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PENNSYLVANIA
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
LANDLORD
AND
THE IMMUNE RESPONSE CORPORATION
TENANT
FOR
680 ALLENDALE ROAD, KING OF PRUSSIA, PA
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TABLE OF CONTENTS
PAGE
1. SUMMARY OF DEFINED TERMS...............................................1
2. PREMISES...............................................................3
3. TERM...................................................................3
4. CONSTRUCTION BY LANDLORD...............................................3
5. FIXED RENT; SECURITY DEPOSIT...........................................4
6. ADDITIONAL RENT........................................................5
7. UTILITIES.............................................................11
8. SIGNS; USE OF PREMISES AND COMMON AREAS...............................11
9. ENVIRONMENTAL MATTERS.................................................13
10. TENANT'S ALTERATIONS..................................................15
11. CONSTRUCTION LIENS....................................................17
12. ASSIGNMENT AND SUBLETTING.............................................18
13. LANDLORD'S RIGHT OF ENTRY.............................................22
14. REPAIRS AND MAINTENANCE...............................................23
15. INSURANCE; SUBROGATION RIGHTS.........................................24
16. INDEMNIFICATION.......................................................26
17. QUIET ENJOYMENT.......................................................27
18. FIRE DAMAGE...........................................................27
19. SUBORDINATION; RIGHTS OF MORTGAGEE....................................28
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20. CONDEMNATION..........................................................29
21. ESTOPPEL CERTIFICATE..................................................30
22. DEFAULT...............................................................30
23. CURING TENANT'S DEFAULTS..............................................35
24. LANDLORD'S REPRESENTATIONS AND WARRANTIES.............................36
25. SURRENDER.............................................................36
26. RULES AND REGULATIONS.................................................28
27. GOVERNMENTAL REGULATIONS..............................................37
28. NOTICES...............................................................38
29. BROKERS...............................................................38
30. CHANGE OF BUILDING/PROJECT NAME.......................................38
31. LANDLORD'S LIABILITY..................................................38
32. AUTHORITY.............................................................38
33. NO OFFER..............................................................39
34. [RENEWAL..............................................................39
35. ROOF RIGHTS...........................................................39
36. MISCELLANEOUS PROVISIONS..............................................40
37. WAIVER OF TRIAL BY JURY...............................................45
38. CONSENT TO JURISDICTION...............................................45
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EXHIBITS
EXHIBIT "A" - SPACE PLAN OF PREMISES
EXHIBIT "B" - RENTAL SCHEDULE
EXHIBIT "C" - PARKING AREA
EXHIBIT "D" - CONSTRUCTION DOCUMENTS
EXHIBIT "E" - LIST OF MATERIALS AND PERMITS
EXHIBIT "F" - FORM OF NON-DISTURBANCE AGREEMNET
EXHIBIT "G" - RULES AND REGULATIONS
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LEASE
THIS LEASE ("Lease") entered into as of the 1st day of November, 1999,
between BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership
having its principal office at 16 Campus Boulevard, Suite 150, Newtown Square,
Pennsylvania 19073 ("Landlord"), and THE IMMUNE RESPONSE CORPORATION, a Delaware
corporation with its principal place of business at 5935 Darwin Court, Carlsbad,
California ("Tenant").
WITNESSETH
In consideration of the mutual covenants herein set forth, and
intending to be legally bound, the parties hereto covenant and agree as
follows:
1. SUMMARY OF DEFINED TERMS.
The parties agree that the following defined terms, as used in this
Lease, shall have the meanings and shall be construed as set forth below:
(a) "BUILDING": The Building owned by Landlord in fee and located at
680 Allendale Road, King of Prussia, Pennsylvania, and identified as Unit 680 in
the condominium complex known as Brandywine King of Prussia.
(b) "PROJECT": The Building, the land, the portions of the Parking
Area (as hereinafter defined) which are for the exclusive use of Tenant and all
other improvements located at 680 Allendale Road, King of Prussia, Pennsylvania.
(c) "PREMISES": Unit No. 680, which the parties hereto hereby
stipulate and agree is the entire 52,528 square feet of the Building shown on
the space plan attached hereto as Exhibit "A" and made a part hereof.
(d) "TERM": From November 1, 1999 to October 31, 2011.
(e) "FIXED RENT": Tenant shall pay to Landlord fixed rent as set forth
in the Rental Schedule attached hereto as Exhibit "B" and made a part hereof.
(f) "SECURITY DEPOSIT": $35,000.00;
(g) "EFFECTIVE DATE": As of November 1, 1999;
(h) "TENANT'S ALLOCATED SHARE": 100%:
(i) "RENTABLE AREA": Premises 52,528 ft.
Building 52,528 ft.
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(j) "PERMITTED USES": Tenant's use of the Premises shall be limited to
general bio-pharmaceutical research and development, product production and
distribution, including, general office and industrial uses and storage
incidental thereto, in accordance with all applicable laws and in keeping
with existing governmental zoning and permitted uses.
(k) "BROKER": CB Richard Ellis;
(l) "NOTICE ADDRESS/CONTACT"
Tenant: The Immune Response Corporation
5935 Darwin Court
Carlsbad, CA 92008
Attn: Paula B. Atkins
Vice President - Administration
With a copy to: Eric A. Kremer, Esquire
Pillsbury, Madison & Sutro LLP
Carmel Valley Center One
11975 El Camino Real
Suite 200
San Diego, CA 92130-2593
Landlord: BRANDYWINE OPERATING
PARTNERSHIP, L.P.
14 Campus Blvd., Suite 100
Newtown Square, Pennsylvania 19073
Attn: Anthony A. Nichols, Jr.
Vice President of Operations
With a copy to: Brandywine Realty Trust
14 Campus Blvd.
Suite 100
Newtown Square, Pennsylvania 19073
Attn: Brad A. Molotsky, Esquire
General Counsel
(m) "TENANT'S STANDARD INDUSTRIAL CLASSIFICATION NUMBER": 2836.
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(n) "ADDITIONAL RENT": All sums of money or charges required to be
paid by Tenant under this Lease other than Fixed Rent, whether or not such sums
or charges are designated as "Additional Rent".
(o) "RENT": All Annual Fixed Rent, monthly installments of Annual
Fixed Rent, Fixed Rent and Additional Rent payable by Tenant to Landlord under
this Lease.
(p) "PARKING AREA": The part of the Project which shall at all times
include not less than 100 parking spaces allocated for the exclusive use of
Tenant, as outlined in red on the site plan attached hereto as Exhibit C and
made a part hereof.
2. PREMISES. Landlord does hereby lease, demise and let unto Tenant and
Tenant does hereby hire and lease from Landlord the Premises for the Term, upon
the provisions, conditions and limitations set forth herein.
3. TERM. The Term of this Lease shall commence (the "Commencement Date")
on the Effective Date, which shall be as of November 1, 1999, and shall expire
on October 31, 2011.
4. CONSTRUCTION BY LANDLORD. Landlord hereby agrees to perform the
construction services set forth below at its sole cost and expense:
(a) Landlord hereby agrees to replace the entranceway steps on the
walkway from the Building located on the Southeast corner of the Building
closest to 3rd Avenue and Allendale Road.
(b) Landlord hereby agrees to install a screen around the equipment
located on the Southeast side of the Premises facing 660 Allendale Road.
(c) Landlord hereby agrees to reconfigure and repair the Parking Area
in accordance with the site plan attached hereto as Exhibit C-1 and made a part
hereof and to re-stripe and re-coat the parking lot.
(d) The work to be performed by Landlord in accordance with
subsections (a), (b) and (c) above shall be referred to collectively herein as
the "Landlord's Work."
(e) Except as set forth in subsections (a) and (b) above, Landlord is
not obligated to do any construction. However, Landlord shall provide Tenant
with a construction allowance equal to $10.00 psf or $525,280.00 (five hundred
twenty five thousand two hundred eighty dollars). Such allowance shall be paid
by Landlord upon substantial completion of the Tenant's Work as described on the
enclosed construction documents as part of Exhibit "D" attached hereto and made
a part hereof. Landlord acknowledges that the Landlord has reviewed and approved
the Tenant's proposed construction drawings. Subject to the terms and
conditions
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of this Lease, Tenant will have the sole and exclusive right to construct its
own tenant improvements.
5. FIXED RENT; SECURITY DEPOSIT.
(a) Tenant shall pay to Landlord without notice or demand, and
without set-off, the annual Fixed Rent payable in the monthly installments of
Fixed Rent as set forth in Article 1(e), in advance on the first day of each
calendar month during the Term by wire transfer of immediately available
funds to the account at First Union National Bank, account no. 2030000359075;
such transfer to be confirmed to Brandywine Realty Services Corporation's
accounting department (610-325-5622 - fax) by written facsimile with ABA
routing number 031000503. Notwithstanding the immediately preceding sentence,
the first month's installment and the security deposit shall be paid upon the
execution of this Lease by Tenant by two separate checks. Otherwise, Fixed
Rent shall not commence nor be due and owing until the Commencement Date.
(b) In the event any Fixed Rent or Additional Rent, charge, fee
or other amount due from Tenant under the terms of this Lease are not paid to
Landlord within ten (10) days of the date due, Tenant shall also pay as
Additional Rent a service and handling charge equal to ten (10%) percent of
the total payment then due. This provision shall not prevent Landlord from
exercising any other remedy herein provided or otherwise available at law or
in equity in the event of any default by Tenant.
(c) Tenant shall be required to pay a security deposit of Thirty
Five Thousand Dollars ($35,000) under this Lease (the "Collateral"), as
security for the prompt, full and faithful performance by Tenant of each and
every provision of this Lease and of all obligations of Tenant hereunder.
Landlord hereby acknowledges that Tenant shall have a credit against the
security deposit in the amount of Twenty-Seven Thousand Five Hundred Sixteen
Dollars and Sixty-Seven Cents ($27,516.67), representing the existing
security deposit under the Lease currently in effect between Landlord and
Tenant (the "Current Lease"). No interest shall be paid to Tenant on the
Collateral. If Tenant fails to perform any of its obligations hereunder after
applicable cure periods have expired, if any, Landlord may use, apply or
retain the whole or any part of the Collateral for the payment of (i) any
rent or other sums of money which Tenant may not have paid when due, (ii) any
sum expended by Landlord on Tenant's behalf in accordance with the provisions
of this Lease, and/or (iii) any sum which Landlord may expend or be required
to expend by reason of Tenant's default, including any damage or deficiency
in or from the reletting of the Premises as provided in this Lease. The use,
application or retention of the Collateral, or any portion thereof, by
Landlord shall cure Tenant's default to the extent of Landlord's use or
application thereof, but shall not otherwise prevent Landlord from exercising
any other right or remedy provided by this Lease or by law (it being intended
that Landlord shall not first be required to proceed against the Collateral)
and shall not operate as a limitation on any recovery to which Landlord may
otherwise be entitled. If any portion of the Collateral is used, applied or
retained by Landlord for the purposes set forth above, Tenant agrees, within
ten (10) days after
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the written demand therefor is made by Landlord, to deposit cash with the
Landlord in an amount sufficient to restore the Collateral to its original
amount.
If Tenant shall fully and faithfully comply with all of the provisions
of this Lease, the Collateral, or any balance thereof, shall be returned to
Tenant without interest within thirty (30) days after the expiration of the
Term or upon any later date after which Tenant has vacated the Premises. In
the absence of evidence satisfactory to Landlord of any permitted assignment
of the right to receive the Collateral, or of the remaining balance thereof,
Landlord may return the same to the original Tenant, regardless of one or
more assignments of Tenant's interest in this Lease or the Collateral. In
such event, upon the return of the Collateral, or the remaining balance
thereof to the original Tenant, Landlord shall be completely relieved of
liability under this Paragraph or otherwise with respect to the Collateral.
In the event of a sale of the Project and Building of which the Premises
form a part, Landlord shall have the right to transfer the Collateral to the
vendee or lessee and Landlord shall thereupon be released by Tenant from all
liability for the return of such Collateral; and Tenant agrees to look solely
to the new landlord for the return of said Collateral, and the provisions
hereof apply to every transfer or assignment made of the Collateral to a new
landlord. Tenant further covenants that it will not assign or encumber or
attempt to assign or encumber the Collateral and that neither Landlord nor
its successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
The Collateral shall not be mortgaged, assigned or encumbered in any
manner whatsoever by Tenant without the prior written consent of Landlord.
6. ADDITIONAL RENT.
(a) Commencing on the Commencement Date, and in each calendar
year thereafter during the Term (as same may be extended), Tenant shall pay
to Landlord, as Additional Rent, within thirty (30) days after Landlord
certifies to Tenant the amount thereof, the following charges ("Recognized
Expenses"), without deduction or set off, such charges to be based upon
Tenant's Allocated Share of such charges, as stated in Article 1(h) herein.
(1) INSURANCE PREMIUMS. All premiums paid or payable by
Landlord for insurance with respect to the Project, which premiums shall be
reasonable in context of both the Project and customary commercial insurance
coverage in the marketplace, as follows: (a) fire and extended coverage
insurance (including demolition and debris removal); (b) insurance against
Landlord's rental loss or abatement (but not including business interruption
coverage on behalf of Tenant), from damage or destruction from fire or other
casualty; (c) Landlord's comprehensive liability insurance (including bodily
injury and property damage) and boiler insurance; and (d) such other
insurance as Landlord or any reputable mortgage lending institution holding a
mortgage on the Premises may require.
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If the coverage period of any of such insurance obtained by Landlord
commences before or extends beyond the Term, the premium therefore shall be
prorated to the Term. If any such insurance is provided by blanket coverage,
the part of the premium allocated to the Project shall be equitably
determined by Landlord but shall not exceed the amount of premium due if
insurance was provided by a policy only insuring the Project. Should Tenant's
occupancy or use of the Premises at any time change and thereby cause an
increase in such insurance premiums on the Premises, Building and/or Project,
Tenant shall pay to Landlord the reasonable amount of such increase.
(2) OPERATING EXPENSES. The reasonable costs and expenses
related to the following activities with regard to the Project incurred and
paid by Landlord during the Term, including:
(a) All costs and expenses relating to taxes,
removing snow, ice and debris and maintaining all landscape areas (including
the placing and replanting of flowers, shrubbery and trees, maintaining and
repairing all other exterior improvements on the Project, all repairs and
compliance costs necessitated by laws enacted or which become effective after
the commencement date hereof (including, without limitation, any additional
regulations or requirements enacted after the date hereof regarding the
Americans With Disabilities Act (as such applies to the Project or common
areas but not to any individual tenant's space), if applicable) required of
Landlord under applicable laws, rules and regulations. Landlord's obligation
to provide snow removal services shall be limited to the parking areas and
the sidewalk entrances.
(b) All costs and expenses incurred by Landlord for
all replacement or repairs to the Parking Area, including, but not limited
to, re-striping and re-coating the Parking Area, once Landlord has completed
the reconfiguration and repair of the Parking Area and the re-striping and
re-coating of the parking lot in accordance with Section 4(c) hereof.
(c) All costs and expenses incurred by Landlord for
ordinary compliance type environmental testing, sampling or monitoring
required by statute, regulation or order of governmental authority, necessary
except any costs or expenses incurred in conjunction with the spilling or
depositing of any hazardous substance for which any person or other tenant is
legally liable.
(d) Capital expenditures to the extent considered
as an Operating Expense under this Article 6, shall be included as Operating
Expenses solely to the extent of the amortized costs of same over the useful
life of the improvement in accordance with generally accepted accounting
principles.
(3) EXCLUSIONS. Notwithstanding the foregoing, the term
"Recognized Expenses" shall NOT include any of the following:
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(a) Repairs or other work occasioned by fire, windstorm or
other insured casualty plus and "deductibles" or by the exercise of the right of
eminent domain;
(b) Leasing commissions, accountants', consultants',
auditors' or attorney's fees, costs and disbursements and other expenses
incurred in connection with negotiations or disputes with other tenants or
prospective tenants or other occupants, or associated with the enforcement of
any other leases or the defense of Landlord's title to or interest in the real
property or any part thereof;
(c) Costs incurred by Landlord in connection with
construction of the Building and related facilities, the correction of latent
defects in construction of the Building or the discharge of Landlord's Work;
(d) Costs (including permit, licenses and inspection fees)
incurred in renovating or otherwise improving or decorating, painting, or
redecorating the Building or space for other tenants or other occupants or
vacant space;
(e) Costs of any items or services sold or provided to
tenants (including Tenant) for which Landlord is reimbursed by such tenants;
(f) Depreciation and amortization;
(g) Costs incurred due to a breach by Landlord or any other
tenant of the terms and conditions of any lease;
(h) Overhead and profit increment paid to subsidiaries
or affiliates of Landlord for management or other services on or to the
Building or for supplies, utilities or other materials, to the extent that
the costs of such services, supplies, utilities or materials exceed the
reasonable costs that would have been paid had the services, supplies or
materials been provided by unaffiliated parties on a reasonable basis without
taking into effect volume discounts or rebates offered to Landlord as a
portfolio purchaser;
(i) Interest on debt or amortization payments on any
mortgage or deeds of trust or any other borrowings and any ground rent;
(j) Ground rents or rentals payable by Landlord pursuant to
any over-lease;
(k) Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord;
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(l) All items and services for which Tenant reimburses
Landlord or which Landlord provides selectively to one or more tenants or
occupants of the building (other than Tenant) without reimbursement;
(m) Costs incurred in managing or operating any "pay for"
parking facilities within the Project;
(n) Any fines or fees for Landlord's failure to comply with
governmental, quasi-governmental, or regulatory agencies' rules and regulations;
or
(o) Legal, accounting and other expenses related to
Landlord's financing, re-financing, mortgaging or selling the Building or the
Project.
(b) Tenant shall be required to pay all Taxes imposed on the
Project. Taxes shall be defined as all taxes, assessments and other
governmental charges ("Taxes"), including special assessments for public
improvements or traffic districts which are levied or assessed against the
Project during the Term (as may be extended) or, if levied or assessed prior
to the Term, which properly are allocable to the Term, and real estate tax
appeal expenditures incurred by Landlord to the extent of any reduction
resulting thereby. In the event that the real estate tax bills for the
property of which the Project is apart are broken down to tax separately the
Building and the land surrounding the Building that is designated as the
parking area, then the Tenant's responsibility shall be to pay all of the
real estate taxes set forth in said real estate tax bills. In the event that
there is not a separate real estate tax bill for the Building and the land
surrounding the Building, as noted aforesaid, then the Tenant shall be
required to pay its pro-rata portion of the real estate tax bills for the
property of which the Project is a part in two (2) components as follows: (i)
with regard to that portion of the real estate tax bills relating to all of
the buildings located on the property of which the Project is a part, the
Tenant shall pay its pro-rata share of said real estate taxes based upon the
square footage of the Premises to the total square footage of all buildings
located on the property of which the Project is a part, and (ii) with regard
to that portion of the real estate tax bills representing a tax assessment
for the land of the property of which the Project is a part, including the
Parking Area and the land under the above-described buildings, the Tenant
shall pay its equitable share of real estate taxes for said land on a
pro-rata basis.
Nothing herein contained shall be construed to include as Taxes:
(A) any inheritance, estate, succession, transfer, gift, franchise, corporation,
net income or profit tax or capital levy that is or may be imposed upon Landlord
or (B) any Taxes resulting from a transfer of the Building or the
Project; provided, however, that if at any time during the Term the method of
taxation prevailing at the commencement of the Term shall be altered so that in
lieu of or as a substitute for the whole or any part of the taxes now levied,
assessed or imposed on real estate as such there shall be levied, assessed or
imposed (i) a tax on the rents received from such real estate, or (ii) a license
fee measured by the rents receivable by Landlord from the Premises or any
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portion thereof, or (iii) a tax or license fee imposed upon Premises or any
portion thereof, then the same shall be included in the computation of Taxes
hereunder.
(c) Beginning on the Commencement Date, with the payment for the
month of November, 1999 due on the date of the execution of this Lease,
Tenant shall pay, in monthly installments in advance, on account of Tenant's
Allocated Share of Recognized Expenses and Taxes, the estimated amount of
such Recognized Expenses and Taxes for such year as determined by Landlord in
its reasonable discretion and as set forth in a notice, such notice to
include the basis for such calculation, to be provided to Tenant prior to
such date. Until the estimate is modified from time to time by Landlord via
written notice to Tenant at least thirty (30) days prior to any adjustment,
the monthly installments to be paid by Tenant on account of Tenant's
Allocated Share of Recognized Expenses and Taxes shall be based upon an
annual charge of Seventy-Five Thousand Dollars ($75,000.00), which equals
monthly payments in the amount of Six Thousand Two Hundred Fifty Dollars
($6,250.00) per month. Prior to the end of that year and hereafter for each
successive calendar year (each, a "Lease Year"), or part thereof, Landlord
shall send to Tenant a statement of projected increases in Recognized
Expenses and Taxes and Landlord shall indicate what Tenant's projected share
of Recognized Expenses and Taxes shall be. Said amount shall be paid in
equal monthly installments in advance by Tenant as Additional Rent commencing
January 1 of the applicable Lease Year.
Tenant shall have the right, at its sole cost and expense, to
audit or have its appointed accountant audit Landlord's records relating to
Recognized Expenses and Taxes provided that any such audit may not occur more
frequently than once each calendar year nor apply to any year prior to the
then current calendar year. In the event Tenant's audit discloses any
discrepancy in the amount of the Recognized Expenses or Taxes, Landlord and
Tenant shall use their best efforts to resolve the dispute and make an
appropriate adjustment, failing which they shall submit any such dispute to
arbitration pursuant to the rules and under the jurisdiction of the American
Arbitration Association in Delaware County, Pennsylvania. The decision
rendered in such Arbitration shall be final, binding and non-appealable. The
expenses of Arbitration, other than individual legal and accounting expenses
which shall be the respective parties' responsibility, shall be divided
equally between the parties. In the event, by agreement or as a result of an
arbitration decision, it is determined that the actual recognized expenses
exceeded those claimed by the Landlord by more than five percent (5%), the
actual, reasonable hourly costs to Tenant of Tenant's audit (including legal
and accounting costs) shall be reimbursed by Landlord. Tenant agrees not to
utilize a contingent fee auditor.
If during the course of any Lease Year, Landlord shall have
reason to believe that the Recognized Expenses and Taxes shall be different than
that upon which the aforesaid projections were originally based, then Landlord,
following sixty (60) days written notice to Tenant, shall be entitled to adjust
the amount by reallocating the remaining payments for such year, for the months
of the Lease Year which remain for the revised projections, and to advise Tenant
of an adjustment in future monthly amounts to the end result that the Recognized
Expenses and Taxes shall be collected on a reasonably current basis each Lease
Year.
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In calculating the Recognized Expenses as hereinbefore
described, if for thirty (30) or more days during the preceding Lease Year less
than ninety-five (95%) percent of the rentable area of the Building shall have
been occupied by tenants, then the Recognized Expenses attributable to the
Property shall be deemed for such Lease Year to be amounts equal to the
Recognized Expenses which would normally be expected to be incurred had such
occupancy of the Building been at least ninety-five (95%) percent throughout
such year, as reasonably determined by Landlord (i.e., taking into account that
certain expenses depend on occupancy and certain expenses do not (E.G.,
landscaping)). Furthermore, if Landlord shall not furnish any item or items of
Recognized Expenses to any portions of the Building because such portions are
not occupied or because such item is not required by the tenant of such portion
of the Building, for the purposes of computing Recognized Expenses, an equitable
adjustment shall be made so that the item of Operating Expense in question shall
be shared only by tenants actually receiving the benefits thereof.
Within four (4) months following the end of each Lease Year or
as soon thereafter as administratively available, Landlord shall send to Tenant
an itemized statement of actual expenses incurred for Recognized Expenses and
Taxes for the prior Lease Year showing the Allocated Share due from Tenant.
Landlord shall use its reasonable efforts to provide Tenant with the aforesaid
statements on or before April 30 of each Lease Year; provided, however, if
Landlord is unable to provide such statements by April 30, Landlord shall not
have been deemed to waive its right to collect any such amounts as Additional
Rent. If Landlord is unable to provide final statements on or before April 30 of
each Lease Year, Landlord shall provide Tenant with its unaudited internal
estimates of such costs by April 30, with the caveat that the final statements
may deviate from the estimate provided. In the event the amount prepaid by
Tenant exceeds the amount that was actually due then Landlord shall issue a
credit to Tenant in an amount equal to the over charge, which credit Tenant may
apply to future payments on account of Recognized Expenses and Taxes until
Tenant has been fully credited with the over charge. If the credit due to Tenant
is more than the aggregate total of future rental payments, Landlord shall pay
to Tenant the difference between the credit in such aggregate total. In the
event Landlord has undercharged Tenant then Landlord shall send Tenant an
invoice with the additional amount due, which amount shall be paid in full by
Tenant within thirty (30) days of receipt.
Each of the Recognized Expense and Amount of Taxes, whether
requiring lump sum payment or constituting projected monthly amounts added to
the Fixed Rent, shall for all purposes be treated and considered as Additional
Rent and the failure of Tenant to pay the same as and when due in advance and
without demand shall have the same effect as failure to pay any installment of
the Fixed Rent.
Landlord will provide Tenant with a copy of the real estate
tax bills for the Premises promptly after the Landlord's receipt of the same.
The failure of the Landlord to furnish copies of said real estate tax bills to
Tenant shall not be deemed to be a default under this Lease unless the Landlord
fails to furnish copies of said real estate tax bills within ten (10) days after
receipt of written notice from Tenant requesting said real estate tax bills.
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If this Lease terminates other than at the end of a calendar
year, Landlord's annual estimate of Recognized Expenses and Taxes shall be
accepted by the parties as the actual Recognized Expenses and Taxes for the year
the Lease ends unless and until Landlord provides Tenant with actual statements
in accordance with this subsection 6(c).
7. UTILITIES. From and after the Commencement Date, Tenant
shall make arrangements with each utility company and public body to provide,
in Tenant's name, gas, electricity, water, sewer, telephone, heat, and air
conditioning necessary for Tenant's use of the Premises, and Tenant shall
cause all such utilities to be separately metered, to the extent possible.
Tenant shall pay directly to the companies furnishing utility service the
cost of all service connection fees and the cost of all utilities consumed
throughout the Term. If the water service is not separately metered, Landlord
shall pay water bills for the Building, and Tenant shall pay to Landlord
prior to the time when each bill becomes due an amount determined by Landlord
based on the actual cost thereof attributable to Tenant's usage. In the event
that Tenant fails to pay in a timely manner any sum required under this
Section, Landlord shall have the right, but not the obligation, to pay any
such sum. Any sum so paid by Landlord shall be deemed to be owing by Tenant
to Landlord and due and payable as Additional Rent within five (5) business
days after written demand therefor.
Tenant's obligations for the payment of the costs incurred for
utilities that serve the Premises prior to the termination of this Lease shall
survive termination hereof.
Landlord shall provide 7 days per week, 24 hour per day
("Working Hours"), excluding legal holidays, the Premises with heat and
air-conditioning in the respective seasons for comfortable occupancy of the
subject premises, and provide the Premises with electricity for lighting and
usual office equipment.
8. MANAGEMENT FEE. Tenant shall be required to pay to Landlord an
annual management fee ("Management Fee") in the amount of four percent (4%) of
the annual fixed rent to be paid by Tenant to Landlord during the Term (as may
be extended) of this Lease. The Management Fee shall be paid on a monthly basis
commencing on the Commencement Date.
9. SIGNS; USE OF PREMISES AND COMMON AREAS.
(a) Tenant, at its sole cost and expense and option, will
provide Building and monument signage in a location and style of design
acceptable to Landlord. Landlord's approval shall not be unreasonably withheld
or delayed. The subject signage will be compatible with building design and
shall conform with all applicable local government codes, shall be fully visible
and free of any and all obstructions such as landscaping and such visibility
shall be maintained throughout the Term (as may be extended). Tenant shall be
required to obtain, at its sole cost and expense, all permits and approvals
necessary for said signage. Landlord will cooperate with Tenant in an effort to
obtain said approvals.
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(b) Tenant may use and occupy the Premises only for the
express and limited purposes stated in Article 1(j) above; and the Premises
shall not be used or occupied, in whole or in part, for any other purpose
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed, taking into consideration such factors as
environmental impact, the use of other leased premises on the property of
which the Premises is a part by other tenants, the effect on insurance rates
of said proposed use and other reasonable factors deemed by Landlord to be
relevant in its decision; provided that Tenant's right to so use and occupy
the Premises shall remain expressly subject to the provisions of
"Governmental Regulations", Article 30 herein. No machinery or equipment
shall be permitted that shall cause excessive vibration, noise or disturbance
beyond the Premises. Provided that the Tenant is not in breach of any of its
obligations under this Lease and continues to pay all of its rental and
additional payment obligations under this Lease, the Tenant shall have the
right to vacate the Premises no more than one (1) time during each eighteen
(18) month period during the Term or any renewal term of this Lease for a
period of up to six (6) months. In the event that the Tenant vacates the
Premises for a period longer than 6months or vacates or otherwise abandons
the Premises more than one (1) time during each eighteen (18) month period
during the Term or any renewal term of this Lease, Tenant shall be in default
under this Lease. The term "vacate" , as used therein, shall be defined as
the Tenant failing to open for business or removing substantially all of its
client files or its furniture and equipment and personal property from the
Premises.
(c) Tenant shall not overload any floor or part thereof in
the Premises or the Building which exceeds the floor loading capacity of the
subject building, bringing in, placing, storing, installing or removing any
large or heavy articles, and Landlord may prohibit, or may direct and control
the location and size of, safes and all other heavy articles, and may
require, at Tenant's sole cost and expense, supplementary supports of such
material and dimensions as Landlord may deem necessary to properly distribute
the weight.
(d) Tenant shall not install in or for the Premises, without
Landlord's prior written approval with Landlord's said approval not to be
unreasonably withheld, conditioned or delayed, any equipment which requires more
electric current than Landlord is required to provide under this Lease, and
Tenant shall ascertain from Landlord the maximum amount of load or demand for or
use of electrical current which can safely be permitted in and for the Premises,
taking into account the capacity of electric wiring in the Building and the
Premises and the needs of Building common areas (interior and exterior) and the
requirements of other tenants of the Building, Tenant and shall not in any event
connect a greater load than such safe capacity.
(e) Tenant shall not commit or suffer any waste upon the
Premises, Building or Project or any nuisance, or any other act or thing which
may disturb the quiet enjoyment of any other tenant in the Building or Project.
(f) Tenant shall have the right to use the exterior paved
driveways and walkways of the Building for vehicular and pedestrian access to
the Building. Attached to the Lease as Exhibit C is the Parking Area. Landlord
has designated in red certain potential parking
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spaces comprising the Parking Area designated on Exhibit C. At all times,
Landlord shall designate for exclusive use by Tenant a minimum of 100 spaces
for the parking of automobiles of Tenant and its employees and business
visitors, incident to Tenant's permitted use of the Premises. Out of said 100
spaces, the 67 spaces that have been designated in orange will be permanent
parking spaces provided for Tenant's use and shall not be relocated at any
time by Landlord, except as otherwise provided for herein, without the prior
written consent of Tenant (the "Permanent Spaces"). With regard to the
remaining 33 spaces, said 33 spaces shall be selected by Landlord within the
circle drawn in yellow (the "Yellow Area") on Exhibit D (the "33 Spaces").
Upon not less than 10 business days prior written notice to Tenant, Landlord
may relocate the 33 Spaces within the Yellow Area. In connection with the
Landlord's construction activities affecting the Project, Landlord shall have
the right, upon not less than 10 business days prior written notice to Tenant
to relocate the Permanent Spaces and/or the 33 Spaces within the area drawn
in red on Exhibit D (the "Temporary Relocation Area"). In connection with the
relocation of the Permanent Spaces and the 33 spaces within the Temporary
Relocation Area, Landlord agrees that it: (i) shall use all reasonable
efforts to minimize the impact of its construction activities on the Tenant,
(ii) shall use all reasonable efforts to complete its construction activities
on an expedited basis, and (iii) shall use all reasonable efforts to keep the
Tenant informed, on a routine basis, in connection with the progress of its
construction activities. Landlord shall have the right to establish
reasonable regulations, applicable to all tenants, governing the use of or
access to any interior or exterior common areas; and such regulations, when
communicated by written notification from Landlord to Tenant, shall be deemed
incorporated by reference hereinafter and part of this Lease. Such regulation
shall not be interpreted, supplemented or modified in a manner which
materially and adversely affects Tenant's use or occupancy of the premises
under this Lease. The parking provided to Tenant under this subsection (f)
shall be at no cost to Tenant during the Term (and any extensions thereof)
and shall be exclusive to Tenant except in the event of emergency.
10. ENVIRONMENTAL MATTERS.
(a) HAZARDOUS SUBSTANCES.
(i) Tenant shall not, except as provided in subparagraph (ii)
below, bring or otherwise cause to be brought or permit any of its agents,
employees, contractors or invitees to bring in, on or about any part of the
Premises, Building or Project, any hazardous substance or hazardous waste in
violation of law, as such terms are or may be defined in (x) the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. 9601 ET SEQ., as the same may from time to time be amended, and the
regulations promulgated pursuant thereto ("CERCLA"); the United States
Department of Transportation Hazardous Materials Table (49 CFR 172.102); by
the Environmental Protection Agency as hazardous substances (40 CFR Part
302); the Clean Air Act; and the Clean Water Act, and all amendments,
modifications or supplements thereto; and/or (y) any other rule, regulation,
ordinance, statute or requirements of any governmental or administrative
agency regarding the environment (collectively, (x) and (y) shall be referred
to as an "Applicable Environmental Law").
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(ii) Tenant may bring to and use at the Premises, hazardous
substances, supplies or other items, incidental to its normal business
operations under the SIC Code referenced in paragraph 1(n) above in de
minimis quantities in accordance with Applicable Environmental Law. Tenant
shall store and handle such substances in strict accordance with applicable
Environmental Law. Notwithstanding the foregoing language contained in this
subsection (ii), Tenant shall have the right to store and handle those
materials listed in Exhibit E attached hereto (as the same may be updated as
provided below) and made a part hereof (collectively, the "Materials"), and
the storage and handling of said Materials in strict accordance with
Applicable Environmental Law shall not be deemed to be a breach of this
Lease. Also attached as Exhibit F is a copy of all permits obtained by Tenant
from the appropriate environmental authorities permitting Tenant to utilize
said Materials and Tenant hereby covenants to renew, update or obtain any and
all other permits necessary in order to comply with Applicable Environmental
Law. Tenant shall have the right to update the list of Materials on an annual
basis and to add materials thereto, provided that the addition of any
materials not set forth in Exhibit E shall be subject to at least ten (10)
days' prior written notice to, and the reasonable approval of, the Landlord;
provided, however, that Tenant shall be permitted to add additional
materials, and the Landlord shall be deemed to have given its reasonable
approval thereto provided that the Food & Drug Administration or other
governmental or regulatory authority has required Tenant to utilize said
additional material or materials, in which event the addition of said
material or materials shall be permitted, unless said materials, it not
utilized in accordance with all Applicable Environmental Law, would have a
potential material, adverse environmental impact on the Building, the
Project, the Premises or any operations thereon. Any added materials shall be
purchased, stored, handled, utilized and disposed of in strict accordance
with all Applicable Environmental Law. With regard to any Materials or
additional materials utilized by Tenant in connection with this Article 10,
Tenant shall be required, before receiving, storing, handling or using any
said materials, to obtain all federal, state and local licenses, permits and
approvals required by Applicable Environmental Law.
(b) SIC NUMBERS.
(i) Tenant represents and warrants that Tenant's SIC (Standard
Industrial Classification) number as designated in the Standard
Classification Manual prepared by the Office of Management and Budget, and as
set forth in Article 1(m) hereof, is correct. Tenant represents that the
specific activities intended to be carried on in the Premises are in
accordance with Article 1(j).
(ii) Except for the Materials permitted in accordance with
Section 10(a)(ii) hereof, Tenant shall not engage in operations at the
Premises which involve the generation, manufacture, refining, transportation,
treatment, storage, handling or disposal of "hazardous substances" or
"hazardous waste" as such terms are defined under any Applicable
Environmental Law. Tenant further covenants that it will not cause or permit
to exist any "discharge" (as such term is defined under Applicable
Environmental Laws on or about the Premises.
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(iii) Tenant shall, at its expense, comply with all
requirements of Applicable Environmental Laws pertaining thereto.
(iv) In addition, upon written request of Landlord, Tenant
shall cooperate with Landlord in obtaining Applicable Environmental Laws
approval of any transfer of the Building of which the Premises form a part.
Specifically in that regard, Tenant agrees that it shall (1) execute and
deliver all affidavits, reports, responses to questions, applications or
other filings reasonably required by Landlord and related to Tenant's
activities at the Premises, (2) allow inspections and testing of the Premises
subject to prior notice and compliance with Tenant's security requirements,
and (3) as respects the Premises occupied by Tenant, perform any requirement
reasonably requested by Landlord necessary for the receipt of Applicable
Environmental Laws approval, provided the foregoing shall not require
interruption or modification of Tenant's permitted use of the premises for
the uses permitted under the lease and shall be at no out-of-pocket cost or
expense to Tenant except for clean-up and remediation costs arising from
Tenant's activities at the Premises.
(c) ADDITIONAL TERMS.
(i) In the event of Tenant's failure to comply in full with
this Article, Landlord may, after written notice to Tenant and Tenant's
failure to cure within thirty (30) days of its receipt of such notice, at
Landlord's option, perform any and all of Tenant's obligations as aforesaid
and all reasonable costs and expenses incurred by Landlord in the exercise of
this right shall be deemed to be Additional Rent payable on demand and with
interest at the Default Rate until payment at the rate provided in this Lease.
(ii) The parties acknowledge and agree that Tenant shall not be
held responsible for any environmental issue or violation of applicable
Environmental Law at the Premises unless such issue was caused by an action
or omission of Tenant or its agents, employees, consultants or invitees.
(iii) This Article 10 shall survive the expiration or sooner
termination of this Lease.
11. TENANT'S ALTERATIONS.
(a) Except as otherwise provided in this subsection (a), Tenant will
not cut or drill into or secure any fixture, apparatus or equipment or make
alterations, improvements or physical additions (collectively, "Alterations")
of any kind to any part of the Premises without first obtaining the written
consent of Landlord, such consent not to be unreasonably withheld. Landlord's
consent shall not be required with regard to those alterations that, in the
aggregate, cost less than $50,000.00 for each calendar year during the Term
or any renewal term of this Lease, provided said alterations are
non-structural in nature, do not affect the structural integrity of the
Building, do not in any material respect affect the cosmetic style of the
Building and do not
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adversely affect any utility systems or other building systems in or for the
Building. In addition, Landlord's consent shall not be required for the
installation of any office equipment or fixtures including internal
partitions which do not require disturbance of any structural elements or
systems (other than attachment thereto) within the Building. Tenant shall be
required to furnish to Landlord a full set of proposed plans and
specifications for the Alterations. If Landlord approves Tenant's
Alterations for which such approval is required and agrees to permit Tenant's
contractors to do the work, Tenant, prior to the commencement of labor or
supply of any materials, must furnish to Landlord (i) a duplicate or original
policy or certificates of insurance evidencing (a) general public liability
insurance for personal injury and property damage in the minimum amount of
$1,000,000.00 combined single limit, (b) statutory workman's compensation
insurance, and (c) employer's liability insurance from each contractor to be
employed (all such policies shall be non-cancelable without thirty (30) days
prior written notice to Landlord; (ii) construction documents prepared and
sealed by a registered Pennsylvania architect if such alteration is in excess
of $15,000; (iii) all applicable building permits required by law; and (iv)
an executed, effective Waiver of Mechanics Liens from such contractors and
all sub-contractors. Any consent by Landlord permitting Tenant to do any or
cause any work to be done in or about the Premises shall be and hereby is
conditioned upon Tenant's work being performed by workmen and mechanics
working in harmony and not interfering with labor employed by Landlord,
Landlord's mechanics or their contractors or by any other tenant or their
contractors. If at any time any of the workmen or mechanics performing any
of Tenant's work shall be unable to work in harmony or shall interfere with
any labor employed by Landlord, other tenants or their respective mechanics
and contractors, then the permission granted by Landlord to Tenant permitting
Tenant to do or cause any work to be done in or about the Premises, may be
withdrawn by Landlord upon forty-eight (48) hours written notice to Tenant.
Tenant shall be deemed to own all Alterations that are not deemed to be
fixtures subject to the provisions of this Section 11; provided, however,
that Landlord and Tenant agree that the Trade Fixtures of Tenant (as
hereinafter defined) shall not be deemed to be fixtures for purposes of this
Section 11. The term "Trade Fixtures", for purposes of this Section 11,
shall be comprised of the furniture, fixtures and equipment utilized by
Tenant in connection with its business operations and shall include items
such as, but not limited to, freezers, ovens, autoclaves and other equipment
that would not be deemed to be fixtures except for the fact that said items
are hooked or bolted or otherwise affixed onto existing fixtures of the
Building. At the expiration or sooner termination of this Lease, Tenant
shall be required to remove, at its sole cost an expense, all Trade Fixtures
in a good and workmanlike manner so as not to damage the Premises or
Building. Tenant shall be responsible for the repair of any damage caused by
the removal of the Trade Fixtures and shall be required, at its sole cost and
expense, to restore any areas affected by this Section 11(a) to a "vanilla
shell" condition.
(b) Not earlier than nine (9) months and not later than six (6)
months prior to the expiration of the Term or the Renewal Term of this Lease,
Tenant shall furnish to Landlord a written list of those items that Tenant
desires to remove from the Building upon said expiration. The Landlord
shall, within thirty (30) days of the receipt of said notification from
Tenant, determine, in its sole and exclusive discretion, and provide to
Tenant a written list and/or
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category of items (i) that Tenant shall be required to remove from the
Building in order to return the Building to a "vanilla shell" condition for
generic industrial space, and (ii) that Landlord agrees may be left in the
Building by Tenant. Tenant shall be permitted to remove those items, as
determined by Landlord in its reasonable judgement, that do not affect its
obligation to return the Building to a "vanilla shell" condition for generic
industrial space. In the event of any disagreement between the Landlord and
the Tenant with regard to any item set forth in this Section 11(b), said item
shall be required to be removed by Tenant unless said item is an item that
Landlord requires remain in the Building as part of the "vanilla shell."
Subject to the provisions of this Section 11(b), all items left on the
Premises by Tenant shall be the Landlord's property and shall remain on the
Premises without compensation to Tenant. Any installations, removals and
restoration by Tenant shall be in accordance with this Section 11(b) and
shall be accomplished at Tenant's sole cost and expense in a good and
workmanlike manner so as not to damage the Premises or Building. Tenant
shall be responsible for the repair of any damage caused by such
installation, removal and restoration and shall be required, at its sole cost
and expense, to restore any areas affected by this Section 11(b) to a
"vanilla shell" condition.
(c) If Tenant fails to remove any items required to be removed
pursuant to Section 11(a) or 11(b) hereof no later than the date of the
expiration or earlier termination of this Lease, Landlord may do so and the
reasonable costs and expenses thereof shall be deemed Additional Rent
hereunder and shall be reimbursed by Tenant to Landlord within fifteen (15)
business days of Tenant's receipt of an invoice therefor from Landlord.
12. CONSTRUCTION LIENS.
(a) Tenant will not voluntarily suffer or permit any
contractor's, subcontractor's or supplier's lien (a "Construction Lien") to
be filed against the Premises or any part thereof by reason of work, labor
services or materials supplied or claimed to have been supplied to Tenant;
and if any Construction Lien shall at any time be filed against the Premises
or any part thereof, Tenant, within (30) days after notice of the filing
thereof, shall cause it to be discharged of record by payment, deposit, bond,
order of a court of competent jurisdiction or otherwise. If Tenant shall
fail to cause such Construction Lien to be discharged within the period
aforesaid, then in addition to any other right or remedy, Landlord may, but
shall not be obligated to, discharge it either by paying the amount claimed
to be due or by procuring the discharge of such lien by deposit or by bonding
proceedings. Any amount so paid by Landlord, plus all of Landlord's
reasonable costs and expenses associated therewith (including, without
limitation, reasonable legal fees), shall constitute Additional Rent payable
by Tenant under this Lease and shall be paid by Tenant to Landlord on demand
with interest from the date of advance by Landlord at the Default Rate.
(b) Nothing in this Lease, or in any consent to the making of
alterations or improvements shall be deemed or construed in any way as
constituting authorization by Landlord for the making of any alterations or
additions by Tenant within the meaning of 49 P.S. Sections 1101-1902, as
amended or under the Contractor and Subcontractor Payment Act or any
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amendment thereof, or constituting a request by Landlord, express or implied,
to any contractor, subcontractor or supplier for the performance of any labor
or the furnishing of any materials for the use or benefit of Landlord.
13. ASSIGNMENT AND SUBLETTING.
(a) For any assignment and subletting, subject to the remaining
subsections of Article 13, except as expressly permitted pursuant to this
section, Tenant shall not, without the prior written consent of Landlord,
which consent is not to be unreasonably withheld or delayed, assign or
hypothecate this Lease or any interest herein or sublet the Premises or any
part thereof. Any of the foregoing acts without such consent shall be void
and shall, at the option of Landlord, terminate this Lease. Subject to
subparagraph 13(i) below, this Lease shall not, nor shall any interest
herein, be assignable as to the interest of Tenant by operation of law or by
merger, consolidation or asset sale, without the written consent of Landlord.
Tenant may assign the subject lease or may sublet the premises or any part
thereof, without Landlord's consent after notice, to any subsidiary, parent,
affiliate or controlled corporation which is owed at least 50% by Tenant, or
to any corporation to which Tenant may be converted or with which it may
merge with Tenant as survivor, or who acquires substantially all of Tenant's
stock or assets provided that as to asset acquisitions, (A) the financial
condition of the proposed assignee or sublessee is at least equal to the
financial condition of the Tenant as of the date of this Lease, as determined
by Landlord in its reasonable judgement, and (B) the prospective assignee and
the Tenant enter into an Assignment and Assumption Agreement with Landlord in
form and substance satisfactory to Landlord and its legal counsel, providing,
INTER ALIA, that the Tenant shall remain bound to Landlord under the Lease.
For any other subletting, Landlord agrees that it will not unreasonably
withhold, condition or delay its consent.
(b) If at any time or from time to time during the term of this
Lease Tenant desires to assign this Lease or sublet all or any part of the
Premises, Tenant shall give notice to Landlord of such desire, including the
name, address and contact party for the proposed assignee or subtenant, a
description of such party's business history, the effective date of the
proposed assignment of sublease (including the proposed occupancy date by the
proposed assignee or sublessee), and in the instance of a proposed sublease,
the square footage to be subleased, a floor plan professionally drawn to
scale, depicting the proposed sublease area, and a statement of the duration
of the proposed sublease (which shall in any and all events expire by its
terms prior to the scheduled expiration of this Lease, and immediately upon
the sooner termination hereof). Landlord may, at its option, and in its sole
and absolute discretion, exercisable by notice given to Tenant ("Landlord's
Election Notice") within forty-five (45) days next following Landlord's
receipt of Tenant's notice (which notice from Tenant shall, as a condition of
its effectiveness, include all of the above-enumerated information), elect to
recapture the Premises or such portion as is proposed by Tenant to be sublet
(and in each case, the designated and non-designated parking spaces included
in this demise, or a pro-rata portion thereof in the instance of the
recapture of less than all of the Premises), and terminate this Lease in the
instance of a proposed assignment, or recapture that portion of the Premises
proposed to be sublet (and a pro-rata
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portion of designated and non-designated parking spaces, as aforesaid) and
terminate the Lease with respect thereto, in the instance of a proposed
sublease; provided, however, that in the event that the Landlord elects to
recapture the Premises or such portion as is proposed by Tenant to be sublet,
Tenant shall be permitted to withdraw its request for an assignment or
sublease by furnishing written notice thereof to Landlord within five (5)
days of the date of the Landlord's Election Notice. The Landlord, if it so
elects, as an alternative to its option to recapture the Premises or such
portion as is proposed by Tenant to be sublet, shall have the right to allow
said assignment or sublease and, in said instance, Landlord shall be entitled
to retain one hundred percent (100%) of any additional payments (over and
above the Rent and Additional Rent payable under this Lease) received by
Tenant from said assignee or sublessee in connection with the assignment or
sublease of all or part of the Premises after Tenant's recovery of those
reasonable costs and expenses incurred directly in connection therewith.
Notwithstanding the language contained in this subsection (b), the Tenant
shall have the one time right to sublease up to 5,000 square feet of space in
the Premises, subject to the Landlord's approval in accordance with
Section 13(a) hereof, without the Landlord having the right to recapture said
space provided that said sublease is to one single sublessee for a one time
sublease right only. In the event that the sublease is for more than 5,000
square feet, or in the event that the sublease is not the first sublease
request under this Section 13, then Landlord shall have all of the recapture
rights set forth in this subsection (b). NOTWITHSTANDING THE LANGUAGE
CONTAINED IN THIS SECTION 14(b), THE TENANT SHALL HAVE THE RIGHT TO SUBLEASE
ONE HUNDRED PERCENT (100%) OF THE PREMISES FROM TIME TO TIME WITHOUT
TRIGGERING THE RIGHT OF THE LANDLORD TO RECAPTURE THE PREMISES UNDER THIS
SECTION 13(b) PROVIDED THAT (i) ALL OF THE OTHER TERMS AND CONDITIONS SET
FORTH IN THIS SECTION 13 AND THIS LEASE ARE MADE SUBJECT TO SAID SUBLEASE,
AND (ii) LANDLORD RECEIVES ONE HUNDRED PERCENT (100%) OF THE EXCESS RENT
RECEIVED BY TENANT FROM SAID SUBLESSEE (WITH NO DEDUCTION OF ANY COSTS OR
EXPENSES INCURRED BY TENANT IN CONNECTION THEREWITH), AND (iii) LANDLORD
SHALL HAVE THE FULL RIGHT TO RECAPTURE THE PREMISES IN THE EVENT THAT SAID
PROPOSED SUBLEASE WOULD OCCUR WITHIN THE LAST THREE (3) YEARS OF THE ORIGINAL
TERM OF THIS LEASE OR THE LAST EIGHTEEN (18) MONTHS OF ANY RENEWAL OPTION
UNDER THIS LEASE.
(c) If Landlord elects to recapture the Premises or a portion
thereof as aforesaid, then from and after the effective date thereof as
approved by Landlord, after Tenant shall have fully performed such
obligations as are enumerated herein to be performed by Tenant in connection
with such recapture, and except as to obligations and liabilities accrued and
unperformed (and any other obligations expressly stated in this Lease to
survive the expiration or sooner termination of this Lease), Tenant shall be
released of and from all lease obligations thereafter otherwise accruing with
respect to the Premises (or such lesser portion as shall have been recaptured
by Landlord). The Premises, or such portion thereof as Landlord shall have
elected to recapture, shall be delivered by Tenant to Landlord free and clear
of all furniture, furnishings, personal property and removable fixtures, with
Tenant repairing and restoring any and all damage to the Premises resulting
from the installation, handling or removal thereof, and otherwise in the same
condition as Tenant is, by the terms of this Lease, required to redeliver the
Premises to Landlord upon the expiration or sooner termination of this Lease.
The cost of erecting any required demising walls, entrances and entrance
corridors, and any other or further
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improvements required in connection therewith, including without limitation,
modifications to HVAC, electrical, plumbing, fire, life safety and security
systems (if any), painting, wallpapering and other finish items as may be
acceptable to or specified by Landlord, all of which improvements shall be
made in accordance with applicable code requirements and Landlord's
then-standard base building specifications, shall be performed by Landlord's
contractors, at Tenant's sole cost and expense. Upon the completion of any
recapture and termination as provided herein, Tenant's remaining Fixed Rent,
Operating Expense and remaining monetary obligations of Tenant shall be
adjusted pro-rated based upon the reduced rentable square footage then
comprising the Premises.
(d) If Landlord provides written notification to Tenant electing
not to recapture the Premises (or so much thereof as Tenant had proposed to
sublease), then Tenant may proceed to market the designated space and may
complete such transaction and execute an assignment of this Lease or a
sublease agreement (in each case in form acceptable to Landlord) within a
period of five (5) months next following Landlord's notice to Tenant that it
declines to recapture such space, provided that Tenant shall have first
obtained in any such case the prior written consent of Landlord to such
transaction, which consent shall not be unreasonably withheld. If, however,
Tenant shall not have assigned this Lease or sublet the Premises with
Landlord's prior written consent as aforesaid within five (5) months next
following Landlord's notice to Tenant that Landlord declines to recapture
the Premises (or such portion thereof as Tenant initially sought to sublease),
then in such event, Tenant shall again be required to request Landlord's
consent to the proposed transaction, whereupon Landlord's right to recapture
the Premises (or such portion as Tenant shall desire to sublease) shall be
renewed upon the same terms and as otherwise provided in subsection (b) above.
For purposes of this Section 13(d), and without limiting the
basis upon which Landlord may withhold its consent to any proposed assignment
or sublease, the parties agree that it shall not be unreasonable for Landlord
to withhold its consent to such assignment or sublease if: (i) the proposed
assignee or sublessee shall have a net worth less than the net worth of
Tenant at the time Tenant executes this Lease, or which is otherwise not
acceptable to Landlord in Landlord's reasonable discretion; (ii) the proposed
assignee or sublessee shall have no reliable credit history or an unfavorable
credit history, or other reasonable evidence exists that the proposed
assignee or sublessee will experience difficulty in satisfying its financial
or other obligations under this Lease; (iii) the proposed assignee or
sublessee, in Landlord's reasonable opinion, is not reputable and of good
character; (iv) the portion of the Premises requested to be subleased renders
the balance of the Premises unleasable as a separate area; (v) Tenant is
proposing a sublease at a rental or subrental rate which is substantially
less than the then fair market rental rate for the portion of the Premises
being subleased or assigned, or Tenant is proposing to assign or sublease to
an existing tenant of the Building or another property owned by Landlord or
by its partners, or to another prospect with whom Landlord or its partners,
or their affiliates are then negotiating; (vi) the proposed assignee or
sublessee will cause Landlord's existing parking facilities to be reasonably
inadequate, or in violation of code requirements, or require Landlord to
increase the parking area or the number of parking spaces to meet code
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requirements, or the nature of such party's business shall reasonably require
more than four (4) parking spaces per per 1,000 rentable square feet of floor
space, or (vii) the nature of such party's proposed business operation would
or might reasonably permit or require the use of the Premises in a manner
inconsistent with the "Permitted Use" specified herein, would or might
reasonably otherwise be in conflict with express provisions of this Lease,
would or might reasonably violate the terms of any other lease for the
Building, or would, in Landlord's reasonable judgement, otherwise be
incompatible with other tenancies in the Building.
(e) Any sums or other economic consideration received by Tenant
as a result of any subletting, assignment or license (except rental or other
payments received which are attributable to the amortization of the cost of
leasehold improvements made to the sublet or assigned portion of the premises
by Tenant for subtenant or assignee, and other reasonable expenses incident
to the subletting or assignment, including standard leasing commissions)
whether denominated rentals under the sublease or otherwise, which exceed, in
the aggregate, the total sums which Tenant is obligated to pay Landlord under
this Lease (prorated to reflect obligations allocable to that portion of the
premises subject to such sublease or assignment) shall be paid fifty (50)
percent to Landlord in their entirety without affecting or reducing any other
obligation of Tenant hereunder.
(f) Regardless of Landlord's consent, no subletting or
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the Rent and to perform all other obligations to
be performed by Tenant hereunder. Consent to one assignment or subletting
shall not be deemed consent to any subsequent assignment or subletting.
(g) In the event that (i) the Premises or any part thereof are
sublet and Tenant is in default under this Lease, or (ii) this Lease is
assigned by Tenant, then, Landlord may collect Rent from the assignee or
subtenant and apply the net amount collected to the rent herein reserved; but
no such collection shall be deemed a waiver of the provisions of this Article
13 with respect to assignment and subletting, or the acceptance of such
assignee or subtenant as Tenant hereunder, or a release of Tenant from
further performance of the covenants herein contained.
(h) In connection with each proposed assignment or subletting of
the Premises by Tenant, Tenant shall pay to Landlord Landlord's reasonable
attorneys' fees in an amount not to exceed $750.00.
(i) Notwithstanding anything to the contrary contained herein,
regardless of whether Landlord shall consent thereto (or whether such
transaction shall otherwise be permitted hereunder upon notice to, but
without the consent of Landlord), no assignment of this Lease and no
subletting of the Premises or any portion thereof shall release Tenant of
Tenant's obligations hereunder, or alter the primary liability of Tenant to
pay the Rent and to perform any and all other obligations to be performed by
the holder of the tenant interest hereunder, and it shall be an express
condition of any assignment or sublease that a fully-executed, original
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counterpart of the assignment or sublease agreement, in form specified by or
otherwise acceptable to Landlord, shall be furnished to Landlord prior to the
effective date thereof. Any assignment document shall, among its terms,
contain an express agreement by the assignee to assume and be bound by all of
the obligations to be performed and discharged by the holder of the tenant
interest hereunder, and shall include an affirmation by the assignor of its
continuing primary liability hereunder notwithstanding such assignment. Any
sublease document shall, among its terms, be expressly subject and
subordinate in all respects to this Lease, and the shall contain an
affirmation by the sublessor of its continuing primary liability hereunder
notwithstanding such sublease. The acceptance of rental by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision
hereof. Consent to one assignment or subletting shall not be deemed consent
to any subsequent assignment or subletting. In the event of default by any
assignee of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee or successor.
(j) Anything in this Article 13 to the contrary
notwithstanding (including, without limitation, any provisions herein
regarding permitted assignments or subleases) no assignment or sublease shall
be permitted under this Lease if, at the time Tenant seeks approval
therefor, or at any time thereafter until such assignment or sublease becomes
effective and shall be implemented, Tenant is in default beyond applicable
cure periods of any of its obligations under this Lease.
14. LANDLORD'S RIGHT OF ENTRY. Subject to the provisions of Section
38(T) hereof, Landlord and persons authorized by Landlord may enter the
Premises at all reasonable times upon not less than forty-eight (48) hours
notice (except in the case of an emergency in which case no prior notice is
necessary) for the purpose of inspections, repairs, alterations to adjoining
space, appraisals, or other reasonable purposes; including enforcement of
Landlord's rights under this Lease. Landlord shall not be liable for
inconvenience to or disturbance of Tenant by reason of any such entry other
than resulting from the negligence or intentional misconduct of Landlord or
its agents; provided, however, that in the case of repairs or work, such
shall be done, so far as practicable, so as to not unreasonably interfere
with Tenant's use of the Premises. Provided, however, that such efforts shall
not require Landlord to use overtime labor unless Tenant shall pay for the
increased costs to be incurred by Landlord for such overtime labor. Landlord
also shall have the right to enter the Premises at all reasonable times after
giving not less than three (3) days prior notice to Tenant, to exhibit the
Premises to any prospective purchaser, tenant and/or mortgagee.
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15. REPAIRS AND MAINTENANCE.
(a) Except as specifically otherwise provided in subparagraphs
(b) and (c) of this Article, Tenant, at its sole cost and expense and
throughout the Term (as may be extended) of this Lease, shall keep and
maintain the Premises in good order and condition, free of accumulation of
dirt and rubbish, and shall promptly make all repairs other than repairs to
the footings and foundations and the structural steel columns and girders
forming a part of the Premises necessary to keep and maintain such good order
and condition. Tenant shall have the option of replacing lights, ballasts,
tubes, ceiling tiles, outlets and similar equipment itself or it shall have
the ability to advise Landlord of Tenant's desire to have Landlord make such
repairs. If requested by Tenant, Landlord shall make such repairs to the
Premises with a reasonable time of notice to Landlord and shall charge Tenant
for such services at Landlord's standard rate (such rate to be competitive
with the market rate for such services). Tenant shall not use or permit the
use of any portion of the Premises for outdoor storage except for exterior
chemical storage in connection with Tenant's business operations at the
Premises, provided that (i) the proposed storage area is designated on the
plans to be provided in advance to the Landlord for its approval, (ii) Tenant
has received, at its sole cost and expense, all federal, state and local
permits, approvals and authorizations for the utilization of said storage
area, (iii) the installation, use and operation of the storage area complies
with all federal, state and local environmental and other laws, rules and
regulations, and (iv) in the event that said storage area utilizes an area
that would otherwise constitute one or more parking spaces in the Parking
Area, the parking space or spaces utilized for storage area shall be counted
in the number of parking spaces that Landlord is required to furnish to
Tenant hereunder. Tenant shall be permitted to utilize the area that the
previous tenant in the Premises utilized as a storage area provided, however,
that Tenant hereby acknowledges that Landlord makes no representations,
warranties or covenants regarding whether appropriate federal, state and
local permits, approvals, and authorizations were previously obtained in
connection with said storage area. When used in this Article 15, the term
"repairs" shall include replacements and renewals when necessary. All repairs
made by Tenant shall utilize materials and equipment which are at least equal
in quality and usefulness to those originally used in constructing the
Building and the Premises. Tenant shall maintain all HVAC systems serving the
Building and the Premises.
(b) Landlord, throughout the Term of this Lease and at
Landlord's sole cost and expenses, shall make all necessary repairs to the
footings and foundations and the structural steel columns and girders forming
a part of the Premises. Landlord shall also be responsible, at its sole cost
and expense, for correcting any violations of, or as may be necessary to
comply with, all municipal, county, state and federal governmental laws,
codes and requirements and repairs required to correct latent defects in the
Building, subject to the other provisions of this Lease. This requirement
does not apply if Tenant's equipment or use of the Premises is the cause for
such repair, in which event it shall be Tenant's responsibility at its sole
cost and expense to correct said violations.
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(c) Landlord, throughout the Term of this Lease, shall make
all necessary repairs to the Building outside of the Premises and the common
areas, including the roof, walls, exterior portions of the Premises and the
Building, utility lines, equipment and other utility facilities in the
Building, which serve more than one tenant of the Building, and to any
driveways, sidewalks, curbs, loading, parking and landscaped areas, and other
exterior improvements for the Building; provided, however, that Landlord
shall have no responsibility to make any repairs unless and until Landlord
receives written notice of the need for such repair. Tenant shall pay its
Allocated Share of the cost of all repairs to be performed by Landlord
pursuant to this Paragraph 15(c) as Additional Rent as provided, in Article 6
hereof. Tenant will receive a total of one hundred (100) parking spaces for
the subject building at no cost to the Tenant, during the entire lease term
and any extensions thereof, to be designated for Tenant's sole and exclusive
use. Said parking will be located immediately adjacent to the subject
building.
(d) Landlord shall keep and maintain all common areas
appurtenant to the Building and any sidewalks, parking areas, curbs and
access ways adjoining the Property in a clean and orderly condition, free of
accumulation of dirt, rubbish, snow and ice, and shall keep and maintain all
landscaped areas in a neat and orderly condition. Tenant shall pay its
Allocated Share of the cost of all work to be performed by Landlord pursuant
to this Paragraph (d) as Additional Rent as provided in Article 6 hereof.
(e) Notwithstanding anything herein to the contrary, repairs
to the Premises, Building or Project and its appurtenant common areas made
necessary by a negligent or wilful act or omission of Tenant or any employee,
agent, contractor, or invitee of Tenant which are not covered by insurance
required to be maintained under this Lease shall be made at the sole cost and
expense of Tenant.
16. INSURANCE; SUBROGATION RIGHTS.
(a) Tenant shall obtain and keep in force at all times during
the term hereof, at its own expense, comprehensive general liability
insurance including contractual liability and personal injury liability and
all similar coverage, with combined single limits of $3,000,000.00 on account
of bodily injury to or death of one or more persons as the result of any one
accident or disaster and on account of damage to property, or in such other
amounts as Landlord may from time to time require. The policy limits set
forth herein shall be subject to periodic review, and Landlord reserves the
right to require that Tenant increase the liability coverage limits if, in
the reasonable opinion of Landlord, the coverage becomes inadequate and is
less than commonly maintained by tenants of similar buildings in the area
making similar uses.
(b) Tenant shall, at its sole cost and expense, maintain in
full force and effect on all Tenant's trade fixtures, equipment and personal
property on the Premises, a policy of all risk property insurance covering
the full replacement value of such property.
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(c) All insurance required hereunder shall not be subject to
cancellation without at least thirty (30) days prior notice to all insureds,
and shall name Landlord, Brandywine Realty Trust, Landlord's Agent and Tenant
as insureds, as their interests may appear, and, if requested by Landlord,
shall also name as an additional insured any mortgagee or holder of any
mortgage which may be or become a lien upon any part of the Premises. Prior
to the commencement of the Term, Tenant shall provide Landlord with
certificates and copies of the policy or policies of insurance above referred
to, with evidence that the coverages required have been obtained and that
premiums have been paid in full for the policy periods. Tenant shall also
furnish to Landlord throughout the term hereof replacement certificates or
copies of renewal policies, together with evidence of like paid premiums at
least thirty (30) days prior to the expiration dates of the then current
policy or policies. All the insurance required under this Lease shall be
issued by insurance companies authorized to do business in the Commonwealth
of Pennsylvania with a financial rating of at least an A-X as rated in the
most recent edition of Best's Insurance Reports and in business for the past
five years. The limit of any such insurance shall not limit the liability of
Tenant hereunder. If Tenant fails to procure and maintain such insurance,
Landlord may, but shall not be required to, procure and maintain the same, at
Tenant's expense to be reimbursed by Tenant as Additional Rent within ten
(10) days of written demand. Any deductible under such insurance policy or
self-insured retention under such insurance policy in excess of Twenty Five
Thousand Dollars ($25,000.00) for products liability insurance and Five
Thousand Dollars ($5,000.00) for all other insurance coverages must be
approved by Landlord in writing prior to issuance of such policy. Tenant
shall not self-insure without Landlord's prior written consent, which consent
may be withheld by Landlord in its sole, exclusive discretion. The policy
limits set forth herein shall be subject to periodic review, and Landlord
reserves the right to require that Tenant increase the liability coverage
limits if, in the reasonable opinion of Landlord, the coverage becomes
inadequate and is less than commonly maintained by tenants of similar
buildings in the area making similar uses.
(d) Landlord shall obtain and maintain the following
insurance during the Term of this Lease: (i) replacement cost insurance
including all risk perils on the Building and on the Project, (ii) builder's
risk insurance for the Landlord Work to be constructed by Landlord in the
Project, and (iii) comprehensive liability insurance (including bodily injury
and property damage) covering Landlord's operations at the Project in amounts
reasonably required by the Landlord's lender or Landlord.
(e) Each party hereto, and anyone claiming through or under
them by way of subrogation, waives and releases any cause of action it might
have against the other party, including Tenant and Brandywine Realty Trust
and their respective employees, officers, members, partners, trustees and
agents, on account of any loss or damage that is insured against under any
insurance policy required to be obtained hereunder (to the extent that such
loss or damage is recoverable under such insurance policy) that covers the
Project, Building or Premises, Landlord's or Tenant's fixtures, personal
property, leasehold improvements or business and which names Landlord and
Brandywine Realty Trust or Tenant, as the case may be, as a party insured.
Each party hereto agrees that it will cause its insurance carrier to endorse
all applicable policies
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waiving the carrier's right to recovery under subrogation or otherwise against
the other party. During any period while such waiver of right of recovery is in
effect, each party shall look solely to the proceeds of such policies for
compensation for loss, to the extent such proceeds are paid under such policies.
17. INDEMNIFICATION. Except for any acts of Landlord's willful
misconduct or negligent acts, Tenant shall defend, indemnify and hold
harmless Landlord, Brandywine Realty Services Corp. and Brandywine Realty
Trust and their respective employees and agents from and against any and all
third-party claims, actions, damages, liability and expense (including all
attorney's fees, expenses and liabilities incurred in defense of any such
claim or any action or proceeding brought thereon) arising from (i) Tenant's
use of the Premises in violation of the terms of this Lease, (ii) the
improper conduct of Tenant's business in violation of this Lease, (iii) any
activity, work or things done, permitted or suffered by Tenant in or about
the Premises or elsewhere contrary to the requirements of the Lease, (iv) any
breach or default in the performance of any obligation of Tenant's part to be
performed under the terms of this Lease, and (v) any negligence or willful
act of Tenant or any of Tenant's agents, contractors or employees and/or
negligence or other tortious acts of third-parties not covered by insurance
policies required to be maintained under this Lease, and in case Landlord,
Brandywine Realty Services Corp. or Brandywine Realty Trust shall be made a
party to any litigation commenced by or against Tenant, its agents,
subtenants, licensees, concessionaires, contractors, customers or employees,
then Tenant shall defend, indemnify and hold harmless Landlord, Brandywine
Realty Services Corp. and Brandywine Realty Trust and shall pay all costs,
expenses and reasonable attorney's fees incurred or paid by Landlord,
Brandywine Realty Services Corp. and Brandywine Realty Trust in connection
with such litigation, after notice to Tenant and Tenant's refusal to defend
such litigation, and upon notice from Landlord shall defend the same at
Tenant's expense by counsel satisfactory to Landlord. Tenant shall further
indemnify and hold harmless Landlord, Brandywine Realty Services Corp. and
Brandywine Realty Trust from and against any and all third-party claims,
actions, damages, liability and expense (including, without limitation,
reasonable attorney's fees and disbursements) which may be imposed upon or
incurred by or asserted against Landlord by reason of (a) loss of life,
personal injury and/or damage to property occurring in or about, or arising
out of, the Premises, adjacent sidewalks and loading platforms or areas and
common areas appurtenant to the Building occasioned by any act or omission
of Tenant, its agents, subtenants, licensees, concessionaires, contractors,
customers, employees and/or third party and (b) any failure on the part of
Tenant to keep, observe and perform any of the terms, covenants, agreements,
conditions, limitations or Rules and Regulations contained in this Lease on
Tenant's part to be kept, observed and performed. The indemnification set
forth in this Section 17 shall not apply in a legal action commenced by
Tenant against Landlord for breach by Landlord of its obligations under this
Lease; provided, however, that said indemnification shall be applicable in
the event a counterclaim is filed by Landlord with respect to said legal
action that pertains to a subject matter that is covered by the
indemnification set forth in this Section 17.
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18. QUIET ENJOYMENT. Provided Tenant has performed all of the
terms and conditions of this Lease, including the payment of Fixed Rent and
Additional Rent, to be performed by Tenant, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Term, without hindrance from
Landlord, or anyone claiming by through or under Landlord under and subject
to the terms and conditions of this lease and of any mortgages now or
hereafter affecting all of or any portion of the Premises.
19. FIRE DAMAGE AND OTHER CASUALTIES.
(a) Except as provided below, in case of damage to the
Premises by fire or other insured casualty, Landlord shall repair the damage.
Such repair work shall be commenced promptly following notice of the damage
and completed with due diligence, taking into account the time required for
Landlord to effect a settlement with and procure insurance proceeds from the
insurer, except for delays due to governmental regulation, scarcity of or
inability to obtain labor or materials, intervening acts of God or other
causes beyond Landlord's reasonable control.
(b) Notwithstanding the foregoing, if (i) the damage is of a
nature or extent that, in Landlord's reasonable judgment (to be communicated
to the other within sixty (60) days from the date of the casualty), the
repair and restoration work would require more than one hundred eighty (180)
consecutive days to complete after the casualty and, assuming normal work
crews not engaged in overtime, or (ii) if more than thirty (30%) percent of
the total area of the Building is extensively damaged, Landlord and Tenant
each shall have the right to terminate this Lease and all the unaccrued
obligations of the parties hereto, by sending written notice of such
termination to the other within ten (10) days of receipt of the notice
described above. Such notice is to specify a termination date no less than
fifteen (15) days after its transmission; provided, however, that in addition
to the foregoing, in the event Tenant shall have also vacated the Premises
because the nature or extent of the damage rendered the Premises
untenantable, Tenant may by notice in writing to Landlord within five (5)
days of receipt of Landlord's written notice elect to make the termination of
the Lease retroactive to the date of such vacation of the Premises by Tenant.
Notwithstanding the foregoing, in the event Tenant is responsible for the
aforesaid casualty, Tenant shall NOT have the right to terminate this Lease
if Landlord is willing to rebuild and restore the Premises.
(c) If the insurance proceeds received by Landlord as dictated
by the terms and conditions of any financing then existing on the Building,
(excluding any rent insurance proceeds) would not be sufficient to pay for
repairing the damage or are required to be applied on account of any mortgage
which encumbers any part of the Premises or Building, or if the nature of
loss is not covered by Landlord's fire insurance coverage, Landlord may elect
either to (i) repair the damage as above provided notwithstanding such fact
or (ii) terminate this Lease by giving Tenant notice of Landlord's election
within thirty (30) days after Landlord's knowledge of the damage and of the
unavailability or insufficiency of insurance proceeds. If the election is to
terminate, Landlord shall give Tenant at least thirty (30) days prior notice
specifying the termination date.
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(d) In the event Landlord has not completed restoration of
the Premises within one hundred eighty (180) days from the date of casualty
(subject to delay due to weather conditions, shortages of labor or materials
or other reasons beyond Landlord's control which delay in any event will not
exceed an additional thirty (30) business days), Tenant may terminate this
Lease by written notice to Landlord within thirty (30) business days
following the expiration of such 180 day period (as extended for reasons
beyond Landlord's control as provided above) unless, within thirty (30)
business days following receipt of such notice, Landlord has substantially
completed such restoration and delivered the Premises to Tenant for occupancy.
(e) In the event of damage or destruction to the Premises or
any part thereof, Tenant's obligation to pay Fixed Rent and Additional Rent
shall be equitably adjusted or abated, provided the deduction or abatement of
Rent shall not exceed rent insurance proceeds received by Landlord attributable
to the Premises for the period during which it was damaged. Notwithstanding the
foregoing, there shall be no abatement in Rent or Additional Rent if Tenant
caused or is responsible for the casualty such that insurance proceeds are
unavailable therefor.
20. SUBORDINATION; RIGHTS OF MORTGAGEE.
(a) This Lease shall be subject and subordinate to the lien of
any mortgages now or hereafter placed upon the Premises, Building and/or Project
and land of which they are a part without the necessity of any further
instrument or act on the part of Tenant to effectuate such subordination. Tenant
further agrees to execute and deliver upon demand such further instrument or
instruments evidencing such subordination of this Lease to the lien of any such
mortgage and such commercially reasonable further instrument or instruments of
attornment as shall be desired by any mortgagee or proposed mortgagee or by any
other person provided Tenant receives a standard form of Nondisturbance
Agreement (defined below) from such mortgagee. Notwithstanding the foregoing,
any mortgagee may at any time subordinate its mortgage to this Lease, without
Tenant's consent, by notice in writing to Tenant, and thereupon this Lease shall
be deemed prior to such mortgage without regard to their respective dates of
execution and delivery and in that event such mortgagee shall have the same
rights with respect to this Lease as though it had been executed prior to the
execution and delivery of the mortgage.
(b) In the event Landlord shall be or is alleged to be in
default of any of its obligations owing to Tenant under this Lease, Tenant
agrees to give to the holder of any mortgage (collectively the "Mortgagee") now
or hereafter placed upon the Premises, Building and/or Project, notice by
registered mail of any such default which Tenant shall have served upon
Landlord, provided that prior thereto Tenant has been notified in writing (by
way of Notice of Assignment of Rents and/or Leases or otherwise in writing to
Tenant) of the name and addresses of any such Mortgagee. Tenant shall not be
entitled to exercise any right or remedy as there may be because of any default
by Landlord without having given such notice to the Mortgagee; and Tenant
further agrees that if Landlord shall fail to cure such default the Mortgagee
shall have any additional time periods (measured from the later of the date on
which the default should have been cured by Landlord or the Mortgagee's receipt
of such notice from Tenant), within which to
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cure such default, provided that if such default be such that the same could not
be cured within such period and Mortgagee is diligently pursuing the remedies
necessary to effectuate the cure (including but not limited to foreclosure
proceedings if necessary to effectuate the cure); then Tenant may not exercise
any right or remedy as there may be arising because of Landlord's default,
including but not limited to, termination of this Lease as may be expressly
provided for herein or available to Tenant as a matter of law, if the Mortgagee
either has cured the default within such time periods, or as the case may be,
has initiated the cure of same within such period and is diligently pursuing the
cure of same as aforesaid.
(c) Attached to this Lease as Exhibit F is a form of
Subordination, Attornment and Non-Disturbance Agreement ("Non-Disturbance
Agreement") that is hereby deemed to be acceptable in form and substance to each
of Landlord and Tenant. Landlord and Tenant hereby each agree that upon request
of the existing or a future mortgagee of Landlord, each of Landlord and Tenant
shall enter into the Non-Disturbance Agreement or a form of non-disturbance
agreement substantially similar to that set forth in Exhibit F. In the event
that a future mortgagee shall be unwilling to enter into the Non-Disturbance
Agreement as aforesaid, Landlord and Tenant hereby each agrees to utilize their
best efforts in good faith to agree to the form of a new non-disturbance
agreement with said future mortgage. In the event that Landlord, Tenant and
said future mortgagee are unable to agree upon the terms of a new
non-disturbance agreement, this Lease shall remain in full force and effect and
the obligations of Tenant shall not in any manner be affected except that,
anything to the contrary contained in this Lease notwithstanding, this Lease
shall not be subject and subordinate to such future mortgage. Tenant shall be
obligated to enter into a new non-disturbance agreement provided that its terms
are materially similar in substance to the Non-Disturbance Agreement.
21. CONDEMNATION.
(a) If more than twenty (20%) percent of the floor area of the
Premises is taken or condemned for a public or quasi-public use (a sale in lieu
of condemnation to be deemed a taking or condemnation for purposes of this
Lease), this Lease shall, at either party's option, terminate as of the date
title to the condemned real estate vests in the condemnor, and the Fixed Rent
and Additional Rent herein reserved shall be apportioned and paid in full by
Tenant to Landlord to that date and all rent prepaid for period beyond that date
shall forthwith be repaid by Landlord to Tenant.
(b) If less than twenty (20%) percent of the floor area of the
Premises is taken or if neither Landlord nor Tenant have elected to terminate
this Lease pursuant to the preceding sentence, Landlord shall do such work as
may be reasonably necessary to restore the portion of the Premises not taken to
tenantable condition for Tenant's uses, but shall not be required to expend more
than the net award Landlord reasonably expects to be available for restoration
of the Premises. If Landlord determines that the damages available for
restoration of the Building and/or Project will not be sufficient to pay the
cost of restoration, or if the condemnation damage award is required to be
applied on account of any mortgage which encumbers any part of the
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Premises, Building and/or Project, Landlord may terminate this Lease by giving
Tenant ninety (90) days prior written notice specifying the termination date.
(c) If this Lease is not terminated after any such taking or
condemnation, the Fixed Rent and the Additional Rent shall be equitably reduced
in proportion to the area of the Premises which has been taken for the balance
of the Term.
(d) If a part or all of the Premises shall be taken or
condemned, all compensation awarded upon such condemnation or taking shall go to
Landlord and Tenant shall have no claim thereto other than (i) Tenant's right to
bring a claim for the cost of the alterations made by Tenant at Tenant's sole
cost and expense, provided that said claim does not in any manner or affect
adversely affect any condemnation claim by Landlord, and (ii) Tenant's damages
associated with moving, storage and relocation; and Tenant hereby expressly
waives, relinquishes and releases to Landlord any claim for damages or other
compensation to which Tenant might otherwise be entitled because of any such
taking or limitation of the leasehold estate hereby created, and irrevocably
assigns and transfers to Landlord any right to compensation of all or a part of
the Premises or the leasehold estate.
22. ESTOPPEL CERTIFICATE. Each party agrees at any time and from
time to time, within ten (10) days after the other party's written request, to
execute, acknowledge and deliver to the other party a written instrument in
recordable form certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that it is in full force and effect
as modified and stating the modifications), and the dates to which Rent,
Additional Rent, and other charges have been paid in advance, if any, and
stating whether or not to the best knowledge of the party signing such
certificate, the requesting party is in default in the performance of any
covenant, agreement or condition contained in this Lease and, if so, specifying
each such default of which the signer may have knowledge. It is intended that
any such certification and statement delivered pursuant to this Article may be
relied upon by any prospective purchaser of the Project or any
mortgagee thereof or any assignee of Landlord's interest in this Lease or of any
mortgage upon the fee of the Premises or any part thereof.
23. DEFAULT.
If:
(i) Tenant shall fail to pay any installment of Fixed Rent or
any amount of Additional Rent when due and has failed to remit said repayment
within five (5) days of date of written notice thereof from Landlord, provided,
however, that in the event that any notice is required to be given by Landlord
more than two (2) times in any twelve (12) month period of this Lease or more
than ten (10) times during the Term or any renewal term of the Lease, Tenant
shall be deemed to be in default under this Lease without the requirement of any
notice from Landlord.
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(ii) Tenant "vacates" the Premises (other than in the case of a
permitted subletting or assignment) or permits the same to be unoccupied as
defined in Section 9(b) hereof.
(iii) Tenant fails to observe or perform any of Tenant's other
agreements or obligations herein contained within thirty (30) days after
written notice specifying the default, or the expiration of such additional
time period as is reasonably necessary to cure such default, provided Tenant
immediately commences and thereafter proceeds with all due diligence and in
good faith to cure such default,
(iv) Tenant makes any assignment for the benefit of creditors,
(v) Tenant commits an act of federal or state bankruptcy or
files a petition or commences any proceeding under any bankruptcy or
insolvency law,
(vi) a petition is filed or any proceeding is commenced against
Tenant under any federal or state bankruptcy or insolvency law and such
petition or proceeding is not dismissed within thirty (30) days,
(vii) Tenant is adjudicated a bankrupt,
(viii) Tenant by any act indicates its consent to, approval of
or acquiescence in, or a court approves, a petition filed or proceeding
commenced against Tenant under any federal or state bankruptcy or insolvency
law,
(ix) a receiver or other official is appointed for Tenant or
for a substantial part of Tenant's assets or for Tenant's interests in this
Lease,
(x) any attachment or execution against a substantial part of
Tenant's assets or of Tenant's interests in this Lease remains unstayed or
undismissed for a period of more than ten (10) days,
(xi) a substantial part of Tenant's assets or of Tenant's
interest in this Lease is taken by legal process in any action against
Tenant, or
(xii) Tenant shall have committed an Event of Default under the
terms of that certain Lease, dated even date herewith, by and between
Landlord and Tenant with regard to that certain land and premises known as
660 Allendale Road, King of Prussia, Pennsylvania,
then, in any such event, an Event of Default shall be deemed to exist and
Tenant shall be in default hereunder.
If an Event of Default shall occur, the following provisions shall apply
and Landlord shall have, in addition to all other rights and remedies
available at law or in equity, the rights and
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remedies set forth therein, which rights and remedies may be exercised upon
or at any time following the occurrence of an Event of Default unless, prior
to such exercise, Landlord shall agree in writing with Tenant that the
Event(s) of Default has been cured by Tenant in all respects.
(a) ACCELERATION OF RENT. By notice to Tenant, Landlord shall have the
right to accelerate all Fixed Rent and all expense installments due hereunder
and otherwise payable in installments over the remainder of the Term, and, at
Landlord's option, any other Additional Rent to the extent that such
Additional Rent can be determined and calculated to a fixed sum; and the
amount of accelerated rent to the termination date, without further notice or
demand for payment, shall be due and payable by Tenant within five (5) days
after Landlord has so notified Tenant, such amount collected from Tenant
pursuant to a judgment shall be discounted to present value using an interest
rate of ten percent (10%) per annum. Additional Rent which has not been
included, in whole or in part, in accelerated rent, shall be due and payable
by Tenant during the remainder of the Term, in the amounts and at the times
otherwise provided for in this Lease.
Notwithstanding the foregoing or the application of any rule of law based
on election of remedies or otherwise, if Tenant fails to pay the accelerated
rent in full when due, Landlord thereafter shall have the right by notice to
Tenant, (i) to terminate Tenant's further right to possession of the Premises
and (ii) to terminate this Lease under subparagraph (b) below; and if Tenant
shall have paid part but not all of the accelerated rent, the portion thereof
attributable to the period equivalent to the part of the Term remaining after
Landlord's termination of possession or termination of this Lease shall be
applied by Landlord against Tenant's obligations owing to Landlord, as
determined by the applicable provisions of subparagraphs (c) and (d) below.
(b) TERMINATION OF LEASE. By notice to Tenant, Landlord shall have the
right to terminate this Lease as of a date specified in the notice of
termination and in such case, Tenant's rights, including any based on any
option to renew, to the possession and use of the Premises shall end
absolutely as of the termination date; and this Lease shall also terminate in
all respects except for the provisions hereof regarding Landlord's damages
and Tenant's liabilities arising prior to, out of and following the Event of
Default and the ensuing termination.
Following such termination and the notice of same provided above (as well
as upon any other termination of this Lease by expiration of the Term or
otherwise) Landlord immediately shall have the right to recover possession of
the Premises; and to that end, Landlord may enter the Premises and take
possession, with the necessity of giving Tenant any notice to quit or any
other further notice, with legal process or proceedings, and in so doing
Landlord may remove Tenant's property (including any improvements or
additions to the Premises which Tenant made, unless made with Landlord's
consent which expressly permitted Tenant to not remove the same upon
expiration of the Term), as well as the property of others as may be in the
Premises, and make disposition thereof in such manner as Landlord may deem to
be commercially reasonable and necessary under the circumstances.
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(c) TENANT'S CONTINUING OBLIGATIONS/LANDLORD'S RELETTING RIGHTS
(1) Unless and until Landlord shall have terminated this Lease
under subparagraph (b) above, Tenant shall remain fully liable and
responsible to perform all of the covenants and to observe all the conditions
of this Lease throughout the remainder of the Term to the early termination
date; and, in addition, Tenant shall pay to Landlord, upon demand and as
Additional Rent, the total sum of all costs, losses and expenses, including
reasonable attorneys' fees, as Landlord incurs, directly or indirectly,
because of any Event of Default having occurred.
(2) If Landlord either terminates Tenant's right to possession
without terminating this Lease or terminates this Lease and Tenant's
leasehold estate as above provided, then, subject to the provisions below,
Landlord shall have the unrestricted right to relet the Premises or any
part(s) thereof to such tenant(s) on such provisions and for such period(s)
as Landlord may deem appropriate. If Landlord relets the Premises after such
a default, the costs recovered from Tenant shall be reallocated to take into
consideration any additional rent which Landlord receives from the new tenant
which is in excess to that which was owed by Tenant.
(d) LANDLORD'S DAMAGES.
(1) The damages which Landlord shall be entitled to recover from
Tenant shall be the sum of:
(A) all Fixed Rent and Additional Rent accrued and unpaid as
of the termination date; and
(B) (i) all reasonable costs and expenses incurred by Landlord
in recovering possession of the Premises, including removal and storage of
Tenant's property, in accordance with Section 11 hereof, (ii) the costs and
expenses of restoring the Premises to the condition in which the same were to
have been surrendered by Tenant as of the expiration of the Term and
accordance with Section 11 hereof, and (iii) the costs of reletting
commissions; and
(C) all Fixed Rent and Additional Rent (to the extent that the
amount(s) of Additional Rent has been then determined) otherwise payable by
Tenant over the remainder of the Term as reduced to present value.
Less deducting from the total determined under subparagraphs (A), (B) and (C)
all Rent and all other Additional Rent to the extent determinable as
aforesaid, (to the extent that like charges would have been payable by
Tenant) which Landlord receives from other tenant(s) by reason of the leasing
of the Premises or part during or attributable to any period falling within
the otherwise remainder of the Term.
(2) The damage sums payable by Tenant under the preceding provisions
of this paragraph (d) shall be payable on demand from time to time as the
amounts are
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determined; and if from Landlord's subsequent receipt of rent as aforesaid
from reletting, there be any excess payment(s) by Tenant by reason of the
crediting of such rent thereafter received, the excess payment(s) shall be
refunded by Landlord to Tenant.
(3) Landlord may distrain for rent, and enforce the provisions
of this Lease and may enforce and protect the rights of Landlord hereunder by a
suit or suits in equity or at law for the specific performance of any
covenant or agreement contained herein, and for the enforcement of any other
appropriate legal or equitable remedy, including, without limitation,
injunctive relief, and for recovery of all moneys due or to become due from
Tenant under any of the provisions of this Lease.
(e) LANDLORD'S RIGHT TO CURE. Without limiting the generality of
the foregoing, if Tenant shall be in default in the performance of any of its
obligations hereunder, Landlord, without being required to give Tenant any
notice or opportunity to cure, may (but shall not be obligated to do so), in
addition to any other rights it may have in law or in equity, cure such
default on behalf of Tenant, and Tenant shall reimburse Landlord upon demand
for any sums paid or costs incurred by Landlord in curing such default,
including reasonable attorneys' fees and other legal expenses, together with
interest at 10% per annum Rate from the dates of Landlord's incurring of
costs or expenses.
(f) ADDITIONAL REMEDIES. In addition to, and not in lieu of any of
the foregoing rights granted to Landlord:
(i) TENANT HEREBY EMPOWERS ANY PROTHONOTARY, CLERK OF COURT OR
ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR TENANT IN ANY AND ALL ACTIONS
WHICH MAY BE BROUGHT FOR EVICTION OF THE TENANT FROM THE PREMISES AND FOR
POSSESSION OF THE PREMISES BY LANDLORD, AND TO SIGN FOR TENANT AN AGREEMENT
FOR ENTERING IN ANY COMPETENT COURT AN ACTION OR ACTIONS FOR EVICTION OR
RECOVERY OF SAID POSSESSION, AND IN SAID SUIT OR IN SAID ACTION OR ACTIONS TO
CONFESS JUDGEMENT AGAINST TENANT FOR EVICTION AND FOR SUCH POSSESSION. SUCH
AUTHORITY SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF, BUT JUDGMENT MAY BE
CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS TENANT SHALL HAVE
COMMITTED AN EVENT OF DEFAULT, AND SUCH POWERS MAY BE EXERCISED AS WELL AFTER
THE EXPIRATION OF THE TERM OR DURING ANY EXTENSION OR RENEWAL OF THIS LEASE.
(g) INTEREST ON DAMAGE AMOUNTS. Any sums payable by Tenant
hereunder, which are not paid after the same shall be due, shall bear
interest from that day until paid at the rate of four (4%) percent over the
then Prime Rate as published daily under the heading "Money Rates" in THE
WALL STREET JOURNAL, unless such rate be usurious as applied to Tenant, in
which case the highest permitted legal rate shall apply (the "Default Rate").
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(h) LANDLORD'S STATUTORY RIGHTS. Landlord shall have all rights
and remedies now or hereafter existing at law or in equity with respect to
the enforcement of Tenant's obligations hereunder and the recovery of the
Premises. No right or remedy herein conferred upon or reserved to Landlord
shall be exclusive of any other right or remedy, but shall be cumulative and
in addition to all other rights and remedies given hereunder or now or
hereafter existing at law. Landlord shall be entitled to injunctive relief
in case of the violation, or attempted or threatened violation, of any
covenant, agreement, condition or provision of this Lease, or to a decree
compelling performance of any covenant, agreement, condition or provision of
this Lease.
(i) REMEDIES NOT LIMITED. Nothing herein contained shall limit
or prejudice the right of Landlord to exercise any or all rights and remedies
available to Landlord by reason of default or to prove for and obtain in
proceedings under any bankruptcy or insolvency laws, an amount equal to the
maximum allowed by any law in effect at the time when, and governing the
proceedings in which, the damages are to be proved, whether or not the amount
be greater, equal to, or less than the amount of the loss or damage referred
to above.
(j) NO WAIVER BY LANDLORD. No delay or forbearance by Landlord
in exercising any right or remedy hereunder, or Landlord's undertaking or
performing any act or matter which is not expressly required to be undertaken
by Landlord shall be construed, respectively, to be a waiver of Landlord's
rights or to represent any agreement by Landlord to undertake or perform such
act or matter thereafter. Waiver by Landlord of any breach by Tenant of
any covenant or condition herein contained (which waiver shall be effective
only if so expressed in writing by Landlord) or failure by Landlord to
exercise any right or remedy in respect of any such breach shall not
constitute a waiver or relinquishment for the future of Landlord's right to
have any such covenant or condition duly performed or observed by Tenant, or
of Landlord's rights arising because of any subsequent breach of any such
covenant or condition nor bar any right or remedy of Landlord in respect of
such breach or any subsequent breach. Landlord's receipt and acceptance of
any payment from Tenant which is tendered not in conformity with the
provisions of this Lease or following an Event of Default (regardless of any
endorsement or notation on any check or any statement in any letter
accompanying any payment) shall not operate as an accord and satisfaction or
a waiver of the right of Landlord to recover any payments then owing by
Tenant which are not paid in full, or act as a bar to the termination of this
Lease and the recovery of the Premises because of Tenant's previous default.
24. CURING TENANT'S DEFAULTS. If Tenant shall default in the
performance of any of its non-monetary obligations hereunder, Landlord
without prejudice and in addition to any other rights it may have at law or
in equity, after giving Tenant written notice of such default and after
failure by Tenant within thirty (30) days of the receipt of such notice to
correct or to undertake and diligently pursue correction of said default(s)
in which event the thirty day period shall be extended for a reasonable time
not to exceed an additional fifteen (15) days (which notice and/or
opportunity to cure shall not be required in case Landlord shall determine
that an emergency exists requiring prompt action), may cure such default(s)
on behalf of Tenant; and
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Tenant shall reimburse Landlord on demand for all costs incurred by Landlord
in that regard plus interest thereon from the date(s) of expenditure at the
Default Rate, which shall be deemed Additional Rent payable hereunder.
26. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents
and warrants to Tenant that: (a) Landlord is the fee owner of the Building
and the Project; and (b) Landlord has the authority to enter into this Lease.
27. SURRENDER. Tenant shall, at the expiration of the Term, promptly
quit and surrender the Premises in good order and condition and in conformity
with the applicable provisions of this Lease, excepting only reasonable wear
and tear and damage by fire or other insured casualty. Tenant shall have no
right to hold over beyond the expiration of the Term and in the event Tenant
shall fail to deliver possession of the Premises as herein provided, such
occupancy shall not be construed to effect or constitute other than a tenancy
at sufferance. During any period of occupancy beyond the expiration of the
Term the amount of rent owed to Landlord by Tenant shall automatically become
two hundred percent (200%) the sum of the Rent as those sums are at that time
calculated under the provisions of the Lease. If Tenant fails to surrender
the space within thirty (30) days of the termination date, Landlord may elect
to automatically extend the Term for an additional month or additional year,
at Landlord's option, with a Rent of two hundred percent (200%) the sum of
the Rent as those sums are at that time calculated under the provisions of
the Lease. The acceptance of rent by Landlord or the failure or delay of
Landlord in notifying or evicting Tenant following the expiration or sooner
termination of the Term shall not create any tenancy rights in Tenant and any
such payments by Tenant may be applied by Landlord against its costs and
expenses, including attorney's fees incurred by Landlord as a result of such
holdover. Landlord agrees to treat Tenant as a holdover (as opposed to a
trespasser) so long as Landlord and Tenant are negotiating in good faith to
extend the term of this Lease.
28. RULES AND REGULATIONS. Tenant agrees that at all times during the
terms of this Lease (as same may be extended) it, its employees, agents,
invitees and licenses shall comply with all rules and regulations specified
on EXHIBIT "G" attached hereto and made a part hereof, together with all
reasonable Rules and Regulations as Landlord may from time to time promulgate
provided they do not increase the financial burdens of Tenant or |
