Exhibit 10.27

 

*** Confidential material redacted and filed separately with the Commission.

 

Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the Commission.

 

 

LEASE AGREEMENT

 

by

 

AUGUSTINE LAND I, L.P.

 

and

 

INCYTE CORPORATION

 

Building/Premises:

 

1801 Augustine Cut-Off, Wilmington, Delaware, 19803

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

BASIC LEASE PROVISIONS

1

 

 

 

1.

PREMISES; TENANT IMPROVEMENTS

5

 

 

 

2.

TERM; RENEWAL

8

 

 

 

3.

LETTER OF CREDIT

16

 

 

 

4.

USE OF PREMISES

17

 

 

 

5.

MINIMUM RENT; ADDITIONAL RENT

17

 

 

 

6.

COVENANT TO PAY RENT AND ADDITIONAL RENT

24

 

 

 

7.

ASSIGNMENT AND SUBLETTING

24

 

 

 

8.

ALTERATIONS

26

 

 

 

9.

LIENS

27

 

 

 

10.

NOTICE OF BREAKAGE

28

 

 

 

11.

REPAIR AND CONDITION OF PREMISES

28

 

 

 

12.

HAZARDOUS MATERIALS

29

 

 

 

13.

FIRE AND OTHER CASUALTY

31

 

 

 

14.

INSURANCE; WAIVER OF SUBROGATION

33

 

 

 

15.

INDEMNIFICATION

35

 

 

 

16.

COMPLIANCE WITH LAW; ZONING

36

 

 

 

17.

LANDLORD SERVICES

36

 

 

 

18.

LANDLORD’S RIGHT TO ENTER

39

 

 

 

19.

TENANT DEFAULT/LANDLORD’S REMEDIES/SPECIAL LIMITATION ON LIABILITY

39

 

 

 

20.

LANDLORD DEFAULT/TENANT’S REMEDIES/LIMITATION ON LIABILITY

42

 

 

 

21.

SUBORDINATION AND NON-DISTURBANCE

43

 

 

 

22.

CONDEMNATION

44

 

 

 

23.

CERTIFICATES

45

 

 

 

24.

NOTICES

45

 

 

 

25.

BROKERS

46

 

 

 

26.

DEFINITION OF “LANDLORD”

46

 

 

 

27.

DEFINITION OF “TENANT”

46

 

 

 

28.

QUIET ENJOYMENT

46

 

 

 

29.

TITLES FOR CONVENIENCE ONLY

47

 

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*** Confidential material redacted and filed separately with the Commission.

 

30.

SEVERABILITY

47

 

 

 

31.

GOVERNING LAW

47

 

 

 

32.

HOLDING OVER

47

 

 

 

33.

ENTIRE AGREEMENT

47

 

 

 

34.

AUTHORITY

48

 

 

 

35.

RECORDATION; CONDITION OF TITLE

48

 

 

 

36.

CAPITALIZED TERMS NOT DEFINED HEREIN

48

 

 

 

37.

INTENTIONALLY OMITTED

48

 

 

 

38.

EXPANSION

48

 

 

 

39.

RIGHT OF FIRST REFUSAL

48

 

 

 

40.

TERMINATION RIGHT

49

 

 

 

41.

SIGNAGE

49

 

 

 

42.

INCENTIVES

49

 

 

 

43.

WAIVER OF TRIAL BY JURY; EXPENSES

50

 

 

 

44.

FINANCIAL STATEMENTS

50

 

 

 

45.

COUNTERPARTS

50

 

Exhibit A-1:                              Legal Description of the Land

 

Exhibit A-2:                              Depiction of the Land and Leased Land

 

Exhibit B-1:                              Work Letter

 

Exhibit B-2:                              Soft Cost Schedule

 

Exhibit C:                                         Form of Lease Term
Certification

 

Exhibit D:                                         Intentionally Omitted

 

Exhibit E-1:                               Form of Letter of Credit

 

Exhibit E-2:                               Letter of Credit Terms

 

Exhibit F:                                           HVAC Specifications

 

Exhibit G:                                         Janitorial Service
Specifications

 

Exhibit H:                                        Form of Guaranty

 

Exhibit I:                                             Reports

 

Exhibit J:                                             Intentionally Omitted

 

Exhibit K:                                        Form of Memo of Lease

 

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*** Confidential material redacted and filed separately with the Commission.

 

Exhibit L:                                          M&T Bank SNDA

 

Exhibit M:                                      Letter of Intent/Term Sheet

 

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*** Confidential material redacted and filed separately with the Commission.

 

BASIC LEASE PROVISIONS

 

A.

Building / Building Address:

1801 Augustine Cut-Off

 

 

Wilmington, DE 19803

 

 

 

B.

Landlord and Landlord Notice Address:

Augustine Land I, L.P.

 

 

105 Foulk Road

 

 

Wilmington, DE 19803

 

 

Attn:Mr. Louis J. Capano, Jr.

 

 

 

 

 

With copies to:

 

 

 

Mr. Louis J. Capano, Jr.

105 Foulk Road

Wilmington, DE 19803

 

and

 

 

 

Richards Layton & Finger

 

 

920 North King Street,One Rodney Square

 

 

Wilmington, DE 19801

 

 

Attn:  Robert J. Krapf, Esquire

 

 

 

C.

Tenant and Tenant Notice Address:

Prior to the Commencement Date:

 

 

 

 

 

Incyte Corporation

 

 

Experimental Station (E336/226)

 

 

Rt. 141 &Henry Clay Road

 

 

Wilmington, DE 19880

 

 

Attn: Paula J. Swain, EVP, HR

 

 

 

 

 

With copies to:

 

 

 

 

 

Incyte Corporation

 

 

Experimental Station (E336/226)

 

 

Rt. 141 &Henry Clay Road

 

 

Wilmington, DE 19880

 

 

Attn: Eric H. Siegel, EVP & GC

 

 

 

 

 

and

 

 

 

 

 

Morgan Lewis & Bockius, LLP

 

 

1701 Market Street

 

 

Philadelphia, PA 19103

 

 

Attn: Eric L. Stern, Esquire

 

 

 

 

 

After the Commencement Date:

 

1

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*** Confidential material redacted and filed separately with the Commission.

 

 

 

Incyte Corporation

 

 

1801 Augustine Cut-Off

 

 

Wilmington, DE 19803

 

 

Attn: Paula J. Swain, EVP, HR

 

 

 

 

 

With copies to:

 

 

 

 

 

Incyte Corporation

 

 

1801 Augustine Cut-Off

 

 

Wilmington, DE 19803

 

 

Attn:  Eric H. Siegel, EVP & GC

 

 

 

 

 

and

 

 

 

 

 

Morgan Lewis & Bockius, LLP

 

 

1701 Market Street

 

 

Philadelphia, PA 19103

 

 

Attn: Eric L. Stern, Esquire

 

 

 

D.

Effective Date:

April 12, 2013

 

 

 

E.

Initial Term:

15 years and 3 months, commencing on the Commencement Date and expiring on the
Initial Expiration Date.

 

 

 

F.

Commencement Date:

Fifteen (15) days after Substantial Completion of the Premises, subject to the
provisions of Section 2.01(b).

 

 

 

G.

Rent Commencement Date:

Ninety (90) days after the Commencement Date, subject to adjustment as provided
in this Lease.  The period of time between the Commencement Date and the Rent
Commencement Date is referred to herein as the “Free Rent Period”.

 

 

 

H.

Initial Expiration Date:

15 years and 3 months after the Commencement Date.

 

 

 

I.

Permitted Use:

General office, laboratory and vivarium use and incidental and ancillary uses,
including without limitation, conferencing, fitness and cafeteria facilities
(the “Intended Use”), as well as any other lawful purpose (the

 

2

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*** Confidential material redacted and filed separately with the Commission.

 

 

 

“Permitted Use”).

 

 

 

J.

Premises:

The entire building (the “Building”) and that land and any other improvements
(the “Leased Land”), as depicted on the attached Exhibit “A-2”, located at 1801
Augustine Cut-off, Wilmington, Delaware, 19803, being a portion of the land
legally described on the attached Exhibit “A-1” (the “Land”), including, without
limitation, the parking areas, sidewalks, private drives, loading docks, green
space, exterior patios and any and all other portions of the Leased Land.

 

 

 

K.

Premises Rentable Area:

191,056 rentable square feet (not inclusive of the Additional Space).

 

 

 

L.

Letter of Credit:

$15 million letter of credit, subject to the terms and conditions set forth in
Section 3 of this Lease.

 

 

 

M.

Management Company:

LC Management, Inc., an Affiliate of Landlord

 

 

 

N.

Tenant’s Broker:

Tactix Real Estate Advisors, LLC

 

 

 

O.

Intentionally Omitted.

 

 

 

 

P.

Parking Allotment:

Not fewer than the greater of five (5) surface parking spaces per every one
thousand (1,000) rentable square feet of the Premises or the amount of spaces
required pursuant to applicable law, located in the Building parking lot on the
Leased Land, as depicted on Exhibit A-2.

 

 

 

Q.

Payment Address:

105 Foulk Road

 

 

Wilmington, DE 19803

 

 

 

R.

Minimum Rent:

Set forth in Section 5.01 of this Lease.

 

3

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*** Confidential material redacted and filed separately with the Commission.

 

S.

Adjusted Rent:

For purposes of the rent payable in connection with Tenant’s possession of
office space prior to Substantial Completion of the entire Premises pursuant to
Section 2.01(c), Adjusted Rent shall be $***/s.f.

 

For purposes of the calculation of holdover rent under Section 32, Adjusted Rent
shall be $***/s.f.

 

T.

Stripped Rent:

For purposes of calculating management fees under Section 5.03(d), Stripped Rent
shall be (a) $***/s.f. for Lease Year 1 through Lease Year 10; and (b) for Lease
Year 11 through Lease Year 15, escalating annually by $***/s.f. over the
immediately prior Lease Year’s Stripped Rent.

 

U.

Additional Space

That certain portion of the Premises located in the subbasement, consisting of
loading area and adjacent mechanical rooms, Minimum Rent for which shall be at a
flat rate of $*** per year, not subject to adjustment pursuant to any provision
of this Lease.  Under no circumstances shall the Additional Space be included in
the calculation of the square footage of the Premises for any purpose.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

4

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*** Confidential material redacted and filed separately with the Commission.

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (“Lease”), effective as of the Effective Date, is made by
and between Landlord and Tenant.

 

W I T N E S S E T H:

 

1.                                      PREMISES; TENANT IMPROVEMENTS.

 

1.01                        Premises.  Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord, upon the terms, covenants and conditions set
forth herein, the Premises, consisting of the entire Building and the Leased
Land.

 

1.02                        Possession of Premises; Work; Tenant Funded Amount.

 

(a)                                 The Work (as defined in the Work Letter (as
such term is defined in Section 1.02(f) below)) shall be designed in compliance
with the Construction Documents (as such term is defined in the Work Letter) and
the procedures in the Work Letter to a total cost, including guaranteed maximum
price, that shall be acceptable to Landlord and Tenant (an “Acceptable Total”). 
Landlord and Tenant shall work together in good faith to value engineer and
redesign the Work to reach an Acceptable Total.  For purposes of this Lease, an
“Acceptable Total” shall be defined as the sum of (x) an Acceptable GMP (as
hereinafter defined), and (y) only those soft costs set forth on the schedule
attached hereto as Exhibit B-2 and made a part hereof (the “Soft Cost
Schedule”), currently estimated at *** Dollars ($***), where (z) the amount to
be funded by Landlord does not exceed *** Dollars ($***) and the amount to be
funded by Tenant does not exceed *** Dollars ($***).  For purposes of this
Lease, an “Acceptable GMP” shall be defined as a guaranteed maximum price
contract (i) which shall not exceed *** Dollars ($***), (ii) entered into with a
reputable general contractor that has demonstrated that it is bondable and has
significant experience with comparable projects in terms of size, scope and
nature (i.e. including lab and vivarium space), (iii) that represents a design
and schedule consistent with the Construction Documents, (iv) is acceptable to
the CM (as hereinafter defined) subject to the provisions of
Section 1.02(f) hereof, and (v) meets the requirements of the Work Letter. 
Notwithstanding the higher $*** price in clause (i) above, the parties
acknowledge and agree that their intention is to seek from any such contractor
an Acceptable GMP for the Work consistent with the Work Documents (as such term
is defined in the Work Letter) that will not exceed *** Dollars ($***) (the
“Target GMP”), and that they will value-engineer to achieve that goal; provided,
however, that the parties agree that Tenant may hereafter require changes in the
Design Development Documents (as defined in the Work Letter) or Construction
Documents that have the affect of exceeding the Target GMP.  Landlord shall only
be responsible for funding in excess of *** Dollars ($***) of the Acceptable
Total if the increase in the Acceptable Total is attributable or related to one
or more modification(s) in the Work made to improve the utility, functionality
or suitability of the Premises or the Building for the Intended Use (a
“Qualified Change”), as distinguished from purely aesthetic changes which add no
measurable value to the Premises or the Building, and any such funding shall be
subject to rent adjustment as provided in Section 5.01(a); provided, however,
that a Qualified Change

 

5

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*** Confidential material redacted and filed separately with the Commission.

 

may also include reasonable aesthetic modifications, repairs and improvements to
the exterior of the Building in order to make it suitable for Tenant’s
headquarters.  Landlord and Tenant shall work diligently and in good faith to
complete the Construction Documents or other applicable drawings by June 15,
2013 to the extent necessary to establish an Acceptable GMP, and to obtain an
Acceptable Total by July 15, 2013, in each case subject to delays for Force
Majeure (as defined hereinafter) or Tenant Delay (as defined in and subject to
Section 2.01(b) hereof).  In the event that an Acceptable Total is not obtained
by July 15, 2013, or such later date by reason of Force Majeure (not to exceed
thirty (30) days) or Tenant Delay, each party shall have the right, upon fifteen
(15) days written notice to the other party, to terminate this Lease; provided,
however, that in the event that an Acceptable Total is obtained within such
fifteen (15) day period, such termination notice shall be null and void and of
no effect and the Lease shall continue and provided, further, that in the event
that Landlord elects to terminate this Lease pursuant to the previous sentence,
Tenant shall have the right to agree, within such fifteen (15) day period, to
pay for cost overruns in excess of what would have been an Acceptable Total, and
the termination notice shall be null and void and of no effect and the Lease
shall continue.  Similarly, in the event that Tenant elects to terminate this
Lease, Landlord shall have the right to agree, within such fifteen (15) day
period, to pay for cost overruns in excess of what would have been an Acceptable
Total, and the termination notice shall be null and void and of no effect and
the Lease shall continue.  In the event that the Lease is terminated by either
party for failure to achieve an Acceptable Total within the time frame provided
above, Tenant agrees to indemnify Landlord for actual, documented, out of pocket
expenses incurred by Landlord for the design of the project and the preparation
of the Construction Documents, in an amount not to exceed *** Dollars ($***);
provided, however, Tenant shall not be obligated to indemnify Landlord for such
expenses in the event that (i) Landlord has not delivered to Tenant a formal
loan commitment as and when required by Section 2.02(b) of this Lease, except if
Landlord’s failure to obtain such loan commitment was due solely to a material
adverse change in Tenant’s financial condition after the Effective Date; or
(ii) Landlord did not work in good faith to achieve an Acceptable Total within
the time period required above.  Once the Acceptable Total has been established
and except as hereinabove provided, in no event shall Landlord have any
responsibility for payment of any Project Costs in excess of the Acceptable
Total if resulting from a Tenant initiated change that is not a Qualified
Change.  In no event shall “Project Costs” or any enumeration of Landlord’s soft
costs be deemed to include interest, loan fees or other loan charges or costs
associated with any pre-existing debt on any portion of the Land, the Building,
or any other improvements on the Land, and, to the extent any costs are incurred
with the funding package and Loan Closing referred to in Section 2.02(b), such
costs will be equitably allocated between the existing debt and the debt
associated with the Project Costs; provided, however, that Landlord shall be
permitted to include in Project Costs the loan fees associated with converting
that portion of the loan referred to in Section 2.02(b) representing
construction period refinancing of pre-existing debt into a permanent loan,
currently estimated to be in the amount of *** Dollars ($***).

 

(b)                                 Possession of the Premises shall be
delivered by Landlord to Tenant upon Substantial Completion (as defined in the
Work Letter) of the Work pursuant to the terms of the Work Letter.  Landlord
shall provide Tenant with not less than thirty (30) days prior written notice of
Landlord’s anticipated date of Substantial Completion, but failure of Landlord
to give

 

6

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*** Confidential material redacted and filed separately with the Commission.

 

such notice shall not itself constitute a default hereunder.  During such thirty
(30) day period, Tenant shall be provided access to the Premises for the purpose
of delivery and installation of table top lab equipment not included in the
Work, furniture, fixtures and information technology equipment.  Notwithstanding
the foregoing, at any time following the date on which Tenant has delivered the
Letter of Credit and prior to Substantial Completion, Tenant shall be provided
access to the Premises for the purpose of coordinating inspections, review, site
visits, and testing in connection with licensure and permitting requirements and
as needed to set up the NMR lab and security systems; provided, however, that
Tenant’s access shall be coordinated with Landlord and not unreasonably
interfere with the completion, by Landlord, of the Work and shall be subject to
Landlord’s reasonable requirements for safety and security and to avoid Tenant
interference with Landlord’s prosecution of the Work.  Any delays in the
construction or completion of the Work actually and directly attributable to
Tenant’s access to the Premises prior to Substantial Completion shall be
included in Tenant Delays (as defined in and subject to Section 2.01(b) hereof).

 

(c)                                  Subject to the provisions of
Section 1.02(d) below, Landlord, at Landlord’s sole cost and expense, shall
complete the Work pursuant to the Work Letter.

 

(d)                                 Tenant shall be obligated to pay *** Dollars
($***) toward the Project Costs (as defined in the Work Letter); provided,
however, in the event the Project Costs exceed *** Dollars ($***), Tenant shall,
in addition, be obligated to pay for *** percent (***%) of such overage, up to
*** Dollars ($***) (such payments made by Tenant, in the aggregate, the “Tenant
Funded Amount”), payable as provided in Section 8 of the Work Letter. The Tenant
Funded Amount shall be deemed to have purchased those assets with the shortest
depreciable life, and nothing herein shall prevent Tenant from taking
depreciation on or claiming an interest in such assets.  Landlord shall be
obligated to pay up to *** Dollars ($***) of the Project Costs; provided,
however, in the event that the Project Costs exceed *** Dollars ($***), Landlord
shall be obligated to pay for *** percent (***%) of such overage, up to ***
Dollars ($***) subject to an adjustment to Minimum Rent as provided in
Section 5.01(a) and the terms and conditions of Section 1.02(a).  The amounts to
be funded by Landlord and Tenant, respectively, as aforesaid in this
Section 1.02(d) above $*** shall be advanced on a pari passu basis.

 

(e)                                  Landlord’s obligations to undertake and
complete the Work pursuant to this Lease and the Work Letter shall be secured by
the Guaranty referenced in Section 2.02(c) below.

 

(f)                                   The parties have attached hereto as
“Exhibit B-1” the form of work letter for the design and construction of the
Work (as defined therein) (the “Work Letter”).  The parties agree that the
construction manager (“CM”) for the Work, once engaged, may have comments with
regard to plan development process, Budget (as such term is defined in the Work
Letter), Schedule (as such term is defined in the Work Letter), Construction
Milestones (as such term is defined in Section 2.02(d) below), and other
construction related matters (such as the draw process).  The parties agree to
work cooperatively to identify any necessary additions or modifications to the
Work Letter as promptly as possible after the CM has been engaged, and in no
event later than June 15, 2013, and shall amend the Lease by such date to
substitute the revised Work Letter for the form of Work Letter appended hereto. 
For the avoidance of doubt,

 

7

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*** Confidential material redacted and filed separately with the Commission.

 

in no event shall modifications to the Work Letter change the business terms
already set forth in this Lease.  Notwithstanding the foregoing, the parties
shall work cooperatively and in good faith to establish a Schedule consistent
with the Outside Delivery Date set forth in Section 2.01(b) of this Lease;
provided, however, the Outside Delivery Date set forth in Section 2.01(b) of
this Lease may, upon input from the CM, be changed in connection with revision
of the Work Letter pursuant to the provisions of this Section 1.02(f).  For the
avoidance of doubt, the Outside Delivery Date shall not be changed to a date
later than the date set forth in Section 2.01(b) of this Lease without Tenant’s
consent, which consent shall be in Tenant’s sole and absolute discretion, and
Landlord shall have no right to reject a proposal by the CM to make the Outside
Delivery Date a date later than that set forth in Section 2.01(b) of this Lease
if such later Outside Delivery Date is acceptable to Tenant in Tenant’s sole and
absolute discretion.

 

1.03                        Tenant shall have the right to use the roof of the
Building (“Rooftop Rights”), and Landlord shall provide Tenant reasonable access
to run the necessary cable and piping for Tenant’s Rooftop Rights.  The Rooftop
Rights shall be at no additional cost to Tenant.  The Rooftop Rights and any
activities related thereto, including but not limited to the installation
methodology and weight and size of cable, piping and other equipment, and the
specific activities of Tenant, will be subject to Landlord’s approval, which
shall not be unreasonably withheld, conditioned or delayed, and any required
governmental approval.  In the event that Tenant requests consent to any use of
the roof pursuant to the provisions of this Section 1.03, and Landlord fails to
respond to Tenant’s request within five (5) business days, Landlord shall be
deemed to have consented to such use of the roof.  Landlord shall ensure the
roof is in good condition at the time of the Lease Commencement Date and
Landlord shall make any modifications, repairs or maintenance recommended by its
engineer at Landlord’s sole cost and expense prior to the Commencement Date.  As
a part of the Work, Landlord shall do all work necessary to obtain, and shall
obtain a warranty for the roof membrane and structure from the manufacturer
thereof for a period of no less than the Term and Landlord shall provide a true
and correct copy of such warranty to Tenant on the Commencement Date, and any
work undertaken on the roof by Tenant in connection with its exercise of the
Rooftop Rights shall be in compliance therewith.  Tenant hereby agrees to
indemnify and hold Landlord harmless from and against the claims of any
landowners of properties adjacent to the Premises in connection with
interference in equipment owned by such adjacent landowners prior to the
installation of Tenant’s rooftop equipment that is caused by Tenant’s rooftop
equipment and with any interference caused by operation of Tenant’s rooftop
equipment in violation of applicable laws and regulations.

 

2.                                      TERM; RENEWAL.

 

2.01                        (a)                                 The term of this
Lease (the “Term”) shall commence on the Commencement Date and terminate on the
Initial Expiration Date (the “Initial Expiration Date”), as the same may be
extended by Tenant pursuant to the provisions of Section 2.03, and subject to
early termination by Tenant pursuant to Section 40.  Notwithstanding the
Commencement Date, the contractual obligations created by this Lease shall come
into full force and effect on its Effective Date.

 

8

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*** Confidential material redacted and filed separately with the Commission.

 

(b)                                 The “Commencement Date” shall be fifteen
(15) days after the Substantial Completion of the Premises provided that, to the
extent the same is dependent only on the Work and not on any improvements or
other work controlled by Tenant, the final certificate of occupancy for Tenant’s
occupancy of the Premises has been issued by the applicable governmental and
regulatory authorities; provided, however, in no event shall the Commencement
Date be a date earlier than April 1, 2014.  Landlord shall work diligently to
ensure that the Premises are Substantially Complete on or before May 31, 2014
subject to extension, on a day for day basis, only for Force Majeure events
(limited, however, to thirty (30) days of delay) or Tenant Delay (as defined
below) (the “Outside Delivery Date”).  Notwithstanding the foregoing, in the
event that the Premises are not Substantially Complete on or before May 31, 2014
due to a delay caused by any acts or omissions of Tenant as to which Landlord
has given Tenant a notice indicating that such act or omission will cause a
delay in completion of the Premises; provided, however, that the requirement for
such notice shall not be interpreted to require a second notice after a written
notice requiring a response from Tenant (and the required response date) shall
have been sent by Landlord to Tenant pursuant to the Work Letter or this Lease
(a “Tenant Delay”; it being specifically noted that such notices described in
this sentence shall be required as a predicate of any claim of Tenant Delay
under any provision of this Lease), then the Rent Commencement Date (for
purposes of Minimum Rent only) shall be deemed to be the date that the Rent
Commencement Date would have been but for such Tenant Delay; provided, however,
Landlord and Tenant shall each use reasonable efforts to mitigate the impact of
any such delay, and nothing herein shall relieve Landlord of its obligation to
Substantially Complete the Premises; provided further, in the event that, as a
result of Tenant Delay, the Rent Commencement Date is deemed to occur prior to
Substantial Completion of the Premises, Tenant shall have the right to cause the
Commencement Date to occur as soon after Substantial Completion of the Premises
as Tenant determines, in Tenant’s sole discretion, but in no event later than
fifteen (15) days after Substantial Completion of the Premises.  Upon
Substantial Completion of the Premises, the parties shall execute an instrument,
substantially similar to the form attached hereto as Exhibit C, formally
establishing the Commencement Date (“Lease Term Certification”).  “Force
Majeure” shall mean any delay actually arising from fire, war, riots, terrorism,
natural disaster, flood, industry-wide labor strikes, or other act beyond the
reasonable control of Landlord that affects Landlord’s ability to fulfill any of
its material obligations hereunder; provided, however, it shall be incumbent
upon Landlord to notify Tenant as soon as practicable after the onset of the
Force Majeure event and to promptly use commercially reasonable efforts to end
the Force Majeure event or otherwise mitigate any delay caused thereby, to the
extent practical.

 

(c)                                  Landlord shall work diligently to ensure
that the office areas of the Premises are Substantially Complete on or before
February 28, 2014.  Notwithstanding anything in this Section 2.01 to the
contrary, Tenant may, at Tenant’s election, move into the office areas of the
Premises should such areas be Substantially Completed prior to the Substantial
Completion of the remainder of the Premises.  Such early office occupancy shall
not trigger the Commencement Date hereunder, but all obligations and liabilities
of Tenant that would commence on the Commencement Date shall commence with
respect to all such space occupied by Tenant, except that the Rent therefor
shall be as provided in this subsection (c).  Rent during any period of such
early office occupancy shall be the Adjusted Rent, payable only with respect

 

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to that portion of the Premises actually utilized by Tenant, and the actual,
demonstrated increase in any other direct expenses that vary based on occupancy
and actually increased as a direct result of Tenant’s early occupancy of the
office areas, and Tenant shall have no other obligations to pay any other sums
to Landlord other than as provided in Section 1.02(d).  Early office occupancy
by Tenant shall not relieve Landlord of its obligation to Substantially Complete
the Premises, and Tenant expressly reserves all rights and remedies under this
Lease, at law and in equity, with respect to the Substantial Completion of the
Premises.  In the event that Tenant exercises its rights under this
Section 2.01(c) and takes early occupancy of the office area, but thereafter
terminates the Lease pursuant to the provisions of Section 2.01(d) below,
Landlord shall, upon invoice delivered from Tenant to Landlord, reimburse Tenant
for the documented, reasonable, actual out-of-pocket costs and expenses incurred
solely and directly by Tenant relocating Tenant’s office operations as a result
of such termination.

 

(d)                                 Landlord acknowledges that, because the
construction, completion and delivery to Tenant of the Premises (including all
of the Work, and the satisfaction of all conditions of Substantial Completion of
the Premises) within the time periods set forth on the Schedule (as such term is
defined in the Work Letter), subject to the terms and conditions of this Lease
and subject to Force Majeure and Tenant Delays, is of the essence of this Lease,
the parties shall establish certain milestones to be satisfied by Landlord by
certain dates, as set forth in the Work Letter (the “Construction Milestones”),
subject to the terms and conditions of this Lease and subject to Force Majeure
and Tenant Delays.  Landlord and Tenant agree that Tenant’s exclusive remedies
with respect to the Construction Milestones shall be as follows:

 

(i)                                     In the event Landlord fails to satisfy
any Construction Milestone, Landlord shall provide to Tenant, in writing
(A) Landlord’s plans for mitigating the impact of such delay that is reasonably
likely to result from the failure to substantially achieve such Construction
Milestone and for maintaining the overall project schedule, and (B) adequate and
reasonably substantiated assurances that (1) Landlord will be able to satisfy
the applicable Construction Milestone within a reasonable and specific time, and
(2) that the delay in satisfying the applicable Construction Milestone is not
reasonably likely to cause Landlord to fail to timely achieve the following
Construction Milestone, if applicable, and to achieve Substantial Completion of
the Premises on or before the Outside Delivery Date.  Notwithstanding the
foregoing, Tenant shall have the option, in its sole discretion, to terminate
this Lease by delivering written notice (“Delay Termination Notice”) to
Landlord, at any time within thirty (30) days thereafter, after Landlord fails
to satisfy any Construction Milestone, subject to extension of the Construction
Milestone on a day for day basis equal to the duration of any Tenant Delay and
Force Majeure; provided, however if such Construction Milestone is satisfied
within thirty (30) days of the Delay Termination Notice, the Delay Termination
Notice shall be null and void and the Lease shall continue in full force and
effect.

 

(ii)                                  If the Premises are not Substantially
Complete on or before the Outside Delivery Date, then Tenant shall have the
option, in its sole discretion, to

 

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terminate this Lease by delivering a Delay Termination Notice to Landlord within
thirty (30) days after the Outside Delivery Date; provided, however, if the
Premises are Substantially Completed within thirty (30) days of the date of the
Delay Termination Notice, the Delay Termination Notice shall be null and void
and the Lease shall continue in full force and effect.  In the event Tenant does
not elect to exercise its termination right set forth in this
Section 2.01(d)(ii), the length of the Free Rent Period shall be increased by
one (1) day for each day that passes after the Outside Delivery Date until the
Commencement Date occurs.

 

(iii)                               If the Premises are not Substantially
Complete by the Outside Delivery Date, and, due to such occurrence, Tenant
incurs holdover rent or money damages owing to its landlord (“Existing Lease
Holdover Rent”) under its existing lease (the “Existing Lease”), or, in the
event Tenant must enter into a temporary lease because the Premises are not
Substantially Complete by the Outside Delivery Date and Tenant incurs rent
(“Temporary Lease Rent”) in excess of the rent payable under its existing lease
prior to its natural expiration date, then, without limitation of Tenant’s
rights and remedies hereunder, at law or in equity, Landlord shall pay to
Tenant, the documented, reasonable, actual out-of-pocket amount that such
Existing Lease Holdover Rent or Temporary Lease Rent exceeds the rent payable
under Tenant’s existing lease prior to its natural expiration date, for the
period commencing on the date such Existing Lease Holdover Rent or Temporary
Lease Rent begins accruing and ending on the later to occur of (x) the date such
Existing Lease Holdover Rent or Temporary Lease Rent ceases, or (y) the
Commencement Date.  Tenant hereby represents that prior to the Effective Date,
Tenant delivered to Landlord true and correct copies of the Existing Lease
(which copies were complete other than the removal of certain exhibits), which
Existing Lease has not been further amended since delivery by Tenant of such
documents to Landlord.  In the event that (a) Tenant amends the Existing Lease
after the Effective Date of this Lease, or (b) Tenant exercises its right to
renew the Existing Lease for a period of three (3) years pursuant to the terms
thereof, Tenant hereby agrees that any Existing Lease Holdover Rent shall be
limited to the amount it would have been had the Existing Lease not been amended
after the Effective Date or renewed for such three (3) year period, as
applicable, unless Landlord consented to such amendment or renewal exercise,
which consent shall not be unreasonably withheld, conditioned or delayed. 
Without limitation of Tenant’s rights and remedies at law or in equity, Tenant
shall have the option, in its sole discretion, to terminate this Lease by
delivering written notice to Landlord if Landlord shall have failed to pay any
amount of Existing Lease Holdover Rent or Temporary Lease Rent and such failure
continues uncured for more than ten (10) days following Tenant’s notice to
Landlord of such failure.

 

(iv)                              Tenant shall have the option, in its sole
discretion, to terminate this Lease by delivering written notice to Landlord at
any time after Landlord shall have definitively and incontrovertibly stopped
performing the Work, other than

 

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by reason of Force Majeure or Tenant Delay, for a period of more than fifteen
(15) consecutive days; the parties agreeing that no such consecutive period of
days shall be deemed tolled or interrupted by immaterial or isolated work at the
site not undertaken with the good faith expectation of prosecuting the Work
diligently and continuously thereafter.

 

(v)                                 In the event Tenant elects to terminate the
Lease pursuant to the provisions of Section 2.01(d)(i), (ii), (iii), or (iv), or
in the event of any other termination of this Lease for any reason other than an
Event of Default, Landlord shall, within thirty (30) days next following
Tenant’s demand, refund to Tenant the Tenant Funded Amount.  If Landlord fails
to refund the entire Tenant Funded Amount within such thirty (30) day period,
the remaining amount due to Tenant shall accrue interest at the Default Rate
from the date that was thirty (30) days following Tenant’s demand therefor until
returned in full to Tenant, and Tenant shall have all rights at law or in
equity.  In the event Tenant elects to terminate the Lease pursuant to
Section 2.01(d)(ii) for failure of Landlord to Substantially Complete the
Premises as required therein, but the Rent Commencement Date has already been
deemed to occur as a result of Tenant Delay prior to such termination, Tenant
shall be entitled to recover any amounts of Rent paid by Tenant to Landlord
(except for Adjusted Rent that Tenant paid pursuant to Section 2.01(c) for early
occupancy of the office areas, if applicable).  Landlord’s obligations under
this Section 2.01(d)(v) shall be secured by the Guaranty referenced in
Section 2.02(c) below.

 

2.02                        Landlord Financing and Guaranty Requirements.

 

(a)                                 Landlord represents and warrants to Tenant
that, upon the Loan Closing (as hereinafter defined), Landlord has or shall have
the financial wherewithal to fully meet its obligations under this Lease,
including its obligations with respect to funding the Work as currently
estimated in the initial Budgets (attached to the Work Letter as Attachment 2),
including such equity as may be required, in addition to Landlord’s loan from
M&T Bank, and covenants that at all times during the Term, Landlord shall have
immediately available resources to fully meet its obligations under this Lease. 
Reference is hereby made to Section 21.04, which provides that, as a condition
of Tenant’s obligations under this Lease, Landlord shall have, simultaneously
with the Loan Closing, delivered to Tenant a fully executed SNDA (as hereinafter
defined) from M&T Bank, Landlord’s lender for the Work, in the form attached
hereto as Exhibit L and made a part hereof.

 

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(b)                                 Landlord has delivered to Tenant a true and
correct copy of a letter of intent or term sheet from M&T Bank for the complete
funding package required by Landlord to meet all of its obligations pursuant to
the terms of this Lease, including the Work Letter (the “Letter of Intent/Term
Sheet,” attached hereto as Exhibit M and made a part hereof).  In the event that
(i) Landlord fails to obtain and deliver to Tenant a formal loan commitment for
such funding package to Tenant by the date that is forty-five (45) days after
the Effective Date, or (ii) Landlord fails to close such funding package or, as
Landlord elects, any alternative loan funding that is consistent with the
requirements of this Lease (the “Loan Closing”) and provide evidence of the Loan
Closing to Tenant within ten (10) business days after establishing the
Acceptable Total, Tenant shall have the right, upon notice to Landlord given
within ten (10) business days thereafter, to terminate this Lease, and Tenant
shall not be bound to indemnify Landlord for any actual, documented, out of
pocket expenses incurred by Landlord for the design of the project and the
preparation of the Construction Documents, unless Landlord’s failure to close
such funding package is due solely to a material adverse change in Tenant’s
financial condition after the Effective Date, in which case, such
indemnification obligation shall not exceed *** Dollars ($***).  Landlord alone
shall be responsible for any increase in Project Costs resulting from an
election by Landlord to obtain alternative loan funding pursuant to this
Section 2.02(b).

 

(c)                                  Contemporaneously with the Loan Closing,
Landlord shall deliver the personal guaranty (“Guaranty”) of Louis J.
Capano, Jr. (“Guarantor”) in the form attached hereto as Exhibit H, which
Guaranty, guarantees the following (the “Guaranteed Obligations”): (i) the
return by Landlord of the Tenant Funded Amount as required by the terms of this
Lease, (ii) the completion of the Work, including any punch list items, as
provided in the Work Letter, and all payment obligations in connection
therewith, and (iii) Landlord’s warranty of the Work pursuant to
Section 12(b) of the Work Letter for a period of nine (9) months following
Substantial Completion of the Premises with respect to HVAC systems and
equipment and ninety (90) days following Substantial Completion of the Premises
with respect to warranty of all other portions of the Work; provided, however,
that the Guaranty shall remain in effect with respect to warranty claims made by
Tenant prior to the expiration of such applicable period until the resolution
thereof.

 

2.03                        Renewal Option.  Tenant shall have the option to
extend the Initial Term for two (2) separate, consecutive renewal periods
totaling an aggregate of ten (10) years (each, a “Renewal Option”), under and
subject to the following terms and conditions:

 

(a)                                 The first renewal term (the “First Renewal
Term”) shall be for a period of either three (3), four (4), five (5), six (6) or
seven (7) years, at Tenant’s option, commencing on the day immediately following
the Initial Expiration Date, and expiring at midnight on the day immediately
preceding the third (3rd), fourth (4th), fifth (5th), sixth (6th) or seventh
(7th) anniversary thereof, as the case may be (“First Renewal Expiration”). 
Notwithstanding the foregoing, in the event that upon the exercise of the first
Renewal Option, Landlord’s then-current loan is scheduled to mature within five
(5) years, then the First Renewal Term may not be less than five (5) years.  The
second renewal term (the “Second Renewal Term”) shall be for a period of ten
(10) years less the number of years of the First Renewal Term, commencing on the
day immediately following the First Renewal Expiration, and expiring at midnight
on the day

 

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immediately preceding the third (3rd), fourth (4th), fifth (5th), sixth (6th) or
seventh (7th) anniversary thereof, as the case may be.  The First Renewal Term
and the Second Renewal Term are collectively referred to as the “Renewal Terms”
(and each a “Renewal Term”).  If Tenant fails to exercise any Renewal Option,
all subsequent Renewal Options shall be null and void and of no further force
and effect.

 

(b)                                 Each Renewal Term shall be on the same terms
and conditions contained in this Lease, except that (i) the Minimum Rent shall
be at the then prevailing Fair Market Rental Rate (as hereinafter defined and as
hereinafter determined) for the Premises, and (ii) Tenant shall either, as
elected by Landlord, (1) be granted a concession package for new comparable
leases (including tenant improvement allowance, free rent build-out period and
other concessions then given in the Wilmington, Delaware market) or (2) receive
a rent reduction equal to the payment necessary to amortize the value of such
concessions at *** percent (***%) over the Renewal Term so exercised.  For the
avoidance of doubt a “new comparable lease” contemplates a tenancy involving
office and laboratory uses which may, but shall not necessarily, approximate
Tenant’s use of the overall space contained in the Premises.  In the event that
market comparables for new comparable leases are of greater or lesser length
than the applicable Renewal Term, the concessions provided to Tenant in
connection with such Renewal Term shall be equitably adjusted.

 

(c)                                  As used herein, the “Fair Market Rental
Rate” shall mean the then prevailing market rate for new (not renewal) leases
for a term, comparable use and comparable office and/or laboratory space (which
may require a composite rent that blends different sources of office or
laboratory leasing) in the Wilmington, Delaware market, as hereinafter
determined, taking into account all relevant factors including prevailing
concessions being offered tenants in the Wilmington, Delaware market; provided,
however, that no value shall be ascribed to Tenant’s laboratory trade fixtures
and equipment in the Premises at such time.

 

(d)                                 Tenant shall notify Landlord of its exercise
of a Renewal Option by written notice to Landlord delivered at least three
hundred and sixty five (365) days prior to the expiration date of the then
current Term of this Lease; provided, however, Tenant’s right shall in no event
lapse until Landlord shall have advised Tenant in writing that Tenant has failed
to timely exercise its Renewal Option and Tenant thereafter fails to exercise
such Renewal Option within the ensuing ten (10) day period.  For a period of
fifteen (15) days after such notice from Tenant (the “Renewal Negotiation
Period”), Landlord and Tenant shall negotiate in good faith to agree upon the
Fair Market Rental Rate for such Renewal Term.  If Landlord and Tenant have been
unable to agree upon the Fair Market Rental Rate for such Renewal Term during
the Renewal Negotiation Period, and Tenant does not revoke the exercise of the
Renewal Option within fifteen (15) days thereafter (which Tenant shall have the
right to do at Tenant’s sole option), Tenant may, at its option, cost and
expense, engage the services of an independent real estate appraiser, having an
MAI designation, with knowledge and experience of rental values of similar
properties in the Wilmington, Delaware market to perform an appraisal to
determine the Fair Market Rental Rate of the Premises for the Renewal Term. 
Such appraiser shall render his or her appraisal report to Landlord and Tenant
not later than forty-five (45) days after the conclusion of the Renewal
Negotiation Period.  If the Fair Market Rental Rate determined by the

 

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appraiser shall not be acceptable to Landlord, Landlord shall, at its cost and
expense, engage the services of an appraiser, having similar qualifications as
those set forth above, to determine the Fair Market Rental Rate of the Premises
for the Renewal Term.  Such appraiser selected by Landlord shall render his or
her appraisal report to Landlord and Tenant not later than forty-five (45) days
after the date Landlord receives the appraisal report prepared by the appraiser
selected by Tenant.  In the event that Landlord’s appraiser shall determine a
Fair Market Rental Rate which shall not differ by more than *** percent (***%)
from the Fair Market Rental Rate determined by Tenant’s appraiser, the Fair
Market Rental Rate of the Premises shall be deemed to be the average of the Fair
Market Rental Rate determined by Tenant’s appraiser and the Fair Market Rental
Rate determined by Landlord’s appraiser.  If Landlord’s appraiser shall
determine a Fair Market Rental Rate which shall differ more than *** percent
(***%) from the Fair Market Rental Rate determined by Tenant’s appraiser, then
the two appraisers shall select a third appraiser, having similar qualifications
as those set forth above, and Landlord and Tenant shall engage the services of
such third appraiser to perform an appraisal to determine the Fair Market Rental
Rate of the Premises, with Landlord and Tenant each to pay one-half of the cost
of such third appraiser.  The appraiser for Landlord and the appraiser for
Tenant shall select such third appraiser within five (5) days after Landlord
notifies Tenant that such third appraiser is required.  Such third appraiser
shall be instructed to render an appraisal report to Landlord and Tenant not
later than thirty days (30) after the date of his or her engagement.  The Fair
Market Rental Rate of the Premises for the Renewal Term shall be the Fair Market
Rental Rate determination of the appraiser selected by Landlord or Tenant whose
determination is closer to the determination of the third appraiser.  If the
Fair Market Rental Rate of the Premises for the Renewal Term, as determined by
the aforementioned process (i) is the Fair Market Rental Rate that was initially
determined by Tenant’s appraiser, or (ii) is the Fair Market Rental Rate that
was initially determined by Landlord’s appraiser, and such amount is less than
*** percent (***%) of the Fair Market Rental Rate that was initially determined
by Tenant’s appraiser, then Tenant shall be held to have exercised the Renewal
Option.  If the Fair Market Rental Rate of the Premises, as determined by the
aforementioned process, is the Fair Market Rental Rate that was initially
determined by Landlord’s appraiser, and such amount is equal to or greater than
*** percent (***%) of the Fair Market Rental Rate that was initially determined
by Tenant’s appraiser, then Tenant shall have the option, in Tenant’s sole
discretion, to revoke its exercise of the Renewal Option by notice of such
revocation to Landlord no later than thirty (30) days following the final
determination of the Fair Market Rental Rate; provided, however, that Landlord
may thereafter agree to accept as the Fair Market Rental Rate *** percent (***%)
of the Fair Market Rental that was initially determined by Tenant’s appraiser
and, in such case, Tenant’s revocation shall be void and ineffective.  If Tenant
revokes its exercise of the Renewal Option after the parties shall have
completed the appraisal process outlined in this Section 2.03(d), then Tenant
shall pay for its own appraiser, the reasonable costs of Landlord’s appraiser
and the cost of the third appraiser.  If Tenant does not revoke exercise of the
Renewal Option after the parties have completed the appraisal process outlined
in this Section 2.03(d), each party shall pay the costs of their own appraisers,
and the cost of the third appraiser shall be shared equally by Landlord and
Tenant.

 

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3.                                      LETTER OF CREDIT.

 

3.01                        At Loan Closing (as defined in Section 21.04),
provided Landlord’s lender has delivered written notice to Tenant at least five
(5) days prior thereto, Tenant shall deposit with Landlord a letter of credit in
substantially the form as attached hereto as “Exhibit E-1” and made a part
hereof, in an amount equal to Fifteen Million Dollars ($15,000,000.00). 
Landlord and Tenant hereby acknowledge and agree to the terms governing the
Letter of Credit that are set forth herein and in the “Letter of Credit Terms”
attached hereto as “Exhibit E-2” and made a part hereof.

 

3.02                        For the avoidance of doubt, any draw upon the Letter
of Credit by Landlord or Landlord’s lender shall be in accordance with, and
subject to, the provisions of the Letter of Credit and all of the provisions of
this Lease.  Landlord shall only be entitled to draw on the Letter of Credit as
provided in Section 3 of the Letter of Credit Terms.

 

3.03                        As provided in Section 7 of the Letter of Credit
Terms, the balance of the Letter of Credit shall be reduced to the amount
reasonably estimated by Landlord to be necessary to restore the Premises to meet
the surrender condition provided in this Lease.  Any such reduction of the
balance of the Letter of Credit shall not limit Tenant’s obligations under this
Lease for the condition of the Premises.  Tenant shall make such repairs as are
necessary to comply with its surrender obligations hereunder, failing which,
Landlord may do so.

 

3.04                        The provisions of this Section 3 notwithstanding, if
*** a *** below, and the *** of the *** or ***, as the case may be, shall *** to
***, then, to the extent applicable, the *** shall be *** to *** as *** since
the *** the *** of the *** or *** the *** and *** the *** been ***, if the ***
then *** in the *** to the *** in *** below, and if the *** is *** would be ***
hereunder *** of the *** set forth in *** of the *** for *** since the ***;
provided however, that ***, the *** will *** to *** with the *** and *** as in
*** for the ***.

 

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3.05                        The provisions of Section 3.05 shall not be
applicable in the event that the transferee or surviving entity in a transaction
under Section 7.06 below shall satisfy the Financial Condition.

 

4.                                      USE OF PREMISES.

 

4.01                        The Premises shall be occupied and used only for the
Permitted Use, and for no other purpose.

 

4.02                        Tenant shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Premises and its
occupancy and shall promptly comply with all governmental orders and directions
for the correction, prevention and abatement of any violations in or upon the
Premises that are particular to Tenant’s specific manner or method of use as
opposed to office and laboratory uses generally, all at Tenant’s sole expense. 
The foregoing provisions notwithstanding, Landlord alone, at Landlord’s sole
cost and expense, shall be responsible to assure that the Premises comply with
all governmental laws, ordinances and regulations at the Commencement Date. 
Tenant shall not cause, maintain, or permit any unreasonable noise or odors to
come from the Premises, any public nuisances in, on, or about the Premises, or
commit or allow to be committed any waste in, on, or about the Premises. 
Tenant, and not Landlord, shall be solely responsible for, and shall take all
commercially reasonable steps to ensure, all safety and security of its secure
areas including, without limitation, all vivarium and laboratory spaces.

 

4.03                        Tenant shall not (a) do or permit anything to be
done on or about the Premises, or (b) bring or keep anything into the Premises,
which will in any way increase the rate (over the rate in effect as of the
Commencement Date), or invalidate or prevent the procuring of any insurance
protecting against (x) loss or damage to the Building or any of its contents by
fire or other casualty or (y) liability for damage to property or injury to
persons in or about the Building or any part thereof.  Landlord confirms that
the Landlord’s insurer has reviewed this Lease and Tenant’s Intended Use, and,
based on a letter received from Landlord’s insurer (a true and correct copy of
which has been delivered to Tenant prior to the date hereof), has confirmed that
the Leased Premises will be insurable at regular rates.

 

5.                                      MINIMUM RENT; ADDITIONAL RENT.

 

5.01                        Minimum Rent.

 

(a)                                 For purposes hereof, “Lease Year” shall mean
a period of twelve (12) consecutive calendar months, commencing immediately
after the conclusion of the preceding Lease Year.  The first Lease Year shall
commence upon the Commencement Date and, if said date is not the first day of a
calendar month, shall continue for the remainder of said month and the next
twelve (12) calendar months immediately thereafter.  Following the Rent
Commencement Date, Minimum Rent (subject to adjustment pursuant to the next
sentence below) shall be equal to *** Dollars ($***) per year (for the
Additional Space) plus:

 

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Rent Commencement Date — Lease Year 10

 

$***/r.s.f.

Lease Year 11

 

$***/r.s.f.

Lease Year 12

 

$***/r.s.f.

Lease Year 13

 

$***/r.s.f.

Lease Year 14

 

$***/r.s.f.

Lease Year 15

 

$***/r.s.f.

Lease Year 16 (until Initial Expiration Date)

 

$***/r.s.f.

 

The aforementioned Minimum Rent schedule is based upon an assumed Net Project
Cost (as hereinafter defined) of *** Dollars ($***).  If and to the extent the
Project Cost less the Tenant Funded Amount (the “Net Project Cost”) is more or
less than *** Dollars ($***), the annual Minimum Rent as reflected above shall
increase or decrease, as the case may be, by an amount equal to (i) *** times
the amount of such increase or decrease in the Net Project Cost, as the case may
be (ii) divided by 191,056 rentable square feet; provided, however, in no event
shall Landlord be required to fund a Net Project Cost in excess of *** Dollars
($***).  Notwithstanding anything in this paragraph to the contrary, in the
event that a delay by Landlord results in an increase to Project Cost (including
the incurrence of construction loan interest that would not have been incurred
but for such delay by Landlord), Landlord shall be solely responsible for such
increase and Minimum Rent shall not be increased pursuant to the prior sentence.

 

(b)                                 Commencing on the Rent Commencement Date,
Tenant shall pay the Minimum Rent, in advance, in equal monthly installments
(the “Minimum Monthly Rent”), on the first day of each calendar month (the “Rent
Payment Date”) during the Term.  If the Rent Commencement Date shall fall on a
day other than the first day of a calendar month, the Minimum Monthly Rent shall
be apportioned pro-rata on a per diem basis for the period between the Rent
Commencement Date and the first day of the following calendar month; such
apportioned sum shall be paid on the Rent Commencement Date.  Subject to
adjustments described in this Section 5, Tenant shall also be liable for the
payment of all Additional Rent for all months of the Term.  Payments of
Additional Rent shall commence on the first day of the calendar month following
the calendar month in which the Commencement Date occurs.  If the Commencement
Date shall fall on a day other than the first day of a calendar month, the
Additional Rent shall, for directly metered services, be based upon actual
metered usage, and for charges that are not directly metered, be apportioned
pro-rata on a per diem basis for the period between the Commencement Date and
the first day of the following calendar month; such apportioned sum shall be
paid on the first day of the calendar month following the Commencement Date. 
Rent shall be paid to Landlord at the Payment Address, or to such other party
and such other place as Landlord may designate in writing.

 

5.02                        Electricity, Gas and Water.  The Premises shall be
separately metered for electricity, gas, and water, and Tenant shall contract
directly with the applicable utility providers for the provision of the same to
the Premises and pay the charges for same directly to the applicable utility
providers.  Notwithstanding any other provision in this Lease to the contrary,
Tenant reserves the right to provide for or contract for itself any other
services and directly pay any costs associated with such services; provided,
however, that nothing herein requires Landlord to incur any costs or liabilities
with respect to such other services nor to perform, nor to

 

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agree to permit Tenant to perform, any work to allow for the provision of such
services other than in compliance with the provisions of Section 8 hereof.  Any
services paid directly by Tenant shall not be included in Operating Expenses (as
defined below).

 

5.03                        Operating Expenses.

 

(a)                                 Commencing on the Commencement Date, Tenant
shall pay to Landlord as additional rent (together with any other payments due
from Tenant to Landlord hereunder other than the Minimum Rent, “Additional
Rent”) all Operating Expenses pursuant to the terms, conditions and limitations
of this Section 5.03.  On or before the Commencement Date and on or before the
first (1st) day of January first occurring after the Commencement Date and
thereafter as soon as practical before each succeeding calendar year during the
Term, Landlord shall estimate the Operating Expenses (as hereinafter defined)
for the calendar year in question (“Estimated Operating Expenses”) and shall
submit such information to Tenant in a written statement (the “Estimated Expense
Statement”).  Landlord shall use reasonable efforts to issue the Estimated
Expense Statement for the following calendar year by November 1 of the
then-current calendar year.

 

(b)                                 Commencing on the later of the Commencement
Date or the first day of the calendar month following Tenant’s receipt of
Landlord’s first Estimated Expense Statement, Tenant shall pay to Landlord as
Additional Rent a sum (the “Monthly Estimated Operating Expense Payment”) equal
to one-twelfth (1/12) of the Estimated Operating Expenses for such calendar year
(or a prorated portion thereof for any partial month).  Tenant’s first Monthly
Estimated Operating Expense Payment shall be accompanied by the payment of an
amount equal to the product of the number of full months, if any, within the
calendar year which have elapsed between the Commencement Date and such first
Monthly Estimated Operating Expense Payment.  During the first Lease Year,
Landlord may modify the Monthly Estimated Operating Expense Payment one time
following the first ninety (90) days of the first Lease Year.  During any and
all subsequent Lease Years, Landlord may modify the Monthly Estimated Operating
Expense Payment one time following the first six (6) months of such Lease Year. 
In such event, Tenant shall (i) pay Landlord at the time of the next due Monthly
Estimated Operating Expense Payment the difference between all Monthly Estimated
Operating Expense Payments theretofore paid and the amount that would have been
paid based on such modification; provided, however, Tenant shall in all
instances have no less than thirty (30) days’ prior notice of such new payment
amount, and (ii) pay such modified amount thereafter during such Lease Year. 
Landlord shall monitor the Monthly Estimated Operating Expense Payment against
actual and anticipated Operating Expenses and reduce the amount thereof if
Landlord reasonably determines that it is collecting substantially (for purposes
of this subsection 5.03(b), defined to mean ten percent (10%) or more) in excess
of the amount reasonably required.

 

(c)                                  Landlord shall in no event recover more
than the actual costs and expenses actually incurred and paid by Landlord in
operating and maintaining the Premises, as set forth below (the “Operating
Expenses”), including, without limitation, performing the work pursuant to
Section 11 and providing all services pursuant to Section 17 hereof.  Landlord
shall not make a profit from the collection of the Operating Expenses from
Tenant.  Notwithstanding anything contained in the Lease to the contrary, prior
to the Rent Commencement Date, Tenant shall only

 

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be required to pay for Operating Expenses if and to the extent of such Operating
Expenses actually, demonstrably incurred as a result of Tenant’s occupancy of
the Premises.  Except as otherwise provided in this Lease, Operating Expenses
shall mean (i) real estate taxes and similar taxes or assessments in lieu
thereof for the Building (the “Real Estate Taxes”), subject to any abatements or
credits and any savings that can be achieved for the early payment thereof
(whether or not Landlord does, in fact, pay such taxes early) (“Real Estate Tax
Expenses”); (ii) public and private assessments, levies or charges; (iii) the
cost of labor (including, without limitation, salaries, wages and all fringe
benefits made to or on behalf of any and all employees or agents of Landlord to
the extent performing on site services rendered in connection with the
operation, repair, maintenance, protection and management of the Building, all
of which expenses shall not exceed the market rate for such services based on a
competitively bid third party contract for other comparable office buildings in
the area of the Building), permits, supplies, parts, tools, equipment, premiums
for insurance required to be maintained by Landlord hereunder and other
reasonable and necessary insurance based upon competitive bidding, market-rate
management fees, maintenance and service contracts with independent contractors;
(iv) capital improvements and major repairs/replacements made primarily for the
purpose of reducing energy costs, provided that in any calendar year Landlord
may only recover such costs to the extent of demonstrated, actual cost savings
in such calendar year; (v) condominium association fees, if any, provided that
the imposition of condominium association fees does not increase costs to Tenant
and provided Landlord’s subjecting the Premises to a condominium regime does not
in any way, directly and solely as a result thereof, limit or impair Tenant’s
use or occupancy of the Premises or increase Tenant’s Operating Expenses taken
as a whole; and (vi) all other items properly constituting direct operating
costs according to GAAP, whether similar or dissimilar to the foregoing.  All
costs included in Operating Expenses shall be charged to Tenant at Landlord’s
actual costs with no mark up, billing fee, service fee or other sum payable to
Landlord and any cost or expense of the nature included in Operating Expenses
shall be included no more than once.

 

(d)                                 Operating Expenses shall not include:
capital expenditures except (i) as provided in Section 5.03(c) or (ii) if such
capital expenditure was required to comply with applicable law, in which case
such expense may be amortized over its useful life with interest at Landlord’s
borrowing rate; management fees to the Management Company greater than the fees
being charged by independent third party managers in the market based on
competitive bidding, but in no event greater than *** percent (***%) of the then
current Stripped Rent in the aggregate (provided, however, in the event Tenant
exercises its right to replace the Management Company pursuant to Section 17.09
and engages a manager directly, no management fee may be included in Operating
Expenses); depreciation or amortization or interest paid on any mortgage, or
ground rents paid under land leases; any costs incurred in the ownership of the
Building, as opposed to the operation and maintenance of the Building, including
income taxes, excess profit taxes, franchise taxes, capital stock taxes or
similar taxes on Landlord’s business except to the extent the same is an
Imposition (as defined hereinafter); commissions payable to leasing brokers,
utility costs directly metered to or paid by Tenant; any materials, goods,
products or services paid for directly by Tenant; wages, salaries or other
compensation paid to employees above the level of the property manager referred
to in Section 17.01; leasing commissions, finders’ fees and all other leasing
expenses incurred in procuring tenants in the Building including Tenant;

 

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preparation of income tax returns; corporation, partnership or other business
form organizational expenses; filing fees; general corporate overhead, general
administrative expenses; or other such expenses; any costs incurred in removal,
cleaning, abatement or remediation of any environmental hazard or condition in
violation of any environmental law (except to the extent caused directly by
Tenant) but such exclusion does not relieve Tenant of Tenant’s obligations and
liabilities as provided in Section 12; the cost of correcting violations of or
non-compliance with law or code existing as of the Commencement Date; legal fees
for the negotiation or enforcement of leases; the cost of constructing tenant
improvements or installations for Tenant; principal payments of any mortgage and
other non-operating debts of Landlord; brokerage commissions, origination fees,
points, mortgage recording taxes, title charges and other costs or fees incurred
in connection with any financing or refinancing of the Building or the securing
or defense of Landlord’s title to the Building; advertising and promotional
expenses, including brochures with respect to the Building; cost of repairs or
replacements occasioned by fire, windstorm or other casualty, the costs of which
are covered by insurance maintained or required to be maintained by Landlord
under this Lease or reimbursed by governmental authorities in eminent domain or
reimbursed by third parties (other than through Operating Expenses); amounts
paid to subsidiaries or affiliates of Landlord for services in or to the
Building, to the extent that the costs of such services exceed market-based,
competitively bid costs for such services rendered by unaffiliated persons or
entities of similar skill, competence and experience; penalties, fines, legal
expenses, or late payment interest incurred by Landlord due to violation by
Landlord, or Landlord’s agents, contractors or employees, of either the payment
terms and conditions of any lease or service contract covering space in the
Building or Landlord’s obligations as owner of the Building (such as, but not
limited to, late payment penalties and interest on real estate taxes and late
payment of utility bills); any compensation paid to clerks, attendants or other
persons in any commercial concession operated by Landlord in the Building from
which Landlord receives any form of income whatsoever, whether or not Landlord
actually makes a profit from such concession; costs incurred in connection with
correcting defects or nonconforming Work, or any other deficiencies existing as
of the Commencement Date or during any warranty period, latent defects in the
Building, or in repairing or replacing Building equipment, where such repair or
replacement results from original defects in design, manufacture or installation
rather than from ordinary wear and tear or use (provided, however that Landlord
shall bear no financial responsibility for the failure of the Tenant Specified
Improvements to meet Tenant’s requirements, provided that the Tenant Specified
Improvements were built to (and installed, as the case may be) in accordance
with the specifications set forth in the Construction Documents and perform in
accordance with the manufacturer’s specifications for such Tenant Specified
Improvements; provided further, by way of example, if the specifications in the
Construction Documents provide for the cooling setpoint for a laboratory to be
72 degrees dry bulb temperature and 30% relative humidity and such
specifications are met, then such Work would not be considered defective,
nonconforming or otherwise deficient regardless of whether such specifications
are sufficient for Tenant’s requirements; however, if the aforementioned
specifications were not met then the Work would be considered defective,
nonconforming or otherwise deficient); rentals and other related expenses
incurred in leasing air conditioning systems, elevators or other equipment
ordinarily considered to be of a capital nature other than equipment used in
providing janitorial services and not affixed to the Building; structural
repairs to the foundations, walls or roof of the Building; or lease concessions,
including rental

 

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abatements and construction allowances granted to other tenants.  For purposes
hereof, “Tenant Specified Improvements” shall mean Tenant’s specialty equipment
or other specialty installations or improvements for the lab and vivarium that
were included in the Work and based on requirements or specifications, or both,
specifically requested or imposed by Tenant.

 

(e)                                  [Intentionally Omitted]

 

(f)                                   If this Lease expires or terminates other
than at the end of a calendar year the Operating Expenses under this
Section 5.03 for the year during which the Lease expires or terminates shall be
pro-rated as of the expiration or sooner termination of this Lease.

 

(g)                                  Landlord shall endeavor, within ninety (90)
days after the end of each calendar year of this Lease (and shall deliver in no
event later than one hundred and eighty (180) days after the end of each
calendar year of this Lease) and within ninety (90) days after the expiration of
this Lease (and shall deliver in no event later than one hundred and eighty
(180) days after the expiration of this Lease), to deliver to Tenant a statement
from Landlord of the actual amount of Operating Expenses for the preceding
calendar year (or, if the notice is given after the expiration of the Lease, for
the applicable portion of the preceding calendar year and/or the then current
calendar year, as the case may be) (the “Actual Expense Statement”).  If such
Actual Expense Statement reveals that any Additional Rent is due Landlord,
Tenant shall, subject to Tenant’s contest and audit rights as hereinafter
provided, pay such deficiency to Landlord within forty-five (45) days, without
further demand.  If the statement reveals that Tenant has overpaid the amount of
Additional Rent, Landlord shall reimburse Tenant within forty-five (45) days of
such determination or, if Landlord fails to reimburse Tenant in full within such
forty-five (45) day period, then Landlord shall credit such overpayment against
the next payment of Rent to come due (or if the statement is delivered after the
expiration of the Lease, and all sums due Landlord under the Lease have been
paid in full, Landlord shall refund such overpayment to Tenant at that time).

 

(h)                                 At any time during the Lease and within two
(2) years after receiving an Actual Expense Statement, upon not fewer than seven
(7) business days prior written notice delivered to Landlord, Landlord shall
give Tenant the opportunity during normal business hours to engage an auditor of
Tenant’s choosing to audit Landlord’s books and records relating to Operating
Expenses (including Real Estate Tax Expenses) with respect to the then-current
and immediately preceding calendar year.  Thereafter, Tenant shall have the
right to audit, and Landlord shall reasonably cooperate and make available to
Tenant or an independent auditor engaged by Tenant the books, records, and such
personnel as may be reasonably required to perform such analysis.  If Landlord
disputes the findings of Tenant’s audit, Landlord and Tenant shall work
cooperatively and in good faith to resolve such dispute.  The cost of such audit
by said firm shall be paid as follows (i) Tenant shall pay the cost of such
audit if it is determined that Landlord’s original determination of the actual
Operating Expenses was correct (ii) Tenant shall pay the cost of such audit if
it is determined that Landlord’s original determination of the actual Operating
Expenses was not in error by more than *** percent (***%); and (iii) Landlord
shall pay the cost of such audit if it is determined that Landlord’s original
determination of the actual Operating Expenses exceeded the actual Operating
Expenses by more than *** percent (***%).

 

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(i)                                     Landlord covenants to pay all Real
Estate Taxes on or before the date required for Landlord to receive the maximum
discount available from the relevant taxing authority.  Tenant shall not be
obligated to pay, and Landlord shall pay, any and all penalties, late fees or
other charges assessed on account of any Real Estate Taxes not being paid in
accordance with the preceding sentence.  If Landlord shall receive any refund of
Real Estate Taxes in respect of a calendar year for which Tenant shall have made
payment, Landlord shall deduct from such tax refund any reasonable expenses
actually incurred by Landlord in obtaining such tax refund, and shall remit the
remaining balance to Tenant within thirty (30) days of receipt thereof by
Landlord.  Landlord shall use its commercially reasonable efforts to obtain any
readily available savings in Real Estate Tax Expenses, such as credits or
abatements.  If required by Landlord, Tenant shall reasonably cooperate with
Landlord in obtaining such tax savings.  Tenant shall have the right from time
to time to contest or appeal, at Tenant’s sole cost and expense, the amount or
validity, in whole or in part, of any tax included in the Real Estate Tax
Expenses, by appropriate proceedings diligently conducted by Tenant in good
faith.  Tenant shall notify Landlord of Tenant’s intention to contest such tax
prior to filing any applications, affidavits or other documentation required in
connection with such effort.  Landlord shall reasonably cooperate with Tenant
(including signing applications and the like, if so requested by Tenant) if at
no cost to Landlord.  Notwithstanding anything in this Section 5.03 to the
contrary, Landlord shall reimburse Tenant for an equitable portion, as
reasonably determined by Landlord and Tenant, of the documented, reasonable,
actual out-of-pocket costs and expenses paid by Tenant for a permitted tax
contest or appeal to the extent of savings enjoyed by Landlord in respect of
partial or full years following the expiration or earlier termination of this
Lease.

 

(j)                                    Notwithstanding anything in this Lease to
the contrary, Tenant shall not be obligated to pay any amounts to Landlord that
Tenant disputes in good faith (provided Tenant has reported such dispute to
Landlord in writing) until such time as such dispute is resolved.

 

5.04                        Except as excluded pursuant to Section 5.03(d), if
any law, ordinance or regulation now or hereafter imposes a tax, assessment,
levy or other charge (all of which are hereinafter called “Impositions”)
directly or indirectly on Landlord with respect to (a) this Lease or the value
thereof, (b) the use or occupancy of the Premises by Tenant, or (c) the Minimum
Monthly Rent, Additional Rent or any other sums payable by Tenant under this
Lease or upon this transaction, Tenant agrees to pay Landlord, as Additional
Rent hereunder within thirty (30) days of invoicing, the amount of all such
Impositions.  Notwithstanding anything in this Lease to the contrary, Tenant
shall be solely responsible for the payment of taxes imposed with respect to
Tenant’s personal property at the Premises.

 

5.05                        Any installment or installments of Rent that are not
paid within ten (10) days after the date properly due will bear interest at the
Default Rate.  Any interest due as set forth in the preceding sentence shall be
calculated from the due date of the delinquent payment until the date of
payment, which interest will be deemed Additional Rent and shall be payable by
Tenant upon demand by Landlord.

 

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6.                                      COVENANT TO PAY RENT AND ADDITIONAL
RENT.

 

Except as otherwise expressly set forth in this Lease, Tenant shall, without any
demand therefor, and without setoff, deduction or counterclaim, pay the Minimum
Monthly Rent, the Additional Rent and all other sums which may become due by
Tenant under this Lease (collectively, the “Rent”), on the first of each month
in advance, or at the times, at the place and in the manner otherwise herein
provided.  All sums which may be due by Tenant under this Lease shall be payable
as Rent for all purposes, whether or not they would otherwise be considered
Rent.

 

7.                                      ASSIGNMENT AND SUBLETTING.

 

7.01                        Except as otherwise expressly permitted by the terms
of this Lease, Tenant shall not assign, mortgage, pledge or encumber this Lease,
or sublet all or any part of the Premises without, on each occasion, first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

7.02                        In the event Tenant desires to do any of the
foregoing in Section 7.01, Tenant shall give Landlord at least ten (10) days,
but no more than one hundred and eighty (180) days, prior written notice thereof
(“Tenant’s Section 7.02 Notice”).  Such notice shall set forth (i) the names of
the parties involved, (ii) in the instance of a sublease, whether or not the
entire square footage of the Premises is proposed to be sublet, (iii) reasonable
financial information regarding the proposed assignee or sublessee and its
business and experience (unless the proposed assignee or sublessee is a public
company) and the nature of such proposed assignee’s or sublessee’s use of the
Premises, (iv) the proposed effective date of such transaction (“Proposed
Effective Date”) and (v) all other material information as may be available to
Tenant and Landlord may reasonably request.  If Landlord fails to respond to
Tenant’s Section 7.02 Notice within five (5) days of delivery, Tenant may, at
any time, send a second Section 7.02 Notice, and if Landlord fails to respond to
Tenant’s second Section 7.02 Notice within five (5) days of delivery, Landlord
shall be deemed to have approved Tenant’s proposed assignment of the Lease or
mortgage, pledge, encumbrance or sublease of all or any part of the Premises. 
Tenant shall, within thirty (30) days of receipt of invoice from Landlord,
reimburse Landlord for up to (but not exceeding) *** Dollars ($***) of
Landlord’s actual, out of pocket expenses incurred on each occasion in
connection with a review of Tenant’s Section 7.02 Notice and processing Tenant’s
request.

 

7.03                        Except as hereinafter expressly provided, Tenant
shall at all times remain directly, primarily and fully responsible and liable
for the payment of the Rent specified in this Lease and for compliance with all
of its other obligations under the terms, provisions and covenants of this
Lease.  The foregoing notwithstanding, in the event of any assignment of the
Lease to a tenant that, immediately preceding such assignment, satisfies the
Financial Condition (as defined below) and who shall, in writing, assume and
agree to perform all of the obligations of Tenant thereafter arising under this
Lease, including, without limitation, Tenant’s obligations pursuant to Article 3
hereof (or in the event that such tenant shall supply a guarantor who satisfies
such condition), then Tenant shall be released from all further obligations
under this Lease that accrue after the date of such assignment and assumption. 
Upon the occurrence of an Event of Default (as hereinafter defined), if the
Lease has been assigned or Premises, or any part of them, are then

 

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sublet, then Landlord may, at its option, collect directly from such tenant all
rents due and becoming due to Tenant under such assignment or sublease and apply
such rent against any sums due to Landlord from Tenant under this Lease.  No
such collection shall be construed to constitute a novation or release of Tenant
from the further performance of Tenant’s obligations under this Lease, including
Tenant’s obligation to pay any unpaid balance of Rent due or to become due
hereunder.  As used herein, “Financial Condition” of a person or entity shall
mean, as measured immediately preceding such assignment: (i) a consolidated net
worth at least equal to Tenant’s net worth (but not less than Tenant’s
consolidated net worth as of the Effective Date), (ii) liquidity on a
consolidated basis in cash or cash equivalents (cash, cash equivalent and
marketable securities) net of corporate debt (notes, bonds, bank loans, amounts
drawn from bank line of credits, and mortgages, but excluding any liabilities
recorded in conjunction with this Lease) of at least *** Dollars ($***), and
(iii) consolidated EBITDA equal to or greater than *** Dollars ($***) for four
(4) trailing quarters as measured by such person or entity’s most recent 10-K
and/or 10-Q filings (or, if such person or entity does not make 10-K and 10-Q
filings, as measured by such person or entity’s annual and/or quarterly reports
or similar regularly prepared reports).  For purposes of this Lease, the term
“consolidated net worth” of a person or entity shall mean the consolidated total
assets less consolidated total liabilities of such person or entity, all as
determined in accordance with GAAP.

 

7.04                        Tenant may, without the consent of Landlord, at any
time and from time to time, and provided there is then no Event of Default
outstanding that would not be cured by the assignment or subletting, assign this
Lease or sublet a portion or portions of the Premises to an Affiliate.  For
purposes of this Lease, “Affiliate” shall mean any party that controls, is
controlled by or is under common control with Tenant.  Tenant shall promptly
report to Landlord any such assignment or sublease to an Affiliate.  For the
avoidance of doubt, in the event of an assignment or sublease to an Affiliate,
Tenant shall remain liable hereunder unless (i) *** shall *** the ***, (ii) ***
the *** in the *** in *** with respect to *** pursuant to ***, or (iii) Landlord
otherwise consents in writing to Tenant’s release.

 

7.05                        Notwithstanding anything in this Section 7 to the
contrary, the offer, transfer or trade of publicly or non-publicly traded shares
of Tenant or any direct or indirect parent of Tenant shall not constitute an
assignment of this Lease and shall not be subject to the provisions of this
Section 7, provided such offer, transfer or trade is made for a business purpose
and not principally for effecting a transfer of this Lease otherwise requiring
Landlord’s consent.

 

7.06                        Transfers in connection with a merger,
consolidation, change of control or other reorganization of Tenant, or the sale
of all or substantially all of the assets or equity of Tenant shall not be
considered an assignment and shall not be subject to the provisions of this
Section 7 if the consolidated net worth of the survivor (or ultimate transferee
of the Lease) in such transaction, or a guarantor supplied by such party, shall
be the same or better than the consolidated net worth of Tenant as of the day
immediately prior to such transaction and provided such merger, consolidation,
change of control or other reorganization is made for a business purpose and not
principally for effecting a transfer of this Lease otherwise requiring
Landlord’s consent.  The term “change of control” shall mean the sale or
transfer in one negotiated transaction or a series of negotiated related
transactions to a person or entity or group

 

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of related persons or entities of more than fifty percent (50%) of the voting
power of the then outstanding voting stock of Tenant entitled to vote generally
in the election of Tenant’s directors.

 

7.07                        Any actual assignment of Tenant’s interest in this
Lease shall be documented with an instrument in writing pursuant to which the
assignee shall agree to be bound by the terms and conditions hereof and shall
assume all of the Tenant’s obligations thereafter accruing.

 

7.08                        Any purported assignment, sublease, transfer,
mortgage, pledge or encumbrance of this Lease that does not comply with the
provisions of this Section 7 shall, at Landlord’s option, be void.

 

8.                                      ALTERATIONS.

 

8.01                        Except as otherwise expressly provided in this
Lease, no alterations which would (a) materially affect the structure or utility
and mechanical systems of the Building or other portions of the Premises,
(b) have a use or nature inconsistent with the improvements as of the
Commencement Date (by way of example, “Alterations” shall not include converting
lab space to office space and vice versa), or (c) have a material adverse effect
on the market value of the Premises (by way of example, an Alteration that
would, in fact, diminish the value of the Premises and is not permitted, under
applicable law, to be removed or materially altered) (collectively the
“Alterations”) shall be made to the Premises by or on behalf of Tenant unless
Tenant shall first submit on each occasion a detailed description thereof to
Landlord, together with all other material information reasonably requested, and
Landlord shall consent thereto in writing, such consent not to be unreasonably
withheld, conditioned or delayed.  In the event that Landlord does not respond
to Tenant’s request within fifteen (15) days, Landlord shall be deemed to have
consented to such Alterations.  All Alterations made by or on behalf of Tenant
and all fixtures attached to or used in connection with the Premises, upon the
completion or installation thereof and if approved or deemed approved by
Landlord, (a) subject to the remaining provisions of this Section 8.01,
immediately shall be and become a part of the Premises and the property of
Landlord, without payment therefor by Landlord, and shall remain at the Premises
(provided that nothing herein shall prevent Tenant from taking depreciation on
or claiming an interest in Alterations made by Tenant) or (b) shall be removed
at the cost of Tenant before the expiration or sooner termination of this Lease,
but only if such Alterations materially change the nature of the Building as it
existed as of the Commencement Date and Landlord expressly required such removal
in Landlord’s written consent to such Alterations and, in such event, Tenant
shall repair all damage to the Premises caused by the installation and/or
removal thereof.  Notwithstanding the foregoing, (i) nothing herein shall
preclude Tenant’s removal of Alterations should Tenant, at any time, determine
to do so, and (ii) in no event may Landlord require the removal of office or lab
Alterations whenever constructed, if materially consistent with the uses to be
made of the Premises pursuant to this Lease.

 

8.02                        In the event Landlord consents to the making of any
such Alteration by Tenant, the same shall be made in accordance with all
applicable laws and using a reputable, licensed contractor at Tenant’s sole cost
and expense.

 

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8.03                        Notwithstanding the foregoing, without obtaining
Landlord’s consent, Tenant shall have the right to alter, modify or improve the
Premises from time to time, provided, however, all “Alterations” must comply
with Section 8.01 above; and Tenant shall have the right to install in the
Premises trade fixtures required by Tenant in its business and at its option to
remove such trade fixtures at any time prior to or upon expiration or earlier
termination of this Lease; provided, however, that no such installation or
removal shall impair the structure of or systems or utilities for the Building
or other portions of the Premises.  Tenant shall repair and restore before the
expiration or sooner termination of this Lease, any damage or injury to the
Premises caused by the installation or removal of any such trade fixtures.

 

8.04                        For the avoidance of doubt, the provisions of
Section 8 (inclusive of any removal and restoration obligations) shall not apply
to the Work.

 

9.                                      LIENS.

 

9.01                        Tenant shall not suffer or permit any liens to stand
against the Premises, the Building or any part thereof, by reason of any work,
labor, services or materials supplied to, or claimed to have been supplied to,
Tenant or anyone holding the Premises, the Building or any part thereof through
or under Tenant.

 

9.02                        Tenant shall promptly pay all persons furnishing
labor or materials with respect to any work performed by Tenant or its
contractors on or about the Premises.  If any mechanic’s or other liens shall at
any time be filed against the Premises or the Building by reason of work, labor,
services or materials performed or furnished, or alleged to have been performed
or furnished, to Tenant or to anyone holding the Premises through or under
Tenant, and regardless of whether any such lien is asserted against the interest
of Landlord or Tenant, Tenant shall within forty-five (45) days after the
earlier of written notice from Landlord to Tenant, or Tenant’s actual knowledge
of the filing thereof, cause the same to be discharged or canceled of record or
bonded.  If Tenant shall fail to cause such lien forthwith to be so discharged
or canceled or bonded after the filing thereof, then in addition to any other
right or remedy of Landlord, Landlord may bond or discharge the same by paying
the amount claimed to be due, and the actual amount so paid by Landlord, shall
be immediately due and payable by Tenant to Landlord as Additional Rent. 
Nothing herein shall be deemed to preclude Tenant from contesting in good faith
any liens, so long as the same have been bonded, or discharged as provided
herein.

 

9.03                        Landlord hereby expressly waives any statutory,
common law or contractual right to lien Tenant’s property to the fullest extent
permitted by law, other than the rights of a judgment creditor that arise after
the Effective Date by reason of holding a judgment, and to the extent such
waiver is not permissible, Landlord hereby fully subordinates such rights to the
liens of Tenant’s lenders and equipment lessors.

 

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10.                               NOTICE OF BREAKAGE.

 

Tenant shall give to Landlord prompt written notice of any material accident,
breakage or defects, of which Tenant has knowledge, concerning the wiring,
plumbing, heating or cooling apparatus, elevators, or other Building systems and
related apparatus located in the Building or the Premises.

 

11.                               REPAIR AND CONDITION OF PREMISES.

 

11.01

 

(a)                                 During the Term, Tenant shall keep the
Premises, and upon expiration of this Lease shall leave the Premises, in the
same condition as of the Commencement Date, ordinary and reasonable wear and
tear, damage by fire or other casualty (not the fault of Tenant, but subject to
Section 14.05 of this Lease), takings by condemnation or eminent domain and the
obligations of Landlord excepted.

 

(b)                                 At least thirty (30) days before the last
day of the Term, Landlord and Tenant shall meet for a joint inspection of the
Premises, and Landlord shall, not later than ten (10) days thereafter, notify
Tenant in writing of any repairs that must be made to the Premises in order for
Tenant to meet Tenant’s surrender obligations pursuant to
Section 11.01(a) above.  The foregoing shall be a good faith effort to identify
observed conditions at the Premises, but in no event shall such written
inspection notice limit Tenant’s surrender obligations pursuant to
Section 11.01(a) above.  At or prior to the expiration or sooner termination of
this Lease, Tenant shall, subject to Section 8 above, remove all of its personal
property from the Premises, including, without limitation, all chemicals,
compounds and animals, decontamination of the Premises and decommission all
laboratory and other non-office space, so that Landlord may again have and
possess the Premises; provided however that any such removal, decontamination
and decommissioning shall be subject to and in compliance with all applicable
state and federal laws and regulations and any such decontamination and
decommissioning shall be in accordance with industry standard best practices. 
Upon expiration of the Lease and surrender of the Premises, should Tenant fail
to remove all of its property from the Premises, Landlord may (but is not
obligated to) dispose of Tenant’s property left in the Premises, at Tenant’s
cost and without any liability to Tenant whatsoever; provided, however, that
Landlord must comply with all applicable laws and regulations regarding such
removal and disposal.  The provisions of this Section 11.01 shall survive the
expiration or sooner termination of this Lease.

 

11.02                 Landlord shall be responsible for all routine and
customary maintenance, and for all necessary repairs and replacements of and to
the Building and Premises, the roof, all structural components of the Building
and the Land (including the parking areas, drives, sidewalks, landscaping and
hardscaping) and all systems, facilities and equipment, except to the extent
caused by Tenant’s gross negligence or willful misconduct.  Landlord shall not
be responsible for any maintenance of personal property, trade fixtures, or
office equipment.  Landlord shall not be liable for any damages resulting from
any failure to make any repairs, unless such failure shall persist for more than
fifteen (15) days after written notice (or such greater period as is reasonably
necessary to make such repairs using commercially reasonable efforts or such
lesser period as is reasonable in the event of an emergency), of the need for
such repairs is given to Landlord by Tenant unless Landlord otherwise has actual
knowledge of the

 

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same.  Landlord shall coordinate the completion of non-emergency maintenance,
replacement and repairs with Tenant and shall use commercially reasonable
efforts to cause such maintenance, replacement and repairs that are to the
interior of the Premises to be performed at times other than normal business
hours of Tenant (7:00 a.m. to 6:00 p.m. Monday through Friday, hereinafter
“Business Hours”).  Without limitation of the foregoing, any condition which
renders all or a material portion of the Premises unusable, including, without
limitation any failure of the Building HVAC system to operate in accordance with
Section 17 of this Lease, shall constitute an emergency requiring repair by
Landlord within 24 hours of Landlord’s receipt of notice of such failure and an
equitable portion of the Minimum Monthly Rent (based upon the portion of the
Premises rendered reasonably unusable) shall abate if such failure is not the
fault of Tenant (provided, however, if and to the extent Landlord is able to
recover insurance proceeds as a result of such failure, rent shall abate
regardless of fault) and not corrected within 24 hours and shall continue until
Tenant is again able to use the Premises for the Permitted Use.

 

11.03                 Landlord shall cooperate with Tenant with respect to the
selection of contractors and service providers to be used in connection with
Landlord’s maintenance, repair and service obligations under this Lease.  Tenant
shall have the right to request Landlord utilize contractors or service
providers of Tenant’s choice or to make recommendations to Landlord regarding
the contractors or service providers to be used, as well as the nature and scope
of work and services to be provided, provided the same are reasonably acceptable
to Landlord.  Tenant shall have reasonable review rights in connection with all
such contracts.  In addition, at Tenant’s sole option, Tenant shall have the
right to contract directly for the provision of contractors or service providers
reasonably acceptable to Landlord.  In the event that Tenant contracts directly
for any maintenance, repair or service (which shall include, without limitation,
Tenant’s engagement of any replacement Management Company pursuant to
Section 17.09 hereof), Landlord shall have no liability for any such contractors
or such work and shall be held harmless from the same, and Tenant shall be
solely responsible for such contractors and such work.

 

12.                               HAZARDOUS MATERIALS.

 

12.01                 “Hazardous Materials” shall mean asbestos, petroleum or
petroleum derivatives, or biologically or chemically active materials,
biohazardous wastes or other hazardous substances, hazardous wastes or
materials, listed or described in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Section 6901 et seq.) and all other federal, state or local laws, and the
regulations adopted under these acts or similar laws, regulations, statutes,
ordinances relating to the protection of human health or the environment
(“Environmental Laws”).  Tenant shall not, through act or omission, cause or
permit the escape, disposal or release of any Hazardous Materials at the
Premises in violation of Environmental Laws during the Term.  Tenant shall not
allow the storage or use of Hazardous Materials in any manner not sanctioned by
or permissible under Environmental Laws for the storage and use of Hazardous
Materials, nor allow to be brought into the Building any Hazardous Materials,
except in accordance with applicable Environmental Laws and to use in the
ordinary course of Tenant’s business, laboratory and vivarium operations, and
normal materials used in the commercial office, laboratory or vivarium
environment, in commercially acceptable

 

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quantities, including but not limited to items such as janitorial supplies,
copier and printer toner and other materials specific to the Intended Use or
Permitted Use, in each case only if used, stored and disposed of in accordance
with Environmental Laws.  To the extent required by Environmental Laws, Landlord
shall investigate and remediate any Hazardous Materials located prior to the
Commencement Date, or due to the actions or omissions of a third party
(excluding Tenant’s agents), in, on or under the Building or Premises; provided,
however, that Landlord shall use commercially reasonable efforts to avoid such
investigation or remediation by Landlord that unreasonably disturbs Tenant’s
operations at the Premises.

 

12.02                 Landlord represents and warrants that except as disclosed
in information and reports obtained or received by Landlord, listed on
Exhibit I, true and correct copies of which Landlord has heretofore delivered to
Tenant (the “Reports”), (i) to the best of Landlord’s knowledge, there are no
Hazardous Materials located in, on or under the Building, Premises or properties
adjacent thereto, and there is no existing violation of Environmental Laws
governing the use of Hazardous Materials at the Building, Premises, or
properties adjacent thereto; and (ii) neither Landlord nor any other person or
party has heretofore used, generated, manufactured, produced, or, to the best of
its knowledge, based on the Reports, stored, released, discharged or disposed of
on, under or about the Building or transported to the Building, any Hazardous
Materials beyond normal materials used in the commercial office environment, in
commercially acceptable quantities, including but not limited to items such as
janitorial supplies, copier and printer toner; and (iii) to the best of
Landlord’s knowledge, there are no underground or above ground storage tanks
located on or within the Building, Premises, or properties adjacent thereto. 
Landlord shall not bring or otherwise cause to be brought or permit any of its
agents, employees, contractors, or invitees to bring in, on or about any part of
the Premises or the Building any Hazardous Materials, beyond normal materials
used in the commercial office environment, in commercially acceptable
quantities, including but not limited to items such as janitorial supplies,
copier and printer toner.  Landlord represents and warrants that, to the best of
Landlord’s knowledge, Exhibit I lists all reports concerning Hazardous Materials
and compliance of the Property with Environmental Law, of which Landlord has
knowledge.

 

12.03                 Landlord shall indemnify Tenant and hold it harmless from
and against any and all claims, liabilities, losses, actions, suits or
proceedings at law or in equity, or other expenses, fees (including, but not
limited to attorney fees and consultant fees), or charges of any character or
nature arising from or related to (i) the breach of any representation of
Landlord in Section 12.02, or (ii) the presence of Hazardous Materials located
prior to the Commencement Date, or at any time caused or created by Landlord or
its agents, contractors, invitees or visitors, or due to the actions or
omissions of a third party (excluding Tenant or Tenant’s agents, contractors,
invitees or visitors) in, on or under the Building, Premises or Land.

 

12.04                 Tenant shall give Landlord written notice, within a
reasonable time after first becoming aware, of the presence or discharge of
Hazardous Materials on or about the Premises.  Tenant shall indemnify Landlord
and hold it harmless from and against any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or other expenses, fees
(including, but not limited to attorney fees and consultant fees), or charges of
any character or nature caused or created by the presence of or a discharge of
Hazardous Materials brought onto

 

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the Premises by Tenant or its agents, contractors, invitees or visitors in, on
or under the Building, Premises or Land.

 

12.05                 The provisions of this Section 12 shall survive the
expiration or earlier termination of the Lease.

 

13.                               FIRE AND OTHER CASUALTY.

 

13.01                 Tenant shall give to Landlord prompt written notice of any
fire or other casualty to the Premises (a “Casualty”).  If, during the Term or
any renewal or extension thereof, the Building is so damaged by Casualty such
that the Building or the Premises is rendered substantially unfit for occupancy
by Tenant for the Intended Use (as reasonably determined by a reputable,
licensed independent architect experienced in the design and construction of
similar buildings, selected by Landlord and reasonably acceptable to Tenant
(“Landlord’s Architect”), in consultation with Tenant, recognizing the
particular requirements of Tenant’s Intended Use), and cannot be restored within
*** of the Casualty as reasonably determined by Landlord’s Architect, in
consultation with Tenant, then, at Landlord’s option, within forty-five (45)
days of the date of such Casualty, exercisable upon notice sent by Landlord,
this Lease shall terminate, as of the termination date set forth in such notice
(which termination date may not be less than ninety (90) days after the date of
such notice); provided, however if Tenant is unable to find suitable alternative
space and move its operations to such alternative space within the ninety (90)
day notice period, the termination date shall, to the extent not prohibited
under applicable code, be extended by such additional period as may be
reasonably necessary to enable Tenant to find and relocate to new space.  In any
case, Tenant shall pay the Rent apportioned to the date of the Casualty, and
Landlord shall repay to Tenant all pre-paid Rent for periods beyond the date of
the Casualty.

 

13.02                 If Landlord does not elect to terminate this Lease in
accordance with the provisions of Section 13.01, Landlord shall, within
forty-five (45) days of the date of any Casualty, notify Tenant in writing of
the independent architect’s reasonable estimate of the anticipated date of
completion of the repairs required to restore the Premises to substantially the
same conditions as existed prior to such Casualty including obtaining all
applicable permits (“Landlord’s Repair Notice”).  If Landlord fails to timely
furnish such notice, or such notice states that such damage cannot be repaired
within *** of the date of the casualty, Tenant shall have the right to terminate
this Lease by sending written notice to Landlord within ninety (90) days of
receiving Landlord’s Repair Notice.

 

13.03                 Notwithstanding the provisions of Section 13.01 or 13.02,
if, during the last two (2) years of the Term or any renewal or extension
thereof, the Building is so damaged by Casualty such that any portion of the
Building or the Premises is rendered substantially unfit for occupancy or
unusable for Tenant’s use for at least ninety (90) days (as reasonably
determined by Landlord’s Architect in consultation with Tenant, recognizing the
particular requirements of Tenant’s Intended Use), either party shall have the
right to terminate this Lease by sending written notice to the other party
within ninety (90) days of such Casualty.

 

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13.04                 If (a) Landlord does not elect to terminate this Lease in
accordance with the provisions of Sections 13.01 and 13.03 and Tenant does not
elect to terminate this Lease in accordance with the provisions of Sections
13.02 or 13.03, or (b) the Building shall be damaged so that such damage renders
neither the Building nor the Premises substantially unfit for occupancy (as
reasonably determined by Landlord’s Architect in consultation with Tenant,
recognizing the particular requirements of Tenant’s Intended Use), Landlord
shall, at its sole cost and expense, repair the damage to the Building and the
Premises, including the Work, to substantially the same condition of the
Building and the Premises immediately prior to such damage, subject to
applicable codes and regulations, and Landlord may enter and possess all or any
portion of the Premises for that purpose.  All restoration of the Building,
Premises and Work shall be in consultation with Tenant and pursuant to
construction documents approved by Tenant to the extent of any material changes
from the condition prior to the Casualty required by changes in applicable law
or code, which approval shall not be unreasonably withheld, conditioned or
delayed.  For so long as Tenant is deprived of the use of the Premises or any
part thereof, the Minimum Monthly Rent and Additional Rent shall be abated in
the proportion to the number of square feet of the Premises rendered unfit for
occupancy or unsuitable for use, as reasonably determined by Landlord’s
Architect in consultation with Tenant, recognizing the particular requirements
of Tenant’s Intended Use (the parties agreeing that casualty damage to only a
portion of the Premises may render a greater portion unfit for occupancy or
otherwise unsuitable for use).  If the repairs are not substantially completed
by the date specified in Landlord’s Repair Notice, except to the extent caused
by Force Majeure (not to exceed thirty (30) days) or a Tenant Delay (subject to
the notice requirements set forth in Section 2.01(b) for a Tenant Delay), Tenant
shall be entitled to terminate this Lease by providing written notice to
Landlord (“Tenant’s Casualty Termination Notice”) given no later than thirty
(30) days after the specified date for substantial completion in Landlord’s
Report Notice or such longer period by virtue of Force Majeure (not to exceed
thirty (30) days) or Tenant Delay (subject to the notice requirements set forth
in Section 2.01(b) for a Tenant Delay); provided, however, if the repairs are
substantially completed within thirty (30) days of the date of Tenant’s Casualty
Termination Notice, the Tenant’s Casualty Termination Notice shall be null and
void and the Lease shall continue in full force and effect.

 

13.05                 In the event of any termination of this Lease pursuant to
the provisions of Sections 13.01, 13.02 or 13.03, the parties shall cooperate
fully with one another in the pursuit and settlement of insurance claims.
Landlord shall be obligated to reimburse to Tenant, on a pari passu basis, the
insurance proceeds received by Landlord, if any, for any portion or portions of
the Work damaged by the Casualty up to an amount equal to the then unamortized
portion (the “Unamortized Amount”) of the Tenant Funded Amount, calculated using
mortgage style amortization of the total Tenant Funded Amount over the fifteen
(15) year Term of the Lease at an interest rate of *** percent (***%).  Any
settlement by Landlord of claims to be adjusted shall be in consultation with
Tenant.  The provisions of this Section 13.05 shall expressly survive the
expiration or earlier termination of this Lease.

 

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14.                               INSURANCE; WAIVER OF SUBROGATION.

 

14.01                 Tenant shall, at its sole cost and expense, obtain,
maintain and keep in force throughout the Term, with insurers that are
authorized to do business in the State of Delaware and are rated at least A-
(Class X) in Best’s Key Rating Guide or any successor thereto, insurance for
(a) all of Tenant’s property in the Premises, (b) commercial general liability
insurance with minimum limits of $2,000,000 combined single limit/$2,000,000
aggregate, with per occurrence limits of $1,000,000 for personal injury, or such
commercially reasonable amounts as Landlord may prudently require from time to
time; provided, however, that Landlord shall not have the right to request
greater limits or amounts of insurance more frequently than once every
forty-eight (48) months and (c) worker’s compensation insurance in the amount of
the statutory limit and Employer’s Liability insurance in the amount of $100,000
each accident, $100,000 Constant Dollars each employee for bodily injury by
disease, and $500,000 Constant Dollars policy limit for bodily injury by
disease, which policy shall include a waiver of subrogation in favor of the
Landlord parties in Section 15.01(a).  No “alternative” forms of coverage will
be permitted for workers’ compensation insurance.  Tenant’s commercial general
liability insurance policy shall name the Landlord and the Management Company as
additional insureds during the Term.  At or before the Commencement Date, and
upon any material change in coverage, Tenant shall provide Landlord with
certificates evidencing such insurance coverage and naming Landlord and the
Management Company as additional insureds under such liability policies. 
Tenant’s certificate will provide that, should any of the policies be cancelled
before the expiration date thereof, notice will be delivered in accordance with
the policy provisions.  The above provisions notwithstanding, Tenant shall be
entitled to self insure Tenant’s personal property.

 

14.02                 Whenever Tenant shall undertake any alterations, additions
or improvements to the Premises, the Tenant shall ensure that the aforesaid
insurance coverage extends to and includes liability for injuries to persons and
damage to property arising in connection with such work, including, without
limitation, liability under any applicable laws, statutes or regulations.

 

14.03                 Landlord shall obtain, maintain and keep in force,
throughout the Term, with insurers that are authorized to do business in the
State of Delaware and are rated at least A- (Class X) in Best’s Key Rating Guide
or any successor thereto, the following insurance during the Term of this Lease:

 

(a)                                 Replacement cost insurance including special
form causes of loss (“All Risk”) property insurance covering the Building and
the other insurable improvements in the Premises at the full replacement value
of the Building and such improvements including the Work and all fixtures,
equipment, machinery and apparatus which constitute a permanent part of the
Improvements, subject only to a commercially reasonable deductible.  Such policy
shall also include coverage for debris removal and the enforcement of any legal
requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss.  Such policy
shall include, or be endorsed to include, loss of rental income coverage in an
amount equal to 100% of the Minimum Monthly Rent for not more than a twelve (12)
month period.

 

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(b)                                 Commercial general liability insurance on an
occurrence basis with a combined single limit for bodily injury/property damage
of $2,000,000 in the aggregate, including contractual liability coverages to
insure liability under any contract whereby Landlord will hold harmless the
Tenant pursuant to Landlord’s indemnities under this Lease.  Such policy shall
have no deletion of the Separation of Insured’s Clause or any exclusion for
Cross Liability.

 

(c)                                  If and to the extent Landlord has any
employees for whom it is required by law to carry worker’s compensation
insurance, Worker’s Compensation coverage in the amount of the statutory limit
and Employer’s Liability insurance in the amount of $100,000 each accident,
$100,000 Constant Dollars each employee for bodily injury by disease, and
$500,000 Constant Dollars policy limit for bodily injury by disease, which
policy shall include a waiver of subrogation in favor of the Tenant parties in
Section 15.01(b).  No “alternative” forms of coverage will be permitted for
workers’ compensation insurance.

 

(d)                                 For the period commencing on the date of
this Lease and ending on the date Landlord maintains the insurance required
pursuant to Section 14.03, Landlord shall maintain in effect Special Form,
Completed Value, Non-Reporting Form builder’s risk insurance with respect to the
Building in an amount equal to the initial contract sum of the Work, plus the
value of subsequent contract modifications and cost of materials supplied or
installed by others, comprising the total value of the entire Premises that is
the subject of such construction work, on a replacement cost basis without
optional deductibles.  Such property insurance shall also cover portions of the
work stored off the site and portions of the work in transit.  Such insurance
shall be include at least the interests of Landlord, Tenant, Landlord’s
contractor, subcontractors and sub-subcontractors and include Loss of Use
insurance due to a covered loss, including as separate coverages Loss of Rental
Income, Delay in Startup, and Soft Costs (with a minimum sublimit (as to Soft
Costs) of Five Million Dollars ($5,000,000.00)), and also including Leasehold
Interest Coverage in favor of Tenant subject to a minimum limit of Fifteen
Million Dollars ($15,000,000.00).  The period of indemnity for this Loss of Use
should be, at a minimum, the length of the original construction period of the
Work.  Such policy shall permit partial occupancy as construction progresses.

 

(e)                                  Such other insurance coverage as Landlord
determines to be commercially reasonable.

 

14.04                 Insurance Certificates.  Evidence of the insurance
coverage required to be maintained by Landlord and Tenant during the Term,
represented by certificates of insurance (on an ACORD 27 form or other
equivalent form reasonably acceptable to the parties) must be furnished by each
party to the other prior to delivery of occupancy of the Premises to Tenant, and
no more than thirty (30) days following the renewal or replacement of the
applicable policies.  Evidence of the insurance coverage required to be
maintained by Landlord pursuant to Section 14.03, represented by certificates of
insurance (on an ACORD 27 form or other equivalent form reasonably acceptable to
Tenant) must be furnished by Landlord to Tenant simultaneously with the
execution hereof.  In the event that Landlord fails to deliver the required
evidence of insurance pursuant to this Section 14.04, Tenant shall be entitled
to all rights and remedies under this Lease (including, specifically, the right
to obtain insurance on behalf of Landlord pursuant to Section 20 hereof) and at
law or in equity.

 

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14.05                 Waiver of Subrogation.  To the extent of the insurance
coverage required pursuant to the provisions of this Lease, in this Section 14
or otherwise, each of the parties hereto hereby releases the other and the
other’s principals, employees, contractors and agents from any and all liability
for any injury, loss or damage which may be inflicted upon the person or
property of such releasing party, even if such loss or damage shall be brought
about by the fault or negligence of the other party, its principals, employees,
contractors or agents (“Waiver”).  Each party shall obtain an endorsement to its
insurance policies permitting such Waiver, to the extent any policy does not
itself provide a Waiver, and shall deliver to the other a copy thereof on
issuance and on renewal, and upon specific written request from time to time. 
Such Waiver shall be kept current at all times and shall provide that no
cancellation shall be effective until after ten (10) days’ written notice to the
benefiting party.  The provisions of this Section 14.05 shall survive the
expiration or sooner termination of the Lease.

 

15.                               INDEMNIFICATION.

 

15.01                 (a)Tenant shall protect, defend, indemnify and hold
harmless Landlord from and against any and all losses, claims, liability,
damages or costs (including court costs and attorney’s fees) incurred resulting
from any injury, loss or damage to any person or property (including the person
or property of Tenant) in or about the Premises or the Building arising from
(i) Tenant’s improper use of the Premises, (ii) the improper conduct of Tenant’s
business, (iii) any activity, work or things done, permitted or suffered by
Tenant or its agents, licensees or invitees in or about the Premises or
elsewhere contrary to the requirements of the Lease, (iv) any negligence or
willful act of Tenant or any of Tenant’s agents, contractors, employees or
invitees, except to the extent caused by Landlord or any of Landlord’s agents,
contractors, employees or invitees; (v) any breach of applicable roof warranties
as provided in Section 1.03 hereof; (vi) any and all acts or omissions of any
persons contracted by Tenant pursuant to Sections 11.03 or 17.09 hereof;
(vii) Landlord’s removal of Tenant’s property from the Premises that Tenant was
required to and has failed to remove in accordance with the terms of this Lease
(provided, however, Tenant shall not be obligated to indemnify Landlord for
fines, late charges or other damages in connection with a willful and knowing
disregard by Landlord in complying with a mandatory requirement of law or code
applicable to such property removal); and (viii) any breach or default in the
performance of any obligation of Tenant’s part to be performed under the terms
of this Lease.

 

(b)                                 Landlord shall protect, defend, indemnify
and hold harmless Tenant and its principals, employees, contractors and agents
from and against any and all losses, claims, liability, damages or costs
(including court costs and attorney’s fees) arising from (i) Landlord’s improper
use of the Building or the Land, (ii) the improper conduct of Landlord’s
business, (iii) any activity, work or things done, permitted or suffered by
Landlord in or about the Premises, the Building, the Land, or elsewhere contrary
to the requirements of the Lease, (iv) any negligence or willful act of Landlord
or any of Landlord’s agents, contractors (including, for the avoidance of doubt,
Landlord’s Contractor, as defined in the Work Letter, and subcontractors)
employees or invitees, except to the extent caused by Tenant or any of Tenant’s
agents, contractors, employees or invitees; and (v) any breach or default in the
performance of any obligation of Landlord’s part to be performed under the terms
of this Lease.

 

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15.02                 The provisions of this Section 15, as well as any and all
other indemnifications provided for in this Lease, shall survive the expiration
or sooner termination of the Lease.

 

16.                               COMPLIANCE WITH LAW; ZONING.

 

16.01                 Subject to Section 16.02 below, but without limiting the
generality of Section 4.02 above, with respect to the Premises, Tenant,
throughout the Term and all renewals and extensions thereof shall comply with
all laws, ordinances, notices, requirements, and regulations of any and all
federal, state, county or municipal authorities to the extent required by
Tenant’s method or manner of use as distinguished from general office and
laboratory use.

 

16.02                 Landlord represents and warrants to Tenant that, (a) as of
the Commencement Date, the Premises and the Building will comply with all
applicable restrictions, laws, rules, regulations, codes, and ordinances,
including, without limitation, the Americans With Disabilities Act and all other
local zoning ordinances, use and occupancy ordinances, environmental regulations
and fire codes then in effect (“Laws”); (b) as of the Effective Date, Landlord
has not received any notice of any pending or threatened action against the
Landlord or Building or Land relating to a possible violation of any applicable
Law; (c) the Building and Land is zoned “OR” and that, to the best of Landlord’s
knowledge, based on that certain letter, dated January 15, 2013 from the New
Castle County Department of Land Use to Landlord, Tenant’s Intended Use is
permitted as of right under such zoning classification; and (d) to the best of
Landlord’s knowledge, Tenant’s Intended Use does not violate any private
covenants or agreements, including easements, applicable to the Premises on the
Effective Date.

 

17.                               LANDLORD SERVICES.

 

17.01                 Tenant shall have access to and use of the Premises and
Building in their entirety 24 hours a day, 7 days a week, 365 days a year
(“24/7/365”).  All services to be provided by Landlord under this Lease shall be
provided 24/7/365.  Landlord shall provide a dedicated property manager during
Business Hours, who shall be on call 24/7/365, with direct contact information
for use by Tenant after Business Hours.  At Tenant’s option, upon request to
Landlord, such property manager shall be stationed at and work from an office
on-site at the Premises.

 

17.02                 Landlord shall maintain and operate heating, ventilation
and air conditioning apparatus (“HVAC”) sufficient to maintain a comfortable
temperature in the Premises for general office use and the particular
requirements of Tenant’s Intended Use, and in accordance with the performance
specifications set forth on Exhibit F (the “HVAC Specifications”) and in
accordance with the operational criteria set forth in the Construction
Documents.  Landlord will ensure that the HVAC system(s), including all controls
and related components, are in good operating condition on the Commencement
Date.  Tenant shall have the ability to control the HVAC system(s) to provide
for a comfortable temperature throughout the Premises during the hours that
Tenant requires HVAC use.  Landlord covenants to meet the HVAC Specifications at
all times during the Lease Term.

 

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17.03                 Landlord shall at all times during the Lease term repair,
operate and maintain the Building in a manner consistent with other Class A
office and laboratory buildings in the Wilmington, Delaware area.  Without
limiting the generality of the foregoing, but subject to the limitations set
forth in Section 5, Landlord will provide at its cost, subject to reimbursement
as Operating Expense: (i) janitorial services for the entire Premises,
consistent in time and scope with other Class A office and laboratory buildings
in the Wilmington, Delaware area, and in accordance with the specifications set
forth on Exhibit G attached hereto and made a part hereof or such other
specifications as provided by Tenant; provided, however, that Tenant may, at its
option, elect to contract for janitorial services directly in whole or in part,
in which case, the costs of janitorial services contracted for directly by
Tenant shall not be included in Operating Expenses; (ii) hot and cold water
sufficient for drinking, lavatory, toilet and ordinary cleaning purposes;
(iii) electricity as provided in Section 17.04; (iv) replacement of lighting
tubes, lamp ballasts and bulbs; (v) extermination and pest control when
necessary, reasonably coordinated with Tenant, at Tenant’s election;
(vi) maintenance, repairs and replacements of the roof, structural components of
the Building and all building systems including, without limitation, the
Building HVAC system(s), plumbing, electrical, elevators and other systems and
equipment in the Building; and (vii) maintenance of exterior areas surrounding
the Building in a first class manner consistent with other Class A buildings in
the Wilmington, Delaware area, including monument signage, lighting, snow
removal, lawn care, landscaping, parking lot and sidewalk maintenance, repair
and replacement.

 

17.04                 Landlord will furnish electricity (subject to the
provisions of Section 5.02) for lighting the Premises, operating a data center,
operating machinery and equipment selected from time to time by Tenant for use
in the Premises, including, without limitation, in laboratory, vivarium and
general office space.  The specifications for Tenant’s electric requirements are
set forth in the Basis of Design and Test Fit Documentation and incorporated
into the Construction Documents.

 

17.05                 Landlord shall operate and maintain the freight and
passenger elevators that are located inside the Premises on the Effective Date,
all of which shall at all times comply with industry standards for wait times
and travel times; provided, however, the operation of any of the elevators may
be interrupted or suspended for reasonable periods of time for periodic repairs,
maintenance or replacements; provided further, in all events at least one
(1) passenger elevator must be in normal operation at all times.

 

17.06                 Landlord shall not be responsible or liable for, and,
except as hereinafter provided, Tenant agrees that there shall be no abatement
of rent in the event of any failure, interruption, or suspension in quantity or
quality of, heat, air conditioning, cleaning, electricity, or elevator service,
or any other services, resulting from Tenant’s acts or omissions or causes
beyond Landlord’s reasonable control; provided, however to the extent such
failure, interruption or suspension is caused by Landlord’s act, negligence or
willful misconduct and such failure, interruption or suspension renders the
Premises reasonably unsuitable, as reasonably determined by Landlord’s Architect
in consultation with Tenant, recognizing the particular requirements of Tenant’s
Intended Use, for the conduct of the Intended Use, Rent shall abate if such
suspension or inadequacy is not corrected within 72 hours and shall continue
until the Premises are

 

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reasonably suitable for the Intended Use.  Such abatement shall be Tenant’s sole
remedy for such failure, interruption or suspension; provided, however, in any
and all instances, Landlord covenants to exercise commercially reasonable
efforts to eliminate the cause of interruption and to effect restoration of
service, and, in either event, Landlord shall give Tenant reasonable notice,
when practicable, of the commencement and anticipated duration of such
interruption.

 

17.07                 Landlord represents and warrants that the Building parking
area(s) located on the Leased Land, as depicted on Exhibit A-2, shall at all
times contain the Parking Allotment, as defined in Basic Lease Provision “P.” 
Tenant, its employees and invitees shall comply with the regulations promulgated
by Landlord from time to time relating to parking; provided Landlord gives
Tenant prior written notice of such regulations and an opportunity to implement
the same; and provided, further, that such regulations do not result in
additional, material financial or operational obligations for Tenant.  Landlord
shall not be required to reserve or police the use of the Parking Areas;
provided that Landlord may, at its option, limit access to the Parking Areas, by
mechanical gates or otherwise, to ensure that only authorized users are admitted
to the Parking Areas.  Tenant, its employees and invitees shall not park in any
spaces designated for use by the handicapped, unless legally permitted to do
so.  Tenant, its employees, guests and invitees shall have exclusive use of the
Parking Areas except for incidental use by Landlord, its agents, employees or
contractors.

 

17.08                 Landlord shall reasonably cooperate to provide any such
additional services as Tenant reasonably requests, it being understood that the
actual, out of pocket cost of any such services shall be borne by Tenant as
Operating Expenses.

 

17.09                 Tenant acknowledges that Landlord intends to engage a
company to manage and operate the Building and Premises (the “Management
Company”), which Management Company shall, in all instances, manage and operate
the Building in a first class and cost competitive manner; provided that such
engagement shall not relieve Landlord from its obligations under this Lease. 
The initial Management Company is set forth in Basic Lease Provision M.  The fee
paid to the Management Company may be included in Operating Expenses, subject to
the limitations set forth in Section 5.03 of this Lease.  Tenant shall have the
right to approve any replacement Management Company, which approval shall not be
unreasonably withheld, conditioned or delayed, provided that such Management
Company shall be a reputable, regionally-recognized property manager experienced
in managing suburban office and laboratory properties in the tri-state market,
and Tenant shall have the right, at Tenant’s option, to replace the Management
Company with a Management Company of Tenant’s choosing in the event of a
Landlord default in the provision of services pursuant to Section 17.  In the
event that Tenant replaces the Management Company pursuant to the prior
sentence, Tenant shall have the option to cause Landlord to engage such
replacement manager or for Tenant to directly engage such replacement manager. 
In the event that Tenant directly engages the manager, no further management
fees may be included by Landlord in Operating Expenses.  Any replacement
Management Company must be a reputable, regionally-recognized property manager
experienced in managing suburban office and laboratory properties in the
tri-state market.  Any such Management Company directly contracted by Tenant
shall perform all management services in accordance with the requirements of
this Lease, and Landlord shall not

 

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be responsible for the Management Company’s performance of management
responsibilities under the management contract (including responsibility for
delays in Landlord’s performance wholly attributable to delays by the Management
Company); provided, however, nothing herein shall relieve the Landlord of the
performance of the landlord obligations hereunder.  Landlord shall have the
right to approve any replacement Management Company if Landlord shall be the
contracting party, which approval shall not be unreasonably withheld,
conditioned or delayed.  Tenant must give Landlord sixty (60) days (or such
lesser period of time as may be specified by Tenant if such lesser period of
time does not cause a breach by Landlord under its then existing property
management agreement) prior written notice of such replacement.

 

18.                               LANDLORD’S RIGHT TO ENTER.  Provided same
shall not cause unreasonable interference with Tenant’s business operations,
Tenant will permit Landlord, Landlord’s contractors, agents or employees,
following reasonable prior notice thereto, except in the case of an emergency,
to (a) inspect the Premises during normal Business Hours, (b) enter the Premises
during reasonable times, and to the extent possible, during non-Business Hours,
for making repairs and performing maintenance to the Premises and to the
Building (including without limitation ducts, pipes, wires and building
equipment), or for any other reasonable purpose in connection with the operation
or maintenance thereof, or (c) to exhibit the Premises to prospective purchasers
and lenders and, during the last nine (9) months of the Term, to prospective
tenants (collectively, “Landlord Entry”).  For the purposes of this Section 18,
reasonable prior notice shall be not less than three (3) business days. 
Landlord is not required to give notice to enter the Premises in case of an
emergency; provided, however, that Landlord shall notify Tenant of such
emergency entry as promptly thereafter as possible.  Notwithstanding anything in
this Section 18 to the contrary, Tenant shall have the right to accompany
Landlord, Landlord’s agents, contractors or employees during any Landlord Entry,
and Tenant shall have the right, in Tenant’s reasonable discretion, and as may
be required by applicable law or regulation, to designate certain areas of the
Premises as “secure areas,” which areas shall in no event be entered by
Landlord, Landlord’s agents, contractors or employees without being accompanied
by a Tenant representative.  In the event that Landlord, Landlord’s agents,
contractors or employees require access to any area designated by Tenant as a
“secure area,” Landlord shall provide not less than five (5) business days prior
notice (or such lesser period as is reasonable in the event of emergency) and
Landlord and Tenant shall cooperate to find a mutually agreeable time for Tenant
to accompany Landlord, Landlord’s agents, contractors or employees in such
“secure area.”  Landlord shall not be responsible to Tenant for any loss or
damage resulting from delay in Landlord’s performance by reason of Landlord’s
inability to access, or delay in accessing, such secured areas if and to the
extent Tenant’s requirements for access shall have been responsible for such
inability or delay.

 

19.                               TENANT DEFAULT/LANDLORD’S REMEDIES/SPECIAL
LIMITATION ON LIABILITY.

 

19.01                 (a)                                 It shall be an “Event
of Default” if:

 

(i)                                     Tenant does not pay in full within ten
(10) days of when due any and all installments of Minimum Monthly Rent,
Additional Rent, or any other charge or payment properly due hereunder, and such
default continues for ten (10)

 

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days following written notice from Landlord; provided, however, that such notice
shall not be required in connection with the same monetary default more than two
(2) times in any twelve (12) month period;

 

(ii)                                  Tenant fails to perform or otherwise
breaches any covenant, condition, agreement or obligation herein contained, and,
except with respect to Tenant’s obligations under Sections 3, 12, 14, 23 and 35
hereof, such failure continues for a period of thirty (30) days after written
notice to Tenant thereof, or if such failure is not susceptible to cure within
such thirty (30) day period, then, if Tenant commences cure within such 30-day
period and to the extent Tenant is diligently and continuously prosecuting the
same to completion, such additional time as is reasonably necessary to cure such
failure;

 

(iii)                               Tenant fails to perform or otherwise
breaches any covenant, condition, agreement or obligation in Sections 3, 12, 14,
23 or 35 hereof and such failure continues (i) as to Sections 3, 12, 14 and 35
for a period of five (5) days after written notice to Tenant thereof, and
(ii) as to Section 23, for a period of five (5) business days after written
notice to Tenant thereof; or

 

(iv)                              Tenant files a petition in bankruptcy or for
reorganization or for an arrangement with creditors under any federal or state
act, a bill in equity or other for the appointment of a receiver, trustee,
liquidator, custodian, conservator or similar official for any of Tenant’s
assets; or a petition is filed or any proceeding is commenced against Tenant
under any bankruptcy or insolvency code or laws and such petition or proceeding
is not dismissed within ninety (90) days.

 

(b)                                 Notwithstanding the provisions of Sections
19.01(a)(i), Tenant shall not be entitled to receive written notice regarding
the same monetary default more than two (2) times in any twelve (12) month
period.

 

19.02                 Upon the occurrence of an Event of Default, Landlord shall
have the right, pursuant to appropriate action or proceeding at law, to pursue
the following remedies:

 

(a)                                 Landlord may repossess and enjoy the
Premises, together with all additions, alterations and improvements thereto. 
Upon recovering possession of the Premises, Landlord, at its option, may
terminate this Lease or make such alterations and repairs as may be necessary in
order to relet the Premises or any part or parts thereof.  Such reletting may be
in Landlord’s name or otherwise, to such person or persons, for such term or
terms, at such rent or rents, and upon such other terms and conditions as in
Landlord’s sole discretion may deem advisable.  Upon each such reletting all
rents received by Landlord therefrom shall be applied:

 

(i)                                     first, to the payment of any reasonable
costs and expenses of such reletting, including reasonable brokerage fees,
attorney’s fees and the cost of alterations and repairs; and

 

(ii)                                  second, to the payment of Rent due and
unpaid hereunder.

 

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The residue, if any, shall be held by Landlord and applied in payment of future
Rent as it may become due and payable hereunder.  If the rent received from such
reletting during any month shall be less than the Rent to be paid during that
month by Tenant hereunder, Tenant shall pay the deficiency to Landlord upon
notice and without further demand.  Landlord shall use commercially reasonable
efforts to re-let the Premises to mitigate Landlord’s damages.  In the event and
so long as this Lease shall not have been terminated after an Event of Default,
the rent and all other charges payable under this Lease shall be reduced by the
net proceeds of any reletting by Landlord (after deducting all costs incident
thereto as above set forth) and by any portion of the any accelerated Rent paid
by Tenant to Landlord.

 

(b)                                 Landlord may terminate this Lease without
any right on the part of Tenant to cure any breach or forfeiture by subsequent
payment of any sum due or performance of any other condition, term or covenant
breached.

 

(c)                                  If the Event of Default creates an event of
default under any financing of Landlord such that Landlord’s lender may
accelerate the payment of such financing, Landlord may accelerate all unpaid
Rent due for the unexpired Term of the Lease.

 

(d)                                 If the Event of Default occurs prior to
Substantial Completion of the Premises, provided Landlord does not act to
terminate the Lease, Tenant shall pay Landlord, as liquidated damages and not as
a penalty, an amount equal to the then net present value of the Rent due for the
Term of the Lease, as determined by Landlord; provided, however, if the Lease is
later terminated for any reason, Tenant shall be immediately reimbursed any and
all Rent allocable to the period on and after such termination that has been
prepaid by Tenant pursuant to this Section 19.02(d).

 

Anything in this Section 19.02 to the contrary notwithstanding, Landlord shall
not be entitled to recover possession of the Premises or terminate the Lease
until Tenant shall have received a second written notice at least thirty (30)
days prior to the date Landlord intends to recover possession of the Premises or
terminate the Lease, which second written notice shall set forth the nature of
the Event of Default and specify, in bold, conspicuous print that Landlord
intends to recover possession of the Premises pursuant to this provision,
re-enter the Premises, remove all persons and all or any property therefrom
and/or terminate the Lease.

 

19.03                 The receipt of all or a portion of any rent by Landlord,
from Tenant or any assignee or subtenant of Tenant, which is then, or thereafter
may become, payable hereunder, shall not operate as a waiver of the right of
Landlord subsequently to enforce the payment of Rent or any other obligations
under this Lease, by such remedies as may be appropriate.

 

19.04                 Any mention in this Section 19 of the Rent herein reserved
after the termination of this Lease, or Tenant’s possession by re-entry, summary
dispossession proceedings or any other method if and as herein provided, shall
be deemed to refer to the Minimum Monthly Rent, Additional Rent, and such
additional sums as Tenant shall be obligated to pay to Landlord under any of the
terms, covenants and conditions of this Lease, whether or not designated or
indicated herein to be payable as Rent.

 

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19.05                 Subject to the provisions of Section 18, in the event of
any breach of this Lease by Tenant, Landlord, following reasonable prior notice
to Tenant (except in the case of an emergency), may enter the Premises and cure
such breach for the account and at the expense of Tenant.  If Landlord elects to
cure such breach or is forced to incur any expenses arising out of such breach
by Tenant (including, without limitation, reasonable attorney’s fees and
disbursements in connection with the enforcement of Landlord’s rights under this
Lease or otherwise), the sum or sums so paid by Landlord shall be reimbursed by
Tenant to Landlord within thirty (30) days of receipt of an invoice therefor,
together with interest at the rate of the then prevailing prime rate of interest
as determined by Bank of America (or its successor) plus *** percent (***%) (the
“Default Rate”).

 

19.06                 Landlord shall have such other rights and remedies as are
applicable at law or in equity.  All remedies available to Landlord shall be
cumulative and concurrent.  The bringing of any such action for Minimum Monthly
Rent, Additional Rent, charges or damages for the breach of covenant or
condition, nor the resort to any other remedy or right for the recovery thereof,
shall not be construed as a waiver or release of the right to insist upon
forfeiture and to obtain possession.

 

20.                               LANDLORD DEFAULT/TENANT’S REMEDIES/LIMITATION
ON LIABILITY.

 

20.01                 Upon the occurrence of a breach or default by Landlord
under this Lease, Tenant shall be entitled, if such breach or default shall
remain uncured for greater than thirty (30) days after notice to Landlord and
Landlord’s lender, or such longer period as is reasonably necessary to cure the
same using commercially reasonable efforts, to (a) bring suit for the collection
of any amounts for which Landlord may be in default, or for the performance of
any covenant or agreement required to be performed by Landlord hereunder; and/or
(b) cure any such breach or default on behalf of Landlord (including, for the
avoidance of doubt, by completing the Work after a failure of Landlord to
achieve any Construction Milestone or failure of Landlord to achieve Substantial
Completion by the Outside Date), in which case Landlord shall pay Tenant for all
the damages suffered by Tenant and for all the documented, reasonable, actual
out-of-pocket costs and expenses incurred by Tenant in curing such default
within thirty (30) days of written notice to Landlord of such amount, and if
Landlord fails to pay and/or reimburse Tenant in full within such thirty (30)
day period, then Tenant shall have the right, as Tenant’s exclusive remedy, if
and to the extent the remedy of offset is elected by Tenant, and with respect to
such out of pocket expenses incurred and for which Tenant actually recovers from
Landlord by way of rental offset, to deduct all such amounts, together with
interest at the Default Rate for the period following the date payment was due,
from the next monthly installment or installments, if necessary, of Minimum Rent
until such amount is set off in full, and Landlord will have no claim against
Tenant for unpaid Minimum Rent resulting therefrom; provided, however, after
Substantial Completion of the Premises, the amount Tenant may deduct from any
individual monthly installment of Minimum Rent shall be limited to an amount
equal to *** of such monthly installment.

 

(a)                                 Notwithstanding anything to the contrary
contained in this Lease, in the event of an emergency presenting an imminent
threat of harm or damage to persons or property (including, without limitation,
a lapse in insurance coverage by Landlord or the failure to timely

 

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deliver evidence thereof as required pursuant to Section 14) as to which prior
notice to Landlord, and its period of cure, under Section 20.01 would be
reasonably likely to present an imminent threat of harm or damage to persons or
property, Tenant shall have the immediate right, following notice, which notice
may be given telephonically or by electronic mail, to Landlord and Landlord’s
lender, to make a repair or replacement or cure any such breach or default by
Landlord prior to the expiration of the applicable notice and cure period if
necessary to protect the Premises from imminent material damage or to prevent
imminent, material injury or damage to persons or property, and Landlord shall
pay to Tenant all documented, reasonable, actual out-of-pocket amounts expended
by Tenant to cure such default within thirty (30) days of written notice to
Landlord of such amount, and if Landlord fails to pay and/or reimburse Tenant in
full within such thirty (30) day period, then Tenant shall have the right, as
Tenant’s exclusive remedy, if and to the extent the remedy of offset is elected
by Tenant, and with respect to such out of pocket expenses incurred and for
which Tenant actually recovers from Landlord by way of rental offset, to deduct
all such amounts, together with interest at the Default Rate, from the next
monthly installment or installments, if necessary, of Minimum Rent until such
amount is set off in full, and Landlord will have no claim against Tenant for
unpaid Minimum Rent resulting therefrom to the extent of the offset amount;
provided, however, after Substantial Completion of the Premises, the amount
Tenant may deduct from any individual monthly installment of Minimum Rent shall
be limited to an amount equal to *** of such monthly installment.

 

(b)                                 Nothing in this Section 20 shall be deemed
to relieve Landlord of any its obligations under this Lease.

 

(c)                                  In addition to the remedies set forth in
this Section 20, Tenant shall have all rights and remedies otherwise available
under this Lease, at law or in equity.  Notwithstanding any provision of this
Article 20 to the contrary, in the event of a termination of this Lease as a
result of a default by Landlord, Landlord shall pay to Tenant, within thirty
(30) days of such termination, an amount equal to the Unamortized Amount.

 

20.02                 *** under this Lease shall be *** to *** in the *** and
the *** and any***, including, *** therein, and *** in ***, ***, and *** to
***.  *** shall *** the *** under the ***.

 

21.                               SUBORDINATION AND NON-DISTURBANCE.

 

21.01                 As a condition to the subordination of this Lease to any
future mortgage or ground lease, Landlord shall obtain from each holder thereof,
for the benefit of Tenant, and binding such holder, any successor thereof, and
any purchaser in foreclosure, a subordination, non-disturbance and attornment
agreement (“SNDA”) in substantially the same form as the SNDA attached hereto as
Exhibit L (the “M&T SNDA”) or otherwise acceptable to Tenant in both form and
substance, which shall be recorded in the appropriate property records at
Landlord’s sole cost.

 

21.02                 Notwithstanding the foregoing, the holder of any mortgage
may at any time subordinate its mortgage to this Lease, without Tenant’s
consent, by notice in writing to Tenant.  Thereupon this Lease shall be deemed
prior to such mortgage without regard to their respective

 

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dates of execution and delivery, and such mortgagee shall have the same rights
with respect to this Lease as though this Lease had been executed prior to the
execution and delivery of the mortgage and assigned to such mortgagee.

 

21.03                 The word “mortgage” is used herein to include any lien,
ground rent (if Landlord’s interest is or becomes a leasehold estate) or
encumbrance on the Premises and/or the Building, or any part of, interest in, or
appurtenance to any of the foregoing.  The word “mortgagee” is used herein to
include the holder of any mortgage, ground lease or encumbrance, including any
representative or servicing agent of any such mortgagee.

 

21.04                 As a condition of Tenant’s obligations under this Lease,
Landlord shall have, simultaneously with the Loan Closing, delivered to Tenant
the fully executed M&T SNDA from M&T Bank, Landlord’s lender for the Work, in
the form attached hereto as Exhibit L.

 

22.                               CONDEMNATION.

 

If, during the Term or any renewal or extension thereof, all or substantially
all of the Building is taken or condemned for a public or quasi- public use,
this Lease shall terminate as of the date when possession is taken by the
condemner.  If, during the Term or any renewal or extension thereof, a portion
of the Building is taken such that access to the Premises from the adjacent
right of way is materially impaired and reasonable alternate access is not
provided by Landlord within one hundred eighty (180) days or the parking shall
be diminished by twenty-five percent (25%) and alternative parking acceptable to
Tenant is not provided within one hundred eighty (180) days, Tenant may
terminate this Lease in its entirety by providing written notice to Landlord
within thirty (30) days following the taking and this Lease shall terminate as
of the date when possession is surrendered to the condemnor.  In the event of a
taking as provided in either of the foregoing two sentences, and if this Lease
is so terminated, the Rent reserved hereunder shall abate and cease
proportionately for the balance of the Term.  If, during the Term or any renewal
or extension thereof, less than all or substantially all of the Building, is
taken or condemned for a public or quasi- public use, but Tenant shall determine
in its reasonable judgment that it is economically infeasible to operate or
conduct business in the uncondemned portion of the Premises, Tenant may
terminate this Lease in its entirety by providing written notice to Landlord,
and this Lease shall terminate as of the date when possession is surrendered to
the condemnor, and the Rent reserved hereunder shall abate and cease
proportionately for the balance of the Term.  If Tenant does not elect to
terminate this Lease upon such taking or condemnation, this Lease shall
terminate only as to the part of the Premises taken or condemned, as of the date
when possession is surrendered to the condemnor, and the Rent reserved hereunder
shall abate in proportion to the square feet of the Premises taken or
condemned.  In the event of any taking which results in the termination of this
Lease or in Tenant being deprived of the use of the Premises in whole or in
part, the parties shall cooperate fully with one another in the pursuit and
settlement of just compensation from the condemnor.  Landlord shall be obligated
to reimburse to Tenant, on a pari passu basis, any proceeds received by Landlord
in connection with such condemnation, up to an amount equal to the Unamortized
Amount.  Subject to the prior sentence, Tenant assigns to Landlord all rights to
all awards for any such taking, except that Tenant shall retain any independent
claims for damages that can be separately brought against the condemnor for loss
of leasehold, business and dislocation and moving and relocation

 

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expenses.  Any settlement by Landlord with the condemning authority with respect
to such taking proceeds shall be in consultation with, but not subject to the
approval of, Tenant.  The provisions of this Section 22 shall expressly survive
the expiration or earlier termination of this Lease.

 

23.                               CERTIFICATES.

 

23.01                 Tenant and Landlord each agree, from time to time, but no
more than twice every calendar year, within fifteen (15) business days after
receipt of a written request from the other party, to execute, acknowledge and
deliver to the requesting party a written instrument stating and certifying
(a) that this Lease is unmodified and in full force and effect; (b) the date to
which Minimum Monthly Rent, Additional Rent and other charges have been paid in
advance, if any; (c) the amount of any prepaid Rent or credits due Tenant, if
any; (d) the Commencement Date and the Expiration Date; (e) whether, to the best
knowledge of the certifying party, the other party is in default in the
performance of any covenant, agreement or condition of this Lease and, if so,
the nature and substance of the default; and (f) such other factual information
concerning this Lease as may be reasonably requested.

 

23.02                 It is intended that any such statement delivered pursuant
to this Section 23 may be relied upon by the party to which it is addressed and
any (a) prospective purchaser of the Premises identified to Tenant by Landlord
in the request therefor or its mortgagee identified to Tenant by Landlord in the
request therefor, (b) assignee of (i) Landlord’s interest in this Lease
identified to Tenant by Landlord in the request therefor, or (ii) the current or
future holder of a mortgage upon the fee of the Premises or the Building
identified to Tenant by Landlord in the request therefor, or any part thereof.

 

23.03                 If Landlord or Tenant fails, within the fifteen (15)
business day period set forth in Section 23.01 to deliver the certificate, the
requesting party shall send a second request to the other party stating therein
that the responding party’s failure to deliver the requested statement within
five (5) business days following the date of the second request shall constitute
a default of the responding party’s obligations under this Lease.

 

24.                               NOTICES.  All notices (“Notice”) required or
permitted hereunder must be in writing and hand delivered or sent by certified
mail, return receipt requested, postage prepaid, or by overnight mail service,
with receipt postage prepaid, furnishing a written record of attempted or actual
delivery.  Notice shall be deemed to be delivered when tendered for delivery to
the addressee at its address set forth below, or at such other address as last
specified by written notice delivered in accordance with this Section 24. 
Notices shall be addressed to the parties as follows:

 

(a)                                 If to the Tenant, at the Tenant Notice
Address(es); and

 

(b)                                 If to the Landlord, at the Landlord Notice
Address(es)

 

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If requested by Landlord in writing, Tenant shall send to any mortgagee
designated by Landlord a copy of notices to Landlord.  Either party may at any
time, by notice given as aforesaid, change the address to which notices shall be
sent.

 

25.                               BROKERS.

 

25.01                 Landlord and Tenant each warrant and represent to the
other that they have not dealt with any real estate brokers or agents in
connection with this Lease except Tenant’s Broker, and no brokerage fees or
other commissions are due to any other parties in connection therewith. 
Landlord agrees to pay Tenant’s Broker its commission in accordance with
separate agreement(s) between Landlord and Tenant’s Broker, and Landlord
indemnifies and holds Tenant harmless from any costs, expenses, liabilities or
claims (including the costs of suit and reasonable attorneys’ fees) of Tenant’s
Broker for same.  Tenant shall indemnify and hold Landlord harmless from any
cost, expense or liability (including costs of suit and reasonable attorneys’
fees) incurred in connection with any compensation, commission or fee claimed by
any other real estate broker, finder, attorney, or agent, other than Tenant’s
Broker, claiming through or under Tenant, in connection with this Lease.  The
provisions of this Section 25.01 shall survive the expiration or sooner
termination of this Lease.

 

25.02                 In the event Landlord has not paid Tenant’s Broker the
commission due to it in accordance with Section 25.01 within thirty (30) days of
when such payment is due, Tenant shall have the right to offset against the next
monthly installment, or installments, if necessary, of Rent, the unpaid or
unfunded amount, together with interest at the Default Rate, until such amount
is set off in full.  Tenant will then be responsible to pay the broker the
amount set off, and Landlord shall indemnify and hold Tenant harmless for any
such offset pursuant to this Section 25.02 and Landlord will have no claim
against Tenant for unpaid rent to the extent such has been used to fund the cost
of the brokerage commission.

 

26.                               DEFINITION OF “LANDLORD”.  The word “Landlord”
is used herein to include the person(s) named above as Landlord, any subsequent
owner of such Landlord’s interest in the Building, as well as their respective
heirs, personal representatives, successors and assigns, each of whom shall have
the same obligations and liabilities, and have such rights, remedies, powers,
authorities and privileges as it would have possessed, had it originally signed
this Lease as Landlord.

 

27.                               DEFINITION OF “TENANT”.  Subject to any
release of any Tenant pursuant to Section 7, the word “Tenant” is used herein to
include the person(s) named above as Tenant, as well as its successors and
assigns, each of whom shall be under the same obligations and liabilities, and
have such rights, privileges and powers as it would have possessed, had it
originally signed this Lease as Tenant.

 

28.                               QUIET ENJOYMENT.  Subject to the terms and
conditions of this Lease, Tenant shall quietly have and enjoy the Premises
during the Term without hindrance or molestation by anyone claiming rights of
use or possession by or through Landlord.

 

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29.                               TITLES FOR CONVENIENCE ONLY.  The titles
appearing in connection with various sections of this Lease are for convenience
only.  They are not intended to indicate all of the subject matter in the text,
and they are not to be used in interpreting this Lease.

 

30.                               SEVERABILITY.  If all or a portion of any
provision of this Lease, or the application thereof to any person or
circumstance, shall be held invalid or unenforceable to any extent, the
remainder of this Lease, and the application of those provisions to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and be enforced to the fullest extent permitted by law.

 

31.                               GOVERNING LAW.  The law of the State of
Delaware, without reference to its conflicts of laws principles, shall govern
the interpretation and enforcement of this Lease.  Each of the parties hereto
hereby irrevocably and unconditionally agrees (a) to be subject to the exclusive
jurisdiction of the courts of the State of Delaware and of the federal courts
sitting in the State of Delaware, and (b) (1) to the extent such party is not
otherwise subject to service of process in the State of Delaware, to appoint and
maintain an agent in the State of Delaware as such party’s agent for acceptance
of legal process, and (2) that service of process may also be made on such party
by prepaid certified mail with a proof of mailing receipt validated by the
United States Postal Service constituting evidence of valid service, and that
service made pursuant to (b) (1) or (2) above shall have the same legal force
and effect as if served upon such party personally within the State of Delaware.

 

32.                               HOLDING OVER.  If Tenant remains in possession
of all or any part of the Premises after the expiration or sooner termination of
this Lease without Landlord’s written consent, Tenant shall become a
tenant-at-sufferance and there shall be no renewal of this Lease by operation of
law.  During the period of any such holdover, all provisions of this Lease shall
be and remain in effect except that (i) the Minimum Monthly Rent payable
hereunder shall be as follows:  Day 1 to Day 30, the then-current Minimum
Monthly Rent; *** Acceptance by Landlord of any sums due pursuant to the
provisions of this Section 32 shall not be construed as Landlord’s consent to
Tenant’s holdover.

 

33.                               ENTIRE AGREEMENT.  This Lease and the Exhibits
which are attached hereto are hereby made a part hereof and set forth all the
promises, agreements and conditions between Landlord and Tenant relative to the
Premises and this leasehold.  No rights, easements or licenses are acquired in
the Building, or any land adjacent to the Building by Tenant, by implication or
otherwise, except as expressly set forth in the provisions of this Lease and the
Exhibits attached hereto; provided, however, that each party hereto shall
cooperate in good faith and grant such easements or rights to the other party as
may be reasonably required for the use and enjoyment of such party’s respective
interest in the Land.  No subsequent alteration, amendment, understanding or
addition to this Lease shall be binding upon Landlord or Tenant unless reduced
to writing and signed by both parties.

 

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34.                               AUTHORITY.

 

34.01                 Landlord and Tenant each represent and warrant that (a) it
has complied with all applicable laws, rules and governmental regulations
relative to its right to do business in the state and (b) all persons signing on
behalf of the Tenant and Landlord, as applicable, were authorized to do so by
appropriate corporate, partnership, trust or other actions.

 

34.02                 Each party agrees to furnish promptly upon request
appropriate documentation evidencing the due authorization of such party to
enter into this Lease.

 

35.                               RECORDATION; CONDITION OF TITLE.  On the
Effective Date, Landlord shall execute and Tenant shall have the right to
record, in the land records where the Building is located, a short form or
memorandum of this Lease, in substantially the form as Exhibit K, attached
hereto and made a part hereof.  Any other recordation of this Lease, or of any
memorandum or record thereof, shall be an automatic Event of Default without
notice or cure period.

 

36.                               CAPITALIZED TERMS NOT DEFINED HEREIN. 
Capitalized terms not otherwise defined herein shall have the meaning set forth
on the Basic Lease Provisions pages attached hereto and made part hereof.

 

37.                               INTENTIONALLY OMITTED.

 

38.                               EXPANSION.  Provided no Events of Default are
uncured and continuing after applicable notice and cure periods and that Tenant
satisfies the Financial Condition at the time of its election hereunder, Tenant
shall have the right to cause Landlord to expand the Building, add additional
building(s) to the Leased Land and/or add parking spaces to the Premises. 
Landlord hereby agrees to not develop the Land in any manner that would prevent
or materially limit Tenant’s ability to expand the Building or build additional
buildings or improvements on the Leased Land.  At Tenant’s request, Landlord
shall cooperate in good faith with Tenant to accommodate any expansion needs
that Tenant may have and to develop plans to expand the Building, add additional
building(s) to the Leased Land and/or add parking spaces to the Premises,
provided that the parties can reasonably agree upon terms for expansion
including a reasonable lease constant to provide a return to Landlord on its
additional investment.  Any agreement with respect to expansion space shall be
on economic terms that are materially consistent with this Lease, with
adjustments, as necessary, to take into account, among other things: (a) changes
in the lending environment, (b) prevailing interest rates, (c) changes in
Tenant’s creditworthiness, (d) the nature of the new space as compared to the
nature of the space pursuant to the original Lease (e.g. portion of the Premises
designated as office space and lab space), and (e) the relative cost of the
construction of such expansion space.  All of the foregoing shall be at Tenant’s
cost and expense and at no cost or expense to Landlord.  Any right of expansion
is personal to Tenant and its permitted assignees and cannot be assigned to any
other person notwithstanding any assignment of this Lease.

 

39.                               RIGHT OF FIRST REFUSAL.  If, at any time
during the Term, Landlord shall receive a bona fide offer for (a) the lease of
the Land (and/or any improvements thereon) other than the

 

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Leased Land, or for (b) the purchase of the Premises, Land (and/or any
improvements thereon), Leased Land, and/or Building, which offer Landlord shall
desire to accept, Landlord shall promptly convey to Tenant the terms of such
offer, and Tenant shall have an irrevocable, ongoing right of first refusal and
may, within thirty (30) days thereafter (the “Refusal Period”) elect to lease or
purchase, as the case may be, the applicable property from Landlord on
materially the same terms as those set forth in such offer.  In the event of a
failure of Tenant to timely exercise the right of first refusal, or in the event
Tenant’s elects not to exercise the right of first refusal, Landlord shall not
be precluded from entering into the originally offered transaction on the terms
previously provided to Tenant pursuant to this Section 39, but if for any reason
the terms of such proposed transaction change, or such transaction is not
consummated within one hundred and eighty (180) days after the expiration of the
Refusal Period, then Landlord shall not be entitled to enter into a transaction
to lease the Land (and/or any improvements thereon) or sell the Premises, Land
(and/or any improvements thereon), Leased Land, and/or Building without again
offering to sell or lease such property to Tenant in the same manner as provided
above.  Any purchaser of the Land or Premises shall purchase such property
subject to this Lease.  Any right of first refusal is personal to Tenant and its
permitted assignees and cannot be assigned to any other person notwithstanding
any assignment of this Lease.

 

40.                               TERMINATION RIGHT.  Tenant shall have the
right to terminate this Lease effective as of the tenth (10th) anniversary of
the Rent Commencement Date, upon twelve (12) months prior written notice to
Landlord (the “Termination Notice”).  Tenant’s right to terminate is contingent
upon Tenant delivering to Landlord, on the effective date set forth in the
Termination Notice, a payment in the amount equal to *** percent (***%) of the
net present value (calculated using a discount rate of *** percent (***%)) of
the Minimum Rent over the remaining Term (the “Termination Payment”) and Tenant
shall surrender the Premises in the condition required under this Lease at the
expiration or sooner termination of the Lease; provided, however, that Tenant,
as a condition of such termination, shall cure any then-existing, uncured Events
of Default or default by Tenant that with notice or the passage of time, or
both, would become Events of Default.  Any right to provide a Termination Notice
is personal to Tenant and its permitted assignees and cannot be assigned to any
other person notwithstanding any assignment of this Lease.

 

41.                               SIGNAGE.  Prior to the Commencement Date,
subject to Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed, Tenant may install signage
bearing Tenant’s name on the exterior of the Building and on any outside
monument or directional signage.  Anything to the contrary contained herein
notwithstanding, Landlord shall be deemed to have approved any signage approved
by any municipal authority and Landlord shall cooperate with Tenant in obtaining
approvals for such façade signage, at Tenant’s expense.  Tenant shall have
exclusive naming rights for the Building.

 

42.                               INCENTIVES.  Landlord acknowledges that Tenant
has been in discussions with the State of Delaware regarding possible incentives
or grants that may be available to Landlord or Tenant in connection with this
Lease and/or the development and construction of the Building and Premises. 
Landlord agrees to cooperate with Tenant, at no cost to Landlord, to enable
Tenant to realize the maximum benefits that may be available in connection with
such incentives

 

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or grants.  Landlord shall provide Tenant, if no cost to Landlord, with such
non-confidential and non-proprietary information or documentation as Tenant
reasonably requests and participate in applications for such incentives or
grants at Tenant’s reasonable request.

 

43.                               WAIVER OF TRIAL BY JURY; EXPENSES.  Landlord
and Tenant hereby waive trial by jury in any action, proceeding or counterclaim
brought by either party against the other in connection with any matters in any
way arising out of or connected with this Lease.  In any action in connection
with a breach of this Lease or to enforce the terms of this Lease, the
prevailing party shall be entitled to recover from the non-prevailing party any
and all costs and expenses incurred with respect to such action or proceeding,
including without limitation, reasonable attorneys’ fees, disbursements and
costs, and experts’ fees and costs.

 

44.                               FINANCIAL STATEMENTS.  In the event that
neither Tenant nor its parent company is a publicly-traded entity, Tenant shall,
within thirty (30) days of receipt of a written request from Landlord, provide
Landlord with Tenant’s most recent financial statements; provided, however,
Tenant shall not be obligated to deliver such information more than three
(3) times in any calendar year and provided, further, that nothing herein shall
be deemed to require Tenant to have such financial statements audited, unless
Tenant determines to do so in its sole discretion.  Without limiting the
generality of any other provision hereof, subject to such confidentiality and
nondisclosure agreements in a form substantially the same as that certain
Confidentiality Agreement, dated as of December 14, 2012 (the “Initial
Confidentiality Agreement”), by and between Landlord and Tenant or otherwise
reasonably acceptable to Tenant, provided that for purposes of this Section 44,
any limitation on permitted recipients included in such Initial Confidentiality
Agreement shall be deemed to include, and Landlord may furnish copies of such
financial statements to, Landlord’s consultants, advisors, lenders and potential
lenders, investors or potential investors and purchasers or potential
purchasers.

 

45.                               COUNTERPARTS.  This Lease may be executed in
one or more counterparts, which counterparts, when taken together, shall
constitute a single instrument for purposes of the effectiveness of this Lease.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease on the day and
year first above written.

 

 

TENANT:

 

 

 

INCYTE CORPORATION

 

 

 

By:

/s/ David Hastings

 

Name:

David Hastings

 

Title:

Executive Vice President & CFO

 

 

 

 

 

LANDLORD:

 

 

 

AUGUSTINE LAND I, L.P.

 

 

 

Mardi Gras Associates, Inc., its General Partner

 

 

 

 

 

By:

/s/ Louis J. Capano, Jr.

 

Name:

Louis J. Capano, Jr.

 

Title:

President

 

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EXHIBIT A-1

 

LEGAL DESCRIPTION OF THE LAND

 

ALL that certain lot or piece of ground situated on the northerly side of
Augustine Cut-Off, being partially in Brandywine Hundred, County of New Castle
and partially in the City of Wilmington, State of Delaware, being shown on a
ALTA/ACSM Land Title Survey for Augustine Land I, L.P. by Karins and Associates,
dated April 20, 2009, as follows, to wit:

 

BEGINNING at a set drill hole in stone on the northwesterly side of Augustine
Cut-Off Road (100 feet wide), said point being a corner in common for herein
described parcel with land now or formerly of Matthew & Ute Page (Tax Parcel
No. 06-136.00-119); thence, from said point of beginning the following two
(2) described courses and distances on said northwesterly side of Augustine
Cut-Off Road; 1) South 21° - 45’ - 41” West, 351.20 feet to a set concrete
monument and 2) Southwesterly, along a 1,860.08 feet radius curve to the right,
said curve having a chord bearing of South 44° - 44’ - 55” West and a chord
distance of 1,452.81 feet, an arc distance of 1,492.52 feet to a set drill hole
in the sidewalk, a corner in common with lands now or formerly of Berman
Delaware Properties, LLC (Tax Parcel No. 06-136.00-126); thence, leaving said
northwesterly side of Augustine Cut-Off Road on lines in common with said lands
now or formerly of Berman Delaware Properties, LLC, North 01° - 54’ - 40” West,
219.99 feet to a set capped rebar; thence North 22° - 35’ -18” West, 181.00 feet
to a set capped rebar to another corner in common with said lands now or
formerly of Berman Delaware Properties, LLC; thence, on a line in common with
lands now or formerly of Berman Delaware Properties, LLC, in part, and lands now
or formerly of Wilmington friends School, Inc. (Tax Parcel No. 06-136.00-028),
in part, North 41° -12’- 48” East, 363.92 feet to a found iron pipe; thence
North 41° - 07’ - 44” East, 1,167.81 feet to a corner in common with said lands
now or formerly of Matthew & Ute Page; thence, on a line in common with lands
now or formerly of Matthew & Ute Page, South 50° - 34’ -53” East, (passing over
a set capped rebar at 15.00 feet) 287.28 feet to the point and place of
beginning.

 

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EXHIBIT A-2

 

DEPICTION OF LAND AND LEASED LAND

 

[SEE ATTACHED]

 

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[g263273la15i001.jpg]

 

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EXHIBIT B-1

 

WORK LETTER

 

[SEE ATTACHED]

 

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EXHIBIT B-l

 

WORK LETTER

 

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

 

1.                                      Incorporation of Lease; Schedule;
Representatives.

 

(a)                                 Lease; Defined Terms. The Lease is hereby
incorporated by reference to the extent that the provisions of this Work Letter
apply thereto. Without limiting the foregoing, any notice or other communication
given or required to be given in connection with the matters covered by this
Work Letter shall be in writing and shall be given in the manner notice is
required to be given under the Lease, except if and as otherwise provided
herein. Terms not otherwise defined in this Work Letter shall have the meanings
given to them in the Lease. This exhibit shall constitute the “Work Letter”
referred to in the Lease. For the avoidance of doubt, nothing in this Work
Letter shall be deemed to require either party to pay for any costs or expenses
associated with the Work except as specifically provided herein or in the Lease.
In the event of any conflict or inconsistency between the Lease and this Work
Letter, the Lease shall govern and control.

 

(b)                                 Schedule; Representatives; Project
Architect.

 

(i)                                        Schedule. Prior to June 15, 2013,
Landlord and Tenant shall develop and prepare a comprehensive, integrated and
coordinated project schedule (the “Schedule”), incorporating the dates and
timeframes set forth in the Lease, the other specific dates and timeframes
expressly set forth in this Work Letter, and further addressing and setting
forth specific dates for the timeline and sequencing of the tasks to be
accomplished by Landlord and Tenant with respect to the design, planning,
coordination, construction and completion of the Work; provided that the
Schedule shall be consistent with the Lease and shall not change the Outside
Delivery Date (as such term is defined in the Lease). The Schedule will include,
but not be limited to, such matters as the projected timeline for design,
construction phasing, site logistics, preparation, delivery, filing and review
of, and responses to, the Construction Documents, commencement and substantial
and final completion dates of construction for the Work (including, but not
limited to, the Construction Milestones (as defined below) and the Outside
Delivery Date (as defined in the Lease)), access for the delivery, storage,
furnishing and installation of Tenant’s furniture, fixtures and equipment, and
receipt of all permits and approvals (including, but not limited to, temporary
and permanent certificates of occupancy). Landlord shall provide to Tenant
written progress reports on or about the beginning of each calendar month, or
more frequently as Tenant may from time to time reasonably request (which
reports shall track actual progress against the Schedule), and inform Tenant of
the progress of the Work.

 

(ii)                                     Representatives. The following persons
(or such other person as Landlord or Tenant, as the case may be, may designate
from time to time in writing to the other)

 

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are hereby identified as the representatives of their respective parties (with
respect to the Landlord, the “Landlord’s Construction Representative,” and, with
respect to Tenant, the “Tenant’s Construction Representative”), In no event
shall Landlord or Tenant, as applicable, designate more than one person at any
time to act as Landlord’s Construction Representative or Tenant’s Construction
Representative, as applicable, hereunder. Landlord and Tenant (and Landlord’s
Construction Representative and Tenant’s Construction Representative, as the
case may be) may rely on all instructions, consents, agreements, changes and
modifications made by Landlord’s Construction Representative (as to Landlord)
and Tenant’s Construction Representative (as to Tenant) as having been made by,
and binding upon, Landlord and Tenant, as the case may be, and no instruction,
consent, agreement, change, modification or communication made or given (or
purportedly made or given) by or on behalf of Landlord or Tenant, as the case
may be, with respect to the Work shall be valid, enforceable or binding on
Landlord or Tenant, as the case may be, unless the same shall have been made or
given by Landlord’s Construction Representative (as to Landlord) or the Tenant’s
Construction Representative (as to Tenant), or by an executive officer or other
senior management executive of Landlord or of Tenant. Each party agrees to make
its designated representative (or a substitute representative with comparable
authority) available on a timely basis, for communications and consultation with
the other party, its contractors and representatives.

 

On behalf of the Landlord:

Name:

Phone:

E-mail:

 

On behalf of the Tenant:

Name:

Phone:

E-mail:

 

(iii)                                  Project Architect. Landlord or Landlord’s
Contractor (as hereinafter defined) has engaged or will engage L2Partridge LLC
(“Architect”), with an address at 1717 Arch Street, Suite 4101, Philadelphia,
Pennsylvania 19103, to provide design services to Landlord with respect to the
Work. Landlord acknowledges and agrees that:

 

(1)                                 Landlord or Landlord’s Contractor, as
applicable, shall be responsible for ensuring the performance of the Architect.
Tenant shall not be responsible for ensuring the performance of the Architect or
for Landlord’s or Landlord’s Contractor’s obligations to Architect; and

 

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

 

Either Landlord or Tenant may hereafter engage any architect or other design
professional (“Other Professional(s)”) having qualifications reasonably suitable
to the applicable engagement, and who is not objectionable to the other party in
the exercise of its good faith and

 

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reasonable judgment, to provide services in addition to those of the Architect
hereunder, on behalf of the engaging party. Neither party shall be responsible
for any obligations to such Other Professional engaged by the other party. The
party engaging such Other Professional(s) shall have the right to have the work
and actions of the Architect reviewed by such Other Professional(s) for the
purpose of protecting the interests of the engaging party, consistent with the
provisions of this Section 1(b). Notwithstanding the foregoing, no cost of any
Other Professional(s) engaged by Landlord shall be included in the Project Cost
unless such engagement, and the terms thereof, and the inclusion of such costs
shall have been approved in advance by Tenant, other than Other
Professional(s) identified on the Soft Cost Schedule attached to the Lease as
Exhibit B-2.

 

2.                                      The Work.

 

(a)                                 The Work. Prior to the execution of the
Lease, Landlord and Tenant have agreed upon the general scope and specifications
for the “Work” as listed on Attachment 1 attached hereto and made a part hereof
(collectively, the “Work Documents”).

 

(b)                                 Work. The work to be completed by Landlord
hereunder and necessary for the construction and completion of the Premises for
Tenant’s use and occupancy shall be referred to herein collectively, as the
“Work.”

 

3.                                      Construction and Completion of Work.

 

(a)                                 Landlord, at its sole cost and expense,
shall commence, construct and complete (and shall cause Landlord’s Contractor,
as hereinafter defined, to complete) the Work in a good and workmanlike manner
in accordance with the Construction Documents, the Lease, the Schedule, the
Construction Contract, the Project GMP (as defined hereinafter) and all
applicable Legal Requirements, and requirements of public authorities and
insurance underwriters. Landlord shall comply with and give all notices required
by all applicable Legal Requirements, and requirements of public authorities and
insurance underwriters. Landlord shall procure insurance of the types and
coverage amounts appropriate given the nature and extent of the Work, as
reasonably determined by Landlord, but in no event less than the insurance
requirements imposed by the Lease. Landlord shall be responsible for the removal
of all debris within and adjacent to the Premises created by the Work. Landlord
shall obtain all customary warranties available from contractors and
manufacturers in connection with the Work, which warranties shall be confirmed
in an addendum to this Work Letter on or prior to the establishment of the
Project GMP.

 

(b)                                 On or before the date set forth in Lease for
delivering the Acceptable Total, Landlord shall cause the Architect to prepare
and deliver to Tenant’s Representative, for review and approval by Tenant (and
if requested by Tenant, Landlord shall cause the Architect to deliver to Tenant
one digital Auto-Cad drawing file format (latest version), free of copyright or
accompanied by a license for use in connection with the Work and any subsequent
alteration or addition thereto or reconstruction thereof, and three (3) copies
of) the “Design Development Documents”, consisting of drawings, details,
outlines, specifications and other documents consistent with the Work Documents,
to fix and describe the improvements to be built by Landlord as the Work, as to
architectural, structural, mechanical, electrical and life safety

 

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systems, materials and such other features, elements and components as may be
appropriate. Such documents shall likewise indicate material finishes for the
Work.

 

(c)                                  Tenant shall have the right to review and
give its approval or disapproval of the Design Development Documents, giving
specific and reasonably detailed reasons in case of disapproval, to Landlord
within ten (10) business days following receipt thereof. If Tenant disapproves
any part of the Design Development Documents in accordance with this Subsection
3(c), Landlord shall, within ten (10) business days thereafter, submit to
Tenant, for its approval, further modified design documents for the Work, which
shall be subject to the same approval process as the Design Development
Documents originally submitted by Landlord to Tenant, except that (A) the time
periods for review and approval or disapproval on the part of Tenant shall be
five (5) business days, (B) the time period for responsive submissions by
Landlord shall be five (5) business days, and (C) Tenant shall not withhold
Tenant’s approval unless Tenant determines in good faith that the revisions
submitted by Landlord are not responsive to or adequate to resolve fully the
detailed reasons for disapproval raised by Tenant in Tenant’s response to
Landlord preceding submission. Landlord and Tenant, respectively, shall prepare,
submit and review, as the case may be, each successive revision and resubmittal
of revisions of the Design Development Documents until the same have been
approved by Landlord and Tenant in accordance with the terms of this Work
Letter.

 

(d)                                 Based on the Design Development Documents
which Tenant has approved pursuant to Subsection 3(c) above, Landlord shall
cause the Architect to prepare and deliver to Tenant’s Representative, for
review and approval by Tenant (and if requested by Tenant, Landlord shall cause
the Architect to deliver to Tenant one digital Auto-Cad drawing file format
(latest version), free of copyright or accompanied by a license for use in
connection with the Work and any subsequent alteration or addition thereto or
reconstruction thereof) and three (3) copies) of the final plans and
specifications for the construction of the Work, which shall (i) be consistent
with the Design Development Documents, (ii) be complete and fully coordinated,
(iii) include the depiction of all work necessary to obtain, upon completion of
the Work, a certificate or statement of occupancy from all applicable
governmental authorities having jurisdiction, for the Building and other
improvements to be constructed by Landlord as a part of the Project, and (iv) be
signed and sealed by the Architect or, if applicable, Landlord’s professional
engineer, licensed and registered in the State of Delaware. Such final plans and
specifications shall also conform in all material respects to actual field
conditions and all applicable Legal Requirements, and the requirements of public
authorities and with the reasonable and customary requirements of insurance
underwriters, and shall be sufficient for the issuance of all building permits
required for the construction of the Work. Such final plans and specifications
shall contain, at a minimum, floor plans, structural plans, reflected ceiling
plans, power and telephone plans, mechanical plans, details and elevations,
electrical plans, fire protection plans, the locations and specifications for
all mechanical, electrical, fire protection, security and life safety equipment,
and the locations of all partitions, doors, lighting fixtures, electrical
receptacles and switches, and other relevant construction details, together with
all other plans and specifications required for the complete construction of the
Work.

 

(e)                                  Following approval by Landlord and Tenant
of Landlord’s plans and specifications for the Work in accordance with the
provisions hereof, such revised plans and

 

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specifications for the Work (or a schedule of such revised plans and
specifications) shall thereupon constitute the “Construction Documents”.

 

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

 

(g)                                  Landlord shall not have the right to make
any material changes to the approved Construction Documents or the Work (each, a
“Landlord Change”) without first consulting with Tenant and receiving Tenant’s
approval. Tenant’s approval under the preceding sentence shall not be
unreasonably withheld, conditioned or delayed provided that it shall not be
unreasonable for Tenant to withhold its approval of any such proposed Landlord
Change if the same (A) materially increases the Project Cost unless Landlord
agrees to pay the entire cost therefor without contribution from Tenant, unless
such change was necessitated solely by Tenant Delay, (B) results in a material
delay in the Substantial Completion of the Premises in accordance with the
Schedule, unless such change was necessitated solely by Tenant Delay, (C) upon
Substantial Completion, materially impairs access to or use of the Premises for
the Permitted Use, (D) materially alters in any significant manner the aesthetic
appearance or properties of the Premises, Building, Land or any of the
improvements to be constructed thereon (including without limitation the number,
location or configuration of parking spaces and drive aisles), (E) materially
increases the reasonably estimated cost of operation of the related equipment,
(F) materially impairs the visibility of Tenant’s signage, (G) materially
impairs or interferes with the layout, configuration or utility of the Premises,
including, without limitation, the functionality or operations of the labs, or
(H) is materially inconsistent with the quality of finish and operations
contemplated by the Construction Documents. Landlord shall at all times give
reasonable consideration to Tenant’s suggested reasonable alternatives to any
proposed Landlord Change. Landlord, upon Tenant’s approval, may make
substitutions of materials in the Work of equal or better quality and
performance and that do not affect finishes, and do not materially affect the
utility, efficiency or constructability of the Work or the Premises, or increase
the Project Cost or affect the Schedule. Any third-party costs incurred by
Tenant in connection with reviewing the design and engineering of a proposed
Landlord Change and making any corresponding changes to any other Construction
Documents or other plans for the Premises shall, unless the change was
necessitated solely because of Tenant Delay, be reimbursed by Landlord to Tenant
within thirty (30) days of Landlord’s receipt of an invoice therefor (and shall
not be included in the Project Cost), and if not so reimbursed by Landlord to
Tenant, such amount, together with interest at the Default Rate from the date
payment was due, may be offset against the next monthly installment or
installments, if necessary, of Minimum Rent until such amount is set off in
full, and Landlord will have no claim against Tenant for unpaid Minimum Rent
resulting therefrom; provided, however, after Substantial Completion of the
Premises, the amount Tenant may deduct from any individual monthly installment
of Minimum Rent shall be limited to an amount equal to twenty percent (20%) of
such monthly installment. For the avoidance of doubt, nothing in this
Section 3(g) shall be deemed to require Tenant to pay for any costs or expenses
associated with the Work except as specifically provided in the Lease.

 

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(h)                                 Tenant’s review of Landlord’s design or
construction documents (including, without limitation, the Construction
Documents (including the final and earlier iterations thereof)) shall not, in
any manner, be deemed a review for compliance with any Legal Requirements
(including, without limitation, the ADA and regulations thereunder), for
completeness, for constructability (including means and methods), for
availability of materials specified, or (except as to lab and vivarium equipment
as to which Tenant shall assess suitability), for suitability for the purposes
intended, all of which shall remain the responsibility of Landlord. Such review
by Tenant shall not, in any manner, relieve Landlord of its obligation to
provide complete design documentation for the Work in accordance with this Work
Letter. Subject to the foregoing, Tenant shall be entitled to rely on the
accuracy and completeness of the Construction Documents and each and all
components thereof.

 

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

 

(j)                                    Notwithstanding any provision in this
Subsection 3(j) to the contrary, Landlord shall cause the Architect to make
available a secure website, and assign a password to Tenant to permit Tenant
access thereto, which website will provide access to the Design Development
Documents and the Construction Documents, as the same are developed by Architect
and the design professionals engaged by Architect. All such documents shall be
deemed delivered to a party once a party or its designated representative is
notified by email that a particular document is available on such website, and
any time period applicable to review and approval of such document shall be
measured from the business day on which such email is delivered.

 

(k)                                 Following the execution of the Lease, the
parties may determine to alter the process of review and approval of Design
Development Documents and Construction Documents whereby the Architect will
generate and turn revisions to the parties simultaneously and each party will
respond to the Architect and the other party with approval or with comment, with
the intent of such truncated process being to save time and meet the Schedule as
the same may be revised by the parties.

 

4,                                      Tenant Modifications to Construction
Documents.

 

(a)                                 Landlord shall cooperate and work in good
faith with Tenant to allow Tenant to make modifications to the Construction
Documents during the preparation and after the approval thereof, subject to
Section 1.02 of the Lease and provided such modifications comply with Legal
Requirements. For purposes hereof, an “Additional Work Change” shall mean
(i) any revisions, alterations or upgrades to the Construction Documents
requested by Tenant prior to the approval thereof that deviate from the Design
Development Documents; and (ii) any revisions, alterations or upgrades to the
Construction Documents requested by Tenant after the approval thereof to
customize them to Tenant’s needs or desires. In no event shall any revisions,
alterations or corrections to the Design Development Documents or the
Construction Documents made solely

 

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for the purpose of correcting any defect therein (including any change or
correction required to comply with any laws or governmental requirements or to
reflect field conditions) or any inconsistency thereof with the Work Documents,
or the Design Development Documents respectively, constitute an Additional Work
Change, and Landlord shall have no right to withhold consent thereto or include
any additional costs associated therewith in the Project Cost; provided,
however, additional costs associated with any such change necessitated solely by
Tenant Delay may be included in the Project Cost. Any additional Work arising
out of an Additional Work Change is referred to herein as “Additional Work”. If
Tenant desires to make any Additional Work Change, Tenant shall so notify
Landlord in writing, specifying in reasonable detail in such Notice the nature
and scope of such revisions, alterations or upgrades (the “Additional Work
Change Notice”). With respect to each Additional Work Change:

 

(i)                                     Within five (5) business days following
Landlord’s receipt of the Additional Work Change Notice, Landlord shall notify
Tenant in writing, in Landlord’s good faith evaluation, (1) whether Tenant’s
request for such Additional Work Change would result in any delay in the
Schedule and, if so, as accurate an estimate as possible of the amount of such
delay in the Schedule; and (2) whether Tenant’s request for such Additional Work
Change would result in any delay in the Commencement Date of the Lease and, if
so, as accurate an estimate as possible of the amount of such delay and (3) the
cost of implementing such change (if any); and, thereupon, Tenant may, within an
additional three (3) business days thereafter, either retract or confirm the
request for Landlord’s evaluation of such change by Notice from Tenant’s
Construction Representative (failing which, Tenant shall be deemed to have
retracted the request).

 

(ii)                                  If Tenant confirms the request for such
Additional Work Change within the three (3) business day period set forth in
Subsection 4(a)(i) above, then for a period of ten (10) days thereafter (or such
longer period as may be mutually agreed upon by Landlord and Tenant if
reasonably required by the nature or scope of the requested change) (the
“Consultation Period”), Landlord’s Construction Representative, Tenant’s
Construction Representative, the Architect and any Other Professional(s), shall
diligently and in good faith cooperate, coordinate, confer and meet to
(A) develop plans and specifications or revisions to the applicable Construction
Documents and design and engineer the requested change, and (B) determine and
agree upon (1) the actual net delay(s) (if any) in the Schedule reasonably
attributable to evaluating, designing, engineering, pricing and/or implementing
such change, and (2) the actual cost of implementing such change (if any). On or
before the last day of the Consultation Period, Tenant shall either retract or
confirm the request for the Additional Work Change by Notice from Tenant’s
Construction Representative (failing which Tenant shall be deemed to have
retracted the request).

 

(iii)                               If Tenant elects to proceed with such
Additional Work Change pursuant to Subsection 4(a)(ii) above, any actual net
delay reasonably attributable to implementing such change (including any project
delays actually incurred during and by reason of the Consultation Period), as
finally determined by Landlord and Tenant pursuant to Subsection 4(a)(ii) above,
or both, shall constitute Tenant Delay (as defined herein). If Tenant does not
elect to proceed with such Additional Work Change, Tenant may nonetheless be
charged with Tenant Delay in respect of actual project delays actually incurred
by Landlord during and by reason of the Consultation

 

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Period, provided the same has been properly identified by Landlord in Landlord’s
notice under Section 4(a)(i) above.

 

(iv)                              Subject to Section 1.02(a) of the Lease, the
cost of the design and engineering of the requested Additional Work Change
pursuant to Subsection 4(a)(ii) above shall be included in the Project Cost,
based on amounts which are normally and customarily charged by such
architectural and engineering firms to Landlord for comparable architectural or
engineering services and disclosed to and accepted in writing by Tenant in
advance. The Architect and any Other Professional(s) shall promptly (and in any
event in accordance with the Schedule) reflect and incorporate all such changes
in the Construction Documents to assure that the Additional Work Change is
consistent with the design of the Work and will be constructed by Landlord
concurrent with and as part of the construction of the Work.

 

(v)                                 Subject to Section 1.02(d) of the Lease, if
Tenant elects to proceed with such change pursuant to Subsection 4(a)(ii) above,
the incremental cost, if any, attributable to such Additional Work shall be
included in the Project Cost.

 

5.                                      Construction of Work.

 

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

 

(b)                                 Budgets; Project GMP.

 

(i)                                     At all times until the completion of the
Work, Landlord, in consultation with Tenant and subject to Tenant’s approval
will prepare, update and revise a reasonably detailed budget reflecting the
costs for the design, development and construction of the Work (as amended from
time to time, (the “Budget”). Attached hereto as Attachment 2 is Landlord’s most
recent estimate of the cost of the Work, based upon the Work Documents, which
shall constitute the initial Budget(1). Landlord shall cause the Architect to
design the Work within the applicable Budget, subject to the terms and
conditions hereof, At least monthly, and also from time to time upon Tenant’s
request therefor, Landlord shall update the Budget to reflect material changes
in the design and composition of the Work. Landlord shall promptly transmit to
Tenant’s Representative a copy of each updated or revised Budget, and shall set
forth a summary of the reasons for any changes made therein. Landlord and
Landlord’s Contractor shall also cooperate

 

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(1) NOTE: THE ATTACHED BUDGET DOES NOT INCLUDE ALL NECESSARY DESIGN FEES FOR THE
WORK. THE BUDGET SHOULD BE UPDATED TO INCLUDE ALL OF THE SOFT COSTS AND THE GMP
ITEMS GOING FORWARD, WHICH SHALL BE SUBJECT TO THE REVIEW AND APPROVAL OF
LANDLORD AND TENANT.

 

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with Tenant by providing to Tenant, in writing, good faith estimates of any
contemplated or proposed changes to the Work, and comparison estimates to enable
Tenant to value engineer the Work.

 

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

 

(iii)                               Subject to Section 1.02 of the Lease, Tenant
shall have the right, in its sole discretion, to accept or reject the
Preliminary Project GMP provided by Landlord and Landlord’s Contractor; and if
the Preliminary Project GMP is accepted by Tenant in writing, the Preliminary
Project GMP as accepted by Tenant shall constitute the “Project GMP” for
purposes of this Work Letter. Subject to Section 1.02 of the Lease, if the
Preliminary Project GMP is not accepted by Tenant in writing, then (i) Tenant
shall have the right (with due regard to the Schedule) to make changes to the
Construction Documents to reduce or increase the Project Cost; and (ii) upon
approval by Landlord and Tenant of the Construction Documents or at such earlier
time as Landlord and Tenant may agree in writing, Landlord and Landlord’s
Contractor shall submit to Tenant, in writing, a revised guaranteed maximum
price for the completion of the Work based on the final Construction Documents
(the “Revised Project GMP”); provided the Revised Project GMP may not exceed the
Preliminary Project GMP except due to changes required by Tenant after the
Preliminary Project GMP was established or due to Tenant Delay. The Revised
Project GMP, prepared in accordance with the requirements of this Work Letter,
shall be binding upon Landlord, Landlord’s Contractor and Tenant, and shall
constitute the “Project GMP” for purpose of this Work Letter. The Revised
Project GMP proposal shall be submitted by Landlord and Landlord’s Contractor to
Tenant promptly upon completion of the bidding process set forth below but not
later than fifteen (15) calendar days after receipt of the required bids of
third-party subcontractors and suppliers, and otherwise in accordance with the
Schedule.

 

(1)                                 Subject to Section 5(b)(iii) above, the
Preliminary Project GMP shall be substantially consistent with the Budget in
effect immediately prior to the submission of the Preliminary Project GMP to
Tenant; and any Revised Project GMP shall be substantially consistent with the
Preliminary Project GMP.

 

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

 

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

 

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(iv)                              No Work shall commence until the Project GMP
is established pursuant to Section 5(b) above. After the Project GMP has been
established, amendments, if any, to Construction Documents shall be made
pursuant to Sections 3(g), 4 and 10; provided, however, that reasonable updates
and modifications of and additions to then-existing Construction Documents that
are reasonably inferable from the then-existing Construction Documents will not
entitle Landlord or Landlord’s Contractor to an increase in amounts payable to
it, or to an extension of time and will not constitute Tenant Delay.

 

(v)                                 The following shall apply with respect to
any subcontractor or supplier bidding process for the Work:

 

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

 

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

 

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

 

(4)                                 Promptly upon receipt by Landlord of the
competitive bids, but before the award of subcontracts and purchase orders,
Landlord shall schedule a post-bid review meeting that shall be attended by
Landlord, Landlord’s Contractor, Tenant, Landlord’s Representative, Tenant’s
Representative and such proposed subcontractors and material suppliers as
Landlord and Tenant shall deem appropriate. Before such meeting, Landlord’s
Contractor shall obtain from all subcontractors and material suppliers as part
of the competitive bid process, and will share with Tenant as soon as it is
received, a detailed, line item by line item breakdown of all fees and costs
included in the subcontractor’s or material supplier’s bids, including all

 

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relevant worksheet information. The purpose of such meeting shall be to review
in detail the scope of the work, the schedule of performance, and the bids of
all subcontractors and material suppliers. Landlord, Landlord’s Contractor and
Tenant shall provide full cooperation in such post bid review process. All
bidding information shall be and remain confidential and shall not be disclosed
to competing contractors or their subcontractors or suppliers. After
consultation with Tenant, Landlord shall direct Landlord’s Contractor as to
which bids to accept; provided, however, that Landlord shall not select a bid
that is not the lowest responsive, qualified bid for any work, trade or
materials without first obtaining Tenant’s written approval (provided Tenant’s
approval or disapproval shall be reported promptly upon Landlord’s request)
after Tenant’s receipt of Landlord’s brief statement of Landlord’s reasons for
rejecting the lowest responsive, qualified bid. Tenant also shall have the right
to participate with Landlord’s Contractor in negotiating with every
subcontractor and material supplier so long as Tenant does so in a timely manner
consistent with the Schedule.

 

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

 

(6)                                 For purposes of this Work Letter and the
development of the Project GMP (provided, however, the Project GMP shall not
include the soft costs in the Soft Cost Schedule), the term “Project Cost” shall
mean costs actually incurred by Landlord or Landlord’s Contractor in the proper
and complete performance of the Work, as limited below and subject to Section
1.02(a) of the Lease. Such costs shall be at reasonable rates not higher than
the standard paid in Wilmington, Delaware except with prior written consent of
Tenant. The Project Cost shall include only the following (and any deviation
herefrom that is required by Landlord’s Contractor shall, if acceptable to
Landlord and Tenant, be reflected in the amendment or amendment and restatement
of this Work Letter as contemplated in Section 1.02(f) of the Lease):

 

A. LABOR COSTS

 

i.                                          Wages of construction workers
directly employed Landlord’s Contractor or its subcontractors to perform the
construction of the Work at the Premises.

 

ii.                                       Landlord’s Contractor’s supervisory
and administrative personnel, as reasonably necessary for the efficient
prosecution of the Work, at or below the level of project manager, but only for
the portion of their time required for the Work; provided, however, the Project
Cost shall not include the cost of such supervisory and administrative personnel
other than the positions and at the rates reasonably approved by Tenant;

 

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

 

iv.                                   Industry standard fees of Landlord’s
Contractor; provided, however, such fees shall not be greater than the fees that
would be charged in an arms-length transaction for substantially similar work,
and based on competitive bidding.

 

B. SUBCONTRACT COSTS

 

i.                                          Payments properly made or payable by
Landlord’s Contractor to subcontractors in accordance with the requirements of
the subcontracts entered into in accordance with this Work Letter. To the extent
that such subcontracts are not subject to the bidding procedures provided for in
this Work Letter, the terms thereof, and sums payable thereunder, shall be
reasonable and customary and at competitive rates.

 

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

 

i.                                          The reasonable costs, including
transportation, of materials and equipment incorporated or to be incorporated in
the completed construction and securely stored at the Premises and fully
insured. Unused excess materials that are reasonably marketable or utilized
elsewhere by Landlord’s Contractor or any subcontractor shall be credited to
Owner as a deduction from the Project Cost.

 

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

 

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

 

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

 

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

 

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E. MISCELLANEOUS COSTS

 

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

 

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

 

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

 

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

 

v.                                      Other “soft” costs contemplated by the
Budget, such as the costs of obtaining permits and approvals, loan origination
fees, design fees, commissions, and legal fees.

 

F. EMERGENCIES

 

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

 

G. EXCLUSIONS

 

i.                                          The Project Cost shall not include:

 

ii.                                       Salaries and other compensation of any
of Landlord’s employees or personnel or Landlord’s Contractor’s personnel above
the level of project manager or in number beyond those reasonably required for
the efficient prosecution of the Work, or for any portion of their time not
directly pertaining to the Work.

 

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

 

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

 

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

 

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

 

vii.                                Costs due to the breach of the Lease or this
Work Letter or Landlord’s Contractor’s failure to comply with the Lease, this
Work Letter or the Construction Contract (as hereinafter defined) or due to the
fault or negligence of Landlord’s Contractor, or any other responsible party,
including, but not limited to costs for the correction of damaged, defective or
nonconforming Work, disposal and replacement of materials and equipment
incorrectly ordered or supplied, and repairing damage to property not forming
part of the Work.

 

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

 

ix.                                   Except as otherwise expressly provided in
this Work Letter, any cost which would cause the Project GMP to be exceeded.

 

x.             Costs recoverable from insurance and bonding companies (or that
would have been recoverable had Landlord maintained insurance coverages in
accordance with the requirements of this Lease), Notwithstanding anything to the
contrary contained in the Lease or this Work Letter, Landlord’s Contractor shall
be responsible for all property insurance deductibles.

 

H. OTHER

 

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

 

ii.                                       In no event shall the Project Cost
include any environmental remediation costs or costs to address concealed
subsurface conditions (such as unanticipated rock or unstable soil); but the
Project Cost shall include typical pre-construction soil borings to determine
the subsurface conditions.

 

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

 

For the avoidance of doubt, in the event of any inconsistency between the
Acceptable GMP (as approved by Landlord and Tenant) or the Soft Cost Schedule
(as approved by Landlord and Tenant) on the one hand, and the provisions of this
Section 5(b)(v)(6) on the other hand, the Acceptable GMP (as approved by
Landlord and Tenant) or the Soft Cost Schedule (as approved by Landlord and
Tenant), as applicable, shall control.

 

6.                                      Construction Contract for Work. After
the Project GMP has been established and within the time period set forth in the
Schedule, Landlord shall enter into a construction contract (the “Construction
Contract”) for the Project GMP with Landlord’s Contractor for the

 

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performance of the Work. The terms of the Construction Contract shall be
consistent with the terms of the Project GMP established in accordance with this
Work Letter, and the Construction Contract (and all subcontracts) shall
otherwise be subject to Tenant’s review and approval prior to the execution
thereof. Landlord agrees that it shall expressly include in the Construction
Contract and in each other contract or agreement with Landlord’s Contractor, a
requirement (and an acknowledgement by Landlord’s Contractor) that Tenant is a
direct intended third party beneficiary thereof (and of any subcontracts that
Landlord’s Contractor enters into), that Tenant shall be entitled to rely upon
the provisions thereof and that, if Landlord breaches or defaults under the
Lease or this Work Letter beyond any applicable notice and/or cure period,
Tenant shall have the express right (but not the obligation) to directly enforce
such agreements and contracts as if it were a direct party thereto. Landlord
shall deliver to Tenant a copy of the executed Construction Contract at least
five (5) days prior to the commencement of the Work. Landlord shall not modify
or amend the Construction Contract in any material respect without Tenant’s
prior written consent, which shall not be unreasonably withheld, delayed or
conditioned, and in no event at any expense to Tenant. Notwithstanding Tenant’s
participation in the establishment of the Project GMP, the selection of any
subcontractors and/or suppliers, and Tenant’s rights contained herein for the
review and approval of the Construction Contract, Landlord shall be solely
responsible for the Work, for the oversight and supervision of Landlord’s
Contractor’s construction of the Work, for the enforcement of the Construction
Contract, and for the payment and performance of all of the obligations of the
“owner” under the Construction Contract; and Tenant shall not have any
responsibility therefor.

 

7.                                      Provision of Plans. In addition to the
submissions contemplated in Section 3 hereof, from time to time upon request by
Tenant or Tenant’s Construction Representative, Landlord shall furnish to Tenant
or Tenant’s Construction Representative the most current and complete
architectural, design, mechanical, electrical and structural drawings and
specifications for the Work, and specifications for all other parts, equipment,
components, elements and facilities of the Work pertinent to the design,
pricing, bidding or construction of the Work, in print form and in digital
Auto-Cad drawing file format, either free of copyright or with such licenses or
other consents as are reasonably necessary to enable Tenant and Tenant’s design
professionals and contractors to utilize the same in connection with the design,
construction, maintenance, alteration, operation, reconstruction and occupancy
of the Premises. Such drawings and specifications shall include, without
limitation, schedules, and information pertaining to elevators, mechanical
shafts, fire stairs, restrooms, and columns, and Landlord shall, upon reasonable
request by Tenant, share all information with Tenant and Tenant’s Construction
Representative with respect to drawings, mechanical systems, structure, core and
shell and field measurements, All such plans, documents, drawings and
specifications shall be accompanied by written authorization from the Architect,
engineer and/or other professional permitting the use thereof by Tenant,
Tenant’s Construction Representative and Tenant’s design professionals, who
shall be entitled to rely on the material accuracy and completeness of all
plans, documents, drawings and specifications furnished by Landlord and
Landlord’s design professionals.

 

8.                                      Project Cost; Payment.

 

(a)                                 The Project Cost shall be borne by Landlord
and Tenant as set forth in Sections 1.02(a) and 5.01(a) of the Lease.

 

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(b)                                 Each month, before the submission of an
application for payment (which shall in all cases reflect retainage required
under the Construction Contract) by Landlord’s Contractor (each, an “Application
for Payment”), Landlord’s Construction Representative, Tenant’s Construction
Representative and Landlord’s Contractor shall promptly and timely meet to
discuss such Application for Payment. Applications for Payment (together with
all documentation and evidence supporting such Application for Payment) shall be
submitted by Landlord’s Contractor to Landlord monthly, following the end of
each month, and Landlord shall promptly forward the same to Tenant’s
Construction Representative. In addition, Landlord shall also forward to
Tenant’s Construction Representative a monthly report of the status of the
project budget for the Work (including but not limited to an updated project
budget progress comparison), PFI log, shop drawing log, PCO log, CO log, and
current testing reports. Applications for Payment shall include documentation
with complete back-up, evidencing the scope and cost of any Work actually
performed during the previous month, together with copies of any applicable
partial or final releases of mechanic’s liens from Landlord’s Contractor and its
subcontractors.

 

(c)                                  Within three (3) business days after his or
her receipt of any Application for Payment, Tenant’s Construction Representative
shall visit the Premises to determine whether, to his or her knowledge based
upon his or her inspection of the Work performed, the quantity and quality of
the Work performed by Landlord’s Contractor is consistent with the Construction
Documents and with the amount invoiced by Landlord’s Contractor. Within two
(2) business days after such visit, Tenant shall either (A) approve, sign and
return the Application for Payment in the amount applied for by Landlord’s
Contractor, or (B) withhold approval of the amount applied for, notifying
Landlord, in writing, of the reasons for withholding approval, or (iii) approve
in part (and with respect to such approved part sign and return the Application
for Payment in the amount applied for by Landlord’s Contractor with respect to
such approved part), and withhold approval in part of the amount applied for,
notifying Landlord, in writing, of the part(s) disapproved and the reasons for
withholding approval. The parties acknowledge that funding of the amount applied
for in each instance shall also be subject to Landlord’s lender’s approval and
that the time periods for inspection, approval or disapproval, as the case may
be may need to be accelerated to meet the requirements of applicable law in
regard to disputing a requested payment. The amount of each payment so approved
shall be calculated as provided in the Construction Contract. If Tenant does not
give or withhold its approval of any Application for Payment within such five
(5) business day period, Landlord shall have a right to provide a second request
for approval and provided such second request shall state in upper case, bold
type that it is a “DEEMED APPROVAL NOTICE” if Tenant shall fail to respond to
such second written request within three (3) business days after Tenant’s
receipt thereof, then such Application for Payment shall be deemed approved by
Tenant.

 

(d)                                 The initial schedule of values used as a
basis for payment and any changes thereto shall be in accordance with the
applicable terms and limitations provided in this Work Letter and the schedules
attached hereto, and subject to Tenant’s approval. If Tenant is unable to
approve any Application for Payment in the full amount applied for, Tenant shall
promptly approve the Application for Payment to the extent and in the amount
that it is able, and work under this Work Letter and the Construction Contract
shall continue pending the resolution of any dispute or controversy involving
any disapproved portion of the Application for Payment in accordance

 

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with the terms hereof. Landlord shall process each approved Application for
Payment (or portion thereof) promptly and in all events in accordance with the
Construction Contract.

 

(e)                                  [NOTE: PROVIDE FOR PAYMENT WITHIN 3
BUSINESS DAYS AFTER THE 5 BUSINESS DAY PERIOD DESCRIBED IN SECTION 8(C) ABOVE,
BASED ON PRO RATA SHARE OF INVOICES FOR CONSTRUCTION COSTS, SUCH SHARE TO BE
BASED ON THE PROPORTION LANDLORD OR TENANT’S INVESTMENT BEARS TO THE ACCEPTABLE
TOTAL, UNTIL TENANT’S TOTAL FUNDING OBLIGATIONS ARE MET (EXCEPT THAT LANDLORD IS
LIABLE FOR 100% OF THE FIRST $3M OF CONTINGENCY, WITH THE NEXT $3M OF
CONTINGENCY TO BE SHARED 50/50). IN NO EVENT SHOULD TENANT BE REQUIRED TO MAKE
PAYMENT ON AN INVOICE SOONER THAN LANDLORD IS REQUIRED TO MAKE PAYMENT ON SUCH
INVOICE.]

 

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

 

(g)                                  No payment of the Project Cost shall be
made to Landlord’s Contractor absent approval (or deemed approval) by Tenant.

 

(h)                                 Approval of any Application for Payment (or
any portion thereof) shall not represent acceptance of any non-conforming Work,
or impair or otherwise affect Tenant’s right to specific performance of
Landlord’s obligations, unless Tenant specifically agrees in writing to accept
such non-conforming Work or agrees in writing to waive such right of specific
performance, as applicable.

 

(i)                                     Landlord shall fully comply with all
applicable Legal Requirements with respect to payments to Landlord’s Contractor
and other contractors, subcontractors and suppliers to whom payments may be owed
by Landlord, and Tenant shall not act or commit to act in any way that causes
Landlord’s noncompliance.

 

(j)                                    Landlord shall maintain, and require by
contract that, Landlord’s Contractor and all subcontractors shall keep separate
books and records for the Tenant Specific Improvements. Landlord, Landlord’s
Contractor and all subcontractors shall maintain their respective books and
records concerning the costs of all of the Work for a period of not less than
three (3) years beyond the termination of the Construction Contract. Upon
reasonable prior written notice to Landlord or Landlord’s Contractor or
subcontractors, Tenant shall be permitted, during normal business hours, to
audit the books and records of Landlord and of Landlord’s Contractor and
subcontractors for verification of the costs of the Work.

 

9.                                      Changes to Work and/or Construction
Documents by Landlord. If any materials or components for the Work specified in
the Construction Documents shall not be available upon commercially reasonable
terms, Landlord reserves the right to make substitutions of materials and/or
components of substantially equivalent quality and utility, consistent with the
quality

 

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required under the final, approved Construction Documents and without impairing
the utility, efficiency or visual impact of the Work; provided, that, in each
instance, Landlord gives Tenant prior notice thereof and Landlord consults with
Tenant and its design professionals to identify and select substitute materials
and/or components, and Tenant approves such substitutions as provided
hereinafter. Landlord also reserves the right to make minor changes to the Work
reasonably necessitated by conditions met in the course of construction of which
Landlord, acting in a commercially reasonable manner, was not aware; provided,
that Tenant’s written approval of any change shall first be obtained. Landlord
shall not make substitutions of materials and/or components or changes in the
Work for the primary purpose of satisfying the Schedule unless approved by
Tenant in writing, which approval shall not be unreasonably withheld, delayed or
conditioned. Any savings shown to result from such substitutions by Landlord
shall be credited against the Project Cost and shall reduce the Project GMP by
the amount of such savings, and the Project GMP shall be increased by any net
excess cost of such substitute materials and/or components over the costs of the
materials and/or components originally specified, provided that Tenant shall
have approved such substitution and increased cost in writing as provided above
in this Section. If the unavailability of materials or components or changes to
the Work is caused solely and directly by any act, omission or delay of Landlord
or any of Landlord’s contractors, that is in breach of the Lease, this Work
Letter or the Construction Contract, Landlord shall promptly pay the reasonable
fees of Tenant’s design professionals incurred in connection with evaluating the
proposed substitutions or other changes pursuant to this Section 9 and Landlord,
and not Tenant, shall pay any excess cost of such substitute materials and/or
components over the costs of the materials and/or components originally
specified; provided, however, for the avoidance of doubt, if the unavailability
of materials or components or changes to the Work are solely a result of Tenant
Delay, such costs shall be borne by Tenant. If Tenant does not give or withhold
its approval under this Section 9 within three (3) business days after Tenant’s
receipt of Landlord’s written request, Landlord shall have a right to provide a
second request and provided such second request shall state in upper case, bold
type that it is a “DEEMED APPROVAL NOTICE” if Tenant shall fail to respond to
such second written request within three (3) business days after Tenant’s
receipt thereof, then such request shall be deemed approved by Tenant. For the
avoidance of doubt, nothing in this Section 9 shall be deemed to require Tenant
to pay for any costs or expenses associated with the Work except as specifically
provided in the Lease or this Work Letter.

 

10.                               Change Orders. After Tenant shall have
accepted the Project GMP, changes to the Work by Tenant or Landlord, as the case
may be, shall be accomplished by Change Order. As used in this Work Letter, a
“Change Order” shall mean a written instrument prepared by Landlord and signed
by Landlord and Tenant stating their agreement upon all of the following:
(A) the change in the Work and/or the Construction Documents; (B) the extent of
the adjustment, if any, in the Project GMP; and (C) the extent of the adjustment
in the Schedule, if any. Landlord shall act reasonably and diligently, and as
expeditiously as possible, in preparing a Change Order, and Tenant shall act
reasonably and diligently, and as expeditiously as possible, in approving a
Change Order prepared by Landlord and submitted to Tenant. No Change Order
initiated by a party may have the effect of increasing the amount that the
non-initiating party must pay pursuant to the terms of Section 1.02(d) of the
Lease; provided, however, in the event of a Change Order that would increase the
amount that the non-initiating party must pay, the initiating party may agree to
pay for such Change Order.

 

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11.                               Construction Milestones; Substantial
Completion.

 

(a)                                 Construction Milestones. Landlord
acknowledges that Substantial Completion of the Premises (as hereinafter
defined) within the applicable time period provided in the Schedule and subject
to the terms and conditions of the Lease is material to Tenant’s willingness to
enter into this Lease. In order to assure Tenant of Landlord’s diligence in
prosecuting the actions necessary to achieve Substantial Completion of Premises
in accordance with the Schedule, Landlord and Tenant shall identify, with the
input of Landlord’s Contractor, certain critical milestones to be achieved or
satisfied by Landlord and Landlord’s Contractor by certain specified dates, to
be set forth on Attachment 3 to this Work Letter (each a “Construction
Milestone”, and collectively the “Construction Milestones”). Landlord and
Landlord’s Contractor each shall use commercially reasonable efforts to achieve
or satisfy each of the Construction Milestones by the applicable date set forth
on Attachment 3. The Lease sets forth the consequences should the Construction
Milestones not be timely met.

 

(b)                                 Substantial Completion of Premises. Landlord
and Landlord’s Contractor each shall work diligently to achieve (or cause
achievement of) Substantial Completion (as defined herein) of the Premises on or
before the Outside Delivery Date. The Lease sets forth the consequences should
the Substantial Completion of the Premises not be achieved by the Outside
Delivery Date.

 

(c)                                  Notice of Substantial Completion;
Punchlist. Landlord shall endeavor to provide Tenant with Notice at least thirty
(30) days in advance of the anticipated date of the Substantial Completion of
the Premises, but failure of Landlord shall not be a default hereunder. Within
fifteen (15) days after the date on which Tenant receives Landlord’s notice of
the occurrence of the Substantial Completion of the Premises, Landlord’s
Construction Representative and Tenant’s Construction Representative shall
conduct a joint walk-through of the Premises to inspect the Premises (including,
in addition to the Building, all driveways, parking areas and other exterior
areas of the Premises), have all systems commissioned and demonstrated (as
applicable), and Tenant shall create a punch list of any items which Landlord
has not completed in accordance with the Construction Documents or which needs
to be repaired in order to achieve Final Completion of the Premises. Landlord
agrees to complete the items set forth on the punch list within thirty (30) days
of receipt of such list; provided, however, if Landlord is working diligently to
complete the items on the punch list, Landlord shall have such additional time
as is reasonably required to complete such items so long as Landlord can
reasonably demonstrate to Tenant that such item or items could not have
reasonably been completed within such initial thirty (30) day period; provided,
however, Landlord shall use commercially reasonable efforts to avoid any
unreasonable and unnecessary interference with Tenant’s use or occupancy of the
Premises.

 

12.                               Warranty.

 

(a)                                 Landlord hereby warrants that all labor and
materials provided or required to be provided as a part of the Work (including,
without limitation, all materials and equipment) will be in accordance with the
requirements of the Construction Documents and free from defects. In no event
shall Tenant be obligated to pay any sum or make any contribution to Landlord,
as Rent, a Tenant Funded Amount, or otherwise, for the correction of any defect
in the Work or

 

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otherwise arising out of the failure of the Work to conform to Landlord’s
warranty in this Section 12(a).

 

(b)                                 In addition to, and without limiting, the
foregoing and any other provisions of this Work Letter or the Lease, for a
period of one (1) year after the Commencement Date of the Lease, Landlord shall
repair or replace, at Landlord’s sole cost and expense, all Work that does not
conform to the requirements of Section 12(a). Landlord shall secure and provide
for the Building and Premises all such industry-standard material and system
warranties and cause all warranties relating to any portions of the Work for
which Tenant is responsible to repair, maintain or replace pursuant to the terms
of the Lease, including, but not limited to warranties relating to lab
equipment, given by Landlord’s Contractor, subcontractors and suppliers to be
assigned in writing to Tenant, upon completion of the Work. All repairs or
replacements shall be made at the reasonable convenience of Tenant during
non-Business Hours and in a manner intended not to unreasonably and
unnecessarily interfere with Tenant’s use and occupancy of the Premises. If any
item of the Work is repaired or replaced due to its failure to comply with the
warranty described in this Section 12(b), the warranty with respect to such item
shall likewise extend to all such repairs and replacements. Notwithstanding the
foregoing, Landlord makes no warranty herein with respect to any defect in the
Work constructed by Landlord to the extent attributable to Tenant’s failure to
follow any manufacturer’s instructions with regard to the use and care of the
Work (and not caused by a breach or violation by Landlord or Landlord’s
Contractor or any subcontractor, of the provisions of this Work Letter or the
Lease), or to otherwise maintain the same in accordance with commonly recognized
industry standards if and to the extent Tenant is expressly responsible for such
maintenance pursuant to the terms of the Lease. Nothing herein is intended to
limit the maintenance and repair responsibilities of Landlord and Tenant as
provided in the Lease.

 

(c)                                  Landlord further represents, warrants and
covenants that the Premises shall not, upon Substantial Completion of the
Premises, and except as included in the Construction Documents contain any
Hazardous Substances requiring registration, remediation or other handling under
any Environmental Laws, nor any underground or above-ground storage tanks
located on or within the Premises.

 

(d)                                 To the extent that the requirements for
notice, periods for cure or correction and other conditions precedent for the
exercise by Tenant of its rights under this Section 12 conflict with those set
forth in the Lease, the requirements for notice, periods for cure or correction
and other conditions precedent for the exercise by Tenant of its rights under
this Section 12 shall control.

 

13.                               Substantial Completion and Final Completion.

 

(a)                                 As used herein “Substantial Completion of
the Premises” (including derivative terms) means:

 

(i)                                     Construction of all of Work, including,
to the extent applicable, all parking areas, driveways, access roads and entry
areas (and related curbs, traffic control devices and signage, etc. for the use
and operation thereof in accordance with all Legal Requirements), the Building
roof, entrance, any public areas and signage, storm-water management systems and

 

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utility systems in support of the foregoing shall have been completed in
accordance with the Construction Documents and all applicable Legal
Requirements, and the requirements of public authorities and with the reasonable
and customary requirements of insurance underwriters, and the Architect shall
have issued its certificate of substantial completion and shall have
specifically certified that:

 

(1)                                 Tenant can use the Premises (including all
interior and exterior portions thereof, including without limitation, in
addition to Tenant’s business operations areas, all driveways and parking areas,
sidewalks, lobbies and restrooms), for their intended purposes without any
further material work or interference to Tenant in conducting its ordinary
business activities;

 

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

 

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

 

(4)                                 Tenant, its employees, agents and invitees,
have reasonable and customary access, as intended by the Construction Documents,
to the Building and the Premises, through the lobby, entrance ways, stairways,
elevators and hallways; and

 

(5)                                 The Premises are in turn-key condition, free
and clear of Landlord’s and Landlord’s Contractors’ tools, materials and
equipment and all debris, ready for the installation of any equipment,
furniture, fixtures, or decorations that Tenant will install and which were not
included in the Construction Documents, and all perimeter windows shall have
been cleaned.

 

(ii)                                  Without in any way limiting the foregoing,
the following specific items shall have been constructed, installed and
completed in accordance with the Construction Documents, and shall be safe and
secure and in good condition and operating order, and shall be covered by such
certificate of occupancy: All Building systems and components, including, but
not limited to, elevators, HVAC, utilities, telephone, data, security and life
safety, mechanical, electrical and plumbing systems in all areas of the
Building;

 

(iii)                               Without in any way limiting the foregoing,
all critical systems shall have been commissioned and Tenant shall have approved
the same in writing.

 

(b)                                 As used herein, “Final Completion of the
Premises” means (i) Substantial Completion has been achieved with respect to the
entire Premises, and (ii) all of the Work not completed at Substantial
Completion with respect to the entire Premises is completed, including all punch
list items.

 

14.                               Tenant’s Separate Contractors. Landlord
acknowledges that during the period that Landlord’s Contractor is performing the
Work as set forth in the Schedule, Tenant may engage

 

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separate contractors (the “Tenant’s Contractors”) to provide furniture, computer
and other equipment, signage, cabling and wiring, and other items required by
Tenant for its use and enjoyment of the Premises (collectively, “Separate Tenant
Work”). Landlord shall permit Tenant’s Contractors to have (i) reasonable use of
freight elevators, (ii) reasonable facilities for storage of their equipment and
materials and staging of any construction work they may undertake, and
(iii) reasonable parking rights; provided, however, that Tenant’s Contractors
may not interfere with the progress of construction of the Work and after notice
to Tenant, if interference is not eliminated, shall constitute Tenant Delay.
Landlord shall cause Landlord’s Contractor to cooperate in a reasonable manner
with Tenant’s Contractors and Tenant shall cause Tenant’s Contractors to
cooperate in a reasonable manner with Landlord’s Contractor. Notwithstanding the
foregoing, all access and work by Tenant’s Contractors shall be subject to the
reasonable scheduling, safety, security, staging, insurance and stop-work order
requirements reasonably and timely imposed by Landlord’s Contractor; provided
Landlord’s Contractor shall provide reasonable prior notice of such
requirements. Additionally, Landlord shall cause Landlord’s Contractor, and
Tenant shall cause Tenant’s Contractors, to enforce strict discipline and good
order among their respective employees, and among their respective
subcontractors and sub-subcontractors (and their respective employees), to
maintain and observe sound and harmonious labor practices and to take all
reasonable steps to avoid labor disputes and work stoppages, damage to property
or delay in the Schedule. Tenant shall be responsible for such permits, licenses
and approvals as may be required for the work of Tenant’s Contractors and for
all fees associated with the same. If requested by Tenant, Landlord shall assist
Tenant and its design professionals, at no cost to Landlord, to obtain such
permits, licenses and approvals required, including the identification of, and
assistance with the preparation of, all requisite application documents, the
coordination of the submission of such application documents, and consultation
and meetings with Tenant and Tenant’s Contractors, and with governmental
representatives, to facilitate the proper and expeditious processing of such
applications.

 

15.                               Tenant’s Access to Premises During
Construction. Subject to Section 14 of this Work Letter, Section 2.01(c) of the
Lease, and to Landlord and Landlord’s Contractors’ reasonable rules and
regulations for the safety and protection of persons and property, and for the
timely prosecution of the Work, Tenant and its agents, representatives,
employees and contractors shall have access to the Premises at all times during
the construction of the Work for the purpose of (i) taking measurements and
installing furniture, fixtures and equipment within the Premises,
(ii) performing Separate Tenant Work, as provided in Section 14, and
(iii) inspecting and verifying the progress and performance of the Work. Tenant
shall provide all labor, materials, and expertise necessary for the construction
of any Separate Tenant Work. No such access to or performance of Separate Tenant
Work in the Premises shall accelerate the Commencement Date or require Tenant to
pay any Rent under the Lease unless Tenant also commences the normal conduct of
business in the entirety of the Premises or otherwise if and as expressly
provided in the Lease; provided, however, that if, after the Work is
Substantially Complete, Tenant occupies the Premises for the installation of
Tenant’s furnishings and equipment, Tenant shall pay utility costs actually
incurred as a result of such installation following the date of Substantial
Completion of Work. Any early access pursuant to this Section 15 may not
interfere with the progress of construction of the Work and after notice to
Tenant, if interference is not eliminated, shall constitute Tenant Delay.

 

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16.                               Meetings. To coordinate and facilitate the
timely completion of the Work, commencing upon the execution of the Lease,
Landlord and Tenant shall schedule design/construction meetings not more
frequently than weekly, and not less frequently than once every other week
(commencing not later than as provided in the Schedule, and provided that any of
such meetings may be combined with a meeting of other project personnel,
contractors and/or subcontractors), which shall be attended by appropriate
representatives of Landlord and Tenant and if reasonably necessary, their
contractors and design professionals, to discuss the progress of design,
construction, materials procurement and implementation of the Work. Landlord,
upon Tenant’s (or Tenant’s Construction Representative’s) request, shall arrange
for a meeting between Landlord, Landlord’s Contractors (as applicable) and
Tenant and/or their respective design professionals, contractors and/or their
respective agents (including, but not limited to, Landlord’s Construction
Representative and Tenant’s Construction Representative) with respect to the
Work. Each party shall have reasonable and necessary access to the pertinent
contracts, plans, change orders, field directives, records and data of the other
party, its contractors and agents. Without limiting the foregoing, Landlord
shall, within five (5) business days following Landlord’s (or Landlord’s
Construction Representative’s) receipt of Tenant’s written request therefor,
deliver to Tenant (through Tenant’s Construction Representative) written minutes
of any meeting(s) between Landlord and/or Landlord’s Construction Representative
and Landlord’s Contractors (as applicable) and/or any sub-contractors,
sub-subcontractors or material suppliers, pertaining to the Work, and, if Tenant
so requests, Landlord shall arrange a special meeting between any such
sub-contractors, sub-subcontractors and/or material suppliers and Tenant and its
design professionals, contractors and their respective agents (including, but
not limited to, Tenant’s Construction Representative). Except during meetings or
in connection with an emergency, Tenant agrees to communicate (and to cause
Tenant’s Construction Representative to communicate) with Landlord’s Contractor
and its subcontractors only through Landlord’s Construction Representative (or a
substitute representative with comparable authority), which representative shall
be available on a timely basis so as to act as an effective intermediary.

 

17.                               Dispute Resolution. [NOTE: AS WILL BE SET
FORTH IN ATTACHMENT 4 WHICH SHALL BE AGREED UPON BY LANDLORD AND TENANT, DISPUTE
RESOLUTION PROCEDURE SHOULD BE MANDATORY FOR MATTERS WHERE MORE THAN $25,000 BUT
LESS THAN $100,000 IS AT ISSUE; THE PARTIES MAY AGREE TO SUBMIT DISPUTES OF LESS
THAN $25,000 OR MORE THAN $100,000.00 TO SUCH DISPUTE RESOLUTION PROCEDURE,
HOWEVER IT WILL NOT BE MANDATORY.]

 

(a)                                 Selection of Independent Neutral. Within
thirty (30) calendar days following the Effective Date of the Lease, Landlord
and Tenant shall use reasonable efforts to select an unaffiliated third party
with substantial expertise in the construction of comparable quality office and
laboratory buildings in the Wilmington, Delaware area to serve as an independent
neutral with respect to disputes arising under this Work Letter as set forth on
Attachment 4 attached hereto (the “Independent Neutral”), Only those disputes or
matters set forth on Attachment 4 shall be subject to the provisions of this
Section 17. If Landlord and Tenant do not agree on an individual to serve as the
Independent Neutral within such thirty (30)-day period, Landlord and Tenant
shall, within thirty (30) calendar days thereafter, each select an unaffiliated
third party with substantial expertise in the construction of Class “A” office
buildings in the Wilmington, Delaware area to serve as “Landlord’s Dispute
Representative” and “Tenant’s Dispute

 

A-23

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*** Confidential material redacted and filed separately with the Commission.

 

Representative”, respectively. Within fifteen (15) calendar days after their
selection, Landlord’s Dispute Representative and Tenant’s Dispute Representative
shall jointly select an unaffiliated third party with substantial expertise in
the construction of Class “A” office buildings in the Wilmington, Delaware area
to serve as the Independent Neutral.

 

(b)                                 Duties of the Independent Neutral. The
Independent Neutral shall serve to facilitate the resolution of the disputes and
matters described on Attachment 4. Such disputes arising under this
Exhibit shall be promptly presented to the Independent Neutral. The Independent
Neutral will attempt to resolve disputes with the parties within ten
(10) business days after he/she is presented with the dispute. The parties shall
cooperate fully with the Independent Neutral and shall provide such additional
information, documentation or materials as the Independent Neutral may request.
If the parties do not resolve the dispute amicably within such ten (10) business
day period, the parties are free to exercise any and all rights and remedies as
they may have at law or in equity. The time periods herein are not
jurisdictional and shall be subject to change by the Independent Neutral for
good cause shown, and notwithstanding anything in this Article 17 to the
contrary, Landlord and Tenant shall work cooperatively to resolve disputes in a
manner as to not cause material delays in the Substantial Completion or Final
Completion of the Work.

 

(c)                                  The Independent Neutral shall have the
authority to establish the procedures for resolving the dispute including,
without limitation, if necessary, retaining a consultant to advise on technical
matters.

 

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

 

18.                               Time of Essence. Time is of the essence with
respect to all time periods mentioned in or established in accordance with this
Work Letter, subject to Force Majeure, delay by Landlord and Tenant Delay, if
and as applicable.

 

19.                               Approvals. [NOTE: THE PARTIES AGREE TO MODIFY
THE PROVISIONS OF THIS WORK LETTER IN CONNECTION WITH THE AMENDMENT OF THE LEASE
PURSUANT TO SECTION 1.02(F) OF THE LEASE TO REFINE THE TIME/PROCESS FOR APPROVAL
BY EITHER PARTY, INCLUDING DEEMED APPROVAL IN PARTICULAR CIRCUMSTANCES OR
ASSESSMENT OF TENANT DELAY FOR NO TIMELY RESPONSE. THROUGHOUT WORK LETTER,
APPROVALS BY EITHER PARTY NOT TO BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED. EXCEPTIONS TO BE MADE FOR CRITICAL ITEMS AND DEEMED APPROVAL TO
APPLY IN INSTANCE OF NO RESPONSE ONLY IF ITEM FOR WHICH APPROVAL IS SOUGHT IS
CONSISTENT WITH OVERALL DESIGN AND PRIOR APPROVALS. LANDLORD TO COOPERATE WITH
TENANT IN THE EVENT TENANT REQUESTS ADDITIONAL TIME TO RESPOND.]

 

A-24

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT 1

 

WORK DOCUMENTS

 

[See attached]

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT 2

 

INITIAL BUDGET

 

***

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT 3

 

CONSTRUCTION MILESTONES

 

[TO BE ATTACHED IN CONNECTION WITH THE AMENDMENT
 OF THE LEASE REFERENCED IN SECTION 1.02(F) THEREIN.]

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT 4

 

DISPUTES

 

[TO BE ATTACHED IN CONNECTION WITH THE AMENDMENT
OF THE LEASE REFERENCED IN SECTION 1.02(F) THEREIN]

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT B-2

 

SOFT COST SCHEDULE

 

***

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT C

 

FORM OF LEASE TERM CERTIFICATION

 

THIS LEASE TERM CERTIFICATION is made as of the        day of            ,
200    , by and between                  , a           
              (“Landlord”), and                  , a           
           (“Tenant”), and is intended to be a part of and incorporated into
that certain Lease Agreement, dated as of                  , 200    , by and
between Landlord and Tenant (“Lease”). Capitalized terms not defined herein
shall have the meaning given to them in the Lease. The parties hereto agree
that:

 

(1)                                 The Commencement Date shall
be                   , 200    ; and

 

(2)                                 The Initial Expiration Date shall
be                        , 200     .

 

 

TENANT:

 

 

 

 

 

a

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

An Authorized Signatory

 

 

 

 

 

LANDLORD:

 

 

 

 

 

a

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

An Authorized Signatory

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT D

 

INTENTIONALLY OMITTED

 

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*** Confidential material redacted and filed separately with the Commission.

 

Exhibit E-1

 

Form of Letter of Credit

 

[To be written on Bank letterhead]

 

IRREVOCABLE LETTER OF CREDIT

 

DATE:                                      

 

TO:

 

RE:  Irrevocable Letter of Credit No.               ; U.S. $ 15,000,000.00

 

Gentlemen:

 

We hereby issue our irrevocable, unconditional (EXCEPT AS HEREIN STATED) Letter
of Credit No.            in your favor.

 

We undertake to honor your draft or drafts on us at sight, drawn from time to
time, in an amount or amounts not exceeding, in the aggregate, U.S.
$15,000,000.00, when made by a sight draft in the form of Attachment A and
accompanied by a statement on your letterhead stating either:

 

“WE DRAW IN THE AMOUNT OF               DUE TO AN EVENT OF DEFAULT THAT HAS
OCCURRED AND ALL APPLICABLE NOTICE AND CURE PERIODS HAVE EXPIRED WITHOUT CURE
AND WE ARE ENTITLED TO DRAW SUCH AMOUNT PURSUANT TO THE TERMS OF THE LEASE
AGREEMENT BETWEEN AUGUSTINE LAND I., L.P. AND INCYTE CORPORATION,
DATED             , 2013.”

 

OR

 

“THE LETTER OF CREDIT WILL EXPIRE WITHIN SIXTY (60) DAYS AND NO RENEWAL OR
SUBSTITUTE LETTER OF CREDIT HAS BEEN ISSUED TO US PURSUANT TO THE TERMS OF
SECTION 8 OF EXHIBIT E-2 OF THE LEASE AGREEMENT BETWEEN AUGUSTINE LAND I, L.P.
AND INCYTE CORPORATION, DATED         , 2013, AND WE ARE ENTITLED TO DRAW UPON
THE LETTER OF CREDIT PURSUANT TO THE TERMS OF SUCH LEASE.”

 

OR

 

“WE DRAW IN THE AMOUNT OF          DUE TO A FAILURE TO AMEND OR REPLACE THE LC
TO REFLECT A SUSPENSION IN THE REDUCTION SCHEDULE AND WE ARE ENTITLED TO DRAW
SUCH AMOUNT PURSUANT TO THE TERMS OF THE LEASE AGREEMENT BETWEEN AUGUSTINE LAND
I., L.P. AND INCYTE CORPORATION, DATED          , 2013.”

 

Partial Drawings are Permitted.

 

We agree that we shall have no duty or right to inquire as to the basis upon
which you have determined that the amount is due and owing or have determined to
present to us any draft under this Letter of Credit.

 

DRAFTS AND DOCUMENTS MUST BE PRESENTED AT OUR OFFICE, ADDRESSED: BANK OF
AMERICA, N.A., 1 FLEET WAY, SCRANTON, PA 18507-1999, ATTN: GLOBAL TRADE
OPERATIONS - STANDBY DEPARTMENT,

 

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*** Confidential material redacted and filed separately with the Commission.

 

VIA HAND DELIVERY, NATIONALLY RECOGNIZED OVERNIGHT COURIER SERVICE, OR BY
FACSIMILE TO 800-755-8743, (ALL FACSIMILE PRESENTATIONS MUST BE FOLLOWED BY A
TELEPHONE CALL TO 800-370-7519 TO CONFIRM RECEIPT) ANY SUCH FACSIMILE
PRESENTATION SHALL NOT REQUIRE THE PRESENTATION OF THE ORIGINAL DOCUMENTATION AT
OUR OFFICE.

 

IF A DRAWING IS MADE BY YOU HEREUNDER AT THE ABOVE ADDRESS AT OR PRIOR TO
10:00 A.M., SCRANTON, PENNSYLVANIA TIME ON A BUSINESS DAY, PROVIDED THAT SUCH
DRAWINGS AND THE DOCUMENTS AND OTHER ITEMS PRESENTED IN CONNECTION THEREWITH
CONFORM TO THE TERMS AND CONDITIONS HEREOF, PAYMENT WILL BE MADE TO YOU OF THE
AMOUNT SPECIFIED, IN IMMEDIATELY AVAILABLE FUNDS, NOT LATER THAN THE CLOSE OF
BUSINESS, SCRANTON, PENNSYLVANIA TIME, ON THE NEXT BUSINESS DAY AFTER
PRESENTATION OF COMPLYING DOCUMENTS. IF A DRAWING IS MADE BY YOU HEREUNDER AT
THE ABOVE ADDRESS AFTER 10:00 A.M., SCRANTON, PENNSYLVANIA TIME ON A BUSINESS
DAY, AND PROVIDED THAT SUCH DRAWING AND THE DOCUMENTS AND OTHER ITEMS PRESENTED
IN CONNECTION THEREWITH CONFORM TO THE TERMS AND CONDITIONS HEREOF, PAYMENT WILL
BE MADE TO YOU OF THE AMOUNT SPECIFIED, IN IMMEDIATELY AVAILABLE FUNDS, NOT
LATER THAN THE CLOSE OF BUSINESS ON THE SECOND SUCCEEDING BUSINESS DAY AFTER
PRESENTATION OF COMPLYING DOCUMENTS. AS USED HEREIN, “BUSINESS DAY” SHALL MEAN A
DAY ON WHICH BANKS LOCATED IN WILMINGTON, DELAWARE, ARE NOT AUTHORIZED OR
REQUIRED BY LAW TO CLOSE.

 

This Letter of Credit is valid through and including                          ,
20     , provided, however, that this Letter of Credit will be automatically
extended without amendment for successive periods of one (1) year each from the
present or any future expiration date hereof, unless at least sixty (60) days
prior to any such expiration date we elect not to extend this Letter of Credit
and give you notice of such election, which notice shall be deemed given when
sent by us. Any such notice shall be in writing and shall be delivered by
overnight courier service, or by certified mail (return receipt requested), you,
Attn:           (or such other address for any such notices which you may
hereafter specify in a written notice delivered to us). If the expiration date
is a business day, the expiration date shall automatically extend to the next
business day.

 

THE AMOUNT AVAILABLE TO BE DRAWN HEREUNDER SHALL BE AUTOMATICALLY REDUCED,
WITHOUT AMENDMENT, ACCORDING TO THE FOLLOWING SCHEDULE:

 

***

 

HOWEVER, IN THE EVENT THAT A DRAWING(S) EFFECTED HEREUNDER SHOULD, AT THE TIME
OF SUCH DRAWING, REDUCE THE ACTUAL AVAILABLE AMOUNT HEREUNDER BELOW THAT AMOUNT
AVAILABLE AS SHOWN IN THE ABOVE SCHEDULE, THEN THE AMOUNT AVAILABLE HEREUNDER
SHALL REMAIN AT THE THEN CURRENT AVAILABLE AMOUNT, IRRESPECTIVE OF THE ABOVE
SCHEDULE, UNTIL SUCH TIME THAT THE THEN CURRENT AVAILABLE AMOUNT SHALL EXCEED
THE CORRESPONDING AMOUNT PER THE ABOVE SCHEDULE.

 

IF REQUESTED BY YOU, PAYMENT UNDER THIS LETTER OF CREDIT SHALL BE MADE BY WIRE
TRANSFER OF FEDERAL FUNDS TO YOUR ACCOUNT WITH ANY BANK THAT IS A MEMBER OF THE
FEDERAL RESERVE SYSTEM.

 

THIS LETTER OF CREDIT IS TRANSFERABLE IN FULL AND NOT IN PART. ANY TRANSFER MADE
HEREUNDER MUST CONFORM STRICTLY TO THE TERMS HEREOF AND TO THE CONDITIONS OF
RULE 6 OF THE INTERNATIONAL STANDBY PRACTICES (ISP98) FIXED BY THE INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 590. SHOULD YOU WISH TO EFFECT A TRANSFER
UNDER THIS CREDIT, SUCH TRANSFER WILL BE SUBJECT TO THE RETURN TO US OF THE
ORIGINAL CREDIT INSTRUMENT, ACCOMPANIED BY OUR FORM OF TRANSFER, PROPERLY
COMPLETED AND SIGNED BY AN AUTHORIZED SIGNATORY OF YOUR FIRM, BEARING YOUR
BANKERS STAMP AND SIGNATURE AUTHENTICATION AND SUBJECT TO YOUR PAYMENT OF OUR
CUSTOMARY TRANSFER CHARGE OF USD 500. SUCH TRANSFER FORM IS ATTACHED HERETO AS
ATTACHMENT B.

 

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*** Confidential material redacted and filed separately with the Commission.

 

IN THE EVENT THAT THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT IS LOST, STOLEN,
MUTILATED, OR OTHERWISE DESTROYED, WE HEREBY AGREE TO ISSUE A CERTIFIED TRUE
COPY OF THE ORIGINAL HEREOF UPON RECEIPT OF A WRITTEN INDEMNIFICATION
FORM ACCEPTABLE TO US (SUCH FORM IS ATTACHED HERETO AS ATTACHMENT C).

 

THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE LAWS OF THE STATE OF
DELAWARE AND THE INTERNATIONAL STANDBY PRACTICES (ISP98), THE INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 590. AND, IN THE EVENT OF ANY CONFLICT, THE
LAWS OF THE STATE OF DELAWARE WILL CONTROL.

 

Very truly yours,

 

 

 

[Bank Name]

 

By:

 

Vice President, duly authorized

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT A

 

SIGHT DRAFT

 

 

DATE:

 

 

 

 

 

TO:

[Bank Name]

 

 

[Address]

 

 

 

PAY TO THE ORDER
OF                                                                       $    [Numerical]

                     [Written]                             Dollars.

 

 

Drawn under Letter of Credit No.                          
dated                       , 20    .

 

 

 

By:

 

 

 

Authorized Signatory

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT B

 

TRANSFER FORM

 

                                  , 200  

 

Bank of America N.A.

1 Fleet Way,

Scranton, PA 18507

Mail Code PA6-580-02-30

Attn: Trade Services - Standby Unit

 

Re:        Irrevocable Standby Letter of Credit No.                 

 

We request you to transfer all of our rights as beneficiary under the Letter of
Credit referenced above to the transferee, named below:

 

 

 

Name of Transferee

 

 

Address

 

By this transfer all our rights as the transferor, including all rights to make
drawings under the Letter of Credit, go to the transferee. The transferee shall
have sole rights as beneficiary, whether existing now or in the future,
including sole rights to agree to any amendments, including increases or
extensions or other changes. All amendments will be sent directly to the
transferee without the necessity of consent by or notice to us.

 

We enclose the original letter of credit and any amendments. Please indicate
your acceptance of our request for the transfer by endorsing the letter of
credit and sending it to the transferee with your customary notice of transfer.

 

For your transfer fee of $500.00

 

*               Enclosed is our check for $

 

*               You may debit my/our Account No.

 

We also agree to pay you on demand any expenses which may be incurred by you in
connection with this transfer.

 

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*** Confidential material redacted and filed separately with the Commission.

 

The signature and title at the right conform with those shown in our files as
authorized to sign for the beneficiary. Policies governing signature
authorization as required for withdrawals from customer accounts shall also be
applied to the authorization of signatures on this form. The authorization of
the Beneficiary’s signature and title on this form also acts to certify that the
authorizing financial institution (i) is regulated by a U.S. federal banking
agency; (ii) has implemented anti-money laundering policies and procedures that
comply with applicable requirements of law, including a Customer Identification
Program (CIP) in accordance with Section 326 of the USA PATRIOT Act; (iii) has
approved the Beneficiary under its anti-money laundering compliance program; and
(iv) acknowledges that Bank of America, N.A. is relying on the foregoing
certifications pursuant to 31 C.F.R. Section 103.121 (b)(6).”

 

 

 

 

 

 

 

 

 

 

 

NAME OF TRANSFEROR

 

 

 

NAME OF AUTHORIZED SIGNER AND TITLE

 

 

 

 

 

 

 

 

 

AUTHORIZED SIGNATURE

NAME OF BANK

 

 

 

 

 

 

 

 

AUTHORIZED SIGNATURE AND TITLE

 

 

 

 

 

 

 

 

PHONE NUMBER

 

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

ATTACHMENT C

 

INDEMNIFICATION FORM

 

(On Beneficiary Letterhead)

 

INDEMNITY AGREEMENT

 

The undersigned, a duly authorized officer of                 (“Beneficiary”).
certifies that a certain letter of credit no.              issued in favor of
Beneficiary for U.S. $                           (                   and 00/100
U.S. Dollars) (“Letter of Credit”) by Bank of America. N.A., Scranton,
Pennsylvania (“Bank”) has been lost or destroyed and cannot be found. The
undersigned hereby requests the [cancellation] [A Certified True Copy] of the
Letter of Credit.

 

On behalf of Beneficiary. I represent and warrant that:

 

(1)           The original Letter of Credit has not been negotiated, paid or
endorsed nor has it (or the proceeds therefrom) been transferred or assigned to
anyone;

 

(2)           Beneficiary has not presented documents under the Letter of Credit
to any office of Bank or to any other bank; and

 

(3)           The undersigned is duly authorized to execute and deliver this
Agreement on Beneficiary’s behalf.

 

In case the original Letter of Credit shall hereinafter be presented for
payment, the undersigned fully understands that the non-payment or payment
thereof, whether enforced or voluntary, may involve the Bank in litigation or
other expense.

 

Consequently, in consideration of the Bank complying with this request,
Beneficiary, including its successors and assigns, hereby agrees to indemnify
and hold harmless Bank and its agents for any and all actions, suits, judgments,
costs, damages, losses, charges, liability, attorneys’ fees and other expenses
which Bank may incur, sustain or be liable for by reason of (i) refusing payment
of the original Letter of Credit, whether groundless or otherwise, or (ii) any
representation or warranty in this Agreement being incorrect or incomplete in
any material respect when made or deemed to be made by Beneficiary.

 

It is further agreed to return or cause to be returned to Bank the original
Letter of Credit when and if it is found.

 

 

This            day of               , 20  .

 

 

Signature

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

SUBSCRIBED AND SWORN TO BEFORE ME

 

This              day of                  , 20  .

 

 

 

NOTARY PUBLIC

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT E-2

 

LETTER OF CREDIT TERMS

 

Capitalized terms used herein but not defined herein shall have the meanings
ascribed such terms in the Lease. In the event of any conflict or inconsistency
between the Lease and this Exhibit, the Lease shall govern and control.

 

1.                                      The LC issuer will be required to have a
minimum credit rating equal to A- or better by S&P or A3 or better by Moody’s;
provided, for the purposes of determining whether the minimum rating requirement
has been met, the higher of the rating by S&P and Moody’s will be used. If the
issuer of the LC should fall below the minimum rating requirement, Tenant will
have ten (10) Business Days after notice from Landlord to replace the LC with a
replacement LC from an issuer that meets the minimum credit rating.

 

2.                                      The LC shall be deposited with Landlord
on the date of Landlord’s Loan Closing, provided Landlord’s lender has delivered
written notice to Tenant of such Loan Closing at least five (5) business days
prior thereto.

 

3.                                      Landlord may draw upon the LC in
connection with (i) an Event of Default in the payment of Rent or an Event of
Default which may be cured with the payment of money (for the avoidance of
doubt, including Tenant’s failure to pay the Tenant Funded Amount as and when
due), notwithstanding any voluntary or involuntary bankruptcy of Tenant, and at
all times in the amount that Landlord estimates, in good faith, to be the amount
required to compensate or reimburse Landlord, as the case may be, for the
payment of Rent in arrears and other actual, documented expense incurred by
Landlord on account of such Event of Default and notwithstanding any limitation
on Landlord’s damages under the Bankruptcy Code; provided however, in no event
shall Landlord be entitled to draw on the LC until Landlord has delivered
further notice of the occurrence and continuance of such Event of Default to
Tenant and Tenant has failed to cure such Event of Default within three (3) days
after receipt of such notice; provided such additional notice shall not be
required for an Event of Default resulting from a failure to pay Rent;
(ii) subject to the provisions of Section 8 below, in the event the LC will
expire within sixty (60) days of the then current expiration date because the LC
issuer has notified Landlord that the LC will not renew for another year, and
Tenant has not delivered to Landlord a substitute LC that satisfies all
requirements of the LC, or (iii) as provided in Paragraph 11 below. Following
any draw on the LC pursuant to clause (i) in this paragraph, Tenant shall
restore the LC to its then required amount pursuant to the terms hereof.
Following any draw on the LC under clause (ii) above, Landlord shall hold such
cash to be used for the same purposes as the LC. Landlord shall have no
liability to Tenant for interest earned on any such deposit, and any such cash
held as security shall be held by M&T Bank or an institution of equal or greater
assets than the assets of M&T Bank at the Effective Date. Upon Landlord’s
written request, Tenant shall promptly obtain and have issued to Landlord a
substitute LC in lieu of such cash and Landlord shall simultaneously return such
cash to Tenant.

 

4.                                      The LC shall provide that it is payable,
in full or in part, by multiple draws, at sight, may be drawn in Wilmington,
Delaware (or other location acceptable to Landlord), may be drawn by fax or
overnight delivery transmittal and may contain such other terms as are
acceptable to Landlord.

 

5.                                      Use by Landlord of the LC to satisfy any
of Tenant’s obligations hereunder shall not constitute a waiver of Tenant’s
default with respect to such nonperformance for which amounts are expended nor
prevent Landlord from exercising any other rights or remedies available to
Landlord. The delivery of the LC is a current and absolute payment by Tenant to
Landlord, and the LC is and shall remain the sole and absolute property of
Landlord and may be pledged or assigned as security for a loan to Landlord for
which the rents and leases of the Building serve as collateral, subject only to
Tenant’s right to have the LC (or the balance thereof) returned to Tenant in
accordance with and subject to the terms of this Lease. Landlord may return the
LC to the original Tenant regardless of one or more assignments or transfers of
Tenant’s interest in the Lease unless Landlord is otherwise directed in writing
by the original Tenant. Within sixty (60) days following the expiration or
sooner termination of the Lease (the “LC Term End Date”), Landlord shall return
the LC, or the remaining balance thereof, or any cash Landlord is holding in
lieu thereof, to Tenant. Upon the return of the LC, or the remaining balance
thereof, or any cash Landlord is holding in lieu thereof, Landlord shall be
completely relieved of liability pursuant to Article 3 of the

 

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*** Confidential material redacted and filed separately with the Commission.

 

Lease (but not with respect to any unrelated items in the Lease).
Notwithstanding the foregoing, in the event Tenant exercises its termination
right pursuant to Section 40 of the Lease, the LC Term End Date shall be the
date that is one hundred and ten (110) days after such termination, and Landlord
shall return the LC or the remaining balance thereof or any cash Landlord is
holding in lieu thereof on such date; provided, however, on the effective date
of such termination, the LC amount shall be reduced to the amount of the
Termination Payment. If Landlord sells or otherwise transfers Landlord’s rights
or interest under this Lease, Landlord shall deliver the LC, or the remaining
balance thereof, to the transferee, with written notice of such transfer to
Tenant, whereupon Landlord shall be released from any further liability to
Tenant with respect to the LC.

 

6.                                      The LC shall be issued for a term of not
less than one (1) year from the date of issuance and shall be deemed
automatically extended without an amendment for a one (1) year period at each
anniversary date unless the LC issuer has notified Landlord that it will not
allow the extension of the LC for an additional year, and shall be so extended
for at least thirty (30) days following the expiration or sooner termination of
the Lease.

 

7.                                      Within thirty (30) days after the end of
the Term, and provided Tenant has fully vacated the Premises, Landlord shall
complete a final inspection of the Premises to determine whether the Premises
are then substantially in the condition required under the Lease. Following any
such final inspection, the balance of the LC shall be reduced to the amount
reasonably estimated by Landlord to be necessary to restore the Premises to such
condition.

 

8.                                      If Landlord receives a notice that the
LC is not to be renewed during any period prior to the LC Term End Date, or, if
the LC will expire prior to the LC Term End Date, Tenant will have ten
(10) business days after notice from Landlord (which notice shall not be given
prior to the date that is sixty (60) days prior to the date such LC will not
renew) to replace the LC with a replacement LC in the required terms from an
issuer that meets the minimum credit rating. In the event that Tenant does not
replace the LC within such ten (10) day period, Landlord shall have the right to
draw upon the LC, in which event, Landlord shall hold such cash under the Lease,
to be used for the same purposes as the LC; provided, however, that if Tenant
subsequently replaces the LC, then Landlord shall return such cash so held.

 

9.                                      The initial amount of the LC shall be
$15 million. Provided there is no Event of Default then outstanding, the maximum
available amount of the LC that Landlord may draw shall automatically reduce
from time to time, with the maximum amount(s) available for
presentation(s) during the period(s) as specified in Attachment 1 (attached
hereto), subject to interim quarterly adjustments pursuant to Paragraph 10
below.

 

10.                               Notwithstanding the foregoing, but provided
there is no Event of Default then outstanding, the scheduled quarterly maximum
amount that Landlord may draw (the “Reduced Maximum Draw Amount”) shall be
deemed modified and amended, upon:

 

A.                                    If Tenant gives Landlord written notice,
***, together with ***, that it ***, and a *** for *** (based on ***), the ***
of the *** shall be *** by ***; provided, however, that the *** under the *** at
***, subject to subparagraph (B) below.

 

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*** Confidential material redacted and filed separately with the Commission.

 

B.                                    If Tenant gives Landlord written notice,
***, together with ***, that ***, and a *** for ***, the *** be *** such time
***.

 

C.                                    If Tenant gives Landlord written notice,
***, together with ***, that *** based on ***, all *** of the *** shall be ***
as ***, at *** the *** with the *** from the ***.

 

11.                               In the event that any of the events described
in Section 10(A), (B) or (C) above occur, Landlord and Tenant shall cooperate
and work together in good faith to promptly amend or replace the LC to reflect
any changes to the reduction schedule set forth therein consistent with the
provisions of this Exhibit. In the event that scheduled reductions of the LC are
to be suspended in any given quarter pursuant to the provisions of
Section 10(C) above, and Tenant has not, prior to the next scheduled reduction
pursuant to the then outstanding LC, amended or replaced the LC to reflect the
suspension in reductions, Landlord, as its sole remedy for such failure to amend
or replace, but without further notice and cure periods, shall be entitled to
draw upon the LC in an amount equal to the next automatic reduction pursuant to
the terms of the then existing LC, and shall hold such cash to be used for the
same purposes as the LC. Landlord shall have no liability to Tenant for interest
earned on any such deposit, and any such cash held as security shall be held by
M&T Bank or an institution of equal or greater assets than the assets of M&T
Bank at the Effective Date.

 

12.                               Any changes in the reduction schedule provided
for in Paragraph 10 shall become effective in the first calendar quarter
following the quarter in which Tenant has given the required notice that the
financial conditions occurred which effect such reduction.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT F

 

HVAC SPECIFICATIONS

 

1.1

INDOOR CONDITIONS

 

 

 

A.

Office/Conference/Common spaces

 

 

1.

Cooling Setpoint:

75°F dbt, no RH control (83°F setback)

 

 

2.

Heating Setpoint:

70°F dbt, no RH control (63°F setback)

 

 

3.

Deadband:

5°F (below cooling or above heating setpoint)

 

 

4.

Pressurization:

Neutral to Positive (airflow out of space)

 

 

 

 

 

 

B.

Laboratory/Lab Support spaces

 

 

1.

Cooling Setpoint:

72°F dbt, 30% RH minimum

 

 

2.

Heating Setpoint:

70°F dbt, 30% RH minimum

 

 

3.

Deadband:

5°F (below cooling or above heating setpoint)

 

 

4.

Pressurization:

Primarily negative (program dependent)

 

 

 

 

 

 

C.

Core Tele/Data and Electrical Rooms

 

 

1.

Cooling:

85°F maximum

 

 

2.

Heating:

55°F minimum (non-condensing)

 

 

3.

Deadband:5°F

 

 

 

4.

Pressurization:

Neutral to Positive

 

 

 

 

 

 

D.

Mechanical/Electrical Equipment Rooms

 

 

1.

Cooling:

100°F (10°F above outdoor design ambient)

 

 

2.

Heating:

60°F dbt minimum (non-condensing)

 

 

3.

Pressurization:

Neutral to Negative

 

 

 

 

 

1.2

VENTILATION

 

 

 

 

 

 

A.

IMC/ASHRAE Outdoor Air Requirements

 

 

1.

Occupied Spaces:

5 cfm/person plus 0.06 cfm/sf

 

 

2.

*** Rooms:

*** ac/h minimum supply

 

 

 

 

 

 

B.

Exhaust air rate:

 

 

1.

Public Restrooms:

75 cfm/water closet or 10 ac/h minimum

 

 

2.

Laboratories:

6 ac/h minimum (occupied mode)

 

 

3.

*** Rooms:

*** ac/h minimum supply

 

 

4.

Other areas:

per ASHRAE and IMC requirements

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT G

 

JANITORIAL SERVICE SPECIFICATIONS

 

Scope of Janitorial Services to be provided by Landlord:

 

DAILY:

 

Suite: Five (5) days per week, Monday through Friday evenings

1.                              Empty waste baskets

2.                              Spot vacuum carpeted areas as needed

3.                              Sweep hard floors (tile, wood, etc.)

4.                              Spot clean carpets as needed

5.                              Dust the following cleared surfaces:

·desks

·chairs

·file cabinets

·tables

·telephones

·ledges and shelves

6.                              Wipe clean the following cleared surfaces:

·countertops

·interior glass (partitions, etc.)

·conference tables

7.                              Wash, clean and sanitize water fountains and/or
coolers

8.                              Turn out lights and lock doors

Lavatories (suites and common areas):

1.                              Sweep and wet mop tile floors

2.                              Clean mirrors

3.                              Wipe clean and sanitize sink basins, bowls and
urinals

4.                              Remove trash and sanitary waste

5.                              Restock hand soap and paper products

Common Areas:

1.                              Remove spots from wood and stainless walls,
doors and hall plate of elevators, Vacuum carpet.

2.                              Spot clean carpets in common areas.

 

WEEKLY:

 

1.                              Vacuum entire suite, including corner vacuuming

2.                              Damp mop vinyl, marble and tile floors as needed

3.                              Sweep tile floors with chemically treated dry
mop.

Common Areas:

1.                              Sweep and wet mop fire tower stairwells

 

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*** Confidential material redacted and filed separately with the Commission.

 

MONTHLY:

 

Suite:

1.                              Machine clean hard surface floors, including
ceramic, quarry and marble tiles

Common Areas:

1.                              Dust blinds in common areas

2.                              Clean carpet in common areas

 

QUARTERLY:

 

Suite:

1.                              Dust blinds in suites

 

ANNUALLY:

 

Suite:

1.                              Wash all interior and exterior windows of
building

Common Areas:

1.                              Wash common area walls including wall coverings,
paint and marble

2.                              Wash common area ceiling lights.

 

General Notes:

 

1.                                              Upon cleaning each office, all
lights will be turned off and all doors locked, unless otherwise notified. Any
exceptions requested by Tenant must be in writing.

2.                                              Furniture rearrangements and
moving of furniture, furnishings and equipment incident to occupancy or vacating
will be responsibility of Tenant.

3.                                              Tenant may from time to time
delete or add to the services described above.

4.                                              Additional services, such as
re-supply of consumables (soap, paper supplies, etc.) and equipment cleaning,
can be provided on a reimbursable basis (subject to the provisions of the
Lease).

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT H

 

[TO BE DELIVERED AT LOAN CLOSING]

GUARANTY OF OBLIGATIONS

 

THIS LEASE GUARANTY (“Guaranty”) is made this           day of
                    , 2013, by LOUIS J. CAPANO, JR., an individual, having an
office at 105 Foulk Road, Wilmington, DE 19803 (the “Guarantor”) in favor of
INCYTE CORPORATION, a Delaware corporation, having an office at Experimental
Station (E336/226), Route 141 & Henry Clay Road, Wilmington, Delaware (the
“Tenant”).

 

W I T N E S S E T H :

 

WHEREAS, Tenant is executing and delivering to AUGUSTINE LAND I, L.P., a
Delaware limited partnership (the “Landlord”), a Lease Agreement to be effective
of even date and delivered contemporaneously herewith (the “Lease”), pursuant to
which, among other things, Landlord will improve and lease to Tenant certain
premises located at 1801 Augustine Cut-Off, Wilmington, Delaware, as more
particularly set forth in the Lease;

 

WHEREAS, Tenant is unwilling to enter into the Lease unless it receives a
guaranty by Guarantor of certain of the obligations of Landlord under the Lease,
as hereinafter set forth; and

 

WHEREAS, capitalized terms that are used in this Guaranty that are not defined
in this Guaranty shall have the meanings ascribed to such terms in the Lease.

 

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
to induce Tenant to enter into the Lease as aforesaid, Guarantor hereby
covenants and agrees as follows:

 

1.                                      Guarantor hereby unconditionally,
absolutely and irrevocably guarantees to Tenant, and shall be surety for, the
prompt payment when due and the full and faithful performance and observance by
Landlord of the following: (i) the completion of the Work, including any punch
list items, as provided in the Work Letter, and Landlord’s payment obligations
in connection therewith, (ii) the return by Landlord of the Tenant Funded Amount
as required by the terms of the Lease, as now or hereafter amended, and
(iii) Landlord’s warranty of the Work pursuant to Section 12(b) of the Work
Letter for a period of nine (9) months following Substantial Completion of the
Premises with respect to HVAC systems and equipment and ninety (90) days
following Substantial Completion of the Premises with respect to warranty of all
other portions of the Work, in each case in accordance with the terms of the
Lease (all such obligations being herein collectively referred to as the
“Obligations”) and agrees

 

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*** Confidential material redacted and filed separately with the Commission.

 

to pay on demand any and all documented, actual expenses (including reasonable
counsel fees and disbursements) incurred by Tenant in enforcing any rights under
this Guaranty.

 

2.                                      This Guaranty shall be effective as of
the date hereof, through and including the date that the Obligations expire as
set forth in Section 1; provided, however, that this Guaranty shall remain
effective with respect to any claim(s) made by Tenant to Landlord prior to the
expiration of such applicable claim period until the resolution of such claim.

 

3.                                      Guarantor hereby waives: (a) notice of
acceptance of this Guaranty; (b) presentment and demand for any payments due the
Tenant; and (c) protest and notice of dishonor or default to Guarantor or to any
other person or party with respect to the terms of the Lease or any portion
thereof.

 

4.                                      This is a guaranty of performance and
payment and not of collection, and Guarantor waives any right to require that
any action be brought against the Landlord or to require that resort be had to
any credit on the books of the Landlord in favor of Guarantor or any other
person or party.

 

5.                                      No act of the Tenant, or the successors
or assigns of the Tenant, consisting of a waiver of any of the terms or
conditions of the Lease, or the giving of any consent to any manner or thing
relating to the Lease or the granting of any indulgences or extensions of time
to the Landlord, shall have the effect of releasing the obligations of Guarantor
hereunder.

 

6.                                      Guarantor guarantees that the
Obligations will be paid, performed and observed, as applicable, by Landlord in
accordance with the terms of the Lease, subject to any law, statute, rule,
regulations, decree or order now or hereafter in effect in any jurisdiction
affecting or purporting to affect in any manner any of such terms or the rights
or remedies of Tenant with respect thereto. The liability of Guarantor under
this Guaranty shall be absolute and unconditional, from time to time after
default by Landlord in performance of the Obligations, shall not be affected,
released, terminated, discharged or impaired, in whole or in part, by, and
Tenant may proceed to exercise any right or remedy hereunder, irrespective of:

 

(i)                                     any amendment or modification of the
terms of the Lease made by Landlord for which Guarantor’s consent was not
obtained;

 

(ii)                                  any change in the time, manner or place of
payment, performance or observance of all or any of the Obligations or any
extensions of time for payment, performance or observance of the terms of the
Lease on the part of Landlord to be paid, performed or observed, as applicable,
as agreed to by Landlord;

 

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*** Confidential material redacted and filed separately with the Commission.

 

(iii)                               any bankruptcy, insolvency, assignment for
the benefit of creditors, receivership, trusteeship or dissolution of or
affecting Landlord;

 

(iv)                             any assignment or successive assignments of the
Lease by Landlord; or

 

(v)                                 except as expressly required hereunder or
under the Lease, the failure to give Guarantor any notices whatsoever;

 

all from time to time after any default by Landlord under the Lease in
Landlord’s performance of the Obligations under the terms and conditions of the
Lease and with or without further notice to Guarantor. This Guaranty shall
continue to be effective or be reinstated, as the case may be, and the rights of
Tenant hereunder shall continue with respect to, any Obligation (or portion
thereof) at any time paid by Landlord which shall thereafter be required to be
restored or returned by Tenant upon the insolvency, bankruptcy or reorganization
of Landlord, or for any other reason, all as though such Obligation (or portion
thereof) had not been so paid or applied.

 

7.                                      Until all the Obligations are fully and
indefeasibly paid, Guarantor: (a) shall have no right of subrogation against the
Landlord by reason of any payments or acts of performance by Guarantor, in
compliance with the obligations of Guarantor hereunder; (b) waives any right to
enforce any remedy which Guarantor now or hereafter shall have against Landlord
by reason of any one or more payment or acts of performance in compliance with
the obligations of Guarantor hereunder; and (c) subordinates any liability or
indebtedness of the Landlord now or hereafter held by Guarantor to the
obligations of the Landlord to the Tenant under the Lease.

 

8.                                      Each notice and other communication
under this Guaranty shall be in writing. Each notice, communication or document
to be delivered to any party under this Guaranty shall be sent by hand delivery
or facsimile transmission (promptly confirmed by courier) to it at the address,
and marked for the attention of the person (if any), from time to time
designated by such party for the purpose of this Guaranty. The initial address
and person (if any) so designated by each party are set out opposite such
party’s signature to this Guaranty. Any communication or document shall be
deemed to be received, if sent by facsimile transmission, when the recipient
confirms legible transmission thereof or, if sent by hand delivery or by
courier, when delivered at the address specified by the addressee for purposes
of this Guaranty.

 

9.                                      All payments hereunder shall be made in
U.S. dollars in same day funds.

 

10.                               Each reference herein to the Tenant shall be
deemed to include its successors and assigns, in whose favor the provisions of
this Guaranty shall also inure and who shall be bound by the provisions of this
Guaranty. Each reference herein to Guarantor shall be deemed

 

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*** Confidential material redacted and filed separately with the Commission.

 

to include the heirs, administrators, executors, personal representatives and
successors of Guarantor, in whose favor the provisions of this Guaranty shall
also inure and all of whom shall be bound by the provisions of this Guaranty.

 

11.                               No delay on the part of the Tenant in
exercising any rights hereunder or failure to exercise the same shall operate as
a waiver of such rights; no notice to or demand on Guarantor shall be deemed to
be a waiver of the obligation of Guarantor; nor in any event shall any
modification or waiver of the provisions of this Guaranty be effective unless in
writing nor shall any such waiver be applicable except in the specific instance
for which given.

 

12.                               In the event of any failure of the Landlord to
pay or perform any Obligation, the Tenant shall have the right to proceed
directly and immediately against Guarantor and such proceedings are not to be
deemed an irrevocable election of remedies.

 

13.                               This Guaranty is, and shall be deemed to be, a
contract entered into under and pursuant to the laws of the State of Delaware
and shall be in all respects governed, construed, applied and enforced in
accordance with the laws of said State.

 

14.                               This instrument may not be changed, modified,
discharged or terminated orally or in any manner other than by an agreement in
writing signed by Guarantor and the Tenant.

 

15.                               At the request of any potential assignee of
the Tenant’s interest in the Lease, Guarantor shall execute and deliver to the
Tenant a certification, in form reasonably acceptable to Guarantor and Tenant,
reaffirming that this Guaranty remains in full force and effect without
exception, to the extent the same then remains in full force and effect.

 

16.                               If any term or provision of this Guaranty or
the application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Guaranty, or the application of
such term or provision to persons or circumstances other than those to which it
is held invalid or unenforceable, shall not be affected thereby and all other
terms and provisions of this Guaranty shall be valid and enforced to the fullest
extent permitted by law.

 

17.                               Any suit, action, claim or proceeding seeking
to enforce any provision of or based on any matter arising out of or in
connection with this Guaranty shall be brought exclusively in any state or
federal court located in the State of Delaware and Guarantor and Tenant hereby
irrevocably submit and consent to the exclusive jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
and defenses which it may now have or hereafter may have based on forum, venue,
or personal or subject matter jurisdiction as they may relate to any suit,
action or proceeding in any such court. Guarantor hereby acknowledges

 

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*** Confidential material redacted and filed separately with the Commission.

 

and agrees that service of process mailed to Guarantor at the address first
above stated shall be deemed in every respect effective service of process upon
Guarantor in any such suit, action, claim or proceeding in the State of
Delaware.  Service of process to Tenant shall be mailed to Tenant at Tenant’s
Notice Address pursuant to Basic Lease Provision C of the Lease.

 

[SIGNATURE PAGE FOLLOWS]

 

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*** Confidential material redacted and filed separately with the Commission.

 

IN WITNESS WHEREOF, Guarantor has hereunto executed and delivered this Guaranty
as of the date first above written.

 

 

Address:

 

LOUIS J. CAPANO, JR., an individual

 

 

 

 

 

 

 

 

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

STATE OF

 

)

 

 

) ss.

COUNTY OF

 

)

 

BE IT REMEMBERED, that on this                  day of               ,
201                     before me, the subscriber, personally appeared LOUIS J.
CAPANO, JR., an individual, who, being by me duly sworn on his oath, deposes and
makes proof to my satisfaction of his identity that the within instrument was
signed and delivered by him as and for his voluntary act and deed.

 

 

 

 

 

Notary Public

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT I

 

REPORTS

 

Environmental Site Assessment prepared by Watershed Eco LLC dated November 27,
2012, together with all appendices and attachments thereto and materials
referred to therein.

 

Letter, dated April 30, 2009, from LCS Inc. Environmental and Real Estate
Consultants to Mr. Rory Hertzog, M&T Bank.

 

Letter, dated October 1, 2002, from the State of Delaware Department of Natural
Resources and Environmental Control, Division of Air & Waste Management to
Ms. Karen Burlingame, Global Environmental Services, D/110F, Goodyear Tire &
Rubber Company.

 

Letter, dated January 26, 1995, from the State of Delaware Department of Natural
Resources and Environmental Control, Division of Air & Waste Management to
Mr. James Litterelle, J & M Litterelle, Inc.

 

Letter, dated May 6, 1993, from the State of Delaware Department of Natural
Resources and Environmental Control, Division of Air & Waste Management to
Robert Kozul, Manager, Engineering, John Wannamaker.

 

Letter, dated April 20, 1997, from ConTech Services, Inc. to Mr. Christopher
Nowland, Louis J. Capano & Sons, Inc.

 

Letter, dated July 28, 1997, from ConTech Services, Inc. to Mr. Christopher
Nowland, Louis J. Capano & Sons, Inc.

 

Invoice, dated June 5, 1997, from Plymouth Environmental Co., Inc. to
Mr. Christopher Nowland, Louis J. Capano & Sons, Inc.

 

Subcontract Agreement between Capano Management Company and Plymouth
Environmental Company, Inc., dated April     , 1997.

 

Letter, dated April 2, 1997 from Plymouth Environmental Co., Inc. to
Mr. Christopher Nowland, Louis Capano & Sons, Inc.

 

Letter, dated April 23, 1997 from Plymouth Environmental Co., Inc. to
Mr. Christopher Nowland, Louis Capano & Sons, Inc.

 

Letter, dated April 23, 1997 from Plymouth Environmental Co., Inc. to
Mr. Christopher Nowland, Louis Capano & Sons, Inc.

 

Letter, dated April 30, 1997 from Plymouth Environmental Co., Inc. to
Mr. Christopher Nowland, Louis Capano & Sons, Inc.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT J

 

INTENTIONALLY  OMITTED

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT K

 

FORM OF MEMORANDUM OF LEASE

 

[SEE ATTACHED]

 

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*** Confidential material redacted and filed separately with the Commission.

 

 

TAX PARCEL IDs:

 

06-136.00-030

 

26-014.10-004

 

 

 

PREPARED BY AND RETURN TO:

 

Morgan, Lewis & Bockius LLP

 

1701 Market Street

 

Philadelphia, PA 19103

(Space reserved for Recorder)

Attn: Eric L. Stern, Esquire

 

MEMORANDUM OF LEASE

 

THIS MEMORANDUM OF LEASE is dated as of the 5th day of April, 2013, and
effective as of the 12th day of April, 2013, by and between AUGUSTINE LAND I,
LP., a Delaware limited partnership (“Landlord”), having an office at 105 Foulk
Road, Wilmington, DE 19803 and INCYTE CORPORATION, a Delaware corporation
(“Tenant”), having an office at Experimental Station (E336/226), Route 141 &
Henry Clay Road, Wilmington, DE 19880.

 

Landlord has leased to Tenant and Tenant has leased from Landlord, on terms and
conditions and subject to the limitations more particularly set forth in that
certain Lease Agreement (the “Lease”) dated as of April 12, 2013, by and between
Landlord and Tenant to which Lease reference is hereby made for all the terms
and conditions thereof, which terms and conditions are made a part hereof as
fully and particularly as if set out verbatim herein, the entire building,
measuring approximately 191,657 rentable square feet in area, plus additional
subbasement space (the “Building”), together with that portion of real property
and any other improvements (the “Leased Land”) located at 1801 Augustine
Cut-Off, Wilmington, Delaware 19803, as more particularly described in
Exhibit “A” (the “Land”) attached hereto and made a part hereof. Capitalized
terms herein have the meanings set forth in the Lease.

 

1.         The initial Term of the Lease shall commence on the date that is
fifteen (15) days after the Substantial Completion of the Premises provided
that, to the extent the same is dependent only on the Work and not on any
improvements or other work controlled by Tenant, the final certificate of
occupancy for Tenant’s occupancy of the Premises has been issued by the
applicable governmental and regulatory authorities, such date estimated to be
May 31, 2014 (“Commencement Date”), and shall expire fifteen (15) years and
three (3) months thereafter (“Initial Expiration Date”), unless sooner
terminated, extended or modified as provided in the Lease.

 

2.         The Lease provides Tenant with the right and option to extend the
initial Term of the Lease for two (2) separate, consecutive periods which in the
aggregate will equal ten (10) years.

 

3.         Subject to the provisions of Article 38 of the Lease, which are set
forth on Exhibit “B” attached hereto and made part hereof, the Lease provides
Tenant with the right to cause

 

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*** Confidential material redacted and filed separately with the Commission.

 

Landlord to expand the Building, add additional building(s) to the Leased Land
and/or add parking spaces to the Building and the Leased Land (together, the
“Premises”). In recognition thereof, and also subject to the provisions of
Article 38, Landlord agrees not to develop the Land in any manner that would
prevent or materially limit Tenant’s ability to expand the Building or build
additional buildings or improvements on the Leased Land, all as more fully
provided in said Article 38.

 

4.         Subject to the provisions of Article 39 of the Lease, which are set
forth on Exhibit “C” attached hereto and made part hereof, the Lease provides
that if, at any time during the Term, Landlord shall receive a bona fide offer
for (a) the lease of the Land (and/or any improvements thereon) other than the
Leased Land, or for (b) the purchase of the Premises, Land (and/or any
improvements thereon) Leased Land and/or Building, which offer Landlord shall
desire to accept, Landlord shall promptly convey to Tenant the terms of such
offer, and Tenant shall have an irrevocable, ongoing right of first refusal and
may, within thirty (30) days thereafter elect to lease or purchase, as the case
may be, the applicable property from Landlord on materially the same terms as
those set forth in such offer, all as more fully provided in said Article 39.

 

5.         Upon the valid termination of the Lease pursuant to and in accordance
with the terms thereof, Tenant agrees to execute and deliver a written document,
in recordable form, terminating the Lease and this Memorandum of Lease;
provided, however, that if Tenant fails to execute and deliver to Landlord such
document in recordable form within ten (10) days following Landlord’s request
therefor, Landlord may execute and record such certification without the joinder
of Tenant.

 

6.         This Memorandum of Lease is executed solely for the purpose of giving
notice of the existence of the Lease, which is unrecorded. Reference must be
made to the Lease, as it may now or hereafter be amended, for the full
description of the rights and duties of the Landlord and Tenant. This Memorandum
of Lease shall not affect the terms and conditions of the Lease, as now or
hereafter amended, or the interpretation of the rights and duties of the
Landlord and Tenant under the Lease, and the terms and conditions of the Lease
shall govern and control. This Memorandum may be executed in counterparts, each
of which shall be deemed to constitute an original, but which taken together
shall constitute one original agreement.

 

[Signature Pages Follow]

 

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*** Confidential material redacted and filed separately with the Commission.

 

IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the
date first above written.

 

WITNESS:

 

TENANT:

 

 

 

 

 

INCYTE CORPORATION,

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

David Hastings

 

 

Title:

Executive Vice President & CFO

 

 

 

 

 

 

WITNESS:

 

LANDLORD:

 

 

 

 

 

AUGUSTINE LAND I, L.P.,

 

 

a Delaware limited partnership

 

 

 

 

 

 

 

 

By: Mardi Gras Associates, Inc., its general partner

 

 

 

 

 

By:

 

 

 

Name:

Louis J. Capano, Jr.

 

 

Title:

President

 

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*** Confidential material redacted and filed separately with the Commission.

 

STATE OF                                                   )

) ss.

COUNTY OF                                               )

 

BE IT REMEMBERED, that on this         day of April, 2013 before me, the
subscriber, personally appeared David Hastings, who, being by me duly sworn on
his oath, deposes and makes proof to my satisfaction that he is Executive Vice
President and CFO of Incyte Corporation, a Delaware corporation named in the
within instrument; that the execution, as well as the making of this instrument,
has been duly authorized by said corporation; and that said instrument was
signed and delivered by him as and for the voluntary act and deed of said
corporation.

 

 

 

 

 

 

Notary Public

 

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*** Confidential material redacted and filed separately with the Commission.

 

STATE OF                                                   )

) ss.

COUNTY OF                                               )

 

BE IT REMEMBERED, that on this         day of April, 2013 before me, the
subscriber, personally appeared Louis J. Capano, Jr., who, being by me duly
sworn on his oath, deposes and makes proof to my satisfaction that he is
President of Mardi Gras Associates, Inc., the general partner of Augustine Land
I, L.P., a Delaware limited partnership named in the within instrument; that the
execution, as well as the making of this instrument, has been duly authorized by
said limited partnership; and that said instrument was signed and delivered by
him as and for the voluntary act and deed of said limited partnership.

 

 

 

 

 

 

Notary Public

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT A TO MEMO OF LEASE

 

LEGAL DESCRIPTION OF THE LAND

 

ALL that certain lot or piece of ground situated on the northerly side of
Augustine Cut-Off, being partially in Brandywine Hundred, County of New Castle
and partially in the City of Wilmington, State of Delaware, being shown on a
ALTA/ACSM Land Title Survey for Augustine Land I, L.P. by Karins and Associates,
dated April 20, 2009, as follows, to wit:

 

BEGINNING at a set drill hole in stone on the northwesterly side of Augustine
Cut-Off Road (100 feet wide), said point being a corner in common for herein
described parcel with land now or formerly of Matthew & Ute Page (Tax Parcel
No. 06-136.00-119); thence, from said point of beginning the following two
(2) described courses and distances on said northwesterly side of Augustine
Cut-Off Road: 1) South 21° - 45’ - 41” West, 351.20 feet to a set concrete
monument and 2) Southwesterly, along a 1,860.08 feet radius curve to the right,
said curve having a chord bearing of South 44° - 44’ - 55” West and a chord
distance of 1,452.81 feet, an arc distance of 1,492.52 feet to a set drill hole
in the sidewalk, a corner in common with lands now or formerly of Berman
Delaware Properties, LLC (Tax Parcel No. 06-136.00-126); thence, leaving said
northwesterly side of Augustine Cut-Off Road on lines in common with said lands
now or formerly of Berman Delaware Properties, LLC, North 01° - 54’ - 40” West,
219.99 feet to a set capped rebar; thence North 22° - 35’ -18” West, 181.00 feet
to a set capped rebar to another corner in common with said lands now or
formerly of Berman Delaware Properties, LLC; thence, on a line in common with
lands now or formerly of Berman Delaware Properties, LLC, in part, and lands now
or formerly of Wilmington friends School, Inc. (Tax Parcel No. 06-136.00-028),
in part, North 41° -12’- 48” East, 363.92 feet to a found iron pipe; thence
North 41° - 07’ - 44” East, 1,167.81 feet to a corner in common with said lands
now or formerly of Matthew & Ute Page; thence, on a line in common with lands
now or formerly of Matthew & Ute Page, South 50° - 34’ -53” East, (passing over
a set capped rebar at 15.00 feet) 287.28 feet to the point and place of
beginning.

 

BEING ALSO DESCRIBED AS:

 

ALL those certain lots or pieces of ground situated on the northerly side of
Augustine Cut-Off, being partially in Brandywine Hundred, County of New Castle
and partially in the City of Wilmington, State of Delaware, being designated as
Parcels A, B, C, D on a Plan of Survey made for John Wanamaker, Wilmington, Inc
by Charles Cho-Lim Ang, Registered Professional Engineer, dated December 18,
1975, and revised on May 6, 1987, on August 11, 1988, and on October 10, 1988
and last revised 1/8/89, as follows, to wit:

 

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*** Confidential material redacted and filed separately with the Commission.

 

PARCEL A:

 

BEGINNING at the point of intersection of the boundary line of the City of
Wilmington with the northwesterly right of way line of the state highway known
as the Augustine Cut-Off (at 100 feet wide); thence from said beginning point
along the said boundary line of the City of Wilmington, South 83 degrees 19
minutes 20 seconds West 6.01 feet to a corner of lands formerly of Jessup and
Moore Paper Company, now lands of The Delaware Paper Mills, Inc.; thence thereby
North 26 degrees 59 minutes 00 seconds East 92.70 feet to a stone on the
southerly side of Snuff Mill Road now known as the Paper Mill Road; thence
crossing the said road North 56 degrees 09 minutes 45 seconds West 171.12 feet
to a stone on the northerly side of the said Paper Mill Road at its intersection
with the easterly side of Love Lane; thence along the said easterly side of Love
Land and along lands of the said Delaware Paper Mills, Inc., North 22 degrees 10
minutes 15 seconds West 181.00 feet to a point; thence still along the said side
of Love Land and along lands of the said Delaware Paper Mills, Inc. the next
three courses and distances: North 41 degrees 32 minutes 23 seconds East 259.15
feet to a point; thence North 41 degrees 06 minutes 15 seconds East 474.94 feet
to a point and thence North 40 degrees 48 minutes 26 seconds East 794 71 feet to
a point in line of lands now or late of Alfred I. DuPont, deceased; thence
thereby South 50 degrees 40 minutes 19 seconds East 287.58 feet to a point on
the said northwesterly right of way line of the state highway known as the
Augustine Cut-Off; thence thereby South 21 degrees 40 minutes 15 seconds West
351.83 feet to a point of curve; thence continuing along said right of way line
southerly along a line curving toward the northwest with a radius of 1860 08
feet, a distance of 1383 33 feet to a point on the said boundary line of the
City of Wilmington and the place of beginning said place of beginning being
distant from the last mentioned point of curve South 42 degrees 58 minutes 34
seconds West 1351.67 feet

 

PARCEL B:

 

BEGINNING at a point in the northwesterly right of way line of the Augustine
Cut-Off (at 100 feet wide) at a corner of lands now or formerly of Daniel W.
Cauffiel, said point of beginning being in the extension of the line of lands of
John Wanamaker; thence from said point of beginning along said northwesterly
right of way line of the Augustine Cut-Off being a curve to the right, having a
radius of 1860 08 feet, an are distance of 100 feet to a point, said point being
the line for this land and other lands of David G Durham and William O. LaMotte,
Jr, and said point being distant by a chord South 66 degrees 14 minutes West 99
99 feet from the said point of beginning; thence by a new line dividing this
land from other lands of David C. Durham and William O. LaMotte, Jr. and along
the easterly side of the proposed 50 feet wide right of way North 1 degree 59
minutes 32 seconds West 219.99 feet to a point, said point being on the
northeasterly side of Paper Mill Road (formerly Snuff Mill Road), said point
being in the line of lands of John Wanamaker; thence crossing the said Paper
Mill Road and along the dividing line between this land and lands of John
Wanamaker, South 56 degrees 39 minutes 40 seconds East, 171.12 feet to a stone
on the southwesterly side of the said Paper Mill Road; thence partly along the
said lands of John Wanamaker and along lands of the aforesaid Daniel W Cauffiel,
South 27 degrees 7 minutes 20 seconds West 96.08 feet to a point on the said
northwesterly right of way line of the said Augustine Cut-Off, the point and
place of beginning.

 

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*** Confidential material redacted and filed separately with the Commission.

 

PARCEL C:

 

BEGINNING at a point on the northwesterly side of Augustine Cut-Off, a corner
for these lands and lands formerly of Francis F. Frazier and Ralph Hill, Jr.,
now of Diamond Ice & Coal Company; thence by a line of said lands North 27
degrees 7 minutes 20 seconds East three and twenty-one one-hundredths (3.21)
feet to a point in the division line between the City of Wilmington and
Brandywine Hundred, a corner for these lands and lands of John Wanamaker,
Wilmington, Inc.; thence by said city line in an easterly direction six and one
one-hundredths (6.01) feet to a point where the said division line intersects
the said northwesterly side of Augustine Cut-Off and thence thereby in a
southwesterly direction eight and twenty-three one-hundredths (8 23) feet to the
point and place of beginning

 

PARCEL D:

 

TOGETHER also with the right to use in common with others entitled thereto the
hereinafter described piece or parcel of land for purposes of ingress and egress
and for the further purpose of place, replacing and maintaining utilities of any
nature whatsoever and an easement over all the certain 50 feet wide right of way
as set forth in the above recited survey, more particularly bounded and
described as follows:

 

BEGINNING at a point in the northwesterly right of way line of the Augustine
Cut-Off (at 100 feet wide), said point of beginning being distant southwesterly
100 feet measured along said right of way line of the Augustine Cut-Off from a
corner of lands now or formerly of Daniel W Cauffiel, said point of beginning
being also a corner for the premises hereinabove described and other lands of
David G Durham and William O LaMotte, Jr; thence from said point of beginning
running along the northwesterly right of way line of the Augustine Cut-Off by a
curve to the right with a radius of 1860.08 feet, 53 01 feet and extending
thence North 1 degree 59 minutes 32 seconds West 228.99 feet to a point; thence
in a northeasterly direction and crossing the said 50 feet wide future road, 50
feet more or less to a point in the easterly side thereof; and thence South 1
degree 59 minutes 32 seconds East 219 99 feet to the point and place of
beginning

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT B TO MEMO OF LEASE

 

LEASE PROVISION REGARDING EXPANSION RIGHT(1)

 

38.          EXPANSION. Provided no Events of Default are uncured and continuing
after applicable notice and cure periods and that Tenant satisfies the Financial
Condition at the time of its election hereunder, Tenant shall have the right to
cause Landlord to expand the Building, add additional building(s) to the Leased
Land and/or add parking spaces to the Premises. Landlord hereby agrees to not
develop the Land in any manner that would prevent or materially limit Tenant’s
ability to expand the Building or build additional buildings or improvements on
the Leased Land. At Tenant’s request, Landlord shall cooperate in good faith
with Tenant to accommodate any expansion needs that Tenant may have and to
develop plans to expand the Building, add additional building(s) to the Leased
Land and/or add parking spaces to the Premises, provided that the parties can
reasonably agree upon terms for expansion including a reasonable lease constant
to provide a return to Landlord on its additional investment. Any agreement with
respect to expansion space shall be on economic terms that are materially
consistent with this Lease, with adjustments, as necessary, to take into
account, among other things; (a) changes in the lending environment,
(b) prevailing interest rates, (c) changes in Tenant’s creditworthiness, (d) the
nature of the new space as compared to the nature of the space pursuant to the
original Lease (e.g. portion of the Premises designated as office space and lab
space), and (e) the relative cost of the construction of such expansion space.
All of the foregoing shall be at Tenant’s cost and expense and at no cost or
expense to Landlord. Any right of expansion is personal to Tenant and its
permitted assignees and cannot be assigned to any other person notwithstanding
any assignment of this Lease.

 

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(1) Capitalized terms used herein but not defined herein shall have the meanings
ascribed such terms in the Lease, to which reference should be made. Article and
Section references herein are to the Lease.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT C TO MEMO OF LEASE

 

LEASE PROVISION REGARDING RIGHT OF FIRST REFUSAL(2)

 

39.       RIGHT OF FIRST REFUSAL. If, at any time during the Term, Landlord
shall receive a bona fide offer for (a) the lease of the Land (and/or any
improvements thereon) other than the Leased Land, or for (b) the purchase of the
Premises, Land (and/or any improvements thereon), Leased Land, and/or Building,
which offer Landlord shall desire to accept, Landlord shall promptly convey to
Tenant the terms of such offer, and Tenant shall have an irrevocable, ongoing
right of first refusal and may, within thirty (30) days thereafter (the “Refusal
Period”) elect to lease or purchase, as the case may be, the applicable property
from Landlord on materially the same terms as those set forth in such offer. In
the event of a failure of Tenant to timely exercise the right of first refusal,
or in the event Tenant’s elects not to exercise the right of first refusal,
Landlord shall not be precluded from entering into the originally offered
transaction on the terms previously provided to Tenant pursuant to this
Section 39, but if for any reason the terms of such proposed transaction change,
or such transaction is not consummated within one hundred and eighty (180) days
after the expiration of the Refusal Period, then Landlord shall not be entitled
to enter into a transaction to lease the Land (and/or any improvements thereon)
or sell the Premises, Land (and/or any improvements thereon), Leased Land,
and/or Building without again offering to sell or lease such property to Tenant
in the same manner as provided above. Any purchaser of the Land or Premises
shall purchase such property subject to this Lease. Any right of first refusal
is personal to Tenant and its permitted assignees and cannot be assigned to any
other person notwithstanding any assignment of this Lease.

 

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(2) Capitalized terms used herein but not defined herein shall have the meanings
ascribed such terms in the Lease, to which reference should be made. Article and
Section references herein are to the Lease.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT L

 

M&T BANK SNDA

 

[g263273la53i001.jpg]

 

SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

 

AGREEMENT dated as of the       day of           , 2013, between Incyte
Corporation, a Delaware corporation, whose address is Experimental Station
(E336/226), Rt. 141 & Henry Clay Road, Wilmington, Delaware 19880 (prior to the
Commencement Date) and 1801 Augustine Cut-Off, Wilmington, Delaware 19803 (on
and after the Commencement Date) (“Tenant”), and MANUFACTURERS AND TRADERS TRUST
COMPANY, a New York banking corporation with its principal banking office at One
M&T Plaza, Buffalo, NY 14240, Attention: Office of General Counsel (the
“Mortgagee”) and Augustine Land I, L.P., a Delaware limited partnership with an
address of 105 Foulk Road, 2nd Floor, Wilmington, Delaware 19803 (“Landlord”).

 

Landlord owns the real property commonly known as [the Augustine Cut-Off,
Brandywine Hundred] [CONFIRM] and City of Wilmington, New Castle County,
Delaware (such real property, including all buildings, improvements, structures
and fixtures located thereon, “Landlord’s Premises”), as more particularly
described in Schedule A;

 

WHEREAS, Mortgagee has made or will be making a loan to Landlord in the original
principal amount of $*** as the loan may be modified or amended from time to
time (the “Loan”);

 

WHEREAS, to secure the Loan, Landlord has encumbered Landlord’s Premises by
entering into a mortgage dated on or about June 17, 2009 in favor of Mortgagee
(as amended, increased, renewed, extended, spread, consolidated, severed,
restated, or otherwise changed from time to time, the “Mortgage”) recorded in
the Land Records of New Castle County, Delaware or to be recorded in such Land
Records (the “Land Records”);

 

WHEREAS, pursuant to that certain Lease Agreement, by and between Landlord and
Tenant, dated as of April 12, 2013, (as such lease may have been, or may be
amended from time to time, the “Lease”), Landlord demised to Tenant all or a
portion of Landlord’s Premises (the “Tenant’s Premises”). Tenant’s Premises are
commonly known as 1801 Augustine Cut-Off, Wilmington, Delaware 19803;

 

WHEREAS, a memorandum of lease is to be recorded in the Land Records prior to
the recording of this Agreement.

 

WHEREAS, Tenant and Mortgagee desire to agree upon the relative priorities of
their interests in Landlord’s Premises and their rights and obligations if
certain events occur.

 

NOW, THEREFORE, for good and sufficient consideration, the receipt and
sufficiency of which is hereby acknowledged, Tenant, Mortgagee and Landlord,
intending to be legally bound, agree as follows:

 

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*** Confidential material redacted and filed separately with the Commission.

 

1.                                      DEFINITIONS.

 

Capitalized terms used in this Agreement but not defined in this Agreement shall
have the meanings ascribed such terms in the Lease. The following terms shall
have the following meanings for purposes of this Agreement:

 

1.1                               “Construction-Related Obligation” means any
obligation of Landlord under the Lease to make, pay for, or reimburse Tenant for
any alterations, demolition or other improvements or work at Landlord’s
Premises, including Tenant’s Premises, including, without limitation, the
obligation of Landlord to perform and fund the Work pursuant to the terms of the
Lease. Construction-Related Obligations shall not include the following matters
post-Commencement Date: (a) reconstruction or repair following fire, casualty or
condemnation; or (b) day-to-day maintenance and repairs.

 

1.2                               “Foreclosure Event” means (a) foreclosure
under the Mortgage; (b) any other exercise by Mortgagee of rights and remedies
(whether under the Mortgage or under applicable law, including bankruptcy law)
as holder of the Loan and/or the Mortgage, as a result of which Successor
Landlord becomes owner of or acquires control of Landlord’s Premises or Tenant’s
Premises; or (c) delivery by Landlord to Mortgagee (or its designee or nominee)
of a deed or other conveyance of Landlord’s interest in Landlord’s Premises or
Tenant’s Premises in lieu of any of the foregoing.

 

1.3                               “Former Landlord” means Landlord and any other
party that was landlord under the Lease at any time before the occurrence of any
attornment under this Agreement.

 

1.4                               “Offset Right” means any right or alleged
right of Tenant to any offset, defense (other than one arising from actual
payment and performance, which payment and performance would bind a Successor
Landlord pursuant to this Agreement), claim, counterclaim, reduction, deduction,
or abatement against Tenant’s payment of Rent or performance of Tenant’s other
obligations under the Lease, whether arising under the Lease or other applicable
law.

 

1.5                               “Rent” means any fixed rent, base rent or
additional rent under the Lease.

 

1.6                               “Successor Landlord” means any party that
becomes owner of or acquires control of Landlord’s Premises or Tenant’s Premises
as the result of a Foreclosure Event.

 

1.7                               “Termination Right” means any right of Tenant
to cancel or terminate the Lease or to claim a partial or total eviction arising
(whether under the Lease or under applicable law) from Landlord’s breach or
default or other event or circumstance giving rise to a right of termination
under the Lease; provided however, for the avoidance of doubt, “Termination
Right” shall not include Tenant’s right to terminate the Lease pursuant to
Section 40 of the Lease.

 

2.                                      SUBORDINATION. The Lease and all of
Tenant’s rights thereunder shall be, and shall at all times remain, subject and
subordinate to the Mortgage, the lien imposed by the Mortgage, and all
indebtedness secured by the Mortgage.

 

3.                                      NONDISTURBANCE, RECOGNITION AND
ATTORNMENT.

 

3.1                               No Exercise of Mortgage Remedies Against
Tenant. So long as the Lease has not been terminated on account of an Event of
Default that has continued beyond all applicable notice and cure periods,
neither Mortgagee nor any Successor Landlord shall name or join Tenant as a
defendant, or seek to terminate the Lease or otherwise diminish or interfere
with Tenant’s rights under the Lease or this Agreement, in any exercise of
Mortgagee’s or Successor Landlord’s rights and remedies arising upon a default
under the Mortgage, unless applicable law requires that Tenant, solely as a
procedural matter, be made a party thereto as a condition to proceeding against
Landlord or prosecuting such rights and remedies against Landlord. In the latter
case, Mortgagee or Successor Landlord, as the case may be, may join Tenant as a
defendant in such action only for such purpose and

 

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*** Confidential material redacted and filed separately with the Commission.

 

not to terminate the Lease or otherwise interfere with or adversely affect
Tenant’s rights under the Lease or this Agreement in such action.

 

3.2                               Nondisturbance and Attornment. If the Lease
has not been terminated on account of an Event of Default by Tenant, then, when
Successor Landlord takes title to or otherwise acquires control of Landlord’s
Premises or Tenant’s Premises (“Attornment Date”): (a) Successor Landlord shall
not terminate or disturb Tenant’s use, possession and enjoyment of the Tenant’s
Premises under the Lease, nor will the leasehold estate of Tenant be affected or
any of Tenant’s rights under the Lease be impaired; (b) Successor Landlord shall
be bound to Tenant under all the terms and conditions of the Lease, and shall
assume and be bound by all of the obligations of Landlord under the Lease which
accrue from and after the Attornment Date, including without limitation all
Construction-Related Obligations, subject to the terms and conditions of this
Agreement, but expressly including, for the avoidance of doubt, the full
completion and/or funding of any yet incomplete and/or unfunded portions of the
Work, whether or not such obligation accrued before or from and after the
Attornment Date; (c) Tenant shall recognize and attorn to Successor Landlord as
Tenant’s direct landlord under the Lease, subject to the terms and conditions of
this Agreement; and (d) the Lease shall continue in full force and effect as a
direct lease, in accordance with its terms, between Successor Landlord and
Tenant. Landlord hereby agrees to the terms, conditions and applicable
provisions of this Section 3.2.

 

3.3                               Further Documentation. The provisions of this
Article shall be effective and self-operative without any need for Successor
Landlord or Tenant to execute any further documents. Tenant and Successor
Landlord shall, however, confirm the provisions of this Article in writing upon
request by either of them.

 

4.                                      PROTECTION OF SUCCESSOR LANDLORD.
Notwithstanding anything to the contrary in the Lease or the Mortgage, neither
Mortgagee nor the Successor Landlord shall be liable for or bound by any of the
following matters:

 

4.1                               Offset Rights. Any Offset Right that Tenant
may have against any Former Landlord relating to any event or occurrence before
the Attornment Date, including any claim for damages of any kind whatsoever as
the result of any breach by Former Landlord that occurred before the Attornment
Date, except for any Offset Right that Tenant is entitled to take or receive as
expressed in the Lease upon the happening of any event, even if such event
occurs prior to the Attornment Date, including, without limitation, the failure
of Former Landlord to pay when due any overpayments of Rent paid by Tenant on an
estimated basis. For the avoidance of doubt, the foregoing shall not limit
either (a) Tenant’s right to exercise against Successor Landlord any Offset
Right otherwise available to Tenant because of events occurring after or
continuing beyond the Attornment Date; or (b) Successor Landlord’s obligation to
correct any conditions that existed as of the Attornment Date and violate
Successor Landlord’s obligations as Landlord under the Lease.

 

4.2                               Prepayments. Any payment of Rent that Tenant
may have made to Former Landlord more than thirty days before the date such Rent
was first due and payable under the Lease with respect to any period after the
Attornment Date other than, and only to the extent that, the Lease expressly
required such a prepayment or Mortgagee actually received or consented to such
prepayment.

 

4.3                               Payment; Security Deposit. Any obligation with
respect to any security deposited with Former Landlord, except to the extent
such security was actually delivered to Mortgagee or consented to by Mortgagee
or otherwise required by the Lease. This paragraph is not intended to apply to
Landlord’s obligation to make any payment that constitutes a
“Construction-Related Obligation”.

 

4.4                               Modification or Amendment. Any modification or
amendment to the Lease made without Mortgagee’s written consent; provided,
however, that any modification or amendment that merely confirms the exercise of
rights under the Lease shall not require Mortgagee’s written consent.

 

4.5                               Surrender, Etc. Any consensual or negotiated
surrender, cancellation, or termination of the Lease, in whole or in part,
agreed upon between Landlord and Tenant, unless effected by Tenant pursuant to
the express terms of the Lease or unless consented to by Mortgagee.

 

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*** Confidential material redacted and filed separately with the Commission.

 

5.                                      EXCULPATION OF SUCCESSOR LANDLORD.
Tenant hereby acknowledges that upon any attornment pursuant to this Agreement,
Successor Landlord’s obligations and liability under the Lease shall never
extend beyond Successor Landlord’s (or is successors’ or assigns’) interest in
Landlord’s Premises or Tenant’s Premises from time to time, including rents and
sale or insurance proceeds therefrom and Tenant’s rental offset rights
(collectively, “Successor Landlord’s Interest”). Tenant shall look exclusively
to Successor Landlord’s Interest (or that of its successors and assigns) for
payment or discharge of any obligations of Successor Landlord under the Lease as
affected by this Agreement. If Tenant obtains any money judgment against
Successor Landlord with respect to the Lease or the relationship between
Successor Landlord and Tenant, then Tenant shall look solely to Successor
Landlord’s Interest (or that of its successors and assigns) to collect such
judgment. Tenant shall not collect or attempt to collect any such judgment out
of any other assets of Successor Landlord.

 

6.                                      MORTGAGEE’S RIGHT TO CURE.

 

6.1                               Notice and Cure Period. Prior to exercising
any Termination Right, Tenant agrees to notify Mortgagee of such breach or
default (or other event or circumstance giving rise to such right) in order to
give Mortgagee the opportunity to cure such breach or default, if applicable,
within the same period as Landlord shall have to cure the same under the Lease
and any such notice may be sent to Landlord and Mortgagee contemporaneously, in
which event the cure periods shall run concurrently. If the Lease does not
expressly provide Landlord the right to notice and a period of time to effect a
remedy, then the cure period shall be: (a) ten (10) business days following the
delivery of notice to Mortgagee in the event of a failure by Landlord to pay any
amount owing to Tenant pursuant to the Lease; or (b) thirty (30) days following
the delivery of notice to Mortgagee in the event of a failure by Landlord to
perform any other obligation to be performed by Landlord under the Lease. Tenant
may exercise any other rights and remedies it may have in the event of default
by Landlord, whether at law, in equity or pursuant to the provisions of the
Lease, all without giving Mortgagee any notice whatsoever.

 

6.2                               Mortgagee’s Cure Right. Mortgagee shall have
no obligation to cure (and shall have no liability or obligation for not curing)
any breach or default by Landlord, except to the extent that Mortgagee agrees or
undertakes otherwise in writing.

 

7.                                      CASUALTY AND CONDEMNATION.
Notwithstanding anything to the contrary contained in the Lease, the Mortgage,
or any other loan document executed in connection with the Loan, provided no
Event of Default under the Lease shall have occurred and be continuing, if the
Tenant’s Premises or any portion thereof is damaged or destroyed, or if any
portion of the Tenant’s Premises is taken or condemned, Mortgagee hereby agrees
to make any insurance or condemnation proceeds available for the full
restoration and repair of the Tenant’s Premises or reimbursement to Tenant of
the Unamortized Amount of the Tenant Specific Improvement Funded Amount if
Tenant shall have the right to payment thereof pursuant to the terms of the
Lease. Mortgagee’s agreement that insurance proceeds and condemnation awards
shall be used for restoration of the Tenant’s Premises in accordance with the
terms of the Lease is subject to the fulfillment of the following conditions:
(a) delivery to Mortgagee or confirmation of the issuance of all necessary
permits and authorizations for such repair or restoration work from the various
governmental authorities having jurisdiction; (b) Mortgagee shall have approved
the final plans and specifications for the repair or restoration; provided,
however, Mortgagee’s approval shall not be required except to the extent the
final plans and specifications materially deviate from the original plans or the
improvements as they existed immediately prior to the casualty or condemnation,
and no such approval shall be required for repairs or restoration work necessary
to comply with law; (c) Mortgagee shall have consented to the general contractor
who will perform such repair or restoration and the contract for such repair or
restoration, which consent shall not be unreasonably withheld, conditioned or
delayed; (d) Mortgagee shall be satisfied that the insurance or condemnation
proceeds are sufficient to repair or restore the damaged property in accordance
with the aforementioned final plans and specifications; provided, however, that
in the event of a deficiency, Tenant, at Tenant’s option and in Tenant’s sole
discretion, shall have the right to agree to fund any such deficiency, either in
cash or by inclusion of the amortized amount in Additional Rent, calculated over
the remaining term of the Lease at a market rate of interest, and in either such
instance, Mortgagee shall not be permitted to withhold the insurance proceeds or
condemnation awards from restoration of the Tenant’s Premises pursuant to this
Section 7(d); (e) prior to any disbursement, Mortgagee shall have been
reasonably satisfied that the contractor is entitled to such disbursement for
completed work done in accordance with the plans and specifications and such
work was performed in a workmanlike manner under the terms of the construction
contract; and (f) Tenant shall not have exercised a right to terminate the Lease
on

 

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*** Confidential material redacted and filed separately with the Commission.

 

account of the casualty or condemnation or shall have had the Lease terminated
as a result of the casualty or condemnation.

 

8.                                      TENANT COVENANTS. Tenant covenants with
the Mortgagee that now and continuing as long as the Mortgage shall remain
unsatisfied of record as follows:

 

8.1                               Rent Payment Notices. From and after Tenant’s
receipt of written notice from Mortgagee (a “Rent Payment Notice”), Tenant shall
pay all Rent to Mortgagee or as Mortgagee shall direct in writing, until such
time as Mortgagee directs otherwise in writing. Tenant shall comply with any
Rent Payment Notice notwithstanding any contrary instruction, direction or
assertion from Landlord. Mortgagee’s delivery to Tenant of a Rent Payment
Notice, or Tenant’s compliance therewith, shall not be deemed to: (a) cause
Mortgagee to succeed to or to assume any obligations or responsibilities as
Landlord under the Lease, all of which shall continue to be performed and
discharged solely by Landlord unless and until any attornment has occurred
pursuant to this Agreement; or (b) relieve Landlord of any obligations under the
Lease. Tenant shall be under no duty to controvert or challenge any Rent Payment
Notice from Mortgagee. Tenant’s compliance with Mortgagee’s Rent Payment Notice
shall not be deemed to violate the Lease. Tenant shall be entitled to full
credit under the Lease for any Rent paid to Mortgagee pursuant to a Rent Payment
Notice to the same extent as if such Rent were paid directly to Landlord.
Landlord hereby releases Tenant from, and shall indemnify and hold Tenant
harmless from and against, any and all loss, claim, damage, liability, cost or
expense (including payment of reasonable attorneys’ fees and disbursements)
arising from any claim based upon Tenant’s compliance with any Rent Payment
Notice in accordance with this provision. Landlord hereby agrees to the terms,
conditions and applicable provisions of this Section 8.1, and that it shall not
seek to recover from Tenant for any reason whatsoever, any monies paid by Tenant
to Mortgagee by virtue of this Agreement. Landlord shall look solely to
Mortgagee with respect to any claims Landlord may have on account of an
incorrect or wrongful Rent Payment Notice.

 

8.2                               Tenant shall not subordinate the Lease to the
lien of any other mortgage other than the Mortgage in favor of the Mortgagee.

 

8.3                               If requested by the Mortgagee or the Successor
Landlord, Tenant shall deliver to Mortgagee or the Successor Landlord (as the
case may be) the same periodic deliveries (e.g., updated financial reports,
estoppel certificates) it delivers to Landlord pursuant to the Lease.

 

9.                                      MISCELLANEOUS.

 

9.1                               Notices. Any demand or notice hereunder or
under any applicable law pertaining hereto shall be in writing and duly given if
delivered to any party (at the address on page one). Such notice or demand shall
be deemed sufficiently given for all purposes when delivered by certified mail
(return receipt requested) or by nationally-recognized overnight courier service
(e.g. Federal Express or UPS) and shall be deemed effective three (3) business
days after deposit with the United States Post Office if being sent by certified
mail or one (1) business day after being sent by nationally-recognized overnight
courier service. Notice by e-mail is not valid notice under this agreement.

 

9.2                               Successors and Assigns. This Agreement shall
bind and benefit the parties, their successors and assigns, any Successor
Landlord, and its successors and assigns. If Mortgagee assigns the Mortgage,
then upon delivery to Tenant of written notice thereof accompanied by the
assignee’s written assumption of all obligations under this Agreement, all
liability of the assignor shall terminate, except for liabilities accruing prior
to the date of the assignment.

 

9.3                               Interaction with Lease and with Mortgage. If
this Agreement conflicts with the Lease, then this Agreement shall govern as
between the parties and any Successor Landlord, including upon any attornment
pursuant to this Agreement. This Agreement supersedes, and constitutes full
compliance with, any provisions in the Lease that provide for subordination of
the Lease to, or for delivery of nondisturbance agreements by the holder of, the
Mortgage. Mortgagee confirms that Mortgagee has consented to Landlord’s entering
into the Lease.

 

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*** Confidential material redacted and filed separately with the Commission.

 

9.4                               Mortgagee’s Rights and Obligations. Except as
expressly provided for in this Agreement, Mortgagee shall have no obligations to
Tenant with respect to the Lease. If an attornment occurs pursuant to this
Agreement, then all rights and obligations of Mortgagee under this Agreement
shall terminate, without thereby affecting in any way the rights and obligations
of Successor Landlord provided for in this Agreement.

 

9.5                               Interpretation; Governing Law. The
interpretation, validity and enforcement of this Agreement shall be governed by
and construed under the internal laws of the State of Delaware, excluding its
principles of conflicts of laws. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF DELAWARE
AND CONSENTS THAT SERVICE OF PROCESS MAY BE EFFECTED IN THE MANNER AND AT SUCH
ADDRESSES SET FORTH ABOVE. Each party acknowledges and agrees that the venue
provided above is the most convenient forum for the parties. Each party waives
any objection to venue and any objection based on a more convenient forum in any
action instituted under this Agreement.

 

9.6                               Miscellaneous. This Agreement constitutes the
entire agreement between Mortgagee and Tenant regarding the subordination of the
Lease to the Mortgage and the rights and obligations of Tenant and Mortgagee as
to the subject matter of this Agreement. This Agreement may be amended,
discharged or terminated, or any of its provisions modified or waived, only by a
written instrument executed by the party to be charged. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
Mortgagee, Tenant and Landlord each represent that such party has full authority
to enter into this Agreement, and that such party’s entry into this Agreement
has been duly authorized by all necessary actions. The headings and captions in
this Agreement are for convenience of reference only and in no way define, limit
or describe the scope or the intent of any provision or section of this
Agreement and shall not be deemed to have any substantive effect.
Inapplicability or unenforceability of any provisions of this Agreement shall
not limit or impair the operation or validity of any other provision of this
Agreement.

 

9.7                               Counterparts. This Agreement may be executed
in any number of counterparts, each of which, when executed and delivered, shall
be an original, but such counterparts shall together constitute one and the same
instrument.

 

9.8                               No Agency Relationship. The Mortgagee is not
the agent or representative of Landlord and this Agreement shall not make the
Mortgagee liable to materialmen, contractors, craftsmen, laborers or others for
goods delivered to or services performed by them upon the Landlord’s Premises,
or for debts or claims accruing to such parties against Landlord and there is no
contractual relationship, either expressed or implied, between the Mortgagee and
any materialmen, subcontractors, craftsmen, laborers, or any other person
supplying any work, labor or materials for the Improvements.

 

[SIGNATURE PAGES FOLLOW]

 

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*** Confidential material redacted and filed separately with the Commission.

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
first date set forth above.

 

 

WITNESS:

 

INCYTE CORPORATION

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

WITNESS:

 

MANUFACTURERS AND TRADERS TRUST COMPANY

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

 

 

WITNESS:

 

AUGUSTINE LAND I, L.P.

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

ACKNOWLEDGMENT

(Tenant)

 

STATE OF    

 

CITY/COUNTY OF                   , to wit:

 

The foregoing instrument was acknowledged before me this          day of
                , 20      , by                , as                of
                               , a                                , on behalf of
the                                .

 

My commission expires:                 

 

 

 

[SEAL]

Notary Public

 

ACKNOWLEDGMENT

(Mortgagee)

 

STATE OF

 

CITY/COUNTY OF                   , to wit:

 

The foregoing instrument was acknowledged before me this          day of
                , 20      , by                , as               of
MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation, on
behalf of the banking corporation.

 

My commission expires:

 

 

 

[SEAL]

Notary Public

 

ACKNOWLEDGMENT

(Landlord)

 

STATE OF

 

CITY/COUNTY OF                           , to wit:

 

The foregoing instrument was acknowledged before me this          day of
                , 20      , by Louis J. Capano, Jr., as the President of Mardi
Gras Associates, Inc., a Delaware corporation, which is the sole General Partner
of AUGUSTINE LAND I, L.P., a Delaware limited partnership, on behalf of the
limited partnership.

 

My commission expires:

 

 

 

[SEAL]

Notary Public

 

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*** Confidential material redacted and filed separately with the Commission.

 

SCHEDULE A

 

DESCRIPTION OF LANDLORD’S PREMISES

 

ALL that certain lot or piece of ground situated on the northerly side of
Augustine Cut-Off, being partially in Brandywine Hundred, County of New Castle
and partially in the City of Wilmington, State of Delaware, being shown on a
ALTA/ACSM Land Title Survey for Augustine Land I, L.P. by Karins and Associates,
dated April 20, 2009, as follows, to wit:

 

BEGINNING at a set drill hole in stone on the northwesterly side of Augustine
Cut-Off Road (100 feet wide), said point being a corner in common for herein
described parcel with land now or formerly of Matthew & Ute Page (Tax Parcel
No. 06-136.00-119); thence, from said point of beginning the following two
(2) described courses and distances on said northwesterly side of Augustine
Cut-Off Road: 1) South 21° - 45’ - 41” West, 351.20 feet to a set concrete
monument and 2) Southwesterly, along a 1,860.08 feet radius curve to the right,
said curve having a chord bearing of South 44° - 44’ - 55” West and a chord
distance of 1,452.81 feet, an arc distance of 1,492.52 feet to a set drill hole
in the sidewalk, a corner in common with lands now or formerly of Berman
Delaware Properties, LLC (Tax Parcel No. 06-136.00-126); thence, leaving said
northwesterly side of Augustine Cut-Off Road on lines in common with said lands
now or formerly of Berman Delaware Properties, LLC, North 01° - 54’ - 40” West,
219.99 feet to a set capped rebar; thence North 22° - 35’ -18” West, 181.00 feet
to a set capped rebar to another corner in common with said lands now or
formerly of Berman Delaware Properties, LLC; thence, on a line in common with
lands now or formerly of Berman Delaware Properties, LLC, in part, and lands now
or formerly of Wilmington friends School, Inc. (Tax Parcel No. 06-136.00-028),
in part, North 41° -12’- 48” East, 363.92 feet to a found iron pipe; thence
North 41° - 07’ - 44” East, 1,167.81 feet to a corner in common with said lands
now or formerly of Matthew & Ute Page; thence, on a line in common with lands
now or formerly of Matthew & Ute Page, South 50° -34’ -53” East, (passing over a
set capped rebar at 15.00 feet) 287.28 feet to the point and place of beginning.

 

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*** Confidential material redacted and filed separately with the Commission.

 

EXHIBIT M

 

LETTER OF INTENT/TERM  SHEET

 

[SEE ATTACHED]

 

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*** Confidential material redacted and filed separately with the Commission.

 

[g263273la55i001.jpg]

 

Manufacturers and Traders Trust Company

1100 North Market Street, Wilmington, DE 19801

Ph: (302) 651-1337 Fax: (302)651-1114

 

April 17, 2013

 

Louis Capano, Jr.

Louis Capano, III

105 Foulk Road

Wilmington, DE 19803

 

Re: Redevelopment of 1801 Augustine Cut off

 

Dear Louis and Louis:

 

We appreciate the opportunity to review your request to finance the renovation
of 1801 Augustine Cutoff. Based on the information we have received to date, we
are prepared to underwrite and seek approval for an extension on the following
terms and conditions proposed herein.

 

Thank you again for giving us the opportunity to consider this financing.

 

Sincerely,

 

/s/ Rachel Skrabak

 

Rachel Skrabak

 

Vice President

 

 

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*** Confidential material redacted and filed separately with the Commission.

 

Please be advised that the Summary of Terms and Conditions does not attempt to
describe all the terms and conditions that would pertain to the Facility, but
rather it is intended to outline certain items around which the Facility will be
structured. This term sheet is for discussion purposes only and does not
constitute a commitment to lend by M&T Bank. Such commitment requires full
underwriting and approval by the Bank. M&T Bank makes no commitments until full
approval is granted.

 

Mortgagor:

 

Augustine Land I, L.P. or an entity controlled by the Guarantors and otherwise
acceptable to the Lender in all respects (the “Borrower”).

 

 

 

Purpose:

 

To provide financing for the redevelopment of 1801 Augustine Cutoff, Wilmington,
DE 19803 (the “Property” or the “Project”), to be leased by Incyte Corporation
(the “Tenant”).

 

 

 

Loan Amount:

 

A total of ***, inclusive of existing debt on the Property.

 

 

 

Collateral:

 

A title insured first mortgage lien on the Property. Also, a security interest
in all improvements and fixtures thereto and an assignment of all rents, leases,
and contracts, which will include an assignment of a $15,000,000 letter of
credit to be pledged by the Tenant to the Borrower further described herein (the
“Letter of Credit”). Continuing first mortgage lien and security interest in
103-105 Foulk Road, Wilmington, DE (“Additional Collateral”).

 

 

 

Letter of Credit:

 

The Letter of Credit shall be issued to Borrower at the Loan Closing and further
assigned to the Bank. In order to provide the Letter of Credit at closing,
Tenant will be given five business days written notice by the Lender prior to
Loan Closing.

 

 

 

 

 

The Letter of Credit issuer will be required to have a minimum credit rating
equal to A- or better by S&P or A3 or better by Moody’s; provided, for the
purposes of determining whether the minimum rating requirement has been met, the
higher of the rating by S&P and Moody’s will be used. If the issuer of the
Letter of Credit should fall below the minimum rating requirement, Tenant will
have ten (10) Business Days after notice from Borrower to replace the Letter of
Credit with a replacement letter of credit from an issuer that meets the minimum
credit rating.

 

 

 

 

 

The Letter of Credit shall be issued for a term of not less than one (1) year
from the date of issuance and shall be deemed automatically extended for a one
(1) year period at each anniversary date. The Letter of Credit will be reduced
over the course of the lease term subject to further performance requirements
further described in the Letter of Credit Agreement, which is subject to bank’s
final review and acceptance.

 

 

 

Term:

 

Approximately *** or *** years from loan closing, comprised of an initial
interest only period through *** (“Construction Period”), followed by a *** or
*** year amortizing period (“Permanent Period”).

 

 

 

Interest Rate:

 

*** bps ***-Month LIBOR, adjusted on a monthly basis. Upon Tenant paying full
rent (not Adjusted Rent as defined in the lease) and no event of default, the
rate will be reduced to *** bps ***-Month LIBOR if the *** Permanent Period is
elected and *** bps ***-Month LIBOR if the *** Permanent Period is elected.

 

 

 

Loan Budget:

 

The Loan will be funded based upon the following budget. Budget shortfalls will
be funded by equity to be borne by Borrower and/or Tenant as stipulated in the
lease. Final budget will be reviewed and approved by Bank.

 

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*** Confidential material redacted and filed separately with the Commission.

 

Source

 

 

 

%

 

Use

 

 

 

%

 

Tenant

 

$

***

 

***

%

Existing Loan

 

$

***

 

***

%

Borrower

 

$

***

 

***

%

Direct Construction Costs

 

$

***

 

***

%

Loan

 

$

***

 

***

%

Commission

 

$

***

 

***

%

 

 

 

 

 

 

Architectural/Engineering

 

$

***

 

***

%

 

 

 

 

 

 

Other Soft Costs

 

$

***

 

***

%

Total

 

$

***

 

100

%

 

 

$

***

 

100

%

 

Tenant Equity:

 

Subject to the terms of the Lease, Tenant will contribute its pro-rata share of
Direct Construction Costs. Tenant’s equity contribution will be guaranteed by
the Letter of Credit, which, subject to the terms of the Lease, including the
Letter of Credit Terms, must be increased back to $*** drawn. The provisions in
the Work Letter regarding timing and payment obligations of invoices by Landlord
and Tenant shall be subject to the commercially reasonable approval of Bank.

 

 

 

Borrower Equity:

 

Equity paid prior to loan closing to be supported with copies of corresponding
invoices and checks. The remaining equity will be held in escrow to be disbursed
prior to construction funds. Principal amortization on existing loan will be
considered toward Borrower’s equity. If the budget changes, in no event may
Borrower’s Equity be less than *** of the total Project Budget.

 

 

 

Monthly Payments:

 

Interest only during construction period followed by monthly payments of
interest and principal during permanent period. If a fixed rate is obtained, the
monthly principal amount will be based on the fixed rate. If the rate continues
to float, the monthly principal amount will be based upon a ***% interest rate.
Amortization will be bifurcated as follows:

$*** will be subject to a *** year amortization.

$*** will be subject to a *** year amortization.

 

 

 

Hedge Products:

 

At the Borrower’s discretion, throughout the construction period, the interest
rate may be fixed synthetically by M&T Capital Markets using an interest rate
swap which will be the sum of the interest rate margin plus the applicable M&T
cost of funds on the full or partial loan balance. The borrower may request to
swap funds in increments of no less than $*** and the term of the swap will be
co-terminus with the maturity of the loan. On or before the commencement of the
permanent period, no more than ***% of the loan amount may remain un-hedged.

 

 

 

 

 

Any hedging product will be cross-collateralized and cross-defaulted with the
loan, and guaranteed in full by the Guarantors. The notional amount of all swaps
may not exceed the commitment and the maximum term may not exceed tenor of loan.

 

 

 

Prepayment:

 

Standard LIBOR breakage will apply with any pre-payment. If a Swap is elected,
fees associated with unwinding the swap will be paid by the Borrower.

 

 

 

Commitment Fee:

 

Construction Period plus *** permanent period: *** BPS of the Loan Amount, with
*** BPS to be paid at closing and the remaining *** BPS to be paid at the
earlier of the election to fix any portion of the loan amount or the
commencement of the Permanent Period, OR

Construction Period plus *** permanent period: *** BPS of the Loan Amount, with
*** BPS will be due at closing and the remaining *** BPS to be paid at the
earlier of the election to fix any portion of the loan amount or the
commencement Permanent Period.

 

 

 

Guarantee:

 

All members of the Borrower, including, but not limited to Louis J. Capano, Jr.
and Louis J. Capano, III (the “Guarantors”), unconditionally, jointly and
severally guaranty lien-free completion of all planned improvements,
environmental indemnity, and full principal and debt service.

 

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*** Confidential material redacted and filed separately with the Commission.

 

Financial

 

 

Covenants:

 

Minimum Net Worth and Liquidity Covenants for Guarantors to be set forth as a
condition of approval.

 

 

 

Appraisal:

 

An appraisal will be ordered by M&T Bank. The appraisal must demonstrate an
as-stabilized market LTV of *** or less, when combined with the Letter of Credit
and Additional Collateral. The appraisal must satisfy M&T Bank and FIRREA
guidelines. Cost of the appraisal and review to be paid by the Borrower.

 

 

 

Environmental

 

 

Report:

 

An update to the existing Environmental Phase I Report will be required prior to
closing. All associated costs will be paid by the Borrower.

 

 

 

Subsequent

 

 

Financing:

 

Borrower will provide M&T Bank or its affiliates a right of first refusal, to
bid as Lender, for subsequent financing of the Property following maturity of
the loan.

 

 

 

Bank Deposits:

 

Borrower will maintain all operating deposits and treasury management services
supporting the property with M&T Bank or affiliates.

 

 

 

 

 

Tenant will maintain a depository relationship with the Bank in an amount
satisfactory to the Bank and Tenant.

 

 

 

***

 

 

***:

 

During ***, *** using the ***:

·      *** to be *** as *** by the *** of *** *** or *** of ***.

·      *** will be *** as the *** and the *** of *** or the *** in the ***.

 

Construction Controls:

 

1)          Acceptable construction budget with a contingency level of 5% of
hard costs.

2)          Bank must review and approve general contractor and GMP supporting
construction.

3)          General contractors and material sub-contracts must be acceptable to
the Bank.

4)          Minimum 10% retainage of all Direct Construction Costs.

5)          Evidence of all necessary required municipal approvals (sewer,
transportation, etc.) must be obtained prior to commencement of construction.

6)          Bank will order a plan and cost review of the proposed budget
(attached), as well as ongoing construction progress reports at the Borrowers
cost, which report must be acceptable in all respects.

7)          Draw requests for construction must be completed on standard AIA
forms and are subject to Bank review and approval.

8)          Lien waivers will be required prior to subsequent draws being
funded; a final lien waiver will be required at the point of the final draw.

 

Other Conditions:

 

1)          Borrower to pay all reasonable third party costs associated with the
Loan, legal, environmental, appraisal, engineering review etc.

2)          Receipt and satisfactory review of financial information on the
Borrower and Guarantors, including personal and company tax returns, personal
and company financial statements and any other information required by the Bank
to properly underwrite the loan request and sponsorship. Standard annual
submission of Borrower and Guarantors tax returns and financial statements.

3)          Escrow for real estate taxes and insurance to be required at
Lender’s discretion.

4)          Satisfactory due diligence and documentation by the Bank’s legal
counsel, costs to be paid by the Borrower.

5)          No subordinate financing will be permitted to encumber the property
prior to Bank’s consent.

6)          Any other items or reports reasonably required by M&T Bank.

 

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