Document:

Exhibit 10.17

 

TABLE OF CONTENTS

 

	
SECTION
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Reference Data
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Attachments
    	
1
    
	
 
    	
 
    	
 
    
	
3.
    	
Demise
    	
1
    
	
 
    	
 
    	
 
    
	
4.
    	
Term
    	
2
    
	
 
    	
 
    	
 
    
	
5.
    	
Holding Over
    	
2
    
	
 
    	
 
    	
 
    
	
6.
    	
Rent
    	
2
    
	
 
    	
 
    	
 
    
	
7.
    	
Rent Escalation
    	
3
    
	
 
    	
 
    	
 
    
	
8.
    	
Indemnity and Insurance
    	
3
    
	
 
    	
 
    	
 
    
	
9.
    	
Non-Liability of Landlord and Exculpation
    	
5
    
	
 
    	
 
    	
 
    
	
10.
    	
Improvements to Leased   Premises
    	
6
    
	
 
    	
 
    	
 
    
	
11.
    	
Alterations by Tenant
    	
8
    
	
 
    	
 
    	
 
    
	
12.
    	
Permitted Use
    	
9
    
	
 
    	
 
    	
 
    
	
13.
    	
Cost of Operation and Maintenance; Real Estate Taxes
    	
10
    
	
 
    	
 
    	
 
    
	
14.
    	
Building Operation and   Services
    	
14
    
	
 
    	
 
    	
 
    
	
15.
    	
Interruption in Operations   or Services
    	
16
    
	
 
    	
 
    	
 
    
	
16.
    	
Repairs
    	
16
    
	
 
    	
 
    	
 
    
	
17.
    	
Relocation of Tenant
    	
18
    
	
 
    	
 
    	
 
    
	
18.
    	
Quiet Enjoyment
    	
18
    
	
 
    	
 
    	
 
    
	
19.
    	
Landlord’s Right of Entry
    	
18
    
	
 
    	
 
    	
 
    
	
20.
    	
Surrender of Leased Premises
    	
18
    
	
 
    	
 
    	
 
    
	
21.
    	
Miscellaneous Covenants
    	
19
    
	
 
    	
 
    	
 
    
	
22.
    	
Rules and Regulations
    	
20
    
	
 
    	
 
    	
 
    
	
23.
    	
Performance of Tenant’s   Covenants
    	
20
    
	
 
    	
 
    	
 
    
	
24.
    	
Eminent Domain
    	
20
    
	
 
    	
 
    	
 
    
	
25.
    	
Casualty Damage
    	
21
    
	
 
    	
 
    	
 
    
	
26.
    	
Brokerage
    	
22
    
	
 
    	
 
    	
 
    
	
27.
    	
Advance Rent and Security   Deposit
    	
22
    
	
 
    	
 
    	
 
    
	
28.
    	
Mortgagee and Other   Agreements
    	
23
    
	
 
    	
 
    	
 
    
	
29.
    	
Subordination
    	
24
    
	
 
    	
 
    	
 
    
	
30.
    	
Assignment and Subletting
    	
25
    

 

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31.
    	
Default
    	
27
    
	
 
    	
 
    	
 
    
	
32.
    	
Landlord’s Option to Terminate Lease
    	
29
    
	
 
    	
 
    	
 
    
	
33.
    	
Underlying Leases and Estates
    	
29
    
	
 
    	
 
    	
 
    
	
34.
    	
Successors and Assigns
    	
29
    
	
 
    	
 
    	
 
    
	
35.
    	
Waivers
    	
29
    
	
 
    	
 
    	
 
    
	
36.
    	
Waiver of Jury Trial and Counterclaim
    	
29
    
	
 
    	
 
    	
 
    
	
37.
    	
Severability
    	
29
    
	
 
    	
 
    	
 
    
	
38.
    	
Notices
    	
29
    
	
 
    	
 
    	
 
    
	
39.
    	
Amendment and Modifications
    	
29
    
	
 
    	
 
    	
 
    
	
40.
    	
Bankruptcy
    	
30
    
	
 
    	
 
    	
 
    
	
41.
    	
Industrial Site Recovery Act/Site Remediation Reform   Act
    	
30
    
	
 
    	
 
    	
 
    
	
42.
    	
Headings and Terms
    	
31
    
	
 
    	
 
    	
 
    
	
43.
    	
Performance of Landlord’s Obligations to Mortgagee
    	
32
    
	
 
    	
 
    	
 
    
	
44.
    	
Applicable Law
    	
32
    
	
 
    	
 
    	
 
    
	
45.
    	
No Representation or Warranty
    	
32
    
	
 
    	
 
    	
 
    
	
46.
    	
Construction of Lease
    	
32
    
	
 
    	
 
    	
 
    
	
47.
    	
Delivery of Possession
    	
32
    
	
 
    	
 
    	
 
    
	
48.
    	
OFAC Representation
    	
32
    
	
 
    	
 
    	
 
    
	
49.
    	
Parking
    	
32
    
	
 
    	
 
    	
 
    
	
50.
    	
Landlord’s Contribution
    	
33
    
	
 
    	
 
    	
 
    
	
51.
    	
Option to Renew
    	
33
    
	
 
    	
 
    	
 
    
	
52.
    	
Right of First Offer
    	
34
    
	
 
    	
 
    	
 
    
	
53.
    	
Submission of Lease to Tenant
    	
34
    

 

SCHEDULES

 

	
Schedule A
    	
-
    	
Leased Premises
    
	
Schedule A-1
    	
-
    	
Rent Escalation
    
	
Schedule A-2
    	
-
    	
Palmer Square Site Plan
    
	
Schedule B
    	
-
    	
Description of Landlord’s Work
    
	
Schedule B-1
    	
-
    	
Description of Tenant’s Work
    
	
Schedule C
    	
-
    	
Form of Estoppel Certificate
    
	
Schedule E
    	
-
    	
Form of Guaranty – Intentionally Omitted
    
	
Schedule F
    	
-
    	
Certification of Tenant
    
	
Schedule G
    	
-
    	
Cleaning Services
    
	
Schedule H
    	
-
    	
Rules and Regulations
    

 

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OFFICE LEASE AGREEMENT

 

	
Princeton, New Jersey
    	
Lease Dated:
    	
 
    

 

1.             Reference Data. Any reference in this Lease to the following subjects shall incorporate therein the data stated for the subject(s) in this Section:

 

	
LANDLORD:
    	
PSN PARTNERS, L.P.
    
	
 
    	
 
    
	
LANDLORD’S ADDRESS:
    	
40 Nassau Street, First Floor
    
	
 
    	
Princeton, New Jersey 08542
    
	
 
    	
 
    
	
TENANT:
    	
AT PHARMACEUTICALS, INC., a
    
	
 
    	
Delaware Corporation
    
	
 
    	
 
    
	
TENANT’S ADDRESS:
    	
51 East 12th Street, 5th Floor
    
	
 
    	
New York, New York 10003
    
	
 
    	
 
    
	
LEASE TERM:
    	
Three (3) Years
    
	
 
    	
 
    
	
COMMENCEMENT DATE:
    	
Upon delivery of possession of the Leased
    
	
 
    	
Premises by Landlord to Tenant
    
	
 
    	
 
    
	
ANNUAL FIXED RENT:
    	
$149,440.00 ($12,453.33 per month)
    
	
 
    	
 
    
	
SECURITY DEPOSIT:
    	
$49,813.32 (4 Months Annual Fixed Rent)
    
	
 
    	
 
    
	
PERMITTED USE:
    	
Office
    

 

2.             Attachments. The following documents are attached hereto, and such documents, as well as all drawings and documents prepared pursuant thereto, shall be deemed to be a part of this Lease:

 

	
Schedule A
    	
-
    	
Leased Premises
    
	
 
    	
 
    	
 
    
	
Schedule A-1
    	
-
    	
Rent Escalation (Renewal Terms)
    
	
 
    	
 
    	
 
    
	
Schedule A-2
    	
-
    	
Palmer Square Site Plan
    
	
 
    	
 
    	
 
    
	
Schedule B
    	
-
    	
Description of Landlord’s Work
    
	
 
    	
 
    	
 
    
	
Schedule B-1
    	
-
    	
Description of Tenant’s Work
    
	
 
    	
 
    	
 
    
	
Schedule C
    	
-
    	
Form of Estoppel Certificate
    
	
 
    	
 
    	
 
    
	
Schedule E
    	
-
    	
Form of Guaranty — Intentionally Omitted
    
	
 
    	
 
    	
 
    
	
Schedule F
    	
-
    	
Certification of Tenant
    
	
 
    	
 
    	
 
    
	
Schedule G
    	
-
    	
Cleaning Services
    
	
 
    	
 
    	
 
    
	
Schedule H
    	
-
    	
Rules and Regulations
    

 

3.             Demise. Landlord hereby demises and lets to Tenant and Tenant takes and hires from Landlord that certain space (“Leased Premises”) delineated in Schedule “A” attached, and made part hereof, in the office building (“Building”) known as 47 Hulfish Street, Suites 441-442, deemed to conclusively consist of 3.736 square feet, in the Borough of Princeton, County of Mercer and State of New Jersey. TOGETHER WITH, appurtenant to the Leased Premises, the right to use in common with Landlord and other tenants, occupants and visitors to the Building, the common entrances, lobbies, ramps, drives, stairs and similar access and serviceways and common areas in and adjacent to the Building, and if the Leased Premises include less than an entire floor of the Building, the common lobbies, hallways and restrooms and other common facilities of such floor. Landlord hereby leases to Tenant, and Tenant hereby takes from

 

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Landlord, the Leased Premises for the Term and at the Rent hereinafter described. Tenant takes the Leased Premises “AS IS” except as otherwise may be specifically set forth herein.

 

4.             Term. The Term shall commence on the Commencement Date and shall extend and continue until the expiration of the Lease Term, unless such Term shall be sooner extended or this Lease otherwise terminated as hereinafter provided.

 

5.             Holding Over. If Tenant retains possession of the Leased Premises, or any part thereof, after the termination of this Lease by expiration of the Lease Term, or otherwise. Tenant shall pay Landlord, (i) as agreed liquidated damages for such unlawful retention alone, an amount, calculated on a per diem basis for each day of such unlawful retention, equal to 150% the Annual Fixed Rent for the time Tenant thus remains in possession, and (ii) all other damages, costs and expenses sustained by Landlord by reason of Tenant’s unlawful retention, including reasonable attorneys’ fees. Without limiting any rights and remedies of Landlord, resulting by reason of the wrongful holding over by Tenant, or creating any right in Tenant to continue in possession of the Leased Premises, all Tenant’s obligations with respect to the use, occupancy and maintenance of the Leased Premises shall continue during such period of unlawful retention.

 

6.             Rent.

 

A.                                    Rent is payable by Tenant beginning on the Commencement Date in monthly installments of one-twelfth (1/12th) of the Annual Fixed Rent, without prior notice or demand, in advance, on the first day of each month at Landlord’s principal office in the Borough of Princeton. Mercer County, New Jersey, or at such other place as Landlord may direct, except that the Rent for the first full month of the Lease Term shall be paid on the date of execution of this Lease.

 

B.                                    In the event the Lease Term commences on a day other than the first day of a calendar month. Tenant shall pay to the Landlord, on or before the Commencement Date of the Lease Term, a pro rata portion of the monthly installment of rent, such pro rata portion to be based on the number of days remaining in such partial month after the Commencement Date of the Lease Term.

 

C.                                    Tenant hereby covenants and agrees to pay the Annual Fixed Rent when due, and also all sums of money required to be paid by Tenant hereunder, all of which additional sums shall constitute “Additional Rent” hereunder, whether or not so designated.

 

D.                                    If Tenant shall fail to pay when due any Annual Fixed Rent or any Additional Rent (referred to collectively as Rent). Tenant shall pay interest thereon at the annual rate of interest equal to one and one-half (1 1/2%) per cent above the prime rate of interest charged by The Bank of New York then prevailing or if a permanent mortgage loan affects the Building, then at the rate payable under said mortgage (said rates or the then prevailing maximum legal rate chargeable to Tenant, whichever is less, is referred to herein as the “Default Rate”) from the date when such installment or payment shall have become due to the date of the payment thereof, and such interest shall be deemed Additional Rent.

 

E.                                    In addition, during the Term, and any renewals, of the within Lease, that portion of any amount of Rent or other amount due under this Lease which is not paid on the day it is first due shall incur a late charge of five (5%) percent for the first occurrence of such non-timely payment; seven and one-half (7.5%) percent for the second occurrence; and ten (10%) percent for the third occurrence. Notwithstanding, such late charge shall not be payable by Tenant for the first occurrence once during the Term of this Lease.

 

F.                                     In the event Tenant issues a cheque for any Rent which is returned to Landlord as unpaid for any reason. Landlord shall be entitled to add the sum of Twenty-Five ($25.00) Dollars to the next Rental bill representing a service charge for such occurrence.

 

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G.                                   All of such amounts shall be collectible by Landlord as Additional Rent with any interest being based on a 360-day year. Any Additional Rent which shall become due shall be payable, unless otherwise provided herein, with the next installment of Annual Fixed Rent. Rent and statements required of Tenant shall be paid and delivered to Landlord at the management office of Landlord in the Retail Center or at such other place as Landlord may, from time to time, designate in a notice to Tenant. Any payment by Tenant or acceptance by Landlord of a lesser amount than shall be due from Tenant to Landlord shall be treated as payment on account. The acceptance by Landlord of a cheque for a lesser amount with an endorsement or statement thereon, or upon any letter accompanying such cheque, that such lesser amount is payment in full, shall be given no effect, and Landlord may accept such cheque without prejudice to any other rights or remedies which Landlord may have against Tenant.

 

H.                                   Tenant’s Rental obligations shall be as follows:

 

(i)                                     Tenant shall not be obligated to pay Annual Fixed Rent until seventy-four (74) days following the Commencement Date (“Rent Commencement Date”):

 

(ii)                                  Commencing with the Commencement Date. Tenant shall be obligated to pay all other charges and sums constituting Additional Rent due hereunder:

 

(iii)                               Commencing with the Rent Commencement Date. Tenant shall commence payments of Annual Fixed Rent and shall continue to pay all sums and charges constituting Additional Rent:

 

(iv)                              However, in the event Tenant is in default of any term, covenant, condition or provision under the within Office Lease Agreement, either monetary or non-monetary, and fails to cure such default within any grace period, then subparagraphs (i) and (iii) above shall not apply and Tenant’s obligation to pay Annual Fixed Rent and all other charges and sums constituting Additional Rent, and the like, shall be effective on the Commencement Date.

 

7.             Rent Escalation. See Schedule A-1 annexed hereto and made a part hereof

 

8.             Indemnity and Insurance.

 

A.                                    Tenant shall not do anything, nor suffer nor permit anything to be done in or about the Leased Premises or Building which shall (i) subject Landlord to any liability or responsibility for injury to any person or property by reason of any activity being conducted in the Leased Premises: (ii) cause any increase in the fire insurance rates applicable to the Building or equipment or other property located therein: or (iii) be prohibited by governmental regulation or applicable law or any license or other permit required or obtained pursuant to Section 21 A. Tenant, at Tenant’s expense, shall comply with all rules, regulations or requirements of the New Jersey Board of Fire Underwriters and the New Jersey Fire Insurance Rating Organization or any similar body.

 

B.                                    If by reason of any act, notwithstanding that such act is permitted by terms of this Lease, or omission on the part of Tenant, the rate of fire insurance with extended coverage on the Building or equipment or other property of Landlord, or any other tenant or occupant of the Building, shall be higher than it otherwise would be. Tenant shall reimburse Landlord and all such other tenants or occupants, on demand, for that part of the premiums for fire insurance and extended coverage paid by Landlord and such other tenants or occupants because of such act or omission on the part of the Tenant.

 

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C.                                    Tenant shall obtain and keep in full force and effect during the Term, at its own cost and expense and in the following amounts or such greater amounts as Landlord or any mortgagee of Landlord may reasonably request, (i) Public Liability Insurance, such insurance to afford protection in an amount not less than $3,000,000, for personal injury or death, and $300,000 for damage to property, protecting Landlord and Tenant as insureds against any and all claims for personal injury, death or property damage occurring in, upon, adjacent to or connected with the Leased Premises or any part thereof: (ii) insurance against loss or damage by fire, and such other risks and hazards as are insurable under present and future standard forms of fire and extended coverage insurance policies, to Tenant’s property for the full insurable value thereof, protecting Landlord, any mortgagee of Landlord, and Tenant as insureds as their respective interests may appear; and (iii) contractual liability insurance in the amounts specified above insuring Tenant’s liability pursuant to the provisions of this Lease.

 

D.                                    Tenant shall obtain such other insurance in such amounts as may, from time to time, be reasonably required by Landlord against other insurable hazards which at the time are commonly insured against due regard being given to the type of building, its location, construction, use and occupancy.

 

E.                                    Said insurance is to be written in form and substance satisfactory to Landlord by a good and solvent insurance company of recognized standing, admitted to do business in the State of New Jersey, which shall be reasonably satisfactory to Landlord. Tenant shall procure, maintain and place such insurance and pay all premiums and charges therefor and upon failure to do so Landlord may, but shall not be obligated to, procure, maintain and place such insurance or make such payments, and in such event. Tenant agrees to pay the amount thereof, plus interest at the Default Rate to the Landlord on demand and said sums shall be in each instance collectible as Additional Rent on the first day of the month following the date of payment by Landlord. Tenant shall cause to be included in all such insurance policies a provision to the effect that the same shall be non-cancellable nor materially changed except upon twenty (20) days prior written notice to Landlord. Before the Commencement Date, the original insurance policies or appropriate certificates shall be deposited with Landlord together with evidence of due payment of premiums thereon. Any renewals, replacements or endorsements thereto shall also be deposited with Landlord to make certain that said insurance shall be in lull force and effect during the Term.

 

F.                                     Tenant agrees to indemnify and save Landlord and Landlord’s agents harmless from all losses, costs, liabilities, claims, damages and expenses, including reasonable attorneys’ and other professional fees, penalties and fines, incurred in connection with or arising from (i) any default by Tenant in the observance or performance of any of the terms, covenants or conditions of this Lease on Tenant’s part to be observed or performed, or (ii) the use, occupancy, control or management, or manner of use, occupancy, control or management of the Leased Premises or the Building by Tenant or any person claiming through or under Tenant, or contractors, agents, servants, employees, visitors, invitees, licensees and the like, of Tenant or any such person, in or about the Leased Premises or the Building either prior to, during, or after the expiration of the Term including any acts, omissions or negligence in the making or performing of any improvements.

 

G.                                   Tenant shall pay to Landlord, as Additional Rent, within ten (10) days next following receipt by Tenant of bills or statements therefor, sums equal to all losses, costs, liabilities, claims, damages and expenses referred to in this Section and Tenant’s obligations under this Section shall survive the termination of the Term.

 

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H.                                   Landlord shall not be responsible or liable to Tenant, or to those claiming by, through or under Tenant, for any loss or damage which may be occasioned by or through the acts or omissions of persons occupying space adjoining the Leased Premises or any other part of the Building, or otherwise, or for any loss or damage incurred by Tenant, or those claiming by, through or under Tenant, or its or their property, from the breaking, bursting, stoppage or leaking of electrical cable or wires, water, gas, sewer or steam pipes. To the maximum extent permitted by law. Tenant agrees to use and occupy the Leased Premises, and to use such other portions of the Common Areas as Tenant is herein given the right to use, at Tenant’s own risk as specified in this Section.

 

I.                                        Neither party shall be liable to the other party or to any insurance company (by way of subrogation or otherwise) insuring the other party for loss or damage to any building, structure or other tangible property, even though such loss or damage might have been occasioned by the negligence of such party, its agents or employees; provided, however, that if, by reason of the foregoing waiver, either party shall be unable to obtain any such insurance, such waiver shall be deemed not to have been made by such party and, provided, further, that if, by reason of the foregoing waiver, either party shall be unable to obtain any such insurance without the payment of an additional premium therefor, then, unless the party claiming the benefit of such waiver shall agree to pay the party seeking to obtain insurance for the cost of such additional premium, within thirty (30) days after notice by such party setting forth such requirement and the amount of the additional premium, such waiver shall be of no force and effect between the parties.

 

9.             Non-Liability of Landlord and Exculpation.

 

A.                                    Excepting for Landlord’s gross negligence, it is expressly understood and agreed by and between the parties to this agreement that Tenant shall assume all risk of damage and casualty to its property, equipment and fixtures occurring in or about the Leased Premises, whatever the cause of such damage or casualty. It is further understood and agreed that, in any event, Landlord, in its capacity as Landlord, and, if applicable, as builder, architect, designer or general contractor of the Leased Premises and the Building in which the Leased Premises is located, and Landlord’s agents, servants, employees, contractors, invitees and the like shall not be liable to Tenant. Tenant’s agents, servants, employees, contractors, invitees and the like, for any damage or injury to person or property or for any inconvenience or annoyance to Tenant or any other occupant of the Leased Premises or injury to or interruption of Tenant’s or such other occupant’s business, arising out of or attributable to (i) the design and construction of the Leased Premises and the Building of which the Leased Premises is a part: (ii) any maintenance, repairs, replacements, additions, alterations, substitutions and installations made to the Leased Premises and the Building of which the Leased Premises is a part: (iii) the failure of Landlord or others to perform any such maintenance or to make any such repairs, replacements, additions, alterations, substitutions and installations to the Leased Premises and the Building of which the Leased Premises is a part or to provide any utilities or services; (iv) the acts or omissions of any tenant or other occupants of any space adjacent to or adjoining the Leased Premises; (v) steam, electricity, gas, water, rain, ice or snow, or any leak or flow from or into the Leased Premises and the Building of which the Leased Premises is a part, and (vi) any other cause or happening whatsoever with respect to any of the events or occurrences referred to in subparagraphs (i) through (v), or otherwise.

 

B.                                    Notwithstanding anything to the contrary provided in this Lease, each and every term, covenant, condition and provision of this Lease is hereby made specifically subject to the provisions of this Section 9. It is expressly understood and agreed that there shall be no personal liability

 

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whatsoever on the part of the Landlord or any successor in interest of Landlord (or on the part of the officers, directors and shareholders of any corporation or the members of any firm, partnership or joint venture which may be the Landlord or any successor in interest of the Landlord at any time or from time to time) with respect to any of the terms, covenants, conditions and provisions of this Lease, and Tenant shall look, solely to the equity of Landlord or such successor in interest in the fee estate of Landlord in the Leased Premises for the satisfaction of each and every remedy of Tenant in the event of any breach by Landlord or by any such successor in interest of any of the terms, covenants, conditions and provisions of this Lease to be performed by Landlord, such exculpation of corporate and/or personal liability to be absolute and without any exception whatsoever.

 

C.                                    Notwithstanding anything contained in this Section or any other Section in this Lease, in no event shall Landlord be liable to Tenant for any consequential, special, indirect or punitive damages.

 

10.          Improvements to Leased Premises.

 

A.                                    All construction work performed by Tenant under the terms of this Lease shall be done in a good and workmanlike manner and in compliance with all applicable laws, ordinances, regulations and orders of governmental authorities and with all applicable codes of all insurers of the Building. Landlord may inspect the work of the Tenant at reasonable times and shall give notice of observed defects.

 

B.                                    Tenant shall, at its sole cost and expense, complete all improvements and other work to be performed by it pursuant to Schedule “B-1”. Tenant shall be permitted by Landlord to enter the Leased Premises for the purpose of performing its obligations under Schedule “B-1” and for the purpose of installing its fixtures and other equipment, provided:

 

(i)                                     Tenant shall have obtained Landlord’s written approval of the plans and specifications for such work: and

 

(ii)                                  Tenant shall have deposited with Landlord the policies or certificates of insurance required in Sections 8 and 11; and

 

(iii)                               Tenant shall have secured all necessary permits and approvals of all boards, bureaus and agencies having jurisdiction and Tenant shall have provided copies of such to Landlord: and

 

(iv)                              Tenant shall have provided Landlord with all requested reasonable financial information and documentation; and

 

(v)                                 Tenant’s activities shall be conducted so as not unreasonably to interfere with Landlord’s construction activities or with other tenants.

 

C.                                    Tenant shall, at its expense, remove from the Leased Premises and from the Building, all trash which may accumulate in connection with Tenant’s activities. During such period, Tenant shall perform all duties and obligations imposed by this Lease, including, without limitation, those provisions relating to insurance and indemnification, saving and excepting only the obligation to pay Fixed Rent (other than Additional Rent arising out of any failure of Tenant to perform its obligations under this Lease), which obligation shall commence when the Term commences.

 

D.                                    No work which Landlord permits Tenant to do pursuant to this Lease, whether in the nature of erection, construction, alteration or repair, shall be deemed to be for the immediate use and benefit of Landlord so that no construction or other lien shall be allowed against the estate of Landlord by reason of any consent given by Landlord to Tenant to improve the

 

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Leased Premises. Tenant shall pay promptly, or if a dispute promptly bond, all persons furnishing labor or materials with respect to any work performed by Tenant or its contractors on or about the Leased Premises. In the event any construction or other lien or notice of intention to claim such lien shall at any time be filed against the Leased Premises or the Building by reason of work, labor, services or materials performed or furnished, or alleged to be performed or furnished, to Tenant or to anyone holding the Leased Premises through or under Tenant, Tenant shall, within thirty (30) days after notice of the filing thereof, cause the same to be discharged of record or bonded to the satisfaction of Landlord. If Tenant shall fail to cause such lien or notice to be discharged or bonded within the period aforesaid then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge it by paying the amount claimed to be due, and the amount so paid by Landlord including reasonable attorneys’ fees incurred by Landlord in procuring the discharge of such lien or notice, together with interest thereon at the Default Rate, shall be due and payable by Tenant to Landlord as Additional Rent.

 

E.                                    Tenant shall be responsible for and shall pay to Landlord, upon demand and as Additional Rent, all reasonable attorneys, architectural, engineering and other professional fees and expenses with respect to any and all review and approval regarding Tenant’s improvements to the Leased Premises including, but not limited to, Landlord’s in-house professionals and staff.

 

F.                                     After commencement of Tenant’s Term. Tenant shall have no right to cancel this Lease, seek a diminution of Rent, sue for damages, or assert any other contractual, legal or equitable remedy based either on a claim that Landlord failed to deliver possession in accordance with the terms of this Lease or based on a claim that the size, location, layout, dimensions or construction of the Leased Premises or the Building in which the Leased Premises is located or service areas (if any), sidewalks, parking or other common areas (if any), or any other facilities to be furnished by Landlord, were not completed or furnished in accordance with the terms of this Lease. Notwithstanding the foregoing, if after commencement of Tenant’s Term, and during the Term hereof, Landlord is in default under any of its Lease obligations. Tenant shall have such rights at law or equity to which it may be entitled on account of such default. After commencement of Tenant’s Term, Tenant shall be deemed to have certified to Landlord and to the holder of any mortgage to which this Lease is, or shall thereafter be, subject and subordinate, that the Leased Premises has been delivered to it in accordance with the terms of this Lease, that possession thereof has been fully and completely accepted by Tenant who is then in possession of the same, and that the date for the payment of Annual Fixed Rent hereunder have all theretofore commenced and that the Leased Premises, the parking area, and all other portions of the Building have been completed in accordance with the requirements and terms of this Lease and that there has not been any violation of any of the Lease terms on the part of the Landlord. The forgoing provision shall be self-operative and no further instrument, letter or certificate shall be required by the Landlord or any such mortgagee unless either said Landlord or mortgagee shall deem same appropriate, in which event, in confirmation of the forgoing, the Tenant shall promptly execute, in writing, any instrument, letter and/or certificate containing the foregoing and each other like provisions in regard to the condition of the Leased Premises, the Building in which the Leased Premises is located, the Rent(s) and Term as shall be requested by the Landlord and/or said mortgagee and Tenant hereby constitutes and appoints Landlord the Tenant’s attorney-in-fact to execute any such instrument(s), letter(s) and/or certificate(s) for and on behalf of the Tenant.

 

G.                                   All unattached, movable trade fixtures and movable furniture (as distinguished from leasehold improvements) owned by Tenant and installed in the Leased Premises shall remain the property of Tenant and

 

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shall be removable at any time, including upon the expiration of the Term; provided Tenant shall not at such time be in default of any terms, conditions, provisions or covenants of this Lease, and provided further that Tenant shall repair any damage to the Leased Premises caused by the removal of said fixtures and furniture. If Tenant is in default, Landlord shall have the benefit of any applicable lien on Tenant’s property located in or on the Leased Premises as may be permitted under any federal or state laws, and in the event such lien is asserted or filed by Landlord in any manner or by operation of law, Tenant shall not remove or permit the removal of said property until the lien has been removed and all defaults have been cured and Tenant hereby expressly grants to Landlord a security interest in all of Tenant’s property located in or on the Leased Premises. This Lease Agreement also is intended to be a security agreement under the Uniform Commercial Code and Landlord shall be entitled to all the rights and remedies of a Secured Party under said Uniform Commercial Code in addition to all of its rights and remedies hereunder or under other applicable law or agreement with Tenant.

 

11.          Alterations by Tenant.

 

A.                                    Tenant shall not make during the Lease Term, or any extensions thereof, any alterations or additions to the Leased Premises unless with the prior written approval of Landlord and then only in accordance with plans and specifications therefor approved by Landlord and subject to such conditions as Landlord may require, including, but not limited to, that Tenant be required to pay for any increased cost to Landlord occasioned thereby or attributed thereto (including, but not limited to, any increase in real estate taxes, omitted or added assessments, insurance and the like, the entirety of such increases to be borne solely by Tenant separate from and in addition to Tenant’s Proportionate Share of Cost of Operation and Maintenance) and to readapt the Leased Premises prior to the termination of this Lease, all without expense to Landlord, Landlord shall cooperate with Tenant, at no cost to Landlord, and such approval shall be reasonable and without delay. However, any such alterations or additions which may be approved by Landlord and made by Tenant shall be deemed part of the Leased Premises or the Building and shall not thereafter be removed by Tenant unless Landlord shall require removal of same in conjunction with its approval as set forth in Section 20, Surrender of Leased Premises.

 

B.                                    All alterations and additions by Tenant and installation of furnishings following occupancy shall be performed outside the normal business hours (unless Landlord shall permit such work to be done at other times) and shall be coordinated with any work being performed by Landlord and performed in such manner and by such contractor(s) as to assure harmonious labour relations and so as not to damage the Building or interfere with the use and occupancy of any tenants in the Building and its operations and, except for installation of furnishings only, shall be performed by Landlord’s contractors or workmen or other contractors or workmen first approved by Landlord.

 

C.                                    As further conditions to Landlord’s approval of any proposed alterations or additions by Tenant which are to be made after the beginning of the Lease Term, Tenant shall (i) secure all necessary governmental approvals, licenses and permits: (ii) cause the contractor(s) and subcontractor(s) to carry Worker’s Compensation insurance in amounts approved by Landlord and also comprehensive public liability insurance with limits as approved by Landlord, and deliver to Landlord certificates of all such insurance: and (iii) not voluntarily suffer nor permit any construction, laborer’s or materialmen’s lien, or notice thereof, to be filed against the Leased Premises or any part thereof by reason of work, labor, services or materials supplied or claimed to have been supplied to Tenant: and if any construction, laborer’s or materialmen’s lien or notice shall at any time be filed against the Leased Premises or any part thereof, Tenant, within thirty

 

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(30) days after notice of the filing thereof, shall cause it to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shall fail to cause such lien or notice to be discharged or bonded within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge it either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings. Any amount so paid by Landlord, plus all of Landlord’s costs and expenses associated therewith, shall constitute Additional Rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

 

D.                                    Tenant shall be responsible for and shall pay to Landlord, upon demand and as Additional Rent, all reasonable attorneys, architectural, engineering and other professional fees and expenses incurred with respect to any and all review and approval regarding Tenant’s alterations or additions to the Leased Premises, including, but not limited to, Landlord’s in-house professionals and staff.

 

E.                                    In addition to the foregoing terms and conditions for any and all of Tenant’s alterations or additions to the Leased Premises, no core drilling shall be permitted by Landlord nor conducted by Tenant unless full and strict compliance with the following conditions:

 

(i)                                     All specifications and plans shall be delivered to Landlord for its prior written approval which shall not be unreasonably withheld. Any and all of such core-drilling, if permitted, shall be done only outside normal business hours so as to restrict any interference with other tenants. Landlord shall consider the time, nature and scope of core drilling in addressing its approval.

 

(ii)                                  Any and all damage to the Tenant floors or floor covering shall be repaired and/or restored to its original condition at Landlord’s sole option, including the cost of all flooring and carpet.

 

F.                                     Nothing in this Lease shall be deemed or construed in any way as constituting consent by Landlord for the making of any alterations or additions by Tenant within the meaning of N.J.S.A. 2A:44A-1 et seq., or any amendment thereof, or constituting a request by Landlord, express or implied, to any contractor, subcontractor, laborer or materialman for the performance of any labor for the use or benefit of Landlord.

 

G.                                   Tenant shall promptly pay when due the costs and expenses of all such alterations and additions as referred to in this Section 11 and shall indemnify Landlord against any loss, cost or expense occasioned directly or indirectly as a result of such alterations and additions, including, without limitation, reasonable attorneys’ and other professional fees and expenses.

 

12.          Permitted Use. Tenant covenants and agrees to initially and continuously use and occupy the Leased Premises and such use and occupancy shall be only in conformity with the laws or requirements of any governmental authority and for the use specified in Section I hereof and not to use nor permit any use of the Leased Premises which creates any safety hazard, or which would be dangerous to the Leased Premises, the Building or the occupants of same, or which would be disturbing to other tenants or occupants of the Building, or which would cause am increase in premium for any insurance which the Landlord may then have in effect with respect to the Building generally.

 

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13.          Cost of Operation and Maintenance; Real Estate Taxes.

 

A.            Cost of Operation and Maintenance.

 

(i)            For the purposes of this Lease:

 

(a)                                 The term “Cost of Operation and Maintenance” shall mean all fees, charges, costs and expenses paid or incurred by Landlord or on behalf of Landlord with respect to the ownership, operation, cleaning, repair, safety, management, security and maintenance of the Leased Premises, the Building and the Common Areas (described as those areas and facilities which may be furnished by Landlord in or near the Palmer Square and Retail Center Area, as set forth on Schedule A-2, for the non-exclusive general common use of tenants, whether or not retail, residential, office, hotel and/or restaurant tenants also use such areas and facilities), and with respect to the services provided tenants including, but not limited to, all of the following: sewer rental; gas and/or other fuel used for heating; hot and cold water; gas and electric and any other utility charges to the extent not separately paid for, reimbursed by or charged to a tenant; all costs incurred for air conditioning, ventilation and heating; cleaning services and maintenance; the cost or rental of all building and cleaning supplies, tools, materials, machines and equipment, elevators; fire, liability, rent, plate glass and any other insurance premiums: snow and ice removal; all repairs and maintenance; the amortization (over the reasonably estimated useful life thereof beyond the Term, or Renewal Term, if applicable, of this Lease, of all replacements of and to the mechanical systems and all other capital expenditures; exterior maintenance and maintenance of lawns, landscaping shrubbery and parking areas; exterminating services; decorations; painting; salaries, wages and bonuses paid to employees of Landlord, except those above the level of Building Manager, engaged in the operation, cleaning, repair, safety, management, security or maintenance of the Leased Premises, the Building or in providing services to tenants (including social security, unemployment insurance, disability benefits, pensions, hospitalization, retirement plans, group insurance and fringe benefits such as vacation, holiday and proper allowances): charges of independent contractors performing work included within this definition of Cost of Operation and Maintenance; waste, garbage and trash collection and removal; and an overhead cost equal to fifteen (15%) per cent of the total Cost of Operation and Maintenance prior to inclusion of this overhead cost.

 

(b)                                 The costs and expenses incurred in operating and maintaining or in causing to be operated or maintained the Common Areas (including all parking areas) pursuant to this Section shall be allocated on an equitable basis among the respective classes of retail, office, hotel, restaurant and residential occupants of the Palmer Square and Retail Center Area. For the purposes of this Section, Landlord’s operating costs shall include all amounts, costs of operation and expenditures (as hereinabove defined) which are identified as applicable and relating solely to the total leasable office floor area in the Palmer Square and Retail Center Area and that portion of the Common Areas reasonably allocable thereto, together with those items, amounts, costs and expenditures which (if they cannot be

 

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so specifically identified) are allocated on an equitably proportionate basis to said office floor area and Common Areas.

 

(c)                                  “Base Expense Year” shall be the 2012 calendar year.

 

(d)                                 “Operational Year” shall mean each calendar year after the Base Expense Year.

 

(e)                                  “Tenant’s Projected Share” shall mean Tenant’s Proportionate Share multiplied by Landlord’s written estimate of increase of Cost of Operation and Maintenance for the ensuing calendar year over the Base Expenses, said written estimate to be delivered by Landlord to Tenant during December of each year. Tenant’s Projected Share shall be divided by twelve (12) and shall be payable on the first of each month, starting on the Commencement Date by Tenant to Landlord as Additional Rent.

 

(f)                                   “Tenant’s Proportionate Share” shall be equal to 5.2 percent.

 

(g)                                  The term “Base Expenses” shall mean the annualized Cost of Operation and Maintenance for the Base Expense Year. For purposes of determining Tenant’s Proportionate Share of increase relating to increases in the Cost of Operation and Maintenance, the Base Expenses shall be deemed to have been incurred by Landlord during the Base Expense Year.

 

(ii)                                  (a)           After the expiration of the Base Expense Year and each Operational Year, Landlord shall furnish Tenant a written detailed statement prepared by Landlord of the Cost of Operation and Maintenance incurred for such Base Expense Year or Operational Year. During the period of sixty (60) days after receipt of Landlord’s Statement, Tenant may inspect the records of the material reflected in said Landlord’s Statement at a reasonable time mutually agreeable to Landlord and Tenant. Within sixty (60) days after receipt of such Statement for any Operational Year setting forth Tenant’s proportionate Share of any increase of Cost of Operation and Maintenance during such Operational Year over the Cost of Operation and Maintenance in the Base Expense Year (said increase being referred to herein as the “Cost Increase”), Tenant shall pay same (less the amount of Tenant’s Projected Share paid by Tenant on account thereof) to Landlord as Additional Rent.

 

(b)                                 Commencing with the First Operational Year, Tenant shall pay to Landlord, as Additional Rent, Tenant’s Projected Share. If Landlord’s Statement at the end of the then Operational Year shall indicate that Tenant’s Projected Share exceeded Tenant’s Proportionate Share of Cost Increase, Landlord shall credit the amount of such excess against the subsequent payment of Additional Rent due hereunder or, refunded to Tenant if such excess occurs during the last Lease Year of the Term. If Landlord’s Statement shall indicate that Tenant’s Proportionate Share of Cost Increase exceeded Tenant’s Projected Share for the then Operational Year, Tenant shall forthwith pay the amount of such excess to Landlord. If said Landlord’s Statement is furnished to Tenant after the commencement of such Operational Year, there shall be promptly paid by

 

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Tenant to Landlord an amount equal to the portion of such payment allocable to the part of such Operational Year which shall have elapsed prior to the first day of the calendar month next succeeding the calendar month in which said Landlord’s Statement is furnished to Tenant.

 

(iii)                               If the Term shall expire on a date other than December 31st, any Additional Rent for the Lease Year in which the date of expiration of the Term shall occur shall be apportioned in that percentage which the number of days in the period from January 1st of such Lease Year to such date of expiration, both inclusive, shall bear to the total number of days in the calendar year in which such expiration occurs.

 

(a)                                 Landlord’s Statements shall be rendered to Tenant, but Landlord’s failure to render Landlord’s Statement with respect to any Operational Year or Landlord’s delay in rendering said Statement beyond two (2) years after any Operational Year shall not prejudice Landlord’s right to render a Landlord’s Statement with respect to that or any subsequent Operational Year. The obligations of Landlord and Tenant under the provisions of this Section with respect to any Additional Rent shall survive the expiration or any sooner termination of the Term. Landlord shall use its best efforts to deliver said Landlord’s Statements within one hundred twenty (120) days.

 

(b)                                 Each Landlord’s Statement shall be conclusive and binding upon Tenant unless within sixty (60) days after receipt of such Landlord’s Statement Tenant shall notify Landlord that it disputes the correctness of Landlord’s Statement, specifying the respects in which Landlord’s Statement is claimed to be incorrect. Pending the determination of such disputes hereinafter provided, Tenant shall pay Additional Rent in accordance with the applicable Landlord’s Statement, and such payment shall be without prejudice to Tenant’s position. In the event that Tenant disputes the computation set forth on Landlord’s Statement, Tenant shall have the right to retain an independent certified public accountant, at Tenant’s sole cost and expense, to inspect the records of the material reflected on said Statement and in the event said accountant determines that Landlord’s Statement was in error, the dispute shall be referred to arbitration in accordance with the Commercial Rules of the American Arbitration Association for expedited arbitration. If the dispute shall be determined in Tenant’s favor, Tenant shall be entitled to a credit against Additional Rent, including a credit for Tenant’s reasonable expenses incurred in hiring an accountant, thereafter payable in the amount of Tenant’s overpayment of Additional Rent resulting from compliance with Landlord’s Statement.

 

(iv)                              Notwithstanding anything to the contrary, in no event shall the aggregate credits allowable to Tenant in any Operational Year pursuant to this Section exceed the Additional Rent payable by Tenant pursuant to this Section, it being the intention of Landlord and Tenant that the Fixed Rent payable by Tenant hereunder shall not be reduced by reason of any decrease in the Cost of Maintenance and Operation.

 

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B.            Real Estate Taxes.

 

(i)                                     Commencing with the First Operational Year (as defined in Subsection A.(i)(d) above, Tenant shall pay to Landlord, as Additional Rent, the increase over the Base Expense Year of Tenant’s Projected Share of all real estate taxes, ad valorem taxes and assessments, general and special assessments, taxes on real estate rental receipts, taxes on Landlord’s gross receipts, business use and occupancy taxes, business operations taxes, or any other tax imposed upon or levied against real estate or upon owners of real estate provided Tenant shall not be responsible for any inheritance tax, income tax or realty transfer tax as such rather than personalty generally, or payments made to a federal, state or local government authority by Landlord in lieu of any such taxes or assessments, payable with respect to or allocable to the entire tax lot of which the Leased Premises is a part, together with the reasonable cost (including fees of attorneys, consultants and appraisers) of any negotiation, contest or appeal pursued by Landlord in an effort to reduce any such tax, assessment or charge, the same being collectively referred to herein as “Taxes”, Tenant’s proportionate share of Taxes for any Tax Year shall be computed by multiplying the amount of such Taxes by a fraction, the numerator of which shall be the Floor Area of the Leased Premises and the denominator of which shall be the total Floor Area of all leaseable premises in the tax lot. For the Tax Year in which the Term commences or terminates, Tenant’s liability for its proportionate share of any Taxes shall be subject to a prorata adjustment based upon the number of days of such Tax Year falling within the Term.

 

(ii)                                  Tenant’s proportionate share of Taxes shall be paid by Tenant, in equal monthly installments, in such amounts as are estimated and billed for each Tax Year by Landlord at the commencement of the Term and at the beginning of each successive Tax Year during the Term, each such installment being due on the first day of each calendar month. Within sixty (60) days after Landlord’s receipt of tax bills for each Tax Year, or such reasonable (in Landlord’s determination) time thereafter. Landlord will certify to Tenant the amount of Taxes for the Tax Year in question and the amount of Tenant’s proportionate share thereof. The proportionate share of Taxes paid or payable for each Tax Year shall be adjusted between Landlord and Tenant, both Landlord and Tenant hereby agreeing that Tenant shall pay Landlord or Landlord shall credit Tenant’s account (or. if such adjustment is at the end of the Term, pay Tenant), as the case may be, within thirty (30) days of the aforesaid certification to Tenant, such amount necessary to effect such adjustment. The failure of Landlord to provide such certification within two (2) years of the time prescribed above shall not relieve Tenant of its obligations generally or for the specific Tax Year in which any such failure occurs.

 

(iii)                               The term “Tax Year” shall mean the twelve (12) full calendar months of the Term commencing with the January 1st immediately following the first day of the Term and shall end December 31st of such calendar year; thereafter, each Tax Year shall consist of successive periods of twelve (12) calendar months; provided, however, that the first Tax Year shall commence on the first day of the Term and terminate on the immediately following 31st day of December, and the last Tax Year shall terminate on the last day of the Term.

 

(iv)                              In addition to Tenant’s proportionate share of Taxes, Tenant shall pay to the appropriate agency any and all sales taxes, excise taxes

 

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and business use and occupancy taxes (not including, however, Landlord’s income taxes) levied, imposed or assessed by the State of New Jersey or any political subdivision thereof or other taxing authority, upon any Rental payable hereunder.

 

(v)                                 If, at any time following the execution of this Lease, the method or scope of taxation prevailing at the date of such execution shall be altered, modified or enlarged so as to cause the method of taxation to be changed, in whole or in part, so that some other tax, levy or other imposition is substituted in whole or in part for the real estate taxes assessed against the Leased Premises on the date of execution of this Lease, then, and in such event, each and every such substituted tax or other imposition shall be payable and discharged by Tenant in the manner required pursuant to the law promulgating such tax or other imposition. If any such substitute tax or other imposition shall be in the form of an income tax or in the form of any other tax or imposition which the law promulgating the same shall require Landlord to pay, then Tenant shall pay Landlord, as Additional Rental, during the Term of this Lease, such amount as shall be equivalent to the amount by which the real estate taxes have been decreased or diminished. Such payments shall be made by Tenant to Landlord at such time or times as Landlord shall be required to pay such substitute taxes in accordance with law and with the provisions of this Lease.

 

(vi)                              It being Tenant’s obligation to pay all real estate taxes assessed against the Leased Premises, as provided elsewhere in this Lease, the parties recognize and acknowledge that the intent and purpose of this paragraph is to provide against and assure that Landlord does not suffer nor sustain any diminution in the Landlord’s gross receipts from the rental of the Leased Premises resulting from any change in the scope or form of taxation which has the effect of shifting any of Tenant’s obligations under this Lease, or any part thereof, to Landlord; and Tenant hereby agrees to protect Landlord against any such diminution in gross receipts as a result thereof, provided that Tenant shall not be responsible for taxes incurred by Landlord solely as a result of Landlord’s change in structure, entity or corporate make-up.

 

C.                                    Any Additional Rent payable pursuant to this Section also shall be collectible by Landlord in the same manner as Fixed Rent and Landlord shall have the same remedies for non-payment thereof as Landlord has hereunder for non-payment of Fixed Rent.

 

14.          Building Operation and Services.

 

A.                                    Landlord shall, subject to the conditions and limitations set forth in Sections 13, 15 and 16, furnish heat, ventilating, and air conditioning services as normal seasonal changes may require to provide reasonably comfortable space temperature and ventilation for occupants of the Building during normal business operation, daily from 8:00 A.M. to 6:00 P.M., except Saturdays, Sundays and the following Holidays: New Year’s Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day, Christmas Day, Presidents Day and Martin Luther King’s Birthday.

 

In the event Tenant’s use and occupancy requires additional air conditioning than presently exists, then, and in such event, the cost of the acquisition, installation, maintenance and usage costs of any supplementary air conditioning for all or any part of the Leased Premises shall be at Tenant’s sole cost and expense with all specifications, plans and contractor(s) requiring prior approval of Landlord. The additional electricity utility costs required for such supplementary air conditioning

 

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shall be separately metered by existing utility meters and billed solely to Tenant.

 

B.                                    Tenant shall pay, as Additional Rent, a charge of $65.00 per hour for each hour Landlord provides, at Tenant’s request, heat or air-conditioning, other than during the hours and on the days set forth above, which payment shall not be a credit to Tenant in calculating the Cost of Operation and Maintenance pursuant to Section 13.

 

C.                                    Cleaning shall be provided by Landlord through Landlord’s employees or independent contractors, in accordance with Schedule “G” attached hereto.

 

D.                                    Fully automatic passenger elevator service shall be provided for the use of all tenants and the general public for access to and from all floors of the Building.

 

E.                                    Elevator service for freight shall be supplied in conjunction with service to other tenants at reasonable times during business hours and at other times at reasonable charges by management in advance.

 

F.                                     Hot and cold water for normal public lavatory purposes only shall be provided. If the Tenant requires water for any additional purposes (including, but not limited to, private lavatory, kitchen and the like). Tenant shall pay the cost thereof as shown on a meter to be installed and maintained at Tenant’s expense to measure such additional consumption.

 

G.                                   Tenant shall be responsible for the electric energy which is required in the Leased Premises and shall pay the sum of $2.20 per square foot per year payable as Additional Rent in equal and successive monthly installments of $684.93. If at any time or times after the date of this Lease, the rates at which Landlord purchases electrical energy from the public utility corporation supplying electrical service to the Leased Premises or to the Building, or any charges incurred or taxes payable by Landlord in connection therewith, shall be increased or Tenant’s use of electricity shall materially increase, the electrical charge shall be increased upon Landlord’s demand in an annual amount which shall fairly reflect the estimated increase in the annual cost to Landlord of furnishing electrical service to Tenant under the provisions of this Lease. If within fifteen (15) days after any such demand Landlord and Tenant shall fail to agree upon the amount of such increase in the electrical charge, then, in lieu of such agreement, the estimated increase in the annual cost to Landlord of furnishing electrical service to Tenant under the provisions of this Lease shall be finally determined by an independent electrical engineer selected by Landlord, who shall certify such determination in writing to Landlord and Tenant. Landlord’s selection of an independent electrical engineer shall be subject to Tenant’s approval, which shall not be unreasonably withheld or delayed. If Tenant does not disapprove or consent to Landlord’s selection of an engineer within fifteen (15) days, such selection shall be deemed approved. The cost of such consultant shall be paid by Tenant. Following any such agreement or determination. Landlord and Tenant shall enter into a written supplementary agreement, in form satisfactory to Landlord, modifying this Lease by increasing the electrical charge for the remainder of the Term in an annual amount equal to such estimated increase in the annual cost to Landlord of furnishing electrical service to Tenant, as so agreed or determined. Any such increase in the electrical charge shall be effective as of the date of such demand and or inspection and survey and shall be retroactive to such date if necessary. Landlord reserves the right to install, at Landlord’s sole cost and expense, a sub-meter in the Leased Premises.

 

H.                                   Landlord shall not be liable in any way to Tenant for any failure or defect in the supply or character of electric energy furnished on the Leased Premises by reason of any requirement, act or omission of the public

 

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utility serving the Building with electricity. Tenant’s use of electric energy in the Leased Premises shall not at any time exceed the capacity of any of the electric conductors and equipment in or otherwise serving the Leased Premises. In order to insure that such capacity is not exceeded and to avert possible adverse effect upon the Building electric service, Tenant shall not, without Landlord’s prior written consent in each instance, connect to the Building electric distribution system any fixtures, appliances or equipment other than (i) copy machines, (ii) lamps, (iii) typewriters and similar small office machines which operate on a voltage not in excess of 110 or make any alterations or additions to the electric systems of the Leased Premises. Should Landlord grant such consent, all additional risers or other equipment required therefore shall be provided by Landlord and the reasonable cost thereof shall be paid by Tenant upon Landlord’s demand. As a condition to granting such consent. Landlord may require Tenant (i) to agree to an increase in the Annual Fixed Rent in an amount equivalent to the cost of the additional energy to be furnished to Tenant, or (ii) to cause a separate electric meter to be installed for the Leased Premises at Tenant’s sole cost and expense and to pay to Landlord, at rates as then payable to the public utility company supplying service to the Building, for all electricity consumed in the Leased Premises (without any adjustment in the Annual Fixed Rent by reason of such costs or expenses or installation or such payments).

 

I.                                        Landlord shall furnish and install at Tenant’s expense all replacement lighting tubes, lamps, bulbs, and ballasts required in the Leased Premises.

 

15.             Interruption in Operations or Services.

 

A.                                    In case there is any interruption in the furnishing of any operation or service as set forth in Section 14 herein. Landlord shall not be liable to Tenant therefor, nor shall Tenant be entitled to any abatement or reduction in Rent by reason thereof, nor shall the same give rise to a claim in Tenant’s favour that such constitutes actual or constructive total or partial eviction.

 

B.                                    Landlord reserves the right to stop any operation or service when necessary by reason of accident or emergency, or until necessary repairs have been completed, provided, however, that in each instance of stoppage. Landlord shall exercise reasonable diligence to eliminate the cause thereof. Except in case of emergency repairs, Landlord will give Tenant reasonable advance notice of any contemplated stoppage and will use reasonable efforts to avoid unnecessary inconvenience to Tenant by reason thereof.

 

16.             Repairs.

 

A.                                    Landlord, at its expense, will make, or cause to be made structural repairs to exterior walls, structural columns and structural floors which collectively enclose the Leased Premises (excluding, however, all doors, door frames, windows and glass) and the roof over the Leased Premises: provided Tenant shall give Landlord notice of the necessity for such repairs and provided that the necessity for such repairs shall not have arisen from nor shall have been caused by the negligence or willful acts of Tenant, its agents, concessionaires, officers, employees, licensees, invitees or contractors, and the like.

 

B.                                    All repairs to the Leased Premises or any installations, equipment or facilities therein, other than those repairs required to be made by Landlord pursuant to Section 16 A or Section 25, shall be made by Tenant at its expense. (As set forth in Section 13, Landlord shall cause certain repairs and maintenance to be done, on Tenant’s behalf and as Tenant’s agent, for which Tenant shall remain responsible and for which Tenant shall pay, as provided in Section 13). Without limiting the generality of the foregoing,

 

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Tenant shall keep the interior of the Leased Premises, together with all electrical, plumbing and other mechanical installations therein (other than items to be repaired by Landlord pursuant to Sections 13 and 16A), in good order and repair and shall make all replacements from time to time required thereto at its expense: Tenant will not overload the electrical wiring serving the Leased Premises or within the Leased Premises, and will install at its expense, subject to the provisions of Section 14, any additional electrical wiring which may be required in connection with Tenant’s apparatus. Any damage or injury sustained by any person because of mechanical, electrical, plumbing or any other equipment or installations whose maintenance, repair or cost shall be the responsibility of Tenant, shall be paid for by Tenant, and Tenant shall indemnify and hold Landlord harmless from and against all claims, actions, damages and liability in connection therewith, including but not limited to, attorneys’ and other professional fees, and any other costs which Landlord might reasonably incur (as Additional Rent).

 

C.                                    Tenant shall repair promptly, at its expense, any damage to the Leased Premises, and, upon demand, shall reimburse Landlord (as Additional Rent) for the cost of the repair of any damage elsewhere in the Building, caused by bringing into the Leased Premises any property for Tenant’s use, or by the installation or removal of such property regardless of fault or by whom such damage shall be caused (unless caused by Landlord, its agents, employees or contractors), and in default of such repairs by Tenant, at the expiration of five (5) days after notice to Tenant, Landlord may make or cause the same to be made and Tenant agrees to pay to Landlord promptly upon Landlord’s demand, as Additional Rent, the cost thereof with interest thereon at the Default Rate until paid.

 

D.                                    Tenant shall be responsible for and shall pay to Landlord, upon demand and as Additional Rent, all reasonable attorneys’, architectural, engineering and other professional fees and expenses incurred with respect to any and all review and approval regarding Tenant’s repairs to the Leased Premises including, but not limited to, Landlord’s in-house professionals and staff.

 

E.                                    Landlord shall not be liable by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations, additions or improvements in or to the Leased Premises or the Building or to any appurtenances or equipment therein. There shall be no abatement of Rent because of such repairs, alterations, additions or improvements.

 

F.                                     Landlord reserves the right at any time and from time to time to:

 

(i)                                     Make or permit changes in or revisions to the Palmer Square and Retail Center Area, including without limitation, additions to, subtractions from, rearrangements of, alterations of, modifications of or supplements to the building areas, walkways, parking areas, driveways or other Common Areas; and

 

(ii)                                  Construct other buildings or improvements in the Palmer Square and Retail Center Area and to make alterations thereof or additions thereto and to build additional stories on any such building or buildings and to build adjoining stories on any such building or buildings and to build adjoining same; and

 

(iii)                               Make or permit changes or revisions to the Building Complex, including additions and alterations thereto; and

 

(iv)                              Convey portions of the Palmer Square and Retail Center Area to others for the purpose of constructing thereon other buildings or improvements, including additions thereto and alterations thereof; provided, however, that no such changes, rearrangements or other

 

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construction shall reduce the parking area provided by Landlord below the number of parking spaces required by law to be provided for the Palmer Square and Retail Center Area.

 

G.                                   Landlord shall have the exclusive right to use all or any part of the roof of the Leased Premises for any purpose; to erect additional stories or other structures over all or any part of the Leased Premises; to erect in connection with the construction thereof temporary scaffolds and other aids to construction on the exterior of the Leased Premises, provided that access to the Leased Premises shall not be denied; and to install, maintain, use, repair and replace within the Leased Premises pipes, ducts, conduits, wires and all other mechanical equipment serving other parts of the Palmer Square and Retail Center Area, the same to be in a location within the Leased Premises as will not unreasonably deny Tenant’s use thereof. Landlord may make any use it desires of the side or rear walls of the Leased Premises, provided that such use shall not encroach on the interior of the Leased Premises. Landlord shall use its best efforts so that all of the foregoing does not materially and adversely interfere with access to the Leased Premises. If Tenant is denied access for more than five (5) consecutive business days, and provided said has not been caused by Tenant, its agents, employees, contractors, subcontractors, or invitees, then, and in such event, Tenant’s obligation to pay Annual Fixed Rent shall abate for such period of time as Tenant is denied access.

 

17.          Relocation of Tenant. Landlord, at its sole expense, on at least ninety (90) days prior written notice, may require Tenant to move from the Leased Premises to another location of comparable size and decor in the Building in order to permit Landlord to consolidate the Leased Premises with other space leased or to be leased to another tenant provided, however, Tenant, by written notice to Landlord within thirty (30) days after the receipt of any such notice from Landlord, may elect not to move to the other space and in lieu thereof may terminate this Lease. In the event of any such relocation. Landlord will pay all the expenses of preparing and decorating the new premises so that it will be substantially similar to the Leased Premises and the expense of moving Tenant’s furniture and equipment to the relocated premises. From and after the date of such relocation, if the relocated space contains fewer square feet than the Leased Premises, then the Annual Fixed Rent specified in Section I hereof shall be reduced accordingly, but under no circumstances shall the Annual Fixed Rent be increased.

 

18.          Quiet Enjoyment. Tenant, upon paving the Annual Fixed Rent and all Additional Rent (Rent) herein provided for and, upon observing, keeping and performing all covenants, agreements and conditions of this Lease on Tenant’s part to be observed, kept and performed, shall quietly have and enjoy the Leased Premises throughout the Term of this Lease without hindrance or molestation by Landlord or by anyone claiming by, through or under Landlord, subject, however, to the exceptions, reservations and conditions of this Lease.

 

19.          Landlord’s Right of Entry. Landlord shall have the right to enter the Leased Premises upon reasonable notice to Tenant (except in case of emergency) to perform Landlord’s covenants as set forth in this Lease, to inspect and to insure Tenant’s compliance with the provisions of this Lease, to make any repairs, replacements or alterations to the Leased Premises or to the Building or to do any work which Landlord may deem necessary, to show the Leased Premises to prospective purchasers, and also, during the last six (6) months of the Lease Term, to show the Leased Premises to prospective Tenants.

 

20.          Surrender of Leased Premises. On the last day or sooner termination of the Term. Tenant shall quit and surrender the Leased Premises broom clean, in good condition and repair (reasonable wear and tear and damage by Acts of God, fire extended coverage perils excepted), together with all alterations, additions and improvements which may have been made in, on or to the Leased Premises, except moveable furniture or unattached moveable trade fixtures put in at the sole expense of Tenant; provided, however, that Tenant shall ascertain from Landlord at least thirty (30) days before the end of the Term, whether Landlord desires to have the Leased Premises or any part thereof restored to the condition in which it was originally delivered to Tenant and, if Landlord shall so desire, then Tenant, at its cost and expense, on or before the end of the Term, shall remove from the Leased Premises all of its property, together with any alterations, additions and improvements, the removal of which is requested by

 

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Landlord, and any or all of such property not so removed shall, at Landlord’s option, become the exclusive property of Landlord or be disposed of by Landlord, at Tenant’s sole cost and expense, without further notice to or demand upon Tenant. If the Leased Premises be not surrendered as and when aforesaid. Tenant shall indemnify Landlord against loss or liability resulting from the delay by Tenant in so surrendering the Leased Premises including, without limitation, the claims made by any succeeding occupant founded on such delay. Notwithstanding the foregoing, at the time Tenant requests Landlord’s consent for alterations, additions and improvements. Tenant may request that Landlord advise Tenant at the time of said request for consent if restoration of the Premises, at Tenant’s sole cost and expense, shall be required at the end of the Term. Tenant’s obligation under this Section shall survive the expiration or sooner termination of the Term.

 

21.          Miscellaneous Covenants. Tenant shall faithfully perform all of the covenants and conditions to be performed and observed by Tenant hereunder and, in addition to those covenants and conditions which are set forth elsewhere herein. Tenant agrees:

 

A.                                    To secure and maintain in effect any governmental approvals, licenses and permits as may be required for Tenant’s use and occupancy of the Leased Premises.

 

B.                                    Not to place, erect, maintain or display any sign or other marking of any kind whatsoever on the exterior surface of the walls of the Leased Premises or on any door which faces any common corridor or hallway (other than a sign identifying Tenant which Landlord shall supply), without the prior written approval of the Landlord, and not to install nor replace any entrance door or other door facing on any common corridor or hallway other than the standard door supplied by Landlord without the prior written approval of Landlord.

 

C.                                    Not to use or place any curtains, blinds, drapes, coverings or signs over any exterior windows or upon the window surfaces as would be visible from the outside of the Building without the prior written approval of Landlord.

 

D.                                    Without the prior written consent of Landlord, not to place within the Leased Premises nor bring into the Building any machinery, equipment or other personalty other than customary office furnishings, copying machines and small machinery such as typewriters and other similar items of office equipment, not bring into the Leased Premises nor permit to remain there any item of equipment or machinery or other personalty having a weight in excess of the floor bearing capacity reasonably determined by Landlord; and in the event Tenant does place or bring in machinery, equipment or personalty other than that provided for above. Landlord may require Tenant to pay all costs of all structural and other alterations, changes or additions required to be made to the Leased Premises and Building, in the sole judgment of Landlord, for the safe support of such machinery, equipment or personalty, together with all costs of engineering or other studies required in the sole judgment of Landlord, to determine the required structural and other alterations, changes or additions.

 

E.                                    To keep the Leased Premises in good order, condition and repair, reasonable wear and tear excepted, making all repairs and replacements of whatever nature as may be required in order to do so.

 

F.                                     No X-ray, nuclear or other radiation type equipment or materials shall be used or stored in or about the Leased Premises, the Building or the common areas unless all municipal, state and federal laws, rules and regulations applicable to the use and/or storage of such equipment or materials have been complied with and the Leased Premises or other place where such equipment or materials are to be used or stored has been provided with such shielding as may be necessary to prevent any harmful

 

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radiation or penetration beyond the confines of the Leased Premises or other place.

 

G.                                   Tenant shall not contract for any work or service which might involve the employment of labour incompatible with the employees of the Building Complex, Palmer Square, Palmer Square North, Palmer Square East or Palmer Square West Areas, including, but not limited to all retail, office, restaurant, hotel, residential and common areas (hereinafter collectively) referred to as “Palmer Square”) or with employees or subcontractors of contractors doing work or performing services by or on behalf of the Landlord, or tenants or other owners of property in Palmer Square. Tenant shall not perform or omit to perform any act, or permit any party with whom Tenant has contracted for work or service in or about Palmer Square, to perform or omit to perform any act which constitutes an unfair labour practice, or which shall create or prolong any labour dispute, or which shall cause a disruption in the operation of Palmer Square, or discourage the passage of customers or business invitees to and from Palmer Square or otherwise interfere with the beneficial use and enjoyment of the space leased to, occupied by or being improved or constructed by any other tenant of Palmer Square or Landlord or other owners of property in Palmer Square.

 

22.          Rules and Regulations. Tenant covenants and agrees that Tenant, its employees, agents, servants, invitees, licensees, contractors, and the like, shall observe faithfully and comply strictly with, the Rules and Regulations contained in Schedule “H” attached and made a part hereof, and such other and further reasonable Rules and Regulations as Landlord or Landlord’s agents may, after notice to Tenant, from time to time adopt. Nothing in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations or terms, covenants or conditions in any other lease as against any other tenant, and Landlord shall not be liable to Tenant for violation of the same by any other tenant or such tenant’s servants, employees, agents, invitees, licensees, contractors and the like.

 

23.          Performance of Tenant’s Covenants. If Tenant fails to perform any covenant or observe any condition to be performed or observed by Tenant hereunder or acts in violation of any covenant or condition hereof and, except with respect to covenants regarding the payment of Annual Fixed Rent or Additional Rent (any other sums due under this Lease), after Tenant having received notice from Landlord of such default, so long as Tenant is not proceeding diligently to correct or cure such default. Landlord may, but shall not be required on behalf of Tenant, perform such covenant and/or take such steps, including entering upon the Leased Premises, as may be necessary or appropriate to meet the requirements of any such covenant or condition, provided that Landlord shall have given Tenant at least ten (10) days prior notice of Landlord’s intention to do so, unless an emergency situation exists in which case Landlord shall have the right to proceed immediately: and all costs and expenses incurred by Landlord in so doing, including, without limitation, reasonable attorneys’ and other professional fees and expenses, shall be paid by Tenant to Landlord upon demand, plus interest at the Default Rate from the date of expenditure(s) by Landlord, as Additional Rent. Landlord’s proceeding under the rights reserved to Landlord under this Section shall not in any way prejudice or waive any rights as Landlord might otherwise have against Tenant by reason of Tenant’s default.

 

24.          Eminent Domain.

 

A.                                    In the event of exercise of the power of eminent domain whereby (i) such portion of the Building is taken that access to the Leased Premises is permanently impaired thereby and reasonably alternate access is not promptly provided by Landlord or (ii) all or substantially all of the Leased Premises or the Building is taken, or (iii) if less than substantially all of the Building is taken but Landlord, acting in good faith, determines that it is economically unfeasible to continue to operate the uncondemned portion as a first-class office building, then in the case of (i) or (ii), either party and in the case of (iii). Landlord shall have the right to terminate this Lease as of the date when possession of that part which was taken is required to be delivered or surrendered to the condemning authority; and in such case all Rent and other charges shall be adjusted to the date of

 

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termination. The foregoing right of termination shall be applicable to the taking of any estate or interest whatsoever which, as a matter of law, would deprive the Landlord or Tenant of the right to possession (in common with others, as to common areas of the Building) for any period in excess of ninety (90) days from the date of taking, whether or not the taking be in fee for a term of years or of any other estate or interest; and a taking shall include the transfer of title or of any interest in the Building by deed or other instrument in settlement of or in lieu of transfer by operation of law incident to condemnation proceedings.

 

B.                                    Tenant shall have no right to participate nor share in any condemnation claim, damage award or settlement in lieu thereof with respect to any taking of any nature; provided, however, that Tenant shall not be precluded from claiming or receiving payment for Tenant’s relocation and moving expenses as may be permitted under applicable law so long as the amount of same is not subtracted from the award which Landlord is entitled to receive.

 

25.          Casualty Damage.

 

A.                                    In the event of damage to or destruction of the Leased Premises caused by fire or other casualty, or of the entrances and other common facilities necessary to provide normal access to the Leased Premises or to other portions of the Building or its equipment, which portions and equipment are necessary to provide services to the Leased Premises in accordance herewith, provided not caused by or attributable to any act or omission of Tenant, its servants, employees, agents, invitees, contractors, and the like, Landlord shall undertake to make repairs and restorations as hereafter provided unless this Lease be terminated by Landlord.

 

B.                                    If the Leased Premises shall be totally damaged or rendered wholly untenantable by fire or other casualty or if the Building shall be so damaged by fire or other casualty that substantial alteration or reconstruction of the Building shall, in Landlord’s opinion, be required (whether or not the Leased Premises shall have been damaged by such fire or other casualty), then in any of such events Landlord may, at its option, terminate this Lease by giving Tenant thirty (30) days notice of such termination, which notice shall be given within ninety (90) days after the date of such damage.

 

C.                                    If the damage is of such nature or extent, in Landlord’s sole judgment, that more than one hundred eighty (180) consecutive days, after commencement of the work, would be required (with normal work crews and hours) to repair and restore the part of the Leased Premises or Building which has been damaged. Landlord shall so advise Tenant within a reasonable time after said determination, and either party, for a period of ten (10) days thereafter, shall have the right to terminate this Lease by notice to the other, as of the date specified in such notice, which termination date shall be no later than thirty (30) days after the date of such notice.

 

D.                                    In the case of damage to the Leased Premises not caused by the negligence or other tortious acts of Tenant, its agents, employees, contractors, invitees or licensees, or the like, which is of a nature or extent that Tenant’s continued occupancy is substantially impaired, the Annual Fixed Rent otherwise payable by Tenant hereunder shall be equitably abated or adjusted for the duration of such impairment, after and if such continues for thirty (30) continuous business days.

 

E.                                    In connection with the foregoing. Landlord, if Landlord elects to repair and restore, shall restore the Leased Premises to substantially its condition prior to the occurrence of the damage, provided that Landlord shall not be obligated to repair or restore any alterations, additions or fixtures which

 

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Tenant may have installed (whether or not Tenant has the right or the obligation to remove the same or is required to leave the same on the Leased Premises as of the expiration or earlier termination of the Lease) unless Tenant, in a manner satisfactory to Landlord, assures payment in full of all costs as may be incurred by Landlord in connection therewith. If there be any such alterations, fixtures or additions and Tenant does not assure or agree to assure payment of the cost of restoration or repair as aforesaid, Landlord shall have the right to determine the manner in which the Leased Premises shall be restored so as to be substantially as the Leased Premises existed prior to the damage occurring, as if such alterations, additions or fixtures had not then been made or installed.

 

F.                                     Anything to the contrary in this Lease notwithstanding, expressed or implied. Landlord shall have no liability to Tenant for and shall have no duty to repair, replace or restore any damage whatsoever to Tenant’s personal property or Tenant’s alterations occurring as a result of fire or other casualty or leakage or seepage of water or any other liquid from any source whatsoever, or breakage of any pipes, mains or other plumbing located in or about the Building, or snow, frost, steam, excessive heat or cold, falling plaster, sewage, gas, odors, noise, or by air conditioning or heating apparatus. Furthermore Landlord has no obligation to repair or restore in event of casualty or damage caused by an event which is uninsured or for which payment will not be made by an insurance company.

 

26.          Brokerage. Tenant represents that in the negotiation of this Lease it dealt with no real estate broker or salesman except Triad Properties LLC. Tenant hereby agrees to indemnify Landlord and hold it harmless from any and all losses, damages and expenses arising out of any inaccuracy or alleged inaccuracy of the above representation, including court costs and attorneys’ fees. Landlord shall have no liability for brokerage commissions arising out of a sublease by Tenant and Tenant shall and does hereby indemnify Landlord and hold Landlord harmless from any and all liability for brokerage commissions arising out of any such sublease. Landlord shall pay the commissions of Triad Properties LLC pursuant to separate agreement.

 

27.          Advance Rent and Security Deposit.

 

A.                                    Landlord acknowledges receipt from Tenant of the Advance Rent ($12,453.33), which shall be paid upon execution of the within Lease by Tenant, and shall be held by Landlord as security for the performance by Tenant of all obligations imposed under this Lease which Tenant is required to perform prior to the commencement of the Term. If such sum is not paid within three (3) days of Tenant’s execution of this Lease, Landlord shall have the option to terminate this Lease without any liability to Tenant. Upon commencement of the Term, said Advance Rent shall be applied towards Tenant’s first monthly installment of Annual Fixed Rent.

 

B.                                    Upon execution of the within Lease. Tenant shall deposit with Landlord the sum of $49,813.32 (the “Security Deposit”) which sum equals four (4) months’ Annual Fixed Rent under this Lease, as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease. In the event that Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including without limitation, the payment of Fixed Rent and Additional Rent. Landlord may use apply or retain the whole or any part of the Security Deposit to the extent required for the payment of any Fixed Rent, Additional Rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including, without limitation, all reasonable attorneys’ and other professional fees and expenses and any damages or deficiency in reletting the Leased Premises accrued before or after any summary proceedings or other re-entry by Landlord.

 

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C.                                    In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the Security Deposit except as same may have been applied by Landlord in accordance with this Lease, shall be returned to Tenant within forty-five (45) days after the Expiration Date or such earlier termination date of this Lease, provided such earlier termination is not due to Tenant’s default, and after Tenant has delivered entire possession of the Leased Premises to Landlord in accordance with all of the terms and provisions of this Lease.

 

D.                                    Tenant agrees that in the event Landlord applies any portion of the Security Deposit in accordance with the provisions of this Lease. Tenant shall immediately upon demand of Landlord reimburse or pay Landlord for the amount of the Security Deposit so applied or for the increase in Fixed Rent so that the amount constituting the Security Deposit during the Term of this Lease shall always be equal to four (4) months’ Annual Fixed Rent.

 

E.                                    In the event of a sale of the Building or leasing of the Building, or of the portion of the Building in which the Leased Premises is located. Landlord shall have the right to transfer the Security Deposit to the vendee or lessee and Landlord shall thereupon be released by Tenant from all liability for the return of the Security Deposit, and Tenant agrees to look, solely to the new Landlord for the return of the Security Deposit and it is agreed that the provisions hereof shall apply to every transfer or assignment made of the Security Deposit to a new Landlord.

 

F.                                     Tenant further agrees that it will not assign or encumber or attempt to assign or encumber the monies constituting the Security Deposit and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance or attempted assignment or encumbrance.

 

28.          Mortgagee and Other Agreements.

 

A.                                    In the event any person, firm, corporation or other entity who is a party to any instrument to which this Lease is subject or subordinate including, but not limited to, the Lease Agreement referred to in Section 33, and any mortgage now or hereafter placed upon the Building or parcel of land on which it is erected or on any interest created therein) or their successor(s), succeed thereunder to the interest of the Landlord hereunder in the Building or parcel of land on which it is erected or acquires the right to possession of the Building or parcel of land on which it is erected, such person, firm, corporation or other entity shall not be (i) liable for any act or omission of the party named above as Landlord under this Lease; (ii) liable for the performance of Landlord’s covenants hereunder which arise and accrue prior to such person, firm, corporation or other entity succeeding to the interest of Landlord hereunder or acquiring such right to possession; (iii) subject to any offsets or defenses which Tenant may have at any time against Landlord; (iv) bound by any Rent which the Tenant may have paid previously for more than one month; and (v) in the event the unexpired Term of this Lease exceeds three (3) years at the time of such succession or acquisition of the right to possession, shall not be bound by any amendment or modification hereof relating to the reduction of Rent, shortening of Term, or effecting a cancellation or surrender hereof and made without the consent of such person, firm, corporation or other entity.

 

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B.                                    Tenant agrees, from time to time as may be requested by Landlord, to execute, acknowledge and deliver to Landlord all or any of the following; an agreement to recognize and attorn to any mortgagee or party holding a similar encumbrance now or hereafter placed on the Leased Premises, or any part thereof; an agreement certifying to such party as the Landlord reasonably may designate, including any mortgagee, that this Lease is in full force and effect and that Tenant has no defense, offsets or counterclaims hereunder or otherwise against Landlord with respect to this Lease or the Leased Premises (or if any of the foregoing not be the case, specifying in reasonable detail the extent and nature thereof) and the date to which Rent has been paid: and any other instrument as may be reasonably requested to be executed by Tenant by any mortgagee of the parcel of land, Building or any interest therein, so long as the rights of Tenant as provided for by this Lease are not materially affected by any such other instrument.

 

C.                                    Notwithstanding the execution and delivery of the within Lease Agreement by Landlord, this Lease, and the respective rights and obligations of Landlord and Tenant hereunder, are expressly subject to the approval of all of the terms and provisions of this Lease by Landlord’s interim and permanent lenders.

 

29.          Subordination.

 

A.                                    This Lease and the estate, interests and rights hereby created are subordinate to any mortgage now or hereafter placed upon the said parcel of land, the Building or any interest therein including, without limitation, any mortgage on any leasehold estate and subordinate to all renewals, modifications, consolidations, replacements and extensions of same as well as any substitutions thereof.

 

B.                                    In the event that a bona fide institutional lender shall request reasonable modifications in this Lease, as a condition of providing Landlord with financing for the construction of any alterations or improvements of the Leased Premises. Building, Palmer Square and Retail Center Area, then Tenant shall not unreasonably withhold or delay its written consent to such modifications provided that same do not materially increase the obligations of Tenant hereunder or materially adversely affect either the leasehold interest hereby created or Tenant’s use and enjoyment of the Leased Premises.

 

C.                                    Tenant, if requested by landlord, shall execute any such instruments in recordable form as may be reasonably required by Landlord in order to confirm or effect the subordination of this Lease in accordance with the terms of this Section and any other Section herein; and agrees that in the event any person, firm, corporation or other entity acquires the right to possession of the land and the Building free of the leasehold interest of the Landlord aforesaid, including any mortgagee or holder of any estate or interest having priority over this Lease. Tenant shall, if requested by such person, firm, corporation or other entity, attorn to and become the Tenant of such person, firm, corporation or other entity upon the same terms and conditions as are set forth herein for the balance of the Lease Term hereof.

 

D.                                    Tenant agrees to give any mortgagee of Landlord, by certified mail, return receipt requested, a copy of any notice of default served upon Landlord, provided that prior to such notice Tenant has been notified of the address of such mortgagee. Tenant further agrees that if Landlord shall fail to cure such default within the time allowed by this Lease, then such mortgagee shall have an additional thirty (30) days within which to cure such default (but shall in no event be obligated to cure such default), or if such default cannot be cured within that time, then such additional time as may be necessary if within such thirty (30) days such mortgagee has commenced and diligently pursued the remedies necessary to cure such default in

 

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which event Tenant shall continue to be bound by the terms of this Lease while such remedies are being so diligently pursued.

 

30.          Assignment and Subletting.

 

A.                                    Tenant shall not assign this Lease, in whole or in part, nor sublet all or any part of the Leased Premises, nor license concessions or lease departments therein, without first obtaining the written consent of Landlord, which consent may be withheld in the sole and absolute discretion of Landlord. This prohibition includes any subletting or assignment which would otherwise occur by operation of law, merger, consolidation, reorganization, transfer or other change of Tenant’s corporate or proprietary structure, or an assignment, subletting to or by a receiver or trustee in any federal or state bankruptcy, insolvency, or other proceedings. Consent by Landlord to any assignment or subletting shall not constitute a waiver of any obligation of the Tenant to Landlord (it being understood that Tenant shall remain liable notwithstanding any assignment or subletting) nor shall consent by the Landlord constitute a waiver of the requirement for such consent to any subsequent assignment or subletting.

 

B.                                    Notwithstanding subparagraph A above, if this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code. 11 U.S.C.. § 101 et seq. (the “Bankruptcy Code”), any and all monies or other considerations payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Landlord and shall be and remain the exclusive property of Landlord or of the estate of Landlord within the meaning of the Bankruptcy Code. Any and all monies or other considerations constituting Landlord’s property under the preceding sentence not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and be promptly paid or delivered to Landlord.

 

C.                                    If Tenant is a corporation or partnership (other than a corporation, the outstanding voting stock of which is listed on a “national securities exchange”, as defined in the Securities Exchange Act of 1934) and at any time after the execution of this Lease any part or all of the corporate or partnership shares of interest shall be transferred by sale, assignment, bequest, inheritance, operation of law or other disposition (including such a transfer to or by a receiver or trustee in federal or state bankruptcy, insolvency, or other proceedings) so as to result in a change in the present control of said corporation or partnership by the person or persons now owning a majority of said corporate or partnership shares or interest. Tenant shall give Landlord notice of such event within fifteen (15) days from the date of such transfer. In such event and whether or not Tenant has given such notice. Landlord may elect to terminate this Lease, at any time thereafter, by giving Tenant notice of such election, in which event this Lease and the rights and obligations of the parties hereunder, shall cease as of a date set forth in such notice which date shall not be less than sixty 60 days after the date of such notice. In the event of any such termination, all Rent (other than any Additional Rent due Landlord resulting from Tenant’s failure to perform any of its obligations hereunder) shall be adjusted as of the date of such termination.

 

D.                                    The acceptance by Landlord of the payment of Rent following any assignment or other transfer prohibited by this Section shall not be deemed to be a consent by Landlord to any such assignment or other transfer nor

 

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shall the same be deemed to be a waiver of any rights or remedy of Landlord hereunder.

 

E.                                    In the event that Landlord consents to a subletting of the Leased Premises, or any assignment of this Lease by Tenant. Landlord shall be entitled to recapture and receive payment from Tenant of any profit realized by Tenant from assignment of the Lease or subletting of the Leased Premises at a Rent greater than the Rent reserved hereunder. Tenant shall pay am such profit to Landlord promptly upon its receipt by Tenant, whether it is received in monthly or other periodic payments or in a lump sum. For purposes of this Section “profit” shall refer to the difference between: (i) all payments made by a subtenant or assignee to Tenant as Rent or otherwise under or in connection with said assignment or sublease: and (ii) the costs and expenses paid by Tenant in connection with said assignment or sublease including the Annual Fixed Rent and Additional Rent payable hereunder with respect to the assigned or sublet space and the reasonable brokerage, legal and alteration expenses, if any, incurred in connection with said assignment or sublease, calculated as if amortized over the Lease Term. Promptly after the commencement of any such assignment or sublease Tenant shall deliver to Landlord a statement of the expenses incurred in connection with the assignment or subletting and payments of the profit in connection therewith shall be made monthly as Additional Rent hereunder.

 

F.                                     Notwithstanding the foregoing. Landlord shall not unreasonably withhold its consent to an assignment or subletting of the Leased Premises, or any portion thereof, subject to compliance with all of the conditions enumerated below:

 

(i)                                     The transferee shall use the Leased Premises only for the Permitted Use; and

 

(ii)                                  Any such assignee/subtenant shall have had substantial business experience, shall be of a character and reputation which is in keeping with the reputation of Tenant and the reputation of Palmer Square as a location for an outstanding business occupancy, and shall be financially credit-worthy and qualified to carry on such business in the Leased Premises: and

 

(iii)                               The present Tenant shall remain fully and completely liable for the performance of all of the terms, covenants, conditions and provisions of the Lease and Schedules on the part of Tenant to be observed and performed: and

 

(iv)                              Any such assignment/subletting shall be subject to all other terms of the Lease specifically applicable to assignments sublets: and

 

(v)                                 Tenant shall provide Landlord with not less than thirty (30) days prior written notice of its intention to assign the Lease or to sublet the Premises and, with such notice, provide Landlord with all documents and other written information required hereunder: and

 

(vi)                              Tenant shall not be in default of the Lease on both the notice date and the assignment date or the effective date of am proposed subletting: and

 

(vii)                           The proposed assignee/subtenant shall have agreed in writing to observe and perform all of the obligations of the Lease on the part of the Tenant from and after the assignment subletting: and

 

(viii)                        A copy of the assignment/sublease and the original assumption agreement (both in form and content satisfactory to Landlord) fully executed and acknowledged by the assignee/sublessee shall be

 

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delivered to the Landlord not less than ten (10) days prior to the effective date of such assignment/subletting; and

 

(ix)                              Any such assignment/sublease agreement shall contain an express and specific prohibition against any additional assignment or sublease, in whole or in part, by such assignee or sublessee; and no further assignment/sublease shall be permitted other than in accordance with these provisions; and

 

(x)                                 Tenant shall reimburse Landlord for Landlord’s reasonable attorneys’ fees for the examination of and/or preparation of any documents in connection with such assignment/subletting; and

 

(xi)                              Such assignee/subtenant shall not be an affiliate of Landlord or an existing tenant of Landlord nor one with whom Landlord, or any of its affiliates, is negotiating with for space; and

 

(xii)                           Any assignment/subletting by Tenant without first having obtained Landlords written consent shall render said assignment/sublet, at Landlord’s discretion, null and void.

 

31.          Default.

 

A.                                    Any other provisions in this Lease notwithstanding, if (i) Tenant fails to pay any Rent or other sum of money due hereunder when due or (ii) Tenant either fails to initially use and occupy the Leased Premises or subsequently vacates the Leased Premises, or (iii) Tenant fails to observe or perform any of the other Tenant covenants or agreements herein contained, other than a default involving the payment of money, and such failure continues after notice for more than fifteen (15) days and such additional time, if any, as is reasonably necessary to cure such failure, provided that Tenant has diligently commenced to cure and is continuing to prosecute said cure to completion, or (iv) Tenant is in default under Section 31 C. or (v) Tenant makes any assignment for the benefit of creditors, or (vi) Tenant commits an act of bankruptcy or files a petition or commences any proceeding under any bankruptcy or insolvency law. or (vii) a petition is filed or any proceeding is commenced against Tenant under any bankruptcy or insolvency law and such petition or proceeding is not dismissed within thirty (30) days, or (viii) Tenant is adjudicated a bankrupt, or (ix) Tenant by any act indicates its consent to, approval of or acquiescence in. or a court approves, a petition filed or proceeding commenced against Tenant under any bankruptcy or insolvency law. or (x) a receiver or other official is appointed for Tenant or for a substantial part of Tenant’s assets or for Tenant’s interest in this Lease, or (xi) any attachment or execution against a substantial part of Tenant’s assets or of Tenant’s interests in this Lease remains unstayed or undismissed for a period of more than ten (10) days, or (xii) a substantial part of Tenant’s assets or of Tenant’s interest in this Lease is taken by legal process in any action against Tenant, or (xiii) Tenant fails to pay to any federal, state or local agency any taxes claimed by such agency, then, in any such event, Tenant shall be deemed to be in default hereunder, and Landlord may, if the Landlord so elects, at any time thereafter, terminate this Lease and the tenancy created hereby, by giving three (3) days’ notice of such election to Tenant and/or Landlord may re-enter the Leased Premises, by summary proceedings or otherwise, and may remove Tenant and all other persons and property from the Leased Premises, and may store such property in a public warehouse or elsewhere (at the cost of or the account of Tenant) with or without resort to legal process and without Landlord being deemed guilty of trespass or conversion or becoming liable for any loss or damage occasioned thereby or otherwise being liable to prosecution therefor.

 

B.                                    In the event that the relation of the Landlord and Tenant may cease or terminate by reason of the termination of this Lease by Landlord or by

 

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reason of the re-entry of the Landlord under the terms and covenants contained in this Lease or by reason of the summary dispossess or ejectment of the Tenant by summary proceedings, or otherwise, or after the abandonment of the Leased Premises by the Tenant, the Tenant shall remain liable and shall pay in monthly payments the Fixed Rent and Additional Rent which accrues subsequent to the cessation or termination of the relationship of Landlord-Tenant, and the Tenant shall pay as damages for the breach of the covenants contained in this Lease the difference between the Fixed Rent and Additional Rent reserved and the Rent collected and received, if any, by the Landlord, during the remainder of the unexpired Term, such difference or deficiency between the Fixed Rent and the Additional Rent reserved and the Rent collected, if any, shall become due and payable in monthly payments during the remainder of the unexpired Term, as the amounts of such difference or deficiency shall from time to time be ascertained. In the event the Landlord relets the Leased Premises during any such unexpired period of the Tenant’s Lease, for Rent in excess of that due under the within Lease, Landlord need not credit such excess Rent against any unpaid Fixed Rent or Additional Rent owed by the Tenant. In addition, Tenant shall indemnify Landlord during the remaining period before this Lease would otherwise expire against all loss or damage suffered by reason of such default, cessation or termination, including but not limited to, all costs, salaries, fees, commissions and expenses of reletting as well as all reasonable attorneys’ and other professional fees, expenses and costs incurred by Landlord in pursuit of its remedies hereunder.

 

C.                                    If Tenant shall default in the payment of any installment of Rent hereunder, Tenant shall deliver to Landlord within five (5) business days after demand a balance sheet of Tenant as of a date not more than thirty (30) days prior to the first day of the month during which said installment of Rent was due hereunder, certified by Tenant’s President or Chief Financial Officer to present fairly the financial position of Tenant as of the date of such balance sheet. If Tenant fails to deliver its balance sheet in accordance with the provisions of the preceding sentence, Tenant shall be conclusively deemed to be in default under the first sentence of this subparagraph. The obligations of Tenant under this subparagraph are a material obligation of Tenant’s tenancy under this Lease.

 

D.                                    Landlord shall have all rights and remedies now or hereafter existing at law with respect to the enforcement of Tenant’s obligations hereunder and the recovery of the Leased Premises, including without limitation, those set forth in N.J.S.A. 2A:18-53, as amended, and all amendments, modifications and substitutions thereof hereafter enacted. No right or remedy herein conferred upon or reserved to Landlord shall be exclusive of any other right or remedy, but shall be cumulative and in addition to all other rights and remedies given hereunder or now or hereafter existing at law, Landlord shall be entitled to injunctive relief in case of the violation, or attempted violation, of any covenant, agreement, condition or provision f this Lease, or to a decree compelling performance of any covenant, agreement, condition or provision of this Lease.

 

E.                                    Nothing herein contained shall limit or prejudice the right of Landlord by reason of such default to exercise any or all rights or remedies available to Landlord by reason of such default or to prove and obtain in proceedings under any bankruptcy or insolvency laws, an amount equal to the maximum allowed by any law in effect at the time when, and governing the proceedings in which, the damages are to be proven, whether or not the amount be greater, equal to, or less than the amount of the loss of damage referred to above.

 

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32.          Landlord’s Option to Terminate Lease.

 

DELETED PRIOR TO EXECUTION

 

33.          Underlying Leases and Estates. This Lease and the estate, interests and rights hereby created shall be and remain subject and subordinate to any and all underlying agreements, leases or other instruments and to any extension or modifications thereof by virtue of which the Landlord is or may be entitled to possession of the Building and parcel of land on which it is erected.

 

34.          Successors and Assigns. The obligations of this Lease shall be binding upon and inure to the benefit of the parties hereunder and their respective successors and assigns; provided that Landlord, and each successive owner of the Building, shall be liable only for obligations accruing during the period of its ownership or interest.

 

35.          Waivers. No delay or forbearance by Landlord in exercising any right or remedy hereunder or in undertaking or performing any act or matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter.

 

36.          Waiver of Jury Trial and Counterclaim. It is mutually agreed by and between Landlord and Tenant that the respective parties shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties 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 of or occupancy of said Leased Premises and/or any claim of injury or damage and any emergency statutory or any other statutory remedy. It is further mutually agreed that in the event Landlord commences any summary proceeding for non-payment of Rent. Tenant will not interpose any counterclaim or defense in the nature of setoff, of whatever nature or description in any such proceeding. Notwithstanding the foregoing, Tenant shall be permitted to interpose mandatory counterclaim.

 

37.          Severability. Each covenant and agreement in this Lease shall for all purposes be construed to be a separate and independent covenant or agreement. If any provision in this Lease or the application thereof shall to any extent be invalid, illegal or unenforceable, the remainder of this Lease and the application of such provision other than that which is invalid, illegal or unenforceable, shall not be affected thereby: and such provisions in this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

38.          Notices. All notices or other communications required or permitted hereby shall be effective only if the same are in writing and are signed by the party giving the notice or by an agent or other person authorized in writing to so act on behalf of such party. Notices to Tenant may be given by leaving same at the Leased Premises during business hours or by registered or certified mail, return receipt requested; or by a reputable overnight courier, with copies to Bruce M. Cohen, Esquire, Cohen & Frankel LLP, 11 East 44th Street, Suite 1800, New York, New York 10017, and notices to Landlord may be given either by delivery to Landlord at the address stated above or by registered or certified mail, return receipt requested, or by a reputable overnight courier, with copies to Stuart B. Dember, Esquire. Fox Rothschild LLP, 997 Lenox Drive, Building 3, Lawrenceville, New Jersey 08648. All notices shall be deemed given unless specified herein, on the date when the same are delivered, if delivered, or on the date when the same are deposited in the mail.

 

39.          Amendment and Modifications. This writing is intended by the parties as a final expression of their agreement and as a complete and exclusive statement of the terms thereof: all negotiations, considerations and representations between the parties have been incorporated herein. No course of prior dealings between the parties or their officers, employees, agents or affiliates shall be relevant or admissible to supplement, explain, or vary any of the terms of this Lease. Acceptance of, or acquiescence in, a course of performance rendered under this or any prior agreement between the parties or their affiliates shall not be relevant or admissible to determine the meaning of any of the terms of this Lease. No representations, understandings, or agreements have been made or relied upon in the making of this Lease other than those specifically set forth herein. This Lease can be modified only by a writing signed by the party against whom the modification is enforceable.

 

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40.          Bankruptcy.

 

A.                                    In the event that Tenant becomes the subject debtor in a case pending under the Bankruptcy Code or in any Bankruptcy Court or Division, Landlord’s right to terminate this Lease shall be subject to the rights of the Trustee in Bankruptcy to assume or assign this Lease. To the extent permitted or allowed by law, the Trustee shall not have the right to assume or assign this Lease until the Trustee (i) promptly cures all defaults under the Lease, (ii) promptly compensates Landlord for monetary damages incurred as a result of such default, and (iii) provides “adequate assurance of future performance” which shall mean (in addition to any other statutory requirements) that all of the following have been satisfied: (i) in addition to Rent payable under the Lease the Trustee shall establish with Landlord a Security Deposit equal to three (3) months’ Fixed Rent; (ii) maintain said Security Deposit in said amount whenever it is drawn upon by Landlord: (iii) Trustee must agree that Tenant’s business shall be conducted in a first-class manner: (iv) the use of the Leased Premises cannot change. If all the foregoing are not satisfied Tenant shall be deemed not to have provided Landlord with adequate assurance of future performance of this Lease.

 

B.                                    In addition, if Tenant becomes the subject debtor under the Bankruptcy Code or in any Bankruptcy Court or Division, any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, 11 U.S.C., § 101 et seq., shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment. Any such assignee shall, upon demand, execute and deliver to Landlord an instrument confirming such assumption.

 

41.          Industrial Site Recovery Act/Site Remediation Reform Act.

 

A.                                    Tenant shall, at Tenant’s own expense, comply with the Site Remediation Reform Act. N.J.S.A. 58:10C-1. et seq. (“SRRA”) and the Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et seq. (“ISRA”) and any amendments thereto as well as the regulations promulgated thereunder. Tenant shall not, however, have any obligation or liability whatsoever in respect of any spill or discharge of hazardous substances or wastes or any other non-compliance with SRRA and ISRA which is caused by any person other than Tenant. Tenant shall, at Tenant’s own cost and expense, make all submissions to, provide all information to, and comply with all requirements of, the Industrial Site Evaluation Element (“The Element” of the New Jersey Department of Environmental Protection (“NJDEP”). Should the Element or any other division of NJDEP determine that a clean up plan be prepared and that a clean up be undertaken because of any spills or discharges of hazardous substances or wastes at the Premises occurring or arising from Tenant’s use and occupancy, then Tenant shall, at Tenant’s own expense, prepare and submit the required plans and financial assurances, and carry out the approved plans. Tenant’s obligations under this paragraph shall arise if there is any closing, terminating or transferring of Tenant’s operation at the Premises pursuant to SRRA and ISRA or other triggering event by Tenant. At no expense to Landlord, Tenant shall promptly provide all information reasonably requested by Landlord for preparation of any affidavits and required submissions pursuant to SRRA and ISRA, and shall promptly sign such affidavits when reasonably requested by Landlord. Tenant shall indemnify, defend and save harmless Landlord from all fines, suits, procedures, claims and actions of any kind arising out of or in any way connected with any spills or discharges or hazardous substances or wastes at the Premises occurring or arising from Tenant’s use and occupancy, and from all fines, suits, procedures, claims and actions of any kind arising out of Tenant’s failure to comply with this Paragraph. Tenant’s obligations and liabilities under this Paragraph shall continue so long as Landlord

 

30

 

remains responsible for any spills or discharges of hazardous substances or wastes by Tenant at the Premises occurring or arising from Tenant’s use and occupancy. Tenant’s failure to abide by the terms of this Paragraph shall be restrainable by injunction.

 

B.                                    Landlord shall, at Landlord’s own expense, comply with SRRA and ISRA in all instances beyond Tenant’s responsibility as set forth above. To the extent the Element or any other Division of NJDEP requires information from Landlord. Landlord shall promptly provide all information requested. Should the Element or any other Division of NJDEP determine that a clean up plan be prepared and that a clean up be undertaken because of any spills or discharges of hazardous substances or waste at the Premises, by any party other than Tenant, then and in such case. Tenant shall not be responsible and the party who is responsible. Landlord, other tenant or other party, shall, at its own expense prepare and submit required plans and financial assurances and carry out the approved plans. Landlord shall indemnify, defend and save harmless Tenant from all fines, suits, procedures, claims and actions of any kind arising out of or any way connected with any spillages, discharges of hazardous substances or waste or other action by Landlord at the Premises and not occurring or arising from Tenant’s use and occupancy, and from all fines, suits, procedures, claims and actions of any kind arising out of Landlord’s failure to comply with this Paragraph. Landlord’s obligations under this Paragraph shall survive the expiration or termination of this Lease. Landlord’s failure to abide by the terms of this Paragraph shall be restrainable by injunction.

 

C.                                    In the event any of the foregoing Tenant’s obligations have not been complied with, then and in such event. Tenant shall be responsible to continue to pay monthly Base Rental and all Additional Rental until said NJDEP approval is delivered to Landlord, notwithstanding Tenant may not be in possession. The monthly Base Rental Tenant shall be required to pay hereunder shall be double the Base Rental for the last month of the Term.

 

D.                                    In the event that Landlord shall require from Tenant information and evidence of Tenant’s North American Industry System Code (“NAICS”), the nature of Tenant’s business being operated upon the Leased Premises, the use Tenant made of the Leased Premises or like information to be submitted to NJDEP or any successor governmental department or agency in connection with a proposed sale, leasing, exchange, financing, refinancing or other disposition of the Leased Premises, or of any part thereof, or of the building in which or land upon which the Leased Premises is located, or any part thereof, then Tenant shall upon written request of Landlord furnish such information and evidence in Affidavit or other form required by NJDEP without unreasonable delay.

 

E.                                    Tenant shall commence its determination of whether any ISRA submission is required in anticipation of the end of its Lease Term at least six (6) months prior to the expiration of the Term, and shall notify Landlord in writing of its determination and the reasons on which its determination is based, at least two (2) months prior to the expiration of the Term.

 

42.          Headings and Terms. The title and headings and the Table of Contents of this Lease are for convenience and reference only and shall not in any way be utilized to construe or interpret the agreement of the parties as otherwise set forth herein. The term “Landlord” and the term “Tenant” as used herein shall mean, where appropriate, all persons acting by or on behalf of the respective parties, except as to any required approvals, consents or amendments, modifications or supplements hereunder when such terms shall only mean the parties originally

 

31

 

named on the first page of this Lease as Landlord and Tenant, respectively, and their agents so authorized in writing.

 

43.          Performance of Landlord’s Obligations to Mortgagee. Tenant shall accept performance of any of Landlord’s obligations hereunder by any mortgagee.

 

44.          Applicable Law. This Lease and the rights and obligations of the parties hereunder shall be construed in accordance with the internal laws of the State of New Jersey applicable to leases made and to be performed in the State of New Jersey without regard to principles of conflict of law.

 

45.          No Representation or Warranty. The authorization of the Permitted Use of the Leased Premises for the purposes set forth herein does not constitute a representation or warranty by Landlord that any particular use of the Leased Premises is now or shall continue to be permitted under applicable laws or regulations.

 

46.          Construction of Lease.

 

A.                                    This Lease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Lease to be drafted.

 

B.                                    Words and phrases used in the singular shall be deemed to include the plural and vice versa, and nouns and pronouns used in any particular gender shall be deemed to include any other gender.

 

C.                                    The rule of “ejusdem generis” shall not be applicable to limit a general statement following or referable to an enumeration of specific matters to matters similar to the matters specifically mentioned.

 

47.          Delivery of Possession.

 

Delivery of possession of the Leased Premises specifically and expressly is contingent upon the present tenant, if any, vacating the Leased Premises and delivering peaceful possession to Landlord.

 

48.          OFAC Representation. Tenant represents and warrants that no Tenant Party (a) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the Treasury (“OFAC”) pursuant to the Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) (“Order”); (b) is listed on any other list of terrorists or terrorist organizations maintained pursuant to the Order, the rules and regulations of OFAC or any other applicable requirements contained in any enabling legislation or other Executive Orders in respect of the Order (the Order and such other rules, regulations, legislation or orders are collectively called the “Orders”): (c) is engaged in activities prohibited in the Orders; or (d) has been convicted, pleaded nolo contendere, indicted, arraigned or custodially detained on charges involving money laundering or predicate crimes to money laundering. If the foregoing representation and warranty is inaccurate in any respect, the same shall constitute an Event of Default by Tenant under this Lease. The term “Tenant Party” means and includes (i) Tenant, (ii) its partners, members, managers, directors, officers or shareholders, (iii) any beneficial owner of Tenant, and (iv) any beneficial owner of Tenant’s partners, members, managers, directors, officers or shareholders.

 

49.          Parking. Landlord and Tenant agree that the Annual Fixed Rent shall not be inclusive of any parking permits for Tenant’s use. Said parking permits may be secured by Tenant through, and the cost thereof paid by Tenant directly to, the parking garages located on Hulfish Street and Chambers Street, which shall be at the Palmer Square tenant rates.

 

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50.          Landlord’s Contribution.

 

Landlord shall contribute to Tenant a sum not to exceed $22,416.00 towards Tenant’s Improvements, which shall be credited to Tenant’s first six (6) months of Annual Fixed Rent due and payable hereunder in equal monthly installments specifically and expressly subject to satisfaction of the following conditions:

 

A.                                    Tenant furnishing Landlord with reasonably adequate documentary proof that material improvements, in an amount up to $22,416.00, have been installed at the Leased Premises;

 

B.                                    Tenant remaining in actual occupancy of the Leased Premises:

 

C.                                    Tenant being current and not in default of any of the terms, covenants, conditions and provisions of the within Lease Agreement at all times and said Lease Agreement is in full force and effect:

 

D.                                    Tenant providing Landlord with completed and executed contractor’s/subcontractor’s final waiver(s) of lien.

 

E.                                    However, in the event Tenant is in default of any term, covenant, condition or provision under the within Lease Agreement, either monetary or non-monetary, at any time during the Term of the within Lease, then, and in such event, Tenant shall not be entitled to the foregoing Landlord Contribution and all sums credited to Tenant’s Annual Fixed Rent shall immediately be reversed and become due, owing and payable by Tenant to Landlord as Additional Rent.

 

51.          Option to Renew.

 

Upon the expiration of the initial Term reserved herein, Tenant shall have the right to renew this Lease for two additional terms of three (3) years each, (referred to herein as the “First Renewal Term” and “Second Renewal Term”, respectively). Tenant’s right to renew this Lease for the period referred to above shall be subject to:

 

A.                                    Tenant being in actual possession of the Leased Premises; and

 

B.                                    This Lease then being in full force and effect and Tenant’s not being in default hereunder both when such option to renew may be exercised and at the commencement date of the option period; and

 

C.                                    Tenant is current in payment of all monetary obligations under this Lease constituting Rent and Additional Rent: and

 

D.                                    Tenant providing Landlord with prior written notice of its exercise of such option. The requisite written notice to be furnished by Tenant to Landlord shall be delivered to Landlord not later than nine (9) months prior to the termination of the initial Term, or First Renewal Term, as applicable, time specifically and expressly hereby being made of the essence for such notice. Upon proper exercise by Tenant of its right to First Renewal Term, or Second Renewal Term, as applicable, the Term of the Lease shall be deemed extended to include said First Renewal Term or Second Renewal Term, as applicable, subject to the provisions of the Lease, except that (a) there shall be no further option to renew after the Second Renewal Term; (b) there shall be no Rent abatement; (c) there shall be no Landlord’s Work; (d) there shall be no Landlord’s Contribution, and (e) during the First Renewal Term and Second Renewal Term, the Annual Fixed Rent and Additional Rent shall be adjusted as set forth on Schedule A-1, Rent Escalation; and

 

E.                                    Tenant’s failure to comply with all of the foregoing shall render said option to renew, at Landlord’s discretion, null and void.

 

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52.          Right of First Offer.

 

Tenant shall be granted a one-time right of first offer for any space that becomes available on the Fourth Floor of the Building, at the then fair market value (but in no event less than the then existing Annual Fixed Rent for the Leased Premises), otherwise upon the same terms and conditions of the Lease excepting there shall be no Rent abatement, no Landlord Work and no Landlord Contribution and subject to the following:

 

A.                                    Tenant being in actual occupancy of the Leased Premises;

 

B.                                    This Lease being in full force and effect;

 

C.                                    Tenant not being in default of any monetary or non-monetary terms, covenants, conditions and provisions of this Lease both at the time such right of first offer may be exercised and at the commencement of the term for said offered space: and

 

D.                                    Tenant shall execute and deliver to Landlord a written exercise of the within right of first offer which must be delivered within fifteen (15) calendar days of Landlord’s notice of the availability of the offered space, time specifically and expressly being made of the essence for said delivery to Landlord of the written exercise, and Tenant must execute an Addendum reflecting the foregoing within seven (7) calendar days of the Landlord’s attorneys delivery of the Addendum to Tenant, time specifically and expressly being made of the essence for such execution, together with such Security Deposit as determined by Landlord.

 

E.                                    Tenant’s failure to fully and completely comply with the foregoing shall render said right of first offer null and void and of no force and effect and said right of first offer shall be deemed terminated. Furthermore, Tenant’s right of first offer specifically and expressly is subject and subordinate to any present tenants’ rights to the offered space as provided for in any written lease, including, but not limited to, any options to renew, expansions, rights of first refusal, and the like.

 

53.          Submission of Lease to Tenant.

 

THE SUBMISSION BY LANDLORD TO TENANT OF THIS LEASE SHALL HAVE NO BINDING FORCE OR EFFECT, SHALL NOT CONSTITUTE AN OPTION FOR THE LEASING OF THE LEASED PREMISES, NOR CONFER ANY RIGHTS OR IMPOSE ANY OBLIGATIONS UPON EITHER PARTY UNTIL THE EXECUTION THEREOF BY LANDLORD AND THE DELIVERY OF AN EXECUTED ORIGINAL COPY THEREOF TO TENANT OR ITS REPRESENTATIVES.

 

IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have executed this Lease as of the day and year first above written.

 

	
WITNESS/ATTEST:
    	
 
    
	
 
    	
 
    
	
 
    	
PSN PARTNERS, L.P.
    
	
 
    	
a New Jersey Limited Partnership, Landlord
    
	
 
    	
By:
    	
G. A. Properties, Inc.
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
 
    	
 
    	
By:
    	
/s/ Peter Rudy
    
	
 
    	
 
    	
 
    	
Peter   Rudy, Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AT PHARMACEUTICALS, INC.
    
	
 
    	
A Delaware Corporation, Tenant
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   [ILLEGIBLE]
    	
 
    	
By:
    	
/s/ Stephen G. Dance
    
	
 
    	
 
    	
Name:
    	
Stephen G. Dance
    
	
 
    	
 
    	
Title:
    	
C.F.O.
    

 

34

 

SCHEDULE A

 

 

1

 

 

2

 

SCHEDULE A-1

 

RENT ESCALATION

 

The Annual Fixed Rent to be paid by Tenant during each Lease Year of the First Renewal Term and Second Renewal Term, as applicable, shall be the Annual Fixed Rent in effect for the prior Lease Year plus the percentage of increase, if any, in the Consumer Price Index computed as follows:

 

There shall be compared the Consumer Price Index for All Urban Consumers, New York, N.Y.-Northeastern New Jersey Local Area, All Items, published by the Bureau of Labor Statistics, Revised Consumer Price Index effective January 1987 (1982-84 = 100) (the Index) for the first month of the prior Lease Year with the first month of the applicable Lease Year. The percentage of increase in such Index for the first month of the applicable Lease Year over the first month of the prior Lease Year shall be the percentage of increase in the Index for the purpose of determining the increase in the Annual Fixed Rent payable during all Lease Years of the First and Second Renewal Terms.

 

It is understood and agreed that in the event the Index figure required to make the foregoing comparison shall not be published for the particular months when the same shall be applicable, then the like Index figure published in the preceding month shall be used provided such figure is published within six (6) months of the month required in accordance with the foregoing. In the event that the applicable Index figure is not published within six (6) months of the required month or if such figure or the entire Index shall become unavailable by reason of discontinuance of publication, or any other reason, the parties shall agree on an equivalent and substituted Consumer Price Index to be provided.

 

The parties covenant and agree that, as soon as the Index figure for the first month of the applicable Lease Year is published, they will set forth such figure in writing signed by both parties; and, thereafter, when the figure is published for any succeeding month to be used for comparison as hereinabove provided, they will likewise set forth such figure in writing signed by both parties. The failure to set forth such figures in writing shall not diminish Tenant’s Obligations hereunder.

 

The Annual Fixed Rent during each of the Lease Years of the First Renewal Term and Second Renewal Term, as applicable, shall not be less than that in effect for the prior Lease Year.

 

 

SCHEDULE A-2

 

PALNER SQUARE SOUTH AREA

[ILLEGIBLE]

 

hassau sTREET

 

 

 

SCHEDULE B

 

DESCRIPTION OF LANDLORD’S WORK

 

The period of time during which Landlord is prevented from performing any act required to be performed under this Lease, including, but not limited to Schedule B, if any, by reason of fire, catastrophe, strikes, lockouts, civil commotion, acts of God or the public enemy, government prohibitions or preemptions, embargoes, inability to obtain material or labor by reason of governmental regulations or prohibitions, the act or default of some other party, or other events beyond the reasonable control of Landlord shall be added to the time for performance of such act.

 

 

SCHEDULE B-1

 

DESCRIPTION OF TENANT’S WORK

 

Excepting as may be set forth on Schedule B, Tenant accepts the Premises in an “AS IS” condition at the commencement of the Term of this Lease and Landlord shall not be required to make any changes, install any improvements, obtain any occupancy permits or prepare the Premises in any way for occupancy in accordance with the terms of this Lease, latent defects excepted. The Premises shall be provided “broom clean”. All Tenant Improvements shall be at the Tenant’s sole expense. Tenant shall submit to Landlord detailed plans and specifications for its prior approval outlining all improvements which constitute Tenant Improvements. Landlord shall give its approval, or disapproval, within ten (10) days of the submission of said complete plans and specifications.

 

 

 

SCHEDULE C

 

FORM OF ESTOPPEL CERTIFICATE

 

LANDLORD:

 

TENANT:

 

PREMISES:

 

LEASE DATED:

 

TENANT’S NOTICE ADDRESS:

 

The undersigned, Tenant, hereby certifies to                                          (hereinafter “                                   ”) that:

 

1.                                      Tenant has accepted possession and is in occupancy of the Premises described above. The Lease Term commenced on                                          , 200     . The termination date of the Lease Term, excluding renewals and extensions, is                                          .

 

2.                                      Any improvements required by the terms of the Lease to be made by Landlord have been completed to the satisfaction of Tenant in all respects, and Landlord has fulfilled all of its duties under the Lease.

 

3.                                      The Lease has not been assigned, modified, supplemented or amended in any way. The Lease constitutes the entire agreement between the parties, and there are no other agreements, oral or written, between Landlord and Tenant concerning the Premises. A true and complete copy of the Lease is attached hereto as Exhibit A.

 

4.                                      The Lease is valid and in full force and effect, and, to the best of Tenant’s knowledge, neither Landlord nor Tenant is in default thereunder. Tenant has no defense, set-off or counterclaim against Landlord arising out of the Lease or in any way relating thereto, or arising out of any other transaction between Tenant and Landlord, and no event has occurred and no condition exists, which, with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

 

5.                                      No Rental or other sum payable under the Lease has been paid in advance, excepting for the Security Deposit in the amount of $                                    .

 

6.                                      The minimum monthly rental presently payable under the Lease is $                                          and has been paid through                                  .

 

7.                                      The Tenant has received no notice of a prior assignment, hypothecation or pledge of the Lease or the rents, income, deposits or profits arising thereunder.

 

8.                                      Tenant hereby acknowledges and agrees that if                                      shall succeed to the interest of Landlord under the Lease,                                      shall assume (only while owner of and in possession or control of the building of which the Premises is a part) and perform all of Landlord’s obligations under the Lease, but shall not be (a) liable for any act or omission of any prior landlord (including the present Landlord); (b) liable for the return of any Security Deposit; (c) subject to any off-set or defense which Tenant may have against any such prior landlord; (d) bound by and Rental or Additional Rental Tenant may have paid for more than the current month to any prior landlord, including the present Landlord; or (e) bound by any assignment, surrender, termination, cancellation, waiver, release, amendment or modification of the Lease made without the express consent of                                     .

 

1

 

9.             Tenant shall give                                               prompt written notice of any default of Landlord under the Lease, if such default entitles Tenant, under law or otherwise, to terminate the Lease, reduce Rental or credit or off-set any amount against future rents and shall give                                               reasonable time (but in no event less than ninety (90) days after receipt of such notice) to cure or commence curing such default prior to exercising (and as a condition precedent to its right to exercise) any right Tenant may have to terminate the Lease or to reduce Rental or credit or offset any amounts against the Rental. Tenant shall give written notice to any successor in interest of                                              , any purchaser at a foreclosure sale under the mortgage, any transferee who acquired the property by deed in lieu of foreclosure or any successor or assign thereof. Tenant acknowledges and agrees that neither                                               nor any such successor, purchaser or transferee shall have any obligation to respond to any such notice or take any action as a result thereof.

 

10.          All notices and other communications from Tenant to                                               shall be delivered or mailed by registered mail, postage prepaid, return receipt requested, addressed to                                               at :                                               , or such other address as                                              , any successor, purchaser or transferee shall furnish to Tenant in writing.

 

11.          Tenant has no option or right to purchase the Premises, or any part thereof.

 

12.          This Estoppel Certificate is being executed and delivered by Tenant to induce                                               to make a loan to Landlord, which loan is to be secured in part by an Assignment to                                               of Landlord’s interest in the Lease and all rents, income, deposits and profits arising thereunder, and with the intent and understanding that the above statements will be relied upon by                                          .

 

 

	
 
    	
 
    
	
 
    
	
 
    
	
Dated:
    	
 
    	
 
    
			

 

2

 

SCHEDULE F

 

CERTIFICATION OF TENANT

 

Tenant hereby warrants and certifies that:

 

A.                                    (If a corporation) the following constitutes the names and addresses of all corporate officers of Tenant:

 

	
NAME
    	
 
    	
ADDRESS
    
	
 
    	
 
    	
 
    
	
SETH. L. HARRISON
    	
 
    	
35 E. 12th STREET #5C, NEW YORK, NY   10003
    
	
 
    	
 
    	
 
    
	
STEPHEN G. DANCE
    	
 
    	
191 HIGH STREET, WINCHESTER, MA 01890
    

 

B                                       (If a corporation) the following constitutes the names and addresses of all corporate directors of Tenant:

 

	
NAME
    	
 
    	
ADDRESS
    
	
 
    	
 
    	
 
    
	
SETH L. HARRISON
    	
 
    	
AS ABOVE
    

 

C.                            (If a corporation) the following constitutes the names and addresses of all shareholders of Tenant together with a listing of the respective shares held by or on behalf of each shareholder:

 

	
NAME
    	
 
    	
ADDRESS
    	
 
    	
NO. OF SHARES
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
BRAEBURN   PHARMACEUTICALS, SARL
    	
 
    	
BRUSSELS BELGIUM
    	
 
    	
1 (100% owner)
    

 

D.                                    (If a corporation) the following constitutes the name and address of the Registered Agent of Tenant:

 

	
NAME
    	
 
    	
ADDRESS
    
	
 
    	
 
    	
 
    
	
CT CORPORATION
   (for DE)
    	
 
    	
155 FEDERAL   STREET # 700
   BOSTON, MA 02110
    

 

1

 

E.                                     (If a corporation) the attached constitutes the Certificate of Incorporation of Tenant, together with any amendments thereto.

 

F.                                      (If a partnership) the following constitutes the names and addresses of all partners (general and limited) of Tenant, together with a listing of each partner’s interest:

 

	
NAME
    	
 
    	
ADDRESS
    	
 
    	
INTEREST
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

G.                                    (If a partnership) the attached constitutes the Partnership Agreement or Certificate of Limited Partnership of Tenant.

 

H.                                   (If a joint venture, limited liability company, or other entity) the following constitutes the names and addresses of all persons possessing any ownership interest in Tenant, together with the amount of each interest in Tenant:

 

	
NAME
    	
 
    	
ADDRESS
    	
 
    	
INTEREST
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

I.                                        Tenant shall advise and notify Landlord immediately, in writing, upon any change whatsoever in the above ownership interests setting forth all facts and particulars regarding all such changes; and

 

J.                                        The within Certification is duly authorized by corporate resolution, or partnership agreement or other agreement between the parties comprising the Tenant (whichever is applicable).

 

WITNESS/ATTEST:

 

 

	
/s/ [ILLEGIBLE]
    	
 
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    	
 
    
	
Operating Mgr.
    	
 
    	
C.F.O.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
AT   PHARMACEUTICALS, INC.
    

 

 

(CORPORATE SEAL)

 

2

 

Delaware

 

The First State

 

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF “AT PHARMACEUTICALS, INC.”, FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF SEPTEMBER, A.D. 2012, AT 12:24 O’CLOCK P.M.

 

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

 

	
5216418       8100
    	

    	
/s/ Jeffrey W.   Bullock
    
	
 
    	
Jeffrey W.   Bullock, Secretary of State
    
	
121055316
    	
AUTHENTICATION:   9863406
    
	
You   may verify this certificate online at corp.delaware.gov/authver.shtml
    	
 

DATE:   09-21-12
    

 

1

 

	
 
    	
State of Delaware

Secretary of State

Division of Corporations

Delivered 12:51 PM 09/21/2012

FILED 12:24 PM 09/21/2012

SRV 121055316 - 5216418 FILE
    

 

CERTIFICATE OF INCORPORATION

 

of

 

AT PHARMACEUTICALS, INC.

 

The undersigned incorporator, in order to form a corporation under the General Corporation Law of the State of Delaware, as set forth in Title 8 of the Delaware Code (the “DGCL”), certifies as follows:

 

ARTICLE I

 

The name of the corporation (the “Corporation”) is AT Pharmaceuticals, Inc.

 

ARTICLE II

 

The address of the Corporation’s registered office in the State of Delaware is in New Castle County, at the Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The name of the registered agent at such address is The Corporation Trust Company.

 

ARTICLE III

 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

 

ARTICLE IV

 

The total number of shares of all classes of stock that the Corporation shall have authority to issue is 5,000 shares of Common Stock having the par value of $0.01 per share.

 

ARTICLE V

 

The number of directors of the Corporation shall be fixed from time to time by the Board of Directors of the Corporation.

 

ARTICLE VI

 

In furtherance and not in limitation of the powers conferred upon it by law, the Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation.

 

ARTICLE VII

 

Unless and except to the extent that the Bylaws of the Corporation so require, the election of directors of the Corporation need not be by written ballot.

 

1

 

ARTICLE VIII

 

To the fullest extent from time to time permitted by law, no director of the Corporation shall be personally liable to any extent to the Corporation or its stockholders for monetary damages for breach of his fiduciary duty as a director,

 

ARTICLE IX

 

Each person who is or was or had agreed to become a director or officer of the Corporation, and each such person who is or was serving or who had agreed to serve at the request of the Corporation as a director, officer, partner, member, employee or agent of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including the heirs, executor, administrators or estate of such person), shall be indemnified and advanced expenses by the Corporation to the fullest extent permitted from time to time by applicable law. Any repeal or modification of this Article IX shall not adversely affect any right to indemnification of any person existing at the time of such repeal or modification with respect to any matter occurring prior to such repeal or modification.

 

ARTICLE X

 

The name and mailing address of the incorporator are as follows:

 

Abigail R. Browning

c/o Proskauer Rose LLP

One International Place

Boston, MA 02110

 

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of September, 2012.

 

 

	
 
    	
/s/ Abigail R.   Browning
    
	
 
    	
Abigail R.   Browning
    
	
 
    	
Sole   Incorporator
    

 

2

 

SCHEDULE G

 

CLEANING SERVICES

 

1.                                      All cleaning shall be between the hours of 6:00 P.M. and 10:00 P.M. Monday through Friday, except for the following holidays: New Year’s Day, Memorial Day, Fourth of July, Labor Day, Thanksgiving Day and Christmas Day. No cleaning shall be done on Saturday or Sunday.

 

2.                                      The quality of the cleaning shall be the same as the services rendered in other Class “A” office buildings.

 

3.                                      General Cleaning

 

Nightly:

 

(a)                                 Vacuum all carpets and rugs, moving light furniture other than desks, file cabinets, etc.;

 

(b)                                 Empty and clean all wastepaper baskets, ash trays, receptacles, etc.;

 

(c)                                  Remove wastepaper and waste materials;

 

(d)                                 Dust and wipe clean all furniture, fixtures and window sills;

 

(e)                                  Clean all glass furniture tops;

 

(f)                                   Dust all chair rails, trim, etc.;

 

(g)                                  Dust all baseboards.

 

Weekly:

 

(a)                                 Clean all interior metal;

 

(b)                                 Dust all window louvres and all ventilating louvres within reach;

 

(c)                                  Remove all finger marks from metal partitions and other surfaces.

 

Three Months:

 

All high dusting which shall include:

 

(a)                                 All pictures, frames, charts, graphs and similar wall hangings not reached in nightly cleaning;

 

(b)                                 All vertical surfaces, such as walls, partitions, ventilating louvres and other surfaces not reached in nightly cleaning;

 

(c)                                  All lighting fixtures (exterior only);

 

(d)                                 All window frames.

 

Four Months:

 

(a)                                 The interior and exterior of all windows shall be washed;

 

(b)                                 The space between the two panes of glass and the venetian blinds contained therein shall be unsealed and cleaned only when necessary in the opinion the Landlord.

 

4.                                      The Tenant shall be charged for cleaning services in the areas of the Leased Premises used for special purposes requiring greater and more difficult cleaning work than office areas (including, but not limited to, data processing areas, exhibit areas, energy dispatching areas, mail rooms, private toilets, etc.)

 

 

SCHEDULE H

 

RULES AND REGULATIONS

 

1.                                      Definitions

 

Wherever in these Rules and Regulations the word “Tenant” is used, it shall be taken to apply to and include the Tenant and its agents, employees, invitees, licensees, subtenants, assignees, if any, and contractors, and is to be deemed of such number and gender as the circumstances require. The word “room” is to be taken to include the space covered by the Lease. The word “Landlord” shall be taken to include the employees and agents of Landlord.

 

2.                                      Common Areas

 

The streets, sidewalks, entrances, halls, passages, elevators, stairways and other common areas provided by Landlord shall not be obstructed by Tenant, or used by it for any other purpose than for ingress and egress.

 

3.                                      Public Entrance

 

Landlord reserves the right to exclude the general public from the Building upon such days and at such hours as in Landlord’s judgment shall be for the best interest of the Building and its tenants.

 

4.                                      General Prohibitions

 

In order to insure proper use and care of the Premises, Tenant shall not:

 

(a)                                 Allow any sign, advertisement or notice to be fixed to the Building, inside or outside, without Landlord’s written consent.

 

(b)                                 Make improper noises or disturbances of any kind or emit objectionable odors that shall disturb or annoy any other tenants or occupants of the Building or do or permit anything to be done which shall interfere with the rights, comfort or convenience of other tenants or occupants of the Building.

 

(c)                                  Mark or defile elevators, water-closets, toilet rooms, walls, windows, doors or any other part of the Building.

 

(d)                                 Use toilet rooms, water-closets and other water apparatus for any purposes other than those for which they were constructed.

 

(e)                                  Place anything on the outside of the Building, including roof setbacks, window ledges and other projections.

 

(f)                                   Cover or obstruct any window.

 

(g)                                  Fasten any article, drill holes, drive nails or screws into the walls, floors, woodwork, window mullions, or partitions; nor shall the same be painted, papered or otherwise covered or in any way marked or broken without written consent of Landlord.

 

(h)                                 Interfere with the heating or cooling apparatus.

 

(i)                                     Place trash or waste in hallways or other common areas of the Building except those areas specifically designated by Landlord.

 

(j)                                    Leave rooms without locking doors, stopping all office machines and extinguishing all lights.

 

(k)                                 Install any shades, blinds or awnings without written consent of Landlord.

 

i

 

(1)                                 Use any electric heating device without written permission of Landlord.

 

(m)                             Install call boxes or any kind of wire in or on the Building without Landlord’s written permission and direction.

 

(n)                                 Manufacture any commodity, or prepare or dispense any foods or beverages, whether by vending or dispensing machines or otherwise, or alcoholic beverages, tobacco, drugs, flowers, or other commodities or articles without written consent of Landlord.

 

(o)                                 Secure duplicate keys for rooms, except from Landlord, or change the locks of any doors to or in the Leased Premises.

 

(p)                                 Place door mats in public corridors without the written consent of Landlord.

 

(q)                                 Bring into or keep in the Building any flammable, combustible, explosive or other dangerous fluid, chemical material or substance.

 

(r)                                    Bar entrance to the Leased Premises by a sliding bolt or other device which renders access by keys difficult or impossible.

 

(s)                                   Keep any animals in the Leased Premises.

 

5.                                      Publicity

 

Tenant shall not use the name of the Building in any way in connection with its business except as to the address thereof. Landlord shall also have the right to prohibit any advertising by Tenant, which, in Landlord’s opinion, tends to impair the reputation of the Building or its desirability as a building for offices; and upon written notice from Landlord, Tenant shall refrain from or discontinue such advertising.

 

6.                                      Business Machines

 

Business machines and mechanical equipment which cause vibration, noise, cold or heat that may be transmitted to Building structure or to any leased space outside the Leased Premises shall be placed and maintained by Tenant, at its sole cost and expense, in settings or cork, rubber or spring type vibration eliminators sufficient to absorb and prevent such vibration, noise, cold or heat.

 

7.                                      Movement of Equipment

 

Landlord reserves the right to designate the time when and the method whereby freight, small office equipment, furniture, sofas and other like articles may be brought into, moved, or removed from the Building or rooms, and to designate the location for temporary disposition of such items. In no event shall any of the aforesaid items be taken from Tenant’s space for the purpose of removing same from the Building without the express written consent of both Landlord and Tenant except in case of Tenant’s default under the within Lease.

 

8.                                      Rights Reserved to Landlord

 

A.            without abatement or diminution in Rent, Landlord reserves and shall have the following additional rights:

 

(i)                                     To change the name and/or street address of the Building and the arrangement and/or location of entrances, passageways, doors, doorways, corridors, elevators, stairs, toilet or other public parts of the Building.

 

(ii)                                  To install and maintain a sign or signs on the exterior of the Building.

 

(iii)                               To have access for Landlord and other tenants of the Building to any mail chutes, if any, located on the Leased Premises according to the rules of the United States Post Office.

 

ii

 

(iv)                              To designate all sources furnishing sign painting and lettering, ice drinking water, towels and toilet supplies, and other like services used on the Leased Premises.

 

(v)                                 To make, either voluntarily or pursuant to governmental requirement, at Landlord’s own expense, repairs, alterations or improvements in or to the Building, or any part thereof, and during alterations, may close entrances, doors, windows, corridors, elevators or other facilities, provided that such acts shall not unreasonably interfere with Tenant’s use and occupancy of the Premises as a whole.

 

(vi)                              To erect, use and maintain pipes and conduits in and through the Leased Premises.

 

(vii)                           During the last six (6) months of the Lease Term, or any part thereof, if during or prior to that time the Tenant vacates the Leased Premises, to decorate, remodel, repair, alter or otherwise prepare the Leased Premises for re-occupancy.

 

(viii)                        To constantly have pass keys to the Leased Premises.

 

(ix)                              To grant to anyone the exclusive right to conduct any particular business or undertaking in the Building.

 

(x)                                 To exhibit the Leased Premises to others and to display “For Rent” signs on the Leased Premises.

 

(xi)                              To take any and all measures, including inspections, repairs, alterations, additions and improvements to the Leased Premises or to the Building, as may be necessary or desirable in the operation of the Building.

 

B.                                    Landlord may enter upon the Leased Premises and may exercise any or all of the foregoing rights hereby reserved without being deemed guilty of an eviction or disturbance of Tenant’s use or possession and without being liable in any manner to the Tenant.

 

9.                                      Regulation Changes

 

Landlord shall have the right to make such other and further reasonable Rules and Regulations as, in the judgment of Landlord, may from time to time be needful for the safety, appearance, care and cleanliness of the building and for the preservation of good order therein. Landlord shall not be responsible to Tenant for any violation of Rules and Regulations by any other tenant.

 

iii

 

ADDENDUM TO OFFICE LEASE AGREEMENT

 

Between

 

PSN PARTNERS, L.P.

LANDLORD

 

And

 

BRAEBURN PHARMACEUTICALS, INC.,

SUCCESSOR TO AT PHARMACEUTICALS, INC.

 

TENANT

 

1.                                      This Addendum to Office Lease Agreement (“Addendum”) is executed on the 9th day of June, 2015 and specifically and expressly is incorporated into the Office Lease Agreement, dated October 18, 2012, and Tenant’s Letter of January 8, 2015 exercising the First Renewal Term. (The Office Lease Agreement, Tenant’s Letter and this Addendum shall hereafter be collectively referred to as the “Lease”). In the event of any inconsistency or discrepancy, the terms, covenants, conditions and provisions of the foregoing enumerated documents, this Addendum shall supersede and prevail.

 

2.                                      Landlord and Tenant acknowledge that Tenant presently is a Tenant at the premises known as 47 Hulfish Street, Suites 441-442, Princeton, New Jersey (“Existing Space”), consisting of 3,736 square feet. Landlord and Tenant acknowledge and agree that Tenant will be expanding the Existing Space to include Suite 350 at 47 Hulfish Street, conclusively deemed to consist of 900 square feet (the “Expansion Space”). Commencing with the Expansion Space Term Commencement Date, as hereinafter defined, the Existing Space and Expansion Space shall collectively be referred to as the “Leased Premises” conclusively deemed to be a total of 4,636 square feet.

 

3.             Schedule Ab, Suite 350, Expansion Space, shall constitute a new and additional Schedule.

 

4.                                      The Term for the Expansion Space shall commence upon Landlord’s delivery of possession of the Expansion Space to Tenant, estimated to be August 1, 2015 (“Expansion Space Term

 

 

Commencement Date”) and shall be co-terminus with the Existing Space Termination Date, October 17, 2018.

 

5.                                      A.            The Annual Fixed Rent for the Expansion Space only shall be fixed at $38,700.00 per year ($3,225.00 per month).

 

B.                                    Notwithstanding the foregoing. Tenant’s Rent obligations for the Expansion Space shall be as follows:

 

(i)                                     Tenant shall not be obligated to pay Annual Fixed Rent until sixty (60) days following the Expansion Space Term Commencement Date (“Expansion Space Rent Commencement Date”);

 

(ii)                                  Commencing with the Expansion Space Term Commencement Date, Tenant shall be obligated to pay all other charges and sums constituting Additional Rent under the Lease;

 

(iii)                               Commencing with the Expansion Space Rent Commencement Date, Tenant shall commence payments of Annual Fixed Rent and shall continue to pay all sums and charges constituting Additional Rent;

 

(iv)                              However, in the event Tenant is in default of any term, covenant, condition or provision under the Lease (with respect to either the Existing Space or Expansion Space), either monetary or non-monetary, and fails to cure such default within any grace period, then subparagraphs (i) and (iii) above shall not apply and Tenant’s obligation to pay Annual Fixed Rent and all other charges and sums constituting Additional Rent, and the like, shall be effective on the Expansion Space Term Commencement Date.

 

6.             Section 13, Building Operation and Services, shall be amended as follows:

 

A.                                    Subsection A.(i)(c), shall be amended to include that the “Base Expense Year” for the Expansion Space only shall be the 2015 calendar year; and

 

2

 

B.                                    Subsection A.(i)(f), shall be amended to provide that, commencing with the Expansion Space Term Commencement Date, Tenant’s Proportionate Share shall be equal to 6.41 percent.

 

7.                                      Section 14, Building Operation and Services, Subsection G, shall be amended to include that Tenant shall be responsible for the electric energy which is required in the Expansion Space and shall initially pay the sum of $165.00 per month as Additional Rent, which sum relates solely to the Expansion Space. The remaining terms, covenants, conditions and provisions of Subsection G shall remain in full force and effect.

 

8.                                      Landlord represents that it presently is holding the sum of $49,813.32 constituting Security Deposit. Said Security Deposit shall continue to be held by Landlord as security for the faithful performance by Tenant of all conditions to be performed by Tenant under the Lease. Tenant shall not be required to pay any additional Security Deposit.

 

9.                                      It is expressly understood and agreed that Tenant shall accept the Expansion Space in an “AS IS”, “WHERE IS” and “WITH ALL FAULTS” condition and Landlord shall not be required to make any changes, install any improvements, obtain any occupancy permits or prepare the Expansion Space in any way.

 

10.          Landlord’s Contribution.

 

Landlord shall contribute to Tenant a sum not to exceed $9,000.00 towards paint and carpet in the Expansion Space only, which shall be credited to Tenant’s first twelve (12) months of Annual Fixed Rent due and payable hereunder in equal monthly installments of $750.00, specifically and expressly subject to satisfaction of the following conditions:

 

A.                                    Tenant furnishing Landlord with reasonably adequate documentary proof that paint and carpet, in an amount up to $9,000.00, have been completed in the Expansion Space;

 

B.                                    Tenant remaining in actual occupancy of the entire Leased Premises;

 

3

 

C.                                    Tenant being current and not in default of any of the terms, covenants, conditions and provisions of the Lease at all times and said Lease is in full force and effect;

 

D.                                    Tenant providing Landlord with completed and executed contractor’s/subcontractor’s final waiver(s) of lien.

 

E.                                    However, in the event Tenant is in default of any term, covenant, condition or provision under the Lease, either monetary or non-monetary, at any time during the Term of the Lease, then, and in such event, Tenant shall not be entitled to the foregoing Landlord Contribution and all sums credited to Tenant’s Annual Fixed Rent shall immediately be reversed and become due, owing and payable by Tenant to Landlord as Additional Rent.

 

11.                               Section 51, Option to Renew, shall be amended to include an additional term of three (3) years (referred to as the “Third Renewal Term”) subject to the same terms and conditions set forth for the First Renewal Term and Second Renewal Term.

 

12.          Section 50, Landlord’s Contribution, shall be deleted in its entirety.

 

13.                               All remaining terms, covenants, conditions and provisions of the said Office Lease Agreement and Schedules, including, but not limited to Section 9, Non-Liability of Landlord and Exculpation, shall remain in full force and effect, excepting those specifically modified herein.

 

14.                               Counterparts. This Addendum may be executed in counterparts, each of which shall be deemed to be an original, but all of which counterparts collectively shall constitute one and the same instrument. The transmission of a signed counterpart of this Addendum by facsimile or by portable document file (“PDF”) shall have the same force and effect as delivery of an original signed counterpart of this Addendum, and shall constitute valid and effective delivery for all purposes.

 

15.                               THE SUBMISSION BY LANDLORD TO TENANT OF THIS ADDENDUM SHALL HAVE NO BINDING FORCE OR EFFECT, NOR CONFER ANY RIGHTS OR IMPOSE ANY OBLIGATIONS UPON EITHER PARTY UNTIL THE EXECUTION THEREOF BY

 

4

 

LANDLORD AND TENANT AND THE DELIVERY OF AN EXECUTED COUNTERPART

 

TO TENANT.

 

 

	
 
    	
 
    	
PSN PARTNERS, L.P., Landlord
    
	
 
    	
 
    	
By:
    	
GA PROPERTIES, INC.
    
	
 
    	
 
    	
 
    	
General Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Peter   N. Rudy
    
	
 
    	
 
    	
 
    	
Peter N. Rudy, Vice President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
BRAEBURN PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
Tenant
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Behshad Sheldon
    
	
 
    	
 
    	
 
    	
Name:
    	
Behshad   Sheldon
    
	
 
    	
 
    	
 
    	
Title:
    	
President   & CEO
    

 

5

 

 

January 8, 2015

 

PSN Partners, L.P.

40 Nassau Street, First Floor

Princeton, NJ 08542

 

Dear Sir or Madam,

 

I am writing in reference to that certain Office Lease Agreement (the “Agreement”) between PSN Partners, L.P. (“PSN”) and Braeburn Pharmaceuticals, Inc. (“Braeburn”), executed by Braeburn’s predecessor AT Pharamceuticals, Inc. on or around October 15, 2012. A copy of the Agreement is enclosed. Capitalized terms referenced in this letter without definition shall have the meanings given those terms in the Agreement.

 

Section 51 of the Agreement provides that Tenant has a right to renew the Lease for two additional terms of three years, provided that Tenant satisfies certain enumerated conditions. Tenant hereby provides Landlord with written notice of its exercise of its option to extend the Lease for the First Renewal Term. This notice satisfies all necessary conditions:

 

A.    Tenant remains in possession of the Leased Premises;

B.    The Lease is in full force effect, and Tenant is not in default;

C.    Tenant is current in payment of all monetary obligations; and

D.            Tenant has provided notice not later than nine months prior to the termination of the initial Term.

 

The Lease shall therefore be deemed extended to include the First Renewal Term, subject to the rent adjustment set forth on Schedule A-1, Rent Escalation.

 

Please confirm in writing that Tenant has satisfied all conditions necessary to exercise its option to renew the lease for the First Renewal Term.

 

Sincerely,

 

	
/s/ Behshad Sheldon
    	
 
    
	
Behshad Sheldon
    	
 
    
	
President and   CEO, Braeburn Pharmaceuticals Inc.
    	
 
    

 

 

Encl: Office Lease Agreement

Cc: Stuart B. Dember, Esq., Fox Rothschild LLP

 

T: 609.751.5375 | F: 609.921.2156 | 47 Hulfish Street. Suite 441 Princeton, NJ 08542 | www.braeburnpharma.com

 

 

	

    	
 
    	
CERTIFICATE
    	
 
    
	
 
    	
IDENTIFICATION
    	
 
    
	
 
    	
 
    	
 
    
	
PRINCETON
    	
 
    	
Date Issued:
    	
11/16/2015
    
	
400 WITHERSPOON ST
    	
 
    	
Control #:
    	
72465
    
	
PRINCETON, NJ 08540
    	
 
    	
Permit #:
    	
20151393
    
	
609-9217078
    	
 
    	
 
    

 

	
Block:
    	
 
    	
20.04                  Lot: 1                Qual: 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Home Warranty   No:
    	
 
    
	
Work Site   Location:
    	
 
    	
47 HULFISH NORTH
    	
Type of Warranty   Plan:
    	
o   State o Private
    
	
 
    	
 
    	
 
    	
Use Group:
    	
B
    
	
 
    	
 
    	
PRINCETON-BOROUGH
    	
Maximum Live   Load:
    	
 
    
	
 
    	
 
    	
 
    	
Construction Classification:
    	
 
    
	
Owner in Fee:
    	
 
    	
PSN PARTNERS
    	
Maximum   Occupancy Load:
    	
 
    
	
 
    	
 
    	
 
    	
Certificate Exp   Date:
    	
 
    
	
Address:
    	
 
    	
40 NASSAU STREET
    	
Description of   Work/Use:
    	
 
    
	
 
    	
 
    	
 
    	
OFFICE FITOUT
    	
 
    
	
 
    	
 
    	
PRINCETON NJ 08542
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Telephone:
    	
 
    	
609 921-2333
    	
Update Desc. of   Wk/Use:
    	
 
    
	
 
    	
 
    	
 
    	
DUCTWORK-VOID     
    	
 
    
	
Agent/Contractor:
    	
 
    	
IDP INTERIOR DESIGN,.   LLC .
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
1759 W. McGALLIARD   AVENUE
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
HAMILTON NJ 08610
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Telephone:
    	
 
    	
609 510-6028
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lic. No./ Bldrs.   Reg.No.:
    	
 
    	
13VH02439600
    	
Federal Emp.   No.: -386942
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Social Security   No.:
    	
 
    	
 
    	
 
    	
 
    	
 
    
							

 

	
o    CERTIFICATE   OF OCCUPANCY

 

This serves   notice that said building or structure has been constructed in accordance   with the New Jersey Uniform Construction Code and is approved for occupancy.

 

x   CERTIFICATE   OF APPROVAL

 

This serves   notice that the work completed has been constructed or installed in   accordance with the New Jersey Uniform Construction Code and is approved. If   the permit was issued for minor work, this certificate was based upon what   was visible at the time of inspection.

 

o    TEMPORARY   CERTIFICATE OF OCCUPANCY/COMPLIANCE

 

If this is a   temporary Certificate of Occupancy or Compliance, the following conditions   must be met no later than or will be subject to fine or order to vacate:
    	
 
    	
o    CERTIFICATE   OF CLEARANCE-LEAD ABATEMENT 5:17

 

This serves   notice that based on written certification, lead abatement was performed as   per NJAC 5:17, to the following extent:

 

o   Total removal of lead-based paint hazards in scope of work

o   Partial or limited time period(          years); see file

 

o    CERTIFICATE   OF CONTINUED OCCUPANCY

 

This serves   notice that based on a general inspection of the visible parts of the   building there are no imminent hazards and the building is approved for   continued occupancy.

 

o    CERTIFICATE   OF COMPLIANCE

 

This serves   notice that said potentially hazardous equipment has been installed and/or   maintained in accordance with the New Jersey Uniform Construction Code and is   approved for use until
    

 

 

	
/s/ JOHN PETTENATI
    	
 
    	
Fees:
    	
$
    
	
JOHN PETTENATI Construction Official
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Paid o   Check No.:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Collected by: 
    	
CR
    

 

1 - APPLICANT    2 - OFFICE    3 - TAX ASSESSORExhibit 10.18

 

LEASE

 

KEYSTONE TECH 7

 

DURHAM KTP TECH 7, LLC

 

a Delaware limited liability company

 

as Landlord,

 

and

 

BRAEBURN PHARMACEUTICALS, INC.

 

a Delaware corporation,

 

as Tenant.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
PREMISES, BUILDING,   PROJECT, AND COMMON AREAS
    	
4
    
	
2.
    	
LEASE TERM; OPTION TERM
    	
7
    
	
3.
    	
BASE RENT
    	
9
    
	
4.
    	
ADDITIONAL RENT
    	
9
    
	
5.
    	
USE OF PREMISES
    	
15
    
	
6.
    	
SERVICES AND UTILITIES
    	
21
    
	
7.
    	
REPAIRS
    	
23
    
	
8.
    	
ADDITIONS AND   ALTERATIONS
    	
23
    
	
9.
    	
COVENANT AGAINST LIENS
    	
25
    
	
10.
    	
INSURANCE
    	
25
    
	
11.
    	
DAMAGE AND DESTRUCTION
    	
27
    
	
12.
    	
NONWAIVER
    	
28
    
	
13.
    	
CONDEMNATION
    	
28
    
	
14.
    	
ASSIGNMENT AND   SUBLETTING
    	
29
    
	
15.
    	
SURRENDER OF PREMISES;   OWNERSHIP AND REMOVAL OF TRADE FIXTURES
    	
32
    
	
16.
    	
HOLDING OVER
    	
33
    
	
17.
    	
ESTOPPEL   CERTIFICATES/FINANCIAL STATEMENTS
    	
34
    
	
18.
    	
SUBORDINATION
    	
34
    
	
19.
    	
DEFAULTS; REMEDIES
    	
35
    
	
20.
    	
COVENANT OF QUIET   ENJOYMENT
    	
37
    
	
21.
    	
SECURITY DEPOSIT
    	
38
    
	
22.
    	
SUBSTITUTION OF OTHER   PREMISES
    	
39
    
	
23.
    	
SIGNS
    	
39
    
	
24.
    	
COMPLIANCE WITH LAW
    	
39
    
	
25.
    	
LATE CHARGES
    	
40
    
	
26.
    	
LANDLORD’S RIGHT TO   CURE DEFAULT; PAYMENTS BY TENANT
    	
40
    
	
27.
    	
ENTRY BY LANDLORD
    	
41
    
	
28.
    	
TENANT PARKING
    	
41
    
	
29.
    	
MISCELLANEOUS   PROVISIONS
    	
41
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    
	
 
    	
 
    	
 
    
	
A
    	
FIRST OFFER SPACE
    	
 
    
	
B
    	
FORM OF NOTICE OF   LEASE TERM DATES
    	
 
    
	
C
    	
PREMISES
    	
 
    
	
D
    	
WORK LETTER
    	
 
    
	
E
    	
RULES AND REGULATIONS
    	
 
    
	
F
    	
FORM OF TENANTS   ESTOPPEL CERTIFICATE
    	
 
    
	
G
    	
ENVIRONMENTAL   QUESTIONNAIRE
    	
 
    
	
H
    	
MEMORANDUM OF LEASE
    	
 
    

 

i

 

	
Abatement Period
    	
2
    
	
Additional Rent
    	
10
    
	
Advance Rent
    	
9
    
	
Advocate Arbitrators
    	
8
    
	
all risks
    	
26
    
	
Alterations
    	
24
    
	
Applicable Laws
    	
40
    
	
as built
    	
24
    
	
Bank Prime Loan
    	
41
    
	
Base Rent
    	
9
    
	
BMBL
    	
17
    
	
Brokers
    	
45
    
	
Builder’s All Risk
    	
25
    
	
Building
    	
4
    
	
Building Common Areas
    	
5
    
	
Clean-up
    	
20
    
	
Closure Letter
    	
20
    
	
Common Areas
    	
5
    
	
Comparable Buildings
    	
8
    
	
Comparable Transactions
    	
7
    
	
Concessions
    	
7
    
	
Contemplated Effective Date
    	
31
    
	
Contemplated Transfer Space
    	
31
    
	
Control
    	
32
    
	
DHHS
    	
17
    
	
Direct Expenses
    	
10
    
	
Early Entry Premises
    	
4
    
	
Environmental Assessment
    	
19, 33
    
	
Environmental Questionnaire
    	
16
    
	
Environmental Report
    	
20
    
	
Estimate
    	
15
    
	
Estimate Statement
    	
15
    
	
Estimated Direct Expenses
    	
14, 15
    
	
Expansion Rent
    	
7
    
	
Expansion Right
    	
6
    
	
Expense Year
    	
10
    
	
Fair Rental Value
    	
7
    
	
First Class Life Sciences   Projects
    	
3
    
	
First Offer Commencement Date
    	
6
    
	
First Offer Notice
    	
5
    
	
First Offer Rent
    	
6
    
	
First Offer Space
    	
5
    
	
Force Majeure
    	
44
    
	
Hazardous Materials
    	
16
    
	
HVAC
    	
23
    
	
Intention to Transfer Notice
    	
31
    
	
Landlord
    	
1, 42
    
	
Landlord Parties
    	
25
    
	
Landlord Repair Notice
    	
28
    
	
Lease
    	
1
    
	
Lease Commencement Date
    	
7
    
	
Lease Expiration Date
    	
7
    
	
Lease Term
    	
7
    

 

ii

 

	
Lease Year
    	
7
    
	
Lines
    	
46
    
	
Mail
    	
44
    
	
Net Worth
    	
32
    
	
Neutral Arbitrator
    	
8
    
	
New Improvements
    	
26
    
	
Notices
    	
44
    
	
Operating Expenses
    	
10
    
	
Option Conditions
    	
7
    
	
Option Rent
    	
7
    
	
Option Term
    	
7
    
	
Original Tenant
    	
5, 7
    
	
Outside Agreement Date
    	
8
    
	
PCBs
    	
16
    
	
Permitted Assignee
    	
32
    
	
Permitted Transferee
    	
32
    
	
Premises
    	
4
    
	
Project Common Areas
    	
5
    
	
Project
    	
4
    
	
Release
    	
17
    
	
Released
    	
17
    
	
Releases
    	
17
    
	
Rent
    	
9
    
	
Statement
    	
14
    
	
Subject Space
    	
29
    
	
Summary
    	
1
    
	
Superior Right Holders
    	
5
    
	
Tax Expenses
    	
10, 13
    
	
Tenant
    	
1, 42
    
	
Tenant Parties
    	
26
    
	
Tenant’s Subleasing Costs
    	
31
    
	
Tenant’s Agents
    	
16
    
	
Tenant’s Share
    	
10, 14
    
	
Third Party Offer Notice
    	
6
    
	
Transfer Notice
    	
29
    
	
Transfer Premium
    	
29, 30
    
	
Transferee
    	
29
    
	
Transfers
    	
29
    
	
Underlying Documents
    	
11
    

 

iii

 

Keystone Tech 7

 

LEASE

 

This Lease (the “Lease”), dated as of the date set forth in Section 1 of the Summary of Basic Lease Information (the “Summary”), below, is made by and between Durham KTP Tech 7, LLC, a Delaware limited liability company (“Landlord”), and Braeburn Pharmaceuticals, Inc., a Delaware corporation (“Tenant”).

 

SUMMARY OF BASIC LEASE INFORMATION

 

	
TERMS OF LEASE
    	
 
    	
DESCRIPTION
    
	
 
    	
 
    	
 
    
	
1.                                      Date:
    	
 
    	
December 31, 2015
    
	
 
    	
 
    	
 
    
	
2.                                      Premises
    	
 
    	
 
    
	
(Article 1).
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
2.1                               Building:
    	
 
    	
That certain office building containing   approximately 87,134 rentable square feet of space located at 627 Davis   Drive, Morrisville, North Carolina 27560.
    
	
 
    	
 
    	
 
    
	
2.2                               Premises:
    	
 
    	
Approximately 33,940 rentable square feet of space   commonly known as Suite     , as further set forth   in Exhibit C to the Lease.
    
	
 
    	
 
    	
 
    
	
3.                                      Lease   Term
    	
 
    	
 
    
	
(Article 2).
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
3.1                               Length   of Term:
    	
 
    	
One hundred twenty (120) months.
    
	
 
    	
 
    	
 
    
	
3.2                               Lease   Commencement
    	
 
    	
 
    
	
Date: 
    	
 
    	
The date of Lease execution.
    
	
 
    	
 
    	
 
    
	
3.3                               Rent   Commencement Date:
    	
 
    	
The date which is the earlier of (i) the date   Tenant takes possession of any part of the Premises (not including the Early Entry   Premises (as hereinafter defined)) for purposes of conducting business or   (ii) November 1, 2016.
    
	
 
    	
 
    	
 
    
	
3.4                               Lease   Expiration Date:
    	
 
    	
One hundred twenty (120) months after the Rent   Commencement Date.
    

 

1

 

4.                                      Base Rent (Article 3):

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Annual Base
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Monthly
    	
 
    	
Rent
    	
 
    
	
 
    	
 
    	
Annual
    	
 
    	
Installment
    	
 
    	
per Rentable
    	
 
    
	
Time Period
    	
 
    	
Base Rent
    	
 
    	
of Base Rent
    	
 
    	
Square Foot
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
*11/01/16 - 10/31/17
    	
 
    	
$
    	
780,620.00
    	
 
    	
**$
    	
65,051.67
    	
 
    	
$
    	
23.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/17 - 10/31/18
    	
 
    	
$
    	
804,038.60
    	
 
    	
$
    	
67,003.22
    	
 
    	
$
    	
23.69
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/18 - 10/31/19
    	
 
    	
$
    	
828,136.00
    	
 
    	
$
    	
69,011.33
    	
 
    	
$
    	
24.40
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/19 - 10/31/20
    	
 
    	
$
    	
852,912.20
    	
 
    	
$
    	
71,076.02
    	
 
    	
$
    	
25.13
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/20 - 10/31/21
    	
 
    	
$
    	
878,367.20
    	
 
    	
$
    	
73,197.27
    	
 
    	
$
    	
25.88
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/21 - 10/31/22
    	
 
    	
$
    	
904,840.40
    	
 
    	
$
    	
75,403.37
    	
 
    	
$
    	
26.66
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/22 - 10/31/23
    	
 
    	
$
    	
931,992.40
    	
 
    	
$
    	
77,666.03
    	
 
    	
$
    	
27.46
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/23 - 10/31/24
    	
 
    	
$
    	
959,823.20
    	
 
    	
$
    	
79,985.27
    	
 
    	
$
    	
28.28
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/24 - 10/31/25
    	
 
    	
$
    	
988,672.20
    	
 
    	
$
    	
82,389.35
    	
 
    	
$
    	
29.13
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11/01/25 - 10/31/26
    	
 
    	
$
    	
1,018,200.00
    	
 
    	
$
    	
84,850.00
    	
 
    	
$
    	
30.00
    	
 
    
												

 

*Note: The dates in this Base Rent table shall be adjusted based on the actual Rent Commencement Date.

 

**Note: Provided Tenant is not in default of the terms of this Lease, after expiration of any applicable notice and cure period, Tenant shall have no obligation to pay any Base Rent attributable to the first (1st) month of the Lease Term following the Rent Commencement Date (the “Abatement Period”). Tenant shall be obligated to pay Tenant’s Share of Direct Expenses attributable to the Abatement Period.

 

	
5.                                      Tenant   Improvement Allowance:
    	
 
    	
$115.00 per rentable   square foot of the Premises. Tenant shall construct improvements in the   Premises in accordance with the terms of the Tenant Work Letter attached   hereto as Exhibit D.
    
	
 
    	
 
    	
 
    
	
6.                                      NNN   Lease.
    	
 
    	
In addition to the Base   Rent, Tenant shall be responsible to pay Tenant’s Share of Direct Expenses in   accordance with the terms of Article 4 of the Lease.
    
	
 
    	
 
    	
 
    
	
7.                                      Tenant’s   Share
    	
 
    	
 
    
	
(Article 4):   
    	
 
    	
Approximately 38.95%.
    

 

2

 

	
8.                                      Permitted   Use
   (Article 5):
    	
 
    	
The Premises shall be used only for general office,   research and development, light manufacturing, engineering,   laboratory/pharmaceutical related manufacturing, storage and/or warehouse   uses, including, but not limited to, administrative offices and other lawful   uses reasonably related to or incidental to such specified uses, all   (i) consistent with first class life sciences projects in the Durham,   North Carolina area (“First Class Life   Sciences Projects”), and (ii) in compliance with, and subject   to, all Applicable Laws (as defined herein), and the terms of this Lease.
    
	
 
    	
 
    	
 
    
	
9.                                      Security   Deposit
   (Article 21):
    	
 
    	
The Security Deposit initially shall be $390,310.02,   and should Tenant fail to receive approval from the FDA to the Trial (as   defined herein) on or before the Trial Date, within seven (7) business   days after the Trial Date, Tenant shall increase the Security Deposit by the   sum of $195,155.01 for a total of $585,465.03. In the event Tenant receives   approval from the Food and Drug Administration (“FDA”) to Probuphine (the   “Trial”) on or before March 27, 2016 (the “Trial Date”) the Security   Deposit shall remain at $390,310.02 but shall be subject to reduction in   accordance with the schedule provided in Article 21 below. Provided Tenant   has not been in default under this Lease beyond applicable notice and cure   periods at any time prior to the end of the fifth (5th) full year of the   Term, as of the first day of the sixth (6th) year of the Lease Term the   Security Deposit shall be reduced to $226,210.11 (which amount equals 3   months’ Base Rent beginning in the sixth year of the Term).
    
	
 
    	
 
    	
 
    
	
10.                               Parking   Pass Ratio
   (Article 28):
    	
 
    	
Four (4) unreserved parking spaces for every   1,000 rentable square feet of the Premises, subject to the terms of Article 28   of the Lease.
    
	
 
    	
 
    	
 
    
	
11.                               Address of Tenant
    	
 
    	
Braeburn Pharmaceuticals, Inc.
    
	
(Section 29.18):
    	
 
    	
Attention: Craig Brown,
    
	
 
    	
 
    	
Vice President Commercialization and Manufacturing
    
	
 
    	
 
    	
47 Hulfish Street
    
	
 
    	
 
    	
Suite 441
    
	
 
    	
 
    	
Princeton, NJ 08542
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
12.                               Address of Landlord
    	
 
    	
 
    
	
(Section 29.18):
    	
 
    	
See Section 29.18 of the Lease.
    
	
 
    	
 
    	
 
    
	
13.                               Broker(s)
    	
 
    	
Cushman & Wakefield
    
	
(Section 29.24):
    	
 
    	
 
    

 

3

 

1.                                      PREMISES, BUILDING, PROJECT, AND COMMON AREAS

 

1.1                               Premises, Building, Project and Common Areas.

 

1.1.1                     The Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set forth in Section 2.2 of the Summary (the “Premises”). The outline of the Premises is set forth in Exhibit C attached hereto. The Premises contains the number of rentable square feet as set forth in Section 2.2 of the Summary. The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions herein set forth, and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such terms, covenants and conditions by it to be kept and performed and that this Lease is made upon the condition of such performance. The parties hereto hereby acknowledge that the purpose of Exhibit C is to show the approximate location of the Premises in the “Building,” as that term is defined in Section 1.1.2, below, only, and such Exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the “Common Areas,” as that term is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or the “Project,” as that term is defined in Section 1.1.2, below. Upon the full execution of the Lease, the Landlord shall provide Tenant access to the entire Premises for Tenant to allow entry to the Premises by its Contractor (as defined herein) to construct the Tenant Improvements (as defined herein), and Tenant shall accept the Premises in its presently existing “as-is” condition and Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises except as otherwise expressly set forth in this Lease or in the Tenant Work Letter attached hereto as Exhibit D.

 

Commencing upon the date this Lease is executed, Tenant shall have the right, at its own risk, to have full access to and to enter upon the portion of the Premises consisting of approximately but not more than 10,000 square feet (“Early Entry Premises”) as set forth in Exhibit C-1 attached hereto for any reasonable purpose associated with Tenant locating to the Premises; provided, however, in connection with such entry (i) Tenant shall not interfere with the performance of Landlord’s Work, if applicable, (ii) Tenant shall be subject to reasonable conditions set forth by Landlord, (iii) Tenant shall indemnify Landlord against any loss or liability arising therefrom, (iv) Tenant shall not so enter the Premises prior to the receipt by Landlord of written evidence that Tenant has obtained the insurance required to be maintained by Tenant pursuant to the terms of the Lease, (v) in general, the obligations of Tenant under this Lease (except for Rent and similar payment obligations) shall apply relative to any early access to the Premises, (vi) during such early possession, Tenant shall bear the burden of the risk of loss of Tenant’s personal property, trade fixtures and equipment, whether by theft, casualty or otherwise, (vii) Tenant shall cause its agents, employees and contractors to conduct their activities in the Premises in such a manner so as to not interfere with the occupancy of any other tenants of the Building, (viii) Tenant must coordinate all such pre-Rent Commencement Date entry into the Premises with Landlord’s property manager, and (ix) Tenant shall have delivered to Landlord the Security Deposit and Advance Rent prior to any pre-Rent Commencement Date entry into the Premises.

 

The Premises shall exclude Common Areas, including without limitation exterior faces of exterior walls, the entry, vestibules and main lobby of the Building, lobbies and common lavatories, the common stairways and stairwells, boiler room, sprinkler rooms, mechanical rooms, loading and receiving areas, electric and telephone closets, janitor closets, and pipes, ducts, conduits, wires and appurtenant fixtures and equipment serving exclusively or in common with other parts of the Building.

 

1.1.2                     The Building and The Project. The Premises are a part of the building set forth in Section 2.1 of the Summary (the “Building”). The term “Project,” as used in this Lease, shall mean (i) the Building and the Common Areas, (ii) the land (which is improved with landscaping, parking facilities and other improvements) upon which the Building and the Common Areas are located, (iii) the other buildings located in the project known as “Keystone Technology Park”, and the land upon which such adjacent buildings are located, and (iv) at Landlord’s discretion, any additional real property, areas, land, buildings or other improvements added thereto outside of the Project.

 

4

 

1.1.3                     Common Areas. Tenant shall have the non-exclusive right to use in common with other tenants in the Project, and subject to the Rules and Regulations referred to in Article 5 of this Lease, those portions of the Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas, together with such other portions of the Project designated by Landlord, in its discretion, including certain areas designated for the exclusive use of certain tenants, or to be shared by Landlord and certain tenants, are collectively referred to herein as the “Common Areas”). The Common Areas shall consist of the “Project Common Areas” and the “Building Common Areas.” The term “Project Common Areas,” as used in this Lease, shall mean the portion of the Project designated as such by Landlord or areas within the Project that the occupants of the Building are permitted to utilize pursuant to a recorded declaration and which areas shall be maintained in accordance with the declaration. The term “Building Common Areas,” as used in this Lease, shall mean the portions of the Common Areas located within the Building designated as such by Landlord. The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord and the use thereof shall be subject to the Rules and Regulations as Landlord may make from time to time upon at least thirty (30) days prior written notice to Tenant and provided such Rules and Regulations do not adversely affect any substantive right of Tenant hereunder. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas, provided that, in connection therewith, Landlord shall perform such closures, alterations, additions or changes in a commercially reasonable manner and, in connection therewith, shall use commercially reasonable efforts to minimize any material interference with Tenant’s use of and access to the Premises.

 

1.2                               Stipulation of Rentable Square Feet of Premises. For purposes of this Lease, “rentable square feet” of the Premises shall be deemed as set forth in Section 2.2 of the Summary.

 

1.3                               Right of First Offer. Commencing at the beginning of the thirteenth (13th) month following the Rent Commencement Date and expiring at the completion of the ninth (9th) year following the Rent Commencement Date, Landlord hereby grants to the Tenant named in the Summary (the “Original Tenant”) and its “Permitted Assignees”, as defined in Section 14.8, below, an on-going right of first offer with respect to 53,194 rentable square feet located in the Building as set forth in Exhibit A attached hereto, (the “First Offer Space”). Notwithstanding the foregoing, such first offer right of Tenant shall commence only following the expiration or earlier termination of the initial lease (including renewals) of the First Offer Space, and such right of first offer shall be subordinate to all rights of which are set forth in leases of space in the Project as of the date hereof, including any renewal, extension or expansion rights of such leases, regardless of whether such renewal, extension or expansion rights are executed strictly in accordance with their terms, or pursuant to a lease amendment or a new lease or not contained in such lease at all (collectively, the “Superior Right Holders”) with respect to such First Offer Space. To Landlord’s knowledge the only Superior Right Holders are Liquidia, and TriPoint Diagnostics. Tenant’s right of first offer shall not be applicable during any Option Term. Tenant’s right of first offer shall be on the terms and conditions set forth in this Section 1.3.

 

1.3.1                     Procedure for Offer. Landlord shall notify Tenant (the “First Offer Notice”) when Landlord receives a bona fide offer regarding the leasing of the First Offer Space or any portion thereof from a third party, provided that no Superior Right Holder wishes to lease such space. Pursuant to such First Offer Notice, Landlord shall offer to lease to Tenant the then available First Offer Space. The First Offer Notice shall describe the space so offered to Tenant and shall set forth the “First Offer Rent,” as that term is defined in Section 1.3.3 below, and the other economic terms upon which Landlord is willing to lease such space to Tenant.

 

1.3.2                     Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right of first offer with respect to the space described in the First Offer Notice, then within ten (10) business days of delivery of the First Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant’s election to exercise its right of first offer with respect to the entire space described in the First Offer Notice on the terms contained in such notice and for a period of ten (10) business days thereafter Tenant and Landlord shall negotiate the particular terms of Tenant’s lease of the First Offer Space with each party acting in good faith and with due diligence. If Tenant does not so notify Landlord within the ten (10) business day period for initial notice or if Landlord and Tenant fail to reach acceptable terms within the ten (10) business day negotiation period, then Landlord shall be free to lease the space described in the First Offer Notice to anyone to whom Landlord desires on any terms Landlord desires for a period of sixty (60) days and if Landlord fails to lease the space within such period or if the size of First Offer Space shall change by

 

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more than twenty percent (20%) Landlord shall be required to provide notice again in accordance with this Section 1.3 prior to leasing the First Offer Space to another party. Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right of first offer, if at all, with respect to all of the space offered by Landlord to Tenant at any particular time, and Tenant may not elect to lease only a portion thereof unless Landlord agrees, in Landlord’s sole discretion, to Tenant’s request to lease a different square footage.

 

1.3.3                     First Offer Space Rent. The “Rent,” as that term is defined in Section 4.1, below, payable by Tenant for the First Offer Space (the “First Offer Rent”) shall be equal to the “Fair Rental Value”, as defined in Section 2.2.2, below, as of the “First Offer Commencement Date,” as that term is defined in Section 1.3.5, below. Tenant may also utilize the arbitration process in Section 2.2.3 to determine the First Offer Rent.

 

1.3.4                     Construction In First Offer Space. Tenant shall take the First Offer Space in its “as is” condition, subject to any improvement allowance granted as a component of the Fair Rental Value, and the construction of improvements in the First Offer Space shall comply with the terms of Article 8 of this Lease.

 

1.3.5                     Amendment to Lease. If Tenant timely exercises Tenant’s right to lease the First Offer Space as set forth herein, Landlord and Tenant shall promptly thereafter execute an amendment to this Lease for such First Offer Space upon the terms and conditions as set forth in the First Offer Notice and this Section 1.3. Tenant shall commence payment of Rent for the First Offer Space, and the term of the First Offer Space shall commence upon the date of delivery of the First Offer Space to Tenant (the “First Offer Commencement Date”) and terminate on the date set forth in the First Offer Notice.

 

1.3.6                     Termination of Right of First Offer. The rights contained in this Section 1.3 shall be personal to the Original Tenant and its Permitted Assignees, and may only be exercised by the Original Tenant or a Permitted Assignee (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if the Original Tenant occupies the entire Premises. Tenant shall not have the right to lease First Offer Space, as provided in this Section 1.3, if, as of the date of the attempted exercise of any right of first offer by Tenant, or as of the scheduled date of delivery of such First Offer Space to Tenant, Tenant is in default under this Lease, after the expiration of any applicable notice and cure period, or Tenant has previously been in default, after the expiration of any applicable notice and cure period, under this Lease more than once.

 

1.4                               Expansion Right. Commencing on the Rent Commencement Date and expiring twelve (12) months thereafter, Landlord hereby grants to the Original Tenant and it Permitted Assignees, a one-time expansion right with respect to the First Offer Space (the “Expansion Right”). Notwithstanding the foregoing, such Expansion Right shall commence only following the expiration or earlier termination of leases of the Superior Right Holders (including renewals) of the First Offer Space, and such Expansion Right shall be subordinate to all Superior Right Holders with respect to such First Offer Space. Tenant’s Expansion Right shall be on the terms and conditions set forth in this Section 1.3 and Section 1.4.

 

1.4.1                     Procedure for Offer. In the event Landlord receives a valid bona fide offer from a Third Party for all or a portion of the First Offer Space following the Rent Commencement Date but prior to twelve (12) months thereafter, Landlord shall provide Tenant with notice of the details of such offer (the “Third Party Offer Notice”), provided that no Superior Right Holder wishes to lease such space. Pursuant to such Third Party Offer Notice, Landlord shall offer to lease to Tenant the then available First Offer Space. The Third Party Offer Notice shall describe the space so offered to Tenant and shall set forth the “Expansion Rent,” as that term is defined below. Additionally, if during the period of time following the Rent Commencement Date but prior to twelve (12) months thereafter, Tenant desires to expand into the First Offer Space, Tenant shall notify Landlord of its desire to exercise the Expansion Right. Tenant shall have the right to lease such First Offer Space that is then available (provided that no Superior Right Holder wishes to lease such space) at the Expansion Rent. Tenant may only exercise the Expansion Right if Tenant constructs the First Offer Space so that Premises combined with the First Offer Spaces contains at least a total of Forty-Five Percent (45%) of lab space/ pharmaceutical related manufacturing, and (ii) Landlord provides its approval of the design and layout of the lab space/pharmaceutical related manufacturing, such approval not to be unreasonably withheld. The rent under the Expansion Right for the First Offer Space (the “Expansion Rent”) shall be on the same terms and conditions as Tenant’s leasing of the Premises, adjusted on a pro-rata basis including the amortization of any Tenant Improvement

 

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Allowance or other amounts as reasonably determined by Landlord, but the Early Entry Premises shall not be factored into such determination.

 

2.                                      LEASE TERM; OPTION TERM

 

2.1                               Lease Term. The terms and provisions of this Lease shall be effective as of the date of this Lease. The term of this Lease (the “Lease Term”) shall be as set forth in Section 3.1 of the Summary, shall commence on the date set forth in Section 3.2 of the Summary (the “Lease Commencement Date”), and shall terminate on the date set forth in Section 3.4 of the Summary (the “Lease Expiration Date”) unless this Lease is sooner terminated as hereinafter provided. For purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve (12) month period during the Lease Term. At any time during the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth in Exhibit B, attached hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within ten (10) business days of receipt thereof.

 

2.2                               Option Term.

 

2.2.1                     Option Right. Landlord hereby grants to the originally named Tenant herein (“Original Tenant”), and its “Permitted Assignees”, as that term is defined in Section 14.8, below, two (2) options to extend the Lease Term for periods of five (5) years (the “Option Term”), which option shall be irrevocably exercised only by written notice delivered by Tenant to Landlord not more than fifteen (15) months nor less than twelve (12) months prior to the expiration of the initial Lease Term or the first Option Term, as applicable, provided that the following conditions (the “Option Conditions”) are satisfied: (i) as of the date of delivery of such notice, Tenant is not in default under this Lease, after the expiration of any applicable notice and cure period; (ii) as of the end of the Lease Term, Tenant is not in default under this Lease, after the expiration of any applicable notice and cure period; (iii) Tenant has not previously been in default under this Lease, after the expiration of any applicable notice and cure period, more than twice; and (iv) the Lease then remains in full force and effect and Original Tenant or a Permitted Assignee occupies the entire Premises at the time the option to extend is exercised and as of the commencement of the Option Term. Landlord may, at Landlord’s option, exercised in Landlord’s sole and absolute discretion, waive any of the Option Conditions in which case the option, if otherwise properly exercised by Tenant, shall remain in full force and effect. Upon the proper exercise of such option to extend, and provided that Tenant satisfies all of the Option Conditions (except those, if any, which are waived by Landlord), the Lease Term, as it applies to the Premises, shall be extended for a period of five (5) years. The rights contained in this Section 2.2 shall be personal to Original Tenant and any Permitted Assignees, and may be exercised by Original Tenant or such Permitted Assignees (and not by any assignee, sublessee or other “Transferee,” as that term is defined in Section 14.1 of this Lease, of Tenant’s interest in this Lease).

 

2.2.2                     Option Rent. The annual Rent payable by Tenant during the Option Term (the “Option Rent”) shall be equal to the “Fair Rental Value,” as that term is defined below, for the Premises as of the commencement date of the Option Term. The “Fair Rental Value,” as used in this Lease, shall be equal to the annual rent per rentable square foot (including additional rent and considering any “base year” or “expense stop” applicable thereto), including all escalations, at which tenants (pursuant to leases consummated within the twelve (12) month period preceding the first day of the Option Term), are leasing non-sublease, non-encumbered, non-equity space which is not significantly greater or smaller in size than the subject space, for a comparable lease term, in an arm’s length transaction, which comparable space is located in the “Comparable Buildings,” as that term is defined in this Section 2.2.2, below (transactions satisfying the foregoing criteria shall be known as the “Comparable Transactions”), taking into consideration the following concessions (the “Concessions”): (a) rental abatement concessions, if any, being granted such tenants in connection with such comparable space; (b) tenant improvements or allowances provided or to be provided for such comparable space, and taking into account the value, if any, of the existing improvements in the subject space, such value to be based upon the age, condition, design, quality of finishes and layout of the improvements and the extent to which the same can be utilized by a general office user other than Tenant; and (c) other reasonable monetary concessions being granted such tenants in connection with such comparable space; provided, however, that in calculating the Fair Rental Value, no consideration shall be given to (i) the fact that Landlord is or is not required to pay a real estate brokerage commission in connection with Tenant’s exercise of its right to extend the Lease Term, or the fact that landlords are or are not paying real estate brokerage commissions in connection with such comparable space, and (ii) any period

 

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of rental abatement, if any, granted to tenants in comparable transactions in connection with the design, permitting and construction of tenant improvements in such comparable spaces. The Fair Rental Value shall additionally include a determination as to whether, and if so to what extent, Tenant must provide Landlord with financial security, such as a letter of credit or guaranty, for Tenant’s Rent obligations in connection with Tenant’s lease of the Premises during the Option Term. Such determination shall be made by reviewing the extent of financial security then generally being imposed in Comparable Transactions from tenants of comparable financial condition and credit history to the then existing financial condition and credit history of Tenant (with appropriate adjustments to account for differences in the then-existing financial condition of Tenant and such other tenants). The Concessions (A) shall be reflected in the effective rental rate (which effective rental rate shall take into consideration the total dollar value of such Concessions as amortized on a straight-line basis over the applicable term of the Comparable Transaction (in which case such Concessions evidenced in the effective rental rate shall not be granted to Tenant)) payable by Tenant, or (B) at Landlord’s election, all such Concessions shall be granted to Tenant in kind. The term “Comparable Buildings” shall mean the Building and those other class A life sciences buildings which are comparable to the Building in terms of age (based upon the date of completion of construction or major renovation of to the building), quality of construction, level of services and amenities, size and appearance, and are located in Durham, North Carolina and the surrounding commercial area.

 

2.2.3                     Determination of Option Rent. In the event Tenant timely and appropriately exercises an option to extend the Lease Term, Landlord shall notify Tenant of Landlord’s determination of the Option Rent on or before the Lease Expiration Date. If Tenant, on or before the date which is ten (10) days following the date upon which Tenant receives Landlord’s determination of the Option Rent, in good faith objects to Landlord’s determination of the Option Rent, then Landlord and Tenant shall attempt to agree upon the Option Rent acting in good faith and using reasonable efforts. If Landlord and Tenant fail to reach agreement within ten (10) days following Tenant’s objection to the Option Rent (the “Outside Agreement Date”), then each party shall make a separate determination of the Option Rent, as the case may be, within five (5) days, and such determinations shall be submitted to arbitration in accordance with Sections 2.2.3.1 through 2.2.3.7, below. If Tenant fails to object to Landlord’s determination of the Option Rent within the time period set forth herein, then Tenant shall be deemed to have objected to Landlord’s determination of Option Rent.

 

2.2.3.1           Landlord and Tenant shall each appoint one arbitrator who shall be, at the option of the appointing party, a real estate broker or appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the leasing or appraisal, as the case may be, of other class A life sciences buildings located in the Durham, North Carolina market area and who is not currently or previously been in the employ of Landlord or Tenant. The determination of the arbitrators shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Option Rent is the closest to the actual Option Rent, taking into account the requirements of Section 2.2.2 of this Lease, as determined by the arbitrators. Each such arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.”

 

2.2.3.2           The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth hereinabove for qualification of the two Advocate Arbitrators, except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and Tenant’s counsel.

 

2.2.3.3           The three arbitrators shall, within thirty (30) days of the appointment of the Neutral Arbitrator, reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Option Rent, and shall notify Landlord and Tenant thereof.

 

2.2.3.4           The decision of the majority of the three arbitrators shall be binding upon Landlord and Tenant.

 

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2.2.3.5           If either Landlord or Tenant fails to appoint an Advocate Arbitrator within fifteen (15) days after the Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of Durham County to appoint such Advocate Arbitrator subject to the criteria in Section 2.2.3.1 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator.

 

2.2.3.6           If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either party may petition the presiding judge of the Superior Court of Durham County to appoint the Neutral Arbitrator, subject to criteria in Section 2.2.3.1 2 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such arbitrator.

 

2.2.3.7           The cost of the arbitration shall be paid by Landlord and Tenant equally.

 

2.2.3.8           In the event that the Option Rent shall not have been determined pursuant to the terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rent initially provided by Landlord to Tenant, and upon the final determination of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts of Option Rent due, and the appropriate party shall make any corresponding payment to the other party.

 

3.                                      BASE RENT

 

3.1                               Beginning on the Rent Commencement Date, Tenant shall pay, without prior notice or demand, to Landlord or Landlord’s agent (i) at the management office of the Project, or, at Landlord’s option, at such other place as Landlord may from time to time designate in writing, by a check for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, or (ii) by electronic funds transfer to the account of Landlord as provided to Tenant, base rent (“Base Rent”) as set forth in Section 4 of the Summary, payable in equal monthly installments as set forth in Section 4 of the Summary in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff or deduction whatsoever. The Base Rent for the first full month of the Lease Term shall be paid at the time of Tenant’s execution of this Lease (“Advance Rent”). If any Rent payment date (including the Rent Commencement Date) falls on a day of the month other than the first day of such month or if any payment of Rent is for a period which is shorter than one month, the Rent for any fractional month shall accrue on a daily basis for the period from the date such payment is due to the end of such calendar month or to the end of the Lease Term at a rate per day which is equal to 1/365 of the applicable annual Rent. All other payments or adjustments required to be made under the terms of this Lease that require proration on a time basis shall be prorated on the same basis. Base Rent and Additional Rent, as defined below, shall together be denominated “Rent.” Without limiting the foregoing, Tenant’s obligation to pay Rent shall not be discharged or otherwise affected by any law or regulation now or hereafter applicable to the Premises, or any other restriction on Tenant’s use, or (except as expressly provided herein) any casualty or taking, or any failure by Landlord to perform any covenant contained herein, or any other occurrence; and Tenant waives all rights now or hereafter existing to terminate or cancel this Lease or quit or surrender the Premises or any part thereof, or to assert any defense in the nature of constructive eviction to any action seeking to recover rent. Tenant’s covenants contained herein are independent and not dependent, and Tenant hereby waives the benefit of any statute or judicial law to the contrary.

 

4.                                      ADDITIONAL RENT

 

4.1                               General Terms. In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay “Tenant’s Share” of the annual “Direct Expenses,” as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease, respectively. Such payments by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of this Lease, are hereinafter collectively referred to as the “Additional Rent”. All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner as the Base Rent. Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of the Lease Term.

 

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4.2                               Definitions of Key Terms Relating to Additional Rent. As used in this Article 4, the following terms shall have the meanings hereinafter set forth:

 

4.2.1                     Intentionally Omitted.

 

4.2.2                     “Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”

 

4.2.3                     “Expense Year” shall mean each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in the event of any such change, Tenant’s Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change.

 

4.2.4                     “Operating Expenses” shall mean all actual and reasonable expenses, costs and amounts of every kind and nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof. Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost of supplying all utilities, the cost of operating, repairing, maintaining, and renovating the utility, telephone, mechanical, sanitary, storm drainage, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with a governmentally mandated transportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connection with the Project as reasonably determined by Landlord; (iv) the cost of landscaping, re-lamping, and all supplies, tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) the cost of parking area operation, repair, restoration, and maintenance; (vi) fees and other costs, including management and/or incentive fees, consulting fees, legal fees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance and repair of the Project; (vii) payments under any equipment rental agreements and the fair rental value of any management office space; (viii) subject to item (f), below, wages, salaries and other compensation and benefits, including taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Project; (ix) costs under any instrument pertaining to the sharing of costs by the Project; (x) operation, repair, maintenance and replacement of all systems and equipment and components thereof of the Project; (xi) the cost of janitorial, alarm, security and other services, replacement of wall and floor coverings, ceiling tiles and fixtures in Common Areas, maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (xii) amortization (including reasonable interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof; (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended to reduce expenses in the operation or maintenance of the Project, or any portion thereof, or to reduce current or future Operating Expenses or to enhance the safety or security of the Project or its occupants, (B) that are required to comply with present or anticipated mandatory conservation programs, (C) which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in the same good order or condition as on the Commencement Date, or (D) that are required under any governmental law or regulation that was not in force or effect as of the Commencement Date; provided, however, that any capital expenditure shall be amortized (including reasonable interest on the amortized cost as reasonably determined by Landlord) over such period of time as Landlord shall reasonably determine; and (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute “Tax Expenses” as that term is defined in Section 4.2.5, below, (xv) cost of tenant relation programs reasonably established by Landlord, and (xvi) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building, including, without limitation, any covenants, conditions and restrictions affecting the property, and reciprocal easement agreements affecting the property, any parking licenses, and any agreements with transit agencies affecting the Property (collectively, “Underlying Documents”). In the event that Landlord or Landlord’s managers or agents perform services for the benefit of the Building off-site which would otherwise be performed on-site (e.g. accounting), the cost of such services shall be reasonably allocated among the properties benefitting from such

 

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service and shall be included in Operating Expenses. Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include:

 

(a)                                 costs, including legal fees, space planners’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements made for new tenants occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any common areas of the Project);

 

(b)                                 except as set forth in items (xii), (xiii), and (xiv) above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, and costs of capital improvements (as distinguished from repairs or replacements);

 

(c)                                  costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;

 

(d)                                 any bad debt loss, rent loss, or reserves for bad debts or rent loss;

 

(e)                                  costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants;

 

(f)                                   the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;

 

(g)                                  amount paid as ground rental for the Project by the Landlord;

 

(h)                                 except for a property management fee to the extent expressly allowed above, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;

 

(i)                                     any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;

 

(j)                                    rentals and other related expenses incurred in leasing air conditioning systems, or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital improvement, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;

 

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(k)                                 all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;

 

(1)                                 any costs expressly excluded from Operating Expenses elsewhere in this Lease;

 

(m)                             rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the comparable buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;

 

(n)                                 costs arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors, or providers of materials or services;

 

(o)                                 costs incurred to comply with laws relating to the removal of hazardous material (as defined under Applicable Law) which was in existence in the Building or on the Project prior to the Lease Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions that it then existed in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto; and costs incurred to remove, remedy, contain, or treat hazardous material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental authority, if it had then had knowledge of the presence of such hazardous material, in the state, and under the conditions, that it then exists in the Building or on the Project, would have then required the removal of such hazardous material or other remedial or containment action with respect thereto;

 

(p)                                 costs incurred to comply with laws relating to the removal of Hazardous Materials (other than Hazardous Materials typically found in first class office buildings, such as recyclable materials and typical construction materials, and costs to comply with the Operation and Maintenance Plan described on Exhibit G);

 

(q)                                 the cost of special services, goods or materials provided to any other tenant of the Project free of charge, and not provided to Tenant;

 

(r)                                    Landlord’s general overhead expenses not related to the Project;

 

(s)                                   legal fees, arbitration fees, accountants’ fees (other than normal bookkeeping expenses) and other expenses incurred in connection with disputes of tenants or other occupants of the Project or associated with the enforcement of the terms of any leases with tenants or the defense of Landlord’s title to or interest in the Project or any part thereof;

 

(t)                                    costs incurred due to a violation by Landlord or any other tenant of the Project of the terms and conditions of a lease;

 

(u)                                 property management fees in excess of the market amount for comparable buildings in the RTP/Durham market;

 

(v)                                 any reserve funds;

 

(w)                               legal fees or other professional consulting fees (including without limitation architectural or engineering fees and expenses), arising out of the construction of the Project or the negotiation, preparation or enforcement of the provisions of any lease pursuant to which Landlord leases space in the Project to any third parties, including this Lease, or the financing or refinancing of the Project;

 

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(x)                                 any costs or expenses (including fines, penalties, interest and legal fees) incurred due to the violation of or failure to timely comply by Landlord with any applicable legal requirement;

 

(y)                                 capital or other expenditures incurred by Landlord in connection with the development or construction of any office building adjacent to the Building including, without limitation, any costs in connecting said adjacent building to the Building;

 

(z)                                  any mark-ups on any utility services in excess of Landlord’s costs therefor;

 

(aa)                          any charitable or political contributions.

 

If Landlord is not furnishing any particular work or service (the cost of which, if performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses shall be deemed to be increased by an amount equal to the additional Operating Expenses which would reasonably have been incurred during such period by Landlord if it had at its own expense furnished such work or service to such tenant. If the Project is not at least one hundred percent (100%) occupied during all or a portion of any Expense Year, Landlord shall make an appropriate adjustment to the components of Operating Expenses for such year to determine the amount of Operating Expenses that would have been incurred had the Project been one hundred percent (100%) occupied; and the amount so determined shall be deemed to have been the amount of Operating Expenses for such year.

 

4.2.5                     Taxes.

 

4.2.5.1           “Tax Expenses” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof.

 

4.2.5.2           Tax Expenses shall include, without limitation: (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises or the improvements thereon.

 

4.2.5.3           Any costs and expenses (including, without limitation, reasonable attorneys’ and consultants’ fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such expenses are incurred. Tax refunds shall be credited against Tax Expenses and refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no event shall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by Tenant as Additional Rent under this Article 4 for such Expense Year. The foregoing sentence shall survive the expiration or earlier termination of this Lease. If Tax Expenses for any period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand Tenant’s Share of any such increased Tax Expenses. Notwithstanding anything to the contrary contained in this Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes,

 

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capital stock taxes, inheritance and succession taxes, estate taxes, transfer tax or fee, federal and state income taxes, and other taxes to the extent applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable to operations at the Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease.

 

4.2.6                     “Tenant’s Share” is based upon the ratio that the rentable square feet of the Premises bears to the rentable square feet of the Building and, subject to adjustment pursuant to Section 1.2 above, is the percentage set forth in Section 7 of the Summary.

 

4.3                               Allocation of Direct Expenses. The parties acknowledge that the Building is a part of a multi-building project and that the costs and expenses incurred in connection with the Project (i.e., the Direct Expenses) should be shared between the tenants of the Building and the tenants of the other buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct Expenses are determined annually for the Project as a whole, and a portion of the Direct Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the tenants of the Building (as opposed to the tenants of any other buildings in the Project). Such portion of Direct Expenses allocated to the tenants of the Building shall include all Direct Expenses attributable solely to the Building and an equitable portion of the Direct Expenses attributable to the Project as a whole.

 

4.4                               Calculation and Payment of Additional Rent. Tenant shall pay to Landlord, in the manner set forth in Section 4.4.1, below, and as Additional Rent, Tenant’s Share of Direct Expenses for each Expense Year. If the Rent Commencement Date is a day other than the first day of an Expense Year, or if this Lease terminates or expires on a day other than the last day of an Expense Year, then Additional Rent shall be prorated in the manner provided in Section 3.1 above.

 

4.4.1                     Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall endeavor to give to Tenant within six (6) months following the end of each Expense Year, a statement (the “Statement”) which shall state the Direct Expenses incurred or accrued for such preceding Expense Year, and which shall indicate the amount of Tenant’s Share of Direct Expenses. Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term, Tenant shall pay, with its next installment of Base Rent due, the full amount of Tenant’s Share of Direct Expenses for such Expense Year, less the amounts, if any, paid during such Expense Year as “Estimated Direct Expenses,” as that term is defined in Section 4.4.2, below, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses, Tenant shall receive a credit in the amount of Tenant’s overpayment against Rent next due under this Lease. The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or Tenant from enforcing its rights under this Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant’s Share of Direct Expenses for the Expense Year in which this Lease terminates, Tenant shall pay to Landlord such amount within thirty (30) days, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses, Landlord shall, within thirty (30) days, deliver a check payable to Tenant in the amount of the overpayment. The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term. Notwithstanding the immediately preceding sentence, Tenant shall not be responsible for Tenant’s Share of any Direct Expenses attributable to any Expense Year which are first billed to Tenant more than two (2) calendar years after the earlier of the expiration of the applicable Expense Year or the Lease Expiration Date, provided that in any event Tenant shall be responsible for Tenant’s Share of Direct Expenses levied by any governmental authority or by any public utility companies at any time following the Lease Expiration Date which are attributable to any Expense Year (provided that Landlord delivers Tenant a bill for such amounts within two (2) years following Landlord’s receipt of the bill therefor).

 

4.4.2                     Statement of Estimated Direct Expenses. In addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the “Estimate Statement”) which shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimated Tenant’s Share of Direct Expenses (the “Estimated Direct Expenses”). The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to collect any Estimated Direct Expenses under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Direct Expenses theretofore delivered to the extent necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent due, a fraction of the Estimated Direct Expenses for the then-current

 

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Expense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.4.2). Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of such payment, and twelve (12) as its denominator. Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set forth in the previous Estimate Statement delivered by Landlord to Tenant.

 

4.5                               Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall be liable for and shall pay ten (10) days before delinquency, taxes levied against Tenant’s equipment, furniture, fixtures and any other personal property located in or about the Premises. If any such taxes on Tenant’s equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord’s property or if the assessed value of Landlord’s property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.

 

4.6                               Limit of Increases in Tenant’s Share of Operating Expenses. Notwithstanding the forgoing provisions, in no event shall the amount of Controllable Operating Expenses (as hereinafter defined) included within Tenant’s Share of Direct Expenses for any calendar year increase by more than six percent (6%) per calendar year on a cumulative basis during the Term. “Controllable Operating Expenses” shall mean all Operating Expenses other than the following: (a) insurance premiums, (b) cost of licenses, fees and permits, (c) utility rates, (d) all labor costs which are subject to union or collective bargaining agreements, (e) costs required by applicable legal requirements and governmental regulations, (f) costs which are based on weather or other factors beyond Landlord’s control, and (g) costs associated with an emergency or other circumstance where prompt action is desirable to alleviate conditions that require an immediate expenditure of funds in order to avoid, lessen or reduce the likelihood of personal injury or material damage to any real or personal property.

 

4.7                               Right of Audit. In the event Operating Expenses increase by more than four percent (4%) in any given Expense Year (as measured against the actual Operating Expenses for the immediately preceding Expense Year), Tenant or its designated representative, at its sole expense, will have the right once per calendar year during the Term to audit Landlord’s books and records relating to the Operating Expenses for the immediately preceding calendar year by providing written notice to Landlord of its desires to conduct such audit. This audit must take place on a mutually agreeable date during reasonable business hours at Landlord’s offices in the Raleigh-Durham area where it retains such records and only after Tenant has given Landlord at least fourteen (14) calendar days prior written notice of the date and time Tenant desires to commence such audit. If Tenant elects to audit Landlord’s books and records, Tenant will have the right to perform an audit of the Operating Expenses for the immediately preceding two (2) calendar years, such audit to be conducted by a reputable accounting firm and not on a contingency basis. If any such audit reveals an error by Landlord resulting in an overcharge to Tenant, then Landlord will promptly reimburse Tenant for the amount erroneously charged to Tenant. Likewise, if any such audit reveals an error resulting in Tenant being undercharged, then Tenant will promptly reimburse Landlord for the amount of such deficiency. If any audit performed by Tenant reveals that the Operating Expenses in total have been overstated by more than five percent (5%), Landlord will pay and/or reimburse Tenant for the cost of the audit not to exceed Two Thousand Five Hundred Dollars ($2,500.00) and if any audit performed by Tenant does not reveal that the Operating Expenses in total have been overstated at all, then Tenant will pay and/or reimburse Landlord for its costs incurred as a result of the audit not to exceed Two Thousand Five Hundred Dollars ($2,500.00).

 

5.                                      USE OF PREMISES

 

5.1                               Permitted Use. Tenant shall use the Premises solely for the Permitted Use set forth in Section 8 of the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld in Landlord’s sole discretion.

 

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5.2                               Prohibited Uses. Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to the provisions of the Rules and Regulations set forth in Exhibit E, attached hereto, or in violation of the laws of the United States of America, the State of North Carolina, or the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project, including, without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by Applicable Laws now or hereafter in effect, or any Underlying Documents. Tenant shall not do or permit anything to be done in or about the Premises which will in any way damage the reputation of the Project or obstruct or interfere with the rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to be used for any improper, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall comply with, and Tenant’s rights and obligations under the Lease and Tenant’s use of the Premises shall be subject and subordinate to, all recorded easements, covenants, conditions, and restrictions now or hereafter affecting the Project.

 

5.3                               Intentionally Omitted.

 

5.4                               Hazardous Materials.

 

5.4.1                     Tenant’s Obligations.

 

5.4.1.1           Prohibitions. As a material inducement to Landlord to enter into this Lease with Tenant, Tenant has fully and accurately completed Landlord’s Pre-Leasing Environmental Exposure Questionnaire (the “Environmental Questionnaire”), which is attached as Exhibit G. Tenant hereby represents, warrants and covenants that except for those chemicals or materials, and their respective quantities, specifically listed on the Environmental Questionnaire, neither Tenant nor Tenant’s employees, contractors and subcontractors of any tier, entities with a contractual relationship with Tenant (other than Landlord), or any entity acting as an agent or sub-agent of Tenant (collectively, “Tenant’s Agents”) will produce, use, store or generate any “Hazardous Materials,” as that term is defined below, on, under or about the Premises, nor cause or permit any Hazardous Material to be brought upon, placed, stored, manufactured, generated, blended, handled, recycled, used or “Released,” as that term is defined below, on, in, under or about the Premises. If any information provided to Landlord by Tenant on the Environmental Questionnaire, or otherwise relating to information concerning Hazardous Materials is false, incomplete, or misleading in any material respect, the same shall be deemed a default by Tenant under this Lease. Upon Landlord’s request, or in the event of any material change in Tenant’s use of Hazardous Materials at the Premises, Tenant shall deliver to Landlord an updated Environmental Questionnaire at least once a year. Landlord’s prior written consent shall be required to any Hazardous Materials use for the Premises not described on the initial Environmental Questionnaire, such consent not to be unreasonably withheld. Tenant shall not install or permit any underground storage tank on the Premises. In addition, Tenant agrees that it: (i) shall not cause or suffer to occur, the Release of any Hazardous Materials at, upon, under or within the Premises or any contiguous or adjacent premises; and (ii) shall not engage in activities at the Premises that could result in, give rise to, or lead to the imposition of liability upon Tenant or Landlord or the creation of an environmental lien or use restriction upon the Premises. For purposes of this Lease, “Hazardous Materials” means all flammable explosives, petroleum and petroleum products, waste oil, radon, radioactive materials, toxic pollutants, asbestos, polychlorinated biphenyls (“PCBs”), medical waste, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, including without limitation any chemical, element, compound, mixture, solution, substance, object, waste or any combination thereof, which is or may be hazardous to human health, safety or to the environment due to its radioactivity, ignitability, corrosiveness, reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other harmful or potentially harmful properties or effects, or defined as, regulated as or included in, the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” or “toxic substances” under any Environmental Laws; provided that “Hazardous Material” shall not be deemed to include cleaning supplies customarily used in the operation of the business, kept in such quantities as are customarily found in similar businesses, provided such cleaning supplies are used, stored and disposed of in all material respects in accordance with all laws regulating the same. For purposes of this Lease, “Release” or “Released” or “Releases” shall mean any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing, or other movement of Hazardous Materials into the environment.

 

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Any use or storage of Hazardous Materials by Tenant permitted pursuant to this Article 5 shall not exceed Tenant’s proportionate share (measured on a per floor basis), based on the standards of the BMBL (as defined below), of similarly classed Hazardous Materials. Notwithstanding the foregoing to the contrary, in no event shall Tenant or anyone claiming by through or under Tenant perform work at or above the risk category Biosafety Level 2 as established by the Department of Health and Human Services (“DHHS”) and as further described in the DHHS publication Biosafety in Microbiological and Biomedical Laboratories (5th Edition) (as it may be or may have been further revised, the “BMBL”) or such nationally recognized new or replacement standards as Landlord may reasonable designate). Tenant shall comply with all applicable provisions of the standards of the BMBL to the extent applicable to Tenant’s operations in the Premises.

 

5.4.1.2           Intentionally Omitted.

 

5.4.1.3           Notices to Landlord. Unless Tenant is required by Applicable Laws to give earlier notice to Landlord, Tenant shall notify Landlord in writing as soon as possible but in no event later than five (5) days after (i) the occurrence of any actual, alleged or threatened Release of any Hazardous Material in, on, under, from, about or in the vicinity of the Premises (whether past or present), regardless of the source or quantity of any such Release, or (ii) Tenant becomes aware of any regulatory actions, inquiries, inspections, investigations, directives, or any cleanup, compliance, enforcement or abatement proceedings (including any threatened or contemplated investigations or proceedings) relating to or potentially affecting the Premises, or (iii) Tenant becomes aware of any claims by any person or entity relating to any Hazardous Materials in, on, under or in the vicinity of the Premises, whether relating to damage, contribution, cost recovery, compensation, loss or injury. Collectively, the matters set forth in clauses (i), (ii) and (iii) above are hereinafter referred to as “Hazardous Materials Claims”. Tenant shall promptly forward to Landlord copies of all orders, notices, permits, applications and other communications and reports in connection with any Hazardous Materials Claims and Landlord agrees to keep any privileged information confidential in accordance with Section 29.28. Additionally, Tenant shall promptly advise Landlord in writing of Tenant’s discovery of any occurrence or condition on, in, under or about the Premises that could subject Tenant or Landlord to any liability, or restrictions on ownership, occupancy, transferability or use of the Premises under any “Environmental Laws,” as that term is defined below. Tenant shall not enter into any legal proceeding or other action, settlement, consent decree or other compromise with respect to any Hazardous Materials Claims without first notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to join and participate, as a party if Landlord so elects, in such proceedings and in no event shall Tenant enter into any agreements which are binding on Landlord or the Premises without Landlord’s prior written consent. Landlord shall have the right to appear at and participate in, any and all legal or other administrative proceedings concerning any Hazardous Materials Claim. For purposes of this Lease, “Environmental Laws” means all applicable present and future laws, including principles of common law, relating to the protection of human health, safety, wildlife or the environment, including, without limitation, (i) all requirements pertaining to reporting, licensing, permitting, investigation and/or remediation of emissions, discharges, Releases, or threatened Releases of Hazardous Materials, whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials; and (ii) all requirements pertaining to the health and safety of employees or the public. Environmental Laws include, but are not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC § 9601, et seq., the Hazardous Materials Transportation Authorization Act of 1994, 49 USC § 5101, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, and Hazardous and Solid Waste Amendments of 1984, 42 USC § 6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC § 1251, et seq., the Clean Air Act of 1966, 42 USC § 7401, et seq., the Toxic Substances Control Act of 1976, 15 USC § 2601, et seq., the Safe Drinking Water Act of 1974, 42 USC §§ 300f through 300j, the Occupational Safety and Health Act of 1970, as amended, 29 USC § 651 et seq., the Oil Pollution Act of 1990, 33 USC § 2701 et seq., the Emergency Planning and Community Right-To-Know Act of 1986, 42 USC § 11001 et seq., the National Environmental Policy Act of 1969, 42 USC § 4321 et seq., the Federal Insecticide, Fungicide and Rodenticide Act of 1947, 7 USC § 136 et seq., North Carolina Oil Pollution and Hazardous Substances Control Act, N.C. Gen. Stat. § 143-215.75 et seq., North Carolina Inactive Hazardous Sites Act, N.C. Gen. Stat. § 130A-310, North Carolina Water and Air Resources Act, N.C. Gen. Stat. § 143-211 et seq., 15A N.C. Admin. Code Subchapter 2L, and any other state or local law counterparts, as amended, as such Applicable Laws, are in effect as of the Lease Commencement Date, or thereafter adopted, published, or promulgated.

 

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5.4.1.4           Releases of Hazardous Materials. If any Release of any Hazardous Material in, on, under, from or about the Premises shall occur at any time during the Lease and/or if any other Hazardous Material condition exists at the Premises due to the acts or omissions of Tenant that requires response actions of any kind, in addition to notifying Landlord as specified above, Tenant, at its own sole cost and expense, shall (i) immediately comply with any and all reporting requirements imposed pursuant to any and all Environmental Laws, (ii) provide a written certification to Landlord indicating that Tenant has complied with all applicable reporting requirements, (iii) take any and all necessary investigation, corrective and remedial action in accordance with any and all applicable Environmental Laws, utilizing an environmental consultant reasonably approved by Landlord, all in accordance with the provisions and requirements of this Section 5.4, including, without limitation, Section 5.4.4, and (iv) take any such additional investigative, remedial and corrective actions as Landlord shall in its reasonable discretion deem necessary such that the Premises are remediated to a condition allowing use of the Premises for the Permitted Use, all in accordance with the provisions and requirements of this Section 5.4. Landlord may, as required by any and all Environmental Laws, report the Release of any Hazardous Material to the appropriate governmental authority. Tenant shall deliver to Landlord copies of all administrative orders, notices, demands, directives or other communications directed to Tenant from any governmental authority with respect to any Release of Hazardous Materials in, on, under, from, or about the Premises, together with copies of all investigation, assessment, and remediation plans and reports prepared by or on behalf of Tenant in response to any such regulatory order or directive.

 

5.4.1.5           Indemnification.

 

5.4.1.5.1           In General. Without limiting in any way Tenant’s obligations under any other provision of this Lease, Tenant shall be solely responsible for and shall protect, defend, indemnify and hold the Landlord Parties harmless from and against any and all claims, judgments, losses, damages, costs, expenses, penalties, enforcement actions, taxes, fines, remedial actions, liabilities (including, without limitation, actual attorneys’ fees, litigation, arbitration and administrative proceeding costs, expert and consultant fees and laboratory costs) including, without limitation, consequential damages and sums paid in settlement of claims, which arise during or after the Lease Term, whether foreseeable or unforeseeable, directly or indirectly arising out of or attributable to the presence, use, generation, manufacture, treatment, handling, refining, production, processing, storage, Release or presence of Hazardous Materials in, on, under or about the Premises by Tenant following the Lease Commencement Date. The foregoing obligations of Tenant shall include, including without limitation: (i) the costs of any required or necessary removal, repair, cleanup or remediation of the Premises, and the preparation and implementation of any closure, removal, remedial or other required plans; (ii) judgments for personal injury or property damages; and (iii) all reasonable costs and expenses incurred by Landlord in connection therewith. It is the express intention of the parties to this Lease that Tenant assumes all such liabilities, and holds Landlord harmless from all such liabilities, associated with the environmental condition of the Premises, arising on or after the date Tenant takes possession of the Premises. Notwithstanding anything in this Section 5.4.1.5.1 to the contrary, Tenant’s indemnity of Landlord set forth herein shall not be applicable to any such liabilities above to the extent (a) resulting from the negligence or willful misconduct of Landlord, its agents or contractors or (b) Hazardous Materials conditions migrating to the Premises or the Property from any other tenant’s premises in the Building or from another property adjacent to or in the vicinity of the Property, except to the extent that Tenant’s construction activities and/or Tenant’s other negligent acts or omissions caused or exacerbated the subject liabilities. Tenant shall have the burden of proof to prove (a) or (b) above are applicable.

 

5.4.1.5.2           Limitations. Landlord warrants and represents that Landlord has not engaged in the Release of any Hazardous Materials subsequent to the date of the “Phase I Environmental Site Assessment Report” bearing ECS Project No. 06-13490-A, prepared on behalf of Durham KTP Holdings, LLC c/o Longfellow Real Estate Partners, LLC as of August 6, 2015 (“ECS Phase I”). Landlord further warrants and represents that, to Landlord’s knowledge, on or after the effective date of the ECS Phase I report, Landlord has not received a summons, citation, directive, letter or other communication, written or oral, from any state agency or the U.S. Government concerning the Premises, the Project or any intentional or unintentional action or Landlord or any occupant’s part as a result of a Release of any Hazardous Materials.

 

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5.4.1.6           Compliance with Environmental Laws. Without limiting the generality of Tenant’s obligation to comply with Applicable Laws as otherwise provided in this Lease, Tenant shall, at its sole cost and expense, comply with all Environmental Laws. Tenant shall obtain and maintain any and all necessary permits, licenses, certifications and approvals appropriate or required for the use, handling, storage, and disposal of any Hazardous Materials used, stored, generated, transported, handled, blended, or recycled by Tenant on the Premises. Landlord shall have a continuing right, without obligation, to require Tenant to obtain, and to review and inspect any and all such permits, licenses, certifications and approvals, together with copies of any and all Hazardous Materials management plans and programs, any and all Hazardous Materials risk management and pollution prevention programs, and any and all Hazardous Materials emergency response and employee training programs respecting Tenant’s use of Hazardous Materials. Upon request of Landlord, Tenant shall deliver to Landlord a narrative description explaining the nature and scope of Tenant’s activities involving Hazardous Materials and showing to Landlord’s satisfaction compliance with all Environmental Laws and the terms of this Lease.

 

5.4.2                     Assurance of Performance.

 

5.4.2.1           Environmental Assessments In General. Landlord may, but shall not be required to, engage from time to time such contractors as Landlord determines to be appropriate to perform “Environmental Assessments,” as that term is defined below, to ensure Tenant’s compliance with the requirements of this Lease with respect to Hazardous Materials. For purposes of this Lease, “Environmental Assessment” means an assessment including, without limitation: (i) an environmental site assessment conducted in accordance with the then-current standards of the American Society for Testing and Materials and meeting the requirements for satisfying the “all appropriate inquiries” requirements; and (ii) sampling and testing of the Premises based upon potential recognized environmental conditions or areas of concern or inquiry identified by the environmental site assessment.

 

5.4.2.2           Costs of Environmental Assessments. All costs and expenses incurred by Landlord in connection with any such Environmental Assessment initially shall be paid by Landlord; provided that if any such Environmental Assessment shows that Tenant has failed to comply with the provisions of this Section 5.4, then all of the actual and reasonable costs and expenses of such Environmental Assessment shall be reimbursed by Tenant as Additional Rent within thirty (30) days after receipt of written demand therefor.

 

5.4.3                     Tenant’s Obligations upon Surrender. At the expiration or earlier termination of the Lease Term, Tenant, at Tenant’s sole cost and expense, shall: (i) cause an Environmental Assessment of the Premises to be conducted in accordance with Section 15.3; (ii) cause all Hazardous Materials to be removed from the Premises and disposed of in accordance with all Environmental Laws; and (iii) cause to be removed all containers installed or used by Tenant or Tenant’s Agents to store any Hazardous Materials on the Premises, and cause to be repaired any damage to the Premises caused by such removal.

 

5.4.4                     Clean-up.

 

5.4.4.1           Environmental Reports: Clean-Up. If any written report, including any report containing results of any Environmental Assessment (an “Environmental Report”) shall indicate (i) the presence of any Hazardous Materials as to which Tenant has a removal or remediation obligation under this Section 5.4, and (ii) that as a result of same, the investigation, characterization, monitoring, assessment, repair, closure, remediation, removal, or other clean-up (the “Clean-up”) of any Hazardous Materials is required, Tenant shall immediately prepare and submit to Landlord within thirty (30) days after receipt of the Environmental Report a comprehensive plan, subject to Landlord’s written approval, specifying the actions to be taken by Tenant to perform the Clean-up so that the Premises are restored to the conditions required by this Lease. Upon Landlord’s approval of the Clean-up plan, Tenant shall, at Tenant’s sole cost and expense, without limitation on any rights and remedies of Landlord under this Lease, immediately implement such plan with a consultant reasonably acceptable to Landlord and proceed to Clean-Up Hazardous Materials in accordance with all Applicable Laws and as required by such plan and this Lease. If, within thirty (30) days after receiving a copy of such Environmental Report, Tenant fails either (a) to complete such Clean-up, or (b) with respect to any Clean-up that cannot be completed within such thirty-day period, fails to proceed with diligence to prepare the Clean-up plan and complete the Clean-up as promptly as practicable,

 

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then Landlord shall have the right, but not the obligation, and without waiving any other rights under this Lease, to carry out any Clean-up recommended by the Environmental Report or required by any governmental authority having jurisdiction over the Premises, and recover all of the costs and expenses thereof from Tenant as Additional Rent, payable within ten (10) days after receipt of written demand therefor.

 

5.4.4.2           No Rent Abatement. Tenant shall continue to pay all Rent due or accruing under this Lease during any Clean-up, and shall not be entitled to any reduction, offset or deferral of any Base Rent or Additional Rent due or accruing under this Lease during any such Clean-up.

 

5.4.4.3           Surrender of Premises. Tenant shall complete any Clean-up prior to surrender of the Premises upon the expiration or earlier termination of this Lease, and shall fully comply with all Environmental Laws and requirements of any governmental authority with respect to such completion, including, without limitation, fully comply with any requirement to file a risk assessment, mitigation plan or other information with any such governmental authority in conjunction with the Clean-up prior to such surrender where practicable. Tenant shall obtain and deliver to Landlord a letter or other written determination from the overseeing governmental authority confirming that the Clean-up has been completed in accordance with all requirements of such governmental authority and that no further response action of any kind is required for the use of the Premises for the Permitted Use (“Closure Letter”). Upon the expiration or earlier termination of this Lease, Tenant shall also be obligated to close all permits obtained in connection with Hazardous Materials in accordance with Applicable Laws.

 

5.4.4.4           Failure to Timely Clean-Up. Should any Clean-up for which Tenant is responsible not be completed, or should Tenant not receive the Closure Letter and any governmental approvals required under Environmental Laws in conjunction with such Clean-up prior to the expiration or earlier termination of this Lease, and Tenant’s failure to receive the Closure Letter is prohibiting Landlord from leasing the Premises or any part thereof to a third party, or prevents the occupancy or use of the Premises or any part thereof by a third party, then Tenant shall be liable to Landlord as a holdover tenant (as more particularly provided in Article 16) until Tenant has fully complied with its obligations under this Section 5.4.

 

5.4.5                     Confidentiality.

 

5.4.5.1           Unless compelled to do so by Applicable Law, Tenant agrees that Tenant shall not disclose, discuss, disseminate or copy any information, data, findings, communications, conclusions and reports regarding the environmental condition of the Premises to any Person (other than Tenant’s consultants, attorneys, property managers and employees that have a need to know such information), including any governmental authority, without the prior written consent of Landlord. In the event Tenant reasonably believes that disclosure is compelled by Applicable Law, it shall provide Landlord ten (10) days’ advance notice of disclosure of confidential information so that Landlord may attempt to obtain a protective order. Tenant may additionally release such information to bona fide prospective purchasers or lenders, subject to any such parties’ written agreement to be bound by the terms of this Section 5.4.

 

5.4.5.2           Unless compelled to do so by Applicable Law, Landlord agrees that Landlord shall not disclose, discuss, disseminate or copy any information, data, findings, communications, conclusions and reports regarding environmental information provided to or related to Tenant or Tenant’s business on the Premises, including but not limited to the Environmental Summary, to any Person (other than Landlord’s consultants, attorneys, property managers and employees that have a need to know such information), including any governmental authority, without the prior written consent of Tenant. In the event Landlord reasonably believes that disclosure is compelled by Applicable Law, it shall provide Tenant ten (10) days’ advance notice of disclosure of confidential information so that Tenant may attempt to obtain a protective order.

 

5.4.6                     Copies of Environmental Reports. Within thirty (30) days of receipt thereof, Tenant shall provide Landlord with a copy of any and all environmental assessments, audits, studies and reports regarding Tenant’s activities with respect to the Premises, or ground water beneath the Land, or the environmental condition or Clean-up thereof. Tenant shall be obligated to provide Landlord with a copy of such materials without regard to whether such materials are generated by Tenant or prepared for Tenant, or how Tenant comes into possession of such materials.

 

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5.4.7                     Intentionally Omitted.

 

5.4.8                     Signs, Response Plans, Etc. Tenant shall be responsible for posting on the Premises any signs required under applicable Environmental Laws. Tenant shall also complete and file any business response plans or inventories required by any Applicable Laws. Tenant shall concurrently file a copy of any such business response plan or inventory with Landlord.

 

5.4.9                     Survival. Each covenant, agreement, representation, warranty and indemnification made by Tenant and Landlord set forth in this Section 5.4 shall survive the expiration or earlier termination of this Lease and shall remain effective until all obligations under this Section 5.4 have been completely performed and satisfied.

 

6.                                      SERVICES AND UTILITIES

 

6.1                               Landlord Provided Services. Landlord shall provide the following services on all days (unless otherwise stated below) during the Lease Term.

 

6.1.1                     Subject to limitations imposed by all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide adequate electrical wiring and facilities for connection to Tenant’s lighting fixtures and incidental use equipment, provided that the connected electrical load of the incidental use equipment and the connected electrical load of Tenant’s lighting fixtures does not exceed Tenant’s Share of the system capacity. Tenant shall bear the cost of replacement of lamps, starters and ballasts for non-Building standard lighting fixtures within the Premises.

 

6.1.2                     Landlord shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes in the Building Common Areas.

 

6.1.3                     Landlord shall provide a dumpster and/or trash compactor at the Building for use by Tenant and other tenants for ordinary office waste (and not for Hazardous Materials).

 

6.1.4                     Landlord shall provide snow and ice removal in the Common Areas, except areas where such responsibility is delegated to a tenant, similar to other buildings in the Research Triangle Park and Durham markets.

 

6.2                               Tenant Provided Services and Utilities. Except as otherwise expressly set forth in Section 6.1, above, Tenant will be responsible, at its sole cost and expense, for the furnishing of all services and utilities to the Premises, electricity, water, telephone, janitorial and interior Building security services.

 

6.2.1                     Landlord shall not provide janitorial or trash services for the Premises except as expressly provided in Section 6.1.3, above. Tenant shall be solely responsible for performing all janitorial and trash services and other cleaning of the Premises, all in compliance with Applicable Laws. In the event such service is provided by a third party janitorial service, and not by employees of Tenant, such service shall be a janitorial service approved in advance by Landlord, (Landlord shall provide Tenant with a list of approved vendors upon Tenant’s request). The janitorial and cleaning of the Premises shall be adequate to maintain the Premises in a manner consistent with Comparable Buildings.

 

6.2.2                     Subject to Applicable Laws and the other provisions of this Lease (including, without limitation, the Rules and Regulations, and except in the event of an emergency), Tenant shall have access to the Building, the Premises and the Common Areas of the Building, other than Common Areas requiring access with a Building engineer, twenty-four (24) hours per day, seven (7) days per week, every day of the year; provided, however, that Tenant shall only be permitted to have access to and use of the limited-access areas of the Building during the normal operating hours of such portions of the Building.

 

Tenant shall cooperate fully with Landlord at all times and abide by all regulations and requirements that Landlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical

 

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and plumbing systems. Landlord agrees to provide and maintain and keep in continuous service utility connections to the Project, including electricity, water and sewage connections. Except as aforesaid, Landlord shall have no obligation to provide any services or utilities to the Building, including, but not limited to heating, ventilation and air-conditioning, electricity, water, telephone, janitorial and interior Building security services; provided, however, if Landlord causes an interruption in any utility service provided to the Premises by Landlord, Landlord shall take immediate action to remedy the interruption in order to fulfill its obligations under this Lease.

 

6.2.3                     Tenant shall pay for all water, gas, heat, light, power, telephone, internet service, cable television, other telecommunications and other utilities supplied to the Premises, together with any fees, surcharges and taxes thereon, whether part of Operating Expenses or as provided under this Article 6. Tenant shall pay all costs and expenses for any separately metered utilities provided exclusively to the Premises directly to the applicable service provider. Tenant shall pay all actual out-of-pocket costs and expenses, without mark-up, for utility charges that are based on a check- or sub-metering metering installation based on Landlord’s reading of such meters and directly to Landlord, including without limitation for utility charges for power, gas and water serving the HVAC system of the Building (which are measured by the control management system of the Building based on air volume provided to each tenant space). Additional Rent for such utilities may be reasonably estimated monthly by Landlord, based on actual readings of sub- and “check” meters where applicable, and shall be paid monthly by Tenant within thirty (30) days after being billed with a final accounting based upon actual bills received from the utility providers following the conclusion of each fiscal year of the Building.

 

6.3                               Metering. If necessary, Landlord may install devices to separately meter any utility use (or use other reasonable industry standard methods to reasonably estimate such use) and in such event Tenant shall pay the cost directly to Landlord, within thirty (30) days after Tenant’s receipt of an invoice therefor, at the rates charged by the public utility company furnishing the same, including the cost of installing, testing and maintaining of such metering devices. Tenant’s use of electricity and any other utility shall never exceed the capacity of the feeders to the Project or the risers or wiring installation or Tenant’s Share of the per floor limits as reasonably determined by Landlord.

 

6.4                               Interruption of Use. Tenant agrees that, to the extent permitted pursuant to Applicable Laws, Landlord shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause not under Landlord’s reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Tenant’s business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Article 6.

 

6.5                               Extraordinary Repairs. If the need for a repair which Landlord is responsible to make rises to the level that it has a material and adverse impact on Tenant’s use or occupancy of the Premises and Tenant notifies Landlord of the extent of such impact at the time it provides notice of the need for the repair, then as long as the need for repair is not the result of the negligence, misconduct or acts or omissions of Tenant or Tenant’s invitees, Tenant shall be entitled to perform such repair using Landlord’s standard vendors beginning on the seventh (7th) day after Landlord’s receipt of Tenant’s notice if Landlord has not commenced the repair and in such case Landlord shall reimburse Tenant the reasonable costs incurred to make such repair within thirty (30) days of receipt of invoices for such work. In no event shall the provisions above apply to any repairs which are outside of the scope of Landlord’s obligations under this Lease, such as repairs which are the responsibility of the applicable utility provider or the responsibility of Tenant, and shall not apply to work or repairs which are covered by Section 11 of this Lease which shall control repairs necessary as a result of casualty.

 

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7.                                      REPAIRS

 

Tenant shall, at Tenant’s own expense, keep the Premises, including all improvements, fixtures, furnishings, heating, ventilation (including exhaust) and air conditioning (“HVAC”), and systems and equipment therein (including, without limitation, plumbing fixtures and equipment such as dishwashers, garbage disposals, and insta-hot dispensers), and the floor of the Building on which the Premises are located, in good order, repair and condition at all times during the Lease Term. In addition, Tenant shall, at Tenant’s own expense, but under the supervision and subject to the prior reasonable approval of Landlord, and within any reasonable period of time specified by Landlord, promptly and adequately repair all damage to the Premises and replace or repair all damaged, broken, or worn fixtures and appurtenances, except for damage caused by ordinary wear and tear or beyond the reasonable control of Tenant; provided however, that, at Landlord’s option, or if Tenant fails to make such repairs, Landlord may, but need not, make such repairs and replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established for the Building and/or the Project) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement with such repairs and replacements forthwith upon being billed for same. Without limitation, Tenant shall be responsible for heating, ventilating and air-conditioning systems and utility services serving the Premises (to the extent serving Tenant exclusively), and Tenant shall secure, pay for, and keep in force contracts with appropriate and reputable service companies reasonably approved by Landlord providing for the regular maintenance of such systems. Notwithstanding the foregoing, Landlord shall be responsible for repairs to the exterior walls, foundation and roof (including roof membrane) of the Building, gutter, the structural portions of the floors of the Building, and the base building systems and equipment of the Building and Common Areas (to the extent not serving Tenant exclusively), except to the extent that such repairs are required due to the negligence or willful misconduct of Tenant; provided, however, that if such repairs are due to the negligence or willful misconduct of Tenant, Landlord shall nevertheless make such repairs at Tenant’s expense, or, if covered by Landlord’s insurance, Tenant shall only be obligated to pay any deductible in connection therewith. Subject to the terms of Article 27, below, Landlord may, but shall not be required to, enter the Premises at all reasonable times and upon reasonable prior notice to make such repairs, alterations, improvements or additions to the Premises or to the Project or to any equipment located in the Project as Landlord shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree.

 

For the three (3) HVAC units existing at the Premises on the Rent Commencement Date which are listed on Exhibit I and which are not being replaced prior to or at the beginning of the Term (the “Existing Units”) by Landlord, Landlord at its sole cost and expense, shall be responsible for repairs or replacements to the Existing Units, not including routine maintenance or the costs of Tenant’s service agreement or damage caused by Tenant or Tenant’s employees, contractors or agents, which exceed $1,500.00 per unit per year as identified either through service calls from Tenant or as otherwise identified in the course of the preventative maintenance and/or inspections. Tenant shall notify Landlord prior to performing such repairs and Landlord shall either permit Tenant’s vendor to perform the work at Landlord’s expense or Landlord shall contract for such work to be performed. If an Existing Unit needs to be replaced during the Term of this Lease (other than as a result of the negligent or willful acts or omissions of Tenant or its agents), then Landlord shall replace such Existing Unit with a new unit, using Building standard materials, and the cost thereof shall be paid by Landlord and thereafter Tenant shall reimburse to Landlord, as Additional Rent hereunder, the annual amortization (to the extent applicable to the remaining Term or any Option Term based upon the estimated useful life of the applicable Existing Unit that was replaced) of such cost in equal monthly installments on the first day of each month during the remaining Term or any Option Term. After any Existing Unit is replaced with a new unit, Tenant shall, at Tenant’s sole expense, be responsible for all future repairs, replacement and maintenance for such replaced HVAC system for the remainder of the Term as it may be extended.

 

8.                                      ADDITIONS AND ALTERATIONS

 

8.1                               Landlord’s Consent to Alterations. Tenant may not make any improvements, alterations, additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the “Alterations”) without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than fifteen (15) business days prior to the commencement thereof, and which consent shall not be unreasonably withheld, conditioned or delayed by Landlord,

 

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provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural portions or the systems or equipment of the Building or is visible from the exterior of the Building. Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following ten (10) business days notice to Landlord, but without Landlord’s prior consent, to the extent that such Alterations (i) do not affect the Building systems or equipment, (ii) are not visible from the exterior of the Building, and (iii) cost less than $50,000.00 for a particular job of work. (See also Section 6.5).

 

8.2                               Prior to commencing any Alterations affecting air distribution or disbursement from ventilation systems serving Tenant or the Building, including without limitation the installation of Tenant’s exhaust systems, Tenant shall provide Landlord with a third party report from a consultant, and in a form reasonably acceptable to Landlord, showing that such work will not adversely affect the ventilation systems or air quality of the Building (or of any other tenant in the Building) and shall, upon completion of such work, provide Landlord with a certification reasonably satisfactory to Landlord from such consultant confirming that no such adverse effects have resulted from such work.

 

8.3                               Manner of Construction. Landlord may impose, as a condition of its consent to any and all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable, including, but not limited to, the requirement that Tenant utilize for such purposes only contractors, subcontractors, materials, mechanics and materialmen selected by Tenant and approved by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed), the requirement that upon Landlord’s request at the time Landlord approves said Alterations (subject to the terms of Section 8.5. below), Tenant shall, at Tenant’s expense, remove such Alterations upon the expiration or any early termination of the Lease Term. Tenant shall construct such Alterations and perform such repairs in a good and workmanlike manner, in conformance with any and all applicable federal, state, county or municipal laws, rules and regulations and pursuant to a valid building permit, issued by the city in which the Building is located (or other applicable governmental authority). Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas. Upon completion of any Alterations (or repairs), Tenant shall deliver to Landlord copies of final lien waivers from all contractors, subcontractors and materialmen who performed such work. In addition to Tenant’s obligations under Article 9 of this Lease, upon completion of any Alterations, Tenant shall deliver to the Project construction manager a reproducible copy of the “as built” drawings of the Alterations as well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations.

 

8.4                               Payment for Improvements. If Tenant orders any work directly from Landlord, Tenant shall pay to Landlord an amount equal to five percent (5%) of the cost of such work to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord’s involvement with such work. If Tenant does not order any work directly from Landlord, Tenant shall reimburse Landlord for Landlord’s reasonable, actual, out-of-pocket costs and expenses actually incurred in connection with Landlord’s review of such work including a construction management fee in the amount of four percent (4%) of the total costs of such work.

 

8.5                               Construction Insurance. In addition to the requirements of Article 10 of this Lease, in the event that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant carries “Builder’s All Risk” insurance (to the extent that the cost of the work shall exceed $100,000.00) in an amount approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may reasonably require, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In addition, Tenant’s contractors and subcontractors shall be required to carry Commercial General Liability Insurance in an amount approved by Landlord and otherwise in accordance with the requirements of Article 10 of this Lease and such general liability insurance shall name the Landlord Parties as additional insureds. Landlord may, in its discretion, require Tenant to obtain and record a statutory form of lien bond, or obtain performance and payment bonds, or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a co-obligee, in each case in form and substance reasonably satisfactory to Landlord. In addition, Tenant’s contractors and subcontractors shall be required to carry workers compensation insurance with a waiver of subrogation in favor of Landlord Parties.

 

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9.                                      COVENANT AGAINST LIENS

 

Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials or services furnished or obligations incurred by or on behalf of Tenant, and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without limitation, reasonable attorneys’ fees and costs) arising out of same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any work, services or obligations related to the Premises giving rise to any such liens or encumbrances (or such additional time as may be necessary under Applicable Laws) to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility (to the extent applicable pursuant to then Applicable Laws). Tenant shall remove any such lien or encumbrance by statutory lien bond or otherwise within ten (10) business days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary to remove such lien or encumbrance, without being responsible for investigating the validity thereof.

 

10.                               INSURANCE

 

10.1                        Indemnification and Waiver. Except for loss or damage due to the gross negligence or willful acts of any Landlord Parties (as defined herein),Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises from any cause whatsoever (including, but not limited to, any personal injuries resulting from a slip and fall in, upon or about the Premises) and agrees that Landlord, its lenders, partners, subpartners and their respective officers, agents, servants, employees, and independent contractors (collectively, “Landlord Parties”) shall not be liable for, and are hereby released from any responsibility for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant. Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all loss, cost, damage, injury, expense and liability (including without limitation court costs and reasonable attorneys’ fees) during the Lease Term, or any period of Tenant’s occupancy of the Premises prior to the commencement or after the expiration of the Lease Term, incurred in connection with or arising from any cause in, on or about the Premises (including, but not limited to, a slip and fall), any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the terms of this Lease, either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the gross negligence or willful misconduct of Landlord. Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant’s occupancy of the Premises, Tenant shall pay to Landlord its reasonable costs and expenses incurred in such suit, including without limitation, its actual professional fees such as reasonable appraisers’, accountants’ and attorneys’ fees. The provisions of this Section 10.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination.

 

Subject to the limitations on Landlord’s liability as set forth in this Lease, including without limitation, Section 29.13 hereof, and subject to Section 10.5, Landlord shall indemnify, defend and save Tenant and its lenders, partners, subpartners, and their respective officers, agents, servants, employees, and independent contraltos (collectively, “Tenant Parties”) harmless against any and all actual and direct claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including without limitation reasonable attorneys’ fees (except to the extent Landlord or its insurer shall conduct a defense), but excluding any consequential, punitive or exemplary damages of any nature whatsoever) arising out of injury to Tenant (including death) or Tenant’s tangible property occurring as a direct result of Landlord’s acts or gross negligence in its operation of the Building Common Areas.

 

10.2                        Tenant’s Compliance With Landlord’s Property Insurance. Tenant shall, at Tenant’s expense, comply with all insurance company requirements pertaining to the use of the Premises. If Tenant’s conduct or use of the Premises for any purpose other than customary, general office use causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body.

 

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10.3                        Tenant’s Insurance. Tenant shall maintain the following coverages in the following amounts.

 

10.3.1              Commercial General Liability Insurance on an occurrence form covering the insured against claims of bodily injury, personal and advertising injury and property damage (including loss of use thereof) arising out of Tenant’s operations, products/completed operations, and contractual liability including a Broad Form endorsement covering the insuring provisions of this Lease and the performance by Tenant of the indemnity agreements set forth in Section 10.1 of this Lease, and including, solely on a claims-made basis, products and completed operations coverage, for limits of liability of not less than:

 

	
Bodily Injury   and
    	
$3,000,000 each   occurrence
    
	
Property Damage   Liability
    	
$3,000,000   annual aggregate
    
	
 
    	
 
    
	
Personal and   Advertising Injury Liability
    	
$3,000,000 each   occurrence
    
	
 
    	
$3,000,000   annual aggregate
    
	
 
    	
0% Insured’s   participation
    

 

10.3.2              Property Insurance covering (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, and (ii) any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the Base Building) (the “New Improvements”). Such insurance shall be written on an “all risks” of physical loss or damage basis, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion.

 

10.3.3              Once the Premises begins production of its commercial product which will be on or about January 1,20173usiness Income Interruption for one (1) year plus Extra Expense insurance in such amounts as will reimburse Tenant for actual direct or indirect loss of earnings attributable to the risks outlined in Section 10.3.2 above.

 

10.3.4              Worker’s Compensation and Employer’s Liability or other similar insurance pursuant to all applicable state and local statutes and regulations. The policy will include a waiver of subrogation in favor of the Landlord Parties as permitted by Applicable Law.

 

10.4                        Form of Policies. The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (i) name Landlord, its subsidiaries and affiliates and any other party the Landlord so specifies, as an additional insured or loss payee, as applicable, including Landlord’s managing agent, if any; (ii) cover the liability assumed by Tenant under this Lease; (iii) be issued by an insurance company having a rating of not less than A:VIII in Best’s Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of North Carolina; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance required of Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi) provide that said insurer shall endeavor to provide written notice to Landlord and any mortgagee of Landlord, to the extent such names are furnished to Tenant prior to the cancellation of such policy. Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the earlier to occur of (A) the Lease Commencement Date, and (B) the date upon which Tenant is first provided access to the Premises, and at least ten (10) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate within ten (10) days after written notice from Landlord, Landlord may, at its option, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within five (5) days after delivery to Tenant of bills therefor.

 

10.5                        Subrogation. Landlord and Tenant intend that their respective property loss risks shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property loss to the extent that

 

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such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective property insurance policies are now, or shall specify that the waiver of subrogation shall not affect the right of the insured to recover thereunder. As respects all liability policies of insurance carried or maintained pursuant to this Lease and to the extent permitted under such policies, Tenant and Landlord each waive the insurance carriers’ rights of subrogation.

 

10.6                        Additional Insurance Obligations. Tenant shall carry and maintain during the entire Lease Term, at Tenant’s sole cost and expense, increased amounts of insurance to the extent required by any lender or mortgagee on the Building.

 

10.7                        Landlord Insurance Obligations. Landlord shall keep in force during the term of this Lease at least the following coverage: (i) commercial general liability insurance against any and all claims for bodily injury and property damage occurring in or about the Building or the Common Areas having a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate, and (ii) property insurance in such amounts and coverages as Landlord deems appropriate or is otherwise required of Landlord by its lender or Applicable Law, but in no event less than the lesser of (a) at least one hundred percent (100%) percent of the replacement cost of the Building or (b) the maximum insurable value of the Building.

 

11.                               DAMAGE AND DESTRUCTION

 

11.1                        Repair of Damage to Premises by Landlord. Each of Landlord and Tenant shall promptly notify the other of any damage to the Premises resulting from fire or any other casualty. If the Premises or any Common Areas serving or providing access to the Premises shall be damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, and subject to all other terms of this Article 11, restore such Common Areas and the Premises to substantially the same condition as existed prior to the casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage on the Building or Project or any other modifications to the Common Areas deemed desirable by Landlord, which are consistent with the character of the Project, provided that access to the or the use of Premises shall not be materially impaired. Upon the occurrence of any damage to the Premises, upon notice (the “Landlord Repair Notice”) to Tenant from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.3.2(ii) of this Lease and Landlord’s obligation to restore any Alterations or Tenant Improvements shall be limited to the extent of such proceeds received by Landlord. To the extent permitted pursuant to Applicable Laws, Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant’s occupancy, and the Premises, or a material portion of the Premises, are not occupied by Tenant as a result thereof, then during the time and to the extent the Premises are unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentable square feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable square feet of the Premises.

 

11.2                        Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within forty-five (45) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) at least Fifty Thousand and 00/100 Dollars ($50,000.00) of damage is not fully covered by Landlord’s insurance policies; (iv) intentionally omitted; (v) the damage occurs during the last twelve (12) months of the Lease

 

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Term; or (vi) any owner of any other portion of the Project, other than Landlord, does not intend to repair the damage to such portion of the Project; provided, however, that if Landlord does not elect to terminate this Lease pursuant to Landlord’s termination right as provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty (180) days after being commenced, Tenant may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant. Notwithstanding the provisions of this Section 11.2, Tenant shall have the right to terminate this Lease under this Section 11.2 only if each of the following conditions is satisfied: (a) the damage to the Project by fire or other casualty was not caused by the gross negligence or intentional act of Tenant or its partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (c) as a result of the damage to the Project, Tenant does not occupy or use the Premises at all. In addition, Tenant may terminate this Lease if the damage to the Premises occurs during the last twelve (12) months of the Lease Term, and, as a result of such damage, Tenant cannot reasonably conduct business from the Premises for a period of thirty (30) days or more. Should this Lease be terminated pursuant to this Section, the effective date of termination shall be the date Tenant is no longer able to utilize the Premises following such damage.

 

12.                               NONWAIVER

 

No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby. The waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord’s right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the full amount due. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant’s right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.

 

13.                               CONDEMNATION

 

If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the authority for any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant’s personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is payable separately to Tenant. All Rent shall be apportioned as of the date of such termination. If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be proportionately abated. Notwithstanding anything to the contrary contained in this Article 13, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, and provided that such temporary taking does not materially

 

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preclude or unreasonably diminish Tenant’s ability to conduct business from the Premises, then this Lease shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in connection with any such temporary taking, provided, however, that Tenant shall be entitled to a share of the award for any loss of fixtures and improvements and for moving and other reasonable expenses that do not otherwise reduce Landlord’s recovery.

 

14.                               ASSIGNMENT AND SUBLETTING

 

14.1                        Transfers. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). If Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the proposed effective date of the Transfer, which shall not be less than twenty (20) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the “Subject Space”), (iii) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the “Transfer Premium”, as that term is defined in Section 14.3 below, in connection with such Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, and (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information reasonably required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s business and proposed use of the Subject Space. Any Transfer made without Landlord’s prior written consent shall, at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord’s reasonable review and processing fees not to exceed $1,500.00, plus any actual and reasonable professional fees (including, without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees) incurred by Landlord, within thirty (30) days after written request by Landlord.

 

14.2                        Landlord’s Consent. Landlord shall not unreasonably withhold, condition or delay its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice. Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any Applicable Law for Landlord to withhold consent (which withholding shall be in writing detailing the specific reason for same, the “Denial Notice”) to any proposed Transfer where one or more of the following apply:

 

14.2.1              The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project;

 

14.2.2              The Transferee is either a governmental agency or instrumentality thereof;

 

14.2.3              The Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested;

 

14.2.4              The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease and Landlord provides general details of such violation; or

 

14.2.5              Either the proposed Transferee, or any person or entity which directly or indirectly, controls, is controlled by, or is under common control with, the proposed Transferee, is negotiating with Landlord or

 

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has negotiated with Landlord during the six (6) month period immediately preceding the date Landlord receives the Transfer Notice, to lease space in the Project.

 

14.2.6              In Landlord’s reasonable determination, the sub-rent, additional rent or other amounts received or accrued by Tenant from subleasing, assigning or otherwise Transferring all or any portion of the Premises is based on the income or profits of any person, or the assignment of sublease could cause any portion of the amounts received by Landlord pursuant to this Lease to fail to qualify as “rents from real property” within the meaning of section 856(d) of the Internal Revenue Code of 1986, as amended (the “Code”), or any similar or successor provision thereto or which would cause any other income of Landlord to fail to qualify as income described in section 856(c)(2) of the Code.

 

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord’s right of recapture, if any, under Section 14.4 of this Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld or delayed its consent under Section 14.2 or otherwise has breached or acted unreasonably under this Article 14, their sole remedies shall be a suit for contract damages (other than damages for injury to, or interference with, Tenant’s business including, without limitation, loss of profits, however occurring) or declaratory judgment and an injunction for the relief sought, and Tenant hereby waives all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all Applicable Laws, on behalf of the proposed Transferee.

 

14.3                        Transfer Premium. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined in this Section 14.3, received by Tenant from such Transferee (other than any Permitted Party). “Transfer Premium” shall mean all rent, additional rent or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer on a per rentable square foot basis if less than all of the Premises is transferred, after deducting the reasonable third party expenses incurred by Tenant for (i) any design and construction costs incurred on account of changes, alterations and improvements to the Premises in connection with the Transfer, (ii) any free base rent and tenant improvement allowances reasonably provided to the Transferee in connection with the Transfer (provided that such free rent and tenant improvement allowances shall be deducted only to the extent the same is included in the calculation of total consideration payable by such Transferee), (iii) any brokerage commissions in connection with the Transfer, (iv) legal fees and disbursements reasonably incurred in connection with the Transfer, and (v) any unamortized Excess Costs, as defined in Exhibit D (as determined on a straight line basis over the initial term of this Lease, without interest) paid by Tenant for the Tenant Improvements (collectively, “Tenant’s Subleasing Costs”).

 

14.4                        Landlord’s Option as to Subject Space. Notwithstanding anything to the contrary contained in this Article 14, in the event Tenant contemplates a Transfer which, together with all prior Transfers then remaining in effect, would cause seventy-five percent (75%) or more of the Premises to be Transferred for more than fifty percent (50%) of the then remaining Lease Term (assuming all sublease renewal or extension rights are exercised), Tenant shall give Landlord notice (the “Intention to Transfer Notice”) of such contemplated Transfer (whether or not the contemplated Transferee or the terms of such contemplated Transfer have been determined). The Intention to Transfer Notice shall specify the portion of and amount of rentable square feet of the Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”), the contemplated date of commencement of the Contemplated Transfer (the “Contemplated Effective Date”), and the contemplated length of the term of such contemplated Transfer, and shall specify that such Intention to Transfer Notice is delivered to Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to recapture the Contemplated Transfer Space. Thereafter, Landlord shall have the option, by giving written notice to Tenant within ten (10) business days after receipt of any

 

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Intention to Transfer Notice, to recapture the Contemplated Transfer Space. Such recapture shall cancel and terminate this Lease with respect to such Contemplated Transfer Space as of the Contemplated Effective Date. In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same.

 

14.5                        Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon Landlord’s request a complete statement, certified by an independent certified public accountant, or Tenant’s chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease from any liability under this Lease, including, without limitation, in connection with the Subject Space. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than two percent (2%), Tenant shall pay Landlord’s costs of such audit.

 

14.6                        Sublease/Transfer Restrictions. Notwithstanding anything contained herein to the contrary and without limiting the generality of Section 14.1 above, Tenant shall not: (a) sublet all or part of the Premises or assign or otherwise Transfer this Lease on any basis such that the rental or other amounts to be paid by the subtenant or assignee thereunder would be based, in whole or in part, on the income or profits derived by the business activities of the subtenant or assignee; (b) sublet all or part of the Premises or assign this Lease to any person or entity in which, under Section 856(d)(2)(B) of the Code, Longfellow Atlantic REIT, Inc., a Delaware corporation (the “Company”), or any affiliate of the Company owns, directly or indirectly (by applying constructive ownership rules set forth in Section 856(d) (5) of the Code), a ten percent (10%) or greater interest; or (c) sublet all or part of the Premises or assign this Lease in any other manner or otherwise derive any income which could cause any portion of the amounts received by Landlord pursuant hereto or any sublease to fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or which could cause any other income received by Landlord to fail to qualify as income described in Section 856(c) (2) of the Code. The requirements of this Section 14.4 shall likewise apply to any further subleasing, assignment or other Transfer by any subtenant or assignee. All references herein to Section 856 of the Code also shall refer to any amendments thereof or successor provisions thereto.

 

14.7                        Occurrence of Default. Any Transfer hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to: (i) treat such Transfer as cancelled and repossess the Subject Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall be in default under this Lease, Landlord is hereby irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant’s obligations under this Lease) until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed or observed under this Lease. No collection or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord’s enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord’s right to enforce any term of this Lease against Tenant or any other person. If Tenant’s obligations hereunder have been guaranteed, Landlord’s consent to any Transfer shall not be effective unless the guarantor also consents to such Transfer.

 

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14.8                        Non-Transfers. Notwithstanding anything to the contrary contained in this Article 14, (i) an assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is controlled by, controls, or is under common control with, Tenant), (ii) an assignment of the Premises to an entity which acquires all or substantially all of the assets or interests (partnership, stock or other) of Tenant, (iii) an assignment of the Premises to an entity which is the resulting entity of a merger or consolidation of Tenant, (iv) the sale or transfer of an interest in the Tenant so long as Apple Tree Partners retains Control of the ownership interests in Tenant, or (v) a sale of shares of stock in Tenant in connection with an initial public offering of Tenant’s stock on a nationally-recognized stock exchange (collectively, a “Permitted Transferee”), shall not be deemed a Transfer under this Article 14, provided that (A) Tenant notifies Landlord of any such assignment or sublease and promptly supplies Landlord with any documents or information requested by Landlord regarding such assignment or sublease or such affiliate, (B) such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease, (C) such Permitted Transferee shall be of a character and reputation consistent with the quality of the Building, and (D) such Permitted Transferee shall have a tangible net worth (not including goodwill as an asset) computed in accordance with generally accepted accounting principles (“Net Worth”) at least equal to the Net Worth of Tenant on the day immediately preceding the effective date of such assignment or sublease. An assignee of Tenant’s entire interest that is also a Permitted Transferee may also be known as a “Permitted Assignee”. “Control,” as used in this Section 14.8, shall mean the ownership, directly or indirectly, of at least fifty-one percent (51%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of at least fifty-one percent (51%) of the voting interest in, any person or entity. No such permitted assignment or subletting shall serve to release Tenant from any of its obligations under this Lease.

 

15.                               SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

 

15.1                        Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises or terminate any or all such sublessees or subtenancies.

 

15.2                        Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically made the responsibility of Landlord hereunder excepted provided, however, Tenant shall not be required to remove the Tenant Improvements unless at the time of Landlord’s approval of any item in the Tenant Improvements Landlord informed Tenant that it would have to remove the item at the end of the Term. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, free-standing cabinet work, movable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal. In no event shall any Landlord’s Work be deemed to be Tenant’s personal property, it being the intent that Tenant’s personal property includes only those items that are not built into the Premises and that have not been constructed or installed by Landlord pursuant to the Work Letter.

 

15.3                        Environmental Assessment. Prior to the expiration of the Lease (or within thirty (30) days after any earlier termination), Tenant shall clean and otherwise decommission all interior surfaces (including floors, walls, ceilings, and counters), piping, supply lines, waste lines and plumbing in or serving the Premises, and all exhaust or other ductwork in or serving the Premises, in each case that has carried, released or otherwise been exposed to any Hazardous Materials due to Tenant’s use or occupancy of the Premises, and shall otherwise clean the

 

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Premises so as to permit the Environmental Assessment called for by this Section 15.3 to be issued. Prior to the expiration of this Lease (or within thirty (30) days after any earlier termination), Tenant, at Tenant’s expense, shall obtain for Landlord a report (an “Environmental Assessment”) addressed to Landlord (and, at Tenant’s election, Tenant) by a reputable licensed environmental consultant or industrial hygienist that is designated by Tenant and acceptable to Landlord in Landlord’s reasonable discretion, which report shall be based on the environmental consultant’s inspection of the Premises and shall state, to the Landlord’s reasonable satisfaction, that (a) the Hazardous Materials described in the first sentence of this paragraph, to the extent, if any, existing prior to such decommissioning, have been removed in accordance with Applicable Laws; (b) all Hazardous Materials described in the first sentence of this paragraph, if any, have been removed in accordance with Applicable Laws from the interior surfaces of the Premises (including floors, walls, ceilings, and counters), piping, supply lines, waste lines and plumbing, and all such exhaust or other ductwork in the Premises, may be reused by a subsequent tenant or disposed of in compliance with Applicable Laws without incurring special costs or undertaking special procedures for demolition, disposal, investigation, assessment, cleaning or removal of such Hazardous Materials and without giving notice in connection with such Hazardous Materials; and (c) the Premises may be reoccupied for office, research and development, or laboratory use, demolished or renovated without incurring special costs or undertaking special procedures for disposal, investigation, assessment, cleaning or removal of Hazardous Materials described in the first sentence of this paragraph and without giving notice in connection with Hazardous Materials, Further, for purposes of clauses (b) and (c), “special costs” or “special procedures” shall mean costs or procedures, as the case may be, that would not be incurred but for the nature of the Hazardous Materials as Hazardous Materials instead of non-hazardous materials. The report shall also include reasonable detail concerning the clean-up measures taken, the clean-up locations, the tests run and the analytic results. Tenant shall submit to Landlord the scope of the proposed Environmental Assessment for Landlord’s reasonable review and approval at least 30 days prior to commencing the work described therein or at least 60 days prior to the expiration of the Lease Term, whichever is earlier.

 

If Tenant fails to perform its obligations under this Section 15.3 without limiting any other right or remedy, Landlord may, on five (5) business days’ prior written notice to Tenant perform such obligations at Tenant’s expense if Tenant has not commenced to do so within said five day period, and Tenant shall within 10 days of written demand reimburse Landlord for all reasonable out-of-pocket costs and expenses incurred by Landlord in connection with such work. Tenant’s obligations under this Section 15.2 shall survive the expiration or earlier termination of this Lease. In addition, at Landlord’s election, Landlord may inspect the Premises and/or the Project for Hazardous Materials at Landlord’s cost and expense within sixty (60) days of Tenant’s surrender of the Premises at the expiration or earlier termination of this Lease. Tenant shall pay for all such costs and expenses incurred by Landlord in connection with such inspection if such inspection reveals that a release or threat of release of Hazardous Materials exists at the Project or Premises as a result of the acts or omission of Tenant, its officers, employees, contractors, and agents (except to the extent resulting from (i) Hazardous Materials existing in the Premises as at the delivery of possession to Tenant (in which event Landlord shall be responsible for any Clean-up, as provided in this Lease), or (ii) the acts or omissions of Landlord or Landlord’s agents, employees or contractors).

 

16.                               HOLDING OVER

 

If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, with the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term. If Tenant holds over after the expiration of the Lease Term of earlier termination thereof, without the express or implied consent of Landlord, such tenancy shall be deemed to be a tenancy by sufferance only, and shall not constitute a renewal hereof or an extension for any further term. In either case, Base Rent shall be payable at a monthly rate equal to one hundred fifty percent (150%) of the Base Rent applicable during the last rental period of the Lease Term under this Lease. Such month-to-month tenancy or tenancy by sufferance, as the case may be, shall be subject to every other applicable term, covenant and agreement contained herein. Nothing contained in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this Article 16 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure,

 

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including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom.

 

17.                               ESTOPPEL CERTIFICATES/FINANCIAL STATEMENTS

 

17.1          Within ten (10) business days following a request in writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be substantially in the form of Exhibit F, attached hereto (or such other form as may be required by any prospective mortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord’s mortgagee or prospective mortgagee. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of the Project. Tenant shall execute and deliver whatever other instruments may be reasonably required for such purposes.

 

17.2          Within twenty (20) days after a request from Landlord, Tenant shall provide Landlord with its most recent Cash Flow Statement, Balance Sheet, and Summary Income Statement prepared in accordance with generally accepted accounting principles and certified by a CPA or by the CFO of Tenant.

 

17.3          Prior to disclosing any financial information to Landlord, Tenant shall have the right to require that Landlord, the lender or a potential lender of Landlord, any purchaser or potential purchaser of the Project execute a confidentiality agreement in form mutually and reasonably acceptable to Tenant and Landlord. Notwithstanding any provision hereof to the contrary, Landlord shall not request a financial statement from Tenant more than twice in any twelve (12) month period during the Term, unless same was delivered at the request of the lender or any potential of Landlord, any purchaser or potential purchaser of the Project or in response to a default by Tenant under this Lease.

 

17.4          Failure of Tenant to timely execute, acknowledge and deliver such estoppel certificate or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct, without exception.

 

18.                               SUBORDINATION

 

This Lease shall be subject and subordinate to all present and future ground or underlying leases of the Building or Project and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Project or any part thereof, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages, trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease, provided such lienholder or purchaser or ground lessor shall agree to accept this Lease and not disturb Tenant’s occupancy, so long as Tenant timely pays the rent and observes and performs the terms, covenants and conditions of this Lease to be observed and performed by Tenant beyond any applicable grace and/or cure period. Landlord’s delivery to Tenant of commercially reasonable non-disturbance agreement(s) in favor of Tenant from any ground lessors, mortgage holders or lien holders of Landlord who come into existence following the date hereof but prior to the expiration of the Lease Term shall be in consideration of, and a condition precedent to, Tenant’s agreement to subordinate this Lease to any such ground lease, mortgage or lien. Landlord’s interest herein may be assigned as security at any time to any lienholder. Tenant shall, within ten (10) business days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground leases or underlying leases. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. Upon Tenant’s request, in the event Landlord obtains a future mortgage on the Building, Landlord shall use

 

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commercially reasonable efforts to provide Tenant with a subordination, non-disturbance and attornment agreement on Landlord’s lender’s customary and reasonable form.

 

19.                               DEFAULTS; REMEDIES

 

19.1                        Events of Default. The occurrence of any of the following shall constitute a default of this Lease by Tenant:

 

19.1.1              Any failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due unless such failure is cured within five (5) business days after notice; or

 

19.1.2              Except where a specific time period is otherwise set forth for Tenant’s performance in this Lease, in which event the failure to perform by Tenant within such time period shall be a default by Tenant under this Section 19.1.2, any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure such default; or

 

19.1.3              Abandonment of the Premises by Tenant; or

 

19.1.4              The failure by Tenant to observe or perform according to the provisions of Articles 5, 14, 17 or 18 of this Lease where such failure continues for more than two (2) business days after notice from Landlord.

 

The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law.

 

19.2                        Remedies Upon Default. Upon the occurrence of any event of default by Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.

 

19.2.1              Landlord may, immediately or at any time thereafter, elect to terminate this Lease by notice of termination, by entry, or by any other means available under law and may recover possession of the Premises as provided herein. Upon termination by notice, by entry, or by any other means available under law, Landlord shall be entitled immediately, in the case of termination by notice or entry, and otherwise in accordance with the provisions of law to recover possession of the Premises from Tenant and those claiming through or under the Tenant. Such termination of this Lease and repossession of the Premises shall be without prejudice to any remedies which Landlord might otherwise have for arrears of rent or for a prior breach of the provisions of this Lease. Tenant agrees that upon Landlord’s lawful termination of this Lease Landlord shall be entitled to re-entry and possession in accordance with the terms hereof. Landlord may, without notice, store Tenant’s personal property (and those of any person claiming under Tenant) at the expense and risk of Tenant or, if Landlord so elects, Landlord may sell such personal property at public auction or auctions or at private sale or sales after seven days’ notice to Tenant and apply the net proceeds to the earliest of installments of rent or other charges owing Landlord. Tenant agrees that a notice by Landlord alleging any default shall, at Landlord’s option (the exercise of such option shall be indicated by the inclusion of the words “notice to quit” in such notice), constitute a statutory notice to quit. If Landlord exercises its option to designate a notice of default hereunder as a statutory notice to quit, any grace periods provided for herein shall run concurrently with any statutory notice periods.

 

19.2.2              In the case of termination of this Lease pursuant to Section 19.2.1, Tenant shall reimburse Landlord for all actual and reasonable expenses arising out of such termination, including without limitation, all costs incurred in collecting amounts due from Tenant under this Lease (including attorneys’ fees, costs of litigation and the like); all expenses incurred by Landlord in attempting to relet the Premises or parts thereof (including advertisements, brokerage commissions, Tenant’s allowances, costs of preparing space, and the like); and all

 

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Landlord’s other reasonable expenditures necessitated by the termination. The reimbursement from Tenant shall be due and payable immediately from time to time upon notice from Landlord that an expense has been incurred, without regard to whether the expense was incurred before or after the termination.

 

19.2.3              If lawful Landlord may elect by written notice to Tenant within one year following such termination to be indemnified for loss of rent by a lump sum payment representing the then present value of the amount of Rent that would have been paid in accordance with this Lease for the remainder of the Lease Term minus the then present value of the aggregate fair market rent and additional charges payable for the Premises for the remainder of the Lease Term (if less than the Rent payable hereunder), estimated as of the date of the termination, and taking into account reasonable projections of vacancy and time required to re-lease the Premises. (For the purposes of calculating the Rent that would have been paid hereunder for the lump sum payment calculation described herein, the last full year’s Additional Rent under Article 4 is to be deemed constant for each year thereafter. The Federal Reserve discount rate (or equivalent) shall be used in calculating present values.) Should the parties be unable to agree on a fair market rent, the matter shall be submitted, upon the demand of either party, to the Charlotte, North Carolina office of the American Arbitration Association, with a request for arbitration in accordance with the rules of the Association by a single arbitrator who shall be an MAI appraiser with at least ten years’ experience as an appraiser of life sciences buildings in the Research Triangle Park and Durham markets. The parties agree that a decision of the arbitrator shall be conclusive and binding upon them. If, at the end of the Lease Term, the rent that Landlord has actually received from the Premises is less than the aggregate fair market rent estimated as aforesaid, Tenant shall thereupon pay Landlord the amount of such difference. If and for so long as Landlord does not make the election provided for in this Section 19.2.3, Tenant shall indemnify Landlord for the loss of Rent by a payment at the end of each month which would have been included in the Lease Term, representing the excess of the Rent that would have been paid in accordance with this Lease (Base Rent together with any Additional Rent that would have been payable under Article 4, to be ascertained monthly) over the rent actually derived from the Premises by Landlord for such month (the amount of rent deemed derived shall be the actual amount less any portion thereof attributable to Landlord’s reletting expenses described in Section 19.2.2 that have not been reimbursed by Tenant thereunder).

 

19.2.4              Intentionally Omitted.

 

19.2.5              In lieu of any other damages or indemnity and in lieu of full recovery by Landlord of all sums payable under all the foregoing provisions of this Section 19.2, Landlord may by written notice to Tenant within six (6) months after termination under any of the provisions contained in Section 19.1 and before such full recovery, elect to recover, and Tenant shall thereupon pay, as minimum liquidated damages under this Section 19.2, an amount equal to the lesser of (i) the aggregate of the Base Rent and Additional Rent for the balance of the Lease Term had it not been terminated or (ii) the aggregate thereof for the 12 months ending one year after the termination date, plus in either case (iii) the amount of Base Rent and Additional Rent of any kind accrued and unpaid at the time of termination and minus (iv) the amount of any recovery by Landlord under the foregoing provisions of this Section 19.2 up to the time of payment of such liquidated damages (but reduced by any amounts of reimbursement under Section 19.2.2). Liquidated damages hereunder shall not be in lieu of any claims for reimbursement under Section 19.2.2.

 

19.2.6              If Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.

 

19.2.7              Landlord shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other provision of this Lease), without prior demand or notice except as required by Applicable Law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof. The provisions of this Section 19.2.7 are not dependent upon the occurrence of a default.

 

19.2.8              Any obligation imposed by law upon Landlord to relet the Premises after any termination of the Lease shall be subject to the reasonable requirements of Landlord to lease to high quality tenants on such

 

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terms as Landlord may from time to time deem appropriate and to develop the Building in a harmonious manner with an appropriate mix of uses, tenants, floor areas and terms of tenancies, and the like, and Landlord shall not be obligated to relet the Premises to any party to whom Landlord or its affiliate may desire to lease other available space in the Building. Landlord agrees to use commercially reasonable efforts in order to mitigate its damages following any default by Tenant and recovering repossession of the Premises; provided, however, nothing shall require Landlord to (i) attempt to re-lease the Premises unless and until Landlord obtains possession of the Premises from Tenant, or (ii) lease the Premises in smaller increments than the entire Premises. If there is other unleased space in the Building, Landlord may lease such other space without prejudice to its remedies against Tenant.

 

19.2.9              Nothing herein shall limit or prejudice the right of Landlord to prove and obtain in a proceeding for bankruptcy, insolvency, arrangement or reorganization, by reason of the termination, an amount equal to the maximum allowed by a statute of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount is greater to, equal to, or less than the amount of the loss or damage which Landlord has suffered.

 

19.3                        Subleases of Tenant. Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

 

19.4                        Efforts to Relet. No re-entry or repossession, repairs, maintenance, changes, alterations and additions, reletting, appointment of a receiver to protect Landlord’s interests hereunder, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant’s right to possession, or to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant’s obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise available under any law to redeem or reinstate this Lease.

 

19.5                        Landlord Default.

 

19.5.1                      General. Notwithstanding anything to the contrary set forth in this Lease, Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord’s failure to perform; provided, however, if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity. See also Section 6.5.

 

19.5.2              Intentionally Omitted.

 

20.                               COVENANT OF QUIET ENJOYMENT

 

Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved and on keeping, observing and performing all the other terms, covenants, conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to the terms, covenants, conditions, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in lieu of any other covenant express or implied.

 

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21.                               SECURITY DEPOSIT

 

21.1                        Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord a letter of credit (the “L/C Security”) in the amount set forth in Section 9 of the Summary as security for the faithful performance by Tenant of all of its obligations under this Lease as follows:

 

(a)                                 Tenant shall provide Landlord, and maintain in full force and effect throughout the Term and until the date that is ninety (90) days after the Lease Expiration Date, a letter of credit substantially in the form of Exhibit I issued by an issuer reasonably satisfactory to Landlord, in the amount set forth in Section 9 of the Summary, with an initial term of at least one year. Landlord may require the L/C Security to be replaced by an L/C Security issued by a different issuer at any time during the Term if Landlord reasonably believes that the issuing bank of the L/C Security is or may soon become insolvent. If Tenant has actual notice, or Landlord notifies Tenant at any time, that any issuer of the L/C Security has become insolvent or placed into FDIC receivership, then Tenant shall promptly deliver to Landlord (without the requirement of further notice from Landlord) substitute L/C Security issued by an issuer reasonably satisfactory to Landlord, and otherwise conforming to the requirements set forth in this Article. As used herein with respect to the issuer of the L/C Security, “insolvent” shall mean the determination of insolvency as made by such issuer’s primary bank regulator (i.e., the state bank supervisor for state chartered banks; the OCC or OTS, respectively, for federally chartered banks or thrifts; or the Federal Reserve for its member banks).

 

(b)                                 Landlord may draw upon the L/C Security, and hold and apply the proceeds for the payment of any Rent or any other sum in default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default, if: (i) a default beyond applicable notice and cure periods exists (or would have existed with the giving of notice and passage of applicable cure periods, but only if transmittal of a default notice is stayed or barred by applicable bankruptcy or other similar law), provided that such draw pursuant to his clause (i) shall be limited to the amount that Landlord reasonably determines is required to cure such default; (ii) as of the date forty-five (45) days before any L/C Security expires Tenant has not delivered to Landlord an amendment or replacement for such L/C Security, reasonably satisfactory to Landlord, extending the expiry date to the earlier of (1) ninety (90) days after the then-current Lease Expiration Date or (2) the date one year after the then-current expiry date of the L/C Security; (iii) Tenant fails to pay (when and as Landlord reasonably requires) any bank charges for Landlord’s transfer of the L/C Security; or (iv) the issuer of the L/C Security ceases, or announces that it will cease, to maintain an office in the city where Landlord may present drafts under the L/C Security (and fails to permit drawing upon the L/C Security by overnight courier or facsimile). This Section does not limit any other provisions of this Lease allowing Landlord to draw the L/C Security under specified circumstances. In the event of any such draw upon the L/C Security, Tenant shall within 10 business days thereafter provide Landlord with a replacement letter of credit, or amendment to the existing letter of credit increasing the amount of such letter of credit, in the amount of L/C Security required hereunder, and Tenant’s failure to do so shall be a material breach of this Lease. Landlord shall hold the proceeds of any draw not applied as set forth above as a cash Security Deposit as further described below.

 

(c)                                  If Landlord transfers its interest in the Premises, then Landlord shall transfer the L/C Security to the transferee of its interest and notify Tenant of such transfer, and Tenant shall at Tenant’s expense, within fifteen (15) business days after receiving a request from Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an amendment to the L/C Security naming Landlord’s grantee as substitute beneficiary. If the required Security Deposit changes while L/C Security is in force, then Tenant shall deliver (and, if the issuer requires, Landlord shall consent to) a corresponding amendment to the L/C Security.

 

(d)                                 If and to the extent Landlord is holding the proceeds of the L/C Security in cash from time to time, such cash shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept and performed by Tenant during the period commencing on the Execution Date and ending upon the expiration or termination of Tenant’s obligations under this Lease. If Tenant defaults (beyond applicable notice and cure periods) with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default as provided in this Lease. The provisions of this Article shall survive the expiration or earlier termination of this Lease. In the event of bankruptcy

 

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or other debtor-creditor proceedings against Tenant, any cash security then being held by Landlord shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings. Landlord shall deliver or credit to any purchaser of Landlord’s interest in the Premises the funds then held hereunder by Landlord, and thereupon (and upon confirmation by the transferee of such funds, whether expressly or by written assumption of this Lease, generally) Landlord shall be discharged from any further liability with respect to such funds. This provision shall also apply to any subsequent transfers. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, then the cash security, if any, or any balance thereof, shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within 90 days after the expiration or earlier termination of this Lease. If and to the extent the security held by Landlord hereunder shall be in cash, Landlord shall hold such cash in an account at a banking organization selected by Landlord; provided, however, that Landlord shall not be required to maintain a separate account for the cash security, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if any, accruing on such cash security.

 

22.                               SUBSTITUTION OF OTHER PREMISES

 

Intentionally Omitted.

 

23.                               SIGNS

 

23.1                        Interior Signage. Intentionally Omitted,

 

23.2                        Exterior Signage. Subject to Landlord’s prior written approval, in its reasonable discretion, and provided all signs are in keeping with the quality, design and style of the Building and Project, Tenant shall be allowed (i) parapet signage and suite entry signage at Tenant’s expense, and (ii) signage on the monument signage at the Project which shall be at the expense of Landlord and not included as part of the Tenant Improvement Allowance. All permitted signs shall be maintained by Tenant at its expense in a first-class and safe condition and appearance. Upon the expiration or earlier termination of this Lease, Tenant shall remove all of its signs at Tenant’s sole cost and expense. Tenant shall repair any damage to the Premises or Project, inside or outside, resulting from the erection, maintenance or removal of any signs. Tenant’s signage must also comply with all Applicable Laws, as defined below. All Building signage shall be subject to the existing rights of other tenants in the Building and any declaration of covenants for the Project.

 

23.3                        Prohibited Signage and Other Items. Any signs, notices, logos, pictures, names or advertisements which are installed and that have not been separately approved by Landlord may be removed without notice by Landlord at the sole expense of Tenant. Tenant may not install any signs on the exterior or roof of the Project or the Common Areas. Any signs, window coverings, or blinds (even if the same are located behind the Landlord-approved window coverings for the Building), or other items visible from the exterior of the Premises or Building, shall be subject to the prior approval of Landlord, in its sole discretion. Tenant shall not place or install any projections, antennae, aerials, or similar devices inside or outside of the Building, without the prior written approval of Landlord, subject to Tenant’s rights pursuant to Section 23.2, above.

 

24.                               COMPLIANCE WITH LAW

 

Tenant shall not do anything or suffer anything to be done in or about the Premises or the Project which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated (collectively, “Applicable Laws”). At its sole cost and expense, Tenant shall promptly comply with all such Applicable Laws which relate to (i) Tenant’s use of the Premises, (ii) any Alterations or Tenant Improvements, or (iii) the Building, but as to the Building (and as to any improvements to exterior walls, structural floors and the portions of the electrical, heating, ventilation and air conditioning and other systems of the Building that serve other tenants and that are located within the Premises), only to the extent such obligations are triggered by Alterations or Tenant Improvements, or Tenant’s use of the Premises for non-general office, pharmaceutical manufacturing, and laboratory use. Tenant shall be responsible, at its sole cost and expense, to make all alterations to the Premises as are required to comply with the Applicable Laws to the extent required in this Article 24. Notwithstanding the foregoing terms of this Article 24 to the contrary,

 

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Tenant may defer such compliance with Applicable Laws while Tenant contests, in a court of proper jurisdiction, in good faith, the applicability of such Applicable Laws to the Premises or Tenant’s specific use or occupancy of the Premises; provided, however, Tenant may only defer such compliance if such deferral shall not (a) prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, (b) prohibit Landlord from obtaining or maintaining a certificate of occupancy for the Building or any portion thereof, (c) unreasonably and materially affect the safety of the employees and/or invitees of Landlord or of any tenant in the Building (including Tenant), (d) create a significant health hazard for the employees and/or invitees of Landlord or of any tenant in the Building (including Tenant), (e) otherwise materially and adversely affect Tenant’s use of or access to the Buildings or the Premises, or (f) impose material obligations, liability, fines, or penalties upon Landlord or any other tenant of the Building, or would materially and adversely affect the use of or access to the Building by Landlord or other tenants or invitees of the Building. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant. Landlord shall comply with all Applicable Laws relating to the Base Building, provided that compliance with such Applicable Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord’s failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would unreasonably and materially affect the safety of Tenant’s employees or create a significant health hazard for Tenant’s employees, or would otherwise materially and adversely affect Tenant’s use of or access to the Premises. Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under this Article 24 to the extent not prohibited by the terms of Section 4.2.7 above.

 

25.                               LATE CHARGES

 

If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord’s designee within five (5) business days after Tenant’s receipt of written notice from Landlord that said amount is due, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the overdue amount plus any reasonable attorneys’ fees incurred by Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due hereunder. Notwithstanding the foregoing, Landlord shall not charge Tenant a late charge for the first (1st) late payment in any twelve (12) month period (but in no event with respect to any subsequent late payment in any twelve (12) month period) during the Lease Term that Tenant fails to timely pay Rent or another sum due under this Lease, provided that such late payment is made within three (3) days following the expiration of the five (5) business day period set forth in the first sentence of this Article 25. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner. In addition to the late charge described above, any Rent or other amounts owing hereunder which are not paid when due shall bear interest from the date when due until paid at a rate per annum equal to the lesser of (i) the annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical Release Publication G.13(415), published on the first Tuesday of each calendar month (or such other comparable index as Landlord and Tenant shall reasonably agree upon if such rate ceases to be published) plus four (4) percentage points, and (ii) the highest rate permitted by Applicable Law.

 

26.                               LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

 

26.1                        Landlord’s Cure. All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwise expressly provided herein. If Tenant shall fail to perform any obligation under this Lease, and such failure shall continue in excess of the time allowed under Section 19.1.2, above, unless a specific time period is otherwise stated in this Lease, Landlord may, but shall not be obligated to, make any such payment or perform any such act on Tenant’s part without waiving its rights based upon any default of Tenant and without releasing Tenant from any obligations hereunder.

 

26.2                        Tenant’s Reimbursement. Except as may be specifically provided to the contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably made and obligations incurred by Landlord in connection with the remedying by Landlord of Tenant’s defaults pursuant to the provisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses referred to in Article 10 of this Lease; and (iii) sums equal to all expenditures made and

 

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obligations incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or pursuant to law, including, without limitation, all reasonable legal fees and other amounts so expended. Tenant’s obligations under this Section 26.2 shall survive the expiration or sooner termination of the Lease Term.

 

27.          ENTRY BY LANDLORD

 

Landlord reserves the right at all reasonable times and upon not less than one (1) day’s prior written (which may be by email) notice to Tenant (except in the case of an emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to prospective purchasers, or to current or prospective mortgagees, ground or underlying lessors or insurers or, during the last twelve (12) months of the Lease Term, to prospective tenants; (iii) post notices of nonresponsibility (to the extent applicable pursuant to then Applicable Law); or (iv) alter, improve or repair the Premises or the Building, or for structural alterations, repairs or improvements to the Building or the Building’s systems and equipment; provided, however, Landlord acknowledges that certain areas of the Premises contain materials and information that is confidential to Tenant, and/or are substance-controlled (each, a “Restricted Area”); in such areas, Landlord acknowledges and agrees that it will enter a Restricted Area only when accompanied by a representative of Tenant and wearing such protective garments as Tenant shall require. Provided that Landlord employs commercially reasonable efforts to minimize interference with the conduct of Tenant’s business in connection with entries into the Premises and shall take all reasonable efforts to preserve the confidentiality of the business operations of Tenant and shall advise all Landlord Parties to do so, Landlord may make any such entries without the abatement of Rent, except as otherwise provided in this Lease, and shall take such reasonable steps as required to accomplish the stated purposes. In an emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and to the Premises, and upon the conclusion of the emergency within five (5) business days of Tenant’s request Landlord shall provide a summary to Tenant as to the reason for its entry and those persons who entered the Premises and all actions taken. In the event Drug Enforcement Agency regulations require additional notice requirements following entry by Landlord or require restrictions on entry into the Premises, Landlord shall reasonably cooperate with such requirements provided Tenant provides written notice and proof of such requirements to Landlord. Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises.

 

28.          TENANT PARKING

 

Tenant shall have the right, without the payment of any parking charge or fee (other than as a reimbursement of operating expenses to the extent allowed pursuant to the terms or Article 4 of this Lease, above), commencing on the Lease Commencement Date, to use the amount of unreserved parking spaces set forth in Section 10 of the Summary, on a monthly basis throughout the Lease Term, which parking spaces shall pertain to the on-site and/or off-site, as the case may be, parking facility (or facilities) which serve the Project. Notwithstanding the foregoing, Tenant shall be responsible for the full amount of any taxes imposed by any governmental authority in connection with the renting of such parking spaces by Tenant or the use of the parking facility by Tenant. Tenant’s continued right to use the parking spaces is conditioned upon Tenant abiding by all rules and regulations which are prescribed from time to time for the orderly operation and use of the parking facility where the parking spaces are located (including any sticker or other identification system established by Landlord and the prohibition of vehicle repair and maintenance activities in the parking facilities), and shall cooperate in seeing that Tenant’s employees and visitors also comply with such rules and regulations. Tenant’s use of the Project parking facility shall be at Tenant’s sole risk and Tenant acknowledges and agrees that Landlord shall have no liability whatsoever for damage to the vehicles of Tenant, its employees and/or visitors, or for other personal injury or property damage or theft relating to or connected with the parking rights granted herein or any of Tenant’s, its employees’ and/or visitors’ use of the parking facilities.

 

29.          MISCELLANEOUS PROVISIONS

 

29.1        Terms; Captions. The words “Landlord” and “Tenant” as used herein shall include the plural as well as the singular. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may require, shall in all cases be assumed as

 

41

 

though in each case fully expressed. The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections.

 

29.2        Binding Effect. Subject to all other provisions of this Lease, each of the covenants, conditions and provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective heirs, personal representatives, successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.

 

29.3        No Air Rights. No rights to any view or to light or air over any property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease. If at any time any windows of the Premises are temporarily darkened or the light or view therefrom is obstructed by reason of any repairs, improvements, maintenance or cleaning in or about the Project, the same shall be without liability to Landlord and without any reduction or diminution of Tenant’s obligations under this Lease.

 

29.4        Modification of Lease. Should any current or prospective mortgagee or ground lessor for the Building or Project require a modification of this Lease, which modification will not cause an increased cost or expense to Tenant or in any other way materially and adversely change the rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever documents are reasonably required therefor and to deliver the same to Landlord within ten (10) business days following a request therefor. At the request of Landlord or any mortgagee or ground lessor, Tenant agrees to execute a short form of Lease and deliver the same to Landlord within ten (10) business days following the request therefor.

 

29.5        Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all liability under this Lease and Tenant agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder after the date of transfer and such transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord, including the return of any Security Deposit, and Tenant shall attorn to such transferee.

 

29.6        Prohibition Against Recording. In the event this Lease, a copy or any notice or memorandum thereof shall be recorded by Tenant, then such recording shall constitute a default by Tenant under Article 19 hereof entitling Landlord to immediately terminate this Lease; provided, however, at the request of either Landlord or Tenant, the parties shall execute a document in the form attached hereto. All costs of preparation and recording such notice shall be borne by Tenant. At the expiration or earlier termination of this Lease, Tenant shall provide Landlord with an executed termination of the Notice of Lease in recordable form, which obligation shall survive such expiration or earlier termination.

 

29.7        Landlord’s Title. Landlord’s title is and always shall be paramount to the title of Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord.

 

29.8        Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant.

 

29.9        Application of Payments. Landlord shall have the right to apply payments received from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments, to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion, may elect.

 

29.10      Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.

 

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29.11      Partial Invalidity. If any term, provision or condition contained in this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted by law.

 

29.12      No Warranty. In executing and delivering this Lease, Tenant has not relied on any representations, including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the exhibits attached hereto.

 

29.13      Landlord Exculpation. The liability of Landlord or the Landlord Parties to Tenant for any default by Landlord under this Lease or arising in connection herewith or with Landlord’s operation, management, leasing, repair, renovation, alteration or any other matter relating to the Project or the Premises shall be limited solely and exclusively to an amount which is equal to the interest of Landlord in the Building. Neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 29.13 shall inure to the benefit of Landlord’s and the Landlord Parties’ present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord’s obligations under this Lease. Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any circumstances for consequential or indirect damages, including without limitation injury or damage to, or interference with, Tenant’s business, including but not limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring.

 

29.14      Entire Agreement. It is understood and acknowledged that there are no oral agreements between the parties hereto affecting this Lease and this Lease constitutes the parties’ entire agreement with respect to the leasing of the Premises and supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease. None of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties hereto.

 

29.15      Right to Lease. Landlord reserves the absolute right to effect such other tenancies in the Project as Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building or Project. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any space in the Building or Project.

 

29.16      Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, governmental action or inaction, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant or Landlord pursuant to this Lease (collectively, a “Force Majeure”), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure.

 

29.17      Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and for all those claiming under Tenant, any and all rights now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any termination of this Lease.

 

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29.18      Notices. All notices, demands, statements, designations, approvals or other communications (collectively, “Notices”) given or required to be given by either party to the other hereunder or by law shall be in writing, shall be (A) sent by United States certified or registered mail, postage prepaid, return receipt requested (“Mail”), (B) delivered by a nationally recognized overnight courier, or (D) delivered personally. Any Notice shall be sent, transmitted, or delivered, as the case may be, to Tenant at the appropriate address set forth in Section 11 of the Summary, or to such other place as Tenant may from time to time designate in a Notice to Landlord, or to Landlord at the addresses set forth below, or to such other places as Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given (i) three (3) days after the date it is posted if sent by Mail, (ii) the date the overnight courier delivery is made, or (iii) the date personal delivery is made. As of the date of this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses:

 

Durham KTP Tech 7, LLC
 c/o Longfellow Real Estate Partners
 260 Franklin Street, Suite 1520
 Boston, MA 02141
 Attention: Asset Management

 

And

 

David E. Wagner
 K&L Gates LLP
 4350 Lassiter at North Hills Avenue
 Suite 300 (27609)
 Post Office Box 17047
 Raleigh, North Carolina 27619-7047

 

29.19      Joint and Several. If there is more than one Tenant, the obligations imposed upon Tenant under this Lease shall be joint and several.

 

29.20      Authority. If Tenant is a corporation, trust or partnership, Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the State of Delaware and that Tenant has full right and authority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so. In such event, Tenant shall, within ten (10) days after execution of this Lease, deliver to Landlord satisfactory evidence of such authority and, if a corporation, upon demand by Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in Tenant’s state of incorporation and (ii) qualification to do business in the State of North Carolina.

 

29.21      Attorneys’ Fees. In the event that either Landlord or Tenant should bring suit for the possession of the Premises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease or for any other relief against the other, then all costs and expenses, including actual and reasonable attorneys’ fees at customary hourly rates, incurred by the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment.

 

29.22      Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and enforced in accordance with the laws of the State of North Carolina. Subject to Applicable Law, Landlord and Tenant waive trial by jury in any action to which they are parties, and further agree that any action arising out of this Lease (except an action for possession by Landlord, which may be brought in whatever manner or place provided by law) shall be brought in the Trial Court, Superior Court Department, in the county where the Premises are located.

 

29.23      Submission of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.

 

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29.24      Brokers. Tenant hereby warrants to Landlord that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 13 of the Summary (the “Brokers”), and that it knows of no other real estate broker or agent which represented Tenant who is entitled to a commission in connection with this Lease. Tenant agrees to indemnify and defend Landlord against and hold Landlord harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under Tenant. The terms of this Section 29.24 shall survive the expiration or earlier termination of the Lease Term.

 

29.25      Independent Covenants. This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord’s expense or to any setoff of the Rent or other amounts owing hereunder against Landlord.

 

29.26      Project or Building Name, Address and Signage. Landlord shall have the right at any time to change the name and/or address of the Project or Building and to install, affix and maintain any and all signs on the exterior and, if required by Applicable Law, on the interior of the Project or Building as Landlord may, in Landlord’s sole discretion, desire. Tenant shall not use the name of the Project or Building or use pictures or illustrations of the exterior of the Project or exterior Building in advertising or other publicity or for any purpose other than as the address or location of the business to be conducted by Tenant in the Premises, without the prior written consent of Landlord.

 

29.27      Counterparts. This Lease may be executed in counterparts with the same effect as if both parties hereto had executed the same document. Both counterparts shall be construed together and shall constitute a single lease.

 

29.28      Confidentiality. Each party acknowledges that the financial terms of this Lease and any related documents are confidential information. Each party shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than to its financial, investors, legal, and space planning consultants. Confidential information shall not include any information that is readily available to the general public, to which a party is made aware by another source (who is also not under an obligation of confidentiality), or of which a party was already aware prior to its engaging in this transaction, Notwithstanding anything to the contrary in this Lease, Tenant has no obligation to provide attorney-client privileged communications or documents to Landlord.

 

29.29      Development of the Project.

 

29.29.1  Subdivision. Landlord reserves the right to subdivide all or a portion of the buildings and Common Areas. Tenant agrees to execute and deliver, upon demand by Landlord and in the form requested by Landlord, any additional documents needed to conform this Lease to the circumstances resulting from a subdivision and any all maps in connection therewith. Notwithstanding anything to the contrary set forth in this Lease, the separate ownership of any buildings and/or Common Areas by an entity other than Landlord shall not affect the calculation of Direct Expenses or Tenant’s payment of Tenant’s Share of Direct Expenses.

 

29.29.2  Construction of Property and Other Improvements. Tenant acknowledges that portions of the Project and/or the Other Improvements may be under construction following Tenant’s occupancy of the Premises, and that such construction may result in levels of noise, dust, obstruction of access, etc. which are in excess of that present in a fully constructed project. Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise in connection with such construction.

 

29.30      No Violation. Tenant hereby warrants and represents that neither its execution of nor performance under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold Landlord harmless

 

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against any claims, demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, arising from Tenant’s breach of this warranty and representation.

 

29.31      Communications and Computer Lines. Tenant may install, maintain, replace, remove or use any communications or computer wires and cables serving the Premises (collectively, the “Lines”), provided that (i) Tenant shall obtain Landlord’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), use an experienced and qualified contractor approved in writing by Landlord, and comply with all of the other provisions of Articles 7 and 8 of this Lease. Tenant shall pay all costs in connection therewith. Landlord reserves the right, upon notice to Tenant prior to the expiration or earlier termination of this Lease, to require that Tenant, at Tenant’s sole cost and expense, remove any Lines located in or serving the Premises prior to the expiration or earlier termination of this Lease.

 

29.32      Transportation Management. Provided that any such programs are applied equally to all tenants of the Project, Tenant shall act reasonably to fully comply with all present or future programs intended to manage parking, transportation or traffic in and around the Project and/or the Building, and in connection therewith, Tenant shall take responsible action for the transportation planning and management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities. Such programs may include, without limitation: (i) restrictions on the number of peak-hour vehicle trips generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of an in-house ridesharing program and an employee transportation coordinator; (iv) working with employees and any Project, Building or area-wide ridesharing program manager; (v) instituting employer-sponsored incentives (financial or in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work shifts for employees.

 

29.33      Guarantor. Intentionally Omitted.

 

29.34      REIT. Tenant acknowledges that the Company, an affiliate of Landlord, elects to be taxed as a real estate investment trust (a “REIT”) under the Code. Tenant hereby agrees to modifications of this Lease required to retain or clarify the Company’s status as a REIT, provided such modifications: (a) are reasonable, (b) do not adversely affect in a material manner Tenant’s use of the Premises as herein permitted, and (c) do not increase the Base Rent, Additional Rent and other sums to be paid by Tenant or Tenant’s other obligations pursuant to this Lease, or reduce any rights of Tenant under this Lease, then Landlord may submit to Tenant an amendment to this Lease incorporating such required modifications, and Tenant shall execute, acknowledge and deliver such amendment to Landlord within ten (10) days after Tenant’s receipt thereof.

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

 

	
LANDLORD:
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
Durham KTP Tech 7, LLC,
    	
 
    	
Braeburn Pharmaceuticals, Inc.
    
	
a Delaware limited liability company
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Adam B. Sichol
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Adam B. Sichol
    	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Authorized Signatory
    	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
/s/ Marshall A. Woodworth
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    	
 
    	
Name:
    	
Marshall A.   Woodworth
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    	
 
    	
Its:
    	
CFO
    

 

47

 

Exhibit A

 

keystone tech 7

 

first offer space

 

 

1

 

EXHIBIT B

 

NOTICE OF LEASE TERM DATES

 

To:

 

 

 

 

Re:                             Lease dated                              , 20          between                             , a                                   (“Landlord”), and                             , a                                                          (“Tenant”) concerning Suite                              on floor(s)                              of the office building located at [INSERT BUILDING ADDRESS].

 

Gentlemen:

 

In accordance with the Lease (the “Lease”), we wish to advise you and/or confirm as follows:

 

1.                                      The Lease Term shall commence on or has commenced on                              for a term of                              ending on                              .

 

2.             Rent commenced to accrue on                              , in the amount of                              .

 

3.                                      If the Lease Commencement Date is other than the first day of the month, the first billing will contain a pro rata adjustment. Each billing thereafter, with the exception of the final billing, shall be for the full amount of the monthly installment as provided for in the Lease.

 

4.             Your rent checks should be made payable to                              at                              .

 

5.             The exact number of rentable/usable square feet within the Premises is                              square feet.

 

6.                                      Tenant’s Share as adjusted based upon the exact number of usable square feet within the Premises is                              %.

 

	
 
    	
 
    	
“Landlord”:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
,
    
	
 
    	
 
    	
a
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Its:
    	
 
    
						

 

 

Agreed to and Accepted as
 of                        , 20         .

 

	
“Tenant”:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
a
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    	
 
    
					

 

1

 

Exhibit C

 

Premises

 

 

2

 

Exhibit C-1

 

EARLY ENTRY PREMISES

 

3

 

EXHIBIT D

 

TENANT WORK LETTER

 

This Tenant Work Letter sets forth the terms and conditions relating to the construction of the initial tenant improvements in the Premises. This Tenant Work Letter is essentially organized chronologically and addresses the issues of the construction of the Premises, in sequence, as such issues will arise during the actual construction of the Premises. All references in this Tenant Work Letter to Articles or Sections of “this Lease” shall mean the relevant portion of the Lease to which this Tenant Work Letter is attached as Exhibit D and of which this Tenant Work Letter forms a part, and all references in this Tenant Work Letter to Sections of “this Tenant Work Letter” shall mean the relevant portion of this Tenant Work Letter.

 

1.             LANDLORD’S INITIAL CONSTRUCTION IN THE PREMISES

 

1.1          Landlord Work. Landlord shall, at Landlord’s sole cost and expense, complete the work described on the attached Attachment 1 (collectively, the “Landlord Work”). The Landlord Work shall be performed in a first-class, workmanlike manner. Landlord has advised Tenant that is shall use its best efforts to cause no delay in the performance by Tenant of its upfit of the Premises.

 

2.             TENANT IMPROVEMENTS

 

2.1          Tenant Improvements Allowance. Tenant shall be entitled to a tenant improvement allowance (the “Tenant Improvements Allowance”) in the maximum aggregate amount of $3,903,100.00 (i.e. $115.00 per rentable square foot of the entire Premises initially leased hereunder and adjusted based on the actual square footage) (the “Maximum Allowance”) for the hard costs and customary soft costs incurred by Tenant including, without limitation out-of-pocket architectural and engineering fees and a 2.5% project management fee (only with respect to the Tenant Improvement Allowance) payable to Landlord or its affiliates and permits, relating to the initial design and construction of Tenant’s improvements which are to be permanently affixed to the Premises in accordance with this Work Letter (the “Tenant Improvements”). For the avoidance of any doubt, the purchase and installation of data and telecommunications cabling shall not be included in the definition of Tenant Improvements. The Tenant agrees to keep the Landlord advised as to the progress of the work by providing copies of the Contractor’s applications for payment. The Tenant Improvements are described on the allocation of responsibility attached as Attachment 2 (the “Base TI Requirements”), and Landlord and Tenant acknowledge and agree that the Tenant Improvements Allowance shall be utilized subject to and pursuant to this Tenant Work Letter to construct the Tenant Improvements as described in the Base TI Requirements. In no event shall Landlord be obligated to make disbursements pursuant to this Tenant Work Letter in a total amount which exceeds the Maximum Allowance. All Tenant Improvements for which the Tenant Improvements Allowance has been made available shall be deemed Landlord’s property under the terms of the Lease.

 

2.2          Disbursement of the Tenant Improvements Allowance. Except as otherwise set forth in this Tenant Work Letter, the Tenant Improvements Allowance shall be disbursed by Landlord (each of which disbursements shall be made pursuant to Landlord’s reasonable disbursement process) for costs incurred by Tenant related to the construction of the Tenant Improvements and for the following items and costs (collectively, the “Tenant Improvements Allowance Items”): (i) payment of the fees of the “Architect” as that term is defined in Section 3.1 of this Tenant Work Letter in connection with the preparation and review of the “Construction Documents,” as that term is defined in Section 3.1 of this Tenant Work Letter; (ii) payment of the project management fee described above, (iii) the cost of any changes to the Construction Documents or Tenant Improvements required by all applicable building codes (the “Code”) enacted after approval of the Construction Documents, (iv) costs payable to the Contractor and any subcontractors, (v) payment of the costs of the Project Manager of Landlord or Tenant, and (vi) other costs incurred in connection with the Tenant Improvements to the extent the same can be paid using the Tenant Improvements Allowance pursuant to the specific provisions of this Tenant Work Letter.

 

The difference between the Cost Proposal, as defined below, and the Tenant Improvements Allowance shall be defined as the “Tenant’s Share of Improvements Costs” and such amount is subject to change if the Cost

 

1

 

Proposal changes. Landlord shall not be required to disburse any portion of the Tenant Improvements Allowance until Tenant has expended on the Tenant Improvements at least Fifty Percent (50%) of the Tenant’s Share of Improvements Costs (“Tenant’s First Contribution”). Once Tenant has satisfied Tenant’s First Contribution Landlord shall disburse to Tenant (or, at Tenant’s option, to Tenant’s general contractor) Fifty Percent (50%) of the Tenant Improvements Allowance as noted below. Landlord shall not be required to disburse any further portion of the Tenant Improvements Allowance until Tenant has expended on the Tenant Improvements One Hundred Percent (100%) of the Tenant’s Share of Improvements Costs (“Tenant’s Full Contribution”). Once Tenant has satisfied Tenant’s Full Contribution Landlord shall disburse to Tenant (or, at Tenant’s option, to Tenant’s general contractor) the remaining Fifty Percent (50%) of the Tenant Improvements Allowance as noted below.

 

Once Landlord is required to disburse any portion of the Tenant Improvement Allowance as noted above, Landlord shall disburse the applicable portion of the Tenant Improvements Allowance within thirty (30) calendar days of a Payment Request (as hereinafter defined), an amount equal to the portion of the actual costs and expenses Tenant has incurred and paid in connection with the construction of the Tenant Improvements to date, over the amount Tenant is required to pay as noted above, which are to be paid for from the Tenant Improvement Allowance provided the following conditions have been satisfied:

 

(1)           Tenant has delivered to Landlord a payment request (“Payment Request”) in a form reasonably satisfactory to Landlord specifying the work which has been completed; and

 

(2)           Tenant’s general contractor and/or architect shall have submitted an application for payment and sworn statement substantially in the form of AIA Document G702; and

 

(3)           Tenant has submitted to Landlord lien waivers or partial lien waivers to cover the work included under the Payment Request and all prior work Tenant was required to pay for before utilizing the Tenant Improvements Allowance.

 

In the event the Tenant Improvements have been paid for in full prior to Tenant utilizing the full amount of the Tenant Improvements Allowance and provided Tenant has satisfied all the items noted above, Landlord shall provide Tenant with a cash payment in the amount of the un-utilized Tenant Improvements Allowance.

 

3.             CONSTRUCTION DOCUMENTS

 

3.1          Selection of Architect/Construction Documents. Tenant shall cause Tenant’s design/build contractor to retain Clark Nexsen (collectively, the “Architect”) as subcontractors to prepare the “Construction Documents,” as that term is defined in this Section 3.1 for the Tenant Improvements, together with the consulting engineers selected by the Architect and reasonably approved by Landlord. Tenant may cause Tenant’s design/build contractor to retain another Architect or Architects from time to time, provided, however, that any such other Architects shall be subject to Landlord’s reasonable approval. The plans and drawings to be prepared by Architect hereunder shall be known collectively as the “Construction Documents.” All Construction Documents shall comply with the drawing format and specifications as reasonably determined by Landlord, and shall be subject to Landlord’s and Tenant’s approval. Landlord may hire an architectural firm to conduct a peer review, and the fees associated with this peer review shall be paid by Landlord and not from the Tenant Improvements Allowance.

 

Landlord has no obligation to approve or perform any Tenant Change or any Tenant Improvements not shown on the plans previously approved by Landlord and Tenant or reasonably inferable therefrom if, in Landlord’s reasonable judgment, such Tenant Improvements (i) would materially increase the cost of performing any other work in the Building, unless in each case Tenant agrees to pay such costs based on Landlord’s Change Estimate Notice (as defined below), (ii) are incompatible with the design, quality, equipment or systems of the Building or otherwise require a change to the existing Building systems or structure, each in a manner that would not otherwise be required in connection with the improvements contemplated by the Fit Plan (as defined below), as reasonably determined, (iii) is not consistent the first class nature of the Building, as reasonably determined, or (iv) otherwise do not materially comply with the provisions of the Lease.

 

3.2          Final Space Plan. Tenant has approved the preliminary space plan prepared by the Architect, on behalf of the Contractor, attached as Attachment 3 hereto (the “Fit Plan”). Tenant shall use commercially

 

2

 

reasonable efforts to cause the Contractor to have the Architect prepare a space plan for the Premises which space plan shall be reasonably consistent with the Fit Plan and shall include a layout and designation of all labs, offices, rooms and other partitioning, their intended use, and equipment to be contained therein, and shall deliver the space plan to Landlord and Tenant for their approval. Landlord and Tenant shall review and provide any changes to the space plan within five Business Days of receipt thereof. Once Landlord and Tenant approve the final space plan, the space plan shall be considered final (the “Final Space Plan”).

 

3.3          Construction Documents. Tenant shall cause Tenant’s design/build contractor to cause the Architect to complete final Construction Documents consistent with the Final Space Plan and shall submit the same to Landlord and Tenant for their approval. Landlord and Tenant shall review and provide any changes to the construction documents within five Business Days of receipt thereof, and the Tenant shall use reasonable efforts to cause the Architect to prepare and circulate modified documents within five Business Days of its receipt of any requested changes from Tenant or Landlord. Such process of submittal and response within the time frame specified in the preceding sentence shall continue until each of Landlord and Tenant gives written approval to such documents, and the Construction Documents shall be considered final once approved by the Landlord and the Tenant. In no event may either Tenant or Landlord require any changes that are inconsistent with the Final Space Plan. The Construction Documents shall comply with Applicable Laws existing on the date of this Tenant Work Letter and which may be enacted prior to approval of completed Construction Documents. Subject to the provisions of Sections 3.1 and 5.4 of this Work Letter, Tenant may, from time to time, by written request to Landlord on a form reasonably specified by Landlord (“Tenant Change”), request a change in the Tenant Improvements shown on the Construction Documents, which approval shall not be unreasonably withheld or conditioned, and shall be granted or denied within five (5) business days after delivery of such Tenant Change to Landlord.

 

3.4          Permits. The Construction Documents as approved (or deemed approved) pursuant to Section 3.3 shall be the “Approved Working Drawings”. Following approval or deemed approval of the Cost Proposal, as described below, Tenant shall promptly thereafter submit or cause to be submitted, the Approved Working Drawings to the appropriate municipal authorities for all applicable building permits necessary to allow “Contractor,” as that term is defined in Section 4.1, below, to commence and fully complete the construction of the applicable Tenant Improvements (the “Permits’’).

 

3.5          Tenant Changes. With respect to any “Major Tenant Change” which shall be defined as any Tenant Change that costs more than $90,000, Landlord may, but shall not be obligated to, approve any Major Tenant Change on the condition that Tenant shall pay in full, in advance (or cause to be paid in full from the Tenant Improvements Allowance), any and all additional costs or expenses associated with the approval of said Major Tenant Change. If Tenant shall request any Tenant Change, Tenant shall provide Landlord in writing (a “Tenant’s Change Estimate Notice”) the estimated costs of design and/or construction of the Tenant Improvements that Tenant determines will be incurred as a consequence of such Tenant Change on an order of magnitude basis on account of such proposed Tenant Change.

 

4.             CONSTRUCTION OF THE TENANT IMPROVEMENTS

 

4.1          Contractor. A design/build contractor designated by Tenant and approved by Landlord (“Contractor”) shall construct the Tenant Improvements. Landlord and Tenant have agreed that PEG Contracting, Inc. shall act as the Contractor.

 

4.2          Cost Proposal. After the Approved Working Drawings are approved by Landlord and Tenant, Tenant shall provide Landlord with a cost proposal (or cost proposals) in accordance with the Approved Working Drawings, which cost proposal(s) shall include, as nearly as possible, the cost of all Tenant Improvements Allowance Items to be incurred by Tenant in connection with the design and construction of the Tenant Improvements and shall include a so-called guaranteed maximum price proposal from Tenant’s Contractor (collectively, the “Cost Proposal”), which Cost Proposal shall include, among other things, the Contractor’s fee, general conditions, and a reasonable contingency. The Cost Proposal may include early trade release packages for long lead time matters such as mechanical equipment. In connection with the Cost Proposal, Tenant shall cause the Contractor to solicit at least three bids from each subcontractor trade for which the total cost is expected to exceed $10,000. Tenant will consult with Landlord prior to approving the subcontractors to whom it will be bid and

 

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Landlord may review bid packages at Landlord’s request. In the case of each bid request, Tenant will accept the lowest responsible bid, unless Landlord and Tenant reasonably determine otherwise.

 

4.3          Construction of Tenant Improvements by Contractor.

 

4.3.1       Intentionally omitted.

 

4.3.2       Tenant’s Retention of Contractor. Tenant shall independently retain Contractor to construct the Tenant Improvements in accordance with the applicable Approved Working Drawings and the applicable Cost Proposal. Landlord shall be entitled to review the Tenant’s construction contract with the Contractor upon Landlord’s written request. The Project Manager of Tenant shall manage the Contractor in its performance of the construction work and endeavor to oversee the Contractor’s performance of its work to protect Landlord from construction defects.

 

5.             COMPLETION OF THE TENANT IMPROVEMENTS;

LEASE COMMENCEMENT DATE

 

5.1          Substantial Completion. Tenant shall give Landlord at least twenty (20) days prior written notice of the date that Tenant reasonably anticipates that the Tenant Improvements will be Substantially Complete (as defined below). For purposes of this Lease, “Substantial Completion” shall occur upon the completion of the last of the following to occur: (i) the completion of construction of the Tenant Improvements substantially pursuant to the Approved Working Drawings for such Tenant Improvements (each as reasonably determined by Landlord), with the exception of any punch list items which do not impair Tenant’s ability to occupy the Premises for their contemplated use, (ii) the acquisition of a certificate of occupancy or its legal equivalent allowing occupancy of the Premises (a “Sign Off”), and (iii) delivery of a certificate of substantial completion from the Architect on behalf of the Contractor confirming the matters set forth in the foregoing clause (i). In the event that the Sign Off is not a final certificate of occupancy, Tenant shall diligently prosecute the work necessary to achieve a full certificate of occupancy and use commercially reasonable efforts to obtain such full certificate of occupancy as soon as reasonably practicable following Substantial Completion.

 

5.2          Intentionally omitted.

 

5.3          Walk-through and Punchlist. After the Tenant Improvements are Substantially Completed and prior to Tenant’s move-in into the Premises, following two (2) days’ advance written notice from Tenant to Landlord, Tenant shall cause the Contractor to inspect the Premises with a representative of Landlord and complete a punch list of unfinished items of the Tenant Improvements. After Landlord and Tenant have mutually agreed upon the punch list, authorized representatives for Landlord and Tenant shall execute said punch list. The items listed on such punch list shall be completed by the Contractor within thirty (30) days after the approval of such punch list or as soon thereafter as reasonably practicable, provided that in the event a punch list item reasonably requires longer than thirty (30) days to complete, then Tenant shall cause Contractor to commence the completion of such particular item within thirty (30) days and diligently pursue the same to completion. The terms of this Section 5.3 will not affect the occurrence of the Substantial Completion of the Premises or the occurrence of the Rent Commencement Date.

 

5.4          Intentionally deleted.

 

5.5          Delay Not Caused by Parties. Neither the Landlord nor Tenant shall be considered to be in default of the provisions of this Tenant Work Letter for delays in performance due to Force Majeure.

 

6.             MISCELLANEOUS

 

6.1          Tenant’s Entry Into the Premises. As a condition to Tenant’s entry into the Premises, Tenant shall comply with and perform, and shall cause its employees, agents, contractors, subcontractors, material suppliers and laborers to comply with and perform, all of Tenant’s insurance and indemnity obligations and other obligations governing the conduct of Tenant at the Property under this Lease.

 

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Any independent contractor of Tenant (or any employee or agent of Tenant) performing any work or inspections in the Premises shall be subject to all of the terms, conditions and requirements contained in the Lease (including without limitation the provisions of Article 10) and, prior to such entry, Tenant shall provide Landlord with evidence of the insurance coverages required pursuant to Article 10. Tenant and any Tenant contractor performing any work or inspections in the Premises shall use reasonable efforts not to interfere in any way with construction of, and shall not damage the Landlord Work or the common areas or other parts of the Building.

 

6.2          Tenant’s Representative. Tenant has designated Shay Nuckols as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Landlord, shall have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.

 

6.3          Landlord’s Representative. Landlord has designated J. Randal Long as its sole representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.

 

6.4          Liens. During the performance of the Tenant Improvements Tenant shall comply with Section 9 of the Lease.

 

6.5          General. This Work Letter shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the Premises or any additions to the Premises in the event of a renewal or extension of the original Lease Term, whether by any options under the Lease or otherwise, unless and to the extent expressly provided in the Lease or any amendment or supplement to the Lease that such additional space is to be delivered to Tenant in the same condition the initial Premises is to be delivered.

 

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ATTACHMENT 1

 

LANDLORD’S WORK

 

List HVAC Unit replacement work

 

For Landlord’s Work Landlord shall replace any of the HVAC units listed below which will continue to be utilized at the Premises according to Tenant’s Final Space Plan. If such unit will not be used in the future Landlord may leave the existing unit in place or remove such unit at Landlord’s discretion.

 

	
Building
    	
 
    	
Tenant
    	
 
    	
Suite
    	
 
    	
Manufacturer
    	
 
    	
Description
    	
 
    	
Model #
    	
 
    	
Serial #
    	
 
    	
Tonnage
    	
 
    	
Age
    	
 
    	
Condition
    
	
Tech 7
    	
 
    	
Vacant
    	
 
    	
Suite 200
    	
 
    	
Carrier
    	
 
    	
Gas Pack
    	
 
    	
48TJD016670QA
    	
 
    	
0300F73103
    	
 
    	
15
    	
 
    	
2000
    	
 
    	
Good
    
	
Tech 7
    	
 
    	
Vacant
    	
 
    	
Suite 200
    	
 
    	
Carrier
    	
 
    	
Gas Pack
    	
 
    	
48TJD016670QA
    	
 
    	
0400F74925
    	
 
    	
15
    	
 
    	
2000
    	
 
    	
Fair
    
	
Tech 7
    	
 
    	
Vacant
    	
 
    	
Suite 200
    	
 
    	
Carrier
    	
 
    	
Gas Pack
    	
 
    	
48TJD016670QA
    	
 
    	
4699F63614
    	
 
    	
15
    	
 
    	
1999
    	
 
    	
Fair
    
	
Tech 7
    	
 
    	
Vacant
    	
 
    	
Suite 200
    	
 
    	
Carrier
    	
 
    	
Gas Pack
    	
 
    	
48TJD016670QA
    	
 
    	
4599F61764
    	
 
    	
15
    	
 
    	
1999
    	
 
    	
Fair
    
	
Tech 7
    	
 
    	
Vacant
    	
 
    	
Suite 200
    	
 
    	
Carrier
    	
 
    	
Gas Pack
    	
 
    	
48TJD016670QA
    	
 
    	
0300F73311
    	
 
    	
15
    	
 
    	
2000
    	
 
    	
Good
    

 

6

 

ATTACHMENT 2

 

TENANT IMPROVEMENTS AND ALLOCATION OF RESPONSIBILITY

 

7

 

ATTACHMENT 3

 

PRELIMINARY PLANS

 

8

 

EXHIBIT E

 

RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by or otherwise with respect to the acts or omissions of any other tenants or occupants of the Project; provided, however, Landlord shall act in good faith to enforce the Rules and Regulations in a nondiscriminatory manner. In the event of any conflict between the Rules and Regulations and the other provisions of this Lease, the latter shall control.

 

1.             Except for any Restricted Area, Tenant shall not alter any lock or install any new or additional locks or bolts on any doors or windows of the Premises without obtaining Landlord’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed. If Tenant shall affix additional locks on doors then Tenant shall furnish Landlord with copies of keys or pass cards or similar devices for said locks. Tenant shall bear the cost of any lock changes or repairs required by Tenant. Two Initial keys will be furnished by Landlord for the Premises, and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be established by Landlord. Upon the termination of this Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet rooms, either furnished to, or otherwise procured by, Tenant and in the event of the loss of keys so furnished, Tenant shall pay to Landlord the cost of replacing same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such changes.

 

2.             All doors opening to public corridors shall be kept closed at all times except for normal ingress and egress to the Premises.

 

3.             Landlord reserves the right to close and keep locked all entrance and exit doors of the Building during such hours as are customary for Comparable Buildings. Tenant, its employees and agents must be sure that the doors to the Building are securely closed and locked when leaving the Premises if it is after the normal hours of business for the Building. Any tenant, its employees, agents or any other persons entering or leaving the Building at any time when it is so locked, or any time when it is considered to be after normal business hours for the Building, may be required to sign the Building register. Access to the Building may be refused unless the person seeking access has proper identification or has a previously arranged pass for access to the Building. Landlord will furnish passes to persons for whom Tenant requests same in writing. Tenant shall be responsible for all persons for whom Tenant requests passes and shall be liable to Landlord for all acts of such persons. The Landlord and his agents shall in no case be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right to prevent access to the Building or the Project during the continuance thereof by any means it deems appropriate for the safety and protection of life and property.

 

4.             Except for shipments by Tenant of its product or receipt by Tenant of goods in the ordinary course of the operation of its business, no furniture, freight or equipment of any kind shall be brought into the Building without prior notice to Landlord. All moving activity into or out of the Building shall be scheduled with Landlord and done only at such time and in such manner as Landlord designates. Landlord shall have the right to prescribe the weight, size and position of all safes and other heavy property brought into the Building and also the times and manner of moving the same in and out of the Building. Safes and other heavy objects shall, if considered necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such safe or property in any case. Any damage to any part of the Building, its contents, occupants or visitors by moving or maintaining any such safe or other property shall be the sole responsibility and expense of Tenant.

 

5.             No furniture, packages, supplies, equipment or merchandise will be received in the Building, except between such hours and by such personnel as shall be designated by Landlord.

 

6.             The requirements of Tenant will be attended to only upon application at the management office for the Project or at such office location designated by Landlord. Employees of Landlord shall not perform any work or do anything outside their regular duties unless under special instructions from Landlord.

 

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7.             No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or affixed by Tenant on any part of the Premises or the Building without the prior written consent of the Landlord. Tenant shall not disturb, solicit, peddle, or canvass any occupant of the Project and shall cooperate with Landlord and its agents of Landlord to prevent same.

 

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

 

9.             Discharge of industrial sewage to the Building plumbing system shall only be permitted if Tenant, at its sole expense, shall have obtained all necessary permits and licenses therefor, including without limitation permits from state and local authorities having jurisdiction thereof.

 

10.          Except as described in the Plans, Tenant shall not overload the floor of the Premises, nor mark, drive nails or screws, or drill into the partitions, woodwork or drywall or in any way deface the Premises or any part thereof without Landlord’s prior written consent; provided, however, that Landlord’s prior written consent shall not be required for the hanging of normal and customary office artwork and personal items, or the installation of standard office shelving. Tenant shall not purchase spring water, ice, towel, linen, maintenance or other like services from any person or persons not included on an approved list that Landlord shall provide to Tenant upon request. Landlord reserves the right to have Landlord’s structural engineer review Tenant’s floor loads on the Building at Landlord’s expense, unless such study reveals that Tenant has exceeded the floor loads, in which case Tenant shall pay the cost of such survey.

 

11.          Except for vending machines intended for the sole use of Tenant’s employees and invitees, no vending machine or machines other than fractional horsepower office machines shall be installed, maintained or operated upon the Premises without the written consent of Landlord.

 

12.          Tenant shall not use or keep in or on the Premises, the Building, or the Project any kerosene, gasoline or other inflammable or combustible fluid, chemical, substance or material except as required in the operation of the business of Tenant and in accordance with all Applicable Laws.

 

13.          Except as provided in the approved Construction Documents, Tenant shall not without the prior written consent of Landlord use any supplemental method of heating other than that supplied by Landlord such as space heaters.

 

14.          Except as generated from typical life science operations, Tenant shall not use, keep or permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Project by reason of noise, odors, or vibrations, or interfere with other tenants or those having business therein, whether by the use of any musical instrument, radio, phonograph, or in any other way. Tenant shall not throw anything out of doors, windows or skylights or down passageways.

 

15.          Except in areas designated by Landlord, Tenant shall not bring into or keep within the Project, the Building or the Premises any animals, birds, aquariums, bicycles or other vehicles.

 

16.          No cooking shall be done or permitted on the Premises, nor shall the Premises be used for the storage of merchandise, for lodging or for any improper, objectionable or immoral purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for employees and visitors, provided that such use is in accordance with all applicable federal, state, county and city laws, codes, ordinances, rules and regulations.

 

17.          Tenant shall not occupy or permit any portion of the Premises to be occupied as an office for a messenger-type operation or dispatch office, public stenographer or typist, or for the manufacture or sale of liquor,

 

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or tobacco in any form, or as a medical office, or as a barber or manicure shop, or as an employment bureau without the express prior written consent of Landlord. Tenant shall not engage or pay any employees on the Premises except those actually working for such tenant on the Premises nor advertise for laborers giving an address at the Premises.

 

18.          Landlord reserves the right to exclude or expel from the Project any person who, in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any act in violation of any of these Rules and Regulations.

 

19.          Tenant, its employees and agents shall not loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls, stairways, or vestibules for the purpose of smoking tobacco products or for any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and egress for the Premises. Tenant and its employees and agents shall smoke only in designated smoking areas.

 

20.          Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to ensure the most effective operation of the Building’s heating and air conditioning system, and shall refrain from attempting to adjust any controls.

 

21.          Tenant shall store all its trash and garbage within the interior of the Premises. No material shall be placed in the trash boxes or receptacles if such material is of such nature that it may not be disposed of in the ordinary and customary manner of removing and disposing of trash and garbage in the city in which the Building is located without violation of any law or ordinance governing such disposal. All trash, garbage and refuse disposal shall be made only through entry-ways provided for such purposes at such times as Landlord shall designate.

 

22.          Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

 

23.          Any persons employed by Tenant to do janitorial work shall be subject to the prior written approval of Landlord, and while in the Building and outside of the Premises, shall be subject to and under the control and direction of the Building manager (but not as an agent or servant of such manager or of Landlord), and Tenant shall be responsible for all acts of such persons.

 

24.          No awnings or other projection shall be attached to the outside walls of the Building without the prior written consent of Landlord, and no curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises other than Landlord standard drapes. All electrical ceiling fixtures hung in the Premises or spaces along the perimeter of the Building must be fluorescent and/or of a quality, type, design and a warm white bulb color approved in advance in writing by Landlord. Except as described in the Plans or required by the DEA, neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without the prior written consent of Landlord. Tenant shall abide by Landlord’s regulations concerning the opening and closing of window coverings which are attached to the windows in the Premises, if any, which have a view of any interior portion of the Building or Building Common Areas.

 

25.          Except as described in the Plans, the sashes, sash doors, skylights, windows, and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be placed on the windowsills.

 

26.          Tenant must comply with requests by the Landlord concerning the informing of their employees of items of importance to the Landlord.

 

27.          No smoking is permitted in the Building or on the Project except in designated smoking areas.

 

28.          Tenant hereby acknowledges that Landlord shall have no obligation to provide guard service or other security measures for the benefit of the Premises, the Building or the Project. Tenant hereby assumes all responsibility for the protection of Tenant and its agents, employees, contractors, invitees and guests, and the property thereof, from acts of third parties, including keeping doors locked and other means of entry to the Premises closed, whether or not Landlord, at its option, elects to provide security protection for the Project or any portion

 

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thereof. Tenant further assumes the risk that any safety and security devices, services and programs which Landlord elects, in its sole discretion, to provide may not be effective, or may malfunction or be circumvented by an unauthorized third party, and Tenant shall, in addition to its other insurance obligations under this Lease, obtain its own insurance coverage to the extent Tenant desires protection against losses related to such occurrences. Tenant shall cooperate in any reasonable safety or security program developed by Landlord or required by law.

 

29.          All non-standard office equipment of any electrical or mechanical nature shall be placed by Tenant in the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise and annoyance.

 

30.          Tenant shall not use in any space or in the public halls of the Building, any hand trucks except those equipped with rubber tires and rubber side guards.

 

31.          No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale shall be conducted in the Premises without the prior written consent of Landlord.

 

32.          No tenant shall use or permit the use of any portion of the Premises for living quarters, sleeping apartments or lodging rooms.

 

Landlord reserves the right at any time to change or rescind any one or more of these Rules and Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord’s judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, Building, the Common Areas and the Project, and for the preservation of good order therein, as well as for the convenience of other occupants and tenants therein. Landlord may waive any one or more of these Rules and Regulations for the benefit of any particular tenants, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of any other tenant, nor prevent Landlord from thereafter enforcing any such Rules or Regulations against any or all tenants of the Project. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to abide by them as a condition of its occupancy of the Premises.

 

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EXHIBIT F

 

[Property Center Name]

 

FORM OF TENANT’S ESTOPPEL CERTIFICATE

 

The undersigned as Tenant under that certain Lease (the “Lease”) made and entered into as of                 , 201    by and between                       as Landlord, and the undersigned as Tenant, for Premises on the                      floor(s) of the office building located at [INSERT BUILDING ADDRESS], certifies as follows:

 

1.             Attached hereto as Exhibit F is a true and correct copy of the Lease and all amendments and modifications thereto. The documents contained in Exhibit F represent the entire agreement between the parties as to the Premises.

 

2.             The undersigned currently occupies the Premises described in the Lease, the Lease Term commenced on                      , and the Lease Term expires on                    , and the undersigned has no option to terminate or cancel the Lease or to purchase all or any part of the Premises, the Building and/or the Project.

 

3.             Base Rent became payable on                  .

 

4.             The Lease is in full force and effect and has not been modified, supplemented or amended in any way except as provided in Exhibit F.

 

5.             Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows:

 

6.             Intentionally Omitted.

 

7.             All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through                   . The current monthly installment of Base Rent is $                    .

 

8.             All conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease have been satisfied and Landlord is not in default thereunder. In addition, the undersigned has not delivered any notice to Landlord regarding a default by Landlord thereunder. The Lease does not require Landlord to provide any rental concessions or to pay any leasing brokerage commissions.

 

9.             No rental has been paid more than thirty (30) days in advance and no security has been deposited with Landlord except as provided in the Lease.

 

10.          As of the date hereof, there are no existing defenses or offsets, or, to the undersigned’s knowledge, claims or any basis for a claim, that the undersigned has against Landlord.

 

11.          If Tenant is a corporation or partnership, each individual executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in North Carolina and that Tenant has full right and authority to execute and deliver this Estoppel Certificate and that each person signing on behalf of Tenant is authorized to do so.

 

12.          There are no actions pending against the undersigned under the bankruptcy or similar laws of the United States or any state.

 

13.          To the best of Tenant’s knowledge, Tenant is in full compliance with all federal, state and local laws, ordinances, rules and regulations affecting its use of the Premises, including, but not limited to, those laws, ordinances, rules or regulations relating to hazardous or toxic materials. Tenant has never permitted or suffered, nor

 

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does Tenant have any knowledge of, the generation, manufacture, treatment, use, storage, disposal or discharge of any hazardous, toxic or dangerous waste, substance or material in, on, under or about the Project or the Premises or any adjacent premises or property in violation of any federal, state or local law, ordinance, rule or regulation.

 

14.          To the undersigned’s knowledge, all tenant improvement work to be performed by Landlord under the Lease has been completed in accordance with the Lease and has been accepted by the undersigned and all reimbursements and allowances due to the undersigned under the Lease in connection with any tenant improvement work have been paid in full. All work (if any) in the common areas required by the Lease to be completed by Landlord has been completed and all parking spaces required by the Lease have been furnished and/or all parking ratios required by the Lease have been met.

 

The undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to a prospective mortgagee or prospective purchaser, and acknowledges that said prospective mortgagee or prospective purchaser will be relying upon the statements contained herein in making the loan or acquiring the property of which the Premises are a part and that receipt by it of this certificate is a condition of making such loan or acquiring such property.

 

Executed at                              on the         day of                        , 201      .

 

	
 
    	
“Tenant”:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
                                                                                                     ,
    
	
 
    	
a
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Its:
    	
 
    
					

 

2

 

CONFIDENTIAL DOCUMENT

 

EXHIBIT G

 

ENVIRONMENTAL QUESTIONNAIRE

 

ENVIRONMENTAL QUESTIONNAIRE

FOR COMMERCIAL AND INDUSTRIAL PROPERTIES

 

Property Name:                  Keystone Tech 7

 

Property Address:              627 Davis Drive, Morrisville, North Carolina 27560

 

Instructions: The following questionnaire is to be completed by the Lessee representative with knowledge of the planned operations for the specified building/location. Please print clearly and attach additional sheets as necessary.

 

1.0          PROCESS INFORMATION

 

Describe planned use, and include brief description of manufacturing processes employed.

 

The planned use of the facility includes Current Good Manufacturing Practices (CGMP) compliant operations for pharmaceutical products with associated storage/warehouse and administrative support areas. Some of the products manufactured in this facility are expected to be Drug Enforcement Administration (DEA) Schedule III.

 

The manufacturing processes planned include formulation, blending/mixing, extrusion and/or filling, and packaging in environmentally controlled spaces such as clean rooms that are typical of pharmaceutical production. Also, the associated quality control (QC) testing of the products will be performed throughout the manufacturing process, as needed. There are no storage tanks expected, underground or aboveground.

 

2.0          HAZARDOUS MATERIALS

 

Are hazardous materials used or stored? If so, continue with the next question. If not, go to Section 3.0.

 

2.1          Are any of the following materials handled on the Property?                                                               Yes x No o

 

(A material is handled if it is used, generated, processed, produced, packaged, treated, stored, emitted, discharged, or disposed.) If so, complete this section. If this question is not applicable, skip this section and go on to Section 5.0.

 

	
o   Explosives
    	
o   Fuels
    	
o   Oils
    
	
x   Solvents
    	
o   Oxidizers
    	
x   Organics/Inorganics
    
	
x   Acids
    	
x   Bases
    	
o   Pesticides
    
	
x   Gases
    	
o   PCBs
    	
o   Radioactive Materials
    
	
o   Other (please specify)
    	
 
    	
 
    

 

1

 

2-2.                           If any of the groups of materials checked in Section 2.1, please list the specific material(s), use(s), and quantity of each chemical used or stored on the site in the Table below. If convenient, you may substitute a chemical inventory and list the uses of each of the chemicals in each category separately.

 

	
 
    	
 
    	
Physical State (Solid, Liquid, or
    	
 
    	
 
    	
 
    	
Container
    	
 
    	
Number of
    	
 
    	
Total
    	
 
    
	
Material
    	
 
    	
Gas)
    	
 
    	
Usage
    	
 
    	
Size
    	
 
    	
Containers
    	
 
    	
Quantity
    	
 
    
	
Opioid
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 29 kg
    	
 
    
	
Elastomeric Polymer
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 1 kg
    	
 
    
	
Ethanol
    	
 
    	
Liquid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 68 L
    	
 
    
	
Nitrogen
    	
 
    	
Gas
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
3 cylinders
    	
 
    
	
Benzisoxazole   derivative
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 9 kg
    	
 
    
	
Magnesium Salt
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 100 g
    	
 
    
	
Phospholipid
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 43 kg
    	
 
    
	
Organic ester   compound
    	
 
    	
Liquid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 48kg
    	
 
    
	
Organic Compound   (solvent)
    	
 
    	
Solid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 20 kg
    	
 
    
	
Isopropyl   Alcohol (70%)
    	
 
    	
Liquid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 1 gallon
    	
 
    
	
Methanol
    	
 
    	
Liquid
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
< 1 gallon
    	
 
    

 

2-3.         Describe the planned storage area location(s) for these materials. Please include site maps and drawings as appropriate.

 

Materials will be stored in the designated Materials Storage Area, see attached preliminary facility layout.

 

 

 

3.0          HAZARDOUS WASTES

 

	
Are hazardous   wastes generated?
    	
Yes x   No o
    

 

If yes, continue with the next question. If not, skip this section and go to section 4.0.

 

3.1          Are any of the following wastes generated, handled, or disposed of (where applicable) on the Property?

 

	
x   Hazardous wastes
    	
o   Industrial Wastewater
    
	
o   Waste oils
    	
o   PCBs
    
	
o   Air emissions
    	
o   Sludges
    
	
o   Regulated Wastes
    	
o   Other (please specify)
    

 

3-2.         List and quantify the materials identified in Question 3-1 of this section.

 

	
WASTE
    	
 
    	
RCRA listed
    	
 
    	
 
    	
 
    	
APPROXIMATE MONTHLY
    	
 
    	
WASTE
    	
 
    	
 
    	
 
    
	
GENERATED
    	
 
    	
Waste?
    	
 
    	
SOURCE
    	
 
    	
QUANTITY
    	
 
    	
CHARACTERIZATION
    	
 
    	
DISPOSITION
    	
 
    
	
Acid, pH 3
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    
	
Base, pH 10
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    

 

3-3.                           Please include name, location, and permit number (e.g. EPA ID No.) for transporter and disposal facility, if applicable). Attach separate pages as necessary.

 

	
Transporter/Disposal Facility Name
    	
 
    	
Facility Location
    	
 
    	
Transporter (T) or Disposal (D) Facility
    	
 
    	
Permit Number
    
	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    	
 
    	
TBD
    

 

2

 

3-4.                           Are pollution controls or monitoring employed in the process to prevent or minimize the release of wastes into the environment?                                                                                                                                                 Yes o No o

 

3-5.         If so, please describe.

 

To be determined.

 

 

 

4.0          USTS/ASTS

 

4.1                               Are underground storage tanks (USTs), aboveground storage tanks (ASTs), or associated pipelines used for the storage of petroleum products, chemicals, or liquid wastes present on site (lease renewals) or required for planned operations (new tenants)?  Yes o No x

 

If not, continue with section 5.0. If yes, please describe capacity, contents, age, type of the USTs or ASTs, as well any associated leak detection/spill prevention measures. Please attach additional pages if necessary.

 

	
 
    	
 
    	
 
    	
 
    	
Year
    	
 
    	
Type (Steel, Fiberglass,
    	
 
    	
Associated Leak Detection / Spill Prevention
    
	
Capacity
    	
 
    	
Contents
    	
 
    	
Installed
    	
 
    	
etc)
    	
 
    	
Measures*
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*Note:    The following are examples of leak detection / spill prevention measures:

	
Integrity   testing
    	
Inventory   reconciliation
    	
Leak detection   system
    
	
Overfill   spill protection
    	
Secondary   containment
    	
Cathodic   protection
    

 

4-2.                           Please provide copies of written tank integrity test results and/or monitoring documentation, if available.

 

4-3.                           Is the UST/AST registered and permitted with the appropriate regulatory agencies?             Yes o No o

 

If so, please attach a copy of the required permits.

 

4-4.                           If this Questionnaire is being completed for a lease renewal, and if any of the USTs/ASTs have leaked, please state the substance released, the media(s) impacted (e.g., soil, water, asphalt, etc.), the actions taken, and all remedial responses to the incident.

 

4-5.                           If this Questionnaire is being completed for a lease renewal, have USTs/ASTs been removed from the Property?
                                                                                                                                                      Yes o No o

 

If yes, please provide any official closure letters or reports and supporting documentation (e.g., analytical test results, remediation report results, etc.).

 

4-6.                           For Lease renewals, are there any above or below ground pipelines on site used to transfer chemicals or wastes?
                                                                                                                                                      Yes o No o

 

For new tenants, are installations of this type required for the planned operations?

 

3

 

Yes o No o

 

If yes to either question, please describe.

 

 

 

 

 

5.0          ASBESTOS CONTAINING BUILDING MATERIALS

 

Please be advised that an asbestos survey may have been performed at the Property. If provided, please review the information that identifies the locations of known asbestos containing material or presumed asbestos containing material. All personnel and appropriate subcontractors should be notified of the presence of these materials, and informed not to disturb these materials. Any activity that involves the disturbance or removal of these materials must be done by an appropriately trained individual/contractor.

 

6.0          REGULATORY

 

6-1.                           Does the operation have or require a National Pollutant Discharge Elimination System (NPDES) or equivalent permit?
                                                                                                                                                      Yes o No o

If so, please attach a copy of this permit.                                 To be determined.

 

6-2.                           Has a Hazardous Materials Business Plan been developed for the site?
                                                                                                                                                      Yes o No x

If so, please attach a copy.

 

CERTIFICATION

 

I am familiar with the real property described in this questionnaire. By signing below, I represent and warrant that the answers to the above questions are complete and accurate to the best of my knowledge. I also understand that Lessor will rely on the completeness and accuracy of my answers in assessing any environmental liability risks associated with the property.

 

	
 
    	
Signature:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Telephone:
    	
 
    

 

4

 

 

1

 

EXHIBIT H

 

MEMORANDUM OF LEASE

 

Prepared by and after recording return to:

 

Nelson Mullins (CMR)

4140 Parklake Avenue

Suite 200

Raleigh, NC 27612

 

STATE OF NORTH CAROLINA

COUNTY OF DURHAM

 

MEMORANDUM OF LEASE

 

THIS MEMORANDUM OF LEASE (this “Lease Amendment”) is made as of December , 2015, by and between DURHAM KTP TECH 7, LLC, a Delaware limited liability company (“Landlord”) and BRAEBURN PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord and Tenant entered into a Lease dated December 31 , 2015 (as amended, the “Lease”) for the lease of certain premises located at 627 Davis Drive, Morrisville, Wake, North Carolina, as more particularly set forth in the Lease (the “Premises”); and

 

WHEREAS, the parties desire to amend record the Memorandum reflect the terms of the Lease.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, hereby agree as follows:

 

1.                                      Term. The term of the Lease is one hundred and twenty (120) months, and will commence on or about November 1, 2016.

 

2.                                      Premises. The Premises consists of approximately 33,940 rentable square feet.

 

3.                                      Option to Extend Term. Tenant has two (2) options to extend the term of the Lease in accordance with the terms provided in the Lease.

 

4.                                      Right of First Offer. Tenant has a continuing right of first offer with respect to the First Offer Space as described in the Lease, and in accordance with the terms provided in the Lease.

 

5.                                      Expansion Right. Commencing on the Rent Commencement Date and expiring twelve (12) months thereafter, Tenant has a one-time Expansion Right with respect to the First offer Space in accordance with the terms provided in the Lease.

 

2

 

6.                                      Incorporation by Reference and Capitalized Terms. All remaining provisions set forth in the Lease are hereby incorporated into this Memorandum the same as if herein set out. All capitalized terms not defined herein shall be given the meanings assigned thereto in the Lease.

 

7.                                      Conflict. In the event of any conflict between the terms of the Lease and the terms of this Memorandum, the terms of the Lease shall control and prevail.

 

8.                                      Counterparts. Landlord and Tenant agree that this Memorandum may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[SIGNATURE PAGE FOLLOWS]

 

3

 

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

 

	
LANDLORD:
    	
 
    
	
 
    	
 
    	
 
    
	
Durham KTP Tech 7, LLC,
    	
 
    
	
a Delaware limited liability company
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Adam B. Sichol
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Adam B. Sichol
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TENANT:
    	
 
    
	
 
    	
 
    	
 
    
	
Braeburn Pharmaceuticals, Inc.
    	
 
    
	
a Delaware corporation
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Marshall H.   Woodworth
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Marshall H. Woodworth
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Its:
    	
CFO
    	
 
    

 

4

 

	
STATE OF
    	
North Carolina
    	
 
    
	
COUNTY OF
    	
Wake
    	
 
    

 

I certify that the following person personally appeared before me this day, acknowledging to me that he signed the foregoing document for the purpose(s) stated therein, in the capacity indicated therein: Adam B. Sichol , as the Authorized Signatory of Durham KTP Tech 7, LLC.

 

	
Date:   December 31,   2015 
    	
/s/ Katharine G   Vaughn
    
	
 
    	
Signature   of Notary Public
    
	
 
    	
 
    
	
 
    	
/s/ Katharine G   Vaughn
    
	
 
    	
Notary’s printed   or typed name
    
	
 
    	
My commission   expires: 
    	
01/30/2017
    
	
 
    	
 
    
	
(Official   Seal)
    	
 
    
	
 
    	
 
    
	

    	
 
    
	
 
    	
 
    
	
Notary seal or   stamp must appear within this box.
    	
 
    

 

5

 

	
STATE OF
    	
North Carolina
    	
 
    
	
COUNTY OF
    	
Wake
    	
 
    

 

I certify that the following person personally appeared before me this day, acknowledging to me that she signed the foregoing document for the purpose(s) stated therein, in the capacity indicated therein: Marshall H. Woodworth as the CFO of Braeburn Pharmaceuticals, Inc.

 

	
Date:   December 28,   2015
    	
/s/ Lollea   Franklin
    
	
 
    	
Signature   of Notary Public
    
	
 
    	
 
    
	
 
    	
/s/ Lollea   Franklin
    
	
 
    	
Notary’s printed   or typed name
    
	
 
    	
My commission   expires: 
    	
11/28/2018
    
	
 
    	
 
    
	
(Official   Seal)
    	
 
    
	
 
    	
 
    
	
Notary seal or   stamp must appear within this box.
    	
 
    

 

6

 

EXHIBIT I

 

EXISTING HVAC UNITS

 

7

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