Exhibit 10.4

 

DEED OF LEASE

 

TABLE OF CONTENTS

ARTICLE PAGE     1. DEFINITIONS 1 2. TERM 6 3. “AS-IS” CONDITION: WORK AGREEMENT
8 4. RENT 9 5. ADDITIONAL RENT 11 6. USE; ADA COMPLIANCE 13 7. CARE OF PREMISES;
LANDLORD'S OBLIGATION TO MAINTAIN BASE BUILDING 14 8. ALTERATIONS BY TENANT 15
9. EQUIPMENT 17 10. OWNERSHIP AND REMOVAL OF PROPERTY 18 11. LANDLORD'S ACCESS
TO PREMISES 19 12. SERVICES AND UTILITIES 19 13. RULES AND REGULATIONS 20 14.
REPAIR OF DAMAGE CAUSED BY TENANT:  INDEMNIFICATION 21 15. LIMITATION ON
LANDLORD LIABILITY 21 16. FIRE AND OTHER CASUALTY 22 17. INSURANCE 23 18.
CONDEMNATION 26 19. DEFAULT 26 20. NO WAIVER 30 21. HOLDING OVER 31 22.
SUBORDINATION 31 23. ASSIGNMENT AND SUBLETTING 32 24. TRANSFER BY LANDLORD 35
25. INABILITY TO PERFORM 35 26. ESTOPPEL CERTIFICATES 36 27. COVENANT OF QUIET
ENJOYMENT 36 28. WAIVER OF JURY TRIAL 36 29. BROKERS 36 30. CERTAIN RIGHTS
RESERVED BY LANDLORD 36 31. NOTICES 38 32. MISCELLANEOUS PROVISIONS 38   A.
Benefit and Burden 38   B. Governing Law 38   C. No Partnership 38   D.
Delegation by Landlord 38   E. Tenant Responsibility for Agents 38   F.
Invalidity of Particular Provisions 38   G. Counterparts 39   H. Entire
Agreement 39   I. Amendments 39   J. Mortgagee's Performance 39   K. Limitation
on Interest 39   L. Remedies Cumulative 39   M. Annual Financial Statements 39  
N. Construction of Lease 39   O. Time of the Essence 39   P. Effect of Deletion
of Language 39   Q. Authority 39   R. [Intentionally Omitted.] 40   S.
[Intentionally Omitted.] 40   T. Qualified Leases 40 33. CONTINGENCY FOR NOVAVAX
DOWNGRADE EVENT 40 34. PARKING 40 35. SECURITY DEPOSIT 42 36. HAZARDOUS
MATERIALS 44 37. [INTENTIONALLY OMITTED.] 47 38. NO RECORDATION 47 39. SIGNS 47
40. SURRENDER 48 41. OPTION TO EXTEND 49

 

 

 

 

42. TENANT’S TERMINATION OPTION 51 43. EXPANSION SPACE 51

 

Exhibit A - Building and Premises Plan Exhibit B - Declaration of Acceptance
Exhibit C - Work Agreement Exhibit D - Building/Premises Rules and Regulations
Exhibit E - Form of Letter of Credit Exhibit F - [Intentionally Omitted] Exhibit
G - Work Rules and Regulations

 

 

 

 

DEED OF LEASE

 

THIS DEED OF LEASE (the "Lease") is made and entered into this 3rd day of May,
2016, by and between IP9 1201 CLOPPER ROAD, LLC, a Maryland limited liability
company (“Landlord”) and NOVAVAX, INC., a Delaware corporation(“Tenant”).

 

In consideration of the Rent hereinafter reserved and the agreements hereinafter
set forth, Landlord and Tenant mutually agree as follows:

 

 

1. DEFINITIONS.

 

Lease Specific

 

A.    Building: a two (2) story building containing approximately one hundred
forty-seven thousand fifty-one (147,051) square feet of total rentable area as
of the date hereof and located at 1201 Clopper Road, Gaithersburg, Maryland, as
more particularly shown on Exhibit A. The Building consists of the “South Wing”
and the “North Wing” (each, a “Wing”), as more particularly shown on Exhibit A.
Except as otherwise expressly provided in this Lease, the term “Building” shall
include all portions of said building, including, but not limited to, the
Premises, the Common Areas and the parking areas serving the Building.

 

B.    Premises: The Premises comprises the entire Building. The rentable area in
the Building and in the Premises has been determined by Landlord's architect and
agreed upon by Tenant in accordance with the Building Owners and Managers
Association International Standard Method for Measuring Floor Area in Office
Buildings, ANSI/BOMA Z65.1-1996.

 

C.    [Intentionally Omitted.]

 

D.    Term: Approximately one hundred fifty-six (156) months following the Rent
Commencement Date, as more particularly defined in Section 2.A. hereof.

 

E.    Anticipated Lease Commencement Date: May 1, 2016. The actual Lease
Commencement Date shall be the date defined as such in Section 2.A. hereof.

 

F.    Base Rent: At the annual rate of Three Million Two Hundred Seventy One
Thousand Eight Hundred Eighty Four and 75/100 Dollars ($3,271,884.75) for the
first Lease Year, divided into equal monthly installments of Two Hundred
Seventy-Two Thousand Six Hundred Fifty Seven and 6/100 Dollars ($272,657.06) for
the first Lease Year, and thereafter as increased by the Base Rent Annual
Escalation Percentage, as set forth in Section 4.A hereof.

 

G.    Base Rent Annual Escalation Percentage: two and one-half percent (2.50%).

 

H.    [Intentionally Omitted.]

 

I.    [Intentionally Omitted.].

 

 

 

 

J.    Security Deposit: Eight Hundred Seventeen Thousand Nine Hundred
Seventy-One and 19/100 Dollars ($817,971.19), in the form of a Letter of Credit,
as more particularly set forth in Section 35.

 

K.    Brokers: Jones Lang LaSalle, as agent for Landlord and as agent for
Tenant.

 

L.    Tenant Notice Address: Novavax, Inc., 21 Firstfield Road, Gaithersburg, MD
20878, Attention: General Counsel, until Tenant has commenced beneficial use of
the Premises, and at the Premises, after Tenant has commenced beneficial use of
the Premises.

 

M.    Landlord Notice Address: IP9 1201 Clopper Road, LLC , c/o BPG Management
Company, L.P., 301 Oxford Valley Road, Suite 1203AYardley, PA 19067, Attention:
Property Manager, with copies to: Greenstein DeLorme & Luchs, P.C., 1620 L
Street, N.W., Suite 900, Washington, D.C. 20036, Attention: Jared S. Greenstein,
Esq.

 

N.    Landlord Payment Address: IP9 1201 Clopper Road, LLC, at c/o BPG
Management Company, L.P., 301 Oxford Valley Road, Suite 1203A, Yardley,
Pennsylvania 19067, Attention: Accounts Receivable; provided, however, that at
Landlord’s sole option, following at least thirty (30) days written notice to
Tenant, Tenant shall thereafter make all payments due and payable to Landlord
under this Lease by means of electronic transfers of funds from Tenant’s
financial institution to Landlord’s designated financial institution.

 

O.    [Intentionally Omitted.]

 

P.    Guarantor(s): None.

 

Q.    [Intentionally Omitted]

 

 

General

 

R.    Alterations: Any improvements, alterations, fixed decorations or
modifications, structural or otherwise, to the Premises, the Building or the
Land, as defined below, including but not limited to the installation or
modification of carpeting, partitions, counters, doors, air conditioning ducts,
plumbing, piping, lighting fixtures, wiring, hardware, locks, ceilings and
window and wall coverings.

 

S.    Common Areas: Those areas of the Building and/or Land, as the case may be,
made available by Landlord for use by Tenant in common with Landlord, and which
would otherwise be made available for other tenants of the Building if the
Building was multi-tenanted, and the employees, agents and invitees of Landlord.

 

T.    Default Rate: That rate of interest which is five (5) percentage points
above the annual rate of interest which is publicly announced by Bank of America
or its successor entity, if applicable ("Bank of America"), from time to time as
its "prime" rate of interest, irrespective of whether such rate is the lowest
rate of interest charged by Bank of America to commercial borrowers. In the
event that Bank of America ceases to announce such a prime rate of interest,
Landlord, in Landlord's reasonable discretion, shall designate the prime rate of
interest by another bank located in the Washington, D.C. metropolitan area,
which shall be the prime rate of interest used to calculate the default rate.

 

 2 

 

 

U.    Ground Leases: All ground and other underlying leases from which
Landlord's title to the Land and/or the Building is or may in the future be
derived. "Ground Lessors" shall denote those persons and entities holding such
ground or underlying leases.

 

V.    Holidays: New Year's Day, Presidents' Day, Martin Luther King, Jr.'s
Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day, Christmas Day and any other holidays designated by an
executive order of the President of the United States or by Act of Congress;
provided, however, that Landlord retains the right, in its sole discretion, to
increase or to decrease the legal holidays which it observes.

 

W.    Land: The real estate that supports the Building, and all associated
easements.

 

X.    Tenant's Work: All work to be performed by Landlord or Tenant, as
applicable, under the Work Agreement, including Additional Tenant Work (as
defined in Exhibit C).

 

Y.    Lease Commencement Date: The date this Lease commences, as determined
pursuant to Section 2.A. below.

 

Z.    Lease Year: The first Lease Year shall be the period of time commencing on
the Lease Commencement Date and ending on November 30, 2018, and each of the
following Lease Years shall be each consecutive twelve (12) month period
thereafter. The earliest such period shall be referred to as the "first Lease
Year," and each of the following Lease Years shall similarly be numbered for
identification purposes.

 

AA.        Mortgages: All mortgages, deeds of trust and similar security
instruments which may now or in the future encumber or otherwise affect the
Building or the Land, including mortgages related to both construction and
permanent financing. "Mortgagees" shall denote those persons and entities
holding such mortgages, deeds of trust and similar security instruments.

 

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BB.        Operating Expenses: All actual costs and expenses incurred by
Landlord during any calendar year in managing, operating and maintaining the
Building and the Land (as well), as determined by Landlord in accordance with
generally accepted accounting principles to the extent applicable, and otherwise
in accordance with an accounting system consistent with accounting systems used
by a commercially prudent landlords, and established and regularly applied by
Landlord. Such costs and expenses shall include, but not be limited to, the cost
of water, gas, sanitary sewer, storm sewer, electricity and other utilities,
trash removal, telephone services, insurance, janitorial and cleaning services
and supplies, security services, labor costs (including social security taxes
and contributions and fringe benefits), charges under maintenance and service
contracts (including, but not limited to, chillers, boilers, elevators, window
and security services), central heating and air conditioning, management fees
not to exceed three percent (3%) of all gross revenues from the Building,
business taxes, license fees, public space and vault rentals and charges and
costs, and the cost of any equipment or services provided by Landlord in
connection with the servicing, operation, maintenance, repair and protection of
the Building and the Land and related exterior appurtenances (whether or not
provided on the Lease Commencement Date). Operating Expenses shall include the
cost of capital improvements made by Landlord to manage, operate or maintain the
Building, together with any actual financing charges incurred in connection
therewith (not to exceed ten percent (10%)), provided that such costs shall be
amortized over the useful life of the improvements in accordance with generally
accepted accounting principles, and only the portion attributable to the
calendar year shall be included in Operating Expenses for the calendar year,
except that no portion thereof which is attributable to any capital improvement
which is completed at any time prior to the expiration of the Base Year shall be
included in Operating Expenses for any calendar year (including, but not limited
to, the Base Year); further provided, that such expenditures shall be limited to
(a) improvements or building elements added to the Building which in Landlord’s
reasonable judgment will increase the efficiency of the Building (i.e., are
reasonably anticipated by Landlord, based upon an analysis and recommendation
from an unaffiliated third party engineer or other professional consultant, to
reduce Operating Expenses as they relate to the item which is the subject of the
capital expenditure or to reduce the rate of increase in the Operating Expense
which relates to the item which is the subject of the capital expenditure from
what it otherwise may have been reasonably anticipated to be in the absence of
such capital expenditure (a “Cost Saving Capital Improvement”)), provided that
the amortization (principal plus interest) of any such Cost Saving Capital
Improvement is reasonably anticipated to be less than the anticipated savings
resulting from such increased efficiency as reasonably anticipated by Landlord,
based on an analysis and recommendation from a third party engineer or other
professional consultant, and (b) improvements or replacements which are required
to comply with the requirements of any laws, regulations, or insurance or
utility requirements. Operating Expenses shall not include: (i) Real Estate Tax
Expenses; (ii) payments of principal and interest on any Mortgages;
(iii) leasing commissions; (iv) costs of preparing, improving or altering any
space in preparation for occupancy of any new or renewal tenant; (v) capital
expenditures, except as specified above; (vi) the costs of special services and
utilities separately paid by particular tenants of the Building (including, but
not limited to, any services or utilities paid by Tenant pursuant to the terms
and conditions of this Lease, which costs shall be excluded from Operating
Expenses); (vii) costs which are reimbursed to Landlord by insurers or by
governmental authorities in eminent domain proceedings; (viii) advertising for
vacant space in the Building; (ix) costs of any equipment , services or
utilities which are provided solely to one or more retail tenants of the
Building; (x) wages, salaries and benefits paid to any persons not directly
involved with the management of the Building or the oversight thereof above the
level of portfolio manager; (xi) judgments against Landlord or the Building and
costs relating to (1) disputes with third parties including Tenant, tenants,
prospective tenants or other occupants of the Building, (2) disputes with
purchasers, prospective purchasers, mortgagees or prospective mortgagees of the
Building or the Property, or (3) negotiations of leases, contracts of sale or
mortgages; (xii) costs in the nature of penalties or fines if Tenant is then
current in the payment of all Rent due under this Lease; (xiii) costs for
services, supplies or repairs paid to any related entity in excess of costs that
would be payable in an “arm’s length” or unrelated situation for comparable
services, supplies or repairs; (xiv) allowances, concessions or other costs and
expenses of improving or decorating any demised or demisable space in the
Building; (xv) any costs or expenses (including fines, interest, penalties and
legal fees) arising out of Landlord’s or any other tenant’s breach of any lease,
including this Lease or Landlord’s failure to timely pay operating expenses or
real estate taxes if Tenant is then current in the payment of all Rent due under
this Lease; (xvi) costs incurred in connection with the survey, testing,
removal, encapsulation, remediation or other treatment of asbestos or any other
hazardous materials at the building or elsewhere; (xvii) any costs actually
reimbursed under any service contracts or under the warranty of any general
contractor, subcontractor or supplier and realized by Landlord; (xviii) reserves
for repairs, maintenance, and replacements except in the year spent for
Operating Expenses which are incurred as permitted under this Lease; and (xix)
costs of repairs incurred by reason of fire (other than for any reasonable
deductible) or other casualty or condemnation. In the event that, during any
calendar year or portion thereof during the Term, Landlord shall furnish any
utility or service which is included in the definition of Operating Expenses to
less than one hundred percent (100%) of the rentable area of the Building
because (i) less than all of the rentable area of the Building is occupied,
(ii) any such utility or service is not desired or required by any tenant, or
(iii) any tenant is itself obtaining or providing any such utility or service,
then the Operating Expenses for such calendar year shall be increased to equal
the total expenses that Landlord reasonably estimates it would have incurred if
Landlord had provided all such utilities and services to one hundred percent
(100%) of the rentable area of the Building for the entire calendar year. For
example, if the average occupancy rate of the Building during a calendar year is
eighty percent (80%), the janitorial contractor's charges are $1.00 per occupied
rentable square foot per year, and the Building contains one hundred thousand
(100,000) rentable square feet of space, then it would be reasonable for
Landlord to estimate that, if the Building had been one hundred percent (100%)
occupied during the entire calendar year, janitorial charges for such calendar
year would have been One Hundred Thousand Dollars ($100,000) and to compute the
Operating Expenses for such calendar year accordingly. In no event shall the
provisions of this paragraph be used to enable Landlord to collect from the
tenants of the Building more than one hundred percent (100%) of the costs and
expenses incurred by Landlord in managing, operating and maintaining the
Building and the Land.

 

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CC.        [Intentionally Omitted]

 

DD.        Real Estate Tax Expenses: All (1) real estate taxes, arena taxes,
solid waste taxes and related charges, front foot benefit charges, special user
fees, rates, and assessments (including general and special assessments, if
any), ordinary and extraordinary, foreseen and unforeseen, which are imposed
upon Landlord or assessed against the Building or the Land or Landlord's
personal property used in connection therewith; (2) other present or future
taxes or governmental charges that are imposed upon Landlord or assessed against
the Building or the Land which are in the nature of or in substitution for real
estate taxes, including any tax levied on or measured by the rents payable by
tenants of the Building, all taxes and assessments for public improvements or
any other purpose and any gross receipts or receipts or similar taxes; and (3)
expenses (including, without limitation, attorneys' and consultants' fees and
court costs) incurred in reviewing, protesting or seeking a reduction of real
estate taxes, whether or not such protest or reduction is ultimately successful.
Subject to the foregoing, Real Estate Tax Expenses shall not include (i) any
inheritance, estate, gift, franchise, corporation, transfer, excise, net income
or net profits tax assessed against Landlord from the operation of the Building,
or (ii) penalties or interest for late payment of Real Estate Taxes if Tenant is
then current in the payment of all Rent due under this Lease.

 

EE.         Rent: All Base Rent and Additional Rent.

 

(1) Base Rent: The amount payable by Tenant pursuant to Section 4.A. below.

 

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(2) Additional Rent: All sums of money payable by Tenant pursuant to this Lease
other than Base Rent.

 

(3) Monthly Rent: A monthly installment of Base Rent and Additional Rent, if
any, which shall equal one-twelfth (1/12th) of Base Rent and Additional Rent
then in effect.

 

FF.        Rent Commencement Date: As set forth in Section 4.A. hereof.

 

GG.        Tenant's Personal Property: All equipment, improvements, furnishings
and/or other property now or hereafter installed or placed in or on the Premises
by and at the sole expense of Tenant or with Tenant's permission (other than any
property of Landlord), with respect to which Tenant has not been granted any
credit or allowance by Landlord, and which: (i) is removable without damage to
the Premises, the Building and the Land, (ii) does not diminish the relet or
sale value of the Building to other biotechnology or life sciences companies or
investors, and (iii) is not a replacement of any property of Landlord, whether
such replacement is made at Tenant's expense or otherwise. Notwithstanding any
other provision of this Lease, Tenant's Personal Property shall not include any
improvements or other property installed or placed in or on the Premises as part
of Tenant's Work, whether or not any such property was purchased or installed at
Tenant's expense, except that certain laboratory installations, including, but
not limited to, generators, switches, built-in plumbing, fume hoods, built-in
warm and cold rooms, deionized water, glass washers, autoclaves, chillers and
any related mechanical, electrical and plumbing equipment (collectively,
“Installations”) shall be deemed Tenant’s Personal Property during the Term, but
shall not be removed by Tenant at the expiration or earlier termination of this
Lease without Landlord’s prior written consent, which may be granted or withheld
in Landlord’s sole and absolute discretion.

 

HH.        Unavoidable Delay: Any delays due to strikes, labor disputes,
shortages of material, labor or energy, acts of God, governmental restrictions,
enemy action, civil commotion, fire, unavoidable casualty or any other causes
beyond the control of Landlord or Tenant, as applicable.

 

II.           Work Agreement: Exhibit C, the terms of which are hereby expressly
incorporated in this Lease.

 

2. TERM.

 

A.    Term of Lease: The term of this Lease (the "Term") shall commence on the
date on which this Lease has been fully executed and delivered by Landlord and
Tenant, and the existing tenant currently occupying the Premises as of the date
hereof has fully vacated the Premises and surrendered possession thereof to
Landlord (the "Lease Commencement Date"), and shall terminate at Midnight on the
last day of the one hundred fifty-sixth (156th) full month following the Rent
Commencement Date (as defined below) (i.e., the last day of the thirteenth
(13th) Lease Year), or such earlier date on which this Lease is terminated
pursuant to the provisions hereof (the "Lease Expiration Date"). It is presently
anticipated that the Premises will be delivered to Tenant on or about the
Anticipated Lease Commencement Date; provided, however, that if Landlord does
not deliver possession of the Premises by such date, Landlord shall not have any
liability whatsoever, and this Lease shall not be rendered void or voidable, as
a result thereof; provided further that if Landlord has not delivered possession
of the Premises to Tenant by the date that is thirty-five (35) days after the
date on which this Lease has been fully executed and delivered by Landlord and
Tenant (the “Late Delivery Date”), Tenant shall be entitled to one (1) day of
free rent for each day beyond the Late Delivery Date that Landlord has failed to
delivered the Premises to Tenant in the condition required by this Lease.
Landlord hereby leases the Premises to Tenant and Tenant hereby leases the
Premises from Landlord for the Term.

 

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B.    Qiagen Release. Landlord and Tenant acknowledge and agree that the
Premises are currently subject to the rights of another tenant, Qiagen
Gaithersburg, Inc. (“Qiagen”), pursuant to the terms of a separate lease between
Landlord, as landlord, and Qiagen, as tenant (the “Qiagen Lease”). Landlord and
Tenant further acknowledge and agree that the terms and conditions of this
Lease, including, but not limited to, Landlord’s obligation to deliver the
Premises, are expressly contingent upon a termination of the Qiagen Lease and
all of the rights that Qiagen has to the Premises and any personal property
within the Premises to be delivered to Tenant. In the event that Landlord fails
to deliver the Premises on or before the Late Delivery Date, subject to
Unavoidable Delay, in accordance with the requirements of the immediately
preceding sentence, then Tenant shall have the right to terminate this Lease by
written notice to Landlord given, if at all, not later than thirty (30) days
following the Late Delivery Date, in which event this Lease shall terminate as
if the date of Landlord’s receipt of Tenant’s termination notice were the Lease
Expiration Date set forth herein, and Landlord shall immediately return to
Tenant the Security Deposit and the first installment of Monthly Base Rent paid
by Tenant pursuant to this Lease, after which neither party shall have any
further obligations or liabilities accruing hereunder; provided, however, that
if Landlord delivers the Premises in accordance with the terms of this Section
2.B. prior to Tenant’s delivery of its termination notice hereunder, then
Tenant’s right to terminate this Lease pursuant to this Section 2.B. shall be
null and void, and this Lease shall continue in full force and effect
thereafter.

 

C.    Declarations: If requested by Landlord at any time during the Term, Tenant
promptly will execute a declaration in the form attached hereto as Exhibit B.

 

D.    Effective Date: The rights and obligations set forth in this Lease, except
for the obligation to pay Rent and as otherwise specifically provided herein to
the contrary, shall become effective on the date of final execution of this
Lease.

 

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3. “AS-IS” CONDITION: WORK AGREEMENT.

 

A.    As-Is Condition: Except as hereinafter provided in this Section 3.A. and
in the last sentence of Section 6.C below, Tenant accepts the Premises in their
“as-is” condition as of the Lease Commencement Date. Except as otherwise
specifically set forth herein, Landlord shall have no obligation to make any
other improvements or alterations to the Premises, and Tenant’s possession of
the Premises shall be conclusive evidence of Tenant’s acceptance of the Premises
and its satisfaction as to the condition of the same, subject only to latent
defects of which Landlord is notified by Tenant within six (6) months following
the delivery of the Premises to Tenant. Subject to the last sentence of this
Section 3.A, Landlord shall deliver the Premises to Tenant on the Lease
Commencement Date in the following condition (the “Delivery Condition”): with
(i) all window systems in good and proper working order, (ii) all Building
mechanical, electrical (including any electrical panels), sprinkler, fire alarm,
plumbing systems and all individual heating, ventilation and air conditioning
systems serving the Building (collectively, the “Base Building HVAC”)
(collectively, the “Base Building Systems”) in good working order, (iii) a
minimum capacity 250KW generator for life safety and a separate 1500 KW
generator with 10,000 gallon diesel tank for systems back up (collectively, the
“Generators”) in good and proper working order, (iv) the Common Area base
Building restrooms, all Common Area base Building stairwells, all elevators
serving the Building, and all points of ingress and egress of the exterior of
the Building in good working order and in compliance with all current applicable
Laws existing on the Lease Commencement Date, including, but not limited to, the
ADA (as defined in Section 6.A. hereof); and (v) all then existing cabinetry,
casework, chemical fume hoods, bench tops, walk-in cold rooms, refrigerators,
autoclaves, glass washing and other laboratory equipment currently existing in
the Premises (the “Existing FF&E”), it being understood and agreed that Landlord
makes no representation or warranty of any kind with respect to the Existing
FF&E as to its fitness for a particular use, its merchantability, title, or
otherwise. As of the date hereof, Landlord has delivered to Tenant a report
prepared by Encon dated April 15, 2016 (the “Engineering Report”) concerning the
condition of the Base Building Systems, Existing FF&E, Generators, utility
services, and certain other information regarding the Building. Landlord and
Tenant agree that the Engineering Report accurately describes the condition of
the Building as of the date hereof, such that Landlord’s obligations with
respect to the delivery of the Premises in Delivery Condition are limited to
those items identified on the Engineering Report as requiring maintenance,
repair or replacement. In addition to the foregoing, Tenant acknowledges that,
prior to the Lease Commencement Date, the Premises have been decommissioned as
set forth in those certain laboratory decommissioning reports each dated May 19,
2015 and prepared by VaLogic, LLC.

 

Notwithstanding the foregoing, in the event that Qiagen has vacated and
surrendered the Premises to Landlord such that the Premises is vacant and ready
for delivery to Tenant, but Landlord has not yet performed such maintenance,
repairs or replacements as are set forth on the Engineering Report in order for
Landlord to deliver the Premises to Tenant in the Delivery Condition, then (1)
Landlord shall deliver the Premises to Tenant together with a notice (the
“Delivery Notice”) of the remaining items described on the Engineering Report to
be completed in order to put the Premises into Delivery Condition (2) the Lease
Commencement Date shall be deemed to be the date of said delivery to the
Premises to Tenant, (3) Tenant’s acceptance of the Premises shall be conclusive
evidence of Tenant’s satisfaction as to the condition of the same but for the
items set forth in Landlord’s Delivery Notice and any latent defects of which
Landlord is notified by Tenant within six (6) months following the delivery of
the Premises to Tenant, (4) Landlord shall be obligated to perform such
maintenance, repairs and replacements which are required in order to put the
Premises into Delivery Condition, which work shall be performed by Landlord
diligently to completion as soon as practicable after delivery of the Premises
to Tenant, (5) Landlord will notify Tenant when the Premises is in Delivery
Condition, and (6) Landlord and Tenant will work together in good faith to
coordinate any work that is being performed simultaneously by the parties in the
Premises prior to Landlord’s completion of items necessary to put the Premises
into Delivery Condition.

 

B.    Work Agreement: Tenant agrees to improve the Premises in accordance with
the Work Agreement and, except as set forth in this Section 3, Landlord shall
have no obligation to make any improvements or alterations to the Premises.
Landlord shall solely bear the cost of compliance for the Common Area base
Building restrooms, all Common Area base Building stairwells, all elevators
serving the Building, and all points of ingress and egress of the exterior of
the Building with the ADA as of the Lease Commencement Date.

 

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4. RENT.

 

From and after the Lease Commencement Date, and subject to the Free Rent Period
(as hereinafter defined), Tenant shall pay to Landlord Base Rent and Additional
Rent as are set forth in this Section 4 and in Section 5 below.

 

A.Base Rent: Base Rent shall equal the following amounts:

 

 

Lease Year

  Rate of
Base Rent
Per Square Foot
Per Annum   Rate of
Base Rent
Per Annum   Rate of
Monthly
Base Rent  1  $22.25   $3,271,884.75   $272,657.06  2  $22.81   $3,354,233.31  
$279,519.44  3  $23.38   $3,438,052.38   $286,504.37  4  $23.96  
$3,523,341.96   $293,611.83  5  $24.56   $3,611,572.56   $300,964.38  6 
$25.17   $3,701,273.67   $308,439.47  7  $25.80   $3,793,915.80   $316,159.65 
8  $26.45   $3,889,498.95   $324,124.91  9  $27.11   $3,986,552.61  
$332,212.72  10  $27.79   $4,086,547.29   $340,545.61  11  $28.48  
$4,188,012.48   $349,001.04  12  $29.19   $4,292,418.69   $357,701.56  13 
$29.92   $4,399,765.92   $366,647.16 

 

 9 

 

 

 

Subject to the Free Rent Period described herein, Tenant shall pay Base Rent to
Landlord in equal monthly installments ("Monthly Base Rent") in advance on the
first day of each calendar month during the Term, without notice, except that
the first monthly installment of Base Rent shall be paid upon execution of this
Lease. If the Lease Commencement Date occurs on a date other than the first day
of a calendar month, Tenant shall receive a credit equal to the Monthly Base
Rent multiplied by the number of days in said calendar month prior to the Lease
Commencement Date and divided by the number of days in such month, which credit
shall be applied toward the installment of Monthly Base Rent next due hereunder.
Notwithstanding the foregoing, Landlord shall grant to Tenant a “rent holiday”
from the payment of the installments of Monthly Base Rent for the period of time
(the “Free Rent Period”) commencing on the Lease Commencement Date and ending on
November 30, 2017. During such Free Rent Period, the Monthly Base Rent shall be
abated (such rental abatement being hereinafter referred to as the “Free Rent
Allowance”); provided, however, that (i) the Free Rent Period and the granting
of the Free Rent Allowance as provided hereunder shall not affect the Lease
Commencement Date pursuant to Section 2.A. hereof, (ii) Tenant shall remain
obligated during the Free Rent Period to perform all of Tenant’s obligations
under this Lease except as expressly aforesaid (including, but not limited to,
the payment of all Additional Rent coming due under this Lease), and (iii) in
the event of any termination of this Lease by Landlord based upon a Default
hereunder by Tenant, the unamortized portion of Base Rent which would have
otherwise been due and payable hereunder during the Free Rent Period in the
absence of the Free Rent Allowance shall immediately become due and payable and
any remaining Free Rent Allowance hereunder shall be of no force or effect. As
used herein, the term “Rent Commencement Date” shall mean the day immediately
succeeding the expiration of the Free Rent Period (i.e., December 1, 2017).

 

B.    Payment: All Base Rent and Additional Rent due and payable to Landlord
under this Lease shall be paid to Landlord at the Landlord Payment Address.
Payments of Rent (other than in cash), if initially dishonored, shall not be
considered rendered until ultimately honored as cash by Landlord's depository.
Except as expressly set forth otherwise in this Lease, Tenant will pay all Rent
to Landlord without demand, deduction, set-off or counter-claim. If any sum
payable by Tenant under this Lease is paid by check which is returned due to
insufficient funds, stop payment order, or otherwise, then: (a) such event shall
be treated as a failure to pay such sum when due; and (b) in addition to all
other rights and remedies of Landlord hereunder, Landlord shall be entitled (i)
to impose, as Additional Rent, a returned check charge of Fifty Dollars ($50.00)
to cover Landlord's administrative expenses and overhead for processing, and
(ii) to require that all future payments be remitted by wire transfer, money
order, or cashier's or certified check.

 

C.    Late Fee: If Tenant fails to make any payment of Rent on or before the
date when payment is due, then Tenant also shall pay to Landlord a late fee
equal to five percent (5%) of the amount that is past due for each month or part
thereof until such Rent is fully paid. Said late fee shall be deemed
reimbursement to Landlord for its costs of carrying and processing Tenant's
delinquent account. Acceptance by Landlord of said late fee shall not waive or
release any other rights or remedies to which Landlord may be entitled on
account of such late payment.

 

D.    REIT/UBTI: Landlord and Tenant agree that no rental or other payment for
the use or occupancy of the Premises is or shall be based in whole or in part on
the net income or profits derived by any person or entity from the Building or
the Premises. Tenant further agrees that it will not enter into any sublease,
license, concession or other agreement for any use or occupancy of the Premises
which provides for a rental or other payment for such use or occupancy based in
whole or in part on the net income or profits derived by any person or entity
from the Premises so leased, used or occupied. Nothing in the foregoing
sentence, however, shall be construed as permitting or constituting Landlord's
approval of any sublease, license, concession, or other use or occupancy
agreement not otherwise approved by Landlord in accordance with the provisions
of Section 23 of this Lease.

 

 10 

 

 

5.ADDITIONAL RENT.

 

A.    Sales, Use or Other Taxes or Traffic Mitigation Charges: If during the
Term any governmental authority having jurisdiction over the Building or the
Land levies, assesses or imposes any traffic mitigation charge or any tax on
Landlord, the Premises, the Building or the Land or the rents payable hereunder,
in the nature of a sales tax, use tax or any tax except (i) taxes on Landlord's
income, (ii) estate or inheritance taxes, or (iii) Real Estate Tax Expenses,
then Tenant shall pay its proportionate share of any such tax or traffic
mitigation charge to Landlord within fifteen (15) days after receipt by Tenant
of notice of the amount of such tax or traffic mitigation charge.

 

B.    To Cover Operating and Real Estate Tax Expenses:

 

(1) Definitions: As used herein, "Tenant's Share of Operating Expenses" shall be
that percentage of Operating Expenses which is the equivalent of the number of
square feet of rentable area in the Premises (147,051 on the Lease Commencement
Date) divided by the number of square feet of rentable area in the Building
(147,051 on the Lease Commencement Date) (i.e., 100%). As used herein, "Tenant's
Share of Real Estate Tax Expenses" shall be that percentage of Real Estate Tax
Expenses which is equivalent to the number of square feet of rentable area in
the Premises (147,051 on the Lease Commencement Date) divided by the number of
square feet of rentable area in the Building (147,051 on the Lease Commencement
Date) (i.e., 100%). Notwithstanding the foregoing provisions of this Subsection
5.B.(1), in determining Tenant’s Share of Operating Expenses for any calendar
year, the portion of Operating Expenses for such calendar year which constitute
Controllable Operating Expenses (as hereinafter defined) shall not exceed one
hundred six percent (106%) of the amount of Controllable Operating Expenses (as
hereinafter defined) for the immediately preceding calendar year (the
“Controllable Operating Expenses Cap”). As used herein, “Controllable Operating
Expenses” shall mean all Operating Expenses except for the following: (i)
license and permit fees of any nature; (ii) utility company charges; (iii)
insurance premiums (provided that Landlord obtains annual bids for any insurance
policies); (iv) the cost to remove snow and ice; and (v) costs of compliance
with governmental requirements.

 

(2) Payment of Tenant's Share: In addition to all other Rent set forth herein,
commencing on the Rent Commencement Date, and for each calendar year during the
Term, Tenant shall pay to Landlord as Additional Rent an amount equal to
Tenant's Share of Operating Expenses and an amount equal to Tenant's Share of
Real Estate Tax Expenses.

 

C.    Statements:

 

(1) For the calendar year which includes the Rent Commencement Date and for each
calendar year thereafter during the Term, Landlord shall deliver to Tenant a
statement estimating Tenant's Share of Operating Expenses and Tenant’s Share of
Real Estate Tax Expenses for such calendar year, which Tenant shall pay in equal
monthly installments in advance on the first day of each calendar month during
each calendar year. Tenant shall continue to pay such estimated Tenant’s Share
of Operating and Tenant’s Share of Real Estate Tax Expenses until Tenant
receives the next such statement from Landlord, at which time Tenant shall
commence making monthly payments pursuant to Landlord's new statement. With the
first payment of Additional Rent herein which is due at least fifteen (15) days
after Tenant's receipt of a statement from Landlord specifying Tenant's Share of
Operating and Tenant’s Share of the estimate of Real Estate Tax Expenses payable
during the calendar year, Tenant shall pay the difference between Tenant’s
monthly share of such sums for the preceding months of the calendar year and the
monthly installments which Tenant has actually paid for said preceding months.

 

 11 

 

 

D.    Retroactive Adjustments: After the end of the calendar year which includes
the Rent Commencement Date and after the end of each calendar year thereafter
during the Term, Landlord shall determine the actual Operating Expenses and Real
Estate Tax Expenses for such calendar year, Landlord shall calculate the
foregoing sums and Landlord shall provide to Tenant a statement of Tenant's
Share of Operating Expenses and Tenant’s Share of Real Estate Tax Expenses for
the calendar year. Within thirty (30) days after delivery of any such statement,
Tenant shall pay to Landlord (i) any deficiency between the amount shown as
Tenant's Share of Operating Expenses for the calendar year and the estimated
payments thereof made by Tenant and (ii) any deficiency between the amount shown
as Tenant’s Share of Real Estate Tax Expenses for the calendar year and the
estimated payments thereof made by Tenant. Tenant shall be credited with any
excess estimated payments toward subsequent Rent payments by Tenant.

 

E.    Change In or Contest of Taxes: In the event of any change by any taxing
body in the period or manner in which any of the Real Estate Tax Expenses are
levied, assessed or imposed, Landlord shall have the right, in its sole
discretion, to make equitable adjustments with respect to computing increases in
Real Estate Tax Expenses. Real Estate Tax Expenses which are being contested by
Landlord shall be included in computing Tenant's Share of Real Estate Tax
Expenses under this Section 5, but if Tenant shall have paid Rent on account of
contested Real Estate Tax Expenses and Landlord thereafter receives a refund of
such taxes, Tenant shall receive a credit toward subsequent Rent payments in an
amount equal to Tenant's proportionate share of such refund.

 

F.    Audit Rights: Tenant shall have the right, at Tenant’s expense, to retain
a Qualified Consultant (as hereinafter defined), to examine the books and
records of Landlord relating to the Building upon at least thirty (30) days’
prior notice and at reasonable times during normal business hours, so that
Tenant can determine that Tenant’s Share of Operating Expenses and Tenant’s
Share of Real Estate Tax Expenses have, in fact, been paid or incurred and
accurately applied by Landlord. Unless Tenant shall give Landlord a notice
objecting to the Landlord’s statement and specifying the respects in which such
statement is claimed to be incorrect within ninety (90) days after its receipt
of such statement, the statement shall be considered to be final and accepted by
Tenant. If Tenant disputes any such statement, Tenant shall pay all Additional
Rent set forth therein as a condition precedent to its right to contest the same
without prejudice to Tenant’s position. The term “Qualified Consultant” shall
mean an independent, certified public accounting firm or auditing firm, or
another qualified third-party consultant which has significant experience in the
field of pass-through audits for commercial office buildings in the Washington,
D.C. metropolitan area, and which firm or consultant is reasonably approved by
Landlord and is retained by Tenant on other than a contingent fee basis.

 

 12 

 

 

G.    Arbitration: Any statement provided to Tenant by Landlord pursuant to this
Section 5 shall be conclusive and binding upon Tenant unless, within ninety (90)
days after receipt thereof (provided, that, Landlord permits Tenant to access
the books and records in accordance with Section 5.L. above), Tenant notifies
Landlord of the respects in which the statement is claimed to be incorrect.
Unless otherwise mutually agreed, any such dispute pertaining to statements
delivered pursuant to this Section 5 shall be determined by arbitration in the
jurisdiction in which the Premises are located, in accordance with the then
current commercial rules of the American Arbitration Association. The costs of
the arbitration shall be divided equally between Landlord and Tenant, except
that each party shall bear the cost of its own legal fees, unless the
arbitration results in a determination that Landlord's statement contained a
discrepancy of less than five percent (5%) in Landlord's favor, in which event
Tenant shall bear all costs incurred in connection with such arbitration,
including, without limitation, legal fees. Pending determination of any dispute,
Tenant shall pay all amounts due pursuant to the disputed statement, but such
payments shall be without prejudice to Tenant's position. Upon at least fifteen
(15) days' notice to Landlord, Tenant shall have reasonable access during normal
business hours and at Tenant's expense, to appropriate books and records of
Landlord relating to the amount of expenses covered by the disputed statement,
for the purpose of verifying the statement. Any such review shall be made only
by Tenant's employees and/or by an auditor hired by Tenant who is a Certified
Public Accountant and who is employed on other than a contingent fee basis.

 

H.    Tenant’s Personal Property: If any taxes on Tenant’s Personal Property are
levied against Landlord or Landlord’s property, or if the assessed valuation of
the Building is increased by a value attributable to improvements, alterations
or equipment in the Premises, whether owned by Landlord or Tenant and whether or
not affixed to the real property so as to become a part thereof, higher than the
base valuation on which Landlord reasonably estimates it would otherwise from
time-to-time allocate Real Estate Tax Expenses at the Building, Landlord shall
have the right, but not the obligation, to pay such Real Estate Tax Expenses.
Landlord’s determination of any excess assessed valuation shall be binding and
conclusive, absent manifest error. The amount of any such payment by Landlord
shall constitute Additional Rent due from Tenant to Landlord immediately upon
demand therefor.

 

6.USE; ADA COMPLIANCE.

 

A.    Permitted Use: Tenant shall use and occupy the Premises solely for general
(non-governmental) office, research, development, laboratory, warehousing,
manufacturing, and any other lawful purpose which is in keeping with Tenant’s
normal business and is suitable to office, laboratory and manufacturing
buildings in the Gaithersburg life sciences submarket and in accordance with all
applicable Laws, and for no other purpose.

 

B.    Legal and Other Restrictions of Tenant's Use: Tenant shall not use or
occupy the Premises for any unlawful purpose, or in any manner that will violate
the certificate of occupancy for the Premises or the Building or that will
constitute waste, nuisance or unreasonable annoyance to Landlord or any other
tenant or user of the Building, or in any manner that will increase the number
of parking spaces required for the Building or its full occupancy as required by
law. Tenant shall comply with all present and future laws (including, without
limitation, the Americans with Disabilities Act (the "ADA") and the regulations
promulgated thereunder, as the same may be amended from time to time),
ordinances (including without limitation, zoning ordinances and land use
requirements), regulations, orders and recommendations (including, without
limitation, those made by any public or private agency having authority over
insurance rates) (collectively, "Laws") concerning the use, occupancy and
condition of the Premises and all machinery, equipment, furnishings, fixtures
and improvements therein, all of which shall be complied with in a timely manner
at Tenant's sole expense. If any such Law requires an occupancy or use permit or
license for the Premises or the operation of the business conducted therein
(including a certificate of occupancy or nonresidential use permit), then Tenant
shall obtain and keep current such permit or license at Tenant's expense and
shall promptly deliver a copy thereof to Landlord. Use of the Premises is
subject to all covenants, conditions and restrictions of record. Tenant shall
not use any space in the Building for the sale of goods to the public at large
or for the sale at auction of goods or property of any kind.

 

 13 

 

 

C.    ADA Compliance: Landlord hereby warrants that to the best of its knowledge
without investigation, the Common Area base Building restrooms all Common Area
base Building stairwells, all elevators serving the Building and all points of
ingress and egress of the exterior of the Building are in compliance with the
ADA as of the Lease Commencement Date, but after the Lease Commencement Date,
Tenant shall be responsible, at its sole cost and expense, for compliance of the
Building with the ADA (including, but not limited to, with respect to any
Alterations to the Building, special needs of any of Tenant’s personnel and new
or changed interpretations of, or amendments of, the ADA, as it existed as of
the Lease Commencement Date). Notwithstanding anything to the contrary contained
in this Lease, Tenant shall not be responsible for ensuring the Premises
complies with Laws if and to the extent that the violation existed prior to the
date Tenant is given possession of the applicable Premises and such violation
did not result from any action of Tenant or from Tenant’s use and occupancy of
the Premises.

 

7.CARE OF PREMISES; LANDLORD'S OBLIGATION TO MAINTAIN BASE BUILDING.

 

A.    Tenant’s Maintenance Obligations; HVAC Maintenance. Tenant shall at its
expense keep the Premises (including all improvements, fixtures and other
property located therein) in a neat and clean condition and in good order and
repair, and will suffer no waste or injury thereto (subject to ordinary wear and
tear and casualty and condemnation excepted). Tenant shall maintain all
fixtures, furnishings and equipment located in, or serving, the Premises in
clean, safe and sanitary condition, shall take good care thereof and make all
required repairs and replacements thereto, in a manner at least equal to the
manner in which maintenance is performed in comparable buildings in
Gaithersburg, Maryland, taking into account the size, age, location and method
of construction of such buildings (“Comparable Buildings”), and, to the extent
applicable, in accordance with all manufacturers recommendations so as not to
void any warranty then in effect. Notwithstanding the foregoing, Tenant shall
maintain all of the Existing FF&E that is retained by Tenant in substantially
the same condition as it is in on the Lease Commencement Date (subject to
ordinary wear and tear and casualty and condemnation). Without limiting the
generality of the foregoing, Tenant, at Tenant’s sole cost and expense, shall
maintain in a manner in which such maintenance is performed in Comparable
Buildings, and promptly make all repairs and replacements (subject to Section
7.B below) to, any Base Building HVAC and any Additional HVAC Equipment, and in
accordance with all manufacturers recommendations so as not to void any
warranty. Tenant shall maintain, at Tenant’s sole cost and expense, a
maintenance contract on the Base Building HVAC and any Additional HVAC Equipment
in or serving the Premises. Such contract shall be with a contractor licensed to
do business in the jurisdiction in which the Building is located and approved by
Landlord, and shall cover all parts and labor. From time to time, at Landlord’s
request, Tenant shall provide copies of all maintenance and service contracts to
Landlord. In addition, Landlord reserves the right to establish a regular
inspection and maintenance program for all equipment maintained by Tenant and,
after notifying Tenant of the need for repairs and Tenant’s failure to do so
within five (5) business days after notice (or such shorter period of time as
may be required in Landlord’s commercially reasonable judgment in order to
protect the Building, the Land, any property located thereon, or the health and
safety of the occupants thereof), to provide all necessary or appropriate
maintenance and repairs at Tenant’s expense. Tenant shall give Landlord prompt
written notice of any defects or damage to the structure of, or equipment or
fixtures in, the Building or any part thereof. Tenant shall surrender the
Premises at the end of the Term in as good order and condition as they were in
on the Lease Commencement Date, ordinary wear and tear, casualty and
condemnation excepted.

 

 14 

 

 

B.    Landlord’s Obligation to Maintain Base Building: Landlord agrees to use
commercially reasonable efforts to maintain the structural portions of the
Building (including, but not limited to, exterior demising walls, foundation,
windows, roof and parking areas that form a part of the Building) and the Base
Building Systems (but not the Base Building HVAC, which shall be the
responsibility of Tenant) to a standard which is at least equal to the standard
of maintenance in Comparable Buildings, and shall make such repairs thereto as
become necessary as expeditiously as circumstances permit after obtaining actual
notice of the need for such repairs, all costs of which shall be included in
Operating Expenses to the extent the same constitute Operating Expenses, unless
the need for any such maintenance or repair is brought about by any act or
omission of Tenant, its agents, employees or invitees, in which event such
repairs shall be made by Landlord at Tenant’s sole cost and expense. In the
event that the entire Base Building HVAC existing on the Lease Commencement Date
or any components thereof require replacements (as opposed to repairs), based
upon ordinary wear and tear and not as the result of Tenant’s failure to
maintain the same in accordance with Tenant’s obligations set forth in Section
7.A above, then Landlord shall make such replacements and the costs thereof
shall be included in Operating Expenses to the extent permitted by Section 1.BB.
above. Landlord shall have no duty to Tenant to maintain or to make any repairs
or improvements to the Premises except as provided herein, and Landlord shall
have no duty to maintain, repair or replace either (i) Additional HVAC Equipment
or (ii) any Base Building HVAC which is upgraded or modified by or at the
request of Tenant following the Lease Commencement Date.

 

8.ALTERATIONS BY TENANT.

 

A.    Making of Alterations; Landlord's Consent: Tenant shall not make or permit
to be made any Alterations without the prior written consent of Landlord both as
to whether the Alterations may be made and as to how and when they will be made.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its
consent to any non-structural Alteration which Tenant may desire to make to the
Premises; provided, however, that Landlord shall retain sole and absolute
discretion to withhold its consent to any Alteration, whether structural or
non-structural, which may, in the sole and absolute judgment of Landlord (1)
adversely affect the marketability of the Premises, (2) exceed the capacity of,
hinder the effectiveness of, interfere with the electrical, mechanical, heating,
ventilating, air conditioning, or plumbing systems of the Premises or the
Building or which will be connected to any of such systems, or (3) be visible
from outside the Premises. Notwithstanding the foregoing, Tenant shall have the
right, after providing at least ten (10) days prior written notice to Landlord,
but without the necessity of obtaining Landlord’s consent, to recarpet, repaint,
or to make purely “cosmetic” or “decorative” nonstructural Alterations in and to
the Premises that (I) do not fall within clauses (1) through (3) above, (II) do
not require the issuance of a building permit, and (III) do not cost more than
Two Hundred Thousand Dollars ($200,000.00).

 

 15 

 

 

Any Alterations shall be made at Tenant's expense, by its contractors and
subcontractors in a good, workmanlike and first-class manner, and in accordance
with the rules and regulations attached hereto as Exhibit G and complete plans
and specifications approved in advance in writing by Landlord, and only after
Tenant: (i) has obtained all necessary permits from governmental authorities
having jurisdiction and has furnished copies thereof to Landlord, (ii) has
submitted to Landlord an architect's certificate that the Alterations will
conform to all applicable Laws, and (iii) has complied with all other
requirements reasonably imposed by Landlord, including, without limitation, any
requirements due to the underwriting guidelines of Landlord's insurance
carriers. Landlord's consent to any Alterations and approval of any plans and
specifications constitutes approval of no more than the concept of these
Alterations and not a representation or warranty with respect to the quality or
functioning of such Alterations, plans and specifications. Tenant shall be and
is solely responsible for the Alterations and for the proper integration thereof
with the Building, the Building's systems and existing conditions. Landlord
shall have the right, but not the obligation, to supervise the making of any
Alterations. All Alterations involving structural, electrical, mechanical or
plumbing work, lab equipment or fixtures, the heating, ventilation and air
conditioning system of the Premises or the Building, and the roof of the
Building, shall, at Landlord's election, be performed by Landlord's designated
contractor or subcontractor at Tenant's expense. If Landlord performs such work,
Landlord's property manager shall be paid Additional Rent in an amount equal to
three percent (3%) of the cost of such work, or (b) Landlord does not perform
such work, Landlord’s property manager shall be paid Additional Rent in an
amount equal to one percent (1%) of the cost of such work, plus, in either
event, plus, in either case, the actual out-of-pocket costs third-party fees
incurred by Landlord’s construction manager. If any Alterations which require
Landlord’s approval are made without the prior written consent of Landlord, or
which do not conform to plans and specifications approved by Landlord or to
other conditions imposed by Landlord pursuant to this Section 8, Landlord may,
in its sole discretion, correct or remove such Alterations at Tenant's expense.
Following completion of any Alterations, except with respect to cosmetic or
decorative nonstructural Alterations which do not require Landlord’s approval,
at Landlord's request, Tenant either shall deliver to Landlord a complete set of
"as built" plans showing the Alterations or shall reimburse Landlord for any
expense incurred by Landlord in causing the Building plans to be modified to
reflect the Alterations.

 

 16 

 

 

B.    No Liens: Tenant shall take all commercially reasonable steps to ensure
that no mechanic's or materialmen's liens are filed against the Premises, the
Building or the Land as a result of any Alterations made by the Tenant. If any
mechanic's lien is filed, Tenant shall discharge the lien within ten (10) days
thereafter, at Tenant's expense, by paying off or bonding the lien. If Landlord
gives its consent to the making of any Alteration, such consent shall not be
deemed to be an agreement or consent by Landlord to subject its interest in the
Premises or the Building to any liens which may be filed in connection
therewith, nor shall Landlord’s receipt of any fee in connection with any
Alterations or Tenant’s Work or Landlord’s payment of any allowance to Tenant
with respect to any work performed in or with respect to the Premises by or on
behalf of Tenant be deemed to constitute a basis for Landlord’s interest in the
Premises or the Building to be subjected to any lien. If Tenant shall lease or
finance the acquisition of equipment, furnishings, or personal property of a
removable nature utilized by Tenant in the operation of Tenant’s business,
Tenant warrants that any Uniform Commercial Code Financing Statement filed as a
matter of public record by any lessor or creditor of Tenant will upon its face
or by exhibit thereto indicate that such Financing Statement is applicable only
to removable personal property of Tenant located within the Premises. In no
event shall the address of the Building be furnished on the statement without
qualifying language as to the applicability of the lien only to removable
personal property, located in an identified suite leased by Tenant.

 

9.EQUIPMENT.

 

A. Permitted Equipment; Utilities: From and after the Lease Commencement Date,
all electrical consumption and any other utilities used in the Premises
(including, but not limited to, all costs of providing heating and air
conditioning to the Premises) shall be separately metered by Tenant, at Tenant’s
sole cost and expense, and Tenant shall timely pay the full amount of the costs
of such consumption directly to the providers thereof as and when the same
become due and payable. Tenant shall be responsible for the maintenance, repair
and, if applicable, replacement of the aforesaid meters, all of which shall be
performed at Tenant’s sole cost and expense; provided, however, that in the
event that the meters require maintenance, repair or replacement and Tenant does
not perform same within thirty (30) days following notice from Landlord,
Landlord shall have the right to perform such maintenance, repair or
replacement, in which case Tenant shall reimburse Landlord for the costs
thereof, including, but not limited to, an administrative fee to Landlord in an
amount equal to five percent (5%) of such costs, which reimbursement shall be
made by Tenant to Landlord within thirty (30) days following Landlord’s written
demand therefor to Tenant. In the event that any utilities utilized in the
Building are not separately metered by Tenant, then any costs incurred by
Landlord in connection therewith shall be included in Operating Expenses
pursuant to the terms and conditions of this Lease.

 

B.    [Intentionally Omitted]

 

C.    Floor Load: Tenant shall not place any load upon the floor of the Premises
which exceeds the per square foot load the floor was designed to carry (eighty
(80) pounds per square foot for live loads and twenty (20) pounds per square
foot for dead loads).

 

D.    Additional HVAC: Tenant shall have the right, at Tenant’s option, and at
Tenant’s sole cost and expense, to install, operate, maintain, repair and
replace one or more supplemental heating and air conditioning units
(collectively, “Additional HVAC Equipment”) in a location or locations to be
mutually and reasonably agreed upon by Landlord and Tenant; provided, however,
that (i) Tenant shall be solely responsible for all costs of installation,
maintenance, repair and replacement of any Additional HVAC Equipment, (ii)
Tenant shall be responsible for all costs of operation of such Additional HVAC
Equipment (including, but not limited to, all costs of electrical consumption
from such Additional HVAC Equipment), and (iii) Tenant’s installation of any
Additional HVAC Equipment shall be subject to Landlord’s prior written approval
in accordance with the terms and conditions of Section 8.A. hereof. Tenant shall
not remove any existing convector units nor any plumbing in the Building without
Landlord’s prior written consent, which may be withheld or denied in Landlord’s
sole and absolute discretion.

 

 17 

 

 

E.    Generator: Notwithstanding the forgoing or anything to the contrary
contained in this Lease, Tenant shall have the right to use (x) the existing
minimum capacity 250 KW generator for life safety systems and (y) the existing
1,500 KW generator with 10,000 gallon diesel tank for systems backup
(collectively, the “Existing Generators”) in accordance with the terms and
condition of this Section 9.E.; provided, however, that Tenant shall be
responsible for all costs of maintenance (as performed in accordance with
manufacturer’s recommendations), repair and replacement of the Existing
Generators, and (ii) all costs of utilities consumed by such Existing
Generators. Tenant shall comply with the provisions of this Lease and all
applicable Laws regarding Tenant’s use, operation and maintenance of the
Existing Generators with respect to noise, vibration, screening and testing,
including, but not limited to, Laws promulgated by Montgomery County, Maryland.
Tenant, at its sole cost and expense, shall install separate meter(s) or
submeter(s) to measure the consumption of utilities by the Existing Generators,
and Tenant shall be responsible for all costs associated with the operation,
installation, maintenance, repair and replacement of such meter(s) or
submeter(s).

 

10.OWNERSHIP AND REMOVAL OF PROPERTY.

 

A.    Landlord's Property: Any Alterations and other improvements and any
equipment, machinery, furnishings and other property, installed or located in
the Premises, the Building or the Land by or on behalf of Landlord or Tenant,
except for Tenant's Personal Property: (i) shall immediately become the property
of Landlord, and (ii) shall be surrendered to Landlord with the Premises as a
part thereof at the end of the Term; provided, however, that if Landlord
requests Tenant to remove any Alterations installed by or on behalf of Tenant,
Tenant shall cause the same to be removed at Tenant's expense on or before the
Lease Expiration Date, or shall reimburse Landlord for the cost of such removal,
as elected by Landlord (unless Landlord expressly waives in writing the right to
require such removal at the time Landlord gives its consent to the making of
such Alterations).

 

B.    Removal of Property At End of Term: Tenant shall remove all of Tenant's
Personal Property, (provided, however, that Tenant shall not be required to
remove any computer cabling and wiring installed by or on behalf of Tenant,
irrespective of whether such cabling and wiring constitutes Tenant's Personal
Property under the terms of this Lease), from the Building and the Land on or
before the Lease Expiration Date. Any personal property belonging to Tenant or
to any other person or entity which is left in the Building or on the Land after
the date this Lease is terminated for any reason shall be deemed to have been
abandoned. In such event, Landlord shall have the right to store such property
at Tenant's sole cost and/or to dispose of it in whatever manner Landlord
considers appropriate, without waiving its right to claim from Tenant all
expenses and damages caused by Tenant's failure to remove such property, and
Tenant and any other person or entity shall have no right to compensation from
or any other claim against Landlord as a result.

 

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11.LANDLORD'S ACCESS TO PREMISES.

 

Landlord may, upon at least twenty-four (24) hours’ prior notice (which notice
may be given verbally), during normal business hours, enter the Premises to
examine them, to make alterations or repairs thereto in accordance with Section
7 hereof, or for any other purposes which Landlord considers necessary or
advisable; however, in the case of any emergency, Landlord and its agents may
enter the Premises at any time and in any manner. Tenant shall allow the
Premises to be exhibited by Landlord: (i) upon at least twenty-four (24) hours’
prior notice (which notice may be given verbally), at any reasonable time to
representatives of lending institutions or to prospective purchasers of the
Building, and (ii) upon at least twenty-four (24) hours’ prior notice (which
notice may be given verbally), at any reasonable time during the last twelve
(12) months of the Term to persons who may be interested in leasing the
Premises. Upon at least twenty-four (24) hours’ prior notice, Landlord reserves
the right and shall be permitted reasonable access to the Premises to install
facilities within and through the Premises and to install and service any
systems deemed advisable by Landlord to provide services or utilities to any
tenant of the Building. In exercising its rights under this Section 11, Landlord
shall use commercially reasonable efforts to not unreasonably interfere with
Tenant’s ordinary business operations in the Building.

 

12.SERVICES AND UTILITIES.

 

A.    Services Provided by Tenant: From and after the Lease Commencement Date,
Tenant shall be responsible for providing the following services, at Tenant’s
sole cost and expense, and all in a manner which is at least equal to the manner
in which such services are provided by landlords in Comparable Buildings, and
Tenant shall contract directly with any third party provider of such services,
as necessary:

 

(1) HVAC: Central heating and air conditioning provided from the Base Building
HVAC and any Additional HVAC Equipment.

 

(2) Janitorial: All janitorial and cleaning and pest and termite control
services for the Premises.

 

(3) Waste Removal: Waste removal at least daily (excluding weekends and
holidays) and as otherwise necessary from the entire Premises, including the
office and laboratory areas, floors, windows, fixtures and equipment.

 

(4) Utilities: Electricity service and all other utilities serving the Premises
in accordance with the applicable provisions of this Lease.

 

B.    Services Provided by Landlord: From and after the Lease Commencement Date,
Landlord shall provide the following to Tenant, without additional charge,
except as otherwise provided herein (including, but not limited to, as provided
in Sections 5 and 1.BB. hereof):

 

(1)    Routine maintenance for the Building in such manner as Landlord deems
reasonable, including the exterior Common Areas of the Building (e.g.,
landscaping) and the Building elevators.

 

 19 

 

 

(2)    Access to the Premises at all times. Tenant, at Tenant's sole cost and
expense, may install an electronic access control system for the Building
("Tenant's Access Control System"); provided, however, that (i) Landlord's
access to the Premises shall not be affected by Tenant's installation of
Tenant's Access Control System, and (ii) if Tenant elects to install Tenant's
Access Control System, then Tenant shall use a contractor which has been
approved in advance in writing by Landlord in Landlord's reasonable discretion,
to install and maintain Tenant's Access Control System.

 

B.    Failure to Provide Services: Landlord shall have no liability to Tenant or
others based on any failure by Landlord to furnish the foregoing, due to
Unavoidable Delays, repair or maintenance work or any other reason, and such
failure shall neither render Landlord liable for damages to either person or
property, nor be construed as an eviction of Tenant, nor cause a diminution or
abatement of Rent nor relieve Tenant of any of Tenant's obligations hereunder.
Notwithstanding the foregoing, if any of the services to be provided by Landlord
pursuant to this Section 12 is suspended and such suspension renders the
Premises untenantable and continues for more than five (5) consecutive business
days, if the reason for the suspension or the continuation of the suspension is
anything other than an Unavoidable Delay, all Monthly Base Rent and Additional
Rent due pursuant to Section 5.B. hereof shall be abated for the period
commencing on the sixth (6th) consecutive business day of such suspension and
concluding on the date that the service has been restored.

 

C.    Conservation: Tenant hereby agrees to comply with all energy conservation
procedures, controls and requirements instituted by Landlord pursuant to any
government regulations or otherwise, including but not limited to controls on
the permitted range of temperatures, the volume of energy consumption or the
hours of operation of the Building. Institution by Landlord of such controls and
requirements shall not entitle Tenant to terminate this Lease or to an abatement
of any Rent payable hereunder.

 

D.    Recycling: Without limiting the foregoing, Tenant covenants and agrees, at
its sole cost and expense, to comply with all present and future Laws of the
jurisdiction in which the Building is located and of the federal, municipal, and
local governments, departments, commissions, agencies and boards having
jurisdiction over the Building to the extent that any of them or this Lease
impose on Tenant duties and responsibilities regarding the collection, sorting,
separation, and recycling of trash. Tenant shall pay all costs, expenses, fines,
penalties, or damages that may be imposed on Landlord or Tenant by reason of
Tenant's failure to comply with the provisions of this Section 12.D., and, at
Tenant's sole cost and expense, shall indemnify, defend and hold Landlord
harmless (including legal fees and expenses) from and against any actions,
claims, and suits arising from such noncompliance, using counsel reasonably
satisfactory to Landlord.

 

13.RULES AND REGULATIONS.

 

Tenant shall abide by and observe the rules and regulations attached hereto as
Exhibit D and such other rules and regulations as may be made by Landlord from
time to time, provided that such rules and regulations shall not be materially
inconsistent with the provisions of this Lease or materially interfere with
Tenant’s ordinary business at the Premises. Nothing contained in this Lease or
in any rules and regulations shall be interpreted to impose upon Landlord any
obligations to enforce against any tenant its rules and regulations, or the
provisions of any lease with any other tenant, and Landlord shall not be liable
to Tenant or any other entity for any violation of said rules, regulations or
lease provisions. Landlord shall use reasonable efforts not to enforce any rule
or regulation in a manner which unreasonably discriminates among similarly
situated tenants.

 

 20 

 

 

14.REPAIR OF DAMAGE CAUSED BY TENANT: INDEMNIFICATION.

 

A.    Repairs: Except as otherwise expressly provided in this Lease and subject
to the mutual waiver of subrogation in Section 17 of this Lease, all injury,
breakage and damage to the Land, the Building or the Premises, caused by any act
or omission of Tenant shall be repaired by and at the sole expense of Tenant,
except Landlord shall have the right, at its option, to make such repairs and to
charge Tenant for all actual costs and expenses incurred in connection therewith
(without mark-up) as Additional Rent payable within ten (10) days after the
rendering of a bill therefor. Tenant shall notify Landlord promptly of any
injury, breakage or damage to the Land, the Building, or the Premises caused by
Tenant.

 

B.    Indemnification: Subject to the mutual waiver of subrogation in Section 17
of this Lease, Tenant hereby agrees to indemnify and hold Landlord harmless from
and against all costs, damages, claims, liabilities and expenses, including
attorneys' fees, suffered by or claimed against Landlord, directly or indirectly
(except to the extent arising from the negligence or willful misconduct of the
Landlord or its agents, employees or contractors), based on, arising out of or
resulting from: (i) Tenant's use and occupancy of the Premises or the business
conducted by Tenant therein or Tenant's presence in the Building or on the Land,
(ii) the making by Tenant of any Alterations, (iii) any act or omission of
Tenant or its employees, agents or invitees, and (iv) any breach or default by
Tenant in the observance or performance of its covenants and obligations under
this Lease.

 

C.    Mutual Waiver of Consequential Damages: Notwithstanding any provision of
this Lease to the contrary (including, without limitation, any indemnification
provision), in no event shall Landlord, Tenant or any of their members,
partners, directors, officers, shareholders, employees, advisers or agents be
responsible for interruption or loss of business, income or profits, or any
other consequential, indirect or special damages, except to the extent of any
consequential, indirect or special damages arising from Tenant’s violation of
its obligations set forth in Sections 21 or 36 hereof.

 

15.LIMITATION ON LANDLORD LIABILITY.

 

A.    Liability Standard: Landlord shall not be liable to Tenant or any other
individual or entity for any damage, loss or claim whatsoever, except damages,
losses and claims that are the direct result of Landlord's gross negligence or
willful misconduct; however, in no event shall Landlord be liable for
consequential damages or any loss, damage or injury relating to Tenant’s
Personal Property, including without limitation, Tenant’s Installations,
animals, products, research, experiments, samples, business, accounting or any
other records.

 

B.    Limitation on Total Liability: Notwithstanding any other provision of this
Lease, it is expressly understood and agreed that the total liability of
Landlord arising out of or in connection with this Lease, the relationship of
Landlord and Tenant hereunder and/or Tenant's use of the Premises, shall be
limited to the estate of Landlord in the Building. No other property or assets
of Landlord or any partner or owner of Landlord shall be subject to levy,
execution, or other enforcement proceedings or other judicial process for the
satisfaction of any judgment or any other right or remedy of Tenant arising out
of or in connection with this Lease, the relationship of Landlord and Tenant
hereunder and/or Tenant's use of the Premises.

 

 21 

 

 

16.FIRE AND OTHER CASUALTY.

 

If the Premises shall be damaged by fire or other casualty, other than as a
result of the negligence or misconduct of Tenant, this Lease shall not terminate
and, upon adjustment of insurance claims, Landlord shall repair the damage,
provided that Landlord shall have no obligation to repair damage to or replace
Tenant's Personal Property. Except as otherwise provided herein, if any part of
the Premises are rendered untenantable by reason of any such damage, Rent shall
abate from the date of the damage to the date the damage is repaired, as
determined by Landlord, in the proportion that the area of the untenantable part
bears from time to time to the total area of the Premises. No compensation or
reduction of Rent shall be paid or allowed for inconvenience, annoyance or
injury to Tenant or Tenant's business arising from any damage to or repair of
the Premises or the Building.

 

Tenant, at its expense, shall promptly perform, subject to delays arising from
the collection of insurance proceeds, Unavoidable Delay or obtaining approval
from any applicable governmental authority having jurisdiction over Hazardous
Materials to restore the Premises (“Hazardous Material Clearances”), all repairs
or restoration not required to be done by Landlord and shall promptly re-enter
the Premises and commence doing business in accordance with this Lease. Provided
Tenant fully and promptly cooperates with Landlord, following written or verbal
notice to Tenant, with all reasonable procedures Landlord deems necessary for
Landlord to obtain such Hazardous Materials Clearances, Rent shall be abated
from the date of such casualty until the Premises are repaired and restored, in
the proportion which the area of the Premises, if any, which is not usable by
Tenant bears to the total area of the Premises, unless Landlord provides Tenant
with other space during the period of repair that is suitable for the temporary
conduct of Tenant’s business. Such abatement shall be the sole remedy of Tenant
and Tenant waives any right to terminate this Lease by reason of damage or
casualty loss. If Tenant fails to cooperate as described herein, neither Base
Rent nor Additional Rent shall be abated until the date upon which Landlord is
able to obtain such Hazardous Materials Clearances.

 

Notwithstanding anything herein to the contrary, if (1) insurance proceeds are
insufficient to pay the full cost of such repair and restoration, (2) the holder
of any Mortgage fails or refuses to make insurance proceeds available for such
repair and restoration, (3) zoning or other applicable Laws do not permit such
repair and restoration, or (4) the Building is damaged by fire or casualty
(whether or not the Premises has been damaged) to such an extent that Landlord
decides, in its sole and absolute discretion, not to rebuild or reconstruct the
Building, then Landlord, at its option, may give Tenant, within sixty (60) days
after the casualty, written notice of termination of this Lease, and this Lease
and the Term shall terminate (whether or not the Term has commenced) upon the
expiration of thirty (30) days from the date of the notice, with the same effect
as if the new expiration date had been the Lease Expiration Date, and all Base
Rent and Additional Rent payable pursuant to Section 5 of this Lease shall be
apportioned as of such date.

 

 22 

 

 

If the Premises or the Building shall be damaged by fire or other casualty due
to the negligence or misconduct of Tenant: (i) Landlord shall have no obligation
to repair the Premises or the Building, (ii) this Lease shall, at Landlord's
option, not terminate, (iii) Landlord may at Tenant's expense repair the damage,
and (iv) Landlord may pursue any legal and equitable remedies available to it.

 

17.INSURANCE.

 

A.    Tenant's Insurance:

 

(a)    Throughout the Term, Tenant shall obtain and maintain the following:

 

(1) Commercial General Liability insurance (written on an ISO occurrence form or
equivalent basis) including contractual liability coverage insuring the
obligations assumed by Tenant under this Lease (including those set forth in
Sections 14.B. and 36.B.), premises and operations coverage, broad form property
damage coverage and independent contractors coverage, and personal injury with a
minimum of Two Million Dollars ($2,000,000) each occurrence and Three Million
Dollars ($3,000,000) general aggregate. The policy limits may be obtained
through any combination of primary and excess insurance.

 

(2) Property Insurance written on a “Special Cause of Loss” form covering
Tenant’s business personal property, stock, and, if applicable, inventory, and
leasehold improvements at 100% of the full replacement value written with a
commercially reasonable deductible. Such property insurance shall be in an
amount not less than that required to replace all of the original tenant
improvements installed in the Premises pursuant to Exhibit C attached hereto or
Section 3 hereof, as applicable, and made a part hereof, all Alterations and all
other contents of the Premises (including, without limitation, Tenant's trade
fixtures, decorations, furnishings, equipment and personal property).

 

(3) [Intentionally Omitted].

 

(4) Comprehensive automobile liability insurance (covering automobiles owned by
Tenant, if any and hired and non-owned automobiles). Such automobile liability
insurance shall be in an amount not less than One Million Dollars
($1,000,000.00) bodily injury and property damage for each accident.

 

(5) worker's compensation insurance providing statutory limits as required by
the jurisdiction in which the Building is located and employer's liability
insurance with minimum limits of $500,000 each accident, $500,000 each
employee-disease and $500,000 policy limit-disease. Such policy shall provide a
waiver of subrogation in favor of Landlord.

 

 23 

 

 

(b)    All insurance carried by Tenant pursuant to Section 17.A.(a) hereof
shall: (1) be issued by a company that is licensed to do business in the
jurisdiction in which the Building is located, that has been approved in advance
by Landlord and that has a rating equal to or exceeding A-X from Best's
Insurance Guide; (2) name Landlord, the managing agent of the Building and the
holder of any Mortgage as additional insureds providing an Additional Insured –
Managers or Lessors of Premises Endorsement (#CG-20-11-01-96 or equivalent); (3)
contain an endorsement that such policy shall remain in full force and effect
notwithstanding that the insured may have waived its right of action against any
party prior to the occurrence of a loss (Tenant hereby waiving its right of
action and recovery against and releasing Landlord and its employees and agents
(including, but not limited to, Landlord’s managing agent) from any and all
liabilities, claims and losses for which they may otherwise be liable to the
extent Tenant is covered by insurance carried or would have been covered by
insurance it is required to carry under this Lease); (4) provide that the
insurer thereunder waives all right of recovery by way of subrogation against
Landlord, its partners, agents (including, but not limited to, Landlord’s
managing agent), employees, and representatives, in connection with any loss or
damage covered by such policy; (5) be acceptable in form and content to
Landlord; (6) be primary and non-contributory; and (7) contain an endorsement
for cross liability and severability of interests. Tenant shall provide Landlord
with not less than twenty (20) days prior written notice of any proposed
cancellation, failure to renew, reduction of amount of insurance or change in
coverage of any insurance carried by Tenant pursuant to Section 17.A.(a) hereof.
No such policy shall contain any deductible provision except as otherwise
approved in writing by Landlord, which approval shall not be unreasonably
withheld. Landlord reserves the right from time to time to require Tenant to
obtain higher minimum amounts or different types of insurance if it becomes
customary for other landlords of first-class office buildings in the Washington,
D.C., metropolitan area to require similar sized tenants in similar industries
to carry insurance of such higher minimum amounts or of such different types of
insurance. Tenant shall deliver a certificate (on Acord Form 27) of all such
insurance and receipts evidencing payment therefor (and, upon request, copies of
all required insurance policies, including endorsements and declarations) to
Landlord concurrently with Tenant's execution of this Lease and at least
annually thereafter. Tenant shall give Landlord immediate notice in case of
fire, theft or accident in the Premises, and in the case of fire, theft or
accident in the Building if involving Tenant, its agents, employees or Invitees.
Neither the issuance of any insurance policy required under this Lease nor the
minimum limits specified herein shall be deemed to limit or restrict in any way
Tenant's liability arising under or out of this Lease.

 

Except for the indemnification contained in Section 36.B. hereof with respect to
Hazardous Materials, neither Landlord nor Tenant shall be liable to the other or
to any insurance company (by way of subrogation or otherwise) insuring the other
party for any loss or damage to any building, structure or other tangible
property, or any resulting loss of income, or losses under workers' compensation
laws and benefits, even though such loss or damage might have been occasioned by
the negligence of such party or its agents or employees. The provision of this
Section 17.A.(b) shall not limit the indemnification for liability to third
parties pursuant to Section 14 hereof. In the event of a permitted sublease or
other occupancy agreement for all or a portion of the Premises, the subtenant or
occupant shall expressly agree in writing to be bound by the provisions of this
Section 17.A.(b) (as if such subtenant or occupant were Tenant hereunder) for
the benefit of Landlord.

 

B.    Tenant's Contractor's Insurance

 

Tenant shall require any contractor of Tenant performing work on the Premises to
carry and maintain at no expense to Landlord, a non-deductible:

 

 24 

 

 

(a)       Commercial general liability insurance policy, including (but not
limited to) contractor's liability coverage, contractual liability coverage,
completed operations coverage, broad form property damage endorsement and
contractor's protective liability coverage, to afford protection with respect to
personal injury, death or property damage of not less than One Million Dollars
($1,000,000) per occurrence combined single limit/Two Million Dollars
($2,000,000) general aggregate, with excess umbrella liability insurance of no
less than Three Million Dollars ($3,000,000) per occurrence and general
aggregate;

 

(b)       Comprehensive automobile liability insurance policy with a combined
single limit for each occurrence of not less than One Million Dollars
($1,000,000) with respect to personal injury or death and property damage; and

 

(c)       Worker’s compensation insurance policy or similar insurance in form
and amounts required by law. Such policy shall provide a waiver of subrogation
in favor of Tenant and Landlord.

 

C.    Landlord's Insurance: Landlord agrees to carry and maintain special cause
of loss property insurance (with replacement cost coverage) covering the
Building and Landlord's property therein in an amount required by its insurance
company to avoid the application of any coinsurance provision. Landlord shall
secure a waiver of subrogation endorsement from its insurance carrier. Landlord
also agrees to carry and maintain commercial general liability insurance in
limits it reasonably deems appropriate based upon coverages in force with
respect to comparable buildings in the Washington, D.C. metropolitan area.

 

D.    Effect of Tenant's Activities on Insurance: Tenant shall not conduct or
permit to be conducted any activity, or place any equipment in or about the
Land, the Building or the Premises which will increase the rate of, or make void
or voidable, any fire or other insurance maintained or required to be maintained
by Landlord or any Mortgagee on the Building, the Land or the property kept
thereon or therein, which will conflict with the provisions of any such
insurance policy or which will make it impracticable for Landlord to obtain
insurance covering any risks against which Landlord reasonably deems it
advisable to obtain insurance. In the event any increases in the rates of such
insurance are, in Landlord's reasonable judgment, due to Tenant's presence in
the Building, to any activity conducted or property installed or placed by
Tenant on or about the Land, the Building or the Premises or to Alterations
installed by Tenant or at Tenant's request, Tenant shall reimburse Landlord for
the amount of such increases promptly upon demand therefor. Statements by the
applicable insurance company or insurance rating bureau that such increases are
due to any of Tenant's activity, property or improvements shall be conclusive
for the purposes of determining Tenant's liability hereunder. In the event
Landlord receives notice from any of Landlord's insurance carriers that such
carrier intends to cancel its insurance on the Building, or to increase the cost
of such insurance by more than one hundred percent (100%) above the premium
payable by Landlord immediately prior to such notice, due to the activities of
Tenant or the presence of Tenant in the Building, then Landlord shall have the
right to terminate this Lease upon thirty (30) days' notice to Tenant. However,
Landlord shall not terminate this Lease in the event Landlord is able, with good
faith efforts, to obtain equivalent insurance from an insurance carrier
satisfactory to Landlord at a premium not more than one hundred percent (100%)
greater than the premium for the cancelled insurance; provided that Tenant shall
reimburse Landlord for all additional premiums charged to Landlord by such new
insurance carrier. It is expressly understood that Landlord shall not have the
right to terminate this Lease pursuant to this Section 17.E. (i) if any
cancellation or rate increase is due to factors generally applicable to the
insurance or rental market, rather than to Tenant's activities or presence in
the Building or (ii) if Tenant is conducting only the permitted use pursuant to
Section 6.A. of this Lease at the Premises, and such use is being conducted in
accordance with all applicable laws and governmental regulations in accordance
with the provisions of this Lease.

 

 25 

 

 

18.CONDEMNATION.

 

A.    Landlord's Right to Terminate: If a substantial part of the Premises, the
Building or the Land is taken or condemned by any governmental or
quasi-governmental authority for any purpose or is granted to any authority in
lieu of condemnation (collectively, a "taking"), Landlord shall have the right
in its sole discretion to terminate this Lease by written notice to Tenant, and
upon the giving of such notice, the Term shall terminate as of the date title
vests in the authority, and Base Rent and Additional Rent payable pursuant to
Section 5 hereof shall be abated as of that date. For purposes of this Section
18, a substantial part of the Premises, the Land or the Building shall be
considered to have been taken if, in the sole and reasonable opinion of
Landlord, the taking shall render it commercially undesirable for Landlord to
permit this Lease to continue or to continue operating the Building.

 

B.    Adjustment of Rent: If a portion of the Premises is taken and Landlord
does not elect to terminate this Lease pursuant to Section 18.A. hereof, then
Base Rent and Additional Rent payable pursuant to Section 5 hereof shall be
equitably adjusted as of the date title vests in the authority and this Lease
shall otherwise continue in full force and effect.

 

C.    Division of Award: Tenant shall have no claim against Landlord arising out
of or related to any taking, or for any portion of the amount that may be
awarded as a result, damages or compensation attributable to damage to the
Premises, value of the unexpired portion of the Term, loss of profits or
goodwill, leasehold improvements or severance damages, and Tenant hereby assigns
to Landlord all its rights, title and interest in and to any such award;
provided, however, that Tenant may assert any claim it may have against the
authority for compensation for Tenant's Personal Property and for any relocation
expenses compensable by statute, as long as such awards shall be made in
addition to and stated separately from the award made for the Land, the Building
and the Premises.

 

19.DEFAULT.

 

A.    Default of Tenant: The following events shall be a default by Tenant (a
"Default") under this Lease:

 

(1) Failure of Tenant to pay Rent as and when due; provided, however, that with
respect to the first two (2) such failures in any twelve (12) month period only,
no Default shall be deemed to have occurred unless such failure continues for a
period of three (3) days after written notice thereof from Landlord to Tenant.

 

(2) Failure of Tenant to comply with or perform any covenant or obligation of
Tenant under this Lease, if the failure continues for ten (10) days after notice
from Landlord to Tenant specifying the failure, other than (i) those concerning
the payment of Rent, (ii) those set forth in any of Sections 8.B., 17, 21, 22,
26, 35, 36 and 38 hereof, as to which a specific timeframe for the performance
of such covenant or obligation is set forth therein, and (iii) any Default
arising under subsections (3), (4), (5) or (6) of this Section 19.A; provided,
however, that if the failure on the part of Tenant is not capable of being cured
within such 30-day period but Tenant expeditiously commences to cure same and
diligently proceeds with such cure, Tenant’s time to cure such failure shall be
extended for the time necessary to cure same, but in no event longer than ninety
(90) days, inclusive of the original 30-day period.

 

 26 

 

 

(3) If, in Landlord's reasonable opinion, Tenant's activities or presence in the
Premises results in a significant, continuing or repeated threat of physical
danger to other tenants and/or users of the Building, whether or not Tenant is
capable of controlling such threat.

 

(4) If Tenant, any Guarantor or, if Tenant is a partnership, any partner of
Tenant ("Partner"), shall file a voluntary petition in bankruptcy or insolvency,
shall be adjudicated bankrupt or insolvent or shall file a petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal, state or
other Laws, or shall make an assignment for the benefit of creditors, or shall
seek or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of any Guarantor or Partner or of all or any part of the property of
Tenant or of such Guarantor or Partner.

 

(5) If, within thirty (30) days after the commencement of any proceeding against
Tenant or any Guarantor or Partner, whether by the filing of a petition or
otherwise, seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
applicable federal, state or other Laws, such proceeding shall not have been
dismissed or if, within thirty (30) days after the appointment of any trustee,
receiver or liquidator of Tenant or any Guarantor or Partner, or of all or any
part of the property of Tenant or of any Guarantor or Partner, without the
acquiescence of such individual or entity, such appointment shall not have been
vacated or otherwise discharged, or if any execution or attachment shall have
been issued against the property of Tenant or of any Guarantor or Partner,
pursuant to which the Premises shall be taken or occupied or attempted to be
taken or occupied.

 

(6) If Tenant fails to take possession of the Premises on the Lease Commencement
Date or vacates, abandons or ceases to carry on its ordinary activities in the
Premises prior to the Lease Expiration Date, with or without an intention of
paying Rent; provided, however, that if (i) Tenant gives Landlord at least
thirty (30) days prior written notice that it intends not to occupy the entire
Premises or that it intends to vacate the entire Premises, as applicable, (ii)
Tenant pays the full amount of all Rent when due under this Lease while the
Premises are vacant (subject to applicable notice and cure periods in connection
with any failure to so timely pay Rent), and (iii) Tenant continues to maintain
the Premises in the condition required by this Lease throughout the remainder of
the Term (subject to applicable notice and cure periods in connection with any
failure to so maintain the Premises), then, and in such event only, Tenant shall
not be deemed to be in Default under this Section 19.A.(6).

 

(7) Failure of Tenant to comply with or perform any covenant or obligation under
Sections 8.B., 17, 21, 22, 26, 35, 36 or 38 hereof within the specific timeframe
for the performance of such covenant or obligation set forth in the applicable
Section.

 

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B.    Remedies Upon Default: Upon the occurrence of a Default, Landlord shall
have the right, then or at any time thereafter:

 

(1) Without demand or notice, to reenter and take possession of all or any part
of the Premises, to expel Tenant and those claiming through Tenant and to remove
any property therein, either by summary proceedings or by any other action at
law, in equity or otherwise, with or without terminating this Lease, without
being deemed guilty of trespass and without prejudice to any other remedies of
Landlord for breach of this Lease, and/or

 

(2) To terminate this Lease by written notice to Tenant, whereupon this Lease
shall terminate on the date specified in Landlord's notice, and Tenant's right
to possession of the Premises shall cease as of such date.

 

If Landlord elects to terminate this Lease, everything contained in this Lease
on the part of Landlord to be done shall cease, without prejudice to Landlord's
right to recover from Tenant all Rent, as set forth in Sections 19.C. and 19.D.
below. If Landlord elects to reenter pursuant to Section 19 above, Landlord may
terminate this Lease, or, from time to time without terminating this Lease, may
relet all or any part of the Premises as the agent of Tenant, for such term, at
such rental and upon such other provisions as Landlord deems acceptable, with
the right to make any alterations and repairs to the Premises that Landlord
deems appropriate, including but not limited to restoring the Premises and
Building to a condition necessary to comply with FDA regulations and any
applicable Laws such that the Premises and Building may be relet to another
tenant without delay due to inability to obtain a permit or certificate of
occupancy, at Tenant's expense. No such reentry or taking of possession of the
Premises shall be construed as an election to terminate this Lease, unless
notice of such intention is given pursuant to Subsection B.(2) above, or unless
termination be decreed by a court of competent jurisdiction at the instance of
Landlord. Landlord shall in no event be under any obligation to relet any part
of the Premises.

 

C.    Liability of Tenant: If Landlord terminates this Lease or reenters the
Premises (with or without terminating this Lease), Tenant shall remain liable
(in addition to all other liabilities of Tenant accrued at the time of the
Default) for the sum of (i) any unpaid Rent accrued prior to the time of
termination and/or reentry, as the case may be, plus interest thereon from the
due date at the Default Rate, (ii) all Base Rent and Additional Rent provided
for in this Lease from the time of termination and/or reentry, as the case may
be, until the date this Lease would have expired had a Default not occurred,
plus interest thereon from the due date at the Default Rate, (iii) any and all
expenses (including but not limited to attorneys' and brokerage fees) incurred
by Landlord in reentering and repossessing the Premises, in correcting any
default, in painting, altering or repairing the Premises in order to place the
Premises in first-class rentable condition (whether or not the Premises are
relet), in protecting and preserving the Premises and in reletting or attempting
to relet the Premises, and (iv) any other amounts necessary to compensate
Landlord for any other injury or detriment caused by the Default; minus the net
proceeds (after deducting any rental abatements, tenant improvement allowances
and other concessions and inducements) actually received by Landlord, if any,
from any reletting to the extent attributable to the period prior to the date
this Lease would have expired had a Default not occurred. Landlord shall have
the option to recover any damages sustained by Landlord either at the time of
reletting, if any, or in separate actions from time to time as said damages
shall have been made more easily ascertainable by successive relettings or, at
Landlord's option, to defer any such recovery until the date this Lease would
have expired in the absence of a Default, in which event Tenant hereby agrees
that the cause of action shall be deemed to have accrued on the aforesaid date.
The provisions of this Section 19.C. shall be in addition to, and shall not
prevent the enforcement of, any claim Landlord may have for anticipatory breach
of this Lease.

 

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D.    Liquidated Damages: In addition to Landlord's rights pursuant to Section
19.C. above, if Landlord terminates this Lease, Landlord shall have the right at
any time, at its sole option, to require Tenant to pay to Landlord on demand, as
liquidated damages, the sum of (i) the total of the Base Rent, Additional Rent
and all other sums which would have been payable under this Lease from the date
of Landlord's demand for liquidated damages ("Landlord's Demand") until the date
this Lease would have terminated in the absence of the Default, discounted to
present value at the rate of five percent (5%) per annum (the "Discount Rate"),
(ii) all unpaid Rent accrued prior to the time of Landlord's Demand, plus
interest thereon from the due date at the Default Rate, (iii) any and all actual
out-of-pocket expenses (including but not limited to reasonable attorneys' and
brokerage fees) incurred by Landlord in reentering and repossessing the
Premises, in correcting any default, in painting, altering or repairing the
Premises in order to place the Premises in first-class rentable condition
(whether or not the Premises are relet), in protecting and preserving the
Premises and in reletting or attempting to relet the Premises, and (iv) any
other amounts necessary to compensate Landlord for any other injury or detriment
caused by the Default; minus the sum of (a) the net fair market rental value of
the Premises for the period referred to in Section 19.D.(i) above, discounted to
present value at the Discount Rate, and (b) any sums actually paid by Tenant to
Landlord pursuant to Subsection C. above; provided, however, that if said
damages shall be limited by law to a lesser amount, Landlord shall be entitled
to recover the maximum amount permitted by law. The "net fair market rental
value" referred to in Section 19.D.(a) above shall be the fair market rental
value of the Premises at the time of Landlord's Demand, reduced by any rental
abatements, tenant improvement allowances and other concessions and inducements
generally provided by landlords seeking to lease comparable commercial property
in the area of the Premises at the time of Landlord's Demand. If reletting is
accomplished within a reasonable time after Lease termination, the "net fair
market rental value" referred to in Section 19.D.(a) above shall be deemed prima
facie to be the net rental income (after deducting any rental abatements, tenant
improvement allowances and other concessions and inducements) realized upon such
reletting.

 

E.    Waiver: Upon Landlord’s exercise of its right to terminate this Lease,
Tenant, on its own behalf and on behalf of all persons and entities claiming
through Tenant, including but not limited to creditors of Tenant, hereby waives
any and all rights and privileges which Tenant and such other persons and
entities might otherwise have under any present or future Laws: (i) to redeem
the Premises, (ii) to reenter or repossess the Premises, or (iii) to restore the
operation of this Lease, with respect to any dispossession of Tenant by judgment
or warrant of any court, any reentry by Landlord or any expiration or
termination of this Lease, whether by operation of law or pursuant to the
provisions of this Lease. Tenant hereby expressly waives receipt of any notice
to quit.

 

F.    Right of Distress: Landlord shall, to the extent permitted by law, have a
right of distress for Rent.

 

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G.    Right of Landlord to Cure: If Tenant defaults in the making of any payment
or in the doing of any act required to be made or done by Tenant under this
Lease, then Landlord may, at its option, make such payment or do such act, and
the expenses thereof, with interest thereon at the Default Rate, from the date
paid by Landlord, shall constitute Additional Rent hereunder due and payable by
Tenant with the next payment of Monthly Base Rent.

 

H.    Attorneys' Fees: In the event of any Default by Tenant hereunder, Tenant
shall pay to Landlord all attorneys' fees incurred by Landlord in connection
with such Default or the enforcement of Landlord's rights or remedies arising in
connection therewith, whether or not this Lease is terminated and whether or not
Landlord institutes any lawsuit against Tenant as a result of such Default. In
addition to the foregoing, whether or not this Lease is terminated, Tenant shall
pay to Landlord all other costs incurred by Landlord with respect to any lawsuit
instituted or action taken by Landlord to enforce the provisions of this Lease,
unless it is determined that Landlord is not entitled to any of the relief
sought in such lawsuit, based upon the decision of a court of competent
jurisdiction that is unappealable (i.e., the timeframe for filing appeals has
expired, without an appeal having been filed, or if an appeal has been filed,
such appeal has been finally resolved). In the event that Tenant initiates
litigation against Landlord based upon an alleged default by Landlord under this
Lease, and Tenant is the prevailing party in such litigation based upon a
judgment by a court of competent jurisdiction that Landlord is in default
hereunder, then, after the date upon which such judicial order becomes
unappealable (i.e., the timeframe for filing appeals has expired, without an
appeal having been filed, or if an appeal has been filed, such appeal has been
finally resolved), Landlord shall pay to Tenant all reasonable attorneys’ fees.

 

I.    Survival: Tenant's liability pursuant to this Section 19 shall survive the
termination of this Lease, the institution of summary proceedings and/or the
issuance of a warrant thereunder.

 

20.NO WAIVER.

 

No failure or delay by Landlord in enforcing its right to strict performance by
Tenant of every provision of this Lease or in exercising any right or remedy
hereunder, and no acceptance by Landlord of full or partial rent during the
continuance of any Default, shall constitute a waiver of the provision or the
Default, and no provision shall be waived or modified except by a written
instrument executed by Landlord. No payment by Tenant, or receipt by Landlord,
of a lesser amount than the full Rent shall be deemed to be other than a payment
on account, notwithstanding any endorsement or statement on any check or letter
accompanying any payment of any Rent. No waiver of any Default or settlement of
any proceeding instituted on account of any claimed Default shall affect or
alter this Lease or constitute a waiver of any of Landlord's rights hereunder.
No failure or delay by Tenant in enforcing its right to strict performance by
Landlord of every provision of this Lease or in exercising any right or remedy
hereunder shall constitute a waiver of the provision or a default, and no
provision shall be waived or modified except by a written instrument executed by
Tenant.

 

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21.HOLDING OVER.

 

If Tenant shall be in possession of the Premises after termination of this Lease
(whether by normal expiration of the Term or otherwise), at Landlord's option:
(i) Landlord may deem Tenant to be occupying the Premises as a tenant from
month-to-month, at the sum of two hundred fifty percent (250%) of the Monthly
Base Rent in effect for the last full month of the Term, plus the monthly
installment of Additional Rent which is then payable pursuant to Section 5. of
this Lease, and subject to all of the other provisions of this Lease, as
applicable to a month-to-month tenancy, and (ii) Landlord may exercise any or
all remedies for Default and at law and in equity, including but not limited to
an action against Tenant for wrongfully holding over. Any such holdover shall be
deemed to be a tenancy-at-sufferance and not a tenancy-at-will or tenancy from
month-to-month. In no event shall any holdover be deemed a permitted extension
or renewal of the Term, and nothing contained herein shall be construed to
constitute Landlord's consent to any holdover or to give Tenant any right with
respect thereto.

 

22.SUBORDINATION.

 

A.    Lease Subordinate: Provided that Tenant receives the SNDA in accordance
with the terms set forth in this Section 22, this Lease is subject and
subordinate to the lien of any and all Mortgages and to any Ground Leases, and
any and all renewals, extensions, modifications, recastings and refinancings
thereof. Upon receipt of the SNDA in accordance with the terms set forth in this
Section 22, this clause shall be self-operative, without execution of any
further instrument; but if requested by Landlord or any Mortgagee, Tenant shall
promptly execute a certificate or other document evidencing and providing for
such subordination. Landlord shall have the right to execute said document on
behalf of Tenant if Tenant fails to do so within five (5) days after receipt of
the request. In accordance with the terms of the SNDA, Tenant agrees that, if
any Mortgage is foreclosed or Ground Lease terminated, upon request by the
purchaser at the foreclosure sale or Ground Lessor, as the case may be, Tenant
shall attorn to and recognize the purchaser or Ground Lessor as the landlord
under this Lease and shall make all payments required hereunder to such new
landlord without any deduction or set-off of any kind whatsoever. Subject to
receipt of the SNDA, Tenant waives the provisions of any Laws, now or hereafter
in effect, which may give or purport to give Tenant any right to terminate or
otherwise affect this Lease or the obligations of Tenant hereunder in the event
that any such foreclosure, termination or other proceeding is filed, prosecuted
or completed. Notwithstanding anything herein to the contrary, any Mortgagee may
at any time subordinate the lien of its Mortgage to the operation and effect of
this Lease without Tenant's consent, by giving Tenant written notice of such
subordination, in which event this Lease shall be deemed to be senior to such
Mortgage, and thereafter such Mortgagee shall have the same rights as it would
have had if this Lease had been executed, delivered and recorded before said
Mortgage. Provided that Tenant is not in default hereunder (or, if Tenant is in
default, then provided that Tenant cures same within any applicable notice and
cure period set forth in this Lease), Landlord shall obtain from any future
Mortgagee or Ground Lessor (it being agreed that there is no current Mortgagee
or Ground Lessor as of the date of this Lease) a non-disturbance agreement (the
“SNDA”) for the benefit of Tenant in such Mortgagee’s or Ground Lessor’s, as the
case may be, usual form, which SNDA shall provide, at a minimum, that so long as
no Default by Tenant exists under this Lease, in the event of a foreclosure or
deed in lieu of foreclosure, such Mortgagee or Ground Lessor (i) shall recognize
this Lease and shall agree that the tenancy of Tenant hereunder shall not be
disturbed because of such foreclosure or deed in lieu of foreclosure, (ii) shall
not reduce Tenant’s rights under this Lease in more than a de minimis manner or
expand Tenant’s obligations under this Lease in more than a de minimis manner,
except for possibly requiring notices from Tenant to such Mortgagee or Ground
Lessor, (iii) specifically recognizes Tenant’s rights set forth in Sections 42
and 43 hereof and Tenant’s rights set forth in the Work Agreement, and (iv)
shall not impose on Tenant increased administrative duties which are more than
de minimis and which are not typical of similarly situated tenants.
Notwithstanding anything to the contrary contained in this Lease, in the event
that Landlord does not obtain an SNDA from any future Mortgagee or Ground
Lessor, Landlord shall not be in default under this Lease; however, this Lease
shall not be subject and subordinate to the lien of said Mortgage or Ground
Lease, as the case may be, nor shall Tenant be obligated to attorn to and
recognize the purchaser or Ground Lessor, as the case may be, as the landlord
under this Lease.

 

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B.    Modifications to Lease: If any of Landlord's insurance carriers or any
Mortgagee requests modifications to this Lease, then Tenant shall execute a
written amendment incorporating such requested modifications within thirty (30)
days after the same has been submitted to Tenant by Landlord, provided that such
modifications do not (a) adversely affect Tenant's use of the Premises as herein
permitted, (b) increase the rentals and other sums payable by Tenant hereunder,
(c) include any changes to (i) requirements relating to Tenant's Security
Deposit under Section 35 hereof, (ii) the default provisions of Section 19
hereof, (iii) Tenant's Renewal Option pursuant to Section 41 hereof (iv)
Tenant’s termination rights pursuant to Section 42 hereof, or (v) Tenant’s
rights pursuant to Section 43 hereof, (d) do not adversely affect any of
Tenant's other rights or obligations under this Lease in more than a de minimis
manner, or (e) decrease Landlord's obligations hereunder. In the event that
Tenant refuses or fails to execute such amendment that complies with this
Section 22.B. within ten (10) days after Landlord’s delivery of same to Tenant,
then Landlord shall have the right to provide Tenant with a notice that such
failure to execute the amendment within an additional ten (10) days shall
constitute a Default under this Lease, and if Tenant fails to execute such
amendment within such additional ten (10) day period, then such failure shall
constitute a Default hereunder.

 

23.ASSIGNMENT AND SUBLETTING.

 

A.    No Transfer Without Consent: Tenant shall not, without the prior written
consent of Landlord in each instance (which consent may be withheld in
Landlord's sole and absolute discretion) (i) assign, mortgage or otherwise
encumber this Lease or any of its rights hereunder; (ii) sublet the Premises or
any part thereof or permit the occupancy or use of the Premises or any part
thereof by any persons or entities other than Tenant and its agents and
employees; or (iii) permit the assignment of this Lease or any of Tenant's
rights hereunder by operation of law. Any attempted assignment, mortgaging or
encumbering of this Lease or any of Tenant's rights hereunder and any attempted
subletting or grant of a right to use or occupy all or a portion of the Premises
in violation of the foregoing sentence shall be void. If at any time during the
Term Tenant desires to assign, sublet or mortgage all or part of this Lease or
the Premises, then in connection with Tenant's request to Landlord for
Landlord's consent thereto, Tenant shall give thirty (30) days' notice prior to
Landlord in writing ("Tenant's Request Notice") containing: the identity of the
proposed assignee, subtenant or other party and a description of its business;
the terms of the proposed assignment, subletting or other transaction; the
commencement date of the proposed assignment, subletting or other transaction
(the "Proposed Sublease or Assignment Commencement Date"); the area proposed to
be assigned, sublet or otherwise encumbered (the "Proposed Sublet or Assignment
Space"); the proposed use of the Premises by the proposed assignee or subtenant,
including the Hazardous Materials intended to be used, stored, handled, treated,
generated, disposed or released from the Premises and related permits, reports
and management, storage and installation plans; the most recent financial
statement or other evidence of financial responsibility of such proposed
assignee, subtenant or other party; and a certification executed by Tenant and
such party stating whether or not any premium or other consideration is being
paid for the assignment, sublease or other transaction. Notwithstanding the
foregoing, Landlord agrees that it shall not unreasonably withhold, condition or
delay its consent to a proposed subletting, provided that all of the following
conditions are satisfied: (1) there shall be no default at the time of the
proposed subletting, (2) the proposed subtenant shall be as creditworthy as
Tenant at the time on the Proposed Sublease or Assignment Commencement Date, (3)
the proposed subtenant shall not be a governmental entity or a person or entity
enjoying sovereign or diplomatic immunity, (4) the use of the Premises by the
proposed subtenant shall not attract a volume, frequency or type of visitor or
employee to the Building which is not consistent with the standards of a
high-quality research, development and laboratory building, (5) the proposed
subtenant shall specifically covenant and agree to perform the obligations of
Tenant hereunder and to occupy the Premises subject to the provisions of this
Lease, and (6) Tenant remains liable for the faithful performance of this Lease.

 

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B.    Take-Back Rights: [Intentionally Omitted]

 

C.    Transfer of Ownership Interests: If Tenant is a partnership, then any
event (whether voluntary, concurrent or related) resulting in a dissolution of
Tenant, any withdrawal or change (whether voluntary, involuntary or by operation
of law) of partners owning a controlling interest in Tenant (including each
general partner), or any structural or other change having the effect of
limiting the liability of the partners shall be deemed a voluntary assignment of
this Lease subject to the provisions of this Section 23. If Tenant is a
corporation (or a partnership with a corporate general partner), then any event
(whether voluntary, concurrent or related) resulting in a dissolution, merger,
consolidation or other reorganization of Tenant (or such corporate general
partner), or the sale or transfer or relinquishment of the interest of
shareholders who, as of the date of this Lease, own a controlling interest of
the capital stock of Tenant (or such corporate general partner), shall be deemed
a voluntary assignment of this Lease subject to the provisions of this Section
23; provided, however, that this sentence shall not apply to corporations whose
stock is traded through a national or regional exchange or over-the-counter
market. If Tenant is a limited liability company, then any dissolution of Tenant
or a withdrawal or change, whether voluntary, involuntary or by operation of
law, of members owning a controlling interest in Tenant shall be deemed a
voluntary assignment of this Lease which is subject to the provisions of this
Section 23. In addition, a transfer of all or substantially all of the assets of
Tenant, either by merger, consolidation, or otherwise shall be deemed to be an
assignment which is subject to the provisions of this Section 23. Whether Tenant
is a partnership, corporation or any other type of entity, then, except as set
forth in Section 23.F hereof, at the option of Landlord, a sale of all or
substantially all of Tenant's assets, a change in Tenant's name of which
Landlord has not received prior notice, or a conversion into any other type of
entity shall also be deemed a voluntary assignment of this Lease which is
subject to the provisions of this Section 23.

 

D.    Expenses and Profits; Effect of Consent:

 

(1) In the event Landlord permits Tenant to assign or sublet all or a portion of
the Premises to a third party, fifty percent (50%) of any sums that are paid by
such third party for the right to occupy the Premises, in excess of the sum of
(i) the Rent then in effect, plus (ii) reasonable costs actually incurred by
Tenant in connection with such sublease or assignment for brokerage commissions,
advertising fees, attorneys' fees and tenant improvements, plus (iii) the
unamortized costs of any Alterations to the Premises paid for solely by Tenant
from its own source of funds from time to time (the cost of which shall be
allocated pro rata to the portion of the Premises which is the subject of the
sublease or assignment) shall be paid by Tenant to Landlord on a monthly basis
as Additional Rent.

 

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(2) Tenant shall be responsible for all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in connection with any proposed or
purported assignment or sublease and an administrative fee of Two Thousand Five
Hundred Dollars ($2,500.00).

 

(3) The consent by Landlord to any assignment or subletting shall neither be
construed as a waiver or release of Tenant from any covenant or obligation of
Tenant under this Lease, nor as relieving Tenant from giving Landlord the
aforesaid thirty (30) days' notice of, or from obtaining the consent of Landlord
to, any further assignment or subletting. The collection or acceptance of Rent
from any such assignee or subtenant shall not constitute a waiver or release of
Tenant from any covenant or obligation of Tenant under this Lease, except as
expressly agreed by Landlord in writing.

 

E.    Conditions of Assignment or Sublease: All restrictions and obligations
imposed pursuant to this Lease on Tenant shall be deemed to extend to any
subtenant, assignee, licensee, concessionaire or other occupant or transferee,
and Tenant shall cause such person to comply with such restrictions and
obligations. Any assignee shall be deemed to have assumed obligations as if such
assignee had originally executed this Lease and at Landlord's request shall
execute promptly a document confirming such assumption. Each sublease is subject
to the condition that if the Term is terminated or Landlord succeeds to Tenant's
interest in the Premises by voluntary surrender or otherwise, at Landlord's sole
option, the subtenant shall be bound to Landlord for the balance of the term of
such sublease and shall attorn to and recognize Landlord as its landlord under
the then executory terms of such sublease or, at Landlord's sole option, the
subtenant shall execute a direct lease with Landlord on Landlord's then current
standard form.

 

F.    Permitted Subletting and Assignments: Notwithstanding the foregoing
provisions of this Section 23, Landlord agrees that so long as (a) no Default is
then continuing beyond any applicable cure period, (b) no circumstance shall
have occurred which with the giving of notice, the passage of time, or both
would constitute a Default by Tenant, (c) Tenant or its permitted subtenant or
assignee named herein shall be using the Premises for the uses permitted by this
Lease, and (d) Tenant provided Landlord with not less than ten (10) ten days
prior written of any such assignment or subletting, the provisions of this
Section 23 (other than Sections 23.D.(3) and 23.E.) shall not be applicable with
regard to an assignment of this Lease or a subletting of the Premises to
Tenant's Affiliate (as hereinafter defined), so long as (1) Tenant originally
named herein shall remain primarily liable under this Lease, notwithstanding any
such assignment or subletting and (2) no other or further assignment or
subletting shall be permitted without Landlord's prior written consent. An
"Affiliate", as used herein, shall be a person or entity that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, Tenant. "Control" as used herein shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person or entity, whether through ownership of
voting securities, by contract, or otherwise.

 

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G.    Permitted Occupants. Notwithstanding anything contained in this Section 23
to the contrary (except Section 23.E above), if (1) if no default on the part of
Tenant then exists hereunder and (2) the amount of space utilized for short-term
occupancy rights pursuant to this Section 23.G shall not exceed twenty percent
(20%) of the total number of rentable square feet of area comprising the
Premises, then Novavax, Inc., a Delaware corporation, or its Affiliate
(collectively, “Novavax”) may, without Landlord’s prior written consent and
without being subject to Landlord’s rights and Tenant’s obligations set forth in
Sections 23.A., 23.C., 23.D.(1) and 23.D.(2) above, sublease or license one or
more individual offices (and the use of areas ancillary thereto) in the
Premises, or to grant short-term occupancy rights to third parties or Affiliates
(“Permitted Occupants”); provided, however, that (a) such portions of the
Premises so affected shall not be separately demised or segregated from the
Premises by the construction of a partition wall or entrances, (b) such
arrangements shall be with entities having a business or affiliate relationship
with Novavax, and (c) any such Permitted Occupant shall agree to indemnify
Landlord, Landlord’s management agent and any Mortgagees and to hold them
harmless from and against all costs, damages, claims, liabilities and expenses,
including, but not limited to, reasonable attorneys’ fees, directly or
indirectly, based on, arising out of or resulting from: (i) such Permitted
Occupant’s use and occupancy of the Premises or the business conducted by such
Permitted Occupant therein or such Permitted Occupant’s presence in the
Premises, (ii) any act or omission of such Permitted Occupant or its employees,
agents or contractors, (iii) any breach or default by such Permitted Occupant in
the observance or performance of Tenant’s covenants and obligations under this
Lease (other than Tenant’s obligations to pay Base Rent and Additional Rent
hereunder), and (iv) Novavax shall notify Landlord of such arrangement at least
ten (10) business days prior to such arrangement(s) commencing.

 

24.TRANSFER BY LANDLORD.

 

Landlord (and any successor or affiliate of Landlord) may freely sell, assign or
transfer all or any portion of its interest in this Lease or the Premises, the
Security Deposit, the Building or the Land and, in the event of any such sale,
assignment or transfer, Landlord (but not its successor) shall be relieved of
any and all obligations under this Lease from and after the date of the sale,
assignment or transfer. From and after said date, Tenant shall be bound to such
purchaser, assignee or other transferee, as the case may be, as though the
latter had been the original Landlord hereunder, provided that the purchaser,
assignee or transferee agrees to assume the obligations of Landlord hereunder.

 

25.INABILITY TO PERFORM.

 

This Lease and Landlord’s and Tenant's obligation hereunder shall in no way be
affected, impaired or excused, nor shall either party have any claim against the
other party for damages, because the other party, due to Unavoidable Delays, is
unable to fulfill any of its obligations under this Lease, including, but not
limited to, any obligations to provide any services, repairs, replacements,
alterations or decorations or to supply any improvements, equipment or fixtures,
but in no event shall this Section 25 be interpreted to relieve Tenant of any of
its obligations to pay Rent in the amounts and when due under this Lease or its
obligations to obtain and maintain any insurance required hereunder.

 

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26.ESTOPPEL CERTIFICATES.

 

Tenant shall, without charge, within five (5) days after receipt of any request
therefor, execute and deliver to Landlord a certificate stating: (i) whether
this Lease is unmodified and in full force and effect (or if there have been
modifications, that the Lease is in full force and effect and setting forth all
such modifications); (ii) whether there then exist any defenses against the
enforcement of any right of Landlord hereunder (and, if so, specifying the same
in detail); (iii) the dates to which rent and any other charges hereunder have
been paid by Tenant; (iv) that Tenant has no knowledge of any then uncured
defaults under this Lease (or, if Tenant has knowledge of any such defaults,
specifying the same in detail); (v) that Tenant has no knowledge of any event
that will or may result in the termination of this Lease (or if Tenant has such
knowledge, specifying the same in detail); (vi) the address to which notices to
Tenant are to be sent; and (vii) such other information as may be reasonably
requested. It is understood that any such certificate may be relied upon by
Landlord, any Mortgagee, prospective Mortgagee, Ground Lessor, prospective
Ground Lessor, or purchaser or prospective purchaser of the Land or the
Building.

 

27.COVENANT OF QUIET ENJOYMENT.

 

Landlord covenants that it has the right to make this Lease and that, if Tenant
shall pay all Rent and perform all of Tenant's other obligations under this
Lease, Tenant shall have the right, during the Term and subject to the
provisions of this Lease, to quietly occupy and enjoy the Premises without
hindrance by Landlord or its successors and assigns.

 

28.WAIVER OF JURY TRIAL.

 

Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim brought by either of them against the other with respect to any
matter arising out of or connected with this Lease.

 

29.BROKERS.

 

Landlord and Tenant each represents and warrants to the other that, except as
hereinafter set forth, neither of them has employed any broker in procuring or
carrying on any negotiations relating to this Lease. Landlord and Tenant shall
indemnify and hold each other harmless from any loss, claim or damage relating
to the breach of the foregoing representation and warranty. Landlord recognizes
only the Broker(s) (as set forth in Section 1.K. hereof) as broker(s) with
respect to this Lease and agrees to be responsible for the payment of any
leasing commissions owed to said broker(s).

 

30.CERTAIN RIGHTS RESERVED BY LANDLORD.

 

Subject to Landlord’s obligations and Tenant’s rights set forth in Article 11
hereof, Landlord shall have the following rights, exercisable without notice
(except with respect to subsections A, B, D-F, I and J, which shall require at
least ten (10) business days’ notice to Tenant), without liability for damage or
injury to property, person or business and without effecting an eviction,
constructive or actual, or disturbance of Tenant's use or possession of the
Premises or giving rise to any claim for set-off, abatement of Rent or
otherwise:

 

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A.    To change the Building's name or street address.

 

B.    To affix, maintain and remove any and all signs on the exterior and
interior of the Building; provided, that Landlord shall not remove signage
permitted under Section 39 of this Lease without Tenant’s prior written consent,
which may be granted or denied in Tenant’s sole discretion.

 

C.    To designate and approve, prior to installation, all window shades,
blinds, drapes, awnings, window ventilators, lighting and other similar
equipment to be installed by Tenant that may be visible from the exterior of the
Premises or the Building.

 

D.    To decorate and make repairs, alterations, additions and improvements,
whether structural or otherwise, in, to and about the Building and any part
thereof, and for such purposes to enter the Premises, and, during the
continuance of any such work, to close temporarily doors, and entry ways in the
Building and to interrupt or temporarily suspend Building services and
facilities, all without affecting Tenant's obligations hereunder, as long as the
Premises remain tenantable.

 

E.    To alter, relocate, reconfigure, reduce and withdraw the Common Areas
located outside the Building, including parking and access roads, as long as the
Premises and the parking areas remain reasonably accessible.

 

F.    To erect, use and maintain pipes and conduits in and through the Premises.

 

G.    To construct improvements (including kiosks) on the Land.

 

H.    To prohibit smoking in the entire Building or portions thereof (including
the Premises) and on the Land, so long as such prohibitions are in accordance
with applicable Laws.

 

I.    If any excavation or other substructure work shall be made or authorized
to be made upon land adjacent to the Building or the Land, to enter the Premises
for the purpose of doing such work as is required to preserve the walls of the
Building and to preserve the land from injury or damage and to support such
walls and land by proper foundations.

 

J.    Notwithstanding anything contained herein to the contrary, Landlord may at
any time elect to alter, rehabilitate or renovate all or any portion of the
Building so long as such construction does not substantially and unreasonably
interfere with Tenant’s access to the Premises or substantially and unreasonably
interfere with Tenant’s use of the Premises. Tenant acknowledges that Landlord
has the right to undertake major renovations (including work with respect to the
exterior façade of the Building) with respect to the Building and that Landlord
may hereafter perform additional work, improvements and renovations with respect
to the Building. In connection with any such work, improvements and renovations,
the Landlord may erect scaffoldings, sidewalk bridges and other such
appurtenances. Tenant agrees not to interfere with such work, improvements and
renovations and further agrees that such work, improvements and renovations (and
the construction appurtenances which Landlord may place at or near the Premises)
performed in accordance with this Section 30.J. shall not constitute an eviction
or constructive eviction of Tenant, in whole or in part, and the Base Rent and
all other items of Additional Rent hereunder shall not abate while such work,
improvements and renovations are being made by reason of loss or interruption of
the business of Tenant or otherwise, nor shall Tenant have any claims against
Landlord by reason of such work. Landlord agrees to use commercially reasonable
efforts not to interfere with the conduct of Tenant’s ordinary business
operations in the Premises during any access of the Premises by Landlord.

 

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31. NOTICES.

 

No notice, request, approval, waiver or other communication which may be or is
required or permitted to be given under this Lease shall be effective unless the
same is in writing and hand-delivered, sent by registered or certified mail,
return receipt requested, first-class postage prepaid, or sent with charges
prepaid by a nationally recognized air courier service, addressed to Landlord at
the Landlord Notice Address or to Tenant at the Tenant Notice Address, as
applicable, or at any other address of which either party shall notify the other
in accordance with this Section 31. Such communications, if sent by registered
or certified mail, shall be deemed to have been given two (2) days after the
date of mailing, or if sent by a nationally recognized air courier service,
shall be deemed to have been given one (1) business day after the date of
deposit of the notice with such service. If any Mortgagee shall notify Tenant
that it is the holder of a Mortgage affecting the Premises, no notice, request
or demand thereafter sent by Tenant to Landlord shall be effective until a copy
of same shall be sent to such Mortgagee in the manner prescribed in this Section
31 at such address as such Mortgagee shall designate.

 

32. MISCELLANEOUS PROVISIONS.

 

A.    Benefit and Burden : The provisions of this Lease shall be binding upon,
and shall inure to the benefit of, the parties hereto and each of their
respective successors and permitted assigns.

 

B.    Governing Law : This Lease shall be construed and enforced in accordance
with the Laws of the jurisdiction in which the Building is located.

 

C.    No Partnership : Nothing contained in this Lease shall be deemed to create
a partnership or joint venture between Landlord and Tenant, or to create any
other relationship between the parties other than that of Landlord and Tenant.

 

D.    Delegation by Landlord : Wherever Landlord has the authority to take any
action under this Lease, Landlord shall have the right to delegate such
authority to others, and Landlord shall be responsible for the authorized
actions of such agents, employees and others, to the same extent as if Landlord
had taken such action itself.

 

E.    Tenant Responsibility for Agents : In any case where Tenant is responsible
for performing or refraining from an act or for preventing an action or result
from occurring, Tenant shall also be responsible for any actions taken or
omitted by Tenant's agents, employees, business invitees, licensees,
contractors, subtenants, family members, guests and any other individuals or
entities present in the Building or on the Land at Tenant's invitation (other
than Landlord and any persons present in the Building or on the Land at
Landlord’s invitation).

 

F.    Invalidity of Particular Provisions : If any provision of this Lease or
the application thereof to any person, entity or circumstance shall, to any
extent, be held invalid or unenforceable, the remaining provisions and the
application of such invalid or unenforceable provisions to persons, entities and
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby. Each provision of this Lease shall be valid and
enforced to the fullest extent permitted by law.

 

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G.    Counterparts : This Lease may be executed in several counterparts, all of
which shall constitute one and the same document.

 

H.    Entire Agreement : This Lease, and any exhibits and addenda attached
hereto, embody the entire agreement of the parties hereto, and no
representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Lease or in the exhibits or addenda shall be of
any force or effect. No rights, privileges, easements or licenses are granted to
Tenant hereby, except as expressly set forth herein.

 

I.    Amendments : This Lease may not be modified in whole or in part in any
manner other than by an agreement in writing signed by both Landlord and Tenant.

 

J.    Mortgagee's Performance : Tenant shall accept performance of any of
Landlord's obligations hereunder by any Mortgagee.

 

K.    Limitation on Interest : In any case where this Lease provides for a rate
of interest that is higher than the maximum rate permitted by law, the rate
specified herein shall be deemed to equal, and the party designated as recipient
of such interest shall be entitled to receive, the maximum rate of interest
permitted by law.

 

L.    Remedies Cumulative : All rights and remedies of Landlord shall be
cumulative and shall not be exclusive of any other rights or remedies of
Landlord hereunder or now or hereafter existing at law or in equity.

 

M.    Annual Financial Statements : Not later than March 31 of each calendar
year during the Term, Tenant shall submit to Landlord an audited financial
statement covering the preceding calendar year, which has been prepared in
accordance with generally accepted accounting principles by an independent
certified public accountant.

 

N.    Construction of Lease: There shall be no presumption that this Lease be
construed more strictly against the party who itself or through its agent
prepared it. Landlord and Tenant hereby agree that all parties hereto have
participated in the preparation of this Lease and that each party had the
opportunity to consult legal counsel before the execution of this Lease.

 

O.    Time of the Essence: Time is of the essence with respect to each of
Tenant’s obligations hereunder.

 

P.    Effect of Deletion of Language: The deletion of any printed, typed or
other portion of this Lease shall not evidence the parties' intention to
contradict such deleted portion. Such deleted portion shall be deemed not to
have been inserted in this Lease.

 

Q.    Authority: Tenant and the person executing and delivering this Lease on
Tenant's behalf each represents and warrants that such person is duly authorized
to so act; that Tenant is duly organized, is qualified to do business in the
jurisdiction in which the Building is located, is in good standing under the
Laws of the state of its organization and the Laws of the jurisdiction in which
the Building is located, and has the power and authority to enter into this
Lease; and that all action required to authorize Tenant and such person to enter
into this Lease has been duly taken.

 

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R.    [Intentionally Omitted.] 

 

S.    [Intentionally Omitted.] 

 

T.    Qualified Leases: The parties intend that all payments made to Landlord
under this Lease will qualify as rents from real property for purposes of
Sections 512(b)(3) and 856(d) of the Internal Revenue Code of 1986, as amended
(“Qualified Rents”). If Landlord, in its sole discretion, advises Tenant that
there is any risk that all or part of any payments made under this Lease will
not qualify as Qualified Rents, Tenant agrees (i) to cooperate with landlord to
restructure this Lease in such manner as may be necessary to enable such
payments to be treated as Qualified Rents, and (ii) to permit an assignment of
this Lease, in each case provided such restructuring or assignment will not have
a material economic impact on Tenant.

 

33.CONTINGENCY FOR NOVAVAX DOWNGRADE EVENT.

 

Notwithstanding anything to the contrary contained in this Lease, in the event
that on or before the ninetieth (90th) day following the Lease Commencement Date
(the “Contingency Period”), a Novavax Downgrade Event (as defined below) has
occurred, then Landlord shall have the right, in its sole and absolute
discretion, to terminate this Lease by written notice given to Tenant on or
before the fifth (5th) day following the expiration of the Contingency Period,
in which event this Lease shall terminate on the date of such notice from
Landlord to Tenant, Landlord shall immediately return to Tenant the Security
Deposit and the initial installment of Monthly Base Rent paid by Tenant, and
thereafter neither party shall have any further rights or obligations hereunder,
except for those rights and obligations which survive the termination of this
Lease. In the event that Landlord does not timely provide a termination notice
in accordance with this Section 33, Landlord shall have no further right to
terminate this Lease under this Section 33. A “Novavax Downgrade Event” means
that (1) at any time during the Contingency Period the market capitalization of
Tenant is less than Seven Hundred Million Dollars ($700,000,000.00) and (2) as
of the end of the Contingency Period, Landlord has not obtained a loan and
granted a Mortgage on the Property.

 

34.PARKING.

 

A.    Use of Parking.

 

(1) During the Term, Tenant shall have the exclusive right to use the parking
areas designated from time to time by Landlord for the Building (the "Parking
Area") for the unreserved parking of passenger automobiles. Tenant and its
employees shall observe reasonable precautions in the use of the Parking Area
and shall at all times abide by all rules and regulations governing the use of
the Parking Area promulgated by Landlord or the operator of the Parking Area
(the “Parking Area Operator”). Landlord reserves the right to close the Parking
Area during periods of unusually inclement weather or for repairs. At all times
when the Parking Area is closed, monthly permit holders shall be afforded access
to the Parking Area by means of a magnetic card or other procedure provided by
Landlord or the Parking Area Operator. It is understood and agreed that Landlord
assumes no responsibility, and shall not be held liable, for any damage or loss
to any automobiles parked in the parking facilities or to any personal property
located therein or for any injury sustained by any person in or about the
parking facilities. Landlord reserves the right, upon thirty (30) days prior
written notice, to modify in any way Landlord deems appropriate the manner in
which the Parking Area is accessed during the Term, so long as such modification
does not have a material adverse effect on Tenant’s (and its agents’ and
employees’) access to the Premises.

 

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(2) Landlord’s granting of parking rights hereunder does not create a bailment
between the parties, it being expressly agreed that the only relationship
created between Landlord and Tenant hereby is that of right grantor and right
grantee. All motor vehicles (including all contents thereof) shall be in the
Parking Area at the sole risk of their owners and Tenant, and Landlord is not
responsible for the protection and security of such vehicles. Neither Landlord
nor any agent, employee or contractor of Landlord shall have any liability for
any property damage or personal injury arising out of or in connection with said
motor vehicles, and Tenant shall indemnify and hold Landlord and any agent,
employee or contractor of Landlord harmless from and against all demands,
claims, damages, costs, expenses, liabilities, or causes of action arising out
of or connected with use of the Parking Area by Tenant or by any of Tenant's
employees, agents, invitees, guests, assignees, subtenants, contractors or
visitors (collectively, "Tenant's Invitees"), or any acts or omissions arising
out of or in connection with said motor vehicles.

 

(3) In its use of the Parking Area, Tenant will follow all terms of all
applicable Rules and Regulations enacted by Landlord with respect to the
Building and/or the Parking Area, shall observe reasonable safety precautions in
the use of the Parking Area, and will cause Tenant’s Invitees to do the same.
Any violation of said applicable Rules and Regulations will constitute a Default
hereunder. Upon any such Default, in addition to Landlord’s other rights and
remedies, Landlord may terminate Tenant’s rights to lease parking spaces in the
Parking Area in accordance with the terms of Section 34.A.(1). above.

 

(4) If: (i) all or a portion of the Parking Area is damaged by fire or other
casualty or taken by power of eminent domain or purchased in lieu thereof by any
governmental authority, (ii) the insurance proceeds payable as a result of a
casualty to the Parking Area are applied to a Mortgage, or (iii) there is any
material uninsured loss to the Parking Area, Landlord may terminate Tenant’s
right to lease spaces in the Parking Area in accordance with the terms of
subsection (1) above. If Landlord does not so elect to terminate such rights of
Tenant pursuant to the foregoing provisions of this Section 34.A.(4), then: (1)
Landlord will either (a) proceed to restore the Parking Area (and Landlord shall
have no obligation to provide any alternative parking while such restoration is
being performed), or (b) not restore the Parking Area, but provide Tenant with
alternate parking throughout the remainder of the Term.

 

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35.SECURITY DEPOSIT.

 

A.    Amount and Uses: Landlord acknowledges receipt from Tenant of the Security
Deposit in the form of a Letter of Credit (as hereinafter defined), to be held
by Landlord as security for the payment of all Rent payable by Tenant and for
the faithful performance by Tenant of all other obligations of Tenant under this
Lease. Said Security Deposit shall be repaid or released to Tenant after the
termination of this Lease (or any renewal thereof), provided Tenant shall have
made all such payments and performed all such obligations hereunder. Landlord
shall not be required to maintain the Security Deposit in a separate account.
The Security Deposit shall not be mortgaged, assigned, transferred or encumbered
by Tenant without the prior written consent of Landlord, and any such act shall
be void. Landlord may, at Landlord's option, appropriate and apply the entire
Security Deposit, or so much thereof as Landlord believes may be necessary, to
compensate Landlord for the payment of any past-due Rent and for loss or damage
sustained by Landlord due to any Default. In the event Landlord appropriates or
applies the Security Deposit in such a manner, Tenant, within five (5) business
days after notice thereof, shall pay to Landlord an amount sufficient to restore
the Security Deposit to the original sum deposited. Tenant's failure to restore
any such deficiency shall constitute a Default hereunder. In the event of
bankruptcy or other debtor-creditor proceedings by or against Tenant, the
Security Deposit shall be applied first to the payment of Rent due Landlord for
all periods prior to the filing of such proceedings.

 

B.    Transferability: In the event of a sale or transfer of Landlord's interest
in the Building or of the interest of any successor or assign of Landlord,
Landlord (or such successor or assign) shall have the right to transfer the
Security Deposit to any vendee or transferee and shall thereupon be released
automatically from any liability therefor. Tenant shall look solely to the
transferee for the return of the Security Deposit. No Mortgagee or purchaser of
any or all of the Building at any foreclosure proceeding shall (regardless of
whether the Lease is at the time subordinated to the lien of said Mortgage) be
liable to Tenant or any other person for any of the Security Deposit, or any
other payment made by Tenant hereunder, unless Landlord has actually delivered
said deposit or other such sum to such Mortgagee or purchaser. In the event of
any rightful and permitted assignment of Tenant's interest in this Lease, the
Security Deposit shall be deemed to be held by Landlord as a deposit made by the
assignee, and Landlord shall have no liability to the assignor with respect to
the return of the Security Deposit.

 

C.    Letter of Credit: The Letter of Credit shall be maintained throughout the
Term and any renewals thereof, if any, in accordance with all of the
requirements hereinafter set forth. Any Letter of Credit delivered to Landlord
by Tenant shall be an unconditional, irrevocable letter of credit in a form and
from a financial institution acceptable to Landlord in its sole discretion and
shall be capable of being drawn upon in the Washington, D.C. metropolitan area.
Landlord hereby approves the form of Letter of Credit attached hereto as Exhibit
E and made a part hereof. Said Letter of Credit shall be issued by a commercial
bank (1) that is chartered under the laws of the United States or any State
thereof and which is insured by the Federal Deposit Insurance Corporation or by
any U.S. branch of a foreign bank licensed to do business in the United States;
(2) whose long-term, unsecured and unsubordinated debt obligations are rated in
the highest category by at least two of Fitch Ratings Ltd. (“Fitch”), Moody’s
Investors Service, Inc. (Moody’s) and Standard & Poor’s Ratings Services (“S&P”)
or their respective successors (the “Rating Agencies) (which shall mean AAA from
Fitch, Aaa from Moody’s and AAA from Standard & Poor’s); and (3) which has a
short-term deposit rating in the highest category from at least two Rating
Agencies (which shall mean F1 from Fitch, P-1 from Moody’s and A-1 from S&P)
(collectively, the “Letter of Credit Issuer Requirements”). During the Term and
any renewals thereof, if any, if (a) the issuer of the Letter of Credit at any
time fails to satisfy any one or more of the Letter of Credit Issuer
Requirements, or (b) the issuer of the Letter of Credit is insolvent or is
placed into receivership or conservatorship, or is closed for any reason, by the
Federal Deposit Insurance Corporation, or any successor or similar governmental
entity, or (c) a trustee, receiver or liquidator is appointed for the issuer of
the Letter of Credit, or (d) the issuer of the Letter of Credit is no longer
deemed to be a “well capitalized” depository institution for purposes of the
prompt corrective action provisions of the Federal Deposit Insurance Act and the
regulations promulgated thereunder, then, in any of such events, Tenant shall,
within ten (10) days of the occurrence of any event described in any of the
immediately preceding clauses (a) through (d) (each such occurrence being
hereinafter referred to as an "L/C Issuer Requirements Failure"), deliver a
substitute Letter of Credit from an issuer that satisfies the Letter of Credit
Issuer Requirements and that also complies in all respects with the criteria set
forth in this Section 35.C. Tenant’s failure to obtain a substitute Letter of
Credit within the later of (A) three (3) business days following Landlord’s
written demand therefor or (B) ten (10) days following the occurrence of an L/C
Issuer Requirements Failure shall constitute a Default hereunder (as to which no
cure period shall be applicable) entitling Landlord (i) to draw upon the Letter
of Credit then in effect without the necessity of any other monetary or other
default hereunder by Tenant, in which event the proceeds thereof shall be held
by Landlord, and (ii) to exercise all of Landlord’s remedies set forth in this
Lease with respect to a Default by Tenant.

 

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D.    Said Letter of Credit shall provide that it shall expire on the sixtieth
(60th) day following the date of expiration of the Term of this Lease and shall
be transferable by Landlord, without any fee or other cost to Landlord other
than the transfer fee required by the issuing bank of the Letter of Credit,
which shall be paid by Landlord, to any purchaser or transferee of Landlord’s
interest in the Building or the Land. At Tenant's option, said Letter of Credit
shall have a term equal to the period expiring on the first anniversary of the
date of issuance thereof, in which event Tenant covenants that a renewal of said
Letter of Credit shall be delivered to Landlord by that date which is thirty
(30) days prior to the expiration date thereof, and thereafter a renewal of the
Letter of Credit shall be delivered to Landlord by Tenant by that date which is
thirty (30) days prior to each succeeding anniversary of the original expiration
date of the Letter of Credit. If Tenant fails to so renew and deliver said
Letter of Credit to Landlord by the thirtieth (30th) day preceding each said
expiration date, such failure shall constitute a Default hereunder (as to which
no cure period shall be applicable) and Landlord may draw upon the Letter of
Credit then in effect without the necessity of any other monetary or other
default hereunder by Tenant, in which event the proceeds thereof shall be held
by Landlord. Said Letter of Credit shall provide that Landlord shall be
permitted to draw on same on multiple occasions following the occurrence of a
Default by Tenant under this Lease; provided, however, that in the event that
said Letter of Credit would expire during the pendency of any litigation to
resolve whether such Default has occurred, Landlord may draw upon said Letter of
Credit prior to the expiration thereof. In the event that Landlord draws upon
the Letter of Credit after a Default by Tenant as aforesaid, Landlord shall use,
apply or retain all or any portion of the proceeds thereof for (i) the payment
of any Rent or any other sums as to which Tenant is in default, (ii) the payment
of any amount which Landlord may spend or become obligated to spend to repair
damage to the Premises or the Building for which repairs Tenant is liable
hereunder, or (iii) compensation to Landlord for any actual losses which
Landlord is entitled to recover hereunder by reason of Tenant's Default,
including any damage or deficiency arising in connection with the reletting of
the Premises and all associated reasonable legal fees. In the event that the
Letter of Credit is drawn upon by Landlord for failure of Tenant to renew said
Letter of Credit as aforesaid, the proceeds thereof shall be held by Landlord in
accordance with the provisions respecting the Security Deposit under this
Section 35.C. The use, application or retention of the proceeds of the Letter of
Credit, or any portion thereof, by Landlord shall not prevent Landlord from
exercising any other right or remedy provided by this Lease or by law, and shall
not limit any recovery to which Landlord may otherwise be entitled.

 

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36.HAZARDOUS MATERIALS.

 

A.    Definition. As used in this Lease, the term "Hazardous Material" means any
flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "infectious wastes", "hazardous materials" or "toxic substances" now or
subsequently regulated under any state, local or federal Laws, including, but
not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act and the Resource Conservation and Recovery Act (“Environmental
Rules”). Such substances, materials and wastes may include, without limitation,
oil, synthetic or natural gases, petroleum-based products, paints, solvents,
lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and
other chemical products, asbestos, PCBs and similar compounds, and including any
different products and materials which are subsequently found to have adverse
effects on the environment or the health and safety of persons or animals under
any Environmental Rules. As defined in the Environmental Rules, Tenant is and
shall be deemed to be the “operator” of Tenant’s “facility” and the “owner” of
all Hazardous Materials brought on the Premises by Tenant or any of its agents,
employees, licensees, guests or invitees, and the wastes, by-products, or
residues generated, resulting, or produced therefrom.

 

B.    General Prohibition. Tenant shall not cause or permit any Hazardous
Material to be generated, produced, brought upon, used, stored, treated,
discharged, released, spilled or disposed of on, in under or about the Premises,
the Building, or the Land (hereinafter referred to collectively as the
"Property") by Tenant or Tenant's Invitees. Tenant shall indemnify upon full
execution of this Lease, throughout the Term and following the expiration or
earlier termination of this Lease, defend and hold Landlord, Landlord's managing
agent and all Mortgagees harmless from and against any and all actions
(including, without limitation, remedial or enforcement actions of any kind,
administrative or judicial proceedings, and orders or judgments arising out of
or resulting therefrom), costs, claims, actual and consequential damages
(including without limitation, attorneys', consultants', and experts' fees,
court costs and amount paid in settlement of any claims or actions), fines,
forfeitures or other civil, administrative or criminal penalties, injunctive or
other relief (whether or not based upon personal injury, property damage, or
contamination of, or adverse effects upon, the environment, water tables or
natural resources), liabilities or losses arising from a breach of this
prohibition by Tenant or Tenant's Invitees.

 

C.    Permitted Use. Landlord acknowledges that it is not the intent of this
Section 36 to prohibit Tenant from using the Premises for the Permitted Use.
Tenant may operate its business according to prudent industry practices so long
as the use or presence of Hazardous Materials complies with, and is properly
monitored according to, all then applicable Environmental Rules. As a material
inducement to Landlord to allow Tenant to use Hazardous Materials in connection
with its business, Tenant agrees to deliver to Landlord prior to the Lease
Commencement Date a list identifying each type of Hazardous Materials to be
brought upon, kept, used, stored, handled, treated, generated on, or released or
disposed of from, the Premises and setting forth any and all governmental
approvals or permits required in connection with the presence, use, storage,
handling, treatment, generation, release or disposal of such Hazardous Materials
on or from the Premises (“Hazardous Materials List”). Tenant shall deliver to
Landlord an updated Hazardous Materials List at least once a year and shall also
deliver an updated list before any new Hazardous Material is brought onto,
treated, generated on, or released from, the Premises. Tenant is not required,
however, to provide Landlord with any information on the Hazardous Materials
List of a proprietary nature which, in and of themselves, do not contain a
reference to any Hazardous Materials or hazardous activities.

 

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D.    Tenant’s Representation and Warranty. Tenant hereby represents and
warrants to Landlord that (i) neither Tenant nor any of its legal predecessors
has been required by any prior landlord, lender or any governmental authority at
any time to take remedial action in connection with Hazardous Materials
contaminating a property which contamination was permitted by Tenant or such
predecessor or resulted from Tenant’s or such predecessor’s action or use of the
property in question, and (ii) Tenant is not subject to any enforcement order
issued by any governmental authority in connection with the use, storage,
treatment, generation, release or disposal of Hazardous Materials (including,
without limitation, any order related to the failure to make a required report
to any governmental authority). If Landlord determines that this representation
and warranty was false as of the date of this Lease, Tenant shall be deemed to
be in Default hereunder and Landlord shall have the right to terminate this
Lease in Landlord’s sole and absolute discretion and to pursue all applicable
remedies for such Default set forth in Section 19 hereof.

 

E.    Tests. Landlord shall have the right to conduct annual tests of the
Premises to determine whether any contamination of the Premises or the Building
has occurred as a result of Tenant’s use. Tenant shall be required to pay the
actual out-of-pocket cost of each such test of the Premises; provided, however,
that if Tenant conducts its own tests of the Premises using third party
contractors and test procedures reasonably acceptable to Landlord which tests
are certified to Landlord, Landlord shall accept such tests in lieu of the tests
to be paid for by Tenant. In connection with such testing, upon the request of
Landlord, Tenant shall deliver to Landlord or its consultant such
non-proprietary information concerning the use of Hazardous Materials in or
about the Premises by Tenant or any of its agents. Landlord shall provide
Tenant, upon Tenant’s written request, with a copy of all third party,
non-confidential reports and tests of the Premises concerning environmental
contamination made by or on behalf of Landlord during the Term without
representation or warranty and subject to a confidentiality agreement. Tenant
shall, at its sole cost and expense, promptly and satisfactorily remediate any
environmental conditions identified by such testing in accordance with all
Environmental Rules. Landlord’s receipt of or satisfaction with any
environmental assessment in no way waives any rights which Landlord may have
against Tenant.

 

F.    Underground Tanks. Tenant shall not install or otherwise operate any
underground storage tank on the Premises without Landlord’s prior written
consent, which may be granted, denied or withheld in Landlord’s sole and
absolute discretion. If underground or other storage tanks storing Hazardous
Materials located on the Premises or the Building are used by Tenant or are
hereafter placed on the Premises or the Building by Tenant, Tenant shall
install, use, monitor, operate, maintain and manage such storage tanks, maintain
records as required by the Environmental Rules, obtain and maintain prudent
insurance, implement reporting procedures, properly close any underground
storage tanks, and take or cause to be taken all other actions necessary or
required under the Environmental Rules in connection with the installation, use,
maintenance, management, operation, upgrading and closure of such storage tanks.

 

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G.    Waste Disposal. Tenant recognizes that the Building does not contain a lab
waste system. Tenant also acknowledges that any violation by Tenant of the
Washington Suburban Sanitary Commission (“WSSC”) rules and regulations governing
illegal discharges would cause substantial harm to the Building and the
Property, and that such violation would be unlawful and constitute a Default
under this Lease. Therefore, Tenant shall be solely responsible for any improper
discharge or disposal by Tenant or its agents, contractors, employees, guests or
invitees during Tenant’s occupancy of the Premises or any of the aforementioned
parties’ access of the Premises. Tenant shall, at its sole cost and expense,
test such waste prior to discharging or disposing the same and cause such waste
to be disposed or discharged in accordance with WSSC regulations and any other
applicable Laws.

 

H.    Notice. In the event that Hazardous Materials are discovered upon, in, or
under the Property, and any governmental agency or entity having jurisdiction
over the Property requires the removal of such Hazardous Materials, Tenant shall
be responsible for removing those Hazardous Materials arising out of or related
to the use or occupancy of the Property by Tenant or Tenant's Invitees but not
those of its predecessors. Notwithstanding the foregoing, Tenant shall not take
any remedial action in or about the Property or any portion thereof without
first notifying Landlord of Tenant's intention to do so and affording Landlord
the opportunity to protect Landlord's interest with respect thereto. Tenant
immediately shall notify Landlord in writing of: (i) any spill, release,
discharge or disposal of any Hazardous Material in, on or under the Property or
any portion thereof; (ii) any enforcement, cleanup, removal or other
governmental or regulatory action instituted, contemplated, or threatened (if
Tenant has notice thereof) pursuant to any Environmental Rules respecting
Hazardous Materials; (iii) any claim made or threatened by any person against
Tenant or the Property or any portion thereof relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from or claimed to result
from any Hazardous Materials; and (iv) any reports made to any governmental
agency or entity arising out of or in connection with any Hazardous Materials
in, on under or about or removed from the Property or any portion thereof,
including any complaints, notices, warnings, reports or asserted violations in
connection therewith. Tenant also shall supply to Landlord as promptly as
possible, and in any event within five (5) business days after Tenant first
receives or sends the same, copies of all claims, reports, complaints, notices,
warnings or asserted violations relating in any way to the Premises, the
Property or Tenant's use or occupancy thereof.

 

I.    Survival. The respective rights and obligations of Landlord and Tenant
under this Section 36 shall survive the expiration or earlier termination of
this Lease. During any period of time after the expiration or earlier
termination of this Lease required by Tenant or Landlord to complete the removal
from the Premises or the Building of any Hazardous Materials (including, without
limitation, the release and termination of any licenses or permits restricting
the use of the Premises and the completion of approved Surrender Plan, as
hereinafter defined in Section 40), Tenant shall continue to pay the full Base
Rent and Additional Rent in accordance with this Lease for any portion of the
Premises not relet by Landlord in Landlord’s sole and absolute discretion, which
Rent shall be prorated on a daily basis.

 

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J.    Landlord’s Representations and Warranties. To the best Landlord’s
knowledge and except as disclosed in any environmental reports or other
information furnished to Tenant by Landlord or otherwise obtained by Tenant
prior to the date hereof, there are no Hazardous Materials located in, on or
under the Building or the Land in violation of applicable Laws.

 

37.[INTENTIONALLY OMITTED.]

 

 

38.NO RECORDATION.

 

Neither Tenant nor Landlord shall attempt to record or record this Lease. Tenant
shall not record or attempt to record any memorandum hereof in any public
records without the prior written approval of Landlord, which may be denied in
Landlord's sole and absolute discretion. In the event that Landlord grants its
approval to record this Lease or a memorandum hereof, Tenant shall pay all
recordation fees, taxes and charges in connection with such recordation.

 

39.SIGNS.

 

Landlord will, at Landlord’s cost, list Tenant's name in the Building directory
and provide Building standard signage on one suite entry door of the Premises.
No other sign, advertisement or notice shall be inscribed, painted, affixed or
otherwise displayed on any part of the exterior or interior of the Building
(including windows and doors) without the prior written approval of Landlord,
which may be granted or withheld in Landlord's sole and absolute discretion. If
any such item that has not been approved by Landlord is so displayed, then
Landlord shall have the right to remove such item at Tenant's expense or to
require Tenant to do the same. Landlord reserves the right to install and
display signs, advertisements and notices on any part of the exterior or
interior of the Building.

 

Notwithstanding the foregoing, provided that at all times (i) Tenant is not in
default under this Lease, and (ii) Tenant is leasing and occupying at least one
(1) entire Wing, Tenant shall have the non-exclusive right to install and
maintain two (2) sign panels on the top level of the exterior façade of the
Building (“Tenant’s Exterior Signage”); provided, however, that such Tenant’s
Exterior Signage shall be in locations that have been approved by Landlord in
Landlord’s reasonable discretion, and in the event that Tenant exercises its
right to terminate this Lease with respect only to a portion of the Premises
pursuant to the terms of Section 42 below, then Tenant’s right to maintain a
second sign shall be subject to Landlord’s obtaining approval from the
applicable governmental authorities to install a third exterior sign on the
portion of the Premises surrendered by Tenant, such that at all times that
Tenant is not leasing the entirety of the Building, Landlord shall have the
legal right to allow at least one occupant of the Building in addition to Tenant
to install signage on the exterior of the Building. Tenant’s Exterior Signage
shall (a) be of a type, style, size, color, and method of fabrication approved
by Landlord in its sole and absolute discretion, and (b) comply with all
applicable Laws regarding type, size, style, color and location, including, but
not limited to, laws promulgated by Montgomery County, Maryland. Any such
Tenant’s Exterior Signage shall be installed, repaired and maintained in
compliance with all applicable Laws and at Tenant's sole cost and expense. If
Tenant fails to maintain Tenant’s Exterior Signage, Landlord shall have the
right, but not the obligation, to do so, at Tenant’s sole cost and expense.
Tenant shall remove Tenant’s Exterior Signage, at Tenant’s sole cost, prior to
the earlier of (A) the expiration of the Term of this Lease, or (B) the
thirtieth (30th) day following the termination of Tenant’s right to possession
of the Premises or Tenant’s right to maintain Tenant’s Exterior Signage under
this Lease, and Tenant shall repair any damage to the Building caused by the
installation or removal of Tenant’s Exterior Signage, all at Tenant's sole cost
and expense.

 

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40.SURRENDER.

 

Upon the expiration of the Term or earlier termination of Tenant’s occupancy,
Tenant shall surrender the Premises to Landlord in the same condition as the
Premises were in on the Lease Commencement Date, subject to any Alterations or
Installations permitted or required by Landlord to remain in the Premises, free
of Hazardous Materials brought upon, kept, used, stored, handled, treated,
generated in, or released or disposed of from, the Premises and released of all
Hazardous Materials Clearances, broom clean, ordinary wear and tear and casualty
loss and condemnation covered in Sections 16 and 18 hereof excepted. At least
ninety (90) days prior to the expiration of the Term or anticipated earlier
termination or vacancy of the Premises by Tenant, Tenant shall deliver to
Landlord a narrative description of the actions proposed (or required by any
governmental authority) that Tenant plans to perform to surrender the Premises
(including any Installations permitted by Landlord to remain in the Premises) at
the expiration or earlier termination of this Lease or vacancy of the Premises,
free from any residual impact from Hazardous Materials (the “Surrender Plan”).
Such Surrender Plan shall be accompanied by a current listing of (i) all
Hazardous Materials licenses and permits held by or on behalf of Tenant or its
agents with respect to the Premises and (ii) all Hazardous Materials used,
stored, handled, treated, generated, released or disposed of from the Premises,
and shall be subject to the review and approval of Landlord or Landlord’s
environmental consultant. In connection with the review and approval of the
Surrender Plan, upon the request of Landlord, Tenant shall deliver to Landlord
or its consultant such additional non-proprietary information concerning
Tenant’s use of Hazardous Materials as Landlord shall request. On or before the
date of such surrender, Tenant shall deliver to Landlord evidence that the
approved Surrender Plan shall have been satisfactorily completed and Landlord
shall have the right, subject to reimbursement at Tenant’s expense as set forth
below, to cause Landlord’s environmental consultant to inspect the Premises and
perform such additional procedures as may be deemed reasonably necessary to
confirm that the Premises are, as of the effective date of such surrender or
early termination of this Lease, free from any residual impact from Tenant’s use
of Hazardous Materials. Tenant shall reimburse Landlord, as Additional Rent, for
the actual out-of-pocket expense incurred by Landlord for Landlord’s
environmental consultant to review and approve the Surrender Plan and to visit
the Premises and verify satisfactory completion of all actions described
therein. Landlord shall have the unrestricted right to deliver such Surrender
Plan and any report by Landlord’s environmental consultant with respect to the
surrender of the Premises to third parties.

 

If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord,
or if Tenant shall fail to complete the approved Surrender Plan, or if such
Surrender Plan, whether or not approved by Landlord, shall fail to adequately
address any residual effect of Tenant’s use of Hazardous Materials in the
Premises or the Property, Landlord shall have the right to take such actions as
Landlord may deem reasonable or appropriate to assure that the Premises and the
Building are surrendered free from any residual impact from Hazardous Materials,
the cost of which actions shall be reimbursed by Tenant as Additional Rent,
without regard to the limitation set forth in the first paragraph of this
Section 40.

 

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Tenant shall immediately return to Landlord all keys and/or access cards to the
parking area, the Building, restrooms and all or any portion of the Premises
furnished to or otherwise procured by Tenant. If any such access card or key is
lost, Tenant shall pay to Landlord, at Landlord’s election, within fifteen (15)
days after Landlord’s demand therefor, either the cost of replacing such lost
access card or key or the cost of reprogramming the access security system in
which such access card was used or changing the lock or locks opened by such
lost key. All obligations of Tenant hereunder not fully performed as of the
expiration of the Term or earlier termination of this Lease shall survive the
expiration of the Term or earlier termination of this Lease, including, without
limitation, Tenant’s indemnity obligations, payment obligations with respect to
Rent and obligations concerning the condition and repair of the Premises.

 

41.OPTION TO EXTEND.

 

Provided that Novavax is not then in default and has not been in default more
than one (1) time during the Term, in each case both at the time of exercise of
a Renewal Option (as hereinafter defined), and at the commencement of a Renewal
Period (as hereinafter defined), and is then in direct occupancy of at least the
entire portion of the Premises which Novavax elects to have renewed at the time
of exercise of a Renewal Option, and at the time of the commencement of a
Renewal Period, Novavax shall have three (3) options (the “Renewal Options”) to
extend the Term of the Lease for a period of five (5) years each (each, a
“Renewal Period”) after the expiration of the initial Term or the applicable
Renewal Period, either with respect to the entire Premises, or as to any one
Wing of the Premises, as hereinafter provided. In the event that (a) Tenant is
then in occupancy of the entire Premises, Tenant shall have the right to
exercise a Renewal Option with respect to (i) the entire Premises, or (ii) one
(1) entire Wing only, at Tenant’s option, or (b) Tenant is then in occupancy of
one (1) entire Wing only, Tenant shall only have the right to exercise a Renewal
Option with respect to such Wing. A Renewal Option shall be exercisable only by
written notice given by Novavax to Landlord not later than fifteen (15) months,
nor earlier than eighteen (18) months, prior to the expiration of the initial
Term or the applicable Renewal Period, which notice shall, if applicable, state
whether Tenant is exercising its right to renew the Term of this Lease with
respect to the entire Premises or only one (1) entire Wing thereof. In the event
that Novavax does not timely exercise a Renewal Option, said Renewal Option and
all remaining Renewal Options, if applicable, shall be null and void and of no
further force or effect, time being of the essence in the exercise of a Renewal
Option and it being acknowledged and agreed by Novavax that Landlord shall be
entitled to rely on any failure by Novavax to give written notice of its
exercise of a Renewal Option by the date set forth herein for such exercise
thereof.

 

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All terms and conditions of this Lease shall be applicable during the Renewal
Period except that the amount of Base Rent and annual escalations charged for
the Renewal Period shall be the then “Prevailing Market Rent”, which shall be
the rent for renewal tenants leasing comparable space in comparable buildings in
the Gaithersburg submarket of Maryland, taking into account such market
concessions, if any, as are then being offered by landlords of comparable
buildings with respect to comparable space leased to renewal tenants; provided,
however, that in no event shall the Prevailing Market Rent determined as
aforesaid be deemed to be less than the Base Rent payable under this Lease
during the Lease Year immediately preceding the first Lease Year of the Renewal
Period. If within thirty (30) days following delivery of Novavax’s notice,
Landlord and Novavax have not mutually agreed on the Prevailing Market Rent for
the Renewal Period, then within ten (10) days after the expiration of such
thirty-day period, each party shall give written notice to the other setting
forth the name and address of a Broker (as hereinafter defined) selected by such
party who has agreed to act in such capacity, to determine the Prevailing Market
Rent. If either party shall fail to select a Broker as aforesaid, the Prevailing
Market Rent shall be determined by the Broker selected by the other party. Each
Broker shall thereupon independently make his or her determination of the
Prevailing Market Rent within twenty (20) days after the appointment of the
second Broker. If the two Brokers’ determinations are not the same, but the
higher of such two values is not more than one hundred five percent (105%) of
the lower of them, then the Prevailing Market Rent shall be deemed to be the
average of the two values. If the higher of such two values is more than one
hundred five percent (105%) of the lower of them, then the two Brokers shall
jointly appoint a third Broker within ten (10) days after the second of the two
determinations described above has been rendered. The third Broker shall
independently make his or her determination of the Prevailing Market Rent within
twenty (20) days after his or her appointment. The highest and the lowest
determinations of value among the three Brokers shall be disregarded and the
remaining determination shall be deemed to be the Prevailing Market Rent.

 

Within thirty (30) days (subject to written extension by Landlord) after the
later to occur of (i) the date on which Landlord and Novavax agree upon the
Prevailing Market Rent or (ii) the date on which the Prevailing Market Rent is
otherwise determined by the 3-broker method as aforesaid, Landlord and Novavax
shall execute an amendment to this Lease setting forth the terms as to the
Renewal Period. If Novavax shall fail to execute said amendment within such
thirty (30) day period (as the same may be extended as aforesaid), then Landlord
shall have the right, at Landlord’s option exercisable by written notice to
Novavax: (a) to cancel the exercise by Novavax of Novavax’s option and to offer
to lease and to lease the Premises to others upon such terms and conditions as
shall be acceptable to Landlord, or (b) to not cancel the exercise by Novavax of
Novavax's option, in which case Novavax shall remain bound by the exercise
thereof and Novavax shall be deemed to be in default of this Lease.

 

For the purposes of this Section 41, “Broker” shall mean a real estate broker or
salesperson licensed in the Montgomery County, Maryland, who has been regularly
engaged in such capacity in the business of commercial office and research and
development laboratory leasing in Montgomery County, Maryland for at least ten
(10) years immediately preceding such person’s appointment hereunder. Each party
shall pay for the cost of its Broker and one-half of the cost of the third
Broker.

 

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42.TENANT’S TERMINATION OPTION.

 

Notwithstanding anything in this Lease to the contrary and subject to the terms
and conditions of this Section 42 and this Lease (including, but not limited to,
Section 43.H. below), Tenant shall have the right, exercisable at Tenant’s sole
option, to terminate this Lease (the “Termination Option”) effective as of the
last day of the ninth (9th) Lease Year (the “Termination Date”), said right of
Tenant to be exercisable by giving written notice thereof (the “Termination
Notice”) to Landlord, which Termination Notice shall be given, if at all, not
later than twelve (12) months prior to the Termination Date. Tenant shall have
the right to terminate this Lease with respect to the entire Premises or only
one (1) Wing; provided, however, that if Tenant has entered into an amendment to
this Lease for the Expansion Space (as hereinafter defined) pursuant to Tenant’s
rights set forth in Section 43 hereof prior to the date of Tenant’s Termination
Notice, then Tenant shall only have the right to terminate this Lease with
respect to the South Wing. Tenant’s Termination Notice shall state whether
Tenant desires to terminate the Lease with respect to the entire Premises (if
permitted) or only one (1) Wing, if applicable. In the event that Tenant
exercises its termination option hereunder, this Lease shall continue in full
force and effect until the Termination Date, whereupon Tenant shall surrender
possession of the Premises, or the applicable portion thereof, in accordance
with the provisions of this Lease (except that notwithstanding anything to the
contrary contained in this Lease, in the event that Tenant terminates this Lease
with respect only to one (1) Wing, then the cost of any construction required to
permit the operation of the Building separate from the balance of the Premises,
including the cost to construct a common corridor, if applicable, shall be paid
by Tenant to Landlord as Additional Rent hereunder), this Lease shall terminate
with respect to the Premises, or the applicable portion thereof, as if the
Termination Date were the Lease Expiration Date set forth herein, and all
Additional Rent shall be prorated as of the Termination Date. Tenant’s right
hereunder to terminate this Lease with respect to the Premises, or the
applicable portion thereof, shall be exercisable only if (1) Tenant is not then
in default under this Lease, and (2) Tenant pays to Landlord, contemporaneously
with the giving of its Termination Notice, an amount equal to the then
unamortized sum of (a) the Tenant Allowance (as defined in the Work Agreement),
(b) brokerage commissions incurred by Landlord with respect to this Lease and
any amendments hereto, (c) legal fees incurred by Landlord with respect to the
documentation and negotiation of this Lease and any amendments hereto, (d) Three
Million Three Hundred Eight Thousand Six Hundred Forty-Seven and 50/100 Dollars
($3,308,647.50), and (e) compounded interest imputed on the amounts set forth in
clauses (a) through (d) of this Section 42 at the rate of eight percent (8%) per
annum,(the items set forth in clauses (a) through (e) of this Section 42 being
hereinafter collectively referred to as the “Termination Expenses”). The
Termination Expenses payable by Tenant to Landlord pursuant to the immediately
preceding sentence shall be in addition to the Rent coming due between the date
of the Termination Notice and the Termination Date. Tenant shall pay the
Termination Expenses upon Tenant’s delivery of the Termination Notice.

 

43.EXPANSION SPACE.

 

A. Expansion Space: At any time during the Term that Tenant is not in default
hereunder, Tenant shall have the one-time right, at its sole option, to give
Landlord binding notice (the “Expansion Space Notice”) that Tenant desires to
expand the Premises by having additional square footage constructed at the North
Wing of the Building (the “Expansion Space”). The Expansion Space Notice shall
set forth the approximate number of square feet of rentable area by which Tenant
desires to expand into the Expansion Space, and whether Tenant desires for
Landlord to fund the costs of the construction of the expansion or whether
Tenant desires to fund the costs of the construction of the expansion itself, it
being agreed that regardless of which party funds the costs of the expansion,
Landlord shall perform the actual construction of the Expansion Space.

 

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B.    Governmental Approvals: Following Landlord’s receipt of the Expansion
Space Notice, Landlord and Tenant shall cooperate, at no cost or liability to
Landlord, in order to obtain all applicable governmental approvals which are
required for the expansion of the North Wing of the Building (the “Required
Approvals”), which expansion shall be subject to plans and specifications to be
prepared by Tenant, and which plans and specifications shall be acceptable to
Landlord and Tenant, in the good faith exercise of their respective sole
discretion (the “Expansion Space Plans and Specs”). Tenant shall not submit any
version of the Expansion Space Plans and Specs (whether preliminary or
otherwise) to any governmental authority without Landlord’s express prior
written approval, which may be given or withheld in Landlord’s sole and absolute
discretion. In the event that the Required Approvals have not been obtained
within nine (9) months following Landlord’s receipt of the Expansion Space
Notice, then Tenant shall promptly reimburse Landlord for all costs incurred by
Landlord with respect to design, legal costs and permitting of the expansion,
and thereafter neither Landlord nor Tenant shall have any further obligations
hereunder with respect to the development or the construction of the Expansion
Space.,

 

C.    Tenant’s Obligation to Lease Expansion Space: On the date that the
Required Approvals are obtained (it being agreed that this Lease is not
contingent upon Landlord obtaining the Required Approvals or on Tenant’s ability
to lease the Expansion Space or on any other factor concerning the Expansion
Space), Tenant shall be obligated to lease from Landlord the Expansion Space, in
accordance with the terms of this Section 43. In such event, the Expansion Space
shall become part of the Premises in accordance with the terms of this Section
43, and Landlord and Tenant shall execute an amendment to this Lease setting
forth the terms of the incorporation of the Expansion Space into the Premises,
in accordance with this Section 43.

 

D.    Landlord’s Construction Financing: If the Expansion Space Notice states
therein that Tenant desires for Landlord to fund the costs of the Expansion
Space, then promptly following the date that the Required Approvals have been
obtained, Landlord shall use commercially reasonable efforts to obtain
construction financing for the expansion on such terms and conditions as are
acceptable to Landlord in its reasonable discretion (the “Financing”), it being
agreed that Landlord shall have no liability whatsoever in the event that
Landlord fails to obtain such Financing for any reason. In the event that
Landlord has not obtained such Financing within ninety (90) days following
receipt of the Required Approvals, then Landlord shall either (i) provide notice
to Tenant that Landlord has elected not to fund the costs of the expansion, and
Landlord shall thereafter have no obligation to fund said expansion, and
Landlord’s obligation to construct the Expansion Space shall be contingent upon
Tenant’s paying for all costs associated therewith, or (ii) provide notice to
Tenant that Landlord has entered into a term sheet with a lender for the
Financing of the expansion, in which event Landlord shall be permitted an
additional sixty (60) days to obtain Financing for the expansion. In the event
that Landlord has not obtained Financing on or before the expiration of such
sixty (60) day period, then Landlord shall be deemed to have elected not to fund
the costs of the expansion, and Landlord shall thereafter have no obligation to
fund said expansion, and Landlord’s obligation to construct the Expansion Space
shall be contingent upon Tenant’s paying for all costs associated therewith.

 

E.    Tenant’s Option to Fund Expansion: In the event that Tenant’s Expansion
Space Notice provides that Tenant has elected to fund the costs of the Expansion
Space, or in the event that Landlord does not obtain the Financing within the
applicable time period(s) set forth above and Tenant provides notice to Landlord
that Tenant has elected to fund the construction of the Expansion Space, then in
either case, Tenant shall have the right to pay for all costs associated with
the expansion from Tenant’s own source of funds (i.e., with no contribution from
Landlord). In the event that Tenant elects to obtain third party financing in
order to pay for the costs of the expansion, then Tenant hereby agrees and
acknowledges that (i) any such financing shall in no way encumber the Building,
the Land, or Tenant’s leasehold interest in this Lease, (ii) Landlord shall be
under no obligation to modify (in more than a de minimis manner) or waive any of
its rights under this Lease as a result of such financing, and (iii) no such
financing shall increase any of Landlord’s obligations hereunder in more than a
de minimis manner.

 

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F.    Economic Terms of Lease of Expansion Space if Funded by Landlord: From and
after the date that Landlord delivers the Expansion Space to Tenant
substantially in the condition required by the Expansion Space Plans and Specs
(the “Expansion Space Rent Commencement Date”), such Expansion Space shall be
subject to the terms and conditions of this Lease then prevailing for the
balance of the Term (as may be extended), and, except with respect to the amount
of Base Rent which is due and payable for the Expansion Space, all economic and
other terms of this Lease that vary with the size of the Premises shall be
revised to include the Expansion Space, including, but not limited to, Tenant’s
Share of Operating Expenses and Tenant’s Share of Real Estate Tax Expenses. The
Base Rent per annum solely with respect to the Expansion Space (the “Expansion
Space Base Rent”) for the period commencing on the Expansion Space Rent
Commencement Date and continuing for the remainder of the twelve (12) month
period that commenced on the Expansion Space Rent Commencement Date shall be an
amount equal to the product of (i) the sum of (a) the hard costs of constructing
the Expansion Space, (b) the Expansion Space Tenant Allowance (as hereinafter
defined), (c) all soft costs incurred by Landlord in connection with the
preparation (to the extent applicable), review and approval of the Expansion
Space Plans and Specs, obtaining the Required Approvals, and constructing the
Expansion Space, and (d) actual costs incurred by Landlord in connection with
the Financing of the construction of the Expansion Space, multiplied by (ii) the
greater of (x) an amount equal to the sum of six and one quarter percent (6.25%)
plus the ten (10) year Treasury Rate as of the Expansion Space Rent Commencement
Date, or (y) eight and one half percent (8.5%), per annum. On the first
anniversary of the Expansion Space Rent Commencement Date and on each
anniversary of the Expansion Space Rent Commencement Date thereafter during the
Expansion Space Term, the Expansion Space Base Rent shall be increased by an
amount equal to two and one-half percent (2.5%) of the amount of Expansion Space
Base Rent in effect for the immediately preceding twelve (12) month period.

 

G.    Economic Terms of Lease of Expansion Space if Funded by Tenant:
Notwithstanding anything contained herein to the contrary, in the event that
Landlord constructs the Expansion Space at Tenant’s sole cost and expense, then
(i) such Expansion Space shall be subject to the terms and conditions of this
Lease then prevailing for the balance of the Term (as may be extended), and all
economic and other terms of this Lease that vary with the size of the Premises
shall be revised to include the Expansion Space, including, but not limited to,
Tenant’s Share of Operating Expenses and Tenant’s Share of Real Estate Tax
Expenses, (ii) Tenant shall not be required to pay Expansion Space Base Rent,
and (iii) Tenant shall reimburse Landlord as Additional Rent, within thirty (30)
days following Landlord’s written demand therefor, for all of Landlord’s costs
incurred in connection with the review, approval, and, if applicable,
preparation of the Expansion Space Plans and Specs, obtaining the Required
Approvals, and a coordination fee in the amount of one percent (1%) of the hard
costs of construction and interior improvements to the Expansion Space.

 

 53 

 

 

H.    Expansion Space Lease Term; Stub Period: The term of Lease with respect to
the Expansion Space (the “Expansion Space Term”) shall be the greater of (x) a
period of time such that it shall be coterminous with the Term of this Lease
with respect to the Premises originally demised hereunder (sometimes referred to
in this Section 43 as the “Original Premises”), or (y) ten (10) years from the
Expansion Space Rent Commencement Date. In the event that, upon the Expansion
Space Rent Commencement Date, the remaining portion of the Term of this Lease
with respect to the Original Premises is less than ten (10) years, then (i) the
remaining Term with respect to the Original Premises shall be automatically
extended for a period (the “Stub Period”) so that the Lease Expiration Date
shall thereafter be the date that is ten (10) years after the Expansion Space
Rent Commencement Date, and (ii) notwithstanding anything to the contrary
contained in Section 42 hereof, Tenant’s Termination Option and Section 42 of
the Lease shall be automatically null and void and of no further force or effect
as of the date that Tenant provides its Expansion Space Notice. The Base Rent
for the Original Premises during the Stub Period shall continue to escalate
annually by the Base Rent Annual Escalation Percentage, and Landlord shall have
no obligation to provide any market concessions with respect to the extension of
the Term for the Stub Period. All other terms and conditions of this Lease shall
remain in full force and effect during the Stub Period, including, but not
limited to, Tenant’s obligation to pay Base Rent for the Original Premises and
all Additional Rent coming due during the Stub Period. Notwithstanding anything
to the contrary contained in Section 42 above, in the event that the Stub Period
is not necessary (i.e. in the event that the Expansion Space Term will be
greater than ten (10) years and will be coterminous with the initial Term as to
the Original Premises), then the Termination Date, if applicable, shall be
effective as of the last day of the tenth (10th) year following the Expansion
Space Rent Commencement Date, rather than the last day of the 9th Lease Year.

 

I.    Execution of Lease Amendment: Landlord shall provide Tenant with a draft
amendment to this Lease incorporating the terms with respect to the addition of
the Expansion Space as determined by this Section 43 and not otherwise modifying
any of the terms of this Lease, and within thirty (30) days after delivery of
such draft amendment, Landlord and Tenant shall execute such amendment to this
Lease setting forth the terms set forth in this Section 43 as to the Expansion
Space. If Tenant shall fail to execute said amendment to this Lease for the
Expansion Space within such thirty (30) day period (as the same may be extended
by Landlord ), then Tenant and Landlord shall each remain bound by Tenant’s
lease of the Expansion Space.

 

 54 

 

 

J.    Condition of Expansion Space; Expansion Space Tenant Allowance. In the
event that Landlord performs the construction of the Expansion Space at Tenant’s
cost, Tenant shall accept the Expansion Space in its then as-is condition on the
date of delivery of the Expansion Space by Landlord, provided that the then
as-is condition of the Expansion Space is in accordance with the Expansion Space
Plans and Specs in all material respects (subject to any changes that were
approved by Tenant during construction of the Expansion Space), and Landlord
shall have no obligation to make any other improvements or alterations to any
portion of the Expansion Space. Notwithstanding the foregoing, in the event that
Landlord performs the construction of the Expansion Space at Landlord’s cost,
Landlord shall make available for Tenant’s interior improvements to the
Expansion Space, an allowance (the "Expansion Space Tenant Allowance") in an
amount equal to the product of (i) Sixty-Five Dollars ($65.00) multiplied by
(ii) the number of rentable square feet comprising the Expansion Space. The
Expansion Space Tenant Allowance shall be used by Tenant in connection with all
costs of improving the Expansion Space, including, but not limited to, the cost
of all permits and governmental inspections, the cost of professional services,
consulting services, furniture, fixtures, equipment, wiring (IT and/or
telecommunications), all architectural and engineering fees, the preparation and
delivery to Landlord of as-built plans, a coordination fee paid to Landlord in
the amount of one percent (1%) of the hard cost of the improvement to the
Expansion Space, and any other work or services required for Tenant to improve
the Expansion Space, all of which costs shall be payable out of the Expansion
Space Tenant Allowance to the extent that the Expansion Space Tenant Allowance
is sufficient for that purpose, and any excess amount of which costs shall be
paid directly by Tenant. Except as set forth in this Section 43.J, the terms and
conditions governing the payment and use of the Expansion Space Tenant Allowance
shall be the same as those governing the payment and use of the Tenant Allowance
with respect to the Original Premises set forth in the Work Agreement, attached
hereto as Exhibit C, which terms and conditions shall be incorporated into the
amendment to be executed by the parties as provided in Section 43.I. above;
provided, however, in no event shall Landlord be obligated to finance or
otherwise expend any sums in excess of the Expansion Space Tenant Allowance.

 

[Signatures appear on the following page.]

 

 55 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease under seal as
of the day and year first above written.

 

WITNESS:   LANDLORD:               IP9 1201 CLOPPER ROAD, LLC, a Maryland
limited liability company           By: /s/ KEITH KNIGHT   By: /s/ BRIAN J.
FITZGERALD       Name: BRIAN J. FITZGERALD       Its: Senior Vice President    
      ATTEST:   TENANT:       [Corporate Seal]   NOVAVAX, INC., a Delaware
corporation           By: /s/ DANIELLE N. BECKMANN   By: /s/ STANLEY C. ERCK
Name: DANIELLE N. BECKMANN   Name: STANLEY C. ERCK Its: EXECUTIVE ASSISTANT  
Its: CHIEF EXECUTIVE OFFICER

 

 

 56 

 

 

EXHIBIT A

 

BUILDING AND PREMISES PLAN

 

 A-1 

 

 

EXHIBIT B

 

DECLARATION BY LANDLORD AND TENANT
AS TO DATE OF DELIVERY AND ACCEPTANCE OF
POSSESSION, LEASE COMMENCEMENT DATE, ETC.

 

THIS DECLARATION made this            day of                            , 2016
is hereby attached to and made a part of the Lease dated the           day of
                        , 2016 (the “Lease”), entered into by and between IP9
1201 CLOPPER ROAD, LLC, a Maryland limited liability company, as Landlord, and
NOVAVAX, INC., a Delaware corporation, as Tenant. All terms used in this
Declaration have the same meaning as they have in the Lease.

 

(i) Landlord and Tenant do hereby declare that Tenant accepted possession of the
Premises on the        day of                     , 20  ;

 

(ii) As of the date hereof, the Lease is in full force and effect, and Landlord
has fulfilled all of its obligations under the Lease required to be fulfilled by
Landlord on or prior to said date;

 

(iii) The Lease Commencement Date is hereby established to be
                                        , 20  ;

 

(iv) The Rent Commencement Date is hereby established to be _____________; and

 

(v) The Lease Expiration Date is hereby established to be
                                        , unless the Lease is sooner terminated
pursuant to any provision thereof.

 

WITNESS:   LANDLORD:           IP9 1201 CLOPPER ROAD, LLC, a Maryland limited
liability company           By:     By:         Name:         Its:            
ATTEST:   TENANT:       [Corporate Seal]           NOVAVAX, INC., a Delaware
corporation           By:     By:   Name:     Name:   Its:     Its:  

 

[NOTE: NOT TO BE EXECUTED AT TIME OF EXECUTION OF LEASE]

 

 B-1 

 

 

EXHIBIT C

 

WORK AGREEMENT

 

THIS WORK AGREEMENT is hereby attached to and made part of the ___________ Lease
dated                     , 2016 entered into by and between IP9 1201 CLOPPER
ROAD, LLC, a Maryland limited liability company, as Landlord, and NOVAVAX, INC.,
a Delaware corporation, as Tenant (the "Lease"). All terms used in this Work
Agreement have the same meaning as they have in the Lease.

 

 

1.ARCHITECTURAL DESIGN SERVICES.

 

Tenant shall provide a space plan and completed, finished and detailed
architectural drawings and specifications for all work to be provided by Tenant
under Paragraph 4 hereof (the "Architectural Drawings and Specifications"),
which Architectural Drawings and Specifications shall be completed at Tenant's
sole cost and expense, which shall be payable out of the Tenant Allowance (as
hereinafter defined) to the extent that funds are available. Any All such
Architectural Plans and Specifications are expressly subject to Landlord's
review and written approval.

 

 

2.ENGINEERING DESIGN SERVICES.

 

Tenant, at Tenant's sole cost and expense, which shall be payable out of the
Tenant Allowance (as hereinafter defined) to the extent that funds are available
therefrom for that purpose, shall provide the design services of a licensed
professional engineer, to prepare complete mechanical and electrical plans and
specifications, as necessary for Tenant's Work (as hereinafter defined) to be
performed pursuant to Paragraph 3 hereof (the "Engineering Plans and
Specifications"). Any and all such Engineering Plans and Specifications are
expressly subject to Landlord's review and written approval.

 

 

3.TENANT'S WORK.

 

The Architectural Drawings and Specifications and the Engineering Plans and
Specifications, as approved by Landlord, shall thereupon collectively constitute
the "Tenant's Plans". Tenant shall improve the Premises in accordance with the
Tenant’s Plans. The work set forth in the Tenant’s Plans is hereinafter referred
to as “Tenant’s Work”. From and after the date of Landlord’s approval of the
Tenant’s Plans, any changes to the Tenant’s Plans, except Permitted Changes (as
defined in Paragraph 6 hereof), shall not be binding unless approved in writing
by both Landlord and Tenant, such approval not to be unreasonably withheld,
conditioned or delayed with respect to Tenant’s Work that does not affect
Building systems or the Building structure. Landlord’s approval of the Tenant’s
Plans shall constitute approval of Tenant’s design concept only and shall in no
event be deemed a representation or warranty by Landlord as to whether the
Tenant’s Plans comply with any and all legal requirements applicable to the
Tenant’s Plans and Tenant’s Work.

 

 C-1 

 

 

In the performance of Tenant’s Work, Tenant shall comply with all applicable
laws, codes and regulations. Tenant shall obtain all permits, certificates and
other governmental approvals from all governmental entities having jurisdiction
thereover which are necessary for the prosecution and completion of Tenant’s
Work. Tenant’s Work shall include, but not be limited to, the cost of all
permits and governmental inspections, all architectural and engineering fees,
the preparation and delivery to Landlord of a complete set of “as-built” plans
showing Tenant’s Work, in hard copy and an electronic version thereof which is
acceptable to Landlord (the "As-Built Plans") (which As-Built Plans shall be
delivered to Landlord not later than the tenth (10th) day following the
substantial completion of Tenant’s Work).

 

Prior to commencing Tenant’s Work, Tenant shall provide to Landlord the name and
address of each contractor and subcontractor which Tenant intends to employ to
perform Tenant’s Work, the use of which subcontractors and contractors shall be
subject to Landlord’s prior written approval, which shall not be unreasonably
withheld, conditioned or delayed if (1) the contractor or subcontractor is
properly licensed, and (2) neither Landlord nor any affiliate of Landlord has
had no prior experience with such contractor or subcontractor which was
unsatisfactory to Landlord. Prior to the commencement of any of Tenant’s Work,
Tenant shall deliver to Landlord, with respect to each contractor and
subcontractor which Tenant intends to employ to perform any of Tenant’s Work, a
certificate of insurance from each such contractor or subcontractor specifying
Landlord as a named insured and evidencing that each such contractor or
subcontractor has obtained the applicable insurance coverages described in
Section 17.B. of the Lease.

 

Said contractors and subcontractors shall also comply with other reasonable
industry requirements of Landlord. Tenant shall pay to Landlord a coordination
fee in an amount equal to one percent (1%) of the cost of Tenant’s Work (the
"Coordination Fee"), which Coordination Fee shall be deducted from the Tenant
Allowance to the extent that funds are available therefrom for such purpose or
otherwise paid directly by Tenant to Landlord upon the substantial completion of
Tenant’s Work.

 

4.TENANT ALLOWANCE.

 

Landlord shall make available for the performance of Tenant's Work, and for the
other purposes hereinafter specified, an allowance (the "Tenant Allowance") in
an amount equal to the product of (i) Sixty-Five Dollars ($65.00) multiplied by
(ii) the number of rentable square feet comprising the Premises. Tenant shall
perform Tenant’s Work and, except as otherwise set forth below, shall pay
directly to its general contractor and other service providers and vendors the
cost of performing all improvements shown and contemplated by the Tenant's
Plans, including, but not limited to, the cost of all permits and governmental
inspections, all architectural and engineering fees, project management fees
paid to Tenant’s construction manager (the “Construction Manager”), the
preparation and delivery to Landlord of the "as-built" plans showing Tenant's
Work, in hard copy and an electronic version thereof which is acceptable to
Landlord (the "As-Built Plans") (which As-Built Plans shall be delivered to
Landlord not later than the tenth (10th) day following the substantial
completion of Tenant's Work), and the Coordination Fee, all of which costs shall
be payable out of the Tenant Allowance to the extent that the Tenant Allowance
is sufficient for that purpose, and any excess amount of which costs shall be
paid directly by Tenant; provided, however, that (i) the portion of the Tenant
Allowance that may be used for moving costs, telephone systems, legal fees,
project management fees to the Construction Manager, the purchase of furniture,
fixtures and equipment to be used in the Premises, Tenant’s interior signage,
and other soft costs shall not exceed an amount in the aggregate which is equal
to twenty-five percent (25%) of the Tenant Allowance (the “Permitted Soft Costs
Portion”) and (ii) no portion of the Permitted Soft Costs Portion shall be
payable unless and until Tenant’s Work has been completed.

 

 C-2 

 

 

Tenant shall have the right to hire the Construction Manager to oversee Tenant’s
Work, which Contraction Manager shall be subject to Landlord’s prior written
approval, not to be unreasonably withheld, conditioned or delayed. Tenant’s
Construction Manager will coordinate Tenant programming, approve design drawings
on Tenant’s behalf, approve Tenant’s project schedule, approve change orders,
approve budgets and expenditures from the Tenant Allowance, ensure conformity of
the construction to the Final Plans and Specifications, and manage Tenant's
specialty contractors.

 

Landlord shall pay the Tenant Allowance to Tenant, or at Tenant’s written
request, to Tenant’s general contractor or Construction Manager (Tenant shall be
required to pay all other service providers, including, without limitation,
consultants, professionals, and vendors, directly subject to reimbursement from
the Tenant Allowance provided there are sufficient funds available for the
same), monthly following Landlord’s receipt from Tenant of (i) invoices
reasonably evidencing work or services performed with respect to the portion of
Tenant’s Work for which payment of a portion of the Tenant Allowance is being
requested, and (ii) waivers or releases of liens from each of Tenant’s
contractors, subcontractors and suppliers in connection with the work performed
or materials supplied as evidenced by the aforesaid invoices and by a written
certification (including an AIA certification at Landlord’s option) executed by
Tenant's general contractor, describing in reasonable detail the items of
Tenant's Work which is the basis of Tenant's request for payment of the portion
of the Tenant Allowance, and (iii) with respect only to the payment of the final
ten percent (10%) of the Tenant Allowance, the delivery of the As-Built Plans,
copies of all final inspectional sign-offs for the Tenant’s Work performed by
applicable governmental authorities, and all maintenance manuals with respect to
Tenant’s Work. Each payment by Landlord shall be made within thirty (30) days of
Landlord’s receipt of a draw request which complies with the requirements of
this Paragraph 4 and which is received by Landlord not later than the tenth
(10th) day of the month in which such draw request is submitted; provided,
however, that Landlord shall have the right to retain ten percent (10%) of the
amount of the hard costs of Tenant’s Work contained in each such request until
completion of Tenant’s Work. All of the retained amounts shall be paid to Tenant
upon completion of Tenant’s Work and satisfaction of the other requirements of
this Exhibit C. Notwithstanding the foregoing, in the event that Tenant is
retaining amounts which are at least equal to those required by the immediately
preceding sentence from Tenant’s general contractor and Tenant’s payment request
reflects such retainage, then Landlord shall not impose an additional retainage
upon such payment request. The portion of the Tenant’s Work which shall be
payable out of the Tenant Allowance shall be an amount equal to the portion of
the Tenant’s Work which has been completed. Any portion of the Tenant Allowance
for which disbursement has not been properly requested prior to the Rent
Commencement Date shall be deemed to have been forfeited by Tenant and shall no
longer be available to Tenant. Tenant shall have no right to receive any portion
of the Tenant Allowance, including, but not limited to, the Permitted Soft Costs
Portion, at any time that Tenant is in default under the Lease (until such time
as the default is cured within the applicable notice and cure period provided
under the Lease).

 

 C-3 

 

 

Solely in the event that Landlord fails to disburse the portion of the Tenant
Allowance requested by Tenant in accordance with this Work Agreement, Tenant
shall have the right to provide Landlord with written demand for disbursement
stating that Landlord shall have ten (10) business days after such written
demand therefor to pay the portion of the Tenant Allowance that is owed to
Tenant in accordance with this Work Agreement. If Tenant has fully complied with
the terms of this Work Agreement with respect to the disbursement of the portion
of the Tenant Allowance which Tenant is requesting, and Landlord does not
disburse such portion of the Tenant Allowance within such ten (10) business day
period following Tenant’s written demand therefor, then Tenant shall have the
following rights, as its sole and exclusive remedies for such failure: (a) to
deduct an amount equal to the portion of the Tenant Allowance requested in
accordance with the terms of this Work Agreement and not paid by Landlord (plus
interest on the unpaid portion thereof at the rate of twelve percent (12%) per
annum with respect to any portion of such costs which remain unpaid for three
(3) consecutive months) (such amount being referred to herein as the
“Reimbursable Costs”) from Tenant’s next installment(s) of Monthly Base Rent
coming due under the Lease until such time as Tenant has recovered all of the
Reimbursable Costs, and (b) if such failure by Landlord to disburse any portion
of the Reimbursable Costs continues for a period of twelve (12) consecutive
months after the date that such Reimbursable Costs initially became due and
payable to Tenant hereunder, to file suit against Landlord to recover the
Reimbursable Costs (it being agreed that Tenant shall have the right to pursue
any combination of the remedies set forth in clauses (a) and (b) hereof until
the full amount of the Reimbursable Costs have been received or credited to
Tenant, but that such remedies may not be pursued concurrently). Notwithstanding
the foregoing, in the event that Tenant exercises its offset right pursuant to
this Paragraph 4, and a court of competent jurisdiction later determines that
Tenant was not entitled to some or all of the amount which was offset, Tenant
shall reimburse Landlord, within thirty (30) days following the date of issuance
of a final, unappealable order by such court, the full amount that was found to
have been improperly offset, together with interest thereon at the Default Rate
from the date of offset through the date of reimbursement of such amount by
Tenant to Landlord.

 

5.CHANGES IN TENANT'S WORK

 

Tenant shall not have the right to order extra work or change orders with
respect to the construction of Tenant’s Work without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed; provided, however, that Tenant may order extra work or change orders
with respect to the construction of Tenant’s Work without Landlord’s consent
(each a “Permitted Change”), so long as such Permitted Change (i) does not
exceed Fifty Thousand Dollars ($50,000.00) per order or Two Hundred Fifty
Thousand ($250,000.00) in the aggregate, and (ii) does not affect any of the
Building operating systems or any of the structural components of the Building.
Tenant shall pay for any and all increases in the actual cost of constructing
Tenant’s Work in excess of the Tenant Allowance (and the Tenant Reimbursement
Improvements Amount Cap, if applicable) occasioned by a change to the Tenant's
Plans requested by Tenant.

 

 C-4 

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Agreement under
seal as of the day and year first above written.

 

WITNESS:   LANDLORD:           IP9 1201 CLOPPER ROAD, LLC, a Maryland limited
liability company           By:     By:         Name:         Its:            
ATTEST:   TENANT:       [Corporate Seal]   NOVAVAX, INC., a Delaware corporation
          By:     By:   Name:     Name:   Its:     Its:  

 

 C-5 

 

 

EXHIBIT D

 

BUILDING/PREMISES RULES AND REGULATIONS

 

1.No sign, placard, picture, advertisement, name or notice shall be installed or
displayed on any part of the exterior of the Building without the prior written
consent of Landlord. Landlord shall have the right to remove, at Tenant’s
expense and without notice, any sign installed or displayed in violation of this
rule. All approved sings or lettering on doors and walls, shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person chosen by
Landlord.

 

2.No awning shall be permitted on any part of the Premises. Tenant shall not
place anything against, near or on any glass partitions, doors, windows or
window sills which may appear unsightly from outside the Premises and Tenant is
specifically prohibited from sitting or placing anything on the window sills of
the Premises. Tenant shall not obstruct any windows, doors, partitions or lights
within the Premises which admit or reflect light into the hallways of the
Building. Tenant shall not attach or hand any curtains, blinds, shades, or
screens used in connection with any window or door of the Premises without first
obtaining the written consent of Landlord. Said curtains, blinds or shades must
be of a quality, type, design and color and attached in a manner approved by
Landlord.

 

3.Landlord shall retain the right to control and prevent access to the Building
of all persons whose presence in the judgment of Landlord would be prejudicial
to the safety, character, reputation and interest of the Building and its
tenants; provided that nothing herein contained shall be construed to prevent
such access to persons with whom any tenant normally deals in the ordinary
course of its business, unless such persons are engaged in illegal activities.
No tenant and no employee or invitee of any tenant shall go upon the roof of the
Building, except as reasonably necessary to access systems and equipment to
fulfill Tenant’s obligations under the Lease.

 

4.Tenant shall not cause any unnecessary labor by carelessness or indifference
to the good order and cleanliness of the Premises. Landlord shall not in any way
be responsible to any Tenant for any loss of property on the Premises, however
occurring, or for any damage to any Tenant’s property by the janitor or any
other employee or any other person.

 

5.Landlord shall furnish Tenant, free of charge, a key to each door lock in the
Premises. Landlord may charge an additional amount $2 per key for additional
keys requested by Tenant. Tenant shall not alter any lock or install a new
additional lock or bolt in the entrance door of its Premises without written
consent of Landlord. Tenant upon termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to Tenant, and in the
event of loss of any keys so furnished, shall pay Landlord therefor.

 

6.If Tenant requires telegraphic, telephonic, burglar alarm or similar services,
it shall first obtain, and comply with, Landlord’s instructions in their
installation.

 

 D-1 

 

 

7.Any freight elevator shall be available for use by all tenants in the
Building, subject to such reasonable scheduling as Landlord in its discretion
shall deem appropriate. No equipment, furniture or other bulky property will be
received in the Building or carried in the elevators except between such hours
and in such elevators as may be designated by Landlord.

 

8.Tenant shall not place a load upon any floor of the Premises which exceeds the
load per square foot which such floor was designed to carry as provided in the
Lease and which is allowed by law. Landlord shall have the right to prescribe
the weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary
by Landlord, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight. Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Building or to any space therein to such a degree as to
objectionable to Landlord or to any tenants in the Building, shall be placed and
maintained by Tenant, at Tenant’s expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. The persons employed to move
such equipment in or out of the Building must be acceptable to Landlord.
Landlord will not be responsible for loss of, or damage to, any such equipment
or other property from any cause, and all damage done to the Building by
maintaining or moving such equipment or other property shall be repaired at the
expense of Tenant.

 

9.Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment. Tenant shall not
use or permit to be used in the Premises any foul or noxious gas or substance,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of noise,
odors or vibrations, mot shall Tenant bring into or keep in or about the
Premises any birds or animals.

 

10.Unless otherwise agreed to within the Lease, Tenant shall not use any method
of heating or air-conditioning other than that supplied by Landlord.

 

11.Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Building’s heating and air-conditioning and to comply with any
government energy-saving rules, laws or regulations of which Tenant has actual
notice, and shall refrain from attempting to adjust controls other than room
thermostats installed for Tenant’s use. Tenant shall use reasonable efforts to
keep corridor doors closed, and shall close window coverings at the end of each
business day.

 

12.Landlord acknowledges that Tenant has access to the building twenty-four (24)
hours a day, seven (7) days a week. Landlord reserves the right to exclude from
the Building between the hours of 6 p.m. and 8 a.m. the following day, or such
other hours as may be established from time to time by Landlord, and on Sundays
and Building Holidays, any person unless that person is known to the person or
employee in charge of the Building and has a pass or is properly identified.
Tenant shall be responsible for all persons for whom it requests passes and
shall be liable to Landlord for all acts of such persons. Landlord shall not be
liable for damages for any error with regard to the admission or exclusion from
the Building of any person. Landlord reserves the right to prevent access to the
Building in case of invasion, mob, riot, public excitement or other commotion by
closing the doors or by other appropriate actions.

 

 D-2 

 

 

13.Tenant shall use reasonable efforts to close and lock the doors of the
Premises and entirely shut off all water faucets or other water apparatus, and
electricity, gas, or air outlets before tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.

 

14.The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown thereto. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or invitees shall have caused it.

 

15.Tenant shall not sell or permit the sale at retail, of newspapers, magazines,
periodicals, theatre tickets or any other goods or merchandise to the general
public (except for Tenant’s members) in or on the Premises. Tenant shall not
make any room-to-room solicitation of business from other tenants in the
Building; provided, Tenant may make sales in response to telephone, telefax or
internet orders received by Tenant at the Premises.

 

16.Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building, except as otherwise
provided in the Lease. Tenant shall not interfere with radio or television
broadcasting or reception from or in the Building or elsewhere.

 

17.Tenant shall not in any way deface the Premises or any part thereof. Landlord
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises. Tenant shall not cut or
bore holes for wire. Tenant shall not affix any floor covering to the floor of
the Premises in any manner except as approved by Landlord. Tenant shall repair
any damage resulting from noncompliance with this rule.

 

18.Except as permitted in the Lease, Tenant shall not install, maintain or
operate upon the Premises any vending machine without the written consent of
Landlord.

 

19.Canvassing, soliciting and distribution of handbills or any other written
material and peddling in the Building are prohibited, and each tenant shall
cooperate to prevent same.

 

20.Landlord reserves the right to exclude or expel from the Building any person
who, in Landlord’s judgment, is intoxicated or under the influence of liquor or
drugs or who is in violation of any of the Rules and Regulations of the
Building.

 

21.Tenant shall store all its trash and garbage within the Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with direction
issued from time to time by Landlord.

 

 D-3 

 

 

22.The Premise shall not be used for the storage of merchandise held for sale to
the general public, except for publications or for lodging or for manufacturing
of any kind, nor shall the Premises be used for any improper, immoral or
objectionable purpose.

 

23.Tenant shall not use in any space or in public halls of the Building any hand
trucks except those equipped with rubber tires and side guards or such other
material-handling equipment as Landlord may approve. Tenant shall not bring any
other vehicle of any kind into the Building (other than forklifts for use in the
warehouse portions of the Building).

 

24.Without the written consent of Landlord, Tenant shall not use the name of the
Building in connection with or in promoting or advertising the business of
Tenant except as Tenant’s address.

 

25.Tenant shall comply with all safety fire protection and evacuation procedures
and regulations established by Landlord or any government agency.

 

26.Tenant assumes any and all responsibilities for protecting the Premises from
theft, robbery and pilferage.

 

27.The requirements of Tenants will be attended to only upon written application
to the office of the Building Manager by an authorized individual.

 

28.Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building or the Premises.

 

 D-4 

 

 

EXHIBIT E

 

FORM OF LETTER OF CREDIT

 

 E-1 

 

 

EXHIBIT F

 

[INTENTIONALLY OMITTED]

 

 F-1 

 

 

EXHIBIT G

 

WORK RULES AND REGULATIONS

 

1.GENERAL

 

A.No work is permitted to be performed until the Construction Supervisor has
received two (2) sets of the Final Plans.

 

B.All modifications to the Building or to any Building systems and equipment
must be compliant with Laws and approved in writing by Landlord in accordance
with the Lease.

 

C.Impairments to fire/life safety systems and hot work conducted during the
project will be conducted in accordance with the requirements of the Landlord’s
insurance loss control programs as stated in these Work Rules and Regulations.

 

D.Mechanical fastening is not permitted to the existing curtain wall and or
window systems.

 

E.Building standard soffit is to be installed at perimeters and any areas with
windows and curtain wall.

 

F.In the event a window/curtain wall is removed or a penetration in the
roof/walls is completed, a mold inspection/certification report will be required
to be completed by the General Contractor and copies provided to Landlord.

 

G.Prior to the work commencing, a building permit, and all other required trade
permits must be obtained and displayed, a certificate of insurance from the
General Contractor must be furnished to Landlord evidencing the insurance
required by the Lease and the General Contractor has filed with Landlord its
written safety plan complying with these Work Rules and Regulations. During the
performance of the Tenant’s Work all inspections must be performed to satisfy
permit requirements.

 

H.No later than sixty (60) days after the completion of the Tenant’s Work, the
General Contractor shall furnish Landlord with one set of reproducible and two
(2) sets of blue-line prints showing the final as-built construction work
performed together with an AutoCAD Computer Assisted Drafting and Design System
(or other compatible system or medium) using naming conventions issued by the
American Institute of Architects in June 1990 (or other reasonable naming
convention) and magnetic computer media of such record drawings and
specifications, translated into DXF format or another format acceptable to
Landlord.

 

 G-1 

 

 

I.The Construction Supervisor must be notified by the General Contractor of all
work scheduled and shall be provided with a list of all personnel working on the
Premises.

 

J.Before any new electrical or mechanical equipment is installed in the
Building, the General Contractor must submit a copy of the manufacturer’s data
sheet to the Construction Supervisor. Any structural modifications or design
modifications shall be performed at Tenant’s sole cost and expense and should be
included as part of the Final Plans.

 

K.All carts must be furnished with pneumatic tires.

 

L.Smoking is not allowed in the Building.

 

M.Intentionally omitted.

 

N.The General Contractor must furnish the Construction Supervisor with a list of
all sub-contractors, including emergency phone and/or pager numbers prior to
commencing the work.

 

O.The General Contractor must provide an on-site project superintendent at all
times during which construction work is in progress. This supervisor must be
knowledgeable of the project’s scope of work and have adequate on-site reference
materials such as plans and specifications.

 

P.All workers must be dressed appropriately when working in an occupied
building. Shirts must be worn at all times.

 

Q.Any roof related work must be performed by Landlord’s designated contractor
and details for penetration of the roof must be submitted for approval in
accordance with the terms of the Lease and these Work Rules and Regulations. All
details will conform with manufacturer’s recommendations and be performed in a
workmanlike manner so as not to void or interrupt the roof warranty.

 

R.Dumping of construction debris into any portion of the Building or the Land
not specifically designated for same is strictly prohibited. All rubbish refuse
and debris is to be removed by a licensed hauler to regulated/licensed landfills
or recovery stations.

 

S.Prior to starting work, the Tenant is to provide an emergency call list to
Landlord.

 

T.Door and hardware specifications match the base Building standards.

 

U.Tenant to provide details of fire-safe penetrations through the rated walls
and floors for Landlord review and comment.

 

 G-2 

 

 

V.The Architect and or Engineer to provide specifications for the low VOC
materials to be used in the Tenant’s Work (adhesives, paints, carpet, wall
covering, etc.).

 

W.Tenant to turn over the Landlord any base Building devices such as unit
heaters, fire alarm, and such which are removed and not intended for re-use
during the fit-out.

 

X.Utility shut downs shall be coordinated at least 14 days in advance with the
Construction Supervisor.

 

Y.Tenant is to coordinate and provide master keying compatible with the Building
locks. This is to be submitted and approved by Landlord prior to installation of
any locks.

 

Z.The General Contractor shall comply with Landlord’s Mold Operation and
Maintenance Plan for Contractors, a copy of which will be provided to Tenant.

 

AA.The General Contractor shall comply with Landlord’s standards for low of no
VOCs products, a copy of which will be provided to Tenant.

 

2.LIFE SAFETY

 

A.The General Contractors shall not disconnect, tamper with, delete, obstruct,
relocate, or expand any life safety equipment except as indicated on approved
Final Plans.

 

B.The General Contractors will take necessary precautions to prevent accidental
fire alarms. Any unit or device temporarily incapacitated will be red-tagged
“Out of Service” and the Construction Supervisor will be alerted prior to the
temporary outage.

 

C.All tenant installed special fire extinguisher /alarm detection systems shall
be monitored by the base Building fire alarm system.

 

D.Tenant installed fire alarm initiation and notification devices operating
directly from the base Building fire alarm system shall be specified by the
Landlord.

 

E.All connections to the Building’s existing fire alarm system are to be made
only by the subcontractor specified by the Construction Supervisor.

 

F.Fire alarm testing will be scheduled, if possible, at least twenty four (24)
hours in advance with the Construction Supervisor and any required governmental
agent.

 

G.Combustible and hazardous materials are not allowed to be stored in the
Building or anywhere else on the Premises without prior approval of the
Construction Supervisor. Material safety data sheets on all other materials to
be stored in the Building must be kept onsite and a copy submitted to the
Construction Supervisor.

 

 G-3 

 

 

H.Dust protection of smoke detectors must be installed and removed on a daily
basis. Dust protection is required during construction to avoid false fire
alarm. Filter media must be installed over all return air paths to any equipment
rooms prior to demolition. The media must be maintained during construction and
removed at substantial completion.

 

I.All of the Premises is to be fully protected by automatic sprinkler systems.

 

J.All systems and equipment are to be designed and installed in accordance with
the current standards of the National Fire Protection Association.

 

K.Any sprinkler work shall be permitted by the local municipality authority.

 

L.All equipment, devices and materials used in the installation should be listed
by UL and FM Approved.

 

M.Connection to the base Building sprinkler/standpipe riser shall be provided
with a control valve and water flow alarm device. Sprinkler systems control
valves shall be UL Listed and FM Approved, clockwise closing, indicating valves
with supervisory switches.

 

N.The entire system shall be designed and installed in accordance with NFPA
Pamphlet No. 13, 231 and 231C latest issues and local codes.

 

O.The General Contractor shall comply with Landlord’s indoor air quality
management plan, a copy of which has been provided to Tenant.

 

3.PARKING – LOADING DOCK

 

A.Neither the General Contractor nor its personnel will use loading dock area
for daytime parking without first obtaining permission from the Construction
Supervisor forty-eight (48) hours in advance to better assure dock availability.
Unauthorized vehicle will be ticked and towed.

 

B.Use of the loading dock for deliveries/trash removal must be scheduled through
the Construction Supervisor.

 

4.UTILITIES

 

A.Utilities (i.e. electric, gas, water, telephone/cable) will not be cut off or
interrupted without permission of the Construction Supervisor and affected
tenants and at least forty-eight (48) hours prior notice.

 

 G-4 

 

 

5.SECURITY

 

A.When it is deemed necessary by the Construction Supervisor to temporarily
issue any keys to the General Contractor, the General Contractor will be
responsible for controlling possession and use of the key(s) and will return
them daily to the person that issued them. Failure to return keys may result in
re-keying and costs associated with re-keying will be borne by the General
Contractor.

 

The General Contractor will be responsible for locking any area made available
to the General Contractor whenever that area is unattended.

 

 G-5