconduct of Landlord or its employees or, subject to Section
3(a)(iii)(i) , by any other tenant of the Building or such tenant's agents,
employees, licensees, or invitees, in which case such cost shall not be included
as part of the Operating Expenses but shall be paid by Landlord (without
prejudice to Landlord's right to recover same from the responsible party), or
(b) from the negligence or willful and wanton misconduct of Tenant, its agents,
employees, licensees or invitees, in which case such cost shall be paid by
Tenant. Any such maintenance, replacements or repairs and any labor performed or
materials furnished by or upon the direction of Landlord shall be performed in a
good and workmanlike manner, using only materials of at least the same quality
and integrity as that being repaired or replaced, and performed and furnished in
compliance with all applicable laws, regulations, ordinances and requirements of
all duly constituted authorities or governmental bodies having jurisdiction over
the Building, and the requirements of any board of underwriters having
jurisdiction thereof. It is understood that this is a "triple net" lease, with
rent paid to Landlord intended to be net of taxes, repairs not covered by this
Section or Section 14, insurance and Operating Expenses.
(b) Unless otherwise agreed with Tenant in writing, Landlord agrees that
all maintenance to the common areas external to the Building which the
Association offers to perform or is obligated to perform for the benefit of lots
in the Center shall be performed by the Association. Landlord shall use diligent
efforts to enforce any such obligation of the Association. Except during such
period of time as Landlord or its affiliates control the Association, Landlord
shall not be liable in damages or otherwise for temporary delay or failure in
furnishing any service or facility to be provided by the Association.
(c) In the absence of a judgment to the contrary, in no event shall any
delay or failure to provide the services or obligations under subsections (a) or
(b) above, regardless of cause, be
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deemed to be an eviction or disturbance of Tenant's use and possession of the
Leased Space, render Landlord liable to Tenant, authorize abatement of rent,
relieve Tenant from performance of its obligations under this Lease, or result
in a termination of this Lease. The foregoing, however, shall not be deemed to
prevent Tenant's exercise of its rights under Section 42 hereof.
12. ASSIGNMENT AND SUBLETTING.
-------------------------
(a) Tenant shall not, without the prior written consent of Landlord,
assign or mortgage (except as permitted under Section 36(b) hereof) this Lease
or any interest therein or sublet the Leased Space or any part thereof. For the
purposes of this paragraph, the sale or assignment of a controlling interest in
the Tenant corporation or a majority interest in the Tenant partnership as the
case may be shall be deemed an assignment, but the assignment to a parent,
wholly-owned subsidiary of the Tenant or successor corporation shall be
permitted, provided that such assignee assumes the obligations of Tenant and
that such assignment shall not relieve Tenant of its obligations hereunder. For
purposes herein, (A) a successor corporation is one into which Tenant is merged
or consolidated, or which acquired those of Tenant's assets or business located
in the Leased Space as of the date of the assignment, and (B) a controlling
interest shall mean the ownership of fifty percent or more of the beneficial
interest in the person or entity in question, unless the corporation is publicly
traded in which case such transfers of stock (whether or not a controlling
interest) shall not be deemed to be an assignment. As to any other assignment,
Landlord agrees that it shall not unreasonably withhold its consent, provided
the business of Tenant's assignee or subtenant is no more hazardous than that of
Tenant, it being understood that it shall not be unreasonable for Landlord to
require, as a condition of such consent:
(b) That 50% of any money or other economic consideration received by
Tenant as a result of such subletting or assignment and which is not properly
allocable to any lease of Tenant's personal property in the Leased Space or sale
of Tenant's assets from the business operated at the Leased Space or sale of
Tenant's stock or other arms-length transaction, which exceeds, in the
aggregate, the total sums which Tenant is obligated to pay Landlord under this
Lease (pro rated to reflect obligations allocable to that portion of the Leased
Space subject to the sublease or assignment) shall be payable to Landlord as
Additional Rent under this Lease without affecting or reducing any other
obligation of Tenant hereunder; and
(c) Unless otherwise agreed in Landlord's consent, no subletting or
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rental and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rental by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision
hereof. Consent to one assignment or subletting shall not be deemed consent to
any subsequent assignment or subletting. In the event of default by any
assignee of Tenant or any successor of Tenant in the performance of any of the
terms hereof, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against such assignee or successor. Landlord may consent
to subsequent assignment or subletting of this Lease or amendments or
modifications to this Lease with assignees of Tenant, without notifying Tenant,
or any successor
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of Tenant, and without obtaining its or their consent thereto and such action
shall not relieve Tenant of liability under this Lease.
13. ACCESS TO LEASED SPACE.
----------------------
Landlord, its employees and agents, shall have the right to enter the Leased
Space at all reasonable times for the purpose of examining or inspecting the
same, showing the same to prospective purchasers or tenants of the Building, or
mortgagees, and making such alterations, repairs, improvements or additions to
the Leased Space or to the Building as Landlord may deem necessary or desirable
provided such alterations, repairs, improvements or additions do not adversely
affect Tenant's Business or use of the Leased Space or, except with Tenant's
consent, alter the Tenant Improvements performed in accordance with the Work
Letter. Except in case of emergency in Landlord's reasonable judgment, any such
entry shall be after reasonable notice to Tenant and in compliance with Tenant's
practices from time to time established with respect to testing areas or other
areas where confidential information is located. If a representative of Tenant
shall not be present to open and permit entry into the Leased Space at any time
when such entry by Landlord is necessary in an emergency, Landlord may enter by
means of a master key (or forcibly) without liability to Tenant and without such
entry constituting an eviction of Tenant or termination of this Lease. All keys
must be returned to Landlord at the expiration or termination of the Lease.
14. REPAIRS.
-------
(a) Landlord shall perform all maintenance, replacements and repairs
necessary to maintain the roof, load bearing walls (other than paint and wall
coverings), floors (other than carpeting, tile and similar floor coverings),
foundations and other structural elements of the Building, and all plumbing and
electrical fixtures and equipment and HVAC system components serving portions of
the Building in addition to the Leased Space; provided, however, that Landlord
shall not be obligated for any of such repairs until the expiration of a
reasonable period of time after written notice that such repair is needed. The
cost of same shall be included in the Operating Expenses to the extent provided
in Section 3(a)(iii) unless the necessity for any of the foregoing arises (a)
from the gross negligence or wilful and wanton misconduct of Landlord or its
employees or, subject to Section 3(a)(iii)(i) hereof, by any other tenant of
the Building or such tenant's agents, employees, licensees, or invitees, in
which case such cost shall not be included as part of the Operating Expenses but
shall be paid by Landlord (without prejudice to Landlord's right to recover same
from the responsible party), or (b) negligence or wilful and wanton misconduct
of Tenant, its agents, employees, licensees or invitees, in which case such cost
shall be paid by Tenant. Any such maintenance, replacements or repairs and any
labor performed or materials furnished by or upon the direction of Landlord
shall be performed in a good and workmanlike manner, using only materials of at
least the same quality and integrity as that being repaired or replaced, and
performed and furnished in compliance with all applicable laws, regulations,
ordinances and requirements of all duly constituted authorities or governmental
bodies having jurisdiction over the Building, and the requirements of any board
of underwriters having jurisdiction thereof.
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(b) Except as the Landlord is obligated for repairs as provided above or
in Section 11, Tenant shall make, at its sole cost and expense, all repairs
necessary to maintain the Leased Space, including without limitation, all
plumbing, heating, ventilation, air conditioning and electrical lines, pipes,
fixtures and equipment not expressly to be maintained by Landlord pursuant to
subparagraph (a) and shall keep the Leased Space and the fixtures therein in
neat and orderly condition. Without limiting the generality of the foregoing,
Tenant at its expense is specifically required to make promptly all repairs (i)
to that portion of any pipes, lines, ducts, wires or conduits contained within
the Leased Space which exclusively serve the Leased Space; (ii) to the glass
windows, plate glass doors, and any fixtures or appurtenances composed of glass
and which are located within the Leased Space; (iii) to Tenant's sign(s); and
(iv) to any heating or air conditioning equipment installed in and exclusively
servicing the Leased Space. During the Term, Tenant at its own expense shall
keep in place a maintenance contract with a reputable heating and air
conditioning service company reasonably acceptable to Landlord, and provide
Landlord with a copy of the same. If the Tenant refuses or neglects to make such
repairs or fails to diligently prosecute the same to completion after written
notice from Landlord of the need therefore and a reasonable time for cure,
Landlord may make such repairs at the expense of Tenant and such expense shall
be collectible as Additional Rent. Any such repairs and any labor performed or
materials furnished in, on or about the Leased Space shall be performed and
furnished by Tenant in compliance with all applicable laws, regulations,
ordinances and requirements of all duly constituted authorities or central
bodies having jurisdiction over the Building, the requirements of any board of
underwriters having jurisdiction thereof, as well as any reasonable regulations
imposed by Landlord pertaining thereto. Without limitation of the foregoing,
Landlord shall have the right to approve any and all contractors and suppliers
to furnish materials and labor for such repairs, which consent shall not be
unreasonably withheld, delayed or conditioned.
(c) If required solely as a result of Tenant's particular activities at
the Leased Space (as opposed to general occupancy thereof by any tenant), Tenant
also shall comply with, and make any repairs and installations required by any
applicable law.
(d) Provided that Landlord shall exercise reasonable efforts to effectuate
its repairs in a manner which will keep at a minimum Landlord's interference
with Tenant's use and occupancy of the Leased Space, Landlord shall not be
liable by reason of any injury to or interference with Tenant's business arising
from the making of any repairs, alterations, additions or improvements in or to
the Leased Space, or the Building or Center or to any appurtenances or equipment
therein.
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15. TERMINATION AND EXTENSION.
-------------------------
(a) It is hereby mutually agreed that either party hereto may terminate
this Lease at the end of the Term if a renewal right has not been exercised or,
if exercised, upon the end of any renewal term, by giving to the other party
written notice at least ninety (90) days prior thereto. In default of such
notice, this Lease shall continue upon the same terms and conditions in force
immediately prior to the expiration of the term hereof (except that the monthly
installment of Minimum Annual Rent shall be increased by the CPI Adjustment
(defined in Section 46) for a further period of one (1) month and so on from
month to month unless and until terminated by either party hereto giving the
other thirty (30) days' written notice for removal previous to the expiration of
the then current term; provided, however, that if Landlord shall have given
written notice prior to the expiration of the Term if a renewal right has not
been exercised or, if exercised, prior to the expiration of such renewal term,
of its intention to make changes to the terms and conditions of this Lease and
Tenant shall not within ten business (10) days from such notice notify Landlord
in writing of Tenant's intention to vacate the Leased Space at the end of the
then current term, Tenant shall be considered as Tenant under the terms and
conditions mentioned in such notice for a further term as above provided, or for
such further term as may be stated in such notice. In the event that Tenant
shall have given notice as stipulated in this Lease of intention to vacate the
Leased Space at the end of the Term or any renewal or extension thereof and
shall fail or refuse so to vacate same on the date designated by such notice,
then it is expressly agreed that Landlord shall have the option, either
(i) to disregard the notice so given as having no effect, in which
case the terms and conditions of this Section shall apply; or
(ii) Landlord may, at any time, give Tenant ten (10) days' written
notice of its intention to terminate this Lease; whereupon Tenant expressly
agrees to vacate the Leased Space at the expiration of the said period of ten
(10) days specified in said notice.
(b) If Tenant shall hold over after the expiration of the Term hereof (as
may be extended pursuant subsection (a) above), and Landlord shall not give
consent to such hold over by Tenant, such tenancy may be terminated as permitted
by applicable state law, and until Tenant has vacated the Leased Space, it
agrees to pay to Landlord rent at a monthly rental double the rate payable by
Tenant at the expiration of the Term of this Lease.
16. SURRENDER OF LEASED SPACE.
-------------------------
At the end of the Term of this Lease, Tenant shall surrender the Leased Space to
Landlord, in broom clean condition and in good order and repair except for
ordinary wear and tear and damage for which Tenant is not obligated to make
repairs under this Lease. Subject to Sections 8 and 9 hereof and if Event of
Default has not occurred which is then continuing, Tenant shall have the right
at the end of the Term hereof to remove any Tenant Alterations and any
equipment, furniture, trade fixtures or other personal property placed in the
Leased Space by Tenant, provided that Tenant promptly repairs any damage to the
Leased Space caused by such removal.
-17-
Tenant shall repair all damage to the Leased Space caused by such removal and
restore the Leased Space to the condition in which they were prior to the
installation of the items so removed, reasonable wear and tear and damage by
casualty not caused by Tenant excepted. Tenant shall surrender the Leased Space
to Landlord at the end of the term hereof, without notice of any kind (except to
the extent required by Section 15 above), and Tenant waives all right to any
such notice as may be provided under any laws now or hereafter in effect in
Pennsylvania. If Tenant shall fail to remove any Tenant Alterations which it
was required to remove pursuant to Section 8 of this Lease or any of its
equipment, furniture, trade fixtures or other personal property, Landlord may
remove and store the same at the expense of Tenant or sell the same on behalf of
Tenant at public or private sale in such manner as is commercially reasonable,
with any proceeds thereof to be first applied to the costs and expenses,
including attorney's fees, of the storage and sale and the payment of any
amounts owed hereunder by Tenant.
17. INDEMNIFICATION AND INSURANCE.
-----------------------------
(a) Tenant covenants and agrees that it shall, without notice or demand
and at its own cost and expense, indemnify and save harmless Landlord against
and from, and Landlord shall not be liable to Tenant for, any and all claims by
or on behalf of any person arising in any manner whatsoever from, out of, or in
connection with any accident, death, injury, or damage, loss or theft of
property in or about the Leased Space (whether involving property belonging to
Tenant or any other person) resulting from the negligence or wilful misconduct
of Tenant, its agents, employees, licensees or invitees, and from and against
all costs, reasonable attorney fees, expenses and liabilities incurred in or as
a result of any such claim or action or proceeding brought against Landlord by
reason of any such claim. Tenant, upon notice from Landlord, covenants to resist
or defend such action or proceeding by legal counsel reasonably satisfactory to
Landlord.
(b) Tenant shall keep in force public liability insurance with respect to
the Leased Space, including contractual insurance with respect to the covenants
and agreements above, with companies and in form reasonably acceptable to
Landlord to afford protection of not less than One Million ($1,000,000.00)
Dollars with respect to personal injury or death and property damage, and naming
Landlord as an additional insured and providing not less than thirty (30) days'
notice of cancellation. Copies of such policies or a certificate of insurance
evidencing same shall be delivered to Landlord.
(c) Landlord covenants and agrees that it shall, without notice or demand
and at its own cost and expense, indemnify and save harmless Tenant against and
from, and Tenant shall not be liable to Landlord for, any and all claims by or
on behalf of any person arising in any manner whatsoever from, out of, or in
connection with any accident, death, injury, or damage, loss or theft of
property in or about the Leased Space (whether involving property belonging to
Landlord or any other person) resulting from the gross negligence or wanton and
wilful misconduct of Landlord, its agents or employees, and from and against all
costs, reasonable attorney fees, expenses and liabilities incurred in or as a
result of any such claim or action or proceeding brought against Tenant by
reason of any such claim. Landlord, upon notice from
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Tenant covenants to resist or defend such action or proceeding by legal counsel
reasonably satisfactory to Tenant.
(d) Landlord shall keep in force public liability insurance with respect
to the Building, including contractual insurance with respect to the covenants
and agreements above, with companies and in form reasonably acceptable to Tenant
to afford protection of not less than One Million ($1,000,000.00) Dollars with
respect to personal injury or death and property damage, and naming Tenant as an
additional insured and providing not less than thirty (30) days' notice of
cancellation. Copies of such policies or a certificate of insurance evidencing
same shall be delivered to Tenant.
(e) All insurance policies also shall contain a clause or endorsement
denying the insurer any rights of subrogation against Landlord, in the case of
Tenant's insurer, and Tenant, in the case of Landlord's insurer. As to any loss
or damage covered by insurance containing a waiver of subrogation clause or
similar endorsement, each party hereby releases the other, to the extent of such
damaged party's insurance indemnities, from any and all liability for such loss
or damage even if such loss or damage shall be brought about by the fault or
negligence of such other party, or the agents, employees, invitees or licensees
of such other party; provided however, that this release shall be effective only
with respect to loss or damage occurring during such time as the applicable
policies of insurance shall contain a clause to the effect that this release
shall not affect said policies or the right of the insured to recover
thereunder. If any policy does not contain such, the insured party shall, at
the written request of the other party to this release, have such a clause added
to said policy if an endorsement so providing is obtainable. This subsection
(e) shall supersede any provisions to the contrary in subsection (a) and (c)
above.
18. FIRE OR OTHER CASUALTY.
----------------------
(a) At all times during the effectiveness of this Lease, Landlord shall
maintain in full force and effect a policy of fire and extended coverage
insurance for the full replacement value of the Building, subject to a
commercially reasonable deductible. The premium for such insurance shall be
included as an Operating Expense. Such coverage shall be issued by any reputable
insurance company licensed in Pennsylvania, with at least a Best's rating of "A"
or better. Landlord agrees to deliver a certificate evidencing such insurance
coverage upon Tenant's request from time to time.
(b) If the Leased Space or the Building is partially damaged by fire or
other casualty such that Tenant is able to conduct its business therein at a
reduced but economically feasible level on a temporary basis, and insurance
proceeds are available to Landlord, the damages shall be repaired by and at the
expense of Landlord and the rent, until such repairs shall be made, shall be
apportioned from the date of such fire or other casualty according to the part
of the Leased Space which is usable by Tenant. Landlord agrees to repair such
damage within a reasonable period of time after receipt from Tenant of written
notice of such damage, except that Tenant agrees to repair and replace its own
furniture, furnishings and equipment which were not provided as part of the
Tenant Improvements. If Landlord is unable to complete reconstruction
-19-
of the damaged premises within two hundred ten (210) days from the date of the
casualty, Tenant shall have the right to terminate this Lease.
(c) If the Leased Space or Building is totally damaged or is rendered
wholly untenantable by fire or other casualty, each party shall have the right
to terminate the Lease by written notice to the other on or before thirty (30)
days after such casualty occurred. If, however, Landlord consents in writing
within thirty (30) days following such casualty to reconstruct the damaged
premises to the condition which existed prior to such casualty and a reputable
contractor acceptable to Landlord and Tenant determines that such reconstruction
can be substantially completed within two hundred ten (210) days from the date
of such casualty, neither party shall have the right to terminate this Lease and
Landlord shall undertake reconstruction of the damaged premises. If, however,
Landlord is unable to complete reconstruction of the damaged premises within two
hundred ten (210) days from the date of the casualty, Tenant shall have the
right to terminate this Lease.
(d) Whenever Landlord shall be obligated hereunder to reconstruct damaged
premises, Landlord agrees to undertake such reconstruction with reasonable
diligence and, if Tenant shall remain in possession of any portion of the Leased
Space, in such manner so as to minimize interference or disruption of Tenant's
use of the Leased Space. Reconstruction shall be performed in a good and
workmanlike manner, in accordance with standard construction practices and
safety procedures, using only materials of at least equal quality and integrity
as the materials damaged by the casualty, undertaken in such manner so as to
restore the damaged premises to substantially the condition which existed prior
to such casualty, and performed and furnished in compliance with all applicable
laws, regulations, ordinances and requirements of all duly constituted
authorities or governmental bodies having jurisdiction over the Building, and
the requirements of any board of underwriters having jurisdiction thereof. For
purposes of implementing the foregoing, the parties agree to substantially
adhere to the practices established by the Work Letter attached hereto.
(e) Upon the termination of this Lease under the conditions hereinbefore
provided, Tenant's liability for rent shall cease as of the day of the casualty.
Tenant shall promptly vacate and surrender the Leased Space to Landlord in its
"as is" condition, whereupon neither party shall have any further rights or
obligations hereunder except that Landlord shall reimburse to Tenant (i) any
portion of the Security Deposit not otherwise applied by Landlord in accordance
with this Lease, (ii) prepaid Rent paid by Tenant, and (iii) an amount equal to
the unamortized value of Tenant's Direct Payment Portion which would have
amortized over the remaining portion of the Initial Term. Such reimbursement
shall be made in full to Tenant not later than thirty (30) days following
termination of this Lease, and if not so paid, such unpaid amounts shall accrue
interest at the Default Rate specified in this Lease from the date of
termination until paid in full. The limitations set forth in Section 28 hereof
shall not apply Landlord's liability for payment of the foregoing amounts.
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19. CONDEMNATION.
------------
If the Leased Space or the Building or any material part of either shall be
condemned or otherwise subject to an eminent domain proceeding, then and in that
event, upon the transfer of title to the authority exercising such power, this
Lease shall terminate, and all rent paid in advance shall be apportioned as of
the date of such termination. Notwithstanding the foregoing, if only a part of
the Leased Space shall be so taken and the part not so taken shall be sufficient
in Tenant's reasonable judgment for the economic and feasible operation of
Tenant's business, Tenant, at its election, may retain the part not so taken and
there shall be a proportional reduction in the rent. All compensation awarded
or paid upon such a total or partial taking of the Leased Space shall belong to
and be the property of the Landlord and Tenant shall have the right to
compensation only to the extent the Tenant Improvements are impacted by such
condemnation and then only to the extent of Tenant's Direct Payment Portion (as
defined in Section 3 of the Work Letter). The foregoing shall not, however, be
construed to preclude the Tenant from prosecuting any claim directly against the
condemning authority in such condemnation proceedings for loss of business, or
depreciation to, damage to, or cost of removal of, or for the value of stock,
trade fixtures, furniture, and other personal property belonging to the Tenant,
provided, however, that no such award or claim shall diminish or otherwise
adversely affect the Landlord's award (subject to Tenant's interest therein as
aforesaid).
20. ESTOPPEL CERTIFICATES.
---------------------
At any time, and from time to time, upon the written request of Landlord or any
"Mortgagee" (as defined in section 29 hereof), Tenant, within ten (10) business
days of the date of such written request, agrees to execute and deliver to
Landlord and/or such Mortgagee, a written statement: (a) ratifying this Lease;
(b) confirming the commencement and expiration dates of the terms of this Lease;
(c) certifying that Tenant is in occupancy of the Leased Space, and that the
Lease is in full force and effect and has not been modified, assigned,
supplemented or amended except by such writings as shall be stated; (d)
certifying that all conditions and agreements under this Lease to be satisfied
or performed by Landlord have been satisfied and performed except as shall be
stated; (e) certifying that Landlord is not in default under the Lease and there
are no defenses or offsets against the enforcement of this Lease by Landlord, or
stating the defaults and/or defenses claimed by Tenant; (f) reciting the amount
of advance rent, if any, paid by Tenant and the date to which such rent has been
paid; (g) reciting the amount of security deposited with Landlord, if any; and
(h) any other information which Landlord or the Mortgagee reasonably may
require. The failure of Tenant to execute, acknowledge and deliver to Landlord
and/or any Mortgagee a statement in accordance with the provisions herein within
the period set forth herein shall constitute an acknowledgment by Tenant which
may be relied upon by any person holding or intending to acquire any interest
whatsoever in the Leased Space or the Building that this Lease has not been
assigned, amended, changed or modified, is in full force and effect and that the
Minimum Annual Rent, and Additional Rent have been duly and fully paid not
beyond the respective due dates immediately preceding the date of the request
for such statement and shall constitute as to any persons entitled to rely on
such statements (other than Landlord) a waiver of
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any defaults by Landlord or defenses or offsets against the enforcement of this
Lease by Landlord which may exist prior to the date of the written request.
21. DEFAULT.
-------
The occurrence of any of the following shall constitute an "Event of Default" of
this Lease by Tenant:
(a) A failure by Tenant to pay, when due, any installment of rent
hereunder or any such other sum herein required to be paid by Tenant where such
failure continues for ten (10) days after written notice thereof from Landlord;
provided however said written notice shall not be required to be given by
Landlord more than twice in any twelve (12) month period.
(b) A failure by Tenant to observe and perform any other terms or
conditions of this Lease to be observed or performed by Tenant, where such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided that, if such default is of a nature that cannot be
reasonably cured within such thirty (30) day period, no default shall exist so
long as Tenant has commenced cure within such thirty (30) day period and
diligently pursues same to completion within ninety (90) days.
(c) The making by Tenant of any assignment for the benefit of creditors,
an adjudication that Tenant is bankrupt, insolvent, or unable to pay its debts;
the filing by or against Tenant of a petition in bankruptcy or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days after the filing thereof); the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located in the Leased
Space or of Tenant's interest in this Lease (unless possession is restored to
Tenant within thirty (30) days after such appointment); or the attachment,
execution or levy against, or other judicial seizure of, substantially all of
Tenant's assets located in the Leased Space or of Tenant's interest in this
Lease (unless the same is discharged within thirty (30) days after issuance
thereof).
22. REMEDIES.
--------
Upon the occurrence of any Event of Default by Tenant:
(a) Landlord may perform for the account of Tenant any such act, the
omission of which constituted an Event of Default by Tenant and immediately
recover as Additional Rent any expenditures made and the amount of any
obligations incurred in connection therewith, plus interest at the Default Rate
from the date the obligations are incurred by Landlord until payment therefor to
Landlord, whether before or after entry of judgment and issuance of execution
thereon.
(b) Landlord may accelerate all Minimum Annual Rent and Additional Rent
due for the balance of the Term of this Lease and declare the same to be
immediately due and payable.
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In determining the amount of any future payments due Landlord relating to
Operating Expenses and/or Real Estate Taxes, Landlord shall make such
determination based upon the most recent estimates of Operating Expenses and/or
Real Estate Taxes available.
(c) Landlord, at its option, may serve notice upon Tenant that this Lease
and the then unexpired term thereof shall cease and expire and become absolutely
void on the date specified in such notice, to be not less than five (5) days
after the date of such notice without any right on the part of the Tenant to
save the forfeiture by payment of any sum due or by the performance of any term
or condition broken; and, thereupon and at the expiration of the time limit in
such notice, this Lease and the Term hereof, as well as the right, title and
interest of the Tenant hereunder, shall wholly cease and expire and become void
in the same manner and with the same force and effect (except as to Tenant's
liability) as if the date fixed in such notice were the date herein granted for
expiration of the Term of this Lease. Thereupon, Tenant shall immediately quit
and surrender to Landlord the Leased Space, and Landlord may enter into and
repossess the Leased Space by summary proceedings, detainer, ejectment or
otherwise and remove all occupants thereof and, at Landlord's option, any
property thereon, without being liable to indictment, prosecution or damages
therefor. No such expiration or termination of this Lease shall relieve Tenant
of its liability and obligations under this Lease, whether or not the Leased
Space shall be relet.
(d) Landlord may, at any time after the occurrence of any Event of
Default, re-enter and repossess the Leased Space and any part thereof and
attempt in its own name, as agent for Tenant if this Lease not be terminated, or
on its own behalf if this Lease be terminated, to relet all or any part of the
Leased Space for and upon such terms and to such persons and for such period or
periods as Landlord, in its sole discretion, shall determine, including a term
beyond the termination of this Lease; and Landlord shall not be required to
accept any tenant offered by Tenant or observe any instruction given by Tenant
about such reletting. For the purpose of such reletting, Landlord may decorate
or make repairs, changes, alterations or additions in or to the Leased Space to
the extent deemed by Landlord desirable or convenient; and the cost of such
decoration, repairs, changes, alterations or additions shall be charged to and
be payable by Tenant as Additional Rent hereunder, as well as any reasonable
brokerage and attorneys fees incurred by Landlord; and any sums collected by
Landlord from any new tenant obtained shall be credited against the balance of
the rent due hereunder as aforesaid. Tenant shall pay to Landlord monthly, on
the days when the rent would have been payable under this Lease, the amount due
hereunder less the amount obtained by Landlord from such new tenant.
(e) Landlord shall have the right of injunction, in the event of a breach
or threatened breach by Tenant of any of the terms and conditions hereof, to
restrain the same and the right to invoke any remedy allowed by law or in
equity, whether or not other remedies, indemnities or reimbursements are herein
provided. The rights and remedies given to Landlord in this Lease are distinct,
separate and cumulative remedies; and no one of them, whether or not exercised
by Landlord, shall be deemed to be in exclusion of any of the others.
-23-
(f) In the event of the occurrence of an Event of Default hereunder,
Landlord shall have the right to change the locks on the Leased Space and
exclude Tenant therefrom, and to discontinue all or part of the services and
facilities provided to Tenant under this Lease or otherwise, which action shall
not be deemed an eviction. Such action may be taken, however, only upon five (5
)days prior notice to Tenant, and Tenant hereby releases Landlord from any
liability for any damages sustained by Tenant or its property as a result of the
same.
(g) If Tenant has paid accelerated rent to Landlord and Landlord
thereafter re-lets any portion of the Leased Space, any sums collected by
Landlord from any new tenant obtained in excess of the cost of decoration,
repairs, changes, alterations or additions, and any reasonable brokerage and
attorneys fees incurred by Landlord in connection with such re-letting, to the
extent the same exceed all other damages incurred by Landlord as a result of
Tenant's default, shall be paid to Tenant if, as and when received by Landlord
from the replacement tenant, but in no event shall the amount to be paid to
Tenant by Landlord exceed the amount of accelerated rent and other damages paid
by Tenant to Landlord.
(h) Following an Event of Default, Landlord agrees not to unreasonably
withhold, delay or condition (including, for example, the requirement of any
back-rent payments by Tenant) its consent to any subtenants or assignees which
Tenant may propose for all or any portion of the Leased Space provided that
Landlord's acceptance of any such subtenant or assignee shall not be deemed to
cure Tenant's default nor otherwise relieve Tenant of its obligations hereunder,
unless Landlord otherwise agrees in writing. Any rent paid as a result of any
such assignment or sublease shall be applied in accordance with subsection (g)
above.
23. CONFESSION OF JUDGMENT FOR POSSESSION IN LIMITED CIRCUMSTANCE.
-------------------------------------------------------------
If Tenant fails to vacate the Leased Premises upon termination of this Lease or
an Event of Default under Section 21(a) shall have occurred, Landlord shall have
the further remedy of confession of judgment for possession:
ANY PROTHONOTARY OR ATTORNEY OF ANY COURT OF RECORD MAY APPEAR FOR TENANT TO
FILE AN AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN AMICABLE ACTION FOR
JUDGMENT EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING UNDER TENANT, AND A
JUDGMENT FOR THE RECOVERY BY LANDLORD OF POSSESSION MAY ISSUE FORTHWITH WITHOUT
ANY PRIOR WRIT OR PROCEEDINGS WHATSOEVER. IF FOR ANY REASON AFTER SUCH ACTION
SHALL HAVE BEEN COMMENCED, IT SHALL BE CANCELED OR SUSPENDED AND POSSESSION OF
THE LEASED SPACE REMAINS IN OR IS RESTORED TO TENANT, LANDLORD SHALL HAVE THE
RIGHT UPON ANY SUBSEQUENT DEFAULT OR TERMINATION OF THIS LEASE OR ANY RENEWAL OR
EXTENSION HEREOF, TO BRING ONE OR MORE AMICABLE ACTIONS IN EJECTMENT AS
HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE LEASED SPACE. IF IN ANY
AMICABLE ACTION IN EJECTMENT, OR IN ASSUMPSIT FOR RENT OR CHARGES, LANDLORD
SHALL CAUSE TO BE FILED IN SUCH ACTION
-24-
AN AFFIDAVIT SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF
JUDGMENT AND IF A TRUE COPY OF THIS LEASE (AND THE TRUTH OF THE COPY STATED IN
SUCH AFFIDAVIT SHALL BE SUFFICIENT PROOF) BE FILED IN SUCH ACTION, IT SHALL NOT
BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY LAW, RULE OF
COURT, CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING. TENANT EXPRESSLY
RELEASES TO LANDLORD, AND TO ANY AND ALL ATTORNEYS WHO MAY APPEAR FOR TENANT,
ALL ERRORS IN THE SAID PROCEEDINGS, AND ALL LIABILITY THEREFOR.
24. WAIVER.
------
The failure or delay on the part of either party to enforce or exercise at any
time any of the terms and conditions of this Lease shall in no way be construed
to be a waiver thereof, nor in any way to affect the validity of this Lease or
any part hereof, or the right of such party to thereafter enforce each and every
such term or condition. No waiver by either party of any breach of this Lease
shall be held to be a waiver of any other or subsequent breach. The receipt by
Landlord of rent or the payment by Tenant of rent at a time when a default
exists under this Lease shall not be construed as a waiver of such default. The
receipt by Landlord of a lesser amount than the rent due shall not be construed
to be other than a payment on account of the rent then due, nor shall any
statement on Tenant's check or any letter accompanying Tenant's check be deemed
an accord and satisfaction, and Landlord may accept such payment without
prejudice to Landlord's right to recover the balance of the rent due or to
pursue any other remedies provided in this Lease. No act or thing done by this
Lease shall be deemed an acceptance or a surrender of the Leased Space, and no
agreement to accept such a surrender shall be valid unless in writing and signed
by the party against whom enforcement is sought.
25. QUIET ENJOYMENT.
---------------
If and so long as Tenant pays the rent reserved hereunder and observes and
performs all the terms and conditions on Tenant's part to be observed and
performed hereunder, Tenant shall and may peaceably and quietly have, hold and
enjoy the Leased Space for the entire Term hereof, subject to all of the
provisions of this Lease.
26. FORCE MAJEURE.
-------------
Time periods for performance of each party's obligations (including without
limitation construction obligations) under any of the terms of this Lease shall
be extended for periods of time during which performance is prevented due to
circumstances beyond the performing party's control, including without
limitation, embargoes, governmental regulations, act of God, war or other
strife, shortages or unavailability of materials or equipment which are "special
order items" described in the TI Plans or Change Orders, strikes, lockouts,
adverse weather conditions, bankruptcy or breach of contract by a subcontractor
(collectively, "Force Majeure). Force Majeure shall not apply, however, to any
monetary obligation hereunder. Notwithstanding the
-25-
foregoing, Tenant Delays which arise from Force Majeure shall extend the Target
Date without triggering any advance of the date rental obligations commence
hereunder.
27. SUCCESSORS.
----------
The respective rights and obligations provided in this Lease shall bind and
shall inure to the parties hereto, and their successors and permitted assigns.
28. LANDLORD'S LIABILITY.
--------------------
Landlord's responsibility under this Lease shall be limited to its interest in
the Leased Space and in the Building, and no members of Landlord's partnership
shall be personally liable hereunder. Tenant agrees to look solely to Landlord's
interest in the Leased Space and in the Building for the collection of any
judgment, and, in entering any such judgment, the person entering the same shall
request the prothonotary to xxxx the judgment index accordingly.
Notwithstanding the foregoing, at all times during the term of this Lease,
Landlord shall maintain a minimum equity in the Building equal to the total
Direct Payment Portion (as defined in the Work Letter) paid by Tenant. If the
Leased Space or the Building is transferred or conveyed, Landlord shall be
relieved of all covenants and obligations under this Lease thereafter accruing,
provided that notice of said transfer or conveyance is given to Tenant by
Landlord.
29. SUBORDINATION.
-------------
Landlord represents that no Mortgages (hereafter defined) currently encumber the
Building, any part thereof, or the land on which it is situate. Upon delivery
of a nondisturbance and attornment agreement which is reasonably satisfactory to
Tenant, this Lease is, and all of Tenant's rights hereunder are and shall always
be, subject and subordinate to any such mortgage, leases of Landlord's property
(in sale-leaseback) pursuant to which Landlord has or shall retain the right of
possession of the Leased Space (and/or the Building) or security instruments
(collectively called "Mortgage") that now exist, or may hereafter be placed upon
the Leased Space or the Building, or any part thereof and all advances made or
to be made thereunder and extensions thereof, and if the holder of any such
interest forecloses or extinguishes Landlord's rights in the Building or Leased
Space, Tenant shall attorn to and recognize any such holder as the successor
Landlord under this Lease. The aforesaid provision shall be self-operative and
no further instrument or document shall be necessary unless required by any such
Mortgagee or purchaser. Notwithstanding anything to the contrary set forth
above, any Mortgagee may at any time subordinate its Mortgage to this Lease,
without Tenant's consent, by execution of a written document subordinating such
Mortgage to this Lease to the extent set forth therein, thereupon this Lease
shall be deemed prior to such Mortgage. Should Landlord or any Mortgagee or
purchaser desire confirmation of either such subordination or such attornment,
as the case may be, Tenant upon written request, and from time to time, will
execute and deliver without charge and in form reasonably satisfactory to
Tenant, Landlord, to the Mortgagee or the purchaser all instruments and/or
documents that may be required to acknowledge such subordination and/or
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agreement to attorn, in recordable form within ten (10) business days following
a request therefor from Landlord.
30. RULES AND REGULATIONS.
---------------------
Tenant agrees to comply with the rules and regulations established by Landlord
from time to time, which Landlord agrees will be applied uniformly to all
tenants; provided, however, that none of such rules and regulation materially
and adversely affect Tenant's rights hereunder or operation of Tenant's Business
from the Leased Space, and Tenant is afforded a reasonable time from notice
thereof to achieve compliance therewith. The existing rules and regulations are
attached hereto as Exhibit "D."
------------
31. GOVERNING LAW.
-------------
This Lease shall be governed by and construed in accordance with the laws of the
state in which the Building is located.
32. SEVERABILITY.
------------
If any provisions of this Lease shall prove to be invalid, void or illegal, it
shall in no way affect any other provision hereof and the remaining provisions
shall nevertheless remain in full force and effect.
33. NOTICES.
-------
All notices and statements required or permitted under this Lease shall be in
writing and delivered by either (a) United States Registered or Certified Mail,
return receipt requested, postage prepaid, (b) Federal Express or other
nationally recognized overnight courier service, fee prepaid, or (c) hand
delivery against written receipt therefor, in each case addressed as follows:
As to Tenant prior to Commencement Date: ViroPharma Incorporated
00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
As to Tenant as of the Commencement Date: ViroPharma Incorporated
Eagleview Corporate Center
000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Attention: General Counsel
As to Landlord: The Xxxxxx Group
X.X. Xxx 000
717 Constitution Drive
-00-
Xxxxxxxxx Xxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Either party may at any time, in the manner set forth for giving notices to the
other, designate a different address to which notices to it shall be sent.
Notice given in accordance with this Section shall be deemed given and received
as of the earlier of (i) actual receipt or (ii) first attempted delivery which
is refused (as opposed to being returned for insufficient postage/fee, improper
address or like cause).
34. BROKERS.
-------
Tenant represents and warrants to Landlord that Tenant has not dealt with any
broker, firm, company or person in connection with the negotiation for or the
obtaining of this Lease, and each party shall indemnify, defend and hold
harmless the other from and against any claim by any person claiming a
commission or other form of compensation by virtue of having dealt with such
party with regard to this Lease, and any attorneys fees or other expenses
incurred by the other party in connection therewith.
35. SIGNS.
-----
Tenant shall not, without the prior written consent of Landlord, paint, place or
erect any sign on the exterior doors or walls of the Leased Space or of the
Building or Center. Subject to applicable zoning requirements and Landlord and
Tenant's mutual agreement on sign graphics not to be unreasonably withheld,
Tenant shall have the right to maintain two signs on the Real Estate (hereafter
defined in Section 44(a)(i)) as follows: (a) one sign shall be located at a
mutually agreeable site fronting on Eagleview Boulevard and have dimensions not
in excess of five (5) feet high by fifteen (15) feet wide, and (b) the other
sign shall be at a mutually agreeable site visible (as to sign structure not
necessarily sign graphics) from Route 100 and the Pennsylvania Turnpike and,
unless otherwise agreed by Landlord and Tenant, shall have maximum dimensions of
five (5) feet high by fifteen (15) feet wide. Landlord shall be responsible to
obtain approval from the Association with respect to such signage and, as
declarant under the Covenants, hereby (i) approves the size of the signs
described herein, and (ii) agrees not to unreasonably withhold its consent to
the sign graphics on either sign as long as same is reasonably compatible with
other business signage located within the Center.
36. SECURITY DEPOSIT; SECURITY INTEREST.
-----------------------------------
(a) Security Deposit:
----------------
(i) Upon the execution of this Lease, Tenant agrees to deposit with
Landlord, the sum of $45,899.33 to be held by Landlord as security for the
faithful performance of all the terms and conditions of this Lease ("Security
Deposit"). The Security Deposit initially shall be paid by Tenant to Escrow
Agent (as defined in the Work Letter) who shall hold the Security Deposit in a
segregated account from the other Escrow Funds (also as defined in the Work
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Letter) until the Commencement Date, at which time the Security Deposit shall be
paid directly to Landlord. Should the Tenant breach any of the terms and
conditions of this Lease which continues beyond any applicable cure period and
required notice, Landlord shall have the right, at any time, to apply the
Security Deposit or any part thereof, for the purpose of curing any such default
or for the purpose of reimbursing Landlord for any damage or costs occasioned by
such default, but the right of Landlord to apply the Security Deposit shall not
affect any other remedies available to Landlord under this Lease or under
applicable law. If the Security Deposit, or any part thereof, is so applied by
Landlord, Tenant shall, within ten (10) days after demand, deposit additional
funds with Landlord to restore the Security Deposit, and failure to do so shall
constitute an event of default under this Lease.
(ii) If the Tenant shall have complied with all material terms and
conditions of this Lease at the expiration of this Lease, the Security Deposit
(without interest and amounts properly withdrawn by Landlord and not refunded by
Tenant) shall be refunded to Tenant within thirty (30) days after the expiration
or sooner termination of this Lease (including without limitation permitted
terminations hereunder and terminations due to Landlord's default which
continues beyond applicable grace and cure periods following notice where
applicable); provided, however, that Tenant first shall have vacated the Leased
Space and surrendered possession thereof to the Landlord by delivery of keys, in
accordance with the Lease provisions and shall have returned the Leased Space to
Landlord in the condition required hereunder.
(iii) Nothing herein contained shall require Landlord to hold the
sums so deposited as a trust fund, nor establish any relationship other than
that of debtor and creditor with respect to said funds so deposited.
(iv) If Landlord shall assign or otherwise transfer its interest in
this Lease, Landlord shall transfer the Security Deposit to the assignee or
other transferee of such interest (with like obligation to transfer to any
subsequent assignee or other transferee), and upon such transfer, Landlord shall
be released and relieved from all liability and/or responsibility with respect
to this Security Deposit and/or the return or application thereof.
(b) As security for Tenant's performance of its obligations under this
Lease, and subject to the provision hereof, Tenant hereby grants to Landlord a
security interest under the Uniform Commercial Code in all fume hoods and
casework on or about the Leased Space which have been acquired or provided as
part of the Tenant Improvements (valued at approximately $240,000) and purchased
with Tenant's Direct Payment Portion, excluding, however, the Tenant's Lab
Equipment ("Landlord Priority Property"). Such security interest shall continue
only for the Initial Term and the Landlord Priority Property shall be deemed
released from such interest upon the expiration of the Initial Term provided no
Event of Default has occurred hereunder which is then continuing. Although the
foregoing termination and release provision is intended to be self executing, if
requested by Tenant, Landlord shall execute a separate release agreement to
confirm the foregoing. Tenant's acquiescence to Landlord's access to the Leased
Space and the property located therein during the term of this Lease is intended
to effectuate Landlord's possession thereof for the purpose of perfecting such
security interest.
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Notwithstanding such possessory rights of Landlord, so long as Tenant has not
suffered an Event of Default under this Lease, Landlord shall permit Tenant to
use, consume or sell such property in the ordinary course of business. Tenant,
upon request by Landlord, shall execute such financing statements and other
instruments as Landlord may require in order to perfect the lien of such
security interest, and Tenant hereby appoints Landlord (and any assignee of
Landlord's rights under this Lease) as Tenant's attorney-in-fact to execute on
behalf of Tenant, such financing statements and other instruments so requested
by Landlord, it being intended that such power of attorney be coupled with an
interest and irrevocable.
37. USE OF INFORMATION IN ADVERTISING.
---------------------------------
Landlord and any agent employed by Landlord shall be permitted to utilize the
name of Tenant and any occupant or user of the Leased Space, and other general
information about the Tenant and such occupant or user, and the terms of this
Lease, in advertising and promotional material utilized by them.
38. CAPTIONS.
--------
The title to paragraphs of this Lease are for convenience of reference only, and
are not to be construed as defining, limiting or modifying the scope or intent
of any of the terms and conditions of this Lease.
39. ENTIRE AGREEMENT.
----------------
This Lease contains all covenants and agreements between Landlord and Tenant
relating in any manner to the rental, use and occupancy of the Leased Space and
Tenant's use of the Building and other matters set forth in this Lease. No
prior agreement or understanding pertaining to the same shall be valid or of any
force or effect and the terms, covenants and conditions of this Lease shall not
be altered, modified or added to except in writing signed by Landlord and
Tenant.
40. ACCESS TO THE LEASED SPACE AND COMMON AREAS.
-------------------------------------------
Tenant shall have access to the Leased Space and common areas of the Building 24
hours a day, 365 days per year.
41. ATTORNEY FEES.
-------------
The prevailing party in any litigation or arbitration to enforce any obligation
under this Lease shall be entitled to have reimbursed by the other party all
reasonable costs of collection and fees for legal counsel incurred as a result
of enforcing or protecting any rights under this Lease.
-30-
42. SELF-HELP.
----------
(a) If Landlord fails to fulfill its obligations under this Lease, Tenant
shall notify Landlord of such nonperformance. Except in the case where immediate
response is required to avoid physical damage to the Leased Space or persons or
Tenant's property therein, Landlord shall have thirty (30) days to cure such
nonperformance. If Landlord fails to complete cure within such thirty (30) days
after receipt of such notice from Tenant, Tenant shall have the right, but not
the obligation, to carry out such activities on behalf of Landlord so as to cure
such nonperformance. Landlord shall reimburse Tenant for all reasonable costs,
fees and expenses incurred by Tenant in connection with performing such cure.
Such reimbursement shall be made within fifteen (15) days after written demand
by Tenant, which demand shall be accompanied by appropriate invoices or other
materials to substantiate the amount for the requested reimbursement. If
Landlord fails to pay Tenant the amount requested within said fifteen (15) day
period, such unpaid amounts shall accrue interest at the Default Rate which
shall continue to accrue on any judgment obtained by Tenant against Landlord for
recovery of such unreimbursed amounts. Notwithstanding the foregoing rights,
Tenant shall not be entitled to set-off such amounts against Rent due hereunder,
and Tenant hereby expressly waives such right, unless and until Tenant shall
have obtained a final judgment against Landlord with respect to Landlord's
obligation under the Lease which Tenant alleges that Landlord failed to perform,
and such right of set-off shall be applicable only to the amount of the judgment
not paid within thirty (30) days and may be asserted by Tenant against
installments of Rent thereafter coming due.
(b) Following any termination of this Lease as a result of Landlord's
default which continues beyond applicable grace or cure periods following notice
where applicable, Tenant shall be entitled to recover from Landlord the
unamortized value of the Tenant Improvements paid for with Tenant's Direct
Payment Portion remaining to be amortized over the Initial Term of the Lease.
Such amount, if not paid within ten (10) business days of Tenant's demand
therefore, shall accrue interest at the Default Rate from the expiration of such
ten (10) day period until paid in full.
(c) Amounts due from Landlord to which the Default Rate has been applied
shall continue to accrue interest at the Default Rate after entry of judgment
and issuance of execution thereon until paid in full.
43. MEMORANDUM OF LEASE.
-------------------
Tenant, at its expense, shall be entitled to record a memorandum of lease which
Landlord shall execute and acknowledge. Concurrently with the execution of
this Lease, Tenant and Landlord agree to execute such memorandum of lease along
with a termination thereof, both of which shall be in form and substance
sufficient to permit the recording of such instrument and otherwise reasonably
acceptable to Landlord and Tenant. The termination of such memorandum of lease
shall be held in escrow by Riley, Riper, Xxxxxx & Xxxxxxxxx, as escrow agent,
until termination of this Lease, pursuant to a separate escrow agreement with
respect to which the parties agree to negotiate in good faith promptly upon or
following execution hereof. In the absence of such
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escrow agreement, the party designated as escrow agent shall hold such
termination until the earlier of (a) receipt of a court order directing release
of said termination or (b) written instructions from Landlord and Tenant
directing the release of said termination.
44. LANDLORD REPRESENTATIONS AND WARRANTIES.
---------------------------------------
(a) Landlord, to induce Tenant to enter into this Lease, represents,
warrants and agrees, as of the date first set forth above and the Commencement
Date, as follows, which representations and warranties shall survive until one
(1) year after the Building and Leased Space are Substantially Completed:
(i) Title to the Property. To Landlord's Knowledge, Landlord owns
---------------------
the land upon which the Building is to be constructed ("Real Estate") and has
good and marketable title of record thereto, free of any liens or encumbrance
except for the Permitted Title Exceptions described on Exhibit "E" hereto.
-----------
Landlord's ownership of the Real Estate has never been challenged. No parties
other than Landlord are required to execute or consent to this Lease.
(ii) No Third Party Rights. There are no options, licenses,
---------------------
leases, rights of first refusal, contracts for the sale of the Real Estate
(including conditional sales agreements) or similar arrangements respecting the
Real Estate other than as are to be entered with Tenant.
(iii) Condemnation. Landlord has not received any notice or other
------------
communication from any governmental unit or other body having the power of
eminent domain indicating that any part of the Real Estate or other portion of
Eagleview Corporate Center has been, will or may be condemned.
(iv) Proceedings. No action, suit, or proceeding currently is
-----------
pending against the Real Estate or, to Landlord's Knowledge, any other portion
of Eagleview Corporate Center in any court or before any board, commission
agency or other governmental instrumentality. Landlord has not received written
notice of any such threatened action, suit, or proceeding.
(v) Assessments; Public Improvements. No assessments or notice of
--------------------------------
assessments for public improvements have been made against the Real Estate prior
to the date of this Lease which have not been paid, other than impact fees which
will be paid by Landlord, and no work has been commenced on new public
improvements authorized by ordinances enacted prior to the date hereof which
will result in an assessment against the Real Estate.
(vi) Zoning and Approvals. The Real Estate is zoned planned
--------------------
commercial/industrial. All subdivision and land development approvals necessary
for the creation of the Real Estate as a separate lot with direct access to a
public road and for the construction of the Building on the Real Estate
(collectively "Approvals") have been obtained and are in full force and effect
as of this date. Landlord is in full compliance with all Approvals and, to
Landlord's Knowledge, no condition or state of facts now exists which, with the
giving of
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notice or expiration of applicable time period, could cause the invalidation,
termination or revocation of any of the Approvals.
(vii) Soil. To Landlord's Knowledge, the soil and subsurface of the
----
Real Estate is suitable in all respects for the development of the Building.
(viii) Flood Plain. To Landlord's Knowledge, no portion of the Real
-----------
Estate is located within a special flood hazard area as documented in the
"Department of Housing and Urban Development, Federal Insurance Administration
Special Flood Hazard Area Maps."
(ix) Wetlands. To Landlord's Knowledge: (a) no portion of the Real
--------
Estate is comprised of "wetlands" as defined under any Federal, state or local
law, ordinance, regulation or ruling, and (b) no remediation or wetlands
reconstruction is required on the Real Estate on account of the fill or
relocation of any wetlands.
(x) Environmental.
-------------
(A) Environmental Reports. Landlord has delivered to Tenant
---------------------
a true, correct and complete copy of the environmental report titled "Report of
Findings Phase I Environmental Assessment of the Eagleview Development" which
was prepared by SMC Environmental Services Group and bears the reference number
9939-91000 and date of June, 1992 ("Environmental Report"). The Environmental
Report covers the Real Estate, and, to Landlord's Knowledge, no facts or
circumstances have changed at the Real Estate which would make any potion of the
Environmental Report incorrect or misleading.
(B) Compliance; Permits. To Landlord's Knowledge, as of the
-------------------
date of this Lease, the Real Estate is in compliance with all applicable
Federal, state and local laws, regulations, ordinances, rulings , and directives
relating to protection or regulation of the environment ("Environmental Laws")
and with any permit or governmental authorization which relate to the
Environmental Laws.
(C) Underground Storage Tanks. To Landlord's Knowledge, no
-------------------------
underground storage tanks are located on the Real Estate nor have any
underground storage tanks been removed from the Real Estate.
(xi) Utilities. The following utilities currently service the Real
---------
Estate (or are available to service the Real Estate with appropriate
connections): water, sewer, gas, telephone, electricity and conduits for fiber
optics and cable. All approvals required for any necessary connections have
been obtained and remain in full force and effect. All such utilities are
available currently at the boundary of the Real Estate and are available without
any limitation or allocation imposed by the utility provider or applicable
governmental authorities.
(xii) Covenants. The Amended and Restated Declaration of Easements
---------
and Protective Covenants recorded in Deed Book 2074 at Page 240 as amended by a
Supplement and
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Clarification recorded in Deed Book 2363, page 499, a First Amendment recorded
in Deed Book 2596, page 550, a Second Amendment recorded in Deed Book 3590, page
1986, a Third Amendment recorded in Deed Book 3672, page 579 and a Fourth
Amendment recorded on Deed Book 4177, page 2306 (collectively, "Declaration")
and the Rider to Lease or Agreement of Sale Regarding Industrial Waste Discharge
Within Eagleview Corporate Center (which is referred to herein with the
Declaration as the "Covenants"), constitute all of the protective covenants or
similar agreements which effect Eagleview Corporate Center. Landlord represents
and covenants that no private agreements exist which materially and adversely
affect Tenant's rights under this Lease or an owner's rights under the
Covenants, including the ability to seek enforcement thereof, nor will Landlord
hereafter enter into any such agreement.
(xiii) Discovery of Facts. If, prior to the Commencement Date,
------------------
Landlord acquires actual knowledge of any fact which would be required to be
disclosed by Landlord to render its representations and warranties true, correct
and complete, in all material respects, Landlord promptly shall disclose such
fact to Tenant.
(b) For purposes of this Section 44, the term (and similar terms) "to
Landlord's Knowledge" shall mean to the best knowledge of Landlord's President,
Executive Vice President and Director of Commercial Marketing (including
without limitation knowledge deemed to be charged to Landlord by virtue of items
and facts disclosed in the reports of consultants in Landlord's possession
wherever located) such statement or fact is true and correct and such persons
possess no information which make such statement or fact incomplete or
misleading.
45. RENEWAL OPTION.
--------------
(a) Tenant shall have the right and option to extend the term of this
Lease for two (2) consecutive renewal terms, each of five (5) years duration.
The first renewal term, if exercised, shall commence on the day immediately
following the expiration of the Initial Term hereof, and the second renewal
term, if exercised, shall commence on the date immediately following the
expiration of the first renewal term. The option to extend, as well as the
commencement of each renewal term, shall be conditioned on no uncured events of
default by Tenant then existing.
(b) Tenant shall exercise each renewal option only by delivering written
notice of same to Landlord not later than one (1) year prior to the expiration
of the then current term. Tenant's failure to timely exercise an option shall be
deemed a waiver of all rights under this Section, in which event this Lease
shall terminate upon expiration or earlier termination of the then current term.
(c) Each renewal term, if exercised, shall be upon all of the terms and
conditions of this Lease, except for provisions which, by their nature, are
limited to the Initial Term and for the change in Minimum Annual Rent which (i)
for the first renewal term, if exercised, shall be the greater of $15.00 per
rentable square foot or 90% of the FMRV determined in accordance with Subsection
(d) below and (ii) for the second renewal term, if exercised, shall be the
greater of $17.50 per rentable square foot or 90% of the FMRV determined in
accordance with Subsection
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(d) below. If, however, adjustment is made to the Minimum Annual Rent payable
during the Initial Term as required by the Work Letter, the base rent per
rentable square foot, being the $15.00 and $17.50 figures, shall be increased or
decreased proportionately.
(d) Fair Rental Value Calculation. The FMRV shall mean the fair market
-----------------------------
rental rate per square foot of rentable area per year, calculated at the time of
the determination of the FMRV and based on leases within Xxxxxxx County for
comparable space under comparable terms within comparable buildings at the time
in question. Subject to the foregoing, the FMRV shall be determined as follows:
(i) Not later than three (3) months nor sooner than six (6) months
prior to the commencement of a renewal term, Landlord shall notify Tenant in
writing of Landlord's estimate of the FMRV. Within ten (10) days following
Landlord's notice of the FMRV, Tenant, by written notice to Landlord, either
will accept Landlord's statement of the FMRV or notify Landlord of Tenant's
estimate of the FMRV, if different from that set forth in Landlord's notice. In
the absence of such timely notice by Tenant to Landlord, Tenant will be deemed
to have accepted Landlord's statement of FMRV. If Tenant shall furnish a
counter-estimate of the FMRV, Landlord, by written notice to Tenant within ten
(10) days after Landlord's receipt of Tenant's estimate, either may accept
Tenant's estimate in writing or, without prejudice to any position, suggest
alternative figures for the FMRV which are greater than Tenant's estimate
thereof and less than Landlord's initial statement. In the absence of such
timely notice by Landlord to Tenant, Landlord will be deemed to have accepted
Tenant's statement of FMRV. If Landlord and Tenant shall not have an agreement
as to the FMRV within thirty-five (35) days following Tenant's written notice to
Landlord exercising a renewal right, FMRV shall be determined by appraisal as
set forth in subsection (ii) below.
(ii) If FMRV is to be determined by appraisal, such determination
shall be by an appraiser who is a member of the American Institute of Real
Estate Appraisers or its successor organization (M.A.I.), and who is agreed upon
by Landlord and Tenant. If Landlord and Tenant are unable to agree upon an
appraiser within the time period specified in subsection (i) above, then,
within five (5) days thereafter, each shall appoint a M.A.I. appraiser and the
FMRV shall be the FMRV determined by such appraisers or the average thereof if
their respective appraisals differ by ten percent (10%) or less. If either
party shall fail to appoint an appraiser within the time provided, the FMRV
determined by the appraiser timely appointed shall be the FMRV. If the
appraisals delivered by the appraisers appointed by Landlord and Tenant differ
by more than ten percent (10%), the appraisers so appointed shall appoint a
third M.A.I. appraiser and the FMRV shall be the average of the appraisal
delivered by the third appraiser and whichever of the appraisals previously
delivered by the appraisers appointed by Landlord and Tenant is closer to the
appraisal of the third appraiser. If the two appraisers are unable to agree
upon a third appraiser within ten (10) days from the date the later of their two
appraisals is delivered, such appointment, on application by either Landlord or
Tenant, will be made by the then President of the Real Estate Board for Xxxxxxx
County or, if such person is unwilling or unable to make such appointment, by
the American Arbitration Association or its successor organization acting
through its office in Philadelphia or by its office located closest to
Philadelphia. Landlord and
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Tenant each shall pay the fees and expenses of the respective appraiser
appointed by each of them and shall pay in equal shares the fees and expenses of
the appraiser mutually agreed upon by Landlord and Tenant, or as may be
appointed by the first two appraisers, the then President of the Real Estate
Board for Xxxxxxx County or the American Arbitration Association or its
successor, as applicable.
(iii) The determination of FMRV in accordance with this Section
shall be conclusive and binding on Landlord and Tenant.
46. SPACE RESERVATION AND EXPANSION OPTION.
--------------------------------------
(a) Tenant acknowledges that the Real Estate of which the Leased Space
is a part has been approved for a Building of not more than 86,500 rentable
square feet ("Total Building Area") and that, in accordance with this Lease,
Landlord initially will construct only 48,400 rentable square feet of the Total
Building Area. Landlord hereby agrees not to construct the balance of the Total
Building Area for a period of five (5) years from the date of this Lease
("Reservation Period"), subject however to the following terms and conditions:
(i) Landlord's agreement not to construct the balance of the Total
Building Area not leased to Tenant hereby, consisting of 38,100 rentable square
feet ("Expansion Space"), shall be conditioned upon Tenant's payment to
Landlord, on an annual basis, of the following fee ("Reservation Fee"):
(A) On the Commencement Date of this Lease, the sum of
$48,560; and
(B) On or before each anniversary of the Commencement Date,
the amount of $48,560 increased by the percentage change, if any, in the CPI-U
(Philadelphia SMSA) ("CPI Index") from the monthly index which is published
immediately prior to the month in which the Commencement Date occurs to the
monthly index which is published immediately prior to the month in which the
anniversary of the Commencement Date occurs ("CPI Adjustment").
(ii) Tenant shall have the option to release from the Expansion
Space 19,050 square feet thereof (being one-half of the Expansion Space) which
is contiguous to the Building ("Released Area") at any time during the
Reservation Period by written notice to Landlord. If Tenant so notifies
Landlord, the Reservation Fee for the balance of the Reservation Period to be
paid by Tenant shall be reduced by one-half and the portion of the Reservation
Fee paid by Tenant for such year shall be refunded to Tenant, pro-rated for the
balance of such lease year remaining after the effective date of such release.
Upon such release, Landlord, at any time thereafter, may expand the Building by
the amount of the Released Area, but Landlord shall not be obligated to do so.
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(iii) Upon the earlier of (A) Tenant's failure to timely pay a
Reservation Fee, (B) Tenant's written notice to Landlord that it has released
all of its rights under this Section 46, or (C) the fifth (5th) anniversary of
the Commencement Date, Tenant's rights under this Section shall be null and
void, and Landlord, at any time thereafter, may complete the full construction
of the Total Building Area, but Landlord shall not be obligated to do so.
(iv) Any expansion of the Building shall be undertaken by Landlord
in accordance with all applicable laws, regulations, codes, ordinances and
requirements of Landlord's insurance underwriters, and in such manner so as to
cause the exterior configuration and appearance thereof to be architecturally
and aesthetically consistent with the Building as initially constructed. Such
construction shall be performed in a good and workmanlike manner, using only new
materials of at least equal quality and integrity as those included in the
original Building. Such construction shall be undertaken in accordance with
standard construction and safety practices and, during the course thereof,
Landlord shall use reasonable efforts to minimize interference with Tenant's use
and enjoyment of the Leased Space. At all times during the course of
construction, Landlord guarantees that Tenant will have unimpeded access to the
Leased Space and 193 parking spaces.
(b) During the Reservation Period, Tenant shall have the right, as to
any portion of the Expansion Space not released by Tenant, to expand the Leased
Space to include such portion of the Expansion Space; provided that if Tenant
has not released any portion of the Expansion Space, Tenant agrees to lease at
least 50% of the Expansion Space and if Tenant has released a portion of the
Expansion Space, Tenant agrees to lease the balance of the Expansion Space. Such
right shall be exercised by written notice delivered to Landlord, and upon
receipt of such notice, the Leased Space shall be deemed to include the portion
of the Expansion Space as to which Tenant has exercised such right, and Tenant's
rights thereto shall be subject to all terms and conditions of this Lease except
that: (i) Tenant shall have no obligations with respect to the portion of the
Expansion Space so leased by Tenant (including without limitation Rent and
Additional Rent), until such portion of the Expansion Space has been
Substantially Completed as defined in this Lease, (ii) the Minimum Annual Rent
payable with respect to the portion of the Expansion Space so leased by Tenant
shall be calculated during the initial Term of this Lease at a rate of $11.50
per rentable square foot increased by the change in the CPI Index from the month
in which the Commencement Date occurs to the month in which Substantial
Completion of the Expansion Space occurs (or the month closest to each of such
months if the CPI Index is not published for such month), and (iii) upon
Substantial Completion, Tenant's Proportionate Share set forth in Section 3(a)
of this Lease shall be adjusted to increase the rentable area of the Leased
Space by the rentable area of the portion of the Expansion Space leased by
Tenant. Landlord at no additional cost to Tenant agrees to deliver such
Expansion Space to Tenant fit-out as 50% private office space and 50% open
office space in accordance with Landlord's building - standard materials as
defined in the Standard Specifications for Flex Buildings at Eagleview attached
hereto as Exhibit "F" and based upon such space configuration as Landlord and
-----------
Tenant agree, such approval not to be unreasonably withheld, delayed or
conditional.
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(c) Condition to Exercise of Rights. A condition to Tenant's exercise
-------------------------------
of its rights under this Section 46 shall be that no uncured notice of default
exists under this Lease at the time of each exercise. A further condition to
Tenant's exercise of its rights under Section 46(b) shall be that Tenant
demonstrates to Landlord's reasonable satisfaction a financial condition which
supports Tenant's obligations under this Lease for the total space which then
will be leased by Tenant.
47. RIGHT OF FIRST REFUSAL.
----------------------
(a) Rights Available to Tenant. Upon expiration of the Reservation
--------------------------
Period, if Tenant has not exercised its right to lease any portion of the
Expansion Space prior to the expiration of the Reservation Period ("Available
Space"), Landlord shall have the right to lease any portion of the Available
Space completed or proposed to be built by Landlord, which leases may include
within the terms thereof tenant renewal rights. Upon the expiration on each
initial lease of the Available Space to a tenant other than Tenant ("Other
Building Tenants"), Landlord agrees that Landlord will not enter into any
renewal lease (unless expressly permitted by the terms of such lease) or new
lease for any portion of the Available Space which becomes vacant, unless
Landlord shall have complied with the following:
(i) If Landlord desires to market or lease the Available Space,
Landlord shall notify Tenant of such decision in writing ("Offer Notice") and
shall offer to Tenant the opportunity to lease the space described in such Offer
Notice ("RFR Parcel") on the same terms and conditions set forth in the Offer
Notice. The Offer Notice shall be accompanied by a written lease proposal from
Landlord and shall otherwise include all relevant information as to the terms of
such offer. Tenant shall have fifteen (15) business days after receipt of the
Offer Notice to notify Landlord in writing that it will lease the RFR Parcel
from Landlord.
(ii) If (A)Tenant rejects or fails to respond to the Offer Notice
within the applicable period specified in subsection (i) above, or (B)
Landlord and Tenant, despite reasonable, good faith efforts, do not execute a
lease for the RFR Parcel within forty-five (45) days after Tenant's exercise of
its rights hereunder, Landlord shall be entitled to lease the RFR Parcel
pursuant to the applicable Offer Notice, upon substantially the same terms and
conditions set forth in the Offer Notice; provided, however, that no such lease
shall be made on other terms materially less favorable to Landlord than the
terms set forth in the Offer Notice. If Landlord has not so leased the RFR
Parcel on the terms specified in the Offer Notice (or on terms materially more
favorable to Landlord) within one (1) year from delivery of the Offer Notice,
Landlord shall not thereafter offer to lease or lease the RFR Parcel to any
party (including the offeror named in the Offer Notice) without again complying
with the provisions of this Section 47. All terms of this Section 47 shall
apply to such revised Offer Notice, including Tenant's opportunity to respond to
the revised Offer Notice within the applicable period specified above. If
Landlord executes the lease contemplated by the Offer Notice within the
parameters permitted by this subsection, Tenant's rights hereunder shall be null
and void as to the RFR Parcel so leased, but shall continue to apply to the
balance of the Available Space which does not constitute part of the
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RFR Parcel. Otherwise, Tenant's rights hereunder shall expire with the
termination of this Lease, as renewed.
(b) Condition to Exercise of Rights. A condition to Tenant's exercise of
-------------------------------
its rights under this Section shall be that no outstanding notice of default
exists under this Lease at each time of exercise. The failure of such condition
with respect to any one exercise of Tenant's rights shall not preclude Tenant's
further exercise of its rights.
48. RESTRICTION ON LEASING TO COMPETITORS.
-------------------------------------
Landlord agrees that, for so long as this Lease is effective, Landlord will not
lease any portion of the Expansion Space (a) to a tenant whose primary business
or business to be operated from the Expansion Space is the research, development
and commercialization of pharmaceutical products which treat viral diseases, or
(b) pursuant to a lease which permits such tenant to use Hazardous Substances in
the Building without covenants with respect to Hazardous Substances which are at
least as onerous as the covenants set forth in Section 5 hereof.
49. CREDIT AGAINST LAND PURCHASE.
----------------------------
If Tenant or its affiliate shall purchase from Landlord or its affiliate any
land which is now or hereafter a part of the Center other than the Real Estate,
and such purchase shall close at a time when Tenant has leased the Total
Building Area, the purchase price determined for such land shall be reduced by
an amount equal to two percent (2%) of the Minimum Annual Rent to be paid by
Tenant under the Lease for the Term (including exercised Renewals) following the
date of closing on such land up to a maximum reduction equal to ten percent
(10%) of the agreed upon purchase price prior to such reduction.
50. CHANGE TO CPI INDEX.
-------------------
If the CPI Index should be discontinued at any time during the Term of this
Lease, Landlord shall select a substitute index which most closely approximates
the CPI Index and which is reasonably acceptable to Tenant. Upon agreement as
to such substitute index, all references to CPI Index shall be deemed to refer
thereto. If the CPI Index shall not be published for the month required for
comparison hereunder, the CPI Index published for the month closest and prior
thereto shall be used.
51. CERTAIN COVENANTS REGARDING THE DECLARATION
-------------------------------------------
(a) Unless an uncured event of default shall exist hereunder, Tenant
shall be entitled to exercise all votes in the Association associated with the
Real Estate as Landlord's agent or proxy. Landlord shall promptly provide
copies to Tenant of all notifications received by Landlord from the Association.
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(b) Landlord and Tenant hereby agree that the approximately 7,700 square
feet of the Leased Space reserved for future laboratory expansion space shall be
characterized as additional warehouse space until actually used by Tenant for
laboratory purposes.
52. ADDITIONAL PERMITTED TITLE EXCEPTIONS
-------------------------------------
(a) Landlord and Tenant agree that utility easements may hereafter be
granted as an encumbrance on the Real Estate without Tenant's prior consent
thereto provided (i) that the terms and scope thereof are reasonable given the
nature of the easement and (ii) such utility easement is located underground and
does not materially and adversely affect Tenant's use of, or current access to,
the Leased Space, or signage locations, or reduce available parking from that
required by municipal code. Except for such easements and amendments to the
Covenants (adopted in accordance with the procedures applicable thereto), no
encumbrances other than the Permitted Title Exceptions shall be granted during
the Term hereof.
(b) Landlord also shall have the right to grant a first mortgage
encumbering the Real Estate and all improvements therein not owned by Tenant
which mortgage secure loans made to Landlord in connection with the development
and construction of improvements now or hereafter a part of the Real Estate, and
refinancing of such loans, subject, however, at all times to Section 28 hereof.
Landlord further covenants to Tenant to use commercially reasonable effort to
have such mortgage holder agree that insurance proceeds or casualty awards shall
be applied to restoration of the Real Estate and Building (including Tenant
Improvements).
(c) Tenant acknowledges and agrees that the Leased Space and Expansion
Space (or portions thereof) may be made a part of a condominium intended to be
created by Landlord for the entire Building, which condominium shall be
exclusively limited to non-residential uses. Tenant shall reasonably cooperate
with Landlord in its efforts to create such condominium, including without
limitation, Tenant's execution of such documents and instruments as Landlord
reasonably may require in order to effectuate the creation of such condominium,
so long as Tenant incurs no cost or expense in connection therewith, and such
documentation does not in any material way adversely affect Tenant's rights and
obligations under this Lease or increase the amount of Tenant's Proportionate
Share. It is intended that the Leased Space and each designated portion of the
Expansion Space shall be a separate condominium unit, or a unit and limited
common elements appurtenant to such unit. Landlord shall have the right to
grant mortgages as encumbrances on each unit of said condominium (whether as a
single mortgage or as individual mortgages) and all improvements therein not
owned by Tenant which mortgages secure loans made to Landlord in connection with
the development and construction of improvements now or hereafter a part of the
Real Estate, and refinancing of such loans, subject, however, at all times to
Section 28 hereof. Landlord further covenants to Tenant to use commercially
reasonable effort to have each such mortgage holder agree that insurance
proceeds or casualty awards shall be applied to restoration of the Real Estate
and Building (including Tenant Improvements).
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53. SEWER CAPACITY ALLOCATION
-------------------------
For so long as the Term of this Lease is effective, Landlord hereby reserves to
the Real Estate a sewage capacity of 7,500 gpd and agrees not to allocate sewage
capacity currently available to the Center pursuant to the Treatment Plant
Expansion Agreement among Landlord, Uwchlan Township and the Uwchlan Township
Municipal Authority dated ____, 1993 (undated but notarized January 10, 1994)
("Sewer Agreement") in any manner which would deprive the Real Estate of a
sewage capacity of 7,500 gpd. Tenant covenants and agrees that during the Term
of this Lease, it will not consume more that 4,000 gpd with respect to the
Leased Space and not more than an aggregate of 7,500 gpd for the Leased Space
and the Expansion Space if leased by Tenant.
54. CALCULATION AND REIMBURSEMENT OF UNAMORTIZED VALUE OF DIRECT PAYMENT
--------------------------------------------------------------------
PORTION.
-------
(a) Whenever in this Lease reference shall be made to the unamortized
value of Tenant's Direct Payment Portion, the same shall be calculated using a
straight-line method of amortization over a ten (10) year term measured as of
the Commencement Date.
(b) Landlord shall have the right to pay a portion of amounts to be
reimbursed by Landlord pursuant to Sections 2(b)(iv) and 18(c) by providing to
Tenant, at a location designated by Tenant, the Tenant's Lab Equipment and the
Landlord Priority Property, provided same are in the condition as existed on the
date of installation, reasonable wear and tear and damage caused by Tenant
excepted. If Landlord exercises such right and delivers such items in the
condition aforesaid, a credit shall be deemed applied against amounts owed from
Landlord in an amount equal to the unamortized value of such items, determined
on a straight-line basis over a useful life of ten (10) years, measured as of
the Commencement Date. The initial value of such items shall be as provided in
the Work Letter and Section 36(b), as applicable.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
the day and year first above written, intending to be legally bound hereby.
LANDLORD:
THE XXXXXX GROUP
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx, General Partner
TENANT:
VIROPHARMA INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Xxxxxx X. Xxxxx, Executive
Director, Counsel and Secretary
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