Document:

Exhibit 10.4

 

Confidential treatment requested under 17 C.F.R. §§ 200.80(b)(4) and 240.24b-2.  The confidential portions of this exhibit have been omitted and are marked accordingly.  The confidential portions have been filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.

 

CO-PROMOTION AGREEMENT

 

This Co-promotion Agreement (hereafter, the “Agreement”) is entered into as of May 18, 2012, by and between Auxilium Pharmaceuticals, Inc., a Delaware corporation (“Auxilium”), and GlaxoSmithKline LLC, a Delaware limited liability company (“GSK”).

 

Recitals

 

A.            Auxilium is the owner of all right, title and interest in and to the Product.

 

B.            Auxilium believes additional resources are necessary to adequately meet the demands for information about, and access to, the Product in the Territory and, therefore, desires to co-promote the Product with GSK in the Territory.

 

C.            GSK desires to co-promote the Product with Auxilium in the Territory, and Auxilium is willing to grant GSK the right to co-promote the Product in the Territory, all on the terms and subject to the conditions set forth in this Agreement.

 

1.             Definitions

 

1.1           AAA shall have the meaning set forth in Section 17.2.

 

1.2           AAA Rules shall have the meaning set forth in Section 17.3.

 

1.3           Act shall mean the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301 et seq, as it may be amended from time to time, and the regulations promulgated thereunder.

 

1.4           Adverse Event(s) shall mean any of:  an “adverse drug experience,” a “life-threatening adverse drug experience,” a “serious adverse drug experience,” or an “unexpected adverse drug experience,” as those terms are defined in Title 21 of the U. S. Code of Federal Regulations, §314.80, as amended from time to time and published in the Federal Register.

 

1.5           Affiliate shall mean, in relation to a Party, any person, corporation, firm, partnership or other entity, whether de jure or de facto, which directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party.  An entity shall be deemed to control another entity if it:  (i) owns, directly or indirectly, at least fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of such other entity, or has other comparable ownership interest with respect to any entity other than a corporation; or (ii) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of the entity.

 

1.6           Agreement shall have the meaning set forth in the preamble.

 

1.7           ANDA shall mean an Abbreviated New Drug Application as described in Section 505(j) of the Act, 21 U.S.C. § 355(j).

 

 

1.8           Androgel shall mean the [**] testosterone gel products marketed under the Androgel brand.

 

1.9           Androgel or Other Generic Entry shall mean the date of the first [**] in the Territory of an FDA-approved (a) Androgel Generic, or (b) another Generic [**] testosterone [**] with the same or substantially similar indications for use to those of the Product (other than a Generic version of the Product).

 

1.10         Androgel or Other Generic Erosion Date shall mean the date on which there is a loss of [**] percent ([**]%) or more of the market share of the Product, measured in [**] as reported by [**], for any [**] period following an Androgel or Other Generic Entry when compared to such market share measured in [**], as reported by [**], for the [**] period immediately prior to such Androgel or Other Generic Entry.  For the purposes of this Section 1.10, the market for the Product shall include any [**] testosterone [**] with the same or substantially similar indications for use to those of the Product.

 

1.11         Annual Baseline Net Sales Amount shall mean the amount of Net Sales per Year as set forth in the Overall Marketing Plan.  The Annual Baseline Net Sales Amount (a) may be adjusted by mutual agreement of the Parties upon an [**] or [**], to become effective upon the [**] or the [**], and (b) for the 2012 calendar year shall be the sum of the Quarterly Baseline Net Sales Amounts for each of the calendar quarters in 2012 commencing with the GSK First Promotion Date.

 

1.12         Annual Marketing Plan shall mean, subject to Section 2.2, a document prepared annually by Auxilium, and submitted to the Joint Steering Committee for review and approval.  The Annual Marketing Plan will set forth the responsibilities of both Auxilium and GSK with respect to promoting and marketing the Product in the Territory for the applicable Year, including the minimum number (which with respect to GSK, shall be the GSK Minimum Details unless otherwise agreed to by the Parties, and which with respect to Auxilium, shall be the Auxilium Minimum Details unless otherwise agreed to by the Parties), a marketing budget for the Product for the applicable Year and all aspects of commercialization of the Product.  The Annual Marketing Plan will supplement the Overall Marketing Plan and in the event of a conflict between the Overall Marketing Plan and the Annual Marketing Plan, the terms of the Overall Marketing Plan shall control unless the Parties otherwise agree in writing.  The Annual Marketing Plan for the 2012 Year will be agreed to by the Parties within thirty (30) days after the Effective Date.

 

1.13         Annual Scientific Engagement Plan shall mean, subject to Section 2.2, a document prepared annually by Auxilium and submitted to the Joint Steering Committee for review and approval and which provides a comprehensive summary of the planned activities of Auxilium, in the Territory, with external physicians and communities about the Product and conditions associated with a deficiency or absence of endogenous testosterone for the applicable Year, including medical affairs activities, clinical studies, publication strategies, scientific conferences, patient advocacy group activities, advisory boards and consultancies, and grants and sponsorships.

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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1.14         Applicable Health Care Laws shall mean the Anti-Kickback Statute (42 U.S.C. § 1320a-7b et seq.), the Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191) as amended by the Health Information Technology for Economic and Clinical Health Act (Subtitle D of the Health Information Technology for Economic and Clinical Health Act of 2009 and any regulations or other guidance promulgated thereunder), the Sunshine Act, the Federal False Claims Act (31 U.S.C. § 3729-3733), the Civil Monetary Penalties Statute (42 U.S.C. § 1320a-8), Health Care Fraud (18 U.S.C. § 1347), False Statements Relating to Health Care Matters (18 U.S.C. § 1035), and Laws and Regulations related to Government Price Reporting.

 

1.15         Arbitration Request shall have the meaning set forth in Section 17.3.

 

1.16         Authorized Testim Generic Entry shall mean the date of the first [**] in the Territory by (a) an Auxilium authorized Third Party, or (b) Auxilium or an Affiliate of Auxilium, of a Generic of the Product.

 

1.17         Auxilium shall have the meaning set forth in the preamble.

 

1.18         Auxilium Minimum Details  shall have the meaning set forth in Section 5.5(c).

 

1.19         Auxilium Parties shall have the meaning set forth in Section 13.4.

 

1.20         Auxilium Patents shall mean all patents and patent applications in the Territory that are or become owned by or licensed to Auxilium, or to which Auxilium otherwise has, now or in the future, the right to grant licenses and license rights, that generically or specifically cover the Product or a use or formulation of the Product.  Included within the definition of Auxilium Patents are all continuations, continuations-in-part, divisionals, patents of addition, reissues, reexaminations, renewals or extensions thereof.  The current list of patent applications and patents encompassed within Auxilium Patents is set forth in Appendix B attached hereto.

 

1.21         Auxilium Sales Support Expenses shall mean at least $[**] to be spent by Auxilium [**] in support of sales of the Product.

 

1.22         Auxilium Trademarks shall mean the Testim® trademark owned by or licensed to Auxilium in the Territory, and any other trademark, service mark or logo developed, applied for, registered, or to be applied for or registered for use in connection with the sale of the Product in the Territory.  The current list of Auxilium Trademark registrations and applications is set forth in Appendix A attached hereto.

 

1.23         Base Auxilium Marketing Expenses shall have the meaning set forth in Section 5.8(a).

 

1.24         Baseline Net Sales Amount means the Annual Baseline Net Sales Amount or the Quarterly Net Sales Amount, as the context may require.

 

1.25         Benefit Plans shall have the meaning set forth in Section 5.6(e).

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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1.26         Business Day shall mean a day on which commercial banks are open for business in New York City.  References in this Agreement to “days” other than Business Days shall mean calendar days.

 

1.27         cGMP  shall mean the then-current Good Manufacturing Practices as defined in the U.S. Code of Federal Regulations that are applicable to the Product and the manufacturing thereof under this Agreement, as amended from time to time, including the current good manufacturing practices promulgated by the FDA under the Act, found in Title 21 of the U.S. Code of Federal Regulations, Parts 210 and 211.

 

1.28         Change of Control shall mean, with respect to Auxilium:  (a) (i) any Third Party acquires, directly or indirectly, beneficial ownership of any voting security of Auxilium representing fifty percent (50%) or more of the total voting power of the then-outstanding voting securities of Auxilium; (ii) the consummation of a merger, consolidation, recapitalization, or reorganization of Auxilium with or by a Third Party which would result in fifty percent (50%) or more of the total voting power of the capital stock being transferred to a Third Party; (iii) the stockholders of Auxilium approve a plan of complete liquidation of Auxilium; or (iv) an agreement for the sale or disposition by Auxilium of all or a substantial portion of Auxilium’s assets, other than to an Affiliate, and (b) after consummation of any of the foregoing events, the acquiring Third Party or surviving, consolidated, recapitalized or reorganized entity then owning the Product also sells, promotes or markets [**].

 

1.29         CIAs shall mean any corporate integrity agreement.

 

1.30         Claims shall have the meaning set forth in Section 13.3.

 

1.31         Codes shall mean the Code on Interactions with Healthcare Professionals promulgated by the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association Opinion 8.061, Gifts to Physicians from Industry, and the Compliance Program Guidance for Pharmaceutical Manufacturers by the Department of Health and Human Services - Officer of Inspector General, as any of the foregoing may be amended.

 

1.32         Commercially Reasonable Efforts shall mean, with respect to a Party’s obligation to perform or achieve a specified obligation for the Product or generally under this Agreement, the efforts, expertise, degree of skill, and resources that are comparable in quality and scope to those efforts, expertise, degree of skill and resources that are generally used by such Party to perform or achieve a comparable obligation for a pharmaceutical product owned or controlled by such Party, which has the same regulatory requirements or status (for example, requires a prescription or is available over-the-counter), is at a comparable stage of development or product life as the Product, and that has similar market potential as the Product, taking into account issues of patent coverage, relative safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, relevant regulatory circumstances, the profitability of the product (including pricing and reimbursement status achieved) and other relevant risk factors, including technical, legal, scientific, commercial and/or medical risk factors.

 

1.33         Competing Product shall have the meaning set forth in Section 11.1.

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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1.34         Compliance Committee shall have the meaning set forth in Section 5.11(a).

 

1.35         Compliance Dispute shall have the meaning set forth in Section 5.11(a).

 

1.36         Compliance Records shall mean records created or generated by or for each Party during the Term and related to the sale, promotion or marketing of the Product, any disease state or scientific engagement activities related to hypogonadism in males or any activities conducted under this Agreement, including applicable (a) Compliance Committee meeting minutes, (b) compliance hotline complaints, inquiries, and responses thereto, (c) Promotion Materials, (d) Scientific Materials, (e) sales representative call notes and call logs; (f) documents related to interactions with healthcare professionals or Product customers; (g) customer contracts; (h) service arrangements; (i) contracts and payment terms related to relationships with healthcare professionals; or (j) results of compliance audits or investigations, whether internal or external.

 

1.37         Core Sales Aid shall mean that certain core piece of Promotional Material that is agreed upon by the Parties prior to the Effective Date.

 

1.38         Dispute shall have the meaning set forth in Section 17.1.

 

1.39         Early Termination Date shall have the meaning set forth in Section 4.2(b).

 

1.40         Effective Date shall mean the date upon which this Agreement becomes effective and shall be the date first written above.

 

1.41         Intentionally Omitted.

 

1.42         Existing Confidentiality Agreement shall mean that certain Confidentiality Agreement between the Parties dated as of December 7, 2010.

 

1.43         Expiration Date shall have the meaning set forth in Section 3.1.

 

1.44         FDA shall mean the United States Food and Drug Administration and any successor agency thereto.

 

1.45         Force Majeure Event shall have the meaning set forth in Section 16.2.

 

1.46         GAAP shall mean Generally Accepted Accounting Principles in the United States.

 

1.47         Generic or “generic” shall mean a product approved pursuant to either [**] or [**].

 

1.48         Good Clinical Practice shall mean standards for the design, conduct, monitoring, auditing, recording, analysis, reporting of studies and clinical trials that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, safety, and confidentiality of subjects are protected.  Good Clinical Practice includes the requirements of Title 21 of the U.S. Code of Federal Regulations, Parts 50, 54, 56, and 312, applicable FDA

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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guidance, and the International Conference on Harmonisation (ICH) E6 Good Clinical Practice:  Consolidated Guidance.

 

1.49         Government Price Reporting shall have the meaning set forth in Section 7.5.

 

1.50         GSK shall have the meaning set forth in the preamble.

 

1.51         GSK First Promotion Date shall mean, subject to Section 2.2, the first date on which a GSK field sales representative first conducts a Product Detail after having received the training agreed in the Training Plan.

 

1.52         GSK Marketing Expenses shall have the meaning set forth in Section 5.8(a).

 

1.53         GSK Minimum Details shall have the meaning set forth in Section 5.5(c).

 

1.54         GSK Parties shall have the meaning set forth in Section 13.3.

 

1.55         GSK Policies shall mean the product promotional, compliance, scientific, anti-corruption and other related policies and procedures generally applicable to GSK that have been provided in writing to Auxilium and listed on Schedule 1.55 and such additional or modified written policies and procedures as are provided by GSK to Auxilium from time to time.

 

1.56         Incremental Marketing Spend shall have the meaning set forth in Section 5.8(b).

 

1.57         Incremental Net Sales shall mean the amount by which the Net Sales of the Product for a particular period exceeds the Baseline Net Sales Amount for such period.

 

1.58         Indemnitee shall have the meaning set forth in Section 13.5.

 

1.59         Indemnitor shall have the meaning set forth in Section 13.5.

 

1.60         Ineligible or Debarred Person shall mean an individual who (a) is currently excluded, debarred, suspended or otherwise ineligible to participate in a federal health care program or in federal procurement or nonprocurement programs, (b) to the knowledge of Auxilium or GSK, as applicable, has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible, (c) is currently debarred under Subsection (a) or (b) of Section 306 of the Act, or (d) to the knowledge of Auxilium or GSK, as applicable, has been convicted of a criminal offense that makes the individual eligible for debarment under Subsection (a) or (b) of Section 306 of the Act, but has not yet been debarred.

 

1.61         Intellectual Property shall have the meaning set forth in Section 13.1(i).

 

1.62         Inventions shall have the meaning set forth in Section 9.1.

 

1.63         Joint Co-Promotion Activities shall have the meaning set forth in Section 5.5.

 

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1.64         Joint Defense Agreement shall mean that certain Joint Defense Agreement by and between the Parties dated as of April 5, 2012.

 

1.65         Joint Steering Committee shall have the meaning set forth in Section 5.1.

 

1.66         Know-How shall mean all present and future information developed by Auxilium, whether or not in written form, that is not in the public domain or already rightfully known to GSK and that relates to the Product, including all biological, chemical, pharmacological, toxicological, medical or clinical, analytical, quality, manufacturing, research, or sales and marketing information as well as all processes, methods, procedures, techniques, plans, programs, and data and any other information relating to the Product or useful for the development or commercialization of the Product in the Territory.

 

1.67         Laws and Regulations shall mean all applicable statutes, ordinances, regulations, codes, rules or orders of any kind whatsoever of any governmental authority in the Territory, including the Act, the Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335a et seq.), the Anti-Kickback Statute (42 U.S.C. § 1320a-7b et seq.), the Health Insurance Portability and Accountability Act of 1996 as amended by the Health Information Technology for Economic and Clinical Health Act, the Sunshine Act, the Federal False Claims Act (31 U.S.C. § 3729-3733), the Codes, the PDMA, the Department of Health and Human Services Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers, released April 2003, the Antifraud and Abuse Amendment to the Social Security Act (P.L.  95-142 amending the Social Security Act § 1128), the Social Security Act section regarding reporting of information relating to drug samples (the Social Security Act § 1128H), the Department of Veteran Affairs (“VA”) Final Rule regarding Drug and Drug-Related Supply Promotion by Pharmaceutical Company Representatives at VA Facilities (77 Fed Reg. 12997), the Public Health Service Act (42 U.S.C. § 254b et seq.), the Civil Monetary Penalties Statute (42 U.S.C. § 1320a-8), Health Care Fraud (18 U.S.C. § 1347), and False Statements Relating to Health Care Matters (18 U.S.C. § 1035), and any state or local laws impacting the promotion of pharmaceutical products, all as amended from time to time.

 

1.68         Minimum Details shall mean the GSK Minimum Details or the Auxilium Minimum Details, as applicable.

 

1.69         NDA shall mean a New Drug Application, as described in Section 505(a) of the Act, 21 U.S.C. § 355(a).

 

1.70         Net Sales shall mean the gross amount billed or invoiced on sales of the Product in the Territory to Third Parties, less only the following deductions (without any duplication), which are actually incurred, allowed, paid, accrued or specifically allocated to the extent that such amounts are deducted from gross invoiced sales amounts as reported by Auxilium, its Affiliates, licensees or agents, in its financial statements in accordance with GAAP, applied on a consistent basis:

 

(i)            customary trade, quantity, prompt pay, and cash discounts;

 

(ii)           fees to wholesalers based on shipment activity under the terms of wholesaler service agreements;

 

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(iii)          Product rebates and Product charge-backs and other price reduction programs granted to managed care entities, pharmaceutical benefit management service entities and government health plans;

 

(iv)          redemption of Product coupons and co-pay assistance programs; and

 

(v)           the allowances or credits to customers, in each case on account of rejection or return of the Product or on account of price reductions affecting the Product.

 

In the event that non-monetary consideration is received for the Product, Net Sales shall be calculated based on the average price charged for the Product during the preceding calendar quarter.  In addition, Net Sales shall be determined on, and only on, the first sale by a Party or its Affiliates, licensees or agents to a Third Party.

 

If Auxilium chooses to sell the Product together with another Auxilium product with composite pricing, Net Sales for the affected Product will be recalculated using the prorated portion of the combined net selling price of the bundled products based on the relative net selling price for each of the individual products in such bundle (a) during the last quarter in which each such product was not sold as part of a bundle, or (b) if any such product continues to be individually sold, at each such product’s then-current net selling price.  Where any increase or  reduction in the invoice price or deduction therefrom is based on sales of a bundle of products in which the Product for use in the Territory is included, the increase or reduction in price or deduction therefrom would be allocated to such Product on a pro rata basis based on the sales value (i.e., the unit average selling price multiplied by the number of units) of such Product relative to the sales value contributed by the other products in the bundle with respect to such sale based on the relative net selling prices of such products (y) during the last quarter in which each such product was not sold as part of a bundle, or (z) if any such product continues to be individually sold, at such product’s then-current net selling price.

 

1.71         OIG shall mean the Office of the Inspector General of the U.S. Department of Health and Human Services and any successor office thereto.

 

1.72         Overall Marketing Plan shall mean the marketing plan attached hereto as Schedule 1.72.  For the avoidance of doubt, the Overall Marketing Plan may only be amended or modified by written agreement of the Parties.

 

1.73         Party(ies) shall mean each of Auxilium and GSK.

 

1.74         PDMA shall mean the Prescription Drug Marketing Act of 1987, as incorporated in the Act, and the regulations promulgated thereunder, found in Title 21 of the U.S. Code of Federal Regulations Part 203.

 

1.75         Permitted Shortfall shall mean that (i) with respect to each of the [**] after [**], a shortfall in the number of Product Details required to be performed by a Party during such [**], not to exceed [**] of the Minimum Details to be performed by such Party during such [**], and (ii) for any [**] thereafter during the Term, a shortfall in the number of Product Details required

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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to be performed by a Party during such [**], not to exceed [**] of the Minimum Details to be performed by such Party during such [**].

 

1.76         PM Working Group shall have the meaning set forth in Section 5.5(d).

 

1.77         Prescriber shall mean a practitioner licensed under Laws and Regulations to administer or prescribe the Product.

 

1.78         Prime Rate means the US Prime Rate as published from time to time in The Wall Street Journal.

 

1.79         Product shall mean Auxilium’s Testim® 1% testosterone gel product for all indications approved by the FDA.

 

1.80         Product Detail(s) shall mean a face-to-face meeting, between (i) a professional representative of the applicable Party, who is not an Ineligible or Debarred Person and who  meets minimum professional standards of [**], and (ii) a Prescriber, during which a promotional presentation of at least one of the Product’s attributes is orally presented in a manner consistent with the quality of such presentations made by a Party’s professional representatives for such Party’s other products.  When used as a verb, “Product Detail” or “Product Detailing” shall mean to engage in the Product Detail.  For purposes of clarity, a Product Detail shall not include a Sample drop or coupon drop by such a professional representative.

 

1.81         Product Manager shall have the meaning set forth in Section 5.5(h).

 

1.82         Promotion Conditions shall have the meaning set forth in Section 2.2.

 

1.83         Promotional Materials shall mean all written, printed, digital, electronic, audio-visual or other graphic advertising, promotional, educational and communication materials for marketing, advertising, promotion, sale and Product Detailing for use in the Territory, including disease awareness materials, coupons, materials related to patient assistance/reimbursement programs, public relation campaign materials, sales training and speaker training materials.  Promotional Materials do not include:  (a) public announcements or press releases made in accordance with Section 10.3, (b) periodic presentations to the investment community that include factual information regarding the Product that is not promotional in nature, or (c) Scientific Materials.

 

1.84         Promotional Payment shall have the meaning set forth in Section 4.1.

 

1.85         Quarterly Baseline Net Sales Amount shall mean the amount of Net Sales per calendar quarter for each Year as set forth in the Overall Marketing Plan.  The Quarterly Baseline Net Sales Amount (a) may be adjusted upon mutual agreement of the Parties upon an [**] or [**] to become effective within thirty (30) days after the [**] or [**], and (b) for the first quarter after the Effective Date shall be adjusted ratably for the period from the GSK First Promotion Date to the last day of the first calendar quarter thereafter.

 

1.86         Reserved Matter shall have the meaning set forth in Section 5.3(b).

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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1.87         Samples shall mean Product that is provided free of charge as defined in section 503 of the Act.

 

1.88         Scientific Materials shall mean publications, papers, scientific posters and presentations, advisory board materials, written prepared responses to unsolicited requests for information related to indications for use of the Product that are not included in FDA-approved Product labeling, and similar materials used for specific educational purposes or in connection with medical affairs functions.

 

1.89         Specifications shall mean specifications for or concerning the manufacturing and testing of the Product which are utilized by Auxilium (or a Third Party on behalf of Auxilium) in the manufacture of the Product and as approved by the FDA.

 

1.90         Sunshine Act shall mean the Transparency Reports and Reporting of Physician Ownership or Investment Interests (42 U.S.C. § 1320a-7h) and all relevant regulations.

 

1.91         Tail Payment(s) shall have the meaning set forth in Section 4.2.

 

1.92         Term shall have the meaning set forth in Section 3.1.

 

1.93         Territory shall mean the United States of America and its territories and possessions, including Puerto Rico, and the District of Columbia.

 

1.94         Third Party(ies) shall mean any person or entity other than Auxilium and GSK or their Affiliates.

 

1.95         Training Plan shall mean a plan, in reasonable detail, for training the Auxilium and GSK sales representatives that shall be agreed to by the Parties within thirty (30) days after the Effective Date.

 

1.96         Unauthorized B-Rated Testim Generic Entry shall mean the date of the first [**] in the Territory by a Third Party (other than a person or entity related to, licensed or otherwise authorized by Auxilium) of a Generic version of the Product that is not A-rated by the FDA as listed in the publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

 

1.97         Unauthorized B-Rated Testim Generic Erosion Date shall mean the date on which there is a loss of [**] percent ([**]%) or more of the market share of the Product measured in [**] as reported by [**] for any [**] period following an Unauthorized B-Rated Testim Generic Entry, when compared to such market share measured in [**], as reported by [**], for the [**] period immediately prior to such Unauthorized B-Rated Testim Generic Entry.  For the purposes of this Section 1.97, the market for the Product shall include any [**] testosterone [**] with the same or substantially similar indications for use to those of the Product.

 

1.98         Unauthorized A-Rated Testim Generic Entry shall mean the date of the first [**] by a Third Party (other than a person or entity related to, licensed or otherwise authorized by Auxilium) of a Generic version of the Product in the Territory that is A-rated by the FDA as

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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listed in the publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

 

1.99         Year shall mean January 1st to December 31st of each calendar year, except for 2012 which shall be the Effective Date to December 31, 2012 and for 2015 which shall be January 1, 2015 to September 30, 2015.

 

2.             Co-Promotion

 

2.1           Grant of Rights.  Auxilium grants to GSK the exclusive right to co-promote the sale of the Product in the Territory, subject to (i) Auxilium’s right to co-promote the Product in the Territory and (ii) all the other terms and conditions of this Agreement.  Auxilium shall retain exclusively all of its rights with respect to the Product outside the Territory, and GSK shall have no rights with respect to the Product outside the Territory as a result of the execution or performance of this Agreement or otherwise.  Auxilium shall not grant any rights to, permit or authorize any Third Party to promote, sell or Product Detail the Product in the Territory during the Term without GSK’s prior written consent.  GSK shall have no other rights relating to the Product except as specified in this Agreement.

 

2.2           Promotion Conditions.  GSK’s obligations to promote the Product and conduct Product Details hereunder shall be subject to the satisfaction of each of the following conditions precedent (the “Promotion Conditions”), in a manner acceptable to each Party in each Party’s sole and absolute discretion:

 

(a)   Completion of the 2012 Annual Marketing Plan;

 

(b)   Completion of the Training Plan and completion of all training activities contemplated by the Training Plan;

 

(c)   Completion of the other significant Promotional Materials set forth on Schedule 2.2, which support the Core Sales Aid;

 

(d)   Completion of the initial Annual Scientific Engagement Plan;

 

(e)   Execution of a Pharmocovigilance Agreement in accordance with Section 7.2; and

 

(f)    Ensure [**] that Auxilium maintains written policies and procedures describing Auxilium’s administrative systems with respect to drug sampling, as required by 21 CFR 203.34.

 

The Parties shall cooperate in good faith to complete each of the foregoing actions as promptly as practicable after the Effective Date.

 

2.3           Efforts.  From and after the date that all of the Promotion Conditions are first satisfied, each of Auxilium and GSK shall deploy such of their respective sales forces, which, in the case of GSK, shall be GSK’s [**] field sales force consisting of approximately [**] sales representative positions as of the Effective Date, and, in the case of Auxilium, shall be

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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Auxilium’s Testim field sales force consisting of approximately 148 sales representative positions as of the Effective Date, and expend Commercially Reasonable Efforts to conduct the Product Details and promote the Product in accordance with the terms of this Agreement, as provided in the Overall Marketing Plan and each Annual Marketing Plan.  Subject to Section 2.2, GSK shall be obligated to conduct the GSK Minimum Details and Auxilium shall be obligated to conduct the Auxilium Minimum Details.  The Parties agree that each Party has the right to reconstitute their respective sales forces to meet their business needs.  Subject to the preceding sentence, each Party agrees to use Commercially Reasonable Efforts to maintain their field sales force in such a manner and with as much consistency to enable them to fulfill their obligations under this Agreement.

 

2.4           Compliance with Law.  Notwithstanding anything to the contrary contained herein, each of Auxilium and GSK agree that in conducting their activities hereunder, including promoting the Product and performing Product Details, such Party shall comply with (a) all Laws and Regulations, (b) the terms of this Agreement, (c) the [**] (assuming Auxilium does not exercise its termination rights under Section 3.2(b)(ii)), and (d) relevant provisions of the CIAs to which GSK is a party and that are attached hereto as Exhibit 2.4 or are otherwise provided in a timely manner and in writing to Auxilium (assuming Auxilium does not exercise its termination rights under Section 3.2(b)(ii)); provided  that with respect to any CIA provisions [**] provided to Auxilium after the Effective Date, Auxilium’s obligations with respect to such CIA provisions [**] under this Section 2.4 shall apply only after Auxilium’s receipt of such CIA provisions [**].  Auxilium agrees that in conducting its activities hereunder, Auxilium shall comply with all Laws and Regulations related to Government Price Reporting obligations for the Product.  No Party shall be required to undertake any obligation, participate in, or incur any cost or reimbursement obligation, in connection with any activity under this Agreement (i) that such Party believes, in good faith with the advice of counsel, may violate or conflict with any Laws and Regulations, (ii) that such Party believes, in good faith may violate or conflict with the GSK Policies (in the case of GSK) or any Auxilium product promotional, compliance, or other related policy or procedure (in the case of Auxilium), (iii) that such Party believes, in good faith may violate or conflict with any CIA, or (iv) with respect to the Product or any use thereof which such Party believes, in good faith, poses a material safety concern.  Each Party agrees to maintain a compliance program consistent with Laws and Regulations with respect to its activities pursuant to this Agreement, including, as applicable, but subject to Section 7.1(f), reporting to the appropriate governmental entity all amounts spent on Product Detailing.  Each Party acknowledges and agrees that it will, from time to time during the Term and at the request of the other Party, (y) participate in discussions with the other Party regarding changes in Laws and Regulations or in the business or regulatory environment that may impact Product Detailing, and (z) if necessary, enter into good faith negotiations to amend this Agreement as appropriate in order to comply with such changes.

 

3.             Term, Termination and Renegotiation

 

3.1           Term.  This Agreement shall commence on the Effective Date, and this Agreement and any licenses granted hereunder shall terminate at 11:59 p.m. Eastern Standard Time on September 30, 2015 (the “Expiration Date”), unless earlier terminated pursuant to Section 3.2 (the “Term”).

 

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3.2           Early Termination.

 

(a)           Each Party shall have the right to terminate this Agreement and any licenses granted hereunder before the end of the Term:

 

(i)            immediately upon a material breach of this Agreement (excluding a breach of Section 5.5(c)) by the other Party where such breach is not cured within [**] ([**]) days following the other Party’s receipt of written notice of such breach;

 

(ii)           upon [**] ([**]) days written notice in the event the FDA or any other governmental regulatory authority takes any action that [**] the Product, or the Parties’ rights to promote, and Auxilium’s right to sell, the Product, as evidenced by [**], in each case, in the Territory;

 

(iii)          upon [**] ([**]) days written notice in the event there is any [**] for the Product in the Territory as evidenced by [**] in the Territory;

 

(iv)          immediately upon the bankruptcy or insolvency, or the making or seeking to make or arrange an assignment for the benefit of creditors of the other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, or the appointment of a receiver or trustee of such Party’s property that is not discharged within [**] ([**]) days;

 

(v)           immediately upon written notice delivered to the other Party following an [**];

 

(vi)          immediately upon written notice if the Parties fail to agree on a new Annual Baseline Net Sales Amount, Base Auxilium Marketing Expenses, GSK Marketing Expenses, and Auxilium Sales Support Expenses to be effective within [**] ([**]) days after [**] as required by Section 5.10(a);

 

(vii)         immediately upon written notice if the Parties fail to agree on a new Annual Baseline Net Sales Amount, Base Auxilium Marketing Expenses, GSK Marketing Expenses, and Auxilium Sales Support Expense to be effective within [**] ([**]) days after the [**], as required by Section 5.10(b).

 

(viii)        upon [**] ([**]) days written notice in the event of (1) the filing of federal or state criminal charges against the other Party or one of the other Party’s directors, officers or senior management employees relating to activities taken in connection with this Agreement, the promotion or marketing of such Party’s products, or an alleged violation of the Act and/or Applicable Health Care Laws or (2) the felony conviction of the other Party or one of the other Party’s directors, officers or senior management employees relating to activities taken in connection with this Agreement, the promotion or marketing of such Party’s products, or an alleged violation of the Act and/or Applicable Health Care Laws;

 

(ix)           upon [**] ([**]) days written notice delivered to the other Party upon the inability of a Party to perform its obligations under this Agreement due to a Force Majeure Event exceeding [**] days in [**];

 

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(x)            immediately upon written notice if the [**] of the Product for any [**] periods following the [**] fails to [**] a [**] for such [**] periods [**];

 

(xi)           immediately upon written notice if all of the Promotion Conditions have not been satisified by December 31, 2012; or

 

(xii)          immediately upon written notice of a breach of Section 5.5(c).

 

(b)           Auxilium shall have the right to terminate this Agreement and any licenses granted hereunder:

 

(i)            immediately upon written notice to GSK of GSK’s material breach of Section 2.4; or

 

(ii)           upon [**] ([**]) days written notice delivered to GSK following (1) Auxilium’s receipt of any new CIA provisions or GSK Policies delivered by GSK to Auxilium under this Agreement that [**] under this Agreement, or (2) GSK’s entry into any other settlement agreement with any governmental authority that relates in any way to an alleged breach of Laws and Regulations by GSK with respect to the Product, in each case during the Term.

 

(c)           GSK shall have the right to terminate this Agreement and any licenses granted hereunder:

 

(i)            after the [**] anniversary of the Effective Date, for any reason upon [**] days prior written notice to Auxilium (which notice may not be given prior to the [**] anniversary of the Effective Date);

 

(ii)           immediately upon prior written notice to Auxilium in the event [**];

 

(iii)          upon [**] ([**]) days written notice delivered to Auxilium following Auxilium’s inability to supply the Product for [**] ([**]) days [**] during any [**] period;

 

(iv)          immediately upon written notice to Auxilium of Auxilium’s material breach of Section 2.4;

 

(v)           upon [**] ([**]) days written notice delivered to Auxilium following (1) Auxilium’s entry into any CIA that [**] under this Agreement or (2) Auxilium’s entry into any other settlement agreement with any governmental authority that relates in any way to an alleged breach of Laws and Regulations by Auxilium with respect to the Product, in each case during the Term;

 

(vi)          immediately upon written notice to Auxilium upon the occurrence of [**];

 

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(vii)         upon [**] ([**]) days notice to Auxilium in the event of a Change of Control.

 

4.             Fees and Payments

 

4.1           Payment on Net Sales.  Subject to Section 5.8(a), Auxilium shall pay GSK, in consideration for the performance of its obligations hereunder, [**] percent ([**]%) of Incremental Net Sales (the “Promotional Payment”).  The amount of such Promotional Payment shall be determined and paid on a quarterly basis, and shall be calculated following each of the first three (3) calendar quarters of a Year by (A) subtracting the Quarterly Baseline Net Sales Amount from the Net Sales for such calendar quarter, and (B), if such amount is a positive number, multiplying such amount by [**] percent ([**]%).  No Promotional Payment for a calendar quarter shall be made if the Quarterly Baseline Net Sales Amount exceeds the Net Sales for such quarter.  The Promotional Payment to be paid by Auxilium following the fourth calendar quarter of each Year (or upon any termination of this Agreement that is effective other than at the end of a Year) shall be calculated by (X) subtracting the Annual Baseline Net Sales Amount from the Net Sales for such Year (or partial Year), and then (Y) multiplying such amount by [**] percent ([**]%), and then (Z) subtracting from such amount the aggregate amount of all Promotional Payments paid by Auxilium following the first three calendar quarters during such Year (or partial Year) (the “Reconciliation Amount”).  In the event the Reconciliation Amount is a negative number, upon submission by Auxilium of a written invoice to GSK, GSK shall pay to Auxilium the Reconciliation Amount within sixty (60) days following receipt of such invoice, unless GSK disputes the calculation of the Reconciliation Amount, and in such case, GSK shall pay to Auxilium all undisputed amounts within such sixty (60) day period.  For clarity, in no event shall the Reconciliation Amount to Auxilium be greater than the previous three (3) Promotional Payments paid by Auxilium to GSK resulting in a net payment to Auxilium for such Year.  The calculation of all Promotional Payments and all Reconciliation Amounts shall include reductions for GSK Marketing Expenses and any Incremental Marketing Spend as set forth in Sections 5.8(a) and 5.8(b).  Subject to Auxilium’s receipt of a written invoice from GSK, all Promotional Payments required to be paid by Auxilium shall be paid by Auxilium by the later of (a) sixty (60) days following the end of each calendar quarter and (b) fifteen (15) days after GSK has submitted a written invoice to Auxilium.  In the event that this Agreement is terminated other that at a Year end, the amount of any Promotional Payment owed to GSK will be calculated by subtracting the pro-rated Quarterly Baseline Net Sales Amount from the pro-rated Net Sales for such quarter, based on the number of days that have elapsed during such quarter immediately prior to the effective date of such termination.

 

4.2           Tail Payments.  Except as otherwise provided in this Section 4.2, GSK shall be entitled to receive the following additional payments from Auxilium (each a “Tail Payment,” and together the “Tail Payments”):

 

(a)           in the event there is [**] of this Agreement, (i) for each of the [**] periods following the Expiration Date, the lesser of (1) [**] percent ([**]%) of [**] for such [**] period and (2) [**] ([**]%) of the [**] with respect to [**], and (ii) for each of the [**] periods following the Expiration Date, the lesser of (1) [**] percent ([**]%) of the [**] for such [**] period and (2) [**] ([**]%) of the [**] with respect to [**]; or

 

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(b)           in the event this Agreement is terminated (1) [**] pursuant to Section [**] at any time, (2) by [**] pursuant to [**] after the [**] or (3) by [**] after the [**] due to [**] (the “Early Termination Date”), then for each of the [**] periods following the Early Termination Date, the lesser of (x) [**] percent ([**]%) of the [**] for such [**] period and (y) [**] percent ([**]%) of the [**] with respect to [**]; provided, however that, no Tail Payment shall be owed to GSK if [**] terminates this Agreement at any time pursuant to Section [**] as the result of [**].

 

Unless specifically required under Section 4.2(a) or 4.2(b), no Tail Payment shall be owed by Auxilium under this Agreement.

 

Notwithstanding any other provision of this Section 4.2, Auxilium shall not be obligated to pay any Tail Payment with respect to any period after the date, if any, on which GSK first promotes, markets, or sells [**].

 

The amount of such Tail Payment shall be determined and paid on a quarterly basis.  Subject to Auxilium’s receipt of a written invoice from GSK, all Tail Payments required to be paid by Auxilium shall be paid by Auxilium by the later of (a) sixty (60) days following the end of each calendar quarter and (b) fifteen (15) days after GSK has submitted a written invoice to Auxilium.

 

4.3           Past Due Amounts.  Either Party’s failure to make any required and undisputed payment to the other Party under this Agreement will constitute a material breach of this Agreement by such Party if such amount remains unpaid [**] after such Party receives written notice from the other Party that such amount has not been paid when due.  All amounts owing by a Party to the other Party pursuant to this Agreement that are not timely paid by such Party will bear interest from the due date at an annual interest rate equal to the lesser of (i) the Prime Rate plus [**] percent ([**]%) or (ii) the highest rate permissible by Laws and Regulations, with such interest accruing from the date the payment was originally due, and any late payment pursuant to this Section shall be credited first to interest and then to any outstanding amounts owing hereunder.  Such interest will not prejudice any rights and remedies of the other Party hereunder or under Laws and Regulations.

 

4.4           Effect of Termination on Payments.  The termination or expiration of this Agreement shall not affect either Party’s obligation to reimburse or pay the other Party any amount due and owing under this Agreement through the effective date of such termination or expiration.

 

4.5           Payments.  All payments under this Agreement shall be in U.S. dollars in immediately available funds, and, unless instructed otherwise by the receiving Party, shall be made via wire transfer to the account designated from time to time by the receiving Party.

 

4.6           Taxes.  All payments required to be paid to a Party pursuant to this Agreement shall be paid without deduction therefrom for withholding for, or on account of, any sales tax, use tax, or other similar tax (other than taxes imposed on, measured by, or credited against net income).  Unless otherwise required by Laws and Regulations, each Party shall be responsible for paying and reporting all of its own taxes and fees, including income taxes, payroll taxes,

 

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franchise taxes and all taxes and fees in connection with the Party conducting business in any jurisdiction.

 

4.7           Reports.

 

(a)           Within forty-five (45) days following the end of each of the first three (3) calendar quarters of each Year during the Term, Auxilium shall provide GSK with a written statement containing a calculation of the Net Sales for such quarter and for the year-to-date period through the end of such quarter and a calculation of the Promotional Payment for such quarter, with reasonable supporting detail.

 

(b)           Within fifty (50) days following the end of each calendar Year of the Term and within fifty (50) days following the end of each partial calendar Year of the Term upon expiration or earlier termination of the Agreement, Auxilium shall provide GSK with a written statement containing a calculation of the Net Sales for such Year and a calculation of the Promotional Payment and the Reconciliation Amount for such Year pursuant to Section 4.1, with reasonable supporting detail.

 

(c)           Within forty-five (45) days following the end of each quarter for which a Tail Payment is owed, Auxilium shall provide GSK with a written statement of the Net Sales for the calendar quarter and the amount of the Promotional Payment for the corresponding calendar quarter during the 12-month period immediately preceding the Expiration Date or Early Termination Date, as applicable, and a calculation of the Tail Payment for such quarter pursuant to Section 4.2.

 

5.             Co-Promotion Management

 

5.1           Joint Steering Committee.  Immediately following the Effective Date, Auxilium and GSK shall assemble a team of appropriate personnel from both Auxilium and GSK (the “Joint Steering Committee”) to plan and oversee the commercialization, promotional and scientific engagement practices relating to the Product in accordance with this Agreement and to periodically discuss any Compliance Disputes that may be referred to the Joint Steering Committee by the Compliance Committee, subject to Section 5.3(b).  The Parties will have the opportunity, through the Joint Steering Committee, to confer with each other on such sales, marketing, and promotional matters, and the Joint Steering Committee will have the ultimate decision making power with respect to the matters set forth in Section 5.2.  The Joint Steering Committee shall consist of an equal number of representatives from each of Auxilium and GSK, not to be less than four (4) representatives and not to exceed a total of eight (8) representatives.  A Party may change any of its representatives on the Joint Steering Committee at any time by giving written notice to the other Party; provided, however, that, without limiting the foregoing, the Parties acknowledge that a key objective with respect to membership in the Joint Steering Committee shall be preserving continuity.  Auxilium shall designate one (1) of its representatives on the Joint Steering Committee to serve as the chairperson of the Joint Steering Committee.  The Joint Steering Committee may, from time to time, include additional non-voting ad-hoc representatives from either Party on specific issues as the need arises.  As appropriate, the Joint Steering Committee may establish one or more sub-committees to consider matters that may arise between meetings of the Joint Steering Committee or matters that would be more

 

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effectively considered by a smaller committee.  Such sub-committees, however, shall have no authority to bind the Parties.

 

5.2           Responsibilities of the Joint Steering Committee.  In addition to the other functions and responsibilities of the Joint Steering Committee provided for in this Agreement, the Joint Steering Committee shall perform the following functions, subject to compliance with Section 2.4 in all respects:

 

(a)           Reviewing available quarterly gross sales, quarterly Net Sales, and other Product performance data as determined by the Joint Steering Committee;

 

(b)           Reviewing and approving new Promotional Materials or changes to existing Promotional Materials, subject to Section 5.5(d);

 

(c)           Reviewing coupon demand forecast and data on coupon usage / redemption;

 

(d)           Reviewing the efforts of sales representatives employed by, or on behalf of, GSK and Auxilium who engage in Product Details and other promotional efforts with respect to the Product to maintain desired frequency of Product Details and to avoid unintended duplication of Product Details;

 

(e)           Subject to Section 2.2, reviewing and approving the Annual Marketing Plan for the Product, including appropriate budgets for the provision of Samples;

 

(f)            Subject to Section 2.2, reviewing and approving the Annual Scientific Engagement Plan;

 

(g)           Reviewing the Parties’ respective training needs and training schedule;

 

(h)           Discussing Compliance Disputes referred to the Joint Steering Committee by the Compliance Committee;

 

(i)            Establishing monthly reporting forms related to each Party’s Product Detailing;

 

(j)            Discussing any changes to Product pricing;

 

(k)           Discussing the progress and results of any studies relating to the Product;

 

(l)            Reviewing medical inquiry procedures related to the Product that have been established by the Compliance Committee;

 

(m)          Discussing any events affecting the integrity or reputation of the Parties, in accordance with Section 7.8;

 

(n)           Discussing and approving any Auxilium Trademarks for use with the Product pursuant to Section 9.7; and

 

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(o)           Performing such other responsibilities as may be mutually agreed upon by the Parties in writing from time to time; provided, however, that, notwithstanding anything to the contrary in this Agreement, the Joint Steering Committee shall have no authority to (1) amend any provision of this Agreement; (2) determine any dispute related to the interpretation or performance of this Agreement; or (3) increase (with respect to GSK) or decrease (with respect to Auxilium) any obligation of the Parties, financial or otherwise.

 

5.3           Voting Procedures of Joint Steering Committee.

 

(a)           Each Party shall have one (1) vote on all matters.  In the event that the members of the Joint Steering Committee are unable to agree on any matter, such matter shall be submitted to the Chief Executive Officer of Auxilium and the GSK President of North America Pharmaceuticals, or their designees, who shall meet in person, by videoconference or by telephone within five (5) Business Days to review and resolve such matter.  If such executives of the Parties, using good faith efforts, are not able to resolve such matter, the chairperson of the Joint Steering Committee shall make a final decision with respect to such matter that shall be binding on the Parties, subject to GSK’s applicable termination rights set forth in Section 5.3(b).  For the avoidance of doubt, the chairperson of the Joint Steering Committee shall not have the authority to make a final decision related to those matters listed in Section 2.2.

 

(b)           Notwithstanding anything to the contrary contained in this Agreement, GSK shall have the [**] rights set forth in Section [**] if a decision by the Compliance Committee or the Joint Steering Committee is made without the consent of GSK and such decision results in:  (i) [**], (ii) [**], or (iii) [**] (each a “Reserved Matter”).

 

5.4           Meetings of the Joint Steering Committee.  Meetings of the Joint Steering Committee shall be held monthly for the first three months after the Effective Date, with the first meeting to occur within thirty (30) days following the Effective Date, and quarterly thereafter or more often as determined by the Joint Steering Committee.  All meetings may be held by teleconference or videoconference so long as all representatives participating in the meeting can hear one another.  The Parties will use commercially reasonable efforts to conduct at least one (1) face-to-face meeting of the Joint Steering Committee annually.  Minutes of each Joint Steering Committee meeting shall be transcribed and issued by a designee of the Joint Steering Committee within ten (10) Business Days after each meeting and shall be approved by the chairperson not later than the first order of business at the immediately succeeding Joint Steering Committee meeting.  Each Party shall bear its own expenses in connection with attending meetings of the Joint Steering Committee.  The Joint Steering Committee shall also establish a procedure for either (a) calling special interim meetings of the Joint Steering Committee in the event a need for Joint Steering Committee decisions arises between regularly scheduled meetings or (b) establishing a process for making such interim decisions.

 

5.5           Joint Co-Promotion Activities.  Subject to satisfaction of the Promotion Conditions in Section 2.2, Section 2.4 and the Overall Marketing Plan, each of Auxilium and GSK shall be responsible for performing the co-promotion activities described below (the “Joint Co-Promotion Activities”), in each case in accordance with the minimum activity levels established in this Agreement and in each Annual Marketing Plan.  Accordingly, except as

 

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otherwise provided in this Agreement, each Party shall fully bear all of the costs incurred by such Party in connection with such Party’s performance of the Joint Co-Promotion Activities.

 

(a)           Annual Marketing Plan.  Not less than ninety (90) days prior to the commencement of each Year, Auxilium shall share a draft of the Annual Marketing Plan with GSK.  Thereafter, in consultation with GSK through the Joint Steering Committee and subject to the terms of this Agreement, Auxilium will prepare the final Annual Marketing Plan for each Year, which will be presented to the Joint Steering Committee for its review and approval not less than thirty (30) days prior to the commencement of such Year.  Although the Parties intend that the Annual Marketing Plan will be more detailed in scope than the Overall Marketing Plan, each Annual Marketing Plan shall be consistent with the financial and other metrics set forth in the Overall Marketing Plan unless otherwise agreed by the Parties.  In the event  there is any inconsistency between any Annual Marketing Plan and the Overall Marketing Plan that is not agreed to by the Parties, the Overall Marketing Plan shall control.  Each Party shall have the sole and exclusive right to determine how to carry out its responsibilities under each Annual Marketing Plan, subject to Section 5.5(b) and 5.8(a).

 

(b)           Field Sales.  The Parties shall mutually agree upon the target audience and the monthly call reach and frequency objectives for each of the Parties’ sales organizations, and will agree upon which physicians each Party’s sales representatives will call upon, and the Parties will use their Commercially Reasonable Efforts to implement such agreements.  All healthcare providers in the target audience must be reasonably expected to write prescriptions for an approved use of the Product as it is indicated in the FDA-approved labeling.

 

(c)           Product Details.  Each Annual Marketing Plan will provide that (i) GSK will be obligated to perform no fewer than [**] Product Details per [**], which shall be distributed evenly throughout [**] of a [**] subject to the provisions of this Section 5.5(c) and prorated for any partial [**] in the Term (“GSK Minimum Details”), and (ii) Auxilium will be obligated to perform no fewer than [**] Product Details per [**], which shall be distributed evenly throughout [**] of a [**] subject to the provisions of this Section 5.5(c) and prorated for any partial [**] in the Term (“Auxilium Minimum Details”).  Each Party shall have [**] to cure any Permitted Shortfall that occurs in any [**], but at least [**] ([**]) of any Permitted Shortfall must be made up in the [**] immediately following the [**] in which the Permitted Shortfall occurs.  Product Details performed by a Party in a given [**] shall first be applied to the Minimum Details required for such [**].  Notwithstanding the foregoing, by the Expiration Date, each Party shall have performed the Minimum Details without any right to cure a Permitted Shortfall that exists as of the Expiration Date.  Each Party shall maintain records of each Product Detail by its sales force representatives using a call document that records the name and address of the member of the target audience and the date and position of the Product Detail, and shall supply a monthly record of the number of Product Details performed to the other Party within sixty (60) days of the end of each month in a form to be established by the Joint Steering Committee.

 

(d)           Promotional Materials.  From and after the date that all of the Promotion Conditions are first satisfied and during the Term, each Party shall promote the Product using only the Core Sales Aid, those Promotional Materials that are pre-approved and listed on Schedule 2.2, or other Promotional Materials approved pursuant to this Section 5.5(d), and, in

 

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each case, provided by Auxilium, at Auxilium’s expense in accordance with Section 5.8(a). Immediately following the Effective Date, the Parties shall form a joint Promotional Materials working group (the “PM Working Group”), comprised of representatives of Auxilium and of GSK, whose responsibility shall be to oversee the creation of any new, or changes to, Promotion Materials.  Any compliance matters brought before the PM Working Group shall be unanimously approved by the Parties prior to submitting such matter to the Joint Steering Committee and all other matters shall ultimately be decided by Auxilium.  The Promotional Materials must comply with (i) all Laws and Regulations, (ii) the [**], and (iii) relevant provisions of the CIAs that are attached hereto as Exhibit 2.4 or are otherwise provided in a timely manner to Auxilium in accordance with Section 2.4.  The Promotional Materials used by field sales force representatives may not include any pricing information (i.e., wholesale acquisition costs or any discounts, rebates, or other price concessions) regarding the Product.

 

(e)           Samples.  The Joint Steering Committee shall determine the appropriate budget for the provision of Samples annually.  All Sample distribution and reporting shall be conducted by Auxilium in accordance with Laws and Regulations.  GSK shall comply with Auxilium’s procedures for requesting shipment of Samples of Product to physicians, which written procedures are attached hereto as Exhibit 5.5(e).  Auxilium shall use Commercially Reasonable Efforts to fulfill requests for shipments of Samples in accordance with each Annual Marketing Plan.  Auxilium will maintain written procedures to ensure compliance with all Laws and Regulations relating to the distribution of, and accountability for, Samples.  This compliance includes obtaining written requests, obtaining the licensed healthcare professional’s signature for all Samples delivered, ensuring validity of the practitioner’s state license and storage of all Samples under Auxilium’s control at label conditions.

 

(f)            Labeling.  The Parties shall promote the Product in compliance with the FDA-approved product labeling and all written, printed or graphic material affixed to the container or physically accompanying the Product.  Auxilium shall promptly notify GSK of all Product labeling modifications, but in any event within one (1) Business Day of any such modification.

 

(g)           Sales Force Training.  Each Party shall train (or have trained) its own sales force and provide periodic on-going training on the Product to its sales force in accordance with the Training Plan.  Such training will address, at a minimum, compliance with Laws and Regulations and [**].  No sales representative employed by either Party will Product Detail without having undergone such training.  Each Party shall bear its own expenses in connection with all training efforts and meetings for its sales force.  Auxilium shall (1) provide to GSK copies of training materials, (2) up to [**] per [**], at GSK’s reasonable request, train a reasonable number of GSK sales force trainers, in each case to the extent commensurate with Auxilium’s internal training efforts, and (3) reasonably in advance thereof, notify GSK of any Auxilium internal Product or compliance training efforts so as to permit GSK, at GSK’s expense, to attend and participate in any such internal training efforts.  GSK shall provide to Auxilium copies of its training materials relating to compliance matters, and shall up to [**] per [**] train a reasonable number of Auxilium sales force trainers in compliance policies and procedures, in each case to the extent commensurate with GSK’s internal training efforts with respect to such policies and procedures.  Following this initial training, each Party shall periodically make

 

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available its trainers to train the other Party’s trainers upon reasonable request by such Party, and solely to the extent commensurate with their internal training efforts.

 

(h)           Product Manager.  Auxilium and GSK will each identify an individual with appropriate authority to serve as the primary contact with the other Party about the Product and the Parties’ relationship under this Agreement (each a “Product Manager”).  Each Party’s Product Manager will generally be responsible for overseeing the day-to-day activities of each of the respective Parties with respect to the commercialization of the Product and coordinating each respective Party’s internal resources in order to facilitate collaboration between the Parties under this Agreement.

 

(i)            Communications with Field Sales Representatives.  Each Party shall only communicate with designated representatives of the other Party (including the members of the Joint Steering Committee and the other Party’s Product Manager).  Notwithstanding the foregoing, nothing herein shall restrict the field sales teams from communicating directly with one another.

 

5.6           Other Co-Promotion Matters.

 

(a)           Booking of Sales Revenue.  Auxilium shall record on its books all revenue from gross and Net Sales of the Product, which shall be recorded in accordance with GAAP.

 

(b)           Packaging.  Auxilium shall have the responsibility for selecting and approving all packaging materials, subject to Laws and Regulations and [**].

 

(c)           Trademarks.  Auxilium shall approve the names, design, and usage in the Territory of all Auxilium Trademarks associated with the Product.

 

(d)           Field Sales Representatives.  Except with the prior written consent of the other Party, all sales representatives who are responsible for Product Details shall be employees of GSK or Auxilium, as applicable.  All sales representatives employed by each Party who are responsible for Product Details shall not be Ineligible or Debarred Persons and shall have any and all licenses, permits, and insurance or other coverage as may be required to enable the sales representatives to perform under this Agreement.  All sales representatives shall be hired and recruited by each Party in accordance with Laws and Regulations.  Prior to any GSK or Auxilium sales representative performing a Product Detail, each Party will ensure that such individuals (a) have not been listed (1) as an excluded Person on the Office of Inspector General’s List of Excluded Individuals/Entities (2) on the General Services Administration Excluded Parties List, (3) FDA Clinical Investigator enforcement lists, including the Disqualified/Totally Restricted List, Restricted List, or Adequate Assurances List, or (4) FDA Debarment List (b) have passed a criminal background check conducted by a firm reasonably selected by a Party, (c) have not been debarred, nor be currently under investigation by the FDA for debarment action or pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C. § 335a et seq.), (d) have passed a drug screening test administered by a firm reasonably selected by a Party, (e) have successfully passed a driving record screening conducted by  a firm reasonably selected by a Party, and (f) have been evaluated under all other procedures required

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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by [**] background screening process, a copy of which is attached to this Agreement as Exhibit 5.6(d).

 

(e)           Status of Field Sales Representatives.  Each Party acknowledges and agrees that its sales representatives are not employees of the other Party or any of the other Party’s Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any “employee benefit plans” (as such term is defined in section 3(3) of ERISA) that are sponsored by the other Party or the other Party’s Affiliates or that are offered from time to time by the other Party or the other Party’s Affiliates to its own employees (the “Benefit Plans”).  All matters of compensation, benefits and other terms of employment for each Party’s sales representatives shall be solely a matter between GSK and GSK’s sales representatives and Auxilium and Auxilium’s sales representatives.  Each Party shall not be responsible to the other Party (or the other Party’s sales representatives) for any compensation, expense reimbursements or benefits (including vacation and holiday remuneration, healthcare coverage or insurance, life insurance, severance or termination of employment benefits, pension or profit-sharing benefits and disability benefits), payroll-related taxes or withholdings, or any governmental charges or benefits (including unemployment and disability insurance contributions or benefits and workmen’s compensation contributions or benefits) that may be imposed upon or be related to the performance by the other Party (or the other Party’s sales representatives), all of which shall be the sole responsibility of GSK with respect to GSK’s sales representatives or Auxilium with respect to Auxilium’s sales representatives, as applicable, even if it is subsequently determined by any court or governmental agency that any such individual may be an employee or a common law employee of the other Party or any of the other Party’s Affiliates or is otherwise entitled to such payments and benefits.

 

(f)            Sales Incentive Plan.  Each Party may use its own method of compensating its sales representatives throughout the Term of this Agreement, subject to such Party’s compliance with all Laws and Regulations.

 

5.7           Annual Scientific Engagement Plan.  In consultation with GSK through the Compliance Committee and subject to the terms of this Agreement, Auxilium will prepare the Annual Scientific Engagement Plan for each Year, which will be presented to the Joint Steering Committee for its approval not less than thirty (30) days prior to the commencement of such Year.

 

5.8           Expenses.

 

(a)           Each party shall bear the full cost of its respective sales force.  Auxilium shall solely incur and be responsible for paying the costs (but not GSK’s sales force costs) for the marketing of the Product, subject to and in accordance with the budgets provided in each Annual Marketing Plan.  In addition to those marketing expenses that will be incurred by Auxilium in Auxilium’s continued marketing of the Product in accordance with the Overall Marketing Plan (the “Base Auxilium Marketing Expenses”), additional amounts related to marketing expenses shall be paid by Auxilium and allocated to support GSK’s promotion of the Product (the “GSK Marketing Expenses”) and shall be agreed each year by the Parties in the Annual Marketing Plan; provided, however, that (i) expenses will not constitute GSK Marketing Expenses in any applicable period unless and until Auxilium has incurred all of the Base Auxilium Marketing

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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Expenses for such period, and (ii) in the absence of a written agreement by the Parties, the GSK Marketing Expenses shall be set at $[**] per [**] pro rated according to [**] (or such pro rata amount of $[**] for a [**] that includes less than [**]).  The GSK Marketing Expenses, determined quarterly, but not the Base Auxilium Marketing Expenses, shall be subtracted from the Incremental Net Sales amount before calculating each quarterly Promotional Payment due to GSK.

 

(b)           In the event that GSK requests, including through its field sales force representatives and including requests for Samples, that Auxilium spend more (or otherwise causes Auxilium to incur more) than the budgeted amount of the Base Auxilium Marketing Expenses and the budgeted amount of the GSK Marketing Expenses for any period, and the Parties do not mutually agree to increase the GSK Marketing Expenses as provided in the Annual Marketing Plan (such additional amount that is not agreed to, the “Incremental Marketing Spend”), the Promotional Payment for such period shall be reduced by the amount of the Incremental Marketing Spend incurred during such period.

 

(c)           Within twenty (20) Business Days following the end of each calendar month during the Term, Auxilium will provide GSK with a report setting forth the amounts, if any, of Base Auxilium Marketing Expenses, GSK Marketing Expenses and Incremental Marketing Spend incurred during such month and for the Year to date.

 

(d)           From and after the Effective Date and for so long as there is no [**], with respect to each [**] during the Term Auxilium shall incur and spend, and be solely responsible for, a minimum amount equal to the Auxilium Sales Support Expenses in support of the sale of the Product by the Parties.  Such amount shall be prorated for any partial calendar Year in the Term.

 

5.9           Pricing.  Auxilium shall determine pricing for the Product.  Auxilium shall notify GSK of all changes in the price of the Product within three (3) Business Days of any change.  Notwithstanding the foregoing, Auxilium shall not make any material changes to the pricing assumptions of the Product as set forth in the Overall Marketing Plan without prior discussion at the Joint Steering Committee.

 

5.10         Amendment to Annual Baseline Net Sales Amount.

 

(a)           Promptly following [**], the Parties shall negotiate in good faith a revised Annual Baseline Net Sales Amount (and the applicable Quarterly Baseline Net Sales Amounts), Base Auxilium Marketing Expenses, GSK Marketing Expenses, and Auxilium Sales Support Expenses to become effective no later than thirty (30) days after the [**].

 

(b)           Promptly following [**], the Parties shall negotiate in good faith a revised Annual Baseline Net Sales Amount (and the applicable Quarterly Baseline Net Sales Amounts), Base Auxilium Marketing Expenses, GSK Marketing Expenses, and Auxilium Sales Support Expenses to become effective no later than thirty (30) days after the [**].

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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5.11         Compliance Committee.

 

(a)           Immediately following the Effective Date, the Parties shall form a Compliance Committee (the “Compliance Committee”) whose responsibility shall be to, subject to Section 2.4 in all respects:  (i) oversee compliance activities relating to (1) the Parties’ commercialization efforts under this Agreement and (2) the Annual Scientific Engagement Plan, (ii) advise the Joint Steering Committee on compliance-related issues and compliance monitoring activities, (iii) oversee and monitor the Parties’ compliance training efforts as they relate to the Product, and (iv) subject to Section 5.3(b), consider and attempt to resolve any dispute concerning issues related to compliance with Laws and Regulations, GSK Policies, Auxilium policies and procedures or any CIA and arising out of promotional and Product Detailing activities, including sales, marketing, Product Samples, medical affairs and training practices, sales training materials, the contents of coupons, patient assistance/reimbursement programs, Promotional Materials, Scientific Materials and training materials, and any related FDA or other governmental reporting in the Territory (each such dispute, a “Compliance Dispute”).

 

(b)           The Compliance Committee shall consist of two (2) representatives from each of Auxilium and GSK.  Auxilium shall designate one (1) of its representatives on the Compliance Committee to serve as its chairperson.  The Compliance Committee may from time to time include additional non-voting ad-hoc representatives from either Party on specific issues as the need arises.  Each Party shall have one (1) vote on all matters.  In the event that the members of the Compliance Committee are unable to agree on any matter set forth in Section 5.11(a) above, such matter shall be submitted to the Joint Steering Committee for resolution, subject to Section 5.3(b).

 

(c)           Meetings of the Compliance Committee shall be held at least once per quarter commencing with the first meeting to occur within thirty (30) days following the Effective Date or at such other frequency as is determined by the Compliance Committee.  The location of Compliance Committee meetings and whether to hold them via teleconference and/or videoconference or in person shall be determined by the Compliance Committee, provided that one Party does not bear an undue travel burden.  Each Party shall bear its own expenses in connection with attending meetings of the Compliance Committee.  The Compliance Committee shall also establish a procedure for either (i) calling special interim meetings of the Compliance Committee in the event a need for Compliance Committee decisions arises between regularly scheduled meetings or (ii) establishing a process for making such interim decisions.

 

6.             Manufacturing and Supply

 

6.1           Auxilium Responsibilities.

 

(a)           Auxilium shall have, at its sole cost and expense, the sole responsibility for the manufacture, fill, finish, supply, testing, labeling, packaging, release, storage and delivery of the Product.  Auxilium shall use its Commercially Reasonable Efforts to manufacture or have manufactured and to supply or have supplied the quantities of the Product required to meet market demand in the Territory during the Term.

 

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(b)           Auxilium warrants that Product for sale or distribution in the Territory shall be manufactured, filled, finished, packaged, labeled, tested, released, stored, distributed, sold and offered for sale in compliance with the Product NDA, Specifications, cGMP, all Laws and Regulations, and the requirements of this Agreement.  Auxilium further warrants that Product has not been, is not and shall not be adulterated or misbranded within the meaning of the Act.

 

(c)           Auxilium shall ship Samples of the Product directly to physicians in accordance with the annual budget for the provision of Samples in each Annual Marketing Plan and in accordance with Auxilium’s current practices and procedures and Laws and Regulations.  The Parties will maintain all records required by Laws and Regulations in respect to Samples and, subject to receipt of necessary information from GSK, Auxilium shall be solely responsible for the filing of any necessary reports to the FDA, as required by Laws and Regulations.

 

7.             Regulatory, Safety and Surveillance

 

7.1           Regulatory Matters.

 

(a)           Responsibility.  All regulatory matters in the Territory regarding the Product shall remain under the exclusive control of Auxilium, including responsibility for all communications with the FDA related to the Product, and Auxilium shall have sole responsibility to seek and/or obtain any necessary approvals of any label, labeling (including changes thereto), package inserts, and Promotional Materials used in connection with the Product in the Territory, and for determining whether the same requires approval.  Auxilium shall have sole responsibility for the submission of Promotional Materials to the FDA’s Office of Prescription Drug Promotion.  Auxilium shall ensure that the incidence, severity and/or nature of Adverse Events are accurately reflected in the package inserts for the Product to the extent required under, and in accordance with, Laws and Regulations.

 

(b)           Permits.  Auxilium shall be responsible for and maintain all regulatory and governmental permits, licenses and approvals that may be necessary to manufacture, ship, sell, store and market the Product in the Territory.

 

(c)           Reporting.  Auxilium shall be responsible for any reporting of matters, or other communications with the FDA, regarding the Product, including Adverse Events, to the FDA and other relevant regulatory authorities, in accordance with Laws and Regulations.  Auxilium shall provide GSK with copies of:  [**]  submitted to the FDA regarding the Product, within [**]  ([**]) [**]  submitted by Auxilium to the FDA, within  [**]  ([**])  [**], with redactions of any Auxilium proprietary information unrelated to this Agreement, including  [**]  and related to the Product in the Territory, within [**]  ([**]) [**]  and related to the Product within  [**]  ([**])  [**]  and related to the Product within [**]  ([**])  [**].  Auxilium shall otherwise provide GSK with copies of its reports to the FDA relating to the Product promptly upon request of GSK.  GSK shall promptly, but in no event later than one (1) Business Day, notify Auxilium of any Adverse Event of which it should become aware.

 

(d)           Actions by Governmental Authorities.  Auxilium shall promptly, but in no event later than [**], notify GSK of any FDA inspections, proposed regulatory actions,

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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investigations or material requests, and any corrective actions initiated by Auxilium with the FDA, in each case, relating to the Product, and Auxilium shall provide GSK with [**].

 

(e)           Compliance with Risk Evaluation and Mitigation Strategy.  Auxilium shall be responsible for complying with the requirements of the Risk Evaluation and Mitigation Strategy (the “REMS”) for the Product as updated from time to time and shall, through the Compliance Committee, discuss the REMS, and any changes thereto, with GSK.  GSK shall comply with any requirements of the REMS that are applicable to its activities hereunder.

 

(f)            GSK Involvement.  Subject to Section 7.4, GSK shall not, without the prior written consent of Auxilium, unless so required by Laws and Regulations, correspond or communicate with the FDA or with any other governmental authority, concerning the Product, or otherwise take any action concerning any authorization or permission under which the Product is sold.  GSK shall provide to Auxilium, promptly upon receipt, copies of any communication from the FDA or other governmental authority related to the Product.  If GSK is advised by its outside counsel that it must communicate with the FDA or other governmental authority, then GSK shall so advise Auxilium and GSK shall, if the Laws and Regulations permit, comply with any and all reasonable direction of Auxilium concerning any meeting or communication with the FDA or other governmental authority.

 

7.2           Pharmacovigilance Agreement.  The Parties shall enter into a separate and mutually agreeable Pharmacovigilance Agreement prior to the GSK First Promotion Date.

 

7.3           Studies.  Auxilium shall retain all rights and responsibilities with respect to, and shall bear all costs of, all matters relating to the support for, or conduct of, investigator-initiated studies or any clinical studies, including post-approval studies, or other studies, including health economics and outcomes research and Phase IV studies, with respect to the Product.  Any such studies will be performed in compliance with Good Clinical Practice.  Auxilium shall keep GSK informed of the conduct and results of such studies through regular reports at meetings of the Joint Steering Committee.

 

7.4           Sunshine Act Reporting.  Auxilium shall be responsible for the reporting of matters required under the Sunshine Act and related state laws, if any, relating to the commercialization and promotion of the Product by Auxilium and GSK.  GSK shall promptly provide to Auxilium all information that Auxilium notifies GSK in writing is required to be reported by Auxilium pursuant to the Sunshine Act or related state laws in connection with GSK’s commercialization and promotion of the Product, in a commercially reasonable electronic format designated by Auxilium.  Notwithstanding the foregoing, GSK reserves the right to report matters as required under the Sunshine Act, related state laws or in accordance with GSK’s voluntary reporting policies.  Auxilium shall promptly provide to GSK all reasonable information reasonably requested by GSK to enable GSK to fulfill its reporting obligations under the Sunshine Act, related state laws or GSK’s voluntary reporting policies; provided  that GSK will provide Auxilium with excerpted copies of any such reports as they relate to the Product prior to filing thereof.

 

7.5           Government Price Reporting.  With respect to the Product in the Territory, Auxilium shall be responsible for any and all price reporting, payment and rebate obligations

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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including average manufacturer price, best price, average sales price, non-federal average manufacturer price, and federal ceiling prices, and best price, under government healthcare programs including Medicare, Medicaid, 340B, Tricare, or VA, and any successor government program, including the accuracy and completeness of all reports relating thereto (“Government Price Reporting”).

 

7.6           Medical Inquiries.  Auxilium shall respond to all reasonable requests for medical information.  Such responses shall be made in accordance with Laws and Regulations, as well as the FDA’s Draft Guidance for Industry:  Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices, issued in December 2011.  Promptly after the Effective Date, the Parties, through the Compliance Committee, shall establish procedures in accordance with the applicable portions of Auxilium’s processes and standard operating procedures, to enable GSK to send such requests to specific parties.

 

7.7           Recalls and Market Withdrawals.  In the event Auxilium or GSK should become aware of information that may require a recall, field alert, Product withdrawal or field correction arising from any defect in the Product (collectively, an “Market Event”), it shall immediately notify the other Party in writing.  To the extent reasonably practicable prior to initiating a Market Event in the Territory and in any event within [**] thereafter, Auxilium shall notify GSK of its intent to initiate a Market Event and, to the extent reasonably practicable, provide GSK a reasonable opportunity to comment on the merits or manner of such Market Event; provided, however, that Auxilium will have the sole right to determine the response to any Market Event and shall have sole responsibility for carrying out any such response.  Auxilium will bear all costs of any action taken with respect to any Market Event, including costs associated with any recall, withdrawal or stock recovery (including mailings to health care professionals).  The Parties acknowledge and agree that GSK shall have no liability for any Market Event and Auxilium shall indemnify GSK for any costs incurred under this Section 7.7.

 

7.8           Events Affecting Integrity or Reputation.  During the Term, the Parties shall notify each other immediately of any circumstances of which they are aware and which could impair the integrity and reputation of the Product or if a Party is threatened by the unlawful activity of any Third Party in relation to the Product, which circumstances shall include, by way of illustration, deliberate tampering with or contamination of the Product by any Third Party as a means of extorting payment from the Parties or another Third Party.  In any such circumstances, the Parties shall use Commercially Reasonable Efforts to limit any damage to the Parties and/or to the Product with the understanding that the health and welfare of patients is of foremost importance.  The Joint Steering Committee shall promptly call a meeting to discuss and resolve such circumstances.

 

8.             Audit Rights; Access to Records

 

8.1           Product Detailing and Samples Audits.  Each of Auxilium and GSK shall keep complete and accurate records of its respective Product Details for the Product by sales representatives, and, in the case of Auxilium, records related to Product Samples.  Each Party shall have the right, at such Party’s expense, through an independent certified public accountant or like person reasonably acceptable to the other Party, upon execution of a confidentiality agreement, to examine such records and documentation during regular business hours upon

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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reasonable written notice during the Term of this Agreement and for two (2) Years thereafter; provided, however, that (a) such examination shall not take place more often than [**] per [**] and shall not cover such records for more than that portion of the year in which the audit takes place and the two (2) preceding years (but not for any period prior to the Effective Date, for any period after the Term, or with respect to any period that has previously been audited) and (b) such accountant shall report to the Party conducting the audit only such information as is required to be disclosed under this Agreement and in a summary fashion as is necessary to report such Third Party’s conclusions.  All such information disclosed or generated by the auditor shall be deemed Confidential Information of the Party being audited.  All costs and expenses incurred in connection with performing audits under this Section 8.1 shall be paid by the Party requesting the audit; provided, however, that the Party being audited shall reimburse the Party conducting the audit for such reasonable out-of-pocket costs and expenses in the event the audit reveals material noncompliance with this Agreement.

 

8.2           Compliance Audits.  Each Party shall have the right, at such Party’s expense, through an independent Third Party, upon execution of a confidentiality agreement, to examine, at [**] during the Term of the Agreement and for two (2) Years thereafter and upon reasonable written notice, any and all Compliance Records of the other Party.  All such information disclosed under this Section 8.2 shall be deemed Confidential Information of the Party being audited; provided, however, that the Party being audited shall reimburse the Party conducting the audit for such reasonable out-of-pocket costs and expenses in the event the audit reveals material noncompliance with this Agreement.

 

8.3           Financial Audits.  Auxilium shall keep complete and accurate records of the Net Sales of the Product, and any other reimbursable expenses.  GSK shall have the right, at GSK’s expense, through an independent certified public accountant or like person reasonably acceptable to Auxilium, upon execution of a confidentiality agreement, to examine such records during regular business hours upon reasonable written notice during the Term of this Agreement and any period during which a Tail Payment is due to GSK and for two (2) years thereafter; provided, however, that (a) such examination shall not take place more often than [**] per [**] and shall not cover such records for more than that portion of the year in which the audit takes place and the two (2) preceding years (but not for any period prior to the Effective Date or with respect to any period that has previously been audited), and (b) such accountant shall report to GSK only such information as is required to be disclosed under this Agreement and in a summary fashion as is necessary to report such Third Party’s conclusions.  All such information disclosed or generated by the auditor shall be deemed Confidential Information of Auxilium.  Subject to Section 4.3, any adjustments required as a result of overpayments or underpayments identified through GSK’s exercise of audit rights shall be made by subtracting or adding, as appropriate, amounts from or to the next Promotional Payment or Tail Payment in accordance with Section 4.1 and Section 4.2 or, if no further Promotional Payments or Tail Payments are due, by payment to GSK after identification of such adjustment within sixty (60) days of Auxilium’s receipt of a written invoice from GSK.  All costs and expenses incurred in connection with performing audits under this Section 8.3 shall be paid by GSK, provided, however, Auxilium shall reimburse GSK for reasonable out-of-pocket costs and expenses in the event the audit reveals an error of overstatement or understatement equal to or exceeding [**] in the numbers reported in any Year.  In the event that a Party disputes an invoice or other payment obligation under this Agreement, such Party shall timely pay the amount of the invoice or other

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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payment obligation that is not in dispute, and the Parties shall resolve such dispute in accordance with Article 17 and neither Party shall be deemed to be in breach of this Agreement during the pendency of such dispute.

 

8.4           Access to Records.  During the Term of this Agreement and for six (6) Years thereafter and with respect to the records maintained by each Party under Sections 8.1, 8.2 and 8.3, each Party shall have the right, at such Party’s expense, through an independent Third Party, upon execution of a confidentiality agreement, during regular business hours and upon reasonable written notice, to reasonably request, access and copy such records of the other Party solely to comply with any governmental authority inquiry, investigation, or  proceeding.

 

9.             Intellectual Property

 

9.1           Ownership of Intellectual Property.  Each Party shall have and retain sole and exclusive right, title and interest in and to all inventions, discoveries, writings, trade secrets, know-how, methods, practices, procedures, engineering information, designs, devices, improvements, manufacturing information  and other technology, whether or not patentable or copyrightable, and any patent applications, patents, or copyrights based thereon (“Inventions”) that are made, discovered, conceived, reduced to practice or generated by such Party (or its employees or representatives).  The Parties shall jointly own, without any duty to account, the right, title and interest in and to any Inventions made, discovered, conceived, reduced to practice or generated jointly  by the Parties (or their employees or representatives); provided  that such joint Inventions do not relate to the Product or the active ingredients in the Product.  Auxilium shall solely own all right, title and interest in and to all joint Inventions relating to the Product or the active ingredients in the Product.  GSK shall not represent to any Third Party that it has any proprietary or property right or interest in the Product, or in any patent relating thereto, or in any trademark used in connection therewith.

 

9.2           Patent Prosecution.  Auxilium, at its expense, shall have responsibility for filing, prosecution and maintenance of all Auxilium Patents in the Territory and for all joint Inventions relating to the Product or the active ingredient in the Product.  Each Party shall hold all non-public information disclosed to it under this Section as confidential subject to the provisions of Article 10.  With respect to any jointly-owned Inventions that do not relate to the Product or the active ingredients of the Product referred to in Section 9.1, both Parties shall cooperate in the patent prosecution and maintenance of such Inventions and shall share the costs for such prosecution and maintenance; provided, however, that if either Party decides not to prosecute or maintain any jointly-owned Inventions in any country, such Party shall assign its interest in such specific Inventions to the other Party in such country free of charge.

 

9.3           Notification of Patent Litigation.  In the event of the institution of any suit by a Third Party against Auxilium or GSK for patent infringement involving the manufacture, use, sale, license, marketing or promotion of the Product anywhere in the Territory during the Term, the Party sued shall promptly notify the other Party in writing.

 

9.4           Patent Infringement.  In the event that after the Effective Date Auxilium or GSK becomes aware of actual or threatened infringement of an Auxilium Patent as such infringement relates to the Product anywhere in the Territory, that Party shall promptly notify the other Party

 

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in writing.  Auxilium shall investigate and/or bring an infringement action against any Third Party as it reasonably determines to be appropriate.  Auxilium shall have full control over the conduct of such investigations and litigation, including the settlement thereof.  The cost of such investigation and litigation shall be borne entirely by Auxilium, with Auxilium being entitled to the entire proceeds, if any, of such litigation.  GSK shall reasonably assist Auxilium and reasonably cooperate in any such investigation and litigation at Auxilium’s request and expense.

 

9.5           Title to Trademarks.  The ownership and all goodwill from the use of any Auxilium Trademarks shall at all times vest in and inure to the benefit of Auxilium.  Except as expressly provided in this Agreement or as mutually agreed by the Parties, neither Party shall use the Trademarks of the other Party for any purpose.

 

9.6           Trademark License.  Auxilium grants to GSK, during the Term, an irrevocable (except as expressly provided in this Agreement), royalty-free, nonexclusive, non-transferable (except as set forth in Section 14), non-sublicensable license to use the Auxilium Trademarks in the Territory during the Term in connection only with the marketing and promotion of the Product as contemplated in this Agreement, subject to Auxilium retaining full rights to use the Auxilium Trademarks in the Territory, and without limiting in any way Auxilium’s rights with respect to the Auxilium Trademarks outside the Territory.

 

9.7           Maintenance of Trademarks.  Auxilium agrees to search, file, register and maintain a registration for the Auxilium Trademarks in the Territory for the Term of this Agreement and for the period of time during which GSK is entitled to receive any Tail Payments.  Such expenses incurred in connection with the Auxilium Trademarks shall be paid solely by Auxilium.  In the event that the Auxilium Trademarks are not available for use and registration in connection with the Product in the Territory due to a rejection of the trademark by a government agency, actual or threatened opposition, cancellation or litigation as to use and/or registration of the Auxilium Trademarks by a Third Party, and/or a decision by the Joint Steering Committee that use of the Auxilium Trademarks is likely to cause confusion with another’s trademark, Auxilium shall provide an alternate Auxilium Trademark and shall develop, search, file, register and maintain such alternate Auxilium Trademark at Auxilium’s sole expense, provided that the selection of such alternate Auxilium Trademark shall be made by the Joint Steering Committee in accordance with Section 5.2.

 

9.8           Notification of Trademark Litigation.  In the event of the institution of any suit by a Third Party against Auxilium or GSK for trademark infringement involving the marketing, promotion or sale of the Product in accordance with the Annual Marketing Plan in the Territory, the Party sued shall promptly notify the other Party in writing.

 

9.9           Trademark Infringement.  In the event that Auxilium or GSK becomes aware of actual or threatened infringement of an Auxilium Trademark anywhere in the Territory, that Party shall promptly notify the other Party in writing.  Auxilium shall investigate and shall have the sole right to bring an infringement and/or opposition or cancellation action against a Third Party.  Auxilium shall have full control over the conduct of such investigations and litigation, including the settlement thereof, and the cost of such investigation and litigation shall be borne entirely by Auxilium, with Auxilium being entitled to the entire award or judgment, if any,

 

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arising from such litigation.  GSK shall reasonably assist Auxilium and cooperate in any such investigation and litigation at Auxilium’s request and expense.

 

9.10         Information and Settlements.  Auxilium shall keep GSK informed of the status of any patent or trademark infringement litigation or settlement thereof concerning the Product, Auxilium Patents or the Auxilium Trademarks to which GSK is entitled to be notified pursuant to this Article 9; provided  however, that no settlement or consent judgment or other voluntary final disposition of any suit defended or action brought pursuant to this Article 9 shall be entered into without the consent of GSK if such settlement shall require GSK to make a monetary payment.

 

10.           Confidentiality

 

10.1         Disclosure of Know-How.  To the extent that Auxilium has disclosed, or in the future discloses, to GSK any Know-How, GSK shall not acquire any ownership rights in such Know-How by virtue of this Agreement or otherwise.

 

10.2         Confidential Information.

 

(a)           Confidentiality.  Each Party (the “Recipient”) may receive or have access to certain Confidential Information of the other Party (the “Discloser”).  For purposes of this Agreement, “Confidential Information” means any information disclosed by the Discloser to the Recipient, whether technology-related or business-related, furnished after the Effective Date and irrespective of the form of communication, that is reasonably considered by a Party to be competitive, confidential or proprietary in nature.  The mere existence of this Agreement (including its title and the Parties’ identities) is not confidential.  The specific terms of this Agreement, however, are Confidential Information of both Parties and will not be disclosed by GSK or Auxilium except:  (x) to any Third Party proposing to enter into a business transaction with a Party, but only to the extent reasonably necessary for carrying out the proposed transaction and only under terms of a written confidentiality agreement that limits the disclosure of this Agreement’s terms to personnel necessary to carry out the proposed transaction or (y) each Party shall have the right to disclose the terms and conditions of this Agreement to its attorneys and to its bankers, auditors, and significant investors on an “as-needed” basis so long as any such parties are subject to written obligations of confidentiality at least as stringent as those set forth in this Section 10.

 

(b)           Protection of Confidential Information.  During the Term and for a period of five (5) years thereafter, Auxilium and GSK shall not use or disclose to Third Parties any Confidential Information received from the other Party or otherwise developed or attained (including during the Term or during any period in which the Parties have audit rights pursuant to Article 8) by either Party in the performance of activities in furtherance of this Agreement without first obtaining the written consent of the Discloser, except as may be otherwise provided in, or required in order for a Party to fulfill its obligations under, this Agreement.  The Recipient will be responsible for any breach of this Agreement by it or its employees.  Without limiting the foregoing, the Recipient will protect the Discloser’s Confidential Information by using efforts at least as great as the precautions the Recipient takes to protect its own Confidential Information

 

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from unauthorized use or disclosure, and in any event such efforts will not be less than are reasonably necessary to maintain the confidentiality of the Discloser’s Confidential Information.

 

(c)           Exclusions.  The foregoing confidentiality obligations will not apply to any Confidential Information that the Recipient demonstrates:

 

(i)            is or becomes a matter of public knowledge (other than by breach of this Agreement by the Recipient or its Affiliates or its or their Affiliates, agents or advisors);

 

(ii)           is disclosed in response to a valid order of a court of competent jurisdiction or other governmental authority of competent jurisdiction; provided, however, that the Recipient shall, if legally permissible, first have given notice to the Discloser and given the Discloser a reasonable opportunity to quash such order or to obtain a protective order requiring that the Confidential Information or documents that are the subject of such order be held in confidence by such court or governmental authority or, if disclosed, be used only for the purposes for which the order was issued; and provided  further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in such response to such court or governmental order;

 

(iii)          is required by Laws and Regulations to be disclosed; provided, however, that the Recipient shall, if legally permissible, first have given notice to the Discloser and given the Discloser a reasonable opportunity to obtain a protective order requiring that the Confidential Information or documents that are required by Laws and Regulations to be disclosed be held in confidence by the applicable governmental authority or, if disclosed, be used only for the purposes for which Laws and Regulations requires; and provided  further that if a protective order is not obtained, the Confidential Information disclosed shall be limited to that information which is legally required to be disclosed by such governmental authority;

 

(iv)          was already known to it or was in its possession at the time of disclosure;

 

(v)           was independently developed by persons in its employ without the use of such information; or

 

(vi)          is disclosed to the Recipient by a Third Party having the right to do so and who was not known to the Recipient to be bound by any confidentiality obligation with respect to such information.

 

The Parties shall take reasonable measures to assure that no unauthorized use or disclosure is made by others to whom access to such information is granted.

 

(d)           Confidential Treatment Request.  If either Party is required to file or disclose this Agreement or any portion thereof with the United States Securities and Exchange Commission (the “SEC”) or any other governmental authority, such Party shall notify the other Party in writing and shall provide the other Party with at least five (5) Business Days to request redactions thereof prior to making such filing or disclosure.  Each Party shall use its commercially reasonable efforts to procure confidential treatment of the Agreement or relevant

 

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provisions thereof pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, in each case as amended, and the rules, regulations and guidelines promulgated thereunder, or any Laws and Regulations.  Each Party will use its commercially reasonable efforts to procure confidential treatment for such portions of the Agreement as may be reasonably requested in a timely manner by the other Party.

 

(e)           Disclosure to Affiliates.  Nothing in this Agreement shall be construed as preventing either Party from disclosing any information received from the other to an Affiliate of the receiving Party who is necessary for the purposes of enabling the receiving Party to fulfill its obligations under this Agreement, provided, the receiving Party shall be responsible for breaches of the confidentiality obligations by such Affiliate.

 

(f)            Certification of Destruction of Confidential Information.  Within fourteen (14) days following the receipt of a written request from the other Party, which shall only be given after the termination or expiration of this Agreement, each Party will certify the destruction of all Confidential Information of the other Party and all copies thereof (in any media), except to the extent a Party is required to retain such material under Laws and Regulations or entitled to retain such material under any other written agreement between the Parties.

 

(g)           Retention of Confidential Information.  Notwithstanding Section 10.2(f), upon expiration or earlier termination of this Agreement, a Party may retain one (1) archival copy of the other Party’s Confidential Information, for the sole purpose of establishing compliance with the terms of this Agreement.  All other copies of Confidential Information will be destroyed.

 

(h)           Joint Defense Agreement.  The Parties reaffirm their rights and obligations under the Joint Defense Agreement.

 

10.3         Public Announcements.  No public announcement or other disclosure to Third Parties concerning the existence of or terms of this Agreement shall be made, either directly or indirectly, by either Party, without first obtaining the written approval of the other Party and agreement upon the nature, text and timing of such announcement or disclosure; provided, however, either Party shall have the right to make any such public announcement or other disclosure required by Laws and Regulations after such Party has provided to the other Party a copy of such announcement or disclosure and an opportunity to comment thereon.  Notwithstanding anything in this Section 10.3 to the contrary, neither Party shall be required to provide the other Party with any advance notice of any public announcements or other disclosures related to periodic, routine financial reporting or periodic presentations to the investment community that include factual information regarding the Product that is not promotional in nature.  Each Party acknowledges the other Party’s responsibilities under the federal and state securities laws in the United States with respect to trading in the securities of GSK and Auxilium, as applicable, while in possession of material non-public information relating to GSK and Auxilium, as applicable, and agrees to maintain and enforce appropriate policies to prevent the violations of such Laws and Regulations by its employees and representatives.

 

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11.           Non-Competition and Non-Solicitation

 

11.1         Non-Competition.  During the Term, GSK agrees that it will not promote, market, or sell any Competing Product [**].  For purposes of this Section 11.1, a “Competing Product” shall mean any [**] with the same or substantially similar indications for use to those of the Product.

 

11.2         Non-Solicitation.  During the Term of this Agreement, neither Party shall solicit, induce, encourage or attempt to induce or encourage any employee of the other Party to terminate his or her employment or relationship with such other Party or to breach any other obligation to such other Party.  The Parties agree that general solicitation, such as through advertisements or recruiting services, not targeted at the other Party’s employees shall not be a violation of the foregoing sentence.

 

12.           Rights And Duties Upon Termination

 

12.1         Continuing Obligations.  The following provisions shall survive the termination of this Agreement for any reason:  Sections 1, 5.5 (solely the last sentence of the opening paragraph), 5.5(g) (solely the fourth sentence), 5.6(a), 5.6(e), 5.8(a) (solely the first sentence), 6.1(a), 6.1(b), 6.1(c) (solely the last sentence), 7.1(c) (solely the first sentence), 7.1(f) (solely the first and last sentence), 7.4, 7.5, 7.7 (solely the last two sentences), 9.1, 9.2, 9.5 (solely the first sentence), 9.7 (solely the first and second sentence), 9.10 (solely the proviso), and Articles 4, 8, 10, 12, 13, 15, 16, and 17.  In addition, any other provision required to interpret and enforce the Parties’ rights and obligations under this Agreement shall also survive, but only to the extent required for the full observation and performance of this Agreement.

 

12.2         Remedies.  Termination of this Agreement in accordance with its provisions shall not limit the remedies that may be otherwise available to either Party in law or equity; provided that neither Auxilium nor GSK shall be liable under this Agreement for any indirect, incidental, punitive, exemplary, special or consequential damages of any kind whatsoever sustained as a result of a breach of this Agreement, whether based on breach of contract, tort (including negligence), warranty or otherwise arising out of or that relate in any way to this Agreement or its performance.  This exclusion will apply regardless of the legal theory upon which any claim for such damages is based, whether such Party had been advised of the possibility of such damages, whether such damages were reasonably foreseeable, or whether application of the exclusion causes any remedy to fail of its essential purpose.  The foregoing sentence shall not limit the obligations of either Party to indemnify, defend and hold harmless the other Party from and against Claims (as defined in Section 13.3) under Section 13.3 or Section 13.4.  Any payments due hereunder by a Party to the other Party shall not be deemed to be indirect, incidental, punitive, exemplary, special or consequential damages.

 

12.3         Returns.  Promptly upon termination of this Agreement, GSK shall return to Auxilium all Promotional Materials and other sales and communication materials, marketing plans and reports and other tangible items provided by Auxilium to GSK pursuant to the terms and intent of this Agreement.

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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13.           Representations, Warranties, Covenants and Indemnification

 

13.1         Representations, Warranties and Covenants of Auxilium.  Except as disclosed on Schedule 13.1, Auxilium represents and warrants that, as of the Effective Date:

 

(a)           Auxilium (i) is a company duly incorporated, validly existing, and in good standing under the Laws and Regulations of the jurisdiction of its incorporation; (ii) is duly qualified and in good standing under the Laws and Regulations of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be so qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; (iii) has the requisite corporate power and authority and the legal right to conduct its business as now conducted and hereafter contemplated to be conducted; and (iv) is in compliance with its charter documents.

 

(b)           The execution, delivery and performance of this Agreement by Auxilium and all instruments and documents to be delivered by Auxilium hereunder (i) are within the corporate power of Auxilium; (ii) have been duly authorized by all necessary or proper action; (iii) do not conflict with any provision of the charter documents of Auxilium; (iv) will not, to the best of Auxilium’s knowledge, violate any Laws and Regulations or any order or decree of any court of governmental instrumentality; and (v) will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, license, agreement, or other instrument to which Auxilium is a party, or by which Auxilium or any of its property is bound, which violation would have a material adverse effect on its financial condition or on its ability to perform its obligations hereunder.

 

(c)           This Agreement has been duly executed and delivered by Auxilium and upon execution by Auxilium constitutes a legal, valid and binding obligation of Auxilium, enforceable against Auxilium in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws and Regulations affecting creditors’ rights generally, or by the availability of equitable remedies.

 

(d)           Neither the execution and delivery of this Agreement nor the performance hereof by Auxilium requires Auxilium or any of its Affiliates to obtain any permits, authorizations or consents from any governmental authority or from any other person, not previously obtained.

 

(e)           No Third Party agreement to which Auxilium is a party or by which Auxilium is bound in any way limits Auxilium’s ability to perform all of the obligations undertaken by Auxilium under this Agreement.

 

(f)            None of the representations and warranties of Auxilium contained herein omit to state a fact necessary to make the statement herein not misleading in any material respect.

 

(g)           Auxilium shall use Commercially Reasonable Efforts to ship and distribute in a timely manner the Product in response to purchase orders;

 

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(h)           Appendix A contains a correct and complete list of all trademarks and Appendix B contains a correct and complete list of all patents which (x) are pending, applied for, granted or registered in the Territory, (y) are owned by or licensed to Auxilium or any of its Affiliates, and (z) relate to the Product in the Territory.

 

(i)            Auxilium or its Affiliates own or possess adequate licenses or other valid rights to use all patents, patent rights, trademarks, applications and Know-How (collectively, “Intellectual Property”) as necessary to manufacture and package the Product for sale in the Territory, and to distribute, use, promote and sell the Product in the Territory for their FDA-approved indications, all free of any material lien, encumbrance, liability or other restriction.  Except as set forth in Schedule 13.1(i), to the knowledge of Auxilium, there are no actions, suits, proceedings or claims pending against Auxilium or any of its Affiliates, or, to the knowledge of Auxilium, threatened against Auxilium or any of its Affiliates, at law or in equity, or before or by any governmental authority relating to the ownership, enforceability, use or validity of any of the Intellectual Property.  There are no investigations of public record pending or, to Auxilium’s knowledge, any investigations ongoing or threatened against Auxilium or any of its Affiliates, at law or in equity, or before or by any governmental authority relating to the Product or the manufacture, marketing, distribution, use, promotion, offer for sale or sale thereof contemplated under this Agreement.  To Auxilium’s knowledge, there have not at any time anywhere in the world been any material Third Party Claims (as defined in Section 13.3) involving death or bodily injury resulting from the use of the Product.

 

(j)            To the best of Auxilium’s knowledge, the manufacture, marketing, distribution, use, promotion, offer for sale or sale of the Product, and the creation, use and dissemination of Promotional Materials or other materials as contemplated hereunder do not infringe, and will not infringe, any Third Party intellectual property right in the Territory.

 

(k)           Auxilium is in compliance in all material respects with all Laws and Regulations applicable to the subject matter of this Agreement.

 

(l)            The NDAs for the Product filed with the FDA and any amendments and supplements thereto (i) have been prepared in all material respects in accordance with all applicable requirements of the Act and any other Laws and Regulations, and (ii) have been approved by FDA, and none of Auxilium or any of its Affiliates has received any written notice which has, or reasonably should have, led Auxilium or any of its Affiliates to believe that such NDAs and any amendments thereto are not currently in good standing in all respects with FDA.  Auxilium (or its designated agent) has filed, or caused to be filed, with the FDA all required notices, supplemental applications and reports, including Adverse Event reports, required to be filed by the NDA holder for the Product.  None of Auxilium or any of its Affiliates has received any written notice which has led Auxilium or any of its Affiliates to believe that any governmental authority (including the FDA) has commenced, or threatened to initiate, any action anywhere in the world to withdraw any approval for the Product or to limit the ability of Auxilium or any of its Affiliates to manufacture (or to have manufactured for it by a Third Party) the Product or to request the recall of the Product or commenced, or threatened to Auxilium’s knowledge, to initiate any action to enjoin production of the Product at any facility.

 

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(m)          Auxilium is in compliance in all material respects with all Laws and Regulations related to the Government Price Reporting of the Product.

 

(n)           All regulatory filings related to the NDA for the Product, and the data and information in Auxilium’s submissions related to the Product are and shall be free from fraud or any false statements.  The data and information in Auxilium’s submissions are and shall be accurate and reliable for purposes of supporting approval of the submissions, and the NDA for the Product has been obtained without illegal or unethical behavior of any kind.

 

(o)           All manufacturing operations conducted by Auxilium and its Affiliates (or by Third Parties on their behalf) relating to the manufacturing of the Product are being conducted in material compliance with cGMP and other Laws and Regulations.

 

(p)           Auxilium and its officers, and directors, and employees, as applicable, have not been and are not under consideration to be (i) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to provide services pursuant to Section 306 of the Act; (ii) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to participate in, any federal or state health care program, including Medicare, Medicaid, TRICARE, the U.S. Department of Defense, or the  U.S. Department of Veterans Affairs pursuant to the U.S. Department of Health and Human Services Office of Inspector General’s exclusion authority under 42 U.S.C. § 1320a-7a, as implemented at 42 C.F.R. §§ 1001.101; (iii) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to participate in federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. §1320a-7b(f)); (iv) disqualified by any government or regulatory agencies from performing the hereunder, and are not subject to a pending disqualification proceeding; or (v) convicted of a criminal offense related to the provision of health care items or services, or under investigation or subject to any such action that is pending.

 

(q)           Within [**], Auxilium has not engaged in the practice of “channel stuffing” or other program (including any rebate, discount, chargeback or refund policy or practice) with respect to the Product that would reasonably be expected to result, directly or indirectly, in a trade buy-in of the Product that is significantly in excess of normal customer purchasing patterns consistent in all material respects with the past practices of Auxilium’s business during [**].

 

(r)            Auxilium acknowledges that it has received and read GSK’s ‘Prevention of Corruption — Third Party Guidelines’ (either in hard copy or at http://www.gsk.com/policies/Prevention-of-Corruption-Third-Party-Guidelines.pdf).

 

13.2         Representations, Warranties and Covenants of GSK.  GSK represents and warrants that, as of the Effective Date:

 

(a)           GSK (i) is a company duly formed, validly existing, and in good standing under the Laws and Regulations of the jurisdiction of its formation; (ii) is duly qualified and in good standing under the Laws and Regulations of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be so qualified would have a material adverse effect on its financial condition or its ability to perform

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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its obligations hereunder; (iii) has the requisite limited liability company power and authority and the legal right to conduct its business as now conducted and hereafter contemplated to be conducted; and (d) is in compliance with its charter documents;

 

(b)           The execution, delivery and performance of this Agreement by GSK and all instruments and documents to be delivered by GSK hereunder (i) are within the limited liability company power of GSK; (ii) have been duly authorized by all necessary or proper action; (iii) do not conflict with any provision of the charter documents of GSK; (iv) will not, to the best of GSK’s knowledge, violate any Laws and Regulations or any order or decree of any court of governmental instrumentality; and (v) will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, license, agreement, or other instrument to which GSK is a party, or by which GSK or any of its property is bound, which violation would have a material adverse effect on its financial condition or on its ability to perform its obligations hereunder.

 

(c)           This Agreement has been duly executed and delivered by GSK and upon execution by GSK constitutes a legal, valid and binding obligation of GSK, enforceable against GSK in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws and Regulations affecting creditors’ rights generally, or by the availability of equitable remedies.

 

(d)           Neither the execution and delivery of this Agreement nor the performance hereof by GSK requires GSK or any of its Affiliates to obtain any permits, authorizations or consents from any governmental authority or from any other person.

 

(e)           No Third Party agreement to which GSK is a party or by which GSK is bound in any way limits GSK’s ability to perform all of the obligations undertaken by GSK under this Agreement.

 

(f)            GSK is in compliance in all material respects with all Laws and Regulations applicable to the subject matter of this Agreement.

 

(g)           GSK and its officers, managers and employees, as applicable, have not been and are not under consideration to be (i) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to provide services pursuant to Section 306 of the Act; (ii) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to participate in, any federal or state health care program, including Medicare, Medicaid, TRICARE, the U.S. Department of Defense, or the U.S. Department of Veterans Affairs pursuant to the U.S. Department of Health and Human Services Office of Inspector General’s exclusion authority under 42 U.S.C. § 1320a-7a, as implemented at 42 C.F.R. §§ 1001.101; (iii) excluded, disqualified, banned, debarred or suspended from, or otherwise ineligible to participate in federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. §1320a-7b(f)); (iv) disqualified by any government or regulatory agencies from performing the hereunder, and are not subject to a pending disqualification proceeding; or (e) convicted of a criminal offense related to the provision of health care items or services, or under investigation or subject to any such action that is pending.

 

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(h)           None of the representations and warranties of GSK contained herein omit to state a fact necessary to make the statement herein not misleading in any material respect.

 

13.3         Indemnification by Auxilium.

 

(a)   Auxilium shall defend, indemnify and hold harmless GSK and its Affiliates and their respective officers, directors, managers, shareholders, employees, agents, representatives, successors and assigns (the “GSK Parties”) from and against all Third Party claims, complaints, or lawsuits for damages (collectively referred to as “Claims”) arising out of (i) any act or omission prior to the GSK First Promotion Date (or if the GSK First Promotion Date shall not occur, the date on which this Agreement is terminated), (ii) the failure by Auxilium or any of its Affiliates to comply with Laws and Regulations, (iii) any assertion of the infringement or misappropriation of any Third Party patent, copyright, trademark, service mark, trade secret, or other intellectual property as a result of the development, registration, marketing, promotion, labeling, use, sale or distribution of the Product, (iv) any breach of any covenant, representation or warranty of Auxilium or any of its Affiliates under this Agreement, and (v) promotional activities that are outside the scope of, or are contrary to, the Overall Marketing Plan, the applicable Annual Marketing Plan or the Promotional Materials.  Auxilium shall not be obligated to indemnify for any such Claim under this Section  13.3(a) to the extent that GSK is obligated to indemnify Auxilium for such Claim pursuant to Section 13.4.

 

(b)   In addition to the indemnity set forth in Section 13.3(a), Auxilium shall defend, indemnify and hold harmless the GSK Parties from and against all product liability and consumer fraud Claims arising out of the development, registration, manufacture, design, promotion, labeling, sale or distribution of the Product by Auxilium or GSK, or any of their respective Affiliates, or any use of the Product; provided, however, that Auxilium shall not be obligated to indemnify for any such Claim under this Section 13.3(b) to the extent that such Claim arises from promotional activities of the GSK Parties that are outside the scope of, or are contrary to, the Overall Marketing Plan, the applicable Annual Marketing Plan or the Promotional Materials.

 

13.4         Indemnification by GSK.  GSK shall defend, indemnify and hold harmless Auxilium and its Affiliates and their respective officers, directors, managers, shareholders, employees, agents, representatives, successors and assigns (the “Auxilium Parties”) from and against all Claims arising out of (i) any assertion of the infringement or misappropriation by GSK or any of its Affiliates of any Third Party patent, copyright, trademark, service mark, trade secret or other intellectual property, as a result of GSK’s or such Affiliate’s marketing or promotion of the Product which is not pursuant to the terms of this Agreement or consistent with the direction of the Joint Steering Committee or the Compliance Committee, (ii) the failure by GSK or any of its Affiliates to comply with Laws and Regulations, (iii) any breach of any covenant, representation or warranty of GSK or any of its Affiliates under this Agreement, and (iv) promotional activities that are outside the scope of, or are contrary to, the Overall Marketing Plan, the applicable Annual Marketing Plan or the Promotional Materials.  GSK shall not be obligated to indemnify for any such Claim under this Section 13.4 to the extent that Auxilium is obligated to indemnify GSK for such Claim pursuant to Section 13.3(a) or for the Claims Auxilium is obligated to indemnify GSK pursuant to Section 13.3(b).

 

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13.5         Indemnification Procedures.  Promptly after receipt by any indemnified party (“Indemnitee”) of any Claim or the commencement of any action, such Indemnitee shall (a) notify the indemnifying party (“Indemnitor”) in writing of any such claim (including a copy of any related complaint, summons, notice or other instrument); (b) provide the Indemnitor with reasonable assistance to settle or defend such claim, at the Indemnitor’s own expense; and (c) grant to the Indemnitor the right to control the defense and/or settlement of such Claim, at the Indemnitor’s expense; provided  however that (i) the failure to so notify, provide assistance and grant authority and control shall not relieve the Indemnitor of any of its obligations hereunder except to the extent the Indemnitor is prejudiced by such failure, and (ii) the Indemnitor shall not, without the Indemnitee’s consent (such consent not to be unreasonably withheld or delayed), agree to any settlement which (1) makes any admission on behalf of the Indemnitee; or (2) consents to any injunction against the Indemnitee (except an injunction relating solely to the Indemnitee’s continued use of any infringing intellectual property), and (iii) the Indemnitee shall have the right, at its expense, to participate in any legal proceeding to contest and defend a Claim and be represented by legal counsel of its choosing, but shall have no right to settle a claim without the Indemnitor’s written consent.

 

13.6         Disclaimer of Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, AUXILIUM AND GSK MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND AUXILIUM AND GSK EACH SPECIFICALLY DISCLAIM ANY OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS, STATUTORY OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.

 

13.7         Insurance.

 

(a)           During the Term and continuing for a period of [**] after the expiration of this Agreement or the earlier termination thereof, Auxilium shall obtain and/or maintain, at its sole cost and expense, product liability insurance in an amount not less than $[**] in the aggregate (with a $[**] deductible).  The Product liability insurance shall insure against all liability, including personal injury, physical injury, or property damage arising out of the manufacture, sale, storage, distribution, marketing and/or promotion of the Product in the Territory.

 

(b)           During the Term and continuing for a period of [**] after the expiration of this Agreement or the earlier termination thereof, Auxilium shall carry insurance in amounts not less than the following for each type specified or as otherwise might be required by Laws and Regulations:

 

(i)            commercial general liability insurance, including coverage for bodily injury and property damage, with limits of not less than $[**] per occurrence and $[**] in the aggregate;

 

(ii)           automobile liability insurance with coverage of not less than $[**] per occurrence; and

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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(iii)          worker’s compensation with limits in accordance with statutory requirements, including employer’s liability coverage of not less than $[**].

 

(c)           GSK hereby represents and warrants to Auxilium that it is self-insured against liability and other risks associated with its activities and obligations under this Agreement in such amounts and on such terms as are customary for prudent practices for similarly situated companies in the pharmaceutical industry for the activities to be conducted by GSK under this Agreement.

 

(d)           Each Party shall provide written proof of the existence of such insurance or self-insurance, as applicable, to the other Party upon reasonable request.  If requested by GSK, Auxilium shall cooperate with GSK in purchasing and maintaining, at GSK’s expense, insurance regarding GSK’s activities under this Agreement.

 

14.           Assignment

 

Neither Party shall assign or transfer its rights or obligations, or any other right or obligation, under this Agreement (including in connection with the insolvency or bankruptcy of either Party) to any Third Party without the prior written consent of the other Party; provided  however, that either Party may make such an assignment or transfer without such consent (a) to an Affiliate of such Party, or (b) subject to Section 3.2(c)(vii), in connection with a merger, or consolidation with, or the sale to a Third Party of, the entire pharmaceutical business of such Party.  Any attempted assignment in derogation of the foregoing shall be null and void.  In the event of any such permitted assignment or transfer with such consent, as a condition to such assignment or transfer, the assigning or transferring Party must confirm to the other Party in writing that it will remain fully liable for all obligations under this Agreement as if such assignment or transfer had not occurred.

 

15.           Notices

 

Any notice, request, approval or other document required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered in person, or sent by overnight courier service, postage prepaid, or sent by certified or registered mail, return receipt requested, or by facsimile transmission, to the following addresses of the Parties and to the attention of the persons identified below (or to such other address, addresses or persons as may be specified from time to time in a written notice).  Any notices given pursuant to this Agreement shall be deemed to have been given and delivered upon the earlier of (i) if sent by overnight courier service, on the date when received at the address set forth below as proven by a written receipt from the delivery service verifying delivery, or (ii) if sent by certified or registered mail, three (3) Business Days after mailed by certified or registered mail postage prepaid and properly addressed, with return receipt requested, or (iii) if sent by facsimile transmission, on the day when sent by facsimile as confirmed by automatic transmission report coupled with certified or registered mail or overnight courier service receipt proving delivery, or (iv) if delivered in person, on the date of delivery to the address set forth below as proven by written signature of the recipient.

 

Auxilium Pharmaceuticals, Inc:

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

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40   Valley Stream Parkway
    
	
 
    	
Malvern,   PA
    
	
 
    	
Facsimile:   (484) 321-5996
    
	
 
    	
Attention:   Adrian Adams, Chief Executive Officer and President
    
	
 
    	
 
    
	
Copy to:
    
	
 
    	
 
    
	
 
    	
Auxilium   Pharmaceuticals, Inc.
    
	
 
    	
40   Valley Stream Parkway
    
	
 
    	
Malvern,   PA
    
	
 
    	
Facsimile:   (484) 321-5996
    
	
 
    	
Attention:   Andrew I. Koven, Chief Administrative Officer & General Counsel
    
	
 
    
	
Copy to (which shall not constitute notice):
    
	
 
    
	
 
    	
Holland &   Knight LLP
    
	
 
    	
701   Brickell Avenue
    
	
 
    	
Suite 3000
    
	
 
    	
Miami,   FL 33131
    
	
 
    	
Facsimile:   (305) 789-7799
    
	
 
    	
Attention:   Rodney H. Bell
    
	
 
    
	
GlaxoSmithKline LLC:
    
	
 
    
	
 
    	
200   N. 16th Street
    
	
 
    	
Philadelphia,   PA 19102
    
	
 
    	
Facsimile:   (678) 802-2868
    
	
 
    	
Attention:   President, North America Pharmaceuticals
    
	
 
    
	
Copy to (which shall not constitute notice):
    
	
 
    
	
 
    	
GlaxoSmithKline
    
	
 
    	
2301   Renaissance Boulevard
    
	
 
    	
RN   0220
    
	
 
    	
King   of Prussia, PA 19406
    
	
 
    	
Facsimile:   (610) 787-7084
    
	
 
    	
Attention:   Vice President, Legal Operations, Business Development Transactions
    
	
 
    
	
Copy to (which shall not constitute notice):
    
	
 
    	
 
    
	
 
    	
Sidley   Austin LLP
    
	
 
    	
One   South Dearborn
    
	
 
    	
Chicago, Illinois   60603
    
	
 
    	
Facsimile:   (312) 853-7036
    
	
 
    	
Attention:   Jeffrey S. Rothstein
    

 

43

 

16.           Miscellaneous

 

16.1         Cooperation.  The Parties shall take commercially reasonable steps to cooperate, including taking such actions as are reasonably requested by the other Party, in performing their obligations hereunder.

 

16.2         Force Majeure.  If the performance of any part of this Agreement by either Party, or of any obligation under this Agreement, is prevented, restricted, interfered with or delayed by reason of any cause beyond the reasonable control of the Party liable to perform (a “Force Majeure Event”), unless conclusive evidence to the contrary is provided, the Party so affected shall, upon giving written notice to the other Party, be excused from such performance to the extent of such prevention, restriction, interference or delay, provided that the affected Party shall use its reasonable best efforts to avoid or remove such causes of nonperformance and shall continue performance with the utmost dispatch whenever such causes are removed.

 

16.3         No Partnership or Joint Venture.  It is expressly agreed that Auxilium and GSK shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither Auxilium nor GSK shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior written consent of the other Party to do so.

 

16.4         No Third Party Beneficiaries.  Except as may be specifically provided in any applicable provisions of this Agreement:  (a) this Agreement is for the benefit of, and will be enforceable by, only the Parties hereto; and (b) this Agreement is not intended to, and does not, confer any right or benefit on any Third Party, other than the GSK Parties and the Auxilium Parties.  No action may be commenced or prosecuted against a Party by any Third Party claiming as a Third Party beneficiary of this Agreement.

 

16.5         Execution In Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  This Agreement may be executed and delivered by facsimile, email (in portable document format (.pdf) or any other image format in common use) or similar electronic means.

 

16.6         Governing Law.  This Agreement shall be deemed to have been made in the State of Delaware, without giving effect to its conflicts of laws principles, and its validity, construction and effect shall be determined in accordance with the laws of the State of Delaware.

 

16.7         Waiver Of Breach.  The failure of either Party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same.  No waiver by either Party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of another condition or term.

 

16.8         Severability.  In the event any portion of this Agreement were to be held illegal, void or ineffective, the remaining portions of this Agreement shall remain in full force and effect.  If any of the terms or provisions of this Agreement are in conflict with any Laws and

 

44

 

Regulations, then such terms or provisions shall be deemed inoperative to the extent that they may conflict therewith and shall be deemed to be modified to conform with such Laws and Regulations.  In the event that the terms and conditions of this Agreement are materially altered as a result of this Section 16.8, the Parties shall renegotiate the terms and conditions of this Agreement to resolve any inequities.

 

16.9         Entire Agreement; Modifications.  This Agreement, together with all Exhibits, Appendices and Schedules hereto, shall constitute the entire agreement between the Parties relating to the subject matter thereof and shall supersede all previous writings and understandings other than the Joint Defense Agreement and the Existing Confidentiality Agreement.  The Parties hereby agree that the Existing Confidentiality Agreement shall not be applicable with respect to Confidential Information disclosed under this Agreement.  No terms or provisions of this Agreement shall be varied or modified by any prior or subsequent statement, conduct or act of either of the Parties, except that the Parties may amend this Agreement by written instruments specifically referring to and executed in the same manner as this Agreement.  In the event of any conflict between the Agreement and its Exhibits, Schedules or Appendices, the terms of the Agreement shall control unless the Parties otherwise expressly agree in writing.

 

16.10       Interpretation.  The Parties have been represented by counsel in connection with the negotiation and execution of this Agreement.  Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting Party has no application and is expressly waived.  Captions are included for convenience of reference only and shall be ignored in the construction or interpretation of this Agreement.  The terms “this Agreement,” “herein,” “hereof,” “hereunder” and similar expressions refer to this Agreement and not to any particular section or other portion of this Agreement.  Lists of examples following “including”, “e.g.”, “such as”, or “for example” are interpreted to include “without limitation”, unless qualified by words such as “only” or “solely.”  Unless stated or context requires otherwise:  (i) all internal references are to this Agreement, its parties, its Exhibits and Schedules; (ii) “days” means calendar days; (iii) “may” means that the applicable Party has a right, but not a concomitant duty; (iv) “partner,” if used in this Agreement or related documents, is used in its common, marketing sense and does not imply a partnership; (v) “current” or “currently” means “as of the Effective Date” but “then-current” means the present time when the applicable right is exercised or performance rendered or measured; (vi) “notify” means to give notice as provided in Section 15; (vii) a Party’s choices under this Agreement are in its sole discretion; and (viii) any reference to any agreement defined herein shall include such agreement as amended, modified or supplemented in accordance with its terms.

 

17.           Dispute Resolution

 

17.1         Internal Resolution.  Any dispute, controversy or claim arising out of or relating to the interpretation of this Agreement other than a Reserved Matter (collectively referred to as “Dispute”) shall be attempted to be settled by the Parties, in good faith, by submitting each such Dispute to the Joint Steering Committee, which shall meet in person, by videoconference or by telephone within five (5) Business Days of submission of such dispute; provided  that, any Dispute submitted to the Joint Steering Committee may only be resolved by unanimous decision.  If the Dispute is not resolved by the Joint Steering Committee within fifteen (15) Business Days

 

45

 

after the Dispute has been submitted to the Joint Steering Committee, either Party may at any time thereafter provide the other written notice specifying the terms of such Dispute in reasonable detail.  Within five (5) Business Days of receipt of such notice, the Chief Executive Officer of Auxilium and the President of North America Pharmaceuticals of GSK, or a member of management designated by the respective officers, shall meet in person (at a mutually agreed upon time and location), by videoconference or by telephone for the purpose of resolving such Dispute.  They will discuss the problems and/or negotiate for a period of up to fifteen (15) Business Days in an effort to resolve the Dispute.  Notwithstanding the foregoing, the Parties agree that any dispute, controversy or claim that falls within the responsibility of the Joint Steering Committee (which, for the avoidance of doubt, does not include any dispute regarding the interpretation of this Agreement) shall not constitute a Dispute and shall be resolved by the Joint Steering Committee in accordance with the provisions of Section 5.3.  For the avoidance of doubt, this Section 17 shall not be applicable to, or have any effect on, any Reserved Matter.

 

17.2         Mediation.  The Parties agree that they shall try in good faith to resolve such Dispute by confidential, non-binding mediation under the Commercial Mediation Procedures of the American Arbitration Association (“AAA”), in effect as of date of the Agreement, before resorting to arbitration.  If the Parties have not agreed on a mediator within fourteen (14) days after the Dispute was referred for mediation, the mediator shall, upon request of either Party, be appointed pursuant to the AAA Mediation Procedures.  The cost of mediation shall be borne equally by the Parties.  No statements made by any Party during the mediation may be used by another Party or referred to in any subsequent proceedings.  Any Dispute not resolved within forty-five (45) days (or within such other time period as may be agreed to by Parties in writing) after appointment of a mediator shall be finally resolved by binding arbitration by providing a notice of arbitration (“Arbitration Request”) to the other Party.

 

17.3         Arbitration.  From the date of the Arbitration Request and until such time as the Dispute has become finally settled, the running of the time periods as to which a Party must cure a breach of this Agreement shall become suspended as to any breach that is the subject matter of the Dispute.  Unless otherwise agreed by the Parties, disputes relating to patents shall not be subject to arbitration, and shall be submitted to a court of competent jurisdiction.  The arbitration shall be held in Philadelphia, Pennsylvania under the Commercial Arbitration Rules of AAA (the “AAA Rules”).  The arbitration shall be conducted by one arbitrator, who shall be chosen in accordance with the AAA Rules.  If the total amount in controversy exceeds $15 million, the arbitration shall be conducted by three (3) arbitrators.  One (1) arbitrator will be selected by Auxilium, one (1) arbitrator will be selected by GSK, and the third arbitrator will be selected by mutual agreement of the two (2) arbitrators selected by the Parties.  If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by AAA.  The procedures for the taking of evidence shall be governed by the IBA Rules on the Taking of Evidence in International Arbitration.  The arbitration panel shall collectively resolve any discovery disputes or, if the panel unanimously decides, they may designate the neutrally-selected arbitrator as the chair capable of resolving such disputes without the need to convene the entire arbitration panel.  The Parties agree that the arbitration panel and counsel of record in any arbitration hereunder shall have the power to subpoena witnesses to appear to provide their testimony at a hearing or deposition.  As set forth in the AAA Rules, the arbitrators may proceed to an award, notwithstanding the failure of either Party to participate in the proceedings.  The arbitrators shall promptly, after the conclusion of the arbitration hearing,

 

46

 

issue a written award and statement of decision describing the essential findings of fact and conclusions of law on which the award is based, including the calculation of any damages awarded, and designating one (1) Party or the other as the prevailing party in the arbitration, as appropriate.  The arbitrators shall be authorized to award compensatory damages, but shall not be authorized to award non-economic damages or punitive, special, consequential, or any other similar form of damages, or to reform, modify or materially change this Agreement.  The arbitrators also shall be authorized to grant any temporary, preliminary or permanent equitable remedy or relief the arbitrators deem just and equitable and within the scope of this Agreement, including an injunction or order for specific performance.  Any decision which requires a monetary payment shall require such payment to be payable in United States dollars.  The arbitration panel shall make reasonable efforts to conduct and complete such proceeding within six (6) months from submission of the Arbitration Request.  The award of the arbitrators shall be the sole and exclusive remedy of the Parties (except for those remedies set forth in this Agreement).  The enforceability of this Section 17.3 and, subject to the terms of this Section 17.3, the enforcement of any award hereunder, shall be governed by the Federal Arbitration Act (Title 9, U.S. Code).  Judgment on the award rendered by the arbitrators may be enforced in any court having competent jurisdiction thereof.  Each Party shall bear its own costs and expenses and attorneys’ fees; but the arbitration panel shall be authorized to require the Party that does not prevail in the arbitration proceeding to pay the arbitrators’ and any administrative fees of arbitration.  Except to the extent necessary to confirm an award or as may be required by Laws and Regulations, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties.  EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JUDGE OR JURY.

 

[Remainder of Page Intentionally Left Blank.]

 

47

 

NOW THEREFORE, the Parties, through their authorized officers, have executed this Agreement as of the date first written above.

 

AUXILIUM PHARMACEUTICALS, INC

 

	
By:
    	
/s/   Adrian Adams
    	
 
    
	
Name:
    	
Adrian   Adams
    	
 
    
	
Title:
    	
CEO &   President
    	
 
    

 

 

GLAXOSMITHKLINE LLC

 

	
By:
    	
/s/   Deirdre P. Connelly
    	
 
    
	
Name:
    	
Deirdre   P. Connelly
    	
 
    
	
Title:
    	
President
    	
 
    

 

 

SCHEDULES, EXHIBITS AND APPENDICES

 

The following are schedules, exhibits and appendices to the Co-Promotion Agreement, dated as of May 18, 2012 (the “Agreement”), by and between Auxilium Pharmaceuticals, Inc., a Delaware corporation (“Auxilium”), and GlaxoSmithKline LLC, a Delaware limited liability company (“GSK”). Unless otherwise defined, capitalized terms have the meanings set forth in the Agreement.

 

 

INDEX TO SCHEDULES, EXHIBITS AND APPENDICES

 

	
SCHEDULE   1.55
    	
GSK   Policies
    
	
SCHEDULE   1.72
    	
Overall   Marketing Plan
    
	
SCHEDULE   2.2
    	
Promotional   Materials
    
	
SCHEDULE   13.1
    	
Auxilium Disclosure Schedule
    
	
SCHEDULE   13.1(i)
    	
Auxilium   IP Claims
    
	
 
    	
 
    
	
EXHIBIT 2.4
    	
GSK   CIAs
    
	
EXHIBIT 5.5(e)
    	
Samples   Procedures
    
	
EXHIBIT 5.6(d)
    	
Background   Screening Process
    
	
 
    	
 
    
	
APPENDIX   A
    	
Auxilium   Trademarks
    
	
APPENDIX   B
    	
Auxilium   Patents
    

 

 

Schedule 1.55

GSK Policies

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

Schedule 1.72

Overall Marking Plan

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

Schedule 2.2

Promotional Materials

 

See attached.

 

 

Item

 

	
 
    	
TRAINING
    
	
1
    	
Training   - Testim and Disease State Sales Training Modules
    
	
 
    	
 
    
	
 
    	
REP DELIVERED PROMOTIONAL ITEMS
    
	
2
    	
Sell   Sheet - Coverage
    
	
 
    	
 
    
	
 
    	
WEB RELATED ASSETS
    
	
3a
    	
Websites   (Testim.com & LevelUpPlan.com)
    
	
3b
    	
Search   Engine Management (goes with Website)
    
	
3c
    	
Customer   Relationship Marketing (goes with Website)
    
	
 
    	
 
    
	
 
    	
VOUCHER AND HOTLINE MATERIAL
    
	
4a
    	
Testim   Access Hotline (TAH) - script(s)
    
	
4b
    	
Trialcard   - script(s) (for Vouchers/coupons)
    
	
5a
    	
Voucher   - $40 PSK materials (Rep Delivered)
    
	
5b
    	
Voucher   - $40 Web
    
	
 
    	
 
    
	
 
    	
PATIENT EDUCATION
    
	
6a
    	
Patient   Education Brochure
    
	
6b
    	
Patient   Education Brochure Stand
    

 

 

Schedule 13.1

Auxilium Disclosure Schedule

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

Schedule 13.1(i)

Auxilium IP Claims

 

Auxilium Pharmaceuticals, Inc., et al. v. Upsher-Smith Laboratories, Inc., C.A. No. 08-908-SLR, D.Del.  Auxilium and CPEX Pharmaceuticals, Inc. (predecessor in interest to FCB I Holdings Inc. (“FCB”)) filed on December 4, 2008 a lawsuit against Upsher-Smith Laboratories, Inc. (“Upsher-Smith”) for infringement of the ‘968 Patent, which covers Testim (the “Upsher-Smith Litigation”).  The lawsuit was filed in the United States District Court for the District of Delaware.  Auxilium and FCB are seeking a judgment (1) declaring that Upsher-Smith’s act of filing the Abbreviated New Drug Application seeking approval from the FDA to market a generic version of Testim prior to the January 2025 expiration of the ‘968 Patent is an act of infringement, (2) declaring that the making, using or selling of the product for which Upsher-Smith is seeking approval infringes the ‘968 Patent, (3) ordering that the effective date of the FDA’s approval of the product not be until the expiration of the ‘968 Patent, (4) enjoining Upsher-Smith from making, using or selling the product for which it seeks approval until the expiration of the ‘968 Patent, and (5) awarding Auxilium and FCB their costs and expenses in the action. Auxilium and CPEX filed this lawsuit under the Hatch-Waxman Act in response to the notice from Upsher-Smith of its filing of an ANDA with the FDA containing a Paragraph IV certification under 21 U.S.C. Section 355(j) for testosterone gel.  Upsher-Smith has alleged that its proposed generic version of Testim would not infringe the ‘968 Patent, and that the ‘968 Patent is invalid.  The Paragraph IV certification notice states that Upsher-Smith does not believe that the testosterone gel product for which it is seeking approval infringes the ‘968 Patent and that it seeks to market its generic product before the expiration of the ‘968 Patent.  The ‘968 Patent is listed in the Orange Book, published by the FDA, and will expire in January 2025.  The district court has issued a protective order prohibiting disclosure of confidential information relating to the litigation.  On December 13, 2011, the district court issued an order administratively closing the case.  This administrative closure has effectively stayed the case, but has not dismissed it.  In April 2012, Auxilium and FCB received a notice from Upsher-Smith in connection with its ANDA advising Auxilium and FCB of Upsher-Smith’s Paragraph IV certification relating to the eight additional patents listed in the Orange Book in addition to the ‘968 patent-in-suit, and asserting that Upsher-Smith does not believe that the product for which it is seeking approval infringes any of the Orange Book listed Testim patents and that those patents are invalid.

 

On April 13, 2012, Auxilium and FCB I LLC (“FCB LLC”) received a notice from Watson Laboratories, Inc. (“Watson”) that advises them of Watson’s filing of an Abbreviated New Drug Application (ANDA) containing a Paragraph IV certification under 21 U.S.C. Section 355(j) for testosterone gel.  This Paragraph IV certification notice refers to FCB LLC’s nine U.S. patents, covering Testim®, 1% testosterone gel, that are listed in Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book), published by the U.S. Food and Drug Administration.  The referenced patents will expire between 2023 and 2025.

 

 

EXHIBIT 2.4

GSK CIAs

 

None.

 

 

EXHIBIT 5.5(e)

Sample Procedures

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

EXHIBIT 5.6(d)

Background Screening Process

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.

 

 

Appendix A

Auxilium Trademarks

 

TESTIM  [Reg. No. 2767622]

 

Testim 1% (testosterone gel)  [Reg. No. 3190743]

 

THE POWER OF T.  [Reg. No. 3281302]

 

 

Appendix B

Auxilium Patents

 

[**]

 

**          CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.Exhibit 10.5

 

AGREEMENT OF LEASE

 

BETWEEN

 

CHESTERBROOK PARTNERS, LP

 

AND

 

AUXILIUM PHARMACEUTICALS, INC.

 

640 LEE ROAD, WAYNE, PA 19087

 

CHESTERBROOK CORPORATE CENTER®

 

TREDYFFRIN TOWNSHIP

 

CHESTER COUNTY

 

PENNSYLVANIA

 

 

TABLE OF CONTENTS

 

	
1.
    	
Parties
    	
1
    
	
2.
    	
Demise
    	
1
    
	
3.
    	
Term
    	
1
    
	
4.
    	
Fixed Rent; Tenant Energy Costs; Annual Operating Costs;   Taxes
    	
3
    
	
5.
    	
Covenant to Pay Rent and Additional Rent; Late Charge
    	
11
    
	
6.
    	
Use
    	
12
    
	
7.
    	
Assignment and Subletting
    	
12
    
	
8.
    	
Improvement of the Premises; Base Building Improvements
    	
14
    
	
9.
    	
Alterations
    	
18
    
	
10.
    	
Rules and Regulations
    	
19
    
	
11.
    	
Fire or Other Casualty
    	
19
    
	
12.
    	
Landlord’s Right to Enter
    	
20
    
	
13.
    	
Insurance
    	
21
    
	
14.
    	
Repairs and Condition of Premises
    	
22
    
	
15.
    	
Compliance with Law
    	
22
    
	
16.
    	
Services
    	
22
    
	
17.
    	
Notice of Breakage, Fire, Theft
    	
25
    
	
18.
    	
Release of Landlord
    	
26
    
	
19.
    	
Mechanics’ and Other Liens
    	
26
    
	
20.
    	
Force Majeure
    	
27
    
	
21.
    	
Defaults By Tenant - Remedies
    	
27
    
	
22.
    	
Remedies Cumulative
    	
31
    
	
23.
    	
Excepted from Premises
    	
31
    
	
24.
    	
Lease Subordinated
    	
32
    
	
25.
    	
Condemnation
    	
33
    
	
26.
    	
Paramount Lease
    	
33
    
	
27.
    	
Notices
    	
33
    
	
28.
    	
Definition of “the Landlord”
    	
35
    
	
29.
    	
Definition of “the Tenant”
    	
35
    
	
30.
    	
Estoppel Certificate; Mortgagee Lease Comments
    	
35
    
	
31.
    	
Severability
    	
36
    
	
32.
    	
Miscellaneous
    	
36
    
	
33.
    	
Brokers
    	
38
    
	
34.
    	
Security Deposit
    	
38
    
	
35.
    	
Quiet Enjoyment
    	
39
    
	
36.
    	
Rights of Mortgage Holder
    	
39
    
	
37.
    	
Whole Agreement
    	
39
    
	
38.
    	
Financial Statements
    	
39
    
	
39.
    	
Option to Extend Term:
    	
40
    
	
40.
    	
Right of First Offer
    	
41
    
	
41.
    	
Generator
    	
42
    
	
42.
    	
Default By Landlord
    	
42
    

 

i

 

EXHIBITS

 

“A” — Floor Plan

 

“B” — Description of the Land

 

“C” — Memorandum of Commencement Date

 

“D” — Tracey Report

 

“E” — Tenant Construction Plans

 

“F” — Early Access By Tenant

 

“G” — Cleaning Specifications

 

“H” — Rules and Regulations

 

“I” — Form of SNDA

 

“J” — Expansion Space

 

“K” — Bid Package Format

 

“L” — Letter of Credit Requirements

 

“M” — Parking Diagram

 

“N” — Monument Sign

 

ii

 

AGREEMENT OF LEASE

 

1.             Parties.

 

This Lease is made this 16th day of July, 2012, by and between CHESTERBROOK PARTNERS, LP, a limited partnership organized and existing under the laws of the State of Delaware, whose address is Suite 120, 955 Chesterbrook Boulevard, Wayne, PA 19087 (hereafter called “Landlord”), and AUXILIUM PHARMACEUTICALS, INC., a corporation organized and existing under the laws of the State of Delaware, whose present address is 40 Valley Stream Parkway, Malvern, PA 19355 (hereinafter referred to as “Tenant”).

 

It is hereby agreed by and between Landlord and Tenant, intending to be legally bound, for themselves and for their respective heirs, executors, administrators, successors and assigns, in the manner following, it being understood that the Premises are demised under and subject to the following covenants, all of which are also to be regarded as strict legal conditions:

 

2.             Demise.

 

Landlord does hereby lease and demise to Tenant and Tenant does hereby hire and take from Landlord, for the term and subject to the provisions hereof, the Premises (the “Premises”) shown shaded on the floor plans (the “Floor Plans”) attached hereto as Exhibit “A”, consisting of the entire building (hereinafter referred to as the “Building”) known as 640 Lee Road, Wayne, PA 19087, occupying or to occupy the parcel of land bounded as described on Exhibit “B” attached hereto (the “Land”).  The Building and Land are sometimes collectively referred to in this Lease as the “Property”.  Landlord and Tenant stipulate that the area of the Premises is 74,516 rentable square feet.

 

3.             Term.

 

(a)           This demise shall be for the term (hereinafter referred to as the “Term”) beginning on the “Commencement Date” of the Term as defined in Article 3(b) of this Lease and ending, without the necessity of notice from either party to the other, eleven (11) years from and after the Commencement Date if the Commencement Date shall be the first day of a month, if the Commencement Date shall be other than the first day of the month, then from and after the first day of the month next following the Commencement Date.

 

(b)           The Term shall commence (the “Commencement Date”) on the date the Premises are ready for occupancy, estimated to be January 1, 2013; provided, however, that the Commencement Date shall not occur prior to January 1, 2013, unless Tenant or anyone claiming under or through Tenant first occupies any part of the Premises for the commencement of business operations therein (specifically excluding any move in or fit-out work by Tenant), in which event the date of occupancy shall be the Commencement Date.

 

The Premises shall be deemed “ready for occupancy” on the date the work to be performed by Landlord in the Premises in accordance with this Lease shall be “Substantially Complete.”  The terms “Substantial Completion” or “Substantially Complete” shall mean: (i) the state of completion of Base Building Improvements and Tenant Improvements (both as defined in Article 8 of this Lease) which will, except for any improvements or work to be performed by

 

1

 

Tenant, allow Tenant to utilize the Premises for its intended purpose without material interference with the customary business activities of Tenant by reason of the completion of any work being performed by Landlord, notwithstanding that insubstantial details of construction, mechanical adjustment, or decoration remain to be performed, the non-completion of which would not materially interfere with Tenant’s use of the Premises; (ii) delivery by Landlord to Tenant of a certificate of occupancy for the Premises, as modified by the Base Building Improvements and Tenant Improvements; and (iii) delivery by Landlord to Tenant of certification by Landlord’s architect of the satisfaction of the work letter requirements for the Base Building Improvements and Tenant Improvements.

 

(c)           Landlord shall give Tenant fifteen (15) days prior notice of the date the Premises will be ready for occupancy.  Landlord agrees to give Tenant periodic progress reports (which may at Landlord’s option consist of construction meeting minutes) with respect to the improvement of the Premises and a good faith estimate of the date the Premises will be ready for occupancy.

 

(d)           For purposes of determining the date when the Premises are ready for occupancy (and, correspondingly, the Commencement Date and the Outside Date as defined in Article 4(b)(v)), there shall not be considered the duration of any delay (“Tenant Delay”) which is caused by:

 

(i)            changes in the work to be performed by Landlord in readying the Premises for Tenant’s occupancy, which changes shall have been requested by Tenant after the approval by Landlord and Tenant of the Tenant Construction Plans (as defined in Article 8(a) of this Lease);

 

(ii)           delays, not caused by Landlord, in furnishing materials or procuring labor required by Tenant for installations or work in the Premises which are not encompassed within the Base Building Improvements or the Tenant Improvements;

 

(iii)          any failure by Tenant, without regard to any grace period or Force Majeure provided in this Lease, to furnish any required plan, information, approval or consent within the required period of time (including, without limit, delivery of the Tenant Construction Plans not later than June 22, 2012, as required by Article 8(b)); or

 

(iv)          the performance of any work or activity in the Premises by Tenant or any of its employees, agents or contractors.

 

The Premises shall be deemed ready for occupancy (and the Commencement Date shall occur and rent shall commence to accrue) on the date the Premises would have been ready for occupancy but for the causes described in this subparagraph (d).

 

(e)           When the Commencement Date is established, Landlord and Tenant shall promptly execute and acknowledge a memorandum, in the form attached hereto as Exhibit “C”, of the Commencement Date and the date of expiration of the Term (the “Expiration Date”).

 

2

 

(f)            If the Tenant or any person claiming through the Tenant shall have continued to occupy the Premises after the Expiration Date or earlier termination of the Term or any renewal thereof in accordance with this Lease, and if the Landlord shall have consented in writing to such continuation of occupancy, such occupancy (unless the parties hereto shall have otherwise agreed in writing) shall be deemed to be under a month-to-month tenancy.  The month-to-month tenancy shall continue until either party shall have notified the other in writing, at least ninety (90) days prior to the end of any calendar month, that the party giving such notice elects to terminate the month-to-month tenancy at the end of that calendar month, in which event, such tenancy shall so terminate.  If such occupancy shall have continued without Landlord’s written consent, then such occupancy shall be in violation of this Lease, in which event, Tenant shall be liable for (i) the Fixed Rent payable with respect to each monthly period of any month-to-month tenancy until Tenant’s occupancy ceases (and to each monthly period of continued occupancy which may occur without Landlord’s consent) in an amount equal to: (a) for a period of up to ninety (90) days immediately following the Expiration Date or earlier termination of the Term or any renewal thereof, one hundred fifty percent (150%) for each such month of the monthly Fixed Rent payable under Article 4(b) for the last full month of the Term preceding such Expiration Date or date of earlier termination thereof; and (b) thereafter, for each such monthly period, two hundred percent (200%) for each such month of the monthly Fixed Rent payable under Article 4(b) for the last full month of the Term preceding such Expiration Date or date of earlier termination thereof.  Any month-to-month tenancy arising with Landlord’s consent shall be upon the same terms and subject to the same conditions as those which are set forth in this Lease, except as otherwise set forth in this Article 4(f).  If the Landlord shall have given to Tenant, at least thirty (30) days prior to the Expiration Date or earlier termination of the Term or any renewal thereof or prior to the end of any month of a month-to-month tenancy, written notice that Landlord has committed to lease all or any portion of the Premises to an unrelated third party tenant in an arms-length lease (which commitment shall be evidenced by a fully-executed letter of intent between Landlord and such unrelated third party tenant, delivered to Tenant with material monetary terms redacted therein), then in addition to the other amounts owed to Landlord by Tenant pursuant to this Article 4(f), Tenant (i) shall be liable for any and all losses, claims, costs, expenses and damages suffered or incurred by Landlord (including, without limit thereto, court costs and counsel fees), whether direct or consequential, whether foreseen or unforeseen as a result of such continued occupancy, and Landlord shall have all of the rights and remedies available under this Lease, or at law or in equity, for such violation and, without limitation of the foregoing clause (i), (ii) will indemnify and hold harmless Landlord from and against all claims and demands made by succeeding tenants against Landlord, founded upon delay by Landlord in delivering possession of the Premises to such succeeding tenant.  Any month-to-month tenancy arising with or without Landlord’s consent shall be upon the same terms and subject to the same conditions as those which are set forth in this Lease, except as otherwise set forth in this Article 4(f).

 

4.             Fixed Rent; Tenant Energy Costs; Annual Operating Costs; Taxes.

 

(a)           Tenant shall pay to Landlord as rent under this Lease the aggregate of:

 

(i)            Fixed Rent (as defined in Article 4(b) of this Lease);

 

3

 

(ii)           Tenant’s share of Tenant Energy Costs (as defined in Article 4(d) of this Lease);

 

(iii)          Tenant’s proportionate share (as defined in Article 4(c) of this Lease) of increases in Annual Operating Costs (as defined in Article 4(e) of this Lease) over Base Operating Costs (as defined in Article 4(e)(iii) of this Lease);

 

(iv)          Tenant’s proportionate share of increases in Annual Tax Costs (as defined in Article 4(f)(i) of this Lease) over Base Tax Costs (as defined in Article 4(f)(ii) of this Lease); and

 

(v)           All other sums payable by Tenant to Landlord pursuant to the provisions of this Lease.

 

(b)           Fixed Rent.

 

(i)            The minimum fixed annual rent (the “Fixed Rent”) due each lease year of the Term shall be due and payable in lawful money of the United States of America, in equal monthly installments in advance and without prior demand, notice, set-off or deduction on the first day of each and every month during the Term in accordance with the following schedule (the beginning and ending dates of which shall be adjusted if the Commencement Date of the eleven (11) year Term is other than January 1, 2013):

 

	
Lease Period
    	
 
    	
Rent / Sq. Ft.
    	
 
    	
Annual Rent
    	
 
    	
Monthly Rent
    	
 
    
	
01.01.13 — 12.31.13*
    	
 
    	
$
    	
24.00
    	
 
    	
$
    	
1,788,384.00
    	
 
    	
$
    	
149,032.00
    	
 
    
	
01.01.14 — 12.31.14
    	
 
    	
$
    	
24.50
    	
 
    	
$
    	
1,825,642.00
    	
 
    	
$
    	
152,136.83
    	
 
    
	
01.01.15 — 12.31.15
    	
 
    	
$
    	
25.00
    	
 
    	
$
    	
1,862,900.00
    	
 
    	
$
    	
155,241.67
    	
 
    
	
01.01.16 — 12.31.16
    	
 
    	
$
    	
25.50
    	
 
    	
$
    	
1,900,158.00
    	
 
    	
$
    	
158,346.50
    	
 
    
	
01.01.17 — 12.31.17
    	
 
    	
$
    	
26.00
    	
 
    	
$
    	
1,937,416.00
    	
 
    	
$
    	
161,451.33
    	
 
    
	
01.01.18 — 12.31.18
    	
 
    	
$
    	
26.50
    	
 
    	
$
    	
1,974,674.00
    	
 
    	
$
    	
164,556.17
    	
 
    
	
01.01.19 — 12.31.19
    	
 
    	
$
    	
27.00
    	
 
    	
$
    	
2,011,932.00
    	
 
    	
$
    	
167,661.00
    	
 
    
	
01.01.20 — 12.31.20
    	
 
    	
$
    	
27.50
    	
 
    	
$
    	
2,049,190.00
    	
 
    	
$
    	
170,765.83
    	
 
    
	
01.01.21 — 12.31.21
    	
 
    	
$
    	
28.00
    	
 
    	
$
    	
2,086,448.00
    	
 
    	
$
    	
173,870.67
    	
 
    
	
01.01.22 — 12.31.22
    	
 
    	
$
    	
28.50
    	
 
    	
$
    	
2,123,706.00
    	
 
    	
$
    	
176,975.50
    	
 
    
	
01.01.23 — 12.31.23
    	
 
    	
$
    	
29.00
    	
 
    	
$
    	
2,160,964.00
    	
 
    	
$
    	
180,080.33
    	
 
    

 

* The foregoing notwithstanding, Fixed Rent, but not Tenant Energy Costs or any other amount owed by Tenant to Landlord under the Lease, shall be conditionally abated during the first 365 days of the Term.  During all other periods of the Term, Tenant shall make Fixed Rent payments without any abatement as provided herein.  Should this Lease or Tenant’s right to possess the Premises be terminated on account of an uncured Tenant default following applicable notice and cure periods, Landlord shall be entitled to recover from Tenant (in addition to all other rights and remedies available to Landlord) the unamortized portion of the conditionally abated Fixed Rent, calculated on the basis of an 11 year fully amortizing loan of $1,788,384.00 at 6% per annum.  For example, if the Commencement Date is January 1, 2013, in the event of a termination as described herein, effective as of December 31, 2017, the portion of conditionally abated Fixed Rent allocable to the time remaining in the Term recoverable by Landlord would be $1,118,708.94.

 

(ii)           The Fixed Rent and all other sums payable to Landlord pursuant to or by reason of this Lease shall be payable to Landlord at the following address:  NW 5739,

 

4

 

P.O. Box 1450, Minneapolis, MN 55485-5739, or to such other person and at such other place as Landlord may from time to time designate in writing.

 

(iii)          The first monthly installment of Fixed Rent shall be paid on or before the Commencement Date.  The term “lease year” shall mean each annual period commencing on the Commencement Date and each succeeding anniversary thereof.

 

(iv)          If the Term begins on a day other than the first day of a month, Fixed Rent from the Commencement Date until the first day of the following month shall be prorated and shall be payable in advance on the first day of the Term and, in such event, the installment of Fixed Rent paid on or before the Commencement Date shall be applied to the Fixed Rent due for the first full calendar month of the Term.

 

(v)           If Landlord cannot deliver possession of all of the Premises to Tenant with the Base Building Improvements and the Tenant Improvements (both as defined in Article 8) Substantially Complete on or before December 1, 2012, as extended for each day of Force Majeure or Tenant Delay (the “Outside Date”), then Fixed Rent shall be abated beginning on the first anniversary of the Commencement Date in an amount equal to one (1) day of Fixed Rent (i.e., $5,071.23 per day) for each day that delivery of possession of the Premises is delayed beyond the Outside Date due to any reason other than Tenant Delay or Force Majeure.  To invoke a Tenant Delay or Force Majeure event in connection herewith, Landlord must deliver to Tenant written notice of its invocation not later than ten (10) days immediately following the occurrence of the event giving rise thereto or lose such right to invoke a Tenant Delay or Force Majeure.

 

(c)           Tenant’s Proportionate Share.  As used in this Lease, “the square foot area of the Premises” shall be deemed to be 74,516 square feet, “the total square foot area of the Building” shall be deemed to be 74,516 square feet and “Tenant’s proportionate share” shall refer to the percentage relationship between the foregoing, namely 100%.  Tenant recognizes that, as used in this Lease, the total square foot area of the Premises includes a share of the common areas of the Building.

 

(d)           Tenant Energy Costs.

 

(i)            The term “Tenant Energy Costs” shall mean the actual costs to Landlord (without a mark-up charge to Tenant) of furnishing to the respective areas of the Premises utility services, except water, electric and sewer (including taxes or fuel adjustment or transfer charges and other like charges regularly passed on to the consumer by the public utility furnishing electric energy to the Property).  Tenant shall contract directly with the provider designated by Landlord for electric service.

 

(ii)           For and with respect to each calendar year of the Term (and any renewals or extensions thereof) including, without limit, the first calendar year during which the Term of this Lease shall have commenced, there shall accrue, as additional rent under this Lease and be paid within thirty (30) days after Landlord shall have given to Tenant a written statement or statements of the amount due, Landlord’s costs (if any) in such calendar year of supplying utility services (excluding water, electric and sewer) as is Tenant’s proportionate share of Landlord’s actual costs (without a mark-up charge to Tenant) in such calendar year of supplying

 

5

 

utility service (excluding water, electric and sewer), as is supplied to all non-tenanted areas of the Property in connection with the operation of the Property without any administrative costs incurred by Landlord by reason thereof.

 

(iii)          The method and timing (but not more frequently than monthly) of billing such costs of Landlord (if any) shall be determined by Landlord, using reasonable accounting principles, it being understood that it is not intended that Landlord derive any profit from the supplying of utility services.  At Landlord’s option, Landlord may bill Tenant for Tenant’s proportionate share of Tenant Energy Costs monthly on an estimated basis (which may be adjusted from time to time by Landlord upon prior written notice to Tenant, including the reasonable basis therefor) in advance with a reconciliation of such costs to be made on an annual basis.  Tenant shall have the right to audit the Tenant Energy Costs on the same basis as Tenant may audit Annual Operating Costs.

 

(e)           Annual Operating Costs.

 

(i)            The term “Annual Operating Costs” shall mean the actual costs to Landlord of operating and maintaining the Property (including, without limit, all improvements thereto and fixtures and equipment therein or thereon) during each calendar year of the Term (and any renewals or extensions thereof) including, without limit, the first calendar year during which the Term of this Lease shall have commenced for the purpose of determining the Base Operating Costs (as defined in Article 4(e)(iv) below), excluding Tenant Energy Costs (as hereinbefore defined).  Such costs shall include, by way of example rather than of limitation, (1) charges or fees for, and taxes on, the furnishing to the Property of water and sewer service, electric energy (excluding the supply of electric energy included in Tenant Energy Costs or paid by Tenant directly to the utility provider); (2) costs of elevator service and charges or fees for maintenance of the Property, planting, replanting and janitorial service, trash removal, policing, cleaning, restriping, resurfacing, maintaining and repairing all walkways, roadways, parking areas forming part of the Property, maintaining all landscaped areas of the Property; (3) charges or fees for any necessary governmental permits; (4) wages, salaries and benefits of employees of Landlord or any management company engaged by Landlord in connection with the Building, management fees, overhead and expenses, provided that Landlord’s management/administrative fees and expenses shall be capped at four percent (4%) of Landlord’s gross revenue for the Building (not including Tenant Energy Costs or electric costs paid by Tenant directly to the utility provider) and shall be included Landlord’s established Base Year Operating Costs; (5) the cost of premiums for hazard, rent, liability, workmen’s compensation and other insurance upon the Property or portions thereof; (6) costs arising under service contracts with independent contractors; (7) professional and consulting fees including, without limit, legal and auditing fees; (8) repairs, replacements and improvements to the Property which are appropriate for the continued operation of the Building as a first class office building; and (9) the cost of all other items which, under standard accounting practices, constitute operating or maintenance costs which are attributable to the Property or any portion thereof.  The term “Annual Operating Costs” shall not include:  (1) depreciation on the Building or equipment; interest on mortgage encumbrances; ground rents; income taxes; salaries of executive officers of Landlord; (2) commissions payable to leasing brokers; (3) expenditures for capital improvements, except (x) those which under generally applied real estate practice are expensed or regarded as deferred expenses and (y) capital expenditures required as a result of

 

6

 

Tenant’s specific use of the Premises, in either of which cases the cost thereof shall be included in Annual Operating Costs for the calendar year in which the cost shall have been incurred and subsequent calendar years, on a straight line basis, to the extent that such items are amortized over an appropriate period, but not more than ten (10) years, with an interest factor equal to two percent (2%) plus the prime rate at the time Landlord shall have incurred said costs (the prime rate shall mean the rate of interest per annum announced from time to time by Wells Fargo Bank, N.A. or its successor as its prime lending rate, or if such prime lending rate is discontinued, such comparable rate as Landlord reasonably designates by notice to Tenant); (4) free rent, construction allowance(s), advertising and space planning expenses, leasing commissions, accountants’ or attorneys’ fees, costs and disbursements and other expenses incurred in connection with proposals, negotiations, or disputes with tenants or other occupants or prospective tenants or other occupants, employees, consultants, management agents, leasing agents, purchasers or mortgagees, or associated with the enforcement of any leases or the defense of Landlord’s title to or interest in the Premises or any part thereof; (5) costs incurred in renovating or otherwise improving or decorating, painting or redecorating space for tenants or other occupants or any vacant space in the Building; (6) salaries, benefits or other compensation paid to leasing agents, promotional directors, officers, directors and executives of Landlord above the rank of general manager, or not directly involved in the on-site, day-to-day operations or management of the Building (except for out-of-pocket expenses of such persons related to the Building or the Premises); (7) contributions to any organizations, whether political or charitable, other than local charitable organizations in amounts consistent with similar Class A buildings; (8) interest or penalties for late payments (unless caused by Tenant); (9) costs reimbursed by insurance or condemnation proceeds; (10) the costs of the Base Building Improvements and costs of correcting defects in the Base Building Improvements; (11) interest, points, fees, principal payments of mortgage debts of Landlord, financing costs and amortization of funds borrowed by Landlord, whether secured or unsecured; (12) completing, fixturing, improving, renovating, painting, redecorating or other work, which Landlord pays for or performs for other tenants within their premises, and costs of correcting defects in such work; (13) taxes to be paid directly by Tenant, whether or not actually paid; (14) salaries, wages, benefits and other compensation paid to officers and employees of Landlord who are not assigned in whole or in part to the operation, management, maintenance or repair of the Premises; (15) general organizational, administrative and overhead costs relating to creating or maintaining Landlord’s existence, either as a corporation, partnership, or other entity, including general corporate, legal and accounting expenses and all general corporate overhead and general administrative expenses not related to the operation of Building or the Premises; (16) penalties, fines or interest incurred as a result of Landlord’s inability or failure to make payment of Annual Tax Costs (unless Tenant’s uncured default following applicable notice and cure periods has contributed to such delinquency) and/or to file any tax or informational returns when due, or from Landlord’s failure to make any payment of Annual Tax Costs required to be made by Landlord hereunder before delinquency; (17) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in or to the Premises to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis; (18) costs incurred in the sale, financing or refinancing of the Premises or the Building (including, without limitation, transfer taxes); (19) any expenses otherwise includable within Annual Operating Costs to the extent actually reimbursed by persons other than Tenant; (20) any cost or expense related to removal, cleaning, abatement or remediation of hazardous substances or asbestos in or about the Building or the Premises, including, without limitation,

 

7

 

hazardous substances in the ground water or soil not caused by Tenant; (21) rentals for equipment ordinarily considered to be of a capital nature (such as elevators and HVAC systems) except on a temporary basis; (22) the cost of installing, operating and maintaining any commercial concessions operated by Landlord in the Building or of installing, operating and maintaining any specialty services operated by Landlord for the benefit of tenants or other parties other than Tenant, except during any periods during which Tenant is not the sole tenant in the Building; (23) all additions to Building reserves including bad debts and rent loss reserves; (24) the cost of evaluating and replacing any heat pump units, in accordance with Article 16(a)(x) hereof; and (25) reasonable wear and tear of the Premises if the Building is multi-tenanted.

 

(ii)           Notwithstanding Article 4(e)(i) above, if Landlord shall have purchased any item of capital equipment or shall have made any capital expenditure designed to result in savings or reductions in Annual Operating Costs or Tenant Energy Costs applicable to leased space generally, then the costs of having purchased such equipment and such capital expenditures shall be included in Annual Operating Costs for the calendar year in which the costs shall have been incurred and subsequent calendar years, on a straight line basis, to the extent that such items are amortized over such period of time as reasonably can be estimated as the time in which such savings or reductions in Annual Operating Costs are expected to equal Landlord’s costs for such capital equipment or capital expenditure, with an interest factor equal to the prime rate at the time of Landlord’s having incurred said costs, but only to the extent applicable to a lease year during the Term.  If Landlord shall have leased any such items of capital equipment designed to result in savings or reductions in Annual Operating Costs, then the rental and other costs paid pursuant to such leasing shall be included in Annual Operating Costs for the calendar year in which they shall have been incurred, but only to the extent applicable to a lease year during the Term.

 

(iii)          The term “Base Operating Costs” shall mean the Annual Operating Costs incurred by Landlord during the calendar year 2013, grossed up to one hundred percent (100%), if the Commencement Date does not occur on January 1, 2013, for any period between January 1, 2013, and the Commencement Date.

 

(iv)          For and with respect to each calendar year of the Term (and any renewals or extensions thereof) excluding, however, the first calendar year during which the Term of this Lease shall have commenced, there shall accrue, as additional rent hereunder, and be paid within thirty (30) days after Landlord shall have given to Tenant a statement or statements of the amount due, Tenant’s proportionate share of the increase, if any, of Annual Operating Costs over Base Operating Costs.

 

(v)           Anything contained in the foregoing provisions of this Article 4 to the contrary notwithstanding, in any instance in which the Tenant shall have agreed in this Lease or otherwise to provide any item or items of Annual Operating Costs partially or entirely at its own expense, in calculating and allocating increases in Annual Operating Costs over Base Operating Costs pursuant to the foregoing provisions of this subsection, Landlord shall make appropriate adjustments, using reasonable accounting principles, so as to avoid allocating to the Tenant the same such item or items of the Base Operating Costs and Annual Operating Costs (partially or entirely, as aforesaid) being provided to other tenants by Landlord at Landlord’s expense.  Subject to the preceding sentence, if during all or part of any calendar year, Landlord

 

8

 

shall not furnish any item or items of Annual Operating Costs to any portions of the Building because such portions are not occupied or because such item is not required or desired by the tenant of such portion or such tenant is itself obtaining and providing such item or for other reasons, then, for the purposes of computing the additional rent payable hereunder, the amount of Annual Operating Costs for such period (including without limitation in connection with the calculation of Base Operating Costs) shall be deemed to be increased by an amount equal to the additional costs which would normally have been incurred during such period by Landlord if it had at its own expense furnished such item to such portion of the Building.

 

(f)            Annual Tax Costs.

 

(i)            The term “Annual Tax Costs” shall mean all real estate taxes and assessments, general or special, ordinary or extraordinary, foreseen or unforeseen (including “Lease Taxes” as defined in Article 4(j) of this Lease) assessed or imposed upon the Property, plus the expenses of any contests (administrative or otherwise) of tax assessments or proceedings to reduce taxes, including attorneys’ and appraisers’ fees, incurred each calendar year during the Term (and any renewals or extensions thereof) including, without limit, the first calendar year during which the Term of this Lease shall have commenced.  If, due to a future change in the method of taxation, any franchise, income, profit or other tax, however designated, shall be levied or imposed in substitution, in whole or in part, for (or in lieu of) any tax or addition or increase in any tax which would otherwise be included within the definition of Taxes, such other tax shall be deemed to be included within Taxes as defined in this Lease.  The term “Annual Tax Costs” shall not mean and include (a) penalties, fines or interest incurred as a result of Landlord’s inability or failure to make payment of Annual Tax Costs (unless directly caused by Tenant) and/or to file any tax or informational returns when due, or from Landlord’s failure to make any payment of Annual Tax Costs required to be made by Landlord hereunder before delinquency, (b) taxes to be paid directly by Tenant, whether or not actually paid, and (c) transfer or other taxes incurred in the sale, financing or refinancing of the Premises or the Building.

 

(ii)           The term “Base Tax Costs” shall mean the Annual Tax Costs incurred by Landlord during the calendar year 2013.  If Base Tax Costs are subsequently reduced by an assessment appeal or otherwise, then Landlord may retroactively reduce Base Tax Costs for purposes of determining additional rent; provided, however, that any such reduction shall be made and notice thereof given to Tenant no later than the date that is three (3) years after the last calendar day of the calendar year for which the reduction is made.

 

(iii)          For and with respect to each calendar year of the Term (and any renewals or extensions thereof) excluding, however, the first calendar year during which the Term of this Lease shall have commenced, there shall accrue, as additional rent hereunder, and be paid within thirty (30) days after Landlord shall have given to Tenant a statement or statements of the amount due, Tenant’s proportionate share of the increase, if any, of Annual Tax Costs over Base Tax Costs.

 

(g)           Partial Year.  If only part of any calendar year shall fall within the Term, the amount computed as additional rent with respect to such calendar year shall be prorated in proportion to the portion of such calendar year falling within the Term (but the expiration or termination of the Term prior to the end of such calendar year shall not impair the Tenant’s

 

9

 

obligation under this Lease to pay such prorated portion of such additional rent with respect to that portion of such year falling within the Term, which shall be paid on demand, as aforesaid).

 

(h)           Payment of Estimated Increase.  Anything in this Lease to the contrary notwithstanding, the Landlord shall be entitled to make from time to time during the Term, a reasonable estimate of the amount of additional rent which may become due under this Lease with respect to any calendar year and to require the Tenant to pay to the Landlord, at the time and in the manner in which the Tenant is required under this Lease to pay the monthly installment of the Fixed Rent with respect to such month, with respect to each calendar month during any such calendar year, one-twelfth (1/12) of the amount which Landlord shall have estimated will become payable on account of increases in Annual Operating Costs and Annual Tax Costs.  In such event, Landlord shall cause the actual amount of the additional rent to be computed and a statement thereof sent to the Tenant within one hundred twenty (120) days following the end of the calendar year (the “Landlord’s Statement”); the Tenant or the Landlord, as the case may be, shall, within thirty (30) days after such statement is sent to Tenant, pay to the other the amount of any deficiency or overpayment, respectively, therein (even if such statement and repayment are delivered following the expiration or sooner termination of this Lease).

 

(i)            Disputes.  Within ninety (90) days after receipt of Landlord’s Statement, Tenant or its staff employees or an independent certified public accountant shall have the right, upon written prior notice to Landlord to audit and review (“Audit”) Landlord’s records relating to Annual Operating Costs, Base Operating Costs, Annual Tax Costs, and Base Tax Costs for the period covered by such Landlord’s Statement, at Tenant’s sole cost (including but not limited to the costs of the Expert, as defined below) except as otherwise expressly provided in this subsection.  For the avoidance of doubt, Tenant shall have the right to audit the Base Operating Costs and Base Tax Costs after receipt of Landlord’s Statement for calendar year 2014, which is understood shall be received by Tenant in 2015.  The Audit shall take place at the office of Landlord where its books and records are located, at a mutually convenient time during Landlord’s regular business hours.  If, after the Audit, Tenant disagrees with Landlord’s calculation of such costs, Tenant shall, within thirty (30) days of completion of the Audit (but not later than one hundred fifty (150) days of Tenant’s receipt of Landlord’s Statement) so advise Landlord in writing and shall specify the reason for such disagreement. If Landlord and Tenant are unable to resolve such disagreement in good faith within thirty (30) days of Landlord’s receipt of such notice, Landlord and Tenant shall select a mutually agreeable certified public accountant (the “Expert”), who will review all information supplied to and by Tenant in connection with said disputed item(s) and determine the amount of the overpayment, if any. The findings of such Expert shall be binding on both parties and not subject to appeal. If the Expert determines that Tenant’s ultimate liability for Annual Operating Costs, Annual Tax Costs and Tenant Energy Costs does not equal the aggregate amount actually paid by Tenant to Landlord during the period which is the subject of the Audit, the appropriate adjustment shall be made between Landlord and Tenant, and any payment required to be made by Landlord or Tenant to the other shall be made within thirty (30) days after the Expert’s final, written determination.  If the Expert determines that there is an overcharge for any twelve month period of more than 5% of the amount invoiced by Landlord for such period, Landlord shall pay the costs of the Expert.  Before conducting the Audit, Tenant must pay the full amount of Tenant’s Proportionate Share of Annual Operating Costs and Annual Tax Costs then in

 

10

 

question. Tenant hereby covenants and agrees that the Expert and any other consultant engaged by Tenant to conduct the Audit shall be compensated on an hourly basis and shall not be compensated based upon a percentage of overcharges it discovers. In no event shall this Lease be terminable based upon any disagreement regarding an adjustment of Operating Expenses. Tenant agrees that the results of any Audit shall be kept strictly confidential by Tenant and shall not be disclosed to any other person or entity other than Tenant’s employees and agents.

 

(j)            Lease Tax.  If federal, state or local law now or hereafter imposes any tax, assessment, levy or other charge (other than any income tax) directly or indirectly upon the Landlord with respect to this Lease or the value thereof, or upon the Tenant’s use or occupancy of the Premises, or upon the rent, additional rent or any other sums payable under this Lease or upon this transaction, except if and to the extent that the same are included in the Annual Tax Costs (all of which are herein called “Lease Taxes”) the Tenant shall pay to the Landlord, as additional rent hereunder and upon demand, the amount of such tax, assessment, levy or other charge, unless the Tenant shall be prohibited by law from paying such tax, assessment, levy or other charge, in which event the Landlord shall be entitled, at its election, to terminate this Lease, to be effective no sooner than twelve (12) months thereafter, by written notice to the Tenant delivered no later than six (6) months after the effectiveness of such change in the tax laws.

 

5.             Covenant to Pay Rent and Additional Rent; Late Charge.

 

Tenant shall, without prior demand, notice, setoff or deduction, pay the Fixed Rent and all other sums which may become due by Tenant under this Lease, at the times, at the places and in the manner provided in this Lease.  All such other sums shall be payable as additional rent for all purposes whether or not they would otherwise be considered rent.  If any payment or any part thereof to be made by Tenant to Landlord pursuant to the terms of this Lease shall have become overdue for a period in excess of ten (10) days, a late charge of five cents ($.05) for each dollar so overdue may be charged by Landlord for the purpose of defraying the expense incident to handling such delinquent payment, together with interest from the date when such payment or part thereof was due at the Lease Interest Rate (defined below) or such lesser amount or rate, if any, as represents the maximum amount or rate Landlord lawfully may charge in respect of Tenant in such circumstances.  Nothing herein shall be construed as waiving any rights of Landlord arising out of any uncured defaults of Tenant, following applicable notice and cure periods, by reason of Landlord’s assessing or accepting any such late payment, the late charge and interest provided herein is separate and apart from any rights relating to remedies of the Landlord after an uncured default by Tenant following applicable notice and cure periods in the performance or observance of the terms of this Lease.  Without limiting the generality of the foregoing, if Tenant shall be in uncured default in the performance of any of its obligations under this Lease after the giving of notice and the passing of any applicable cure periods, Landlord may (but shall not be obligated to do so), in addition to any other rights it may have in law or equity, cure such default on behalf of Tenant and Tenant shall reimburse Landlord upon demand for any sums paid or costs incurred by Landlord in curing such default, including interest thereon at the Lease Interest Rate or such lesser rate as represents the maximum rate Landlord lawfully may charge in respect of Tenant in such circumstances, reasonable attorney’s fees and other legal expenses, which sums and costs together with late charge and interest thereon shall be deemed

 

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additional rent hereunder.  As used in this Lease, the “Lease Interest Rate” shall mean four percent (4%) plus the prime rate.

 

6.             Use.

 

The Premises are to be used only by Tenant for general office purposes, which includes a data center, fire suppression system and an emergency generator, and for no other purpose, provided that Tenant may operate a cafeteria in the Premises solely for the use of Tenant’s employees and business invitees.  Tenant shall not use or occupy the Premises or any part thereof, or permit the Premises or any part thereof to be used or occupied, other than as specified in the sentence immediately preceding.  Tenant shall permit its employees, invitees and guests to park only automobiles, or similarly sized vehicles, on the Property.  Such parking shall be unreserved and be limited to Tenant’s proportionate share of the Building, at a ratio of no less (and no more) than four (4) spaces per 1,000 rentable square feet, provided that so long as Tenant leases the entire Building Landlord will mark the number of spaces determined by Tenant for parking by Tenant’s visitors, as shown on the Parking Diagram attached hereto as Exhibit “M”.

 

7.             Assignment and Subletting.

 

(a)           The Tenant shall not mortgage, pledge or encumber this Lease.  The Tenant shall not assign this Lease or sublet or underlet the Premises or any part thereof, or permit any other person or entity to occupy the Premises or any part thereof, with the exception of the operation of the cafeteria, and of other related, reasonably necessary and/or customarily associated activities accessory to a first class office, by the cafeteria provider or similar vendors (including caterers) and service providers, without on each occasion first obtaining the written consent thereto of the Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  An assignment within the meaning of this Lease is intended to comprehend not only the voluntary action of Tenant, but also any levy or sale on execution or other legal process against Tenant’s goods or other property of the leasehold, and every assignment of assets for the benefit of creditors, and the filing of any petition or order or any adjudication in bankruptcy or under any insolvency, reorganization or other voluntary or compulsory procedure, and the calling of a meeting of creditors, and the filing by or against Tenant of any petition or notice for a composition with creditors, and any assignment by operation of law.  For purposes of the foregoing, a transfer, by any person or persons controlling the Tenant on the date hereof, of such control to a person or persons not controlling the Tenant on the date hereof shall be deemed to be an assignment of this Lease, provided that Tenant shall have the right to assign the Lease or sublet all or a portion of the Premises to the following entities (a “Permitted Transfer”) without Landlord’s approval upon twenty (20) days written notice:  (i) to a successor to all of Tenant’s business if such succession takes place by merger, consolidation, reorganization, act of legislature or otherwise; or (ii) any entity controlled by, controlling, under common control with or otherwise affiliated with Tenant.  No such action taken with or without Landlord’s consent shall in any way relieve or release Tenant from liability for the performance of all terms, covenants and conditions of this Lease.

 

(b)           If Tenant proposes to assign this Lease or sublet all or any portion of the Premises, other than a Permitted Transfer, Tenant shall, prior to the proposed effective date

 

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thereof (the “Effective Date”), deliver to Landlord a copy of the proposed agreement and all ancillary agreements with the proposed assignee or subtenant, as applicable.  Landlord shall then have all the following rights, any of which Landlord may exercise by written notice to Tenant given within twenty (20) days after Landlord receives the foregoing documents:

 

(i)            With respect to a proposed assignment of this Lease, the right to terminate this Lease on the Effective Date as if it were the Expiration Date, upon which termination all of Tenant’s obligations under this Lease shall expire; or

 

(ii)           With respect to a proposed subletting of the entire Premises, the right to terminate this Lease on the Effective Date as if it were the Expiration Date, upon which termination all of Tenant’s obligations under this Lease shall expire; or

 

(iii)          Landlord may consent to the proposed assignment or sublease on such terms and conditions as Landlord may reasonably require, including without limitation, the execution and delivery to Landlord by the assignee of an assumption of liability agreement in form reasonably satisfactory to Landlord, including an assumption by the assignee of all of the obligations of Tenant and the assignee’s ratification of an agreement to be bound by all of the provisions of this Lease, including the warrant of attorney to confess judgment in ejectment; or, in the case of a sublease, the execution and delivery by the subtenant of a written agreement with Landlord, in such form and with such terms, covenants and conditions as may be required by Landlord; or

 

(iv)          Landlord may withhold its consent to the proposed assignment or sublease;  provided, however, that if Landlord declines to exercise one of the options set forth in items (i) or (ii) above, Landlord will not unreasonably withhold its consent so long as the identity, reputation and financial strength of the proposed assignee or subtenant, and the proposed use of the Premises, are reasonably acceptable to Landlord; provided further, however, that Landlord shall in no event be required to consent to any assignment or sublease to a proposed assignee or subtenant that is (w) a government or any subdivision, agency or instrumentality thereof, (x) a school, college, university or educational institution of any type (whether for profit or non-profit), unless such use is strictly for administrative offices, (y) an employment, recruitment or temporary help, service or agency or (z) another tenant of Landlord in Chesterbrook Corporate Center®, unless no other space of similar size is then available for lease within the Chesterbrook Corporate Center®.

 

(c)           In the event that Landlord does consent to the assignment or subletting, Tenant shall have one hundred twenty (120) days from its receipt of Landlord’s notice thereof to enter into the proposed sublease or assignment with the prospective subtenant or assignee described in Tenant’s notice to Landlord.  If such sublease or assignment has not been executed within such time period and with such identified assignee or subtenant, the consent given by Landlord shall be considered to have been withdrawn.

 

(d)           No assignment or sublease, whether with or without the Landlord’s consent, shall in any way relieve or release the Tenant from liability for the performance of all terms, covenants and conditions of this Lease.

 

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(e)           In the event of any sublease or assignment by Tenant of its interest in the Premises or this Lease or any portion thereof, whether or not consented to by Landlord, each monthly installment of Fixed Rent payable hereunder with respect to the Premises or the portion thereof subject to such subletting or assignment shall be increased by an amount equal to (i) in the case of any subletting, the Excess Rent (defined below) for such portion; and, in the case of any assignment, the Excess Rent payable by the assignee as amortized on a monthly basis over the remaining Term of this Lease with interest at the Lease Interest Rate (defined at Article 5 hereof).  As used herein, “Excess Rent” shall mean a sum equal to fifty percent (50%) of the amount by which the rent and other charges or other consideration paid to Tenant by any subtenant or assignee exceeds the pro rata portion, for each month of such subletting or assignment, of the Fixed Rent and additional rent for such space then payable for such month by Tenant to Landlord pursuant to the provisions of this Lease in the absence of this Article 7(e), less the portion applicable to such month, when amortized from the dates incurred over the remaining term of the sublease or assignment, of Tenant’s cost of improvements made or paid for by Tenant to satisfy the needs of the subtenant, and legal fees, leasing commissions and similar capital costs incurred by Tenant in connection with the assignment or subletting.

 

(f)            If Landlord exercises any of its options under Article 7(b)(i) or (ii), Landlord may then lease the Premises or any portion thereof to Tenant’s proposed assignee or subtenant, as the case may be, after the Effective Date without liability whatsoever to Tenant.

 

(g)           In addition to, and not in lieu of, any other rights and remedies available to Landlord therefor, other than with respect to a Permitted Transfer, Landlord shall have the right to terminate this Lease if Tenant seeks to assign, or underlet the Premises without first obtaining Landlord’s written consent and such right shall continue for ten (10) business days after the date that Landlord receives written notice of such assignment or sublet by Tenant.  In the event that Landlord exercises said right to terminate, said termination shall become effective on the date set forth in Landlord’s written notice.

 

(h)           Tenant shall pay Landlord, as additional rent, a reimbursement for all reasonable expenses incurred by Landlord, including counsel fees, in connection with Landlord’s review of any subletting or assignment request from Tenant, irrespective of Landlord’s election to approve or deny such request.

 

8.             Improvement of the Premises; Base Building Improvements.

 

(a)           Base Building Improvements.  Prior to the Commencement Date, Landlord, at Landlord’s sole cost and expense, shall cause the following work (collectively, the “Base Building Improvements”) to be performed to the Premises:  (i) renovate all restrooms in the Building, which renovation shall include new ceiling tiles, new wall paper, new wood, louvered stall doors which run from the floor to the ceiling, new corian stall separators which shall run from floor to ceiling, new automatic faucets and new lights; (ii); complete the repairs needed to the existing heat pumps as set forth in items 1 — 4 in the report issued by Tracey Mechanical, Inc., dated April 16, 2012, attached hereto as Exhibit “D” (the “Tracey Report”); (iii) replace all heat pumps requiring replacement (but in no event fewer than ten percent (10%) of the heat pumps in the Building as of the date of this Lease); (iv) replace the existing roof of the Building; (v) install a unisex restroom on the second floor of the Building, in accordance with the Americans with Disabilities Act, as in force and effect at the time of the work being

 

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performed (“ADA”), in the location on the second floor of the Building as set forth on the Tenant Construction Plans; and (vi) replace two (2) cooling towers on the roof.  The cost of performing the Base Building Improvements shall not be passed through to the Tenant as an Operating Cost.  Landlord shall also equip the Premises with basic fire safety and sprinkler systems and provide access to allow connection of fire and life safety devices as required by the applicable code.  Landlord represents and warrants and covenants that on the Commencement Date the Premises (with the exception of restrooms except the newly constructed restroom described above) shall be delivered in compliance with all local, state and federal codes and laws, including the ADA.  Landlord will coordinate, at its sole cost and expense, the structural, mechanical, electrical and plumbing plans for the Base Building Improvements.

 

(b)           Tenant Construction Plans and Tenant Improvements.  In addition to the Base Building Improvements set forth above, in connection with Tenant’s execution of this Lease and occupancy of the Premises, Landlord shall construct Tenant Improvements as defined in this Article 8(b).  Tenant’s improvement specifications and plans for the Premises shall be prepared by Tenant’s architect, licensed and registered in the Commonwealth of Pennsylvania.  The Tenant Construction Plans will be complete architectural drawings, specifications and finish schedules prepared in sufficient detail to permit Landlord to construct the Tenant Improvements, and shall include partition layout (dimensioned), door location and door schedule including hardware, reflected ceiling plan, telephone and electrical outlets with locations (dimensioned), demolition plan, engineered electrical, engineered HVAC and/or plumbing work, engineered mechanicals, special loading requirements, such as the location of file cabinets and special equipment, openings in the walls or floors, all necessary sections and details for special equipment and fixtures, and finishes including, without limitation, carpentry and millwork, floor coverings, wall coverings, color schedules, and any other special finishes.  The Tenant construction plans shall be prepared in accordance with applicable laws and code requirements.  Landlord stipulates and agrees that prior to the execution of this Lease Landlord received from Tenant a preliminary bid set of the Tenant construction plans for the Premises.  Tenant shall deliver to Landlord no later than July 6, 2012, a 100% complete bid set (incorporating Landlord’s comments to the preliminary bid set delivered to Landlord).  Landlord shall not unreasonably withhold, condition or delay its approval of the Tenant construction plans.  Landlord shall provide its approval of, or comments to, the proposed Tenant construction plans received by Landlord within five (5) business days after such receipt.  If Landlord returns the Tenant construction plans to Tenant with requested modifications, within five (5) business days after receipt of Landlord’s requested modifications, such modifications shall be evaluated by Tenant and, if approved by Tenant, made to the Tenant construction plans, and such modified Tenant construction plans shall be resubmitted to Landlord for Landlord’s approval of, or comments to, such modified Tenant construction plans within five (5) business days after Landlord’s receipt thereof.  This procedure shall be repeated until the Tenant construction plans are finally approved by Landlord and written approval has been delivered to and received by Tenant.  Except for conditions and events beyond the reasonable control of Landlord, Landlord’s failure to notify Tenant of its approval or disapproval of the Tenant construction plans within five (5) business days after Landlord receives the Tenant construction plans or within five (5) business days after Landlord receives any revised Tenant construction plans, as the case may be, shall be deemed a consent by Landlord to the Tenant construction plans.  Upon approval by Landlord,

 

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the Tenant construction plans will be sealed by Tenant’s architect, delivered to Landlord, shall become final and shall not be changed without Landlord’s further approval, which shall not be unreasonably withheld, conditioned or delayed (as finally approved, the “Tenant Construction Plans”).  The Tenant Construction Plans, upon completion, shall be attached hereto as Exhibit “E”.  The work described in the Tenant Construction Plans is referred to in this Lease as the “Tenant Improvements”.

 

(c)           Completion by Landlord as Construction Manager.  Landlord as construction manager shall construct the Tenant Improvements in accordance with the Tenant Construction Plans.  Landlord as construction manager will solicit competitive bids from at least three qualified (3) contractors (none of whom shall be related directly or indirectly to Landlord), including but not limited to Shields Construction Company, Norwood and RH Reinhardt, for the Tenant Improvements, provide such bids electronically to Tenant, and will enter into a construction contract with the general contractor that is the lowest responsible bidder after reviewing the bids with, and giving reasonable consideration to the input of, Tenant.  Upon selection of a general contractor, Landlord will provide to Tenant a detailed construction schedule for completion of the Tenant Improvements.  Landlord shall be paid an administrative and construction management fee for Landlord’s supervision of such construction in an amount equal to three percent (3%) of Landlord’s Cost (as used herein, “Landlord’s Cost” means Landlord’s out-of-pocket contract or purchase price(s) for materials, components, labor, change orders, services, insurance requirements, “general conditions”, permits, and all other costs necessary to complete the Tenant Improvements, but exclusive of soft costs for architectural and engineering fees, voice and data cabling, security and audio visual costs and Landlord’s construction management fee).  The bid package will be in substantially the format attached to this Lease as Exhibit “K”.

 

(d)           Changes to the Tenant Construction Plans.  If, at any time following Landlord’s and Tenant’s final approval of the Tenant Construction Plans, Tenant shall request a change in the Tenant Construction Plans, then Tenant shall prepare and submit to Landlord modified Tenant Construction Plans describing in detail the requirements of construction of the proposed changes.  Landlord shall review each such request promptly following receipt thereof.  Upon Landlord’s review of the proposed change, Landlord shall submit the same to Landlord’s contractor within three (3) business days following receipt thereof and shall request from Landlord’s contractor a response detailing the estimated cost and schedule impact of the proposed change to the Tenant Construction Plans (the “Contractor’s Response”).  Upon Landlord’s receipt of the Contractor’s Response, Landlord shall promptly forward the same to Tenant.  Within three (3) business days of Tenant’s receipt of the Contractor’s Response, Tenant shall either (1) approve and deliver to Landlord the Contractor’ Response, indicating its approval by placing an authorized signature thereon, or (2) disapprove the Contractor’s Response in its entirety.  Approval by Tenant of the Contractor’s Response shall be deemed approval of all cost and schedule impacts set forth therein and shall serve as authorization to incorporate the approved change into the Tenant Construction Plans.  Tenant, Landlord and Landlord’s contractor shall promptly execute a formal change order (directed to Landlord’s contractor) promptly following Landlord’s presentation of the same to Tenant.  No change in the Tenant Construction Plans shall commence until execution of the formal change order by Tenant, Landlord and Landlord’s contractor.  Tenant shall submit to Landlord revised Tenant construction documents (in the form of revised drawings and specifications) to the extent

 

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necessary to reflect the approved change in the Tenant Construction Plans.  The failure of Tenant to deliver the Contractor’s Response to Landlord within three (3) business days of receipt shall be deemed a disapproval of the Contractor’s Response by Tenant.  In the event any specified materials or components shall not be reasonably or readily available, Landlord may propose substitutions of materials and/or components of substantially equivalent grade and quality, consistent with prudent construction practices, subject to the consent of Tenant, which shall not be unreasonably withheld, conditioned or delayed.

 

(e)           Construction Standards.  All construction shall be done in a good and workmanlike manner and shall comply at the time of completion with all applicable laws and requirements of the governmental authorities having jurisdiction.  Landlord shall provide a certificate of occupancy to Tenant upon Substantial Completion of the work.

 

(f)            Tenant Improvement Costs.  Tenant shall, subject to Article 8(g) below, pay the costs, expenses and fees incurred for the construction of the Tenant Improvements, including without limitation (i) architectural, engineering and design costs, (ii) the cost charged to Landlord or Tenant by the general contractor and all subcontractors for performing such construction, (iii) the cost to Landlord of performing directly any portion of such construction, (iv) project management fees, (v) construction permit fees, (vi) costs of built-in furniture, (vii) mechanical, electrical, plumbing and structural engineering fees, and (viii) cabling costs (together, the “Tenant Improvement Costs”).

 

(g)           Tenant Allowance.  Landlord shall provide an allowance to Tenant in the amount of $3,204,188.00 (the “Tenant Allowance”).

 

(h)           Payment for Tenant Improvement Costs.  If the Tenant Improvement Costs are estimated to exceed the Tenant Allowance based upon the budget for the Tenant Improvements, Tenant agrees to prepay such projected excess to Landlord within ten (10) days of being billed therefor, even though such costs have not been incurred.  Upon completion of the Tenant Improvements by Landlord, Tenant shall pay to Landlord all costs incurred in excess of the Tenant Allowance, which were not previously paid by Tenant to Landlord, or Landlord shall promptly reimburse to Tenant any amount of the projected costs of the Tenant Improvements prepaid by Tenant to Landlord which were not actually expended by Landlord for the Tenant Improvements.

 

(i)            Rent Credit.  In the event that the Tenant Allowance exceeds the Tenant Improvement Costs, Landlord shall promptly provide to Tenant a Fixed Rent credit in the amount of the difference between the actual Tenant Improvement Costs and the Tenant Allowance until repaid in full.

 

(j)            Base Building Improvements and Tenant Improvements.  If Landlord bids the Base Building Improvements and the Tenant Improvements as one bid package to the general contractors, Landlord shall be required to delineate the Base Building Improvements from the Tenant Improvements in the bid package and shall require the general contractors bidding the work to provide separate bids for the Base Building Improvements and the Tenant Improvements, respectively.

 

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(k)           Schedule.  Landlord shall use commercially reasonable efforts to cause the Tenant Improvements and the Base Building Improvements to be Substantially Completed not later than the Outside Date as defined in Article 4(b)(v).  During the construction of the Base Building Improvements and the Tenant Improvements, Tenant shall not be required to pay any electric or utility costs and the same shall not be factored into the Base Operating Costs.

 

(l)            Direct Tenant Work.  Notwithstanding anything herein, Tenant’s telephone and data wiring and cabling (hereinafter called the “Direct Tenant Work”) shall be installed in accordance with the Tenant Construction Plans by contractors contracting with Tenant and not with Landlord.  Landlord, at no cost to Tenant, shall provide Tenant riser access and telephone closet access for Tenant’s Direct Tenant Work as well as the installation of any roof top antennae equipment, subject to Landlord’s reasonable approval and applicable corporate park covenants and governmental requirements.

 

(m)          Access; Acceptance of Work.  Landlord shall afford Tenant and its employees, agents and contractors access to the Premises, at reasonable times prior to the Commencement Date and at Tenant’s sole risk and expense, in accordance with Exhibit “F” (“Early Access by Tenant”), for the purposes of (i) inspecting and verifying the completion and integrity of the Base Building Improvements and the Tenant Improvements, and shall advise Landlord within five (5) business days of any objection to the performance of such work; and (ii) beginning thirty (30) days prior to the Commencement Date as then reasonably estimated by Landlord, for installation of Tenant’s furniture and wiring.  Access for such purposes shall not be deemed to constitute possession or occupancy.  Landlord shall promptly undertake and diligently prosecute, at Landlord’s sole cost and expense, the correction of any defective work of which it is notified as aforesaid.  Within thirty (30) days after the Base Building Improvements and the Tenant Improvements are Substantially Complete, Tenant shall give Landlord a written list (the “Final Punch List”) of all contended defects and details of construction, mechanical adjustment or decoration remaining to be performed, if any, in Landlord’s construction work.  Landlord shall correct all items on the Final Punch List that constitute valid defects or applicable details within thirty (30) days after Landlord’s receipt of the Final Punch List, unless the nature of the defect or variance is such that a longer period of time is required to repair or correct the same, in which case Landlord shall exercise due diligence in correcting such defect or variance at the earliest possible date and with a minimum of interference with the operation of Tenant.  Any disagreement that may arise between Landlord and Tenant with respect to whether an item on the Final Punch List constitutes a valid defect shall be reasonably determined by Landlord’s Architect.  The foregoing process for the correction of any defective work shall not apply, however, to latent defects in such work which could not reasonably have been discovered theretofore, provided Tenant notifies Landlord thereof within twelve (12) months after occupancy

 

9.             Alterations.

 

Prior to making or permitting to be made any alterations, additions or improvements (“Alterations”) to the Premises or any part thereof, Tenant shall first submit a detailed description thereof to Landlord and obtain Landlord’s written approval, which shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, Landlord’s approval shall not be required (but prior notice to Landlord describing the proposed Alterations 

 

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must be provided) for (a) painting, (b) carpet refurbishment, or (c) Alterations that: do not exceed $75,000 in the aggregate; and (i) are not visible from the exterior of the Premises; (ii) do not affect any Building system or the structural elements of the Building; (iii) do not require material penetrations into the floor, ceiling or walls; and (iv) do not require material work within the walls, below the floor or above the ceiling.  For any Alterations, Landlord, at Landlord’s option, shall have the right to provide construction management for and on behalf of Tenant, at Tenant’s sole expense, constituting five percent (5%) of the Alteration’s total cost.  All alterations, additions or improvements made by Tenant subsequent to the Tenant Improvements and all fixtures attached to the Premises shall become the property of Landlord and remain at the Premises or, at Landlord’s option, after written notice to Tenant upon providing approval to said Alterations, any or all of the foregoing which may be designated by Landlord shall be removed at the cost of Tenant before the expiration or sooner termination of this Lease and in such event Tenant shall repair all damage to the Premises caused by the installation or removal.  Notwithstanding anything in this Lease, unless otherwise requested by Landlord in writing, Tenant shall remove all Direct Tenant Work (defined at Article 8(l) hereof) and shall repair all damage to the Premises caused by the installation or removal of such Direct Tenant Work.  Subject to Article 16(a)(ix) below, Tenant shall not erect or place, or cause or allow to be erected or placed, any sign, advertising matter, lettering, stand, booth, showcase or other article or matter in or upon the Premises and/or the Building, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that Landlord’s consent may be withheld in its sole discretion for any such improvement which would be on the exterior of the Building or visible from outside of the Building.  Tenant shall not place weights anywhere beyond the safe carrying capacity of the structure.

 

10.          Rules and Regulations.

 

The rules and regulations attached to this Lease as Exhibit “H”, and such additions or modifications thereof as may from time to time be made by Landlord upon written notice to Tenant, shall be deemed a part of this Lease, as conditions, with the same effect as though written herein, and Tenant also covenants that said rules and regulations will be faithfully observed by Tenant, Tenant’s employees, and all those visiting the Premises or claiming under Tenant from and after receipt thereof by Tenant.  Notwithstanding the foregoing, no additions or modifications to the rules and regulations shall increase Tenant’s obligations or decrease its rights under this Lease and Landlord covenants and agrees to enforce the rules and regulations in a uniform and non-discriminatory manner.

 

11.          Fire or Other Casualty.

 

If, during the Term of this Lease, or any renewal or extension thereof, the Building is so damaged by fire or other casualty that the Premises are rendered unfit for occupancy (whether or not the Premises are damaged), and in Landlord’s reasonable opinion cannot be repaired within two hundred seventy (270) days of the fire or other casualty, then, at either Tenant or Landlord’s option, the Term of this Lease upon written notice from Tenant or Landlord given within thirty (30) days after the occurrence of such damage, shall terminate as of the date of the occurrence of such damage.  In such case, Tenant shall pay the rent apportioned to the date of such termination and Landlord may enter upon and repossess the Premises without 

 

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further notice, provided such entry and repossession shall not operate to exclude Tenant or Tenant’s employees or agents from recovering and removing its personal property, furniture, fixtures or equipment from the Premises.  If this Lease is not terminated, Landlord, subject to reasonable delays for insurance adjustments and to delays caused by matters beyond Landlord’s reasonable control, will use commercially reasonable efforts to repair within ninety (90) days whatever portion, if any, of the Premises or of the Building serving the Premises which may have been damaged and Landlord may enter and possess the Premises for that purpose; while the Tenant is deprived of the Premises, the Fixed Rent shall be suspended in proportion to the number of square feet of the Premises rendered untenantable.  If the Premises or the Building shall be damaged so that such damage does not render the Premises or any portion thereof unfit for occupancy, Landlord will use commercially reasonable efforts to repair within ninety (90) days whatever portion, if any, of the Premises or of the Building serving the Premises which may have been damaged and Tenant will continue in possession and rent will not be apportioned or suspended.  Notwithstanding any other provisions of this Article 11, (a) if any damage is directly caused by or directly results from the gross negligence of Tenant, those claiming under Tenant, or their employees or invitees, respectively, rent shall not be suspended or apportioned and Tenant shall pay, as additional rent upon demand, the cost of any repairs, made or to be made, of such damage and of any restorations, made or to be made, as a result of such damage, (b) Landlord shall have no duty to repair or replace any personal property, or any of Tenant’s fixtures or equipment or any alterations, improvements or decorations made by Tenant, or any Direct Tenant Work, and (c) Landlord and Tenant shall have the right to terminate this Lease upon giving written notice to the other at any time within thirty (30) days after the date of the damage if the Premises is damaged by fire or other casualty precluding Tenant from occupying twenty five percent (25%) or more of the Premises occupied by Tenant at the time of the fire or other casualty during the last six (6) months of the Term, unless Tenant, having the right to renew the Term pursuant to an express provision contained in this Lease, has effectively extended the Term for a term in excess of one (1) year following the occurrence of the fire or other casualty.

 

12.          Landlord’s Right to Enter.

 

Upon twenty-four (24) hours prior written notice, Tenant will permit Landlord, Landlord’s agents or employees or any other person or persons authorized in writing by Landlord:

 

(a)           to inspect the Premises at any time,

 

(b)           to enter the Premises, with a Tenant representative present, if Landlord shall so elect for making alterations, improvements or repairs to the Building or for any purpose in connection with the operation or maintenance of the Building, and

 

(c)           to enter and exhibit the Premises to be let, with a Tenant representative present, during the last twelve (12) months of the Term.

 

No such entry shall be treated as a deprivation or interference with Tenant’s use and possession of the Premises.

 

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13.          Insurance.

 

(a)           Intentionally deleted.

 

(b)           Tenant shall maintain throughout the Term, at Tenant’s expense:

 

(i)            Commercial General Liability Insurance with coverage limits of not less than $1,000,000 combined single limit for bodily injury, personal injury, death and property damage per occurrence and per location aggregate insuring tenant and naming Landlord, its general partner, lender(s), the asset manager and the property manager (the names of which shall be provided by Landlord to Tenant and may be changed by Landlord from time to time), as additional insureds insuring against any and all liability of the insureds with respect to the Premises or arising out of or related to any occurrences within the Premises, Tenant’s use or occupancy of the Premises, the condition of the Premises, the acts or omissions of Tenant and its agents, employees, contractors in the Premises and elsewhere in the Building, the installation, construction and/or maintenance of the Tenant Improvements or other alterations or improvements by Tenant;

 

(ii)           Workers’ Compensation coverages required by law, together with Employers’ Liability coverage with a limit of not less than $500,000;

 

(iii)          Property Insurance written on an ISO special causes of loss or similar form, covering the Tenant Improvements, all Tenant-owned equipment, and contents in an amount of not less than the 100% replacement cost without co-insurance;

 

(iv)          Intentionally deleted;

 

(v)           Intentionally deleted;

 

(vi)          Automobile Liability Insurance including coverage for Hired Car and Non-Owned automobile liability with coverage limits of not less than $1,000,000 combined single limit for bodily injury and property damage; and

 

(vii)         Umbrella Liability Insurance with coverage for the full limit carried by the Tenant but not less than $5,000,000 covering over the Commercial General Liability, Automobile Liability and Employers’ Liability limits outlined above.

 

(c)           Landlord, Landlord’s property manager, Landlord’s asset manager and Landlord’s mortgagees, shall be named as additional insured on a primary and non-contributory basis as respects General Liability, Automobile Liability and Employers’ Liability outlined above.  If Tenant purchases higher limits than the limits required under this Article 13, then the additional insured shall be included to the full limit purchased.

 

(d)           All insurance policies shall be issued by insurance carriers having an A.M. Best rating of A- VIII and licensed to do business in the state where the Building is located.

 

(e)           Landlord shall maintain throughout the Term so-called all-risk or fire and extended coverage insurance upon the Building.  The cost of the premiums for such insurance and of any endorsements thereto shall be deemed, for purposes of Article 4 of this Lease, to be part of the costs of operating and maintaining the Property.  Landlord shall have 

 

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the right, at its sole discretion to maintain other insurance as a reasonably prudent landlord would obtain for similar property.

 

(f)            Intentionally deleted.

 

14.          Repairs and Condition of Premises.

 

At the expiration or other termination of this Lease, Tenant shall leave the Premises, and during the Term will keep the same, in good order and condition, ordinary wear and tear, damage by fire or other casualty (which fire or other casualty has not occurred directly as a result of the gross negligence of Tenant or those claiming under Tenant or their employees or invitees respectively) and repairs to be performed by Landlord under Article 16(a)(v) of this Lease alone excepted; for that purpose and, except as stated in this Lease, Tenant will make all necessary repairs to the interior of the Premises, except for Base Building Improvements or any structural components of the Building.  Tenant will use every reasonable precaution against fire and will give Landlord prompt notice of any damage to or accident upon the Premises.  Tenant will also at all times, subject to Article 16(a)(iv) of this Lease, remove all dirt, rubbish, waste and refuse from the Premises and at the expiration or sooner termination of the Term will also have had removed all its property therefrom, to the end that Landlord may again have and repossess the Premises.  Any of Tenant’s property remaining on the Premises on the date of the expiration or termination of the Term shall be deemed abandoned by Tenant and may be removed and disposed of in such manner as Landlord may, at its sole discretion, determine, and Tenant shall reimburse Landlord, upon demand, for the cost of such removal and disposal, plus ten percent (10%) for overhead.

 

15.          Compliance with Law.

 

Throughout the Term of this Lease, but subject to any express provisions of this Lease to the contrary, Tenant shall comply promptly with all laws and ordinances, including, without limitation, the ADA, and all notices, requirements, orders, regulations and recommendations (whatever the nature thereof may be) of any and all the federal, state, county or municipal authorities or of the Board of Fire Underwriters or any insurance organizations, associations or companies, with respect to the Premises and any property appurtenant thereto and Tenant’s use thereof; Tenant also agrees that it shall not knowingly do or commit any act or thing, or suffer to be done or committed any act or thing anywhere on the Property contrary to any of the laws, ordinances, notices, requirements, orders, regulations and recommendations hereinabove referred to in this Article.  During the Term, Landlord shall, at its sole cost and expense and using its commercially reasonable efforts, ensure the continued compliance of the Premises and the Building with all local, state and federal codes and laws, now or hereafter existing, the observance of which are necessary for Tenant’s continued use and occupancy of the Premises as general office space.

 

16.          Services.

 

(a)           Landlord agrees that it shall:

 

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(i)            HVAC.  Furnish heat, ventilation and air conditioning to the Premises, twenty-four (24) hours per day, three hundred sixty-five (365) days per year; year-round heating, ventilating, and air conditioning providing reasonably comfortable conditions (no warmer than 74oF (within reasonable tolerances) in summer months, at no higher than 50% humidity, and at no less than 72°F (within reasonable tolerances) in winter months), provided that in any given room or area of Tenant’s demised premises, the occupancy does not exceed one person for each 150 square feet, and total electric load does not exceed 5 watts per sq. ft. for all purposes, including lighting and power; Landlord shall not be responsible for the failure of the air conditioning system to meet the foregoing design performance specifications if such failure results from excess occupancy of the Premises or if Tenant installs and operates machines and appliances, the installed electrical load of which, when combined with the load of all lighting fixtures, exceeds 5 watts per sq. ft.; if the Premises are used in a manner exceeding the aforementioned occupancy and electric load criteria, Tenant shall pay to Landlord, promptly upon billing, Landlord’s costs of supplying air conditioning resulting from such excess, at such rates as Landlord shall reasonably establish therefor; if due to use of the Premises in a manner exceeding the aforementioned occupancy and electrical load criteria, or due to rearrangement of partitioning after the initial preparation of the Premises, interference with normal operation of the heating, ventilating or air conditioning in the Premises results, necessitating changes in the system servicing the Premises, such changes may be made by Landlord upon request by Tenant at Tenant’s sole cost and expense, subject to the provisions of section (b) of this Article 16.  Tenant agrees at all times to cooperate fully with Landlord and to abide by all of the regulations and requirements which Landlord may prescribe for the proper functioning and protection of the said heating, ventilating and air conditioning system; the foregoing heating, ventilating and air conditioning services shall be subject to any statute, ordinance, rule, regulation, resolution or recommendation for energy conservation which may be promulgated by any governmental agency or organization and which Landlord in good faith may elect to abide by or shall be required to abide by.  Notwithstanding the foregoing or anything to the contrary contained herein, Tenant shall be solely responsible at its sole cost and expense, for the maintenance and repair of any supplemental heat, ventilation and air conditioning unit in the Premises whether installed by Tenant or in the Premises on the Commencement Date.  Supplemental HVAC will be limited to any HVAC equipment for Tenant’s data center, currently located on the third floor of the Building and for the first-floor room of the Building in which the UPS batteries are housed;

 

(ii)           Elevators.  Provide two (2) passenger elevators to service the Premises twenty-four (24) hours per day, three hundred sixty-five (365) days per year;

 

(iii)          Access.  Furnish to Tenant’s employees and agents access to the Premises at all times, subject to compliance with such security measures as shall be in effect for the Building;

 

(iv)          Janitorial.  Provide to the Premises janitorial service in accordance with the schedule annexed hereto as Exhibit “G”; any and all additional or specialized janitorial service desired by Tenant, beyond those services listed on Exhibit “G,” including but not limited to janitorial service for Tenant’s cafeteria, shall be contracted for by Tenant directly with Landlord’s janitorial agent and the cost and payment thereof shall be and remain the sole responsibility of Tenant; no trash removal services will be provided by Landlord 

 

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for the removal of trash or refuse from the cafeteria or other trash or refuse of a character or quantity not customary for normal office users, unless Tenant shall first agree to the payment of Landlord’s cost thereof;

 

(v)           Repairs.  Make all structural repairs to the Building, all repairs which may be needed to the mechanical, HVAC, electrical and plumbing systems in and servicing the Premises (excluding repairs to any non-building standard fixtures, supplemental HVAC units and equipment of Tenant, and/or other improvements installed or made by or at the request of Tenant all of which must be repaired and maintained by the Tenant), and all repairs to exterior windows and glass (including caulking and weatherstripping); in the event that any repair is required by reason of the negligence or willful misconduct of Tenant or its agents, employees, invitees, express or implied, Landlord may make such repair and the cost thereof, plus ten percent (10%) of such cost for Landlord’s overhead, shall be paid by Tenant to Landlord within thirty (30) days after written demand, unless Landlord shall have actually recovered or has the right to recover such cost through insurance proceeds;

 

(vi)          Water.  Provide hot and cold water, for drinking, lavatory, toilet and ordinary cleaning purposes, at each floor;

 

(vii)         Public Areas.  Keep and maintain the public areas (including exterior landscaping) and facilities of the Building clean and in good working order and condition, and the sidewalks and parking areas adjoining the Building in good repair and free from accumulations of snow and ice;

 

(viii)        Electricity.  Provide transmission facilities to the Premises as reasonably required by Tenant but in no event exceeding 5 watts per square foot of rentable area for the use of Tenant in the Premises; Tenant agrees to become an individually metered customer of the public utility selected by Landlord to provide electricity to the Building, and to pay for electric service to the Premises directly to such public utility; Landlord shall not be liable in any way to Tenant for failure or defect in the supply or character of electric energy furnished to the Premises or to the Building by reason of any requirement, act or omission of the public utility serving the Building with electricity or for any other reason whatsoever not attributable to Landlord; Tenant shall pay directly to the public utility company the amount of such bill; Landlord shall furnish and install all replacement tubes, lamps, bulbs and ballasts required in the Premises, at Tenant’s expense; Tenant’s use of electric energy in the Premises shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Premises;

 

(ix)          Signage.  Tenant shall have the right, with Landlord’s prior approval (which shall not be unreasonably withheld, delayed or conditioned), to install signs within the Building, provided that they are not visible from outside of the Building.  Tenant shall have the exclusive right to have its name on the Building’s monument sign, backlit or otherwise illuminated, subject to applicable ordinances and covenants and Landlord’s approval of any proposed signage, for so long as Landlord has not recaptured any portion of the Premises pursuant to Section 39 below and following such recapture event Tenant’s use of the monument sign shall not be more than Tenant’s proportionate share of the area of the monument sign.  Landlord stipulates that the signage depicted in Exhibit “N”, attached hereto, is approved in accordance with the requirements of this provision.

 

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(x)           Heat Pumps.  During each year of the Term, Landlord shall have the Building HVAC system evaluated by an independent, reputable third party HVAC contractor selected by Landlord and reasonably acceptable to Tenant and replace, at its sole cost, any heat pump units that are deemed no longer serviceable.  In addition, Landlord will, at all times, store four new heat pump units (two (2) — 3 ton units and two (2) — 4 ton units) exclusively for the Building so that they can be installed within twenty-four (24) hours and during off-hours.

 

(b)           Special Equipment.  Other than installed by Landlord as components of the Tenant Improvements, Tenant shall not install any equipment of any kind or nature whatsoever which would or might necessitate any changes, replacements or additions to any of the heating, ventilating, air conditioning, electric, sanitary, elevator or other systems serving the Premises or any other portion of the Building; or to any of the services required of Landlord under this Lease, without the prior written consent of the Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  In the event that such consent is granted, such replacements, changes or additions shall be paid for by Tenant.  At the expiration or earlier termination of the Term, Tenant shall pay to Landlord Landlord’s cost of restoring such systems (other than those installed by Landlord as components of the Tenant Improvements) to their condition prior to such replacements, changes or additions.

 

(c)           Interruption of Service.  In case of accident, strikes, inability to obtain supplies, breakdowns, repairs, renewals or improvements to the Building or replacement of machinery therein, the operation of any of the elevators or other machinery or apparatus may be changed or suspended.  As to heat, ventilation, air conditioning, cleaning service, electricity and elevator service, and any other services required to be provided by Landlord, Landlord shall not be responsible or liable in any way for any failure, interruption or inadequacy in the quantity or quality of the same where directly caused by war, civil commotion, governmental restrictions, prohibitions or other regulations, strikes, labor disturbances, inability to obtain adequate supplies or materials, casualties, repairs, replacements, or causes beyond Landlord’s reasonable control, but only so long as Landlord notifies Tenant within two (2) business days of such occurrence and Landlord uses commercially reasonable efforts to mitigate any such failure, interruption or inadequacy.  Notwithstanding the foregoing, however, if a cessation of the elevator or other mechanical apparatus, electric, heating, ventilation or air conditioning service occurs which (i) materially impairs the ability of Tenant to access or utilize all or a substantial portion of the Premises due to such condition, (ii) was caused by, or continues due to, the negligence or willful misconduct of Landlord or Landlord’s agents or employees, and (iii) which continues for more than three (3) business days, then Fixed Rent shall abate beginning on the fourth (4th) business day until service is fully restored.

 

17.          Notice of Breakage, Fire, Theft.

 

Tenant shall give to Landlord prompt written notice, but in no event later than forty-eight (48) hours after actual knowledge of the occurrence in question, of any

 

(a)           accident or breakage or defects in the window glass, wires, plumbing or heating ventilating or cooling apparatus, elevators or other apparatus, walls or ceiling tiles,

 

(b)           fire or other casualty, or

 

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(c)           theft.

 

18.          (Intentionally Deleted).

 

19.          Mechanics’ and Other Liens.

 

(a)           Tenant covenants that it shall not (and has no authority to) create or allow any encumbrance against the Premises, the Property, the Building or any part of any of them or Landlord’s interest therein.

 

(b)           Tenant covenants that it shall not suffer or permit to be created, or to remain, any lien or claim thereof (arising out of any work done or services, material, equipment or supplies furnished for or at the request of Tenant or by or for any contractor or subcontractor of Tenant, but not to the extent resulting from the acts or omissions of Landlord or Landlord’s agents or employees) which is or may become a lien upon the Premises, the Property, the Building or any part of any of them or the income therefrom or any fixture, equipment or similar property therein.

 

(c)           If any lien or claim shall be filed, Tenant, within thirty (30) days after the filing thereof, shall cause the same to be discharged of record by payment, deposit, bond or otherwise.  If Tenant shall fail to cause such lien or claim to be discharged and removed from record within that period, then, without obligation to investigate the validity thereof and in addition to any other right or remedy Landlord may have, Landlord may, but shall not be obligated to, contest the lien or claim or discharge it by payment, deposit, bond or otherwise; and Landlord shall be entitled, if Landlord so decides, to compel the prosecution of an action for the foreclosure of such lien by the lienor and to pay the amount of the judgment in favor of the lienor with interest and costs.  Any amounts so paid by Landlord and all costs and expenses, including attorneys’ fees, incurred by Landlord in connection therewith, together with interest at the Lease Interest Rate from the respective dates of Landlord’s making of the payment or incurring of the cost or expense, shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord within thirty (30) days after specifically detailed demand therefor.

 

(d)           Notwithstanding anything to the contrary in this Lease or in any other writing signed by Landlord, neither this Lease nor any other writing signed by Landlord shall be construed as evidencing, indicating, or causing an appearance that any erection, construction, alteration or repair to be done, or caused to be done, by Tenant is or was in fact for the immediate use and benefit of Landlord.  Further, notwithstanding anything contained herein to the contrary, nothing contained in or contemplated by this Lease shall be deemed or construed in any way to constitute the consent or request on the part of Landlord for the performance of any work or services or the furnishing of any materials for which any lien could be filed against the Premises or the Building or the Property or any part of any of them, nor as giving Tenant any right, power, or authority to contract for or permit the performance of any work or services or the furnishing of any materials for which any lien could be filed against the Premises, the Building, the Property or any part of any of them.

 

(e)           Promptly after the completion of any work or the delivery of any material to the Premises by any contractor, subcontractor or materialman engaged by Tenant,

 

26

 

Tenant shall deliver to the Landlord partial and/or final releases of liens (whichever shall be applicable) from each such contractor, subcontractor or materialman for work that has been performed and paid for to date and, upon completion of any project, an affidavit from its contractor that it and all subcontractors and materialmen hired by it have been paid for all work done with respect to the project.  With respect to any project that is bonded, prior to the commencement of any work Tenant shall also provide Landlord with a copy of a Waiver of Liens from its contractor which has been filed with the Prothonotary of Chester County, Pennsylvania.

 

20.          Force Majeure.  If either party shall be delayed or hindered in or prevented from the performance of any act required by this Lease by reason of strikes, lockouts, labor troubles, inability to procure material, failure of power, restrictive governmental laws or regulations, inclement weather, riots, insurrection, war or other reason of a like nature not the fault of the party delayed in performing work or doing as required under this Lease, the period for the performance of such act shall be extended for a period equivalent to the period of such delay.  Notwithstanding the foregoing, the provisions of this Article shall at no time operate to excuse Tenant from any obligations for payment of rent or additional rent.  To invoke a Force Majeure event, the invoking party must deliver to the other party written notice of its invocation not later than ten (10) days immediately following the occurrence of the event giving rise thereto or lose such right to invoke Force Majeure.

 

21.          Defaults By Tenant - Remedies.

 

If any of the following shall occur:

 

(a)           Tenant does not pay in full when due any and all installments of rent (whether Fixed Rent or additional rent) or any other charge or payment whether or not herein included as rent after five (5) days written notice, provided that such notice shall not be required more than two (2) times in any twelve (12) month period;

 

(b)           Tenant violates or fails to perform or comply with any non-monetary covenant, agreement or condition herein contained, and such violation or failure continues for thirty (30) days after notice thereof by Landlord to Tenant; provided however that if such failure is not reasonably susceptible of cure within such thirty (30) day period and provided Tenant is diligently pursuing the remedies necessary to cure such failure during the thirty (30) day period, Tenant shall have such additional time as is reasonably necessary to cure such failure;

 

(c)           Intentionally deleted; or

 

(d)           An involuntary case under the federal bankruptcy law as now or hereafter constituted is commenced against Tenant or any guarantor or surety of Tenant’s obligations under this Lease (“Guarantor”), or under any other applicable federal or state bankruptcy, insolvency, reorganization, or other similar law, or there is filed against Tenant or a Guarantor a petition seeking the appointment of a receiver, liquidator or assignee, custodian, trustee, sequestrator (or similar official) of Tenant or a Guarantor of any substantial part of Tenant’s or a Guarantor’s property, or seeking the winding-up or liquidation of Tenant’s or a Guarantor’s affairs and such involuntary case or petition is not dismissed within sixty (60) days 

 

27

 

after the filing thereof, of if Tenant or a Guarantor commences a voluntary case or institutes proceedings to be adjudicated as bankrupt or insolvent or consents to the entry of an order for relief under the federal bankruptcy laws as now or hereafter constituted, or any other applicable federal or state bankruptcy or insolvency or other similar law, or consents to the appointment of or taking possession by a receiver or liquidator or assignee, trustee, custodian, sequestrator (or other similar official) of Tenant or a Guarantor of any substantial part of Tenant’s or a Guarantor’s property, or if Tenant or any Guarantor makes any assignment for the benefit of creditors or admits in writing its inability to pay its debts generally as they become due or fails to generally pay its debts as they become due or if Tenant is levied upon and is about to be sold out upon the Premises by any sheriff, marshall or constable or Tenant or its stockholders or Board of Directors or any committee thereof takes any action in contemplation, preparation or furtherance of or for any of the foregoing, or, if Tenant or any Guarantor is a corporation and is dissolved or liquidated,

 

Then, and in any such event, at the sole option of Landlord,

 

(i)            Intentionally omitted.

 

(ii)           Landlord may terminate this Lease by written notice to Tenant.  If Landlord elects to terminate this Lease, Landlord, in addition to Landlord’s other remedies, may recover from Tenant a judgment for damages equal to the sum of the following:

 

(A)          the unpaid rent and other sums which became due up to the time of such termination plus interest from the dates such rent and other sums were due to the date of the judgment at the Lease Interest Rate; plus

 

(B)          the present value at the time of judgment of the amount by which the unpaid rent and other sums which would have become due (had this Lease not been terminated) after termination until the date of the judgment exceeds the amount of loss of such rental and other sums Tenant proves could have been reasonably avoided; plus

 

(C)          the amount (as discounted at the rate of six percent (6%) per annum) by which the unpaid rent and other sums which would have become due (had this Lease not been terminated) for the balance of the term after the date of judgment exceeds the amount of loss of such rental and other sums that Tenant proves could have been reasonably avoided; plus

 

(D)          any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course would be likely to result therefrom including, without limitation, the cost of repairing the Premises and reasonable attorneys fees; plus

 

(E)           at Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted by applicable law.

 

As used in the foregoing clause (B), the “present value at the time of judgment” shall be computed by adding to the rent past due or which would have become due 

 

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interest at the Lease Interest Rate from the dates such rent was or would have become due to the date of the judgment; and/or

 

(iii)          Landlord may terminate Tenant’s right of possession and may reenter and repossess the Premises by legal proceedings, without terminating this Lease.  After reentry or retaking or recovering of the Premises, whether by termination of this Lease or not, Landlord agrees to mitigate its damages hereunder and may, but shall be under no obligation to, make such alterations and repairs, as Landlord may deem then necessary or advisable and shall use commercially reasonable efforts to relet the Premises or any part or parts thereof (but shall be under no obligation to let the Premises before letting other premises owned by Landlord), either in Landlord’s name or otherwise, for a term or terms which may at Landlord’s option be less than or exceed the period which otherwise would have constituted the balance of the Term of this Lease and at such rent or rents and upon such other terms and conditions as in Landlord’s sole discretion may seem advisable and to such person or persons as may in Landlord’s sole discretion seem best; and whether or not the Premises are relet, Tenant shall be liable for any loss, for such period as is or would have been the balance of the term of this Lease, of rent and all other sums payable under this Lease, plus the reasonable and actual costs and expenses of reletting and of redecorating, remodeling or making repairs and alterations to the Premises necessary for reletting, the amount of such liability to be computed monthly and to be paid by Tenant to Landlord from time to time upon demand.  Landlord shall in no event be liable for, nor shall any damages or other sums to be paid by Tenant to Landlord be reduced by, failure to relet the Premises or failure to collect the rent or other sums from any reletting.  Tenant shall not be entitled to any rents or other sums received by Landlord in excess of those provided for in this Lease.  Tenant agrees that Landlord may file suit to recover any rent and other sums falling due under the terms of this Article from time to time and that no suit or recovery of any amount due hereunder to Landlord shall be any defense to any subsequent action brought for any other amount due hereunder to Landlord.  Tenant, for Tenant and Tenant’s successors and assigns, after Landlord’s delivery to Tenant of notice of default and the passing of any applicable cure periods, hereby irrevocably constitutes and appoints Landlord, Tenant’s and their agent to collect the rents due or to become due under all subleases of the Premises or any parts thereof and Landlord shall apply such rents to Tenant’s unpaid rental obligations under this Lease.  Notwithstanding any reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for Tenant’s previous uncured breach.

 

Whenever Landlord shall have the right to reenter the Premises under this Lease, it shall have the right to remove all persons and property from the Premises and either treat such property as abandoned or at Landlord’s option store it in a public warehouse or elsewhere at the cost of and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby.

 

Tenant waives the right to any notice to remove as may be specified in the Landlord and Tenant Act of Pennsylvania, Act of April 6, 1951, as amended, or any similar or successor provision of law.

 

For the purposes of computing “the whole balance of rent and all other sums payable hereunder for the entire balance of the term of this Lease,” “the unpaid rent and 

 

29

 

other sums which would have become due (had this Lease not been terminated) after termination until the date of the judgment” and “the unpaid rent and other sums which would have become due (had this Lease not been terminated) for the balance of the term after the date of judgment,” as such quoted or any similar phrases are used in this Article 21, the amounts of additional rents which would have been due per year under this Lease shall be such amounts as Landlord shall reasonably estimate to be the per annum rates of additional rent for the calendar year during which this Lease was terminated or during which rent was accelerated, increasing annually on the first day of each calendar year thereafter at the rate of five percent (5%) per annum.

 

The parties recognize that no adequate remedy at law may exist for a breach of Articles 6, 7 and 10 hereof.  Accordingly, Landlord may seek specific performance of any provision of Articles 6, 7 and 10 hereof.  Neither such right nor its exercise shall limit any other remedies which Landlord may have against Tenant for a breach of such Articles, including, without limitation, all remedies available under this Article 21.  The reference herein to specific performance in connection with Articles 6, 7 and 10 shall not preclude the availability of specific performance, in any appropriate case, for the breach or threatened breach of any other provision of this Lease.

 

In addition to other remedies available to Landlord herein, Landlord may (but shall not be obligated to do so), cure any uncured default after applicable notice and cure periods on behalf of Tenant, and Tenant shall reimburse Landlord upon demand for all reasonable costs incurred by Landlord in curing such default, including, without limitation, reasonable attorneys’ fees and other legal expenses, together with interest thereon at the Lease Interest Rate, which costs and interest thereon shall be deemed additional rent hereunder.

 

Also in addition to, and not in lieu of any of the foregoing rights granted to Landlord:

 

(A)          Intentionally deleted.

 

(B)          WHEN THIS LEASE OR TENANT’S RIGHT OF POSSESSION SHALL BE TERMINATED BY COVENANT OR CONDITION BROKEN, OR FOR ANY OTHER REASON, EITHER DURING THE TERM OF THIS LEASE, AND ALSO WHEN AND AS SOON AS SUCH TERM SHALL HAVE EXPIRED OR BEEN TERMINATED, TENANT HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ANY COURT OF RECORD AS ATTORNEY FOR TENANT AND ANY PERSONS CLAIMING THROUGH OR UNDER TENANT TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING THROUGH OR UNDER TENANT FOR THE RECOVERY BY LANDLORD OF POSSESSION OF THE PREMISES, FOR WHICH THIS LEASE SHALL BE SUFFICIENT WARRANT, WHEREUPON, IF LANDLORD SO DESIRES, A WRIT OF EXECUTION OR OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED THE SAME SHALL BE DETERMINED, CANCELED OR SUSPENDED AND POSSESSION OF THE PREMISES HEREBY DEMISED REMAIN IN OR BE RESTORED TO TENANT OR ANY PERSON CLAIMING THROUGH OR UNDER TENANT, LANDLORD SHALL HAVE THE RIGHT, 

 

30

 

UPON ANY SUBSEQUENT DEFAULT OR DEFAULTS, FOLLOWING NOTICE AND APPLICABLE CURE PERIODS, OR UPON ANY SUBSEQUENT TERMINATION OR EXPIRATION OF THIS LEASE OR ANY RENEWAL OR EXTENSION HEREOF, OR OF TENANT’S RIGHT OF POSSESSION, AS HEREINBEFORE SET FORTH, TO CONFESS JUDGMENT IN EJECTMENT AS HEREINBEFORE SET FORTH ONE OR MORE ADDITIONAL TIMES TO RECOVER POSSESSION OF THE SAID PREMISES.

 

IN ANY ACTION OF OR FOR EJECTMENT OR OTHER SUMS, IF LANDLORD SHALL FIRST CAUSE TO BE FILED IN SUCH ACTION AN AFFIDAVIT MADE BY IT OR SOMEONE ACTING FOR IT SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF JUDGMENT, SUCH AFFIDAVIT SHALL BE CONCLUSIVE EVIDENCE OF SUCH FACTS; AND IF A TRUE COPY OF THIS LEASE (AND OF THE TRUTH OF THE COPY SUCH AFFIDAVIT SHALL BE SUFFICIENT EVIDENCE) BE FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A WARRANT OF ATTORNEY, ANY RULE OF COURT, CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING.  TENANT RELEASES TO LANDLORD, AND TO ANY AND ALL ATTORNEYS WHO MA Y APPEAR FOR TENANT, ALL PROCEDURAL ERRORS IN ANY PROCEEDINGS TAKEN BY LANDLORD, WHETHER BY VIRTUE OF THE WARRANTS OF ATTORNEY CONTAINED IN THIS LEASE OR NOT, AND ALL LIABILITY THEREFOR.

 

As used in this Article 21, the “term” shall include the Term of this Lease and any renewals or extensions thereof to which Tenant shall have become bound.

 

22.          Remedies Cumulative.

 

All remedies available to Landlord under this Lease and at law and in equity shall be cumulative and concurrent.  No termination of this Lease or taking or recovering possession of the Premises shall deprive Landlord of any remedies or actions against Tenant for rent, for charges or for damages for the breach of any covenant or condition herein contained, nor shall the bringing of any such action for rent, charges or breach of covenant or condition, nor the resort to any other remedy or right for the recovery of rent, charges or demands for such breach be construed as a waiver or release of the right to insist upon the forfeiture and to obtain possession.  No reentering or taking possession of the Premises, or making of repairs, alterations or improvements thereto, or reletting thereof, shall be construed as an election on the part of Landlord to terminate this Lease unless written notice of such intention be given by Landlord to Tenant.  The failure of either party to insist upon strict and/or prompt performance of the terms, agreements, covenants and conditions of this Lease or any of them, and/or the acceptance of such performance thereafter shall not constitute or be construed as a waiver of that party’s right to thereafter enforce the same strictly according to the tenor thereof in the event of a continuing or subsequent default, each following applicable notice and cure periods.

 

23.          Excepted from Premises.

 

In the event that Exhibit “A” or “E” shows as being within the Premises, hallways, passageways, stairways, elevators, or other means of access to and from the Premises or the upper and lower portions of the Building, the space occupied by the said hallways, 

 

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passageways, stairways, elevators and other means of access, although within the Premises as described hereinabove, shall be taken to be excepted therefrom and reserved to Landlord or to the other lessees of the Building and the same shall not be considered a portion of the Premises.  All ducts, pipes, wires or other equipment used in the operation of the Building, or any part thereof, and any space occupied thereby, whether or not within the Premises as described hereinabove, shall likewise be excepted and reserved from the Premises, and Tenant shall not remove or tamper with or use the same and will permit Landlord to enter the Premises to service, replace, remove or repair the same.

 

24.          Lease Subordinated.

 

(a)           This Lease shall be subject and subordinate at all times to the lien of any mortgage, deed of trust, ground lease, installment sale agreement and/or other instrument or encumbrance heretofore or hereafter placed upon any or all of Landlord’s interest or estate in the Premises or the remainder of the Property and of all renewals, modifications, consolidations, replacements and extensions thereof (all of which are hereinafter referred to collectively as a “mortgage”), all automatically and without the necessity of any further action on the part of the Tenant to effectuate such subordination, provided that Landlord shall cause the holder of such mortgage as of the date of this Lease to enter into with Tenant a subordination, non-disturbance and attornment agreement (an “SNDA”) in form and substance reasonably satisfactory to the holder of such mortgage and Tenant within thirty (30) days following the execution of this Lease. The form attached to this Lease as Exhibit “I” is hereby agreed to be an acceptable form of SNDA.

 

(b)           As to any mortgage, trust deed or other security instrument which is filed against the Property after the date of this Lease (each, together with all replacements, renewals or extensions thereof, a “Future Mortgage”), the subordination provided for in this Article 24 is subject to the express condition that so long as Tenant is not in an uncured default under this Lease beyond any applicable notice and grace period, (i) Tenant’s possession shall not be disturbed by such mortgagee and (ii) this Lease shall not be canceled or terminated by such mortgagee and shall continue in full force and effect upon such foreclosure as a direct lease between Tenant and the person or entity acquiring the interest of Landlord, upon all the terms, covenants, conditions and agreements set forth in this Lease.  Tenant shall, at the request of a Future Mortgage, attorn to such holder, and shall execute and deliver, upon demand by the Landlord or the Future Mortgage, such further instrument or instruments in form and substance reasonably satisfactory to Tenant and evidencing such subordination and non-disturbance of the Tenant’s right, title and interest under this Lease to the lien of the Future Mortgage.  The form attached to this Lease as Exhibit “I” is hereby agreed to be an acceptable form of SNDA.

 

(c)           Anything contained in the foregoing provisions of this Article to the contrary notwithstanding, any such holder may at any time subordinate its mortgage to the operation and effect of this Lease, without the necessity of obtaining the Tenant’s consent thereto, by giving notice of the same in writing to the Tenant, and thereupon this Lease shall be deemed to be prior to such mortgage without regard to their respective dates of execution, delivery and/or recordation, and in that event such holder shall have the same rights with respect to this Lease as though this Lease shall have been executed, delivered and recorded prior to the execution and delivery of such mortgage.

 

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25.          Condemnation.

 

(a)           If the whole or a substantial part of the Building shall be taken or condemned for a public or quasi-public use under any statute or by right of eminent domain or private purchase in lieu thereof by any competent authority, Tenant shall have no claim against Landlord and shall not have any claim or right to any portion of the amount that may be awarded as damages or paid as a result of any such condemnation or purchase including, without limit, any right of Tenant to damages for loss of its leasehold; all right of Tenant to damages therefor are hereby assigned by Tenant to Landlord.  The foregoing shall not, however, deprive Tenant of any separate award for moving expenses, business dislocation damages or for any other award which would not reduce the award payable to Landlord.  Upon the date the right to possession shall vest in the condemning authority, this Lease shall automatically cease and terminate with rent adjusted to such date and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease.

 

(b)           In the event of any temporary eminent domain taking of the Premises or any part thereof for temporary use, this Lease shall not be affected in any manner, the Term shall not be reduced, and the Tenant shall continue to pay in full the Fixed Rent, additional rent and all other sums of money and charges in this Lease reserved and provided to be paid by Tenant and Tenant shall be entitled to receive for itself such portion of any eminent domain award made for such temporary use with respect to the period of the taking which is within the Term; provided that if such temporary taking shall remain in full force at the expiration or earlier termination of this Lease, the award shall be apportioned between Landlord and Tenant in proportion to the respective portions of the period of temporary taking which falls within the Term and which falls outside the Term.

 

26.          (Intentionally Deleted).

 

27.          Notices.

 

(a)           Each notice, demand, request or other communication required or permitted under the terms of this Lease shall be in writing and, unless and until otherwise specified in a written notice by the party to receive it, shall be sent to the parties at the following respective addresses:

 

If intended for Tenant prior to Commencement Date:

 

Auxilium Pharmaceuticals, Inc.

40 Valley Stream Parkway

Malvern, PA 19355

Attention:  Andrew I. Koven, Chief Administrative Officer & General Counsel

 

with a copy to:

 

Tracy L. Steele, Esq.

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA  19103

 

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If intended for Tenant after Commencement Date:

 

Auxilium Pharmaceuticals, Inc.

640 Lee Road

Wayne, PA  19087

Attention:  Andrew I. Koven, Chief Administrative Officer & General Counsel

 

with a copy to:

 

Tracy L. Steele, Esq.

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA  19103

 

If intended for Landlord:

 

Chesterbrook Partners, LP

955 Chesterbrook Boulevard, Suite 120

Wayne, PA  19087-5615

Attention:  Property Manager

 

with a copy to:

 

Chesterbrook Partners, LP

One Pitcairn Place

165 Township Line Road

Jenkintown, PA  19046

Attention:  Director of Property Management

 

with a copy to:

 

Saul Ewing LLP

1200 Liberty Ridge Drive, Suite 200

Wayne, PA  19087

Attention:  Michael S. Burg, Esquire

 

Notices may be given on behalf of any party by its legal counsel.

 

(b)           Each such notice, demand, request or other communication shall be deemed to have been properly given for all purposes if (i) hand delivered, or (ii) mailed by registered or certified mail of the United States Postal Service, return receipt requested, postage prepaid, or (iii) delivered to a nationally recognized overnight courier service for next business day (or sooner) delivery, or

 

(c)           Each such notice, demand, request or other communication shall be deemed to have been received by its addressee, and to have been effectively given, upon the earlier of (i) actual delivery, (ii) refusal of acceptance at the proper address, or (iii) three (3) business days after deposit thereof at any main or branch United States post office, if sent, in accordance with clause (ii) of subsection (b) of this Article and (iv) one (1) business day after delivery to the courier, if sent pursuant to clause (iii) of subsection (b) of this Article.

 

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28.          Definition of “the Landlord”.

 

The word “Landlord” is used herein to include the Landlord named above and any subsequent owner of such Landlord’s interest in the Building in which the Premises are located, as well as their respective heirs, personal representatives, successors and assigns, each of whom shall have the same rights, remedies, powers, authorities and privileges as it would have had had it originally signed this Lease as Landlord, including the right to proceed in its own name to enter judgment by confession or otherwise, but any such person, whether or not named herein, shall have no continued liability hereunder after it ceases to hold such interest.  Neither Landlord nor any principal of or partner in Landlord, whether disclosed or undisclosed, shall be under any personal liability with respect to any of the provisions of this Lease and if Landlord shall default in the performance of Landlord’s obligations under this Lease or otherwise, Tenant shall look solely to the equity of Landlord in its interest in the Property for the satisfaction of Tenant’s remedies.  It is expressly understood and agreed that Landlord’s liability under the terms, covenants, conditions, warranties and obligations of this Lease shall in no event exceed the loss of Landlord’s equity in its interest in the Property.

 

29.          Definition of “the Tenant”.

 

As used herein, the term “Tenant” shall be deemed to refer to each and every entity hereinabove named as tenant and to such entities’ respective successors and assigns, each of whom shall have the same obligations, liabilities, rights and privileges as it would have possessed had it originally executed this Lease as the Tenant.  However, no such rights, privileges or powers shall inure to the benefit of any assignee of the Tenant, immediate or remote, unless (a) pursuant to a Permitted Transfer, (b) the assignment to such assignee has been approved in writing by Landlord if required by the provisions of this Lease and such assignee shall have executed and delivered to Landlord the written documents that may be required by Landlord referred to hereinbefore or (c) Landlord has consented to a sale of all the assets of Tenant or Tenant is otherwise acquired.

 

30.          Estoppel Certificate; Mortgagee Lease Comments.

 

Tenant shall from time to time, within ten (10) business days after Landlord shall have requested the same of Tenant, execute, enseal, acknowledge and deliver to Landlord a written instrument in recordable form.

 

(a)           certifying

 

(i)            that this Lease is in full force and effect and has not been modified, supplemented or amended in any way (or, if there have been modifications, supplements or amendments thereto, that it is in full force and effect as modified, supplemented or amended and stating such modifications, supplements and amendments) and that the Lease (as modified, supplemented or amended, as aforesaid) represents the entire agreement among Landlord and Tenant as to the Premises and the leasehold;

 

(ii)           the dates to which the Fixed Rent, additional rent and other charges arising under this Lease have been paid, if any;

 

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(iii)          the amount of any prepaid rents or credits due to Tenant, if any; and

 

(iv)          if applicable, that Tenant has accepted the possession of the Premises and has entered into occupancy of the Premises and the date on which the Term shall have commenced and the corresponding expiration date;

 

(b)           stating whether or not to the knowledge of the signer of such certificate, without independent investigation or inquiry or personal liability, all material conditions under the Lease to be performed by Landlord prior thereto have been satisfied and whether or not Landlord is then in default following applicable notice and cure periods in the performance of any covenant, agreement or condition contained in this Lease and specifying, if any, each such unsatisfied condition and each such default of which the signer may have knowledge; and

 

(c)           stating any other fact or certifying any other condition customarily and reasonably requested by a landlord or requested by any mortgagee or prospective mortgagee or purchaser of the Property or of any interest therein.  It is intended that any statement delivered pursuant to the provisions of this Article be relied upon by any such purchaser or mortgagee.

 

 

31.          Severability.

 

No determination or adjudication by any court, governmental or administrative body or agency or otherwise that any provision of this Lease or of any amendment hereto or modification hereof is invalid or unenforceable in any instance shall affect the validity or the enforceability

 

(a)           of any other provision of this Lease, of such amendment or modification, or any other such amendment or modification, or

 

(b)           of such provision in any other instance or circumstance which is not within the jurisdiction of such court, body or agency or controlled by its said determination or adjudication.  Each and every provision hereof and of each such amendment or modification shall be and remain valid and enforceable to the fullest extent allowed by law, and shall be construed wherever possible as being consistent with applicable law.

 

32.          Miscellaneous.

 

(a)           The Building may be designated and known by any name Landlord may choose and such name may be changed from time to time at Landlord’s sole discretion; provided, however, that Landlord shall not rename the Building at any time in which Tenant leases more than fifty percent (50%) of the rentable square footage thereof.  The titles appearing in connection with various articles of this Lease are for convenience only.  They are not intended to indicate all of the subject matter in the text and they are not to be used in interpreting this Lease nor for any other purpose in the event of any controversy.

 

(b)           the term “person” shall be deemed to mean a natural person, a trustee, a corporation, a partnership and any other form of legal entity;

 

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(c)                                  all references in the singular or plural number shall be deemed to have been made, respectively, in the plural or singular number as well.  Each and every document or other writing which is referred to herein as being attached hereto or is otherwise designated herein as an exhibit hereto is hereby made a part hereof.

 

(d)                                 Tenant shall pay upon demand all of Landlord’s costs, charges and expenses, including the fees and out-of-pocket expenses of counsel, in enforcing Tenant’s obligations hereunder or incurred by Landlord in any litigation, negotiation or transaction in which Tenant directly causes Landlord without Landlord’s fault to become involved or concerned.  Notwithstanding the foregoing, if any legal action, suit or proceeding is commenced between Tenant and Landlord regarding their respective rights and obligations under this Lease, the prevailing party shall be entitled to recover, in addition to damages or other relief, costs and expenses, attorneys’ fees and court costs (including, without limitation, expert witness fees).  As used herein, the term “prevailing party” shall mean the party which obtains the principal relief it has sought, whether by compromise settlement or judgment.  If the party which commenced or instituted the action, suit or proceeding shall dismiss or discontinue it without the concurrence of the other party, such other party shall be deemed the prevailing party

 

(e)                                  Intentionally deleted.

 

(f)                                   No waiver of any provision of this Lease shall be implied by any failure of Landlord to enforce any remedy allowed for the violation of such provision, even if such violation is continued or repeated, and no express waiver shall affect any provision other than the one(s) specified in such waiver and only then for the time and in the manner specifically stated.  No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Term or of Tenant’s right of possession hereunder or after the giving of any notice shall reinstate, continue or extend the Term or affect any notice given to Tenant prior to the receipt of such moneys, it being agreed that after the service of notice or the commencement of a suit or after final judgment for possession of the Premises subject to the terms of this Lease, Landlord may receive and collect any rent due, and the payment of said rent shall not waive or affect said notice, suit or judgment.

 

(g)                                  It is mutually agreed by and between Landlord and Tenant that they hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of the Premises or claim of injury or damage.

 

(h)                                 Tenant acknowledges and agrees that Landlord and Landlord’s agents have made no representation, agreements, conditions, warranties, understandings, or promises, either oral or written, other than as expressly stated in this Lease, with respect to this Lease, the Building, the Property, the Premises, or otherwise.

 

(i)                                     Landlord covenants that, as of the date of this Lease, it will neither make nor permit to be made without the prior written consent of Tenant, which consent shall not be unreasonably withheld, delayed or conditioned, any amendment to or waiver with respect to any provision of the leases with Landlord through which (i) Occidental Chemical Corporation,

 

37

 

(ii) Trigon Technology Group, LLP and (iii) Cytel, Inc., occupy space in the Building, with respect to any provision which could be construed to continue or extend such tenant’s occupancy of its premises in the Building or delay such tenant’s vacation or relocation from the Building.  Tenant shall notify Landlord of its consent or rejection of any amendment within two (2) business days or receipt from Landlord.  Tenant’s right of consent shall terminate with respect to each tenant when such tenant has vacated the Building.

 

33.                               Brokers.

 

Landlord and Tenant represent and warrant to each other that they have not employed, dealt with or negotiated with any broker or agent other than CBRE, Inc. and Studley (the “Brokers”). Landlord agrees to pay all commissions owed to Brokers.  Each party agrees to indemnity, defend and hold the other party harmless from and against any and all demands, actions, loss, damage or liability, including, without limitation, reasonable attorneys’ fees, to which the other party may now or hereafter become subject by reason of any claim for commission, fee or other compensation to any broker or agent not listed in this Article as a result of the acts of the indemnifying party.\

 

34.                               Security Deposit.

 

(a)                                 Tenant, concurrently with its execution of this Lease, shall deliver to Landlord a letter of credit meeting the requirements of Exhibit “L” of this Lease as a Security Deposit the sum of $456,410.49, which sum shall be retained by Landlord as security for the payment by Tenant of the rent herein agreed to be paid and for the faithful performance of the covenants contained in this Lease.  If at any time Tenant shall be in uncured default following applicable notice and cure periods under any of the provisions of this Lease, Landlord shall be entitled, at its sole discretion to apply such Security Deposit:

 

(i)                                     to payment of:

 

(A)                               any rent for the payment of which Tenant shall be in default as aforesaid;

 

(B)                               any expense incurred by Landlord in curing any such default, and/or;

 

(C)                               any other sums due to Landlord in connection with such default or the curing thereof, including, without limitation, any damages incurred by Landlord by reason of such default; or

 

(ii)                                  to retain the same in liquidation of all or part of the damages suffered by Landlord by reason of such uncured default following applicable notice and cure periods.  Any portion of such deposit which shall not be utilized for any such purpose shall be returned to Tenant upon the expiration of this Lease and surrender of the entire Premises to Landlord.  In the event that Landlord shall apply some or all of the security deposit toward one or more of the items referred to in this Article 34 Tenant shall pay to Landlord an amount equal to the sum so applied in replenishment of the security deposit.   Such payment shall be made by Tenant within five (5) days after Landlord’s request therefor.

 

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(b)                                 Provided that if at any time after the third anniversary of the execution date of this Lease: (i) Landlord has not given Tenant notice of a default under this Lease more than two (2) times in the 24-month period preceding, that there then exists no uncured default after notice and opportunity to cure under this Lease; and (ii) Tenant is then profitable per Regulation G of the Sarbanes-Oxley Act, then the Security Deposit shall be reduced to $152,136.83, after not less than ten (10) business days notice from Tenant to Landlord, accompanied by a certification from Tenant chief financial officer that such requirements have been satisfied.

 

35.                               Quiet Enjoyment.

 

Tenant, upon paying the Fixed Rent, additional rent and all other charges herein provided for and observing and keeping all covenants, agreements and conditions of this Lease on its part to be kept, shall quietly have and enjoy the Premises during the term of this Lease without hindrance or molestation by anyone claiming by or through Landlord, subject, however, to the exceptions, reservations and conditions of this Lease.

 

36.                               Rights of Mortgage Holder.

 

If the holder of a mortgage covering the Premises shall have given prior written notice to Tenant that it is the holder of such mortgage and such notice includes the address at which notices to such mortgagee are to be sent and a request that Tenant include said mortgage holder as a notice recipient under this Lease, then Tenant agrees to give to such holder notice simultaneously with any notice given to Landlord to correct any default of Landlord as hereinabove provided and agrees that the holder of record of such mortgage shall have the right, within the greater of thirty (30) days thereafter or the same period of time accorded Landlord under this Lease after receipt of said notice, to correct or remedy such default before Tenant may take any action under this Lease by reason of such default.

 

37.                               Whole Agreement.

 

It is expressly understood and agreed by and between all the parties hereto that this Lease and any riders attached hereto and forming part hereof set forth all the promises, agreements, warranties, representations and understandings between Landlord and Tenant relative to the Premises and this leasehold, and that there are no promises, agreements, conditions, warranties, representations or understandings, either oral or written, between them other than as herein set forth.  It is further understood and agreed that, except as herein otherwise provided, no subsequent alteration, amendment, understanding or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them.

 

38.                               Financial Statements.

 

So long as Tenant is a publicly traded company, Tenant shall have no obligation to deliver financial statements to Landlord.  If Tenant is not a publicly traded company, Tenant shall supply then-available financial statements to Landlord within fifteen (15) days after Landlord’s request therefor and such financial statements shall be kept confidential by Landlord but may be disclosed by Landlord to:  (i) only the limited extent required by law; and (ii) Landlord’s employees and advisors (e.g. accountants, attorneys etc.) who are similarly bound by

 

39

 

such confidentiality, to the extent necessary for Landlord to exercise its rights and fulfill its obligations under this Lease.

 

39.                               Option to Extend Term.

 

Provided that: (i) Landlord has not given Tenant notice of a default more than two (2) times in the twenty-four (24) months immediately preceding the Expiration Date, (ii) there then exists no uncured default by Tenant under the Lease following applicable notice and cure periods, (iii) Tenant has not previously assigned this Lease or sublet all of the Premises (except for a Permitted Transfer), and (iv) Tenant remains creditworthy, as determined by Landlord in Landlord’s reasonable discretion, Tenant shall have the right and option (each an “Extension Option” and collectively the “Extension Options”) to extend the Term for up to two (2) additional periods of five (5) years each, exercisable in the following manner.  If Tenant is desirous of exercising an Extension Option under this Article 39, Tenant shall give Landlord written notice not less than twelve (12) months in advance of the then scheduled Expiration Date of Tenant’s intention to extend the Term (“Tenant’s Extension Notice”), it being agreed that time is of the essence and that the Extension Option is personal to Tenant and is non-transferable  to any transferee or other party other than through a Permitted Transfer.  Tenant’s notice must include a Letter of Credit meeting the requirements of this Lease which has an expiration date not earlier than 90 days following the extended Expiration Date and shall be irrevocable.  Promptly after receipt of Tenant’s Extension Notice, Landlord and Tenant shall negotiate the rent for the Extension Option in good faith.  The Extension Option shall be under the same terms and conditions as provided in this Lease except as follows:

 

(a)                                 each Extension Option period shall begin on the Expiration Date of the immediately preceding Term and thereafter the Expiration Date shall be five (5) years from such date;

 

(b)                                 all references to the Term in this Lease shall be deemed to mean the Term as extended pursuant to this Article;

 

(c)                                  after the exercise of the second Extension Option provided herein, there shall be no further options to extend; and

 

(d)                                 the Fixed Rent payable by Tenant during the Term of any Extension Option shall be the then market rate as reasonably determined by Landlord and Tenant negotiating in good faith.  In the event the parties cannot agree as to the then market rate, the parties shall agree on the appointment of a real estate appraiser (the “Appraiser”) having the M.A.I. designation, the cost of which shall be shared equally by Landlord and Tenant, which Appraiser shall be knowledgeable of commercial market rents in the Chester County, Pennsylvania market rental area, who shall make a fair market rental determination.  The fair market rental determination will not take into account the improvements made by Tenant in the Premises and will take into account the extent to which the Fixed Rent is subject to an annual adjustment during the applicable Extension Option periods and rent concessions in the market (free rent, tenant improvement allowances, base year and any other concessions).  In the event that the parties cannot agree within thirty (30) days on the appointment of the Appraiser, then the matter shall be submitted to binding arbitration pursuant to the rules for commercial arbitration of the American Arbitration Association, at the equal administrative cost of

 

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Landlord and Tenant.  The decision of the Appraiser, or arbitrator, shall be binding on the parties.

 

Notwithstanding anything to the contrary set forth above, in the event that Tenant occupies the entire Building, Tenant may exercise its first Extension Option for either two (2) entire floors or three (3) entire floors within the Building.  If Tenant exercises the option for two (2) floors, the floors must be contiguous.  In the event that Tenant elects to exercise the first Extension Option for only two (2) floors in the Building, Tenant’s option to exercise the second Extension Option shall be available only for the two (2) floors renewed under the firs Extension Option.

 

40.                               Right of First Offer.

 

Provided that Landlord has not given Tenant notice of a material non-monetary default or any monetary default more than two (2) times during the preceding the twenty-four (24) months, that there then exists no uncured event of default by Tenant under this Lease following applicable notice and cure periods and that Tenant or Tenant’s affiliates lease or sublease no less than seventy-five percent (75%) of the Building by rentable square footage, Tenant shall have the right of first offer (the “ Right of First Offer”) commencing on and after January 1, 2016, to lease all or a part of the approximately 10,000 rentable square feet in the building located at 690 Lee Road more clearly shown on Exhibit “J” attached hereto (the “Expansion Space”), for a term ending on the final day of the Term, in accordance with the following term and conditions:

 

(a)                                 Should Landlord enter into significant negotiations with a prospective tenant for any part of the Expansion Space on or after January 1, 2016, Landlord shall notify Tenant thereof in writing;

 

(b)                                 Tenant shall have ten (10) business days after Landlord’s notice to respond as to whether or not Tenant desires to lease the Expansion Space with a layout reasonably acceptable to Tenant, upon the terms contained in this Article.  Tenant’s notice shall be irrevocable.  If Tenant elects not to lease the Expansion Space or fails to respond within the ten (10) business day period, then Landlord shall be free to lease the Expansion Space in question to said prospective tenant.

 

(c)                                  If Tenant exercises its Right of First Offer to lease the Expansion Space, the Fixed Rent for the Expansion Space shall be the then fair market rate as reasonably determined by Landlord and Tenant negotiating in good faith.

 

(d)                                 Except as expressly set forth to the contrary herein, all other terms and conditions of this Lease shall apply to the Expansion Space, and from and after the date Tenant elects to lease the Expansion Space, the Expansion Space shall be and shall be deemed to be a part of the Premises.

 

(e)                                  Within thirty (30) days following receipt of an amendment from Landlord, Tenant shall enter into an amendment to this Lease incorporating the terms of the lease of the Expansion Space.

 

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Notwithstanding anything to the contrary set forth above, Landlord shall have the right to offer the Expansion Space to any prospective tenant who desires to lease 15,000 rentable square feet or more.  In such an event, Landlord shall notify Tenant of Landlord’s offering and shall, in such notice, identify alternate, similar space consisting of at least 10,000 rentable square feet in a building owned by Landlord in the Chesterbrook Corporate Center® which shall thereafter be deemed the “Expansion Space” for purposes of Tenant’s Right of First Offer.  Landlord’s right to offer the Expansion Space (and any subsequent Expansion Space) to a tenant seeking at least 15,000 rentable square feet shall be continuing and shall apply to both the original Expansion Space and any subsequent Expansion Space created pursuant to this Article.

 

41.                               Generator.

 

During the Term of the Lease, Tenant shall be permitted to use the generator, UPS and Liebert supplemental cooling units located on the Property as of the date of this Lease.   Tenant, at its sole cost, shall be responsible for the maintenance, repair and replacement of the Equipment.  Tenant shall obtain maintenance contracts for the Equipment from a provider and in a form and substance approved by Landlord.

 

42.                               Default By Landlord.

 

The failure by Landlord to observe or perform any of the covenants, conditions, or provisions of this Lease to be observed or performed by Landlord, where such failure shall continue for a period of thirty (30) days after written notice thereof by Tenant to Landlord, shall be deemed to be a default by Landlord under this Lease; provided, however, that if the nature of Landlord’s default is such that more than thirty (30) days are reasonably required for its cure, then Landlord shall not be deemed to be in default if Landlord commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion, provided that the default shall actually be cured within sixty (60) days after notice.  If Landlord shall default in the performance of any of its obligations under this Lease after notice and expiration of the applicable cure period, Tenant, at its option, may pursue remedies available at law or equity.

 

[Signatures on following page.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year aforesaid.

 

 

	
LANDLORD:
    	
 
    	
TENANT:
    
	
CHESTERBROOK PARTNERS, LP
    	
 
    	
AUXILIUM PHARMACEUTICALS, INC.
    
	
a Delaware limited partnership
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
Tredyffrin GP, LLC,
    	
 
    	
 
    	
 
    
	
 
    	
a Delaware limited liability company,
    	
 
    	
 
    	
 
    
	
 
    	
its general partner
    	
 
    	
By:
    	
/s/ Adrian Adams
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Adrian Adams
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Mark Pasierb
    	
 
    	
Its:
    	
Chief Executive Officer & President
    
	
 
    	
Mark Pasierb
   Chief Operating Officer
   Executive Vice President
    	
 
    	
 
    	

    

 

43

 

WAIVER OF PRIOR HEARING CERTIFICATION

 

The undersigned acknowledges that the above Lease authorizes and empowers Landlord, without prior notice or a prior hearing, to cause the entry of judgments against the undersigned for possession of the leased premises and immediately thereafter, without prior notice or a prior hearing, to exercise post-judgment enforcement and execution remedies.

 

The undersigned acknowledges that the undersigned has agreed to waive the undersigned’s rights to prior notice and a hearing under the Constitution of the United States, the Constitution of the Commonwealth of Pennsylvania and all other applicable state and federal laws, in connection with Landlord’s ability to cause the entry of judgment against the undersigned and immediately thereafter exercise Landlord’s post-judgment enforcement and execution remedies (which may include, without limitation, removal of the undersigned from the leased premises by law enforcement officers). The undersigned’s counsel has reviewed the legal impact of this waiver with the undersigned, and the undersigned acknowledges that the undersigned has freely waived such rights.

 

 

	
 
    	
AUXILIUM PHARMACEUTICALS, INC.,
   a Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Andrew I. Koven
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Andrew I. Koven
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Administrative Officer & General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
Dated:
    	
July 3, 2012
    
	
 
    	
 
    	

    

 

44

 

EXHIBIT “A”

 

FLOOR PLAN

 

 

 

Exhibit A - Page 1 of 3

 

 

Exhibit A - Page 2 of 3

 

 

Exhibit A - Page 3 of 3

 

EXHIBIT “B”

 

DESCRIPTION OF THE LAND

 

640/690 LEE ROAD - METES AND BOUNDS

 

Tredyffrin Township, Chester County, PA

 

Consolidated Description of Parcels I9-2, 6-5, and 6-4 at Chesterbrook

 

ALL THOSE CERTAIN parcels of land situate in the Township of Tredyffrin, County of Chester and Commonwealth of Pennsylvania, bounded and described in accordance with a Land Title Survey, prepared for Parcel 6-4 Associates, dated March 3, 1997 as prepared by Yerkes Associates, Inc., Consulting Engineers and Surveyors and more particularly described as follows:

 

BEGINNING at a point on the southeasterly side of Chesterbrook Boulevard (70 feet wide), said point being the distance of 35 feet measured South 44 degrees 27 minutes East from a point on the centerline of said Chesterbrook Boulevard, said last mentioned point being the distance of 259.75 feet measured North 45 degrees 33 minutes East from a point marking the intersection of the centerline of said Chesterbrook Boulevard with the centerline of Duportail Road (60 feet wide); thence extending from the beginning point along the southeasterly side of said Chesterbrook Boulevard, North 45 degrees 33 minutes East 109.47 feet to a point of curve of a radius round corner connecting said southeasterly side of Chesterbrook Boulevard with the southerly side of Lee  Road (60 feet wide); thence extending along said radius round corner along the arc of a circle curving to the right in a  southeasterly direction having a radius of 25 feet, the arc distance of 39.27 feet to a point of tangency; thence extending along the southerly side of said Lee Road the four following courses and distances; (1) South 44 degrees 27 minutes East 190.26 feet to a point of curve; (2) along the arc of a circle curving to the left in an easterly direction having a radius of 430 feet, the arc distance of 486.76 feet to a point of tangent; (3) North 70 degrees 41 minutes 30 seconds East 365.63 feet to a point of curve; (4) along the are of a circle curving to the right in an easterly direction having a radius of 60 feet the arc distance of 43.36 feet to a point of reverse curve; thence extending along a portion of the perimeter of Lee Road cul-de-sac along the arc of a circle curving to the left in an  easterly direction having a radius of 60 feet the arc distance of 43.36 feet to a point; thence leaving said Lee Road, extending along Parcel 6-3 as shown on said plan, South 19 degrees 18 minutes 30 seconds East 672.91 feet to a point in line of the northeasterly right of way of LR 1042 (Route 202);  thence extending along said right of way the 7 following courses and distances: (1) North 79 degrees 34 minutes 46 seconds West 31.20 feet to a point; (2) South 10 degrees 25 minutes 14 seconds West 20.00 feet to a  point on curve (3) along the arc of a  circle curving to the left in a southwesterly direction having a radius of 528.34 feet  the arc distance of 485.75 feet to a point; (4) North 42 degrees 15 minutes 23 seconds West 20.00 feet to a point on curve; (5) along the arc of a circle curving to the left in a southerly direction having a radius of 548.34 feet the arc distance of 106.00 feet to a point of tangent; (6) South 36 degrees 40 minutes  03 seconds West 49.54 feet to a point on curve;  (7) along the arc of a circle curving to the right in a westerly direction having a radius of 7514.49 feet the arc  distance of 385.00 feet to a point; thence leaving said right of way, extending along Parcel 7 as shown on said plan, the three following courses and distances; (1) North  30 degrees 00 minutes West 615.08 feet to a point; (2) North 02 degrees 08 minutes East 352.39 feet to a point; (3) North 44 degrees 27 minutes West 101.14 feet to the first  mentioned point and place of beginning.

 

BEING PARCEL Nos. 43-5-26.30, 43-5-26.33, 43.5-26.34

 

CONTAINING Nineteen and one hundred seventy one thousand part of an acre 19.170 acres) be the same more or less.

 

	
Parcel   6-4
    	
 
    	
5.045
    	
 Acres
    
	
Parcel   6-5
    	
 
    	
5.062
    	
 Acres
    
	
Parcel 19-2
    	
 
    	
9.063
    	
 Acres
    
	
 
    	
 
    	
19.170 Acres Total
    

 

Exhibit B - Page 1 of 1

 

EXHIBIT “C”

 

MEMORANDUM OF COMMENCEMENT DATE

 

THIS MEMORANDUM OF COMMENCEMENT DATE made this                   day of                                   , 20      .

 

CHESTERBROOK PARTNERS, LP (“Landlord”) and AUXILIUM PHARMACEUTICALS, INC. (“Tenant”) are parties to a certain Agreement of Lease (“Lease”) dated                               , 2012, with respect to premises identified as Suite            at 640 Lee Road, Wayne, PA 19087..

 

Pursuant of the Lease, Landlord and Tenant do hereby confirm that the Term of the Lease commenced                                    , 20       and, subject to such rights of renewal or extension, if any, as are expressly provided therein, shall expire                                    and that the rent schedules is as follows [DATES TO BE ADJUSTED IF COMMENCEMENT DATE IS OTHER THAN JANUARY 1, 2013]:

 

	
Lease Period
    	
 
    	
Rent / Sq. Ft.
    	
 
    	
Annual Rent
    	
 
    	
Monthly Rent
    	
 
    
	
01.01.13 – 12.31.13*
    	
 
    	
$
    	
24.00
    	
 
    	
$
    	
1,788,384.00
    	
 
    	
$
    	
149,032.00
    	
 
    
	
01.01.14 – 12.31.14
    	
 
    	
$
    	
24.50
    	
 
    	
$
    	
1,825,642.00
    	
 
    	
$
    	
152,136.83
    	
 
    
	
01.01.15 – 12.31.15
    	
 
    	
$
    	
25.00
    	
 
    	
$
    	
1,862,900.00
    	
 
    	
$
    	
155,241.67
    	
 
    
	
01.01.16 – 12.31.16
    	
 
    	
$
    	
25.50
    	
 
    	
$
    	
1,900,158.00
    	
 
    	
$
    	
158,346.50
    	
 
    
	
01.01.17 – 12.31.17
    	
 
    	
$
    	
26.00
    	
 
    	
$
    	
1,937,416.00
    	
 
    	
$
    	
161,451.33
    	
 
    
	
01.01.18 – 12.31.18
    	
 
    	
$
    	
26.50
    	
 
    	
$
    	
1,974,674.00
    	
 
    	
$
    	
164,556.17
    	
 
    
	
01.01.19 – 12.31.19
    	
 
    	
$
    	
27.00
    	
 
    	
$
    	
2,011,932.00
    	
 
    	
$
    	
167,661.00
    	
 
    
	
01.01.20 – 12.31.20
    	
 
    	
$
    	
27.50
    	
 
    	
$
    	
2,049,190.00
    	
 
    	
$
    	
170,765.83
    	
 
    
	
01.01.21 – 12.31.21
    	
 
    	
$
    	
28.00
    	
 
    	
$
    	
2,086,448.00
    	
 
    	
$
    	
173,870.67
    	
 
    
	
01.01.22 – 12.31.22
    	
 
    	
$
    	
28.50
    	
 
    	
$
    	
2,123,706.00
    	
 
    	
$
    	
176,975.50
    	
 
    
	
01.01.23 – 12.31.23
    	
 
    	
$
    	
29.00
    	
 
    	
$
    	
2,160,964.00
    	
 
    	
$
    	
180,080.33
    	
 
    

 

* The foregoing notwithstanding, Fixed Rent, but not Tenant Energy Costs or any other amount owed by Tenant to Landlord under the Lease, shall be conditionally abated during the first 365 days of the Term.  During all other periods of the Term, Tenant shall make Fixed Rent payments without any abatement as provided herein.  Should this Lease or Tenant’s right to possess the Premises be terminated on account of an uncured Tenant default following applicable notice and cure periods, Landlord shall be entitled to recover from Tenant (in addition to all other rights and remedies available to Landlord) the unamortized portion of the conditionally abated Fixed Rent, calculated on the basis of an 11 year fully amortizing loan of $1,788,384.00 at 6% per annum.  For example, if the Commencement Date is January 1, 2013, in the event of a termination as described herein, effective as of December 31, 2017, the portion of conditionally abated Fixed Rent allocable to the time remaining in the Term recoverable by Landlord would be $1,118,708.94.

 

[Signatures on following page.]

 

Exhibit C - Page 1 of 2

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum the day and year first above written.

 

	
LANDLORD:
    	
 
    	
TENANT:
    
	
CHESTERBROOK   PARTNERS, LP
    	
 
    	
AUXILIUM   PHARMACEUTICALS, INC.
    
	
a   Delaware limited partnership
    	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
By:
    	
Tredyffrin   GP, LLC,
    	
 
    	
 
    
	
 
    	
a   Delaware limited liability company,
    	
 
    	
 
    
	
 
    	
its   general partner
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Its:
    	
 
    

 

Exhibit C - Page 2 of 2

 

EXHIBIT “D”

 

TRACEY REPORT

 

(484) 421-3019  ·  TOLL FREE(866) 598-8462   ·   FAX(484) 421-3040                E-Mail: info@traceymechanical.com

 

April 16, 2012

 

Kim Battin
 Pitcairn Properties
 955 Chesterbrook Blvd.
 Chesterbrook, PA 19087

 

Re:       Summary of Heat Pump survey at 640 Lee Road

 

Dear Kim,

 

The heat pumps at 640 Lee Road for the most part are operational. I would suggest the following items be completed prior to or during the tenant fit-out.

 

1 - Coil cleaning of all units.

 

2 - Duct wrap be secured.

 

3 - Clean grills and registers.

 

4 - Clean and flush condensate pans and replace traps as needed.

 

5 - Address compressor and fan motor problems and replace as needed. Approximately 10% of existing heat pumps have mechanical problems.

 

6 - Update DDC drawings and program.

 

If you have questions, please do not hesitate to contact me.

 

Thanks,

 

	
/s/   Larry Wesolowski
    	
 
    
	
Larry   Wesolowski
    	
 
    
	
Service   Manager
    	
 
    

 

Exhibit D - Page 1 of 1

 

EXHIBIT “E”

 

TENANT CONSTRUCTION PLANS

 

Exhibit E - Page 1 of 5

 

 

CONSTRUCTION DOCUMENT LIST 
  Auxilium Pharmaceuticals, Inc. Tenant Improvement Project
 640 Lee Road, Wayne, PA 19087
 July 10, 2012

 

	
Document
   Title
    	
 
    	
Document Description
    	
 
    	
Prepared By
    	
 
    	
Latest Issue
    
	
AUXILIUM - INTERIOR CONSTRUCTION DOCUMENTS
    
	
CS
    	
 
    	
Interior Construction Documents
    	
 
    	
D2.Solutions
    	
 
    	
07/06/2012
    
	
D1.1
    	
 
    	
1st Floor   Demolition Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
D1.2
    	
 
    	
2nd Floor Demolition Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
D1.3
    	
 
    	
3rd Floor   Demolition Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A1.1
    	
 
    	
1st Floor Architectural Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A1.2
    	
 
    	
2nd Floor Architectural Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A1.3
    	
 
    	
3rd Floor Architectural Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A1.4
    	
 
    	
3rd Floor MDF   Room
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A2.1
    	
 
    	
1st Floor Reflected Ceiling Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A2.2
    	
 
    	
2nd Floor Reflected Ceiling Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A2.3
    	
 
    	
3rd Floor   Reflected Ceiling Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A3.1
    	
 
    	
1st Floor Power / Voice / Data Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A3.2
    	
 
    	
2nd Floor Power / Voice / Data Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A3.3
    	
 
    	
3rd Floor Power /   Voice / Data Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A4.1
    	
 
    	
1st Floor Finish Plan and Schedule
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A4.2
    	
 
    	
2nd Floor Finish Plan and Schedule
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A4.3
    	
 
    	
3rd Floor Finish   Plan and Schedule
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A5
    	
 
    	
Door Schedule and Wall Sections
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A6.1
    	
 
    	
Elevations
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A6.2
    	
 
    	
Elevations
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A6.3
    	
 
    	
Elevations
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A6.4
    	
 
    	
Elevations
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A7.1
    	
 
    	
Details
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A7.2
    	
 
    	
Details
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A7.3
    	
 
    	
Details
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A8
    	
 
    	
General Construction Notes
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
F1.1
    	
 
    	
lst Floor Furniture Plan (Reference Only)
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
F1.2
    	
 
    	
2nd Floor Furniture Plan (Reference Only)
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
F1.3
    	
 
    	
3rd Floor Furniture Plan (Reference Only)
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
RESTROOM RENOVATIONS — INTERIOR CONSTRUCTION   DOCUMENTS
    
	
CS
    	
 
    	
Restroom Renovations
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
D1
    	
 
    	
1st, 2nd and 3rd Floor—Demolition Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
Al
    	
 
    	
1st, 2nd and 3rd Floor - Architectural Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A2
    	
 
    	
1st, 2nd and 3rd Floor — Reflected Ceiling Plan
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A3
    	
 
    	
1st, 2nd and 3rd Floor — Finish Plan & Schedule
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A4
    	
 
    	
1st, 2nd and 3rd Floor — Elevations &
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    

 

Exhibit E - Page 2 of 5

 

	
 
    	
 
    	
Sections
    	
 
    	
 
    	
 
    	
 
    
	
A5
    	
 
    	
Door Schedule
    	
 
    	
D2 Solutions
    	
 
    	
07/06/2012
    
	
A6
    	
 
    	
General Notes
    	
 
    	
D2 Solutions
    	
 
    	
Not Provided
    
	
AUXILIUM — MEP / FP CONSTRUCTION DOCUMENTS
    
	
El
    	
 
    	
Cover Sheet
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E2
    	
 
    	
1st Floor Lighting Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E3
    	
 
    	
2nd Floor Lighting Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E4
    	
 
    	
3rd Floor Lighting Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E5
    	
 
    	
1st Floor Power Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E6
    	
 
    	
2nd Floor Power Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E7
    	
 
    	
3rd Floor Power Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E8
    	
 
    	
Schedules A
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E9
    	
 
    	
Schedules B
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E10
    	
 
    	
Schedules C
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E11
    	
 
    	
MDF and IDF Rooms Alternate
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
E12
    	
 
    	
MDF and IDF Rooms Alternate - Schedules
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
SP-1
    	
 
    	
1st Floor Fire Protection Plan and   Specifications
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
SP-2
    	
 
    	
2nd Floor Fire Protection Plan and   Specifications
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
SP-3
    	
 
    	
3rd Floor Fire Protection Plan and   Specifications
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-0
    	
 
    	
Mechanical Details and Specifications
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-1
    	
 
    	
1st Floor Mechanical Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-2
    	
 
    	
2nd Floor Mechanical Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-3
    	
 
    	
3rd Floor Mechanical Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-4
    	
 
    	
1st Floor Reflected Ceiling Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-5
    	
 
    	
2nd Floor Reflected Ceiling Plan
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
M-6
    	
 
    	
3rd Floor Reflected Ceiling Plan
    	
 
    	
Chestnut Technical
    	
 
    	
07/06/2012
    

 

Page 2 of 4

 

Exhibit E - Page 3 of 5

 

	
 
    	
 
    	
 
    	
 
    	
Services
    	
 
    	
 
    
	
M-7
    	
 
    	
MDF and IDF Rooms Alternate
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
P-1
    	
 
    	
1st Floor Plumbing Plan, Riser Diagram and   Details
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
P-2
    	
 
    	
2nd Floor Plumbing Plan and Riser Diagrams
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
P-3
    	
 
    	
3rd Floor Plumbing Plan, Riser Diagram and   Specifications
    	
 
    	
Chestnut Technical Services
    	
 
    	
07/06/2012
    
	
AUXILIUM — THIRD FLOOR DATA CENTER CONSTRUCTION   DOCUMENTS
    
	
T-100
    	
 
    	
Cover Sheet, Site Location Map, Drawing List ABBRV
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
GN-001
    	
 
    	
General Conditions and Constructions Notes
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
GN-002
    	
 
    	
General Conditions and Constructions Notes
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
A-100
    	
 
    	
Proposed Architectural Computer Room Construction Floor Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
A-101
    	
 
    	
Proposed Computer Room Equipment Weight Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
A-200
    	
 
    	
Proposed Computer Room Reflected Ceiling Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
A-201
    	
 
    	
Ceiling Details
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
A-300
    	
 
    	
Finish Schedule, Door Schedule, Partition Typed, Ceiling Detail & Misc Details
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-100
    	
 
    	
Notes, Abbreviations, Symbols List and Scope of Work
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-101
    	
 
    	
Installation Specifications
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-110
    	
 
    	
Mechanical Equipment Schedules, Riser Diagram and Details
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-210
    	
 
    	
Partial 3rd Floor Plan — Mechanical Demolition Work and   Notes
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-211
    	
 
    	
Mechanical New Work Plans and Notes
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-220
    	
 
    	
Partial Roof Plan — HVAC Demolition Work
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
M-221
    	
 
    	
Partial Roof Plan — HVAC New Work
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
F-100
    	
 
    	
General Notes, Legend and Abbreviations
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
F-101
    	
 
    	
Details and Schedules
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
F-102
    	
 
    	
Specifications
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
F-120
    	
 
    	
Fire Alarm Riser Diagram
    	
 
    	
PTS Data Center
    	
 
    	
07/06/2012
    

 

Page 3 of 4

 

Exhibit E - Page 4 of 5

 

	
 
    	
 
    	
 
    	
 
    	
Solutions
    	
 
    	
 
    
	
F-210
    	
 
    	
3rd Floor Computer Room — Fire Protection   Demolition Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
F-211
    	
 
    	
3rd Floor Computer Room — Fire Protection   New Work Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-100
    	
 
    	
General Notes, Abbreviations and Symbols List
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-101
    	
 
    	
Specification Sheet No.1
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-102
    	
 
    	
Specification Sheet No.2
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-110
    	
 
    	
Panel Board Schedule
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-111
    	
 
    	
Electrical Details
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-120
    	
 
    	
Single Line Drawing
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-210
    	
 
    	
3rd Floor Power Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-221
    	
 
    	
Partial Roof Plan — Power New Work
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-310
    	
 
    	
3rd Floor Lighting Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
E-410
    	
 
    	
3rd Floor Demo Plan
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
TC-101
    	
 
    	
Data Connectivity Schematics and Risers
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
TC-201
    	
 
    	
Telecommunications Rack Elevations — Data Center &  IDF  Rooms
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
TC-301
    	
 
    	
Telecommunications Rack Elevations — Data Center & IDF  Rooms
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
S-150
    	
 
    	
Security System Wiring Installation Details
    	
 
    	
PTS Data Center Solutions
    	
 
    	
07/06/2012
    
	
END — DOCUMENT LIST
    

 

Page 4 of 4

 

Exhibit E - Page 5 of 5

 

EXHIBIT “F”

 

EARLY ACCESS BY TENANT

 

Landlord shall permit Tenant and its agents to enter the Premises prior to the Commencement Date as provided in Article 8. The foregoing, however, is conditioned upon Tenant’s workmen and mechanics working in harmony and not interfering with the labor employed by Landlord, Landlord’s mechanics or contractors or by any other Tenant or their contractors and compliance with the terms of the Lease.  If at any time, such entry shall cause disharmony or interference therewith, this license may be withdrawn by Landlord upon twenty-four (24) hours written notice to Tenant and further provided that Workmen’s Compensation and Public Liability Insurance and Property Damage Insurance, with Hold Harmless provision, all in amounts and with companies and on forms satisfactory to Landlord, shall be provided to Landlord and at all times maintained by Tenant’s contractors engaged in the performance of the work, and before proceeding with work, certificates of such insurance shall be furnished to Landlord.

 

Such entry shall be deemed to be under all of the terms, covenants, provisions and conditions of the said Lease except as to the covenant to pay rent.  Landlord shall not be liable in any way for any injury, loss or damage which may occur to any of Tenant’s decorations or installations so made prior to the commencement of the term of the Lease, the same being solely at Tenant’s risk.

 

The provisions of this Exhibit “F” are specifically subject to the provisions of the Lease.

 

Exhibit F - Page 1 of 1

 

EXHIBIT “G”

 

CLEANING SPECIFICATIONS

 

A.                                    Office Area

 

Daily:               Five (5) times per week:

 

1.                                      Empty and clean all waste receptacles and ashtrays and remove dry waste material from the Premises; wash receptacles and replace liners as necessary.

 

2.                                      Sweep and dust mop all uncarpeted areas using a dust-treated mop.

 

3.                                      Vacuum all rugs and carpeted areas as needed.

 

4.                                      Hand dust and wipe clean with treated cloths all internal surfaces including furniture, office equipment, windowsills, door ledges, and chair rails within normal reach.

 

5.                                      Wash and clean all water fountains.

 

6.                                      Remove all finger marks from private entrance doors, light switches and doorways.

 

7.                                      Wipe clean all brass and other bright work.

 

8.                                      Hand dust supply air gulls within normal reach.

 

9.                                      Upon completion of cleaning, all lights will be turned off and doors locked leaving the Premises in an orderly condition

 

10.                               Spot clean carpet stains.

 

Monthly:

 

1.                                      Wash all partition glass in tenant areas.

 

Each Six (6) Weeks:

 

1.                                      Clean and spray wax vinyl composite tile floors in tenant areas.

 

Quarterly:

 

1.                                      Render high dusting not reached in daily cleaning to include:

 

a.                                      Dusting all pictures, frames, charts, graphs and similar wall hangings.

b.                                      Dust all vertical surfaces, such as walls, partitions, doors and bucks.

c.                                       Vacuum or dust all pipes, supply air grills and high moldings.

d.                                      Clean Mini-blinds as required:

 

Exhibit G - Page 1 of 3

 

As Required:

 

Wash vinyl wall covering on core walls.

 

B.                                    Lavatories

 

Daily:               Five (5) times per week:

 

1.                                      Sweep and damp mop floors.

 

2.                                      Clean all mirrors, powder shelves, dispensers and receptacles, bright work, flushometers, piping and toilet seat hinges.

 

3.                                      Wash both sides of all toilet seats.

 

4.                                      Wash all basins, bowls and urinals.

 

5.                                      Dust and clean all powder room fixtures.

 

6.                                      Empty and clean paper towel and sanitary disposal receptacles.

 

7.                                      Remove waste paper and refuse.

 

8.                                      Refill tissue holders, soap dispensers, towel dispensers, sanitary dispensers and toilet seat covers.

 

9.                                      A sanitizing solution will be used in all lavatory cleaning.

 

10.                               Wash all partitions and tile walls in lavatories as needed.

 

Monthly:

 

1.                                      Machine scrub lavatory floors.

 

C.                                    Main Lobby Elevators and Building Exterior Corridors

 

Daily:               Five (5) times per week.

 

1.                                      Sweep, wash or damp mop all floors.

 

2.                                      Wash all rubber mats.

 

3.                                      Clean elevators, wash or vacuum floors, wipe down walls and doors.

 

4.                                      Spot clean any metal work inside lobby.

 

Exhibit G - Page 2 of 3

 

5.                                      Spot clean any metal surrounding building entrance doors.

 

6.                                      Wash all entrance door glass in common area as needed.

 

D.                                    Vinyl Tile - Lobbies and Public Corridors

 

Nightly:                      Sweep and damp mop all tile floors. Vacuum all carpeted areas.

Weekly:                     Spray wax and buff. Use non-skid wax.

Semi-annually:        Strip, clean and wax with non-skid wax. Dry shampoo common area carpets.

 

E.                                    Window Cleaning

 

1.                                      Inside and outside surfaces of windows of exterior walls will be washed up to four (4) times per year.

 

Exhibit G - Page 3 of 3

 

EXHIBIT “H”

 

RULES AND REGULATIONS

 

43.                               The walkways, roadways, driveways, entrances, lobbies, passages, and stairways shall not be obstructed by Tenant or used by Tenant for any purposes other than ingress and egress from and to the Building and Tenant’s offices.  The parking areas shall be used only for the parking of automobiles of Tenant, its agents, employees and invitees while actually present in the Premises. Landlord shall in all cases retain the right to control or prevent access to all of the aforesaid areas of all persons whose presence, in the judgment of Landlord, shall be prejudicial to the safety, peace, character, or reputation of the Building, the property located therein or of any of the tenants.

 

44.                               The toilet rooms, water closets, sinks, faucets, plumbing or other service apparatus of any kind shall not be used by Tenant for any purposes other than those of which they were installed, and no sweepings, rubbish, rags, ashes, chemicals or other refuse or injurious substances shall be placed therein or used in connection therewith by Tenant or left by Tenant in the lobbies, passages, elevators or stairways.  Nothing shall be thrown by Tenant or Tenant’s employees nor be allowed by them to drop out of the windows or doors, or down the passages of the Building.  Any water lines installed by Tenant for purposes of running coffee makers, refrigerators, ice makers, etc., within the Premises, must be copper (not PVC).

 

45.                               Nothing shall be placed by Tenant on the outside of the Building or on its window sills or projections.  Skylights, windows, doors and transoms shall not be covered or obstructed by Tenant, and no window shades, blinds, curtains, screens, storm windows, awnings or other materials shall be installed or placed on any of the windows or in any of the window spaces, except as approved in writing by Landlord, which approval shall not be unreasonably withheld, delayed or conditioned.

 

46.                               No sign, lettering, insignia, advertisement, notice shall be inscribed, painted, installed or placed on any windows or in any window spaces or any other part of the outside or inside of the Building, unless first approved in writing by Landlord, which approval shall not be unreasonably withheld, delayed or conditioned.  Names on or beside suite entrance doors shall be provided for Tenant by Landlord and not otherwise, and at Tenant’s expense; in all instances, such names shall be of design and form first approved by Landlord.

 

47.                               Except as permitted pursuant to Rules numbered 9 and 13, Tenant shall not place additional locks upon any doors. The janitor and the manager of the Building may at all times keep a pass key, and he and other agents of the Landlord shall at all times be allowed admittance to the leased Premises for purposes permitted in Tenant’s lease.  Upon surrendering possession of the Premises at the termination of this Lease, Tenant shall deliver to Landlord all keys for the Premises.

 

48.                               No bicycles or similar vehicles will be allowed in the Building.

 

49.                               Tenant shall not do or commit, or suffer to be done or committed, any act or thing whereby, or in consequence whereof, the rights of other tenants will be obstructed or interfered with, or other tenants will in any other way be injured or annoyed, or whereby the Building will be damaged.  Tenant shall not suffer or permit the Premises or any part thereof to be used in any

 

Exhibit H - Page 1 of 4

 

manner or anything to be done therein or suffer or permit anything to be brought into or kept in the Premises which, in the judgment of Landlord, shall in any way impair or tend to impair the character, reputation or appearance of the Building as a first-class office building.  Tenant shall not use or keep or permit to be used or kept in the Building any matter having an offensive odor, nor any ether, naphtha, phosphorous, benzole, kerosene, gasoline, benzine, camphene, fuel or other explosive or highly flammable material.  Tenant shall neither bring, keep or use in the Building any chemical reagent except as the same may be components of commercial products normally used or consumed by occupants of office buildings.  No birds, fish or other animals shall be brought into or kept in or about the Premises.

 

50.                               Tenant shall be solely responsible, at Tenant’s sole cost and expense, for all maintenance and repairs to appliances (including but not limited to refrigerators, dishwashers, kitchen hot water heaters, etc.) whether installed by Landlord or Tenant or a prior tenant or any other party; provided, however, if Landlord has installed the appliance, Tenant will have the benefit of any applicable warranty.

 

51.                               In order that the Premises may be kept in a good state of preservation and cleanliness, Tenant shall during the continuance of its possession permit Landlord’s employees and contractors and no one else to clean the Premises.  Landlord shall be in no way responsible to Tenant for any damage done to furniture or other effects of Tenant or others by any of Landlord’s employees, or any other person, or for any loss of Tenant’s employees, or for any loss of property of any kind in or from the Premises, however occurring.  Tenant shall see each day that the windows are closed, lights are turned off, and the doors securely locked before leaving the Premises.

 

52.                               If Tenant desires to introduce signaling, telegraphic, telephonic, protective alarm or other wires, cables, apparatus or devices, Landlord shall direct where and how the same are to be placed, and except as so directed, no installation, boring or cutting shall be permitted.  Landlord shall have the right to prevent and to cut off the transmission of excessive or dangerous current of electricity or annoyances into or through the Building or Premises and to require the changing of wiring connections or layout at Tenant’s expense, to the extent that Landlord may deem necessary, and further to require compliance with such reasonable rules as Landlord may establish relating thereto, and in the event of non-compliance with the requirements or rules, Landlord shall have the right immediately to cut wiring or to do what it considers necessary to remove the danger, annoyance or electrical interference with apparatus in any part of the Building.  All wires and cables installed by Tenant must be clearly tagged at the distributing boards and junction boxes and elsewhere required by Landlord, with the number of the office to which said wires and cables lead, and the purpose for which the wires and cables respectively are used, together with the name of the concern, if any, operating same.

 

53.                               A directory on a bulletin board on the ground floor may be provided by Landlord, on which the name of Tenant may be placed.

 

54.                               Except during any periods in which Tenant is the sole tenant of the Building, no furniture, packages, equipment, supplies or merchandise of Tenant will be received in the Building, or carried up or down in the elevators or stairways, except during such hours as shall be designated by Landlord, and Landlord in all cases shall also have the exclusive right to prescribe the method and manner in which the same shall be brought in or taken out of the Building.  Landlord shall in all cases have the right to exclude from the Building heavy furniture,

 

Exhibit H - Page 2 of 4

 

safes and other articles which may be hazardous or to require them to be located at designated places in the Premises.  The cost of repairing any damage to the Building caused by taking in or out furniture, safes or any articles or any damage caused while the same shall be in the Premises, shall be paid by Tenant.

 

55.                               Without Landlord’s written consent, which consent shall not be unreasonably withheld, delayed or conditioned, nothing shall be fastened to, nor shall holes be drilled or nails or screws driven into walls or partitions; nor shall walls or partitions be painted, papered or otherwise covered or moved in any way or marked or broken; nor shall any connection be made to electric wires for running fans or motors or other apparatus, devices or equipment; nor shall machinery of any kind other than customary small business machines be allowed in the Premises; nor shall Tenant use any other method of heating, ventilating, air conditioning or air cooling than that provided by Landlord.  Telephones, switchboards and telephone wiring and equipment shall be placed only where designated by Landlord.  No mechanics shall be allowed to work in or about the Building other than those employed by Landlord without the written consent of Landlord first having been obtained.  Notwithstanding the foregoing, Tenant is expressly permitted to, without prior consent from Landlord, hang pictures on the walls of the Premises.

 

56.                               Tenant shall be solely responsible, at Tenant’s sole cost and expense, for providing security for the Premises at such times and in such fashion as Tenant shall deem reasonable or necessary, including but not limited to electronic or video surveillance or security.  Landlord shall not be responsible or otherwise liable for, and Tenant expressly indemnifies Landlord from, any claim, loss or damage resulting from or arising out of any party’s unauthorized access to the Premises, whether during or outside of normal business hours.  Any re-keying or other repairs or improvements to the Premises required as a result of Tenant’s security measures set forth herein shall be performed by Landlord (or Landlord’s contractor) at Tenant’s sole cost and expense.

 

57.                               Landlord shall, in no case, be liable or responsible for the admission or exclusion of any person to or from the Building or access to the Premises, except during periods in which Tenant is not the sole tenant of the Building.  In case of invasion, hostile attack, insurrection, mob violence, riot, public excitement or other commotion, explosion, fire or any casualty, Landlord reserves the right to bar or limit access to the Building for the safety of occupants or protection of property.

 

58.                               Upon reasonable prior notice to Tenant, Landlord may rescind, suspend or modify any rules or regulations and make such other rules or regulations as, in Landlord’s judgment, may from time to time be needful for the safety, care, maintenance, operation and cleanliness of the Building as a first class office building, or for the preservation of good order therein.  Notice of any action by Landlord referred to in this paragraph, given to Tenant, shall have the same force and effect as if originally made a part of the foregoing Lease.  New rules or regulations will not, however, be unreasonably inconsistent with the proper use and enjoyment of the Premises by Tenant under the Lease and shall not materially increase Tenant’s obligations or reduce its rights under this Lease.

 

59.                               The use of rooms as sleeping quarters is prohibited at all times.

 

Exhibit H - Page 3 of 4

 

60.                               Tenant shall keep the windows of the Premises closed during the respective times that the heating, ventilating or air conditioning system is operating, in order to conserve the service and effectiveness of the heating, ventilating or air conditioning system as the case may be.  Tenant shall comply with all reasonable rules and regulations from time to time promulgated by Landlord to conserve such services.

 

61.                               Landlord reserves the right to require that the Premises or any portion thereof shall not be used by Tenant or others for an employment agency, or for securing employees other than those to be employed on the Premises, or for the payment of salaries or wages to employees or persons who are not actually employed in the Building, nor for any other purpose except that specified in this Lease.

 

62.                               Except during any periods in which Tenant is the sole tenant of the Building, Landlord shall have the right to enter the Premises to put a “To Let” or similar notice upon the Premises, which notice shall not be removed or obliterated by the Tenant, during the twelve (12) months prior to the expiration of the then current Term of this Lease, and any such entering shall not be treated as a deprivation of Tenant’s use of the Premises or work an eviction of Tenant or a recession of this Lease.

 

63.                               No smoking of any kind shall be permitted on the Property or in the Building except within the exterior areas specifically designated by Landlord.

 

64.                               Tenant shall be permitted to install a “Wi-Fi” or other communication system within the Premises for Tenant’s sole use so long as such communication system does not interfere with or detract from another tenant’s quiet enjoyment of its premises or otherwise interfere with Landlord’s use, operation or maintenance of the Building or Property.

 

65.                               These rules and regulations are not intended to give Tenant any rights or claims in the event the Landlord does not enforce any of them against any other tenants or if Landlord does not have the right to enforce them against any other tenants and such non-enforcement will not constitute a waiver as to Tenant.

 

66.                               All paintings, application of wall covering(s) and other improvements made by Tenant within the Premises to the extent permitted under this Lease shall be made during non- business hours unless Landlord shall otherwise authorize in writing.

 

Exhibit H - Page 4 of 4

 

EXHIBIT “I”

 

FORM OF SNDA

 

Exhibit I - Page 1 of 9

 

Recording Requested by

and when Recorded return to:

 

WELLS FARGO BANK, N.A. 

Commercial Mortgage Servicing 

1901 Harrison Street, 2nd Floor 

Oakland, CA 94612

 

Attention:                     CMS Lease Reviews

Loan No.:                       70-0202606

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

Tenant’s Trade Name: Auxilium Pharmaceuticals

 

NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF THE SECURITY DOCUMENTS (DEFINED BELOW).

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (“Agreement”) is made as of               , 2012, by and among AUXILIUM PHARMACEUTICALS. INC.  (“Tenant”), CHESTERBROOK PARTNERS, LP (“Owner”) and U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to BANK OF AMERICA, N.A., as Trustee, successor by merger to LASALLE BANK NATIONAL ASSOCIATION, as Trustee, for Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-TOP22 (“Lender”).

 

RECITALS

 

A.                                    Owner is the owner of the land and improvements commonly known as and more specifically described in Exhibit A attached hereto (“Property”).

 

B.                                    Tenant is the lessee under a lease dated June           , 2012, executed by Owner (or its predecessor in interest), as landlord, and Tenant, as tenant (as the same may have been amended the “Lease”), covering certain premises set forth more fully in the Lease (the “Premises”) compromising all or a part of the Property.

 

C.                                    Lender is the current holder of a mortgage loan (the “Loan”) previously made to Owner, evidenced by a note (the “Note”) and secured by, among other things: (a) a first mortgage, deed of trust or deed to secure debt encumbering the Property (the “Mortgage”); and (b) a first priority assignment of leases and rents on the Property (the “Assignment of Leases and Rents”) contained in the Mortgage or in a separate document. The Mortgage and the Assignment of Leases and Rents are collectively referred to as the “Security Documents.” The Note, the Security Documents and all other documents executed in connection with the Loan are collectively referred to as the “Loan Documents.”

 

D.                                    Tenant has requested Lender’s agreement that if Lender forecloses the Mortgage or otherwise exercises Lender’s remedies under the Security Documents, Lender will not disturb Tenant’s right to quiet possession of the Premises under the terms of the Lease.

 

E.                                     Lender is willing to so agree on the terms and conditions provided in this Agreement, including, without limitation. Tenant’s agreement to subordinate the Lease and attorn to Lender as provided herein.

 

Exhibit I - Page 2 of 9

 

NOW, THEREFORE, for mutual consideration, including the mutual covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      SUBORDINATION. The Lease is and shall remain unconditionally subject and subordinate to (a) the liens or charges imposed by the Security Documents, (b) all currently outstanding or future advances secured by the Security Documents, and (c) all renewals, amendments, modifications, consolidations, replacements and extensions of the Security Documents. The subordination described herein is intended by the parties to have the same force and effect as if the Security Documents and such renewals, modifications, consolidations, replacements and extensions of the Security Documents had been executed, acknowledged, delivered and recorded prior to the Lease and any amendments or modifications thereof.

 

2.                                      NON-DISTURBANCE. If Lender exercises any of its rights under the Security Documents, including any right of entry on the Property pursuant to the Mortgage or upon a foreclosure of or deed in lieu of foreclosure of the Mortgage, Lender shall not disturb Tenant’s right of quiet possession of the Premises under the terms of the Lease, so long as Tenant is not in default under this Agreement or in default beyond any applicable notice and cure period under the Lease.

 

3.                                 ATTORNMENT. Notwithstanding anything to the contrary contained in the Lease, should title to the Premises and the landlord’s interest in the Lease be transferred to Lender or any other person or entity by foreclosure of or deed in-lieu of foreclosure of the Mortgage. Tenant shall for the benefit of Lender or such other person or entity, effective immediately and automatically upon the occurrence of any such transfer, attom to Lender or such other person or entity as landlord under the Lease and shall be bound under all provisions of the Lease including, but not limited to, the obligation to pay all rent required to be paid by Tenant pursuant to the terms of the Lease, for the remainder of the Lease term, and any option to renew with respect to the Property, as may be provided in the Lease.

 

4.                                 PROTECTION OF LENDER. If Lender succeeds to the interest of landlord under the Lease, Lender shall not be:

 

(a)    liable for any act or omission of any previous landlord under the Lease;

 

(b)    subject to any offsets or defenses which Tenant may have against any previous landlord under the Lease;

 

(c)     bound by any payment of rent or  additional rent which Tenant might have paid for more than one month in advance of the due date under the Lease to any previous landlord, except to the extent such monies are actually received by Lender;

 

(d)    obligated to make any payment to Tenant which any previous landlord was required to make before Lender succeeded to the landlord’s interest;

 

(e)     accountable for any monies deposited with any previous landlord (including security deposits), except to the extent such monies are actually received by Lender;

 

(f)      bound by any amendment or modification of the Lease or any waiver of any term of the Lease made without Lender’s written consent, which consent shall not be unreasonably withheld, delayed or conditioned;

 

(g)     bound by any surrender or termination of the Lease made without Lender’s written consent (unless effected unilaterally by Tenant pursuant to the express terms of the Lease);

 

(h)    obligated to complete any improvement construction on the Property or to pay or reimburse Tenant for any tenant improvement allowance, construction allowance or leasing commissions:

 

(i)        liable for any default of any previous landlord under the Lease; and

 

2

 

Exhibit I - Page 3 of 9

 

(j) bound by any provision in the Lease granting Tenant a purchase option or fast right of refusal or offer with regard to the purchase of the Property.

 

Furthermore, notwithstanding anything to the contrary contained in this Agreement or the Lease, upon any such succession, the Lease shall be deemed to have been automatically amended to provide that Lender’s obligations and liabilities under the Lease shall be limited solely to Lender’s interest, if any, in the Property, and the proceeds from any sale or disposition of the Property by Lender (collectively, “Lender’s Interest”) and, following such succession, Tenant shall look exclusively to Lender’s Interest for the payment or discharge of any obligations of Lender under the Lease.

 

Nothing contained in Sections 4(a) or 4(i) above, however shall relieve Lender from Lender’s obligation to cure any maintenance default under the Lease with respect to the Premises by any prior landlord under the Lease (including Owner) which is continuing when Lender succeeds to Owner’s interest under the Lease and acquires title to the Premises, provided that (and on the conditions that) (i) Lender had written notice of such default in accordance with Section 5 below prior to succeeding to Owner’s interest under the Lease and acquiring title to the Premises, (ii) Lender had (and is given) a reasonable opportunity to cure such default, and (iii) Lender’s obligation to cure such default shall be limited solely to performing the maintenance obligations as required pursuant to the terms of the Lease (and in no event shall Lender have any other liability or obligation with respect to such default or be liable for any damages in connection therewith). Notwithstanding the foregoing however, the Lender shall only be liable for damages which total, in the aggregate for the term of the Lease (for that period of time in which the named Lender has succeeded to the named Owner’s interest), no more than (y) $25,000.00 for any non-structural repair or maintenance default under the Lease; or (z) $75,000.00 for any default related to the roof or structural integrity of the Premises.

 

5.                                      LENDER’S RIGHT TO CURE. Tenant shall deliver to Lender a copy of any notice of any default(s) by landlord under the Lease in the same manner as, and whenever, Tenant shall give any such notice to Owner, and no such notice shall be deemed given to Owner unless and until a copy of such notice shall have been so delivered to Lender. Lender shall have the right to remedy, or cause to be remedied, any default by Owner under the Lease, and, for such purpose Tenant grants Lender such additional period of time as may be reasonable to enable Lender to remedy, or cause to be remedied, any such default, in addition to the period given to Owner for remedying, or causing to be remedied, any such default, such additional period of time not to exceed ninety (90) days. Tenant shall accept performance by Lender of any covenant or condition to be performed by Owner under the Lease with the same force and effect as though performed by Owner. No default by Owner under the Lease shall exist or shall be deemed to exist (a) so long as Lender, in good faith, shall have commenced to cure such default within the above-referenced time period and shall be prosecuting the same to completion with reasonable diligence, subject to force majeure, or (b) if possession of the Premises is required in order to cure such default, or if such default is not susceptible of being cured by Lender, so long as Lender, in good faith, shall have notified Tenant that Lender intends to institute enforcement proceedings under the Security Documents, and, thereafter, so long as such proceedings shall have been instituted and shall be prosecuted with reasonable diligence. Lender shall have the right, without notice to Tenant or Tenant’s consent, to foreclose the Mortgage or to accept a deed in lieu of foreclosure of the Mortgage or otherwise realize upon the Mortgage or to exercise any other remedies under the Security Documents or state law.

 

6.                                      ASSIGNMENT OF LEASES AND RENTS. Tenant consents to the Assignment of Leases and Rents and acknowledges Lender shall have no duty, liability or obligation whatsoever under the Lease or any extension or renewal thereof, either by virtue of said assignment or by any subsequent receipt or collection of rents thereunder, unless Lender shall specifically undertake such liability in writing or unless Lender or its designee or nominee becomes, and then only with respect to periods in which Lender or its designee or nominee becomes, the fee owner of the Premises. Upon Tenant’s receipt of a written notice from Lender of a default by Owner under the Loan, Tenant shall thereafter, if requested in writing by Lender, pay rent to Lender in accordance with the terms of the Lease, and Owner hereby holds Tenant harmless for any payments so made at the direction of Lender. Lender’s delivery of such notice to Tenant, or Tenant’s compliance therewith, shall not be deemed to (a) cause Lender to succeed to or assume any obligations or responsibilities of Owner under the Lease or (b) relieve Owner of any of its obligations under the Lease.

 

3

 

Exhibit I - Page 4 of 9

 

7.                                      INSURANCE PROCEEDS AND CONDEMNATION AWARDS. Notwithstanding anything to the contrary contained in this Agreement or the Lease, the terms of the Loan Documents shall continue to govern with respect to the disposition of any insurance proceeds or condemnation awards, and any obligations of Owner to restore the Property following a casualty or condemnation shall, insofar as they apply to Lender, be limited to the amount of any insurance proceeds or condemnation awards received by Lender after the deduction of all costs and expenses incurred in obtaining such proceeds or awards. Following the foreclosure or deed in lieu of foreclosure of the Mortgage, the provisions of this section shall remain in full force and effect unless and until fee title to the Premises becomes vested in a person or entity other than (a) the holder of the Loan at the time of such foreclosure or deed in lieu of foreclosure or (b) a parent, subsidiary or affiliate of such holder.

 

8.                                      ASSIGNMENT OF LEASE BY TENANT. Tenant shall not assign any right or interest of Tenant under the Lease (except for an assignment that is permitted under the Lease without Owner’s consent), without Lender’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned.

 

9.                                      MISCELLANEOUS.

 

9.1                               Heirs, Successors and Assigns. The covenants herein shall be binding upon, and inure to the benefit of, the heirs, successors and assigns of the parties hereto. The term “Lender” as used herein includes any successor or assign of the named Lender herein, including without limitation, any co-lender at the time of making the Loan, any purchaser at a foreclosure sale and any transferee pursuant to a deed in lieu of foreclosure, and their successors and assigns, trustees and agents, as well as any single purpose entity established by Lender to take title to the Property by reason of such foreclosure or deed in lieu of foreclosure. The terms “Tenant” and “Owner” as used herein include any successor or assign of the named Tenant and Owner herein, respectively; provided, however, that such reference to Tenant’s or Owner’s successors and assigns shall not be construed as Lender’s consent to any assignment or other transfer by Tenant or Owner.

 

9.2                               Addresses; Request for Notice. All notices and other communications that  are  required or permitted to be given to a party under this Agreement shall be in writing and shall be sent to such party, either by personal delivery, by overnight delivery service, by certified first class mail, return receipt requested, or by facsimile transmission, to the address or facsimile number below. All such notices and communications shall be effective upon receipt of such delivery or facsimile transmission. The addresses and facsimile numbers of the parties shall be:

 

	
Tenant:
    	
 
    	
Lender:
    
	
 
    	
 
    	
 
    
	
Auxilium Pharmaceuticals, Inc.
    	
 
    	
Wells Fargo Bank, NA., as Master Servicer
    
	
Attn: Andrew I. Koven, Chief
    	
 
    	
Attn: Lease Reviews
    
	
Administrative
    	
 
    	
1901 Harrison Street, 2nd Floor
    
	
Officer and General Counsel
    	
 
    	
Oakland, California 94612
    
	
640 Lee Road
    	
 
    	
FAX No.: 510-446-4468
    
	
Wayne, PA 19087
    	
 
    	
 
    
	
FAX No.: 484-321-5999
    	
 
    	
 
    

 

Provided, however, any party shall have the right to change its address for notice hereunder by the giving of written notice thereof to the other party in the manner set forth in this Agreement.

 

9.3                               Entire Agreement. This Agreement constitutes the entire agreement between Lender and Tenant with regard to the subordination of the Lease to the Security Documents and the rights and obligations of Tenant and Lender as to the subject matter of this Agreement, and shall supersede and cancel, but only insofar as would affect the priority between the Security Documents and the Lease, any prior agreements as to such subordination, including, without limitation, those provisions, if any, contained in the Lease which provide for the subordination of the Lease to a deed or deeds of trust, a mortgage or mortgages, a deed or deeds to secure debt or a trust indenture or trust indentures.

 

4

 

Exhibit I - Page 5 of 9

 

9.4                               Disbursements. Lender, in making disbursements of any funds pursuant to the Loan Documents, is under no obligation to, nor has Lender represented that it will, monitor or control the application of such funds by the recipient and any application of such funds, including, without lhnitation, any application of such funds for purposes other than those provided for in the Loan Documents, shall not defeat this agreement to subordinate in whole or in part.

 

9.5                               Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all  of  which together shall constitute and be construed as one and the same instrument.

 

9.6                               Section Headings. Section headings in this Agreement are for convenience only and are not to be construed as part of this Agreement or in any way limiting or applying the provisions hereof.

 

9.7                               Attorneys’ Fees. If any legal action, suit or proceeding is commenced between Tenant and Lender regarding their respective rights and obligations under this Agreement. the prevailing party shall be entitled to recover, in addition to damages or other relief, costs and expenses, attorneys’ fees and court costs (including, without limitation, expert witness fees). As used herein, the term “prevailing party” shall mean the party which obtains the principal relief it has sought, whether by compromise settlement or judgment. If the party which commenced or instituted the action, suit or proceeding shall dismiss or discontinue it without the concurrence of the other party, such other party shall be deemed the prevailing party.

 

9.8                               Severability. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to be enforceable, or if such modification is not practicable, such provision shall be deemed deleted from this Agreement, and the other provisions of this Agreement shall remain in full force and effect, and shall be liberally construed in favor of Lender.

 

9.9                               Termination: Amendment. Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought.

 

9.10                        Governing Law. This Agreement and any claim, controversy or dispute arising under or related to or in connection with this Agreement, the relationship of the parties or the interpretation and enforcement of the rights and duties of the parties shall be governed by the law of the state where the Property is located, without regard to any conflicts of law principles.

 

9.11                        Authority. All persons executing this Agreement jointly and severally represent and warrant to the others that such persons are duly authorized to do so and that such execution hereof is the binding act of such party enforceable against such party.

 

9.12                        Form of Agreement. Owner and Tenant acknowledge that Wells Fargo Bank, N.A. enters into numerous agreements of this type on a regular basis, both in its own capacity and as a commercial, mortgage servicer on behalf of other lenders, and that the specific provisions contained in any agreement of this type entered into by Wells Fargo Bank, N.A. will vary depending on numerous transaction-specific factors, including, without limitation, the borrowers, loan documents, tenants, leases, servicers, servicing agreements and property and market conditions involved in the transaction. Accordingly, Owner and Tenant further acknowledge that the specific provisions contained in this Agreement will not necessarily be acceptable to Wells Fargo Bank, N.A. in connection with any other transaction.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

5

 

Exhibit I - Page 6 of 9

 

LENDER:

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to BANK OF AMERICA, N.A., as Trustee, successor by merger to LASALLE BANK NATIONAL ASSOCIATION, as Trustee, for Bear Steams Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-TOP22

 

	
By:
    	
Wells Fargo Bank, National Association, as Master Servicer
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    
	
AUXILIUM PHARMACEUTICALS, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Its:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
OWNER:
    	
 
    
	
 
    	
 
    
	
CHESTERBROOK PARTNERS, LP, 
    	
 
    
	
a Delaware limited partnership
    	
 
    
	
 
    	
 
    
	
By: Tredyffrin GP, LLC, a   Delaware limited liability company, its general partner
    	
 
    
	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Its:
    	
 
    	
 
    
					

 

IT IS RECOMMENDED THAT, PRIOR TO EXECUTING THIS AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT HERETO.

 

6

 

Exhibit I - Page 7 of 9

 

ALL SIGNATURES MUST BE ACKNOWLEDGED.

 

	
STATE OF
    	
 
    	
)
    
	
 
    	
 
    	
) SS.
    
	
COUNTY OF
    	
 
    	
)
    

 

On                                              , 2012, personally appeared the above named                                           , a                               of WELLS FARGO BANK, NATIONAL ASSOCIATION, acting in its authorized capacity as Master Servicer for and on behalf of U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to BANK OF AMERICA, N.A., as Trustee, successor by merger to LASALLE BANK NATIONAL ASSOCIATION, as Trustee, for Bear Steams Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-TOP22, and acknowledged the foregoing to be the free act and deed of said association, before me.

 

	
 
    	
 
    
	
 
    	
Notary Public
    
	
 
    	
My commission expires:
    	
 
    

 

                                              , SS.

 

On                              ,  2012, personally appeared the above named                                  , the                               , of AUXILIUM PHARMACEUTICALS, INC, and  acknowledged the foregoing to be the free act and deed of said                , before me.

 

	
 
    	
 
    
	
 
    	
Notary Public
    
	
 
    	
My commission expires:
    	
 
    

 

                                              , SS.

 

On                              ,  2012, personally appeared the above named                                  , the                               , of TREDYFFRIN GP, LLC, the General Partner of CHESTERBROK PARTERS, LP and  acknowledged the foregoing to be the free act and deed of said                , before me.

 

	
 
    	
 
    
	
 
    	
Notary Public
    
	
 
    	
My commission expires:
    	
 
    

 

Exhibit I - Page 8 of 9

 

EXHIBIT A

(Description of Property)

 

EXHIBIT A to SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT dated as of                                     , executed by AUXILIUM PHARMACEUTICALS, INC., as “Tenant”, and U.S. BANK NATIONAL ASSOCIATION, as Trustee, successor-in-interest to BANK OF AMERICA, N.A., as Trustee, successor by merger to LASALLE BANK NATIONAL ASSOCIATION, as Trustee, for Bear Stearns Commercial Mortgage Securities Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-TOP22, as “Lender.”

 

All that certain land located in the County of                                , State of                                      , described as follows:

 

Exhibit I - Page 9 of 9

 

EXHIBIT “J”

 

EXPANSION SPACE

 

 

Exhibit J - Page 1 of 1

 

EXHIBIT “K”

 

BID PACKAGE FORMAT

 

[Attached as following page.]

 

Exhibit K - Page 1 of 11

 

 

PROPOSAL FORM

Auxilium Pharmaceuticals, Inc. Tenant Improvement Project

640 Lee Road, Wayne, PA 19087

Prepared by Pitcairn Properties Management Company

June XX, 2012

 

	
General Contractor:
    	
 
    
	
 
    	
 
    
	
Submitted By:
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
Phone:
    	
 
    
	
 
    	
 
    
	
Email:
    	
 
    
	
 
    	
 
    
	
Date Submitted:
    	
 
    
	
 
    	
 
    
	
Bid Due Date:
    	
[BID DUE DATE]
    
	
 
    	
 
    
	
Pre-Bid Walk-Through:
    	
[PRE-BID MEETING INFO]
    
	
(Mandatory)
    	
 
    

 

Submit Proposal via email and one hard copy to: 

Amanda Matthews, VP and Director of Construction 

Pitcairn Properties Management Company

165 Township Line Road, Suite 1500,

Jenkintown, PA 19046

Phone: 215-690-3048

Email: amatthews@pitcairnproperties.com

 

With a copy to each of the following: 

Auxilium Pharmaceuticals, Inc.

 

[TENANT CONTACT INFORMATION]

 

	
Initialed and dated by General Contractor:
    	
 
    	
 
    

 

 

Exhibit K - Page 2 of 11

 

A.                                    Pricing Format:

The Bid Form is in a detailed lump sum format. The trade line items and alternates are to be itemized on the provided Bid Form and attached as Exhibit “A.” Please follow the format provided for equal comparison purposes between bidders. Provide supporting breakdown information (quantities and unit costs) and attach to Exhibit “A” for further explanation.

 

The successful Contractor will be required to execute a Contract for Improvement Work between said Contractor, Pitcairn Properties Management Company, LLC (Manager), and SEB Investment GmbH (Owner). A sample of this Contract and the associated Insurance Requirements are included within this RFP. Note that the “boiler plate” Contract language is non-negotiable.

 

B.                                    General Conditions:

Provide a detailed breakdown of general conditions line items and attach as Exhibit “B.” General conditions breakdown should include, but not be limited to: dumpsters, cleaning, protection, staffing, printing, travel, etc.

 

C.                                    Unit Pricing:

Provide specific unit pricing as outlined on the provided form and attach as Exhibit “C.” Include material, labor, and OH&P breakdowns as shown on the Unit Pricing Form.

 

D.                                    Schedule:

Based on the information contained within this RFP and the information you have gathered in your preparation for the proposal, please provide a critical milestone project schedule highlighting critical path categories and attach as Exhibit “D.”  Construction is anticipated to begin on or around XX/XX/2012; with substantial completion by XX/XX/2012.

 

The successful GC will be required to apply for a demolition permit separate from the building permit. The intent is to begin demolition immediately upon GC award and perform this work while the building permit application is being processed.

 

Note that the building is currently partially occupied by tenants, whom will be relocated out of the Premises. These tenants will remain in the building for a short time until their new suites are ready for occupancy. The work within this contract will overlap with the existing tenancy, therefore some selective demolition on the 2nd floor and phasing will be required for approximately 4-6 weeks or less.

 

E.                                     Long Lead Items:

Based on the information contained within this RFP and the information you have gathered in your preparation for the proposal, please provide a list of potential long lead items and identify the potential affect each item would have on the Project Schedule. This document shall be attached as Exhibit “E.”

 

	
Initialed and dated by General Contractor:
    	
 
    	
 
    

 

Page 2 of 5

 

Exhibit K - Page 3 of 11

 

F.                                      Staff:

Please provide an Organizational Chart representing your proposed project team, describe your proposed staff, and attach their professional profiles. This document shall be attached as Exhibit “F.”

 

G.                                    Subcontractors:

A list of preferred subcontractors has been provided within this RFP. Note that bidders are not required to use these subcontractors, but bidders are encouraged to solicit proposals from the firms listed. Provide within your proposal a list of proposed subcontractors and attach it as Exhibit “G.” The  list must include three (3) subcontractors for each trade.

 

Note that union labor is not specifically required for this project, but all bidders are stronaly encouraged to solicit bids from union subcontractors for the larger trades. All bidders are required to indicate which trades have been priced using union labor on the Bid Form (Exhibit “A”) provided.

 

H.                                   Insurance:

The building insurance requirements have been provided within this REP. Please provide a sample Certificate of Insurance showing the general liability and excess liability insurance coverage, as well as the workman’s compensation insurance coverage. Include a letter from your worker’s compensation carrier identifying your current experience modification factor. All insurance information shall be attached as Exhibit “H.”

 

I.                                        Similar Project Experience:

Please provide a minimum of five (5) descriptions of projects completed by your firm within the last two (2) years that are similar in scope to the Auxilium Pharmaceuticals, Inc. tenant improvement. The project descriptions should include photographs, a brief narrative describing the work performed, the project cost, the project size in SF, and the names of the  GC  team members. Please also include client references, including contact information, for each project listed. The project descriptions shall be attached as Exhibit “I.”

 

J.                                        Coordination:

The successful General Contractor will be expected to attend all preconstruction / construction meetings (anticipated to be weekly) and assist the Owner, Tenant, and design consultants with logistics planning, budgeting, schedule preparation, etc. The GC will be expected to coordinate with the tenant’s contractors as required in order to complete the project within the allotted timeframe. The costs for these services are to be included in the General Conditions and within the total Lump Sum amount.

 

K.                                   Construction Documentation:

The signed and sealed Permit Drawings will be provided by the design consultants to the GC in hard copy format for submission to Tredyffrin Township. Note that no other hard copies of the plans or bulletins will be provided to the General Contractor or the subcontractors; all distributions will be made electronically. The General Contractor will

 

	
Initialed and dated by General Contractor:
    	
 
    	
 
    

 

Page 3 of 5

 

Exhibit K - Page 4 of 11

 

be expected to issue all construction documentation electronically where possible, with the intent of incurring as little reproduction costs as is feasible.

 

L.                                     MBE / WBE Participation:

MBE / WBE Participation is not specifically required for this project, but all bidders are strongly encouraged to solicit bids from MBE / WBE subcontractors.

 

M.                                 Scope of Work:

The Scope of Work includes 100% of the plans and specifications included within the Bid Document List below. The following information should also be incorporated into the Lump Sum Proposal during its development.

 

1.              The following work is to be furnished and installed by the Owner or Tenant, unless rioted otherwise within the bid documents:

 

a.              Furniture

b.              Telecommunications

c.               Audio/ Visual

d.              Security

e.               Signage

 

Note that coordination with these trades will be required by the GC. The GC will be responsible for all mechanical and electrical work for these trades as noted on the bid documents.

 

2.              Work in the existing restrooms and core spaces are not included, except as noted on the bid documents. See the “Base Building Bid Form” for the scope of work that is to be bid and performed separate from the Auxilium Tenant Improvement.

 

3.              Include necessary floor preparation within the corresponding line item on the Bid Form (Exhibit “A”).

 

4.              DETAILED SCOPE OF WORK CLARIFICATIONS ARE T.B.D. UNTIL THE BID DOCUMENTS ARE ISSUED.

 

Pitcairn and Auxilium intend to interview approximately two (2) of the bidders within one week of the bid submission. Pitcairn Properties, Inc. intends to negotiate a contract with the most responsive bidder no later than XX/XX/2012. Responsiveness will be judged on the combined basis of the Lump Sum Breakdown, management procedures, project team experience, experience with similar projects, and understanding of the project.

 

The successful Contractor shall exercise its best skill and judgment and cooperate with the Architect, consultants, and all parties in forwarding the best interests of the Tenant and Owner. The successful contractor will be responsible for all permitting, inspections, approvals, and Certificates of Occupancy required by Tredyffrin Township and all other applicable governing authorities.

 

The undersigned understands that PPMC reserves the right to reject any or all proposals and to waive any informalities in the process.

 

	
Initialed and dated by General Contractor:
    	
 
    	
 
    

 

Page 4 of 5

 

Exhibit K - Page 5 of 11

 

Exhibits to be Provided by Bidders:

 

A                                       Lump Sum Detailed Bid Form

B                                       General Conditions Breakdown

C                                       Unit Pricing Breakdown

D                                       Project Schedule

E                                        Long Lead Items

F                                         Organization Chart, Resumes of the Project Team, Description of Staff

G                                       List of Proposed Subcontractors

H                                      Sample Certificate of Insurance 

I                                           Similar Project Experience

 

RFP Document List:

 

	
Document
    	
 
    	
Prepared By
    	
 
    	
Latest Issue
    
	
RFP Form
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Exhibit A: Construction, Bid Form
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Exhibit C: Unit Pricing Breakdown
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
List of Preferred Subcontractors
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Building Insurance Requirements
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Building Rules and Regulations
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Sample Contract for Improvement Work
    	
 
    	
Pitcairn Properties
    	
 
    	
XX/XX/2012
    
	
Construction Drawings — Bid Set
    	
 
    	
 
    	
 
    	
 
    
	
TBD
    	
 
    	
D2 Solutions
    	
 
    	
XX/XX/2012
    

 

Please be sure to initial, date, and submit this RFP Form will your Lump Sum Proposal. By initialing this RFP Form, the GC hereby acknowledges and confirms that all information within this RFP Form is included within the Lump Sum Proposal.

 

	
Initialed and dated by General Contractor:
    	
 
    	
 
    

 

Page 5 of 5

 

Exhibit K - Page 6 of 11

 

EXHIBIT A: CONSTRUCTION BID FORM

AUXILIUM PHARMACEUTICALS, INC. TENANT IMPROVEMENT

JUNE XX, 2012

 

	
Pitcairn Properties, Inc.
    	
Architect: D2 Solutions
    
	
Chesterbrook Corporate Center
    	
Engineer: TBD
    
	
640 Lee Road, Wayne, PA 19087
    	
Plans: See RFP Document List 
    
	
Prepared By:
    	
Estimated RSF: 74,516
    

 

	
Trade
    	
 
    	
Indicate Union
   or Non-Union
    	
 
    	
Cost ($)
    	
 
    	
$ / SF
    	
 
    
	
Demolition and Dumpsters
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Miscellaneous Metals
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Millwork, Wood Sills,   Solid Surface Tops, and Wood Base
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Reception Desk Allowance
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Accent Wall Allowance   (Reception & Board Room)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Roof Patching
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Joint Sealants
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Stone / Ceramic Flooring
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Doors, Frames, Hardware
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Glass, Glazing, Glass   Doors, and Window Film
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Transwall Demountable   Storefront System
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Acoustical Ceilings
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall and Rough   Carpentry
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Vinyl Composition Tile,   Resilient Flooring, and Vinyl Base
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Carpet and Carpet Tile
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering and   Upholstered Panels
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Painting
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Signage
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Moveable Partitions
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Appliances
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Projection Screens
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Window Treatments
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Sprinkler Systems and Fire   Extinguishers
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
FM200 System
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Plumbing
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
HVAC
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Electrical, Lighting, and   Fire Alarm
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
General   Conditions, Insurance and Sales Tax
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Building and Occupancy   Permits
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
GC Profit/Fee
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Construction Contingency   (5% of all hard costs)
    	
 
    	
N/A
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
SUBTOTAL HARD COSTS
    	
 
    	
—
    	
 
    	
0
    	
 
    	
0.00
    	
 
    
	
SOFT COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Architectural Fees - d2   Solutions
    	
 
    	
—
    	
 
    	
163,935
    	
 
    	
2.20
    	
 
    
	
MEP/FP Engineering Design   Fees
    	
 
    	
—
    	
 
    	
55,000
    	
 
    	
0.74
    	
 
    
	
PPI Construction   Management Fee (3% of all hard costs)
    	
 
    	
—
    	
 
    	
0
    	
 
    	
0.00
    	
 
    
	
SUBTOTAL SOFT COSTS
    	
 
    	
 
    	
 
    	
218,935
    	
 
    	
2.94
    	
 
    
	
TOTAL PROJECT COST
    	
 
    	
—
    	
 
    	
218,935
    	
 
    	
2.94
    	
 
    

 

Page 1 of 2

 

Exhibit K - Page 7 of 11

 

EXHIBIT A: CONSTRUCTION BID FORM

AUXILIUM PHARMACEUTICALS, INC. TENANT IMPROVEMENT

JUNE XX, 2012

 

	
Pitcairn Properties, Inc.
    	
 
    	
Architect: D2 Solutions
    
	
Chesterbrook Corporate Center
    	
 
    	
Engineer: TBD
    
	
640 Lee Road, Wayne, PA 19087
    	
 
    	
Plans: See RFP Document List
    
	
Prepared By:
    	
 
    	
Estimated RSF: 74,516
    

 

	
SUMMARY   OF ALTERNATES (GC Hard Costs ONLY)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TO BE DETERMINED
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUBTOTAL   ALTERNATES
    	
 
    	
0
    	
 
    	
0.00
    	
 
    
	
TOTAL   PROJECT COST (Including Alternates)
    	
 
    	
218,935
    	
 
    	
2.94
    	
 
    

 

ADDITIONAL PRICING NOTES:  

TO BE DETERMINED

 

Page 2 of 2

 

Exhibit K - Page 8 of 11

 

 

PREFERRED SUBCONTRACTOR LIST

 

Auxilium Pharmaceuticals, Inc. Tenant Improvement Project
 640 Lee Road, Chesterbrook Corporate Center, Wayne, PA 19087
 Prepared by Pitcairn Properties Management Company
 June XX, 2012

 

	
Trade
    	
 
    	
Subcontractor
    
	
 
    	
 
    	
 
    
	
Millwork
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Flooring
    	
 
    	
TO BE DETERMINED BY PITCAIRN AND AUXILIUM
    
	
 
    	
 
    	
 
    
	
Painting
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Mechanical
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Plumbing
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sprinklers
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Electrical
    	
 
    	
 
    

 

Exhibit K - Page 9 of 11

 

 

EXHIBIT C: UNIT PRICING BREAKDOWN
 AUXILIUM PHARMACEUTICALS, INC. TENANT IMPROVEMENT
 JUNE XX, 2012

 

	
Pitcairn Properties, Inc.
    	
Architect: D2 Solutions
    
	
Chesterbrook Corporate Center
    	
Engineer: TBD
    
	
640 Lee Road,   Wayne, PA   19087
    	
Plans: See RFP Document List
    
	
Prepared By:
    	
Estimated RSF: 74,516
    

 

	
Item - Furnished and Installed (unit)
    	
 
    	
Material Cost
   ($)
    	
 
    	
Labor Cost ($)
    	
 
    	
OH&P ($)
    	
 
    	
Total Unit
   Price ($)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Door and frame assembly type “A” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “B” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “C” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “D” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “E” (each)
    	
 
    	
THIS IS A SAMPLE FROM A   PREVIOUS
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “F” (each)
    	
 
    	
PROJECT. THE ITEMS WILL BE   SPECIFIED
    	
 
    	
0.00
    	
 
    
	
Door and frame assembly type “G” (each)
    	
 
    	
FOR THE AUXILIUM PROJECT   WHEN THE
    	
 
    	
0.00
    	
 
    
	
 
    	
 
    	
DESIGN DOCS ARE FINALIZED.
    	
 
    	
 
    	
 
    
	
Door hardware type “a” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “b” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “c” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “d” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “e” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “f” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “g” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “h” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “i” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “j” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “k” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Door hardware type “l” (each)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Drywall Partition Type ‘A’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall Partition Type ‘B’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall Partition Type ‘C’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall Partition Type ‘D’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall Partition Type ‘E’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Drywall Partition Type ‘G’ (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Wall base B-1: 4” vinyl wall base (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wall base B-2: 4” wood wall base (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wall base B-3: 4” stone wall base (per LF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wall paint P-1, P-2, P-3 (per SF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering WC-1 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering WC-2 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering WC-3 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering WC-4 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Wallcovering WC-5 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Carpet tile C-1 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Broadloom carpet C-2 (per SY)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Stone flooring ST-1 (per SF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Vinyl tile Flooring VT-1 (per SF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
Vinyl composite tile flooring VCT-1 (per SF)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
0.00
    	
 
    

 

Page 1 of 2

 

Exhibit K - Page 10 of 11

 

 

EXHIBIT C: UNIT PRICING BREAKDOWN

AUXILIUM PHARMACEUTICALS, INC. TENANT IMPROVEMENT

JUNE XX, 2012

 

	
Pitcairn Properties, Inc.
    	
Architect: D2 Solutions
    
	
Chesterbrook Corporate Center
    	
Engineer: TBD
    
	
640 Lee Road,   Wayne, PA   19087
    	
Plans: See RFP Document List
    
	
Prepared By:
    	
Estimated RSF: 74,516
    

 

	
Standard duplex electrical receptacle (each)
    	
 
    	
0.00
    	
 
    
	
Standard quadplex electrical receptacle (each)
    	
 
    	
0.00
    	
 
    
	
Dedicated duplex electrical receptacle (each)
    	
 
    	
0.00
    	
 
    
	
Voice/ data port (each)
    	
 
    	
0.00
    	
 
    
	
Cable television port (each)
    	
 
    	
0.00
    	
 
    
	
Flush floor mounted electrical receptacle - using core drill (each)
    	
 
    	
0.00
    	
 
    
	
Flush floor mounted voice/ data receptacle - using core drill (each)
    	
 
    	
0.00
    	
 
    
	
“Focal Point Twelve” light fixture (each)
    	
 
    	
0.00
    	
 
    
	
“Focal Point Luna” 1’x4’ light fixture (each)
    	
 
    	
0.00
    	
 
    
	
“Corelite” 2’x2’ light fixture (each)
    	
 
    	
0.00
    	
 
    
	
“Corelite” 2’x4’ light fixture (each)
    	
 
    	
0.00
    	
 
    
	
“Cooper Lighting Portfolio” fluorescent downlight (each)
    	
 
    	
0.00
    	
 
    
	
“Cooper Lighting Portfolio” MR16 downlight (each)
    	
 
    	
0.00
    	
 
    
	
“Oxygen Odyssey” wall sconce fixture (each)
    	
 
    	
0.00
    	
 
    
	
“Atlite” LED exit light fixture (each)
    	
 
    	
0.00
    	
 
    
	
Fire alarm strobe (each)
    	
 
    	
0.00
    	
 
    
	
Combination fire alarm speaker/strobe (each)
    	
 
    	
0.00
    	
 
    

 

Page 2 of 2

 

Exhibit K - Page 11 of 11

 

EXHIBIT “L”

 

LETTER OF CREDIT REQUIREMENTS

 

a.                   Letter of Credit as Security Deposit.  Tenant shall deliver to Landlord (as beneficiary) a standby letter of credit (“Letter of Credit”) in form and content satisfying the requirements of this Exhibit “L”.

 

b.      Requirements of Letter of Credit.  The Letter of Credit shall be, among other things:

 

(i)                              subject to the International Standby Practices 1998, International Chamber of Commerce Publication No. 590;

 

(ii)                           irrevocable and unconditional;

 

(iii)                        in the amount of $456,410.49;

 

(iv)                       conditioned for payment solely upon presentation of the Letter of Credit and a sight draft (or Landlord, at its election, may require a uniform form of non-presentment letter of credit); and

 

(v)                            transferable one or more times by Landlord without the consent of Tenant.

 

c.                    Transfer Fee.  Tenant acknowledges and agrees that it shall pay upon Landlord’s demand, as Additional Rent, any and all costs or fees charged in connection with the Letter of Credit that arise due to: (i) Landlord’s sale or transfer of all or a portion of 640 Lee Road, Wayne, Pennsylvania;  or (ii) the addition, deletion, or modification of any beneficiaries under the Letter of Credit.

 

d.                   Issuing Bank.  The Letter of Credit shall be issued by a member of the New York Clearing House Association or a commercial bank or trust company reasonably satisfactory to Landlord, having a net worth of not less than that which is reasonably acceptable to Landlord.  Landlord acknowledges that Silicon Valley Bank is reasonably acceptable to Landlord.

 

e.                    Expiration or Reduction of Letter of Credit.  The Letter of Credit shall expire not earlier than 12 months after the date of delivery thereof to Landlord and shall provide that same shall be automatically renewed for successive 12-month periods through March 30, 2024, unless written notice of nonrenewal has been given by the issuing bank to Landlord and Landlord’s attorney by registered or certified mail, return receipt requested, not less than 90 days prior to the expiration of the current period; provided, however, that if the Commencement Date of the Lease is later than January 1, 2013, Tenant shall within 30 days of notice of the determination of such later Commencement Date provide an amended LOC to Landlord which has a termination date which is 90 days following the Expiration Date of the Lease based upon the actual Commencement Date.  If the issuing bank does not renew the Letter of Credit, and if Tenant does not deliver a substitute Letter of Credit at least 30 days prior to the expiration of the current

 

Exhibit L - Page 1 of 2

 

period, then, in addition to its rights granted under Section 34 of the Lease, Landlord shall have the right to draw on the existing Letter of Credit.  To the extent Tenant is permitted under the Lease to reduce the amount of the Letter of Credit, Landlord shall cooperate with Tenant to allow the original Letter of Credit to be exchanged by the issuing bank for a replacement Letter of Credit in such lower amount.

 

f.       Draws.

 

(i)                              Landlord may draw on, use, apply, or retain the proceeds of the Letter of Credit to the same extent that Landlord may use, apply, or retain the cash security deposit, as set forth in Section 34  of the Lease; and

 

(ii)                           If Landlord partially draws down the Letter of Credit, Tenant shall, within ten (10) business days after Landlord gives Tenant notice thereof, restore all amounts drawn by Landlord, or substitute cash security instead.

 

g.                   Cooperation by Tenant.  Tenant hereby agrees to cooperate, at its expense, with Landlord to promptly execute and deliver to Landlord any and all modifications, amendments, and replacements of the Letter of Credit, as Landlord may reasonably request to carry out the terms and conditions of Section 34.

 

Exhibit L - Page 2 of 2

 

EXHIBIT “M”

 

PARKING DIAGRAM

 

 

Exhibit M - Page 1 of 1

 

EXHIBIT “N”

 

MONUMENT SIGN

 

 

Exhibit N - Page 1 of 1

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