THIRD AMENDMENT TO AGREEMENT OF LEASE
THIS 3rd AMENDMENT is made this 23rd day of September, 1997 by and between
LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership
("Landlord") and Apollon, Inc., a Pennsylvania corporation ("Tenant").
BACKGROUND
X. Xxxxx Great Valley, Inc., Landlord's predecessor, and Tenant entered
into a Lease Agreement dated July 8, 1992 (the "Original Lease"), covering
premises at Xxx Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx, as more fully
described in the Original Lease. The Original Lease was amended by first
amendment dated January, 11, 1993 and second amendment dated November 19, 1993
(the Original Lease as amended by the first amendment and second amendment is
hereinafter called the "Lease").
B. Tenant desires to expand into additional space in the Building, and
extend the term of the Lease, and Landlord has agreed to such expansion and
extension subject to the provisions of this Third Amendment.
AGREEMENTS
NOW THEREFORE, the parties hereto, in consideration of the mutual promises
and covenants contained herein and in the Lease, and intending to be legally
bound, hereby agree that the Lease is amended as follows:
1. Expansion Space: Landlord hereby leases to Tenant an additional
5,425 square feet of space in the Building (the "Expansion Space") as shown
in cross-hatch on Exhibit A hereto. The term for the Expansion Space shall
begin as of October 1, 1997, and shall thereafter run concurrently with the
Term of the Lease as provided below. Minimum Annual Rent for the Expansion
Space shall be paid as provided below, in the same time and manner as
required for the balance of the Premises. The total amount of space covered
by this Lease is 46,125 square feet. Tenant's Proportionate Share for
purposes of calculating and paying Tenant's Share of Annual Operating Costs
shall be 76%. Tenant's Share of Annual Operating Costs shall be prorated for
the calendar year 1997 to reflect that Tenant's Proportionate Share has
increased effective as of October 1, 1997. The Expansion Space shall be
deemed to be part of the Premises for all other purposes of the Lease. The
Tenant shall take possession to the Expansion Space "as is, where is."
Landlord has not agreed to make any improvements to same. Any improvements to
the Expansion Space shall be made subject to all other terms and conditions
of the Lease.
2. Term: Section 4 of the Original Lease is amended by deleting the
second sentence thereof and substituting the following is in its place:
"The term of this Lease shall, unless sooner terminated as expressly
provided in this Lease continue until September 30, 2003 (the
"Expiration Date")."
3. Minimum Annual Rent: Minimum Annual Rent effective October 1, 1997
shall be as follows:
46,125 s.f. Rent/s.f. Annual Monthly
10/1/97-9/30/98 $ 8.75 $403,593.75 $33,632.81
10/1/98-9/30/99 $ 9.75 $449,718.75 $37,476.56
10/1/99-9/30/00 $10.10 $465,862.50 $38,821.88
10/1/00-9/30/01 $10.45 $482,006.25 $40,167.19
10/1/01-9/30/02 $10.80 $498,150.00 $41,512.50
10/1/02-9/30/03 $11.15 $514,293.75 $42,857.81
Effective October 1, 1997, Section 6 (a) of the Original Lease is amended to
substitute the above schedule for Minimum Annual Rent as stated in the Original
Lease.
4. Option To Extend Term. Provided that Landlord has not given Tenant
notice of default more than two (2) times preceding the Expiration Date, that
there then exists no event of default by Tenant under this lease nor any event
that with the giving of notice and/or the passage of time would constitute a
default, and that Tenant is the sole occupant of the Premises, Tenant shall have
the right and option to extend the Term for one (1) additional period of five
(5) years(s), exercisable by giving Landlord prior written notice, at least nine
(9) months in advance of the Expiration Date, of Tenant's election to extend the
Term; it being agreed that time is of the essence and that this option is
personal to Tenant and is nontransferable to any assignee or sublessee
(regardless of whether any such assignment or sublease was made with or without
Landlord's consent) or other party. Such extension shall be under the same terms
and conditions as provided in this lease except as follows:
(a) the additional period shall begin on the Expiration Date and
thereafter the Expiration Date shall be deemed to be extended by five years;
(b) all references to the Term in this lease shall be deemed to mean
the Term as extended pursuant to this Section;
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(c) there shall be no further options to extend; and
(d) the Minimum Annual Rent payable by Tenant for the additional
period shall be computed based upon the then "Fair Market Rental Rate", but in
no event shall the new rent be less than the rent at the end of the initial term
of the Lease. Within One (1) month after Landlord receives Tenant's notice of
the exercise of this option, Landlord will notify Tenant of the "Fair Market
Rental Rate" which shall be Landlord's good faith determination of the rental
rate applicable at such time for office space in similar buildings located in
the Malvern, Pennsylvania Market Area ("Landlord's Rental Notice"). If Tenant
objects to the Fair Market Rental Rate as so established, Tenant may rescind its
exercise of this option to extend term, provided Tenant gives notice of such
recision to Landlord on or before two (2) weeks after Tenant receives Landlord's
Rental Notice, time being of the essence. If Tenant so rescinds so exercise,
Tenant's option to extend term shall be deemed both unexercised and
extinguished. If Tenant does not so rescind its exercise, the term of this
Lease shall be extended as provided before, with the Minimum Annual Rent
applicable to such additional period being computed based upon the Fair Market
Rental Rate as stated in the Landlord's Rental Notice.
5. Right of First Offer to Lease Additional Space. If and when any of
the additional rentable spaces in the Building which are shown as "Additional
Space" on Exhibit "A" (individually, the "Additional Space") first becomes
available for rental during the term of this lease and provided that Landlord
has not given Tenant notice of default more than two (2) times during the
immediately preceding twelve (12) months, that there then exists no event of
default by Tenant under this lease nor any event that with the giving of notice
and/or the passage of time would constitute a default, and that Tenant is the
sole occupant of the Premises, Tenant shall have the right of first offer to
lease all of the Additional Space, subject to the following:
(a) Landlord shall notify Tenant when the Additional Space first
becomes available for rental by any party other than the tenant then in
occupancy of the Additional Space and Tenant shall have seven (7) days following
receipt of such notice within which to notify Landlord in writing that Tenant is
interested in negotiating terms for leasing such Additional Space and to have
its offer considered by Landlord prior to the leasing by Landlord of the
Additional Space to a third party. If Tenant notifies Landlord within such time
period that Tenant is so interested, then Landlord and Tenant shall have 30 days
following Landlord's receipt of such notice from Tenant within which to
negotiate mutually satisfactory terms for the leasing of the Additional Space by
Tenant and to execute an amendment to this lease incorporating such terms or a
new lease for the Additional Space.
(b) If Tenant does not notify Landlord within such 7 days of its
interest in leasing the Additional Space or if Tenant does not execute such
amendment or lease within such 30 days, if applicable, then this right of first
offer to lease the Additional Space will
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lapse and be of no further force or effect and Landlord shall have the right to
lease all or part of the Additional Space to any other party at any time on any
terms and conditions acceptable to Landlord.
(c) This right of first offer to lease the Additional Space is a
one-time right if and when each Additional Space first becomes available, is
personal to Tenant and is nontransferable to any assignee or sublessee
(regardless of whether any such assignment or sublease was made with or without
Landlord's consent) or other party.
6. Right Of First Offer To Purchase Property.
(a) If at any time during the initial term of this lease (prior to
October 1, 2003), except as set forth in subsections (b) and (c) below, Landlord
desires to sell the whole of the Property known as One Great Valley Parkway in
Malvern, Pennsylvania to a non-related entity for full consideration, Landlord
agrees to notify Tenant of such desire. Tenant shall advise Landlord within ten
(10) days after receiving such notice if Tenant is interested in negotiating
terms for purchase of the Property by Tenant. If Tenant fails to respond within
such time period and/or if Tenant is not interested in purchasing the Property,
then Tenant shall have no further right hereunder to purchase the Property.
However, if Tenant notifies Landlord within such time period that Tenant is
interested in purchasing the Property, then Landlord and Tenant shall have
thirty (30) days following Landlord's receipt of such notice from Tenant within
which to negotiate and execute a mutually satisfactory agreement for the sale of
the Property to Tenant.
(i) In the event that Landlord and Tenant fail to enter into an
agreement of sale and purchase within such thirty (30) days, then Tenant shall
have no further right hereunder to purchase the Property. Thereafter, Landlord
may negotiate with any third party for the sale and purchase of the Property.
(ii) If Landlord and Tenant enter into an agreement of sale and
purchase but transfer of the Property to Tenant is not consummated for any
reason other than Landlord's default under such agreement of sale and purchase,
then Tenant shall have no further right hereunder to purchase the Property.
(b) Tenant's right of first offer set forth above shall not apply to
any transfer of the Property in mortgage foreclosure, by deed in lieu of
foreclosure or as part of a settlement with the mortgagee nor shall such right
apply to any efforts by Landlord to sell the Property as part of a package
transaction which includes one or more other properties owned by Landlord or its
affiliates. In the case of any such mortgage related or package transaction,
Tenant shall have no rights relating to the purchase of the Property and no such
rights shall survive the conveyance of the Property by Landlord pursuant to a
mortgage related or package transaction.
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(c) Landlord shall have no obligation to notify Tenant of
Landlord's intention to sell and Tenant shall have no right to purchase the
Property at any time during which Tenant is in default under any of the
provisions of this lease. The right of first offer set forth in this Section
shall terminate automatically if at any time during the Term, including
without limitation at any time after Landlord and Tenant enter into an
agreement of sale and purchase. Tenant defaults under any of the provisions
of this lease and Landlord gives Tenant written notice of such default; in
which event this Section shall be deemed to be null and void and of no
further force or effect. In addition, Tenant's right of first offer shall
terminate automatically if Tenant transfers this lease (as described in
Section 18) or if the Property is wholly or partially destroyed by casualty
or taken by a condemnation or otherwise for any public or quasi-public use.
7. New Facilities for Tenant: The Lease, as amended hereby, shall
terminate in the event Landlord leases or sells to Tenant a new or existing
facility of more than 46,125 square feet, upon terms and conditions satisfactory
to Landlord and Tenant, embodied in a lease or agreement of sale executed by
Landlord and Tenant.
8. Tenant Cancellation Rights: The provisions of this Third Amendment
shall be cancelable by Tenant by delivering written notice to Landlord on or
before October 1, 1997 (time being of the essence hereof), in which event this
Third Amendment shall be deemed to be void from inception, and the Lease as
previously amended shall continue in full force and effect.
9. Tenant Waiver of Previous Provisions: Tenant hereby waives any and
all options and rights to extend or renew the Term of the Lease, options to
expand the Premises and to purchase the Building, and Sections 44, 47 and 48 of
the Original Lease are hereby deleted in their entirety. Tenant further waives
any "cap" on annual operating costs under Section 43 of the Original Lease,
which Section 43 is hereby deleted in its entirety.
10. Confession of Judgment: Without limitation of any other rights or
remedies available to the Landlord under Section 27(b) entitled "Remedies", or
which are otherwise available at law or in equity, and subject to Section 27(d)
of the Lease, the following remedy of Landlord in the case of a default by the
Tenant under the Lease, as herein amended, is restated and granted as follows:
When this Lease and the Term or any extension or renewal thereof shall have
been terminated on account of any default by Tenant, or when the Term has
expired, it shall be lawful for any attorney of any county of record in
Pennsylvania to appear as attorney for Tenant as well for all persons
claiming by, through or under Tenant and to confess judgment against it,
them or any of them, for the recovery by Landlord of possession of the
Premises, for which this Lease shall be said attorney's sufficient warrant;
and, thereupon, if Landlord so desires, an appropriate writ of possession
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may issue forthwith, without any prior writ or proceeding whatsoever.
Landlord shall have the right for the same default and upon any subsequent
default or defaults, or upon the termination of this Lease or Tenant's
right of possession as hereinbefore set forth, to direct any attorney of
any court of record in Pennsylvania to confess judgment for the recovery of
possession of the Premises as hereinbefore provided, on one or more
occasions.
11. Miscellaneous: Except as expressly modified herein, the terms and
conditions of the Lease shall remain unchanged and in full force and effect.
All capitalized terms used herein but not separately defined shall have the same
meaning as given in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the day and year first above written.
LANDLORD:
LIBERTY PROPERTY LIMITED PARTNERSHIP
By: Liberty Property Trust, Sole General Partner
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
TENANT:
APOLLON, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: President and CEO
Attest: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President - Finance
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