Amended And Restated Lease

AMENDED AND RESTATED


LEASE FOR COMBINATION


OFFICE/LABORATORY/LIGHT MANUFACTURING SPACE


AT


EAGLEVIEW CORPORATE CENTER


LOT 28


LANDLORD: EAGLEVIEW TECHNOLOGY PARTNERS


TENANT: 3-DIMENSIONAL PHARMACEUTICALS, INC.


TABLE OF CONTENTS


Page


1. LEASED SPACE AND PURPOSE....................................... 1 2. TERM........................................................... 2 3. RENT........................................................... 3 4. ADDITIONAL.RENT................................................ 6 5. NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES............. 7 6. LATE PAYMENT................................................... 10 7. CONSTRUCTION OF NEW SPACE...................................... 10 8. TENANT'S ALTERATIONS........................................... 16 9. MECHANIC'S LIENS............................................... 17 10. CONDITION OF LEASED SPACE...................................... 17 11. BUILDING SERVICES.............................................. 17 12. ASSIGNMENT AND SUBLETTING...................................... 18 13. ACCESS TO LEASED SPACE......................................... 19 14. REPAIRS........................................................ 19 15. TERMINATION AND EXTENSION...................................... 20 16. INTENTIONALLY OMITTED.......................................... 20 17. INDEMNIMFICATION AND INSURANCE................................. 20 18. FIRE OR OTHER CASUALTY......................................... 21 19. CONDEMNATION................................................... 22 20. ESTOPPEL CERTIFICATES.......................................... 22 21. DEFAULT........................................................ 23 22. REMEDIES....................................................... 24 23. CONFESSION OF JUDGMENT......................................... 25 24. WAIVER......................................................... 26 25. QUIET ENJOYMENT................................................ 26 26. FORCE MAJEURE.................................................. 26 27. SUCCESSORS..................................................... 26 28. LANDLORD'S LIABILITY........................................... 26


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TABLE OF CONTENTS


(continued)


Page


29. SUBORDINATION.................................................. 27 30. SUBSTITUTE SPACE............................................... 28 31. RULES AND REGULATIONS.......................................... 28 32. GOVERNING LAW.................................................. 28 33. SEVERABILITY................................................... 28 34. HOLDING OVER................................................... 28 35. NOTICES........................................................ 29 36. BROKERS........................................................ 29 37. SIGNS.......................................................... 30 38. SECURITY DEPOSIT; SECURITY INTEREST............................ 30 39. USE OF INFORMATION IN ADVERTISING.............................. 31 40. CAPTIONS....................................................... 31 41. ENTIRE AGREEMENT............................................... 31 42. RIGHT OF FIRST REFUSAL......................................... 31 43. OPTION TO CANCEL............................................... 32 44. RIGHT OF FIRST REFUSAL TO PURCHASE THE BUILDING................ 33 45. COOPERATION OF TENANT.......................................... 33


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AMENDED AND RESTATED LEASE
--------------------------


LEASE made this ____ day of __________________, 1997 between Eagleview TECHNOLOGY PARTNERS, a limited partnership, successor in interest to the Hankin Group ("Landlord"), with its office at 717 Constitution Drive, P.O. Box "562, Exton, PA 19341


AND


3-DIMENSIONAL PHARMACEUTICALS, INC., a Delaware corporation ("Tenant"), with its office at 665 Stockton Drive, Suite 104, Exton, PA 19341


BACKGROUND


The Hankin Group, predecessor in interest to the Landlord, and Tenant entered into a Lease on April 28, 1994 for 15,861 square feet of space ("Original Space") in a building located on lot 28, 665 Stockton Drive in the center known as Eagleview Corporate Center, Route 100, Exton, Uwchlan Township, Chester County, Pennsylvania ("Original Lease").


The Original Lease contemplated the possibility of the expansion of the Original Space. Tenant now desires to expand the Original Space and extend the term of the Original Lease among other desired amendments to the Original Lease.


Landlord and Tenant now wish to amend and restate their respective rights, duties and obligations under the Original Lease in this Amended and Restated Lease. Accordingly, effective as of the date hereof, the Original Lease is hereby amended and restated in its entirety as follows:


1. LEASED SPACE AND PURPOSE.


(a) Landlord hereby rents to Tenant all that certain space within a building t (the "Original Building"), in the center known as Eagleview Corporate Center, ("Center") Route 100, Exton, Uwchlan Township, Chester County, Pennsylvania (the term "Center" as used herein shall not include residential areas), which Original Building is located on Lot 28, 665 Stockton Drive as more fully shown on the land development plan attached hereto as Exhibit "1A1", the space leased by Tenant consists of approximately fifteen thousand eight hundred sixty one (15,861) square feet, more or less, as depicted on the building plan attached hereto as Exhibit "IA2". plus a storage shed and enclosed area outside the Original Building as shown on Exhibits "lA3" and "lA4", and is referred to herein as the "Original Space". The Original Space includes all fixtures, improvements, additions and other property installed therein at any time during the term of this Lease, and by virtue of this Lease.


(b) Landlord hereby further rents to Tenant all that certain space to be constructed in accordance with Section 7 below (the "New Building") as an addition to the Original Building and the Original Space, such additional space to be leased by Tenant to consist of all of the being co the New Building, being approximately Fourteen Thousand Five Hundred Fifty (14,550) square feet, more or less, as depicted on the prebuilding plan attached hereto as Exhibit "IA3",


and is referred to herein as the "New Space". The New Space includes all fixtures, improvements, additions and other property installed therein at any time during the term of this Lease and by virtue of this Lease.


(c) The New Space and the Original Space shall be individually and collectively as the "Leased Space." The Original Building and the New Building shall be individually and collectively known as the "Building". Tenant shall have the right to use, in common with others, the parking lot and other public portions of the Building and of the Center. The Leased Space shall be used and occupied as an office, laboratory and light manufacturing facility qualifying as high technology under the regulations adopted by the Pennsylvania Industrial Development Authority and for no other purpose.


2. TERM.


(a) The term of this Lease and Tenant's obligation to pay rent hereunder for the Original Space commences on the date of execution of this Lease, and for the New Space on the "Commencement Date" hereinafter defined, or on such earlier date determined in accordance with Section 2(c) below.:


(b) The occupancy by Tenant of the New Space shall commence upon a date ("Commencement Date") which is the earlier of:


(i) the date when the New Space is ready for occupancy; or


(ii) the date when Tenant shall commence conducting its business in the New Space.


(c) The New Space shall be deemed ready for occupancy when (i) Landlord has substantially completed Landlord's Work (defined below); and (ii) a use and occupancy certificate is issued by Uwchlan Township authorizing lawful occupancy of the New Building and the New Space and a copy of such certificate is delivered to Tenant. In the event of any disagreement between Landlord and Tenant as to whether "substantial completion" has occurred, the same shall be resolved by the Architect. "Substantial completion" shall mean such completion as shall enable Tenant to reasonably and conveniently use and occupy the New Space for the conduct of its business. Substantial completion shall be deemed to have been achieved even though minor or insubstantial details of construction, mechanical adjustment or decoration remain to be performed the non-completion of which does not materially interfere with Tenant's use of the Lease Space for the conduct of its business therein. Tenant and Landlord shall execute a declaration of the Commencement Date upon the Commencement Date. Notwithstanding the fact that the Commencement Date may not yet have occurred as to the entire New Space, when, the "non-laboratory area" of the New Space as designated on Exhibit IA3 is ready for occupancy, Tenant shall be permitted to occupy the same on such date. or not Tenant takes occupancy, beginning on such date, Tenant shall pay, in addition to Original Minimum Annual Rent, a prorated portion for the "nonlaboratory area" of (1) the Minimum Annual Rent calculated in accordance with Section 3(c)(i); and (2) Additional Rent in accordance with Section 3(e), and shall be otherwise subject to all of the terms, conditions and other obligations of Tenant under this Lease as of such date, with the exception of obligations relating to the Minimum Annual


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Rent and payments on account of Real Estate Taxes and Operating Expenses allocable to laboratory areas in the New Space to be deferred until the Commencement Date. Tenant and Landlord shall execute an interim declaration of possession upon substantial completion of the nonlaboratory areas.


(d) Landlord shall substantially complete Landlord's Work within eight (8) months following Tenant's approval of the "Tenant Plans" (as hereinafter defined), provided that, if such approval occurs later than October 31, 1997, Landlord shall have a period of (1) one additional day for every day after October 31, 1997 that the approval has not been given to substantially complete Landlord's Work (such required date of substantial completion being hereinafter called the "Landlord's Work Completion Date"). The term ("Term") of this Lease shall end ten (10) years after the Commencement Date, provided, however, that if the Commencement Date is not the first day of a calendar month, the Term shall extend to the last day of the calendar month ten (10) years after the last day of the calendar month in which the Commencement Date occurs.


3. RENT.


(a) Definitions.


(i) "Tenant's Proportionate Share" means for the Original Building, 60.82% and for the New Building, 100%. If Landlord desires, it may combine Tenant's Proportionate Share for the entire Building, which shall be 74.85%.


(ii) "Real Estate Taxes" shall mean all taxes and assessments levied, assessed or imposed at any time by any governmental authority upon or against the Building and the land upon which the Building is situate, and also any tax or assessment levied, assessed or imposed at any time by any governmental authority in connection with the receipt of income or rents from said Building or land to the extent that the same shall be in lieu of (and/or in lieu of an increase in) all or a portion of any of the aforesaid taxes or assessments upon or against the said Building and/or land, but shall not include any federal or state income tax (unless the same are imposed in lieu of any of the taxes against the Building and land described above, or in lieu of an increase in such taxes), or any franchise capital stock, estate or inheritance taxes.


(iii) "Operating Expenses" shall mean that part of any and all expenses, without mark-up or premium, reasonably incurred by Landlord in connection with its ownership, and operation of the Building, and the land upon which the Building is situate (i.e., Lot 28), including, without limitation, insurance maintained on the Building which, in Landlord's judgment, shall be necessary, all direct labor costs, management fees, service contracts and supplies used in connection with the cleaning, operating, labor and maintenance of the Building, all repairs and decorating required to be performed by Landlord as provided for in this Lease (other than "Landlord's Work" as defined herein), common area maintenance and snow removal, building supplies, equipment, purchases and maintenance, all charges for the common areas of the Building for electricity and water, removal of trash, rubbish, garbage and refuse, the cost of operating or leasing an identification sign or signs for the Building, replacing of paving, curbs, walkways, directions or other signs, drainage, maintenance of fire sprinkling systems (if any), and the Building's pro rata share of such other expenses as Landlord may deem necessary and proper in connection with the operation and maintenance of the common areas of the Building


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and Center, excluding any costs which under generally accepted accounting principles are capital expenditures; provided, however, that Operating Expenses shall also include the annual amortization (over the anticipated useful life) of a capital improvement failing within any of the following categories: (i) a labor saving device or improvement which is intended to reduce or eliminate any other component of Operating Expenses; (ii) an installation or improvement required by reason of any law, ordinance or regulation, which requirement did not exist on the date of this Lease and is generally applicable to similar buildings; (iii) an installation or improvement which directly enhances safety of tenants in the Building or Center generally. Landlord shall have the right to bill Tenant directly for any items of Operating Expenses which can be attributed directly to Tenant's use only. The following shall be excluded from the term 'Operating Expenses": (i) expenses for repairs or other work occasioned by fire, windstorm or other insured casualty (excluding any deductible amounts) or caused by and chargeable to a particular tenant; (ii) expenses incurred in leasing or procuring new tenants (e.g., for lease commissions, advertising expenses and expenses of renovating space for new or existing tenants); (iii) legal expenses in enforcing the terms of any lease; (iv) interest and amortization payments on any mortgage or mortgages; (v) the cost of any item, whether purchased or leased, that would be considered a capital item or improvement under generally accepted accounting principles (except to the extent permitted above); and (vi) any charge or fee paid by, or for which Landlord is reimbursed by, any other tenant occupying the Building; (vii) Real Estate Taxes and (viii) any cost to remediate an environmental problem provided said problem was not caused by any act or omission of Tenant or any contractor, employee, agent, invitee or guest of Tenant.


(b) From the date hereof until the Commencement Date, Tenant shall pay Landlord minimum annual rent ("Original Minimum Annual Rent") equal to the sum of $198,524.21 in monthly installments of $16,543.68 each.


(c) Tenant shall pay Landlord minimum annual rent from and after the Commencement Date Annual Rent") equal to the applicable "Shell Rent" and "Amortized Fit Out-Rent Portion" as described below.


(i) For the period from the Commencement Date until February 28, 2005 (the "Rent Adjustment Date"), the "Shell Rent" per annum shall be: (A) $114,654.00 being, the square footage of the New Space which for the purposes of this Lease, the parties agree shall be deemed to be 14,550 square feet, multiplied by $7.88, plus (B) $105,797.63, being the square footage of the Original Space which for the purposes of this Lease, the parties agree shall be deemed to be 15,861 square feet, multiplied by $6.6703, plus


(ii) For the period from the Rent Adjustment Date through the end of the Term, the "Shell Rent" per annum shall be $239,638.68, being the square footage of the entire Leased Space, which for the purposes of this Lease, the parties agree shall be deemed to be 30,411 square feet, multiplied by $7.88.


(iii) For the period from the Commencement Date until the Rent Adjustment Date, the "Amortized Fit-Out Rent Portion: shall mean $92,726.59 (representing the "Amortized Fit-Out Rent Portion" for the Original Space calculated pursuant to the Original Lease), plus the "New Space Amortized Fit- Out Rent Portion' as defined below.


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(iv) For the period from the Rent Adjustment Date through the end of the Term, the Amortized Fit-Out Rent Portion shall be the New Space Amortized Fit- Out Rent Portion as defined below


(v) For the purposes of this Lease, and the calculation of Minimum Annual Rent, the following terms shall have the meanings as set forth below:


(A) "Fit-Out Cost" shall mean the "Cost to Landlord" of performing the Fit-Out Work for the New Space.


(B) "Cost to Landlord" shall mean the actual cost billed to Landlord by Eagleview Commercial Construction Company, Inc. (the "General Contractor") of supplying all labor and materials to perform the Fit-Out Work for the New Space, including all items as are included within the definition of "Cost of the Work" pursuant to Article 8 of the "American Institute for Architects AIA Document Al11 Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee," plus a fee of ten (10%) which shall be charged to Landlord by the General Contractor.


(C) "Fit-out Work" shall mean "Landlord's Work" (as defined in Section 7 below) exclusive of site work, building shell construction, building shell architectural, site engineering and related work, within the portion of the New Space intended to be completely fit-out by Landlord prior to the Commencement Date, presently estimated at 14,550 square feet.


(D) "New Space Amortized Fit-Out Rent Portion" shall mean a sum equal to the monthly payment necessary to repay one half of the Fit-Out Cost, with interest at ten (10%) percent per annum over a 120 month term in equal monthly installments, multiplied by twelve (12). The principal base upon which the Amortized Fit-Out Rent Portion shall be calculated is hereinafter called the "Amortization Base." Landlord and Tenant have established a preliminary budget for the Fit-Out Cost of $1,675,450.00, for 14,550 square feet of finished New Space. By way of illustration, if the actual Fit-Out Cost is $1,675,450.00, one- half the Fit-Out Cost would be $837,725.00, and the Amortized Fit-Out Rent Portion for the New Space would be $132,847.32 per year.


(d) Minimum Annual Rent and Original Minimum Annual Rent shall be paid in equal monthly installments on the first day of each calendar month in advance. If the Commencement Date is not the first day of a calendar month, rent from the Commencement Date to the first day of the following month shall be apportioned at the Minimum Annual Rent rate (based on a 365-day year) and shall be paid, on or before the Commencement Date. All rent shall be payable, in advance, and without prior notice or demand, at the address of Landlord set forth in the heading of this Lease or at such other place, or to such other person as Landlord may from time to time direct by written notice to Tenant.


(e) In addition, Tenant shall pay to Landlord as Additional Rent in equal monthly installments one twelfth (1/12) of Tenant's Proportionate Share of annual Real Estate Taxes and Operating Expenses, at the time of payment of each monthly installment of Minimum Annual Rent or Original Minimum Annual Rent, based upon the most recent costs of Operating Expenses and Real Estate Taxes available. For the period from the date hereof until the


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Commencement Date such monthly installment shall be equal to: (i) $2.30, multiplied by the sum of 15,861 plus, ii) the square footage of the "non laboratory areas", only if the "non laboratory areas" of the New Space is ready for occupancy, (iii) divided by 12. For the period from the Commencement Date until the issuance of a statement pursuant to subsection 3(f) below, such monthly installment shall be equal to $2.30 multiplied by 30,41 1, divided by 12.


(f) Within ninety (90) days of the expiration of each calendar year Landlord shall furnish Tenant with a written statement, certified by Landlord, of the actual Operating Expenses and Real Estate Taxes incurred for such year. Within thirty (30) days of the rendition of such statement, Tenant shall pay any amounts in excess of those collected pursuant to the payments on account of Real Estate Taxes and Operating Expenses pursuant to Section 3 (c) hereof, and Landlord shall refund to Tenant or credit against the next installments of rent due, any excess of the payments by Tenant under Section 3 (c) over the actual Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes. In the event the last year of the term of this Lease shall not be a full calendar year, then Tenant's obligation for Expenses and Real Estate Taxes attributable to such year shall be pro rated.


(g) For each calendar year, Landlord shall make a reasonable estimate of the Operating Expenses and Real Estate Taxes and notify Tenant as to such estimate on or about December 15th of the preceding calendar year.


(h) Within ninety (90) days after receipt of each statement, Tenant shall have the right to audit and contest Landlord's determination of Operating Expenses and Real Estate Taxes and to inspect Landlord's records with respect thereto during normal business hours upon at least ten (10) days advance written notice. If any such audit shall reveal a discrepancy in Landlord's determination of the Operating Expenses and/or Real Estate Taxes, Landlord and Tenant shall cooperate in good faith to resolve the discrepancy and mutually agree upon the amount of the actual Operating Expenses and Real Estate Taxes. In the event it is determined that Tenant has been charged more than its actual Tenant's Proportionate Share of Operating Expenses and Real Estate Taxes, Landlord shall refund the excess payment to Tenant.


(i) All sums due under this Article shall be appropriately apportioned and prorated for any portion of a Lease year, so that Tenant shall not be obligated to pay any Operating Expenses or Real Estate Taxes that accrue following the expiration or earlier termination of the Term of this Lease. In the event that this Lease shall expire or terminate at any time other than at the end of a calendar year, then within thirty (30) days after statements reflecting the actual Operating Expenses for the year in which such expiration or termination occurs are submitted by Landlord to Tenant (pro-rated on the basis of the number of calendar year days included within such partial Lease year divided by 365 days), either Landlord or Tenant shall pay to the other party the adjustment sum due. The provisions of this paragraph shall survive the expiration of this Lease.


4. ADDITIONAL.RENT.


Tenant shall pay to Landlord as "Additional Rent" (in addition to sums payable pursuant to sections 3 (c) and 3 (d) the following:


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(a) Expenses Incurred by Landlord as a Result of Tenant's Default. Any and
------------------------------------------------------------- all damages, costs and expenses (including without limitation thereto reasonable attorney's fees) which Landlord may suffer or incur by reason of the occurrence of an Event of Default under this Lease, and any damage to the Building or the real estate of which the Building is a part caused by any act or omission of Tenant, together with interest to the date of payment (whether before or after entry of judgment and issuance of execution thereon) at a rate equal to five (5%) percent above the prime interest rate (or similar rate if the prime interest rate is no longer published) of First Union Bank, N.A. or its successor, in effect during the period said payment is due ("Default Rate").


(b) Use and Occupancy Taxes. All use and Occupancy taxes imposed by any
----------------------- governmental body allocable to Tenant's use and occupancy of the Leased Space.


(c) Utilities. All charges for beat, gas, water, electric, trash and
--------- sewage disposal for the Leased Space, whether billed directly by the providers of the same to Tenant, or by Landlord as the owner of the Building. Landlord shall cause electric, gas (if any), water and sewer to be separately sub- metered. Landlord shall bill Tenant for Landlord's sub-metered amount of Tenant's consumption of water and sewer.


5. NEGATIVE COVENANTS OF TENANT; HAZARDOUS SUBSTANCES.


(a) Tenant will not:


(i) damage the Leased Space or any other part of the Building;


(ii) except in the ordinary course of laboratory business and as permitted in accordance with all applicable laws, regulations and ordinances, bring into or permit to be kept in the Leased Space any dangerous, explosive or obnoxious substances;


(iii) violate any of the terms and conditions of the Amended and Restated Declaration of Easements and Protective Covenants and Restrictions dated July 12, 1990, as supplemented and clarified by a certain Supplement and Clarification dated April 2, 1991, and as amended by: First Amendment to Amended and Restated Declaration of Easements and Protective Covenants and Restrictions dated August 26, 1991, Second Amendment to Amended and Restated Declaration of Easements and Protective Covenants and Restrictions For Eagleview Corporate Center dated July 15, 1993., Third Amendment to Amended and Restated Declaration of Easements and Protective Covenants and Restrictions For Eagleview Corporate Center dated December 2, 1993 Fourth Amendment to Amended and Restated Declaration of Easements and Protective Covenants and Restrictions dated May 15, 1997 and Fifth Amendment to Amended and Restated Declaration of Easements and Protective Covenants and Restrictions for Eagleview Corporate Center dated July 22, 1997. copies of which have been delivered to Tenant, and such further amendments thereto as may be adopted from time to time;


(iv) conduct itself or permit its agents, servants, employees or invitees to conduct themselves in a manner that in Landlord's judgment reasonably exercised is unsafe;


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(v) manufacture any commodity or prepare or dispense any food or beverages in the Leased Space, except for consumption in Leased Space by Tenant, its employees or invitees;


(vi) remove, attempt to remove or manifest any intention to remove Tenant's goods or property from the Space other than in the ordinary course of business;


(vii) vacate or abandon the Lease Space, or permit the Leased Space to be empty or unoccupied for a period in excess of 15 consecutive days; or


(viii) do or suffer to be done, any act, matter or thing objectionable to the fire insurance companies or Board of Underwriters whereby the fire insurance or any other now in force or hereafter to be placed on the Leased Space or the Building or Center shall become void or suspended, or whereby the same shall be rated as a more haza ...