LEASE AGREEMENT BETWEEN
WHC-SIX REAL ESTATE, L.P.,
A DELAWARE LIMITED PARTNERSHIP,
AS LANDLORD,
AND
PALATIN TECHNOLOGIES, INC.,
A DELAWARE CORPORATION,
AS TENANT
DATED MARCH 13, 1997
TABLE OF CONTENTS
Article Caption Page
1 Lease Grant. . . . . . . . . . . . . . . . . . . . . . . .1
2 Term . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . .2
(a) Basic Rent. . . . . . . . . . . . . . . . . . . . . . .2
(b) Payment . . . . . . . . . . . . . . . . . . . . . . . .2
(c) Operating Expenses. . . . . . . . . . . . . . . . . . .3
4 Delinquent Payment; Handling Charges . . . . . . . . . . .5
5 Security Deposit . . . . . . . . . . . . . . . . . . . . .5
6 Landlord's Obligations . . . . . . . . . . . . . . . . . .6
(a) Services. . . . . . . . . . . . . . . . . . . . . . . .6
(b) Excess Utility Use. . . . . . . . . . . . . . . . . . .7
(c) Restoration of Services; Abatement. . . . . . . . . . .7
7 Improvements; Alterations; Repairs; Maintenance. . . . . .8
(a) Improvements; Alterations . . . . . . . . . . . . . . .8
(b) Repairs; Maintenance. . . . . . . . . . . . . . . . . 8
(c) Performance of Work . . . . . . . . . . . . . . . . . .9
(d) Mechanic's Liens. . . . . . . . . . . . . . . . . . . .9
8 Use. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
9 Assignment and Subletting. . . . . . . . . . . . . . . . 10
(a) Transfers; Consent. . . . . . . . . . . . . . . . . . 10
(b) Cancellation. . . . . . . . . . . . . . . . . . . . . 11
(c) Additional Compensation . . . . . . . . . . . . . . . 11
10 Insurance; Waivers; Subrogation; Indemnity . . . . . . . 11
(a) Insurance . . . . . . . . . . . . . . . . . . . . . . 11
(b) Waiver of Negligence; No Subrogation. . . . . . . . . 12
(c) Indemnity . . . . . . . . . . . . . . . . . . . . . . 12
11 Subordination Attornment; Notice to Landlord's
Mortgagee. . . . . . . . . . . . . . . . . . . . . . . . 12
(a) Subordination . . . . . . . . . . . . . . . . . . . . 12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(c) Attornment. . . . . . . . . . . . . . . . . . . . . . 13
(d) Notice to Landlord's Mortgagee. . . . . . . . . . . . 13
12 Rules and Regulations. . . . . . . . . . . . . . . . . . 13
13 Condemnation . . . . . . . . . . . . . . . . . . . . . . 13
(a) Total Taking. . . . . . . . . . . . . . . . . . . . . 13
(b) Partial Taking - Tenant's Rights. . . . . . . . . . . 13
(c) Partial Taking - Landlord's Rights. . . . . . . . . . 14
(d) Award . . . . . . . . . . . . . . . . . . . . . . . . 14
14 Fire or Other Casualty . . . . . . . . . . . . . . . . . 14
(a) Repair Estimate . . . . . . . . . . . . . . . . . . . 14
(b) Landlord's and Tenant's Rights. . . . . . . . . . . . 15
(c) Landlord's Rights . . . . . . . . . . . . . . . . . . 15
(d) Repair Obligation . . . . . . . . . . . . . . . . . . 15
15 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 15
16 Events of Default. . . . . . . . . . . . . . . . . . . . 15
17 Remedies . . . . . . . . . . . . . . . . . . . . . . . . 16
18 Payment by Tenant; Non-Waiver. . . . . . . . . . . . . . 17
(a) Payment by Tenant . . . . . . . . . . . . . . . . . . 17
(b) No Waiver . . . . . . . . . . . . . . . . . . . . . . 17
19 Landlord's Lien. . . . . . . . . . . . . . . . . . . . . 17
20 Surrender of Premises. . . . . . . . . . . . . . . . . . 17
21 Holding Over . . . . . . . . . . . . . . . . . . . . . . 18
22 Certain Rights Reserved by Landlord. . . . . . . . . . . 18
23 Intentionally Omitted. . . . . . . . . . . . . . . . . . 19
24 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . 19
(a) Landlord's Transfer . . . . . . . . . . . . . . . . . 19
(b) Landlord's Liability. . . . . . . . . . . . . . . . . 19
(c) Force Majeure . . . . . . . . . . . . . . . . . . . . 19
(d) Brokerage . . . . . . . . . . . . . . . . . . . . . . 19
(e) Estoppel Certificates . . . . . . . . . . . . . . . . 19
(f) Notices . . . . . . . . . . . . . . . . . . . . . . . 20
(g) Separability. . . . . . . . . . . . . . . . . . . . . 20
(h) Amendments; and Binding Effect. . . . . . . . . . . . 20
(i) Quiet Enjoyment . . . . . . . . . . . . . . . . . . . 20
(j) No Merger . . . . . . . . . . . . . . . . . . . . . . 20
(k) No Offer. . . . . . . . . . . . . . . . . . . . . . . 20
(l) Entire Agreement. . . . . . . . . . . . . . . . . . . 21
(m) Waiver of Jury Trial. . . . . . . . . . . . . . . . . 21
(n) Governing Law . . . . . . . . . . . . . . . . . . . . 21
(o) Joint and Several Liability . . . . . . . . . . . . . 21
(p) Financial Reports . . . . . . . . . . . . . . . . . . 21
(q) Landlord's Fees . . . . . . . . . . . . . . . . . . . 21
(r) Intentionally Omitted . . . . . . . . . . . . . . . . 21
(s) Confidentiality . . . . . . . . . . . . . . . . . . . 21
(t) List of Exhibits. . . . . . . . . . . . . . . . . . . 22
25 Other Provisions . . . . . . . . . . . . . . . . . . . . 22
26 Environmental Laws . . . . . . . . . . . . . . . . . . . 22
27 Signs. . . . . . . . . . . . . . . . . . . . . . . . . . 25
LIST OF DEFINED TERMS
Defined Term Page
Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . .3
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . .110
AS-IS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .G-1
Balance of Suite 500 . . . . . . . . . . . . . . . . . . . . . .1
Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Commencement Date. . . . . . . . . . . . . . . . . . . . . . . .1
Construction Allowance . . . . . . . . . . . . . . . . . . . .C-2
Damage Notice. . . . . . . . . . . . . . . . . . . . . . . . . 14
Determination Notice . . . . . . . . . . . . . . . . . . . . .F-1
Event of Default . . . . . . . . . . . . . . . . . . . . . . . 15
Exercise Date. . . . . . . . . . . . . . . . . . . . . . . . .F-1
Initial Portion of Premises. . . . . . . . . . . . . . . . . . .1
Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Landlord's Mortgagee . . . . . . . . . . . . . . . . . . . . . 12
Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . .5
Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Market Value Rent. . . . . . . . . . . . . . . . . . . . . . .F-1
Offer Notice . . . . . . . . . . . . . . . . . . . . . . . . .G-1
Offer Space. . . . . . . . . . . . . . . . . . . . . . . . . .G-1
Operating Costs. . . . . . . . . . . . . . . . . . . . . . . . .3
Operating Costs and Tax Statement. . . . . . . . . . . . . . . .5
Parking Area . . . . . . . . . . . . . . . . . . . . . . . . .D-1
Permitted Use. . . . . . . . . . . . . . . . . . . . . . . . . .8
Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Renewal Option(s). . . . . . . . . . . . . . . . . . . . . . .F-1
Renewal Term(s). . . . . . . . . . . . . . . . . . . . . . . .F-1
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Security Deposit . . . . . . . . . . . . . . . . . . . . . . . .5
Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Tenant Delay Date. . . . . . . . . . . . . . . . . . . . . . .C-3
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . .C-1
Working Drawings . . . . . . . . . . . . . . . . . . . . . . .C-1
LEASE
THIS LEASE AGREEMENT (this "Lease") is dated March 13, 1997, between WHC-SIX
REAL ESTATE L.P., a Delaware limited partnership ("Landlord"), and PALATIN
TECHNOLOGIES, INC., a Delaware corporation, (Tenant").
1. Lease Grant. Subject to the terms of this Lease, Landlord initially
leases to Tenant, and Tenant initially leases from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇ (the
"Premises") in the office building (the "Building") located at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇. Landlord and Tenant acknowledge that initially Tenant shall
be occupying only a 9,000 square foot portion ("Initial Portion of Premises") of
the Premises, notwithstanding that certain Tenant improvements shall be
constructed by Tenant for the 1,538 square foot balance of ▇▇▇▇▇ ▇▇▇ ("▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇") simultaneously with the construction of Tenant improvements for
the Initial Portion of Premises. The land on which the Building is located and
the Premises are described on Exhibits A. The term "Building" includes the
related land, driveways, parking facilities, and similar improvements, but for
purposes of Operating Expenses (Operating Cost and Taxes) shall be deemed to
mean the two (2) Buildings within the office complex and the related land
(described on Exhibit A), driveways, parking facilities, and similar
improvements.
2. Term.
(a) The term of this Lease shall be ten (10) years commencing the earlier of
(i) ninety-seven (97) days following the date that the existing tenant in the
Premises vacates the Premises or (ii) the date a temporary or permanent
certificate of occupancy is issued for the Initial Portion of Premises, (the
"Commencement Date") and expiring at 5:00 p.m., ten (10) years following the
Commencement Date (the "Term", which definition shall, upon Tenant's timely and
other proper exercise of the Renewal Option(s) (as hereinafter defined), also
include all renewals of the initial Term). If the Commencement Date is not the
first day of a calendar month, then the Term shall be extended for the number of
days between the Commencement Date and the first day of the following month.
Notwithstanding the foregoing, the ninety-seven (97) day period shall be
extended by the number of days in excess of five (5) business days, if any, that
Landlord takes to respond to Tenant's request for approval of the working
drawings submitted to Landlord by Tenant in accordance with Exhibit C (i.e., if
Landlord takes 8 days [of which the first 5 days are business days] to respond
to Tenant, the 97 day period is extended by 3 days).
(b) Once the Commencement Date is ascertained, Landlord and Tenant shall
each execute a notice of the Commencement Date, and thenceforth the date set
forth in the notice shall be conclusively presumed to be the Commencement Date.
(c) In the event the existing tenant in the Premises has not vacated the
Premises prior to June 15, 1997, Tenant can terminate this Lease upon written
notice to Landlord prior to June 20, 1997, whereupon any Rent paid to Landlord
(including, but not limited to, the Security Deposit) shall be returned to
Tenant and neither party shall have any further rights or obligations towards
the other.
(d) Landlord shall not be in default hereunder nor liable for damages for
any delay to, or extension of, the Commencement Date.
3. Rent
(a) (i) Basic Rent. "Basic Rent" (herein so called) shall be the following
amounts for the following periods of time, subject to the increase in Basic Rent
as determined in subparagraph 3(a)(ii), which shall in no event affect the rent
schedule from and after the twenty-fifth (25th) month:
Time Period Anual Rent Monthly Basic Rent
---------------- ----------- ------------------
Months 1-12 $115,690.00 $ 9,640.83
13-24 118,766.00 9,897.17
25-36 126,456.00 10,538.00
37-60 158,070.00 13,172.50
▇▇-▇▇▇ ▇▇▇,222.00 16,685.17
(ii) As of the earlier of (a) two (2) years following the Commencement Date
or (b) the date Tenant utilizes or occupies the Balance of Suite 500 in its
regular course of business ("Total Occupancy Date") and up to the commencement
of the 25th month of the Term (pro rated for any partial month), the Basic Rent
for the Premises shall be increased from and after the Total Occupancy Date to
the rate of $126,456.00 per annum, payable in consecutive monthly payments of
$10,538.00.
(b) Payment. Tenant shall timely pay to Landlord Basic Rent and all
additional sums to be paid by Tenant to Landlord under this Lease (collectively,
the "Rent") without deduction or set off (except as may be otherwise
specifically set forth in this Lease), at Landlord's notice address provided for
in this Lease or as otherwise specified by Landlord. Basic Rent, adjusted as
herein provided, shall be payable monthly in advance, and shall be accompanied
by all applicable state and local sales or use taxes, if any. The monthly
installment for the first month of Basic Rent shall be payable contemporaneously
with the execution of this Lease; thereafter, Basic Rent shall be payable on the
first day of each month of the Term beginning on the first day of the second
full calendar month of the Term. The monthly Basic Rent for any partial month at
the beginning or expiration of the Term shall equal the product of 1/365 of the
annual Basic Rent in effect during the partial month and the number of days in
the partial month.
2
(c) Operating Expenses.
(1) Tenant shall pay an amount ("Additional Rent") equal to its
proportionate share of Operating Costs. Landlord may collect such amount
annually in arrears in a lump sum, which shall be due within 30 days after
Landlord furnishes to Tenant the Operating Costs and Tax Statement (defined
below). Alternatively, Landlord may make a good faith estimate of the
Additional Rent to be due by Tenant for any calendar year or part thereof by
thirty (30) days prior notice to Tenant during the Term, and Tenant shall pay
to Landlord, on the Commencement Date and on the first day of each calendar
month thereafter, an amount equal to the estimated Additional Rent for such
calendar year or part thereof divided by the number of months therein. From
time to time, Landlord may estimate and re-estimate in good faith the
Additional Rent to be due by Tenant and deliver a copy of the estimate or
re-estimate to Tenant. Thereafter, the monthly installments of Additional
Rent payable by Tenant shall be appropriately adjusted in accordance with the
estimations so that, by the end of the calendar year in question, Tenant
shall have paid all of the Additional Rent as estimated by Landlord. Any
amounts paid based on such an estimate shall be subject to adjustment as
herein provided when actual Operating Costs are available for each calendar
year.
(2) The term "Operating Costs" shall mean all expenses and disbursements
(subject to the limitations set forth below) that Landlord incurs in
connection with the ownership, operation, and maintenance of the Building,
determined in accordance with sound accounting principles consistently
applied, including, but not limited to, the following costs: (A) wages and
salaries (including management fees) of all employees engaged in the
operation, maintenance, and security of the Building, including taxes,
insurance and benefits relating thereto; (B) all supplies and materials used
in the operation, maintenance, repair, replacement, and security of the
Building; (C) costs for improvements made to the Building which, although
capital in nature, are expected to reduce the normal operating costs of the
Building, as well as capital improvements made in order to comply with any
law hereafter promulgated by any governmental authority, as amortized over
the useful economic life of such improvements as determined by Landlord in
its reasonable discretion; (D) cost of all utilities, except the cost of
utilities reimbursable to Landlord by the Building's tenants other than
pursuant to a provision similar to this Section 3.(c; (E) insurance expenses;
(F) repairs, replacements, and general maintenance of the Building; and (G)
service or maintenance contracts with independent contractors for the
operation, maintenance, repair, replacement, or security of the Building
(including, without limitation, alarm service, window cleaning, and elevator
maintenance).
The following shall not be deemed Operating Costs: (i) capital
improvements made to the Building, other than capital improvements
described in Section 3(c)(2)(C) and except for items which are
generally considered maintenance
3
and repair items, such as painting of common areas, replacement of
carpet in elevator lobbies, and the like; (ii) repair, replacements
and general maintenance paid by proceeds of insurance or by Tenant
or other third parties; (iii) interest, amortization or other
payments on loans to Landlord; (iv) depreciation; (v) leasing
commissions; (vi) legal expenses for services, other than those
that benefit the Building tenants generally (e.g., tax disputes);
(vii) renovating or otherwise improving space for occupants of the
Building or vacant space in the Building; (viii) Taxes (defined
below), (ix) federal income taxes imposed on or measured by the
income of Landlord from the operation of the Building; (x)
expenditures for repairs, replacements or rebuilding occasioned by
fire or other casualty to the Building; (xi) expenditures for
repairs, replacements or rebuilding occasioned by any of the events
contemplated by Section 13 of this Lease; (xii) expenditures for
costs, including advertising and promotional expenses, incurred in
connection with efforts to lease portions of the Building and to
procure new tenants for the Building; (xiii) expenditures for the
salaries, benefits and other compensation of the employees and
other personnel of the Landlord or any managing agent who are not
contemplated by subsection 3(c)(2)(A); (xiv) expenditures to an
affiliate of the Landlord to the extent any such expenditure
exceeds the amount that would have been payable in the absence of
such affiliate relationship; (xv) expenditures for installing,
operating and maintaining any special facility in or on the
Building such as an observatory, broadcasting facility, cafeteria
or dining facility or athletic, recreational or luncheon club if
the respective facility shall not be available to the Tenant or any
of its employees; (xvi) expenditures for what would otherwise be an
Operating Cost which are reimbursed under any construction
contractors' or manufacturers' or vendors' warranties or which are
otherwise reimbursed to the Landlord; and (xvii) Operating Costs to
the extent that the sum of (a) the Tenant's proportionate share of
Operating Costs and (b) the proportionate shares of Operating Costs
of tenants of other leased premises in the Building exceeds 100% of
Operating Costs.
(3) Tenant shall also pay a proportionate share of the Taxes for each year
and partial year falling within the Term, which shall be determined by
multiplying the aggregate Taxes by a fraction, the numerator of which is the
number of rentable square feet in the Premises and the denominator of which
is the number of rentable square feet in the Building. Tenant shall pay its
proportionate share of Taxes in the same manner as provided above for
Additional Rent with regard to Operating Costs. "Taxes" shall mean taxes,
assessments, and governmental charges whether federal, state, county or
municipal, and whether they be by taxing districts or authorities presently
taxing or by others, subsequently created or otherwise, and any other taxes
and assessments
4
attributable to the Building (or its operation), excluding, however,
penalties and interest thereon and federal and state taxes on income (if the
present method of taxation changes so that in lieu of the whole or any part
of any Taxes, there is levied on Landlord a capital tax directly on the rents
received therefrom or a franchise tax, assessment, or charge based, in whole
or in part, upon such rents for the Building, then all such taxes,
assessments, or charges, or the part thereof so based, shall be deemed to be
included within the term "Taxes" for purposes hereof);
(4) By April 1 of each calendar year, or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of Operating Costs for the
previous year and of the Taxes for the previous year (the "Operating Costs
and Tax Statement"). If the Operating Costs and Tax Statement reveals that
Tenant paid more for Operating Costs than the actual amount for the year for
which such statement was prepared, or more than its actual share of Taxes for
such year, then Landlord shall promptly credit or reimburse Tenant for such
excess; likewise, if Tenant paid less than the actual Additional Rent or
share of Taxes due, then Tenant shall promptly pay Landlord such deficiency.
(5) Initially, for the purposes of calculating pro-rata Operating Costs and
Taxes in this Section 3, the parties stipulate that the area of the Premises
is 9,000 rentable square feet and the area of the Building is 105,382
rentable square feet. As of the Total Occupancy Date, the area of the
Premises shall be deemed to be 10,538 rentable square feet.
4. Delinquent Payment; Handling Charges. All past due payments required of
Tenant hereunder shall bear interest from the date due until paid at the Wall
Street Journal, Eastern Edition, published prime rate plus 2%; alternatively,
Landlord may charge Tenant a fee equal to 5% of the delinquent payment to
reimburse Landlord for its cost and inconvenience incurred as a consequence of
Tenant's delinquency. In no event, however, shall the charges permitted under
this Section 4 or elsewhere in this Lease, to the extent they are considered to
be interest under law, exceed the maximum lawful rate of interest.
5. Security Deposit. Upon execution of this Lease, in lieu of a security
deposit in immediately available funds, Tenant shall deposit with the Landlord a
one hundred eighty-five thousand dollars and 00/100 ($185,000.00) irrevocable
unconditional standby letter of credit ("Letter of Credit") in the form attached
hereto as Exhibit H (subject to the right of the issuer to make non-substantive
changes thereto) as a security deposit ("Security Deposit") for the full and
faithful performance of Tenant's obligations in this Lease in favor of Landlord
as beneficiary drawn on a financial institution acceptable to Landlord and with
such other terms and conditions reasonably acceptable to Landlord requiring the
issuer to pay the sum of One Hundred Eighty-Five Thousand and 00/100
($185,000.00) Dollars (or such reduced amount limited as hereinafter permitted)
to Landlord upon presentation to the issuer of the letter of credit and a letter
on Landlord's letterhead stating that an Event of Default by Tenant has occurred
under this Lease and such other customary and reasonable requirements of the
issuer but without requiring further evidence of default. The Letter of Credit
shall be for a minimum of one (1) year
5
maturity and renewed on an annual basis (except as hereinafter permitted to be
reduced and/or terminated) during the Term, as the same may be extended and,
provided an Event of Default by Tenant has not occurred under this Lease, Tenant
may reduce the amount of the Letter of Credit by $74,000.00 at the expiration of
twenty-four (24) months from the Commencement Date and by additional amounts of
$37,000.00 at the expiration of thirty-six (36), forty-eight (48) and sixty (60)
months from the Commencement Date, such that no Security Deposit shall remain
from and after the expiration of the fifth (5th) lease year. Failure to renew
the Letter of Credit (unless expressly permitted to the contrary herein) at
least thirty (30) days prior to the expiration of any lease year shall be deemed
a material Event of Default under this Lease entitling Landlord to draw upon the
Letter of Credit and retain the amount so drawn as a Security Deposit. In the
event of any dispute between Landlord and Tenant with respect to an Event of
Default and the Letter of Credit is drawn upon, the funds so received shall be
held by Landlord in a segregated interest-bearing account (interest to follow
the principal) pending resolution of the dispute. The Security Deposit is not an
advance payment of Rent or a measure or limit of Landlord's damages upon an
Event of Default (defined in Section 16). Landlord may, from time to time and
without prejudice to any other remedy, use all or a part of the Security Deposit
to perform any obligation Tenant fails to perform hereunder. The portion of the
Letter of Credit proceeds received by Landlord and not utilized to cure a
default shall be deemed a Cash Security Deposit. Following any such application
of the Security Deposit, Tenant shall deposit with Landlord in cash on demand
the amount so applied in order to restore the Security Deposit to its original
amount. Provided that Tenant has performed all of its obligations hereunder,
Landlord shall, within the earlier of (i) the expiration of the fifth (5th)
lease year, or (ii) 30 days after the Term ends, return to Tenant the portion of
the Security Deposit which was not applied to satisfy Tenant's obligations. The
Security Deposit, letter of credit proceeds or other cash payment may be
commingled with other funds, and no interest (other than in the event of a
dispute as provided in this Article) shall be paid thereon. If Landlord
transfers its interest in the Premises and the transferee assumes Landlord's
obligations under this Lease in writing, then Landlord shall assign any cash
portion of the Security Deposit to the transferee and Tenant shall issue a
substitute Letter of Credit to the transferee simultaneously with the
cancellation of the existing Letter of Credit with all transfer costs associated
therewith being borne by Tenant and Landlord thereafter shall have no further
liability for the return of the Security Deposit. A copy of the assumption
agreement shall be provided to Tenant in writing.
6. Landlord's Obligations
(a) Services. Landlord shall furnish to Tenant (1) water at those points of
supply provided for general use of tenants of the Building; (2) heated and
refrigerated air conditioning as appropriate, at such temperatures and in such
amounts as are standard for comparable buildings in the vicinity of the
Building; (3) electrical current at all times for equipment that does not
require more than 220 volts and whose electrical energy consumption does not
exceed normal combined office and laboratory usage; (4) a dumpster located at
the Building for office garbage and trash and a hauling service to empty same;
(5) sewage disposal for the Building; (6) snow and ice clearance from, and
sweeping of, the Parking Area and access roads and walks relating to the
Building; (7) such maintenance and repair of the Building and its electrical,
6
plumbing, HVAC, safety and other mechanical systems and other improvements at
the Building as is customarily provided for comparable office and laboratory
buildings within a 10-mile radius from the Building; and (8) all those items
which are contemplated as Operating Costs under section 3(c)(2) of this Lease.
Landlord shall maintain the common areas of the Building in reasonably good
order and condition, except for damage caused by Tenant, or its employees,
agents or invitees. Tenant shall pay, as Additional Rent, the total electricity,
water and gas charges for the Premises at the supplying utility's rates therefor
as determined pursuant to separate submeters for the Premises. Tenant shall pay
for all light bulbs (including exit sign light bulbs) and ballasts in the
Premises.
(b) Excess Utility Use. Landlord shall not be required to furnish electrical
current for equipment that requires more than 220 volts or other equipment whose
electrical energy consumption exceeds normal office and laboratory usage. If
Tenant's requirements for or consumption of electricity exceed the electricity
to be provided by Landlord as described in Section 6(a), Landlord shall, at
Tenant's expense, make reasonable efforts to supply such service through the
then-existing feeders and risers serving the Building and the Premises, and
Tenant shall pay to Landlord the cost of such service within ten days after
Landlord has delivered to Tenant an invoice therefor. Landlord may determine the
amount of such additional consumption and potential consumption by any
verifiable method, including installation of a separate meter in the Premises
installed, maintained, and read by Landlord, at Tenant's expense. Tenant shall
not install any electrical equipment requiring special wiring or requiring
voltage in excess of 220 volts or otherwise exceeding Building capacity unless
approved in advance by Landlord. The use of electricity in the Premises shall
not exceed the capacity of existing feeders and risers to or wiring in the
Premises. Notwithstanding any provisions in this Lease to the contrary, any
risers or wiring required to meet Tenant's excess electrical requirements shall,
upon Tenant's written request, be installed by Landlord, at Tenant's cost, if,
in Landlord's judgment, the same are necessary and shall not cause permanent
damage to the Building or the Premises, cause or create a dangerous or hazardous
condition, entail excessive or unreasonable alterations, repairs, or expenses,
or interfere with or disturb other tenants of the Building. If Tenant uses
machines or equipment in the Premises which materially adversely affects the
temperature otherwise maintained by the air conditioning system or otherwise
overload any utility, Landlord, after consulting with Tenant for the purpose of
cooperation to develop a reasonable solution, may install supplemental air
conditioning units or other supplemental equipment in the Premises designed to
remedy the adverse effect or overload, and the cost thereof, including the cost
of installation, operation, use, and maintenance, shall be paid by Tenant to
Landlord within ten days after Landlord has delivered to Tenant an invoice
therefor. Tenant acknowledges that, currently, current for 110 volts is supplied
to the Premises and that all costs associated in supplying the 220 volts
required by Tenant shall be borne by Tenant.
(c) Restoration of Services; Abatement. Landlord shall use reasonable
efforts to restore any service required of it that becomes unavailable; however,
such unavailability shall not render Landlord liable for any damages caused
thereby, be a constructive eviction of Tenant, constitute a breach of any
implied warranty, or, except as provided in the next sentence,
7
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for more than 15 consecutive
business days because of the unavailability of any such services referred to in
Section 6(a)(1)-(7) or Tenant is denied access to the Building as a result of
acts within Landlord's control for more than fifteen (15) consecutive business
days, then Tenant shall, as its exclusive remedy be entitled to a reasonable
abatement of Rent for each consecutive day (after such 15-day period) that
Tenant is so prevented from using the Premises. In no event, however, shall the
abatement apply to Section 6(a)(8) items.
7. Improvements; Alterations; Repairs; Maintenance.
(a) Improvements; Alterations. Improvements to the Premises shall be
installed at Tenant's expense only in accordance with plans and specifications
which have been previously submitted to and approved in writing by Landlord. No
alterations or physical additions in or to the Premises may be made without
Landlord's prior written consent, which shall not be unreasonably withheld,
delayed or conditioned; however, Landlord may withhold its consent to any
alteration or addition that would adversely affect the Building's structure or
adversely affect its HVAC, plumbing, electrical, or mechanical systems. Tenant
shall not paint or install lighting or decorations, signs, window or door
lettering, or advertising media of any type on or about the Premises without the
prior written consent of Landlord, which shall not be unreasonably withheld,
delayed or conditioned; however, Landlord may withhold its consent to any such
painting or installation which would affect the appearance of the exterior of
the Building or of any common areas of the Building. All alterations, additions,
or improvements made in or upon the Premises shall, at Landlord's option, either
be removed by Tenant prior to the end of the Term (and Tenant shall repair all
damage caused thereby), or shall remain on the Premises at the end of the Term
without compensation to Tenant. Whenever Tenant applies to Landlord for consent
to a proposed alteration, addition or improvement that includes items in the
nature of fixtures to real property, in connection with any consent that
Landlord might give, Landlord shall advise Tenant by notice whether Landlord
will require Tenant to remove or to leave behind such items upon expiration of
the Term. All alterations, additions, and improvements shall be constructed,
maintained, and used by Tenant, at its risk and expense, in accordance with all
applicable laws; Landlord's approval of the plans and specifications therefor
shall not be a representation by Landlord that such alterations, additions, or
improvements comply with any law.
(b) Repairs; Maintenance. Tenant shall maintain the Premises in a clean,
safe, and operable condition, and shall not permit or allow to remain any waste
or damage to any portion of the Premises. Subject to the provisions of Section
14, Tenant shall repair or replace, subject to Landlord's direction and
supervision, any damage to the Building caused by Tenant, Tenant's transferees,
or their respective agents, contractors, or invitees. If Tenant fails to make
such repairs or replacements within 30 days after the occurrence of such damage,
then Landlord may make the same at Tenant's cost. If any such damage occurs
outside of the Premises, then Landlord may elect to repair such damage at
Tenant's expense, rather than having Tenant repair such damage. The cost of all
repair or replacement work performed by Landlord under this
8
Section 7 shall be paid by Tenant to Landlord within ten days after Landlord has
invoiced Tenant therefor.
(c) Performance of Work. All work described in this Section 7 shall be
performed only by Landlord or by contractors and subcontractors approved in
writing by Landlord. Tenant shall cause all of its contractors and
subcontractors to procure and maintain insurance coverage naming Landlord as an
additional insured against such risks, in such amounts, and with such companies
as Landlord may reasonably require. All such work shall be performed in
accordance with all legal requirements and in a good and workmanlike manner so
as not to damage the Premises, the Building, or the components thereof.
(d) Construction Liens. Tenant shall not permit any construction liens to be
filed against the Premises or the Building for any work performed, materials
furnished, or obligation incurred by or at the request of Tenant by a contractor
under contract to Tenant or its subcontractors or suppliers of materials to the
contractor or subcontractor. If such a lien is filed pursuant to work contracted
by Tenant, then Tenant shall, within ten days after Landlord has delivered
notice of the filing thereof to Tenant, either pay the amount of the lien or
diligently contest such lien and deliver to Landlord or to the Clerk of the
Court with jurisdiction a bond or other security reasonably satisfactory to
Landlord or in compliance with the requirements of the construction lien law in
order to have such construction lien released or bonded. If Tenant fails to
timely take either such action, then Landlord may pay the lien claim, and any
amounts so paid, including expenses and interest, shall be paid by Tenant to
Landlord within ten days after Landlord has invoiced Tenant therefor.
(e) To the extent Exhibit C of this Lease may be inconsistent with any
requirement of this Section 7 of the Lease regarding the Work contemplated by
Exhibit C, the provisions of Exhibit C shall control.
8. Use. Tenant shall continuously occupy and use the Premises only for
general office and laboratory use (the " Permitted Use") and shall comply with
all laws, orders, rules, and regulations relating to the use, condition, access
to, and occupancy of the Premises (including, but not limited to, the storage,
handling and experimentation of animals). Tenant acknowledges that the research
on animals shall be limited to rodents and that there shall be (a) no breeding
of animals, nor (b) housing of animals in excess of twenty-four (24) hours at
the Premises. Tenant shall not permit the Premises, or any part thereof to be
used in any manner which would in any way discharge objectionable fumes, vapors
or odors into the Building's air conditioning system or flues or vents not
designated to receive them. The Premises shall not be used for any use which is
disreputable, creates extraordinary fire hazards, or results in an increased
rate of insurance on the Building or its contents, or for the storage of any
hazardous materials or substances, which hazardous materials or substances are
not lawfully utilized in connection with Tenant's Permitted Use. If, because of
Tenant's acts, the rate of insurance on the Building or its contents increases,
then such acts shall be an Event of Default, Tenant shall pay to Landlord the
amount of such increase on demand, and acceptance of such payment shall not
waive any of Landlord's other rights. Tenant shall conduct
9
its business and control its agents, employees, and invitees in such a manner as
not to create any nuisance or unreasonably interfere with other tenants or
Landlord in its management of the Building.
9. Assignment and Subletting
(a) Transfers; Consent. Tenant shall not, without the prior written consent
of Landlord, (1) assign, transfer, or encumber this Lease or any estate or
interest herein, whether directly or by operation of law (except an assignment
to an Affiliate (as hereinafter defined) of Tenant), (2) if Tenant is an entity
other than a corporation whose stock is publicly traded, permit any other entity
to become Tenant hereunder by merger, consolidation, or other reorganization,
(3) if Tenant is an entity other than a corporation whose stock is publicly
traded, permit the transfer of an ownership interest in Tenant so as to result
in a change in the current control of Tenant, (4) sublet any portion of the
Premises (except to an Affiliate of Tenant), (5) grant any license, concession,
or other right of occupancy of any portion of the Premises (except to an
Affiliate of Tenant), or (6) permit the use of the Premises by any parties other
than Tenant or an Affiliate of Tenant (any of the events listed in Section
9.(a)(1) through 9.(a)(6) being a "Transfer"). If Tenant requests Landlord's
consent to a Transfer, then Tenant shall provide Landlord with a written
description of all terms and conditions of the proposed Transfer, copies of the
proposed documentation, and the following information about the proposed
transferee: name and address; reasonably satisfactory information about its
business and business history; its proposed use of the Premises; banking,
financial, and other credit information; and general references sufficient to
enable Landlord to determine the proposed transferee's credit worthiness and
character. Landlord shall not unreasonably withhold, delay or condition its
consent to any assignment or subletting of the Premises, provided that the
proposed transferee (A) is credit worthy, (B) has a good reputation in the
business community, and (C) is not another occupant of the Building if the
Landlord then has space available in the Building that meets the other
occupant's requirements for additional space; otherwise, Landlord may withhold
its consent in its sole discretion by notice to Tenant. Concurrently with
Tenant's notice of any request for consent to a Transfer, Tenant shall pay to
Landlord a fee of $500.00 to defray Landlord's expenses in reviewing such
request, and Tenant shall also reimburse Landlord immediately upon request for
its reasonable attorneys' fees, if any, incurred in connection with considering
and/or performing any legal services regarding any request for consent to a
Transfer. If Landlord consents to a proposed Transfer, then the proposed
transferee shall deliver to Landlord a written agreement whereby it expressly
assumes the Tenant's obligations hereunder; however, any transferee of less than
all of the space in the Premises shall be liable only for obligations under this
Lease that are properly allocable to the space subject to the Transfer for the
period of the Transfer. Landlord's consent to a Transfer shall not release
Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default contemplated by Subsection 16(a) of this Lease occurs
while the Premises or any part thereof are subject to a
10
Transfer, then Landlord, in addition to its other remedies, may collect directly
from such transferee all rents becoming due to Tenant and apply such rents
against Rent. Tenant authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so.
(b) Cancellation. Landlord may by notice to Tenant, within 30 days after
submission of Tenant's written request for Landlord's consent to an assignment
or subletting, cancel this Lease (unless Tenant withdraws its request to
Landlord in writing and within two (2) business days of its receipt of
Landlord's notice) as to the portion of the Premises proposed to be sublet or
assigned as of the date the proposed Transfer is to be effective. If Landlord
cancels this Lease as to any portion of the Premises, then this Lease shall
cease for such portion of the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the portion of the Premises
covered by the proposed Transfer. Thereafter, Landlord may lease such portion of
the Premises to the prospective transferee (or to any other person) in
compliance with all applicable building, fire and use codes without liability to
Tenant.
(c) Additional Compensation. Tenant shall pay to Landlord, immediately upon
receipt thereof, fifty percent (50%) of the excess of (1) all compensation
received by Tenant for a Transfer less the costs reasonably incurred by Tenant
with unaffiliated third parties in connection with such Transfer (i.e.,
brokerage commissions, tenant finish work, and the like) over (2) the Rent
allocable to the portion of the Premises covered thereby.
(d) The term "Affiliate" shall mean any person or entity, directly or
indirectly, controlling, controlled by, or under common control
with Tenant.
10. Insurance; Waivers; Subrogation; Indemnity
(a) Insurance. Tenant shall maintain throughout the Term the following
insurance policies: (1) comprehensive general liability insurance in amounts of
not less than a combined single limit of $2,000,000 or such other amounts as
Landlord may from time to time reasonably require as is customary for buildings
of similar size, use and nature, insuring Tenant, Landlord, Landlord's agents
and their respective affiliates against all liability for injury to or death of
a person or persons or damage to property arising from the use and occupancy of
the Premises, (2) insurance covering the full value of Tenant's property and
improvements, and other property (including property of others) in the Premises,
(3) contractual liability insurance sufficient to cover Tenant's indemnity
obligations hereunder, and (4) worker's compensation insurance, containing a
waiver of subrogation endorsement acceptable to Landlord. Tenant's insurance
shall provide primary coverage to Landlord when any policy issued to Landlord
provides duplicate or similar coverage, and in such circumstance Landlord's
policy will be excess over Tenant's policy. Tenant shall furnish to Landlord
certificates of such insurance and such other evidence satisfactory to Landlord
of the maintenance of all insurance coverages required hereunder, and Tenant
shall obtain a written obligation on the part of each insurance company to
notify Landlord at least 30 days before cancellation or a material change of any
such insurance policies. All such insurance policies shall be in form, and
issued by companies, reasonably
11
satisfactory to Landlord. The term "affiliate" shall mean any person or entity,
directly or indirectly, controlling, controlled by, or under common control with
the party in question.
(b) Waiver of Negligence; No Subrogation. Landlord and Tenant each waives
any claim it might have against the other for any injury to or death of any
person or persons or damage to or theft, destruction, loss, or loss of use of
any property (a " Loss"), to the extent the same is insured against under any
insurance policy that covers the Building, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or, in the
case of Tenant's waiver, is required to be insured against under the terms
hereof, regardless of whether the negligence of the other party caused such
loss; however, Landlord's waiver shall not include any deductible amounts on
insurance policies carried by Landlord not to exceed $10,000 on any policy. Each
party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation or otherwise against
the other party.
(c) Indemnity. Subject to Section 10.(b), Tenant shall defend, indemnify,
and hold harmless Landlord and its representatives and agents from and against
all claims, demands, liabilities, causes of action, suits, judgments, damages,
and expenses (including attorneys' fees) arising from (i) any Loss arising from
any occurrence on the Premises or (ii) Tenant's failure to perform its
obligations under this Lease. This indemnity provision shall exclude the acts
and/or omissions of Landlord, its agents, employees and contractors, and shall
survive termination or expiration of this Lease. If any proceeding is filed for
which indemnity is required hereunder, Tenant agrees, upon request therefor, to
defend the indemnified party in such proceeding at its sole cost utilizing
counsel satisfactory to the indemnified party.
11. Subordination Attornment; Notice to Landlord's Mortgagee
(a) Subordination. Provided the Subordination, Non-Disturbance and
Attornment Agreements and recognition agreements are delivered to Tenant for
execution in the forms as required in this subparagraph, within five (5)
business days of receipt of same, Tenant agrees to execute, acknowledge and
deliver same to Landlord and/or any other party directed by Landlord for
execution by all required parties and upon receipt by Tenant of a fully executed
duplicate original of said document(s), this Lease shall be subordinate to the
deed of trust, mortgage, or other security instrument, or any ground lease,
master lease, or primary lease, referred to in the applicable Subordination,
Non-Disturbance and Attornment Agreement and/or recognition agreement so
executed and delivered (the mortgagee under any such mortgage or the lessor
under any such lease is referred to herein as a "Landlord's Mortgagee"). With
respect to the existing mortgagee, Tenant shall execute and deliver the
Subordination, Non-Disturbance and Attornment Agreement and Estoppel Certificate
annexed hereto as Exhibit E. Landlord agrees to obtain for the benefit of Tenant
a Subordination, Non-Disturbance and Attornment Agreement from future
mortgagees, on forms substantially as set forth in Exhibit E (which form must
provide the same benefits to all parties as provided for in Exhibit E) which
Tenant agrees to execute. Landlord shall obtain
12
recognition agreements for the benefit of Tenant, which Tenant agrees to
execute, with respect to any ground lease, master lease or primary lease on
forms reasonably acceptable to Landlord, Tenant and the applicable lessor which
Tenant agrees to execute. Any Landlord's Mortgagee may elect, at any time,
unilaterally, to make this Lease superior to its mortgage, ground lease, or
other interest in the Premises by so notifying Tenant in writing.
(b) In the event that Landlord submits to Tenant a Subordination,
Non-Disturbance and Attornment Agreement and/or recognition agreement, as
applicable, complying with the provisions of subparagraph (a) and Tenant fails
to execute, acknowledge and deliver same within five (5) business days of
receipt thereof, then subject to mortgagee's election rights provided in the
last sentence of subparagraph (a), this Lease shall be subordinate to the deed
of trust, mortgage, or other security instrument, or any ground lease, master
lease, or primary lease referred to in the Subordination, Non-Disturbance and
Attornment Agreement and/or recognition agreement delivered to Tenant without
further action on the part of any party.
(c) Attornment. Tenant shall attorn to any party succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements confirming such attornment as
such party may reasonably request.
(d) Notice to Landlord's Mortgagee. Tenant shall not seek to enforce any
remedy it may have for any default on the part of the Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
12. Rules and Regulations. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit B. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes are applicable to all tenants of the Building and will not unreasonably
interfere with Tenant's use of the Premises and are not inconsistent with the
other provisions of this Lease. Tenant shall be responsible for the compliance
with such rules and regulations by its employees, agents, and invitees.
13. Condemnation.
(a) Total Taking. If the entire Building or Premises are taken by right of
eminent domain or conveyed in lieu thereof (a "Taking"), this Lease shall
terminate as of the date of the Taking.
13
(b) Partial Taking - Tenant's Rights. If any part of the Building becomes
subject to a Taking and such Taking will prevent Tenant from conducting its
business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than 90 days, then Tenant
may terminate this Lease as of the date of such Taking by giving written notice
to Landlord within 30 days after the Taking, and Rent shall be apportioned as of
the date of such Taking. If Tenant does not terminate this Lease, then Rent
shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.
(c) Partial Taking - Landlord's Rights. If any material portion, but less
than all, of the Building becomes subject to a Taking, or if Landlord is
required to pay any of the proceeds received for a Taking to a Landlord's
Mortgagee, then Landlord may terminate this Lease by delivering written notice
thereof to Tenant within 30 days after such Taking, and Rent shall be
apportioned as of the date of such Taking. If Landlord does not so terminate
this Lease, then this Lease will continue, but if any portion of the Premises
has been taken, Rent shall ▇▇▇▇▇ as provided in the last sentence of Section
13.(b).
(d) Award. If any Taking occurs, then Landlord shall receive the entire
award or other compensation for the land on which the Building is situated, the
Building, and other improvements taken, and Tenant may separately pursue a claim
(to the extent it will not reduce Landlord's award) against the condemnor for
the value of Tenant's personal property which Tenant is entitled to remove under
this Lease, moving costs, loss of business, and other claims it may have.
14. Fire or Other Casualty
(a) Repair Estimate. If the Premises or the Building are damaged by fire or
other casualty (a "Casualty"), Landlord shall, within 45 days after such
Casualty, deliver to Tenant a good faith estimate (the "Damage Notice") of the
time needed to repair the damage caused by such Casualty.
(b) Landlord's and Tenant's Rights. If a 50% or greater portion of the
Premises or a material portion of the Building is damaged by Casualty such that
Tenant is prevented from conducting its business in the Premises in a manner
reasonably comparable to that conducted immediately before such Casualty and
Landlord estimates that the damage caused thereby cannot be repaired within 120
days after the Casualty or in the event Landlord commences repairs as
hereinafter set forth and does not substantially complete same within 180 days
from the Casualty, then Tenant may terminate this Lease by delivering written
notice to Landlord of its election to terminate within 30 days after the Damage
Notice has been delivered to Tenant. If Tenant does not so timely terminate this
Lease, then (subject to Sections 14.(c) and (d)) Landlord shall repair the
Building or the Premises, as the case may be, as provided below, and Rent for
the portion of the Premises rendered untenantable by the damage shall be abated
from the date of damage until the earlier of (i) four (4) months from the date
of the shell of the Premises being completed by Landlord and electric brought to
the Premises by Landlord; or (ii) the date a
14
Certificate of Occupancy is issued with respect to the Premises after Landlord's
and Tenant's repairs have been completed (or the repair is completed and Tenant
is permitted to occupy the Premises if no Certificate of Occupancy is required).
(c) Landlord's Rights. If a Casualty damages a material portion of the
Building, and Landlord makes a good faith determination that restoring the
Premises would be uneconomical, then Landlord may terminate this Lease by giving
written notice of its election to terminate within 30 days after the Damage
Notice has been delivered to Tenant, and Basic Rent and Additional Rent shall be
abated as of the date of the Casualty.
(d) Repair Obligation. If neither party elects to terminate this Lease
following a Casualty, then Landlord shall, within a reasonable time after such
Casualty, begin to repair the Building and the shell of the Premises and shall
proceed with reasonable diligence to restore the Building and shell of the
Premises to substantially the same condition as they existed immediately before
such Casualty; however, Landlord shall not be required to repair or replace any
of the furniture, equipment, fixtures, and other improvements which may have
been placed by, or at the request of, Tenant (it being acknowledged by Tenant
that it shall insure and replace all improvements in the Premises other than the
shell of the Premises) or other occupants in the Building or the Premises, and
Landlord's obligation to repair or restore the Building or shell of the Premises
shall be limited to the extent of the insurance proceeds notwithstanding the
application of any portion of the proceeds by a lender towards Landlord's
indebtedness to the lender. As used herein, the term "shell of the Premises"
shall mean sheetrocked exterior walls and a hung ceiling with respect to the
Premises.
15. Taxes. Tenant shall be liable for any personal property taxes levied or
assessed against personal property, furniture, or trade fixtures (not in the
nature of fixtures to real property) placed by Tenant in the Premises. If any
personal property taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord's property and Landlord elects to pay the same, or
if the assessed value of Landlord's property is increased by inclusion of such
personal property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, then Tenant shall pay to Landlord, upon demand, the part
of such personal property taxes for which Tenant is primarily liable hereunder;
however, Landlord shall not pay such amount if Tenant notifies Landlord that it
will contest the validity or amount of such personal property taxes before
Landlord makes such payment, and thereafter diligently proceeds with such
contest in accordance with law and if the non-payment thereof does not pose a
threat of loss or seizure of the Building or interest of Landlord therein.
16. Events of Default. Each of the following occurrences shall be an "Event
of Default":
15
(a) Tenant's failure to pay Rent within five days after Landlord has
delivered notice to Tenant that the same is due; however, an Event of Default
shall occur hereunder without any obligation of Landlord to give any notice if
Landlord has given Tenant written notice under this Section 16.(a) on more than
two (2) occasions during the twelve (12) month interval immediately preceding
such failure by Tenant;
(b) Tenant's failure to perform, comply with, or observe any other agreement
or obligation of Tenant under this Lease and the continuance of such failure for
a period of more than 30 days after Landlord has delivered to Tenant written
notice thereof; and
(c) The filing of a petition by or against Tenant (the term "Tenant" shall
include, for the purpose of this Section 16.(c), any guarantor of the Tenant's
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2)
seeking any relief under any state or federal debtor relief law; (3) for the
appointment of a liquidator or receiver for all or substantially all of Tenant's
property or for Tenant's interest in this Lease; or (4) for the reorganization
or modification of Tenant's capital structure; however, if such a petition is
filed against Tenant, then such filing shall not be an Event of Default unless
Tenant fails to have the proceedings initiated by such petition dismissed within
90 days after the filing thereof.
17. Remedies. Upon any Event of Default, Landlord may, in addition to all
other rights and remedies afforded Landlord hereunder or by law or equity, take
any of the following actions:
(a) Terminate this Lease by giving Tenant written notice thereof, in which
event Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder
through the date of termination, (2) all amounts due under Section 18.(a), and
(3) an amount equal to the total Rent that Tenant would have been required to
pay for the remainder of the Term discounted to its present value using a
discount rate of four (4%) per annum.
(b) Terminate Tenant's right to possess the Premises without terminating
this Lease by giving written notice thereof to Tenant, in which event Tenant
shall pay to Landlord (1) all Rent and other amounts accrued hereunder to the
date of termination of possession, (2) all amounts due from time to time under
Section 18.(a), and (3) all Rent and other net sums required hereunder to be
paid by Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the Premises during such
period, after deducting all costs incurred by Landlord in reletting the
Premises. Landlord shall use reasonable efforts to relet the Premises on such
terms as Landlord in its sole discretion may determine (including a term
different from the Term, rental concessions, and alterations to, and improvement
of, the Premises); however, Landlord shall not be obligated to relet the
Premises before leasing other portions of the Building. Landlord shall not be
liable for, nor shall Tenant's obligations hereunder be diminished because of,
Landlord's failure to relet the Premises or to collect rent due for such
reletting. Tenant shall not be entitled to the excess of any consideration
obtained by reletting over the Rent due hereunder. Reentry by Landlord in the
Premises shall not affect Tenant's obligations hereunder for
16
the unexpired Term; rather, Landlord may, from time to time, bring an action
against Tenant to collect amounts due by Tenant, without the necessity of
Landlord's waiting until the expiration of the Term. Unless Landlord delivers
written notice to Tenant expressly stating that it has elected to terminate this
Lease, all actions taken by Landlord to dispossess or exclude Tenant from the
Premises shall be deemed to be taken under this Section 17.(b). If Landlord
elects to proceed under this Section 17.(b), it may at any time elect to
terminate this Lease under Section 17.(a); or
(c) Additionally, without notice, if permitted by law, Landlord may alter
locks or other security devices at the Premises to deprive Tenant of access
thereto, and Landlord shall not be required to provide a new key or right of
access to Tenant.
Any and all remedies set forth in this Lease: (i) shall be in addition to any
and all other remedies Landlord may have at law or in equity; (ii) shall be
cumulative; and (iii) may be pursued successively or concurrently as Landlord
may elect. The exercise of any remedy by Landlord shall not be deemed an
election of remedies or preclude Landlord from exercising any other remedies in
the future. Notwithstanding the foregoing, Landlord shall only recover its
damages allowed hereunder once.
18. Payment by Tenant; Non-Waiver
(a) Payment by Tenant. Upon any Event of Default, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any other occupant's property, (3) repairing,
restoring, altering, remodeling, or otherwise putting the Premises into
condition acceptable to a new tenant, (4) reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (5) performing Tenant's obligations which
Tenant failed to perform, and (6) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default. To the full
extent permitted by law, Landlord and Tenant agree the federal and state courts
of New Jersey shall have exclusive jurisdiction over any matter relating to or
arising from this Lease and the parties' rights and obligations under this
Lease.
(b) No Waiver. Landlord's acceptance of Rent following an Event of Default
shall not waive Landlord's rights regarding such Event of Default. No waiver by
Landlord of any violation or breach of any of the terms contained herein shall
waive Landlord's rights regarding any future violation of such term. Landlord's
acceptance of any partial payment of Rent shall not waive Landlord's rights with
regard to the remaining portion of the Rent that is due, regardless of any
endorsement or other statement on any instrument delivered in payment of Rent or
any writing delivered in connection therewith; accordingly, Landlord's
acceptance of a partial payment of Rent shall not constitute an accord and
satisfaction of the full amount of the Rent that is due.
19. Landlord's Lien. Landlord hereby waives any statutory landlord's lien in
and to Tenant's equipment, inventory, furniture and fixtures.
17
20. Surrender of Premises. No act by Landlord shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless it is in writing and signed by Landlord. At the
expiration or termination of this Lease, Tenant shall deliver to Landlord the
Premises with all improvements located therein in good repair and condition,
broom-clean, reasonable wear and tear (and condemnation and Casualty damage not
caused by Tenant, as to which Sections 13 and 14 shall control) excepted, and
shall deliver to Landlord all keys to the Premises. Tenant shall remove all
unattached trade fixtures, furniture, and personal property placed in the
Premises by Tenant, and shall remove such alterations, additions, improvements,
trade fixtures, personal property, equipment, and furniture as required in
subparagraph 7(a). Tenant shall repair all damage caused by such removal and cap
any fixtures and/or wiring that are affected in the process of removing the
foregoing. All items not so removed shall be deemed to have been abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed
of by Landlord upon ten (10) days notice to Tenant and without any obligation to
account for such items. The provisions of this Section 20 shall survive the end
of the Term.
21. Holding Over. If Tenant fails to vacate the Premises at the end of the
Term, then Tenant shall be a tenant at will and, in addition to all other
damages and remedies to which Landlord may be entitled for such holding over,
Tenant shall pay, in addition to the other Rent, a daily Basic Rent equal to the
greater of (A) 150% of the daily Basic Rent payable during the last month of the
Term, or (B) 125% of the prevailing basic rental rate in the Building for
similar space.
22. Certain Rights Reserved by Landlord. Provided that the exercise of such
rights does not unreasonably interfere with Tenant's occupancy of the Premises,
Landlord shall have the following rights:
(a) To decorate and to make inspections, repairs, alterations, additions,
changes, or improvements, whether structural or otherwise, in and about the
Building, or any part thereof; to enter upon the Premises and, during the
continuance of any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities; to change the name of the Building; and to
change the arrangement and location of entrances or passageways, doors, and
doorways, corridors, stairs, restrooms, or other public parts of the Building,
if any;
(b) To take such reasonable measures as Landlord deems advisable for the
security of the Building and its occupants; evacuating the Building for cause,
suspected cause, or for drill purposes; temporarily denying access to the
Building; and closing the Building after normal business hours and on Sundays
and holidays, subject, however, to Tenant's right to enter when the Building is
closed after normal business hours under such reasonable regulations as Landlord
may prescribe from time to time; and
(c) To enter the Premises at reasonable hours to show the Premises to
prospective purchasers, lenders, or, during the last 12 months of the Term,
tenants.
18
(d) Provided Tenant is not in default under this Lease, in connection with
any entry into the Premises for any purpose or in connection with any physical
work in or about the Building in the vicinity of the Premises which might
interfere with Tenant's use and enjoyment of the Premises, other than in an
emergency, Landlord shall: (i) attempt to schedule any such physical work by
appointment with Tenant at least a week after verbally advising Tenant of a
mutually satisfactory time; (ii) use reasonable efforts to minimize any
interference with Tenant's use and enjoyment of the Premises for its regular
business operations; (iii) in connection with showing the Premises to others on
shorter advice, not seek to enter into laboratory portions of the Premises
without the explicit permission of Tenant in each instance, but be satisfied
with viewing the laboratory areas from the office areas through doors which will
have windows installed in them for the purpose of viewing the laboratory areas
from the office areas; and (iv) not enter the laboratory areas if the
consequence of doing so would be to invalidate any pre-clinical or clinical
trials in which Tenant is then engaged and Tenant notifies Landlord of same
prior to the intended entry.
23. Intentionally Omitted.
24. Miscellaneous.
(a) Landlord Transfer. Landlord may transfer any portion of the Building and
any of its rights under this Lease. If Landlord assigns its rights under this
Lease, then Landlord shall thereby be released from any further obligations
hereunder, provided that the assignee assumes Landlord's obligations hereunder
in writing.
(b) Landlord's Liability. The liability of Landlord to Tenant for any
default by Landlord under the terms of this Lease shall be recoverable only from
the interest of Landlord in the Building, and Landlord shall not be personally
liable for any deficiency. This Section shall not limit any remedies which
Tenant may have for Landlord's defaults which do not involve the personal
liability of Landlord.
(c) Force Majeure. Other than for Tenant's obligations under this Lease that
can be performed by the payment of money (e.g., payment of Rent and maintenance
of insurance), whenever a period of time is herein prescribed for action to be
taken by either party hereto, such party shall not be liable or responsible for,
and there shall be excluded from the computation of any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations, or restrictions, or any other causes of any kind
whatsoever which are beyond the control of such party.
(d) Brokerage. Neither Landlord nor Tenant has dealt with any broker or
agent in connection with the negotiation or execution of this Lease, other than
Newmark Partners, Inc. and ▇▇▇▇▇ & ▇▇▇▇▇ Company, whose commission shall be paid
by Landlord. Tenant and Landlord shall each indemnify the other against all
costs, expenses, attorneys' fees, and other liability for commission or other
compensation claimed by any broker or agent claiming the same by, through, or
under the indemnifying party.
19
(e) Estoppel Certificates. From time to time, Tenant shall furnish to any
party designated by Landlord, within ten days after Landlord has made a request
therefor, a certificate signed by Tenant confirming and containing such factual
certifications and representations as to this Lease, to the extent the same are
accurate, as Landlord may reasonably request.
(f) Notices. All notices and other communications given pursuant to this
Lease shall be in writing and shall be (1) mailed by first class, United States
Mail, postage prepaid, certified, with return receipt requested, and addressed
to the parties hereto at the address specified next to their signature block,
(2) hand delivered to the intended address, or (3) sent by prepaid telegram,
cable, facsimile transmission, or telex followed by a confirmatory overnight
(i.e., Federal Express or equivalent) letter with copies as indicated on the
signature block. All notices shall be effective upon delivery to the address of
the addressee. The parties hereto may change their addresses by giving notice
thereof to the other in conformity with this provision.
(g) Separability. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws, then the remainder of
this Lease shall not be affected thereby and in lieu of such clause or
provision, there shall be added as a part of this Lease a clause or provision as
similar in terms to such illegal, invalid, or unenforceable clause or provision
as may be possible and be legal, valid, and enforceable.
(h) Amendments; and Binding Effect. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by either party unless such waiver is in
writing signed by the putatively waiving party, and no custom or practice which
may evolve between the parties in the administration of the terms hereof shall
waive or diminish the right of either party to insist upon the performance by
Tenant in strict accordance with the terms hereof. The terms and conditions
contained in this Lease shall inure to the benefit of and be binding upon the
parties hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease is
for the sole benefit of Landlord and Tenant, and, other than Landlord's
Mortgagee, no third party shall be deemed a third party beneficiary hereof.
(i) Quiet Enjoyment. Provided Tenant has performed all of its obligations
hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for
the Term, without hindrance from Landlord or any party claiming by, through, or
under Landlord, subject to the terms and conditions of this Lease.
(j) No Merger. There shall be no merger of the leasehold estate hereby
created with the fee estate in the Premises or any part thereof if the same
person acquires or holds, directly or indirectly, this Lease or any
20
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
(k) No Offer. The submission of this Lease to Tenant shall not be construed
as an offer, and Tenant shall not have any rights under this Lease unless
Landlord executes a copy of this Lease and delivers it to Tenant.
(l) Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord or Tenant to the other with respect to this Lease or the obligations of
Landlord or Tenant in connection therewith.
(m) Waiver of Jury Trial. To the maximum extent permitted by law, Landlord
and Tenant each waive right to trial by jury in any litigation arising out of or
with respect to this Lease.
(n) Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Premises are located.
(o) Joint and Several Liability. If Tenant is comprised of more than one
party, each such party shall be jointly and severally liable for Tenant's
obligations under this Lease.
(p) Financial Reports. Within 15 days after Landlord's request, Tenant will
furnish Tenant's most recent audited financial statements (including any notes
to them) to Landlord, or, if no such audited statements have been prepared, such
other financial statements (and notes to them) as may have been prepared by an
independent certified public accountant or, failing those, Tenant's internally
prepared financial statements. Tenant will discuss its financial statements with
Landlord. Landlord will not disclose any aspect of Tenant's financial statements
that Tenant designates to Landlord as confidential except (a) to Landlord's
lenders or prospective purchasers of the project, (b) in litigation between
Landlord and Tenant, and (c) if required by court order.
(q) Landlord's Fees. Whenever Tenant requests Landlord to take any action or
give any consent required or permitted under this Lease, Tenant will reimburse
Landlord for Landlord's reasonable costs incurred in reviewing the proposed
action or consent, including without limitation reasonable attorneys',
engineers' or architects' fees, within 10 days after Landlord's delivery to
Tenant of a statement of such costs. Tenant will be obligated to make such
reimbursement without regard to whether Landlord consents to any such proposed
action.
(r) Intentionally Omitted.
21
(s) Confidentiality. Tenant acknowledges that the terms and conditions of
this Lease are to remain confidential for the Landlord's benefit, and may not be
disclosed by Tenant to anyone, by any manner or means, directly or indirectly,
without Landlord's prior written consent. The consent by the Landlord to any
disclosures shall not be deemed to be a waiver on the part of the Landlord of
any prohibition against any future disclosure.
(t) List of Exhibits. All exhibits and attachments attached hereto are
incorporated herein by this reference.
Exhibit A -Legal Description and Outline of Premises
Exhibit B -Building Rules and Regulations
Exhibit C -Work Letter
Exhibit D -Parking
Exhibit E -Subordination, Non-Disturbance and Attornment Agreement/ Tenant
Estoppel Certificate
Exhibit F -Renewal Option
Exhibit G -Right of First Offer
Exhibit H -Letter of Credit
(u) The execution and delivery of, the consummation of the transactions
contemplated by and the performance of all its obligations under, this Lease by
the Landlord have been duly and validly authorized by all its general partners;
and no other approval or consent, whether partnership, governmental or
otherwise, is required to authorize or to give effect to the Landlord's
execution and delivery of, the consummation of the transactions contemplated by
and the performance of all its obligations under, this Lease.
25. Other Provisions.
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE, AND EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.
26. Environmental Laws.
(a) Tenant, at its own cost and expense, agrees to comply with all
applicable environmental laws, rules and regulations of the Federal, State,
County and Municipal governments and of all other governmental authorities
having or claiming jurisdiction over the Premises or appurtenances thereto, or
any part thereof, which are applicable to the Premises and/or the conduct of
business thereon (except that Tenant shall not be responsible for any occurrence
or condition that arises prior to the Commencement Date), including but not
limited to the Environmental Cleanup Responsibility Act of 1983 as amended by
the Industrial Site Recovery Act (N.J.S.A. 13:1K-6 et seq) ("ISRA"). Further,
Tenant agrees to make submissions to and provide any information
22
required by all governmental authorities requesting same pursuant to Tenant's
obligations under this Paragraph 26. Tenant represents to Landlord that Tenant's
Standard Industrial Classification (SIC) Number is 2835.
(b) Tenant hereby agrees to execute such documents as Landlord reasonably
deems necessary and to make such applications as Landlord reasonably requires to
assure compliance with ISRA. Tenant shall bear all costs and expenses incurred
by Landlord associated with any required ISRA compliance resulting from Tenant's
use of the Premises including but not limited to state agency fees, engineering
fees, clean-up costs, filing fees and suretyship expenses. As used in this
Lease, ISRA compliance shall include, but not be limited to, applications for
determinations of nonapplicability by the appropriate governmental authority.
The foregoing undertaking shall survive the termination or sooner expiration of
the Lease and surrender of the Premises and shall also survive sale, or lease or
assignment of the Premises by Landlord. Tenant shall immediately provide
Landlord with copies of all correspondence, reports, notices, orders, findings,
declarations and other materials pertinent to Tenant's compliance and the New
Jersey Department of Environmental Protection's ("NJDEP") requirements under
ISRA as they are issued or received by the Tenant.
(c) Tenant shall not generate, store, manufacture, refine, transport, treat,
dispose of, or otherwise permit to be present on or about the Premises, any
Hazardous Substances unless the same are in full compliance with all applicable
environmental laws, rules and regulations. As used herein, Hazardous Substances
shall be defined as any "hazardous chemical," "hazardous substance" or similar
term as defined in the Comprehensive Environmental Responsibility Compensation
and Liability Act, as amended (42 U.S.C. 9601, et seq.), the New Jersey
Environmental Cleanup Responsibility Act, as amended by the Industrial Site
Recovery Act, (N.J.S.A. 13:1K-6 et seq.), the New Jersey Spill Compensation and
Control Act, as amended, (N.J.S.A. 58:10-23.11b, et seq.) , any rules or
regulations promulgated thereunder, or in any other present or future applicable
federal, state or local law, rule or regulation dealing with environmental
protection.
(d) In the event Tenant receives any notice that a spill or discharge of any
Hazardous Substance has occurred on or about the Premises, Building and/or Land
or into the sewer and/or waste treatment system operated by Landlord from any
person or entity, including NJDEP and the United States Environmental Protection
Agency ("EPA"), then Tenant shall provide immediate written notice of same to
Landlord, detailing all relevant facts and circumstances.
(e) Tenant agrees to indemnify, defend and hold harmless the Landlord and
each mortgagee of the Building from and against any and all liabilities,
damages, claims, losses, judgments, causes of action, costs and expenses
(including the reasonable fees and expenses of counsel) which may be incurred by
the Landlord or any such mortgagee or threatened against the Landlord or such
mortgagee, relating to or arising out of the presence, disposal, escape,
migration, leakage, spillage, discharge, emission, release, threatened release,
handling, or transportation of Hazardous Substances in, on, at, under, from, in
the vicinity of, or affecting or related to the Premises
23
or any part of the land and Building arising out of the acts or omissions of
Tenant, its employees, contractors, agents, invitees and/or licensees and any
breach by Tenant of this Article, which indemnification shall survive the
expiration or sooner termination of this Lease. In no event shall Tenant's
remedial action involve engineering or institutional controls, including without
limitation capping, deed notice, declaration of restriction or other
institutional control notice pursuant to P.L. 1993, c.139, and notwithstanding
NJDEP's requirements, Tenant's remedial action shall meet the most stringent
NJDEP remediation standards for soil, surface water and groundwater. Promptly
upon completion of all required investigatory and remedial activities, Tenant
shall restore the affected areas of the land and Buildings from any damage or
condition caused by the work, including without limitation closing, pursuant to
law any ▇▇▇▇▇ installed at the Building.
(f) Environmental Report. Landlord has provided to Tenant a copy of a Phase
I Environmental Site Assessment Update (SSCI Job No. 30238NJ) ("Report") with
respect to the land upon which the Building is constructed, dated June 6, 1996,
prepared by SSCI Environmental and Consulting Services ("Consultant"). Tenant
agrees not to release the Report, or a copy of it, or any part of it, or
disclose any of the information contained in the Report to any third party
(other than Tenant's counsel) without the express prior written consent of
Landlord. Such consent shall not be unreasonably withheld as long as the
proposed party to whom the report is given executes a letter agreement
containing covenants similar to this Section 26(f). Tenant releases Landlord for
any inaccuracies, omissions or errors contained in the Report. Tenant agrees
that it will not rely on the Report and it will make whatever independent
investigation it feels is necessary to investigate the environmental and other
conditions of the land. Tenant agrees that Landlord has no duty to provide it
with the Report, to correct any inaccuracies, error or omissions in the Report,
to supplement the Report with any additional information, or to provide Tenant
with any information concerning the environmental conditions of the land. Tenant
agrees that Landlord considers the Report to be confidential proprietary
information and Tenant agrees to maintain the confidentiality and security of
the Report information in accordance with the highest standards of
confidentiality and security associated with the protection of "trade secrets".
Landlord hereby expressly disclaims responsibility for the investigation of the
land by Tenant and further disclaims any responsibility for the contents of the
Report. Tenant's obligations pursuant to this Section 26(f) shall survive the
expiration or termination of this Lease.
24
27. Signs. Tenant shall be entitled to be listed on the building directory
and in a sign in front of the Premises comparable to signs
provided to other tenants in the Building.
IN WITNESS WHEREOF, and in consideration of the mutual entry into this Lease
and for other good and valuable consideration, and intending to be legally
bound, each party hereto has caused this Lease Agreement to be duly executed as
of the day and year first above written.
TENANT: PALATIN TECHNOLOGIES, INC.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Notice Address: with a copy to:
------------------------------ --------------------------------
Palatin Technologies, Inc. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Chief Financial Officer Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇ Telecopy No.: 609-520-8731
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
LANDLORD: WHC-SIX REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership,
By: WHC-SIX Gen-Par, Inc., a Delaware
corporation, its general partner
By: /s/ Wm. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Wm. ▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Vice President
Notice Address: with a copy to:
--------------------------------------- ---------------------------------
WHC-Six Real Estate Limited Partnership WHC-Six Real Estate Limited
c/o Newmark Partners, Inc. Partnership
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ c/o Archon Group, L.P.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇: Property Manager Suite 1900
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇ Attn: Asset Manager
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
with a further copy to:
-----------------------
Ravin, Sarasohn, Cook, Baumgarten, ▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
EXHIBIT A
[DIAGRAM OF FIRST FLOOR PLAN AND PROPERTY DESCRIPTION]
EXHIBIT B
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply to the Premises, the
Building, and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by tenants or used by any tenant for purposes
other than ingress and egress to and from their respective leased premises and
for going from one to another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by a tenant or its agents, employees or invitees, shall
be paid by such tenant.
3. No signs, advertisements or notices shall be painted or affixed on or to
any windows or doors or other part of the Building without the prior written
consent of Landlord. No nails, hooks or screws shall be driven or inserted in
any part of the Building except by Building maintenance personnel. No curtains
or other window treatments shall be placed between the glass and the Building
standard window treatments.
4. Landlord shall provide and maintain an alphabetical directory for all
tenants in the Building directory.
5. Landlord shall provide all door locks in each tenant's leased premises,
at the cost of such tenant, and no tenant shall place any additional door locks
in its leased premises without Landlord's prior written consent. Landlord shall
furnish to each tenant a reasonable number of keys to such tenant's leased
premises, at such tenant's cost, and no tenant shall make a duplicate thereof.
6. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by tenants of any bulky material, merchandise or materials
which require use of elevators or stairways, or movement through the Building
entrances shall be conducted under Landlord's supervision at such times and in
such a manner as Landlord may reasonably require. Each tenant assumes all risks
of and shall be liable for all damage to articles moved and injury to persons or
public engaged or not engaged in such movement, including equipment, property
and personnel of Landlord if damaged or injured as a result of acts in
connection with carrying out this service for such tenant.
7. Landlord may prescribe weight limitations and determine the locations for
safes and other heavy equipment or items, which shall in all cases be placed in
the Building so as to distribute weight in a manner acceptable to Landlord which
may include the use of such supporting devices as Landlord may require. All
damages to the Building caused by the installation or removal of any property of
a tenant, or done by a tenant's property while in the Building, shall be
repaired at the expense of such tenant.
8. Corridor doors, when not in use, shall be kept closed. Nothing shall be
swept or thrown into the corridors, halls, elevator shafts or stairways. No
portion of any tenant's leased premises shall at any time be used or occupied as
sleeping or lodging quarters.
9. Tenant shall cooperate with Landlord's employees in keeping its leased
premises neat and clean.
10. Intentionally omitted.
11. Tenant shall not make or permit any vibration or improper, objectionable
or unpleasant noises or odors in the Building or otherwise interfere in any way
with other tenants or persons having business with them.
12. No machinery of any kind (other than laboratory and normal office
equipment) shall be operated by any tenant on its leased area without Landlord's
prior written consent, nor shall any tenant use or keep in the Building any
flammable or explosive fluid or substance, unless required in Tenant's business
operations and then not in violation of applicable law.
13. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from tenant's leased premises or public or common areas
regardless of whether such loss occurs when the area is locked against entry or
not.
14. No vending or dispensing machines of any kind may be maintained in any
leased premises without the prior written permission of Landlord.
15. Tenant shall not conduct any prohibited activity on or about the
Premises or Building which will draw pickets, demonstrators, or the like.
16. All vehicles are to be currently licensed, in good operating condition,
parked for business purposes having to do with Tenant's business operated in the
Premises, parked within designated parking spaces, one vehicle to each space. No
vehicle shall be parked as a "billboard" vehicle in the parking lot. Any vehicle
parked improperly may be towed away. The Tenant, Tenant's agents, employees,
vendors and customers who do not operate or park their vehicles as required
shall subject the vehicle to being towed at the expense of the owner or driver.
The Landlord may place a "boot" on the vehicle to immobilize it and may levy a
charge of $50.00 to remove the "boot". The Tenant shall indemnify, hold and save
harmless the Landlord of any liability arising from the towing or booting of any
vehicles belonging to the Tenant, Tenant's agents, vendors, employees and
customers.
EXHIBIT C
WORK LETTER
1. The Landlord shall make the Premises available to the Tenant for the
purpose of build-out on the day immediately after the date the existing tenant
in the Premises vacates the Premises.
2. As soon as practicable, Tenant shall provide to Landlord for its approval
final working drawings, prepared by an architect that has been approved by
Landlord (which approval shall not unreasonably be withheld, delayed or
conditioned), of all improvements that Tenant proposes to install or have
installed in the Premises. Such working drawings shall include the partition
layout, ceiling plan, electrical outlets and switches, telephone outlets,
drawings for any modifications to the electrical, mechanical and plumbing
systems of the Building, and detailed plans and specifications for the
construction of the improvements called for under this Exhibit in accordance
with all applicable governmental laws, codes, rules and regulations. Further, if
any of Tenant's proposed construction work will affect the Building's HVAC,
electrical, mechanical, or plumbing systems, then the working drawings
pertaining thereto must be approved by the Building's engineer of record.
Landlord's approval of such working drawings shall not be unreasonably withheld,
delayed or conditioned, provided that (a) they comply with all laws, rules, and
regulations, and (b) such working drawings are sufficiently detailed to allow
construction of the improvements in a good and workmanlike manner. As used
herein, "Working Drawings" shall mean the final working drawings approved by
Landlord, as amended from time to time by any approved changes thereto, and
"Work" shall mean all improvements to be constructed in accordance with and as
indicated on the Working Drawings. Landlord's approval of the Working Drawings
shall not be a representation or warranty of Landlord that such drawings are
adequate for any use or comply with any law, but shall merely be the consent of
Landlord thereto. Landlord shall endorse the Working Drawings to indicate its
review and approval thereof. All changes in the Work must receive the prior
written approval of Landlord, and in the event of any such approved change
Tenant shall, upon completion of the Work, furnish Landlord with an accurate,
reproducible "as-built" plan of the improvements as constructed.
3. The Work shall be performed by the Tenant's contractors at Tenant's
expense, subject to the Construction Allowance (and, if applicable, the
Additional Construction Allowance) hereinafter set forth. All of the Tenant's
contractors and their subcontractors shall be required to procure and maintain
insurance against such risks, in such amounts and with such companies as
Landlord may reasonably require. Certificates of such insurance, with paid
receipts therefor, must be received by Landlord before the Work is commenced.
The Work shall be performed in a good and workmanlike manner free of defects,
shall conform with the Working Drawings, and shall be performed in such a manner
and at such times as and not to materially interfere with or delay Landlord's
other contractors, if any, the operation of the Building, and the occupancy
thereof by other tenants. All contractors shall contact Landlord on behalf of
themselves and their respective subcontractors and schedule time periods during
which they may use Building facilities in connection with the Work; and the
Landlord shall cooperate in such scheduling so as not to delay or hinder the
Work
4. (a) Landlord shall provide to Tenant a construction allowance
("Construction Allowance") equal to $40.00 per rentable square foot of the
Premises at the times and in the manner set forth below.
(b) Landlord shall make the Construction Allowance due with respect to the
9,000 square foot portion of the Premises available to Tenant, either by paying
Tenant or its contractors, after Tenant shall have documented that it has been
billed and expended $540,000.00 for the build-out. Tenant shall forward
documented invoices to Landlord not more frequently than monthly and payment
shall be made as expeditiously as practicable upon Landlord's receipt of an
invoice and lien waivers from any contractors, subcontractors and suppliers of
the Work.
(c) Landlord shall make the Construction Allowance due with respect to the
Balance of Suite 500 available to Tenant, either by paying Tenant or its
contractors, when (i) Tenant builds out the Balance of Suite 500 to completion,
and (ii) the Total Occupancy Date shall have occurred. Tenant shall forward
documented invoices to Landlord not more frequently than monthly and payment
shall be made as expeditiously as practicable upon Landlord's receipt of an
invoice and lien waivers from any contractors, subcontractors and suppliers of
the Work.
5. Landlord shall provide to Tenant an additional construction allowance
("Additional Construction Allowance") equal to 100% of all the rent and other
premiums actually received (including but not limited to retroactive holdover
rent and premiums), without Landlord having any obligation to commence a lawsuit
therefor, from the existing tenant in the Premises as it pertains to Suite 500
(as opposed to the entire space occupied by the existing tenant) paid or
attributable to the period from and after April 1, 1997 (and any retroactive
period prior thereto) with respect to the Premises, up to a maximum of
$35,000.00, for the limited purpose of reimbursing Tenant for incremental
verified costs incurred by the Tenant in its discretion for the purpose of
accelerating construction of the build-out contemplated to begin after the
existing tenant in the Premises vacates the Premises, including overtime labor
expense, expediting charges and similar costs incurred for the purpose of
accelerating construction. Tenant shall forward documented invoices to Landlord
not more frequently than monthly and payment of the Additional Construction
Allowance shall be made as expeditiously as practicable upon Landlord's receipt
of invoices and lien waivers from any contractors, subcontractors and suppliers
of the Work setting forth such costs in the aggregate amount of such costs.
6. If the existing Tenant in the Premises shall not have vacated the Premises
by the close of business on April 15, 1997, the Landlord shall promptly commence
summary dispossession proceedings by filing the summons and complaint with the
Clerk of the Court on the next business day and pursue such proceedings
diligently and expeditiously, with the goal of evicting the existing tenant in
the Premises from the Premises at the earliest possible date after April 15,
1997.
EXHIBIT D
PARKING
Tenant may use 40 non-designated parking spaces in the parking area
associated with the Building (the "Parking Area") during the initial Term
subject to such terms, conditions and regulations as are from time to time
applicable to patrons of the Parking Area.
EXHIBIT E
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the _________ day
of _________________, 1997 by and between GENERAL ELECTRIC CAPITAL
REALTY GROUP, a New York corporation ("Mortgagee"), and PALATIN
TECHNOLOGIES, INC., a Delaware Corporation ("Lessee").
R E C I T A L S:
A. Mortgagee has provided an acquisition and development loan
("Loan") to WHC-SIX Real Estate Limited Partnership, Owner/Lessor
("Borrower"), for the purpose of financing Borrower's acquisition
and development of the Edison Corporate Center in Edison, New Jersey
and described in Exhibit A attached hereto and incorporated herein by
reference (said real property and improvements being herein called
the "Project"), such Loan being secured by a First Mortgage and
Security Agreement dated July 29, 1994 and recorded in Mortgage Book
4772, Page 295 seq., in the Clerk's Office of Middlesex County, (the
"Mortgage"), constituting a lien or encumbrance on the Project; and
B. Lessee is the holder of a Leasehold estate in and to Suite
500 of 125 May Street, Edison, New Jersey, of the Project, consisting
of 10,538 square feet of space (the "Demised Premises"), under that
lease dated March 13, 1997 (the "Lease") executed by Borrower, as
Landlord (Borrower being sometimes hereinafter called "Lessor"), and
Lessee, as Tenant; and
C. Lessee and Mortgagee desire to confirm their understandings
with respect to the Lease and Mortgage.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, Lessee and Mortgagee agree
and covenant as follows:
1. Non-Disturbance. Mortgagee agrees that it will not disturb
the possession of Lessee under the Lease upon any judicial or non-
judicial foreclosure of the Mortgage or upon acquiring title to the
Project by deed-in-lieu of foreclosure, or otherwise, if the Lease is
in full force and effect and Lessee is not then in default under the
Lease, and that Mortgagee will accept the attornment of Lessee
thereafter so long as Lessee is not in default under the Lease.
2. Attornment. If the interests of Lessor in and to the Demised
Premises are owned by Mortgagee by reason of any deed-in-
lieu of foreclosure, judicial foreclosure, sale pursuant to any
power of sale or other proceedings brought by it or by any other
manner, including, but not limited to, Mortgagee's exercise of its
rights under any assignment of leases and rents, and Mortgagee
succeeds to the interest of Lessor under the Lease; Lessee shall be
bound to Mortgagee under all of the terms, covenants and conditions
of the Lease for the balance of the term thereof remaining and any
extension thereto duly exercised by Lessee with the same force and
effect as if Mortgagee were the Lessor under the Lease, and Lessee
does hereby attorn to Mortgagee, as its lessor, said attornment to be
effective and self-operative, without the execution of any further
instruments on the part of any of the parties hereto, immediately
upon Mortgagee's succeeding to the interest of Lessor under the
Lease; provided, however, that Lessee shall be under no obligation to
pay rent to Mortgagee until Lessee receives written notice from
Mortgagee that Mortgagee has succeeded to the interest of the Lessor
under the Lease or otherwise has the right to receive such rents. The
respective rights and obligations of Lessee and Mortgagee upon such
attornment, to the extent of the then remaining balance of the term
of the Lease, shall be and are the same as now set forth therein, it
being the intention of the parties hereto for this purpose to
incorporate the Lease in this Agreement by reference, with the same
force and effect as if set forth in full herein.
3. Mortgagee's Obligations. If Mortgagee shall succeed to the
interest of Lessor under the Lease, Mortgagee, subject to the last
sentence of this Paragraph 3, shall be bound to Lessee under all of
the terms, covenants and conditions of the Lease, provided, however,
that Mortgagee shall not be:
(a) Liable for any act or omission of any prior lessor
(including Lessor) but not withstanding such lack of liability, upon
Mortgagee (i) succeeding to the interest' of Lessor under the Lease,
and (ii) receiving written notice of the act or omission from Lessee,
Mortgagee shall commence to cure any act or omission of any prior
lessor (including Lessor); or
(b) Subject to the offsets or defenses which Lessee might have
against any prior lessor (including Lessor) but not withstanding such
lack of liability, upon Mortgagee (i) succeeding to the interest of
Lessor under the Lease, and (ii) receiving written notice of the act
or omission from Lessee, Mortgagee shall commence to cure any act or
omission of any prior lessor (including Lessor); or,
2
(c) Bound by any rent or additional rent or advance rent which
Lessee might have paid in advance in excess of one month's rent to
any prior lessor (including Lessor), and all such rent shall remain
due and owing, notwithstanding such advance payment; or
(d) Bound by any security or advance rental deposit made by
Lessee which is not delivered or paid over to Mortgagee and with
respect to which Lessee shall look solely to Lessor for refund or
reimbursement; or
(e) Bound by any termination, amendment or modification of the
Lease made without its consent and written approval.
Neither General Electric Capital Corporation nor any other party who
from time to time shall be included in the definition of Mortgagee
hereunder, shall have any liability or responsibility under or
pursuant to the terms of this Agreement after it ceases to own an
interest in the Project with respect to acts and omissions of its
successor in interest that occur after the effective date of such
cessation. Nothing in this Agreement shall be construed to require
Mortgagee to see to the Application of the proceeds of the Loan, and
Lessee's agreements set forth herein shall not be impaired on account
of any modification of the documents evidencing and securing the
Loan. Lessee acknowledges that Mortgagee is obligated only to
Borrower to make the Loan only upon the terms and subject to the
conditions set forth in the Loan Agreement between Mortgagee and
Borrower pertaining to the Loan. Lessee further acknowledges and
agrees that neither Mortgagee nor any purchaser of the Project at
foreclosure sale or any grantee of the Project named in a deed-in-
lieu of foreclosure nor any heir, legal representative, successor, or
assignee of Mortgagee or any such purchaser or grantee, has or shall
have any personal liability for the obligations of Lessor under the
Lease; provided, however, that the Lessee may exercise any other
right or remedy provided thereby or by law in the event of any
failure by Lessor to perform any such material obligation.
4. Subordination. The Lease and all rights of Lessee
thereunder are subject and subordinate to the Mortgage and to any
deeds of trust, mortgages, ground leases or other instruments of
security which do now or may hereafter cover the Project or any
interest of Lessor therein (collectively, the "Prior Encumbrances")
and to any and all advances made on the security thereof and to any
and all increases, renewals, modifications, consolidations,
replacements and extensions of the Mortgage or of any of the Prior
Encumbrances. This provision is acknowledged by Lessee to be self-
operative and no further instrument shall be required to
3
effect such subordination of the Lease. Lessee shall, however, upon
demand at any time or times execute, acknowledge and deliver to
Mortgagee any and all instruments and certificates that in
Mortgagee's judgment may be necessary or proper to confirm or
evidence such subordination provided none of such certificates
contains any provision that purports to increase Lessee's obligations
or diminish Lessee's rights (including rights of rent abatement as
specifically stated under the Lease) and provided such certificates
are reasonably satisfactory in form and substance to Lessee. If
Lessee shall fail or neglect to execute, acknowledge and deliver any
such instrument or certificate, Mortgagee may, in addition to any
other remedies Mortgagee may have, as agent and attorney-in-fact of
Lessee, execute, acknowledge and deliver the same and Lessee hereby
irrevocably appoints Mortgagee as Lessee's agent and attorney-in-fact
for such purpose. However, notwithstanding the generality of the
foregoing provisions of this paragraph, Lessee agrees that Mortgagee
shall have the right at any time to subordinate the Mortgage, and any
such other mortgagee or ground lessor shall have the right at any
time to subordinate any such Prior Encumbrances, to the Lease.
5. New Lease. Upon the written request of either Mortgagee or
Lessee to the other given at the time of any foreclosure, trustee's
sale or conveyance in lieu thereof, the parties agree to execute a
lease of the Demised Premises upon the same terms and conditions as
the Lease between Lessor and Lessee, which lease shall cover any
unexpired term of the Lease existing prior to such foreclosure,
trustee's sale or conveyance in lieu of foreclosure, provided the
terms and conditions of any such new lease are substantively the same
as in the Lease and do not increase Lessee's economic obligations.
6. Notice. Lessee agrees to give written notice to Mortgagee of
any default by Lessor or Borrower under the Lease not less than
thirty (30) days prior to terminating the Lease or exercising any
other right or remedy thereunder or provided by law. Lessee further
agrees that it shall not terminate the Lease or exercise any such
right or remedy provided such default is cured within thirty (30)
days; provided, however, that if such default cannot by its nature be
cured within thirty (30) days, then Lessee shall not terminate the
Lease or exercise any such right or remedy, provided the curing of
such default is commenced within such thirty (30) days and is
diligently prosecuted thereafter. Such notices shall be delivered by
certified mail, return receipt requested to
General Electric Capital Realty Group
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
7. Mortgagee. The term "Mortgagee" shall be deemed to include
General Electric Capital Realty Group and any of its successors and
assigns, including anyone who shall have succeeded to Lessor's
interest in and to the Lease and the Project by, through or under
judicial foreclosure or sale under any power or other proceedings
brought pursuant to the Mortgage, or deed in lieu of such foreclosure
or proceedings, or otherwise.
8. Estoppel. Lessee hereby certifies, represents and warrants
to Mortgagee that:
(a) That the Lease is a valid lease and in full force and
effect. That it is not aware of any existing default in any of the
terms and conditions thereof and no event has occurred which, with
the passing of time or giving of notice or both, would constitute an
event of default;
(b) That the Lease has not been amended, modified,
supplemented, extended, renewed or assigned by Lessee, and represents
the entire agreement of the parties;
(c) That, except, as provided in the Lease, Lessee is entitled
to no rent concessions or abatements;
(d) That Lessee shall not pay rental under the Lease in excess
of one (1) month's rent in advance (except for any deposit or letter
of credit in the nature of security. Lessee agrees that Lessee shall,
upon written notice by Mortgagee, pay to Mortgagee, when due, all
rental due under and in accordance with the Lease;
(e) That all obligations and conditions under the Lease to be
performed to date have been satisfied, free of defenses and set-offs;
and
(f) That Lessee has not received written notice of any claim,
litigation or proceedings, pending or threatened, against or relating
to -Lessee, or with respect to the Demised Premises which would
affect its performance under the Lease. Lessee has not received
written-notice of any-violations of any federal, state, county or
municipal statutes, laws, codes, ordinances, rules, regulations,
orders, decrees or directives relating to the use or condition of the
Demised Premises or Lessee's operations thereon.
(g) On the date or this Agreement, the proposed lease has
been executed by Lessee and forwarded to Lessor for execution and an
executed copy returned to Lessee. Until execution by Lessor and
return of an executed copy to Lessee, the Lease will not have become
effective. Paragraphs 8(a) through (e) above should be read in light
of this paragraph 8(g).
5
9. Modification and Successors. This Agreement may not be
modified orally or in any manner other than by an agreement, in
writing, signed by the parties hereto and their respective successors
in interest. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their successors and assigns.
10. Counterparts. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement,
binding on all parties hereto, notwithstanding that all parties are
not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
MORTGAGEE: GENERAL ELECTRIC CAPITAL REALTY GROUP,
a New York corporation
By:
---------------------------------
Its
---------------------------------
LESSEE: PALATIN TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
6
STATE OF TEXAS )
)Ss.
COUNTY OF DALLAS )
BE IT REMEMBERED, that on this ____ day of _____, 1997, before me
the subscriber,_____________________, personally appeared_____________
who, I am satisfied, is the person who signed the within instrument
as __________________________ of General Electric Capital Realty Group,
a New York Corporation, the entity named therein and he thereupon
acknowledged that the said instrument made by the corporation and sealed
with its corporate seal, was signed, sealed with the corporate seal and
delivered by him as such officer and is the voluntary act and deed of the
corporation, made by virtue of authority from its Board of Directors.
_______________________
Notary Public, in and
for the State of Texas
My Commission expires ___________
STATE OF NEW JERSEY )
)ss.
COUNTY OF ▇▇▇▇▇▇ )
BE IT REMEMBERED, that on this 31st day of March, 1997, before me
the subscriber, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
who, I am satisfied, is the person who signed the within instrument as
the CEO of Palatin Technologies, Inc., the entity named therein and he
thereupon acknowledged that the said instrument made by the corporation
and sealed with its corporate seal, was signed, sealed with the corporate
seal and delivered by him as such officer and is the voluntary act and
deed of the corporation, made by virtue of authority from its Board of
Directors.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Notary Public, in and for
the State of
My Commission expires _________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
NOTARY PUBLIC OF NEW JERSEY
MY COMMISSION EXPIRES JULY 31, 2000
7
EXHIBIT E
GENERAL ELECTRIC CAPITAL REALTY GROUP
TENANT'S ESTOPPEL CERTIFICATE
-----------------------------
PREMISES: Edison Corporate Center, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
(10,538 square feet), Edison, New Jersey ("PREMISES")
LANDLORD: WHC-Six Real Estate L.P., a Delaware limited partnership
("LANDLORD")
LEASE DATED: March 13, 1997 ("LEASE")
TENANT: Palatin Technologies, Inc., a Delaware corporation
("TENANT")
TENANT`S NOTICE ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
DATE: __________________, 1997
The undersigned, Tenant, hereby certifies to GENERAL ELECTRIC
CAPITAL REALTY GROUP, a New York corporation ("GECRG"), that:
1. Tenant shall accept possession of the Premises pursuant to the
Lease. The Lease term shall commence on the earlier of (i) ninety-seven
(97) days following the date that the existing tenant in the Premises
vacates the Premises or (ii) the date-a temporary or permanent
certificate of occupancy is issued for the Initial Portion of Premises
(9,000 square feet) ("Commencement Date"). The termination date of the
Initial Term of the Lease is ten (10) years following the Commencement
Date. If the Commencement Date is not the first day of a calendar month,
then the Term shall be extended for the number of days between the
Commencement Date and the first day of the following month. Subject to
the Basic Rent adjustment as provided in paragraph 3(a)(ii) of the Lease,
monthly rent under the Lease is as follows: Basic Rent, $9,640.83 per
month for months 1-12, $9,897.17 per month for months 13-24, $10,538.00
per month for months 25-36, $13,:72.50 per month for months 37-60,
$16,685.17 per month for months 61-120, plus additional rent as provided
in the Lease.
2. Any improvements-required by the terms of the Lease to be made by
Landlord prior to the Commencement Date with respect to the Premises have
been completed to the satisfaction of Tenant in all respects, and
Landlord has fulfilled all of its duties under the Lease, performance of
which was due prior to the date of this certificate.
3. The Lease has not been assigned, modified, supplemented or amended
in any way by the Tenant. The Lease constitutes the entire agreement
between the parties and
there are no other agreements between Landlord and Tenant concerning the
Premises.
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, setoff 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 rent or other sum payable to Landlord under the Lease has been
paid in advance in excess of an amount equal to one month's Basic Rent,
except for any deposit or letter of credit in the nature of security.
6. The minimum monthly rental rate presently payable under the Lease on
and after the Commencement Date is $9,640.83.
7. Tenant acknowledges that Tenant has received this Estoppel
Certificate as notice that the Lease will be assigned to GECRG and Tenant
has received no notice of a prior assignment, hypothecation or pledge of
the Lease or the rents, income, deposits or profits arising thereunder.
GECRG hereby advises, and Tenant understands, that under the provisions
of the assignment, the Lease cannot be terminated (either directly or by
the exercise of any option which could lead to termination) or modified
in any of its terms, or consent be given to the release of any party
having liability thereon, without the prior written consent of GECRG,
that without such consent, no rent may be collected or-accepted in excess
of one month's rent in advance and that the interest of the Landlord in
the Lease has been assigned to GECRG solely as security for the purposes
specified in the assignment and GECRG assumes no duty, liability or
obligations whatever under the Lease or any extension or renewal thereof.
8. Tenant hereby acknowledges and agrees that if GECRG shall succeed to
the interest of Landlord under the Lease, GECRG shall assume (only while
owner of and in possession or control of the building of which the
Premises are a part) and perform all of Landlords obligations under the
Lease, but, except as may otherwise specifically set forth in the
Subordination, Non-Disturbance and Attornment Agreement between GECRG and
the Tenant, or elsewhere in this certificate shall not be liable for any
act or omission of any prior landlord (including the present landlord),
liable for the return of any security deposit, subject to any offset or
defense which Tenant
may have against any such prior landlord or bound by any rent or
additional rent Tenant may have paid for more than the current month to
any such prior landlord or bound by any assignment, surrender,
termination, cancellation, waiver, release, amendment or modification of
the Lease made without its express written consent.
9. Tenant shall give GECRG 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 rent or credit or offset any
amount against future rents and shall give GECRG reasonable time (but in
no event less than 30 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 rent or credit or offset any amounts
against the rent. Tenant shall give written notice of any default of
Landlord to any successor in interest of GECRG, 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 of whose name and address Tenant shall have been advised by
written notice from GECRG or its then current successor in interest.
10. Tenant shall not look to the Mortgagee, as mortgagee, mortgagee in
possession, or successor in title to the Mortgaged Property, in
connection with the return of or accountability with respect to any
security deposit required by Landlord, unless said sums have actually
been received by Mortgagee as security for Tenant's performance under the
Lease.
11. Tenant shall neither suffer nor itself manufacture, store, handle,
transport, dispose of, spill, leak, dump any toxic or hazardous waste,
waste product or substance (as they may be defined in any federal or
state statute, rule or regulation pertaining to or governing such wastes,
waste products or substances) on the Mortgaged Property at any time
during the term, or extended term, of the Lease, except as permitted by
the Lease.
12. All notices and other communications from Tenant to GECRG shall be
in writing and shall be delivered or mailed by registered mail, postage
paid, return receipt requested, addressed to GECRG at:
General Electric Capital Realty Group
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or at such other address as GECRG, any successor, purchaser or transferee
shall furnish to Tenant in writing.
13. This Estoppel Certificate is being executed and delivered by
Tenant(s) for the benefit of GECRG in connection with its loan to
Landlord which, Tenant is informed by GECRG, is secured or to be secured
in part by an assignment to GECRG of Landlord's interest in the Lease,
and (b) with the intent and understanding that the above statements will
be relied upon by GECRG.
14. On the date of this certificate, the proposed Lease has been
executed by Tenant and forwarded to Landlord for execution an an executed
copy returned to Tenant. Until execution by Landlord and return of an
executed copy to tenant, the Lease will not have become effective and no
obligations of Landlord or Tenant will have arisen under the Lease. The
foregoing Certificate should be read in light of this paragraph 14, e.g.,
paragraph 2, no improvements have been made (or buildout allowance paid)
because performance thereof was not due as of the Certificate date.
TENANT: Palatin Technologies, Inc.
a Delaware corporation
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:-----------------------
EXHIBIT F
RENEWAL OPTION
(a) Renewal. Provided no Event of Default exists, Tenant shall have
option(s) ("Renewal Option(s)") to extend the term of this Lease for
two (2) additional periods of five (5) years each ("Renewal Term(s)"),
by giving Landlord notice thereof not more than twelve (12), but at
least nine (9) months' notice, prior to the date of expiration of the
then current term of this Lease. If Tenant shall exercise the Renewal
Option(s), then this Lease shall be extended for the then upcoming
Renewal Term upon all of the terms, covenants and conditions contained
in this Lease, except that, during the Renewal Term, the annual Basic
Rent for said term shall be 95% of the annual market rental value
("Market Value Rent") of the Premises on the date that Tenant
exercises the applicable Renewal Option ("Exercise Date"), determined
as provided in subparagraph (b) below. In calculating the Market
Value Rent, the following assumptions shall be made: (i) the Landlord
can deliver possession of the Premises on the first day of the
respective Renewal Term; (ii) the Premises or respective portions
thereof are in the same condition they were in immediately after the
completion of any build-out thereof, subject to normal wear and use,
and the Tenant would accept them in that condition without any further
improvement; (iii) the improvements then in place in the Premises have
no special value to the Tenant beyond the value they would have to a
reasonable willing tenant seeking combination office and laboratory
space; (iv) this Lease remains in effect in accordance with its terms;
(v) the Landlord is required to pay a standard brokerage commission
with respect to the respective Renewal Term; and (vi) the Landlord
will be granting no concessions during the respective Renewal Term.
(b) Arbitration. The term "Market Value Rent" shall mean the annual fixed
rent that a willing tenant would pay and a willing landlord would
accept in an arms-length lease of the Premises as of the Exercise
Date, assuming the same terms and conditions set forth in this Lease
and using the assumptions described in (a) above. If Landlord and
Tenant shall fail to agree upon the Market Value Rent within sixty
(60) days after the Exercise Date, then Landlord and Tenant each shall
give notice ("Determination Notice") to the other setting forth their
respective determinations of the Market Value Rent, and, subject to
the provisions of subparagraph (c) below, either party may apply to
the American Arbitration Association or any successor thereto for the
designation of an arbitrator satisfactory to both parties to render a
final determination of the Market Value Rent. If Landlord and Tenant
cannot agree upon an arbitrator, the parties shall jointly apply to
the assignment judge of Middlesex County to select an arbitrator. The
arbitrator shall be a real estate appraiser, consultant or broker who
shall have at least fifteen (15) years continuous experience in the
business of appraising or office and laboratory leasing. The
arbitrator shall conduct such hearings and investigations as the
arbitrator shall deem appropriate and shall, within thirty (30) days
after having been
appointed, choose one of the determinations set forth in either
Landlord's or Tenant's Determination Notice, and that choice by the
arbitrator shall be binding upon Landlord and Tenant. Each party shall
pay its own counsel fees and expenses, if any, in connection with any
arbitration under this subparagraph (b), and the parties shall share
equally all other expenses and fees of any such arbitration. The
determination rendered in accordance with the provisions of this
subparagraph (b) shall be final and binding in fixing the Market Value
Rent. The arbitrator shall not have the power to add to, modify or
change any of the provisions of this Lease.
(c) Arbitration cancelled. In the event that the determination of the
Market Value Rent set forth in the Landlord's and Tenant's
Determination Notices shall differ by less than three (3%) percent per
rentable square foot per annum for the applicable Renewal Term, then
the Market Value Rent shall not be determined by arbitration, but
shall instead be set by taking the average of the determination set
forth in Landlord's and Tenant's Determination Notices. Only if the
determinations set forth in Landlord's and Tenant's Determination
Notices shall differ by more than three (3%) percent per rentable
square foot per annum for the applicable Renewal Term shall the actual
determination of Market Value Rent be made by an arbitrator as set
forth in subparagraph (b) above.
(d) Late determination. If for any reason the Market Value Rent shall not
have been determined prior to the commencement of the Renewal Term,
then, until the Market Value Rent and, accordingly, the annual Basic
Rent, shall have been finally determined, the annual Basic Rent shall
remain the same as payable during the last year of the expiring term
of the Lease. Upon final determination of the Market Value Rent, an
appropriate adjustment to the annual Basic Rent shall be made
reflecting such final determination, and Landlord or Tenant, as the
case may be, shall promptly refund or pay to the other any overpayment
or deficiency, as the case may be, in the payment of annual Basic Rent
from the commencement of the Renewal Term to the date of such final
determination.
(e) In the event the Premises has been expanded, the Renewal Option(s)
contained herein shall apply to the then existing Premises, as expanded
on a co-termination basis.
(f) Tenant shall have no further renewal options unless expressly granted by
Landlord in writing.
(g) Landlord shall lease to Tenant the Premises in their then-current
condition, and Landlord shall not provide to Tenant any allowances
(e.g., moving allowance, construction allowance, and the like) or other
tenant inducements.
(h) Tenant's rights under this Exhibit shall terminate if Tenant fails to
timely exercise its option(s) under this Exhibit, time being of the
essence with respect to Tenant's exercise thereof or Tenant assigns any
of its interest in this Lease or sublets any portion of the Premises,
other than an assignment or subletting to an Affiliate.
(i) In no event shall Tenant be entitled to exercise an option for any
Renewal Term unless it or an Affiliate is occupying all of the Premises
at the time of exercise.
EXHIBIT G
RIGHT OF FIRST OFFER
Subject to then-existing renewal or expansion options of other tenants, and
the existing tenants' desires (whether or not set forth in their leases) to
extend their terms provided no Event of Default then exists, Landlord shall,
prior to offering the same to others, and first offer to lease to Tenant the
space designated on page 2 of this Exhibit (the "Offer Space") in an "AS-IS"
condition; such offer shall be in writing and specify the rent to be paid for
the Offer Space and the date on which the Offer Space shall be included in the
Premises (the "Offer Notice"). Tenant shall notify Landlord in writing whether
Tenant elects to lease the entire Offer Space at the rental rate set forth in
the Offer Notice, within 10 days after Landlord delivers to Tenant the Offer
Notice. If Tenant timely elects to lease the Offer Space, then Landlord and
Tenant shall execute an amendment to this Lease, effective as of the date the
Offer Space is to be included in the Premises, on the same terms as this Lease
except as follows:
(a) the rentable area of the Premises and Tenant's proportionate share of
applicable Rent obligations shall be increased by the rentable area in the
Offer Space;
(b) the Basic Rent shall be increased by the amount specified for such space
in the Offer Notice;
(c) Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) or other tenant inducements;
and
(d) The Term shall be co-terminous with the Premises.
If Tenant fails or is unable to timely exercise its right hereunder, then
such right shall forever lapse, time being of the essence with respect to the
exercise thereof, and Landlord may lease the Offer Space to third parties on
such terms as Landlord may elect provided Landlord initially offers the Offer
Space to the third parties upon the same terms as offered to Tenant, but
Landlord shall be entitled to conclude its transaction with the third party on
terms other than initially offered to the third party. Tenant may not exercise
its rights under this Exhibit if an Event of Default exists or Tenant or an
Affiliate is not then occupying the entire Premises.
Tenant's rights under this Exhibit shall terminate if (a) this Lease or
Tenant's right to possession of the Premises is terminated or (b) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises, other
than an assignment to an Affiliate.
1 of 2
[DIAGRAM OF FIRST OFFER SPACE ON FIRST FLOOR PLAN]
2 of 2
EXHIBIT H
LETTER OF CREDIT
[BANK LETTERHEAD]
, 1997
IRREVOCABLE, UNCONDITIONAL LETTER OF CREDIT NO.
Archon Group, L.P.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
_________________________________, a national banking association ("Bank"),
of ____________________________, hereby issues its Irrevocable, Unconditional
Letter of Credit in favor of WHC-Six Real Estate, L.P., a Delaware limited
partnership, and/or its successors and assigns ("Landlord") for the account of
Palatin Technologies, Inc., a Delaware corporation, ("Tenant") up to the
aggregate amount of $185,000, available at sight by the drafts of Landlord on
the Bank. Drafts drawn on this Letter of Credit will be honored when presented,
accompanied only by a letter or certificate executed by a representative of
Landlord stating that it is entitled to draw on this Letter of Credit under the
terms of the Lease Agreement, dated as of ____________, 1997, between Landlord
and Tenant. Partial draws shall be permitted hereunder. This Letter of Credit
may be assigned.
The Bank shall be entitled (and required) to rely upon the statements
contained in the above-described letter or certificate and will have no
obligation to verify the truth of any statements set forth therein.
The Bank hereby agrees with drawers, endorsers and bona fide holders of
this Letter of Credit that all drafts drawn by reason of this Letter of Credit
and in accordance with the above conditions, will meet with due honor when
presented at the office of the Bank in ____________________.
The obligations of the Bank shall not be subject to any claim or defense by
reason of the invalidity, illegality or inability to enforce any of the
agreements set forth in the Lease.
This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision) fixed by the International Chamber of
Commerce (publication 400) when not in conflict with the express terms of this
Letter of Credit or with the provisions of Article 5, N.J.S.A. 12A:5- 101 et
seq. of the New Jersey Uniform Commercial Code, as amended.
This Letter of Credit shall terminate at 3:00 p.m. Eastern Daylight Savings
Time or Eastern Standard Time, as applicable, on the first anniversary date
following the date hereof.
Amounts drawn upon this Letter of Credit are to be endorsed on the reverse
side of this Letter of Credit by the negotiating bank.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES THAT MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
---------------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
