AGREEMENT OF LEASE
BETWEEN
NEWTOWN VENTURE IV ASSOCIATES,
Landlord
AND
COLLAGENEX PHARMACEUTICALS, INC.,
Tenant
00 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx Executive Campus
Newtown, Pennsylvania
LEASE
-----
SILVER LAKE EXECUTIVE CAMPUS
Newtown Township, Pennsylvania Lease Dated: March 15, 1999
1. Reference Data
Any reference in this Lease to the following subjects shall incorporate
therein the data stated for the subject(s) in this Section:
LANDLORD: Newtown Venture IV Associates, a Pennsylvania limited partnership
BUILDING: 00 Xxxxxxxxxx Xxxxx, Xxxxxx Xxxx Executive Campus, Newtown,
Pennsylvania
LANDLORD'S ADDRESS: c/o Pitcairn Properties Incorporated
One Pitcairn Place
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
LANDLORD'S CONSTRUCTION REPRESENTATIVE: Xxxxx Xxxxx
TENANT: CollaGenex Pharmaceuticals, Inc., a Delaware corporation
TENANT'S ADDRESS: Prior to Commencement Date:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
After Commencement Date:
00 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
TENANT'S CONSTRUCTION REPRESENTATIVE: Xxxx Xxxxxx X'Xxxxxxxx
LEASED PREMISES: A portion of the second floor of 00 Xxxxxxxxxx Xxxxx, Xxxxxx
Xxxx Executive Campus, Newtown Township, Pennsylvania
RENTABLE AREA OF LEASED PREMISES: approximately 14,204 Rentable Square Feet
LEASE TERM: One Hundred Twenty-Two (122) months
SCHEDULED COMMENCEMENT DATE: May 15, 1999
COMMENCEMENT DATE: To Be Determined in accordance with Section 3 hereof
ANNUAL FIXED RENT: Months 1-2: Tenant's Proportionate Share of $5.50 per
rentable square foot per annum
Months 3-60: $317,885.52 per annum (14, 204 rentable
square feet $22.38/rentable square foot)
Months 61-122: $333,509.92 per annum (14, 204 rentable
square feet @ $23.48/rentable square foot)
OPERATING EXPENSE ALLOWANCE: Currently estimated by Landlord at $5.50 per
rentable square foot and subject to readjustment in
accordance with Section 6.A. hereof.
OPERATING EXPENSE BASE YEAR: The period from June 1, 1999 to May 31, 2000,
provided, however, if the actual average occupancy level
for the Building during such period is less than 95%,
and/or a full and final real estate tax reassessment has
not been completed by the taxing authority for the Building
and Lot and/or an abatement or other form of real estate
tax relief ("Tax Relief") is then in effect for the
Building and/or Lot, then, Landlord, in accordance with
generally accepted accounting procedures consistently
applied with respect to operating expenses and in
accordance with a recent appraisal of the Building and Lot
as fully improved and operating with respect to estimated
real estate tax assessment, shall make a determination of
what the Operating Expenses for the Operating Expense Base
Year would have been if during the entire one year period
the occupancy of the Building had been not less than 95%, a
full and final assessment had been issued and no Tax Relief
had been in effect ("Landlord's Determination")
TENANT'S PROPORTIONATE SHARE: 16.4%
PERMITTED USES: General Offices
SECURITY DEPOSIT: $26,490.46
CONSTRUCTION ALLOWANCE: Landlord, at its sole cost and expense, shall fully
fund (i) the cost of the turnkey buildout for the Leased
Premises under the final plans and specifications for the
same prepared by Hayden Architecture & Urban Design
("Tenant's Architect") as attached hereto as Exhibit "B"
(the "Final Plans"), which Final Plans have been approved
by Landlord and Tenant; plus, (ii) the aggregate cost of
the following: (a) seventy-five cents ($.75) per square
foot toward fees of Tenant's Architect, payable within ten
(10) days of the execution of this Lease; plus (b) the
costs of Building standard mini blinds on all exterior
windows (the total cost of (i) and (ii), the "Construction
Allowance").
2
BROKER: Tactix Advisory Services, Inc.
NEWTOWN VENTURE IV ASSOCIATES
By Pitcairn Properties Incorporated,
its general partner
By /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
TENANT:
COLLAGENEX PHARMACEUTICALS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President and
Chief Financial Officer
3
2. Demise/Access. Landlord hereby demises and lets to Tenant and Tenant
-------------
takes and hires from Landlord that certain space containing approximately 14,204
rentable square feet (the "Leased Premises") delineated in Exhibit "A", attached
hereto and made part hereof, consisting of a portion of the second floor in the
four (4) story office building (the "Building") erected upon a parcel of ground
located at 00 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxxxxxxx (the "Lot"),
TOGETHER WITH, appurtenant to the Leased Premises, the right to use in common
with Landlord and other tenants, occupants and visitors to the Building, all
common areas of the Building and Lot, including, without limitation, the common
walkways, sidewalks and parking lots of the Lot. Tenant shall enjoy 24 hour
access to the Leased Premises subject to the payment to Landlord of reasonable
charges for keys, magnetic card keys, or other security devices.
3. Term. The Lease Term shall commence on the Commencement Date which
----
shall be the earlier of (A) the date on which Tenant shall take possession of
the Leased Premises, or (B) the first Monday following the date of Substantial
Completion as defined in Section 7 hereof, and shall continue for the period of
years set forth in Section I hereof, unless extended or sooner terminated as
provided herein.
Landlord shall give Tenant notice of the estimated date of Substantial
Completion at least thirty (30) days prior thereto, provided, however, failure
of Landlord timely to provide such notice shall not effect a change in the
Commencement Date. When the Commencement Date and, consequently, the Lease Term
have been so determined, Landlord and Tenant shall confirm the Commencement Date
accordingly by an amendment to Section 1.
4. Holding Over. If Tenant retains possession of the Leased Premises or
------------
any part thereof after the termination of this Lease by expiration of the Lease
Term or otherwise, without the prior written consent of Landlord, Tenant shall
pay Landlord (A) as agreed liquidated damages for such holding over alone, an
amount, prorated on a per diem basis for each day of such unlawful retention,
equal to the greater of (i) one hundred fifty percent (150%) of the monthly
Fixed Rent last in effect, or (ii) the established market rental for the Leased
Premises, for the time Tenant thus remains in possession, plus, in each case,
all Additional Rent and other sums payable hereunder and (B) all other damages,
costs and expenses sustained by Landlord by reason of Tenant's holding over
provided that Tenant shall not be liable for the consequential damages incurred
by Landlord arising from a holdover of sixty (60) days or less. Without limiting
any rights and remedies of Landlord resulting by reason of the wrongful holding
over by Tenant, or creating any right in Tenant to continue in possession of the
Leased Premises, all Tenant's obligations with respect to the use, occupancy and
maintenance of the Leased Premises shall continue during such period of unlawful
retention.
5. Rent. The monthly installments of Fixed Rent are payable by Tenant
----
beginning on the first day of the third calendar month following the
Commencement Date (the "Rent Commencement Date") in monthly installments of
one-twelfth (1/12th) of the then current Fixed Rent as set forth in Section 1
hereof, without prior notice or demand, and without any set-off or deduction
whatsoever, in advance, on the first day of each month at Landlord's office in
Jenkintown, Pennsylvania or at such other place as Landlord may direct, except
that the Fixed
4
Rent for the first full month of the Lease Term for which Fixed Rent is payable
hereunder will be paid on the date of the execution of this Lease. During the
period from the Commencement Date to the Rent Commencement Date, Tenant shall
enjoy two (2) months free of Fixed Rent, but shall pay on the first day of each
such month, as Additional Rent hereunder, one-twelfth (1/12) of Tenant's
Proportionate Share of Operating Expenses of $5.50 per square foot per annum.
Fixed Rent and Additional Rent are sometimes collectively referred to herein as
"Rent."
In addition, if the Lease Term commences on a day other than the first
day of a calendar month, Tenant shall pay to Landlord, on or before the
Commencement Date of the Lease Term, a pro rata portion of the monthly
installment of such Additional Rent as is stated in this Section 5 to be
payable, such pro rata portion to be based on the number of days remaining in
such partial month after the Commencement Date of the Lease Term.
Tenant hereby covenants and agrees to pay the Fixed Rent, Additional
Rent and other sums payable to Landlord hereunder when due, and to pay interest
to Landlord at the Overdue Interest Rate (as defined below) (A) on all overdue
installments of Fixed Rent from the due date thereof to the date of payment and
(B) on all payments of Additional Rent or other sums payable to Landlord
hereunder from the date of written demand for payment until the date of payment;
provided, however that no interest shall be payable on Tenant's Operating
Expense Adjustment (as hereinafter defined) so long as such Operating Expense
Adjustment is paid within the thirty (30) day period described in the second
paragraph of Section 6.A. hereof. Upon the occurrence of an Event of Default (as
hereinafter defined) by Tenant in the payment of such Additional Rent or other
sums payable hereunder, Landlord shall be entitled to all rights and remedies to
which it would be entitled if an Event of Default of the payment of Fixed Rent
occurred. As used herein, the term "Overdue Interest Rate" shall mean and equal
three percent (3%) per annum over the prime interest rate as announced in the
"Money Rates" column of the eastern edition of The Wall Street Journal on the
------------------------
due date of the payment, or if such rate is no longer published, another
interest rate index selected by Landlord to achieve a substantially similar
result.
6. Escalation.
----------
A. Operating Expense. The Operating Expense Allowance set forth in
------------------
Section 1 hereof represents Landlord's best estimate of the anticipated
Operating Expenses for the Operating Expense Base Year for the Building based on
information presently available to Landlord. Within one hundred twenty (120)
days following the end of the Operating Expense Base Year, or as soon thereafter
as administratively feasible, Landlord shall furnish to Tenant an Operating
Expense Statement reflecting (i) the actual Operating Expenses (as hereinafter
defined) for the Operating Expense Base Year or, (ii) to the extent the actual
average occupancy level for the Building during such period is less than 95%,
and/or a full and final real estate tax reassessment has not been completed by
the taxing authority for the Building and Lot, and/or any form of Tax Relief is
then in effect for the Building and/or Lot, Landlord's Determination thereof as
required under Section 1 hereof. Subject to Tenant's right to audit as provided
herein, including, without limitation, Tenant's right to challenge the real
estate component of Landlord's Determination, thereafter, the actual Operating
Expenses for the Operating Expense Base Year or such Landlord's Determination
shall be the Operating Expense Allowance for all purposes
5
hereunder. In any Lease Year subsequent to the Operating Expense Base Year if
Landlord's actual Operating Expenses for any Operating Year (as hereinafter
defined) shall be greater than the Operating Expense Allowance; Tenant shall pay
to Landlord as Additional Rent an amount equal to Tenant's Proportionate Share
(as defined below) of the difference (the amount of Tenant's Proportionate Share
of such difference is hereinafter referred to as the "Operating Expense
Adjustment"). If Tenant occupies the Leased Premises or portion thereof for less
than a full Operating Year, the Operating Expense Adjustment will be allocated
proportionately to the amount of time in such Operating Year that Tenant so
occupies such space. Notwithstanding anything to the contrary, in each month
during the period from June 1, 2000 to December 31, 2000, Tenant shall pay to
Landlord as Additional Rent an amount equal to one twelfth (1/12) of Tenant's
Proportionate Share of the estimated annual increase, if any, in the Operating
Expenses for the calendar year beginning January 1, 2000 over the Operating
Expense Allowance.
Such Additional Rent shall be paid in the following manner: within one
hundred twenty (120) days following the end of each Operating Year or as soon
thereafter as administratively feasible, Landlord shall furnish Tenant an
Operating Expense Statement (as hereinafter defined). Within thirty (30) days
following the receipt of such Operating Expense Statement (the "Expense
Adjustment Date") Tenant shall pay to Landlord as Additional Rent the Operating
Expense Adjustment for such Operating Year. On the next succeeding Expense
Adjustment Date, Tenant shall pay to Landlord (or Landlord shall credit to
Tenant) any deficiency (or excess) between the installments paid on account of
the preceding year's Operating Expense Adjustment and the actual Operating
Expense Adjustment for such Operating Year.
The following words and terms shall be defined as hereinafter set
forth:
(i) "OPERATING YEAR" shall mean the calendar year commencing
January 1, 2000, or such other period of twelve (12) months as hereafter may be
adopted by Landlord as its fiscal year, occurring during the Lease Term.
(ii) "OPERATING EXPENSE STATEMENT" shall mean a statement in
writing signed by Landlord, delivered to Tenant within one hundred twenty (120)
days following the end of each Operating Year, or as soon thereafter as
administratively feasible, setting forth in reasonable detail (a) the Operating
Expense for the preceding Operating Year, (b) the Operating Expense Allowance,
and (c) the Tenant's Operating Expense Adjustment for such Operating Year, or
portion thereof. The Operating Expense for each Operating Year shall be audited
and certified by Landlord's independent certified public accountant whose report
thereon shall be available for inspection by Tenant at Landlord's office during
normal business hours. The Operating Expense Statement shall constitute a final
determination as between Landlord and Tenant of the Operating Expense and the
Operating Expense Adjustment for any Operating Year, subject to Tenant's right
to audit Landlord as provided herein.
(iii) "OPERATING EXPENSE" shall mean the following expenses
incurred by Landlord in connection with the operation, routine repair and
maintenance of the Building and the Lot:
6
(a) Wages, salaries, fees and other compensation and
payments and payroll taxes and contributions to any social security,
unemployment insurance, welfare, pension or similar fund and payments for other
fringe benefits required by law or by union agreement (or, if the employees or
any of them are non-union, then payments for benefits comparable to those
generally required by union agreement in first class office buildings in the
Philadelphia suburban area, which are unionized) made to or on behalf of all
employees of Landlord performing services rendered in connection with the
operation and maintenance of the Building and the Lot, and including, solely,
such expenses of all such personnel only for time and services rendered to the
Building and Lot, including, without limitation: window cleaners; janitors;
miscellaneous handymen; watchmen; persons engaged in patrolling and protecting
the Building and the Lot; carpenters; engineers; mechanics; electricians;
plumbers; persons engaged in the operation and maintenance of the Building and
the Lot; building superintendent and assistants; building manager; and clerical
and administrative personnel.
(b) The uniforms of all employees, and the cleaning,
pressing and repair thereof.
(c) Cleaning costs for the Building and the Lot, including
the windows and sidewalks, all snow and rubbish removal (including separate
contracts therefor) and the costs of all labor, supplies, equipment and
materials incidental thereto.
(d) Premiums and other charges incurred by Landlord with
respect to all insurance relating to the Building and the Lot and the operation
and maintenance thereof, including, without limitation: fire and extended
coverage insurance, including windstorm, hail, explosion, riot, rioting
attending a strike, civil commotion, aircraft, vehicle and smoke insurance;
public liability; elevator; workmen's compensation; boiler and machinery; rent;
use and occupancy; and health, accident and group life insurance of all
employees.
(e) All taxes, liens, charges, imposts and burdens and
special assessments of every kind and nature imposed by any governmental
authority on and/or with respect to the Lot or Building which Landlord shall
become obligated to pay because of or in connection with the ownership, leasing
or operation of the Lot or the Building.
(f) The cost of electricity used for site lighting and the
cost of water and sewer and any and all other utility services used in
connection with the operation and maintenance of the Building and the Lot.
(g) Costs incurred for operation, service, maintenance,
inspection, routine repairs and alterations of the Building, the Lot and the
heating, air-conditioning, ventilating, plumbing and electrical systems of the
Building (including any separate contract therefor) and the costs of labor,
materials, supplies and equipment used in connection with all of the aforesaid
items; provided, Tenant shall have no obligation to reimburse Landlord for
capital repairs, replacements or improvements to the Building or Lot or such
systems, except as specifically provided elsewhere herein.
7
(h) Gross receipts taxes, sales taxes and excise taxes and
the like upon any of the expenses enumerated herein.
(i) Management fees of the managing agent for the Building.
(j) The cost of replacements for tools and equipment used in
the operation and maintenance of the Building and the Lot.
(k) The cost of telephone service, postage, office supplies,
maintenance and repair of office equipment and similar costs related to
operation of the Building superintendent's and Building manager's office.
(l) The cost of licenses, permits and similar fees and
charges related to operation, repair and maintenance of the Building.
(m) Auditing fees necessarily incurred in connection with
the maintenance and operation of the Building, and accounting fees incurred in
connection with the preparation and certification of a real estate tax
escalation and the operating expense escalation statements pursuant to this
Section 6.
(n) All costs incurred by Landlord to retrofit any portion
or all of the Building to comply with a change in existing legislation or
introduction of new legislation, whether Federal, State or Municipal, and for
which no relevant exemption is available, or repairs, replacements and
improvements which are appropriate in Landlord's reasonable discretion taking
into account sound principles of management consistently applied for the
continued operation of the Building as a first class building.
(o) All expenses associated with the installation of any
energy or cost saving devices for the benefit of the Building.
(p) All assessments against Landlord for Landlord's pro rata
share of the costs of Silver Lake Executive Campus as provided in the
Declaration of Condominium of Silver Lake Executive Campus.
(q) Any and all other expenditures of Landlord in connection
with the operation, repair or maintenance of the Lot or the Building which are
properly expensed in accordance with generally accepted accounting principles
consistently applied with respect to the operation, repair and maintenance of
first-class office buildings in the Philadelphia suburbs.
(r) expenses for seasonal and social relations functions for
the benefit of all tenants in the Building.
If Landlord shall purchase any item of capital equipment or make any
capital expenditure as described in subsection (n) and (o) above, then the costs
for the same shall be included in Operating Expenses in the year of installation
and in subsequent years
8
amortized over the useful life of such equipment or improvement in a manner
consistent with generally accepted accounting principles consistently applied,
with an interest factor equal to the prime interest rate, as defined in Section
5 hereof. If Landlord shall lease such item of capital equipment, then the
rentals or other operating costs paid pursuant to such leasing shall be included
in Operating Expenses for each year in which they are incurred.
Notwithstanding the foregoing, "Operating Expense" shall not include
expenditures for any of the following:
(a) The cost of any capital addition made to the Building
(other than that specified as part of Operating Expense as provided above),
including the cost to prepare space for occupancy by a new tenant.
(b) Repairs or other work occasioned by fire, windstorm or
other casualty or hazard, provided, however, that the foregoing shall not limit
the Tenant's liability, if any, under the indemnities provided under this Lease.
(c) Leasing commissions, real estate brokers' commissions,
advertising and marketing expenses and other costs incurred in leasing or
procuring new tenants.
(d) Repairs or rebuilding necessitated by condemnation.
(e) Depreciation and amortization of the Building, other
than
(I) capital expenditures as described in subsection
(n) above; or
(II) capital expenditures as described in subsection
(o) above.
(f) The salaries and benefits of executive officers of
Landlord or management company senior to the Building manager, if any.
(g) Interest and principal payments on mortgage debt.
(h) Ground rental payments.
(i) The costs of: painting or decorating other than in
public areas; alterations to the Leased Premises or the premises of other
tenants of the Building, or work finished by Landlord without charge as an
inducement for a tenant to lease space (i.e., free rent, improvement
allowances).
(j) Income or franchise taxes or such other taxes imposed or
measured by the income from Landlord from the operation of the Building.
9
(k) The cost of constructing, installing, or operating any
special service or facility such as an observatory, broadcasting facility,
luncheon club, athletic or recreational club, cafeteria or dining facility.
(l) The costs associated with services or amenities not
available to all tenants or provided to any tenant to a materially greater
extent or more favorable manner than generally provided to all tenants.
(m) The costs of correcting latent defects and defects in
construction or renovation of the Building or its systems.
(n) Legal expenses incurred in connection with tenant leases
including, without limitation, negotiations with prospective tenants and
enforcing provisions or of other leases in the Building.
(o) Payments for rental items, the cost of which would
constitute a capital expenditure if such equipment were purchased, unless such
items are customarily treated as operating expenses in accordance with generally
accepted accounting principles consistently applied.
(p) Any fees and expenses paid to any contractor which is
related to Landlord to the extent such fees and expenses are in excess of
customary market amounts which would be paid in the absence of such
relationship.
(q) Expenditures for repairs or maintenance which are
covered by warranties, guaranties or service contracts, except to the extent
that such warranty, guaranty or service contract is not honored or charges are
imposed thereunder.
(r) The costs of repairs, alterations, additions, charges,
tools, equipment replacements and the like which under generally accepted
accounting principles are properly classified as capital expenditures, except to
the extent otherwise permitted hereunder.
(s) Damages incurred due to the negligence or intentional
acts or omissions of Landlord.
(t) The costs of financing or refinancing.
(u) Reserves for capital items, bad debts or rental losses.
Operating Expense shall be "net" and, for that purpose, shall be
reduced by the amounts of any reimbursement or credit received or receivable by
Landlord with respect to an item of cost that is included in Operating Expense
(other than reimbursements to Landlord by tenants of the Building pursuant to
Operating Expense escalation provisions).
10
To the extent that any item of Operating Expense is incurred in common
with another building or lot in the Silver Lake Executive Campus, such item of
expense shall be apportioned equitably among the properties incurring such
expenses.
If Landlord shall eliminate the payment of any wages or other labor
costs or otherwise reduce Operating Expense as a result of the installation of
new devices or equipment, or by any other means, then in computing the Operating
Expense the corresponding items shall be deducted from the Operating Expense
Allowance and Operating Year. All electricity invoiced to Tenant directly or as
an Operating Expense shall be invoiced at Landlord's cost without markup.
The Operating Expense for any Operating Year or portion thereof during
which less than ninety five percent (95%) of the Rentable Area of the Building
is leased to tenants shall be increased to include an imputed cost for
unoccupied portions of the Building in an amount with respect to each such area
equal to the product of (a) the Landlord's estimate of the marginal Operating
Expense saving resulting from such vacancy, times (b) a fraction, the numerator
of which is the number of days during such Operating Year such portion of the
Building was unoccupied and the denominator of which is three hundred sixty-five
(365), times (c) the Rentable Area of such unoccupied space. In the time that
more than one such portion of Rentable Area shall be unoccupied on separate
dates within a relevant Operating Year, then a separate computation shall be
made with respect to each unoccupied portion, and the products of such
computations shall be added together, and the total thereof shall be the amount
of Operating Expense imputed to such unoccupied portions for such Operating
Year.
(iv) "TENANT'S PROPORTIONATE SHARE" shall mean a fraction, the
numerator of which shall be the Rentable Area of Leased Premises, and the
denominator of which is 86,597 rentable square feet (subject to adjustment only
by reason of any substantial addition to the Building made after the date of the
initial completion of construction of the Building), and shall equal, with
respect to the Leased Premises, the percentage set forth in Section I of this
Lease.
B. Tenant shall have the right to audit Landlord's books and records
relating to Operating Expenses once during each calendar year during the Lease
Term, including, without limitation, the establishment of the Operating Expense
Allowance under Section 6.A hereof, which right may be exercised by Tenant upon
written notice delivered not less than two hundred seventy (270) days following
the delivery of the Operating Expense Statement to Tenant. In the exercise of
Tenant's rights under this Section, Tenant shall have reasonable access to
Landlord's books and records relating to Operating Expenses which shall be made
available at Landlord's business offices at a mutually agreeable time during
Landlord's normal business hours. Tenant shall not suspend payment of Rent based
upon the pending outcome of the audit. In no event shall Tenant engage any
professional lease audit firm doing business on a contingent fee or other
similar commission arrangement based on recovery. In the event that such audit
discloses a discrepancy in excess of three percent (3%), Landlord shall (i) to
the extent Tenant elects not to credit such overpayment against Rent, refund
within thirty (30) days of such audit the entire amount overpaid to Tenant,
together with interest thereon at the Overdue Interest Rate from the
11
date of Tenant's overpayment, or Tenant may credit such overpayment against Rent
next coming due, and (ii) pay all reasonable costs of Tenant's audit.
7. Completion of Improvements. Before the commencement of the Lease Term,
--------------------------
Landlord will substantially complete the construction of the Building (if not
substantially completed as of the execution hereof) to the stage that the
Building is operable for Tenant's purposes, which shall be defined as occurring
when Tenant's entrance to the Leased Premises are substantially completed and
the heating and air-conditioning system (as required for the season and then
prevailing climate) and all other mechanical systems required for service to the
Leased Premises are in regular operation. The Building shall be compliant with
all applicable state, federal and local laws in effect on the date that the
certificate of occupancy for the Building is issued, including, without
limitation, the ADA.
The Leased Premises shall be deemed to be substantially completed
("Substantially Completed" or "Substantial Completion") when (i) all work
specified to be done in the Final Plans, has been substantially completed as
determined by Landlord except for minor items of finishing and construction of a
nature which are not necessary to make the Leased Premises reasonably tenantable
for Tenant's use as stated herein and (ii) a certificate of occupancy has been
issued. All punch list items shall be completed by Landlord within thirty (30)
days following the date of Substantial Completion, subject only to force majeure
(as hereinafter defined).
If Tenant makes any changes to the Final Plans and Landlord advises
Tenant at the time of the proposed change that such changes would cause a delay
in the Commencement Date, then, if such delay should occur, in addition to the
costs Tenant shall pay for any costs to Landlord as provided in Section 8
hereof, Tenant shall commence to pay rent on the Rent Commencement Date that
would have been in effect had the changes of Tenant not affected the
Commencement Date.
Landlord shall have the Leased Premises Substantially Completed by the
Scheduled Commencement Date, except for delays due to governmental regulation,
unusual scarcity of or inability to obtain labor or materials, labor
difficulties, unusual delays in the procurement or issuance of permits, casualty
to the Building or Acts of God (such casualty or Acts herein referred to as
"force majeure"), any of which shall extend the Scheduled Commencement Date for
a period equal to the total of the duration of each such delay. In the event any
delay of the Scheduled Commencement Date is caused by factors other than force
majeure, Tenant shall be entitled to one (1) day of free rent for each period of
three (3) days the Scheduled Commencement Date is delayed beyond June 1, 1999..
If the Leased Premises is not Substantially Completed within three (3) months
following the Scheduled Commencement Date, as the same may be extended in
accordance herewith, Tenant, as Tenant's sole right thereby arising, may
terminate this Lease by written notice to Landlord given within fifteen (15)
days thereafter provided that the Lease Term shall not have commenced prior to
the giving of such notice to Tenant, this Lease to terminate in such case upon
Landlord's receipt of such notice, whereupon Landlord shall return all Rent and
other monies paid by Tenant to Landlord in advance, except as hereinafter
stated, and all further obligations of the parties hereunder shall end.
12
It is understood that in the event of such termination by Tenant,
Landlord shall have no responsibility to reimburse Tenant for any cost or
expenses as Tenant may have directly or indirectly incurred toward this leasing
or the occupancy of the Leased Premises, whether with respect to arranging for
or termination of arrangements for other space.
8. Construction of Leased Premises. Landlord will construct the
------------------------------------
improvements in the Leased Premises in accordance with the Final Plans (the
"Landlord Work") at Landlord's sole cost and expense, excepting only change
orders requested by Tenant in writing and agreed to in writing by Landlord which
shall, in the aggregate, increase the cost of Landlord's Work over the
Construction Allowance as described below. In the event that Tenant requires
written change orders ("Change Orders") to the Final Plans which, in the
aggregate, increase the cost of Landlord's Work to an amount exceeding the
Construction Allowance, Tenant shall pay directly and/or reimburse Landlord for
(i) such excess cost over the Construction Allowance arising from the Change
Orders and (ii) Landlord's overhead in an amount equal to five percent (5%) of
any excess costs over the Construction Allowance. Notwithstanding the foregoing,
such excess costs and any such overhead charges shall, if Tenant so elects, be
paid for by Landlord and amortized over the Lease Term as Additional Rent at an
interest rate equal to twelve percent (12%) per annum. In addition to the
foregoing, Tenant shall have the right to require Landlord to pay for Tenant
improvements over and above the Construction Allowance in an amount not to
exceed $5.00 per square foot and, in such event, Tenant shall amortize such
additional expenditures at an interest rate equal to twelve percent (12%) per
annum.
All construction work required or permitted by this Lease, whether
by Landlord or Tenant, shall be done in a good and workmanlike manner and in
compliance with all applicable laws, ordinances, regulations and orders of
governmental authorities and with all applicable codes of all insurers of the
Building. Each party may inspect the work of the other at reasonable times and
shall promptly give notice of observed defects. Each party hereby agrees to be
bound by and authorizes the other to rely upon, in connection with design and
construction, approval and other actions by the Construction Representative
named in Section I or any person hereafter designated as Construction
Representative by an amendment to Section 1.
With the prior written consent of Landlord, which may be granted or
withheld in Landlord's sole discretion Tenant may prior to the Commencement Date
enter upon or have its contractors and agents enter upon the Leased Premises to
install data and telecommunications equipment. All such work shall be
accomplished with minimal interference to the Landlord's contractors at the
site. Tenant shall indemnify, defend and hold Landlord harmless from all loss
cost, damage or expense relating to the entry of Tenant or Tenant's
contractor's, agents or employees onto the Leased Premises, and shall provide
Landlord with evidence of insurance satisfactory to Landlord prior to entering
the Leased Premises. In the event that any conflict arises between Landlord's
contractors and Tenant or Tenant's contractors, agents or employees, or Landlord
otherwise determines that Tenant's activities are interfering with the progress
of the work, Landlord may (i) remove Tenant and Tenant's contractors, agents or
employees from the Leased Premises and (ii) treat the interference as a tenant
delay as provided in the third (3rd) paragraph of Section 7 hereof. Landlord
shall use commercially reasonable efforts to cause its general contractor to
adopt and implement policies designed to
13
avoid work stoppages, slowdowns, disputes or strikes and shall at all times
maintain labor harmony.
Within five (5) days after written notice from Landlord to Tenant of
the date on which Landlord reasonably expects that the construction of the
Leased Premises will be Substantially Completed or, in the absence of such
notice, within thirty (30) days after Tenant commences occupancy of the Leased
Premises, or any part thereof, Landlord's and Tenant's Construction
Representatives shall make such inspection of the Leased Premises as Tenant
deems appropriate, and, except as otherwise notified by Tenant in writing to
Landlord within such period, Tenant shall be deemed to have accepted the Leased
Premises in their then condition and as being in the condition in which Landlord
is obligated to deliver the Leased Premises hereunder; provided, however that
Landlord shall repair or cause to be repaired latent defects in construction
that are discovered and reported by Tenant during the effective period of any
applicable guaranty or warranty. If as a result of such inspection Tenant
discovers deviations or variations from the Final Plans and Change Orders of a
nature commonly found on a "punch list" (as that term is used in the
construction industry), Tenant shall promptly notify Landlord of such
deviations. The existence of such punch list items shall not postpone the
Commencement Date of this Lease nor the obligations of Tenant to pay rent.
Landlord shall cause all punch list items to be completed within thirty (30)
days following the Commencement Date, subject only to force majeure. After the
Commencement Date, Landlord, its agents and/or contractors may enter the Leased
Premises from time to time to complete unfinished details and adjustments with
reasonable dispatch, and such entry shall not constitute an eviction, in whole
or in part, entitle Tenant to any abatement or diminution of rent, relieve
Tenant of any of its obligations under this Lease, or impose any liability on
Landlord to Tenant or its agents or contractors by reason thereof, provided
Landlord shall use commercially reasonable efforts to minimize disruption of
Tenant's business operations during such entries.
9. Alterations or Improvements by Tenant. Tenant shall not make during
-----------------------------------------
the Lease Term any alterations or additions to the Leased Premises unless with
the prior written approval of Landlord and then only in accordance with plans
and specifications previously approved by Landlord and subject to such
conditions as Landlord may require, including, without limitation, that Tenant
be required to pay for any increased cost to Landlord occasioned thereby or
attributed thereto and to readapt the Leased Premises prior to the termination
of this Lease, all without expense to Landlord. Any such alterations or
additions which may be approved by Landlord and made by Tenant shall be deemed
part of the Building and shall not thereafter be removed by Tenant unless
Landlord shall require removal of same at the time of Landlord's approval of the
subject alteration or improvement, in which case Tenant shall remove any such
alterations or additions and repair any damage to the Building or the Leased
Premises occasioned by their installation or removal (including, without
limitation, repairing and patching holes, replacing ceiling, wall and floor
surfaces and repainting), and restore the Leased Premises to substantially the
same condition as existed prior to the time which any such alterations or
additions were made. Notwithstanding anything herein or in the Rules and
Regulations to the contrary, Tenant may affix ordinary removable decorative
items to the walls, subject to removal and restoration as provided herein.
14
All alterations and additions by Tenant and installation of
furnishings following occupancy shall be coordinated with any work being
performed by Landlord and performed in such manner and by such union
contractor(s) as to assure harmonious labor relations and so as to not damage
the Building or interfere with its operation or with the activities of other
tenants and, except for installation of furnishings only, by contractors or
workmen first approved by Landlord.
As further conditions to Landlord's approval of any proposed
alterations or additions by Tenant which are to be made after the beginning of
the Lease Term, Tenant shall: secure all necessary licenses and permits; deliver
to Landlord a waiver, executed by all persons or firms who will be furnishing
labor or materials waiving the right to file any mechanic's lien against the
Building, the Lot or the estate or interest of Landlord or Tenant therein; cause
the contractor(s) and subcontractor(s) to carry Workmen's Compensation insurance
in statutory amounts and also comprehensive public liability insurance with
limits as approved by Landlord, and deliver to Landlord certificates of all such
insurance.
Failure to comply with any of the provisions of this Section 9
(including, without limitation, any of the terms or conditions of any consent
granted hereunder) shall constitute a default under this Lease and upon such
default Landlord may pursue any or all of the remedies provided for in Section
28 hereof.
Tenant shall promptly pay when due the cost of all such alterations
and additions as referred to in this Section 9 and shall cause any mechanics'
liens which may be filed with respect thereto to be immediately discharged, and
shall indemnify Landlord against any loss, cost or expense occasioned directly
by such alterations and additions.
10. Permitted Uses. Tenant covenants and agrees to use and occupy the
---------------
Leased Premises only in conformity with law and for the uses specified in
Section 1 hereof and not to use or permit any use of the Leased Premises which
creates any safety hazard, which would be dangerous to the Leased Premises, the
Building or the occupants of the same, which would be disturbing to other
tenants or occupants of the Building, or which would cause any increase in
premium for any insurance which Landlord may then have in effect with respect to
the Building generally.
11. Building Operation and Services. Landlord shall furnish, through
---------------------------------
Landlord's employees or independent contractors, such services, facilities and
supplies equal in scope, quality and frequency to those being customarily
provided by landlords in first class office buildings in the Philadelphia
suburbs, including, without limitation, the following:
During the construction of the Leased Premises, Landlord shall install
a heat pump or other HVAC system to provide heating, ventilating and air
conditioning to the Leased Premises. Tenant shall have the right to control the
hours of operation such system.
Maintenance and cleaning shall be provided Monday through Friday
(excluding holidays), after business hours, as follows: janitor service,
consisting of the
15
removal of customary office trash, dusting of furniture, desks and pictures, and
vacuuming; maintenance and service of the toilet rooms in the Leased Premises.
Hot and cold water for normal lavatory and kitchen purposes shall be
provided. If Tenant requires water for additional purposes, Tenant shall pay the
cost thereof as shown on a meter to be installed and maintained at Tenant's
expense to measure such additional consumption.
During the construction of the Leased Premises, Landlord shall connect
the electrical service in the Leased Premises to the electric public utility
serving the Building and Tenant shall be responsible to pay Landlord the charges
for such electricity as determined through the separate meter monitoring usage
in the Leased Premises. Landlord shall select the electrical utility provider
for the Building using its commercially reasonable business judgment taking into
consideration all relevant factors.
Landlord shall furnish and install at Tenant's expense all replacement
lighting tubes, lamps, bulbs, and ballasts required in the Leased Premises.
Landlord shall landscape and maintain the common areas of the Building
and Lot.
Landlord shall provide a security system to the Building and Leased
Premises.
Landlord shall provide on-site property management.
Landlord shall provide signage to Tenant on the Building Directory and
as otherwise shown in the Final Plans.
12. Interruption of Services. In case Landlord is prevented or delayed in
------------------------
furnishing any service as set forth in Section II herein or otherwise by reason
of any cause beyond Landlord's reasonable control, Landlord shall not be liable
to Tenant therefor nor shall Tenant be entitled to any abatement or reduction in
rent by reason thereof, nor shall the same give rise to a claim in Tenant's
favor that such absence of building services constitutes actual or constructive,
total or partial eviction or renders the Leased Premises untenantable, provided
such interruption does not exist for longer than five (5) consecutive days.
Thereafter, the continuing interruption shall give rise to an abatement of Fixed
Rent and Additional Rent until service is restored. In the event service is not
restored within thirty (30) days following the start of the interruption of
service and Tenant has ceased operations at and is prepared to vacate or has
vacated the Leased Premises, Tenant shall have the right to terminate this Lease
and receive the return of the unamortized costs, if any, of any sums paid by
Tenant on account of construction of the Leased Premises.
Landlord reserves the right to stop any service or utility system,
when necessary by reason of accident or emergency, or until necessary repairs
have been completed, provided, however, that in each instance of stoppage,
Landlord shall exercise reasonable diligence to eliminate the cause thereof.
Except in case of emergency repairs,
16
Landlord will give Tenant reasonable advance notice of any contemplated stoppage
and will use reasonable efforts to avoid unnecessary inconvenience to Tenant by
reason thereof.
13. Repairs. Landlord shall make all repairs necessary to maintain the
-------
plumbing, heating, ventilating, air conditioning, electric systems, external
windows and floors (excluding carpeting and floor coverings), provided, however,
that Landlord shall not be obligated to make any such repairs until the
expiration of a reasonable period of time after receipt of written notice from
Tenant that such repair is needed. In no event shall Landlord be obligated under
this Section 13 to repair any damage caused by any act, omission or negligence
of Tenant or its employees, agents, invitees, licensees, subtenants, or
contractors. If Tenant requires maintenance, servicing, repair or replacement of
any special plumbing, heating or air conditioning systems installed for Tenant's
benefit in the Leased Premises, such maintenance, servicing, repair or
replacement shall be made at the sole expense of Tenant, unless the need for
such repairs is caused solely by the negligence or willful misconduct of
Landlord, its agents or employees.
Tenant shall maintain the Leased Premises and the fixtures and
appurtenances therein in good repair at all times. Except to the extent released
by Landlord pursuant to the waiver of subrogation provision in Section 23
hereof, Tenant shall reimburse Landlord for all costs and expenses of repairing
and replacing all damage or injury to the Leased Premises and the Building and
to fixtures and equipment caused by Tenant or its employees, agents, invitees,
licensees, subtenants, or contractors, or as the result of all or any of them
moving in or out of the Building or by installation or removal of furniture,
fixtures or other property. Such costs and expenses shall be collectible as
Additional Rent and paid by Tenant within fifteen (15) days after rendition of a
xxxx therefor.
Landlord shall use its best efforts to minimize disruption to Tenant's
business operations during any period Landlord is making repairs, alterations,
additions, or improvements to and in the Leased Premises or the Building or Lot.
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 Premises or the Building or to any
appurtenances or equipment therein. There shall be no abatement of rent because
of such repairs, alterations, additions or improvements or because of any delay
by Landlord in making the same provided that Landlord shall exercise reasonable
efforts to perform such work at such time and in such a manner as to minimize
disruption to Tenant's business operations.
Tenant shall give to Landlord prompt written notice of any accidents
to, or defects in plumbing, electrical, heating and air conditioning systems and
apparatus located in the Leased Premises.
14. Credit Enhancements. Tenant shall deliver, simultaneously with the
-------------------
execution and delivery of this Lease, an irrevocable standby letter of credit
from a financial institution reasonably acceptable to Landlord in form and
substance substantially similar to that attached hereto as Exhibit "E", in the
amount of Seventy Three Thousand Two Hundred Ninety Two Dollars ($73,292) to
secure the payment of the Tenant's portion of the cost of Landlord's Work. The
amount of the letter of credit shall be reduced on a straight line basis in each
of the
17
first five (5) years of the Lease Term such that, as of the first day of the
sixth year of the Lease Term, no letter of credit shall be required hereunder.
15. Quiet Enjoyment. Tenant, upon paying the Annual Fixed Rent, all
----------------
Additional Rent and all other sums and charges herein provided for and, upon
observing, keeping and performing all covenants, agreements and conditions of
this Lease on Tenant's part to be observed, kept and performed, shall quietly
have and enjoy the Leased Premises throughout the Lease Term without hindrance
or molestation by Landlord or by anyone claiming by, through or under Landlord,
subject, however, to the exceptions, reservations and conditions of this Lease.
16. Landlord's Right of Entry. Landlord, any ground lessor, mortgagee or
-------------------------
any agent thereof, shall have the right, upon reasonable prior notice, to enter
the Leased Premises during regular business hours: to perform Landlord's
covenants as set forth in this Lease, for purposes of inspection and to insure
Tenant's compliance with the provisions of this Lease, to make any repairs,
replacements or alterations to the Building or do any work which Landlord may
deem necessary, or to show the Leased Premises to prospective purchasers or
mortgagees of the Building, and also, during the last six (6) months of the
final Lease Term, to show the Leased Premises to prospective tenants. Landlord
shall use commercially reasonable efforts during such entry to minimize
disruption of Tenant's business operations.
17. Surrender of Premises. Any alterations, improvements or additions to
---------------------
the Leased Premises made in accordance with Landlord's Work, as same may have
been modified from time to time throughout construction of the Leased Premises
shall remain upon the Leased Premises at the expiration or earlier termination
of this Lease and shall become the property of Landlord. Any alterations,
improvements or additions to the Leased Premises made after substantial
completion of the Leased Premises shall remain upon the Leased Premises at the
expiration or earlier termination of this Lease and shall become the property of
Landlord, unless, Landlord, at the time of Landlord's approval of plans for
same, shall have given written notice to Tenant to remove such alterations,
improvements and additions. In such event, Tenant shall repair any damage caused
by the removal (including, without limitation, repairing and patching holes,
replacing ceiling, floor and wall surfaces and repainting), and restore the
Leased Premises to substantially the same condition in which it existed prior to
the time that any such alterations, improvements or additions were made. Should
Tenant fail to remove any such alterations, improvements or additions or to
repair such damage when required by Landlord so to do pursuant to this Section
17, Landlord may do so, and the reasonable cost and expense thereof shall be
paid by Tenant to Landlord as Additional Rent.
Any personal property which shall remain in the Leased Premises or any
part thereof after the expiration or earlier termination of this Lease shall be
deemed to have been abandoned and either may be retained by Landlord as
Landlord's property or may be disposed of in such manner as Landlord may see
fit, provided that notwithstanding the foregoing Tenant shall, upon request of
Landlord made no later then ten (10) days after the expiration or earlier
termination of this Lease, promptly remove from the Building any such personal
property at Tenant's own cost and expense. Should Tenant fail so to do, Landlord
may do so, and the reasonable cost and expense thereof shall be paid by Tenant
to Landlord as Additional Rent. If such personal property or any part thereof
shall be sold by Landlord, Landlord may receive and
18
retain the proceeds of such sale(s) as are necessary to reimburse Landlord for
its expenses in connection with the disposal of such personal property, with the
remainder, if any, being delivered to Tenant forthwith. The covenants contained
in this Section 17 shall survive the expiration or earlier termination of this
Lease.
18. Miscellaneous Covenants. Tenant shall faithfully perform all of the
-----------------------
covenants and conditions to be performed and observed by Tenant hereunder and in
addition to those covenants and conditions which are set forth elsewhere herein,
Tenant agrees:
A. To secure and maintain in effect any governmental approvals,
licenses and permits as may be required for Tenant's use and occupancy of the
Leased Premises.
B. To comply with all applicable laws, codes and regulations of
governmental authorities applicable to Tenant's use and occupancy of the Leased
Premises and all rules and regulations of insurers of the Leased Premises and
the National Board of Fire Underwriters as they apply to Tenant's use and
occupancy of the Leased Premises.
C. Not to use or place any curtains, blinds, drapes, coverings or
signs over any exterior windows or upon the window surfaces as would be visible
from the outside of the Building without the prior written approval of Landlord.
19. Rules and Regulations. Tenant covenants and agrees that Tenant, its
---------------------
servants, employees, agents, invitees, licensees and other visitors shall
observe faithfully, and comply strictly with, the Rules and Regulations
contained in Exhibit "C", attached hereto and made a part hereof, and such other
and further reasonable Rules and Regulations as Landlord or Landlord's agents
may, after written notice to Tenant, from time to time adopt, provided all such
Rules and Regulations shall be applied to and enforced against all tenants of
the Building in a nondiscriminatory manner. Nothing in this Lease contained
shall be construed to impose upon Landlord any duty or obligation to enforce the
Rules and Regulations or terms, covenants or conditions in any other lease as
against any other tenant, and Landlord shall not be liable to Tenant for
violation of the same by any other tenant, its servants, employees, agents,
invitees, licensees or other visitors. Landlord acknowledges that Tenant shall
maintain vending machines on the Leased Premises for the use of its employees
and invitees only, and consents to such installation.
20. Performance of Tenant's Covenants. If Tenant fails to perform any
------------------------------------
covenant or observe any condition to be performed or observed by Tenant
hereunder or acts in violation of any covenant or condition hereof, Landlord
may, but shall not be required to on behalf of Tenant, perform such covenant
and/or take such steps, including entering upon the Leased Premises, as may be
necessary or appropriate to meet the requirements of any such covenant or
condition, provided that Landlord shall have given Tenant at least seven (7)
days prior written notice of Landlord's intention to do so, unless an emergency
situation exists, in which case Landlord shall have the right to proceed
immediately; and all costs and expenses incurred by Landlord in so doing,
including reasonable legal fees, shall be paid by Tenant to Landlord upon
demand, plus interest at the Overdue Interest Rate from the date of
expenditure(s) by Landlord, as Additional Rent. Landlord's proceeding under the
rights reserved to Landlord
19
under this Section shall not in any way prejudice or waive any rights as
Landlord might otherwise have against Tenant by reason of Tenant's default.
21. Eminent Domain. In the event of the exercise of the power of eminent
--------------
domain whereby (A) such portion of the Building is taken that access to the
Leased Premises is permanently impaired thereby and reasonable alternate access
is not provided by Landlord within a time period which is reasonable under the
circumstances, (B) all or substantially all of the Leased Premises or the
Building is taken, (C) if less than substantially all of the Building is taken
but Landlord, acting in good faith, determines that it is economically
unfeasible to continue to operate the uncondemned portion as a first-class
office building, or (D) if less than substantially all of the Leased Premises is
taken, but Tenant, acting in good faith, determines that because of such taking
it is economically unfeasible to continue to conduct its business in the
uncondemned portion of the Leased Premises, then in the case of (A) or (B),
either party, and in the case of (C), Landlord, and in the ease of (D), Tenant,
shall have the right to terminate this Lease as of the date when possession of
that part which was taken is required to be delivered or surrendered to the
condemning authority; and in such ease all rent and other charges shall be
adjusted to the date of termination. The foregoing right of termination shall be
applicable to the taking of any estate or interest whatsoever which, as a matter
of law, would deprive Landlord or Tenant of any right to possession (in common
with others, as to common areas of the Building) for any period in excess of
sixty (60) consecutive days from the date of taking, whether or not the taking
be in fee, for a term of years or of any other estate or interest; and a taking
shall include the transfer of title or of any interest in the Building by deed
or other instrument in settlement of or in lieu of transfer by operation of law
incident to condemnation proceedings.
Tenant shall have no right to participate or share in any condemnation
claim, damage award or settlement in lieu thereof with respect to any taking of
any nature; provided, however, that Tenant shall not be precluded from claiming
or receiving payment for Tenant's relocation and moving expenses as may be
permitted under applicable law so long as the amount of the same is not
subtracted from the award which Landlord is entitled to receive.
22. Casualty Damage. In the event of damage to or destruction of the
---------------
Leased Premises caused by fire or other casualty, or of the entrances and other
common facilities necessary to provide normal access to the Leased Premises, or
to other portions of the Building or its equipment which portions and equipment
are necessary to provide services to the Leased Premises in accordance herewith,
Landlord shall undertake to make repairs and restorations as hereafter provided,
unless this Lease be terminated by Landlord or Tenant or unless any mortgagee
which is entitled to receive casualty insurance proceeds fails to make available
to Landlord a sufficient amount of such proceeds to cover the cost of such
repairs and restoration.
If (A) the damage is of such nature or extent, in Landlord's sole
judgment, that more than one hundred and eighty (180) consecutive days, after
commencement of the work, would be required (with normal work crews and hours)
to repair and restore the part of the Leased Premises or the Building which has
been damaged, or (B) a substantial portion of the Leased Premises or the
Building is so damaged that, in Landlord's sole judgment, it is uneconomic to
restore or repair the Leased Premises or the Building, as the case may be, or
(C) less than two (2) years remain on the Lease Term, Landlord shall so advise
Tenant in the case
20
described in clauses (A) and (B) above, not later than ninety (90) days after
the occurrence of such casualty, and in the case of clause (C) above, promptly,
and either party, in the case described in clause (A) above, or Landlord, in the
case described in clauses (B) or (C) above, for a period of ten (10) days
thereafter, shall have the right to terminate this Lease by written notice to
the other, as of the date specified in such notice, which termination date shall
be no later than thirty (30) days after the date of such notice. In the event of
such fire or other casualty, if this Lease is not terminated pursuant to the
terms of this Section 22, if sufficient casualty insurance proceeds are
available for use for such restoration or repair, and if this Lease is then in
full force and effect, Landlord, commencing not later than ninety (90) days
following the occurrence of such casualty, shall proceed diligently and
continuously to restore the Leased Premises to substantially its condition prior
to the occurrence of the damage, provided that Landlord shall not be obligated
to repair or restore any alterations, additions or fixtures which Tenant may
have installed (whether or not Tenant has the right or the obligation to remove
the same or is required to leave the same on the Leased Premises as of the
expiration or earlier termination of this Lease) unless Tenant, in a manner
satisfactory to Landlord, assures payment in full of all cost as may be incurred
by Landlord in connection therewith. Landlord shall not insure any improvements
or alterations to the Leased Premises in excess of those made pursuant to the
Final Plans, or any fixtures, equipment or other property of Tenant. Tenant
shall have the right, at its sole expense, to insure the value of leasehold
improvements of Tenant made pursuant to Change Orders or otherwise made by
Tenant in addition to Landlord's Work, fixtures, equipment or other property
located in the Leased Premises, for the purpose of providing funds to Landlord
to repair and restore the Leased Premises to substantially its condition prior
to the occurrence of the damage. If there be any such alteration, fixtures or
additions and Tenant does not assure or agree to assure payment of the cost of
restoration or repair as aforesaid, Landlord shall have the right to determine
the manner in which the Leased Premises shall be restored so as to be
substantially as the Leased Premises existed prior to the damage occurring, as
if such alterations, additions or fixtures had not then been made or installed.
The validity and effect of this Lease shall not be impaired in any way by the
failure of Landlord to complete repairs and restoration of the Leased Premises
or of the Building within one hundred eighty (180) consecutive days after
commencement of work, even if Landlord had in good faith notified Tenant that
the repair and restoration could be completed within such period, provided that
Landlord proceeds diligently with such repair and restoration; provided, further
however that Landlord's portion of such restoration shall be completed within
three hundred sixty (360) days of the occurrence of such casualty.
In the case of damage to the Leased Premises not caused by the
negligence or other tortious acts of Tenant which is of a nature or extent that
Tenant's continued occupancy is substantially impaired the Annual Fixed Rent
otherwise payable by Tenant hereunder shall be equitably abated or adjusted for
the duration of such impairment. Anything to the contrary in this Lease
notwithstanding, expressed or implied, Landlord shall have no liability to
Tenant for and shall have no duty to repair, replace or restore any damage
whatsoever, occurring as a result of leakage or seepage of water or any other
liquid from any source whatsoever, or breakage of any pipes, mains or other
plumbing located in or about the Building, or snow, frost, steam, excessive heat
or cold, falling plaster, sewage, gas, odors, noise, or by air conditioning or
heating apparatus, provided, however, Landlord shall repair, replace and restore
all damage to the
21
Building structure, systems and fixtures. Tenant shall be responsible to insure
and/or repair all of Tenant's leasehold improvements and all equipment, fixtures
and personal property located in the Leased Premises.
23. Hold Harmless, Public Liability Insurance, Waiver of Subrogation.
---------------------------------------------------------------------
Tenant covenants and agrees to exonerate, indemnify, defend, protect and save
Landlord, owner of the Lot and Landlord's managing agent, if any, harmless from
and against any and all claims, demands, expenses, losses, suits and damages as
may be occasioned by reason of (A) any accident or matter occurring on the
Leased Premises, causing injury to persons or damage to property (including,
without limitation, the Leased Premises), unless such accident or other matter
resulted from the negligence or otherwise tortious act of Landlord or Landlord's
agents, contractors or employees, (B) the failure of Tenant to fully and
faithfully perform the obligations and observe the conditions of this Lease, or
(C) the negligence or otherwise tortious act of Tenant, its agents, contractors
or employees or anyone in or about the Building on behalf or at the invitation
or right of Tenant.
Landlord covenants and agrees to exonerate, indemnify, defend, protect
and save Tenant harmless from and against any and all claims, demands, expenses,
losses, suits and damages as may be occasioned by reason of (A) any accident or
matter occurring on or about the Building or Lot, causing injury to persons or
damage to property (including, without limitation, the Leased Premises), unless
such accident or other matter resulted from the negligence or otherwise tortious
act of Tenant or Tenant's agents, contractors or employees, (B) the failure of
Landlord fully and faithfully to perform the obligations and observe the
conditions of this Lease, or (C) the negligence or otherwise tortious act of
Landlord, its management company and their respective agents, contractors or
employees or anyone in or about the Building on behalf of or at the invitation
or right of Landlord.
Tenant shall keep in force at its own expense comprehensive general
liability insurance (including a contractual liability insurance endorsement) in
companies acceptable to Landlord sufficient to cover such indemnification and
naming as insured Landlord, owner of the Lot, Landlord's managing agent, if any,
and Tenant against claims for personal injury" including bodily injury, death or
property damage in amounts not less than $1,000,000 or such higher limits as may
be customary in the commercial office market, and Tenant will further deposit
the policy or policies of such insurance, or certificates thereof, with
Landlord. Said policy or policies of insurance or certificates thereof shall
have attached thereto an endorsement that such policy shall not be canceled
without at least ten (10) days prior written notice to Landlord and Landlord's
managing agent, if any, and that no act or omission of Tenant shall invalidate
the interest of Landlord under said insurance. Landlord shall keep in force and
effect such broad form policy or policies of insurance as shall provide for the
full replacement value of the Building.
Landlord and Tenant hereby release the other from any and all
liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise for any loss or damage to property
covered by any insurance then in force or which should have been kept in force
and effect in accordance with the provisions of this Lease, even if such fire or
other casualty shall have been caused by the fault or negligence of the other
party, or
22
anyone for whom such party may be responsible, provided, however, that this
release shall be applicable and in force and effect only to the extent of and
with respect to any loss or damage occurring during such time as the policy or
policies of insurance covering said loss shall contain a clause or endorsement
to the effect that this release shall not adversely affect or impair said
insurance or prejudice the right of the insured to recover thereunder.
24. Mortgagee and Other Agreements. In the event any person, firm,
---------------------------------
corporation or other entity who is a party to any instrument to which this Lease
is subject or subordinate (including, without limitation, any mortgage now or
hereafter placed upon the Building or Lot or on any interest created therein) or
their successor(s), succeeds thereunder to the interest of Landlord hereunder in
the Building or the Lot, or acquires the right to possession of the Building or
the Lot, such person, firm, corporation or other entity shall not be (A) liable
for any act or omission of the party named above as Landlord under this Lease;
(B) liable for the performance of Landlord's covenants hereunder which arise and
accrue prior to such person, firm, corporation or other entity succeeding to the
interest of Landlord hereunder or acquiring such right to possession; (C)
subject to any offsets or defenses which Tenant may have at any time against
Landlord except as provided in the Lease or at law; and (D) bound by any rent
which Tenant may have paid previously for more than one (1) month in advance;
and (E) bound by any amendment or modification hereof relating to the reduction
of rent, shortening of term, or effecting a cancellation or surrender hereof and
made without the consent of such person, firm, corporation or other entity
unless such cancellation or surrender is provided for in this Lease.
Tenant and Landlord each agrees, from time to time as may be requested
by the other, to execute, acknowledge and deliver an estoppel letter certifying
to such party as Tenant or Landlord reasonably may designate, including any
mortgagee, assignee or sublessee, as the case may apply and to the extent true,
that this Lease is in full force and effect and has not been amended, modified
or superseded, that Landlord has satisfactorily completed all construction work
required by this Lease, that Tenant has accepted the Leased Premises and is now
in possession thereof, that Tenant has no defense, offsets or counterclaims
hereunder or otherwise against Landlord with respect to this Lease or the Leased
Premises and that Landlord or Tenant is not in default hereunder (or if any of
the foregoing not be the case, specifying in reasonable detail the extent and
nature thereof), that Tenant has no knowledge of any pledge or assignment of
this Lease or rentals hereunder, that rent is accruing under this Lease but has
not been paid more than one (1) month in advance and the date to which rent has
been paid; and any other instrument as may be reasonably requested to be
executed by Tenant or Landlord by any mortgagee of the Lot or the Building or
any interest therein, or any prospective assignee or sublessee of the Leased
Premises, so long as the rights of the party delivering the estoppel as provided
for by this Lease are not materially affected by any such other instrument.
Tenant's estoppel letter shall be in the form of Exhibit "D" attached hereto and
made a part hereof, or in such other form as Landlord or its mortgagee shall
hereafter request.
25. Subordination and Attornment. This Lease and the estate, interest and
----------------------------
rights hereby created are subordinate to any mortgage now or hereafter placed
upon the Lot, the Building or any estate or interest therein, including, without
limitation, any mortgage on any leasehold estate, and to all renewals,
modifications, consolidations, replacements and extensions of the same as well
as any substitutions therefor. Tenant agrees that in the event any person, firm,
23
corporation or other entity acquires the right to possession of the Lot and the
Building including any mortgagee or holder of any estate or interest having
priority over this Lease, Tenant shall, if requested by such person, firm,
corporation or other entity, attorn to and become the tenant of such person,
firm, corporation or other entity, upon the same terms and conditions as are set
forth herein for the balance of the Lease Term, provided that such person, firm,
corporation or other entity shall enter into a non-disturbance agreement with
Tenant in form and substance reasonably satisfactory to Tenant and its counsel.
Notwithstanding the foregoing, any mortgagee may, at any time, subordinate its
mortgage to this Lease, without Tenant's consent, by notice in writing to
Tenant, and thereupon this Lease shall be deemed prior to such mortgage without
regard to their respective dates of execution and delivery, and in that event,
such mortgagee shall have the same rights with respect to this Lease as though
it had been executed prior to the execution and delivery of the mortgage.
Landlord shall obtain, prior to the Commencement Date, a non-disturbance
agreement in form and substance reasonably satisfactory to Tenant and its
counsel, from the Landlord's mortgagee.
Tenant, if requested by Landlord, shall execute any such instruments
in recordable form as may be reasonably required by Landlord in order to confirm
or effect the subordination, non-disturbance and attornment provisions of this
Section.
26. Assignment and Subletting. Tenant shall not assign, pledge, mortgage
-------------------------
or otherwise transfer or encumber this Lease, nor sublet all or any part of the
Leased Premises or permit the same to be occupied or used by anyone other than
Tenant or its employees without Landlord's prior written consent, which consent
shall not be unreasonably withheld or delayed. Tenant shall not solicit current
tenants of the Building nor advertise any rental rate below the then current
market rental rate for the Building. Notwithstanding anything in the foregoing
to the contrary, Tenant may assign or sublet the Leased Premises without
Landlord's consent to a corporation which is a parent or subsidiary of Tenant or
is affiliated with Tenant in a common group of corporations, or any purchaser of
same, provided that no such assignment or subletting shall relieve Tenant of its
obligations and liabilities hereunder.
Tenant's request for consent shall be in writing and contain the name,
address, and description of the business of the proposed assignee or subtenant,
its most recent financial statement and the other evidence of financial
responsibility, its intended use of the Leased Premises, and the terms and
conditions of the proposed assignment or subletting.
Within ten (10) days from receipt of such request, Landlord shall
either: (A) grant or refuse consent; or (B) elect to require Tenant (i) to
execute an assignment of lease or sublease of Tenant's interest hereunder to
Landlord or its designee upon the same terms and conditions as are contained
herein, together with an assignment of Tenant's interest as sublessor in any
such proposed sublease, except that no subtenant or assignee requiring
Landlord's approval hereunder shall enjoy the rights granted to Tenant under
Sections 42, 43 and 44 hereof, or (ii) if the request is for consent to a
proposed assignment of this Lease, to terminate this Lease and the term hereof
effective as of the date such assignment would have otherwise become effective.
In the event that Landlord has not notified Tenant of its election as provided
herein, Landlord shall be deemed to have consented to the proposed assignment or
sublease.
24
Each assignee hereunder shall assume and be deemed to have assume
this Lease and shall be and remain liable jointly and severally with Tenant for
all payments and for the due performance of all terms, covenants, conditions and
provisions herein contained on Tenant's part to be observed and performed. No
assignment shall be binding upon Landlord unless the assignee shall deliver to
Landlord an instrument in recordable form containing a covenant of assumption by
the assignee, but the failure or refusal of assignee to execute the same shall
not release assignee from its liability as set forth herein.
All the foregoing notwithstanding, Tenant shall not enter into any
lease, sublease, license, concession or other agreement for the use, occupancy
or utilization of the Leased Premises or any portion thereof, which provides for
a rental or other payment for such use, occupancy or utilization based in whole
or in part on the income or profits derived by any person from the property
leased, used, occupied or utilized (other than an amount based on a fixed
percentage or percentages of receipts or sales). Any such purported lease,
sublease, license, concession or other agreement shall be absolutely void and
ineffective as a conveyance or any right or interest in the possession, use or
occupancy of any part of the Leased Premises.
Any consent by Landlord hereunder shall not constitute a waiver of
strict future compliance by Tenant of the provisions of this Section 26 or a
release of Tenant from the full performance by Tenant of any of the terms,
covenants, provisions, or conditions in this Lease contained.
27. Default. Any other provisions in the Lease notwithstanding, it shall
-------
be an Event of Default under this Lease if (A) Tenant fails to pay any
installment of Fixed Rent, Additional Rent or other sum payable by Tenant
hereunder when due and such failure continues for a period of ten (10) days
after written notice given by or on behalf of Landlord to Tenant, provided,
however, Landlord need not give any such written notice, and Tenant shall not be
entitled to any such period of grace, more than once in any twelve (12) month
period, (B) Tenant vacates the Leased Premises or uses or occupies the Leased
Premises otherwise than as permitted by Sections 1 and 10 hereof, or assigns or
sublets, or purports to assign to sublet, the Leased Premises or any part
thereof otherwise than in the manner and upon the conditions set forth in
Section 26 hereof, (C) Tenant fails to observe or perform any other covenant or
agreement of Tenant herein contained and such failure continues after written
notice given by or on behalf of Landlord to Tenant for more than thirty (30)
days and such additional time, if any, as is reasonably necessary to cure such
failure, provided Tenant commences to cure such failure within such thirty (30)
day period and diligently thereafter prosecutes such cure to completion, (D)
without Landlord's prior written consent, Tenant removes or attempts to remove
or manifests an intention to remove any or all of Tenant's property from the
Leased Premises otherwise than in the ordinary and usual course of business, (E)
Tenant makes any assignment for the benefit of creditors; Tenant commits an act
of bankruptcy or files a petition or commences any proceeding under any
bankruptcy or insolvency law; a petition is filed or any proceeding is commenced
against Tenant under any bankruptcy or insolvency law and such petition or
proceeding is not dismissed within sixty (60) days; Tenant is adjudicated a
bankrupt; Tenant by any act indicates its consent to, approval of or
acquiescence in, or a court approves, a petition filed or proceeding commenced
against Tenant under any bankruptcy or insolvency law; a receiver or other
official is appointed for Tenant or for a substantial part of Tenant's assets or
for Tenant's interests in this
25
Lease; any attachment or execution against a substantial part of Tenant's assets
or of Tenant's interest in this Lease remains unstayed or undismissed for a
period of more than twenty (20) days; a substantial part of Tenant's assets or
of Tenant's interest in this Lease is taken by legal process in any action
against Tenant, or (F) any of the foregoing occur as to any guarantor or surety
of Tenant's performance under this Lease, or such guarantor or surety defaults
on any provision under its guaranty or suretyship agreement.
28. Landlord's Remedies.
-------------------
A. If an Event of Default hereunder shall have happened and be
continuing, Landlord may, at its option:
(i) declare due and payable and xxx for and recover, all unpaid
Fixed Rent for the unexpired period of the Lease Term (and also all Additional
Rent as the amount(s) of same can be determined or reasonably estimated) as if
by the terms of this Lease the same were payable in advance, together with all
legal fees and other expenses incurred by Landlord in connection with the
enforcement of any of Landlord's rights and remedies hereunder, such amount to
be discounted in accordance with Section 28.F. hereof, and/or
(ii) collect or bring action for such Fixed Rent and Additional
Rent as being rent in arrears, or may enter judgment for possession in an
amicable action, or may file a Proof of Claim in any bankruptcy or insolvency
proceeding for such Fixed Rent and Additional Rent, or institute any other
proceedings, whether similar or dissimilar to the foregoing, to enforce payment
thereof, and/or
(iii) terminate the Lease Term by giving written notice thereof
to Tenant and, upon the giving of such notice, the Lease Term and the estate
hereby granted shall expire and terminate with the same force and effect as
though the date of such notice was the date hereinbefore fixed for the
expiration of the Lease Term, and all rights of Tenant hereunder shall expire
and terminate, but Tenant shall remain liable as hereinafter provided, and/or
(iv) exercise any other rights and remedies available to
Landlord at law or in equity provided hereunder.
B. If any Event of Default shall have happened and be continuing,
Landlord may, whether or not the Lease Term has been terminated as herein
provided, re-enter and repossess the Leased Premises or any part thereof by
force, summary proceedings, ejectment or otherwise and Landlord shall have the
right to remove all persons and property therefrom. Landlord shall be under no
liability for or by reason of any such entry, repossession or removal; and no
such re-entry or taking of possession of the Leased Premises by Landlord shall
be
26
construed as an election on Landlord's part to terminate the Lease Term unless a
written notice of such intention be given to Tenant pursuant to Section
28(A)(iii) or unless the termination of this Lease be decreed by a court of
competent jurisdiction.
C. At any time or from time to time after the repossession of the
Leased Premises or any part thereof pursuant to Section 28(B), whether or not
the Lease Term shall have been terminated pursuant to Section 28(A)(iii),
Landlord, notwithstanding anything elsewhere herein to the contrary, shall make
all commercially reasonable efforts to mitigate any damages to Landlord as a
result of any default by Tenant hereunder, including, without limitation, to
relet all or any part of the Leased Premises for the account of Tenant for such
term or terms (which may be greater or less than the period which would
otherwise have constituted the balance of the Lease Term) and on such conditions
(which may include concessions or free rent) and for such uses as Landlord, in
its commercially reasonable discretion, may determine, and Landlord may collect
and receive any rents payable by reason of such reletting. For the purpose of
such reletting, Landlord may decorate or make repairs, changes, alterations or
additions in or to the Leased Premises or any part thereof 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 legal fees
expended by Landlord.
D. Subject to the results of Landlord's efforts to mitigate damages,
as aforesaid, no expiration or termination of the Lease Term pursuant to Section
28(A)(iii), by operation of law or otherwise, and no repossession of the Leased
Premises or any part thereof pursuant to Section 28(B), or otherwise, and no
reletting of the Leased Premises or any part thereof pursuant to Section 28(C)
shall relieve Tenant of its liabilities and obligations hereunder, all of which
shall survive such expiration, termination, repossession or reletting.
E. In the event of any expiration or termination of this Lease or
repossession of the Leased Premises or any part thereof by reason of an
occurrence of an Event of Default, and Landlord has not elected to accelerate
rent pursuant to Section 28(A)(i), Tenant shall pay to Landlord the Fixed Rent,
Additional Rent and other sums required to be paid by Tenant to and including
the date of such expiration, termination or repossession; and, thereafter,
Tenant shall, until the end of what would have been the expiration of the Lease
Term in the absence of such expiration, termination or repossession, and whether
or not the Leased Premises or any part thereof shall have been relet, be liable
to Landlord for, and shall pay to Landlord, as liquidated and agreed current
damages, the Fixed Rent, Additional Rent and other sums which would be payable
under this Lease by Tenant in the absence of such expiration, termination or
repossession, less the net proceeds, if any, of any reletting effected for the
account of Tenant pursuant to Section 28(C), after deducting from such proceeds
all of Landlord's reasonable expenses in connection with such reletting
(including, without limitation, all related repossession costs, brokerage
commissions, legal expenses, attorneys' fees, employees' expenses, alteration
costs and expenses of preparation for such reletting). Tenant shall pay such
current damages on the days on which the Fixed Rent would have been payable
under this Lease in the absence of
27
such expiration, termination or repossession, and Landlord shall be entitled to
recover the same from Tenant on each such day.
F. At any time after such expiration or termination of this Lease or
repossession of the Leased Premises or any part thereof by reason of the
occurrence of an Event of Default, whether or not Landlord shall have collected
any current damages pursuant to Section 28(E), Landlord shall be entitled to
recover from Tenant, and Tenant shall pay to Landlord on demand, unless Tenant
has paid the whole of accelerated rent pursuant to Section 28(A)(i), as and for
liquidated and agreed final damages for Tenant's default and in lieu of all
current damages beyond the date of such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual damages), an amount equal
to the excess, if any, of (i) Fixed Rent, Additional Rent and other sums which
would be payable under this Lease for the remainder of the Lease Term from the
date of such demand (or, if it be earlier, the date to which Tenant shall have
satisfied in full its obligations under Section 28(E) to pay current damages)
for what would have been the then unexpired term of this Lease in the absence of
such expiration, termination or repossession, discounted at the rate of six
percent (6%) per annum, over (ii) the then fair rental value of the Leased
Premises for the same period, discounted at a like rate. If any statute or rule
of law shall validly limit the amount of such liquidated final damages to less
than the amount above agreed upon, Landlord shall be entitled to the maximum
amount allowable under such statute or rule of law.
G. Tenant, in consideration for the execution of this Lease by
Landlord and for the covenants and agreements on the part of Landlord herein
contained, and fully comprehending the relinquishment of certain rights
including rights of pre-judgment notice and hearing, hereby expressly authorizes
any attorney of any Court of Record to accept service of process for, to appear
for, and to confess judgment against Tenant in any and all actions brought
hereunder by Landlord against Tenant to recover possession from time to time of
the Leased Premises (and Tenant agrees that upon the entry of each judgment for
said possession a Writ of Possession or other appropriate process may issue
forthwith).
H. INTENTIONALLY DELETED.
I. In any amicable action for ejectment Landlord shall first cause to
be filed in such action an affidavit made by it or someone acting for it setting
forth the facts necessary to authorize the entry of judgment, of which facts
such affidavit shall be conclusive evidence, and if a true copy of this Lease be
filed in such action, it shall not be necessary to file the original as a
warrant of attorney, any rule of court, custom or practice to the contrary
notwithstanding. The authority to confess judgment against Tenant hereunder
shall not be exhausted by one (1) exercise thereof, but judgment may be
confessed as provided herein from time to time as often as any Event of Default
occurs under this Lease, and such authority may be exercised as well after the
expiration of the Lease Term and/or during or after the expiration of any
extended or renewal term.
28
J. No right or remedy herein conferred upon or reserved to Landlord
is intended to be exclusive of any other right or remedy herein by law provided,
but each shall be cumulative and in addition to every right or remedy given
herein or now or hereafter existing at law or in equity or by statute.
K. No waiver by Landlord of any breach by Tenant of any of Tenant's
obligations, agreements or covenants herein shall be a waiver of any subsequent
breach or of any obligation, agreement or covenant, nor shall any forbearance by
Landlord to seek a remedy for any breach by Tenant be a waiver by Landlord or
any rights and remedies with respect to such or any subsequent breach.
L. In the event of a breach or threatened breach by Tenant of any of
the covenants or provisions hereof, Landlord shall have the right of injunction
and right to invoke any remedy allowed at law or in equity as if re-entry
summary proceedings and other remedies were not herein provided for.
M. Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of the Leased Premises, by reason of the violation by Tenant of any
of the covenants and conditions of this Lease, or otherwise.
29. Landlord's Costs and Expenses. Tenant shall pay upon demand all of
-------------------------------
Landlord's costs, charges and expenses, including the fees and out-of-pocket
expenses of legal counsel, agents and others retained by Landlord incurred in
enforcing Tenant's obligations hereunder or incurred by Landlord in any
litigation, negotiation or transaction in which Tenant causes Landlord, without
Landlord's fault, to become involved or concerned, together with interest at the
Overdue Interest Rate from the date incurred by Landlord to the date of payment
by Tenant; provided however, that in the event of litigation between the parties
that is concluded by a final unappealable judgment, the attorneys fees and
expenses of the prevailing party shall be paid by the non-prevailing party.
30. Intentionally Omitted.
31. Successors and Assigns. The obligations of this Lease shall be binding
----------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that Landlord and each successive owner of the
Building and/or the Lot shall be liable only for obligations accruing during the
period of its ownership or interest in the Building or the Lot; and from and
after the transfer by Landlord or such successive owner of its ownership or
other interest in the Building or the Lot, Tenant shall look solely to the
successors in title for the performance of Landlord's obligations hereunder. The
liability of Landlord or any successive owner of the Building and/or the Lot
hereunder and all of its officers, employees, shareholders or
29
joint venturers or partners, if any, whether general or limited, shall be
limited to Landlord's estate or other title or interest in the Building and/or
the Lot.
32. Waivers. No delay or forbearance by Landlord in exercising any right
-------
or remedy hereunder or in undertaking or performing any act or matter which is
not expressly required to be undertaken by Landlord shall be construed,
respectively, to be a waiver of Landlord's rights or to represent any agreement
by Landlord to undertake or perform such act or matter thereafter.
33. Waiver of Trial by Jury. It is mutually agreed by and between
--------------------------
Landlord and Tenant that the respective parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matter whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use of or occupancy of the Leased Premises and/or any claim of
injury or damage and any emergency statutory or any other statutory remedy. It
is further mutually agreed that in the event Landlord commences any summary
proceeding for nonpayment of rent, Tenant will not interpose any counterclaim of
whatever nature or description in any such proceeding.
34. Severability. Each covenant and agreement in this Lease shall for
------------
all purposes be construed to be a separate and independent covenant or
agreement. If any provision in this Lease or the application thereof shall to
any extent be invalid, illegal or otherwise unenforceable, the remainder of this
Lease, and the application of such provision other than as invalid, illegal or
unenforceable, shall not be affected thereby; and such provisions in this Lease
shall be valid and enforceable to the fullest extent permitted by law.
35. Notices. All notices or other communications required or permitted
-------
hereby shall be effective only if the same are in writing and are signed by the
party giving the notice or by an agent or other person authorized in writing to
so act on behalf of such party. Notices to Tenant may be given by the leaving of
the same at the Leased Premises during business hours or by registered or
certified mail, return receipt requested, addressed to Tenant at the address set
forth in Section 1 hereto; with a copy to Xxxxxxxx Xxxxxxxxx Professional
Corporation, Eleven Penn Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, Esquire, and
notices to Landlord shall be given by registered or certified mail, return
receipt requested to the address set forth in Section 1 hereof, with a copy to
Drinker Xxxxxx & Xxxxx LLP, Philadelphia National Bank Building, 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: Xxxx Xxxxxxxx,
Esquire. All notices shall be deemed given unless otherwise specified herein, on
the date when same are delivered, if delivered, or on the date when the same are
deposited in the mail.
36. Amendment and Modifications. This Lease contains the entire agreement
---------------------------
between the parties hereto, and shall not be amended, modified or supplemented
unless by agreement in writing signed by both Landlord and Tenant and the same
shall not be valid unless approved in writing by all mortgagees and holders of
any estate or interest in the Building or the Lot by virtue of leases or other
instruments expressly referred to herein or which are then of record.
30
37. Security Deposit. Upon execution of this Lease, Tenant shall deposit
-----------------
the sum set forth in Section 1 hereof with Landlord as a security deposit (the
"Security Deposit") to be held by Landlord as security for Tenant's performance
of all Tenant's obligations under this Lease. Landlord may commingle the
Security Deposit with its general funds and any interest earned on the Security
Deposit shall belong to Landlord. Landlord, in its sole discretion, may apply
the Security Deposit to cure any Event of Default under this Lease. If any such
application is made, upon notice by Landlord to Tenant, Tenant shall promptly
replace the amount so applied. If there has been no Event of Default within
thirty (30) days after expiration or earlier termination of this Lease, Landlord
shall return the entire balance of the Security Deposit to Tenant. Tenant will
not look to any foreclosing mortgagee on the Lot or Building or any interest
therein for the return of the Security Deposit unless the mortgagee has
expressly assumed Landlord's obligation under this Lease or has actually
received the balance of the Security Deposit. In the event Landlord sells the
Lot and Building and transfers the Security Deposit to a new owner of the Lot
and Building, Tenant shall look solely to such new owner for the return of the
balance of the Security Deposit.
38. Environmental Matters.
----------------------
A. Tenant shall promptly deliver to Landlord copies of any of the
following documents that Tenant receives or prepares:
(i) applications or other materials regarding the Lot,
Building, or Leased Premises submitted to any governmental agency in compliance
with Environmental Statutes;
(ii) any notifications regarding the Lot, Building, or Leased
Premises submitted to any person pursuant to Environmental Statutes;
(iii) any permit, license, approval, amendment or modification
thereto granted regarding the Lot, Building, or Leased Premises pursuant to
Environmental Statutes;
(iv) any record or manifest required to be maintained regarding
the Lot, Building, or Leased Premises pursuant to Environmental Statutes; and
(v) any correspondence, notice of violation, summons, order,
complaint or other document received by Tenant or its lessees, sublessees or
assigns (if permitted), pertaining to the Lot, Building, or Leased Premises and
to compliance with any Environmental Statutes.
"Environmental Statutes" shall mean all statutes, ordinances,
regulations, orders and requirements of common law regulating environmental
matters concerning (a) activities at the Lot, Building or Leased Premises, (b)
repairs or construction of any improvements located on the Lot, (c) handling of
any materials, (d) discharges to the air, soil, surface water or ground water,
and (e) storage, treatment or disposal of any waste at or connected with any
activity at the Lot, Building or Leased Premises.
31
B. In the event that Landlord or Landlord's mortgagee performs or
causes to perform an investigation of the Lot or Building of any of the below
described matters, Tenant, at Landlord's or such mortgagee's sole cost and
expense, and, in any event, not more than once during each Term of the Lease,
shall cooperate with Landlord or Landlord's mortgagee with respect to such
investigation:
(i) compliance at the Lot, Building, or Leased Premises with
Environmental Statutes;
(ii) the presence of hazardous substances or contamination at
the Lot, Building, or Leased Premises;
(iii) the presence at the Lot, Building, or Leased Premises of
polychlorinated biphenyls, substances containing polychlorinated biphenyls,
asbestos, materials containing asbestos, or ureaformaldehyde foam insulation;
(iv) the presence at the Lot of (a) a wetland or other "water of
the United States" for purposes of Section 404 of the federal Clean Water Act,
33 U.S.C. ss. 1344, or any similar area regulated under any state law, (b) a
flood plain or other flood hazard area as defined pursuant to the Pennsylvania
Flood Plain Management Act, Pa. Stat. tit. 3 2, ss. 679. 101 to .601 (Xxxxxx
Sup. 1989), (c) a portion of the coastal zone for purposes of the federal
Coastal Zone Management Act, 16 U.S.C. xx.xx. 1451-1464, or (d) any other area
development of which is specifically restricted under applicable law by reason
of its physical characteristics or prior use;
(v) the presence at the Lot, Building, or Leased Premises of
radon-products; or
(vi) the presence at the Lot, Building, or Leased Premises of
tanks presently or formerly used for the storage of any liquid or gas above or
below ground.
C. In the event any present or future Federal, State or municipal
statute, ordinance, law, rule or regulation requires Landlord or Tenant to
obtain a clearance certificate or Declaration of Non-Applicability, similar or
dissimilar to those required by the New Jersey Environmental Clean-Up
Responsibility Act, upon the expiration or earlier termination of the Lease
Term, or upon the sale of the Lot or Building by Landlord, Tenant will apply
therefor, or execute and deliver an application therefor to Landlord without
delay, and take such action as may be necessary under such applicable statute,
ordinance, law, rule or regulation to obtain such clearance certificate or
Declaration of Non-Applicability.
39. Brokers. Landlord and Tenant each represent and warrant to the other
-------
that it has not engaged any broker, finder or other person other than the
broker, if any, listed in Section I hereof, who would be entitled to any
commission or fees in respect of the negotiation, execution or delivery of this
Lease. Landlord and Tenant each agree to indemnify and hold harmless the other
against any loss, cost, liability or expense incurred by the other as a result
of any claim asserted by any other broker, finder or other person on the basis
of any arrangements or agreements made or alleged to have been made by or on
behalf of the other. Landlord shall be
32
responsible for the payment of a brokerage fee to the broker listed in Section I
at Landlord's scheduled commission rate or as otherwise agreed in writing
between Landlord and such broker.
40. Financial Statements. Tenant is a publicly traded company and shall
--------------------
deliver to Landlord a copy of Tenant's published annual report as soon as
available following the end of Tenant's fiscal year and, within thirty (30) days
of Landlord's reasonable request therefor, shall furnish a copy of the most
recent financial statement prepared by Tenant.
41. Options to Extend. Provided no Event of Default under this Lease has
-----------------
occurred and is continuing, Tenant shall have the right and option, exercisable
by giving Landlord written notice at least nine (9) months prior to the
expiration of the then current Lease Term, to extend the Lease Term for two (2)
additional periods of five (5) years each (each, an "Extended Term") and, upon
the giving of such notice, this Lease shall automatically be extended for such
five (5) year periods and no further agreement of extension need be executed. In
the event that Tenant fails to give such notice to Landlord as herein provided,
this Lease shall automatically terminate at the end of the then current Lease
Term and Tenant shall have no further right or option to extend this Lease. Each
Extended Term shall be upon the same covenants, agreements, provisions, terms
and conditions as during the original Lease Term except that the Annual Fixed
Rent during each Extended Term shall equal the Fair Market Rent for the Leased
Premises. The "Fair Market Rent" for the Leased Premises shall mean the rent for
comparable space in a Class A mid-rise building in upper Bucks County for a new
tenant entering into a new five (5) year lease and with the Operating Expense
Allowance being adjusted to reflect the expense allowance used in calculating
the Fair Market Rent. At least twelve (12) months prior to the expiration of the
then current Lease Term, Tenant may request Landlord to quote the Fair Market
Rent effective for the first day of the Extended Term. If Tenant objects
thereto, Landlord and Tenant shall negotiate for a period of thirty (30) days to
determine whether the Fair Market Rent can be agreed upon. In the event Landlord
and Tenant cannot agree on the Fair Market Rent within such thirty (30) day
period, Landlord and Tenant shall mutually select a real estate appraiser (MAI
or equal) knowledgeable of rents obtained in Class A mid-rise office buildings
in upper Bucks County, Landlord shall submit to such appraiser the lowest Annual
Fixed Rent which Landlord is willing to accept, together with any information
with respect thereto that Landlord deems relevant and Tenant shall submit to
such appraiser the highest Annual Fixed Rent which Tenant is willing to pay,
together with any information with respect thereto that Tenant deems relevant,
and the appraiser will then select which of Landlord's or Tenant's submissions
most clearly reflect the Fair Market Rent for Class A mid-rise office buildings
in upper Bucks County for new leases for a five (5) year term as aforesaid. The
appraiser's decision shall be rendered within forty-five (45) days following his
selection and to determine the Fair Market Rent of the Leased Premises as
aforesaid. Such determination shall be final, binding and conclusive on Landlord
and Tenant.
42. Tenant's Termination Rights. In the event that Landlord is unable to
---------------------------
provide Tenant with additional space in the Building or other Buildings in the
Silver Lake Executive Campus as provided in Sections 43 and 44 hereof, Tenant
shall have the right and option to terminate this Lease at any time following
the sixtieth (60th ) Lease Month (the "Termination Date") of the initial Lease
Term by giving Landlord not less than nine (9) months prior written notice
thereof and paying to Landlord at the time of the giving of such notice a
33
termination fee equal to the unamortized portion of the cost of Landlord's Work
and brokerage commissions (the "Termination Fee"), calculated at an interest
rate of ten percent (10%) per annum. If Tenant gives notice of its election to
terminate this Lease under this Section 42, but fails to pay the Termination Fee
or fails to vacate the Leased Premises on or before the Termination Date,
Landlord shall have the option of treating such failure as either (a) Event of
Default hereunder, (b) a rescission of Tenant's notice of termination, or (c) a
holdover under Section 4 hereof. In any event, notwithstanding anything herein
to the contrary, Tenant shall pay Landlord, as Additional Rent hereunder, all
damages, losses, costs and expenses (including reasonable legal fees and
expenses) Landlord may have incurred by reason of Tenant's failure to vacate,
including without limitation, any costs or lost profits from any reletting or
proposed reletting of the Leased Premises and Landlord's efforts to regain
possession of the Leased Premises.
43. Expansion Space. Commencing upon the execution of this Lease and
----------------
until the Expansion Space (as defined below) is leased by Oxford Clinical
Communications, Inc. ("OCC"), Tenant shall have the right to lease that portion
of the balance of the contiguous rentable area of the second floor of the
Building that becomes available as shown in the cross-hatched area of the floor
plan attached as Exhibit "F" hereto (the "Expansion Space"). Such right of offer
shall be on the following conditions:
A. Tenant acknowledges and agrees that the right of offer provided
herein shall be subject in all respects to the rights of OCC so long as the
lease agreement between Landlord and OCC the (the "OCC Lease") shall continue.
The provisions of this Section shall be effective only upon the completion of
the offer procedures set forth in the OCC Lease.
B. If any of the Expansion Space is available for lease, and Landlord
receives an expression of interest from a prospective tenant for all or a
portion of the Expansion Space, Landlord shall give Tenant written notice of the
expression of interest (the "Offer Notice"). The Offer Notice shall include the
identity of the prospective tenant, the proposed date on which Expansion Space
will be available, the proposed length of term of the lease, and all other
material terms and conditions upon, which Landlord intends to offer the
Expansion Space, including Base Rent, Additional Rent, allowances and
concessions. Tenant shall have ten (10) business days after receipt of the Offer
Notice, time being of the essence, to notify Landlord of its exercise of the
offer right hereunder. Tenant acknowledges and agrees that the Offer Notice
provided hereunder may be delivered simultaneously to OCC, but that the exercise
by OCC of its rights under the OCC Lease shall supersede the rights of Tenant
hereunder.
C. If Tenant declines by written notice to lease the space identified
in the Offer Notice or Tenant fails to timely notify Landlord of its election to
lease all or a portion of the Expansion Space pursuant to clause (i) above,
Landlord shall be free to lease such space to the prospective tenant identified
in the Offer Notice upon such rights to renew, extend and expand as set forth in
the Offer Notice (except that Landlord may increase or decrease the economic
terms by an amount not greater than ten percent (10%) of the total economic
terms set forth in the Offer Notice) for a period of six (6) months following
the date Tenant's response is due as provided in clause (i) above.
34
D. Any lease by Tenant of all or any portion of the Expansion Space
shall be upon the same covenants, agreements, provisions, terms and conditions
as in this Lease, except rent, tenant's proportionate share and tenant
improvement allowances, .-and the term of the Lease. The Lease of any Expansion
Space (or any additional space within the Building) shall be coterminous with
the Lease; provided, however that if less than five (5) years remain in the
Lease Term, the Expansion Space shall be leased to Tenant on an "as-is" basis at
a rental rate equal to the prevailing market rate for "as-is" space. If Landlord
and Tenant reach an agreement to lease all or a part of the Expansion Space
pursuant to this Article, Landlord and Tenant will enter into an amendment to
this Lease increasing the rentable area of the Leased Premises, the Annual Fixed
Rent to be paid, Tenant's Proportionate Share and to reflect the provisions
hereof.
E. Landlord shall have no obligation to deliver any notice under
this Section if an Event of Default shall have occurred and be continuing
hereunder beyond all applicable periods of notice and cure.
F. Except as specifically provided herein to the contrary, if any
part of the Expansion Space is leased by Landlord to a third party and
thereafter becomes available for lease, Tenant shall have a subsequent right of
first offer thereon as described in this Section.
44. Tenant Expansion. In the event that Tenant determines that Tenant
----------------
shall require an additional twenty thousand (20,000) rentable square feet of
more of office space, Tenant shall deliver written notice to Landlord (the
"Expansion Notice") setting forth (a) the exact amount of space required by
Tenant; (b) the length of the term, including a proposed commencement date; (c)
any specialty work required (i.e. laboratory or computer rooms); and (d) such
other relevant information necessary for Landlord to fully evaluate and estimate
the cost of Tenant requirements (the "Expansion Requirements"). Not later than
thirty (30) days after the receipt of the Expansion Notice, Landlord shall
deliver a written response ("Landlord's Notice") to Tenant describing (a) the
available contiguous space within the Building; (b) available space in other
Buildings owned by Landlord or its affiliates within the Silver Lake Executive
Campus; and (c) the terms and conditions upon which Landlord or its affiliates
would be able to provide space in a building to be constructed by Landlord in
the Silver Lake Executive Campus, which terms and conditions shall provide,
among other things for a term of not less than ten (10) years with rental at
prevailing market rates. Within fifteen (15) days after the delivery of
Landlord's Notice, Tenant shall deliver to Landlord Tenant's decision as to
whether to proceed with any of the options described in Landlord's Notice which
notice shall be irrevocable and unconditional. In the event that Tenant elects
to lease additional space in accordance with Landlord's Notice and this Lease is
terminated, no termination penalty shall be applicable.
45. Parking. At no additional rent to Tenant, Landlord shall provide on
-------
the Lot on which the Building is located parking for all tenants (including
Tenant), their guests and customers at an overall rate of five (5) parking
spaces per 1,000 square feet of office space in the Building.
46. Headings and Terms. The title, headings and table of contents of
--------------------
this Lease are for convenience of reference only and shall not in any way be
utilized to construe or interpret the agreement of the parties as otherwise set
forth herein. The term "Landlord" and the
35
term "Tenant" as used herein shall mean, where appropriate, all persons acting
by or on behalf of the respective parties, except as to any required approvals,
consents or amendments, modifications or supplements hereunder when such terms
shall only mean the parties originally named on the first page of this Lease as
Landlord and Tenant, respectively, and their agents so authorized in writing.
47. Governing Law. This Lease shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the date first mentioned.
LANDLORD:
NEWTOWN VENTURE IV ASSOCIATES
By Pitcairn Properties Incorporated,
its general partner
By /s/ Xxxxx. X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
TENANT:
COLLAGENEX PHARMACEUTICALS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
36
EXHIBIT "A"
Plan of Leased Premises
[ARCHITECT'S PLAN OF LEASED PREMISES GOES HERE]
EXHIBIT "B"
LANDLORD'S WORK
Attached to and made a part of Lease dated March 15, 1999
Between
Newtown Venture IV Associates
and
CollaGenex Pharmaceuticals, Inc., Tenant
EXHIBIT "B"
Hayden Architecture & Urban Design
as issued for permit 2/1/99
A1.1 General Info and Index
A1.2 Code/Egree Plan
A3.1 Construction Plan
A3.2 Door Schedules and Note
A4.1 Reflected Ceiling
A4.2 Light Fixture Schedule
A5.1 Sec/Elevation
A6.1 Construction Details
E.1 Electrical/Data Plan
E.2 Electrical Schedules
EXHIBIT B
EXHIBIT "C"
RULES AND REGULATIONS
Attached to and made part of Lease dated March 15, 1998
Between
Newtown Venture IV Associates, Landlord
and
CollaGenex Pharmaceuticals, Inc., Tenant
Definitions
-----------
Wherever in these Rules and Regulations the word "Tenant" is used, it shall
be taken to apply to and include Tenant and its servants, agents, employees,
invitees, licensees, subtenants and contractors, and is to be deemed of such
number and gender as the circumstances require. The word "room" is to be taken
to include the space covered by this Lease. The word "Landlord" shall be taken
to include the employees and agents of Landlord.
Washrooms
---------
Toilet rooms, water-closets and other water apparatus shall not be used for
any purposes other than those for which they were constructed.
Smoking Policy
--------------
The Building shall be a "non-smoking building" and Landlord shall
promulgate and enforce rules reasonably necessary to effect the Building's
non-smoking policy. Landlord shall designate a specific smoking area outside of
the Building and prohibit smoking at any entranceway.
Hours of Operation
------------------
Tenant shall have twenty-four hour, seven days per week access to the
Building. At least one passenger elevator shall be in operation at all times.
General Prohibitions
--------------------
In order to insure proper use and care of the Building, Tenant shall not:
(a) Allow any sign, advertisement or notice to be fixed to the
Building, inside or outside, except the building standard signage package,
except as otherwise provided in the Lease.
(b) Make improper noises or disturbances of any kind.
(c) Xxxx or defile water-closets, toilet rooms, walls, windows,
doors or any other part of the Building.
(d) Place anything on the outside of the Building, including roof
setbacks, window ledges and other projections.
(e) Cover or obstruct any window.
(f) Fasten any article, drill holes, drive nails or screws into
the walls, floors, woodwork, window mullions, or partitions; nor shall the same
be painted, papered or otherwise covered or in any way marked or broken without
Landlord's consent.
(g) Interfere with and/or modify the heating or cooling
apparatus.
(h) Allow anyone but Landlord's employees to clean rooms.
(i) Leave rooms without locking doors, stopping all office
machines, and extinguishing all lights.
(j) Install any shades, blinds, or awnings without Landlord's
consent.
(k) Use any electric heating device without Landlord's consent.
(l) Install call boxes or any kind of wire in or on the Building
without Landlord's consent and direction.
(m) Manufacture any commodity, or prepare or dispense any foods
or beverages, whether by vending or dispensing machines or otherwise, or
alcoholic beverages, tobacco, drugs, flowers, or other commodities or articles
without Landlord's consent.
(n) Unless specifically set forth in the Use clause in Section 1
of this Lease, engage in any form of retail sales of goods or merchandise, or
operate a loan, check cashing, precious metals, jewelry or similar business
without Landlord's consent.
(o) Secure duplicate keys for rooms, except from Landlord, or
change the locks of any doors to or in the Leased Premises.
(p) Give its employees or other persons permission to go upon the
roof of the Building without Landlord's consent.
2
Publicity
---------
Tenant shall not use the name of the Building in any way in connection with
its business except as the address thereof. Landlord shall also have the right
to prohibit any advertising by Tenant which, in its opinion, tends to impair the
reputation of the Building or its desirability as a building for offices; and
upon written notice from Landlord, Tenant shall refrain from or discontinue such
advertising.
Business Machines
-----------------
Business machines and mechanical equipment which cause vibration, noise,
cold or heat that may be transmitted to the Building structure or to any leased
space outside the Leased Premises shall be placed and maintained by Tenant, at
its sole cost and expense, in settings of cork, rubber or spring type vibration
eliminators sufficient to absorb and prevent such vibration, noise, cold or
heat.
Excess Trash
------------
If Tenant generates trash in amounts materially in excess of amounts
customarily generated by tenants in a first class office building by reason of
Tenant's data processing, or otherwise, Landlord reserves the right to require
Tenant, at Tenant's expense, to make independent arrangements for the collection
of trash from the Leased Premises and the removal thereof from the Building or
to require Tenant to pay, as Additional Rent, for the removal of such additional
trash.
Movement of Equipment
---------------------
Landlord reserves the right to designate the time when and the method
whereby freight, small office equipment, furniture, safes and other like
articles may be brought into, moved, or removed from the Building or rooms, and
to designate the location for temporary disposition of such items. In no event
shall any of the aforesaid items be taken from Tenant's space for the purpose of
removing the same from the Building without the express consent of Landlord.
Rights Reserved to Landlord
---------------------------
Without abatement or diminution in rent, Landlord reserves and shall have
the following additional rights:
3
(a) To change the name and/or street address of the Building.
(b) To install and maintain a sign or signs on the exterior of the
Building.
(c) To make, either voluntarily or pursuant to governmental
requirement, repairs, alteration or improvements in or to the Building or any
part thereof and during alterations, to close entrances, doors, windows, or
other facilities, provided that such acts shall not unreasonably interfere with
Tenant's use and occupancy of the Leased Premises.
(d) To erect, use and maintain pipes and conduits in and through the
Leased Premises.
(e) To decorate, remodel, repair, alter or otherwise prepare the
Leased Premises for reoccupancy during or prior to the last six (6) months of
the Lease Term or any part thereof, if Tenant vacates the Leased Premises during
that time.
(f) To constantly have pass keys to the Leased Premises.
(g) To grant to anyone the exclusive right to conduct any particular
business or undertaking in the Building.
(h) To exhibit the Leased Premises to others and to display "For Rent"
signs on the Leased Premises.
(i) To take any and all measures, including inspections, repairs,
alterations, additions and improvements to the Leased Premises or to the
Building as may be necessary or desirable in the operation of the Building.
Landlord may enter upon the Leased Premises and may exercise any or all of
the foregoing rights hereby reserved without being deemed guilty of an eviction
or disturbance of Tenant's use or possession and without being liable in any
manner to Tenant.
Regulation Change
-----------------
Landlord shall have the right to amend these Rules and Regulations, and to
make such other and further reasonable Rules and Regulations, as in the judgment
of Landlord, may from time to time be needful for the safety, appearance, care
or cleanliness of the Building or for the preservation of good order therein.
Landlord shall not be responsible to Tenant for the enforcement of the Rules and
Regulations or by the violation thereof by other tenants.
4
EXHIBIT "D"
ESTOPPEL CERTIFICATE
COLLAGENEX PHARMACEUTICALS, INC. ("Tenant"), a Tenant under a certain
Agreement of Lease ("Lease") dated __, 1999, with NEWTOWN VENTURE IV ASSOCIATES,
a Pennsylvania limited partnership ("Landlord"), as Landlord for certain
premises (the "Leased Premises") situate in the Silver Lake Executive Campus,
Newtown Township, Pennsylvania, for good and valuable consideration, and
intending to be legally bound, hereby certifies to ______________ ("Lender"),
who in reliance upon this certification is lending funds secured by a mortgage
of the Lot and the Building of which the Leased Premises is a part that:
1. The Lease initialed by Tenant and attached as Schedule "A" hereto is a
true, complete and correct copy of the Lease, and there has been no amendment,
modification or supplement of any kind or nature varying the stated terms and
conditions thereof, except as so attached;
2. The Lease is presently in full force and effect;
3. The Lease Term commenced on ________ and full rental is now accruing
thereunder and the Lease Term expires on __________;
4. Tenant has accepted possession of the Leased Premises, and any and
all improvements thereto required to be made by Landlord have been completed
in accordance with the Lease;
5. No rent under the Lease has been paid more than thirty (30) days in
advance of its due date;
6. Tenant, as of this date, has no charge, lien, claim or offset under the
Lease or otherwise, against rents or other charges due or to become due
thereunder;
7. All Annual Fixed Rent, Additional Rent and other charges due and
payable under the Lease by Tenant have been paid up to __________ except
escalation, if any, not yet billed by Landlord;
8. No notice has been received by Tenant of a default under the Lease
which has not been cured by Tenant;
9. Tenant has not given Landlord any notices of defaults by Landlord
under the Lease which have not been cured, and there are no defaults by Landlord
under the Lease as of the date hereof;
10. (cross out one of the following)
Landlord is not holding a security deposit as security for the
performance of Tenant's obligations under the Lease;
Landlord is holding a security deposit in the amount of $______ as
security for the performance of Tenant's obligations under the Lease;
11. Tenant has no option or right to purchase the property of which the
Leased Premises is a part, or any part thereof,
12. Upon receipt of notice from Lender of a default under any document
evidencing its loan, Tenant will make all payments under the Lease directly to
Lender, or to Lender's designee, as from time to time directed by Lender.
13. Tenant acknowledges that its Lease is being collaterally assigned to
Lender as security for repayment of the aforementioned mortgage loan from
Lender.
DATE: March 12, 1999 TENANT:
COLLAGENEX PHARMACEUTICALS, INC.
By Xxxxx X. Xxxxxxxxx
----------------------------------
Authorized Officer
2
EXHIBIT "E"
Form of
Letter of Credit
OUR CREDIT NO. ISSUE DATE EXPIRY DATE LETTER OF CREDIT AMOUNT
-------------- ---------- ----------- -----------------------
- - - - USD 73,292.00
---------- -- -- -- -- -- --
RFF
BENEFICIARY APPLICANT
----------- ---------
PITCAIRN COLLAGENEX PHARMACEUTICALS, INC.
DEAR BENEFICIARY:
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT IN YOUR FAVOR, AS
BENEFICIARY, WHICH IS AVAILABLE BY PAYMENT AGAINST THE FOLLOWING DOCUMENTS:
1) THE BENEFICIARY'S DRAFT(S) DRAWN ON US AT SIGHT, DULY ENDORSED ON THE
REVERSE SIDE THEREOF, AND BEARING THE CLAUSE: "DRAWN UNDER FIRST UNION
NATIONAL BANK STANDBY LETTER OF CREDIT NUMBER ."
-------
2) A DATED, TYPEWRITTEN STATEMENT ON THE LETTERHEAD OF AND PURPORTEDLY SIGNED
BY AN AUTHORIZED OFFICER OF THE BENEFICIARY STATING THEREIN:
"WE HEREBY DULY CERTIFY THAT COLLAGENEX PHARMACEUTICALS, INC. HAS VACATED
THE SUBJECT PREMISES IN VIOLATION OF THE TERMS AND CONDITIONS OF THAT
CERTAIN LEASE AGREEMENT DATED BY AND BETWEEN PITCAIRN AND COLLAGENEX
-------
PHARMACEUTICALS, INC. (THE "LEASE") OR, HAS BEEN EJECTED FROM THE SUBJECT
PREMISES IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE LEASE.
THEREFORE WE DEMAND PAYMENT OF USD (SUPPLY AMOUNT) UNDER FIRST UNION
NATIONAL BANK STANDBY LETTER OF CREDIT NUMBER SM406553P."
3) THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL, AMENDMENTS, IF ANY, FOR OUR
ENDORSEMENT. (IF YOUR DEMAND REPRESENTS A PARTIAL DRAWING HEREUNDER, WE
WILL ENDORSE THE ORIGINAL CREDIT AND RETURN SAME TO YOU FOR POSSIBLE FUTURE
CLAIMS. IF, HOWEVER, YOUR DEMAND REPRESENTS A FULL DRAWING OR IF SUCH
DRAWING IS PRESENTED ON THE DAY OF THE RELEVANT EXPIRATION DATE HEREOF, WE
WILL HOLD THE ORIGINAL FOR OUR FILES AND REMOVE SAME FROM CIRCULATION.)
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR IN WHICH THIS LETTER OF
CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES AND ANY SUCH
REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY DOCUMENT OR
INSTRUMENT.
WE ENGAGE WITH YOU THAT ALL DOCUMENTS PRESENTED IN COMPLIANCE WITH THE TERMS OF
THIS LETTER OF CREDIT WILL BE DULY HONORED BY US IF DELIVERED TO FIRST UNION
NATIONAL BANK, X.X. XXX 00000, 0000 XXXXXXXX XXXXXX, XXXXX XXXXX, MAIL CODE
PA4928, ATTENTION: LETTER XX XXXXXX XXXXXXXXXX, XXXXXXXXXXXX, XX 00000 PRIOR TO
3 P.M. ON OR BEFORE THE EXPIRATION DATE HEREOF.
SEE CONTINUATION
ATTACHED TO AND FORMING PART OF STANDBY CREDIT NO. DATED - -
-------- -- -- --
PAGE TWO
EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN THIS LETTER OF CREDIT IS
SUBJECT TO THE "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS: (1993
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500".
ALL INQUIRIES REGARDING THIS CREDIT SHOULD BE DIRECTED TO US AT OUR PHONE
NUMBERS: (000) 000-0000; (000) 000-0000; (000) 000-0000; (000) 000-0000.
***************SAMPLE***************
------------------------------------
XXXXXXX XXXXXXX
INTERNATIONAL BANKING OFFICER
EXHIBIT "F"
Expansion Space
[ARCHITECT'S PLAN OF EXPANSION SPACE GOES HERE]
