Exhibit 10.2

 

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$26,000,000

LOAN AND SECURITY AGREEMENT

between

ALEXION MANUFACTURING LLC,

a Delaware limited liability company

as Borrower

and

iSTAR FINANCIAL INC.,

as Lender

Dated as of July 11, 2006

 

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TABLE OF CONTENTS

 

          Page SECTION 1 DEFINITIONS    1         1.1      General Definitions
   1   1.2      Terms; Utilization of GAAP for Purposes of Financial Statements
Under Agreement    23   1.3      Other Definitional Provisions    24 SECTION 2
AMOUNTS AND TERMS OF THE LOAN    24   2.1      Loan Disbursement and Note    24
  2.2      Interest    25   2.3      Payments    26   2.4      Payments and
Prepayments on the Loan    27   2.5      Lender’s Records; Mutilated, Destroyed
or Lost Notes    28   2.6      Taxes    28   2.7      Application of Payments   
29   2.8      Commitment Fee    29   2.9      Security Agreement    29   2.10   
Certain Secured Party Remedies    30   2.11    Potential Loan Increase    31
SECTION 3 CONDITIONS TO LOAN    31   3.1      Conditions to Funding of the Loan
on the Closing Date    31   3.2      Advances Generally    35   3.3     
Advances from Development Fund    37   3.4      Conditions to Final Development
Advance    42   3.5      Performance of Construction    43   3.6     
Contingency; Cost Reallocation    45   3.7      Other Remedies of Lender    46
  3.8      Protection Against Liens    46   3.9      Nonliability of Lender   
46 SECTION 4 REPRESENTATIONS AND WARRANTIES    47   4.1      Organization,
Powers, Qualification and Organization Chart    47   4.2      Authorization of
Borrowing; No Conflicts; Governmental Consents; Binding Obligations and License
and Security Interests of Loan Documents    48   4.3      Financial Statements
   49   4.4      Indebtedness    49   4.5      No Material Adverse Change    49
  4.6      Title to Property; Liens; Zoning; Contracts; Condition of the
Mortgaged Property    49   4.7      Litigation    51   4.8      Payment of Taxes
   52   4.9      Governmental Regulation; Margin Loan    52   4.10    Employee
Benefit Plans; ERISA; Employees    53

 

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        4.11    Intellectual Property    53   4.12    Broker’s Fees    54   4.13
   Environmental Compliance    54   4.14    Solvency    55   4.15    Disclosure
   55   4.16    Insurance    55   4.17    Intentionally Omitted    55   4.18   
Accounts    55   4.19    Management Agreement    55   4.20    Special
Assessments; Taxes    55   4.21    Leases    56   4.22    Representations Remade
   56 SECTION 5 AFFIRMATIVE COVENANTS    56   5.1      Financial Statements and
Other Reports    56   5.2      Existence; Qualification    59   5.3      Payment
of Impositions and Lien Claims; Permitted Contests    59   5.4      Insurance   
61   5.5      Tax Reserve and Insurance Reserve    63   5.6      Maintenance of
Mortgaged Property    64   5.7      Inspection; Lender Meeting    64   5.8     
Environmental Compliance    65   5.9      Environmental Disclosure    66   5.10
   Compliance with Laws, Employee Benefit Plans and Contractual Obligations   
66   5.11    Further Assurances    66   5.12    Capital Expenditure Reserve   
67   5.13    Equity Account    68   5.14    Drug Approval    68   5.15   
Acceptable Letter of Credit    68   5.16    Validation    68   5.17   
[Intentionally Omitted.]    69   5.18    Management    69   5.19    Construction
Matters    69 SECTION 6 ACCOUNTS/CASH MANAGEMENT    70   6.1      Establishment
of Accounts    70   6.2      Deposits into Accounts    71   6.3      Payments
from Reserve Accounts    72   6.4      Accounts    72   6.5      Creation of
Security Interest in Accounts    73   6.6      Certain Matters Regarding Lender
following an Event of Default    73   6.7      Representations and Warranties
Regarding Reserve Account and Other Accounts Collateral    74   6.8     
Covenants Regarding Reserve Account and Other Accounts Collateral    75   6.9  
   Cash Management Fees    75

 

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SECTION 7 NEGATIVE COVENANTS    76         7.1      Indebtedness    76   7.2  
   Liens and Related Matters    76   7.3      Material Rights    76   7.4     
Restriction on Fundamental Changes    76   7.5      Restriction on Leases    76
  7.6      Transactions with Affiliates    77   7.7      Management Fees and
Compensation; Contracts    77   7.8      Conduct of Business    77   7.9     
Use of Lender’s Name    78   7.10    Compliance with ERISA    78   7.11    Due
on Sale or Encumbrance    78   7.12    Payments; Distributions    79   7.13   
Single Purpose Bankruptcy Remote Entities    80   7.14    Alterations    80
SECTION 8 CASUALTY AND CONDEMNATION    81   8.1      Restoration Following
Casualty or Condemnation    81 SECTION 9 DEFAULT, RIGHTS AND REMEDIES    84
  9.1      Event of Default    84   9.2      Acceleration and Remedies    88
  9.3      Remedies Cumulative; Waivers; Reasonable Charges    89 SECTION 10
SECONDARY MARKET TRANSACTION    89 10.1      Secondary Market Transaction    89
SECTION 11 MISCELLANEOUS    91 11.1      Expenses and Attorneys’ Fees    91
11.2      Certain Lender Matters    91 11.3      Indemnity    92 11.4     
Amendments and Waivers    93 11.5      Notices    95 11.6      Survival of
Warranties and Certain Agreements    95 11.7      Miscellaneous    95 11.8     
APPLICABLE LAW    96 11.9      Successors and Assigns    96 11.10    CONSENT TO
JURISDICTION AND SERVICE OF PROCESS    96 11.11    WAIVER OF JURY TRIAL    97
11.12    Publicity    97 11.13    Recourse Loan    98 11.14    Performance by
Lender/Attorney-in-Fact    98 11.15    Brokerage Claims    99 11.16    Agreement
   100

 

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EXHIBITS    Exhibit A    Legal Description Exhibit B    List of Equipment and
Personalty Exhibit C    List of General Intangibles Exhibit D    Permitted
Encumbrances Exhibit E    Closing Checklist Exhibit F    Letter of Credit Form
Exhibit G    Bailment Letter SCHEDULES    Schedule 1.1(A)    Development Budget
Schedule 1.1(B)    Development Draw Schedule Schedule 1.1(C)    Development
Schedule Schedule 1.1(D)    Environmental Reports Schedule 1.1(E)    Initial
Construction Budget Schedule 1.1(F)    Initial Construction Draw Schedule
Schedule 1.1(G)    Initial Construction Schedule Schedule 1.1(H)    Physical
Conditions Reports Schedule 1.1(I)    Project Plans and Specification List
Schedule 1.1(J)    Request for Advance Schedule 2.3    Amortization Schedule
Schedule 4.1(A)-1    Borrower U.S. Taxpayer Identification Number Schedule
4.1(A)-2    Organizational Chart Schedule 4.1(A)-3    Location of Principal
Place of Business and Chief Executive Office Schedule 4.6(A)    Claims Schedule
4.6(a)    Outstanding Claims Schedule 4.6(C)    Material Contracts Schedule
4.6(D)    Flood Plain Status Schedule 4.7    Litigation Schedule 4.8    Taxes
Schedule 4.10    Employee Benefit Plans, Collective Bargaining Agreements and
Employment Agreements Schedule 4.11    Proprietary Rights Schedule 4.16   
Insurance Schedule 4.18    Accounts Schedule 4.20    Assessments Schedule 6.4   
Permitted Investments Schedule 7.13    Special Purpose Entity Schedule 11.5   
Notice Addresses

 

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LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of July 11, 2006,
by Alexion Manufacturing LLC, a Delaware limited liability company (“Borrower”),
having an address at c/o Alexion Pharmaceuticals Inc., 352 Knotter Drive,
Cheshire, Connecticut 06410, and iSTAR FINANCIAL INC., a Maryland corporation
(together with its successors and assigns, hereinafter referred to as “Lender”),
with offices at 1114 Avenue of the Americas, 27th Floor, New York, New York
10036.

R E C I T A L S

A. The Mortgaged Property. Borrower is the fee owner of the Land and
Improvements (as such terms are defined herein).

B. The Loan. Borrower desires to borrow from Lender and Lender desires to lend
to Borrower, a loan in the amount of $26,000,000.

NOW, THEREFORE, in consideration of the foregoing and of the covenants,
conditions and agreements contained herein, Borrower and Lender agree as
follows:

SECTION 1

DEFINITIONS

 

1.1 General Definitions.

In addition to any other terms defined in this Agreement, the following terms
shall have the following meanings:

“Acceptable Financial Institution” means a depository institution or trust
company incorporated under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal or state banking
authorities, so long as (a) at all times the short-term commercial paper,
certificates of deposit or other debt obligations of such depository institution
or trust company are rated at least A-l by S&P and P-1 by Moody’s and the
long-term unsecured debt obligations of which are rated at least A by S&P and
the equivalent thereof by Moody’s or (b) such depository institution or trust
company has otherwise been approved by Lender, such approval not to be
unreasonably withheld.

“Acceptable Letter of Credit” shall mean an irrevocable standby letter of credit
that meets all of the following requirements: (a) it is a sight draft letter of
credit from a financial institution (the “Issuer”) acceptable to Lender, in its
sole and absolute discretion; provided, however, that JP Morgan Chase Bank, HSBC
Bank USA, N.A., and any financial institution having a Credit Rating of “A1” or
higher from Moody’s and “A+” or higher from S&P, or, as applicable, an
equivalent rating from an other Rating Agency is pre-approved; (b) it has an
expiration date of not less than one (1) year from the date such letter of
credit is delivered to Lender and thereafter renewed annually at least thirty
(30) calendar days prior to the expiration date (and may be drawn on by the
holder thereof if not so renewed) until the Drug Approval is received; (c) it is
freely assignable by Lender, provided that the transferor and transferee shall

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have complied with the Issuer’s customary transfer requirements and pay when due
the reasonable costs charged by such Issuer in connection with such assignment;
(d) it may be drawn upon by Lender to cure Events of Default by Borrower, but
only in accordance with its terms and the terms of this Agreement; and (e) it is
otherwise reasonably satisfactory to Landlord and is substantially similar to
the letter of credit form attached hereto as Exhibit F and incorporated herein
by this reference.

“Accounting Changes” means (a) changes in accounting principles required by GAAP
consistently applied and implemented by Borrower; and (b) changes in accounting
principles recommended or approved by Borrower’s certified public accountant,
with the approval of Lender, which approval shall not be unreasonably withheld;
provided that Lender’s approval shall not be required so long as (i) Borrower’s
financial statements are prepared on a consolidated basis with the financial
statements of Guarantor, (ii) Guarantor is a reporting company under the
Exchange Act, and (iii) Guarantor’s financial statements are audited by a
so-called “Big-4” accounting firm.

“Accounts” means Borrower’s present and future rights to payment of money,
accounts and accounts receivable including (a) rights to payment of money,
accounts and accounts receivable arising from or relating to the construction,
use, leasing, occupancy or operation of the Mortgaged Property, the rental of,
or payment for, space, goods sold or leased or services rendered, whether or not
yet earned by performance, and all other “accounts” (as defined in the UCC),
(b) rights to payment, accounts, and accounts receivable arising from any
consumer credit, charge, entertainment or travel card or service organization or
entity, (c) all reserves, deferred payments, refunds, cost savings payments and
deposits no matter how evidenced and whether now or later to be received from
third parties (including all earnest money sales deposits) or deposited with, or
by, Borrower by, or with, third parties (including all utility deposits),
(d) all chattel paper, instruments, documents, notes, drafts and letters of
credit (other than any letters of credit in favor of Lender), (e) the Reserve
Accounts, the Development Fund, the Equity Account and any and all other
accounts held by or on behalf of Lender and/or Borrower pursuant to this
Agreement, (f) all “deposit accounts” (as defined in the UCC), (g) all
“securities accounts” (as defined in the UCC), and (h) all contracts and
agreements which relate to any of the foregoing.

“Affiliate” means any Person: (A) directly or indirectly controlling, controlled
by, or under common control with, another Person; (B) directly or indirectly
owning or holding ten percent (10%) or more of any equity interest in another
Person; or (C) ten percent (10%) or more of whose voting stock or other equity
interest is directly or indirectly owned or held by such other Person. When used
with respect to Borrower, the term “Affiliate” shall also include the spouse,
ancestors, descendants and siblings of an Affiliate of Borrower (such Persons
being sometimes referred to as “Family Members”), Affiliates of such Family
Members and trusts for the benefit of another Affiliate of Borrower.

“Agreement” means this Loan and Security Agreement (including all schedules,
exhibits, annexes and appendices hereto), as amended, modified or supplemented
from time to time.

“Alteration” is defined in Section 7.14.

 

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“Architect’s Agreements” means all agreements between Owner and a Borrower’s
Architect, including Change Orders, for the performance of architectural
services for the Construction Work (other than and specifically excluding for
the Initial Construction Work or Project Improvements), and each such agreement
is herein called an “Architect’s Agreement”.

“Assignment(s)” means individually and collectively, the assignment of leases
and rents, assignments of contracts, agreements and equipment leases, the
assignments of licenses, permits and approvals, the assignments of management
agreement, if any, the assignment of trademarks, tradenames and copyrights, if
any, and such other assignments of even date herewith from Borrower to or for
the benefit of Lender, each granting a security interest in collateral for the
Loan.

“Assignments of Initial Architect’s Agreements” means all Architect’s Agreement
and Consent to Assignment of Construction Documents of even date herewith from
Borrower to Lender collaterally assigning each Initial Architect’s Agreement to
Lender, and each such assignment is herein called an “Assignment of Initial
Architect’s Agreement.”

“Assignments of Initial Construction Contracts” means all Contractor’s Agreement
and Consent to Assignment of Construction Documents of even date herewith from
Borrower to Lender collaterally assigning each Initial Construction Contract to
Lender, and each such assignment is herein called an “Assignment of Initial
Construction Contract.”

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended from time to time and all rules and regulations
promulgated thereunder.

“Bank(s)” means the Acceptable Financial Institution at which the Reserve
Accounts are maintained.

“Base Rate” means a fixed rate per annum equal to 9.17%.

“Borrower’s Initial Equity Contribution” is defined in Section 2.1.

“Business Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state is closed.

“Capital Expenditure Reserve” is defined in Section 5.12.

“Capital Expenditure Reserve Account” is defined in Section 6.1.

“Capital Improvements” is defined in Section 5.12.

“Capital Lease” means any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.

“Cash Management Agreement” shall mean the Cash Management Agreement dated as of
the date hereof, among Borrower, Lender and Bank.

 

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“Change in Control” means the occurrence of any one or more of the following:
(i) a sale of all or substantially all of the assets of Guarantor, in a single
transaction or series of transactions, (ii) a Person or Group shall have
acquired, in one or more transactions, ownership or control of forty-nine
percent (49%) or more of the voting Securities of Guarantor, (iii) Guarantor
shall cease to directly or indirectly Control the business and affairs of the
Borrower or (iv) Guarantor shall cease to directly or indirectly own fifty-one
percent (51%) or more of the voting Securities of Borrower.

“Change Order” means any amendment, waiver, or modification to the Project Plans
and Specifications, any Initial Construction Contract, or the Development Budget
which has been approved by Lender; provided, however, that no Lender approval is
required for any Change Order which is a Permitted Change Order.

“Claims” is defined in Section 5.3(A).

“Closing” means that all conditions for disbursement of the initial proceeds of
the Loan to or for the benefit of Borrower have been satisfied deferred pursuant
to the Post-Closing Endeavor Letter, or waived in writing by Lender and the
disbursement of the proceeds of the Loan shall have been made to, or upon the
order of, Borrower.

“Closing Checklist” means the closing checklist attached hereto as Exhibit E.

“Closing Date” means the date on which the Closing occurs.

“Code” means the United States Internal Revenue Code of 1986, and any rule or
regulation promulgated thereunder from time to time.

“Collateral” means the Mortgaged Property, the Reserve and Other Accounts
Collateral and all other real and personal property of Borrower or any other
Person pledged or mortgaged to Lender as collateral security for repayment of
the Loan, if any.

“Commitment Fee” means an amount of money equal to $390,000.

“Completion of Initial Construction Work” means the completion of the Initial
Construction Work, in accordance with the Project Plans and Specifications and
pursuant to the terms of this Agreement.

“Confidential Information” is defined in Section 11.12.

“Construction” means all labor, materials and equipment required for the
construction, equipping, fixturing and furnishing of the Restoration, the
Alterations, the Initial Construction Work and any other construction,
equipping, fixturing and furnishing, approved (or deemed approved) by Lender.

“Construction Contract” means one or more construction agreements, including
Change Orders, in form and substance acceptable to Lender between Borrower and a
Contractor covering any portion of the Construction (other than and specifically
excluding for the Initial Construction Work).

 

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“Construction Legal Compliance” means Borrower’s satisfaction of all of the
following: (A) (i) the applicable Construction through the applicable date of
determination, has been constructed substantially in accordance with the
applicable Plans and Specifications; and (ii) the applicable Construction has
been, or will be, constructed in substantial compliance with all Legal
Requirements; (B) all material entitlements, approvals, allocations,
certificates, authorizations, permits and licenses required through the
then-current stage of construction have been obtained from all appropriate
Governmental Authorities and have been validly and irrevocably obtained without
qualification, appeal or existence of unexpired appeal periods; (C) all
conditions to the issuance of, and the requirements under, all permits,
conditional use permits and licenses required through the current stage of
construction have been satisfied in all material respects; and (D) no appeals,
suits or other actions are pending or threatened in writing by any Governmental
Authority which, if determined adversely to the interests of Borrower or the
Mortgaged Property, would result in the revocation, suspension or qualification
of any of such permits or approvals.

“Contingent Obligation,” as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person: (A) with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (B) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (C) under
any interest rate swap agreement, interest rate cap agreement, interest rate
collar agreement or other similar agreement or arrangement designed to protect
the applicable Person against fluctuations in interest rates; or (D) under any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect that Person against fluctuations in currency
values. Contingent Obligations shall include (1) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (2) the obligation to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, and (3) any liability of such Person for
the obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.

“Contractor” means the contractor’s) or construction manager’s) for the
Construction (other than and specifically excluding the Initial Construction
Work) as Lender may, from time to time approve, which approval shall not be
unreasonably withheld, conditioned or delayed.

“Contracts” means all contracts, agreements, warranties and representations
relating to or governing the use, occupancy, design, construction, operation,
management, repair and service of any other component of the Mortgaged Property,
as amended, modified or supplemented from time to time.

 

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“Contractual Obligation,” as applied to any Person, means any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject including the Loan Documents.

“Control” (including with correlative meanings, the terms “controlling,”
“controlled by” and “under common control with”) means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

“Credit Rating” means the senior unsecured debt rating issued by S&P and Moody’s
or if either or both no longer exist or no longer issue ratings then, for either
or both as so applicable, another Rating Agency. All references to specific
levels of a Credit Rating mean such rating with a “stable” or “positive”
outlook, but not a “negative” outlook or “on watch” associated with such rating.

“Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default if that condition or event were not
cured or removed within any applicable grace or cure period.

“Default Interest” is defined in Section 2.2(A).

“Default Rate” means a rate per annum equal to the Base Rate plus five percent
(5%).

“Development Advance” is defined in Section 2.1.

“Development Budget” means the detailed budget, including all Hard Costs and
Soft Costs, attached hereto as Schedule 1.1 (A), setting forth Borrower’s
current estimate of all costs to be incurred in connection with the Completion
of Initial Construction Work, which budget has been approved by Lender. The
Development Budget covers the acquisition, development, design, construction and
furnishing of the Initial Construction Work in accordance with the Project Plans
and Specifications, and shall include cash flow projections for the duration of
the Initial Construction Work through Completion of Initial Construction Work.
Except in connection with Permitted Change Orders, all amendments to the
Development Budget shall be subject to Lender’s prior written approval. The
Development Budget shall include any and all approved amendments and Change
Orders (including Permitted Change Orders). The Development Budget includes a
line item for each Initial Construction Contract. The Development Budget
includes all costs of materials, fixtures, furnishings, personal property and
labor to be incurred in the construction and furnishing of the Initial
Construction Work. The Development Budget (and any amendment thereto) shall,
among other things, consist of the following for each Initial Construction
Contact: (a) a description of work (such work being classified and shown on a
line item basis) reasonably satisfactory to Lender for the building and other
improvements for such Initial Construction Contract; and (b) an allocation to
each construction line item of a scheduled portion of the guaranteed maximum
price (or such other basis of agreement as Borrower and Lender may agree upon)
in such Initial Construction Contract.

 

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“Development Draw Schedule” means a detailed schedule of advances, including all
line items in the Development Budget, and consistent with the Initial
Construction Draw Schedule, setting forth Borrower’s estimate of such
chronological advances, which schedule is attached hereto as Schedule 1.1(B).

“Development Fund” is defined in Section 2.1.

“Development Schedule” means the schedule for the completion of each item set
forth in the Development Budget, set forth on Schedule 1.1(C).

“Distribution” is defined in Section 7.12.

“Dollars” and the sign “$” mean the lawful money of the United States of
America.

“Drug Approval” is defined in Section 5.14.

“EBITDA Interest Coverage” means, at any reporting date, for a Person, the ratio
calculated by dividing (A) the earnings from continuing operations (including
interest income and equity earnings, but excluding nonrecurring items) before
interest, taxes, depreciation and amortization for such Person by (B) gross
interest incurred by such Person before subtracting (i) capitalized interest and
(ii) interest income.

“Eligible Account” means a segregated account maintained at an Acceptable
Financial Institution. An Eligible Account will not be evidenced by a
certificate of deposit, passbook or other instrument.

“Employee Benefit Plan” means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Part 3 of
Title I of ERISA or Section 412 of the Code and is either (a) maintained by any
Person or any ERISA Affiliate for employees of such Person or any ERISA
Affiliate or (b) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which such Person or any ERISA Affiliate is then making or has any obligation to
make contributions or, within the preceding five (5) plan years, has made or has
had any obligation to make contributions.

“Environmental Claims” is defined in Section 4.13.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement,
dated of even date herewith, executed by Borrower and Guarantor in favor of
Lender, together with all amendments, modifications, renewals, substitutions and
extensions thereto.

“Environmental Laws” means all present and future federal, state and/or local
laws, statutes, ordinances, codes, rules, regulations, orders, decrees,
licenses, decisions, orders, injunctions, requirements and/or directives of
Governmental Authorities, as well as common law, imposing liability, standards
of conduct or otherwise pertains or relates to, or for, for the environment,
industrial hygiene, the regulation of Hazardous Substances, natural resources,
pollution or waste management.

 

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“Environmental Reports” means those reports and audits itemized on Schedule
1.1(D) hereto.

“Equipment, Fixtures and Personalty” means all fixtures and all of the equipment
and personalty listed on Exhibit B hereto, together with all accessions,
replacements and substitutions thereto and the proceeds thereof.

“Equity Account” is defined in Section 5.13.

“ERISA” means the Employee Retirement Income Security Act of 1974, and all rules
and regulations promulgated thereunder.

“ERISA Affiliate” means any Person who is a member of a group which is under
common control with another Person, who together with such other Person is
treated as a single employer within the meaning of Sections 414(b), (c), (m) and
(o) of the IRC or Sections 4001 of ERISA. Guarantor shall be deemed to be an
ERISA Affiliate of Borrower for purposes of this Agreement, irrespective of
whether it and Borrower would be treated as a single employer.

“Event of Default” is defined in Section 9.1.

“Excess Interest” is defined in Section 2.2(C).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Expenses” means the costs and expenditures accrued or incurred by Borrower,
without duplication, in connection with the ownership, operation and management
of the Mortgaged Property, specifically including in Expenses (1) periodic
deposits required to be made into the Reserves; (2) capital expenditures
incurred to the extent not paid from any Reserves or the proceeds of the Loan;
and (3) management fees and specifically excluding from Expenses, however,
(i) all expenditures to the extent funded from any Reserves, (ii) principal,
interest and all other payments made by Borrower to Lender under the Loan
Documents, (iii) federal or state income taxes, and (iv) depreciation and other
non-cash expenses of the Mortgaged Property.

“Financing Statements” means the UCC-1 Financing Statements naming Borrower, as
debtor, and Lender, as secured party, and filed with such filing offices as
Lender may require.

“FIRREA” means The Financial Institutions Reform, Recovery and Enforcement Act
of 1989, Pub. L. No. 101-73 Stat. 183 (1989) and the regulations adopted
pursuant thereto, as the same may be amended from time to time.

“Force Majeure” means a fire or other casualty, adverse weather, labor disputes
or other causes beyond Borrower’s reasonable control, provided, however, that in
no event shall a Force Majeure include any event arising due to the lack or
unavailability of funds, financing or capital sources; provided, however, that
when a Construction Contract or an Initial Construction Contract is entered into
by Borrower and a Contractor or Initial Contractor, as applicable, the
definition of Force Majeure as used in this Agreement and applicable to the work
included in such contract shall be deemed to be the broader of the definition of
Force Majeure (provided, however, such broader definition shall not include any
event arising due to the lack or

 

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unavailability of funds) set forth above or the definition for such term or
similar term set forth in such contract.

“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied, as of the date in question.

“General Intangibles” means all of the items listed on Exhibit C hereto. In
addition, the General Intangibles also include all of Borrower’s right, title
and interest in and to all Contracts.

“Governmental Authority” means the United States of America, any state, any
foreign governments and any political subdivision or regional division of the
foregoing, and any agency, department, court, regulatory body, commission,
board, bureau or instrumentality of any of them.

“Gross Revenues” means, for the applicable period, all Rents and all other
income, rents, revenues, issues, profits, deposits, proceeds of rent loss
insurance, lease termination or similar payments and all other payments actually
received by or for the benefit of Borrower in cash or current funds or other
consideration from any source whatsoever from or with respect to the Mortgaged
Property; provided, however, that Gross Revenues shall exclude Proceeds (other
than insurance proceeds in respect of rent loss insurance), litigation proceeds,
sale or refinancing proceeds and any other non-recurring income from
extraordinary events.

“Group” means any Person or Persons acting together which would constitute a
“group” for purposes of Section 13(d) of the Exchange Act, as in effect on the
date hereof, together with all affiliates and associates (as defined in Rule
12b-2 under the Exchange Act, as in effect on the date hereof) thereof.

“Guarantor” means Alexion Pharmaceuticals, Inc., a Delaware corporation, and its
successors.

“Guarantor Lease” means that Lease Agreement dated as of even date herewith, by
and between Borrower and Guarantor for the Lease by Guarantor of the
Improvements.

“Guaranty” means that certain Completion, Payment and Performance Guaranty
executed by Guarantor in favor of Lender of even date herewith.

“Hard Cost Contingency” means Borrower’s contingency line item for Hard Costs as
shown in the Development Budget.

“Hard Costs” means the total of all fees, expenses and costs for the completion
of the Initial Construction Work, as shown in the Development Budget and Initial
Construction Budgets.

“Hazardous Materials” means (a) any pollutants, toxic pollutants, oil, gasoline,
petroleum products, asbestos, materials or substances containing asbestos,
explosives, chemical liquids or solids, radioactive materials, polychlorinated
biphenyls or related or similar materials, or any other solid, liquid or other
emission, substance, material, product or by-product, in each case defined,
listed or regulated as a hazardous, noxious, toxic or solid substance, material
or

 

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waste or defined, listed or regulated as causing cancer or reproductive
toxicity, or otherwise defined, listed or regulated as hazardous or toxic in,
pursuant to, or by any federal, state or local law, ordinance, rule, or
regulation, now or hereafter enacted, amended or modified, in each case to the
extent applicable to the Mortgaged Property including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601,
et seq.); the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et
seq.); the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et
seq.); any so-called “Superfund” or “Superlien” law; the Toxic Substance Control
Act of 1976 (15 U.S.C. Section 2601 et seq.); the Clean Water Act (33 U.S.C.
Section 1251 et seq.); and the Clean Air Act (42 U.S.C. Section 7901 et seq.);
(b) any substance which is or contains asbestos, radon, polychlorinated
biphenyl, urea formaldehyde foam insulation, explosive or radioactive material,
lead paint, motor fuel or other petroleum hydrocarbons, and/or (c) fungus, mold,
mildew, or other biological agents the presence of which may adversely affect
the health of individuals or other animals or materially adversely affect the
value or utility of the Mortgaged Property.

“Impositions” means all real estate and personal property taxes, and vault
charges and all other taxes, levies, assessments and other similar charges,
general and special, ordinary and extraordinary, foreseen and unforeseen, of
every kind and nature whatsoever, which at any time prior to, at or after the
execution hereof may be assessed, levied or imposed by, in each case, a
Governmental Authority upon the Mortgaged Property or upon the ownership, use,
occupancy or enjoyment thereof, and any interest, cost or penalties imposed by
such entity with respect to any of the foregoing. Impositions shall not include
any sales or use taxes or any income taxes payable by Borrower.

“Improvements” means all buildings, improvements, alterations or appurtenances
now, or at any time hereafter, located upon, in, under or above the Land or any
part thereof. The term “Improvements” also includes all buildings, improvements,
alterations or appurtenances not located on, in, under or above the land to the
extent of Borrower’s right, title and interest therein.

“Indebtedness” means with respect to any Person, without duplication, (a) any
indebtedness of such Person for borrowed money (whether by loan, the issuance
and sale of debt securities or the sale of any property or asset of such Person
to another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such property from such Person), (b) any obligations of
such Person for the deferred purchase price of property or services, (c) any
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) any obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) any obligations of such Person as lessee under
leases that have been or should be, in accordance with GAAP, recorded as capital
leases, (f) any obligations of such Person as a result of any final judgment
rendered against such Person or any settlement agreement entered into by such
Person with respect to any litigation unless such obligations are stayed upon
appeal (for so long as such appeal shall be maintained) or are fully discharged
or bonded within thirty (30) days after the entry of such judgment or execution
of such settlement agreement, (g) any obligations, contingent or otherwise, of
such Person in respect of acceptances, letters of credit or similar extensions
of credit, (h) any Contingent Obligations, (i) any Indebtedness of others
referred to in clauses (a) through (h)

 

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above or clause (j) below guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (1) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (2) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (3) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (4) otherwise to assure a creditor
against loss, and (j) any Indebtedness referred to in clauses (a) through
(i) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.

“Indemnified Liabilities” is defined in Section 11.3.

“Indemnitees” is defined in Section 11.3.

“Independent Architect” is defined in Section 7.14.

“Initial Architect’s Agreements” means all agreements between Borrower and an
Initial Borrower’s Architect for the performance of all or any portion of design
services, including architectural and engineering services, for the Initial
Construction Work or the Project Improvements, together with any Change Orders
thereto, and each such agreement is herein called an “Initial Architect’s
Agreement”.

“Initial Assignment of Contracts” means the Assignment of Contracts, Agreements
and Equipment Leases of even date herewith from Borrower to Lender.

“Initial Assignment of Permits” means the Assignment of Licenses, Permits and
Approvals of even date herewith from Borrower to Lender.

“Initial Borrower’s Architect” means an architect or engineer, as applicable,
which has entered into a written agreement to perform all or any portion of the
design services, including architectural or engineering services, for the
Initial Construction Work or the Project Improvements, which architect or
engineer, as applicable, and applicable Initial Architect’s Agreement has been
approved by Lender as set forth in Section 3.1.

“Initial Construction Budget” means, for each Initial Construction Contract, the
detailed line item budget in a form and in such detail as Lender approves
attached hereto as Schedule 1.1(E) setting forth the schedule of values for such
Initial Construction Contract all costs to be incurred in connection with the
Completion of Initial Construction Work included in such contract, which budget
has been approved by Lender.

“Initial Construction Contracts” means all agreements between Borrower and an
Initial Contractor for the completion of the Initial Construction Work, together
with any Change Orders thereto, and each such agreement is herein called an
“Initial Construction Contract”.

 

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“Initial Construction Draw Schedule” means, for each Initial Construction
Contract, a detailed schedule of Borrower’s estimate of chronological
Development Advances, which schedule(s) is (are) attached hereto as Schedule
1.1(F).

“Initial Construction Period” means the period of time for performance of the
Initial Construction Work as shown on the Initial Construction Schedule.

“Initial Construction Schedule” means the schedule for the completion of the
Initial Construction Work, including dates for partial completion, set forth on
Schedule 1.1(G).

“Initial Construction Work” means all labor, materials and equipment required
for the construction, equipping, fixturing and furnishing of the Mortgaged
Property, all as set forth in more detail in the Project Plans and
Specifications.

“Initial Contractor” means the contractor(s) or construction manager(s) which
has entered into a written agreement with Borrower to perform all or any portion
of the Initial Construction Work, which contractor(s) or construction manager(s)
and applicable Initial Construction Contract has been approved by Lender as set
forth in Section 3.1.

“Inspection Certificate” means a certificate from an architect or other design
professional approved by Lender in form and substance reasonably acceptable to
Lender.

“Insurance Reserve” is the reserve for insurance premiums established pursuant
to Section 5.5.

“Insurance Reserve Account” is defined in Section 6.1.

“Interest Period” means the period of time beginning on the 10th day of a Loan
Month and ending on the 9th day of the following Loan Month, provided, however,
the first Interest Period shall commence on the date the Loan commences to bear
interest and continues to and includes August 9, 2006.

“Interest Rate” means the applicable of the Base Rate or the Default Rate.

“Inventory” means “inventory” (as defined in the UCC), including any and all
goods, merchandise and other personal property, whether tangible or intangible,
now owned or hereafter acquired by Borrower which is held for sale, lease or
license to customers, furnished to customers under any contract or service or
held as raw materials, work in process, or supplies or materials used or
consumed in Borrower’s business, if any.

“Investment” means (A) any direct or indirect purchase or other acquisition by
Borrower of any beneficial interest in, including stock, partnership interest or
other Securities of, any other Person or (B) any direct or indirect loan,
advance or capital contribution by Borrower to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business.

 

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“Land” means the real estate comprising the Mortgaged Property, as more
specifically described in the Mortgage, including all of Borrower’s right, title
and interest in and to all oil, gas and mineral rights, oil, gas and minerals
(whether before or after extraction), easements, appurtenances, water rights,
water stock, rights in and to streets, roads and highways (whether before or
after vacation thereof), hereditaments and privilege relating, in any manner
whatsoever, to the Land. The Land is legally described on Exhibit A.

“Late Charge” is defined in Section 2.2(D).

“Leases” means any and all leases, subleases, occupancy agreements or grants of
other possessory interests, whereby Borrower acts as the lessor, sublessor,
licensor, grantor or in another similar capacity, now or hereafter in force,
oral or written, covering or affecting the Land or Improvements, or any part
thereof, together with all rights, powers, privileges, options and other
benefits of Borrower thereunder and any and all guaranties of the obligations of
the lessees, sublessees, occupants, and grantees thereunder, as such leases,
subleases, occupancy agreements or grants may be extended, renewed, modified or
replaced from time to time (exclusive of any ground lease having Borrower as
ground lessee).

“Legal Requirements” means all applicable laws, statutes, ordinances, rulings,
regulations, codes, decrees, orders, judgments, covenants, conditions,
restrictions, approvals, permits and requirements under any Permitted
Encumbrances or of, from or by any Governmental Authority, including zoning,
subdivision, land use, environmental, building, safety, health, wetlands and
landmark preservation, housing and fire laws and the Americans with Disabilities
Act.

“Lender’s Construction Consultant” means such consultant as may be named by
Lender in such capacity from time to time, and any of Lender’s internal
representatives responsible for the review of the Initial Construction Work, and
compliance with the covenants set forth in this Agreement.

“Lender’s Consultant’s Report” means a report addressed to Lender regarding the
Project Plans and Specifications, Development Budget, and Initial Construction
Budget, and such other matters pertaining to the Initial Construction Work as
Lender may require.

“Lender’s Estimate of Development Costs” is defined in Section 3.2(D).

“Lender’s Representative” means an independent consulting architect, inspector
and/or engineer designated by Lender in Lender’s sole discretion.

“Licenses and Permits” means all building permits, certificates of occupancy and
other assignable governmental permits, licenses and authorizations, including
all state, county and local occupancy certificates, and other licenses, in any
way applicable to the Mortgaged Property or any part thereof or to the
development, construction, ownership, use, occupancy, operation, maintenance,
marketing and sale of the Mortgaged Property.

“Lien” means (a) any lien, mortgage, pledge, security interest, charge or
monetary encumbrance of any kind, whether voluntary or involuntary (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any

 

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security interest) and (b) any negative pledge or analogous agreement including
any agreement not to directly or indirectly convey, assign, sell, mortgage,
pledge, hypothecate, grant a security interest in, grant options with respect
to, transfer or otherwise dispose of, voluntarily or involuntarily, by operation
of law or otherwise, any direct or indirect interest in an asset or direct or
indirect interest in the ownership of an asset.

“Loan” means the loan in the aggregate amount of $26,000,000 from Lender to
Borrower as evidenced by the Note.

“Loan Documents” means this Agreement, the Note, the Mortgage, the Assignments,
the Environmental Indemnity Agreement, the Cash Management Agreement, the
Financing Statements, the Guaranty, the Assignment of Initial Architect’s
Agreements, the Assignment of Initial Construction Contracts, the Initial
Assignment of Contracts, the Initial Assignment of Permits and all other
documents, instruments, certificates and other deliveries made by Borrower or
Guarantor to Lender in accordance herewith or which otherwise evidence, secure
and/or govern the Loan.

“Loan Month” means a calendar month.

“Loan Quarter” means a calendar quarter.

“Lockout Expiration Date” means the third anniversary of the Closing.

“Management Agreement” means the property management agreement for the Mortgaged
Property between Borrower and Manager, if any.

“Manager” means the Person which is the manager of the Mortgaged Property from
time to time, which Person must be a Qualified Manager.

“Material Adverse Effect” means (A) a material adverse effect upon the business,
operations, properties, assets or condition (financial or otherwise) of
Borrower, Guarantor or the Mortgaged Property taken as a whole, (B) the
impairment, in any material respect, of the ability of Borrower or Guarantor to
perform its respective obligations under any of the Loan Documents or of Lender
to enforce any of the Obligations or (C) any material adverse effect on the
ability of Borrower to construct and cause the Completion of Initial
Construction Work on or before the Required Completion Date, (D) the cessation
of the Initial Construction Work for any or no reason for more than ten
(10) consecutive Business Days or more than forty-five (45) calendar days in the
aggregate (provided, however, such ten (10) Business Day and forty-five
(45) calendar day period shall be subject to further extension by reason of
Force Majeure) and/or (E) any act, condition, event, circumstance or event which
causes or is reasonably likely to cause the cessation of the Initial
Construction Work for more than ten (10) consecutive Business Days or more than
forty-five (45) calendar days in the aggregate (provided, however, such ten
(10) Business Day and forty-five (45) calendar day period shall be subject to
further extension by reason of Force Majeure). In determining whether any
individual event would result in a Material Adverse Effect, notwithstanding that
such event does not of itself have such effect, a Material Adverse Effect shall
be deemed to have occurred if the cumulative effect of such event and all other
then existing events would result in a Material Adverse Effect.

 

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“Material Contracts” means (a) the Permitted Encumbrances (not otherwise
referred to in this definition of Material Contracts), and (b) those
(i) Contracts set forth on Schedule 4.6(C) attached hereto and (ii) other
Contracts which, if not complied with by Borrower, could reasonably be expected
to have a Material Adverse Effect.

“Maturity Date” means the Maturity Date, as defined in Section 2.4(B), or such
earlier date as the Loan is prepaid in full or accelerated.

“Maximum Rate” is defined in Section 2.2(C).

“Moody’s” means Moody’s Investors Services, Inc. and its successors and assigns.

“Mortgage” means the Construction Mortgage Deed, Assignment of Leases and Rents,
Security Agreement and Fixture Filing of even date herewith from Borrower to or
for the benefit of Lender, constituting a first Lien on the Mortgaged Property
as collateral for the Loan.

“Mortgaged Property” means the Land, the Improvements and the Equipment,
Fixtures and Personalty, and all of Borrower’s now and/or hereafter existing
right, title and interest in and to the Inventory, the Accounts, the General
Intangibles, the Leases, the Rents and other Gross Revenues, the Proceeds, the
Plans and Specifications and all other property of every kind and description
used or useful in connection with the ownership, occupancy, operation and
maintenance of the other components of the Mortgaged Property and all
substitutions therefor, replacements and accessions thereto, and proceeds
including “proceeds” (as defined in the UCC) derived therefrom, all as more
specifically described in the Mortgage.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is making,
or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) years, or for
which Borrower or any ERISA Affiliate has any liability, including contingent
liability.

“Net Worth” means, at any reporting date, for a Person, which shall include such
Person’s subsidiaries, if any, on either a combined or consolidated basis
pursuant to and determined in accordance with GAAP (such combined or
consolidated entities are collectively herein called the “Subject Person”) the
total assets of the Subject Person less (i) intangible assets of such Subject
Person (including, goodwill, anticipated future benefits of tax loss carry
forwards, and organization or developmental expenses and specifically excluding
from the definition of intangible assets solely for purposes of this definition,
patents, trademarks, service marks, trade names and copyrights) otherwise
determined in accordance with GAAP, and less (ii) the total liabilities of such
Subject Person, all on either a combined or consolidated basis, as applicable,
determined in accordance with GAAP, in each case without duplication.

“Note” means the Promissory Note, together with the Substitute Notes and all
future advances, extensions, renewals, substitutions, modifications and
amendments of the Promissory Note and Substitute Notes.

“Obligations” means, in the aggregate, all obligations, liabilities and
indebtedness of every nature of Borrower from time to time owed to Lender under
the Loan Documents,

 

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including the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable to Lender under the Loan Documents
whether before or after the filing of a proceeding under the Bankruptcy Code by
or against Borrower. The term “Obligations” shall also include any judgment
against Borrower or the Mortgaged Property with respect to such obligations,
liabilities and indebtedness of Borrower.

“OFAC” is defined in Section 4.9.

“Officer’s Certificate” means the certificate of a president, vice president, or
other officer or representative with knowledge of the matters addressed in such
certificate.

“Organizational Documents” means, as applicable, for any Person, such Person’s
articles or certificate of incorporation, by-laws, partnership agreement, trust
agreement, certificate of limited partnership, articles of organization,
certificate of formation, shareholder agreement, voting trust agreement,
operating agreement, limited liability company agreement and/or analogous
documents, as amended, modified or supplemented from time to time.

“Payment Date” means the 10th day of each calendar month commencing on
September 10,2006.

“Permitted Change Order” means a Change Order entered into at a time when no
Event of Default exists which satisfies all of the following conditions:
(i) such Change Order does not change the cost of the Initial Construction Work
by more than $100,000 with respect to any individual line item for each
individual Change Order or $250,000 in the aggregate of such line items for each
individual Change Order, (ii) such Change Order does not increase the time
scheduled for completion of the Initial Construction Work or materially modify
the scope, quality, functionality, or marketability of the Mortgaged Property
after completion of the Initial Construction Work, (iii) if such Change Order
increases the cost of the Initial Construction Work and the increased cost
exceeds the amount remaining in the Hard Cost Contingency of the Development
Budget, Borrower deposits the amount of such increase with Lender prior to
execution of the Change Order in question, (iv) such Change Order does not
materially adversely affect the structural components of the Mortgaged Property,
(v) the total of all Change Orders taken in the aggregate do not exceed fifty
percent (50%) of the Hard Cost Contingency, (vi) no portion of the Change Order
deletes or reduces the Initial Construction Work in any way (it is not a
deductive Change Order in whole or in part) and (v) Borrower provides a copy of
such Change Order to Lender promptly after execution of such Change Order.

“Permitted Contest” is defined in Section 5.3(B).

“Permitted Encumbrances” means the matters identified on Exhibit D.

“Permitted Indebtedness” means (a) ordinary and customary trade payables
incurred in the ordinary course of business of ownership and operation of the
Mortgaged Property which are payable not later than thirty (30) days after
receipt of the original invoice which are in fact not more than sixty (60) days
overdue, and do not at any one time exceed $500,000 in the aggregate

 

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(not including any payables for Impositions or insurance premiums for which
amounts have been deposited by Borrower in the Reserve Accounts) and (b) the
Loan.

“Permitted Investments” means any of the investments identified on Schedule 6.4,
and any other investments that are approved by Lender in its sole discretion,
provided that at all times Lender has a perfected first priority security
interest in such investment, and Borrower has provided evidence of such, in form
and substance satisfactory to Lender, and provided further that the Lender has
approved the maturity of such investments.

“Person” means and includes natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, joint stock companies,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof and their
respective permitted successors and assigns (or in the case of a governmental
person, the successor functional equivalent of such Person).

“Physical Condition Report” means the report(s) regarding the physical
inspection of the Land and Improvements listed on Schedule 1.1(H).

“Plans and Specifications” means the final drawings and specifications for the
development and construction of each component part of the applicable
Construction (as the same may be amended in accordance with the provisions
permitted by this Agreement), (other than and specifically excluding the Initial
Construction Work) as applicable, which plans and specifications and all
amendments thereto shall be (i) subject to Lender’s approval, which approval
shall not be unreasonably withheld or delayed, and (ii) in accordance with all
applicable Legal Requirements.

“Post-Closing Endeavor Letter” means a certain letter agreement of even date
herewith between Borrower and Lender regarding satisfaction of certain
conditions to the Closing.

“Prepayment Premium” means the greater of (i) one percent (1%) of the
outstanding principal balance of the Loan and (ii) the Yield Maintenance Amount.
However, if an Event of Default occurs on or before the Lockout Expiration Date
and the Loan is accelerated to a date on or before the Lockout Expiration Date,
the Prepayment Premium shall be equal to the sum of (a) the Yield Maintenance
Amount and (b) five percent (5%) of the principal balance of the Loan.

“Proceeds” is defined in Section 8.1.

“Project Completion Date” means the earlier to occur of (i) August 31, 2007, or
(ii) the Validation occurs; provided, however, that if such Validation is
delayed due to Force Majeure, the Project Completion Date shall be extended by
such time as determined by Lender based upon the delay caused by the Force
Majeure, in no event to exceed 90 additional days.

“Project Improvements” means the site work and other improvements to be
constructed upon the Land in accordance with the Project Plans and
Specifications, including, the existing shell building located on the Land.

 

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“Project Plans and Specifications” means the construction drawings, plans and
specifications for the development and construction delivered by Borrower to,
and approved by, Lender of each component of the Initial Construction Work (as
the same may be amended in accordance with the provisions of this Agreement).
The Project Plans and Specifications are identified on attached Schedule 1.1(I).

“Promissory Note” means the Promissory Note dated of even date herewith made by
Borrower to the order of Lender in the original principal amount of $26,000,000.

“Proprietary Rights” is defined in Section 4.11.

“Punch-List Items” means details of construction, decoration and mechanical and
electrical adjustment which in the aggregate are minor in character and do not
materially interfere with the intended use and operation of the applicable
Construction and which can be completed within 30 days; provided, however, that
in the event the applicable Construction is not completed within such thirty
(30) days and Borrower is diligently pursuing the completion of such items, such
original thirty (30) day period shall be extended for an additional thirty
(30) days (for an aggregate of sixty (60) days in total); provided further that
if Borrower has been diligently pursuing the completion of such item and
thereafter continues to diligently pursue the completion of such items, such
period shall be extended for an additional fifteen (15) days (for an aggregate
of seventy-five (75) days in total).

“Qualified Manager” shall mean any property manager reasonably acceptable to
Lender that, as of the date of such designation, is a nationally recognized
management firm engaged in the business, operation and management of
biopharmaceutical manufacturing facilities, office buildings and laboratories,
or facilities for other similar uses containing in the aggregate at least
500,000 square feet of gross leaseable office space which are located in the
United States and which is approved by Lender and with respect to which a Rating
Agency Confirmation is provided.

“Rating Agency Confirmation” shall mean, collectively, an affirmation from each
of the Rating Agencies that the credit rating by such Rating Agency of the
securities issued in connection with a securitization of the Loan or otherwise
secured by a pledge of the Note immediately prior to the occurrence of the event
with respect to which such Rating Agency Confirmation is sought will not be
qualified, downgraded or withdrawn as a result of the occurrence of such event,
which affirmation may be granted or withheld in such Rating Agency’s sole and
absolute discretion provided, however if the Loan has not been securitized in
connection with a Securitization in which some or all of the securities have
been rated by one or more of the Rating Agencies, Rating Agency Confirmation
means Lender’s approval, which approval is not to be unreasonably withheld or
delayed.

“Rating Agencies” shall mean S&P and Moody’s or, if any of such firms shall for
any reason no longer perform the functions of a securities rating agency, any
other nationally recognized statistical rating agency reasonably designated by
Lender; provided, however, that at any time during which the Loan is an asset of
a securitization, “Rating Agencies” shall mean the rating agencies that from
time to time rate the securities issued in connection with such

 

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securitization. If the Loan is not an asset in a securitization, Rating Agency
shall mean those rating agencies designated by Lender from time to time.

“Rents” shall mean all of Borrower’s right, title and interest in and to rents,
income, receipts, royalties, profits, issues, service reimbursements, fees,
termination payments receivables, accounts receivable and payments from or
related to the Land and/or Improvements from time to time accruing from the
operation of the Land and/or Improvements.

“Request for Advance” means a completed statement in the form attached as
Schedule 1.1(J) executed by Borrower and delivered to Lender prior to each
release of funds from the Development Fund by Lender after the Closing.

“Request for Release” means a request from Borrower to Lender in connection with
a request for disbursement from the applicable Reserve accompanied by the
following items, which request and items are subject to the approval of Lender
not to be unreasonably withheld, conditioned or delayed: (a) currently dated
certificate approved by Borrower from a Contractor, the Independent Architect,
if any, and Lender’s Representative, if any, on a form to be reasonably approved
by Lender; (b) the Required Lien Waivers in form and substance reasonably
satisfactory to Lender; (c) if requested by Lender, from time to time, the
requisitions for payment then the subject of such Request for Release from
subcontractors and material suppliers engaged in the construction of the
applicable Construction in form and content reasonably satisfactory to Lender;
(d) an Inspection Certificate of an architect approved by Lender based upon an
on-site inspection of the applicable Construction made by the Independent
Architect and confirmed by Lender’s Representative, if any, which shall certify
to all work for which such Request for Release has been completed; (e) evidence
reasonably satisfactory to Lender of Construction Legal Compliance in the form
of (i) a certificate of an Independent Architect as to items (a), (b) and (c) of
the definition of Construction Legal Compliance (together with copies of the
applicable entitlements, approvals, allocations, permits, licenses and
conditional use permits), (ii) a certificate from the chief financial officer or
similar officer of Borrower as to item (d) of the definition of Construction
Legal Compliance (which certificate may, as to “threatened” matters, be
qualified to “such Person’s knowledge following due inquiry”) and (iii) such
other showings, certificates, reports and items as Lender or Lender’s
Representative, if any, may reasonably request to confirm Construction Legal
Compliance; (f) so long as and to the extent disbursements from the Development
Fund are proceeds of the Loan, a date-down endorsement to the Title Policy
dating the Title Policy down to the date and time of the requested disbursement,
and so long as and to the extent disbursements from the Development Fund are not
proceeds of the Loan, evidence satisfactory to Lender that no liens have been
filed or are pending against the Mortgaged Property; and (g) such other
information and documents as may be reasonably requested or required by Lender
or Lender’s Representative, if any, including, but not limited to, certificates,
inspections, date-down and other title policy endorsements, invoices, receipts,
estoppel certificates, permits, licenses and certificates of occupancy,
affidavits and other documents, appropriate for the applicable stage of
Construction.

“Required Completion Date” means the earlier to occur of (i) May 31, 2007, or
(ii) the Completion of Initial Construction; provided, however, that if such
Completion of Construction Work is delayed due to Force Majeure, the Required
Completion Date shall be extended by such

 

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time as determined by Lender based upon the delay caused by the Force Majeure,
in no event to exceed ninety (90) additional days.

“Required Lien Waivers” means, waivers of liens executed by (a) for each Request
for Release and Request for Advance, each party which has entered into an
Architect’s Agreement, Construction Contract, Initial Architect’s Agreement, or
Initial Construction Contract respectively, waiving their respective rights, if
any, and any right of a subcontractor claiming through or under any of them, to
file or maintain any construction liens or claims, all in such form containing
such provisions as may be reasonably required by Lender and in accordance with
applicable law and (b) for each Request for Release and Request for Advance that
includes a request for final payment to any subcontractor, such subcontractor,
waiving its right to file or maintain any construction liens or claims, all in
such form and containing such provisions as may be reasonably required by Lender
executed with respect to and applicable to the extent such subcontractor has
received payment. Such waivers may be conditioned upon payment for work
performed and materials supplied; provided, that the Request for Release and
Request for Advance that includes the request described in clause (b) above
shall include (and in the case of the final Request for Release and Request for
Advance, within ten (10) days after the funding of such final Request for
Release and Request for Advance, Borrower shall deliver to Lender) a duly
executed, unconditional waiver for each Person described in clause (a) or
(b) above.

“Required Restoration Date” is defined in Section 8.1.

“Reserve and Other Accounts Collateral” is defined in Section 6.5.

“Reserve Accounts” means the Capital Expenditure Reserve Account, Insurance
Reserve Account, the Tax Reserve Account and any other securities or deposit
accounts required to be maintained pursuant to this Agreement or the other Loan
Documents.

“Reserves” means the Tax Reserve, the Insurance Reserve and the Capital
Expenditure Reserve.

“Restoration” is defined in Section 8.1.

“S&P” means Standard & Poor’s Rating Service and its successors and assigns.

“Secure Areas” means the aseptic manufacturing areas of the Mortgaged Property.

“Securities” means any stock, shares, voting trust certificates, bonds,
debentures, options, warrants, notes, or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as “securities” or any certificates of interest,
shares or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

“Securitization” is defined in Section 10.1.

“Servicer” is defined in Section 10.1.

 

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“Soft Cost Contingency” means Borrower’s contingency line item for Soft Costs as
shown in the Development Budget.

“Soft Costs” means the total of all fees, costs, and expenses, other than Hard
Costs, relating to the Project Improvements including payment of Loan interest
as shown in the Development Budget.

“Special Purpose Bankruptcy Remote Entity” is defined in Schedule 7.13.

“Subcontracts” means the subcontracts, if any, and any other contracts for the
provisions of labor or materials for the Initial Construction Work entered into
by an Initial Construction Contractor in accordance with its Initial
Construction Contract.

“Subsidiary” means, with respect to any Person (the “Parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the Parent in the
Parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the Parent or one or more Subsidiaries of the Parent or by the Parent and one or
more Subsidiaries of the Parent.

“Substantial Completion and Substantially Completed” means the satisfaction of
all of the following conditions: (a) the date when the applicable Construction
shall have been completed (except for Punch List Items and minor items which can
be fully completed without material interference with the use and operation of
the Mortgaged Property) in accordance with the applicable Plans and
Specifications as certified by the Independent Architect on standard AIA-G702
forms and approved by Lender’s Representative, if any, and Lender, such approval
not to be unreasonably withheld or delayed; (b) all material permits and
approvals required for the normal use and occupancy of the applicable
Construction (including a final certificate of occupancy if required for
occupancy under applicable Legal Requirements provided, that if only a temporary
certificate is available, it shall be accepted for so long as it is effective
and operative until Borrower obtains the final certificate) shall have been
issued by the appropriate Governmental Authority and shall be in full force and
effect; and (c) the applicable Construction shall have been equipped with all
fixtures and equipment required for the intended use and operation of the
Required Capital Improvements.

“Substitute Note” means all notes given in substitution or exchange for the
Promissory Note or another Substitute Note.

“Tax Reserve” is the reserve for Impositions established pursuant to
Section 5.5.

“Tax Reserve Account” shall have the meaning provided in Section 6.1.

 

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“Tenant Impairment Event” means any one or more of the following has occurred:
(a) the tenant under the Guarantor Lease has commenced or is the subject of a
proceeding under the Bankruptcy Code; or (b) a default by the tenant under the
Guarantor Lease shall have occurred which is not cured prior to the expiration
of the applicable grace or curative period, if any, in such Lease.

“Title Company” means Chicago Title Insurance Company.

“Title Policy” means a the mortgagee’s policy of title insurance issued on the
standard Texas form by the Title Company, together with such reinsurance and
direct access agreements as Lender may require, insuring that the Mortgage is a
valid first and prior enforceable lien on Borrower’s fee simple interest in the
Mortgaged Property (including any easements appurtenant thereto but excluding
any non-real estate property interests included in the definition of Mortgaged
Property) subject only to the Permitted Encumbrances. The Title Policy shall
contain such endorsements as Lender may require.

“Total Debt/Capitalization” means, at any reporting date, for a Person, the
percentage equal to (A) the sum of the long term debt (including any amounts for
operating lease debt equivalents) of such Person plus the amount of any current
maturities, commercial paper and other short-term borrowings (the “Total Debt”)
divided by (B) the sum of the Total Debt plus the amount of shareholder’s equity
(including any preferred stock) plus minority interests.

“Total Loss” means (i) a casualty, damage or destruction of the Mortgaged
Property, the cost of restoration of which (as reasonably determined by Lender)
would exceed $50,000,000, (ii) a permanent taking of fifty percent (50%) or more
of the gross leaseable area of the Land or Improvements, (iii) a permanent
taking of fifty percent (50%) or more of the automobile parking spaces located
on the Land or such number of parking spaces as would cause the Borrower or the
Mortgaged Property to cease to comply with applicable Legal Requirements or
Material Contracts, or (iv) a permanent taking of so much of the Land or
Improvements, in either case, such that it would be impracticable, in Lender’s
reasonable discretion, even after restoration, to operate the Mortgaged Property
as an economically viable whole.

“Transfer” means, (a) when used as a verb, to, directly or indirectly, lease,
sell, assign, convey, give, exchange, devise, mortgage, encumber, pledge,
hypothecate, alienate, grant a security interest, or otherwise create or suffer
to exist any Lien, transfer or otherwise dispose, or to contract or agreement to
do any of the foregoing, whether by operation of law, voluntarily, involuntarily
or otherwise as well as any other action or omission which has the practical
effect of initiating or completing the foregoing and (b) when used as a noun, a
direct or indirect, lease, sale, assignment, conveyance, gift, exchange, devise,
mortgage, encumbrance, pledge, hypothecation, alienation, grant of a security
interest or other creation or sufferance of a Lien, transfer of other
disposition, or contract or agreement by which any of the foregoing may be
effected, whether by operation of law, voluntary or involuntary and any other
action or omission which has the practical effect of initiating or completing
the foregoing.

“Treasury Rate” means the annualized yield on securities issued by the United
States Treasury having a maturity corresponding to the remaining term to the
originally scheduled Maturity Date, as quoted in Federal Reserve Statistical
Release H. 15(519) under the heading

 

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“U.S. Government Securities – Treasury Constant Maturities” for the Treasury
Rate Determination Date (as defined below), converted to a monthly equivalent
yield. If yields for such securities of such maturity are not shown in such
publication, then the Treasury Rate shall be determined by Lender by linear
interpolation between the yields of securities of the next longer and next
shorter maturities. If said Federal Reserve Statistical Release or any other
information necessary for determination of the Treasury Rate in accordance with
the foregoing is no longer published or is otherwise unavailable, then the
Treasury Rate shall be reasonably determined by Lender based on comparable data.

“Treasury Rate Determination Date” means the date which is five (5) Business
Days prior to the scheduled prepayment date.

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“UCC Collateral” is defined in Section 2.9.

“Validation” is defined as establishing documented evidence which provides a
high degree of assurance that a specific process will consistently produce a
product meeting its predetermined specifications and quality attributes.
Although the term ‘Validation’ relates to manufacturing processes, the overall
validation effort also includes ‘Qualification’ of Utility Systems, Facility
Environments, and Process Equipment to demonstrate that systems are qualified to
be used for the process. The purpose of these qualification studies is to
demonstrate that Utilities, Facilities, and Equipment are properly installed,
operate properly, and are suitable for their application to manufacturing
processes.

“Yield Maintenance Amount” means (A) the net present value of all future
payments of principal and interest due for the remainder of the Term,
discounted, each from the date such payments are due to the date of the
prepayment, at the result of the Treasury Rate divided by 12, less (B) the then
outstanding principal balance of the Loan; such Yield Maintenance Amount can
never be less than zero; provided, however, for purposes of any partial
prepayment, all references to the remaining outstanding principal balance of the
Loan shall instead refer to the amount of such partial prepayment. For purposes
of computing the Yield Maintenance Amount with regard to Section 2.4(C)(iii),
the date of prepayment shall be deemed the date the Loan is accelerated.

 

1.2 Terms; Utilization of GAAP for Purposes of Financial Statements Under
Agreement.

For purposes of this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to such terms in conformity with GAAP.
Financial statements and other information furnished to Lender pursuant to
subsection 5.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. No Accounting Changes shall affect financial
covenants, standards or terms in this Agreement; provided, that Borrower shall
prepare footnotes to the financial statements required to be delivered hereunder
that show the differences between the financial statements delivered (which
reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes).

 

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1.3 Other Definitional Provisions.

References to “Sections,” “Exhibits” and “Schedules” shall be to Sections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference. In this Agreement, “hereof,” “herein,” “hereto,” “hereunder” and
the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective word appears;
words importing any gender include the other genders; references to “writing”
include printing, typing, lithography and other means of reproducing words in a
tangible visible form; the words “including,” “includes” and “include” shall be
deemed to be followed by the words “without limitation”; the phrase “and/or”
shall mean that either “and” or “or” may apply; the phrases “attorneys’ fees,”
“legal fees” and “counsel fees” shall include any and all attorneys’, paralegal
and law clerk fees and disbursements, including court costs, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Mortgaged Property and the Collateral
and enforcing its rights hereunder and/or the other Loan Documents; references
to agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; references to a Person’s “knowledge” in this Agreement or the
other Loan Documents refers to the actual knowledge of the Person in question
and such knowledge as a reasonably prudent Person would have acquired by virtue
of such inquiry and due diligence as a reasonably prudent Person would have
undertaken and all references to statutes and related regulations shall include
any amendments of same and any successor statutes and regulations.

SECTION 2

AMOUNTS AND TERMS OF THE LOAN

2.1 Loan Disbursement and Note. Subject to the terms and conditions of this
Agreement, Lender shall lend the Loan to Borrower on the Closing Date. The
proceeds of the Loan shall be used to (i) acquire Mortgaged Property;
(ii) satisfy actual, documented closing costs related to the Loan and approved
by Lender; and (iii) redevelop the Mortgaged Property for Borrower’s use in
manufacturing biopharmaceutical products. The disbursement of the Loan in
accordance with the foregoing shall be made on the Closing Date. The Loan shall
be evidenced by the Note. The Obligations of Borrower under this Agreement, the
Note and the other Loan Documents are secured by, among other things, the
Mortgage and the Liens created or arising under the other Loan Documents. On the
Closing Date, Lender shall (a) wire transfer the amount required by the
settlement statement agreed to by Lender and Borrower applicable to the Closing
(“Settlement Statement”) in accordance with Borrower’s instructions to acquire
the Mortgaged Property, (b) permit Borrower to direct the payment of costs and
expenses, if any, which Borrower requests to be paid at Closing directly by
Lender with the proceeds of the Loan, only to the extent Lender approves, in its
sole discretion, such costs and expenses and (c) deposit the balance of the Loan
Proceeds into an escrow account (the “Development Fund”), with Bank in which
escrow

 

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account Lender shall have a first priority security interest and the right to
approve all disbursements therefrom. On the Closing Date, Borrower shall deposit
into the Equity Account an amount equal to the amount set forth for Borrower’s
Contribution on the Settlement Statement (“Borrower’s Initial Equity
Contribution”), which monies shall be held and disbursed in accordance with the
terms of this Agreement. Money in each of the Development Fund and the Equity
Account shall be invested in Permitted Investments, designated by and for the
benefit of Borrower, and all earnings from such Permitted Investments shall be
retained in the Development Fund or the Equity Account, as applicable. The Loan
and the other funds contained in the Development Fund (including, without
limitation, the Borrower’s Initial Equity when such amounts are transferred from
the Equity Account into the Development Fund as set forth in Section 3.2(A)
below) will be released from the Development Fund and advanced to pay for the
costs attributed to the Initial Construction Work in accordance with each line
item category in the Initial Construction Budget and as otherwise as provided in
and subject to the other terms and conditions contained in Section 3.3 of this
Agreement (such advances being referred to herein collectively, as the
“Development Advances”).

2.2 Interest.

(A) Interest Rate. Subject to the provisions of Section 2.2(C) hereof, the
outstanding principal balance of the Loan shall bear interest at the Base Rate.
However, (a) upon and during the continuance of any Event of Default by Borrower
in the payment of any sum of principal, interest or other Indebtedness of
Borrower owing Lender when due, (b) during the existence of any other Event of
Default, or (c) after the Maturity Date or earlier upon acceleration of the
Loan, the principal amount of the Loan shall bear interest (“Default Interest”)
at the Default Rate. With respect to any scheduled payments of principal and
interest (excluding the payment due on the Maturity Date), Borrower will be
entitled to a grace period of five (5) days from such date before Default
Interest is imposed by reason of such late payment; provided, however, such
grace period will not be available more than once in any twelve (12) Loan Month
period and if Borrower fails to make the required payment within said five
(5) day period, Default Interest will be calculated from the original due date.
Except as set forth in the preceding sentence, the Default Interest shall
commence, without notice, immediately upon and from the occurrence of (a),
(b) or (c) above, as the case may be, and shall continue until Events of all
Defaults are cured and all sums then due and payable under the Loan Documents
are paid in full; provided that in the event of any monetary Event of Default,
Default Interest shall be calculated from the date the applicable Events of
Default actually occurred. Default Interest shall be payable upon demand, and,
to the extent unpaid, shall be compounded monthly at the Default Rate.

(B) Computation and Payment of Interest. Interest on the Loan and all other
Obligations owing to Lender shall be computed on the daily principal balance of
the Note on the basis of actual days elapsed and a three hundred sixty (360)-day
year. Interest on the Loan is payable in arrears. Payments of interest shall be
paid to Lender as specified in Section 2.3. In addition, all accrued and unpaid
interest shall be paid to Lender on the earlier of the date of prepayment (to
the extent prepayment is permitted under Section 2.4) and maturity, whether by
acceleration or otherwise. The Loan shall commence to bear interest on the date
the proceeds of the Loan are to be disbursed to or for the order of Borrower,
provided, however, if the proceeds are disbursed to an escrowee, the Loan shall
commence to bear interest from and including the

 

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date of disbursement to such escrowee regardless of the date such proceeds are
disbursed from escrow.

(C) Interest Laws. Notwithstanding any provision to the contrary contained in
this Agreement or the other Loan Documents, Borrower shall not be required to
pay, and Lender shall not be permitted to collect, any amount of interest in
excess of the maximum amount of interest permitted by law (“Excess Interest”).
If any Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Agreement or in any of the other
Loan Documents, then in such event: (1) the provisions of this Section shall
govern and control; (2) Borrower shall not be obligated to pay any Excess
Interest; (3) any Excess Interest that Lender may have received hereunder shall
be, at Lender’s option, (a) applied as a credit against the outstanding
principal balance of the Obligations due and owing to Lender (without any
prepayment penalty or premium therefor) or for accrued and unpaid interest
thereunder (not to exceed the maximum amount permitted by law), (b) refunded to
the payor thereof, or (c) any combination of the foregoing; (4) the interest
rate(s) provided for herein shall be automatically reduced to the maximum lawful
rate allowed from time to time under applicable law (the “Maximum Rate”), and
this Agreement and the other Loan Documents shall be deemed to have been and
shall be, reformed and modified to reflect such reduction; and (5) Borrower
shall not have any action against Lender for any damages arising out of the
payment or collection of any Excess Interest. Notwithstanding the foregoing, if
for any period of time interest on any Obligation due and owing to Lender is
calculated at the Maximum Rate rather than the applicable rate under this
Agreement, and thereafter such applicable rate becomes less than the Maximum
Rate, the rate of interest payable on such Obligations due and owing to Lender
shall, to the extent permitted by law, remain at the Maximum Rate until Lender
shall have received or accrued the amount of interest which Lender would have
received or accrued during such period on Obligations due and owing to Lender
had the rate of interest not been limited to the Maximum Rate during such
period.

(D) Late Charges. If any scheduled payment of principal and/or interest or other
amount owing pursuant to this Agreement or the other Loan Documents (excluding
the payment due on the Maturity Date) is not paid when due, Borrower shall pay
to Lender, in addition to all sums otherwise due and payable, a late charge
(“Late Charge”) in an amount equal to five percent (5%) of the unpaid amount.
With respect to regular monthly payments of principal and/or interest, Borrower
will be entitled to a grace period of five (5) days from the date due before a
late charge is imposed by reason of such late payment; provided, however, such
grace period will not be available more than once in any consecutive twelve
(12) month period. Any unpaid late charge shall bear interest at the Default
Rate until paid.

 

2.3 Payments.

Interest for the period commencing on the date of disbursement of the Loan and
ending on August 9, 2006 shall be paid on the Closing Date. On each Payment Date
thereafter commencing with the Payment Date occurring on September 10, 2006,
Borrower shall pay to Lender interest on the outstanding principal of the Loan
accrued from and including the immediately preceding Payment Date, to, but not
including, the Payment Date on which such payment is to be made. Commencing on
March 10, 2009, and on each Payment Date thereafter, principal of the Loan
evidenced by the Note shall be paid to Lender in equal monthly

 

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installments of principal in an amount equal to Two Hundred Eighty-Eight
Thousand Eight Hundred Eighty-Eight and 89/100 Dollars ($288,888.89) per month,
which amount shall be sufficient to amortize the full principal amount
outstanding as of the date of disbursement of the Loan over a seven and one-half
(7.5) year term (such amortization schedule also setting forth interest at the
Base Rate (assuming all payments are timely made) is attached hereto as Schedule
23).

 

2.4 Payments and Prepayments on the Loan.

(A) Manner and Time of Payment. Borrower agrees to pay all of the Obligations
relating to the Loan as such amounts become due or are declared due pursuant to
the terms of this Agreement and the other Loan Documents. All payments shall be
made without deduction, defense, setoff or counterclaim by the wire transfer of
good immediately available wire transferred federal funds to Lender’s account at
JP Morgan Chase Bank for the account of Lender, Reference: Alexion
Pharmaceuticals Loan No.: M001313: l, or at such other place as Lender may
direct from time to time by written notice to Borrower. Borrower shall receive
credit for such funds on the date received if such funds are received by Lender
by 1:00 P.M. (New York time) on such day. In the absence of timely receipt, such
funds shall be deemed to have been paid by Borrower on the following Business
Day. Whenever any payment to be made under the Loan Documents shall be stated to
be due on a day that is not a Business Day, or any time period relating to a
payment to be made hereunder is stated to expire on a day that is not a Business
Day, the payment may be made on the following Business Day and the period will
not expire until the following Business Day.

(B) Maturity. The outstanding principal balance of the Loan, all accrued and
unpaid interest thereon and all other sums owing to Lender pursuant to the Loan
Documents, shall be due and payable on August 10, 2016 (the “Maturity Date”).

(C) Prepayments.

(i) No prepayment of the Loan shall be allowed in whole or in part, on or prior
to the Lockout Expiration Date other than principal payments required pursuant
to Section 2.3. Thereafter, the Loan may be prepaid, in whole, but not in part,
upon not less than sixty (60) days’ irrevocable prior notice to Lender. Any
prepayments on the principal balance of the Loan evidenced by the Note whether
voluntary or involuntary, shall be accompanied by payment of interest accrued to
the date of prepayment, together with the applicable Prepayment Premium. Any
prepayments made pursuant to the foregoing shall be made on a Payment Date,
provided, however, Borrower may elect to make any such prepayments on a Business
Day which is not a Payment Date if, in addition to all interest which has
accrued to and including the date of prepayment and the Prepayment Premium,
Borrower also pays all interest which would accrue on the Loan to, but not
including, the Payment Date following the date of prepayment. Amounts prepaid
shall not be re-borrowed.

(ii) If, following an Event of Default, payment of all or any part of the Loan
is tendered by Borrower or otherwise recovered by Lender, such tender or
recovery shall be deemed a voluntary prepayment by Borrower in violation of the
prohibition against

 

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prepayment set forth in Section 2.4(C)(i) and Borrower shall pay to Lender, in
addition to the other Obligations, the Prepayment Premium. If the Maturity Date
is accelerated, due to an Event of Default or otherwise, or if any prepayment of
all or any portion of the Loan hereunder occurs, whether in connection with
Lender’s acceleration of the Loan or otherwise, or if the Mortgage is satisfied
or released by foreclosure (whether by power of sale or judicial proceeding),
deed in lieu of foreclosure or by any other means, then the Prepayment Premium
shall become immediately due and owing and Borrower shall immediately pay the
Prepayment Premium to Lender. Nothing contained in this Section 2.4(C)(iii)
shall create any right of prepayment.

2.5 Lender’s Records; Mutilated, Destroyed or Lost Notes. The balance on
Lender’s books and records shall be presumptive evidence (absent manifest error)
of the amounts due and owing to Lender by Borrower; provided that any failure to
so record or any error in so recording shall not limit or otherwise affect
Borrower’s obligation to pay the Obligations. In case any Note shall become
mutilated or defaced, or be destroyed, lost or stolen, Borrower shall, upon
request from Lender, execute and deliver a new Note of like principal amount in
exchange and substitution for the mutilated or defaced Note, or in lieu of and
in substitution for the destroyed, lost or stolen Note. In the case of a
mutilated or defaced Note, the mutilated or defaced Note shall be surrendered to
Borrower upon delivery to Lender of the new Note. In the case of any destroyed,
lost or stolen Note, Lender shall furnish to Borrower, upon delivery to Lender
of the new Note (i) certification and affidavit of the destruction, loss or
theft of such Note and (ii) such security or indemnity as may be reasonably
required by Borrower to hold Borrower harmless.

2.6 Taxes. Any and all payments or reimbursements made under the Agreement, the
Note or the other Loan Documents shall be made free and clear of and without
deduction for any and all taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto arising out of or in
connection with the transactions contemplated by the Loan Documents; excluding,
however, the following: taxes imposed on the income of Lender by any
jurisdiction or any political subdivision thereof; taxes that are not directly
attributable to the Loan; and any “doing business” taxes, however denominated,
charged by any state or other jurisdiction (all such taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto,
excluding such taxes imposed on income, taxes not directly attributable to the
Loan and any “doing business” taxes, herein “Tax Liabilities”). If Borrower
shall be required by law to deduct any such amounts from or in respect of any
sum payable hereunder to Lender, then the sum payable hereunder shall be
increased as may be necessary so that, after making all required deductions,
Lender receives an amount equal to the sum it would have received had no such
deductions been made. In the event that, subsequent to the Closing Date, (1) any
changes in any existing law, regulation, treaty or directive or in the
interpretation or application thereof, (2) any new law, regulation, treaty or
directive enacted or any interpretation or application thereof, or
(3) compliance by Lender with any new request or directive (whether or not
having the force of law) from any governmental authority, agency or
instrumentality does or shall subject Lender to any tax of any kind whatsoever
with respect to this Agreement, the other Loan Documents or the Loan, or change
the basis of taxation of payments to Lender of principal, fees, interest or any
other amount payable hereunder (except for income taxes, or franchise taxes
imposed in lieu of income taxes, imposed generally by federal, state or local
taxing authorities with respect to interest or commitment or other fees payable
hereunder or changes in the rate of interest or tax on the overall income of
Lender, taxes that are not directly attributable to the Loan and any

 

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“doing business” taxes, however denominated, charged by any state or other
jurisdiction) and the result of any of the foregoing is to increase the cost to
Lender of making or continuing its Loan hereunder, as the case may be, or to
reduce any amount receivable hereunder, then, in any such case, Borrower shall
promptly pay to Lender, within thirty (30) days after its demand, any additional
amounts necessary to compensate Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by Lender with
respect to this Agreement or the other Loan Documents. If Lender becomes
entitled to claim any additional amounts pursuant to this Section 2.6, it shall
promptly notify Borrower of the event by reason of which Lender has become so
entitled.

2.7 Application of Payments. Except as otherwise expressly provided in the last
sentence of this Section 2.7, all payments made hereunder shall be applied
first, to the payment of any Late Charges and other sums (other than principal
and interest) due from Borrower to Lender under the Loan Documents, second, to
any interest then due at the Default Rate, third to interest then due at the
Base Rate, and last to the principal amount. Following and during the
continuance of an Event of Default, all sums collected by Lender shall be
applied in such order of priority to such items set forth below as Lender shall
determine in its sole discretion: (i) to the costs and expenses, including
reasonable attorneys’ and paralegals’ fees and costs of appeal, incurred in the
collection of any or all of the Loan due or the realization of any collateral
securing any or all of the Loan; and (ii) to any or all unpaid amounts owing
pursuant to the Loan Documents in any order of application as Lender, in its
sole discretion, shall determine.

2.8 Commitment Fee. Borrower shall pay the Commitment Fee to Lender on the
Closing Date.

2.9 Security Agreement. To secure the payment, performance and discharge of the
Obligations, Borrower hereby grants, assigns, transfers, conveys and sets over
unto Lender, and hereby grants to Lender a continuing first priority, perfected
security interest in all of Borrower’s right, title and interest in, to and
under any and all of the following, whether now and/or existing and/or now owned
and/or hereafter acquired and/or arising:

 

  (1) the Accounts;

 

  (2) the Contracts;

 

  (3) the Reserve Accounts and other Reserve and Other Accounts Collateral;

 

  (4) the Equipment, Fixtures and Personalty;

 

  (5) the General Intangibles;

 

  (6) the Leases;

 

  (7) the Inventory;

 

  (8) the Management Agreement(s);

 

  (9) the Rents and other Gross Revenues;

 

  (10) the Proceeds; and

 

  (11) together with all accessions to, substitutions for, and replacements of,
any of the foregoing and any and all products and cash and non-cash proceeds of
any of the foregoing (collectively, the “UCC Collateral”).

With respect to all UCC Collateral constituting a part of the Mortgaged
Property, including, without limitation, the Accounts, this Agreement shall
constitute a “security agreement” within

 

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the meaning of, and shall create a security interest under, the UCC. Borrower
hereby acknowledges and agrees that Lender shall be permitted to file one or
more financing statements naming Borrower as debtor and Lender as secured party
identifying “the Accounts, the Contracts, the Reserve Accounts and other Reserve
and Other Accounts Collateral, the Equipment, Fixtures and Personalty, the
General Intangibles, the Leases, the Inventory, the Management Agreements, the
Rents and other Gross Revenues and the Proceeds” of Borrower in the collateral
description thereon. As to the UCC Collateral, the grant, transfer, and
assignment provisions of this Section 2.9 shall control over the grant provision
of Section 2.1 of the Mortgage. Borrower represents and warrants that, except
for any financing statement filed by Lender, no presently effective financing
statement covering the Collateral or any part thereof has been filed with any
filing officer, and no other security interest has attached to or has been
perfected in the Collateral or any part thereof. Borrower shall from time to
time within twenty (20) days after request by Lender, execute, acknowledge and
deliver, or authorize the filing of any financing statement, renewal, affidavit,
certificate, continuation statement or other document as Lender may reasonably
request in order to evidence, perfect, preserve, continue, extend or maintain
this security agreement and the security interest created hereby as a first
priority Lien on the UCC Collateral, subject only to the Permitted Encumbrances.

2.10 Certain Secured Party Remedies. If an Event of Default shall have occurred
and be continuing, Lender shall have all the remedies of a secured party under
the UCC and all other rights and remedies now or hereafter provided or permitted
by law, including, without limitation, the right to take immediate and exclusive
possession of the UCC Collateral, or any part thereof, and for that purpose
Lender may, as far as Borrower can give authority therefor, with or without
judicial process, enter (if this can be done without breach of the peace) upon
any premises on which any of the Collateral or any part thereof may be situated.
Without limitation of the foregoing, Lender shall be entitled to hold, maintain,
preserve and prepare all of the Collateral for sale and to dispose of said
Collateral, if Lender so chooses, from the Mortgaged Property provided that
Lender may require Borrower to assemble such UCC Collateral and make it
available to Lender for disposition at a place to be designated by Lender from
which the UCC Collateral would be sold or disposed of, and provided further
that, for a reasonable period of time prior to the disposition of such UCC
Collateral, Lender shall have the right to use same in the operation of the
Mortgaged Property. Borrower will execute and deliver to Lender any and all
forms, documents, certificates and registrations as may be necessary or
appropriate to enable Lender to sell and deliver good and clear title to the UCC
Collateral to the buyer at the sale as herein provided. Unless the UCC
Collateral is of the type customarily sold on a recognized market, Lender will
give Borrower at least ten (10) days’ written notice of the time and place of
any public sale of such UCC Collateral or of the time after which any private
sale or any other intended disposition thereof is to be made. The requirements
of reasonable notice shall be met if such notice is given to Borrower in writing
at least ten (10) days before the time of the sale or disposition. Lender may
buy at any public sale and, if the UCC Collateral is of a type customarily sold
in a recognized market or is a type which is the subject of widely distributed
standard price quotations, it may buy at private sale. Unless Lender shall
otherwise elect, any sale of the UCC Collateral shall be solely as a unit and
not in separate lots or parcels, it being expressly agreed, however, that Lender
shall have the absolute right to dispose of such UCC Collateral in separate lots
or parcels. Lender shall further have the absolute right to elect to sell the
UCC Collateral as a unit with, and not separately from, the Land and
Improvements constituting a portion of the Mortgaged Property. The net proceeds
realized upon any

 

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disposition of the UCC Collateral, after deduction for the expenses of
retaining, holding, preparing for sale, selling and the like and the attorneys’
fees and legal expenses incurred by Lender shall be applied towards satisfaction
of such of the Obligations secured hereby, and in such order of application, as
Lender may elect. If all of the Obligations are satisfied, Lender will account
to Borrower for any surplus realized on such disposition.

2.11 Potential Loan Increase. Provided no Event of Default then exists, if
Borrower or Guarantor obtains Drug Approval on or before December 31, 2007,
Borrower may provide Lender with Borrower’s written request to increase the
amount of the Loan by $9,000,000 upon the terms and conditions contained in this
Section 2.11. Within forty-five (45) days of Landlord’s receipt of such written
request, Borrower and Lender shall cooperate with each other to enter into one
or more documents as deemed necessary or desirable by Borrower and Lender to
amend the existing Loan Documents to provide for the following:

(A) increase the Loan by adding a new tranch B, with the existing Loan becoming
tranch A, which new tranch B would be in the amount of $9,000,000 (and is herein
called the “Tranch B Loan”);

(B) the Tranch B Loan would have a separate base rate of interest (non-default)
equal to the yield to maturity of 10-year U.S. Treasury securities plus a spread
equal to 4.0%, calculated at the time of disbursement of the Tranch B Loan;

(C) the Tranch B Loan would be a part of the definition of “Loan” in the Loan
Documents and secured by all collateral and security securing the Loan under the
Loan Documents on the Closing; and

(D) Borrower providing updated or new opinions of counsel, officer’s
certifications, title insurance policies and other closing deliveries as
customary to obtain with an amendment increasing the amount of a first priority
mortgage loan, all upon the closing of the Tranch B Loan; all of which shall be
acceptable to Borrower and Lender.

SECTION 3

CONDITIONS TO LOAN

3.1 Conditions to Funding of the Loan on the Closing Date. The obligation of
Lender to disburse the Loan, and thereafter to make disbursements from the
Development Account, is subject to the prior or concurrent satisfaction of the
conditions set forth below.

(A) Performance of Agreements; Truth of Representations and Warranties; No
Injunction. Borrower, Guarantor and all other Persons executing any Loan
Document on behalf of Borrower and Guarantor shall have performed in all
material respects all agreements which any of the Loan Documents provide shall
be performed on or before the Closing Date. The representations and warranties
contained in the Loan Documents shall be true, correct and complete in all
material respects on and as of the Closing Date to the same extent as though
made on and as of that date. No Legal Requirements shall have been adopted, no
order, judgment or decree of any Governmental Authority shall have been issued
or entered, and no litigation shall be pending or threatened, which in the
reasonable judgment of Lender would

 

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enjoin, prohibit or restrain, or impose or result in an adverse effect upon the
making, borrowing or repayment of the Loan or the execution, delivery or
performance of the Loan Documents. No Event of Default shall have occurred and
then be continuing.

(B) Opinion of Counsel. Lender shall have received and approved written opinions
of counsel for Borrower and Guarantor, in form and substance reasonably
satisfactory to Lender and its counsel, dated as of the Closing Date. By
execution of this Agreement, Borrower authorizes and directs its counsel to
render and deliver such opinions to Lender.

(C) Loan Documents. On or before the Closing Date, Borrower shall execute and
deliver and cause to be executed and delivered, to Lender all of the Loan
Documents, each, unless otherwise noted, dated the Closing Date, duly executed,
in form and substance satisfactory to Lender and in quantities designated by
Lender (except for the Promissory Note, of which only the original shall be
executed). Borrower hereby authorizes Lender to file the financing statements in
such filing offices as Lender elects.

(D) Officer’s Certificate. Lender shall have received and approved an Officer’s
Certificate executed by the chief financial officer or similar officer of
Borrower stating that: (a) on such date, and after giving effect to the Loan, no
Default or Event of Default exists; (b) no material adverse change in the
financial condition or operations of the business of Borrower or Guarantor has
occurred since March 31, 2006; and (c) the representations and warranties of
Borrower and Guarantor set forth in this Agreement and the other Loan Documents
are true, and correct in all material respects on and as of such date with the
same effect as though made on and as of such date.

(E) Insurance Policies and Endorsements. Lender shall have received and approved
the original policies of insurance required to be maintained under this
Agreement and the other Loan Documents, together with endorsements satisfactory
to Lender naming Lender as additional insured under such policies. If such
policies are not delivered to Lender, Lender must receive and approve a copy of
the insurance policies in question and evidence of such insurance required to be
maintained in connection with this Agreement.

(F) Organizational and Authorization Documents. Lender shall have received all
documents reasonably requested by Lender, including all Organizational
Documents, with regard to the due organization, existence, internal governance,
power and authority, due authorization, execution and delivery, authorization to
do business and good standing of Borrower and Guarantor, the validity and
binding effect of the Loan Documents and other matters relating thereto, in form
and substance reasonably satisfactory to Lender.

(G) Closing Statement. Lender shall have received and approved a closing and
disbursement statement executed by Borrower with respect to the disbursement of
the proceeds of the Loan.

(H) Financial Statements. Lender shall have received and approved financial
statements of Guarantor as of March 31, 2006. Lender shall have received
(a) audited financial statements for Guarantor for the calendar years 2004 and
2005, and unaudited financial statements for the calendar year 2006 (to date);
and (b) a pro forma balance sheet of Borrower

 

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dated the Closing Date giving effect to the making of the Loan and the
transactions occurring on the Closing Date, each accompanied by an Officer’s
Certificate of the chief financial officer or similar officer of Borrower.

(I) Appointment of Agent for Service of Process. Lender shall have received and
approved a letter appointing (and accepted by) Corporation Service Company as
Borrower’s and Guarantor’s agent for service of process.

(J) Material Contracts and Other Agreements. Lender shall have received and
approved true, correct and complete certified copies of each Material Contract,
all other operating agreements, service contracts and equipment leases and all
permits, licenses and documents pertaining to the Proprietary Rights relating to
the Mortgaged Property.

(K) Environmental Assessments, Physical Condition Reports and Lender’s
Inspection and Plans and Specifications. Lender shall have received and approved
the Environmental Reports and Physical Condition Reports relating to the
Mortgaged Property, together with letters from the preparer(s) thereof
permitting Lender (and Persons designated by Lender) to rely upon the
Environmental Reports and Physical Condition Reports. To the extent in the
possession of, or reasonably obtainable by, the Borrower, a true, correct and
complete copy of “as-built” plans and specifications for the Improvements.

(L) Title Policy, Survey, Searches, Perfection and Priority. Lender shall have
received and approved (i) the Title Policy and (ii) a plat of survey of the
Land, Improvements and other components of the Mortgaged Property constituting
real estate certified to such Persons as Lender may designate and prepared in
accordance with Lender’s requirements. Lender shall have received and approved
copies of Uniform Commercial Code financing statement, judgment, tax lien,
bankruptcy and litigation search reports of such jurisdictions and offices as
Lender may reasonably designate with respect to Borrower, Guarantor and such
other Persons as Lender may reasonably require. Lender shall have received such
other evidence as Lender may require confirming that Lender has a perfected
first priority security interests and Lien upon the Collateral.

(M) Reserve Accounts and Deposits. The Reserve Accounts shall have been
established in a manner satisfactory to Lender. The initial deposits into the
Reserves on the Closing Date, shall have been made (which amounts may, with
Lender’s approval, be made from the proceeds of the Loan).

(N) Commitment Fee. Lender shall have received its Commitment Fee.

(O) Other Documents and Deliveries. Borrower shall have delivered such other
documents and deliveries as are set forth on the Closing Checklist attached
hereto as Exhibit E.

(P) Leases. Lender shall have received true, correct and complete certified
copies of each of the Leases, including, the Guarantor Lease.

(Q) Legal Fees; Closing Expenses. Borrower shall have paid any and all legal
fees and expenses of counsel to Lender, together with all recording fees and
taxes, title insurance premiums, and other costs and expenses related to the
Loan.

 

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(R) Guaranty. Guarantor shall have executed and delivered the Guaranty.

(S) Equity. Borrower shall have deposited at least the Borrower’s Initial Equity
Contribution into the Equity Account.

(T) Logo. Borrower shall execute and deliver or cause the owner thereof to
execute and deliver, a consent consenting to Lender’s use of Borrower’s logo and
the logo associated with Guarantor solely for the purpose specified in
Section 11.12.

(U) Licenses, Permits and Approvals. Lender shall have received a building
permit for the Initial Construction Work or, to the extent not so received, then
all necessary permits applicable to construction then being conducted and
thereafter obtaining such other required permits needed for each portion of the
Initial Construction Work prior to commencing such portion of the Initial
Construction Work. Borrower will have obtained and delivered to Lender all other
applicable licenses, permits and approvals as Lender or any Governmental
Authority may require. Evidence satisfactory to Lender that the Project
Improvements may be completed in accordance with applicable Legal Requirements
and that any such Legal Requirements are in full force and effect and Borrower
is in full compliance therewith. Notwithstanding Section 3.1(U), no certificate
of occupancy will be required for the Project Improvements as a condition to
initial disbursement of the Loan.

(V) Zoning. Lender shall have received evidence satisfactory to Lender as to the
compliance of the Mortgaged Property with all applicable Legal Requirements.

(W) Development Budget and Construction Budget. Lender shall have received the
final Development Budget and all Initial Construction Budgets listing all Hard
Costs and all Soft Costs, all in a form and substance acceptable to Lender.

(X) Initial Construction Contracts and Agreements. Lender shall have received:
(i) a certified copy of each Initial Construction Contract, together with
certified copies of all Subcontracts relating to the Initial Construction Work
which Lender may request, and (ii) a certified copy of each Initial Architect’s
Agreement, all such agreements and contracts being in a form and substance
acceptable to Lender and consistent with the Development Budget and Initial
Construction Budgets, as applicable. Each Initial Contractor and each Initial
Borrower’s Architect shall have consented to the Assignment of Initial
Construction Contract and the Assignment of Initial Architect’s Agreement, as
applicable, pursuant to a consent satisfactory in form and substance to Lender.

(Y) Project Plans and Specifications. Lender shall have received and approved
two (2) sets of the Project Plans and Specifications for the Initial
Construction Work.

(Z) Architect Certificate. The Initial Borrower’s Architect having primary
responsibility for the design of the Project Improvements and such other design
professionals as Lender may require shall have provided Lender with a
certificate regarding the Project Improvements, the Project Plans and
Specifications and the Initial Construction Work satisfactory in form and
substance to Lender.

 

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(AA) Lender’s Consultant’s Report. Lender’s Construction Consultant shall have
provided Lender with the Lender’s Consultant’s Report, such report to be
satisfactory to Lender.

(BB) Construction Schedule. Lender shall have received the final Development
Schedule and Construction Schedule, each as approved by Lender.

 

3.2 Advances Generally.

(A) Advances. So long as no Event of Default or Default exists, Lender shall, on
the terms and conditions set forth below, make disbursements from the
Development Fund (as applicable) to pay a portion of Borrower’s Hard Costs and
Soft Costs incurred in connection with the Completion of Initial Construction
Work. The Development Advances shall be made in accordance with the terms and
conditions of this Article 3. From time to time, to the extent there are
insufficient funds in the Development Fund to satisfy a Development Advance,
Lender may transfer (without any direction or further authorization from
Borrower) funds from the Equity Account into the Development Fund, which amounts
shall then be disbursed in accordance with Section 3.3 of this Agreement.

(B) No Advances for Interest. Lender may, with or without Borrower’s having made
a Request for Advance, approve Development Advances for purposes of paying
Lender all sums including interest and principal which are then due and payable
from Borrower to Lender under this Agreement and any other Loan Document.

(C) Development Budget. Borrower represents and warrants that the Development
Budget is accurate and complete and includes all Hard Costs and Soft Costs of
the Initial Construction Work, including all costs and expenses necessary to
satisfy, fulfill, comply with and perform all terms, conditions, requirements
and obligations under and pursuant to Legal Requirements, all Initial
Construction Contracts, all Initial Architect’s Agreements and all Material
Contracts, other than those, if any, which a Governmental Authority has agreed,
in writing, to perform, together with a Hard Cost Contingency and Soft Cost
Contingency as approved by Lender.

(D) Loan Balancing; Right to Require Deposits. Notwithstanding anything to the
contrary herein, it is expressly understood and agreed that the Loan shall at
all times be “in balance.” The Loan shall be deemed to be “in balance” only at
such time and from time to time, as Lender may reasonably determine that either:
(a) the amount left in the Development Fund (plus, giving effect to the amounts
in the Equity Account, all escrow reserves, retainage and that portion of the
Hard Cost Contingency and Soft Cost Contingency available for Borrower’s then
current use as permitted by this Agreement) equals or exceeds the amount
necessary to pay for (i) all Hard Costs for work done and not theretofore paid
for or to be done in connection with the Completion of Initial Construction Work
in accordance with the Project Plans and Specifications based on “Lender’s
Estimate of Development Costs” (as defined below), and (ii) all Soft Costs and
other costs payable by Borrowers under this Agreement or otherwise in connection
with the Initial Construction Work and equipping of the Mortgaged Property until
Completion of the Initial Construction Work also based on Lender’s Estimate of
Development Costs, in each case based on the Development Budget (as modified to
reflect cost savings and/or reallocations to the extent permitted hereunder), or
(b) the amount left in the Development Fund (including, the

 

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amounts in the Equity Account) does not equal or exceed the foregoing described
respective amount or amounts, but Borrower has deposited into the Development
Fund cash sufficient to bring the Loan “in balance”. In the event that the Loan
is not “in balance” prior to the full disbursement of the funds held in the
Development Fund, all additional funds deposited by Borrower into the
Development will be disbursed by Lender for Hard Costs and Soft Costs in
accordance with the Development Budget (as it may be modified by Lender’s
Estimate of Development Costs) prior to any further Development Advance.
Borrower agrees that Lender shall have the right to make from time to time in
Lender’s discretion an estimate of all Hard Costs and Soft Costs which estimate
is herein sometimes called “Lender’s Estimate of Development Costs.” In the
first instance, Lender’s Estimate of Development Cost shall be made upon the
basis of the Initial Construction Contracts, executed Subcontracts and purchase
orders, or, in those instances where Subcontracts or purchase orders have not
yet been let, upon the basis of either written bids with responsible
contractors, tradesmen and material suppliers obtained by Borrower and approved
by Lender, or Lender’s estimate of such costs where written bids have not been
obtained, and shall take into account all Soft Costs and other costs and
expenses to be paid by Borrower hereunder through the Completion of the Initial
Construction Work, with such allowances for reserves and contingencies as Lender
shall deem appropriate in its discretion. Thereafter, Lender’s Estimate of
Development Costs will take into account, in addition to the Initial
Construction Contract, Subcontracts and purchase orders, and other
considerations which Lender, in its sole judgment, deems relevant or likely to
have an impact upon all Hard Costs and Soft Costs. Borrower agrees that if for
any reason the amount of funds in the Development Fund shall at any time be or
become insufficient for the purposes described herein and subject to the
provisions of Section 3.6, regardless of how such condition may have been
brought about, upon ten (10) Business Days’ written notice to Borrower during
which time Borrower shall have the right to bring the Loan into balance, and
upon Borrower’s failure to bring the Loan into balance, it shall be an Event of
Default hereunder and, in addition to any other rights or remedies of Lender
hereunder or at law or in equity, Lender shall not be obligated to disburse the
Loan during the period of such insufficiency. Borrower agrees that the
determination of Lender’s Estimate of Development Costs and the determination of
whether the Loan is “in balance” shall be done on a line item basis and not on a
gross or aggregate funds available basis and be subject to the provisions of
Section 3.6, it being understood that all limitations on reallocation of line
items as set forth herein shall be observed and taken into account when making
Lender’s Estimate of Development Costs and determining whether the Loan is “in
balance.”

(E) Notwithstanding the foregoing or anything in this Agreement which is or may
appear to be to the contrary, to the extent Lender does not receive all
deliveries and approvals it is entitled to receive (with and without request)
for all of the Initial Construction Work and all Project Improvements
contemplated by the Development Budget as a condition to Lender’s disbursement
of funds from the Development Account pursuant to Sections 3.1(u), (w), (x),
(y), (z), (AA) and (BB) above (collectively the “Initial Construction
Conditions”) and Lender disburses funds from the Development Account, then
Lender shall have no further obligation to make one or more subsequent
disbursements of funds from the Development Account for any portion of the
Initial Construction Work (or other development costs related thereto) for which
such Initial Construction Conditions have not been satisfied. To the extent
Lender has received and approved the Initial Construction Conditions applicable
to a portion of the Initial Construction Work (or other development costs
related thereto) and all other conditions and

 

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requirements applicable thereto are satisfied, Lender shall make disbursements
of funds from the Development Account for such purposes.

3.3 Advances from Development Fund. Lender shall, if no Event of Default exists,
make each Development Advance within ten (10) Business Days following the
satisfaction, in the sole discretion of Lender, of each of the following
conditions:

(A) Lender shall have no obligation to make any Development Advance for Hard
Costs after the Required Completion Date.

(B) No Development Advance except the final Development Advance shall be made in
an amount of less than $100,000.

(C) At all times prior to and including the date all Advances made for
Completion of Construction have been fully funded, Borrower shall submit a
Request for Advance no more frequently than once per month with no more than 45
days between each request. Lender shall make no more than one Development
Advance per month.

(D) Borrower shall have submitted to Lender an executed completed Request for
Advance.

(E) Borrower shall have delivered to Lender all Required Lien Waivers deemed
necessary by Lender and the Title Company for services and materials provided in
connection with the Initial Construction Work through the date of the applicable
Development Advance; provided, however, that for all non-final payments Lender
shall only require then current Required Lien Waivers from all parties Borrower
or Guarantor have directly contracted with (“Direct Contractors”) and only
require those Required Lien Waivers from any Person who is a sub-consultant,
sub-contractor, or otherwise directly or indirectly contracting with a Direct
Contractor applicable to the immediately prior Request for Advance.

(F) With respect to the Development Advances, the Initial Borrower’s Architect
involved with such advance shall have certified to Lender in form satisfactory
to Lender that the requested Development Advance is for the payment of
construction costs incurred in connection with Initial Construction Work which
has been completed in accordance with the Project Plans and Specifications as
set forth in the Request for Advance.

(G) Borrower shall provide Lender with true and correct copies of all invoices
and bills for Hard Costs and Soft Costs incurred in connection with the then
completed Initial Construction Work, and there shall be no material deviation
from the Initial Construction Budget (except with Lender’s prior written
approval) in connection with the Initial Construction Work which has been
completed to date. Specifically, no advance (or advances, as appropriate) for a
specific line item in the Initial Construction Budget, including any retainage
for said line item, will exceed the amount of said line item in the Initial
Construction Budget subject to changes based upon Permitted Change Orders. For
purposes of this Section 3.3 and except as set forth in subsection 3.3(v) below
for Stored Materials, costs shall be deemed to have been “incurred” by a
Borrower at the following times: (i) Hard Costs - when the labor has been
performed or the materials have been supplied and incorporated into the
Property, payment therefore has been requested by the contractor or supplier
thereof, and such contractor or supplier is entitled thereto;

 

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and (ii) Soft Costs – when such costs are due and payable (or have been paid by
Borrower) and the services relating thereto have been rendered or the value
thereof has been received by Borrower.

(H) All Hard Costs and Soft Costs are to be certified by Borrower in accordance
with the Request for Advance and verified by Lender or to the extent Lender has
retained a separate Lender’s Consultant, Lender’s Consultant as having been
incurred. Verification of the monthly progress of the Initial Construction Work,
the Hard Costs and the Soft Costs which have been incurred by Borrower, and the
estimated total Hard Costs and Soft Costs of Completion of Initial Construction
Work may be made by Lender consistent with the Development Budget.

(I) The funds in the Development Fund (excluding the retainage provided for in
the next paragraph) shall be sufficient, in Lender’s sole discretion, to pay all
remaining Hard Costs and Soft Costs in connection with the Completion of Initial
Construction Work, including the payment of all sums owed to Lender prior to the
Completion of Initial Construction Work or Borrower shall have deposited with
Lender pursuant to Section 3.2(D) such additional funds as Lender deems
necessary, together with said amounts then held in the Development Fund, to pay
all remaining Hard Costs and Soft Costs in connection with the Completion of
Initial Construction Work.

(J) Except as provided below, Borrower shall not request in a progress payment,
but rather withhold payment from the Initial Contractors as evidenced in each
progress payment, the amount of 10% of the ‘Contract Sum’ eligible for payment
(the “Retainage”) to each Initial Contractor until such Contractor’s portion of
the Initial Construction Work is Completed. To the extent permitted by an
Initial Construction Contract, Borrower may request in writing that Lender
approve and Lender agrees to approve (subject to the remaining requirements for
such Advance) any of the following actions following completion of the
applicable requirements set forth below.

(1) Upon or following the Initial Construction Work of any Subcontractor being
fifty percent (50%) complete, no further Retainage being withheld on payments
made to Initial Contractor for such Subcontractor’s work performed following
such fifty percent (50%) (or greater as requested) completion of such
Subcontractor’s work.

(2) Upon or following all Initial Construction Work being fifty percent
(50%) complete, no further Retainage being withheld on payments made to Initial
Contractor for Initial Contractor’s general conditions items and fee, as
applicable, which apply to Initial Construction Work following such fifty
percent (50%) (or greater, as requested) completion of all Initial Construction
Work.

(3) Upon the final Completion of any Subcontractor’s portion of Initial
Construction Work, the release of all or a portion of the Retainage owed to such
Subcontractor; provided that if the request is for a release of all such
Retainage owed to such Subcontractor, then such request must be accompanied by
all lien waivers and other deliveries required for final payment under both the
applicable Subcontract and Section 3.5 below.

 

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(K) Lender may make Development Advances (i) payable directly to Borrower,
(ii) payable jointly to Borrower and to the applicable contractor or supplier.
Lender may elect to make all Development Advances through a construction or
other escrow agreement with the Title Company.

(L) Borrower shall be deemed to have remade, as of the date of each advance,
each and every representation and warranty made by Borrower in this Agreement
and in every other Loan Document, and every such representation and warranty
shall be true and correct at the time of each Development Advance.

(M) So long as any portion of the Loan proceeds are being disbursed from the
Development Fund, Borrower shall have delivered to Lender an endorsement to the
Title Policy, which endorsement: (i) insures Lender against filed and unfilled
mechanics’ liens; and (ii) insures that, since the date of the policy or the
most recent endorsement to the policy, there has been no change in the status of
title to the Premises (except for the lien of unpaid taxes, not yet due and
payable) and thereafter, so long as and to the extent funds are disbursed from
the Development Fund which are not Loan proceeds, evidence satisfactory to
Lender that no liens have been filed or are pending against the Mortgaged
Property.

(N) With respect to Hard Costs, Borrower shall have provided Lender with
(i) evidence satisfactory to Lender that the Construction Work complies with all
building, zoning and other Legal Requirements, (ii) all necessary Licenses and
Permits, approvals and consents required for the use, occupancy and operation of
the Land and Improvements, as altered by the Initial Construction Work as
applicable to the then current state of the Initial Construction Work, and
(iii) evidence satisfactory to Lender that all Initial Construction Work
completed on the date of the Request for Advance has been inspected and approved
by each Governmental Authority and by each other person or entity (including any
tenants) having the right to inspect and approve the Initial Construction Work
and (iv) all other elements required for the Initial Construction Work to
achieve Construction Legal Compliance through and including the date of the
requested Development Advance.

(O) Borrower shall have provided Lender with such other information and material
relating to the Initial Construction Work as Lender reasonably requests.

(P) With respect to Hard Costs, Lender shall have received a written report from
Lender’s Construction Consultant with respect to the applicable Request for
Advance stating: (i) that, in the opinion of Lender’s Construction Consultant,
all Change Orders and modifications or amendments to the Plans and
Specifications, any Initial Construction Budget or any Initial Construction
Schedule required hereby to be approved by Lender are satisfactory to Lender’s
Construction Consultant; (ii) that, in the opinion of Lender’s Construction
Consultant, the Initial Construction Work theretofore completed has been
completed in accordance with the Project Plans and Specifications; (iii) what
percentage of the Initial Construction Work, in the aggregate, has been
completed as of the date of the applicable Request for Advance; (iv) the extent
to which, if any, the undisbursed Development Advances for the Hard Costs and
Soft Costs not yet incurred but necessary for Completion of Initial Construction
Work are not sufficient to permit Completion of Initial Construction Work in
accordance with the Initial Construction Schedule;

 

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and (v) whether Completion of Initial Construction Work can, in Lender’s
Construction Consultant’s opinion, be completed prior to the Required Completion
Date.

(Q) No Change Orders, other than Permitted Change Orders, shall be made to any
Initial Construction Contract, the Project Plans and Specifications or the
Development Budget without obtaining Lender’s prior written consent to such
Change Order. All Change Orders shall be made in accordance with all Legal
Requirements. Borrower shall promptly notify Lender of any anticipated changes
in line items of the Development Budget, which if approved, would result in a
net increase in the total amount of the Development Budget. Any agreement, other
than in connection with a Permitted Change Order, which causes a net increase in
the Development Budget shall require Lender’s prior written consent.

(R) Borrower shall have satisfied such other conditions to any Development
Advance which Lender may reasonably require or impose.

(S) No stop notice (whether bonded or not) shall have been served upon or
otherwise delivered to Lender in connection with the Initial Construction Work
or otherwise in connection with the Loan, unless Borrowers shall have (a) paid
and discharged the same using funds other than Loan funds, (b) effected the
release thereof by delivering to Lender a surety bond complying with the
requirements of applicable Legal Requirements for such release, or (c) taken
such other actions as Lender may approve in writing to release Lender from any
obligation or liability with respect to such stop notice.

(T) No claim of lien, notice and claim of mechanic’s lien or other similar
document or instrument shall have been recorded against the Mortgaged Property
or any portion thereof, unless Borrower shall have (a) paid and discharged the
same, (b) effected the release thereof by delivering to Lender a surety bond
complying with the requirements of applicable Legal Requirements for such
release, (c) delivered to Lender an endorsement to the Title Policy insuring
over such lien, notice, claim or similar document or instrument in form
customarily used and approved by Lender, or (d) taken such other actions as
Lender may approve in writing to release Lender from any obligation or liability
with respect to such claim of lien, notice and claim of mechanic’s lien, or
other similar document or instrument.

(U) Lender shall be satisfied, based on Lender’s Consultant’s Reports, that the
Initial Construction Work is progressing satisfactorily in conformance with all
applicable Legal Requirements and with the requirements set forth in this
Agreement.

(V) Disbursements for materials stored offsite in the United States of America
or delivered to the site but not yet incorporated into the Project (“Stored
Materials”) shall be subject to Lender’s having received satisfactory evidence
that the following are true:

(i) The Stored Materials are ready for installation and appropriate for purchase
in accordance with the Development Schedule, unless otherwise approved by
Lender;

(ii) The Stored Materials are stored either (1) at the Project site, (2) in a
bonded public warehouse or (3) any other facility or location acceptable to
Lender in its

 

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reasonable discretion, and such Stored Materials are protected in a manner
reasonably acceptable to Lender against theft or damage;

(iii) Ownership of the Stored Materials for which Lender has previously
disbursed funds has vested in Borrower free of all security interests except the
liens evidenced by the Loan Documents and no other Person has asserted that it
has any rights to or interest in such Stored Materials;

(iv) Borrower has caused the Initial Contractor and any other Person that (1) is
not a warehouseman (as such term is defined in Section 7-102 of the Uniform
Commercial Code) and (2) possesses, holds or controls access to any Stored
Materials, to execute and deliver to Lender a bailment letter in the form of
Exhibit G;

(v) Borrower has caused any warehouseman (as such term is defined in
Section 7-102 of the Uniform Commercial Code) that possesses, holds or controls
access to any Stored Materials to execute and deliver to Lender (1) a bailment
letter in the form of Exhibit G and (2) a nonnegotiable warehouse receipt
covering the Stored Materials in its possession or under its control in a form
sufficient to enable Lender to have a perfected security interest in the Stored
Materials pursuant to the requirements set forth in Section 9-312(d)(l) of the
Uniform Commercial Code;

(vi) If reasonably requested by Lender, Borrower has provided Lender with the
results of Uniform Commercial Code searches (from all appropriate Uniform
Commercial Code offices) on Initial Contractor or any other bailee of Stored
Materials showing no liens or other security interests affecting such Stored
Materials;

(vii) Without limiting any of the foregoing provisions of this Section 3.3(V),
Lender has a perfected, first-priority security interest in the Stored Materials
for which Lender or any other Person has previously disbursed funds;

(viii) The Stored Materials are covered by insurance as required by Section 5.4
and names Lender as a loss payee;

(ix) The materialmen have delivered lien waivers and invoices for the full
amount of the Stored Materials for which Lender or any other Person has
previously disbursed funds; and

(x) Initial Borrower’s Architect, if any, has provided a certification in form
and substance satisfactory to Lender verifying the stored materials are in
conformance with the Project Plans and Specifications.

The foregoing provisions are not intended to apply to disbursements from the
Development Fund which are made for the purpose of making customary deposits
which are required by certain vendors with respect to purchase orders of
construction materials, so long as the same have been approved by Lender, which
approval shall not be unreasonably withheld; provided, however, that if and when
any materials are paid for in full by Borrower the provisions of this
Section 3.3(V) above shall apply.

 

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(W) Prior to each Development Advance, Borrower will have obtained and delivered
to Lender all applicable Licenses and Permits relating to the construction of
the Improvements comprising the Project in order to permit Initial Construction
Work to continue in accordance with the Initial Construction Schedule, subject
to Force Majeure, including evidence satisfactory to Lender that (i) the Initial
Construction Work may be completed in accordance with applicable Legal
Requirements and that Borrower is in full compliance therewith, and (ii) the
Project Plans and Specifications required to continue construction in accordance
with the Initial Construction Schedule have been approved by all Governmental
Authorities.

3.4 Conditions to Final Development Advance. Lender shall make the final
disbursement from the Development Fund for costs of the Initial Construction
Work for each Initial Construction Contract provided that all of the following
conditions have been complied with and satisfied, and Borrower agrees to satisfy
the following conditions on or before the Required Completion Date, in each case
for such Initial Construction Work included in such Initial Construction
Contract:

(i) The Initial Construction Work shall be Substantially Completed in accordance
with the Project Plans and Specifications, and except for the amount then being
requested and retainage, all costs and expenses thereof have been paid in full.

(ii) Borrower has furnished Lender with final lien waivers and sworn statements
as to the Initial Construction Work from all Initial Contractors, Subcontractors
including material suppliers who have provided materials, labor or both, with
respect to the Initial Construction Work.

(iii) If then prepared and finalized Borrower shall have delivered to Lender two
(2) final and complete sets of the final as-built Project Plans and
Specifications, in form satisfactory to Lender, including operations and
maintenance manuals, warranties and other applicable close-out documentation,
showing all changes from the Project Plans and Specifications approved by Lender
as of the date thereof; provided, however, that if the foregoing are not
completed as of the date of the final disbursement, Borrower shall have an
additional ninety (90) days to deliver the same to Lender.

(iv) Borrower shall have furnished Lender with: (i) a final unconditional
certificate of occupancy for the Mortgaged Property from the applicable
Governmental Authority having jurisdiction thereof, or a temporary certificate
of occupancy for the Mortgaged Property as to which such final certificate of
occupancy has not been issued, which temporary certificate of occupancy is
subject only to conditions which are customary for similar projects in the same
geographic location and is otherwise satisfactory to Lender in its sole
discretion; and (ii) such other certificates, approvals, Licenses and Permits of
each Governmental Authority required (or customarily procured) concerning the
then existing construction, use, occupancy and operation of the Mortgaged
Property and that the Mortgaged Property, as renovated, is in compliance with
all applicable Legal Requirements of all applicable Governmental Authorities,
including zoning regulations and building restrictions, environmental
requirements, occupational safety and health requirements and similar laws,
ordinances and regulations.

 

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(v) There shall be no governmental actions, proceedings or investigations
pending or overtly threatened (evidencing an intent to sue or to commence such a
proceeding or investigation) against or filed by Borrower which might: (i) have
a material adverse effect on the Mortgaged Property or the value of the
Mortgaged Property or (ii) adversely impair Lender’s security for full and
timely performance of all obligations hereunder.

(vi) The Mortgaged Property shall be undamaged by fire or other cause (unless
Restoration is taking place as permitted by and pursuant to the terms and
conditions of this Agreement) and there shall be no material condemnation or
eminent domain proceedings pending or overtly threatened (evidencing an intent
to sue or to commence such a proceeding or investigation) against the Mortgaged
Property.

(vii) Borrower shall have furnished to Lender a certificate from Borrower
currently dated, certifying that: (i) no notices from any Governmental Authority
of any claimed violations of ordinances arising from the construction or
operation of the Mortgaged Property which have not been cured were served upon
Borrower or, to Borrower’s best knowledge, any contractor or subcontractor,
including any Initial Contractors or any Subcontractor, or their respective
agents or representatives and (ii) Borrower is not aware of any circumstances
which could give rise to the issuance of any such notice of claimed violation.

(viii) Lender shall have received a certificate from Lender’s Construction
Consultant that the Initial Construction Work has been Substantially Completed
in accordance with the Project Plans and Specifications.

(ix) All personal property contemplated under the Development Budget and the
Project Plans and Specifications to be incorporated into or installed in the
Mortgaged Property by the date of the final Development Advance shall have been
incorporated or installed free and clear of all liens and security interests
other than the Permitted Exceptions.

(x) Lender shall have received six (6) final as-built surveys in form
satisfactory to Lender, each of which complies with all of Lender’s survey
requirements.

(xi) Lender shall have received a final and comprehensive endorsement to the
Title Policy which deletes the “pending disbursements” paragraph, if any, in the
Title Policy.

(xii) All other requirements of this Agreement for disbursement of Loan proceeds
shall have been satisfied.

3.5 Performance of Construction.

(A) Construction. Borrower shall: (i) cause Completion of Initial Construction
Work in a good and workmanlike manner and Construction Legal Compliance not
later than the Required Completion Date; (ii) commence the Initial Construction
Work within ten (10) days following the Closing Date and pursue the Initial
Construction Work diligently to completion;

 

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(iii) after commencement of the Initial Construction Work, not permit cessation
of said Initial Construction Work for a period in excess of ten (10) continuous
Business Days or more than thirty (30) calendar days in the aggregate, provided,
however, that following a cessation of said Initial Construction Work for either
such period, if, within thirty (30) days of Lender’s written demand Borrower
commences the Initial Construction Work, such period(s) shall be deemed extended
until such Initial Construction Work is re-commenced but in no event beyond
thirty (30) days of Lender’s written demand, without the prior written consent
of Lender; (iv) cause the progress of the Initial Construction Work to adhere,
without deviation, with the Initial Construction Schedule; (v) cause Completion
of Initial Construction Work entirely on the Land and so as not to encroach upon
any easement, right-of-way or land of others, and so as to not violate any
set-back lines, applicable public or private use restrictions, other
restrictions or regulations, any Legal Requirements or any other requirement of
any Governmental Authority; and (vi) cause all design and construction work
associated with the Initial Construction Work to be performed in accordance with
all Construction Legal Requirements and only by Initial Construction Contractors
which are approved by Lender and which are fully licensed in the state where the
Mortgaged Property are being constructed.

(B) Compliance with Laws. Borrower shall cause the Initial Construction Work to
be constructed in accordance with all applicable Legal Requirements and
otherwise be in Construction Legal Compliance at all times.

(C) Compliance with Plans. Subject to Section 3.6, Borrower shall not deviate
from any Initial Construction Budget and Project Plans and Specifications as
approved by Lender in any respect, or issue (accept or agree to) any Change
Orders, other than Permitted Change Orders, without the prior written consent of
Lender.

(D) Construction Contracts. Borrower shall perform faithfully all of its
obligations under the Initial Construction Contracts. Borrower shall not modify,
terminate or amend any Initial Construction Contract without first obtaining the
written approval of Lender, in its sole discretion.

(E) Compliance with Schedule. Borrower shall diligently perform the Initial
Construction Work using all commercially reasonable efforts in accordance with
the Initial Construction Schedule. Borrower, from time to time, may modify or
adjust individual line items within the Initial Construction Schedule to reflect
actual and projected conditions but in no event extend or delay the completion
dates for the following milestones without Lender’s written approval.

 

  (i) Infrastructure-Rough Mechanical, Electrical & Plumbing (MEP)

 

  (ii) Infrastructure Building Envelope

 

  (iii) Substantial Completion/Temporary Certificate of Occupancy (TCO)

 

  (iv) Final Completion/Final Certificate of Occupancy

(F) Construction Draw Schedule. Without excusing Borrower’s noncompliance with
this Agreement, Borrower shall provide to Lender, for Lender’s review and
approval, an

 

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updated Initial Construction Draw Schedule, concurrently with each modification
of any Initial Construction Budget or any Initial Construction Schedule
permitted under this Agreement. Each such update shall be accompanied by a
written narrative explanation setting forth, in reasonable detail, the
deviations, if any, set forth in such update to the such Initial Construction
Draw Schedule, as previously updated, and the reason(s) for such deviations.
Each such update shall be accompanied by a certificate from the Borrower to the
effect that all deviations as reflected in such updated Initial Construction
Draw Schedule are permitted under this Agreement or have been expressly
consented to by Lender.

3.6 Contingency; Cost Reallocation.

(A) The Development Budget shall include a “contingency” amount of not less than
$1,302,615.00 for Hard Costs (including contingency for the Initial Construction
Contract) (“Hard Cost Contingency”), and not less than $1,200,000.00 for Soft
Costs (“Soft Cost Contingency”) at Closing. From time to time, upon the request
of Borrower and subject to the approval of Lender, not to be unreasonably
withheld, the Hard Cost Contingency and Soft Cost Contingency may each be used
on a pro rata basis according to the percentage of total Hard Costs expended
(excluding land costs) to pay for other Hard Costs or Soft Costs, as applicable;
and, (b) the Soft Cost Contingency may be used on a pro rata basis according to
the percentage of total Hard Costs expended (excluding hard costs) to be
reallocated to the Hard Cost Contingency. Upon Completion of all Initial
Construction Work, any funds remaining in the Hard Cost Contingency line item
which are attributable, in Lender’s sole discretion, to verified Hard Costs
savings may be, at Borrower’s option, reallocated from the Hard Cost Contingency
to the Soft Cost Contingency.

(B) Any savings in line item costs contained on the summary page of the
Development Budget, as verified and determined by Lender in its reasonable
discretion, resulting from any change in the Project Plans and Specifications
approved by Lender or realized upon completion of a Development Budget line item
and thereby resulting in savings (“Completion Savings”) shall be reallocated to
the Hard Cost Contingency or to other such line item to “balance” the line item
(assuming such increase in the budgeted line item is not subject to a Change
Order to be funded by the Hard Costs Contingency) with Lender approval, not to
be unreasonably withheld.

(C) Any savings in any line item costs for Hard Costs contained on the summary
page of the Development Budget and up to an aggregate amount equal to the lesser
of (i) 5.0% of said line item or (ii) $500,000, as verified and determined by
Lender, resulting from any change in the Plans and Specifications or realized
upon Completion of a single line item and thereby resulting in savings may be
reallocated to another Hard Cost line item to “balance” the line item (assuming
such increase in the budgeted line item is not subject to a Change Order to be
funded by the Hard Cost Contingency). Additionally, any savings in line item
costs for Soft Costs contained on the summary page of the Development Budget and
up to an aggregate amount equal to the lesser of (i) 5.0% of said line tem or
(ii) $200,000, as verified and determined by Lender, resulting from any change
in the Plans and Specifications or realized upon Completion of a single line
item and thereby resulting in savings may be reallocated to another Soft Cost
line item to “balance” the line item (assuming such increase in the budgeted
line item is not subject to a Change Order to be funded by the Soft Costs
contingency); provided, however, (i) there shall

 

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be no reallocation of the line items for Loan interest or sales commissions and
(ii) any reallocation of line items in excess of the greater of (i) 5.0% of said
line item and (ii) $500,000 in the case of Hard Costs or $200,000 in the case of
Soft Costs, shall require prior approval of Lender. Additional direct or
indirect line item cost savings that have been allocated to their respective
contingency line items may be available and reallocated by Borrower to another
cost line item and such amounts will not be subject to the pro rata allocation
set forth in the preceding sentence.

3.7 Other Remedies of Lender. Upon the occurrence and continuance of an Event of
Default, in addition to any other remedies available to Lender by the terms of
this Agreement or any other Loan Document or by law, Lender may at its sole
discretion: (a) cause Completion of Initial Construction Work in accordance with
the Project Plans and Specifications (with such changes as Lender shall deem
appropriate), all at the risk, cost and expense of Borrower; (b) discontinue at
any time the Construction Work; (c) engage builders, contractors, engineers,
architects and others for the purpose of furnishing labor, material and
equipment in connection with the Initial Construction Work, which personnel may,
but need not, be the same as those engaged by Borrower; (d) pay, compromise or
settle any and all bills or claims incurred in connection with the Initial
Construction Work; (e) exercise any or any or all of its rights under the
applicable Loan Documents; (f) take or refrain from taking such action with
respect to the Initial Construction Work as Lender may from time to time
determine; and (g) through an advance of Loan proceeds, make payments due for
the cost of Initial Construction Work directly to any Initial Contractor, any
Subcontractor, including any material supplier or any vendor of Fixtures and
Personality, if any, owned by Borrower. All such action shall be at Borrower’s
sole cost and expense, such sums being secured by the Mortgage.

3.8 Protection Against Liens. Borrower shall take all actions reasonably
required to prevent the assertion of claims of lien against the Mortgaged
Property. In the event that any claim of lien is asserted against the Mortgaged
Property by any person furnishing labor or materials to the Initial Construction
Work, Borrower shall immediately give notice of the same to Lender and shall,
promptly and in any event within ten (10) days after Lender’s demand, (a) pay
and discharge the same, (b) effect the release thereof by delivering to Lender a
surety bond complying with the requirement of applicable Legal Requirements for
such release, (c) with respect to mechanic’s liens, deliver to Lender an
endorsement to the Title Policy insuring over such lien in form customarily used
and approved by Lender, or (d) take such other action as Lender may approve in
writing to release Lender from any obligation or liability with respect to such
stop notice or claim.

3.9 Nonliability of Lender. Borrower acknowledges and agrees that:

(A) The relationship between Borrower and Lender is and shall remain solely that
of borrower and lender, and Lender neither undertakes nor assumes any
responsibility to review, inspect, supervise, approve or inform Borrower of any
matter in connection with any of the Initial Construction Work, including
matters relating to: (i) the Project Plans and Specifications, (ii) architects,
contractors, subcontractors and materialmen, or the workmanship of or materials
used by any of them, or (iii) the progress of any of the Initial Construction
Work and its conformity with the Project Plans and Specifications; and Borrower
shall rely entirely on its own judgment with respect to such matters and
acknowledges that any review, inspection,

 

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supervision, approval or information supplied to Borrower by Lender in
connection with such matters is solely for the protection of Lender and that
neither Borrower nor any third party is entitled to rely on it;

(B) Notwithstanding any other provision of any Loan Document: (i) Lender is not
a partner, joint venturer, alter-ego, manager, controlling person or other
business associate or participant of any kind of Borrower and Lender does not
intend to ever assume any such status; and (ii) Lender shall not be deemed
responsible for or a participant in any acts, omissions or decisions of
Borrower;

(C) Lender shall not be directly or indirectly liable or responsible for any
loss or injury of any kind to any person or property resulting from any
construction on, or occupancy or use of, the Mortgaged Property (except to the
extent proximately caused by Lender’s or Lender’s agent’s, servant’s, employee’s
or contractor’s negligence or willful misconduct), whether arising from: (i) any
defect in any building, grading, landscaping or other onsite or offsite
improvement; (ii) any act or omission of Borrower or any of Borrower’s agents,
employees, independent contractors, licensees or invitees; or (iii) any accident
on the Property or any fire or other casualty or hazard thereon; and

By accepting or approving anything required to be performed or given to Lender
under the Loan Documents, Lender shall not be deemed to have warranted or
represented the sufficiency or legal effect of the same, and no such acceptance
or approval shall constitute a warranty or representation by Lender to anyone.

SECTION 4

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender that, after giving effect to the
Loan, as of the Closing Date:

4.1 Organization, Powers, Qualification and Organization Chart. Borrower is a
limited liability company duly formed, validly existing and in good standing
under the laws of its state of formation. Borrower has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, and to enter into each Loan Document to
which it is a party and to perform the terms thereof. Guarantor is a
corporation, duly organized, validly existing and in good standing under the
laws of its state of formation and has all requisite power and authority to own
and operate its properties, to carry on its business as now conducted, and to
enter into each Loan Document to which it is a party and to perform the terms
thereof. Borrower’s U.S. taxpayer identification number is set forth on Schedule
4.1(A)-1. Borrower and Guarantor are each duly qualified and in good standing
wherever necessary to carry on its present business and operations. Guarantor
owns one hundred percent (100%) of the ownership interests in Borrower. The
organization chart attached hereto as Schedule 4.1(A)-2 correctly identifies
each Subsidiary, if any, of Borrower and each Person directly owning (and/or
indirectly owning five percent (5%) or more of) the ownership interests in
Borrower; provided that such organizational chart shall not identify any Person
owning, directly or in directly, any ownership interests of Guarantor. The
principal place of business and chief executive office of Borrower is set forth
on Schedule 4.1(A)-3. Borrower has filed in a

 

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timely manner all reports, documents and other materials required to be filed by
it with any Governmental Authorities and the information contained in each of
such filings is true, correct and complete in all respects). Borrower has
retained all records and documents required to be retained by it pursuant to any
law, ordinance, rule, regulation, order, policy, guideline or other requirement
of any Governmental Authority. Borrower has no Subsidiaries and has not made an
Investment in any Person.

4.2 Authorization of Borrowing; No Conflicts; Governmental Consents; Binding
Obligations and License and Security Interests of Loan Documents. Borrower has
the power and authority to incur the Obligations evidenced by the Note and other
Loan Documents to which it is a party, to execute and deliver the Loan Documents
to which it is a party and to perform its Obligations, to own the Mortgaged
Property and to continue its businesses and affairs as presently conducted.
Guarantor has the power and authority to execute and deliver the Guaranty, the
Environmental Indemnification Agreement and the other Loan Documents to which it
is a party. The incurring of the Obligations and the execution, delivery and
performance by Borrower and Guarantor of each of the Loan Documents to which
either is a party and the consummation of the transactions contemplated thereby
have been duly authorized by all necessary partnership, corporate or limited
liability company action, as the case may be. The incurring of the Obligations
and the execution, delivery and performance by Borrower and Guarantor of the
Loan Documents to which either is a party and the consummation of the
transactions contemplated thereby do not and will not: (1) violate any provision
of law applicable to Borrower, Guarantor or the Mortgaged Property, the
respective other Organizational Documents of, or applicable to, Borrower or
Guarantor, as the case may be, or any order, judgment or decree of any court or
other agency of government binding on Borrower or Guarantor or their respective
properties including the Mortgaged Property; (2) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any Material Contracts or any other agreement or document to which such
Person is a party or by which such Person or its property may be bound;
(3) result in or require the creation or imposition of any Lien upon the
Mortgaged Property or assets of Borrower or Guarantor (other than the Liens of
Lender); or (4) require any approval or consent of any Person under any Material
Contracts or any other agreement or document to which such Person is a party or
by which such Person or its property may be bound (except to the extent such
approvals or consents have been unconditionally obtained on or before the
Closing Date). The incurring of the Obligations, the execution, delivery and
performance by Borrower and Guarantor of the Loan Documents and the consummation
of the transactions contemplated thereby do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other Governmental Authority or regulatory
body (except to the extent unconditionally obtained on or before the Closing
Date). The Loan Documents, when executed and delivered by Borrower and
Guarantor, as applicable, will be the legally valid and binding obligations of
Borrower and Guarantor, as applicable, enforceable against Borrower and
Guarantor, subject to bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors’ rights generally and to the application
of general equitable principles in connection with the enforcement thereof. The
Mortgage, together with the Financing Statements to be filed in connection
therewith, create a valid, enforceable and perfected first priority lien and
security interest in the Mortgaged Property subject to no other interests, Liens
or encumbrances, other than the Permitted Encumbrances. Article 6 of this
Agreement creates a valid, enforceable and perfected first priority security
interest in the Reserve and Other Accounts Collateral.

 

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Borrower is a “registered organization” (as defined in the UCC) organized under
the laws of the State of Delaware.

4.3 Financial Statements. All financial statements concerning Borrower and
Guarantor which have been or will hereafter be furnished by Borrower and
Guarantor to Lender pursuant to this Agreement have been or will be prepared in
accordance with GAAP consistently applied (except as disclosed therein, to the
extent Lender approves such disclosure) and do or will, in all material
respects, present fairly the financial condition of the Persons covered thereby
as at the dates thereof and the results of their operations for the periods then
ended.

4.4 Indebtedness. As of the Closing Date, after giving effect to the
transactions contemplated hereby, Borrower does not have any Indebtedness except
for Permitted Indebtedness. All Expenses owing or accrued as of the Closing
Date, have been paid in full or have been reserved for by deposit into the
Reserves. No claim of any creditor of Borrower exists which would have a
Material Adverse Effect.

4.5 No Material Adverse Change. Since March 31, 2006, no event or change has
occurred that has caused or evidences, either individually or together with such
other events or changes, a Material Adverse Effect.

4.6 Title to Property; Liens; Zoning; Contracts; Condition of the Mortgaged
Property.

(A) Borrower has good and marketable fee simple title to the Land, the
Improvements and the other components of the Mortgaged Property, subject only to
the Permitted Encumbrances. Borrower owns all real and personal property
necessary for the operation of the Mortgaged Property subject only to the
Permitted Encumbrances. Except for the Permitted Encumbrances, the Mortgaged
Property is free and clear of Liens and other encumbrances. Except as otherwise
identified on Schedule 4.6(A), there are no outstanding Claims and all work,
services or materials the provision of which might ripen into a Claim have been
fully paid for. There are no assessments for improvements or other similar
outstanding charges or Impositions affecting the Mortgaged Property. No
Improvements lie outside the boundaries and building restriction lines of the
Land or encroach onto any easements to any extent (unless affirmatively insured
by the Title Policy), and no improvements on adjoining properties encroach upon
the Land to any extent which would materially impair the Mortgaged Property. The
Title Policy premium has been fully paid. Except for customary gap undertakings,
neither Borrower, nor, to Borrower’s knowledge, any other Person, has provided
any title indemnities (or analogous documentation) or deposits of cash or other
security to the title insurer to obtain the Title Policy. The Permitted
Encumbrances do not and will not materially interfere with the security intended
to be provided by the Mortgage, the use or operation of the Mortgaged Property
or the marketability or value of the Mortgaged Property. Borrower will preserve
its right, title and interest in and to the Mortgaged Property for so long as
the Obligations remain outstanding and will warrant and defend same and the
validity and priority of the Mortgage and the Liens arising pursuant to the Loan
Documents from and against any and all claims whatsoever other than the
Permitted Encumbrances.

(B) The Mortgaged Property is zoned for use as a biopharmaceutical manufacturing
facility with related office and lab facilities, which zoning designation is
unconditional, is in full

 

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force and effect, and is beyond all applicable appeal periods. Borrower is not
in violation of, and, the Mortgaged Property is in full compliance with all
applicable zoning, subdivision, land use and other Legal Requirements. No legal
proceedings are pending or, to Borrower’s knowledge threatened, with respect to
the compliance of the Mortgaged Property with Legal Requirements. Neither the
zoning nor any other right to construct, use or operate the Mortgaged Property
is in any way dependent upon or related to any real estate other than the
Mortgaged Property and validly created, existing appurtenant perpetual easements
insured in the Title Policy or use of public rights of way. In the event that
all or any part of the Improvements are destroyed or damaged, said Improvements
can be legally reconstructed to their condition prior to such damage or
destruction, and thereafter exist for the same use without violating any zoning
or other Legal Requirements applicable thereto and without the necessity of
obtaining any variances or special permits. The Mortgaged Property contains not
less than 119 parking spaces, which is enough permanent parking spaces to
satisfy all requirements imposed by applicable Legal Requirements with respect
to parking. All licenses, permits and other Proprietary Rights necessary to
operate the Mortgaged Property as it is currently operated are in full force and
effect including all water permits and approvals. Borrower has not received any
written notice of any violation of any such licenses, permits, authorizations,
registrations or approvals that materially impair the value of the Mortgaged
Property for which such notice was given or which would affect the use or
operation of the Mortgaged Property in any material respect, which noticed
violation remains uncured.

(C) Borrower has provided Lender with true and complete copies of all Material
Contracts, all of which are specifically listed on Schedule 4.6(C) hereof, other
than the Permitted Encumbrances. Except for the Loan Documents and as set forth
on Schedule 4.6(C), Borrower is not a party to and neither it nor the Mortgaged
Property is bound by any material agreement, document or instrument which is
binding upon the Mortgaged Property other than the Loan Documents, the Permitted
Encumbrances, the other Material Contracts, if any, and such party’s
organizational documents, true, correct and complete copies of which have been
delivered to Lender. Except for the Loan Documents and the Material Contracts,
neither Borrower nor Guarantor are parties to or bound by, nor is any of their
respective property subject to or bound by, any contract or other agreement
which restricts its ability to conduct its business at the Mortgaged Property in
the ordinary course or, either individually or in the aggregate, has a Material
Adverse Effect or could reasonably be expected to have a Material Adverse
Effect. Borrower and Guarantor are not in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any Material Contract of any such Person which could have a Material Adverse
Effect. No Default or Event of Default exists.

(D) All of the Improvements are in good condition and repair. To Borrower’s
knowledge, except as disclosed in the Physical Condition Report, there are no
latent or patent structural or other significant defects or deficiencies in the
Improvements or Equipment, Fixtures and Personalty. Municipal or private water
supply, storm and sanitary sewers, and electrical, gas and telephone facilities
are available to the Mortgaged Property to the boundary lines of the Mortgaged
Property through publicly dedicated streets or highways or perpetual appurtenant
easements insured on the Title Policy as appurtenant easements, are sufficient
to meet the reasonable needs of the Mortgaged Property as now used or as
otherwise presently contemplated to be used, and are connected to, and is in
full unimpaired operation with respect to the Improvements and no other utility
facilities are necessary to meet the reasonable needs of the

 

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Mortgaged Property as now used. To Borrower’s knowledge, the design and as-built
conditions of the Mortgaged Property are such that surface and storm water does
not accumulate on the Mortgaged Property and does not drain from the Mortgaged
Property across land of adjacent property owners or others in any manner which
would have a Material Adverse Effect or which require any approvals or easements
not already obtained. Except as set forth on Schedule 4.6(D) or on the plat of
survey delivered to Lender, no part of the Mortgaged Property is within a flood
plain or in a flood hazard area as currently shown on the most recent Flood
Hazard Boundary Maps prepared by the Department of Housing and Urban Development
and (except to the extent validly created and existing perpetual appurtenant
easements insured in the Title Policy have been created therefor) none of the
Improvements create encroachments over, across or upon any of the Mortgaged
Property’s boundary lines, rights of way or easements, and no building or other
improvements on adjoining land create such an encroachment other than as shown
on the survey delivered pursuant to Section 3.1(L). All irrigation lines
servicing the Mortgaged Property are entirely located on the Mortgaged Property
or are located on adjacent property pursuant to validly created and existing
perpetual appurtenant easements insured as appurtenant easements in the Title
Policy. The Land and Improvements have legally adequate contiguous rights of
access to public ways. All roads necessary for the full utilization of the Land
and Improvements for their current purpose have been completed and dedicated to
public use and accepted by all Governmental Authorities. No offsite improvements
are necessary or used for the ownership, use or operation of the Mortgaged
Property, other than public utilities. The Improvements, the Land, the
Equipment, Fixtures and Personalty and the Inventory located on the Land
constitutes all of the real property, equipment, fixtures and other tangible
property currently owned or leased by Borrower or used in the operation of the
Mortgaged Property and the Equipment, Fixtures and Personalty owned by the
Borrower are sufficient to own, operate and use the Land and Improvements as
currently operated. Except as identified in the Permitted Encumbrances, Borrower
has not entered into any agreement or option, and is not otherwise bound, to
sell the Mortgaged Property (or any part thereof). Borrower has not entered into
any agreement or option, and is not otherwise bound, to acquire any additional
real estate or Investments. As of the date hereof, no portion of the
Improvements constituting part of the Mortgaged Property or on the Land has been
materially damaged, destroyed or injured by fire or other casualty which has not
been fully restored.

4.7 Litigation. Except as set forth on Schedule 4.7, there are no judgments
outstanding against Borrower or Guarantor or are binding upon the Mortgaged
Property or any property of, Borrower or Guarantor, nor is there any litigation,
governmental investigation or arbitration pending or, to Borrower’s knowledge
and to the extent having a Material Adverse Effect, threatened against Borrower
or Guarantor. The judgments, litigation, investigations and arbitrations set
forth on Schedule 4.7 will not result, if adversely determined, and could not
reasonably be expected to result, either individually or in the aggregate, in
any Material Adverse Effect and do not relate to and will not affect the
consummation of the transactions contemplated hereby. No petition in bankruptcy,
whether voluntary or involuntary, or assignment for the benefit of creditors, or
any other action involving debtors’ and creditors’ rights has ever been filed
under the laws of the United States of America or any state thereof, or
threatened, by or against, Borrower or Guarantor. Except as set forth on
Schedule 4.7, there are no mechanics’ or materialmen’s liens, alienable bills or
other claims constituting or that may constitute a Lien on the Mortgaged
Property or any part thereof, and no work for which any such Lien could be
asserted has been performed which has not been fully paid for. Borrower has not
received any

 

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notice from any governmental or quasi-governmental body or agency or from any
person or entity with respect to and Borrower does not know of any actual or
threatened taking of the Land or Improvements, or any portion thereof, for any
public or quasi-public propose or of any moratorium which may affect the use,
operation or ownership of the Mortgaged Property.

4.8 Payment of Taxes. All tax returns and reports of Borrower and Guarantor
required to be filed by such Persons have been timely filed, and all taxes,
assessments, fees and other governmental charges upon such Person and upon the
Mortgaged Property, assets, income and franchises which are due and payable or
which have been levied, imposed or assessed have been paid in full. To
Borrower’s knowledge, no tax returns of Borrower or Guarantor is under audit. No
tax liens have been filed and, to Borrower’s knowledge no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves on
the books of Borrower and Guarantor in respect of any taxes or other
governmental charges are in accordance with GAAP. Except as described in
Schedule 4.8, Borrower and Guarantor have not given or been requested to give
waivers or extensions (or is or would be subject to a waiver or extension given
by any other Person) of any statute of limitations relating to the payment of
taxes of Borrower and Guarantor or for which Borrower and Guarantor may be
liable. All taxes that Borrower and Guarantor is or was required by Legal
Requirements to withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the applicable Governmental Authority.
All tax returns filed by (or that include on a consolidated basis) Borrower and
Guarantor are true, correct and complete. There is no tax sharing agreement that
will require any payment by Borrower and Guarantor after the date of this
Agreement. Borrower is taxed as a partnership for all federal and state income
(or analogous) tax purposes. The Borrower does not intend to treat the Loan and
related transactions hereunder as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4). In the event the Borrower
determines to take any action inconsistent with the previous sentence, it will
promptly notify the Lender thereof. If the Borrower so notifies Lender, the
Borrower acknowledges that Lender may treat the Loan as part of a transaction
that is subject to Treasury Regulation Section 301.6112-1, and that Lender may
maintain any lists and other records required by such Treasury Regulation.

4.9 Governmental Regulation; Margin Loan. Borrower and Guarantor are not, nor
after giving effect to the Loan, will be, subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the Investment
Company Act of 1940 or to any federal or state statute or regulation limiting
its ability to incur indebtedness for borrowed money. Borrower shall use the
proceeds of the Loan only for the purposes set forth in this Agreement and
consistent with all applicable laws, statutes, rules and regulations. No portion
of the proceeds of the Loan shall be used by Borrower in any manner that might
cause the borrowing or the application of such proceeds to violate Regulation U,
Regulation T or Regulation X or any other regulation of the Board of Governors
of the Federal Reserve System or to violate the Exchange Act or any other Legal
Requirements. The Loan is an exempt transaction under the Truth-in-Lending Act
(15 U.S.C.A. §§ 1601 et seq.). Borrower is not a non-resident alien for purposes
of U.S. income taxation and neither Borrower nor Guarantor is a foreign
corporation, partnership, foreign trust or foreign estate (as said terms are
defined in the United States Internal Revenue Code). Borrower, Guarantor or any
of their respective Subsidiaries are not, and shall not become, a Person with
whom Lender is restricted from doing business with under regulations of the
Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury
(including, but not limited to, those named on OFAC’s Specially

 

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Designated and Blocked Persons list) or under any statute, executive order
(including, but not limited to, the September 24, 2001 Executive Order Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism) or other governmental action relating to terrorism
financing, terrorism* support and/or otherwise relating to terrorism and are not
and shall not engage in any dealings or transaction or otherwise be associated
with Persons named on OFAC’s Specially Designated and Blocked Persons list. At
all times throughout the term of the Loan, including after giving effect to any
Transfers, (a) none of the funds or other assets of Borrower and Guarantor
constitute property of, or are beneficially owned, directly or indirectly, by
any government or other Person 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 or any
other laws, regulations or executive orders administered by the Office of
Foreign Assets Control with the result that an investment in Borrower or
Guarantor, as applicable (whether directly or indirectly), is prohibited by law
or the Loan made by the Lender is in violation of law (“Embargoed Person”);
(b) no Embargoed Person has any interest of any nature whatsoever in Borrower or
Guarantor, as applicable, with the result that the investment in Borrower or
Guarantor, as applicable (whether directly or indirectly) is prohibited by law
or the Loan is in violation of law; and (c) none of the funds of Borrower or
Guarantor, as applicable, have been derived from any unlawful activity with
result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of
law.

4.10 Employee Benefit Plans; ERISA; Employees. Except for the Employee Benefit
Plans set forth on Schedule 4.10, neither Borrower nor any ERISA Affiliate of
Borrower maintains or contributes to, or has any obligation under, any Employee
Benefit Plans. Borrower is not an “employee benefit plan” (within the meaning of
section 3(3) of ERISA) to which ERISA applies and the Mortgaged Property and
Borrower’s assets do not constitute plan assets. No actions, suits or claims
under any laws and regulations promulgated pursuant to ERISA are pending or, to
Borrower’s knowledge, threatened against Borrower. Borrower has no knowledge of
any material liability incurred by Borrower which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan, or of any lien which has been imposed on Borrower’s assets
pursuant to section 412 of the Code or section 302 or 4068 of ERISA. The Loan,
the execution, delivery and performance of the Loan Documents and the
transactions contemplated by this Agreement do not constitute a non-exempt
prohibited transaction under ERISA. Borrower is not a party to any collective
bargaining or other employment agreement other than the agreements identified on
Schedule 4.10.

4.11 Intellectual Property. Schedule 4.11 sets forth a true, correct and
complete list of all of the patents, trademarks, tradenames, technology, other
intellectual property rights and other Proprietary Rights owned by Borrower and
used in connection with the ownership, operation and management of the Mortgaged
Property. Borrower possesses, owns or has valid licenses, permits, certificates
of public convenience, service marks, authorizations, licenses, patents, patent
rights or licenses, trademarks, trademark rights, trade name rights, trade
styles, trade dress, logos and other source or business affiliation identifiers,
and copyrights, certificates, consents, orders, approvals and other
authorizations from, and have made all declarations and filings with, all
federal, state, local and other Governmental Authority, all self-regulatory
organizations and all courts and other tribunals (collectively, together with
the goodwill

 

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associated therewith, “Proprietary Rights”) presently required or necessary to
own or lease, as the case may be, and to operate, the Mortgaged Property and to
carry on its business as now conducted, except where the failure to obtain same
would not, individually or in the aggregate, have a Material Adverse Effect.
Borrower has fulfilled and performed all of its obligations with respect to such
permits, and no event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or could result in any other
material impairment of the rights of the holder of any such permit; and Borrower
has not received any notice of any proceeding relating to unenforceability,
invalidity, revocation or modification of any Proprietary Rights, except where
such revocation, unenforceability, invalidity, or modification would not,
individually or in the aggregate, have a Material Adverse Effect. Borrower has
not received any notice that any Proprietary Rights have been declared
unenforceable or otherwise invalid by any court or Governmental Authority other
than notices relating to Proprietary Rights the loss of which would not,
individually or in the aggregate, have a Material Adverse Effect. Borrower has
not received any notice of infringement of, or conflict with, and Borrower does
not know of any such infringement of or conflict with, asserted rights of others
with respect to any Proprietary Rights which, if such assertion of infringement
or conflict were sustained, would have a Material Adverse Effect.

4.12 Broker’s Fees. No broker’s or finder’s fee, commission or similar
compensation will be payable with respect to the Loan, the issuance of the Note
or any of the other transactions contemplated hereby or by any of the Loan
Documents based upon any broker or lender engaged by Borrower, Guarantor or any
affiliate of Borrower. Borrower shall indemnify and hold Lender harmless from
and against any and all claims of all brokers or finders claiming by, through or
under Borrower and in any way related to the Loan or any of the transactions
contemplated hereby.

4.13 Environmental Compliance. There are no claims, liabilities, investigations,
litigation, administrative proceedings, whether pending or, to Borrower’s
knowledge threatened, or judgments or orders relating to any Hazardous Materials
(collectively called “Environmental Claims”) asserted or threatened against
Borrower, tenant or operator or relating to any real property currently or
formerly owned, leased or operated by Borrower including the Mortgaged Property.
Except as disclosed in the Environmental Reports, to Borrower’s knowledge,
neither Borrower nor any other Person has caused or permitted any Hazardous
Material to be used, generated, reclaimed, transported, released, treated,
stored or disposed of in a manner which could form the basis for an
Environmental Claim against Borrower. Except as disclosed in the Environmental
Reports, to Borrower’s knowledge, no Hazardous Materials in violation of
applicable Environmental Laws are or were stored or otherwise located, and no
underground storage tanks or surface impoundments are or were located, on real
property currently or formerly owned, leased or operated by Borrower, including
the Mortgaged Property, or to the knowledge of Borrower, on adjacent parcels of
real property, and no part of such real property or, to the knowledge of
Borrower no part of such adjacent parcels of real property, including the
groundwater located thereon, is presently contaminated by Hazardous Materials in
violation of applicable Environmental Laws or to any extent which has, or might
reasonably be expected to have, a Material Adverse Effect. Except as disclosed
in the Environmental Reports, to Borrower’s knowledge, Borrower and the
Mortgaged Property has been and is currently in compliance with all applicable
Environmental Laws, including obtaining and maintaining in effect all permits,
licenses or other authorizations required by applicable Environmental Laws.

 

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4.14 Solvency. As of the date of this Agreement and after giving effect to the
consummation of the transactions contemplated by the Loan Documents, Borrower:
(A) owns and will own assets the fair saleable value of which are (1) greater
than the total amount of liabilities (including Contingent Obligations) of
Borrower, and (2) greater than the amount that will be required to pay the
probable liabilities of Borrower’s then existing debts as they become absolute
and matured considering all financing alternatives and potential asset sales
reasonably available to Borrower; (B) has capital that is not insufficient in
relation to its business as presently conducted or any contemplated or
undertaken transaction; and (C) does not intend to incur and does not believe
that it will incur debts beyond its ability to pay such debts as they become
due. Borrower has not entered into the Loan Documents or the transactions
contemplated under the Loan Documents with the actual intent to hinder, delay,
or defraud any creditor. After giving effect to the transactions occurring on
the Closing Date, no Default or Event of Default exists, No material adverse
change in the financial conditions or operation of the business of Borrower and
Guarantor has occurred since the applicable dates of the financial statements of
the applicable Person provided on or before the Closing Date.

4.15 Disclosure. The representations and warranties of Borrower and Guarantor
contained in the Loan Documents, the financial statements referred to in
Section 5.1 (A), and any other documents, certificates or written statements
furnished to Lender by or on behalf of Borrower or Guarantor for use in
connection with the Loan do not contain any untrue statement of a material fact
or omit or will omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. There is no material fact known to
Borrower that has had or will have a Material Adverse Effect that has not been
disclosed in this Agreement or in such other documents, certificates and
statements furnished to Lender by or, on behalf of, Borrower for use in
connection with the Loan.

4.16 Insurance. Schedule 4.16 sets forth a complete and accurate description of
all policies of insurance that will be in effect as of the Closing Date for
Borrower and such policies of insurance satisfy all of the requirements of
Section 5.4. All premiums thereon have been paid in full through the first
anniversary of the Closing Date, no notice of cancellation has been received
with respect to such policies and Borrower is in compliance, in all material
respects, with all conditions contained in such policies.

4.17 Intentionally Omitted.

4.18 Accounts. Schedule 4.18 sets forth a complete and accurate itemization of
all of Borrower’s time, demand, securities or similar Accounts that are in
existence as of the Closing Date.

4.19 Management Agreement. Borrower is not party to any Management Agreement nor
has it otherwise contracted with any managing agent to assist Borrower in the
management and operation of the Mortgaged Property.

4.20 Special Assessments; Taxes. There are no pending or, to the knowledge of
Borrower proposed, special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor, to Borrower’s knowledge, are
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the Mortgaged Property that may result in such special or other assessments.
Borrower has provided Lender with true, correct and complete copies of all bills
and invoices for Impositions which have been levied or assessed against or are
outstanding with respect to the Mortgaged Property. Schedule 4.20 sets forth a
true, correct and complete schedule of the assessment of the Mortgaged Property
in effect as of the Closing Date. Borrower has not received any notice that any
portion of the Mortgaged Property has been re-assessed or is currently the
subject of a reassessment. No portion of the Mortgaged Property is exempt from
taxation or constitutes an “omitted” tax parcel. No Impositions are currently
delinquent or outstanding with respect to the Mortgaged Property. The conveyance
of the Mortgaged Property to Borrower did not, in and of itself, constitute the
basis for any reassessment of all or any part of the Mortgaged Property or the
basis for any increase in any currently outstanding or previously satisfied
Impositions which has not already been imposed and disclosed in writing to
Lender by Borrower. No tax contests of any Impositions or assessments are
currently pending. The Land and Improvements constitute a separate tax lot or
lots, with a separate tax assessment or assessments, independent of any other
land or improvements not constituting a part of the Mortgaged Property and no
other land or improvements is assessed and taxed together with any portion of
the Mortgaged Property.

4.21 Leases. Except for the Guarantor Lease, there are no Leases or other
arrangements for occupancy of space within the Mortgaged Property that are
currently in effect. Borrower has provided Lender with a true, complete and
correct copy of the Guarantor Lease, including any amendments or modifications
thereto. The Mortgaged Property is occupied solely by Guarantor.

4.22 Representations Remade. Borrower warrants and covenants that the foregoing
representations and warranties will be true and shall be deemed remade as of the
date of the Closing. All representations and warranties made in the other Loan
Document or in any certificate or other document delivered to Lender by or on
behalf of Borrower pursuant to the Loan Documents shall be deemed to have been
relied upon by Lender, notwithstanding any investigation made by or on behalf of
Lender. All such representations and warranties shall survive the making of the
Loan and shall continue in full force and effect until such time as the Loan has
been paid in full.

SECTION 5

AFFIRMATIVE COVENANTS

Borrower covenants and agrees that so long as this Agreement shall remain in
effect or the Note shall remain outstanding, Borrower shall perform and comply
with all covenants in this Section 5.

5.1 Financial Statements and Other Reports. Borrower will maintain a system of
accounting in accordance with sound business practices to permit preparation of
financial statements in conformity with GAAP and proper and accurate books,
records and accounts reflecting all of the financial affairs of Borrower with
respect to all items of income and expense in connection with the operation of
the Mortgaged Property.

(A) Financial Statements. Within one hundred twenty (120) days after the end of
each calendar year, Borrower shall provide to Lender true and complete annual
audited consolidated financial statements for Guarantor and true and complete
annual unaudited financial

 

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statements for Borrower and the operation of the Mortgaged Property, all
prepared in accordance with GAAP. All audited financial statements shall be
audited by a so-called “Big-4” accounting firm or another independent certified
public accounting firm reasonably satisfactory to Lender. All financial
statements (whether or not audited) shall include a balance sheet as of the end
of such year, profit and loss statements for such year and a statement of cash
flow for such year, with such detailed supporting schedules covering the
operation of the Mortgaged Property as Lender shall reasonably require including
a reconciliation to the monthly reports and statements delivered to Lender and
include an itemized accounting of all Gross Revenues and Expenses for the
Mortgaged Property. As soon as reasonably practicable (but in any event within
forty-five (45) days) after the end of each calendar quarter, Borrower shall
provide to Lender a true and complete quarterly cash flow, balance sheet, and
operating statement for Borrower, Guarantor and the Mortgaged Property (none of
which are required to be audited) certified by the president or vice president
of Borrower and Guarantor which quarterly statements shall be in form and
substance acceptable to Lender. Such quarterly statements shall be compared to
the prior year’s quarter and year-to-date. Borrower shall also provide (and
cause Guarantor to provide), such other financial information as Lender may,
from time to time, reasonably request certified (if requested by Lender) by the
applicable chief financial officer (or similar position). Borrower will deliver,
concurrently with the annual and quarterly statements, a certificate of its
chief financial officer (or analogous position) certifying that no Default or
Event of Default has occurred. In the event Borrower enters into a Management
Agreement subsequent to the date hereof, as soon as available, and in any event
within twenty (20) days after the end of each Loan Month, Borrower will deliver
to Lender a copy of the periodic reporting package required to be delivered to
Borrower by a Manager pursuant to such Management Agreement.

(B) Accountants’ Certification. Together with each delivery of annual financial
statements of Borrower and Guarantor pursuant to subsection 5.1 (A), Borrower
shall request as part of the engagement of its independent certified public
accountant, and shall use best efforts to obtain, a written statement by such
independent certified public accountant (1) stating that the examination has
included a review of the terms of this Agreement as such terms relate to
accounting matters, (2) stating whether, in connection with the examination, any
condition or event that constitutes an Event of Default (of which said
accountants may be aware from said review, and without obligation to review
other aspects of this Agreement or to review any of the other Loan Documents)
has come to their attention, and (3) if such a condition or event has come to
their attention, specifying the nature and period of existence thereof; provided
that the requirements set forth in this subsection (B) shall be waived for so
long as (i) Borrower’s financial statements are prepared on a consolidated basis
with the financial statements of Guarantor and (ii) Guarantor is a reporting
company under the Exchange Act, and provided further that, for purposes of the
foregoing, “best efforts” shall not require a change in Borrower’s independent
certified public accountant.

(C) Accountants’ Reports. Promptly upon receipt thereof, Borrower will deliver
copies of all significant reports submitted to Borrower or Guarantor, as
applicable, by independent public accountants in connection with each annual,
interim or special audit of the financial statements of Borrower or Guarantor,
as applicable, made by such accountants, including the comment letter submitted
by such accountants to management in connection with their annual audit;
provided that the requirements set forth in this subsection (C) shall be waived
for so long as (i) Borrower’s financial statements are prepared on a
consolidated basis with the

 

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financial statements of Guarantor and (ii) Guarantor is a reporting company
under the Exchange Act.

(D) Intentionally Omitted.

(E) Notices, Events of Default and Litigation. Borrower shall promptly deliver,
or cause to be delivered, copies of all notices, demands, reports or requests
given to, or received by Borrower from, any Governmental Authorities or with
respect to any Indebtedness of Borrower or any Material Contracts, and shall
notify Lender within two (2) Business Days after Borrower receives notice or
acquires knowledge of, any violation of Legal Requirements, investigation,
subpoena or audit by any Governmental Authority or default with respect to the
Mortgaged Property or any Indebtedness or Material Contracts. Promptly upon
Borrower obtaining knowledge of any of the following events or conditions,
Borrower shall deliver to Lender a written notice specifying the nature and
period of existence of such condition or event and what action Borrower has
taken, is taking and proposes to take with respect thereto: (1) any condition or
event that constitutes an Event of Default; and/or (2) or any fact,
circumstance, event or condition which has, or would reasonably be expected to
have, a Material Adverse Effect. Promptly upon Borrower obtaining knowledge of
(i) the institution of any action, suit, proceeding, governmental investigation
or arbitration against or affecting Borrower or Guarantor or the Mortgaged
Property, or any other property of Borrower that would reasonably be expected to
have a Material Adverse Effect or (ii) any material development in any action,
suit, proceeding, governmental investigation or arbitration at any time pending
against or affecting Borrower or Guarantor or the Mortgaged Property or any
other property of Borrower that would reasonably be expected to have a Material
Adverse Effect, Borrower will give notice thereof to Lender and provide such
other information as may be available to it to enable Lender and its counsel to
evaluate such matters.

(F) ERISA. Borrower shall deliver to Lender such certifications or other
evidence from time to time throughout the term of the Loan, as Lender, in its
sole discretion, may reasonably request, that (A) Borrower is not and does not
maintain an “employee benefit plan” as defined in Section 3(3) of ERISA, which
is subject to Title I of ERISA, or a “governmental plan” within the meaning of
Section 3(32) of ERISA; (B) Borrower is not subject to state statutes regulating
investments and fiduciary obligations with respect to governmental plans; and
(C) one or more of the following circumstances is true: (i) equity interests in
Borrower are publicly offered securities, within the meaning of 29 C.F.R.
§2510.3-101(b)(2); (ii) less than twenty-five percent (25%) of each outstanding
class of equity interests in Borrower is held by “benefit plan investors” within
the meaning of 29 C.F.R. §2510.3-101(f)(2); or (iii) Borrower qualifies as an
“operating company” or a “real estate operating company” within the meaning of
29 C.F.R. §2510.3-101(c) or (e).

(G) Tax Returns. Borrower will deliver to Lender copies of all federal and state
income and other tax returns, schedules, statements and reports to its owners
within twenty (20) Business Days after the earlier of filing or delivery of such
tax returns or other items with the Internal Revenue Service or the applicable
Governmental Authority or delivery to its owners; provided, however, so long as
Guarantor’s is making filings with the United States Securities and Exchange
Commission (which filings are available to the public on the internet), Borrower
will not be required to deliver copies of the foregoing information to Lender.

 

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(H) Estoppel Certificates. Within ten (10) Business Days following a request by
Lender, Borrower shall provide to Lender, a duly acknowledged written statement
confirming the amount of the outstanding Obligations, the terms of payment and
maturity date of the Note, the date to which interest has been paid, and
whether, to Borrower’s knowledge, any offsets or defenses exist against the
Obligations, and if any such offsets or defenses are alleged to exist, the
nature thereof shall be set forth in detail.

(I) Other. With reasonable promptness, Borrower will deliver such other
information and data with respect to Borrower as from time to time may be
reasonably requested by Lender. Borrower shall also provide Lender with a copy
of each 8K, 10Q and 10K (each as defined in the Exchange Act) or their successor
forms under the Exchange Act, filed by Guarantor from time to time with the
United States Securities and Exchange Commission not later than ten
(10) Business Days after the filing thereof; provided, however, so long as such
filings are available to the public on the internet, Borrower will not be
required to deliver copies of the foregoing to Lender. Borrower shall deliver,
or cause to be delivered, to Lender annually, concurrently with the renewal of
the insurance policies required hereunder, an Officer’s Certificate stating that
the insurance policies required to be delivered to Lender pursuant to
Section 5.4 are maintained with insurers who comply with the terms of
Section 5.4, setting forth a schedule describing all premiums required to be
paid by Borrower to maintain the policies of insurance required under
Section 5.4, and confirming full payment of all such premiums.

(J) Electronic Format. To the extent then available, Borrower will provide to
Lender a copy of any reports, notices, statements or other deliveries required
pursuant to this Section 5.1 in an electronic format reasonably satisfactory to
Lender.

5.2 Existence; Qualification. Borrower will be and continue to be, qualified in
the jurisdiction in which the Mortgaged Property is located and keep in full
force and effect its existence in the jurisdiction in which the Mortgaged
Property is located.

5.3 Payment of Impositions and Lien Claims; Permitted Contests.

(A) Subject to Section 5.3(B) and the provisions of the Loan Documents relating
to the Tax Reserve Account, Borrower will pay, or cause payment of, (i) all
Impositions before in each instance any penalty or fine is incurred with respect
thereto, (ii) all claims (“Claims”) (including claims for labor, services,
materials and supplies) for sums that have become due and payable and that by
law have or may become a Lien upon the Mortgaged Property or Borrower, before in
each instance any penalty or fine is incurred with respect thereto, and
(iii) all federal, state and local income taxes, sales taxes, excise taxes and
all other taxes and assessments levied, imposed, confirmed or assessed against
Borrower, its business, income, liabilities or assets or the Mortgaged Property,
before in each instance any penalty or fine is incurred with respect thereto.

(B) With prior notice to Lender, Borrower shall have the right to pay
Impositions, in full, under “protest.” Notwithstanding Section 5.3(A), Borrower
shall not be required to pay, discharge or remove or cause payment, discharge or
removal of any Imposition or Claims pertaining to labor, services, materials and
supplies supplied to the Land and Improvements so long as Borrower contests
(each such contest, a “Permitted Contest”) in good faith such Imposition or
Claims or the validity, applicability or amount thereof by an appropriate legal

 

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proceeding which operates to prevent the collection of such amounts and the sale
of the Mortgaged Property or any portion thereof so long as: (a) at least thirty
(30) days prior to the date on which such Imposition or Claims would otherwise
have become delinquent, Borrower shall have given Lender notice of its intent to
contest said Imposition, (b) at least thirty (30) days prior to the date on
which such Imposition would otherwise have become delinquent, Borrower shall
have deposited with Lender (or with a court of competent jurisdiction or other
appropriate Person approved by Lender) such additional amounts or other security
as are necessary to keep on deposit at all times, an amount equal to at least
one hundred twenty-five percent (125%) (or such higher amount as may be required
by applicable law) of the total of (x) the balance of such Imposition then
remaining unpaid, and (y) all interest, penalties, costs and charges accrued or
accumulated thereon, (c) no risk of sale, forfeiture or loss of any interest in
the Mortgaged Property or any part thereof arises, in Lender’s reasonable
judgment, during the pendency of such contest, (d) such contest does not, in
Lender’s reasonable discretion, have a Material Adverse Effect and (e) in the
case of Claims, the liens, if any, securing the Claims in question have been
defeased or bonded against in a manner satisfactory to Lender. Each Permitted
Contest shall be prosecuted, at Borrower’s sole cost and expense, with
reasonable diligence, and Borrower shall promptly pay, or cause payment of, the
amount of such Imposition or Claims as finally determined, together with all
interest and penalties payable in connection with such Permitted Contest.
Lender, in its sole discretion, may apply any amount or other security deposited
with Lender under this subsection or otherwise to the payment of any unpaid
Imposition or Claims to prevent the sale, loss or forfeiture of the Mortgaged
Property or any portion thereof. Any surplus retained by Lender after payment of
the Imposition or Claims for which a deposit was made shall be repaid to
Borrower unless an Event of Default exists, in which case the surplus may be
applied by Lender to the Obligations. Notwithstanding any provision of this
Section 5.3 to the contrary, Borrower shall promptly pay any Imposition or
Claims which it might otherwise be entitled to contest if, in reasonable
determination of Lender, the Mortgaged Property or any portion thereof is in
jeopardy or in danger of being forfeited or foreclosed. If Borrower refuses to
pay any such Imposition or Claims, Lender may (but shall not be obligated to)
make such payment and Borrower shall reimburse Lender within five (5) Business
Days of written notice by Lender for all such advances which advances will bear
interest at the Default Rate.

(C) Subject to Section 2.6, Borrower shall pay any and all taxes, charges,
filing, registration and recording fees, excises and levies imposed upon Lender
by reason of its interests in, or measured by amounts payable under, the Note,
this Agreement, the Mortgage or any other Loan Document (other than income,
franchise and doing business taxes), and shall pay all stamp taxes and other
taxes required to be paid on the Note or any of the other Loan Documents. If
Borrower fails to make such payment within five (5) days after notice thereof
from Lender, Lender may (but shall not be obligated to) pay the amount due, and
Borrower shall reimburse Lender within five (5) Business Days of written notice
by Lender for all such advances which will bear interest at the Default Rate. If
applicable law prohibits Borrower from paying such taxes, charges, filing,
registration and recording fees, excises, levies, stamp taxes or other taxes,
then Lender may declare Borrower’s Obligations to be immediately due and
payable, upon ninety (90) days’ prior written notice.

 

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5.4 Insurance.

(A) Borrower shall at all times provide, maintain and keep in force or cause to
be provided, maintained and kept in force, at no expense to Lender, the
following policies of insurance with respect to the Mortgaged Property and
Borrower, as applicable:

(i) Property insurance on an “all risk” and “special perils” basis (special form
cause of loss) for one hundred percent (100%) of the replacement value of the
Mortgaged Property with customary deductibles as approved by Lender. The policy
should contain the following endorsements: (a) Replacement Cost (without any
deduction made for depreciation), (b) Agreed Amount (waiving co-insurance
penalties), (c) Building Ordinance and Law coverage and (d) a standard mortgagee
clause acceptable to Lender. Such policy will also include the following
coverage: (i) comprehensive boiler and machinery coverage in amounts as
reasonably determined by Lender; (ii) earthquake and earth movement coverage in
sufficient amount as reasonably determined by Lender; and (iii) flood insurance
coverage if the Improvements are located in a special flood hazard area as
designated by the Director of the Federal Emergency Management Agency, in
sufficient amount as reasonably determined by Lender.

(ii) Commercial general liability insurance covering bodily injury and property
damage occurring on, in or about the Mortgaged Property and any adjoining
streets, sidewalks, and passageways arising out of or connected with the
possession, use, leasing, operation, or condition of the Mortgaged Property.
Policy limits will be not less than $1,000,000 per occurrence, $2,000,000 per
location in the aggregate with respect to the Mortgaged Property and $1,000,000
per occurrence, $2,000,000 per location in the aggregate with respect to
Borrower. Such coverage shall include but not be limited to premises/operations,
personal injury and liquor liability (if applicable).

(iii) During the clinical testing process, umbrella excess liability insurance
for not less than $15,000,000 in the aggregate with respect to the Mortgaged
Property and Borrower, including products liability coverage. After the Borrower
or Guarantor has received approval for the sale of any medicine, umbrella excess
liability insurance for not less than $20,000,000 in the aggregate with respect
to the Mortgaged Property and Borrower, including products liability coverage.

(iv) During the course of construction of Improvements, Borrower will obtain
(1) commercial general liability insurance including contractual liability, in
the amount of $1,000,000 primary and $10,000,000 excess liability in the
aggregate (the policy shall provide coverage on an occurrence basis against
claims for personal injury, bodily injury and death or property damage occurring
on, in or about the Mortgaged Property and the adjoining streets, sidewalks and
passageways). In addition, Borrower shall require all contractors and
subcontractors, architects and engineers to provide appropriate insurance
coverage); and (2) Builder’s risk completed value form insurance against “all
risks” of physical loss, including collapse, water damage, flood, earthquake and
transit coverage (coverage should be on a non-reporting form, covering the total
value of work performed and equipment, supplies and materials furnished (with an
appropriate limit for soft costs in the case of construction) with deductibles
approved by Lender). Borrower agrees to

 

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consult with Lender prior to commencing the construction of any Improvements and
to comply with all reasonable special insurance requirements of Lender
pertaining to any construction.

(B) No policies shall contain any exclusion for terrorism, terrorist activities
or similar activities defined under the Terrorism Risk Insurance Act of 2002
(“TRIA”) and will be endorsed to insure such risks.

(C) All insurance policies required pursuant to this Agreement shall be endorsed
to provide that: (i) Lender, its successors, and/or assigns, is named as
mortgagee with respect to the all risk property; as a loss payee with respect to
all rent loss coverage; as additional named insured on all liability coverage,
with the understanding that any obligation imposed upon the insureds (including
the liability to pay premiums) shall be the sole obligation of Borrower and not
of any other insured; (ii) the interests of Lender shall not be invalidated by
any action or inaction of Borrower or any other Person, and such policies shall
insure Lender regardless of any breach or violation by Borrower or any other
Person of any warranties, declaration or conditions in such policies; (iii) the
insurer under each such policy shall waive all rights of subrogation against
Lender, any right to set-off and counterclaim and any other right to deduction,
whether by attachment or otherwise; (iv) such insurance shall be primary and
without right of contribution of any other insurance carried by or on behalf of
Lender with respect to its interest in the Mortgaged Property; (v) if such
insurance is canceled for any reason whatsoever, including nonpayment of premium
or, if any substantial modification, change or reduction is made in the coverage
which affects the interests of Lender, such cancellation, modification, change
or reduction in coverage shall not be effective as to Lender until thirty
(30) days after receipt by Lender of written notice sent by registered mail from
such insurer; and (vi) any such insurance shall be endorsed to provide in as
much as the policy is written to cover more than one insured, all terms,
conditions, insuring agreements and endorsements with the exception of limits of
liability, shall operate in the same manner as if there were a separate policy
covering each insured.

(D) Borrower shall deliver to Lender a certificate of insurance with further
evidence of such insurance acceptable to Lender. Renewal certificates should be
provided no later than five (5) days prior to the expiration of each policy.
Upon request of Lender, Borrower shall deliver a renewed policy or policies, or
duplicate original or originals thereof, marked “premium paid,” or accompanied
by such other evidence of payment satisfactory to Lender with standard
non-contributory mortgagee clause in favor of and acceptable to Lender. Borrower
shall comply promptly with and conform to (i) all provisions of each such
insurance policy and (ii) all requirements of the insurers applicable to
Borrower as respects use, occupancy, possession, operation, maintenance,
alteration or repair of the Mortgaged Property. Borrower shall not use or permit
the use of the Mortgaged Property in any manner that would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Agreement. No insurance policy may provide for assessments to be made against
Lender or Lender’s servicer, if any. The insurance coverage required under this
Section 5.4 may be effected under a blanket policy or policies covering the
Mortgaged Property and other properties and assets not constituting a part of
the Mortgaged Property; provided that any such blanket policy shall specify the
portion of the total coverage of such policy that is allocated to the Mortgaged
Property, and any sublimits in such blanket policy applicable to the Mortgaged
Property, which amounts shall

 

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not be less than the amounts required pursuant to this Section 5.4 and which
shall in any case comply in all other respects with all of the requirements of
this Section 5.4. Borrower shall comply with all insurance requirements and
shall not bring or keep or permit to be brought or kept any article upon the
Mortgaged Property or cause or permit any condition to exist thereon which would
be prohibited by any insurance requirement, or would invalidate insurance
coverage required hereunder to be maintained by Borrower on or with respect to
any part of the Mortgaged Property pursuant to this Section 5.4. Notwithstanding
anything to the contrary contained herein, it is expressly understood and agreed
that any insurance which Borrower shall cause any tenant to provide that shall
otherwise be in compliance with all of the terms and conditions of this
Section 5.4 shall satisfy Borrower’s obligations with respect thereto hereunder.
Borrower shall cause each tenant to provide business interruption,
products/completed operations and workers compensation coverage in amounts
reasonably acceptable to Borrower to insure risks of each tenant’s business.
Borrower will not take out separate insurance contributing in the event of loss
with that required to be maintained pursuant to this Section 5.4 unless such
insurance complies with this Section 5.4. All insurance policies shall be in
form, with endorsements, risk coverage, deductibles and amounts and maintained
with companies approved by Lender, such approval not to be unreasonably
withheld, conditioned or delayed. Without limiting Lender’s ability to approve
the aforementioned, an insurance company shall not be reasonably satisfactory
unless such insurance company (a) has a rating of a least A with financial size
of Class X or better as specified in Best’s Key Rating Guide, (b) is licensed or
authorized to do business, as required under applicable law, in the State where
the Mortgaged Property is located and (c) a claims-paying ability rating by S&P
of not less than “A” and an equivalent rating by another Rating Agency. All
insurance policies insuring against casualty, rent loss and other appropriate
policies shall provide that no claims be paid thereunder without twenty
(20) days’ advance written notice to Lender. Such notice may be given by
Borrower. Lender shall not, by the fact of approving, disapproving, accepting,
preventing, obtaining or failing to obtain any insurance, incur any liability
for or with respect to the amount of insurance carried, the form or legal
sufficiency of insurance contracts, solvency of insurance companies, or payment
or defense of lawsuits, and Borrower hereby expressly assumes Ml responsibility
therefore and all liability, if any, with respect thereto. If Borrower fails to
provide to Lender the policies of insurance required by this Section 5.4 or any
other Loan Documents, Lender may (but shall have no obligation to) procure such
insurance or single-interest insurance for such risks covering Lender’s interest
and Borrower will pay all premiums thereon within five (5) Business Days of
written notice by Lender, and until such payment is made by Borrower, the amount
of all such premiums shall bear interest at the Default Rate and shall
constitute additions to the Obligations.

5.5 Tax Reserve and Insurance Reserve. Borrower shall deposit (or cause to be
deposited) with Lender (or such agent of Lender as Lender may designate in
writing to Borrower from time to time), monthly, on each Payment Date, 1/12th of
the annual charges (as estimated by Lender) for all Impositions relating to the
Mortgaged Property and all insurance premiums with respect to the insurance that
relate specifically to the Mortgaged Property (including documentation
reasonably acceptable to Lender demonstrating premium allocation for the
premiums that relate specifically to the Mortgage Property) as required pursuant
to Section 5.4(A)(i), (ii) and (iv). Borrower shall also deposit with Lender,
simultaneously with such monthly deposits and/or on the Closing Date, a sum of
money which, together with such monthly deposits, will be sufficient to make the
payment of each such charge at least thirty (30) days prior to the date finally
delinquent. Should such charges not be ascertainable at the time any deposit is
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made, the deposit shall be made on the basis of Lender’s reasonable estimate.
When the charges are fixed for the then current year or period, Borrower shall
deposit any deficiency within fifteen (15) days following Lender’s written
demand. Should an Event of Default occur and be continuing, the funds so
deposited may be applied in payment of the charges for which such funds shall
have been deposited or to the payment of the Obligations or any other charges
affecting the Mortgaged Property as Lender in its sole and absolute discretion
may determine, but no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
Borrower shall provide Lender with bills and all other documents necessary for
the payment of the foregoing charges at least ten (10) days prior to the date on
which each payment thereof shall first become delinquent. So long as (i) no
Event of Default exists, (ii) Borrower has provided Lender with the foregoing
bills and other documents in a timely manner, and (iii) sufficient funds are
held by Lender for the payment of the Impositions and insurance premiums
relating to the Mortgaged Property, as applicable, Lender shall pay said items
or allow such funds to be used to pay said items or to reimburse Borrower for
such items upon Lender’s receipt of reasonable evidence documenting Borrower’s
payment of such items. All refunds of Impositions and insurance premiums shall
be deposited into the applicable of the Tax Reserve Account or the Insurance
Reserve Account.

5.6 Maintenance of Mortgaged Property. Borrower will maintain or cause the
Mortgaged Property to be maintained in compliance with all Legal Requirements
and in good repair, working order and condition and will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Without regard
as to whether Proceeds are made available to Borrower for such purposes,
Borrower will promptly restore and repair all loss or damage occasioned by
(i) any casualty which has occurred to at least the condition existing prior to
any such casualty or (ii) any condemnation to an economically and structurally
integrated unit. Borrower will prevent any act or thing which might materially
impair the value or usefulness of the Mortgaged Property. Borrower will not
commit or permit any waste of the Mortgaged Property or any part thereof.

5.7 Inspection; Lender Meeting. Borrower shall, upon request from Lender and at
reasonable times, permit (and cause to be permitted) Lender’s designated
representatives to (a) visit, examine, audit, and inspect the Mortgaged
Property, (b) examine, audit, inspect, copy, duplicate and abstract Borrower’s
financial, accounting and other books and records, and (c) discuss Borrower’s
and the Mortgaged Property’s affairs, finances and business with Borrower’s
officers, representatives, independent public accountants and agents. Lender
acknowledges and agrees that any inspection or entry to the Mortgaged Property
by Lender or Lender’s designated representatives shall be conducted (i) during
Borrower’s normal business hours, (ii) in accordance with Borrower’s safety and
security procedures then applicable to the Mortgaged Property in general and to
the Secure Areas in particular that are, in each instance, in effect from time
to time, (iii) at Borrower’s option, accompanied by an employee or
representative of Borrower and/or Guarantor, (iv) in accordance with the
confidentiality requirements of Section 11.12 and (v) in such a manner so as to
minimize any disruption or interference with Borrower’s use or operation of the
Mortgaged Property. Borrower shall cause its books and records to be maintained
at Borrower’s principal offices located at c/o Alexion Pharmaceuticals, Inc.,
352 Knotter Driver, Chesire, CT 06410. Borrower will not change its principal
offices or the location where its books and records are kept without giving at
least thirty (30) days’ advance notice to Lender. Borrower shall pay Lender’s
costs and expenses incurred

 

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in connection with such audit if an Event of Default has occurred and is
continuing or if any audit reveals any material discrepancy, in Lender’s
reasonable judgment, in the financial information provided by Borrower. All
audits, inspections and reports shall be made for the sole benefit of Lender.
Neither Lender nor Lender’s auditors, inspectors, representatives, agents or
contractors assumes any responsibility or liability (except to Lender) by reason
of such audits, inspections or reports. Borrower will not rely upon any of such
audits, inspections or reports. The performance of such audits, inspections and
reports will not constitute a waiver of any of the provisions of the Loan
Documents. Neither Lender nor any other of Lender’s inspectors, representatives,
agents or contractors, shall be responsible for any matters related to design or
construction of the Improvements, the Initial Project Improvements or any
Construction. Borrower shall cooperate, from time to time, with Lender and use
reasonable efforts to assist Lender in obtaining an appraisal of the Mortgaged
Property. Such cooperation and assistance from Borrower shall include reasonable
access to the Mortgaged Property and books and records pertaining to the
Mortgaged Property for Lender and its appraiser. The appraiser performing any
such appraisal shall be engaged by Lender. Borrower shall not be responsible for
the expenses of any such appraisal, provided, however, Borrower shall pay the
fees of such appraiser in connection with one appraisal of the Mortgaged
Property during the term of the Loan and any such appraisal when conducted
following the occurrence and during the continuation of an Event of Default.
Borrower shall cooperate with Lender with respect to any proceedings before any
Governmental Authority which may in any way affect the rights of Lender under
any of the Loan Documents and, in connection therewith, not prohibit Lender, at
its election, from participating in any such proceedings.

5.8 Environmental Compliance. Borrower shall: (a) comply (or cause compliance)
at all times with all applicable Environmental Laws, and (b) promptly take, or
cause to be taken, any and all necessary remedial actions upon obtaining
knowledge of the presence, storage, use, disposal, transportation, release or
discharge of any Hazardous Materials on, under or about the Mortgaged Property
which has a Material Adverse Effect or is in violation of any Environmental
Laws. Borrower shall cause all remedial action with respect to Hazardous
Material on, under or about the Mortgaged Property, to comply with all
applicable Environmental Laws and the applicable policies, orders and directives
of all federal, state and local Governmental Authorities. If Lender at any time
has a reasonable basis to believe that there may be a violation of any
Environmental Law by, or any liability arising thereunder of, Borrower or
related to the Mortgaged Property, Borrower shall, upon request from Lender,
provide Lender with such reports, certificates, engineering studies and other
written material or data as Lender may reasonably require to confirm compliance
by Borrower and the Mortgaged Property with all applicable Environmental Laws.
Borrower shall permit Lender, its authorized representatives, consultants or
other Persons retained by Lender to enter upon, examine, test and inspect the
Mortgaged Property with regard to compliance with Environmental Laws, the
presence of Hazardous Materials and the environmental condition of the Mortgaged
Property and properties adjacent to the Land. Such entry, examination, testing
and inspecting and reporting shall be at the expense of Borrower if (x) an Event
of Default has occurred or (y) Lender has reasonably determined that there may
be a violation of Environmental Law or any liability arising under Environmental
Law, which expense shall be paid by Borrower to Lender within five (5) Business
Days of written notice by Lender.

 

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5.9 Environmental Disclosure. Borrower shall immediately upon becoming aware
thereof advise Lender in writing and in reasonable detail of: (1) any release,
disposal or discharge of any Hazardous Material at the Mortgaged Property
required to be reported to any federal, state or local governmental or
regulatory agency under all applicable Environmental Laws; (2) any and all
written communications sent or received by Borrower or its agents with respect
to any Environmental Claims or any release, disposal or discharge of Hazardous
Material required to be reported to any federal, state or local governmental or
regulatory agency; (3) any remedial action taken by Borrower or any other Person
in response to any Hazardous Material on, under or about any real property
owned, leased or operated by Borrower or the Mortgaged Property or its agents,
the existence of which could result in an Environmental Claim; (4) the discovery
by Borrower or its agents of any occurrence or condition on any real property
adjoining or in the vicinity of the Mortgaged Property that could cause such
real property or any part thereof to be classified as “border-zone property” or
to be otherwise subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws; and (5) any request
for information from any Governmental Authority that indicates such Governmental
Authority is investigating whether Borrower or another present or former
occupant of the Mortgaged Property may be potentially responsible for a release,
disposal or discharge of Hazardous Materials from any of the Mortgaged Property.
Borrower shall promptly notify Lender of any proposed action to be taken by
Borrower to commence any operations that could reasonably be expected to subject
Borrower to additional laws, rules or regulations, including laws, rules and
regulations requiring additional or amended environmental permits or licenses.
Borrower shall, at its own expense, provide copies of such documents or
information as Lender may reasonably request in relation to any matters
disclosed pursuant to this Section 5.9.

5.10 Compliance with Laws, Employee Benefit Plans and Contractual Obligations.
Borrower will promptly and faithfully (A) comply and cause the Mortgaged
Property to comply, in all material respects, with the requirements of all Legal
Requirements and the orders and requirements of any Governmental Authority in
all jurisdictions in which it is now doing business or may hereafter be doing
business and of every board of fire underwriters or similar body exercising
similar functions, (B) maintain all licenses, certificates of occupancy, permits
and Proprietary Rights now held or hereafter acquired by it or with respect to
which a Material Adverse Effect will result if same are not existing and held by
Borrower and (C) perform, observe, comply and fulfill all of its obligations,
covenants and conditions contained in the Loan Documents and the Material
Contracts. Borrower shall: (i) promptly notify Lender of any claim made against
Borrower that Borrower is in default beyond any applicable notice and cure
period under any Material Contract or that any other party is in default beyond
any applicable notice and cure period under any Material Contract; (ii) not
terminate, or permit termination of, any Material Contract, and (iii) not enter
into, amend or modify any Material Contract without first obtaining the prior
written approval of Lender. Except for the plans described in Schedule 4.10,
Borrower is not a party to, and will not establish, any Employee Benefit Plan.
Except for the plans described in Schedule 4.10, Borrower will not commence
making contributions to (or obligate itself to make contributions to) any
Employee Benefit Plan.

5.11 Further Assurances. Borrower shall, from time to time, at its sole cost and
expense, execute and/or deliver, or cause execution and/or delivery of, such
documents, agreements and reports, and perform such acts as Lender at any time
may reasonably request to carry out the purposes and otherwise implement the
terms and provisions provided for in the Loan

 

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Documents. Borrower shall execute any documents and take any other actions
necessary to provide Lender with a first priority, perfected security interest
in the Reserves and the other Collateral. Borrower shall, at Borrower’s sole
cost and expense: (i) upon Lender’s request therefore given from time to time
(but not more frequently than once per calendar year unless an Event of Default
then exists) pay for (a) current reports of Uniform Commercial Code, federal tax
lien, state tax lien, judgment and pending litigation searches with respect to
Borrower and Guarantor, (b) current good standing and existence certificates
with respect to Borrower and Guarantor and (c) current searches of title to the
Mortgaged Property, each such search to be conducted by search firms reasonably
designated by Lender in each of the locations reasonably designated by Lender;
and (ii) execute and deliver to Lender such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary,
to evidence, preserve and/or protect the Reserve and Other Accounts Collateral
and the other Collateral at any time securing or intended to secure the
Obligations, as Lender may require in Lender’s reasonable discretion. Borrower
shall promptly execute, acknowledge, deliver, file or do, at its sole cost and
expense, all acts, assignments, notices, agreements or other instruments as
Lender may require in order to effectuate, assure, convey, secure, assign,
transfer and convey unto Lender any of the rights granted by this Agreement and
to more fully perfect and protect any assignment, pledge, lien and security
interest confirmed or purported to be created under the Loan Documents or to
enable Lender to exercise and enforce their rights and remedies hereunder, in
respect of the Collateral.

5.12 Capital Expenditure Reserve. On the Closing Date, Borrower shall deposit
the amount required to be deposited into the Capital Expenditure Reserve Account
on the Settlement Statement into the Capital Expenditure Reserve Account and
thereafter Borrower shall deposit (or cause to be deposited) with Lender (or
such agent of Lender as Lender may designate in writing from time to time) into
the Capital Expenditure Reserve Account, monthly, on each Payment Date, an
amount equal to $3,000.00 for the purpose of establishing and maintaining a
reserve (the “Capital Expenditure Reserve”) for the completion of capital
improvement items and for equipment for use at the Mortgaged Property (“Capital
Improvements”) which are approved in advance by Lender (“Approved Capital
Improvements”). The funds contained in the Capital Expenditure Reserve shall be
utilized by Borrower solely for Approved Capital Improvements. So long as no
Default or Event of Default exists at the time of any requested distribution of
funds from the Capital Expenditure Reserve, Lender shall make funds in the
Capital Expenditure Reserve available to Borrower subject to satisfaction of
each of the following terms and conditions: (a) all Capital Expenditure Reserve
funds released by Lender to Borrower shall be used to pay for or reimburse
Borrower for the reasonable expenses actually incurred and paid by Borrower for
Approved Capital Improvements; (b) Borrower shall have given Lender a Request
for Release satisfactory to Lender; (c) disbursements from the Capital
Expenditure Reserve shall not be made more frequently than once per Loan Month;
(d) each request for a disbursement shall be in an amount of not less than
$10,000.00; and (e) upon request of Lender, Borrower shall also provide Lender
with additional evidence satisfactory to Lender that Borrower is the owner or
lessee of any capital improvements or equipment for which reimbursement is
sought, free of any Liens (other than the first priority security interest in
favor of Lender). Lender shall make each disbursement of the Capital Expenditure
Reserve funds within fifteen (15) days after satisfaction of all the conditions
to that disbursement. If an Event of Default exists, Lender may apply the
Capital Expenditure Reserve funds, together with any interest accrued thereon,
to Borrower’s Obligations in such order and priority as Lender may

 

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determine. Notwithstanding the foregoing, to the extent that in any calendar
year Borrower has expended sums on capital improvements and equipment approved
in advance by Lender in excess of the sums required to be deposited into the
Capital Expenditure Reserve hereunder for such period, Borrower may request that
Lender approve (which approval shall be in Lender’s sole but good faith
discretion) a reduction in the amount Borrower shall be required to deposit in
the Capital Expenditure Reserve for the remaining portion of the calendar year
to reflect the amount of such excess expenditures. Borrower shall furnish to
Lender on or prior to the thirtieth (30th) day following the end of each Loan
Quarter a statement (“Capital Expenditure Reserve Statement”) setting forth
(a) all deposits into and disbursements from the Capital Expenditure Reserve,
(b) calculation of the aforesaid monthly deposits, including support
documentation for the calculation of the applicable monthly Gross Revenues, and
(c) a schedule of capital improvements and related expenses to which
disbursements from the Capital Expenditure Reserve were applied during the
applicable Loan Quarter, including, to the extent not previously provided to,
and approved by, Lender, invoices, receipts, lien waivers and other
documentation as Lender shall request. Lender shall not make any disbursements
from the Capital Expenditure Reserve until (i) Lender has approved the
expenditures proposed by Borrower, (ii) all conditions to such disbursement have
been satisfied and (iii) Borrower has provided Lender with all invoices,
receipts, lien waivers and other documentation reasonably requested by Lender.
Lender may audit Borrower’s calculation of amounts deposited into the Capital
Expenditure Reserve to determine the accuracy of Borrower’s calculation and, if
such audit discloses a shortfall in the amounts theretofore deposited into the
Capital Expenditure Reserve, Borrower shall promptly deposit the amount of such
shortfall into the Capital Expenditure Reserve.

5.13 Equity Account. Simultaneous with the Closing, Borrower shall deposit (or
cause to be deposited) the Borrower’s Initial Equity Contribution into a
segregated account of Borrower with a financial institution reasonably
satisfactory to Lender (the “Equity Account”). Borrower hereby grants to Lender
a security interest in the Equity Account. It shall be an Event of Default
hereunder if Borrower withdraws any funds from the Equity Account in violation
of the terms of this Agreement.

5.14 Drug Approval. On or before December 31, 2007, Borrower shall obtain and
shall deliver to Lender evidence (reasonably satisfactory to Lender) that the
drug commonly known as “Soliris” has received final approval from the Food &
Drug Administration Agency in the United States or the European Medicines Agency
(EMEA) (the “Drug Approval”).

5.15 Acceptable Letter of Credit. In the event Borrower delivers an Acceptable
Letter of Credit as a cure for failing to obtain Drug Approval in accordance
with Section 5.14 of this Agreement, Borrower shall, if the Issuer ceases to
have a Credit Rating of both “A+” or higher by S&P and “A1” or higher by
Moody’s, Borrower shall, within twenty (20) Business Days of the rating
downgrade, replace the Acceptable Letter of Credit with one issued by a bank
having such rating. Borrower shall pay any and all costs and expenses associated
with Borrower’s changing the Issuer or substituting a new letter of credit for
the then existing Acceptable Letter of Credit.

 

5.16 Validation. Borrower shall cause Validation to occur on or before the
Project Completion Date.

 

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5.17 [Intentionally Omitted.]

5.18 Management. Borrower shall provide competent, responsible management for
the Mortgaged Property, which management, Lender acknowledges, is currently
being provided, at no expense or cost to Borrower, by employees of Guarantor. In
the event Borrower enters into a Management Agreement subsequent to the date
hereof, the Manager and such Management Agreement must contain subordination and
termination provisions and must be otherwise satisfactory to Lender. Borrower
shall not enter into any management agreement or arrangement with any Person
with respect to the management of the Mortgaged Property without Lender’s prior
written consent. Borrower shall cause management subordination agreements in
form and substance satisfactory to Lender to be executed by the Manager.
Borrower shall not modify, amend or terminate any approved management agreement
without Lender’s prior written consent. Borrower shall provide Lender with
written notice of the occurrence of any event of default or condition which with
the giving of notice or passage of time, or both, would constitute an event of
default under any Management Agreement or which would entitle the Manager to
terminate the Management Agreement. Any Management Agreement entered into by
Borrower shall be terminated by Borrower, at Lender’s request, upon thirty
(30) days’ prior notice to Borrower (i) upon the occurrence of an Event of
Default or (ii) if such Manager commits any act which would permit termination
by Borrower under such Management Agreement. If a Manager is terminated pursuant
hereto, Borrower shall immediately seek to appoint a replacement manager which
is a Qualified Manager, and Borrower’s failure to appoint an acceptable Manager
within thirty (30) days after Lender’s request of such Borrower to terminate the
Management Agreement shall constitute an immediate Event of Default.

5.19 Construction Matters. Without limitation of Lender’s rights and Borrower’s
Obligations set forth elsewhere in the Loan Documents, Borrower shall: (1) cause
the Restoration and all other Construction to proceed with reasonable diligence
and continuously, with sufficient workers employed and sufficient materials
supplied for that purpose so that the applicable Construction is substantially
completed by the applicable Required Completion Date, or, if no Required
Completion Date is applicable, as promptly as reasonably practicable or, in the
case of Restoration, the Restoration is Substantially Completed prior to the
Required Restoration Date; (2) cause all Construction to be performed in
accordance with the applicable Plans and Specifications or plans and
specifications for the work in question, in substantial conformity with the
Legal Requirements, the requirements of all insurers and fire underwriters, and
with the requirements set forth herein and in the other Loan Documents, in
compliance with the Material Contracts and in a good, safe and workmanlike
manner; (3) cause all materials acquired or furnished in connection with the
Construction and Restoration to be new and stored under adequate safeguards to
minimize the possibility of loss, theft, damage or commingling with other
materials or projects; (4) utilize, or permit utilization of, only contractors
approved by Lender (such approval not to be unreasonably withheld, conditioned
or delayed); (5) not permit the revision of Plans and Specifications without
consent of Lender (not to be unreasonably withheld, conditioned or delayed); and
(6) from time to time upon the reasonable request of Lender deliver to Lender
such certificates and other documentation confirming the matters set forth in
the preceding clauses (1) through (5). Promptly upon the giving or receipt of
such notice, Borrower shall forward to Lender copies of all material written
notices given or received by, or on behalf of, Borrower with respect to the
Construction to or from: (x) Contractor or any subcontractor or material
supplier, or any of the design professionals (including notices relating to any

 

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nonconforming construction, any refusal or inability to pay or perform pursuant
to the terms of any contract or other agreement or any delay, default or change
order) or (y) any claim of default, or relating to any work stoppage, notice of
violation or cease and desist order, stop order, construction liens, strike,
claim, litigation, damage, loss or any other materially adverse condition,
circumstance or event. Borrower shall pay and discharge or cause to be paid and
discharged promptly all payments due for labor, materials and supplies unless
the same shall be contested by Borrower in accordance with Section 5.3(B).
Borrower shall make available for inspection at all times by Lender and its
representatives copies of all contracts for Construction and, to the extent
available to or reasonably obtained by Borrower, entered into by Contractor and
design professionals relating to the Construction. Within ninety (90) days after
Substantial Completion of applicable Construction activities, Borrower shall
(i) complete, or cause to be completed, all Punch-List Items, (ii) deliver to
Lender two (2) copies of the as-built Plans and Specifications and such other
as-built surveys and plans and specifications as Lender may reasonably require
and (iii) obtain all final permits and approvals required for the normal use and
occupancy of the Improvements in question (including a permanent certificate of
occupancy if required for occupancy under applicable laws or its equivalent for
the Improvements in question, to the extent available) provided, however, to the
extent Borrower is diligently pursuing the items in (i), (ii) and (iii) and
cannot complete such requirements within such ninety (90) day period, such
ninety (90) days shall be extended by an additional thirty (30) days; provided
further, however, and notwithstanding the foregoing to the extent that
applicable Legal Requirements require satisfaction of items (i), (ii) or
(iii) prior to the expiration of such ninety (90) or one hundred twenty
(120) day period, the date such items must be satisfied prior to the date
satisfaction is required pursuant to the applicable Legal Requirements.

SECTION 6

ACCOUNTS/CASH MANAGEMENT

6.1 Establishment of Accounts.

(A) Accounts. Borrower and Lender confirm that Lender has established, and
agrees that Borrower and Lender shall maintain at Bank, the following segregated
securities accounts (each a “Reserve Account” and, collective the “Reserve
Accounts”) shall be maintained by Borrower with Bank:

(i) Account No. 230444156, captioned “Alexion Manufacturing LLC/iStar Financial
Inc./Insurance Reserve” for the retention of collateral in respect of insurance
premiums for the Mortgaged Property as provided in Section 5.5 (the “Insurance
Reserve Account”);

(ii) Account No. 230444164, captioned “Alexion Manufacturing LLC/iStar Financial
Inc./Tax Reserve” for the retention of collateral for the payment of Impositions
for the Mortgaged Property as provided in Section 5.5 (“Tax Reserve Account”);
and

(iii) Account No. 230444172, captioned “Alexion Manufacturing LLC/iStar
Financial Inc./Capital Expenditure Reserve Account” for the retention of
collateral in respect of capital improvements as provided in Section 5.12
(“Capital Expenditure Reserve Account”).

 

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(B) Type and Control of Accounts. Borrower represents, warrants, covenants and
agrees that (A) each of the Reserve Accounts are and shall be maintained as a
“securities account” (as in Section 8-501 (a) of the UCC); (B) Lender is
entitled to exercise the rights that comprise any financial asset credited to
such Reserve Accounts; (C) Borrower shall have no right to give entitlement
orders with respect to such Reserve Accounts and, except as provided in this
Agreement, no Reserve and Other Accounts Collateral shall be released to
Borrower from such Reserve Accounts; and (D) all securities or other property
underlying any financial assets credited to the Reserve Accounts shall be
registered in the name of Bank or indorsed to Bank or in blank and in no case
will any financial asset credited to the Reserve Accounts be registered in the
name of Borrower, payable to the order of Borrower or specially indorsed to
Borrower.

(C) Eligible Accounts. Each of the Reserve Accounts shall be an Eligible
Account.

(D) Cash Management Agreement. Borrower agrees that: (i) the Reserve Accounts
shall be maintained in accordance with the terms hereof and of the Cash
Management Agreement; and (ii) prior to the indefeasible re-payment in full of
the Loan and indefeasible satisfaction of the Obligations, the Cash Management
Agreement shall not be amended, supplemented or modified without the prior
written consent of Lender, which consent Lender may grant or withhold in its
sole and absolute discretion.

(E) No Other Accounts. Borrower represents and warrants that there are no
deposit, securities or similar Accounts other than the Reserve Accounts
maintained by Borrower or any other Person with respect to the collection of
Gross Revenues. Borrower agrees that, until the Loan is indefeasibly re-paid in
full and the indefeasible satisfaction of the Obligations neither Borrower nor
any other Person shall open any Accounts for the collection or holding of Gross
Revenues, except for the Reserve Accounts. The foregoing shall not prohibit
Borrower from (i) utilizing one or more separate accounts for the disbursement
or retention of funds that have been transferred to Borrower pursuant to
Section 6.3 of this Agreement or (ii) maintaining a separate bank account for
the collection of Rents under the Guarantor Lease. Borrower covenants and agrees
that it will not pledge, or create or permit to exist any security interest in,
the foregoing accounts.

(F) Miscellaneous Account Provisions. The Reserve Accounts shall be subject to
such applicable laws, and such applicable regulations of the Board of Governors
of the Federal Reserve System and of any other banking or governmental
authority, as may now or hereafter be in effect. Interest accruing on the
Reserve Accounts, if any, shall be periodically added to the principal amount of
the applicable Reserve Account and shall be held, disbursed and applied in
accordance with the provisions of this Agreement. All statements relating to the
Reserve Accounts shall be issued simultaneously by Bank to Lender and Borrower.
Borrower shall be the beneficial owner of the Reserve Accounts for federal and
state income tax purposes and shall report all income on the Reserve Accounts.

6.2 Deposits into Accounts.

(A) Initial Deposits. On the Closing Date, Borrower agrees, represents and
warrants that it has deposited or caused to be deposited the following amounts
into the Accounts:

(i) $0.00 into the Insurance Reserve Account; (ii) $70,210.79 into the Tax
Reserve Account, and (iii) $0.00 in the Capital Expenditure Reserve Account.

 

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(B) Continuing Deposits. Borrower agrees to deposit on each Payment Date funds
in the following amounts:

(i) funds in an amount equal to the deposit for insurance premiums due under
Section 5.5 on the applicable Payment Date shall be deposited into the Insurance
Reserve Account;

(ii) funds in an amount equal to the deposit for Impositions due under
Section 5.5 on the applicable Payment Date shall be deposited into the Tax
Reserve Account; and

(iii) funds in an amount equal to the deposit due under Section 5.12 on the
applicable Payment Date in which the transfer is made shall be transferred to
the Capital Expenditure Reserve Account.

6.3 Payments from Reserve Accounts.

(A) No Event of Default. Borrower hereby irrevocably authorizes Lender to
withdraw, and, Lender shall withdraw or re-allocate, the following payments or
allocations, as applicable, from the applicable Reserve Accounts to the extent
of the monies on deposit in the applicable Reserve Account if no Event of
Default exists:

(i) funds from the Tax Reserve Account and Insurance Reserve Account sufficient
to pay (A) Impositions and (B) insurance premiums for the insurance required to
be maintained pursuant to the terms of the Agreement, on the due date therefore,
and pay such funds to the Governmental Authority or insurance company having the
right to receive such funds, provided, that Lender shall only be required to
make such payments if Borrower has delivered to Lender an Officer’s Certificate
identifying (1) the amount of such required payments, (2) the due date of such
payments and (3) the person entitled to receive such payments, at least five
(5) Business Days prior to the due date thereof, provided further, if Borrower
shall have paid Impositions or insurance proceeds directly, the funds will be
paid to Borrower in reimbursement thereof provided no Event of Default exists
and Borrower provides evidence reasonably satisfactory to Lender of payment of
the item in question; and

(ii) funds from the Capital Expenditure Reserve Account in amounts determined by
Lender to be required to be disbursed pursuant to Section 5.12.

(B) Event of Default Exists. If an Event of Default exists and during the
continuance of the same, Borrower hereby irrevocably authorizes Lender to make
any and all withdrawals from and transfers between any Reserve Account, as
Lender shall determine in Lender’s sole and absolute discretion.

6.4 Accounts. Borrower shall not, without the prior written consent of Lender,
change the account location of any Reserve Account, the Development Fund and/or
the Equity Account and,

 

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as a condition precedent to any such change, the bank to which Borrower proposes
to relocate such Reserve Account and/or Development Fund shall have executed an
appropriate acknowledgment letter, in accordance with the provisions set forth
above. With respect to the Reserve and Other Accounts Collateral, Lender shall
not be liable for any acts, omissions, errors in judgment or mistakes of fact or
law, except for those arising as a result of Lender’s investment of such Reserve
and Other Accounts Collateral in other than Permitted Investments or from gross
negligence or willful misconduct. Funds in the Accounts shall (a) be used only
to pay Expenses related to the Mortgaged Property prior to any distributions by
Borrower and (b) not be disbursed in violation of any provision of this
Agreement.

6.5 Creation of Security Interest in Accounts. Borrower hereby pledges,
transfers and assigns to Lender, and grants to Lender, as additional security
for the Obligations, a continuing perfected first priority security interest in
and to, and a first lien upon: (i) the Reserve Accounts, the Development Fund,
the Equity Account and all amounts which may from time to time be on deposit in
each of the Reserve Accounts, the Development Fund and the Equity Account,
respectively; (ii) all of Borrower’s right, title and interest in and to all
cash, property or rights transferred to or deposited in each of the Reserve
Accounts, the Development Fund and Equity Account from time to time; (iii) all
certificates and instruments, if any, from time to time representing or
evidencing any such Reserve Account, Development Fund, Equity Account or any
amount on deposit in any thereof, or any value received as a consequence of
possession thereof, including all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of, or in exchange for, any or all of the Reserve Accounts, the
Development Fund or the Equity Account, as applicable; (iv) all monies, chattel
paper, checks, notes, bills of exchange, negotiable instruments, documents of
title, money orders, commercial paper, and other security instruments,
documents, deposits and credits from time to time in the possession of Lender
representing or evidencing such Reserve Accounts, Development Fund, or Equity
Account, as applicable; (v) all other property, held in, credited to, or
constituting part of any of the Reserve Accounts, Development Fund or the Equity
Account as applicable; (vi) all earnings and investments held in any Reserve
Account, Development Fund or the Equity Account, as applicable, in accordance
with this Agreement; and (vii) to the extent not described above, any and all
proceeds of the foregoing, (collectively, the “Reserve Account and Other
Accounts Collateral”). This Agreement and the pledge, assignment and grant of
security interest made hereby secures payment of all Obligations in accordance
with the provisions set forth herein. This Agreement shall be deemed a security
agreement within the meaning of the Uniform Commercial Code.

6.6 Certain Matters Regarding Lender following an Event of Default. Borrower
agrees that the Bank shall pay over to Lender all amounts deposited in the
Reserve Accounts on demand, without notice to Borrower, if, in making such
demand, Lender shall give notice, in writing, signed by Lender or an authorized
agent thereof, that an Event of Default exists. Lender may exercise in respect
of the Reserve Account and Other Accounts Collateral all rights and remedies
available to Lender hereunder or under the other Loan Documents, or otherwise
available at law or in equity. If an Event of Default exists, Lender may
exercise in respect of the Reserve and Other Accounts Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
of the rights and remedies of a secured party upon default under the Uniform
Commercial Code then in effect in the applicable jurisdiction. Without limiting
the generality of the foregoing, Borrower agree(s) that, upon the occurrence and
during

 

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the continuance of an Event of Default, it will have no further right to request
or otherwise require Lender to disburse funds from any Account in accordance
with the terms of this Agreement, it being agreed that Lender may, at its
option, (i) direct the Bank to continue to hold the funds in the Reserve
Accounts, (ii) continue, from time to time, to apply all or any portion of the
funds held in the Reserve Accounts to any payment(s) which such funds could have
been applied to prior to such Event of Default (or to pay Expenses directly), to
the extent and in such order and manner as Lender in its sole discretion may
determine, and/or (iii) direct the Bank to disburse all or any portion of the
funds held in the Reserve Accounts or other Reserve and Other Accounts
Collateral then or thereafter held by the Bank to Lender, in which event Lender
may apply the funds held in the Reserve Accounts or other Reserve and Other
Accounts Collateral to the Obligations, in any order and in such manner as
Lender may determine in its sole discretion. If an Event of Default exists,
Lender may, at any time or from time to time: (1) collect, appropriate, redeem,
realize upon or otherwise enforce its rights with respect to the Reserve and
Other Accounts Collateral, or any part thereof, without notice to any Borrower
and without the need to institute any legal action, make demand to or upon any
Borrower or any other Person, exhaust any other remedies or otherwise proceed to
enforce its rights; (2) execute (in the name, place and stead of Borrower) any
endorsements, assignments or other instruments of conveyance which may be
required for the withdrawal and negotiation of the Reserve and Other Accounts
Collateral; and/or (3) exercise all other rights and remedies available to
Lender hereunder and under any of the other Loan Documents. Notwithstanding
anything to the contrary contained herein: (w) Borrower shall remain liable
under the Loan Documents to the extent set forth herein and therein to perform
all of its respective obligations thereunder, to the same extent as if this
Agreement had not been executed; (x) the exercise by Lender of any of its rights
hereunder shall not release Borrower from its obligations under any of the Loan
Documents, nor shall it constitute an election of remedies by Lender or a waiver
by Lender of any of its rights and remedies under the Loan Documents; (y) except
as expressly set forth in this Agreement or in any of the other Loan Documents,
Lender shall not have any obligation or liability by reason of this Agreement,
nor shall Lender be obligated to perform any of the obligations or duties of
Borrower hereunder or to take any action, in each case, to collect or enforce
any claim for payment assigned hereunder; and (z) Lender shall not have to
resort to using the Reserve and Other Accounts Collateral before making demand
upon or bringing an action against Borrower under any Loan Document under any
guaranty given in connection with the Loan. No failure on the part of Lender to
exercise, and no delay in exercising, any right under this Agreement shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right under this Agreement or the other Loan Documents. The remedies
provided in this Agreement, the Note and the other Loan Documents are cumulative
and not exclusive of any remedies provided at law or in equity.

6.7 Representations and Warranties Regarding Reserve Account and Other Accounts
Collateral. In addition to any representations or warranties contained in this
Agreement, Borrower represents and warrants as follows: (a) Borrower is the
legal and beneficial owner of the Reserve and Other Accounts Collateral,
respectively, free and clear of any Liens, except for the Liens in favor of
Lender created by this Agreement and the other Loan Documents; (b) upon
execution by Borrower of this Agreement, the pledge and assignment of the
Reserve and Other Accounts Collateral pursuant to this Agreement will create a
valid, first priority security interest in the such Reserve and Other Accounts
Collateral, securing the payment and performance of the

 

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Obligations; and (c) Borrower is not a party to any credit agreement or other
borrowing facility including, but not limited to, a line of credit or overdraft
line, with the Bank.

6.8 Covenants Regarding Reserve Account and Other Accounts Collateral. Borrower
will not, without the prior consent of Lender, (a) sell, assign (by operation of
law or otherwise), pledge, or grant any option with respect to, any of the Gross
Revenues or any interest in the Reserve and Other Accounts Collateral or
(b) create or permit to exist any assignment, lien, security interest, option or
other charge or encumbrance upon or with respect to any Gross Revenues or any
Reserve and Other Accounts Collateral, except for the Liens in favor of Lender
under this Agreement and the other Loan Documents. Borrower will give Lender not
less than thirty (30) days’ prior written notice of any change in the address of
its chief executive office or its principal office. Borrower agrees that all
records of Borrower with respect to the Reserve and Other Accounts Collateral
will be kept at Borrower’s principal office and will not be removed from such
addresses without the prior written consent of Lender. Borrower will not make or
consent to any amendment or other modification or waiver with respect to any
Reserve and Other Accounts Collateral, or enter into any agreement, or permit to
exist any restriction, with respect to any Reserve and Other Accounts
Collateral. Borrower will, at its expense, defend Lender’s right, title and
security interest in and to the Reserve and Other Accounts Collateral against
the claims of any Person. Borrower will not take any action which would in any
manner impair the enforceability of this Agreement or the security interests
created hereby. Borrower will not enter into any credit agreement or other
borrowing facility including a line of credit or overdraft line, with Bank.
Nothing contained in this Section 6 shall impair or otherwise limit Borrower’s
obligations to timely make the payments (including interest and principal)
required by the Note and the other Loan Documents, it being understood that such
payments shall be so timely made in accordance with the Loan Documents,
regardless of the amounts on deposit in any Account. Lender may, from time to
time, at its sole option, perform any act which Borrower agrees hereunder to
perform which Borrower shall fail to perform after being requested in writing to
so perform within 30 days of such request (or such shorter period as may be
required by law) and Lender may from time to time take any other action which
Lender deems necessary for the maintenance, preservation or protection of any of
the rights granted to Lender hereunder. With respect to the powers conferred on
Lender hereunder, Lender shall not have any duty as to the Accounts or the other
Reserve and Other Accounts Collateral, or any responsibility for
(i) ascertaining or taking action with respect to any matters relative to the
Accounts or the other Reserve and Other Accounts Collateral, whether or not
Lender has or is deemed to have knowledge of such matters or (ii) taking any
necessary steps to preserve rights against prior parties or any other rights
pertaining to the Accounts or the other Reserve and Other Accounts Collateral.

6.9 Cash Management Fees. All fees, costs and expenses associated with the Cash
Management Agreement and Reserve and Other Accounts Collateral shall be paid by
Borrower when due.

 

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SECTION 7

NEGATIVE COVENANTS

Borrower covenants and agrees that from the date hereof and so long as this
Agreement shall remain in effect or the Note remains outstanding, Borrower shall
comply with all covenants and agreements in this Section 7.

7.1 Indebtedness. Borrower will not directly or indirectly create, incur,
assume, guaranty, or otherwise become or remain directly or indirectly liable
with respect to any Indebtedness except Permitted Indebtedness.

7.2 Liens and Related Matters. Borrower will not directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to the Mortgaged
Property or other Collateral whether now owned or hereafter acquired, or any
income or profits therefrom, except the Liens in favor of Lender under this
Agreement and the Permitted Encumbrances. Borrower shall have the right to
contest any such Lien securing Claims in accordance with Section 5.3(B), except
by their own terms or in accordance with a specific termination right granted
thereunder.

7.3 Material Rights. Without Lender’s consent, which consent shall not be
unreasonably withheld, conditioned or delayed, Borrower shall not (a) amend,
modify or waive the performance of material obligations with regard to the
Material Contracts or Proprietary Rights, (b) request a waiver or consent from,
any party to, or issuer of any of the Material Contracts or Proprietary Rights
or (c) terminate or permit termination of any Material Contracts or Proprietary
Rights.

7.4 Restriction on Fundamental Changes. Borrower shall not: (1) amend, modify or
waive in any material respect any term or provision of its Organizational
Documents, (2) liquidate, wind-up or dissolve itself (or suffer any liquidation
or dissolution); or (3) acquire by purchase or otherwise all or any part of the
business or assets of, or stock or other evidence of beneficial ownership of,
any Person. Borrower shall not issue, sell, assign, pledge, convey, dispose or
otherwise encumber any partnership, stock, membership, beneficial or other
ownership interests or grant any options, warrants, purchase rights or other
similar agreements or understandings with respect thereto. Borrower will not
establish any Subsidiaries. Borrower will not make any Investments in any other
Person.

7.5 Restriction on Leases. Except for the Guarantor Lease and as set forth
below, Borrower shall not hereafter enter into any Lease or other rental or
occupancy arrangement or concession agreement with respect to the Mortgaged
Property or any portion thereof or otherwise permit any occupancy of the
Mortgaged Property other than by Guarantor. Borrower shall not modify, amend or
terminate any Lease, give any consents, waive any obligations under any leases
or release any tenant of any Lease, without, in each instance, Lender’s consent,
such consent not to be unreasonably withheld, conditioned or delayed. Borrower
shall perform and comply, in all material respects, with all of the landlord’s
obligations under each Lease and shall not suffer or permit any material breach
or default on the part of the landlord to occur thereunder, hi addition to the
Guarantor Lease, Guarantor shall have the right to enter into subleases with
third parties for occupancy of the Improvements without Lender’s consent,
provided that (i) any such sublease shall be subject and subordinate to the
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and (ii) all subleases, in the aggregate, shall be for less than 25% of the
aggregate leaseable improved space for the Mortgaged Property. Borrower shall
provide Lender with written notice of any such permitted sublease prior to
Guarantor entering into any such sublease. In no event will Borrower enter into
any Capital Leases. Additionally, Guarantor shall have the right to assign the
Guarantor Lease to a Person which is a wholly-owned and controlled subsidiary of
Guarantor so long as Borrower and Guarantor provide not less than ten
(10) Business Days notice of such proposed assignment together with evidence to
establish the foregoing. No such sublease or assignment shall release Guarantor
from its obligations under the Guaranty.

7.6 Transactions with Affiliates. Except for the Guarantor Lease and/or
permitted by Section 7.5 above, Borrower shall not directly or indirectly enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any director,
officer, employee or Affiliate of Borrower or Guarantor, except transactions in
the ordinary course of and pursuant to the reasonable requirements of the
business of Borrower and upon fair and reasonable terms which are fully
disclosed to Lender and are no less favorable to Borrower than would be obtained
in a comparable arm’s length transaction with a Person that is not an Affiliate,
director, officer or employee of Borrower. Each such agreement with any
Affiliate, director, officer or employee of Borrower shall provide that the same
may be terminated by Lender at its option if an Event of Default exists. Other
than pursuant to the Management Agreement approved by Lender, Borrower shall not
pay any management, consulting, director or similar fees to any director,
officer, employee or Affiliate of Borrower or Guarantor.

7.7 Management Fees and Compensation; Contracts. Borrower will not enter into or
become obligated under any management (property and asset), brokerage or other
such similar agreement, whether with an Affiliate or any other Person, with
respect to the Mortgaged Property, without Lender’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, and unless
the same may be terminated, without cause and without payment of a penalty or
fee, on not more than thirty (30) days’ prior written notice. In no event will
Borrower pay a management fee in excess of the then prevailing market rates.

7.8 Conduct of Business. From and after the Closing Date, Borrower will not
engage in any business other than the ownership and operation of the Mortgaged
Property. Borrower shall not use the Mortgaged Property or any part thereof, or
allow the same to be used or occupied, for any purpose other than for the
purposes of a biopharmaceutical manufacturing facility with office and
laboratory amenities or other facility for similar use and related amenities, or
for any unlawful purpose, or in violation of any Legal Requirement. Borrower
will not suffer any act to be done or any condition to exist on the Mortgaged
Property or any part thereof or any article to be brought thereon, which may be
dangerous (unless safeguarded as required by Legal Requirement) or which may
constitute a nuisance, public or private, or which may void or make voidable any
insurance then in force with respect thereto. No tract map, parcel map,
condominium plan, condominium declaration, or plat of subdivision (or analogous
document) will be recorded with respect to the Mortgaged Property without
Lender’s consent, which consent shall not be unreasonably withheld, conditioned
or delayed. The Mortgaged Property shall not be converted to the condominium or
“cooperative” form of ownership. Borrower will not initiate or consent to any
change in the zoning of the Mortgaged Property. Borrower shall at all times
maintain good and indefeasible fee title to the Mortgaged Property free and
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encumbrances other than the Liens in favor of Lender under the Loan Documents
and the Permitted Encumbrances. Borrower shall not change its fiscal year
without giving advance notice thereof to Lender.

7.9 Use of Lender’s Name. Borrower shall not use the names of Lender or any of
Lender’s Subsidiaries or Affiliates in connection with the development,
marketing, leasing, use and operation of the Mortgaged Property. Borrower shall
not disclose or permit any Subsidiary of Guarantor or Borrower, or any officer,
director, partner, manager, member or employee of Borrower to disclose any of
the terms and conditions of the Loan to any Person except (a) to the extent
disclosed in the Mortgage and the Financing Statements, (b) to the extent such
disclosure is required pursuant to the Loan Documents or applicable legal
process, (c) to the extent, and only to the extent, such disclosure is required
pursuant to Guarantor’s reporting requirements under the Exchange Act, (d) to
the extent the content of such disclosure is already generally available to the
public, or (e) to the extent Lender consents to such disclosure.

7.10 Compliance with ERISA. Borrower shall not adopt, modify or terminate any
Employee Benefit Plans except as described in Schedule 4.10. Borrower shall not
fail to maintain and operate each existing Employee Benefit Plan in compliance
in all material respects with the provisions of ERISA, the Code and all other
applicable laws and the regulations and interpretations thereof. Borrower shall
not engage in any transaction which would cause the Obligations or any action
taken or to be taken under this Agreement or the other Loan Documents or
otherwise (or the exercise by Lender of any of its rights under the Loan
Documents) to be a non-exempt prohibited transaction under ERISA. Borrower shall
not become an “employee benefit plan” (within the meaning of Section 3(3) of
ERISA) to which ERISA applies and Borrower shall not permit its assets to be
plan assets.

7.11 Due on Sale or Encumbrance. Without Lender’s consent, which consent may be
given or withheld in the sole discretion of Lender, neither Borrower nor any
other Person directly or indirectly holding any direct or indirect legal,
beneficial, equitable or other interest in Borrower (at each and every tier or
level of ownership) shall, or permit other Persons to, Transfer (whether or not
for consideration or of record) all or any portion of the Mortgaged Property or
any direct or indirect legal, equitable, beneficial or other interest (1) in all
or any portion of the Mortgaged Property; (2) in Borrower; or (3) at each and
every tier or level of ownership, in Borrower’s direct or indirect partners,
members, shareholders, beneficial or constituent owners including Guarantor (or
the direct or indirect owners of any direct or indirect interests in any such
constituent owners), including (a) an installment sales agreement for a price to
be paid in installments; (b) except as otherwise permitted pursuant to
Section 7.5, any Leases or a sale, assignment or other transfer of, or the grant
of a security interest in, Borrower’s right, title and interest in and to any
Leases or any Rents; (c) any direct or indirect voluntary or involuntary sale of
any ownership interest in Borrower or other Person directly or indirectly owning
any direct or indirect interest in Borrower; (d) the creation, issuance or
redemption of direct or indirect ownership interests by Borrower or any Person
owning a direct or indirect interest in Borrower (at each every tier or level of
ownership); (e) any merger, consolidation, dissolution or liquidation; and
(f) without limitation of any of the foregoing, any direct or indirect voluntary
or involuntary Transfer by any Person which indirectly controls Borrower (by
operation of law or otherwise) of its direct or indirect controlling interests
in Borrower. Notwithstanding the foregoing, the following shall not be deemed to
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Transfer of an indirect ownership interest in Borrower, by the current owner
thereof to a wholly-owned subsidiary of Guarantor and (ii) Transfers of
ownership interests in a Person whose stock is publicly traded, so long as
(x) no such transfers described in parts (i) and (ii) of this sentence result in
any Person or Group acquiring, directly or indirectly, more than a forty-nine
percent (49%) direct or indirect interest in Borrower (if such Person or Group
did not prior to the Transfer, own at least forty-nine percent (49%) of the
direct or indirect ownership interests in Borrower), unless such Person or Group
acquiring, directly or indirectly, more than a forty-nine percent (49%) direct
or indirect interest in Borrower has a Credit Rating of “Baa2” or higher from
Moody’s or “BBB” or higher from S&P, or, as applicable, an equivalent rating
from another Rating Agency, or, if such Person or Group is not rated by a Rating
Agency, has (A) a Net Worth of $2,000,000,000 or more, (B) an EBITDA Interest
Coverage of 6.0 or greater and (C) a Total Debt/Capitalization no greater than
30%, and (y) no Change in Control occurs by virtue of such Transfers (other than
pursuant to clause (ii) of the definition of “Change of Control”).
Notwithstanding the foregoing, Borrower may sell Inventory in the ordinary
course of business and transfer or dispose of tangible personal property to
Persons that are not Borrower’s Affiliates, which tangible personal property is
immediately replaced by an article of equivalent suitability and value or which
is no longer necessary in connection with the operation of the Mortgaged
Property provided that such transfer or disposal will (i) not have a Material
Adverse Effect; (ii) not materially impair the utility of the Mortgaged
Property, and (iii) not result in a reduction or abatement of, or right of
offset against, the Gross Revenues payable under any Lease or otherwise, and
provided that any tangible personal property acquired by Borrower (and not so
disposed of) shall be subject to the Lien of the Mortgage. Borrower acknowledges
that Lender has examined and relied on the experience of Borrower and Guarantor
in owning and operating properties such as the Mortgaged Property in agreeing to
make the Loan and will continue to rely on such ownership of the Mortgaged
Property and Borrower and Guarantor as a means of maintaining the value of the
Mortgaged Property as security for repayment of the Loan and the performance of
the other Obligations. Borrower acknowledges that Lender has a valid interest in
maintaining the value of the Mortgaged Property so as to ensure that, should
Borrower default in the repayment of the Loan or the performance of the other
Obligations, Lender can recover the Loan by a sale of the Mortgaged Property.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Loan
immediately due and payable upon any Default under this Section 7.11.

7.12 Payments; Distributions. Except for payments of management fees otherwise
permitted to be paid to Manager under this Agreement pursuant to a Management
Agreement approved by Lender at a time when no Event of Default exists, Borrower
shall not pay any distributions, dividends or other payments or return any
capital to any of its respective partners, members, owners or shareholders or
any other Affiliate or make any distribution of assets, rights, options,
obligations or securities to any of its respective partners, members,
shareholders or owners or any other Affiliate (individually, or collectively, a
“Distribution”) unless (a) on the date of the proposed Distribution, and after
giving effect to the subsequent Distribution, no Event of Default exists;
(b) funds are not then required to be deposited into any Reserves; (c) Borrower
is not “insolvent” (as defined in the Bankruptcy Code) and will not be rendered
insolvent by virtue of such Distribution; (d) Borrower shall deliver, at least
ten (10) days in advance of the proposed Distribution, to Lender, an Officer’s
Certificate executed by the chief financial officer or similar officer of
Borrower, stating that the foregoing conditions (a), (b) and (c) have been
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7.13 Single Purpose Bankruptcy Remote Entities. Borrower hereby represents,
warrants, agrees and covenants that Borrower has, at all times, from its
formation, been, and, at all times will be, a Special Purpose Bankruptcy Remote
Entity. Borrower will not, directly or indirectly, make any change, amendment or
modification to its Organizational Documents or otherwise take any action which
could result in Borrower not being a Special Purpose Bankruptcy Remote Entity.

7.14 Alterations. Borrower shall not alter, remove or demolish or permit the
alteration, removal or demolition of, any Improvement except as the same may be
necessary in connection with (i) a Restoration in connection with a taking or
casualty in accordance with the terms and conditions of the Agreement, and
(ii) other Alterations permitted in accordance with the terms and conditions of
this Section 7.14. If no Event of Default exists, Borrower may undertake any
alteration, improvement, demolition or removal of Improvements or any portion
thereof (any such alteration, improvement, demolition or removal, an
“Alteration”) so long as (1) Borrower provides Lender with at least thirty
(30) days’ prior notice of any such Alteration, (2) such Alteration is
undertaken in accordance with the applicable provisions of this Agreement, is
not prohibited by, and is in full compliance with, and does not violate, any
Material Contracts or Legal Requirements and does not, during Construction and
upon completion, have a Material Adverse Effect, (3) such Alteration is (x) in
the nature of a Restoration required or permitted under the Agreement or (y) if
not in the nature of the Alterations contemplated by (x), if the cost of such
Alteration, as estimated by Lender, exceeds $100,000, then such Alteration has
been consented to by Lender, such consent will not be unreasonably withheld,
conditioned or delayed (and in the case of Alterations the cost of which, as
estimated by Lender, does not exceed $100,000, no such consent shall be
required), (4) Borrower has delivered to Lender copies of all plans and
specifications detailing the Alteration and (5) prior to commencement and from
time to time upon request from Lender, Borrower delivers an Officer’s
Certificate certifying that conditions (1)–(3), inclusive, have been satisfied.
Any Alteration shall, unless Lender otherwise approves or the Agreement
otherwise provides, be conducted under the supervision of an independent
architect approved by Lender (an “Independent Architect”). No Alteration (the
cost of which is in excess of $100,000) shall be undertaken until Lender has
approved plans and specifications prepared by such Independent Architect or
another Person approved by Lender, such approvals not to be unreasonably
withheld, conditioned or delayed. Notwithstanding anything contained in this
Section 7.14 to the contrary, Borrower shall have the right to make
non-structural Alterations to the Improvements, the cost of which does not
exceed $100,000 per Alteration, without Lender’s consent and without complying
with clause (3) set forth above; provided, however, that Borrower shall provide
Lender with prior written notice at least ten (10) days prior to commencing such
Alteration and prior to commencing any permitted Alteration, Borrower shall have
delivered to Lender a copy of the proposed plans and specifications for such
Alteration.

 

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SECTION 8

CASUALTY AND CONDEMNATION

8.1 Restoration Following Casualty or Condemnation. After the happening of any
casualty or condemnation to the Mortgaged Property or any part thereof, Borrower
shall give prompt notice thereof to Lender.

(a) In the event of any damage or destruction of all or any part of the
Mortgaged Property, all Proceeds shall be payable to Lender. Borrower hereby
authorizes and directs any affected insurance company or condemning Governmental
Authority or other Persons to make payment of such proceeds directly to Lender.
Borrower shall obtain Lender’s approval prior to any settlement, adjustment or
compromise of any claims for loss, damage or destruction under any policy or
policies of insurance or with respect to any condemnation, and Lender shall have
the right to participate with Borrower in negotiation of any such settlement,
adjustment or compromise provided, however, Borrower shall be permitted, so long
as no Event of Default exists, to settle insurance claims of $250,000 or less
without Lender’s approval (but with reasonable advance notice to Lender) and
utilize any such funds for Restoration. Lender shall also have the right to
appear with Borrower in any action against an insurer based on a claim for loss,
damage or destruction under any policy or policies of insurance.

(b) All compensation, proceeds, damages, claims, insurance recoveries, rights of
action and payments which Borrower may receive or to which Borrower may become
entitled with respect to the Mortgaged Property or any part thereof as a result
of any casualty or condemnation, except as set forth below in this Section 8.1
(the “Proceeds”), shall be paid over to Lender and shall be held in an escrow
account with an Acceptable Financial Institution. The Proceeds shall be applied
first toward reimbursement of all costs and expenses of Lender in connection
with recovery of the same, and then, except as set forth below in this
Section 8.1, shall be applied in the sole and absolute discretion of Lender,
without regard to the adequacy of Lender’s security hereunder, to the payment or
prepayment of the Obligations in such order as Lender may determine, and any
amounts so applied shall reduce the Obligations pro tanto (without any
Prepayment Premium due in connection therewith). Any application of the Proceeds
or any portion thereof to the Obligations shall not be construed to cure or
waive any Event of Default or invalidate any act done pursuant to any such Event
of Default.

(c) Subject to the other provisions of this Section 8.1, and provided that
(i) all Proceeds have been deposited with an Acceptable Financial Institution;
(ii) no Event of Default shall exist; (iii) a Total Loss with respect to the
Property shall not have occurred; (iv) the Restoration is capable, as reasonably
determined by Lender, of being completed before the earlier (the “Required
Restoration Date”) to occur of (x) the date which is six (6) months prior to the
Maturity Date, (y) the date on which the insurance carried by Borrower pursuant
to Section 5.4(a)(ii), with respect to the Mortgaged Property shall expire and
(z) twenty-four (24) months after the occurrence of the casualty or condemnation
in question; (v) Lender shall have been furnished with an estimate of the cost
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appropriate final plans and specifications for reconstruction of the
Improvements, all of which shall be approved by Lender, which approval shall not
be unreasonably withheld, conditioned or delayed; (vi) the Improvements so
restored or rebuilt shall be of at least equal value and substantially the same
character as prior to the damage or destruction and appropriate for the purposes
for which they were originally erected (and, if requested by Lender, Borrower
will furnish, at its expense, an appraisal confirming such valuation);
(vii) Borrower shall have furnished Lender with evidence reasonably satisfactory
to Lender that all Improvements so restored and/or reconstructed and their use
fully comply with all applicable zoning, building laws, ordinances and
regulations and other Legal Requirements and that all required licenses and
approvals required for use, operation and occupancy of the Improvements can be
obtained, to the extent available; (viii) if the estimated cost of restoration
exceeds the Proceeds available, Borrower shall have deposited with Lender such
sums or other security as may be necessary, in Lender’s reasonable judgment, to
pay such excess costs and (ix) Lender shall have received notice within thirty
(30) days of the fire or other hazard or of the condemnation proceedings
specifying the date of such fire or other hazard or the date the notice of
condemnation proceedings was received and the request to Lender to make said
Proceeds available to Borrower; then the Proceeds, less the actual costs, fees
and expenses, if any, incurred in connection with adjustment of loss and
Lender’s reasonable administrative expenses relating to such loss and the
disbursement of the Proceeds shall be made available by Lender to the payment of
all the costs of the aforesaid restoration, repairs, replacement, rebuilding or
alterations, including the cost of temporary repairs or for the protection of
property pending the completion of permanent restoration, repairs, replacements,
rebuilding or alterations (all of which temporary repairs, protection of
property and permanent restoration, repairs, replacement, rebuilding or
alterations are hereinafter collectively referred to as the “Restoration”), and
shall be paid out from time to time as such Restoration progresses upon the
request of Borrower if the work for which payment is requested has been done in
a good and workmanlike manner, in compliance with applicable Legal Requirements
and substantially in accordance with the plans and specifications therefor. Each
request by Borrower for disbursement of Proceeds shall (unless Lender otherwise
elects, in its sole discretion, with respect to a Restoration estimated by
Lender to cost $100,000 or less to complete, to waive any of the following
requirements) be accompanied by the required Lien Waivers, a Request for
Release, and, to the extent not subsumed within a Request for Release, the
following:

(1) A certificate signed by Borrower, dated not more than thirty (30) days prior
to such request, setting forth the following: (A) That the sum then requested
either has been paid, or is justly due to contractors, subcontractors,
materialmen, engineers, architects or other persons who have rendered services
or furnished materials for the restoration therein specified or have paid for
the same, the names and addresses of such persons, a brief description of such
services and materials, the several amounts so paid or due to each of said
persons in respect thereof (together with supporting statements and invoices for
the same), that no part of such expenditures has been or is being made the basis
of any previous or then pending request for the withdrawal of Proceeds or has
been made out of any of the Proceeds received by Borrower, and that the sum then
requested does not exceed the value of the services and materials described in
the certificate; and (B)

 

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That the costs, as estimated by the persons signing such certificate, of the
Restoration required to be done subsequent to the date of such certificate in
order to complete and pay for the same, do not exceed the Proceeds, plus any
amount or security approved by Lender and deposited with such Acceptable
Financial Institution by Borrower to defray such costs and remaining in the
hands of Lender after payment of the sum requested in such certificate.

(2) A title insurance report or other evidence satisfactory to Lender to the
effect that there has not been filed with respect to the Mortgaged Property, or
any part thereof, any vendor’s, contractor’s, mechanics’, laborer’s,
materialmen’s or other Lien which has not been discharged of record or bonded or
insured over, except such as will be disbursed by payment of the amount then
requested.

(3) A certificate signed by the Independent Architect and/or engineer in charge
of the Restoration, who shall be selected by Borrower and approved in writing by
Lender, certifying that the Restoration is proceeding in accordance with the
plans and specifications approved by Lender and in accordance with all zoning,
subdivision and other Legal Requirements. Upon compliance with the foregoing
provisions, Lender shall, out of Proceeds (and the amount of security approved
by Lender, if any, deposited by Borrower to defray the costs of the
Restoration), pay or cause to be paid to Borrower or the Persons named (pursuant
to clause (1)(A) above) in such certificate the respective amounts stated
therein to have been paid by Borrower or to be due to them, as the case may be.

(d) If the Proceeds at the time held by the Acceptable Financial Institution,
less the actual costs, fees and expenses, if any, incurred in connection with
the adjustment of the loss and Lender’s administrative expenses relating to such
loss and the disbursement of the Proceeds, shall be, in Lender’s reasonable
judgment, insufficient to pay the entire cost of the Restoration, Borrower shall
deposit with such Acceptable Financial Institution any such deficiency prior to
disbursement of any additional portion of the Proceeds. Lender shall at all
times have a perfected security interest on all Proceeds and other amounts held
by such Acceptable Financial Institution pursuant to this Section 8. No payment
made prior to the final completion of the Restoration shall exceed ninety-five
percent (95%) of the value of the work performed from time to time (provided
that, notwithstanding the foregoing, subcontractors who have completed their
work may be paid in full), and at all times the undisbursed balance of said
Proceeds remaining in the hands of Lender shall be at least sufficient to pay
for the cost of completion of the Restoration free and clear of liens. In
addition to the requirements and conditions set forth in Section 5.19, final
payment shall be upon an architect’s certificate of completion in accordance
with the final plans and specifications and compliance with all applicable
zoning, building, subdivision and other governmental laws, ordinances, rules,
and regulations, the filing of a notice of completion and delivery to Lender of
a certified copy of a final unconditional permanent certificate of occupancy
regarding the Restoration, provided, that if only a temporary certificate of
occupancy is available, it shall be accepted for so long as it is operative
until Borrower obtains the final certificate. To the extent available, Lender
may, at its option, require an endorsement to the Title Policy insuring the
continued priority of the lien of the Mortgage as to all sums advanced

 

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hereunder, such endorsement to be paid for by Borrower. Upon completion of the
Restoration in a good and workmanlike manner in accordance herewith, and
provided that Lender has received satisfactory evidence that the Restoration has
been paid for in full and the Mortgaged Property is free and clear of all Liens,
other than the Liens created in favor of Lender by the Loan Documents and the
Permitted Encumbrances (including signed lien waivers from all contractors and
subcontractors conditioned only on payment of amounts specified therein), any
balance of the Proceeds at the time held by Lender (after reimbursement to
Lender of all costs and expenses of Lender, including administrative expenses,
in connection with recovery of the same and disbursement of such Proceeds for
the Restoration), if any, shall be applied as follows: (i) to the extent that
such balance of the Proceeds is equal to or less than the amount, if any, by
which the value of the Mortgaged Property prior to such damage or destruction
exceeds the value of the Mortgaged Property after such Restoration (for these
purposes, the value of the Mortgaged Property shall be determined by Lender in
its discretion), then the portion of the balance of the Proceeds equal to such
excess amount shall be applied to the payment or prepayment of the principal
balance of the Obligations in such order as Lender may determine, and any
amounts so applied shall reduce the Obligations pro tanto (without any
Prepayment Premium due in connection therewith); and (ii) to the extent that the
balance of the Proceeds exceeds such excess amount, such portion of the balance
of the Proceeds shall be paid to Borrower.

(e) Nothing herein contained shall be deemed to excuse Borrower from repairing
or maintaining the Mortgaged Property as provided in the Agreement hereof or
restoring all damage or destruction to the Mortgaged Property, regardless of
whether or not there are insurance proceeds available or whether any such
Proceeds are sufficient in amount, and the application or release by Lender of
any Proceeds shall not cure or waive any Default or Event of Default or
invalidate any other act done by Lender to exercise its remedies under this
Agreement or the other Loan Documents; provided, however, if, prior to the last
two (2) years of the term of the Loan, Lender elects not to make such Proceeds
available to Borrower for restoration, then Borrower may prepay the Loan without
payment of the Prepayment Premium, so long as an Event of Default is not then in
existence.

SECTION 9

DEFAULT, RIGHTS AND REMEDIES

9.1 Event of Default. “Event of Default” means the occurrence or existence of
any one or more of the following:

(A) Payment. Failure of Borrower to pay (i) on the Maturity Date, the
outstanding principal of, accrued interest in, and other Indebtedness owing
pursuant to the Agreement, the Note and the other Loan Documents, (ii) within
five (5) days after the due date, any installment of principal or interest due
under the Note; provided, however, the aforesaid five (5) day grace period may
be utilized by Borrower no more than once in any consecutive twelve (12) Loan
Month period, or (iii) within five (5) days after the respective due date, any
other amount due under the other Loan Documents, provided, however, the
aforesaid five (5)-day grace period may be utilized by Borrower no more than
once in any consecutive twelve (12) Loan Month period.

 

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(B) Breach of Certain Provisions.

(i) Failure of Borrower to perform or comply with any term, agreement, covenant,
representation, warranty or condition contained in Sections 5.1(E), 5.1(F),
5.1(G), 5.1(H), 5.13, 6.2, 7.2, 7.5, 7.9, 7.12, 7.13, 7.14, 8.1(a), 8.1(b) or 10
and such failure is not remedied or waived within five (5) Business Days after
receipt by Borrower of notice from Lender of such failure.

(ii) Failure of Borrower to perform or comply with any term, agreement,
covenant, representation, warranty or condition contained in Sections 5.4
(except any such failure which does not result in any insurance coverage
required by Section 5.4 not in fact being in place), 7.1, 7.3, 7.4, 7.10 or
7.11.

(C) Breach of Representation and Warranty. Any representation, warranty,
certification or other statement made by Borrower or Guarantor in any Loan
Document or in any statement or certificate at any time given in writing
pursuant or in connection with any Loan Document (other than occurrences
described in other provisions of this Section 9.1 for which a different grace or
cure period is specified or which constitute immediate Events of Default) is
false in any material respect on the date made which remains uncured for five
(5) Business Days after notice, but no grace or curative period will apply if
the representation, warranty, certification or other statement was known by
Borrower or Guarantor to be false when made or deemed made.

(D) Other Defaults Under Loan Documents. A default by Borrower shall occur in
the performance of or compliance with any term contained in this Agreement or
the other Loan Documents and such default is not remedied or waived within
thirty (30) days after receipt by Borrower of notice from Lender of such default
(other than occurrences described in other provisions of this Section 9.1 for
which a different grace or cure period is specified or which constitute
immediate Events of Default); provided, however, that (i) if such default cannot
be remedied with reasonably diligent effort within a period of thirty (30) days,
but is susceptible to cure within a period of one hundred twenty (120) days and
(ii) the continued default in performance will not have a Material Adverse
Effect, such longer period, not to exceed ninety (90) additional days, as
Borrower may need to remedy such default, if Borrower is proceeding with
diligent effort to remedy such default throughout said one hundred twenty
(120)-day period; provided, further, however, that (A) if Borrower has been, and
will continue to be, diligent in its efforts to cure such default, and (B) the
continued default has not, and will not, have a Material Adverse Effect,
Borrower shall have such longer period, not to exceed an additional sixty
(60) days (for a total of one hundred eighty (180) days), as Borrower may need
to remedy such default. The rights to notice and cure periods granted herein
shall not be cumulative with any other rights to notice or a cure period in any
other Loan Document and the giving of notice or a cure period pursuant to this
section shall satisfy any and all obligations of Lender to grant any such notice
or cure period pursuant to any of the Loan Documents.

(E) Involuntary Bankruptcy; Appointment of Receiver, etc. (1) A court enters a
decree or order for relief with respect to Borrower or Guarantor in an
involuntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order is not stayed or other similar relief is not granted under any

 

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applicable federal or state law; or (2) the continuance of any of the following
events for ninety (90) days unless dismissed, bonded or discharged: (a) an
involuntary case is commenced against any Borrower or Guarantor under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or (b) a decree or order of a court for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Borrower or Guarantor or over all or a substantial part of its
property, is entered; or (c) an interim receiver, trustee or other custodian is
appointed without the consent of Borrower or Guarantor for all or a substantial
part of the property of Borrower or Guarantor.

(F) Voluntary Bankruptcy; Appointment of Receiver, etc. (1) An order for relief
is entered with respect to Borrower or Guarantor or Borrower or Guarantor
commences a voluntary case under the Bankruptcy Code or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) Borrower
or Guarantor makes any assignment for the benefit of creditors; or (3) partners,
shareholders, or members in Borrower or Guarantor adopts any resolution or
otherwise authorizes action to approve any of the actions referred to in this
Section 9.1(F).

(G) Governmental Liens. Any lien, levy or assessment is filed or recorded with
respect to or otherwise imposed upon all or any part of the Mortgaged Property
by the United States or any department or instrumentality thereof or by any
state, county, municipality or other governmental agency (other than Permitted
Encumbrances) and such lien, levy or assessment is not stayed, vacated, paid,
discharged or insured or bonded over within thirty (30) days.

(H) Judgment and Attachments. Any money judgment, writ or warrant of attachment,
or similar process (other than those described in Section 9.1(G)) involving
(1) an amount in any individual case in excess of $100,000 or (2) an amount in
the aggregate at any time in excess of $250,000 (in either case not adequately
covered by insurance as to which the insurance company has acknowledged
coverage) is entered or filed against Borrower or Guarantor and remains
undischarged, unvacated, unbonded, uninsured or unstayed for a period of thirty
(30) days or in any event later than five (5) days prior to the date of any
proposed sale thereunder.

(I) Dissolution. Any order, judgment or decree is entered against Borrower or
Guarantor decreeing the dissolution or split up of Borrower or Guarantor and
such order remains undischarged or unstayed for a period in excess of twenty
(20) days.

(J) Injunction. Either (i) Borrower or any Guarantor is enjoined, restrained or
in any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its business
relating to the any Mortgaged Property and such order continues for more than
thirty (30) days; or (ii) any order or decree is entered by any court of
competent jurisdiction directly or indirectly enjoining or prohibiting Lender,
Borrower or Guarantor from performing any of their obligations under this
Agreement or any of the other Loan Documents.

 

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(K) Invalidity of Loan Documents. Any of the Loan Documents for any reason,
other than a partial or full release in accordance with the terms of the Loan
Documents, ceases to be in full force and effect or is declared to be null and
void by a court of competent jurisdiction, or either of Borrower or Guarantor
denies that it has any further liability under any Loan Documents to which it is
party, or gives notice to such effect.

(L) Event of Default. The occurrence of an Event of Default specified elsewhere
in this Agreement or in any of the other Loan Documents or the occurrence of an
Event of Default by Guarantor under the Guaranty.

(M) Cross-Default. The occurrence of any of the following with respect to
Guarantor: (i) the acceleration of any Indebtedness in the aggregate amount of
$10,000,000 or more; (ii) the occurrence of a default under any Indebtedness in
the aggregate amount of $10,000,000 or more not cured within the grace or
curative period applicable to such Indebtedness, (iii) the occurrence of a
default or breach under any Material Contracts not cured within any applicable
grace period or notice and cure period, which, in Lender’s reasonable judgment,
could have a Material Adverse Effect, or (iv) the loss or termination of any
Proprietary Rights which, in Lender’s reasonable judgment, could have a Material
Adverse Effect.

(N) Death, etc. Dissolution, cessation of existence or felony or other criminal
conviction or indictment of Borrower and/or Guarantor, a punishment for which
could result in forfeiture of any assets of the Borrower, Guarantor or any
direct or indirect equity interest to Borrower or loss of eligibility for any
material Proprietary Rights, which in Lender’s reasonable judgment could have a
Material Adverse Effect.

(O) Zoning. The Land and Improvements or any portion thereof are zoned either
voluntarily or involuntarily, such that the zoning or other applicable land use
restriction prohibits the Borrower from operating the Land and Improvements or
any portion thereof as a pharmaceutical manufacturing, office, laboratory or
other facility for similar use pursuant to a determination that is final and
non-appealable.

(P) Tenant Impairment Event. The occurrence of a Tenant Impairment Event.

(Q) Change in Control. The occurrence of any direct or indirect Change in
Control with respect to Borrower or Guarantor, except as permitted pursuant to
Section 7.11.

(R) Drug Approval. Failure to obtain Drug Approval on or before December 31,
2007; provided, however, it shall not be an Event of Default hereunder if
Borrower delivers to Lender either an Acceptable Letter of Credit or a cash
deposit in the amount of $13,000,000, which letter or credit or cash deposit
shall be held by Lender as additional collateral until such time as Borrower
either (i) obtains Drug Approval or (ii) the Loan is repaid in full on the
Maturity Date.

(S) Construction Work. The occurrence of a Default under Sections 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8 or 5.16.

 

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(T) Cessation of Construction. Cessation of all or any material portion of the
Initial Construction Work for ten (10) or more consecutive Business Days or
thirty (30) or more calendar days in the aggregate and such default is not
waived or cured within a period of thirty (30) calendar days following
Landlord’s notice of such default (and to the extent Borrower commences such
Initial Construction Work within such thirty (30) day period following
Landlord’s notice, such ten (10) and thirty (30) day periods shall be deemed
extended until such commencement, but in no event beyond thirty (30) days of
Lender’s notice.

9.2 Acceleration and Remedies. Upon the occurrence of any Event of Default
specified in Sections 9.1(E) and 9.1(F), payment of all Obligations shall be
accelerated without notice, presentment, demand, protest or notice of protest
and shall be immediately due and payable and, in addition, Lender may in
addition to any other rights and remedies available to Lender at law or in
equity or under any other Loan Documents, exercise one of more of the following
rights and remedies as it, in its sole discretion, deems necessary or advisable.
Upon the occurrence of any Event of Default (other than Events of Default
specified in Sections 9.1(E) and 9.1(F)), Lender, in addition to any other
rights or remedies available to Lender at law or in equity, or under any of the
other Loan Documents, may exercise any one or more of the following rights and
remedies as it, in its sole discretion, deems necessary or desirable:

(a) Acceleration. Declare immediately due and payable, without further notice,
protest, presentment, notice of protest or demand, all Obligations including all
monies advanced under this Agreement, the Note, the Mortgage and/or any of the
Loan Documents which are then unpaid, together with all interest then accrued
thereon and all other amounts then owing (including any Default Interest, or
prepayment premium owed as a result of such acceleration). If payment of the
Obligations is accelerated, Lender may, in its sole discretion, exercise all
rights and remedies hereunder and under the Note, the Mortgage and/or any of the
other Loan Documents at law, in equity or otherwise.

(b) Possession. Enter upon and take possession of the Mortgaged Property and
proceed in the name of Lender or Borrower as the attorney-in-fact of Borrower
(which authority, to the extent permitted by law, is hereby granted by Borrower,
is coupled with an interest, and is irrevocable), as Lender shall elect. If
Lender elects to so enter upon and take possession of the Mortgaged Property,
Lender (i) may enforce or cancel all contracts entered into by Borrower or make
other contracts which are in Lender’s sole opinion advisable, and (iii) shall be
reimbursed by Borrower upon demand any reasonable amount or amounts expended by
Lender for such performance together with any reasonable costs, charges, or
expenses incident thereto or otherwise incurred or expended by Lender or its
representatives (including an appraisal) on behalf of Borrower in connection
with the Mortgaged Property, and the amounts so expended shall be considered
part of the Loan evidenced by the Note and secured by the Loan Documents and
shall bear interest at the Default Rate.

(c) Injunctive Relief. Institute appropriate proceedings for injunctive relief
(including specific performance of the obligations of Borrower).

(d) Accounts. Release all funds contained in the Reserve Accounts to be applied
to Borrower’s Obligations.

 

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(e) Construction Work. Enter upon and take possession of the Mortgaged Property
and all material, equipment and supplies thereon and do anything necessary or
desirable to complete the Initial Construction Work and to fulfill the
obligations of Borrower hereunder and to sell, manage, maintain, repair and
protect the Mortgaged Property. Without limiting the generality of the foregoing
and for the purposes aforesaid, Borrower hereby appoints and constitutes Lender
its lawful attorney-in-fact with full power of substitution to (i) use any funds
of Borrower, including any Loan balance which might not have been disbursed for
the purpose of causing the Completion of Initial Construction Work, (ii) make
such changes to the Project Plans and Specifications for the Initial
Construction Work as Lender may deem desirable to cause the Completion of
Initial Construction Work, (iii) execute all applications and certificates in
the name of Borrower which may be required to carry out the intent and purpose
hereof and (iv) employ such contractors, subcontractors, architects and others
as Lender may deem appropriate.

(f) Cessation of Loan Funding. Cease disbursement of Loan Proceeds.

9.3 Remedies Cumulative; Waivers; Reasonable Charges. All of the remedies given
to Lender in the Loan Documents or otherwise available at law or in equity to
Lender shall be cumulative and may be exercised separately, successively or
concurrently. Failure to exercise any one of the remedies herein provided shall
not constitute a waiver thereof by Lender, nor shall the use of any such
remedies prevent the subsequent or concurrent resort to any other remedy or
remedies vested in Lender by the Loan Documents or at law or in equity. To be
effective, any waiver by Lender must be in writing and such waiver shall be
limited in its effect to the condition or default specified therein, and no such
waiver shall extend to any subsequent condition or default. It is agreed that
(i) the actual costs and damages that Lender would suffer by reason of an Event
of Default (exclusive of the attorneys’ fees and other costs incurred in
connection with enforcement of Lender’s rights under the Loan Documents) or a
prepayment would be difficult and needlessly expensive to calculate and
establish, and (ii) the amounts of the Default Rate, the Late Charge, and the
Prepayment Premium are reasonable, taking into consideration the circumstances
known to the parties at this time, and (iii) the Default Rate, the Late Charges
and Lender’s reasonable attorneys’ fees and other costs and expenses incurred in
connection with enforcement of Lender’s rights under the Loan Documents shall be
due and payable as provided herein, and (iv) the Default Rate, Late Charges,
Prepayment Premium, and the obligation to pay Lender’s reasonable attorneys’
fees and other enforcement costs do not, individually or collectively,
constitute a penalty.

SECTION 10

SECONDARY MARKET TRANSACTION

10.1 Secondary Market Transaction. Borrower agrees that Lender has the absolute
right to securitize, syndicate, grant participations in, or otherwise Transfer
all or any portion of the Loan (each such transaction, a “Securitization”).
Lender may determine to Transfer some or all of the Loan or retain title to some
or all of the Loan as part of a Securitization. Borrower further agrees that
Lender may delegate any or all of Lender’s rights, powers and privileges to a
servicer (“Servicer”) and Borrower shall, upon notice from Lender, recognize the
Servicer as the agent of Lender. In the event this Loan becomes or is designated
by Lender to become an asset of a Securitization, upon Lender’s request,
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representatives of the Rating Agencies in connection with such a Securitization
to discuss the business and operations of the Mortgaged Property and, in that
regard, agrees to cooperate with the reasonable requests of the Rating Agencies
including delivering any existing environmental information relating to the
Mortgaged Property in Borrower’s possession. Lender may retain the Rating
Agencies to provide rating surveillance services on any certificates issued in a
Securitization. In no event shall Borrower be required to pay any servicer fees,
Securitization trustee fees or other Securitization administrative expenses
except as may be expressly provided in this Agreement. Borrower shall, upon
request from Lender, from time to time, cooperate, and Borrower shall, cause
Guarantor to cooperate, in all reasonable respects in connection with a
Securitization. Such cooperation may, in Lender’s discretion, include
documentation changes, changes in organizational documents, changes in Accounts,
Reserves, Payment Dates, Interest Periods, insurance endorsement changes, tenant
payment direction changes, site inspections, updated appraisals, preparation and
delivery of financial information or other diligence requested by Lender and/or
any Rating Agency; provided, however, any third party costs incurred by Borrower
related to such changes shall be reimbursed by Lender and such changes shall not
materially and adversely diminish Borrower’s rights under the Loan Documents nor
increase Borrower’s burdens and obligations under the Loan Documents. Such
cooperation may include, in Lender’s discretion, execution of one or more
promissory notes and the creation of Liens securing such notes of differing
priority and/or the creation of mezzanine debt secured by pledges of all of the
membership interests in the Borrower so long as the principal amount, interest
rate, payment terms and other monetary terms of the Loan do not, in the
aggregate change. Borrower will not be required to incur more than de minimis
expenses or costs pursuant to this Section 10.1, except to the extent Borrower
is otherwise obligated under the Loan Documents to pay such costs and expenses.
Borrower will, upon request from Lender, in connection with a Securitization,
enter into such acknowledgments and confirmations of the applicable assignments
as Lender may request. Borrower shall, subject to the terms and provisions of
this Section 10.1, use reasonable efforts to satisfy the market standards which
Lender determines are reasonably required in the marketplace or by the Rating
Agencies in connection with a Securitization. Borrower will not, pursuant to any
of the provisions of this Section 10.1, incur, suffer or accept (except to a de
minimis extent) (i) any lesser rights or greater obligations as are currently
set forth in the Loan Documents or Borrower’s Organizational Documents (unless
Borrower is made whole by the holder of the Note) or (ii) subject to
Section 11.13 hereof, any personal liability other than as set forth in the Loan
Documents. Borrower will also, if requested by Lender, cause independent counsel
to render opinions customary in securitization transactions with respect to the
Mortgaged Property and Borrower and its Affiliates (but not a true sale, 10b-5
or nonconsolidation opinion), which counsel and opinions shall be reasonably
satisfactory to Lender and the Rating Agencies and which shall be addressed to
such Persons as shall be reasonably designated by the holder of the Note.
Borrower’s failure to deliver the opinions required hereby within fifteen
(15) Business Days after written request therefor shall constitute an Event of
Default hereunder. If requested by Lender, Borrower’s cooperation will also
include (but subject to Section 11.13) certifications and agreements pursuant to
which Borrower will certify that it has examined the portion of applicable
preliminary and final private placement memorandum or preliminary, final and
supplement or prospectus specified by Lender as pertaining to Borrower, the
Loan, Guarantor, Borrower’s Affiliates, the Mortgaged Property and the Manager,
and that each such designated portion, as it relates to Borrower, Guarantor,
Borrower’s Affiliates, the Mortgaged Property, Manager and all

 

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other aspects of the Loan, does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not
misleading. Such agreement may, if requested by Lender, require Borrower to
indemnify, defend, protect and hold harmless Lender and other Persons designated
by Lender from and against any losses, claims, damages, liabilities, costs and
expenses that arise out of or are based upon any untrue statement of any
material fact contained in the reviewed documents or other information or
documents prepared by Borrower, Guarantor or their Affiliates and provided to
Lender or in any representation or warranty of Borrower or Guarantor contained
in the Loan Documents or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated in such
information or necessary in order to make the statements in such information not
materially misleading.

SECTION 11

MISCELLANEOUS

11.1 Expenses and Attorneys’ Fees. Whether or not the transactions contemplated
hereby shall be consummated, Borrower agrees to promptly pay all fees, costs and
expenses (including reasonable attorneys’ fees, court costs, cost of appeal and
the reasonable fees, costs and expenses of other professionals retained by
Lender) incurred by Lender in connection with the following, and all such fees,
costs and expenses shall be part of the Obligations, payable on ten
(10) Business Days written notice: (A) the examination, review, due diligence
investigation, documentation and closing of the financing arrangements evidenced
by the Loan Documents; (B) the giving or withholding of any consents, approvals,
or permissions, administration of the Loan, disbursements of the Loan and
disbursements from the Accounts and in connection with any amendments,
modifications and waivers relating to the Loan Documents requested by Borrower;
(C) the review, documentation, negotiation and closing of any subordination or
intercreditor agreements, Lease reviews, and subordination, nondisturbance and
attornment agreements; (D) Lender’s Representatives including Lender’s
Construction Consultant; and (E) enforcement of this Agreement or the other Loan
Documents, the collection of any payments due from Borrower or Guarantor under
the Loan Documents or any refinancing or restructuring of the credit
arrangements provided under the Loan Document, whether in the nature of a
“workout” or in connection with any insolvency or bankruptcy proceedings or
otherwise.

11.2 Certain Lender Matters. Lender may, in accordance with Lender’ customary
practices, destroy or otherwise dispose of all documents, schedules, invoices or
other papers, delivered by Borrower to Lender unless Borrower requests, at the
time of delivery, in writing that same be returned. Borrower and Lender intend
that the relationships created hereunder and under the other Loan Documents be
solely that of borrower and lender. Nothing herein or therein is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between Borrower and Lender nor to grant Lender any interest in the
Mortgaged Property other than that of mortgagee, beneficiary or lender. No
provision in this Agreement or in any of the other Loan Documents and no course
of dealing between the parties shall be deemed to create any fiduciary duty by
Lender to Borrower or any other Person. All attorneys, accountants, appraisers,
and other professional Persons and consultants retained by Lender shall have the
right to act exclusively in the interest of Lender and shall have no duty of
loyalty, duty of care or any other duty to Borrower or any of Borrower’s
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Affiliates or any other Person. By accepting or approving anything required to
be observed, performed or fulfilled or to be given to Lender pursuant to the
Loan Documents, Lender shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or representation with respect hereto or
thereto by Lender. Borrower shall rely solely on its own judgment and advisors
in entering into the Loan without relying in any manner on any statements,
representations or recommendations of Lender or any Parent, subsidiary or
Affiliate of Lender or their respective attorneys, advisors, accountants,
officers, representatives, directors, employees, partners, shareholders,
trustees, members or managers. Lender shall not be subject to any limitation
whatsoever in the exercise of any rights or remedies available to it under any
of the Loan Documents or any other agreements or instruments which govern the
Loan by virtue of the ownership by it or any Parent, subsidiary or Affiliate of
Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action, in
either case, on the basis of the foregoing with respect to Lender’s exercise of
any such rights or remedies. Borrower acknowledges that Lender engages in the
business of real estate financings and other real estate transactions and
investments which may be viewed as adverse to or competitive with the business
of Borrower or its Affiliates. LENDER SHALL HAVE NO LIABILITY HEREUNDER FOR ANY
CONSEQUENTIAL, SPECIAL, PUNITIVE OR INDIRECT DAMAGES. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Borrower or Guarantor, or their
respective creditors or property, Lender, to the extent permitted by law, shall
be entitled to file such proofs of claim and other documents as may be necessary
or advisable in order to have the claims of Lender allowed in such proceedings
for the entire secured Obligations at the date of the institution of such
proceedings and for any additional amount which may become due and payable by
Borrower after such date. Lender shall have the right from time to time to
designate, appoint and replace one or more servicers and to allow servicer to
exercise any and all rights of Lender under the Loan Documents. All documents
and other matters required by any of the provisions of this Agreement to be
submitted or provided to Lender shall be in form and substance satisfactory to
Lender. Borrower shall not be entitled to (and does hereby waive any and all
rights to receive) any notices of any nature whatsoever from Lender except with
respect to matters for which the Loan Documents expressly provide for the giving
of notice by Lender to Borrower. In any action or proceeding brought by Borrower
against Lender claiming or based upon an allegation that Lender unreasonably
withheld its consent to or approval of a proposed act by Borrower which requires
Lender’s consent hereunder, Borrower’s sole and exclusive remedy in said action
or proceeding shall be injunctive relief or specific performance requiring
Lender to grant such consent or approval.

11.3 Indemnity. In addition to the payment of expenses pursuant to Section 11.1
and the indemnification obligations set forth in other portions of this
Agreement, the Environmental Indemnification Agreement or the other Loan
Documents, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to indemnify, pay, defend and hold Lender, its
officers, directors, members, partners, shareholders, participants,
beneficiaries, trustees, employees, agents, successors and assigns, any
subsequent holder of the Note, any trustee, fiscal agent, servicer, underwriter
and placement agent, (collectively, the “Indemnitees”) harmless from and against
any and all actual costs and expenses incurred by Indemnitees in connection with
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judgments, causes of action, suits, claims, tax liabilities, broker’s or finders
fees, costs, expenses and disbursements of any kind or nature whatsoever
(including the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party thereto) that may be imposed on, incurred by, or asserted against that
Indemnitee, based upon any third party claims against such Indemnitees in any
manner related to or arising out of (A) any breach by Borrower or Guarantor of
any representation, warranty, covenant, or other agreement contained in any of
the Loan Documents, (B) the actual or threatened presence, release, disposal,
spill, escape, leakage, transportation, migration, seepage, discharge, removal,
or cleanup of any Hazardous Material located on, about, within, under,
affecting, from or onto the Mortgaged Property or any violation of any
applicable Environmental Law by Borrower or the Mortgaged Property, or (C) the
use or intended use of the proceeds of any of the Loan (the foregoing
liabilities herein collectively referred to as the “Indemnified Liabilities”);
provided that Borrower shall have no obligation to an Indemnitee hereunder with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of that Indemnitee as determined in a final order by a court of
competent jurisdiction. Borrower shall be relieved of its obligation under
clause (B) of this Section 11.3 with respect to Hazardous Materials first
introduced to the Land and Improvements after either (1) the foreclosure of the
Mortgage or (2) the delivery by Borrower to, and acceptance by, Lender or its
designee of a deed-in-lieu of foreclosure with respect to the Mortgaged
Property. To the extent that the undertaking to indemnify, pay, defend and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Borrower shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them. If any such action or other proceeding shall be
brought against Lender, upon written notice from Borrower to Lender (given
reasonably promptly following Lender’s notice to Borrower of such action or
proceeding), Borrower shall be entitled to assume the defense thereof, at
Borrower’s expense, with counsel reasonably acceptable to Lender; provided,
however, Lender may, at its own expense, retain separate counsel to participate
in such defense, but such participation shall not be deemed to give Lender a
right to control such defense, which right Borrower expressly retains.
Notwithstanding the foregoing, each Indemnitee shall, following notice to and
consultation with Borrower, have the right to employ separate counsel at
Borrower’s expense if, in the reasonable opinion of legal counsel, a conflict or
potential conflict exists between the Indemnitee and Borrower that would make
such separate representation advisable. Borrower shall have no obligation to
indemnify an Indemnitee for damage or loss resulting from such Indemnitee’s
gross negligence or willful misconduct. In no event shall the indemnification
contained herein include consequential or punitive damages resulting from any
claims brought directly by Lender, however, to the extent the indemnification
relates to environmental issues and to third party claims, such environmental
related indemnification shall include consequential and punitive damages.

11.4 Amendments and Waivers. Except as otherwise provided herein, no amendment,
modification, termination or waiver of any provision of this Agreement, the Note
or any other Loan Document, or consent to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender
(and, with respect to any amendment or modification, unless also signed by
Borrower). Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
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was given. No notice to or demand on Borrower in any case shall entitle
Borrower, or any other Person to any other or further notice or demand in
similar or other circumstances. To the fullest extent permitted by law,
Borrower, for itself and its successors and assigns, waives all rights to a
marshalling of the assets of Borrower, Borrower’s partners or members and others
with interests in Borrower, and of the Mortgaged Property, or to a sale in
inverse order of alienation in the event of foreclosure of all or any of the
Mortgage, and agrees not to assert any right under any laws pertaining to the
marshalling of assets, the sale in inverse order of alienation, homestead
exemption, the administration of estates of decedents, or any other matters
whatsoever to defeat, reduce or affect the right of Lender under the Loan
Documents to a sale of the Mortgaged Property for the collection of the
obligations without any prior or different resort for collection or of the right
of Lender to the payment of the obligations owing Lender on account of the Loan
Documents out of the net proceeds of the Mortgaged Property in preference to
every other claimant whatsoever. In addition, Borrower, for itself and its
successors and assigns, waives in the event of foreclosure of the Mortgage, any
equitable right otherwise available to Borrower which would require the separate
sale of any of any portion of the Mortgaged Property or require Lender to
exhaust its remedies against any portion of the Mortgaged Property or any
combination of the Mortgaged Property before proceeding against any other
portion; and further in the event of such foreclosure, Borrower expressly
consents to and authorizes, at the option of Lender, the foreclosure and sale
either separately of all or any portion of the Mortgaged Property. Borrower
hereby waives the right to assert a counterclaim, other than a compulsory
counterclaim or defense of performance, in any action or proceeding brought
against it by Lender or its agents. No failure or delay on the part of Lender or
any holder of any Note in the exercise of any power, right or privilege
hereunder or under the Note or any other Loan Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under this Agreement, the
Note and the other Loan Documents are cumulative to, and not exclusive of, any
rights or remedies otherwise available. Lender shall not be under any obligation
to marshal any assets in favor of any Person or against or in payment of any or
all of the Obligations. To the extent that any Person makes a payment or
payments to Lender, or Lender enforces its remedies or exercise its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
if any, rights and remedies therefore, shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement or
setoff had not occurred. Borrower agrees (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive Borrower from paying all or any portion
of the principal of, premium, if any, or interest on Loan contemplated herein or
in any of the other Loan Documents or which may affect the covenants or the
performance of this Agreement; and Borrower (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
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execution of any power herein granted to the holders, but will suffer and permit
the execution of every such power as though no such law had been enacted.

11.5 Notices. Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given shall be in writing addressed to
the respective party as set forth below and may be personally served, telecopied
(with request for confirmation) or sent by overnight courier service or United
States registered mail return receipt requested, postage prepaid. Any notice so
given shall be deemed effective upon delivery or on refusal or failure of
delivery during normal business hours. Notices shall be addressed to the parties
at the addresses specified on Schedule 11.5 or to such other address as the
party addressed shall have previously designated by written notice to the
serving party, given in accordance with this Section 11.5.

11.6 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loan hereunder and the execution
and delivery of the Notes. Notwithstanding anything in this Agreement or implied
by law to the contrary, the provisions of Sections 2.6, 5.8, 11.1, 11.2, 11.3,
11.12, 11.13 and 11.15 shall survive the payment of the Loan and the termination
of this Agreement. Subject to this Section 11.6, all other representations,
warranties and agreements of Borrower and Lender set forth in this Agreement
shall terminate upon indefeasible payment in full of the Loan and the
termination of this Agreement.

11.7 Miscellaneous. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect. All covenants and
agreements hereunder shall be given in any jurisdiction independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default if such action is taken or condition exists.
The invalidity, illegality or unenforceability in any jurisdiction of any
provision in or obligation under this Agreement, the Note or other Loan
Documents shall not affect or impair the validity, legality or enforceability of
the remaining provisions or obligations under this Agreement, the Note or other
Loan Documents or of such provision or obligation in any other jurisdiction.
This Agreement is made for the sole benefit of Borrower and Lender, and no other
Person shall be deemed to have any privity of contract hereunder nor any right
to rely hereon to any extent or for any purpose whatsoever, nor shall any other
person have any right of action of any kind hereon or be deemed to be a third
party beneficiary hereunder. This Agreement, the Note, and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto. Borrower
and Lender acknowledge that each of them has had the benefit of legal counsel of
its own choice and has been afforded an opportunity to review this Agreement and
the other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by Borrower and
Lender. If any term, condition or provision of this Agreement shall be
inconsistent with any term, condition or provision of any other Loan Document,
this Agreement shall control. This Agreement and any amendments, waivers,
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number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which counterparts together shall constitute but one and the same
instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

11.8 APPLICABLE LAW. THE PARTIES ACKNOWLEDGE AND AGREE THAT THE LOAN AND LOAN
DOCUMENTS HAVE A SUBSTANTIAL NEXUS TO THE STATE OF NEW YORK AND AGREE THAT THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

11.9 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
except that Borrower may not assign its rights or obligations hereunder or under
any of the other Loan Documents without the written consent of Lender. Any
assignee of Lender’s interest in the Loan Documents shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to the Loan
Documents which Borrower may otherwise have against any assignor of the Loan
Documents.

11.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. BORROWER AND LENDER HEREBY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE
COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER AND LENDER ACCEPT FOR
ITSELF, RESPECTIVELY, AND IN CONNECTION WITH THE MORTGAGED PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENT, AND IRREVOCABLY AGREE TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE NOTE, SUCH
OTHER LOAN DOCUMENTS OR SUCH OBLIGATION. BORROWER DESIGNATES AND APPOINTS
CORPORATION SERVICE COMPANY AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED
BY BORROWER WITH LENDER’S APPROVAL WHICH IRREVOCABLY AGREE IN WRITING TO SO
SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY
BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY
SUCH PROCESS SO SERVED SHALL BE MADE IN ACCORDANCE WITH THE LAWS GOVERNING A THE
TIME OF SERVICE TO THE ADDRESS PROVIDED IN SUBSECTION 11.5 EXCEPT THAT UNLESS
OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT
AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY BORROWER AS
ITS AGENT FOR SERVICE OF PROCESS REFUSES TO ACCEPT SERVICE OF PROCESS, BORROWER
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT SERVICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

 

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11.11 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. BORROWER AND LENDER ALSO WAIVE ANY BOND
OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF BORROWER OR LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WELL CONTINUE TO
RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOAN. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

11.12 Publicity. Lender (and Lender’s Affiliates) may, subject to the applicable
limitations on distribution of Confidential Information set forth in this
Section 11.12 and subject to the approval of Guarantor, such approval not to be
unreasonably withheld, and Borrower does hereby authorize Lender (and its
Affiliates) to, refer, in its sole discretion, to the Loan in tombstone
advertisements, offering memoranda in connection with Securitizations and
reports to investors, which references, may include use of photographs, drawings
and other depictions, images of the Land and Improvements (provided that such
photographs, drawings and other depictions, and/or images shall not include
floor plans of the area behind the barrier or other trade secrets), a
description of the Loan, use of Borrower’s name, the address of the Mortgaged
Property and the logo of Borrower and/or Guarantor. Borrower shall cause the
owner of such “logo” rights to consent to such use upon request from Lender at
the Closing. Lender hereby agrees that (i) any written information, data,
documents, etc. delivered in connection with the making of the Loan which has
been expressly designated as such by notice to Lender from Borrower, (ii) any
information contained in the books and records of Borrower or Guarantor which is
either confidential, proprietary, or otherwise not generally available to the
public (but excluding information Lender has obtained independently from
third-party sources without Lender’s knowledge that the source has violated any
fiduciary or other duty not to disclose such information) and which has been
expressly designated as such by notice to Lender from Borrower, (iii) any
financial statements of Borrower provided pursuant to this Agreement which are
not publicly available and which has been expressly designated as confidential
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Lender from Borrower, and (iv) any other information, data, documents, etc.
which are delivered to or received by Lender and which are conspicuously stamped
or marked “CONFIDENTIAL”, or, if delivered or received pursuant to an oral
communication, such communication is subsequently referred to in a writing
memorializing such communication delivered to Lender within thirty (30) days of
such communication and marked as “CONFIDENTIAL” (collectively, the “Confidential
Information”), will be kept confidential by Lender, using the same standard of
care in safeguarding the Confidential Information as Lender employs in
protecting its own proprietary information which Lender desires not to
disseminate or publish. Notwithstanding the foregoing, Confidential Information
may be disseminated (a) pursuant to the requirements of applicable law,
(b) pursuant to judicial process, administrative agency process or order of
Governmental Authority, (c) in connection with litigation, arbitration
proceedings or administrative proceedings before or by any Governmental
Authority or stock exchange, (d) to Lender’s attorneys, accountants, advisors
and actual or prospective financing sources who will be instructed to comply
with this Section 11.12, (e) to the Rating Agencies, (f) to actual or
prospective trustees, assignees, pledgees, participants, agents, servicers, or
securities holders in a Securitization, and (g) pursuant to the requirements or
rales of a stock exchange or stock trading system on which the Securities of
Lender or its Affiliates may be listed or traded. In addition, notwithstanding
any other provision, any party (and its employee, representative or other agent)
may disclose to any and all persons, without limitation of any kind, any
information with respect to the tax treatment and tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to such party relating to such
tax treatment and tax structure, if required by applicable law. For purposes of
this Section 11.12, Confidential Information will not be deemed to include the
Loan amount and the other terms, conditions and provisions of the Loan
Documents, the street address and common name, if any, of the Land and
Improvements and the name of Borrower and Guarantor, the logo of Borrower and
/or Guarantor and photographs or other depictions of the Mortgaged Property
(provided that such photographs or other depictions shall not include floor
plans of the area behind the barrier or other trade secrets). Notwithstanding
the foregoing, in the event Borrower or Guarantor conspicuously marks specific
information, data, documents, etc. or with respect to an oral communication, in
a subsequent writing memorializing such communication delivered to Lender within
thirty (30) days of such communication marked as, “CONFIDENTIAL: FOR LENDER’S
INTERNAL USE ONLY; NOT FOR DISTRIBUTION,” then Lender may only disseminate such
information, data, documents, etc. pursuant to the requirements of applicable
law (including pursuant to an order of a Governmental Authority) or pursuant to
the written consent of Borrower or Guarantor.

11.13 Recourse Loan. Borrower shall have full personal recourse liability for
the Obligations incurred under this Agreement, this Note or any of the other
Loan Documents. Such liability shall not be imputed to any member, officer,
director, employee of Borrower solely by virtue of such relationship to
Borrower; provided, however, that such qualification shall not affect
Guarantor’s liability under the Guaranty and shall not impute liability to any
member, officer, director, employee of Guarantor.

11.14 Performance by Lender/Attorney-in-Fact. In the event that Borrower shall
at any time fail to duly and punctually pay, perform, observe or comply with any
of its covenants and agreements hereunder or under the other Loan Documents or
if any Event of Default hereunder shall exist, then Lender may (but shall in no
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perform any such term, provision, condition, covenant or agreement or cure any
such Event of Default. Lender shall not take action under this Section 11.14
prior to the occurrence of an Event of Default unless in Lender’s good faith
judgment reasonably exercised, such action is necessary or appropriate in order
to preserve the value of the Collateral, to protect Persons or property, or
Borrower has abandoned the Mortgaged Property or any portion thereof. Lender
shall not be obligated to continue any such action having commenced the same and
may cease the same without notice to Borrower. Any amounts expended by Lender in
connection with such action shall constitute additional advances hereunder, the
payment of which is additional Indebtedness, secured by the Loan Documents and
shall become due and payable within ten (10) days of demand by Lender, with
interest at the Default Rate from the date of disbursement thereof until fully
paid. No further direction or authorization from Borrower shall be necessary for
such disbursements. The execution of this Agreement by Borrower shall and hereby
does constitute an irrevocable direction and authorization to Lender to so
disburse such funds. Borrower hereby irrevocably appoints Lender, as its
attorney-in-fact, coupled with an interest, with full authority in the place and
stead of Borrower and in the name of Borrower or otherwise (A) during the
existence of an Event of Default in the discretion of Lender, to take any action
and to execute any instrument which Lender may deem necessary to accomplish the
purpose of this Agreement or any other Loan Document, including the following:
(i) to ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for monies due and to become due under or in respect of
the Accounts and/or any of the Reserve and Other Accounts Collateral; (ii) to
receive, endorse, and collect (x) any Gross Revenues, (y) any instruments made
payable to any Borrower representing any dividend, payment of principal,
interest, redemption price, purchase price or other distribution or payment in
respect of any Reserve and Other Accounts Collateral, or (z) any other
instruments, documents and chattel paper received in connection with this
Agreement or any other Loan Document; and (iii) to file any claims, or take any
action or institute any proceedings which Lender shall deem necessary or
desirable for the collection of any Gross Revenues in the event Borrower shall
fail to do so, or to otherwise enforce the rights of Lender with respect to this
Agreement; (B) to execute and/or file, without the signature of Borrower any
Uniform Commercial Code financing statements, continuation statements, or other
filing, and any amendment thereof, relating to the Reserve and Other Accounts
Collateral; (C) to give notice to any third parties which may be required to
perfect Lender’s security interest in the Reserve and Other Accounts Collateral;
and (D) during the existence of an Event of Default, to register, purchase,
sell, assign, transfer, pledge or take any other action with respect to any
Reserve and Other Accounts Collateral in accordance with this Agreement or any
Loan Document. Lender shall notify Borrower of Lender’s taking of any action as
attorney-in-fact, or otherwise in Borrower’s name, pursuant to the provisions of
this Section.

11.15 Brokerage Claims. Borrower shall protect, defend, indemnify and hold
Lender harmless from and against all loss, cost, liability and expense incurred
as a result of any claim for a broker’s or finder’s fee against Lender or any
Person, in connection with the transaction herein contemplated, provided such
claim is made by or arises through or under Borrower or is based in whole or in
part upon alleged acts or omissions of Borrower. Lender shall protect, defend,
indemnify and hold Borrower harmless from and against all loss, cost, liability
and expense incurred as a result of any claim for a broker’s or finder’s fee
against Borrower or any other Person in connection with the transaction herein
contemplated, provided such claim is made by

 

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or arises through or under Lender or is based in whole or in part upon alleged
acts or omissions of Lender.

11.16 Agreement. THE RIGHTS AND OBLIGATIONS OF BORROWER AND LENDER SHALL BE
DETERMINED SOLELY FROM THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AND ANY PRIOR ORAL OR WRITTEN AGREEMENTS BETWEEN LENDER AND BORROWER CONCERNING
THE SUBJECT MATTER HEREOF AND OF THE OTHER LOAN DOCUMENTS ARE SUPERSEDED BY AND
MERGED INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY NOT BE VARIED BY ANY ORAL AGREEMENTS OR DISCUSSIONS
THAT OCCUR BEFORE, CONTEMPORANEOUSLY WITH, OR SUBSEQUENT TO THE EXECUTION OF
THIS LOAN AGREEMENT OR THE LOAN DOCUMENTS. THIS WRITTEN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

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Witness the due execution hereof by the undersigned as of the date first written
above.

 

BORROWER:

ALEXION MANUFACTURING LLC,

a Delaware limited liability company

By:  

ALEXION PHARMACEUTICALS, INC.,

a Delaware corporation, its sole member

  By:   /s/ David Keiser   Name:   David Keiser   Title:   President/COO LENDER:
iSTAR FINANCIAL INC., a Maryland corporation By:   Illegible Name:   Illegible
Title:   Exec. V. P.