SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
April
2, 2007
Date
of
Report (Date of earliest event reported)
Discovery
Laboratories, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-26422
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94-3171943
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(State
or other jurisdiction
of
incorporation)
|
(Commission
File Number)
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(IRS
Employer
Identification
Number)
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2600
Kelly Road, Suite 100
Warrington,
Pennsylvania 18976
(Address
of principal executive offices)
(215)
488-9300
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry
into a Material Definitive Agreement.
On
April
2, 2007, Discovery Laboratories, Inc. (the “Company”) and TR Stone Manor Corp.,
(“Landlord”), entered into a First Amendment to Lease Agreement (“Amendment”)
with respect to the Lease Agreement and Addendum to Lease Agreement dated May
26, 2004 (the “Lease”). The Lease relates to the Company’s headquarters located
at Stone Manor Corporate Center, 2600 Kelly Road, Warrington, PA
18976.
Under
the
terms of the Amendment: (i) the term of the Lease was extended by three years
to
February 2013; (ii) the Landlord consented to the Company’s construction of
analytical laboratory space within the existing premises and agreed to make
a
contribution to tenant improvements in the amount of approximately $400,000;
(iii) the Company, subject to existing tenants’ rights, was granted a right of
first offer on space coming available in any building owned or controlled by
the
Landlord within the Stone Manor Corporate Center complex; (iv) the Company’s
option to extend the Lease was adjusted to an additional period of three years;
and (v) the Company relinquished an early termination right. The total aggregate
base rental payments under the Lease prior to the extension were approximately
$4. 6 million and the total aggregate base rental payments under the extended
portion of the Lease are approximately $3.0 million.
The
foregoing description of the Lease and the Amendment does not purport to be
complete and is qualified in its entirety by reference to the Lease and the
Amendment, copies of which are filed as exhibits to this report and incorporated
herein by reference. The agreements have been filed in order to provide
investors and the Company’s stockholders with information regarding their terms
and in accordance with applicable rules and regulations of the Securities and
Exchange Commission (“SEC”). Pursuant to the Lease and Amendment, each of the
Company and the Landlord made certain representations, warranties and covenants
and agreed to indemnify each other for certain losses arising out of breaches
of
such representations, warranties, covenants and other specified matters. The
representations, warranties and covenants were made by the parties to and solely
for the benefit of each other and any expressly intended third party
beneficiaries in the context of all of the terms and conditions of the
agreements and in the context of the specific relationship between the parties.
Accordingly, investors and stockholders should not rely on the representations,
warranties and covenants. Furthermore, investors and stockholders should not
rely on the representations, warranties and covenants as characterizations
of
the actual state of facts or continuing intentions of the parties, since they
were only made as of the date of the agreements. Information concerning the
subject matter of such representations, warranties and covenants may change
after the date of the agreements, which subsequent information may or may not
be
fully reflected in the Company’s reports or other filings with the
SEC.
1
Item
9.01. Financial
Statements and Exhibits.
(d) Exhibits
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10.1
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Lease
Agreement for Office Space at Stone Manor Corporate Center and Addendum
to
Office Lease Agreement, dated May 26, 2004, between Stone Manor Corporate
Center, L.P. and Discovery Laboratories,
Inc.
|
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10.2
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First
Amendment to Lease Agreement, dated April 2, 2007, by and between
TR Stone
Manor Corp. and Discovery Laboratories,
Inc.
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Cautionary
Note Regarding Forward-looking Statements:
To
the
extent that statements in this Current Report on Form 8-K are not strictly
historical, including statements as to business strategy, outlook, objectives,
future milestones, plans, intentions, goals, future financial conditions, future
collaboration agreements, the success of the Company’s product development or
otherwise as to future events, such statements are forward-looking, and are
made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements contained in this Current
Report are subject to certain risks and uncertainties that could cause actual
results to differ materially from the statements made. Such risks and others
are
further described in the Company’s filings with the SEC including the most
recent reports on Forms 10-K, 10-Q and 8-K, and any amendments
thereto.
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Discovery
Laboratories, Inc.
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By:
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/s/
Robert J. Capetola
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Robert
J. Capetola, Ph.D.
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President
and Chief Executive Officer
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||
Date:
April 6, 2007
3
Exhibit
10.1
LEASE
AGREEMENT
FOR
OFFICE
SPACE
AT
STONE
MANOR CORPORATE CENTER
EASTON
ROAD
DOYLESTOWN
AND WARRINGTON TOWNSHIPS, PA
TENANT:
DISCOVERY
LABORATORIES, INC.
INDEX
PARAGRAPHPAGE
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SCHEDULE
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1
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1.
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DEFINITIONS.
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2
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2.
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LEASE
GRANT.
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3
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3.
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LEASE
TERM.
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3
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4.
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USE.
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4
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5.
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BASE
RENTAL.
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4
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6.
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OPERATING
EXPENSES.
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4
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7.
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SERVICES
TO BE FURNISHED BY LANDLORD.
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7
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8.
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9
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|
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10.
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9
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11.
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REPAIRS
AND ALTERATIONS BY TENANT.
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10
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12.
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PARKING.
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11
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13.
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LAWS,
REGULATIONS AND RULES.
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11
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14.
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ENTRY
BY LANDLORD; LIMITED ACCESS.
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12
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15.
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ASSIGNMENT
AND SUBLETTING.
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12
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16.
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CONSTRUCTION
LIENS.
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14
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17.
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INSURANCE.
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15
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18.
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WAIVER
OF CLAIMS; WAIVER OF SUBROGATION.
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17
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19.
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INDEMNIFICATION.
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17
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20.
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CASUALTY
DAMAGE.
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18
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21.
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CONDEMNATION.
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18
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22.
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EVENTS
OF DEFAULT/REMEDIES.
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19
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23.
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PEACEFUL
ENJOYMENT.
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21
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24.
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INTENTIONALLY
DELETED.
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21
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25.
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HOLDING
OVER.
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21
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26.
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SUBORDINATION
TO MORTGAGE.
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21
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27.
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ESTOPPEL.
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22
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28.
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LANDLORD'S
LIEN.
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23
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29.
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TELECOMMUNICATIONS.
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23
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30.
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NO
IMPLIED WAIVER.
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24
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31.
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PERSONAL
LIABILITY.
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24
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32.
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SECURITY
DEPOSIT.
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25
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33.
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FORCE
MAJEURE.
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25
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34.
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HAZARDOUS
MATERIAL.
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25
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35.
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MISCELLANEOUS.
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26
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EXHIBIT
A-1
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SITE
PLAN
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EXHIBIT
A-2
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PREMISES
FLOOR PLAN
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EXHIBIT
B
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COMMENCEMENT
DATE AGREEMENT
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EXHIBIT
C
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BUILDING
RULES AND REGULATIONS
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EXHIBIT
D
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WORK
LETTER
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EXHIBIT
E
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BUILDING
SPECIFICATIONS
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OFFICE
LEASE AGREEMENT
THIS
LEASE AGREEMENT
(the
"Lease"),
is
dated for reference purposes as of May 26, 2004, between STONE MANOR CORPORATE
CENTER, L.P., a
Pennsylvania limited partnership ("Landlord"),
and
the Tenant named in Item 1 of the Schedule ("Tenant").
The
following Schedule (the "Schedule")
is an
integral part of this Lease and contains definitions of certain terms used
in
this Lease.
SCHEDULE
1. Name
of
Tenant: Discovery Laboratories, Inc., a Delaware corporation.
2. Office
Space:
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a.
|
Building:
A (as identified on the Site Plan.)
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| b. |
Floor:
1st
and 2nd,
consisting of approximately 39,594 rentable square feet as defined
in
Paragraph
1.7.
|
| c. |
Premises:
Suites 100 and 200.
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3. Rentable
Square Feet in Building: 60,859 square feet.
4. Initial
Base Rental (annual) for first Lease Year: $880,966.50.
5. Initial
Monthly Installments of Base Rental for first Lease Year:
$73,413.88.
6. Proportionate
Shares:
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a.
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Tenant's
Building Proportionate Share: To
be determined based on the final rentable square footage of the Premises
and the Building. See Paragraph
6.1(d)
below.
|
|
b.
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Tenant’s
Site Proportionate Share: To be determined based on the final rentable
square footage of the Premises and all buildings within the Project.
See
Paragraph 6.1(f)
below.
|
7. Security
Deposit: $600,000. See Paragraph
32
below.
8. Tenant's
Real Estate Broker: Julien J. Studley, Inc.
9. Allowance
(see Exhibit D): $40.00 per rentable square foot.
10. Estimated
Commencement Date (subject to Paragraph
3.2):
September 27, 2004.
11. Estimated
Expiration Date (subject to Paragraph
3.2):
December 31, 2009.
12. Tenant's
Address for Notices prior to taking possession of the Premises: 350 South Main
Street, Suite 307, Doylestown, PA 18901.
13. Base
Year: Calendar Year 2005.
14. Electric
and Gas for Premises: to be paid by Tenant. See
Paragraph 7.2.
1
1. DEFINITIONS.
1.1 "Base
Rental"
means
the following amounts for the corresponding periods:
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PERIOD
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BASE
RENTAL (annual)
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MONTHLY
INSTALLMENTS OF BASE RENTAL
|
|
Rent
Commencement Date through the last day of the first Lease
Year
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$880,966.56
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$73,413.88
($
22.25 x 39,594 ¸
12)
|
|
First
day of second Lease Year through the last day of the second Lease
Year
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$900,763.56
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$75,063.63
($22.75
x 39,594 ¸
12)
|
|
First
day of the third Lease Year through the last day of the third Lease
Year
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$920,560.56
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$76,713.38
($23.25
x 39,594 ¸
12)
|
|
First
day of the fourth Lease Year through the last day of the fourth Lease
Year
|
$940,357.56
|
$78,363.13
($23.75
x 39,594 ¸
12)
|
|
First
day of the fifth Lease Year through the last day of the Lease
Term
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$960,154.56
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$80,012.88
($24.25
x 39,594 ¸
12)
|
For
purposes hereof, the term "Lease
Year"
means a
period of 12 consecutive months beginning on the Commencement Date or an
anniversary thereof and ending on (and including) the day immediately preceding
the following anniversary thereof during the Lease Term, except that (a) if
the
Commencement Date is not the first day of a calendar month, then the first
Lease
Year will begin on the Commencement Date and end on (and include) the following
anniversary of the last day of the calendar month in which the Commencement
Date
occurs, and each subsequent Lease Year will mean a period of 12 consecutive
months beginning on an anniversary of the first day of the calendar month
immediately following the calendar month in which the Commencement Date occurs
and ending on (and including) the day immediately preceding the following
anniversary thereof during the Lease Term, and (b) the last Lease Year will
end
on the last day of the Lease Term. The Base Rental due for the first month
during the Lease Term is required to be deposited with Landlord by Tenant at
the
time of execution hereof.
1.2 "Building"
means
the office building within the Project and Identified on the Schedule. The
square footage of the Building, as set forth in the Schedule, was calculated
by
Landlord’s architect using the BOMA methodology.
1.3 "Building
Standard"
means
the type, brand or quality of materials, amount, level of performance, or
standards, as the case may be, as established in this Lease or in the Building
Rules and Regulations, or as designated from time to time by Landlord, to be
the
minimum quality to be used in the Building or the exclusive type, grade or
quality of material to be used in the Building.
1.4 "Building
Common Areas"
means
those areas in the Building and devoted to corridors, elevator foyers,
restrooms, mechanical rooms, elevators, janitorial closets, electrical and
telephone closets, vending areas and other similar facilities provided for
the
common use or benefit of tenants generally and/or the public.
2
1.5 "Exterior
Common Areas"
means
the portion of the Project which are not located within the Building (or other
buildings in the Project) and which are provided and maintained for the common
use and benefit of the users of the Building or other buildings in the Project
generally and the employees, invitees and licensees of Landlord and such
tenants; including, without limitation, all parking areas, driveways, sidewalks
and landscaped areas.
1.6 "Lease
Term"
means
the period beginning on the Commencement Date and ending on the Expiration
Date
(subject to Paragraph
3.2).
1.7 "Premises"
are
outlined on the floor plan attached as Exhibit A-2.
The
Premises are stipulated for all purposes to contain the number of rentable
square feet as set forth in the Schedule. Unless otherwise expressly provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental, is an approximation which Landlord and
Tenant agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less. The square
footage of the Premises, as set forth in the Schedule, was calculated by
Landlord’s architect using the BOMA methodology, and will be confirmed by
Landlord and Tenant and/or their respective architects, within 30 days after
execution hereof.
1.8 “Rent
Commencement Date”
means
the date that is 3 months after the Commencement Date as determined in
accordance with Paragraph
3.2.
1.9 "Project"
means
the lands and buildings known as Stone Manor Corporate Center, located at Easton
Road, Doylestown and Warrington Townships, as further shown on the Site
Plan.
1.10 "Service
Areas"
means
those areas within the outside walls used for elevator mechanical rooms,
building stairs, fire towers, elevator shafts, flues, vents, stacks, pipe shafts
and vertical ducts (but excluding any such areas for the exclusive use of a
particular tenant).
1.11 “Site
Plan” means
the
Site Plan attached hereto as Exhibit
A-1.
1.12 "Work
Letter"
means
the Work Letter attached as Exhibit D.
2. LEASE
GRANT.
Subject
to and upon the terms herein set forth, Landlord leases to Tenant and Tenant
leases from Landlord the Premises.
3. LEASE
TERM.
3.1 This
Lease will continue in force during a period beginning on the Commencement
Date
and continuing until the Expiration Date, unless this Lease is terminated on
an
earlier date or extended to a later date under any other term or provision
of
this Lease.
3.2 Landlord
will have no liability to Tenant for failure to deliver possession of the
Premises to Tenant by the date specified in Item 10 of the Schedule. If
Landlord fails to deliver possession of the Premises by such date for any reason
other than a Tenant Delay (as defined in the Work Letter), the Commencement
Date
will be deferred until Landlord delivers possession of the Premises, and the
Expiration Date will be deferred for an equal amount of time. However, if the
Expiration Date, as so extended, falls on other than the last day of a month,
then the Expiration Date will be further extended to fall on the last day of
such month. If Landlord fails to deliver possession of the Premises by the
date
specified in Item 10 of the Schedule due to a Tenant Delay, then the
Commencement Date and the Expiration Date will not be deferred. If the Work
described in the Work Letter is substantially completed (or would have been
substantially completed but for a Tenant Delay) prior to the scheduled
Commencement Date set forth in Item 10 of the Schedule, then the
Commencement Date will be the date on which such Work is substantially completed
in accordance with the Work Letter (or would have been substantially completed
but for a Tenant Delay), and the Expiration Date will occur on the date set
forth in the Schedule. However, if the Expiration Date falls on other than
the
last day of a month, then the Expiration Date will be further extended to fall
on the last day of such month. Landlord and Tenant agree, upon demand by the
other, to execute and deliver a Commencement Date Agreement in the form of
Exhibit B
attached. If Landlord makes such demand upon Tenant but Tenant fails to respond
within 15 days, then Tenant will irrevocably be deemed to have agreed with
Landlord as to the information set forth in the Commencement Date Agreement
so
delivered by Landlord to Tenant.
3
3.3 Notwithstanding
anything to the contrary set forth in this Lease, in the event that Tenant
fails
to execute this Lease by May 25, 2004, or after executing this Lease fails
to
deliver plans as required by Paragraph 16 of the Lease Addendum attached hereto,
then the Estimated Commencement Date set forth in Item 10 of the Schedule and
the Estimated Expiration Date set forth in Item 11 of the Schedule will each
be
extended by one day for each day until Tenant delivers plans as required by
Paragraph 16 of the Lease Addendum attached hereto.
4. USE.
4.1 Tenant
will use and occupy the Premises for the following use and for no other use
or
purpose: General office use, analytical laboratory space, sample storage and
ancillary uses thereto as permitted under the Warrington Township Zoning
Ordinance.
4.2 Notwithstanding
the provisions of Paragraph 4.1,
Tenant
agrees not to use or permit the use of the Premises for any purpose which is
illegal, or which, in Landlord's sole opinion, creates a nuisance or which
would
increase the cost of insurance coverage with respect to the Project. Landlord
reserves the right to grant to anyone the exclusive right to conduct any
business or render any service in the Project; such exclusive right will not
operate to exclude Tenant from using the Premises for the use set forth
Paragraph 4.1 above.
5. BASE
RENTAL.
Tenant
will pay to Landlord during the Lease Term without any setoff or deduction
whatsoever, the Base Rental and all such other money that becomes due hereunder
as additional rent, all of which are sometimes herein collectively called
"rent".
The
annual Base Rental then in effect for each calendar year or portion thereof
will
be due and payable in 12 equal installments on the first day of each calendar
month during the Lease Term. Tenant agrees to pay all such sums in advance,
and
without demand. Tenant will pay all rent due to Landlord at Landlord's address
in accordance with Paragraph 35.13.
If the
Rent Commencement Date commences on a day other than the first day of a month,
or terminates on a day other than the last day of a month, then the installments
of Base Rental and any adjustments thereto for such month or months will be
prorated, based on the number of days in such month. Tenant will pay all sales
taxes, governmental surcharges and the like levied or assessed against all
rent
payments due under this Lease simultaneously with each rent payment
required.
6. OPERATING
EXPENSES.
6.1
For
the
purposes of this paragraph, the following definitions apply:
(a)
"Base
Year"
is
defined in the Schedule on page 1 of this Lease.
(b) “Operating
Expenses”
is
defined to include the Building Operating Expenses and the Site Operating
Expenses.
(c) "Building
Operating Expenses"
means
all direct and indirect costs and expenses in each calendar year of operating,
maintaining, repairing insuring, managing and owning the Building, including,
without limitation, sums incurred for the following items: (i) real estate
taxes
and assessments of the Building, (ii) premiums incurred by Landlord to maintain
the fire and casualty insurance coverage required to be carried by Landlord
under Paragraph 17.2 of this Lease, (iii) all repairs and utilities to the
Building not required to be paid by tenants; (iv) utility services (except
to
the extent, if any, that the cost thereof is separately metered and/or billed
to
Tenant or other tenants by Landlord pursuant to Paragraph
7
below)
and systems, HVAC, plumbing electrical, fire detection and suppression,
elevators and other Building services and systems, roof, windows, flooring
and
doors; janitorial; management fees; and (v) capital improvements which are
(a)
primarily for the purpose of reducing the Building Operating Expenses, or (b)
required by governmental authorities. Building Operating Expenses will not
include the cost of depreciation, interest, real estate lease commissions and
principal payments on mortgage and other non-operating debts of Landlord.
However, any capital expenditures shall be amortized on a straight line basis
(with the period of the amortization to be reasonably determined by Landlord’s
accountant based on the useful life of the capital expenditure), but not more
than ten years and at an interest rate of one percent over the prime interest
rate of Landlord’s lender, with the annual amortized cost included in the
Building Common Expenses for each calendar year.
4
(d) "Tenant's
Building Proportionate
Share"
is the
percentage determined by dividing the total rentable square footage of the
Premises by the total rentable square footage of the Building. Tenant’s Building
Proportionate Share as of the date hereof is 65.06%.
(e)
“Site
Operating Expenses”
means
all direct and indirect costs and expenses in each calendar year of operating,
maintaining, insuring, managing and owning all of the Exterior Common Areas,
including, without limitation, sums incurred for the following items: (i) real
estate taxes and assessments of the Exterior Common Areas, (ii) landscaping
and
grass cutting; snow and ice; cleaning; removal of trash and other debris from
the grounds; lighting; preventative maintenance; repairs; painting; parking
lots; driveways; access roads; personnel to maintain the Exterior Common Areas;
management fees; utilities; (iii) premiums incurred by Landlord to maintain
a
commercial liability insurance policy on the Exterior Common Areas on such
terms
(including amounts of coverage) as are customary and reasonable under the
circumstances; and (iv) capital improvements which are (a) primarily for the
purpose of reducing the Site Operating Expenses, or (b) required by governmental
authorities, or (c) related to the parking lots, driveways, access roads,
sidewalks, curbs, utility lines and/or walking trails. However, any capital
expenditures shall be amortized on a straight line basis (with the period of
the
amortization to be reasonably determined by Landlord’s accountant based on the
useful life of the capital expenditure), but not more than ten years and at
an
interest rate of one percent over the prime interest rate of Landlord’s lender,
with the annual amortized cost included in the Site Common Expenses for each
calendar year.
(f) “Tenant’s
Site Proportionate Share”
is
the
percentage determined by dividing the total rentable square footage of the
Premises by the total rentable square footage of all the buildings in the
Project. Tenant’s Site Proportionate Share shall be adjusted from time to time,
during the term of this Lease, as and when additional buildings in the Project
are constructed.
(g) "Expense
Statement"
means a
statement from the Landlord setting forth the Operating Expenses.
6.2 Tenant
will, during the Lease Term, pay in addition to Base Rental hereunder an amount
equal to (a) Tenant's Building Proportionate Share of the excess from time
to
time of actual Building Operating Expenses incurred by Landlord for any calendar
year over the Building Operating Expenses incurred for the Base Year, and (b)
Tenant’s Site Proportionate Share of the excess from time to time of actual Site
Operating Expense incurred by Landlord for any calendar year over the Site
Operating Expenses incurred for the Base Year (the excess amounts referenced
in
this Paragraph
6.2
are
collectively referred to as the “Excess
Operating Expenses”).
6.3 For
each
calendar year after the Base Year, Landlord will furnish Tenant with an Expense
Statement showing in reasonable detail the Operating Expenses incurred by
Landlord for the calendar year. As part of the Expense Statement, Landlord
may
include an amount representing Tenant's share of the estimated Excess Operating
Expenses to be incurred for the then current calendar year. Landlord
will use reasonable efforts to deliver the annual Expense Statement within
120
days after the end of the applicable calendar year. Reasonable delays by
Landlord in submitting such Expense Statements or mistakes by Landlord in such
statements will not prejudice Landlord's right to collect any rent due under
this Lease.
5
6.4 Upon
receipt of the estimate showing Tenant's share of Excess Operating Expenses
for
the current calendar year, the amount thereof will be divided into 12 equal
monthly installments, and Tenant will pay Landlord, at the same time that the
next regular monthly rental payment is due, the number of installments necessary
to bring the Tenant current for the calendar year. Credit will be given for
any
payment of estimated increases already paid for those months. Subsequent
installments will be payable together with the regular rent payments for the
balance of the calendar year and will continue until payments begin under the
following calendar year's Expense Statement.
6.5 If
Tenant's share of Excess Operating Expenses for a prior calendar year as shown
on the Expense Statement is greater than the estimated payments made by Tenant
for that year, then within 30 days following receipt by Tenant of the Expense
Statement, Tenant will pay in full an amount equal to such excess. If Tenant's
share of Excess Operating Expenses is less than the estimated payments made
by
Tenant for that year, then the amount of such overpayment will be credited
against the next Operating Expense payments falling due,
except
that if this Lease expires before such credit is fully applied, Landlord will
refund the unapplied balance to Tenant in cash. The obligations of Landlord
and
Tenant under this Paragraph 6.5 will survive expiration or termination of this
Lease.
6.6 If
this
Lease terminates before the end of a calendar year, payment will be based on
the
percentage of the year in which Tenant leased the Premises.
6.7 Tenant
shall have the right, exercised by written notice received by Landlord within
30
days after Tenant's receipt of the annual Expense Statement, to audit or cause
to be audited, by an auditor selected by Tenant and reasonably satisfactory
to
Landlord, Landlord's books and records in respect of Operating Expenses for
the
fiscal year or portion thereof falling within the Lease Term. Such auditor
must
be an independent reputable accounting firm that is not being compensated on
a
contingency fee basis for the audit. Unless Tenant takes written exception
of
any item in any such statement within such 30-day period, such statement will
be
considered as final and accepted by Tenant. The audit must be performed during
normal business hours and must be completed within 120 days after Tenant's
receipt of such annual Expense Statement. The cost of such audit will be borne
solely by Tenant. As
a
condition precedent to Tenant's right to dispute the Operating Expenses billed
by Landlord pursuant to this Paragraph 6, Tenant must pay the total amount
billed by Landlord hereunder within the time stipulated in this Lease.
Landlord
will refund the amount, if any, due Tenant upon completion of the audit. In
connection with any such audit, the following confidentiality provisions will
apply:
(a) All
of
the information obtained through Tenant's audit with respect to financial
matters (including, without limitation, costs, expenses, income) and any other
matters pertaining to the Landlord or the Project as well as any compromise,
settlement, or adjustment reached between Landlord and Tenant relative to the
results of the audit will be held in strict confidence by the Tenant and its
officers, agents, and employees; and Tenant will cause its auditor and any
of
its officers, agents, and employees to be similarly bound pursuant to
clause
(b)
below.
(b) As
a
condition precedent to Tenant's exercise of its right to audit, Tenant must
deliver to Landlord a signed confidentiality covenant from the auditor in the
form and substance satisfactory to Landlord.
(c) Tenant
understands and agrees that this provision is of material importance to the
Landlord and that any violation of the terms of this provision will result
in
immediate and irreparable harm to Landlord. Landlord will have all rights
allowed by law or equity if Tenant, its officers, agents, or employees or the
auditor violate the confidentiality provisions of this Paragraph 6.7,
including, without limitation, the right to terminate Tenant's right to audit
in
the future pursuant to this Paragraph 6.7.
Tenant
will indemnify, defend upon request, and hold Landlord harmless from and against
all costs, damages, claims, liabilities, expenses, losses, court costs, and
attorneys’ fees suffered by or claimed against Landlord, based in whole or in
part upon the breach of this Paragraph 6.7
by
Tenant or its auditor; and will cause its auditor to be similarly bound under
a
signed confidentiality covenant from the auditor in the form and substance
satisfactory to Landlord.
6
(d)
The
obligations within the preceding clauses (a) through (c) of this
Paragraph 6.7 will survive the expiration or earlier termination of this
Lease.
6.8 Notwithstanding
any language in the Lease seemingly to the contrary, if the Building or the
Project is less than fully occupied during any calendar year of the Lease Term,
actual "Operating
Expenses"
for the
purposes referenced above shall be determined as if the Building or the Project
had been fully occupied during such year. If Landlord is not required to provide
certain services to a tenant, then the costs of such services will be
apportioned among the tenants provided with such services, and Tenant's share
for such services will be recomputed to equal the ratio that Tenant's Premises
bears to the total demised premises of tenants provided with such services.
For
the purposes of this Lease, "fully occupied" means occupancy of 95% of the
rentable area in the Building or the Project, as applicable.
6.9 Should
the Commonwealth of Pennsylvania, or any political subdivision thereof, or
any
other governmental authority having jurisdiction over the Building and/or lands
comprising the Exterior Common Areas (a) impose a tax, assessment, charge,
or
fee which Landlord shall be required to pay, wholly or partially, in
substitution for real estate taxes, or (b) impose an income or franchise tax
or
a tax on rents, wholly or partially, in substitution for or as a supplement
to a
tax levied against the Building and/or lands comprising the Exterior Common
Areas and/or the personal property used in connection therewith; then all such
taxes, assessments, fees or charges shall be deemed to constitute real estate
taxes included within the definition of Operating Expenses
hereunder.
7. SERVICES
TO BE FURNISHED BY LANDLORD.
7.1 Landlord
agrees to furnish Tenant the following defined basic services:
(a) Hot
and
cold water at those points of supply provided for general use of tenants in
the
Building.
(b) Central
heat and air conditioning at such temperatures and in such amounts as are
considered by Landlord to be standard or as required by governmental authority;
provided, however, heating and air conditioning service at times other than
for
Normal Building Hours for the Building (as established by the Building Rules
and
Regulations, as described in Paragraph 13.2)
shall
be furnished only upon the written request of Tenant delivered to Landlord
in
accordance with the Building Rules and Regulations. Tenant will pay to Landlord
its regular charges for such additional heating or air
conditioning.
If
Tenant
installs equipment which in Landlord’s opinion produces enough heat to cause
comfort problems in the Building or any part thereof, or if Tenant desires
a
supplemental air conditioning system and Landlord has approved same, then
Landlord may, at its option, either cause to be designed or permit Tenant to
design a supplemental air conditioning system, subject to Landlord’s approval,
and Landlord will install such system at Tenant’s expense substantially in
accordance with such design. If Tenant has requested such supplemental system,
Tenant will be responsible for determining that the design of such system is
adequate for its needs. Tenant agrees to pay Landlord for such equipment,
design, installation, metering and consumption of electricity and, if
applicable, chilled water for supplemental air conditioning. During the Lease
Term, Tenant will, at Tenant’s sole cost, repair and maintain such supplemental
air conditioning system and keep the same in good condition. If such
supplemental air conditioning is installed at the request of either Tenant
or
Landlord in a manner that utilizes the Building condenser water loop, Tenant
will pay a one-time tap fee, payable within 30 days of invoicing from Landlord,
at Landlord’s then established rate for such. Tenant will also pay for the
necessary pump and piping to connect the supplemental air conditioning equipment
to the Building condenser water risers. All systems and equipment installed,
as
provided herein above, will become part and parcel with the Building and forever
remain Landlord’s property; provided
that, at Landlord’s request given at the time Landlord approved the installation
of such systems and equipment, Tenant will remove such systems and/or equipment
prior to the expiration or termination of this Lease and repair any damage
caused by such systems and equipment and its removal.
7
(c) Maintenance,
repair and replacement for all Common Areas and Service Areas of the Building,
including the systems, facilities and equipment necessary for the proper
operation of the Project and for provision of Landlord’s other services set
forth in this Paragraph, in the manner and to the extent found in comparable
Class A office buildings in the Suburban Philadelphia area. Accordingly,
Landlord will be responsible for and will maintain and repair the foundations,
structure and roof of the Building and repair damage to the Building which
Landlord insures against.
(d) Nightly
janitorial service, Monday through Friday, exclusive of normal business
holidays; provided, however, if Tenant's floor covering or other improvements
require special treatment, Tenant will pay the additional cleaning cost
attributable thereto as additional rent upon presentation of a statement
therefor by Landlord.
(e) All
Building Standard fluorescent bulb replacement in the Premises and fluorescent
and incandescent bulb replacement in the Common Areas and Service
Areas.
7.2 Electricity
and gas will be distributed to the Premises either by the utility companies
serving the Building or, at Landlord's option, by Landlord; and Tenant will
permit Landlord's wire and conduits, to the extent available, suitable and
safely capable, to be used for such distribution. If and so long as Landlord
is
distributing electricity and/or gas to the Premises, Tenant will pay all of
Landlord's charges for such electricity and gas, which charges will be based,
at
Landlord's option, on (i) meter readings, or (ii) on a survey of Tenant's
electrical usage and gas usage made by Landlord, or (iii) on Tenant's prorata
share of all space, including the Premises, which is commonly metered within
the
Building. Tenant's use of electrical services or gas furnished by Landlord
must
not exceed, either in voltage, rated capacity, or overall load or usage, that
which Landlord deems to be Building Standard.
Notwithstanding
the foregoing, Landlord shall have the right, at Landlord’s cost to install a
separate meter or meters to measure the gas and/or electricity used by Tenant
in
the Premises. In the alternative to Landlord installing a separate meter for
Tenant, Landlord may install one meter for the floor of the Building upon which
Tenant is located or one meter for the entire Building and pro-rate Tenant’s gas
and electric charges based upon the square footage of space occupied by the
users of such gas and/or electric service.
Presently
PECO (“Electric
Service Provider”)
is the
utility company selected by Landlord to provide electricity service for the
Project. Notwithstanding the foregoing, if permitted by law, Landlord will
have
the right at any time and from time to time during the Lease Term to either
contract for service from a different company or companies providing electricity
service (each such company hereinafter being referred to as an (“Alternate
Service Provider”)
or
continue to contract service from the Electric Service Provider. Tenant will
cooperate with Landlord, the Electric Service Provider and any Alternate Service
Provider at all times and, as reasonably necessary, will allow Landlord,
Electric Service Provider, and any Alternate Service Provider reasonable access
to the Building’s electric lines, feeders, risers, wiring, and any other
machinery within the Premises. Landlord will not be liable or responsible for
any loss, damage, or expense that Tenant sustains or incurs by reason of any
failure, interference, disruption, or defect in the supply or character of
the
electric energy furnished to the Premises, or if the supply or character of
the
electrical energy supplied by the Electric Service Provider or any Alternate
Service Provider is no longer available or suitable for Tenant’s requirements,
and no such change, failure, defect, unavailability, or unsuitability will
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of
its
obligations under the Lease.
7.3 The
failure by Landlord to any extent to furnish, or the interruption or termination
of, the defined services in whole or in part, will not render Landlord liable
in
any respect nor be construed as an eviction (constructive or otherwise) of
Tenant, nor work an offset or abatement of rent, nor relieve Tenant from the
obligation to fulfill any covenant or agreement of this Lease.
8
7.4 If
any of
the equipment or machinery used in the provision of defined services, for any
cause, ceases to function properly, Tenant will have no claim for offset or
abatement of rent or damages on account of an interruption in service occasioned
thereby or resulting therefrom.
7.5 Except
as
otherwise expressly provided herein, Landlord will not be required to perform
any maintenance on or make any repairs to the Premises.
8. CONDITION
OF PREMISES.
8.1 Except
as
otherwise expressly provided in this Paragraph or in the Work Letter, all
installations and improvements now or hereafter placed on the Premises will
be
for Tenant's account and at Tenant's cost (and Tenant will pay ad valorem taxes
and increased insurance thereon or attributable thereto), which cost will be
payable by Tenant to Landlord as additional rent in accordance with provisions
of the Work Letter. Except to the extent expressly indicated in the Work Letter,
Landlord is leasing the Premises to Tenant "as is," without any representations
or warranties of any kind (including, without limitation, any express or implied
warranties of merchantability, fitness or habitability). If so indicated in
the
Work Letter, Landlord will cause the Premises to be completed in accordance
with
the plans, specifications, and agreements and on the terms, conditions and
provisions as provided in the Work Letter. Taking possession of the Premises
by
Tenant will be conclusive evidence as against Tenant that the Premises were
in
good and satisfactory condition when possession was so taken, except as
otherwise expressly provided in the Work Letter.
8.2 Landlord,
at Landlord’s cost, shall complete the site improvements set forth on the Site
Pan and which are required for Tenant’s use and occupancy of the Premises.
Tenant acknowledges and understands that Landlord reserves the right to change,
so long as such changes do not have a material and adverse impact on Tenant’s
business operations, (a) the size, design, use or location of any of the
buildings or other improvements proposed by Landlord to be built on the Property
as part of the Project, and (b) any of the Exterior Common Areas.
8.3 Landlord,
at Landlord’s cost, shall construct the Building in accordance with the
specifications attached hereto as Exhibit
E.
Tenant
acknowledges and understands that Landlord reserves the right to change, so
long
as such changes to not have a material and adverse impact on Tenant’s proposed
use of the Premises, the specifications attached hereto as Exhibit
E.
8.4 The
completion of the work required to prepare the Premises for Tenant’s occupancy
shall be governed by the Work Letter attached hereto as Exhibit
D.
9. GRAPHICS.
Landlord
will provide and install all signage at each entrance door to the Premises
and
on the Building directory. All such signage will be in the standard graphics
for
the Building and no others may be used or permitted on the Premises or on the
directory without Landlord's prior written consent. Such door signage will be at
Tenant’s cost, but Tenant may apply the Allowance (defined in the Work Letter)
toward the cost of initial signage at each entrance door to the Premises. Tenant
will be entitled to two lines on the directory located in the lobby of the
Building, without charge. In addition, Landlord shall, subject to Landlord’s
receipt of all applicable approvals, provide and install identification numbers
on the Building, directional signs identifying the Building along Kelly Road,
and monument signs at the front and rear main entrances of the Building
identifying Tenant and all other tenants of the Building. Landlord shall use
reasonable efforts to obtain all applicable approvals for such signage. All
such
signage will be in the standard graphics for the Building and no others may
be
used or permitted without Landlord's prior written consent.
10. CARE
OF THE PREMISES BY TENANT.
Tenant
will not commit or allow any waste to be committed on any portion of the
Premises, and at the termination of this Lease, Tenant will deliver the Premises
to Landlord in as good condition as at the Commencement Date, ordinary wear
and
use excepted.
9
11. REPAIRS
AND ALTERATIONS BY TENANT.
11.1 Tenant
will, at Tenant's own cost and expense, repair any damage done to the Project,
or any part thereof, including replacement of damaged portions or items, caused
by Tenant or Tenant's agents, employees, invitees, or visitors, and Tenant
covenants and agrees to make all such repairs as may be required to restore
the
Project to as good a condition as it was in prior to such damage. All such
work
or repairs by Tenant must be effected in compliance with all applicable laws;
provided, however, if Tenant fails to make such repairs or replacements
promptly, Landlord may, at its option, make repairs or replacements, and Tenant
will pay the cost thereof to the Landlord within 10 days of Landlord's demand
therefor, as additional rent. The
provisions of this Paragraph
11.1
will
survive expiration or termination of this Lease.
11.2 Tenant
agrees not to install or allow to be installed any vending machines on the
Premises, and will not place or allow to be placed any signs on the Premises
which are visible from outside the Premises, without first obtaining the prior
written consent of Landlord in each such instance, which consent may be given
on
such conditions as Landlord may elect.
11.3 Any
alterations, additions or improvements made by or on behalf of Tenant to the
Premises (“Tenant-Made
Alterations”)
will
be subject to Landlord’s prior written consent, which consent may be given on
such conditions as Landlord may elect. Tenant will cause, at its expense, any
Tenant-Made Alterations to comply with applicable insurance requirements and
with all applicable laws, codes and governmental regulations, and will construct
at its expense any alteration or modification required by applicable laws,
codes
or governmental regulations as a result of any Tenant-Made Alterations. All
Tenant Made-Alterations must be constructed in a good and workmanlike manner
by
contractors reasonably acceptable to Landlord and only good grades of materials
may be used. All plans and specifications for any Tenant-Made Alterations must
be submitted to Landlord for its approval. Landlord may monitor construction
of
the Tenant-Made Alterations. Tenant will pay Landlord’s standard charges for
review of Tenant’s plans, permits, lien waivers, certificates and the like and
for monitoring construction. Landlord’s right to review plans and specifications
and to monitor construction will be solely for its own benefit, and Landlord
will have no duty to see that such plans and specifications or construction
comply with applicable laws, codes, rules and regulations. Tenant will provide
Landlord with the identities and mailing address of all persons performing
work
or supplying materials, prior to beginning such construction, and Landlord
may
post on and about the Premises notices of nonresponsibility pursuant to
applicable law. Tenant will furnish security or make other arrangements
satisfactory to Landlord to assure payment for the completion of all work free
and clear of liens and will provide certificates of insurance for worker’s
compensation and other coverage in amounts and from an insurance company
satisfactory to Landlord protecting Landlord against liability for personal
injury and property damage during construction. Landlord may elect to require
Tenant to insure any such Tenant-Made Alterations in accordance with
Paragraph 17.1(a).
In
connection with any Tenant-Made Alterations, Tenant’s contractor must (and its
contract must so provide):
(a) conduct
its work in such a manner so as not to unreasonably interfere with other
tenants, Project operations, or any other construction occurring on or in the
Project or in the Premises;
(b) execute
a
set of and comply with the Building’s then-current Tenant Contractor Rules and
Regulations and comply with all additional rules and regulations relating to
construction activities in or on the Project as may be promulgated from time
to
time and uniformly enforced by Landlord or its agents;
(c) deliver
to Landlord detailed "as built" plans immediately after the alterations or
improvements are complete, if requested by Landlord; and
(d) be
responsible for reaching an agreement with Landlord and its agents as to the
terms and conditions for all contractor items relating to the conducting of
its
work including, but not limited to, those matters relating to hoisting, systems
interfacing, use of temporary utilities, storage of materials and access to
the
Premises.
10
Landlord
will have the right to approve Tenant’s contractor and all subcontractors to be
used by Tenant's contractor, which approval will not be unreasonably withheld.
Upon completion of any Tenant-Made Alterations, Tenant will deliver to Landlord
sworn statements setting forth the names of all contractors, subcontractors
and
material suppliers who did work on or supplied materials for the Tenant-Made
Alterations, and final lien waivers from all such contractors, subcontractors
and material suppliers. Tenant will have no right to make any repairs,
alterations or improvements to, within or on any of the Common Areas without
Landlord’s prior written consent, which may be withheld in Landlord’s sole and
absolute discretion.
11.4 Any
and
all alterations or improvements to the Premises will become the property of
Landlord upon termination of this Lease (except for movable equipment, trade
fixtures or furniture owned by Tenant). Landlord may, at the time Landlord
approves the installation of any such fixtures, equipment, alterations or
improvements, nonetheless, require Tenant to remove any and all fixtures,
equipment and other alterations or improvements installed on the Premises and
restore the Premises to Building Standard. If Landlord so requires at the time
Landlord approves the installation of any such fixtures, equipment, alterations
or improvements and Tenant fails to remove such improvements upon termination
of
this Lease, Landlord may remove such improvements at Tenant's cost, and Tenant
will pay Landlord on demand the cost of restoring the Premises to Building
Standard. The
provisions of this Paragraph 11.4
will
survive expiration or termination of this Lease. See
Paragraph 29
for
additional provisions regarding telecommunication lines and
equipment.
12. PARKING.
12.1 During
the Lease Term, Tenant will have the non-exclusive use in common with Landlord,
other tenants of the Building, other occupants in the Project, their guests
and
invitees, of the non-reserved common automobile parking areas, driveways, and
footways, subject to rules and regulations for the use thereof as prescribed
from time to time by Landlord.
12.2 Tenant's
use of the Building's parking areas (including, without limitation, unassigned
parking and any assigned parking now or hereafter granted to Tenant from time
to
time) may not exceed 4.3 parking spaces per 1,000 rentable square feet in the
Premises. No specific designated parking spaces will be assigned to Tenant
unless otherwise agreed by Landlord and Tenant in writing. Landlord will have
the right to reserve parking spaces as it elects and condition use thereof
on
such terms as it elects.
12.3 All
such
parking shall be subject to rules and regulations for the use thereof as
prescribed from time to time by Landlord. Landlord will not be responsible
for
money, jewelry, automobiles or other personal property lost in or stolen from
the Building's parking areas, or for vandalism to automobiles occurring in
the
Building's parking areas, it being agreed that, to the fullest extent permitted
by law, the use of the Building's parking areas will be at the sole risk of
Tenant and its employees. Landlord will have the right to temporarily close
the
Building's parking areas to perform necessary repairs, maintenance and
improvements to the parking areas.
13. LAWS,
REGULATIONS AND RULES.
13.1 Tenant
will comply with all governmental laws, ordinances, rules and regulations
applicable to Tenant's use of the Premises.
13.2 A
copy of
the initial Building Rules and Regulations is attached hereto as Exhibit C.
Tenant
will comply with such initial Building Rules and Regulations and with all
reasonable additional Building Rules and Regulations and reasonable amendments
to the Building Rules and Regulations adopted by Landlord from time to time,
and
will cause all of its agents, employees, invitees and visitors to do so. All
changes to such rules will be furnished by Landlord to Tenant in writing.
13.3 Landlord
will not be responsible to Tenant for the nonperformance of any such Building
Rules and Regulations by any other tenant or occupant of the
Building.
11
14. ENTRY
BY LANDLORD; LIMITED ACCESS.
14.1 Tenant
will permit Landlord, upon at least twenty-four (24) hours prior notice, or
its
agents or representatives to enter into and upon any part of the Premises at
all
reasonable hours (and in emergencies at all times) to inspect the condition,
occupancy or use; to show the Premises to prospective purchasers, mortgagees,
or
insurers or (during the last 9 months of the Lease Term) tenants, or to clean
or
make repairs, alterations or additions. Tenant will not be entitled to any
abatement or reduction of rent by reason of this right of entry.
14.2 Building
entry at times other than for Normal Building Hours (as established by the
Building Rules and Regulations, as described in Paragraph
13.2)
may be
limited to a single entrance. In addition, Landlord reserves the right to close
the Building outside of Normal Building Hours (as established by the Building
Rules and Regulations, as described in Paragraph
13.2)
subject, however, to Tenant's right to admittance under such regulations as
Landlord may prescribe from time to time. Notwithstanding the foregoing,
Landlord is not and will not be obligated to provide a security guard or any
other security services for the Project. Under no circumstances will Landlord
or
its managing agent or their respective agents or employees be liable for, and
Tenant waives all claims with respect to, (a) any damages, injuries or
losses sustained by Tenant or any occupant of the Premises or their respective
agents, employees, licensees or invitees, including any property or
consequential damages, resulting from Landlord's failure to provide security
or
adequate security for the Project, or (b) losses due to theft or burglary,
or (c) the damages done by unauthorized persons on the Premises and neither
will Landlord be required to insure against any such losses. Tenant will
cooperate fully in Landlord's efforts to maintain security in the Project and
will follow all rules and regulations promulgated by Landlord with respect
thereto.
14.3 Subject
to the terms and conditions of this Lease and the Rules and Regulations, Tenant
shall have access to the Building and the Premises at all times, twenty-four
(24) hours per day, seven (7) days per week, three hundred sixty five (365)
days
per year. Landlord shall provide Tenant with a sufficient number of keys, access
cards or other devices as required to allow Tenant and Tenant’s employees access
as provided for herein.
15. ASSIGNMENT
AND SUBLETTING.
15.1 Tenant
will not assign this Lease, or any interest therein, and will not sublet the
Premises, or any part thereof, or any right or privilege appurtenant thereto,
or
suffer any other person to occupy or use the Premises, or any portion thereof,
without first requesting the consent of Landlord, in writing, not more than
120
but not less than 60 days before the effective date of such assignment or
sublease, and obtaining such consent in writing. Any request by Tenant for
Landlord's consent to a sublease or assignment must be accompanied by a copy
of
the proposed terms of sublease or assignment agreement and reasonably detailed
information and documentation, including current financial statements, regarding
the proposed sublessee or assignee. Landlord agrees not to unreasonably withhold
consent to any such assignment of this Lease or subletting of the Premises
(except for any extension or expansion options or any rights of first refusal
or
first offer for which consent may be arbitrarily withheld), provided Tenant
requests the same in writing and provided (i) at the time thereof Tenant is
not
in default under this Lease, (ii) Landlord, in its sole discretion reasonably
exercised, determines that the proposed use of the Premises, and the reputation,
business, and financial responsibility of the proposed assignee or sublessee,
are satisfactory to Landlord, (iii) any assignee or sublessee expressly assumes
all the obliga-tions of this Lease on Tenant's part to be per-formed, (iv)
such
consent, if given, will not release Tenant of any of its obliga-tions under
this
Lease, including with-out limitation, its obligation to pay rent, (v) a consent
to one assignment or subletting will not be deemed to be a consent to any
subsequent assignment or subletting, (vi) if Landlord has comparable space
available in the Building or any other building in the Project, the proposed
assignee or sublessee is not a tenant in the Building or the Project, or the
subtenant or assignee of any such tenant, (vii) the proposed assignee or
sublessee is not a person or entity with whom Landlord or its agent is then
negotiating or to or from whom Landlord or its agent has given or received
any
written or oral proposal within the past 6 months regarding a lease of space
in
the Building or the Project, (viii) the rental rate being charged to the
sublessee or assignee is not less than that being offered by Landlord for
comparable space in the Building, and (ix) the proposed sublessee or assignee
is
not a government entity.
12
No
permitted subtenant may assign or encumber its sublease or further sublease
all
or any portion of its subleased space, or otherwise permit the subleased space
or any part of its subleased space to be used or occupied by others, without
Landlord's prior written consent in each instance. Tenant may not mortgage,
pledge or hypothecate its leasehold interest, and any attempted assignment,
sublease or other transfer or encumbrance by Tenant in violation of the terms
and covenants of this Paragraph 15
will be
void.
Neither
this Lease nor any interest therein will be assignable as to the interest of
Tenant by operation of law without consent of Landlord, which consent may be
withheld in Landlord’s reasonable discretion. Tenant agrees that if Landlord
withholds its consent to any assignment, subletting, or occupancy contrary
to
the provisions of this Paragraph, Tenant's sole remedy will be to seek an
injunction in equity to compel performance by Landlord to give its consent
and
Tenant expressly waives any right to damages for any such withholding by
Landlord of its consent.
For
purposes of this Paragraph 15,
any
transfer of the ownership interests controlling Tenant will be deemed an
assignment of this Lease unless such ownership interests are publicly traded.
However, on the condition that Tenant is not in default of any term, covenant
or
condition of this Lease, Tenant will have the right, with advance written notice
to but without the consent of Landlord, to sublease the Premises, or a portion
thereof, to any corporation or entity which controls, is controlled by or is
under common control with Tenant, or any subsidiary of Tenant, on the condition
that (y) such sublease is for a good business purpose and not principally for
the purpose of avoiding Landlord's consent rights, and (z) the proposed use
of
the Premises and the reputation, business, and financial responsibility of
the
proposed sublessee are consistent with the first-class nature of the Building.
The term "control" as used in this Paragraph means a direct or indirect
ownership interest with the power to directly or indirectly direct or cause
the
direction of the management or policies of the Tenant.
In
connection with each request by Tenant for Landlord's consent to a sublease
or
assignment, Tenant will pay to Landlord the following, regardless of whether
such consent is granted or denied: an amount equal to Landlord's out-of-pocket
administrative, legal and other costs and expenses incurred in processing such
request or otherwise incurred in connection with such sublease or assignment,
said amount not to exceed $1,500.
If
all or
any part of the Premises are then subleased, any termination of this Lease
or of
Tenant's right to possession in connection with an Event of Default will, at
Landlord's option, either, (a) terminate the sublease or (b) operate as an
assignment to Landlord of the sublease. Landlord shall not be liable for any
prepaid rents nor any security deposits paid by the subtenant. Landlord will
not
be liable for any other defaults of the Tenant under the sublease
agreement.
15.2 Tenant's
request for Landlord's consent to the subletting or assignment as described
above will be deemed to be an offer by Tenant to sublet the space described
in
Tenant’s notice for the term set forth in Tenant’s notice and upon all the other
terms, covenants and conditions as are contained in this Lease or to assign
this
Lease to Landlord at Landlord's option. If Landlord does not accept such deemed
offer in writing within 20 days after the effective date of Tenant's notice,
then Landlord's right to sublease the Premises or acquire this Lease by
assignment will be deemed to be waived. Alternatively, at Landlord's option,
Landlord may, by giving written notice to Tenant within 20 days after the
effective date of Tenant's notice, terminate this Lease with respect to the
space described in Tenant's notice, as of the date specified in Tenant's notice
for the commencement of the proposed assignment. Landlord’s failure to respond
to Tenant within such 20 day period shall be deemed as Landlord’s refusal of
such proposed subletting or assignment, and nothing in this Paragraph 15.2
will be
deemed to be a consent by Landlord to any subletting or assignment unless
Landlord delivers to Tenant its written consent. Notwithstanding Landlord's
consent on any one occasion, the right to recapture set forth in this
Paragraph 15.2
will
apply to any further assignment.
15.3 If
Landlord consents to any sublease or assignment of the Premises, or any part
thereof, Tenant will in consideration therefor pay to Landlord, as additional
rent, 50% of the Excess Rent (defined below) after deducting from Excess Rent
the reasonable and customary out-of-pocket transaction costs incurred by Tenant
in connection with such subletting or assignment, including reasonable
attorneys' fees, brokerage commissions, and alteration costs (which transaction
costs will be amortized on a straight-line basis over the term of the sublease
or assignment, as the case may be). For purposes of this Paragraph, "Excess
Rent"
means
all rents, additional charges, and other consideration payable to Tenant by
the
subtenant or assignee for or by reason of such sublease or assignment and which
are, in the aggregate, in excess of the rent payable under this Lease for the
subleased or assigned space during the term of the sublease or assignment.
Any
amounts payable by Tenant pursuant to this Paragraph will be paid by Tenant
to
Landlord as and when amounts on account thereof are paid by any subtenant or
assignee to Tenant, and Tenant agrees to promptly furnish such information
with
regard thereto as Landlord may request from time to time. Landlord
may at any time and from time to time, but in no event more than one time per
year, upon prior notice to Tenant audit and inspect Tenant's books, records,
accounts, and federal income tax returns to verify the determination of
additional rent payable under this Paragraph.
13
15.4 Tenant
will not publicly advertise the rate for which Tenant is willing to sublet
the
space or assign the Lease. All public advertisements of the assignment of the
Lease or sublease of the Premises, or any portion thereof, are subject to prior
written approval by Landlord, which consent shall not be unreasonably withheld.
The placement or display of any signs or lettering on the exterior of the
Premises, or on the glass or any window or door of the Premises, or in the
interior of the Premises if it is visible from the exterior, is strictly
prohibited.
15.5 The
listing or posting of any name, other than that of Tenant, whether on the door
or exterior wall of the Premises, the Building's tenant directory in the lobby
or elevator, or elsewhere, will not (a) constitute a waiver of Landlord's right
to withhold consent to any sublet or assignment pursuant to this Paragraph,
(b)
be deemed an implied consent by Landlord to any sublet of the Premises or any
portion thereof, to any assignment or transfer of the Lease, or to any
unauthorized occupancy of the Premises, except in accordance with the express
terms of the Lease, or (c) operate to vest any right or interest in the Lease
or
in the Premises.
15.6 In
the
case of any assignment of this Lease by Tenant, the assignor and the assignee
will be jointly and severally liable for all of the obligations of the tenant
under this Lease. The joint and several liability of Tenant named herein and
any
immediate and remote successor in interest of Tenant (by assignment or
otherwise), and the due performance of the obligations of this Lease on Tenant's
part to be performed or observed, will not in any way be discharged, released
or
impaired by any (a) agreement which modifies any of the rights or obligations
of
the parties under this Lease, (b) stipulation which extends the time within
which an obligation under this Lease is to be performed, (c) waiver of the
performance of an obligation required under this Lease, or (d) failure to
enforce any of the obligations set forth in this Lease.
15.7 Anything
contained in the foregoing provisions of this Paragraph 15
to the
contrary notwithstanding, neither Tenant nor any other person having an interest
in the possession, use, occupancy or utilization of the Premises may enter
into
any lease, sublease, license, concession or other agreement for use, occupancy
or utilization of space in the Premises which provides for rental or other
payment for such use, occupancy or utilization based, in whole or in part,
on
the net income or profits derived by any person from the Premises leased, used,
occupied or utilized (other than an amount based on a fixed percentage or
percentages of receipts of sales), and any such proposed lease, sublease,
license, concession or other agreement will be absolutely void and ineffective
as a conveyance or any right or interest in the possession, use, occupancy
or
utilization of any part of the Premises.
16. CONSTRUCTION
LIENS.
16.1 Tenant
will not permit any construction or mechanic's lien or liens to be placed upon
the Premises or the Project. Nothing in this Lease will be deemed or construed
in any way as constituting the consent or request of Landlord, express or
implied, to any person for the performance of any labor or the furnishing of
any
materials to all or part of the Premises, nor as giving Tenant any right, power,
or authority to contract for or permit the rendering of any services or the
furnishing thereof that would or might give rise to any construction, mechanic's
or other liens against the Premises.
14
16.2 If
any
such lien is claimed against the Premises, then Tenant will discharge said
lien
or cause the same to be bonded or insured over in an amount and by a bonding
company or title insurance company reasonably satisfactory to Landlord, within
10 days of filing, failing which, in addition to any other right or remedy
of
Landlord, Landlord may, but will not be obligated to, discharge the same. Any
amount paid by Landlord for such purposes will be paid by Tenant to Landlord
as
additional rent within 10 days of Landlord's demand therefor.
16.3 Landlord's
interest in the Premises will not be subject to liens for improvements made
by
the Tenant, and Tenant will have no power or authority to create any lien or
permit any lien to attach to the Premises or to the present estate, reversion
or
other estate of Landlord in the Premises herein demised or other improvements
thereon as a result of improvements made by Tenant or for any other cause or
reason. All materialmen, contractors, artisans, mechanics and laborers and
other
persons contracting with Tenant with respect to the Premises or any part
thereof, or any such party who may avail himself of any lien against realty
(whether same proceeds in law or in equity), are hereby charged with notice
that
such liens are expressly prohibited and that they must look solely to Tenant
to
secure payment for any work done or material furnished for improvements by
Tenant or for any other purpose during the Lease Term. Tenant will indemnify
Landlord against any loss or expenses incurred as a result of the assertion
of
any such lien.
17. INSURANCE.
17.1 Tenant's
Insurance.
Tenant
will secure and maintain, at Tenant's expense:
(a) All
risk
property insurance (including extra expense insurance) on all of Tenant's
fixtures and personal property in the Premises, and on any alterations,
additions or improvements which Landlord requires Tenant to insure in accordance
with Paragraph 11,
all for
the full replacement cost thereof. Tenant will use the proceeds from such
insurance for the replacement of fixtures and personal property and for the
restoration of any such alterations, additions or improvements as set forth
in
Paragraph 20. Landlord will be named as loss payee as respects its interest
in any such alterations, additions, or other improvements.
(b) Business
income insurance with limits not less than Tenant's 100% gross revenue for
a
period of 12 months.
(c) Workers
compensation and employers liability insurance. Workers compensation insurance
in statutory limits will be provided for all employees. The employers liability
insurance will afford limits not less than $500,000.00 per accident, $500,000.00
per employee for bodily injury by disease, and $500,000.00 policy limit for
bodily injury by disease.
(d) Commercial
general liability insurance which insures against claims for bodily injury,
personal injury, advertising injury, and property damage based upon, involving,
or arising out of the use, occupancy, or maintenance of the Premises and the
Project. Such insurance will afford, at a minimum, the following
limits:
|
Each
Occurrence
|
$
|
1,000,000.00
|
||
|
General
Aggregate
|
1,000,000.00
|
|||
|
Products/Completed
Operations Aggregate
|
2,000,000.00
|
|||
|
Personal
and Advertising Injury Liability
|
1,000,000.00
|
|||
|
Fire
Damage Legal Liability
|
50,000.00
|
|||
|
Medical
Payments
|
5,000.00
|
Such
insurance will name Landlord, its trustees and beneficiaries, Landlord's
mortgagees, Landlord's managing agent, Landlord's advisor, and their respective
officers, directors, agents and employees, as additional insureds (the
"Required
Additional Insureds").
This
coverage must include blanket contractual liability, broad form property damage
liability, and must contain an exception to any pollution exclusion which
insures damage or injury arising out of heat, smoke, or fumes from a hostile
fire. Such insurance must be written on an occurrence basis and contain a
standard separation of insureds provision.
15
(e) Business
auto liability which insures against bodily injury and property damage claims
arising out of the ownership, maintenance, or use of "any auto." A minimum
of a
$1,000,000.00 combined single limit per accident will apply.
(f) Umbrella
excess liability insurance, on an occurrence basis, that applies excess of
required commercial general liability, business auto liability, and employers
liability policies, which insures against bodily injury, property damage,
personal injury and advertising injury claims with the following minimum
limits:
|
Each
Occurrence
|
$
|
5,000,000.00
|
||
|
Annual
Aggregate
|
5,000,000.00
|
|||
These
limits must be in addition to and not including those stated for underlying
commercial general liability, business auto liability, and employers liability
insurance. Such policy must name the Required Additional Insureds as additional
insureds.
(g) General
insurance requirements.
All
policies required to be carried by Tenant hereunder must be issued by and
binding upon an insurance company licensed to do business in the state in which
the property is located with a rating of at least "A-" "XII" or better as set
forth in the most current issue of Best's Key Rating Guide, unless otherwise
approved by Landlord. Tenant will not do or permit anything to be done that
would invalidate the insurance policies required.
Liability
insurance maintained by Tenant will be primary coverage without right of
contribution by any similar insurance that may be maintained by
Landlord.
Certificates
of insurance, acceptable to Landlord, evidencing the existence and amount of
each liability insurance policy required hereunder and Evidence of Property
Insurance Form, Acord 27, evidencing property insurance as required will be
delivered to Landlord prior to delivery or possession of the Premises and ten
days prior to each renewal date. Certificates of insurance will include an
endorsement for each policy showing that the Required Additional Insureds are
included as additional insureds on liability policies (except employer's
liability). The Evidence of Property Insurance Form will name Landlord as loss
payee for property insurance as respects Landlord's interest in improvements
and
betterments. Further, the certificates must include an endorsement for each
policy whereby the insurer agrees not to cancel or non-renew the policy, or
reduce the coverage below the limits required in this Lease, without at least
30
days' prior notice to Landlord and Landlord's managing agent, if
any.
If
Tenant
fails to provide evidence of insurance required to be provided by Tenant
hereunder, prior to commencement of the term and thereafter during the term,
within 10 days following Landlord's request thereof, and 10 days prior to the
expiration date of any such coverage, Landlord will be authorized (but not
required) to procure such coverage in the amount stated with all costs thereof
to be chargeable to Tenant and payable upon written invoice
thereof.
The
limits of insurance required by this Lease, or as carried by Tenant, will not
limit the liability of Tenant or relieve Tenant of any obligation thereunder,
except to the extent provided for under Paragraph 18 below (Waiver of
Claims; Waiver of Subrogation). Any deductibles selected by Tenant will be
the
sole responsibility of Tenant.
Landlord
may, at its sole discretion, change the insurance policy limits and forms which
are required to be provided by Tenant; such changes will be made to conform
with
common insurance requirements for similar properties in similar geographic
locations. Landlord will not change required insurance limits or forms more
often than once per calendar year.
16
17.2 Landlord's
Insurance.
Landlord agrees to maintain during the Lease Term "all-risk" insurance on the
Building at replacement cost, excluding foundations and excluding the items
which Tenant is required to insure under Paragraph 17.1(a).
18. WAIVER
OF CLAIMS; WAIVER OF SUBROGATION.
To
the
extent permitted by law, Tenant waives all claims it may have against Landlord,
its agents or employees for damage to property sus-tained by Tenant or any
occupant or other person resulting from the Premises or the Project or any
part
of said Premises or Project becoming out of repair or resulting from any
accident within or adjacent to the Premises or Project or resulting directly
or
indirectly from any act or omission of Landlord or any occu-pant of the Premises
or Project or any other person while on the Premises or the Project, or
resulting from any peril required to be insured against under this Lease,
regardless of cause or origin. The
waiver in this paragraph will also apply as to the amount of any deductible
under Tenant's insurance. Particularly,
but not in limitation of the foregoing sentence, all property belonging to
Tenant or any occupant of the Premises that is in the Project or the Premises
will be there at the risk of Tenant or other person only, and Landlord or its
agents or employees will not be liable for damage to or theft of or
misappropriation of such property, nor for any damage to property resulting
from
fire, explosion, flooding of basements or other subsurface areas, falling
plaster, steam, gas, electricity, snow, water or rain which may leak from any
part of the Project or from the pipes, appliances or plumbing works therein
or
from the roof, street or subsurface or from any other place or resulting from
dampness or any other cause whatsoever, nor for any latent defect in the
Premises or in the Project. Tenant will give prompt notice to Landlord in
accordance with Paragraphs 20.1
and 35.13
in case
of fire or accidents in the Premises or in the Project or of defects therein
or
in the fixtures or equipment.
Tenant
agrees to include in the insurance policies which Tenant is required by this
Lease to carry in accordance with Paragraphs 17.1(a)
and 17.1(b),
to the
fullest extent permitted by law, a waiver of subrogation against Landlord and
Landlord's managing agent.
To
the
extent permitted by law, Landlord waives all claims it may have against Tenant,
its agents or employees for damage to the Project resulting directly or
indirectly from any act or omission of Tenant or any occupant of the Premises
or
any other person while on the Premises, to the extent that such claim is covered
by any property insurance which Landlord is required under Paragraph 17.2
to carry
on the Building. Landlord will include in any property insurance policy which
Landlord may carry on the Building, to the extent permitted by law, a waiver
of
subrogation against Tenant.
Landlord
will not be required to maintain insurance against thefts within the Premises,
the Project or any complex within which the Project is located.
19. INDEMNIFICATION.
Tenant
will indemnify, defend and hold harmless Landlord and its agents or employees
against any claims or costs, including reasonable attorneys' and paralegals'
fees, arising from conduct or from any breach or default on the part of Tenant,
its agents or employees during the Lease Term or from such acts or conduct
of
any subtenant, employee, agent, servant, customer or contractor of Tenant.
In
case any action or proceeding be brought against Landlord by reason of any
obligation on Tenant's part to be performed under the terms of this Lease,
or
arising from any act or negligence of the Tenant, or of its agents or employees,
Tenant upon notice from Landlord will defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. If any damage to the Project
results from any act or negligence of Tenant, Landlord may at Land-lord's option
repair such damage, and Tenant will thereupon pay to Landlord the total cost
of
such repairs and damages to the Project; provided, however, that Landlord waives
any right of action against Tenant for any loss or damage to the Project,
including the Premises, resulting from fire or other casualty by such act or
negligence if Land-lord's insurance policy covers such loss or damage and
per-mits such a waiver.
17
20. CASUALTY
DAMAGE.
20.1 If
the
Premises or any part thereof are damaged by fire or other casualty, Tenant
will
give prompt written notice thereof to Landlord.
20.2 If
the
Building is damaged such that substantial alteration or reconstruction of the
Building is, in Landlord's sole opinion, required (whether or not the Premises
are damaged by such casualty) or if any mortgagee of the Building requires
that
the insurance proceeds payable as a result of a casualty be applied to the
payment of the mortgage debt or in the event of any material uninsured loss
to
the Building, Landlord may, at its option, terminate this Lease by notifying
Tenant in writing of such termination within 90 days after the date of such
damage.
20.3 If
Landlord does not thus elect to terminate this Lease, then (i) Tenant will
take
such action as is necessary to make available applicable insurance proceeds
on
Tenant's fixtures and personal property in the Premises, and on any alterations,
additions or improvements which Tenant is required to insure in accordance
with
Paragraph 11
or
Paragraph 17.1(a),
and
Tenant will cause such insurance proceeds on such alterations, additions and
improvements to be paid to Landlord and will cause such insurance proceeds
on
Tenant's fixtures and personal property to be paid to Tenant; and (ii) Landlord
will take such action as is necessary to make applicable insurance proceeds
available with respect to the Building and will commence and proceed with
reasonable diligence to restore the Building and the Premises. However, Landlord
will not be obligated to spend for such work an amount in excess of the
insurance proceeds actually received by Landlord as a result of the casualty.
Tenant will be responsible for replacing and restoring Tenant's fixtures and
personal property.
20.4 Landlord
will not be liable for any inconvenience or annoyance to Tenant or injury to
the
business of Tenant resulting in any way from such damage or the repair thereof,
except that, subject to the provisions of Paragraph 20.5,
Landlord will allow Tenant a fair diminution of rent during the time and to
the
extent the Premises are unfit for occupancy.
20.5 If
the
Premises or any portion of the Building is damaged by fire or other casualty
resulting from the fault or negligence of Tenant's agents, employees, or
invitees, the rent hereunder will not be diminished, offset, or abated during
the repair of such damage and Tenant will be liable to Landlord for the cost
of
the repair and restoration of the Building caused thereby, as well as any other
cost and expense thereby incurred by Landlord, to the extent such cost and
expense is not covered by Landlord's insurance proceeds.
21. CONDEMNATION.
21.1 If
the
whole or substantially the whole of the Building or the Premises is taken for
any public or quasi-public use, by right of eminent domain or otherwise, or
if
it is sold in lieu of condemnation, then this Lease will terminate as of the
date when physical possession of the Building or the Premises is taken by the
condemning authority.
21.2 If
less
than the whole or substantially the whole of the Building or the Premises is
thus taken or sold, Landlord (regardless of whether the Premises are affected
thereby) may terminate this Lease by giving written notice thereof to Tenant,
in
which event this Lease will terminate as of the date when physical possession
of
such portion of the Building or Premises is taken by the condemning
authority.
21.3 If
this
Lease is not so terminated upon any such taking or sale, the Base Rental payable
hereunder will be diminished by a pro-rata amount if a portion of the Premises
was taken, and Landlord will, to the extent Landlord deems feasible, restore
the
Building and the Premises, including tenant improvements (but excluding Tenant's
fixtures and personal property). However, Landlord will not be required to
spend
for such work an amount in excess of the amount received by Landlord as
compensation for such damage.
18
21.4 All
amounts awarded upon a taking of any part or all of the Project or the Premises
will belong to Landlord, and Tenant will not be entitled to and expressly waives
all claim to any such compensation. However, Tenant will be entitled to claim
independently against the condemning authority any damages expressly referable
to Tenant's business as the same may be permitted by law provided that such
claim does not reduce any award payable to Landlord.
22. EVENTS
OF DEFAULT/REMEDIES.
22.1 "Events
of Default" by Tenant.
The
happening of any one or more of the following listed events (each an
"Event
of Default")
will
constitute a breach of this lease by Tenant:
(a) The
failure of Tenant to pay any rent or any other sums of money due hereunder
within 5 days after notice; for purposes of this Lease, any statutory notice
given by Landlord to Tenant in accordance with applicable law, including,
without limitation, any statutory 5-day notice, will suffice for the notice
referred to above in this Subparagraph (a) (with the understanding that
Landlord is not required to give more than three (3) notices under this
paragraph in any Lease Year);
(b) The
taking of the leasehold on execution or other process of law in any action
against Tenant;
(c) The
failure of Tenant to accept the Premises, to promptly move into, to take
possession of, and to operate its business on the Premises when the Premises
are
substantially complete, or if Tenant ceases to do business in, abandons or
vacates any substantial portion of the Premises;
(d) Tenant
becoming insolvent or unable to pay its debts as they become due, or Tenant's
notification to Landlord that it anticipates either condition;
(e) Tenant
taking any action to, or notifying Landlord that Tenant intends to, file a
petition under the Bankruptcy Code (Title 11 of the United States Code) as
amended, or any similar law or statute of the United States, or any state;
or,
the filing of a petition against Tenant under any such statute or law, or,
any
other creditor of Tenant notifying Landlord that it knows such a petition will
be filed and such petition is not dismissed within thirty (30) days after the
filing thereof; or Tenant's notification to Landlord that it expects such a
petition to be filed;
(f) The
appointment of a receiver or trustee for Tenant's leasehold interest in the
Premises or for all or a substantial part of the assets of Tenant;
(g) Breach
of
any of the provisions of Paragraph 15
(Assignment and Subletting); or
(h) The
failure of Tenant to comply with any other provision of this Lease or any other
agreement between Landlord and Tenant (including the Work Letter; all of which
terms, provisions, and covenants will be deemed material) within 15 days after
notice if such failure consists of something other than a failure to pay money
(unless
the default involves a hazardous condition, which must be cured forthwith),
but
if such failure cannot be cured within such 15-day period and does not involve
a
hazardous condition, and if Tenant
commences to cure the same within such 15-day period and continues to use
diligent efforts to cure such failure, then such 15-day grace period will be
extended for an additional 15 days, such that the maximum grace period is 45
days; for purposes of this Lease, any statutory notice given by Landlord to
Tenant in accordance with applicable law will suffice for the notice referred
to
above in this Subparagraph.
22.2 Landlord's
Remedies for Tenant Default.
Upon
the occurrence of an Event of Default by Tenant, Landlord may exercise the
remedies described in this Paragraph.
(a) Landlord
may cancel and terminate this Lease and dispossess Tenant;
(b) Landlord
may without terminating or cancelling this Lease declare all amounts and rents
due under this Lease for the remainder of the existing term (or any applicable
extension or renewal thereof) to be immediately due and payable, and thereupon
all rents and other charges due hereunder to the end of the initial term or
any
renewal term, if applicable, will be accelerated;
19
(c) Landlord
may elect to enter and repossess the Premises and relet the Premises for
Tenant's account, holding Tenant liable in damages for all expenses incurred
in
any such reletting and for any difference between the amount of rent received
from such reletting and the amount due and payable under the terms of this
Lease;
(d) Landlord
may enter upon the Premises and do whatever Tenant is obligated to do under
the
terms of this Lease (and Tenant will reimburse Landlord on demand for any
expenses which Landlord may incur in effecting compliance with Tenant's
obligations under this Lease, and Landlord will not be liable for any damages
resulting to the Tenant from such action); and
(e) CONFESSION
OF JUDGMENT.
THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR AN ATTORNEY TO
CONFESS JUDGMENTS AGAINST TENANT OR TO SIGN AND FILE AN ANSWER ON TENANT’S
BEHALF FOR POSSESSION OF THE PREMISES. IN GRANTING THESE WARRANTS OF ATTORNEY
TO
CONFESS JUDGMENTS AGAINST TENANT AND TO SIGN AND FILE AN ANSWER ON TENANT’S
BEHALF, TENANT HEREBY KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY, AND, ON THE ADVICE OF THE SEPARATE COUNSEL OF TENANT,
UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TENANT HAS OR MAY HAVE WITH RESPECT
TO
PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS
AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF
PENNSYLVANIA.
(i) Intentionally
Deleted.
(ii) Upon
the
occurrence of an Event of Default, or upon the termination of this Lease, the
original term hereof or any renewal or extension thereof on account of any
default by Tenant hereunder, or upon the expiration of the original term of
this
Lease or any renewal or extension thereof, it shall be lawful for any
Prothonotary or attorney of any court of record to appear for Tenant, as well
as
for all parties claiming by, through or under Tenant, and to (i) confess
judgment against Tenant for recovery of possession of the Premises, and/or
(ii)
sign and file for Tenant an answer in response to any action instituted by
Landlord against Tenant in any competent Court for the recovery of possession
of
the Premises, wherein Tenant admits all allegations set forth in such action
(for either of which this Lease or a true and correct copy thereof shall be
a
sufficient warrant); whereupon, if Landlord so desires, a writ of possession
may
issue forthwith, without any prior writ or proceedings whatsoever. If for any
reason after judgment has been confessed or an answer signed and filed as
provided above, the same shall be determined and the possession of the Premises
remain in or be restored to Tenant, Landlord shall have the right upon any
subsequent Event(s) of Default, or upon the termination or expiration of this
Lease or Tenant’s right of possession as herein set forth, to proceed against
Tenant in the manner herein set forth to recover possession of the premises.
No
such determination or recovery of possession of Premises]
shall
deprive Landlord of any remedies or action against Tenant for damages due or
to
become due for Tenant’s breach of this Lease nor shall the resort to any other
remedy provided for the recovery of damages for such breach be construed as
a
waiver of Landlord’s right to obtain possession of the Premises in the manner
herein provided.
(iii) In
any
action instituted by Landlord pursuant to subparagraph (ii) above, Landlord
shall first cause to be filed in such action an affidavit made by it or some
person 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 the Lease is 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.
(iv) The
right
to enter judgment against Tenant by confession, sign and file an answer for
Tenant and to enforce all of the other provisions of the Lease, may be exercised
by any assignee of Landlord’s right, title and interest in this Lease in said
assignee’s name, any statute, rule of court, custom or practice to the contrary
notwithstanding.
20
22.3 Landlord's
Remedies are Cumulative.
All the
remedies of Landlord in the event of Tenant default will be cumulative and
in
addition, Landlord may pursue any other remedies permitted by law or in equity.
22.4 Events
of Landlord Default.
Landlord
will not be deemed to be in default under this Lease unless obligations required
of Landlord hereunder are not performed by Landlord within 30 days after written
notice thereof by Tenant to Landlord and to any lender or other lien holder
with
rights in all or any portion of the Building, whose names and addresses are
furnished to Tenant in writing, which notice specifies that there has been
a
failure to perform such obligations; provided, however, that if the nature
of
such obligations is such that more than 30 days are reasonably required for
their cure, Landlord will not be deemed to be in default hereunder if Landlord
commences such cure with reasonable promptness within such 30-day period and
thereafter diligently prosecutes such cure to completion. However, if Landlord
fails to cure such default within the time set forth above, then any lender
or
other lien holder with rights in all or any portion of the Building will have
an
additional 30 days within which to cure such default but not the obligation
to
do so, or if such default cannot be cured within that time, then such additional
time as may be necessary if within such 30 days any such holder has commenced
and is diligently pursuing the remedies necessary to cure such default,
including, but not limited to, commencement of foreclosure proceedings if
necessary to effect such a cure. In no event will Tenant have the right to
terminate or rescind this Lease as a result of Landlord's default as to any
covenant or agreement contained in this Lease or as a result of the breach
of
any promise of inducement hereof, whether in this Lease or elsewhere. Tenant
hereby waives such remedies of termination and rescission and hereby agrees
that
Tenant's remedies for default hereunder and for breach of any promise or
inducement will be limited to a suit for damages or an injunction, or
both.
23. PEACEFUL
ENJOYMENT.
Tenant
may peacefully enjoy the Premises against all persons claiming by, through
or
under Landlord, subject to the other terms hereof, provided that Tenant pays
the
rent and other sums herein required to be paid by Tenant and performs all of
Tenant's covenants and agreements in this Lease.
24. INTENTIONALLY
DELETED.
25. HOLDING
OVER.
25.1 If
Tenant
holds over without Landlord's written consent after expiration or other
termination of this Lease, or if Tenant continues to occupy the Premises after
termination of Tenant's right of possession pursuant to the provisions of
Paragraph 22.2(c), Tenant will throughout the entire holdover period pay
one and one-half the rental that would have been applicable had the Lease Term
continued through the period of such holding over by Tenant, and, in addition,
Tenant will pay Landlord all reasonable damages sustained by reason of Tenant's
holding over. Landlord and Tenant maintain the right to terminate this month
to
month tenancy with 30 days' written notification to the other party. The
provisions of this paragraph do not waive Landlord's right of re-entry or right
to regain possession by actions at law or in equity or by any other rights
hereunder.
25.2 No
possession by Tenant after the Expiration Date will be construed to extend
the
Lease Term unless Landlord has consented to such possession in
writing.
26. SUBORDINATION
TO MORTGAGE.
26.1 This
Lease is and will be subject and subordinate to any mortgage, deed of trust
or
related security instrument, whether presently existing or hereafter arising
upon the Premises or upon the Building and to any renewals, modifications,
refinancing or extensions thereof, but Tenant agrees that the holder of any
such
instrument will have the right to subordinate such instrument to this Lease
on
such terms and subject to such conditions as such holder may deem appropriate
in
its discretion. The foregoing subordination of this Lease to any mortgage,
deed
of trust or related security instrument will be self-operative and no further
instrument of subordination is required.
21
26.2 Landlord
is hereby irrevocably vested with full power and authority to subordinate this
Lease to any mortgage, deed of trust or related security instrument now existing
or hereafter placed upon the Premises or the Building as a whole, and Tenant
agrees upon demand to execute such further instruments subordinating the Lease
or attorning to holder of any such lien as Landlord may request.
26.3 If
Tenant
fails to execute any subordination or other agreement required by this
Paragraph 26 promptly as requested, Tenant hereby irrevocably constitutes
Landlord as its attorney-in-fact to execute such instrument in Tenant's name,
place and stead, it being agreed that such power is one coupled with an
interest.
26.4 Tenant
will, in the event of the sale or assignment of Landlord's interest in the
Building or in the event of any proceedings brought for the foreclosure of,
or
in the event of exercise of the power of sale under, or taking by deed in lieu
of foreclosure of, any mortgage, deed of trust or related instrument made by
Landlord covering the Premises, give full and complete attornment to the
purchaser and recognize the purchaser as Landlord under this Lease for the
balance of the Lease Term, including any extensions or renewals
thereof.
26.5 Notwithstanding
anything contained in Paragraph 26 to the contrary, Landlord hereby agrees
to
use its best efforts to obtain an agreement in writing from any existing or
future mortgagee that if the mortgagee (or any assignee of the mortgagee or
purchaser at a foreclosure sale) becomes the record owner of the Premises or
the
Building, the mortgagee will not disturb Tenant's possession in the Premises
provided that Tenant is not in default under this Lease.
27. ESTOPPEL.
Tenant
will, at the request of Landlord, at any time and from time to time upon not
less than 10 days' prior notice, execute, acknowledge in recordable form, and
deliver to Landlord or to Landlord's mortgagee, lessor under any ground lease,
auditors or a prospective purchaser of the Project or any part there-of, a
certificate stating the following, as requested: (a) that this Lease is
unmodified and in full force and effect, (or, if modified, stating the nature
of
such modification and certifying that this Lease, as so modified, is in full
force and effect); (b) the date the Lease commenced and the rent commencement
date (if different); (c) whether Tenant has any options to renew or extend
the
Lease Term or any options, rights of first refusal or rights of first offer
to
expand the Premises or to purchase the Project and whether Tenant has exercised
any of those options; (d) whether Tenant has accepted and is now in full
possession of the Premises, and whether Tenant has assigned the Lease, sublet
all or any portion of the Premises, or otherwise transferred any interest in
the
Lease or the Premises; Tenant agrees to provide a copy of such assignment,
sublease or transfer upon request; (e) the current monthly installments of
Base
Rental and Tenant's share of Excess Operating Expenses, the dates to which
such
rental and other charges have been paid, and that no such rent has been paid
for
more than 30 days in advance of its due date; (f) the base year(s) or base
amount(s), if any, for Tenant's share of Excess Operating Expenses; (g) whether
Tenant is currently receiving any rental concessions, rebates or abatements
and,
if so, the terms of such concession, rebate or abatement, including, without
limitation, the date when such concession, rebate or abatement will expire;
(h)
whether Tenant is entitled to any future rent concessions, rebates or abatements
under the Lease and, if so, the terms of the future concessions, rebates or
abatements; (i) the amount of the Security Deposit paid to Landlord; (j) whether
Tenant has received any notice of prior sale, transfer assignment, hypothecation
or pledge of the Lease or of the rents payable thereunder; (k) that all
alterations, improvements, additions, build-outs or construction required to
be
performed under the Lease have been completed and any required allowances have
been paid (or if not completed or paid, stating the nature of the deficiencies);
(l) that Tenant is paying rent on a current basis with no offsets or claims,
and
there are not, to Tenant's knowl-edge, any uncured defaults on the part of
Landlord or of Tenant as is pertinent to the request (or specifying such
offsets, claims or de-faults, if any are claimed); and (m) such other matters
as
may be reasonably requested. It is expressly understood and agreed that any
such
statement may be relied upon by any prospective purchaser or mortgagee of all
or
any portion of the real property of which the Premises are a part or by any
other person to whom it is delivered. The failure to deliver such statement
within such time will be conclusive upon Tenant that this Lease is in full
force
and effect, without modification except as may be represented by Landlord,
there
are no uncured defaults by Landlord and that not more than one month's rental
has been paid in advance and Tenant -will be estopped from asserting any
defaults known to it at that time.
22
28. LANDLORD'S
LIEN.
28.1 Tenant
hereby grants to Landlord a lien and security interest on (a) all property
of
Tenant now or hereafter placed in or upon the Premises, and (b) all accounts,
contract rights, instruments, chattel paper and other rights of Tenant for
payment of money for property sold or lent or for services rendered, as they
exist from time to time, and such property and such rights will be and remain
subject to such lien and security interest of Landlord for payment of all rent
and other sums agreed to be paid by Tenant herein. It is provided, however,
the
Landlord will not have a lien which would be superior to a lien from a lending
institution, supplier or leasing company, if such lending institution, supplier
or leasing company has a security interest in the equipment, furniture or other
tangible personal property and which security interest has its origin in a
transaction whereby Tenant acquired such equipment, furniture or other tangible
personal property.
28.2 The
provisions of this paragraph relating to such lien and security interest will
constitute a security agreement under and subject to the Uniform Commercial
Code
of the State of Pennsylvania so that Landlord will have and may enforce a
security interest on all property of Tenant now or hereafter placed in or on
the
Premises, and on all such rights of Tenant for payment of money, in addition
to
and cumulative of the Landlord's liens and rights provided by law or by the
other terms and provisions of this Lease.
28.3 Tenant
agrees to execute as debtor such financing statement or statements and such
other documents as Landlord may now or hereafter request in order to protect
or
further perfect Landlord's security interest. Notwithstanding the above,
Landlord will neither sell nor withhold from Tenant, Tenant's business
records.
29. TELECOMMUNICATIONS.
There
are
installed in the Building telephone riser cables (collectively the "riser
cables")
from
the outside of the Building to the terminal block on each floor in the Building.
Subject to Landlord's supervision and approval, Tenant shall have the right
to
use the riser cables by installing telecommunication lines from the Premises
to
the terminal block on the floor or floors on which the Premises are located
(such lines, and any other voice/data cables, lines or wires used or installed
by or for Tenant and serving the Premises are referred to as the "telecommunication
lines").
Landlord, however, makes no representations or warranties with respect to the
capacity, suitability or design of the riser cables or terminal blocks. If
there
is more than one tenant on a floor, Landlord will allocate hook-ups to the
terminal block based on the proportion of rentable square feet that each tenant
occupies on the floor. The installation and hook-up of telecommunication lines
by Tenant will be subject to all of the terms and conditions of this Lease,
including, without limitation, Paragraph 11 of this Lease. Tenant will have
no rights or interest in the riser cables and terminal blocks in the Building
therein except as set forth herein. Under no circumstances will Landlord or
its
agents or employees be liable for, and Tenant and each of its subtenants waives
all claims with respect to, any damages or losses sustained by it or any
occupant of the Premises, including any property or consequential damages,
resulting from operating or maintenance of the riser cables and terminal blocks.
Without limiting the generality of the foregoing, in no event shall Landlord
be
liable for: (a) any damage to Tenant's or its subtenants’ telephone lines,
telephones or other equipment connected to the telecommunication lines, (b)
interruption or failure of, or interference with, telephone or other service
coming through the telecommunication lines to the Premises, or (c) unauthorized
eavesdropping or wiretapping. All telephone and telecommunications desired
by
Tenant must be ordered and utilized at the sole expense of Tenant. All of
Tenant's telecommunications equipment must be and remain solely in the Premises,
in accordance with this Lease and with the rules and regulations adopted by
Landlord from time to time.
23
Any
and
all telecommunications lines and equipment installed in the Premises or
elsewhere in the Building by or on behalf of Tenant must be removed before
the
expiration or earlier termination of this Lease, by Tenant at its sole cost
or,
at Landlord's election, by Landlord at Tenant's sole cost, with such cost to
be
paid as additional rent. However, Landlord will have the right, upon written
notice to Tenant given no later than 30 days before the expiration or earlier
termination of this Lease, to require Tenant to abandon and leave in place,
without additional payment to Tenant or credit against rent, any and all
telecommunication lines and related infrastructure, or selected components
thereof, whether located in the Premises or elsewhere in the Project. Tenant
covenants and agrees that at the termination or expiration of this Lease, Tenant
will be the sole owner of such telecommunication lines and related equipment
and
infrastructure; provided, however, Tenant shall not remove any such
telecommunication lines and related equipment located within the walls or
ceilings of the Premises, and any lines located within the walls or ceilings
shall not be cut by Tenant outside of the walls or ceilings so as to preclude
a
new user from connecting to said lines. Tenant further covenants that such
telecommunication lines and related equipment and infrastructure will be free
of
all liens and encumbrances, and that such telecommunication lines will be in
good condition, working order, and properly labeled at each end and in each
telecommunications/electrical closet and junction box. The provisions of this
grammatical paragraph will survive expiration or termination of this
Lease.
If
Tenant
wishes at any time to utilize the services of a telecommunications provider
whose equipment is not then servicing the Building, no such provider will be
permitted to install its lines or other equipment within the Building or on
the
Project without first securing the prior written consent of Landlord, which
consent may be withheld in Landlord’s sole discretion. If telecommunications
equipment, wiring, and facilities installed by or at the request of Tenant
within the Premises, or elsewhere within or on the Building or Project causes
interference to equipment used by another party, Tenant will (i) assume all
liability related to such interference, and will indemnify and hold Landlord
harmless from any liabilities and claims against Landlord resulting from such
interference, (ii) use reasonable efforts, and cooperate with Landlord and
other
parties, to promptly eliminate such interference, (iii) if Tenant is unable
to
do promptly eliminate such interference, substitute alternative equipment which
remedies the situation, and (iv) if such interference persists, discontinue
the
use of the equipment causing such interference and, at Landlord’s discretion,
remove such equipment.
30. NO
IMPLIED WAIVER.
30.1 The
failure of Landlord to insist at any time upon the strict performance of any
covenant or agreement or to exercise any option, right, power or remedy
contained in this Lease will not be construed as a waiver or a relinquishment
thereof for the future. Any default in the timely payment of rent will not
be
construed as creating a custom of deferring payment or as modifying in any
way
the terms of this Lease. No act or thing done by Landlord, its agents or
employees during the Lease Term will be deemed an acceptance of a surrender
of
the Premises, and no agreement to accept a surrender of the Premises will be
valid, unless in writing signed by Landlord. The delivery of keys to any of
Landlord’s agents or employees will not operate as a termination of this Lease
or a surrender of the Premises.
30.2 No
payment by Tenant or receipt by Landlord of a lesser amount than the rent due
under this Lease will be deemed to be other than on account of the earliest
rent
due, nor will any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or pursue any other remedy provided
in
this Lease.
31. PERSONAL
LIABILITY.
The
liability of Landlord to Tenant for any default by Landlord under this Lease
will be limited to the interest of Landlord in the Project, and Tenant agrees
to
look solely to Landlord's interest in the Project for the recovery of any
judgment from the Landlord, it being intended that Landlord will not be
personally liable for any judgment of deficiency.
24
32. SECURITY
DEPOSIT.
32.1 The
Security Deposit set forth in the Schedule is due from Tenant upon Tenant's
execution and delivery of this Lease, and will be held by Landlord without
liability for interest and as security for the performance by Tenant of Tenant's
covenants and obligations under this Lease, it being expressly understood that
the Security Deposit will not be considered an advance payment of rental or
a
measure of Tenant's damages in case of default by Tenant.
32.2 Landlord
may, from time to time without prejudice to any other remedy, use the Security
Deposit to the extent necessary to make good any arrearages of rent or to
satisfy any other covenant or obligation of Tenant hereunder (including,
without limitation, Tenant’s unpaid electricity bills).
Following any such application of the Security Deposit, Tenant will pay to
Landlord within ten (10) days after demand the amount so applied in order to
restore the Security Deposit to its original amount.
32.3 If
Tenant
is not in default at the termination of this Lease, the balance of the Security
Deposit remaining after any such application together with all interest earned
thereon, if any, will be returned by Landlord to Tenant.
32.4 If
Landlord transfers its interest in the Premises during the Lease Term, Landlord
may assign the Security Deposit to the transferee and thereafter Landlord will
have no further liability for the return of such Security Deposit.
33. FORCE
MAJEURE.
Whenever
a period of time is herein prescribed for the taking of any action by Landlord,
Landlord will not be liable or responsible for, and there will be excluded
from
the computation of such period of time, any delays due to strikes, riots, acts
of God, adverse weather conditions not reasonably anticipated, shortages of
labor or materials, war, acts of terrorism, governmental laws, regulations
or
restrictions, inability
to obtain necessary governmental permits and approvals (including building
permits or certificates of occupancy), inability to obtain necessary approvals
by any applicable property association or its board of directors, financing,
or any other cause whatsoever beyond the reasonable control of
Landlord.
34. HAZARDOUS
MATERIAL.
34.1 Tenant
will not (either with or without negligence) cause or permit the escape,
disposal or release of any Hazardous Material (as defined below). Tenant will
not allow the storage or use of Hazardous Material in any manner not sanctioned
by law or by the highest standards prevailing in the industry for the storage
and use of such Hazardous Materials, nor allow to be brought into the Building
or the Project (or any areas surrounding the Project owned by Landlord) any
such
Hazardous Materials except to use in the ordinary course of Tenant's business
in
customary quantities for office tenants and in compliance with Environmental
Laws, and then only after written notice is given to Landlord of the identity
of
such substances or materials.
34.2 For
purposes of this Lease, the term "Hazardous
Material"
means
any substance, chemical, waste or material that is or becomes regulated by
any
federal, state or local governmental authority because of its toxicity,
infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or
reactivity, including, without limitation, those substances regulated by the
Environmental Laws (defined below), and including, without limitation, the
following: oil and petroleum products and synthetic gas usable for fuel;
pesticides regulated under FIFRA, asbestos, and polychlorinated biphenyls.
For
purposes of this Lease, "Environmental
Laws"
means
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. Section 9601 et seq.); the Clean Air Act, the Clean Water Act;
the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and
Rodenticide Act ("FIFRA");
the
National Environmental Policy Act; the Noise Control Act; the Safe Drinking
Water Act; the Superfund Amendments and Reauthorization Act of 1986; the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); or
the
Toxic Substances Control Act; as such acts may be amended from time to time;
any
applicable state or local laws, and the regulations adopted under these acts.
25
34.3 If
any
lender or governmental agency ever requires testing to ascertain whether there
has been any release of Hazardous Materials at the Premises or in or about
the
Project caused by or arising from the action or omission of Tenant or Tenant's
agents or contractors, then the reasonable costs thereof will be reimbursed
by
Tenant to Landlord upon demand as additional rent. In addition, Tenant will
execute affidavits, representations and the like from time to time at Landlord's
request concerning Tenant's best knowledge and belief regarding the presence
of
Hazardous Material on the Premises. In all events, Tenant will indemnify
Landlord in the manner elsewhere provided in this Lease from any release of
Hazardous Materials on the Premises or elsewhere if caused by Tenant or Tenant's
agents or contractors. The within covenants will survive the expiration or
earlier termination of the Lease Term.
35. MISCELLANEOUS.
35.1 Severability.
If any
term or provision of this Lease, or the application thereof to any person or
circumstance is, to any extent, invalid or unenforceable, the remainder of
this
Lease or the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, will not
be
affected thereby, and each term and provision of this Lease will be valid and
enforced to the fullest extent of law.
35.2 Recordation.
Tenant
agrees not to record this Lease or any memorandum hereof but Landlord may record
this Lease or a memorandum thereof, at its sole election. Upon expiration or
earlier termination of this Lease, Tenant will, promptly upon Landlord's written
request, execute, acknowledge and deliver to Landlord a recordable deed
quit-claiming to Landlord all interest of Tenant in the Premises, the Project
and this Lease.
35.3 Governing
Law; Waiver of Jury Trial.
This
Lease and the rights and obligations of the parties hereto are governed by
the
laws of the State of Pennsylvania. All
parties hereto, both Landlord and Tenant, as principals, and any guarantors,
hereby release and waive any and all rights provided by law to a trial by jury
in any court or other legal proceeding initiated to enforce the terms of this
Lease, involving any such parties, or connected in any other manner with this
Lease.
Tenant
will not interpose any counterclaim of any kind in any action or proceeding
by
Landlord to recover possession of the Premises based on nonpayment of rent.
In
the event of a dispute between Landlord and Tenant, Tenant will pay rent into
the registry of the court having jurisdiction over such dispute.
35.4 Time
of Performance.
Except
as expressly otherwise herein provided, with respect to all required acts of
Tenant, time is of the essence of this Lease.
35.5 Transfers
by Landlord.
Landlord
will have the right to transfer and assign, in whole or in part, all its rights
and obligations hereunder and in the Project and the Premises referred to
herein, and in such event and upon such transfer Landlord will be released
from
any further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for the performance of such obligations
accruing after such transfer. The covenants of the Landlord will be binding
upon
Landlord and its successors only with respect to breaches occurring during
its
or their respective periods of ownership of the Landlord's interest
hereunder.
35.6 Real
Estate Broker; Commissions.
Each
party hereto hereby represents and warrants to the other that in connection
with
the leasing of the Premises hereunder, the party so representing and warranting
has not dealt with any real estate broker, agent or finder, except for GVA
Smith
Mack and the broker (if any) listed in the Schedule as Tenant’s real estate
broker (collectively, the "Broker"),
and,
to its knowledge no other broker initiated or participated in the negotiation
of
this Lease, submitted or showed the Premises to Tenant or is entitled to any
commission in connection with this Lease. Each party hereto will indemnify
the
other against any inaccuracy in such party's representation. Landlord hereby
agrees that it will pay any commission owed to the Broker according to a
separate agreement.
26
35.7 Late
Payment of Rent.
Any
payment of rent not made when due will, at Landlord's option, bear interest
at
the rate of 12% per annum (or the highest rate of interest permitted under
Pennsylvania law), whichever is lower, from the due date until paid.
Additionally, any payment of rent not paid within 10 days of the date due will
be subject to a late payment charge, for each occurrence, equal to 5% of the
amount overdue and payable. Such late charge will be in addition to the interest
provided for above and will be due and payable with the next succeeding rent
payment. This late payment charge is intended to compensate Landlord for the
additional administrative costs resulting from Tenant's failure to timely pay
the rent and has been agreed upon by Landlord and Tenant after negotiation
as a
reasonable estimate of the additional administrative costs incurred by Landlord
as a result of Tenant's failure to timely pay the rent. Such interest and late
charge will constitute additional rent. The covenants to pay rent under this
Lease are independent of any other covenant.
35.8 Use
of
Lock Box By Landlord.
Landlord may from time to time elect to designate a lock box collection agent
(independent agent, bank or other financial institution) to act as Landlord's
agent for the collection of amounts due Landlord. In such event the date of
payment of rent or other sums paid Landlord through such agent will be the
date
of agent's receipt of such payment (or the date of collection of any such sum
if
payment is made in the form of a negotiable instrument thereafter dishonored
upon present-ment); however, for purposes of this Lease, no such payment or
collection will be deemed "accepted" by Landlord if Landlord issues a check
payable to the order of the Tenant in the amount sent to the lock box and if
Landlord mails the check to the Tenant addressed to the place designated in
this
lease for notice to Tenant within 21 days after the amount sent by the Tenant
is
received by the lock box collec-tion agent or if the Landlord returns a
dishonored instrument within 21 days of its dishonor. Return of any such sum
to
Tenant by so sending such a check of the Landlord or by so sending a dishonored
instrument to the Tenant within the appro-priate 21-day period will be deemed
to
be rejection of Tenant's tender of such payment for all purposes as of the
date
of Landlord's lock box collection agent's receipt of such payment (or
collection). The return of Tenant's payment in the manner described in this
paragraph will be deemed not to be a waiver of any breach by Tenant of any
term,
covenant or condi-tion of this Lease nor a waiver of any of Landlord's rights
or
remedies grant-ed in this Lease. The possession of Tenant's funds or negotiation
of Tenant's negotiable instrument by Landlord's agent or Landlord during the
applicable 21 day period will be deemed not to be a waiver of any de-faults
of
Tenant or any rights of Landlord theretofore accrued nor shall any such
possession or negotiation be considered an acceptance of Tenant's
tender.
35.9 Effect
of Delivery of This Lease.
Landlord
has delivered a copy of this Lease to Tenant for Tenant's review only, and
the
delivery hereof does not constitute an offer to Tenant or an option to Lease.
This Lease will not be effective until a copy executed by both Landlord and
Tenant is delivered to and accepted by Landlord. However, the execution of
this
Lease by Tenant and delivery thereof to Landlord or Landlord's agent will
constitute an irrevocable offer by Tenant to lease the Premises on the terms
and
conditions herein contained, which offer may not be revoked for 10 days after
such delivery.
35.10 Paragraph
Headings.
The
paragraph or subparagraph headings are used for convenience of reference only
and do not define, limit or extend the scope or intent of the
paragraphs.
35.11 Definitions.
The
definitions set forth in Paragraph 1
and in
the Schedule are hereby made part of this Lease.
35.12 Exhibits. Exhibits A-1
through E
are
attached hereto and incorporated herein and made a part of this Lease for all
purposes:
|
Exhibit
Number
|
Description
|
|
|
Exhibit
A-1
|
Site
Plan
|
|
|
Exhibit
A-2
|
Premises
Floor Plan
|
|
|
Exhibit
B
|
Commencement
Date Agreement
|
|
|
Exhibit
C
|
Building
Rules and Regulations
|
|
|
Exhibit
D
|
Work
Letter
|
|
|
Exhibit
E
|
Building
Specifications
|
27
35.13 Notices.
(a) Tenant
will pay all rent to Landlord at the following address (or at such other place
as Landlord may hereafter designate in writing):
If
by
United States mail:
P.O.
Box
1863
Doylestown,
PA 18901
Or,
if by
air courier:
1574
Easton Road
Warrington,
PA 18976
(phone:
215-345-8083)
Tenant
will forward all notices to Landlord at the following address (or at such other
place as Landlord may hereafter designate in writing):
1574
Easton Road
Warrington,
PA 08976
with
a
copy of all notices to:
Robert
W.
Gundlach, Jr. Esquire
Fox
Rothschild LLP
102
North
Main Street
PO
Box
1589
Doylestown,
PA 18901-0700
(b) Landlord
will forward all notices to Tenant at the address set forth in the Schedule
until Tenant takes possession of the Premises, and thereafter at the Premises
or
at such other place within the continental United States as Tenant may hereafter
designate in writing. However, Landlord has no obligation to send any notice,
request, demand, consent, approval or other communication required or permitted
under this Lease to be given to Tenant, to more than 3 addresses, including
the
Premises.
(c) Any
notice provided for in this Lease must, unless otherwise expressly provided
herein, be in writing, and may, unless otherwise expressly provided, be given
or
be served (i) by hand delivery, (ii) by depositing such notice in the United
States mail, certified or registered mail with return receipt requested, postage
prepaid, or (iii) via reputable overnight air courier service.
(d) Notice
by
hand delivery will be deemed to have been given when actually delivered or
when
the tender of such delivery is refused. Notice by certified or registered mail
will be deemed to have been given on the third business day after the date
that
the notice is deposited into the mail, postage prepaid. Notice given by air
courier will be deemed given one business day after it is accepted by such
courier for next business day delivery.
(e) In
lieu
of Landlord or Tenant waiving the right to receive any notices, each party
hereby waives any technical defects as to form, substance and delivery in the
giving of any notices required by this Lease and by Pennsylvania Statutes so
long as the notice reasonably apprises the appropriate party of the general
nature of the reason for the giving of the notice and affords such party a
reasonable opportunity to cure, if applicable.
35.14 No
Presumption.
Landlord and Tenant understand, agree and acknowledge that (1) this Lease has
been freely negotiated by both parties, and (2) in any controversy, dispute
or
contest over the meaning, interpretation, validity or enforceability of this
Lease or any of its terms or conditions, there will be no inference, presumption
or conclusion drawn whatsoever against either party by virtue of that party
having drafted this Lease or any portion thereof.
28
35.15 Air,
Light, View.
This
Lease does not create, nor will Tenant have, any express or implied easement
for
or other rights to air, light or view over or about the Project or any part
thereof.
35.16 Joint
and Several Liability.
If more
than one person or entity is named in this Lease as Tenant, their liability
under this Lease will be joint and several.
35.17 Entire
Agreement.
This
Lease (including the exhibits attached hereto) contains the entire agreement
between the parties hereto, and no statement, representation, agreement or
promise made in connection with this Lease shall be binding upon Landlord or
Tenant unless set forth herein. This Lease may only be modified by an agreement
in writing signed by Landlord and Tenant.
35.18 Relationship
To Parties; No Third Party Beneficiaries.
Nothing
contained in this Lease will be deemed or construed by the parties hereto,
nor
by any third party, as creating the relationship of principal and agent or
of
partnership or of joint venture between the parties hereto, it being understood
and agreed that neither the method of computation of rent, nor any other
provision contained herein, nor any acts of the parties herein, will be deemed
to create any relationship between the parties hereto other than the
relationship of Landlord and Tenant. This
Lease is made for the sole benefit of Landlord and Tenant and, in the case
of
Paragraph 26
(Subordination to Mortgage), any present or future holder of a security interest
described in such Paragraph, and their respective successors and assigns
(subject to the limitation on assignment set forth above), and no other person
or persons shall have any right or remedy or other legal interest of any kind
under or by reason of this Lease. Whether or not either party hereto elects
to
employ any or all the rights, powers or remedies available to it hereunder,
such
party shall have no obligation or liability of any kind to any third party
by
reason of this Agreement or by reason of any of such party's actions or
omissions pursuant hereto or otherwise in connection with this Lease or the
transactions contemplated hereby.
35.19 Attorneys'
Fees.
Tenant
will pay, in addition to the rents and other sums agreed to be paid hereunder,
all collection and court costs incurred by Landlord and Landlord's reasonable
attorneys’ and paralegals' fees incurred for the collection of unpaid rentals or
the enforcement, defense or interpretation of Landlord’s rights under this
Lease, whether such fees and costs be incurred out of court, at trial, on
appeal, or in any bankruptcy, arbitration or other administrative
proceedings.
35.20 Authority;
Not Restricted.
Tenant,
and the person executing this Lease on behalf of Tenant, represent and warrant
that Tenant is duly formed in its state of organization, is in good standing
in
its state of organization and in the State identified in the Schedule and has
full corporate or partnership or limited liability company ("LLC")
power
and authority, as the case may be, to enter into this Lease and has taken all
corporate or partnership or LLC action, as the case may be, necessary to carry
out the transaction contemplated herein, so that when executed, this Lease
constitutes a valid and binding obligation of Tenant, enforceable against Tenant
in accordance with its terms. Landlord, and the person executing this Lease
on
behalf of Landlord, represent and warrant that Landlord is duly formed in its
state of organization, is in good standing in its state of organization and
in
the State of Pennsylvania, and has full partnership power and authority to
enter
into this Lease and has taken all partnership action necessary to carry out
the
transaction contemplated herein, so that when executed, this Lease constitutes
a
valid and binding obligation of Landlord, enforceable against Landlord in
accordance with its terms. Tenant
warrants and represents to Landlord that Tenant is not, and shall not become,
a
person or entity with whom Landlord is restricted from doing business with
under
regulations of the Office of Foreign Asset Control ("OFAC")
of the
Department of the Treasury (including, but not limited to, those named on OFAC's
Specially Designated and Blocked Persons list) or under any statute, executive
order (including, but not limited to, the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism), or other governmental action and is not and
shall not engage in any dealings or transaction or be otherwise associated
with
such persons or entities.
29
35.21 Confidentiality.
Tenant
acknowledges that the terms and conditions of this Lease are to remain
confidential for the Landlord’s benefit and may not be disclosed by Tenant or
its agents, servants, and employees to anyone, by any manner or means, directly
or indirectly, without Landlord’s prior written consent. The consent by Landlord
to any disclosures will not be deemed to be a waiver on the part of Landlord
of
any prohibition against any future disclosure. Tenant will indemnify, defend
upon request, and hold Landlord harmless from and against all costs, damages,
claims, liabilities, expenses, losses, court costs, and attorneys’ fees suffered
or claimed against Landlord, its agents, and employees, based in whole or in
part upon the breach of this Paragraph by Tenant, its agents, servants, and
employees. Notwithstanding the above, Tenant shall be entitled to disclosure
information regarding this Lease to its attorneys, accountants, banks and other
financial and business representatives and as required by law or applicable
regulation. The obligations of this Paragraph will survive the expiration or
earlier termination of this Lease.
35.22 Limitation
of Landlord’s Liability.
Anything contained in this Lease to the contrary notwithstanding, Tenant agrees
that Tenant shall look solely to the estate and property of Landlord in the
Building for the collection of any judgment or other judicial process requiring
the payment of money by Landlord. In no event shall Landlord nor any partners,
shareholders, members or other principals of Landlord, or any managers or
employees of Landlord be personally responsible or liable for the payment of
any
such judgment or process obtained against Landlord.
THIS
LEASE CONTAINS PROVISIONS FOR THE CONFESSION OF JUDGMENT FOR BOTH MONEY AND
POSSESSION, AND FOR THE WAIVER OF TRIAL BY JURY.
IN
WITNESS WHEREOF,
Landlord
and Tenant have executed this Lease in multiple original
counterparts.
| WITNESS: | ||
| TENANT: DISCOVERY LABORATORIES, INC. | ||
| Name: Cynthia Davis |
|
|
| By: | ||
|
Name: John Cooper |
||
| Its: Executive VP & CFO | ||
|
Date:
05/26/04
|
||
| WITNESS: | LANDLORD: STONE MANOR CORPORATE CENTER, L.P. | |
| By: SM Corporate Center, Inc. | ||
|
Name: Douglas
B. Newbert
|
|
|
| By: | ||
|
Name: Walter S. Smerconish |
||
| Title: President | ||
| Date: 05/27/04 | ||
30
EXHIBIT
A-1
SITE
PLAN
31
EXHIBIT
A-2
PREMISES
FLOOR PLAN
32
EXHIBIT
B
COMMENCEMENT
DATE AGREEMENT
It
is
hereby agreed among the parties to that certain Lease Agreement dated May __,
2004, for Suites 100 and 200, in the building commonly known as Office Building
A in Stone Manor Corporate Center, located on Easton Road in Warrington
Township, PA (the “Lease”) between Discovery Laboratories, Inc. (“Tenant”), and
Stone Manor Corporate Center, L.P. (“Landlord”) that:
| 1. |
The
Commencement Date of the Lease, as referred to in the Schedule of
the
Lease, is ____________.
|
| 2. |
The
provisions of Paragraph 31 of the Lease will apply to and are hereby
incorporated into this Agreement.
|
IN
WITNESS WHEREOF, Landlord and Tenant have executed this Commencement Date
Agreement as of the date hereof.
| WITNESS: | ||
| TENANT: DISCOVERY LABORATORIES, INC. | ||
| Name: |
|
|
| By: | ||
|
Name: |
||
| Its: | ||
|
Date:
|
||
| WITNESS: | LANDLORD: STONE MANOR CORPORATE CENTER, L.P. | |
| By: SM Corporate Center, Inc. | ||
|
Name:
|
|
|
| By: | ||
|
Name: Walter S. Smerconish |
||
| Title: President | ||
| Date: | ||
33
EXHIBIT
C
BUILDING
RULES AND REGULATIONS
Landlord
has adopted the following Building Rules and Regulations for the care,
protection and benefit of your Premises and the Building and for the general
comfort and welfare of all Tenants. These Rules and Regulations are subject
to
amendment by the Landlord from time to time.
1. Building
Hours and Access.
1.1 Normal
Building Hours are from 8:00 a.m. to 6:00 p.m., Monday through Friday, and
on
Saturday from 8:00 a.m. to 1:00 p.m., excluding legal holidays.
1.2 HVAC
service at times other than for Normal Building Hours will be furnished only
upon written request of Tenant delivered to the Landlord by 4:00 p.m. of the
business day (i.e., Monday through Friday excluding legal holidays) preceding
the day for which such usage is requested. Tenant will bear the entire cost
of
such additional service as such costs are determined by Landlord from time
to
time.
1.3 Building
entry at times other than for Normal Building Hours may be limited to a single
entrance.
1.4 Landlord
reserves the right to designate the time when freight, furniture, goods,
merchandise and other articles may be brought into, moved or taken from Premises
or the Building. Tenants must make arrangements with the management office
when
the freight elevator is required for the purpose of carrying any kind of
freight.
1.5 Landlord
reserves the right at all times to exclude loiterers, vendors, solicitors,
and
peddlers from the Building and to require registration of satisfactory
identification or credentials from all persons seeking access to any part of
the
Building outside ordinary business hours. Landlord will exercise its judgment
in
the execution of such control but will not be liable for the granting or refusal
of such access.
2. Building.
2.1 The
sidewalks, entry passages, corridors, halls, elevators, and stairways must
not
be obstructed by the Tenant or used by it for other than those of ingress and
egress.
2.2 The
floors, skylights and windows that reflect or admit light into any place in
the
Building must not be covered or obstructed by the Tenant.
2.3 Restroom
facilities, water fountains, and other water apparatus must not be used for
any
other purpose other than for which they were constructed, and no rubbish, or
other obstructing substances may be thrown therein, and the expense of any
breakage, stoppage, or damage resulting from a violation of this provision
by
Tenant or Tenant's officers, employees, agents, patrons, customers, licensees,
visitors, or invitees will be borne by Tenant.
2.4 Tenant
will not injure, or overload or deface the Building, the woodwork, or the walls
of the Premises, nor carry on upon the Premises any noxious, noisy or offensive
business, nor store in the Building or the Premises any flammable or odorous
materials.
2.5 Tenant,
its officers, agents, employees, patrons, customers, licensees, invitees, and
visitors will not solicit in the Project, nor will Tenant distribute any
handling or other advertising matter in automobiles parked in the Building's
parking facilities.
2.6 Landlord
will not be responsible for lost or stolen property, equipment, money, or any
article taken from the Premises, Building or parking facilities, regardless
of
how and when loss occurs.
34
2.7 Landlord
will have the right, exercisable upon written notice and without liability
to
Tenant, to change the name and street address of the Building.
2.8 Smoking
will not be permitted in the Building. Smoking will not be permitted in the
exterior Common Areas unless Landlord specifically designates a portion or
portions of the exterior Common Areas where smoking is to be permitted, in
which
case smoking will be permitted only in those portions of the exterior Common
Areas specifically designated by Landlord.
2.9 Tenant
shall not in any manner use the name of the Project for any purpose other than
that of the business address of the Tenant, or use any picture or likeness
of
the Project, in any letterheads, envelopes, circulars, notices, advertisements,
containers or wrapping material without Landlord’s express consent in
writing.
3. Doors
and Windows.
3.1 Tenant
entrance doors should be kept closed at all times in accordance with the fire
code.
3.2 The
Tenant may not put additional locks or latches upon any door without the written
consent of the Landlord.
3.3 All
signage at the entrance to the Premises will be in the standard graphics for
the
Building, and no other may be used or permitted on the Premises without
Landlord's prior written consent.
3.4 All
glass, locks and trimmings in or upon the doors and windows of the Building
will
be kept whole and when any part thereof is broken the same will be immediately
replaced or repaired and put in good repair.
3.5 Window
blinds of a uniform Building Standard color and pattern only will be used
throughout the Building to give uniform color exposure through exterior windows.
These blinds will remain in the lower position at all times to provide uniform
exposure for the outside.
4. Premises
Use.
4.1 The
Tenant may not install in the Premises any heavy weight equipment or fixtures
or
permit any concentration of excessive weight in any portion thereof without
first having obtained Landlord's written consent.
4.2 Tenant
may not operate any device which may emanate electrical waves which will impair
radio or television broadcasting or reception from or in the Building.
4.3 No
wires
of any kind or type (including but not limited to television or radio antennas)
may be attached to the outside of the Building and no wires may be run or
installed in any part of the Building without the Landlord's prior written
consent. Such wiring will be done by the electrician of the Building only,
and
no outside electrician will be allowed to do work of this kind unless by the
written permission of Landlord or its representatives.
4.4 If
Tenant
desires any signal, communication, alarm or other utility or service connection
installed or changed, such work will be done at the expense of Tenant, with
the
approval and under the direction of Landlord. Tenant will not utilize any
wireless communication equipment (other than usual and customary cellular
telephones and pagers), including antenna and satellite receiver dishes, within
the Premises, or the Building, without Landlord's prior written consent. Such
consent may be conditioned in such manner so as to protect Landlord's interest
and the interest of the Building and the other tenants therein.
4.5 No
painting may be done, nor may any alterations be made, to any part of the
Building by putting up or changing any partition, doors or windows, nor will
there be any nailing, boring, or screwing into the woodwork or plastering,
nor
will any connection be made to the electric wires or electric fixtures without
the consent in writing on each occasion of Landlord.
35
4.6 All
contractors or technicians performing work for Tenant within the Premises,
Project or parking facilities will be referred to Landlord for approval in
accordance with the Lease before performing such work. This will apply to all
work including, but not limited to, installation of telephones, telegraph
equipment, electrical devices and attachments, and all installations affecting
floors, walls, windows, doors, ceiling, equipment or any other physical feature
of the Project, leased Premises or parking facilities. None of this work may
be
done by Tenant without Landlord's prior written approval.
4.7 Tenant
will not cause or permit any unusual or objectionable odors to be produced
upon
or permeate from the Premises. Such odors include, but are not necessarily
limited to, cooking fumes, food odors, cleaning agents, chemicals, or substances
of any kind. If Landlord receives a complaint regarding objectionable odors,
the
complaint will be investigated and if necessary, the offender will be asked
to
cease and desist from the action causing the objectionable odor(s).
4.8 Tenant
shall not bring into or keep within the Building any motor vehicle or
bicycle.
36
EXHIBIT
D
WORK
LETTER
1. PLANNING.
Tenant
will engage an interior office space planner ("Space
Planner"),
subject to Landlord's prior written approval. Tenant
will cause the Space Planner to prepare a detailed space plan (the "Space
Plan")
for
the Work (hereinafter defined). The Space Plan must indicate among other
things:
a. Special
loading, such as the location of file cabinets or special equip-ment.
b. Openings
in the walls or floors.
c. Special
electrical, air conditioning or plumbing work.
d. Location
and dimensions of telephone equipment rooms, and tele-phone and electrical
outlets.
e. Partitions
- locations and type, including doors and non-Building Standard hardware.
f. Special
cabinet work or other millwork items.
g. Variations
to standard ceiling heights.
h. Color
selection of painted areas.
i. Selection
of floor covering and any special wall covering.
Landlord
will review the Space Plan and either approve or disapprove the Space Plan.
If
Landlord does not approve the Space Plan, Landlord will inform Tenant in writing
of its objections and Tenant will revise the same and deliver a corrected
version to Landlord for its approval. The approval and revision process for
the
revised Space Plan will be the same as described in the previous 2 sentences.
After
the
Space Plan has been approved by Landlord, Tenant will engage a licensed
architect (the "Architect")
(who
may be the same as the Space Planner), subject to Landlord's written approval.
Tenant or the Architect will also engage such licensed engineering firms
("Engineers")
as may
be required or appropriate in connection with preparing mechanical, electrical,
plumbing, HVAC or other plans and specifications, all of whom will be subject
to
Landlord's written approval. Tenant will cause the Architect and Engineers
to
prepare permittable drawings, and final construction drawings and specifications
(the "Plans")
of the
Work and will, within the time frames set forth in Paragraph 16 of the Addendum
to Lease, deliver 3 copies of same to Landlord for its approval. The Plans
will
consist of fully dimensioned and complete sets of plans and specifications,
including detailed architectural, structural, mechanical, electrical and
plumbing plans for the Work, and will include, in addition to all items required
to be included in the Space Plan, the following, to the extent applicable:
(i)
all electrical outlet locations, circuits and anticipated usage therefore,
(ii)
reflected ceiling plan, including lighting, switching and special ceiling
specifications, (iii) duct locations for HVAC equipment, (iv) details of all
millwork, (v) dimensions of all equipment and cabinets to be built in, (vi)
furniture plan showing details of space occupancy, (vii) keying schedule
(Premises must be keyed to permit entry by Building master key), if any, (viii)
lighting arrangement, (ix) special HVAC equipment and requirements, (x) weight
and location of heavy equipment, and anticipated loads for special usage rooms,
(xi) demolition plan, (xii) partition construction plan, (xiii) all requirements
under the Americans With Disabilities Act and other applicable acts, laws,
or
governmental rules or regulations pertaining to persons with disabilities,
and
all other applicable governmental requirements, and (xiv) final finish
selections, and any other details or features requested by the Architect or
Engineers or Landlord in order for the Plans to serve as a basis for contracting
the Work. The Plans will be substantially consistent with the Space Plan without
any material changes.
37
For
purposes of this Work Letter, the "Work"
means:
(A) purchase and installation of the improvements and items of work shown on
the
final Architectural Plans and Engineering Plans, and (B) any demolition,
preparation or other work required in connection therewith.
2. COST
OF
THE WORK; ALLOWANCE.
2.1 Cost
of The Work.
Except
for the Allowance to be provided by Landlord as described below, Tenant will
pay
all costs (the "Cost
of the Work")
associated with the Work whatsoever, including, without limitation, all costs
for or related to:
a. the
so-called "hard costs" of the Work, including, without limitation, costs of
labor, hardware, equipment and materials, contractors' charges for overhead
and
fees (including a contractor’s fee of 4%), and so-called “general conditions"
(including rubbish removal, utilities, freight elevators, hoisting, field
supervision, building permits, occupancy certificates, inspection fees, utility
connections, bonds, insurance, and sales taxes); and
b. the
so-called "soft costs" of the Work, including, without limitation, the Space
Plans, the Architectural Plans, and the Engineering Plans, and all revisions
thereto, and any and all engineering reports or other studies, reports or tests,
air balancing or related work in connection therewith.
Landlord
will furnish Tenant with written estimates of the Cost of the Work within 15
business days after receipt by Landlord of the Engineering Plans and the
Architectural Plans, whichever is later. Landlord
shall be required to bid out the portion of the Work consisting of the dry-wall
and metal studs to two (2) separate contractors.
If
Tenant fails to approve or disapprove in writing such estimates within 3
business days after Tenant's receipt of such estimates, the estimates will
be
deemed approved by Tenant in all respects, and Landlord may complete the Work
without further authorization or approval of Tenant. If Tenant disapproves
the
cost of such estimates within the required time, Tenant may propose
modifications to the Architectural Plans (subject to Landlord's approval) in
order to modify the cost of the Work. Following any such modifications to the
Architectural Plans, and any resulting changes to the Engineering Plans,
Landlord will submit to Tenant revised cost estimates. Tenant shall also have
the right, to be exercised with said 15 business day period, to require Landlord
to bid out the Work to 1 additional contractor recommended by Tenant. Any delay
in the completion of the Work (x) caused by Tenant's disapproval of the initial
or any subsequent cost estimates, (y) caused by any such revisions to the
Architectural Plans or Engineering Plans or (z) caused by Tenant requiring
Landlord to bid out the Work to 1 additional contractor recommended by Tenant,
will constitute a Tenant Delay. At Tenant’s request, Landlord shall make
available for inspection information relating to the bidding of the Work.
2.2 Allowance.
Landlord will provide a construction allowance (the "Allowance")
of
up to
the amount of the Allowance set forth in the Schedule to the Lease toward
the Cost of the Work. The Allowance may not be used for any other purpose,
such
as, but not limited to, furniture, trade fixtures or personal property. If
all
or any portion of the Allowance is not used, Landlord will be entitled to the
savings and Tenant will receive no credit therefor.
2.3 Payment.
The
Cost of the Work in excess of the Allowance will be borne by Tenant and will
be
due and payable to Landlord by Tenant as and when billed from time to time.
Tenant will pay Landlord the Cost of the Work, minus the Allowance, as
follows:
a. An
amount
equal to the estimated total cost of the Work, minus the Allowance, will be
paid
to Landlord before commencement of the Work, and
b. An
amount
equal to the unpaid balance, if any (over the Allowance), of the total Cost
of
the Work will be paid to Landlord upon substantial completion of the Work,
but
in no case later than initial occupancy by Tenant.
38
3. COMMENCEMENT
OF LEASE; RENT. Subject to the other terms and conditions of this Work Letter
and the Lease, Landlord will proceed diligently and use reasonable efforts
to
cause the Work to be substantially completed on or before the Estimated
Commencement Date set forth in the Lease. Unless a Tenant Delay (defined below)
occurs, the Lease Term and Tenant's obligation to pay rent under the Lease
will
not commence until the Work has been substantially completed, as reasonably
determined by Landlord. If Landlord fails to substantially complete the Work
by
the Commencement Date set forth in the Lease and any Tenant Delay (defined
below) occurs, then the term of the Lease and Tenant's obligation to pay rent
under the Lease will commence on the date on which the Work would have been
substantially completed but for the Tenant Delay, as reasonably determined
by
Landlord. All work to be done in the Premises, including, without limitation,
the Work, will be subject to Land-lord's approval, and no work may be undertaken
in the Premises until such approval is given. For purposes of this Lease, each
one or more of the following constitutes a "Tenant
Delay":
a. Tenant's
or the Space Planner's failure to devote the time or furnish the information
required under Paragraph 1 in connection with the Space Plan or the
Architectural Plans; or
b. Tenant's
unreasonable disapproval of cost estimates for the Work; or
c. Tenant's
request for materials, finishes or installations constituting "long-lead items,"
as reasonably determined by Landlord; or
d. Tenant's
request for changes in the Work, or in the Architectural Plans or Engineering
Plans (notwithstanding Landlord's approval of any such changes), including,
without limitation, any changes in Architectural Plans or Engineering Plans
made
at the request of Tenant upon Tenant's receipt of the cost estimates in
accordance with Paragraph 2; or
e. Any
other
act or omission by Tenant or its agents, including, without limitation, the
Space Planner, which directly or indirectly delays completion of the Work or
Landlord's delivery to Tenant of possession of the Premises.
4. ACCESS
BY
TENANT PRIOR TO COMMENCEMENT OF TERM. Land-lord, at Landlord's reasonable
discretion, may permit Tenant and Tenant's agents to enter the Premises prior
to
the date specified as the Commencement Date of the Lease in order that Tenant
may make the Premises ready for Tenant's use and occupancy. If Landlord permits
such entry prior to the Commencement Date, such permission will constitute
a
license only and not a lease and such license will be conditioned upon: (a)
Tenant working in harmony and not interfer-ing with Land-lord and Landlord's
agents, contractors, workmen, mechanics and suppliers in doing the Work, or
the
Work in the Building or with other tenants and occupants of the Build-ing;
(b)
Tenant obtaining in advance Landlord's approval of the contractors pro-posed
to
be used by Tenant and depositing with Landlord in advance of any work (i)
security satisfactory to Landlord for the completion thereof, (ii) general
con-tractor's affidavit for proposed work and waiver of lien from general
contrac-tor, all subcontractors and suppliers of material; (c) Tenant furnishing
Landlord with such proof of insurance and other security as Landlord may
require. Landlord will have the right to withdraw such license for any
reasonable reason upon 24 hours' notice to Tenant. Tenant agrees that Landlord
will not be liable in any way for any injury, loss or damage which may occur
to
any of Tenant's property placed or installations made in the Premises prior
to
the Commencement Date, the same being at Tenant's sole risk and Tenant agrees
to
protect, defend, indemnify and save harmless Landlord from all liabilities,
costs, damages, fees and expenses arising out of or connected with the
activities of Tenant or its agents, contrac-tors, suppliers or workmen in or
about the Premises or the Project. Tenant further agrees that any entry and
occupation permitted under this paragraph will be governed by Paragraph 11
of the Lease and all other terms of the Lease.
5. MISCELLANEOUS.
A. The
Premises must be keyed to permit entry by the Building master key.
39
B. Except
to
the extent otherwise indicated herein, the initially capitalized terms used
in
this Work Letter will have the meanings assigned to them in the Lease.
C. The
terms
and provisions of this Work Letter are intended to supple-ment and are
specifically subject to all the terms and provisions of the Lease.
D. This
Work
Letter may not be amended or modified other than by supplemental written
agreement executed by authorized representatives of the parties
hereto.
6. PRELIMINARY
CORE AND SHELL SPECIFICATIONS. Landlord shall, at Landlord’s sole cost and
expense and not as part of the Cost of the Work, deliver the Premises to Tenant
in accordance with the specifications attached to the Lease as Exhibit
E.
40
EXHIBIT
E
BUILDING
SPECIFICATIONS
STONE
MANOR CORPORATE CENTER
NEW
60,000 SF (+/-) THREE-STORY OFFICE BUILDING A
1574
EASTON ROAD, WARRINGTON, PA
PRELIMINARY
CORE & SHELL SPECIFICATIONS
MARCH
12, 2003
This
specification is to be read in conjunction with preliminary drawings dated
6/11/02 by
Thomas
E. Hall & Associates, Inc.
1.
GENERAL
| A. |
The
project consists of a new Class A spec office building with three
(3)
office levels. The core and shell, all sitework, landscaping and
underground utilities, will be provided for a complete development
package. By definition, the shell building shall include a completed
heated and cooled core, including vertical transportation, toilet
and
mechanical rooms, a public lobby and core areas. Building: approximately
60,000 SF. Each floor approximately 20,000
SF.
|
2.
EXTERIOR
SKIN
| A. |
The
office building skin shall be a combination of brick and decorative
block
on metal stud back up with aluminum framed insulated glass
windows.
|
| B. |
The
building glass shall be by PPG and shall be one inch insulated, tinted,
low-e (low emissary) with 400 and 1600 series SSG curtain wall by
Kawneer
(451T).
|
| C. |
The
building envelope shall be thermally insulated to provide external
wall
system components with a minimum R-value of R-19. The overall building
envelope should meet the performance requirements of ASHRAE Standard
1980
"Energy Conservation in New Building
Design."
|
| 3. |
EXTERIOR
LIGHTING
|
| A. |
Building
entrances to be illuminated with decorative brushed aluminum wall
sconces.
|
| B. |
Building
facades to be flood lit by white pole mounted fixtures on timers,
strategically placed around the
building.
|
| 4. |
ROOF
|
| A. |
The
roof covering shall be mechanically fastened EPDM membrane over rigid
insulation sloped to roof drains.
|
| B. |
The
roof system components shall provide a minimum R-value of R-30. Loading
criteria shall be 30 lbs live load and 20 lbs dead
load.
|
| C. |
Roof
access shall be provided via roof
hatch.
|
| 5. |
INTERIOR
PUBLIC AREAS / CORE
SERVICES
|
| A. |
The
building will feature
dramatic two story and one story entrance lobbies with painted gypsum
board ceiling, granite tile floor, fabric wall covering, wood veneer
panels, and stone base.
|
41
| B. |
Upper
Floor Lobbies:
Wood/fabric wrapped panels in the elevator lobbies with painted gypsum
board ceiling, vinyl covering on walls, carpeted floors and wood
base.
|
| C. |
Lobbies:
1st&
2nd
floor lobbies shall be enhanced by an open stair with decorative
stainless
steel handrails.
|
| D. |
Restrooms:
2' x 4' x 5/8" second look acoustical ceiling, ceramic tile on floors
and
at wet walls, vinyl wall covering at other walls with ceramic tile
base.
Corian counter tops and full height GWB partitions with painted louvered
doors shall be provided, as well as recessed and semi-recessed toilet
accessories and full width unframed mirrors. Fixture counts should be
based on the code required minimums with upgraded capacity to accommodate
the actual occupancy of the
building.
|
| E. |
Lighting
for restrooms
-
Lighting will be accomplished with a combination of recessed soffit
lighting as well as decorative wall mounted fixtures over counter
tops.
|
| F. |
Janitors
Rooms
-
There shall be a minimum of one janitor room per floor equipped with
utility sink, storage shelving, mop racks and receptor properly sized
for
ability to store all related equipment and
supplies.
|
| G. |
Perimeter
interior shall be metal studs and insulation
only.
|
| H. |
Drinking
fountains shall be provided to meet occupancy needs as well as comply
with
all applicable codes and provisions of the
ADA.
|
| I. |
Stair
and elevator shafts to be CMU.
|
| J. |
Interior
"hard core" area partitions on all floors shall be constructed from
floor
to underside of deck above with 5/8" gypsum wallboard attached to
each
side of 3-5/8" wide 25 gauge metal studs located at 16" on center
(similar
for fire rated and/or shaft wall).
|
| K. |
Exterior
doors shall be medium stile aluminum and glass to match window system
with
swing assist.
|
| L. |
Two
(2) hydraulic elevators shall be provided for passenger use. The
elevators
shall be two 3,000 lb. capacity with door and frame finishes to be
brushed
stainless steel. Cab finishes will consist of Otis Elevators standard
Wilsonart laminate wall panels and shall be ADA compliant. Elevator
speeds
are 125 / 150 fpm. Elevator to have 9’-0”interior ceiling
height.
|
| 6. |
INTERIOR
LIGHTING
|
| A. |
Lobbies
will be illuminated with dramatic pendant fixtures and recessed down
lighting through out.
|
| 7. |
STRUCTURAL
|
| A. |
The
building shall be constructed of structural steel with composite
metal
deck and concrete floors. The foundation systems will be appropriate
to
the site specific subsurface
conditions.
|
| B. |
The
floors shall be designed to accommodate a 100 lb. of live load.
|
| C. |
The
floor to floor height of the office building shall be approximately
13’-6”
to accommodate a minimum clear ceiling height of approximately 9'-0"
after
design build HVAC coordination is
complete.
|
42
| 8. |
HEATING,
VENTILATING, AND AIR CONDITIONING
-
assumed to be design build.
|
Design
base building engineering systems to include:
| o |
VAV
base building system.
|
| o |
Base
Building Rooftop units (electric or
gas)
|
| o |
Vertical
shafts and medium pressure duct work
installed.
|
| o |
VAV
at lobby and toilets.
|
| o |
VAV
boxes throughout floors 1 / 1,800
SF.
|
| o |
Base
Building fire protection.
|
| o |
Incoming
electrical service, switchgear, electrical risers, local panels at
each
floor.
|
| o |
Primary
switchgear, incoming utility
services.
|
| A. |
HVAC
Design Criteria
|
| 1. |
The
HVAC system shall be designed based on the following
criteria:
|
| a) |
Outdoor
design conditions:
|
i. Summer
93°F
DB and
75°F
WB
ii. Winter
10°F
DB
| b) |
Indoor
design conditions:
|
i. Office
Space:
75°F
DB 50%
RH - Summer - Occupied
70°F
DB 35%
RH - Winter - Occupied
Occupancy
based on office load of one person per 250 USF.
| c) |
Ventilation
Requirements: (Per ASHRAE 62-1989). Restrooms will be provided with
1 CFM
per square foot exhaust and supply by air and
infiltration.
|
| d) |
HVAC
system shall have approximately 195 (±58,000 RSF ÷ 300 SF/ton = 195 tons)
tons of roof top mounted units. System shall serve approximately
300 SF
per ton and be equipped with DDC controls, economizers and outside
air
intakes. Heat loads exceeding design loads will be accommodated by
separate units at Tenant costs.
|
| e) |
Occupancy
based on office load of one person per 250
SF.
|
| 9. |
ELECTRICAL
SYSTEMS
-
assumed to be design build.
|
| A. |
The
entire electrical distribution system shall comply with the National
Electrical Code and any applicable local codes. Building equipped
with a
minimum of 1,000 KVA 1600 amp service fed by electric utility company
feeds. 480/277 volt three phase four wire
service.
|
| B. |
Emergency
System
|
| 1. |
Provide
battery pack system or generator for life safety system; for night
lights,
exit lights, and emergency lights.
|
C.
Wattage
|
Watts
/ square feet - General
Power
|
7
|
|||
|
Lighting
and general task
|
3
|
|||
|
HVAC
|
15
|
|||
|
TOTAL
WATTS/SF
|
25
|
43
D.
Fire
Alarm System
| 1. |
The
building will be equipped with a class A multiplexed, electrically
supervised fire alarm system with smoke detection in all common areas
and
HVAC equipment tied into audible and visual alarms. The system will
comply
with IBC and ADA requirements.
|
| 10. |
PLUMBING
-
assumed to be design build.
|
| A. |
All
work shall conform to the latest IBC National Plumbing Code and local
authorities having jurisdiction.
|
| B. |
Provide
domestic water system providing a minimum of 25 psi at each plumbing
fixture with water velocities not exceeding five feet per second
(5 FPS)
for quiet operation.
|
| C. |
Electric
water coolers shall be self-contained electric, stainless steel bowl
meeting ADA requirements.
|
| D. |
Hot
water heaters shall provide hot water at 100-105°
F
for general usage.
|
| E. |
All
plumbing fixtures shall be vitreous china, commercial quality. Water
closets and urinals shall be flush valve type, siphon jet, wall hung.
Lavatories shall be integral bowl, furnished with Corian vanity tops.
All
lavatory trim shall meet ADA
requirements.
|
| 11. |
FIRE
PROTECTION
-
assumed to be design build.
|
| A. |
Design
Criteria
|
| 1. |
The
building will be equipped with a fully automated water source fire
suppression system in accordance with the
following:
|
| a) |
NFPA
13 (1993) - Installation of Sprinkler
Systems.
|
| b) |
International
Building Code 2000
|
| c) |
Local
Fire Marshal.
|
B. Automatic
sprinklers shall be hydraulically designed for light, ordinary hazard in office
areas, mechanical rooms and storage areas. Sprinklers shall be the
following:
| 1. |
Non
Public Spaces: semi-recessed type sprinkler
heads.
|
| 2. |
General
Public Area: concealed type sprinkler
heads.
|
| C. |
Landlord
shall be responsible for the complete installation to code for an
unfinished, vacant space with sprinkler heads turned up. Tenant shall
be
responsible, at its sole cost and expense, for pipe branches and
additional heads to accommodate Tenant’s floor plan.
|
| 12. |
LANDSCAPING
-
assumed to be design build.
|
| A. |
Landscaping
includes new site landscaping treatment including shrubs, trees and
extensive flowerbeds at
entranceways.
|
| 13. |
MISCELLANEOUS
|
ADA
Compliance- The entire building and route access from parking lot handicapped
spaces to building entrance will be in accordance with the Americans with
Disabilities Act (ADA) including elevators and lobbies.
44
ADDENDUM
TO OFFICE LEASE AGREEMENT
This
Addendum is hereby attached to and made a part of that certain Office Lease
Agreement (the "Lease") between STONE
MANOR CORPORATE CENTER, L.P.
("Landlord") and DISCOVERY
LABORATORIES, INC.,
a
Pennsylvania corporation
("Tenant") for the premises shown on Exhibit
"A-2"
of the
Lease at Stone Manor Corporate Center and is executed on even date with the
Lease.
1. Conflict;
Definitions.
In the
event there is a conflict between the provisions of this Addendum and any other
part of the Lease, the provisions of this Addendum shall modify and supersede
such other part of the Lease to the extent necessary to eliminate any such
conflict. All terms which are defined in any other part of the Lease shall
have
the same meaning when used in this Addendum.
2. Completion
of the Landlord’s Work.
(a) Landlord
agrees to use reasonable efforts and due diligence to “substantially complete”
the work set forth in the Work Letter (the “Work”) by September 27, 2004 (the
“Construction Deadline”), subject to Tenant Delay and the force majeure
provisions contained in the Lease. As used herein, the term “substantially
complete” shall mean the date that (i) the
Work
is completed to a state to permit Tenant to reasonably and conveniently use
and
occupy the Premises for the conduct of its business, even though the
installation of minor details, decorations and mechanical adjustments by
Landlord and any improvements to be performed by Tenant, remain to be completed,
and (ii) a certificate of occupancy has been issued by Warrington Township
so as
to permit Tenant to use and occupy the Premises for the conduct of its business,
whichever is later.
(b) If
Landlord fails to substantially complete the Work by the Construction Deadline,
subject to Tenant Delay and the force majeure provisions contained in the Lease,
then Tenant shall have the right to terminate the Lease under and subject to
the
following terms and conditions:
(i) Tenant
shall first be required to deliver written notice to Landlord specifying
Landlord's non-compliance with its obligations under this Paragraph
2(b)
(which
notice may not be delivered until after the Construction Deadline) and give
Landlord 30 days in which to substantially complete the Work. If Landlord
substantially completes the Work within 30 days after receipt of Tenant's notice
under this Paragraph
2(b),
then
Tenant shall forfeit its right to terminate the Lease under this Paragraph
2.
(ii) If
Landlord fails to substantially complete the Work within the aforesaid 30-day
grace period, then Tenant shall have the right, by delivery of written notice
to
Landlord at any time after the expiration of the aforesaid 30-day grace period
but prior to Landlord's substantial completion of the Work, as Tenant's sole
and
exclusive remedy, to terminate the Lease; whereupon the Lease shall terminate
on
the date of Landlord's receipt of the aforesaid termination notice. Tenant's
failure to timely comply with the notice provisions contained in this
Subparagraph (ii) shall be deemed to constitute a waiver of Tenant's right
to
terminate the Lease under this Paragraph
2.
3. Termination
Option.
Tenant
shall have the option to terminate the Lease (the “Termination Option”) at any
time after the 39th
month
(the “Termination Date”), provided that (a) Tenant gives written notice to
Landlord (the “Termination Notice”) at least 9 months prior to the Termination
Date of Tenant’s desire to exercise the Termination Option, and (b) Tenant pays
Landlord, at the time Tenant delivers the Termination Notice, a lease
termination fee equal to (i) the sum of the unamortized cost of Landlord’s Work,
amortized on a straight line basis at a rate of 8% over the initial term of
the
Lease and (ii) unamortized commissions paid by Landlord in connection with
the
Lease amortized on a straight line basis at a rate of 8% over the initial term
of the Lease, plus:
| · |
6
months of Base Rent if the Lease is terminated between months 40
through
47 inclusive; or
|
45
| · |
5
months of Base Rent if the Lease is terminated between months 48
through
55 inclusive;
|
| · |
4
months of Base Rent if the Lease is terminated between months 56
through
60 inclusive;
|
| · |
3
months of Base Rent if the Lease is terminated in month
61;
|
| · |
2
months of Base Rent if the Lease is terminated in month 62;
or
|
| · |
1
month of Base Rent if the Lease is terminated in month
63.
|
Tenant’s
failure to comply with the aforesaid requirements shall be deemed a waiver
of
Tenant’s right to exercise the Termination Option. If Tenant exercises the
Termination Option in accordance with the terms of this Paragraph
3,
then
the Lease shall terminate on the Termination Date specified in the Termination
Notice and Tenant shall not be liable for the payment of Rent or any other
sums
due under the Lease after the Termination Date.
4. Electricity
and Gas.
Notwithstanding anything to the contrary set forth in Paragraph
7.2
of the
Lease:
(a) Tenant
shall pay for all electricity and gas used in the Premises.
(b) Landlord
shall install separate meters to measure the electricity and gas used by Tenant
in the Premises. Landlord and Tenant shall split the cost of installing the
separate meters, provided that Tenant’s cost shall be capped at Six Thousand Two
Hundred Fifty Dollars ($6,250.00).
5. Right
of First Offer.
(a) Provided
that Tenant is not in default under the Lease and subject to the terms and
conditions of this Paragraph
5,
Tenant
shall have the right to lease any additional space that may become available
for
lease on the 3rd
floor of
the Building during the term of the Lease (the “Available Space”), at any time
up to, but within ten (10) days after, Tenant's receipt of written notice from
Landlord that Landlord intends to begin to market the Available Space for lease,
by delivery of written notice (the "Expansion Notice") to Landlord specifically
electing such right. Tenant must lease all of the Available Space and may not
elect to lease a portion thereof.
(b) In
the
event that Tenant notifies Landlord of its election to lease the Available
Space
in accordance with Paragraph
5(a)
above,
then Landlord and Tenant shall attempt to negotiate the terms upon which
Landlord would be willing to lease the Available Space to Tenant (i.e., rent,
term, construction allowance, etc.). If Landlord and Tenant are unable to
mutually agree upon such lease terms within ten (10) days after Landlord's
receipt of the Expansion Notice, then Tenant shall have no further rights to
lease the Available Space and Landlord may thereafter lease the Available Space
without having to re-offer the Available Space to Tenant. If Landlord and Tenant
are unable to mutually agree upon such lease terms, Landlord shall be free
to
lease the Available Space to any third party provided that: (i) the base rent
(excluding any tenant allowances and other concessions given to new tenants)
in
such lease is at least 90% of the base rent (excluding any tenant allowances
and
other concessions given to new tenants) offered to Tenant, and (ii) the other
material terms in such lease are substantially similar to the lease terms (other
than base rent) offered to Tenant.
(c) Landlord
shall be under no obligation to offer any space for lease to Tenant under this
Paragraph
5
that is
vacant on the date of this Lease or renewed by an existing
occupant.
(d) Tenant’s
rights under this Paragraph
5
are
subject to the rights of any tenant as of the date hereof.
46
6. Letter
of Credit.
Notwithstanding anything to the contrary set forth in Paragraph
32
of the
Lease:
(a) At
Tenant’s election, in lieu of posting the security deposit set forth in the
Lease, Tenant at any time simultaneously with, or following the execution of
the
Lease, shall deliver to Landlord an irrevocable letter of credit, payable in
U.S. Dollars, running in favor of Landlord and issued by a bank insured by
the
Federal Deposit Insurance Corporation, in the amount of the required security
deposit. The letter of credit shall be irrevocable for the term of the Lease
and
shall provide that it is automatically renewable for a period ending not earlier
than sixty (60) days after the expiration of the term hereby demised without
any
action whatsoever on the part of Landlord; provided that the issuing bank shall
have the right not to renew said letter of credit on written notice to Landlord
not less than sixty (60) days prior to the expiration of the then current term
thereof (it being understood, however, that the privilege of the issuing bank
not be renew said letter of credit shall not, in any event, diminish the
obligation of Tenant to maintain such irrevocable letter of credit with Landlord
through the date which is sixty (60) days after the expiration of the term
hereby demised).
(b) The
form
and terms of the letter of credit (and the bank issuing the same) shall be
acceptable to Landlord and shall provide, among other things, in effect
that:
(i) Landlord,
or its then managing agent, shall have the right to draw down an amount up
to
the face amount of the letter of credit upon the presentation to the issuing
bank of Landlord’s (or Landlord’s then managing agent’s) statement that such
amount is due to Landlord under the terms and conditions of the Lease, it being
understood that if Landlord or its managing agent be a corporation, partnership
or other entity, such statement shall be signed by an officer (if a
corporation), a general partner (if a partnership), or any authorized party
(if
another entity).
(ii) The
letter of credit will be honored by the issuing bank without inquiry as to
the
accuracy thereof and regardless of whether the Tenant disputes the content
of
such statement.
(iii) In
the
event of a transfer of Landlord’s interest in the Building, Landlord shall have
the right to transfer the letter of credit to the transferee and thereupon
the
Landlord shall, without any further agreement between the parties, be released
by Tenant from all liability therefore, and it is agreed that the provisions
thereof shall apply to every transfer or assignment of said letter of credit
to
a new Landlord.
(c) If,
as a
result of any such application of all or any part of such security, the amount
secured by the letter of credit shall be less than the required security
deposit. Tenant shall forthwith provide Landlord with additional letter(s)
of
credit in an amount equal to the deficiency.
(d) Tenant
further covenants that it will not assign or encumber said letter of credit
or
any part thereof and that neither Landlord nor its successors or assigns will
be
bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance.
(e) Without
limiting the generality of the foregoing, if the letter of credit expires
earlier than sixty (60) days after the expiration of the term of this Lease,
or
the issuing bank notifies Landlord that it shall not renew the letter of credit,
Landlord will accept a renewal thereof or substitute letter of credit (such
renewal or substitute letter of credit to be in effect not later than thirty
(30) days prior to the expiration thereof), irrevocable and automatically
renewable as above provided to sixty (60) days after the end of the term of
the
Lease upon the same terms as the expiring letter of credit or such other terms
as may be acceptable to Landlord. However, (i) if the letter of credit is not
timely renewed or a substitute letter of credit is not timely received, (ii)
or
if Tenant fails to maintain the letter of credit in the amount and terms set
forth in this Paragraph, Tenant, at least thirty (30) days prior to the
expiration of the letter of credit, or immediately upon its failure to comply
with each and every term of this Paragraph, must deposit with Landlord cash
security in the amounts required by, and to be held subject to and in accordance
with, all of the terms and conditions set forth in the Lease for security
deposits, failing which Landlord may present such letter of credit to the bank,
in accordance with the terms of this Paragraph, and the entire sum secured
thereby shall be paid to Landlord, to be held by Landlord as provided in this
Paragraph, and as provided in the Lease for security deposits.
47
(f) Provided
that no Event of Default shall have occurred and there is no existing
circumstance which with the passage of time, or the giving of notice or both,
would give rise to an Event of Default, the security deposit (whether posted
in
cash or in the form of a letter of credit) shall be reduced to $400,000 on
the
first day of the 40th
month
after the Commencement Date.
7. Operating
Expenses.
Notwithstanding anything to the contrary set forth in Paragraph
6.1
of the
Lease:
(a) Landlord
agrees that any services provided to the Building by Landlord (or any affiliate
of Landlord) and included within the Operating Expenses shall be provided at
a
cost
which is both commercially reasonable and comparable with that which could
be
obtained from an independent contractor or supplier of such
services.
(b) Real
estate taxes shall not include the federal, state or local income taxes owed
by
the parties constituting Landlord.
(c) If
Landlord elects, in Landlord's sole discretion, to pay a real estate tax bill
for the Building prior to the due date, then Landlord shall pass along any
discounts received from such early payment within the calculation of Operating
Expenses.
(d) Operating
Expenses shall not include: (i) capital expenditures to prepare space for
occupancy by a new tenant; (ii) repairs occasioned by insured casualties to
the
extent of the insurance proceeds received by Landlord; (iii) leasing
commissions, advertising costs or other expenses incurred in leasing or
procuring new tenants or attorneys’ fees which are incurred in connection with
negotiations or disputes with tenants or prospective tenants; (iv) costs of
decorating or redecorating a tenant’s space; (v) costs of relocating a tenant to
a new space; (iv) repairs or rebuilding necessitated by a condemnation to the
extent of the proceeds received by Landlord; (vi) debt service payments; (vii)
amounts in excess of fair market rates with respect to any service provided
by
an affiliate of Landlord; (viii) management fees in excess of One Dollar ($1.00)
per square foot; (ix) costs incurred due to violations by Landlord of any of
the
terms and conditions of any lease; (x) any particular items and services for
which Tenant or any other tenant otherwise reimburses Landlord by direct payment
over and above Base Rental; and (xi) any fines or penalties incurred due to
violations by Landlord of applicable legal requirements relating to the Building
or the Project and any expenses resulting directly from the gross negligence
or
intentional misconduct of Landlord; (xii) costs of abating or otherwise
remediating any hazardous materials, present in or under the Building as of
the
date hereof, or correcting violations of existing legal requirements existing
as
of the date hereof; (viii) cost of art work in Building Common Areas; (xiv)
any
wages, salaries or other benefits paid to any employee not employed for or
on
behalf of the Building or the Project; and (xv) salaries and benefits of
officers of Landlord.
8. Extension
Option.
(a) Provided
that Tenant is not in default under the Lease, Tenant shall have the option
to
extend the term of the Lease for one (1) additional term of five (5) years
(the
"Extension Option"), upon the same terms and conditions set forth in the Lease
for the initial term, except that (a) the Base Rental shall be adjusted as
hereinafter set forth, (b) Tenant shall not be entitled to the completion of
any
fit-up work as provided for in the Lease, and (c) Tenant shall have no other
rights to extend the term of the Lease. In the event that Tenant decides to
exercise the Extension Option, Tenant shall do so by giving written notice
thereof to Landlord at least nine (9) months prior to the termination of the
initial term of the Lease. The failure of Tenant to give such notice to Landlord
at least nine (9) months prior to the termination of the initial term of the
Lease shall be deemed a waiver by Tenant of such option to extend the term
of
the Lease.
48
(b) The
Base
Rental during the Extension Option shall be equal to ninety-five percent (95%)
of the fair rental value of the Premises, as of the commencement of the
Extension Option, based on the prevailing rental rate for com-parable office
space in the Project as of the commencement of the Extension Option (with fair
market value annual increases during the Extension Option), but in no event
less
than the Base Rental due for the last year of the initial term (the "Fair Rental
Value"). The Fair Rental Value shall be determined by agreement between Landlord
and Tenant at least six (6) months prior to the commencement of the Extension
Option. In the event that Landlord and Tenant are unable to agree upon the
Fair
Rental Value by such date, an independent real estate appraiser located in
the
City of Philadelphia (who shall be a MAI or its equivalent) will be jointly
selected by Landlord and Tenant and instructed to determine the Fair Rental
Value. If Landlord and Tenant are unable to agree on an appraiser, an appraiser
(from the City of Philadelphia) shall be appointed by the President of the
Philadelphia Metropolitan Chapter of the Appraisal Institute. The determination
by such appraiser as to the Fair Rental Value shall be final and binding upon
Landlord and Tenant. The cost of such appraiser shall be borne equally by
Landlord and Tenant.
9. Fire
or Other Casualty.
Notwithstanding anything to the contrary set forth in Paragraph
20
of the
Lease.
(a) If
the
Premises are damaged by fire or other casualty and Landlord does not advise
Tenant that it has received insurance proceeds sufficient to pay the full cost
of any necessary repairs (or has not advised Tenant that Landlord has other
funds available and allocated for this purpose) within three (3) months of
the
date of such damage, or if Landlord fails to repair any such damage within
six
(6) months of the date of such damage, or if any such damage occurs during
the
last six (6) months of the initial lease term or any Extension Option, then
Tenant shall have the right (provided that Tenant is not in default hereunder),
to be exercised by notice in writing to Landlord within ten (10) days after
the
occurrence of either such event, to elect to terminate this Lease and, in such
event, this Lease and the tenancy thereby created shall cease as of the date
of
such termination, unless terminated earlier by Landlord under Paragraph
20
of the
Lease, and the rent and charges under this lease shall be adjusted as of the
date of the casualty.
(b) Notwithstanding
anything contained in this Lease to the contrary, if the Premises are damaged
by
fire or other casualty, Landlord shall have the right, at Landlord’s sole option
and at a Landlord’s cost and expense, to relocate Tenant to comparable space in
the Project for the balance of the Lease Term.
10. Interruption
of Services.
Notwithstanding anything to the contrary set forth in Paragraph
7
of the
Lease, in the event that any of the Building services specified in the Lease
to
be provided by Landlord are interrupted and such interruption prevents Tenant
from using the Premises to conduct its business, Landlord agrees to use
reasonable efforts and due diligence to cure any such interruption and return
the Building services to the Premises. In
the
event there is a failure to furnish the services specified in this Lease, and
if
such failure is of a material nature so as to render any portion of the Premises
substantially unusable for the purposes contemplated by this Lease and Tenant
does, in fact, stop using the affected portion of the Premises, and after
written notice thereof by Tenant to Landlord, then, if such failure continues
to
remain uncured for more than 20 consecutive business days after such written
notice, Rent payments shall abate, based upon the portion or portions of the
Premises affected by such interruption of service and the degree of adverse
affect of the interruption upon the normal conduct of Tenant’s business at the
Premises, until such failure is remedied. Landlord may prevent or stop any
such
abatement of Rent payments by providing substantially the same service by
temporary or alternative means until the cause of loss of service can be
corrected.
11. Access
to the Premises.
With
respect to Landlord's right to access the Premises, Landlord agrees to use
reasonable efforts to (a) give Tenant at least 24 hours telephone notice prior
to entry into the Premises (except in the event of an emergency where notice
shall not be required), and (b) minimize any disruption or interference with
the
operation of Tenant's business.
49
12. Compliance
with Laws.
Except
as otherwise required to be completed by Tenant under the Lease, Landlord agrees
to comply with all present and future laws, rules, regulations, ordinances,
guidelines, judgments and orders concerning the common areas of the Building,
including, without limitation, the Americans with Disabilities Act. Tenant
shall
reimburse Landlord, as part of the Operating Expenses, for its proportionate
share of such costs incurred by Landlord pursuant to this Paragraph
12.
13. Rules
and Regulations.
Landlord shall use reasonable efforts to uniformly enforce all rules and
regulations applicable to the Building among all tenants located in the
Building. In addition, in the event of any discrepancy or conflict between
any
such rules and regulations and the terms of the Lease, the terms of the Lease
shall control.
14. Legal
Fees.
In the
event that Tenant institutes a lawsuit against Landlord to enforce or to recover
damages for the breach of any of the terms of the Lease, it is specifically
agreed that Tenant shall recover from, or be paid by Landlord, in addition
to
all items which Tenant may be entitled to recover in law or in equity, if Tenant
is the prevailing party in such litigation, reasonable attorney’s fees, and the
costs and disbursements of said proceeding. Said payments will be due to Tenant,
provided that Tenant is the prevailing party in any such litigation, within
30
days after the conclusion of same. Tenant’s petition and/or pleadings may make
demand for payment of attorney’s fee as an amount currently due and owing to
Tenant as of the date of the petition and/or pleadings, without the necessity of
any prior or further demand therefore or invoice for the same.
15. Allowance.
Tenant
may use any unused portion of the Allowance towards Tenant’s architectural and
design fees, installation of Tenant’s voice and data cabling, signage and
security system, but in no event shall any portion of the Allowance be applied
towards payment of rent.
16. Estimated
Commencement Date; Estimated Expiration Date.
Tenant
shall deliver (a) permittable drawings which shall include the reflective
ceiling plan by May 21, 2004, and (b) a complete set of Plans (consisting
of fully dimensioned and complete sets of plans and specifications, including
detailed architectural, structural, mechanical, electrical and plumbing
plans)
for the
Work as required by the terms of the Work Letter attached as Exhibit D to the
Lease by June 4, 2004. In the event that Tenant fails to deliver (x) permittable
drawings which shall include the reflective ceiling plan by May 21, 2004, and/or
(y) a complete set of Plans (consisting
of fully dimensioned and complete sets of plans and specifications, including
detailed architectural, structural, mechanical, electrical and plumbing
plans)
for the
Work as required by the terms of the Work Letter attached as Exhibit D to the
Lease by June 4, 2004, then the Estimated Commencement Date and the Estimated
Expiration Date will each be extended by one day for each day after May 21,
2004
or June 4, 2004, as applicable, until Tenant delivers permittable drawings
or a
complete set of Plans for the Work, as applicable.
17. Patio
Area.
Landlord shall, as part of the Work, install a patio area (the “Patio Area”) at
a location to be approved by Landlord, in Landlord’s sole and absolute
discretion.
18. Audits.
If
any
audit conducted
by
Tenant pursuant to Paragraph 6.7 of the Lease reveals fraud or that the amount
of the Building Operating Expenses or the Site Operating Expenses billed to
Tenant is more than 5% in excess of Tenant’s Building Proportionate Share of
actual Building Operating Expenses or Tenant’s Site Proportionate Share of
actual Site Operating Expenses, then Landlord shall pay the reasonable costs
and
expenses incurred by Tenant in connection with such audit, not to exceed
$2,500.00.
19. Landlord’s
Maintenance Obligations.
Landlord
shall, at Landlord’s cost reimbursable
as a Building Operating Expense or a Site Operating Expense, cause
to
be performed all maintenance, repairs and/or replacements to the Common Areas
of
the Building and all other areas within the Building not under the exclusive
lease or occupancy of any one tenant, including structural maintenance, repairs,
and replacements, as well as maintenance, repair and/or replacement of the
foundations, the roofs, the HVAC systems, electrical systems above mechanical
and plumbing systems, life safety systems, security systems, shafts (including
elevator shafts), elevator cabs, stairs and stairwells, exterior walls and
windows throughout the Building wherever located, necessary for compliance
with
applicable legal requirements, necessary to the good condition and proper
functioning of the Building, and consistent with the appearance of comparable
office buildings in the general vicinity of the Building.
50
20. Punch
List.
Prior
to
taking possession of the Premises Landlord and Tenant shall prepare a punch-list
of agreed-upon items to be completed by Landlord as part of the Work. Landlord
shall use reasonable efforts to complete the punch-list items within ninety
(90)
days after agreement is reached on such punch-list (or such longer time as
is
reasonably necessary in light of such work). Tenant’s taking possession of the
Premises shall constitute the acknowledgment by, and representation of, Tenant
that the Premises, were in good and satisfactory condition when possession
was
so taken except as otherwise expressly provided in the Work Letter or any such
punch list.
21. Alterations
and Improvements.
Notwithstanding
anything
to the contrary set fort in Paragraph 11 of the Lease, Tenant may
make
non-structural alterations, improvements or additions to the Premises upon
at
least 10 days prior written notice to Landlord, but without Landlord’s consent,
provided the cost of such non-structural alterations, improvements or additions
do not exceed $50,000, in the aggregate. All such non-structural alterations,
improvements or additions shall be made in accordance with the provisions of
Paragraph 11 of the Lease, and shall be removed by Tenant upon termination
of
the Lease a provided in Paragraph 11.4 of the Lease.
22. Landlord’s
Indemnification.
Landlord will indemnify, defend and hold harmless Tenant and its agents or
employees against any claims or costs, including reasonable attorneys' and
paralegals' fees, arising from conduct or from any breach or default on the
part
of Landlord, its agents or employees during the Lease Term or from such acts
or
conduct of any subtenant, employee, agent, servant, customer or contractor
of
Landlord. In case any action or proceeding be brought against Tenant by reason
of any obligation on Landlord’s part to be performed under the terms of this
Lease, or arising from any act or negligence of the Landlord, or of its agents
or employees, Landlord upon notice from Tenant will defend the same at Landlord
's expense by counsel reasonably satisfactory to Tenant. If any damage to the
Project (excluding the Premises) results from any act or negligence of Landlord,
Tenant may at Tenant 's option repair such damage, and Landlord will thereupon
pay to Tenant the total cost of such repairs and damages to the Project
(excluding the Premises); provided, however, that Tenant waives any right of
action against Landlord for any loss or damage to the Project, including the
Premises, resulting from fire or other casualty by such act or negligence if
Tenant 's insurance policy covers such loss or damage and per-mits such a
waiver.
23. Landlord’s
Lien.
Landlord hereby agrees to subordinate any and all landlord’s liens granted to it
by operation of law in favor of any institutional financing that Tenant may
obtain at any time during the term of this Lease, if required by any such
institutional lender provided Landlord and such institutional lender enter
into
a subordination agreement in a form reasonably acceptable to
Landlord.
24. Tenant’s
Authority.
Tenant
is a Delaware corporation duly formed and validly existing under the laws of
the
State of Delaware and in good standing and authorized to do business in the
Commonwealth of Pennsylvania. Tenant has full power and authority to enter
into
and perform and comply with the terms and conditions of the Lease and this
Addendum. Tenant shall provide to Landlord a resolution of Tenant’s board of
directors authorizing the execution and delivery of the Lease and this Addendum
and approving the transactions contemplated thereby and hereby.
25. Tax
Credit.
If
Landlord receives any real estate tax credit, rebate, refund, reduction or
other
adjustment (“Tax Credit”) with respect to the Building or the Project, then at
all times during the term, Landlord shall deliver to Tenant its proportionate
share of such Tax Credit; provided, however, Tenant shall pay its proportionate
share of the costs of any contest, proceeding or action brought by Landlord
to
contest the validity or amount of any real estate tax.
51
IN
WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
by
their duly authorized officers or representatives.
| WITNESS: | ||
| LANDLORD: | ||
| STONE MANOR CORPORATE CENTER, L.P. | ||
|
ATTEST:
(Asst.) Secretary |
By:
|
SM Corporate Center, Inc. |
| By: | ||
|
Walter S. Smerconish, President |
||
|
|
||
| TENANT: | ||
| DISCOVERY LABORATORIES, INC. | ||
|
ATTEST:
|
|
|
|
(Asst.) Secretary |
By: | |
|
(Vice) President |
||
52
COMMENCEMENT
DATE AGREEMENT
It
is
hereby agreed among the parties to that certain Lease Agreement dated May
26,
2004, for Suites 100 and 200, in the building commonly known as Office Building
A in Stone Manor Corporate Center, located on Easton Road in Warrington
Township, PA (the “Lease”) between Discovery
Laboratories, Inc. (“Tenant”),
and Stone
Manor Corporate Center, L.P.
(“Landlord”) that:
|
1.
|
The
Commencement Date of the Lease, as referred to in the Schedule
of the
Lease, is November 19, 2004.
|
|
2.
|
The
provisions of Paragraph 31 of the Lease will apply to and are hereby
incorporated into this Agreement.
|
IN
WITNESS WHEREOF, Landlord and Tenant have executed this Commencement Date
Agreement as of the date hereof.
|
WITNESS:
|
TENANT:
DISCOVERY LABORATORIES
|
|
_________________________________
|
By:_________________________________
|
|
Name:
Julia Fitzgibbons
|
Name:
David Lopez
|
|
Its:
Senior VP, General Counsel
|
|
|
Date:
1/17/05
|
|
|
WITNESS:
|
LANDLORD:
STONE MANOR CORPORATE CENTER, L.P.
|
|
By:
SM
Corporate Center, Inc.
|
|
|
_________________________________
|
By:_________________________________
|
|
Name:
Gwen Damone
|
Name:
Walter S. Smerconish
|
|
Title:
President
|
|
|
Date:
1/19/05
|
Exhibit
10.2
FIRST
AMENDMENT TO LEASE AGREEMENT
This
FIRST
AMENDMENT TO LEASE AGREEMENT
(this
“First Amendment”) made this 2nd
day of
April , 2007 ("Execution Date"), by and between TR
STONE MANOR CORP.,
a
Delaware corporation (hereinafter called “Landlord”), and DISCOVERY
LABORATORIES, INC., a
Delaware corporation (hereinafter called “Tenant”).
WHEREAS,
Landlord's predecessor in interest, Stone Manor Corporate Center, L.P. ("SMCC")
and Tenant entered into that certain Office Lease Agreement dated May 26, 2004
("Original Lease"), as amended by that certain Addendum to Office Lease
Agreement between SMCC and Tenant dated of even date as the Original Lease
("Addendum"), as further amended by that certain Commencement Date Agreement
between SMCC and Tenant dated January 19, 2005 ("Commencement Date Agreement",
and together with the Original Lease and the Addendum, the "Lease"), under
which
Landlord demised to Tenant the premises consisting of approximately 39,594
rentable square feet of office space on the first and second floors (the
“Premises") in the building commonly known as Stone Manor Corporate Center,
2600
Kelly Road, in Doyleston and Warrington Townships, Pennsylvania (the
“Building"), all as more particularly set forth in the Lease, for a Lease Term
expiring February 28, 2010.
WHEREAS,
Tenant
desires to undertake certain improvements to the Premises, Building and
surrounding area, which improvements include (i) renovation of the Premises
to
include a laboratory; (ii) the installation of wiring, plumbing, duct work
and
related appurtenances in the Building; (iii) the installation of an emergency
power generator near the Building; and (iv) other related work, all as set
forth
on the plans and specifications prepared by Trident Engineering, Inc., attached
to the Work Letter as Schedule
1
(the
"Plans"), approved by the Landlord, and as the same may be revised with
Landlord's prior written approval (the "Tenant's Work").
WHEREAS,
Landlord has approved the Tenant's Work, subject to (i) Tenant's covenant to
pay
for the costs associated with the modifications to the HVAC in the Premises
required to make such HVAC sufficient for the increased ventilation needs
created by Tenant's laboratory and generator; and (ii) the terms of this First
Amendment, and the Work Letter and Generator License Agreement attached hereto
as Exhibit
A and
Exhibit
B,
respectively, and incorporated herein by reference and made a part
hereof
WHEREAS,
Landlord and Tenant desire to extend the Lease Term and to amend certain other
provisions of the Lease, as more particularly set forth in this First
Amendment.
NOW,
THEREFORE,
in
consideration of the mutual agreements herein set forth, the mutual agreements
set forth in the Lease, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Landlord and Tenant have
agreed, and hereby agree that the Lease is amended as follows:
| 1. |
Recitals
Incorporated.
The Recitals set forth above are hereby incorporated by this reference
and
shall be deemed terms and provisions hereof with the same force and
effect
as if fully set forth in this Section 1.
|
| 2. |
Defined
Terms.
Capitalized terms which are not otherwise defined herein shall be
deemed
to have the same meanings herein as are ascribed to such terms in
the
Lease. All references herein to “Lease” shall be deemed to be references
to the Lease, as amended hereby.
|
| 3. |
Term.
The Lease Term is hereby extended for a period of thirty-six (36)
months
commencing on March 1, 2010, and expiring on February 28, 2013 (the
"Extension Term").
|
| 4. |
Base
Rental.
During the Extension Term, Base Rental due under the Lease shall
be
increased to the amounts set forth in the following schedule, which
shall
be payable in accordance with the provisions of the
Lease:
|
|
Period
|
Base
Rental
(annual)
|
Monthly
Installments of Base Rental
|
|
March
1, 2010 - February 28, 2011
|
$979,951.56
|
$81,662.63
|
|
March
1, 2011 - February 29, 2012
|
$999,748.56
|
$83,312.38
|
|
March
1, 2012 - February 28, 2013
|
$1,019,545.56
|
$84,962.13
|
|
During
the remainder of the Lease Term and during the Extension Term, Tenant
shall pay, as rent, the amounts and charges provided in Section 6
of the
Original Lease with respect to Tenant's Building Proportionate Share
and
Tenant's Site Proportionate Share, as the case may be, of the Operating
Expenses, together with all other amounts and charges payable by
Tenant to
Landlord under the Lease.
|
| 5. |
Security
Deposit.
Subject to the provisions of Section 6 of the Addendum, Landlord
shall
continue to hold during the Extension Term the security deposit consisting
of $600,000.00, in the form of a letter of credit dated September
24, 2004
and amended on December 29, 2005, issued by Wachovia Bank (the "Letter
of
Credit"). Section 6(f) of the Addendum is hereby deleted in its entirety
and the following is substituted in lieu thereof: "As of March 1,
2010,
provided that no Event of Default has occurred and is continuing,
and
there is no existing circumstance with which the passage of time
or the
giving of notice, or both, would give rise to an Event of Default,
Tenant
may reduce the Letter of Credit to the amount of $400,000.00 for
the
remainder of the Extension Term by (i) delivering to Landlord either
cash
or a substitute letter of credit in the reduced amount; (ii) modifying
the
Letter of Credit to the reduced amount without changing any of the
other
provisions thereof, including the Landlord's ability to draw on the
Letter
of Credit, if necessary; or (iii) otherwise reducing the Letter of
Credit
in a manner mutually acceptable to both Landlord and
Tenant."
|
| 6. |
Condition
of the Premises.
Tenant is in possession of the Premises and accepts the same "as
is"
without any representations or warranties of any kind, subject to
conditions that are the responsibility of the Landlord to repair
or
maintain pursuant to the express provisions of the Lease. No agreement
of
Landlord to alter, remodel, redecorate, repair or improve the Premises,
or
the Building, or to provide Tenant with any credit or allowance for
the
same, and no representation regarding the condition of the Premises
or the
Building have been made by or on behalf of Landlord or relied upon
by
Tenant, except as otherwise expressly provided with respect to the
Tenant's Work described in Section 7 below.
|
| 7. |
Tenant's
Work.
Tenant shall construct those certain improvements to the Premises
and duct
work and generator installation in the Building, described as the
Tenant's
Work in the Work Letter, Exhibit
A,
which is attached hereto and made a part hereof, in accordance with
the
Plans (attached to the Work Letter), and in a good and workmanlike
manner.
The Tenant's Work shall be completed at Tenant's cost and expense,
subject
to Landlord's Contribution (as defined in the Work Letter). In accordance
with the provisions of Section 11.4 of the Original Lease, Tenant
shall be
required, at its cost and expense, to: (i) remove, upon the expiration
or
earlier termination of the Lease: (A) the laboratory fixtures and
equipment and any exhaust duct work for the operation of the laboratories
installed as part of the Tenant's Work, including the fans from the
roof
of the Building, all hoods, and exhaust venting; (B) the generator
and
related appurtenances installed as part of the Tenant's Work; and
(C)
plumbing and electrical fixtures and other equipment (which is not
located
within the walls or under the floor of the Premises or the Building
and is
not common to a general office build-out), if any, installed within
the
Premises or the Building as part of the Tenant's Work; (ii) restore
the
Premises and the Building to broom-clean condition, reasonable wear
and
tear excepted; and (iii) repair any damage to the Premises or the
Building
resulting from such removal and restoration. Notwithstanding the
foregoing, Tenant shall not be required to demolish or restore: (1)
any
plumbing fixtures or equipment within the walls of the Premises or
the
Building installed or constructed as part of the Tenant's Work; and
(2)
any electrical fixtures or equipment installed as part of the Tenant's
Work which are considered common to a standard office build-out.
If Tenant
fails to remove any of the Tenant's Work referenced in subsections
(A),
(B) and (C) above or restore the Premises and/or Building to the
condition
required or repair any damage, then Landlord may perform such actions,
and
Tenant shall reimburse Landlord for any and all costs incurred by
Landlord
in connection therewith. Any other improvements to the Premises shall
be
made by Tenant at the sole cost and expense of
Tenant.
|
| 8. |
Termination
of Termination Option.
Upon execution of this First Amendment, Section 3 of the Addendum,
Termination Option, shall become null and void and of no further
force and
effect.
|
2
| 9. |
Right
of First Offer.
During the remainder of the Lease Term and during the Extension Term,
subject to any existing rights of other tenants, and provided that
Tenant
is not then in default under the Lease, Tenant shall be granted a
right of
first offer, on the terms and conditions set forth in Section 5 of
the
Addendum, on any space that comes available within the Building,
or any
buildings in Stone Manor Corporate Center currently owned or later
acquired, controlled or owned by Landlord, or any affiliate of or
other
company related to Landlord.
|
| 10. |
Extension
Option.
The Extension Option, as set forth in Section 8 of the Addendum,
shall be
modified and amended such that Tenant shall only be entitled to one
(1)
additional term of three (3) years, commencing upon the expiration
of the
Extension Term (the "New Extension Option"). Tenant must notify Landlord
of its intention to exercise the New Extension Option, in writing,
at
least nine (9) months prior to the expiration of the Extension Term.
Except as otherwise expressly provided herein, the New Extension
Option
shall be exercised in accordance with the terms and conditions set
forth
in Section 8 of the Addendum.
|
| 11. |
Termination
of First Amendment.
Notwithstanding any other provision hereof, at any time prior to
commencement of construction of Tenant's Work, but in no event later
than
May 15, 2007, Tenant shall have the right to terminate this First
Amendment by providing written notice thereof to Landlord ("Tenant's
Termination Notice"). Upon Landlord's receipt of Tenant's Termination
Notice, (i) this First Amendment shall become null and void and of
no
further force and effect; (ii) neither Landlord nor Tenant shall
be bound
by any of the terms and conditions hereof; and (iii) the Lease shall
continue in full force and effect without regard to this First
Amendment.
|
| 12. |
Notices.
Notwithstanding anything to the contrary contained in the Lease,
all
notices from Tenant to Landlord under the Lease shall henceforth
be sent
to the following:
|
TR
Stone
Manor Corp.
c/o
Capri
Capital Partners LLC
875
N.
Michigan Ave.
Suite
3430
Chicago,
IL 60611
Attention:
Asset Manager
with
a
copy to:
Holland
& Knight LLP
131
South
Dearborn Street
30th
Floor
Chicago,
IL 60603
Attention:
James T. Mayer.
3
| 13. |
Broker.
Landlord and Tenant represent and warrant to each other that they
have had
no dealings with any real estate broker, finder or other person entitled
to compensation for services rendered in connection with the negotiation
or execution of this First Amendment other than CB Richard Ellis,
Inc.,
representing Landlord, and Cushman & Wakefield of Pennsylvania, Inc.,
representing Tenant (the "Brokers"). Landlord and Tenant each agree
to
defend, indemnify and hold harmless the other from and against any
claim
for broker's or finder's fees or commissions made by any entity,
other
than the Brokers, asserting such claim by, through or under it. Landlord
shall be responsible to pay a commission to the Brokers pursuant
to a
separate agreement.
|
| 14. |
Counterparts.
This First Amendment may be executed in counterparts, each of which
shall
constitute an original, and all of which, when taken together, shall
constitute one and the same
instrument.
|
| 15. |
Time
is of the Essence.
Time is of the essence for this First Amendment and the Lease and
each
provision hereof and thereof.
|
| 16. |
Submission
of First Amendment.
Submission of this instrument for examination shall not bind Landlord
and
no duty or obligation on Landlord shall arise under this instrument
until
this instrument is signed and delivered by Landlord and
Tenant.
|
| 17. |
Entire
Agreement.
This First Amendment and the Lease contain the entire agreement between
Landlord and Tenant with respect to Tenant’s leasing of the Premises.
Except for the Lease and this First Amendment, no prior agreements
or
understandings with respect to the Premises shall be valid or of
any force
or effect.
|
| 18. |
Severability.
If any provision of this First Amendment or the application thereof
to any
person or circumstance is or shall be deemed illegal, invalid or
unenforceable, the remaining provisions hereof shall remain in full
force
and effect and this First Amendment shall be interpreted as if such
illegal, invalid or unenforceable provision did not exist
herein.
|
| 19. |
Lease
In Full Force and Effect.
Except as modified by this First Amendment, all of the terms, conditions,
agreements, covenants, representations, warranties and indemnities
contained in the Lease remain in full force and effect. In the event
of
any conflict between the terms and conditions of this First Amendment
and
the terms and conditions of the Lease, the terms and conditions of
this
First Amendment shall prevail.
|
| 20. |
Successors
and Assigns.
This First Amendment is binding upon and shall inure to the benefit
of the
parties hereto and their respective heirs, legal representatives,
successors and assigns.
|
| 21. |
Integration
of the First Amendment and the Lease.
This First Amendment and the Lease shall be deemed to be, for all
purposes, one instrument. In the event of any conflict between the
terms
and provisions of this First Amendment and the terms and provisions
of the
Lease, the terms and provisions of this First Amendment shall, in
all
instances, control and prevail.
|
4
| 22. |
Patriot
Act.
Landlord and Tenant represent and warrant that they are not acting,
directly or indirectly, for or on behalf of any person, group, entity,
or
nation named by the United States Treasury Department as a Specially
Designated National and Blocked Person, or for or on behalf of any
person,
group, entity, or nation designated in Presidential Executive Order
13224
as a person who commits, threatens to commit, or supports terrorism;
and
that they are not engaged in this transaction directly or indirectly
on
behalf of, or facilitating this transaction directly or indirectly
on
behalf of, any such person, group, entity, or nation. Each party
hereby
agrees to defend, indemnify, and hold harmless the other party from
and
against any and all claims, damages, losses, risks, liabilities,
and
expenses (including reasonable attorneys’ fees and costs) arising from or
related to any breach of the foregoing representation and
warranty.
|
| 23. |
Exculpation.
It is understood and agreed expressly by and between the parties
hereto,
anything herein to the contrary notwithstanding, that each and all
of the
representations, warranties, covenants, undertakings and agreements
made
herein or in the Lease on the part of Landlord, while in form purporting
to be the representations, warranties, covenants, undertakings and
agreements of Landlord, are nevertheless each and every one of them
made
and intended, not as personal representations, warranties, covenants,
undertakings and agreements by Landlord or for the purpose or with
the
intention of binding Landlord personally, but are made and intended
for
the purpose only of subjecting Landlord's interest in (i) the Building,
(ii) the Premises and (iii) the building located at 2700 Kelly Road,
in
Doyleston and Warrington Townships, Pennsylvania (the "2700 Building")
to
the terms of this First Amendment and the Lease and for no other
purpose
whatsoever, and in case of default hereunder by Landlord, Tenant
shall
look solely to the interests of Landlord in the Building and the
2700
Building; that Landlord shall have no personal liability whatsoever
to pay
any indebtedness accruing hereunder or to perform any covenant, either
express or implied, contained herein; and that no personal liability
or
personal responsibility of any sort is assumed by, nor shall at any
time
be asserted or enforceable against, said Landlord, individually or
personally, on account of any representation, warranty, covenant,
undertaking or agreement of Landlord in this First Amendment or the
Lease
contained, either express or implied, all such personal liability,
if any,
being expressly waived and released by Tenant and by all persons
claiming
by, through or under Tenant. Notwithstanding the provisions of the
foregoing exculpation clause, nothing therein is intended to limit
or
preclude payment of the Landlord's obligations and claims of the
Tenant
from public liability insurance, excess liability insurance (umbrella
policies), fire and casualty insurance policies and all other policies
of
insurance affecting the Premises maintained by the
Landlord.
|
(EXECUTION
PAGE FOLLOWS)
5
IN
WITNESS WHEREOF,
Landlord and Tenant have executed this First Amendment as of the day and year
first above written.
| WITNESS: | LANDLORD: | |
| TR STONE MANOR CORP., | ||
| a Delaware corporation | ||
| |
|
|
| By: | By: | /s/ |
|
Name: Burma G James |
Name: Chris Ball |
|
| Its: Vice President | ||
| WITNESS: | TENANT: | |
| DISCOVERY LABORATORIES, INC., | ||
| a Delaware corporation | ||
| |
|
|
| By: | By: | /s/ |
|
Name:Kathleen Fitzgibbon |
Name: Robert Capetola |
|
| Its: CEO | ||
6
EXHIBIT
A
WORK
LETTER
It
is the
intent of this Work Letter that Tenant shall be permitted freedom in the design
and layout of the Premises, consistent with all applicable building and
environmental codes and requirements of law, including without limitation the
Americans with Disabilities Act, and with sound architectural and construction
practice in first-class office buildings, provided that neither the design
nor
the implementation of the Tenant's Work shall cause any interference to the
operation of the Building's HVAC, mechanical, plumbing, life safety, electrical
or other systems or to other Building operations or functions, nor shall they
increase the maintenance or utility charges for operating the Building, except
as otherwise expressly provided herein. Capitalized terms used herein, unless
otherwise defined in this Work Letter, shall have the respective meanings
assigned to them in the Lease or the First Amendment, as the case may be.
For
and
in consideration of the First Amendment and the mutual covenants contained
herein and in the Lease, Landlord and Tenant hereby agree as
follows:
1 .Tenant's
Work.
Subject
to the Landlord's Contribution (described in Paragraph 8 hereof), Tenant, at
its
cost and expense, shall perform or cause to be performed the work in the
Premises, Building and surrounding area provided for in the Plans, as defined
in
Paragraph 2(c) hereof, (the "Tenant's
Work")
in
accordance with the provisions of this Work Letter and the Generator License
Agreement in the form attached as Exhibit
B.
Tenant's Work shall be constructed in a good and workmanlike fashion, in
accordance with the requirements set forth herein and in compliance with all
applicable laws, ordinances, rules and other governmental requirements. Tenant
shall commence the construction of Tenant's Work promptly following completion
of the preconstruction activities provided for in Paragraph 3 below and shall
diligently proceed with all such construction. Tenant shall coordinate Tenant's
Work so as avoid unreasonable interference with any other work being performed
by or on behalf of Landlord and other tenants at the Building, except as
otherwise expressly set forth herein.
2 .Pre-Approved
Activities.
(a )
Prior
to
the execution and delivery of the First Amendment by Landlord and Tenant, Tenant
has submitted the following information and items to Landlord for Landlord's
review and approval:
(i) the
names
and addresses of Tenant's contractors (and the contractors' subcontractors),
including any architects and engineers, to be engaged by Tenant for the Tenant's
Work ("Tenant's
Contractors"),
which
have already been submitted to and approved by Landlord; and
(ii) the
Plans
for the Tenant's Work, which Plans have been approved by Landlord in accordance
with Paragraph 3(c) below.
(b )
Tenant
shall update such information and items by providing written notice to Landlord
of any changes.
A-1
(c )
As
used
herein, the term "Plans"
shall
mean (i) the plans and specifications prepared by Trident Engineering, Inc.
attached hereto as Schedule
1
and
incorporated herein, as such plans and specifications may be revised from time
to time in accordance with Paragraph 5 below. The Plans have been approved
by
Landlord, and such approval by Landlord shall in no way be deemed to be a
representation or warranty of Landlord that such Plans are adequate for any
use
or comply with any applicable laws, ordinances or regulations or other
governmental requirements; or be deemed to be an acceptance or approval of
any
element therein contained which is in violation of any applicable laws,
ordinances, regulations or other governmental requirements.
3. Pre-Construction
Activities.
(a) No
Tenant's Work shall be undertaken or commenced by Tenant in the Premises
until:
(i) all
necessary building permits, governmental approvals, permits and licenses have
been obtained by Tenant, at Tenant's sole cost and expense; and
(ii) all
required insurance coverages have been obtained by Tenant, but failure of
Landlord to receive evidence of such coverage upon commencement of the Tenant's
Work shall not waive Tenant's obligations to obtain such coverages.
4. Charges
and Fees.
Subject
to Paragraph 8 below, Tenant shall be responsible for all costs and expenses
attributable to the Tenant's Work. Notwithstanding the foregoing, Tenant shall
not be responsible for any costs or expenses related to Landlord's review and
approval of the Plans or Landlord's supervision of Tenant's Work, nor shall
Tenant be required to furnish any additional security.
5. Change
Orders.
(a) All
changes to the final Plans requested by Tenant must be submitted to Landlord
in
writing within a reasonable time after Tenant or Tenant's Contractor makes
or
receives changes to such Plans, regardless of whether or not such changes are
subject to Landlord's prior approval. Material Changes (hereinafter defined)
to
the Plans must be approved by Landlord in writing in advance of the
implementation of such changes as part of the Tenant's Work. Landlord's consent
to such Material Changes is not to be unreasonably withheld or
delayed.
(b) Material
Changes are defined as those changes to the Plans which either:
(i) affect
the mechanical, electrical, plumbing, HVAC or other systems
of the Building;
(ii) alter
or
affect the exterior or the structure of the Building; or
(iii) alterations
or additions which cost in excess of $25,000.00.
A-2
(c) Delays
caused by Tenant-initiated change orders, including, without limitation, any
stoppage of Tenant's Work during the change order review process, are solely
the
responsibility of Tenant and shall cause no delay in the commencement of the
Extension Term or the rental obligations set forth in the Lease.
6. Standards
of Design and Construction and Conditions of Tenant's
Performance.
All
Tenant's Work done in or upon the Premises by Tenant shall be done according
to
the standards set forth in this Paragraph 6, except as the same may be modified
in the Plans approved by or on behalf of Landlord and Tenant.
(a) Tenant's
Plans and all design and construction of the Tenant's Work shall comply with
all
applicable statutes, ordinances, regulations, laws, codes and industry
standards, including, but not limited to, requirements of Landlord's fire
insurance underwriters. Approval by Landlord of the Plans shall not constitute
a
waiver of this requirement or assumption by Landlord of responsibility for
compliance. Where several sets of the foregoing laws, codes and standards must
be met, the strictest shall apply where not prohibited by another law, code
or
standard.
(b) Tenant
shall obtain, at its own cost and expense, all required building permits and,
when construction has been completed, shall obtain, at its own cost and expense,
an occupancy permit for the Premises, which permit shall be delivered to
Landlord. Tenant's failure to obtain such permits shall not cause a delay in
the
commencement of the Extension Term or the rental obligations set forth under
the
Lease or First Amendment.
(c) Tenant's
Contractors shall be licensed contractors, possessing good labor relations,
capable of performing quality workmanship and working in harmony with Landlord's
contractors and subcontractors and with other contractors and subcontractors
in
the Building.
(d)
Landlord
shall have the right, but not the obligation, to perform on behalf of and for
the account of Tenant, subject to reimbursement by Tenant, any Tenant's Work
(i)
which Landlord deems to be necessary on an emergency basis, (ii) which pertains
to structural components, building systems or the general utility systems for
the Building, (iii) which pertains to the erection of temporary safety
barricades or signs during construction, or (iv) which pertains to patching
of
the Tenant's Work.
(e)
Tenant
shall use only new, first-class materials in the Tenant's Work, except where
explicitly shown otherwise in the Plans. Tenant shall obtain warranties of
at
least one (1) year's duration from the completion of the Tenant's Work against
defects in workmanship and materials on all Tenant's Work performed and
equipment installed in the Premises as part of the Tenant's Work.
(f)
Tenant
and Tenant's Contractors, in performing Tenant's Work, shall not unreasonably
interfere with other tenants and occupants of the Building. Tenant and Tenant's
Contractors shall make all efforts and take all steps appropriate to
construction activities undertaken in a fully occupied, first-class office
building so as not to interfere with the operation of the Building and shall,
in
any event, comply with all reasonable rules and regulations existing from time
to time at the Building. Tenant and Tenant's Contractors shall take all
precautionary steps to minimize dust, noise and construction traffic and to
protect their facilities and the facilities of others affected by the Tenant's
Work and to properly police same. Construction equipment and materials are
to be
kept within the Premises, and delivery and loading of equipment and materials
shall be done at such locations and at such time as Landlord shall direct so
as
not to burden the construction or operation of the Building. In the event that
Tenant's Work may disrupt, interfere or in any way affect another tenant's
use
of the Building or any portion thereof, Landlord shall use good faith efforts
to
secure any approvals that may be required of those tenants. Notwithstanding
the
foregoing, Tenant and Tenant's Contractors shall have the right to perform
the
Tenant's Work.
A-3
(g)
Landlord
shall have the right to order Tenant or any of Tenant's Contractors who
materially violate the requirements imposed on Tenant or Tenant's Contractors
in
performing Tenant's Work to cease Tenant's Work and remove its equipment and
employees from the Building. No such action by Landlord shall delay the
commencement of the Lease or the rental and other obligations therein set
forth.
(h)
Utility
costs or charges for any service (including HVAC, hoisting or freight elevator
and the like) to the Premises shall be the responsibility of Tenant from the
date Tenant commences the Tenant's Work and shall be paid for by Tenant at
Landlord's rates. Tenant shall apply and pay for all utility meters required.
All use of freight elevators is subject to scheduling by Landlord. Tenant shall
arrange and pay for removal of construction debris and shall not place debris
in
the Building's waste containers.
(i)
Tenant
shall permit access to the Premises, and the Tenant's Work shall be subject
to
inspection, by Landlord and Landlord's architects, engineers, contractors and
other representatives at all times during the period in which the Tenant's
Work
is being constructed and installed and following completion of the Tenant's
Work.
(j)
Tenant
shall proceed with the Tenant's Work expeditiously, continuously and
efficiently, and shall complete the same on or before December 31, 2007, and
Landlord shall use reasonable commercial efforts to assist Tenant with the
completion of the Tenant's Work on or before said date. Tenant shall notify
Landlord upon completion of the Tenant's Work and shall furnish Landlord with
such further documentation as may be necessary under Paragraph 8 below.
(k)
Tenant
shall have no authority to deviate from the Plans in performance of the Tenant's
Work unless: (i) such deviation meets the requirements set forth in Paragraph
5
above; or (ii) such deviations have been authorized by Landlord or its
designated representative in writing. Tenant shall furnish to Landlord
"as-built" drawings of the Tenant's Work within ten (10) days after completion
of the Tenant's Work.
(l)
Landlord
shall have the right to run utility lines, pipes, conduits, duct work and
component parts of all mechanical and electrical systems where necessary or
desirable through the Premises, to repair, alter, replace or remove the same,
and to require Tenant to install and maintain proper access panels
thereto.
(m)
Tenant
shall impose on and enforce all applicable terms of this Work Letter against
Tenant's Contractors.
A-4
7. Insurance
and Indemnification.
(a) Tenant
covenants and agrees to secure and maintain, at all times before, during and
after completion of the Tenant's Work (and through the Term of the Lease),
insurance of the types and amounts set forth in Article 17 of the Original
Lease. Tenant further covenants and agrees to insure the Tenant's Work for
the
full replacement value thereof, in accordance with Article 11 and Article 17
of
the Original Lease. Tenant's insurance shall include Tenant's Contractors and
Tenant shall require Tenant's Contractors to secure, pay for and maintain during
the continuance of the construction within the Building or the Premises,
insurance of the types and amounts set forth in Article 17 of the Original
Lease.
(b) Without
limitation of the indemnification provisions contained in the Lease, to the
fullest extent permitted by law, Tenant agrees to indemnify, protect, defend
and
hold harmless Landlord, Landlord's contractors and Landlord's architects and
their respective partners, directors, officers, employees and agents, from
and
against all claims, liabilities, losses, damages and expenses of whatever nature
arising out of or in connection with the Tenant's Work or the entry of Tenant
or
Tenant's Contractors into the Building and the Premises, including, without
limitation, mechanics' liens or the cost of any repairs to the Premises or
Building necessitated by activities of Tenant or Tenant's Contractors and death
of or bodily injury to persons or damage to the property of Tenant, Tenant's
Contractors and their respective employees, agents, invitees or licensees or
others, except for such claims, liabilities, losses, damages and expenses solely
caused by the gross negligence or willful misconduct of Landlord, its employees,
agents or contractors. It is understood and agreed that the foregoing indemnity
shall be in addition to the insurance requirements set forth above and shall
not
be in discharge of or in substitution for same or any other indemnity or
insurance provision of the Lease.
8. Landlord's
Contribution; Excess Amounts.
(a) In
connection with the Tenant's Work, provided that Tenant complies with all of
the
requirements of this Section 8 and Tenant is not in default hereunder or under
the Lease, Landlord shall contribute a maximum amount ("Landlord's
Contribution")
of
Three Hundred Ninety-Five Thousand Nine Hundred Forty and No/100 Dollars
($395,940.00) (calculated at the rate of $10.00 per rentable square foot of
the
Premises), as Landlord's share of the cost of the Tenant's Work incurred by
Tenant
(b) Periodically
after completion of a portion of the Tenant's Work, Tenant may submit to
Landlord a payment request for costs of the Tenant's Work (the "Payment
Request").
The
Payment Request shall include: (i) all applications for payment to Tenant's
Architect and certificates of payment issued by Tenant's Architect; and (ii)
copies of the AIA documents G702tm-1992 and G703tm-1992 received or issued
for
each application for payment made by Tenant's Contractors.
A-5
(c) Within
five (5) days of receiving a Payment Request from Tenant, Landlord shall pay
a
portion of the Landlord's Contribution in the amount of Eighty-Nine Thousand
Eighty-Six and 50/100 Dollars ($89,086.50), which amount equals one-quarter
(1/4) of the Landlord's Contribution, minus the ten percent (10%) retainage
(as
set forth in subsection (d) below).
(d) After
each Payment Request, Landlord shall pay the portion of the Landlord
Contribution as set forth in subsection (c) above, until ninety percent (90%)
of
Landlord's Contribution has been expended and only the ten percent (10%)
retainage amount remains (the "Retainage").
The
Retainage shall equal $39,594.00, and Tenant shall not be entitled to such
Retainage until it has complied with the requirements set forth in subsection
(f) below.
(e) Upon
written request by Landlord, at no expense to Landlord, Tenant shall furnish
Landlord with legible copies or originals of any records of Tenant or Tenant's
Contractors regarding the Tenant's Work, including the progress thereof and
payments made therefor, which request shall not delay the payments required
by
Landlord under subsections (c) and (d) above. Tenant shall accommodate such
requests in a timely manner.
(f) Upon
completion of the Tenant's Work, Tenant shall furnish Landlord with final
waivers of liens and contractors' affidavits, in such form as may be required
by
Landlord, from all parties performing labor or supplying materials or services
in connection with the Tenant's Work showing that all of said parties have
been
compensated in full and waiving all liens in connection with the Premises and
Building. Tenant shall submit to Landlord a detailed breakdown of Tenant's
total
construction costs, together with such evidence of payment as is reasonably
satisfactory to Landlord. Within fifteen (15) days of Landlord's receipt of
such
documentation and waivers as described herein, Landlord shall pay to Tenant
the
Retainage.
9. Miscellaneous.
(a) Except
as
expressly set forth herein, in the First Amendment or in the Lease, Landlord
has
no agreement with Tenant and has no obligation to do any Tenant's Work with
respect to the Premises.
(b) If
the
Plans for the Tenant's Work require the construction and installation of more
fire hose cabinets or telephone/electrical closets than the number regularly
provided by Landlord in the core of the Building in which the Premises are
located, then Tenant agrees to pay all costs and expenses arising from the
construction and installation of such additional fire hose cabinets or
telephone/electrical closets.
A-6
(c) Time
is
of the essence under this Work Letter.
(d) If
Tenant
fails to make any payment relating to the Tenant's Work as required hereunder,
Landlord, at its option, may complete the Tenant's Work pursuant to the approved
Plans and continue to hold Tenant liable for the costs thereof and all other
costs due to Landlord. Tenant's failure to pay any amounts owed by Tenant
hereunder when due or Tenant's failure to perform its obligations hereunder
shall also constitute a default under the Lease, and Landlord shall have all
the
rights and remedies granted to Landlord under the Lease for nonpayment of any
amounts owed thereunder or failure by Tenant to perform its obligations
thereunder.
(e) Notices
under this Work Letter shall be given in the same manner as under the
Lease.
(f) The
liability of Landlord hereunder or under any amendment hereto or any
instrument
or document executed in connection herewith (including, without limitation,
the Lease) shall be limited to and enforceable solely against Landlord's
interest
in the Building.
(g) The
headings set forth herein are for convenience only.
(h) Except
as
set forth in the First Amendment, or the Generator License Agreement
attached thereto, this Work Letter sets forth the entire agreement of
Tenant
and Landlord regarding the Tenant's Work. This Work Letter may only be
amended
if in writing and duly executed by both Landlord and Tenant.
A-7
SCHEDULE
1
PLANS
EXHIBIT
B
GENERATOR
LICENSE AGREEMENT
This
GENERATOR
LICENSE AGREEMENT (this
“Agreement”) made this 2nd
day of
April , 2007 ("Execution Date"), by and between TR
STONE MANOR CORP.,
a
Delaware corporation (hereinafter called “Licensor”), and DISCOVERY
LABORATORIES, INC., a
Delaware corporation (hereinafter called “Licensee”).
WHEREAS,
Licensor's predecessor in interest, Stone Manor Corporate Center, L.P. ("SMCC")
and Licensee entered into that certain Office Lease Agreement dated May 26,
2004
("Original Lease"), as amended by that certain Addendum to Office Lease
Agreement between SMCC and Licensee dated of even date as the Original Lease
("Addendum"), as further amended by that certain Commencement Date Agreement
between SMCC and Licensee dated January 19, 2005 ("Commencement Date
Agreement"), as further amended by that certain First Amendment to Lease between
Licensor and Licensee (the "First Amendment", and together with the Original
Lease, the Addendum and the Commencement Date Agreement, the "Lease"), under
which Licensor demised to Licensee the premises consisting of approximately
39,594 rentable square feet of office space on the first and second floors
(the
“Premises") in the building commonly known as Stone Manor Corporate Center,
2600
Kelly Road, in Doyleston and Warrington Townships, Pennsylvania (the
“Building"), all as more particularly set forth in the Lease, for a Lease Term
expiring February 28, 2013.
WHEREAS,
in
connection with such Lease, Licensee desires a license to use certain space,
depicted on the plan sheet SK2, prepared by Trident Engineering, Inc., attached
hereto as Attachment
1
for the
purpose of installing and using an emergency generator (the "Generator"), the
fuel storage tank and related equipment ("Related Equipment") described in
the
specifications prepared Trident Engineering, Inc., attached hereto as
Attachment
2
(the
"Licensed Space"). For the purposes hereof, the Related Equipment includes
the
Connecting Equipment (as hereinafter defined), unless otherwise
indicated.
NOW,
THEREFORE,
in
consideration of the mutual agreements herein set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant have agreed, and hereby agree as
follows:
| 1. |
Grant
of License.
Licensor, for and in consideration of the covenants and agreements
made by
Licensee herein contained, does hereby grant unto Licensee, for a
term
coterminous with the term of the Lease, unless sooner terminated
as
provided herein, a license to utilize the Licensed Space for the
purpose
of installing and using the Generator and Related Equipment in order
to
obtain emergency standby or back-up power only (the
"License").
|
| 2. |
Licensor's
Approval; Costs.
The size, location and placement, as well as the manner and method
of
installation and removal of the Generator and Related Equipment shall
be
subject to the prior written approval of Licensor, in its sole and
absolute discretion. Licensor hereby approves the location and size
of the
Generator and Related Equipment to the extent that such location
and size
are specifically indicated and described on Attachment
1
and Attachment
2,
respectively. If Licensor elects to hire structural, mechanical and/or
other engineers or consultants to review any material changes to
such
plans and specifications, Licensee shall reimburse Licensor for the
reasonable costs thereof. Such costs and any other amounts due hereunder
shall be deemed rent payable in accordance with, and governed by,
the
provisions of the Lease. In addition, Licensee shall pay for all
utilities
consumed to install, maintain, operate and remove the Generator and
Related Equipment, as well as the reasonable costs of any engineers
or
consultants employed by Licensor to review or monitor the installation
or
removal of same.
|
B-1
| 3. |
Approvals,
Permits and Compliance with Laws.
Prior to the installation of the Generator and Related Equipment,
Licensee
shall secure, and shall at all times thereafter maintain, the requisite
approvals and permits of all governmental bodies having jurisdiction.
Licensee, at its expense, shall at all times comply with all applicable
laws and ordinances, rules and regulations, codes and statutes of
municipal, state and federal governmental authorities relating to
the
installation, maintenance, height, location, use, operation and removal
of
the Generator and Related Equipment and all environmental matters
with
respect thereto. Licensor makes no representation of any kind whatsoever
with respect to the Generator and Related Equipment, including any
representation that applicable laws, ordinances or regulations permit
the
installation or operation of the Generator and Related Equipment
on the
Property.
|
| 4. |
Access;
Installation of Connecting Equipment.
Licensor hereby grants unto Licensee the right, to be exercised as
herein
set forth, to enter upon the Licensed Space for the sole purpose
of
gaining access to and maintaining the Generator and Related Equipment.
In
addition thereto, Licensor grants unto Licensee the right, to be
exercised
as herein set forth, to install in connection with and as a part
of the
Generator and Related Equipment such equipment, conduits, cables
and
materials (hereinafter called the "Connecting Equipment") in shafts,
ducts, conduits, chases, utility closets and other facilities of
the
Building, including the premises of other tenants of the Building,
upon
the terms hereinafter provided, as designated by Licensor, as is
reasonably necessary to connect the Generator to Licensee's other
machinery and equipment in the Premises, subject to the requirements
of
any permits and the codes, regulations and rules of any governmental
body,
agency or authority having jurisdiction. Licensor further grants
to
Licensee the right of access to the areas where such Connecting Equipment
is located for the purposes of maintaining, repairing, testing, replacing
or removing the Connecting Equipment; provided, however, that such
access
and installations do not cause damage to or interfere with the operation
or maintenance of any part of the Building or with any other tenants'
operation of their business or use of their premises. Anything herein
to
the contrary notwithstanding, Licensee shall only enter upon the
Licensed
Space at times in accordance with the Schedule (as defined in Section
6
below) and such other areas only at such times, in such manner and
under
such circumstances as shall not cause damage or endangerment to life
or
limb.
|
B-2
| 5. |
Licensee's
Responsibilities with Respect to Testing, Operating and Maintaining
the
Generator.
Licensee, at its expense, shall be solely responsible for testing,
operating and maintaining the Generator and Related Equipment in
a safe,
structurally sound, clean and sightly condition and in strict compliance
with all requirements of any governmental authority, Licensor's insurer
and Licensor's lender, including providing to such parties any
certifications required by such parties in connection with this License.
Any Environmental Protection Agency ("EPA") manifests required with
respect to such testing, operation and maintenance of the Generator
and
Related Equipment shall be in the name of Licensee and shall be the
sole
responsibility of Licensee. The Generator and Related Equipment located
in
the Licensed Space shall be shielded by a wooden or chain-link fence,
at
Landlord's election, and reasonably landscaped in accordance with
Licensor's written specifications at the sole cost and expense of
Licensee. Licensee shall indemnify and hold harmless Licensor from
and
against all liens and claims of mechanics and materialmen furnishing
labor
and materials in the construction, installation and maintenance of
the
Generator and Related Equipment.
|
| 6. |
Testing
and Operation of the Generator and Related
Equipment.
Except for periodic scheduled testing, the Generator shall be operated
only during electrical utility outages. Licensee shall establish
a
schedule (the "Schedule") of dates and time periods for testing of
the
Generator and Related Equipment, which schedule shall be subject
to
Licensor's written approval (such approval not to be unreasonably
withheld
or delayed). Licensee shall test and operate the Generator and Related
Equipment in strict accordance with the terms and conditions of this
Agreement and such testing and operation shall not interfere with
the use
and quiet enjoyment of other tenants of their premises. Licensee
shall
take all appropriate steps in the selection of the Generator and
Related
Equipment to ensure quiet operation of such Generator and Related
Equipment consistent with a sound level acceptable in a normal office
environment, as determined by Licensor in its reasonable discretion.
In
the event that Licensor notifies Licensee of any interference in
the quiet
enjoyment of other tenants of their premises in the Building or other
occupants of the Building from the Generator and Related Equipment
(including but not limited to interference resulting from harmonics,
buzzing, or similar noise or vibration related matters), Licensee
shall
use reasonable efforts to promptly eliminate such interference, or
failing
such elimination, except in the case of an emergency, cease operation
of
the Generator and Related Equipment until such interference is eliminated.
If Licensee fails to comply with any provision of this Agreement
(including but not limited to eliminating any interference or ceasing
operation as provided in this paragraph), and such failure continues
after
notice thereof from Licensor to Licensee, Licensor shall have the
right,
but not the obligation, to cure such failure, and Licensee shall
reimburse
Licensor for any and all costs incurred by Licensor in connection
therewith.
|
B-3
| 7. |
Environmental
Concerns; Indemnity.
|
| 1. |
In
connection with the testing and operation of the Generator and Related
Equipment, Licensee shall have the right to have a quantity of natural
gas, a Hazardous Material (as defined in Section 7.3 below), brought
upon and stored in the Licensed Space and used in connection with
the
Generator and Related Equipment, provided that such natural gas is
delivered, stored, used and removed in compliance with all applicable
laws, rules, codes, and regulations, including Environmental Laws
(hereinafter defined), and that the quantities of such natural gas
shall
be in such limited quantities as reasonably required for such testing,
operation and use of the Generator and Related Equipment.
|
| 2. |
Except
as otherwise expressly set forth herein, Licensee, its agents, employees,
contractors or engineers shall not (i) cause or permit any Hazardous
Materials to be brought upon, stored, used or disposed on, in or
about the
Licensed Space and/or the Building), or (ii) knowingly permit the
release,
discharge, spill or emission of any Hazardous Materials in or about
the
Licensed Space and/or Building (except as otherwise expressly provided
herein). Licensee hereby agrees that it is and shall be fully responsible
for all costs, expenses, damages or liabilities (including, but not
limited to, those incurred by Licensor and/or its mortgagee) which
may
occur from the use, storage, disposal, release, spill, discharge
or
emissions of Hazardous Materials by Licensee in, on or about the
Licensed
Space and/or Building whether or not the same may be permitted by
this
Agreement. Licensee shall defend, indemnify and hold harmless Licensor,
its mortgagee and its agents from and against any claims, demands,
administrative orders, judicial orders, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation,
reasonable attorney and consultant fees, court costs and litigation
expenses) of whatever kind or nature, known or unknown, contingent
or
otherwise, arising out of or in any way related to the use, storage,
disposal, release, discharge, spill or emission of any Hazardous
Materials, or the violation of any Environmental Laws, by Licensee,
its
agents, employees, contractors or invitees. The provisions of this
Section
shall be in addition to any other obligations and liabilities Licensee
may
have to Licensor at law or in equity and shall survive the transactions
contemplated herein or any termination of this Lease.
|
| 3. |
For
the purposes of this Agreement, all federal, state or local environmental
laws, statutes, regulations, rules, ordinances, codes, standards,
orders,
licenses and permits of any governmental authority or issued or
promulgated thereunder shall be referred to as the "Environmental
Laws"
and "Hazardous Materials" shall include, without
limitation:
|
B-4
(i) those
substances included within the definitions of "hazardous substances," "hazardous
materials," toxic substances," or "solid waste" in the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9601
et seq.) ("CERCLA"), as amended by Superfund Amendments and Reauthorization
Act
of 1986 ("SARA"), the Resource Conservation and Recovery Act of 1976 ("RCRA"),
and the Hazardous Materials Transportation Act, and in the regulations
promulgated pursuant to said laws, all as amended;
(ii) those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(of any successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto); and
(iii) any
material, waste or substance which is (A) gas or petroleum, (B) asbestos, (C)
polychlorinated biphenyl, (D) designated as a "hazardous substance" pursuant
to
Section 311 of the Clean Water Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321)
or listed pursuant to Section of the Clean Water Act (33 U.S.C. § 1317); (E)
flammables or explosives; or (F) radioactive materials.
| 8. |
Relocation.
Licensor, at its cost and expense, reserves the right upon not less
than
ninety (90) days written notice to Licensee, to relocate the Generator
and/or Related Equipment to substitute space reasonably satisfactory
to
Licensee (the "Substitute Space"). Upon such relocation, the Substitute
Space shall thereafter constitute the Licensed Space under this Agreement.
In the event that Licensee, using good faith efforts to accommodate
Licensor in the relocation, is unable to secure the substitute plans,
government approvals, permits, materials or equipment necessary for
the
relocation of the Generator and/or Related Equipment to the Substitute
Space within the ninety (90) day period, then Licensor shall allow
for an
additional thirty (30) days for the relocation of the Generator and/or
Related Equipment (the "Additional Period"). In the event that Licensee,
using good faith efforts, is unable to obtain the substitute
plans, government
approvals,
permits,
materials or equipment
necessary for the relocation during the Additional Period, then Licensee
shall request Licensor's consent, which consent shall not be unreasonably
withheld or delayed, for an extension of the Additional Period for
an
amount of time reasonably necessary for Licensee's acquisition of
such
plans, government approvals,
materials
or equipment.
|
| 9. |
Non-Exclusive,
Non-Interference.
The License hereby granted to Licensee is non-exclusive and shall
not
preclude Licensor from granting a license or licenses to others with
generators or any other equipment. The rights of Licensee hereunder
shall
be exercised without causing interference with the activities being
carried on by other licensees, and, further, Licensee shall use reasonable
efforts to minimize interference with the activities carried on by
other
licensees on or near the Licensed Space. Licensee shall not change
or
alter the Generator or Related Equipment described on Attachment
2
hereto without the prior written consent of
Licensor.
|
B-5
| 10. |
Right
to Terminate.
If any lease made by Licensee for any space in the Building (including
without limitation the Lease) shall be terminated or terminable after
the
making of this Agreement, because of any default by Licensee thereunder
beyond any applicable cure or grace period, such Event of Default
shall
empower Licensor, at Licensor's sole option, to terminate this Agreement
by notice to Licensee thereof. Notwithstanding the foregoing, this
Agreement shall terminate automatically upon the termination of the
First
Amendment.
|
| 11. |
Removal
of Generator and Related Equipment.
Licensor hereby waives its right to and interest in the Generator,
Related
Equipment and Connecting Equipment. At the termination of this Agreement
by lapse of time or otherwise, the Generator, Related Equipment and
Connecting Equipment installed hereunder shall be removed from the
Licensed Space and other areas of the Building at Licensee's sole
cost and
expense. The Licensed Space and Building areas from which any equipment
is
removed pursuant to the terms of this Section shall be restored by
Licensee to as good condition as existed immediately prior to installation
of the Generator, Related Equipment and/or Connecting Equipment,
normal
wear and tear excepted. In connection therewith, the removal of the
Related Equipment shall include the removal of the transfer switch
and
restoration of electrical circuiting and panels to the main building
systems. Penetrations of the exterior of the Building shall be filled
with
like material of appropriate finish and detail. If Licensee fails
to
remove the Generator, Related Equipment and/or Connecting Equipment
as
required by Licensor, Licensor may remove, store or dispose of the
Generator and such Related Equipment and repair and restore any damage
to
the Building caused by such removal or installation. Licensee shall
reimburse Licensor for any and all costs incurred by Licensor in
connection therewith.
|
| 12. |
Notices;
Documentation.
All notices required to be given hereunder shall be given in accordance
with the notice provisions of the Lease. Upon written request from
Licensor, Licensee shall provide Licensor with copies of all documentation
with respect to the Generator and Related Equipment, including, but
not
limited to, the following: (i) the complete description thereof;
(ii)
purchase contracts; (iii) manufacturers' warranties; (iv) plans and
specifications with respect to the Licensed Space and any other areas
of
the Building; (v), consultants' reports, if any; (vi) installation,
service and maintenance contracts; (vii) testing and maintenance
reports
and logs and certifications; (viii) communications, letters, agreements
and notices from or with any other tenants in the Building with respect
to
the Generator and/or Related Equipment, if any; and (ix) any other
information or documentation of any material significance. Such
documentation shall be provided to Licensor promptly upon the request
by
Licensor therefor, and in no event more than seven (7) days after
such
request.
|
| 13. |
Insurance
and Indemnity.
Licensee's insurance and indemnity obligations and agreements under
the
Lease shall be applicable to the Licensed Space and the Generator
and
Related Equipment. At all times during the term of this Agreement,
Licensee shall maintain general commercial liability and casualty
insurance coverage in such forms and amounts, and with such insurers,
approved by Licensor, in its reasonable discretion, with Licensor
named as
an additional insured. Prior to installing the Generator or Related
Equipment, Licensee shall deliver to Licensor evidence that such
insurance
coverage is in effect. Licensee shall assume the full risk of loss
with
respect to all Generator and Related Equipment located in the Building
and
Licensed Space, and Licensee shall protect, indemnify and hold Licensor,
its partners, employees, contractors, agents, directors, officers,
partners and members (the "Licensor Parties") harmless (and, if requested
by Licensor, shall defend with counsel reasonably acceptable to Licensor
and such Licensor Parties) from and against any and all claims,
liabilities, costs and expenses (including reasonable attorney and
consultant fees, court costs and litigation expenses), including,
without
limitation, claims for damage, loss or injury either to persons or
property, arising from and/or related to the installation, use, testing
and maintenance of the Generator and Related Equipment by Licensee,
its
employees, agents, contractors, consultants or representatives, or
the
failure of Licensee to comply with any of the obligations hereunder.
Licensee hereby waives all claims against Licensor and all of the
other
Licensor Parties for injury to persons, damage to property or to
any other
interests of the Licensee sustained by Licensee or any person claiming
through Licensee resulting from any occurrence in, on or about the
Licensed Space or Building with respect to the Generator or Related
Equipment. The provisions of this Section shall survive the expiration
or
earlier termination of this
Agreement.
|
B-6
| 14. |
Exculpatory
Clause.
It is expressly understood and agreed by and between the parties
hereto,
anything herein to the contrary notwithstanding, that the liability
of
Licensor hereunder shall be limited as provided in Section 24 of
the First
Amendment and relevant provisions of the Original
Lease.
|
| 15. |
Submission
of Agreement.
Submission of this instrument for examination shall not bind Licensor
and
no duty or obligation on Licensor shall arise under this instrument
until
this instrument is signed and delivered by Licensor and
Licensee.
|
| 16. |
Defined
Terms.
Capitalized terms which are not otherwise defined herein shall be
deemed
to have the same meanings herein as are ascribed to such terms in
the
Lease.
|
| 17. |
Successors
and Assigns.
This Agreement shall be binding upon the successors and assigns of
the
parties hereto, provided that Licensee shall not assign or transfer
this
Agreement to any other person without Licensor's prior written consent,
which may be withheld by Licensor in its sole and absolute
discretion.
|
(EXECUTION
PAGE FOLLOWS)
B-7
IN
WITNESS WHEREOF,
Licensor and Licensee have executed this Agreement as of the day and year first
above written.
| WITNESS: | LICENSOR: | |
| TR STONE MANOR CORP., | ||
| a Delaware corporation | ||
| |
|
|
| By: | By: | |
|
Name: |
Name: |
|
| Its: | ||
| WITNESS: | LICENSEE | |
| DISCOVERY LABORATORIES, INC., | ||
| a Delaware corporation | ||
| |
|
|
| By: | By: | |
|
Name: |
Name: |
|
| Its: | ||
B-8
ATTACHMENT
1
GENERATOR
ATTACHMENT
2
SPECIFICATIONS