EXHIBIT 10.16

LEASE

AGREEMENT

between

AMLI LAND DEVELOPMENT - I

LIMITED PARTNERSHIP

Landlord

and

CRYOLIFE, INC.

Tenant

April 18, 1995

 

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TABLE OF CONTENTS

 

Section				Page
1.		DEFINITIONS		1
2.		AGREEMENT TO LEASE		6
3.		COMMENCEMENT DATE		6
4.		RENT		6
5.		BASE RENT		7
6.		TAX RENT AND ASSESSMENTS		7
7.		RESPONSIBILITY FOR MAINTENANCE, REPAIR AND OPERATIONS		10
8.		SERVICES		15
9.		USE		15
10.		DISCLAIMER OF WARRANTIES		16
11.		POSSESSION		17
12.		ASSIGNMENT AND SUBLETTING		17
13.		LANDLORD’S ACCESS TO THE PREMISES		19
14.		ALTERATIONS		19
15.		CERTAIN RIGHTS RESERVED BY LANDLORD		21
16.		COVENANT AGAINST LIENS		22
17.		WAIVER OF CLAIMS; INDEMNIFICATION		23
18.		NON-WAIVER		23
19.		REMEDIES		24
20.		SURRENDER OF POSSESSION		26
21.		HOLDING OVER		27
22.		INSURANCE		27
23.		CASUALTY		30
24.		CONDEMNATION		34
25.		EITHER PARTY’S PERFORMANCE OF THE OTHER PARTY’S OBLIGATIONS		38
26.		NOTICES		38
27.		ADDITIONAL COVENANTS OF TENANT		39
28.		ESTOPPEL CERTIFICATE		41
29.		SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE		41

 

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30.		DEFINITION OF LANDLORD		42
31.		REAL ESTATE BROKER		42
32.		TENANT’S FINANCIAL STATEMENTS		42
33.		HAZARDOUS MATERIALS		42
34.		QUIET ENJOYMENT		44
35.		MISCELLANEOUS		44
36.		SECURITY DEPOSIT		46
37.		EXTENSION OPTION		46
38.		EXPANSION OPTION (FOR ADDITIONAL 40,000 SQUARE FEET IN THE FACILITY)		47
39.		EXPANSION OPTION (SECOND BUILDING)		48
40.		FINANCIAL COVENANTS OF TENANT		49
41.		RENTAL ABATEMENT		49
42.		REQUIRED LICENSES AND PERMITS		50
43.		DESIGN AND MOVING ALLOWANCES		50

EXHIBITS :

 

A.		LEGAL DESCRIPTION OF THE PREMISES
B.		SCHEDULE OF BASE RENT PAYMENTS
C.		FORMS OF ESTOPPEL LETTER
D.		SCHEDULE OF HAZARDOUS MATERIALS
E.		FORM OF MEMORANDUM OF LEASE
F.		DEPICTION OF ADJACENT LAND

 

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LEASE

THIS LEASE (“Lease”) is entered into as of the 18th day of April, 1995 by and between AMLI LAND DEVELOPMENT - I LIMITED PARTNERSHIP, an Illinois limited partnership, whose address is c/o Amli Realty Co., 2100 RiverEdge Parkway, Suite 420, Atlanta, Georgia 30328 (together with its successors and assigns, “ Landlord ”) and CRYOLIFE, INC., a Florida corporation, whose address is 2211 New Market Parkway, Suite 142, Marietta, Georgia 30067 (together with its permitted successors and assigns “ Tenant ”).

1. DEFINITIONS . The following terms shall have the definitions set forth after them below:

Additional Rent : All amounts due from Tenant to Landlord or otherwise payable by Tenant under this Lease, other than Base Rent, including, without limitation, Tax Rent and Assessments.

Anticipated Commencement Date : the meaning provided in Section 3 hereof.

Architect : Masterson, Fowler Assoc. Ltd.

Assessment Notice : the meaning provided in Section 6.2 hereof.

Assessments : dues, assessments and other charges which may be levied against the Premises or any portion thereof from time to time by the Association under the Declaration.

Association : the Barrett Master Association, Inc., a Georgia not-for-profit corporation.

Base Net Worth : the meaning provided in Section 40 hereof.

Base Rent : the Base Rent Rate for each Lease Year, multiplied by the number of square feet of Net Rentable Area of the Facility.

Base Rent Rate : the meaning provided in Section 5 hereof.

Casualty : the meaning provided in Section 23 hereof.

Casualty-Related Improvements : all capital improvements made as part of any Casualty Restoration.

Casualty Restoration : the meaning provided in Section 23 hereof.

Commencement Date : the meaning provided in Section 3 hereof.

Condemnation : the meaning provided in Section 24 hereof.

Condemnation-Related Improvements : all capital improvements made as part of any Condemnation Restoration.

Condemnation Restoration : the meaning provided in Section 24 hereof.

 

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County : Cobb County, Georgia.

Declaration : that certain Declaration of Protective Covenants for Barrett dated as of May 18, 1987 and recorded in the Cobb County records on May 18, 1987 in Deed book 4474, Page 423, as the same has been and may be amended or supplemented from time to time.

Default : the meaning provided in Section 19 hereof.

Depository : the meaning provided in Section 23.3 hereof.

Development Review Committee : the committee established and appointed by the Association to review and approve development plans for sites within the Park.

Environmental Laws : the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601, et seq.); the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.§9671 et. seq.); the Hazardous Materials Transportation Act (49 U.S.C. §1801, et seq.); the Toxic Substances Control Act (15 U.S.C. §2601, et seq.); the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.); the Clean Air Act (42 U.S.C. §7401 et seq.); the Clean Water Act (33 U.S.C. §1251, et seq.); the Rivers and Harbors Act (33 U.S.C. §401, et seq.); and any so-called “Superlien law”; and any regulations promulgated pursuant thereto, and any other applicable federal, state or local law, common law, code, rule, regulation, order, policy or ordinance, presently in effect or hereafter enacted, promulgated or implemented, or any other applicable governmental regulation imposing liability or standards of conduct concerning any Hazardous Materials, now or hereafter in effect.

Event(s) of Bankruptcy : the meaning provided in Section 19 hereof.

Facility : the meaning provided in Section 2 hereof.

Final Estimated Assessment Payment : the meaning provided in Section 6.2 hereof.

Force Majeure : any event or circumstance which is beyond the reasonable control of either Landlord or Landlord’s Related Parties, or Tenant or Tenant’s Related Parties, the happening or occurrence of which in fact delays or postpones either party’s performance of a non-monetary covenant or obligation hereunder, including, without limitation, strikes, lockouts or picketing (legal or illegal); governmental action and condemnation; riot, civil commotion, insurrection, and war; fire or other casualty, accident, acts of God or the enemy; adverse weather conditions that caused work on the Project to slow or cease temporarily whether or not reasonably expected for the location of the Premises and the time of the year in question; unavailability of fuel, power, supplies or materials; and the passage or reasonably unexpected interpretation or application of any Legal Requirements or moratorium of any Governmental Authority. In order for either party to validly claim that an event constitutes Force Majeure hereunder, such claimant must give written notice setting forth in reasonable detail the nature of and the occurrence of such event to the other party hereto within ten (10) days after such occurrence, and such claimant must have in fact experienced lost work days in the applicable construction schedule due to adverse weather conditions (such lost work days being hereinafter referred to as “Adverse Weather Days”). With respect to precipitation, in order to

 

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constitute Adverse Weather Days hereunder only those periods of precipitation that exceed the historical norm (as determined by the National Weather Service, or a similar agency or authority) for the area in which the Park is located generally, and for the time period and season in question, plus a reasonable period of time thereafter for the soils to dry sufficiently so as to permit soils compaction, movement of soils, and concrete and paving activities, as reasonably determined by an independent soils engineering firm with an office in the Atlanta metropolitan area, shall be included.

Governmental Authority : shall mean any federal, regional, state, county or municipal government (including , without limitation, any agency, authority, subdivision, department or bureau thereof).

Gross Building Area : the entire area within the exterior face walls on each floor of the Facility. Unless otherwise expressly stated to the contrary, all references in this Lease to “square feet” shall mean the square feet of Gross Building Area. Landlord and Tenant hereby agree that the Gross Building Area of the Facility as shown on the Plans is 98,268 square feet and such total shall be deemed the Gross Building Area for all purposes under this Lease.

Guarantees : the meaning provided in Section 13.1 of the Pre-Occupancy Agreement.

Guidelines : written guidelines that the Development Review committee has adopted or may adopt for the development of sites within the Park that set forth with greater detail than the Declaration the design standards and requirements for construction and maintenance, as well as samples of materials and other information, to be submitted to the Development Review Committee.

Hazardous Materials : any substances, materials or wastes that are regulated by any Governmental Authority because of toxic, flammable, explosive, corrosive, reactive, radioactive or other properties that may be hazardous to human health or the environment, including without limitation, above or underground storage tanks, flammables, explosives, radioactive materials, radon, petroleum and petroleum products, asbestos, urea formaldehyde foam insulation, methane, lead-based paint, polychlorinated biphenyl compounds, hydrocarbons or like substances and their additives or constituents, pesticides and toxic or hazardous substances or materials of any kind, including without limitation, substances now or hereafter defined as “hazardous substances,” “hazardous materials,” “toxic substances” or “hazardous wastes” in any Environmental Laws.

Land : an approximately 11 acre parcel of real estate located in the Park, and legally described on Exhibit A attached hereto and made a part hereof.

Landlord : the meaning provided in the Preamble.

Landlord Related Parties : collectively Landlord and Landlord’s partners, and their respective officers, shareholders, directors, agents and employees, and the invitees, licensees or contractors of each.

Landlord’s QLMCI Share : the meaning provided in Section 7.1 hereof.

Lease : the meaning provided in the Preamble.

 

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Lease Year : each consecutive twelve (12) month period beginning with the Commencement Date, except that if the Commencement Date is other than the first (1st) day of a calendar month, then the first (1st) Lease Year shall be the period from the Commencement Date through the date which is twelve (12) full calendar months after the last day of the calendar month in which the Commencement Date occurs, and each subsequent Lease Year shall be the period of twelve (12) months following the last day of the prior Lease Year.

Legal Requirements : (a) any and all laws, codes, ordinances, requirements, standards, plats, plans, criteria, orders, directives, rules and regulations of any Governmental Authority affecting the improvement, alteration, use, maintenance, operation, occupancy, security, health, safety and environmental condition of the Premises, or any part thereof (or any occupants therein, as the context requires) and/or Park (or any other parts thereof or premises therein, or any occupants therein, as the context requires), including, without limitation, any Environmental Laws, and (b) any and all covenants, restrictions, conditions, easements and other agreements of record affecting the Premises and/or Park (or any other parts thereof or premises therein, or any occupants therein, as the context requires), including, without limitation, the Declaration, any documents, rules, regulations, standards or criteria set forth or referenced therein or promulgated by the Association or any other governing body or entity exercising jurisdiction over the Park, in any case, whether in force at the Commencement Date, or subject to the terms of Section 9 hereof, passed, enacted or imposed at some time in the future, and shall include all permits, licenses, certificates, authorizations and approvals required in connection with any of the foregoing.

Legally Mandated Capital Improvements : any capital improvements which may at any time during the Term be required under any Legal Requirement which was not passed or was not applicable or was not reasonably expected of being interpreted as applicable to the Premises as of the Commencement Date.

Net Rentable Area : the Gross Building Area less the area of the vertical penetrations for the elevators and any required stairwells within the perimeter of the Facility (e.g. there being two (2) required stairwells in the initial Facility). Landlord and Tenant hereby agree that the Net Rentable Area of the initial Facility as shown on the Plans is ninety-five thousand two hundred and ten (95,210) square feet and such total shall be deemed the Net Rentable Area of the Facility for all purposes under this Lease.

Non-Covered Costs : the costs (including “soft” costs, such as a developer’s fee, architect’s and engineer’s fee, insurance, bonds, permits and other such items, and “hard” costs of such restoration): (i) of any Casualty-Related Improvements, to the extent such cost is not covered by insurance proceeds actually recovered from the insurer; and (ii) of any Condemnation-Related Improvements, to the extent such cost is not covered by any payment which is actually received by Landlord from the condemning authority for loss or damage to the remainder of the Premises not taken or condemned.

Option : the meaning provided in Section 37 hereof.

Park : Barrett.

Plans : the meaning provided in Section 5 of the Pre-Occupancy Agreement.

 

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Premises : collectively, the Land, the Facility and the other improvements located on the Land.

Pre-Occupancy Agreement : the Pre-Occupancy and Construction Agreement of even date herewith between Landlord and Tenant.

QLMCI Adjustment Payment : the meaning provided in Section 7.1 hereof.

QLMCI Useful Life : the meaning provided in Section 7.1 hereof.

Qualified Legally Mandated Capital Improvement : the meaning provided in 7.1 hereof.

Reference Rate : the rate of interest announced by Wachovia Bank of Georgia as its lowest base rate or reference rate (which rate shall change automatically and simultaneously with each change in the announced base rate or reference rate). If for any reason there is no such rate in effect at the time of any determination of the Reference Rate under this Lease, the Reference Rate shall refer to a substantially equivalent publicly-announced rate by a money center bank having offices and branch bank locations in Georgia as is selected by Landlord.

Renewal Term : the meaning provided in Section 37 hereof.

Rent : collectively, Base Rent and Additional Rent.

Sublease Profits : the excess of revenues generated by or consideration received from the subleasing of the Premises or assignment of this Lease in whole or in part, over the Rent applicable thereto, after deducting the following costs of subletting or assignment: any period of rent concessions granted to the subtenant or assignee, reasonable attorneys’ fees, reasonable commissions, tenant improvement allowances and the costs of improvements and alterations to the Premises made by or paid for by the sublessor or assignor in connection with the sublease or assignment.

Substantial Completion Date : the meaning provided in Section 2 of the Pre-Occupancy Agreement.

Taxes : the meaning provided in Section 6.1 hereof.

Tax Adjustment Statement : the meaning provided in Section 6.1(a) hereof.

Tax Rent : the meaning provided in Section 6.1 hereof.

Tenant : the meaning provided in the Preamble.

Tenant Additions : any improvements or additions to the Premises that are included in the Tenant Plans and are paid for in full or in part by Landlord.

Tenant’s Casualty Notice : the meaning provided in Section 23 hereof.

Tenant Delays : any interruption or delay at any time in the progress of a Casualty Restoration, a Condemnation Restoration or any other work required to be performed by Landlord hereunder, if any,

 

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which is the result of: (i) the performance of any work at the Premises by any of the Tenant Related Parties or any person, firm or corporation employed by any of the Tenant Related Parties; or (ii) any other act or omission by the Tenant Related Parties (for example, but not by way of limitation, failure to timely respond to requests for information or approval of construction related matters). In order to validly claim that a Tenant Delay has occurred hereunder, Landlord must give to Tenant written notice of such claim setting forth in reasonable detail the nature of and occurrence of such claimed Tenant Delay within ten (10) days after Landlord first has received written notice of, or has actual knowledge of, the event or occurrence in question.

Tenant Improvements : any alterations, improvements or additions to the Premises which are not included in the Plans, whether made by Landlord on behalf of Tenant or by Tenant or Tenant’s agents or contractors, whether temporary or permanent and whether or not requiring Landlord’s consent.

Tenant Plans : the meaning provided in Section 5 of the Pre-Occupancy Agreement.

Tenant Related Parties : collectively, Tenant and its officers, shareholders, directors, agents, employees, representatives, contractors, permitted sublessees and assigns, and the agents, employees, invitees, licensees, contractors, mechanics and suppliers of each.

Term ; the meaning provided in Section 2 hereof.

Termination Date : the meaning provided in Section 2 hereof.

Unfinished Space : the meaning provided in Section 38 hereof.

2. AGREEMENT TO LEASE . Landlord hereby leases to Tenant, and Tenant hereby accepts, the Land, located in Cobb County, Georgia, together with all improvements now or hereafter located on the Land, including without limitation a building of ninety-eight thousand two hundred and sixty-eight (98,268) square feet of Gross Building Area to be constructed thereon in accordance with the Plans pursuant to the Pre-Occupancy Agreement (such building being referred to herein as the “Facility” ), for a term (the “Term) commencing on the Commencement Date, and ending one hundred eighty (180) calendar months after the Commencement Date (the “Termination Date” ); provided, however, that if the Commencement Date is not the first (1st) day of a calendar month, the Term shall end one hundred eighty (180) calendar months after the first (1st) day of the calendar month immediately succeeding the calendar month in which the Commencement Date occurs, unless sooner terminated as provided herein, subject to the agreements herein contained.

3. COMMENCEMENT DATE . Except as otherwise expressly provided for in this Lease or the Pre-Occupancy Agreement, the “Commencement Date” shall be one hundred twenty-two (122) days after the later to occur of (i) the Substantial Completion Date, and (ii) June 1, 1996 (the “ Anticipated Commencement Date ”). The parties shall confirm the date of the Commencement Date in writing as provided in Section 17 of the Pre- Occupancy Agreement.

4. RENT . Tenant shall pay Rent to Landlord at the office of Landlord or to such other person or at such other place as Landlord may designate on not less than ten (10) days prior written notice to Tenant, without offsets or deductions of any kind whatsoever, except as otherwise expressly provided in the Lease, at the times and in the manner hereinafter set forth.

 

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5. BASE RENT . During the Term, Tenant shall pay Base Rent in accordance with the various Base Rent Rates described in this Section 5. The Base Rent Rates for each of the first (1st) fifteen (15) Lease Years shall be as set forth on the schedule attached hereto as Exhibit B , as such exhibit may be amended pursuant to Sections 7 and 17 of the Pre-Occupancy Agreement. The Base Rent payable for each Lease Year shall be paid in twelve (12) equal monthly installments, paid in advance not later than the first (1st) day of each and every calendar month. If the Commencement Date is other than the first (1st) day of a month, then the Base Rent for such initial month shall be prorated on a per diem basis for such fractional period. Payment of the Base Rent shall commence on the Commencement Date, subject to the rent abatement provisions of Section 41.

6. TAX RENT AND ASSESSMENTS . In addition to paying the Base Rent specified in Section 5 hereof, Tenant shall pay “Tax Rent” and “Assessments” for each calendar year (or portion thereof) falling within the Term. Tax Rent and Assessments determined as provided below shall be paid at the same place as Base Rent is to be paid. If the Term commences on any day other than the first (1st) day of a calendar year, or if the Term ends on any day other than the last day of a calendar year, the Tax Rent and Assessments with respect to each such partial calendar year shall be prorated based on the number of days in the Term falling within such calendar year.

6.1. Tax Rent .

(a) Tenant shall pay “Tax Rent” on a monthly estimated basis as hereinafter provided. Tenant shall be obligated to deposit monthly with Landlord, or such other entity as Landlord may designate, on the first day of each and every month in the Term, a sum equal to 1/12th of Landlord’s reasonable estimate of the current amount of Taxes levied with respect to the Premises, which monthly deposits need not be kept separate and apart by Landlord and shall be held by Landlord in such account or accounts as may be authorized by the then current state or federal banking laws, rules or regulations and which monthly deposits shall be used as a fund to be applied, to the extent thereof, to the payment of Taxes as the same become due and payable. The existence of said fund shall not limit or alter Tenant’s obligation to pay the Taxes for which the fund was created. Tenant’s monthly deposits of Tax Rent shall, at Landlord’s sole option, either (y) be placed into an interest-bearing account, or (z) be deemed to accrue interest at an agreed upon rate of the Reference Rate (such interest, whether earned pursuant to item (y) or deemed accrued pursuant to item (z), or both, is hereinafter referred to as the “Tax Rent Interest”) first , to pay Tenant’s Tax Rent as and when such payment of Taxes by Landlord occurs, in the event that Tenant’s estimated payments of Tax Rent are less than the Taxes actually due and payable by Landlord for the period in question; and second , to pay for the premiums due and payable in connection with the rent insurance described in Section 22.2 below.

 

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On or prior to the Commencement Date, Landlord shall advise Tenant as to Landlord’s estimate of the monthly deposits that will be required for the period commencing on the Commencement Date and ending on the December 31 immediately thereafter. As soon as reasonably feasible after Landlord’s receipt of tax bills with respect to each applicable calendar year during the Term, Landlord will furnish Tenant a statement (the “Tax Adjustment Statement” ) showing the following: (i) actual Taxes for the calendar year last ended and the amount of Taxes payable by Tenant for such calendar year, (ii) the amount of additional Tax Rent due Landlord for the calendar year last ended, less credits for monthly deposits paid; (iii) the amount of interest accrued upon Tenant’s monthly Tax Rent, together with a check from Landlord refunding such interest if not previously applied by Landlord to Tenant’s Tax Rent in the manner provided for above; (iv) the monthly deposits due in the current calendar year; and (v) a copy of the tax bill or bills paid (or to be paid) by Landlord. Within thirty (30) days after Tenant’s receipt of each Tax Adjustment Statement, Tenant shall pay to Landlord: (i) the amount of additional Tax Rent (if any) shown on the Tax Adjustment Statement to be due Landlord for the calendar year last ended; plus (ii) the amount which, when added to the monthly deposits theretofore paid by Tenant as Tax Rent for Tenant’s estimated Taxes in the current calendar year, will result in Landlord having then received, for the current calendar year, the full monthly deposits due as Tax Rent for such estimated Taxes for such current calendar year as of the end of such 30-day period.

With respect to the last calendar year (or portion thereof) falling within the Term, Landlord’s estimate of the current annual Taxes shall be increased by ten percent (10%) for purposes of determining the amount of Tenant’s deposits required hereunder during such last calendar year (or portion thereof) to account for any additional Tax Rent which may not be finally determined until after the expiration of the Term. Tenant’s obligation to pay such additional Tax Rent shall survive the expiration or earlier termination of the Term. Tenant’s payment of the monthly deposit for each calendar year shall be credited against the Tax Rent due with respect to such calendar year. If the monthly deposits paid by Tenant for any calendar year exceed the Tax Rent due for such calendar year, then Landlord shall give a credit to Tenant in an amount equal to such excess against the Tax Rent due for the next succeeding calendar year, except that if any such excess relates to the last calendar year (or portion thereof) falling within the Term, then provided that no Default of Tenant exists hereunder, Landlord shall refund such excess to Tenant within thirty (30) days after Landlord’s receipt of the final tax bill for such calendar year.

(b) Provided Tenant is not then in Default of this Lease, Tenant may request in writing no later than ten (10) business days after receipt of any tax bills from Landlord that Landlord contest or object to the legal validity or amount of any Tax. Landlord shall notify Tenant in writing within ten (10) days after receipt of Tenant’s request whether Landlord has elected, in Landlord’s sole discretion, to pursue such contest. Landlord’s notice shall contain the name or names of tax consultants Landlord is willing to retain in connection with such contest, including the method of billing that would be utilized in connection therewith. If Landlord elects to pursue such contest, then Landlord shall diligently pursue such protest using tax consultants experienced in real estate tax matters and reasonably approved by Tenant (which approval shall not be unreasonably withheld or delayed), and all fees and costs (including without limitation reasonable actual attorney’s fees ) incurred by Landlord in pursuing such contest regardless of the ultimate success thereof, shall be payable by Tenant as Additional Rent within fifteen (15) days after being billed therefor. If Landlord declines to pursue such contest, then Tenant may pursue such contest provided: (a) Tenant is not then in Default of this Lease; (b) such protest is in good faith; and (c) Tenant timely pays to Landlord the

 

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Tax Rent with respect to the tax being contested as and when due and payable hereunder. With respect to any contested Tax required by the taxing body to be paid under protest, Landlord shall apply the amount paid by Tenant to Landlord to the payment of such Tax, and shall at Tenant’s request do so under protest, signing such reasonable documents in connection therewith as Tenant shall request and provide at Tenant’s cost. If payment of the contested Tax may be deferred pending determination of the contest, then Landlord shall defer the payment of such Tax pending such determination. All costs, fees, penalties and interest associated or imposed in connection with such contest or protest shall be paid by Tenant, and Tenant hereby agrees to indemnify and hold the Landlord Related Parties harmless from and against any thereof. Provided Tenant is not in Default with respect to the provisions of this Section 6.1, Tenant shall receive the benefit of any reduction in any contested Tax unless any applicable refund relates to a period of time which is not part of the Term, which amount, if any, shall belong to Landlord after first being applied in accordance with the sentence next following. In any event, any net reduction or savings in Taxes shall be applied first , to Tenant’s payment of Taxes for the tax year in question, if not theretofore paid in full by Tenant, and second , to the costs, expenses and fees (including without limitation reasonable actual attorneys’ fees and tax consultant fees paid or incurred by Tenant), and third , any excess or remaining amount not so applied shall be applied or refunded in accordance with Section 6.1(a) above.

(c) “Taxes” shall mean all real estate taxes and assessments (other than the Assessments), special or otherwise, levied or assessed upon or with respect to the Premises and/or Landlord’s leasehold interest in the Premises and/or Landlord’s leasehold interest in the Premises with respect to each calendar year (or portion thereof) falling within the Term. Should any Governmental Authority having jurisdiction over the Premises (i) impose a tax, assessment, charge or fee against the Premises which Landlord shall be required to pay, either in substitution for, or in addition to such real estate taxes, or (ii) impose an income or franchise tax or a tax on rents which may be in addition to or in substitution for a tax levied against the Premises, then, in either of such events such substituted and/or additional taxes, assessments, fees or charges shall be deemed to constitute Taxes hereunder, but only to the extent that, they would be payable by Landlord even if the Premises was the sole property of Landlord subject thereto and the Base Rent hereunder was the sole rent subject thereto. All fees and costs (including, without limitation, reasonable attorney’s fees and fees of tax consultants reasonably approved by Tenant, which approval shall not be unreasonably withheld or delayed) incurred by Landlord in seeking to obtain a reduction of, or a limit on the increase in, any Taxes, in those instances where, without the request from Tenant, Landlord decides to pursue such contest pursuant to Section 6.1(b) shall, regardless of whether any reduction or limitation is obtained, be payable in the first instance by Landlord; provided, however, that any net reduction or savings derived or resulting from such contest shall be applied first , to such costs and expenses of Landlord, and second , the balance shall be applied in accordance with Section 6.1(b) above. In determining the amount of Taxes for any calendar year (or portion thereof) falling within the Term, the amount of special assessments to be included shall be limited to the amount of any installment (plus any interest payable thereon) of such special assessment paid over the maximum period of time permitted by law. Except as provided in the immediately preceding sentence, all references to Taxes “for” a particular calendar year shall mean Taxes levied, assessed or otherwise imposed for such calendar year without regard to when such Taxes are payable.

6.2. Assessments . As a result of the Premises being located in the Park, Landlord is liable to the Association for the payment of the Assessments. Landlord represents that the amount of Assessments for the 1995 calendar year is estimated to equal approximately $300.00 per acre. As

 

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Additional Rent hereunder, Tenant shall pay all Assessments related to the Premises for each calendar year (or portion thereof) falling within the Term. If any such Assessments relate to time periods which do not fall entirely within the Term, such Assessments shall be prorated based on the number of days in the Term falling within such time periods. After receipt of each bill or invoice for Assessments with respect to a calendar year (or portion thereof) falling within the Term, Landlord shall promptly deliver a copy thereof to Tenant, accompanied by a statement setting forth the portion of such Assessments attributable to the Premises and payable by Tenant (an “Assessment Notice” ). Except as otherwise herein provided, Tenant shall no later than the earlier of thirty (30) days after receipt of any Assessment Notice or fifteen (15) days before such Assessments are due, pay to the Association the full amount of Assessments due under such Assessment Notice; provided, however, that in no event shall Tenant be obligated to pay such Assessments earlier than fifteen (15) days after receipt of any Assessment Notice. Within five (5) days following the date such Assessments are due, Tenant shall furnish Landlord with evidence of the payment of such Assessments in full. Notwithstanding the foregoing right of Tenant to pay Assessments directly to the Association, Tenant shall pay Assessments when due hereunder to Landlord: (i) following a Default by Tenant with respect to any of its monetary obligations under this Lease; and (ii) during the final Lease Year of the Term as hereinafter provided. On or before the first day of the last calendar month of the Term, Tenant shall pay to Landlord as an estimate of the Assessments for the remainder of the Term an amount ( the “Final Estimated Assessment Payment” ) obtained by multiplying the number of months (or portion thereof) remaining in the Term from the last applicable month through which Tenant has paid Assessment hereunder by the quotient derived by dividing one hundred ten percent (110%) of the most recent ascertainable annual Assessments with respect to the Premises by 12. When, following the end of the Term, Landlord receives the actual invoice or bill for the Assessments which had been previously estimated, Landlord shall promptly deliver a copy thereof to Tenant, accompanied by a final Assessment Notice stating any remaining amount due from Tenant for Assessments, or if the actual amount of Assessments is less than the Final Estimated Assessment Payment theretofore paid by Tenant, the amount to be refunded by Landlord to Tenant. Any amount due from one party to the other under the preceding sentence shall be paid within thirty (30) days after the delivery of the final Assessment Notice.

Without limiting any other obligations of Landlord or Tenant which shall survive the expiration or earlier termination of the Term, Tenant’s and Landlord’s obligations to pay any amounts due in connection with Tax Rent and Assessments shall survive the expiration or earlier termination of the Term.

7. RESPONSIBILITY FOR MAINTENANCE, REPAIR AND OPERATIONS .

7.1. Tenant’s Responsibilities . Except as otherwise expressly provided herein, Tenant shall, at Tenant’s sole cost and expense, manage, operate, repair, maintain, and improve and (as necessary) replace the Premises and the equipment, fixtures and personal property located on the Premises in good condition and repair and in compliance, in all material respects, with all applicable Legal Requirements, In addition, and except as otherwise expressly provided herein, Tenant shall, at Tenant’s sole cost and expense, make all Legally Mandated Capital Improvements and subject to the termination rights set forth in Section 23 hereof, shall pay the Non-Covered Cost of any Casualty-Related Improvement. All repairs, replacements or maintenance performed by either Tenant or Landlord pursuant to this Section 7 shall be performed in a good and workmanlike manner in compliance with all applicable Guarantees, Legal Requirements and insurance requirements, using

 

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materials with a quality equivalent or better than those used in the original construction of the Facility, and to the extent applicable shall be subject to Section 14 of this Lease. Tenant shall have no obligation to maintain, repair or replace the “structural components” (as defined in Section 7.2 below) of the Premises, except as expressly set forth in this Lease to the contrary.

Notwithstanding anything herein to the contrary, Landlord agrees that, subject to the terms of this Section 7.1, it shall be responsible for the payment to Tenant of its pro rata share of the reasonable cost of any Qualified Legally Mandated Capital Improvement (the “ Landlord’s QLMCI Share” ). For purposes of this Lease, the term “Qualified Legally Mandated Capital Improvement” shall mean any Legally Mandated Capital Improvements that: (i) are made during the final three (3) Lease Years of the Term; (ii) cost in excess of $25,000.00 in any one instance or more than $100,000.00 in the aggregate; (iii) are reasonably susceptible of continued use or reuse by office tenants; and (iv) are not the result of (a) the specific nature of Tenant’s non-office use of the Premises, or (b) Tenant’s failure to properly perform its maintenance, repair and replacement obligations pursuant to and in accordance with this Section 7.1. Nothing in this grammatical paragraph shall limit, modify, release, waive or terminate Tenant’s obligation to perform or cause to be performed all Legally Mandated Capital Improvements during the Term, including all Qualified Legally Mandated Capital Improvements. Landlord’s QLMCI Share shall be determined by multiplying the reasonable cost of the applicable Qualified Legally Mandated Capital Improvement by a fraction, the numerator of which shall be the difference between the number of years (or portion thereof) in the useful life of the applicable Qualified Legally Mandated Capital Improvement as reasonably estimated by Landlord’s engineer (the “ QLMCI Useful Life” ) and the number of years (or portion thereof) remaining in the Term from the date such Qualified Legally Mandated Capital Improvement is required by the applicable Governmental Authority, and the denominator of which is the applicable QLMCI Useful Life. Landlord’s QLMCI Share shall be payable to Tenant within thirty (30) days after the Qualified Legally Mandated Capital Improvement is completed and Tenant furnishes Landlord with verifiable supporting documentation reflecting the actual costs thereof, together with evidence of the payment thereof in full.

Notwithstanding the foregoing, if any time after the calculation and payment of Landlord’s QLMCI Share, Tenant desires to exercise the Option or to otherwise re-lease the Premises for an extended period on terms other than pursuant to the Option, then in either case, Landlord’s QLMCI Share shall be adjusted by recalculating the numerator in the foregoing formula taking into account the number of years (or portion thereof) in such extended Term toward the end that Landlord shall be responsible for the precise amount of Landlord’s QLMCI Share based on such extended Term. Tenant shall, as Additional Rent hereunder, reimburse Landlord for the applicable overpayment of Landlord’s QLMCI Share (the “QLMCI Adjustment Payment” ) at the following times: (i) in the case of the exercise of the Option, concurrently with Tenant’s delivery of the final binding written exercise notice pursuant to Section 37(B) hereof; and (ii) in the case of any other extension of the Term, concurrently with Tenant’s execution and delivery to Landlord of any applicable amendment to this Lease or a new lease agreement, as the case may be. Anything herein to the contrary notwithstanding, if Tenant has previously exercised the Option or agreed to re-lease the Premises for an extended period on terms other than pursuant to the Option, then any Legally Mandated Capital Improvement required prior to the expiration of the initial Term hereof that otherwise satisfies the second, third and fourth requirements in the definition of Qualified Legally Mandated Capital Improvement, shall not satisfy the first requirement and, accordingly, shall not be deemed a Qualified Legally Mandated Capital Improvement hereunder and shall be performed by Tenant at Tenant’s sole

 

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cost and expense (unless in the case of an extension other than pursuant to the Option, the time remaining in the initial Term, when added to the extension term is less than one (1) year.) [ By way of example without limitation : Example 1 - assume that at the end of the fourteenth (14th) Lease Year a Qualified Legally Mandated Capital Improvement with an 8 year useful life is required for $100,000.00. In this Example 1, Landlord’s QLMCI Share would be $87,500.00 (reflecting $100,000 multiplied by [8 minus 1] divided by 8 ). Example 2 - assume the same facts as in Example 1 except that Tenant exercises the Option. In this Example 2, Landlord’s QLMCI Share will be adjusted by recalculating the numerator of the formula based on the 5-year extension of the Term. In this case, Landlord’s QLMCI should have been $25,000 (reflecting $100,000.00 multiplied by [8 minus 6] divided by 8), as opposed to the $87,500.00 theretofore paid by Landlord. Accordingly, a QLMCI Adjustment Payment in the amount of $62,500.00 would accompany Tenant’s final binding written exercise notice pursuant to Section 37(b) hereof.]

7.2. Landlord’s Responsibilities . Except as may be otherwise expressly provided in the Pre-Occupancy Agreement or this Lease, Landlord shall have no obligation to provide any services to, or in connection with, the Premises, or any responsibility for the management, operation, repair, maintenance or replacement of capital improvements with respect to the Premises. Anything in this Lease to the contrary notwithstanding, Landlord shall make, or cause to be made, all maintenance, repairs and/or replacements to the “structural components” (as hereinafter defined) of the Facility; and any repairs or replacements otherwise required to be made by Tenant pursuant to Section 7.1 above, but which arise as a result of any act or omission of Landlord Related Parties (including, without limitation, Landlord’s failure to perform ordinary, routine or scheduled maintenance obligations with respect to the roof required pursuant to this Section 7.2, or such other ordinary, routine or scheduled maintenance obligations as may be required by the terms and provisions of any applicable Guarantee pertaining to or covering an item for which Landlord is responsible hereunder, and any costs that would have been covered under any such Guarantee but for any Landlord Related Parties’ act or omission that negated any such Guarantee). For purposes of this Lease, the phrase “structural components” shall mean the roof (up to the mechanical equipment curbs), foundation, concrete floors and structural supports of the Facility. The cost of any such maintenance, repairs and/or replacements to structural components shall be the sole responsibility of Landlord, except to the extent such costs arise as a result of any act or omission of Tenant Related Parties (including, without limitation, Tenant’s failure to perform ordinary, routine and/or scheduled maintenance obligations required pursuant to Section 7.1 hereof, or as may be required by the terms and provisions of any applicable Guarantee pertaining to or covering an item for which Tenant is responsible under Section 7.1 above, and any costs that would have been covered under any such applicable Guarantee but for any Tenant Related Parties’ act or omission that negated any such Guarantee), in which event, the cost of such repair or replacement shall be paid by Tenant within thirty (30) days after Landlord bills Tenant therefor.

In addition to any other rights reserved to Landlord pursuant to the terms of this Lease, Landlord reserves the right at any reasonable time during the Term upon not less than three (3) business days prior written notice to Tenant (except in the event of an emergency) to have the roof inspected by an experienced roofing consultant or contractor as may be recommended by the roof manufacturer or roof Guarantee (or designated by Landlord in the absence of any such recommendation). Landlord reserves the right, upon not less than ten (10) days’ prior written notice to Tenant, to enter into a maintenance contract with an experienced roofing contractor reasonably acceptable to Landlord who shall perform such maintenance and care on behalf of Landlord, and shall have the right to enter upon

 

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the Premises at such time or times each Lease Year as are reasonably necessary or appropriate to do so, subject to the notification and other requirements set forth herein.

 

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Tenant shall notify Landlord in writing of any required repairs or necessary replacements to the structural components of the Facility. Landlord shall not be required to commence any such repair or replacement until Landlord has received Tenant’s written notice. Landlord shall commence and complete repairs or replacements required pursuant to this Section 7.2 as soon as is reasonably practicable following Landlord’s receipt of Tenant’s notice, not to exceed thirty (30) days; provided, however, that if such repair or replacement is not capable of being completed within said 30-day period (including due to any Tenant Delay or any delay due to Force Majeure) then Landlord will be deemed in full compliance with the terms of this Section 7.2 as long as Landlord commences such repair or replacement within said 30-day period and thereafter diligently prosecutes same to completion to the extent within its reasonable control. If Landlord fails to perform any repair or replacement required pursuant to this Section 7.2 within said 30-day period (or such extended period as provided above where the repair or replacement is not capable of being completed within said 30-day period), then Tenant may furnish Landlord with a written notice of non-compliance with the terms of this Section 7.2. If Landlord fails to complete the required repair or replacement within fifteen (15) days after Landlord’s receipt of Tenant’s notice of non-compliance, then Tenant may, at its option, exercised by giving Landlord written notice thereof, take reasonable measures to complete any such repair or replacement required pursuant to the terms of this Section 7.2. If Tenant so completes such repair or replacement, Landlord shall pay Tenant the reasonable cost thereof that otherwise would have been Landlord’s cost hereunder within thirty (30) days following Landlord’s receipt of a bill therefor, together with supporting invoices reflecting the reasonable cost thereof. If Landlord fails to pay such bill within said 30-day period, Tenant may set-off the amount of said bill (together with interest thereon at the rate specified in Section 35.2 hereof on the unpaid and unapplied amount due hereunder from time to time) from the next Rent payments due under this Lease. Notwithstanding the foregoing, the rights granted Tenant pursuant to this grammatical paragraph are granted without prejudice to Landlord’s right to contest Tenant’s ability to exercise same and/or the amount of costs incurred thereby.

 

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8. SERVICES . Tenant shall be responsible for contacting the appropriate municipality and public utility companies to ensure continuity of all utility services upon the Commencement Date and to establish and maintain utility services in Tenant’s name and for Tenant’s account, and for paying to such entities any installation and service fees or charges which are not Landlord’s responsibility pursuant to the Pre-Occupancy Agreement. For purposes of clarifying the immediately preceding sentence, Landlord shall make available, at Landlord’s cost, to the Facility all necessary utility services which shall include electric, gas, water, sewer and telephone (including all permits required by any Governmental Authority for the installation of same, if any); provided, however, Tenant acknowledges and agrees that: (i) Tenant shall be responsible for the installation of its telephone and computer cables, equipment and facilities within the Facility; (ii) Tenant shall be responsible for the payment of all monetary deposits, if any, required by any applicable utility company or Governmental Authority to establish service in the Tenant’s name at the Facility; and (iii) cable television service is not available in the Park and Landlord shall have no obligation to provide same. Landlord and Tenant shall operate to provide information to each other regarding the reading of meters, the changeovers in filings and other like matters relating to Tenant’s taking responsibility for utilities under this Lease. From and after the Commencement Date Tenant shall pay utility providers directly for all utility services furnished to the Premises. Landlord does not warrant that any of the services will be free from interruptions. Any such interruption of service shall never be deemed an eviction (actual or constructive) or a disturbance of Tenant’s use and possession of the Premises or any part thereof and shall never render Landlord liable to Tenant under this Lease for damages, by abatement of Rent or otherwise, or relieve Tenant from performance of Tenant’s obligations under this Lease. Notwithstanding the foregoing, in the event any such interruption: (i) is caused solely by Landlord’s performance or non-performance (or any Landlord Related Party’s performance or non-performance) of its obligations under this Lease; and (ii) the Facility or a portion thereof is rendered untenantable and Tenant does not in fact occupy, or cease to occupy, such portion of the Facility, then in such event, Tenant shall promptly notify Landlord in writing of the occurrence of such untenantability and Rent shall abate on a per diem basis commencing on the first date of untenantability and ceasing at such time as the Facility, or applicable portion thereof, as the case may be, is fully tenantable, such abatement to be in an amount bearing the same ratio to the total amount of Rent due for such period as the untenantable portion of the Facility from time to time bears to the entire Facility, but in any event, such abatement shall become effective if and only to the extent Landlord receives the proceeds of any rent insurance carried by Tenant pursuant to Section 22.2 hereof. Notwithstanding the immediately preceding sentence, if Tenant is entitled to abate Rent pursuant to the immediately preceding sentence but for Landlord’s receipt of rent loss proceeds, and if Tenant has satisfied the insurance requirements of this Lease with respect to such rent loss coverage, then if the applicable insurer cannot or refuses to pay proceeds that otherwise would have been payable under such rent loss insurance policy; through no fault of any Tenant Related Parties, then in such event, Tenant shall be entitled to abate Rent in accordance with the terms of the preceding sentence regardless of Landlord’s receipt of rent loss insurance proceeds. In any event where Landlord or any Landlord Related Party is the cause of untenantability with respect to the Facility, Landlord shall, at its sole cost and expense, take such action as shall be necessary to render the Facility tenantable again as soon as is reasonably practicable, subject to any Tenant Delays or any delay due to Force Majeure.

9. USE . Tenant shall not use or occupy the Premises, or permit the Premises to be used or occupied, for any use other than for general office, research, storage, distribution and light manufacturing uses, including, without limitation, use as a biomedical company engaged in various design, development, light manufacturing, marketing, licensing and other business endeavors and including, without limitation, the manufacture of bioadhesives; provided, however, that at all times during the Term, the portion of the Facility devoted to general office and research uses shall in no event be modified in a manner that will cause the then existing parking areas, facilities and ratios on and with respect to the Premises to violate any applicable Legal

 

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Requirements. Tenant shall not use or occupy the Premises, or permit the Premises to be used or occupied contrary to any Guarantees or Legal Requirements; or in any manner which would violate any certificate of occupancy affecting the same; or which would cause structural injury to the facility or any other improvements on the Premises or in the Park; or which would invalidate the amount of premiums for any policy of insurance affecting the Premises; or would create a nuisance. Anything in this Lease to the contrary notwithstanding, Landlord agrees that from and after the date of this Lease, Landlord shall not, and for so long as Landlord maintains legal control over the Association pursuant to the Declaration, Landlord will not cause the Association to voluntarily create any covenants, conditions or restrictions affecting the Premises that will materially and adversely interfere with the Tenant’s use of the Premises for the general purposes set forth in this Section 9, or, in particular, Tenant’s use of the Premises for or in connection with Tenant’s business use as a biomedical company engaged in various design, development, light manufacturing, marketing, licensing and other business endeavors, including for example only, the low temperature preservation of cardiac valves, veins and other vascular tissues; and of meniscal, cruciate and other joint and ligament tissues; and/or of other bodily tissues or substances; the design, development, manufacturing and/or marketing of bioadhesives; and the design, development and/or marketing of other related and unrelated biomedical products and procedures.

10. DISCLAIMER OF WARRANTIES . Except as expressly provided in the Pre-Occupancy Agreement or this Lease, Landlord does not make, and Tenant acknowledges that Landlord has not made any representation, warranty or guarantee, express or implied, with respect to this Lease, Landlord’s title to, or the present or future merchantability, condition, quality, durability, fitness or suitability of the Premises or any part thereof in any respect or in connection with or for the purposes and uses of Tenant, or any other representation, guarantee, warranty or covenant of any kind or character, express or implied, with respect thereto, and Landlord shall not be liable for any latent or patent defect therein, except as may be expressly provided under the Pre-Occupancy Agreement or this Lease. No promise of Landlord to construct. alter, remodel or improve the Premises, or to contribute funds toward the construction, alteration, remodeling or improvement of the Premises, has been made by Landlord to Tenant other than as may be expressly contained herein or in the Pre-Occupancy Agreement. Landlord represents and warrants to Tenant that it is the fee simple owner of the Land. Landlord also hereby represents and warrants to Tenant that this Lease, and Tenant’s proposed use of the Facility as described herein and constructed pursuant to the Pre-Occupancy Agreement comply (or shall comply, as applicable) with the Declaration. Landlord further represents and warrants to Tenant that as of the Commencement Date of the Term, the Facility shall comply with all then applicable Legal Requirements (including any administrative and judicial interpretations thereof), and the Declaration, as the same are in existence as of the Commencement Date. Landlord agrees that any violations of such then applicable Legal Requirements which are subsequently discovered to have been in existence as of the Commencement Date shall be deemed to be a Covered Defect under the Amli Warranty; provided, however, that: (i) Landlord is notified in writing of such existing violation during the Amli Warranty Period; and (ii) the violation of such then applicable Legal Requirement did in fact exist as of the Commencement Date; and (iii) the violation does not constitute and/or was not caused by an Amli Warranty Exclusion. Anything in this Lease to the contrary notwithstanding, the representation, warranty and agreement of Landlord as provided in the preceding two sentences shall survive the Commencement Date for the duration of the Amli Warranty Period, it being expressly understood and agreed that said representation, warranty and agreement shall expire concurrently with the Amli Warranty, except with respect to any such existing violation which (a) Landlord had been notified of during the Amli Warranty Period, and (b) is a Covered Defect under the Amli Warranty as hereinabove provided. For purposes of this Section 10, the terms “Covered Defect,” “Amli Warranty,” “Amli Warranty Period” and “Amli Warranty Exclusion” shall have the meanings provided such terms in the Pre-Occupancy Agreement.

 

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11. POSSESSION . Landlord makes no representation, warranty or guarantee that the Premises (or any part thereof) will be substantially ready for occupancy on any specific date. Except as set forth in the Pre-Occupancy Agreement, this Lease shall continue in full force and effect regardless of any delay in the Commencement Date, and no liability shall arise against Landlord out of any such delay other than as may be set forth in the Pre-Occupancy Agreement. If Tenant shall take possession of all or any part of the Premises prior to the Commencement Date, all of the covenants and conditions of this Lease shall be binding upon the parties hereto as if the Commencement Date had been fixed as of the date when Tenant took such possession, and Tenant’s obligation to pay Rent prior to the Commencement Date shall be governed by the terms of Section 14.2 and 14.3(b) of the Pre-Occupancy Agreement.

12. ASSIGNMENT AND SUBLETTING . Tenant may not, without Landlord’s prior written approval, which approval may not be unreasonably withheld or delayed: (a) assign, convey or mortgage this Lease or any interest hereunder; (b) permit any assignment of, or lien upon this Lease or Tenant’s interest herein by operation of law; (c) sublet the Premises or any part thereof; or (d) permit the use of the Premises by any parties other than Tenant, its agents and employees. The acts and events described in clauses (a)-(d) of the preceding sentence are referred to herein collectively as “Transfers” and individually as a “Transfer” . It shall be “reasonable” grounds for the withholding or delaying by Landlord of its consent to a Transfer if Landlord’s mortgagee of the Premises disapproves of such Transfer on a reasonable basis or delays its response thereto for a period of not more than fifteen (15) additional days. Tenant shall give Landlord written notice of any proposed sublease or assignment at least thirty (30) days prior to the proposed effective date of such proposed sublease or assignment, which notice shall contain the name of the proposed sublessee or assignee, the proposed use of the Premises, the proposed principal terms thereof, and such other information as Landlord may reasonably request to evaluate the character, reputation and creditworthiness of the proposed assignee or sublessee.

 

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If Tenant is permitted to assign this Lease or sublease all or any portion of the Premises, regardless of whether Landlord’s consent is required hereunder, Tenant agrees to pay to Landlord as Additional Rent 75% of any Sublease Profits derived by Tenant from such assignment or sublease. If the proposed use of the Premises may, in Landlord’s judgment, exercised reasonably and in good faith, create greater environmental risks to Landlord or the Premises relative to Tenant’s use of the Premises on the Commencement Date, Landlord may withhold its consent (and such withholding shall be deemed reasonable) until Landlord and such assignee or sublessee agree to amend this Lease to address such increased environmental risks to Landlord’s reasonable satisfaction; provided, however, that if Landlord determines, in its sole discretion, that such increased environmental risks cannot be adequately addressed through an amendment to this Lease, Landlord may withhold its consent, and such withholding shall be deemed reasonable. Landlord may, in lieu of consenting to a reasonable assignment or sublease of the entire Premises, elect to cancel the Lease. If Landlord wishes to exercise the foregoing cancellation option, Landlord shall, within thirty (30) days after Landlord’s receipt of Tenant’s notice of proposed assignment or sublease, send to Tenant a notice so stating and in such notice Landlord shall specify the date as of which such cancellation shall be effective, which date shall be between the proposed effective date for the proposed assignment or sublease and the date which is sixty (60) days thereafter. In the event of any such election by Landlord, Tenant may, within fifteen (15) days of Tenant’s receipt of Landlord’s cancellation notice, elect to rescind its request for consent and thereby vitiate Landlord’s cancellation election.

Landlord’s consent to any assignment, subletting or transfer, or Landlord’s election to accept any assignee, sublessee or transferee as Tenant hereunder, shall not release the original Tenant from any covenant or obligation under this Lease. However, Landlord’s election to cancel this Lease shall, upon the effective date of such cancellation, release Tenant from any and all obligations arising or accruing from and after the date any such cancellation becomes effective. Landlord’s consent to any assignment or subletting shall not constitute a waiver of Landlord’s right to consent to any future assignment or subletting. If, with respect to any permitted assignment or sublease hereunder, Landlord does not, or is not entitled to, exercise the cancellation right as hereinabove provided, then any proposed assignment or sublease agreement shall be expressly subject to all the terms, conditions and covenants of this Lease and Landlord’s prior written consent, which consent shall not be unreasonably withheld or denied. Any proposed assignment shall contain an express written assumption by assignee of all Tenant’s liabilities and obligations under this Lease. Any proposed sublease shall: (i) provide that the sublessee shall procure and maintain policies of insurance as required of Tenant under Section 22.2 hereof; (ii) contain a provision for the benefit of Landlord, substantially in the form set forth in Section 22.1 hereof; (iii) provide for a copy to Landlord of notice of default by either party; and (iv) otherwise be reasonably acceptable in form to Landlord.

Subject to all of the other terms and conditions of this Section 12, Tenant may, without Landlord’s prior consent, without being subject to Landlord’s cancellation election and without the application of the division of Sublease Profits as set forth in the fifth sentence of the preceding paragraph: (i) assign this Lease or sublease all or any portion of the Premises to Tenant’s parent corporation or any subsidiary or affiliated corporation (collectively, a “Related Entity”) or any entity that is controlled by or under common control with a Related Entity; or (ii) assign this Lease to any corporation resulting from a merger or consolidation or to any person, corporation or other entity which acquires all or substantially all of the assets of Tenant including, without limitation, the trademark or trade name of Tenant; or (iii) assign this Lease to any person, corporation or other entity which acquires control of Tenant; provided, however, in each instance that the “Base Net Worth” (as defined in Section 40 below) requirements of this Lease continue to be satisfied, and Tenant is not in Default hereunder at such time. For purposes of the foregoing, the word “control” shall mean and refer to the

 

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ownership of in excess of fifty percent (50%) of the voting stock in any corporation, or of the shares or other indicia of ownership in any limited liability company, or of the general partners’ interests in any partnership.