Exhibit 10.1

 

LEASE AGREEMENT

 

between

 

 

530 REGENCY DRIVE ASSOCIATES, L.P.,
a Pennsylvania limited partnership

 

as Landlord

 

and

 

WEST PHARMACEUTICAL SERVICES, INC.,
a Pennsylvania corporation

 

as Tenant

 

Dated as of

 

December 17, 2010

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

1.

Demise

2

2.

Project Conditions and Termination Rights

2

3.

Term

4

4.

Rent

4

5.

Improvements

7

6.

Use

7

7.

Operating Expenses and Taxes

8

8.

Compliance with Legal Requirements

12

9.

Right to Contest

12

10.

Liens

13

11.

Subordination

13

12.

Indemnification

14

13.

Environmental Matters

15

14.

Landlord’s Maintenance, Repairs and Services

17

15.

Tenant’s Maintenance and Repairs; No Waste

21

16.

Alterations

21

17.

Insurance; Waiver of Subrogation

23

18.

Destruction

27

19.

Landlord’s Financial Covenant

31

20.

Waiver of Liens

31

21.

Quiet Enjoyment

31

22.

Survival

31

23.

Subletting; Assignment

31

24.

Events of Default and Remedies

32

25.

Landlord Defaults

38

26.

Governmental Incentives

40

27.

Surrender; Holdover

41

28.

Notices

41

29.

Estoppel Certificates

42

30.

No Merger

43

31.

OFAC/Patriot Act

43

32.

Separability

43

33.

WAIVER OF TRIAL BY JURY

43

34.

Recording

43

35.

Landlord’s Right of Entry

44

36.

Right of First Offer on Space within Park

44

37.

Miscellaneous

46

38.

Representations

47

39.

Use of Roof

49

40.

Signs; Naming Rights, etc.

50

41.

Security Deposit

51

42.

Real Estate Brokers

52

 

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43.

Option to Purchase

52

44.

Self-Help

55

45.

Declaration

56

 

APPENDIX I

Rules of Construction and Definitions

SCHEDULE 1

Cash Requirements

EXHIBIT A

Description of Land

EXHIBIT B

Description of Existing Land

EXHIBIT C

Description of Additional Land

EXHIBIT D

Description of Park

EXHIBIT E

Permitted Encumbrances

EXHIBIT F

Work Letter

EXHIBIT G

Project Conditions and Milestones

EXHIBIT H

Basic Rent Calculation

EXHIBIT I

Fair Market Rental Value Determination

EXHIBIT J

Form of Subordination, Non-Disturbance and Attornment Agreement

EXHIBIT K

Environmental Reports

EXHIBIT L

Cleaning Specifications

EXHIBIT M

Form of Memorandum of Lease

EXHIBIT N

Intentionally Omitted

EXHIBIT O

Form of Landlord’s Waiver

EXHIBIT P

Map of ROFO Area

EXHIBIT Q

Industrial Waste Discharge Rider

 

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THIS LEASE AGREEMENT (as amended from time to time, this “Lease”) is dated as of
December 17, 2010 between 530 REGENCY DRIVE ASSOCIATES, L.P., a Pennsylvania
limited partnership (“Landlord”), having an office c/o The Hankin Group, 707
Eagleview Boulevard, Suite 400, P.O. Box 562 Exton, Pennsylvania 19341 and WEST
PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (herein, together with
any Person succeeding thereto by consolidation, merger or acquisition of its
assets substantially as an entirety, called “Tenant”), having an address at 101
Gordon Drive, Lionville, Pennsylvania, 19341.

 

BACKGROUND RECITALS

 

A.            Capitalized terms not otherwise defined when they first appear are
defined in Appendix I, and the rules of construction set forth in Appendix I
apply thereto and hereto.

 

B.            This Lease is made with reference to the following real and
personal property (collectively, the “Leased Property”):

 

(1)           All that certain real property located in Exton, Pennsylvania, as
more particularly described in Exhibit A hereto, comprising approximately 21.098
acres, more or less, together with all Appurtenant Rights thereto (the “Land”). 
Approximately 14.674 acres of the Land, as more particularly described on
Exhibit B hereto, is owned by Landlord (the “Existing Land”) and approximately
6.424 acres of the Land, as more particularly described on Exhibit C hereto, is
owned by Marsh Creek Realty III Business Trust and will be purchased by Landlord
as set forth in this Lease (the “Additional Land”);

 

(2)           The Improvements to be constructed by Landlord on the Land and
fixtures affixed thereto (including, without limitation, the Base Project Work
and the Tenant Improvements) (collectively, together with any Alterations,
additions or changes thereto, the “Building”), together with all parking
facilities, driveways, walkways, signage, drainage facilities, landscaped areas,
and other site improvements located on the Land (the Land, the Improvements and
the fixtures being hereinafter collectively referred to as the “Real Property”);

 

(3)           All fixtures, equipment, furniture, furnishings and appliances
attached to or otherwise used in connection with, the Real Property to the
extent being furnished and installed by Landlord pursuant to the Work Letter and
this Lease (the “Personalty”); and

 

(4)           The non-exclusive right and benefit to use the Common Facilities
of the Park which inure to the benefit of the owners of Lots within the Park,
established by that certain Amended and Restated Declaration of Easements and
Protective Covenants and Restrictions for Eagleview Corporate Center dated as of
July 12, 1990, last amended by Eighth Amendment dated November 13, 2006 (the
“Declaration”).

 

C.            The Real Property is located within the Park.

 

D.            Landlord desires to acquire the Additional Land, construct the
Improvements and lease the Real Property to Tenant and Tenant desires to Lease
the Real Property from Landlord, subject to and upon the terms and conditions
contained in this Lease.

 

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TERMS AND CONDITIONS

 

In consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:

 

1.             Demise.

 

(a)           Landlord leases to Tenant, and Tenant leases from Landlord, the
Leased Property, subject to (i) the Permitted Encumbrances and (ii) the
obligations of Landlord to complete the Base Project Work and the Tenant
Improvements in accordance with this Lease, including without limitation, the
requirements set forth in the Work Letter.

 

(b)           At all times during the Term, Tenant shall have the exclusive
right to use all of the parking spaces located on the Land, which shall not be
less than 500, but in no event less than the number of parking spaces required
by the approvals for the Project issued by applicable Governmental Authorities
(the “Tenant Parking Facilities”).  Such parking spaces shall be reserved for
Tenant’s exclusive use and shall be installed by Landlord, along with signage,
curbing and striping at Landlord’s sole cost and expense as part of the Base
Project Work pursuant to the Work Letter.

 

(c)           Landlord shall deliver the Leased Property to Tenant with the Base
Project Work and Tenant Improvements “Substantially Complete” (as defined in
Section 4(b) of the Work Letter).

 

(d)           Within ninety (90) days after the Commencement Date, Architect
shall measure the Building (using the BOMA/ANSI Z65.1-1996 Standard), which
measurement shall be final and binding upon the Parties.  Landlord and Tenant
shall share equally in the fees of Architect in such measurement. Upon
resolution of the measurement of the Building, all terms of this Lease dependent
upon such measurement (e.g., the Improvement Allowance) shall be amended to
reflect the actual measurement of the Building, retroactive to the Commencement
Date, and any underpayment (or overpayment, as the case may be), if any,
resulting from any term of this Lease subject to adjustment pursuant to this
Section shall be paid by the Party owing the amount to the other Party within
thirty (30) days thereafter.

 

(e)           The background recitals set forth above are true and correct and
are hereby incorporated into this Lease.

 

2.             Project Conditions and Termination Rights.

 

(a)           Landlord acknowledges that the construction, completion and
delivery to Tenant of the Leased Property (including without limitation the
Substantial Completion of all of the Base Project Work and TI Work, as those
terms are defined in Section 2(a) and Section 3(c)(iii), respectively, in the
Work Letter) within the time period provided in the Schedule (as defined in
Section 1(b) of the Work Letter) is of the essence of this Lease, and is vital
to Tenant’s willingness to enter into this Lease.  In order to assure Tenant of
Landlord’s diligence in prosecuting the actions necessary to achieve such timely
construction, completion and delivery of the Leased Property, Landlord and
Tenant have agreed to stipulate certain conditions

 

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precedent to Tenant’s further obligations under this Lease, and to establish
certain milestones to be satisfied by Landlord by certain dates, as set forth in
this Section.  Accordingly, as material inducement to Tenant to enter into this
Lease, and in consideration of the covenants herein contained, Landlord and
Tenant agree as follows that, notwithstanding anything to the contrary contained
in this Lease or any of the Exhibits hereto and in addition to any other
provisions of this Lease and any of the Exhibits hereto providing any rights
(including without limitation any right of termination) concerning any other
matters:

 

(i)            Tenant shall have the option, in its sole discretion, to
terminate this Lease by Notice to Landlord if (A) Landlord fails to satisfy the
conditions set forth on Part A of Exhibit G attached hereto (“Preliminary
Conditions”) on or before the date for the satisfaction thereof specified in
Part A of Exhibit G, and (B) Tenant shall have given Landlord Notice of
Landlord’s failure to satisfy such applicable Preliminary Condition and Landlord
shall have failed to satisfy such applicable Preliminary Condition within thirty
(30) days following Landlord’s receipt of such Notice.

 

(ii)           Prior to Landlord completing the construction of the foundations
for the Building as certified by the Architect, Tenant shall have the option, in
its sole discretion, to terminate this Lease by Notice to Landlord if
(A) Landlord fails to satisfy the milestones set forth on Part B of Exhibit G
attached hereto (“Milestones” and each a “Milestone”) on or before the date for
the satisfaction thereof specified in Part B of Exhibit G, as extended by reason
of Unavoidable Delays as defined in, and in accordance with, the Work Letter,
(B) Tenant, acting in good faith and reasonably, determines that the failure of
such Milestone (alone or taken in consideration with other factors) is
reasonably likely to result in a failure on the part of Landlord to achieve
Substantial Completion of the Base Project Work and/or Substantial Completion of
the Tenant Improvements on or before the applicable Outside Delivery Date (as
defined in Section 4(e) of the Work Letter) therefor set forth in the Work
Letter, and (C) in the good faith determination of Tenant, Landlord shall have
failed, within thirty (30) days following Landlord’s receipt of such Notice, to
have provided to Tenant adequate and reasonably substantiated assurances, that
(1) Landlord will be able to satisfy the applicable Milestone within a
reasonable and specific time, and (2) that the delay in satisfying the
applicable Milestone will not, in fact, cause Landlord to fail to achieve
Substantial Completion of the Base Project Work and/or Substantial Completion of
the Tenant Improvements on or before the applicable Outside Delivery Date
therefor set forth in the Work Letter.

 

(iii)          After Landlord completes the construction of the foundations for
the Building as certified by the Architect, Tenant shall have the option, in its
sole discretion, to terminate this Lease as set forth in Section 4(f) of the
Work Letter.

 

(b)           If Tenant exercises any termination option provided to Tenant
under this Section 2, this Lease shall terminate effective upon issuance of such
Notice and thereupon this Lease shall be null and void, and neither party shall
have any further liability or obligation to the other under or on account of
this Lease excepting only any provisions hereof expressly surviving the
termination of this Lease.  None of the notice and cure periods applicable to a
Landlord Default under Section 25(a) shall be applicable to any failure by
Landlord under this Section 2.  In addition, any such right of termination not
exercised by Tenant by Notice issued to Landlord

 

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within fifteen (15) days following the date established for a Milestone giving
rise to such right of termination, shall be deemed waived by Tenant.

 

3.             Term.

 

(a)           Subject to the provisions of this Lease, Tenant shall have and
hold the Leased Property for the Term unless sooner terminated or extended as
hereinafter expressly provided in this Lease.

 

(b)           If no Material Monetary Event of Default exists on the Basic Term
Expiration Date or on the last day of the first Renewal Term, as applicable, and
there has occurred: (1) no Event of Default as described in
Section 24(a)(iii) and (iv) (relating to bankruptcy); and (2) no Event of
Default on account of a breach by Tenant of its covenants in the Lease with
respect to the prohibition of transfers without Landlord’s consent; then Tenant
may renew the Term for two (2) additional terms having an aggregate term of not
more than ten (10) years (each a “Renewal Term”, and collectively the “Renewal
Terms”).  The first Renewal Term shall have a term of not less than three
(3) years or more than seven (7) years as elected by Tenant in its sole
discretion, and the second Renewal Term shall have a term equal to ten
(10) years less the number of years of the first Renewal Term.  A Renewal Term
shall commence the day after the Basic Term Expiration Date (or the expiration
date of the then expiring Renewal Term, as applicable).  Each renewal option, if
exercised by Tenant, shall be exercised by Tenant only for the entire Leased
Property and upon Notice to Landlord sent not less than one (1) year before the
date on which the then current Basic Term or Renewal Term is to end.  Such
Notice for each Renewal Term shall contain Tenant’s election regarding the
number of years of such Renewal Term.  Either Party, upon request of the other,
will execute, acknowledge and deliver to the other Party by no later than ten
(10) Business Days prior to commencement of the applicable Renewal Term, in form
suitable for recording, an instrument confirming that (i) such option has been
effectively exercised, (ii) the extended expiration date of the Term, and
(iii) the remaining years, if any, available pursuant to options to renew
granted under this Section.

 

(c)           Though this Lease is effective from the Effective Date, no Rent
will be payable, no occupancy shall be presumed and the Term shall not begin
until the later to occur of (i) January 16, 2013, and (ii) thirty (30) days
after Substantial Completion of the Project under the terms of the Work Letter
(the “Commencement Date”).  At the request of Landlord or Tenant (collectively,
the “Parties”, and each a “Party”), the Parties agree to execute and acknowledge
a recordable document confirming the Commencement Date and Expiration Date. If
prior to the Commencement Date following Substantial Completion of the Tenant
Improvements by Landlord, Tenant uses the Leased Property for installation of
cabling, furnishings and the like, Tenant will be responsible for Operating
Expenses and utilities during such preliminary period.

 

4.             Rent.

 

(a)           (i)            Tenant shall pay the Basic Rent on a monthly basis
in advance to Landlord (or to Lender, if Tenant receives Notice to do so from
either Landlord or Lender) commencing on the Commencement Date and on each
subsequent Basic Rent Payment Date during the Term in lawful money of the United
States of America in immediately available federal funds before

 

4

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11:00 A.M., New York time, to such account in such bank as Landlord (or Lender,
if Tenant receives a Notice to pay Basic Rent directly to Lender) may from time
to time designate to Tenant in writing.  Basic Rent shall be determined in
accordance with the provisions set forth on Exhibit H.  If the Commencement Date
falls on a day other than the first day of a calendar month, the Basic Rent
shall be due and payable for such month, apportioned on a per diem basis for the
period between the Commencement Date and the first day of the next first full
calendar month in the Term and such apportioned sum shall be paid within five
(5) Business Days following the Commencement Date.

 

(ii)           The parties acknowledge that since the Basic Rent is based on
actual costs incurred to complete the Project, the actual Basic Rent may not be
known until after Substantial Completion of the Project. Accordingly, the
parties agree that if the Basic Rent is not determined before the Commencement
Date, then Tenant shall pay an estimated Basic Rent based on an estimated Basic
Rent as determined in accordance with the procedures set forth in this
Section 4(a)(ii) (the “Estimated Basic Rent”).  Subject to reconciliation as set
forth in Section 4(a)(iii) below, no later than sixty (60) days before the
Commencement Date, Landlord shall send Tenant Notice of Landlord’s reasonable
estimate of the Basic Rent showing in detail, with supporting documentation,
Landlord’s reasonable determination of the components of the Basic Rent, which
Notice shall contain a statement in bold type and capital letters stating
“FAILURE TO RESPOND TO THIS NOTICE WITHIN FIFTEEN (15) DAYS SHALL BE A DEEMED
APPROVAL BY TENANT” as a condition to the effectiveness of such Notice.  Tenant
shall have fifteen (15) days after receipt of Landlord’s estimate to accept or
reject Landlord’s estimate of the Basic Rent.  If Tenant fails to send Notice to
Landlord of its rejection, Tenant shall be deemed to have accepted Landlord’s
estimate.  If Tenant rejects Landlord’s estimate, it must send Notice to
Landlord setting forth the reasons for such rejection or requesting such
additional information that Tenant may need to better analyze Landlord’s
estimate. For the fifteen (15) day period after Landlord receives Tenant’s
rejection Notice, the parties shall meet and negotiate in good faith to agree on
the Estimated Basic Rent.  If no agreement is reached after such period, then
Tenant shall pay to Landlord the amount of Estimated Basic Rent which is not in
dispute, and within ten (10) days of the dispute being resolved, Tenant shall
pay any additional Estimated Basic Rent to Landlord.

 

(iii)          If the actual Basic Rent is not known and agreed to prior to the
Commencement Date, then, subject to Section 4(a)(ii) above, in the event of a
dispute, Tenant shall pay the Estimated Basic Rent until the actual Basic Rent
is determined.  During a period of not more than sixty (60) days after the
Substantial Completion of the Project, the parties agree to cooperate with one
another and to meet and negotiate in good faith to agree on the Estimated Basic
Rent based on the final and actual components of Basic Rent (as set forth on
Exhibit H).  Once the final Basic Rent is determined, if such actual Basic Rent
is higher than the Estimated Basic Rent, Tenant will pay to Landlord within ten
(10) days of such determination, the difference between the Estimated Basic Rent
and the actual Basic Rent; and if such actual Basic Rent is lower than the
Estimated Basic Rent, Landlord shall refund to Tenant within ten (10) days of
such determination, the difference between the actual Basic Rent and the
Estimated Basic Rent.  Once the final Basic Rent is determined, the parties
shall enter into a Rent Determination Certificate that will set forth the agreed
to Basic Rent.

 

5

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(iv)          On the first (1st) day of the second Lease Year of the Term, and
on the same day of each subsequent Lease Year, the Basic Rent for the Leased
Property shall increase by fifty cents ($0.50) per RSF above the Basic Rent
payable in the immediately preceding Lease Year.

 

(b)           (i)            Basic Rent for each Renewal Term shall be an amount
equal to ninety-five percent (95%) of the annual Fair Market Rental Value for
the Leased Property.

 

(ii)           Basic Rent that accrues and for which Tenant becomes liable for
any partial calendar month at the beginning of a Renewal Term shall be payable
in advance on the first Basic Rent Payment Date of such Renewal Term. 
Thereafter, during any Renewal Term, Tenant shall be liable for, and shall pay,
the Basic Rent on each Basic Rent Payment Date (or, if earlier on the date such
Renewal Term or the Lease expires or is terminated) during such Renewal Term.

 

(c)           In addition, Tenant shall pay Operating Expenses and Taxes in
accordance with Section 7, and utilities for the Leased Property and all other
Additional Rent directly to the Person entitled to payment thereof within the
time periods set forth herein, and if no such period is established, then within
thirty (30) days of receipt of a reasonably detailed statement as to the amount
and nature of such Additional Rent.  If Tenant fails to pay or discharge any
Additional Rent in accordance with the terms of this Lease, Landlord may
exercise all rights and remedies provided for herein or by law or otherwise in
the case of nonpayment of Basic Rent.

 

(d)           Tenant shall also pay to Landlord on demand, as Additional Rent,
interest at the Overdue Rate on all overdue installments of Basic Rent and
Additional Rent from the expiration of any applicable grace or cure periods,
until paid in full.

 

(e)           To defray Landlord’s expense in handling and processing a
delinquent payment of Basic Rent or Additional Rent and to compensate Landlord
for its loss of the use of such delinquent payment of Basic Rent or Additional
Rent, Tenant shall pay to Landlord on demand, as Additional Rent, a late payment
fee on any amount not paid when due equal to the greater of (i) two percent (2%)
of any overdue amount and (ii) five thousand dollars ($5,000); provided however,
that with respect to any installment of Basic Rent or Additional Rent which is
not paid when due, Landlord shall not impose a late payment fee unless Tenant
fails to make such payment within ten (10) days after Landlord’s issuance of
Notice of non-payment, subject however, to the limitation that after Landlord
has issued two (2) Notices of non-payment of either Basic Rent, Additional Rent
or both within a twelve (12) month period, Tenant shall not be entitled to
Notice prior to the assessment of the late payment fee for any delinquent
payment during such twelve (12) month period.

 

(f)            Should the Term commence at any time other than the first day or
terminate on other than the last day of a calendar month or calendar year the
amount of Basic Rent and Additional Rent due from Tenant shall be
proportionately adjusted based on that portion of the month or year that this
Lease was in effect.

 

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5.             Improvements.

 

(a)           Base Project Work.  The Base Project Work shall be performed and
completed by Landlord, at Landlord’s sole expense, in accordance with the
provisions of the Work Letter.

 

(b)           Tenant Improvements.

 

(i)            The Tenant Improvements will be constructed by Landlord for
Tenant’s use and the costs of performing such work shall be apportioned between
Landlord and Tenant as set forth in the Work Letter.  The Work Letter also sets
forth the obligations and responsibilities of Tenant and Landlord for the design
and construction of the Tenant Improvements.

 

(ii)           In no event shall Tenant be obligated to accept delivery of the
Leased Property or portions thereof prior to Substantial Completion of the
Project (as defined in Section 4(b) of the Work Letter) and in no event shall
Tenant be obligated to pay Rent before January 16, 2013.

 

(c)           Reference is made to the Work Letter for provisions concerning the
obligations of Landlord for certain work and improvements for Tenant’s benefit,
including without limitation certain outside date or dates for Landlord’s
completion of such work and improvements, and the liabilities and obligations of
Landlord in the event of Landlord’s failure to achieve completion of such work,
and Tenant’s obligations concerning such work, all of which are incorporated
herein as though fully set forth herein.

 

(d)           Landlord agrees to provide Tenant with an allowance up to the sum
of Forty-Five Dollars ($45.00) per RSF of the Building (the “Improvement
Allowance”), all or a part of which Tenant has the option to use or not use
pursuant to Section 3(g)(ii) of the Work Letter, to provide funding for the
Tenant Improvements and to reimburse Tenant for certain other costs and expenses
incurred or to be incurred by Tenant with respect to this Lease and the design,
construction and occupancy of the Leased Property, as more particularly set
forth in the Work Letter.  The Improvement Allowance, or so much thereof as
shall be drawn by Tenant, shall be included in the Project Cost in determining
the Basic Rent hereunder.

 

(e)           The Tenant Improvements (excluding any Tenant’s Property
pertaining to Tenant’s business operations, and any signs and other items
containing Tenant’s tradenames or other proprietary marks or names) shall at all
times be the property of Landlord automatically and without requiring further
action by Landlord or Tenant.

 

6.             Use. Tenant may use the Leased Property for general office use,
laboratory and research use, prototype manufacturing and all uses incidental and
ancillary to such use, and for any other lawful use (the “Permitted Use”). 
Notwithstanding anything to the contrary provided in this Section 6, Tenant
shall not (a) use or occupy the Leased Property, or (b) knowingly permit the use
or occupancy of the Leased Property, in a way that would:

 

(i)            violate any applicable certificate of occupancy for the Leased
Property or other Legal Requirement applicable to the Leased Property;

 

(ii)           make void or voidable any Policy of insurance then in force with
respect to the Leased Property, or render it impossible to obtain Casualty or
other insurance thereon

 

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required to be furnished by Tenant under this Lease; provided, however, Landlord
acknowledges and agrees that use of the Leased Property for the Permitted Use
will not violate this covenant.

 

(iii)          cause structural or other damage to the Leased Property, or
constitute a private or public nuisance or waste;

 

(iv)          violate the provisions of Section 13 hereof;

 

(v)           violate any of the use restrictions contained in the Declaration;

 

(vi)          violate the provisions of the Industrial Waste Discharge Rider
attached to this Lease; or

 

(vii)         discharge wastewater of a volume in excess of 5,600 gallons per
day.

 

7.             Operating Expenses and Taxes.

 

(a)           Operating Expenses.

 

(i)            Commencing on or prior to the date that is ninety (90) days
before the Commencement Date, and then at least ninety (90) days prior to each
subsequent calendar year during the Term, a proposed Operating Budget (the
“Operating Budget”) shall be prepared by Landlord (reasonably based on the
actual Operating Expenses for the preceding calendar year (except for the first
Operating Budget) and Landlord’s reasonable projections of any anticipated
increases or decreases thereof) and submitted in draft form (with reasonable
detail sufficient to inform Tenant of the nature and amount of proposed
expenditures) to Tenant for review. All Operating Expenses shall be determined
in accordance with GAAP.  Accompanying such proposed Operating Budget, Landlord
shall submit to Tenant a calculation showing Tenant’s monthly Operating Expense
payment on the basis of such proposed Operating Budget, which payment shall
equal one twelfth (1/12th) of the annual Operating Budget (the “Monthly
Operating Expense Estimate”). Tenant shall provide to Landlord any questions,
comments or proposed revisions to such proposed Operating Budget within twenty
(20) days after receipt thereof, and Landlord and Tenant shall cooperate in good
faith to address any questions, comments or proposed revisions presented by
Tenant.  The final Operating Budget shall be the Operating Budget submitted by
Landlord to Tenant which accompanies Landlord’s response to Tenant’s questions,
comments or proposed revisions to the proposed Operating Budget and shall be
subject to adjustment as set forth in Sections 7(a)(iii) and 7(a)(iv). Landlord
shall submit to Tenant a calculation showing Tenant’s Monthly Operating Expense
Estimate on the basis of such final Operating Budget.

 

(ii)           Beginning on the Commencement Date and on the first (1st) day of
the first full month after the Commencement Date and continuing thereafter
during the Term on the first day of each month, Tenant will pay Landlord, as
Additional Rent, the Monthly Operating Expense Estimate.  The Monthly Operating
Expense Estimate for a period less than a full calendar month shall be duly
prorated.  Notwithstanding the foregoing, on the date of execution of this
Lease, Tenant shall pay to Landlord on account of Operating Expenses for the
first month of the Term, Landlord’s good faith estimate of one twelfth of the
expected annual Operating

 

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Expenses.  Such payment shall be credited against the actual monthly installment
for the first full month of the Term when the Monthly Operating Expense Estimate
is established.

 

(iii)          Within ninety (90) days after the close of each calendar year,
Landlord shall deliver to Tenant an itemized statement prepared by Landlord’s
property management company or chief operating officer, or by a certified public
accountant (“Landlord’s Statement”) showing in reasonable detail the (A) actual
Operating Expenses for the previous calendar year broken down by component
expenses; (B) the amount paid by Tenant during the calendar year towards
Operating Expenses; and (C) the amount Tenant owes to Landlord, or the amount of
the refund Landlord owes to Tenant on account of any underpayment or overpayment
by Tenant.  Any such amount due from Tenant to Landlord shall be paid within
thirty (30) days after receipt of the most recent Landlord’s Statement.  Any
such refund due from Landlord to Tenant shall be credited against the next due
payment of Operating Expenses or, if at the end of the Term, refunded to Tenant.

 

(iv)          Any Landlord’s Statement or other Notice from Landlord pursuant to
this Section 7 shall be deemed approved by Tenant as correct unless Tenant shall
notify Landlord in writing within two (2) years following receipt that it
disputes the correctness of the Landlord’s Statement or other Notice, specifying
in reasonable detail the basis for such assertion.  Within such two (2) year
period (or within ninety (90) days after Tenant sends such Notice of dispute to
Landlord, whichever is longer), Tenant and its authorized representatives shall
have the right, at its sole cost and expense, to inspect and/or audit Landlord’s
books and records at Landlord’s place of business or such other place Landlord
regularly maintains such books and records (in either case in the Philadelphia
metropolitan area) with respect to the items of Operating Expenses, the
calculation of Operating Expenses, and Tenant’s Monthly Operating Expense
Estimate set forth on a Landlord’s Statement. Landlord shall maintain reasonable
books and records with respect to the Operating Expenses.  If Tenant’s audit
reveals recurring or systemic errors or overcharges that relate to periods
earlier than two (2) years before Tenant’s receipt of Landlord’s Statement, then
Tenant shall be permitted to dispute and audit such charges occurring earlier
than such two (2) year period.  If, as a result of an inspection of Landlord’s
books and records or an audit, it is determined that Landlord has overcharged
Tenant, Landlord shall provide Tenant with a credit against Tenant’s next
payment(s) of Basic Rent (or, if the Term of the Lease has ended, pay Tenant
directly) the amount of such overcharge plus any taxes thereon not otherwise
recovered by Tenant at the Overdue Rate from the date such overcharge and taxes,
if applicable, were paid by Tenant. Notwithstanding the performance of any
dispute or audit, Tenant shall continue to make payments in accordance with the
last Operating Budget pending the results of such audit.  If the results of any
audit reveal that Landlord overstated Operating Expenses by more than four
percent (4.0%), then Landlord shall pay the reasonable cost of such audit;
provided, however, if the compensation for the auditor who performed such audit
was based on a percentage of savings or commission basis, then Landlord shall
not be obligated to pay such cost.

 

(v)           Landlord’s failure to submit a bill (whether actual or estimated)
for Operating Expenses to Tenant within one hundred eighty (180) days after the
expiration of the calendar year in which such Operating Expenses were incurred,
shall relieve Tenant of its obligation to pay such Operating Expenses, except
that the foregoing shall not apply to a good faith, erroneous omission from a
Landlord’s Statement of particular items which should have

 

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been included in Operating Expenses, which are brought to Tenant’s attention as
part of a subsequent Landlord’s Statement.

 

(vi)          Notwithstanding any provision to the contrary in this Lease,
Tenant may, from time-to-time during the Term and following not less than six
(6) months prior notice to Landlord, elect to assume responsibility (and either
perform such services itself or contract with a third party provider) for all
property management maintenance and repair obligations otherwise the
responsibility of Landlord hereunder and otherwise payable by Tenant as
Operating Expenses if Tenant, in its reasonable discretion, determines that
Landlord (or Landlord’s property manager) has persistently and repeatedly failed
to maintain the Leased Property in a manner consistent with a Class “A”
office/laboratory building in the Philadelphia metropolitan area or that the
costs charged for such services exceed then-market costs for such services. If
Tenant desires to make such election due solely to Tenant’s dissatisfaction with
the standard of service provided by Landlord, prior to making such election,
Tenant shall provide Landlord with Notice of the specific incidents by which
Landlord has failed to provide service appropriate for a Class A
office/laboratory building, and Landlord shall provide Tenant with Notice of
Landlord’s proposed response to remedy such failures, and Landlord shall have a
period of sixty (60) days to implement such responses.  If despite such remedial
efforts, Landlord continues to fail to meet the standard of service appropriate
for a Class A office/laboratory building, then Tenant shall have the right to
assume responsibility for management of the Building, or hire a reputable
property management firm with experience in managing Class A office and
laboratory buildings to do so.  If Tenant makes such election due solely to
Tenant’s dissatisfaction with the costs of Landlord’s services, then if Tenant
has obtained an offer from a third-party property manager with the required
qualifications described above to deliver such services to Tenant which Tenant
is willing to accept (a “New Offer”) before Tenant accepts such New Offer, it
shall send a Notice to Landlord of such New Offer and Landlord shall have ten
(10) days from its receipt of such New Offer to match the New Offer.  If
Landlord matches the New Offer, then Tenant shall rescind its election and
Landlord shall continue to manage the Leased Property on the terms of the New
Offer.  If Landlord refuses to match or fails to accept the New Offer by Notice
to Tenant within such ten (10) day period, Landlord shall be deemed to have
rejected the New Offer and Tenant shall be free to accept such New Offer.  If
Tenant makes an election to assume responsibility for property management,
maintenance and repair obligations, or hires a third party provider to do so,
Tenant agrees to indemnify, defend and hold each Landlord Indemnified Party
harmless from any loss, costs and damages (including reasonable attorney’s fees
and costs) suffered by Landlord or any Landlord Indemnified Party arising from
any negligent act or omission of Tenant or such third party provider in
connection with the performance of such property management, maintenance and
repair obligations, and to provide Landlord with evidence of insurance which is
generally provided by property management companies for the benefit of owners of
commercial office and laboratory buildings, which insurance shall name Landlord,
and any Lender, as additional insureds, and which insurance shall not be subject
to cancellation or modification without thirty (30) days’ prior Notice to
Landlord and Lender.  Any property management agreement between Tenant and such
third party provider shall be fully subordinated to the Mortgage on terms
reasonably acceptable to Lender, Tenant and such third party provider, and
terminable without penalty at the election of Lender.

 

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(b)           Taxes.

 

(i)            No later than thirty (30) days after its receipt, Landlord shall
deliver to Tenant copies of all Tax bills, invoices and notices regarding the
Leased Property.  In addition, Landlord shall promptly deliver to Tenant
following receipt true and complete copies of all notices received by Landlord
concerning any actual or proposed changes in the assessment of the Leased
Property, or any portion thereof.

 

(ii)           Landlord covenants to pay all Taxes before such Taxes are due and
in all events by the date required for Landlord to receive the maximum discount
available by the relevant Governmental Authority.  Tenant shall not be obligated
to pay, and Landlord shall pay, any and all penalties, late fees or other
charges assessed on account of any Taxes not being paid in accordance with the
preceding sentence. Subject to Tenant’s rights to contest in accordance with
Section 9, Tenant shall reimburse Landlord for any Taxes levied or assessed
against the Leased Property applicable to the Term within sixty (60) days after
Tenant’s receipt of an invoice from Landlord seeking reimbursement, together
with a copy of the paid bill for such Taxes issued by the applicable
Governmental Authority.  Tenant shall not be obligated for any Taxes applicable
to time periods before or after the Term and any Taxes reimbursed by Tenant
which are applicable to time periods before or after the Term shall be refunded
to Tenant by Landlord within thirty (30) days of the end of the Term.

 

(iii)          Nothing in this Lease shall require Tenant to pay any franchise,
excise, estate, inheritance, succession, transfer (other than as set forth
above), net income or profits taxes of Landlord, any taxes imposed by any
Governmental Authority on, or measured by, the net income of Landlord, unless
any such tax is in lieu of or a substitute for any other tax or assessment upon
or with respect to the Leased Property, or in lieu of any increase in any such
tax or assessment upon or with respect to the Leased Property, in which case, to
the extent it is a substitute for another tax or assessment upon or with respect
to the Leased Property, or in lieu of any increase in any such tax or assessment
upon or with respect to the Leased Property, such tax would be payable by Tenant
hereunder.

 

(iv)          Except for Taxes Tenant pays in installments, Landlord and Tenant
shall prorate on a day-for-day basis Taxes paid by Tenant as of the Commencement
Date and as of the date on which this Lease terminates.

 

(v)           Tenant shall also pay before any penalties or fines are assessed
to the appropriate Governmental Authority any use and occupancy tax in
connection with Tenant’s use of the Leased Property.  In the event Landlord is
required by law to collect such tax, Tenant shall pay such use and occupancy tax
to Landlord or its designee as Additional Rent within thirty (30) days of
demand.  With respect to any Taxes which Landlord requires that Tenant pay to
Landlord or which are by virtue of Legal Requirements required to be paid to
Landlord, Landlord shall remit any amounts so paid to Landlord to the
appropriate Governmental Authority and return a receipt for or other evidence of
such payment to Tenant no later than the day prior to the delinquency date
therefor.  Any payments received by Landlord from a Governmental Authority
representing a refund or return of an overpayment of Taxes paid by Tenant, shall
be promptly remitted by Landlord to Tenant.

 

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8.             Compliance with Legal Requirements.

 

(a)           Tenant shall, at its sole cost and expense, promptly comply with
all Legal Requirements affecting the Leased Property, insofar as any thereof
relate to or affect Tenant’s specific use or occupancy of the Leased Property
(other than general office use and uses ancillary thereto) or relate to any of
Tenant’s Alterations.

 

(b)           If, from and after the Commencement Date, any change in Legal
Requirements require any alteration, renovation, improvement or replacement of
all or any part of the Leased Property (each a “Code Modification”), Landlord
shall make such Code Modification at Landlord’s cost and expense, and Tenant
shall pay for such costs as provided in Section 7(a) above to the extent that
such costs are considered Operating Expenses under this Lease.

 

(c)           Notwithstanding any language to the contrary in this Section 8, in
no event shall Tenant be required to make any structural changes to the Leased
Property, and if any are required as part of a Code Modification or a change in
Legal Requirements after the Commencement Date, for any reason, such work shall
be performed by Landlord, and Tenant shall only pay for such costs as provided
in Section 7(a) above to the extent that such costs are considered Operating
Expenses under this Lease.  To the extent that such costs are incurred due to a
required Code Modification resulting from Tenant’s laboratory use or other
specialty use other than general office use or uses ancillary thereto, such
costs shall be reimbursed as part of Operating Expenses at the time incurred.

 

(d)           Landlord shall, at its sole cost and expense, deliver the Leased
Property in compliance with all Legal Requirements, including the Americans with
Disabilities Act (“ADA”).

 

9.             Right to Contest.

 

After prior Notice to Landlord, Tenant may contest (including through abatement
proceedings), at its sole expense, by appropriate legal proceedings, promptly
initiated and conducted in good faith and with due diligence to a final
settlement or conclusion, the amount or validity or application of any Taxes,
Liens, and/or any Legal Requirement affecting the Leased Property, and postpone
payment of or compliance with the same during the pendency of such contest if
(a) the commencement and continuation of such proceedings shall suspend the
collection thereof from, and suspend the enforcement thereof against Landlord
and the Leased Property, (b) no part or interest of the Leased Property, nor any
Basic Rent or Additional Rent or this Lease shall be interfered with or shall be
in danger of being sold, forfeited, attached, terminated, cancelled or lost,
(c) at no time during the permitted contest shall there be a risk of the
imposition of civil or criminal liability or penalty on Landlord for failure to
comply therewith, and (d) Tenant shall satisfy any Legal Requirements incident
to such contest, including, if required, that the Taxes be paid in full or a
Lien be bonded with the applicable court before being contested. Tenant shall
promptly pay any judgments or decrees entered against Tenant or the Leased
Property, and all fees or expenses incurred by Tenant in connection with such
contest.  Promptly after the final determination of such contest, Tenant shall
fully pay and discharge any amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
whether technically assessed against Tenant or

 

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Landlord, together with any penalties, costs, fines, interest, fees and expenses
thereof or in connection therewith, and Tenant shall perform all acts the
performance of which shall be ordered or decreed because of the final
determination of such contest, which obligations shall survive the end of the
Term.

 

10.          Liens.  Subject to Tenant’s rights to contest in accordance with
Section 9, during the Term, Tenant will, at its sole expense, promptly remove
and discharge of record, by bond or otherwise, any Liens in or upon the Leased
Property relating to contractual obligations of Tenant or other acts or
omissions of Tenant, its agents and contractors, and their subcontractors,
sub-subcontractors and any other person who, under applicable law, has standing
to file a mechanic’s lien no later than thirty (30) days after Tenant receives
Notice of the filing of any such Lien.  If Tenant fails to discharge any such
Lien as required by the prior sentence, then Landlord may discharge such Lien by
payment or bond or both, and Tenant will repay to Landlord, upon demand, all
amounts incurred by Landlord therefor, and also any fees and expenses incurred
by Landlord in connection therewith, together with interest on all such amounts
calculated at the Overdue Rate from the date such are incurred by Landlord until
such are paid by Tenant.  Tenant’s obligations in this Section 10 shall survive
the end of the Term.

 

11.          Subordination.

 

(a)           This Lease and Tenant’s interest and rights hereunder are and
shall be subject and subordinate at all times to the lien of any first Mortgage,
hereafter created on or against the Leased Property, and all amendments,
restatements, renewals, modifications, consolidations, refinancing, assignments
and extensions thereof, provided that the Lender has executed, acknowledged and
delivered to Tenant a commercially reasonable Subordination, Attornment and
Non-Disturbance Agreement (“SNDA”), substantially in the form of that attached
as Exhibit J to this Lease, or as otherwise acceptable to Lender and Tenant,
which provides that: (i) Tenant’s possession of the Leased Property and other
rights hereunder shall not be disturbed in any proceeding to foreclose the
mortgage or in any other action instituted in connection with such mortgage,
(ii) Tenant shall not be named as a defendant in any foreclosure action or
proceeding which may be instituted by the holder of such mortgage, and (iii) if
the Lender or any other person acquires title to the Leased Property through
foreclosure or otherwise, this Lease shall continue in full force and effect as
a direct lease between Tenant and the new owner, and the new owner shall assume
and perform all of the terms, covenants and conditions of this Lease.  Tenant
agrees upon demand to execute, acknowledge and deliver any such SNDA, provided
that no such instrument shall alter Tenant’s rights and obligations under this
Lease.  Notwithstanding the foregoing, any such Lender may at any time
subordinate its Mortgage to this Lease, without Tenant’s consent, by Notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
Mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such Mortgage and had been assigned to such Lender.

 

(b)           Notwithstanding the foregoing, if any Lender requires this Lease
to be subordinate to its Mortgage and, at such time, Substantial Completion of
the Base Project Work and the Tenant Improvements (with any punchlist fully
performed) has not occurred and the Improvement Allowance has not been fully
funded by Landlord or any other funding or payment

 

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obligations of Landlord under this Lease have not been fully performed (each of
the foregoing an “Unperformed Landlord Obligation”), then Landlord shall obtain
an SNDA that satisfies Tenant’s SNDA Requirements.  If such Lender requires an
SNDA that does not satisfy Tenant’s SNDA Requirements, Tenant may refuse to
enter into such SNDA and in such event this Lease shall not be subordinate to
such Lender’s Mortgage.

 

(c)           Tenant shall attorn, from time to time, to the Lender under each
Mortgage and/or the Lender of such subsequent Mortgage, or any purchaser or
transferee of the Leased Property (including, a transferee in foreclosure or
pursuant to a deed in lieu of foreclosure), or any Person that succeeds to all
or any part of Landlord’s interest in the Leased Property, for the remainder of
the Term, if such holder or such purchaser or transferee, shall then be entitled
to possession of the Leased Property subject to compliance with the provisions
of this Lease and the applicable SNDA.  The provisions of this Subsection shall
inure to the benefit of such Lender or such purchaser or transferee, shall apply
notwithstanding that, as a matter of law, this Lease may terminate upon the
foreclosure of the Mortgage (in which event the parties shall execute a new
lease for the remainder of the Term on the same terms set forth herein), shall
be self-operative upon any such demand, and no further instrument shall be
required to give effect to said provisions. Each such party, however, upon
demand of the other, shall execute, from time to time, instruments to confirm
the foregoing provisions hereof, reasonably satisfactory to the requesting
party, to acknowledge the subordination, non-disturbance and attornment as are
provided herein and to set forth the terms and conditions of its tenancy.

 

12.          Indemnification.

 

(a)           Except to the extent that such loss, costs or damages were caused
by negligence or willful misconduct of Landlord, its employees, agents or
contractors, Tenant hereby agrees to indemnify, defend and hold each Landlord
Indemnified Party harmless from any loss, costs and damages (including
reasonable attorney’s fees and costs) suffered by Landlord or any Landlord
Indemnified Party, if, and then only to the extent same is the result of (i) any
claim by a third party, its agents, employees or contractors arising from
Tenant’s use or occupancy of the Leased Property; (ii) an Event of Default by
Tenant under this Lease or any failure by Tenant to perform any of the terms or
conditions of this Lease to be performed by it; (iii) any material breach of any
representations and warranties made by Tenant hereunder; or (iv) any losses
caused by the negligence or willful misconduct of Tenant or any of Tenant’s
employees, agents or contractors.  Tenant shall have the right to designate
counsel acceptable to Landlord, such approval not to be unreasonably withheld,
conditioned or delayed, to assume the defense of any such third party claim on
behalf of itself and Landlord.  Landlord shall not have the right to settle any
claim without the consent of Tenant, which consent shall not be unreasonably
withheld, conditioned or delayed.  This indemnity shall survive the expiration
of the Term or earlier termination of this Lease.

 

(b)           Except to the extent that such loss, costs or damages were caused
by negligence or willful misconduct of Tenant, its employees, agents or
contractors, Landlord hereby agrees to indemnify, defend and hold Tenant and
each Tenant Indemnified Party harmless from any loss, costs and damages
(including reasonable attorney’s fees and costs) suffered by Tenant or any
Tenant Indemnified party, if, and then only to the extent same is the result of
(i) any claim by a third party, its agents, employees or contractors arising
from the Common Facilities (excluding

 

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the Leased Property); (ii) an Event of Default by Landlord under this Lease or
any failure by Landlord to perform any of the terms or conditions of this Lease
to be performed by it; (iii) any material breach of any representations and
warranties made by Landlord hereunder; (iv) any repair, maintenance or
replacement of or to the Leased Property performed by or at the direction of
Landlord for which Landlord assumes responsibility by the terms of this Lease;
or (v) any losses caused by the negligence or willful misconduct of Landlord or
any of Landlord’s employees, agents or contractors.  Landlord shall have the
right to designate counsel acceptable to Tenant, such approval not to be
unreasonably withheld, conditioned or delayed, to assume the defense of any such
third party claim on behalf of itself and Landlord.  Tenant shall not have the
right to settle any claim without the consent of Landlord, which consent shall
not be unreasonably withheld, conditioned or delayed.  This indemnity shall
survive the expiration of the Term or earlier termination of this Lease.

 

(c)           Any amounts payable to an Indemnified Party because of the
application of this Section 12 shall be payable on demand and shall bear
interest at the Overdue Rate from ten (10) days following the date such
Indemnified Party demands payment until paid in full; provided, however, if it
is finally judicially determined that the Indemnified Liabilities resulted from
the gross negligence or willful misconduct of any Indemnified Party, any amounts
already paid pursuant to this Section 12 to that class of Indemnified Parties
shall be refunded to the Party that made such payment(s).  Each of Landlord’s
and Tenant’s representations, warranties and agreements, and the rights and
remedies of each Indemnified Party under this Section 12, are in addition to and
not in limitation of any other representations, warranties, agreements, rights
and remedies provided in this Lease or otherwise at law or in equity, and shall
survive the end of the Term.

 

(d)           Notwithstanding any provision in this Lease to the contrary, each
party waives against the other any right to recover consequential damages and
punitive damages.

 

13.          Environmental Matters.

 

(a)           Tenant (i) will not conduct any activity on the Leased Property
that will use or produce any Hazardous Substances, except for such activities
that are both (A) part of the ordinary course of Tenant’s business activities
and (B) conducted in accordance with all Environmental Laws; and (ii) will not
use the Leased Property in any manner for the storage of any Hazardous
Substances except for storage of such materials that are both (A) used in the
ordinary course of Tenant’s business and (B) properly stored in a manner and
location satisfying all Environmental Laws.  If any Hazardous Substances are
introduced on the Leased Property in violation of the above provisions of this
Section, the same shall be immediately removed by Tenant, with proper disposal,
and all required cleanup procedures shall be diligently undertaken pursuant to
all Environmental Laws. If at any time during or after the Term the Leased
Property is found to be so contaminated or subject to such conditions as a
result of Tenant’s failure to comply with the foregoing provisions, then, to
such extent, Tenant shall indemnify, hold harmless and defend Landlord and the
Landlord Indemnified Parties from all claims, demands, actions, liabilities,
costs, expenses, damages and obligations of any nature as a result thereof. 
Except for Hazardous Substances that were released, existed in, on or near the
Leased Property as of the Commencement Date, or that were introduced or released
at, on or near the Leased Property by Landlord or Landlord’s agents, employees
or contractors, Tenant shall remove all

 

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Hazardous Substances from the Leased Property that are required to be removed
under applicable Environmental Laws in accordance with such laws.  Not more than
once during any twelve (12) month period (unless Landlord has reasonable cause
to do so more frequently), Landlord may, upon reasonable advance Notice to
Tenant, enter the Leased Property and conduct environmental inspections and
tests therein as it may require from time to time, provided that Landlord shall
use reasonable due diligence to minimize the interference with Tenant’s
business.  Such inspections and tests shall be conducted at Landlord’s expense,
unless they reveal that Tenant has not complied with the requirements of this
Section, in which case Tenant shall reimburse Landlord for the reasonable cost
thereof within thirty (30) days after Landlord’s request therefor together with
reasonable and customary back-up documentation.

 

(b)           Tenant agrees to notify Landlord promptly upon Tenant’s Actual
Knowledge thereof of any disposal of Hazardous Substances at the Leased
Property, of any discovery of Hazardous Substances at the Leased Property, or of
any notice by a governmental authority or private party alleging or suggesting
that a disposal of Hazardous Substances by Tenant, its employees, agents or
contractors on or near the Leased Property may have occurred.  Furthermore,
Tenant shall provide Landlord with full and complete access to any documents or
information in its possession or control relevant to the question of the
generation, treatment, storage, or disposal of Hazardous Substances by Tenant,
its employees, agents or contractors on or near the Leased Property.

 

(c)           Prior to the execution of this Lease, Landlord has furnished to
Tenant copies of the environmental assessment reports and related documents
identified as Exhibit K.  Landlord represents and warrants to Tenant that,
except as may be disclosed in the environmental assessment reports and related
documents identified in Exhibit K, Landlord has not received any Notice, demand,
claim, citation, complaint, request for information or similar communication
with respect to, and does not otherwise have Actual Knowledge of, the existence
of Hazardous Substances at the Leased Property or elsewhere in the Park in
violation of Environmental Laws.  Notwithstanding anything to the contrary in
this Lease, Tenant shall not be responsible, and Landlord hereby indemnifies,
holds harmless and agrees to defend Tenant and the Tenant Indemnified Parties
from and against any and all liabilities, claims, costs and expenses, including
reasonable attorneys’ fees, arising from any release or threat of release or the
presence or existence of Hazardous Substances at the Leased Property if caused
by Landlord or persons acting under Landlord, if existing elsewhere in the Park,
or if existing at the Leased Property or elsewhere in the Park on or prior to
the Commencement Date.  Without limiting the foregoing, in the event any
Hazardous Substances are discovered at the Leased Property during the excavation
or construction process, Landlord shall, at Landlord’s sole cost and expense,
promptly take all such necessary action to ensure that the Leased Property
complies with all applicable Environmental Laws.  Notwithstanding anything to
the contrary in this Lease, Landlord shall not place an activity or use
limitation on the Leased Property or any part thereof that would impair, other
than in a de minimus manner, Tenant’s right to use the Leased Property for the
Permitted Use.

 

(d)           Should any release of any Hazardous Substances occur at the Leased
Property or elsewhere in the Park which is not the responsibility of Tenant as
set forth herein, upon receipt of Actual Knowledge thereof Landlord shall
promptly contain such release, and if required by Environmental Laws,
regulations and ordinances, remove and dispose of, off the Leased

 

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Property or the Park, or otherwise remediate (in accordance with Environmental
Laws), such Hazardous Substances and any material that was contaminated by the
release, and remedy and mitigate threats to human health or the environment
relating to such release in compliance with all applicable Environmental Laws
and remediate all other conditions of the Leased Property and the Park that have
resulted therefrom and that interfere, other than in a de minimus manner, with
Tenant’s ability to use and occupy the Leased Property for the conduct of
Tenant’s business operations in the usual course, or that would under applicable
Legal Requirements, preclude or materially impede Tenant’s right to use and
occupy the Leased Property.  If a third party is responsible to Landlord for any
remediation, damage or claims for which Landlord is responsible hereunder,
Landlord may cause such party to perform Landlord’s obligations hereunder in
accordance with the foregoing provisions.

 

14.          Landlord’s Maintenance, Repairs and Services.

 

(a)           Maintenance and Repair.

 

(i)            Landlord (A) shall replace, as necessary, at its sole cost and
expense (and without inclusion in Operating Expenses; provided, however, costs
for replacements of parts of structural elements may be included in Operating
Expenses if such cost is properly treated as an expense under GAAP), the
structure of the Building, the structural elements of the roof, the roof
membrane, floor slabs, footings and foundations, exterior curtain and structural
walls, and supporting systems, and the Building Systems, but only to the extent
same are included in the Base Project Work or are installed, modified or
supplemented by Landlord (including, without limitation, the Building chiller
equipment), (B) shall (and without inclusion in Operating Expenses, except to
the extent that the cost thereof is properly treated as an expense in accordance
with GAAP), maintain and/or repair, as necessary, the structure of the Building,
the structural elements of the roof, the roof membrane, floor slabs, footings
and foundations, exterior curtain and structural walls, and supporting systems,
and the Building Systems, but only to the extent same are included in the Base
Project Work or are installed, modified or supplemented by Landlord (including,
without limitation, the Building chiller equipment), and (C) shall make all
other Capital Repairs, which Capital Repairs shall be at Landlord’s sole cost
and expense.  In addition, as part of the Operating Expenses (but only to the
extent permitted under Section 7 above and not excluded from the definition of
Operating Expenses contained in Appendix 1) and to the extent not included in
clauses (A), (B) or (C) above, Landlord shall maintain, repair and/or replace,
as necessary, all of the non-structural elements of the Leased Property
(including the windows, glass or plate glass, and doors), the Building Systems
that were included in the TI Work and all other components of the Leased
Property in a condition consistent with the standards of maintenance and
operation found in other Class “A” office/laboratory buildings located in the
Philadelphia metropolitan area, reasonable wear and tear and non-casualty
damages caused by Tenant, its agents and contractors excluded.  With respect to
any repair, replacement and maintenance work performed by Landlord as provided
in this Section, Landlord shall use commercially reasonable efforts not to
interfere, other than in a de minimus manner, with Tenant’s use of the Leased
Property.  In addition to the above obligations, Landlord shall be responsible,
at its sole expense (and not included in Operating Expenses), (x) for performing
all work required under Landlord’s warranty of the Base Project Work and Tenant
Improvements as set forth in the Work Letter, if and to the extent work required
under Landlord’s warranty is discovered and brought to Landlord’s attention
within the longer period of:  (1) one (1) year

 

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following the Commencement Date, or (2) such longer warranty period that may be
available for any such Work or for any equipment incorporated into the Base
Project Work and Tenant Improvements pursuant to the specifications for the
same, and (y) for correcting latent defects in the Base Project Work and the TI
Work throughout the Lease Term, which defects in such work (A) were not built in
substantial conformity with the relevant approved plans and specifications for
such work, (B) were not built in accordance with Legal Requirements, or (C) were
not built in a good and workmanlike manner in accordance with the standards set
forth in the Work Letter.

 

(ii)           If Landlord desires to do any work (for preventive maintenance or
repairs or otherwise) that would require an interruption of power or any other
utility to the Leased Property or any interference, other than in a de minimus
manner, with Tenant’s operations or access to the Leased Property, the following
requirements shall apply: (A) Landlord shall give Tenant not less than ten
(10) days advance Notice of such planned work (except in the event of an
emergency in which case Landlord shall give such Notice as is practicable under
the circumstances), (B) such work may only occur during times reasonably
approved by Tenant (and the Parties agree it shall be reasonable for Tenant to
require that such work occur outside of normal business hours), and (C) in the
case of a power interruption, if requested by Tenant (to the extent Tenant
cannot supply its own back-up power) Landlord shall exercise its best efforts in
good faith to provide a source of back-up power for the Leased Property to allow
Tenant to continue its normal business operations during such interruption. 
Landlord acknowledges that Tenant performs ongoing testing, experiments and
research at the Leased Property which may be jeopardized by any power
interruption.  As a result, no interruptions within the reasonable control of
Landlord shall be permitted unless Landlord provides Tenant assurances that such
interruptions will not impact Tenant’s ongoing testing, experiments and
research.  The cost of supplying such back-up power shall be included in
Operating Expenses if and to the extent that the work necessitating the use of
such back-up power is being done by Landlord as part of the performance of its
repair and maintenance obligations under this Lease, but such cost shall not
exceed the utility cost that Tenant would otherwise have paid had such
interruption not occurred.

 

(b)           Property Management.  Subject to Tenant’s right to assume
management of the Leased Property pursuant to Section 7(a)(vi) above, Landlord
shall manage or shall hire a third-party property management company reasonably
acceptable to Tenant (the “Property Manager”), to manage the Leased Property
consistent with the standards of maintenance and operation found in other
Class “A” office/laboratory buildings located in the Philadelphia metropolitan
area for an annual property management fee of not more than four percent (4%) of
the sum of Basic Rent, plus those Operating Expenses managed by Landlord or the
Property Manager and not including Taxes, electricity, natural gas, water, sewer
and other utilities consumed by Tenant at the Leased Property, and any other
costs paid directly by Tenant) which fee shall be added to and be paid as part
of Operating Expenses.  The cost of building management personnel at or below
the level of property manager who are reasonably necessary for the management,
operation and maintenance of the Leased Property as agreed to by Tenant, will be
charged to Tenant in addition to this fee (such additional personnel costs are
to be included with the other Operating Expenses based on the amount of time
such personnel devote to the Leased Property as opposed to the time devoted to
other properties managed by the Property Manager).  Notwithstanding any language
to the contrary in this Lease, during the Term Tenant shall have the right to
(a) review Property Manager’s annual budget for Operating Expenses, (b) approve
Property Manager’s selection of the management and building

 

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engineering personnel with responsibility for the Leased Property, which
approval shall not be unreasonably withheld, conditioned, or delayed, and
(c) replace the Property Manager in accordance with Section 7(a)(vi) above. 
Such budget shall be a good faith projection only, and shall not constitute a
guarantee or cap applicable to actual Operating Expenses.

 

(c)           Utilities.  Landlord shall furnish the Leased Property with
electricity, natural gas, ventilation, heating and air conditioning, sewer
(subject to limitations on discharge as provided in the Industrial Waste
Discharge Rider attached to and made part of this Lease as Exhibit Q) and hot
and cold potable water in accordance with the Base Project Specifications for
the normal use and occupancy of the Leased Property for the Permitted Use
(including Tenant’s Laboratory Space (as defined in Section 3(c)(v) of the Work
Letter)) twenty-four (24) hours per day, seven (7) days a week.  Landlord shall
furnish the Leased Property with electricity in accordance with the approved
Base Project Construction Documents (as defined in Section 2(a) of the Work
Letter) and TI Work Plans (as defined in Section 3(c)(i) of the Work Letter). 
Tenant shall identify and Landlord shall approve during the design process
outlined in the Work Letter any additional or upgraded service Tenant may
require for Tenant’s communications and networking systems, specialized
equipment, Laboratory Space and other needs of Tenant.  Tenant agrees to pay
monthly (or at such other billing period required by the applicable utility
provider) directly to the utility provider all charges for heat and air
conditioning and electricity, natural gas, sewer, water and other utilities used
by Tenant at the Leased Property. Bills for water and sewer service shall either
be issued directly to Tenant for payment, in which event Tenant shall forward a
copy of each bill to Landlord promptly following receipt, or to Landlord, in
which event Landlord shall promptly forward each bill to Tenant following
receipt for payment by Tenant.  A separate meter shall be installed with respect
to the Leased Property (and the heating and air-conditioning equipment servicing
the Leased Property shall be attached to such meter) as part of the Base Project
Specifications and Tenant shall pay for the consumption of such electricity and
natural gas based upon its metered usage.  In addition, Tenant shall pay all
utility charges billed to Landlord and allocated to the Land and/or Building
under the Declaration at Landlord’s actual cost, subject to all applicable
discounts, and with no service fee, markup or other sum payable to Landlord on
account of such charges in excess of the amounts billed to Landlord by the
applicable utility provider or ECCA, plus amounts properly charged by ECCA as
part of its management fee pursuant to the terms of the Declaration.  Landlord
shall use commercially reasonable efforts to have ECCA select utility providers
providing services at competitive market rates.  Tenant shall pay all bills for
utility usage within thirty (30) days after receipt thereof.  Notwithstanding
the foregoing, Landlord shall have the right to retain any savings actually
realized from any solar electric or other alternative energy system serving the
Leased Property installed solely at Landlord’s cost (and without reimbursement
from or cost to Tenant) for electricity generated by such system; provided that
the electric charges to Tenant for its electricity at the Leased Property do not
exceed what the utility company would otherwise have charged Tenant directly for
such electricity.

 

(d)           HVAC Standards.  Upon commissioning of the Building’s HVAC system,
Landlord shall certify that the Building’s HVAC systems will perform in
accordance with the approved Base Project Construction Documents and the
approved TI Work Plans and at the ASHRAE 189.1 standards for “green” commercial
buildings, and allow Tenant’s technical services team and consultants to
evaluate and confirm the same.  The Building’s HVAC system shall be designed,
constructed and commissioned in accordance with the approved Base Project

 

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Construction Documents and the approved TI Work Plans and in a manner consistent
with best industry practices to optimize energy efficiency and meet the
reliability and redundancy requirements of Tenant.  The Building’s HVAC system
shall be designed to include consideration of special metering and other
installed systems to meet current requirements for certification under existing
LEED standards for Operations and Maintenance.  All enhanced commissioning
reports are to be reviewed and approved by Tenant.

 

(e)           Cleaning Specifications. Landlord shall clean the Leased Property
five (5) days per week pursuant to the Cleaning Specifications set forth in the
attached Exhibit F.  Landlord shall cause all such cleaning personnel (and
others engaged by Landlord or the Property Manager to perform Landlord’s duties
with regard to the operation, maintenance and repair of the Leased Property) to
adhere to Tenant’s corporate security and insurance requirements, as promulgated
from time-to-time. Tenant reserves the right to approve Landlord’s selection of
the cleaning personnel and the cost of such janitorial services.  The cost of
these janitorial services shall be included in the Operating Expenses. If at any
time Tenant alleges in a Notice to Landlord (a “Janitorial Deficiency Notice”)
that the janitorial services to the Leased Property have persistently failed to
conform to the requirements of Exhibit F hereto in a manner consistent with a
Class “A” office building in the Philadelphia metropolitan area, Landlord and
Tenant shall cause their executive representatives to meet promptly to identify
the alleged deficiencies, and to establish and implement actions and procedures
to redress those deficiencies in a manner reasonably acceptable to Tenant. If
Landlord and Tenant are unable to agree, within fifteen (15) days following
receipt by Landlord of the Janitorial Deficiency Notice, upon actions and
procedures to redress the alleged deficiencies to the reasonable satisfaction of
Tenant, Tenant may engage directly a replacement janitorial service contractor
for the performance of janitorial services to the Leased Property and the
Operating Expenses shall be equitably reduced and adjusted to take this into
account.  If Tenant takes such action, before hiring any such replacement
janitorial service, tenant shall give Landlord the right to match the level of
service and pricing of such replacement janitorial service.

 

(f)            Interruption of Services.  In the event that any utilities
serving the Leased Property, sewer, road infrastructure, or other third party
service necessary to operate Tenant’s Business at the Leased Property is
interrupted, which interruption is due to the negligent or willful acts or
omissions of Landlord, Property Manager or any of their respective agents,
contractors, or employees, and Landlord fails to restore any such utility,
sewer, road infrastructure or other third party service and such failure
continues for more than two (2) days after Landlord’s receipt of oral or Notice
from Tenant, then (i) Rent shall abate under this Lease until such service
interruption is fully restored, and (ii) Tenant shall be entitled to perform the
work itself and submit an invoice to Landlord for the actual cost of the
necessary work performed and Landlord shall pay Tenant for such services within
thirty (30) days following receipt of Tenant’s invoice, together with interest
at the Overdue Rate from the date such costs were incurred by Tenant.

 

(g)           Access.  Tenant shall have access to the Building and the Leased
Property, and Landlord shall provide utilities and services to the Leased
Property as set forth in the Lease, on a twenty-four (24) hours per day, seven
(7) days per week basis, as Tenant may request.

 

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(h)           Common Facilities.  Landlord shall maintain and repair, or cause
ECCA to maintain and repair, the Common Facilities in a manner consistent with
first class business parks located in the Philadelphia metropolitan area. Tenant
shall pay its pro rata share (which shall be determined in accordance with the
Declaration) of the electricity and other utility charges and other assessments
allocated to the Building and Land and properly charged to Landlord pursuant to
the Declaration (“Common Area Charges”).  All such prorated Common Area Charges
assessed by the ECCA shall be included in Operating Expenses; provided, however,
that all such charges shall be subject to the exclusions to Operating Expenses
as set forth in the definition of Operating Expenses set forth in Appendix I. 
Landlord represents and warrants that ECCA assesses a management fee of four
percent (4%) of all Common Area Charges for the Park to all tenants and owners
in the Park, and based on such representation, Tenant agrees that it shall pay
its pro rata share of such management fee as part of Operating Expenses, subject
to the limitations set forth above.  All charges for common electric and utility
services assessed by Landlord or ECCA for the Common Facilities shall be charged
at Landlord’s or ECCA’s actual cost, with all applicable discounts applied, with
no mark-up billing fee, service fee or other amounts as provided herein.

 

15.          Tenant’s Maintenance and Repairs; No Waste.

 

(a)           Tenant will, at its sole cost, at all times maintain in good
condition and repair any specialized equipment installed by Tenant at the Leased
Property and any special equipment used by Tenant in the Laboratory Space.  In
addition, Tenant shall keep the Leased Property orderly and free of rubbish, and
shall not commit any waste of the Leased Property, or remove, demolish or alter
the Improvements, except for Alterations performed in accordance with Section 16
below.

 

16.          Alterations.

 

(a)           In addition to any Restoration, Tenant may, at its sole expense
and without Landlord’s consent, perform Alterations to the Improvements which do
not constitute a Material Alteration; provided, however, in no event may Tenant
make Alterations that (i) are inconsistent with Tenant’s permitted use of the
Leased Property, (ii) materially and adversely affect the structural elements of
the Improvements or the Building Systems, (iii) materially and adversely affect
the useful life of the Improvements, (iv) materially change the exterior
appearance of the Building, or (v) materially diminish the quality of finishes
in the main ground floor lobby area, elevator lobby areas, stairways,
visitor/guest bathrooms or elevator cabs.  Tenant shall not perform any Material
Alteration without Landlord’s prior written consent, which consent may not be
unreasonably withheld, delayed or conditioned.

 

(b)           Before making any Alterations, Tenant shall obtain, at its sole
cost, all necessary Permits required to perform the proposed Alterations and at
least five (5) Business Days before commencing work shall deliver copies of all
such Permits to Landlord, together with plans and specifications for such work
(except that no such plans and specifications shall be required to be delivered
to Landlord for any minor or cosmetic Alterations, including changing any
interior wall and floor coverings if plans are not required for permitting for
such Alterations).  Tenant shall diligently construct and complete all
Alterations (i) in a good and workmanlike manner using a quality of material and
workmanship at least as good as the original work or installation

 

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of the Improvements or Building Systems, as the case may be, (ii) in the case of
a Material Alteration, substantially in accordance with the plans and
specifications approved by Landlord, and in the case of any other Alteration
(except any minor or cosmetic Alterations, including changing any interior wall
and floor coverings if plans are not required for permitting for such
Alterations), substantially in accordance with the plans and specifications
delivered to Landlord, (iii) free of Liens, and (iv) within a commercially
reasonable period, accounting for the scope and nature of the Alteration.  Upon
substantial completion of any Alterations, Tenant shall provide Landlord with
evidence of Tenant’s compliance with the requirements of this Section 16(b). 
Once substantially completed, an Alteration shall become part of the
Improvements for all purposes under this Lease.

 

(c)           Any and all Alterations (whether temporary or permanent in
character) which are constructed, installed or otherwise made by or on behalf of
Tenant at Tenant’s cost shall be the property of Tenant, except those
Alterations inextricably integrated with the Building or the Building Systems,
which shall be the property of Tenant until the expiration or sooner termination
of this Lease and shall thereupon become the property of Landlord.  At the end
of the Term, Tenant may elect to leave at the Leased Property the Tenant
Improvements (and replacements of the Tenant Improvements) and any subsequent
Alterations thereto that consist of customary office and/or laboratory
Alterations (including, without limitation, fixed office partitions, carpeting,
ceiling grids, lighting and cabling installed by Tenant) and
office/laboratory-related Alterations that would not reasonably require an
extraordinary cost (or damage to the Leased Property) to remove.  Any other
Alterations shall be removed at Tenant’s expense and the Leased Property
restored to the condition as existed prior to such installation, unless with
respect to any such Alteration, Tenant requests Landlord’s consent to such
Alterations remaining in place either at the time Tenant requests Landlord’s
consent to the installation of such Alteration, or at the time Landlord is
advised by Tenant of its intention to install an Alteration and delivers the
applicable plans and specifications to Landlord, as applicable, and Landlord
consents in writing to such Alterations remaining in place.  At Lease expiration
or termination, all furniture, movable trade fixtures and equipment (including
telephone, security and communication equipment, other than system wiring and
cabling) shall, at Landlord’s option, be removed by Tenant, at Tenant’s sole
cost and expense, and such removal shall be accomplished in a good and
workmanlike manner so as not to damage the Building, and any damage shall be
repaired at Tenant’s cost and expense. If Tenant fails to remove any items
required to be removed pursuant to this Section 16(c), such items shall be
deemed to have been abandoned by Tenant, Landlord may do so and the reasonable
costs and expenses thereof shall be deemed Additional Rent hereunder and shall
be reimbursed by Tenant to Landlord within fifteen (15) days of Tenant’s receipt
of an invoice therefor from Landlord.

 

(d)           The Trade Fixtures are and shall remain Tenant’s Property.  Tenant
may, at its own cost, at any time before the termination of this Lease, install
or place or reinstall or replace upon or remove from the Leased Property any
such Trade Fixtures, so long as Tenant repairs any damage to the Leased Property
caused by such installation, placement, reinstallation, replacement or removal. 
No Trade Fixtures shall become Landlord’s property, except to the extent they
are not removed by Tenant and deemed abandoned and Landlord elects to retain
them, and except to the extent Landlord acquires an interest in such Trade
Fixtures by legal process in connection with a judgment obtained against Tenant
following an Event of Default.

 

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(e)           All Alterations shall be performed by Landlord’s Contractor, or
another qualified contractor selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld.  In the event Tenant elects to
engage a contractor other than Landlord’s Contractor for any Alterations, Tenant
shall provide to Landlord a copy of such other contractor’s bid or proposal, and
if such Alterations consist of customary office and office-related Alterations
only (and not any specialized work in Tenant’s reasonable opinion) and if within
seven (7) days of Landlord’s receipt of such bid or proposal Landlord’s
Contractor submits a bid or proposal that meets all of the terms of such other
contractor’s bid, Tenant shall accept such Landlord’s Contractor’s bid which
meets all of such other contractor’s terms.  In the event Tenant does not
utilize Landlord’s Contractor for installation of any Alterations, Tenant shall
pay to Landlord only the reasonable third-party review costs incurred by a
third-party on Landlord’s behalf to review the plans and specifications and
inspect the Alterations to confirm that they are installed in accordance with
Tenant’s obligations under this Lease with respect to Alterations.

 

17.          Insurance; Waiver of Subrogation.

 

(a)           Tenant’s Insurance.

 

(i)            Tenant agrees that, during the entire Term, at its sole cost and
expense, Tenant shall obtain, maintain and keep in full force and effect the
following insurance:

 

(A)          “Special Form” (with commercially reasonable deductibles) business
personal property insurance in such form as is in general use in the
Commonwealth of Pennsylvania upon Tenant’s Property located at the Leased
Property for which Tenant is legally liable or installed by or on behalf of
Tenant, including by way of example and not by way of limitation, furniture,
fixtures, fittings, installations and any other personal property (but excluding
the Base Project Work and the Tenant Improvements and excluding standard
exclusions from coverage) in an amount equal to the full replacement cost
thereof.

 

(B)          Commercial General Liability Insurance coverage to include personal
injury, bodily injury, property damage, and contractual liability naming
Landlord and Lender as additional insureds, in limits of not less than Five
Million Dollars ($5,000,000.00).

 

(C)          Business income and extra expense insurance in such amounts as will
reimburse Tenant for loss of earnings attributable to all perils commonly
insured against under “Cause of Loss-Special Perils Form” coverage.

 

(D)          Workers’ Compensation insurance in form and amount as required by
law.

 

(ii)           All property insurance policies shall be taken out with insurers
rated A-/VIII (or if such ratings are not in effect, the equivalent thereof) by
Best Rating Service, or any successor thereto (or if there be none, an
organization having a national reputation) who are licensed to do business in
the state in which the Leased Property is located and shall be in form
satisfactory from time to time to Landlord.  A policy or certificate evidencing
such insurance shall be delivered to Landlord not less than fifteen (15) days
prior to the Commencement Date hereof.  Such insurance policy or certificate
will provide an undertaking by

 

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the insurers to endeavor to notify Landlord and the Lender (identified by
Landlord to Tenant in writing) in writing not less than thirty (30) days prior
to any cancellation or other termination thereof.

 

(iii)          If any insurance policy carried by either party as required by
this Section 17 shall be cancelled or cancellation shall be threatened or the
coverage thereunder reduced or threatened to be reduced in any way by reason of
the use or occupation of the Leased Property or any part thereof by Tenant or
any assignee or subtenant of Tenant or anyone permitted by Tenant to be upon the
Leased Property, and if Tenant fails to remedy the conditions giving rise to
such cancellation or threatened cancellation or reduction in coverage at least
five (5) Business Days prior to such cancellation or reduction becoming
effective, Landlord shall have the right to obtain, at Tenant’s reasonable cost
(which shall constitute Additional Rent), a substitute policy of insurance for
the coverages that Tenant has failed to maintain and which are required of
Tenant under this Lease.

 

(b)           Landlord’s Insurance.  Landlord agrees that, during the entire
Term, at its sole cost and expense (subject to Tenant’s obligations under
Section 7 of this Lease), Landlord shall obtain, maintain and keep in full force
and effect the following insurance:

 

(i)            During the period of any construction of the Improvements
(including any Restoration and other construction work subsequent to the initial
construction thereof), Landlord shall purchase and maintain (or shall cause its
general contractor to purchase and maintain) Builders Risk “All Risk” or
equivalent policy form in the amount of the initial contract sum for the Base
Project Work and the Tenant Improvements, plus value of subsequent contract
modifications and cost of materials supplied or installed by others, comprising
the total value of the entire Leased Property that is the subject of such
construction work, on a replacement cost basis without optional deductibles, and
on a non-reporting basis.  Such property insurance shall also cover portions of
the work stored off the site and portions of the work in transit.  Such
insurance shall, unless otherwise agreed in writing by all Persons that are
beneficiaries of such insurance, (A) be maintained until the construction
project is complete, (B) include at least the interests of the Landlord, Tenant,
Landlord’s contractor, subcontractors and sub-subcontractors, and (C) include
Loss of Use insurance due to a covered loss, including as separate coverages
Loss of Rental Income, Delay in Startup, and Soft Costs (with a minimum sublimit
(as to Soft Costs) of $10,000,000), and also including Leasehold Interest
Coverage in favor of Tenant subject to a maximum limit of $10,000,000.  The
period of indemnity for this Loss of Use should be at a minimum the length of
the original construction period of the Base Project Work and the Tenant
Improvements or (after completion thereof) other applicable construction
project. Such policy shall permit partial occupancy as construction progresses. 
Such policy also shall grant permission for the insured to waive rights of
subrogation prior to loss.

 

(ii)           At all other periods during the Term, Landlord shall be required
to provide “Special Form” or equivalent property insurance covering all
Improvements in the amount of the full replacement cost thereof, including all
fixtures, equipment, machinery and apparatus which constitute a permanent part
of the Improvements.  Such policy shall also include coverage for debris removal
and the enforcement of any legal requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Leased Property
as the result of a covered loss.  Such policy shall include, or be endorsed to
include, loss of rental income

 

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coverage in an amount equal to 100% of the Basic Rent for not more than a twelve
(12) month period.  Such policy also shall include but not be limited to the
following coverage extensions: Service
Interruption, Ingress/Egress, Interruption by Civil/Military Authority each of
these extensions with (A) a maximum temporal sublimit of not less than thirty
(30) days per occurrence, and a maximum monetary sublimit of at least
$10,000,000 per occurrence, and (B) a waiting (deductible) period not to exceed
seventy-two (72) hours.  Such policy shall permit partial occupancy as
construction progresses. Such policy shall grant permission for the insured to
waive rights of subrogation prior to loss. This coverage shall be subject to
deductible limits not less than $5,000 per occurrence and not greater than
$25,000 per occurrence.  Any costs incurred by Landlord for repairs or
restoration as a result of a Casualty which are not reimbursed because of
insurance deductibles shall be included in Operating Expenses to the extent such
costs would not otherwise be excluded as capital expenditures.

 

(iii)          Combination of Commercial General Liability insurance and Excess
(or Umbrella) Liability insurance (to be in the following form over underlying
insurance) on an occurrence basis with a combined single limit for bodily
injury/property damage of $10,000,000 in the aggregate. Contractual liability
coverages shall be included in the Commercial General Liability policy to insure
liability under any contract whereby Landlord will hold harmless the Tenant
parties pursuant to Landlord’s indemnities under Section 12. Such policy shall
have no deletion of the Separation of Insured’s Clause or any exclusion for
Cross Liability. Such policy shall contain (A) an endorsement including the
Tenant Indemnified Parties identified in Section 12, below as “additional
insureds”; (B) a waiver of subrogation endorsement in favor of such Tenant
Indemnified Parties; (C) a deletion of contractual liability exclusions for
Personal Injury and Advertising Injury liability; and (D) no modification which
would make Landlord’s policy excess over or contributory with Tenant’s liability
insurance.

 

(iv)          Worker’s Compensation.  If and to the extent Landlord has any
employees for whom it is required by law to carry worker’s compensation
insurance:

 

Coverage

 

Minimum Amounts & Limits

 

 

 

Worker’s Compensation

 

Statutory Limits (if state has no statutory limit, $1,000,000)

 

 

 

Employer’s Liability

 

$1,000,000 each accident for bodily injury by accident; $1,000,000 Constant
Dollars each employee for bodily injury by disease; $1,000,000 Constant Dollars
policy limit for bodily injury by disease

 

The policy will include a waiver of subrogation endorsement in favor of the
Tenant Indemnified Parties pursuant to Landlord’s indemnities under Section 12. 
No “alternative” forms of coverage will be permitted for workers’ compensation
insurance.

 

(v)           Other Insurance.  Landlord may, but shall not be obligated to,
take out and carry any other forms of insurance, not less protective than those
set forth in this Section 17(b), as it or Lender may reasonably require.  All
insurance carried by Landlord on the Improvements

 

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under this Section17(b) shall be included as an Operating Expense pursuant to
Section 7 of this Lease.

 

(vi)          All property insurance policies shall be taken out with insurers
rated A-/VIII (or if such ratings are not in effect, the equivalent thereof) by
Best Rating Service, or any successor thereto (or if there be none, an
organization having a national reputation) who are licensed to do business in
the state in which the Leased Property is located and shall be in form
satisfactory from time to time to Tenant.  A policy or certificate evidencing
such insurance shall be delivered to Tenant not less than fifteen (15) days
prior to the Commencement Date hereof.  Such insurance policy or certificate
will provide an undertaking by the insurers to notify Tenant and any Lender
(identified by Tenant to Landlord in writing) in writing not less than thirty
(30) days prior to any cancellation or other termination thereof.

 

(vii)         Evidence of the insurance coverage required to be maintained by
Landlord under this Section 17(b), represented by certificates of insurance or
evidences of insurance (on an ACORD 27 form or other equivalent form reasonably
acceptable to Tenant) issued by the insurance carrier(s) and constituting actual
evidence of coverage, must be furnished by Landlord to Tenant prior to delivery
of occupancy of the Leased Property to Tenant, and at least 30 days prior to the
expiration of current policies.  Such certificates will specify the additional
insured status (as applicable) as well as the waivers of subrogation.  Such
certificates will state that Persons required to be named hereunder as
additional insureds have been so named, and that such additional insureds will
be notified in writing thirty (30) days prior to cancellation or non-renewal of
insurance.  The “endeavor to” language contained in any cancellation notice
section of such certificate shall be deleted.  Such certificates, or a separate
writing issued by the insurer or its agent together with such certificate, shall
set forth the amounts of deductibles.

 

(c)           Notwithstanding its inclusion as an Operating Expense, Tenant
acknowledges that it has no right to receive any proceeds from any such
insurance policies carried by Landlord (excepting the rights of Tenant and the
other parties named as, and in their capacity as, additional insureds). 
Landlord shall use the proceeds of the insurance policies identified in
Sections 17(b)(i) and (ii) for the repair and Restoration of the Leased
Property.

 

(d)           Landlord and Tenant may carry any insurance required by this
Section 17 under a blanket policy, applicable to the applicable property to be
insured hereunder for the risks and in the amounts required pursuant to this
Section 17, provided that all requirements of this Section 17 shall be complied
with in respect of such policy.

 

(e)           Any policy or policies of fire, extended coverage or similar
casualty insurance, which either party obtains in connection with the
Improvements shall include a clause or endorsement denying the insurer any
rights of subrogation against the other party (i.e., Landlord or Tenant) for all
perils covered by such policy. Should such waiver not be available then the
policy for which the waiver is not available must name the other party as an
additional named insured affording it the same coverage as that provided the
party obtaining such coverage. Any provision of this Lease to the contrary
notwithstanding, Landlord and Tenant hereby release the other from any and all
liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise (i) from any and all liability for any
loss or damage to the property of the releasing party, (ii) for any loss or
damage that may result, directly or

 

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indirectly, from the loss or damage to such property (including rental value and
business interruption), and (iii) from legal liability for any loss or damage to
property (no matter who the owner of the property may be), all to the extent
that the releasing party’s loss or damage is insured or, if not insured, was
insurable under commercially available “all risk” property insurance policies,
including additional coverages typically obtained by owners and tenants of
comparable office buildings in the vicinity of the Building, even if such loss
or damage or legal liability shall be caused by or result from the fault or
negligence of the other party or anyone for whom such party may be responsible
and even if the releasing party is self insured in whole or in part or the
amount of the releasing party’s insurance is inadequate to cover the loss or
damage or legal liability.  It is the intention of the parties that Landlord and
Tenant shall look solely to their respective insurance carriers for recovery
against any such property loss or damage or legal liability, without such
insurance carriers having any rights of subrogation against the other party.
Notwithstanding any provision in this Section 17(e) to the contrary, the
foregoing waiver of claims shall be inapplicable to a claim for damage to the
property of a party caused by a breach of a party’s obligations under this Lease
to comply with Legal Requirements to the extent such claim is not covered by
such party’s applicable insurance.

 

(f)                                    Notwithstanding any other provision
contained in this Lease, before Landlord purchases (directly or as part of
blanket coverage) the insurance coverage it is required to carry under
Section 17(b)(ii) (the “Property Insurance”), Landlord shall notify Tenant as to
the cost and details (i.e., limits, exclusions, deductibles, rating of insurer
and other similar matters) of Landlord’s proposed Property Insurance
(“Landlord’s Proposed Property Insurance”). Tenant shall have fifteen (15) days
from its receipt of Landlord’s Notice to accept or reject Landlord’s Proposed
Property Insurance and the cost thereof.  If Tenant rejects such coverage, it
shall have thirty (30) days from the date of its rejection to find Property
Insurance, from a property insurer meeting the requirements of
Section 17(b)(vi) above, substantially similar to, and for a lower cost than,
the Landlord’s Proposed Property Insurance.  If Tenant finds such coverage, it
shall send Landlord the cost and details of such insurance (“Tenant’s Proposed
Property Insurance”).  Landlord shall have fifteen (15) days of its receipt of
Tenant’s Notice to either (i) accept Tenant’s Proposed Property Insurance in
which case Landlord shall purchase the Tenant’s Proposed Property Insurance,
(ii) cause its property insurer to match Tenant’s Proposed Property Insurance in
which case Landlord may purchase such insurance from its selected property
insurer, or (iii) reject Tenant’s Proposed Property Insurance in which case
Tenant’s liability to pay for such Property Insurance shall be capped at the
cost of Tenant’s Proposed Property Insurance and Landlord shall be obligated to
pay the difference.  Once the Property Insurance is selected, such selection
shall remain in place for three (3) years unless Landlord and Tenant agree to
change the selection or such Property Insurance cannot be renewed for such
subsequent years after the first year.  Ninety (90) days before the end of such
three (3) year period, and for each three (3) year period thereafter during the
Term, Landlord shall begin the process outlined above for the selection of
Property Insurance.

 

18.                               Destruction.

 

(a)                                  If the Improvements are damaged or
destroyed by Casualty, Landlord shall, subject to the provisions of this
Section 18, at its sole cost and expense, repair, rebuild or replace such damage
and restore the Improvements to substantially the same condition as the same
were in immediately prior to such Casualty. Within sixty (60) days following the
date of such

 

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Casualty, Landlord shall provide Tenant with Notice of the Landlord’s
third-party independent architect’s reasonable professional estimated time (a
“Casualty Time Estimate”) (certified to Tenant in writing) needed to complete
(assuming normal work crews not engaged in overtime) the repair and restoration
work to the Improvements necessary to restore use, operation and occupancy
thereof (including adequate parking spaces suitably located) fully or
sufficiently to enable Tenant to conduct its business operations in the
Improvements substantially to the same extent and nature conducted in the
Improvements immediately prior to the Casualty (“Restoration Work”, which term
shall also include all other repairs, restoration and other work and materials
for the repair and restoration of such Casualty damage).

 

(b)                                 Notwithstanding the foregoing, if both
(i) the damage is of a nature or extent that all or a substantial portion of the
Improvements cannot reasonably be occupied (due to damage therein and/or the
impairment of access and/or necessary services) and, (ii) either (A) the
Casualty Time Estimate to complete the Restoration Work is more than twelve (12)
months after the Casualty, or (B) the Casualty Time Estimate is more than one
hundred eighty (180) days and the period of the Term that would exist following
the expiration of the Casualty Time Estimate is less than two (2) years, and
Tenant has not exercised a renewal option to extend the Term thereafter, then
either Landlord or Tenant shall have the right to terminate this Lease and all
of the unaccrued obligations of the parties hereto, by sending Notice of such
termination to the other party within ninety (90) days from the later of (i) the
date of the Casualty or (ii) the date Landlord delivers to Tenant its Casualty
Time Estimate.  Such Notice is to specify a termination date no less than thirty
(30) and no more than sixty (60) days after its transmission.  If (i) Landlord
elects to terminate this Lease in accordance with clause (B), above, and
(ii) the Casualty Time Estimate is less than twelve (12) months, then Tenant may
void such termination if Tenant elects in writing, within thirty (30) days after
receiving Landlord’s termination Notice, to exercise one or more of the renewal
options then available to Tenant under this Lease so that, including the period
of such Renewal Term, the period of the Term that would exist following the
expiration of the Casualty Time Estimate will be more than five (5) years.

 

(c)                                  If neither Landlord nor Tenant shall elect
to terminate this Lease pursuant to Section 18(b) above, but Landlord,
nevertheless (i) has failed within the applicable Restoration Commencement
Period (defined below) to (A) adjust its insurance claim (or otherwise secure
adequate funds to fully perform the necessary Restoration Work) and (B) commence
construction and diligently and continuously prosecute the necessary Restoration
Work, or (ii) has failed to complete the Restoration Work within one (1) year of
the date of the Casualty, plus any periods of Unavoidable Delay arising after
the casualty itself then Tenant may, by Notice to Landlord at any time after
said period, but before Landlord satisfies the conditions expressed in clauses
(i)(A) and (i)(B) above, (x) terminate this Lease effective as of the date
specified in Tenant’s Notice, which date shall not be more than three (3) months
following the date of Tenant’s Notice, or (y) perform and complete Landlord’s
obligation in accordance with this Section and Section 44, and Landlord, upon
request of Tenant, shall pay to Tenant all of the insurance proceeds received by
Landlord and assign to Tenant all of the Landlord’s rights to the remaining
insurance proceeds.  To the extent the proceeds received by Tenant are
insufficient to reimburse or pay Tenant for all of the costs for the Restoration
Work, then Landlord shall pay Tenant within thirty (30) days of Landlord’s
receipt of an invoice of such costs the amount of such unpaid costs.  “Commence
construction” for purpose of this Section 18(c) shall mean Landlord shall have
obtained the applicable permits and licenses required for the commencement

 

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of the Restoration Work and all other material permits are available for the
continuous prosecution thereof subject to payment of requisite fees; Landlord’s
general contractor shall have mobilized on the Leased Property for the purpose
of commencing and continuously prosecuting the Restoration Work; and, in the
event the Restoration Work shall require the erection of structural steel for
the framework of the Building, Landlord have submitted its binding order for the
purchase of the steel for the required structural framework of the Building,
together with all deposits or prepayments required for the initiation of the
fabrication thereof.  “Restoration Commencement Period” means the longer of
(i) six (6) months following the date of such Casualty and (ii) ninety (90) days
following receipt by Landlord of Tenant’s election to exercise one or more of
the renewal options then available to Tenant under this Lease, as contemplated
in the last sentence of Section 18(b) above.

 

(d)                                 The net amount of any insurance proceeds
actually recovered by reason of the damage or destruction of the Improvements
(meaning the gross insurance proceeds actually received by Landlord excluding
proceeds received by Landlord pursuant to a rental coverage endorsement and the
cost of adjusting the insurance claim and collecting the insurance proceeds)
shall be held in trust by Landlord to be applied first towards the cost of
performing the Restoration Work, then and only then, if the net insurance
proceeds are more than adequate, the amount by which the net insurance proceeds
exceed the cost of the Restoration Work will be retained by Landlord or applied
to repayment of any Mortgage secured by the Leased Property, after application
thereof to any deductible amount.

 

(e)                                  Landlord’s obligation to restore the
Improvements under this Section 18 or to terminate this Lease shall not be
subject to the terms of any present or future Mortgage affecting the
Improvements, but shall prevail over any such terms.  Landlord’s obligations
under this Section 18 shall not, in any event, include the repair, restoration
or replacement of the Tenant’s Property, but shall include all improvements and
alterations installed by Landlord in the Leased Property for the use of Tenant
(including without limitation those to be constructed by Landlord under the Work
Letter including the Base Project Work and the Tenant Improvements).

 

(f)                                    If and to the extent (i) due to any
Casualty to any portion of the Improvements, or (ii) due to any Casualty
affecting any other portion of the Park or any building or other improvements in
the vicinity of the Improvements but not otherwise affecting the Improvements,
Tenant is unable reasonably to access the Leased Property or part thereof or to
occupy the Improvements for the customary operation of Tenant’s business, or if
services to the Leased Property reasonably necessary for access thereto or for
customary business operations therein are interrupted or curtailed by reason of
any such Casualty and Tenant is unable to reasonably operate its customary
business operations therein, the Rent proportionately shall abate from and after
the date of the Casualty until the earlier of (A) the last date on which all of
the following are satisfied: (i) Landlord has delivered possession of the
previously untenantable portion of the Improvements, together with all
reasonable access thereto and with resumption of Landlord’s services thereto
reasonably adequate for the resumption of Tenant’s customary business operations
therein, and Tenant shall have the use of adequate and suitable parking for the
operations of Tenant’s business in the ordinary course, (ii) all repairs and
restoration required to be performed by Landlord as a result of such Casualty
shall be Substantially Completed and repaired and restored by Landlord to the
extent reasonably required to enable Tenant to reoccupy the Improvements and to
recommence business operations in the Improvements in the normal

 

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course, including, without limitation, to complete computer and telephone
cabling and installations, carpeting, furnishing and the like, and (iii) Tenant
shall have had a sufficient period of time (such period to be reasonably agreed
upon by Landlord, Tenant and Tenant’s consultants promptly following the
Casualty and after the scope of Landlord’s repair obligation has been
determined) to complete Tenant’s refitting, refurnishing and equipping of the
Improvements to enable Tenant to recommence its business operations at the
Improvements in the normal course, or (B) Tenant actually resumes occupancy of
the damaged portion of the Improvements for the commencement of Tenant’s
customary business operations (and in such case only as to the area of the
Improvements so occupied by Tenant).  Any such proportionate abatement shall
take into account the portion of the Leased Property which Tenant is unable to
use for the customary operation of its business, and in the event of a Casualty
resulting in damage to a part (as opposed to all) of the Leased Property, Tenant
shall be obligated to pay Basic Rent and Additional Rent, appropriately
pro-rated on a per RSF basis, for the portion of the Building which Tenant is
able to use for the customary operation of its business, as reasonably
determined by Tenant. Landlord and Tenant acknowledge that it may be reasonable
under the circumstances for Tenant to abate Rent for more of the Building then
was directly affected by the Casualty if Tenant is unable in a cost effective
manner to operate its customary business at less than all of the Leased Property
and Tenant does not use such portion of the Building not directly affected
during the abatement period.

 

(g)                                 If the entire Leased Property shall be
condemned for public use, then and in that event, upon the vesting of title to
the same for such public use, this Lease shall terminate, anything herein
contained to the contrary notwithstanding, except that Tenant shall have the
right to prove and collect the value of the Tenant Improvements, any Alterations
to the Leased Property and any Trade Fixtures installed by it, and moving
expenses.  In the event of such termination of this Lease, all Rent paid in
advance shall be apportioned as of the date of such termination. Notwithstanding
the foregoing, if only a part of the Leased Property shall be so taken and the
part not so taken shall be sufficient for the customary operation of Tenant’s
business as conducted therein prior to the taking, as reasonably determined by
Tenant, Tenant shall retain the part not so taken and there shall be a
proportional reduction in the Rent.  Landlord and Tenant acknowledge that it may
be reasonable under the circumstances for Tenant to abate Rent for more of the
Building then was directly affected by the condemnation if Tenant is unable in a
cost effective manner to operate its customary business at less than all of the
Leased Property and Tenant does not use such portion of the Building not
directly affected during the abatement period. All compensation awarded or paid,
as reasonably determined by Tenant upon such a total or partial taking of the
Leased Property shall belong to and be the property of the Landlord without any
participation by the Tenant, provided, however, that nothing contained herein
shall be construed to preclude the Tenant from prosecuting any claim directly
against the condemning authority in such condemnation proceedings for the
unamortized cost of the Tenant Improvements not paid for with the Improvement
Allowance (including, without limitation, the unamortized portion of one-half
the Roof Upgrade Cost (as defined in Section 3(f)(iii) of the Work Letter)), the
value of any Alterations to the Leased Property and any loss of business, or
depreciation to, damage to, or cost of removal of, or for the value of stock,
Trade Fixtures, furniture, and other personal property belonging to the Tenant;
provided, however, that no such claim shall diminish or otherwise adversely
affect the Landlord’s award or the award to the holder of any Mortgage.

 

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19.                               Landlord’s Financial Covenant.  Landlord
represents and warrants to Tenant that at all times from the Effective Date
until final completion of the Project that Landlord has and shall have the
financial ability to complete the Project and pay in full the Project Costs.  In
addition, Landlord covenants and agrees that at all times from the Effective
Date through the final completion of the Project, the Financial Condition shall
be satisfied.  On or before the first day of each month during the period
commencing on the Effective Date and ending on the date of final completion of
the Project, Landlord shall deliver to Tenant a certificate signed by the Chief
Financial Officer of Tenant (or equivalent officer, partner or member)
certifying that the Financial Condition has been satisfied and containing a
detailed schedule evidencing such compliance including, without limitation, the
source of funds and confirmation from the applicable lender as to how much of
the Project Loan is available for the Project.

 

20.                               Waiver of Liens.  All of Tenant’s Property
which may be installed or placed in or upon the Leased Property by Tenant shall
remain the property of Tenant.  Tenant may assign, hypothecate, encumber,
mortgage or create a security interest in or upon Tenant’s Property in the
Leased Property without the consent of Landlord and may remove Tenant’s Property
at any time during the Term.  To the extent Landlord may have a lien on or
security interest in the Tenant’s Property pursuant to this Lease, by law or
otherwise, Landlord hereby agrees to subordinate such lien or security interest
to any security interest granted by Tenant to an institutional lender providing
financing to Tenant for its business purposes.  Landlord shall provide to
Tenant, within ten (10) days after Tenant’s request therefor, a written
subordination in form substantially similar to the form attached hereto as
Exhibit O, or such form as is reasonably satisfactory to Tenant and Landlord.

 

21.                               Quiet Enjoyment.  While no Event of Default
exists, Tenant may peaceably and quietly have, hold and enjoy the Leased
Property during the Term of this Lease free from any claim by, through, or under
Landlord.  Notwithstanding the preceding sentence, (a) Landlord may exercise its
rights and remedies under Section 24 and (b) Landlord, Lender, and their
respective agents, representatives, consultants and employees may enter upon and
inspect the Leased Property during normal business hours after reasonable
advance Notice to Tenant and with minimum disruption to Tenant’s use and
occupancy of the Leased Property.  In addition to any other rights and remedies
Tenant may have under this Lease or at law, Tenant may obtain injunctive or
other equitable relief (including the right of self-help and offset) against
Landlord for breach of the aforesaid covenant of peaceful and quiet possession
and enjoyment of the Leased Property.

 

22.                               Survival.  If this Lease is terminated as
herein provided, Tenant’s and Landlord’s obligations and liabilities, actual or
contingent, under this Lease which arose at or before such termination shall
survive such termination.

 

23.                               Subletting; Assignment.

 

(a)                                  Except as provided herein, Tenant shall not
assign this Lease or sublet all or a portion of the Leased Property without
first obtaining Landlord’s consent, such consent not to be unreasonably
withheld, delayed or conditioned. Landlord shall have a period of fifteen (15)
Business Days following receipt of Tenant’s written request for consent within
which to notify Tenant in writing whether Landlord elects to permit Tenant to
assign this Lease or sublet such space, such consent not to be unreasonably
withheld, conditioned or delayed.  If Landlord should

 

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fail to notify Tenant in writing of approval or disapproval (along with detailed
reasons for such disapproval) within such fifteen (15) business day period,
Landlord shall be deemed to have approved the proposed assignee or sublessee, as
applicable.  Notwithstanding the foregoing, Landlord’s consent shall not be
required and Tenant shall have the right at any time to assign this Lease or
sublet all or any portion of the Leased Property to (i) any Affiliate, (ii) any
entity resulting from a merger or restructuring of or a consolidation with
Tenant, or (iii) any entity that acquires Tenant or all or substantially all of
Tenant’s assets (collectively, a “Permitted Transfer”).  In any such event,
Tenant shall provide thirty (30) days’ Notice of such Permitted Transfer, and a
copy of the documents evidencing such Permitted Transfer, which shall be
delivered to Landlord prior to the effective date thereof. In addition,
Landlord’s consent shall not be required for (i) any transfer from time to time
of publically traded shares of Tenant, or (ii) subleases by Tenant where the
aggregate of all subleases (including Permitted Transfers) constitutes
twenty-five percent (25%) or less of the RSF of the Building.

 

(b)                                 Unless otherwise agreed in writing by
Landlord, no assignment or subletting by Tenant shall relieve Tenant of any
obligation under this Lease.  Any assignment or subletting in violation of the
provisions of this Section 23 shall be voidable at Landlord’s option.

 

(c)                                  Notwithstanding the foregoing, Tenant’s
right to purchase the Leased Property as set forth in Section 43 shall not be
assignable.

 

(d)                                 If this Lease is assigned by Named Tenant
and Named Tenant remains liable under this Lease, then Landlord, when giving
Notice to any assignee of any Default, shall also serve a copy of such Notice on
Named Tenant, and no Notice of Default shall be effective as against Named
Tenant until a copy thereof is so given to Named Tenant.  Named Tenant shall
have a period of the same duration (commencing, however, on and extending from
receipt of such Notice to cure such Default) as is given to Tenant therefor
under this Lease (the “Named Tenant Grace Period”) to cure such Tenant Default. 
If Named Tenant cures such Default prior to the expiration of the Named Tenant
Grace Period, such Default shall be deemed to be cured as to Named Tenant, and
also as to all other parties having any interest as Tenant or by, through or
under Named Tenant or any other Tenant hereunder.

 

(e)                                  Any document evidencing a sublease or
assignment, including a Permitted Transfer, shall bind and obligate the
sublessee, assignee or transferee to observe and perform all covenants and
provisions of this Lease applicable to the portion of the Leased Property which
is the subject of the sublease or assignment, and shall provide that with
respect to a sublease, such sublease is under, subject and subordinate to this
Lease, and that upon termination of this Lease, such sublease shall, at the
option of Landlord, immediately terminate, or if Landlord elects, be converted
to a direct lease between Landlord and the sublessee as to the portion of the
Leased Property being subleased, for the rent and other economic terms as are
contained in the sublease.

 

24.                               Events of Default and Remedies.

 

(a)                                  Any one or more of the following
occurrences or acts shall constitute an “Event of Default” under this Lease:

 

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(i)                                     If Tenant (A) fails to pay any
installment of Basic Rent on or before the applicable Basic Rent Payment Date
and such installment is not paid within ten (10) days after Tenant’s receipt of
Notice of such Default, or (B) fails to pay Additional Rent when due and such
Default continues for ten (10) days after Tenant’s receipt of Notice of such
Default; or

 

(ii)                                  If Tenant fails to perform or observe any
other covenant, agreement or obligation on Tenant’s part to perform or observe
under this Lease and such Default continues for a period of thirty (30) days
after Tenant is provided Notice of such failure; provided, however, that in the
case of a Default which Tenant is unable to remedy with reasonable diligence
within a period of thirty (30) days, if Tenant commences within such period of
thirty (30) days to remedy the Default and thereafter prosecutes the cure of
such Default diligently, continuously and in good faith, the period within which
to remedy the Default shall be extended for such period as may be reasonable to
remedy the same diligently, continuously and in good faith; or

 

(iii)                               If Tenant files a petition of bankruptcy or
for reorganization or for an arrangement pursuant to the Bankruptcy Code, or is
adjudicated a bankrupt or becomes insolvent or makes an assignment for the
benefit of its creditors, or admits in writing its inability to pay its debts
generally as they become due, or is dissolved, or suspends payment of
substantially all of its obligations, or takes any corporate action in
furtherance of any of the foregoing; or

 

(iv)                              If a petition or answer is filed proposing the
adjudication of Tenant as a bankrupt, or its reorganization pursuant to the
Bankruptcy Code, and (A) Tenant consents to the filing thereof, or (B) such
petition or answer is not discharged or denied within sixty (60) days after the
filing thereof; or

 

(v)                                 If a receiver, trustee or liquidator (or
other similar official) is appointed for or takes possession or charge of
Tenant, or Tenant’s estate or interest in the Leased Property, and is not
discharged within sixty (60) days thereafter, or if Tenant consents to or
acquiesces in such appointment; or

 

(vi)                              If Tenant has made a material
misrepresentation under this Lease or any certificate or writing tendered to
Landlord in connection with the execution and delivery of this Lease and such
misrepresentation is capable of cure and remains uncured for thirty (30) days
after Tenant’s receipt of Notice thereof; provided, however, that in the case of
a misrepresentation which Tenant is unable to remedy with reasonable diligence
within a period of thirty (30) days, if Tenant commences within such period of
thirty (30) days to remedy the misrepresentation and thereafter prosecutes the
cure of such misrepresentation diligently, continuously and in good faith, the
period within which to remedy the misrepresentation shall be extended for such
period as may be reasonable to remedy the same diligently, continuously and in
good faith.

 

(b)                                 If an Event of Default hereunder shall have
occurred and then be continuing, Landlord shall have all of the following rights
without further demand or Notice to Tenant:

 

(i)                                     Nothing in this Lease shall be construed
as waiving any rights of Landlord arising out of any default of Tenant, by
reason of Landlord’s imposing or accepting any such late charge(s) and/or
interest; the right to collect such late charge(s) and/or interest is separate
and

 

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apart from any rights relating to remedies of Landlord after default by Tenant
including, without limitation, the rights and remedies of Landlord provided
herein.

 

(ii)                                  Without terminating this Lease and subject
to requirements of law and rules of civil procedure, Landlord may reenter and
repossess any or all of the Leased Property by summary or other proceedings in
accordance with all requirements of law and rules of civil procedure. The
commencement and prosecution of any action by Landlord in ejectment or
otherwise, or any execution of any judgment or decree obtained in any action to
recover possession of the Leased Property, or any other re-entry and removal,
shall not constitute a termination of this Lease, and shall not be deemed to
have absolved or discharged Tenant from any of its obligations or liabilities
for the remainder of the Term, nor shall Landlord be liable for the prosecution
therefor, or be deemed guilty of any trespass.  Tenant shall, notwithstanding
any such entry or reentry, remain liable to pay Basic Rent and Additional Rent
and perform the other covenants, conditions and agreements by Tenant to be
performed as set forth in this Lease, subject to Section 24(b)(v) below.

 

(iii)                               Landlord may terminate this Lease and
Tenant’s right of possession by giving Notice of such termination to Tenant,
which termination shall be effective as of the date of such Notice or any later
date therefor specified by Landlord therein (provided, that without limiting the
generality of the foregoing provisions, Landlord shall not be deemed to have
accepted any abandonment or surrender by Tenant of any or all of the Leased
Property or Tenant’s leasehold estate under this Lease unless Landlord has so
advised Tenant expressly in writing, regardless of whether Landlord has
reentered or relet any or all of the Leased Property or exercised any or all of
Landlord’s other rights under the provisions of this Section 24(b) or
requirements of law and rules of civil procedure).  Upon such termination,
Tenant shall remain liable to pay all Rent and other sums accrued up to the date
of termination or recovery of possession by Landlord, whichever is later, and to
perform all terms and obligations of this Lease which survive termination
hereof.

 

(iv)                              Without terminating this Lease and without
entering into possession of the Leased Property, Landlord may continue this
Lease in effect and enforce all of Landlord’s rights and Tenant’s obligations
under this Lease, including, filing suit to collect Basic Rent, Additional Rent,
and all other sums due hereunder as they accrue (including attorneys’ fees and
other damages subject to Section 24(b)(v) below), and if, and only if, there
exists a Material Monetary Event of Default, then at the option of Landlord and
upon prior Notice to Tenant (the “Acceleration Notice”), to accelerate and
declare as immediately due and payable all Basic Rent and Additional Rent which
would otherwise come due for the remaining balance of the Term, and in declaring
such amount due Landlord may reasonably estimate in good faith the amount of
Additional Rent applicable to the remaining portion of the Term based on such
amounts which accrued for the period immediately preceding such declaration. In
the event Tenant pays to Landlord within thirty (30) days following Landlord’s
written demand for payment, sums claimed pursuant to the preceding sentence,
Tenant shall have the right to discount such amount to present value utilizing a
discount rate equal to two percent (2%) over the Prime Rate per annum applicable
to the remaining portion of the Term.  Notwithstanding the foregoing, Landlord
shall not have the right to accelerate the payment of all Basic Rent and
Additional Rent which would otherwise come due for the remaining balance of the
Term if Tenant, within thirty (30) days of its receipt of Landlord’s
Acceleration Notice, posts a letter of credit with Landlord

 

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from an Eligible Institutional or other lender reasonably acceptable to Landlord
in an amount equal to one (1) year of Basic Rent and a reasonable estimate of
one (1) year of Additional Rent (collectively, the “L/C Amount”), which letter
of credit shall have a term of not less than one (1) year and shall provide that
it may be drawn upon by Landlord in accordance with the terms of this Lease. If
Tenant fails to pay its monthly payment of Basic Rent or Additional Rent as
required under this Lease, then Landlord may draw upon such Letter of Credit in
the amount of such unpaid Rent. If Landlord draws upon the Letter of Credit,
then either (a) such Letter of Credit shall provide that if it is drawn upon, it
shall automatically renew up the L/C Amount, or (b) Tenant, within thirty (30)
days of such draw, shall cause such Letter of Credit to be amended or replaced
such that it shall be in the L/C Amount.  If subsequent to Tenant’s payment of
such accelerated rent, Tenant voluntarily surrenders possession of the Leased
Property to Landlord in order for Landlord to seek to mitigate its damages
pursuant to Section 24(b)(vi) below, and Landlord executes a lease (a
“Replacement Lease”) of the Leased Property with a third party (a “Substitute
Tenant”), Landlord shall reimburse Tenant the pro-rated portion of the
accelerated rent paid by Tenant to the extent of the net rental (after deduction
of all reasonable retrofit and transaction costs incurred in connection with
obtaining the Replacement Lease) received from such Substitute Tenant. Acts of
maintenance or preservation efforts to relet the Leased Property or appointing a
receiver upon Landlord’s initiative to protect its interest under this Lease
shall not constitute a termination of this Lease or Tenant’s possession
hereunder.

 

(v)                                 After any repossession of any of the Leased
Property, whether or not this Lease shall have been terminated, Landlord shall
use commercially reasonable efforts to relet the Leased Property or any part
thereof to any Person for such term (which may be greater or less than the
period which would otherwise have constituted the balance of the Term), for such
rent and on such other conditions (which may include commercially reasonable
concessions or free rent) and for such uses as Landlord, in its reasonable
discretion, may determine and Landlord shall proceed to collect and receive any
rents payable by reason of such reletting.  The rents received from such
reletting shall be applied (A) first to the reasonable costs and expenses of
such reletting and collection actually incurred by or on behalf of Landlord,
including any renovation and alterations of the Leased Property, Tenant
Improvements and inducements to new tenants, security costs, attorneys’ fees and
any real estate commissions, and (B) thereafter toward payment of all sums due
or to become due to Landlord hereunder in such order as Landlord deems
appropriate, Tenant remaining liable for any deficiency.  Tenant shall in no
event be entitled to any rents collected or payable under any reletting, whether
or not such rents shall exceed the Basic Rent reserved in this Lease.

 

(vi)                              Landlord shall use commercially reasonable
efforts to mitigate its damages on account of any Event of Default hereunder. 
In respect of the foregoing, it is hereby agreed by the parties that Landlord’s
obligation to mitigate damages shall be satisfied in full if Landlord undertakes
to lease the Leased Property to a Substitute Tenant by including the Leased
Property in question in its and its affiliates’ portfolio of available lease
inventory at the Park, and considering in good faith offers to lease the Leased
Property by a Substitute Tenant.  Landlord’s obligation to mitigate damages
under this Subsection shall be subject to the limitations in Subsections
(A) through (G) below.

 

(A)                              Landlord shall have no obligation to solicit or
entertain negotiations with any other prospective tenants for the Leased
Property until Landlord obtains

 

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full and complete possession of the Leased Property including, without
limitation, the final and unappealable legal right to re-let the Leased Property
free of any claim of Tenant, in the condition required by the Lease at the
expiration of the Term.

 

(B)                                Landlord shall not be obligated to favor the
Leased Property to any prospective tenant over other premises in the Park that
would also be suitable for that prospective tenant’s use.

 

(C)                                Landlord shall not be obligated to lease the
Leased Property to a Substitute Tenant for a rental less than the reasonable
fair market rental rates being offered for similar space in the Exton submarket
of the Philadelphia metropolitan area.

 

(D)                               Landlord shall not be obligated to enter into
a new lease under terms and conditions that are unacceptable to Landlord under
Landlord’s or its Affiliates’ then current leasing policies for comparable space
in the Park.

 

(E)                                 Landlord shall not be obligated to enter
into a lease with any proposed Substitute Tenant that does not have, in
Landlord’s reasonable opinion, sufficient financial resources or operating
experience to operate the Leased Property in a first-class manner and meet its
obligations under the proposed replacement lease.

 

(F)                                 Landlord shall not be obligated to enter
into a lease with any Substitute Tenant whose use would, in Landlord’s
reasonable judgment:

 

(1)                                  violate any restriction, covenant, or
requirement contained in the lease of another tenant in the Park;

 

(2)                                  adversely affect the reputation of Landlord
and/or the Building; or

 

(3)                                  be incompatible with the operation of the
Building and the Park.

 

(G)                                Landlord shall not be obligated to accept a
lease for the Leased Property for a term of less than five (5) years.

 

(c)                                  Tenant hereby waives the service of any
Notice of intention to re-enter or to institute legal proceedings to that end
which may otherwise be required to be given under any present or future law. 
Tenant, on its own behalf and on behalf of all Persons claiming by, through or
under Tenant, including all creditors, does further hereby waive any and all
rights which Tenant and all such Persons might otherwise have under any present
or future law to redeem the Leased Property, or to re-enter or repossess the
Leased Property, or to restore the operation of this Lease, after (i) Tenant
shall have been dispossessed by a judgment or by warrant of any court or judge,
(ii) any re-entry by Landlord, or (iii) any expiration or termination of this
Lease and the Term, whether such dispossess, re-entry, expiration or termination
shall be by operation of law or pursuant to the provisions of this Lease.  In
the event of a breach by Tenant, or any Persons claiming through or under
Tenant, of any term, covenant or condition of this Lease, Landlord shall have
the right to enjoin such breach and the right to invoke any other

 

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remedy allowed by law or in equity as if re-entry, summary proceedings and other
special remedies were not provided in this Lease for such breach.  The right to
invoke the remedies set forth in this Lease are cumulative and shall not
preclude Landlord from invoking any other remedy allowed at law or in equity.

 

(d)                                 If this Lease and the Term shall expire or
terminate as provided in this Section 24(d), or if Landlord shall re-enter or
take possession of all or any portion of the Leased Property as provided in
Section 24(b), then the following shall apply:

 

(i)                                     Tenant shall pay to Landlord all Basic
Rent and Additional Rent payable under this Lease for the period up to the
earlier to occur of (i) the date upon which this Lease and the Term shall have
expired or terminated, and (ii) the date of any re-entry or taking of possession
upon all or any portion of the Leased Property by or on behalf of Landlord, as
the case may be.

 

(ii)                                  In the event this Lease and Term shall
expire or terminate, then Tenant shall be liable for and shall pay to Landlord,
liquidated damages for loss of bargain and not as a penalty (the parties
agreeing that Landlord’s actual damages would be difficult to predict, but the
aforementioned liquidated damages represent a reasonable approximation of such
amount), any deficiency (the “Deficiency”) between the amount of the Rent for
the period which otherwise would have constituted the then unexpired portion of
the Term and the net amount, if any, of all fixed and additional rents collected
under any reletting of all or any portion of the Leased Property effected
pursuant to the provisions of Section 24(b) for any part of such period.  Any
Deficiency shall be calculated after first deducting from the amount of any such
rents collected under any reletting the aggregate amount of Landlord’s
reasonable costs and expenses actually incurred by or on behalf of Landlord as
described in Section 24(b).  Any Deficiency shall be paid in monthly
installments by Tenant on the days specified in this Lease for payment of
installments of Basic Rent and Landlord shall be entitled to recover from Tenant
each monthly Deficiency as the same shall arise and no suit to collect the
amount of the Deficiency for any month shall prejudice Landlord’s right to
collect the Deficiency for any subsequent month by a similar proceeding.

 

(iii)                               In the event Landlord shall re-enter or take
possession of the Leased Property as provided in Section 24(b) without
terminating this Lease, then Landlord shall be entitled to recover from Tenant,
and Tenant shall pay to Landlord, on demand, in lieu of any further Deficiency
as and for liquidated and agreed final damages, a sum equal to the amount by
which the Rent for the period which otherwise would have constituted the
unexpired portion of the Term exceeds the then fair and reasonable rental value
of the Leased Property for the same period, both discounted to present worth at
an interest rate equal to five (5%) percent per annum less the aggregate amount
of Deficiencies theretofore collected by Landlord pursuant to the provisions of
Section 24(d)(ii) for the same period; if, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the Leased Property, or
any part thereof, shall have been relet by Landlord for the period which
otherwise would have constituted the unexpired portion of the Term, or any part
thereof, the amount of rent reserved upon such reletting shall be deemed, prima
facie, to be the fair and reasonable rental value for the part or the whole of
the Leased Property so relet during the term of the reletting.

 

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(e)                                  In the event of a breach by Tenant, or any
Persons claiming through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to enjoin such breach and the right to
invoke any other remedy allowed by law or in equity.  The right to invoke the
remedies set forth in this Lease is cumulative and shall not preclude Landlord
from invoking any other remedy allowed at law or in equity.

 

(f)                                    Notwithstanding anything contained herein
to the contrary, no shareholder, member, director, trustee, officer, employee,
agent or partner from time to time of Tenant shall be charged personally with
any liability by, or held liable to, any party hereto or by any Person claiming
through or under such party under any term or provision of this Lease, or by
virtue of its execution or attempted execution, or due to any breach, attempted
breach or alleged breach thereof.

 

(g)                                 Nothing in this Section 24 shall preclude
Tenant from paying any amount demanded by Landlord hereunder under protest and
Tenant’s payment under protest shall not be construed as a waiver of any of
Tenant’s rights and privileges hereunder.

 

25.                               Landlord Defaults.

 

(a)                                  Landlord shall be in default under this
Lease if (i) Landlord (A) fails to pay any payment required to be made to Tenant
hereunder for more than thirty (30) days after Landlord receives Notice of such
failure from Tenant; or (B) breaches any of its representations, warranties,
agreements or covenants set forth in Section 19 and such breach is not cured
within thirty (30) days of Landlord’s receipt of Notice of such breach from
Tenant (or such longer period as may be reasonably required to correct such
failure if such failure is not reasonably susceptible of cure within such thirty
(30) day period and Landlord shall commence to correct the same within thirty
(30) days after receipt of Notice and thereafter diligently pursues the
correction thereof until completion); or (C) fails to perform any other
obligation, agreement or condition to be performed by Landlord as contained in
this Lease (but not the Work Letter) and such failure is not corrected within
thirty (30) days after Landlord receives Notice from Tenant of such failure (or
such longer period as may be reasonably required to correct such failure if such
failure is not reasonably susceptible of cure within such thirty (30) day period
and Landlord shall commence to correct the same within thirty (30) days after
receipt of Notice and thereafter diligently pursues the correction thereof until
completion); or (D) Landlord defaults in the performance of any of its
obligations under the Work Letter and such default is not cured by Landlord
within any applicable cure period provided in the Work Letter; or (ii) any
Guarantor defaults under the Guaranty and such default is not cured before the
expiration of any applicable Notice and grace periods (a default set forth in
this Section 25(a) is referred to as a “Landlord Default”).

 

(b)                                 Upon the occurrence of a Landlord Default,
Tenant shall have the following rights and remedies, which rights and remedies
may be exercised upon or at any time, and from time to time, following the
occurrence of a Landlord Default:

 

(i)                                     Tenant may recover all sums payable by
Landlord, with interest thereon at the Overdue Rate, by appropriate legal
action, and/or to seek declaratory relief, injunctive relief

 

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or other equitable remedies, subject to any applicable limitations expressly set
forth elsewhere in this Lease.

 

(ii)                                  Tenant may exercise the remedies set forth
in Sections 25(c)-(f) below.

 

(iii)                               If such Landlord Default consists of a
failure on the part of Landlord to pay or credit any sum of money payable to or
on behalf of Tenant under this Lease (including, without limitation, any
contribution or allowance provided for under this Lease or reimbursement for
Tenant’s cost to give any Self-Help Items), and if such sum is not paid or
credited by Landlord within thirty (30) days following Notice thereof from
Tenant to Landlord stating in bold capitalized text that Tenant intends to
offset such liability or portion thereof against Tenant’s obligations to
Landlord under or on account of this Lease, then in addition to Tenant’s other
remedies hereunder, Tenant shall have the right to offset such amount (together
with interest on the unrecovered balance thereof at the Overdue Rate) against
one or more installments of Basic Rent and Additional Rent hereunder until paid
or reimbursed in full.  Notwithstanding the foregoing, in no event shall Tenant
have the right to withhold payments of Rent pursuant to this Section 25 unless
Tenant has filed a complaint in a court of competent jurisdiction asserting the
Tenant’s claims on which the claimed right of offset is based.  In addition, the
following limitations shall apply to Tenant’s right to offset against Basic Rent
and Additional Rent wherever permitted by this Lease, the Work Letter or
applicable law:  (A) prior to Tenant obtaining a judgment in its favor from a
court of competent jurisdiction, Tenant may only offset each month monthly
payments of Additional Rent (including, without limitation, Tenant’s payment of
Operating Expenses, Taxes and insurance premiums); (B) after Tenant obtains a
judgment in its favor from a court of competent jurisdiction, Tenant may offset
each month the full amount of monthly Basic Rent and Additional Rent; and
(C) notwithstanding clause (A) above and before obtaining a judgment, in the
event of a Landlord Default arising from Landlord’s failure (i) to fund the
Tenant Allowance, or (ii) to reimburse Tenant for the costs and expenses
incurred by Tenant in completing the Project or performing Restoration Work,
then Tenant may offset each month the full amount of monthly Basic Rent and
Additional Rent; provided, however, the amount subject to offset pursuant to
this Section may not exceed the amount of Tenant’s actual, reasonably documented
costs, expenses and damages suffered by reason of such failure.

 

(c)                                  If a Landlord Default involves any item of
work, maintenance, or repair or service with respect to:  (i) an item or
condition within the Leased Property which materially adversely impedes the
operation of Tenant’s business; (ii) an item or condition within the Leased
Property or the Park which materially adversely impedes Tenant’s access to the
Leased Property, Tenant’s operation of Tenant’s business at the Leased Property,
or Tenant’s parking; (iii) the roof of the Building; or (iv) the provision of
utilities to the Leased Property (any such Landlord Defaults, collectively,
“Self Help Items”), Tenant shall have the right (but not the obligation) to
perform and fulfill Landlord’s obligation with respect thereto subject to
Section 25(d) below (and Tenant shall have access to those portions of the Park
outside of the Leased Property which service the Leased Property in order to do
so).  If Tenant is performing any work on the roof of the Building, Tenant shall
do so using Landlord’s roofing contractor (or another contractor approved by the
then-current issuer of Landlord’s roof warranty) and in a manner that shall not
void Landlord’s roof warranty.  The extent of the work performed by Tenant in
curing any such default shall not

 

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exceed the work that is reasonably necessary to effectuate such remedy and the
cost of such work shall be reasonably prudent and economical under the
circumstances.

 

(d)                                 If Tenant believes that Landlord has failed
to perform any Self Help Item as required by this Lease, Tenant may give
Landlord a Notice (a “Self Help Notice”) of Tenant’s intention to perform such
Self-Help Item on Landlord’s behalf, which Notice shall contain a statement in
bold type and capital letters stating “THIS IS A SELF-HELP NOTICE” as a
condition to the effectiveness thereof.  If Landlord fails within ten (10) days
after its receipt of such Self-Help Notice (or within one (1) Business Day after
its receipt of such Self-Help Notice in the event that such failure is causing a
material disruption to Tenant’s operations at the Leased Property) to commence
(and thereafter continue to diligently perform) the cure of such Self-Help Item,
then Tenant shall have the right, but not the obligation, to commence and
thereafter diligently prosecute the cure of such Self-Help Item in accordance
with the provisions of this Section 25(d) at any time thereafter, but prior to
the date on which Landlord commences to cure such Self-Help Item.

 

(e)                                  Landlord shall reimburse Tenant in the
amount of all reasonable costs and expenses (including reasonable attorneys’
fees and expenses) incurred by Tenant to complete such Self-Help Item within
twenty (20) days after receipt of written demand, together with interest thereon
at the Overdue Rate from the date same were incurred through the date of
reimbursement.

 

(f)                                    In the event of a breach or threatened
breach by Landlord, or any Persons claiming through or under Landlord, of any
term, covenant or condition of this Lease, Tenant shall have the right to enjoin
such breach and the right to invoke any other remedy allowed by law or in
equity.  The right to invoke the remedies set forth in this Lease are cumulative
and shall not preclude Tenant from invoking any other remedy allowed at law or
in equity.

 

(g)                                 Notwithstanding anything contained herein to
the contrary, no shareholder, member, director, trustee, officer, employee,
agent or partner from time to time of Landlord shall be charged personally with
any liability by, or held liable to, any party hereto or by any Person claiming
through or under such party under any term or provision of this Lease, or by
virtue of its execution or attempted execution, or due to any breach, attempted
breach or alleged breach thereof.

 

26.                               Governmental Incentives.  Landlord and Tenant
agree to cooperate with each other and use commercially reasonable efforts to
seek to obtain any Governmental Incentives for the Project. Such cooperation and
efforts shall include, without limitation, gathering information required by any
applications and submissions for any Governmental Incentives, submitting and
executing any required applications and documentation in order to obtain such
Governmental Incentives and pursuing the issuance of any such Governmental
Incentive from the applicable Governmental Authority.  If any Governmental
Incentive is obtained for the Project, Tenant shall have the right to allocate
such Governmental Incentives to the costs of the TI Work and/or the Base Project
Work.  With respect to those Governmental Incentives that contain specific
restrictions or allocation requirements, the amount of such Governmental
Incentives shall be allocated in accordance with the terms and restrictions
governing such Governmental Incentive.

 

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The amount of any Governmental Incentive applied to the cost of the Base Project
Work shall lower, on a dollar for dollar basis, the Project Costs.

 

27.                               Surrender; Holdover.

 

(a)                                  After the Term ends, Tenant shall peaceably
leave and surrender the Leased Property to Landlord in good order, condition,
and repair, ordinary wear and tear excepted, and in accordance with the
requirements of Section 16 of this Lease, including the removal of any
Alterations that Tenant is required to remove under Section 16, which
obligations shall survive the end of the Term.  On or before the end of the
Term, Tenant shall remove from the Leased Property all of Tenant’s Property
situated thereon, and shall repair any damage caused by such removal.  Property
not so removed shall become Landlord’s property.  Tenant represents and warrants
that any property left at the Leased Property shall have been owned by the
Tenant free and clear of any liens or other encumbrances.  Landlord may cause
such property to be removed from the Leased Property and disposed of without
accountability to Tenant, it being understood that Tenant shall reimburse
Landlord for the reasonable costs and expenses incurred by Landlord in removing
and disposing of such property.  Tenant shall pay the cost of such removal and
disposition and of repairing any damage caused by such removal, which obligation
shall survive the end of the Term.  Except for surrender at the end of the Term,
no surrender to Landlord of this Lease or of the Leased Property shall be valid
or effective unless agreed to in writing by Landlord.

 

(b)                                 If Tenant holds over after the end of the
Term, without derogating from any of Landlord’s rights hereunder and without
granting any rights of possession to Tenant, Tenant shall pay to Landlord upon
demand, as Landlord’s sole measure of monetary damages on account of such
holdover and as liquidated damages (and not as a penalty), a use and occupancy
fee for the period Tenant holds over equal to (a) for a period ending on the
first to occur of forty-five (45) days following the end of the Term, or
Landlord’s providing Tenant Notice that Landlord has entered into a commitment
to lease the Leased Property, or any other contractual commitment with respect
to the Leased Property which would be adversely affected by Tenant’s continued
possession of the Leased Property following the expiration of the Term
(collectively a “Replacement Commitment”), one hundred fifty (150%) percent of,
and (b) thereafter, two hundred (200%) percent of, the Basic Rent payable
immediately before the end of the Term, prorated on a daily basis, plus all
Additional Rent Tenant would have been liable to pay had this Lease not ended.

 

28.                               Notices.  All Notices shall be in writing and
shall be effective for all purposes (a) three (3) Business Days after having
been sent by United States Mail, registered or certified mail, postage prepaid
with return receipt requested, (b) one (1) Business Day after having been sent
for overnight delivery by a nationally recognized overnight delivery service or
(c) on the date of delivery after having been sent for hand delivery by
reputable delivery service, to the parties’ addresses as follows:

 

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If to Landlord:

c/o The Hankin Group

 

707 Eagleview Boulevard

 

Exton, PA 19341

 

Fax No.: 610-458-0764

 

Attention: Robert S. Hankin, President

 

 

with a copy to:

Riley Riper Hollin & Colagreco

 

P.O. Box 1265

 

717 Constitution Drive

 

Exton, PA 19341

 

Fax No.: 610-458-4441

 

Attention: Edward J. Hollin, Esquire

 

 

If to Tenant:

West Pharmaceutical Services, Inc.

 

101 Gordon Drive

 

Lionville, PA 19341

 

Fax No.: 610-594-3003

 

Attention: General Counsel

 

 

with a copy to:

Ballard Spahr LLP

 

1735 Market Street

 

51st Floor

 

Philadelphia, PA 19103-7599

 

Fax No.: 215-864-9895

 

Attention: Bart I. Mellits, Esquire

 

Notice by fax shall be effective upon verified delivery of the fax, so long as a
copy of the Notice is sent by one of the other methods provided for above.  Both
parties and Lender may change the address or fax number where Notices are to be
sent by giving the other party (or parties) ten (10) days’ prior written Notice
of such change in the manner provided in this Section 28 for giving Notice.  Any
Notice may be given on behalf of any party by its counsel.

 

29.                               Estoppel Certificates.  From time to time
during the Term, Landlord and Tenant will promptly, but in no event later than
ten (10) Business Days after request by the other party hereto or Lender,
execute, acknowledge and deliver to such other party (and, on request, to any
current or prospective mortgagee or prospective purchaser) a certificate in
writing, certifying, to such Party’s Actual Knowledge, (a) that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that this Lease is in full force and effect as modified, and setting forth any
modifications); (b) the dates to which Basic Rent, Additional Rent and other
sums payable hereunder have been paid; (c) whether or not there is an existing
Default by Tenant in the payment of Basic Rent, Additional Rent or any other sum
required to be paid hereunder, and whether or not there is any other existing
Default by Tenant with respect to which a Notice of Default has been served or
of which the signer has Actual Knowledge, and, if there is any such Default,
specifying the nature and extent thereof; (d) stating that Tenant is in
possession of the Leased Property or setting forth the parties in possession and
identifying the instruments pursuant to which they took possession; and
(e) stating such other information with respect to the Leased Property and/or
this Lease as may be reasonably requested.

 

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30.                               No Merger.  There shall be no merger of this
Lease or of any sublease under this Lease or of any leasehold or subleasehold
estate hereby or thereby created with the fee or any other estate or ownership
interest in the Leased Property because the same Person may acquire or own or
hold, directly or indirectly, (a) this Lease or any sublease or any leasehold or
subleasehold estate created hereby or thereby or any interest in this Lease or
any such sublease or in any such leasehold or subleasehold estate and (b) the
fee estate or other estate or ownership interest in the Leased Property.

 

31.                               OFAC/Patriot Act.

 

(a)                                  At all times throughout the Term, Tenant
and all of its respective Affiliates shall (and Tenant shall provide in any
sublease that any subtenant shall) (i) not be a Prohibited Person; (ii) not
knowingly engage in any dealings or transactions that evade or avoid, or have
the purpose of evading or avoiding, or attempting to violate any Prescribed
Laws, or be otherwise associated with or engaged in business with any Prohibited
Person; (iii) be in full compliance with all applicable orders, rules,
regulations and recommendations of OFAC (including those executive orders and
lists published by OFAC with respect to Prohibited Persons); and (iv) otherwise
be in full compliance with all Prescribed Laws.

 

(b)                                 At all times throughout the Term, Landlord
and all of its respective Affiliates shall (i) not be a Prohibited Person;
(ii) not knowingly engage in any dealings or transactions that evade or avoid,
or have the purpose of evading or avoiding, or attempting to violate any
Prescribed Laws, or be otherwise associated with or engaged in business with any
Prohibited Person; (iii) be in full compliance with all applicable orders,
rules, regulations and recommendations of OFAC (including those executive orders
and lists published by OFAC with respect to Prohibited Persons); and
(iv) otherwise be in full compliance with all Prescribed Laws.

 

32.                               Separability.  Each agreement contained in
this Lease shall be a separate and independent agreement and the breach of any
such agreement by one Party shall not discharge or relieve the other Party from
its obligation to perform each obligation of this Lease to be performed by such
other Party. If any term or provision of this Lease or the application thereof
to any Person or circumstance shall to any extent be invalid and unenforceable,
the remainder of this Lease, or the application of such term or provision to
Persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforceable to the extent permitted by law.

 

33.                               WAIVER OF TRIAL BY JURY.  TO THE FULLEST
EXTENT PERMITTED BY LAW, LANDLORD AND TENANT WAIVE ANY RIGHT TO TRIAL BY JURY IN
ANY LITIGATION BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS LEASE OR THE LEASED PROPERTY AND AGREE NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY.

 

34.                               Recording.  Upon Tenant’s request, Landlord
and Tenant will, at Tenant’s sole expense, execute, acknowledge, deliver and
cause to be recorded or filed or registered and re-recorded, re-filed or
re-registered in the manner and place required by any present or future law, the
memorandum of lease attached hereto as Exhibit M (the “Lease Memorandum”), and
all other

 

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instruments, including, releases and instruments of similar character, which
shall be reasonably requested by Landlord or Tenant as being necessary or
appropriate to protect their respective interests in the Leased Property.  After
the termination of this Lease, Tenant shall cause to be filed of record in the
Office of the Recorder of Deeds in and for Chester County, Pennsylvania, an
instrument confirming such termination, which instrument shall expressly
reference the recording information assigned to the recorded Lease Memorandum,
and waive and relinquish any leasehold interest, possessory rights or other
property interest of any kind in and to the Leased Property. This obligation
shall survive the termination of this Lease.

 

35.                               Landlord’s Right of Entry.  Throughout the
Term, upon not less than three (3) Business Days’ Notice to Tenant, Landlord may
show the Leased Property to prospective purchasers or lenders, and during the
last 24 months of the Term, prospective tenants, and their respective
representatives during normal business hours as Landlord may elect, subject to
reasonable restrictions that Tenant may impose.

 

36.                               Right of First Offer on Space within Park.

 

(a)                                  So long as this Lease is in full force and
effect and no Event of Default has occurred and is continuing under this Lease,
Tenant shall have a right of first offer (“ROFO”), from time to time, to lease
space within buildings in the section of the Park designated on Exhibit P
attached hereto (the “ROFO Area”) which are owned, leased or then-controlled by
Landlord or an Affiliate of Landlord which becomes available during the Term
(the “Additional Space”) by sending Notice to Landlord of Tenant’s desire to
expand its business operation beyond the Leased Property, which Notice shall
contain an estimate of the amount of RSF, the term, the general nature of the
space and an estimate of the proposed possession date that Tenant is seeking
(the “Expansion Notice”).  Within thirty (30) days following Landlord’s receipt
of the Expansion Notice, Landlord shall provide Notice to Tenant (“Notice of
Availability”) of the Additional Space in the ROFO Area that is available.  With
each Notice of Availability, Landlord shall include a term sheet proposal
(containing, among other things, the Net Effective Rent for such Additional
Space) (the “ROFO Proposal”) to lease such Additional Space that generally
matches Tenant’s requirements set forth in the Expansion Notice on such proposed
terms as Landlord is willing to accept for such space.  In addition, if the ROFO
is not suspended for one (1) year as provided in Section 36(b) below, for a
period of six (6) months after Landlord’s receipt of the Expansion Notice,
Landlord shall send updated Notices of Availability to Tenant from time to time
as and when any new Additional Space becomes available.  Tenant shall have the
right to exercise the ROFO as to any such new available Additional Space in the
same manner for any previous available Additional Space.

 

(b)                                 Tenant shall have fifteen (15) Business Days
from receipt of a Notice of Availability (the “ROFO Period”) in order to
exercise its rights hereunder and expand the Leased Property to include the
Additional Space, by counter-signing and delivering to Landlord at least one
(1) counterpart of the ROFO Proposal (“ROFO Acceptance”).  If Tenant issues the
ROFO Acceptance, Landlord and Tenant shall execute an amendment to this Lease
incorporating the ROFO Proposal, or if the Additional Space is owned by
Landlord’s Affiliate, Tenant shall execute, and Landlord shall cause such
Affiliate to execute, a lease for the Additional Space using this Lease as a
form and incorporating the terms of the ROFO Proposal (in either case, a “ROFO
Lease”), within fifteen (15) days following issuance of the ROFO Acceptance.

 

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(i)                                     If Tenant fails to accept or reject such
Additional Space within the ROFO Period, then, for the one (1) year period
following the expiration of the applicable ROFO Period, Landlord may proceed to
lease any and all space within the ROFO Area to any third party on such terms
and conditions as Landlord shall elect in the exercise of its sole and absolute
discretion and the ROFO as provided in this Section 36 shall be void until
Tenant next sends to Landlord an Expansion Notice following the expiration of
such one (1) year period.

 

(ii)                                  If Tenant elects not to accept the ROFO
Proposal for the Additional Space, Tenant may submit a ROFO Proposal for such
Additional Space acceptable to Tenant containing the Net Effective Rent for such
Additional Space within such fifteen (15) Business Day period (the “Tenant
Proposal”).  If Landlord elects not to accept the Tenant Proposal for such
Additional Space, then, for the one (1) year period following the expiration of
the applicable ROFO Period, Landlord may proceed to lease such Additional Space
set forth in the Notice of Availability to any third party on such terms and
conditions as Landlord shall elect in the exercise of its sole and absolute
discretion; provided, however, if Landlord is proposing Net Effective Rent for
such space which is equal to or less than the Net Effective Rent set forth in
the Tenant Proposal, then, Landlord shall send Tenant a new Notice of
Availability, including such terms and conditions as Landlord is offering, and
Tenant shall have five (5) Business Days (the “Additional ROFO Period”) to
exercise its rights hereunder and expand the Leased Property to include the
Additional Space by delivering to Landlord a Notice that Tenant wishes to accept
Landlord’s terms and conditions for such Additional Space.  If Tenant elects not
to lease such Additional Space or fails to accept or reject such Additional
Space within the Additional ROFO Period, then Landlord may proceed to lease such
space to any third party on such terms and conditions as Landlord shall elect in
the exercise of its sole and absolute discretion.

 

(iii)                               In the event Tenant fails to timely execute
a ROFO Lease with respect to Additional Space which was the subject of a ROFO
Acceptance, and such failure continues for thirty (30) days after Tenant’s
receipt of Notice from Landlord that the Lease is complete, is in compliance
with this Section and is ready for execution, then Landlord shall be entitled to
negotiate with one or more unrelated third parties, and Landlord shall be
entitled to enter into a lease on such terms, covenants, conditions and
agreements as Landlord shall elect in its sole discretion with any third party,
and such Additional Space shall thereafter be released from and no longer be
subject to Tenant’s ROFO rights.

 

(c)                                  Tenant’s ROFO rights shall not run with the
land and shall cease with respect to any building in the ROFO Area owned by
Landlord or an Affiliate of Landlord which is then the subject of an agreement
of sale or signed letter of intent unless closing fails to occur thereunder.  In
addition, Tenant acknowledges that it is the policy of Landlord and its
Affiliates to give preference to existing tenants to have the opportunity to
remain in space leased by them prior to making such space available for lease to
third parties, regardless of whether such tenants have options to extend or
renew.  Accordingly, Tenant’s ROFO rights shall be subject and subordinate to
(1) any preexisting rights granted by Landlord or any Affiliate of Landlord to
any tenant of any space within the ROFO Area (collectively “Existing Affected
Tenants”), having an option to extend or renew its lease, and (2) the right of
Landlord or Landlord’s Affiliate to offer an Existing Affected Tenant which does
not have such an option to extend or renew its lease, the right to extend or
renew its lease without including the space leased by such Tenant in a Notice of
Availability.

 

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(d)                                 Tenant shall maintain in strict confidence
the Notice of Availability and the ROFO Proposal, and shall not disclose the
same except to such of its agents and representatives who have the need to know
the contents thereof, and shall cause such agents and representatives to
maintain the contents of the Notice of Availability and the ROFO Proposal in
confidence.  Any disclosure by any such Person in violation of the covenants of
this paragraph shall be a material Event of Default by Tenant under this Lease,
which shall not be subject to cure.

 

37.                               Miscellaneous.

 

(a)                                  This Lease shall bind and inure to the
benefit of and be enforceable by the Parties hereto and their respective
successors and assigns permitted hereunder.  Nothing herein shall restrict
Landlord’s right to convey the Leased Property or interests therein or interests
in Landlord without Tenant’s consent.

 

(b)                                 If either Party, in its reasonable judgment,
should require the other Party to execute any additional documents or assurances
to further document or affirm compliance with such other Party’s agreements
hereunder or under any related documents, then such other Party shall promptly
comply with such request(s) and execute such documents or assurances as the
requesting Party may require in its reasonable judgment.

 

(c)                                  This Lease sets forth the entire agreement
and understanding of the Parties hereto with respect to the specific matters
agreed to herein and supersedes all prior agreements or understandings between
the Parties with respect to the matters contained herein, except insofar as the
Guaranty governs any matters set forth therein. The Parties hereto acknowledge
that no oral or other agreements, understandings, representations or warranties
exist with respect to this Lease or with respect to the obligations of the
parties hereto under this Lease, except those specifically set forth in this
Lease or the Guaranty.  This Lease may not be amended, changed, waived,
discharged or terminated in whole or in part except by a written instrument duly
executed by Landlord and Tenant.

 

(d)                                 No failure, delay, forbearance or indulgence
on the part of any party to insist upon the strict performance of any provision
or to exercise any option, right, power, remedy or privilege hereunder shall
operate as a waiver or relinquishment thereof, nor shall any single or partial
exercise of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

(e)                                  This Lease and the rights and obligations
in respect hereof shall be governed by, and construed and interpreted in
accordance with, the laws of the state within which the Leased Property is
located.

 

(f)                                    All headings are for reference only and
shall not be considered as part of this Lease.

 

(g)                                 This Lease may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute a single instrument.

 

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(h)                                 TIME IS OF THE ESSENCE as to the periods set
forth pursuant to each provision of this Lease, subject nevertheless to
Unavoidable Delay as provided in this Lease and the Work Letter.

 

(i)                                     Recourse for Landlord’s breach of any
obligation hereunder shall be limited to Landlord’s interest in the Leased
Property including all rentals, reimbursements, insurance proceeds, condemnation
awards, sale proceeds and loan proceeds, and in no event shall Tenant have
recourse to Landlord personally, or its members, managers, shareholders,
directors, trustees or beneficiaries or to any other assets of Landlord.

 

(j)                                     In any litigation or other proceeding by
which one party either seeks to enforce its rights under this Lease (whether in
contract, tort or both), or seeks a declaration of any rights or obligations
under this Lease, the prevailing party shall be awarded its reasonable attorney
fees, and costs and expenses incurred.

 

38.                               Representations.

 

(a)                                  Tenant represents and warrants to Landlord
that the following are true as of the date hereof:

 

(i)                                     Status.  Tenant is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania and qualified to do business in, and in good
standing under the laws of, the state in which the Leased Property is located. 
Tenant has the necessary corporate power and authority to own its assets and to
conduct its business as now conducted and to enter into and deliver this Lease
and to perform the transactions contemplated hereby.

 

(ii)                                  Due Authorization; No Conflict.  This
Lease has been duly authorized by all necessary corporate action on the part of
Tenant and has been duly executed and delivered by Tenant, and the execution,
delivery and performance hereof by Tenant will not (A) require any approval or
consent of any trustee or holder of any indebtedness or obligation of Tenant or
any approval or consent of any Governmental Authority, other than such consents
and approvals as have been obtained, (B) contravene any Legal Requirements
applicable to Tenant or (C) contravene or result in a Default under Tenant’s
charter or by-laws or other organizational documents, or any indenture,
mortgage, loan agreement, contract, partnership or joint venture agreement,
lease or other agreement or instrument to which Tenant is a party or by which
Tenant is bound, to the extent that such Default would have a Material Adverse
Effect on Tenant’s ability to perform its obligations under this Lease.

 

(iii)                               Bankruptcy.  No bankruptcy, reorganization,
arrangement or insolvency proceedings are pending, threatened or contemplated by
Tenant.  Tenant has not made a general assignment for the benefit of creditors
and Tenant is able to pay its debts as they become due.

 

(iv)                              Pending Actions.  There are no actions, suits,
investigations or other proceedings at law or in equity or by or before any
Governmental Authority now pending or, to Tenant’s Actual Knowledge, threatened
against or affecting Tenant which, if adversely determined individually or in
the aggregate, would prevent the consummation of the transaction contemplated by
the Lease, or impair Tenant’s ability to perform its obligations under this
Lease.

 

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(b)                                 Landlord represents and warrants to Tenant
that the following are true as of the date hereof:

 

(i)                                     Status.  Landlord is a Pennsylvania
limited partnership duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania and qualified to do business in,
and in good standing under the laws of, the state in which the Leased Property
is located.  Landlord has the necessary partnership power and authority to own
its assets and to conduct its business as now conducted and to enter into and
deliver this Lease and to perform the transactions contemplated hereby;

 

(ii)                                  Due Authorization; No Conflict.  This
Lease has been duly authorized by all necessary partnership action on the part
of Landlord and has been duly executed and delivered by Landlord, and the
execution, delivery and performance hereof by Landlord will not (A) require any
approval or consent of any trustee or holder of any indebtedness or obligation
of Landlord or any approval or consent of any Governmental Authority, other than
such consents and approvals as have been obtained; with the exception of
building permits and governmental approvals required prior to issuance of
building permits for the construction of the Base Project Work and the Tenant
Improvements (including, without limitation, subdivision and land development),
(B) contravene any Legal Requirements applicable to Landlord; or (C) contravene
or result in a Default under Landlord’s charter or by-laws or other
organizational documents, or any indenture, mortgage, loan agreement, contract,
partnership or joint venture agreement, lease or other agreement or instrument
to which Landlord is a party or by which Landlord is bound, to the extent that
such Default would have a Material Adverse Effect on Landlord’s ability to
perform its obligations under this Lease;

 

(iii)                               Bankruptcy.  No bankruptcy, reorganization,
arrangement or insolvency proceedings are pending, threatened or contemplated by
Landlord.  Landlord has not made a general assignment for the benefit of
creditors and Landlord is able to pay its debts as they become due;

 

(iv)                              Pending Actions.  There are no actions, suits,
investigations or other proceedings at law or in equity or by or before any
Governmental Authority now pending or, to Landlord’s Actual Knowledge,
threatened against or affecting Landlord which, if adversely determined
individually or in the aggregate, would prevent the consummation of the
transaction contemplated by the Lease, impair Landlord’s ability to perform its
obligations under this Lease;

 

(v)                                 As of the Effective Date, Landlord has good
and marketable fee simple title to the Existing Land, free and clear of all
easements, restrictions, liens, encumbrances, leases and the like
(“Encumbrances”), except for the Permitted Encumbrances. In addition, at the
time Landlord acquires title to the Additional Land, Landlord shall have good
and marketable fee simple title to the Additional Land, free and clear of all
Encumbrances, except for the Permitted Encumbrances.  Landlord has no Actual
Knowledge of any other Encumbrances affecting the Land except as set forth in
this Section;

 

(vi)                              To Landlord’s Actual Knowledge, Tenant’s use
of the Leased Property for the Permitted Use will not violate any Legal
Requirements or any restriction, covenant, easement or agreement affecting the
Leased Property;

 

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(vii)                           The Leased Property now has, and, on the
Commencement Date, shall have, access to and from Regency Drive, for the passage
of vehicular traffic;

 

(viii)                        This Lease does not violate the provisions of any
instrument heretofore executed and/or binding on Landlord, or affecting or
encumbering the Leased Property or the Park, and no rights granted by Landlord
to Tenant under the terms of this Lease conflict with any rights granted by
Landlord or any Affiliate of Landlord to any other tenant or occupant of the
Park;

 

(ix)                                There shall be no restrictions or other
legal impediments imposed by any public or private instrument which would
prevent: (i) the use of the Leased Property for the Permitted Use; or (ii) the
use of the parking facilities, access roads, and other Common Areas in the
manner contemplated by this Lease;

 

(x)                                   With respect to the environmental
condition of the Leased Property, (A) Landlord has received no notices
concerning the environmental condition of the Park, the Leased Property or any
Adjoining Property; (B) Landlord has no Actual Knowledge of, and has received no
Notice of, any violation, or potential or alleged violation, of any Legal
Requirements, including, without limitation, Environmental Laws, affecting the
Park, the Leased Property or any Adjoining Property, regardless of whether same
has been cured; and (C) to the best of Landlord’s Actual Knowledge: (x) no
Hazardous Substances are located at, on, in, under or emanating from the Park,
the Leased Property or any Adjoining Property, and (y) no underground storage
tank exists at the Real Property;

 

(xi)                                As of the Effective Date:  (A) Landlord is
the optionee under that certain Purchase and Sale Option Agreement dated
December 2, 2010 by and between Marsh Creek Realty III Business Trust, as
seller, and Landlord, as purchaser, with respect to the Additional Land (the
“Contract”); (B) the Contract is in full force and effect; (C) it has not
delivered or received any Notice of Default, and has no knowledge of any
condition or circumstance which with Notice or the lapse of time, or both, could
become a default, under the Contract; and (D) the Additional Land consists of
approximately 6.424 acres, and currently constitutes all of the property to be
purchased under the Contract.  Landlord shall proceed diligently and in good
faith to acquire fee title to the Additional Land under the Contract.

 

39.                               Use of Roof.  Landlord and Tenant agree that
Tenant shall have the exclusive right, subject to the terms, conditions, and
requirements of this Section, to install, maintain, upgrade, operate, repair and
replace, at Tenant’s cost, on the roof of the Building equipment in support of
Tenant’s occupancy of the Building, including without limitation, one or more
Rooftop Communications Devices for the use of occupants of the Building in the
operation of their business within and outside of the Building only (for
purposes hereof, “Rooftop Communications Devices” or “RCD”), which may include,
without limitation, transmitter(s), microwave or satellite dish(es) or
antenna(s) or other communications fixtures or equipment utilized for receiving
or transmitting voice, video, data or other communications, together with all
wiring, equipment and facilities reasonably necessary to make same functional
and connected with the Building), including, without limitation, the right to
interconnect the RCD with Tenant’s other equipment located in the Building using
risers, conduits and chases.  As to any Rooftop Communications Device Tenant
desires to install, Tenant shall notify Landlord of Tenant’s

 

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desire to install such, identifying the type, size, dimensions, energy
requirements, proposed use, and pertinent plans and specifications related to
such RCD. Landlord shall review such information, and within a reasonable time
not to exceed fifteen (15) days after receipt thereof, approve Tenant’s plans or
state any reasonable objections thereto, which Tenant shall reasonably
accommodate.  It shall not be an unreasonable objection for Landlord to require
visual screening of any RCD, and to require any RCD to be approved by the
Architectural Review Committee of ECCA.  Landlord’s right to approve Tenant’s
plans for the RCD shall be subject to the condition that Landlord shall not
unreasonably withhold, condition or delay such approval.  Tenant shall use
Landlord’s roofing contractor (or another contractor approved by the issuer of
Landlord’s roofing warranty) to perform any roof penetrations so as to not void
the warranty for the roof of the Building; provided such contractor’s work is
priced at market rates and such contractor is of a size, sophistication and
quality reasonably acceptable to Tenant.  Tenant shall give Landlord not less
than twenty-four (24) hours prior Notice before commencing any installation of
RCDs to allow a representative of Landlord to observe such installation.  Tenant
shall pay all costs and expenses of operating all RCDs which Tenant places on
the roof of the Building.  Tenant shall be obligated to remove all RCDs which
Tenant places on the roof of the Building within thirty (30) days after the
expiration of the Term of this Lease, at Tenant’s expense.  Tenant shall be
obligated to close any penetration to the roof of the Building by the wires,
conduits or cables installed by Tenant.  Tenant’s RCD shall be a trade fixture,
shall be and remain the property of Tenant, and shall be removable by Tenant at
any time. Tenant shall pay for all costs of repairing and maintaining the RCD. 
Tenant shall indemnify, defend and hold harmless Landlord with respect to any
costs, damages, claims, suits or actions arising in connection with Tenant’s
violation of its obligations under this Section 39.

 

40.                               Signs; Naming Rights, etc.

 

(a)                                  Landlord shall provide Tenant an exterior
monument sign (as part of the Base Project Work) and Building lobby directory,
signage at the entrance to the Building and signage at other places within the
Building (all of which shall be installed by Landlord as part of the Tenant
Improvements, and shall be maintained by Landlord as an Operating Expense). 
Landlord shall use commercially reasonable efforts to obtain any required
permits and approvals associated with such signage, including ECCA approval, and
Tenant shall cooperate with Landlord in such efforts to the extent requested by
Landlord.  Except for signs which are located wholly within the interior of the
Leased Property and which are not visible from the exterior of the Leased
Property, Tenant shall not place or erect any signs upon the Building or at any
exterior location of the Leased Property unless the design of such signs are
approved by Landlord in writing (which approval shall not be unreasonably
withheld, conditioned or delayed) and comply with the Legal Requirements and the
Declaration.

 

(b)                                 In addition, Tenant shall have the exclusive
naming rights to the Building subject to Landlord’s consent, not to be
unreasonably withheld, conditioned or delayed (the “Approved Building Name”).
Tenant may change the Approved Building Name from time to time at Tenant’s
election, at Tenant’s sole cost and expense, and subject to Landlord’s consent
(not to be unreasonably withheld, conditioned or delayed).  When referring to
the Building, Landlord shall use commercially reasonable efforts to refer to the
Building using the Approved Building Name.  The name of the Building and the
name by which the Building is identified publicly, at the Building, in all
public announcements and communications, and in all promotional materials and

 

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other documents for public distribution or for use in connection with the
leasing, operation and promotion of the Building and the Project, and on all
signage, shall be the Approved Building Name, and shall not be changed by
Landlord without Tenant’s prior written consent, which consent Tenant may give
or withhold in Tenant’s sole discretion. The style, color(s) and font(s) of the
Approved Building Name shall be selected by Tenant, in Tenant’s sole
discretion.  Nothing contained herein shall be deemed to grant to Landlord or to
anyone else any license, right or interest in the Approved Building Name,
excepting only the right to utilize the Approved Building Name in connection
with the name of the Building and related signage and promotional materials,
insofar as necessary to carry out the intent of this Section 40(b).  Following
the expiration or earlier termination of this Lease, or at such earlier time as
Tenant shall direct, Landlord shall (at Tenant’s sole cost and expense), remove
and expunge from the Building each instance of the Approved Building Name.  All
signage and other media bearing the Approved Building Name and paid for by
Tenant (directly or by reimbursement to Landlord or others) shall be and remain
the property of Tenant and may be removed and disposed of (including used for
any other purposes at other locations) by Tenant in Tenant’s discretion at such
time as the rights of Tenant under this Section 40(b) shall expire or be
terminated or such signage or other media shall otherwise be removed or replaced
(and in such case Tenant shall repair any damage to the Building caused by such
removal or replacement).  Landlord shall not, without the consent of Tenant,
which consent may be given or withheld in Tenant’s sole discretion, use or
permit the use of the Approved Building Name for any other purpose.  Nothing in
this Section shall permit Tenant to place any signage on the exterior of the
Building.

 

41.                               Security Deposit.  As security for the
performance by Tenant of all of the terms, covenants and conditions of this
Lease to be performed by Tenant, Tenant shall provide Landlord a security
deposit equal to one (1) month’s Basic Rent (the “Security Deposit”). The
Security Deposit shall be delivered by Tenant to Landlord within ten (10) days
after the date that Landlord has delivered to Tenant evidence, reasonably
satisfactory to Tenant, that Landlord has incurred more than $760,000 of Project
Costs (exclusive of all Land Costs) (the “Project Cost Confirmation Date”).  The
Security Deposit shall be held in accordance with the terms of this Section 41
and shall be made, at Tenant’s election, in cash or in the form of an
unconditional, irrevocable letter of credit with a term of not less than one
(1) year to be deposited with Landlord, in the amount of the Security Deposit,
which letter of credit shall be in form and substance and issued by a lending
institution reasonably acceptable to Landlord.  Tenant shall deliver to Landlord
a replacement letter of credit not later than thirty (30) days before the
expiration of any current letter of credit on deposit with Landlord.  If cash is
deposited, Landlord shall segregate such Security Deposit from any other funds
of Landlord in an interest bearing escrow account (the “Deposit Account”), and
interest earned on such Security Deposit shall become part of the Security
Deposit.  The Security Deposit shall be returned to Tenant (or the letter of
credit evidencing the Security Deposit released) within thirty (30) days after
the expiration of the Term hereof, provided Tenant has fully performed its
obligations hereunder.  Landlord shall have the right, following the occurrence
of an Event of Default, to apply any part of said Security Deposit to cure such
Default and if Landlord does so, Tenant shall upon demand deposit with Landlord
the amount so applied so that Landlord shall have the full Security Deposit on
hand at all times during the Term of this Lease.  In the event of a sale of the
Leased Property by Landlord, Landlord shall transfer the Security Deposit to the
successor Landlord, and Landlord shall thereupon be released from all liability
for the return of such Security Deposit.  If a letter of credit is deposited,
within thirty (30) days of Landlord’s request, Tenant

 

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shall cause a new letter of credit (or an amendment to the then-existing letter
of credit) to be issued naming the successor Landlord as the beneficiary
thereunder. Once the Security Deposit is transferred to the successor Landlord,
Tenant shall look solely to the successor Landlord for the return of said
Security Deposit.  This provision shall apply to every transfer or assignment
made of the Security Deposit to a successor Landlord.  The Security Deposit
shall not be assigned or encumbered by Tenant without the prior written consent
of Landlord and any such unapproved assignment or encumbrance shall be void.  In
addition to the Security Deposit, within ten (10) days after the Project Cost
Confirmation Date, Tenant shall deposit with Landlord an amount reasonably
estimated by Tenant to equal one month of Basic Rent (“Estimated First Month
Rent”) to be held by Landlord in escrow in the Deposit Account to be applied by
Landlord, no sooner than the Commencement Date, solely to the first month’s
payment of Basic Rent.  If all of such amount is not applied, then any remaining
balance shall be held until the following Basic Rent Payment Date until
exhausted.  If this Lease is terminated for any reason prior to the Commencement
Date, Landlord shall immediately return to Tenant the Estimated First Month
Rent, plus interest. Notwithstanding any provision contained in this Section 41
or elsewhere in this Lease, in no event shall the aggregate amount of the
Security Deposit and the Estimated First Month Rent exceed $680,000, and if such
aggregate amount does exceed $680,000, then the amount of the Estimated First
Month Rent shall be reduced so that the aggregate amount of the Security Deposit
and the Estimated First Month Rent does not exceed $680,000.

 

42.                               Real Estate Brokers.

 

(a)                                  Tenant represents that Tenant has dealt
directly with and only with Tactix Real Estate Advisors, LLC (“Broker”) (whose
commission shall be paid by Landlord pursuant to separate agreement), in
connection with this Lease and agrees to defend, indemnify and save harmless
Landlord against all claims, liabilities, losses, damages, costs and expenses
(including reasonable attorneys’ fees and other costs of defense) arising from
Tenant’s breach of this representation.

 

(b)                                 Landlord represents that Landlord has dealt
directly with and only with Broker (whose commission shall be paid by Landlord
pursuant to separate agreement), in connection with this Lease and Landlord
hereby agrees to defend, indemnify and save harmless Tenant against all claims,
liabilities, losses, damages, costs and expenses (including reasonable
attorneys’ fees and other costs of defense) arising from Landlord’s breach of
this representation.

 

43.                               Option to Purchase.

 

(a)                                  Tenant shall have the option to purchase
the Leased Property from Landlord for the purchase price set forth in
Section 43(b) below (the “Option to Purchase”), to be exercised by giving Notice
to Landlord (“Tenant’s Option Notice”) during the period beginning on the
Effective Date and ending on the later to occur of (i) ten (10) days after the
date that Tenant receives either a copy of the first building permit authorizing
the construction of the foundation portion of the Base Project Work, or a copy a
written valid authorization issued by Uwchlan Township which is the functional
equivalent of a building permit authorizing the construction of the foundation
(collectively, the “Foundation Permit”), and (ii) twenty (20) days after Tenant
receives Notice from Landlord that Landlord intends to obtain (and has a good
faith reason to

 

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believe that it will obtain) the first building permit authorizing construction
of the Base Project Work within twenty (20) days of the date of such Notice. 
Notwithstanding the foregoing, in no event shall Tenant be required to issue
Tenant’s Option Notice sooner than thirty (30) days following receipt of the
Notice from Landlord pursuant to clause (ii) above.

 

(b)                                 The purchase price payable to Landlord for
Landlord’s interest in the Leased Property (the “Option Price”) shall be equal
to the sum of (i) the Project Cost and (ii) the Developer’s Fee. The parties
acknowledge that since the Option Price is based on actual costs incurred to
complete the Project, the actual Option Price may not be known until the day of
closing or thereafter. Accordingly, the parties agree to close based on an
estimated Option Price as determined in this Section 43(b) (the “Estimated
Option Price”).  Subject to reconciliation as set forth in Section 43(d) below,
within ten (10) days of Tenant’s exercise of its Option to Purchase, Landlord
shall send Tenant Notice of Landlord’s reasonable estimate of the Option Price
showing in detail, with supporting documentation, Landlord’s reasonable
determination of the components of the Project Cost (i.e., the Land Cost, the
Soft Cost and the Construction Cost) and the Developer’s Fee, which Notice shall
contain a statement in bold type and capital letters stating “FAILURE TO RESPOND
TO THIS NOTICE WITHIN FIFTEEN (15) DAYS SHALL BE A DEEMED APPROVAL BY TENANT” as
a condition to the effectiveness of such Notice.  Tenant shall have fifteen (15)
days after receipt of Landlord’s estimate to accept or reject Landlord’s
estimate of the Option Price. If Tenant fails to send Notice to Landlord of its
rejection, Tenant shall be deemed to have accepted Landlord’s estimate.  If
Tenant rejects Landlord’s estimate, it must send Notice to Landlord setting
forth the reasons for such rejection or requesting such additional information
that Tenant may need to better analyze Landlord’s estimate.  For the fifteen
(15) day period after Landlord receives Tenant’s rejection Notice, the parties
shall meet and negotiate in good faith to agree on the Estimated Option Price. 
If no agreement is reached after such period then Tenant, by sending Notice to
Landlord within ten (10) days of the expiration of such fifteen (15) day period,
shall have the right to exercise one of the following options:

 

(i)                                     Toll all of the time periods with
respect to the Closing set forth in Sections 42(c) and (d) until agreement is
reached on the Estimated Option Price or the dispute is resolved, or Tenant
elects to exercise clause (ii) below.  If agreement on the Estimated Option
Price is not reached until after the Commencement Date, Tenant shall pay Rent as
set forth in this Lease until Closing occurs. If no agreement on the Estimated
Option Price is reached within one hundred eighty (180) days following the
Commencement Date, then Closing shall be held on the one hundred eightieth
(180th) day following the Commencement Date, and the provisions of clause
(ii) below shall apply;

 

(ii)                                  Proceed to Closing at the time and
pursuant to the terms and conditions set forth in this Section 43, in
particular, Section 43(d).  At Closing, Tenant shall pay that amount of the
Option Price which is not in dispute to Landlord, and shall pay the excess
amount of the Option Price which is in dispute to a Qualified Dispute Escrow
Agent.  The Qualified Dispute Escrow Agent shall hold such amount in an interest
bearing account until the parties resolve their dispute in writing or a court
issues an order resolving the dispute in which case the Qualified Dispute Escrow
Agent shall distribute the escrowed funds to Landlord and Tenant, as the case
may be, (along with the interest earned on such funds) in accordance with such
resolution.  This

 

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option may also be exercised at any time after Tenant exercises its option under
clause (i) above; or

 

(iii)                               Rescind Tenant’s exercise of its Option to
Purchase.

 

(c)                                  Closing on the purchase and sale of the
Leased Property shall take place at a mutually agreeable location on the
thirtieth (30th) day after Substantial Completion of the Project has occurred,
unless Tenant has elected the option set forth in Section 43(b)(i) above. 
Tenant shall pay the Option Price (or if not known, the Estimated Option Price
or so much thereof which is not in dispute in accordance with
Section 43(b) above) at closing by wire transfer of immediately available funds
and if Tenant has exercised the option set forth in Section 43(b)(ii) above, at
Closing, Tenant shall pay such disputed amount to the Qualified Dispute Escrow
Agent in accordance with such Section.  If Tenant exercises its option set forth
in Section 43(b)(i), then Basic Rent and Additional Rent shall be payable from
the Commencement Date until completion of Closing.  Landlord shall not make any
representations or warranties regarding the physical condition of the Leased
Property, except any representations and warranties contained in this Lease
(including the warranty contained in the Work Letter and this Lease) shall be
deemed to survive the closing and termination of this Lease.  In addition,
Landlord shall provide customary representations and warranties as to its good
and marketable title to the Property, its due organization and its authority to
convey the Leased Property.  Landlord and Tenant shall comply with all Legal
Requirements in connection with the sale of the Leased Property and shall
cooperate with one another with their efforts to do so.  Landlord shall be
obligated to convey (and Tenant’s obligation to purchase the Leased Property
shall be conditioned on Landlord’s performance of such obligation) good and
marketable fee simple title to the Leased Property, insurable at regular rates
by Tenant’s chosen national title insurance company, by a limited warranty deed,
subject only to (i) the Permitted Encumbrances (but excluding any and all
Mortgages and Liens, all of which must be satisfied of record at closing by
Landlord); (ii) all Liens, encumbrances, charges, exceptions and restrictions
attaching to the Leased Property created or caused by Tenant; (iii) all Legal
Requirements then in effect; and (iv) other standard title exceptions other than
those that may be deleted by a customary seller’s title affidavit.  Tenant shall
be obligated to assume and pay the cost of any confirmed or unconfirmed
assessments affecting the Leased Property as of the date of such closing. In
addition to the limited warranty deed, Landlord shall execute and deliver to
Tenant a general assignment and bill of sale (which shall transfer and assign to
Tenant, among other things, all of Landlord’s right, title and interest in and
to the Base Project Plans and Specifications, the TI Work Plans and all other
plans related to the Property or the construction of the Project, the Base
Project Construction Contract, the TI Construction Contract and all other
agreements related to the Property or the construction of the Project, and all
other plans, specifications, designs, surveys, drawings, permits, approvals,
consents and warranties related to the Property), title affidavit, transfer tax
forms and/or such other instrument or instruments as may be appropriate, which
shall transfer the interests of Landlord in the Leased Property to Tenant or
Tenant’s designee. Landlord and Tenant shall equally split all realty transfer
taxes applicable to the sale.

 

(d)                                 If the actual Option Price is not known and
agreed to prior to Closing, and Tenant elects the option set forth in
Section 43(b)(ii) above, then the Parties shall close and Tenant shall pay the
Estimated Option Price.  Thereafter, Landlord and Tenant agree to cooperate with
one another, in good faith, to determine the actual Option Price based on the
final and actual Project

 

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Cost (plus Developer’s Fee) as soon as is reasonably practical after Closing. 
The provisions of this Section 43 shall survive the termination of this Lease
and the Closing of Tenant’s purchase option.  During a period of not more than
sixty (60) days after the Closing, the parties shall meet and negotiate in good
faith to agree on the actual Option Price.  Once the final Option Price is
determined, if such actual price is higher than the Estimated Option Price,
Tenant will pay to Landlord within ten (10) days of such determination, the
difference between the Estimated Option Price and the actual Option Price; and
if such actual Option Price is lower than the Estimated Option Price, Landlord
shall refund to Tenant within ten (10) days of such determination, the
difference between the actual Option Price and the Estimated Option Price.

 

(e)                                  Tenant may not assign, mortgage, pledge,
encumber or otherwise transfer its Option to Purchase except simultaneously with
its interest in this Lease, and then only to an Affiliate, and any such
purported transfer or attempt to transfer shall be void and without effect, and
shall terminate the Option to Purchase. Notwithstanding the foregoing, Tenant
may designate an Affiliate of Tenant to take title to the Leased Property
provided Tenant gives Landlord not less than three (3) Business Days’ prior
Notice.  In the event as a result of a designation of another Person to acquire
title to the Property, any additional transfer tax incurred as a result of such
designation shall be paid by Tenant, and Tenant shall indemnify and save
harmless Landlord from and against any and all such additional transfer tax.

 

44.                               Self-Help.  In addition to the Self-Help
Items, if Tenant exercises self-help under Section 18 hereof or
Section 4(e)(ii) of the Work letter, then the following provisions also shall
apply:

 

(a)                                  Tenant shall have the right (but not the
obligation) in its sole discretion to complete the Base Project Work, TI Work
and/or Restoration Work itself or through its agent or third parties, and
Landlord shall promptly pay to Tenant on demand a sum equal to the reasonable
and documented costs incurred by Tenant in performing any such work and the
amount of such costs for such work may include, among other things, costs
resulting from delays or reasonable and documented start-up costs or contractor
settlements or other costs or inefficiencies inherent in obtaining such
performance from persons whom Landlord may have failed to pay or who may then be
unfamiliar with the plans and specifications for such Restoration Work, and the
Base Project Plans, Base Project Specifications and/or TI Work Plans or the
Leased Property, together with interest on such demanded sum at the Overdue
Rate, commencing on the date of demand and continuing until paid.

 

(b)                                 In connection with any construction
undertaken by Tenant pursuant to Tenant’s exercise of its self-help rights under
this Lease, Tenant may elect to do any or all of the following:

 

(i)                                     use its own employees and/or engage
builders, general contractors, trade contractors, suppliers, architects,
engineers, inspectors and others for the purpose of furnishing labor, materials,
equipment and fixtures in connection with such work;

 

(ii)                                  amend, modify or terminate any then
existing contracts that may be assigned to Tenant in conjunction with the
development and/or construction of such work; and

 

55

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(iii)                               pay, settle or compromise all bills or
claims which may become liens against such work or the Leased Property, or which
have been or may be incurred in any manner (A) in connection with such work or
(B) for the discharge of such liens, encumbrances or defects in title.

 

(c)                                  The provisions of this Section 44 shall be
applicable if Tenant elects to exercise any or all rights and remedies available
to it regarding Self-Help Items under Section 25, or its rights under Section 18
hereof and Section 4(e)(ii) of the Work Letter.

 

45.                               Declaration.

 

(a)                                  Landlord covenants, represents and warrants
to Tenant that: (i) the Declaration has not been modified, amended or
terminated; (ii) the Declaration is currently in full force and effect; (iii) to
its actual knowledge as of the date hereof, no default under the Declaration
exists thereunder beyond any applicable Notice and cure period; and (iv) the
Declaration is, and shall remain, superior in lien to all mortgages and related
liens affecting the Park and all other land which is encumbered by the
Declaration.  Landlord and Tenant each acknowledge that this Lease is made and
shall continue to be subject and subordinate to the Declaration, subject to the
provisions of this Section 45.  Tenant shall comply with the terms and
conditions of the Declaration to the extent the same affects the Leased Property
(it being agreed that Tenant shall not be obligated to expend any sums in
connection with such compliance, except with respect to Park assessments and
charges applicable to the Leased Property which are included as part of
Operating Expenses, and except for the cost of compliance with architectural and
design regulations applicable to any Alterations).

 

(b)                                 Landlord shall, during the Term: (i) perform
and observe all of the terms, covenants, provisions and conditions of the
Declaration on Landlord’s part to be performed and observed; (ii) defend,
indemnify and hold harmless Tenant from and against any and all claims, demands,
causes of action, suits, damages, liabilities, and expenses of any nature
arising out of or in connection with the enforcement of, or a claimed breach by,
Landlord of any covenant, term, condition, or provision of the Declaration; and
(iii) diligently enforce, at its sole expense, the covenants, agreements, and
obligations of the Declaration which inure to the benefit of Landlord as the
owner of the Building.

 

(c)                                  Whenever, pursuant to the Declaration, the
consent or approval of Landlord shall be required by or requested, and such
consent or approval could diminish the rights or increase the obligations of
Tenant thereunder or under this Lease, other than in a de minimus manner, or
could adversely affect Tenant’s use or occupancy of the Leased Property, or the
conduct of Tenant’s business therein, other than in a de minimus manner, such
consent or approval shall not be granted without the prior consent of Tenant,
which consent may be withheld in its sole and absolute discretion.

 

(d)                                 Landlord shall, immediately upon receipt,
forward to Tenant a copy of any and all Notices and/or demands received by
Landlord under or pursuant to the Declaration, which relate to, or could
adversely affect, Tenant’s use or occupancy of the Leased Property, the conduct
of Tenant’s business therein, or Tenant’s rights pursuant to this Lease.

 

56

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(e)                                  Landlord shall not amend, or modify the
Declaration if such amendment or modification could diminish the rights or
increase the obligations of Tenant thereunder or under this Lease, other than in
a de minimus manner, or could adversely affect Tenant’s use or occupancy of the
Leased Property or the conduct of Tenant’s business therein, other than in a de
minimus manner, nor shall Landlord terminate the Declaration.

 

(f)                                    In the event Landlord defaults in the
performance of any of its obligations under the Declaration or fails to enforce
the obligations of any other obligee under the Declaration, and such default or
failure to enforce could adversely affect Tenant’s rights thereunder or under
this Lease, other than in a de minimus matter, Tenant’s use or occupancy of the
Leased Property or the conduct of Tenant’s business therein, Tenant may, if
permitted to do so under the Declaration, but shall not be obligated to, after
thirty (30) days Notice (except in the event of emergency, in which case no
Notice shall be required) cure any default by Landlord under the Declaration
and/or enforce, in its own name, at Landlord’s expense, the obligations of any
other obligee under the Declaration. Landlord shall, upon demand, reimburse
Tenant for the costs incurred by Tenant in performing any of Landlord’s
obligations under the Declaration or enforcing the obligations of any obligee
under the Declaration, together with interest thereon at the Overdue Rate.

 

(g)                                 As between Landlord and Tenant, in the event
of any conflict between the Declaration and this Lease, this Lease shall in all
respects control.

 

[Signatures Follow]

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed and delivered as of the date first written above.

 

 

 

 

Landlord:

 

 

 

530 REGENCY DRIVE ASSOCIATES, L.P., a Pennsylvania limited partnership

 

 

 

 

By:

530 Regency Drive GP, Inc.,

 

 

 

Its general partner

 

 

 

 

 

By:

/s/ Robert S. Hankin

 

 

 

Name:

Robert S. Hankin

 

 

 

Title:

President

 

 

 

 

 

Tenant:

 

 

 

WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation

 

 

 

By:

/s/ Richard D. Luzzi

 

 

Name:

Richard D. Luzzi

 

 

Title:

Vice President

 

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APPENDIX I

 

RULES OF CONSTRUCTION AND DEFINITIONS

 

As used herein, unless otherwise specified or the context otherwise requires:

 

(a)                                  any term defined in this Appendix by
reference to another instrument or document shall continue to have the meaning
ascribed thereto whether or not such other instrument or document remains in
effect;

 

(b)                                 words which include a number of constituent
parts, things or elements, shall be construed as referring separately to each
constituent part, thing or element thereof, as well as to all of such
constituent parts, things or elements as a whole;

 

(c)                                  references to any Person include such
Person and its successors and permitted assigns and when an individual, the word
“successors” includes such Person’s heirs, devisees, legatees, executors,
administrators and personal representatives;

 

(d)                                 singular words connote the plural as well as
the singular, and vice versa as may be appropriate;

 

(e)                                  words importing a gender include any
gender;

 

(f)                                    the words “consent”, “approve”, “agree”
and “request”, and derivations thereof or words of similar import, mean the
prior written consent, approval, agreement or request of the Person in question;

 

(g)                                 a reference to any statute, regulation,
proclamation, ordinance or law includes all statutes, regulations,
proclamations, ordinances or laws varying, consolidating or replacing them, and
a reference to a statute includes all regulations, proclamations, and ordinances
issued or otherwise applicable under that statute;

 

(h)                                 a reference to a document includes an
amendment or supplement to, or replacement or novation of, that document;

 

(i)                                     the words “including” and “includes”,
and words of similar import, shall be deemed to be followed by the phrase
“without limitation”;

 

(j)                                     the words “herein”, “hereof”,
“hereunder”, “thereof”, and “thereunder” and words of similar import, when used
with respect to a document, shall be deemed to refer to the document as a whole
and not to the specific section or provision where such word appears unless so
stated;

 

(k)                                  unless the context shall otherwise require,
a reference to the “Leased Property”, the “Improvements”, the “Building
Systems”, or the “Appurtenant Rights” shall be deemed to be followed by the
phrase “or a portion thereof”, “or any part thereof” or “or any interest
therein”;

 

Appendix I – 1

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(l)                                     unless the context shall otherwise
require, a reference to “fees and expenses” means actual fees and expenses and
shall be deemed to be followed by the phrase “including, reasonable attorney’s
fees, expenses and disbursements”;

 

(m)                               the Schedules, Exhibits and Appendices listed
in the table of contents of this Lease and attached hereto are incorporated
herein by reference;

 

(n)                                 the titles and headings of Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted
as a matter of convenience to this Lease and shall not affect the construction
of this Lease;

 

(o)                                 references to this Lease include all
amendments, supplements, consolidations, replacements, restatements, extensions,
renewals and other modifications thereof, in whole or in part;

 

(p)                                 the terms “agree” and “agreements” contained
herein are intended to include and mean “covenant” and “covenants”; and

 

(q)                                 each of the parties to this Lease and their
counsel have participated in the preparation, review, negotiation and revision
of this Lease, and the usual rules of construction that any ambiguities are to
be resolved against the drafting party are inapplicable to the construction and
interpretation of this Lease and any amendments or exhibits thereto.

 

Actual Knowledge by the Landlord or Tenant with respect to any matter means the
present actual knowledge of such matter by any Executive Officer after
reasonable investigation and inquiry.  Actual Knowledge shall be presumed
conclusively as to the content of any notice to Landlord or Tenant,
respectively, either (i) made in accordance with the provisions of this Lease,
or (ii) provided by any Governmental Authority under any applicable Legal
Requirement.

 

ADA is defined in Section 8(d).

 

Additional Land is defined in Recital B(1).

 

Additional Rent means all amounts, liabilities, costs, expenses and obligations
(other than Basic Rent) which Tenant is required to pay or discharge in
accordance with this Lease.

 

Additional ROFO Period is defined in Section 36(b).

 

Additional Space is defined in Section 36(a).

 

Adjoining Property means all streets, drives, sidewalks, curbs, and similar
areas adjoining the Land.

 

Affiliate means, at any time, and for a Person, any other Person or group acting
in concert with the Person in question that directly or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, such Person. For purposes of this definition, the term “control”
(including the correlative meanings of the terms “controlling” controlled by”
and “under common control with”), as used with respect to any Person, means the

 

Appendix I - 2

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possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities (or any other interest or interests), by contract or other
means.

 

Alteration or Alterations means any alterations, installations, renovations,
reconstruction, demolitions, modifications, replacements, improvements, changes
to the Building Systems, removals or additions to the Leased Property, both
interior or exterior, and ordinary or extraordinary, including any Restoration.

 

Architect means The Ballinger Companies.

 

Approved Building Name is defined in Section 40(b).

 

Appurtenant Rights means all of Landlord’s right, title, or interest in all
Easements, appurtenances, tenements, hereditaments and any other rights and
benefits belonging or pertaining to the Land or the Improvements, including, the
use of any Adjoining Property, and all Permits and other rights whether or not
of record, appurtenant to the Land.

 

Bankruptcy Code means Title 11 of the United States Code or any other Federal or
state bankruptcy, insolvency or similar law, now or hereafter in effect in the
United States, and any comparable foreign laws relating to bankruptcy,
insolvency or creditor’s rights.

 

Base Project Work is defined in Section 2(a) of the Work Letter.

 

Basic Rent means, during the Basic Term, the installments in the amounts set
forth on Exhibit H, and, during any Renewal Term, the amounts determined under
Section 4(b).

 

Basic Rent Payment Dates means (i) the Commencement Date, (ii) the first day of
each subsequent calendar month included in the Term, and (iii) the first day of
each Renewal Term, or if any first day is not a Business Day, then the next
Business Day.

 

Basic Term means a period that shall begin on the Commencement Date and shall
end at 11:59 PM on the Basic Term Expiration Date.

 

Basic Term Expiration Date means that date which is the last day of the
fifteenth (15th) Lease Year.

 

Broker is defined in Section 42(a).

 

Building is defined in Recital B(2).

 

Building Systems means the mechanical, gas, electrical, sanitary, heating,
ventilation and air-conditioning systems, elevator, plumbing (and all attached
fixtures), security and life-safety systems, roof and balcony drainage and other
service systems of any building, including telephone and communication equipment
integrated into the Improvements and used in the operation of the Improvements
and computer equipment used in connection with gas, electrical, sanitary,
heating, ventilation or air conditioning, security and life-safety systems.

 

Appendix I - 3

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Business Day means any day other than a Saturday, a Sunday or a day on which
commercial banks are authorized or required to be closed in (i) the State of New
York, or (ii) the State in which the Leased Property is located.

 

Capital Repair means an expenditure or repair if it is made to acquire, improve
or upgrade physical assets such as equipment, property, and/or buildings and
needs to be capitalized in accordance with GAAP and/or are added to an asset
account (i.e. capitalized), thus increasing the asset’s basis (i.e. the cost or
value of an asset as adjusted for tax purposes) and/or are required to be
expensed over the useful life of such asset.

 

Casualty means loss, damage or destruction to the Leased Property from fire,
hazard, theft or other casualty.

 

Casualty Time Estimate is defined in Section 18(b).

 

Code means the Internal Revenue Code of 1986, as amended.

 

Code Modification is defined in Section 8(b).

 

Commencement is defined in Section 18(f).

 

Commencement Date has the meaning set forth in Section 3(c).

 

Commencement of construction is defined in Part B8 of Exhibit G attached hereto.

 

Common Area Charges is defined in Section 14(h).

 

Common Facilities means the Common Elements as defined in the Declaration.

 

Condemnation means loss, damage or destruction whether by condemnation, seizure,
confiscation, requisition or other taking or sale of the use, access, occupancy,
Easement, rights to or title of the Leased Property, whether permanent or
temporary, by or on account of any actual or threatened eminent domain
proceeding or other action by any Governmental Authority or any transfer in lieu
or in anticipation thereof.

 

Construction is defined in Section 18(a).

 

Construction Costs means all amounts paid by Landlord (as opposed to amounts
paid by Landlord for upgrades or changes) to Landlord’s Contractor, third party
contractors, subcontractors and material suppliers in connection with the
performance of the Base Project Work (not to exceed the Base Project GMP) and
the TI Work (not to exceed the amount of the Improvement Allowance drawn by
Tenant, if any); provided that (i) the work supplied or performed as part of the
Base Project Work and TI Work, as applicable, is in substantial conformance with
the approved Base Project Plans and Specifications and TI Work Plans; (ii) all
work, trades and materials contracts for Base Project Work and TI Work with a
value in excess of $25,000 shall be bid in accordance with the Work Letter;
(iii) the unit and/or hourly prices for work performed or provided by Landlord
and/or Landlord’s Contractor, or its Affiliates for Base Project Work and TI
Work will be agreed to by Landlord and Tenant before commencement of

 

Appendix I - 4

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construction but in no event more than rates charged by competitive third party
providers; and (iv) the Contractor’s Fee.  In no event shall Construction Costs
include (w) impact fees with respect to the Project, (x) any environmental
remediation costs or costs to address concealed subsurface conditions such as
unanticipated rock or unstable soil (but may include the reasonable costs of a
Phase 1 Environmental Assessment and typical soil borings to determine the
subsurface conditions), (y) any cost to the extent it is otherwise included in
Soft Costs or Land Costs, or (z) any costs for in-house personnel of Landlord or
Landlord’s Contractor unless such costs are expressly included in the Cost of
the Work and are in lieu of costs that necessarily would have been paid to
third-party providers for such service (and are not in fact being provided by
such third-party provider) or reduce the costs that would have otherwise been
paid to third-party providers of such service (and in such event then only to
the extent of such reduced cost).

 

Construction Period Interest shall include bank charged fees for unused funds
from the line(s) of credit dedicated to the Project plus, from the date funds
are invested in the Project, an imputed rate of interest or return per annum on
any such funds advanced by or on behalf of Landlord, whether as equity or in
respect of any Project Loan from a third party to pay Project Costs (other than
Land Costs), equal to the interest rate paid for the ten (10) Year U.S. Treasury
bonds at auction for such bonds, which rate shall be the determined on the first
day of month in which such proceeds were used to pay Project Costs, plus three
hundred (300) basis points.

 

Contract is defined in Section 38(b).

 

Contractor’s Fee is defined in Section 2(d)(ii)(8) of the Work Letter.

 

Cost of the Work is defined in Section 2(d)(ii)(7) of the Work Letter.

 

Declaration is defined in Recital B(4).

 

Default means any event, condition or failure the occurrence or existence of
which, with the giving of Notice or lapse of time, or both, would, unless cured
or waived, become an Event of Default.

 

Deficiency is defined in Section 24(b)(d)(ii).

 

Deposit Account is defined in Section 41.

 

Destruction means a Casualty or a Condemnation.

 

Developer’s Fee means an amount equal to five percent (5%) of the sum of:
(1) the Soft Costs and (2) Construction Costs (but excluding any and all costs
for the TI Work).

 

Dollars and $ mean lawful currency of the United States of America.

 

Easements means all easements, licenses, rights of way and other similar
property interests, rights or privileges in the nature of easements.

 

ECCA means the Eagleview Corporate Center Association.

 

Appendix I - 5

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Effective Date means the date that a fully executed original counterpart of this
Lease has been received by each Party.

 

Eligible Account means a separate and identifiable account from all other funds
held by the holding institution that is either (i) an account or accounts
maintained with a federal or state-chartered depository institution or trust
company which complies with the definition of Eligible Institution, or (ii) a
segregated trust account or accounts maintained with the corporate trust
department of a federal depository institution or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit similar
to Title 12 of the Code of Federal Regulations §9.10(b), having in either case
corporate trust powers, acting in its fiduciary capacity, and a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal and state authorities.  An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.

 

Eligible Institution means a depository institution insured by the Federal
Deposit Insurance Corporation the short term unsecured debt obligations or
commercial paper of which are rated at least A-1 by S&P, P-1 by Moody’s and F-1+
by Fitch, in the case of accounts in which funds are held for thirty (30) days
or less or, in the case of accounts in which funds are held for more than thirty
(30) days, the long term unsecured debt obligations of which are rated at least
“AA” by Fitch and S&P and “Aa2” by Moody’s.

 

Environmental Laws means and includes the Resource Conservation and Recovery Act
(42 U.S.C. §6901 et seq.), as amended by the Hazardous and Solid Waste
Amendments of 1984, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. §9601 et seq.), as amended by the Superfund Amendments
and Reauthorization Act of 1986, the Hazardous Materials Transportation Act (49
U.S.C. §1801 et seq.), the Toxic Substances Control Act (15 U.S.C. §2601 et
seq.), the Clean Air Act (42 U.S.C. §7401 et seq.), the Clean Water Act (33
U.S.C. §1251 et seq.),the Safe Drinking Water Act (42 U.S.C §300f through 300j),
the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.),
the Occupational Safety and Health Act (29 U.S.C. §651 et seq.), any state
super-lien and environmental clean-up statutes and all other applicable Federal,
state and local environmental laws, including obligations under the common law,
ordinances, rules, regulations and publications, and any other Legal
Requirements, now or hereafter existing relating to the pollution and protection
of the environment, the preservation or reclamation of natural resources, the
management or Release of Hazardous Substances, or human health or safety.

 

Estimated Basic Rent is defined in Section 4(a).

 

Estimated First Month Rent is defined in Section 41.

 

Estimated Option Price is defined in Section 43(b).

 

Event of Default is defined in Section 24.

 

Executive Officer means the President, Executive Vice President, Treasurer,
Chief Financial Officer, Director of Real Estate, Managing Member, General
Partner or if such office does not exist, its closest equivalent.

 

Appendix I - 6

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Executive Order means Executive Order No. 13,224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.

 

Existing Affected Tenants is defined in Section 36(c).

 

Existing Land is defined in Recital B(1).

 

Expansion Notice is defined in Section 36(a).

 

Fair Market Rental Value means the fair rental value, including escalations, for
space of equivalent size and character in the same market area in which the
Leased Property is located under a lease term equal to the length of the Renewal
Term for which the Fair Market Rental Value is being determined, giving
consideration to the creditworthiness of Tenant and otherwise defined and
determined in accordance with Exhibit I hereto.

 

Failing Party is defined in Section 44(b).

 

Financial Condition means that Landlord from time to time, as reasonably
determined by Landlord and reasonably approved by Tenant, has obtained a Project
Loan and has sufficient cash which is unconditionally available for Landlord’s
use, which, when taken together, shall be sufficient to fund reasonably
anticipated Project Costs over a rolling six (6) month period as stipulated in
Schedule 1 attached to this Lease.  Financial Condition shall be measured from
time to time as required under this Lease.

 

Fitch means Fitch, Inc., a division of Fitch Ratings Ltd., and any successor
thereto.

 

Force Majeure means any delay, moratorium or other governmental restriction
resulting from any of the following events beyond the control of the Party
claiming the occurrence of the Force Majeure:  (i) highly unusual or unforeseen
weather conditions not typically experienced in the general vicinity of the
Leased Property; (ii) the weather or natural disasters; (iii) governmental
restrictions or governmental regulations; (iv) strikes, labor disputes,
lockouts, shortages of labor or materials; (v) inability to obtain materials or
reasonable substitutes; (vi) failure of power; (vii) order of civil or military
authority, or governmental preemption, civil commotion, riots, insurrection, or
war; (viii) acts of God; (ix) Casualty; (x) the discovery and/or removal of any
Hazardous Substances on or from the Leased Property; or (xi) any other reason of
a like nature not the fault of, or within the reasonable control of, such party;
provided, however, lack of, or inability to access, funds shall not be deemed a
Force Majeure.  A party wishing to invoke a Force Majeure shall give the other
party Notice of that intention within ten (10) days following the commencement
of any Force Majeure then known to such party and shall, at that time, specify
the reasons therefor and the period of delay, if known, or if not known, a
reasonable estimate thereof.

 

GAAP means generally accepted accounting principles as in effect from time to
time in the United States of America.

 

Governmental Authority means the government of the United States of America or
any State or other political subdivision of either thereof, or any entity that
exercises executive,

 

Appendix I - 7

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legislative, regulatory, administrative, judicial, quasi-governmental or
quasi-judicial functions of, or pertaining to, any such government, whether now
or hereafter in existence having jurisdiction over the matter or matters in
question.

 

Governmental Incentive means any grant, subsidy or other financial incentive
obtained from or issued by or through, directly or indirectly, any Governmental
Authority in support of the Project or any component or part of the Project,
which is paid to Landlord and not required to be repaid.

 

Guarantor means collectively, and on a joint and several basis, Robert S.
Hankin, Samuel Hankin and Richard J. Hankin and their permitted successors and
assigns.

 

Guaranty means that certain Guaranty Agreement dated as of the date of this
Lease by Guarantor in favor of Tenant.

 

Hazardous Substances means (i) those substances (whether solid, liquid or gas),
included within the definitions of or identified as “hazardous substances”,
“hazardous materials”, or “toxic substances” in or pursuant to, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act of 1980 (42 U.S.C. §9601 et seq.), as amended by Superfund Amendments and
Reauthorization Act of 1986 (Pub. L. 99-499, 100 Stat. 1613), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C., § 6901 et seq.), the Clean
Water Act (33 U.S.C. § 1251 et seq.), the Occupational Safety and Health Act of
1970 (29 U.S.C. § 651 et seq.), and the Hazardous Materials Transportation Act,
49 U.S.C. § 1801 et seq., or in the regulations promulgated pursuant to said
laws, all as amended; (ii) those substances listed in the United States
Department of Transportation Table (40 CFR 172.101 and amendments thereto) or by
the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto); (iii) any material, waste,
substance, pollutant or contamination which is or contains (A) petroleum, its
derivatives, by-products and other hydrocarbons, including crude oil or any
fraction thereof, natural gas, or synthetic gas usable for fuel or any mixture
thereof, (B) asbestos and/or asbestos-containing materials in any form that is
or could become friable, (C) polychlorinated biphenyls, (D) flammable
explosives, (E) infectious or regulated medical waste, or (F) radioactive
materials; (iv) Toxic Mold; and (v) such other substances, materials, wastes,
pollutants and contaminants which are or become regulated as hazardous, toxic or
“special wastes” under applicable local, state or federal law, or the United
States government, or which are classified as hazardous, toxic or as “special
wastes” under any Legal Requirements.

 

HVAC means heating, ventilation and air conditioning systems (and the chases,
conduits, piping and facilities serving such systems) serving the Building.

 

Improvement Allowance is defined in Section 5(d).

 

Improvements means, collectively, any buildings and all other structures,
landscaping, additions, extensions, and substitutions therefor, parking
facilities, drainage facilities, walkways, driveways, curbing and other site
improvements and all other improvements that now or hereafter exist on the Land
and fixtures appurtenant to the Land, and all Alterations thereto.

 

Appendix I - 8

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Indemnified Liabilities means all liabilities, losses, damages, demands, claims,
obligations, suits or other proceedings (including, causes of action, litigation
and defenses), settlement proceeds, fines, penalties, assessments, citations,
directives, judgments, and all fees and expenses or other disbursements of any
nature whatsoever (including, reasonable consultants’, and experts’ fees and
disbursements actually incurred in investigating, defending, settling or
prosecuting any claim, obligation, suit or other similar proceeding commenced or
threatened) that may be imposed on, incurred by or asserted or awarded against
an Indemnified Party, including all Liens other than Liens created by Landlord.

 

Indemnified Parties (and each is an Indemnified Party) means Landlord
Indemnified Parties and Tenant Indemnified Parties.

 

Insurance Premiums means all premiums, costs, charges, fees, late fees and
interest that are due for the renewal or replacement of the coverage afforded by
the Policies.

 

Insurance Requirements means any one or more of the terms and requirements
relating to insurance contained in Section 16 and the terms of each Policy
required to be carried by Tenant under the Lease.

 

Janitorial Deficiency Notice is defined in Section 14(e).

 

Land is defined in Recital B(1).

 

Land Costs means an amount equal to $250,000 per acre for each acre of the Land
(prorated for any part of an acre), plus a portion of the impact fees with
respect to the Project in the amount of $64,000, and no other fees or charges of
any kind or nature whatsoever.  In no event shall Land Costs include any cost to
the extent it is otherwise included in Construction Costs or Soft Costs.

 

Landlord Default is defined in Section 25(a).

 

Landlord Indemnified Parties (and each is a Landlord Indemnified Party) means
Landlord, Lender, Lender’s servicer, if any, and their respective successors and
assigns, the beneficial owners of any of the foregoing and the trustees,
beneficiaries, members, partners, shareholders, officers, directors,
participants, employees, professionals and agents of Landlord, Lender, and
Lender’s servicer, if any.

 

Landlord’s Agents means one or more or all of Landlord’s officers, directors,
managers, members, shareholders, agents, contractors, invitees and employees.

 

Landlord’s Contractor is defined in Section 2(d)(i) of the Work Letter.

 

Landlord’s Statement is defined in Section 7(b).

 

Lease Documents means this Lease, the SNDA, the Lease Memorandum and such other
documents as have been delivered by Tenant to Landlord simultaneously herewith.

 

Lease Memorandum is defined in Section 33.

 

Appendix I - 9

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Lease Year means a twelve (12) month period during the Term, commencing on the
Commencement Date, or any anniversary thereof. The first Lease Year shall
commence on the Commencement Date, and if the Commencement Date is other than
the first day of the month, shall extend to a date which is twelve (12) months
following the last day in the month in which the Commencement Date occurs.

 

Leased Property is defined in Recital B.

 

Legal Requirements means all present and future applicable laws, statutes,
treaties, rules, orders, ordinances, codes, regulations, requirements, Permits,
and interpretations by, and applicable judgments, decrees, injunctions, writs
and like action even if unforeseen or extraordinary of any Governmental
Authority (including, those pertaining to health, safety or the environment and
the Americans with Disabilities Act) and the customary rules and regulations of
insurance underwriters relating to the use, occupancy, possession, operation,
alteration, repair or maintenance of the Leased Property or otherwise affecting
the Leased Property.

 

Lender means an entity identified as such in writing to Tenant which makes a
loan to Landlord secured by a Mortgage or which is the holder of the Mortgage as
result of an assignment thereof.  The term “Lender” shall also include the
servicer and/or trustee with respect to the Mortgage on behalf of the maker of
such loan.  Any references in this Lease to Lender at a time, if any, when there
is no Lender shall be construed to mean “Lender, if any.”

 

Lien means any charge, pledge, lien (statutory or otherwise), option, security
interest or other encumbrance of any nature or any other preferential
arrangement that has the practical effect of creating a security interest, and
mechanic’s, materialmen’s and other similar liens and encumbrances.

 

Material Adverse Effect means any present or future event or circumstance which,
in Landlord’s reasonable judgment, would (i) impair materially Tenant’s ability
to perform and comply with its obligations under the Lease Documents, or
(ii) have a material adverse effect on the validity or enforceability of the
Lease Documents or the rights and remedies of Landlord and Lender under the
Lease Documents.

 

Material Alteration means any Alteration which is part of an identifiable
project that costs in excess of $250,000.00.

 

Material Monetary Event of Default means an Event of Default by Tenant based on
Tenant’s failure to make any payments otherwise due under the Lease, the
aggregate amount of which remaining unpaid at any time exceeds an amount equal
to two month’s Rent.

 

Milestone(s) is defined in Section 2(a).

 

Monthly Operating Expense Estimate is defined in Section 7(a)(i).

 

Moody’s means Moody’s Investors Service, Inc., and any successor thereto.

 

Appendix I - 10

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Mortgage means any first mortgage, deed of trust, deed to secure debt or other
security instrument hereafter executed covering the Leased Property from
Landlord to or for the benefit of Lender, as the same may be modified, amended,
renewed, consolidated, replaced or extended.

 

Named Tenant means the tenant originally holding the interest of the tenant
hereunder, and named in the caption of this Lease.

 

Named Tenant Grace Period is defined in Section 23(e).

 

Net Award means the entire award, compensation, insurance proceeds or other
payment, if any, because of or on account of any Destruction, less any
reasonable third-party fees and expenses incurred by Landlord or Lender in
obtaining such award, compensation, insurance proceeds or other payment and any
fees and expenses of either in connection with the administration of the
distribution of the same and not already paid (or reimbursed to Landlord or
Lender), plus any investment income earned with respect to the foregoing
amounts, plus Tenant’s Insurance Payment, if any.

 

Net Effective Rent shall be defined, with respect to a lease proposal or lease,
as the case may be, as the present value of the basic rent net of any free rent,
reduced rent, tenant improvement and moving allowances, cost of tenant
improvements to be constructed by the Landlord, and any other incentives or
allowances provided by the Landlord, which present value shall be calculated by
applying a discount rate of six and one half percent per annum (6.5%) and a term
equal to the term of the applicable lease following the rent commencement date
thereunder.

 

New Offer is defined in Section 7(a)(vi).

 

Notice or Notices mean all written notices, demands, requests, consents,
approvals, offers, statements and other written instruments or communications
required or permitted to be given pursuant to the terms of this Lease.

 

Notice of Availability is defined in Section 36(a).

 

Obligated Party is defined in Section 9(e).

 

OFAC means the Office of Foreign Assets Control of the United States Department
of the Treasury.

 

Operating Budget is defined in Section 7(a)(i).

 

Operating Expenses means:

 

(1)                                  Any reasonable and actual expenses incurred
by Landlord in connection with the operation, repair, maintenance, protection
and management of the Leased Property, including by way of example rather than
of limitation, the following:

 

(a)                                  Reasonable wages, salaries, fees and other
compensation and payments, payroll taxes, contributions to any social security,
unemployment insurance, welfare, pension or

 

Appendix I - 11

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similar fund and payments for other fringe benefits made to or on behalf of any
and all employees of Landlord performing services rendered in connection with
the operation, repair, maintenance, protection and management of the Leased
Property (to the extent actually employed and reasonably necessary); provided,
however, that any clerical and administrative personnel are (x) located on-site
at the Building, and only for such time that their work relates to the
operation, management and maintenance of the Leased Property, and (y) located
off-site, but only for such time that their work relates to the operation,
management and maintenance of the Leased Property.  Landlord may contract for
any of the foregoing to be performed by independent contractors, in which event
all sums paid (to the extent the same are reasonable and competitive) to such
independent contractors shall be included within Operating Expenses.

 

(b)                                 Cleaning costs for the Leased Property,
including the facade, windows and sidewalks, all costs for snow and rubbish
removal and the costs of all labor, supplies, equipment and materials incidental
to such cleaning.

 

(c)                                  Premiums incurred by Landlord with respect
to all insurance relating to the Leased Property required to be carried by
Landlord under this Lease at competitive rates and terms.

 

(d)                                 Costs incurred for operation, service,
maintenance, inspection and repairs of the Leased Property, including the
heating, air-conditioning, ventilating, plumbing, and electrical systems of the
Building and the costs of labor, materials, supplies and equipment used in
connection with all of the aforesaid items.

 

(e)                                  Sales and excise taxes and the like upon
any of the expenses enumerated herein.

 

(f)                                    Management fees as set forth in
Section 14(b), and not in duplication of any of the salaries, wages, benefits or
overhead otherwise permitted to be included in Operating Expenses.

 

(g)                                 The reasonable cost of tools, equipment and
supplies and any replacement thereof reasonably necessary for maintenance,
repair, protection, management and operation of the Leased Property.

 

(h)                                 At Tenant’s request only, the cost of
repainting or otherwise redecorating any part of the Building and the cost of
displays or decorations for the lobby, balconies and other public portions of
the Leased Property.

 

(i)                                     Auditing and accounting fees incurred in
connection with the preparation and certification of the operating expense
statements.

 

(j)                                     Subject to the exclusion to Operating
Expenses described in clause (v) below, all costs reasonably incurred by
Landlord to comply with governmental requirements, whether federal, state or
municipal, excluding any fines or other impositions for the violation of any
such requirements.

 

Appendix I - 12

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(k)                                  All reasonable costs and expenses
associated with the acquisition and installation of any energy or cost saving
devices having the effect of reducing other expenses properly includable as
Operating Expenses, but only to the extent of the actual reduction in Operating
Expenses generated by such installation.

 

(l)                                     Reasonable and competitive costs of
independent contractors performing services, including, but not limited to,
cleaning, janitorial, window washing, rubbish removal, security, landscaping,
snow and ice removal services, electrical, painting, plumbing, elevator,
heating, ventilation and air conditioning maintenance and repair and all
reasonable and competitive fees due such independent contractors.

 

(m)                               Costs, assessments or fees payable by Landlord
with respect to the Leased Property and the Common Facilities and reasonably
allocable to the Leased Property pursuant to any easement agreement or other
items of record, only if and to the extent the same are incurred for the types
of expenses which are properly includable as Operating Expenses in accordance
with the terms of this definition.

 

(n)                                 The annual amortization (over the
anticipated useful life) of a capital improvement only if falling within any of
the following two categories:

 

(i)                                     a labor-saving device or improvement
which, and then only to the extent that the same, reduces or eliminates any
other component of Operating Expenses; and

 

(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 office and
laboratory buildings.

 

All of the foregoing items as described in this subsection are hereinafter
collectively called “Included Capital Items”.

 

(2)                                  Operating Expenses shall be “net” and, for
that purpose, shall be reduced by the amounts of any discounts, reimbursements
or credits received by Landlord with respect to an item of cost that is included
within Operating Expenses.  Landlord shall not recover more than the actual
Operating Expenses paid by Landlord in connection with the operation of the
Leased Property for any year, and Landlord shall not make a profit from the
collection of Operating Expenses from Tenant.  The foregoing limitations shall
not preclude Landlord’s collection of management fees included under clause
1(f) above.

 

(3)                                  Notwithstanding the provisions of clause
(1) above, “Operating Expenses” shall not include expenditures for any of the
following:

 

(a)                                  Repairs or other work occasioned by fire,
windstorm or other insured casualty or hazard, insured against by Landlord or as
to which Landlord is required to maintain insurance under this Lease, or is
required to be insured against under any Permitted Exception or Mortgage, or any
costs or expenses resulting therefrom in excess of any insurance coverages,
Deductibles included in Operating Expenses shall not exceed those that Landlord
is permitted to maintain under this Lease from time to time.

 

Appendix I - 13

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(b)                                 Leasing commissions and advertising expenses
incurred in leasing or procuring new tenants or of promoting the Park.

 

(c)                                  Repairs or rebuilding necessitated by
Condemnation.

 

(d)                                 Depreciation and amortization of the
Building or any fixtures or equipment, other than depreciation and amortization
which is permitted pursuant to clause (1)(n) above.

 

(e)                                  The wages, salaries and benefits of
executive officers or other senior management personnel of Landlord, if any, or
of any personnel above the level of building manager responsible for the
operations of the Leased Property.

 

(f)                                    Debt service payments or fees (including
without limitation late fees) on any indebtedness applicable to the Leased
Property, including any Mortgage debt, except to the extent of such debt
payments or fees in connection with indebtedness incurred to fund Included
Capital Items.

 

(g)                                 Maintenance, replacements, repairs or other
work occasioned by defective construction materials or workmanship not performed
in a workmanlike manner.

 

(h)                                 Accountants’, consultants’, auditors or
attorneys’ fees, costs and disbursements and other expenses incurred in
connection with the Park or any property other than the Leased Property, or
associated with the defense of Landlord’s title to or interest in the Leased
Property or any part thereof.

 

(i)                                     Any costs (including without limitation
permits, licenses and inspection fees, labor and materials costs, and design
costs) incurred in initially constructing the Leased Property.

 

(j)                                     Costs incurred due to a Landlord
Default.

 

(k)                                  Except for the management fees expressly
permitted under clause 1(f) above, any overhead and profit of Landlord or of any
affiliates of Landlord or of any property manager for management or other
services on or to the Leased Property, or for supplies, utilities or other
materials or services, to the extent that the costs of such services, supplies,
utilities or materials exceed the reasonable costs that would have been paid had
the services, supplies or materials been provided by unaffiliated parties on a
reasonable basis, taking into account the effect of volume discounts or rebates
offered to Landlord or any property manager as a portfolio purchaser.

 

(l)                                     Any ground rent or costs for the
acquisition or continuation of the right to utilize any lands, easements or
other rights pertaining to the lands comprising the Leased Property or the Park.

 

(m)                               Any costs of a financing, sale or lease
transaction, including without limitation surveys, inspections, testing,
environmental assessments and other tests and reports, obtained in connection
with any such financing or any sale of the Leased Property, and any legal,

 

Appendix I - 14

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accounting and other expenses related to Landlord’s financing, re-financing,
mortgaging or selling or leasing the Leased Property or any part thereof, except
such costs incurred in connection with the provision of Included Capital Items.

 

(n)                                 Any fines or fees or other costs (including
without limitation court costs and attorney’s fees) for Landlord’s late payments
or failure to comply with Legal Requirements or other governmental,
quasi-governmental, or regulatory agencies’ rules and regulations.

 

(o)                                 Wages and salaries (and taxes imposed upon
employers with respect to such wages and salaries) and fringe benefits of
personnel of Landlord or of any property manager above the level of building
manager.

 

(p)                                 Costs and expenses (including without
limitation fines, consulting fees and remediation expenses) incurred by Landlord
for environmental testing, sampling or monitoring, or any costs or expenses
incurred for remediation or otherwise in conjunction with the releasing,
spilling or depositing of any Hazardous Substances.

 

(q)                                 Any cost or expense covered by any warranty
(including Landlord’s warranty contained in the Work Letter) or guaranty; and
with respect to any cost or expense for which any Person is legally liable, if
such Person reimburses Landlord for such costs and expenses (with or without
legal action) such reimbursement shall be applied (retroactively if necessary)
to reduce such cost and expense if otherwise included in Operating Expenses.

 

(r)                                    Taxes.

 

(s)                                  Cost of the initial commissioning of the
Building’s HVAC systems.

 

(t)                                    Cost of obtaining any required LEED
Certification.

 

(u)                                 Expenses for the replacement of any item
covered under warranty in favor of the Landlord or the subject of Landlord’s
warranty obligations under this Lease.

 

(v)                                 Cost of any repairs, alterations, additions,
changes, replacements and other items which, under GAAP, are classified as
capital expenditures, except such costs as incurred to provide Included Capital
Items.

 

(w)                               Expenses for any item or service which Tenant
pays directly to a third party or for which Tenant separately reimburses
Landlord.

 

(x)                                   The cost (including, without limitation,
attorneys’ fees and disbursements) of any judgment, settlement or arbitration
award resulting from any tort liability.

 

(y)                                 Legal and auditing fees, other than those
reasonably incurred in connection with the maintenance and operation of the
Leased Property or in connection with the preparation of statements required
pursuant to additional rent or lease escalation provisions.

 

Appendix I - 15

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(z)                                   Reserves for any Operating Expense or
capital expenditure (other than reserves established by ECCA passed through as
part of the ECCA assessments for the Land and Building).

 

(aa)                            Costs of insurance coverages not required by the
terms of this Lease.

 

(bb)                          Costs incurred in performing work or furnishing
services to Tenant, whether at such Tenant’s or Landlord’s expense, to the
extent that such work or service is in excess (by more than a de minimis amount)
of any work or service that Landlord is obligated to furnish to Tenant at
Landlord’s expense.

 

(cc)                            The cost of any work or service performed for
any facility or property other than the Leased Property.

 

(dd)                          The cost of tools and equipment purchased in
connection with the Base Project Work or TI Work.

 

(ee)                            The cost of any “tap fees” or one time lump sum
sewer and water connection fees for the Leased Property.

 

(ff)                                Any costs or fees that are unreasonable in
view of the goods or services obtained for such costs or fees.

 

(gg)                          Costs directly resulting from the legal liability,
negligence or willful misconduct of the Landlord or its agents, contractors or
employees (including any liability insurance deductible).

 

(hh)                          Capital Repairs and all costs of a capital nature,
including, but not limited to, capital. improvements, capital repairs, capital
equipment, and capital tools, all as determined in accordance with GAAP, other
than for Included Capital Items.

 

(ii)                                  Payments for overhead and/or profit to
Affiliates of Landlord, or to any party as a result of a non-competitive
selection process, for management or services to the Leased Property, or for
supplies or other materials to the extent that the costs of such services,
supplies, or materials provided exceed the cost that would have been charged had
such services, supplies or materials been provided on a competitive basis.

 

Option Price is defined in Section 43(b).

 

Option to Purchase is defined in Section 43(a).

 

Outside Restoration Date means eighteen (18) months after a Destruction occurs,
or such lesser or greater period as is appropriate to the nature of the
Destruction, as determined by Landlord in its reasonable discretion, subject to
extension (a) with approval of Landlord for any additional period required for
Restoration due to the nature and scope of the Destruction, or (b) for Force
Majeure or further Destruction.

 

Appendix I - 16

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Overdue Rate means that rate of interest calculated using a three hundred sixty
(360) day year of twelve (12) equal months that is equal to the greater of
(i) eight percent (8%) per annum; or (ii) two percent (2%) per annum over the
Prime Rate, compounded monthly, but in no event greater than the maximum rate
permitted by applicable Legal Requirements.

 

Park means that certain business park known as the “Eagleview Corporate Center,”
located in Exton, Pennsylvania and more particularly described on Exhibit D
hereto.

 

Party and Parties are defined in Section 3(c).

 

Permits means all applicable licenses, authorizations, certificates (including
certificates of occupancy), variances, concessions, grants, registrations,
consents, permits and other approvals issued by a Governmental Authority now or
hereafter pertaining to the ownership, management, occupancy, use, operation,
maintenance, alteration or Restoration of the Leased Property.

 

Permitted Encumbrances means, with respect to the Leased Property: (i) any Liens
thereon for Taxes, which are not yet due and payable, (ii) zoning laws, use
regulations, and other Legal Requirements applicable to the Leased Property;
(iii) the Lien of any Mortgage; provided an SNDA has been executed and
delivered; (iv) the Declaration; and (v) those matters set forth on Exhibit E
hereto.

 

Permitted Transfer is defined in Section 23(a).

 

Permitted Use is defined in Section 6.

 

Person means any individual, sole proprietorship, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
estate, trust, trustee of a trust, unincorporated organization, Governmental
Authority or any other similar legal entity.

 

Personalty is defined in Recital B(3).

 

Policies means the insurance policies required under Section 17 of this Lease.

 

Preliminary Conditions is defined in Section 2.

 

Prescribed Laws means, collectively, (i) the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(USA Patriot Act of 2001); (ii) the Executive Order; (iii) the Trading with the
Enemy Act and each of the foreign assets control regulations of the United
States Treasury Department (31 C.F.R. Subtitle B, Chapter V); (iv) the
International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et seq.; and
(v) all other Legal Requirements relating to acts of war, drug trafficking,
anti-money laundering, terrorism, or similar activities that threaten the
security of the United States of America.

 

Prime Rate means the rate of interest publicly announced by Bank of America,
N.A. (or its successor) as its “base” or “prime rate” of interest effective in
New York, New York, as such rate of interest may change from time to time and if
Bank of America, N.A. (or its successor)

 

Appendix I - 17

--------------------------------------------------------------------------------

 

ceases to announce a prime rate, then the current prime rate of interest
published by the Wall Street Journal or its successor from time to time.

 

Prohibited Person means any Person (i) listed in the Annex to, or otherwise
subject to the provisions of, the Executive Order, (ii) that is owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
Annex to, or is otherwise subject to the provisions of, the Executive Order,
(iii) with whom Landlord is prohibited from dealing or otherwise engaging in any
transaction by any terrorism or money laundering law, including the Executive
Order, (iv) who commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order, (v) that is named as a “specially
designated national and blocked person” on the most current list published by
OFAC at its official website, http://www.ustreas.gov/offices/enforcement/ofac or
at any replacement website or other replacement official publication of such
list, or (vi) who is an Affiliate of or affiliated with a Person listed above.

 

Project means the development of the Land with the Base Project Work and Tenant
Improvements including, without limitation, the permitting, designing and
constructing of all Improvements.

 

Project Cost or Project Costs means the sum of Land Costs, Soft Costs and
Construction Costs; provided, however, such sum shall be reduced dollar for
dollar to the extent of the amount of any Governmental Incentive received by
Landlord or allocated by Tenant and paid to (or on behalf of) Landlord toward
the cost of performing the Base Project Work.

 

Project Loan is defined in Part B2 of Exhibit G attached hereto.

 

Property Manager is defined in Section 14(b).

 

Qualified Carrier means an insurance carrier that satisfies the rating criteria
and other requirements specified in Section 17.

 

Qualified Dispute Escrow Agent means an Eligible Institution with an office
within ten (10) miles of the Leased Property, or the title insurance company
insuring Landlord’s interest in the Land, or the title insurance company
insuring Tenant’s interest in this Lease.

 

RCD is defined in Section 39.

 

Real Property is defined in Recital B(2).

 

Release of Hazardous Substances means the release of any Hazardous Substances
into or upon any land or water or air, or otherwise into the environment, except
as may be done in compliance with Environmental Laws, including, by using,
storing, transporting, burying, disposing, discharging, injecting, emptying,
emitting, spilling, leaking, flowing, seeping, leaching, dumping, pumping,
pouring, escaping, placing and the like.

 

Renewal Term is defined in Section 3(b).

 

Rent means Basic Rent and Additional Rent.

 

Appendix I - 18

--------------------------------------------------------------------------------

 

Replacement Lease is defined in Section 24(b)(iv).

 

Restoration Commencement Period is defined in Section 18((f).

 

Restore or Restoration means, if the Leased Property incurs a Destruction, to
restore, repair, replace or rebuild the Leased Property, as nearly as
practicable, to a condition not less than the condition required to be
maintained under this Lease and which existed prior to the occurrence of such
Destruction.

 

Restoration Work is defined in Section 18(b).

 

ROFO is defined in Section 36(a).

 

ROFO Acceptance is defined in Section 36(b).

 

ROFO Area is defined in Section 36(a).

 

ROFO Period is defined in Section 36(b).

 

ROFO Proposal is defined in Section 36(a)

 

Rooftop Communications Devices is defined in Section 39.

 

RSF means rentable square feet as determined in accordance with ANSI/BOMA
Z65.1-1996 Method of Measurement as published by the Building Owners and
Managers Association.

 

Security Deposit is defined in Section 41.

 

S&P means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

 

SNDA is defined in Section 11.

 

Self Help Items is defined in Section 25(c)

 

Self Help Notice is defined in Section 25(d).

 

Soft Costs means all reasonable and customary costs and fees paid by Landlord to
third party design and engineering firms, all building permit fees and costs,
insurance, bonds (if applicable), Construction Period Interest, brokerage
commissions and other third party costs and expenses typically classified as
“soft costs” in the industry in connection with the Base Project Work; provided,
however, that Soft Costs shall not include (i) salaries or benefits of
Landlord’s employees unless, and then only to the extent, they are in
substitution of costs that would otherwise have been payable to a third party
design or engineering firm, (ii) any cost to the extent it is otherwise included
in Construction Costs or Land Costs, (iii) impact fees with respect to the
Project, or (iv) any costs for in-house personnel of Landlord or Landlord’s
Contractor unless such costs are expressly included in the Cost of the Work and
are in lieu of costs that necessarily would have been paid to third-party
providers for such service (and are not in fact being provided by such
third-party provider) or reduce the costs that would have otherwise been

 

Appendix I - 19

--------------------------------------------------------------------------------

 

paid to third-party providers of such service (and in such event then only to
the extent of such reduced cost).

 

Substantial Completion of Base Project Work/Laboratory Work is defined in
Section 5(a) of the Work Letter.

 

Substantial Completion of the Project is defined in Section 4(b) of the Work
Letter.

 

Substitute Tenant is defined in Section 24(b)(iv).

 

Taxes shall mean:

 

(a)                                  all real estate taxes, liens, charges,
impositions and assessments of every kind and nature, ordinary or extraordinary,
foreseen or unforeseen, general or special, levied, assessed or imposed by any
Governmental Authority with respect to the Leased Property.  Notwithstanding the
foregoing:

 

(i)                                     if at any time during the Term the
present system of ad valorem taxation of real property or in lieu of an increase
in the ad valorem tax, shall be changed or supplemented so that in lieu of the
ad valorem tax on real property there shall be assessed on Landlord or the
Leased Property any tax of any nature which is imposed in whole or in part, in
substitution for, or in lieu of any tax which would otherwise constitute a Tax,
such tax shall be included within the term “Taxes,” but only to the extent that
the same would be payable if the Leased Property were the only property of
Landlord; and

 

(ii)                                  Taxes shall also encompass all of
Landlord’s expenses, reasonably incurred, including but not limited to
reasonable attorney’s fees and expenses, incurred by Landlord in any effort to
minimize Taxes whether by contesting proposed increases in assessments, applying
for the benefit of any tax abatement program available for the Leased Property,
appealing the denial of any such tax abatement, or contesting any challenge to
the validity of any tax abatement program or its applicability to the Leased
Property or by any other means or procedures appropriate in the circumstances;
and

 

(b)                                 there shall be excluded from Taxes all net
income, excess profit, excise, franchise, estate, succession and inheritance
taxes, penalties due to Landlord’s lateness or failure to pay taxes when due and
transfer taxes imposed on Landlord.

 

Tenant Delay is defined in Section 4(d)(ii) of the Work Letter.

 

Tenant Improvements shall mean all of the leasehold improvements to the Leased
Property to be constructed in accordance with, and as shown in, the TI Work
Plans, but shall not include any of the Base Project Work.

 

Tenant Indemnified Parties (and each is a Tenant Indemnified Party) means
Tenant, any permitted assignee or sublessee of Tenant, if any, and their
respective successors and permitted assigns, the beneficial owners of any of the
foregoing and any trustees, beneficiaries, members, partners, shareholders,
officers, directors, participants, employees, professionals and agents of Tenant
and any permitted sublessee or assignee of Tenant.

 

Appendix I - 20

--------------------------------------------------------------------------------

 

Tenant Parking Facilities is defined in Section 1(b).

 

Tenant’s Agents means one or more or all of Tenant’s officers, directors,
managers, trustees, shareholders, agents, contractors, invitees and employees.

 

Tenant’s Insurance Payment means, if a Casualty occurs, an amount equal to the
sum of (i) the insurance proceeds that would have been payable under the
third-party insurance Tenant is required to maintain in accordance with
Section16 had such insurance been in effect, and (ii) the proceeds payable by
Tenant if Tenant elects to self insure in accordance with Section 16.

 

Tenant’s Option Notice is defined in Section 43(a).

 

Tenant’s Property means Trade Fixtures and Personalty owned by Tenant.

 

Tenant’s SNDA Requirements means, with respect to an SNDA during the period that
there are Unperformed Landlord Obligations, that the SNDA provides: (a) that
Lender, as successor to Landlord’s interest under this Lease by mortgage
foreclosure or by deed in lieu of foreclosure, shall perform the Unperformed
Landlord Obligations; (b) that the Lender agrees that the loan proceeds are and
will be available to complete the Unperformed Landlord Obligations; and (c) that
such Lender shall be subject to Tenant’s offset rights with respect to the
Unperformed Landlord’s Obligations, subject to a ten (10) day grace period for
Lender for Events of Default based on the failure to pay a monetary obligation
and a forty-five (45) day grace period for Events of Default based on the
failure to perform non-monetary obligations.

 

Term means the Basic Term, plus any Renewal Term or Renewal Terms.

 

TI Plans means the plans and specifications for the Tenant Improvements to be
prepared and adopted as provided in the Work Letter, as the same may be modified
from time to time pursuant to the terms of this Lease.

 

TI Work is defined in Section 3(b)(iii) of the Work Letter.

 

Toxic Mold means any toxic mold or fungus of a type that may pose a risk to
human health or the environment or would negatively impact the value of the
Leased Property.

 

Trade Fixtures means all trade fixtures and equipment pertaining to Tenant’s (or
any sublessee’s) business operation within the Improvements and owned by Tenant
or any sublessee of Tenant (but specifically excluding Improvements, Building
Systems and other replacements of fixtures, machinery and equipment which are
leased or owned by Landlord).

 

Unperformed Landlord Obligation is defined in Section 11.

 

Work Letter means the Work Letter attached hereto as Exhibit F.

 

Appendix I - 21

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

Cash Requirements

 

Schedule 1 - 1

--------------------------------------------------------------------------------

 

West Pharmaceutical Services
Cash Flow Projection -11/3/2010

 

170,000 Square Feet

 

 

 

Assume

 

 

 

 

 

$23,800,000 ($140/SF)

 

$7,650,000 ($45/SF)

 

Forward 6 Month Total

 

 

 

Core & Shell

 

TI

 

 

 

 

 

 

 

 

 

 

 

Pre March 2011

 

$

900,000.00

 

 

 

$

7,600,000.00

 

March 2011

 

$

200,000.00

 

 

 

$

9,400,000.00

 

April 2011

 

$

1,000,000.00

 

 

 

$

12,000,000.00

 

May 2011

 

$

1,500,000.00

 

 

 

$

15,500,000.00

 

June 2011

 

$

1,500,000.00

 

 

 

$

17,500,000.00

 

July 2011

 

$

2,500,000.00

 

 

 

$

20,000,000.00

 

August 2011

 

$

2,500,000.00

 

$

200,000.00

 

$

20,000,000.00

 

September 2011

 

$

2,500,000.00

 

$

300,000.00

 

$

18,750,000.00

 

October 2011

 

$

3,500,000.00

 

$

1,000,000.00

 

$

17,400,000.00

 

November 2011

 

$

2,500,000.00

 

$

1,000,000.00

 

$

13,050,000.00

 

December 2011

 

$

2,500,000.00

 

$

1,500,000.00

 

$

10,350,000.00

 

January 2012

 

$

1,000,000.00

 

$

1,500,000.00

 

$

6,355,000.00

 

February 2012

 

$

450,000.00

 

$

1,000,000.00

 

$

3,850,000.00

 

March 2012

 

$

450,000.00

 

$

1,000,000.00

 

$

2,400,000.00

 

April 2012

 

 

 

$

150,000.00

 

$

950,000.00

 

October 2012

 

$

800,000.00

 

 

 

$

800,000.00

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Description of Land

 

ALL THAT CERTAIN tract or parcel of land SITUATE in Uwchlan Township, Chester
County, Pennsylvania, shown as Lots 19 & 40 Combined on Final Land Development
Eagleview Lots 19 & 40 For The Hankin Group (Record Plan, Sheet 2 of 21), dated
September 22, 2010, last revised November 17, 2010, by Chester Valley
Engineers, Inc., Paoli, Pennsylvania (CVE Project No. 11960-0040), and bounded
and described as follows:

 

BEGINNING at a corner of this and lands of Lot 18, now or late of Eagleview
Ventures, L.P. (UPI #33-4-11.2) on the cul-de-sac right of way line of Regency
Drive (50 feet wide); thence from the point of beginning, easterly along the
southeasterly right of way line of said Regency Drive, the following six
(6) courses and distances:  (1) along a curve to the left having a radius of
50.00 feet, an arc length of 113.42 feet and a chord bearing South 76 degrees 02
minutes 13 seconds East 90.62 feet to a point of reverse curvature:  (2) along a
curve to the right having a radius of 25.00 feet, an arc length of 21.03 feet
and a chord bearing North 63 degrees 04 minutes 13 seconds East 20.41 feet to a
point of reverse curvature; (3) along a curve to the left having a radius of
75.00 feet, an arc length of 10.75 feet and a chord bearing North 83 degrees 03
minutes 28 seconds East 10.74 feet to a point of tangency; (4) North 78 degrees
57 minutes 02 seconds East 20.70 feet to a point of curvature; (5) along a curve
to the left having a radius of 233.50 feet, an arc length of 143.33 feet and a
chord bearing North 61 degrees 21 minutes 55 seconds East 141.09 feet to a point
of tangency; (6) North 43 degrees 46 minutes 47 seconds East 40.44 feet to a
point of offset, the said southeasterly right of way line of Regency Drive
widening to be 55 feet southeasterly from and parallel with the northwesterly
right of way line thereof; thence partly along said southeasterly right of way
line and partly along lands of Lot 15, now or late of E.I. DuPont De Nemours and
Company, crossing over the northwesterly corner of said Lot 15 on the said
widened right of way line of Regency Drive 5.41 feet distance, South 23 degrees
42 minutes 35 seconds East 343.86 feet to a point; thence along said lands of
Lot 15 and along lands of Lot 13, now or late of Uwchlan Township Municipal
authority South 23 degrees 05 minutes 44 seconds East 404.52 feet to a corner of
lands now or late of Claremont Apartments, L.P., thence along said lands of
Claremont Apartments, the following two (2) courses and distances:  (1) South 70
degrees 35 minutes 37 seconds West 391.31 feet to a point; (2) North 71 degrees
00 minutes 00 seconds West 1,105.76 feet to a point on line of lands of Lot 21
Town Center, now or late of Hankin Enterprises LTD; thence along said lands of
Lot 21, the following two (2) courses and distances:  (1) North 19 degrees 00
minutes 00 seconds East 427.81 feet to a point; (2) North 39 degrees 06 minutes
07 seconds East 722.47 feet to a corner of lands of Lot 16, now or late of
Citadel Federal Credit union; thence along said lands of Lot 16, South 47
degrees 50 minutes 05 seconds East 262.66 feet to a corner of lands of Lot 18,
now or late of Eagleview Ventures, L.P., aforesaid;

 

Exhibit A – 1

--------------------------------------------------------------------------------

 

thence along said lands of Lot 18, the following three (3) courses and
distances:  (1) South 42 degrees 13 minutes 01 seconds West 314.50 feet to a
point; (2) South 47 degrees 46 minutes 59 seconds east 290.97 feet to a point;
(3) North 78 degrees 57 minutes 02 seconds East 35.25 feet to a point on the
said cul-de-sac right of way line of Regency Drive, and the point and place of
beginning; and CONTAINING in area 21.098 acres of land, by the same, more or
less.

 

BEING UPI #33-4-11.3 and UPI #33-4-11.4

 

Exhibit A – 2

--------------------------------------------------------------------------------

 

EXHIBIT B

 

Description of Existing Land

 

Tax Parcel No. 33-4-11.4

 

ALL THAT CERTAIN lot of tract of ground Situate in Uwchlan Township, Chester
County, PA described according to a Subdivision Plan for Lots 18, 19 and 40
Eagleview Corporate Center and made by Chester Valley Engineers, Inc., Paoli, PA
dated 5/30/1997 and last revised 7/10/1997 and recorded in Chester County as
Plan No. 13963 as follows to wit:

 

BEGINNING at a point on the Southeasterly side of Road “A” (Regency Drive), a
corner of Lot No. 15; thence extending along Lot No. 15 South 23 degrees 42
minutes 35 seconds East 343.86 feet to a point; thence continuing along Lot
No. 15 and also along Lot No. 13 and crossing a 30 feet wide sanitary sewer
easement and a 50 feet wide drainage easement South 23 degrees 05 minutes 44
seconds East 404.52 feet to a point; a corner of lands now or late of The Hankin
Group; thence extending along last mentioned lands the three following courses
and distances (1) South 70 degrees 35 minutes 37 seconds West 391.31 feet to a
point; and (2) North 71 degrees 00 minutes 00 seconds West crossing two 50 feet
wide drainage easements 1,105.76 feet to a point; and (3) North 19 degrees 00
minutes 00 seconds East 427.81 feet to a point; a corner of Lot No. 19; thence
extending along Lot No. 19 the three following courses and distances (1) South
54 degrees 59 minutes 26 seconds East crossing a 50 feet wide drainage easement
and Wetlands 426.23 feet to a point (2) North 70 degrees 12 minutes 46 seconds
East crossing a 30 feet wide sanitary sewer easement 376.84 feet to a point; and
(3) North 21 degrees 14 minutes 30 seconds East 46.06 to a point of curve on the
Southeasterly side of Road “A” (Regency Drive); thence extending along Regency
Drive the five following courses and distances (1) extending along an arc of a
circle curving to the left having a radius of 50.00 feet and the arc distance of
50.12 feet a point of reverse curve; (2) extending along an arc of a circle
curving to the right having a radius of 25.00 feet and the arc distance of 8.79
feet to a point of tangent; (3) thence extending North 78 degrees 57 minutes 02
seconds East 36.24 feet to a point of curve; (4) thence extending along an arc
of a circle curving to the left having a radius of 233.50 feet and the arc
distance of 143.33 feet to a point of tangent; and (5) thence extending North 43
degrees 46 minutes 47 seconds East 40.44 feet to the point of beginning.

 

Exhibit B – 1

--------------------------------------------------------------------------------

 

EXHIBIT C

 

Description of Additional Land

 

Tax Parcel No. 33-4-11.3

 

ALL THAT CERTAIN lot or piece of ground with the buildings and improvements
thereon erected, situated in the Township of Uwchlan, County of Chester,
Commonwealth of Pennsylvania bounded and described according to a Subdivision
Plan for Lots 18, 19 and 40 Eagleview Corporate Center made by Chester Valley
Engineers, Inc., dated 5/30/1997, revised 7/10/1997 and recorded 7/28/1997 as
Chester County Plan No. 13963, as follows, to wit:

 

BEGINNING at a point on the South side of cul-de-sac at the end of Road A as
shown on said Plan, said point being a corner of Lot No. 40; thence from said
beginning point and along said Lot No. 40 the three following courses and
distances (1) South 21 degrees 14 minutes 30 seconds West 46.06 feet to a point;
(2) South 70 degrees 12 minutes 46 seconds West 376.84 feet to a point;
(3) North 54 degrees 59 minutes 26 seconds West 426.23 feet to a point a corner
of other lands of Eagleview Corporate Center; thence along the same North 39
degrees 06 minutes 07 seconds East 722.47 feet to a point a corner of Lot
No. 16, being lands now or late of March Creek Realty, L.P.; thence along the
same and along an Atlantic High Pressure Petroleum Pipeline Easement, South 47
degrees 50 minutes 05 seconds East 262.66 feet to a point a corner of Lot No. 18
of said Plan; thence along the same the three following courses and distances
(1) South 42 degrees 13 minutes 01 seconds West 314.05 feet to a point;
(2) South 47 degrees 46 minutes 59 seconds East 290.97 feet to a point;
(3) North 78 degrees 57 minutes 02 seconds East 35.25 feet to a point of curve
on said cul-de-sac of Road A; thence along the same on the arc of a circle
curving to the left having a radius of 50.00 feet the arc distance of 50.37 feet
to the first mentioned point and place of beginning.

 

Exhibit C – 1

--------------------------------------------------------------------------------

 

EXHIBIT D

 

Description of Park

 

Eagleview totals over 800 acres of which approximately 565 acres are a corporate
center with office, research and development, and flex buildings.  An adjoining
235+/- acres are a residential community which includes detached single family
homes, townhomes, apartments, a mid-rise condominium and a senior citizen
apartment building.  These numerous commercial and residential uses surround a
Town Center with retail shops, a YMCA fitness/daycare facility, condominiums,
and a two acre town square.

 

Eagleview’s residential component is approximately 80% complete with future
plans for. 210 senior apartments.  The corporate center currently includes 32
buildings totaling 2,000,000+/- square feet.  Additional sites can accommodate
slightly over 1,250,000 square feet more of commercial space.  The Town Center
plans call for a second retail building of 16,000+/- square feet and another
condominium building of 60 units.

 

Exhibit D – 1

--------------------------------------------------------------------------------

 

EXHIBIT E

 

Permitted Encumbrances

 

A.            1.             Rights granted to Keystone Pipe Line Company as in
Misc. Deed Book 57 page 112, Misc. Deed Book 66 page 588 and Misc. Deed Book 67
page 332.

 

2.             Rights of others in and to stream crossing through premises.

 

3.             Rights granted to Philadelphia Electric Co. as set forth in
Record Book 988 page 195 and Record Book 1158 page 230.

 

4.             Rights granted to Uwchlan Township Municipal Authority in Record
Book 1154 page 168 and Record Book 1154, page 174.

 

5.             Rights granted to The Bell Telephone Co. of PA as set forth in
Record Book 1789 page 440.

 

6.             Amended and Restated Declaration of Easements and Protective
Covenants recorded in Record Book 2074 page 240, together with Supplement and
Clarification thereto recorded in Record Book 2363 page 499 and First Amendment
thereto recorded in Record Book 2596 page 550, Second Amendment recorded in
Record Book 3590 page 1986, Third Amendment recorded in Record Book 3672
page 579, Fourth Amendment recorded in Record Book 4177 page 2306, Fifth
Amendment recorded in Record Book 4206 page 1534, Sixth Amendment recorded in
Record Book 4365 page 649, Seventh Amendment recorded in Record Book 4744
page 278, Eighth Amendment recorded in Record Book 7006 page 2299, and Ninth
Amendment recorded in Record Book 7333 page 940.

 

7.             Terms and conditions as set forth in Record Book 4178 page 260
and Record Book 4219 page 1237.

 

8.             The Leased Property shall not be used for the sale or
distribution of any pornography, pornographic film, pornographic literature,
illegal drug paraphernalia or any like or related thing.

 

9.             Conditions as on Plan Numbers 13847 and 13963.

 

10.           Grant of Easement to Philadelphia Suburban Water Company as in
Record Book 4547 page 84.

 

11.           Grant of Cross Easement for Storm Water Management as in Record
Book 4623 page 425.

 

12.           Right of Way to PECO Energy Company, Bell
Atlantic-Pennsylvania, Inc., and Suburban Cable TV Co., Inc., as in Record Book
4668 page 1572.

 

Exhibit E – 1

--------------------------------------------------------------------------------

 

13.           Declaration of Covenants and Conservation Easement as in Record
Book 4723 page 202.

 

14.           Grant of Easement to Philadelphia Suburban Water Company as in
Record Book 5007 page 1001.

 

B.            Landlord represents and warrants that (a) none of the foregoing
will (i) materially interfere with or prevent Tenant from operating at the
Leased Property in accordance with the terms of this Lease, (ii) conflict with
any right granted Tenant under this Lease, (iii) impose on Tenant any
obligation(s) in excess of those set forth in this Lease, and (b) none of the
foregoing easements or rights of way (i) are located beneath the Building, or
(ii) will materially interfere with Tenant’s use and enjoyment of the Leased
Property in accordance with the Lease.

 

Exhibit E – 2

--------------------------------------------------------------------------------

 

EXHIBIT F

 

Work Letter

 

Exhibit F – 1

--------------------------------------------------------------------------------

 

 

EXHIBIT F

 

Work Letter

 

WORK LETTER FOR LANDLORD’S COMPLETION OF THE BASE PROJECT WORK AND TI WORK

 

As material inducement to Tenant to enter into the Lease, and in consideration
of the covenants herein contained, Landlord and Tenant, intending to be legally
bound, agree as follows:

 

1.             Incorporation of Lease; Schedule; Representatives.

 

(a)           Lease; Defined Terms.  The Lease is hereby incorporated by
reference to the extent that the provisions of this Work Letter apply thereto. 
Without limiting the foregoing, any notice or other communication given or
required to be given in connection with the matters covered by this Work Letter
shall be in writing and shall be given in the manner notice is required to be
given under the Lease.  Terms not otherwise defined in this Work Letter shall
have the meanings given to them in the Lease.  This exhibit shall constitute the
“Work Letter” referred to in the Lease.

 

(b)           Schedule; Representatives; Project Architect.

 

(i)            Schedule. Attached hereto as Attachment 1 is a preliminary
schedule of certain major project dates or timeframes pertaining to the design,
development and completion of the Base Project Work and the TI Work (as such
terms are defined herein) (the “Preliminary Schedule”).  Within thirty (30)
calendar days following the Effective Date, Landlord and Tenant shall develop
and prepare a comprehensive, integrated and coordinated project schedule (the
“Schedule”), incorporating the dates and timeframes set forth in the Preliminary
Schedule, the other specific dates and timeframes expressly set forth in this
Work Letter, and further addressing and setting forth specific dates for the
timeline and sequencing of the tasks to be accomplished by Landlord and Tenant
(i) with respect to the design, planning, coordination, construction and
completion of the Base Project Work, and (ii) with respect to the design,
planning, coordination, construction and completion of the Tenant Improvements. 
The Schedule will include, but not be limited to, such matters as the projected
timeline for design, construction phasing, site logistics, preparation,
delivery, filing and review of, and responses to, the TI Work Plans, completion
of foundations, erection of steel, pouring and testing of concrete floor slabs,
erection, sealing and testing of curtain wall, roof and window walls,
commencement and substantial and final completion dates of construction for the
Base Project Work and the TI Work (including, but not limited to, the Target
Dates and the Outside Delivery Dates, each as defined below), access for the
delivery, storage, furnishing and installation of Tenant’s furniture, fixtures
and equipment, and receipt of all permits and approvals (including, but not
limited to, temporary and permanent certificates of occupancy).  Subject to the
last sentence of this Section 1(b)(i), the Schedule may be amended by Landlord
from time to time prior to the execution of the Base Project Construction
Contract (as hereinafter defined) without Tenant’s prior written consent (but
upon Notice to Tenant) unless such proposed amendment (1) alters or purports to
alter the Outside Delivery Date, or (2) affects or purports to affect, adversely
and in any material respect,

 

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the obligations or responsibilities of Tenant under the Lease or this Work
Letter, in each of which events Tenant shall have the right to approve or
disapprove any such proposed amendment in its sole discretion. Upon execution of
the Base Project Construction Contract and the TI Construction Contract (as such
terms are hereinafter defined), the Schedule shall be updated to conform to the
schedules set forth in those construction documents, with respect to the work to
be performed thereunder; provided, however, that unless otherwise approved by
Tenant in writing such updating shall not alter or purport to alter the Outside
Delivery Date for the Base Project Work or the Outside Delivery Date for the TI
Work.  Landlord shall provide to Tenant an updated Schedule on at least a
monthly basis (which shall track actual progress against the most-recent
preceding Schedule), and inform Tenant of the progress of the Base Project Work
and the TI Work upon request from Tenant from time to time.  Notwithstanding the
foregoing, except in the event of Unavoidable Delay(s), in no event shall
Landlord have the right to modify the Target Dates within thirty (30) days prior
to the then-scheduled date for the occurrence thereof, unless such revised date
is approved by Tenant in writing in Tenant’s sole discretion, and in such case
subject to the provisions of this Work Letter.

 

(ii)           Representatives.  The following persons (or such other person as
Landlord or Tenant, as the case may be, may designate from time to time in
writing to the other) are hereby identified as the representatives of their
respective Parties (with respect to the Landlord, the “Landlord’s Construction
Representative,” and, with respect to Tenant, the “Tenant’s Construction
Representative”).  In no event shall Landlord or Tenant, as applicable,
designate more than one person at any time to act as Landlord’s Construction
Representative or Tenant’s Construction Representative, as applicable,
hereunder.  Landlord and Tenant (and Landlord’s Construction Representative and
Tenant’s Construction Representative, as the case may be) may rely on all
instructions, consents, agreements, changes and modifications made by Landlord’s
Construction Representative (as to Landlord) and Tenant’s Construction
Representative (as to Tenant) as having been made by, and binding upon, Landlord
and Tenant, as the case may be, and no instruction, consent, agreement, change,
modification or communication made or given (or purportedly made or given) by or
on behalf of Landlord or Tenant, as the case may be, with respect to the Base
Project Work or the TI Work shall be valid, enforceable or binding on Landlord
or Tenant, as the case may be, unless the same shall have been made or given by
Landlord’s Construction Representative (as to Landlord) or the Tenant’s
Construction Representative (as to Tenant), or by an executive officer or other
senior management executive of Landlord or of West Pharmaceutical Services, Inc.
(in the case of Tenant).  Each Party agrees to make its designated
representative (or a substitute representative with comparable authority)
available upon reasonable notice, for communications and consultation with the
other Party, its contractors and representatives.

 

On behalf of the Landlord: Lance Hillegas

 

Phone: (610) 458-1900
Facsimile: (610) 458-5168
E-mail:    lance.hillegas@hankingroup.com

 

On behalf of the Tenant: Ron Street
Phone: (610) 896-8100 ext. 261

 

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Facsimile: (610) 896-9275
E-mail:    rstreet@northstar-advisors.com

 

(iii)          Project Architect.  Landlord and Tenant have each engaged
Ballinger Company (“Architect”), with an address at 833 Chestnut Street,
Suite 1400, Philadelphia, Pennsylvania 19107, to provide design services (i) to
Landlord with respect to the Base Project, under an agreement between Landlord
and Architect, and (ii) to Tenant with respect to the Tenant Improvements under
an agreement between Tenant and Architect.  Landlord and Tenant acknowledge and
agree that:

 

(1)           The services to be provided by Architect to Landlord and to Tenant
under their respective agreements with Architect shall constitute separate
rights and obligations of each of them to and with Architect and neither
Landlord nor Tenant shall be responsible for the other’s obligations to
Architect; and

 

(2)           Landlord and Tenant shall work cooperatively with Architect in the
design of the Building and other components to be constructed by Landlord as a
part of the Base Project Work, and the design of the Tenant Improvements, to
enable Architect to execute Architect’s services efficiently and without undue
cost or delay.

 

Either Landlord (with respect to the Base Project) or Tenant (with respect to
the Tenant Improvements) may hereafter engage any architect or other design
professional having qualifications reasonably suitable to the applicable
engagement, and who is not objectionable to the other Party in the exercise of
its good faith and reasonable judgment, to provide services in addition to or in
substitution for those of the Architect hereunder, on behalf of the engaging
Party.  If either Party engages any architect in substitution for the Architect
with respect to the engaging Party’s work and obligations hereunder, then
(i) the term “Architect” as used herein shall include such substitute architect
as the context shall require, (ii) the other Party shall cause the Architect to
cooperate with such substitute architect, and (iii) the Party engaging such
substitute architect shall have the right to have the work and actions of the
Architect reviewed by such substitute architect for the purpose of protecting
the interests of the engaging Party, consistent with the provisions of this
Section 1(b).  Notwithstanding the foregoing, no cost of any additional or
substitute Architect engaged by Landlord shall be included as a Project Cost
unless such engagement, and the terms thereof, shall have been approved in
advance by Tenant, which approval shall not be unreasonably withheld, delayed or
conditioned.

 

2.             Base Project Work.

 

(a)           Construction and Completion of Base Project Work.  Landlord, at
its sole cost and expense, shall commence and complete (and shall cause
Landlord’s Contractor, as hereinafter defined, to complete) the construction of
the Building and other components of the Project (other than the Tenant
Improvements, which work is provided for elsewhere in this Work Letter) in a
good and workmanlike manner in accordance with the Base Project Construction
Documents, the Lease and the Schedule.  The work to be completed by Landlord
hereunder as described in the Base Project Construction Documents shall be
referred to herein, collectively, as the “Base Project Work.”  The “Base Project
Construction Documents” shall be established as hereinafter provided.

 

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(b)           Base Project Construction Documents.

 

(i)            Prior to the execution of the Lease, Landlord and Tenant have
agreed upon certain design development drawings and specifications for the Base
Project Work as listed on Attachment 2 attached hereto and made a part hereof
(collectively, the “Design Development Documents”).

 

(ii)           Based on the Design Development Documents, Landlord shall cause
the Architect to prepare and deliver to Tenant’s Representative, for review and
approval by Tenant (and if requested by Tenant, Landlord shall cause the
Architect to deliver to Tenant one digital Auto-Cad drawing file format (latest
version), free of copyright or accompanied by a license for use in connection
with the Base Project Work and TI Work and any subsequent alteration or addition
thereto or reconstruction thereof, and three (3) copies of) “Project
Construction Documents” consisting of final plans and specifications for the
construction of the Base Project Work, which shall (i) be consistent with the
Design Development Documents, (ii) be complete and fully coordinated,
(iii) include the depiction of all work necessary to obtain a certificate or
statement of occupancy from all applicable governmental authorities having
jurisdiction, for the Building and other improvements to be constructed by
Landlord as a part of the Project (except for work to be performed as a part of
the TI Work), and (iv) be signed and sealed by the Architect or, if applicable,
Landlord’s professional engineer, licensed and registered in the Commonwealth of
Pennsylvania. The Project Construction Documents shall also conform in all
material respects to actual field conditions and all applicable Legal
Requirements, and the requirements of public authorities and with the reasonable
and customary requirements of insurance underwriters, and shall be sufficient
for the issuance of all building permits required for the construction of the
Base Project Work.  The Project Construction Documents shall contain, at a
minimum, floor plans, structural plans, reflected ceiling plans, power and
telephone plans, mechanical plans, details and elevations, electrical plans,
fire protection plans, the locations and specifications for all mechanical,
electrical, fire protection, security and life safety equipment, and the
locations of all partitions, doors, lighting fixtures, electrical receptacles
and switches, and other relevant construction details, but only to the extent
that these are part of the Base Project Work and not TI Work, together with all
other plans and specifications required for the complete construction of the
Base Project Work.

 

(iii)          Tenant shall have the right to review and give its approval or
disapproval of the Project Construction Documents, giving specific and
reasonably detailed reasons in case of disapproval, to Landlord within ten
(10) Business Days following receipt thereof.  Tenant shall not disapprove any
elements of the Project Construction Documents that are consistent with the
corresponding elements as shown on Design Development Documents that Tenant has
previously approved, except due to manifest error, including (but not limited
to) failure of the same to comply with applicable governmental requirements.  If
Tenant disapproves any part of Landlord’s Project Construction Documents in
accordance with this Section 2(b)(iii), Landlord shall, within ten (10) Business
Days thereafter, submit to Tenant, for its approval, further modified final
construction documents for the Base Project Work, which shall be subject to the
same approval process as the final construction documents for the Project
Construction Documents originally submitted by Landlord to Tenant, except that
(A) the time periods for review and approval or disapproval on the part of
Tenant shall be five (5) Business Days, and (B) the time period for responsive
submissions by Landlord shall be five (5) Business Days, and (C)

 

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Tenant shall not withhold Tenant’s approval unless Tenant determines in good
faith that the revisions submitted by Landlord are not responsive to or adequate
to resolve fully the detailed reasons for disapproval raised by Tenant in
Tenant’s response to Landlord preceding submission.  Landlord and Tenant,
respectively, shall prepare, submit and review, as the case may be, each
successive revision and resubmittal of revisions of Landlord’s final
construction documents for the Base Project Work until the same have been
approved by Landlord and Tenant in accordance with the terms of this Work
Letter.  Tenant shall, for all purposes hereof and for purposes of all
subsequent installments or phases of the Project Construction Documents to be
delivered to Tenant hereunder, be deemed to have approved all portions of such
Project Construction Documents not expressly disapproved by Tenant in accordance
with the foregoing procedure.  If Tenant fails to respond during the required
approval period set forth herein, unless such failure is due to Unavoidable
Delay(s) communicated to Landlord in writing within the time period provided to
Tenant for approval, Tenant shall be deemed to have approved the applicable
phase(s) or installment(s) of the Project Construction Documents submitted to
Tenant; provided, however, that Tenant shall not be deemed to have approved of
any portion of the Project Construction Documents that is inconsistent with the
Design Development Documents unless (i) such inconsistency is highlighted in the
Project Construction Documents, and (ii) Tenant’s attention is directed
expressly to such inconsistency in Landlord’s cover letter or other memorandum
accompanying Landlord’s submittal of the Project Construction Documents to
Tenant.

 

(iv)          Following approval by Landlord and Tenant of Landlord’s plans and
specifications for the Base Project Work in accordance with the provisions
hereof, such revised plans and specifications for the Base Project Work (or a
schedule of such revised plans and specifications) shall thereupon constitute
the “Base Project Construction Documents”.

 

(v)           In the implementation of the foregoing process to establish the
Base Project Construction Documents, and during each phase or installment
thereof, Landlord and Tenant shall adhere to and observe any specific dates set
forth in the Schedule pertaining to each stage of submission, response and
approval of plans, specifications and other documents, and shall act diligently
and in good faith to take such other actions, and to cause their respective
agents, consultants and contractors to take such other actions, as are
appropriate in order to achieve the final approval of the Base Project
Construction Documents within the period set forth in the Schedule.

 

(vi)          Landlord shall not have the right to make any changes to the
approved Base Project Construction Documents, or the Base Project Work (each, a
“Landlord Change”) without first consulting with Tenant and receiving Tenant’s
approval.  Tenant’s approval under the preceding sentence shall not be
unreasonably withheld, conditioned or delayed; provided (and without limitation)
that it shall not be unreasonable for Tenant to withhold its approval of any
such proposed Landlord Change if the same (A) increases the Project Cost unless
Landlord waives, in writing, any corresponding increase in the Basic Rent,
(B) results in a delay in the Substantial Completion of Base Project
Work/Laboratory Work or the TI Work in accordance with the then-current
Schedule, (C) impairs access to or use of the Leased Property for the Permitted
Use, (D) materially alters the aesthetic appearance of the Leased Property or
any of the improvements to be constructed thereon (including without limitation
the number, location or configuration of parking spaces and drive aisles),
(E) materially increases the Operating

 

F-5

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Expenses, (F) materially increases the cost of the TI Work, (G) materially
impairs the visibility of Tenant’s signage, (H) materially impairs or interferes
with the layout or configuration or utility of the Tenant Improvements, or
(I) is inconsistent with the quality of finish and operations contemplated by
the Base Project Construction Documents. Additionally, Tenant’s approval shall
not be withheld, delayed or conditioned if the Landlord Change (1) is minor and
the result of field conditions encountered in the course of construction of
which Landlord did not have actual knowledge, or (2) is required because
specified materials or equipment are not available on commercially reasonable
terms, in each case provided that the proposed Landlord Change is consistent
with the quality of finish and operations contemplated by the Base Project
Construction Documents.  Landlord shall also give reasonable consideration to
Tenant’s suggested alternatives to any proposed Landlord Change.  Landlord, upon
Tenant’s approval (such approval not to be unreasonably withheld or delayed),
may make substitutions of materials in the Base Project Work of equal or better
quality and performance and that do not materially affect the utility,
efficiency or constructability of the Base Project Work, the TI Work or the
Leased Property, or materially increase the Project Cost. If any Landlord Change
to the Base Project Construction Documents or the Base Project Work, or any
substitution, necessitates changes to the TI Work Plans, then any additional
cost (including, without limitation, overtime cost and design fees) incurred by
Tenant to make such changes to the TI Work Plans shall be borne by Landlord and
promptly paid to Tenant, and any additional time required shall be a Landlord
Delay (as defined herein).  In addition, the reasonable third-party costs
incurred by Tenant in connection with reviewing the design and engineering of
the proposed Landlord Change shall be reimbursed by Landlord to Tenant within
thirty (30) days of Landlord’s receipt of an invoice therefor.

 

(vii)         Tenant’s review of Landlord’s design documents shall not, in any
manner, be deemed a review for compliance with any Legal Requirements
(including, without limitation, the ADA and regulations thereunder), for
completeness, for constructability (including means and methods), for
availability of materials specified, or for suitability for the purposes
intended, all of which shall remain the responsibility of Landlord. Such review
by Tenant shall not, in any manner, relieve Landlord of its obligation to
provide complete design documentation for the Base Project Work in accordance
with this Work Letter. Tenant shall be entitled to rely on the material accuracy
and completeness of the Base Project Construction Documents.

 

(viii)        Landlord and Landlord’s contractors shall be fully responsible for
all construction means, methods, techniques, sequences and procedures (including
without limitation those with respect to safety) and for coordinating the
construction of the Base Project Work, all of which shall be undertaken in
conformity with the requirements set forth in this Exhibit, it being understood
and agreed that neither Tenant nor Tenant’s Construction Representative will be
responsible for nor have control or charge of construction means, methods,
techniques, sequences or procedures, or for safety precautions and programs in
connection with all or any part of the Base Project Work.

 

(ix)           Notwithstanding any provision in this Section 2(b) to the
contrary, Landlord may cause the Architect to make available a secure website,
and assign a password to Tenant to permit Tenant access thereto, which website
will provide access to Design Development Documents and Base Project
Construction Documents, as the same are developed by Architect and the design
professionals engaged by Architect.  All such documents shall be

 

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deemed delivered to a Party once a Party or its designated representative is
notified by email that a particular document is available on such website, and
any time period applicable to review and approval of such document shall be
measured from the business day on which such email is delivered.

 

(c)           Tenant Modifications to Base Project Work. Landlord shall
cooperate and work in good faith with Tenant to allow Tenant to make
modifications to the Base Project Construction Documents during the preparation
thereof.  Additionally, Landlord also shall cooperate and work in good faith
with Tenant to allow Tenant to make modifications to the Base Project
Construction Documents after the approval thereof pursuant to Sections
2(b)(iii) and (iv) above, and during the design and preparation of the TI Work
Plans.  For purposes hereof, an “Additional Base Project Change” shall mean
(i) any revisions, alterations or upgrades to the Base Project Construction
Documents requested by Tenant prior to the approval thereof that do not conform
in any material respect to the Design Development Documents; and (ii) any
revisions, alterations or upgrades to the Base Project Construction Documents
requested by Tenant after the approval thereof pursuant to Section 2(b) above to
customize them to Tenant’s needs or desires.  In no event shall any revisions,
alterations or corrections to the Base Project Construction Documents requested
by Tenant, at any time, for the purpose of correcting any defect therein
(including any change or correction required to comply with any laws or
governmental requirements or to reflect field conditions) or any inconsistency
thereof with the Design Development Documents constitute an Additional Base
Project Change.  Any additional Base Project Work arising out of an Additional
Base Project Change is referred to herein as “Additional Base Project Work”.  If
Tenant desires to make any Additional Base Project Change, Tenant shall so
notify Landlord in writing, specifying in reasonable detail in such Notice the
nature and scope of such revisions, alterations or upgrades (the “Additional
Base Project Change Notice”).  With respect to each Additional Base Project
Change:

 

(i)            Such Additional Base Project Change shall be subject to
Landlord’s reasonable approval for impact on and compatibility with Building
Systems, structure, safety and security.  Landlord may also withhold Landlord’s
approval of such proposed Additional Base Project Change if such revision,
alteration or upgrade is (based on the application of the same objective
judgment as would be exercised by a disinterested third party having experience
in the leasing and operation of comparable office/laboratory buildings in the
metropolitan Philadelphia area) inconsistent with the design and operation of a
comparable office/laboratory building, and is likely to impair the ability of
Landlord to finance and/or to re-lease and/or to sell the Property; provided
that Landlord shall cooperate with Tenant in investigating, evaluating and
determining reasonable alternatives to such proposed Additional Base Project
Change. If Landlord disapproves such proposed Additional Base Project Change
under this Section 2(c)(i), Landlord shall so notify Tenant in writing within
three (3) Business Days following Landlord’s receipt of the Additional Base
Project Change Notice, setting forth in reasonable detail the basis of
Landlord’s disapproval.

 

(ii)           Within five (5) Business Days following Landlord’s receipt of the
Additional Base Project Change Notice, Landlord shall notify Tenant in writing
whether, in  Landlord’s good faith evaluation, (1) Tenant’s request for such
Additional Base Project Change would result in any delay in the Schedule and, if
so, as accurate an estimate as possible of the amount of such delay in the
Schedule; and (2) Tenant’s request for such Additional Base Project

 

F-7

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Change would result in any delay in the Commencement Date of the Lease and, if
so, as accurate an estimate as possible of the amount of such delay; and,
thereupon, Tenant may, within an additional three (3) Business Days thereafter,
either retract or confirm the request for Landlord’s evaluation of such change
by Notice from Tenant’s Construction Representative (failing which Tenant shall
be deemed to have retracted the request).

 

(iii)          If Tenant confirms the request for such Additional Base Project
Change within the three (3) Business Day period set forth in
Section 2(c)(ii) above, then for a period of twenty (20) days thereafter (or
such longer period as may be mutually agreed upon by Landlord and Tenant if
reasonably required by the nature or scope of the requested change) (the
“Consultation Period”), Landlord’s Construction Representative, Tenant’s
Construction Representative, the Architect and any applicable engineer(s) shall
diligently and in good faith cooperate, coordinate, confer and meet to
(A) develop plans and specifications or revisions to the Base Project Plans and
design and engineer the requested change, and (B) determine and agree upon
(1) the actual net delay(s) (if any) in the Schedule reasonably attributable to
evaluating, designing, engineering, pricing and/or implementing such change, and
(2) the actual cost of implementing such change (if any).  On or before the last
day of the Consultation Period, Tenant shall either retract or confirm the
request for the Additional Base Project Change by Notice from Tenant’s
Construction Representative (failing which Tenant shall be deemed to have
retracted the request).

 

(iv)          If Tenant elects to proceed with such Additional Base Project
Change pursuant to Section 2(c)(iii) above, any actual net delay reasonably
attributable to implementing such change, as finally determined by Landlord and
Tenant pursuant to Section 2(c)(iii) above, shall constitute a Tenant
Delay(s) (as defined herein).

 

(v)           Tenant shall be responsible for the cost of the design and
engineering of the requested Additional Base Project Change pursuant to
Section 2(c)(iii) above, based on amounts which are normally and customarily
charged by such architectural and engineering firms to Landlord for comparable
architectural or engineering services and disclosed to Tenant in advance,
subject to Tenant’s right to utilize the proceeds of the Improvement Allowance
for the payment thereof.  The Architect and any applicable engineer(s) shall
promptly (and in any event in accordance with the Schedule) reflect and
incorporate all such changes in the Base Project Plans to assure that the
Additional Base Project Change is consistent with the design of the Base Project
Work and will be constructed by Landlord concurrent with and as part of the
construction of the Base Project Work.

 

(vi)          If Tenant elects to proceed with such change pursuant to
Section 2(c)(iii) above, Tenant shall bear the incremental cost, if any,
attributable to such Additional Base Project Work, subject to Tenant’s right to
utilize the proceeds of the Improvement Allowance for the payment thereof.  If
Tenant does not elect to proceed with such change, the reasonable third-party
costs incurred by Landlord in connection with the design and engineering of the
proposed change (or if Landlord shall use its own competent employees in lieu of
third parties and if the services are of a nature that would customarily have
been performed by a third party, then at the applicable rate set forth on
Schedule 2(d)(ii)(7)(A) hereto, without additional markup) shall nevertheless be
included as part of the Cost of the Work, provided Landlord gives Tenant Notice

 

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outlining the amount and the nature of such costs, subject to Tenant’s right to
utilize the proceeds of the Improvement Allowance for the payment thereof.

 

(d)           Construction of Base Project Work.

 

(i)            Contractor.  The Base Project Work shall be performed by Landlord
through Eagleview Commercial Construction Company, an affiliate of Landlord, or,
at Landlord’s election, by another reputable general contractor selected by
Landlord and approved by Tenant in its reasonable discretion (“Landlord’s
Contractor”).  Any such Landlord’s Contractor shall be expressly bound by and
shall have been deemed to have assumed all of the agreements, obligations,
liabilities and responsibilities of the “Landlord’s Contractor” hereunder, and
any contract or agreement with such new Landlord’s Contractor shall be upon and
subject to the same terms and conditions set forth in this Work Letter. No such
substitution or replacement of the Landlord’s Contractor shall relieve Landlord
from any of its agreements, obligations, liabilities or responsibilities
hereunder, each of which shall continue unmodified and in full force and effect
in accordance with the terms of this Work Letter.

 

(ii)           Base Project Budget; Base Project GMP.

 

(1)           At all times until the completion of the Base Project Work,
Landlord, in consultation with Tenant and subject to Tenant’s approval (which
shall not be unreasonably withheld), will prepare, update and revise a
reasonably detailed budget reflecting the costs for the design, development and
construction of the Base Project Work, including without limitation all items to
be included in the calculation of the Basic Rent in accordance with this Lease
(as amended from time to time, the “Base Project Budget”).  Attached hereto as
Attachment 3 is Landlord’s most-recent estimate of the cost of the Base Project
Work, based upon the Design Development Documents (the “Preliminary Budget”),
which shall constitute the initial Base Project Budget.  From time to time after
the execution of this Lease, but at least monthly, and also from time to time
upon Tenant’s request therefor, Landlord shall (acting in good faith, and
subject to Tenant’s approval, which shall not be unreasonably withheld) update
the Base Project Budget to reflect material changes in the design and
composition of the Base Project Work and changes in prevailing market prices for
labor and materials.  Landlord shall promptly transmit to Tenant’s
Representative a copy of each updated or revised Base Project Budget, and shall
set forth a summary of the reasons for any changes made therein.  Landlord and
Landlord’s Contractor also shall cooperate with Tenant by providing to Tenant,
in writing, good faith estimates of any contemplated or proposed changes to the
Base Project Work, and comparison estimates to enable Tenant to value engineer
the Base Project Work.

 

(2)           When the Base Project Construction Documents are seventy percent
(70%) complete, Landlord and Landlord’s Contractor shall submit to Tenant, in
writing, a guaranteed maximum price (all-inclusive, including Landlord’s
Contractor Fee) for the completion of the Base Project Work (the “Preliminary
Base Project GMP”).  The Preliminary Base Project GMP shall be binding upon
Landlord and Landlord’s Contractor.

 

(3)           Tenant shall have the right, in its sole discretion, to accept or
reject the Preliminary Base Project GMP provided by Landlord’s Contractor; and
if the Preliminary Base Project GMP is accepted by Tenant in writing, the
Preliminary Base Project GMP as

 

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accepted by Tenant shall constitute the “Base Project GMP” for purposes of this
Work Letter.  If the Preliminary Base Project GMP is not accepted by Tenant in
writing, then (i) Tenant shall have the right (with due regard to the Schedule
and in accordance with Section 2(c) of this Work Letter) to request changes to
the Project Construction Documents to reduce the cost of the Base Project Work;
and (ii) upon approval by Landlord and Tenant of the Base Project Construction
Documents or at such earlier time as Landlord and Tenant may agree in writing,
Landlord and Landlord’s Contractor shall submit to Tenant, in writing, a revised
guaranteed maximum price for the completion of the Base Project Work based on
the final Project Construction Documents (the “Revised Base Project GMP”).  The
Revised Base Project GMP, prepared in accordance with the requirements of this
Work Letter, shall be binding upon Landlord, Landlord’s Contractor and Tenant,
and shall constitute the “Base Project GMP” for purpose of this Work Letter. The
Revised Base Project GMP proposal shall be submitted by Landlord and Landlord’s
Contractor to Tenant promptly upon completion of the bidding process set forth
below but not later than fifteen (15) calendar days after receipt of the
required bids of third-party subcontractors and suppliers, and otherwise in
accordance with the Schedule.

 

a.             The Preliminary Base Project GMP and any Revised Base Project GMP
shall not exceed 115% of the Base Project Budget in effect immediately prior to
the submission of the Preliminary Base Project GMP or any such Revised Base
Project GMP to Tenant; provided, however, that such limitation shall not apply
to the extent of any increase in the costs of labor resulting from any
requirement for the payment of prevailing wages arising out of any grants or
funding obtained by Tenant from or with the assistance of any governmental
agency or authority.

 

b.             Landlord’s Contractor’s Fee shall be as set forth in
Section 2(d)(ii)(8), below.

 

c.             Landlord shall comply with the bidding process outlined in
Section 2(d)(ii)(5), below, and shall incorporate the results thereof in
determining the Preliminary Base Project GMP or Revised Base Project GMP, as
applicable.

 

d.             The Preliminary Base Project GMP and any Revised Base Project
GMP, as applicable, shall include a reasonably complete and detailed line-item
breakdown of the costs and categories of cost included therein, and shall also
include unit and/or hourly prices for materials or work (including without
limitation general conditions work and any work) to be supplied or performed by
Landlord, Landlord’s Contractor or any other affiliate of Landlord, shall be
submitted to Tenant for Tenant’s prior approval, and shall be competitive with
independent third-party pricing for comparable materials and work.

 

(4)           No Base Project Work shall commence until the Base Project GMP is
established pursuant to Section 2(d)(ii)(3) above.  After the Base Project GMP
has been established, amendments to Project Construction Documents shall be made
pursuant to Sections 2(b)(vi) and 2(c); provided, however, that updates and
modifications of and additions to then-existing Project Construction Documents
that are reasonably inferable from the then-existing Project Construction will
not entitle Landlord or Landlord’s Contractor to an increase in amounts payable
to it, or to an extension of time and will not constitute a Tenant Delay.

 

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(5)           The following shall apply with respect to any subcontractor or
supplier bidding process for the Base Project Work and/or the TI Work:

 

a.             Landlord shall obtain and submit to Tenant at least three
(3) qualified competitive written bids for each part of the work, trades and
materials included as part of the Base Project Work having, in each case, a
value in excess of $25,000 in the aggregate as to each part, from qualified and
reputable subcontractors and material suppliers selected by (but unaffiliated
with) Landlord and reasonably approved by Tenant (except that, in each case,
Tenant may, at its sole option, designate one qualified and reputable
subcontractor and material supplier to be included as one of the bidders).
Designation or approval by Tenant of a subcontractor or supplier shall not be
deemed to constitute a guaranty by Tenant of such subcontractor’s or supplier’s
performance or diminish Landlord’s Contractor’s and Landlord’s responsibility
for such subcontractor’s or supplier’s work or materials.

 

b.             Labor shall be provided on a “open shop basis”; provided,
however, that if Landlord (acting in good faith) informs Tenant that the
selection of any specific non-union subcontractor may impair Landlord’s
Contractor’s ability to comply with the Schedule due to Landlord’s Contractor’s
good faith conclusion that such selection may be detrimental to labor relations
at the site, and if Tenant nevertheless directs that Landlord engage such
non-union subcontractor, then any delay arising out of labor relations disputes
resulting from the engagement of such non-union subcontractor shall constitute
an Unavoidable Delay for purposes of this Work Letter.

 

c.             The bidding by subcontractors and suppliers shall be administered
by Landlord’s Contractor, except that Tenant shall be permitted to review before
issuance, and direct that reasonable changes be made to, the bid solicitation
packages, and Tenant may review all bids received.  Landlord’s Contractor shall
obtain and deliver such bids to Tenant within the period provided for in the
Schedule.

 

d.             Promptly upon receipt by Landlord of the competitive bids, but
before the award of subcontracts and purchase orders, Landlord shall schedule a
post bid review meeting that shall be attended by Landlord, Landlord’s
Contractor, Tenant, Landlord’s Representative, Tenant’s Representative and such
proposed subcontractors and material suppliers as Landlord and Tenant shall deem
appropriate.  Before such meeting, Landlord’s Contractor shall obtain from all
subcontractors and material suppliers as part of the competitive bid process,
and will share with Tenant as soon as it is received, a detailed, line item by
line item breakdown of all fees and costs included in the subcontractor’s or
material supplier’s bids, including all relevant worksheet information.  The
purpose of such meeting shall be to review in detail the scope of the work, the
schedule of performance, and the bids of all subcontractors and material
suppliers.  Landlord, Landlord’s Contractor and Tenant shall provide full
cooperation in such post bid review process.  All bidding information shall be
and remain confidential and shall not be disclosed to competing contractors or
their subcontractors or suppliers.  After consultation with Tenant, Landlord
shall direct Landlord’s Contractor as to which bids to accept; provided,
however, that Landlord shall not select a bid that is not the lowest responsive,
qualified bid for any work, trade or materials without first obtaining Tenant’s
written approval after Tenant’s receipt of Landlord’s brief statement of
Landlord’s reasons for rejecting the lowest responsive, qualified bid.  Tenant
also shall have the right to participate with Landlord’s Contractor in

 

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negotiating with every subcontractor and material supplier so long as Tenant
does so in a manner consistent with the Schedule.

 

(6)           At Tenant’s request, the Base Project Construction Contract and
the Base Project GMP shall provide for the bonding (by customary performance and
labor and material payment bonds, or the equivalent thereof reasonably
acceptable to Tenant) of Landlord’s Contractor and major subcontractors (as
designated by Tenant).  If Tenant requests the bonding of Landlord’s Contractor
and/or any subcontractors with respect to the Base Project Work, and
notwithstanding anything to the contrary contained herein, the cost of the
premiums for such bonds shall be added to and included as a Soft Cost and in the
calculation of the Base Project GMP (and, in the Preliminary Base Project GMP
and any revisions thereto, shall be set forth as a separate line item).

 

(7)           For purposes of this Work Letter (and including both Base Building
Work and TI Work), the term “Cost of the Work” shall mean costs necessarily and
actually incurred by Landlord’s Contractor in the proper and complete
performance of the Base Project Work or TI Work, as applicable (as applicable,
the “Work”), as limited below.  Such costs shall be at reasonable rates not
higher than the standard paid at the place of the Leased Property except with
prior consent of Tenant.  The Cost of the Work shall include only the following:

 

A.  LABOR COSTS

 

i.    Wages and benefits of construction workers directly employed by Landlord
or Landlord’s Contractor, or their respective Affiliates, to perform the
construction of the Work at the Leased Property, at the all-inclusive hourly
rates shown on Schedule 2(d)(ii)(7)(A) hereto.

 

ii.   Landlord’s and Landlord’s Contractor’s, or their respective Affiliates’,
supervisory and administrative personnel (as reasonably necessary for the
efficient prosecution of the Work) at or below the highest level named on
Schedule 2(d)(ii)(7)(A), but only for the portion of their time required for the
Work; provided, however, the Cost of the Work shall not include more than those
shown on Schedule 2(d)(ii)(7)(A), and at the rates shown on such Schedule;

 

iii.  Costs paid or incurred by the Landlord or Landlord’s Contractor for taxes,
insurance contribution, assessments and benefits required by law or collective
bargaining agreements, and, for personnel not covered by such agreements,
customary benefits such as sick leave, medical and health benefits, holidays,
vacations and pensions, with respect only to the workers and personnel mentioned
in clauses A.i. and ii., above.

 

B.  SUBCONTRACT COSTS

 

i.    Payments properly made or payable by Landlord’s Contractor to
subcontractors in accordance with the requirements of the subcontracts entered
into in accordance with this Work Letter.  To the extent that such subcontracts
are not

 

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subject to the bidding procedures provided for in this Work Letter, the terms
thereof, and sums payable thereunder, shall be reasonable and customary and at
competitive rates.

 

C.  COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION

 

i.    The reasonable costs, including transportation, of materials and equipment
incorporated or to be incorporated in the completed construction.

 

ii.   The reasonable costs of materials described in the preceding Clause C.i.
in excess of those actually installed but required to provide reasonable
allowance for waste and for spoilage.  Unused excess materials that are
reasonably marketable or utilized elsewhere by Landlord’s Contractor or any
subcontractor shall be credited to Owner as a deduction from the Cost of the
Work.

 

D.  COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED
ITEMS

 

i.    The reasonable costs, including transportation and maintenance, of all
materials, supplies, equipment, temporary facilities and hand tools (not owned
by the workmen) which are provided by Landlord’s Contractor at the site and
fully consumed in the performance of the Work, and cost less fair market value
on such items if not fully consumed, whether sold to others or retained by
Landlord’s Contractor.  Cost for items previously used by Landlord’s Contractor
shall mean fair market value.

 

ii.   Rental charges of all necessary temporary facilities, machinery and
equipment, exclusive of hand tools, used at the site of the Work, including
costs of transportation, installation, minor repairs and replacements,
dismantling and removal thereof.  Items shall not be rented from Landlord’s
Contractor or any of its affiliates unless approved in advance by Tenant.  Such
rental charges shall be consistent with those generally prevailing in the
location of the Project.

 

iii.  Costs of removal of debris from the site, to the extent not performed by
subcontractors.

 

iv.  Costs incurred in connection with the performance of the Work of long
distance telephone calls, postage and parcel delivery charges, telephone service
at the site and reasonable petty cash expenses of the site office.

 

v.   That portion of the reasonable travel and subsistence expenses of
Landlord’s Contractor’s personnel incurred while traveling more than 50 miles in
the discharge of duties in connection with the Work (not including subsistence
or other expenses in connection with relocation); provided, however, that the
amount included in the Cost of the Work in respect of automobile travel expenses
shall be based on the mileage allowance permitted for an ordinary and necessary
business expense deduction under Section 162 of the Internal Revenue Code of
1986, as amended.

 

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E.   MISCELLANEOUS COSTS

 

i.    That portion of insurance and bond premiums that can be directly
attributed to this Agreement as required by this Agreement in excess of that
normally carried by Landlord’s Contractor (“Insurance Premiums”).

 

ii.   Sales, use or similar taxes imposed by a governmental authority which are
incurred in performance of the Work and for which Landlord’s Contractor or any
subcontractor is liable (for purposes of this Work Letter only, the “Taxes”).

 

iii.  Fees and assessments for the building permit (if any) and for other
permits, licenses and inspections for which Landlord’s Contractor is required by
this Work Letter to pay and which are necessary for the performance of the Work
(“Permit Fees”).

 

iv.  Fees of testing laboratories for tests required by this Agreement, except
those related to defective or nonconforming Work.

 

F.   EMERGENCIES

 

i.    Costs described above in this Exhibit which are reasonably incurred by
Landlord’s Contractor in taking action to prevent threatened damage, injury or
loss in case of an emergency affecting the safety of persons and property, to
the extent such emergency is not caused or capable of prevention through proper
performance of the Work by Landlord, Landlord’s Contractor or any other
affiliate of Landlord, or any subcontractor.

 

G.  EXCLUSIONS

 

i.    The Cost of the Work shall not include:

 

ii.   Salaries and other compensation of Landlord’s or Landlord’s Contractor’s
personnel above the highest level named on Schedule 2(d)(ii)(7)(A) or in number
beyond those reasonably required for the efficient prosecution of the Work, or
for any portion of their time not directly pertaining to the Work.

 

iii.  Expenses of Landlord’s or Landlord’s Contractor’s principal office and
offices other than the site office.

 

iv.  Overhead and general expenses, except as may be expressly included above.

 

v.   Landlord’s Contractor’s capital expenses, including interest on Landlord’s
Contractor’s capital employed for the Work.

 

vi.  Rental costs of machinery and equipment, except as specifically provided in
Clause D.ii. above.

 

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vii. Costs due to the breach of this Lease or Landlord’s Contractor’s failure to
comply with this Agreement or due to the fault or negligence of Landlord’s
Contractor, or any other Responsible Party, including, but not limited, to costs
for the correction of damaged, defective or nonconforming Work, disposal and
replacement of materials and equipment incorrectly ordered or supplied, and
making good damage to property not forming part of the Work.

 

viii. Any cost not specifically and expressly described in Paragraphs A-F above.

 

ix. Costs which would cause the applicable GMP to be exceeded.

 

x.    Costs recoverable from insurance and bonding companies (or that would have
been recoverable had Landlord maintained insurance coverages in accordance with
the requirements of this Lease). Notwithstanding anything to the contrary
contained in this Work Letter, Landlord’s Contractor shall be responsible for
all property insurance deductibles, to the extent its negligence or willful
misconduct or that of Landlord or any other affiliate of Landlord, or their
respective employees, causes the applicable loss.

 

xi.   Any costs for in-house personnel of Landlord or Landlord’s Contractor, or
their respective Affiliates, unless such costs are in lieu of costs that
necessarily would have been paid to third-party providers for such service (and
are not in fact being provided by such third-party provider) or reduce the costs
that would have otherwise been paid to third-party providers of such service
(and in such event then only to the extent of such reduced cost).

 

H.  OTHER

 

i.    Cash discounts, trade discounts, rebates, refunds, and amounts received
from sales of surplus materials and equipment, shall be applied to reduce the
Cost of the Work.

 

ii.   In no event shall Cost of the Work include any environmental remediation
costs or costs to address concealed subsurface conditions (such as unanticipated
rock or unstable soil); but the Cost of the Work shall include the reasonable
costs of a Phase 1 Environmental Assessment of the Leased Property, and typical
pre-construction soil borings to determine the subsurface conditions.

 

iii.  Landlord acknowledges that there shall be no duplication of payments for
any of the items comprising the Cost of the Work, notwithstanding any
itemization or provision contained in this Agreement to the contrary, 
including, without limitation, this Exhibit.

 

(8)           For purposes of this Work Letter, “Landlord’s Contractor’s Fee”
means, (i) with respect to the Base Project Work, the sum that is equal to six
percent (6%) of Cost of the Work, including any Permit Fees and Taxes but
excluding Insurance Premiums,

 

F-15

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and (ii) with respect to the TI Work, six percent (6%) of Cost of the Work
(including any Permit Fees and Taxes but excluding Insurance Premiums) up to the
first $45.00 per rentable square foot of the Building, and four percent (4%) of
Cost of the Work (including any Permit Fees and Taxes but excluding Insurance
Premiums) in excess of the first $45.00 per rentable square foot of the
Building.

 

(iii)          Construction Contract for Base Building Work.  After the Base
Project GMP has been established and within the time period set forth in the
Schedule, Landlord shall enter into a Cost of the Work Plus Fee construction
contract (the “Base Project Construction Contract”) with Landlord’s Contractor
for the performance of the Base Project Work. The terms of the Construction
Contract shall be consistent with the terms of the Base Project GMP established
in accordance with this Work Letter, and the Base Project Construction Contract
(and all subcontracts) shall otherwise be subject to Tenant’s review and
approval prior to the execution thereof, which approval shall not be
unreasonably withheld, conditioned or delayed.  Landlord hereby agrees that it
shall expressly include in the Base Project Construction Contract and in each
other contract or agreement with Landlord’s Contractor, a requirement (and an
acknowledgement by Landlord’s Contractor) that Tenant is a direct intended third
party beneficiary thereof, that Tenant shall be entitled to rely upon the
provisions thereof and that, if Landlord breaches or defaults under the Lease or
this Work Letter beyond any applicable notice and/or cure period, Tenant shall
have the express right (but not the obligation) to directly enforce such
agreements and contracts as if it were a direct party thereto.  Landlord shall
deliver to Tenant a copy of the executed Base Project Construction Contract at
least ten (10) days prior to the commencement of the Base Project Work. 
Landlord shall not modify or amend the Base Project Construction Contract in any
material respect without Tenant’s prior written consent, not to be unreasonably
withheld, conditioned or delayed.  Notwithstanding Tenant’s participation in the
establishment of the Base Project GMP, the selection of any subcontractors
and/or suppliers, and Tenant’s rights contained herein for the review and
approval of the Base Project Construction Contract, Landlord shall be solely
responsible for the Base Project Work, for the oversight and supervision of
Landlord’s Contractor’s construction of the Base Project Work, for the
enforcement of the Base Project Construction Contract, and for the payment and
performance of all of the obligations of the “owner” under the Base Project
Construction Contract; and Tenant shall not have any responsibility therefor.

 

3.             Tenant Improvements; TI Work.

 

(a)           Provision of Plans.  In addition to the submissions contemplated
in Section 2(b) hereof, from time to time upon request by Tenant or Tenant’s
Construction Representative, Landlord shall furnish to Tenant or Tenant’s
Construction Representative the most current and complete architectural, design,
mechanical, electrical and structural drawings and specifications for the Base
Project Work and specifications for all other parts, equipment, components,
elements and facilities of the Base Project Work pertinent to the design,
pricing, bidding or construction of the Tenant Improvements, in print form and
in digital Auto-Cad drawing file format, either free of copyright or with such
licenses or other consents as are reasonably necessary to enable Tenant and
Tenant’s design professionals and contractors to utilize the same in connection
with the design, construction, maintenance, alteration, operation,
reconstruction and occupancy of the Tenant Improvements). Such drawings and
specifications shall include, without limitation, schedules, and information
pertaining to elevators, mechanical shafts, fire

 

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stairs, restrooms, and columns, and Landlord shall, upon reasonable request by
Tenant, share all information with Tenant and Tenant’s Construction
Representative with respect to drawings, mechanical systems, structure, core and
shell and field measurements.  All such plans, documents, drawings and
specifications shall be accompanied by written authorization from the Architect,
engineer and/or other professional permitting the use thereof in the planning
and preparation of the Tenant Improvements and the TI Work Plans.  Tenant,
Tenant’s Construction Representative and Tenant’s design professionals shall be
entitled to rely on the material accuracy and completeness of all plans,
documents, drawings and specifications furnished by Landlord and Landlord’s
design professionals; and Landlord and Landlord’s Contractor and their
respective design professionals shall be entitled to rely on the material
accuracy and completeness of all plans, documents, drawings and specifications
furnished by Tenant and Tenant’s design professionals.

 

(b)           TI Work Plans.

 

(i)            Tenant Preparation and Submission.  On or before the date set
forth in the Schedule, Tenant shall cause the Architect to prepare and forward
to Landlord plans and specifications for Tenant’s improvements to be constructed
in the Leased Property showing the following details: partition layout
(dimensioned); door location and door schedule; reflected ceiling plans;
electric outlets with locations dimensioned; occupancy requirements by room or
space; all necessary drawings, sections, details and specifications for special
equipment and fixtures; carpentry and millwork; color schedule of all finish
items; floor coverings; wall coverings; other special finishes; requirements for
special air-conditioning, plumbing and electrical needs; and specifications of
all specialty systems or equipment to be installed in the Building
(collectively, the “TI Work Plans”).  The TI Work Plans shall also include
mechanical plans, electrical plans, fire protection plans, plumbing plans and
structural plans, and the location and specifications for Tenant’s emergency
generator, unless Tenant elects to have such work performed as a part of the
Separate Tenant Work (as hereinafter defined).  Notwithstanding anything to the
contrary contained in this Work Letter, Tenant shall have the right to have the
TI Work Plans prepared and approved in phases or installments provided that each
such submission to Landlord shall contain such detail and other information
reasonably necessary to explain the correlation of such phase or installment of
the TI Work Plans to the status of other previously submitted phases or
installments of the TI Work Plans.  All references in this Section 3(b)(i) to
the TI Work Plans shall apply to each phase or installment of the TI Work Plans,
as applicable.

 

(ii)           Landlord Review.  Landlord shall have the right to review and
give its approval or disapproval of the TI Work Plans (or the respective phase
or installment thereof), giving specific and reasonably detailed reasons in case
of disapproval, to Tenant within the time period(s) set forth in the Schedule. 
Subject to Section 2(c) of this Work Letter, Landlord shall not withhold or
condition its approval of the TI Work Plans, unless, in Landlord’s reasonable
opinion, the Tenant Improvements as shown in the TI Work Plans are likely to
materially and adversely affect, impair or overburden any Building System or the
structure of the Building.  If Landlord disapproves any part of the TI Work
Plans in accordance with this Section 3(b)(ii) (but subject to
Section 2(c) above), Tenant shall thereafter submit to Landlord, for its
approval, revised TI Work Plans, which shall be subject to the same approval
process as the original TI Work Plans and shall be accomplished within the time
periods set forth in the Schedule.  Landlord and Tenant, respectively, shall
prepare, submit and review, as the case may be, each

 

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successive revision and resubmittal of revisions of the TI Work Plans within the
time periods set forth in the Schedule until such TI Work Plans have been
consented to in accordance with the terms of this Work Letter. Landlord shall,
for all purposes hereof and for purposes of all subsequent installments or
phases of TI Work Plans to be delivered to Landlord hereunder, be deemed to have
approved all portions of the TI Work Plans not expressly disapproved by Landlord
in accordance with the foregoing procedure. If Landlord fails to respond during
the required approval period set forth in the Schedule, it shall be deemed to
have approved the applicable phase(s) or installment(s) of the TI Work Plans.
Landlord’s review of Tenant’s design documents shall not, in any manner, be
deemed a review for compliance with any Legal Requirements (including, without
limitation, the ADA and regulations thereunder), for completeness, for
constructability, for availability of materials specified, or for suitability
for the purposes intended, all of which shall remain the responsibility of
Tenant.  Landlord shall be entitled to rely on the material accuracy and
completeness of the TI Work Plans.

 

(iii)          Approval of Final TI Work Plans.  Following approval by Landlord
and Tenant of the TI Work Plans in accordance with the provisions hereof, the TI
Work Plans (or a schedule of such TI Work Plans) shall thereupon constitute
Attachment 4 to this Work Letter.  All of the work (including labor, materials
and supervision) necessary for the construction and completion of the Tenant
Improvements as shown and described in the approved TI Work Plans is referred to
herein as the “TI Work”).

 

(iv)          Changes to TI Work Plans by Tenant.  Once the TI Work Plans are
finalized, Tenant shall have the right to make changes to the TI Work Plans,
subject to this Section 3(b)(iv).  Landlord shall have the right to review any
such change(s) within the same amount of time as established in the Schedule for
the initial review of the TI Work Plans.  Subject to Section 2(c) of this Work
Letter, Landlord shall not withhold or condition its approval of such
change(s) unless, in Landlord’s reasonable opinion, any such change: (A) is
materially inconsistent with the quality of the Tenant Improvements as reflected
by the TI Work Plans prior to such change; or (B) would, in Landlord’s
reasonable judgment, materially and adversely affect, impair or overburden any
Building System or the structure of the Building, and Landlord’s approval or
disapproval shall be expressed in writing (and in the case of any disapproval,
such writing shall set forth in reasonable detail the basis of Landlord’s
objection).

 

(v)           Laboratory Work.  Landlord acknowledges that the TI Work includes,
as a part thereof, the construction and fitting out of an approximately 38,000
usable square foot laboratory facility and product development center (the
“Laboratory Space”).  Tenant requires that Landlord substantially complete
certain portions of the TI Work within the Laboratory Space simultaneously with
the Substantial Completion of Base Project Work/Laboratory Work, and in advance
of the Substantial Completion of the remainder of the TI Work (which accelerated
portion shall be identified in the TI Work Plans, and is herein called the
“Laboratory Work”), to enable Tenant to install its laboratory equipment and
obtain necessary inspections and approvals from the Food and Drug Administration
and other governmental authorities.  As a result, Landlord and Tenant have
provided in the Schedule for prosecution of the Laboratory Work in coordination
with the Base Project Work, and for the Substantial Completion (as hereinafter
defined) of the Laboratory Work simultaneously with the Substantial Completion
of Base Project Work/Laboratory Work.

 

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(vi)          Notwithstanding any provision in this Section 3(b) to the
contrary, Tenant may cause the Architect to make available a secure website, and
assign a password to Landlord to permit Landlord access thereto, which website
will provide access to the TI Work Plans and other plans referred to in this
Section 3, as the same are developed by Architect and the design professionals
engaged by Architect.  All such documents shall be deemed delivered to a Party
once a Party or its designated representative is notified by email that a
particular document is available on such website, and any time period applicable
to review and approval of such document shall be measured from the business day
on which such email is delivered.

 

(c)           TI GMP.

 

(i)            Contractor.  Except as may otherwise be set forth in any express
provision of this Work Letter, all of the TI Work shall be performed by Landlord
through Landlord’s Contractor, unless otherwise agreed by Landlord and Tenant in
writing.

 

(ii)           TI GMP.

 

(1)           From time to time upon Tenant’s request therefor, Landlord and
Landlord’s Contractor shall provide to Tenant, in writing, a good faith estimate
of the amount that would represent the Cost of the Work and Landlord’s
Contractor’s Fee for the completion of the TI Work in accordance with the stage
of the plans and specifications therefor at the time of Tenant’s request.

 

(2)           Upon Tenant’s written request at any time after the TI Work Plans
are seventy percent (70%) complete, but prior to the final approval of the TI
Work Plans by Landlord and Tenant, Landlord and Landlord’s Contractor shall
submit to Tenant, in writing, a guaranteed maximum price (all-inclusive,
including Landlord’s Contractor Fee) for the completion of the TI Work (the
“Preliminary TI GMP”).  The Preliminary TI GMP shall be binding upon Landlord
and Landlord’s Contractor.

 

(3)           Tenant shall have the right, in its sole discretion, to accept or
reject the Preliminary TI GMP provided by Landlord’s Contractor; and if the
Preliminary TI GMP (as it may be revised as provided below) is accepted by
Tenant in writing, such accepted Preliminary TI GMP shall constitute the “TI
GMP” for purposes of this Work Letter.  If the Preliminary TI GMP is not
accepted by Tenant in writing, then (i) Tenant shall have the right (with due
regard to the Schedule and in accordance with Section 2(c) of this Work Letter)
to make changes to the TI Work Plans to reduce the cost of the TI Work; and
(ii) upon final approval by Landlord and Tenant of the TI Work Plans, Landlord
and Landlord’s Contractor shall submit to Tenant, in writing, a revised
guaranteed maximum price for the completion of the TI Work based on the final TI
Work Plans (the “Revised TI GMP”).  The Revised TI GMP, prepared in accordance
with the requirements of this Work Letter, shall be binding upon Landlord,
Landlord’s Contractor and Tenant, and shall constitute the “TI GMP” for purpose
of this Work Letter.  The Revised TI GMP proposal shall be submitted by Landlord
and Landlord’s Contractor to Tenant promptly upon completion of the bidding
process set forth in Section 2(d)(ii)(5) above, but not later than fifteen (15)
calendar days after receipt of the required bids of third-party subcontractors
and suppliers, and otherwise in accordance with the Schedule.

 

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a.             The Preliminary TI GMP and any Revised TI GMP shall not exceed
115% of the budget established by Landlord and Tenant for the TI Work in effect
immediately prior to the submission of the Preliminary TI GMP or such Revised TI
GMP to Tenant; provided, however, that such limitation shall not apply to the
extent of any increase in the costs of labor resulting from any requirement for
the payment of prevailing wages arising out of any grants or funding obtained by
Tenant from or with the assistance of any governmental agency or authority.

 

b.             Landlord’s Contractor’s fee shall be as set forth in
Section 2(d)(ii)(8) above.

 

c.             Landlord shall comply with the bidding process outlined in
Section 2(d)(ii)(5) above, and shall incorporate the results thereof in
determining the Preliminary TI GMP or Revised TI GMP, as applicable.

 

d.             The TI GMP and any Revised TI GMP, as applicable, shall include a
reasonably complete and detailed line-item breakdown of the costs and categories
of cost included therein, and shall also include unit and/or hourly prices for
materials or work (including without limitation general conditions work and any
work) to be supplied or performed by Landlord, Landlord’s Contractor or any
other affiliate of Landlord, shall be submitted to Tenant for Tenant’s prior
approval, and shall be competitive with independent third-party pricing for
comparable materials and work.

 

(4)           No TI Work shall commence until the TI GMP is established pursuant
to Section 3(c)(ii) above.  After the TI GMP has been established, amendments to
TI Work Plans shall be made pursuant to Section 3(i); provided, however, that
updates and modifications of and additions to then-existing TI Work Plans that
are reasonably inferable from the then-existing TI Work Plans will not entitle
Landlord or Landlord’s Contractor to an increase in amounts payable to it, or to
an extension of time and will not constitute a Tenant Delay.

 

(5)           At Tenant’s request, the TI Construction Contract and the TI GMP
shall provide for the bonding (by customary performance and labor and material
payment bonds, or the equivalent thereof reasonably acceptable to Tenant) of
Landlord’s Contractor and major subcontractors (as designated by Tenant). If
Tenant requests the bonding of Landlord’s Contractor and/or any subcontractors
with respect to the TI Work, and notwithstanding anything to the contrary
contained herein, the cost of the premiums for such bonds shall be added to and
included in the calculation of the TI GMP (and, in the Preliminary TI GMP and
any revisions thereto, shall be set forth as a separate line item).

 

(d)           Construction Contract for TI Work.  After the selection of the GMP
and within the time period set forth in the Schedule, Landlord shall enter into
a Cost of the Work Plus Fee construction contract (the “TI Construction
Contract”) with Landlord’s Contractor, for the performance of the TI Work.  The
terms of the TI Construction Contract shall be consistent with the terms of such
general contractor’s TI GMP accepted by Tenant and shall otherwise be subject to
Tenant’s review and approval prior to the execution thereof, which approval
shall not be unreasonably withheld, conditioned or delayed. Landlord hereby
agrees that it shall expressly include in the TI Construction Contract and each
other contract or agreement with Landlord’s

 

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Contractor a requirement (and an acknowledgement by Landlord’s Contractor) that
Tenant is a direct intended third party beneficiary thereof, that Tenant shall
be entitled to rely upon the provisions thereof and that, if Landlord breaches
or defaults under the Lease or this Work Letter beyond any applicable notice
and/or cure period, Tenant shall have the express right (but not the obligation)
to directly enforce such agreements and contracts as if it were a direct party
thereto.  Landlord shall deliver to Tenant a copy of the executed TI
Construction Contract at least ten (10) days prior to the commencement of the TI
Work. Landlord shall not modify or amend the TI Construction Contract in any
material respect without Tenant’s prior written consent, not to be unreasonably
withheld, conditioned or delayed. Notwithstanding Tenant’s participation in the
establishment of the TI GMP, the selection of any subcontractors and/or
suppliers, and Tenant’s rights contained herein for the review and approval of
the TI Construction Contract, Landlord shall be solely responsible for the
performance of the TI Work, for the oversight and supervision of Landlord’s
Contractor’s performance of the TI Work, for the enforcement of the TI
Construction Contract, and for the payment and performance of all of the
obligations of the “owner” under the TI Construction Contract; and Tenant shall
not have any responsibility therefor.

 

(e)           Construction of Tenant Improvements. Landlord shall cause the TI
Work to be commenced, constructed and completed by Landlord’s Contractor in a
good and workmanlike manner in conformity with the TI GMP, the TI Work Plans,
this Work Letter, the Schedule and all applicable Legal Requirements, and
requirements of public authorities and insurance underwriters.  Landlord shall
secure (or cause to be secured) all permits, approvals, licenses, and
inspections necessary for the proper execution and completion of the TI Work,
and shall pay all fees and costs to secure the same (which cost Landlord shall
cause to be included in the TI GMP). Landlord shall comply with and give all
notices required by all applicable Legal Requirements, and requirements of
public authorities and insurance underwriters.  Landlord and Landlord’s
Contractor shall be responsible for initiating, maintaining, and supervising all
safety precautions and programs in connection with performance of the TI Work
and shall be fully responsible for all construction means, methods, techniques,
sequences and procedures and for coordinating the construction of the Tenant
Improvements and the performance of all TI Work, it being understood and agreed
that neither Tenant nor Tenant’s Construction Representative will be responsible
for nor have control or charge of construction means, methods, techniques,
sequences or procedures, or for safety precautions and programs in connection
with all or any part of the TI Work. Landlord shall procure insurance of the
types and coverage amounts appropriate given the nature and extent of the TI
Work, as reasonably determined by Landlord, but in no event less than the
insurance requirements imposed by the Lease.  Landlord shall be responsible for
the removal of all debris within and adjacent to the Leased Property created by
the TI Work. Landlord shall obtain all customary warranties available from
contractors and manufacturers in connection with the TI Work.

 

(f)            Improvements Allowance; Cost of TI Work.

 

(i)            Subject to Section 3(f)(ii), below, Landlord shall credit Tenant
with (or pay to Tenant) the Improvement Allowance (as defined in the Lease) to
pay for the following (the “Permitted Allowance Categories”): (A) the hard and
soft costs to design, construct, permit and inspect (including without
limitation all labor, materials, supervision, governmental approvals, permits
and inspections, architects’ and engineers’ fees and expenses, insurance and

 

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taxes) the Tenant Improvements and other TI Work, together with Landlord’s
Contractor’s Fee; (B) the costs of procuring and installing
telecommunication/data/computer cabling, wiring, services, systems and
facilities; (C) Tenant’s moving and other relocation costs; (D) Tenant’s other
costs and expenses for the review of Landlord’s plans and specifications for the
Base Project Work and the inspection thereof; (E) Tenant’ costs for the design,
construction, installation and inspection of the Tenant Improvements and other
TI Work; and (F) Tenant’s cost for the selection, acquisition and installation
of Tenant’s furnishings, cabling, fixtures and equipment to be located and/or
installed at the Building or other portions of the Leased Property. Excepting
any portion of the Improvement Allowance to be paid directly to Landlord’s
Contractor or other third parties by Landlord in connection with the performance
of the TI Work, as provided elsewhere in this Work Letter or in the Lease,
advances on account of the Improvement Allowance shall be paid by Landlord to
Tenant within thirty (30) days of Tenant’s delivery of paid invoices for items
described above, and (in the case of the costs of tangible items) which have
been installed in the Real Property or are stored at the Real Property.  The
Improvement Allowance to be paid in connection with the performance of the TI
Work shall be payable in accordance with Section 3(g) below. Included in the
Improvement Allowance is a $0.10 per RSF allowance for the cost to test-fit
Tenant’s program, which shall be advanced by Landlord to Tenant or to the
Architect, for the payment of such costs, upon written request from time to
time.  Such test-fit allowance shall be charged against the Improvement
Allowance.  Any unused portion of the Improvement Allowance shall be credited to
the Basic Rent first accruing under this Lease, provided that such unused
portion of the Improvement Allowance is included in the Project Cost for the
purpose of calculating Basic Rent, notwithstanding the fact that such unused
Improvement Allowance is not expended by Landlord in performing the TI Work.  To
the extent the “Tenant Work Cost” (defined below) exceeds the Improvement
Allowance available to pay the same (or exceeds any portion of the Improvement
Allowance that Tenant elects to utilize in the exercise of Tenant’s option under
Section 3(f)(ii), below), Tenant shall pay the excess to Landlord in accordance
with the procedures set forth in Section 3(g) below.

 

(ii)           Notwithstanding anything in this Work Letter or in the Lease to
the contrary, Tenant may elect at any time upon prior Notice to Landlord not to
use all or any portion of the Improvement Allowance to pay for the Permitted
Allowance Categories.  If Tenant so elects, then the amount of the Improvement
Allowance not used by Tenant shall be deleted from the calculation of Basic Rent
set forth on Exhibit H to the Lease.

 

(iii)          Landlord and Tenant agree that one-half of the Roof Upgrade Cost
(as defined below) shall be included as part of the cost of the Base Project
Work and the other half of the cost of the Roof Upgrade Cost shall be included
as part of the TI Work.  “Roof Upgrade Cost” shall mean the cost difference
between constructing the roof and roof structure as shown on the Ballinger Base
Building Specifications dated 4/2/2010 and constructing the roof and roof
structure as shown in the Design Development Documents.  The Parties estimate
that one-half of the Roof Upgrade Cost is $690,000.

 

(g)           Inspection; Applications for Payment; Improvement Allowance.

 

(i)            During the performance of the TI Work, Tenant’s Construction
Representative shall visit the Leased Property at intervals appropriate to the
stage of the performance of the TI Work so as to become generally familiar with
the progress and quality of

 

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the Tenant Improvements, and shall inspect and verify the progress of the TI
Work, as provided below.  Each month, before the submission of an application
for payment (which shall in all cases reflect retainage required under the TI
Construction Contract) by Landlord’s Contractor (each, an “Application for
Payment”), Landlord’s Construction Representative, Tenant’s Construction
Representative and Landlord’s Contractor shall meet to discuss such Application
for Payment. Applications for Payment (together with all documentation and
evidence supporting such Application for Payment) shall be submitted by
Landlord’s Contractor to Landlord monthly, following the end of each month, and
Landlord shall immediately forward the same to Tenant’s Construction
Representative (unless a duplicate has already been sent to Tenant’s
Construction Representative by Landlord’s Contractor). In addition, Landlord
shall also forward to Tenant’s Construction Representative (unless a duplicate
has already been sent to Tenant’s Construction Representative by Landlord’s
Contractor) a monthly report of the status of the project budget for the TI Work
(including but not limited to an updated project budget progress comparison), an
updated Project Schedule, Pending for Information log, shop drawing log, Pending
Change Order log, Change Order log, and current testing reports. Applications
for Payment shall include reasonable documentation evidencing the scope and cost
of any TI Work actually performed during the previous month, together with
copies of any applicable partial or final releases of mechanic’s liens from
Landlord’s Contractor and its subcontractors.

 

(ii)           Within five (5) Business Days after his or her receipt of any
Application for Payment, Tenant’s Construction Representative shall visit the
Leased Property to determine whether, to his or her knowledge based upon his or
her inspection of the TI Work performed, the quantity and quality of the TI Work
performed by Landlord’s Contractor is consistent with the TI Work Plans and with
the amount invoiced by Landlord’s Contractor.  Within five (5) Business Days
after such visit, Tenant shall, acting reasonably, either (A) approve, sign and
return the Application for Payment in the amount applied for by Landlord’s
Contractor, or (B) withhold approval of the amount applied for, notifying
Landlord, in writing, of the reasons for withholding approval, or (iii) approve
in part (and with respect to such approved part sign and return the Application
for Payment in the amount applied for by Landlord’s Contractor with respect to
such approved part), and withhold approval in part of the amount applied for,
notifying Landlord, in writing, of the part(s) disapproved and the reasons for
withholding approval.  The amount of each payment so approved shall be
calculated as provided in the TI Construction Contract.  If Tenant does not give
or withhold its approval of any Application for Payment within such five
(5) Business Day period, Landlord shall have a right to provide a second request
for approval and provided such second request shall state in upper case, bold
type that it is a “DEEMED APPROVAL NOTICE” if Tenant shall fail to respond to
such second written request within three (3) Business Days after Tenant’s
receipt thereof, then such Application for Payment shall be deemed approved by
Tenant.

 

(iii)          The cost of the TI Work (as determined and approved in accordance
with this Work Letter) (the “Tenant Work Cost”) shall be paid as follows: 
Except as Tenant may elect to forego all or any part of the Improvement
Allowance pursuant to Section 3(f)(ii), above, all payments made with respect to
any approved Application for Payment shall be charged against the Improvement
Allowance which has not been used for Permitted Allowance Categories in clauses
(B) through (F) of Section 3(f)(i) above, until exhausted.  Nothing in this
Section 3(g)(iii) shall be deemed to restrict use of the Improvement Allowance
to the Tenant Work Cost.  The disbursement of the Improvement Allowance for any
charges properly included

 

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as a part of the Tenant Work Cost but not covered by an approved Application for
Payment (e.g., for the direct purchase of goods comprising a part of the TI Work
by Landlord or Tenant not required to be supplied by Landlord’s Contractor or
its subcontractors under the TI GMP) shall be made, with the prior approval of
Tenant, on the basis of third-party invoices, receipts or other reasonable
supporting documentation evidencing the applicable costs incurred, or to be
incurred, by or for Tenant and permitted to be paid or reimbursed from the
Improvement Allowance.

 

(iv)          When the Improvement Allowance is exhausted, or to the extent
Tenant has elected to forego the Improvement Allowance pursuant to
Section 3(f)(ii), above, Tenant shall make to Landlord the payments of Tenant
Work Cost only to the extent of, and on account of, Excess Tenant Improvements
Costs (as defined below) for which Tenant is responsible under this Work Letter,
within twenty (20) calendar days after receipt of an approved Application for
Payment and all supporting documentation required under the TI Construction
Contract and this Work Letter.  Landlord shall bear all costs of the TI Work in
excess of the TI GMP, except for Excess Tenant Improvement Costs.

 

(v)           The initial schedule of values used as a basis for payment and any
changes thereto shall be in accordance with the applicable terms and limitations
provided in this Work Letter and the schedules attached hereto, and subject to
Tenant’s approval, not to be unreasonably withheld, conditioned or delayed.  If
Tenant is unable to approve any Application for Payment in the full amount
applied for, Tenant shall promptly approve the Application for Payment to the
extent and in the amount that it is able, and work under this Work Letter and
the TI Construction Contract shall continue pending the resolution of any
dispute or controversy involving any disapproved portion of the Application for
Payment in accordance with the terms hereof.  Landlord shall process each
approved Application for Payment (or portion thereof) promptly and in all events
in accordance with the TI Construction Contract.

 

(vi)          The TI Construction Contract and contracts with all subcontractors
and material suppliers shall contain the retainage requirements reasonably
acceptable to Tenant, consistent with the nature of the contract involved, and
shall provide that the applicable contracting party will not be paid in full
until all work required to be done, including but not limited to punchlist
items, has been completed.

 

(vii)         No payment shall be made to Landlord’s Contractor or charged to
Tenant or the Improvement Allowance absent approval by Tenant; provided,
however, that to the extent Tenant wrongfully refuses to approve any portion of
an Application for Payment, interest shall accrue thereon at the Overdue Rate
(as defined in the Lease) on the balance that is at the time due and owing from
the date that is twenty (20) calendar days after Tenant’s receipt of such
Application for Payment and all required supporting documentation, until paid by
Tenant or until Tenant authorizes payment from the Improvement Allowance, to the
extent applicable.  To the extent that Landlord is obligated to fund any portion
of the Improvement Allowance to or for the benefit of Tenant but fails to do so
on or before the date that is twenty (20) calendar days after Landlord’s receipt
of Tenant’s written request therefor and all required supporting documentation,
interest shall accrue thereon at the Overdue Rate on the unpaid balance.

 

(viii)        Approval of any Application for Payment (or any portion thereof)
shall not represent acceptance of any non-conforming TI Work, or impair or
otherwise affect Tenant’s

 

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right to specific performance of Landlord’s obligations, unless Tenant
specifically agrees in writing to accept such non-conforming TI Work in the case
of the former, or agrees in writing to waive such right of specific performance
in the case of the latter.

 

(ix)           Landlord shall fully comply with all applicable Legal
Requirements with respect to payments to Landlord’s Contractor and other
contractors, subcontractors and suppliers to whom payments may be owed by
Landlord, including without limitation the applicable provisions of Pennsylvania
Contractor and Subcontractor Payment Act, 73 P.S. §501, et seq., and 62 Pa.C.S.
§3933 (if and to the extent applicable), but nothing contained herein shall
modify Tenant’s payment obligations contained herein.

 

(x)            Landlord, Landlord’s Contractor and all subcontractors shall
maintain their respective books and records concerning the costs of the TI Work
for a period of not less than three (3) years beyond the termination of the TI
Construction Contract.  Tenant shall be permitted to audit the books and records
of Landlord and of Landlord’s Contractor and subcontractors for verification of
the costs of the TI Work.

 

(h)           Excess Tenant Improvements Costs.  For purposes hereof, “Excess
Tenant Improvement Costs” means the Tenant Work Cost to the extent of (i) any
excess of the TI GMP over the Improvement Allowance not used for any Permitted
Allowance Categories in clauses (B) through (F) of Section 3(f)(i), above, at
the time Tenant accepts the TI GMP pursuant to Section 3(c)(ii) of this Work
Letter, plus (ii) any Change Order(s) initiated by Tenant in accordance with the
terms of this Work Letter to the extent that such Change Order(s) cause the
Tenant Work Cost to exceed the TI GMP, plus (iii) any other cost to be borne by
Tenant under the express provisions of this Work Letter and which is not paid
out of the Improvement Allowance.  Landlord shall be solely responsible for all
costs incurred to complete the TI Work in excess of the TI GMP that are not
Excess Tenant Improvement Costs.  Tenant shall be solely responsible for all
Excess Tenant Improvement Costs.

 

(i)            Changes to Tenant Improvements and/or TI Work Plans by Landlord. 
If any materials or components for the Tenant Improvements specified in the TI
Work Plans shall not be available upon commercially reasonable terms, Landlord
reserves the right to make substitutions of materials and/or components of
substantially equivalent quality and utility, consistent with the quality
required under the final, approved TI Work Plans and without materially
affecting the utility, efficiency or visual impact of the Tenant Improvements;
provided, that Landlord gives Tenant prior Notice thereof, Landlord shall
consult with Tenant and its design professionals to identify and select
substitute materials and/or components, and Tenant approves such substitutions,
which approval shall not be unreasonably withheld, conditioned or delayed.
Landlord also reserves the right to make minor changes to the Tenant
Improvements reasonably necessitated by conditions met in the course of
construction of which Landlord, acting diligently, was not aware; provided, that
Tenant’s written approval of any change shall first be obtained (which approval
shall not be unreasonably withheld, conditioned or delayed, so long as such
changes do not delay any Target Date, increase the cost of the TI Work, and are
in substantial conformity with final, approved TI Work Plans and do not reduce
the utility, efficiency or visual impact of the Tenant Improvements).  Landlord
shall not make substitutions of materials and/or components or changes in the TI
Work for the primary purpose of satisfying the Schedule unless approved by
Tenant in writing.  Landlord shall credit to Tenant

 

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any savings resulting from such substitutions, and the TI GMP shall be increased
by any excess cost of such substitute materials and/or components over the costs
of the materials and/or components originally specified, provided that Tenant
shall have approved such substitution and cost in writing.  If the
unavailability of materials or components or changes to the Tenant Improvements
is caused by any act, omission or delay of Landlord or any of Landlord’s
contractors, Landlord shall promptly pay the reasonable fees of Tenant’s design
professionals incurred in connection with evaluating proposed substitutions or
other changes pursuant to this Section 3(i), and Landlord and not Tenant shall
pay any excess cost of such substitute materials and/or components over the
costs of the materials and/or components originally specified.  If Tenant does
not give or withhold its approval under this Section 3(i) within five
(5) business days after Tenant’s receipt of Landlord’s written request, Landlord
shall have a right to provide a second request and provided such second request
shall state in upper case, bold type that it is a “DEEMED APPROVAL NOTICE” if
Tenant shall fail to respond to such second written request within three
(3) Business Days after Tenant’s receipt thereof, then such request shall be
deemed approved by Tenant.

 

(j)            Change Orders.  After Tenant shall have accepted the TI GMP,
changes to the Tenant Improvements and/or the TI Work Plans by Tenant or
Landlord, as the case may be, shall be accomplished by Change Order.  As used in
this Work Letter, a “Change Order” shall mean a written instrument prepared by
Landlord and signed by Landlord and Tenant stating their agreement upon all of
the following: (A) the change in the Tenant Improvements and/or the TI Work
Plans; (B) the extent of the adjustment, if any, in the TI GMP (including
without limitation any arising under clause (4) in Section 4(d)(ii) below); and
(C) the extent of the adjustment in the Schedule (including the Target Dates),
if any.  Landlord shall act reasonably and diligently, and as expeditiously as
possible, in preparing a Change Order, and Tenant shall act reasonably and
diligently, and as expeditiously as possible, in approving a Change Order
prepared by Landlord and submitted to Tenant.

 

4.             Construction Milestones; Substantial Completion.

 

(a)           Construction Milestones. Landlord acknowledges that Substantial
Completion of Base Project Work/Laboratory Work (as defined herein) and
Substantial Completion of TI Work (as hereinafter defined) within the applicable
time periods provided in the Schedule is of the essence of this Lease, and is
vital to Tenant’s willingness to enter into this Lease.  In order to assure
Tenant of Landlord’s diligence in prosecuting the actions necessary to achieve
Substantial Completion of Base Project Work/Laboratory Work and Substantial
Completion of TI Work in accordance with the Schedule, Landlord and Tenant have
identified certain critical milestones to be achieved or satisfied by Landlord
and Landlord’s Contractor by certain specified dates, as set forth on Attachment
5 to this Work Letter (each a “Construction Milestone”, and collectively the
“Construction Milestones”).  Landlord and Landlord’s Contractor each shall use
commercially reasonable efforts to achieve or satisfy each of the Construction
Milestones by the applicable date set forth on Attachment 5.

 

(b)           Substantial Completion of Work. Landlord and Landlord’s Contractor
each shall use commercially reasonable efforts to achieve (or cause achievement
of) Substantial Completion (as defined herein) of the Base Project Work
(including the Laboratory Work) and Substantial Completion of TI Work,
respectively, on or before the applicable Target Dates

 

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designated from time to time in the Schedule in accordance with
Section 1(b)(i) hereof.  “Target Dates” means the dates established in good
faith by the Parties, in accordance with Section 1(b)(i) hereof (and as revised
from time to time as provided in that Section), as Landlord’s estimated dates
for the Substantial Completion of Base Project Work/Laboratory Work and
Substantial Completion of TI Work; provided, however, that in no event shall the
Target Date for Substantial Completion of Base Project Work/Laboratory Work or
the TI Work, as applicable, be established beyond the applicable Outside
Delivery Date unless otherwise approved by Tenant in writing, in Tenant’s sole
discretion.  As used in this Work Letter, “Substantial Completion” (or any
variation or derivation thereof) shall mean that Landlord shall have achieved
(or caused to be achieved) Substantial Completion of Base Project
Work/Laboratory Work (as defined herein) and Substantial Completion of TI Work
(as defined herein).  The achievement of both Substantial Completion of Base
Project Work/Laboratory Work and Substantial Completion of TI Work is called the
“Substantial Completion of the Project”.  Possession of the Laboratory Space
shall be delivered to Tenant not later than ten (10) days following Substantial
Completion of Base Project Work/Laboratory Work; and possession of the entire
Leased Property shall be delivered to Tenant not later than ten (10) days
following Substantial Completion of the Project; but in each case not later than
the applicable Outside Delivery Date.

 

(c)           Notice of Substantial Completion; Punchlist. Landlord shall
provide Tenant with Notice at least thirty (30) days in advance of the
anticipated date of the Substantial Completion of Base Project Work/Laboratory
Work, and at least thirty (30) days in advance of the Substantial Completion of
TI Work. Within ten (10) Business Days after the date on which Tenant receives
Landlord’s Notice of the occurrence of the Substantial Completion of Base
Project Work/Laboratory Work or of the Substantial Completion of TI Work, as
applicable, Landlord’s Construction Representative and Tenant’s Construction
Representative shall conduct a joint walk-through of the Leased Property to
inspect the Leased Property (including, in addition to the Building, all
driveways, parking areas and other exterior areas of the Leased Property), have
all systems commissioned and demonstrated (as applicable), and to mutually
determine whether Landlord has achieved the Substantial Completion as to which
such Notice has been given; and, if so, Tenant shall create a punch list of
minor finishing and adjustment which Landlord has not completed in accordance
with the Base Project Plans and/or the TI Work Plans (as applicable) or which
needs to be repaired to achieve Substantial Completion of Base Project
Work/Laboratory Work or Substantial Completion of TI Work, as applicable. 
Landlord agrees to complete the items set forth on the punch list within ninety
(90) days of receipt of such list; provided, however, if Landlord is working
diligently to complete the items on the punchlist, Landlord shall have such
additional time as is reasonably required to complete such items so long as
Landlord can reasonably demonstrate to Tenant that such item or items could not
have reasonably been completed within such initial ninety (90) day period. Any
dispute as to whether a particular item constitutes a punchlist item shall be
resolved by the dispute resolution process set forth in this Work Letter.

 

(d)           Target Date; Delay(s). Tenant acknowledges that the Target Dates,
as established from time to time, represent Landlord’s good faith estimate, and
not a guarantee, as to when the Base Project Work (including the Laboratory
Work) and the TI Work will be Substantially Completed.  Notwithstanding the
foregoing:

 

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(i)            Unavoidable Delay(s).  If the Base Project Work (including the
Laboratory Work) and/or the TI Work are not Substantially Complete on or before
the applicable Target Date as a result of Unavoidable Delay(s), the applicable
Target Date shall be extended for additional periods of time equal to the time
actually lost by reason of such Unavoidable Delay(s).  As used herein, the term
“Unavoidable Delay(s)” means a Party’s inability to perform, in whole or in
part, its obligations under this Work Letter (other than the obligation to pay
or disburse money) as a result of and only to the extent caused by Force
Majeure.  A Party wishing to invoke an Unavoidable Delay shall give the other
Party Notice of that intention within ten (10) days following the commencement
of any Unavoidable Delay then known to such Party and shall, at that time,
specify the reasons therefor and the period of delay, if known, or if not known,
a reasonable estimate thereof.  In the event that the applicable Target Date is
extended as a result of an Unavoidable Delay, then (i) Landlord agrees to use
commercially reasonable and diligent efforts to achieve Substantial Completion
as soon as practicable thereafter, (ii) the Lease shall remain in full force and
effect, and (iii) the scheduled Commencement Date, identified on the Schedule,
shall be extended commensurately by the extension of the applicable Target Date
if Substantial Completion is in fact delayed by the period of such extension.

 

(ii)           Cumulative Tenant Delay(s).  If the Base Project Work (including
the Laboratory Work) and/or the TI Work are not Substantially Complete on or
before the applicable Target Date as a result of Cumulative Tenant Delay(s), the
applicable Target Date shall be extended for additional periods of time equal to
the time actually lost by such Cumulative Tenant Delay(s).  As used herein,
“Tenant Delay(s)” means any delay caused by any of the following described
events or occurrences, provided that Landlord shall give Tenant written notice
of the occurrence thereof, and of Landlord’s intent to treat the same as a
Tenant Delay, within ten (10) days following the commencement of such event or
occurrence: (1) actual delays caused by Tenant’s failure to comply with the
specific time periods established in the Schedule, (2) actual interference
caused by the performance of any work or any other activity in or about the
Leased Property by any person, firm or corporation employed by or on behalf of
Tenant during the period prior to Substantial Completion, (3) any actual delay
by Tenant with respect to the time periods set forth in this Work Letter
regarding the approvals required of Tenant; (4) any actual delay by Tenant with
respect to the time periods set forth in this Work Letter regarding the TI GMP;
(5) actual delays resulting from a Change Order requested by Tenant (not to
exceed the amount of time as set forth in the Change Order for extension of the
applicable Target Date); (6) any actual delay resulting from any Additional Base
Project Change requested by and confirmed by Tenant pursuant to
Section 2(c)(ii) hereof, if the cumulative duration of all such delays shall
exceed thirty (30) days, and (7) any other delay directly caused by or arising
directly from acts of Tenant or omissions of Tenant where Tenant had a duty or
obligation to act.  “Cumulative Tenant Delay(s)” means net Tenant Delay(s),
meaning Tenant Delays but excluding any concurrent “Landlord Delay” (as defined
in Section 4(d)(iv) below).

 

(iii)          If the Base Project Work (including the Laboratory Work) and/or
the TI Work are not Substantially Complete on or before the applicable Target
Date because of Cumulative Tenant Delay(s), in addition to the extension of the
Target Date pursuant to Section 4(d)(i) above, Basic Rent and Additional Rent
shall nevertheless begin to accrue and be payable by Tenant on the date that the
same would have commenced had Substantial Completion not been delayed by such
Cumulative Tenant Delay(s).

 

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(iv)          Landlord Delay(s).  If the Base Project Work (including the
Laboratory Work) and/or the TI Work are not Substantially Complete on or before
the applicable Target Date as a result of Landlord Delay(s), then the
Commencement Date shall be extended on a day-for-day basis equal to the amount
of time actually lost on account of such Landlord Delay(s) and Landlord shall
pay (or reimburse, as applicable) to Tenant, and Tenant shall be entitled to
recover from Landlord, any and all out-of-pocket fees, costs, expenses, fines,
premiums, penalties and other amounts incurred by Tenant proximately arising out
of, resulting from or attributable or relating to the failure of the Base
Project Work and/or the TI Work to be Substantially Complete on or before the
applicable Target Date as a result of such Landlord Delay(s), including, by way
of example only and not limitation, all actual, reasonable and documented fees,
costs, expenses, premiums, penalties and other amounts for: deposits;
nonrefundable or advance payments; storage (including, but not limited to,
furniture, fixtures, machinery and equipment); moving or shipping; cancellation,
termination, delay, rescheduling or rearrangement of consultants, shippers,
movers, installers and technicians; and returns and restocking, in all cases
paid to third parties, but not including damages described in clause (B) of
Section 4(e)(i) below (which shall be governed by such Section) (collectively,
the “Interim Delay Damages”).  Landlord’s obligations and liabilities pursuant
to this Section 4(d)(iv) shall survive the expiration or earlier termination of
the Lease.  As used herein, “Landlord Delay(s)” means any delay (other than an
Unavoidable Delay) or failure beyond the date required for performance by
Landlord (including Landlord’s Construction Representative), or any delay or
failure beyond the date required for performance by Landlord’s Contractor of a
requirement of Landlord or such contractor contained in the Lease, this Work
Letter, the Base Project Construction Contract, the TI Construction Contract, or
the Schedule, including, without limitation, the performance of a task, the
delivery of plans, drawings or documents (including, but not limited to, any
Landlord Change), or the giving of a required approval or consent, and delay
beyond the date required for performance by Tenant of a requirement in the
Lease, this Work Letter or the Schedule if such performance is actually delayed
by interference by Landlord or Landlord’s Contractors or any of their respective
employees, agents, contractors or suppliers.

 

(e)           Outside Delivery Date.  For purposes hereof, “Outside Delivery
Date” means (i) May 4, 2012 with respect to the Substantial Completion of Base
Project Work/Laboratory Work (as hereinafter defined), and (ii) December 1, 2012
with respect to Substantial Completion of TI Work (as hereinafter defined).  If,
except by reason only of any Unavoidable Delay(s) and/or Cumulative Tenant
Delay(s), Substantial Completion of Base Project Work/Laboratory Work or
Substantial Completion of TI Work has not occurred by the applicable Outside
Delivery Date:

 

(i)            Landlord shall be responsible for and shall pay and indemnify
Tenant for (or reimburse to Tenant, as applicable), and Tenant shall be entitled
to recover the following from Landlord (collectively, the “Outside Delivery Date
Damages”) (A) all Interim Delay Damages; and (B) all holdover rents and damages
for which Tenant becomes liable with respect to Tenant’s continued occupancy of
all or any part of the existing premises leased by Tenant at 101 Gordon Drive,
Exton, Pennsylvania (the “Existing Premises”), under the Existing Premises Lease
Agreement (as defined below), which shall be payable by Landlord as and when
payable by Tenant, but limited to the amount (on a monthly-rate basis) by which
all of the rent and other sums payable by Tenant for occupancy of the Existing
Premises or any part thereof, including all holdover rent and damages, exceeds
the monthly-rate minimum annual rent (and all other sums

 

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of money or charges required to be paid for use or occupancy) in effect under
Tenant’s lease for the Existing Premises immediately prior to the Outside
Delivery Date for Substantial Completion of TI Work (the “Holdover Damages”);
provided, however, that Tenant shall credit to the Holdover Damages any net
rents and other sums actually received by Tenant under any sublease(s) or other
occupancy agreements pertaining to the Existing Premises after deducting all of
the costs and expenses incurred by Tenant in connection with any such subtenant
or occupancy agreement including, without limitation, brokerage commissions,
tenant improvements, tenant allowances, any other tenant concessions and any
other costs in preparing the space for occupancy by any such subtenant or
occupant.  The Interim Delay Damages and the Holdover Damages are collectively
called the “Delay Damages”.  The rights of Tenant under this
Section 4(e)(i) shall be in addition to and without in any way limiting or
waiving any other right or remedy of Tenant under this Work Letter. “Existing
Premises Lease Agreement” means, collectively, Lease dated December 31, 1992
(effective January 15, 1993) between Lion Associates, L.P., as landlord, and
LuMont Keystone/Lionville Trust Dated December 30, 1992, as tenant and assigned
to The West Company, Incorporated, as amended by a First Addendum dated May 22,
1995, as the same may hereafter be amended or supplemented, with Landlord’s
prior consent only insofar as any such amendment may result in any increase in
the liability of Landlord for Holdover Damages pursuant to this Section 4(e)(i).

 

(ii)           Tenant may, at its sole option (in addition to and without in any
way limiting or waiving any other right or remedy of Tenant under this Work
Letter), at any time before Substantial Completion of Base Project
Work/Laboratory Work and Substantial Completion of TI Work in accordance with
the terms of the Lease and this Work Letter, complete or cause to be completed
the Base Project Work, the Laboratory Work and/or the TI Work, as applicable, in
accordance with this Work Letter, in which event Landlord shall pay or reimburse
to Tenant, within thirty (30) days after written demand therefor, the excess, if
any, of the actual out-of-pocket costs incurred by Tenant for or in connection
with the construction and completion of the Base Project Work, the Laboratory
Work and/or the TI Work (including without limitation the costs of work, labor
and materials, amounts payable to any architect, engineer or other consultant,
or to any general contractor, subcontractor or supplier, any unpaid sums owed by
Landlord to any contractors or subcontractors or suppliers and paid by Tenant or
for which Tenant may become liable, general condition items, construction and
management fees, inspection fees, premiums for insurance and bonds, unrefunded
deposits, costs of permits, licenses and other governmental approvals,
reasonable attorney’s fees incurred in connection with the prosecution of such
work or otherwise arising out of such default or breach by Landlord, and all
other expenses reasonably incurred), with interest thereon at the Overdue Rate
(accruing from the date such expense is paid by Tenant through the date Tenant
is repaid), over the unpaid balance, if any, of the amount payable by Tenant to
Landlord hereunder on account of the TI Work as such amount shall exist as of
the date of such breach or default.  In addition, the provisions of Section 44
of the Lease shall be applicable to this Section 4(e)(ii).  If Landlord fails to
pay or reimburse Tenant as set forth in this Section, then Tenant may set off
against Rent such amount that remains unpaid or unreimbursed.

 

(f)            Tenant’s Termination Rights.  Notwithstanding anything to the
contrary contained herein or in the Lease, Tenant shall have the right and
option, in its sole discretion, to terminate this Lease by Notice to Landlord
upon the occurrence of any of the following, in which event the Lease shall be
null and void and Tenant shall have no further obligations hereunder:

 

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(i)            If, except by reason only of any Unavoidable Delay(s) and/or
Cumulative Tenant Delay(s), Landlord or Landlord’s Contractor fails to complete
construction of the foundation(s) of the Building on or before August 15, 2011,
and (A) Tenant shall have given Landlord Notice of such failure, (B) Tenant,
acting in good faith and reasonably, determines that such failure (alone or
taken in consideration with other factors) is reasonably likely to result in a
failure on the part of Landlord to achieve Substantial Completion of Base
Project Work/Laboratory Work and/or Substantial Completion of the TI Work on or
before the applicable Outside Delivery Date therefor set forth in the Work
Letter, and (C) in the good faith determination of Tenant, Landlord shall have
failed, within thirty (30) days following Landlord’s receipt of Tenant’s Notice
of such failure, to have provided to Tenant an adequate and reasonably
substantiated plan for the commencement and diligent prosecution of the work
required of Landlord and Landlord’s Contractor under this Work, sufficient to
assure the achievement of Substantial Completion of Base Project Work/Laboratory
Work and Substantial Completion of the TI Work on or before the applicable
Outside Delivery Date therefor set forth in this Work Letter;

 

(ii)           If, except by reason only of any Unavoidable Delay(s) and/or
Cumulative Tenant Delay(s), after Landlord and Landlord’s Contractor completes
construction of the foundation(s) of the Building, Landlord or Landlord’s
Contractor fails to achieve any of the Construction Milestones, and following
Landlord’s receipt of Notice from Tenant of such failure, any one of the
following has occurred:

 

(1)           Landlord shall have failed to act diligently to satisfy such
Construction Milestone and otherwise to conform the construction of the Base
Project Work and the TI Work to the Schedule to achieve Substantial Completion
of Base Project Work/Laboratory Work and/or Substantial Completion of TI Work on
or before May 3, 2013 with respect to the Base Project Work (including the
Laboratory Work), or November 30, 2013 with respect to the balance of the TI
Work;

 

(2)           Landlord shall have stopped performing the Base Project Work or TI
Work for a period of more than forty-five (45) consecutive days or more than
sixty (60) non-consecutive days in the aggregate (and such work stoppage was not
due to Tenant Delay or Unavoidable Delays); or

 

(3)           Landlord, if obligated to pay Holdover Damages under the terms of
this Work Letter, shall have failed to pay any amount of such Holdover Damages
and such failure continues uncured for more than ten (10) days following
Tenant’s Notice to Landlord of such failure;

 

(iii)          If, except by reason only of any Unavoidable Delay(s) and/or
Cumulative Tenant Delay(s), Substantial Completion of Base Project
Work/Laboratory Work has not occurred on or before May 3, 2013; or

 

(iv)          If, except by reason only of any Unavoidable Delay(s) and/or
Cumulative Tenant Delay(s), Substantial Completion of TI Work has not occurred
on or before November 30, 2013.

 

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If, as of the effective date of Tenant’s termination of this Lease pursuant to
this Section 4(f), Landlord is liable to Tenant for any monetary sums (including
without limitation any Holdover Damages or Delay Damages), then Landlord’s
obligation for the payment of such sums shall survive Tenant’s termination of
this Lease; but Landlord shall not have any obligation to Tenant for sums first
incurred by Tenant or accruing after the effective date of termination of this
Lease pursuant to this Section 4(f).

 

(g)           Rent Credit.  In addition to Tenant’s other rights and remedies
set forth herein or at law and in equity, and not in limitation thereof, if, for
any reason other than any Unavoidable Delay(s) and/or Cumulative Tenant
Delay(s), Substantial Completion of Base Project Work/Laboratory Work  or
Substantial Completion of TI Work has not occurred by the applicable Outside
Delivery Date, then in each case Tenant shall be entitled to a credit of two
(2) days of Basic Rent for each day Landlord is late in achieving Substantial
Completion, to be credited against the Basic Rent first accruing under the
Lease; which right is stipulated to be liquidated and agreed-upon damages for
costs and other damages that Tenant is likely to incur by reason of such delay
but which otherwise are not provided for hereunder, and which may be difficult
or impossible to calculate fully.

 

(h)           Exclusive Remedies.  Sections 4(e), (f) and (g) hereof shall
constitute Tenant’s sole remedies for Landlord’s failure to achieve Substantial
Completion of Base Project Work/Laboratory Work and/or Substantial Completion of
TI Work on or before the applicable dates set forth in such Sections, and
Landlord’s failure to achieve any Construction Milestone by the required date
(each a “Completion Default”), and shall be in lieu of any other rights and
remedies available to Tenant at law or in equity on account of any Completion
Default.

 

(i)            Warranty.

 

(i)            Landlord hereby warrants that (i) all labor and materials
provided or required to be provided as a part of the Base Project Work will be
in accordance with the requirements of the Base Project Construction Documents
(subject to standard industry tolerances), and that all Base Project Work
(including, without limitation, all materials and equipment) will be in
accordance with the requirements of the Base Project Construction Documents and
free from defects (subject to standard industry tolerances), and (ii) all labor
and materials provided or required to be provided as a part of the TI Work will
be in accordance with the requirements of the TI Work Plans (subject to standard
industry tolerances), and that all TI Work (including, without limitation, all
materials and equipment) will be in accordance with the requirements of the TI
Work Plans and free from defects (subject to standard industry tolerances).  In
no event shall Tenant be obligated to pay any sum or make any contribution to
Landlord, as rent or otherwise, for the correction of any defect in the Base
Project Work or the TI Work or otherwise arising out of the failure of the Base
Project Work or the TI Work to conform to Landlord’s warranty in this
Section 4(i)(i).

 

(ii)           In addition to, and without limiting, the foregoing and any other
provisions of this Work Letter, for a period of one (1) year after Substantial
Completion of TI Work, Landlord shall repair or replace, as reasonably
determined by Landlord, at its sole cost and expense all Base Project Work
and/or TI Work that does not conform to the requirements of Section 4(h)(i). 
Landlord shall cause all warranties relating to the TI Work given by Landlord’s

 

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Contractor and, to the extent assignable, Landlord’s and Landlord’s Contractor’s
subcontractors and suppliers to be assigned in writing to Tenant, upon
completion of the TI Work.  All repairs or replacements required pursuant to
Section 4(i)(i) shall be made at the reasonable convenience of Tenant during
such times as will not unreasonably and unnecessarily interfere with Tenant’s
use and occupancy of the Leased Property.  If any item of the Base Project Work
or the TI Work is repaired or replaced due to its failure to comply with the
warranty described in this Section 4(i)(ii), the warranty with respect to such
item shall likewise extend to all such repairs and replacements. 
Notwithstanding the foregoing, Landlord makes no warranty herein with respect to
any defect in the TI Work constructed by Landlord to the extent such defect
arose out of an error in the TI Work Plans not caused by any error in the Base
Project Plans, or Tenant’s failure to follow any manufacturer’s instructions
with regard to the use and care of the Tenant Improvements (and not caused by a
breach or violation by Landlord or Landlord’s Contractor or any subcontractor,
of the provisions of this Work Letter), or to otherwise maintain the same in
accordance with commonly recognized industry standards to the extent Tenant is
responsible for such maintenance pursuant to the terms of the Lease. Nothing
herein is intended to limit the maintenance and repair responsibilities of
Landlord and Tenant as provided in the Lease.

 

(iii)          Landlord further represents, warrants and covenants that the
Leased Property shall not, upon Substantial Completion of all work required to
be performed by Landlord and Landlord’s Contractors hereunder, contain any
Hazardous Substances requiring registration, remediation or other handling under
any Environmental Laws, nor any underground or above-ground storage tanks
located on or within the Leased Property other than as may be shown in the Base
Project Plans and Specification and/or the TI Work Plans.

 

(j)            Conflict.  To the extent that the requirements for notice,
periods for cure or correction and other conditions precedent for the exercise
by Tenant of its rights under this Section 4 conflict with those set forth in
the Lease, the requirements for notice, periods for cure or correction and other
conditions precedent for the exercise by Tenant of its rights under this
Section 4 shall control.

 

(k)           Survival.  Landlord’s obligations and liabilities pursuant to this
Section 4 shall survive the expiration or earlier termination of the Lease.

 

5.             Substantial Completion.  As used herein:

 

(a)           “Substantial Completion of Base Project Work/Laboratory Work”
(including derivative terms) means:

 

(i)            Construction of the Base Project Work and Laboratory Work shall
have been substantially completed in accordance with the Base Project
Construction Documents and all applicable Legal Requirements, and the
requirements of public authorities and with the reasonable and customary
requirements of insurance underwriters; and the Architect shall have issued its
certificate of substantial completion in form and substance reasonably
acceptable to Tenant; provided, however, that Landlord shall not be required to
complete, for the satisfaction of the foregoing, “finish”-type work that
otherwise is included in the Base Project Work and/or Laboratory Work and which,
using prudent practices, contractors would customarily postpone to prevent
likely damage due to ongoing TI Work;

 

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(ii)           Landlord shall have secured and delivered to Tenant a certificate
of occupancy from the municipality having jurisdiction over the Leased Property
to permit the use, occupancy and operation thereof, and occupancy of all other
portions of the Leased Property required for access to and the use of the Leased
Property for their intended purposes; provided, however, if such certificate of
occupancy is unavailable solely because of the non-completion of the TI Work, or
Tenant’s failure to complete the installations of its furnishings, fixtures and
equipment, then Landlord shall not be required to obtain such certificate of
occupancy until Substantial Completion of TI Work and Tenant’s installations of
its furnishings, fixtures and equipment, but there shall not exist any condition
(or any omission of any condition) of the Base Project Work and/or Laboratory
Work that would render such certificate unavailable upon completion of the TI
Work and Tenant’s installations of its furnishings, fixtures and equipment;

 

(iii)          Without in any way limiting the foregoing, the following specific
items of the Project shall have been constructed, installed and completed in
accordance with the Base Project Construction Documents, and shall be safe,
secure and in good condition and full operating order, and shall be covered by
such certificate of occupancy:  All Building Systems and components, including,
but not limited to, elevators, HVAC, utilities, telephone, data, security and
life safety, mechanical, electrical and plumbing systems in all areas of the
Building (including without limitation the Laboratory Space) other than Tenant’s
office areas; provided that electrical power shall be available for the
performance of the TI Work in Tenant’s office areas; and

 

(iv)          Construction of the Laboratory Work shall have been substantially
completed in accordance with the TI Work Plans, and the Architect shall have
issued its certificate of substantial completion with respect thereto in form
and substance reasonably acceptable to Tenant.

 

(b)           “Substantial Completion of TI Work” (including derivative terms)
means (as to the Leased Property or a portion of the Leased Property that Tenant
may agree to accept separately):

 

(i)            That Landlord shall have achieved Substantial Completion of Base
Project Work/Laboratory Work, including (A) all parking areas, driveways, access
roads and entry areas (and related curbs, traffic control devices and
signage, etc. for the use and operation thereof in accordance with all Legal
Requirements), the Building roof, entrance, lobby and other public areas and
signage, storm-water management systems and utility systems in support of the
foregoing; and (B) all “finish”-type work that may have been postponed to
prevent likely damage due to ongoing TI Work; and

 

(ii)           That the TI Work shall have been substantially completed in
accordance with the TI Work Plans and all applicable Legal Requirements, and the
requirements of public authorities and with the reasonable and customary
requirements of insurance underwriters; and the Architect shall have issued its
certificate of substantial completion with respect thereto in form and substance
reasonably acceptable to Tenant, without limitation such that:

 

(1)           Tenant can use the Leased Property (including all interior and
exterior portions thereof, including without limitation, in addition to Tenant’s
business

 

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operations areas, all driveways and parking areas, sidewalks, lobbies and
restrooms), for their intended purposes without any further material work or
interference to Tenant in conducting its ordinary business activities;

 

(2)           Any incomplete items do not materially impair Tenant’s normal
business operations or detract from the intended appearance of the Leased
Property, and the completion thereof will not so impair such business operations
or appearance;

 

(3)           Landlord shall have secured a permanent certificate of occupancy
for the use and occupancy of the Leased Property (including without limitation
all of the Base Project Work and TI Work) for the uses thereof permitted under
the Lease, from the municipality having jurisdiction over the Leased Property;

 

(4)           Tenant, its employees, agents and invitees, have reasonable and
customary access to the Building and the remainder of the Leased Property,
through the lobby, entrance ways, stairways, elevators and hallways; and

 

(5)           The Leased Property, or such portion, are in broom-clean
condition, free and clear of Landlord’s and Landlord’s Contractors’ tools,
materials and equipment and all debris, ready for the installation of any
equipment, furniture, fixtures, or decorations that Tenant will install and
which were not included in the TI Work Plans, and all perimeter windows shall
have been cleaned.

 

6.             Tenant’s Separate Contractors; Additional Electrical Service.

 

(i)            Landlord acknowledges that during the period that Landlord’s
Contractor is performing the TI Work as set forth in the Schedule, Tenant may
engage separate contractors (the “Tenant’s Contractors”) to provide furniture,
computer and other equipment, signage, cabling and wiring, and other items
required by Tenant for its use and enjoyment of the Leased Property
(collectively, “Separate Tenant Work”).  Landlord shall permit Tenant’s
Contractors to have (i) reasonable use of freight elevators, (ii) reasonable
facilities for storage of their equipment and materials and staging of any
construction work they may undertake, and (iii) reasonable parking rights. 
Landlord shall cause Landlord’s Contractor to cooperate in a reasonable manner
with Tenant’s Contractors and Tenant shall cause Tenant’s Contractors to
cooperate in a reasonable manner with Landlord’s Contractor. Notwithstanding the
foregoing, all access and work by Tenant’s Contractors shall be subject to
scheduling requirements reasonably and timely imposed by Landlord’s Contractor.
Additionally, Landlord shall cause Landlord’s Contractor, and Tenant shall cause
Tenant’s Contractors, to enforce strict discipline and good order among their
respective employees, and among their respective subcontractors and
sub-subcontractors (and their respective employees), to maintain and observe
sound and harmonious labor practices and to take all reasonable steps to avoid
labor disputes and work stoppages, damage to property or delay in the Schedule. 
Tenant shall be responsible for such permits, licenses and approvals as may be
required for the work of Tenant’s Contractors and for all fees associated with
the same, subject to Tenant’s right to reimbursement for such costs from the
Improvement Allowance.  If requested by Tenant, Landlord shall (at no
out-of-pocket cost to Landlord) assist Tenant and its design professionals to
obtain such permits, licenses and approvals required, including the
identification of, and assistance with the preparation of, all

 

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requisite application documents, the coordination of the submission of such
application documents, and consultation and meetings with Tenant and Tenant’s
Contractors, and with governmental representatives, to facilitate the proper and
expeditious processing of such applications.  Tenant may cause Landlord to pay
for the costs of any Separate Tenant Work out of the Improvement Allowance, to
the extent otherwise available.

 

(ii)           If Tenant desires to obtain dual or redundant electric service to
the Building, all work required to provide such service shall be considered as
part of the Tenant Work for purposes of this Work Letter, or Tenant may contract
independently for such work by one or more Tenant Contractors as a part of the
Separate Tenant Work.  Tenant may cause Landlord to pay for the costs of such
Work out of the Improvement Allowance, to the extent otherwise available.

 

7.             Tenant’s Access to Leased Property During Construction.  Subject
to Landlord and Landlord’s Contractors’ reasonable rules and regulations for the
safety and protection of persons and property, and for the timely prosecution of
the TI Work and the Base Project Work, Tenant and its agents, representatives,
employees and contractors shall have access to the Leased Property at all times
during the construction of the Base Project Work and TI Work (defined below)
scheduled in advance with Landlord from and after the Effective Date of the
Lease for the purpose of (i) taking measurements and installing furniture,
fixtures and equipment within the Leased Property, (ii) performing Separate
Tenant Work, and (iii) inspecting and verifying the progress and performance of
the Base Project Work and the Separate Tenant Work; provided, however, that in
connection with the performance of Separate Tenant Work, Tenant shall not
interfere with or delay the completion of the TI Work.  The Separate Tenant Work
shall be subject to the reasonable coordination of Landlord. Tenant shall
provide all labor, materials, and expertise necessary for the construction of
any Separate Tenant Work. No such access to or performance of TI Work in the
Leased Property shall accelerate the Commencement Date or require Tenant to pay
any Rent under the Lease unless Tenant also commences conducting business in the
Leased Property; provided, however, that if, after the TI Work is Substantially
Complete, Tenant occupies the Leased Property for the installation of Tenant’s
furnishings and equipment, Tenant shall pay utility costs actually incurred as a
result of such installation following the date of Substantial Completion of TI
Work.

 

8.             Meetings.  To coordinate and facilitate the timely completion of
the Base Project Work and TI Work, commencing upon the execution of the Lease,
Landlord and Tenant shall schedule design/construction meetings not more
frequently than weekly, and not less frequently than once every other week
(commencing not later than the commencement of the foundations and footings for
the Building, or otherwise as provided in the Schedule, and provided that any of
such meetings may be combined with a meeting of other project personnel,
contractors and/or subcontractors), which shall be attended by appropriate
representatives of Landlord and Tenant and if reasonably necessary, their
contractors and design professionals, to discuss the progress of design,
construction, materials procurement and implementation of the Project. 
Landlord, upon Tenant’s (or Tenant’s Construction Representative’s) request,
shall arrange for a meeting between Landlord, Landlord’s Contractors (as
applicable) and Tenant and/or their respective design professionals, contractors
and/or their respective agents (including, but not limited to, Landlord’s
Construction Representative and Tenant’s Construction Representative) with
respect to the Base Project Work and/or the TI Work.  Each Party shall have
reasonable and necessary

 

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access to the pertinent contracts, plans, change orders, field directives,
records and data of the other Party, its contractors and agents. Without
limiting the foregoing, Landlord shall, within five (5) Business Days following
Landlord’s (or Landlord’s Construction Representative’s) receipt of Tenant’s
written request therefor, deliver to Tenant (through Tenant’s Construction
Representative) written minutes of any meeting(s) between Landlord and/or
Landlord’s Construction Representative and Landlord’s Contractors (as
applicable) and/or any sub-contractors, sub-subcontractors or material
suppliers, pertaining to the TI Work, or to the Base Project Work materially
affecting or otherwise necessary for the design and construction of the Tenant
Improvements, and, at Tenant’s (or Tenant’s Construction Representative’s)
request, Landlord shall arrange for any such sub-contractors, sub-subcontractors
and/or material suppliers to attend the next regularly-scheduled
design/construction meeting pertaining to the TI Work, or, if Tenant so
requests, Landlord shall arrange a special meeting between any such
sub-contractors, sub-subcontractors and/or material suppliers and Tenant and its
design professionals, contractors and their respective agents (including, but
not limited to, Tenant’s Construction Representative).  Tenant agrees to
communicate (and to cause Tenant’s Construction Representative to communicate)
with Landlord’s Contractors’ subcontractors only through the designated
representatives of Landlord and of Landlord’s Contractor.

 

9.             Dispute Resolution.

 

(a)           Selection of Independent Neutral.  Within thirty (30) calendar
days following the Effective Date of the Lease, Landlord and Tenant shall use
reasonable efforts to select an unaffiliated third party with substantial
expertise in the construction of Class “A” office buildings in the Philadelphia
metropolitan area to serve as an independent neutral with respect to disputes
arising under this Work Letter as set forth on Schedule 9 attached hereto (the
“Independent Neutral”). Only those disputes or matters set forth on Schedule 9
shall be subject to the provisions of this Section 9.  If Landlord and Tenant do
not agree on an individual to serve as the Independent Neutral within such
thirty (30)-day period, Landlord and Tenant shall, within thirty (30) calendar
days thereafter, each select an unaffiliated third party with substantial
expertise in the construction of Class “A” office buildings in the Philadelphia
metropolitan area to serve as “Landlord’s Dispute Representative” and “Tenant’s
Dispute Representative”, respectively. Within fifteen (15) calendar days after
their selection, Landlord’s Dispute Representative and Tenant’s Dispute
Representative shall jointly select an unaffiliated third party with substantial
expertise in the construction of Class “A” office buildings in the Philadelphia
metropolitan area to serve as the Independent Neutral.

 

(b)           Duties of the Independent Neutral.  The Independent Neutral shall
serve to facilitate the resolution of the disputes and matters described on
Schedule 9.  Such disputes arising under this Exhibit shall be promptly
presented to the Independent Neutral.  The Independent Neutral will attempt to
resolve disputes amicably within ten (10) calendar days after he/she is
presented with the dispute.  The Parties shall cooperate fully with the
Independent Neutral and shall provide such additional information, documentation
or materials as the Independent Neutral may request.  If the Parties do not
resolve the dispute amicably within such ten (10) day period, the Independent
Neutral shall render his/her decision respecting such dispute, in writing, as
promptly as possible but no later than thirty (30) calendar days after it was
presented to him/her.  The decision of the Independent Neutral shall be given
the same force and effect as an arbitrator’s award in common law arbitration in
Pennsylvania.  The time periods

 

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herein are not jurisdictional and shall be subject to change by the Independent
Neutral for good cause shown.  The Independent Neutral shall have the authority
to establish the procedures for resolving the dispute including, without
limitation, if necessary, retaining a consultant to advise on technical matters.

 

(c)           Compensation of Independent Neutral.  The Independent Neutral
shall be paid a reasonable hourly fee for his/her services and shall be
reimbursed all reasonable out-of-pocket costs incurred in carrying out his/her
duties hereunder.  All costs of engaging the Independent Neutral, including the
retainer and costs described herein, shall be shared equally between Landlord
and Tenant. Landlord and Tenant shall each pay their own costs associated with
the engagement of Landlord’s Dispute Representative and Tenant’s Dispute
Representative, respectively.

 

10.          Time of Essence.  Time is of the essence with respect to all time
periods mentioned in or established in accordance with this Work Letter.

 

F-38

--------------------------------------------------------------------------------

 

SCHEDULE 2(d)(ii)(7)(A)

 

HOURLY RATES OF SUPERVISORY PERSONNEL

 

Director / Vice President

 

$

133.30

/hr.

 

 

 

 

Project Manager

 

$

81.44

/hr.

 

 

 

 

Superintendent / Estimating

 

$

66.63

 

 

 

 

 

Asst. Supervisor / Asst. Project Manager

 

$

48.13

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 9

 

DISPUTES

 

1.             Whether the Tenant’s approval or disapproval of Landlord’s
amendment to the Schedule is reasonably exercised and therefore proper, pursuant
to Section 1(b)(i).

 

2.             Whether the Project Construction Documents meet the criteria of
Section 2(b)(ii), clauses (i)-(iii).

 

3.             Whether the Tenant’s disapproval of the Project Construction
Documents is appropriate, i.e., that they are not consistent with the Design
Development Documents, as provided in Section 2(b)(iii).

 

4.             Whether the Tenant’s disapproval of modified Project Construction
Documents is appropriate, i.e., that the modifications are not responsive to the
detailed reasons for disapproval of the original Project Construction Documents,
as provided in Section 2(b)(iii).

 

5.             Whether a proposed Landlord Change to the Base Project
Construction Documents is permitted pursuant to the criteria in
Section 2(b)(vi), in particular clauses (A)-(I) in the second sentence and
clauses (1) and (2) in the third sentence.

 

6.             Whether a Landlord substitution of materials without Tenant’s
approval is permitted pursuant to Section 2(b)(vi).

 

7.             Whether the Landlord’s disapproval of Additional Base Project
Work is justified per the criteria of Section 2(c)(i).

 

8.             Whether the Landlord’s evaluation of the impact on the Schedule
of Additional Base Project Work is justified per the criteria of
Section 2(c)(ii).

 

9.             Resolution of disputes regarding the revisions to the Base
Project Plans, and asserted delays and costs as set forth in Section 2(c)(iii).

 

10.           Whether the Tenant’s refusal to approve the Base Project Budget or
updates to the same is justified per the criteria of Section 2(d)(ii).

 

11.           Whether Tenant’s refusal to approve the Base Project Construction
Contract or any amendment or modification thereto is justified per the criteria
set forth in Section 2(d)(iii).

 

12.           Whether the Landlord’s refusal to approve the TI Work Plans or
revisions thereto is justified pursuant to the criteria of Section 3(c)(ii).

 

13.           Whether the Landlord’s refusal to approve changes to the TI Work
Plans is justified pursuant to the criteria in Section 3(c)(iv).

 

14.           Whether the Tenant’s refusal to approve the TI Construction
Contract or any modification or amendment thereto is justified pursuant to the
criteria of Section 3(e).

 

15.           Whether the Landlord’s substitution of materials in the TI Work is
permitted pursuant to Section 3(j).

 

--------------------------------------------------------------------------------

 

ATTACHMENT 1

 

PRELIMINARY SCHEDULE

 

Preliminary Dates

 

Date

NPDES Permit Submission

 

09/22/10

Uwchlan Township Land Development Approvals Complete (Final)

 

12/15/10

Evidence of Financing & Equity Sufficient for the Project

 

At Lease Execution

Core/Shell/Site Construction Documentation Complete

 

02/11/11

Final Bids Received for all Trades

 

02/25/11

Submit Applications for Building Construction Permits

 

02/14/11

Acquisition of Title to Additional Land

 

02/28/11

NPDES Permits Obtained

 

04/14/11

Receive Building Construction Permits

 

04/15/11

Commence Site Work

 

04/16/11

Core & Shell Foundations Commence

 

06/01/11

Core & Shell Foundations Complete

 

08/15/11

Steel Erection Complete

 

09/15/11

Lab Tenant Improvement and Core and Shell Substantially Complete

 

05/04/12

Office and Amenities Space Construction Substantially Complete

 

12/01/12

Site Work and Landscaping Complete

 

12/01/12

 

--------------------------------------------------------------------------------

 

ATTACHMENT 2

 

DESIGN DEVELOPMENT DOCUMENTS

 

--------------------------------------------------------------------------------

 

ATTACHMENT 2

 

DESIGN DEVELOPMENT DOCUMENTS

 

This Attachment 2 shall consist of the attached list of Design Development
drawings as well as the attached 12/14/2010 memo titled “West DD submission
clarifications.

 

--------------------------------------------------------------------------------

 

*

 

Drawing #

 

Title

 

Rev

 

Date/Issue

CIVIL — Prepared by Chester Valle Engineers

 

 

 

 

*

 

01

 

Cover Sheet

 

 

 

10/20/10

*

 

02

 

Record Plan

 

 

 

10/20/10

*

 

03

 

Existing Conditions/Demolition Plan

 

 

 

10/20/10

*

 

04

 

Site Layout Plan

 

 

 

10/27/10

*

 

05

 

Grading And Utility Plan

 

 

 

10/20/10

*

 

06

 

Post Construction Stormwater Management Plan

 

 

 

10/20/10

*

 

07

 

Post Const. Stormwater Mgmt Notes And Details

 

 

 

10/20/10

*

 

08

 

Eagleview Blvd. Construction Plan

 

 

 

10/27/10

*

 

09

 

Erosion And Sediment Control Plan

 

 

 

10/20/10

*

 

10

 

Erosion And Sediment Control Plan

 

 

 

10/20/10

*

 

11

 

Erosion And Sediment Control Notes And Details

 

 

 

10/20/10

*

 

12

 

Profile Sheet

 

 

 

10/20/10

*

 

13

 

Profile Sheet

 

 

 

10/20/10

*

 

14

 

Construction Details

 

 

 

10/20/10

*

 

15

 

Construction Details

 

 

 

10/20/10

*

 

16

 

Construction Details

 

 

 

10/20/10

*

 

17

 

Landscaping Plan

 

 

 

10/20/10

*

 

18

 

Lighting Plan

 

 

 

09/22/10

*

 

19

 

Vehicle Circulation Plan

 

 

 

10/27/10

ARCHITECTURAL — Prepared by Ballinger

 

 

 

 

*

 

CS

 

Cover Sheet

 

 

 

11/08/10

*

 

FR100

 

Fire Safety Diagrams

 

 

 

11/08/10

*

 

LS

 

Life Safety

 

 

 

11/08/10

*

 

A100

 

Area Plans

 

 

 

11/08/10

*

 

A101.1

 

Floor Plan/Core& Shell-Level 1

 

 

 

11/08/10

*

 

A101.2

 

Floor Plan/Core& Shell-Level 1

 

 

 

11/08/10

*

 

A101.3

 

Floor Plan/Core& Shell-Level 1

 

 

 

11/08/10

*

 

A102.1

 

Floor Plan/Core& Shell-Level 2

 

 

 

11/08/10

*

 

A102.2

 

Floor Plan/Core& Shell-Level 2

 

 

 

11/08/10

*

 

A102.3

 

Floor Plan/Core& Shell-Level 2

 

 

 

11/08/10

*

 

A102.4

 

Floor Plan/Core& Shell-Level 2

 

 

 

11/08/10

*

 

A103.1

 

Floor Plan/Core& Shell-Level 3

 

 

 

11/08/10

*

 

A103.2

 

Floor Plan/Core& Shell-Level 3

 

 

 

11/08/10

*

 

A103.3

 

Floor Plan/Core& Shell-Level 3

 

 

 

11/08/10

*

 

A103.4

 

Floor Plan/Core& Shell-Level 3

 

 

 

11/08/10

*

 

A104.1

 

Roof Plan

 

 

 

11/08/10

*

 

A104.2

 

Roof Plan

 

 

 

11/08/10

*

 

A104.3

 

Roof Plan

 

 

 

11/08/10

*

 

A104.4

 

Roof Plan

 

 

 

11/08/10

 

--------------------------------------------------------------------------------

 

*

 

A201

 

Enlarged Plans-Cores

 

 

 

11/08/10

*

 

A210

 

Stair 1 Enlarged Plans & Sections

 

 

 

11/08/10

*

 

A211

 

Stair 2Enlarged Plans & Sections

 

 

 

11/08/10

*

 

A213

 

Stair 4 Enlarged Plans & Sections

 

 

 

11/08/10

*

 

A214

 

Stair 5 Enlarged Plans & Sections

 

 

 

11/08/10

*

 

A215

 

Elevator Enlarged Plans, Sections &Details

 

 

 

11/08/10

*

 

A300

 

Exterior Elevations

 

 

 

11/08/10

*

 

A301

 

Exterior Elevations

 

 

 

11/08/10

*

 

A302

 

Exterior Elevations

 

 

 

11/08/10

*

 

A303

 

Exterior Elevations

 

 

 

11/08/10

*

 

A304

 

Exterior Elevations

 

 

 

11/08/10

*

 

A305

 

Exterior Elevations

 

 

 

11/08/10

*

 

A306

 

Exterior Elevations

 

 

 

11/08/10

*

 

A310

 

Building Sections

 

 

 

11/08/10

*

 

A311

 

Building Sections

 

 

 

11/08/10

*

 

A312

 

Building Sections

 

 

 

11/08/10

*

 

A401

 

Wall Systems

 

 

 

11/08/10

*

 

A402

 

Wall Systems

 

 

 

11/08/10

*

 

A403

 

Wall Systems

 

 

 

11/08/10

*

 

A404

 

Wall Systems

 

 

 

11/08/10

*

 

A405

 

Wall Systems

 

 

 

11/08/10

*

 

A406

 

Wall Systems

 

 

 

11/08/10

*

 

A407

 

Wall Systems

 

 

 

11/08/10

*

 

A601

 

Partition Schedule

 

 

 

11/08/10

*

 

A602

 

Door Schedule

 

 

 

11/08/10

*

 

A604

 

Finish Schedule

 

 

 

11/08/10

*

 

A701.1

 

Reflected Ceiling Plan -Level I

 

 

 

11/08/10

*

 

A701.2

 

Reflected Ceiling Plan- Level 1

 

 

 

11/08/10

*

 

A701.3

 

Reflected Ceiling Plan- Level 1

 

 

 

11/08/10

*

 

A702.1

 

Reflected Ceiling Plan -Level 2

 

 

 

11/08/10

*

 

A702.2

 

Reflected Ceiling Plan -Level 2

 

 

 

11/08/10

*

 

A702.3

 

Reflected Ceiling Plan -Level 2

 

 

 

11/08/10

*

 

A702.4

 

Reflected Ceiling Plan -Level 2

 

 

 

11/08/10

*

 

A703.1

 

Reflected Ceiling Plan -Level 3

 

 

 

11/08/10

*

 

A703.2

 

Reflected Ceiling Plan -Level 3

 

 

 

11/08/10

*

 

A703.3

 

Reflected Ceiling Plan -Level 3

 

 

 

11/08/10

*

 

A703.4

 

Reflected Ceiling Plan -Level 3

 

 

 

11/08/10

*

 

A801

 

Toilet Elevations

 

 

 

11/08/10

*

 

A802

 

Toilet Elevations

 

 

 

11/08/10

*

 

A803

 

Interior Elevations

 

 

 

11/08/10

STRUCTURAL — Prepared by Ballinger

 

 

 

 

*

 

S001

 

Structural Cover Sheet

 

 

 

11/08/10

*

 

S101.1

 

Foundation Plan-West Wing

 

 

 

11/08/10

*

 

S101.2

 

Foundation Plan-Connector

 

 

 

11/08/10

*

 

S101.3

 

Foundation Plan-East Wing

 

 

 

11/08/10

*

 

S101.4

 

Foundation Plan-East Wing

 

 

 

11/08/10

 

--------------------------------------------------------------------------------

 

*

 

S102.1

 

Level 2 Framing Plan-West Wing

 

 

 

11/08/10

*

 

S102.2

 

Level 2 Framing Plan-Connector

 

 

 

11/08/10

*

 

S103.1

 

Level 3 Framing Plan-West Wing

 

 

 

11/08/10

*

 

S103.2

 

Level 3 Framing Plan-Connector

 

 

 

11/08/10

*

 

S103.3

 

Level 3 Framing Plan-East Wing

 

 

 

11/08/10

*

 

S103.4

 

Level 3 Framing Plan-East Wing

 

 

 

11/08/10

*

 

S104.1

 

Flat Roof Framing Plan-West Wing

 

 

 

11/08/10

*

 

S104.2

 

Flat Roof Framing Plan-Connector

 

 

 

11/08/10

*

 

S104.3

 

Flat Roof Framing Plan-East Wing

 

 

 

11/08/10

*

 

S104.4

 

Flat Roof Framing Plan-East Wing

 

 

 

11/08/10

*

 

S105.1

 

Sloped Roof Framing Plan-West Wing

 

 

 

11/08/10

*

 

S105.2

 

Sloped Roof Framing Plan-Connector

 

 

 

11/08/10

*

 

S105.3

 

Sloped Roof Framing Plan-East Wing

 

 

 

11/08/10

*

 

S105.4

 

Sloped Roof Framing Plan-East Wing

 

 

 

11/08/10

*

 

S501

 

Typical Foundation Sections & Details

 

 

 

11/08/10

*

 

S502

 

Typical Foundation Sections & Details

 

 

 

11/08/10

*

 

S511

 

Typical Superstructure Sections & Details

 

 

 

11/08/10

*

 

S512

 

Typical Superstructure Details

 

 

 

11/08/10

*

 

S601

 

Column Schedule

 

 

 

11/08/10

*

 

S602

 

Column Schedule

 

 

 

11/08/10

 

--------------------------------------------------------------------------------

 

Memo

 

To:

Jim Fuller

 

 

From:

Keith Mock

 

 

CC:

Tom McHugh, Ron Street, Simon Tickell, Todd Drake

 

 

Date:

12/14/2010

 

 

Re:

West DD submission clarifications

 

Jim: Following is a written summary of clarifications to our Design Development
drawings dated 11/08/10. Each clarification is preceded by the specific drawing
sheet number.

 

FR100

The extent of fireproofing in the Lab wing is larger than necessary and exceeds
the required rating for the Core and Shell (C&S) scope. Only a one hour rating
is required and only the structural bays that support rated Core and Shell
elements need to carry an equivalent rating

 

 

FR110

Although this drawing references certain requirements to accommodate mixed use,
it is for informational purposes only and is not part of the C&S scope.

 

 

LS

Although this drawing references one hour rated enclosures for the two story
atrium space, there are in fact no rated enclosures required.

 

 

 

The number of lavatories shown exceed code requirements and will be reduced to
three per toilet room.

 

 

A100

Area takeoff quantities shown are preliminary and will be confirmed after design
is complete.

 

 

A101.1

The ground floor lunchroom door will be moved to the north to reduce required
paving in courtyard area.

 

 

A101.2

The extent of walk-off mat in vestibules on first floor will be extended to
reach the second set of doors

 

 

 

Elevator machine room sizes will be confirmed

 

 

 

Fire shutters that are shown are not in C&S scope and will be shown on the
Tenant Improvement (TI) drawings

 

 

 

A sidewalk will be added to the land development drawings to access the
mechanical area door.

 

 

A102.1

Final HVAC shaft sizes and locations will be coordinated with the MEP engineer.

 

 

 

Gypsum enclosures for columns are not in the C&S scope and will be shown on the
TI drawings.

 

1

--------------------------------------------------------------------------------

 

A102.2

C&S scope will include upgraded floor finishes to elevators on the entry level
only.

 

 

 

In order to achieve daylight, exterior views, and view of the stairways from
interior lobby out through the stair towers, Firelite rated glass will be
considered and after value engineering (VE), may have to be replaced with
another solution.

 

 

 

The main entry canopy and supplemental center stair are not shown on drawings.
The location and configuration of this stair is still under consideration.

 

 

A104.1

It has been determined that roof hatches on small flat roof areas will not be
required and that they will be removed from the drawings.

 

 

 

A detail for the peak of metal roof will be provided and reviewed for pricing
impact.

 

 

 

Details for roof drain overflow system will be coordinated with the MEP
engineer.

 

 

 

Once final mechanical unit locations are confirmed roof areas will be designed
with adequate positive flow around roof elements.

 

 

A201

The number of lavatories and a revised placement of toilet room accessories will
be considered.

 

 

 

We will consider reducing the number of service sinks in building to a number
adequate for custodial service.

 

 

 

The room labeled “support” will be combined into the electrical room area.

 

 

A210

The cost/value of intumescent paint for rated columns in stair towers is not in
C&S scope and may be replaced with a less expensive system subject to a V.E.
study.

 

 

 

Double doors at secondary stair towers are not in C&S scope. The cost of a
second door may be a TI item.

 

 

 

Since the roof hatches will be eliminated, the roof access ladders and cages
will likewise be eliminated.

 

 

 

The concrete shown on the roof above the stair towers will not be required.

 

 

A211

Terrazzo will not be accepted as a floor finish selection and another floor
material will be proposed.

 

 

A213

Coordination of architecture and structural elements will be achieved as part of
the redesign of the core entrance areas

 

 

A300

The use of shadow box detail at spandrel areas will be a VE issue and may have
to be replaced with a less expensive solution.

 

 

A301

The two sets of double doors out to courtyard will be replaced with one set of
doors.

 

 

A302

The roof slopes will be reviewed and possibly revised in order to reduce the
extent of vertical metal panel.

 

 

A304

The extent of handrail exterior exit for depressed slab area will be minimized.

 

 

A310

The use of shadow box detail and use of interior metal panel at curtain wall
will be reviewed as part of VE analysis and may be replaced with a less
expensive solution.

 

2

--------------------------------------------------------------------------------

 

 

Wood wall paneling shown in main lobby will be a T.I item and is not in C&S
scope.

 

 

A311

We will consider raising the ceiling height at each floor level within the
decorative stair towers.

 

 

A401

We will consider eliminating the metal coping on top of precast panels based on
the analysis of alternative systems.

 

 

 

Ice and water membrane under roof membrane will be eliminated.

 

 

 

The amount of roof insulation at R-20 may be revised based on LEED requirements.

 

 

 

We will consider revising the precast details to include a 1” high curb to
support all to avoid leaking.

 

 

 

The amount of shim space where PC meets floor slabs will be coordinated with the
precast contractor.

 

 

 

We will confirm that the 2’8” dimension above finished floor is to underside of
horizontal window mullion

 

 

 

We will confirm that perimeter column enclosures as drawn will provide enough
space for PC connections

 

 

 

We will study the use of the 2 piece extruded aluminum interior sill relative to
other more cost effective alternatives as part of VE.

 

 

 

We will consider alternative window frame finishes as part of V.E.

 

 

A402

We will confirm with the MEP engineer that the gutter detail is adequate.

 

 

A405

We will provide more detail for the metal panel at building overhang

 

 

 

We will coordinate PC details with the precast contractor relative to erection
procedures.

 

 

 

We will review the design concept where the PC patterns change

 

 

A406

Lobby millwork will be AWI grade “custom” instead of “premium”

 

 

A602

The height of toilet stall doors will be reduced from 8’ to 7’.

 

 

A701.1

The ceiling shown in the trash room is not in C&S scope and will be moved to the
T.I. drawings

 

 

A702.2

The material for the ceiling in the main vestibule may be a V.E. issue as it is
not part of C&S.

 

 

A702.4

The extent and need for GWB ceilings in secondary stair towers will be reduced
or eliminated.

 

 

A703.3

The GWB ceiling in the mother’s room and service elevator vestibule will be
changed to ACT.

 

 

A801

The amount (height) of CTW in toilet room walls may be a V.E. issue.

 

3

--------------------------------------------------------------------------------

 

A802

The laminate knee panel under the lavatories will be eliminated to be consistent
with other Hankin Group buildings.

 

4

--------------------------------------------------------------------------------

 

ATTACHMENT 3

 

PRELIMINARY BUDGET

 

--------------------------------------------------------------------------------

 

Budget Breakdown

 

Building SF

170,553

 

 

Line Items

 

Total

 

$/SF

 

01 General Requirements

 

$

1,833,520.00

 

$

10.75

 

02 Sitework

 

$

2,354,914.00

 

$

13.81

 

03 Concrete

 

$

2,271,511.00

 

$

13.32

 

04 Metals

 

$

4,032,493.00

 

$

23.64

 

06 Wood/Plastics

 

$

182,250.00

 

$

1.07

 

07 Thermal/Moisture

 

$

1,118,858.00

 

$

6.56

 

08 Doors/Windows

 

$

2,609,276.00

 

$

15.30

 

09 Finishes

 

$

1,050,000.00

 

$

6.16

 

10 Specialties

 

$

47,500.00

 

$

0.28

 

12 Furnishings

 

$

70,000.00

 

$

0.41

 

13 Special Construction

 

$

90,000.00

 

$

0.53

 

14 Conveying Systems

 

$

255,000.00

 

$

1.50

 

15 HVAC

 

$

3,900,000.00

 

$

22.87

 

15 Plumbing

 

$

719,835.00

 

$

4.22

 

15 Sprinkler

 

$

380,000.00

 

$

2.23

 

16 Electrical

 

$

1,762,384.00

 

$

10.33

 

17 Landscaping

 

$

803,500.00

 

$

4.71

 

 

 

 

 

 

 

Subtotal - Base Building Constructions Costs

 

$

23,481,041.00

 

$

137.68

 

 

 

 

 

 

 

Contractor Fee - 6%

 

$

1,408,862.46

 

$

8.26

 

 

 

 

 

 

 

Subtotal

 

$

24,889,903.46

 

$

145.94

 

 

 

 

 

 

 

00 Consultants - Architect & Engineering Fees

 

$

932,000.00

 

5.46

 

 

 

 

 

 

 

Subtotal

 

$

25,821,903.46

 

$

143.14

 

 

 

 

 

 

 

Contingency - 15%

 

$

3,873,285.52

 

$

21.47

 

 

 

 

 

 

 

Total

 

$

29,695,188.98

 

$

164.61

 

 

--------------------------------------------------------------------------------

 

ATTACHMENT 4

 

TI WORK PLANS

 

[TO BE PREPARED AND APPROVED PURSUANT TO SECTION 3(b)(iii) OF THIS WORK LETTER]

 

--------------------------------------------------------------------------------

 

ATTACHMENT 5

 

CONSTRUCTION MILESTONES

 

(1)                                  Erection of steel as required by the Base
Project Construction Documents — September 15, 2011

 

(2)                                  Building under roof, sealed and water-tight
— February 1, 2012

 

Exhibit F – 1

--------------------------------------------------------------------------------

 

EXHIBIT G

 

Project Conditions and Milestones

 

PART A:                                               PRELIMINARY CONDITIONS

 

1.                                       On or before April 30, 2011, Landlord
shall have acquired good and marketable fee simple title to the Additional Land
free and clear of all liens and encumbrances other than those set forth in
Part 2 of Attachment I.

 

2.                                       On or before January 31, 2011, Landlord
shall have obtained and delivered to Tenant four (4) copies of an ALTA/ACSM Land
Title Survey of the lands comprising the Land, reasonably satisfactory to Tenant
and to Tenant’s title insurer with respect to the boundaries and survey
conditions of or on the lands depicted thereon, certified to Tenant and to
Tenant’s title insurer in a manner reasonably satisfactory to them, and duly
sealed by the preparer thereof.

 

3.                                       Landlord has delivered to Tenant four
(4) copies of a written Phase I Environmental Assessment Report with respect to
the Land, and any Improvements thereon, and without any condition warranting, or
any recommendation for, any further investigation, testing or sampling; and
confirming that the author has, subject to the customary standards and
limitations contained in the Phase I Environmental Assessment, concluded
(a) that neither the Land nor any Adjoining Property is subject to any federal,
state or local “superfund” lien, proceedings, claim, liability or action for the
cleanup, removal or remediation of any Hazardous Substances, or with respect to
any air emissions, water discharges or noise emissions; (b) that neither the
Land nor any Adjoining Property contains any Hazardous Substances requiring
registration, remediation or other handling under any Environmental Laws; and
(c) that no underground or above-ground storage tanks are located on or within
the Land, and that no underground or above-ground storage tanks have formerly
been located on or within the Land or been removed from the Land.

 

4.                                       On or before April 30, 2011, Landlord
shall have obtained and delivered to Tenant an SNDA that satisfies the Tenant’s
SNDA Requirements in favor of Tenant from any Lender in existence as of
April 30, 2011, in the form approved by Tenant.

 

5.                                       On or before April 30, 2011, Tenant
shall be able to obtain, upon payment of the premium therefor at the regular
rate, a leasehold owner’s title insurance policy insuring Tenant’s title to the
leasehold estate created in favor of Tenant under this Lease, free and clear of
any liens, encumbrances and other exceptions other than the Permitted
Encumbrances insurable as such in an amount of not less than $15,000,000, by a
reputable title insurer selected by Tenant and pursuant to an ALTA form of
leasehold owner’s title insurance policy (which title insurance policy, if
desired by Tenant in its sole discretion, shall be obtained at Tenant’s
expense).

 

PART B:                                                 MILESTONES

 

1.                                       Prior to the Effective Date, Landlord
has made application to Uwchlan Township Planning Commission for Preliminary and
Final Subdivision and Land Development

 

Exhibit G – 1

--------------------------------------------------------------------------------

 

Plan Approval for (a) the subdivision authorizations required for the
establishment of the Land as a lawful, separate building lot (“Subdivision”),
and (b) the development of the Project on the Land (the “Development”).

 

2.                                       Prior to the Effective Date, Landlord
has made application to Uwchlan Township Board of Supervisors for Preliminary
and Final Subdivision and Land Development Plan Approval for the Subdivision and
the Development.

 

3.                                       Prior to the Effective Date, Landlord
has provided evidence reasonably acceptable to Tenant that Landlord (a) has
obtained a written commitment for a construction loan or line or lines of credit
from a reputable commercial or institutional lender, (which lines of credit may
be issued to an Affiliate of Landlord controlled by Guarantors), subject only to
usual and customary conditions precedent to funding (the “Project Loan”), and
(b) has sufficient cash which is unconditionally available for Landlord’s use,
which when taken together, shall be sufficient to fund the acquisition of the
Additional Property and reasonably anticipated Project Costs over the next
ensuing relevant six (6) month period as reasonably determined by Landlord and
approved by Tenant.

 

4.                                       On or before April 30, 2011, Landlord
shall have obtained, from Uwchlan Township Board of Supervisors, Preliminary and
Final Subdivision and Land Development Plan Approval for the Subdivision and the
Development.

 

5.                                       On or before June 30, 2011, Landlord
shall have obtained, from Uwchlan Township, a building permit authorizing the
construction of the Base Project Work and the construction of the Tenant
Improvements.

 

6.                                       On or before March 31, 2011, Landlord
shall have entered into the Base Project Construction Contract (as defined in
Section 2(d)(iii) of the Work Letter).

 

7.                                       On or before April 30, 2011, Landlord
shall have entered into the TI Construction Contract (as defined in
Section 3(e) of the Work Letter).

 

8.                                       On or before July 15, 2011, Landlord
shall have commenced construction of the Base Project Work.  “Commencement of
construction,” for purposes of satisfying this milestone, shall mean (a) all of
the preceding milestones shall have been satisfied and no condition shall exist
that renders any of such milestones unsatisfied, (b) Landlord shall have
obtained, in addition to a building permit from Uwchlan Township authorizing the
construction of the Base Project Work and Tenant Improvements, all other permits
and licenses required for excavation of the Land and for the commencement of
construction of the foundation for the Building; and all other material permits
are available to Landlord for the continuous prosecution of the Base Project
Work and the Tenant Improvements, subject to payment of requisite fees;
(c) Landlord shall have entered into the Base Project Construction Contract;
(d) Landlord shall have submitted its binding order for the purchase of steel
for the structural framework of the Building, together with all deposits or
prepayments required for the initiation of the fabrication thereof; (e) the
Landlord’s Contractor shall have mobilized on the Land for the purpose of
commencing and continuously prosecuting the construction of the Base Project
Work and Tenant Improvements;

 

Exhibit G – 2

--------------------------------------------------------------------------------

 

(f) there shall exist no stay, order or other prohibition upon the commencement
and continuous prosecution of the Base Project Work and Tenant Improvements, and
(g) there shall exist no condition of or affecting the Land or the work to be
performed by Landlord hereunder (including without limitation any event of Force
Majeure), that shall preclude or materially impair the ability of Landlord and
Landlord’s Contractors from commencing and continuously prosecuting the
construction of the Base Project Work and Tenant Improvements.

 

Exhibit G – 3

--------------------------------------------------------------------------------

 

EXHIBIT H

 

Basic Rent Calculation

 

1.                                       Basic Rent shall equal the product of
the Project Costs multiplied by the Lease Constant (as determined below).

 

2.                                       The Lease Constant shall be the factor
that is applied to the Project Cost to determine the Basic Rent for the first
lease year and shall be the greater of 9.30% and the factor calculated as
follows:

 

(a)                                  The component of the Lease Constant for the
Land Costs, Soft Costs and Construction Costs, excluding the Improvement
Allowance, shall be the factor (calculated at the beginning of period, on the
basis of twelve (12) monthly payments per year) needed to fully amortize a loan
with a term of twenty-five (25) years and an interest rate which is four hundred
(400) basis points above the interest rate paid for ten (10) year U.S. Treasury
bonds at the auction for such bonds which immediately precedes the commencement
of construction as evidenced by the issuance of the Foundation Permit (as
defined in Section 43(a)).

 

(b)                                 The component of the Lease Constant for the
Improvement Allowance (to the extent used by Tenant) shall be the factor
(calculated at the beginning of period, on the basis of twelve (12) monthly
payments per year) needed to fully amortize a loan with a term of fifteen (15)
years and an interest rate which is four hundred fifty (450) basis points above
the interest rate paid for ten (10) year U.S. Treasury bonds at the auction for
such bonds which immediately precedes the commencement of construction as
evidenced by the issuance of a building permit.

 

3.                                       The components of the first lease year
Lease Constant in (a) and (b) above will be combined on a weighted average basis
as follows: (i) the percentage resulting from dividing the Land Costs, plus Soft
Costs, plus Construction Costs, excluding the Improvement Allowance, by the
total Project Cost will be multiplied by the Lease Constant in (a) above and
such product will be added to (ii) the percentage resulting from dividing the
Improvement Allowance (to the extent used by Tenant) by the total Project Cost
multiplied by the Lease Constant in (b) above.

 

4.                                       The combined Lease constants in (i) and
(ii) above will yield a single blended Lease Constant which when multiplied by
the total Project Cost will yield the Basic Rent for the first lease year
(subject to the 9.30% minimum).

 

5.                                       Once Substantial Completion of the Base
Project Work/Laboratory Work has been achieved, no additional costs and expenses
incurred thereafter shall be included in Project Costs for purposes of this
calculation other than (a) the Improvement Allowance, to the extent drawn by
Tenant, (b) Construction Period Interest (but in no event shall Construction
Period Interest accrue after the Commencement Date, and if the Commencement Date
is delayed due to a Landlord Delay (as defined in Section 4(d)(iv) of the Work
Letter), then Construction Period Interest shall cease to accrue as of the date
on which the Commencement Date would

 

Exhibit H – 1

--------------------------------------------------------------------------------

 

have occurred but for the Landlord Delay), (c) brokerage commissions, (d) Soft
Costs incurred in connection with obtaining certificates of occupancy, and
(e) Project Costs directly associated with any deferred items of the Base
Project Work or Laboratory Work that Landlord has elected to defer in accordance
with the Work Letter until after Substantial Completion of the Base
Project/Laboratory Work.

 

6.                                       An example of this calculation of Basic
Rent is set forth on Schedule A attached to this Exhibit H.

 

Exhibit H – 2

--------------------------------------------------------------------------------

 

SCHEDULE A

 

Hypothetical Rent Calculation

 

A

 

Building Square Footage - Rentable Square Feet (RSF)

 

 

 

 

 

170,000

 

 

 

B

 

Assumed Base Building Construction Costs

 

 

 

$

137.68

 

 

 

$

23,405,600

 

C

 

Tenant Improvement (TI) Allowance

 

 

 

$

45.00

 

 

 

$

7,650,000

 

D

 

Total Base Building Construction Costs & TI Allowance

 

B+C

 

$

182.68

 

 

 

$

31,055,600

 

E

 

General Contractors (GC) Fee on Base Building

 

 

 

 

 

6.00

%

 

 

F

 

General Contractors Fee Amount

 

D*E

 

$

10.96

 

 

 

$

1,863,336

 

G

 

Total Base Building Construction Costs, TI Allowance * GC Fee

 

D+F

 

$

193.64

 

 

 

$

32,918,936

 

H

 

Base Building Architect & Engineer Fees

 

 

 

$

5.46

 

 

 

$

928,200

 

I

 

Assumed Construction Period Interest Costs

 

 

 

$

8.72

 

 

 

$

1,482,400

 

J

 

Assumed Commission Costs

 

 

 

$

14.20

 

 

 

$

2,414,000

 

K

 

Land Costs

 

 

 

$

31.40

 

 

 

$

5,338,500

 

L

 

Total Project Costs

 

(G+H+l+J+K)

 

$

253.42

 

 

 

$

43,082,036

 

M

 

Lease Constant (Greater of Blended or Floor Gets Applied to Project Costs)

 

 

 

 

 

9.30

%

 

 

N

 

Blended Lease Constant (see below

 

8.93%

 

 

 

 

 

 

 

O

 

Floor Lease Constant

 

9.30%

 

 

 

 

 

 

 

P

 

First Year NNN Rent

 

L*M

 

$

23.57

 

 

 

$

4,006,629

 

 

Blended Lease Constant Calculation

 

 

 

Total Land
Cost, Soft Cost, and
Construction Costs

 

 

 

Tenant Improvement
Allowance

 

% of Total Costs

 

 

 

82

%

 

 

18

%

 

 

 

 

$

208.42

 

 

 

$

45.00

 

10-Year Treasury Rate As of: 12/1/10(1)

 

 

 

2.97

%

 

 

2.97

%

Rate Term

 

 

 

25

 

 

 

15

 

Basis Points over Treasuries

 

 

 

400

 

 

 

450

 

Debt Constant

 

 

 

6.97

%

 

 

7.47

%

Amort Period

 

 

 

25

 

 

 

15

 

Payment Amount

 

 

 

$

17.63

 

 

 

$

5.00

 

Loan Constant

 

 

 

8.46

%

 

 

11.10

%

Blended Lease Constant

 

 

 

 

 

8.93%

 

 

 

 

--------------------------------------------------------------------------------

(1) For purposes of rent calculation, model assumes West draws entire $45 TI
Allowance

 

(2) Treasury Rate is based on the 10 year Treasury Rate as quoted by the US
Treasury. The link to the US Treasury website which posts a daily rate sheet is
http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml.

 

--------------------------------------------------------------------------------

 

EXHIBIT I

 

Fair Market Rental Value Determination

 

Fair Market Rental Value shall be determined in the following manner.

 

Landlord and Tenant shall attempt to negotiate the Fair Market Rental Value.  If
Landlord and Tenant fail to agree upon the Fair Market Rental Value within
thirty (30) days of Landlord’s receipt of Tenant’s Notice, then within ten
(10) days thereafter, Landlord shall notify Tenant of Landlord’s designated
appraiser, specifying its name and address.  Landlord shall instruct its
appraiser to prepare an appraisal report adhering to the guidelines set forth
herein.  Within thirty (30) days after Landlord selects its appraiser, Landlord
shall send Notice to notify Tenant of the Fair Market Rental Value determined by
Landlord’s appraiser along with such appraiser’s appraisal report.  Tenant shall
then have twenty (20) days to dispute such determination and to select its own
appraiser.  If Tenant fails to select its appraiser within such twenty (20) day
period and to Notify Landlord of such selection, the determination of Landlord’s
appraiser shall constitute such Fair Market Rental Value.  Tenant shall instruct
its appraiser to prepare an appraisal report adhering to the guidelines set
forth herein.  Within thirty (30) days after Tenant selects its appraiser,
Tenant shall notify Landlord of the Fair Market Rental Value determined by
Tenant’s appraiser, along with such appraiser’s appraisal report. Within ten
(10) days of Landlord’s receipt of Tenant’s appraiser’s appraisal report, the
two appraisers shall meet over a period of twenty (20) days and attempt to agree
as to the Fair Market Rental Value for the Leased Property.  If such appraisers
are unable to agree as to such Fair Market Rental Value within such twenty (20)
day period then:  (i) if the difference between the two determinations is less
than ten percent (10%) of the lower determination, then the average of the two
determinations shall be deemed to constitute the Fair Market Rental Value; or
(ii) if the difference between the two determinations is equal to or greater
than ten percent (10%) of the lower determination, then the two appraisers shall
immediately select a third independent MAI appraiser, which appraiser shall
select which of the determinations of the first two appraisers shall constitute
the Fair Market Rental Value.  If the two appraisers fail to agree upon the
designation of such third appraiser within five (5) days after such twenty (20)
day period, they or either of them shall Notify Landlord and Tenant of such
failure and if Landlord and Tenant fail to agree on the third appraiser within
five (5) days after receipt of such Notice, then either Landlord or Tenant on
behalf of both may apply to the American Arbitration Association or any
successor thereto, or on its failure, refusal or inability to act, to a court of
competent jurisdiction, for the designation of such third appraiser.  Such third
appraiser may not vary or modify the determinations of the appraisers selected
by Landlord and Tenant.

 

All appraisers shall base their determination of Fair Market Rent Value on the
then prevailing market rate for new (not renewal) leases for a comparable term
and comparable space taking into account all relevant factors including
prevailing concessions being offered tenants in the relevant market.  Tenant
shall receive either (x) a market concession package for new comparable leases
(including tenant improvement allowance, a free rent or build-out period, and
other concessions then given in the relevant market), or (y) a rent reduction
from the determined Fair Market Rental Value equal to the payment necessary to
amortize the value of such concessions at 8% over the applicable Renewal Term. 
If relevant market comparables for new

 

Exhibit I – 1

--------------------------------------------------------------------------------

 

leases are only for leases having a term greater or lesser than the length of
the applicable Renewal Term, then the concessions provided to Tenant shall be
equitably adjusted to take such difference in term into account.

 

All appraisers shall be independent MAI real estate appraisers who shall have
had at least fifteen (15) years’ continuous experience in the business of
appraising real estate in the metropolitan area in which the Leased Property is
located.

 

The appraisers may not amend, modify or vary any of the terms of this Lease, and
the determination of the appraisers, as provided above, shall be conclusive upon
Landlord and Tenant and shall have the same force and effect as a judgment made
in a court of competent jurisdiction.

 

Each Party shall pay the fees and expenses of the appraiser selected by it and
its own counsel fees and one-half (1/2) of all other expenses and fees of any
such third appraiser.

 

If for any reason the Fair Market Rental Value has not been determined by the
date on which it shall become effective, then, until such Fair Market Rental
Value has been determined in accordance herewith, the Fair Market Rental Value
shall be deemed to be the Basic Rent last paid under this Lease, and there shall
be an adjustment of Basic Rent promptly after determination of Fair Market
Rental Value in accordance with this Exhibit I.

 

Exhibit I – 2

--------------------------------------------------------------------------------

 

EXHIBIT J

 

Form of Subordination, Non-Disturbance and Attornment Agreement

 

THIS AGREEMENT made this          day                            of 200  , by
and among                                                             , a
Pennsylvania limited partnership (hereinafter called “Landlord”), with an office
at                                                          and WEST
PHARMACEUTICAL SERVICES, INC., a Pennsylvania corporation (hereinafter called
“Tenant”), with an office at
                                                                                    ,
and
                                                                              ,
a                                                                         
(hereinafter called “Mortgagee”) with an office at
                                                                        ,
                                                                                  .

 

WITNESSETH:

 

WHEREAS, Tenant has entered into a certain lease (the “Lease”) dated
December       , 2010 with                                  (the “Landlord”) of
certain land and building commonly known as                      (the
“Building”).  The leased property described in the Lease as hereinafter referred
to as the Premises;

 

WHEREAS, a Memorandum of Lease dated                                  by and
between Tenant and Landlord regarding the Lease is recorded with the Chester
County Registry of Deeds in Book               , Page                 ; and

 

WHEREAS, Mortgagee has made a loan to Landlord, which loan is secured by a
mortgage and security agreement dated                       , (the “Mortgage”)
to be recorded with and an assignment of leases and rents dated
                , (the “Assignment”) to be recorded with said Registry both with
respect to the Premises.

 

NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00) paid
by each of the parties to the other, receipt whereof is hereby acknowledged, for
and in consideration of the mutual covenants herein made, the parties agree as
follows:

 

1.                                       The Lease and the rights of Tenant
thereunder are and shall at all times be subject and subordinate in all respects
to the provisions and lien of the Mortgage and to all renewals, modifications,
consolidations, replacements and extensions thereof to the full extent of the
principal sum secured thereby and interest thereon, and the lien of the Mortgage
is and shall at all times be made prior in lien to the Lease, with the same
force and effect as if the Lease had been executed and delivered after the
execution, delivery and recording of the Mortgage.  Provided, however, that the
foregoing subordination provision shall not be deemed or construed as limiting
Tenant’s rights under the Lease and/or Landlord’s obligations thereunder,
including without limitation, the use of insurance proceeds and condemnation
awards, and notwithstanding any inconsistent provisions of the Mortgage with
respect thereto, such proceeds and awards shall be applied as set forth in the
Lease.

 

2.                                       Mortgagee agrees that Tenant shall not
be named or joined as a party defendant in any action, suit or proceeding which
may be instituted by Mortgagee to foreclose or

 

Exhibit J – 1

--------------------------------------------------------------------------------

 

seek other remedies under the Mortgage or the Assignment by reason of a default
or event of default under the Mortgage or the Assignment, unless applicable law
requires Tenant to be made a party thereto as a condition to Mortgagee’s
proceeding against Landlord or prosecuting such rights and remedies.

 

3.                                       Mortgagee further agrees that, in the
event of any entry by Mortgagee pursuant to the Mortgage, a foreclosure of the
Mortgage, or the exercise by Mortgagee of any of its rights under the Mortgage
or Assignment and so long as Tenant is not in default beyond any applicable
grace period of any term, covenant or condition of the Lease, where such default
would give Landlord the right to terminate the Lease, (a) the Lease shall not be
terminated by Mortgagee or any successor landlord, (b) Tenant’s use, possession
or enjoyment of the Premises or any other right, option or privilege of Tenant
under the Lease shall not be interfered with, diminished or disturbed by
Mortgagee or any successor landlord, (c) the leasehold estate granted by the
Lease shall not be adversely affected by Mortgagee or any successor landlord, to
the fullest extent permitted under applicable law, in any other manner, in any
foreclosure or any action or proceeding instituted under or in connection with
the Mortgage or in case the Mortgagee takes possession of the Premises pursuant
to any provisions of the Mortgage, (d) any insurance proceeds or condemnation
awards shall be disbursed in accordance with the Lease, and (e) Mortgagee shall
be bound by and comply with any and all of Landlord’s obligations under the
Lease related in any way to construction (or delays in construction) of the
Premises, the Building and the parking areas and other site improvements,
including, without limitation, funding any and all tenant improvement
allowances, completing the Base Project Work and TI Work (as defined in the Work
Letter made a part of the Lease) and otherwise complying with all terms and
conditions set forth in the Work Letter.

 

4.                                       Tenant agrees that, in the event of a
foreclosure of the Mortgage by Mortgagee, the acceptance of a deed in lieu of
foreclosure by Mortgagee, or Mortgagee’s exercise of any of its rights under the
Mortgage or Assignment, Tenant will attorn to and recognize Mortgagee as its
landlord under the Lease for the remainder of the term of the Lease (including
all extension periods which have been or are hereafter exercised) upon the same
terms and conditions as are set forth in the Lease, and Tenant hereby agrees to
perform all of the obligations of Tenant pursuant to the Lease.

 

5.                                       Tenant agrees that, in the event
Mortgagee succeeds to the interest of Landlord under the Lease:

 

(a)                                  Mortgagee shall not be liable in damages
for any act or omission of any prior landlord (including Landlord) that occurred
before the date on which Mortgagee or such purchaser succeeded to the interest
of Landlord under the Lease (the “Succession Date”) except to the extent that
(i) such action or omission continues after the Succession Date and
(ii) Mortgagee or such purchaser receives notice of such action or omission;

 

(b)                                 Mortgagee shall not be liable for the return
of any security deposit unless such security deposit is actually received by
Mortgagee;

 

Exhibit J – 2

--------------------------------------------------------------------------------

 

(c)                                  Mortgagee shall not be bound by any rent or
additional rent which Tenant might have prepaid for more than one (1) month in
advance under the Lease (unless so required under the Lease);

 

(d)                                 Mortgagee shall not be bound by any
amendments or modifications of the Lease which has the effect of reducing rent,
decreasing the term or canceling the Lease prior to its expiration except as a
result of either the exercise of a right to terminate as set forth in the Lease
or as provided by law, or as a result of a default of Landlord made without the
consent of Mortgagee; and

 

(e)                                  Mortgagee shall not be subject to any
offsets or defenses which Tenant might have against any prior landlord
(including Landlord) except in cases where Tenant has given Mortgagee written
notice of the event or circumstances giving rise to such damages, offsets or
defenses and the same period of time to cure as is provided to Landlord under
the Lease.

 

6.                                       Mortgagee hereby approves of, and
consents to, the Lease. Notwithstanding anything to the contrary contained in
the Mortgage, Tenant shall be entitled to use and occupy the Premises and
exercise all its rights under the Lease, and the Lease and Landlord’s and
Tenant’s performance thereunder shall not constitute a default under the
Mortgage or Assignment.  Tenant agrees to give Mortgagee a copy of any notice of
default under the Lease served upon Landlord at the same time as such notice is
given to Landlord.

 

7.                                       The terms and provisions of this
agreement shall be automatic and self operative without execution of any further
instruments on the part of any of the parties hereto.  Without limiting the
foregoing, Mortgagee and Tenant agree, within thirty (30) days after request
therefor by the other party, to execute an instrument in confirmation of the
foregoing provisions, in form and substance reasonably satisfactory to Mortgagee
and Tenant, pursuant to which the parties shall acknowledge the continued
effectiveness of the Lease in the event of such foreclosure or other exercise of
rights.

 

8.                                       Any notice to be delivered hereunder
shall be in writing and shall be sent registered or certified mail, return
receipt requested, postage prepaid, or overnight delivery by overnight courier
which delivers only upon signed receipt of the addressee, or its agent.  The
time of the giving of any notice shall be the time of receipt thereof by the
addressee or any agent of the addressee, except that in the event that the
addressee shall refuse to receive any notice, or there shall be no person
available (during normal business hours) to receive such notice, the time of
giving notice shall be deemed to be the time of such refusal or attempted
delivery as the case may be.  All notices addressed to Mortgagee or Tenant, as
the case may be, shall be delivered to the respective addresses first set forth
above, or such other addresses as they may hereafter specify by written notice
delivered in accordance herewith.

 

9.                                       The term “Mortgagee” as used herein
includes any direct or more remote successor or assign of the named Mortgagee
herein, including without limitation, any purchaser at a foreclosure sale, and
any successor or assign thereof, and the term “Tenant” as used herein includes
any direct or more remote successor and assign of the named Tenant herein.

 

Exhibit J – 3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be properly
executed and sealed as of the day and year first above written.

 

LANDLORD:

 

 

 

 

 

                                                          , a Pennsylvania
limited partnership, by its sole general partner:

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

MORTGAGEE:

 

 

 

 

,

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

WEST PHARMACEUTICAL SERVICES, INC.,

 

a Pennsylvania corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Exhibit J – 4

--------------------------------------------------------------------------------

 

COMMONWEALTH OF PENNSYLVANIA

:

 

:  ss

COUNTY OF

:

 

On this, the        day of                           , 20      , before me a
Notary Public in and for the Commonwealth and County aforesaid, personally
appeared                               , who acknowledged himself to be the
                             of                                   -, a
Pennsylvania                                   , the sole general partner of
                                                      -, a Pennsylvania limited
partnership, and that as such partner being authorized to do so, executed the
foregoing instrument for the purposes therein contained, by signing the name of
the partnership.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

 

 

 

 

Notary Public

 

 

 

My Commission Expires

 

Exhibit J – 5

--------------------------------------------------------------------------------

 

COMMONWEALTH OF PENNSYLVANIA

:

 

:  ss

COUNTY OF

:

 

On this, the        day of                           , 2008, before me a Notary
Public in and for the Commonwealth and County aforesaid, personally appeared
                                  , who acknowledged himself to be a
                                           of
                                                                                          ,
a                                                and as such officer authorized
to do so, executed the foregoing instrument for the purposes therein contained,
by signing the name of the partnership.

 

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

 

 

 

 

Notary Public

 

 

 

My Commission Expires

 

 

 

COMMONWEALTH OF PENNSYLVANIA

:

 

:  ss

COUNTY OF

:

 

On this, the          day of                     , 2008, before me, a Notary
Public in and for the Commonwealth of Pennsylvania personally appeared
                                  , who acknowledged himself/herself to be the
                             of WEST PHARMACEUTICAL SERVICES, INC., a
Pennsylvania corporation, and that he/she as such officer being authorized to do
so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation, by himself/herself as such officer.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

Notary Public

 

 

 

My Commission Expires

 

Exhibit J – 6

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Exhibit A

 

Legal Description

 

Exhibit J – 7

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EXHIBIT K

 

Environmental Reports

 

1.                                       Phase I Environmental Site Assessment
for Eagleview Corporate Center, Tax Map Parcels # 33-001-0011.02 $ 33-004-0011 —
Lots 19 & 40, Regency Drive, Uwchlan Township, Chester County, Pennsylvania,
dated September 30, 2010 and prepared by Marathon Engineering and Environmental
Services, Inc.

 

Exhibit K – 1

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EXHIBIT L

 

Cleaning Specifications

 

Exhibit L – 1

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WEST LEASE
EXHIBIT L

 

November 19, 2010

 

CLEANING SPECIFICATIONS

 

OFFICE AREAS

 

Daily

 

1.              Empty and clean all wastebaskets and trash receptacles.

2.              Remove all finger marks from private entrance doors, light
switches, doorways and tenant nameplates.

3.              Give special attention to executive areas, conference rooms and
reception areas.

4.              Vacuum all carpeted areas.

5.              Marble floors to be damp mopped.

6.              Wash, clean and disinfect water fountains and/or coolers. Give
special attention to adjacent floor areas.

7.              Spot clean carpet as needed.

8.              High dust all horizontal surfaces within reach of the average
person (door frames, partitions, ledges, etc.)

9.              Spot clean all walls around kitchen and disposal area.

10.       Clean glass In windows and doors in all areas, as needed.

11.       Dust and remove all smudges from conference room tables.

12.       Collect and place all refuse and rubbish in a designated trash
dumpster for the building.

13.       All boxes that are trash are to be broken down.

14.       Janitor’s closet will be kept in a neat and clean condition.

15.       Upon completion of cleaning of each office, all lights will be turned
off, unless otherwise notified and all doors locked.

 

Weekly

 

1.               Hand dust all office furniture to include desks, chairs, file
cabinets, tables, telephones, pictures, frames, etc.

2.               Dust all windowsills and ledges

 

LOBBY AREA

 

Daily

 

1.               Vacuum all entrance mats.

3.               Vacuum all carpets in hallway.

4.               Clean glass entrance doors.

5.               Sweep walks in front of entrance doors.

6.               Sweep and damp mop entire lobby area (Marble tile to be damp
mopped only)

7.     Clean and polish all metal surfaces to include front entrance doors.

8.     Dust all window ledges, sills and potted plants.

9.     Empty trash receptacles.

10.   Keep lobby in a thoroughly clean condition at all times.

 

--------------------------------------------------------------------------------

 

RESTROOMS

 

Daily

 

1.               Sweep and wet mop all restroom floors using proper
disinfectant.

2.               Wash and sanitize all file walls and dividing partitions. Give
special attention to file walls surrounding urinals.

3.               Wash and disinfect all toilet seats - both sides

4.               Wash and disinfect all basins, bowls and urinals, including
undersides.

5.               Wash and polish all mirrors, counter tops, shelves, bright work
and enamel surfaces, including plumbing equipment.

6.               Wash and polish all stainless steel fixtures.

7.               Fill all toilet tissue, towel, soap and sanitary dispensers
with supplies.

8.               Empty sanitary napkin receptacles and trash receptacles.

9.               Collect and place all rubbish in the designated trash dumpster
for the building.

 

Weekly

 

1.               Clean and dust all ceiling vents, exhaust fans, light fixtures
and high areas.

 

Monthly

 

1.     Machine scrub all bathroom floors

2.     Machine buff all file floors

 

Every Three Months

 

1.               Strip and rewax all VCT file flooring

 

WINDOW CLEANING

 

Daily

 

1.     Clean inside glass partitions, as needed

2.     Clean entrance door glass

 

Weekly

 

1.     Clean lobby glass

 

CLOSING INSTRUCTIONS

 

Daily

 

1.     Arrange furniture

2.     Clean janitorial closet

3.     Turn on night-lights

4.     Lock all doors and secure building

 

--------------------------------------------------------------------------------

 

EXHIBIT M

 

Form of Memorandum of Lease

 

Prepared by and return to:

 

Edward J. Hollin

Riley Riper Hollin & Colagreco

717 Constitution Drive

Exton PA 19341

UPI Nos.  33-4-11.3 and 33-4-11.4

 

MEMORANDUM OF LEASE

 

This Memorandum of Lease is made as of the        day
of                                , 20      by and between 530 REGENCY DRIVE
ASSOCIATES, L.P. (“Landlord”) having an address at 707 Eagleview Boulevard,
Exton, PA  19341 and , WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania
corporation or its nominee (“Tenant”) having an address at 101 Gordon Drive,
Lionville, Pennsylvania, 19341.

 

1.                                       Landlord and Tenant have entered into a
lease dated                             (the “Lease”) for land and improvements
to be erected thereon, which land is more fully described on Exhibit A attached
hereto (the “Leased Property”).

 

2.                                       The Lease sets forth the above names
and addresses of the parties thereto.

 

3.                                       The Lease sets forth the Commencement
Date to be the later to occur of (i) January 16, 2013, and (ii) thirty (30) days
after Substantial Completion of the Project under the terms of the Work Letter,
as each such term is defined in the Lease.

 

4.                                       The Lease has a term of  fifteen (15)
years, with options to renew for up to an aggregate of an additional ten
(10) years.

 

5.                                       The Lease contains an option to
purchase of the Leased Property which expires if not exercised on or before the
date which is the later to occur of (i) ten (10) days after the date that Tenant
receives a copy of the first building permit authorizing the construction of the
foundation portion of the Base Project Work (as defined in the Lease), or a copy
of a written valid authorization issued by Uwchlan Township which is the
functional equivalent of a building permit authorizing the construction of the
foundation, and (ii) twenty (20) days after Tenant receives Notice from Landlord
that Landlord intends to obtain (and has a good faith reason to believe that it
will obtain) the first building permit authorizing construction of the Base
Project Work within thirty (30) days of the date of such Notice.

 

6.                                       This Memorandum of Lease is meant for
recording purposes only and in no manner shall amend or modify the Lease.

 

Exhibit M – 1

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IN WITNESS WHEREOF, the parties hereto intending to be legally bound hereby have
caused this Memorandum of Lease to be executed as of the date first written
above, for the purpose of providing an instrument for recording.

 

 

LANDLORD:

 

 

 

530 Regency Drive Associates, L.P., a Pennsylvania limited partnership

 

 

 

BY:

530 Regency Drive GP, Inc., its general partner

 

 

 

 

 

By:

 

 

 

Robert S. Hankin, President

 

 

 

 

 

TENANT:

 

 

 

WEST PHARMACEUTICAL SERVICES, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Attest:

 

 

Name:

 

 

Title:

 

 

Exhibit M – 2

--------------------------------------------------------------------------------

 

COMMONWEALTH OF PENNSYLVANIA

:

 

: ss

COUNTY OF

:

 

On this             day of                                         20     ,
before me, a Notary Public, personally appeared Robert S. Hankin, who being
first duly sworn acknowledged himself to be the President of 530 Regency Drive
GP, Inc., the general partner of 530 Regency Drive Associates, L.P., a limited
partnership, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained by signing the name
of the general partner by himself as an officer thereof.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

Notary Public

 

My Commission Expires:

 

 

 

COMMONWEALTH OF PENNSYLVANIA

:

 

: ss

COUNTY OF

:

 

On this            day of                                        20    , before
me, a Notary Public, personally appeared                                       ,
who being first duly sworn acknowledged himself to be the
                             of West Pharmaceutical Services, Inc., a
corporation, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained by signing the name
of the corporation by himself as an officer thereof.

 

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

 

 

 

 

Notary Public

 

My Commission Expires:

 

Exhibit M – 3

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EXHIBIT N

 

Intentionally Omitted

 

Exhibit N – 1

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EXHIBIT O

 

Form of Landlord’s Waiver

 

LANDLORD’S WAIVER

 

The undersigned,
                                                                    
(“Landlord”), owner of the Real Property located at
                                                           in
                               Township,                                   
County,                                              (“Real Property”), a
portion of which is leased to
                                                           (“Tenant”) pursuant
to that certain lease dated                                         , 20      
(the “Lease”), in consideration of the sum of One Dollar ($1.00) and other good
and valuable consideration, and at Tenant’s request, hereby agrees that no lien
or claim shall be asserted by Landlord against any of the property described on
Exhibit “A” attached hereto and made part hereof (“Subject Property”) which
shall be superior in claim or lien priority to any duly perfected security
interest of
                                                                                                                                    
(“Lender”).

 

Landlord expressly reserves the right to make any claims and to assert and
enforce any liens against Tenant, generally or against the property of Tenant,
provided that, to the extent any such property is Subject Property, Landlord’s
claim of lien priority shall be junior to that of Lender.

 

Landlord agrees that Lender may enter upon the Real Property at any reasonable
time to take possession of and remove the Subject Property from the Real
Property, provided that Lender shall indemnify, defend and hold harmless
Landlord from (a) any and all claims and actions of Tenant and all expenses
incurred by Landlord in connection therewith and (b) any and all claims,
actions, damages, liabilities and expenses in connection with bodily injury or
property damage occasioned by Lender’s entry on the Real Property and/or removal
of the Subject Property. Lender agrees to reimburse Landlord for the costs of
repair for any damage done to the Real Property as a result of such entry and/or
removal within thirty (30) days following Landlord’s demand therefor.

 

In the event the Real Property is vacated by Tenant, Landlord shall incur no
liability by reason of Landlord’s action or inaction with respect to the Subject
Property, and, within sixty (60) days following Notice from Landlord, Lender
shall remove all Subject Property from the Real Property and shall release its
security interest of record, if applicable.  If within such sixty (60) day
period Lender fails to (a) remove the Subject Property or notify Landlord in
writing that Lender has abandoned such property and (b) release its security
interest of record, if applicable, then thereafter, (i) Landlord’s liens or
claims against the Subject Property shall be superior to those of Lender, and
(ii) Landlord may remove the Subject Property and Lender shall reimburse
Landlord, within thirty (30) days following Landlord’s demand, for the costs of
such removal, any repairs occasioned by such removal and reasonable storage
costs for the Subject Property.

 

Exhibit O – 1

--------------------------------------------------------------------------------

 

In the event of Lender’s refusal in accordance with the foregoing to pay
Landlord or to release its security interest of record, if applicable, all legal
expenses incurred by Landlord in enforcing its rights hereunder shall be paid
for by Lender.

 

This Landlord’s Waiver shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.

 

This Landlord’s Waiver shall be void and of no legal effect unless, within ten
(10) days after the date it has been signed by Landlord, (a) Tenant acknowledges
its agreement with the foregoing by signing this Landlord’s Waiver, (b) Lender
signs this Landlord’s Waiver and completes the space provided below for Lender’s
mailing address for notices, and (c) a fully signed and dated original hereof is
delivered to Landlord at
                                                                               .

 

Exhibit O – 2

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this document to be duly signed on the dates set forth opposite
their respective signatures.

 

 

LANDLORD:

 

 

 

 

Date:

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

LENDER:

 

 

 

 

 

 

 

 

Date:

 

 

By

 

 

 

Name:

 

 

Title:

 

 

 

 

Lender’s mailing address for notices is:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TENANT:

 

 

 

 

 

 

 

 

 

 

Date:

 

 

By:

 

 

 

Name:

 

 

Title:

 

(Detailed list of Subject Property to be attached)

 

Exhibit O – 3

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EXHIBIT P

 

Map of ROFO Area

 

Exhibit P – 1

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[g241561ke51i001.jpg]

 

--------------------------------------------------------------------------------

 

EXHIBIT Q

 

Industrial Waste Discharge Rider

 

Exhibit P – 1

--------------------------------------------------------------------------------

 

RIDER TO LEASE OR AGREEMENT OF SALE
REGARDING INDUSTRIAL WASTE DISCHARGE
WITHIN EAGLEVIEW CORPORATE CENTER

 

BACKGROUND

 

Eagleview Corporate Center Association (“Association”) owns a wastewater
treatment facility known as the Eagleview Wastewater Treatment Facility (the
“EWTF”). The association entered into an agreement (“Treatment Agreement”) with
Uwchlan Township (collectively the “Municipality”) for the treatment of
wastewater generated within the drainage basin of the EWTF.

 

The Treatment Agreement requires the Association to establish uniform
acceptability standards for waste discharges to the EWTF and stipulates that no
connection for waste discharge other than sanitary sewage shall be made without
the written consent of the Association, and the Treatment Agreement requires the
Association to use its best efforts to provide a wastewater influent to the EWTF
meeting certain quality standards.

 

The Association has adopted standards for the discharge of wastewater to the
sewer systems tributary to the EWTF and procedures for the approval of
industrial waste discharge.

 

By virtue of the Lease or agreement of sale to which this Rider is attached, the
tenant or buyer thereunder (hereinafter the “Industrial Discharger”) will become
an occupant of Eagleview Corporate Center and a potential discharger of waster
into the EWTF. The purpose of this Rider is to incorporate this Rider into the
said lease or agreement of sale, as applicable, and by executing such lease or
agreement of sale, the Industrial Discharger shall be obligated as set forth
below.

 

HOW, THEREFORE, for one dollar and other good and valuable consideration, the
receipt of which is hereby acknowledged, the Industrial Discharger intending to
be legally bound, hereby covenants and agrees as follows:

 

1.     AUTHORIZATION.      Upon receiving possession of the property which is
the subject of its lease or agreement of sale (the “Effective Date”), the
Industrial Discharger shall be permitted to discharge the volume specified in
Appendix C to the Municipality’s sanitary sewer system, from its facilities
located at the site specified in Appendix C, subject to the terms and conditions
of this Rider. The Industrial Discharger agrees to comply with all of the
provisions of this Rider. The Industrial Discharger remains fully responsible
for its discharge and all applicable statutes, resolutions, rules and
regulations and the Association and Municipality assume no responsibility or
liability therefor. Further, the Industrial Discharger agrees to indemnify and
hold harmless the Association and Municipality from all actions, causes of
action, manners of suit or liability resulting from the Industrial Discharger’s
discharge into the Municipality’s sewer system or the EWTF.

 

2.     TERM.            The provisions of this Rider shall become effective on
the Effective Date and shall remain in effect throughout the term of the
Industrial Discharger’s lease.

 

3.     TRANSFER.   The Industrial Discharge’s rights hereunder are not
transferable except to a successor of the Industrial Discharger who assumes all
of the obligations of the Industrial Discharger hereunder and only with the
written approval of the Municipality and the Association. No such transfer of
assumption shall discharge the Industrial Discharger of liability for violation
of this Rider.

 

4.     INCORPORATED DOCUMENTS.      The following documents and requirements are
incorporated into this Rider as if they were written herein and the Industrial
Discharger agrees to comply, at its expense, with their provisions:

 

(a)    Specific requirements set forth in Appendix C hereto, as the same may be
amended from time to time.

 

(b)         Laws and regulations pertaining to Industrial Waste, including
applicable Federal Categorical Pretreatment Standards, as enacted or adopted by
any governmental entity.

 

5.     CONFLICTING REQUIREMENTS.   In the event of any conflict between or among
statues, resolutions or regulations, prohibitions, limitations, or conditions
applicable to the Industrial Discharger, the Industrial Discharger shall comply
with the more stringent requirements.

 

6.     WASTEWATER DISCHARGE LIMITS.

 

(a)    The wastewater discharged by the Industrial Discharger shall conform at
all times to the requirements and wastewater discharge limitations established
by the Association,

 

--------------------------------------------------------------------------------

 

as amended from time to time, and to the requirements and wastewater discharge
limitations established by the Municipality, as amended from time to time.

 

(b)        The current wastewater discharge requirements and quality and
quantity limitations of the Association are set forth in Appendix B.

 

(c)        The current wastewater discharge requirements and quality and
quantity limitations of the Municipality are set forth in Appendix A.

 

(d)        As the Association or the Municipality amend their discharge
requirements or quality and quantity limitations, Appendices A and B shall be
amended, as applicable, and the amended Appendices shall be attached hereto. The
Industrial Discharger shall be informed by the Association or Municipality as
appropriate of any changes to the discharge requirements or quality or quantity
limitations in Appendices A and B at least thirty days prior to the effective
date of change. The Association and Municipality shall use their best efforts to
inform the Industrial Discharges at least sixty days prior to the effective
date, in the event that any such changes require major changes in pretreatment
by the Industrial Discharger. If the public health and safety permit, and the
Industrial Discharger’s failure to comply with the amended discharge
requirements does not itself or with other failures to comply place the
Association or Municipality in substantial danger of violating any agreement,
permit, regulation or law, then the Industrial Discharger shall be allowed a
reasonable extension of time to comply with the changes, provided the Industrial
Discharger requests such an extension and submits to the Association and the
Municipality an implementation schedule within the thirty (30) day period
preceding the effective date of the change.

 

7.        PRETREATMENT.       The Industrial Discharger shall provide any
necessary wastewater treatment to achieve compliance with the discharge
limitations specified in the Rider. The right to discharge wastewater into the
Municipality’s collection system is contingent upon the Industrial Discharger
providing such pretreatment. Any facilities required to pretreat wastewater to a
level acceptable to the Association or the Municipality shall be provided,
operated, and maintained at the Industrial Discharger’s expense. Detailed plans
showing the pretreatment facilities and operating procedures shall be submitted
to the Association and the procedures by the Association and Municipality
relieve the Industrial Discharger from responsibility for the efficacy of the
pretreatment facility and the quality and quantity of its effluent.

 

8.        MONITORING REQUIREMENTS.

 

(a)        Wastewater Sampling Manhole.        A suitable manhole shall be
installed at the location specified in Appendix C to facilitate observation,
sampling, and measuring of the wastewater discharge. The manhole shall be
installed and maintained in a safe condition at the expense of the Industrial
Discharger and shall be accessible at all times to persons authorized by the
Association or the Municipality. The Industrial Discharger hereby consents to
the entry upon its land, and agrees to facilitate such entry, by representatives
of the Association and Municipality, and consents to the use of the manhole for
observation, sampling, and measuring of the wastewater discharge at any time.

 

(b)        Sample Collection.       The industrial waste discharge into the
sanitary sewers shall be sampled and analyzed by and at the expense of the
Industrial Discharger. Frequency of sampling and analysis shall be during the
months of March, June, September, and December. The sampling and analysis shall
be representative of conditions occurring during the calendar quarter in which
the sample is taken. The Industrial Discharger shall submit to the Association
and the Municipality, with 15 days of receipt of the results of the laboratory
analysis, a discharge monitoring report. The monitoring report shall include the
date, specific place, method, and time of sampling and the names of the person
or persons who took the samples; a copy of the original laboratory report
listing the results of the analyses, the dates the analyses were performed, the
names of the person or persons who performed the analyses, and the analytical
methods used; an estimate of the average daily volume of industrial wastewater
discharged during the reporting period from the Industrial Discharger’s
facilities at the site specified in Appendix C; and a certification, signed by
an authorize representative of the Industrial Discharger, that the information
provided, based on the representative’s knowledge and belief, is true and
correct.

 

If the Industrial Discharger samples and/or analyzes for any pollutant more
frequently than required by this Agreement, the Industrial Discharger shall
include the results of any observation or analysis in its discharge monitoring
report.

 

All samples are to be time composited samples collected during the regular
industrial waste discharge hours not to exceed 24 hours. The Industrial
Discharger shall follow the proper sample preservation techniques set forth in
40 C.F.R. Part 136 and amendments thereto. The Industrial Discharger shall
obtain written approval from the Association for the analytical laboratory to be
used, prior to submitting its samples to the laboratory for analysis. A
composite sample shall consist of a collection of equal volume grab samples
combined in a single container. Maximum interval between individual grab samples
shall conform to the following schedule:

 

--------------------------------------------------------------------------------

 

Total Industrial Discharge

 

 

 

Samples (Minutes)

 

Maximum Interval Between Duration in 24-Hours

 

10-24 hours (including 10)

 

60

 

4 to 10 (including 4, not including 10)

 

30

 

Less than 4 hours

 

15

 

 

(c)       Analysis Parameters.

 

(1)          The quarterly wastewater samples must be analyzed for the following
substances and characteristics:

 

5-Day Biochemical Oxygen Demand
Chemical Oxygen Demand
Pli
Suspended Solids
Total Kjaldahl Nitrogen

 

(2)        Once per calendar year during the quarterly sampling, wastewater
samples must also be analysed for the following substances:

 

Benzidrine

Bromoform

3, 3-Dichorobenzidine

Chlordane

Chloroform

Chlorodibromomenthane

Chromium, VI

Dichlorobromomethane

Hethyl Bromide

Hethyl Chloride

Heptachlor

 

All analyses shall be performed using methods approved by the United States
Environmental Protection Agency and the Pennsylvania Department of Environmental
Resources for NPDES reporting.

 

9.        NON-COMPLIANCE REPORTING. The Industrial Discharger shall notify the
Association and the Municipality of any non-complying discharge within 24 hours
of becoming aware of the non-compliance. The Industrial Discharger shall also
repeat any sampling and analysis by which it became aware of non-complying
discharge and submit the results of the second analysis to the Association and
the Municipality with 15 days after becoming aware of the non-compliance. The
Industrial Discharger shall provide a written report to the Association and
Municipality within 10 days of receipt of a laboratory analysis indicating a
non-compliance discharge. The report shall state the nature of the
non-compliance, the reason for the non-compliance, and the steps being taken or
to be taken to bring the discharge into compliance. The report shall also set
forth a reasonable compliance schedule listing the actions to be taken and the
dates by which they will be taken.

 

10.      WASTE CHARACTERISTIC CHANGE. Any proposed changes in facilities,
process, or flow which increase the volume of wastewater discharged or the
quality of the discharge must be reported to the Association and the
Municipality at least ninety (90) days prior to such a change. If required by
the Association or Municipality, the Industrial Discharger shall apply for a new
Industrial Waste Discharge Agreement which reflects the proposed changes.

 

11.      RIGHT OF ENTRY. Any duly authorized representative of the Association
or the Municipality, bearing proper credentials and identification, shall be
permitted at any reasonable time without prior notice to enter upon all
properties served by the Association’s treatment plant for the purpose of
inspecting, observing, measuring, sampling and testing.

 

12.      FILES. All records and information resulting from the monitoring
activities required by this Agreement shall be retained permanently by the
Industrial Discharger.

 

13.      DISCHARGE DILUTION. The Industrial Discharger shall not increase the
use of process water, or in any way, attempt to dilute a discharge as a partial
or complete substitute for adequate pretreatment to achieve compliance with the
limitations established by the Association, or the Municipality, or as set forth
in this Agreement.

 

14.      PERMIT SUSPENSION. This Rider and the authorization to discharge may be
cancelled by the Association or the Municipality for any of the following
causes:

 

(a)       Failure of the Industrial Discharger to accurately report wastewater
characteristics;

 

--------------------------------------------------------------------------------

 

(b)                   Failure of the Industrial Discharger to report significant
changes in operation which affect wastewater characteristics;

(c)                  Refusal of access to the Industrial Discharger’s premises
for the purpose of observing, sampling, or measuring the wastewater discharge;
or

(d)                   Any violation of any requirement of this Industrial Waste
Discharge Rider; or

(e)                  Any default by the Industrial Discharger under the lease or
agreement of sale from which the Industrial Discharger’s occupancy rights in
Eagleview Corporate Center arises.

 

If the Industrial Discharger is notified of a cancellation of its rights under
this Industrial Waste Discharge Rider, it shall immediately stop the discharge
of all industrial wastewater into the Municipality’s sewer system.

 

15.      FEES AND EXPENSES. In the event of any change in the characteristics
and quantity of wastewater from those represented by Industrial Discharger to be
discharged by it upon the Effective Date, or as may be disclosed on Appendix C,
the Industrial Discharger shall pay all of the expenses incurred by the
Municipality in its review and approval of such changes, and of modifications to
this Industrial Waste Discharge Rider and of those expenses incurred on account
of the Association’s review and the approval of the same within thirty days of
receipt of a bill therefor.

 

The Industrial Discharger shall reimburse the Association and the Municipality,
as applicable, within 30 days of invoice, for expenses incurred by those bodies
for monitoring, inspecting, sampling, and testing (including laboratory
analyses) the industrial waste discharge, authorized by the Rider, as necessary
to determine the Industrial Discharger’s compliance with the requirements of the
Association, the Municipality, and this Rider.

 

The Industrial Discharger shall also reimburse the Association and Municipality
within thirty days of Invoice for the expenses (including attorney’s fee)
incurred by the Association and/or Municipality in enforcing this Rider.
Enforcing this Rider for the purposes of the preceding sentence shall include
without limitation not only litigation, administrative action, or the like but
actions including demands for compliance, investigations to determine
compliance, and any other action caused by the Industrial Discharger’s failure
to comply with any part of this Rider.

 

16.      SURCHARGE. The Industrial Discharger shall be subject to the imposition
and payment of a surcharge far extra-strength waste for 5-Day BOD concentrations
in excess of 300mg/l or suspended solids concentrations in excess of 320mg/l or
Total Kjeldahl Nitrogen concentrations greater than 45 mg/l. The surcharge
calculation shall be based on the following:

 

(a)                  The average of all 5-Day BOD, suspended solids and Total
Kjeldahl Nitrogen sample results for the billing quarter, in the Associations’
records, including the sample results submitted by the Industrial Discharger and
results obtained from the Association’s and/or the Municipality’s sampling.

(b)                 The average wastewater flow for the billing quarter, as
determined from water consumption records for the Industrial Discharger.

(c)                  The Association’s surcharge formulas.

(d)                 For industries with multiple wastewater discharge locations,
appropriate adjustments to the surcharge formula will be made by the Association
for wastewater flows not included in the sampling program.

(e)                  The surcharge shall be collected by the Municipality and
paid over the Association.

 

17.      MEASUREMENT OF WASTEWATER VOLUME. The Industrial Discharger may
install, at its expense, a wastewater flow meter to measure continuously the
volume of its discharge to the sanitary sewer system. Plans and specifications
of the complete metering facility shall be submitted to the Municipality and the
Association for approval prior to installation.

 

18.      SLUG DISCHARGES.

 

(a)      The Industrial Discharger shall provide and maintain at its own expense
facilities and management practice adequate to prevent a slug discharge of any
regulated or prohibited substance to the sewer system. For the purpose of the
Rider, a slug discharge is any discharge of a regulated or prohibited substance
of a non-routine, episodic nature, including but not limited to an accidental
spill or a non-customary batch discharge. If the Association determines that a
slug control plan is needed, the Industrial Discharger shall, within ninety days
of receipt of the notice, prepare a plan and submit it to the Association. The
plan shall contain, at a minimum, the following elements:

 

(1)                   Description of the discharge practices, including
non-routine, batch discharges;

(2)                   Description of stored chemicals;

(3)                   Slug discharge notification procedures;

 

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(4)                   Procedures and facilities to prevent slug discharges.

 

(b)      In the case of a slug discharge to the sewer system, the Industrial
Discharger shall immediately telephone and notify the EWTF at (610) 458-1900 and
the Municipality at the telephone number set forth in Appendix C of the
incident. The notification shall include information regarding the location of
the discharge the type of pollutants involved, the concentration and volume of
the discharge and corrective actions taken and planned.

 

(e)      Within five calendar days following a slug discharge, the Industrial
Discharger shall submit to the Association and to the Municipality a detailed
written report describing the cause of the discharge and the measures to be
taken by the Industrial Discharger to prevent similar occurrences. Such
notification shall not relieve the Industrial Discharger of any expense, loss,
damage, or other liability which may be incurred as a result of the slug
discharge.

 

(d)      A notice shall be permanently posted on the Industrial Discharger’s
bulletin board or other prominent place advising employees whom to call in the
event of a slug discharge. The Industrial Discharger shall ensure that all of
its employees who may cause or suffer such a slug discharge to occur are
specifically advised of the emergency notification procedure.

 

19.      SPECIAL REQUIREMENTS. The Industrial Discharger agrees to adhere to the
Special Requirements in Appendix C, attached hereto.

 

20.      ASSOCIATION’S AND MUNICIPALITY’S RIGHTS TO ENFORCE. The Association and
Municipality are intended beneficiaries of the provisions of this Rider, and
shall have the right to enforce the same against the Industrial Discharger,
notwithstanding the fact that they are not parties to lease or agreement of sale
to which it is attached.

 

IN WITNESS WHEREOF, The Industrial Discharger will have executed this Industrial
Waste Discharge Agreement as of the day end year first set forth herein.

 

 

 

INDUSTRIAL DISCHARGER

 

 

 

Attest:

 

 

By:

 

Secretary

 

 

 

President

 

SEAL

 

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