Exhibit 10.124

BUILD TO SUIT LEASE AGREEMENT

LANDLORD: RT/TC ATWATER LP

TENANT: ENDO PHARMACEUTICALS INC.

GUARANTOR: ENDO PHARMACEUTICALS HOLDINGS INC.

ATWATER CORPORATE CENTER

MALVERN, PENNSYLVANIA

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TABLE OF CONTENTS

 

I.  

LEASE OF LEASED PREMISES

     1    II.  

LEASED PREMISES

     1    III.   TERM      1      A.   

Initial Term

     1      B.   

Renewal Options

     1    IV.  

LEASE COMMENCEMENT DATE

     4      A.   

Commencement

     4      B.   

Lease Commencement Agreement

     4      C.   

Re-measurement

     4    V.  

RENT AND FINANCIAL MATTERS

     4      A.   

Security Deposit

     4      B.   

Rental Obligation

     5      C.   

“Rent” Defined

     5      D.   

Basic Annual Rent

     5      E.   

Payment Procedure

     5      F.   

Partial Month Proration

     5      G.   

General Additional Rent

     5    VI.  

CONDITIONS OF TENANT’S OCCUPANCY AND POSSESSION

     8      A.   

Use Restrictions and Rules

     8      B.   

Improvements by Tenant Other Than the Tenant Work

     9      C.   

Management; Maintenance

     9      D.   

Conduct on Leased Premises

     11      E.   

Insurance

     11      F.   

Liens

     13      G.   

Environmental Assurances

     14      H.   

Security Services

     14      I.   

Smoke Free

     15      J.   

Signage

     15      K.   

Rooftop Equipment

     15      L.   

Recycling Regulations

     17      M.   

General Provisions Regarding Tenant’s Use

     17      N.   

Acceptance of Leased Premises

     17      O.   

Mortgagees

     17    VII.  

LANDLORD’S RIGHTS AND RESPONSIBILITIES

     18      A.   

Access

     18      B.   

Building Repairs

     18      C.   

Parking

     18      D.   

Liens

     19      E.   

Landlord’s Environmental Obligations

     19      F.   

Inspections; Management

     19   

 

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  G.   

Additional Provisions

     20      H.   

Indemnification by Tenant

     20      I.   

Park Restrictions

     21      J.   

Construction Warranty

     21    VIII.  

DAMAGE AND DESTRUCTION

     21      A.   

General Rule

     21      B.   

Mutual Right of Termination

     21      C.   

Restoration by Landlord

     22    IX.  

CONDEMNATION

     22      A.   

Termination

     22      B.   

Award

     22    X.  

HOLDING OVER

     23    XI.  

DEFAULT

     24      A.   

Events of Default

     24      B.   

No Waiver of Default

     25      C.   

Damages

     25      D.   

Termination of Lease and Possession of Leased Premises

     25      E.   

Self-Help Rights

     27      F.   

Mutual Indemnity

     28      G.   

Remedies Cumulative

     28      H.   

Waiver of Landlord’s Lien

     28    XII.  

ASSIGNMENT AND SUBLETTING

     28      A.   

General Rule

     28      B.   

Definitions

     29      C.   

Cost

     29      D.   

Effect of Approval

     29      E.   

Assignment of Rent

     30      F.   

Permitted Transactions

     30      G.   

Marketing Notice

     30      H.   

Complete Sublease to Unaffiliated Entity

     31      I.   

No Release of Tenant

     31      J.   

Assignment by Landlord

     31    XIII.  

ESTOPPEL CERTIFICATES

     31    XIV.  

SUBORDINATION AND ATTORNMENT

     32      A.   

Subordination

     32      B.   

Attornment

     33    XV.  

LANDLORD’S LIABILITY

     33      A.   

Upon Transfer

     33      B.   

No Personal Liability

     33    XVI.  

TENANT’S AUTHORITY

     33   

 

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XVII.  

NOTICES

     34    XVIII.  

COMMISSIONS

     35      A.   

Indemnification by Tenant

     35      B.   

Indemnification by Landlord

     36    XIX.  

MISCELLANEOUS

     36      A.   

Severability, Enforceability

     36      B.   

Captions

     36      C.   

Recordation

     36      D.   

Successors and Assigns

     36      E.   

Quiet Enjoyment

     37      F.   

Force Majeure

     37      G.   

Waiver of Jury Trial

     37      H.   

Gender

     37      I.   

Governing Law

     37      J.   

Exhibits Incorporated

     37      K.   

Entire Agreement

     37      L.   

Amendments

     38      M.   

Counterparts

     38      N.   

Attorneys’ Fees

     38      O.   

Limits of Liability

     38      P.   

Time of Essence

     38      Q.   

Confidentiality

     38      R.   

Consents

     38      S.   

Guaranty

     38      T.   

Public Announcements

     38    XX.  

OFAC COMPLIANCE

     39      A.   

Representations

     39      B.   

OFAC Covenant

     39    XXI.  

FINANCIAL INFORMATION

     40    XXII.  

TENANT’S GENERATOR

     40      A.   

Authority to Install

     40      B.   

Landlord’s Approval

     40      C.   

Tenant Obligations

     40    XXIII.  

ADDITIONAL SPACE

     41      A.   

Notice

     41      B.   

Terms Applicable to Additional Space

     41      C.   

Landlord’s Performance

     41   

 

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ADDENDUM 1    —      Definitions ADDENDUM 2    —      Best Management Practices
of Class A Office Parks in the Metropolitan Area EXHIBIT A    —      Site Plan
of Property EXHIBIT B    —      Leased Premises EXHIBIT C    —     
Intentionally Deleted EXHIBIT D    —      Work Letter Agreement EXHIBIT D-1    —
     Base Building Work and Improvements EXHIBIT D-2    —      Design and
Construction Milestones EXHIBIT D-3    —      Delineation of Base Building and
Landlord’s TI Work EXHIBIT E    —      Tenant Commencement Letter EXHIBIT F    —
     Business Days EXHIBIT G    —      Intentionally Deleted EXHIBIT H    —     
Sample Estoppel Certificate EXHIBIT I    —      Guaranty EXHIBIT J    —     
Parking Lot Plans

 

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LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made as of the 28th day of October, 2011
(“Effective Date”), by and between RT/TC ATWATER LP, a Delaware limited
partnership (“Landlord”), and ENDO PHARMACEUTICALS INC., a Delaware corporation
(“Tenant”).

WITNESSETH:

WHEREAS, Landlord is the owner of the Property which is depicted on the site
plan attached hereto as Exhibit A;

WHEREAS, Landlord desires to construct the Building on the Property and to lease
the Leased Premises to Tenant, and Tenant desires to lease the Leased Premises
from Landlord, all under the terms and conditions set forth below; and

WHEREAS, all defined terms used herein shall have the meanings ascribed to such
terms in Addendum 1 attached hereto, unless otherwise noted.

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

 

I. LEASE OF LEASED PREMISES

Landlord hereby leases the Leased Premises to Tenant, and Tenant hereby leases
the Leased Premises from Landlord, all under the terms and conditions more fully
set forth herein.

 

II. LEASED PREMISES

The Leased Premises shall consist of (a) the Property and (b) one building
containing approximately 300,000 rentable square feet constructed in accordance
with Exhibit D attached hereto (the “Building”). The Property and the Building
are collectively called the “Leased Premises.” A preliminary site plan of the
Leased Premises and a depiction of the footprint of the Building to be
constructed on the Property are attached hereto as Exhibit B, and are subject to
modification by mutual agreement of the parties. The Building has or is
anticipated to have a street address of 1400 Atwater Drive, Malvern,
Pennsylvania.

 

III. TERM

A. Initial Term. The initial Lease term (the “Initial Term”) shall be twelve
(12) full Lease Years (as hereinafter defined) (i.e., a total of 144 full
calendar months plus any partial month) commencing on the Lease Commencement
Date (as herein defined). The Initial Term and any exercised Renewal Term
(defined below) shall be collectively known as the “Term”.

B. Renewal Options.

1. Provided that this Lease is then in full force and effect (and no Event of
Default has occurred and is continuing on the date Tenant delivers its Renewal
Notice to

 

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Landlord), Tenant shall have the right to renew this Lease for three (3) renewal
terms (each, a “Renewal Term”) of five (5) years each, each immediately
following the expiration of the Initial Term or the first or second Renewal
Term, as the case may be, on the same terms, conditions, and provisions as are
set forth in this Lease, provided that:

(a) Tenant shall have notified Landlord in writing of Tenant’s election to renew
(the “Renewal Notice”) at least eighteen (18) months prior to the date on which
the Initial Term, or the applicable Renewal Term, as the case may be, expires.
Time is of the essence with respect to Tenant’s exercise of its rights under
this subparagraph, and Tenant acknowledges that Landlord requires strict
adherence to the requirement that the Renewal Notice be timely made and in
writing. If Tenant fails to timely deliver a Renewal Notice, then Tenant shall
be deemed to have waived any and all remaining rights to renew the Term;

(b) there shall be no further right of renewal after the third Renewal Term;

(c) beginning with and as of the first day of the applicable Renewal Term, the
Basic Annual Rent for the Renewal Term shall be equal to the greater of (i) the
Basic Annual Rent in effect on the date immediately prior to the commencement of
the Renewal Term, or (ii) ninety-five percent (95%) of the then-current fair
market rent taking into account all relevant factors, including, without
limitation, tenant concessions and inducements, for new leases of comparable
size, term, location and quality within Class A office buildings located in the
Great Valley/Route 202 office submarket (the “Metropolitan Area”) as of the
start of each Renewal Term;

(d) Basic Annual Rent for the Leased Premises shall be agreed upon by Landlord
and Tenant, both acting diligently and in good faith. If, however, Landlord and
Tenant cannot agree on such fair market rent within fifteen (15) calendar days
of Landlord’s receipt of the Renewal Notice, then, at any time thereafter,
either party may deliver written notice to the other requiring that Basic Annual
Rent for the applicable Renewal Term be determined by an appraisal process
described below, and appointing as an appraiser a disinterested third party of
recognized competence and professional experience as an appraiser of comparable
commercial real estate in the Metropolitan Area (an “Appraisal Notice”):

(i) Within thirty (30) calendar days after a party receives an Appraisal Notice,
the party receiving such notice shall give written notice to the other that it,
at its own expense, has hired and appointed as an appraiser a disinterested
third party of recognized competence and professional experience as an appraiser
of comparable commercial real estate in the Metropolitan Area. The two
(2) appraisers thus appointed shall use good faith efforts to agree on the Basic
Annual Rent for the applicable Renewal Term based upon the then-current fair
market rent. However, if the two (2) appraisers are unable to agree within
thirty (30) calendar days after their appointment on the Basic Annual Rent for
the applicable Renewal Term, then the two (2)

 

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appraisers will, within ten (10) calendar days thereafter, jointly appoint a
third appraiser who shall also be a disinterested third party of recognized
competence and professional experience as an appraiser of comparable commercial
real estate in the Metropolitan Area (the “Appraiser”). If the party receiving
the Appraisal Notice fails to timely name an appraiser, and such failure
continues for five (5) calendar days after written notice from the other party,
then the appraiser appointed by the party delivering the Appraisal Notice shall
be the Appraiser. All appraisers appointed pursuant to this subparagraph shall
bear the designation or title of “Member of the Appraisal Institute”. In the
event that the two (2) appraisers appointed as aforesaid shall be unable to
agree, within such ten (10) calendar day period, on the appointment of the
Appraiser, they shall give written notice of such failure to agree to the
parties hereto, and the parties shall request that such appointment be made by
the then President of the Philadelphia Chapter of the Appraisal Institute (or
any organized successor thereto) within thirty (30) calendar days after such
request. Within thirty (30) calendar days after the appointment of the
Appraiser, the two appraisers selected by the parties shall deliver to the
Appraiser their separate recommendations of the Basic Annual Rent for the
upcoming Renewal Term. Within thirty (30) calendar days after receiving the
second recommendation the Appraiser shall select one of the two recommendations.
If only one recommendation is timely submitted, it shall automatically be
selected. If neither appraiser submits a recommendation, the Appraiser shall act
of his or her own accord to make a de novo determination of the Basic Annual
Rent. A decision by the Appraiser shall be conclusive and binding on the parties
hereto as to the Basic Annual Rent to be utilized in the exercise of this
renewal option for the upcoming Renewal Term; provided, however, that in no
event shall the Basic Annual Rent during any Renewal Term be less than the Basic
Annual Rent in effect on the date immediately prior to the commencement of the
Renewal Term. The costs of the Appraiser shall be split equally by Landlord and
Tenant and each of Landlord and Tenant shall bear the costs of the appraiser
selected by it, and

(ii) After the Basic Annual Rent for the upcoming Renewal Term has been
determined, the Appraiser shall immediately give written notice to the parties
hereto stating the Appraiser’s determination, and shall furnish to each party
hereto a copy of such determination signed by the Appraiser; and

(e) Tenant may exercise its renewal option for all, but not less than all, of
the then Leased Premises.

2. If Tenant timely and properly gives the Renewal Notice, the parties shall be
bound to the applicable Renewal Term upon all of the foregoing terms and
conditions; provided, however, that, if either party delivers an Appraisal
Notice, Tenant shall have the right to withdraw its Renewal Notice by delivering
written notice thereof (“Withdrawal Notice”) to Landlord on or before the
applicable deadline described as follows: (i) if the Basic Annual Rent for the
applicable Renewal Term has not been determined pursuant to Paragraph III.B.1(d)
prior to the date which is twelve (12) months prior to the expiration of the
Initial Term or the applicable Renewal Term, as the case may be (the “12-Month
Date”), Tenant’s deadline to deliver a Withdrawal Notice shall be the 12-Month
Date; or (ii) if the Basic Annual Rent for the applicable Renewal Term has been
determined pursuant to Paragraph III.B.1(d) prior to the 12-Month Date, Tenant’s
deadline to deliver a Withdrawal Notice shall be the earlier of (a) the 12-Month
Date or (b) the date which is twenty (20) days after the date Basic Annual Rent
is determined pursuant to Paragraph III.B.1(d). If Tenant timely delivers a
Withdrawal Notice pursuant to (i) or (ii) above, as applicable, then Tenant’s
Renewal Notice shall be null and void and Tenant shall, within ten (10) days
following its receipt of an invoice therefor, reimburse

 

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Landlord for all costs incurred by Landlord in connection with the determination
of Basic Annual Rent for the applicable Renewal Term pursuant to this Paragraph
III.B. Tenant’s failure to timely deliver a Withdrawal Notice shall be deemed a
waiver of Tenant’s right to withdraw its exercise of the applicable Renewal
Option. If the Basic Annual Rent for a Renewal Term shall not have been
determined as of the commencement of such Renewal Term, Tenant shall continue to
pay Basic Annual Rent at the then-existing rate until such determination has
been completed. No further documentation shall be required for that purpose;
provided, however, that upon request by one party the other party shall execute
and deliver a formal amendment to this Lease or such other confirmation of the
Renewal Term as may reasonably be requested.

 

IV. LEASE COMMENCEMENT DATE

A. Commencement. The “Lease Commencement Date” shall be the first to occur of
(a) the date Tenant takes occupancy of the Building for the conduct of Tenant’s
intended business therein, or (b) the date which is five (5) calendar days
following Substantial Completion of Landlord’s Work (as defined in Exhibit D-1
attached hereto).

B. Lease Commencement Agreement. On the Lease Commencement Date (or such later
date as Landlord or Tenant may reasonably request), Landlord and Tenant shall
promptly enter into a supplementary written agreement in substantially the form
attached hereto as Exhibit E, or in such other form as Landlord or Tenant shall
prescribe, thereby specifying the Lease Commencement Date and Rentable Area.

C. Re-measurement. Prior to the date hereof, Landlord has delivered to Tenant a
calculation of the rentable area of the Building prepared by Landlord’s
Architect, based on the Approved Base Building Plans (as defined in Exhibit
D-1), which calculation was made in accordance with the Building Owners &
Manager’s Association (ANSI/BOMA Z 65.1-2010) “Office Buildings: Standards of
Methods of Measurement,” approved by the American National Standards Institute,
Inc. (the “BOMA Standard”). Such calculation of the rentable area of the
Building shall be re-measured and verified by Landlord’s Architect in accordance
with the BOMA Standard, at such time as the Building is Substantially Completed.
As of such re-measurement and verification by Landlord’s Architect, the Landlord
and Tenant shall be deemed to accept such measurement for all purposes of this
Lease. The measurements as certified by Landlord’s Architect in accordance with
the BOMA Standard shall be referred to as the “Rentable Area” for purposes of
this Lease, and shall not be changed unless the Building is thereafter
physically expanded or contracted, which must be approved by Landlord. Following
the verification of such re-measurement, all amounts, percentages and figures
appearing or referred to in this Lease (including, without limitation, the
amount of the Basic Annual Rent) shall be modified in accordance with such
measurement.

 

V. RENT AND FINANCIAL MATTERS

A. Security Deposit. Tenant shall not be required to deliver, and has not
delivered, any form of security deposit hereunder.

 

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B. Rental Obligation. Commencing on the Lease Commencement Date, Tenant shall be
obligated to pay and shall pay Basic Annual Rent (as defined below) and
Additional Rent (as defined below).

C. “Rent” Defined. “Rent” means Basic Annual Rent and Additional Rent.
“Additional Rent” means all sums of whatever nature payable by Tenant under this
Lease other than Basic Annual Rent.

D. Basic Annual Rent. Tenant agrees to pay Landlord “Basic Annual Rent,” payable
in equal monthly installments, at the rate of Eighteen and 65/100 Dollars
($18.65) times the Rentable Area per year for the first (1st) Lease Year, which
initial Basic Annual Rent is on a triple net basis, and which shall be increased
each Lease Year thereafter by two and one-fourth percent (2.25%) of the previous
Lease Year’s Basic Annual Rent (with the Basic Annual Rent for the first
(1st) Lease Year being calculated for such purposes as if the first Lease Year
was exactly twelve (12) full calendar months following the Lease Commencement
Date, regardless of the actual length of the first Lease Year).

E. Payment Procedure. Each installment of the Basic Annual Rent is due in
advance on the first (1st) day of each and every month for which payment is due
and shall be paid by electronic funds transfer in accordance with instructions
provided to Tenant by Landlord as modified by Landlord from time to time. Unless
a different date for payment is provided for elsewhere in this Lease (including,
without limitation, as provided with respect to Landlord’s Estimate of Operating
Expenses and/or Taxes), all Additional Rent will be paid by Tenant within thirty
(30) calendar days after Landlord has notified Tenant of the amount due. The
foregoing notwithstanding, the portion of Additional Rent which is attributable
to Landlord’s Estimate of Operating Expenses and/or Taxes (as all of the
foregoing terms are hereinafter defined) shall be paid on the first day of each
month together with Tenant’s payments of Basic Annual Rent. The first two
(2) payments of Rent in any calendar year which are not paid within five
(5) calendar days after Landlord gives Tenant written notice that such payment
is overdue shall bear a late fee of five percent (5%) of the overdue amount and
such late fee is payable upon demand. Any subsequent payment of Rent in that
calendar year which is not paid on or before the date due shall bear a late fee
of five percent (5%) of the overdue amount and such late fee is payable upon
demand. Tenant’s obligation for Additional Rent and any unpaid Basic Annual Rent
will remain in effect after the termination or expiration of this Lease. All
payments of Basic Annual Rent and Additional Rent due Landlord under this Lease
will be made by Tenant without any deductions or set-offs (except as otherwise
provided in Paragraph XII.E below), and without demand, to Landlord as set forth
herein.

F. Partial Month Proration. If the Lease Commencement Date occurs on a day other
than the first day of a month, then Tenant will pay a prorated monthly
installment of Basic Annual Rent and of the Additional Rent set forth in
Paragraph V.G for the fractional part of such month.

G. General Additional Rent

1. Rent Adjustment-Operating Expenses. Commencing on the Lease Commencement
Date, and during each Operating Year, Tenant shall pay to Landlord, as

 

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Additional Rent, with and at the same time as the payments of Basic Annual Rent
are due Tenant’s Share of Landlord’s then-current estimate of the Operating
Expenses, revised not more frequently than annually, prorated in equal amounts
over the balance of the then-current Operating Year.

2. Rent Adjustment-Taxes. Commencing on the Lease Commencement Date, and during
each Operating Year, Tenant shall pay to Landlord, as Additional Rent, with and
at the same time as the payments of Basic Annual Rent are due, Tenant’s Share of
the Landlord’s then-current estimate of Taxes, revised not more frequently than
annually, prorated in equal amounts over the balance of the then-current
Operating Year. Landlord has the sole and exclusive right to contest any Taxes
assessed against the Leased Premises (including the Building); provided,
however, that in the event Landlord does not elect to contest the Taxes assessed
during any Operating Year, then Landlord shall provide written notice thereof to
Tenant prior to the deadline to commence any such contest, in which event Tenant
may require Landlord to contest such Taxes on its behalf provided that no Event
of Default by Tenant has occurred and is continuing. If Landlord contests the
Taxes, either by its election or Tenant’s direction, then Landlord may
(i) select such third party providers as Landlord deems prudent to assist in
such proceedings, on either a fee-paid and/or contingent fee basis; and (ii) at
Landlord’s discretion, include all reasonable expenses incurred by Landlord
(including attorneys’ fees and court costs) in appealing any assessment as an
item of Taxes for the purpose of computing Additional Rent due under this Lease
and/or satisfy all or a portion of such expenses from the proceeds of any tax
refunds received as a result of a successful assessment contest. Tenant shall
have the right to consult with any such third party providers selected by
Landlord in connection with the contest of Taxes hereunder. Tenant acknowledges
that it bears the risk that a tax assessment appeal could result in a decision
which increases the assessed value of the Leased Premises.

3. Rent Adjustment-Impositions. Tenant shall pay and discharge as and when due
all assessments, impositions and other charges of every kind and nature
whatsoever, ordinary or extraordinary, foreseen or unforeseen, general or
special, together with any interest or penalties imposed upon the late payment
thereof, which, pursuant to present or future law, during or after (but
attributable to a period falling within) the Term, shall have been or shall be
levied, charged, assessed, imposed upon or grow or become due and payable out of
or for or have become a lien on the Leased Premises, or any part thereof, any
improvements or personal property in or on the Leased Premises, the Rent and
income payable by Tenant or on account of any use of the Leased Premises and
such franchises as may be appurtenant to the use and occupation of the Leased
Premises (all of the foregoing being hereinafter referred to as “Impositions”).
In no event, however, will Impositions include (a) any inheritance, estate,
succession, income, profits or franchise tax, or (b) any item or expense which
constitutes a part of the Operating Expenses or Taxes payable by Tenant under
this Lease. Tenant, upon request from Landlord, shall submit to Landlord the
proper and sufficient receipts or other evidence of payment and discharge of the
same. If any Impositions are not paid when due, Landlord shall have the right
but shall not be obligated to pay the same following ten (10) days’ written
notice to Tenant, provided Tenant does not contest the same as herein provided.
If Landlord shall make such payment, Landlord shall thereupon be entitled to
repayment by Tenant on demand as Additional Rent hereunder.

 

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4. Utilities.

(a) Effective as of the Lease Commencement Date, all utilities shall be
transferred directly to accounts in Tenant’s name and Tenant shall pay directly
to all utility providers all charges respecting the Leased Premises incurred
during the Term. In furtherance of the foregoing and for the avoidance of doubt,
it is the intent of this Lease that Tenant arrange for and pay directly to the
applicable utility providers the cost of all electricity, gas and other utility
charges used in the Building and at the Leased Premises, and that this Lease
therefore be considered to be absolute net of such costs.

(b) Tenant shall pay on a timely basis to the appropriate utility or other
supplier all charges for gas, steam, electricity, light, heat, power, telephone,
water, metered or unmetered sprinkler, sewerage and all other utility and
communication services, used, rendered and/or supplied upon or in connection
with the Leased Premises to the extent not paid by Landlord and reimbursed by
Tenant as a part of the Operating Expenses. Upon request, Tenant shall promptly
furnish Landlord with copies of all paid receipts for such utilities charges.
All such utility charges shall be appropriately adjusted between the parties as
of the Lease Commencement Date, and again as of the expiration or sooner
termination of this Lease.

5. Annual Reconciliation Statement.

(a) Landlord will deliver to Tenant, within one hundred twenty (120) calendar
days after the end of each applicable Operating Year, a statement for such
Operating Year (the “Statement”) showing the actual amount of Operating Expenses
and Taxes for the Operating Year just ended. Tenant will pay Landlord, within
forty-five (45) calendar days of the receipt of any Statement, such amounts as
may be necessary to adjust Tenant’s payments (if any) of the estimated Operating
Expenses and Taxes for such preceding Operating Year so that such payments (if
any) will equal the actual amount of any such Operating Expenses or Taxes
payable by Tenant for such Operating Year. If any Statement shows that the
estimated Operating Expenses or Taxes paid by Tenant exceed the actual Tenant’s
Share of such Operating Expenses or Taxes for any Operating Year, then Landlord
will credit Tenant’s account by an amount equal to the excess or, if at the end
of the Term, refund to Tenant an amount equal to the excess. Failure of Landlord
to provide any Statement within the time prescribed will not relieve Tenant of
its obligations under this Paragraph. The parties’ obligation to make payment
for any overpayment or underpayment of estimated compared to actual Operating
Expenses and Taxes during the final Operating Year shall survive expiration or
termination of this Lease.

(b) Tenant shall have the right (but not more often than once in any 12-month
period) to inspect Landlord’s records of Operating Expenses and Taxes for the
Operating Year reflected in such Statement, at Landlord’s offices during normal
business hours, provided Tenant gives at least two (2) Business Days’ (as
defined in Exhibit F attached hereto) prior written notice thereof to Landlord,
which notice must be provided within one hundred twenty (120) calendar days
after its receipt of such Statement. Any overpayment by Tenant of Rent for such
year reflected by such audit shall be promptly corrected. No such audit shall be
conducted on a contingent fee basis. Tenant and any third party auditor shall
keep Landlord’s books and records and Tenant’s (or such auditor’s) work product
created during such audit strictly confidential except when otherwise required
by law. In the event any such audit

 

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evidences that Landlord has overcharged Tenant for Operating Expenses or Taxes
in any given Lease Year by an amount in excess of three percent (3%) of the
aggregate of Operating Expenses and Taxes in such Lease Year, Landlord shall, in
addition to correction of such overpayment, pay the reasonable and actual cost
of Tenant’s audit in an amount not to exceed $5,000.

 

VI. CONDITIONS OF TENANT’S OCCUPANCY AND POSSESSION

A. Use Restrictions and Rules. Tenant shall use the Leased Premises only for
general office use and uses for Tenant’s business ancillary thereto, including,
but not limited to cafeteria, data center, conference center, fitness center,
continuing education and conferencing purposes, archives and records and similar
office type legally permissible ancillary uses in connection with Tenant’s
business, for Light Lab Use and for other uses permitted by the Park
Restrictions (as defined below) and for no other purpose. In no event will
smoking be permitted within the Building. Tenant agrees to be bound by all laws,
requirements, rules, orders, ordinances, zoning and restrictive covenants
applicable to Tenant’s use of the Leased Premises, whether in force on or after
the Lease Commencement Date (collectively, the “Restrictions”). In particular,
the Restrictions include (but are not limited to) certain covenants and
restrictions, referred to in that certain Declaration of Covenants, Easements
and Restrictions for Atwater, dated August 27, 2001 and recorded on August 28,
2001 with the Recorder of Deeds of Chester County, Pennsylvania in Record Book
Volume 5050, page 867, as amended by that certain First Amendment to Declaration
of Covenants, Easements and Restrictions for Atwater dated July 1, 2003 and
recorded in such office on July 16, 2007 in Record Book Volume 7212, page 1689,
as further amended by that certain Second Amendment to Declaration of Covenants,
Easements and Restrictions for Atwater of even date herewith which is intended
to be recorded forthwith with the Recorder of Deeds of Chester County,
Pennsylvania (the “Park Restrictions”) to which the Property is subject and of
which copies have been provided to Tenant by Landlord. Tenant acknowledges
receipt of the Park Restrictions and that it is cognizant of the terms and
provisions of the Park Restrictions and agrees to be bound by them (provided
that Landlord, and not Tenant, shall be responsible for compliance with the Park
Restrictions and obtaining all approvals required under the Park Restrictions in
connection with the construction of Landlord’s Work). Landlord and Tenant agree
that the Atwater Owners Association is a third party beneficiary to this
Paragraph and may remedy any violation of the Park Restrictions occasioned by
Tenant’s use and occupancy of the Leased Premises, in the manner and to the
extent provided in the Park Restrictions, including, but not limited to,
bringing suit, at law or in equity, directly against Tenant. Landlord will not
consent to any modifications to the Park Restrictions or enter into any other
Restrictions which materially and adversely impact Tenant’s business operations
at the Leased Premises or materially increase any assessments payable by Tenant.
Landlord, or its affiliate, shall have the unilateral right to modify the Park
Restrictions provided that, except with respect to a modification which arises
from the specific use of a particular lot, such modification applies uniformly
to all lots subject to the Park Restrictions and such modification does not
materially or adversely affect Tenant’s business operations or materially
increase any assessment payable by Tenant. Tenant acknowledges and agrees that
Landlord intends to implement a major revision to the Park Restrictions which
will result in a separate mixed use development on the south side of Atwater
Lake, and agrees that any increase in assessments under the Park Restrictions
due to the separation of the Project from the portion of Atwater located on the
south side of Atwater Lake will not constitute a material increase in
assessments payable by Tenant. Tenant shall not be obligated to incur any
maintenance costs with respect to the mixed use

 

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development on the south side of Atwater Lake. Landlord shall provide Tenant
with a revised copy of the Restrictions upon any amendment thereof. All
assessments levied by the Atwater Owners Association pursuant to the Park
Restrictions and payable by Landlord with respect to the Leased Premises shall
be reimbursed by Tenant as a part of Operating Expenses.

B. Improvements by Tenant Other Than the Tenant Work.

1. Other than the Tenant Work (as defined in Exhibit D-1), which shall be
governed by the terms of Exhibit D, Tenant will not make any improvements,
alterations, installations or additions to the Leased Premises which (a) involve
a modification to the exterior or structure of the Building, (b) exceed $350,000
in aggregate costs in a calendar year, or (c) require a permit (other than work
associated with Tenant’s voice, data and security systems within the Building)
(collectively, “Material Tenant Alterations”) unless: (i) Tenant receives
Landlord’s prior written consent, which will not be unreasonably withheld,
conditioned, or delayed; (ii) the work is performed only by licensed and
adequately insured contractors reasonably approved in advance by Landlord;
(iii) the work is carried out pursuant to properly documented drawings approved
in advance by Landlord and pursuant to all necessary permits or governmental
and/or other approvals, the responsibility and cost of obtaining which will be
borne solely by Tenant; (iv) Tenant pays all costs of such work; and (v) the
parties shall document Tenant’s responsibilities to remove all or none of such
items upon termination of the Lease, and to repair any damage caused by such
removal, all at Tenant’s sole cost and expense. If Tenant elects to use a
contractor other than Landlord or its representative for any work that exceeds
$350,000 in aggregate costs in a calendar year or which modifies any Base
Building Work identified on Exhibit D-3, then the work performed by such
contractor will be subject to the reasonable approval of Landlord to assure its
compatibility with the existing structures and Tenant will pay Landlord (i) a
reasonable fee therefor, not to exceed one and one-half percent (1.5%) of the
cost of such work, plus (ii) any out-of-pocket costs incurred by Landlord for
engaging third party professionals to review Tenant’s submissions. For any
alterations, additions or installations not constituting Material Tenant
Alterations, or the installation of Tenant’s furniture, fixtures, and equipment,
Tenant shall only be required to notify Landlord of such work, but in any event,
all of such work by Tenant shall be completed lien free and in a good and
workmanlike manner and in compliance with all applicable laws.

2. Tenant shall deliver “as built” plans for all alterations, additions and
improvements made by Tenant to Landlord (or Landlord’s property manager), upon
completion of same. Unless otherwise elected by Landlord at the time Landlord
approves a Material Tenant Alteration, all alterations, additions and
improvements made by Tenant shall become the property of Landlord and will
remain a part of the Leased Premises upon the expiration or termination of this
Lease. Tenant will, no later than the expiration or termination date of this
Lease, remove all Material Tenant Alterations for which Landlord required
removal hereunder as a condition to Landlord’s approval thereof and repair any
damage caused by such removal, all at Tenant’s sole cost.

C. Management; Maintenance

1. Commencing on the Lease Commencement Date and continuing thereafter until the
Management Change Date, Tenant shall manage the Leased Premises (including the

 

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Building) in accordance with Best Management Practices of Class A office parks
in the Metropolitan Area and be exclusively responsible for all repairs,
replacements, and maintenance to the Leased Premises (except to the extent of
Landlord’s obligation to maintain the Structural Portions of the Building as
provided below), including but not limited to: (i) the interior and exterior
non-structural portions of the Building (including without limitation all walls,
roofs, utilities, doors, glass, elevators and fire safety systems),
(ii) Tenant’s security systems of whatever type or nature, (iii) all heating,
ventilation and cooling equipment, (iv) any computer room and computer room
equipment located within the Building, (v) any and all other furniture, fixtures
and equipment of Tenant located in the Leased Premises, (vi) the Communications
Equipment (as herein defined), (vii) all exterior elements of the Property,
including non-public driveways and parking improvements, landscaping, and
irrigation systems and maintenance, and (viii) any and all other portions of the
Leased Premises which are not required to be maintained by Landlord pursuant to
this Paragraph VI.C.1. The foregoing maintenance, repairs and replacements
obligations of Tenant shall be performed in a manner which is consistent with
Best Management Practices of Class A office parks in the Metropolitan Area.
Effective as of the Lease Commencement Date, Landlord’s sole maintenance
responsibility for the Leased Premises shall be the Structural Portions of the
Building, except to the extent such maintenance is required as a result of the
wrongful acts or omissions of Tenant, its agents, employees or contractors. For
purposes hereof, the “Structural Portions of the Building” means the Building’s
exterior walls, footings, foundations, structural portions of load-bearing
walls, structural floors and subfloors, and structural columns and beams (but
expressly excluding the non-structural slab, the roof membrane and the
non-structural portion of the roof). Tenant shall promptly report in writing to
Landlord any defective condition in the Structural Portions of the Building
actually known to Tenant which Landlord is required to repair, and failure to so
report such defects shall excuse any delay by Landlord in commencing and
completing such repair to the extent the same would otherwise be Landlord’s
responsibility under this Lease.

2. Following the Lease Commencement Date and continuing thereafter until the
Management Change Date, Tenant, and not Landlord, shall be responsible to
furnish all services to the Building, including without limitation performing
those obligations set forth on Addendum 2 of this Lease.

3. Tenant will not commit or suffer any waste of the Leased Premises. Landlord
or Landlord’s representatives may enter the Leased Premises during normal
business hours with at least two (2) Business Days’ prior written notice (except
in the event of emergency) to Tenant and in the presence of a designated
representative of Tenant (Tenant covenanting to make such a representative
available and, if Tenant does not do so, then such entry is permitted without a
Tenant’s representative being present) to verify Tenant’s compliance with this
Lease.

4. Tenant shall promptly comply with all laws, ordinances, orders, rules,
regulations, and requirements of all federal, state, municipal or other
governmental or quasi-governmental authorities or bodies then having
jurisdiction over the Leased Premises (or any part thereof) and/or the use and
occupation thereof by Tenant, and Tenant shall so perform and comply, whether or
not such laws, ordinances, orders, rules, regulations or requirements shall now
exist or shall hereafter be enacted or promulgated and whether or not the same
may be said to be within the present contemplation of the parties hereto. Tenant
agrees to give Landlord notice of violation or claimed violation of any law,
ordinance, rule, regulation or requirement,

 

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which such violation materially adversely affects (A) the Leased Premises, or
(B) Tenant’s use of the Leased Premises. Tenant shall deliver such notice within
five (5) Business Days after the same comes to the attention of Tenant. In
addition, so long as neither Tenant nor Guarantor is a publicly traded entity
listed on the New York Stock Exchange, NASDAQ exchange or comparable publicly
traded major market stock exchange, Tenant agrees to give Landlord notice of any
violation of any law, ordinance, rule, regulation or requirement which
materially adversely affects the financial condition of Tenant within five
(5) Business Days after the same comes to the attention of Tenant. If
applicable, at the same time Tenant will inform Landlord as to the corrective
action which Tenant proposes to do or take in order to comply therewith prior to
commencing such action.

5. At the earliest of the following to occur: (i) the end of the Term, (ii) upon
early termination of this Lease, (iii) prior to vacation of the Leased Premises
by Tenant, or (iv) prior to rejection of the Lease under applicable provisions
of the Bankruptcy Code including Section 365 thereof, Tenant shall: (a) return
the Leased Premises to Landlord in as good a condition as existed as of the
Lease Commencement Date, excepting only normal wear and tear, Force Majeure, and
repairs required to be made by Landlord hereunder; (b) remove all of its
property and possessions from the Leased Premises except to the extent provided
by Paragraph VI.B. above, and (c) if Landlord is not then administering the
service contract for the heating, ventilating and air conditioning system,
obtain, at Tenant’s sole cost, a certification from the company then regularly
maintaining the heating, ventilating and air conditioning system, stating that
the heating, ventilating and air conditioning system is in good operating
condition. Any items of Tenant’s personalty remaining in the Leased Premises
after the expiration or termination of the Lease shall be deemed abandoned by
Tenant and become the sole property of Landlord. Notwithstanding the foregoing,
any costs incurred by Landlord in storing and/or disposing of such abandoned
property shall remain the sole obligation of Tenant, which obligation shall
survive the expiration or termination of this Lease.

D. Conduct on Leased Premises. Tenant will neither do, nor permit anyone else to
do, anything on the Leased Premises which might or would: (i) increase any
insurance rates charged Landlord with respect to the Leased Premises or the
Building; (ii) violate the Park Restrictions or any legal requirements
applicable to the Project; or (iii) conflict with or invalidate any insurance
policy maintained by Landlord for the Leased Premises or the Project and of
which Tenant is made aware, in writing. If the insurance premiums of Landlord
are increased due to Tenant’s use or occupancy of the Leased Premises, then the
amount of such increase will be paid by Tenant to Landlord as Additional Rent as
it becomes due, and Landlord will have the same right to collect such amount as
Landlord has under this Lease to collect Additional Rent. Promptly after
Landlord becomes aware of any such potential increase, Landlord shall notify
Tenant of the condition or action giving rise to such increase so that Tenant
shall have an opportunity to correct or change such situation so as not to incur
such increased premium costs.

E. Insurance

1. Tenant’s Insurance. Tenant will purchase at its sole cost a policy of
commercial general liability insurance covering the Leased Premises and the
business conducted by Tenant there. The policy will be kept in force during the
entire Term. The policy will (a) have minimum limits of liability of
(1) $3,000,000 for bodily injury and property damage with

 

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respect to any one occurrence and (2) $3,000,000 with respect to the aggregate,
and (b) include umbrella coverage of not less than $10,000,000. Tenant shall
also carry (i) causes of loss-special form (formerly “all risk”) property
insurance for the full replacement cost of all Tenant’s personal property,
including furniture, trade fixtures and equipment located at the Leased Premises
and on all alterations, additions and improvements (including fixtures) made by
Tenant to the Building or the Property, and Landlord shall have no obligation or
liability therefor; (ii) business automobile liability insurance to cover all
owned, hired and nonowned automobiles owned or operated by Tenant providing a
minimum combined single limit of $1,000,000; (iii) workers’ compensation
insurance as required by the Commonwealth of Pennsylvania and in amounts as may
be required by applicable statute (provided, however, if no workers’
compensation insurance is statutorily required, Tenant shall carry workers’
compensation insurance in a minimum amount of $500,000); and (iv) employer’s
liability insurance in an amount of at least $500,000 per occurrence. Any
company underwriting any of Tenant’s insurance shall have, according to A.M.
Best Insurance Guide, a Best’s rating of not less than A- and a Financial Size
Category of not less than VIII. All commercial general liability, business
automobile liability and umbrella liability insurance policies shall name
Landlord (or any successor), CB Richard Ellis Realty Trust, Landlord’s property
manager, Landlord’s mortgagee (if any), and their respective members,
principals, beneficiaries, partners, officers, directors, employees, and agents,
and other designees of Landlord as the interest of such designees shall appear,
as “additional insureds” and such insurance shall be primary with Landlord’s
policy being secondary and noncontributory. Tenant shall give Landlord at least
30 days’ advance written notice of any change, cancellation, termination or
lapse of insurance. Tenant shall provide Landlord with a certificate of
insurance evidencing Tenant’s insurance prior to the earlier to occur of the
Lease Commencement Date or the date Tenant is provided access to the Leased
Premises for any reason, and upon renewals at least ten (10) days prior to the
expiration of the insurance coverage. All of Tenant’s insurance policies,
endorsements and certificates will be on forms and with deductibles and
self-insured retention, if any, reasonably acceptable to Landlord. The limits of
Tenant’s insurance shall not limit Tenant’s liability under this Lease.

2. Landlord’s Insurance. Landlord shall be obligated to obtain Landlord’s
Insurance. The term “Landlord’s Insurance” includes all insurance and all
required endorsements which Landlord’s lender requires Landlord to maintain, in
connection with Landlord’s ownership of the Leased Premises or any part thereof,
the Building, equipment, fixtures and other improvements installed and/or owned
by Landlord and used in connection with the Building and/or the Leased Premises
and/or all alterations, rebuilding, replacements and additions thereto, insuring
the same against commercial general liability or loss or damage by fire,
lightning, explosion, vandalism, malicious mischief, sprinkler leakage (if
sprinklered), flood, windstorm (including named windstorm), earthquake and such
other hazards, casualties, risks and contingencies now covered by or that may
hereafter be considered as included within, the standard casualty and property
insurance policy, or such other casualties as Landlord’s lender may require.
Landlord’s Insurance shall also include: (i) insurance for loss of rent arising
out of any of the occurrences covered by such insurance, and (ii) commercial
general liability coverage to be carried by Landlord in such amounts as would be
customarily carried by a landlord of other Class A office buildings in the
Metropolitan Area. Landlord also may carry, as Landlord’s Insurance, such other
insurance as would customarily be carried by a landlord of other Class A office
buildings in the Metropolitan Area. Property insurance with respect to the
Building shall be carried by Landlord in an amount at least equal to the actual
replacement costs of the

 

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Building. Landlord shall use the same efforts as landlords of other Class A
office buildings in the Metropolitan Area to obtain Landlord’s Insurance at
competitive rates. Tenant shall, as a part of Operating Expenses, reimburse
Landlord for the premiums for and costs of all policies of Landlord’s Insurance.

3. Waiver of Subrogation. To the extent of receipt of insurance proceeds from
policies required hereunder, Landlord and Tenant hereby mutually waive all
claims for recovery from the other for any loss or damage to any of Landlord’s
or Tenant’s property insured (or required to be insured) under insurance
policies to the extent of any recovery for loss insured under those policies.
The parties agree that a mutual waiver of subrogation clause will be included in
each insurance policy setting forth that the insurance will not be invalidated
in the event that the insured waives in writing, before any loss, any or all
right of recovery against the other party for any insured loss.

F. Liens. Tenant will not do anything, or permit anything to be done, which
subjects all or any part of the Leased Premises or Tenant’s interest therein to
any lien or encumbrance, including but not limited to mechanics’ or
materialmen’s liens. If at any time prior to or during the Term (or within the
statutory period thereafter if attributable to Tenant), any mechanics’ or other
lien or order for payment of money, which shall have been either created by,
caused (directly or indirectly) by, or suffered against Tenant, shall be filed
against the Leased Premises or any part thereof, Tenant, at its sole cost and
expense, shall cause the same to be discharged by payment, bonding or otherwise,
within thirty (30) days after the filing thereof unless such lien or order is
contested by Tenant in good faith and Tenant provides sufficient security or
evidence of financial ability, in each case to the reasonable satisfaction of
Landlord, to pay the amount of such lien or order. Tenant shall, upon notice and
request in writing by Landlord, defend for Landlord, at Tenant’s sole cost and
expense, any action or proceeding which may be brought on or for the enforcement
of any such lien or order for payment of money, and will pay any damages and
satisfy and discharge any judgment entered in such action or proceeding and save
harmless Landlord from any liability, claim or damage resulting therefrom. In
the event of default of Tenant’s procuring the discharge of any such lien as
aforesaid Landlord may, without notice, and without prejudice to its other
remedies hereunder, procure the discharge thereof by bonding or payment or
otherwise, and all cost and expense which Landlord shall incur shall be paid by
Tenant to Landlord as Additional Rent. Landlord shall not under any
circumstances be liable to pay for any work, labor or services rendered or
materials furnished to or for the account of Tenant upon or in connection with
the Leased Premises, and no mechanics’ or other lien for such work, labor or
services or material furnished shall, under any circumstances, attach to or
affect the reversionary interest of Landlord in and to the Leased Premises or
any alterations, repairs, or improvements to be erected or made thereon. Nothing
contained in this Lease shall be deemed or construed in any way as constituting
the request or consent of Landlord, either express or implied, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvement,
alteration to or repair of the Leased Premises or any part thereof, nor as
giving Tenant any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials on behalf of
Landlord that would give rise to the filing of any lien against the Leased
Premises.

 

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G. Environmental Assurances.

1. Landlord’s Representations. Landlord represents and warrants to its current
actual knowledge as of the Effective Date that, except as disclosed in third
party environmental reports in Landlord’s possession (copies of which have been
delivered to Tenant) no Hazardous Substances exist at the Leased Premises in
excess of reportable standards, or which violate site closure conditions as
required by applicable governmental authorities.

2. Tenant’s Covenants. Tenant covenants with Landlord:

(a) that Tenant shall not Generate (as hereinafter defined) Hazardous Substances
at, to or from the Leased Premises other than customary amounts of Hazardous
Substances found in a typical office use of the same size as the Leased
Premises;

(b) to comply with all obligations imposed by applicable law, and regulations
promulgated thereunder, and all other restrictions and regulations related to
Hazardous Substances;

(c) to deliver promptly to Landlord true and complete copies of all notices
received by Tenant from the United States Environmental Protection Agency, the
Pennsylvania Department of Labor and Industry, the United States Occupational
Safety and Health Administration, and/or any other governmental agency or
instrumentality with respect to Hazardous Substances on the Leased Premises; and

(d) to permit entry onto the Leased Premises by Landlord or Landlord’s
representatives during normal business hours upon not less than two (2) Business
Days’ prior written notice to Tenant and in the presence of a designated Tenant
representative (Tenant covenanting to make such a representative available and,
if Tenant does not do so, then such entry is permitted without a Tenant’s
representative being present) to verify and monitor Tenant’s compliance with its
representations, warranties and covenants set forth in this Paragraph.

3. Indemnification. Tenant agrees to defend with legal counsel reasonably
acceptable to Landlord, indemnify and hold Landlord (and its owners,
shareholders, employees and authorized agents) harmless from and against any
claims, demands, actions, suits, proceedings, judgments, damages, losses, costs,
fees or expenses (including, without limitation, environmental assessment,
investigation and environmental remediation expenses to the extent such
assessment, investigation and/or remediation is required by the regulatory
authority(ies) with jurisdiction, third party claims and reasonable attorneys’
fees and expenses) incurred by the indemnitee in connection with Tenant’s
Generation of Hazardous Substances at, to or from the Leased Premises or the
Project in violation of applicable law or in connection with Tenant’s failure to
comply with its representations, warranties and covenants set forth in this
Paragraph. This indemnification by Tenant will remain in effect after the
termination or expiration of this Lease.

H. Security Services. Tenant shall have the right, at its sole cost and expense,
to install a security system within the Building. Tenant shall have the right to
provide, at its sole cost and expense, a security force to regularly patrol and
inspect the Leased Premises. Such security force will coordinate and cooperate
with Landlord and will provide Landlord with appropriate contact numbers and
emergency procedures.

 

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I. Smoke Free. Landlord and Tenant shall each abide by all applicable ordinances
and policies respecting a smoke free environment in the Building.

J. Signage. Tenant shall have the right, at its sole cost and expense, to erect
an identification sign for Tenant on the exterior of the Building, subject,
however, to Tenant’s obtaining the prior written approval of such signs from
Landlord (such approval not to be unreasonably withheld, conditioned or delayed)
and subject further to the Park Restrictions and to the approval of any
applicable governmental or quasi-governmental agencies. Such signs shall be
installed by a reputable contractor reasonably acceptable to Landlord. In
addition, subject to all applicable laws and the Park Restrictions, Tenant shall
be entitled to (i) name that portion of any roadway located on the Leased
Premises which serves or provides access to the Building or related parking
areas, and (ii) construct and maintain a monument sign on the Leased Premises
(the “Monument Sign”), provided that the location, size, design, and appearance
of the Monument Sign shall be subject to Landlord’s prior written approval,
which shall not be unreasonably withheld, conditioned, or delayed. The
construction, installation, maintenance, repair and replacement of the Monument
Sign shall be at Tenant’s sole cost and expense. In addition, Tenant shall be
responsible for obtaining any and all necessary approvals from any agency,
department, commission, board, bureau or instrumentality having jurisdiction
over the Leased Premises and/or the Project, prior to the construction and
installation of the Monument Sign. Any changes requested by Tenant to be made to
the Monument Sign shall be subject to Landlord’s prior written approval, which
shall not be unreasonably withheld, conditioned, or delayed, and, if approved,
shall be made by Tenant at Tenant’s sole cost and expense. Tenant shall hold
Landlord harmless from any damage caused to the Building or the Leased Premises
as a result of the installation and maintenance of such signs. Upon expiration
or earlier termination of this Lease, it shall be Tenant’s obligation, at its
sole expense, to remove such signs and to restore the exterior faces of the
Building to their condition prior to erecting such signs, normal wear and tear
excepted.

K. Rooftop Equipment.

1. Notwithstanding the general prohibition against further alterations,
additions and improvements set forth in Paragraph VI.B above, but subject to the
terms therein and the terms set forth in Paragraph VI.C.5 and this Paragraph
VI.K, Tenant is hereby given permission to install transmitting and receiving
equipment, including antennae (the “Communications Equipment”) on the roof of
the Building.

2. The Communications Equipment shall be used solely to transmit and receive
signals in the ordinary course of Tenant’s own business at the Leased Premises
and not (i) for the transmission or receipt of signals on behalf of any third
party outside of Tenant’s ordinary business, or (ii) as part of any
telecommunications business. Use of the Communications Equipment is restricted
solely to Tenant and may not be sold, assigned, leased or otherwise made by any
third party.

 

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3. Tenant shall bear all of the cost and expense of designing, purchasing,
installing, operating, maintaining, repairing, removing and replacing the
Communications Equipment, and for repairing or restoring any damage to the
Building, the Leased Premises or to Landlord’s or any other person’s or entity’s
property arising therefrom.

4. Tenant shall be responsible for obtaining any and all federal, state, county
and municipal governmental permits, approvals, licenses and certificates
necessary for the installation and operation of the Communications Equipment,
and shall comply with all laws, statutes, ordinances, codes, rules and
regulations relating thereto, including (without limitation) building and zoning
codes, and the Park Restrictions. Upon written request from Tenant, Landlord
shall reasonably cooperate with Tenant, but without expense to Landlord or
significant involvement by Landlord’s personnel, in obtaining any necessary
permits, approvals, licenses and certificates for the installation and operation
of the Communications Equipment to the extent such permits, approvals, licenses
and certificates are customary and do not involve receipt of a variance or
change in any zoning applicable to the Property. Tenant shall reimburse Landlord
within ten (10) days following written demand for all reasonable costs incurred
by Landlord in connection with its efforts to cooperate with Tenant in obtaining
such permits, approvals, licenses or certificates.

5. Tenant shall be solely liable for and shall defend, indemnify and hold
Landlord harmless from and against any damage claimed to be incurred by a third
party as a result of interference from the Communications Equipment.

6. The Communications Equipment shall be installed in a manner reasonably
acceptable to Landlord. In addition to other factors set forth in this Lease,
Landlord may consider the quality of the proposed physical installation and its
safety, and the size, shape and appearance of the Communications Equipment and
its effect on the Building’s appearance. Without limiting the foregoing, the
Communications Equipment must be securely affixed to the roof so as to prevent
its dislodging in high winds. All wires and cable must be installed in Building
conduit or in an alternative conduit approved by Landlord and must be properly
shielded. No Communications Equipment is permitted if its installation will void
or adversely affect any warranty of the roof or if its installation and/or
operation would otherwise adversely affect the Building.

7. Tenant shall have the right to sole access and control of the roof of the
Building except in emergency situations involving imminent threat to safety,
property (including the Building) or life. If Landlord, its representatives or
their respective employees require access for emergencies, inspections, or
repairs, Landlord shall give Tenant prompt notice thereof and shall make all
reasonable efforts to coordinate such access such that all such persons shall be
accompanied by Tenant.

8. Notwithstanding any provision of this Lease to the contrary, unless otherwise
agreed to in writing by Landlord and Tenant at the time Tenant installs the
Communications Equipment, the Communications Equipment shall remain the property
of Tenant during and after installation and shall be removed by Tenant at its
expense at the expiration or earlier termination of the Term.

 

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9. Tenant shall be solely responsible for the Communications Equipment, any
damage thereto, and for any damage caused to the Building or the Leased Premises
as a result of or caused by the Communications Equipment.

L. Recycling Regulations. Tenant shall comply with all applicable laws of any
governmental body having jurisdiction over the Building, whether required of
Landlord or otherwise, regarding the collection, sorting, separation and
recycling of waste products, garbage, refuse and trash (hereinafter collectively
called “waste products”) including but not limited to the separation of such
waste products into proper receptacles and the removal of such receptacles in
accordance with any collection schedules prescribed by such applicable laws.

M. General Provisions Regarding Tenant’s Use. Tenant shall not place a load upon
any floor of the Building which exceeds the maximum live load per square foot
which Landlord (or Landlord’s architect or engineer) reasonably determines is
appropriate for the Building without Landlord’s prior written consent. All
voice, data, video, audio and other low voltage control transport system cabling
and/or cable bundles installed in the Building by Tenant or its contractor shall
be (i) plenum rated and/or have a composition makeup suited for its
environmental use in accordance with NFPA 70/National Electrical Code;
(ii) labeled every 3 meters with the Tenant’s name and origination and
destination points; (iii) installed in accordance with all EIA/TIA standards and
the National Electrical Code; and (iv) installed and routed in accordance with a
routing plan showing “as built” or “as installed” configurations of cable
pathways, outlet identification numbers, locations of all wall, ceiling and
floor penetrations, riser cable routing and conduit routing (if applicable), and
such other information as Landlord may request. The routing plan shall be
available to Landlord and its agents at the Building upon request.

N. Acceptance of Leased Premises. The taking of possession of the Leased
Premises by Tenant on the Lease Commencement Date shall constitute an
acknowledgment by Tenant that, other than with respect to latent defects and
completion of punchlist items, (i) the Leased Premises are in good condition,
that Landlord has provided or constructed all improvements to be provided or
constructed by Landlord in the Leased Premises in accordance with Exhibit D,
attached hereto, and (ii) all materials and labor provided by Landlord are
satisfactory. Upon Landlord’s request, Tenant shall provide written confirmation
of the foregoing.

O. Mortgagees. Subject to Tenant’s receipt of a SNDA (as defined in Paragraph
XIV(A)), Tenant agrees to give any mortgagee(s) and/or trust deed holder(s), by
certified mail, a copy of any notice of default served upon the Landlord,
provided that prior to such notice Tenant has been notified in writing (by way
of notice of assignment of rents and leases, or otherwise) of the addresses of
such mortgagee(s) and/or trust deed holder(s). Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the mortgagee(s) and/or trust deed holder(s) shall have an
additional commercially reasonable period of time within which to cure such
default. The provisions of this Paragraph shall be superseded by the terms of
any SNDA executed by Tenant and a mortgagee or trust deed holder.

 

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VII. LANDLORD’S RIGHTS AND RESPONSIBILITIES

A. Access. Landlord or its authorized agent or representative (e.g., a property
manager, asset manager, other advisor, broker, or actual or prospective
purchaser or mortgagee or deed of trust holder, etc.) will have the right to
enter and examine the Leased Premises (except for secured areas) for any
reasonable purpose (including showing the Leased Premises to prospective tenants
during the last twelve (12) months of the Term) with at least two (2) Business
Days’ prior written notice to Tenant and in the presence of a designated Tenant
representative (Tenant covenanting to make such a representative available and,
if Tenant does not do so then such entry is permitted without a Tenant’s
representative being present), or at any time in the event of an emergency. If
the Leased Premises are accessed by Landlord or its authorized representatives
in the case of an emergency, Landlord shall inform Tenant in writing within
twenty-four (24) hours after such emergency, indicating the nature of the
situation and the outcome.

B. Building Repairs. Subject to the terms of Paragraph VI.C.1 above, Landlord
shall make such repairs and replacements to the Structural Portions of the
Building as required by Best Management Practices of Class A office parks in the
Metropolitan Area. In making such repairs and replacements, Landlord shall use
its reasonable efforts to see that its contractors, subcontractors, agents,
invitees, etc. do not generate noise or dirt or undertake any activities which
unreasonably interfere with the conduct of Tenant’s business at the Leased
Premises. Tenant shall not be entitled to an abatement or diminution of Rent
during any period of such repairs or replacements, unless such repairs or
replacements arise from a defect in the Structural Portions of the Building and
Landlord determines, in its reasonable discretion, that Tenant is unable to use
the Leased Premises, or any portion thereof, during the performance of such
repairs or replacements, in which event the Basic Annual Rent shall be abated
proportionately as to the portion of the Leased Premises rendered unusable and
only for the time such portion of the Leased Premises is rendered unusable due
to the performance of such repairs or replacements; provided, however, that
Tenant shall not be entitled to such abatement to the extent the need for such
repairs or replacements resulted from the wrongful acts or inaction of Tenant.

C. Parking. Landlord shall initially provide Tenant with not less than nine
hundred (900) parking spaces at the Leased Premises in accordance with the
Parking Lot Plans (as defined in Exhibit D-1). Tenant may require Landlord to
cause the parking lot to be expanded to include an additional three hundred
(300) parking spaces, provided that the following conditions are satisfied:
(i) such expansion is permitted under public and private legal requirements
which are enacted or amended after the date Landlord obtains final approval for
the construction of the initial parking spaces required hereunder; (ii) Tenant
reasonably demonstrates to Landlord that such additional parking spaces are
needed for the conduct of Tenant’s business at the Leased Premises; and
(iii) Tenant provides Landlord not less than one hundred twenty (120) days’
prior written notice of the need for such additional parking spaces.
Notwithstanding the foregoing, Landlord, in its sole discretion, may at any time
cause the parking lot to be expanded to include an additional three hundred
(300) parking spaces. Tenant shall have access to all parking spaces and
Landlord may not assign any unreserved or unassigned parking spaces at the
Leased Premises to third parties. Tenant shall have the right, subject to
applicable legal requirements, from time to time to assign reserved parking
spaces for use by its visitors, employees and subtenants.

 

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D. Liens. Except for the Restrictions and Park Restrictions (and any amendments
thereto permitted by this Lease) as well as any liens or deeds of trust,
mortgages, assignments of rents and leases, and security agreements granted as
part of the financing of the Leased Premises or the Project from time to time,
Landlord will not do anything, or permit anything to be done, which subjects all
or any part of the Leased Premises to any lien or encumbrance including but not
limited to, mechanics’ or materialmen’s liens. If any such lien is filed
purporting to be for work or material furnished to Landlord, then Landlord must
have such lien discharged or bonded within thirty (30) calendar days of
Landlord’s receipt of written notice from Tenant of the filing of such lien.

E. Landlord’s Environmental Obligations

1. Covenants. Landlord covenants with Tenant that Landlord (i) shall not
Generate Hazardous Substances at the Leased Premises; and (ii) shall deliver to
Tenant, without any representation or warranty, a copy of any environmental
audit in Landlord’s or Landlord’s agent’s possession as of the date hereof.

2. Indemnification. Landlord agrees to defend with legal counsel reasonably
acceptable to Tenant, indemnify and hold Tenant (and its authorized agents)
harmless from and against any claims, demands, actions, suits, proceedings,
judgments, damages, losses, costs, fees or expenses (including, without
limitation, environmental assessment, investigation and environmental
remediation expenses, third party claims and environmental impairment expenses
and reasonable attorneys’ fees and expenses) incurred by the indemnitee in
connection with Landlord’s Generation of Hazardous Substances at, to or from the
Leased Premises or the Project or in connection with Landlord’s failure to
comply with its representations, warranties and covenants set forth in this
Paragraph. This indemnification by Landlord will remain in effect after the
termination or expiration of this Lease.

F. Inspections; Management. Upon providing Tenant at least two (2) days prior
notice, Landlord shall have the right to make an inspection of the Leased
Premises to verify compliance by Tenant with its obligation to manage, operate,
maintain and repair the Leased Premises in accordance with Best Management
Practices of Class A office parks in the Metropolitan Area. In the event that
the Leased Premises is not being maintained by Tenant in accordance with Best
Management Practices of Class A office parks in the Metropolitan Area, Landlord
shall give Tenant written notice that identifies the obligation(s) or
condition(s) requiring performance in reasonable detail and notifies Tenant that
such condition(s) must be cured within thirty (30) days after Tenant’s receipt
of such notice or Landlord may terminate Tenant’s right to self-manage the
Leased Premises (the “Termination Warning”). If Tenant fails to cure such
failure(s) within such thirty (30) day period, then Landlord may elect to
(i) terminate Tenant’s right to self-manage the Leased Premises by delivering
written notice thereof to Tenant (a “Management Notice”), in which event
Landlord shall assume

 

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such management of the Leased Premises as of the termination date specified by
Landlord in such written notice; or (ii) make the repair or perform the
defaulted obligation on behalf of Tenant and charge Tenant, as Additional Rent
due thirty (30) days after Landlord’s demand, the documented cost thereof. In
addition to and without limiting the foregoing, during the existence of any
monetary Event of Default, Landlord shall be entitled to terminate Tenant’s
right to self-manage the Leased Premises by delivering a Management Notice to
Tenant, in which event Landlord shall assume such management of the Leased
Premises as of the termination date specified by Landlord in such written
notice. The date specified in a Management Notice on which Landlord will assume
the management of the Leased Premises pursuant to this Paragraph VII.F. is
referred to as the “Management Change Date” for purposes of this Lease.
Commencing on the Management Change Date, Landlord shall manage, operate,
maintain and repair the Leased Premises in accordance with Best Management
Practices of Class A office parks in the Metropolitan Area as set forth on
Addendum 2 of this Lease. Tenant shall reimburse Landlord, as part of Operating
Expenses, all costs and expenses arising from Landlord’s performance of its
obligations hereunder, which reimbursement (together with a management fee as
provided for in the definition of Operating Expenses hereunder) shall be in
addition to all other Additional Rent payable by Tenant hereunder.

G. Additional Provisions. Landlord and its agents, officers, directors and
employees assume no liability or responsibility whatsoever with respect to the
conduct or operation of the business to be conducted in the Leased Premises and
shall not be liable for any loss, injury or damage to property caused by or
resulting from any variation, interruption, or failure of utility or other
services due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance that is Tenant’s responsibility pursuant to this Lease.
In no event shall Landlord be liable to Tenant for (i) any damage to the Leased
Premises, except to the extent caused by the gross negligence or willful
misconduct of Landlord, its agents, contractors or employees, (ii) any loss,
damage or injury to any property therein or thereon except to the extent caused
by the gross negligence or willful misconduct of Landlord, its agents,
contractors or employees, (iii) any claims for the interruption of or loss to
Tenant’s business or for any indirect damages or consequential losses occasioned
by bursting, rupture, leakage or overflow of any plumbing or other pipes or
other similar cause in, above, upon or about the Leased Premises, or
(iv) Tenant’s management of the Leased Premises.

H. Indemnification by Tenant. Tenant agrees to hold Landlord and its agents,
officers, directors and employees harmless against all such claims, except to
the extent resulting from the gross negligence or willful misconduct of
Landlord, its agents, contractors or employees during any period of the Term, or
to the extent resulting from the ordinary negligence of Landlord, its agents,
contractors or employees during any period following the Management Change Date
during which Landlord is managing the Leased Premises. Landlord and its agents,
officers, directors and employees shall not be liable to Tenant, its employees,
agents, business invitees, licensees, customers, clients, family members or
guests for any damage, compensation or claim arising out of or related to
managing the Leased Premises, repairing any portion of the Leased Premises, the
interruption in the use of the Leased Premises, accident or damage resulting
from the use or operation (by Landlord and its agents, officers, directors and
employees, Tenant, or any other person or persons whatsoever) or failure of
elevators, or heating, cooling, electrical or plumbing equipment or apparatus,
or the termination of this Lease by reason of the destruction of the Leased
Premises, or from any fire, robbery, theft, mysterious disappearance and/or any
other casualty, or from any leakage in any part of portion of the Building, or
from water, rain or snow that may leak into or flow from any part of the
Building, or from any other cause whatsoever, unless occasioned by the gross
negligence or willful misconduct of Landlord, its agents, contractors and
employees. If any public utility or governmental body shall require Landlord or
Tenant to restrict the consumption of any utility or reduce any service to the
Leased Premises, Landlord and Tenant shall comply with such requirements,
without any abatement or

 

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reduction of the Basic Annual Rent, Additional Rent or other sums payable by
Tenant hereunder. Any goods, property or personal effects, stored or placed by
Tenant in or about the Leased Premises shall be at the sole risk of Tenant, and
Landlord and its agents, officers, directors and employees shall not in any
manner be held responsible therefor, except if such injury or damage results
from Landlord’s (or its agent’s or affiliate’s) gross negligence or willful
misconduct. Notwithstanding the foregoing, in the event that an interruption in
any utilities or services caused by the gross negligence or willful misconduct
of Landlord renders the Leased Premises or a portion thereof untenantable for
general office use, provided such interruption (i) is not caused by Tenant, its
agents, employees, contractors or invitees, (ii) exists for more than five
(5) consecutive business days, and (iii) Tenant in fact ceases to use the Leased
Premises or such portion during such period of cessation or interruption (an
“Interruption”), then, commencing on the sixth (6th) business day after such
Interruption, Rent hereunder shall be abated until such services or utilities
have been restored (or, if earlier, the date Tenant re-opens for business in the
Leased Premises or applicable portion thereof). The foregoing specific remedies
shall be Tenant’s sole and exclusive remedies resulting from such Interruption.

I. Park Restrictions. Landlord shall exercise its rights under the Declaration
to cause the Atwater Owners Association to maintain the common elements of the
Project in accordance with the requirements of the Park Restrictions.

J. Construction Warranty. Landlord warrants that Landlord’s Work shall be free
from defects in materials or workmanship for a period of one year following
Substantial Completion. Landlord shall promptly repair or replace any defective
portion of Landlord’s Work as to which Landlord receives written notice of such
defect prior to the one year anniversary of Substantial Completion.

 

VIII. DAMAGE AND DESTRUCTION

A. General Rule. If during the Term, the Building becomes damaged or destroyed
in whole or in part by fire, other casualty or any other cause (except
condemnation), Tenant will immediately notify Landlord of such event. Subject to
Paragraph VIII.B below, this Lease will remain in full force and effect, except
that the Rent will be abated proportionately to the extent and for the period
that all or a portion of the Leased Premises are rendered untenantable (provided
Tenant does not in fact utilize the untenentable portion of the Leased Premises)
as a result of such casualty damage. Within thirty (30) days after the date of
the casualty Landlord shall cause Landlord’s Architect to prepare a written
estimate of the time period required to repair and restore the damaged portions
of the Building and deliver such estimate to Tenant.

B. Mutual Right of Termination. In the event that, based on the written estimate
of Landlord’s Architect, the damage or destruction to the Leased Premises is so
extensive that it cannot be repaired or restored within a period of eighteen
(18) months, measured from the date of Landlord’s receipt of insurance proceeds
from the insurer of the Building, each of Landlord and Tenant shall have the
unilateral right to terminate this Lease upon written notice to the other given
within fifteen (15) Business Days after Tenant’s receipt of Landlord’s
Architect’s written estimate. This Lease will then terminate one day after
either party gives the other written notice of its desire to terminate the
Lease. In the event of such termination, the Rent will be adjusted and paid to
the date of the damage or destruction, and Tenant will immediately vacate and

 

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surrender the Leased Premises (including the Building) upon such termination;
provided that Tenant shall not be released from responsibility for any of its
obligations under this Lease for the period before such termination, or for any
of its obligations under this Lease which expressly survive such termination. If
neither party exercises such termination option, Paragraph VIII.C below shall
govern.

C. Restoration by Landlord. Unless this Lease is terminated as set forth above,
Landlord shall (a) repair or restore the damaged portions of the Leased Premises
with reasonable speed, subject to reasonable delays for adjusting losses under
insurance policies and Force Majeure and (b) this Lease shall remain in effect
as set forth in Paragraph VIII.A above. In such event, running of Lease Years
and Operating Years will be tolled while Rent is abated and the stated
expiration date of the Term shall automatically be extended for the period of
time equal to the period between the date of the damage or destruction until the
date the Leased Premises are sufficiently repaired or restored so that they can
be beneficially used for the uses permitted by this Lease. Tenant agrees that
after completion of such work by Landlord, Tenant will, at Tenant’s sole cost
and expense, repair and replace all alterations, additions, improvements,
fixtures, signs and equipment installed by Tenant prior to the date of damage or
destruction. Notwithstanding the foregoing, in the event the restoration of the
affected Building is not substantially completed within the earlier of
(i) eighteen (18) months following the date of Landlord’s receipt of insurance
proceeds from the insurer of the Building, or (ii) the estimated restoration
period, measured from the date of Landlord’s receipt of insurance proceeds from
the insurer of the Building, provided by Landlord’s Architect pursuant to
Paragraph VIII.B., each such deadline subject to extension caused by Force
Majeure, then Tenant shall have the right to terminate this Lease by written
notice to Landlord at any time until Landlord substantially completes the repair
and restoration.

 

IX. CONDEMNATION

A. Termination. This Lease will terminate immediately upon: (1) a taking or
condemnation of the entire Leased Premises for public purposes; (2) a partial
taking which prevents Tenant from being reasonably able to use the remainder of
the Leased Premises for the purposes intended by this Lease; (3) a taking or
condemnation reduces the number of parking spaces at the Leased Premises to less
than the minimum number of spaces which Landlord is then required to provide
pursuant to Paragraph VII.C. (the “Minimum Required Parking”) and Landlord
fails, within six (6) months following the date of the taking or condemnation,
to provide additional parking within the Project reasonably convenient to the
Building in order to provide such Minimum Required Parking; or (4) with respect
to the Leased Premises, upon Landlord’s conveyance or lease of the Leased
Premises to any condemning authority in settlement of a threat of condemnation
or taking. The Rent will be adjusted to the date of termination due to such
taking, leasing or conveyance.

B. Award. In the event of a partial taking for which this Lease is not
terminated, the Rent will abate in an amount which, in Landlord’s and Tenant’s
reasonable judgment, is proportionate to the extent the Leased Premises are
rendered untenantable for the ordinary course of Tenant’s business. Tenant,
however, will not have any claim against Landlord, nor any claim for any award
from the condemning authority arising out of any such taking, lease, conveyance
or condemnation action nor in any way arising out of its leasehold interest in
the Leased

 

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Premises, but will have the right to pursue a separate claim against the
condemning authority for its own loss of business and moving expenses. In
addition, notwithstanding the immediately preceding sentence, Tenant shall have
a claim against Landlord if Landlord receives a portion of any award based
solely on property owned or leased by Tenant in the Leased Premises. If there is
property in the Leased Premises for which Tenant has paid all or some portion of
the cost but which Tenant does not own, Landlord and Tenant shall reasonably
determine whether, and to what extent, Tenant shall have a claim against
Landlord if Landlord receives a portion of any award based solely on such
property. Landlord will give Tenant as much notice as reasonably possible that
such condemnation or taking might occur so that Tenant, in its sole discretion,
can remove from the Leased Premises any property wholly owned or leased by
Tenant.

 

X. HOLDING OVER

This Lease is for a specific Term. Except as set forth below, if Tenant, without
Landlord’s specific written consent, continues its possession of the Leased
Premises after the expiration or earlier termination date of this Lease, then
all of the following conditions will apply: (i) Tenant will occupy the Leased
Premises as a month to month tenant on the terms of this Lease, except that its
occupancy will be at one hundred fifty percent (150%) of the monthly Basic
Annual Rent payable during the last year of the Term and one hundred percent
(100%) of the monthly Additional Rent as determined hereunder and will be
subject to termination on thirty (30) calendar days’ prior written notice from
either party to the other; and (ii) in the event such holdover by Tenant
continues for a period of sixty (60) days following Tenant’s receipt of written
notice that Landlord has executed a term sheet for the lease of the Leased
Premises (or any portion thereof) by a new tenant, Tenant will defend, indemnify
and hold Landlord harmless from and against any and all claims, demands,
actions, suits, proceedings, judgments, damages, losses, costs or expenses
(including reasonable attorneys’ fees) incurred by Landlord in connection with
claims or litigation (e.g., due to a delayed commencement date for a new tenant)
arising because of such holdover by Tenant.

The foregoing notwithstanding, Tenant shall have the right to extend the Term
for up to an additional six (6) months (as specified in Tenant’s written notice)
by giving written notice to Landlord prior to the later of the date twelve
(12) months prior to the expiration of the Term or the date Landlord has
provided Tenant with notice that Landlord has leased the Leased Premises or any
part thereof to a substitute tenant. Such short-term extension shall be on all
of the terms and conditions of this Lease; provided that, rather than the
holdover Rent as set forth above, the Basic Annual Rent shall be escalated for
such period to an amount equal to one hundred five percent (105%) of the
immediately prior Basic Annual Rent and shall be paid, together with Additional
Rent, for each month, or part thereof, of such holdover period. Tenant hereby
waives any and all notices to quit under the Pennsylvania Landlord and Tenant
Act.

 

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XI. DEFAULT

A. Events of Default. Upon the expiration of any applicable notice or cure
period, each of the following constitutes a material breach and a default by
Tenant or Landlord, as the case may be, under this Lease (an “Event of
Default”):

1. If Tenant (i) files a petition for relief under the Bankruptcy Code, or under
any other present or future state or federal law regarding bankruptcy,
reorganization or other debtor relief law, (ii) files any pleading or an answer
in any involuntary proceeding wherein Tenant is a debtor under the Bankruptcy
Code or other debtor relief law which admits the jurisdiction of the court of
the petition’s material allegations regarding Tenant’s insolvency, (iii) makes
an assignment for the benefit of creditors; (iv) applies for, or the appointment
of, a receiver, trustee, custodian or liquidator for Tenant or its property,
(v) dissolves, or (vi) is a party to any order or decree entered by a court of
competent jurisdiction enjoining or prohibiting Tenant from performing its
obligations under this Lease, then and in any said events if such condition is
not cured, within thirty (30) days of Tenant’s receipt of written notice of such
condition from Landlord (or such additional time as is reasonably necessary to
cure or correct such condition so long as Tenant uses Tenant’s good faith
efforts to diligently pursue such cure and/or correction to completion), at
Tenant’s option, by: (A) correcting or eliminating such condition; or
(B) providing Landlord with an irrevocable standby letter of credit in the
amount equal to the Basic Annual Rent payable by Tenant for the then-current
calendar year.

2. Tenant’s or Landlord’s making an assignment for the benefit of creditors.

3. The filing of a tax lien against any property of Tenant or Landlord, which
tax lien is not bonded or discharged within thirty (30) calendar days after its
filing.

4. Tenant’s causing or permitting the Leased Premises to be vacant, or its
abandoning or ceasing to do business (for the purpose specified in this Lease)
actively in the Leased Premises for a period in excess of five (5) calendar
days; provided, however, that Tenant’s vacating the Leased Premises shall not be
deemed an Event of Default so long as Tenant: (i) continues to pay all sums
payable by Tenant hereunder when due; (ii) continues to perform all other
obligations of Tenant hereunder when the same are required to be performed;
(iii) provides Landlord at least thirty (30) calendar days prior written notice
of the date of Tenant’s vacating, the reason for Tenant’s vacating and Tenant’s
updated address for notices; and (iv) Tenant maintains a temperature of at least
55° Fahrenheit in the Building at all times.

5. Tenant’s failure to pay Rent when due and such failure continues for more
than five (5) Business Days after written notice of such failure to Tenant
(provided, however, that for each calendar year during which Landlord has
already given Tenant two (2) written notices of a failure to pay Rent, no
further notice shall be required).

6. Tenant’s or Landlord’s failure to perform any other term, covenant or
condition required by this Lease and such failure to cure within thirty
(30) calendar days after receipt of written notice of such failure from Landlord
or Tenant, as the case may be, which thirty (30) calendar days shall be extended
for a reasonable period if the defaulting party promptly has commenced and is
proceeding diligently to cure such failure.

Upon the occurrence of an Event of Default, Landlord shall, in addition to all
rights and remedies of Landlord set forth in this Lease, be excused from any
performance obligations hereunder, including without limitation the completion
of Landlord’s Work (as defined in Exhibit D-1).

 

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B. No Waiver of Default. Even if Landlord or Tenant does not seek the other’s
strict performance of any provision of this Lease, or does not exercise any
right it has, neither Tenant nor Landlord will be construed as waiving its right
to strictly enforce Landlord’s or Tenant’s performance in the future. There will
be no waiver by Landlord or Tenant of any Lease provision unless expressed in
writing and signed by the party against whom such waiver is being alleged. If
Landlord receives Rent with knowledge of Tenant’s breach of this Lease, or
Tenant pays Rent with knowledge of Landlord’s breach of this Lease, then neither
party will be construed as having waived such breach.

C. Damages. Subject to the terms and provisions of, and except as otherwise
expressly provided in, this Lease, in the event of any Event of Default, the
non-defaulting party will be entitled to receive from the defaulting party as
damages, upon demand, all reasonable expenses which the non-defaulting party
incurs as a result of such breach.

D. Termination of Lease and Possession of Leased Premises.

1. Upon any Event of Default by Tenant, Landlord may then, upon at least five
(5) calendar days’ prior written notice to Tenant, terminate this Lease and/or
Tenant’s right to possess the Leased Premises without terminating this Lease.
Landlord may then (with or without formal court action) take possession of the
Leased Premises and remove Tenant or any other occupant, and any property,
whether belonging to Landlord, Tenant or others (but subject to being redeemed
by Tenant upon Tenant’s prompt cure of such default and payment of any costs
incurred in removing and/or storage of such property) without relinquishing any
other rights Landlord may have against Tenant. The five-day notice set forth
above in this subparagraph is for notice purposes only and does not create,
grant or allow (nor shall it be interpreted to create, grant or allow) an
additional cure period, opportunity to cure, right of redemption, or other
similar right.

2. If Landlord terminates Tenant’s possession of the Leased Premises without
terminating this Lease, Tenant shall immediately pay to Landlord on demand all
reasonable expenses incurred by Landlord to relet the Leased Premises, or any
portion thereof, including but not limited to, the cost of renovating,
remodeling, repairing and altering the Leased Premises for a new tenant or
tenants, advertisements, legal, and brokerage fees and any deficiency that may
arise by reason of such reletting. Landlord shall have the right as the agent of
Tenant to divide or subdivide the Leased Premises in any manner and relet the
Leased Premises, or any portion thereof, for a term or terms which may, at
Landlord’s option, be less than or exceed the period which would otherwise have
constituted the balance of the term of this Lease.

3. In addition to the damages set forth in Paragraph XI.C, if Landlord
terminates this Lease, Landlord will also be entitled to Rent due to the date of
termination plus, at Landlord’s option, either:

(a) Liquidated damages equal to the total Rent which Landlord would have
received under this Lease (had Tenant made all such Lease payments as required)
for the remainder of the Term minus the fair rental value of the Leased Premises
for the same period, discounted to present value at the Prime Rate (defined
below) in effect upon the date of determination. For purposes hereof, the “Prime
Rate” shall be the per annum interest rate

 

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publicly announced by PNC Bank National Association on the date of the
computation. If Landlord enters into a lease or a term sheet with an
unaffiliated third party in an arm’s-length transaction for the lease of the
Leased Premises, the rent payable pursuant to such lease or term sheet shall be
prima facie evidence of the fair rental value of the Leased Premises.

(b) Damages for each month of the unexpired portion of the Term from the date of
termination equal to the sum of (i) the aggregate expenses (other than
Additional Rent payable pursuant to Paragraph V.G.) paid by Landlord for items
which this Lease requires Tenant to pay for each applicable month; plus (ii) the
amount of the installments of Basic Annual Rent which would have been payable by
Tenant if this Lease had not been terminated; plus (iii) the monthly average of
Additional Rent payable pursuant to Paragraph V.G. paid in the Lease Year (or an
annualized portion if the Term has been less than a total of 12 months to the
date of termination) immediately preceding the Event of Default; plus
(iv) Landlord’s costs incurred (including court costs, attorneys’ fees and
similar costs of collection) in collecting such amounts, minus the rents, if
any, actually collected by Landlord for each such month through re-renting or
through permitted subleases of the Leased Premises. The damages under this
subparagraph will be due in monthly installments, in advance, on the first day
of each calendar month following such termination and will continue until the
originally-intended expiration of the Term. Landlord’s action to collect, or its
collection of, any damages for one month will not prejudice its rights to bring
actions to collect damages for subsequent months, whether in multiple actions
from time to time or in a single action brought after the originally-intended
expiration of the Term.

4. An acceptance of surrender of the Leased Premises must be in writing signed
by Landlord. Tenant’s liability under this Lease will not be terminated by the
execution of a lease with a new tenant for the Leased Premises.

5. LANDLORD AND TENANT AGREE THAT LANDLORD HAS NO DUTY TO MITIGATE UNDER
PENNSYLVANIA LAW; HOWEVER, IN THE EVENT LANDLORD DOES NOT TERMINATE THIS LEASE
FOLLOWING THE OCCURRENCE OF AN EVENT OF DEFAULT BY TENANT, LANDLORD AGREES TO
LIST THE LEASED PREMISES WITH A BROKER OR LEASING AGENT (INCLUDING IN-HOUSE
LEASING PERSONNEL) AND TAKE SUCH OTHER COMMERCIALLY REASONABLE ACTIONS TO RELET
THE LEASED PREMISES, SUBJECT TO THE FOLLOWING CONDITIONS:

(a) Landlord may elect to lease other available space in the Project, if any,
before reletting the Leased Premises;

(b) Landlord may elect to consent to the assignment or sublease by an existing
tenant of the Project before reletting the Leased Premises;

(c) Landlord may decline to incur out-of-pocket costs to relet the Leased
Premises, other than customary leasing commissions and legal fees for the
negotiation of a lease with a new tenant;

 

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(d) Landlord may decline to relet the Leased Premises at rental rates below then
prevailing market rental rates;

(e) Landlord may decline to relet the Leased Premises to a prospective tenant if
the nature of such prospective tenant’s business is not, in Landlord’s opinion,
consistent with the tenant mix of the Project or with any other tenant leases
containing provisions against the Landlord leasing space in the Project for
certain uses;

(f) Landlord may decline to relet the Leased Premises to a prospective tenant,
the nature of whose business may have an adverse impact upon the manner in which
the Project is operated or with the high reputation of the Project even though
in each of said circumstances such prospective tenant may have a good credit
rating; and

(g) Before reletting the Leased Premises to a prospective tenant, Landlord may
require the prospective tenant to demonstrate the same financial capacity that
Landlord would require as a condition to leasing other space in the Project to
the prospective tenant.

E. Self-Help Rights

1. If a party shall violate any covenant or agreement made by it in this Lease
and such violation shall not have been corrected within thirty (30) calendar
days following receipt of written notice thereof, or if such violation is such
that it cannot be corrected within thirty (30) calendar days and the
nonperforming party shall not have commenced to correct such violation within
thirty (30) calendar days, then the other party may, in addition to whatever
other rights and remedies it may have at law or in equity, take such action
which is considered to be commercially reasonable and prudent in scope and cost
to correct the violation for and on behalf of the nonperforming party at the
nonperforming party’s expense. Upon completion of such cure, the performing
party shall invoice the nonperforming party for the reasonable costs and
expenses incurred by the performing party in correcting such violations. The
cure or correction of the violation by the non-defaulting party shall not be
deemed to waive the Event of Default, unless the nonperforming party makes
payment to the performing party within the periods set forth in this
subparagraph.

2. If the nonperforming party is Landlord and Tenant cures the nonperformance as
set forth above but Landlord fails to make the payment as set forth above within
thirty (30) calendar days from the receipt of such invoice, then Tenant shall
notify Landlord in writing that it has not received payment and shall provide
Landlord with five (5) Business Days to deliver payment to Tenant. Such notice
shall contain a legend in bold type that if Landlord fails to pay such amounts
to Tenant within five (5) Business Days Tenant shall exercise its right to
offset such amounts against Basic Annual Rent. If Tenant has not received
payment within such five (5) Business Day period then Tenant shall have the
right to offset such actual costs and expenses, only after receipt of a
non-appealable judgment against Landlord, against Basic Annual Rent due
Landlord. Tenant shall give Landlord written notice of the exercise of any such
offset right and the amount being offset.

 

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3. If the nonperforming party is Tenant, Landlord shall have all rights and
remedies set forth elsewhere in this Lease or provided by law for Events of
Default. In addition, if Landlord cures the nonperformance but Tenant fails to
make the payment as set forth above within thirty (30) calendar days from the
receipt of such invoice, then, after the expiration of any notice and/or cure
period set forth in this Lease, an additional Event of Default shall exist for
Tenant’s failure to make such payment and Landlord shall have all rights and
remedies relating thereto.

F. Mutual Indemnity. Landlord and Tenant agree that each will defend, indemnify
and hold harmless the other for all claims, demands, actions, suits,
proceedings, judgments, damages, losses, costs and expenses (including, without
limitation reasonable attorneys’ fees) incurred by one party (the “Indemnitee”)
to the extent resulting from any claim or action (whether or not such claim or
action proceeds to final judgment) brought or threatened for any of the
following acts or omissions of the other party (the “Indemnitor”), and/or of the
Indemnitor’s servants, employees, agents, licensees or invitees: (1) any breach,
violation and/or nonperformance of any covenant or provision of this Lease
applicable to the Indemnitor; and/or (2) negligence or any willful misconduct of
the Indemnitor. This indemnification will remain in effect after the termination
or expiration of this Lease.

G. Remedies Cumulative. Landlord’s or Tenant’s rights and remedies under this
Lease will be cumulative. The enumeration or exercise of certain rights and
remedies above will not exclude any other right or remedy available at any time
under applicable law. Upon the occurrence of an Event of Default, the damaged,
non-defaulting party will be entitled to all remedies set forth above or
existing at law or in equity (except that Tenant shall not have a right of
termination except as may be otherwise expressly set forth herein or unless the
Event of Default by Landlord rises to the level of a constructive eviction). The
foregoing notwithstanding, except as may be otherwise specifically set forth
herein, neither party shall be liable for consequential, punitive or other
special damages as a result of an Event of Default by such party hereunder.

H. Waiver of Landlord’s Lien. Landlord hereby waives in favor of Tenant any
common law or statutory lien granted to Landlord with respect to this Lease and
Tenant’s obligations hereunder, provided that such waiver shall not apply to any
personal property located at the Leased Premises which was leased or acquired by
Tenant with any improvement allowance or contribution paid by Landlord to Tenant
under this Lease. Tenant shall have the right to grant liens to lenders with
respect to any personal property owned by Tenant and to lease personal property.
Upon request by Tenant Landlord agrees to acknowledge the aforesaid waiver of
any landlord lien and the rights of such lender or lessor in and to such
personal property.

 

XII. ASSIGNMENT AND SUBLETTING

A. General Rule. Except as otherwise specifically set forth in this Paragraph,
no Assignment (as defined below) of this Lease or Subletting (as defined below)
of the Leased Premises is permitted without the prior written consent of
Landlord. Landlord shall not unreasonably withhold or condition its consent to
any proposed Assignment or Subletting. No Assignment or Subletting is permitted
to any person or entity who may avail itself of the defense

 

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of sovereign immunity or any similar legal theory. In addition, Landlord and
Tenant hereby agree and stipulate that any one or more of the following factors
shall be deemed to be sufficient grounds, but shall not be the exclusive
grounds, for Landlord’s deciding to deny Tenant’s request to sublet, assign, or
otherwise transfer the Leased Premises, or any portion thereof: (i) the credit
rating and/or credit strength of the proposed subtenant/assignee; (ii) whether
the proposed subtenant/assignee has been adjudicated a bankrupt or insolvent or
filed a petition or action seeking any reorganization, arrangement,
recapitalization, readjustment, liquidation, dissolution or similar relief under
any federal bankruptcy act or any other laws; (iii) the business character or
reputation of the proposed subtenant/assignee/licensee or concessionaire is not
compatible with the character, standing and quality of the Project; (iv) the
proposed use of the Leased Premises by the proposed subtenant/licensee or
concessionaire is not permitted by this Lease; (v) any violation of any laws,
ordinances, government regulations, or any Restrictions by reason of such
Assignment or Subletting; or (vi) if any proposed assignment or subletting would
jeopardize the real estate investment trust status of the Landlord, including if
such assignment or subletting was (1) with any person in which Landlord owns,
directly or indirectly (by applying the constructive ownership rules set forth
in Section 856(d)(5) of the Internal Revenue Code of 1986, as amended [the
“Code”]), (a) in the case of any person which is a corporation, stock of such
person possessing 10% or more of the total combined voting power of all classes
of stock entitled to vote, or 10% or more of the total value of shares of all
classes of stock of such person, or (b) in the case of any person which is not a
corporation, an interest of 10% or more in the assets or net profits of such
person; or (2) consummated in any manner which could cause any portion of the
amounts received by Landlord pursuant to this Lease or any assignment or
subletting document to fail to qualify as “rents from real property” within the
meaning of Section 856(d) of the Code, or any similar or successor provision
thereto. The prohibition set forth in this Paragraph XII.A.(vi) shall
hereinafter be referred to as the “REIT Restriction”.

B. Definitions. The term “Assignment” will include, but not be limited to, the
following: (1) any assignment of this Lease; (2) any sale, assignment, or other
transfer of the stock, partnership interests, membership interests or other
indicia of ownership of Tenant with the result that there is, whether as a
result of a single such occurrence or more than one such occurrence, a
bifurcation of the assets from the liabilities of Tenant; and/or (3) any other
event similar in effect to any of the foregoing, whatsoever it is called and
however it may be implemented. Notwithstanding anything to the contrary
contained or implied herein or provided by applicable law, in no event may
Tenant mortgage, pledge, hypothecate, grant a security interest in, or otherwise
encumber this Lease (or the Leased Premises, the Building or the Project) and
Tenant’s doing so shall constitute an immediate default under this Lease without
any notice or cure period being afforded. The term “Subletting” shall mean (1) a
subletting of all or any part of the Leased Premises; (2) any permission to a
third party to use all or part of the Leased Premises; and/or (3) any other
event similar in effect to any of the foregoing, whatsoever it is called and
however it may be implemented.

C. Cost. In connection with any proposed Assignment or Subletting which requires
Landlord’s consent hereunder, Tenant shall pay Landlord’s actual and reasonable
legal fees and expenses in connection with any requested assignment or sublease,
except that Tenant’s obligation to pay such legal fees and expenses shall not
exceed $5,000.00 in connection with any Subletting which involves less than
30,000 square feet of Rentable Area.

 

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D. Effect of Approval

1. Landlord’s consent to a specific Assignment or Subletting does not waive
Landlord’s right to withhold consent to any future or additional Assignment or
Subletting.

2. If the amount of rent and other sums received by Tenant under any Assignment
or Subletting is more than the Rent due from Tenant under this Lease, then
Tenant will retain the entirety of such excess and Landlord shall have no claim
thereto.

3. Even if Landlord consents to an Assignment or Subletting, Tenant will remain
jointly liable under this Lease with the assignee or subtenant unless Landlord
agrees in writing and in fact releases, in writing, Tenant from such primary
liability, which Landlord may elect to do so in its sole and absolute
discretion.

E. Assignment of Rent. If Tenant defaults under this Lease, Landlord may collect
rent from the assignee, subtenant, occupant or user (the “Assignee/Subtenant”)
of the Leased Premises and apply it towards the Rent due under this Lease. Such
collection will not be deemed an acceptance of the Assignee/Subtenant as tenant,
will not waive or prejudice Landlord’s right to initiate legal action against
Tenant to enforce Tenant’s fulfillment of its obligations under this Lease, and
will not release Tenant from such obligations.

F. Permitted Transactions. The foregoing notwithstanding, Landlord’s consent
shall not be required for any Subletting to a subtenant which is controlled by,
under common control with, or controlling Tenant, or for any Assignment of this
Lease to any subsidiary, affiliate or successor by merger or any Assignment in
connection with the sale of all or substantially all of the assets of Tenant, or
for any license to a business or strategic partner of Tenant which involves less
than ten percent (10%) of the Rentable Area and has a term of less than three
(3) years (“Short-Term License”); provided that, in the case of an Assignment,
either (a) such Assignee shall have a tangible net worth, calculated under
generally accepted accounting principles (“Net Worth”), which is at least equal
to the lesser of Tenant’s Net Worth at the date of this Lease or Tenant’s Net
Worth as of the day prior to the transfer, or (b) the Assignee shall deposit
security with Landlord in form and amount acceptable to Landlord in its sole
discretion and provided, further however, that no assignment or subletting shall
be permitted under this Paragraph in violation of the REIT Restriction. Tenant
shall give Landlord written notice of any Assignment or Subletting permitted by
this Paragraph (other than a Short-Term License) within ten (10) days after the
effective date thereof.

G. Marketing Notice. Tenant shall give Landlord advance notice (“Tenant’s
Marketing Notice”) of Tenant’s intent to market all or any portion of the Leased
Premises for a proposed transfer (other than a transfer pursuant to Paragraph
XII.F), which notice shall include the location and approximate Rentable Area of
the portion of the Leased Premises Tenant desires to market. Tenant must request
Landlord’s consent to a proposed transfer in writing at least thirty
(30) calendar days prior to the commencement date of the proposed transfer which
request must include (a) a term sheet executed by the parties to such proposed
transfer stating all material business aspects of the proposed transfer
(including, without limitation, the name and address of the proposed assignee or
subtenant), (b) the nature and character of the business of the proposed
assignee, subtenant or transferee, (c) the most recent financial information
(including

 

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financial statements) of the proposed assignee, subtenant or transferee, and
(d) a copy of the proposed agreement giving effect to such proposed transfer,
provided, however, Tenant shall not be required to present a fully-negotiated
and executed agreement relating to such proposed transfer. Tenant shall also
provide to Landlord any other documentation pertaining to the proposed transfer
as may be reasonably requested by Landlord. Landlord shall respond to Tenant’s
request for approval of such proposed transfer within twenty (20) calendar days
after Landlord receives Tenant’s request (with all required information
included). If Landlord does not provide written notice to Tenant denying the
proposed transfer within such twenty (20) calendar day period, then Tenant may
provide a second notice to Landlord which contains a legend in not less than 16
point bold type at the top thereof stating that “Inaction Pertaining to the
Below Notice Will Result in Deemed Approval of the Requested Action Herein.” If
Landlord does not respond to the second notice within three (3) Business Days
after receipt thereof, then Landlord’s approval of such proposed transfer shall
be deemed given.

H. Complete Sublease to Unaffiliated Entity. Notwithstanding any provision
herein to the contrary, in the event that Tenant desires to market all of the
Leased Premises (other than pursuant to Paragraph XII.F), Landlord may elect, in
Landlord’s sole discretion, to be exercised within sixty (60) calendar days of
Landlord’s receipt of a Tenant’s Marketing Notice (but not later than twenty
(20) days after Tenant requests consent for a proposed transfer pursuant to
Paragraph XII.G), to terminate this Lease in which case: (i) this Lease and the
term hereof shall terminate as of a date mutually agreed by Landlord and Tenant,
but not more than ninety (90) days after the date of Landlord’s notice of its
election to terminate; (ii) Tenant shall be released from all liability under
the Lease with respect to the period after the date of termination (other than
indemnities and obligations of Tenant which expressly survive termination of
this Lease); (iii) all Rent and other charges shall be prorated to the date of
such termination; and (iv) upon such termination date, Tenant shall surrender
the Leased Premises to Landlord in accordance with the terms hereof.

I. No Release of Tenant. Notwithstanding any assignment or subletting (including
without limitation any permitted Assignment/Subletting under Paragraph XII.F),
Tenant and any guarantor of Tenant’s obligations under this Lease shall at all
times remain fully responsible and liable for the payment of the Rent herein
specified and for compliance with all of its other obligations under this Lease
(even if future assignments and sublettings occur subsequent to the assignment
or subletting by Tenant and regardless of whether or not Tenant’s approval has
been obtained for such future assignments and sublettings). Finally, in the
event of an assignment or subletting, it is understood and agreed that all
rentals paid to Tenant during the existence of an Event of Default shall be
received by Tenant in trust for Landlord, to be forwarded immediately to
Landlord to the extent provided herein without offset, deduction, or reduction
of any kind.

J. Assignment by Landlord. Landlord shall have the right to transfer and assign,
in whole or in part, all of its rights and obligations under this Lease and in
the Leased Premises and all other property referred to in this Lease, and in
such event and upon such transfer no further liability or obligation shall
thereafter accrue against Landlord hereunder.

 

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XIII. ESTOPPEL CERTIFICATES

At any time after the execution and delivery hereof and thereafter at any time
during the Term, and after ten (10) calendar days’ prior written notice from
Landlord, Tenant will deliver to Landlord a properly executed and acknowledged
document containing substantially the same information (or such other
information as Landlord may in its reasonable discretion request) as shown on
Exhibit H. Before delivering an estoppel certificate to Tenant for signature,
Landlord shall complete the requested estoppel certificate with the proper
information (in Landlord’s opinion) as known to Landlord; Tenant may change
anything stated therein by Landlord that is incorrect and, notwithstanding that
the estoppel certificate may have been originally completed by Landlord as an
accommodation to Tenant, Tenant shall be responsible for the accuracy of the
information set forth therein once Tenant signs it. Any estoppel certificate may
be addressed to and relied upon by Landlord, Landlord’s mortgagee, partners of
Landlord or any prospective purchaser or lender. In the event Tenant fails to
timely respond to any initial request for an estoppel certificate as set forth
above, Landlord may give Tenant a second notice requesting such estoppel, and in
the event Tenant fails to respond to such second request within three
(3) Business Days after receipt thereof, the failure of Tenant to execute,
acknowledge, and deliver to Landlord a statement as above shall (i) constitute
an acknowledgment by Tenant that the information as contained in the estoppel
certificate delivered to Tenant for execution is true, correct and complete in
all respects, and (ii) serve to appoint Landlord, as agent and attorney in fact
of Tenant, to execute, acknowledge and deliver the same, and Tenant hereby
irrevocably nominates, constitutes and appoints Landlord as Tenant’s proper and
legal agent and attorney in fact for such purpose. Any notice and cure
provisions set forth in any other part of this Lease do not apply to the
provisions of this Paragraph XIII.

 

XIV. SUBORDINATION AND ATTORNMENT

A. Subordination. Subject to Tenant’s receipt of a SNDA (hereinafter defined),
Tenant accepts this Lease, and the tenancy it creates, subject and subordinate
to any ground leases, security interests, mortgages, deeds of trust or other
financing arrangements, and/or any extensions, modifications or amendments to
them, which are now or later will be a lien, or now affect or will affect all or
any part of the Leased Premises. Tenant agrees to execute, on request, any
instruments which may be required to subordinate Tenant’s interest to such
financing arrangement, provided Tenant is provided with a commercially
reasonable subordination, non-disturbance and attornment agreement in a form
reasonably approved by Tenant and any then applicable lender (a “SNDA”),
providing that so long as Tenant is not then in default of the Lease Tenant’s
use and occupancy of the Leased Premises shall not be disturbed as a result of
any foreclosure under such financing. Landlord agrees to provide Tenant with a
non-disturbance agreement from Landlord’s current lender, if any, at Landlord’s
cost, in such form as may be acceptable to such lender. Any SNDA may be made on
the condition that neither the mortgagee nor anyone claiming by, through or
under such mortgagee shall be:

1. liable for any act or omission of any prior Landlord (including, without
limitation, the then defaulting Landlord), except that the mortgagee or its
successor shall be responsible for the cure of any default by Landlord
continuing at the time the mortgagee or its successor acquires title to the
Leased Premises;

 

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2. subject to any defense or offsets which Tenant may have against any prior
Landlord (including, without limitation, the then defaulting Landlord) which
arise prior to the date such mortgagee (or someone acquiring at a foreclosure
sale related to the mortgagee’s mortgage) acquires title to the Leased Premises,
except to the extent the mortgagee received notice of the Landlord default
giving rise to such offset or defense pursuant to the SNDA and elected not to
cure such default;

3. bound by any payment of Rent which Tenant might have paid for more than the
current month to any prior Landlord (including, without limitation, the then
defaulting Landlord);

4. bound by any obligation to make any payment to Tenant which was required to
be made prior to the time such Landlord succeeded to any prior Landlord’s
interest (but without limiting Tenant’s defenses and offset rights in the event
any such payment is not made);

5. bound by any material modification, amendment or supplement to this Lease
made without the prior written consent of the mortgagee, provided that (i) such
consent shall not be required for an amendment documenting the exercise by
Tenant of any rights granted in this Lease; and (ii) the mortgagee’s consent
shall not be unreasonably withheld or conditioned and shall be deemed given if
the mortgagee does not give Tenant written notice denying such consent within
ten (10) days after receipt of written request for such consent accompanied by a
copy of the proposed modification, amendment or supplement.

B. Attornment. Subject to Tenant’s receipt of a SNDA, Tenant agrees, upon the
Transfer (as defined below) or termination of Landlord’s interest in the Leased
Premises and upon written request, to attorn to the person or entity that holds
title to the reversion of the Leased Premises (the “Successor”) and to all
subsequent Successors. Tenant also will pay to the Successor all rents and other
sums required to be paid by Tenant, and perform all of the other covenants,
agreements and terms required of Tenant under this Lease from the date of the
applicable Transfer.

 

XV. LANDLORD’S LIABILITY

A. Upon Transfer. In the event of any transfer of title to the Leased Premises
(a “Transfer”), the transferor Landlord will be entirely relieved of all
covenants and obligations which arise after the date of such Transfer and all
such liability shall automatically be deemed to be assumed by the Successor as
the transferee Landlord.

B. No Personal Liability. No member, partner, shareholder, director, officer,
employee or other principal or agent of Landlord, as it may now or hereafter be
constituted, shall have any personal liability to Tenant and/or any person or
entity claiming under, by or through Tenant upon any action, claim, suit or
demand brought under or pursuant to the terms and conditions of this Lease
and/or arising out of the use or occupancy by Tenant of the Leased Premises.

 

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XVI. TENANT’S AUTHORITY

Tenant warrants to Landlord that Tenant is a corporation, organized and in good
standing under the laws of the State of Delaware. In addition, Tenant warrants
to Landlord that this Lease has been properly authorized and executed by Tenant
and is binding upon Tenant in accordance with its terms.

 

XVII. NOTICES

Except as otherwise provided in this Lease, any requirement for a notice, demand
or request under this Lease will be satisfied by a written document:
(a) hand-delivered with receipt; (b) mailed by United States registered or
certified mail, return receipt requested, postage prepaid; (c) sent by Federal
Express, Express Mail or any other nationally recognized overnight courier
service, and addressed:

 

  (i) if to Landlord:

300 Conshohocken State Road

Suite 250

West Conshohocken, PA 19428

Attn: Mr. Jeff Goggins

with a copy to:

Office of the General Counsel

Trammell Crow Center

2001 Ross Avenue, Suite 3400

Dallas, TX 75201

Attn: Scott A. Dyche

and

Kane Russell Coleman & Logan PC

3700 Thanksgiving Tower

1601 Elm Street, Dallas, TX 75201

Attn: Raymond J. Kane

and

CB Richard Ellis Realty Trust

47 Hulfish Street, Suite 210

Princeton, NJ 08542

Attn: Philip Kianka

 Executive Vice President

and

 

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K&L Gates LLP

599 Lexington Avenue

New York, NY 10022-6030

Attn: Jeffrey Weitzman, Esq.

 

  (ii) if to Tenant:

Prior to the Lease Commencement Date:

Endo Pharmaceuticals Inc.

100 Endo Boulevard

Chadds Ford, Pennsylvania 19317

Attn: Joe Burke

with a copy to:

Endo Pharmaceuticals Inc.

100 Endo Boulevard

Chadds Ford, Pennsylvania 19317

Attn: Chief Legal Officer

Following the Lease Commencement Date:

Endo Pharmaceuticals Inc.

1400 Atwater Drive

Malvern, Pennsylvania

Attn: Joe Burke

with a copy to:

Endo Pharmaceuticals Inc.

1400 Atwater Drive

Malvern, Pennsylvania

Attn: Chief Legal Officer

All notices that are sent in accordance with this Paragraph will be deemed
received by the other party on the earliest of the following applicable time
periods: (a) three (3) Business Days after being mailed in the aforesaid manner;
(b) the date the return receipt is executed; or (c) on the date delivered as
documented by the overnight courier service or the hand delivery receipt. Either
party may designate a change of address by written notice to the other party.
Notices may be given on behalf of a party by an agent or outside counsel.

 

XVIII. COMMISSIONS

A. Indemnification by Tenant. Tenant represents that Tenant has dealt with no
broker in connection with this Lease other than Jones Lang LaSalle (“Tenant's
Broker”) and that,

 

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with the exception of Tenant’s Broker no broker has been involved in the
procurement or negotiation of this Lease on behalf of Tenant nor is any other
broker entitled to any commissions in connection herewith. Tenant will defend,
hold harmless and indemnify Landlord from any claims, demands, actions, suits,
proceedings, judgments, losses, damages, costs and expenses (including, without
limitation, attorneys’ fees) incurred by Landlord arising out of any other
broker’s claim that such other broker has assisted, represented or been engaged
by Tenant with respect to this Lease. Landlord shall pay a fee to Tenant’s
Broker in accordance with a separate written agreement between Landlord and
Tenant’s Broker.

B. Indemnification by Landlord. Landlord represents that Landlord has dealt
directly with no broker in connection with this Lease other than CB Richard
Ellis, Inc. (“Landlord’s Broker”), and that no other broker was involved in the
procurement or negotiation of this Lease on behalf of Landlord or is entitled to
any commissions in connection with it other than Landlord’s Broker. Landlord
will defend, hold harmless and indemnify Tenant from any claims, demands,
actions, suits, proceedings, judgments, losses, damages, costs and expenses
(including, without limitation, attorneys’ fees) incurred by Tenant arising out
of any other broker’s claim that such other broker has assisted, represented or
been engaged by Landlord with respect to this Lease. Landlord shall pay a fee to
Landlord’s Broker in accordance with a separate written agreement between
Landlord and Landlord’s Broker

 

XIX. MISCELLANEOUS

A. Severability, Enforceability. If any provision of this Lease, or its
application to any person, is found invalid or unenforceable, the remainder of
this Lease or its application will not be affected. Each term and provision of
this Lease will be valid and enforceable to the fullest extent permitted by law.
Notwithstanding any language in this Lease to the contrary, if the Term does not
commence on or before that date which is five (5) years after the full and final
execution and delivery hereof, this Lease will automatically terminate, and
neither party will have any further liability to the other.

B. Captions. All headings contained in this Lease are for convenience only. They
are not to be treated as a summary construction of the provisions to which they
pertain.

C. Recordation. If at any time, any lienholder or other party which has a right
to require Landlord to do so requires the recordation of a memorandum of this
Lease, Tenant will execute such acknowledgements as may be necessary to effect
such recordation. If Landlord requires, or is required, to record a memorandum
of this Lease, it will pay all recording fees, transfer taxes and/or documentary
stamp taxes payable in connection with the recordation. If Tenant records this
Lease, it will make all such payments. Tenant will not record this Lease or any
memorandum thereof without Landlord’s prior consent, which consent may be
withheld in Landlord’s sole and absolute discretion.

D. Successors and Assigns. Subject to the restrictions on the transfer of
Tenant’s interest hereunder as set forth herein, this Lease and all of its
provisions, individually and collectively, will bind and inure to the benefit of
Landlord and Tenant, and their respective heirs, distributees, executors,
administrators, successors, personal and legal representatives and their
permitted assigns.

 

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E. Quiet Enjoyment. Landlord covenants to Tenant that, so long as Tenant pays
the Rent and performs all other obligations imposed on Tenant under this Lease,
and subject to all matters of record and all mortgages and other financing
arrangements, Tenant will peaceably hold and enjoy the Leased Premises
throughout the Term without hindrance or impairment from Landlord or those
claiming through Landlord.

F. Force Majeure. In the event that either party to this Lease is delayed,
hindered or prevented, by reason of strikes, lock-outs, inability to procure
materials, delays in transportation, failure of power, restrictive governmental
laws or regulations that prevent, delay or prohibit the ability to perform,
riots, insurrection, war, fire or other casualties, acts of God, extreme rain or
other weather conditions beyond normal conditions for the season, or any other
reason not reasonably within the control of the party so delayed, hindered or
prevented, from performing work or doing any act required under the terms of
this Lease, then performance of such act will be excused for the period of the
delay, and the period of the performance of any such act will be extended for a
period equal to the period of such delay. Notwithstanding the foregoing, lack of
funds is not an excuse delaying, hindering or preventing a party from performing
under this Lease and the occurrence of any event described in this Paragraph
XIX.F will not operate to excuse Tenant from prompt payments of Rent required by
this Lease.

G. Waiver of Jury Trial. Landlord and Tenant desire a prompt resolution of any
litigation between them with respect to this Lease. To that end, Landlord and
Tenant waive trial by jury in any action, suit, proceeding and/or counterclaim
brought by either against the other on any matters whatsoever arising out of or
in any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Leased Premises, any claim of injury or damage
and/or any statutory remedy. This waiver is knowingly, intentionally and
voluntarily made by Tenant. Tenant acknowledges that neither Landlord nor any
person acting on behalf of Landlord has made any representations of fact to
induce this waiver of trial by jury or in any way to modify or nullify its
effect.

H. Gender. As used in this Lease, and where the context requires: (a) the
masculine will be deemed to include the feminine and neuter and vice-versa; and
(b) the singular will be deemed to include the plural and vice-versa.

I. Governing Law. This Lease is made in the Commonwealth of Pennsylvania and
will be governed in all respects by the laws of the Commonwealth of Pennsylvania
without regard to principles of conflicts of laws.

J. Exhibits Incorporated. All plats, exhibits, riders or other attachments to
this Lease are a part of this Lease and are incorporated by reference into this
Lease.

K. Entire Agreement. THIS LEASE CONTAINS THE ENTIRE AGREEMENT BETWEEN LANDLORD
AND TENANT REGARDING THE SUBJECT MATTER OF THIS LEASE. THERE ARE NO PROMISES,
AGREEMENTS, CONDITIONS, UNDERTAKINGS, WARRANTIES OR REPRESENTATIONS, ORAL OR
WRITTEN, EXPRESS OR IMPLIED, BETWEEN THEM, RELATING TO THIS SUBJECT MATTER,
OTHER THAN AS SET FORTH IN THIS LEASE. THIS LEASE IS INTENDED BY LANDLORD AND
TENANT TO BE AN INTEGRATION OF ALL PRIOR OR CONTEMPORANEOUS PROMISES,
AGREEMENTS, CONDITIONS, NEGOTIATIONS AND UNDERTAKINGS BETWEEN THEM.

 

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L. Amendments. THIS LEASE MAY NOT BE MODIFIED ORALLY OR IN ANY MANNER OTHER THAN
BY AN AGREEMENT IN WRITING SIGNED BY LANDLORD AND TENANT OR THEIR RESPECTIVE
SUCCESSORS IN INTEREST.

M. Counterparts. THIS LEASE MAY BE EXECUTED IN COUNTERPARTS, EACH OF WHICH WILL
BE AN ORIGINAL, BUT ALL OF WHICH WILL CONSTITUTE ONE AND THE SAME LEASE.

N. Attorneys’ Fees. In the event of any litigation arising under or pursuant to
the terms of this Lease, the non-prevailing party in such litigation shall pay
the actual and reasonable fees and expenses incurred in connection with such
litigation, including court costs and attorneys’ fees and expenses

O. Limits of Liability. In case of an Event of Default hereunder by Landlord,
Tenant shall look solely to the equity interests of Landlord in the Leased
Premises. Neither Landlord nor any of the officers, directors, members or
affiliates of Landlord, nor any parent, subsidiary officer, director or
affiliate thereof shall have any personal liability to pay any indebtedness
accruing hereunder or to perform any covenant, either express or implied, herein
contained. Any such personal liability of Landlord is expressly waived and
released by Tenant and by all persons claiming by, through or under Tenant.

P. Time of Essence. Time is of the essence with respect to all provisions of
this Lease.

Q. Confidentiality. Tenant and Landlord shall at all times keep all business
terms and conditions of this Lease (i.e., lease rates, concessions, tenant
improvement allowances, lease term options or rights) confidential and shall not
disclose the terms thereof to any third party, except: (i) for its employees,
accountants, attorneys, brokers, agents and other professionals who have a
legitimate business reason to know the terms of this Lease; (ii) as required by
any laws, rules or regulations applicable to such party, including without
limitation, the requirements of the United States Securities and Exchange
Commission or similar organization; or (iii) in connection with any legal
proceedings.

R. Consents. Notwithstanding any provision contained in this Lease to the
contrary, whenever under this Lease provision is made for either party’s
securing the consent or approval of the other party, (i) such consent or
approval shall be in writing and shall not be unreasonably withheld, delayed or
conditioned, (ii) in all matters contained herein, both parties shall have an
implied obligation of reasonableness, and (iii) such consent shall be deemed
given if the party whose consent or approval is sought fails to deny the request
within twenty (20) calendar days following its receipt of such request, and such
failure to deny continues for (3) Business Days after a second notice to such
party is delivered which contains a legend in not less than 16 point bold type
at the top thereof stating that “Inaction Pertaining to the Below Notice Will
Result in Deemed Approval of the Requested Action Herein.”

 

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S. Guaranty. Simultaneous with Tenant’s execution and delivery of this Lease to
Landlord, Tenant shall cause the Guarantor to execute and deliver to Landlord
the Guaranty attached hereto as Exhibit I.

T. Public Announcements. Neither Party shall issue a press release or otherwise
communicate with media representatives regarding this Lease unless such release
or communication has received the prior approval of the other Party hereto,
which approval shall not be unreasonably withheld, conditioned or delayed. The
obligations of this Paragraph XIX.T. shall not apply to disclosures made
pursuant to any law, any governmental regulation, any requirement or request
from an governmental regulatory entity, any order of a court of competent
jurisdiction or by a lawful, or proper subpoena, or any standard disclosure
practices of the Parties; provided, however, Landlord shall be permitted to use
a depiction, photograph or general description of the Building in its materials
that are available to the public.

 

XX. OFAC COMPLIANCE

A. Representations. Each party represents and warrants that, to such party’s
actual knowledge, without independent investigation, which knowledge is based
solely upon the current actual knowledge of the senior level management of such
party: (a) such party: (i) is not currently identified on the Specially
Designated Nationals and Blocked Persons List maintained by the Office of
Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other
similar list maintained by OFAC pursuant to any authorizing statute, executive
order or regulation (collectively, the “List”), and (ii) is not a person or
entity with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States, (b) none of the funds or other assets of such party constitute property
of, or are beneficially owned, directly or indirectly, by any Embargoed Person
(as hereinafter defined), (c) no Embargoed Person has any direct or indirect
controlling interest of any nature whatsoever in such party (whether directly or
indirectly), (d) none of the funds of such party have been derived from any
unlawful activity with the result that the investment in such party is
prohibited by law or that the Lease is in violation of law, and (e) such party
has implemented procedures, and will consistently apply those procedures, to
ensure the foregoing representations and warranties remain true and correct at
all times. The term “Embargoed Person” means any person, entity or government
subject to trade restrictions under U.S. law, including but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., the
Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders
or regulations promulgated thereunder with the result that the investment in
Tenant is prohibited by law or Tenant is in violation of law.

B. OFAC Covenant. Each party covenants and agrees: (i) to comply with all
requirements of law relating to money laundering, anti-terrorism, trade embargos
and economic sanctions, now or hereafter in effect, (ii) to promptly notify the
other party in writing as soon as it receives notification that any of the
representations, warranties or covenants set forth in this Paragraph or the
preceding Paragraph are no longer true or have been breached, (iii) not to use
funds from any “Prohibited Person” (as such term is defined in the September 24,
2001 Executive Order Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism) to make any payment due to
the other party under the Lease and (iv) at the request of the other party, to
provide such information as may be reasonably requested by such party to
determine its compliance with the terms hereof.

 

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XXI. FINANCIAL INFORMATION

In the event Tenant or Guarantor is, at any time, not a publicly traded entity
listed on the New York Stock Exchange, NASDAQ exchange or comparable publicly
traded major market stock exchange, then, within ten (10) Business Days of
Landlord’s request, Tenant and/or Guarantor shall deliver to Landlord the
current audited financial statements of Tenant and/or Guarantor prepared in
accordance with generally accepted accounting principles consistently applied;
provided, however, except to the extent such request relates to Landlord’s sale
or re-financing of the Property, Landlord shall refrain from making any such
request more than one (1) time during each calendar year. The financial
statements shall include a balance sheet, profit and loss statement, and
statement of cash flows for each year, accompanied by an opinion from a
certified public accountant certifying that the financial statements are
prepared in accordance with generally accepted accounting principles
consistently applied. For so long as Tenant and Guarantor are each publicly
traded on a major United States stock exchange, the delivery of Tenant’s Annual
Report and Guarantor’s Annual Report to Landlord shall be sufficient to evidence
Tenant’s and Guarantor’s compliance with this Paragraph.

 

XXII. TENANT’S GENERATOR

A. Authority to Install. Tenant shall be permitted to install and maintain, at
its sole cost and expense, a back-up power generator and fuel tank (if any),
batteries (if any), cabling, piping, routing, exhaust routing, feeders and
conduits extending from such generator to the Building or other points of
connection (collectively, the “Generator Equipment”). The Generator Equipment
shall be of such size, specifications and capacity as Tenant shall determine in
its sole discretion but shall be subject to (a) Landlord’s reasonable approval
as it relates to the structural integrity of the Building and maintenance of the
Leased Premises in a first-class manner and appearance, and (b) to the Park
Restrictions and all regulations and requirements imposed by any governmental
entity having jurisdiction over the Property. The design, location and
installation of the Generator Equipment (the “Generator Support Area”) shall be
mutually acceptable to both parties. Landlord requires that the Generator
Support Area be enclosed by screening materials and curbed to contain fuel
spills. Tenant agrees that the Generator Equipment shall not emit noise at any
frequency during peak operation periods in violation of law or the Park
Restrictions.

B. Landlord’s Approval. Tenant’s right to install or modify the Generator
Equipment shall be subject to Landlord’s prior written approval of any equipment
to be installed, methods of installation and contractor performing the
installation, which approval shall not be unreasonably withheld, conditioned or
delayed. Any material changes in the Generator Equipment shall be subject to
Landlord’s prior approval, which approval shall not be unreasonably withheld,
conditioned or delayed. Upon the expiration or earlier termination of this
Lease, Tenant shall remove the Generator Equipment at its sole expense and shall
repair any damage to the Leased Premises (including the Building) caused by or
resulting from such removal.

C. Tenant Obligations. The installation, repair, maintenance and operation of
the Generator Equipment shall (a) be at Tenant’s sole cost and expense,
(b) comply with all Park

 

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Restrictions, all regulations and requirements imposed by any governmental
entity having jurisdiction over the Property, and (c) comply with the
requirements of Landlord’s insurer. Tenant shall be responsible for obtaining
all necessary permits, variances and licenses relating to the Generator
Equipment and shall deliver copies thereof to Landlord. Tenant shall promptly
repair at its expense all damage caused by or resulting from the installation,
maintenance, repair or operation of the Generator Equipment. Tenant shall
maintain such insurance as is appropriate with respect to the installation,
operation and maintenance of the Generator Equipment. Landlord or its agents or
employees shall have no liability on account of any damage to or interference
with the operation of the Generator Equipment except for physical damage caused
by Landlord’s gross negligence or willful misconduct. The operation of the
Generator Equipment shall be at Tenant’s sole and absolute risk, cost and
expense.

 

XXIII. ADDITIONAL SPACE

A. Notice. Provided that (i) Tenant is not then in default under this Lease
beyond the expiration of any applicable notice and cure periods, (ii) Landlord
is able to obtain financing to fund the construction of such space on terms
which are acceptable to Landlord in its reasonable discretion, and (iii) Tenant
and any transferee permitted by Paragraph XII.F are the only occupants of the
Leased Premises, Tenant shall throughout the initial four (4) Lease Years of the
Term (the “Option Period”) have a continuous and recurring right (an “Additional
Space Option”) to lease up to an additional approximately one hundred fifty
thousand (150,000) square feet of Rentable Area, calculated in accordance with
the BOMA Standard, to be constructed by Landlord in an expansion of the Building
or construction of an additional building on the Land (“Additional Space”). In
the event Tenant shall determine during the Option Period that it desires to
lease Additional Space, then Tenant shall notify Landlord in writing of such
intent (an “Additional Space Offer Notice”). The Additional Space Offer Notice
shall specify the size of the desired Additional Space which Tenant is prepared
to lease.

B. Terms Applicable to Additional Space. Promptly after Tenant delivers the
Additional Space Offer Notice to Landlord within the Option Period, then
Landlord and Tenant shall promptly meet and negotiate the terms of a new lease
for the Additional Space (the “Additional Space Lease”) including, without
limitation, anticipated Basic Annual Rent, which shall be calculated on an open
book basis utilizing then current construction prices, interest rates, required
investor returns and the additional floor area price of $35 per square foot of
Rentable Area, and which shall otherwise be on all of the terms and conditions
as are set forth in this Lease (exclusive of this Paragraph XXIII). Landlord and
Tenant shall mutually agree on such terms and Landlord shall promptly prepare
and deliver to Tenant the Additional Space Lease and Tenant shall execute and
deliver same to Landlord within one hundred twenty (120) days after the
Additional Space Offer Notice.

C. Landlord’s Performance. Landlord’s obligation to construct the Additional
Space for Tenant shall be contingent on the foregoing, including the timely
execution of the Additional Space Lease and further shall be contingent on
receipt of all applicable governmental permits and approvals and all other
approvals for the construction and occupancy of the Additional Space within one
hundred eighty (180) days of the date of the Additional Space Lease, the failure
of which shall, at the option of either Landlord or Tenant, cause the Additional
Space Lease to terminate and the terms of this Paragraph XXIII to be void ab
initio. Notwithstanding the

 

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foregoing, the terms and conditions of this Lease, and the respective duties and
obligations of Landlord and Tenant arising under this Lease, shall continue in
full force and effect notwithstanding any exercise of (or failure to exercise)
the Additional Space Option and notwithstanding any default by either Landlord
or Tenant under the Additional Space Lease.

[Signature page follows]

 

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IN WITNESS WHEREOF, Landlord and Tenant, intending to be legally bound hereby,
have signed this Lease under seal as of the date first above written.

 

LANDLORD:

RT/TC ATWATER LP,

a Delaware limited partnership

By:   TC Atwater Manager, LLC,   a Delaware limited liability company,   its
general partner   By:   TC NE Metro Development, Inc.,     a Delaware
corporation,     its sole member           By:  

/s/ SCOTT A. DYCHE

      Scott A. Dyche,       Executive Vice President

 

TENANT:

ENDO PHARMACEUTICALS INC.

By:

 

/s/ DAVID P. HOLVECK

Name:

 

David P. Holveck

Title:

 

President and Chief Executive Officer

 

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ADDENDUM 1

DEFINITIONS

As used in the Lease, the following terms will have the meanings given such
terms in this Addendum 1.

“12-Month Date” shall have the meaning ascribed to such term in Paragraph
III.B.2.

“Additional Rent” shall have the meaning ascribed to such term in Paragraph V.C.

“Additional Space” shall have the meaning ascribed to such term in Paragraph
XXIII.A.

“Additional Space Lease” shall have the meaning ascribed to such term in
Paragraph XXIII.B.

“Additional Space Offer Notice” shall have the meaning ascribed to such term in
Paragraph XXIII.A.

“Additional Space Option” shall have the meaning ascribed to such term in
Paragraph XXIII.A.

“Appraiser” shall have the meaning ascribed to such term in Paragraph
III.B.1(d)(i).

“Assignee/Subtenant” shall have the meaning ascribed to such term in Paragraph
XII.E.

“Assignment” shall have the meaning ascribed to such term in Paragraph XII.B.

“Bankruptcy Code” shall mean Title 11 of the United States Code, as now or
hereafter in effect, and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar
debtor relief laws affecting the rights of creditors generally from time to time
in effect.

“Basic Annual Rent” shall have the meaning ascribed to such term in Paragraph
V.D.

“Best Management Practices of Class A office parks in the Metropolitan Area”
means those practices which are customarily used by national property management
companies (such as CBRE, JLL, Cushman Wakefield, Transwestern, or other
reasonably equivalent property management companies) in the maintenance,
management, and operation of Class A office parks located within the
Metropolitan Area, including without limitation those standards more
specifically set forth on Addendum 2.

“BOMA Standard” shall have the meaning ascribed to such term in Paragraph IV.C.

“Building” shall have the meaning ascribed to such term in Paragraph II.

“Communications Equipment” shall have the meaning ascribed to such term in
Paragraph VI.K.1.

 

Addendum 1, Page 1

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“Effective Date” shall have the meaning ascribed to such term in the preamble to
the Lease.

“Embargoed Person” shall have the meaning ascribed to such term in Paragraph
XX.A.

“Event of Default” shall have the meaning ascribed to such term in Paragraph
XI.A.

“Generate” and its grammatical offshoots means to use, collect, generate, store,
transport, treat or dispose of.

“Generator Equipment” shall have the meaning ascribed to such term in Paragraph
XXII.A.

“Generator Support Area” shall have the meaning ascribed to such term in
Paragraph XXII.A.

“Guarantor” shall mean Endo Pharmaceuticals Holdings Inc., a Delaware
corporation.

“Hazardous Substance” shall mean: (a) any “hazardous waste” as defined by the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), as
amended from time to time, and regulations promulgated thereunder; (b) any
“hazardous substance” as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. § 9601 et seq.), as amended
from time to time, and regulations promulgated thereunder; (c) any other
hazardous or toxic materials or substances regulated by any federal, state or
local laws and regulations relating to pollution control, hazardous or toxic
wastes, substances and constituents, including hydrocarbonic substances, and
other environmental and ecological matters, including but not limited to the
Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), Resource
Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), Safe Drinking Water
Act (42 U.S.C. § 300f et seq.), Toxic Substances Control Act (15 U.S.C. § 2601
et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601, et
seq.), (d) any substance the presence of which on the Property is prohibited,
regulated or restricted by any law or regulation; and (e) any other substance
which by law or regulation; requires special handling in its Generation.

“Impositions” shall have the meaning ascribed to such term in Paragraph V.G.3.

“Indemnitee” shall have the meaning ascribed to such term in Paragraph XI.F.

“Indemnitor” shall have the meaning ascribed to such term in Paragraph XI.F.

“Interruption” shall have the meaning ascribed to such term in Paragraph VII.H.

“Landlord’s Broker” shall have the meaning ascribed to such term in Paragraph
XVIII.B.

“Landlord’s Insurance” shall have the meaning ascribed to such term in Paragraph
VI.E.2.

“Lease Commencement Date” shall have the meaning ascribed to such term in
Paragraph IV.A.1.

 

Addendum 1, Page 2

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“Leased Premises” shall have the meaning ascribed to such term in Paragraph II.

“Lease Year” shall mean each consecutive period of twelve (12) successive
calendar months during the Term, beginning on the Lease Commencement Date. If
the Lease Commencement Date does not occur on the first day of a month, the
first Lease Year will include the partial month following the Lease Commencement
Date plus twelve (12) full calendar months.

“Light Lab Use” shall mean any use of the Building as a laboratory for purposes
which are permitted under applicable law and incidental to Tenant’s principal
business purpose conducted in the Building (exclusive however of biomedical labs
or other uses involving the use of Hazardous Substances which exceed those
Hazardous Substance uses permitted under applicable zoning laws).

“List” shall have the meaning ascribed to such term in Paragraph XX.A.

“Management Change Date” shall have the meaning ascribed to such term in
Paragraph VII.F.

“Management Notice” shall have the meaning ascribed to such term in Paragraph
VII.F.

“Material Tenant Alterations” shall have the meaning ascribed to such term in
Paragraph VI.B.1.

“Member of the Appraisal Institute” shall have the meaning ascribed to such term
in Paragraph III.B.1(d)(i).

“Metropolitan Area” shall have the meaning ascribed to such term in Paragraph
III.B.1(c).

“Monument Sign” shall have the meaning ascribed to such term in Paragraph VI.J.

“OFAC” shall have the meaning ascribed to such term in Paragraph XX.A.

“Operating Expenses” shall mean, prior to delivery by Landlord of a Management
Notice, (i) premiums for Landlord’s Insurance and (ii) assessments levied by the
Atwater Owners Association or its successors pursuant to the Park Restrictions.
After delivery of a Management Notice, and for so long as Landlord manages the
Leased Premises, Operating Expenses shall also include the reasonable costs
incurred by Landlord to maintain, repair and replace the Leased Premises. The
term “Operating Expenses” does not include (a) the cost of maintaining,
repairing or replacing the Structural Portions of the Building, (b) Landlord’s
overhead or employee expenses for any employee above the level of any person
providing the services of a building manager, (c) expenses to the extent due to
Landlord’s negligence or willful misconduct, or (d) management fees in excess of
an amount equal to five percent (5%) of Operating Expenses. For the sole purpose
of calculating the management fee permitted hereunder, the term “Operating
Expenses” shall not include the costs of premiums for Landlord’s Insurance,
assessments under the Park Restrictions or the costs of any capital
expenditures.

 

Addendum 1, Page 3

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“Operating Year” shall mean each respective calendar year during the Term. If
the Lease Commencement Date is not on a January 1, or the last day of the Term
(whether by expiration or earlier termination) is not on a December 31, then
Tenant’s Share of Operating Expenses and Taxes for that Operating Year shall be
prorated accordingly based on the applicable number of calendar days elapsed
over a 365-day year.

“Option Period” shall have the meaning ascribed to such term in Paragraph
XXIII.A.

“Park Restrictions” shall have the meaning ascribed to such term in Paragraph
VI.A.

“Prime Rate” shall have the meaning ascribed to such term in Paragraph
XI.D.3.(a).

“Prohibited Person” shall have the meaning ascribed to such term in Paragraph
XX.B.

“Project” shall mean that certain real property comprising the Atwater Corporate
Center, located in Malvern, Pennsylvania.

“Property” shall mean that certain tract of land containing approximately 24.84
acres which is located within the Project and depicted in Exhibit B attached to
the Lease.

“REIT Restriction” shall have the meaning ascribed to such term in Paragraph
XII.A.

“Renewal Notice” shall have the meaning ascribed to such term in Paragraph
III.B.1.(a) of the Lease.

“Renewal Term” shall have the meaning ascribed to such term in Paragraph
III.B.1. of the Lease.

“Rent” shall have the meaning ascribed to such term in Paragraph V.C.

“Rentable Area” shall have the meaning ascribed to such term in Paragraph IV.C.

“Restrictions” shall have the meaning ascribed to such term in Paragraph VI.A.

“SNDA” shall have the meaning ascribed to such term in Paragraph XIV.A.

“Subletting” shall have the meaning ascribed to such term in Paragraph XII.B.

“Successor” shall have the meaning ascribed to such term in Paragraph XIV.B.

“Statement” shall have the meaning ascribed to such term in Paragraph V.G.5.(a).

“Structural Portions of the Building” shall have the meaning ascribed to such
term in Paragraph VI.C.

“Taxes” shall mean any present or future federal, state, municipal, local and/or
any other taxes, assessments, levies, benefit charges and/or other governmental
and/or private impositions (including any special services district), imposed,
levied, assessed and/or attributable directly or indirectly to the Leased
Premises or any portion of the Leased Premises or upon the Rent due

 

Addendum 1, Page 4

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and payable under this Lease, whether now customary or within the contemplation
of Landlord and Tenant and whether extraordinary or ordinary, general or
special, foreseen or unforeseen, or similar or dissimilar to any of the
foregoing. The term “Taxes” does not include any inheritance, estate,
succession, income, profits or franchise tax. If, however, at any time during
the Term the method of taxation prevailing on the date hereof is altered or
eliminated so that one or more of the items listed in the first sentence of this
subsection is replaced by a levy, assessment or imposition, wholly or partly as
a capital levy, or otherwise, on the rents or income received from the Leased
Premises (provided the tax on such income is not a tax levied on taxable income
generally) wholly or partly in place of an imposition on, a substitute for, or
an increase of, taxes in the nature of Taxes currently issued against the Leased
Premises, the charge to Landlord resulting from such altered or replacement
method of taxation will be deemed to be within the definition of “Taxes”.

“Tenant’s Marketing Notice” shall have the meaning ascribed to such term in
Paragraph XII.G.

“Tenant’s Broker” shall have the meaning ascribed to such term in Paragraph
XVIII.A.

“Tenant’s Share” shall mean 100%.

“Termination Warning” shall have the meaning ascribed to such term in Paragraph
VII.F.

“Transfer” shall have the meaning ascribed to such term in Paragraph XV.A.

“Withdrawal Notice” shall have the meaning ascribed to such term in Paragraph
III.B.2.

 

Addendum 1, Page 5

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ADDENDUM 2

Best Management Practices of Class A Office Parks in the Metropolitan Area

As used in this Addendum 2, the term “Manager” shall mean the party performing
the maintenance, operation, and property management obligations in accordance
with the terms of the Lease. All terms not defined herein shall have the meaning
ascribed to such terms in the Lease.

 

A. General Standard. Manager shall use diligent efforts to manage, operate, and
maintain the Leased Premises (including the Building) in a professional manner
consistent with Class A office buildings in the Metropolitan Area and any
Operational and Maintenance Manuals to be prepared by the GC (as defined in
Exhibit D-1).

 

B. Vendor Contracts. Manager shall negotiate contracts with third parties for
services to be furnished to the Leased Premises consistent with Class A office
buildings in the Metropolitan Area. Such service contracts shall be entered into
by Manager and terminable with respect to the Leased Premises on thirty
(30) days notice or less, unless otherwise approved in writing by Landlord.

 

C. On-Site Facilities Manager. At all times prior to the Management Change Date,
Manager shall have in its employ an on-site facilities manager. After the
Management Change Date, Manager, in its reasonable judgment, shall have at the
Leased Premises during normal building hours one full-time on-site experienced
facilities manager, which such professional may be a building engineer employed
from an engineering service company (such as CBRE, JLL, ABM, Transwestern, PM
Realty, Emcor or other reasonably equivalent service company) (as existing from
time to time, the “Facilities Manager”) for the management of Primary Building
Systems and to assist with and coordinate the hiring and oversight of outside
professional contractors who will perform necessary facility maintenance, repair
and operational services with respect to the Primary Building Systems. The
Facilities Manager will (either by contract or otherwise) have back-up coverage
in the event of illness, vacation or other absence of the Facilities Manager.
Qualifications of contractors for the routine maintenance and repair of the
Primary Building Systems shall be subject to the reasonable approval of
Landlord. As used herein, “Primary Building Systems” means the HVAC, plumbing,
mechanical, electrical and vertical transportation elements of the Building.

 

D. Contracts with Third Parties.

 

  1. Manager shall maintain a list of all contractors and subcontractors that
perform any services at the Leased Premises under Manager’s direction.

 

  2. Manager shall have a documented reporting and work log system to track all
completed work and preventative maintenance work including warranty items.

 

  3. Manager shall obtain all necessary receipts, releases, waivers, discharges
and assurances necessary to keep the Leased Premises free of any mechanics’,
laborers’, materials suppliers’ or vendors’ liens in connection with work,
materials or supplies for which Manager contracts.

 

Addendum 2, Page 1

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  4. All repairs, alterations and replacements shall be of substantially equal
quality and workmanship to the original work. Manager shall monitor all
independent contractors, consultants and suppliers for the operation, repair,
maintenance and servicing of the Leased Premises. Manager shall require that any
contractor performing work on the Leased Premises maintain appropriate insurance
coverage.

 

E. Purchase of Supplies and Materials. Manager shall purchase all equipment,
tools, appliances, materials and supplies reasonably necessary or desirable for
the operation of the Leased Premises in accordance with the General Standard set
forth in Section A herein.

 

F. Complaints and Notices.

 

  1. Manager shall furnish a report of operating costs incurred in connection
with the Leased Premises upon the other party’s written request, but not more
frequently than once per calendar quarter.

 

  2. Not less frequently than annually and upon request by the other party,
Manager shall provide the other party to this Lease with a summary of all
maintenance, repairs and replacements having a cost in excess of $5,000.00
performed by Manager at the Leased Premises during such calendar year, including
but not limited to a copy of any studies or reports prepared in connection with
Manager’s operation of the Building.

 

  3. At all times prior to the Management Change Date, Manager shall promptly
notify Landlord and any insurance agent Landlord may designate of any personal
injury or property damage occurring to or claimed by any tenant or third party
on or with respect to the Leased Premises following Manager’s knowledge thereof.
Manager shall promptly forward to Landlord with copies to any insurance agent
Landlord may designate any summons, subpoena or other legal document served upon
Manager relating to the actual or alleged potential liability of Landlord, of
Manager or of the Leased Premises.

 

G. Licenses and Authorizations. Manager shall obtain and keep in full force and
effect all licenses, permits, consents and authorizations as may be necessary
for the operation of the Leased Premises.

 

H. Building Services. Manager shall provide the following services:

 

  1. Hot and cold domestic water to the Leased Premises reasonably appropriate
for the comfortable use and occupancy of the Building (and exterior irrigation
of the grounds).

 

  2. Electric lighting service for all areas on the Leased Premises.

 

Addendum 2, Page 2

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  3. Electrical distribution facilities (including, but not limited to, bus
risers, transformers, panels and other equipment) and capacity for electrical
usage for the Leased Premises.

 

  4. Standard fluorescent bulb and ballast replacement and incandescent bulb
replacement to the extent in accordance with the General Standard set forth in
Section A herein.

 

  5. Elevator service.

 

  6. Subject to curtailment as required by applicable laws, central heat and air
conditioning in season, in accordance with Schedule 1 to this Addendum 2.

 

  7. HVAC preventative maintenance with regard to mechanical systems which shall
include an equipment list, manufacturer’s preventative maintenance program and
schedule.

 

  8. Janitorial services in accordance with the General Standard set forth in
Section A herein, similar to those set forth on Schedule 2 to this Addendum 2.

 

I. Warranties. If Tenant is acting as the Manager, Landlord will reasonably
cooperate (at Tenant’s cost) to provide Manager with the benefit of all
warranties and guarantees of third parties relating to any elements of the
Leased Premises that Manager must repair; provided, however, that the foregoing
rights of Manager with respect to such warranties shall immediately terminate
upon Landlord’s delivery of a Management Notice pursuant to Paragraph VII.F. of
the Lease. Manager will perform all preventative maintenance obligations as set
forth under the terms and conditions of such warranties and guarantees.

 

J. Request to Replace Janitor. If, following the Management Change Date, Tenant
is dissatisfied with the janitorial services being provided at the Building and
such condition continues for thirty (30) days following written notice to
Landlord and the current janitorial service provider, then Tenant shall be
entitled to request in writing that Landlord replace such current janitorial
service provider. Upon Landlord’s receipt of a replacement request from Tenant,
Landlord shall reasonably promptly replace the janitorial service provider with
a new service provider selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed. All costs
incurred by Landlord (including, but not limited to, any termination fees or
penalties) in connection with such replacement shall be payable by Tenant as
part of Operating Expenses or, at Landlord’s option, on demand. Any janitorial
contract entered into by Landlord for the Building shall give Landlord the right
to cancel such contract without termination fee or penalty upon not more than
thirty (30) days notice.

 

Addendum 2, Page 3

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Schedule 1

AIR CONDITIONING AND HEATING SERVICES

Manager shall provide air conditioning and heating, subject to governmental
regulations and mandates, to achieve within the occupied areas of the Leased
Premises on a reasonably consistent basis the following indoor conditions so
long as the outdoor conditions are within the tolerances set forth below:

 

Indoor Conditions:

  

Summer:

   75 degrees Fahrenheit dry bulb    65.5 degrees Fahrenheit wet bulb (designed
for 50% humidity)

Winter:

   70 degrees Fahrenheit dry bulb

Outdoor Conditions:

  

Heating Season:

   12.6°F (99.6% occurrence, dry bulb temperature)

Cooling Season:

   90.6°F dry bulb temperature / 74.5°F mean coincident wet bulb temperature (1%
occurrence) – building heat gain and ventilation loads

Following the Management Change Date, standard air conditioning and heating
shall be furnished to the Leased Premises in accordance with Tenant’s then
current use and occupancy of the Leased Premises until such time Tenant delivers
written notice to Manager requesting a modification to such service.

 

Schedule 2, Page 1

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Schedule 2

JANITORIAL SPECIFICATIONS

Janitorial services to be furnished for the Building will include, but not be
limited to, the following:

 

A. Daily Cleaning - The following general cleaning will be done five (5) days
per week, typically Monday through Friday:

 

  1. All carpeting will be vacuumed and spot cleaned and non-carpeted floors dry
mopped.

 

  2. All trash receptacles will be emptied and trash removed.

 

  3. Drinking fountains will be cleaned and disinfected.

 

  4. All hard surfaces (including doors, walls, floors, ceramic tile, etc.) will
be wiped or mopped clean where necessary.

 

  5. All interior doors and partition panels will be cleaned.

 

  6. All glass doors, glass panels, glass furniture tops and bright metal
finishes (except for brass, which will be cleaned, rubbed and polished monthly)
and handrails will be cleaned.

 

  7. Outside delivery area will be swept as needed to maintain a clean
appearance.

 

  8. All stairs will be swept daily, if necessary (otherwise weekly).

 

  9. Janitor closets and sinks will be cleaned.

 

  10. Vending machine and kitchen/coffee bar areas will be cleaned, and
disinfected as needed.

 

  11. All entrance doors, frames, glass, adjacent metal and Building’s first
floor lobby will be cleaned.

 

  12. All restrooms will be cleaned, and disinfected as needed.

 

B. Periodic Cleaning - The following general and restroom cleaning will be done
on a once each week basis (except as otherwise provided):

 

  1. All vertical surfaces will be damp dusted with clean or treated cloth
monthly.

 

  2. Delivery area and all entrances areas will be hosed down as necessary.

 

  3. All air conditioning grills, diffusers and registers will be thoroughly
cleaned monthly.

 

Schedule 2, Page 1

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  4. High dusting requiring ladders will be performed monthly.

 

  5. All stairs will be wet mopped monthly.

 

  6. Building standard blinds will be dusted once a month.

 

  7. All restroom floors will be scrubbed monthly and sealed as needed.

 

  8. All exterior surfaces of ceiling recessed light fixtures will be cleaned
quarterly.

 

  9. Plate glass partitions and doors will be washed quarterly.

 

  10. Damp mop floors weekly.

 

C. Elevators - The following cleaning services will be done in the case of all
elevators:

 

  1. Carpet will be vacuumed daily and spot cleaned as necessary.

 

  2 Exterior and interior doors and trim will be dusted nightly and cleaned.

 

  3. Cabs will be dusted nightly.

 

  4. Control and dispatch panels will be dusted and polished daily.

 

  5. Elevator threshold will be cleaned nightly.

 

D. Other Features - The following cleaning services will be performed:

 

  1. Annual window washing.

 

  2. Pest control as needed, including preventative maintenance.

 

  3. Cleaning of the parking lot and exterior grounds/walks as needed.

 

Schedule 2, Page 2

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EXHIBIT A

SITE PLAN OF PROPERTY

[see attached]

 

A-1

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EXHIBIT B

LEASED PREMISES

[see attached]

 

B-1

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

EXHIBIT C

INTENTIONALLY DELETED

 

C-1

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EXHIBIT D

WORK LETTER AGREEMENT

The Work Letter consists of Exhibits D-1, D-2, and D-3.

 

D-1

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EXHIBIT D-1

BASE BUILDING WORK AND IMPROVEMENTS

 

I. GENERAL PROVISIONS

A. Timing. As of the Effective Date of the Lease to which this Exhibit D-1 is
attached (the “Lease”), (i) Landlord is the owner of the Land, and (ii) that
certain Second Amended and Restated Development Cost Reimbursement Agreement,
dated September 28, 2011, as amended (the “Reimbursement Agreement”), by and
between Landlord and Tenant shall be deemed to have terminated and to be of no
further force or effect. Accordingly, and notwithstanding any other provision of
this Exhibit D-1 to the contrary, the obligations of Landlord and Tenant to
proceed with the design of the Improvements, the submission for permits, the
bidding and awarding of construction contracts and the actual construction of
the Improvements shall be sequenced and undertaken in a manner consistent with
the general development timetable which forms a part of Exhibit D-2 hereto.

B. Architects and Design. The parties shall use L2 Inc. or its affiliate as the
architect (“Landlord’s Architect”), for the architectural design of the
Building, including all structural, mechanical, electrical and plumbing aspects
and interior finish thereof, and Chester Valley Engineers (“Landlord’s
Engineer”), for the civil engineering associated with the Leased Premises.
Landlord’s Architect and Landlord’s Engineer, together with such additions and
substitutions thereof as determined by Landlord in its good faith discretion,
are referred to collectively as the “Design Professionals”). The Design
Professionals shall supervise the process of obtaining necessary development
approvals for the Improvements.

C. General Contractor. To ensure cost efficiency and adherence to schedule,
Landlord shall retain IMC Construction, Inc., or another general contractor
selected by Landlord (the “GC”), to serve as general contractor for construction
of the Project.

D. General Responsibility. Landlord shall generally be responsible for all
matters that must be accomplished to complete the construction of the Building
and all leasehold improvements to be initially constructed therein, including
filing plans and other required documentation with the proper governmental
authorities and securing all necessary permits for the performance of any and
all work required to be performed under the Approved Base Building Plans and
Approved TI Plans (as such terms are defined below), all of which will be deemed
part of Landlord’s Work and, upon completion of Landlord’s Work, all approvals
and permits necessary for Tenant to occupy the Leased Premises including all
final inspections for issuance of Tenant’s certificate of use and occupancy (to
the extent the same is capable of being obtained by Landlord prior to the
completion of any Tenant Work to be performed by Tenant within the Leased
Premises). Promptly after issuance of the requisite permits for each portion of
Landlord’s Work, Landlord agrees to cause the GC to commence and thereafter to
perform such portion of Landlord’s Work in a diligent, workmanlike manner, and
in accordance with applicable codes and legal requirements, including without
limitation the accessibility requirements of the Americans with Disabilities Act
(“ADA”). Landlord shall use good faith efforts to cause its GC to complete
Landlord’s Work within the time frames contemplated by this Lease, including
Exhibit D-2.

 

D1-1

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E. Defined Terms. The terminology herein shall have the same meaning ascribed to
such terminology within the Lease. In addition, the following terms shall have
the following meanings:

“30-Day Notice” shall have the meaning ascribed to such term in Paragraph II.B.7
of this Exhibit D-1.

“ADA” shall have the meaning ascribed to such term in Paragraph I.D. of this
Exhibit D-1.

“Approved Base Building Plans” shall mean the final construction drawings and
specifications, dated October 12, 2011, prepared by Landlord’s Architect and the
other Design Professionals, based on the Basis of Design and consistent with
Exhibit D-3 attached hereto, which drawings and specifications are incorporated
by reference into this Exhibit D-1 and the Lease.

“Approved TI Plans” shall mean the TI Plans prepared by the Design
Professionals, after the same have been finally approved by the parties as
provided below.

“Base Building” shall mean the core and shell components specifically set forth
in the Approved Base Building Plans.

“Basis of Design” shall mean that certain Atwater Worldwide Headquarters
Building Schematic Design Report (Basis of Design (BOD) Draft), dated
October 12, 2011, Revision 1, prepared by Landlord’s Architect, containing pages
1 through 77 (inclusive of exhibits), which report is incorporated by reference
into this Exhibit D-1 and the Lease.

“Bid Format” shall have the meaning ascribed to such term in Paragraph IV.F.(3)
of this Exhibit D-1.

“Change Order Costs” shall mean the incremental, justifiable and documented
additional costs associated with any change order to the Approved TI Plans
requested by Tenant to the extent such costs, when added to the TI Costs, exceed
the Tenant Improvement Allowance. Change Order Costs shall be included in the
regular monthly billing of TI Costs provided to Tenant on a monthly basis in
accordance with Paragraph IV.C. of this Exhibit D-1.

“Completion Notice” shall have the meaning ascribed to such term in Paragraph
II.B.7 of this Exhibit D-1.

“Construction Commencement” shall mean the date upon which the construction of
Landlord’s Base Building Work is deemed to have commenced, as evidenced by
(i) the commencement of site development work at the Leased Premises in
preparation for the installation of the foundations of the Building,
(ii) Landlord’s receipt of a building permit for the foundation of the Building,
and (iii) the mobilization of the GC at the Leased Premises for the commencement
of the construction pursuant to the Shell Construction Contract.

 

D1-2

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“Construction Contracts” shall mean all contracts entered into by Landlord for
the construction of the Improvements, including without limitation the Shell
Construction Contract and the TI Construction Contract.

“Construction Documents” shall mean the Approved Base Building Plans and the
Approved TI Plans, as the same may be modified (i) by any approved change orders
to the Approved TI Plans, and (ii) all applicable legal requirements asserted by
governmental authorities in the process of obtaining the issuance of building
permits or other approvals for Landlord’s Work. The Construction Documents shall
comply with all governmental rules, codes and requirements, and shall designate,
among other things, the locations of and specifications for all mechanical,
electrical and plumbing equipment to be installed in all spaces, all partitions,
doors, lighting fixtures, electric receptacles and switches, telephone outlets,
and air conditioning and other improvements to be installed. Landlord is
responsible for obtaining all approvals required under the Park Restrictions for
the Construction Documents, and Landlord’s approval of the Construction
Documents shall be deemed Landlord’s representation that the Construction
Documents comply with the Park Restrictions.

“Critical Path” shall mean a schedule and sequencing of items to be completed as
part of the orderly completion of Landlord’s Work in order to achieve
Substantial Completion thereof by the date set forth on Exhibit D-2. With
respect to Landlord’s Work, “Critical Path” shall generally mean and refer to
those items of Landlord’s Work which must be completed in sequence and each on
time in order for Landlord to deliver the Landlord’s Work Substantially
Completed by the date set forth on Exhibit D-2, and specifically refers to items
of work which, if delayed, will cause delay in the timing of completion of
Landlord’s Work by the date set forth on Exhibit D-2. Any incomplete item(s) of
Landlord’s Work which are not integral to the Substantial Completion of
Landlord’s Work by the date therefore set forth on Exhibit D-2 shall not be
considered “Critical Path” but Landlord agrees to use good faith efforts to
adhere to the Target Schedule, subject to Force Majeure and Tenant Delays.

“Critical Path Item(s)” shall be those items of Landlord’s Work the timely
completion of which are necessary in order for Landlord to achieve Substantial
Completion of Landlord’s Work by the Target Date (as set forth in Exhibit D-2)
and otherwise within the Target Schedule; and the parties agree that any item of
Landlord’s Work which, if not completed on time would not affect the Substantial
Completion of Landlord’s Work by the Target Date shall be deemed not to be a
“Critical Path Item” as long as Landlord is using all reasonable and diligent
efforts to complete such items in accordance with the Target Schedule.

“Delineation of Landlord’s Base Building and Landlord’s TI Work” shall mean the
outline attached hereto as Exhibit D-3.

“Design Professionals” shall have the meaning ascribed to such term in Paragraph
I.B. of this Exhibit D-1.

“Early Work” shall mean any Tenant Work which Tenant is permitted to undertake
at the Leased Premises pursuant to this Exhibit D-1 prior to the Lease
Commencement Date, and shall, with Landlord’s prior written consent, include any
installations of modular furniture in the Leased Premises, and the installation
of phone and data cabling in the Leased Premises.

 

D1-3

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“Excess Costs” shall mean any one or more of the following (i) additional costs
of construction which are incurred by Landlord due to Tenant Delays or Tenant’s
default under the Lease or this Exhibit D, and (ii) Change Order Costs. For
avoidance of doubt, except for payment of Excess Costs as defined herein, Tenant
shall have no responsibility or liability for payment of costs overruns, if any,
incurred by Landlord in the construction of Landlord’s Work.

“Final Bid Format” shall have the meaning ascribed to such term in Paragraph
IV.F.(4) of this Exhibit D-1.

“Force Majeure” shall mean and refer to delays in the Critical Path caused by
reason of strikes, lock-outs, inability to procure materials, delays in
transportation, failure of power, unusual governmental delay, including but not
limited to any unusual period of time required to obtain any building or similar
permit which is not reflected in the Target Schedule, riots, insurrection, war,
fire or other casualties, acts of God, extreme rain or other adverse weather
conditions beyond normal conditions for the season, or any other reason not
reasonably within the control of the party so delayed, hindered or prevented,
from performing work or doing any act required under the terms of this Exhibit
D-1 of this Lease. The period of the performance of any such act delayed due to
Force Majeure will be extended for a period equal to the period of such delay.
Notwithstanding the foregoing, lack of funds is not an excuse delaying,
hindering or preventing a party from performing under this Exhibit D-1. Any
party claiming the benefit of a delay due to Force Majeure shall have the
obligations (A) to notify the other party within a reasonable time period after
such delay commences, and (B) to use all reasonable and diligent efforts to
minimize the duration of such delay and the effect of the delay upon the
Critical Path.

“GC” shall have the meaning ascribed to such term in Paragraph I.C. of this
Exhibit D-1.

“Improvements” shall mean the Building, all interior improvements thereto, and
all exterior site improvements to be constructed by Landlord on the Property in
accordance with the Approved Base Building Plans, Approved TI Plans, and,
ultimately, the Construction Documents.

“Initial TI Plans” shall mean the plans and specifications attached hereto as
Exhibit D-4 with respect to Landlord’s TI Work. Upon the determination of the
Approved TI Plans pursuant to Paragraph II.B(2) below, the Initial Plans shall
be superseded and replaced by such Approved TI Plans.

“Landlord’s Architect” shall have the meaning ascribed to such term in Paragraph
I.B. of this Exhibit D-1.

“Landlord’s Base Building Work” shall mean the construction of the Base
Building, all completed in substantial accordance with the Approved Base
Building Plans.

“Landlord’s Engineer” shall have the meaning ascribed to such term in Paragraph
I.B. of this Exhibit D-1.

“Landlord’s TI Work” shall mean the construction of interior and exterior
leasehold improvements to the Building, including but not limited to, the
installation or construction of (a) interior improvements for a data center
consisting of approximately 5,000 square feet,

 

D1-4

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(b) interior improvements for a cafeteria/dining hall consisting of
approximately 10,000 square feet, (c) interior improvements for one or more
conference rooms consisting of approximately 10,000 square feet in the
aggregate, (d) open and private offices within the Building, (e) information
technology and facilities and telecommunications conduits on the exterior of the
Base Building (exclusive of exterior telephone conduit which is a part of the
Landlord’s Base Building Work as reflected on the Approved Base Building Plans),
and (f) generators, all of which shall be in substantial accordance with the
Approved TI Plans.

“Landlord’s Work” shall mean, collectively, Landlord’s Base Building Work and
Landlord’s TI Work.

“Parking Lot” shall mean the parking lot, which shall initially contain
approximately nine hundred (900) parking spaces and which may, ultimately,
contain one thousand two hundred (1,200) parking spaces, as described and
depicted in the Parking Lot Plans.

“Parking Lot Plans” shall mean the parking lot plans attached as Exhibit J of
the Lease.

“Penalty Date” shall mean that date which is one (1) day following the Target
Date, as set forth on Exhibit D-2 attached hereto, which shall automatically be
extended (i) one (1) day for each day of delay in Landlord’s construction caused
by Force Majeure, as such term is defined in this Exhibit D-1, (ii) one (1) day
for each day of delay in Landlord’s construction caused by a Tenant Delay, and
(iii) one (1) day for each day after October 20, 2011, that the Lease is not
executed by Landlord and Tenant.

“Per Diem Delay Penalty” is a per diem penalty charged for Landlord’s delay in
Substantial Completion of Landlord’s Work past the Penalty Date. The Per Diem
Penalty shall be applied as a credit against Basic Annual Rent, and shall be
equal to two calendar days’ Basic Annual Rent for each day of delay in
Substantial Completion of Landlord’s Work beyond the Penalty Date.

“Punch List Items” shall mean an itemized list prepared in accordance with
Paragraph II.B.7(b) hereof.

“Reimbursement Agreement” shall have the meaning ascribed to such term in
Paragraph I.A. of this Exhibit D-1.

“Request for Clarification” shall have the meaning ascribed to such term in
Paragraph IV.F.(3) of this Exhibit D-1.

“Shell Construction Contract” shall mean the construction contract entered into
by Landlord with the GC for construction of Landlord’s Base Building Work
(including without limitation all exterior site improvements, such as
telecommunication conduits serving Tenant’s information technology facilities as
reflected on the Approved Base Building Plans).

“Site Plan” shall mean the site plan attached hereto as Exhibit A.

“Substantial Completion” shall mean, with regard to particular work, completion
of the applicable work in accordance with the approved plans therefor (as
modified by any approved

 

D1-5

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change orders to the Approved TI Plans), other than minor modifications due to
the unavailability of specified equipment or materials and exclusive of
incomplete or defective items of the type normally included within a punch list.
Substantial Completion of Landlord’s Work as a whole shall mean (1) the Building
shell has been substantially completed; (2) all systems serving the Building
have been substantially completed and/or are operational and the HVAC systems
shall be balanced (and a balance report delivered to Tenant) subject to
subsequent adjustment upon occupancy of the Building; (3) all of Landlord’s TI
Work shall have been substantially completed except for customary punch list
items that do not interfere with the use of the Building for Tenant’s regular
business operations; (4) all exterior/site improvements, including but not
limited to surface parking areas, and exterior utilities, have been
substantially completed and/or are operational, other than final landscaping
installations which must be deferred due to seasonal considerations and subject
to punch list items; (5) the interior of the Building is in broom clean
condition, and all construction debris has been removed from the Property; and
(6) Landlord has obtained temporary certificates of occupancy for the Building,
authorizing the occupancy thereof by Tenant for its intended use, and all other
governmental inspections and other approvals in connection with the Landlord’s
Work that are able to be obtained prior to Tenant’s installation of its trade
fixtures, furniture and equipment. Notwithstanding the foregoing, in the event
Tenant has advised or notified Landlord that Tenant does not intend to perform
its obligations under the Lease or there is an Event of Default prior to the
Lease Commencement Date, and Landlord elects to pursue damages against Tenant
pursuant to the terms of the Lease as a result of receiving such notice from
Tenant, then in no event shall Landlord be entitled to receive damages which
exceed the sum of (i) one hundred percent (100%) of the costs incurred by
Landlord to acquire the Property (as defined in the Lease), plus
(ii) eighty-nine and 95/100ths percent (89.95%) of the then incurred costs of
Landlord’s Work that are properly capitalizable as a cost of construction in
accordance with generally accepted accounting principles. Notwithstanding
Landlord’s receipt of such notice from Tenant or the occurrence of an Event of
Default prior to the Lease Commencement Date, nothing contained in this Exhibit
D or the Lease shall prevent, impair or otherwise constitute a waiver of
Landlord’s rights to pursue and achieve Substantial Completion of Landlord’s
Work (including Landlord’s TI Work in accordance with the Initial TI Plans or,
if applicable following the determination of same pursuant to Paragraph II.B(2)
below, the Approved TI Plans) and require the strict performance by Tenant of
all obligations of Tenant arising under the Lease following such Substantial
Completion, failing such strict performance by Tenant Landlord shall, following
the expiration of applicable notice and cure periods, be entitled to obtain all
remedies available to Landlord under the Lease.

“Substantially Complete” and similar phrases shall mean that the item of
Landlord’s Work in question has attained Substantial Completion as defined
above.

“Target Date” shall mean December 31, 2012, as such date may be extended
pursuant to the terms and provisions of the Lease and/or this Exhibit D-1.

“Target Schedule” shall mean the general construction schedule for Landlord’s
Work which is attached as Exhibit D-2, initialed by each of Landlord and Tenant,
dated as of October 13, 2011, and made a part hereof.

 

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“Tenant Delay(s)” shall mean any delay (other than due to a Force Majeure event)
in the performance of Landlord’s Work occasioned by (i) Tenant’s failure to
review and respond to, provide submissions of, and reach agreement with Landlord
on the TI Plans in accordance with the time periods set forth in Exhibits D-1
and D-2, (ii) errors or omissions contained in the TI Plans which prevent the
issuance of a building permit or certificate of occupancy, (iii) changes to
Landlord’s TI Work requested by Tenant, with the period of delay to be specified
in the change order signed by Landlord and Tenant authorizing such change, or
(iv) the performance of Tenant Work, provided that any acts of Tenant or its
contractors in the performance of Tenant Work shall not constitute a Tenant
Delay unless such acts continue for more than two (2) Business Days after
receipt of written notice from Landlord that such acts are delaying the
performance of Landlord’s Work. Any Tenant Delay must be claimed by Landlord in
writing within ten (10) days after the beginning of Landlord’s knowledge of the
circumstances that constitute the Tenant Delay. Failure to deliver the written
notice within the time required shall constitute a waiver of the applicable
Tenant Delay.

“Tenant Improvement Allowance” shall mean an amount equal to Forty-Five Dollars
($45.00) multiplied by the Rentable Area, as such term is defined in the Lease.

“Tenant’s Personnel” shall have the meaning ascribed to such term in Paragraph
II.B.(8)(b) of this Exhibit D-1.

“Tenant’s Representative” shall be a single individual designated by Tenant in a
written notice to Landlord (and who may be changed by Tenant at any time upon
giving Landlord prior written notice thereof), who Tenant agrees shall be
available to meet and consult with Landlord at the Building as Tenant’s
Representative respecting the matters which are the subject of this Exhibit D
and who, as between Landlord and Tenant, shall have the power to legally bind
Tenant with respect to notices from Tenant making requests for and approving
changes, giving approval of plans or work, or otherwise giving directions to
Landlord under this Exhibit D. Tenant hereby designates Joe Burke as Tenant’s
Representative (and Tenant may change such designation at any time by providing
written notice to Landlord which designates a different Tenant’s
Representative).

“Tenant Work” shall mean any construction work under separate permit to be
obtained by Tenant, furniture installations and other installations (including
telephone systems, upgraded security systems, computer LAN wiring or other
similar installations), to the extent the same are reasonably approved by
Landlord in writing and are not provided for under the Construction Documents
and are intended by Tenant to be performed by Tenant or under Tenant’s
supervision prior to Tenant’s occupancy.

“TI Construction Contract” shall mean the construction contract entered into by
Landlord with the GC for construction of Landlord’s TI Work or a change order
under Landlord’s existing construction contract with the GC which specifically
addresses Landlord’s TI Work.

“TI Costs” shall have the meaning set forth in Paragraph IV.B. of this Exhibit
D-1

“TI Plans” shall mean, collectively, architectural plans, construction drawings
and structural, mechanical, electrical and plumbing (MEP) drawings and
specifications for Landlord’s TI Work, in form sufficient for the permitting and
construction of Landlord’s TI Work.

 

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II. LANDLORD’S WORK

A. Landlord’s Base Building Work/Design and General Performance Covenant.

(1) Landlord’s Base Building Work - Generally. Upon agreement on the Approved
Base Building Plans, entry into the Shell Construction Contract, and Landlord’s
receipt of a building permit allowing such construction, Landlord shall cause to
be constructed Landlord’s Base Building Work, all in accordance with the
provisions of this Exhibit D. Such construction shall be completed in
substantial accordance with the Approved Base Building Plans.

(2) Approved Base Building Plans. Pursuant to the terms of the Reimbursement
Agreement, Landlord has previously caused Landlord’s Architect and other Design
Professionals to commence and complete the Approved Base Building Plans, which
plans have been approved by Landlord and Tenant prior to the date hereof.
Landlord shall not be obligated to make any revisions to the Approved Base
Building Plans.

(3) Performance of Landlord’s Base Building Work. Following the date hereof,
Landlord agrees to apply for and diligently pursue the issuance of one (1) or
more building permits for the performance of Landlord’s Base Building Work.
Tenant acknowledges that Landlord may initially apply for a site development
plan approval and thereafter one (1) or more building permits which encompass
all or a portion of Landlord’s Base Building Work, or which encompasses all of
Landlord’s Work. Promptly after the latest to occur of (i) the issuance of such
building permits, and (ii) Landlord’s entry into the Shell Construction
Contract, Landlord will promptly cause Landlord’s Base Building Work to be
commenced, completed, installed or performed, as the case may be, in accordance
with the Approved Base Building Plans, subject only to variations as described
below, and any modifications required by applicable governmental authorities in
review of the Approved Base Building Plans as part of the process of obtaining a
building permit. During construction of the Building, Landlord shall have the
right to make substitutions of material(s) of equivalent grade and quality, and
to make changes necessitated by unforeseeable conditions met in the course of
construction, provided Landlord shall seek Tenant’s approval of any material
change to the Approved Base Building Plans which is not in conformity with the
Basis of Design, which approval shall not be unreasonably withheld, conditioned
or delayed. If Tenant fails to respond to a request to approve a material change
requiring Tenant’s approval within five (5) days following the date such request
was received by Tenant, then Landlord’s request shall be deemed to be approved.
If Tenant reasonably disapproves of any material change requiring Tenant’s
approval, Tenant will provide Landlord a written statement setting forth with
reasonable specificity its reason for such disapproval and Landlord shall
resubmit its request with respect to such material change addressing Tenant’s
disapproval. If Tenant fails to respond in the times set forth above, such
failure shall be deemed to constitute Tenant’s approval of such change. This
process shall continue until such change is approved or deemed to be approved.

 

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B. Landlord’s TI Work/Design, Change Orders and General Performance Covenants.

(1) Preparation of TI Plans. As set forth above, Landlord is undertaking
Landlord’s TI Work as an accommodation to Tenant and shall have no liability or
responsibility for the design thereof, the sufficiency for Tenant’s intended
purpose, or any cost thereof in excess of the Tenant Improvement Allowance.

(2) Approval of and Revisions to Plans and Specifications. Promptly following
the date hereof, Tenant shall provide the Design Professionals with any and all
information which is required to enable the Design Professionals to prepare and
finalize the TI Plans by the applicable dates set forth in Exhibit D-2 attached
hereto. Within five (5) business days after a copy of the TI Plans has been
provided to Landlord, Landlord shall return such TI Plans to Tenant with its
objections, suggested modifications and/or approval. Unless Tenant has a
reasonable objection to Landlord’s objections or suggested modifications, said
TI Plans shall thereafter be revised by the Design Professionals to reflect the
applicable changes within ten (10) days following Tenant’s receipt of Landlord’s
objections or suggested modifications, and the same shall be resubmitted to
Landlord for approval. If, upon receipt of Landlord’s objections or suggested
modifications, Tenant wishes to take reasonable exception thereto, Tenant may do
so within five (5) business days after the date upon which Tenant first received
such objections or suggested modifications. In such event, said TI Plans shall
thereafter be revised by the Design Professionals within such ten (10) day
period to address Landlord’s proposed modifications to which Tenant did not
reasonably object, and Landlord shall grant its approval or disapproval thereto,
and/or state any further objections or proposed modifications, within five
(5) business days after receipt of the modified plans. After the first
submission and resubmission, Landlord and Tenant agree to restrict further
objections or disputes to matters which have not previously been agreed upon or
accepted by the other party, and to deliver revised submissions or objections
within a five (5) business day period after receipt of such objections or
proposed modifications, as the case may be. The parties shall, in all events,
attempt to reach agreement as soon as possible, and in all events by the date
therefor set forth in Exhibit D-2 attached hereto. The process of submissions
and resubmissions shall continue thereafter with the parties negotiating
diligently and in good faith, until final agreement is reached. Each party
agrees that its failure to respond to a submission or resubmission within the
above-referenced time frames shall constitute such party’s acceptance of the
submission or resubmission in question. The final TI Plans shall constitute the
Approved TI Plans hereunder.

(3) Landlord’s TI Work. Following final approval of the Approved TI Plans,
Landlord agrees promptly to apply for a building permit for the performance of
Landlord’s TI Work. Tenant acknowledges that Landlord may apply for a building
permit which encompasses only Landlord’s TI Work, or which encompasses all or
certain portions of Landlord’s Work. Promptly after the latest to occur of
(i) the issuance of such building permit, (ii) Landlord’s entry into the TI
Construction Contract, and (iii) the completion of such portion of Landlord’s
Base Building Work as is necessary in order to commence Landlord’s TI Work in
compliance with prudent construction practices and the Critical Path, Landlord
will promptly cause Landlord’s TI Work to be commenced, completed, installed or
performed, as the case may be, in accordance with the Approved TI Plans, subject
only to variations necessitated by the unavailability of specified materials and
equipment (due to no fault of Landlord) and any modifications required by
applicable governmental authorities in review of the Approved TI Plans as part
of the process

 

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of obtaining a building permit. Landlord shall not make any material changes to
the Approved TI Plans without first consulting with Tenant and obtaining
Tenant’s consent thereto, which shall not be unreasonably withheld, conditioned
or delayed.

(4) Change Orders. Tenant shall be allowed to make change orders only to the
Approved TI Plans provided that (i) any such proposed change order shall be
submitted to Landlord for Landlord’s consent, and Landlord shall have five
(5) business days after receipt of all documentation necessary for Landlord to
properly review such change order within which to review and either approve or
disapprove same within the same standard of reasonableness and other standards
of review as would be applicable to any alteration of the Leased Premises
proposed by Tenant after the Lease Commencement Date pursuant to the Lease (and
provided further that, in the event Landlord does not approve all items set
forth in said proposed change order, Landlord will notify Tenant of the basis
for its disapproval, which must be in accordance with the reasonableness and
other standards set forth in the Lease (as aforesaid), and Landlord and Tenant
will work together expeditiously and in a commercially reasonable manner to
reach agreement on any such proposed change order); (ii) the cost and credits,
if any, associated with such change shall be documented in a written change
order signed by Landlord and Tenant, and any Change Order Costs resulting from
such change shall be paid by Tenant to Landlord in accordance with Paragraph IV
below (and any net savings resulting from such change shall be applied as a
credit to TI Costs); and (iii) any delay occasioned by any such change order
(which shall be specified in the change order) shall be deemed a Tenant Delay
within the meaning of this Exhibit D-1.

(5) Tenant’s Inspection Right. Subject to the insurance requirements and the
reasonable rules and regulations of the GC, Tenant’s Representative shall have
the right during normal working hours, and accompanied by a representative of
either Landlord or the GC, to have access to the Leased Premises for purposes of
observation and inspection during the performance of Landlord’s Work, provided
that Tenant or Tenant’s Representative shall have the obligation to provide
prior notice of any such entry to the GC and to Landlord’s Project Manager.
Access for such purposes shall not be deemed to constitute possession or
occupancy, however, such entry and/or occupancy shall be subject to all of the
terms and conditions of the Lease, except for the payment of Rent and additional
rent (including Operating Expenses and Taxes (as such terms are defined in the
Lease)).

(6) Interim Correction of Defects. Landlord shall promptly undertake and
diligently prosecute (or cause the GC to undertake and prosecute) the correction
of any defects in Landlord’s Work of which Landlord is notified in writing and
which have been verified by Landlord as a result of any of the aforesaid
inspections by Tenant.

(7) Substantial Completion; Delivery of Possession; Punch List.

(a) Landlord shall deliver to Tenant a written notice (the “30-Day Notice”)
approximately thirty (30) days prior to the date upon which Landlord in good
faith estimates that Landlord’s Base Building Work will be Substantially
Complete (which estimate shall be subject to Force Majeure and Tenant Delays)
and again approximately thirty (30) days prior to the date upon which Landlord
in good faith estimates that Landlord’s TI Work will be Substantially Complete
(which estimate shall be subject to Force Majeure and Tenant Delays).

 

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(b) When the applicable portion of Landlord’s Work is Substantially Complete,
Landlord shall cause Landlord’s Architect to deliver to Tenant a written notice
(the “Completion Notice”) certifying in good faith that the applicable portion
of Landlord’s Work is Substantially Complete. As soon after Landlord delivers
the Completion Notice as is reasonably practicable (and in all events within
five (5) days thereafter), Tenant and a representative of Landlord shall
schedule and participate in a joint inspection of the Leased Premises (with
respect to the Landlord’s Base Building Work) and, as applicable, the Building
(with respect to the Landlord’s TI Work). A joint inspection report summarizing
Landlord and Tenant’s observations shall be prepared by Landlord and sent to
Tenant within five (5) days of the inspection; Tenant shall have five (5) days
to review and approve or object in whole or part to the Landlord’s joint
inspection report. Landlord and Tenant shall negotiate in good faith to promptly
resolve the items to which Tenant has objected. In no case, shall Tenant be
deemed to have approved of any matters which are later found to contain latent
defects. If Tenant does not respond within five (5) days of Tenant receipt of
the written joint inspection report, then Tenant shall be deemed to have
accepted the Leased Premises, including the Building (in its condition as of the
date of the Completion Notice but without waiving Landlord’s obligation to
correct Punch List Items pursuant to this Paragraph II.B.(7)) on the date of the
Completion Notice, other than latent defects (as set forth in Paragraph
II.B.(7)(d) below) and final air balancing upon Tenant’s occupancy of the
Building. The scheduling and performance of such inspection shall not affect the
date of Substantial Completion of the applicable part of Landlord’s Work except
to the extent such inspection demonstrates that Landlord has failed to achieve
Substantial Completion of the applicable part of Landlord’s Work as of the date
of the Completion Notice.

(c) The joint inspection report shall include a schedule of minor deviations or
variations from the Construction Documents and requiring completion or repair of
a nature commonly found on a “punch list”. Tenant shall have the right to add
items to the punch list for up to thirty (30) days following Substantial
Completion. In the event of a dispute, Landlord (or Landlord’s Architect) and
Tenant shall negotiate in good faith, using their reasonable discretion, to
determine which items constitute Punch List Items. The existence of such Punch
List Items shall not postpone the Lease Commencement Date of this Lease nor the
obligation of Tenant to pay Rent or any other charges due under this Lease.

(d) Landlord covenants and agrees to complete all items on the punch list as
soon as reasonably possible thereafter. Landlord covenants and agrees to repair
or replace any latent defects in its work or in the Building systems and
structures as soon as reasonably practicable after Tenant provides notice
thereof to Landlord; provided, however, that unless otherwise required of
Landlord pursuant to the provisions of this Lease, Landlord shall have no
obligation to repair nor liability for defects in any such work for the initial
buildout which are detected more than one (1) year after the date of Substantial
Completion of Landlord’s Work; or in the case of any such defect previously
repaired, first detected more than one (1) year from the date of the last repair
of such defect. The foregoing shall not affect, however, any of the general
repair covenants set forth in the Lease.

(8) Early Work and Furniture Installation.

(a) Landlord acknowledges that Tenant wishes to commence operations from the
Leased Premises as soon as possible after Landlord’s Work is Substantially
Complete, and

 

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that there may be some aspects of Tenant Work that may need to be completed
before Tenant can commence operations at the Leased Premises. Therefore,
Landlord and Tenant acknowledge and agree that Tenant shall be given access to
the Leased Premises prior to the Substantial Completion of Landlord’s Work, as
and to the extent set forth below, so that Tenant may perform certain items of
Tenant Work, and thereby expedite Tenant’s use and occupancy of the Leased
Premises. Any such items of Tenant Work shall be agreed upon in writing by
Landlord and Tenant in their reasonable discretion prior to the commencement of
any such work, and shall be referred to herein as the Early Work. Landlord and
Tenant agree that the performance of any Early Work shall be in accordance with
this Paragraph II.B(8) and Paragraph V herein. In no event will any delay in the
completion of Tenant Work (including without limitation any Early Work) result
in an extension or delay of the Lease Commencement Date.

(b) Any entry onto the Leased Premises prior to Substantial Completion of
Landlord’s Work and/or the Lease Commencement Date, including without limitation
any early entry for the purposes of performing any Early Work, shall not be
deemed to constitute possession or occupancy, but shall be subject to all of the
terms and conditions of the Lease except for the obligation to pay Rent,
Operating Expenses, Taxes and any other occupancy charges under the Lease (which
will not be applicable until the Lease Commencement Date, as provided in the
Lease). Tenant shall request permission to enter the Leased Premises in writing,
specifying the requested date, time of entry, and which Early Work Tenant
intends to perform, at least ten (10) days prior to any such entry, and Landlord
shall cause the GC to respond promptly to such request and to use reasonable
efforts to accommodate the request, in accordance with the scheduling
restrictions and requirements set forth below. In addition, any entry by the
Tenant, its agents, employees or contractors (any and all of which to be
referred to hereinafter as “Tenant’s Personnel”): (i) shall be subject to the
insurance requirements set forth in Paragraph V.D of this Exhibit D-1;
(ii) shall comply with any reasonable scheduling requirements of the GC; and
(iii) shall be performed in a manner reasonably designed to avoid delay in the
Substantial Completion of Landlord’s Work. Tenant shall bear the full risk of
loss for any materials, equipment or other property which Tenant’s Personnel
bring onto the Leased Premises in connection with any Early Work, which shall be
at Tenant’s sole risk.

(c) Notwithstanding the foregoing to the contrary, Tenant acknowledges that
Tenant’s Personnel shall not be permitted to enter the Leased Premises prior to
the Substantial Completion of Landlord’s Work to perform any Early Work unless
and until Tenant receives permission from Landlord and the GC for such entry,
subject to the terms of Paragraph II.B(8)(d) and Paragraph V below. Landlord
shall ensure that the GC’s schedule for performance of Landlord’s Work shall
include a reasonable block of time which is allocated to Early Work.

(d) Landlord agrees to cause the GC to cooperate in good faith with Tenant to
accommodate Tenant’s requested entry dates, subject to the terms of this
Paragraph II.B.(8)(d), provided that if the GC determines that it is not
feasible for Early Work to be performed on a particular floor or floors of the
Building, or determines that allowing such entry would delay the Substantial
Completion of Landlord’s Work, then Tenant’s Personnel shall not have the right
to enter such floor(s) until authorized to do so by the GC. Subject to the
foregoing sentence, Landlord and the GC shall make all reasonable efforts to
enable the Tenant to have access to all floors of the Building as they become
available (i.e., as the commencement of Early Work becomes feasible).

 

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(e) Tenant (or its contractors performing such work) shall be responsible for
any damage to Landlord’s Work caused by Tenant, or its agents, employees and
contractors, in the course of performing any Early Work, and Tenant agrees to
indemnify, defend and hold Landlord harmless from any loss, cost, liability or
damages incurred by Landlord as a result of Tenant’s Early Work.

 

III. TIMING OF CONSTRUCTION

A. Target Date. Subject to Force Majeure and Tenant Delays, Landlord agrees to
cause Landlord’s Work to be substantially completed on or before the Target
Date. Landlord shall give prompt written notice to Tenant of any delays in the
completion of a Critical Path Item beyond the estimated completion date therefor
set forth in Exhibit D-2 (as extended due to Force Majeure and Tenant Delays),
together with an estimate of the duration of such delay. If such a delay occurs
(or is anticipated by Landlord to occur) due to Force Majeure or Tenant Delays,
Landlord will, upon Tenant’s written request, investigate with the GC to
determine if it is possible to accelerate the completion of Landlord’s Work
(through overtime and the like) in order to reduce or eliminate any anticipated
delay, and, if so, Landlord and the GC will identify the cost which will be
associated with accelerating the completion of Landlord’s Work to the extent
delayed thereby (or the portion thereof which is affected by such delay). If
such acceleration is possible, Landlord will, in consultation with and with the
approval of Tenant, reasonably approve change orders allowing for such
acceleration provided that the cost of such acceleration shall constitute Excess
Costs which shall be paid in accordance with Paragraph IV below.

B. Effect of Delay.

(1) Notwithstanding any provision contained in the Lease or this Exhibit to the
contrary, in the event that Construction Commencement has not occurred on or
prior to January 15, 2012, Tenant shall have the right, as its sole and
exclusive remedy, to terminate the Lease by delivering written notice thereof to
Landlord at any time prior to the occurrence of Construction Commencement, in
which event the Lease shall terminate and neither Landlord nor Tenant shall have
any further obligations thereunder.

(2) If and to the extent there is a delay in Substantial Completion beyond the
Target Date, then the following shall apply, as the case may be:

(a) If and to the extent such non-completion occurs as a result of any event of
Force Majeure, the Lease Commencement Date of this Lease shall be the date upon
which Substantial Completion of Landlord’s Work occurs.

(b) If and to the extent such non-completion occurs for any reason other than as
a result of Force Majeure or any Tenant Delays, then (1) the Lease Commencement
Date of this Lease shall be the date of Substantial Completion of Landlord’s
Work, and (2) if Substantial Completion is delayed past the Penalty Date, Tenant
shall also be entitled to receive a credit against Basic Annual Rent (commencing
on the Lease Commencement Date, as adjusted pursuant to this subparagraph) in an
amount equal to the Per Diem Delay Penalty

 

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as calculated herein multiplied by the number of days elapsing between the
Penalty Date and the date Substantial Completion of Landlord’s Work is achieved
by Landlord.

(c) If and to the extent Substantial Completion of Landlord’s Work is delayed as
a result of any Tenant Delay(s), then (1) the Lease Commencement Date of this
Lease shall be the date of Substantial Completion of Landlord’s Work, (2) Tenant
shall pay Landlord liquidated damages in an amount equal to the number of days
by which Substantial Completion was delayed due to Tenant Delay multiplied by
the per diem amount of Basic Annual Rent, and (3) Landlord shall not be liable
to Tenant for any abatement, damages or other rights and remedies as a result
thereof.

(d) The provisions of clauses (a), (b) and (c) shall be construed in conjunction
with each other in those cases where delay in completion of items of Landlord’s
Work which materially affect the Critical Path are caused in part by Force
Majeure, in part by Tenant Delays and/or in part by Landlord’s non-performance.

The foregoing shall constitute the sole and exclusive remedies of Landlord and
Tenant if Substantial Completion of Landlord’s Work is delayed beyond the Target
Date.

C. Tenant Delay(s). Tenant acknowledges that Tenant Delay(s) may cause delay in
Landlord’s ability to complete Critical Path Items which are part of Landlord’s
Work within the time frames contemplated by this Lease. Accordingly,
(i) Landlord’s completion obligations with respect to Landlord’s Work (and, if
applicable, Construction Commencement and the Penalty Date) shall be extended
one (1) day for each day of delay in the Critical Path caused by Tenant Delays;
and (ii) Landlord shall not be liable to Tenant for any Rent abatement
(including, but not limited to the Per Diem Delay Penalty), damages or other
rights and remedies with respect to the period of delay due to Tenant Delays.

D. Early Substantial Completion. If Landlord shall achieve Substantial
Completion of Landlord’s Work prior to the estimated date therefore as set forth
on Exhibit D-2 (as extended due to Force Majeure and Tenant Delays), the Lease
Commencement Date shall be the date of Substantial Completion, irrespective of
whether Tenant commences to occupy the Leased Premises on such earlier date, or
is unable to do so; provided that in no event shall the Lease Commencement Date
be less than thirty (30) days after the date of Landlord’s 30-Day Notice.

E. Timing. Landlord and Tenant acknowledge that the dates set forth in this
Exhibit D as the date for Construction Commencement, the date by which Landlord
will achieve Substantial Completion of Landlord’s Work, and the Penalty Date,
and all other dates derived therefrom, are predicated on the assumption that
this Lease will be fully and finally executed and delivered by Tenant on or
before October 20, 2011. Accordingly, and notwithstanding any provision of this
Exhibit D to the contrary, in the event the Lease is not fully and finally
executed and delivered by Tenant on or before October 20, 2011, then (in
addition to all other extensions which may be contemplated herein due to Tenant
Delays and/or Force Majeure, if any) each such date referenced herein which
pertains to Landlord’s obligations to complete Landlord’s Work shall be deemed
to have been extended one (1) day for each day elapsing between October 20, 2011
and the date upon which the Lease is fully and finally executed and delivered by
Tenant.

 

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F. Late Delivery of the Leased Premises. Except for Tenant’s right to terminate
the Lease pursuant to Paragraph III.B.(1) above, if Landlord delivers possession
of the Leased Premises subsequent to the Penalty Date, as such date may be
extended pursuant to this Exhibit D-1, then this Lease will remain fully
effective and Tenant may not cancel or rescind this Lease, but rather Landlord
shall be liable to Tenant, as Tenant’s sole and exclusive remedy, for the amount
of the Per Diem Delay Penalty.

 

  IV. COST TO COMPLETE

A. Base Building Work. Except as otherwise set forth herein, Landlord shall be
responsible for and shall pay when due all costs associated with the preparation
of the Approved Base Building Plans, and the performance of Landlord’s Base
Building Work in accordance with this Exhibit D.

B. TI Costs. All costs associated with Approved TI Plans and the performance of
Landlord’s TI Work including but not limited to all costs paid to the GC and the
separate contractors pursuant to the Final Bid Format (as defined below), all
architectural, engineering and professional fees and costs payable to any
architects and engineers in connection with the preparation of the TI Plans and
Approved TI Plans and all construction administration costs incurred thereunder,
all permit and inspection fees in connection with Landlord’s TI Work, and a
construction management fee to Landlord in an amount equal to the sum of
$500,000 (which shall be payable in 15 equal monthly installments of $33,333.33
commencing November 1, 2011 and ending January 1, 2013), are collectively
referred to herein as the “TI Costs.” Landlord shall be responsible for and pay
when due the TI Costs, subject to the application of the Tenant Improvement
Allowance and the payment by Tenant of (i) any TI Costs that exceed the Tenant
Improvement Allowance and (ii) any Change Order Costs. Following approval of the
Final Bid Format and Landlord’s execution of a contract with the GC for the
construction of Landlord’s TI Work pursuant to Paragraph IV.F (4) below,
Landlord shall provide Tenant a written estimate of the total TI Costs (the
“Estimated TI Costs”). If such Estimated TI Costs exceed the Tenant Improvement
Allowance (such excess being the “TI Costs Overage”), then Tenant shall pay to
Landlord one-half (1/2) of such TI Costs Overage within ten (10) days following
Tenant’s receipt of such estimate. Within ten (10) days following Tenant’s
receipt of written notice from Landlord that Landlord’s Architect has determined
that twenty-five percent (25%) of Landlord’s TI Work has been completed, Tenant
shall pay to Landlord the remaining one-half (1/2) of the TI Costs Overage.
Landlord shall be entitled to apply the TI Costs Overage received from Tenant to
the TI Costs as Landlord’s TI Work progresses. The TI Costs Overage shall be
non-refundable to Tenant unless the actual TI Costs are less than the Estimated
TI Costs, in which event Landlord shall refund the amount by which the actual TI
Costs are less than the Estimated TI Costs that were used to calculate the TI
Costs Overage within thirty (30) days following Substantial Completion of
Landlord’s Work.

C. Payment of TI Costs. If the actual TI Costs are less than the Tenant
Improvement Allowance, Tenant shall have the right to apply the remaining Tenant
Improvement Allowance in payment of the costs of Tenant Work. To the extent of
(i) any TI Costs in excess of the Tenant

 

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Improvement Allowance, and/or (ii) any Change Order Costs, the same shall be
paid as follows: on a monthly basis, Landlord shall provide Tenant (or Tenant’s
Representative) with copies of requisition forms provided by Landlord and
certified by the GC, setting forth the amount of TI Costs (including any Change
Order Costs) with respect to the period applicable to such requisition. Tenant
shall promptly notify Landlord in the event Tenant determines that any such
information delivered by Landlord is inaccurate or incomplete in any respect.
Landlord shall be entitled to apply the TI Costs Overage received by Landlord in
full satisfaction of such requisition. Following the application of the Tenant
Improvement Allowance and the depletion of the TI Costs Overage received by
Landlord, Tenant shall be responsible for the payment of 100% of the TI Costs
and Change Order Costs, which amounts shall be paid by Tenant within thirty
(30) days following Tenant’s receipt of a monthly requisition described in this
Paragraph IV.C.

D. Payment of Other Excess Costs. All Excess Costs, other than Change Order
Costs, shall be paid by Tenant within thirty (30) days following Tenant’s
receipt of an invoice therefor. Any such invoice of Excess Costs shall be
delivered to Tenant concurrently with a monthly requisition of TI Costs
described in Paragraph IV.C. above.

E. Audit. Tenant shall have the right, within ninety (90) days after Substantial
Completion, to audit Landlord’s books and records with respect to the TI Costs,
Change Order Costs and Excess Costs. If as a result of such audit it is
determined that Tenant paid an incorrect amount for any such costs, the parties
shall make appropriate adjustments within thirty (30) days after completion of
the audit.

F. TI Bidding.

(1) Any reference in this Paragraph IV.F(1) to Tenant shall be deemed to refer
to Tenant acting through Tenant’s Representative after the completion of
Approved TI Plans. After agreement upon the relevant portions of the Approved TI
Plans, Landlord shall prepare a bidding package for Landlord’s TI Work based
upon the Approved TI Plans, to be provided to the GC.

(2) Landlord shall promptly issue the aforesaid bidding package to the GC. The
bid solicitation will request that the GC make best efforts to obtain bids from
a minimum of three (3) subcontractors selected by the GC to have demonstrated
ability to perform the work in accordance with the Approved TI Plans for each
type of work required. Landlord will provide Tenant with the ability to approve
or reject any subcontractor performing Landlord’s TI Work. Landlord agrees to
cause the GC to identify “long lead” items or materials which will delay
Substantial Completion of Landlord’s Work, and shall notify Tenant of the same
promptly after such identification can be made. Landlord and Tenant shall
cooperate in good faith to avoid such “long lead” items or materials.

(3) All subcontractors shall submit their bids directly to the GC, who will
review and analyze all bids submitted, and Landlord shall format all bids
relating to the performance of Landlord’s TI Work for review by Tenant; and
either Landlord or the GC will prepare a bid format which includes a summary of
all bids and the selected subcontractors (the “Bid Format”), which shall be
delivered to Tenant and Tenant’s Representative within five (5)

 

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business days after receipt of the Bid Format. Upon receiving the Bid Format,
Tenant shall have ten (10) days to review the Bid Format and request any
clarifications thereof from Landlord (a “Request for Clarification”). The Bid
Format shall be deemed approved unless Tenant makes a Request for Clarification
within such ten (10) day period. If Tenant timely makes a Request for
Clarification, Landlord shall promptly commence diligent efforts to cause the
information requested to be furnished, if possible.

(4) Within three (3) days after Tenant’s receipt of the clarification requested,
Landlord shall deliver the final Bid Format for the Landlord’s TI Work (“Final
Bid Format”), which shall be deemed approved by Tenant. Promptly following the
approval of the Final Bid Format, Landlord shall enter into a TI Construction
Contract pursuant to which the GC shall be paid a fixed price or guaranteed
maximum price for the construction of Landlord’s TI Work in the amount of the
final bids of the accepted subcontractors plus GC’s general conditions and 1.8%
for the GC’s profit.

(5) Landlord and Tenant shall endeavor to meet with each other and with the GC
and Design Professionals at least twice monthly to review design and
construction issues for Landlord’s TI Work at all times prior to the Lease
Commencement Date.

 

V. TENANT WORK

A. Generally.

(1) In the event Tenant wishes to perform any Tenant Work in the Leased Premises
prior to the Substantial Completion of Landlord’s Work, the provisions of this
Paragraph V shall apply. Any such Tenant Work, which shall involve only the
installation of Tenant’s furniture, moveable trade fixtures, equipment and voice
and data cabling, shall be performed by a contractor reasonably approved by
Landlord in accordance with plans and specifications approved by Landlord, which
approvals shall not be unreasonably withheld. The procedure for submission of
any plans and specifications for Tenant Work shall be substantially identical to
the procedure for obtaining Landlord’s approval of the TI Plans. Tenant agrees
that Landlord will have the right to inspect, at the sole cost and expense of
Landlord, the performance of Tenant Work by Tenant’s contractor(s) and
subcontractor(s), through a construction manager appointed by Landlord, and
Tenant agrees to cooperate with Landlord to facilitate such inspection,
including without limitation: (A) notifying Landlord and such construction
manager prior to any and all government inspections of Tenant Work so that
Landlord’s construction manager can be present therefor; (B) permitting
Landlord’s construction manager free and clear access to the Leased Premises
during the construction period, as necessary to perform such inspections, and
(C) complying (or causing its contractor to comply) with the reasonable
directions of such construction manager in connection with Tenant Work, as long
as such directions are not inconsistent with the Approved Plans. Landlord shall
use reasonable efforts not to interfere unreasonably with the performance of any
Tenant Work during the course of any inspections by Landlord or Landlord’s
construction manager pursuant to this Paragraph.

(2) In the performance of any Tenant Work in accordance with this Lease, Tenant
shall cause its contractor(s) to use reasonable and diligent efforts not to
interfere with ongoing operations at the Leased Premises (including the
Building), including, but not limited to Landlord’s Work.

 

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(3) Tenant’s contractor(s) shall keep all construction areas reasonably clean
and free of trash and debris, and Tenant shall police the activities of its
contractors, subcontractors and their respective employees with regard to
keeping the Building and Leased Premises clean. Tenant’s construction contract
shall indemnify Tenant and Landlord from damages, losses and expenses associated
with the wrongful acts and omissions of Tenant’s contractor, its agents,
employees and subcontractors, and shall otherwise be consistent with the terms
hereof.

(4) In connection with any Tenant Work, Tenant shall provide to Landlord copies
of all applications for permits, copies of all governmental inspection reports
and/or certificates, and any and all notices or violations communicated to
Tenant or its contractors by applicable governmental authorities, promptly upon
receipt and/or submission thereof, as the case may be. Tenant agrees to comply
(or to cause its contractors to comply) with all applicable federal, state and
local laws, regulations and ordinances in the performance of any Tenant Work,
and to promptly rectify any violations of such laws caused by the acts or
omission of Tenant, its employees, agents and/or contractors, and Tenant shall
be responsible for any non-compliance by Tenant or its agents, employees and
contractors.

(5) Without limiting the generality or applicability of the foregoing
provisions, or of any other applicable provision of this Exhibit D or the Lease,
Tenant agrees that the following provisions shall apply to the performance of
any Tenant Work:

(a) In performing portions of any Tenant Work which involve construction work
upon the exterior of the Building, Tenant agrees that it shall, at Tenant’s sole
expense, restore all areas of the Building’s exterior, including without
limitation all adjacent planting areas, sidewalks and parking areas, affected by
the execution of such Tenant Work, to their original condition upon the
completion of such portions of such Tenant Work.

(b) Tenant shall protect and restore all work areas of the Leased Premises
(including without limitation any portions of the Building) utilized or affected
in performing any Tenant Work, including, but not limited to, Building roofs,
floor penetrations and chase wall penetrations. Tenant shall use only roofing
contractors who are permitted to perform such work upon the roof without
nullifying any then applicable roof warranty for penetrations and reflashing of
affected roof areas (if any), which roofing contractors shall be subject to
Landlord’s reasonable approval and which roofing contractors shall warrant to
Landlord’s reasonable satisfaction the integrity of any such roof or exterior
penetrations and that the same are free from leakage and are otherwise properly
waterproof. Tenant shall further ensure that all floor penetrations are properly
fire-stopped, in accordance with applicable building and fire codes and prudent
construction practices. Landlord’s construction manager and/or representatives
shall be advised at the time Tenant commences any portion of any Tenant Work
involving the exterior of the Building, the Building roof and all

 

D1-18

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floor to floor penetrations, and all such work shall be subject to the
inspection and approval of Landlord (and in the case of work involving the
exterior of the Building, shall be supervised by Landlord’s construction manager
and/or other representatives). In regard to the foregoing right of inspection
and approval, Tenant and its contractor shall permit such construction manager
and/or representatives free access to all affected areas of the Leased Premises
and Building necessary for Landlord to conduct such inspections and/or
supervision.

(c) Tenant shall cause its contractor performing any Tenant Work to provide
copies of warranties for such Tenant Work and the materials and equipment which
are incorporated into the Building and/or the Leased Premises in connection
therewith, as well as provide to Landlord all operating and maintenance manuals
for all equipment and materials incorporated into the Building and/or Leased
Premises as part of any Tenant Work. Tenant shall either assign to Landlord, or
enforce on Landlord’s behalf, all such warranties to the extent repairs and/or
maintenance on warranted items would be covered by such warranties. Without
limitation, all aspects of any Tenant Work shall be warranted to be free from
defects in design and workmanship for a period of not less than one (1) year
from Substantial Completion of construction.

(6) Except as provided herein, Tenant shall obtain all necessary permits in
connection with any Tenant Work, including all final inspection approvals which
are required for the proper completion of such Tenant Work.

B. First-Class Lien-Free Completion. Landlord and Tenant shall each use only
first-class materials substantially in accordance with the Approved Base
Building Plans and Approved TI Plans in connection with any work performed by
them. All Tenant Work and all of Landlord’s Work shall be paid for in full and
in a timely fashion by Tenant and Landlord, respectively, and shall be performed
in a lien-free, first-class, and good and workmanlike manner, and in accordance
with all applicable codes and requirements. Tenant’s indemnity and covenants as
set forth in the Lease shall apply to any liens created by virtue of any Tenant
Work. Tenant’s architect shall be responsible for ensuring that all Tenant Work
complies with the ADA and all other applicable federal, state and local laws,
ordinances, codes and regulations.

C. Bonding. All contractors and subcontractors performing Tenant Work shall be
subject to Landlord’s reasonable approval, and shall be bondable and licensed to
do business in the Commonwealth of Pennsylvania.

D. Insurance Requirements Applicable to Tenant During Tenant Work.

(1) Tenant shall secure, pay for, and maintain, or cause its contractors and
subcontractors to secure, pay for, and maintain, during the continuance of any
Tenant construction work at the Leased Premises, all of the insurance policies
required in the amounts as set forth herein, together with such insurance as may
from time to time be required by city, county, state or federal laws, codes,
regulations or authorities. Tenant Work (if any) may not commence until all
required insurance has been obtained, and, if Landlord requests, until Tenant’s
certificates of such insurance have been delivered to Landlord. Tenant’s
insurance

 

D1-19

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policies shall name the Landlord, Landlord’s members, Landlord’s development
manager and property manager and Landlord’s mortgagee(s) as additional
insureds. Landlord shall have the right to require Tenant, and Tenant shall have
the duty, to stop work at the Leased Premises immediately if any of the coverage
Tenant is required to carry herein lapses during the course of the work, in
which event such Tenant Work may not be resumed until the required insurance is
obtained and satisfactory evidence of same is provided to Landlord

(2) In the event Tenant employs a contractor or subcontractor, or in the event a
contractor employs a subcontractor, to perform all or part of Tenant Work,
including any Early Work, Tenant shall purchase, or cause its contractor to
carry, General Contractor’s and Subcontractor’s Required Minimum Coverages and
Limits of Liability as follows:

(i) Worker’s Compensation and Employer’s Liability Insurance, as required by
state law, and any insurance required by any Employee Benefit Act or similar
statute applicable where the work is to be performed, as will protect the
contractor and subcontractors from any and all liability under the
aforementioned act(s) or similar statute.

(ii) Commercial General Liability Insurance (including Contractor’s Protective
Liability Coverage) in an amount not less than $2,000,000 per occurrence for
bodily injury and property damage.

(iii) Commercial Automotive Liability Insurance, for the ownership, maintenance,
or operation of any automotive equipment, whether owned, non- owned or leased
including employer’s non-ownership and hired car liability endorsements, in an
amount not less than $2,000,000 combined single limit with respect to bodily
injury, including death resulting therefrom, and property damage liability.

(3) Such insurance policies set forth in (i) - (iii), above, shall insure
Tenant’s general contractor and all subcontractors against any and all claims
for bodily injury and property damage arising from its operations under its
contract in connection with construction of the Building, whether performed by
Tenant’s general contractor, subcontractors, or sub-subcontractors, or by anyone
directly or indirectly employed by any of them. Tenant shall (and cause its
contractor to) give Landlord at least 30 days’ advance written notice of any
change, cancellation, termination or lapse of such insurance.

(4) The insurance required under this Exhibit D shall be in addition to any and
all insurance required to be procured by Tenant pursuant to the terms of the
Lease.

 

D1-20

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EXHIBIT D-2

DESIGN AND CONSTRUCTION MILESTONES

[see attached]

 

D2-1

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EXHIBIT D-3

DELINEATION OF BASE BUILDING AND LANDLORD’S TI WORK

[see attached]

 

D3-1

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EXHIBIT E

LEASE COMMENCEMENT AGREEMENT

THIS DECLARATION is attached to and made a part of that certain Lease dated the
     day of                     , 2011 (the “Lease”) entered into by and between
RT/TC ATWATER LP, a Delaware limited partnership (“Landlord”) and ENDO
PHARMACEUTICALS INC., a Delaware corporation (“Tenant”).

Landlord and Tenant are parties to the Lease. All capitalized terms used herein
shall have the same meaning as was ascribed to such terms in the Lease, unless
otherwise indicated.

Landlord and Tenant do hereby declare that (a) the Lease Commencement Date is
hereby established to be                      and (b) the term of the Lease
shall expire on                      (i.e., 144 full calendar months after the
Lease Commencement Date) (the “Lease Expiration Date”).

Landlord and Tenant further agree that the rentable square footage of the
Building is                     .

Landlord and Tenant further agree that Landlord has performed all of its
obligations to improve the Leased Premises for occupancy by Tenant, including
without limitation the Substantial Completion of all of Landlord’s Work,
excepting those Punch List Items (as defined in Exhibit D-1 of the Lease)
identified by Tenant as of the date hereof and, if applicable, Tenant’s right to
add Punch List items for up to 30 days following Substantial Completion pursuant
to Paragraph II.B.(7)(c) of Exhibit D-1 of the Lease, and subject to the
Landlord’s obligation to repair or replace latent defects pursuant to Paragraph
II.B.(7)(d) of Exhibit D-1 of the Lease.

The Lease is in full force and effect as of the date hereof, Landlord has
fulfilled all of its obligations under the Lease required to be fulfilled by
Landlord on or prior to the Lease Commencement Date with the exception of Punch
List Items.

 

E-1

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IN WITNESS WHEREOF Landlord and Tenant have executed this Declaration as of the
     day of                     .

 

    LANDLORD: WITNESS:         RT/TC ATWATER LP,     a Delaware limited
partnership

 

        By:   TC Atwater Manager, LLC,       a Delaware limited liability
company       By:   TC NE Metro Development, Inc.,        

a Delaware corporation,

its sole member

        By:  

 

          Scott A. Dyche,           Executive Vice President

 

WITNESS:

 

     

TENANT: ENDO PHARMACEUTICALS INC.

By:  

 

Name:  

 

Title:  

 

 

 

E-2

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EXHIBIT F

BUSINESS DAYS

All calendar days, except Saturdays, Sundays, and the following enumerated
holidays, will be “Business Days” for purposes of this Lease. (Other holidays,
even if observed by Landlord, by Tenant or by any government as holidays for
other purposes, are Business Days for purposes of this Lease.)

The following holidays (using, in each case, the holiday as observed by the
United States Government regardless of any different day observed by any other
governmental entity) shall not be Business Days for the purposes of this Lease:

New Year’s Day

Martin Luther King’s Birthday

Memorial Day

Independence Day

Labor Day

Veterans Day

Thanksgiving Day

Day after Thanksgiving Day

Christmas Day

If any such day falls on a Saturday, the preceding Friday will also not be a
Business Day. If a holiday falls on Sunday, the Monday following will not be a
Business Day. If Christmas and New Year’s Day fall on Monday, only that Monday
will not be a Business Day. If Christmas and New Year’s Day fall on Tuesday, the
preceding Monday will also not be a Business Day. If Christmas and New Year’s
Day fall on Wednesday or Friday, the preceding day also will not be a Business
Day. If Christmas and New Year’s Day fall on Thursday, the following Friday also
will not be a Business Day.

 

F-1

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EXHIBIT G

INTENTIONALLY DELETED

 

G-1

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EXHIBIT H

SAMPLE ESTOPPEL CERTIFICATE

[Note: All blanks are to be filled in by Landlord and all attachments are to be
attached by Landlord – to the extent practicable – before submitting this to
Tenant.]

                                         (“Tenant”) hereby certifies as follows
as of the date hereof to                                         , as landlord
[,             , as prospective purchaser] [, and
                                        , as [current] [prospective] mortgagee]:

1. Tenant is the Tenant under that certain Lease Agreement dated
                    , between Tenant and             , as landlord [, as amended
in that certain                                          dated
                    , between                                          and
                                        ] (the “Lease”). Except as set forth in
the preceding sentence[s], the Lease has not been amended, supplemented or
otherwise modified. A true and complete copy of the Lease is attached hereto.
The Lease is in full force and effect.

2. Pursuant to the Lease, Tenant leases                      rentable square
feet in the Building.

3. The Lease Commencement Date was                     ,. Tenant [has][has not]
exercised its first renewal option under the Lease [by Renewal Notice dated
                    , [and the deadline to do so has expired]. Tenant [has][has
not] exercised its second renewal option under the Lease [by Renewal Notice
dated                     , [and the deadline to do so has expired]. The
expiration date of the Term is             . The first Lease Year is
                    ,                     . The Term is now in Lease Year     .

4. Tenant has no expansion rights, renewal or extension rights or rights of
first offer except as set forth in the Lease. Tenant has no rights or options to
purchase any Building or the Leased Premises, except as provided in the Lease.

5. Tenant has not posted any security deposit under the Lease.

6. Basic Annual Rent has been paid in full for every month through the payment
date of                     , [except as set forth on an attachment hereto]. No
Basic Annual Rent has been paid more than one month in advance.

7. Tenant’s Share of Operating Expenses and Taxes is     %.

8. Tenant’s Operating Expenses for the current Operating Year are
$        /year, on an estimated basis, and all payments due through
                    , have been paid in full [except as set forth on an
attachment hereto]. Tenant’s Taxes for the current Operating Year are
$        /year, on an estimated basis, and all payments due through
                    , have been paid in full [except as set forth on an
attachment hereto]. No Operating Expenses or Taxes have been paid more than one
month in advance. Tenant has no pending or ongoing audit of or dispute with
Landlord over any annual reconciliation Statement [except as set forth on an
attachment hereto].

 

H-1

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9. All Landlord Work has been Substantially Completed [except as set forth on an
attachment hereto] subject to latent defects. All Punch List work has been
completed [except as set forth on an attachment hereto]. There is no unpaid
Landlord’s Contribution owed to Tenant [except as set forth on an attachment
hereto].

10. Tenant has not Generated Hazardous Substances at, to or from the Leased
Premises in violation of law or in violation of the Lease [except as set forth
on an attachment hereto]. Tenant has not received any notice from any
governmental authority with respect to the Generation by Tenant of any Hazardous
Substances at any Building in violation of law or in violation of the Lease
[except as set forth on an attachment hereto].

11. Tenant has not received any notice which would or could result in there
being an Event of Default on Tenant’s part upon the expiration of any applicable
notice or cure period [except as set forth on an attachment hereto], nor is
there currently any Event of Default on Tenant’s part [except as set forth on an
attachment hereto]. To Tenant’s actual knowledge, no circumstance exists that,
with the passage of time or the giving of notice (or both), would constitute an
Event of Default by Tenant under the Lease [except as set forth on an attachment
hereto].

12. Tenant has not given Landlord any notice which would or could result in
there being an Event of Default on Landlord’s part upon the expiration of any
applicable notice or cure period [except as set forth on an attachment hereto],
nor is there currently any Event of Default on Landlord’s part [except as set
forth on an attachment hereto]. To Tenant’s actual knowledge, no circumstance
exists that, with the passage of time or the giving of notice (or both), would
constitute an Event of Default by Landlord under the Lease [except as set forth
on an attachment hereto]. Tenant is not currently exercising any right of offset
under Paragraph XI.E of the Lease [except as set forth on an attachment hereto].

13. Tenant has not assigned the Lease in whole or in part or sublet the Leased
Premises in whole or in part [except as set forth on an attachment hereto].

14. Tenant has not received any notice to pay Rent to anyone other than Landlord
or that any third party has any rights in or to the Lease or the Rent [except
[insert name of any mortgagee].]

15. Tenant’s addresses for notices [remain as set forth in Paragraph XVII of the
Lease] [have been changed from those set forth in Paragraph XVII of the Lease as
set forth on an attachment hereto].

16. The undersigned has full right and authority to make the foregoing
certifications and representations on behalf of Tenant, and this Estoppel
Certificate may be relied upon by the addressees hereof, their successors and
assigns.

17. All capitalized terms not otherwise defined herein shall have the meanings
assigned to them in the Lease.

 

H-2

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IN WITNESS WHEREOF, Tenant has duly executed this Estoppel Certificate on this
     day of                     ,

 

ENDO PHARMACEUTICALS INC. By:  

 

 

Name:

 

 

 

Title:

 

 

 

H-3

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EXHIBIT I

GUARANTY

In consideration of, and as an inducement to RT/TC ATWATER LP, a Delaware
limited partnership (“Landlord”), to enter that certain lease of even date
herewith (the “Lease”) with ENDO PHARMACEUTICALS INC., a Delaware corporation
(“Tenant”), for the premises and improvements located at 1400 Atwater Drive,
Malvern, Pennsylvania, and in further consideration of the premises and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the undersigned (“Guarantor”), hereby guarantees, absolutely and
unconditionally, to Landlord the full and prompt performance of all terms,
covenants, conditions and agreements to be performed and observed by Tenant
under the Lease and any and all amendments, modifications and other instruments
relating thereto, whether now or hereafter existing, and the full and prompt
payment of all damages, costs and expenses which shall at any time be
recoverable by Landlord from Tenant by virtue of the Lease and any amendments,
modifications and other instruments relating thereto (hereinafter called
“Liabilities of Tenant”); and Guarantor hereby covenants and agrees to and with
Landlord, its successors and assigns, that if Tenant, its successors and
assigns, shall default at any time in the payment of Rent (as defined in the
Lease), or any other sums or charges payable by Tenant under the Lease or in the
performance of any of the terms, covenants, provisions or conditions contained
in the Lease, Guarantor will forthwith pay to Landlord, its successors and
assigns, such Rent and other sums and charges and will forthwith faithfully
perform and fulfill all of such terms, covenants, conditions and provisions of
the Lease and will forthwith faithfully pay to Landlord all damages that may
arise in consequence of any such default by Tenant.

Guarantor agrees that, with or without notice or demand, Guarantor will
reimburse Landlord, to the extent that such reimbursement is not made by Tenant,
for all expenses (including reasonable attorneys’ fees and disbursements)
incurred by Landlord in connection with any default by Tenant under the Lease or
the default by Guarantor under this Guaranty.

All moneys available to Landlord for application in payment or reduction of the
Liabilities of Tenant may be applied by Landlord, in such manner and in such
amounts and at such time or times as it may see fit, to the payment or reduction
of such of the Liabilities of Tenant as Landlord may elect.

This Guaranty shall be a continuing guaranty, and the liability of the Guarantor
hereunder shall in no way be affected, modified or diminished by reason that any
security for the Liabilities of Tenant is exchanged, surrendered or released or
the Lease or any other obligation of Tenant is changed, altered, renewed,
extended, continued, surrendered, compromised, waived or released in whole or in
part, or that any default with respect thereto is waived, whether or not notice
thereof is given to Guarantor, and it is understood and agreed that Landlord may
fail to set off and may release, in whole or in part, any credit on its books in
favor of Tenant, and may extend further credit in any manner whatsoever to
Tenant, and generally deal with Tenant or any such security as Landlord may see
fit; and Guarantor shall remain bound under this Guaranty notwithstanding any
such exchange, surrender, release, change, alteration, renewal, extension,
continuance, compromise, waiver, inaction, extension of further credit or other
dealing.

 

I-1

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Notwithstanding any provision to the contrary contained herein, Guarantor hereby
unconditionally and irrevocably waives (a) any and all rights of subrogation
(whether arising under contract, 11 U.S.C. § 509 or otherwise) to the claims,
whether existing now or arising hereafter, Landlord may have against Tenant, and
(b) any and all rights of reimbursement, contribution or indemnity against
Tenant which may have heretofore arisen or may hereafter arise in connection
with any guaranty or pledge or grant of any lien or security interest made in
connection with the Lease. Guarantor hereby acknowledges that the waiver
contained in the preceding sentence (the “Subrogation Waiver”) is given as an
inducement to Landlord to enter into the Lease and, in consideration of
Landlord’s willingness to enter into the Lease, Guarantor agrees not to amend or
modify in any way the Subrogation Waiver without Landlord’s prior written
consent. If any amount shall be paid to Guarantor by Tenant on account of any
claim set forth above at any time during the continuance of an Event of Default
under the Lease, such amount shall be held in trust by Guarantor for Landlord’s
benefit, shall be segregated from the other funds of Guarantor and shall
forthwith be paid over to Landlord to be applied in whole or in part by Landlord
against the Liabilities of Tenant, whether matured or unmatured. Nothing herein
contained is intended or shall be construed to give to Guarantor any rights of
subrogation or right to participate in any way in Landlord’s right, title or
interest in the Lease, notwithstanding any payments made by Guarantor to or
toward any payments due from Guarantor under this Guaranty, all such rights of
subrogation and participation being hereby expressly waived and released.

Guarantor hereby expressly waives (a) notice of acceptance of this Guaranty;
(b) presentment and demand for payment of any of the Liabilities of Tenant;
(c) protest and notice of dishonor or default to Guarantor or to any other party
with respect to any of the Liabilities of Tenant; (d) all other notice to which
Guarantor might otherwise be entitled; and (e) any demand for payment under this
Guaranty; and Guarantor hereby expressly agrees that the validity of this
Guaranty and the obligations of Guarantor hereunder shall not be terminated,
affected or impaired by reason of the assertion or the failure to assert by
Landlord against Tenant, or Tenant’s successors and assigns, of any of the
rights or remedies reserved to Landlord pursuant to provisions of the Lease.

This is an absolute and unconditional guaranty of payment and performance and
not of collection and Guarantor further waives any right to require that any
action be brought against Tenant or any other person or entity or to require
that resort be had to any security or to any balance of any deposit account or
credit on the books of Landlord in favor of Tenant or any other person or
entity. Successive recoveries may be had hereunder. No invalidity, irregularity
or unenforceability of all or any part of the Lease shall affect, impair or be a
defense to this Guaranty and this Guaranty shall constitute a primary obligation
of the undersigned.

Each reference herein to Landlord shall be deemed to include its successors and
assigns, in whose favor the provisions of this Guaranty shall also inure. Each
reference herein to Guarantor shall be deemed to include the heirs,
distributees, executors, administrators, legal representatives, successors and
assigns of Guarantor, all of whom shall be bound by the provisions of this
Guaranty.

No delay on the part of Landlord in exercising any rights hereunder or failure
to exercise the same shall operate as a waiver of such rights; no notice to or
demand on Guarantor shall be

 

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deemed to be a waiver of the obligation of Guarantor or of the right of Landlord
to take further action without notice or demand as provided herein; nor in any
event shall any modification or waiver of the provisions of this Guaranty nor
any termination hereof be effective unless in writing signed by Landlord, nor
shall any waiver be applicable except in the specific instance for which given.

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if any payment of Guarantor on account of the Liabilities of Tenant must be
returned by Landlord upon the insolvency, bankruptcy or reorganization of
Tenant, Guarantor, or otherwise, as though such payment had not been made.

This Guaranty is, and shall be deemed to be, a contract entered into under and
pursuant to the laws of the state in which the Leased Premises is located and
shall be in all respects governed, construed, applied and enforced in accordance
with the laws of such state; and no defense given or allowed by the laws of any
other state or country shall be interposed in any action or proceeding hereon
unless such defense is also given or allowed by the laws of the state in which
the Leased Premises is located. In any action or proceeding arising out of this
Guaranty, Guarantor agrees to submit to personal jurisdiction in the state in
which the Leased Premises is located. In the event of any legal proceedings
arising out of this Guaranty, the prevailing party in such proceedings shall
have the right to recover its reasonable attorneys fees and costs of suit from
the other party. Venue for any action under this Guaranty shall be exclusively
in Chester County, Pennsylvania, unless expressly prohibited by the laws of the
state where the Leased Premises are located.

This Guaranty may be executed in one or more counterparts, each of which
counterparts shall be an original.

All of Landlord’s rights and remedies under the Lease or under this Guaranty are
intended to be distinct, separate and cumulative and no such right and remedy
therein or herein mentioned is intended to be in exclusion of or a waiver of any
of the others.

As a further inducement to Landlord to accept the Lease and in consideration
thereof Landlord and Guarantor covenant and agree that in any action or
proceeding brought on, under or by virtue of this Guaranty, Landlord and the
Guarantor shall and do hereby waive trial by jury.

This Guaranty shall not be affected by any assignment of the Lease by Tenant.

 

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the     
day of October, 2011.

 

GUARANTOR: ENDO PHARMACEUTICALS HOLDINGS INC., a Delaware corporation By:  

 

Name:  

 

Title:  

 

NASDAQ: ENDO Address:  

 

 

 

 

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EXHIBIT J

PARKING LOT PLANS

[see attached]

 

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