EXHIBIT 10.24
Purchase Option Agreement
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This Purchase Option Agreement ("Agreement") is made this 21st day of
July, 1997 by and among The ▇▇▇▇▇▇ Group ("Owner"), and ViroPharma Incorporated
("Option-Holder").
Background
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Owner is the fee title holder of the real property described on
Exhibit A hereto, which property also is known as ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Lot
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#▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ("Real
Property"). Pursuant to a certain Lease dated the date hereof ("Lease"), Owner
leased to Option-Holder a building initially consisting of 48,400 rentable
square feet ("Building") which Owner will construct on the Real Property and
which will be improved with certain tenant improvements ("Tenant Improvements")
required by Option-Holder, the cost of which will partially be funded by Option-
Holder. Owner, subject to Option Holder's rights under the Lease, may expand
the Building to 86,500 rentable square feet.
As a material inducement for Option-Holder to enter into the Lease,
Owner has agreed to grant to Option-Holder a right to purchase the Real Property
and the Building, as expanded, together with all improvements now or hereafter
constructed thereon (collectively, "Option Property"). The parties are entering
into this Agreement to memorialize the terms and conditions upon which Option-
Holder may exercise its purchase option.
NOW, THEREFORE, for and in consideration of $10.00, the receipt and
sufficiency of which hereby is acknowledged, and in consideration of the mutual
undertakings herein set forth, and intending to be legally bound hereby, Owner
and Option-Holder agree as follows:
Agreement
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1. Defined Terms. Capitalized terms not otherwise defined herein
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shall have the meaning set forth in the Lease.
2. Purchase Option.
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a. Owner hereby grants to Option-Holder an option ("Purchase
Option") to purchase the Option Property which, subject to the requirements of
Section 2(c) below, may be exercised by Option-Holder during (1) the fifth (5th)
lease year of the Initial Term of the Lease, and (2) the ten (10th) lease year
of the Initial Term of the Lease (each, "Scheduled Exercise Period").
b. Option-Holder also shall have the right to exercise its
Purchase Option, subject to the requirements of Section 2(c) below, (1) at any
time during the Initial Term
of the Lease following Owner's default thereunder which continues beyond
applicable grace or cure periods following notice where applicable, or (2) upon
a casualty or condemnation of the Option Property which permits the termination
of the Lease ("Lease Termination Event" which is referred to herein together
with each Scheduled Exercise Period as "Option Exercise Event").
c. Option-Holder may exercise its option only by delivering
written notice ("Exercise Notice") to Owner of its exercise of the Purchase
Option (the date of such Exercise Notice being referred to herein as the
"Exercise Date"), which notice shall be delivered not later than six (6) months
prior to the expiration of a Scheduled Exercise Period and not later than thirty
(30) days following a Lease Termination Event, which notice shall restate
Owner's duties pursuant to Sections 6(b), 7(c) and 8 below.
d. Each Exercise Notice shall include Option-Holder's check in
the amount of the Deposit (hereafter defined), which shall be payable to Title
Company (hereafter defined) as escrow agent and held in an interest bearing
escrow account until Closing. Interest earned on the Deposit shall be paid to
the party entitled hereunder to receive the Deposit, and if paid to Owner at
Closing, the full amount thereof shall be credited against the Purchase Price.
3. Option Price.
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a. The purchase price to be paid for the Option Property
("Option Price") shall be the sum of (1) the Base Amount (as hereafter defined)
increased by (2) the CPI Adjustment (hereafter defined).
b. The Option Price shall be calculated in accordance with the
following, with the valuation date being (a) the expiration date of the
Scheduled Exercise Period, if the Purchase Option is exercised pursuant to
Section 2(a) hereof, or (b) the termination date of the Lease if the Purchase
Option is exercised pursuant to Section 2(b) hereof:
(1) The "Base Amount" initially shall be $6,800,000.00
("Initial Base Amount") which is based on an average Minimum Annual Rent over
the Initial Term of the Lease of $625,812 divided by a capitalization rate of
9.203%. The Initial Base Amount shall be adjusted in direct proportion to any
increase or decrease in the Minimum Annual Rent pursuant to Section 3(b)(2) of
the Work Letter attached to the Lease.
(2) The Initial Base Amount shall be increased by the
following:
(a) With respect to any portion of the Expansion Space
leased by Option-Holder pursuant to the Lease or otherwise subject to an
executed lease agreement, the average Minimum Annual Rent or average base rent
payable thereunder over the term of the subject lease, excluding unexercised
renewals, divided by a capitalization rate of 9.203%; and
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(b) With respect to any unleased portion of the
Expansion Space, the following shall apply:
i) If any portion of the Expansion Space is
leased by a party other than Tenant, (A) the base rent payable for office space
over the term of such lease shall be averaged (and, if more than one such lease
shall exist, the average base rent for office space under each lease shall be
averaged); (B) the averaged base rent determined in accordance with provision
(A) shall then be divided by the square footage of the premises so leased; (C)
the averaged based rent per square foot determined in accordance with provision
(B) shall then be multiplied by the square footage of the vacant portion of the
Expansion Space, and (D) the amount determined in accordance with provision (C)
shall then be divided by a capitalization rate of 9.203%; and
ii) If the Expansion Space consists only of
vacant shell space or space not then completed as shell space, Owner's "Cost of
Construction" (defined below) with respect to such portion of the Expansion
Space, subject, however, to the foregoing:
a) Owner demonstrates with evidence
commercially reasonably satisfactory to Option-Holder the Costs of Construction
thereof; and
b) "Cost of Construction" shall mean the
actual cost billed to Owner by its general contractor of supplying all labor and
materials involved to date in the construction of such space, including all
items as are included within the definition of "Cost of the Work" pursuant to
Article 8 of the "American Institute for Architects AIA Document A111 Standard
Form of Agreement Between Owner and Contractor where the basis of payment is the
Cost of the Work Plus a Fee," plus the fee charged to Owner by its general
contractor which shall not exceed ten percent (10%) of the Cost of Construction
(3) The "CPI Adjustment" shall be the percentage change, if
any, in the CPI-U (Philadelphia SMSA) ("CPI Index") as of the month in which the
Exercise Date occurs over the comparable CPI Index in effect, (a) with respect
the Leased Space which is the subject of the Lease on the Commencement Date
hereof, during the month in which the Commencement Date occurs, (b) with respect
to the Expansion Space described above in subsection 2(a), during the month in
which commencement of the lease of the applicable Expansion Space occurs, and
(c) with respect to the Expansion Space described above in subsection 2(b),
during the month in which a certificate of occupancy has been issued for such
Expansion Space. The applicable CPI Adjustment shall be applied to each lease of
the Leased Space and Expansion Space, any vacant portion of the Expansion Space,
the Minimum Annual Rent, base rent or construction cost which are utilized in
calculating the Base Amount in accordance with clause (1) above.
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(4) If the CPI Index should be discontinued at any time
during the effectiveness of this Agreement, Owner shall select a substitute
index which most closely approximates the CPI Index and which is reasonably
acceptable to Option-Holder. Upon agreement as to such substitute index, all
references to CPI Index shall be deemed to refer thereto. If the CPI Index shall
not be published for the month required for comparison hereunder, the CPI Index
published for the month closest and prior thereto shall be used.
c. If the Purchase Option has been exercised pursuant to
Section 2(b)(1) above, any fee due to a mortgage holder in connection with
prepayment of any loan secured by mortgage on the Option Property ("Prepayment
Fee") shall be Owner's sole liability. If, however, the Purchase Option has been
exercised pursuant to Section 2(b)(2) above, the Option Price shall include the
Prepayment Fee due in connection with any mortgage encumbering the Option
Property. Owner, however, hereby agrees to use commercially reasonably efforts
to have each mortgage which encumbers the Option Property permit prepayment upon
a casualty or condemnation without the payment of any Prepayment Fee.
4. Payment of the Option Price. The Option Price shall be paid to
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Option-Holder to Owner as follows:
a. Fifty Thousand Dollars ($50,000) ("Deposit") shall be paid
to Title Company as escrow agent, who shall deliver the Deposit to Seller at
Closing (which amount is separate from and in addition to the Security Deposit
paid by Option-Holder under the Lease);
b. The Security Deposit paid under the Lease not otherwise
utilized by Landlord pursuant to the Lease shall be retained by Seller and
credited against the Option Price; and
c. An amount equal to the Option Price less amounts paid
pursuant to subsections (a) and (b) above shall be paid to Seller on the Closing
Date by wire transfer of immediately available funds, certified check, title
company check or cashier's check.
5. Closing.
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a. Within ninety (90) days from the Commencement Date of the
Lease, Owner shall notify Option-Holder in writing of the permitted date or
dates of Closing (hereafter defined) if Option-Holder exercises its Purchase
Option pursuant to Section 2(a)(1) hereof, the latest of which permitted dates
shall not be later than five (5) years plus ninety (90) days from the
Commencement Date ("First Scheduled Closing Date"). If Owner has provided such
notification and Option-Holder exercises its Option pursuant to Section 2(a)(1)
above, settlement on the sale of the Option Property from Owner to Option-Holder
("Closing") shall be held on the First Scheduled Closing Date. If Owner shall
have failed to provide notice as required by this section, the date for Closing
shall be determined in accordance with Subsection (c) below.
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b. If Option-Holder has not exercised its Purchase Option
during the period contemplated by Section 2(a)(1) above, then, within ninety
(90) days from the fifth (5th) anniversary of the Commencement Date of the
Lease, Owner shall notify Option-Holder in writing of the permitted date or
dates of Closing if Option-Holder exercises its Purchase Option pursuant to
Section 2(a)(2) hereof, the latest of which permitted dates shall not be later
than five (5) years plus ninety (90) days from the fifth (5th) anniversary of
the Commencement Date ("Second Scheduled Closing Date"). If Owner has provided
such notification and Option-Holder has exercised its Option pursuant to Section
2(a)(2) above, Closing shall be held on the Second Scheduled Closing Date and
the Lease shall be deemed to continue through the Second Scheduled Closing Date.
If Owner shall have failed to provide notice when required by this section, the
date for Closing shall be determined in accordance with Subsection (c) below.
c. If Owner shall have failed to provide the notice required by
Subsections (a) or (b) above and Option-Holder has exercised its Option pursuant
to Section 2(a) above (as applicable), or if Option-Holder has exercised its
Option pursuant to Section 2(b) above, Closing shall be the later of ninety (90)
days after (A) the Exercise Date or (B) the expiration of the Scheduled Exercise
Period, as applicable.
d. Closing shall be held on the designated date at a time and
at such location as is mutually acceptable to Owner and Option-Holder. Except as
provided in Sections 3(c) hereof, Option-Holder shall have no liability for any
Prepayment Fees in connection with any Closing determined in accordance with
this Section.
6. Due Diligence Period.
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a. Option-Holder shall have thirty (30) days from the Exercise
Date ("Due Diligence Period") to conduct due diligence on the Option Property,
including without limitation structural and systems inspections, environmental
inspections and, if tenants other than Option-Holder occupy any part of the
Option Property, review of Owner's books and records relating to the Option
Property. Owner shall afford Option-Holder and its consultants free access to
the Option Property to perform any and all studies and test in connection with
its due diligence, including without limitation boring and samples as part of
environmental investigation. If Option-Holder is dissatisfied with its due
diligence for any reason whatsoever other than a condition caused by Option-
Holder's occupancy of the Option-Property or otherwise the responsibility of
Option-Holder under the Lease, Option-Holder, by written notice ("Withdraw
Notice") to Owner delivered on or prior to the expiration of the Due Diligence
Period, may withdraw its exercise of the Purchase Option without liability, in
which case the Deposit shall be returned to Option-Holder. Option-Holder's
withdrawal of its exercised Option shall be subject to Option-Holder's rights
under Section 15 hereof if Option-Holder so designates in the Withdraw Notice
and identifies therein the basis for Option-Holder's withdrawal of its Exercise
Notice. If Option-Holder withdraws the Exercise Notice, Option-Holder, at
Option-Holder's expense, promptly shall restore any disturbance or damage to the
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Option Property caused by Option-Holder or its agents in the undertaking of
Option-Holder's rights hereunder.
b. Within five (5) business days of the Exercise Date, Owner
agrees to deliver to Option-Holder copies of contracts or commitments for
construction, labor or services entered by or at the direction of Owner with
respect to the Option Property ("Service Contracts") and copies of all leases
entered by Owner with respect to the Option Property other than the leases
entered with Option-Holder ("Other Leases"), and such rent rolls and operating
statements with respect to the Option Property as are reasonably available to
Owner. Option-Holder agrees to keep all such information confidential and
promptly return same to Owner if this Agreement is terminated for any reason.
Such obligation shall survive the termination of this Agreement, notwithstanding
any provision hereof to the contrary. Owner hereby covenants that during the
effectiveness of this Agreement no Service Contract shall be entered which is
not terminable on the Closing Date without expense to Option-Holder. Option-
Holder shall identify to Owner in writing on or prior to the expiration of the
Due Diligence period which of the Service Contracts Option-Holder desires to
assume, and Owner shall cause all other Service Contracts to be terminated as of
the Closing Date at no expense to Option-Holder.
c. Option-Holder assumes all risk and liability for injury to
persons and property in connection with the exercise of Option-Holder's rights
under this Section and agrees to indemnify, defend and hold harmless Owner from
any such claims or liability. Option-Holder's obligations under this Section
shall survive the termination of this Agreement, notwithstanding any provision
hereof to the contrary.
7. Title and Survey.
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a. Title at Closing. Owner shall convey to Option-Holder good
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and marketable title of record to the Option Property, which is insurable as
such at regular rates by Option-Holder's designated title company ("Title
Company") which shall be Lawyers Title Insurance Corporation or such other
reputable title insurance company selected by Option-Holder as is authorized to
do business in the Commonwealth of Pennsylvania. Title shall be subject only to
the Permitted Title Exceptions which shall include, for purposes of this
Agreement (1) all matters identified on Exhibit B attached hereto, (2) all
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easements and amendments to Covenants (as defined in the Lease) granted in
accordance with Section 52(a) of the Lease, and (3) all matters determined in
accordance with subsections (b), (c) and (d) below.
b. Title Report. On or before thirty (30) days after the
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Exercise Date ("Title Examination Period"), Option-Holder shall furnish to Owner
a title report ("Title Report") issued by Option-Holder's designated title
company, giving the then current condition of title to the Option Property and
any objections of Option-Holder to matters in the Title Report other than the
Permitted Title Exceptions determined under subsections (a)(1) and (a)(2) above.
Matters identified by the Title Report and not objected to by Option-Holder on
or before the end of the Title Examination Period shall be deemed to be
"Permitted Title Exceptions."
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c. Survey. On or before five (5) days after Exercise Date,
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Owner, at Owner's expense, shall provide Option-Holder with copies of any and
all surveys of the Option Property which Owner has in its possession. Option-
Holder, at Option-Holder's expense, shall have the right to obtain an on-the-
ground staked survey of the Option Property which (1) has been prepared in
accordance with the American Land Title Associations Specifications, (2) has
been prepared by a land surveyor duly licensed in the Commonwealth of
Pennsylvania selected by Option-Holder, and (3) is sufficient to cause Option-
Holder's title company to (A) delete the pre-printed survey exceptions from
Option-Holder's title policy and (B) not take exception for items which are not
Permitted Title Exceptions. Prior to the expiration of the Title Examination
Period, Option-Holder shall notify Owner in writing of any objections to matters
revealed by such survey other than the Permitted Title Exceptions determined
under subsections (a)(1) and (a)(2) above. Matters identified by such survey and
not objected to by Option-Holder on or before the end of the Option Examination
Period shall be deemed to be "Permitted Title Exceptions."
d. Objections. Owner will notify Option-Holder in writing
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whether Owner is unable or unwilling to cure to Option-Holder's satisfaction any
title or survey objections (other than the Permitted Title Exceptions) raised by
Option-Holder ("Title Problems"), which notice shall restate the effect set
forth in this Section of Owner's failure to respond in accordance with this
Section. Owner shall be obligated to remove and discharge of record or otherwise
cure to Option-Holder's satisfaction all Title Problems (other than matters
which existed of record prior to the commitment date of Option-Holder's title
commitment issued by Lawyers Title Insurance Corporation under commitment number
LIT-97-14739 excluding monetary liens and judgments for which Owner is
responsible) which have timely been raised by Option-Holder and which are liens
in a fixed or ascertainable amount or result from Owner's actions. Owner's
failure to deliver such notice to Option-Holder within ten (10) business days
after delivery of Option-Holder's notice of Title Problems shall be deemed
Owner's refusal to cure all of the Title Problems by the Closing Date,
excluding, however, those Title Problems which Owner is obligated hereunder to
cure. If Owner has not agreed to cure all Title Problems other than those which
Owner is obligated hereunder to cure, Option-Holder shall have ten (10) business
days from receipt of Owner's notice (or, if Owner has failed to give notice,
fifteen (15) days from delivery of Option-Holder's notice of Title Problems)
either (1) to withdraw, without liability, its exercise of the Purchase Option
by notice in writing to Owner delivered prior to the expiration of such fifteen
(15) day period, or (2) to accept such title as Owner can deliver without
reduction or abatement of the Option Price except to the extent of Title
Problems which Owner is obligated hereunder to cure. Option-Holder's failure to
timely deliver notice of termination shall be deemed Option-Holder's agreement
to accept such title as Owner can deliver without reduction or abatement of the
Option Price except to the extent of Title Problems which Owner is obligated
hereunder to cure.
e. Failure of Owner to Cure Title Problems. If, on of before
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the Closing Date, Owner shall fail to cure those of the Title Problems which
Owner has agreed to
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cure or is obligated hereunder to cure, Option-Holder, as its sole and exclusive
remedy, shall have the right: (1) to withdraw, without liability, its exercise
of the Purchase Option by notice in writing to Owner, subject, however, to
Option-Holder's rights under Section 15 hereof, and, notwithstanding any
provision of the Lease to the contrary, recover from Owner personally all of
Option-Holder's reasonable actual third party costs arising from its exercise of
the Purchase Option, based upon third party invoices delivered by Option-Holder
to Owner not later than thirty (30) days after the failure of Owner to cure,
(2) to accept such title as Owner can deliver without reduction or abatement of
the Option Price except to the extent of Title Problems which Owner is obligated
hereunder to cure, or (3) to enforce the specific performance of Owner's
agreement to cure the Title Problems.
8. Representations and Warranties. Within ten (10) business days
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after the Exercise Date, Owner shall confirm to Option-Holder in writing that
the representations and warranties set forth in Section 46 of the Lease remain
true, complete and correct or set forth in reasonable detail any circumstances
which make such representations and warranties untrue, incomplete or incorrect.
If any such qualification to the representations and warranties shall, in
Option-Holder's sole discretion, materially and adversely affect the subject
Option Property or Option-Holder's intended use thereof or if Owner shall fail
to provide such written confirmation, Option-Holder shall have the right to
withdraw, without liability, its exercise of the Purchase Option, subject,
however, to Option-Holder's rights under Section 15 hereof.
9. Condition of the Option Property. The Option Property shall be
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delivered to Option-Holder on the Closing Date in the same condition which
existed on the Exercise Date, except for (1) reasonable wear and tear, (2)
consequences of condemnation or casualty to the extent repair, restoration or
cure is not required under the Lease, (3) damage caused by Option-Holder, its
agents or employees. Subject to the foregoing, Owner shall be responsible to
deliver the Option Property in compliance with all environmental legal
requirements relating to conditions which are (1) existing at the Option
Property on the Exercise Date and which are not Option-Holder's responsibility
under the Lease or (2) caused thereafter, but prior to the Closing Date by acts
or omissions of Owner, its affiliates or their respective employees, agents,
contractors, licensees or invitees. Any remediation required by governmental
agencies to meet the requirements of the preceding sentence shall be performed
by Owner in accordance with all applicable laws prior to the Closing Date.
10. Damage or Destruction of Option Property by Casualty or
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Condemnation. Owner and Option-Holder agree that, except as hereafter modified,
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the Lease provisions for the portions of the Option Property which are leased by
Option-Holder shall govern their respective obligations if, after Option-
Holder's exercise of the Purchase Option, any portion of the Option Property is
damaged or destroyed by fire or other casualty or subjected to eminent domain
proceedings (together, "Casualty"). If the Lease shall be terminated as a
result of a Casualty, Option-Holder shall have the option either (a) to
purchase the Option Property in its "as is" condition, in which case no
adjustment shall be made to the Option Price other than a credit to Option-
Holder for the amount of Owner's insurance deductible and all insurance proceeds
or
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condemnation award ("Casualty Compensation"), as applicable, received by Owner
prior to such Closing Date and Owner shall assign to Option-Holder all of
Owner's rights to such insurance Casualty Compensation, or (2) to terminate its
exercise of the Purchase Option in which case this Agreement shall be null and
void and neither party shall have any further rights or obligations hereunder.
If, however, any mortgagee of the Option Property requires that Casualty
Compensation be applied against outstanding indebtedness secured by its
mortgage, Option-Holder shall be entitled to a credit against the Purchase Price
in the amount of the Casualty Compensation not received by Option-Holder.
11. Closing Obligations. On the Closing Date,
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a. Owner's Closing Deliveries: Owner shall:
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(1) Deed. Execute, acknowledge, and deliver to Option-
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Holder a special warranty deed for the Option Property ("Deed") in proper form
for recording, conveying title to the Option Property as required by this
Agreement;
(2) Assignment of Leases and Service Contracts. Execute
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and deliver to Option-Holder an assignment and assumption agreement ("Assignment
of Leases and Contracts") with respect to all of the Other Leases (including
security deposits paid by tenants under such leases) and all Service Contracts
which Option-Holder has agreed to assume, the form of which agreement shall be
reasonably acceptable to Option-Holder and Owner and which shall provide that
(A) Option-Holder assumes performance of all obligations so assigned which arise
after Closing and agrees to indemnify, defend and hold harmless Owner from
liability with respect thereto and (B) Owner agrees to indemnify, defend and
hold harmless Option-Holder from liability with respect to such assigned
obligations which relates to all periods prior to Closing;
(3) Certified Rent Roll and Option-Holder Estoppel
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Certificates. Deliver to Option-Holder a rent roll which identifies all of the
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Other Leases then in effect, the commencement and termination dates of each
lease, the security deposit paid by each tenant thereunder, and the current rent
due from each tenant thereunder, and (B) estoppel certificates from each tenant
under the Other Leases which shall be in form and substance reasonably
acceptable to Option-Holder and its lender;
(4) Termination of the Lease. Execute and deliver to
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Option-Holder a Termination of Lease Agreement which confirms that the Lease
between Owner and Option-Holder has terminated (other than the indemnification
provisions thereunder which shall survive such termination with respect to acts
and omissions during the term of the Lease) and provide a mutual release by
Owner and Option-Holder with respect thereto, or which identifies outstanding
claims which either party may have against the other, the form of which shall be
reasonably acceptable to Option-Holder and Owner;
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(5) Evidence of Authority. Deliver to Option-Holder and
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the Title Company evidence reasonably satisfactory to Option-Holder and the
title company that (A) Owner has the authority to execute and deliver the Deed
and all other documents to be executed and delivered by Owner at the Closing;
(B) the persons executing the Deed and such other documents on behalf of Owner
have full right, power and authority to do so; and (C) that all necessary action
on the part of Owner has been taken with respect to the valid execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby;
(6) Keys. Deliver to Option-Holder all keys and alarm
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combinations to the Option Property;
(7) Plans and Building Approvals. Deliver to Option-
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Holder all plans, approvals and permits in its possession in connection with
construction of the Building;
(8) Title Affidavits. Deliver to title company any normal
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and customary, reasonable certificates, affidavits, or other documents as may be
required by the title company to issue an owner's title policy;
(9) FIRPTA Affidavit. Deliver to Option-Holder the
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certifications required by Section 1445 of the Internal Revenue Code;
(10) Municipal Certificates. Deliver to Option-Holder any
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municipal certifications which are required as a condition to the transfer of
title to the Option Property; and
(11) Miscellaneous. Deliver such other assignments,
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affidavits and documents as may be required pursuant to the provisions hereof or
mutually agreed by counsel for Owner and Option-Holder to be necessary to fully
consummate the transaction contemplated hereby.
b. Option-Holder's Deliveries. At Closing, Option-Holder
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shall:
(1) Evidence of Authority. Deliver to Owner evidence that
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(A) Option-Holder has the authority to execute and deliver all documents to be
executed and delivered by Option-Holder at the Closing, (B) the persons
executing the documents on behalf of Option-Holder have the full right, power
and authority to do so; and (C) all necessary action on the part of Option-
Holder has been taken with respect to the valid execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby;
(2) Assignment of Leases. Execute and deliver to Owner
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the Assignment of Leases and Contracts, thereby assuming all obligations of
Owner with respect to the agreements so assigned and security deposits under the
assigned leases;
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(3) Purchase Price. Deliver the Option Price required
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hereunder, either by certified check or wire transfer of immediately available
funds, as Owner may direct; and
(4) Miscellaneous. Deliver such other assignments,
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affidavits and documents as may be required pursuant to the provisions hereof or
mutually agreed by counsel for Owner and Option-Holder to be necessary to fully
consummate the transaction contemplated hereby.
c. Amounts Claimed as Off-Set under the Lease. If on the
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Closing Date, Option-Holder alleges that amounts are due from Owner for
nonperformance of Owner's obligations as lessor under the Lease and Option-
Holder shall have theretofore given Owner notice of such default to the extent
required under the Lease, Option-Holder shall pay the portion of the Purchase
Price equal to the amounts claimed due into an escrow account maintained by
Title Company or such other party who is acceptable to Owner and Option-Holder
to serve as escrow agent; provided, however, that the amounts claimed due are
supported by reasonable evidence of the costs incurred by Option-Holder with
respect Owner's alleged nonperformance. The party performing the duties of
escrow agent shall hold such amounts in an interest bearing escrow account (with
interest to follow the escrowed funds) until (1) receipt of a final order by a
court of competent jurisdiction which directs application of such escrow funds,
or (2) receipt of written instructions signed by Owner and Option-Holder which
direct application of such escrow funds, and, upon receipt of either of the
foregoing, the party performing the duties of escrow agent shall release the
escrowed funds in accordance with such instructions.
12. Transfer Taxes; Closing Costs; Allocation.
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a. Owner's Costs. Owner shall pay the costs of (1) one-half of
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all transfer taxes, and (2) one-half of the fee of the title company to conduct
closing, not in excess of a total fee of $250.
b. Option-Holder's Costs. Option-Holder shall pay the costs of
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(1) the Title Report and Survey, if any, (2) the premium for an owner's title
policy, if obtained by Option-Holder, (3) one-half of all transfer taxes, (4)
recording the Deed, and any other conveyance documents that Option-Holder may
choose to record, and (5) one-half of the fee of the title company to conduct
closing, not in excess of a total fee of $250.
c. Other Costs. All other expenses incurred by Option-Holder
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or Owner with respect to the closing, including, but not limited to, attorneys
fees, shall be borne and paid exclusively by the party incurring same.
d. Proration and Expenses. The following items shall be
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adjusted or prorated between Option-Holder and Owner at closing and, for
purposes hereof, Option-Holder shall be deemed the owner of the Option Property
as of the Closing Date:
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(1) Real Estate Taxes. Real estate and similar taxes for
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the then current tax year relating to the Option Property shall be prorated. If
the Closing Date shall occur before the tax rate is fixed for the then current
tax year, the apportionment of taxes shall be made on the basis of the tax rate
for the preceding tax year applied to the latest assessed valuation of the
Option Property, and when the tax rate is fixed for the tax year in which the
Closing Date occurs, Owner and Option-Holder to adjust the proration of taxes
and, if necessary, to refund or pay such sums to the other party as shall be
necessary to effect such adjustment. This obligation shall survive closing of
title.
(2) Assessments. All unpaid installments of assessments
-----------
for municipal improvements, if any, which are due and payable before the
closing, shall be paid by Owner at the closing. From and after the Closing Date,
Option-Holder shall be solely responsible for payment of any such assessments.
(3) Prepaid Rent. All rent (including each tenant's
------------
payment of operating expenses) paid by tenants under the Other Leases and by
Option-Holder under the Lease, shall be prorated and Owner shall credit to
Option-Holder all rent allocated to the Closing Date and periods thereafter
which has been collected from tenants and Option-Holder.
(4) Utilities and Service Contracts. Any operating
-------------------------------
expenses for or pertaining to the public utility charges and service contracts
shall be prorated between Option-Holder and Owner at the closing.
13. Assignment of Purchase Option. Option-Holder shall have the
------------------------------
right to transfer or assign ("Transfer") any or all of its rights under this
Agreement in connection with an assignment of the Lease which is permitted by
the Lease.
14. Default.
-------
a. Default. Either party shall be in default hereunder if such
-------
party fails to fulfill in a timely manner any covenant, agreement, or obligation
on such party's part in the manner required in this Agreement or breaches any
representations or warranties made by such party hereunder.
b. Notice Upon Default. With the exception of a default by
-------------------
either party in concluding Closing, before either party shall be entitled to
declare this Agreement in default, the party who alleges a default by the other
party first shall have notified the party alleged to be in default in writing as
to the nature of the claimed default, and the party alleged to be in default
shall have fifteen (15) days after receipt of such notice in which to cure the
default.
c. Owner's Remedies. If after the exercise by Option-Holder,
----------------
all of the conditions to Option-Holder's obligations have been satisfied or
properly waived by Option-
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Holder, Option-Holder shall be in default hereunder beyond the period provided
in subsection (b) above, Owner's sole and exclusive remedies shall be (1) to
terminate this Agreement, and (2) to retain from the Deposit (and not to exceed
the Deposit) the amounts hereafter provided, with the balance of the Deposit, if
any, being returned to Option-Holder, whereupon neither party shall have any
further rights or liabilities hereunder, and (3) to exercise its rights pursuant
to Section 16(l) hereof. Amounts which Owner shall be permitted to deduct from
the Deposit are (i) all reasonable, actual third-party costs arising from
Owner's performance of this Agreement, based upon invoices of third parties
submitted by Owner to Option-Holder not later than ninety (90) days after the
termination of this Agreement and (ii) any late fee, extension fee and/or the
present values of any differential in the interest rate applicable to Owner's
refinancing of loans secured by a mortgage on the Option Property on the date of
Option-Holder's default and which would have been satisfied at Closing and which
Owner replaces at an interest rate in excess of the interest rate prevailing for
five (5) year loans on the date at which the Closing would have occurred had
Option-Holder not defaulted.
d. Option-Holder's Remedies. If all of the conditions to
------------------------
Owner's obligations have been satisfied or properly waived by Owner, Owner is in
default in the performance of its obligations hereunder beyond the period
provided in subsection (b) above, Option-Holder's sole and exclusive remedy
hereunder (except as may be permitted under Section 7(e) hereof) shall be
either: (i) to seek specific performance of this Agreement; or (ii) to terminate
this Agreement by notice in writing to Owner, in which case the Deposit shall be
returned to Option-Holder and Owner shall reimburse Option-Holder for all
reasonable, actual third-party costs arising from Option-Holder's performance of
this Agreement, based upon invoices of third parties submitted by Option-Holder
to Owner not later than ninety (90) days after the termination of this
Agreement, whereupon neither party shall have any further rights or liabilities
hereunder.
e. Attorney's Fees. In any action or proceeding arising out of
---------------
this Agreement, the prevailing party shall be entitled to reasonable attorney
fees and costs.
15. Resurrection of Withdrawn Rights. If Option-Holder withdraws an
--------------------------------
Exercise Notice for reasons set forth under Sections 7(e) or 8 hereof, or for
reasons under Section 6 hereof by a Withdraw Notice which specifies the reasons
for such withdraw, and Owner thereafter during the effectiveness of the Lease,
corrects the condition which triggered Option-Holder's withdraw of an Exercise
Notice, Owner shall notify Option-Holder that the condition has been corrected
which notice shall be provided not later than ten (10) business days after the
correction of such condition and include a reasonable statement of the
corrective action taken by Owner. Option-Holder shall have thirty (30) days
from receipt of Owner's notice to re-exercise its Purchase Option. If Option-
Holder fails to re-exercise the Purchase Option within such thirty (30) day
period, Option-Holder's rights hereunder shall be terminated and deemed null and
void, whereupon Owner shall be entitled to record the termination of the
memorandum of this Agreement. If Option-Holder timely re-exercises its Purchase
Option, the Closing Date shall be determined in accordance with Section 5(c)
above, and unless the condition which prompted
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Option-Holder's withdrawal of its Exercise Notice arose from the gross
negligence or wanton and wilful misconduct of Owner, or Owner's employees or
agents, Option-Holder shall pay as part of the Purchase Price any Prepayment Fee
due with respect to a first mortgage encumbering the Option Property.
16. Miscellaneous.
-------------
a. Time of the Essence. Time is of the essence for performance
-------------------
of all obligations hereunder.
b. Broker's Commission. Each party represents and warrants to
-------------------
the others that it has incurred no liability to any real estate broker or agent
with respect to the payment of any commission regarding the consummation of the
sale of the Option Property. If any claims for commissions or fees are ever made
in connection with sales of the Option Property, all such claims shall be
handled and paid by the party whose actions or alleged commitments form the
basis of such claim, and such party shall indemnify, defend and hold harmless
the other from and against any and all such claims or demands.
c. Further Assurances. The parties shall execute and deliver
------------------
such additional documents and shall take such additional action or cause such
additional action to be taken, or to refrain from taking any action as may be
reasonably required to effect or implement all of the terms and conditions of
this Agreement and the transactions contemplated hereby.
d. Notices. Any notice or other communication under this
-------
Agreement shall be in writing and addressed to Owner or Option-Holder at their
respective addresses set forth below (or to such other address as either may
designate by notice to the other):
As to Option-Holder prior to
Commencement Date of the Lease: ViroPharma Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
As to Option-Holder as of the
Commencement Date of the Lease: ViroPharma Incorporated
Eagleview Corporate Center
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
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As to Owner: The ▇▇▇▇▇▇ Group
▇.▇. ▇▇▇ ▇▇▇
717 Constitution Drive
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All notices and statements required or permitted under this Agreement shall be
in writing and delivered by either (a) United States Registered or Certified
Mail, return receipt requested, postage prepaid, (b) Federal Express or other
nationally recognized overnight courier service, fee prepaid, or (c) hand
delivery against written receipt therefor. Notice given in accordance with this
Section shall be deemed given and received as of the earlier of (i) actual
receipt or (ii) first attempted delivery (including delivery which is refused).
The giving of notice under this Section by attorneys of Owner or Option-Holder
shall be deemed to be the acts of Owner or Option-Holder, as applicable,
however, the foregoing provisions governing the date on which a notice is deemed
to have been received shall mean and refer to the date on which a party to this
Agreement, and not its counsel or other recipient to which a copy of the notice
may be sent, is deemed to have received the notice.
e. Binding Effect. This Agreement shall be binding upon and
--------------
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
f. Recording. A short form memorandum of this Agreement shall
---------
be recorded at Option-Holder's expense. Concurrently with the execution of this
Agreement, Option-Holder and Owner agree to execute such memorandum of this
Agreement along with a termination thereof, both of which shall be form and
substance sufficient to permit such instrument to be recorded and otherwise
reasonably acceptable to Option-Holder and Owner. The termination of such
memorandum of this Agreement shall be provided to Owner who hereby represents,
warrants and covenants not to record such termination unless and until this
Agreement shall have terminated.
g. Severability. Any provision of this Agreement which is
------------
determined by a court of competent jurisdiction to be invalid or unenforceable
shall be ineffective only to the extent of such invalidity or unenforceability
and shall not invalidate or render unenforceable the remaining provisions of
this Agreement, and this Agreement shall be construed to the fullest extent
permitted by law in such manner as to carry out the intent of this Agreement and
of the provision so deemed invalid or unenforceable.
h. Applicable Law. This Agreement shall be construed under and
--------------
in accordance with the laws of the Commonwealth of Pennsylvania.
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i. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original and all of which,
when taken together, shall constitute one fully binding Agreement even though
all original signatures do not appear on the same document.
j. Merger at Closing. All representations and warranties set
-----------------
forth in this Agreement shall terminate at Closing and be merged into the Deed
except for obligations under Sections 6, 12 and 16(b) hereof which shall survive
Closing. Option-Holder acknowledges that it will have exercised the Purchase
Option, and purchase the Option Property, if at all, only after having had the
opportunity to inspect and examine the Option Property pursuant to Section 6
above. Accordingly, Option-Holder acknowledges and agrees that its decision to
purchase the Option Property is as a result of its own independent investigation
and inspection, and not as a result of or in reliance upon any representation or
warranty made or alleged to have been made by Owner, or any of Owner's agents
and representatives, except for such express warranties as may be contained in
the Lease or this Agreement.
k. Notice Restatements of Owner's Obligations. Option-Holder's
------------------------------------------
failure to include a restatement of Owner's obligations in its notices to Owner
as contemplated by Sections 2(c) and 7(d) hereof shall not be deemed a default
by Option-Holder nor a failure of Owner's obligations with respect to the
subject obligations. If, however, Option-Holder shall fail to include such
restatement of Owner's obligations and Owner shall not perform within the time
periods set forth in this Agreement, the consequences set forth in Sections 2
and 7, as applicable, as a result of Owner's failure to respond shall not be
binding on Owner unless and until Option-Holder shall have sent written notice
to Owner that Owner's response is due and Owner shall not have responded
thereafter within the times for performance required under Sections 2 and 7, as
applicable.
l. Lease for Expansion Space. If Option-Holder has exercised
-------------------------
its Purchase Option and Option-Holder's rights under Section 46 of the Lease
have terminated in
[Remainder of page intentionally is blank.]
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their entirety or only as to the Released Area, Owner shall not enter into any
leases for all or any portion of the vacant Expansion Space or Released Area (as
the case may be) until the expiration of the Due Diligence Period and thereafter
only with Option-Holder's prior written consent thereto. If Option-Holder
denies its consent to any lease proposed by Owner, the terms of which are
evidenced by a letter of intent signed by Owner and the proposed lessee which
sets forth in reasonable detail the terms of such lease ("Proposed Lease"), the
following shall apply:
(1) If Option-Holder thereafter defaults with respect to
its Purchase Option, Option-Holder shall be obligated to lease from Owner the
space contemplated by the Proposed Lease on the same terms and conditions as
were presented to Option-Holder for its consent; and
(2) If Option-Holder thereafter withdraws an Exercise
Notice or terminates its exercise of the Purchase Option and the reason such
Exercise Notice is withdrawn or the Purchase Option is terminated is due to a
condition other than one which results from Owner's action, Option-Holder shall
be obligated to lease from Owner the space contemplated by the Proposed Lease on
the same terms and conditions as were presented to Option-Holder for its consent
except that (A) the term of such lease shall not exceed one (1) year, and (B)
Owner shall be obligated to use commercially reasonably efforts to find a
replacement tenant or tenants for the space so leased by Option-Holder.
Unless otherwise agreed by Owner and Option-Holder such lease shall be effective
as of the date of Option-Holder's default or withdrawal.
m. Complete Agreement; Modifications. This Agreement is the
---------------------------------
complete Agreement of the parties hereto. Neither this Agreement nor any
provision hereof may be waived, modified, discharged, or terminated except by an
instrument in writing signed by the party against which the enforcement of such
waiver, modification, discharge, or termination is sought, and then only to the
extent set forth in such instrument
IN WITNESS WHEREOF, Owner and Option-Holder have caused this Agreement
to be duly executed under seal as of the date set forth above.
THE ▇▇▇▇▇▇ GROUP
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Partner
VIROPHARMA INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Director,
Counsel and Secretary
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