Document:

Exhibit 10.34

 

GUARANTEE

This GUARANTEE is dated July 9, 2003 by
Schering-Plough Corporation, a New Jersey corporation (“Guarantor”) in favor of
Pharmacopeia, Inc., a Delaware corporation (“Beneficiary”).

WHEREAS, Schering Corporation, a New Jersey
corporation (“Schering”) and
Beneficiary have entered into a Collaboration and License Agreement (the “Schering  Agreement”) dated as of July
9, 2003;

WHEREAS, Schering-Plough Ltd., a Swiss
corporation (“Ltd.”) and Beneficiary
have entered into a Collaboration and License Agreement (the “Ltd.
Agreement”) dated as of July 9, 2003 (Schering and Ltd. are
collectively referred to as the “Subsidiaries”)
(the Schering Agreement and the Ltd. Agreement are collectively referred to as
the “Agreements”);

WHEREAS, Guarantor is the parent company of
the Subsidiaries; and

WHEREAS, to induce Beneficiary to enter into
the Agreements, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor has agreed to
guarantee the Guaranteed Obligations (as hereinafter defined) on the terms set
forth herein.

NOW THEREFORE, the parties hereto agree,
effective as of the Effective Date of the Agreements, as follows:

Section 1. Guarantee. Subject to the
terms and conditions set forth below, Guarantor hereby irrevocably and
unconditionally guarantees the performance of all obligations of the
Subsidiaries under the Agreements and promises to pay in full any amounts,
including any arbitration awards, which become due by either or both of the
Subsidiaries to Beneficiary under the Agreements, except to the extent
previously paid by the Subsidiaries (such obligations being herein collectively
called the “Guaranteed Obligations” or “Guaranteed Payments”). Guarantor’s
obligation to make Guaranteed Payments may be satisfied by direct payment of
the required amounts to Beneficiary or by causing a Subsidiary to pay such
amounts to Beneficiary.

1.1           Waiver of Certain
Rights. Guarantor hereby waives, to the fullest extent permitted by law,
notice of acceptance of this Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.

1.2           Continuing
Guarantee. The guarantee in this Section 1 is a continuing guarantee, and
shall apply to all Guaranteed Obligations whenever arising.

1.3           Adequate
Information. Guarantor acknowledges and confirms that Guarantor itself has
established its own adequate means of obtaining from its Subsidiaries on a
continuing basis all information desired by Guarantor concerning the financial
condition of the Subsidiaries and their performance under the Agreements and
that Guarantor will look to the Subsidiaries and not to Beneficiary in order for
Guarantor to keep adequately informed of changes in the Subsidiaries’ financial
condition or performance under the Agreements.

1.4           Proceeding
Directly Against Guarantor. This Guarantee is a guarantee of payment and
not of collection. Beneficiary may enforce this Guarantee directly against
Guarantor, and Guarantor waives any right or remedy to require that any action
be 

1

 

brought against the Subsidiaries or any other person or entity before
proceeding against Guarantor. All waivers herein contained shall be without
prejudice to the right of Beneficiary, at its option, to proceed against the
Subsidiaries, whether by separate action or by joinder. Guarantor agrees that
this Guarantee shall not be discharged except by payment of the Guarantee
Payments in full (to the extent not previously paid by the Subsidiaries) and by
complete performance of all Guaranteed Obligations under this Guarantee.

1.5           Independent
Obligations. Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Subsidiaries with respect to the
Agreements and that Guarantor shall be liable as principal and sole debtor
under this Guarantee to make Guarantee Payments in full pursuant to the terms
of this Guarantee.

1.6           Amendment of  Agreements
Not Require Guarantor Consent. Any amendment, modification or alteration
of, or waiver by the Subsidiaries with respect to the terms of the Agreements
shall be effective without requiring any consent on the part of the Guarantor.

Section 2.               Representations
and Warranties. Guarantor represents and warrants to Beneficiary that (a)
Guarantor is a corporation, duly organized, validly organized and in good
standing under the laws of the State of New Jersey, (b) Guarantor has all
requisite power and authority to enter into and perform this Guarantee and all
corporate action on the part of Guarantor necessary for the execution and
performance of this Guarantee has been taken, (c) this Guarantee is the legal
and binding obligation of Guarantor, enforceable in accordance with its terms,
except where such enforceability may be limited by bankruptcy, insolvency, or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, and (d) Guarantor’s execution, delivery and
performance of this Guarantee will not violate or conflict with any laws,
regulations or agreements binding upon Guarantor or to which Guarantor is
otherwise subject or is a party.

Section 3.               Miscellaneous.

3.1           Governing Law.
This Guarantee shall be governed by, and construed in accordance with, the laws
of the State of New Jersey.

3.2           Successors and
Assigns. This Guarantee may not be assigned or transferred by Guarantor
without the express written consent of Beneficiary. This Guarantee shall be
binding upon Guarantor, its permitted successors and assigns, and shall inure
to the benefit of and be enforceable by Beneficiary and its successors,
transferees and assigns.

3.3.          Attorneys’ Fees.
If Beneficiary commences any action or proceeding against Guarantor to enforce
this Guarantee, the prevailing party in such action or proceeding shall be
entitled to recover from the other party the reasonable attorneys’ fees and
other costs and expenses incurred by that prevailing party in connection with
such action or proceeding and in connection with enforcing any judgment, award
or order thereby obtained.

3.4           Miscellaneous.
This Guarantee, together with the Agreements, constitutes the entire agreement
of Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided 

2

 

by law or any other agreement, and this Guarantee shall be in addition to any
other guarantee of or collateral security provided by the Subsidiaries or any
other person or entity for any of the Guaranteed Obligations. The invalidity or
unenforceability of any one or more sections of this Guarantee shall not affect
the validity or enforceability of its remaining provisions. Captions are for
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guarantee shall be
equally applicable to the singular and plural forms of the terms defined.

3.5           Termination. This
Guarantee shall terminate automatically upon the termination of both the Ltd.
Agreement and the Schering Agreement.

IN WITNESS WHEREOF, the undersigned does
hereby execute this Guarantee as of the date first set above.

	
  “GUARANTOR”

  
	
   

  	
   

  
	
  By:

  	
  /s/ David A. Nichols

  
	
   

  	
   

  
	
  Name:

  	
  David A. Nichols

  
	
   

  	
   

  
	
  Title: 

  	
  Senior Vice President — Taxes

  

 

3442621

 

3Exhibit 10.35

 

LEASE AGREEMENT

 

 

BY AND BETWEEN:

 

 

Eastpark at 8A

 

“Landlord”

 

 

- and -

 

 

Pharmacopeia, Inc.

 

“Tenant”

 

 

PREMISES:                                  1002
Eastpark Boulevard Cranbury, NJ 08512

DATED:                           August
20, 2003

 

 

TABLE  OF  CONTENTS

 

	
  1.

  	
  LEASED
  PREMISES

  
	
  2.

  	
  TERM
  OF LEASE

  
	
  3.

  	
  CONSTRUCTION OF THE TENANT IMPROVEMENTS

  
	
  4.

  	
  RENT

  
	
  5.

  	
  PARKING AND USE OF EXTERIOR AREA

  
	
  6.

  	
  USE

  
	
  7.

  	
  REPAIRS AND MAINTENANCE

  
	
  8.

  	
  COMMON AREA EXPENSES, TAXES AND INSURANCE

  
	
  9.

  	
  SIGNS

  
	
  10.

  	
  ASSIGNMENT AND SUBLETTING

  
	
  11.

  	
  FIRE
  AND CASUALTY

  
	
  12.

  	
  COMPLIANCE
  WITH LAWS, RULES AND REGULATIONS

  
	
  13.

  	
  INSPECTION BY LANDLORD

  
	
  14.

  	
  DEFAULT
  BY TENANT

  
	
  15.

  	
  LIABILITY OF TENANT FOR DEFICIENCY

  
	
  16.

  	
  NOTICES

  
	
  17.

  	
  NON-WAIVER BY EITHER PARTY

  
	
  18.

  	
  RIGHT OF TENANT TO MAKE ALTERATIONS AND
  IMPROVEMENTS

  
	
  19.

  	
  NON-LIABILITY OF LANDLORD

  
	
  20.

  	
  RESERVATION OF EASEMENT

  
	
  21.

  	
  STATEMENT OF ACCEPTANCF

  
	
  22.

  	
  FORCE
  MAJEURE

  
	
  23.

  	
  STATEMENTS BY LANDLORD AND TENANT

  
	
  24.

  	
  CONDEMNATION

  
	
  25.

  	
  LANDLORDS REMEDIES

  
	
  26.

  	
  QUIET
  ENJOYMENT

  
	
  27.

  	
  SURRENDER OF PREMISES

  
	
  28.

  	
  INDEMNITY

  
	
  29.

  	
  BIND AND CONSTRUE CLAUSE

  
	
  30.

  	
  INCLUSIONS

  
	
  31.

  	
  DEFINITION OF TERM “LANDLORD”

  
	
  32.

  	
  COVENANTS OF FURTHER ASSURANCES

  
	
  33.

  	
  COVENANT AGAINST LIENS

  
	
  34.

  	
  SUBORDINATION

  
	
  35.

  	
  EXCULPATION OF LANDLORD

  
	
  36.

  	
  NET RENT

  
	
  37.

  	
  SECURITY

  
	
  38.

  	
  BROKERAGE

  
	
  39.

  	
  LATE
  CHARGES

  
	
  40.

  	
  PRESS
  RELEASES

  
	
  41.

  	
  WAIVER OF JURY TRIAL

  
	
  42.

  	
  LAWS OF NEW JERSEY

  
	
  43.

  	
  OPTION
  TO RENEW

  
	
  44.

  	
  RIGHT OF FIRST REFUSAL

  

 

2

 

	
  45.

  	
  CROSS
  DEFAULT

  

 

3

 

AGREEMENT,
made August 20,2003, between Eastpark at 8A, 1000 Eastpark Blvd., Cranbury, New
Jersey 08512, “Landlord”; and Pharmacopeia, Inc., 3000 Eastpark Boulevard,
Cranbury, NJ 08512, “Tenant”.

 

WITNESSETH

 

WHEREAS, the
Landlord intends to lease to the Tenant Suite #1002 with an address at 1002
Eastpark Boulevard, Cranbury, NJ 08512, in Building 1000 (“Building”) which
constitutes a portion of the office/industrial park known as Eastpark at 8A
(“Office Park); and

 

WHEREAS, the
parties hereto wish to mutually define their rights, duties and obligations in
connection with the Lease;

 

NOW THEREFORE,
in consideration of the promises set forth herein, the Landlord leases unto the
Tenant and the Tenant rents from the Landlord the leased premises described in
Paragraph 1, and the Landlord and Tenant do hereby mutually covenant and agree
as follows:

 

1.                                       LEASED PREMISES

 

The leased
premises shown on Exhibit “A” shall consist of 18,191 rentable square feet of
office and laboratory space (“Leased Premises”) as measured from outside of
exterior walls to center line of the common walls, together with all
improvements to be constructed thereon by the Landlord for the use of the
Tenant, and all easements, tenements, appurtenances, hereditaments, rights and
privileges appurtenant thereto, and any and all fixtures and equipment which
are to be installed in the Building by the Landlord for the use of the Tenant
in its occupancy of the Leased Premises. Tenant shall also have the right to
use all common areas of the Office Park in a similar manner as other Office
Park tenants.

 

2.                                       TERM OF LEASE

 

The term of the Lease shall be 12 years and shall be co-terminus with a
lease for Building #3, which is also to be occupied by Tenant. The rent shall
commence upon Substantial Completion (as defined hereafter). The 12 year term
shall commence on the first day of the month following the date on which
Substantial Completion is achieved for both Buildings 1 and 3, and shall expire
on the day before the 12th anniversary of the Commencement Date, it being the
intent of the parties that the leases for both Buildings shall expire on the
same date. The Commencement Date is projected to be January 15, 2004.

 

3.                                       CONSTRUCTION OF THE TENANT
IMPROVEMENTS

 

3.1                                 The
Leased Premises consists of two existing, contiguous spaces which were
previously leased to other tenants. Tenant is taking the Leased Premises in its
“as is” condition, subject to modifications as shown on the Plans (as hereafter
defined) to be prepared by Tenant (“Tenant Improvements”). The Landlord shall
provide all necessary labor and materials and perform all the work required to
complete the Tenant Improvements in order to ready the same for Tenant’s
occupancy. Tenant’s designated representative for all work pertaining to the
Tenant Improvements shall be John Harrison

 

4

 

or such other person as is designated in writing by Tenant
(“Representative”). The Landlord shall supervise and direct the work on the
Tenant Improvements using Landlord’s best skill and attention, and Landlord
shall be solely responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating all portions of the work on the
Tenant Improvements. Landlord warrants to the Tenant that all materials and
equipment incorporated in the Tenant Improvements will be new unless otherwise
specified, and that all work on the Tenant Improvements will be of good
quality, free from known faults and defects, and in substantial conformity with
the Plans.

 

3.2                                 (a)                                  Landlord
shall complete the Tenant Improvements in a good and workmanlike manner and in
substantial accordance with plans and specifications (“Plans”) to be prepared
by Tenant’s architect, CUH2A. The Plans shall be provided to Landlord on or
before September 1, 2003 and shall be in sufficient detail to permit Landlord
to apply for a building permit for the Tenant Improvements (which Landlord
shall promptly do), and to prepare a construction budget for the construction
of the Tenant Improvements (“Construction Budget”). In the event Tenant does
not deliver the Plans to Landlord by the date set forth above, such failure
shall not delay the date for commencement of the rent, which shall be presumed
to be the projected Commencement Date set forth in paragraph 2. The
Construction Budget shall set forth the lump sum amount payable by Tenant to
Landlord for the construction of the Tenant Improvements, which amount shall
include Landlord’s standard mark-up for general conditions, overhead and
profit, which total in the aggregate 20%. The only exception to the lump sum
amount shall be the actual fees charged by the Township of South Brunswick for
construction permits in connection with the Tenant Improvements, which sums
shall be paid by Tenant as set forth hereafter. Landlord shall submit the
Construction Budget to Tenant for its approval. Tenant shall give written
notice to Landlord within five business days of receipt, as to whether or not
the Construction Budget is acceptable. If Tenant does not accept the
Construction Budget during such five business day period, then the parties
agree to negotiate in good faith to reach an agreement on the Construction
Budget. Landlord shall not be obligated to order any equipment or commence work
until Tenant has approved the Construction Budget. A complete set of the agreed
upon Plans, and the agreed upon Construction Budget, shall be initialed by and
distributed to Landlord and Tenant.

 

(b)                                 Neither
the Construction Budget nor the Plans shall be changed or altered in any way
except by change order approved in writing by Landlord and Tenant (“Change
Order”). All Change Orders shall be valid and binding upon Landlord and Tenant only
if authorized by written Change Order signed by Landlord and Tenant’s
Representative prior to commencement of the work on the Tenant Improvements
reflected thereby. The cost or credit to the Tenant due to any Change Order
shall be determined per the terms of such Change Order. In the event the Change
Order increases the cost set forth in the Construction Budget, then Landlord
shall submit an invoice to Tenant and Tenant shall pay the invoice upon
completion of work or upon the ordering of any equipment, whichever is
applicable. The Landlord shall have the right to substitute for the materials
and equipment required by the Plans, materials and equipment of equal quality
and

 

5

 

standard,
provided said substitutions conform with applicable building codes and are the
subject of a Change Order. Each and every Change Order shall state whether the
change will entail a delay in the date of Substantial Completion. Any Change
Order requested by Tenant which results in a delay to the date of Substantial
Completion shall not delay the date for the commencement of the payment of
rent.

 

3.3                                 (a)                                  The
Landlord may secure and advance payment for the construction permits and for
all other permits and governmental fees, licenses and inspections necessary for
the proper execution and completion of the Tenant Improvements. Tenant shall
pay such amounts to Landlord not later than 10 business days after receipt of
an invoice therefore Landlord shall not, however, be responsible for securing
any environmental or operating permits or certifications which are required in
order for Tenant to actually conduct its business.

 

(b)                                 Tenant
shall be responsible for providing Landlord with, and bearing the cost of
sufficient copies of the Plans, and sufficient copies of any revisions made to
the Plans, in order to obtain the permits and efficiently manage the
construction of the Tenant Improvements. In the event any Change Orders are
required during construction, Tenant shall be responsible for all costs related
to the preparation and reproduction of plans therefore, unless the Change Order
was solely initiated by Landlord, in which case Landlord shall be responsible
for such costs. After construction is complete, Tenant shall be responsible for
all costs related to the reproduction of “as built” Plans. In all instances
where Plans are required, Tenant shall provide Landlord with a reproducible
set. Landlord will also be provided with a current plot file containing the
Plans at no cost to Landlord. Tenant agrees to have its Architect execute
Exhibit “A” affirming Landlord’s right to the Plans.

 

3.4                                 (a)                                  Tenant
shall pay Landlord directly for the construction costs of Tenant Improvements
in accordance with the schedule attached hereto as Exhibit “B”. The only
exception to Tenant’s responsibility to pay for all construction costs shall be
for the work necessary to upgrade the existing HVAC reheat system currently in
the space previously occupied by Biomira, Inc. (currently known as 1002
Eastpark Boulevard), which cost is estimated to be $150,000 and will he divided
equally between the parties. In the event Tenant fails to pay to Landlord any
sum set forth on Exhibit “B” when it is due, Landlord shall not be obligated to
commence or continue work on the Tenant Improvements. Such failure to pay shall
constitute a default under this Lease, but shall not delay the Commencement
Date of this Lease, which shall be presumed to be the projected Commencement
Date set forth in paragraph 2; or any of Tenant’s obligations hereunder
including, without limitation, Tenant’s obligation to pay all Rent. In the
event that Tenant fails to pay to Landlord, upon Substantial Completion of the
Tenant Improvements, a sum equal to the remaining balance then due, such
failure shall constitute a default under this Lease; and Tenant shall not be
permitted to occupy the Leased Premises; and Tenant shall commence payment of
all Rent; and Landlord shall be entitled to all rights and remedies available
hereunder, at law or in equity, which rights shall be cumulative. All sums so
owing to Landlord shall constitute Additional Rent and shall be subject to

 

6

 

the imposition of late charges as provided in this Lease.

 

(b)                                 Apart
from extensions of time for delays and extensions of the date for the payment
of rent, no payment or allowance of any kind shall be claimed by Tenant, or
made to the Landlord as compensation for damages on account of any delay from
any cause in the completion of the Tenant Improvements, whether such delay be
avoidable or unavoidable, anything in this Agreement inconsistent herewith or
to the contrary notwithstanding.

 

3.5                                 Tenant
shall be responsible for the design and installation of its own phone, data and
communication systems which systems shall be installed in a manner not to
interfere with Landlord’s construction efforts. During construction of Tenant
Improvements, a representative of Tenant shall inspect the site no less
frequently than once a week and verify and agree that the work in progress has
been completed in a manner acceptable to Tenant.

 

3.6                                 The
Tenant Improvements shall be commenced upon issuance of the building permit by
governmental entities having jurisdiction therefor and, subject to authorized
adjustments, Substantial Completion is estimated to be achieved on or about
January 15, 2004. As used herein
the term “Substantial Completion” shall mean that the Leased Premises have been
built and completed in substantial conformity with the Plans, and a temporary
or permanent certificate of occupancy or a temporary or permanent certificate
of acceptance (“CO/CA”) has been issued permitting Tenant to use and occupy the
Leased Premises, even though minor details, adjustments or punch list items
which shall not materially impair Tenant’s use and enjoyment of the Leased
Premises may not have been finally completed, but which work Landlord agrees
shall be diligently pursued to final completion. Tenant shall allow Landlord
and its contractors to enter the Leased Premises during normal working hours
after issuance of the CO/CA to complete remaining minor work or punch list
items, provided Landlord gives advance notice and makes reasonable efforts not
to interfere with Tenant’s operations. It is agreed that for the purpose of
this Lease, wherever and whenever the term Substantial Completion is used, it
shall not include items of maintenance, service, punch list, or guarantee. If
the date of Substantial Completion occurs on a day other than the first day of
a month, rent from such day until the first day of the following month shall be
prorated (at a rate of 1/30th of the monthly rent per day). During said period
of partial monthly occupancy, all other terms and conditions of this Lease
shall apply.

 

4.                                       RENT

 

4.1                                 Tenant
shall pay, as base rent (“Base Rent”) for the Leased Premises, as follows:

 

(a)                                  During
the first 4 years of the term, an estimated annual base rent per square foot of
$30.35, for an aggregate annual base rent of $552,096.85 (“Initial Base Rent”),
payable monthly in the sum of $46,008.07.

 

(b)                                 During
the second 4 years of the term, the Base Rent shall be increased by adding to
the Initial Base Rent the increase in the Consumer Price Index (“CPI”) as
follows, and such sum shall be the Base Rent for the second 4 years of the term
(the “Adjusted Base Rent”):

 

The “All
Items” Index Figures for the New York-Northeastern New Jersey

 

7

 

average of the
“Consumer Price Index for All Urban Consumers” (revised CPI-U) (1982-1984 equal
to 100) published by the Bureau of Labor Statistics of the U.S. Department of
Labor (“Index”) for the month 2 months prior to the date of Substantial
Completion shall be compared with the same index for the month 2 months prior
to the beginning month of the second 4 years of the Lease term. If there is an
increase in the Index that percentage increase shall be used to determine the
rent increase over the original Base Rent, as shown in the following example:

 

If the Index
figure for the month 2 months prior to the date of Substantial Completion is
100 (the denominator) and the Index figure for the month 2 months prior to the
beginning of the second 4 years of the lease term is 110, the increase in the
Index figures will produce an increase of 10%.

 

	
   

  	
  (110-100)

  	
   = 10%

  
	
   

  	
  100

  	
   

  

 

Applying the
formula, 10% of $552,096.85 is equal to $55,209.69. Adding that amount to the
original Base Rent produces an annual rent for the second 4 years of
$607,306.54 payable in equal monthly installments of $50,608.88.

 

However, in no
event shall the increase in rent be more than 12%.

 

(1)                                  In
the event that the Index figure is discontinued the parties shall agree on an
equivalent and substituted Cost of Living Index to be applied in the same
manner. In the event the parties cannot mutually agree as to a substituted
Index, then the issue shall be submitted for arbitration to the American
Arbitration Association to take place in South Brunswick or any of its
contiguous municipalities, with the cost thereof divided between the parties.

 

(2)                                  If
the base year (1982-84 equal to 100) herein above referred to with respect to
the “Index” shall be changed after the execution of the Lease, appropriate
adjustments based on such new Index shall be made so as to have a proper
application of the Cost of Living formula.

 

(c)                                  During
the third 4 years of the term, the Base Rent shall increase according to the
same CPI formula set forth above using the Adjusted Base Rent, but not more
than 12 % over the Adjusted Base Rent for the second 4 years.

 

4.2                                 In
addition to the Base Rent, Tenant shall pay as additional rent (“Additional
Rent”) all real estate taxes for the Property, plus its proportionate share of
the repairs, maintenance, insurance and any other charges allocated amongst
tenants, as more specifically described in paragraph 8 (“Common Area
Expenses”), based on the relationship between the rentable square footage
leased to Tenant and the rentable square footage of building construction
completed and occupied in the Office Park. Tenant’s Common Area Expenses shall
be adjusted as of each January 1st during the term based on the increase in
Common Area Expenses set forth in paragraph 8.

 

8

 

4.3                                 The
Base Rent and Additional Rent shall be referred to hereafter as “Rent”.

 

4.4                                 Tenant
covenants to pay the Rent in lawful money of the United States which shall be
legal tender for the payment of all debts, public and private, at the time of
payment. Such Rent shall be paid to Landlord at its office address hereinabove
set forth, or at such other place as Landlord may, from time to time, designate
by notice to Tenant.

 

4.5                                 Rental
payments shall be payable in advance in equal monthly installments on the first
day of each calendar month. The Rent shall be payable by Tenant without any
set-off or deduction of any kind or nature whatsoever and without notice or
demand. The sum of all increases required to be paid as Additional Rent or Base
Rent in accordance with this Lease, shall be paid to Landlord within 10 days
following the giving of notice hereof by Landlord of such increases.

 

5.                                       PARKING AND USE OF EXTERIOR AREA

 

The Tenant shall have the right to use parking spaces on a
non-exclusive basis in common with other tenants of the Building. Landlord
reserves the right to allocate specific parking spaces if it chooses. The
Landlord and Tenant mutually agree that they will not block, hinder or
otherwise obstruct the access driveways and parking areas so as to impede the
free flow of vehicular traffic in the Office Park. In connection with the use
of the loading platforms, if any, Tenant agrees that it will not use the same
so as to unreasonably interfere with the use of the access driveways and
parking areas. Tenant shall not store trailers or other vehicles on any portion
of the access driveways or parking areas, and may not utilize any portion of
the land or Building outside of the Leased Premises for any purpose unless
consented to in advance by Landlord.

 

6.                                       USE

 

The Tenant covenants and agrees to use and occupy the Leased Premises
only as an office and laboratory, which use is expressly subject to all
applicable zoning ordinances, rules and regulations of any governmental
instrumentalities, boards or bureaus having jurisdiction thereof. Tenant’s use
of the Leased Premises shall not interfere with the peaceable and quiet use and
enjoyment by other tenants at their respective leased premises located at the
Building or in the Office Park, nor shall Tenant’s activities cause Landlord to
be in default under its leases with such other tenants.

 

7.                                       REPAIRS AND MAINTENANCE

 

7.1                                 Tenant
shall generally maintain and repair the Leased Premises, in a good and
workmanlike manner, and shall, at the expiration of the term, deliver the
Leased Premises in good order and condition, damages by fire or casualty, the
elements and ordinary wear and tear excepted. Tenant covenants and agrees that
it shall not cause or permit any waste, damage or disfigurement to the Leased
Premises, or any overloading of the floors. Tenant shall maintain and make all
repairs to the floor surface, plumbing and electrical systems including all
ballasts and fluorescent fixtures located within the Leased Premises, and the
entire HVAC system. Landlord shall be responsible for repairs necessary to the
roof, exterior and load-bearing walls, and electric and plumbing systems to the
point where they enter the Leased Premises, unless repair is necessitated by
any act of Tenant, or its agents, employees or contractors.

 

7.2                                 The
Tenant shall, at its own cost and expense, pay all utility meter and service
charges, including gas, water and electric servicing the Leased Premises.
Landlord shall

 

9

 

have the
option to install, at its own cost, a separate water meter and invoice Tenant
directly for its water usage. The Tenant agrees to maintain all leased areas at
a minimum temperature of 45 degrees, excluding cold rooms on other rooms
specifically designed for a lower temperature, to prevent the freezing of
domestic water and sprinkler pipes. Tenant shall not store any items outside
the Leased Premises, and shall deliver its garbage and recyclables to the
central receiving area on the lot. Tenant shall dispose of all
hazardous/medical waste with an approved hauler at its own cost.

 

7.3                                 Landlord
does not warrant that any services Landlord or any public utilities supply will
not be interrupted. Services maybe interrupted because of accidents, repairs,
alterations, improvements or any other reason beyond the reasonable control of
Landlord, not including the gross negligence of Landlord or its agents.

 

8.                                       COMMON AREA EXPENSES. TAXES AND
INSURANCE

 

8.1                                 The
Tenant shall pay to the Landlord, monthly, as Additional Rent its Proportionate
Share of the following items all of which shall be known as Common Area
Expenses:

 

(a)                                  The
costs incurred by the Landlord for the operation, maintenance or repair of the
following items in the Office Park, (“Operating Costs”):

 

(1)                                 lawns
and landscaping;

 

(2)                                  standard
water usage and standby sprinkler charges;

 

(3)                                  exterior
lighting;

 

(4)                                  exterior
sewer lines;

 

(5)                                  exterior
utility lines;

 

(6)                                  repair
and maintenance of any signs serving the Office Park;

 

(7)                                  snow
removal;

 

(8)                                  standard
garbage disposal and recycling;

 

(9)                                  general
ground maintenance;

 

(10)                            parking
lot, driveways and walkways;

 

(11)                            maintenance
contracts for the roof;

 

(12)                            pest
control;

 

(13)                            central
station monitoring for fire sprinkler system; and

 

(14)                            other
ordinary maintenance expenses normally incurred by Landlord relating to the
Building and common areas of the Office Park.

 

Notwithstanding
the above, the following items shall be excluded from Common Area Expenses:

 

(a)                                  Cost
of decorating, redecorating, cleaning or other services not provided on a
regular basis to the tenants of the Office Park;

 

(b)                                 Wages,
salaries, fees and fringe benefits paid to

 

10

 

administrative
or executive personnel or officers or partners of Landlord, unless employed at
competitive rates as independent contractors at the building or Office Park

 

(c)                                  All
cost relating to activities for the solicitation, negotiation and execution of
leases of space in the Office Park;

 

(d)                                 Cost
of any repair made by Landlord because of the total or partial destruction of
the building or the condemnation of a portion of the building;

 

(e)                                  Any
insurance premium for which Landlord is to be reimbursed by Tenant, pursuant to
this Lease, or by any other tenant of the Office Park;

 

(f)                                    Depreciation,
interest or rents paid or incurred by Landlord;

 

(g)                                 Any
charge to Landlord for income taxes, franchise taxes or similar taxes;

 

(h)                                 Collection
costs for bad debt expenses not related to Tenant;

 

(i)                                     Cost
of tenant improvements;

 

(j)                                     Legal,
accounting, bank or other fees incurred in connection with any equity or debt
financing or sale of the building or Office Park;

 

(k)                                  Costs
of specialized services provided to other tenants but not provided to tenants
generally;

 

(l)                                     Capital
expenditures;

 

(m)                               Cost
to comply with ADA related to the interior of the individual buildings, but not
exterior doors or the Office Park;

 

(n)                                 Costs
to cure violations of law or ordinances;

 

(o)                                 Electric
for non-public areas.

 

(b)                                 The
cost of the annual insurance premiums charged to the Landlord for insurance
coverage which insure the buildings in the Office Park. The insurance shall be
for the full replacement value of all insurable improvements with any customary
extensions of coverage including, but not limited to, vandalism, malicious
mischief, sprinkler damage and comprehensive liability, and insurance for one
years rent. The Landlord shall maintain said insurance in effect at all times
hereunder. Any increase in the insurance premiums due to a change in rating of
the Building which is solely attributable to Tenants use, or due to special
Tenant equipment, shall be paid entirely by the Tenant. Tenant expressly
acknowledges that Landlord shall not maintain insurance on Tenants furniture,
fixtures, machinery, inventory, equipment or other personal property; and

 

(c)                                  The
real estate and personal property taxes assessed against the Office Park for
land, building and improvements, along with any levy for the installation

 

11

 

of local
improvements affecting the Office Park assessed by any governmental body having
jurisdiction thereof. Tenant shall he entitled to Tenant’s Proportionate Share
of any refund obtained by Landlord with respect to any taxes. The real estate
tax obligation of the Tenant shall include any tax or imposition for parking
lot usage which may be levied by any governmental body having jurisdiction
thereof. In addition to its Proportionate Share of the above items, Tenant
shall pay directly all real estate taxes assessed by the municipality on its
Tenant Improvements. Anything in this Section 8.1(b) or elsewhere in this Lease
to the contrary notwithstanding, Tenant shall not be obligated to pay any part
of (l) any taxes on the income of the Landlord or the holder of an underlying
mortgage and any taxes on the income of the lessor under any underlying lease,
(2) any corporation, unincorporated business or franchise taxes, (3) any
estate, gift, succession or inheritance taxes, (4) any capital gains, mortgage
recording or transfer taxes, (5) any taxes or assessments attributable to any
sign attached to, or located on, the Building or the land or (6) any similar
taxes imposed on the Landlord, the holder of any underlying mortgage or the
lessor under any underlying lease; and

 

(d)                                 A
management fee of 3% of the Tenants Base Rent.

 

8.2                                 Within
90 days of the expiration of the first calendar year of the Term, the Landlord
shall furnish to Tenant a detailed breakdown of the actual Common Area
Expenses. Tenant shall have the right, within 30 days of receipt of the
breakdown, and during normal business hours, to examine Landlord’s books and
records with respect to the Common Area Expenses. In the event Tenant’s
Proportionate Share shall be greater than the aggregate paid by the Tenant
during the prior period, Tenant shall pay any difference, in one lump sum
within 30 days after demand. In the event Tenant shall have overpaid its
Proportionate Share, any such overage shall be applied to the Base Rent and
Additional Rent prospectively due under the Lease. This procedure shall be followed
during each year of the lease term, and at the expiration of the Lease, any
overage or underage shall be credited or paid after computation by the
Landlord, which obligation of Landlord and Tenant shall survive the expiration
of the lease term.

 

8.3                                 Tenant’s
Share of Common Area Expenses for any calendar year, part of which falls within
the term of this Lease and part of which does not, shall be appropriately
prorated.

 

8.4                                 If
at any time during the term of this Lease the method or scope of taxation prevailing
at the commencement of the lease term shall be altered, Tenant’s Proportionate
Share of such substituted tax or imposition shall be payable and discharged by
the Tenant in the manner required pursuant to the law which shall authorize
such change.

 

8.5                                 The
Tenant covenants and agrees that it will, at its sole cost and expense, carry
liability insurance covering the Leased Premises in the minimum amount of
$1,000,000.00 per accident for 1 person, $3,000,000.00 per accident for 2 or
more persons, and a minimum amount of $300,000.00 for property damage. Tenant
shall at all times, carry sufficient insurance to avoid any coinsurance
penalties on Tenant’s furniture, furnishings, fixtures, machinery, equipment
and installations as well as on any alterations or improvements made to the
Leased Premises by Tenant subsequent to the

 

12

 

Commencement
Date. Such coverage is to include all additions and alterations contemplated
hereunder, and shall cover the value of equipment and supplies awaiting
installation. The Tenant shall add the Landlord as an additional insured on
such policy and will furnish Landlord with a certificate of said liability
insurance prior to the Commencement Date and annually thereafter. The certificate
shall contain a clause that the policy will not be canceled except on 10 days
written notice to the Landlord.

 

8.6                                 The
parties covenant and agree that the insurance policies required to be furnished
in accordance with the terms and conditions of this Lease, or in connection
with insurance policies which they obtain insuring such insurable interest as
Landlord or Tenant may have in its own properties, whether personal or real,
shall expressly waive any right of subrogation on the part of the insurer
against the Landlord or Tenant. Landlord and Tenant each waives all right of
recovery against the other, its agents or employees for any loss, damage or
injury of any nature whatsoever to property or person for which the waiving
party is required by this Lease to carry insurance.

 

9.                                       SIGNS

 

Landlord will provide a sign monument listing all of the tenants in the
Building. At its sole expense the Tenant shall have the right to install on the
interior doors at the Leased Premises, only such signs as are required by
Tenant for the purpose of identifying the Tenant.

 

10.                                 ASSIGNMENT AND SUBLETTING

 

10.1                           The
Tenant may not assign or sublet the Leased Premises without Landlord’s consent,
which shall not be unreasonably withheld. Tenant shall advise the Landlord in writing,
by certified mail, return receipt requested of its desire to assign or sublease
and Landlord shall have 60 days from receipt of such notice to notify Tenant
whether it rejects or consents to the assignment or sublease. Landlord shall
also have the option to elect to re-capture the Leased Premises and terminate
the Lease, if and only if Tenant desires to sublease all of the Leased Premises
for the entire term. If Landlord elects to recapture the Leased Premises,
Tenant shall surrender the Leased Premises no later than 90 days after
Landlord’s written notice of its election to recapture.

 

10.2                           The
Landlord’s consent shall not be required and the terms and conditions of
Paragraph 10.1 shall not apply as to Landlord’s right to recapture if the
Tenant assigns or subleases the Leased Premises to a parent, subsidiary,
affiliate or a company into which Tenant is merged or with which Tenant is
consolidated, or to the purchaser of all or substantially all of the assets of
Tenant.

 

10.3                           In
connection with any permitted assignment or subletting, (i) the Tenant shall
pay monthly to the Landlord 50% of any increment in rent (net of any reasonable
broker’s commissions, attorney’s fees and marketing costs incurred by Tenant in
connection therewith) received by Tenant per square foot over the Base Rent
then in effect during the year of the assignment or subletting, which payment
shall be made monthly together with the required rent hereunder; and (ii) if
Tenant receives any consideration or value for such assignment or subletting,
Landlord shall be paid 50% of any
such consideration or value within 10 days after receipt of the same by Tenant.
As a condition hereunder, Tenant covenants with Landlord that it will furnish
to Landlord a copy of all pertinent documents with respect to any such
assignment or subletting so as to

 

13

 

establish
Tenant’s obligation to Landlord hereunder.

 

10.4                           In the
event of any assignment or subletting permitted by the Landlord, the Tenant
shall remain and be directly and primarily responsible for payment and
performance of the within Lease obligations, and the Landlord reserves the
right, at all times, to require and demand that the Tenant pay and perform the
terms and conditions of this Lease. In the case of a complete recapture, Tenant
shall be released from all further liability with respect to the recaptured
space. No such assignment or subletting shall be made to any tenant who shall
occupy the Leased Premises for any use other than that which is permitted to
the Tenant, or which would in any way violate applicable laws, ordinances or
rules and regulations of governmental boards and bodies having jurisdiction.

 

11.                                 FIRE AND CASUALTY

 

11.1                           In case
of any damage to or destruction of any portion of the building of which the
Leased Premises is a part by fire or other casualty occurring during the term
of this Lease (or previous thereto), which shall render at least 1/3 of the
floor area of the Leased Premises or the building untenantable or unfit for
occupancy, which damage cannot be repaired within 180 days from the happening
of such casualty, using reasonable diligence (“Total Destruction”) then the
term hereby created shall, at the option of the Landlord or Tenant, upon
written notice to the Tenant or Landlord, as the case may be, within 15 days of
such fire or casualty, cease and become null and void from the date of such
Total Destruction. In such event the Tenant shall immediately surrender the
Leased Premises to the Landlord and this Lease shall terminate. The Tenant
shall only pay rent to the time of such Total Destruction. However, in the
event of Total Destruction if the Landlord shall elect not to cancel this Lease
within the 15 day period the Landlord shall repair and restore the same to substantially
the same condition as it was prior to the damage or destruction, with
reasonable speed and dispatch. The rent shall not be accrued after said damage
or while the repairs and restorations are being made, but shall recommence
immediately after the premises are Substantially Complete as defined in
paragraph 3.6. In any case where Landlord must restore, consideration shall be
given for delays under the Force Majeure paragraph in this Lease. Whether or
not this Lease has been terminated as a result of a casualty, in every
instance, all insurance proceeds payable as a result of damage or destruction
to the Building shall be paid to Landlord as its sole and exclusive property.

 

11.2                           In the
event of any other casualty which shall not be tantamount to Total Destruction
the Landlord shall repair and restore the Building and the Leased Premises to
substantially the same condition as they were prior to the damage or
destruction, with reasonable speed and dispatch. The rent shall abate or shall
be equitably apportioned as to any portion of the Leased Premises which shall
be unfit for occupancy by the Tenant, or which cannot be used by the Tenant to
conduct its business. The rent shall recommence immediately after the Leased
Premises are Substantially Complete as defined in paragraph 3.6.

 

11.3                           In the
event of any casualty caused by an event which is not covered by Landlord’s
insurance policy, the Landlord may elect to treat the casualty as though it had
insurance or it may terminate the Lease. If it treats the casualty as though it
had insurance then the provisions of this paragraph shall apply. The Landlord
shall serve a written

 

14

 

notice upon
the Tenant within 15 days of the casualty specifying the election which it
chooses to make.

 

11.4                           In the
event the Landlord rebuilds, the Tenant agrees, at its cost and expense, to
forthwith remove any and all of its equipment, fixtures, stock and personal
property in order to permit Landlord to expedite the construction. The Tenant
shall assume at its sole risk the responsibility for damage to or security of
such fixtures and equipment in the event that any portion of the building area
has been damaged and is not secure.

 

12.                                 COMPLIANCE WITH LAWS, RULES AND REGULATIONS

 

12.1                           (a)                                  The
Tenant agrees that upon acceptance and occupancy of the Leased Premises, it
will, at its own cost and expense, comply with all statutes, ordinances, rules,
orders, regulations and requirements of the Federal, State and Municipal
governments arising from the operations of Tenant at the Leased Premises. The
Tenant also agrees that it will not commit any nuisance or excessive noise, and
will dispose of all garbage and waste in connection with its operations so as
to avoid unreasonable emissions of dirt, fumes, odors or debris.

 

(b)                                 The
Tenant agrees, at its own cost and expense, to comply with such regulations or
requests as may be required by the fire or liability insurance carriers
providing insurance for the Leased Premises, and the Board of Fire Underwriters,
in connection with Tenant’s use and occupancy of the Leased Premises.

 

12.2                           In case
the Tenant shall fail to comply with all material provisions of the aforesaid
statutes, ordinances, rules, orders, regulations and requirements then the
Landlord may, after 10 days’ notice (except for emergency repairs, which may be
made immediately), enter the Leased Premises and take any reasonable actions to
comply with them, at the cost and expense of the Tenant, unless the Tenant is
diligently pursuing the correction of the problem. The cost thereof shall be
added to the next month’s rent and shall be due and payable as such, or the
Landlord may deduct the same from the balance of any sum remaining in the
Landlord’s hands. This provision is in addition to the right of the Landlord to
terminate this Lease under the provisions of paragraph 14.2. However, in the
event that all necessary repairs are made by Tenant, the initial failure to
comply with the aforesaid laws and regulations shall not constitute an event of
default.

 

12.3                           Tenant
expressly covenants and agrees to indemnify, defend and save the Landlord
harmless against any claim, damage, liability, cost, penalties, or fines which
the Landlord may suffer as a result of air, ground or water pollution caused by
the Tenant in its use of the Leased Premises. The Tenant covenants and agrees
to notify the Landlord immediately of any claim or notice served upon it with
respect to any claim that the Tenant is causing air, ground or water pollution;
and the Tenant shall take immediate steps to halt, remedy or cure any pollution
of air, ground or water caused by the Tenant by its use of the Leased Premises.

 

12.4                           Tenant
expressly covenants and agrees to fully comply with the provisions of the New
Jersey Industrial Site Recovery Act (N.J.S.A. I3:lK-6, et seq.) “ISRA”, and its
regulations, prior to the termination of the Lease or at any time that any
action of the Tenant triggers the applicability of ISRA. In particular, the
Tenant agrees that it shall

 

15

 

comply with
the provisions of ISRA in the event of any “closing, terminating or
transferring” of Tenant’s operations, as defined by and in accordance with the
regulations. In the event evidence of such compliance is not delivered to the
Landlord prior to surrender of the Leased Premises by the Tenant to the
Landlord, it is understood and agreed that the Tenant shall be liable to pay to
the Landlord an amount equal to two times the Base Rent then in effect,
together with all applicable Additional Rent from the date of such surrender
until such time as evidence of compliance with ISRA has been delivered to the
Landlord, and together with any costs and expenses incurred by Landlord in
enforcing Tenant’s obligations under this paragraph. Evidence of compliance, as
used herein, shall mean a “letter of non-applicability” issued by the New
Jersey Department of Environmental Protection (“NJDEP”), an approved “negative
declaration”  or a “remediation
action plan” which has been fully implemented and approved by NJDEP, or other
equivalent document as may then be prescribed by applicable regulations.
Evidence of compliance shall be delivered to the Landlord, together with copies
of all submissions made to the NJDEP, including all environmental reports, test
results and other supporting documentation. In addition to the above, Tenant
agrees that it shall cooperate with Landlord in the event ISRA is applicable to
any portion of the property of which the Leased Premises are a part. In such case,
Tenant agrees that it shall fully cooperate with Landlord in connection with
any information or documentation which may be requested by the NJDEP. In the
event that any remediation of the Property is required in connection with the
conduct by Tenant of its business at the Leased Premises, Tenant expressly
covenants and agrees that it shall be responsible for that portion of the
remediation which is attributable to the Tenant’s operation. Tenant hereby
represents and warrants that its Standard Industrial Classification No. is
8731, and that Tenant shall not generate, manufacture, refine, transport,
treat, store, handle or dispose of “hazardous substances” as the same are
defined under ISRA and the regulations promulgated pursuant thereto, except in
strict compliance with all governmental rules, regulations and procedures.
Tenant hereby agrees that it shall promptly inform Landlord of any change in
its SIC number and obtain Landlord’s consent for any change in the nature of
the business to be conducted in the Leased Premises. The within covenants shall
survive the expiration or earlier termination of the lease term.

 

13.                                 INSPECTION BY LANDLORD

 

13.1                           The
Tenant agrees that the Landlord shall have the right to enter into the Leased
Premises at all reasonable hours for the purpose of examining the same upon
reasonable advance notice of not less than 24 hours (except in the event of
emergency), or to make such repairs as are necessary. Any repair shall not
unduly interfere with Tenant’s use of the Leased Premises and Landlord agrees
to comply with Tenant’s reasonable requirements with regard to access to any
sensitive areas.

 

14.                                 DEFAULT BY TENANT

 

14.1                           Each of
the following shall be deemed a default by Tenant and a breach of this Lease:

 

(a)                                  (1)                                  filing
of a petition by the Tenant for adjudication as a bankrupt, or for
reorganization, or for an arrangement under any federal or state statute,
except in a Chapter 11 Bankruptcy where the rent and Additional Rent

 

16

 

stipulated
herein is being paid and the terms of the Lease are being complied with;

 

(2)                                  dissolution
or liquidation of the Tenant;

 

(3)                                  appointment
of a permanent receiver or a permanent trustee of all or substantially all of
the property of the Tenant, if such appointment shall not be vacated within 60
days, provided the rent and Additional Rent stipulated herein is being paid and
the terms of the Lease are being complied with, during said 60 day period;

 

(4)                                  taking
possession of the property of the Tenant by a governmental officer or agency
pursuant to statutory authority for dissolution, rehabilitation, reorganization
or liquidation of the Tenant if such taking of possession shall not be vacated
within 60 days, provided the rent and Additional Rent stipulated herein is
being paid and the terms of the Lease are being complied with, during said 60
day period;

 

(5)                                  making
by the Tenant of an assignment for the benefit of creditors;

 

(6)                                  abandonment,
desertion or vacation of the Leased Premises by the Tenant; and

 

(7)                                  failure
of the Tenant to move into or take possession of the Leased Premises within 15
days of the Commencement Date.

 

(b)                                 Default
in the payment of the rent or Additional Rent herein reserved or any part
thereof, which continues for 10 days.

 

(c)                                  A
default in the performance of any other covenant or condition which this Lease
requires the Tenant to perform, for a period of 15 days after notice.  However, no default on the part of Tenant
shall be deemed to exist if it diligently commences efforts to rectify same and
Landlord is indemnified against loss or liability arising from the default.

 

14.2                           In the
event of any default set forth above and the lapse of any applicable grace
period, Landlord may serve written notice upon the Tenant electing to terminate
this Lease upon a specified date not less than 10 days after the date of
serving such notice and this Lease shall then expire on the date so specified
as if that date had been originally fixed as the expiration date of the term
herein granted.

 

14.3                           In case
this Lease shall be terminated due to Tenant’s default as set forth above,
Landlord or its agents may, immediately or any time thereafter, re-enter and
resume possession of the Leased Premises or such part thereof, and remove all
persons and property therefrom, either by summary proceedings or a suitable
action or proceeding at law, without being liable for any damages therefor. No
re-entry by Landlord shall be deemed an acceptance of a surrender of this
Lease. However, if the Tenant is in default and moves out, or is dispossessed,
and fails to remove any property, machinery, equipment and fixtures or other
property within 10 days of the date Landlord sends a written notice to the last
known address of the Tenant, then the property, machinery, equipment and
fixtures or other property left at the Leased Premises shall, at the option of
the Landlord, be conclusively presumed to be abandoned and maybe disposed of by
the

 

17

 

Landlord
without accounting to Tenant for any of the proceeds, or the Landlord may
remove such property and charge the reasonable cost and expense of removal and
storage to the Tenant before disposing of such property. The Tenant shall be
liable for any damage which it causes in the removal of said property from the
Leased Premises.

 

14.4                           In case
this Lease shall be terminated, due to Tenant’s default as set forth above
Landlord may relet the whole or any portion of the Leased Premises for any
period equal to or greater or less than the remainder of the then current term,
for any sum which it may deem reasonable, to any tenant which it may deem
suitable and satisfactory, and for any use and purpose which it may deem
appropriate. In connection with any such lease Landlord may make such changes
in the character of the improvements on the Leased Premises as Landlord may
determine to be appropriate or helpful in effecting such lease and may grant
concessions or free rent. Landlord shall make reasonable efforts to relet the
Leased Premises. Landlord shall not in any event be required to pay Tenant any
sums received by Landlord on such reletting of the Leased Premises.

 

14.5                           In the
event this Lease is terminated due to Tenant’s default as set forth above, and
whether or not the Leased Premises be relet, Landlord shall be entitled to
recover from the Tenant all rent due and all expenses, including reasonable
counsel fees, incurred by Landlord in recovering possession of the Leased
Premises, and all reasonable costs and charges for the care of the Leased
Premises while vacant, which damages shall be due at such time as they are
incurred by Landlord; and all other damages set forth in this Paragraph 14 and
in Paragraph 15. Without any previous notice or demand, separate actions may be
maintained by Landlord against Tenant from time to time to recover any damages
which have become due and payable to the Landlord without waiting until the end
of the term.

 

15.                                 LIABILITY OF TENANT FOR DEFICIENCY

 

In the event that the relation of the Landlord and Tenant terminates by
reason of any default set forth in paragraph 14, and the Landlord reenters the
Property as permitted herein, it is hereby agreed that the Tenant shall remain
liable to pay in monthly payments the Rent and any other charges which shall
accrue. The Tenant expressly agrees to pay as Landlord’s damages for such
breach of this Lease the difference between the Rent herein and the rent
received, if any, by the Landlord, during the remainder of the unexpired term.

 

16.                                 NOTICES

 

All notices required by this Lease shall be given either by certified
mail, return receipt requested, or overnight courier, or personal delivery with
receipt, at the address set forth on the first page of this Lease, and/or such
other place as the parties may designate in writing.

 

17.                                 NON-WAIVER BY EITHER PARTY

 

The failure of either party to insist upon the strict performance of
any of the terms of this Lease, or to exercise any option contained herein,
shall not be construed as a waiver of any such term. Acceptance by either party
of the performance of anything required by this Lease to be performed, with the
knowledge of the breach of any term of this Lease, shall not be deemed a waiver
of such breach, nor shall acceptance of Rent by Landlord in a lesser amount
than is due (regardless of any endorsement on any check, or any statement in
any letter accompanying any payment of Rent) be construed either as an accord
and satisfaction or in any manner other than as

 

18

 

payment on account of the earliest rent then unpaid by Tenant. No
waiver by either party of any term of this Lease shall be deemed to have been
made unless expressed in writing and signed by that party.

 

18.                                 RIGHT OF TENANT TO MAKE ALTERATIONS
AND IMPROVEMENTS

 

The Tenant may not make
alterations, additions or improvements to the Leased Premises, or change the
door locks or window coverings, or in any way alter access to the Leased
Premises (“Alterations”) without the consent of the Landlord, which consent
shall not be unreasonably withheld. Landlord agrees to review any Alterations
proposed by Tenant within 15 days of receipt of plans and specifications, and
advise Tenant whether such Alterations are permissible and whether Tenant will
be required to remove such Alterations at the conclusion of the Lease term.
Tenant shall be permitted to make cosmetic or decorative changes to the Leased
Premises, such as painting, wallpaper or carpeting. Any approval given is not
intended to subject the Landlord’s property to liability under any lien law.
Tenant shall be responsible for obtaining at its own cost and expense all
licenses, permits and approvals that may be required by any governmental entity
having jurisdiction over the approved alterations, additions and/or
improvements. Tenant shall furnish to Landlord as-built drawings of any
alterations, additions or improvements which are made.

 

19.                                 NON-LIABILITY OF LANDLORD

 

Tenant agrees to assume all
risk of damage to its property, equipment and fixtures occurring in or about
the Leased Premises, whatever the cause of such damage or casualty. Landlord
shall not be liable for any damage or injury to property or person caused by or
resulting from steam, electricity, gas, water, rain, ice or snow, or any leak
or flow from or into any part of the building, or from any damage or injury
resulting or arising from any other cause or happening whatsoever.

 

20.                                 RESERVATION OF EASEMENT

 

Landlord reserves the right, easement and privilege to enter on the
Leased Premises in order to install, at its own cost and expense, any utility
lines and services in connection therewith as may be required by the Landlord.
It is understood and agreed that if such work as may be required by Landlord
requires any interior installation, or displaces any exterior paving or
landscaping, the Landlord shall at its own cost and expense, restore such
items, to substantially the same condition as they were before such work. The
Landlord covenants that the foregoing work shall not unreasonably interfere
with the normal operation of Tenant’s business.

 

21.                                 STATEMENT OF ACCEPTANCE

 

Upon the
delivery of the Leased Premises to the Tenant the Tenant covenants and agrees
that it will furnish to Landlord a statement which shall set forth the Date of
Commencement and the Date of Expiration of the lease term,

 

22.                                 FORCE MAJEURE

 

Except for the
obligation of the Tenant to pay Rent and other charges, the period of time
during which the Landlord or Tenant is prevented from performing any act
required to be performed under this Lease by reason of fire, catastrophe,
strikes, lockouts, civil commotion, weather conditions, acts of God, government
prohibitions or prescriptions or embargoes, inability to obtain material or
labor by reason of governmental regulations, the act or default of the other
party, or other events beyond the reasonable control of Landlord or Tenant, as
the case may be,

 

19

 

shall be added
to the time for performance of such act.

 

23.                                 STATEMENTS BY LANDLORD AND TENANT

 

Landlord and
Tenant agree at any time and from time to time upon not less than 5 days’ prior
notice from the other to execute, acknowledge and deliver to the party
requesting same, a statement in writing, certifying that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), that it is not in default (or if claimed to be in default,
stating the amount and nature of the default) and specifying the dates to which
the Rent and other charges have been paid in advance.

 

24.                                 CONDEMNATION

 

24.1                           If due
to condemnation, (i) more than 15% of the Leased Premises is taken or rendered
untenantable, or (ii) more than 25% of the ground is taken (including parking
areas, but excluding front, side and rear set back areas) and, in Landlord’s
opinion, said taking unreasonably or unduly interferes with the use of the
Leased Premises, the lease term created shall terminate from the date when the
authority exercising the power of eminent domain takes or interferes with the
use of the Property. The Tenant shall be responsible for the payment of Rent
until the time of surrender. In any event, no part of the Landlord’s
condemnation award shall be claimed by the Tenant. Without diminishing
Landlord’s award, the Tenant shall have the right to make a claim against the
condemning authority for such independent claim which it may have, including
without limit, Tenant Improvements made or paid for by Tenant.

 

24.2                           In the
event of any partial taking which would not be cause for termination of the
Lease, or in the event of any taking in excess of the percentages provided
above and Tenant retains the balance of the Leased Premises remaining after
such taking, then the Rent shall abate in an amount to be mutually agreed upon
between the Landlord and Tenant based on the relationship that the character of
the property prior to the taking bears to the property which shall remain after
the condemnation. The Landlord shall, to the extent permitted by applicable law
and as the same may be practicable, promptly make such repairs and alterations
in order to restore the Building and/or improvements to a usable condition to
the extent of any condemnation award received by Landlord.

 

25.                                 LANDLORD’S REMEDIES

 

25.1                           The
rights and remedies given to the Landlord in this Lease are distinct, separate
and cumulative remedies, and no one of them, whether or not exercised by the
Landlord, shall be deemed to be in exclusion of any of the others.

 

25.2                           In addition
to any other legal remedies for violation or breach of this Lease by the Tenant
or by anyone holding or claiming under the Tenant such violation or breach
shall be restrainable by injunction at the suit of the Landlord.

 

25.3                           No
receipt of money by the Landlord from any receiver, trustee or custodian or
debtors in possession shall reinstate, or extend the term of this Lease or
affect any notice theretofore given to the Tenant, or to any such receiver,
trustee, custodian or debtor in possession, or operate as a waiver or estoppel
of the right of the Landlord to recover possession of the Leased Premises for
any of the causes therein enumerated by any lawful remedy; and the failure of
the Landlord to enforce any covenant or condition by reason of

 

20

 

its breach by
the Tenant shall not be deemed to void or affect the right of the Landlord to
enforce the same covenant or condition on the occasion of any subsequent
default or breach.

 

26.                                 QUIET ENJOYMENT

 

The Landlord
covenants that the Tenant, on paying the Rent and performing the covenants and
conditions contained in this Lease, may peaceably and quietly have, hold and
enjoy the Leased Premises, in the manner of a multi-tenanted building, for the
Lease term.

 

27.                                 SIJRRENDER OF PREMISES

 

On the last
day, or earlier permitted termination of the Lease, Tenant shall quit and
surrender the Leased Premises in good and orderly condition and repair
(reasonable wear and tear, and damage by fire or other casualty excepted) and
shall deliver and surrender the Leased Premises to the Landlord peaceably,
together with all Tenant Improvements. The Landlord reserves the right,
however, to require the Tenant at its cost and expense to remove any
Alterations installed by the Tenant, and restore the Leased Premises to its
original state, normal wear and tear excepted, unless Landlord has previously
consented to allow such Alterations to remain. Prior to the expiration of the
Lease term the Tenant shall remove all of its tangible property, fixtures and
equipment from the Leased Premises. All property not removed by Tenant shall be
deemed abandoned by Tenant, and Landlord reserves the right to charge the
reasonable cost of such removal and disposal to the Tenant. If the Leased Premises
are not surrendered at the end of the Lease term, the Tenant shall be liable
for double rent under NJSA 2A:42-6, and Tenant shall indemnify Landlord
against loss or liability resulting from delay by Tenant in surrendering the
Leased Premises, including, without limitation any claims made by any
succeeding tenant founded on the delay, and any loss of income suffered by
Landlord. These covenants shall survive the termination of the Lease.

 

28.                                 INDEMNITY

 

Anything in
this Lease to the contrary notwithstanding, and without limiting the Tenant’s
obligation to provide insurance hereunder, the Tenant covenants and agrees that
it will indemnify, defend and save harmless the Landlord against and from all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including without limitation reasonable attorneys’ fees, which may be
imposed upon or incurred by Landlord by reason of any of the following
occurring during the term of this Lease:

 

(a)                                  Any
matter, cause or thing arising out of Tenant’s use, occupancy, control or
management of the Leased Premises and any part thereof.

 

(b)                                 Any
negligence on the part of the Tenant or any of its agents, employees, licensees
or invitees, arising in or about the Leased Premises.

 

(c)                                  Any
failure on the part of Tenant to perform or comply with any of its covenants,
agreements, terms or conditions contained in this Lease.

 

Landlord shall
promptly notify Tenant of any such claim asserted against it and shall promptly
send to Tenant copies of all papers or legal process served upon it in
connection with any action or proceeding brought against Landlord.

 

21

 

29.                                 BIND AND CONSTRUE CLAUSE

 

The terms, covenants and conditions of this Lease shall be binding
upon, and inure to the benefit of, each of the parties hereto and their
respective heirs, successors and assigns. If any one of the provisions of this
Lease shall be held to be invalid by a court of competent jurisdiction, such
adjudication shall not affect the validity or enforceability of the remaining
portions of this Lease. The parties each acknowledge to the other that this
Lease has been drafted by both parties, after consultation with their
attorneys, and in the event of any dispute, the provisions are not to be
interpreted against either party as the drafter of the Lease.

 

30.                                 INCLUSIONS

 

The neuter
gender when used herein, shall include all persons and corporations, and words
used in the singular shall include words in the plural where the text of the instrument
so requires.

 

31.                                 DEFINITION OF TERM “LANDLORD”

 

When the term
“Landlord” is used in this Lease it shall be construed to mean and include only
the entity which is the owner of title to the building. Upon the transfer by
the Landlord of the title, the Landlord shall advise the Tenant in writing by
certified mail, return receipt requested, of the name of the Landlord’s
transferee. In such event, the Landlord shall be automatically freed and
relieved from and after the date of such transfer of title of all personal
liability with respect to the performance of any of the covenants and
obligations on the part of the Landlord herein contained to be performed,
provided any such transfer and conveyance by the Landlord is expressly subject
to the assumption by the transferee of the obligations of the Landlord
hereunder.

 

32.                                 COVENANTS OF FURTHER ASSURANCES

 

If, in
connection with obtaining financing for the improvements on the Leased
Premises, the mortgage lender shall request reasonable modifications in this
Lease as a condition to such financing, Tenant will not unreasonably withhold,
delay or refuse its consent thereto, provided that such modifications do not in
Tenant’s reasonable judgment increase the obligations of Tenant hereunder or
materially adversely affect the leasehold interest hereby created or Tenant’s
use and enjoyment of the Leased Premises.

 

33.                                 COVENANT AGAINST LIENS

 

Tenant agrees that it shall not encumber, or permit to be encumbered,
the Leased Premises or the fee thereof by any lien, charge or encumbrance, and
Tenant shall have no authority to mortgage or hypothecate this Lease in any way
whatsoever. Any violation of this Paragraph shall be considered a breach of
this Lease.

 

34.                                 SUBORDINATION

 

This Lease
shall be subject and subordinate at all times to the lien of any mortgages or
ground leases or other encumbrances now or hereafter placed on the land,
Building and Leased Premises without the necessity of any further instrument or
act on the part of Tenant to effectuate such subordination.  However, Tenant agrees to execute such
further documents evidencing the subordination of the Lease to the lien of any
mortgage or ground lease as shall be desired by Landlord within 5 days,
provided Landlord’s mortgagee agrees to a non-disturbance agreement.

 

35.                                 EXCULPATION OF LANDLORD

 

Neither
Landlord nor its principals shall have any personal obligation for the payment
of any

 

22

 

indebtedness
or for the performance of any obligation under this Lease. The performance of
Landlord’s obligations expressed herein may be enforced only against the
Building and land of which the Leased Premises are a part, and the rents,
issues and profits thereof. The Tenant agrees that no deficiency judgment or
other judgment for money damages shall be entered by it against the Landlord or
its principals personally in any action.

 

36.                                 NET RENT

 

It is the
intent of the Landlord and Tenant that this Lease shall yield, net to Landlord,
the Base Rent specified and all Additional Rent and charges in each month
during the term of the Lease, and that all costs, expenses and obligations of
every kind relating to the Leased Premises shall be paid by the Tenant, unless
expressly assumed by the Landlord.

 

37.                                 SECURITY

 

Tenant shall
not be required to pay any security deposit.

 

38.                                 BROKERAGE

 

The parties
mutually represent to each other that Julian J. Studley, Inc. is the broker who
negotiated and consummated the within transaction, and that neither party dealt
with any other broker in connection with the Lease. In the event either party
violates this representation, it shall indemnify and defend and hold the other
party harmless from all claims and damages. It is agreed that the Landlord
shall be responsible, at its sole cost and expense, to pay the brokerage
commission in connection with this Lease.

 

39.                                 LATE CHARGES

 

In addition to
any other remedy, a late charge of 1-1/2% per month, retroactive to the date
any Rent or payment for Tenant Improvements was due, shall be payable, without
notice from Landlord, on any such charges not paid within 5 days of the due
date.

 

40.                                 PRESS RELEASES

 

Subject to the
prior written approval of Tenant (which shall not be unreasonably withheld),
Landlord shall have the right to announce the execution of this Lease, the
parties hereto, and the real estate brokers involved in such press releases as
Landlord shall deem advisable. In addition, Tenant shall permit Landlord to use
its name and photographs of the Leased Premises (all photographs being subject
to Tenant’s prior consent) in Landlord’s marketing brochures and materials, and
Tenant agrees to reasonably cooperate with Landlord in such regard, but at no
cost or expense to Tenant.

 

41.                                 WAIVER OF JURY TRIAL

 

Landlord and
Tenant both irrevocably waive a trial by jury in any action or proceeding
between them or their successors or assigns arising out of this Lease or any of
its provisions, or Tenant’s use or occupancy of the Leased Premises.

 

42.                                 LAWS OF NEW JERSEY

 

Without regard
to principles of conflicts of laws, the validity, interpretation, performance
and enforcement of this Lease shall be governed by and construed in accordance
with the laws of the State of New Jersey. The sole and exclusive venue for any
dispute between the parties shall be in Middlesex County, New Jersey.

 

23

 

43.                                 OPTION TO RENEW

 

Provided the
Tenant is not then in default hereunder, it has the right to renew the Lease,
for two additional terms of 5 years each, to commence at the end of the prior
term of this Lease. The renewal shall be upon the same terms and conditions as
contained in this Lease, except that the Base Rent for the option term shall
increase by 15% over the Base Rent for the year prior to the year in which the
option term commences. The option of the Tenant to renew this Lease is
expressly conditioned upon the Tenant delivering to the Landlord a notice, in
writing, by certified mail, return receipt requested at least 180 days prior to
the date fixed for termination of the then existing Lease term.

 

44.                                 RIGHT OF FIRST OFFER

 

During the
term of this Lease Agreement, Tenant may notify Landlord in writing if it
desires to lease specific units in the Building which are in close proximity to
the Leased Premises and leased to other tenants (“Designated Units”). Landlord
shall first offer to Tenant any Designated Units that become vacant or that
Landlord knows will become vacant as of a certain date. Tenant shall then have
5 days after receipt of Landlord’s offer to notify Landlord whether it is
interested in leasing such space. If Tenant does not respond during said 5 day
period, then Landlord shall be free to market the space to other tenants. If
Tenant notifies Landlord, in writing, that it desires to lease said space then
the parties agree to negotiate in good faith to reach an agreement on the terms
of the lease. In the event the parties have not entered into a lease after a 30
day period, Landlord shall be free to market the space to other tenants.

 

45.                                 CROSS DEFAULT

 

Landlord and Tenant
have entered into another lease at Eastpark at 8A for all of Building #3, in
addition to this Lease. Any default, monetary or otherwise, in either lease
shall give the Landlord the option to declare a default under both Leases. In
the event of such a default, and exercise of this right by Landlord, it shall
have all the rights set forth in either Lease.

 

IN WITNESS
WHEREOF, the parties hereto have executed this document on the date first above
written.

 

	
  East Park at
  8A

  	
   

  
	
   

  	
   

  
	
  s/A. Joseph
  Stern, Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Pharmacopeia,
  Inc.

  	
   

  
	
   

  	
   

  
	
  S/ Joseph A.
  Mollica

  	
   

  

 

24

 

Exhibit
“B”

 

Payments for
Tenant Improvements

 

The following
shall form the basis for the payments for the tenant improvements referred to
in the Lease Agreement:

 

1.               Upon
execution of the Lease, Tenant shall pay to Landlord the mobilization fee
contained in the Preliminary Estimate of Tenant Improvement Costs made part of
this Exhibit.

 

2.               Landlord
shall thereafter invoice Tenant on Mondays on a biweekly basis with payment for
that invoice due on Friday of that same week.

 

3.               All
payments shall be based upon the approved Construction Budget pursuant to
paragraph 3.2a of the Lease Agreement. Until the approval of the Construction
Budget all payments shall be made based upon the Preliminary Estimate of Tenant
Improvement Costs contained in this Exhibit B. Any adjustments required to the
payments made prior to the issue of the Construction Budget shall be made
within five (5) business days of the approval of the Construction Budget.

 

4.               Landlord
shall use the standard AIA form as the method of invoicing. Payments made for
deposits, materials stored and work performed shall be contained in this shall
and shall be paid as described in item 2 above.

 

5.               No
retention shall be held by Tenant.

 

6.               Upon
Substantial Completion of the Tenant Improvements, full payment of the
remaining construction costs shall be made by the Tenant, in accordance with
this Lease Agreement.

 

7.               Landlord
shall proceed with any “punch list” work required and shall complete this work
in accordance with the terms of this Lease Agreement.

 

25

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