EXHIBITS AND RIDERS

 

The following Exhibits and Riders are attached hereto and by this reference made a part of this Lease:

 

EXHIBIT A	–	FLOOR PLAN OF THE PREMISES
EXHIBIT B	–	THE LAND
EXHIBIT C	–	RENT SCHEDULE
RIDER NO. 1	–	RULES AND REGULATIONS

 

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (“this Lease”) is made and entered into by and between BioStart Property Group, LLC, a Delaware limited liability company (“Landlord”) and Advanced Life Sciences, Inc., an Illinois Corporation (“Tenant”), upon all the terms set forth in this Lease and in all Exhibits and Riders hereto, to each and all of which terms Landlord and Tenant hereby mutually agree, and in consideration of One Dollar ($1.00) and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and of the rents, agreements and benefits flowing between the parties hereto, as follows:

 

ARTICLE 1 - BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS

 

Section 1.1  Each reference in this Lease to information and definitions contained in the Basic Lease Information and Certain Definitions and each use of the terms capitalized and defined in this Section 1.1 shall be deemed to refer to, and shall have the respective meaning set forth in, this Section 1.1.

 

A.	Premises:		The portion of the Building, presently known as 1440 Davey Road, as said space is identified by diagonal lines on the floor plans attached hereto as Exhibit A.
B.	Building:		The building commonly known as 1440 Davey Road, Woodridge, Illinois.
C.	Land:		That certain parcel of real estate described in Exhibit B attached hereto.
D.	Project:		The Land and all improvements thereon, including the Building and all Common Areas.
E.	Commencement Date:		That certain date on which the Term shall commence, as determined pursuant to the provisions of Article 3 hereof.
F.	Expiration Date:		The last day of the third (3 rd ) Lease Year (defined below).
G.	Term:		Three (3) Lease Years. The first “Lease Year” shall be the period from the Commencement Date to the last day of the twelfth (12th) full calendar month following the calendar month in which the Commencement Date occurs. Thereafter, each consecutive twelve (12) calendar month period shall constitute one (1) Lease Year. Notwithstanding anything contained herein to the contrary, if the Commencement Date occurs on the first (1st) day of a calendar month, the first Lease Year shall be twelve (12) full calendar months.

 

 

			The term may be renewed by sixty (60) days prior written notice by Tenant.
H.	Rentable Area of the Premises:		Landlord and Tenant agree that for all purposes of this Lease the Rentable Area of the Premises shall be deemed to be 9,440 square feet.
I.	Rentable Area of the Building:		Landlord and Tenant agree that for all purposes of this Lease the Rentable Area of the Building shall be deemed to be 9,440 square feet.
J.	Tenant’s Share:		23% of the Building
K.	Rent:		The Base Rent and any Additional Rent.
L.	Base Rent:		The Base Rent shall be the amounts set forth on the Base Rent Schedule attached hereto as Exhibit C, subject to such increases as may be provided herein.
M.	Additional Rent:		The Additional Rent shall be all other sums due and payable by Tenant under the Lease, including, but not limited to, Tenant’s Share of Operating Costs.
N.	Intentionally deleted
O.	Tenant’s Permitted Uses:		Tenant may use the Premises for general office purposes.
P.	Security Deposit:		As set forth in Article 21 herein.
Q.	Landlord’s Address for Notice:		BioStart Property Group, LLC
			1440 Davey Road, Woodridge, Illinois 60517
			Attention: Colleen Crafferty
R.	Landlord’s Address for Payment:		BioStart Property Group, LLC
			1440 Davey Road, Woodridge, Illinois 60517
			Attention: Colleen Crafferty

 

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V.	Tenant’s Address for Notice:		Advanced Life Sciences
			1440 Davey Road, Woodridge, Illinois  60517

 

ARTICLE 2 - PREMISES AND QUIET ENJOYMENT

 

Section 2.1  Landlord hereby leases the Premises to Tenant, and Tenant hereby rents and hires the Premises from Landlord, for the Term.  During the Term, Tenant shall have the right to use, in common with others and in accordance with the Rules and Regulations (as set forth in Rider No. 1 of the Lease), the Common Areas.  Tenant shall be subject to the terms, conditions and provisions of any and all ground leases, deeds to secure debt, mortgages, restrictive covenants, easements and other encumbrances now or hereafter affecting the Premises or the Project (“Encumbrances”).

 

Section 2.2  Provided that Tenant fully and timely performs all the terms of this Lease on Tenant’s part to be performed, including payment by Tenant of all Rent, Tenant shall have, hold and enjoy the Premises during the Term without hindrance or disturbance from or by Landlord; subject, however, to all of the terms, conditions and provisions of any and all Encumbrances.

 

ARTICLE 3 - TERM; COMMENCEMENT DATE;
DELIVERY AND ACCEPTANCE OF PREMISES

 

Section 3.1  The Commencement Date shall be October 1, 2009.

 

Section 3.2  Occupancy of the Premises or any portion thereof by Tenant or anyone claiming through or under Tenant shall be conclusive evidence that Tenant and all parties claiming through or under Tenant (a) have accepted the Premises or such portion in its as is condition as suitable for the purposes for which the Premises are leased hereunder and the needs of Tenant, and (b) have waived any rights or claims arising from any defects in the Premises and the Project.

 

ARTICLE 4 - RENT

 

Section 4.1  Tenant shall pay to Landlord, without notice, demand, offset or deduction, in lawful money of the United States of America, at Landlord’s Address for Payment, or at such other place as Landlord shall designate in writing from time to time: (a) the Base Rent in equal monthly installments, in advance, on the first day of each calendar month during the Term, and (b) the Additional Rent, at the respective times required hereunder.  The first monthly installment of Base Rent and the Additional Rent payable under Article 5 hereof shall be paid in advance on the date of Tenant’s execution of this Lease and applied to the first installments of Base Rent and such Additional Rent coming due under this Lease.  Payment of Rent shall begin on the Commencement Date; provided, however, that, if either the Commencement Date or the Expiration Date falls on a date other than the first day of a calendar month, the Rent due for such fractional month shall be prorated on a per diem basis between Landlord and Tenant so as to charge Tenant only for the portion of such fractional month falling within the Term.

 

Section 4.2  All installments of Rent which are not paid within five (5) days after their due date shall be subject to a late charge of five percent (5%) of the amount of the late payment and shall further bear interest until paid at a rate per annum (the “Interest Rate”) equal to the greater of fifteen percent (15%) or four percent (4%) above the prime rate of interest from time to time listed in the Wall Street Journal; provided, however, that, if at the time such interest is sought to be imposed the rate of interest exceeds the maximum rate permitted under federal law or under the laws of the State of Illinois, the rate

 

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of interest on such past due installments of Rent shall be the maximum rate of interest then permitted by applicable law.

 

Section 4.3 Base Rent shall increase by 2.5-3% each year on the anniversary of the Commencement Date set forth on the Base Rent Schedule attached hereto as Exhibit C.

 

ARTICLE 5- OPERATING COSTS

 

Section 5.1  Concurrently with the first payment of Base Rent hereunder and on the first day of each calendar month during the Term, Tenant shall pay to Landlord, as Additional Rent, an amount (“Tenant’s Operating Costs Payment”) of money equal to Tenant’s Share of Operating Costs, for each year or fractional year during the Term, such amount to be calculated and paid as follows:

 

A.            Within sixty (60) days following the Commencement Date, and on the first day of January of each year during the Term thereafter, or as soon thereafter as is practicable, Landlord may furnish Tenant with a statement (“Landlord’s Operating Costs Estimate”) setting forth Landlord’s reasonable estimate of Operating Costs as adjusted pursuant to Section 5.3 for the forthcoming year and Tenant’s Operating Costs Payment for such year, as adjusted pursuant to Section 5.3.  On the first day of each calendar month during such year, Tenant shall pay to Landlord one-twelfth (1/12th) of Tenant’s Operating Costs Payment as estimated on Landlord’s Operating Costs Estimate.  If during any calendar year actual Operating Costs differ from Landlord’s Operating Costs Estimate for such calendar year, Landlord may send Tenant a revised Landlord’s Operating Costs Estimate, and, upon receipt thereof, Tenant shall thereafter make monthly payments as set forth in the revised Landlord’s Operating Cost Estimate.  If for any reason Landlord has not provided Tenant with Landlord’s Operating Costs Estimate on the first day of January of any year during the Term, then (a) until the first day of the calendar month following the month in which Tenant is given Landlord’s Operating Costs Estimate, Tenant shall continue to pay to Landlord on the first day of each calendar month the sum, if any, payable by Tenant under this Section 5.1 for the month of December of the preceding year, and (b) promptly after Landlords’ Operating Costs Estimate is furnished to Tenant, Landlord shall give notice to Tenant stating whether the installments of Tenant’s Operating Costs Payments previously made for such year were greater or less than the installments of Tenant’s Operating Costs Payments to be made for such year, and (i) if there shall be a deficiency, Tenant shall pay the amount thereof to Landlord within thirty (30) days after the delivery of Landlord’s Operating Costs Estimate, or (ii) if there shall have been an overpayment, Landlord shall apply such overpayment as a credit against the next accruing monthly installment(s) of Tenant’s Operating Costs Payment due from Tenant until fully credited to Tenant (or if there is no further installment of Tenant’s Operating Costs Payment due by Tenant, then Landlord shall remit such overpayment directly to Tenant), and (iii) on the first day of the calendar month following the month in which Landlord’s Operating Costs Estimate is given to Tenant and on the first day of each calendar month throughout the remainder of such year, Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of Landlord’s Operating Costs Estimate.

 

B.            On the last day of March of each year during the Term (beginning on the last day of March of the first year following the year in which the Commencement Date occurs), or as soon thereafter as is practicable, Landlord shall furnish Tenant with a statement of the actual Operating Costs as adjusted pursuant to Section 5.3, for the preceding year.  Within thirty (30) days after Landlord’s giving of such statement, Tenant shall make a lump sum payment to Landlord in the amount, if any, by which Tenant’s Operating Costs Payment for such preceding year as shown on such Landlord’s statement, exceeds the aggregate of the monthly installments of Tenant’s Operating Costs Payments paid during such preceding year.  If Tenant’s Operating Costs Payment, as shown on such Landlord’s statement, is less than the aggregate of the monthly installments of Tenant’s Operating Costs Payment actually paid by Tenant during such preceding year, then Landlord shall apply such amount to the next accruing monthly

 

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installment(s) of Tenant’s Operating Costs Payment due from Tenant until fully credited to Tenant (or if there is no further installment of Tenant’s Operating Costs Payment due by Tenant, then Landlord shall remit such overpayment directly to Tenant).

 

C.            If the Term ends on a date other than the last day of December, the actual Operating Costs for the year in which the Expiration Date occurs, shall be prorated so that Tenant shall pay that portion of Tenant’s Operating Costs Payment for such year represented by a fraction, the numerator of which shall be the number of days during such fractional year falling within the Term, and the denominator of which is 365 (or 366, in the case of a leap year).  The provisions of this Section 5.1 shall survive the Expiration Date or any sooner termination provided for in this Lease.

 

Section 5.2   A.  For purposes of this Lease, the term “Operating Costs” shall mean any and all expenses, costs and disbursements of every kind which Landlord pays, incurs or becomes obligated to pay in connection with the operation, management, repair and maintenance of all or any portion of the Project.  All Operating Costs shall be determined according to generally accepted accounting principles which shall be consistently applied.  Operating Costs include, without limitation, the following:  (a)  Wages, salaries, benefits and fees (including all reasonable education, travel and professional fees) of all personnel or entities engaged in the operation, repair, maintenance, management, or safekeeping of the Project, including taxes, insurance, and benefits relating thereto and the costs of all supplies and materials (including work clothes and uniforms) used in the operation, repair, maintenance and security of the Project; (b) Cost of performance by Landlord’s personnel of, or of all service agreements for, maintenance, janitorial services, access control, alarm service, window cleaning, elevator maintenance and landscaping for the Project.  Such cost shall include the rental of personal property and equipment used by Landlord’s personnel and others in the maintenance and repair of the Project; (c) Cost of utilities for the Project, including water, sewer, gas, fuel and Common Area power, electricity, lighting and air-conditioning, heating and ventilating; (d) Cost of all insurance, including casualty and liability insurance applicable to the Project and to Landlord’s equipment, fixtures and personal property used in connection therewith, business interruption or rent insurance against such perils as are commonly insured against by prudent landlords, such other insurance as may be required by any lessor or mortgagee of Landlord, and such other insurance which Landlord considers reasonably necessary in the operation of the Project, together with all appraisal and consultants’ fees in connection with such insurance and, with respect to any claim under such insurance, the amount of any deductible; (e) All Taxes; and (f) all community maintenance fees.  For purposes hereof, the term “Taxes” shall mean, all taxes, assessments, and other governmental charges, applicable to or assessed against the Project or any portion thereof, or applicable to or assessed against Landlord’s personal property used in connection therewith, whether federal, state, county, or municipal and whether assessed by taxing districts or authorities presently taxing the Project or the operation thereof or by other taxing authorities subsequently created, or otherwise, and any other taxes and assessments attributable to or assessed against all or any part of the Project or its operation; including any reasonable expenses, including fees and disbursements of attorneys, tax consultants, arbitrators, appraisers, experts and other witnesses, incurred by Landlord in contesting any taxes or the assessed valuation of all or any part of the Project.  Tenant acknowledges that Taxes “for” a given calendar year are those Taxes which accrue and are assessed for the Project in such calendar year even if paid in a later year.  If at any time during the Term there shall be levied, assessed, or imposed on Landlord or all or any part of the Project by any governmental entity any general or special ad valorem or other charge or tax directly upon rents received under leases, or if any fee, tax, assessment, or other charge is imposed which is measured by or based, in whole or in part, upon such rents, or if any charge or tax is made based directly or indirectly upon the transactions represented by leases or the occupancy or use of the Project or any portion thereof, such taxes, fees, assessments or other charges shall be deemed to be Taxes.  Notwithstanding the foregoing, any (A)  franchise, corporation, income or net profits tax, unless substituted for real estate taxes or imposed as additional charges in connection with the ownership of the Project, which may be assessed against Landlord or the Project or both, (B) transfer taxes assessed against

 

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Landlord or the Project or both, (C) penalties or interest on any late payments of Landlord and, (D) personal property taxes of Tenant or other tenants in the Project shall be excluded from Taxes.  If any or all of the Taxes paid hereunder are by law permitted to be paid in installments, notwithstanding how Landlord pays the same, then, for purposes of calculating Operating Costs, such Taxes shall be deemed to have been divided and paid in the maximum number of installments permitted by law, and there shall be included in Operating Costs for each year only such installments as are required by law to be paid within such year, together with interest thereon and on future such installments as provided by law; (f) Legal and accounting costs incurred by Landlord or paid by Landlord to third parties (exclusive of legal fees with respect to disputes with individual tenants, negotiations of tenant leases, or with respect to the ownership rather than the operation of the Project), appraisal fees, consulting fees, all other professional fees and disbursements and all association dues; (g) Cost of non-capitalized repairs and general maintenance for the Project (excluding repairs and general maintenance paid by proceeds of insurance or by Tenant, other tenants of the Project or other third parties); (h) Amortization of the cost of improvements or equipment which are capital in nature and which (i) are for the purpose of reducing Operating Costs for the Project, up to the amount saved as a result of the installation thereof, as reasonably estimated by Landlord, or (ii) enhance the Project for the general benefit of tenants or occupants thereof, or (iii) are required by any governmental authority, or (iv) replace any Building equipment needed to operate the Project at the same quality levels as prior to the replacement.  All such costs, including interest thereon, shall be amortized on a straight-line basis over the useful life of the capital investment items, as reasonably determined by Landlord, but in no event beyond the reasonable useful life of the Project; (i) the Project management office rent or rental value of the Project management office and any conference rooms of the Building made available by Landlord for common use by tenants of the Building; and (j) a management fee (whether or not Landlord engages a manager for the Project or manages the Project with Landlord’s personnel) and all items reimbursable to the Project manager, if any, pursuant to any management contract for the Project.

 

B.            “Operating Costs” shall not include (a) specific costs for any capital repairs, replacements or improvements, except as provided above; (b) expenses for which Landlord is reimbursed or indemnified (either by an insurer, condemner, tenant, warrantor or otherwise) to the extent of funds received by Landlord; (c) expenses incurred in leasing or procuring tenants (including lease commissions, advertising expenses and expenses of renovating space for tenants); (d) payments for rented equipment, the cost of which would constitute a capital expenditure not permitted pursuant to the foregoing if the equipment were purchased; (e) interest or amortization payments on any mortgages; (f) net basic rents under ground leases; (g) costs representing an amount paid to an affiliate of Landlord which is in excess of the amount which would have been paid in the absence of such relationship; or (h) costs specially billed to and paid by specific tenants.  There shall be no duplication of costs or reimbursements.

 

Section 5.3  If the Building is not fully occupied (meaning one-hundred percent (100%) of the Rentable Area of the Building) during any full or fractional year of the Term, components of the actual Operating Costs which vary with the level of occupancy shall be adjusted for such year to an amount which Landlord estimates would have been incurred in Landlord’s reasonable judgment had the Building been fully occupied.

 

ARTICLE 6 — RIGHT OF FIRST NEGOTIATION

 

Section 6.1  Tenant is hereby granted a Right of First Negotiation (as hereinafter defined) to lease the portions of the Building not included in the Premises, identified as Parcel A, Parcel B, and Parcel C on the floor plans attached hereto as Exhibit A, as of the Effective Date of this Agreement.   The “Right of First Negotiation” shall mean the exclusive right, for a period of thirty (30) days after notification by BioStart (Notice of Negotiation), to negotiate, agree upon and execute an amendment to this Agreement

 

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that elects to add additional space to the Premises.  Such period shall commence on the receipt of Notice of Negotiation by Tenant from Landlord.  Landlord shall present the Notice of Negotiation to Tenant prior to entering into any lease agreement for any portion of space within the Building (each a “Negotiable Parcel”) to a third party.  Such Notice of Negotiation shall describe the boundaries of the Negotiable Parcel and disclose the proposed terms and conditions relating to the lease of Negotiable Parcel and any other material facts.  Tenant and Landlord shall negotiate in good faith with each other during such period of negotiation.  If such thirty (30) day period expires and an amendment has not been executed for the Negotiable Parcel, Landlord may thereafter enter into a lease agreement for the Negotiable Parcel with any third party.

 

ARTICLE 7 - SERVICES OF LANDLORD

 

Section 7.1   A.  During the Term, on each Business Day (as defined in Article 27), Landlord shall furnish Tenant with the following services: (a) hot and cold water in Building Standard bathrooms and drinking water; (b) permit Tenant to use Central systems, such as then existing feeders and risers, to obtain electrical power from the utility supplier sufficient for lighting the Premises and for the operation therein of equipment which consume a reasonable amount of watts per square foot of Rentable Area of the Premises; (c) heating, ventilating or air-conditioning, as appropriate, to the Premises and the Common Areas of the Project, during Business Hours; (d) electric lighting for the Common Areas; (e) facilities for Tenant’s loading, unloading, delivery and pick-up activities, including access thereto during Business Hours, subject to the Rules and Regulations, the type of facilities, and other limitations of such loading facilities; and (f)  All services referred to in this Section 7.1A shall be provided by Landlord and paid for by Tenant as part of Tenant’s Operating Costs Payment.  At no time shall use of electricity in the Premises exceed the capacity of existing feeders and risers to or wiring in the Premises.  Any risers or wiring to meet Tenant’s reasonable excess electrical requirements shall, upon Tenant’s written request, be installed by Landlord, at Tenant’s sole cost, if, in Landlord’s reasonable judgment, the same are necessary and shall not (i) cause permanent damage or injury to the Project, the Building or the Premises, (ii) cause or create a dangerous or hazardous condition, (iii) entail excessive or unreasonable alterations, repairs or expenses or (iv) interfere with or disturb other tenants or occupants of the Building.

 

B.            If Tenant requires services, routinely supplied by Landlord for hours or days in addition to the hours and days specified in Section 7.1A, Landlord shall make reasonable efforts to provide such additional service after reasonable prior written request therefor from Tenant, and Tenant shall reimburse Landlord for the cost of such additional service; provided however, that, if any other tenants in the Building served by the equipment providing such additional service to the Premises request that Landlord concurrently provide such service to such other tenants, the cost of Landlord’s providing such additional and concurrent service shall be prorated among all of the tenants requesting such service.  Landlord shall have no obligation to provide any additional service to Tenant at any time Tenant is in default under this Lease unless Tenant pays to Landlord, in advance, the cost of such additional service.  If any machinery or equipment which generates abnormal heat or otherwise creates unusual demands on the air-conditioning or heating system serving the Premises is used in the Premises and if Tenant has not, within five (5) days after demand from Landlord, taken such steps, at Tenant’s expense, as shall be necessary to cease such adverse affect on the air- conditioning or heating system, Landlord shall have the right to install supplemental air-conditioning or heating units in the Premises, and the full cost of such supplemental units (including the cost of acquisition, installation, operation, use and maintenance thereof) shall be paid by Tenant to Landlord in advance or on demand as Additional Rent.

 

Section 7.2   Although Landlord permits Tenant to use the Central systems as more fully provided in Section 7.1A above, except as set forth in Section 7.1A, Landlord shall not be obligated to furnish

 

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utility services to the Premises.  Tenant shall make all necessary arrangements with the public utility or alternative utility service suppliers (“Suppliers”) supplying electric, gas, telephone, cable or other utility services to the Premises, and shall be subject to the rules and regulations of the Suppliers of such services and the rules and regulations of any municipal or other governmental authority regulating the business of providing such services.  Tenant shall be responsible for contracting promptly and directly with such Suppliers and for paying all deposits for, and all costs relating to, such services, so that services are available to the Premises for Tenant’s use on the Commencement Date.  Tenant shall cooperate with Landlord and Suppliers at all times and, as reasonably necessary, shall allow Landlord and the Suppliers reasonable access to the lines, feeders, risers, wiring, pipes, meters and any other machinery within the Premises.

 

Section 7.3   Landlord shall in no way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by reason of any change, failure, interference, disruption, or defect in the supply or character of the utility services furnished to the Premises, or if the quantity or character of the utility services supplied by the Suppliers is no longer available or suitable for Tenant’s requirements, and no such change, failure, defect, unavailability, or unsuitability shall constitute an actual or constructive eviction, in whole or in part, will entitle Tenant to any abatement or diminution of Rent or relieve Tenant from any of its obligations under this Lease.  Should any malfunction of any systems or facilities occur within the Project or should maintenance or alterations of such systems or facilities become necessary, Landlord shall repair the same promptly and with reasonable diligence, and Tenant shall have no claim for rebate, abatement of Rent, or damages because of malfunctions or any such interruptions in service.  Notwithstanding the foregoing, in the event there is failure, delay or interruption of utility services due to any event covered by rent loss insurance which is not caused by Tenant or its agents, employees, representative, contractors, sublessees,  licensors or invitees and which causes the Premises (or any portion thereof) to be untenantable or prohibits access to the Premises, and as a result of either occurrence, Tenant in fact ceases to use the Premises (or any portion thereof) for a period in excess of five (5) consecutive Business Days, then commencing on the sixth (6 th ) consecutive Business Day of such untenantability and non-use, Rent payable by Tenant for the untenantable portion of the Premises shall be abated until the earliest to occur of (a) the date such failure, delay or interruption is remedied, (b) the date the Premises are again tenantable or (c) the date Tenant resumes use of the Premises.

 

ARTICLE 8 - ASSIGNMENT AND SUBLETTING

 

Section 8.1  Neither Tenant nor its legal representatives or successors in interest shall, by operation of law or otherwise, assign, mortgage, pledge, encumber or otherwise transfer this Lease or any part hereof, or the interest of Tenant under this Lease, or in any sublease or the rent thereunder.  The Premises or any part thereof shall not be sublet, occupied or used for any purpose by anyone other than Tenant, without Tenant’s obtaining in each instance the prior written consent of Landlord, which consent, subject to the provisions of Section 8.4 below, shall not be unreasonably withheld or delayed.  Tenant shall not modify, extend, or amend a sublease previously consented to by Landlord without obtaining Landlord’s prior written consent thereto, which consent, subject to the provisions of Section 8.4 below, shall not be unreasonably withheld or delayed.

 

Section 8.2  An assignment of this Lease shall be deemed to have occurred (a) if in a single transaction or in a series of transactions more than 50% in interest in Tenant, any guarantor of this Lease, or any subtenant (whether stock, partnership, interest or otherwise) is transferred, diluted, reduced, or otherwise affected with the result that the present holder or owners of Tenant, such guarantor, or such subtenant have less than a 50% interest in Tenant, such guarantor or such subtenant, or (b) if Tenant’s obligations under this Lease are taken over or assumed in consideration of Tenant leasing space in another office building.  The transfer of the outstanding capital stock of any corporate Tenant, guarantor or subtenant through the “over-the-counter” market or any recognized national securities exchange (other

 

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than by persons owning 5% or more of the voting calculation of such 50% interest of clause 8.2(a) above) shall not be included in the calculation of such 50% interest in clause (a) above.

 

Section 8.3  Notwithstanding anything to the contrary in Section 8.1, upon ten (10) days’ prior written notice to Landlord and approval by Landlord, which approval shall not be unreasonably withheld, Tenant may (a) sublet all or part of the Premises to any related corporation or other entity which controls Tenant, is controlled by Tenant or is under common control with Tenant; or (b) assign this Lease to a successor corporation or other entity into which or with which Tenant is merged or consolidated or which acquired substantially all of Tenant’s assets and property; provided that (i) such successor corporation assumes substantially all of the obligations and liabilities of Tenant and shall have a net worth at least equal to the net worth of Tenant as of the date of this Lease as determined by generally accepted accounting principles, and (ii) Tenant shall provide in its notice to Landlord the information required in Section 8.4.  For the purpose hereof “control” shall mean ownership of not less than 50% of all the voting stock or legal and equitable interest in such corporation or entity.

 

Section 8.4  If Tenant should desire to assign this Lease or sublet the Premises (or any part thereof), Tenant shall give Landlord written notice no later than the time required for notice under Section 8.3 in the case of an assignment or subletting to a related or successor entity as more fully provided under Section 8.3, or thirty (30) days in advance of the proposed effective date of any other proposed assignment or sublease, specifying (a) the name, current address, and business of the proposed assignee or sublessee, (b) the amount and location of the space within the Premises proposed to be so subleased, (c) the proposed effective date and duration of the assignment or subletting, and (d) the proposed rent or consideration to be paid to Tenant by such assignee or sublessee.  Tenant shall promptly supply Landlord with financial statements and other information as Landlord may request to evaluate the proposed assignment or sublease.  For assignments and sublettings other than those permitted by Section 8.3, Landlord shall have a reasonable amount of time following receipt of such notice and other information requested by Landlord within which to notify Tenant in writing that Landlord elects: (i) to terminate this Lease as to the space so affected as of the proposed effective date set forth in Tenant’s notice, in which event Tenant shall be relieved of all further obligations hereunder as to such space, except for provisions of this Lease which expressly survive the termination hereof; or (ii) to permit Tenant to assign or sublet such space; provided, however, that, if the rent rate agreed upon between Tenant and its proposed subtenant is greater than the rent rate that Tenant must pay Landlord hereunder for that portion of the Premises, or if any consideration shall be promised to or received by Tenant in connection with such proposed assignment or sublease (in addition to rent), then fifty percent (50%) of such excess rent and other consideration shall be considered Additional Rent owed by Tenant to Landlord (less brokerage commissions, attorneys’ fees and other disbursements reasonably incurred by Tenant for such assignment and subletting if acceptable evidence of such disbursements is delivered to Landlord), and shall be paid by Tenant to Landlord, in the case of excess rent, in the same manner that Tenant pays Base Rent and, in the case of any other consideration, within ten (10) Business Days after receipt thereof by Tenant; or (iii) to refuse, in Landlord’s reasonable discretion, to consent to Tenant’s assignment or subleasing of such space and to continue this Lease in full force and effect as to the entire Premises.  The parties agree that Landlord may reasonably refuse to consent to an assignment or subletting if the proposed assignee or subtenant is not consistent with the standards of a high quality office and laboratory building or that will impose an excessive demand on or use of the facilities or services of the Building, is a current tenant or subtenant of the Project or is a prospective tenant to whom Landlord has offered to lease space in the Project; provided, however, that the foregoing are merely examples of reasons for which Landlord may withhold its approval and shall not be deemed exclusive of any permitted reasons for reasonably withholding approval, whether similar or dissimilar to the foregoing examples.  It shall also be reasonable for Landlord to refuse to consent to any assignment or subletting if (i) an Event of Default by Tenant then exists under this Lease, or (ii) such assignment or subletting would cause a default under another lease in the Building or under any Encumbrance, or (iii) any portion of the Building or Premises

 

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would likely become subject to additional or different laws as a consequence of the proposed assignment or subletting.  Whether or not Landlord approves of a proposed assignment or sublet, Tenant agrees to reimburse Landlord as Additional Rent for reasonable and customary legal fees, a reasonable administrative fee and any other reasonable costs incurred by Landlord in connection with any proposed assignment or subletting.  Tenant shall deliver to Landlord copies of all documents executed in connection with any permitted assignment or subletting, which documents shall be in form and substance reasonably satisfactory to Landlord and which shall require any assignee to assume performance of all terms of this Lease to be performed by Tenant or any subtenant to comply with all the terms of this Lease to be performed by Tenant.  No acceptance by Landlord of any Rent or any other sum of money from any assignee, sublessee or other category of transferee shall be deemed to constitute Landlord’s consent to any assignment, sublease, or transfer.

 

Unless otherwise agreed to in writing by Landlord, no such assignment or sublease shall release Tenant from any of its obligations under this Lease.

 

Section 8.5  A.  Tenant acknowledges that this Lease is a lease of nonresidential real property and therefore agrees that Tenant, as the debtor in possession, or the trustee for Tenant (collectively the “Trustee”) in any proceeding under Title 11 of the United State Bankruptcy Code relating to Bankruptcy, as amended (the “Bankruptcy Code”), shall not seek or request any extension of time to assume or reject this Lease or to perform any obligations of this Lease which arise from or after the order of relief.

 

B.            The Trustee shall have the right to assume or assign Tenant’s rights and obligations under this Lease only if the Trustee: (a) promptly cures or provides adequate assurance that the Trustee will promptly cure any default under the Lease; (b) compensates or provides adequate assurance that the Trustee will promptly compensate Landlord for any actual pecuniary loss incurred by Landlord as a result of Tenant’s default under this Lease; and (c) provides adequate assurance of future performance under the Lease.  All payments of Rent required of Tenant under this Lease, whether or not expressly denominated as such in this Lease, shall constitute rent for the purposes of Title 11 of the Bankruptcy Code.

 

Section 8.6  The term “Landlord,” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners, at the time in question, of the fee title to, or a lessee’s interest in a ground lease of, the Land or the Building.  In the event of any transfer, assignment or other conveyance or transfers of any such title or interest, Landlord herein named (and in case of any subsequent transfers or conveyances of any such title or interest, the then grantor) shall be automatically freed and relieved from and after the date of such transfer, assignment or conveyance of all liability as respects the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed and, without further agreement, the transferee of such title or interest shall be deemed to have assumed and agreed to observe and perform any and all obligations of Landlord hereunder, during its ownership of the Project.  Landlord may transfer its interest in the Project, or portions thereof on interest therein, without the consent of Tenant and such transfer or subsequent transfer shall not be deemed a violation on Landlord’s part of any of the terms of this Lease

 

ARTICLE 9 - REPAIRS

 

Section 9.1   Except for ordinary wear and tear, Landlord shall perform all maintenance and make all repairs and replacements to the Premises (including the Leasehold Improvements).  Tenant shall pay to Landlord as Additional Rent the cost for (a) all maintenance, repairs and replacements within the Premises (including the Leasehold Improvements), other than (i) repairs and replacements necessitated by the willful misconduct or negligence of Landlord or its agents, employees, contractors, invitees or licensees to the extent the cost thereof is not collectible under Tenant’s insurance, or, if Tenant is not

 

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carrying all of the insurance described in Section 14.1A, to the extent such cost would not be covered by the insurance described in Section 14.1A, if the same were in effect, (ii) maintenance, repairs and replacements to the Central systems of the Building located within the Premises; and (iii) services of Landlord described under Article 6 above to the extent the costs of such services are included within Operating Costs; and (b) all repairs and replacements necessitated by damage to the Project (including the Building structure and the Central systems of the Building within the Premises) caused by Tenant or its agents, contractors, invitees and licensees but only to the extent the cost thereof is not collectible under Landlord’s insurance, or, if Landlord is not carrying all of the insurance described in Section 14.2, to the extent that such cost would not be covered by the insurance described in Section 14.2 if the same were in effect.  Amounts payable by Tenant pursuant to this Section 9.1 shall be payable within thirty (30) days after receipt of an invoice therefor from Landlord.  Landlord has no obligation and has made no promise to maintain, alter, remodel, improve, repair, decorate, or paint the Premises or any part thereof, except as specifically set forth in this Lease.  In no event shall Landlord have any obligation to maintain, repair or replace any furniture, furnishings, fixtures or personal property of Tenant.

 

Section 9.2   Subject to the provisions of Section 15 hereinbelow, Landlord shall maintain and make all necessary repairs to the foundations, roof, exterior walls, and structural elements of the Building, the electrical, plumbing, heating, ventilation and air-conditioning systems comprising the Central systems of the Building and the Common Areas of the Building, except that the cost of performing any of said maintenance or repairs, whether to the Premises or to the Building, caused by the negligence of Tenant, its employees, agents, servants, licensees, subtenants, contractors or invitees, shall be paid by Tenant.

 

ARTICLE 10 - ALTERATIONS

 

Section 10.1   Tenant shall not at any time during the Term make any alterations (including “Specialty Alterations” defined below) to the Premises without first obtaining Landlord’s written consent thereto, which consent Landlord shall not unreasonably  withhold or delay; provided, however, that Landlord shall not be deemed unreasonable by refusing to consent to any alterations which are visible from the exterior of the Building or the Project including but not limited to signage, which will or are likely to cause any weakening of any part of the structure of the Premises, the Building or the Project or which will or are likely to cause damage or disruption to the Central Building systems or which are prohibited by any underlying ground lease or mortgage.  “Specialty Alterations” are defined as alterations consisting of kitchens, executive bathrooms, raised computer floors, computer, telephone and telecommunications wiring and cabling in the Premises and Building, computer installations, supplemental air conditioning systems, safe deposit boxes, vaults, libraries or file rooms requiring reinforcement of floors, internal staircases, conveyors, dumbwaiters, and other alterations of a similar character which Landlord designates as Specialty Alterations by written notice delivered to Tenant when Landlord approves Tenant’s plans containing such alterations.  Should Tenant desire to make any alterations to the Premises, Tenant shall submit all plans and specifications for such proposed alterations to Landlord for Landlord’s review before Tenant allows any such work to commence, and Landlord shall promptly approve or disapprove such plans and specifications for any of the reasons set forth in this Section 10.1 or for any other reason reasonably deemed sufficient by Landlord.  Tenant shall select and use only contractors, subcontractors or other repair personnel from those listed on Landlord’s approved list maintained by Landlord in the Project management office.  Upon Tenant’s receipt of written approval from Landlord and any required approval of any mortgagee or lessor of Landlord, and upon Tenant’s payment to Landlord of the reasonable costs incurred by Landlord for such review and approval (including a reasonable fee for the actual time spent by employees of Landlord), Tenant shall have the right to proceed with the construction of all approved alterations, but only so long as such alterations are in strict compliance with the plans and specifications so approved by Landlord and with the provisions of this Article 10.  All alterations shall be made at Tenant’s sole cost and expense.

 

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Section 10.2   All construction, alterations, including Specialty Alterations, and repair work done by or for Tenant pursuant to any provision of this Lease shall (a) be performed in such a manner as to maintain harmonious labor relations; (b) not adversely affect the safety of the Project, the Building or the Premises or the systems thereof and not affect the Central systems of the Building; (c) comply with all building, safety, fire, plumbing, electrical, and other codes and governmental and insurance requirements; (d) not result in any usage in excess of building standard water, electricity, gas, or other utilities or of heating, ventilating or air-conditioning (either during or after such work) unless prior written arrangements satisfactory to Landlord are made with respect thereto; (e) be completed promptly and in a good and workmanlike manner; and (f) not disturb Landlord or other tenants in the Building.