Unassociated Document


    Exhibit
      10.1

    


    


    


    LEASE
      AGREEMENT

     

    FOR

     

    OFFICE
      SPACE

    


    AT

     

    STONE
      MANOR CORPORATE CENTER

    


    EASTON
      ROAD

    


    DOYLESTOWN
      AND WARRINGTON TOWNSHIPS, PA

    


    


    


    


    


    


    TENANT:
      DISCOVERY
      LABORATORIES, INC.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    INDEX

    


    PARAGRAPHPAGE

    


    
      	
              SCHEDULE

            	
              1

            
	
              1.

            	
              DEFINITIONS.

            	
              2

            
	
              2.

            	
              LEASE
                GRANT.

            	
              3

            
	
              3.

            	
              LEASE
                TERM.

            	
              3

            
	
              4.

            	
              USE.

            	
              4

            
	
              5.

            	
              BASE
                RENTAL.

            	
              4

            
	
              6.

            	
              OPERATING
                EXPENSES.

            	
              4

            
	
              7.

            	
              SERVICES
                TO BE FURNISHED BY LANDLORD.

            	
              7

            
	
              8.

            	 	
              9

            
	
              10.

            	 	
              9

            
	
              11.

            	
              REPAIRS
                AND ALTERATIONS BY TENANT.

            	
              10

            
	
              12.

            	
              PARKING.

            	
              11

            
	
              13.

            	
              LAWS,
                REGULATIONS AND RULES.

            	
              11

            
	
              14.

            	
              ENTRY
                BY LANDLORD; LIMITED ACCESS.

            	
              12

            
	
              15.

            	
              ASSIGNMENT
                AND SUBLETTING.

            	
              12

            
	
              16.

            	
              CONSTRUCTION
                LIENS.

            	
              14

            
	
              17.

            	
              INSURANCE.

            	
              15

            
	
              18.

            	
              WAIVER
                OF CLAIMS; WAIVER OF SUBROGATION.

            	
              17

            
	
              19.

            	
              INDEMNIFICATION.

            	
              17

            
	
              20.

            	
              CASUALTY
                DAMAGE.

            	
              18

            
	
              21.

            	
              CONDEMNATION.

            	
              18

            
	
              22.

            	
              EVENTS
                OF DEFAULT/REMEDIES.

            	
              19

            
	
              23.

            	
              PEACEFUL
                ENJOYMENT.

            	
              21

            
	
              24.

            	
              INTENTIONALLY
                DELETED.

            	
              21

            
	
              25.

            	
              HOLDING
                OVER.

            	
              21

            
	
              26.

            	
              SUBORDINATION
                TO MORTGAGE.

            	
              21

            
	
              27.

            	
              ESTOPPEL.

            	
              22

            
	
              28.

            	
              LANDLORD'S
                LIEN.

            	
              23

            
	
              29.

            	
              TELECOMMUNICATIONS.

            	
              23

            
	
              30.

            	
              NO
                IMPLIED WAIVER.

            	
              24

            
	
              31.

            	
              PERSONAL
                LIABILITY.

            	
              24

            
	
              32.

            	
              SECURITY
                DEPOSIT.

            	
              25

            
	
              33.

            	
              FORCE
                MAJEURE.

            	
              25

            
	
              34.

            	
              HAZARDOUS
                MATERIAL.

            	
              25

            
	
              35.

            	
              MISCELLANEOUS.

            	
              26

            
	 	 	 


    

     

    
      	 	 	 
	
              EXHIBIT
                A-1

            	
              SITE
                PLAN

            	 
	
              EXHIBIT
                A-2

            	
              PREMISES
                FLOOR PLAN

            	 
	
              EXHIBIT
                B

            	
              COMMENCEMENT
                DATE AGREEMENT

            	 
	
              EXHIBIT
                C

            	
              BUILDING
                RULES AND REGULATIONS

            	 
	
              EXHIBIT
                D

            	
              WORK
                LETTER

            	 
	
              EXHIBIT
                E

            	
              BUILDING
                SPECIFICATIONS

            	 
	 	 	 


    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    OFFICE
      LEASE AGREEMENT

    


    


    THIS
      LEASE AGREEMENT
      (the
      "Lease"),
      is
      dated for reference purposes as of May 26, 2004, between STONE MANOR CORPORATE
      CENTER, L.P., a
      Pennsylvania limited partnership ("Landlord"),
      and
      the Tenant named in Item 1 of the Schedule ("Tenant").

    


    The
      following Schedule (the "Schedule")
      is an
      integral part of this Lease and contains definitions of certain terms used
      in
      this Lease.

    


    SCHEDULE

    


    1.    Name
      of
      Tenant: Discovery Laboratories, Inc., a Delaware corporation.

    


    2.    Office
      Space:

    


    
      	 	
              a.

            	
              Building:
                A (as identified on the Site Plan.)

            


    

    


    
      	
            	b.	
              Floor:
                1st
                and 2nd,
                consisting of approximately 39,594 rentable square feet as defined
                in
                Paragraph
                1.7.

            


    

    


    
      	
            	c.	
              Premises:
                Suites 100 and 200.

            


    

    


    3.    Rentable
      Square Feet in Building: 60,859 square feet. 

    


    4.    Initial
      Base Rental (annual) for first Lease Year: $880,966.50.

    


    5.    Initial
      Monthly Installments of Base Rental for first Lease Year:
      $73,413.88.

    


    6.    Proportionate
      Shares:

    


    
      	 	
              a.

            	
              Tenant's
                Building Proportionate Share: To
                be determined based on the final rentable square footage of the Premises
                and the Building. See Paragraph
                6.1(d)
                below.

            


    

    


    
      	 	
              b.

            	
              Tenant’s
                Site Proportionate Share: To be determined based on the final rentable
                square footage of the Premises and all buildings within the Project.
                See
                Paragraph 6.1(f)
                below.

            


    

    


    7.    Security
      Deposit: $600,000. See Paragraph
      32
      below.

    


    
      
        8.    Tenant's
          Real Estate Broker: Julien J. Studley, Inc.

      

    

    


    9.    Allowance
      (see Exhibit D): $40.00 per rentable square foot.

    


    10.    Estimated
      Commencement Date (subject to Paragraph
      3.2):
      September 27, 2004.

    


    11.    Estimated
      Expiration Date (subject to Paragraph
      3.2):
      December 31, 2009.

    


    12.    Tenant's
      Address for Notices prior to taking possession of the Premises: 350 South Main
      Street, Suite 307, Doylestown, PA 18901.

    


    13.    Base
      Year: Calendar Year 2005.

    


    14.    Electric
      and Gas for Premises: to be paid by Tenant. See
      Paragraph 7.2.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


     

    1.    DEFINITIONS.

     

    


    1.1 "Base
      Rental"
      means
      the following amounts for the corresponding periods:

    


    
      	
               

              PERIOD

            	
               

              BASE
                RENTAL (annual)

            	
               

              MONTHLY
                INSTALLMENTS OF BASE RENTAL

            
	
               

              Rent
                Commencement Date through the last day of the first Lease
                Year

            	
               

              $880,966.56

            	
               

              $73,413.88

              ($
                22.25 x 39,594  ̧
                12)

            
	
               

              First
                day of second Lease Year through the last day of the second Lease
                Year

            	
               

              $900,763.56

            	
               

              $75,063.63

              ($22.75
                x 39,594  ̧
                12)

            
	
               

              First
                day of the third Lease Year through the last day of the third Lease
                Year

            	
               

              $920,560.56

            	
               

              $76,713.38

              ($23.25
                x 39,594  ̧
                12)

            
	
               

              First
                day of the fourth Lease Year through the last day of the fourth Lease
                Year

            	
               

              $940,357.56

            	
               

              $78,363.13

              ($23.75
                x 39,594  ̧
                12)

            
	
               

              First
                day of the fifth Lease Year through the last day of the Lease
                Term

            	
               

              $960,154.56

            	
               

              $80,012.88

              ($24.25
                x 39,594  ̧
                12)

            


    

    


    For
      purposes hereof, the term "Lease
      Year"
      means a
      period of 12 consecutive months beginning on the Commencement Date or an
      anniversary thereof and ending on (and including) the day immediately preceding
      the following anniversary thereof during the Lease Term, except that (a) if
      the
      Commencement Date is not the first day of a calendar month, then the first
      Lease
      Year will begin on the Commencement Date and end on (and include) the following
      anniversary of the last day of the calendar month in which the Commencement
      Date
      occurs, and each subsequent Lease Year will mean a period of 12 consecutive
      months beginning on an anniversary of the first day of the calendar month
      immediately following the calendar month in which the Commencement Date occurs
      and ending on (and including) the day immediately preceding the following
      anniversary thereof during the Lease Term, and (b) the last Lease Year will
      end
      on the last day of the Lease Term. The Base Rental due for the first month
      during the Lease Term is required to be deposited with Landlord by Tenant at
      the
      time of execution hereof.

    


    1.2 "Building"
      means
      the office building within the Project and Identified on the Schedule. The
      square footage of the Building, as set forth in the Schedule, was calculated
      by
      Landlord’s architect using the BOMA methodology.

    


    1.3 "Building
      Standard"
      means
      the type, brand or quality of materials, amount, level of performance, or
      standards, as the case may be, as established in this Lease or in the Building
      Rules and Regulations, or as designated from time to time by Landlord, to be
      the
      minimum quality to be used in the Building or the exclusive type, grade or
      quality of material to be used in the Building.

    


    1.4 "Building
      Common Areas"
      means
      those areas in the Building and devoted to corridors, elevator foyers,
      restrooms, mechanical rooms, elevators, janitorial closets, electrical and
      telephone closets, vending areas and other similar facilities provided for
      the
      common use or benefit of tenants generally and/or the public.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    1.5 "Exterior
      Common Areas"
      means
      the portion of the Project which are not located within the Building (or other
      buildings in the Project) and which are provided and maintained for the common
      use and benefit of the users of the Building or other buildings in the Project
      generally and the employees, invitees and licensees of Landlord and such
      tenants; including, without limitation, all parking areas, driveways, sidewalks
      and landscaped areas.

    


    1.6 "Lease
      Term"
      means
      the period beginning on the Commencement Date and ending on the Expiration
      Date
      (subject to Paragraph
      3.2).

    


    1.7 "Premises"
      are
      outlined on the floor plan attached as Exhibit A-2.
      The
      Premises are stipulated for all purposes to contain the number of rentable
      square feet as set forth in the Schedule. Unless otherwise expressly provided
      herein, any statement of square footage set forth in this Lease, or that may
      have been used in calculating rental, is an approximation which Landlord and
      Tenant agree is reasonable and the rental based thereon is not subject to
      revision whether or not the actual square footage is more or less. The square
      footage of the Premises, as set forth in the Schedule, was calculated by
      Landlord’s architect using the BOMA methodology, and will be confirmed by
      Landlord and Tenant and/or their respective architects, within 30 days after
      execution hereof.

    


    1.8 “Rent
      Commencement Date”
      means
      the date that is 3 months after the Commencement Date as determined in
      accordance with Paragraph
      3.2.

    


    1.9 "Project"
      means
      the lands and buildings known as Stone Manor Corporate Center, located at Easton
      Road, Doylestown and Warrington Townships, as further shown on the Site
      Plan.

    


    1.10 "Service
      Areas"
      means
      those areas within the outside walls used for elevator mechanical rooms,
      building stairs, fire towers, elevator shafts, flues, vents, stacks, pipe shafts
      and vertical ducts (but excluding any such areas for the exclusive use of a
      particular tenant).

    


    1.11 “Site
      Plan” means
      the
      Site Plan attached hereto as Exhibit
      A-1.

    


    1.12 "Work
      Letter"
      means
      the Work Letter attached as Exhibit D.

     

    2.    LEASE
      GRANT.

     

    Subject
      to and upon the terms herein set forth, Landlord leases to Tenant and Tenant
      leases from Landlord the Premises.

     

    3.    LEASE
      TERM.

     

    3.1 This
      Lease will continue in force during a period beginning on the Commencement
      Date
      and continuing until the Expiration Date, unless this Lease is terminated on
      an
      earlier date or extended to a later date under any other term or provision
      of
      this Lease.

    


    3.2 Landlord
      will have no liability to Tenant for failure to deliver possession of the
      Premises to Tenant by the date specified in Item 10 of the Schedule. If
      Landlord fails to deliver possession of the Premises by such date for any reason
      other than a Tenant Delay (as defined in the Work Letter), the Commencement
      Date
      will be deferred until Landlord delivers possession of the Premises, and the
      Expiration Date will be deferred for an equal amount of time. However, if the
      Expiration Date, as so extended, falls on other than the last day of a month,
      then the Expiration Date will be further extended to fall on the last day of
      such month. If Landlord fails to deliver possession of the Premises by the
      date
      specified in Item 10 of the Schedule due to a Tenant Delay, then the
      Commencement Date and the Expiration Date will not be deferred. If the Work
      described in the Work Letter is substantially completed (or would have been
      substantially completed but for a Tenant Delay) prior to the scheduled
      Commencement Date set forth in Item 10 of the Schedule, then the
      Commencement Date will be the date on which such Work is substantially completed
      in accordance with the Work Letter (or would have been substantially completed
      but for a Tenant Delay), and the Expiration Date will occur on the date set
      forth in the Schedule. However, if the Expiration Date falls on other than
      the
      last day of a month, then the Expiration Date will be further extended to fall
      on the last day of such month. Landlord and Tenant agree, upon demand by the
      other, to execute and deliver a Commencement Date Agreement in the form of
      Exhibit B
      attached. If Landlord makes such demand upon Tenant but Tenant fails to respond
      within 15 days, then Tenant will irrevocably be deemed to have agreed with
      Landlord as to the information set forth in the Commencement Date Agreement
      so
      delivered by Landlord to Tenant. 

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.3 Notwithstanding
      anything to the contrary set forth in this Lease, in the event that Tenant
      fails
      to execute this Lease by May 25, 2004, or after executing this Lease fails
      to
      deliver plans as required by Paragraph 16 of the Lease Addendum attached hereto,
      then the Estimated Commencement Date set forth in Item 10 of the Schedule and
      the Estimated Expiration Date set forth in Item 11 of the Schedule will each
      be
      extended by one day for each day until Tenant delivers plans as required by
      Paragraph 16 of the Lease Addendum attached hereto. 

     

    4.    USE.

     

    4.1 Tenant
      will use and occupy the Premises for the following use and for no other use
      or
      purpose: General office use, analytical laboratory space, sample storage and
      ancillary uses thereto as permitted under the Warrington Township Zoning
      Ordinance. 

    


    4.2 Notwithstanding
      the provisions of Paragraph 4.1,
      Tenant
      agrees not to use or permit the use of the Premises for any purpose which is
      illegal, or which, in Landlord's sole opinion, creates a nuisance or which
      would
      increase the cost of insurance coverage with respect to the Project. Landlord
      reserves the right to grant to anyone the exclusive right to conduct any
      business or render any service in the Project; such exclusive right will not
      operate to exclude Tenant from using the Premises for the use set forth
      Paragraph 4.1 above.

     

    5.    BASE
      RENTAL.

     

    


    Tenant
      will pay to Landlord during the Lease Term without any setoff or deduction
      whatsoever, the Base Rental and all such other money that becomes due hereunder
      as additional rent, all of which are sometimes herein collectively called
      "rent".
      The
      annual Base Rental then in effect for each calendar year or portion thereof
      will
      be due and payable in 12 equal installments on the first day of each calendar
      month during the Lease Term. Tenant agrees to pay all such sums in advance,
      and
      without demand. Tenant will pay all rent due to Landlord at Landlord's address
      in accordance with Paragraph 35.13.
      If the
      Rent Commencement Date commences on a day other than the first day of a month,
      or terminates on a day other than the last day of a month, then the installments
      of Base Rental and any adjustments thereto for such month or months will be
      prorated, based on the number of days in such month. Tenant will pay all sales
      taxes, governmental surcharges and the like levied or assessed against all
      rent
      payments due under this Lease simultaneously with each rent payment
      required.

     

    6.    OPERATING
      EXPENSES.

     

    6.1  
      For
      the
      purposes of this paragraph, the following definitions apply:

    


    (a)
 "Base
      Year"
      is
      defined in the Schedule on page 1 of this Lease.

    


    (b) “Operating
      Expenses”
is
      defined to include the Building Operating Expenses and the Site Operating
      Expenses.

    


    (c) "Building
      Operating Expenses"
      means
      all direct and indirect costs and expenses in each calendar year of operating,
      maintaining, repairing insuring, managing and owning the Building, including,
      without limitation, sums incurred for the following items: (i) real estate
      taxes
      and assessments of the Building, (ii) premiums incurred by Landlord to maintain
      the fire and casualty insurance coverage required to be carried by Landlord
      under Paragraph 17.2 of this Lease, (iii) all repairs and utilities to the
      Building not required to be paid by tenants; (iv) utility services (except
      to
      the extent, if any, that the cost thereof is separately metered and/or billed
      to
      Tenant or other tenants by Landlord pursuant to Paragraph
      7
      below)
      and systems, HVAC, plumbing electrical, fire detection and suppression,
      elevators and other Building services and systems, roof, windows, flooring
      and
      doors; janitorial; management fees; and (v) capital improvements which are
      (a)
      primarily for the purpose of reducing the Building Operating Expenses, or (b)
      required by governmental authorities. Building Operating Expenses will not
      include the cost of depreciation, interest, real estate lease commissions and
      principal payments on mortgage and other non-operating debts of Landlord.
      However, any capital expenditures shall be amortized on a straight line basis
      (with the period of the amortization to be reasonably determined by Landlord’s
      accountant based on the useful life of the capital expenditure), but not more
      than ten years and at an interest rate of one percent over the prime interest
      rate of Landlord’s lender, with the annual amortized cost included in the
      Building Common Expenses for each calendar year. 

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (d) "Tenant's
      Building Proportionate
      Share"
      is the
      percentage determined by dividing the total rentable square footage of the
      Premises by the total rentable square footage of the Building. Tenant’s Building
      Proportionate Share as of the date hereof is 65.06%.

    


    (e)
       “Site
      Operating Expenses”
means
      all direct and indirect costs and expenses in each calendar year of operating,
      maintaining, insuring, managing and owning all of the Exterior Common Areas,
      including, without limitation, sums incurred for the following items: (i) real
      estate taxes and assessments of the Exterior Common Areas, (ii) landscaping
      and
      grass cutting; snow and ice; cleaning; removal of trash and other debris from
      the grounds; lighting; preventative maintenance; repairs; painting; parking
      lots; driveways; access roads; personnel to maintain the Exterior Common Areas;
      management fees; utilities; (iii) premiums incurred by Landlord to maintain
      a
      commercial liability insurance policy on the Exterior Common Areas on such
      terms
      (including amounts of coverage) as are customary and reasonable under the
      circumstances; and (iv) capital improvements which are (a) primarily for the
      purpose of reducing the Site Operating Expenses, or (b) required by governmental
      authorities, or (c) related to the parking lots, driveways, access roads,
      sidewalks, curbs, utility lines and/or walking trails. However, any capital
      expenditures shall be amortized on a straight line basis (with the period of
      the
      amortization to be reasonably determined by Landlord’s accountant based on the
      useful life of the capital expenditure), but not more than ten years and at
      an
      interest rate of one percent over the prime interest rate of Landlord’s lender,
      with the annual amortized cost included in the Site Common Expenses for each
      calendar year. 

    


    (f) “Tenant’s
      Site Proportionate Share”
is
      the
      percentage determined by dividing the total rentable square footage of the
      Premises by the total rentable square footage of all the buildings in the
      Project. Tenant’s Site Proportionate Share shall be adjusted from time to time,
      during the term of this Lease, as and when additional buildings in the Project
      are constructed. 

    


    (g) "Expense
      Statement"
      means a
      statement from the Landlord setting forth the Operating Expenses.

    


    6.2 Tenant
      will, during the Lease Term, pay in addition to Base Rental hereunder an amount
      equal to (a) Tenant's Building Proportionate Share of the excess from time
      to
      time of actual Building Operating Expenses incurred by Landlord for any calendar
      year over the Building Operating Expenses incurred for the Base Year, and (b)
      Tenant’s Site Proportionate Share of the excess from time to time of actual Site
      Operating Expense incurred by Landlord for any calendar year over the Site
      Operating Expenses incurred for the Base Year (the excess amounts referenced
      in
      this Paragraph
      6.2
      are
      collectively referred to as the “Excess
      Operating Expenses”).

    


    6.3 For
      each
      calendar year after the Base Year, Landlord will furnish Tenant with an Expense
      Statement showing in reasonable detail the Operating Expenses incurred by
      Landlord for the calendar year. As part of the Expense Statement, Landlord
      may
      include an amount representing Tenant's share of the estimated Excess Operating
      Expenses to be incurred for the then current calendar year. Landlord
      will use reasonable efforts to deliver the annual Expense Statement within
      120
      days after the end of the applicable calendar year. Reasonable delays by
      Landlord in submitting such Expense Statements or mistakes by Landlord in such
      statements will not prejudice Landlord's right to collect any rent due under
      this Lease.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    6.4 Upon
      receipt of the estimate showing Tenant's share of Excess Operating Expenses
      for
      the current calendar year, the amount thereof will be divided into 12 equal
      monthly installments, and Tenant will pay Landlord, at the same time that the
      next regular monthly rental payment is due, the number of installments necessary
      to bring the Tenant current for the calendar year. Credit will be given for
      any
      payment of estimated increases already paid for those months. Subsequent
      installments will be payable together with the regular rent payments for the
      balance of the calendar year and will continue until payments begin under the
      following calendar year's Expense Statement.

    


    6.5 If
      Tenant's share of Excess Operating Expenses for a prior calendar year as shown
      on the Expense Statement is greater than the estimated payments made by Tenant
      for that year, then within 30 days following receipt by Tenant of the Expense
      Statement, Tenant will pay in full an amount equal to such excess. If Tenant's
      share of Excess Operating Expenses is less than the estimated payments made
      by
      Tenant for that year, then the amount of such overpayment will be credited
      against the next Operating Expense payments falling due,
      except
      that if this Lease expires before such credit is fully applied, Landlord will
      refund the unapplied balance to Tenant in cash. The obligations of Landlord
      and
      Tenant under this Paragraph 6.5 will survive expiration or termination of this
      Lease.

    


    6.6 If
      this
      Lease terminates before the end of a calendar year, payment will be based on
      the
      percentage of the year in which Tenant leased the Premises.

    


    6.7 Tenant
      shall have the right, exercised by written notice received by Landlord within
      30
      days after Tenant's receipt of the annual Expense Statement, to audit or cause
      to be audited, by an auditor selected by Tenant and reasonably satisfactory
      to
      Landlord, Landlord's books and records in respect of Operating Expenses for
      the
      fiscal year or portion thereof falling within the Lease Term. Such auditor
      must
      be an independent reputable accounting firm that is not being compensated on
      a
      contingency fee basis for the audit. Unless Tenant takes written exception
      of
      any item in any such statement within such 30-day period, such statement will
      be
      considered as final and accepted by Tenant. The audit must be performed during
      normal business hours and must be completed within 120 days after Tenant's
      receipt of such annual Expense Statement. The cost of such audit will be borne
      solely by Tenant. As
      a
      condition precedent to Tenant's right to dispute the Operating Expenses billed
      by Landlord pursuant to this Paragraph 6, Tenant must pay the total amount
      billed by Landlord hereunder within the time stipulated in this Lease.
Landlord
      will refund the amount, if any, due Tenant upon completion of the audit. In
      connection with any such audit, the following confidentiality provisions will
      apply:

    


    (a) All
      of
      the information obtained through Tenant's audit with respect to financial
      matters (including, without limitation, costs, expenses, income) and any other
      matters pertaining to the Landlord or the Project as well as any compromise,
      settlement, or adjustment reached between Landlord and Tenant relative to the
      results of the audit will be held in strict confidence by the Tenant and its
      officers, agents, and employees; and Tenant will cause its auditor and any
      of
      its officers, agents, and employees to be similarly bound pursuant to
clause
      (b)
      below.

    


    (b) As
      a
      condition precedent to Tenant's exercise of its right to audit, Tenant must
      deliver to Landlord a signed confidentiality covenant from the auditor in the
      form and substance satisfactory to Landlord.

    


    (c) Tenant
      understands and agrees that this provision is of material importance to the
      Landlord and that any violation of the terms of this provision will result
      in
      immediate and irreparable harm to Landlord. Landlord will have all rights
      allowed by law or equity if Tenant, its officers, agents, or employees or the
      auditor violate the confidentiality provisions of this Paragraph 6.7,
      including, without limitation, the right to terminate Tenant's right to audit
      in
      the future pursuant to this Paragraph 6.7.
      Tenant
      will indemnify, defend upon request, and hold Landlord harmless from and against
      all costs, damages, claims, liabilities, expenses, losses, court costs, and
      attorneys’ fees suffered by or claimed against Landlord, based in whole or in
      part upon the breach of this Paragraph 6.7
      by
      Tenant or its auditor; and will cause its auditor to be similarly bound under
      a
      signed confidentiality covenant from the auditor in the form and substance
      satisfactory to Landlord.

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (d)
       The
      obligations within the preceding clauses (a) through (c) of this
      Paragraph 6.7 will survive the expiration or earlier termination of this
      Lease.

    


    6.8 Notwithstanding
      any language in the Lease seemingly to the contrary, if the Building or the
      Project is less than fully occupied during any calendar year of the Lease Term,
      actual "Operating
      Expenses"
      for the
      purposes referenced above shall be determined as if the Building or the Project
      had been fully occupied during such year. If Landlord is not required to provide
      certain services to a tenant, then the costs of such services will be
      apportioned among the tenants provided with such services, and Tenant's share
      for such services will be recomputed to equal the ratio that Tenant's Premises
      bears to the total demised premises of tenants provided with such services.
      For
      the purposes of this Lease, "fully occupied" means occupancy of 95% of the
      rentable area in the Building or the Project, as applicable.

    


    6.9 Should
      the Commonwealth of Pennsylvania, or any political subdivision thereof, or
      any
      other governmental authority having jurisdiction over the Building and/or lands
      comprising the Exterior Common Areas (a) impose a tax, assessment, charge,
      or
      fee which Landlord shall be required to pay, wholly or partially, in
      substitution for real estate taxes, or (b) impose an income or franchise tax
      or
      a tax on rents, wholly or partially, in substitution for or as a supplement
      to a
      tax levied against the Building and/or lands comprising the Exterior Common
      Areas and/or the personal property used in connection therewith; then all such
      taxes, assessments, fees or charges shall be deemed to constitute real estate
      taxes included within the definition of Operating Expenses
      hereunder.

     

    7.    SERVICES
      TO BE FURNISHED BY LANDLORD.

     

    7.1 Landlord
      agrees to furnish Tenant the following defined basic services:

    


    (a) Hot
      and
      cold water at those points of supply provided for general use of tenants in
      the
      Building.

    


    (b) Central
      heat and air conditioning at such temperatures and in such amounts as are
      considered by Landlord to be standard or as required by governmental authority;
      provided, however, heating and air conditioning service at times other than
      for
      Normal Building Hours for the Building (as established by the Building Rules
      and
      Regulations, as described in Paragraph 13.2)
      shall
      be furnished only upon the written request of Tenant delivered to Landlord
      in
      accordance with the Building Rules and Regulations. Tenant will pay to Landlord
      its regular charges for such additional heating or air
      conditioning.

    


    If
      Tenant
      installs equipment which in Landlord’s opinion produces enough heat to cause
      comfort problems in the Building or any part thereof, or if Tenant desires
      a
      supplemental air conditioning system and Landlord has approved same, then
      Landlord may, at its option, either cause to be designed or permit Tenant to
      design a supplemental air conditioning system, subject to Landlord’s approval,
      and Landlord will install such system at Tenant’s expense substantially in
      accordance with such design. If Tenant has requested such supplemental system,
      Tenant will be responsible for determining that the design of such system is
      adequate for its needs. Tenant agrees to pay Landlord for such equipment,
      design, installation, metering and consumption of electricity and, if
      applicable, chilled water for supplemental air conditioning. During the Lease
      Term, Tenant will, at Tenant’s sole cost, repair and maintain such supplemental
      air conditioning system and keep the same in good condition. If such
      supplemental air conditioning is installed at the request of either Tenant
      or
      Landlord in a manner that utilizes the Building condenser water loop, Tenant
      will pay a one-time tap fee, payable within 30 days of invoicing from Landlord,
      at Landlord’s then established rate for such. Tenant will also pay for the
      necessary pump and piping to connect the supplemental air conditioning equipment
      to the Building condenser water risers. All systems and equipment installed,
      as
      provided herein above, will become part and parcel with the Building and forever
      remain Landlord’s property; provided
      that, at Landlord’s request given at the time Landlord approved the installation
      of such systems and equipment, Tenant will remove such systems and/or equipment
      prior to the expiration or termination of this Lease and repair any damage
      caused by such systems and equipment and its removal.

    


    
      
        
        

      

      
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    (c) Maintenance,
      repair and replacement for all Common Areas and Service Areas of the Building,
      including the systems, facilities and equipment necessary for the proper
      operation of the Project and for provision of Landlord’s other services set
      forth in this Paragraph, in the manner and to the extent found in comparable
      Class A office buildings in the Suburban Philadelphia area. Accordingly,
      Landlord will be responsible for and will maintain and repair the foundations,
      structure and roof of the Building and repair damage to the Building which
      Landlord insures against.

    


    (d) Nightly
      janitorial service, Monday through Friday, exclusive of normal business
      holidays; provided, however, if Tenant's floor covering or other improvements
      require special treatment, Tenant will pay the additional cleaning cost
      attributable thereto as additional rent upon presentation of a statement
      therefor by Landlord.

    


    (e) All
      Building Standard fluorescent bulb replacement in the Premises and fluorescent
      and incandescent bulb replacement in the Common Areas and Service
      Areas.

    


    7.2 Electricity
      and gas will be distributed to the Premises either by the utility companies
      serving the Building or, at Landlord's option, by Landlord; and Tenant will
      permit Landlord's wire and conduits, to the extent available, suitable and
      safely capable, to be used for such distribution. If and so long as Landlord
      is
      distributing electricity and/or gas to the Premises, Tenant will pay all of
      Landlord's charges for such electricity and gas, which charges will be based,
      at
      Landlord's option, on (i) meter readings, or (ii) on a survey of Tenant's
      electrical usage and gas usage made by Landlord, or (iii) on Tenant's prorata
      share of all space, including the Premises, which is commonly metered within
      the
      Building. Tenant's use of electrical services or gas furnished by Landlord
      must
      not exceed, either in voltage, rated capacity, or overall load or usage, that
      which Landlord deems to be Building Standard. 

    


    Notwithstanding
      the foregoing, Landlord shall have the right, at Landlord’s cost to install a
      separate meter or meters to measure the gas and/or electricity used by Tenant
      in
      the Premises. In the alternative to Landlord installing a separate meter for
      Tenant, Landlord may install one meter for the floor of the Building upon which
      Tenant is located or one meter for the entire Building and pro-rate Tenant’s gas
      and electric charges based upon the square footage of space occupied by the
      users of such gas and/or electric service.

    


    Presently
      PECO (“Electric
      Service Provider”)
      is the
      utility company selected by Landlord to provide electricity service for the
      Project. Notwithstanding the foregoing, if permitted by law, Landlord will
      have
      the right at any time and from time to time during the Lease Term to either
      contract for service from a different company or companies providing electricity
      service (each such company hereinafter being referred to as an (“Alternate
      Service Provider”)
      or
      continue to contract service from the Electric Service Provider. Tenant will
      cooperate with Landlord, the Electric Service Provider and any Alternate Service
      Provider at all times and, as reasonably necessary, will allow Landlord,
      Electric Service Provider, and any Alternate Service Provider reasonable access
      to the Building’s electric lines, feeders, risers, wiring, and any other
      machinery within the Premises. Landlord will not be liable or responsible for
      any loss, damage, or expense that Tenant sustains or incurs by reason of any
      failure, interference, disruption, or defect in the supply or character of
      the
      electric energy furnished to the Premises, or if the supply or character of
      the
      electrical energy supplied by the Electric Service Provider or any Alternate
      Service Provider is no longer available or suitable for Tenant’s requirements,
      and no such change, failure, defect, unavailability, or unsuitability will
      constitute an actual or constructive eviction, in whole or in part, or entitle
      Tenant to any abatement or diminution of rent, or relieve Tenant from any of
      its
      obligations under the Lease. 

    


    7.3 The
      failure by Landlord to any extent to furnish, or the interruption or termination
      of, the defined services in whole or in part, will not render Landlord liable
      in
      any respect nor be construed as an eviction (constructive or otherwise) of
      Tenant, nor work an offset or abatement of rent, nor relieve Tenant from the
      obligation to fulfill any covenant or agreement of this Lease.

    


    
      
        
        

      

      
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    7.4 If
      any of
      the equipment or machinery used in the provision of defined services, for any
      cause, ceases to function properly, Tenant will have no claim for offset or
      abatement of rent or damages on account of an interruption in service occasioned
      thereby or resulting therefrom.

    


    7.5 Except
      as
      otherwise expressly provided herein, Landlord will not be required to perform
      any maintenance on or make any repairs to the Premises. 

     

    8.    CONDITION
      OF PREMISES.

     

    8.1 Except
      as
      otherwise expressly provided in this Paragraph or in the Work Letter, all
      installations and improvements now or hereafter placed on the Premises will
      be
      for Tenant's account and at Tenant's cost (and Tenant will pay ad valorem taxes
      and increased insurance thereon or attributable thereto), which cost will be
      payable by Tenant to Landlord as additional rent in accordance with provisions
      of the Work Letter. Except to the extent expressly indicated in the Work Letter,
      Landlord is leasing the Premises to Tenant "as is," without any representations
      or warranties of any kind (including, without limitation, any express or implied
      warranties of merchantability, fitness or habitability). If so indicated in
      the
      Work Letter, Landlord will cause the Premises to be completed in accordance
      with
      the plans, specifications, and agreements and on the terms, conditions and
      provisions as provided in the Work Letter. Taking possession of the Premises
      by
      Tenant will be conclusive evidence as against Tenant that the Premises were
      in
      good and satisfactory condition when possession was so taken, except as
      otherwise expressly provided in the Work Letter. 

    


    8.2 Landlord,
      at Landlord’s cost, shall complete the site improvements set forth on the Site
      Pan and which are required for Tenant’s use and occupancy of the Premises.
      Tenant acknowledges and understands that Landlord reserves the right to change,
      so long as such changes do not have a material and adverse impact on Tenant’s
      business operations, (a) the size, design, use or location of any of the
      buildings or other improvements proposed by Landlord to be built on the Property
      as part of the Project, and (b) any of the Exterior Common Areas.

    


    8.3 Landlord,
      at Landlord’s cost, shall construct the Building in accordance with the
      specifications attached hereto as Exhibit
      E.
      Tenant
      acknowledges and understands that Landlord reserves the right to change, so
      long
      as such changes to not have a material and adverse impact on Tenant’s proposed
      use of the Premises, the specifications attached hereto as Exhibit
      E. 

    


    8.4 The
      completion of the work required to prepare the Premises for Tenant’s occupancy
      shall be governed by the Work Letter attached hereto as Exhibit
      D.

    


    9.    GRAPHICS.

    


    Landlord
      will provide and install all signage at each entrance door to the Premises
      and
      on the Building directory. All such signage will be in the standard graphics
      for
      the Building and no others may be used or permitted on the Premises or on the
      directory without Landlord's prior written consent. Such door signage will be at
      Tenant’s cost, but Tenant may apply the Allowance (defined in the Work Letter)
      toward the cost of initial signage at each entrance door to the Premises. Tenant
      will be entitled to two lines on the directory located in the lobby of the
      Building, without charge. In addition, Landlord shall, subject to Landlord’s
      receipt of all applicable approvals, provide and install identification numbers
      on the Building, directional signs identifying the Building along Kelly Road,
      and monument signs at the front and rear main entrances of the Building
      identifying Tenant and all other tenants of the Building. Landlord shall use
      reasonable efforts to obtain all applicable approvals for such signage. All
      such
      signage will be in the standard graphics for the Building and no others may
      be
      used or permitted without Landlord's prior written consent. 

     

    10.    CARE
      OF THE PREMISES BY TENANT.

     

    Tenant
      will not commit or allow any waste to be committed on any portion of the
      Premises, and at the termination of this Lease, Tenant will deliver the Premises
      to Landlord in as good condition as at the Commencement Date, ordinary wear
      and
      use excepted.

     

    
      
        
        

      

      
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    11.    REPAIRS
      AND ALTERATIONS BY TENANT.

     

    11.1 Tenant
      will, at Tenant's own cost and expense, repair any damage done to the Project,
      or any part thereof, including replacement of damaged portions or items, caused
      by Tenant or Tenant's agents, employees, invitees, or visitors, and Tenant
      covenants and agrees to make all such repairs as may be required to restore
      the
      Project to as good a condition as it was in prior to such damage. All such
      work
      or repairs by Tenant must be effected in compliance with all applicable laws;
      provided, however, if Tenant fails to make such repairs or replacements
      promptly, Landlord may, at its option, make repairs or replacements, and Tenant
      will pay the cost thereof to the Landlord within 10 days of Landlord's demand
      therefor, as additional rent. The
      provisions of this Paragraph
      11.1
      will
      survive expiration or termination of this Lease.

    


    11.2 Tenant
      agrees not to install or allow to be installed any vending machines on the
      Premises, and will not place or allow to be placed any signs on the Premises
      which are visible from outside the Premises, without first obtaining the prior
      written consent of Landlord in each such instance, which consent may be given
      on
      such conditions as Landlord may elect. 

    


    11.3 Any
      alterations, additions or improvements made by or on behalf of Tenant to the
      Premises (“Tenant-Made
      Alterations”)
      will
      be subject to Landlord’s prior written consent, which consent may be given on
      such conditions as Landlord may elect. Tenant will cause, at its expense, any
      Tenant-Made Alterations to comply with applicable insurance requirements and
      with all applicable laws, codes and governmental regulations, and will construct
      at its expense any alteration or modification required by applicable laws,
      codes
      or governmental regulations as a result of any Tenant-Made Alterations. All
      Tenant Made-Alterations must be constructed in a good and workmanlike manner
      by
      contractors reasonably acceptable to Landlord and only good grades of materials
      may be used. All plans and specifications for any Tenant-Made Alterations must
      be submitted to Landlord for its approval. Landlord may monitor construction
      of
      the Tenant-Made Alterations. Tenant will pay Landlord’s standard charges for
      review of Tenant’s plans, permits, lien waivers, certificates and the like and
      for monitoring construction. Landlord’s right to review plans and specifications
      and to monitor construction will be solely for its own benefit, and Landlord
      will have no duty to see that such plans and specifications or construction
      comply with applicable laws, codes, rules and regulations. Tenant will provide
      Landlord with the identities and mailing address of all persons performing
      work
      or supplying materials, prior to beginning such construction, and Landlord
      may
      post on and about the Premises notices of nonresponsibility pursuant to
      applicable law. Tenant will furnish security or make other arrangements
      satisfactory to Landlord to assure payment for the completion of all work free
      and clear of liens and will provide certificates of insurance for worker’s
      compensation and other coverage in amounts and from an insurance company
      satisfactory to Landlord protecting Landlord against liability for personal
      injury and property damage during construction. Landlord may elect to require
      Tenant to insure any such Tenant-Made Alterations in accordance with
Paragraph 17.1(a).
      In
      connection with any Tenant-Made Alterations, Tenant’s contractor must (and its
      contract must so provide):

    


    (a) conduct
      its work in such a manner so as not to unreasonably interfere with other
      tenants, Project operations, or any other construction occurring on or in the
      Project or in the Premises;

    


    (b) execute
      a
      set of and comply with the Building’s then-current Tenant Contractor Rules and
      Regulations and comply with all additional rules and regulations relating to
      construction activities in or on the Project as may be promulgated from time
      to
      time and uniformly enforced by Landlord or its agents; 

    


    (c) deliver
      to Landlord detailed "as built" plans immediately after the alterations or
      improvements are complete, if requested by Landlord; and

    


    (d) be
      responsible for reaching an agreement with Landlord and its agents as to the
      terms and conditions for all contractor items relating to the conducting of
      its
      work including, but not limited to, those matters relating to hoisting, systems
      interfacing, use of temporary utilities, storage of materials and access to
      the
      Premises.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Landlord
      will have the right to approve Tenant’s contractor and all subcontractors to be
      used by Tenant's contractor, which approval will not be unreasonably withheld.
      Upon completion of any Tenant-Made Alterations, Tenant will deliver to Landlord
      sworn statements setting forth the names of all contractors, subcontractors
      and
      material suppliers who did work on or supplied materials for the Tenant-Made
      Alterations, and final lien waivers from all such contractors, subcontractors
      and material suppliers. Tenant will have no right to make any repairs,
      alterations or improvements to, within or on any of the Common Areas without
      Landlord’s prior written consent, which may be withheld in Landlord’s sole and
      absolute discretion.

    


    11.4 Any
      and
      all alterations or improvements to the Premises will become the property of
      Landlord upon termination of this Lease (except for movable equipment, trade
      fixtures or furniture owned by Tenant). Landlord may, at the time Landlord
      approves the installation of any such fixtures, equipment, alterations or
      improvements, nonetheless, require Tenant to remove any and all fixtures,
      equipment and other alterations or improvements installed on the Premises and
      restore the Premises to Building Standard. If Landlord so requires at the time
      Landlord approves the installation of any such fixtures, equipment, alterations
      or improvements and Tenant fails to remove such improvements upon termination
      of
      this Lease, Landlord may remove such improvements at Tenant's cost, and Tenant
      will pay Landlord on demand the cost of restoring the Premises to Building
      Standard. The
      provisions of this Paragraph 11.4
      will
      survive expiration or termination of this Lease. See
      Paragraph 29
      for
      additional provisions regarding telecommunication lines and
      equipment.

     

    12.    PARKING.

     

    12.1 During
      the Lease Term, Tenant will have the non-exclusive use in common with Landlord,
      other tenants of the Building, other occupants in the Project, their guests
      and
      invitees, of the non-reserved common automobile parking areas, driveways, and
      footways, subject to rules and regulations for the use thereof as prescribed
      from time to time by Landlord.

    


    12.2 Tenant's
      use of the Building's parking areas (including, without limitation, unassigned
      parking and any assigned parking now or hereafter granted to Tenant from time
      to
      time) may not exceed 4.3 parking spaces per 1,000 rentable square feet in the
      Premises. No specific designated parking spaces will be assigned to Tenant
      unless otherwise agreed by Landlord and Tenant in writing. Landlord will have
      the right to reserve parking spaces as it elects and condition use thereof
      on
      such terms as it elects. 

    


    12.3 All
      such
      parking shall be subject to rules and regulations for the use thereof as
      prescribed from time to time by Landlord. Landlord will not be responsible
      for
      money, jewelry, automobiles or other personal property lost in or stolen from
      the Building's parking areas, or for vandalism to automobiles occurring in
      the
      Building's parking areas, it being agreed that, to the fullest extent permitted
      by law, the use of the Building's parking areas will be at the sole risk of
      Tenant and its employees. Landlord will have the right to temporarily close
      the
      Building's parking areas to perform necessary repairs, maintenance and
      improvements to the parking areas.

     

    13.    LAWS,
      REGULATIONS AND RULES.

     

    13.1 Tenant
      will comply with all governmental laws, ordinances, rules and regulations
      applicable to Tenant's use of the Premises.

    


    13.2 A
      copy of
      the initial Building Rules and Regulations is attached hereto as Exhibit C.
      Tenant
      will comply with such initial Building Rules and Regulations and with all
      reasonable additional Building Rules and Regulations and reasonable amendments
      to the Building Rules and Regulations adopted by Landlord from time to time,
      and
      will cause all of its agents, employees, invitees and visitors to do so. All
      changes to such rules will be furnished by Landlord to Tenant in writing.


    


    13.3 Landlord
      will not be responsible to Tenant for the nonperformance of any such Building
      Rules and Regulations by any other tenant or occupant of the
      Building.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    14.    ENTRY
      BY LANDLORD; LIMITED ACCESS. 

     

    14.1 Tenant
      will permit Landlord, upon at least twenty-four (24) hours prior notice, or
      its
      agents or representatives to enter into and upon any part of the Premises at
      all
      reasonable hours (and in emergencies at all times) to inspect the condition,
      occupancy or use; to show the Premises to prospective purchasers, mortgagees,
      or
      insurers or (during the last 9 months of the Lease Term) tenants, or to clean
      or
      make repairs, alterations or additions. Tenant will not be entitled to any
      abatement or reduction of rent by reason of this right of entry.

    


    14.2 Building
      entry at times other than for Normal Building Hours (as established by the
      Building Rules and Regulations, as described in Paragraph
      13.2)
      may be
      limited to a single entrance. In addition, Landlord reserves the right to close
      the Building outside of Normal Building Hours (as established by the Building
      Rules and Regulations, as described in Paragraph
      13.2)
      subject, however, to Tenant's right to admittance under such regulations as
      Landlord may prescribe from time to time. Notwithstanding the foregoing,
      Landlord is not and will not be obligated to provide a security guard or any
      other security services for the Project. Under no circumstances will Landlord
      or
      its managing agent or their respective agents or employees be liable for, and
      Tenant waives all claims with respect to, (a) any damages, injuries or
      losses sustained by Tenant or any occupant of the Premises or their respective
      agents, employees, licensees or invitees, including any property or
      consequential damages, resulting from Landlord's failure to provide security
      or
      adequate security for the Project, or (b) losses due to theft or burglary,
      or (c) the damages done by unauthorized persons on the Premises and neither
      will Landlord be required to insure against any such losses. Tenant will
      cooperate fully in Landlord's efforts to maintain security in the Project and
      will follow all rules and regulations promulgated by Landlord with respect
      thereto.

    


    14.3 Subject
      to the terms and conditions of this Lease and the Rules and Regulations, Tenant
      shall have access to the Building and the Premises at all times, twenty-four
      (24) hours per day, seven (7) days per week, three hundred sixty five (365)
      days
      per year. Landlord shall provide Tenant with a sufficient number of keys, access
      cards or other devices as required to allow Tenant and Tenant’s employees access
      as provided for herein.

     

    15.    ASSIGNMENT
      AND SUBLETTING.

     

    15.1 Tenant
      will not assign this Lease, or any interest therein, and will not sublet the
      Premises, or any part thereof, or any right or privilege appurtenant thereto,
      or
      suffer any other person to occupy or use the Premises, or any portion thereof,
      without first requesting the consent of Landlord, in writing, not more than
      120
      but not less than 60 days before the effective date of such assignment or
      sublease, and obtaining such consent in writing. Any request by Tenant for
      Landlord's consent to a sublease or assignment must be accompanied by a copy
      of
      the proposed terms of sublease or assignment agreement and reasonably detailed
      information and documentation, including current financial statements, regarding
      the proposed sublessee or assignee. Landlord agrees not to unreasonably withhold
      consent to any such assignment of this Lease or subletting of the Premises
      (except for any extension or expansion options or any rights of first refusal
      or
      first offer for which consent may be arbitrarily withheld), provided Tenant
      requests the same in writing and provided (i) at the time thereof Tenant is
      not
      in default under this Lease, (ii) Landlord, in its sole discretion reasonably
      exercised, determines that the proposed use of the Premises, and the reputation,
      business, and financial responsibility of the proposed assignee or sublessee,
      are satisfactory to Landlord, (iii) any assignee or sublessee expressly assumes
      all the obliga-tions of this Lease on Tenant's part to be per-formed, (iv)
      such
      consent, if given, will not release Tenant of any of its obliga-tions under
      this
      Lease, including with-out limitation, its obligation to pay rent, (v) a consent
      to one assignment or subletting will not be deemed to be a consent to any
      subsequent assignment or subletting, (vi) if Landlord has comparable space
      available in the Building or any other building in the Project, the proposed
      assignee or sublessee is not a tenant in the Building or the Project, or the
      subtenant or assignee of any such tenant, (vii) the proposed assignee or
      sublessee is not a person or entity with whom Landlord or its agent is then
      negotiating or to or from whom Landlord or its agent has given or received
      any
      written or oral proposal within the past 6 months regarding a lease of space
      in
      the Building or the Project, (viii) the rental rate being charged to the
      sublessee or assignee is not less than that being offered by Landlord for
      comparable space in the Building, and (ix) the proposed sublessee or assignee
      is
      not a government entity. 

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    No
      permitted subtenant may assign or encumber its sublease or further sublease
      all
      or any portion of its subleased space, or otherwise permit the subleased space
      or any part of its subleased space to be used or occupied by others, without
      Landlord's prior written consent in each instance. Tenant may not mortgage,
      pledge or hypothecate its leasehold interest, and any attempted assignment,
      sublease or other transfer or encumbrance by Tenant in violation of the terms
      and covenants of this Paragraph 15
      will be
      void.

    


    Neither
      this Lease nor any interest therein will be assignable as to the interest of
      Tenant by operation of law without consent of Landlord, which consent may be
      withheld in Landlord’s reasonable discretion. Tenant agrees that if Landlord
      withholds its consent to any assignment, subletting, or occupancy contrary
      to
      the provisions of this Paragraph, Tenant's sole remedy will be to seek an
      injunction in equity to compel performance by Landlord to give its consent
      and
      Tenant expressly waives any right to damages for any such withholding by
      Landlord of its consent.

    


    For
      purposes of this Paragraph 15,
      any
      transfer of the ownership interests controlling Tenant will be deemed an
      assignment of this Lease unless such ownership interests are publicly traded.
      However, on the condition that Tenant is not in default of any term, covenant
      or
      condition of this Lease, Tenant will have the right, with advance written notice
      to but without the consent of Landlord, to sublease the Premises, or a portion
      thereof, to any corporation or entity which controls, is controlled by or is
      under common control with Tenant, or any subsidiary of Tenant, on the condition
      that (y) such sublease is for a good business purpose and not principally for
      the purpose of avoiding Landlord's consent rights, and (z) the proposed use
      of
      the Premises and the reputation, business, and financial responsibility of
      the
      proposed sublessee are consistent with the first-class nature of the Building.
      The term "control" as used in this Paragraph means a direct or indirect
      ownership interest with the power to directly or indirectly direct or cause
      the
      direction of the management or policies of the Tenant.

    


    In
      connection with each request by Tenant for Landlord's consent to a sublease
      or
      assignment, Tenant will pay to Landlord the following, regardless of whether
      such consent is granted or denied: an amount equal to Landlord's out-of-pocket
      administrative, legal and other costs and expenses incurred in processing such
      request or otherwise incurred in connection with such sublease or assignment,
      said amount not to exceed $1,500.

    


    If
      all or
      any part of the Premises are then subleased, any termination of this Lease
      or of
      Tenant's right to possession in connection with an Event of Default will, at
      Landlord's option, either, (a) terminate the sublease or (b) operate as an
      assignment to Landlord of the sublease. Landlord shall not be liable for any
      prepaid rents nor any security deposits paid by the subtenant. Landlord will
      not
      be liable for any other defaults of the Tenant under the sublease
      agreement.

    


    15.2 Tenant's
      request for Landlord's consent to the subletting or assignment as described
      above will be deemed to be an offer by Tenant to sublet the space described
      in
      Tenant’s notice for the term set forth in Tenant’s notice and upon all the other
      terms, covenants and conditions as are contained in this Lease or to assign
      this
      Lease to Landlord at Landlord's option. If Landlord does not accept such deemed
      offer in writing within 20 days after the effective date of Tenant's notice,
      then Landlord's right to sublease the Premises or acquire this Lease by
      assignment will be deemed to be waived. Alternatively, at Landlord's option,
      Landlord may, by giving written notice to Tenant within 20 days after the
      effective date of Tenant's notice, terminate this Lease with respect to the
      space described in Tenant's notice, as of the date specified in Tenant's notice
      for the commencement of the proposed assignment. Landlord’s failure to respond
      to Tenant within such 20 day period shall be deemed as Landlord’s refusal of
      such proposed subletting or assignment, and nothing in this Paragraph 15.2
      will be
      deemed to be a consent by Landlord to any subletting or assignment unless
      Landlord delivers to Tenant its written consent. Notwithstanding Landlord's
      consent on any one occasion, the right to recapture set forth in this
Paragraph 15.2
      will
      apply to any further assignment. 

    


    15.3 If
      Landlord consents to any sublease or assignment of the Premises, or any part
      thereof, Tenant will in consideration therefor pay to Landlord, as additional
      rent, 50% of the Excess Rent (defined below) after deducting from Excess Rent
      the reasonable and customary out-of-pocket transaction costs incurred by Tenant
      in connection with such subletting or assignment, including reasonable
      attorneys' fees, brokerage commissions, and alteration costs (which transaction
      costs will be amortized on a straight-line basis over the term of the sublease
      or assignment, as the case may be). For purposes of this Paragraph, "Excess
      Rent"
      means
      all rents, additional charges, and other consideration payable to Tenant by
      the
      subtenant or assignee for or by reason of such sublease or assignment and which
      are, in the aggregate, in excess of the rent payable under this Lease for the
      subleased or assigned space during the term of the sublease or assignment.
      Any
      amounts payable by Tenant pursuant to this Paragraph will be paid by Tenant
      to
      Landlord as and when amounts on account thereof are paid by any subtenant or
      assignee to Tenant, and Tenant agrees to promptly furnish such information
      with
      regard thereto as Landlord may request from time to time. Landlord
      may at any time and from time to time, but in no event more than one time per
      year, upon prior notice to Tenant audit and inspect Tenant's books, records,
      accounts, and federal income tax returns to verify the determination of
      additional rent payable under this Paragraph.

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    15.4 Tenant
      will not publicly advertise the rate for which Tenant is willing to sublet
      the
      space or assign the Lease. All public advertisements of the assignment of the
      Lease or sublease of the Premises, or any portion thereof, are subject to prior
      written approval by Landlord, which consent shall not be unreasonably withheld.
      The placement or display of any signs or lettering on the exterior of the
      Premises, or on the glass or any window or door of the Premises, or in the
      interior of the Premises if it is visible from the exterior, is strictly
      prohibited.

    


    15.5 The
      listing or posting of any name, other than that of Tenant, whether on the door
      or exterior wall of the Premises, the Building's tenant directory in the lobby
      or elevator, or elsewhere, will not (a) constitute a waiver of Landlord's right
      to withhold consent to any sublet or assignment pursuant to this Paragraph,
      (b)
      be deemed an implied consent by Landlord to any sublet of the Premises or any
      portion thereof, to any assignment or transfer of the Lease, or to any
      unauthorized occupancy of the Premises, except in accordance with the express
      terms of the Lease, or (c) operate to vest any right or interest in the Lease
      or
      in the Premises.

    


    15.6 In
      the
      case of any assignment of this Lease by Tenant, the assignor and the assignee
      will be jointly and severally liable for all of the obligations of the tenant
      under this Lease. The joint and several liability of Tenant named herein and
      any
      immediate and remote successor in interest of Tenant (by assignment or
      otherwise), and the due performance of the obligations of this Lease on Tenant's
      part to be performed or observed, will not in any way be discharged, released
      or
      impaired by any (a) agreement which modifies any of the rights or obligations
      of
      the parties under this Lease, (b) stipulation which extends the time within
      which an obligation under this Lease is to be performed, (c) waiver of the
      performance of an obligation required under this Lease, or (d) failure to
      enforce any of the obligations set forth in this Lease.

    


    15.7 Anything
      contained in the foregoing provisions of this Paragraph 15
      to the
      contrary notwithstanding, neither Tenant nor any other person having an interest
      in the possession, use, occupancy or utilization of the Premises may enter
      into
      any lease, sublease, license, concession or other agreement for use, occupancy
      or utilization of space in the Premises which provides for rental or other
      payment for such use, occupancy or utilization based, in whole or in part,
      on
      the net income or profits derived by any person from the Premises leased, used,
      occupied or utilized (other than an amount based on a fixed percentage or
      percentages of receipts of sales), and any such proposed lease, sublease,
      license, concession or other agreement will be absolutely void and ineffective
      as a conveyance or any right or interest in the possession, use, occupancy
      or
      utilization of any part of the Premises.

     

    16.    CONSTRUCTION
      LIENS.

     

    16.1 Tenant
      will not permit any construction or mechanic's lien or liens to be placed upon
      the Premises or the Project. Nothing in this Lease will be deemed or construed
      in any way as constituting the consent or request of Landlord, express or
      implied, to any person for the performance of any labor or the furnishing of
      any
      materials to all or part of the Premises, nor as giving Tenant any right, power,
      or authority to contract for or permit the rendering of any services or the
      furnishing thereof that would or might give rise to any construction, mechanic's
      or other liens against the Premises.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    16.2 If
      any
      such lien is claimed against the Premises, then Tenant will discharge said
      lien
      or cause the same to be bonded or insured over in an amount and by a bonding
      company or title insurance company reasonably satisfactory to Landlord, within
      10 days of filing, failing which, in addition to any other right or remedy
      of
      Landlord, Landlord may, but will not be obligated to, discharge the same. Any
      amount paid by Landlord for such purposes will be paid by Tenant to Landlord
      as
      additional rent within 10 days of Landlord's demand therefor.

    


    16.3 Landlord's
      interest in the Premises will not be subject to liens for improvements made
      by
      the Tenant, and Tenant will have no power or authority to create any lien or
      permit any lien to attach to the Premises or to the present estate, reversion
      or
      other estate of Landlord in the Premises herein demised or other improvements
      thereon as a result of improvements made by Tenant or for any other cause or
      reason. All materialmen, contractors, artisans, mechanics and laborers and
      other
      persons contracting with Tenant with respect to the Premises or any part
      thereof, or any such party who may avail himself of any lien against realty
      (whether same proceeds in law or in equity), are hereby charged with notice
      that
      such liens are expressly prohibited and that they must look solely to Tenant
      to
      secure payment for any work done or material furnished for improvements by
      Tenant or for any other purpose during the Lease Term. Tenant will indemnify
      Landlord against any loss or expenses incurred as a result of the assertion
      of
      any such lien.

     

    17.    INSURANCE. 

     

    17.1 Tenant's
      Insurance.
      Tenant
      will secure and maintain, at Tenant's expense:

    


    (a) All
      risk
      property insurance (including extra expense insurance) on all of Tenant's
      fixtures and personal property in the Premises, and on any alterations,
      additions or improvements which Landlord requires Tenant to insure in accordance
      with Paragraph 11,
      all for
      the full replacement cost thereof. Tenant will use the proceeds from such
      insurance for the replacement of fixtures and personal property and for the
      restoration of any such alterations, additions or improvements as set forth
      in
      Paragraph 20. Landlord will be named as loss payee as respects its interest
      in any such alterations, additions, or other improvements.

    


    (b) Business
      income insurance with limits not less than Tenant's 100% gross revenue for
      a
      period of 12 months.

    


    (c) Workers
      compensation and employers liability insurance. Workers compensation insurance
      in statutory limits will be provided for all employees. The employers liability
      insurance will afford limits not less than $500,000.00 per accident, $500,000.00
      per employee for bodily injury by disease, and $500,000.00 policy limit for
      bodily injury by disease.

    


    (d) Commercial
      general liability insurance which insures against claims for bodily injury,
      personal injury, advertising injury, and property damage based upon, involving,
      or arising out of the use, occupancy, or maintenance of the Premises and the
      Project. Such insurance will afford, at a minimum, the following
      limits:

    

      
        	
                Each
                  Occurrence

              	 	
                $

              	
                1,000,000.00

              	 
	
                General
                  Aggregate

              	 	 	
                1,000,000.00

              	 
	
                Products/Completed
                  Operations Aggregate

              	 	 	
                2,000,000.00

              	 
	
                Personal
                  and Advertising Injury Liability

              	 	 	
                1,000,000.00

              	 
	
                Fire
                  Damage Legal Liability

              	 	 	
                50,000.00

              	 
	
                Medical
                  Payments

              	 	 	
                5,000.00

              	 


      

    

    


    Such
      insurance will name Landlord, its trustees and beneficiaries, Landlord's
      mortgagees, Landlord's managing agent, Landlord's advisor, and their respective
      officers, directors, agents and employees, as additional insureds (the
      "Required
      Additional Insureds").

    


    This
      coverage must include blanket contractual liability, broad form property damage
      liability, and must contain an exception to any pollution exclusion which
      insures damage or injury arising out of heat, smoke, or fumes from a hostile
      fire. Such insurance must be written on an occurrence basis and contain a
      standard separation of insureds provision.

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (e) Business
      auto liability which insures against bodily injury and property damage claims
      arising out of the ownership, maintenance, or use of "any auto." A minimum
      of a
      $1,000,000.00 combined single limit per accident will apply.

    


    (f) Umbrella
      excess liability insurance, on an occurrence basis, that applies excess of
      required commercial general liability, business auto liability, and employers
      liability policies, which insures against bodily injury, property damage,
      personal injury and advertising injury claims with the following minimum
      limits:

     

    
      
        	
                Each
                  Occurrence

              	 	
                $

              	
                5,000,000.00

              	 
	
                Annual
                  Aggregate

              	 	 	
                5,000,000.00

              	 
	 	 	 	 	 


      

    

    


    These
      limits must be in addition to and not including those stated for underlying
      commercial general liability, business auto liability, and employers liability
      insurance. Such policy must name the Required Additional Insureds as additional
      insureds.

    


    (g) General
      insurance requirements.
      All
      policies required to be carried by Tenant hereunder must be issued by and
      binding upon an insurance company licensed to do business in the state in which
      the property is located with a rating of at least "A-" "XII" or better as set
      forth in the most current issue of Best's Key Rating Guide, unless otherwise
      approved by Landlord. Tenant will not do or permit anything to be done that
      would invalidate the insurance policies required.

    


    Liability
      insurance maintained by Tenant will be primary coverage without right of
      contribution by any similar insurance that may be maintained by
      Landlord.

    


    Certificates
      of insurance, acceptable to Landlord, evidencing the existence and amount of
      each liability insurance policy required hereunder and Evidence of Property
      Insurance Form, Acord 27, evidencing property insurance as required will be
      delivered to Landlord prior to delivery or possession of the Premises and ten
      days prior to each renewal date. Certificates of insurance will include an
      endorsement for each policy showing that the Required Additional Insureds are
      included as additional insureds on liability policies (except employer's
      liability). The Evidence of Property Insurance Form will name Landlord as loss
      payee for property insurance as respects Landlord's interest in improvements
      and
      betterments. Further, the certificates must include an endorsement for each
      policy whereby the insurer agrees not to cancel or non-renew the policy, or
      reduce the coverage below the limits required in this Lease, without at least
      30
      days' prior notice to Landlord and Landlord's managing agent, if
      any.

    


    If
      Tenant
      fails to provide evidence of insurance required to be provided by Tenant
      hereunder, prior to commencement of the term and thereafter during the term,
      within 10 days following Landlord's request thereof, and 10 days prior to the
      expiration date of any such coverage, Landlord will be authorized (but not
      required) to procure such coverage in the amount stated with all costs thereof
      to be chargeable to Tenant and payable upon written invoice
      thereof.

    


    The
      limits of insurance required by this Lease, or as carried by Tenant, will not
      limit the liability of Tenant or relieve Tenant of any obligation thereunder,
      except to the extent provided for under Paragraph 18 below (Waiver of
      Claims; Waiver of Subrogation). Any deductibles selected by Tenant will be
      the
      sole responsibility of Tenant.

    


    Landlord
      may, at its sole discretion, change the insurance policy limits and forms which
      are required to be provided by Tenant; such changes will be made to conform
      with
      common insurance requirements for similar properties in similar geographic
      locations. Landlord will not change required insurance limits or forms more
      often than once per calendar year.

    


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    17.2 Landlord's
      Insurance.
      Landlord agrees to maintain during the Lease Term "all-risk" insurance on the
      Building at replacement cost, excluding foundations and excluding the items
      which Tenant is required to insure under Paragraph 17.1(a).

     

    18.    WAIVER
      OF CLAIMS; WAIVER OF SUBROGATION.

     

    To
      the
      extent permitted by law, Tenant waives all claims it may have against Landlord,
      its agents or employees for damage to property sus-tained by Tenant or any
      occupant or other person resulting from the Premises or the Project or any
      part
      of said Premises or Project becoming out of repair or resulting from any
      accident within or adjacent to the Premises or Project or resulting directly
      or
      indirectly from any act or omission of Landlord or any occu-pant of the Premises
      or Project or any other person while on the Premises or the Project, or
      resulting from any peril required to be insured against under this Lease,
      regardless of cause or origin. The
      waiver in this paragraph will also apply as to the amount of any deductible
      under Tenant's insurance. Particularly,
      but not in limitation of the foregoing sentence, all property belonging to
      Tenant or any occupant of the Premises that is in the Project or the Premises
      will be there at the risk of Tenant or other person only, and Landlord or its
      agents or employees will not be liable for damage to or theft of or
      misappropriation of such property, nor for any damage to property resulting
      from
      fire, explosion, flooding of basements or other subsurface areas, falling
      plaster, steam, gas, electricity, snow, water or rain which may leak from any
      part of the Project or from the pipes, appliances or plumbing works therein
      or
      from the roof, street or subsurface or from any other place or resulting from
      dampness or any other cause whatsoever, nor for any latent defect in the
      Premises or in the Project. Tenant will give prompt notice to Landlord in
      accordance with Paragraphs 20.1
      and 35.13
      in case
      of fire or accidents in the Premises or in the Project or of defects therein
      or
      in the fixtures or equipment.

    


    Tenant
      agrees to include in the insurance policies which Tenant is required by this
      Lease to carry in accordance with Paragraphs 17.1(a)
      and 17.1(b),
      to the
      fullest extent permitted by law, a waiver of subrogation against Landlord and
      Landlord's managing agent.

    


    To
      the
      extent permitted by law, Landlord waives all claims it may have against Tenant,
      its agents or employees for damage to the Project resulting directly or
      indirectly from any act or omission of Tenant or any occupant of the Premises
      or
      any other person while on the Premises, to the extent that such claim is covered
      by any property insurance which Landlord is required under Paragraph 17.2
      to carry
      on the Building. Landlord will include in any property insurance policy which
      Landlord may carry on the Building, to the extent permitted by law, a waiver
      of
      subrogation against Tenant.

    


    Landlord
      will not be required to maintain insurance against thefts within the Premises,
      the Project or any complex within which the Project is located.

     

    19.    INDEMNIFICATION.

     

    Tenant
      will indemnify, defend and hold harmless Landlord and its agents or employees
      against any claims or costs, including reasonable attorneys' and paralegals'
      fees, arising from conduct or from any breach or default on the part of Tenant,
      its agents or employees during the Lease Term or from such acts or conduct
      of
      any subtenant, employee, agent, servant, customer or contractor of Tenant.
      In
      case any action or proceeding be brought against Landlord by reason of any
      obligation on Tenant's part to be performed under the terms of this Lease,
      or
      arising from any act or negligence of the Tenant, or of its agents or employees,
      Tenant upon notice from Landlord will defend the same at Tenant's expense by
      counsel reasonably satisfactory to Landlord. If any damage to the Project
      results from any act or negligence of Tenant, Landlord may at Land-lord's option
      repair such damage, and Tenant will thereupon pay to Landlord the total cost
      of
      such repairs and damages to the Project; provided, however, that Landlord waives
      any right of action against Tenant for any loss or damage to the Project,
      including the Premises, resulting from fire or other casualty by such act or
      negligence if Land-lord's insurance policy covers such loss or damage and
      per-mits such a waiver.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    20.    CASUALTY
      DAMAGE.

     

    20.1 If
      the
      Premises or any part thereof are damaged by fire or other casualty, Tenant
      will
      give prompt written notice thereof to Landlord.

    


    20.2 If
      the
      Building is damaged such that substantial alteration or reconstruction of the
      Building is, in Landlord's sole opinion, required (whether or not the Premises
      are damaged by such casualty) or if any mortgagee of the Building requires
      that
      the insurance proceeds payable as a result of a casualty be applied to the
      payment of the mortgage debt or in the event of any material uninsured loss
      to
      the Building, Landlord may, at its option, terminate this Lease by notifying
      Tenant in writing of such termination within 90 days after the date of such
      damage.

    


    20.3 If
      Landlord does not thus elect to terminate this Lease, then (i) Tenant will
      take
      such action as is necessary to make available applicable insurance proceeds
      on
      Tenant's fixtures and personal property in the Premises, and on any alterations,
      additions or improvements which Tenant is required to insure in accordance
      with
Paragraph 11
      or
Paragraph 17.1(a),
      and
      Tenant will cause such insurance proceeds on such alterations, additions and
      improvements to be paid to Landlord and will cause such insurance proceeds
      on
      Tenant's fixtures and personal property to be paid to Tenant; and (ii) Landlord
      will take such action as is necessary to make applicable insurance proceeds
      available with respect to the Building and will commence and proceed with
      reasonable diligence to restore the Building and the Premises. However, Landlord
      will not be obligated to spend for such work an amount in excess of the
      insurance proceeds actually received by Landlord as a result of the casualty.
      Tenant will be responsible for replacing and restoring Tenant's fixtures and
      personal property.

    


    20.4 Landlord
      will not be liable for any inconvenience or annoyance to Tenant or injury to
      the
      business of Tenant resulting in any way from such damage or the repair thereof,
      except that, subject to the provisions of Paragraph 20.5,
      Landlord will allow Tenant a fair diminution of rent during the time and to
      the
      extent the Premises are unfit for occupancy.

    


    20.5 If
      the
      Premises or any portion of the Building is damaged by fire or other casualty
      resulting from the fault or negligence of Tenant's agents, employees, or
      invitees, the rent hereunder will not be diminished, offset, or abated during
      the repair of such damage and Tenant will be liable to Landlord for the cost
      of
      the repair and restoration of the Building caused thereby, as well as any other
      cost and expense thereby incurred by Landlord, to the extent such cost and
      expense is not covered by Landlord's insurance proceeds.

     

    21.    CONDEMNATION.

     

    21.1 If
      the
      whole or substantially the whole of the Building or the Premises is taken for
      any public or quasi-public use, by right of eminent domain or otherwise, or
      if
      it is sold in lieu of condemnation, then this Lease will terminate as of the
      date when physical possession of the Building or the Premises is taken by the
      condemning authority.

    


    21.2 If
      less
      than the whole or substantially the whole of the Building or the Premises is
      thus taken or sold, Landlord (regardless of whether the Premises are affected
      thereby) may terminate this Lease by giving written notice thereof to Tenant,
      in
      which event this Lease will terminate as of the date when physical possession
      of
      such portion of the Building or Premises is taken by the condemning
      authority.

    


    21.3 If
      this
      Lease is not so terminated upon any such taking or sale, the Base Rental payable
      hereunder will be diminished by a pro-rata amount if a portion of the Premises
      was taken, and Landlord will, to the extent Landlord deems feasible, restore
      the
      Building and the Premises, including tenant improvements (but excluding Tenant's
      fixtures and personal property). However, Landlord will not be required to
      spend
      for such work an amount in excess of the amount received by Landlord as
      compensation for such damage.

    


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    21.4 All
      amounts awarded upon a taking of any part or all of the Project or the Premises
      will belong to Landlord, and Tenant will not be entitled to and expressly waives
      all claim to any such compensation. However, Tenant will be entitled to claim
      independently against the condemning authority any damages expressly referable
      to Tenant's business as the same may be permitted by law provided that such
      claim does not reduce any award payable to Landlord.

     

    22.    EVENTS
      OF DEFAULT/REMEDIES.

     

    22.1 "Events
      of Default" by Tenant.
      The
      happening of any one or more of the following listed events (each an
      "Event
      of Default")
      will
      constitute a breach of this lease by Tenant:

    


    (a) The
      failure of Tenant to pay any rent or any other sums of money due hereunder
      within 5 days after notice; for purposes of this Lease, any statutory notice
      given by Landlord to Tenant in accordance with applicable law, including,
      without limitation, any statutory 5-day notice, will suffice for the notice
      referred to above in this Subparagraph (a) (with the understanding that
      Landlord is not required to give more than three (3) notices under this
      paragraph in any Lease Year);

    


    (b) The
      taking of the leasehold on execution or other process of law in any action
      against Tenant;

    


    (c) The
      failure of Tenant to accept the Premises, to promptly move into, to take
      possession of, and to operate its business on the Premises when the Premises
      are
      substantially complete, or if Tenant ceases to do business in, abandons or
      vacates any substantial portion of the Premises;

    


    (d) Tenant
      becoming insolvent or unable to pay its debts as they become due, or Tenant's
      notification to Landlord that it anticipates either condition;

    


    (e) Tenant
      taking any action to, or notifying Landlord that Tenant intends to, file a
      petition under the Bankruptcy Code (Title 11 of the United States Code) as
      amended, or any similar law or statute of the United States, or any state;
      or,
      the filing of a petition against Tenant under any such statute or law, or,
      any
      other creditor of Tenant notifying Landlord that it knows such a petition will
      be filed and such petition is not dismissed within thirty (30) days after the
      filing thereof; or Tenant's notification to Landlord that it expects such a
      petition to be filed;

    


    (f) The
      appointment of a receiver or trustee for Tenant's leasehold interest in the
      Premises or for all or a substantial part of the assets of Tenant;

    


    (g) Breach
      of
      any of the provisions of Paragraph 15
      (Assignment and Subletting); or

    


    (h) The
      failure of Tenant to comply with any other provision of this Lease or any other
      agreement between Landlord and Tenant (including the Work Letter; all of which
      terms, provisions, and covenants will be deemed material) within 15 days after
      notice if such failure consists of something other than a failure to pay money
      (unless
      the default involves a hazardous condition, which must be cured forthwith),
      but
      if such failure cannot be cured within such 15-day period and does not involve
      a
      hazardous condition, and if Tenant
      commences to cure the same within such 15-day period and continues to use
      diligent efforts to cure such failure, then such 15-day grace period will be
      extended for an additional 15 days, such that the maximum grace period is 45
      days; for purposes of this Lease, any statutory notice given by Landlord to
      Tenant in accordance with applicable law will suffice for the notice referred
      to
      above in this Subparagraph.

    


    22.2 Landlord's
      Remedies for Tenant Default.
      Upon
      the occurrence of an Event of Default by Tenant, Landlord may exercise the
      remedies described in this Paragraph.

    


    (a) Landlord
      may cancel and terminate this Lease and dispossess Tenant;

    


    (b) Landlord
      may without terminating or cancelling this Lease declare all amounts and rents
      due under this Lease for the remainder of the existing term (or any applicable
      extension or renewal thereof) to be immediately due and payable, and thereupon
      all rents and other charges due hereunder to the end of the initial term or
      any
      renewal term, if applicable, will be accelerated;

    


    
      
        
        

      

      
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    (c) Landlord
      may elect to enter and repossess the Premises and relet the Premises for
      Tenant's account, holding Tenant liable in damages for all expenses incurred
      in
      any such reletting and for any difference between the amount of rent received
      from such reletting and the amount due and payable under the terms of this
      Lease;

    


    (d) Landlord
      may enter upon the Premises and do whatever Tenant is obligated to do under
      the
      terms of this Lease (and Tenant will reimburse Landlord on demand for any
      expenses which Landlord may incur in effecting compliance with Tenant's
      obligations under this Lease, and Landlord will not be liable for any damages
      resulting to the Tenant from such action); and

    


    (e) CONFESSION
      OF JUDGMENT.
      THE FOLLOWING PARAGRAPHS SET FORTH WARRANTS OF AUTHORITY FOR AN ATTORNEY TO
      CONFESS JUDGMENTS AGAINST TENANT OR TO SIGN AND FILE AN ANSWER ON TENANT’S
      BEHALF FOR POSSESSION OF THE PREMISES. IN GRANTING THESE WARRANTS OF ATTORNEY
      TO
      CONFESS JUDGMENTS AGAINST TENANT AND TO SIGN AND FILE AN ANSWER ON TENANT’S
      BEHALF, TENANT HEREBY KNOWINGLY, INTENTIONALLY
      AND VOLUNTARILY, AND, ON THE ADVICE OF THE SEPARATE COUNSEL OF TENANT,
      UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TENANT HAS OR MAY HAVE WITH RESPECT
      TO
      PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS
      AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF
      PENNSYLVANIA.

    


    (i) Intentionally
      Deleted.

    


    (ii) Upon
      the
      occurrence of an Event of Default, or upon the termination of this Lease, the
      original term hereof or any renewal or extension thereof on account of any
      default by Tenant hereunder, or upon the expiration of the original term of
      this
      Lease or any renewal or extension thereof, it shall be lawful for any
      Prothonotary or attorney of any court of record to appear for Tenant, as well
      as
      for all parties claiming by, through or under Tenant, and to (i) confess
      judgment against Tenant for recovery of possession of the Premises, and/or
      (ii)
      sign and file for Tenant an answer in response to any action instituted by
      Landlord against Tenant in any competent Court for the recovery of possession
      of
      the Premises, wherein Tenant admits all allegations set forth in such action
      (for either of which this Lease or a true and correct copy thereof shall be
      a
      sufficient warrant); whereupon, if Landlord so desires, a writ of possession
      may
      issue forthwith, without any prior writ or proceedings whatsoever. If for any
      reason after judgment has been confessed or an answer signed and filed as
      provided above, the same shall be determined and the possession of the Premises
      remain in or be restored to Tenant, Landlord shall have the right upon any
      subsequent Event(s) of Default, or upon the termination or expiration of this
      Lease or Tenant’s right of possession as herein set forth, to proceed against
      Tenant in the manner herein set forth to recover possession of the premises.
      No
      such determination or recovery of possession of Premises]
      shall
      deprive Landlord of any remedies or action against Tenant for damages due or
      to
      become due for Tenant’s breach of this Lease nor shall the resort to any other
      remedy provided for the recovery of damages for such breach be construed as
      a
      waiver of Landlord’s right to obtain possession of the Premises in the manner
      herein provided.

    


    (iii) In
      any
      action instituted by Landlord pursuant to subparagraph (ii) above, Landlord
      shall first cause to be filed in such action an affidavit made by it or some
      person acting for it setting forth the facts necessary to authorize the entry
      of
      judgment, of which facts such affidavit shall be conclusive evidence, and,
      if a
      true copy of the Lease is filed in such action, it shall not be necessary to
      file the original as a warrant of attorney, any rule of court, custom or
      practice to the contrary notwithstanding.

    


    (iv) The
      right
      to enter judgment against Tenant by confession, sign and file an answer for
      Tenant and to enforce all of the other provisions of the Lease, may be exercised
      by any assignee of Landlord’s right, title and interest in this Lease in said
      assignee’s name, any statute, rule of court, custom or practice to the contrary
      notwithstanding.

    


    
      
        
        

      

      
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    22.3 Landlord's
      Remedies are Cumulative.
      All the
      remedies of Landlord in the event of Tenant default will be cumulative and
      in
      addition, Landlord may pursue any other remedies permitted by law or in equity.
      

    


    22.4 Events
      of Landlord Default.

    


    Landlord
      will not be deemed to be in default under this Lease unless obligations required
      of Landlord hereunder are not performed by Landlord within 30 days after written
      notice thereof by Tenant to Landlord and to any lender or other lien holder
      with
      rights in all or any portion of the Building, whose names and addresses are
      furnished to Tenant in writing, which notice specifies that there has been
      a
      failure to perform such obligations; provided, however, that if the nature
      of
      such obligations is such that more than 30 days are reasonably required for
      their cure, Landlord will not be deemed to be in default hereunder if Landlord
      commences such cure with reasonable promptness within such 30-day period and
      thereafter diligently prosecutes such cure to completion. However, if Landlord
      fails to cure such default within the time set forth above, then any lender
      or
      other lien holder with rights in all or any portion of the Building will have
      an
      additional 30 days within which to cure such default but not the obligation
      to
      do so, or if such default cannot be cured within that time, then such additional
      time as may be necessary if within such 30 days any such holder has commenced
      and is diligently pursuing the remedies necessary to cure such default,
      including, but not limited to, commencement of foreclosure proceedings if
      necessary to effect such a cure. In no event will Tenant have the right to
      terminate or rescind this Lease as a result of Landlord's default as to any
      covenant or agreement contained in this Lease or as a result of the breach
      of
      any promise of inducement hereof, whether in this Lease or elsewhere. Tenant
      hereby waives such remedies of termination and rescission and hereby agrees
      that
      Tenant's remedies for default hereunder and for breach of any promise or
      inducement will be limited to a suit for damages or an injunction, or
      both.

     

    23.    PEACEFUL
      ENJOYMENT.

     

    Tenant
      may peacefully enjoy the Premises against all persons claiming by, through
      or
      under Landlord, subject to the other terms hereof, provided that Tenant pays
      the
      rent and other sums herein required to be paid by Tenant and performs all of
      Tenant's covenants and agreements in this Lease. 

     

    24.    INTENTIONALLY
      DELETED.

     

    25.    HOLDING
      OVER.

     

    25.1 If
      Tenant
      holds over without Landlord's written consent after expiration or other
      termination of this Lease, or if Tenant continues to occupy the Premises after
      termination of Tenant's right of possession pursuant to the provisions of
      Paragraph 22.2(c), Tenant will throughout the entire holdover period pay
      one and one-half the rental that would have been applicable had the Lease Term
      continued through the period of such holding over by Tenant, and, in addition,
      Tenant will pay Landlord all reasonable damages sustained by reason of Tenant's
      holding over. Landlord and Tenant maintain the right to terminate this month
      to
      month tenancy with 30 days' written notification to the other party. The
      provisions of this paragraph do not waive Landlord's right of re-entry or right
      to regain possession by actions at law or in equity or by any other rights
      hereunder.

    


    25.2 No
      possession by Tenant after the Expiration Date will be construed to extend
      the
      Lease Term unless Landlord has consented to such possession in
      writing.

     

    26.    SUBORDINATION
      TO MORTGAGE.

     

    26.1 This
      Lease is and will be subject and subordinate to any mortgage, deed of trust
      or
      related security instrument, whether presently existing or hereafter arising
      upon the Premises or upon the Building and to any renewals, modifications,
      refinancing or extensions thereof, but Tenant agrees that the holder of any
      such
      instrument will have the right to subordinate such instrument to this Lease
      on
      such terms and subject to such conditions as such holder may deem appropriate
      in
      its discretion. The foregoing subordination of this Lease to any mortgage,
      deed
      of trust or related security instrument will be self-operative and no further
      instrument of subordination is required.

    


    
      
        
        

      

      
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    26.2 Landlord
      is hereby irrevocably vested with full power and authority to subordinate this
      Lease to any mortgage, deed of trust or related security instrument now existing
      or hereafter placed upon the Premises or the Building as a whole, and Tenant
      agrees upon demand to execute such further instruments subordinating the Lease
      or attorning to holder of any such lien as Landlord may request.

    


    26.3 If
      Tenant
      fails to execute any subordination or other agreement required by this
      Paragraph 26 promptly as requested, Tenant hereby irrevocably constitutes
      Landlord as its attorney-in-fact to execute such instrument in Tenant's name,
      place and stead, it being agreed that such power is one coupled with an
      interest.

    


    26.4 Tenant
      will, in the event of the sale or assignment of Landlord's interest in the
      Building or in the event of any proceedings brought for the foreclosure of,
      or
      in the event of exercise of the power of sale under, or taking by deed in lieu
      of foreclosure of, any mortgage, deed of trust or related instrument made by
      Landlord covering the Premises, give full and complete attornment to the
      purchaser and recognize the purchaser as Landlord under this Lease for the
      balance of the Lease Term, including any extensions or renewals
      thereof.

    


    26.5 Notwithstanding
      anything contained in Paragraph 26 to the contrary, Landlord hereby agrees
      to
      use its best efforts to obtain an agreement in writing from any existing or
      future mortgagee that if the mortgagee (or any assignee of the mortgagee or
      purchaser at a foreclosure sale) becomes the record owner of the Premises or
      the
      Building, the mortgagee will not disturb Tenant's possession in the Premises
      provided that Tenant is not in default under this Lease.

     

    27.    ESTOPPEL.

     

    Tenant
      will, at the request of Landlord, at any time and from time to time upon not
      less than 10 days' prior notice, execute, acknowledge in recordable form, and
      deliver to Landlord or to Landlord's mortgagee, lessor under any ground lease,
      auditors or a prospective purchaser of the Project or any part there-of, a
      certificate stating the following, as requested: (a) that this Lease is
      unmodified and in full force and effect, (or, if modified, stating the nature
      of
      such modification and certifying that this Lease, as so modified, is in full
      force and effect); (b) the date the Lease commenced and the rent commencement
      date (if different); (c) whether Tenant has any options to renew or extend
      the
      Lease Term or any options, rights of first refusal or rights of first offer
      to
      expand the Premises or to purchase the Project and whether Tenant has exercised
      any of those options; (d) whether Tenant has accepted and is now in full
      possession of the Premises, and whether Tenant has assigned the Lease, sublet
      all or any portion of the Premises, or otherwise transferred any interest in
      the
      Lease or the Premises; Tenant agrees to provide a copy of such assignment,
      sublease or transfer upon request; (e) the current monthly installments of
      Base
      Rental and Tenant's share of Excess Operating Expenses, the dates to which
      such
      rental and other charges have been paid, and that no such rent has been paid
      for
      more than 30 days in advance of its due date; (f) the base year(s) or base
      amount(s), if any, for Tenant's share of Excess Operating Expenses; (g) whether
      Tenant is currently receiving any rental concessions, rebates or abatements
      and,
      if so, the terms of such concession, rebate or abatement, including, without
      limitation, the date when such concession, rebate or abatement will expire;
      (h)
      whether Tenant is entitled to any future rent concessions, rebates or abatements
      under the Lease and, if so, the terms of the future concessions, rebates or
      abatements; (i) the amount of the Security Deposit paid to Landlord; (j) whether
      Tenant has received any notice of prior sale, transfer assignment, hypothecation
      or pledge of the Lease or of the rents payable thereunder; (k) that all
      alterations, improvements, additions, build-outs or construction required to
      be
      performed under the Lease have been completed and any required allowances have
      been paid (or if not completed or paid, stating the nature of the deficiencies);
      (l) that Tenant is paying rent on a current basis with no offsets or claims,
      and
      there are not, to Tenant's knowl-edge, any uncured defaults on the part of
      Landlord or of Tenant as is pertinent to the request (or specifying such
      offsets, claims or de-faults, if any are claimed); and (m) such other matters
      as
      may be reasonably requested. It is expressly understood and agreed that any
      such
      statement may be relied upon by any prospective purchaser or mortgagee of all
      or
      any portion of the real property of which the Premises are a part or by any
      other person to whom it is delivered. The failure to deliver such statement
      within such time will be conclusive upon Tenant that this Lease is in full
      force
      and effect, without modification except as may be represented by Landlord,
      there
      are no uncured defaults by Landlord and that not more than one month's rental
      has been paid in advance and Tenant -will be estopped from asserting any
      defaults known to it at that time.

     

    
      
        
        

      

      
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    28.    LANDLORD'S
      LIEN.

     

    28.1 Tenant
      hereby grants to Landlord a lien and security interest on (a) all property
      of
      Tenant now or hereafter placed in or upon the Premises, and (b) all accounts,
      contract rights, instruments, chattel paper and other rights of Tenant for
      payment of money for property sold or lent or for services rendered, as they
      exist from time to time, and such property and such rights will be and remain
      subject to such lien and security interest of Landlord for payment of all rent
      and other sums agreed to be paid by Tenant herein. It is provided, however,
      the
      Landlord will not have a lien which would be superior to a lien from a lending
      institution, supplier or leasing company, if such lending institution, supplier
      or leasing company has a security interest in the equipment, furniture or other
      tangible personal property and which security interest has its origin in a
      transaction whereby Tenant acquired such equipment, furniture or other tangible
      personal property.

    


    28.2 The
      provisions of this paragraph relating to such lien and security interest will
      constitute a security agreement under and subject to the Uniform Commercial
      Code
      of the State of Pennsylvania so that Landlord will have and may enforce a
      security interest on all property of Tenant now or hereafter placed in or on
      the
      Premises, and on all such rights of Tenant for payment of money, in addition
      to
      and cumulative of the Landlord's liens and rights provided by law or by the
      other terms and provisions of this Lease.

    


    28.3 Tenant
      agrees to execute as debtor such financing statement or statements and such
      other documents as Landlord may now or hereafter request in order to protect
      or
      further perfect Landlord's security interest. Notwithstanding the above,
      Landlord will neither sell nor withhold from Tenant, Tenant's business
      records.

     

    29.    TELECOMMUNICATIONS.

     

    There
      are
      installed in the Building telephone riser cables (collectively the "riser
      cables")
      from
      the outside of the Building to the terminal block on each floor in the Building.
      Subject to Landlord's supervision and approval, Tenant shall have the right
      to
      use the riser cables by installing telecommunication lines from the Premises
      to
      the terminal block on the floor or floors on which the Premises are located
      (such lines, and any other voice/data cables, lines or wires used or installed
      by or for Tenant and serving the Premises are referred to as the "telecommunication
      lines").
      Landlord, however, makes no representations or warranties with respect to the
      capacity, suitability or design of the riser cables or terminal blocks. If
      there
      is more than one tenant on a floor, Landlord will allocate hook-ups to the
      terminal block based on the proportion of rentable square feet that each tenant
      occupies on the floor. The installation and hook-up of telecommunication lines
      by Tenant will be subject to all of the terms and conditions of this Lease,
      including, without limitation, Paragraph 11 of this Lease. Tenant will have
      no rights or interest in the riser cables and terminal blocks in the Building
      therein except as set forth herein. Under no circumstances will Landlord or
      its
      agents or employees be liable for, and Tenant and each of its subtenants waives
      all claims with respect to, any damages or losses sustained by it or any
      occupant of the Premises, including any property or consequential damages,
      resulting from operating or maintenance of the riser cables and terminal blocks.
      Without limiting the generality of the foregoing, in no event shall Landlord
      be
      liable for: (a) any damage to Tenant's or its subtenants’ telephone lines,
      telephones or other equipment connected to the telecommunication lines, (b)
      interruption or failure of, or interference with, telephone or other service
      coming through the telecommunication lines to the Premises, or (c) unauthorized
      eavesdropping or wiretapping. All telephone and telecommunications desired
      by
      Tenant must be ordered and utilized at the sole expense of Tenant. All of
      Tenant's telecommunications equipment must be and remain solely in the Premises,
      in accordance with this Lease and with the rules and regulations adopted by
      Landlord from time to time. 

    


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    Any
      and
      all telecommunications lines and equipment installed in the Premises or
      elsewhere in the Building by or on behalf of Tenant must be removed before
      the
      expiration or earlier termination of this Lease, by Tenant at its sole cost
      or,
      at Landlord's election, by Landlord at Tenant's sole cost, with such cost to
      be
      paid as additional rent. However, Landlord will have the right, upon written
      notice to Tenant given no later than 30 days before the expiration or earlier
      termination of this Lease, to require Tenant to abandon and leave in place,
      without additional payment to Tenant or credit against rent, any and all
      telecommunication lines and related infrastructure, or selected components
      thereof, whether located in the Premises or elsewhere in the Project. Tenant
      covenants and agrees that at the termination or expiration of this Lease, Tenant
      will be the sole owner of such telecommunication lines and related equipment
      and
      infrastructure; provided, however, Tenant shall not remove any such
      telecommunication lines and related equipment located within the walls or
      ceilings of the Premises, and any lines located within the walls or ceilings
      shall not be cut by Tenant outside of the walls or ceilings so as to preclude
      a
      new user from connecting to said lines. Tenant further covenants that such
      telecommunication lines and related equipment and infrastructure will be free
      of
      all liens and encumbrances, and that such telecommunication lines will be in
      good condition, working order, and properly labeled at each end and in each
      telecommunications/electrical closet and junction box. The provisions of this
      grammatical paragraph will survive expiration or termination of this
      Lease.

    


    If
      Tenant
      wishes at any time to utilize the services of a telecommunications provider
      whose equipment is not then servicing the Building, no such provider will be
      permitted to install its lines or other equipment within the Building or on
      the
      Project without first securing the prior written consent of Landlord, which
      consent may be withheld in Landlord’s sole discretion. If telecommunications
      equipment, wiring, and facilities installed by or at the request of Tenant
      within the Premises, or elsewhere within or on the Building or Project causes
      interference to equipment used by another party, Tenant will (i) assume all
      liability related to such interference, and will indemnify and hold Landlord
      harmless from any liabilities and claims against Landlord resulting from such
      interference, (ii) use reasonable efforts, and cooperate with Landlord and
      other
      parties, to promptly eliminate such interference, (iii) if Tenant is unable
      to
      do promptly eliminate such interference, substitute alternative equipment which
      remedies the situation, and (iv) if such interference persists, discontinue
      the
      use of the equipment causing such interference and, at Landlord’s discretion,
      remove such equipment.

     

    30.    NO
      IMPLIED WAIVER.

     

    30.1 The
      failure of Landlord to insist at any time upon the strict performance of any
      covenant or agreement or to exercise any option, right, power or remedy
      contained in this Lease will not be construed as a waiver or a relinquishment
      thereof for the future. Any default in the timely payment of rent will not
      be
      construed as creating a custom of deferring payment or as modifying in any
      way
      the terms of this Lease. No act or thing done by Landlord, its agents or
      employees during the Lease Term will be deemed an acceptance of a surrender
      of
      the Premises, and no agreement to accept a surrender of the Premises will be
      valid, unless in writing signed by Landlord. The delivery of keys to any of
      Landlord’s agents or employees will not operate as a termination of this Lease
      or a surrender of the Premises. 

    


    30.2 No
      payment by Tenant or receipt by Landlord of a lesser amount than the rent due
      under this Lease will be deemed to be other than on account of the earliest
      rent
      due, nor will any endorsement or statement on any check or any letter
      accompanying any check or payment as rent be deemed an accord and satisfaction,
      and Landlord may accept such check or payment without prejudice to Landlord's
      right to recover the balance of such rent or pursue any other remedy provided
      in
      this Lease.

     

    31.    PERSONAL
      LIABILITY.

     

    The
      liability of Landlord to Tenant for any default by Landlord under this Lease
      will be limited to the interest of Landlord in the Project, and Tenant agrees
      to
      look solely to Landlord's interest in the Project for the recovery of any
      judgment from the Landlord, it being intended that Landlord will not be
      personally liable for any judgment of deficiency.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    32.    SECURITY
      DEPOSIT.

     

    32.1 The
      Security Deposit set forth in the Schedule is due from Tenant upon Tenant's
      execution and delivery of this Lease, and will be held by Landlord without
      liability for interest and as security for the performance by Tenant of Tenant's
      covenants and obligations under this Lease, it being expressly understood that
      the Security Deposit will not be considered an advance payment of rental or
      a
      measure of Tenant's damages in case of default by Tenant.

    


    32.2 Landlord
      may, from time to time without prejudice to any other remedy, use the Security
      Deposit to the extent necessary to make good any arrearages of rent or to
      satisfy any other covenant or obligation of Tenant hereunder (including,
      without limitation, Tenant’s unpaid electricity bills).
      Following any such application of the Security Deposit, Tenant will pay to
      Landlord within ten (10) days after demand the amount so applied in order to
      restore the Security Deposit to its original amount. 

    


    32.3 If
      Tenant
      is not in default at the termination of this Lease, the balance of the Security
      Deposit remaining after any such application together with all interest earned
      thereon, if any, will be returned by Landlord to Tenant.

    


    32.4 If
      Landlord transfers its interest in the Premises during the Lease Term, Landlord
      may assign the Security Deposit to the transferee and thereafter Landlord will
      have no further liability for the return of such Security Deposit.

     

    33.    FORCE
      MAJEURE.

     

    Whenever
      a period of time is herein prescribed for the taking of any action by Landlord,
      Landlord will not be liable or responsible for, and there will be excluded
      from
      the computation of such period of time, any delays due to strikes, riots, acts
      of God, adverse weather conditions not reasonably anticipated, shortages of
      labor or materials, war, acts of terrorism, governmental laws, regulations
      or
      restrictions, inability
      to obtain necessary governmental permits and approvals (including building
      permits or certificates of occupancy), inability to obtain necessary approvals
      by any applicable property association or its board of directors, financing,
      or any other cause whatsoever beyond the reasonable control of
      Landlord.

     

    34.    HAZARDOUS
      MATERIAL.

     

    34.1 Tenant
      will not (either with or without negligence) cause or permit the escape,
      disposal or release of any Hazardous Material (as defined below). Tenant will
      not allow the storage or use of Hazardous Material in any manner not sanctioned
      by law or by the highest standards prevailing in the industry for the storage
      and use of such Hazardous Materials, nor allow to be brought into the Building
      or the Project (or any areas surrounding the Project owned by Landlord) any
      such
      Hazardous Materials except to use in the ordinary course of Tenant's business
      in
      customary quantities for office tenants and in compliance with Environmental
      Laws, and then only after written notice is given to Landlord of the identity
      of
      such substances or materials.

    


    34.2 For
      purposes of this Lease, the term "Hazardous
      Material"
      means
      any substance, chemical, waste or material that is or becomes regulated by
      any
      federal, state or local governmental authority because of its toxicity,
      infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or
      reactivity, including, without limitation, those substances regulated by the
      Environmental Laws (defined below), and including, without limitation, the
      following: oil and petroleum products and synthetic gas usable for fuel;
      pesticides regulated under FIFRA, asbestos, and polychlorinated biphenyls.
      For
      purposes of this Lease, "Environmental
      Laws"
      means
      the Comprehensive Environmental Response, Compensation, and Liability Act of
      1980 (42 U.S.C. Section 9601 et seq.); the Clean Air Act, the Clean Water Act;

      the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and
      Rodenticide Act ("FIFRA");
      the
      National Environmental Policy Act; the Noise Control Act; the Safe Drinking
      Water Act; the Superfund Amendments and Reauthorization Act of 1986; the
      Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); or
      the
      Toxic Substances Control Act; as such acts may be amended from time to time;
      any
      applicable state or local laws, and the regulations adopted under these acts.
      

    


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    34.3 If
      any
      lender or governmental agency ever requires testing to ascertain whether there
      has been any release of Hazardous Materials at the Premises or in or about
      the
      Project caused by or arising from the action or omission of Tenant or Tenant's
      agents or contractors, then the reasonable costs thereof will be reimbursed
      by
      Tenant to Landlord upon demand as additional rent. In addition, Tenant will
      execute affidavits, representations and the like from time to time at Landlord's
      request concerning Tenant's best knowledge and belief regarding the presence
      of
      Hazardous Material on the Premises. In all events, Tenant will indemnify
      Landlord in the manner elsewhere provided in this Lease from any release of
      Hazardous Materials on the Premises or elsewhere if caused by Tenant or Tenant's
      agents or contractors. The within covenants will survive the expiration or
      earlier termination of the Lease Term.

     

    35.    MISCELLANEOUS.

     

    35.1 Severability.
      If any
      term or provision of this Lease, or the application thereof to any person or
      circumstance is, to any extent, invalid or unenforceable, the remainder of
      this
      Lease or the application of such term or provision to persons or circumstances
      other than those as to which it is held invalid or unenforceable, will not
      be
      affected thereby, and each term and provision of this Lease will be valid and
      enforced to the fullest extent of law.

    


    35.2 Recordation.
      Tenant
      agrees not to record this Lease or any memorandum hereof but Landlord may record
      this Lease or a memorandum thereof, at its sole election. Upon expiration or
      earlier termination of this Lease, Tenant will, promptly upon Landlord's written
      request, execute, acknowledge and deliver to Landlord a recordable deed
      quit-claiming to Landlord all interest of Tenant in the Premises, the Project
      and this Lease.

    


    35.3 Governing
      Law; Waiver of Jury Trial.
      This
      Lease and the rights and obligations of the parties hereto are governed by
      the
      laws of the State of Pennsylvania. All
      parties hereto, both Landlord and Tenant, as principals, and any guarantors,
      hereby release and waive any and all rights provided by law to a trial by jury
      in any court or other legal proceeding initiated to enforce the terms of this
      Lease, involving any such parties, or connected in any other manner with this
      Lease.
      Tenant
      will not interpose any counterclaim of any kind in any action or proceeding
      by
      Landlord to recover possession of the Premises based on nonpayment of rent.
      In
      the event of a dispute between Landlord and Tenant, Tenant will pay rent into
      the registry of the court having jurisdiction over such dispute.

    


    35.4 Time
      of Performance.
      Except
      as expressly otherwise herein provided, with respect to all required acts of
      Tenant, time is of the essence of this Lease.

    


    35.5 Transfers
      by Landlord.
      Landlord
      will have the right to transfer and assign, in whole or in part, all its rights
      and obligations hereunder and in the Project and the Premises referred to
      herein, and in such event and upon such transfer Landlord will be released
      from
      any further obligations hereunder, and Tenant agrees to look solely to such
      successor in interest of Landlord for the performance of such obligations
      accruing after such transfer. The covenants of the Landlord will be binding
      upon
      Landlord and its successors only with respect to breaches occurring during
      its
      or their respective periods of ownership of the Landlord's interest
      hereunder.

    


    35.6 Real
      Estate Broker; Commissions.
      Each
      party hereto hereby represents and warrants to the other that in connection
      with
      the leasing of the Premises hereunder, the party so representing and warranting
      has not dealt with any real estate broker, agent or finder, except for GVA
      Smith
      Mack and the broker (if any) listed in the Schedule as Tenant’s real estate
      broker (collectively, the "Broker"),
      and,
      to its knowledge no other broker initiated or participated in the negotiation
      of
      this Lease, submitted or showed the Premises to Tenant or is entitled to any
      commission in connection with this Lease. Each party hereto will indemnify
      the
      other against any inaccuracy in such party's representation. Landlord hereby
      agrees that it will pay any commission owed to the Broker according to a
      separate agreement.

    


    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    35.7 Late
      Payment of Rent.
      Any
      payment of rent not made when due will, at Landlord's option, bear interest
      at
      the rate of 12% per annum (or the highest rate of interest permitted under
      Pennsylvania law), whichever is lower, from the due date until paid.
      Additionally, any payment of rent not paid within 10 days of the date due will
      be subject to a late payment charge, for each occurrence, equal to 5% of the
      amount overdue and payable. Such late charge will be in addition to the interest
      provided for above and will be due and payable with the next succeeding rent
      payment. This late payment charge is intended to compensate Landlord for the
      additional administrative costs resulting from Tenant's failure to timely pay
      the rent and has been agreed upon by Landlord and Tenant after negotiation
      as a
      reasonable estimate of the additional administrative costs incurred by Landlord
      as a result of Tenant's failure to timely pay the rent. Such interest and late
      charge will constitute additional rent. The covenants to pay rent under this
      Lease are independent of any other covenant.

    


    35.8 Use
      of
      Lock Box By Landlord.
      Landlord may from time to time elect to designate a lock box collection agent
      (independent agent, bank or other financial institution) to act as Landlord's
      agent for the collection of amounts due Landlord. In such event the date of
      payment of rent or other sums paid Landlord through such agent will be the
      date
      of agent's receipt of such payment (or the date of collection of any such sum
      if
      payment is made in the form of a negotiable instrument thereafter dishonored
      upon present-ment); however, for purposes of this Lease, no such payment or
      collection will be deemed "accepted" by Landlord if Landlord issues a check
      payable to the order of the Tenant in the amount sent to the lock box and if
      Landlord mails the check to the Tenant addressed to the place designated in
      this
      lease for notice to Tenant within 21 days after the amount sent by the Tenant
      is
      received by the lock box collec-tion agent or if the Landlord returns a
      dishonored instrument within 21 days of its dishonor. Return of any such sum
      to
      Tenant by so sending such a check of the Landlord or by so sending a dishonored
      instrument to the Tenant within the appro-priate 21-day period will be deemed
      to
      be rejection of Tenant's tender of such payment for all purposes as of the
      date
      of Landlord's lock box collection agent's receipt of such payment (or
      collection). The return of Tenant's payment in the manner described in this
      paragraph will be deemed not to be a waiver of any breach by Tenant of any
      term,
      covenant or condi-tion of this Lease nor a waiver of any of Landlord's rights
      or
      remedies grant-ed in this Lease. The possession of Tenant's funds or negotiation
      of Tenant's negotiable instrument by Landlord's agent or Landlord during the
      applicable 21 day period will be deemed not to be a waiver of any de-faults
      of
      Tenant or any rights of Landlord theretofore accrued nor shall any such
      possession or negotiation be considered an acceptance of Tenant's
      tender.

    


    35.9 Effect
      of Delivery of This Lease.
      Landlord
      has delivered a copy of this Lease to Tenant for Tenant's review only, and
      the
      delivery hereof does not constitute an offer to Tenant or an option to Lease.
      This Lease will not be effective until a copy executed by both Landlord and
      Tenant is delivered to and accepted by Landlord. However, the execution of
      this
      Lease by Tenant and delivery thereof to Landlord or Landlord's agent will
      constitute an irrevocable offer by Tenant to lease the Premises on the terms
      and
      conditions herein contained, which offer may not be revoked for 10 days after
      such delivery.

    


    35.10 Paragraph
      Headings.
      The
      paragraph or subparagraph headings are used for convenience of reference only
      and do not define, limit or extend the scope or intent of the
      paragraphs.

    


    35.11 Definitions.
      The
      definitions set forth in Paragraph 1
      and in
      the Schedule are hereby made part of this Lease.

    


    35.12 Exhibits. Exhibits A-1
      through E
      are
      attached hereto and incorporated herein and made a part of this Lease for all
      purposes:

    

      
        	
                Exhibit
                  Number

              	 	
                Description

              
	 	 	 
	
                Exhibit
                  A-1

              	 	
                Site
                  Plan

              
	
                Exhibit
                  A-2

              	 	
                Premises
                  Floor Plan

              
	
                Exhibit
                  B

              	 	
                Commencement
                  Date Agreement

              
	
                Exhibit
                  C

              	 	
                Building
                  Rules and Regulations

              
	
                Exhibit
                  D

              	 	
                Work
                  Letter 

              
	
                Exhibit
                  E

              	 	
                Building
                  Specifications

              


      

    

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    35.13 Notices.

    


    (a) Tenant
      will pay all rent to Landlord at the following address (or at such other place
      as Landlord may hereafter designate in writing):

    


    If
      by
      United States mail:

    


    P.O.
      Box
      1863

    Doylestown,
      PA 18901

    


    Or,
      if by
      air courier:

    


    1574
      Easton Road

    Warrington,
      PA 18976

    (phone:
      215-345-8083)

    


    Tenant
      will forward all notices to Landlord at the following address (or at such other
      place as Landlord may hereafter designate in writing):

    


    1574
      Easton Road

    Warrington,
      PA 08976

    


    with
      a
      copy of all notices to:

    


    Robert
      W.
      Gundlach, Jr. Esquire

    Fox
      Rothschild LLP

    102
      North
      Main Street

    PO
      Box
      1589

    Doylestown,
      PA 18901-0700

    


    (b) Landlord
      will forward all notices to Tenant at the address set forth in the Schedule
      until Tenant takes possession of the Premises, and thereafter at the Premises
      or
      at such other place within the continental United States as Tenant may hereafter
      designate in writing. However, Landlord has no obligation to send any notice,
      request, demand, consent, approval or other communication required or permitted
      under this Lease to be given to Tenant, to more than 3 addresses, including
      the
      Premises.

    


    (c) Any
      notice provided for in this Lease must, unless otherwise expressly provided
      herein, be in writing, and may, unless otherwise expressly provided, be given
      or
      be served (i) by hand delivery, (ii) by depositing such notice in the United
      States mail, certified or registered mail with return receipt requested, postage
      prepaid, or (iii) via reputable overnight air courier service.

    


    (d) Notice
      by
      hand delivery will be deemed to have been given when actually delivered or
      when
      the tender of such delivery is refused. Notice by certified or registered mail
      will be deemed to have been given on the third business day after the date
      that
      the notice is deposited into the mail, postage prepaid. Notice given by air
      courier will be deemed given one business day after it is accepted by such
      courier for next business day delivery. 

    


    (e) In
      lieu
      of Landlord or Tenant waiving the right to receive any notices, each party
      hereby waives any technical defects as to form, substance and delivery in the
      giving of any notices required by this Lease and by Pennsylvania Statutes so
      long as the notice reasonably apprises the appropriate party of the general
      nature of the reason for the giving of the notice and affords such party a
      reasonable opportunity to cure, if applicable.

    


    35.14 No
      Presumption.
      Landlord and Tenant understand, agree and acknowledge that (1) this Lease has
      been freely negotiated by both parties, and (2) in any controversy, dispute
      or
      contest over the meaning, interpretation, validity or enforceability of this
      Lease or any of its terms or conditions, there will be no inference, presumption
      or conclusion drawn whatsoever against either party by virtue of that party
      having drafted this Lease or any portion thereof.

    


    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    35.15 Air,
      Light, View.
      This
      Lease does not create, nor will Tenant have, any express or implied easement
      for
      or other rights to air, light or view over or about the Project or any part
      thereof. 

    


    35.16 Joint
      and Several Liability.
      If more
      than one person or entity is named in this Lease as Tenant, their liability
      under this Lease will be joint and several. 

    


    35.17 Entire
      Agreement.
      This
      Lease (including the exhibits attached hereto) contains the entire agreement
      between the parties hereto, and no statement, representation, agreement or
      promise made in connection with this Lease shall be binding upon Landlord or
      Tenant unless set forth herein. This Lease may only be modified by an agreement
      in writing signed by Landlord and Tenant.

    


    35.18 Relationship
      To Parties; No Third Party Beneficiaries.
      Nothing
      contained in this Lease will be deemed or construed by the parties hereto,
      nor
      by any third party, as creating the relationship of principal and agent or
      of
      partnership or of joint venture between the parties hereto, it being understood
      and agreed that neither the method of computation of rent, nor any other
      provision contained herein, nor any acts of the parties herein, will be deemed
      to create any relationship between the parties hereto other than the
      relationship of Landlord and Tenant. This
      Lease is made for the sole benefit of Landlord and Tenant and, in the case
      of
Paragraph 26
      (Subordination to Mortgage), any present or future holder of a security interest
      described in such Paragraph, and their respective successors and assigns
      (subject to the limitation on assignment set forth above), and no other person
      or persons shall have any right or remedy or other legal interest of any kind
      under or by reason of this Lease. Whether or not either party hereto elects
      to
      employ any or all the rights, powers or remedies available to it hereunder,
      such
      party shall have no obligation or liability of any kind to any third party
      by
      reason of this Agreement or by reason of any of such party's actions or
      omissions pursuant hereto or otherwise in connection with this Lease or the
      transactions contemplated hereby.

    


    35.19 Attorneys'
      Fees.
      Tenant
      will pay, in addition to the rents and other sums agreed to be paid hereunder,
      all collection and court costs incurred by Landlord and Landlord's reasonable
      attorneys’ and paralegals' fees incurred for the collection of unpaid rentals or
      the enforcement, defense or interpretation of Landlord’s rights under this
      Lease, whether such fees and costs be incurred out of court, at trial, on
      appeal, or in any bankruptcy, arbitration or other administrative
      proceedings.

    


    35.20 Authority;
      Not Restricted.
      Tenant,
      and the person executing this Lease on behalf of Tenant, represent and warrant
      that Tenant is duly formed in its state of organization, is in good standing
      in
      its state of organization and in the State identified in the Schedule and has
      full corporate or partnership or limited liability company ("LLC")
      power
      and authority, as the case may be, to enter into this Lease and has taken all
      corporate or partnership or LLC action, as the case may be, necessary to carry
      out the transaction contemplated herein, so that when executed, this Lease
      constitutes a valid and binding obligation of Tenant, enforceable against Tenant
      in accordance with its terms. Landlord, and the person executing this Lease
      on
      behalf of Landlord, represent and warrant that Landlord is duly formed in its
      state of organization, is in good standing in its state of organization and
      in
      the State of Pennsylvania, and has full partnership power and authority to
      enter
      into this Lease and has taken all partnership action necessary to carry out
      the
      transaction contemplated herein, so that when executed, this Lease constitutes
      a
      valid and binding obligation of Landlord, enforceable against Landlord in
      accordance with its terms. Tenant
      warrants and represents to Landlord that Tenant is not, and shall not become,
      a
      person or entity with whom Landlord is restricted from doing business with
      under
      regulations of the Office of Foreign Asset Control ("OFAC")
      of the
      Department of the Treasury (including, but not limited to, those named on OFAC's
      Specially Designated and Blocked Persons list) or under any statute, executive
      order (including, but not limited to, the September 24, 2001, Executive Order
      Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
      to Commit, or Support Terrorism), or other governmental action and is not and
      shall not engage in any dealings or transaction or be otherwise associated
      with
      such persons or entities.

    


    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    35.21 Confidentiality.
      Tenant
      acknowledges that the terms and conditions of this Lease are to remain
      confidential for the Landlord’s benefit and may not be disclosed by Tenant or
      its agents, servants, and employees to anyone, by any manner or means, directly
      or indirectly, without Landlord’s prior written consent. The consent by Landlord
      to any disclosures will not be deemed to be a waiver on the part of Landlord
      of
      any prohibition against any future disclosure. Tenant will indemnify, defend
      upon request, and hold Landlord harmless from and against all costs, damages,
      claims, liabilities, expenses, losses, court costs, and attorneys’ fees suffered
      or claimed against Landlord, its agents, and employees, based in whole or in
      part upon the breach of this Paragraph by Tenant, its agents, servants, and
      employees. Notwithstanding the above, Tenant shall be entitled to disclosure
      information regarding this Lease to its attorneys, accountants, banks and other
      financial and business representatives and as required by law or applicable
      regulation. The obligations of this Paragraph will survive the expiration or
      earlier termination of this Lease.

    


    35.22 Limitation
      of Landlord’s Liability.
      Anything contained in this Lease to the contrary notwithstanding, Tenant agrees
      that Tenant shall look solely to the estate and property of Landlord in the
      Building for the collection of any judgment or other judicial process requiring
      the payment of money by Landlord. In no event shall Landlord nor any partners,
      shareholders, members or other principals of Landlord, or any managers or
      employees of Landlord be personally responsible or liable for the payment of
      any
      such judgment or process obtained against Landlord.

    


    THIS
      LEASE CONTAINS PROVISIONS FOR THE CONFESSION OF JUDGMENT FOR BOTH MONEY AND
      POSSESSION, AND FOR THE WAIVER OF TRIAL BY JURY.

    


    IN
      WITNESS WHEREOF,
      Landlord
      and Tenant have executed this Lease in multiple original
      counterparts.

     

    
      	WITNESS:	 	 
	 	TENANT:
              DISCOVERY
              LABORATORIES, INC.
	 

              
Name:
              Cynthia Davis  	 
 	 
 
	 	By:  	 
	 	
              
Name:
              John Cooper
	 	Its:
              Executive VP & CFO
	 	
              Date:
                05/26/04

            


    

    
      	 	 	 
	 	 
	WITNESS:	LANDLORD: STONE
              MANOR CORPORATE CENTER, L.P.
	 	By: SM
              Corporate Center, Inc.
	
               

               

              
                

              

              Name: Douglas
                B. Newbert

            	 
 	 
 
	 	By:  	 
	 	
              
Name:
              Walter S. Smerconish
	 	Title:
              President
	 	Date:
              05/27/04





    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A-1

     

    SITE
      PLAN

    


    


    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    


    


    EXHIBIT
      A-2

    


    PREMISES
      FLOOR PLAN

    


    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    



    EXHIBIT
      B

    


    COMMENCEMENT
      DATE AGREEMENT

    


    It
      is
      hereby agreed among the parties to that certain Lease Agreement dated May __,
      2004, for Suites 100 and 200, in the building commonly known as Office Building
      A in Stone Manor Corporate Center, located on Easton Road in Warrington
      Township, PA (the “Lease”) between Discovery Laboratories, Inc. (“Tenant”), and
      Stone Manor Corporate Center, L.P. (“Landlord”) that: 

    


    
      	1.  	
              The
                Commencement Date of the Lease, as referred to in the Schedule of
                the
                Lease, is ____________. 

            


    

    


    
      	2.  	
              The
                provisions of Paragraph 31 of the Lease will apply to and are hereby
                incorporated into this Agreement.

            


    

    


    IN
      WITNESS WHEREOF, Landlord and Tenant have executed this Commencement Date
      Agreement as of the date hereof.

     

    
      	WITNESS:	 	 
	 	TENANT:
              DISCOVERY
              LABORATORIES, INC.
	 

              
Name:
	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Its:
              
	 	
              Date:
                

            


      
        	 	 	 
	 	 
	WITNESS:	LANDLORD: STONE
                MANOR CORPORATE CENTER, L.P.
	 	By: SM
                Corporate Center, Inc.
	
                 

                 

                
                  

                

                Name: 

              	 
 	 
 
	 	By:  	 
	 	
                
Name:
                Walter S. Smerconish
	 	Title:
                President
	 	Date:
                




      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

    

    


    EXHIBIT
      C

    
 

    BUILDING
      RULES AND REGULATIONS

    


    Landlord
      has adopted the following Building Rules and Regulations for the care,
      protection and benefit of your Premises and the Building and for the general
      comfort and welfare of all Tenants. These Rules and Regulations are subject
      to
      amendment by the Landlord from time to time.

    


    1. Building
      Hours and Access.

    


    1.1 Normal
      Building Hours are from 8:00 a.m. to 6:00 p.m., Monday through Friday, and
      on
      Saturday from 8:00 a.m. to 1:00 p.m., excluding legal holidays.

    


    1.2 HVAC
      service at times other than for Normal Building Hours will be furnished only
      upon written request of Tenant delivered to the Landlord by 4:00 p.m. of the
      business day (i.e., Monday through Friday excluding legal holidays) preceding
      the day for which such usage is requested. Tenant will bear the entire cost
      of
      such additional service as such costs are determined by Landlord from time
      to
      time.

    


    1.3 Building
      entry at times other than for Normal Building Hours may be limited to a single
      entrance.

    


    1.4 Landlord
      reserves the right to designate the time when freight, furniture, goods,
      merchandise and other articles may be brought into, moved or taken from Premises
      or the Building. Tenants must make arrangements with the management office
      when
      the freight elevator is required for the purpose of carrying any kind of
      freight.

    


    1.5 Landlord
      reserves the right at all times to exclude loiterers, vendors, solicitors,
      and
      peddlers from the Building and to require registration of satisfactory
      identification or credentials from all persons seeking access to any part of
      the
      Building outside ordinary business hours. Landlord will exercise its judgment
      in
      the execution of such control but will not be liable for the granting or refusal
      of such access.

    


    2. Building.

    


    2.1 The
      sidewalks, entry passages, corridors, halls, elevators, and stairways must
      not
      be obstructed by the Tenant or used by it for other than those of ingress and
      egress.

    


    2.2 The
      floors, skylights and windows that reflect or admit light into any place in
      the
      Building must not be covered or obstructed by the Tenant.

    


    2.3 Restroom
      facilities, water fountains, and other water apparatus must not be used for
      any
      other purpose other than for which they were constructed, and no rubbish, or
      other obstructing substances may be thrown therein, and the expense of any
      breakage, stoppage, or damage resulting from a violation of this provision
      by
      Tenant or Tenant's officers, employees, agents, patrons, customers, licensees,
      visitors, or invitees will be borne by Tenant.

    


    2.4 Tenant
      will not injure, or overload or deface the Building, the woodwork, or the walls
      of the Premises, nor carry on upon the Premises any noxious, noisy or offensive
      business, nor store in the Building or the Premises any flammable or odorous
      materials.

    


    2.5 Tenant,
      its officers, agents, employees, patrons, customers, licensees, invitees, and
      visitors will not solicit in the Project, nor will Tenant distribute any
      handling or other advertising matter in automobiles parked in the Building's
      parking facilities.

    


    2.6 Landlord
      will not be responsible for lost or stolen property, equipment, money, or any
      article taken from the Premises, Building or parking facilities, regardless
      of
      how and when loss occurs.

    


    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    2.7 Landlord
      will have the right, exercisable upon written notice and without liability
      to
      Tenant, to change the name and street address of the Building.

    


    2.8 Smoking
      will not be permitted in the Building. Smoking will not be permitted in the
      exterior Common Areas unless Landlord specifically designates a portion or
      portions of the exterior Common Areas where smoking is to be permitted, in
      which
      case smoking will be permitted only in those portions of the exterior Common
      Areas specifically designated by Landlord. 

    


    2.9 Tenant
      shall not in any manner use the name of the Project for any purpose other than
      that of the business address of the Tenant, or use any picture or likeness
      of
      the Project, in any letterheads, envelopes, circulars, notices, advertisements,
      containers or wrapping material without Landlord’s express consent in
      writing.

    


    3. Doors
      and Windows.

    


    3.1 Tenant
      entrance doors should be kept closed at all times in accordance with the fire
      code.

    


    3.2 The
      Tenant may not put additional locks or latches upon any door without the written
      consent of the Landlord.

    


    3.3 All
      signage at the entrance to the Premises will be in the standard graphics for
      the
      Building, and no other may be used or permitted on the Premises without
      Landlord's prior written consent.

    


    3.4 All
      glass, locks and trimmings in or upon the doors and windows of the Building
      will
      be kept whole and when any part thereof is broken the same will be immediately
      replaced or repaired and put in good repair.

    


    3.5 Window
      blinds of a uniform Building Standard color and pattern only will be used
      throughout the Building to give uniform color exposure through exterior windows.
      These blinds will remain in the lower position at all times to provide uniform
      exposure for the outside.

    


    4. Premises
      Use.

    


    4.1 The
      Tenant may not install in the Premises any heavy weight equipment or fixtures
      or
      permit any concentration of excessive weight in any portion thereof without
      first having obtained Landlord's written consent.

    


    4.2 Tenant
      may not operate any device which may emanate electrical waves which will impair
      radio or television broadcasting or reception from or in the Building.


    


    4.3 No
      wires
      of any kind or type (including but not limited to television or radio antennas)
      may be attached to the outside of the Building and no wires may be run or
      installed in any part of the Building without the Landlord's prior written
      consent. Such wiring will be done by the electrician of the Building only,
      and
      no outside electrician will be allowed to do work of this kind unless by the
      written permission of Landlord or its representatives.

    


    4.4 If
      Tenant
      desires any signal, communication, alarm or other utility or service connection
      installed or changed, such work will be done at the expense of Tenant, with
      the
      approval and under the direction of Landlord. Tenant will not utilize any
      wireless communication equipment (other than usual and customary cellular
      telephones and pagers), including antenna and satellite receiver dishes, within
      the Premises, or the Building, without Landlord's prior written consent. Such
      consent may be conditioned in such manner so as to protect Landlord's interest
      and the interest of the Building and the other tenants therein. 

    


    4.5 No
      painting may be done, nor may any alterations be made, to any part of the
      Building by putting up or changing any partition, doors or windows, nor will
      there be any nailing, boring, or screwing into the woodwork or plastering,
      nor
      will any connection be made to the electric wires or electric fixtures without
      the consent in writing on each occasion of Landlord.

    


    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    4.6 All
      contractors or technicians performing work for Tenant within the Premises,
      Project or parking facilities will be referred to Landlord for approval in
      accordance with the Lease before performing such work. This will apply to all
      work including, but not limited to, installation of telephones, telegraph
      equipment, electrical devices and attachments, and all installations affecting
      floors, walls, windows, doors, ceiling, equipment or any other physical feature
      of the Project, leased Premises or parking facilities. None of this work may
      be
      done by Tenant without Landlord's prior written approval.

    


    4.7 Tenant
      will not cause or permit any unusual or objectionable odors to be produced
      upon
      or permeate from the Premises. Such odors include, but are not necessarily
      limited to, cooking fumes, food odors, cleaning agents, chemicals, or substances
      of any kind. If Landlord receives a complaint regarding objectionable odors,
      the
      complaint will be investigated and if necessary, the offender will be asked
      to
      cease and desist from the action causing the objectionable odor(s).

    


    4.8 Tenant
      shall not bring into or keep within the Building any motor vehicle or
      bicycle.

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    



    EXHIBIT
      D

     

    WORK
      LETTER

     

    1. PLANNING.
      

    


    Tenant
      will engage an interior office space planner ("Space
      Planner"),
      subject to Landlord's prior written approval. Tenant
      will cause the Space Planner to prepare a detailed space plan (the "Space
      Plan")
      for
      the Work (hereinafter defined). The Space Plan must indicate among other
      things: 

    


    a. Special
      loading, such as the location of file cabinets or special equip-ment.


    


    b. Openings
      in the walls or floors.

    


    c. Special
      electrical, air conditioning or plumbing work.

    


    d. Location
      and dimensions of telephone equipment rooms, and tele-phone and electrical
      outlets. 

    


    e. Partitions
      - locations and type, including doors and non-Building Standard hardware.


    


    f. Special
      cabinet work or other millwork items.

    


    g. Variations
      to standard ceiling heights.

    


    h. Color
      selection of painted areas.

    


    i. Selection
      of floor covering and any special wall covering.

    


    Landlord
      will review the Space Plan and either approve or disapprove the Space Plan.
      If
      Landlord does not approve the Space Plan, Landlord will inform Tenant in writing
      of its objections and Tenant will revise the same and deliver a corrected
      version to Landlord for its approval. The approval and revision process for
      the
      revised Space Plan will be the same as described in the previous 2 sentences.
      

    


    After
      the
      Space Plan has been approved by Landlord, Tenant will engage a licensed
      architect (the "Architect")
      (who
      may be the same as the Space Planner), subject to Landlord's written approval.
      Tenant or the Architect will also engage such licensed engineering firms
      ("Engineers")
      as may
      be required or appropriate in connection with preparing mechanical, electrical,
      plumbing, HVAC or other plans and specifications, all of whom will be subject
      to
      Landlord's written approval. Tenant will cause the Architect and Engineers
      to
      prepare permittable drawings, and final construction drawings and specifications
      (the "Plans")
      of the
      Work and will, within the time frames set forth in Paragraph 16 of the Addendum
      to Lease, deliver 3 copies of same to Landlord for its approval. The Plans
      will
      consist of fully dimensioned and complete sets of plans and specifications,
      including detailed architectural, structural, mechanical, electrical and
      plumbing plans for the Work, and will include, in addition to all items required
      to be included in the Space Plan, the following, to the extent applicable:
      (i)
      all electrical outlet locations, circuits and anticipated usage therefore,
      (ii)
      reflected ceiling plan, including lighting, switching and special ceiling
      specifications, (iii) duct locations for HVAC equipment, (iv) details of all
      millwork, (v) dimensions of all equipment and cabinets to be built in, (vi)
      furniture plan showing details of space occupancy, (vii) keying schedule
      (Premises must be keyed to permit entry by Building master key), if any, (viii)
      lighting arrangement, (ix) special HVAC equipment and requirements, (x) weight
      and location of heavy equipment, and anticipated loads for special usage rooms,
      (xi) demolition plan, (xii) partition construction plan, (xiii) all requirements
      under the Americans With Disabilities Act and other applicable acts, laws,
      or
      governmental rules or regulations pertaining to persons with disabilities,
      and
      all other applicable governmental requirements, and (xiv) final finish
      selections, and any other details or features requested by the Architect or
      Engineers or Landlord in order for the Plans to serve as a basis for contracting
      the Work. The Plans will be substantially consistent with the Space Plan without
      any material changes. 

    


    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    For
      purposes of this Work Letter, the "Work"
      means:
      (A) purchase and installation of the improvements and items of work shown on
      the
      final Architectural Plans and Engineering Plans, and (B) any demolition,
      preparation or other work required in connection therewith. 

    


    2. COST
      OF
      THE WORK; ALLOWANCE. 

    


    2.1 Cost
      of The Work.
      Except
      for the Allowance to be provided by Landlord as described below, Tenant will
      pay
      all costs (the "Cost
      of the Work")
      associated with the Work whatsoever, including, without limitation, all costs
      for or related to: 

    


    a. the
      so-called "hard costs" of the Work, including, without limitation, costs of
      labor, hardware, equipment and materials, contractors' charges for overhead
      and
      fees (including a contractor’s fee of 4%), and so-called “general conditions"
      (including rubbish removal, utilities, freight elevators, hoisting, field
      supervision, building permits, occupancy certificates, inspection fees, utility
      connections, bonds, insurance, and sales taxes); and

    


    b. the
      so-called "soft costs" of the Work, including, without limitation, the Space
      Plans, the Architectural Plans, and the Engineering Plans, and all revisions
      thereto, and any and all engineering reports or other studies, reports or tests,
      air balancing or related work in connection therewith.

    


    Landlord
      will furnish Tenant with written estimates of the Cost of the Work within 15
      business days after receipt by Landlord of the Engineering Plans and the
      Architectural Plans, whichever is later. Landlord
      shall be required to bid out the portion of the Work consisting of the dry-wall
      and metal studs to two (2) separate contractors.
      If
      Tenant fails to approve or disapprove in writing such estimates within 3
      business days after Tenant's receipt of such estimates, the estimates will
      be
      deemed approved by Tenant in all respects, and Landlord may complete the Work
      without further authorization or approval of Tenant. If Tenant disapproves
      the
      cost of such estimates within the required time, Tenant may propose
      modifications to the Architectural Plans (subject to Landlord's approval) in
      order to modify the cost of the Work. Following any such modifications to the
      Architectural Plans, and any resulting changes to the Engineering Plans,
      Landlord will submit to Tenant revised cost estimates. Tenant shall also have
      the right, to be exercised with said 15 business day period, to require Landlord
      to bid out the Work to 1 additional contractor recommended by Tenant. Any delay
      in the completion of the Work (x) caused by Tenant's disapproval of the initial
      or any subsequent cost estimates, (y) caused by any such revisions to the
      Architectural Plans or Engineering Plans or (z) caused by Tenant requiring
      Landlord to bid out the Work to 1 additional contractor recommended by Tenant,
      will constitute a Tenant Delay. At Tenant’s request, Landlord shall make
      available for inspection information relating to the bidding of the Work.


    


    2.2 Allowance.
      Landlord will provide a construction allowance (the "Allowance")
      of
      up to
      the amount of the Allowance set forth in the Schedule to the Lease toward
      the Cost of the Work. The Allowance may not be used for any other purpose,
      such
      as, but not limited to, furniture, trade fixtures or personal property. If
      all
      or any portion of the Allowance is not used, Landlord will be entitled to the
      savings and Tenant will receive no credit therefor.

    


    2.3 Payment.
      The
      Cost of the Work in excess of the Allowance will be borne by Tenant and will
      be
      due and payable to Landlord by Tenant as and when billed from time to time.
      Tenant will pay Landlord the Cost of the Work, minus the Allowance, as
      follows:

    


    a. An
      amount
      equal to the estimated total cost of the Work, minus the Allowance, will be
      paid
      to Landlord before commencement of the Work, and

    


    b. An
      amount
      equal to the unpaid balance, if any (over the Allowance), of the total Cost
      of
      the Work will be paid to Landlord upon substantial completion of the Work,
      but
      in no case later than initial occupancy by Tenant.

    


    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    3. COMMENCEMENT
      OF LEASE; RENT. Subject to the other terms and conditions of this Work Letter
      and the Lease, Landlord will proceed diligently and use reasonable efforts
      to
      cause the Work to be substantially completed on or before the Estimated
      Commencement Date set forth in the Lease. Unless a Tenant Delay (defined below)
      occurs, the Lease Term and Tenant's obligation to pay rent under the Lease
      will
      not commence until the Work has been substantially completed, as reasonably
      determined by Landlord. If Landlord fails to substantially complete the Work
      by
      the Commencement Date set forth in the Lease and any Tenant Delay (defined
      below) occurs, then the term of the Lease and Tenant's obligation to pay rent
      under the Lease will commence on the date on which the Work would have been
      substantially completed but for the Tenant Delay, as reasonably determined
      by
      Landlord. All work to be done in the Premises, including, without limitation,
      the Work, will be subject to Land-lord's approval, and no work may be undertaken
      in the Premises until such approval is given. For purposes of this Lease, each
      one or more of the following constitutes a "Tenant
      Delay":
      

    


    a. Tenant's
      or the Space Planner's failure to devote the time or furnish the information
      required under Paragraph 1 in connection with the Space Plan or the
      Architectural Plans; or

    


    b. Tenant's
      unreasonable disapproval of cost estimates for the Work; or

    


    c. Tenant's
      request for materials, finishes or installations constituting "long-lead items,"
      as reasonably determined by Landlord; or 

    


    d. Tenant's
      request for changes in the Work, or in the Architectural Plans or Engineering
      Plans (notwithstanding Landlord's approval of any such changes), including,
      without limitation, any changes in Architectural Plans or Engineering Plans
      made
      at the request of Tenant upon Tenant's receipt of the cost estimates in
      accordance with Paragraph 2; or

    


    e. Any
      other
      act or omission by Tenant or its agents, including, without limitation, the
      Space Planner, which directly or indirectly delays completion of the Work or
      Landlord's delivery to Tenant of possession of the Premises. 

    


    4. ACCESS
      BY
      TENANT PRIOR TO COMMENCEMENT OF TERM. Land-lord, at Landlord's reasonable
      discretion, may permit Tenant and Tenant's agents to enter the Premises prior
      to
      the date specified as the Commencement Date of the Lease in order that Tenant
      may make the Premises ready for Tenant's use and occupancy. If Landlord permits
      such entry prior to the Commencement Date, such permission will constitute
      a
      license only and not a lease and such license will be conditioned upon: (a)
      Tenant working in harmony and not interfer-ing with Land-lord and Landlord's
      agents, contractors, workmen, mechanics and suppliers in doing the Work, or
      the
      Work in the Building or with other tenants and occupants of the Build-ing;
      (b)
      Tenant obtaining in advance Landlord's approval of the contractors pro-posed
      to
      be used by Tenant and depositing with Landlord in advance of any work (i)
      security satisfactory to Landlord for the completion thereof, (ii) general
      con-tractor's affidavit for proposed work and waiver of lien from general
      contrac-tor, all subcontractors and suppliers of material; (c) Tenant furnishing
      Landlord with such proof of insurance and other security as Landlord may
      require. Landlord will have the right to withdraw such license for any
      reasonable reason upon 24 hours' notice to Tenant. Tenant agrees that Landlord
      will not be liable in any way for any injury, loss or damage which may occur
      to
      any of Tenant's property placed or installations made in the Premises prior
      to
      the Commencement Date, the same being at Tenant's sole risk and Tenant agrees
      to
      protect, defend, indemnify and save harmless Landlord from all liabilities,
      costs, damages, fees and expenses arising out of or connected with the
      activities of Tenant or its agents, contrac-tors, suppliers or workmen in or
      about the Premises or the Project. Tenant further agrees that any entry and
      occupation permitted under this paragraph will be governed by Paragraph 11
      of the Lease and all other terms of the Lease. 

    


    5. MISCELLANEOUS.
      

    


    A. The
      Premises must be keyed to permit entry by the Building master key.

    


    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    B. Except
      to
      the extent otherwise indicated herein, the initially capitalized terms used
      in
      this Work Letter will have the meanings assigned to them in the Lease.


    


    C. The
      terms
      and provisions of this Work Letter are intended to supple-ment and are
      specifically subject to all the terms and provisions of the Lease. 

    


    D. This
      Work
      Letter may not be amended or modified other than by supplemental written
      agreement executed by authorized representatives of the parties
      hereto.

    


    6. PRELIMINARY
      CORE AND SHELL SPECIFICATIONS. Landlord shall, at Landlord’s sole cost and
      expense and not as part of the Cost of the Work, deliver the Premises to Tenant
      in accordance with the specifications attached to the Lease as Exhibit
      E.

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    



    EXHIBIT
      E

    


    BUILDING
      SPECIFICATIONS 

    


    STONE
      MANOR CORPORATE CENTER

    NEW
      60,000 SF (+/-) THREE-STORY OFFICE BUILDING A

    1574
      EASTON ROAD, WARRINGTON, PA 

    PRELIMINARY
      CORE & SHELL SPECIFICATIONS

    MARCH
      12, 2003

    
      

      

    

    


    


    This
      specification is to be read in conjunction with preliminary drawings dated
      6/11/02 by 

    Thomas
      E. Hall & Associates, Inc.

    


    1.
      GENERAL

    


    
      	A.  	
              The
                project consists of a new Class A spec office building with three
                (3)
                office levels. The core and shell, all sitework, landscaping and
                underground utilities, will be provided for a complete development
                package. By definition, the shell building shall include a completed
                heated and cooled core, including vertical transportation, toilet
                and
                mechanical rooms, a public lobby and core areas. Building: approximately
                60,000 SF. Each floor approximately 20,000
                SF.

            


    

    


    2.
      EXTERIOR
      SKIN

    


    
      	A.  	
              The
                office building skin shall be a combination of brick and decorative
                block
                on metal stud back up with aluminum framed insulated glass
                windows.

            


    

    


    
      	B.  	
              The
                building glass shall be by PPG and shall be one inch insulated, tinted,
                low-e (low emissary) with 400 and 1600 series SSG curtain wall by
                Kawneer
                (451T).

            


    

    


    
      	C.  	
              The
                building envelope shall be thermally insulated to provide external
                wall
                system components with a minimum R-value of R-19. The overall building
                envelope should meet the performance requirements of ASHRAE Standard
                1980
                "Energy Conservation in New Building
                Design."

            


    

    


    
      	3.  	
              EXTERIOR
                LIGHTING

            


    

    


    
      	A.  	
              Building
                entrances to be illuminated with decorative brushed aluminum wall
                sconces.

            


    

    


    
      	B.  	
              Building
                facades to be flood lit by white pole mounted fixtures on timers,
                strategically placed around the
                building.

            


    

    


    
      	4.  	
              ROOF

            


    

    


    
      	A.  	
              The
                roof covering shall be mechanically fastened EPDM membrane over rigid
                insulation sloped to roof drains.

            


    

    


    
      	B.  	
              The
                roof system components shall provide a minimum R-value of R-30. Loading
                criteria shall be 30 lbs live load and 20 lbs dead
                load.

            


    

    


    
      	C.  	
              Roof
                access shall be provided via roof
                hatch.

            


    

    


    
      	5.  	
              INTERIOR
                PUBLIC AREAS / CORE
                SERVICES

            


    

    


    
      	A.  	
              The
                building will feature
                dramatic two story and one story entrance lobbies with painted gypsum
                board ceiling, granite tile floor, fabric wall covering, wood veneer
                panels, and stone base.

            


    

    


    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    
      	B.  	
              Upper
                Floor Lobbies:
                Wood/fabric wrapped panels in the elevator lobbies with painted gypsum
                board ceiling, vinyl covering on walls, carpeted floors and wood
                base.

            


    

    


    
      	C.  	
              Lobbies:
                1st&
                2nd
                floor lobbies shall be enhanced by an open stair with decorative
                stainless
                steel handrails. 

            


    

    


    
      	D.  	
              Restrooms:
                2' x 4' x 5/8" second look acoustical ceiling, ceramic tile on floors
                and
                at wet walls, vinyl wall covering at other walls with ceramic tile
                base.
                Corian counter tops and full height GWB partitions with painted louvered
                doors shall be provided, as well as recessed and semi-recessed toilet
                accessories and full width unframed mirrors. Fixture counts should be
                based on the code required minimums with upgraded capacity to accommodate
                the actual occupancy of the
                building.

            


    

    


    
      	E.  	
              Lighting
                for restrooms
                -
                Lighting will be accomplished with a combination of recessed soffit
                lighting as well as decorative wall mounted fixtures over counter
                tops.

            


    

    


    
      	F.  	
              Janitors
                Rooms
                -
                There shall be a minimum of one janitor room per floor equipped with
                utility sink, storage shelving, mop racks and receptor properly sized
                for
                ability to store all related equipment and
                supplies.

            


    

    


    
      	G.  	
              Perimeter
                interior shall be metal studs and insulation
                only.

            


    

    


    
      	H.  	
              Drinking
                fountains shall be provided to meet occupancy needs as well as comply
                with
                all applicable codes and provisions of the
                ADA.

            


    

    


    
      	I.  	
              Stair
                and elevator shafts to be CMU.

            


    

    


    
      	J.  	
              Interior
                "hard core" area partitions on all floors shall be constructed from
                floor
                to underside of deck above with 5/8" gypsum wallboard attached to
                each
                side of 3-5/8" wide 25 gauge metal studs located at 16" on center
                (similar
                for fire rated and/or shaft wall). 

            


    

    


    
      	K.  	
              Exterior
                doors shall be medium stile aluminum and glass to match window system
                with
                swing assist. 

            


    

    


    
      	L.  	
              Two
                (2) hydraulic elevators shall be provided for passenger use. The
                elevators
                shall be two 3,000 lb. capacity with door and frame finishes to be
                brushed
                stainless steel. Cab finishes will consist of Otis Elevators standard
                Wilsonart laminate wall panels and shall be ADA compliant. Elevator
                speeds
                are 125 / 150 fpm. Elevator to have 9’-0”interior ceiling
                height.

            


    

    


    
      	6.  	
              INTERIOR
                LIGHTING

            


    

    


    
      	A.  	
              Lobbies
                will be illuminated with dramatic pendant fixtures and recessed down
                lighting through out.

            


    

    


    
      	7.  	
              STRUCTURAL

            


    

    


    
      	A.  	
              The
                building shall be constructed of structural steel with composite
                metal
                deck and concrete floors. The foundation systems will be appropriate
                to
                the site specific subsurface
                conditions.

            


    

    


    
      	B.  	
              The
                floors shall be designed to accommodate a 100 lb. of live load.
                

            


    

    


    
      	C.  	
              The
                floor to floor height of the office building shall be approximately
                13’-6”
                to accommodate a minimum clear ceiling height of approximately 9'-0"
                after
                design build HVAC coordination is
                complete.

            


    

    


    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    
      	8.  	
              HEATING,
                VENTILATING, AND AIR CONDITIONING
                -
                assumed to be design build.

            


    

    


    Design
      base building engineering systems to include: 

    
      	o  	
              VAV
                base building system.

            


    

    
      	o  	
              Base
                Building Rooftop units (electric or
                gas)

            


    

    
      	o  	
              Vertical
                shafts and medium pressure duct work
                installed.

            


    

    
      	o  	
              VAV
                at lobby and toilets.

            


    

    
      	o  	
              VAV
                boxes throughout floors 1 / 1,800
                SF.

            


    

    
      	o  	
              Base
                Building fire protection.

            


    

    
      	o  	
              Incoming
                electrical service, switchgear, electrical risers, local panels at
                each
                floor.

            


    

    
      	o  	
              Primary
                switchgear, incoming utility
                services.

            


    

    


    
      	A.  	
              HVAC
                Design Criteria

            


    

    


    
      	1.  	
              The
                HVAC system shall be designed based on the following
                criteria:

            


    

    


    
      	a)  	
              Outdoor
                design conditions:

            


    

    


    i. Summer
      93°F
      DB and
      75°F
      WB

    ii. Winter
      10°F
      DB

    


    
      	b)  	
              Indoor
                design conditions:

            


    

    


    i. Office
      Space:    
75°F
      DB 50%
      RH - Summer - Occupied

    70°F
      DB 35%
      RH - Winter - Occupied

    Occupancy
      based on office load of one person per 250 USF.

     

    
      	c)  	
              Ventilation
                Requirements: (Per ASHRAE 62-1989). Restrooms will be provided with
                1 CFM
                per square foot exhaust and supply by air and
                infiltration.

            


    

    


    
      	d)  	
              HVAC
                system shall have approximately 195 (±58,000 RSF ÷ 300 SF/ton = 195 tons)
                tons of roof top mounted units. System shall serve approximately
                300 SF
                per ton and be equipped with DDC controls, economizers and outside
                air
                intakes. Heat loads exceeding design loads will be accommodated by
                separate units at Tenant costs.

            


    

    


    
      	e)  	
              Occupancy
                based on office load of one person per 250
                SF.

            


    

    


    
      	9.  	
              ELECTRICAL
                SYSTEMS
                -
                assumed to be design build.

            


    

    


    
      	A.  	
              The
                entire electrical distribution system shall comply with the National
                Electrical Code and any applicable local codes. Building equipped
                with a
                minimum of 1,000 KVA 1600 amp service fed by electric utility company
                feeds. 480/277 volt three phase four wire
                service.

            


    

     

    
      	B.  	
              Emergency
                System

            


    

    


    
      	1.  	
              Provide
                battery pack system or generator for life safety system; for night
                lights,
                exit lights, and emergency lights.

            


    

    


    C.
      Wattage

     

    
      
        	 

                Watts
                  / square feet  -  General
                  Power

              	
              	
              	
                7

              	
              
	
                Lighting
                  and general task

              	 	 	
                3

              	 
	
                HVAC

              	 	 	
                15

              	 
	
                TOTAL
                  WATTS/SF

              	 	 	
                25

              	 


      

    

    


    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    D.
      Fire
      Alarm System

    


    
      	1.  	
              The
                building will be equipped with a class A multiplexed, electrically
                supervised fire alarm system with smoke detection in all common areas
                and
                HVAC equipment tied into audible and visual alarms. The system will
                comply
                with IBC and ADA requirements.

            


    

    


    
      	10.  	
              PLUMBING
                -
                assumed to be design build.

            


    

     

    
      	A.  	
              All
                work shall conform to the latest IBC National Plumbing Code and local
                authorities having jurisdiction.

            


    

    


    
      	B.  	
              Provide
                domestic water system providing a minimum of 25 psi at each plumbing
                fixture with water velocities not exceeding five feet per second
                (5 FPS)
                for quiet operation.

            


    

    


    
      	C.  	
              Electric
                water coolers shall be self-contained electric, stainless steel bowl
                meeting ADA requirements.

            


    

    


    
      	D.  	
              Hot
                water heaters shall provide hot water at 100-105°
                F
                for general usage.

            


    

    


    
      	E.  	
              All
                plumbing fixtures shall be vitreous china, commercial quality. Water
                closets and urinals shall be flush valve type, siphon jet, wall hung.
                Lavatories shall be integral bowl, furnished with Corian vanity tops.
                All
                lavatory trim shall meet ADA
                requirements.

            


    

    


    
      	11.  	
              FIRE
                PROTECTION
                -
                assumed to be design build.

            


    

    


    
      	A.  	
              Design
                Criteria

            


    

    


    
      	1.  	
              The
                building will be equipped with a fully automated water source fire
                suppression system in accordance with the
                following:

            


    

    


    
      	a)  	
              NFPA
                13 (1993) - Installation of Sprinkler
                Systems.

            


    

    
      	b)  	
              International
                Building Code 2000

            


    

    
      	c)  	
              Local
                Fire Marshal.

            


    

    


    B. Automatic
      sprinklers shall be hydraulically designed for light, ordinary hazard in office
      areas, mechanical rooms and storage areas. Sprinklers shall be the
      following:

    


    
      	1.  	
              Non
                Public Spaces: semi-recessed type sprinkler
                heads.

            


    

    


    
      	2.  	
              General
                Public Area: concealed type sprinkler
                heads.

            


    

    


    
      	C.  	
              Landlord
                shall be responsible for the complete installation to code for an
                unfinished, vacant space with sprinkler heads turned up. Tenant shall
                be
                responsible, at its sole cost and expense, for pipe branches and
                additional heads to accommodate Tenant’s floor plan.
                

            


    

    


    
      	12.  	
              LANDSCAPING
                -
                assumed to be design build.

            


    

    


    
      	A.  	
              Landscaping
                includes new site landscaping treatment including shrubs, trees and
                extensive flowerbeds at
                entranceways.

            


    

    


    
      	13.  	
              MISCELLANEOUS

            


    

     

    ADA
      Compliance- The entire building and route access from parking lot handicapped
      spaces to building entrance will be in accordance with the Americans with
      Disabilities Act (ADA) including elevators and lobbies.

    


    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    



    ADDENDUM
      TO OFFICE LEASE AGREEMENT

    


    This
      Addendum is hereby attached to and made a part of that certain Office Lease
      Agreement (the "Lease") between STONE
      MANOR CORPORATE CENTER, L.P.
      ("Landlord") and DISCOVERY
      LABORATORIES, INC.,
      a
      Pennsylvania corporation 
      ("Tenant") for the premises shown on Exhibit
      "A-2"
      of the
      Lease at Stone Manor Corporate Center and is executed on even date with the
      Lease. 

    


    1. Conflict;
      Definitions.
      In the
      event there is a conflict between the provisions of this Addendum and any other
      part of the Lease, the provisions of this Addendum shall modify and supersede
      such other part of the Lease to the extent necessary to eliminate any such
      conflict. All terms which are defined in any other part of the Lease shall
      have
      the same meaning when used in this Addendum.

    


    2. Completion
      of the Landlord’s Work.
      

    


    (a)  Landlord
      agrees to use reasonable efforts and due diligence to “substantially complete”
the work set forth in the Work Letter (the “Work”) by September 27, 2004 (the
“Construction Deadline”), subject to Tenant Delay and the force majeure
      provisions contained in the Lease. As used herein, the term “substantially
      complete” shall mean the date that (i) the
      Work
      is completed to a state to permit Tenant to reasonably and conveniently use
      and
      occupy the Premises for the conduct of its business, even though the
      installation of minor details, decorations and mechanical adjustments by
      Landlord and any improvements to be performed by Tenant, remain to be completed,
      and (ii) a certificate of occupancy has been issued by Warrington Township
      so as
      to permit Tenant to use and occupy the Premises for the conduct of its business,
      whichever is later.

     

    (b) If
      Landlord fails to substantially complete the Work by the Construction Deadline,
      subject to Tenant Delay and the force majeure provisions contained in the Lease,
      then Tenant shall have the right to terminate the Lease under and subject to
      the
      following terms and conditions:

    


    (i) Tenant
      shall first be required to deliver written notice to Landlord specifying
      Landlord's non-compliance with its obligations under this Paragraph
      2(b)
      (which
      notice may not be delivered until after the Construction Deadline) and give
      Landlord 30 days in which to substantially complete the Work. If Landlord
      substantially completes the Work within 30 days after receipt of Tenant's notice
      under this Paragraph
      2(b),
      then
      Tenant shall forfeit its right to terminate the Lease under this Paragraph
      2.

    


    (ii) If
      Landlord fails to substantially complete the Work within the aforesaid 30-day
      grace period, then Tenant shall have the right, by delivery of written notice
      to
      Landlord at any time after the expiration of the aforesaid 30-day grace period
      but prior to Landlord's substantial completion of the Work, as Tenant's sole
      and
      exclusive remedy, to terminate the Lease; whereupon the Lease shall terminate
      on
      the date of Landlord's receipt of the aforesaid termination notice. Tenant's
      failure to timely comply with the notice provisions contained in this
      Subparagraph (ii) shall be deemed to constitute a waiver of Tenant's right
      to
      terminate the Lease under this Paragraph
      2.

    


    3. Termination
      Option.
      Tenant
      shall have the option to terminate the Lease (the “Termination Option”) at any
      time after the 39th
      month
      (the “Termination Date”), provided that (a) Tenant gives written notice to
      Landlord (the “Termination Notice”) at least 9 months prior to the Termination
      Date of Tenant’s desire to exercise the Termination Option, and (b) Tenant pays
      Landlord, at the time Tenant delivers the Termination Notice, a lease
      termination fee equal to (i) the sum of the unamortized cost of Landlord’s Work,
      amortized on a straight line basis at a rate of 8% over the initial term of
      the
      Lease and (ii) unamortized commissions paid by Landlord in connection with
      the
      Lease amortized on a straight line basis at a rate of 8% over the initial term
      of the Lease, plus:

    


    
      	·  	
              6
                months of Base Rent if the Lease is terminated between months 40
                through
                47 inclusive; or

            


    

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    
      	·  	
              5
                months of Base Rent if the Lease is terminated between months 48
                through
                55 inclusive;

            


    

     

    
      	·  	
              4
                months of Base Rent if the Lease is terminated between months 56
                through
                60 inclusive;

            


    

     

    
      	·  	
              3
                months of Base Rent if the Lease is terminated in month
                61;

            


    

     

    
      	·  	
              2
                months of Base Rent if the Lease is terminated in month 62;
                or

            


    

     

    
      	·  	
              1
                month of Base Rent if the Lease is terminated in month
                63.

            


    

    


    Tenant’s
      failure to comply with the aforesaid requirements shall be deemed a waiver
      of
      Tenant’s right to exercise the Termination Option. If Tenant exercises the
      Termination Option in accordance with the terms of this Paragraph
      3,
      then
      the Lease shall terminate on the Termination Date specified in the Termination
      Notice and Tenant shall not be liable for the payment of Rent or any other
      sums
      due under the Lease after the Termination Date.

    


    4. Electricity
      and Gas.
      Notwithstanding anything to the contrary set forth in Paragraph
      7.2
      of the
      Lease:

    


    (a) Tenant
      shall pay for all electricity and gas used in the Premises.

    


    (b) Landlord
      shall install separate meters to measure the electricity and gas used by Tenant
      in the Premises. Landlord and Tenant shall split the cost of installing the
      separate meters, provided that Tenant’s cost shall be capped at Six Thousand Two
      Hundred Fifty Dollars ($6,250.00).

    


    5. Right
      of First Offer.
      

     

    (a) Provided
      that Tenant is not in default under the Lease and subject to the terms and
      conditions of this Paragraph
      5,
      Tenant
      shall have the right to lease any additional space that may become available
      for
      lease on the 3rd
      floor of
      the Building during the term of the Lease (the “Available Space”), at any time
      up to, but within ten (10) days after, Tenant's receipt of written notice from
      Landlord that Landlord intends to begin to market the Available Space for lease,
      by delivery of written notice (the "Expansion Notice") to Landlord specifically
      electing such right. Tenant must lease all of the Available Space and may not
      elect to lease a portion thereof. 

    


    (b) In
      the
      event that Tenant notifies Landlord of its election to lease the Available
      Space
      in accordance with Paragraph
      5(a)
      above,
      then Landlord and Tenant shall attempt to negotiate the terms upon which
      Landlord would be willing to lease the Available Space to Tenant (i.e., rent,
      term, construction allowance, etc.). If Landlord and Tenant are unable to
      mutually agree upon such lease terms within ten (10) days after Landlord's
      receipt of the Expansion Notice, then Tenant shall have no further rights to
      lease the Available Space and Landlord may thereafter lease the Available Space
      without having to re-offer the Available Space to Tenant. If Landlord and Tenant
      are unable to mutually agree upon such lease terms, Landlord shall be free
      to
      lease the Available Space to any third party provided that: (i) the base rent
      (excluding any tenant allowances and other concessions given to new tenants)
      in
      such lease is at least 90% of the base rent (excluding any tenant allowances
      and
      other concessions given to new tenants) offered to Tenant, and (ii) the other
      material terms in such lease are substantially similar to the lease terms (other
      than base rent) offered to Tenant.

    


    (c) Landlord
      shall be under no obligation to offer any space for lease to Tenant under this
      Paragraph
      5
      that is
      vacant on the date of this Lease or renewed by an existing
      occupant.

    


    (d) Tenant’s
      rights under this Paragraph
      5
      are
      subject to the rights of any tenant as of the date hereof.

    


    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    6. Letter
      of Credit.
      Notwithstanding anything to the contrary set forth in Paragraph
      32
      of the
      Lease:

    


    (a) At
      Tenant’s election, in lieu of posting the security deposit set forth in the
      Lease, Tenant at any time simultaneously with, or following the execution of
      the
      Lease, shall deliver to Landlord an irrevocable letter of credit, payable in
      U.S. Dollars, running in favor of Landlord and issued by a bank insured by
      the
      Federal Deposit Insurance Corporation, in the amount of the required security
      deposit. The letter of credit shall be irrevocable for the term of the Lease
      and
      shall provide that it is automatically renewable for a period ending not earlier
      than sixty (60) days after the expiration of the term hereby demised without
      any
      action whatsoever on the part of Landlord; provided that the issuing bank shall
      have the right not to renew said letter of credit on written notice to Landlord
      not less than sixty (60) days prior to the expiration of the then current term
      thereof (it being understood, however, that the privilege of the issuing bank
      not be renew said letter of credit shall not, in any event, diminish the
      obligation of Tenant to maintain such irrevocable letter of credit with Landlord
      through the date which is sixty (60) days after the expiration of the term
      hereby demised). 

    


    (b) The
      form
      and terms of the letter of credit (and the bank issuing the same) shall be
      acceptable to Landlord and shall provide, among other things, in effect
      that:

    


    (i) Landlord,
      or its then managing agent, shall have the right to draw down an amount up
      to
      the face amount of the letter of credit upon the presentation to the issuing
      bank of Landlord’s (or Landlord’s then managing agent’s) statement that such
      amount is due to Landlord under the terms and conditions of the Lease, it being
      understood that if Landlord or its managing agent be a corporation, partnership
      or other entity, such statement shall be signed by an officer (if a
      corporation), a general partner (if a partnership), or any authorized party
      (if
      another entity).

    


    (ii) The
      letter of credit will be honored by the issuing bank without inquiry as to
      the
      accuracy thereof and regardless of whether the Tenant disputes the content
      of
      such statement.

    


    (iii) In
      the
      event of a transfer of Landlord’s interest in the Building, Landlord shall have
      the right to transfer the letter of credit to the transferee and thereupon
      the
      Landlord shall, without any further agreement between the parties, be released
      by Tenant from all liability therefore, and it is agreed that the provisions
      thereof shall apply to every transfer or assignment of said letter of credit
      to
      a new Landlord.

    


    (c) If,
      as a
      result of any such application of all or any part of such security, the amount
      secured by the letter of credit shall be less than the required security
      deposit. Tenant shall forthwith provide Landlord with additional letter(s)
      of
      credit in an amount equal to the deficiency.

    


    (d) Tenant
      further covenants that it will not assign or encumber said letter of credit
      or
      any part thereof and that neither Landlord nor its successors or assigns will
      be
      bound by any such assignment, encumbrance, attempted assignment or attempted
      encumbrance.

    


    (e) Without
      limiting the generality of the foregoing, if the letter of credit expires
      earlier than sixty (60) days after the expiration of the term of this Lease,
      or
      the issuing bank notifies Landlord that it shall not renew the letter of credit,
      Landlord will accept a renewal thereof or substitute letter of credit (such
      renewal or substitute letter of credit to be in effect not later than thirty
      (30) days prior to the expiration thereof), irrevocable and automatically
      renewable as above provided to sixty (60) days after the end of the term of
      the
      Lease upon the same terms as the expiring letter of credit or such other terms
      as may be acceptable to Landlord. However, (i) if the letter of credit is not
      timely renewed or a substitute letter of credit is not timely received, (ii)
      or
      if Tenant fails to maintain the letter of credit in the amount and terms set
      forth in this Paragraph, Tenant, at least thirty (30) days prior to the
      expiration of the letter of credit, or immediately upon its failure to comply
      with each and every term of this Paragraph, must deposit with Landlord cash
      security in the amounts required by, and to be held subject to and in accordance
      with, all of the terms and conditions set forth in the Lease for security
      deposits, failing which Landlord may present such letter of credit to the bank,
      in accordance with the terms of this Paragraph, and the entire sum secured
      thereby shall be paid to Landlord, to be held by Landlord as provided in this
      Paragraph, and as provided in the Lease for security deposits.

    


    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    (f) Provided
      that no Event of Default shall have occurred and there is no existing
      circumstance which with the passage of time, or the giving of notice or both,
      would give rise to an Event of Default, the security deposit (whether posted
      in
      cash or in the form of a letter of credit) shall be reduced to $400,000 on
      the
      first day of the 40th
      month
      after the Commencement Date.

    


    7. Operating
      Expenses.
      Notwithstanding anything to the contrary set forth in Paragraph
      6.1
      of the
      Lease:

    


    (a) Landlord
      agrees that any services provided to the Building by Landlord (or any affiliate
      of Landlord) and included within the Operating Expenses shall be provided at
      a


    cost
      which is both commercially reasonable and comparable with that which could
      be
      obtained from an independent contractor or supplier of such
      services.

    


    (b) Real
      estate taxes shall not include the federal, state or local income taxes owed
      by
      the parties constituting Landlord. 

    


    (c) If
      Landlord elects, in Landlord's sole discretion, to pay a real estate tax bill
      for the Building prior to the due date, then Landlord shall pass along any
      discounts received from such early payment within the calculation of Operating
      Expenses.

    


    (d) Operating
      Expenses shall not include: (i) capital expenditures to prepare space for
      occupancy by a new tenant; (ii) repairs occasioned by insured casualties to
      the
      extent of the insurance proceeds received by Landlord; (iii) leasing
      commissions, advertising costs or other expenses incurred in leasing or
      procuring new tenants or attorneys’ fees which are incurred in connection with
      negotiations or disputes with tenants or prospective tenants; (iv) costs of
      decorating or redecorating a tenant’s space; (v) costs of relocating a tenant to
      a new space; (iv) repairs or rebuilding necessitated by a condemnation to the
      extent of the proceeds received by Landlord; (vi) debt service payments; (vii)
      amounts in excess of fair market rates with respect to any service provided
      by
      an affiliate of Landlord; (viii) management fees in excess of One Dollar ($1.00)
      per square foot; (ix) costs incurred due to violations by Landlord of any of
      the
      terms and conditions of any lease; (x) any particular items and services for
      which Tenant or any other tenant otherwise reimburses Landlord by direct payment
      over and above Base Rental; and (xi) any fines or penalties incurred due to
      violations by Landlord of applicable legal requirements relating to the Building
      or the Project and any expenses resulting directly from the gross negligence
      or
      intentional misconduct of Landlord; (xii) costs of abating or otherwise
      remediating any hazardous materials, present in or under the Building as of
      the
      date hereof, or correcting violations of existing legal requirements existing
      as
      of the date hereof; (viii) cost of art work in Building Common Areas; (xiv)
      any
      wages, salaries or other benefits paid to any employee not employed for or
      on
      behalf of the Building or the Project; and (xv) salaries and benefits of
      officers of Landlord.

    


    8. Extension
      Option.
      

    


    (a) Provided
      that Tenant is not in default under the Lease, Tenant shall have the option
      to
      extend the term of the Lease for one (1) additional term of five (5) years
      (the
      "Extension Option"), upon the same terms and conditions set forth in the Lease
      for the initial term, except that (a) the Base Rental shall be adjusted as
      hereinafter set forth, (b) Tenant shall not be entitled to the completion of
      any
      fit-up work as provided for in the Lease, and (c) Tenant shall have no other
      rights to extend the term of the Lease. In the event that Tenant decides to
      exercise the Extension Option, Tenant shall do so by giving written notice
      thereof to Landlord at least nine (9) months prior to the termination of the
      initial term of the Lease. The failure of Tenant to give such notice to Landlord
      at least nine (9) months prior to the termination of the initial term of the
      Lease shall be deemed a waiver by Tenant of such option to extend the term
      of
      the Lease. 

    


    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    (b) The
      Base
      Rental during the Extension Option shall be equal to ninety-five percent (95%)
      of the fair rental value of the Premises, as of the commencement of the
      Extension Option, based on the prevailing rental rate for com-parable office
      space in the Project as of the commencement of the Extension Option (with fair
      market value annual increases during the Extension Option), but in no event
      less
      than the Base Rental due for the last year of the initial term (the "Fair Rental
      Value"). The Fair Rental Value shall be determined by agreement between Landlord
      and Tenant at least six (6) months prior to the commencement of the Extension
      Option. In the event that Landlord and Tenant are unable to agree upon the
      Fair
      Rental Value by such date, an independent real estate appraiser located in
      the
      City of Philadelphia (who shall be a MAI or its equivalent) will be jointly
      selected by Landlord and Tenant and instructed to determine the Fair Rental
      Value. If Landlord and Tenant are unable to agree on an appraiser, an appraiser
      (from the City of Philadelphia) shall be appointed by the President of the
      Philadelphia Metropolitan Chapter of the Appraisal Institute. The determination
      by such appraiser as to the Fair Rental Value shall be final and binding upon
      Landlord and Tenant. The cost of such appraiser shall be borne equally by
      Landlord and Tenant.

    


    9. Fire
      or Other Casualty.
      Notwithstanding anything to the contrary set forth in Paragraph
      20
      of the
      Lease.

     

    (a)  If
      the
      Premises are damaged by fire or other casualty and Landlord does not advise
      Tenant that it has received insurance proceeds sufficient to pay the full cost
      of any necessary repairs (or has not advised Tenant that Landlord has other
      funds available and allocated for this purpose) within three (3) months of
      the
      date of such damage, or if Landlord fails to repair any such damage within
      six
      (6) months of the date of such damage, or if any such damage occurs during
      the
      last six (6) months of the initial lease term or any Extension Option, then
      Tenant shall have the right (provided that Tenant is not in default hereunder),
      to be exercised by notice in writing to Landlord within ten (10) days after
      the
      occurrence of either such event, to elect to terminate this Lease and, in such
      event, this Lease and the tenancy thereby created shall cease as of the date
      of
      such termination, unless terminated earlier by Landlord under Paragraph
      20
      of the
      Lease, and the rent and charges under this lease shall be adjusted as of the
      date of the casualty.

    


    (b)  Notwithstanding
      anything contained in this Lease to the contrary, if the Premises are damaged
      by
      fire or other casualty, Landlord shall have the right, at Landlord’s sole option
      and at a Landlord’s cost and expense, to relocate Tenant to comparable space in
      the Project for the balance of the Lease Term.

    


    10. Interruption
      of Services.
      Notwithstanding anything to the contrary set forth in Paragraph
      7
      of the
      Lease, in the event that any of the Building services specified in the Lease
      to
      be provided by Landlord are interrupted and such interruption prevents Tenant
      from using the Premises to conduct its business, Landlord agrees to use
      reasonable efforts and due diligence to cure any such interruption and return
      the Building services to the Premises. In
      the
      event there is a failure to furnish the services specified in this Lease, and
      if
      such failure is of a material nature so as to render any portion of the Premises
      substantially unusable for the purposes contemplated by this Lease and Tenant
      does, in fact, stop using the affected portion of the Premises, and after
      written notice thereof by Tenant to Landlord, then, if such failure continues
      to
      remain uncured for more than 20 consecutive business days after such written
      notice, Rent payments shall abate, based upon the portion or portions of the
      Premises affected by such interruption of service and the degree of adverse
      affect of the interruption upon the normal conduct of Tenant’s business at the
      Premises, until such failure is remedied. Landlord may prevent or stop any
      such
      abatement of Rent payments by providing substantially the same service by
      temporary or alternative means until the cause of loss of service can be
      corrected. 

    


    11.  Access
      to the Premises.
      With
      respect to Landlord's right to access the Premises, Landlord agrees to use
      reasonable efforts to (a) give Tenant at least 24 hours telephone notice prior
      to entry into the Premises (except in the event of an emergency where notice
      shall not be required), and (b) minimize any disruption or interference with
      the
      operation of Tenant's business. 

    


    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    12. Compliance
      with Laws.
      Except
      as otherwise required to be completed by Tenant under the Lease, Landlord agrees
      to comply with all present and future laws, rules, regulations, ordinances,
      guidelines, judgments and orders concerning the common areas of the Building,
      including, without limitation, the Americans with Disabilities Act. Tenant
      shall
      reimburse Landlord, as part of the Operating Expenses, for its proportionate
      share of such costs incurred by Landlord pursuant to this Paragraph
      12.

    


    13. Rules
      and Regulations.
      Landlord shall use reasonable efforts to uniformly enforce all rules and
      regulations applicable to the Building among all tenants located in the
      Building. In addition, in the event of any discrepancy or conflict between
      any
      such rules and regulations and the terms of the Lease, the terms of the Lease
      shall control. 

    


    14. Legal
      Fees.
      In the
      event that Tenant institutes a lawsuit against Landlord to enforce or to recover
      damages for the breach of any of the terms of the Lease, it is specifically
      agreed that Tenant shall recover from, or be paid by Landlord, in addition
      to
      all items which Tenant may be entitled to recover in law or in equity, if Tenant
      is the prevailing party in such litigation, reasonable attorney’s fees, and the
      costs and disbursements of said proceeding. Said payments will be due to Tenant,
      provided that Tenant is the prevailing party in any such litigation, within
      30
      days after the conclusion of same. Tenant’s petition and/or pleadings may make
      demand for payment of attorney’s fee as an amount currently due and owing to
      Tenant as of the date of the petition and/or pleadings, without the necessity of
      any prior or further demand therefore or invoice for the same.

    


    15. Allowance.
      Tenant
      may use any unused portion of the Allowance towards Tenant’s architectural and
      design fees, installation of Tenant’s voice and data cabling, signage and
      security system, but in no event shall any portion of the Allowance be applied
      towards payment of rent.

    


    16. Estimated
      Commencement Date; Estimated Expiration Date.
      Tenant
      shall deliver (a) permittable drawings which shall include the reflective
      ceiling plan by May 21, 2004, and (b) a complete set of Plans (consisting
      of fully dimensioned and complete sets of plans and specifications, including
      detailed architectural, structural, mechanical, electrical and plumbing
      plans)
      for the
      Work as required by the terms of the Work Letter attached as Exhibit D to the
      Lease by June 4, 2004. In the event that Tenant fails to deliver (x) permittable
      drawings which shall include the reflective ceiling plan by May 21, 2004, and/or
      (y) a complete set of Plans (consisting
      of fully dimensioned and complete sets of plans and specifications, including
      detailed architectural, structural, mechanical, electrical and plumbing
      plans)
      for the
      Work as required by the terms of the Work Letter attached as Exhibit D to the
      Lease by June 4, 2004, then the Estimated Commencement Date and the Estimated
      Expiration Date will each be extended by one day for each day after May 21,
      2004
      or June 4, 2004, as applicable, until Tenant delivers permittable drawings
      or a
      complete set of Plans for the Work, as applicable. 

    


    17. Patio
      Area.
      Landlord shall, as part of the Work, install a patio area (the “Patio Area”) at
      a location to be approved by Landlord, in Landlord’s sole and absolute
      discretion.

    


    18. Audits.
      If
      any
      audit conducted
      by
      Tenant pursuant to Paragraph 6.7 of the Lease reveals fraud or that the amount
      of the Building Operating Expenses or the Site Operating Expenses billed to
      Tenant is more than 5% in excess of Tenant’s Building Proportionate Share of
      actual Building Operating Expenses or Tenant’s Site Proportionate Share of
      actual Site Operating Expenses, then Landlord shall pay the reasonable costs
      and
      expenses incurred by Tenant in connection with such audit, not to exceed
      $2,500.00. 

    


    19. Landlord’s
      Maintenance Obligations.
      Landlord
      shall, at Landlord’s cost reimbursable
      as a Building Operating Expense or a Site Operating Expense, cause
      to
      be performed all maintenance, repairs and/or replacements to the Common Areas
      of
      the Building and all other areas within the Building not under the exclusive
      lease or occupancy of any one tenant, including structural maintenance, repairs,
      and replacements, as well as maintenance, repair and/or replacement of the
      foundations, the roofs, the HVAC systems, electrical systems above mechanical
      and plumbing systems, life safety systems, security systems, shafts (including
      elevator shafts), elevator cabs, stairs and stairwells, exterior walls and
      windows throughout the Building wherever located, necessary for compliance
      with
      applicable legal requirements, necessary to the good condition and proper
      functioning of the Building, and consistent with the appearance of comparable
      office buildings in the general vicinity of the Building. 

    


    
      
        
        

      

      
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    20. Punch
      List.
      Prior
      to
      taking possession of the Premises Landlord and Tenant shall prepare a punch-list
      of agreed-upon items to be completed by Landlord as part of the Work. Landlord
      shall use reasonable efforts to complete the punch-list items within ninety
      (90)
      days after agreement is reached on such punch-list (or such longer time as
      is
      reasonably necessary in light of such work). Tenant’s taking possession of the
      Premises shall constitute the acknowledgment by, and representation of, Tenant
      that the Premises, were in good and satisfactory condition when possession
      was
      so taken except as otherwise expressly provided in the Work Letter or any such
      punch list.

    


    21. Alterations
      and Improvements.
      Notwithstanding
      anything
      to the contrary set fort in Paragraph 11 of the Lease, Tenant may
      make
      non-structural alterations, improvements or additions to the Premises upon
      at
      least 10 days prior written notice to Landlord, but without Landlord’s consent,
      provided the cost of such non-structural alterations, improvements or additions
      do not exceed $50,000, in the aggregate. All such non-structural alterations,
      improvements or additions shall be made in accordance with the provisions of
      Paragraph 11 of the Lease, and shall be removed by Tenant upon termination
      of
      the Lease a provided in Paragraph 11.4 of the Lease.

    


    22. Landlord’s
      Indemnification.
      Landlord will indemnify, defend and hold harmless Tenant and its agents or
      employees against any claims or costs, including reasonable attorneys' and
      paralegals' fees, arising from conduct or from any breach or default on the
      part
      of Landlord, its agents or employees during the Lease Term or from such acts
      or
      conduct of any subtenant, employee, agent, servant, customer or contractor
      of
      Landlord. In case any action or proceeding be brought against Tenant by reason
      of any obligation on Landlord’s part to be performed under the terms of this
      Lease, or arising from any act or negligence of the Landlord, or of its agents
      or employees, Landlord upon notice from Tenant will defend the same at Landlord
      's expense by counsel reasonably satisfactory to Tenant. If any damage to the
      Project (excluding the Premises) results from any act or negligence of Landlord,
      Tenant may at Tenant 's option repair such damage, and Landlord will thereupon
      pay to Tenant the total cost of such repairs and damages to the Project
      (excluding the Premises); provided, however, that Tenant waives any right of
      action against Landlord for any loss or damage to the Project, including the
      Premises, resulting from fire or other casualty by such act or negligence if
      Tenant 's insurance policy covers such loss or damage and per-mits such a
      waiver.

    


    23. Landlord’s
      Lien.
      Landlord hereby agrees to subordinate any and all landlord’s liens granted to it
      by operation of law in favor of any institutional financing that Tenant may
      obtain at any time during the term of this Lease, if required by any such
      institutional lender provided Landlord and such institutional lender enter
      into
      a subordination agreement in a form reasonably acceptable to
      Landlord.

    


    24.  Tenant’s
      Authority.
      Tenant
      is a Delaware corporation duly formed and validly existing under the laws of
      the
      State of Delaware and in good standing and authorized to do business in the
      Commonwealth of Pennsylvania. Tenant has full power and authority to enter
      into
      and perform and comply with the terms and conditions of the Lease and this
      Addendum. Tenant shall provide to Landlord a resolution of Tenant’s board of
      directors authorizing the execution and delivery of the Lease and this Addendum
      and approving the transactions contemplated thereby and hereby.

     

    25.  Tax
      Credit.
      If
      Landlord receives any real estate tax credit, rebate, refund, reduction or
      other
      adjustment (“Tax Credit”) with respect to the Building or the Project, then at
      all times during the term, Landlord shall deliver to Tenant its proportionate
      share of such Tax Credit; provided, however, Tenant shall pay its proportionate
      share of the costs of any contest, proceeding or action brought by Landlord
      to
      contest the validity or amount of any real estate tax.

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed
      by
      their duly authorized officers or representatives.

     

    
      	WITNESS:	 	 
	 	LANDLORD: 
	 	 
	 	STONE
              MANOR
              CORPORATE CENTER, L.P.
	
              ATTEST:

                

              
               
              (Asst.) Secretary	
               

              By:

              
 

            	 
SM
              Corporate Center, Inc.
	 	By:  	 
	 	
              
Walter
              S. Smerconish, President
	 	 
	 	
               

            


      
        	 	 	 
	 	 
	 	TENANT:
	 	 
	 	DISCOVERY
                LABORATORIES, INC.
	
                ATTEST:

              	 
 	 
 
	
                
                  
              
                  (Asst.) Secretary

              	By:  	 
	 	
                
(Vice)
                President
	 	 
	 	 


      

    

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

     

    

      COMMENCEMENT
        DATE AGREEMENT

      


      It
        is
        hereby agreed among the parties to that certain Lease Agreement dated May
        26,
        2004, for Suites 100 and 200, in the building commonly known as Office Building
        A in Stone Manor Corporate Center, located on Easton Road in Warrington
        Township, PA (the “Lease”) between Discovery
        Laboratories, Inc. (“Tenant”),
        and Stone
        Manor Corporate Center, L.P.
        (“Landlord”) that:

      


      
        	 	
                1.

              	
                The
                  Commencement Date of the Lease, as referred to in the Schedule
                  of the
                  Lease, is November 19, 2004.

              


      

      


      
        	 	
                2.

              	
                The
                  provisions of Paragraph 31 of the Lease will apply to and are hereby
                  incorporated into this Agreement.

              


      

      


      IN
        WITNESS WHEREOF, Landlord and Tenant have executed this Commencement Date
        Agreement as of the date hereof.

      


      


      
        	
                WITNESS:

              	
                TENANT:
                  DISCOVERY LABORATORIES

              
	 	 
	
                
                  _________________________________

                

              	
                By:_________________________________

              
	
                Name:
                  Julia Fitzgibbons

              	
                Name:
                  David Lopez

              
	 	
                Its:
                  Senior VP, General Counsel

              
	 	
                Date:
                  1/17/05

              
	 	 
	 	 
	
                WITNESS:

              	
                LANDLORD:
                  STONE MANOR CORPORATE CENTER, L.P.

              
	 	
                By:
                   SM
                  Corporate Center, Inc.

              
	 	 
	
                _________________________________

              	
                
                  By:_________________________________

                

              
	
                Name:
                  Gwen Damone

              	
                Name:
                  Walter S. Smerconish

              
	 	
                Title:
                  President

              
	 	
                Date:
                  1/19/05