<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
-------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-20580
LIFE MEDICAL SCIENCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 14-1745197
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
379 THORNALL STREET, EDISON, NEW JERSEY 08837
(Address of principal executive offices)
(Zip Code)
(908)494-0444
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $.001 PAR VALUE - 7,914,820 SHARES OUTSTANDING
AT NOVEMBER 6, 1996
<PAGE>
LIFE MEDICAL SCIENCES, INC.
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Statements of Operations (unaudited) for the 3
three month and nine month periods ended September 30,
1995 and 1996
Condensed Balance Sheets as of December 31, 4
1995 and September 30, 1996 (unaudited)
Condensed Statements of Cash Flows (unaudited) for the 5
nine month periods ended September 30, 1995 and 1996
Notes to Condensed Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
Exhibit Index 11
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
LIFE MEDICAL SCIENCES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------------- ---------------------------
1995 1996 1995 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Royalty income $ 42,104 $ 36,085 $ 202,445 $ 127,211
---------- ----------- ---------- -----------
Operating expenses:
Research and development expenses 683,266 712,423 1,661,304 1,669,925
General and administrative expenses 334,489 426,953 920,597 1,329,171
---------- ----------- ---------- -----------
Operating expenses 1,017,755 1,139,376 2,581,901 2,999,096
---------- ----------- ---------- -----------
(Loss) from operations (975,651) (1,103,291) (2,379,456) (2,871,885)
Interest income 58,484 196,303 139,081 355,641
Interest expense (685) (2,131)
Net (loss) $ (917,167) $ (907,673) $(2,240,375) $(2,518,375)
========== ========== =========== ===========
Net (loss) per share $ (0.17) $ (0.12) $ (0.48) $ (0.38)
========== ========== =========== ===========
Weighted average shares outstanding 5,257,051 7,847,497 4,658,939 6,661,228
</TABLE>
3
<PAGE>
LIFE MEDICAL SCIENCES, INC.
BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1995 1996
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,827,530 $ 15,355,637
Other current assets 19,559 275,385
------------ ------------
Total current assets 3,847,089 15,631,022
Furniture and equipment-at cost (less accumulated
depreciation of $41,957 and $63,539) 96,570 105,104
Deposits 21,322 29,490
------------ ------------
TOTAL $ 3,964,981 $ 15,765,616
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Capital lease obligation $ 2,468 $ 2,798
Accounts payable 40,675 97,949
Accrued expenses 147,398 419,676
Total current liabilities 190,541 520,423
------------ ------------
Capital lease obligation 15,160 13,018
Deferred royalty income 643,622 531,734
Other liabilities 14,678 0
------------ ------------
Total liabilities 864,001 1,065,175
Stockholders' equity:
Preferred stock, $.01 par value; shares
authorized - 5,000,000; none issued
Common stock, $.001 par value; shares authorized -
23,750,000; issued and outstanding - 5,422,320 and 7,914,820 5,422 7,915
Additional paid-in capital 19,429,815 33,545,158
Accumulated deficit (16,334,257) (18,852,632)
------------ ------------
Total stockholders' equity 3,100,980 14,700,441
------------ ------------
TOTAL $ 3,964,981 $ 15,765,616
============ ============
</TABLE>
4
<PAGE>
LIFE MEDICAL SCIENCES, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
----------------------------
1995 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $(2,240,375) $(2,518,375)
Adjustments to reconcile net (loss) to net cash (used in) operations:
Depreciation 19,285 21,582
Deferred royalty income (111,888)
Changes in operating assets and liabilities:
Decrease (increase) in other current assets 57,854 (255,826)
Decrease in other receivables 1,000,000
Decrease (increase) in other assets and deposits 64,661 (8,168)
(Decrease) increase in accounts payable, accrued expenses
and other liabilities (17,523) 314,874
----------- -----------
Net cash (used in) operating activities (1,116,098) (2,557,801)
----------- -----------
Cash flows from investing activities:
Purchase of equipment (25,768) (30,116)
----------- -----------
Net cash (used in) investing activities (25,768) (30,116)
----------- -----------
Cash flows from financing activities:
Payments on capitalized lease (1,812)
Proceeds from issuance of common stock, net of expenses 2,645,183 14,117,836
----------- -----------
Net cash provided by financing activities 2,645,183 14,116,024
----------- -----------
Net increase in cash and cash equivalents 1,503,317 11,528,107
Cash and cash equivalents at beginning of period 1,979,615 3,827,530
----------- -----------
Cash and cash equivalents at end of period $ 3,482,932 $15,355,637
=========== ===========
</TABLE>
5
<PAGE>
LIFE MEDICAL SCIENCES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A) BASIS OF PRESENTATION
The accompanying condensed financial statements do not include all of the
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles, but in the
opinion of management, contain all adjustments (which consist of only normal
recurring adjustments) necessary for a fair presentation of such financial
information. Results of operations for interim periods are not necessarily
indicative of those to be achieved for full fiscal years. These condensed
financial statements should be read in conjunction with the audited financial
statements for the year ended December 31, 1995 included in the Company's annual
report on Form 10-K filed with the Securities and Exchange Commission.
B) NET (LOSS) PER SHARE
The net loss per share is computed using the weighted average number of
common shares outstanding during each period. Outstanding options and warrants
have not been considered since their effect would be antidilutive.
C) CAPITAL
The Company's Registration Statement pertaining to its offering of
2,300,000 shares of common stock (initial offering of 2,000,000 shares plus an
additional 300,000 shares issued due to the exercise of the underwriters' over
allotment option) was declared effective by the Securities and Exchange
Commission on May 3, 1996. The proceeds of the offering were approximately
$13.4 million, including proceeds received upon exercise of the underwriters'
over-allotment option and after deducting underwriting discounts and commissions
and offering expenses. The Company intends to use the proceeds from the
offering to fund continued clinical trials, research and development and for
general corporate purposes.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Life Medical Sciences, Inc. (the "Company") is a biotechnology/medical device
company engaged in the development and commercialization of innovative and cost-
effective medical products for therapeutic applications. The Company's proposed
products are derived from its two proprietary platform technologies: (i) its in-
situ (occurring on or at a body site) tissue culturing technology, and (ii) its
polymer technology. Products currently under development focus on wound
healing, stimulating hair regrowth, improving the success rate of autologous fat
transplantation and preventing or reducing post-operative surgical adhesions.
Since its inception, the Company has been engaged primarily in research and
development of its technologies, commercialization of the Sure-Closure/TM
/system ("Sure-Closure") and organizational activities. In September 1993, the
Company began selling the Sure-Closure products. The Company built and
supported a direct sales organization of 24 sales representatives calling on
surgeons. In July 1994, the Company sold its Sure-Closure product line for
initial payments aggregating $4 million plus a 10% royalty on net sales through
June 2004. Following the sale of the Sure-Closure, sales and marketing expenses
were eliminated. To date, all revenue has been derived from sales of the Sure-
Closure products or royalties thereon.
Certain statements under this caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, including, without limitation, statements regarding future cash
requirements. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: delays in product development; problems or delays with clinical
trials; failure to receive or delays in receiving regulatory approval; lack of
enforceability of patents and proprietary rights; or, changes in business
strategy or development plans.
RESULTS OF OPERATIONS
The Company earned revenues from royalties on product sales of Sure-Closure of
$36,085 and $127,211 for the three months and nine months ended September 30,
1996, respectively, which compares to $42,104 and $202,445 for the corresponding
periods of 1995. The royalty income recognized during the three month period
ended September 30, 1996, represents royalties from Sure-Closure product sales
of the second quarter of 1996.
The Company incurred research and development expenses of $712,423 and
$683,266 for the three months ended September 30, 1996 and 1995, respectively,
and $1,669,925 and $1,661,304 for the nine months ended September 30, 1996 and
1995, respectively. These expenses represent expenditures on the Company's in-
situ tissue culturing technology and products derived therefrom, polymer
technology and products derived therefrom and other products. During the nine
month period ended September 30, 1996, the Company's focus of research and
development spending was on preclinical studies and manufacturing issues on its
post-operative surgical adhesion product, REPEL, and on resolving the
manufacturing issues surrounding the lyophilization of the in-situ tissue
culturing technology products, CARIEL and PILIEL. Research and development
spending during the same period during 1995 was on the European clinical trial
for CARIEL and the completion of the preclinical studies for the in-situ tissue
culturing technology products. Research and development expenses are expected
to continue to increase in future quarters as the Company continues to develop
its in-situ tissue culturing technology products and polymer technology products
and expands clinical trials for these and other products.
General and administrative expenses, which consist of compensation for
management, professional fees, investor relations expenses and materials,
consulting expenses and travel expenses, were $426,953 and $334,489 for the
three months ended September 30, 1996 and 1995, respectively, and $1,329,171 and
$920,597 for the nine months ended September 30, 1996 and 1995, respectively.
The increase is attributable to salaries and related expenses associated with
additional management and increased expenses in connection with the investor
relations effort. General and administrative expenses are expected to continue
to increase in future quarters as the Company continues to increase its scale of
operations.
7
<PAGE>
Interest income was $196,303 and $58,484 for the three months ended September
30, 1996 and 1995, respectively and $355,641 and $139,081 for the nine months
ended September 30, 1996 and 1995, respectively. The increase for the periods
presented is primarily attributable to an increased cash balance from the
secondary offering during the second quarter of 1996.
Interest expense of $685 for the three months ended September 30, 1996 and
$2,131 for the nine months ended September 30, 1996 was from a capital lease
entered into to acquire office equipment. There was no interest expense for the
corresponding periods of 1995.
The Company's net loss was $907,673 and $917,167 for the three months ended
September 30, 1996 and 1995, respectively, and $2,518,375 and $2,240,375 for the
nine months ended September 30, 1996 and 1995, respectively. The Company expects
to incur additional losses in the future.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $15,355,637 and $3,827,530 at
September 30, 1996 and December 31, 1995, respectively. The increase in cash
results from the net proceeds of the public offering consummated during the
second quarter of 1996 and the proceeds from the exercise of stock options, less
expenditures made for funding the Company's operations.
In May 1996, the Company completed a public offering of 2,300,000 shares of
common stock (initial offering of 2,000,000 shares plus an additional 300,000
issued due to the exercise of the underwriters' over-allotment option) and
received net proceeds of approximately $13.4 million, including proceeds
received upon the exercise of the underwriters' over-allotment option and after
deducting underwriting discounts and commissions and offering expenses. The
Company intends to use the proceeds from the offering to fund continued clinical
trials, research and development and for general corporate purposes.
Although the Company believes that the net proceeds from the offering,
together with available cash, will be sufficient to meet its cash requirements
for approximately the next 24 months, there can be no assurance that the Company
will not require additional financing during that time or that financing will be
available on acceptable terms or at all. The Company will be required, however,
to raise substantial additional funds to continue the clinical development and
commercialization of its products and to fund the growth that is expected to
occur if any of its products are approved for marketing. The Company plans to
seek such additional funding through collaborative arrangements with strategic
partners, licensing arrangements for certain of its products and additional
public or private financing, including equity financing. Any additional equity
financing may be dilutive to stockholders. There can be no assurance that such
arrangements or financing will be available as needed or on terms acceptable to
the Company. Insufficient funds may require the Company to delay, scale back or
eliminate some or all of its research and development programs and manufacturing
and marketing efforts or require it to license to third parties certain products
or technologies that the Company would otherwise seek to commercialize itself.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.41 Lease Agreement, dated August 13, 1996 between Registrant
and Metro Four Associates, Limited Partnership, 15/th/
Floor of 379 Thornall Street
10.42 Lease Agreement, dated August 13, 1996 between Registrant
and Metro Four Associates, Limited Partnership, 8/th/ Floor
of 379 Thornall Street
10.43 Sublease Agreement, dated July 13, 1996 between Registrant
and Palatin Technologies, Inc.
27. Financial Data Schedule
(b) Reports on Form 8-K
None
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LIFE MEDICAL SCIENCES, INC.
(REGISTRANT)
DATE: NOVEMBER 14, 1996 /s/ DONALD W. FALLON
--------------------------------
DONALD W. FALLON
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(Duly Authorized Officer & Principal
Financial Officer)
10
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- --------
10.41 Lease Agreement, dated August 13, 1996
between Registrant and Metro Four Associates,
Limited Partnership, 15/th/ Floor of 379 Thornall
Street
10.42 Lease Agreement, dated August 13, 1996
between Registrant and Metro Four Associates,
Limited Partnership, 8/th/ Floor of 379 Thornall
Street
10.43 Sublease Agreement, dated July 13, 1996
between Registrant and Palatin Technologies, Inc.
27. Financial Data Schedule
<PAGE>
EXHIBIT 10.41
This Lease Agreement, made the day of August, 1996,
BETWEEN METRO FOUR ASSOCIATES LIMITED PARTNERSHIP,
residing or located at 399 Thornall Street in the Township of Edison in the
County of Middlesex and State of New Jersey, herein designated as the Landlord,
AND LIFE MEDICAL SCIENCES, INC.,
residing or located at 214 Carnegie Center, in the City of Princeton, State of
New Jersey 08540-6237, herein designated as the Tenant;
WITNESSETH THAT, the Landlord does hereby lease to the Tenant and the Tenant
does hereby rent from the Landlord, the following described premises:
3,500 +/- sq. ft. on a portion of the 15th floor of 379 Thornall Street, Edison,
New Jersey, undemised, for use as Tenant's temporary premises.
UPON THE FOLLOWING CONDITIONS AND COVENANTS:
1st: Payment of rent: The Tenant covenants and agrees to pay to the
---------------
Landlord, as rent for and during the term hereof, the sum of $2,916.67 per month
payable on the first day of each month during the term hereof.
2nd: Temporary Space: The Premises set forth in this pre-printed Lease are
----------------
to be Temporary Space for Tenant's use until the Tenant's permanent space is
ready for occupancy. The Temporary Space shall be ready for occupancy as of the
date hereof.
3rd: Term: The term shall commence when the Tenant takes occupancy of the
-----
temporary space and shall end on the day which is ten (10) days after Tenant's
permanent space is ready for occupancy in accordance with Article 4 of the Lease
for the permanent space and Landlord has so notified Tenant.
4th: Condition of the Premises. Tenant agrees to accept the Premises in
--------------------------
"As-Is" condition. Tenant acknowledges that Landlord has no obligation to
improve the Premises nor to maintain, repair or restore the interior thereof
during the term of this Lease. Tenant acknowledges that all of Landlord's
obligations with respect to readying the Premises for occupancy and delivery
have been satisfied. Tenant acknowledges that the other tenants may have
temporary or permanent space on the floor.
<PAGE>
5th: Use: The Premises are to be used and occupied only for general office use
----
and for no other purpose.
6th: Repairs and Care: The Tenant has examined the premises and has entered
----------------
into this lease without any representation on the part of the Landlord as to the
condition thereof. The Tenant shall take good care of the premises and shall
maintain the premises in good condition and state of repair, and at the end or
other expiration of the term hereof, shall deliver up the rented premises in
good order and condition, wear and tear from a reasonable use thereof, and
damage by the elements not resulting from the neglect or fault of the Tenant,
excepted. The Tenant shall neither encumber nor obstruct the sidewalks,
driveways, yards, entrances, hallways and stairs, but shall keep and maintain
the same in a clean condition, free from debris, trash, refuse, snow and ice.
7th: Glass, etc., Damage, Repairs: In case of the destruction of or any
----------------------------
damage to the glass in the leased premises, or the destruction of or damage of
any kind whatsoever to the said premises, caused by the carelessness, negligence
or improper conduct on the part of the Tenant or the Tenant's agents, employees,
guests, licensees, invitees, subtenants, assignees or successors, the Tenant
shall repair the said damage or replace or restore any destroyed parts of the
premises, as speedily as possible, at the Tenant's own cost and expense.
8th: Alterations, Improvements: No alterations, additions, or improvements
-------------------------
shall be made, and no climate regulating, air conditioning, cooling, heating or
sprinkler systems, television or radio antennas, heavy equipment, apparatus and
fixtures, shall be installed in or attached to the leased premises, without the
written consent of the Landlord. Unless otherwise provided herein, all such
alterations, additions, or improvements and systems, when made, installed in or
attached to the said premises, shall belong to and become property of the
Landlord and shall be surrendered with the premises and as part thereof upon the
expiration or sooner termination of this lease, without hindrance, molestation
or injury.
9th: Signs: The Tenant shall not place nor allow to be placed any signs of
-----
any kind whatsoever, upon, in or about the said premises or any part thereof,
except of a design and structure and in or at such places as may be indicated
and consented to by the Landlord in writing. In case the Landlord or the
Landlord's agents, employees or representatives shall deem it necessary to
remove any such signs in order to paint or make any repairs, alterations or
improvements in or upon said premises or any part thereof, they may be so
removed, but shall be replaced at the Landlord's expense when the said repairs,
alterations or improvements shall have been completed. Any signs permitted by
the Landlord shall at all times conform with all municipal ordinances or other
laws and regulations applicable thereto.
2
<PAGE>
10th: Compliance With Laws etc.: The Tenant shall promptly comply with
-------------------------
all laws, ordinances, rules, regulations, requirements and directives of the
Federal, State and Municipal Governments or Public Authorities and of all their
departments, bureaus and subdivisions, applicable to and affecting the said
premises, their use and occupancy, for the correction, prevention and abatement
of nuisances, violations or other grievances in, upon or connected with the said
premises, during the term hereof; and shall promptly comply with all orders,
regulations, requirements and directives of the Board of Fire Underwriters or
similar authority and of any insurance companies which have issued or are about
to issue policies of insurance covering the said premises and its contents, for
the prevention of fire or other casualty, damage or injury, at the Tenant's own
cost and expense. Notwithstanding, Landlord shall be responsible to obtain
and/or for any Certificate of Occupancy required and Tenant shall not be
required to make structural repairs in order to cause compliance.
11th: Liability Insurance, Insurance: The Tenant, at Tenant's own cost
------------------------------
and expense, shall obtain or provide and keep in full force for the benefit of
the Landlord, during the term hereof, general public liability insurance,
insuring the Landlord against any and all liability or claims of liability
arising out of, occasioned by or resulting from any accident or otherwise in or
about the leased premises, for injuries to any person or persons, for limits of
not less than $1,000,000 for injuries to one person and $3,000,000 for injuries
to more than one person, in any one accident or occurrence, and for loss or
damage to the property of any person or persons, for not less than $1,000,000.
The policy or policies of insurance shall be of a company or companies
authorized to do the business in this state and shall be delivered to the
Landlord, together with evidence of the payment of the premiums therefor, not
less than fifteen days prior to the commencement of the term hereof or of the
date when the Tenant shall enter into possession, whichever occurs sooner. At
least fifteen days prior to the expiration or termination date of any policy,
the Tenant shall deliver a renewal or replacement policy with proof of the
payment of the premium therefor. The Tenant also agrees to and shall save, hold
and keep harmless and indemnify the Landlord from and for any and all payments,
expenses, costs, attorney fees and from and for any and all claims and liability
for losses or damage of property or injuries to persons occasioned wholly or in
part by the resulting from any acts or omissions by the Tenant or the Tenant's
agents, employees, guests, licensees, invitees, subtenants, assignees or
successors, or for any cause or reason whatsoever arising out of or by reason of
the occupancy by the Tenant and the conduct of the Tenant's business.
12th: Assignment/Sublease: The Tenant shall not, without the written
-------------------
consent of the Landlord, assign, mortgage or hypothecate this lease, nor sublet
or sublease the premises or any part thereof.
13th: Restriction Of Use: The Tenant shall not occupy or use the leased
------------------
premises or any part thereof, nor permit or suffer the same to be occupied or
used for any purposes
3
<PAGE>
other than as herein limited, nor for any purpose deemed unlawful, disreputable,
or extra hazardous, on account of fire or other casualty.
14th: Mortgage Priority: This lease shall not be lien against the said
-----------------
premises in respect to any mortgages that may hereafter be placed upon said
premises. The recording of such mortgage or mortgages shall have preference and
precedence an be superior and prior in lien to this lease, irrespective of the
date of recording and the Tenant agrees to execute any instruments, without
cost, which may be deemed necessary or desirable, to further effect the
subordination of this lease to any such mortgage or mortgages. A refusal by the
Tenant to execute such instruments shall entitle the Landlord to the option of
canceling this lease, and the term hereof is hereby expressly limited
accordingly.
15th: Condemnation, Eminent Domain: If the land and premises leased
----------------------------
herein, or of which the leased premises are a part, or any portion thereof,
shall be taken under eminent domain or condemnation proceedings, or if suit or
other action shall be instituted for the taking or condemnation thereof, or if
in lieu of any formal condemnation proceedings or actions, the Landlord shall
grant an option to purchase and or shall sell and convey the said premises or
any portion thereof, then this lease, at the option of the Landlord, shall
terminate, and the term hereof shall end as of such date as the Landlord shall
fix by notice in writing; and the Tenant shall have no claim or right to claim
and be entitled to any portion or any amount which may be awarded as damages or
paid as a result of such condemnation proceedings or paid as the purchase price
of such option, sale or conveyance in lieu of formal condemnation proceedings;
and all rights of the Tenant to damages, if any, are hereby assigned to the
Landlord. The Tenant agrees to execute and deliver any instruments, at the
expense of the Landlord, as may be deemed necessary or required to expedite any
condemnation proceedings or to effectuate a proper transfer of title to such
governmental or other public authority, agency, body or public utility seeking
to take or acquire the said lands and premises or any portion thereof. The
Tenant covenants and agrees to vacate the said premises, remove all the Tenant's
personal property therefrom and deliver up peaceable possession thereof to the
Landlord or to such other party designated by the Landlord in the aforementioned
notice. Failure by the Tenant to comply with any provisions in this clause
shall subject the Tenant to such costs, expenses, damages and losses as the
Landlord may incur by reason of the Tenant's breach hereof.
16th: Fire and other Casualty: In case of fire or other casualty, the
-----------------------
Tenant shall give immediate notice to the Landlord. If the premises shall be
partially damaged by fire, the elements or other casualty, the Landlord shall
repair the same as speedily as practicable, but the Tenant's obligation to pay
the rent hereunder shall not cease. If, in the option of the Landlord, the
premises be so extensively and substantially damaged as to render them
untenantable, then the rent shall cease until such time as the premises shall be
made tenantable by the Landlord. However, if, in the option of the Landlord,
the premises be totally destroyed or so extensively and substantially damaged as
to require practically a
4
<PAGE>
rebuilding thereof, then the rent shall be paid up to the time of such
destruction and then and from thenceforth this lease shall come to an end. In no
event however, shall the provisions of this clause become effective or be
applicable, if the fire or other casualty and damage shall be the result of the
carelessness, negligence or improper conduct of the Tenant or the Tenant's
agents, employees, guests, licensees, invitees, subtenants, assignees or
successors. In such case, the Tenant's liability for the payment of the rent and
the performance of all the covenants, conditions and terms hereof on the
Tenant's part to be performed shall continue and the Tenant shall be liable to
the Landlord for the damage and loss suffered by the Landlord. If the Tenant
shall have been insured against any of the risks herein covered, then the
proceeds of such insurance shall be paid over to the Landlord to the extent of
the Landlord's costs and expenses to make the repairs hereunder, and such
insurance carriers shall have no recourse against the Landlord for
reimbursement.
17th: Reimbursement of Landlord: If the Tenant shall fail or refuse to
-------------------------
comply with and perform any conditions and covenants of the within lease after
notice from Landlord, the Landlord may, if the Landlord so elects, carry out and
perform such conditions and covenants, at the cost and expense of the Tenant,
and the said cost and expense shall be payable on demand, or at the option of
the Landlord shall be added to the installment of rent due immediately
thereafter but in no case later than one month after such demand, whichever
occurs sooner, and shall be due and payable as such. This remedy shall be in
addition to such other remedies as the Landlord may have hereunder by reason of
the breach by the Tenant of any of the covenants and conditions in this lease
contained.
18th: Inspection and Repair: The Tenant agrees that the Landlord and
---------------------
the Landlord's agents, employees or other representatives, shall have the right
to enter into and upon the said premises or any part thereof, at all reasonable
hours, for the purpose of examining the same or making such repairs or
alterations therein as may be necessary for the safety and preservation thereof.
This clause shall not be deemed to be a covenant by the Landlord nor be
construed to create an obligation on the part of the Landlord to make such
inspection or repairs.
19th: Right to Exhibit: The Tenant agrees to permit the Landlord and
----------------
the Landlord's agents, employees or other representatives to show the premises
to persons wishing to rent or purchase the same, and Tenant agrees that the
Landlord or the Landlord's agents, employees or other representatives shall have
the right to place notices on the front of said premises or any part thereof,
offering the premises for rent or for sale; and the Tenant hereby agrees to
permit the same to remain thereon without hindrance or molestation.
20th: Increase of Insurance Rates: If for any reason it shall be
---------------------------
impossible to obtain fire and other hazard insurance on the buildings and
improvements on the leased premises, in an amount and in the form and in
insurance companies acceptable to the Landlord, the
5
<PAGE>
Landlord may, if the Landlord so elects at any time thereafter, terminate the
lease and the term hereof, upon giving to the Tenant fifteen days of notice in
writing of the Landlord's intention so to do, and upon giving of such notice,
this lease and the term thereof shall terminate. If by reason of the use to
which the premises are put by the Tenant or character of or the manner in which
the Tenant's business is carried on, the insurance rates for fire and other
hazards shall be increased, the Tenant shall upon demand, pay to the Landlord,
as rent, the amounts by which the premiums for such insurance are increased.
Such payment shall be paid with the next installment of rent but in no case
later than one month after such demand, whichever occurs sooner.
21st: Removal of Tenant's Property: Any equipment, fixtures, goods or
----------------------------
other property of the Tenant, nor removed by the Tenant upon the termination of
this lease, or upon any quitting, vacation or abandonment of the premises by the
Tenant, or upon the Tenant's eviction, shall be considered as abandoned and the
Landlord shall have the right, without any notice to the Tenant, to sell or
otherwise dispose of the same, at the expense of the Tenant, and shall not be
accountable to the Tenant for any part of the proceeds of such sale, if any.
22rd: Remedies upon Tenant's Default: If there shall occur any default on
------------------------------
the part of the Tenant in the performance of any conditions and covenants herein
contained, or if during the term hereof the premises or any part thereof shall
be or become abandoned or deserted, vacated or vacant, or should the Tenant be
evicted by summary proceedings or otherwise, the Landlord, in addition to any
other remedies herein contained or as may be permitted by law, may either by
force or otherwise, without being liable for prosecution therefore, or for
damages, re-enter the said premises and the same have and again possess and
enjoy; and as agent for the Tenant or otherwise, re-let the premises and receive
the rents therefor and apply the same, first to the payment of such expenses,
reasonable attorney fees and costs, as the Landlord may have been put to in re-
entering and repossessing the same and in making such repairs and alterations as
may be necessary; and second to the payment of the rents due hereunder. The
Tenant shall remain liable for such rents as may be in arrears and also the
rents as may accrue subsequent to the re-entry by the Landlord, to the extent of
the difference between the rents reserved hereunder and the rents, if any,
received by the Landlord during the remainder of the unexpired term hereof,
after deducting the aforementioned expenses, fees and costs; the same to be paid
as such deficiencies arise and are ascertained each month.
23rd: Termination on Default: Upon the occurrence of any of the
----------------------
contingencies set forth in the preceding clause, or should the Tenant be
adjudicated a bankrupt, insolvent or placed in receivership, or should
proceedings be instituted by or against the Tenant for bankruptcy, insolvency,
receivership, agreement of composition or assignment for the benefit of
creditors, or if this lease or the estate of the Tenant hereunder shall pass to
another by virtue of any court proceedings, writ of execution, levy, sale, or by
operation of law, the Landlord may, if the Landlord so elects, at any time
thereafter, terminate this lease and the
6
<PAGE>
term hereof, upon giving to the Tenant or to any trustee, receiver, assignee or
other person in charge of or acting as custodian of the assets or property of
the Tenant, five days notice in writing, of the Landlord's intention so to do.
Upon the giving of such notice, this lease and the term hereof shall end on the
date fixed in such notice, this lease and the term hereof shall end on the date
fixed in such notice as if the said date was the date originally fixed in this
lease for the expiration hereof; and the Landlord shall have the right to remove
all persons, goods, fixtures and chattels therefrom, by force or otherwise,
without liability for damages.
24th: Non-Liability of Landlord: The Landlord shall not be liable for any
-------------------------
damages or injury which may be sustained by the Tenant or any other person, as a
consequence of the failure, breakage, leakage or obstruction of the water,
plumbing, steam, sewer, waste or soil pipes, roof, drains, leaders, gutters,
valleys, downspouts or the like or of the electrical, gas, power, conveyor,
refrigeration, sprinkler, air-conditioning or heating systems, elevators or
hoisting equipment; or by reason of the elements; or resulting from the
carelessness, negligence or improper conduct on the part of any other Tenant or
any other Tenant's agents, employees, guests, licensees, invitees, subtenants,
assignees or successors; or attributable to any interference with, interruption
of or failure, beyond the control of the Landlord, of any services to be
furnished or supplied by the Landlord.
25th: Non-Waiver by Landlord: The various rights, remedies, options and
----------------------
elections of the Landlord, expressed herein, are cumulative, and the failure of
the Landlord to enforce strict performance by the Tenant of the conditions and
covenants of this lease or to exercise any election or option or to resort or
have recourse to any remedy herein conferred or the acceptance by the Landlord
of any installment of rent after any breach by the Tenant, in any one or more
instances, shall not be construed or deemed to be a waiver or a relinquishment
for the future by the Landlord of any such conditions and covenant, options,
elections or remedies, but the same shall continue in full force and effect.
26th: Non-Performance by Landlord: This lease and the obligation of the
---------------------------
Tenant to pay the rent hereunder and to comply with the covenants and conditions
hereof, shall not be affected, curtailed, impaired or excused because of the
Landlord's inability to supply any service or material called for herein, by
reason of any rule, order, regulation or preemption by any governmental entity,
authority, department, agency or subdivision or for any delay which may arise by
reason of negotiations for the adjustment of any fire or other casualty loss or
because of strikes or other labor trouble or for any cause beyond the control of
the Landlord.
27th: Validity of Lease: The terms, conditions, covenants and provisions
-----------------
of this lease shall be deemed to be severable. If any clause or provision
herein contained shall be adjudged to be invalid or unenforceable by a court of
competent jurisdiction or by operation
7
<PAGE>
of any applicable law, it shall not affect the validity of any other clause or
provision herein, but such other clauses or provisions shall remain in full
force and effect.
28th: Notices: All notices required under the terms of this lease shall
-------
be given and shall be complete by mailing such notices by certified or
registered mail, return receipt requested, to the address of the parties as
shown at the head of this lease, or to such other address as may be designated
in writing, which notice of change of address shall be given in the same manner.
29th: Title and Quiet Enjoyment: The Landlord covenants and represents
-------------------------
that the Landlord is the owner of the premises herein leased and has the right
and authority to enter into, execute and deliver this lease; and does further
covenant that the Tenant on paying the rent and performing the conditions and
covenants herein contained, shall and may peacefully and quietly have, hold and
enjoy the leased premises for the term aforementioned.
30th: Entire Contract: This lease contains the entire contract between
---------------
the parties. No representation, agent or employee of the Landlord has been
authorized to make any representations or promises with reference to the within
letting or to vary, alter or modify the terms hereof. No additions, changes or
modifications, renewals or extensions hereof, shall be binding unless reduced to
writing and signed by the Landlord and the Tenant.
31st: Mechanics' Liens: If any mechanics' or other liens shall be
---------------
created or filed against the leased premises by reason of labor performed or
materials furnished for the Tenant in the erection, construction, completion,
alteration, repair or addition to any building or improvement, the Tenant shall
within thirty (30) days thereafter, at the Tenant's own cost and expense, cause
such liens to be satisfied and discharged of record together with any Notices of
Intention that may have been filed. Failure so to do, shall entitle the
Landlord to resort to such remedies as are provided herein in the case of any
default of this lease, in addition to such as are permitted by law.
32nd: Waiver of Subrogation Rights: The Tenant waives all rights of
----------------------------
recovery against the Landlord or Landlord's agents, employees or other
representatives, for any loss, damages or injury of any nature whatsoever to
property or persons for which the Tenant is insured. The Tenant shall obtain
from the Tenant's insurance carriers and will deliver to the Landlord, waivers
of the subrogation rights under the respective policies.
33rd: Security: The Tenant has this day deposited with the Landlord the
--------
sum of $___-0-____ as security for the payment of the rent hereunder and the
full and faithful
8
<PAGE>
performance by the Tenant of the covenants and conditions on the part of the
Tenant to be performed. Said sum shall be returned to the Tenant, without
interest, after the expiration of the term hereof, provided that the Tenant has
fully and faithfully performed all such covenants and conditions and is not in
arrears in rent. During the term hereof, the Landlord may, if the Landlord so
elects, have recourse to such security, to make good any default by the Tenant,
in which event the Tenant shall, on demand, promptly restore said security to
its original amount. Liability to repay said security to the Tenant shall run
with the reversion and title to said premises, whether any change in ownership
thereof be by voluntary alienation or as the result of judicial sale,
foreclosure or other proceedings, or the exercise of a right of taking or entry
by any mortgagee. The Landlord shall assign or transfer said security, for the
benefit of the Tenant, of a right of taking or entry by any mortgagee. The
Landlord shall assign or transfer said security, for the benefit of the Tenant,
to any subsequent owner or holder of the reversion or title to said premises, in
which case the assignee shall become liable for the repayment thereof as herein
provided, and the assignor shall be deemed to be released by the Tenant from all
liability to return such security. This provision shall be applicable to every
alienation or change in title and shall in no wise be deemed to permit the
Landlord to retain the security after termination of the Landlord's ownership of
the reversion or title. The Tenant shall not mortgage, encumber or assign said
security without the written consent of the Landlord.
34th: Holdover: Tenant will have no right to remain in possession of all
---------
or part of the Premises after the expiration of the term. If Tenant remains in
possession of all or any part of the Premises after the expiration of the Lease,
without the express or implied consent of Landlord: (a) such tenancy will not
constitute a renewal or extension of this Lease for any further term; and (b)
such tenancy may be terminated by Landlord upon the earlier of (i) ten (10) days
prior written notice, or (ii) the earliest date permitted by law. In such
event, monthly rent will be increased to an amount equal to $19.00 per square
foot and any other sums due under this Lease will be payable in the amount and
at the times specified in this Lease. The provisions of this Section shall not
be construed to relieve Tenant from liability to Landlord for damages resulting
from any such holding over, or preclude Landlord from implementing summary
dispossess proceedings.
35th: Operating Expenses and Taxes: Landlord and Tenant acknowledge that
-----------------------------
during the term of this Lease, Tenant shall not be obligated to pay any portion
of Operating Expenses or Taxes. Should Tenant holdover for more than one (1)
month after the expiration date set forth in Paragraph 3, then in addition to
the any other remedies of Landlord pursuant to this Lease, Tenant shall be
obligated to pay its share of increases in Operating Expenses and Taxes over the
Base Year, based upon a percentage interest of one percent (1%). In calculating
such share, the Base Year shall be calendar year 1996. Such penalty interest
shall apply as to each month Tenant holds over, as set forth above, against the
then current Operating Expenses and Taxes charged by Landlord to tenants.
9
<PAGE>
36th: Parties Bound: If Landlord shall be an individual, joint venture,
--------------
tenancy in common, partnership, unincorporated association, or other
unincorporated aggregate of individuals and/or entities or a corporation, Tenant
shall look only to such Landlord's estate and property in the Building (or the
proceeds thereof). No other property or assets of such Landlord shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to this Lease, the relationship of
Landlord and Tenant hereunder or Tenant's use or occupancy of the Premises.
Further, Tenant agrees that Landlord shall not be liable to Tenant for any
special, indirect, or consequential damages arising out of Landlord's breach of
this Lease.
37th: Relocation: At Tenant's sole cost and expense, Landlord may,
-----------
upon fifteen (15) days prior written notice, require Tenant to move from the
Premises to another location of comparable size in the Building or the Building
known as 399 Thornall Street, Edison, New Jersey.
38th: Environmental Compliance: Tenant shall, at Tenant's sole cost and
-------------------------
expense, comply with the New Jersey Industrial Site Recovery Act and the
regulations promulgated thereunder (referred to as "ISRA") as same relate to
Tenant's occupancy of the Premises, as well as any other environmental law,
rule, or regulation affecting or affected by Tenant's use and occupancy of the
Premises. Tenant shall, at Tenant's own expense, make all submissions to,
provide all information to, and comply with all requirements of the Bureau of
Industrial Site Evaluation (the "Bureau") of the New Jersey Department of
Environmental Protection and Energy ("NJDEPE"). Should the Bureau or any other
division of NJDEPE, pursuant to any other environmental law, rule, or
regulation, determine that a cleanup plan be prepared and that a cleanup be
undertaken because of any spills or discharge of hazardous substances or wastes
at the Premises which occur during the term of this Lease and were caused by
Tenant or its agents or contractors, then Tenant shall, at Tenant's own expense
prepare and submit the required plans and financial assurances, and carry out
the approved plans. In the event that Landlord shall have to comply with ISRA
by reason of Landlord's actions, Tenant shall promptly provide all information
requested by Landlord for preparation of non-applicability affidavits or a
Negative Declaration and shall promptly sign such affidavits when requested by
Landlord. Tenant shall indemnify, defend, and save harmless Landlord from all
fines, suits, procedures, claims, and actions of any kind arising out of or in
any way connected with any spills or discharges of hazardous substances or
wastes at the Premises which occur during the term of this Lease and were caused
by Tenant or its agents or contractors, and from all fines, suits, procedures,
claims, and actions of any kind arising out of Tenant's failure to provide all
information, make all submission and take all actions required by the Bureau or
any other division of NJDEPE. Tenant's obligations and liabilities under this
Paragraph shall continue so long as Landlord remains responsible for any spills
or discharges of hazardous substances or wastes at the Premises which occur
during the term of this Lease and were caused by Tenant or its agents or
contractors. Tenant's failure to abide by the terms of this paragraph shall be
restrainable by injunction. Tenant shall have no responsibility to obtain a
"Negative Declaration" or "Letter of Non-Applicability" from the
10
<PAGE>
NJDEPE if the sole reason for obtaining same is in connection with a sale or
other disposition of the real estate by Landlord but Tenant agrees to cooperate
with Landlord in Landlord's effort to obtain same and shall perform at Tenant's
expense any clean up required by reason of Tenant's use and occupancy of the
Premises.
39th: Broker: Tenant covenants, warrants, and represents that there was
-------
no broker instrumental in consummating this Temporary Lease and that no
conversations or negotiations were had with any broker concerning the renting of
the Premises. Tenant agrees to hold Landlord harmless against any claims for a
brokerage commission arising out of any conversation or negotiations had by
Tenant with any broker.
40th: Failure to take Permanent Space in the Building: If the Tenant
------------------------------------------------
fails to take possession of permanent space in the Building, the Tenant shall
reimburse the Landlord for each day it occupied the Temporary Space at a rental
rate equal to $19.00 per rentable square foot.
41st: Late Payments: Late payments of any payment of rent, including
--------------
monthly rent, which is not received within five (5) days after it is due, will
be subject to a late charge equal to five (5%) percent of the unpaid payment, or
$100.00, whichever is greater. This amount is in compensation of Landlord's
additional cost of processing late payments. In addition, any rent which is not
paid when due, including the monthly rent, will accrue interest at a late rate
charge of the Chase Manhattan Bank, N.A. Prime Rate plus three (3%) percent per
annum, as said rate is reasonably determined by Landlord from published reports,
(but in no event in an amount in excess of the maximum rate allowed by
applicable law) from the date on which it was due until the date on which it is
paid in full with accrued interest. If Tenant is in default of the Lease for
failure to pay rent, in addition to the late charges and interest set forth
above, Tenant shall be charged with all attorney fees in connection with the
collection of all sums due Landlord.
42nd: Electric: Along with the rent, each month Tenant shall pay to
---------
Landlord the sum of $___-0-___ for electric charges.
43rd: Rules and Regulations: Tenant shall comply with all the rules and
----------------------
regulations as set forth in Exhibit A.
The Landlord may pursue the relief or remedy sought in any invalid clause, by
conforming the said clause with the provisions of the statutes or the
regulations of any governmental agency in such case made and provided as if the
particular provisions of the applicable statutes or regulations were set forth
herein at length.
11
<PAGE>
In all references herein to any parties, persons, entities or corporations the
use of any particular gender or the plural or singular number is intended to
include the appropriate gender or number as the text of the within instrument
may require. All the terms, covenants and conditions herein contained shall be
for and shall inure to the benefit of and shall bind the respective parties
hereto, and their heirs, executors, administrators, personal or legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, or caused these presents to be signed by their proper corporate officers
and their proper corporate seal to be hereto affixed, the day and year first
above written.
WITNESS: LANDLORD: METRO FOUR ASSOCIATES
LIMITED PARTNERSHIP
- ---------------------------------- -------------------------------------
BY: DOMINICK ALFIERI
GENERAL PARTNER
ATTEST: TENANT: LIFE MEDICAL
SCIENCES, INC.
- ----------------------------------------------------------------------
BY:
12
<PAGE>
EXHIBIT A
RULES AND REGULATIONS
---------------------
1. The rights of tenants in the entrances, corridors, elevators, and
escalators of the Building are limited to ingress to and egress from the
tenants' demised premises for the tenants and their employees, licensees, and
invitees, and no tenant shall use or permit the use of the entrances, corridors,
escalators, or elevators for any other purpose. No tenant shall invite to the
tenant's demised premises, or permit the visit of, persons in such numbers or
under such conditions as to interfere with the use and enjoyment of any of the
plazas, entrances, corridors, escalators, elevators, and other facilities of the
Building by other tenants. Fire exits and stairways are for emergency use only,
and they shall not be used for any other purpose by the tenants, their
employees, licensees, or invitees. No tenant shall encumber or obstruct, or
permit the encumbrance or obstruction of any of the sidewalks, plazas,
entrances, corridors, escalators, elevators, fire exits, or stairways of the
Building. The Landlord reserves the right to control and operate the public
portions of the Building and the public facilities, as well as facilities
furnished for the common use of the tenants, in such manner as it deems best for
the benefit of the tenants generally.
2. The Landlord may refuse admission to the Building outside of
ordinary business hours to any person not having a pass issued by the Landlord
or the tenant whose demised premises are to be entered or not otherwise properly
identified, and may require all persons admitted to or leaving the Building
outside of ordinary business hours to register. Any person whose presence in
the Building at any time shall, in the judgment of the Landlord, be prejudicial
to the safety, character, reputation, and interests of the Building or of its
tenants may be denied access to the Building or may be ejected therefrom. In
case of invasion, riot, public excitement, or other commotion, the Landlord may
prevent all access to the Building during the continuance of the same, by
closing the doors or otherwise, for the safety of the tenants and protection of
property of the Building. The Landlord may require any person leaving the
Building with any package or other object to exhibit a pass from the tenant from
whose premises the packaging or object is being removed, but the establishment
and enforcement of such requirement shall not impose any responsibilities on the
Landlord for the protection of any tenant against the removal of property from
the premises of the tenant. The Landlord shall in no way be liable to any
tenant for damages or loss arising from the admission, exclusion, or ejection of
any person to or from the tenant's premises or the Building under the provisions
of this rule. Canvassing, soliciting, or peddling in the Building is
prohibited, and every tenant shall cooperate to prevent the same.
3. No tenant shall obtain or accept for use in its demised premises
ice, food for on premises preparation other than warming, beverage towel,
barbering, boot blackening, floor polishing, lighting maintenance, cleaning, or
other similar services from
<PAGE>
any persons not authorized by the Landlord in writing to furnish such services,
provided that the charges for such services by persons authorized by the
Landlord are not excessive and where appropriate and consonant with the security
and proper operation of the Building sufficient persons are so authorized for
the same service to provide tenants with a reasonably competitive selection.
Such services shall be furnished only at such hours, in such places within the
Tenant's Demised Premises and under such reasonable regulations as may be fixed
by the Landlord. Tenant may have a coffee service, subject to Landlord's
approval, and a kitchen for the use of its employees commensurate with normal
office use.
4. The cost of repairing any damage to the public portions of the
Building or the public facilities or to any facilities used in common with other
tenants, caused by a tenant or the employees, licensees, or invitees of the
tenant shall be paid by such tenant.
5. No lettering, sign, advertisement, notice or object shall be
displayed in or on the windows or doors, or on the outside of any tenant's
demised premises, or at any point inside any tenant's premises where the same
might be visible outside of such demised premises, except that the name of the
tenant may be displayed on the entrance door of the tenant's demised premises,
and in the elevator lobbies of the floors which are occupied entirely by any
tenant, subject to the approval of the Landlord as to the size, color, and style
of such display. The inscription of the name of the tenant on the door of the
tenant's demised premises shall be done by the Landlord at the expense of the
tenant.
6. No awnings or other projections over or around the windows shall be
installed by any tenant, and only such window blinds as are supplied or
permitted by the Landlord shall be used in a tenant's demised premises.
Linoleum, tile, or other floor covering shall be laid in a tenant's demised
premises only in a manner approved by the Landlord.
7. The Landlord shall have the right to prescribe the weight and
position of safes and other objects of excessive weight, and no safe or other
object whose weight exceeds the lawful load for the area upon which it would
stand shall be brought into or kept upon a tenant's demised premises. If, in
the judgment of the Landlord, it is necessary to distribute the concentrated
weight of any heavy object, the work involved in such distribution shall be done
at the expense of the tenant and in such manner as the Landlord shall determine.
The moving of safes and other heavy objects shall take place only outside of
ordinary business hours upon the same upon previous notice to the Landlord, and
the persons employed to move the same in and out of the Building shall be
reasonably acceptable to the Landlord and if so required by law, shall hold a
Master Rigger's license. Freight, furniture, business equipment, merchandise,
and bulky matter of any description shall be delivered to and removed from the
demised premises only in the freight elevators and through the service entrances
and corridors, and only during hours and in a manner approved by the Landlord.
Arrangements will be made by the
2
<PAGE>
Landlord with any tenant for moving large quantities of furniture and equipment
into or out of the Building.
8. No machines or mechanical equipment of any kind other than
typewriters and other ordinary portable business machines, may be installed or
operated in any tenant's demised premises without Landlord's prior written
consent, and in no case (even where the same are of a type so accepted or as so
consented to by Landlord) shall any machines or mechanical equipment be so
placed or operated as to disturb other tenants; but machines and mechanical
equipment which may be permitted to be installed and used in a tenant's demised
premises shall be so equipped, installed and maintained by such tenant as to
prevent any disturbing noise, vibration, or electrical or other interference
from being transmitted from such premises to any other area of the Building.
9. No noise, including the playing of any musical instruments, radio or
television, which, in the judgment of the Landlord might disturb other tenants
in the building, shall be made or permitted by any tenant, and no cooking shall
be done in the tenant's demised premises, except as expressly approved by the
Landlord. Nothing shall be done or permitted in any tenants' demised premises,
and nothing shall be brought into or kept in any tenants' demised premises,
which would impair or interfere with any of the Building services or the proper
and economic heating, cleaning, or other servicing of the Building or the
demised premises, or the use of enjoyment by any other tenant of any other
demised premises, nor shall there be installed by any tenant any ventilating,
air conditioning, electrical or other equipment of any kind which, in the
judgment of the Landlord, might cause any such impairment or interference. No
dangerous, inflammable, combustible, or explosive object or material shall be
brought into the building by any tenant or with the permission of any tenant.
Any cuspidors or similar containers or receptacles used in any tenants' demised
premises shall be cared for and cleaned by and at the expense of the tenant.
10. No acids, vapors, or other materials shall be discharged or
permitted to be discharged into the waste lines, vents or flues of the Building
which may damage them. The water and wash closets and other plumbing fixtures
in or serving any tenant's premises shall not be used for any purpose other than
the purposes for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other foreign substances shall be deposited therein.
11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows in any tenants' demised premises and no lock on any door
therein shall be changed or altered in any respect. Additional keys for a
tenant's demised premises and toilet rooms shall be procured only from the
Landlord, which may make a reasonable charge therefor. Upon the termination of
a tenant's lease, all keys of the tenant's demised premises and toilet rooms
shall be delivered to the Landlord.
3
<PAGE>
12. All entrance doors in each tenants' demised premises shall be left
locked, and all windows shall be left closed by the tenant when the tenant's
demised premises are not in use. Entrance doors shall not be left open at any
time.
13. Hand trucks not equipped with rubber tires and side guards shall not
be used within the Building.
14. All windows in each tenant's demised premises shall be kept closed
and all blinds therein above the ground floor shall be lowered when and as
reasonably required because of the position of the sun, during the operation of
the Building air conditioning system to cool or ventilate the tenant's demised
premises.
15. The Landlord reserves the right to rescind, alter, or waive any rule
or regulation at any time prescribed for the Building when, in its judgment, it
deems it necessary, desirable, or proper for its best interest and for the best
interests of the tenants, and no alteration or waiver of any rule or regulation
in favor of one tenant shall operate as an alteration or waiver in favor of any
other tenant. The Landlord shall not be responsible to any tenant for the non-
observance or violation by any other tenant of any of the rules and regulations
at any time prescribed by the Building.
4
<PAGE>
EXHIBIT 10.42
================================================================================
LEASE AGREEMENT
BETWEEN
METRO FOUR ASSOCIATES LIMITED PARTNERSHIP,
AS LANDLORD
-AND-
LIFE MEDICAL SCIENCES, INC.
AS TENANT
PREMISES: 379 THORNALL STREET
EDISON, NEW JERSEY
PORTION OF 8TH FLOOR
DATED: AUGUST , 1996
================================================================================
<PAGE>
INDEX
-----
ARTICLE CAPTION PAGE
- ------- ------- ----
1 Demised Premises, Term, Rent.................................. 1
2 Use........................................................... 3
3 Preparation of the Demised Premises........................... 3
4 When Demised Premises Ready for Occupancy..................... 4
5 Additional Rent............................................... 5
6 Subordination, Notice to Lessors and Mortgagees............... 9
7 Quiet Enjoyment............................................... 10
8 Assignment, Mortgaging, Subletting............................ 10
9 Compliance with Laws and Requirements of Public Authorities... 12
10 Insurance..................................................... 13
11 Rules and Regulations......................................... 15
12 Tenant's Changes.............................................. 16
13 Tenant's Property............................................. 18
14 Repairs and Maintenance....................................... 19
15 Electricity................................................... 20
16 Heating, Ventilation and Air-Conditioning..................... 21
17 Landlord's Other Services..................................... 22
18 Access, Changes in Building Facilities, Name.................. 24
19 Notices of Accidents.......................................... 25
20 Non-Liability and Indemnification............................. 25
(i)
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ARTICLE CAPTION PAGE
- ------- ------- ----
21 Destruction or Damage......................................... 26
22 Eminent Domain................................................ 27
23 Surrender..................................................... 29
24 Conditions of Limitation...................................... 30
25 Re-Entry by Landlord.......................................... 31
26 Damages....................................................... 32
27 Waivers....................................................... 33
28 No Other Waivers or Modifications............................. 34
29 Curing Tenant's Defaults...................................... 35
30 Broker........................................................ 35
31 Notices....................................................... 35
32 Estoppel Certificate.......................................... 36
33 Arbitration................................................... 36
34 No Other Representations, Construction, Governing Law......... 37
35 Security...................................................... 38
36 Parties Bound................................................. 39
37 Consents...................................................... 39
38 Mortgage Financing - Tenant Cooperation....................... 40
39 Environmental Compliance...................................... 40
40 Holding Over.................................................. 41
41 Certain Definitions & Constructions........................... 41
(ii)
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ARTICLE CAPTION PAGE
- ------- ------- ----
42 Relocation of Tenant.......................................... 42
43 Option to Renew............................................... 42
44 Cancellation Option........................................... 43
EXHIBIT A - Description of Land
EXHIBIT B - Floor Plan
EXHIBIT C - Separate Workletter
EXHIBIT D - Cleaning and Maintenance Specifications
EXHIBIT E - Rules and Regulations
EXHIBIT F - Definitions
(iii)
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LEASE, dated August , 1996, between METRO FOUR ASSOCIATES LIMITED
PARTNERSHIP, a New Jersey Limited Partnership, c/o Alfieri Property Management,
having its principal office located at 399 Thornall Street, P.O. Box 2911,
Edison, New Jersey 08818-2911, ("Landlord"), and LIFE MEDICAL SCIENCES, INC., a
Delaware Corporation, having its principal office located at 214 Carnegie
Center, Princeton, New Jersey 08540-6237, ("Tenant").
WITNESSETH:
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ARTICLE 1
DEMISED PREMISES, TERM, RENT
1.01. Landlord hereby leases to Tenant, and Tenant hereby hires
from Landlord, the premises hereinafter described, in the building located at
379 Thornall Street, Edison, New Jersey, ("Building") on the parcel of land more
particularly described in Exhibit A ("Land"), for the term hereinafter stated,
for the rents hereinafter reserved and upon and subject to the conditions
(including limitations, restrictions and reservations) and covenants hereinafter
provided. Each party hereby expressly covenants and agrees to observe and
perform all of the conditions and covenants herein contained on its part to be
observed and performed.
1.02. The premises hereby leased to Tenant is a portion of the
8th floor of the Building, as shown on the floor plans annexed hereto as Exhibit
B, having a rentable area of 3,550 square feet measured outside wall to outside
wall, together with Tenant's share of the common area. Said premises, together
with all fixtures and equipment which at the commencement, or during the term of
this Lease are thereto attached (except items not deemed to be included therein
and removable by Tenant as provided in Article 13) constitute the "Demised
Premises". Tenant shall submit any dispute over the square footage to
arbitration within fifteen (15) days from the date hereof or otherwise shall be
deemed to have accepted the foregoing calculation of square footage.
1.03. The term of this Lease, for which the Demised Premises are
hereby leased, shall commence on a date ("Commencement Date") which shall be (i)
the day on which the Demised Premises are ready for occupancy (as defined in
Article 4) or (ii) the day Tenant, or anyone claiming under or through Tenant,
first occupies the Demised Premises for business, whichever occurs earlier, and
shall end at noon on the last day of the calendar month in which occurs the day
preceding the fifth (5th) anniversary of the Commencement Date, which ending
date is hereinafter called the "Expiration Date", or shall end on such earlier
date upon which said term may expire or be canceled or terminated pursuant to
any of the conditions or covenants of this Lease or pursuant to law. Promptly
following the Commencement Date, the Landlord shall notify Tenant in writing of
the Commencement Date and the Expiration Date as determined in accordance with
this Section.
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1.04. The rents reserved under this Lease, for the term thereof,
shall be and consist of:
(a) Fixed rent of $79,875.00 per year, (calculated on the basis of
$22.50/sq. ft. for 3,550 sq. ft. of rentable area) which shall be payable in
equal monthly installments of $6,656.25 in advance on the first day of each and
every calendar month during the term of this Lease, (except Tenant shall pay,
upon execution and delivery of this Lease by Tenant, the sum of $6,756.25 to be
applied against the first monthly installment or installments of fixed rent
becoming due under this Lease) and
(b) Additional rent consisting of all such other sums of money as
shall become due from and payable by Tenant to Landlord hereunder (for default
in payment of which Landlord shall have the same remedies as for a default in
payment of fixed rent),
all to be paid to Landlord at its office, or such other place, or to such agent
at such place, as Landlord may designate by notice to Tenant, in lawful money of
the United States of America.
1.05. Tenant shall pay the fixed rent and additional rent herein
reserved promptly as and when the same shall become due and payable, without
demand therefor and without any abatement, deduction or setoff whatsoever except
as expressly provided in this Lease.
1.06. If the Commencement Date occurs on a day other than the
first day of a calendar month, the fixed rent for such calendar month shall be
prorated and the balance of the first month's fixed rent theretofore paid shall
be credited against the next monthly installment of fixed rent.
1.07. Late payments of any payment of rent, including monthly
rent, which is not received within seven (7) days after it is due, will be
subject to a late charge equal to five percent (5%) of the unpaid payment, or
$100.00, whichever is greater. Notwithstanding the foregoing, Landlord agrees
to waive the above late charge with respect to the first instance of late
payment during each 12 month period calculated from the Commencement Date
provided (a) Tenant is not otherwise in default and (b) Tenant pays in full
within 3 days of written demand. This amount is in compensation of Landlord's
additional cost of processing late payments. In addition, any rent which is not
paid when due, including monthly rent, will accrue interest at a late rate
charge of First Union Prime Rate plus three percent (3%) per annum, as said rate
is reasonably determined by Landlord from published reports, (but in no event in
an amount in excess of the maximum rate allowed by applicable law) from the date
on which it was due until the date on which it is paid in full with accrued
interest. If Tenant is in default of the Lease for failure to pay rent, in
addition to the late charges and interest set forth above, Tenant shall be
charged with all attorney fees in connection with the collection of all sums due
Landlord.
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ARTICLE 2
USE
2.01. Tenant shall use and occupy the Demised Premises for
executive and general offices for the transaction of Tenant's business and for
no other purpose.
2.02. The use of the Demised Premises for the purposes specified
in Section 2.01 shall not include, and Tenant shall not use or permit the use of
the Demised Premises or any part thereof, for:
(a) A school of any kind other than for the training of Tenant's
employees;
(b) An employment agency; or
(c) An office for any governmental or quasi governmental bureau,
department, agency, foreign or domestic, including any autonomous governmental
corporation or diplomatic or trade mission.
(d) Any telemarketing activities or other direct selling activities;
or
(e) Any use, including executive and general office use, which results
in a density of a population of more than one person for every 250 square feet.
2.03. If any governmental license or permit, other than a
Certificate of Occupancy, shall be required for the proper and lawful conduct of
Tenant's business in the Demised Premises, or any part thereof, and if failure
to secure such license or permit would in any way affect Landlord, Tenant, at
its expense, shall submit the same to inspection by Landlord. Tenant shall at
all times comply with the terms and conditions of each such license or permit.
Landlord states that the uses set forth in Section 2.01 are permitted uses under
the Certificate of Occupancy.
2.04. Tenant shall not at any time use or occupy, or do or
permit anything to be done in the Demised Premises, in violation of the
Certificate of Occupancy (or other similar municipal ordinance) governing the
use and occupation of the Demised Premises or for the Building.
ARTICLE 3
PREPARATION OF THE DEMISED PREMISES
3.01. The Demised Premises shall be completed and prepared for
Tenant's occupancy in the manner, and subject to the terms, conditions and
covenants, set forth in Exhibit C. The facilities, materials, and work so to be
furnished, installed, and performed in the Demised
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Premises by Landlord at its expense are hereinafter and in Exhibit C referred to
as "Landlord's Work". Such other installations, materials, and work which may be
undertaken by or for the account of Tenant to equip, decorate, and furnish the
Demised Premises for Tenant's occupancy, commonly called finishing trades work,
are hereinafter and in Exhibit C called "Tenant's Finish Work." After review and
completion of the final construction drawings, Landlord reserves the right to
notify Tenant of any restoration Tenant shall be responsible for upon the
termination of this Lease.
ARTICLE 4
WHEN DEMISED PREMISES READY FOR OCCUPANCY
4.01. The Demised Premises shall be deemed ready for occupancy
on the earliest date on which all of the following conditions have been met:
(a) A Certificate of Occupancy (temporary or final) has been issued by
the applicable governmental authorities, permitting Tenant's use of the Demised
Premises for the purposes for which the same have been leased.
(b) Landlord's Work, and so much of Tenant's Finish Work as Landlord
shall have undertaken in accordance with Exhibit C or by separate letter
agreement, in the Demised Premises have been substantially completed, and same
shall be so deemed notwithstanding the fact that minor or insubstantial details
of construction, mechanical adjustment, or decoration or special Finish Work
requested by Tenant, such as cabinetry remain to be performed, the non-
completion of which does not materially interfere with Tenant's use of the
Demised Premises.
(c) Reasonable means of access and facilities necessary to Tenant's
use and occupancy of the Demised Premises, including corridors, elevators and
stairways, and heating ventilating, air conditioning, sanitary, water, and
electrical facilities, have been installed and are in reasonably good operating
order and available to Tenant.
4.02. If making the Demised Premises ready for occupancy shall
be delayed by any act or omission of Tenant or any of its employees, agents or
contractors or any failure (not due to any act or omission of Landlord or any of
its employees, agents or contractors) to plan or execute Tenant's Finish Work
diligently by reason of Tenant's failure to submit Tenant's plans and
specifications in the manner set forth in this Lease, the Demised Premises shall
be deemed ready for occupancy on the date when they would have been ready but
for such delay.
4.03. If and when Tenant shall take actual possession of the
Demised Premises, it shall be conclusively presumed that the same were in
satisfactory condition (except for latent defects) as of the date of such taking
of possession, unless within thirty (30) days after such date Tenant shall give
Landlord notice specifying the respects in which the Demised Premises were not
in satisfactory condition ("Punch List Items"). Landlord shall use its best
efforts to complete all Punch List Items within thirty (30) days of its receipt
of the Punch List from Tenant.
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ARTICLE 5
ADDITIONAL RENT
5.01. For the purpose of Sections 5.01 through 5.03.
(a) "Taxes" shall mean real estate taxes, special and extraordinary
assessments and governmental levies against the Land and Building (based on 95%
occupancy) of which the Demised Premises (but excluding therefrom that portion
of the real estate taxes directly attributable to improvements made by other
tenants in the Building beyond Landlord's allowances) are a part provided,
however, if at any time during the term of this Lease the method of taxation
prevailing at the date of this Lease shall be altered so that in lieu of, or as
an addition to, or as a substitute for any or all of the above there shall be
assessed, levied or imposed (i) a tax, assessment, levy, imposition or charge
based on the income or rents received therefrom whether or not wholly or
partially as a capital levy or otherwise; or (ii) a tax, assessment, levy,
imposition or charge measured by or based in whole or in part upon all or any
part of the Land and/or Building and imposed upon Landlord; or (iii) a license
fee measured by the rents; or (iv) any other tax, assessment, levy, imposition,
charge or license fee however described or imposed, then all such taxes,
assessments, levies, impositions, charges or license fees or the part thereof so
measured or based shall be included in the definition of "Taxes." Tenant shall
pay to Landlord directly that portion of any real estate taxes directly
attributable to improvements made by Tenant beyond Landlord's allowances
(hereinafter referred to as "Tenant's Direct Tax Payment"). "Taxes" shall not
include excess profit taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes and other general income taxes of Landlord.
(b) "Base Taxes" shall mean the assessed valuation of the Land and
Building as finally determined following completion of construction and issuance
of an initial Certificate of Occupancy for any portion of the Building (or such
equivalent certification if Certificates of Occupancy are not to be used) based
on 95% occupancy, multiplied by the tax rate for the Tax Year 1996.
(c) "Tax Year" shall mean each calendar year for which Taxes are
levied by any governmental authority.
(d) "Operational Year" shall mean each calendar year commencing with
calendar year 1997.
(e) "Tenant's Proportionate Share of Increase" shall mean 1.1%
multiplied by the increase in Taxes in any Operational Year in excess of the
Base Taxes. Tenant's Proportionate Share of Increase for the first Operational
Year shall be prorated to reflect the actual occupancy by Tenant for said
Operational Year.
(f) "Tenant's Projected Share of Increase" shall mean Tenant's
Proportionate Share of Increase in Taxes for the projected Operational Year
divided by twelve (12) and payable monthly by Tenant to Landlord as additional
rent.
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5.02. Commencing with the first Operational Year and thereafter,
Tenant shall pay to Landlord as additional rent for the then Operational Year,
Tenant's Projected Share of Increase in Taxes in equal monthly installments.
5.03. After the expiration of each Operational Year, Landlord
shall furnish to Tenant a written statement of the Taxes incurred for such
Operational Year as well as Tenant's Proportionate Share of Increase, if any.
If the statement furnished by Landlord to Tenant pursuant to this Section at the
end of the then Operational Year shall indicate that Tenant's Projected Share of
Increase exceeded Tenant's Proportionate Share of Increase, Landlord shall
either forthwith pay the amount of excess directly to Tenant concurrently with
the statement or credit same against Tenant's next monthly installment of rent.
If such statement furnished by Landlord to Tenant shall indicate that the
Tenant's Proportionate Share of Increase exceeded Tenant's Projected Share of
Increase for the then Operational Year, Tenant shall forthwith pay the amount of
such excess to Landlord.
Commencing with the first Operational Year, Tenant shall pay to
Landlord in equal monthly installments together with its payment of fixed rent
one-twelfth (1/12) of Tenant's Direct Tax Payment.
5.04. As used in Sections 5.04 through 5.06:
(a) "Operating Expenses" shall mean any or all expenses incurred by
Landlord in connection with the operation of the Land and Building (based on 95%
occupancy) of which the Demised Premises are a part, including all expenses
incurred as a result of Landlord's compliance with any of its obligations
hereunder other than Landlord's Work and such expenses shall include: (i)
salaries, wages, medical, surgical and general welfare benefits, (including
group life insurance) and pension payments of employees of Landlord engaged in
the operation and maintenance of the Building; (ii) social security,
unemployment, and payroll taxes, workers' compensation, disability coverage,
uniforms, and dry cleaning for the employees referred to in Subsection (i);
(iii) the cost for the Building and common areas of all charges for oil, gas,
electricity (including, but not limited to, fuel cost adjustments), steam, heat,
ventilation, air-conditioning, heating, and water including any taxes on any
such utilities, but excluding from Operating Expenses the Landlord's cost,
including taxes thereon, of electric energy other than for heating and air-
conditioning furnished to the Demised Premises (which electric energy so
furnished shall be paid for by Tenant pursuant to the provisions of Article 15
hereof); (iv) the cost of all premiums and charges for the following insurances
rent, casualty, liability, fidelity and war risk (if obtainable from the United
States Government); (v) the cost of all building and cleaning supplies for the
common areas of the Building and charges for telephone for the Building; (vi)
the cost of all charges for management, window cleaning, security services, if
any, and janitorial services, and any independent contractor performing work
included within the definition of operating expenses; (vii) legal and accounting
services and other professional fees and disbursements incurred in connection
with the operation and management of the Land and Building (other than as
related to new leases, enforcing Landlord's rights under existing leases, or
sales of the Building); (viii) general maintenance of the Building and the cost
of maintaining and replacing the landscaping; (ix) maintenance of the common
area; (x) any escalations in the
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ground rent payments in excess of the base ground rent required to be paid by
Landlord to the Ground Lessor under the Ground Lease; and (xi) the cost of
capital expenditures, including the purchase of any item of capital equipment or
the leasing of capital equipment which have the effect of reducing the expenses
which would otherwise be included in Operating Expenses, which costs shall be
included in Operating Expenses for the Operational Year in which the costs are
incurred and subsequent Operational Years on a straight-line basis, to the
extent that such items are amortized over such period of time as Landlord
reasonably estimates, with an interest factor equal to the interest rate at the
time of Landlord's having made said expenditure.
If during all or part of any Operational Year, Landlord shall not
furnish any particular item(s) of work or service (which would otherwise
constitute an Operating Expense hereunder) to portions of the Building due to
the fact that (i) such portions are not occupied or leased; (ii) such items of
work or service is not required or desired by the tenant of such portion; (iii)
such tenant is itself obtaining and providing such item of work or service; or
(iv) for other reasons, then, for the purposes of computing Operating Expenses,
the amount for such item and for such period shall be deemed to be increased by
an amount equal to the additional costs and expenses which would reasonably have
been incurred during such period by Landlord if it had at its own expense
furnished such item of work or services to such portion of the Building or such
tenant.
Notwithstanding the foregoing, the following costs and expenses shall
not be included in Operating Expenses:
(1) Executive wages and salaries for employees above the grade of
building manager (including rental commissions);
(2) Amounts received by Landlord through proceeds of insurance except
to the extent they are compensation for sums previously included in Operating
Expenses hereunder;
(3) Cost of repairs or replacements incurred by reason of fire or
other casualty or condemnation to the extent Landlord is compensated therefor;
(4) Advertising and promotional expenditures;
(5) Costs incurred in performing work or furnishing services for any
tenant (including Tenant), whether at such tenant's or Landlord's expense, to
the extent that such work or service is in excess of any work or service that
Landlord is obligated to furnish to tenant at Landlord's expense;
(6) Depreciation, except as provided above;
(7) Brokerage commissions;
(8) Taxes (as hereinbefore defined);
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(9) The cost of electricity (for other than heating and air-
conditioning) furnished to the Demised Premises or any other space leased to
tenants as reasonably estimated by Landlord;
(10) Refinancing costs and mortgage interest and amortization
payments;
(11) Business and Professional dues paid to trade associations and
similar agencies;
(12) Costs of removing hazardous substances including, without
limitation, asbestos;
(13) Interest, fines, penalties or other late payment charges paid by
Landlord; and
(14) Costs incurred by Landlord resulting from a breach of a lease in
the Building or any other contract for the Building.
(b) "Operational Year" shall mean each calendar year commencing with
calendar year 1997.
(c) "Base Year" shall mean calendar year 1996.
(d) "Tenant's Proportionate Share of Increase" shall mean 1.100%
multiplied by the increase in Operating Expenses for the Operational Year over
Operating Expenses for the Base Year. For purposes hereof, the Tenant's
Proportionate Share of Increase has been computed based upon a total square
footage of the Building equal to 320,000 square feet, and a total square footage
of the Demised Premises equal to 3,550 square feet.
(e) "Tenant's Projected Share of Increase" shall mean Tenant's
Proportionate Share of Increase for the projected Operational Year divided by
twelve (12) and payable monthly by Tenant to Landlord as additional rent.
5.05. Commencing with the first Operational Year after Landlord
shall be entitled to receive Tenant's Proportionate Share of Increase, Tenant
shall pay to Landlord as additional rent for the then Operational Year, Tenant's
Projected Share of Increase.
5.06. After the expiration of the first Operational Year and for
each Operational Year thereafter, Landlord shall furnish to Tenant a written
detailed statement of the Operating Expenses (certified to be true and correct
by Landlord) incurred for such Operational Year which statement shall set forth
Tenant's Proportionate Share of Increase, if any. If the statement furnished by
Landlord to Tenant, pursuant to this Section, at the end of the then Operational
Year shall indicate that Tenant's Projected Share of Increase exceeded Tenant's
Proportionate Share of Increase, Landlord shall either forthwith pay the amount
of excess directly to Tenant concurrently with the statement or credit same
against Tenant's next monthly
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installment of rent. If such statement furnished by Landlord to Tenant hereunder
shall indicate that the Tenant's Proportionate Share of Increase exceeded
Tenant's Projected Share of Increase for the then Operational Year, Tenant shall
forthwith pay the amount of such excess to Landlord.
5.07. Every statement given by Landlord pursuant to Sections
5.03 and 5.06 shall be conclusive and binding upon Tenant unless (i) within
ninety (90) days after the receipt of such statement Tenant shall notify
Landlord that it disputes the correctness of the statement, specifying the
particular respects in which the statement is claimed to be incorrect; and (ii)
if such dispute shall not have been settled by agreement, shall submit the
dispute to arbitration within one hundred and twenty (120) days after receipt of
the statement. Within such 90 day period Tenant shall have the right to review,
examine and audit Landlord's books and records for the applicable calendar year.
Tenant agrees that it and its representatives shall conduct a review with
complete confidentiality and shall enter into a reasonable confidentiality
agreement with Landlord respecting the review, examination and audit. Pending
the determination of such dispute by agreement or arbitration as aforesaid,
Tenant shall, within thirty (30) days after receipt of such statement, pay
additional rent in accordance with Landlord's statement and such payment shall
be without prejudice to Tenant's position. If the dispute shall be determined
in Tenant's favor, Landlord shall forthwith pay Tenant the amount of Tenant's
overpayment of rents resulting from compliance with Landlord's statement. If
the dispute is determined in Tenant's favor and there is a discrepancy of 5% or
more, Landlord shall pay Tenant the costs of any audit caused to be performed by
Tenant hereunder. If the discrepancy is 1% or less, then Tenant shall pay
Landlord's costs of defending the audit.
ARTICLE 6
SUBORDINATION, NOTICE TO LESSORS AND MORTGAGEES
6.01. This Lease, and all rights of Tenant hereunder are and
shall be subject and subordinate in all respects to all ground leases,
overriding leases and underlying leases of the Land and/or the Building now or
hereafter existing and to all mortgages which may now or hereafter affect the
Land and/or the Building and/or any of such leases, whether or not such
mortgages shall also cover other lands and/or buildings, to each and every
advance made or hereafter to be made under such mortgages, and to all renewals,
modifications, replacements, and extensions of such leases and such mortgages
and spreaders and consolidations of such mortgages. This Section shall be self-
operative and no further instrument of subordination shall be required. In
confirmation of such subordination, Tenant shall promptly execute and deliver an
instrument that Landlord, the lessor of any such lease or the holder of any such
mortgage or any of their respective successors in interest may reasonably
request to evidence such subordination. The leases to which this Lease is, at
the time referred to, subject and subordinate pursuant to this Article are
hereinafter sometimes called "superior leases" and the mortgages to which this
Lease is, at the time referred to, subject and subordinate are hereinafter
sometimes called "superior mortgages", the lessor of a superior lease or its
successor in interest at the time referred to is sometimes hereinafter called a
"lessor", and the holder of a superior mortgage or its successor in interest at
the time referred to is sometimes hereinafter called a "superior mortgagee."
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6.02. With respect to the Ground Lease, Landlord hereby
represents to Tenant as follows:
(i) The Ground Lease is in full force and effect.
(ii) All rent and other charges due under the Ground Lease as of the
date hereof has been paid.
(iii) This Lease does not violate the provisions of the
Gound Lease.
ARTICLE 7
QUIET ENJOYMENT
7.01. So long as Tenant pays all of the fixed rent and
additional rent due hereunder and performs all of Tenant's other obligations
hereunder, Tenant shall peaceably and quietly have, hold, and enjoy the Demised
Premises subject, nevertheless, to the obligations of this Lease and, as
provided in Article 6, to the superior leases and the superior mortgages.
ARTICLE 8
ASSIGNMENT, MORTGAGING, SUBLETTING
8.01. Neither this Lease, nor the term and estate hereby
granted, nor any part hereof or thereof, nor the interest of Tenant in any
sublease, or the rentals thereunder, shall be assigned, mortgaged, pledged,
encumbered or otherwise transferred by Tenant, and neither the Demised Premises,
nor any part thereof shall be encumbered in any manner by reason of any act or
omission on the part of Tenant or anyone claiming under or through Tenant or
shall be sublet, or offered or advertised for subletting, or be used or occupied
or permitted to be used or occupied, or utilized for desk space or for mailing
privileges, by anyone other than Tenant or for any purpose other than as
permitted by this Lease, without the prior written consent of Landlord in every
case, except as expressly otherwise provided in this Article. Landlord's
consent to subletting or assigning the Demised Premises shall not be
unreasonably withheld. Landlord shall not be deemed unreasonable for the
purposes of consent for subletting or assigning if Landlord withholds its
consent for any of the following: (i) in Landlord's belief the subtenant or
assignee is known as a poor tenant; (ii) the sub-tenant's or assignee's use will
burden the parking facilities of the Building; (iii) the sub-tenant's or
assignee's use will violate any provision of this Lease; (iv) if such sub-tenant
or assignee is an environmental nuisance; (v) or for any other reason which
shall not be unreasonable for Landlord to withhold its consent.
8.02. If this Lease be assigned, whether or not in violation of
the provisions of this Lease, Landlord may collect rent from the assignee. If
the Demised Premises or any part thereof be sublet or be used or occupied by
anybody other than Tenant, whether or not in violation of this Lease, Landlord
may, after default by Tenant and expiration of Tenant's time to cure such
default, collect rent from the undertenant or occupant. In either event,
Landlord may apply the net amount collected to the rents herein reserved, but no
such assignment, underletting,
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occupancy or collection shall be deemed a waiver of any of the provisions of
Section 8.01, or the acceptance of the assignee, undertenant or occupants as
Tenant, or a release of Tenant from the further performance by Tenant of
Tenant's obligations under this Lease. The consent by Landlord to assignment,
mortgaging, underletting or use or occupancy by others shall not in any wise be
considered to relieve Tenant from obtaining the express written consent of
Landlord to any other or further assignment, mortgaging or underletting or use
or occupancy by others not expressly permitted by this Article.
8.03. The following provisions shall govern in connection with
the subletting of all or a portion of the Demised Premises:
(a) Tenant shall submit in writing to Landlord (i) the name of the
proposed subtenant; (ii) the nature and character of the proposed subtenant's
business, and the intended use to be made of the Demised Premises by the
proposed subtenant; (iii) the terms and conditions of the proposed sublease; and
(iv) such reasonable financial information as Landlord may request regarding the
proposed subtenant.
(b) Within thirty (30) days of Landlord's receipt of the information
described in (a) above, Landlord, at Landlord's election may (i) elect to
sublease the Demised Premises directly from Tenant either upon (x) the same
terms and conditions offered to the proposed subtenant or, (y) upon the same
terms and conditions as set forth in this Lease; or (ii) cancel this Lease as to
that portion of the Demised Premises which Tenant desires to sublease, in which
event Tenant agrees to surrender all of its right, title, and interest hereunder
and Landlord may thereafter enter into a direct Lease with the proposed
subtenant or with any other persons as Landlord may desire; or (iii) consent to
the subletting on such terms and conditions as established by Landlord,
including Landlord's participation in any rentals received by Tenant.
(c) As a condition to Landlord's consent, if given under (b) above,
Landlord shall have obtained consent to such proposed subletting by an superior
lessor and/or superior mortgagee, provided such superior lessor and/or superior
mortgagee requires consent to the subletting.
(d) In connection with any subletting, Tenant shall not offer the
Demised Premises, or any part thereof, to any other tenant in the Building or
their subsidiaries or affiliates at a rental rate less than the current rental
rate for office buildings in the surrounding area.
8.04. Tenant shall remain fully liable for the performance of
all Tenant's obligations hereunder notwithstanding any subletting provided for
herein (except to Landlord), and without limiting the generality of the
foregoing, shall remain fully responsible and liable to Landlord for all acts
and omissions of any subtenant or anyone claiming under or through any subtenant
which shall be in violation of any of the obligations of this Lease and any such
violation shall be deemed to be a violation by Tenant.
8.05. Tenant shall not, without the prior written consent of
Landlord, assign this Lease, and the provisions of Section 8.03 with respect to
subletting shall equally apply to any
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assignment of this Lease. Tenant herein named, or any immediate or remote
successor in interest of Tenant herein named, shall remain liable jointly and
severally (as a primary obligor) with its assignee and all subsequent assignees
for the performance of Tenant's obligations hereunder. In the event that Tenant
hereunder is a corporation (other than one whose shares, now or in the future,
are regularly and publicly traded on a recognized stock exchange, including over
the counter, or is a public company or merges with a public company), then any
substantial change in the ownership of and/or power to vote the majority of the
outstanding capital stock of Tenant, other than by inheritance or operation of
law, shall be deemed an assignment of this Lease and the provisions with respect
to assignment shall be applicable.
8.06. Notwithstanding anything to the contrary contained in this
Article with respect to assignment or subletting, Landlord consents to any
assignment and/or subletting (i) to any parent, affiliate or wholly-owned
subsidiary of Tenant (as defined in Rule 240.12b-2 under the Securities Exchange
Act of 1934) or (ii) to any corporation or other entity which succeeds to all or
substantially all of the assets and business of Tenant.
8.07. Tenant agrees that in connection with each separate
request for a Landlord's consent to a subletting or assignment, Tenant shall pay
to Landlord the sum of $500.00 representing a reasonable compensation to
Landlord for the administration costs of evaluating the request.
8.08. Tenant further agrees that it shall not place any signs on
the windows located in the Demised Premises indicating that all or any portion
of the Demised Premises are available for subleasing or assignment.
ARTICLE 9
COMPLIANCE WITH LAWS AND REQUIREMENTS
OF PUBLIC AUTHORITIES
9.01. Tenant shall give prompt notice to Landlord of any notice
it receives of the violation of any law or requirement of public authority, and
at its expense shall comply with all laws and requirements of public authorities
which shall, with respect to the Demised Premises or the use and occupation
thereof, or the abatement of any nuisance, impose any violation, order or duty
on Landlord or Tenant, arising from (i) Tenant's use of the Demised Premises;
(ii) the manner of conduct of Tenant's business or operation of its
installation, equipment or other property therein; (iii) any cause or condition
created by or at the instance of Tenant, other than by Landlord's performance of
any work for or on behalf of Tenant; or (iv) the breach of any of Tenant's
obligations hereunder. Furthermore, Tenant need not comply with any such law or
requirement of public authority so long as Tenant shall be contesting the
validity thereof, or the applicability thereof to the Demised Premises, in
accordance with Section 9.02.
Nothing contained herein shall be construed to require Tenant to make
structural alterations to the Building except to the extent that same are
required by reason of Tenant's specific use (other than general office).
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9.02. Tenant may, at its expense (and if necessary, in the name
of but without expense to Landlord) contest, by appropriate proceedings
prosecuted diligently and in good faith, the validity, or applicability to the
Demised Premises, of any law or requirement of public authority, and Landlord
shall cooperate with Tenant in such proceedings provided that:
(a) Tenant shall defend, indemnify, and hold harmless Landlord against
all liability, loss or damage which Landlord shall suffer by reason of such non-
compliance or contest, including reasonable attorney's fees and other expenses
reasonably incurred by Landlord;
(b) Such non-compliance or contest shall not constitute or result in
any violation of any superior lease or superior mortgage, or, if such superior
lease and/or superior mortgage shall permit such non-compliance or contest on
condition of the taking of action or furnishing of security by Landlord, such
action shall be taken and such security shall be furnished at the expense of
Tenant; and
(c) Tenant shall keep Landlord advised as to the status of such
proceedings.
9.03. Landlord states that, to the best of its knowledge, the
Building complies with Title III of the Americans with Disabilities Act, (the
Act), as the Act applies to existing structures constituting commercial
facilities. Landlord further states that Landlord's Work, as described in
Exhibit C, shall comply with the Act under Title III for existing structures
which are commercial facilities. If, after the Demised Premises are ready for
occupancy in accordance with Article 4, the Act requires further changes to the
Building when occasioned by any other tenant, then such changes shall not be
Tenant's responsibility. If, after the Demised Premises are ready for
occupancy, further changes to the Building, including the Demises Premises, are
required by virtue of the Lease and/or Tenant's use and occupancy, such changes
shall be Tenant's responsibility. Notwithstanding the foregoing, Tenant shall
not be required to make structural changes to the Building.
ARTICLE 10
INSURANCE
10.01. Tenant shall not violate, or permit the violation of, any
condition imposed by the all-risk casualty policy issued for the Building and
shall not do anything, or permit anything to be kept, in the Demised Premises
which would increase the fire or other casualty insurance rate on the Building
or the property therein over the rate which would otherwise then be in effect,
(unless Tenant pays the resulting increased amount of premium as provided in
Section 10.02) or which would result in insurance companies of good standing
refusing to insure the Building or any of such property in amounts and at normal
rates reasonably satisfactory to Landlord. However, Tenant shall not be subject
to any liability or obligation under this Article by reason of the proper use of
the Demised Premises for the purposes permitted by Article 2.
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10.02. If, by reason of any act or omission on the part of
Tenant, the rate of fire insurance with extended all-risk coverage on the
Building or equipment or other property of Landlord or other tenants shall be
higher than it otherwise would be, Tenant shall reimburse Landlord, on demand,
for that part of the premiums for fire insurance and extended all-risk coverage
paid by Landlord because of such act or omission on the part of Tenant, which
sum shall be deemed to be additional rent and collectible as such.
10.03. In the event that any dispute should arise between
Landlord and Tenant concerning insurance rates, a schedule or "make up" of rates
for the Building or the Demised Premises, as the case may be, issued by the Fire
Insurance Rating Organization of New Jersey or other similar body making rates
for fire insurance and extended coverage for the premises concerned, shall be
presumptive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates with extended coverage then applicable to
such premises.
10.04. Tenant shall obtain and keep in full force and effect
during the term of this Lease, at its own cost and expense, Comprehensive
General Liability Insurance, such insurance to afford protection in an amount of
not less than $1,000,000 for injury or death to any one person, $3,000,000 for
injury or death arising out of any one occurrence, and $1,000,000 for damage to
property, protecting and naming the Landlord and the Tenant as insured against
any and all claims for personal injury, death or property damage occurring in,
upon, adjacent, or connected with the Demised Premises and any part thereof.
Tenant shall pay all premiums and charges therefor and upon failure to do so
Landlord may, but shall not be obligated to, make payments, and in such latter
event the Tenant agrees to pay the amount thereof to Landlord on demand and said
sum shall be deemed to be additional rent, and in each instance collectible on
the first day of any month following the date of notice to Tenant in the same
manner as though it were rent originally reserved hereunder, together with
interest thereon at the rate of three points in excess of Prime Rate of the
First Union. Tenant will use its best efforts to include in such Comprehensive
General Liability Insurance policy a provision to the effect that same will be
non-cancelable, except upon reasonable advance written notice to Landlord. The
original insurance policies or appropriate certificates shall be deposited with
Landlord together with any renewals, replacements or endorsements to the end
that said insurance shall be in full force and effect for the benefit of the
Landlord during the term of this Lease. In the event Tenant shall fail to
procure and place such insurance, the Landlord may, but shall not be obligated
to, procure and place same, in which event the amount of the premium paid shall
be refunded by Tenant to Landlord upon demand and shall in each instance be
collectible on the first day of the month or any subsequent month following the
date of payment by Landlord, in the same manner as though said sums were
additional rent reserved hereunder together with interest thereon at the rate of
three points in excess of the Prime Rate of the First Union.
10.05. Landlord and Tenant agree to use their best efforts to
include in each of its insurance policies a waiver of the insurer's right of
subrogation against the other party or if such waiver shall be unobtainable or
unenforceable (a) an express agreement that such policy shall not be invalidated
if the insured waives or has waived before the casualty, the right of recovery
against any party responsible for a casualty covered by the policy or (b) any
other form of permission for the release of the other party. If such waiver,
agreement, or permission shall not be or shall cease to be obtainable without
additional charge, or at all, the insured party shall
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so notify the other party after learning thereof. In such a case, if the other
party shall agree in writing to pay the insurer's additional charge therefor,
such waiver agreement or permission shall, if obtainable, be included in the
policy.
10.06. Each party hereby releases the other party with respect
to any claim (including a claim for negligence) which it might otherwise have
against the other party for loss, damage, or destruction with respect to its
property (including rental value or business interruption) occurring during the
term of this Lease to the extent to which it is insured under a policy or
policies containing a waiver of subrogation or permission to release liability
or naming the other party as an additional insured, as provided in Sections
10.04 and 10.05. If notwithstanding the recovery of insurance proceeds by
either party for loss, damage or destruction of its property (or rental value or
business interruption) the other party is liable to the first party with respect
thereto or is obligated under this Lease to make replacement, repair, or
restoration or payment, then provided that the first party's right of full
recovery under its insurance policies is not thereby prejudiced or otherwise
adversely affected, the amount of the net proceeds of the first party's
insurance against such loss, damage or destruction shall be offset against the
second party's liability to the first party thereof, or shall be made available
to the second party to pay for replacement, repair, or restoration, as the case
may be.
10.07 The waiver of subrogation or permission for release
referred to in Section 10.05 shall extend to the agents of each party and their
employees and, in the case of Tenant, shall also extend to all other persons and
entities occupying, using or visiting the Demised Premises in accordance with
the terms of this Lease, but only if and to the extent that such waiver or
permission can be obtained without additional charge (unless such party shall
pay such charge). The releases provided for in Section 10.06 shall likewise
extend to such agents, employees and other persons and entities, if and to the
extent that such waiver or permission is effective as to them. Nothing contained
in Section 10.06 shall be deemed to relieve either party of any duty imposed
elsewhere in this Lease to repair, restore or rebuild or to nullify any
abatement of rents provided for elsewhere in this Lease. Except as otherwise
provided in Section 10.04, nothing contained in Sections 10.05 and 10.06 shall
be deemed to impose upon either party any duty to procure or maintain any of the
kinds of insurance referred to therein or any particular amounts or limits of
any such kinds of insurance. However, each party shall advise the other, upon
request, from time to time (but not more often than once a year) of all of the
policies of insurance it is carrying of any of the kinds referred to in Sections
10.01 and 10.04, and if it shall discontinue any such policy or allow it to
lapse, shall notify the other party thereof with reasonable promptness. The
insurance policies referred to in Sections 10.05 and 10.06 shall be deemed to
include policies procured and maintained by a party for the benefit of its
lessor, mortgagee, or pledgee.
ARTICLE 11
RULES AND REGULATIONS
11.01. Tenant and its employees and agent shall faithfully
observe and comply with the Rules and Regulations annexed hereto as Exhibit E,
and such reasonable changes therein (whether by modification, elimination, or
addition) as Landlord at any time or times hereafter
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may make and communicate in writing to Tenant, which do not unreasonably affect
the conduct of Tenant's business in the Demised Premises; provided, however,
that in case of any conflict or inconsistency between the provisions of this
Lease and any of the Rules and Regulations as originally promulgated or as
changed, the provisions of this Lease shall control.
11.02. Nothing contained in this Lease shall be construed to
impose upon Landlord any duty or obligation to Tenant to enforce the Rules and
Regulations or the terms, covenants, or conditions in any other lease, as
against any other tenant and Landlord shall not be liable to Tenant for
violation of the same by any other tenant or its employees, agents or visitors.
However, Landlord shall not enforce any of the Rules and Regulations in such
manner as to discriminate against Tenant or anyone claiming under or through
Tenant.
ARTICLE 12
TENANT'S CHANGES
12.01. Tenant shall make no changes, alterations, additions,
installations, substitutions, or improvements (hereinafter Collectively called
"changes", and, as applied to changes Provided for in this Article, "Tenant's
Changes") in and to the Demised Premises without the express prior written
consent of Landlord. No supervision fee shall be required with respect to
painting or carpeting.
All proposed Tenant's Changes shall be submitted to Landlord for
written consent at least forty five (45) days prior to the date Tenant intends
to commence such changes, such submission to include all plans and
specifications for the work to be done, proposed scheduling, and the estimated
cost of completion of Tenant's Changes. If Landlord consents to Tenant's
Changes, Tenant may commence and diligently prosecute to completion Tenant's
Changes, under the direct supervision of Landlord.
Tenant shall pay to Landlord a supervision fee (which shall include
the cost of review of the proposed Tenant's Changes) equal to ten percent (10%)
of the certified cost of completion of Tenant's Changes. Prior to the
commencement of Tenant's Changes, Tenant shall pay to Landlord ten percent (10%)
of the estimated cost of completion (the "Estimated Payment") as additional
rent. Within fifteen (15) days after completion of Tenant's Changes, Tenant
shall furnish Landlord with a statement, certified by an officer or a principal
of Tenant to be accurate and true, of the total cost of completion of Tenant's
Changes (the "Total Cost"). If such certified statement furnished by Tenant
shall indicate that the Estimated Payment exceeded ten percent (10%) of the
Total Cost, Landlord shall forthwith either (i) pay the amount of excess
directly to Tenant concurrently with the delivery of the certified statement or
(ii) permit Tenant to credit the amount of such excess against the subsequent
payment of rent due hereunder. If such certified statement furnished by Tenant
shall indicate that ten percent (10%) of the Total Cost exceeded Tenant's
Estimated Payment, Tenant shall, simultaneously with the delivery to Landlord of
the certified statement, pay the amount of such excess to Landlord as additional
rent.
12.02. Notwithstanding the provisions of Section 12.01, all
proposed Tenant's Changes which shall affect or alter:
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(a) The outside appearance or the strength of the Building or of any
of its structural parts; or
(b) Any part of the Building outside of the Demised Premises; or
(c) The mechanical, electrical, sanitary and other service systems of
the Building, or increase the usage of such systems;
shall be performed only by the Landlord, at a cost to be mutually agreed upon
between Landlord and Tenant.
12.03. Tenant, at its expense, shall obtain all necessary
governmental permits and certificates for the commencement and prosecution of
Tenant's Changes and for final approval thereof upon completion, and shall cause
Tenant's Changes to be performed in compliance therewith and with all applicable
laws and requirements of public authorities, and with all applicable
requirements of insurance bodies, and in good and workmanlike manner, using new
materials and equipment at least equal in quality and class to the original
installations in the Building. Tenant's Changes shall be performed in such
manner as not to unreasonably interfere with or delay and (unless Tenant shall
indemnify Landlord therefor to the latter's reasonable satisfaction) as not to
impose any additional expense upon Landlord in the construction, maintenance or
operation of the Building. Throughout the performance of Tenant's Changes,
Tenant, at its expense, shall carry, or cause to be carried, workmen's
compensation insurance in statutory limits and general liability insurance for
any occurrence in or about the Building, in which Landlord and its agents shall
be named as parties insured in such limits as Landlord may reasonably prescribe,
with insurers reasonably satisfactory to Landlord. Tenant shall furnish
Landlord with reasonably satisfactory evidence that such insurance is in effect
at or before the commencement of Tenant's Changes and, on request, at reasonable
intervals thereafter during the continuance of Tenant's Changes. If any of
Tenant's Changes shall involve the removal of any fixtures, equipment or other
property in the Demised Premises which are not Tenant's Property (as defined in
Article 13), such fixtures, equipment or other property shall be promptly
replaced, at Tenant's expense, with new fixtures, equipment or other property
(as the case may be) of like utility and at least equal value. In addition,
unless Landlord shall otherwise expressly consent in writing, the Tenant shall
deliver such removed fixtures to Landlord.
12.04. Tenant, at its expense, and with diligence and dispatch,
shall procure the cancellation or discharge of all notices of violation arising
from or otherwise connected with Tenant's Changes which shall be issued by any
public authority having or asserting jurisdiction. Tenant shall defend,
indemnify and save harmless Landlord against any and all mechanic's and other
liens filed in connection with Tenant's Changes, including the liens of any
security interest in, conditional sales of, or chattel mortgages upon, any
material, fixtures or articles so installed in and constituting part of the
Demised Premises and, against all costs, expenses and liabilities incurred in
connection with any such lien, security interest, conditional sale or chattel
mortgage or any action or proceeding brought thereon. Tenant, at its expense,
shall procure the satisfaction or discharge of all such liens within fifteen
(15) days after Landlord makes written demand therefor. However, nothing herein
contained shall prevent Tenant from contesting, in good faith
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and at its own expense, any such notice of violation, provided that Tenant shall
comply with the provisions of Section 9.02.
12.05. Tenant agrees that the exercise of its rights pursuant to
the provisions of this Article l2 shall not be done in a manner which would
create any work stoppage, picketing, labor disruption or dispute or violate
Landlord's union contracts affecting the Land and Building, nor interference
with the business of Landlord or any tenant or occupant of the Building.
ARTICLE 13
TENANT'S PROPERTY
13.01. All fixtures, equipment, improvements, and appurtenances
attached to or built into the Demised Premises at the commencement of or during
the term of this Lease, whether or not by or at the expense of Tenant, shall be
and remain a part of the Demised Premises, shall be deemed the property of
Landlord and shall not be removed by Tenant, except as hereinafter in this
Article expressly provided.
13.02. All business and trade fixtures, machinery and equipment,
communications equipment and office equipment, whether or not attached to or
built into the Demised Premises, which are installed in the Demised Premises by
or for the account of Tenant, without expense to Landlord, and can be removed
without permanent structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Demised Premises (all of which are sometimes called "Tenant's
Property"), shall be and shall remain the property of Tenant and may be removed
by it at any time during the term of this Lease; provided that if any of
Tenant's Property is removed, Tenant shall repair or pay the cost of repairing
any damage to the Demised Premises or to the Building resulting from such
removal. Any equipment or other property for which Landlord shall have granted
any allowance or credit to Tenant shall not be deemed to have been installed by
or for the account of Tenant, without expense to Landlord, and shall not be
considered Tenant's Property.
13.03. At or before the Expiration Date, or the date of an
earlier termination of this Lease, or as promptly as practicable after such an
earlier termination date, Tenant at its expense, shall remove from the Demised
Premises all of Tenant's Property except such items thereof as Tenant shall have
expressly agreed in writing with Landlord were to remain and to become the
property of Landlord, and, if requested by Landlord, all items of work done by
or on behalf of Tenant after the Commencement Date shall be removed by Tenant
and Tenant shall repair any damage to the Demised Premises or the Building
resulting from such removal. If Tenant fails to remove its Property and/or
otherwise fails to perform any restoration required of it under this Lease, then
Tenant shall be deemed a hold-over Tenant as contemplated in Article 40.
13.04. Any other items of Tenant's Property (except money,
securities, and other like valuables) which shall remain in the Demised Premises
after the Expiration Date or after a period of fifteen (15) days following an
earlier termination date, may, at the option of the Landlord, be deemed to have
been abandoned, and in such case either may be retained by
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Landlord as its property or may be disposed of, without accountability, in such
manner as Landlord may see fit, at Tenant's expense.
ARTICLE 14
REPAIRS AND MAINTENANCE
14.01. Tenant shall take good care of the Demised Premises.
Tenant, at its expense, shall promptly make all repairs, ordinary or
extraordinary, interior or exterior, structural or otherwise in and about the
Demised Premises and the Building, as shall be required by reason of (i) the
performance of Tenant's Finish Work or Tenant's Changes; (ii) the installation,
use or operation of Tenant's Property in the Demised Premises by Tenant, its
agents or employees; (iii) the moving of Tenant's Property in or out of the
Building; or (iv) the misuse or neglect of Tenant or any of its employees,
agents, contractors or invitees; but Tenant shall not be responsible, and
Landlord shall be responsible, for any of such repairs as are required by reason
of Landlord's neglect or other fault in the manner of performing any of Tenant's
Finish Work or Tenant's Changes which may be undertaken by Landlord for Tenant's
account or are otherwise required by reason of neglect or other fault of
Landlord or its employees, agents, or contractors. Except if required by the
neglect or other fault of Landlord or its employees, agents, or contractors,
Tenant, at its expense, shall replace all scratched, damaged or broken doors or
other glass in or about the Demised Premises and shall be responsible for all
repairs, maintenance, and replacement of wall and floor coverings in the Demised
Premises and, for the repair and maintenance of all lighting fixtures therein.
14.02. Landlord, subject to the provisions of Section 5.04,
shall keep and maintain the Building and its fixtures, appurtenances, systems
and facilities serving the Demised Premises, in good working order, condition,
and repair and shall make with all due diligence all repairs, structural and
otherwise, interior and exterior, as and when needed in or about the Demised
Premises, except for those repairs for which Tenant is responsible pursuant to
any other provisions of this Lease.
14.03. Landlord shall have no liability to Tenant by reason of
any inconvenience, annoyance, interruption, or injury to Tenant's business
arising from Landlord's making any repairs or changes which Landlord is required
or permitted by this Lease or required by law, to make in or to any portion of
the Building or the Demised Premises, or in or to the fixtures, equipment of
appurtenances of the Building or the Demised Premises, provided that Landlord
shall use due diligence with respect thereto and shall perform such work, except
in case of emergency, at a time reasonably convenient to Tenant and otherwise in
such a manner as will not materially interfere with Tenant's use of the Demised
Premises. Notwithstanding the foregoing, if Landlord fails to make repairs or
comply with any laws and such condition shall continue for any reason in excess
of 10 consecutive days and such interruption or failure results in the denial to
Tenant of access to the Demised Premises or otherwise renders impossible or
impracticable the intended use of a significant portion of the Demised Premises,
Tenant shall be entitled, upon 5 days written notice to Landlord, to an
abatement of rent for the period of such failure, and if such failure continues
for a period in excess of 45 days, Tenant may terminate this Lease by giving 5
days written notice to Landlord and the holder of any superior lease or superior
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mortgage at any time before such services are restored or repairs are made or
relevant law is complied with.
ARTICLE 15
ELECTRICITY
15.01. Landlord shall furnish the electric energy that Tenant
shall require in the Demised Premises. Tenant shall pay to Landlord, as
additional rent, the costs and charges for all electric energy furnished to
Tenant at the Demised Premises. Additional rent for such electric energy shall
be calculated and payable in the manner hereinafter set forth.
15.02. Within a reasonable time after the commencement of the
term of this Lease, subsequent to Tenant's having taken occupancy of the Demised
Premises and having installed and commenced the use of Tenant's electrical
equipment, Landlord, at Tenant's sole expense, shall cause a survey to be made
by a reputable independent electrical engineer or similar agency of the
estimated use of electric energy (other than for heat and air conditioning) to
the Demised Premises, and shall compute the cost thereof for the quantity so
determined at prevailing retail rates. Tenant shall pay Landlord the cost of
such electric energy, as so calculated, on a monthly basis, as additional rent,
together with its payment of fixed rent. Notwithstanding the foregoing, if the
survey evidences an increase in accordance with this Article of 5% or less, then
the cost of such survey shall be borne by Landlord.
Until such time as Landlord shall complete the aforedescribed survey,
Tenant shall pay to Landlord, each and every month, as additional rent, for and
on account of Tenant's electrical consumption, the sum of $369.79 to be applied
against Tenant's obligations hereunder. Upon completion of the survey, there
shall be an adjustment for the period from the Commencement Date through the
date that the results of the survey shall be effectuated as shall be required.
Landlord shall have the right, at any time, during the term of this Lease, to
cause the Demised Premises to be resurveyed. In the event that such resurvey
shall indicate increased electrical consumption by Tenant at the Demised
Premises, there shall be an adjustment in the amount paid by Tenant to Landlord
for Tenant's electrical consumption in accordance with the resurvey as well as
an adjustment retroactive to the date Landlord establishes Tenant's increase in
electrical consumption in excess of the consumption established by the prior
survey.
Landlord shall submit to Tenant the results of any electrical survey
and the same shall be deemed binding upon Tenant unless Tenant shall object to
same within ninety (90) days of the date that Landlord shall furnish Tenant with
the results of the survey. Tenant shall have the right, at Tenant's sole cost
and expense, to conduct its own independent survey. In the event that Landlord
and Tenant cannot agree upon the results of a survey the same shall be submitted
to arbitration in accordance with Article 33, provided, however, until such time
as the arbitration shall have been concluded, the results of Landlord's survey
shall be utilized for the purposes of determining Tenant's electrical
consumption with an appropriate adjustment to be made based upon the results of
the arbitration.
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15.03. Landlord shall not be liable in any way to Tenant for any
failure or defect in the supply or character of electric energy furnished to the
Demised Premises by reason of any requirement, act, or omission of the public
utility serving the Building with electricity or for any other reason. Landlord
shall furnish and install all replacement lighting tubes, lamps, bulbs, and
ballasts required in the Demised Premises at Tenant's expense.
15.04. Tenant's use of electric energy in the Demised Premises
shall not at any time exceed the capacity of any of the electrical conductors
and equipment in or otherwise serving the Demised Premises. In order to insure
that such capacity is not exceeded and to avert possible adverse effect upon the
Building electric service, Tenant shall not, without Landlord's prior written
consent in each instance (which shall not be unreasonably withheld), connect any
additional fixtures, appliances, or equipment to the Building electrical
distribution system or make any alteration or addition to the electric system of
the Demised Premises existing on the Commencement Date. Should Landlord grant
such consent, all additional risers or other equipment required therefor shall
be provided by Landlord and the cost thereof shall be paid by Tenant upon
Landlord's demand. As a condition to granting such consent, Landlord, at
Tenant's sole expense, may cause a new survey to be made of the use of electric
energy (other than for heating and air-conditioning) in order to calculate the
potential additional electric energy to be made available to Tenant based upon
the estimated additional capacity of such additional risers or other equipment.
When the amount of such increase is so determined, and the estimated cost
thereof is calculated, the amount of monthly additional rent payable pursuant to
Section 15.02 hereof shall be adjusted to reflect the additional cost, and shall
be payable as therein provided.
15.05. If the public utility rate schedule for the supply of
electric current to the Building shall be increased during the term of this
Lease, the additional rent payable pursuant to Section .15.02 hereof shall be
equitably adjusted to reflect the resulting increase in Landlord's cost of
furnishing electric service to the Demised Premises effective as of the date of
any increase. Landlord and Tenant agree that the rate charged to Tenant for
electricity shall not be greater than the rate Tenant would have paid had the
Demised Premises been separately metered.
15.06. Tenant agrees within three (3) months from the
Commencement Date to submit to Landlord a list of fixtures and equipment
utilizing electric current including, but not limited to, copying machines,
computers and word processing equipment and equipment of a similar nature. On
the first day of each calendar quarter thereafter, Tenant shall submit to
Landlord a statement indicating any substantial changes in the list previously
supplied as same may be updated by the required quarterly statements.
ARTICLE 16
HEATING, VENTILATION AND AIR-CONDITIONING
16.01. Landlord, subject to the provisions of Section 5.04,
shall maintain and operate the heating, ventilating, and air-conditioning
systems (hereinafter called "the systems") and shall furnish heat, ventilating,
and air conditioning (hereinafter collectively called "air conditioning
service") in the Demised Premises through the systems, in compliance with the
performance specifications set forth in Exhibit C, as may be required for
comfortable occupancy
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of the Demised Premises from 8:00 A.M. to 6:00 P.M. Monday through Friday except
days observed by the Federal or the state government as legal holidays ("Regular
Hours") throughout the year. If Tenant shall require air-conditioning service at
any other time (hereinafter called "after hours"), Landlord shall furnish such
after hours air-conditioning service upon reasonable advance notice from Tenant,
and Tenant shall pay Landlord's then established charges therefor on Landlord's
demand. Landlord's current after hours service charge is $95.00 per hour.
16.02. Use of the Demised Premises, or any part thereof, in a
manner exceeding the design conditions (including occupancy and connected
electrical load) specified in Exhibit C for air-conditioning service in the
Demised Premises, or rearrangement of partitioning which interferes with normal
operation of the air-conditioning in the Demised Premises, may require changes
in the air-conditioning system servicing the Demised Premises. Such changes, so
occasioned, shall be made by Landlord, at Tenant's expense, as Tenant's Changes
pursuant to Article l2.
ARTICLE 17
LANDLORD'S OTHER SERVICES
17.01. Landlord, subject to the provisions of Section 5.04,
shall provide public elevator service, passenger and service, by elevators
serving the floor on which the Demised Premises are situated during Regular
Hours, and shall have at least one passenger elevator subject to call at all
other times.
17.02. Landlord, subject to the provisions of Section 5.04,
shall cause the Demised Premises, including the exterior and the interior of the
windows thereof, to be cleaned. Tenant shall pay to Landlord on demand the costs
incurred by Landlord for (a) extra cleaning work in the Demised Premises
required because of (i) misuse or neglect on the part of Tenant or its employees
or visitors; (ii) use of portions of the Demised Premises for preparation,
serving or consumption of food or beverages, data processing, or reproducing
operations, private lavatories or toilets or other special purpose areas
requiring greater or more difficult cleaning work than office areas; (iii)
unusual quantity of interior glass surfaces; (iv) non-building standard
materials or finishes installed by Tenant or at its request; and (b) removal
from the Demised Premises and the Building of so much of any refuse and rubbish
of Tenant as shall exceed that ordinarily accumulated daily in the routine of
business office occupancy. Landlord, its cleaning contractor, and their
employees shall have after-hours access to the Demised Premises and the free use
of light, power, and water in the Demised Premises as reasonably required for
the purpose of cleaning the Demised Premises in accordance with Landlord's
obligations hereunder.
17.03. Landlord, subject to the provisions of Section 5.04,
shall furnish adequate hot and cold water to each floor of the Building for
drinking, lavatory, and cleaning purposes, together with soap, towels, and
toilet tissue for each lavatory. If Tenant uses water for any other purpose,
Landlord, at Tenant's expense, shall install meters to measure Tenant's
consumption of cold water and/or hot water for such other purposes and/or steam,
as the case may be. Tenant shall pay for the quantities of cold water and hot
water shown on such meters, at Landlord's cost thereof, on the rendition of
Landlord's bills therefor.
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17.04. Landlord, at its expense, and at Tenant's request, shall
insert initial listings on the Building directory of the names of Tenant, and
the names of any of their officers and employees, provided that the names so
listed shall not take up more than Tenant's proportionate share of the space on
the Building directory. All Building directory changes made at Tenant's request
after the Tenant's initial listings have been placed on the Building directory
shall be made by Landlord at the expense of Tenant, and Tenant agrees to
promptly pay to Landlord as additional rent the cost of such changes within ten
(10) days after Landlord has submitted an invoice therefor.
17.05. Landlord reserves the right, without any liability to
Tenant, to stop service of any of the heating, ventilating, air conditioning,
electric, sanitary, elevator, or other Building systems serving the Demised
Premises, or the rendition of any of the other services required of Landlord
under this Lease, whenever and for so long as may be necessary, by reason of
accidents, emergencies, strikes, or the making of repairs or changes which
Landlord is required by this Lease or by law to make or in good faith deems
necessary, by reason of difficulty in securing proper supplies of fuel, steam,
water, electricity, labor or supplies, or by reason of any other cause beyond
Landlord's reasonable control. Notwithstanding the foregoing, if there is an
interruption of Landlord's services and such condition shall continue for any
reason in excess of 10 consecutive days and such interruption results in the
denial to Tenant of access to the Demised Premises or otherwise renders
impossible or impracticable the intended use of a significant portion of the
Demised Premises, Tenant shall be entitled, upon 5 days written notice to
Landlord, to an abatement of rent for the period of such interruption, and if
such interruption continues for a period in excess of 45 days, Tenant may
terminate this Lease by giving 5 days written notice to Landlord and the holder
of any superior lease or superior mortgage at any time before such services are
restored or repairs are made or relevant law is complied with.
17.06. Landlord shall make available for Tenant's use in common
with other tenants of the Building the parking area adjacent to the Building.
Landlord states that the parking for the Twin Towers, which includes the
Building, is predicated upon 4 spaces per 1,000 square feet of rentable space.
17.07. The Building and the Demised Premises shall be cleaned in
accordance with the Cleaning and Maintenance Schedule set forth on Exhibit D
annexed hereto and made a part hereof.
17.08. Tenant acknowledges that as part of the consideration for
this Lease, and in order not to interfere with the rights of other tenants or
other tenants' quiet enjoyment of the common areas of the Building and otherwise
prevent Landlord from performing its services without causing increases to the
cost of such services, Tenant agrees that it shall not permit its employees to
congregate in hallways or elevators, shall not permit its employees to create an
unsightly condition in or about any passageway from the Building or the common
areas or to the parking lot/deck, with regard to smoking, including the disposal
of cigarettes, in the courtyard and/or outer areas adjacent to the Building and
will otherwise require its employees to act and conduct themselves in the common
areas in such a manner as will not disturb other tenants or the use and
enjoyment by other tenants of the Building.
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ARTICLE 18
ACCESS, CHANGES IN BUILDING FACILITIES, NAME
18.01. All walls, windows, and doors bounding the Demised
Premises (including exterior Building walls, core corridor walls and doors, and
any core corridor entrance), except the inside surfaces thereof, any terraces or
roofs adjacent to the Demised Premises, and any space in or adjacent to the
Demised Premises used for shafts, stacks, pipes, conduits, fan room, ducts,
electric or other utilities, sinks or other Building facilities, and the use
thereof, as well as access thereto through the Demised Premises for the purposes
of operation, maintenance, decoration, and repair are reserved to Landlord.
18.02. Tenant shall permit Landlord to install, use, and
maintain pipes, ducts, and conduits within the demising walls, bearing columns,
and ceilings of the Demised Premises.
18.03. Landlord or Landlord's agent shall have the right upon
request (except in emergency under clause (ii) hereof) to enter and/or pass
through the Demised Premises or any part thereof, at reasonable times during
reasonable hours, (i) to examine the Demised Premises and to show them to the
fee owners, lessors of superior leases, holders of superior mortgages, or
prospective purchasers, mortgagees, or lessees of the Building as an entirety;
and (ii) for the purpose of making such repairs or changes or doing such
repainting in or to the Demised Premises or its facilities, as may be provided
for by this Lease or as may be mutually agreed upon by the parties or as
Landlord may be required to make by law or in order to repair and maintain said
structure or its fixtures or facilities. Landlord shall be allowed to take all
materials into and upon the Demised Premises that may be required for such
repairs, changes, repainting, or maintenance, without liability to Tenant but
Landlord shall not unreasonably interfere with Tenant's use of the Demised
Premises. Landlord shall also have the right to enter on and/or pass through the
Demised Premises, or any part thereof, at such times as such entry shall be
required by circumstances of emergency affecting the Demised Premises or the
Building.
18.04. During the period of six (6) months prior to the
Expiration Date, Landlord may exhibit the Demised Premises to prospective
tenants.
18.05. Landlord reserves the right, at any time after completion
of the Building, without incurring any liability to Tenant therefor, to make
such changes in or to the Building and the fixtures and equipment thereof, as
well as in or to the street entrances, halls, passages, elevators, escalators,
and stairways thereof, as it may deem necessary or desirable, provided, however,
that such changes shall not reduce the size of the Demised Premises.
18.06. Landlord may adopt any name for the Building. Landlord
reserves the right to change the name or address of the Building at any time.
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ARTICLE 19
NOTICE OF ACCIDENTS
19.01. Tenant shall give notice to Landlord, promptly after
Tenant learns thereof, of (i) any accident in or about the Demised Premises for
which Landlord might be liable; (ii) all fires in the Demised Premises; (iii)
all damage to or defects in the Demised Premises, including the fixtures,
equipment, and appurtenances thereof, for the repair of which Landlord might be
responsible; and (iv) all damage to or defects in any parts or appurtenances of
the Building's sanitary, electrical, heating, ventilating, air-conditioning,
elevator, and other systems located in or passing through the Demised Premises
or any part thereof.
ARTICLE 20
NON-LIABILITY AND INDEMNIFICATION
20.01. Neither Landlord nor any agent or employee of Landlord
shall be liable to Tenant for any injury or damage to Tenant or to any other
person or for any damage to, or loss (by theft or otherwise) of, any property of
Tenant or of any other person, irrespective of the cause of such injury, damage,
or loss, unless caused by or due to the negligence or willful misconduct of
Landlord, its agents, or employees without contributory negligence on the part
of Tenant.
20.02. Tenant shall indemnify and save harmless Landlord and its
agents against and from (a) any and all claims (i) arising from (x) the conduct
or management of the Demised Premises or of any business therein, or (y) any
work or thing whatsoever done, or any condition created (other than by Landlord
for Landlord's or Tenant's account) in or about the Demised Premises during the
term of this Lease or during the period of time, if any, prior to the
Commencement Date that Tenant may have been given access to the Demised
Premises, or (ii) arising from any negligent or otherwise wrongful act or
omission of Tenant or any of its subtenants, invitees or licensees or its or
their employees, agents, or contractors, and (b) all costs, expenses, and
liabilities incurred in or in connection with each such claim or action or
proceeding brought thereon. In case any action or proceeding be brought against
Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall
resist and defend such action or proceeding.
20.03. Except as otherwise expressly provided in this Lease,
this Lease and the obligations of Tenant hereunder shall be in no wise affected,
impaired or excused because Landlord is unable to fulfill, or is delayed in
fulfilling, any of its obligations under this Lease by reason of strike, other
labor trouble, governmental pre-emption or priorities or other controls in
connection with a national or other public emergency or shortages of fuel
supplies or labor resulting therefrom, or other like cause beyond Landlord's
reasonable control.
20.04. Landlord shall indemnify and save harmless Tenant and its
agents against and from (a) any and all claims (i) arising from (x) the conduct
or management of the Building by Landlord and/or its agents or (y) any work or
thing whatsoever done, or any condition created
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(other than by Tenant for Landlord's or Tenant's account) in or about the
Building caused by Landlord or its agents during the term of this Lease, or (ii)
arising from any negligent or otherwise wrongful act or omission of Landlord or
any of its employees, agents, or contractors, and (b) all costs, expenses, and
liabilities incurred in or in connection with each such claim or action
described in (a) above or proceeding brought thereon. In the event any action or
proceeding is brought against Tenant, by reason of any such claim, Landlord upon
notice from Tenant, shall resist and defend such action or proceeding.
ARTICLE 21
DESTRUCTION OR DAMAGE
21.01. If the Building or the Demised Premises shall be
partially or totally damaged or destroyed by fire or other cause, then whether
or not the damage or destruction shall have resulted from the fault or neglect
of Tenant, or its employees, agents or visitors (and if this Lease shall not
have been terminated as in this Article hereinafter provided), Landlord shall
repair the damage and restore and rebuild the Building and/or the Demised
Premises, at its expense, with reasonable dispatch after notice to it of the
damage or destruction; provided, however, that Landlord shall not be required to
repair or replace any of the Tenant's Property.
21.02. If the Building or the Demised Premises shall be
partially damaged or partially destroyed by fire or other cause not attributable
to the fault or negligence of Tenant, its agents, or employees, the rents
payable hereunder shall be abated to the extent that the Demised Premises shall
have been rendered untenantable and for the period from the date of such damage
or destruction to the date the damage shall be repaired or restored; provided,
however, if the damage shall be attributable to the fault or negligence of
Tenant, its agents or employees, then rent shall continue but shall be reduced
by any amounts received by Landlord pursuant to Landlord's coverage for business
interruption and/or rent insurance attributable to the Demised Premises. If the
Demised Premises or a major part thereof shall be totally (which shall be deemed
to include substantially totally) damaged or destroyed or rendered completely
(which shall be deemed to include substantially completely) untenantable on
account of fire or other cause, the rents shall abate as of the date of the
damage or destruction and until Landlord shall repair, restore, and rebuild the
Building and the Demised Premises, provided, however, that should Tenant
reoccupy a portion of the Demised Premises during the period of restoration work
is taking place and prior to the date that the same are made completely
tenantable, rents allocable to such portion shall be payable by Tenant from the
date of such occupancy.
21.03. If the Building or the Demised Premises shall be totally
damaged or destroyed by fire or other cause, or if the Building shall be so
damaged or destroyed by fire or other cause (whether or not the Demised Premises
are damaged or destroyed) as to require a reasonably estimated expenditure of
more than twenty-five percent (25%) of the full insurable value of the Building
immediately prior to the casualty then in either such case Landlord may
terminate this Lease by giving Tenant notice to such effect within ninety (90)
days after the date of the casualty. In case of any damage or destruction
mentioned in this Article, Tenant may terminate the Lease by notice to Landlord,
if (i) said damage occurs during the last year of the term or (ii) Landlord has
not completed the making of the required repairs and restored and
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rebuilt the Building and the Demised Premises within six (6) months from the
date of such damage or destruction, or within such period after such date (not
exceeding ten (10) months) as shall equal the aggregate period Landlord may have
been delayed in doing so by adjustment of insurance, labor trouble, governmental
controls, act of God, or any other cause beyond Landlord's reasonable control.
21.04. No damages, compensation, or claim shall be payable by
Landlord for inconvenience, loss of business, or annoyance arising from any
repair or restoration of any portion of the Demised Premises or of the Building
pursuant to this Article. Landlord shall use its best efforts to effect such
repair or restoration promptly and in such manner as not unreasonably to
interfere with Tenant's use and occupancy during such time that Tenant is able
to use the Demised Premises during Landlord's restoration.
21.05. Notwithstanding any of the foregoing provisions of this
Article, if Landlord or the lessor of any superior lease or the holder of any
superior mortgage shall be unable to collect all of the insurance proceeds
(including rent insurance proceeds) applicable to damage or destruction of the
Demised Premises or the Building by fire or other cause, by reason of
negligence or willful misconduct on the part of Tenant or any of its employees,
agents or contractors in connection with the processing of any claim, then,
without prejudice to any other remedies which may be available against Tenant,
there shall be no abatement of Tenant's rents.
21.06. Landlord will not carry insurance of any kind on Tenant's
Property, and, except as provided by law or by reason of its fault or its breach
of any of its obligations hereunder, shall not be obligated to repair any damage
thereto or replace the same; to the extent that Tenant shall maintain insurance
on Tenant's Property, Landlord shall not be obligated to repair any damage
thereto or replace the same.
21.07. The provisions of this Article shall be considered an
express agreement governing any case of damage or destruction of the Demised
Premises by fire or other casualty, and any law of the State of New Jersey
providing for such a contingency in the absence of an express agreement, and any
other law of like import, now of hereafter in force, shall have no application
in such case.
21.08. If the Demised Premises and/or access thereto become
partially or totally damaged or destroyed by any casualty not insured against,
then Landlord shall have the right to terminate this Lease upon giving the
Tenant thirty (30) days notice and upon the expiration of said thirty (30) day
notice period this Lease shall terminate as if such termination date were the
Expiration Date.
ARTICLE 22
EMINENT DOMAIN
22.01. If the whole of the Building shall be lawfully taken by
condemnation or in any other manner for any public or quasi-public use of
purpose, this Lease and the term and estate hereby granted shall forthwith
terminate as of the date of vesting of title on such taking
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(which date is herein after also referred to as the "date of the taking"), and
the rents shall be prorated and adjusted as of such date.
22.02. If any part of the Building shall be so taken, this Lease
shall be unaffected by such taking, except that Tenant may elect to terminate
this Lease in the event of a partial taking, if the area of the Demised Premises
shall not be reasonably sufficient for Tenant to continue feasible operation of
its business. Tenant shall give notice of such election to Landlord not later
than thirty (30) days after the date of such taking. Upon the giving of such
notice to Landlord, this Lease shall terminate on the date of service of notice
and the rents apportioned to the part of the Demised Premises so taken shall be
prorated and adjusted as of the date of the taking and the rents apportioned to
the remainder of the Demised Premises shall be prorated and adjusted as of such
termination date. Upon such partial taking and this Lease continuing in force
as to any part of the Demised Premises, the rents apportioned to the part taken
shall be prorated and adjusted as of the date of taking and from such date the
fixed rent shall be reduced to the amount apportioned to the remainder of the
Demised Premises and additional rent shall be payable pursuant to Article 5
according to the rentable area remaining.
22.03. Except as specifically set forth in Section 22.04.
hereof, Landlord shall be entitled to receive the entire award in any proceeding
with respect to any taking provided for in this Article without deduction
therefrom for any estate vested in Tenant by this Lease, and Tenant shall
receive no part of such award. Tenant hereby expressly assigns to Landlord all
of its right, title, and interest in or to every such award.
22.04. If the temporary use or occupancy of all or any part of
the Demised Premises shall be lawfully taken by condemnation or in any other
manner for any public or quasi-public use or purpose during the term of this
Lease, Tenant shall be entitled, except as hereinafter set forth, to receive any
award which does not serve to diminish Landlord's award in any respect and, if
so awarded, for the taking of Tenant's Property and for moving expenses, and
Landlord shall be entitled to receive that portion which represents
reimbursement for the cost of restoration of the Demised Premises. This Lease
shall be and remain unaffected by such taking and Tenant shall remain
responsible for all of its obligations hereunder insofar as such obligations are
not affected by such taking and shall continue to pay in full the fixed rent and
additional rent when due. If the period of temporary use or occupancy of the
Demised Premises (or a part thereof) shall be divided between Landlord and
Tenant so that Tenant shall receive so much thereof as represents the period
prior to the Expiration Date and Landlord shall receive so much thereof as
represents the period subsequent to the Expiration Date. All moneys received by
Tenant as, or as part of, an award for temporary use and occupancy for a period
beyond the date to which the rents hereunder have been paid by Tenant shall be
received, held, and applied by Tenant as a trust fund for payment of the rents
falling due hereunder.
22.05. In the event of any taking of less than the whole of the
Building which does not result in a termination of this Lease, or in the event
of a taking for a temporary use or occupancy of all or any part of the Demised
Premises which does not extend beyond the Expiration Date, Landlord, at its
expense, shall proceed with reasonable diligence to repair, alter, and restore
the remaining parts of the Building and the Demised Premises to substantially
their former condition to the extent that the same may be feasible and so as to
constitute a complete
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and tenantable Building and Demised Premises provided that Landlord's liability
under this Section 22.05 shall be limited to the net amount (after deducting all
costs and expenses, including, but not limited to, legal expenses incurred in
connection with the eminent domain proceeding) received by Landlord as an award
arising out of such taking. If such taking occurs within the last three (3)
years of the term of this Lease, Landlord shall have the right to terminate this
Lease by giving the Tenant written notice to such effect within ninety (90) days
after such taking, and this Lease shall then expire on that effective date
stated in the notice as if that were the Expiration Date, but the fixed rent and
the additional rent shall be prorated and adjusted as of the date of such
taking.
22.06. Should any part of the Demised Premises be taken to
effect compliance with any law or requirement of public authority other than in
the manner hereinabove provided in this Article then, (i) if such compliance is
the obligation of Tenant under this Lease, Tenant shall not be entitled to any
diminution or abatement of rent or other compensation from Landlord therefor,
but (ii) if such compliance is the obligation of Landlord under this Lease, the
fixed rent hereunder shall be reduced and additional rents under Article 5 shall
be adjusted in the same manner as is provided in Section 22.02 according to the
reduction in rentable area of the Demised Premises resulting from such taking.
22.07. Any dispute which may arise between the parties with
respect to the meaning or application of any of the provisions of this Article
shall be determined by arbitration in the manner provided in Article 33.
ARTICLE 23
SURRENDER
23.01. On the last day of the term of this Lease, or upon any
earlier termination of this Lease, or upon any re-entry by Landlord upon the
Demised Premises, Tenant shall quit and surrender the Demised Premises to
Landlord in good order, condition, and repair, except for ordinary wear and tear
and such damage or destructions as Landlord is required to repair or restore
under this Lease, and Tenant shall remove all of Tenant's Property therefrom
except as otherwise expressly provided in this Lease. Landlord reserves the
right to require Tenant to remove all items installed by, for or on behalf of
Tenant in excess of the Building standard items ("Landlord's Work"). After
review and completion of the final construction drawings, Landlord reserves the
right to notify Tenant of any restoration Tenant shall be responsible for upon
the termination of this Lease. Landlord shall so notify Tenant prior to the
performance of Landlord's Work. If Landlord fails to so notify Tenant, no such
restoration shall be required. If Tenant fails to perform any restoration
required of it under this Lease on or before the last day of the term of this
Lease or upon any earlier termination, Tenant shall be deemed a hold-over Tenant
under Article 40 of this Lease until such time as Tenant has completed such
restoration.
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ARTICLE 24
CONDITIONS OF LIMITATION
24.01. This Lease and the term and estate hereby granted are
subject to the limitation that whenever Tenant shall make an assignment of the
property of Tenant for the benefit of creditors, or shall file a voluntary
petition under any bankruptcy or insolvency law, or an involuntary petition
alleging an act of bankruptcy or insolvency shall be filed against Tenant under
any bankruptcy or insolvency law, or whenever a petition shall be filed by or
against Tenant under the reorganization provisions of the United States
Bankruptcy Act or under the provisions of any law of like imports or whenever a
petition shall be filed by Tenant under the arrangement provisions of any law of
like import, whenever a permanent receiver of Tenant or of or for the property
of Tenant shall be appointed, then Landlord, (a) at any time of receipt of
notice of the occurrence of any such event, or (b) if such event occurs without
the acquiescence of Tenant, at any time after the event continues for sixty
(60) days, Landlord may give Tenant a notice of intention to end the term of
this Lease at the expiration of five (5) days from the date of service of such
notice of intention, and upon the expiration of said five (5) day period this
Lease and the term and estate hereby granted, whether or not the term shall
theretofore have commenced, shall terminate with the same effect as if that day
were the Expiration Date, but Tenant shall remain liable for damages as provided
in Article 26.
24.02. This Lease and the term and estate hereby granted are
subject to the further limitation that:
(a) Whenever Tenant shall default in the payment of installment of
fixed rent, or in the payment of any additional rent or any other charge payable
by Tenant to Landlord, or any day upon which the same ought to be paid, and such
default shall continue for five (5) days after written notice thereof; or
(b) Whenever Tenant shall do or permit anything to be done, whether
by action or inaction, contrary to any of Tenant's obligations hereunder, and if
such situation shall continue and shall not be remedied by Tenant within thirty
(30) days after Landlord shall have given to Tenant a written notice specifying
the same, or, in the case of a happening or default which cannot with due
diligence be cured within a period of thirty (30) days and the continuance of
which for the period required for cure will not subject Landlord to risk of
criminal liability or termination of any superior Lease or foreclosure of any
superior mortgage if Tenant shall not, (i) within said thirty (30) day period
advise Landlord of Tenant's intention to duly institute all steps necessary to
remedy such situation; (ii) duly institute within said thirty (30) day period,
and thereafter diligently prosecute to completion all steps necessary to remedy
the same; (iii) complete such remedy within such time after the date of giving
of said notice to Landlord as shall reasonably be necessary; or
(c) Whenever any event shall occur or any contingency shall arise
whereby this Lease or the estate hereby granted or the unexpired balance of the
term hereof
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would, by operation of law or otherwise, devolve upon or pass to any person,
firm, or corporation other than Tenant, except as expressly permitted by Article
8; or
(d) Whenever Tenant shall abandon the Demised Premises (unless as a
result of a casualty), or
(e) If Tenant shall default in the timely payment of rent or
additional rent and any such default shall continue to be repeated for two (2)
consecutive months or for a total of four (4) months in any period of twelve
(12) months, or more than three (3) times in any six (6) month period, then,
notwithstanding that such defaults shall have each been cured within the
applicable period, any similar default shall be deemed to be deliberate and
Landlord may thereafter serve a notice of termination upon Tenant without
affording to Tenant opportunity to cure such default;
then, and in any of the foregoing cases, this Lease and the term and estate
hereby granted, whether or not the term shall theretofore have commenced, shall,
if the Landlord so elects, terminate upon ten (10) days written notice by
Landlord to Tenant of Landlord's election to terminate the Lease and the term
hereof shall expire and come end on the date fixed in such notice, with the same
effect as if that day were the Expiration Date, but Tenant shall remain liable
for the rent and additional rent which subsequently accrues and for damages as
provided in Article 26.
ARTICLE 25
RE-ENTRY BY LANDLORD
25.01. If Tenant shall default in the payment of any installment
of fixed rent, or of any installment of additional rent, on any date upon which
the same ought to be paid and if such default shall continue for five (5) days
after written notice thereof, or if this Lease shall expire as provided in
Article 24, Landlord or Landlord's agents and employees may immediately or at
any time thereafter re-enter the Demised Premises, or any part thereof, in the
name of the whole, either by summary dispossess proceedings or by any suitable
action or proceeding at law, or by force or otherwise, without being liable to
indictment, prosecution or damages therefor, and may repossess the same, and may
remove any persons therefrom, to the end that Landlord may have, hold, and enjoy
the Demised Premises again as and of its first estate and interest therein. The
word "re-enter", as herein used, is not restricted to its technical legal
meaning. In the event of any termination of this Lease under the provisions of
Article 24 or if Landlord shall re-enter the Demised Premises under the
provisions of this Article or in the event of the termination of this Lease, or
of re-entry, by or under any summary dispossess or other proceeding or action or
any provision of law by reason of default hereunder on the part of Tenant,
Tenant shall thereupon pay to Landlord the fixed rent and additional rent
payable by Tenant to Landlord up to the time of such termination of this Lease,
or of such recovery of possession or the Demised Premises by Landlord, as the
case may be, and shall also pay to Landlord damages as provided in Article 26.
25.02. In the event of a breach or threatened breach by Landlord
or Tenant of any of their respective obligations under this Lease, either
Landlord or Tenant, as the case may
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be, shall also have the right of injunction. The special remedies hereunder are
cumulative and are not intended to be exclusive of any other remedies or means
of redress to which the parties may lawfully be entitled at any time.
25.03. If this Lease shall terminate under the provisions of
Article 24, or if Landlord shall re-enter the Demised Premises under the
provisions of this Article, or in the event of any termination of this Lease, or
of re-entry, by or under any summary dispossess or other proceeding or action or
any provision of law by reason of default hereunder on the part of Tenant,
Landlord shall be entitled to retain all moneys, if any, paid by Tenant to
Landlord, whether as advance rent, security, or otherwise, but such moneys shall
be credited by Landlord against any fixed rent or additional rent due from
Tenant at the time of such termination or re-entry or, at Landlord's option,
against any damages payable by Tenant under Article 26 or pursuant to law.
ARTICLE 26
DAMAGES
26.01. If this Lease is terminated under the provisions of
Article 24, or if Landlord shall re-enter the Demised Premises under the
provisions of Article 25, or in the event of the termination of this Lease, or
of re-entry, by or under any summary dispossess or other proceeding or action of
any provision of law by reason of default hereunder on the part of Tenant,
Tenant shall pay to Landlord as damages, at the election of Landlord, either
(a) A sum which at the time of such termination of this Lease or at
the time of any such re-entry by Landlord, as the case may be, represents the
then value of the excess, if any, of (i) the aggregate of the fixed rent and the
additional rent payable hereunder which would have been payable by Tenant
(conclusively presuming the additional rent to be the same as was payable for
the year immediately preceding such termination) for the period commencing with
such earlier termination of this Lease or the date of any such re-entry, as the
case may be, and ending with the Expiration Date, had this Lease not so
terminated or had Landlord not so re-entered the Demised Premises, over (ii) the
aggregate rental value of the Demised Premises for the same period, or
(b) Sums equal to the fixed rent and the additional rent (as above
presumed) payable hereunder which would have been payable by Tenant had this
Lease not so terminated, or had Landlord not so re-entered the Demised Premises,
payable upon the due dates therefor specified herein following such termination
or such re-entry and until the Expiration Date, provided, however, that if
Landlord shall relet the Demised Premises during said period, Landlord shall
credit Tenant with the net rents received by Landlord from such reletting, such
net rents to be determined by first deducting from the gross rents as and when
received by Landlord from such reletting, the expenses incurred or paid by
Landlord in terminating this Lease or in re-entering the Demised Premises and in
securing possession thereof, as well as the expenses of reletting, including
altering and preparing the Demised Premises for new tenants, brokers'
commissions, and all other expenses properly chargeable against the Demised
Premises and the rental therefrom; it being understood that any such reletting
may be for a period shorter or longer than the remaining term of this Lease; but
in no event shall Tenant be entitled to receive any
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excess of such net rents over the sums payable by Tenant to Landlord hereunder,
nor shall Tenant be entitled in any suit for the collection of damages pursuant
to this Subsection to a credit in respect of any net rents from a reletting,
except to the extent that such net rents are actually received by Landlord. If
the Demised Premises or any part thereof should be relet in combination with
other space, then proper apportionment on a square foot basis shall be made of
the rent received from such reletting and of the expenses of reletting.
If the Demised Premises or any part thereof to be relet by Landlord
for the unexpired portion of the term of this Lease, or any part thereof, before
presentation of proof of such damages to any court, commission or tribunal, the
amount of rent reserved upon such reletting shall, prima facie, be the fair and
reasonable rental value for the Demised Premises, or part thereof, so relet
during the term of the reletting.
26.02. Suit or suits for the recovery of such damages, or any
installments thereof, may be brought by Landlord from time to time at its
election, and nothing contained herein shall be deemed to require Landlord to
postpone suit until the date when the term of this Lease would have expired if
it had not been so terminated under the provisions of Article 24, or under any
provision of law, or had Landlord not re-entered the Demised Premises. Nothing
herein contained shall be construed to limit or preclude recovery by Landlord
against Tenant of any sums or damages to which, in addition to the damages
particularly provided above, Landlord may lawfully be entitled by reason of any
default hereunder on the part of Tenant. Nothing herein contained shall be
construed to limit or prejudice the right of Landlord to seek and obtain as
liquidated damages by reason of the termination of this Lease or re-entry on the
Demised Premises for the default of Tenant under this Lease, an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved whether or
not such amount be greater, equal to, or less than any of the sums referred to
in Section 26.01.
26.03. In addition to the foregoing and without regard to
whether this Lease is terminated and provided Landlord shall be the prevailing
party, Tenant shall pay to Landlord upon demand, all costs and expenses incurred
by Landlord, including reasonable attorney's fees, with respect to any lawsuit
instituted or defended or any action taken by Landlord to enforce all or any of
the provisions of this Lease.
ARTICLE 27
WAIVERS
27.01. Tenant, for Tenant, and on behalf of any and all persons
claiming through or under Tenant, including creditors of all kinds, does hereby
waive and surrender all right and privilege which they or any of them might have
under or by reason of any present or future law, to redeem the Demised Premises
or to have a continuance of this Lease for the term hereby demised after being
dispossessed or ejected therefrom by process of law or under the terms of this
Lease or after the termination of this Lease as herein provided.
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27.02. In the event that Tenant is in arrears in payment of
fixed rent or additional rent hereunder, Tenant waives Tenant's right, if any,
to designate the items against which any payments made by Tenant are to be
credited, and Tenant agrees that Landlord may apply any payments made by Tenant
to any items it sees fit, irrespective of and notwithstanding any designation or
request by Tenant as to the items against which any such payments shall be
credited.
27.03 The provisions in Articles 16 and l7 shall be considered
express agreements governing the services to be furnished by Landlord, and
Tenant agrees that any laws and/or requirements of public authorities, now or
hereafter in force, shall have no application in connection with any enlargement
of Landlord's obligations with respect to such services.
ARTICLE 28
NO OTHER WAIVERS OR MODIFICATIONS
28.01. The failure of either party to insist in any one or more
instances upon the strict performance of any one or more of the obligations of
this Lease, or to exercise any election herein contained, shall not be construed
as a waiver or relinquishment for the future of the performance of such one or
more obligations of this Lease or of the right to exercise such election, but
the same shall continue and remain in full force and effect with respect to any
subsequent breach, act, or omission. No executory agreement hereafter made
between Landlord and Tenant shall be effective to change, modify, waive,
release, discharge, terminate or effect an abandonment of this Lease, in whole
or in part, unless such executory agreement is in writing, refers expressly to
this Lease and is signed by the party against whom enforcement of the change,
modification, waiver, release, discharge, or termination of effectuation of the
abandonment is sought.
28.02. Without limiting Section 28.01, the following provisions
shall also apply:
(a) No agreement to accept a surrender of all or any part of the
Demised Premises shall be valid unless in writing and signed by Landlord. The
delivery of keys to an employee of Landlord or of its agent shall not operate as
a termination of this Lease or a surrender of the Demised Premises. If Tenant
shall at any time request Landlord to sublet the Demised Premises for Tenant's
account, Landlord or its agent is authorized to receive said keys for such
purposes without releasing Tenant from any of its obligations under this Lease,
and Tenant hereby releases Landlord from any liability for loss or damage to any
of Tenant's property in connection with such subletting.
(b) The receipt by Landlord of rent with knowledge of breach of any
obligation of this Lease shall not be deemed a waiver of such breach.
(c) No payment by Tenant or receipt by Landlord of a lesser amount
than the correct fixed rent or additional rent due hereunder shall be deemed to
be other than a
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payment on account, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance or pursue any other remedy in this Lease or at law
provided.
ARTICLE 29
CURING TENANT'S DEFAULTS
29.01. If Tenant shall default in the performance of any of
Tenant's obligations under this Lease, Landlord, without thereby waiving such
default, may (but shall not be obligated to) perform the same for the account
and at the expense of Tenant, without notice, in a case of emergency, and in any
other case, only if such default continues after the expiration of (i) ten (10)
days from the date Landlord gives Tenant notice of intention so to do, or (ii)
the applicable grace period provided in Section 24.02 or elsewhere in this Lease
for cure of such default, whichever occurs later.
29.02. Bills, invoices and purchase orders for any and all
costs, charges, and expenses incurred by Landlord in connection with any such
performance by it for the account of Tenant, including reasonable counsel fees,
involved in collecting or endeavoring to collect the fixed rent or additional
rent or any part thereof, or enforcing or endeavoring to enforce any rights
against Tenant, under or in connection with this Lease, or pursuant to law,
including any such cost, expense, and disbursement involved in instituting and
prosecuting summary proceedings, may be sent by Landlord to Tenant monthly, or
immediately, at Landlord's option, and, shall be due and payable in accordance
with the terms of such bills.
ARTICLE 30
BROKER
30.01. Landlord and Tenant mutually covenant, warrant, and
represent to each other that there was no broker except JACOBSON, GOLDFARB &
TANZMAN ASSOCIATES, ("Broker") instrumental in consummating this Lease and that
no conversations or negotiations were had with any broker except Broker
concerning the renting of the Demised Premises. Landlord and Tenant mutually
agree to hold each other harmless against any claims for a brokerage commission
arising out of any conversations or negotiations had by one party with any
broker except Broker contrary to its representation herein contained. Landlord
agrees to pay Broker pursuant to a separate agreement.
ARTICLE 31
NOTICES
31.01. Any notice, statement, demand, or other communications
required or permitted to be given, rendered, or made by either party to the
other, pursuant to this Lease or pursuant to any applicable law or requirement
of public authority, shall be in writing (whether or
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not so stated elsewhere in this Lease) and shall be deemed to have been properly
given, rendered or made, if sent by registered or certified mail, return receipt
requested, addressed to the other party or delivered by a nationally recognized
courier at the address hereinabove set forth (except that after the Commencement
Date, Tenant's address, unless Tenant shall give notice to the contrary, shall
be the Building) and shall be deemed to have been given, rendered, or made on
the date following the date of mailing. Either party may, by notice as
aforesaid, designate a different address or addresses for notices, statements,
demands, or other communications intended for it. In the event of the cessation
of any mail delivery for any reason, personal delivery shall be substituted for
the aforedescribed method of serving notices.
ARTICLE 32
ESTOPPEL CERTIFICATE
32.01. Tenant agrees, when requested by Landlord, to execute and
deliver to Landlord a statement certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), certifying the
dates to which the fixed rent and additional rent have been paid, whether any
dispute exists with respect thereto and stating whether or not, to Tenant's best
knowledge, Landlord is in default in performance of any of its obligations under
this Lease, and, if so, specifying each such default of which Tenant may have
knowledge, it being intended that any such statement delivered pursuant hereto
may be relied upon by others. Such statement shall be served upon Landlord by
Tenant within ten (10) days of Landlord's request. If Tenant fails to deliver
such notice, Landlord shall be deemed appointed as Tenant's attorney-in-fact to
prepare and deliver such-notice on behalf of Tenant, and Tenant shall be deemed
bound thereby upon Landlord's furnishing a copy of the notice to Tenant.
ARTICLE 33
ARBITRATION
33.01. The parties hereto shall not be deemed to have agreed to
determination of any dispute arising out of this Lease by arbitration unless
determination in such manner shall have been specifically provided for in this
Lease.
33.02. The party desiring arbitration shall give notice to that
effect to the other party and shall in such notice appoint a person as
arbitrator on its behalf. Within ten (10) days, the other party by notice to
the original party shall appoint a second person as arbitrator on its behalf.
The arbitrators thus appointed shall appoint a third person, and such three
arbitrators shall as promptly as possible determine such matter, provided,
however that:
(a) If the second arbitrator shall not have been appointed as
aforesaid, the first arbitrator shall proceed to determine such matter; and
(b) If the two arbitrators appointed by the parties shall be unable
to agree, within ten (10) days after the appointment
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of the second arbitrator, upon the appointment of a third arbitrator, they shall
give written notice to the parties of such failure to agree, and, if the parties
fail to agree upon the selection of such third arbitrator within ten (10) days
after the arbitrators appointed by the parties give notice as aforesaid, then
within five (5) days thereafter either of the parties upon notice to the other
party may request such appointment by the American Arbitration Association (or
any organization successor thereto), or in it absence, refusal, failure, or
inability to act, may apply for a court appointment of such arbitrator.
33.03. Each arbitrator shall be a fit and impartial person who
shall have had at least five years' experience in a calling connected with the
matter of dispute.
33.04. The arbitration shall be conducted, to the extent
consistent with this Article, in accordance with the then prevailing rules of
the American Arbitration Association (or any organization successor thereto).
The arbitrators shall render their decision and award, upon the concurrence of
at least two of their number, within thirty (30) days after the appointment of
the third arbitrator. Such decision and award shall be in writing and shall be
final and conclusive on the parties, and counterpart copies thereof shall be
delivered to each of the parties. In rendering such decision and award, the
arbitrators shall not add to, subtract from, or otherwise modify the provisions
of this Lease. Judgment may be had on the decision and award of the
arbitrator(s) so rendered in any court of competent jurisdiction.
33.05. Each party shall pay the fees and expenses of the one of
the two original arbitrators appointed by or for such party and the fees and
expenses of the third arbitrator and all other expenses of the arbitration
(other than the fees and disbursement of attorneys or witnesses for each party)
shall be borne by the parties equally.
33.06. Notwithstanding the provisions of this Article, if any
delay in complying with any requirements of this Lease by Tenant might subject
Landlord to any fine or penalty, or to prosecution for a crime, or if it would
constitute a default by Landlord under any mortgage, Landlord may exercise its
right under Article 29, to remedy such default and in such event the sole
question to be determined by the arbitrators under this Article, shall be
whether Tenant is liable for Landlord's cost and expenses of curing such
default.
ARTICLE 34
NO OTHER REPRESENTATIONS, CONSTRUCTION, GOVERNING LAW
34.01. Tenant expressly acknowledges and agrees that Landlord
has not made and is not making, and Tenant, in executing and delivering this
Lease, is not relying upon, any warranties, representations, promises or
statements, except to the extent that the same are expressly set forth in this
Lease. It is understood and agreed that all understandings and agreements
heretofore had between the parties are merged in the Lease, which alone fully
and completely express their agreements and that the same are entered into after
full investigation, neither party relying upon any statement or representation
not embodied in the Lease made by the other.
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34.02. If any of the provisions of this Lease, or the
application thereof to any person or circumstances, shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable, shall not be affected
thereby, and every provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
34.03. This Lease shall be governed in all respects by the laws
of the State of New Jersey.
ARTICLE 35
SECURITY
35.01. Tenant shall deposit with Landlord the sum of $13,312.50
upon the execution of this Lease. Said deposit (sometimes referred to as the
"Security Deposit") shall be held by Landlord as security for the faithful
performance by Tenant of all the terms of the Lease by said Tenant to be
observed and performed. The Security Deposit shall not and may not be mortgaged,
assigned, transferred, or encumbered by Tenant, without the written consent of
Landlord, and any such act on the part of Tenant shall be without force and
effect and shall not be binding upon Landlord. If any of the fixed or additional
rent herein reserved or any other sum payable by Tenant to Landlord shall be
overdue and unpaid, or if Landlord makes payment on behalf of Tenant, or if
Tenant shall fail to perform any of the terms, covenants, and conditions of the
Lease, then Landlord may, at its option and without prejudice to any other
remedy which Landlord may have on account thereof, appropriate and apply the
entire Security Deposit or so much thereof as may be necessary to compensate
Landlord toward the payment of fixed or additional rent and any loss or damage
sustained by Landlord due to such breach on the part of Tenant, plus expenses;
and Tenant shall forthwith upon demand restore the Security Deposit to the
original sum deposited. The issuance of a warrant and/or the re-entering of the
Demised Premises by Landlord for any default on the part of Tenant or for any
other reason prior to the expiration of the term shall not be deemed such a
termination of the Lease as to entitle Tenant to the recovery of the Security
Deposit. If Tenant complies with all of the terms, covenants, and conditions of
the Lease and pays all of the fixed and additional rent and all other sums
payable by Tenant to Landlord as they fall due, the Security Deposit shall be
promptly returned in full to Tenant after the expiration of the term of the
Lease and Tenant's satisfaction of all its obligations accruing prior to the
Lease expiration date. In the event of bankruptcy or other creditor-debtor
proceedings against Tenant, the Security Deposit and all other securities shall
be deemed to be applied first to the payment of fixed and additional rent and
other charges due Landlord for all periods prior to the filing of such
proceedings. In the event of sale by Landlord of the Building, Landlord may
deliver the then balance of the Security Deposit to the transferee of Landlord's
interest in the Demised Premises and Landlord shall thereupon be discharged from
any further liability with respect to the Security Deposit and this provision
shall also apply to any subsequent transferees. No holder of a superior
mortgage or a lessor's interest in a superior lease to which the Lease is
subordinate shall be responsible in connection with the Security Deposit, by way
of credit or payment of any fixed or additional rent, or otherwise, unless such
mortgagee or lessor actually shall have received the entire Security Deposit.
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ARTICLE 36
PARTIES BOUND
36.01. The obligation of this Lease shall bind and benefit the
successors and assigns of the parties with the same effect as if mentioned in
each instance where a party is named or referred to, except that no violation of
the provisions of Article 8 shall operate to vest any rights in any successor or
assignee of Tenant and that the provisions of this Article shall not be
construed as modifying the conditions of limitation contained in Article 24.
However, the obligations of Landlord under this Lease shall not be binding upon
Landlord herein named with respect to any period subsequent to the transfer of
its interest in the Building as owner or lessee thereof and in event of such
transfer said obligations shall thereafter be binding upon each transferee of
the interest of Landlord herein named as such owner or lessee of the Building,
but only with respect to the period ending with a subsequent transfer within the
meaning of this Article.
36.02. If Landlord shall be an individual, joint venture,
tenancy in common, partnership, unincorporated association, or other
unincorporated aggregate of individuals and/or entities or a corporation, Tenant
shall look only to such Landlord's estate and property in the Building (or the
proceeds thereof) and, where expressly so provided in this Lease, to offset
against the rents payable under this Lease for the collection of a judgment (or
other judicial process) which requires the payment of money by Landlord in the
event of any default by Landlord hereunder. No other property or assets of such
Landlord shall be subject to levy, execution or other enforcement procedure for
the satisfaction of Tenant's remedies under or with respect to this Lease, the
relationship of Landlord and Tenant hereunder or Tenant's use or occupancy of
the Demised Premises. Further, Tenant agrees that Landlord shall not be liable
to Tenant for any special, indirect, or consequential damages arising out of
Landlord's breach of this Lease.
ARTICLE 37
CONSENTS
37.01. Wherever it is specifically provided in this Lease that a
party's consent is not to be unreasonably withheld, a response to a request for
such consent shall also not be unreasonably delayed. If either Landlord or
Tenant considers that the other had unreasonably withheld or delayed a consent,
it shall so notify the other party within ten (10) days after receipt of notice
of denial of the requested consent or, in case notice of denial is not received,
within twenty (20) days after making its request for the consent.
37.02. Tenant hereby waives any claim against Landlord which it
may have based upon any assertion that Landlord has unreasonably withheld or
unreasonably delayed any such consent, and Tenant agrees that its sole remedy
shall be an action or proceeding to enforce any such provision or for specific
performance, injunction or declaratory judgment. In the event of such
determination, the requested consent shall be deemed to have been granted,
however, Landlord shall have no liability to Tenant for its refusal or failure
to give such consent. The sole
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remedy for Landlord's unreasonably withholding or delaying of consent shall be
as provided in this Article.
ARTICLE 38
MORTGAGE FINANCING - TENANT COOPERATION
38.01. In the event that Landlord desires to seek mortgage
financing secured by the Demised Premises, Tenant agrees to cooperate with
Landlord in the making of any application(s) by Landlord for such financing
including the delivery to Landlord's mortgage broker or mortgagee, of such
information as they shall require with respect to Tenant's occupancy of the
Demised Premises, including, but not limited to the current financial statement
of Tenant, but Tenant shall not be required to deliver such information directly
to Landlord, all of the above to be at no cost and expense of Tenant. In the
event that Landlord's mortgagee shall request changes to the within Lease in
order to make same acceptable to Landlord's mortgagee, Tenant agrees to consent
to such changes, provided such changes shall not affect the term of this Lease
nor the financial obligations of Tenant hereunder.
ARTICLE 39
ENVIRONMENTAL COMPLIANCE
39.01. Tenant shall, at Tenant's sole cost and expense, comply
with the New Jersey Industrial Site Recovery Act and the regulations promulgated
thereunder (referred to as "ISRA") as same relate to Tenant's occupancy of the
Demised Premises, as well as all other state, federal or local environmental
law, ordinance, rule, or regulation either in existence as of the date hereof or
enacted or promulgated after the date of this Lease, that concern the
management, control, discharge, treatment and/or removal of hazardous discharges
or otherwise affecting or affected by Tenant's use and occupancy of the Demised
Premises. Tenant represents that Tenant's SIC number is 8731, and does not
subject it to ISRA. Tenant shall, at Tenant's own expense, make all submissions
to, provide all information to, and comply with all requirements of the Bureau
of Industrial Site Evaluation (the "Bureau") of the New Jersey Department of
Environmental Protection ("NJDEP"). Should the Bureau or any other division of
NJDEP, pursuant to any other environmental law, rule, or regulation, determine
that a cleanup plan be prepared and that a cleanup be undertaken because of any
spills or discharge of hazardous substances or wastes at the Demised Premises
which occur during the term of this Lease and were caused by Tenant or its
agents or contractors, then Tenant shall, at Tenant's own expense prepare and
submit the required plans and financial assurances, and carry out the approved
plans. In the event that Landlord shall have to comply with ISRA by reason of
Landlord's actions, Tenant shall promptly provide all information requested by
Landlord for preparation of non-applicability affidavits or a Negative
Declaration and shall promptly sign such affidavits when requested by Landlord.
Tenant shall indemnify, defend, and save harmless Landlord from all fines,
suits, procedures, claims, and actions of any kind arising out of or in any way
connected with any spills or discharges of hazardous substances or wastes at the
Demised Premises which occur during the term of this Lease and were caused by
Tenant or its agents or contractors, and from all fines, suits, procedures,
claims, and actions of any kind arising out of Tenant's failure to
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provide all information, make all submission and take all actions required by
the Bureau or any other division of NJDEP. Tenant's obligations and liabilities
under this Paragraph shall continue so long as Landlord remains responsible for
any spills or discharges of hazardous substances or wastes at the Demised
Premises which occur during the term of this Lease and were caused by Tenant or
its agents or contractors. Tenant's failure to abide by the terms of this
paragraph shall be restrainable by injunction. Tenant shall have no
responsibility to obtain a "Negative Declaration" or "Letter of Non-
Applicability" from the NJDEP if the sole reason for obtaining same is in
connection with a sale or other disposition of the real estate by Landlord but
Tenant agrees to cooperate with Landlord in Landlord's effort to obtain same and
shall perform at Tenant's expense any clean up required by reason of Tenant's
use and occupancy of the Demised Premises.
ARTICLE 40
HOLDING OVER
40.01. Tenant will have no right to remain in possession of all
or part of the Demised Premises after the expiration of the term. If Tenant
remains in possession of all or any part of the Demised Premises after the
expiration of the Lease, without the express consent of Landlord: (a) such
tenancy will be deemed to be a periodic tenancy from month-to-month only; (b)
such tenancy will not constitute a renewal or extension of this Lease for any
further term; and (c) such tenancy may be terminated by Landlord upon the
earlier of (i) thirty (30) days prior written notice, or (ii) the earliest date
permitted by law. In such event, monthly rent will be increased to an amount
equal to one hundred and fifty percent (150%) during the first holdover month,
one hundred and seventy five percent (175%) during the second holdover month,
and thereafter, two hundred percent (200%) of the monthly rent payable during
the last month of the term, and any other sums due under this Lease will be
payable in the amount and at the times specified in this Lease. Such month-to-
month tenancy will be subject to every other term, condition, and covenant
contained in this Lease. The provisions of this Section shall not be construed
to relieve Tenant from liability to Landlord for damages resulting from any such
holding over, or preclude Landlord from implementing summary dispossess
proceedings. Tenant further acknowledges that its failure to perform any
restoration required of it under this Lease shall be deemed the same as its
remaining in possession of the Demised Premises after the expiration of the
term, subjecting it to hold-over rent in accordance with this Article 40.
ARTICLE 41
CERTAIN DEFINITIONS AND CONSTRUCTIONS
41.01. For the purpose of this Lease and all agreements
supplemental to this Lease, unless the context otherwise requires, the
definitions set forth in Exhibit F annexed hereto shall be utilized.
41.02. The various terms which are italicized and defined in
other Articles of this Lease or are defined in Exhibits annexed hereto, shall
have the meanings specified in such
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other Articles and such Exhibits for all purposes of this Lease and all
agreements supplemental thereto, unless the context shall otherwise require.
41.03. The submission of this Lease for examination does not
constitute a reservation of, or option for, the Demised Premises, and this Lease
becomes effective as a Lease only upon execution and delivery thereof by
Landlord and Tenant.
41.04. The Article headings in this Lease and the Index prefixed
to this Lease are inserted only as a matter of convenience in reference and are
not to be given any effect whatsoever in construing this Lease.
ARTICLE 42
RELOCATION OF TENANT
42.01. Landlord at its sole expense, on at least ninety (90)
days prior written notice, may require Tenant to move from the Demised Premises
to another location of comparable size and decor in the Building or in the
building(s) commonly known and designated as 399 Thornall Street or 499 Thornall
Street, Edison, New Jersey in order to permit Landlord to consolidate the
Demised Premises with other space in the Building for future occupancy
(provided, however, that in event of receipt of any such notice, Tenant by
written notice to Landlord may elect not to move to the other space and in lieu
thereof may terminate this Lease). In the event of any such relocation,
Landlord shall be responsible for the expenses of moving, preparing and
decorating the relocated premises so that they will be substantially similar to
the Demised Premises including without limitation relocation of telephone and
computer lines. Notwithstanding the foregoing, Landlord shall be entitled to
rescind its notice of relocation within forty-five (45) days of its having
forwarded to Tenant the notice of relocation or within forty-eight (48) hours of
Tenant having properly elected to terminate this Lease. In the event Landlord
rescinds the notice as aforesaid, this Lease shall continue in full force and
effect.
ARTICLE 43
OPTION TO RENEW
43.01. Provided that Tenant is not then in default of the terms,
covenants, and provisions of this Lease, Landlord hereby grants to Tenant the
right to renew the term of this Lease for one (1) additional period of five (5)
years (the "Renewal Period") commencing on the day after the initial Expiration
Date upon the same terms and conditions as set forth in this Lease other than
the fixed annual rental which shall be the Fair Market Rental of the Demised
Premises at the time of the commencement of the Renewal Period, adjusting as
necessary for the lapse of time between the date of Tenant's notification of
intent to exercise its option to renew and the date on which the Renewal Period
is scheduled to commence but in no event shall be less than the fixed rent
during the initial term. Said fixed annual rental shall be payable in equal
monthly installments in advance on the first day of each and every month of the
Renewal Period. The base year for calculation of additional rent for increase
in taxes and operating expenses for the Renewal Period shall be as initially
established in this Lease. Tenant shall exercise the within
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Option by giving written notice to Landlord not later than nine (9) months prior
to the initial Expiration Date, TIME BEING OF THE ESSENCE. If Tenant fails to
give such notice, Tenant will be deemed to have waived such Renewal Option and
the provisions of this Section shall be null and void. Fair Market Value shall
mean the rents obtainable for comparable space in the Metro Park (Edison), New
Jersey market area.
ARTICLE 44
CANCELLATION OPTION
44.01. Tenant shall have a one-time cancellation option whereby
it shall have the option to cancel the Lease effective on a date earlier than
the expiration date described in Article 1 (which earlier date shall hereinafter
be referred to as the "Cancellation Termination Date"). If Tenant satisfies
and/or meets the requirements of this Section 44.01, Tenant's Cancellation
Termination Date shall be thirty six (36) months after the Commencement Date.
To exercise its option to cancel, Tenant shall satisfy and/or meet the following
requirements:
(a) Tenant shall serve Landlord with written notice of its intent to
cancel no later than nine (9) months before the Cancellation Termination Date;
(b) At the time it serves its written notice of its intent to cancel,
Tenant shall pay to Landlord the sum equivalent to one year's fixed and
additional rent representing additional compensation to Landlord for the
cancellation option.
Tenant further agrees that in addition to the foregoing, Tenant shall
remain liable to satisfy all of its restoration obligations under the Lease on
or before the Cancellation Termination Date.
Notwithstanding Tenant's satisfaction of the foregoing, from and after
the date it serves its written notice of its intent to cancel and continuing
through the Cancellation Termination Date, Tenant shall remain liable to meet
all its obligations under the Lease, including its ongoing requirement of paying
fixed and additional rent to and through the Cancellation Termination Date. If
Tenant shall be in default of its obligations under the Lease after it serves
its written notice of its intent to cancel, then Tenant shall be deemed to have
waived its exercise of the cancellation option and the Lease shall continue to
and through the expiration date otherwise provided in Article 1 of the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease
as
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<PAGE>
of the day and year first above written.
WITNESS: LANDLORD:
METRO FOUR ASSOCIATES
LIMITED PARTNERSHIP,
a New Jersey Limited Partnership
- ------------------------------ ----------------------------------
By: Dominick Alfieri
Title: General Partner
ATTEST: TENANT:
LIFE MEDICAL SCIENCES, INC.
a Delaware Corporation
- ------------------------------ ----------------------------------
By:
Title:
44
<PAGE>
EXHIBIT A
DESCRIPTION OF LAND
379 THORNALL STREET
ALL that certain tract, lot and parcel of land lying and being in the Township
of Edison, County of Middlesex, and State of New Jersey being more particularly
described as follows:
BEGINNING at a point in the new Southeasterly Right-of-Way line of Thornall
Street, distant Southwestwardly 1,544.77 feet from the intersection formed by
the Southeasterly Right-of-Way line of Thornall Street, with the Southwesterly
Right-of-Way line of Wood Avenue South and from said beginning point running:
1. South 53 degrees 23 minutes 59 seconds East, along a new line in Lot 2-B-4
in Block 676, as shown on the current Township of Edison Tax Map, 264.80
feet to a point; running thence
2. South 36 degrees 36 minutes 01 second West, 76.19 feet to a point; running
thence
3. South 53 degrees 23 minutes 59 seconds East, 612.14 feet to a point;
running thence
4. South 31 degrees 14 minutes 31 seconds West, along the common line between
Lots 2-B-4 and 5, in Block 676, as shown on the current Township of Edison
Tax Map, 280.48 feet to a point, running thence
5. North 53 degrees 23 minutes 59 seconds West, along the common line between
Lots 2-B-3 and 2-A, in Block 676, as shown on said Tax Map, 889.65 feet to
a point in the new Southeasterly Right-of-Way line of Thornall Street;
running thence
6. Northeastwardly, along the new Southeasterly Right-of-Way line of Thornall
Street, along a curve to the left having a radius of 4,694.00 feet and an
arc length of 355.79 feet to a point, said point being the point and place
of BEGINNING.
Being also known as Lot 2-B-3 in Block 676, on the current Tax Map of the
Township of Edison, Middlesex County, New Jersey.
Subject to easements, restrictions and covenants of record and such state of
facts as an accurate survey may reveal.
<PAGE>
EXHIBIT B
FLOOR PLAN
----------
SEE ATTACHED
<PAGE>
EXHIBIT C
SEPARATE WORKLETTER
-------------------
<PAGE>
EXHIBIT D
CLEANING AND MAINTENANCE SPECIFICATIONS
---------------------------------------
Landlord will provide building standard cleaning services to the tenant area and
the ground floor lobby area in accordance with the following specifications:
1. GENERAL CLEANING
----------------
NIGHTLY
a. Empty all waste receptacles, removing waste to designated central
location for disposal.
b. Empty and wipe clean all ashtrays. Screen and clean all sand urns.
c. Wash and disinfect all water coolers and drinking fountains.
d. Wipe clean fingermarks, smudges, etc. from all doors and wall
surfaces.
e. Clean all tenant's interior stairways.
f. Replace plastic liners in all waste-disposal cans.
WEEKLY
a. Hand-dust all office equipment, furniture, fixtures, including
panelling, shelving, window sills, telephones, door louvers, and all
flat surfaces with a treated cloth or yard duster.
2. GROUP A - Ceramic tile, marble, terrazzo.
GROUP B - Linotile, asphalt, koroseal, plastic vinyl, rubber, wood, cork,
or other types of floors and base.
NIGHTLY
a. All floors in Group A to be swept and wet-mopped.
b. All floors in Group B to be dry mopped, using a "dustdown"
preparation, and spots to be removed by wet process.
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PERIODIC
a. A wet mopping, waxing, buffing, stripping, or machine scrubbing of the
floors in Group B will be accomplished whenever required to maintain a
hard lustrous finish and will be governed by the amount of wear due to
weather and other conditions.
3. VACUUMING
---------
NIGHTLY
a. Vacuum once per week. Carpet-sweep four times per week all rugs and
carpeted areas, moving light furniture and office equipment other than
desks and file cabinets. Spot clean to remove soluble spots which
safely respond to standard spotting procedures without risk of injury
to color or fabric.
4. HIGH DUSTING
------------
PERIODIC
a. Dust all closet shelving and wash all closet floors when accessible,
monthly.
b. Damp dust all pictures, charts, graphs, etc., not reached in nightly
cleaning, quarterly.
c. Dust clean all vertical surfaces such as walls, partitions, doors, door
bucks, and other surfaces not reached in nightly cleaning, quarterly.
d. Damp dust ceiling air conditioning diffusers, wall grills, door
louvers, registers, and venetian blinds, quarterly.
e. Dust exterior of light fixtures, annually.
5. WASHROOMS AND TOILETS
---------------------
NIGHTLY
a. Sweep, mop, rinse, and dry floors. Polish mirrors and bright-work.
Clean enameled surfaces.
b. Wash and disinfect basins, urinals, and bowls using scouring powder to
remove stains, making certain to clean undersides of rims of urinals
and bowls.
c. Wash and disinfect both sides of all toilet seats.
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d. Supply and service all toilet tissue, soap, towels, and sanitary
napkins. Sanitary napkins will be supplied in coin operated dispensers.
e. All wastepaper cans and all receptacles are to be emptied and new
plastic liners installed.
f. Hand dust and wash clean all partitions, tile walls, dispensers, and
receptacles in lavatories and vanity area.
g. Empty and clean sanitary disposal receptacles.
WEEKLY
a. Wash down walls in washrooms and stalls, from trim to floor.
6. ELEVATORS
---------
NIGHTLY
a. Clean the floor in accordance with specifications outlined above based
upon the type of flooring installed. The doors, surfaces, and fixtures
shall be dusted daily and damp wiped weekly.
7. GLASS
-----
PERIODIC
a. Clean both sides of all lobby glass including the building entrance
doors, nightly.
b. Clean all perimeter windows quarterly.
c. Clean glass partitions, doors, and furniture once every six months
(limited to reasonable quantities).
8. MISCELLANEOUS
-------------
a. Check all stairwells and landings nightly throughout entire demised
area, and keep in clean condition. All stairways and landings will be
dry mopped nightly. Railings, ledges, and equipment will be dusted
nightly. These areas will be wet mopped weekly, scrubbed when
necessary, and shall be waxed and buffed weekly where required.
b. Wipe down mail chute and mail depository nightly.
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c. On completion of work, all slop sinks are to be thoroughly cleaned,
and cleaning equipment to be stored neatly in designated locations.
d. All cleaning services except those performed by day porters, window
cleaners, and matrons are to be performed nightly, five nights per
week. No Saturday, Sunday or bank holiday service to be provided. In no
event shall performance of any cleaning service interfere with Tenant's
normal business operation.
e. The Contractor or Landlord is to furnish all necessary approved
cleaning materials, implements, and machinery for the satisfactory
completion of the work. This includes scaffolding, vacuum machines,
scrubbing machines, etc.
f. Contractor shall furnish proof of liability and property damage
insurance suitable to the bank, and Workman's Compensation Insurance in
amounts required under the laws of New Jersey.
g. Tenant will be charged for cleaning services in excess of the
specifications outlined above.
h. Tenant will be charged for the incremental cost to clean any areas of
the Demised Premises used for special purposes requiring more difficult
cleaning work than office areas including, but not limited to, private
toilets and showers, dining areas, cafeteria, kitchen, etc.
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<PAGE>
EXHIBIT E
RULES AND REGULATIONS
---------------------
1. The rights of tenants in the entrances, corridors,
elevators, and escalators of the Building are limited to ingress to and egress
from the tenants' demised premises for the tenants and their employees,
licensees, and invitees, and no tenant shall use or permit the use of the
entrances, corridors, escalators, or elevators for any other purpose. No tenant
shall invite to the tenant's demised premises, or permit the visit of, persons
in such numbers or under such conditions as to interfere with the use and
enjoyment of any of the plazas, entrances, corridors, escalators, elevators, and
other facilities of the Building by other tenants. Fire exits and stairways are
for emergency use only, and they shall not be used for any other purpose by the
tenants, their employees, licensees, or invitees. No tenant shall encumber or
obstruct, or permit the encumbrance or obstruction of any of the sidewalks,
plazas, entrances, corridors, escalators, elevators, fire exits, or stairways of
the Building. The Landlord reserves the right to control and operate the public
portions of the Building and the public facilities, as well as facilities
furnished for the common use of the tenants, in such manner as it deems best for
the benefit of the tenants generally.
2. The Landlord may refuse admission to the Building outside of
ordinary business hours to any person not having a pass issued by the Landlord
or the tenant whose demised premises are to be entered or not otherwise properly
identified, and may require all persons admitted to or leaving the Building
outside of ordinary business hours to register. Any person whose presence in
the Building at any time shall, in the judgment of the Landlord, be prejudicial
to the safety, character, reputation, and interests of the Building or of its
tenants may be denied access to the Building or may be ejected therefrom. In
case of invasion, riot, public excitement, or other commotion, the Landlord may
prevent all access to the Building during the continuance of the same, by
closing the doors or otherwise, for the safety of the tenants and protection of
property of the Building. The Landlord may require any person leaving the
Building with any package or other object to exhibit a pass from the tenant from
whose premises the packaging or object is being removed, but the establishment
and enforcement of such requirement shall not impose any responsibilities on the
Landlord for the protection of any tenant against the removal of property from
the premises of the tenant. The Landlord shall in no way be liable to any
tenant for damages or loss arising from the admission, exclusion, or ejection of
any person to or from the tenant's premises or the Building under the provisions
of this rule. Canvassing, soliciting, or peddling in the Building is
prohibited, and every tenant shall cooperate to prevent the same.
3. No tenant shall obtain or accept for use in its demised
premises ice, food for on premises preparation other than warming, beverage
towel, barbering, boot blackening, floor polishing, lighting maintenance,
cleaning, or other similar services from any persons not authorized by the
Landlord in writing to furnish such services, provided that the charges for such
services by persons authorized by the Landlord are not excessive and where
appropriate and consonant with the security and proper operation of the Building
sufficient persons are so
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authorized for the same service to provide tenants with a reasonably competitive
selection. Such services shall be furnished only at such hours, in such places
within the Tenant's Demised Premises and under such reasonable regulations as
may be fixed by the Landlord. Tenant may have a coffee service, subject to
Landlord's approval, and a kitchen for the use of its employees commensurate
with normal office use.
4. The cost of repairing any damage to the public portions of
the Building or the public facilities or to any facilities used in common with
other tenants, caused by a tenant or the employees, licensees, or invitees of
the tenant shall be paid by such tenant.
5. No lettering, sign, advertisement, notice or object shall be
displayed in or on the windows or doors, or on the outside of any tenant's
demised premises, or at any point inside any tenant's premises where the same
might be visible outside of such demised premises, except that the name of the
tenant may be displayed on the entrance door of the tenant's demised premises,
and in the elevator lobbies of the floors which are occupied entirely by any
tenant, subject to the approval of the Landlord as to the size, color, and style
of such display. The inscription of the name of the tenant on the door of the
tenant's demised premises shall be done by the Landlord at the expense of the
tenant.
6. No awnings or other projections over or around the windows
shall be installed by any tenant, and only such window blinds as are supplied or
permitted by the Landlord shall be used in a tenant's demised premises.
Linoleum, tile, or other floor covering shall be laid in a tenant's demised
premises only in a manner approved by the Landlord.
7. The Landlord shall have the right to prescribe the weight and
position of safes and other objects of excessive weight, and no safe or other
object whose weight exceeds the lawful load for the area upon which it would
stand shall be brought into or kept upon a tenant's demised premises. If, in
the judgment of the Landlord, it is necessary to distribute the concentrated
weight of any heavy object, the work involved in such distribution shall be done
at the expense of the tenant and in such manner as the Landlord shall determine.
The moving of safes and other heavy objects shall take place only outside of
ordinary business hours upon the same upon previous notice to the Landlord, and
the persons employed to move the same in and out of the Building shall be
reasonably acceptable to the Landlord and if so required by law, shall hold a
Master Rigger's license. Freight, furniture, business equipment, merchandise,
and bulky matter of any description shall be delivered to and removed from the
demised premises only in the freight elevators and through the service entrances
and corridors, and only during hours and in a manner approved by the Landlord.
Arrangements will be made by the Landlord with any tenant for moving large
quantities of furniture and equipment into or out of the Building.
8. No machines or mechanical equipment of any kind other than
typewriters and other ordinary portable business machines, may be installed or
operated in any tenant's demised premises without Landlord's prior written
consent, and in no case (even where the same are of a type so accepted or as so
consented to by Landlord) shall any machines or mechanical equipment be so
placed or operated as to disturb other tenants; but machines and mechanical
equipment which may be permitted to be installed and used in a tenant's demised
premises shall
2 of 4
<PAGE>
be so equipped, installed and maintained by such tenant as to prevent any
disturbing noise, vibration, or electrical or other interference from being
transmitted from such premises to any other area of the Building.
9. No noise, including the playing of any musical instruments,
radio or television, which, in the judgment of the Landlord might disturb other
tenants in the building, shall be made or permitted by any tenant, and no
cooking shall be done in the tenant's demised premises, except as expressly
approved by the Landlord. Nothing shall be done or permitted in any tenants'
demised premises, and nothing shall be brought into or kept in any tenants'
demised premises, which would impair or interfere with any of the Building
services or the proper and economic heating, cleaning, or other servicing of the
Building or the demised premises, or the use of enjoyment by any other tenant of
any other demised premises, nor shall there be installed by any tenant any
ventilating, air conditioning, electrical or other equipment of any kind which,
in the judgment of the Landlord, might cause any such impairment or
interference. No dangerous, inflammable, combustible, or explosive object or
material shall be brought into the building by any tenant or with the permission
of any tenant. Any cuspidors or similar containers or receptacles used in any
tenants' demised premises shall be cared for and cleaned by and at the expense
of the tenant.
10. No acids, vapors, or other materials shall be discharged or
permitted to be discharged into the waste lines, vents or flues of the Building
which may damage them. The water and wash closets and other plumbing fixtures
in or serving any tenant's premises shall not be used for any purpose other than
the purposes for which they were designed or constructed, and no sweepings,
rubbish, rags, acids or other foreign substances shall be deposited therein.
11. No additional locks or bolts of any kind shall be placed
upon any of the doors or windows in any tenants' demised premises and no lock on
any door therein shall be changed or altered in any respect. Additional keys
for a tenant's demised premises and toilet rooms shall be procured only from the
Landlord, which may make a reasonable charge therefor. Upon the termination of
a tenant's lease, all keys of the tenant's demised premises and toilet rooms
shall be delivered to the Landlord.
12. All entrance doors in each tenants' demised premises shall
be left locked, and all windows shall be left closed by the tenant when the
tenant's demised premises are not in use. Entrance doors shall not be left open
at any time.
13. Hand trucks not equipped with rubber tires and side guards
shall not be used within the Building.
14. All windows in each tenant's demised premises shall be kept
closed and all blinds therein above the ground floor shall be lowered when and
as reasonably required because of the position of the sun, during the operation
of the Building air conditioning system to cool or ventilate the tenant's
demised premises.
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15. The Landlord reserves the right to rescind, alter, or waive
any rule or regulation at any time prescribed for the Building when, in its
judgment, it deems it necessary, desirable, or proper for its best interest and
for the best interests of the tenants, and no alteration or waiver of any rule
or regulation in favor of one tenant shall operate as an alteration or waiver in
favor of any other tenant. The Landlord shall not be responsible to any tenant
for the non-observance or violation by any other tenant of any of the rules and
regulations at any time prescribed by the Building.
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<PAGE>
EXHIBIT F
DEFINITIONS
-----------
(a) The term "mortgage" shall mean an indenture of mortgage and deed
of trust to a trustee to secure an issue of bonds, and the term "mortgagee"
shall mean such a trustee.
(b) The terms "include," "including," and "such as" shall each be
construed as if followed by the phrase "without being limited to."
(c) References to Landlord as having no liability to Tenant or being
without liability to Tenant, shall mean the Tenant is not entitled to terminate
this Lease, or to claim actual or constructive eviction, partial or total, or to
receive any abatement or diminution of rent, or to be relieved in any manner of
any of its other obligations hereunder, or to be compensated.
(d) The term laws and/or requirements of public authorities and words
of like import shall mean laws and ordinances of any or all of the Federal,
state, city, county, and borough governments and rules, regulations, orders
and/or directives of any or all departments, subdivisions, bureaus, agencies, or
office thereof, or of any other governmental, public, or quasipublic
authorities, having jurisdiction in the premises, and/or the direction of any
public officer pursuant to law.
(e) The term requirements of insurance bodies and words of like
import shall mean rules, regulations, orders, and other requirements of the New
Jersey Board of Fire Underwriters and/or similar body performing the same or
similar functions and having jurisdiction or cognizance of the Building and/or
the Demised Premises.
(f) The term repair shall be deemed to include restoration and
replacement as may be necessary to achieve and/or maintain good working order
and condition.
(g) Reference to termination of this Lease includes expiration or
earlier termination of the term of this Lease or cancellation of this Lease
pursuant to any of the provisions of this Lease or to law. Upon a termination
of this Lease, the term and estate granted by this Lease shall end at noon of
the date of termination as if such date were the date of expiration of the term
of this Lease and neither party shall have any further obligation or liability
to the other after such termination (i) except as shall be expressly provided
for in this Lease, or (ii) except for such obligation as by its nature or under
the circumstances can only be, or by the provisions of this Lease, may be
performed after such termination and, in any event, unless expressly otherwise
provided in this Lease, any liability for a payment which shall have accrued to
or with respect to any period ending at the time of termination shall survive
the termination of this Lease.
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<PAGE>
EXHIBIT 10.43
SUBLEASE
Between
Life Medical Sciences, Inc.
The Tenant
And
Palatin Leased Premises, Inc.
The Subtenant
For Leased Premsies
Suite 100
214 Carnegie Center
Princeton, New Jersey
July 31, 1996
<PAGE>
SUBLEASE dated as of July 31, 1996 between Life Medical Sciences, Inc., a
Delaware corporation, with its principal office at 379 Thornall Street, Edison,
New Jersey 08818 (the "Tenant") and Palatin Technologies, Inc., with its
principal office at 214 Carnegie Center, Suite 100, Princeton, New Jersey 08540
(the "Subtenant").
Background: The Tenant and Carnegie 214 Associates Limited Partnership, a
New Jersey limited partnership, with its principal office at Suite 100, 214
Carnegie Center, Princeton, New Jersey 08540 (the "Landlord") are parties to a
Lease and Lease Agreement, dated as of May 27, 1992, as amended by an Amendment,
dated as of October 28, 1993 (as so amended, the "Overlease"), providing for the
lease of certain Leased Premises known as Suite 100, 214 Carnegie Center,
Princeton, New Jersey 08540 by the Landlord to the Tenant as more particularly
described in the Overlease as the New Leased Space and Additional Leased Space
and shown by the cross-hatching on the diagram attached hereto as Exhibit A (the
"Leased Premises"). A true copy of the Overlease has been provided to
Subtenant, regarding which the Subtenant hereby acknowledges receipt. The
Tenant and the Subtenant desire that the Tenant sublease the Leased Premises to
the Subtenant.
Subject to all the terms and conditions set forth below, the Tenant and the
Subtenant hereby agree as follows:
1 Definitions. Certain capitalized terms used in this Sublease are
-----------
defined immediately below or in the Overlease and, as used in this Sublease,
those terms and phrases shall have the respective meanings assigned or referred
to in this Sublease or the Overlease:
1.1 "Sublease" means this Sublease, as it may be amended.
1.2 "Sublease Basic Rent" is defined in subsection 0 of this Sublease.
1.3 "Sublease Commencement Date" means August 1, 1996.
1.4 "Sublease Event of Default" is defined in section 7.8.1 of this
Sublease.
1.5 "Sublease Rent" means Sublease Basic Rent and all Additional Rent.
1.6 "Sublease Security Deposit" is defined in section 7.13 of this
Sublease.
1.7 "Sublease Term" is defined in section 0 of this Sublease.
-1-
<PAGE>
2 Sublease of the Leased Premises.
-------------------------------
2.1 The Tenant hereby leases to the Subtenant, and the Subtenant hereby
accepts and leases from the Tenant, the Leased Premises during the Sublease
Term, together with all of Tenant's non-exclusive right to use the Common
Facilities during the Sublease Term for itself, its employees, other agents and
Guests in common with the Landlord, any tenants of Other Leased Premises, any of
their respective employees, other agents and guests and such other persons as
the Landlord may, except as otherwise set forth in this Sublease and the
Overlease, in the Landlord's sole discretion, determine from time to time.
3 Sublease Rent.
-------------
3.1 The Subtenant shall punctually pay the Sublease Rent for the Leased
Premises for the Sublease Term in the amounts and at the times set forth below,
without bill or other demand and without any offset, deduction or abatement
whatsoever, except as otherwise provided in the Overlease. The Subtenant shall
pay the Sublease Rent directly to the Landlord at its address set forth above
(or such other address as Subtenant may be notified by Landlord or Tenant).
3.2 The Sublease Basic Rent for the Leased Premises during the Sublease
Term shall be the aggregate sum of Ninety-Seven Thousand Two Hundred Sixty Five
($97,265.00) as set forth in the Overlease for the corresponding time period.
The Subtenant shall punctually pay the Sublease Basic Rent in equal monthly
installments in advance on the 1st day of each month during the Sublease Term.
The Subtenant shall also pay as additional rent ("Additional Rent") hereunder,
all additional rent and other charges and expenses required to be made by Tenant
under the Overlease attributable to the Leased Premises during the Sublease
Term. The Additional Rent for the Leased Premises during the Sublease Term shall
be promptly paid by the Subtenant in the respective amounts at the time such
payment becomes due pursuant to the terms of the Overlease. To the extent that
the Tenant may become obligated to pay any late charge or late payment interest
to the Landlord pursuant to the Overlease with respect to any Rent due for the
Sublease Term by reason of Subtenant's failure to timely pay same, the Subtenant
shall pay any such late charge or late payment interest on demand of Landlord or
Tenant immediately.
3.3 If the Commencement Date shall not occur on the first day of a
calendar month, or the Expiration Date shall not occur on the last day of a
calendar month, Sublease Rent for the month in which the Commencement Date or
Expiration Date occurs, as the case may be, shall be prorated on a per diem
basis. Notwith-
-2-
<PAGE>
standing anything to the contrary herein, if the Expiration Date is one day
prior to the end of a given month, the Sublease Rent shall not be prorated and
Subtenant shall pay the whole Sublease Rent for the month. This provision shall
survive the expiration of the Sublease Term.
4 Sublease Term. The Sublease Term shall commence on the Sublease
-------------
Commencement Date and shall continue until July 30, 1997, unless sooner
terminated in accordance with this Sublease.
5 Condition of the Leased Premises. The Subtenant hereby accepts the
Leased Premises in its AS IS condition on the Sublease Commencement Date without
any obligation on Tenant's part to prepare or alter the Leased Premises for
Subtenant's occupancy. Any expense incurred on, at or for the Leased Premises
during the Sublease Term shall be borne by the Subtenant.
6 Landlord's Obligation. The Tenant shall have no responsibility of any
kind for any default of or by Landlord under the Overlease. So long as a
Sublease Event of Default shall not have occurred or be continuing, the
Subtenant shall and may peaceably and quietly have, hold and enjoy the Leased
Premises during the Sublease Term without interference by or through the Tenant,
subject to the terms of this Sublease. Tenant shall cooperate with Subtenant to
cause Landlord to perform its obligations under the Overlease with respect to
the Leased Premises during the Sublease Term. Tenant, however, shall not be
required to incur any expense or enter into any litigation in order to secure
Landlord's performance. If Landlord shall default in any of its obligations with
respect to the Leased Premises, Subtenant shall be entitled to participate with
Tenant in the enforcement of Tenant's rights against Landlord (and in any
recovery or relief obtained). If, after written request from Subtenant, Tenant
shall be unwilling to take appropriate action for the enforcement of Tenant's
rights against Landlord, Subtenant shall have the right to take such action in
its own name and, for that purpose, all of the rights of Tenant to enforce the
obligations of Landlord under the Overlease are hereby conferred upon and are
assigned to Subtenant and Subtenant hereby is subrogated to such rights
(including, without limitation, the benefit of any recovery or relief).
7 Subtenant's Obligations and Rights. The Subtenant shall be bound by and
shall timely perform all the Tenant's obligations due the Landlord under the
Overlease with respect to the Leased Premises during the Sublease Term, except
as specifically modified in this Sublease:
7.1 The Subtenant shall use the Leased Premises during the Sublease
Term exclusively as a general business office, and for
-3-
<PAGE>
no other use.
7.2 The Subtenant shall not make any alterations, improvements or other
modifications to the Leased Premises without the prior written consent of the
Tenant in each instance (which consent shall not be unreasonably withheld or
delayed), in addition to the other requirements set forth in the Overlease.
7.3 In addition to its obligations under section 13 of the Overlease,
the Subtenant shall allow the Tenant the same rights of entry and access as are
reserved to the Landlord.
7.4 In addition to its obligations under section 14 of the Overlease,
the Subtenant's policies of insurance shall also name the Tenant as an
additional insured and certificates or copies of the policies of the Subtenant's
insurer shall be furnished to the Tenant.
7.5 In addition to its obligations and waivers under section 16 of the
Overlease, the Subtenant's waivers shall also be for the benefit of the Tenant,
its agents and employees.
7.6 The Subtenant may not assign this Sublease or further sublet, or
license the use of, the Leased Premises. Notwithstanding the foregoing: (1)
provided Subtenant obtains the consent of the Landlord, Subtenant may (without
Tenant's consent and/or prior notice) sublease all or part of the Leased
Premises or assign all of its interest in this Sublease to a parent, subsidiary
or affiliate; (2) Subtenant shall remain liable under this Agreement, jointly
and severally with any proposed assignee or sublessee, for the timely
performance of all obligations of Subtenant set forth in this Sublease; and (3)
Tenant shall not unreasonably withhold its consent to any other assignment of
this Sublease or other sublease of all or part of the Leased Premises, if
Subtenant obtains Landlord's consent to such other assignment or sublease.
7.7 Upon the termination or expiration of the Sublease Term, Subtenant
shall vacate the Leased Premises in the condition required by the terms of the
Overlease upon its termination.
7.8 The occurrence of any of the following events shall constitute an
Event of Default under this Sublease:
7.8.1 Section 22 of the Overlease is incorporated herein by
reference with respect to the Sublease Term, with the following substitutions:
(i) "Sublease Event of Default" for "Event of Default", (ii) "Sublease" for
"Agreement", (iii) "Subtenant" for "Tenant", (iv) "Sublease Basic Rent" for
"Basic Rent" and (v) "Tenant" for "Landlord"; and
-4-
<PAGE>
7.8.2 the occurrence of an Event of Default with respect to the
Sublease Term under the terms of the Overlease as incorporated herein.
7.9 Upon the occurrence of a Sublease Event of Default, the Tenant
shall have all the same rights and remedies with respect to the Leased Premises
and the Subtenant and the Sublease Term under this Sublease as the Landlord has
with respect to the Tenant following the occurrence of an Event of Default under
the Overlease except that with respect to any grace or notice periods, if any,
set forth in the Overlease for curing defaults by Tenant thereunder, the same
shall be reduced for purposes of this Sublease by 2 days with respect to the
cure period set forth in Subsection 22.1 and by 3 days with respect to the cure
period set forth in Subsection 22.3.
7.10 This Sublease and the estate, interest and rights hereby created
for the benefit of the Subtenant are, and shall always be, subordinate to the
Overlease and to any interest to which the Overlease and the estate, interest
and rights thereby created are subordinated in the Overlease.
7.11 The Subtenant hereby indemnifies the Tenant to the same extent as
the Tenant has indemnified the Landlord under section 27 of the Overlease;
provided, however that said indemnification by Subtenant shall only apply to
events occurring during the Sublease Term.
7.12 Section 28 of the Overlease is incorporated herein by reference,
with the following substitutions: (i) "Tenant" for "Landlord", "Subtenant" for
"Tenant", "Sublease Rent" for "Rent", "Sublease Term" for "Term" and "Sublease"
for "Agreement".
7.13 (a) The Subtenant shall pay to the Tenant upon execution and
delivery of this Sublease the sum of $89,159.58 as a Sublease Security Deposit
(the "Sublease Security Deposit") to be held by the Tenant as security for the
Subtenant's performance of all the Subtenant's obligations under this Sublease.
Any interest earned on the Sublease Security Deposit shall belong to the
Subtenant. The Subtenant shall not transfer or encumber its interest in the
Sublease Security Deposit.
(b) In lieu of cash, Subtenant may deposit with Tenant an
unconditional, transferable, irrevocable, sight draft letter of credit
substantially in the form annexed as Exhibit "C" in the sum of $89,159.58 (the
"Letter of Credit"), as the Sublease Security Deposit. The Letter of Credit
shall have a maturity date of no earlier than August 15, 1997 (the "Maturity
Date"). Subtenant understands and agrees that upon receipt of notice from the
issuing bank to the effect that the Letter of Credit will expire or be
terminated prior to the Maturity Date, unless Tenant
-5-
<PAGE>
shall have received a replacement letter of credit in form and issued by a bank
acceptable to Landlord on or before ten (10) days prior to such early expiration
date, the Letter of Credit shall be drawn down by Tenant and the proceeds held
by Tenant without interest to Subtenant as the security deposit required by this
Subsection 7.13.
(c) If Subtenant is in default, after applicable notices and
cure periods provided for, the Tenant may, in its sole discretion, apply the
Sublease Security Deposit (or draw upon the Letter of Credit, as the case may
be) to cure the Sublease Event of Default. If any such application is made due
to a default (other than for a default in the payment of Sublease Rent), upon
notice by the Tenant to the Subtenant, the Subtenant shall promptly replace the
amount so applied in cash (regardless if Subtenant initially elects to post a
Letter of Credit). The Subtenant will not look to the Landlord or to any
foreclosing mortgagee of the Property, the Building, the Common Facilities or
any interest therein for such return of the balance of the Sublease Security
Deposit, unless the respective person has expressly assumed the Tenant's
obligations under this Sublease in writing or has actually received the balance
of the Sublease.
(d) Provided Subtenant surrenders the Leased Premises in
accordance with Article 21 of the Overlease, Tenant shall return to Subtenant
the Security Deposit Amount (by delivering cash or the Letter of Credit, as the
case may be) within fourteen (14) days of the surrender date.
7.14 All notices contemplated by, permitted or required by this Sublease
shall be in writing. All notices required by this Sublease shall be personally
delivered or forwarded by certified mail--return receipt requested, addressed to
the intended party at its address first set forth above or such other address as
either party may indicate from time to time by notice given as aforesaid with
copies to each party's counsel as follows:
-6-
<PAGE>
If to Tenant:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attention: Thomas G. Barrett, Esq.
If to Subtenant:
Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
Attention: Leila J. Rubler, Esq.
All notices required under this Sublease shall be deemed given two days after
their deposit, properly addressed and postage prepaid, in a postal depository or
upon personal delivery to the intended party.
7.15 Subtenant shall not be bound by any amendments to the Overlease
that increase Subtenant's obligations or decrease Subtenant's rights after the
date hereof.
7.16 If pursuant to either Article 15 or 16 of the Overlease,
conditions exist which would allow Tenant to terminate the Overlease, Subtenant
shall have the right to terminate this Sublease under the same conditions.
7.17 Subtenant may, at any time and from time to time, deal directly
with Landlord on any matter involving the Leased Premises but Subtenant shall
not have the authority or power to bind Tenant in regard to any such matter nor
create any obligation on the part of Tenant.
8 Unincorporated Terms. The following provisions of the Overlease shall
--------------------
not be incorporated herein by reference and shall be deemed to be inapplicable,
as between Tenant and Subtenant, with respect to this Sublease: Sections 3.2,
3.3; Articles 4, 5, 29 and 30.
9 Tenant's Obligations. Tenant shall promptly furnish Subtenant with a
--------------------
copy of all statements and notices, including those relating to default, given
to Tenant by Landlord pursuant to the Overlease.
9.1 Tenant covenants that it has not taken any action to cause the
early termination of the Overlease and, as long as Subtenant is not in default,
Tenant will not take any action to cause the termination of this Sublease prior
to the expiration of the Sublease Term.
-7-
<PAGE>
9.2 Tenant represents and warrants that (a) Exhibit B hereto is a true
---------
and correct copy of the Overlease, (b) except as aforesaid, the Overlease has
not been modified or amended and is in full force and effect, (c) Tenant has not
received any notice that any default exists under the Overlease which remains
uncured, (d) Tenant has no actual knowledge of any event or circumstance which,
but for the passage of time or other circumstance, would constitute a default
under the Overlease, (e) Tenant has full right and authority to execute and
deliver this Sublease, (f) Tenant has not heretofore assigned, pledged,
hypothecated or otherwise transferred or encumbered the Leased Premises or its
interest in the Leased Premises, except pursuant to a sublease that is no longer
of any force or effect as of the start of the Sublease Term, (g) to the best of
Tenant's knowledge, all alterations undertaken by Tenant or on behalf of Tenant
with respect to the Leased Premises were completed in accordance with all
applicable legal and insurance requirements and the terms and conditions of the
Overlease, (h) to the best of Tenant's knowledge there is no asbestos in the
Leased Premises, (i) the Commencement Date of the Overlease is July 21, 1992 and
(j) the Expiration Date of the Overlease is July 31, 1997.
10 Waiver of Redemption and of Jury Trial. To the extent permitted by law,
Subtenant hereby waives service of notice of intention to re-enter. Subtenant
(for itself and for persons claiming through or under Subtenant) hereby
expressly waives any and all rights, under any present or future law, to redeem
the leased Premises or to a new trial, after re-entry by Tenant or after
issuance or entry of any warrant to dispossess in any summary proceeding or
otherwise to enforce the provisions hereof. If Tenant acquires possession of
the leased Premises by summary proceeding or in any other lawful manner, with or
without judicial proceeding, Tenant shall be deemed to have re-entered within
the meaning of this Section 10. To the full extent now or hereafter permitted
by law, Tenant and Subtenant waive trial by jury in any action or proceeding
brought by either against the other with respect to the leased Premises or to
any matter pertaining to this Sublease.
11 Brokers. Each party represents to the other that such party has not
-------
dealt with any person acting as a broker in connection with this Sublease. Each
party ("Indemnitor") agrees to indemnify and hold the other party ("Indemnitee")
harmless from and against any cost, loss, damages or other expense whatsoever,
including, but not limited to attorneys' fees, which the Indemnitee may incur by
reason of or in connection with any claim made by any real estate broker or
agent with whom the Indemnitor has dealt in connection with this Sublease;
12 Authorization. Each party represents to the other that the execution and
delivery of, the consummation of the transactions
-8-
<PAGE>
contemplated by, and the performance of all its obligations under, this Sublease
have been duly authorized by such party's board of directors and, if necessary,
by such party's stockholders at meetings duly called and held on proper notice
for that purpose at which there were respective quorums present and voting
throughout; and no other approval, corporate, governmental or otherwise, is
required to authorize any of the foregoing or to give effect to such party's
execution and delivery of this Sublease; and
13 Effectiveness. The effectiveness of this Sublease is conditioned upon
-------------
the Tenant's receipt of the Landlord's written consent as and to the extent
provided in the Overlease.
14 Successors and Assigns. The terms, covenants and conditions contained in
----------------------
this Sublease shall bind and inure to the benefit of Tenant and Subtenant and
their respective successors and assigns.
15 Non-binding. This Sublease shall not be binding upon Tenant or Subtenant
-----------
until it has been executed by both parties and a copy thereof delivered to each
party.
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed as of the date first above written.
TENANT:
Life Medical Sciences, Inc.
By
-----------------------------------------
-----------------------------------------
SUBTENANT:
Palatin Technologies, Inc.
By
-----------------------------------------
-----------------------------------------
-9-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEPTEMBER
30, 1996 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 15,355,637
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,631,022
<PP&E> 168,643
<DEPRECIATION> 63,539
<TOTAL-ASSETS> 15,765,616
<CURRENT-LIABILITIES> 520,423
<BONDS> 0
0
0
<COMMON> 7,915
<OTHER-SE> 14,692,526
<TOTAL-LIABILITY-AND-EQUITY> 15,765,616
<SALES> 0
<TOTAL-REVENUES> 127,211
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,999,096
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,131
<INCOME-PRETAX> (2,518,375)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,518,375)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,518,375)
<EPS-PRIMARY> (.38)
<EPS-DILUTED> (.38)
</TABLE>
