Document:

exv10w02

 

Exhibit 10.02

NEW JERSEY

NEW JERSEY

TRIPLE NET LEASE

BRANDYWINE OPERATING PARTNERSHIP, L.P.,

QAD Inc. a Delaware corporation

Tenant

for Entire Second Floor of the West Wing and a portion of the first floor of the West Wing

10000 Midlantic Drive West

Mt. Laurel, New Jersey 08057

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE	 	TITLE	 	PAGE NUMBER
	1.

	 	SUMMARY OF DEFINED TERMS.
	 	 	1	 
	2.

	 	PREMISES.
	 	 	3	 
	3.

	 	TERM.
	 	 	3	 
	4.

	 	CONSTRUCTION .
	 	 	4	 
	5.

	 	FIXED RENT; SECURITY DEPOSIT.
	 	 	5	 
	6.

	 	ADDITIONAL RENT.
	 	 	6	 
	7.

	 	ELECTRICITY CHARGES.
	 	 	10	 
	8.

	 	SIGNS; USE OF PREMISES AND COMMON AREAS.
	 	 	10	 
	9.

	 	ENVIRONMENTAL MATTERS.
	 	 	11	 
	10.

	 	TENANT’S ALTERATIONS.
	 	 	13	 
	11.

	 	CONSTRUCTION LIENS.
	 	 	14	 
	12.

	 	ASSIGNMENT AND SUBLETTING.
	 	 	14	 
	13.

	 	LANDLORD’S RIGHT OF ENTRY.
	 	 	17	 
	14.

	 	REPAIRS AND MAINTENANCE.
	 	 	17	 
	15.

	 	INSURANCE; SUBROGATION RIGHTS.
	 	 	18	 
	16.

	 	INDEMNIFICATION.
	 	 	19	 
	17.

	 	QUIET ENJOYMENT.
	 	 	20	 
	18.

	 	FIRE DAMAGE.
	 	 	20	 
	19.

	 	SUBORDINATION; RIGHTS OF MORTGAGEE.
	 	 	21	 
	20.

	 	CONDEMNATION.
	 	 	21	 
	21.

	 	ESTOPPEL CERTIFICATE.
	 	 	22	 
	22.

	 	DEFAULT.
	 	 	22	 
	23.

	 	INTENTIONALLY OMITTED PRIOR TO EXECUTION .
	 	 	26	 

i

 

	 	 	 	 	 	 	 
	ARTICLE	 	TITLE	 	PAGE NUMBER
	24.

	 	LANDLORD’S REPRESENTATIONS AND WARRANTIES.
	 	 	26	 
	25.

	 	SURRENDER.
	 	 	26	 
	26.

	 	RULES AND REGULATIONS.
	 	 	26	 
	27.

	 	GOVERNMENTAL REGULATIONS.
	 	 	26	 
	28.

	 	NOTICES.
	 	 	27	 
	29.

	 	BROKERS.
	 	 	27	 
	30.

	 	CHANGE OF BUILDING/PROJECT NAME.
	 	 	27	 
	31.

	 	LANDLORD’S LIABILITY.
	 	 	27	 
	32.

	 	AUTHORITY.
	 	 	28	 
	33.

	 	NO OFFER.
	 	 	28	 
	34.

	 	RENEWAL.
	 	 	28	 
	35.

	 	RIGHT OF EXPANSION.
	 	 	29	 
	36.

	 	ROOF RIGHTS
	 	 	29	 
	37.

	 	EARLY TERMINATION
	 	 	30	 
	38.

	 	TENANT FINANCIAL INFORMATION.
	 	 	30	 
	39.

	 	MISCELLANEOUS PROVISIONS.
	 	 	30	 
	40.

	 	WAIVER OF TRIAL BY JURY.
	 	 	32	 
	41.

	 	CONSENT TO JURISDICTION.
	 	 	32	 

	 	 	 	 	 
	EXHIBITS	 	 	 	 
	EXHIBIT “A”

	 	-
	 	SPACE PLAN OF PREMISES
	EXHIBIT “B”

	 	-
	 	CONFIRMATION OF LEASE TERM
	EXHIBIT “C”

	 	-
	 	RULES AND REGULATIONS
	EXHIBIT “D”

	 	-
	 	CLEANING SPECIFICATIONS

ii

 

LEASE

THIS LEASE (“Lease”) entered into as of the 4th day of April, 2006, between
BRANDYWINE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Landlord”), and QAD INC.,
a Delaware corporation, with its principal place of business at 6450 Via Real, Carpinteria,
California 93013 (“Tenant”).

WITNESSETH

     In consideration of the mutual covenants herein set forth, and intending to be legally bound,
the parties hereto covenant and agree as follows:

     1. SUMMARY OF DEFINED TERMS.

     The following defined terms, as used in this Lease, shall have the meanings and shall be
construed as set forth below:

          (a) “Building”: The Building located at 10000 Midlantic Drive, Mt. Laurel, New
Jersey 08054

          (b) “Project”: The Building, the land and all other improvements located at Mt.
Laurel Corporate Center, Mt. Laurel, New Jersey.

          (c) “Premises”: The entire second floor of the West Wing of the Building and a
portion of the first floor of the West Wing of the Building, which the parties stipulate and agree
is 43,528 rentable square feet of space in the Building as shown on the space plan attached hereto
as Exhibit “A” and made a part hereof.

          (d) “Term”: From the Commencement Date for a period of 84 months, ending on the last
calendar day of the month.

          (e) “Fixed Rent”:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MONTHLY	 	ANNUAL
	LEASE YEAR	 	PER R.S.F.	 	INSTALLMENTS	 	FIXED RENT
	Months 1-12
	 	$	13.00	 	 	$	47,155.33	 	 	$	565,864.00	 
	Months 13-24
	 	$	13.50	 	 	$	48,969.00	 	 	$	587,628.00	 
	Months 25-36
	 	$	14.00	 	 	$	50,782.67	 	 	$	609,392.00	 
	Months 37-48
	 	$	14.50	 	 	$	52,596.33	 	 	$	631,156.00	 
	Months 49-60
	 	$	15.00	 	 	$	54,510.00	 	 	$	652,920.00	 
	Months 61-72
	 	$	15.50	 	 	$	56,223.67	 	 	$	674,684.00	 
	Months 73-84
	 	$	16.00	 	 	$	58,037.33	 	 	$	696,448.00	 

          (f) “Security Deposit”: $0.00

          (g) “Tenant’s Allocated Share”: 24.30%.

          (h)
“Rentable Area”: Premises 43,528 ft.

 Building 179,098 ft.

          (i) “Permitted Uses”: Tenant’s use of the Premises shall be limited to general
office use, related purposes and storage incidental thereto. Tenant’s rights to use the
Premises shall be subject to all applicable laws and governmental rules and regulations and to
all reasonable requirements of the insurers of the Building.

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          (j) “Broker” Cushman & Wakefield of Pennsylvania and Cushman & Wakefield of
California, Inc.

          (k) “Notice Address/Contact”

	 	 	 	 	 
	 

	 	Landlord:
	 	BRANDYWINE OPERATING PARTNERSHIP, L.P.
	 

	 	 	 	10000 Midlantic Dr.
	 

	 	 	 	Suite 300 W
	 

	 	 	 	Mt. Laurel, New Jersey 08054
	 

	 	 	 	Attn: George D. Sowa, Senior Vice President
	 

	 	 	 	E-Mail: gsowa@brandywinerealty.com
	 
	 	 	 	 
	 

	 	with a copy to:	 	 
	 

	 	 	 	Brandywine Realty Trust
	 

	 	 	 	Brandywine Realty Trust
	 

	 	 	 	401 Plymouth Road, Suite 500
	 

	 	 	 	Plymouth Meeting, PA 19462
	 

	 	 	 	Fax No. (610) 325-5622
	 

	 	 	 	E-Mail: bmolotsky@brandywinerealty.com
	 

	 	 	 	Attn: Brad A. Molotsky, General Counsel
	 
	 	 	 	 
	 

	 	Tenant:
	 	QAD Inc.
	 

	 	 	 	6450 Via Real
	 

	 	 	 	Carpinteria, California 93013
	 

	 	 	 	Fax No.:                       
	 

	 	 	 	E-Mail:                        
	 

	 	 	 	Attention:                    
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	 	 	10000 Midlantic Drive
	 

	 	 	 	Suite 200
	 

	 	 	 	Mt. Laurel, New Jersey, 08054
	 

	 	 	 	Fax No.:                      
	 

	 	 	 	E-Mail:                       
	 

	 	 	 	Attention: General Counsel
	 
	 	 	 	 
	 

	 	And to:	 	 
	 
	 	 	 	 
	 

	 	 	 	Peter R. Sprigel, Esq.
	 

	 	 	 	Flaster Greenberg
	 

	 	 	 	Commerce Center, Third Floor
	 

	 	 	 	1810 Chapel Avenue West
	 

	 	 	 	Cherry Hill, New Jersey 08002-4609
	 

	 	 	 	Fax No.: 856-661-1919
	 

	 	 	 	E-Mail: peter.spirgel@flastergreenberg.com

          (l) “Tenant’s North American Industry Classification Number”: 7757;

          (m) “Additional Rent”: All sums of money or charges required
to be paid by Tenant under this Lease other than Fixed Rent, whether or not such
sums or charges are designated as “Additional Rent”.

2

 

          (n) “Rent”: All Annual Fixed Rent, monthly installments of Annual Fixed Rent, Fixed
Rent and Additional Rent payable by Tenant to Landlord under this Lease.

     2. PREMISES.

     Landlord does hereby lease, demise and let unto Tenant and Tenant does hereby hire and
lease from Landlord the Premises for the Term, upon the provisions, conditions and limitations set
forth herein.

     3. TERM.

          (a) The Term of this Lease shall commence (the “Commencement Date”) on the date which is
the earlier of (i) when Tenant, with Landlord’s prior consent, assumes possession of the Premises
for its Permitted Uses, or (ii) upon substantial completion of the improvements required to be made
by Landlord, if any under Article 4, provided that if Tenant elects to perform the
Improvements (defined below) pursuant to the provisions of Article 4 below, in no event shall the
Commencement Date be later than September 1, 2006. The Premises shall be deemed “substantially
completed” when the improvements called for by Article 4 have been completed to the extent
that the Premises may be occupied by Tenant for its Permitted Uses, subject only to completion of
minor finishing, adjustment of equipment, and other minor construction aspects, and Landlord has
procured a temporary or permanent certificate of occupancy permitting the occupancy of the
Premises, if required by law (hereafter, “substantially completed”) The Term shall expire on the
last day of the month which is eighty-four (84) months from the Commencement Date. The
Commencement Date shall be confirmed by Landlord and Tenant by the execution of a Confirmation of
Lease Term in the form attached hereto as Exhibit “B”. If Tenant fails to execute or
object to the Confirmation of Lease Term within ten (10) business days of its delivery, Landlord’s
determination of such dates shall be deemed accepted. On the Commencement Date, Tenant’s existing
lease (the “Existing Lease”) of a portion of the Building (which portion includes a portion of the
Premises) shall be terminated, and Tenant shall have no further obligation to Landlord under the
Existing Lease except for such obligations thereunder which specifically survive the termination of
the Existing Lease. On or before the Commencement Date, Tenant shall vacate the premises demised
under the Existing Lease (other than the portion thereof which constitutes the “Premises”), and
Tenant shall leave such space in the condition required under the Existing Lease. Notwithstanding
anything to the contrary contained in the Existing Lease, if the Commencement Date occurs after
September 1, 2006, Tenant shall be permitted to remain in the premises demised under the Existing
Lease, without regard to any holdover provision under the Existing Lease, on the same terms and
conditions set forth in the Existing Lease, except that the Rent per square foot of space under the
Existing Lease shall be $13.00 per square foot of space demised under the Existing Lease for the
period from and after September 1, 2006 until termination of the Existing Lease pursuant to the
provisions of this Lease.

          (b) Except to the extent that the Tenant elects to perform the Improvements, upon notification
by Landlord, Landlord and Tenant shall schedule a pre-occupancy inspection of the Premises at which
time a punchlist of outstanding items, if any, shall be completed. Within a reasonable time
thereafter, Landlord shall complete the punchlist items to Tenant’s reasonable satisfaction.

          (c) In the event that the Premises are not ready for Tenant’s occupancy, because of any
alterations or construction now or hereafter being carried on either to the Premises or the
Building (unless such alterations are being done by Tenant or Tenant’s contractor, in which case
there shall be no suspension or proration of rental or other sums), or because of any restrictions,
limitations or delays caused by government regulations or governmental agencies, this Lease and the
Term hereof shall not be affected thereby, nor shall Tenant be entitled to make any claim for or
receive any damages whatsoever from Landlord; provided, however, no rent or other sums herein
provided to be paid by Tenant shall become due until the Premises are substantially completed and
deemed by Landlord to be ready for Tenant’s occupancy, and until that time, the rent and other sums
due hereunder shall be suspended.

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     4. CONSTRUCTION .

          (a) Landlord shall construct and do such other work (collectively, the “Improvements”) in
substantial conformity with the plans and outline specifications of the plan prepared by Space
Design dated January 30, 2006, and designated as SK1/1W and SK1/2W attached hereto as Exhibit
“A”. Landlord shall only be responsible for payment of a maximum cost of $696,448.00
(i.e., $16.00 per rentable square foot for the Improvements (the “Tenant Allowance”), all such
costs in excess thereof to be borne by Tenant, and shall be paid to Landlord within ten (10) days
of delivery of an invoice and reasonable documentation therefor. If any material revision or
supplement to Landlord’s Work is deemed necessary by Landlord, those revisions and supplements
shall be submitted to Tenant for approval, which approval shall not be unreasonably withheld or
delayed. If Landlord shall be delayed in such “substantial completion” as a result of (i) Tenant’s
failure to furnish plans and specifications within five (5) days after Landlord’s request
therefore; (ii) Tenant’s request for materials, finishes or installations other than Landlord’s
standard; (iii) Tenant’s changes in said plans; (iv) the performance or completion of any work,
labor or services by a party employed by Tenant, including, but not limited to the installation of
any of Tenant’s furniture, furniture systems, fixtures or equipment; or (v) Tenant’s failure to
approve final plans, working drawings or reflective ceiling plans within five (5) days after
Landlord’s request therefore (each, a “Tenant’s Delay”); then the commencement of the Term of this
Lease and the payment of Fixed Rent hereunder shall be accelerated by the number of days of such
delay . If any change, revision or supplement to the scope of the Landlord’s Work is requested by
Tenant or if Tenant fails to provide information or cooperation required by Landlord in connection
with Landlord’s Work within the time periods required then such occurrence shall not change the
Commencement Date of the Term and shall not alter Tenant’s obligations under this Lease.
Notwithstanding anything to the contrary stated in Section 3(a) above, the Term shall commence on
the date the Premises would have been delivered to Tenant but for Tenant’s Delay. Tenant shall be
solely responsible for all reasonably documented and invoiced expenses which extend the
Commencement Date or increase the costs incurred in connection with a Tenant requested change in
the scope of the Landlord Work in excess of the Tenant Allowance(including the finishes set forth
therein). Landlord’s Work constitutes an Alteration under Article 10. Notwithstanding anything to
the contrary contained herein, if the entire Tenant Allowance is not spent by Tenant on the
Improvements, the balance may be used by Tenant for hard and soft costs incurred by Tenant,
including, without limitation, architectural and project management, for consultants’ fees,
furniture, fixtures and equipment, data and telephone cabling, moving expenses, legal fees and
other costs, fees and expenses associated with the Improvements or Tenant’s occupancy of the
Premises, provided that no less than 85% of the Tenant Allowance shall be used for the
Improvements, and provided further that Landlord shall have no obligation to disburse any portion
of the Tenant Allowance other than that for the Improvements until such time as Landlord or
Tenant, as the case may be, shall have obtained a final certificate of occupancy for the Premises.
Landlord shall select the contractors and subcontractors for the Improvements for the “major trade
areas” through a competitive bidding process in which at least three (3) qualified bids are
requ
ested and reviewed. The Improvements shall be completed on an “open book” basis, and Tenant
shall have the right to audit Landlord’s records to verify the appropriateness of charges for the
Improvements. Landlord shall use its commercially reasonable efforts to coordinate the
construction of the Improvements with the Tenant, the contractor and architect, in a manner which
will cause the least practical interruption with Tenant’s business in the portion of the Premises
currently occupied by Tenant under the Existing Lease. Upon substantial completion of the
Improvements, Landlord shall assign to Tenant, Landlord’s right in any warranties or guaranties of
the Improvements or the systems installed which are a part of the Improvements from any contractor
or manufacturer.

          (b) Tenant and its authorized agents, employees and contractors shall have the right, at
Tenant’s own risk, expense and responsibility, thirty (30) days prior to the Commencement Date to
enter the first floor portion of the Premises for the purpose of installing furniture, fixtures,
and equipment, provided that Tenant, in so doing, the following provisions shall apply:

               (i) Tenant shall first obtain the approval of Landlord of the specific work it proposes to
perform and shall furnish Landlord with reasonably detailed plans and specifications;

               (ii) Such work shall be performed by responsible contractors and subcontractors, approved by
Landlord, which approval shall not be unreasonably withheld or delayed, and such contractors and
subcontractors shall not prejudice Landlord’s relationship with Landlord’s contractors or
subcontractors or the relationship between such contractors and their subcontractors or employees,
or disturb harmonious labor relations.

4

 

Such contractors and subcontractors shall furnish in advance
and maintain in effect workmen’s compensation insurance in accordance with statutory requirements
and comprehensive public liability insurance (naming Tenant and Landlord and Landlord’s contractors
and subcontractors as additional insureds) with limits satisfactory to Landlord;

               (iii) No such work shall be performed in such manner or at such times as to cause any delay in
connection with any work being done by any of the Landlord’s contractors or subcontractors in the
Building;

               (iv) All construction contracts must include language holding the Landlord harmless from and
against any and all claims arising from, under or in connection with such construction; and

               (v) Tenant and its contractors and subcontractors shall be solely responsible for the
transportation, safekeeping and storage of materials and equipment used in the performance of such
work, for the removal of waste and debris resulting therefrom, and for any damage caused by them to
any installations or work performed by Landlord’s contractors and subcontractors.

               (vi) All such work shall be performed in a manner which will cause the least practical
interference with the other tenants of the Building, and Tenant shall cause its contractors to
maintain the Building and the Premises in a neat, clean and orderly manner.

     5. FIXED RENT; SECURITY DEPOSIT.

Tenant shall pay to Landlord without notice or demand, and without set-off, the annual Fixed
Rent payable in the monthly installments of Fixed Rent as set forth in Article 1(e), in
advance on the first day of each calendar month during the Term by (i) check sent to Landlord, P.O.
Box 8538-363, Philadelphia, PA 19171, or (ii) wire transfer of immediately available funds to the
account at Wachovia Bank, Salem NJ account no. 2030000359075 ABA #031201467; such transfer to be
confirmed by Landlord’s accounting department upon written request by Tenant 610-832-4975. All
payments must include the following information: Building #260 and Lease #___. The Lease # will
be provided to Tenant in the Confirmation of Lease Term. Notwithstanding the immediately preceding
sentence, the first full month’s installment and the Security Deposit shall be paid upon the
execution of this Lease by Tenant by two separate checks.

          (a) In the event any Fixed Rent or Additional Rent, charge, fee or other amount due from
Tenant under the terms of this Lease are not paid to Landlord when due, Tenant shall also pay as
Additional Rent a service and handling charge equal to six (6%) percent of the total payment
then due, provided that Landlord shall not impose such late fee the first two (2) times in any
twelve month period in which the Rent is not paid on the date when due. The aforesaid
late fee shall begin to accrue on the initial date of a payment due date, irrespective of
any grace period granted hereunder. This provision shall not prevent Landlord from exercising
any other remedy herein provided or otherwise available at law or in equity in the event of any
default by Tenant.

          (b) Tenant shall be required to pay a Security Deposit of $0.00 under this Lease (the
“Collateral”), as security for the prompt, full and faithful performance by Tenant of each and
every provision of this Lease and of all obligations of Tenant hereunder. No interest shall
be paid to Tenant on the Collateral, and Landlord shall have the right to commingle the
Collateral with other Security Deposits held by Landlord. If Tenant fails to perform any of its
obligations hereunder, Landlord may use, apply or retain the whole or any part of the Collateral
for the payment of (i) any rent or other sums of money which Tenant may not have paid when due,
(ii) any sum expended by Landlord on Tenant’s behalf in accordance with the provisions of this
Lease, and/or (iii) any sum which Landlord may expend or be required to expend by reason of
Tenant’s default, including, without limitation, any damage or deficiency in or from the
reletting of the Premises as provided in this Lease. The use, application or retention of the
Collateral, or any portion thereof, by Landlord shall not prevent Landlord from exercising any
other right or remedy provided by this Lease or by law (it being intended that Landlord shall
not first be required to proceed against the

5

 

Collateral) and shall not operate as either
liquidated damages or as a limitation on any recovery to which Landlord may otherwise be
entitled. If any portion of the Collateral is used, applied or retained by Landlord for the
purposes set forth above, Tenant agrees, within ten (10) days after the written demand therefor
is made by Landlord, to deposit cash with the Landlord in an amount sufficient to restore the
Collateral to its original amount. In addition to the foregoing, if Tenant defaults
(irrespective of the fact that Tenant cured such default) more than once in its performance of a
monetary obligation and such monetary defaults aggregate in excess of $20,000 under this Lease,
Landlord may require Tenant to increase the Collateral to the greater of twice the (i) Fixed
Rent paid monthly, or (ii) the initial amount of the Collateral.

          If Tenant shall fully and faithfully comply with all of the provisions of this Lease, the
Collateral, or any balance thereof, shall be returned to Tenant without interest after the
expiration of the Term or upon any later date after which Tenant has vacated the Premises. In the
absence of evidence satisfactory to Landlord of any permitted assignment of the right to receive
the Collateral, Landlord may return the same to the original Tenant, regardless of one or more
assignments of Tenant’s interest in this Lease or the Collateral. Upon the return of the
Collateral, or the remaining balance thereof, to the original Tenant or any successor to the
original Tenant, Landlord shall be completely relieved of liability with respect to the Collateral.

          In the event of a transfer of the Project or the Building, Landlord shall have the right to
transfer the Collateral to the vendee or lessee and Landlord shall thereupon be released by Tenant
from all liability for the return of such Collateral. Upon the assumption of such Collateral by
the transferee, Tenant agrees to look solely to the new landlord for the return of said Collateral,
and the provisions hereof apply to every transfer or assignment made of the Collateral to a new
landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or
encumber the Collateral and that neither Landlord nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance. The Collateral
shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior
written consent of Landlord.

     6. ADDITIONAL RENT.

          (a) Commencing on the Commencement Date, and in each calendar year thereafter during the Term
(as same may be extended), Tenant shall pay to Landlord Tenant’s Allocated Share of the following
charges (“Recognized Expenses”), without deduction or set off.

               (i) Operating Expenses. All costs and expenses related to the Project incurred
by Landlord, including, but not limited to:

                    (a) All costs and expenses related to the operation of the Building and Project, including,
but not limited to, lighting, cleaning the Building exterior and common areas of the Building
interior, trash removal and recycling, repairs and maintenance of the roof and storm water
management system, policing and regulating traffic to and from the Project, fire suppression and
alarm systems, concierge services for the Project, utilities, removing snow, ice and debris and
maintaining all landscape areas, (including replacing and replanting flowers, shrubbery and trees),
maintaining and repairing all other exterior improvements on the Project, all repairs and
compliance costs necessitated by laws enacted or which become effective after the date hereof
(including, without limitation, any additional regulations or requirements enacted after the date
hereof regarding the Americans With Disabilities Act (as such applies to the Project or common
areas but not to any individual tenant’s space), if applicable) required of Landlord under
applicable laws and rules and regulations.

                    (b) All costs and expenses incurred by Landlord for environmental testing, sampling or
monitoring required by statute, regulation or order of governmental authority, except any costs or
expenses incurred in conjunction with the spilling or depositing of any hazardous substance for
which any person or other tenant is legally liable and Landlord is reimbursed for by such other
person.

                    (c) Any other expense or charge (including reasonably allocated general and administrative
charges) which would typically be considered an expense of maintaining, operating or repairing the
Project under generally accepted accounting principles.

6

 

                    (d) Management fee not to exceed five (5%) percent of Rent. It is expressly understood that
legal fees incurred in an action against an individual tenant shall not be deemed
includable as an operating expense pursuant to this provision.

                    (e) Capital expenditures and capital repairs and replacements shall be included as operating
expenses but only to the extent that same are incurred to reduce Operating Expenses or to comply
with laws enacted after the date of this Lease, solely to the extent of the amortized
costs of same over the useful life of the improvement in accordance with generally accepted
accounting principles such useful life not to exceed five (5) years.

                    (f) All insurance premiums paid or payable by Landlord for insurance with respect to the
Project as follows: (a) fire and extended coverage insurance (including demolition and debris
removal); (b) insurance against Tenant defaults, Landlord’s rental loss or abatement (but not
including business interruption coverage on behalf of Tenant), from damage or destruction from
environmental hazards, fire or other casualty; (c) Landlord’s commercial general liability
insurance (including bodily injury and property damage) and boiler insurance; and (d) such other
insurance as Landlord or any reputable mortgage lending institution holding a mortgage on the
Premises may require. If the coverage period of any of such insurance obtained by Landlord
commences before or extends beyond the Term, the premium therefore shall be prorated to the Term.
Should Tenant’s occupancy or use of the Premises at any time change and thereby cause an increase
in such insurance premiums on the Premises, Building and/or Project, Tenant shall pay to Landlord
the entire amount of such reasonably documented increase.

               Notwithstanding the foregoing, the term “Operating Expenses” shall not include any of
the following:

                    (a) Repairs or other work occasioned by fire, windstorm or other insured casualty or by the
exercise of the right of eminent domain to the extent of insurance proceeds or condemnation awards
received therefor;

                    (b) Leasing commissions, accountants’, consultants’, auditors or attorneys’ fees, costs and
disbursements and other expenses incurred in connection with negotiations or disputes with other
tenants or prospective tenants or other occupants, or associated with the enforcement of any other
leases or the defense of Landlord’s title to or interest in the real property or any part thereof;

                    (c) Costs incurred by Landlord in connection with construction of the Building and related
facilities, the correction of latent defects in construction of the Building or the discharge of
Landlord’s Work;

                    (d) Costs (including permit, licenses and inspection fees) incurred in renovating or otherwise
improving or decorating, painting, or redecorating the Building or space for other tenants or other
occupants or vacant space;

                    (e) Depreciation and amortization;

                    (f) Costs incurred due to a breach by Landlord or any other tenant of the terms and conditions
of any lease;

                    (g) Overhead and profit increment paid to subsidiaries or affiliates of Landlord for
management or other services on or to the Building or for supplies, utilities or other materials,
to the extent that the costs of such services, supplies, utilities or materials exceed the
reasonable costs that would have been paid had

7

 

the services, supplies or materials been provided by
unaffiliated parties on a reasonable basis without taking into effect volume discounts or rebates
offered to Landlord as a portfolio purchaser;

                    (h) Interest on debt or amortization payments on any mortgage or deeds of trust or any other
borrowings and any ground rent;

                    (i) Ground rents or rentals payable by Landlord pursuant to any over-lease;

                    (j) Any compensation paid to clerks, attendants or other persons in commercial concessions
operated by Landlord;

                    (k) Expenses resulting from the gross negligence or willful misconduct of Landlord;

                    (l) Any fines or fees for Landlord’s failure to comply with governmental, quasi-governmental,
or regulatory agencies’ rules and regulations;

                    (m) Legal, accounting and other expenses related to Landlord’s financing, re-financing,
mortgaging or selling the Building or the Project;

                    (n) Taxes, except as set forth below;

                    (o) Costs for sculpture, decorations, painting or other objects of art in excess of amounts
typically spent for such items in office buildings of comparable quality in the competitive area of
the Building;

                    (p) Cost of any political, charitable or civic contribution or donation; and

                    (q) Costs that are capital in nature except as provided in subsection 6(a)(i)(e) hereof.

               (ii) Taxes. Taxes shall be defined as all taxes, assessments and other
governmental charges (“Taxes”), including special assessments for public improvements or traffic
districts which are levied or assessed against the Project during the Term or, if levied or
assessed prior to the Term, which properly are allocable to the Term, and real estate tax appeal
expenditures incurred by Landlord to the extent of any reduction resulting thereby. Nothing herein
contained shall be construed to include as Taxes: (A) any inheritance, estate, succession,
transfer, gift, franchise, corporation, net income or profit tax or capital levy that is or may be
imposed upon Landlord or (B) any transfer tax or recording charge resulting from a transfer of the
Building or the Project; provided, however, that if at any time during the Term the method of
taxation prevailing at the commencement of the Term shall be altered so that in lieu of or as a
substitute for the whole or any part of the taxes now levied, assessed or imposed on real estate as
such there shall be levied, assessed or imposed (i) a tax on the rents received from such real
estate, or (ii) a license fee measured by the rents receivable by Landlord from the Premises or any
portion thereof, or (iii) a tax or license fee imposed upon Premises or any portion thereof, then
the same shall be included in the computation of Taxes hereunder.

          (b) Tenant shall pay, in monthly installments in advance, on account of Tenant’s Allocated
Share of Operating Expenses and Taxes, the estimated amount of such Recognized Expenses and Taxes
for such year as determined by Landlord in its reasonable discretion and as set forth in a notice
to Tenant, such notice to include the basis for such calculation. Prior to the end of the calendar
year in which the Lease commences and thereafter for each successive calendar year (each, a “Lease
Year”), or part thereof, Landlord shall send to Tenant a statement of projected increases in
Recognized Expenses and Taxes and shall indicate what Tenant’s projected share of Recognized
Expenses and Taxes shall be. Said amount shall be paid in equal monthly installments in advance by
Tenant as Additional Rent commencing January 1 of the applicable Lease Year.

8

 

               Tenant shall have the right, at its sole cost and expense, within sixty (60) days from
receipt of Landlord’s statement of Recognized Expenses, to audit or have its appointed accountant
audit Landlord’s records related to Recognized Expenses and Taxes provided that any such audit may
not occur more frequently than once each calendar year nor apply to any year prior to the year of
the statement being reviewed. In the event Tenant’s audit discloses any discrepancy, Landlord and
Tenant shall use their best efforts to resolve the dispute and make an appropriate adjustment,
failing which, they shall submit any such dispute to arbitration pursuant to the rules and under
the jurisdiction of the American Arbitration Association in Burlington County, New Jersey. The
decision rendered in such arbitration shall be final, binding and non-appealable. The expenses of
arbitration, other than individual legal and accounting expenses which shall be the respective
parties’ responsibility, shall be divided equally between the parties. In the event, by agreement
or as a result of an arbitration decision, it is determined that the actual Recognized Expenses and
Taxes exceeded those claimed by the Landlord by more than ten percent (10), the actual, reasonable
hourly costs to Tenant of Tenant’s audit (including legal and accounting costs) shall be reimbursed
by Landlord. In the event Tenant utilizes a contingent fee auditor and Landlord is responsible for
the payment of such auditor, Landlord shall only pay the reasonable hourly fee of such auditor.

          (c) If during the course of any Lease Year, Landlord shall have reason to believe that the
Operating Expenses and Taxes shall be different than that upon which the aforesaid projections were
originally based, then Landlord, one time in any calendar year, shall be entitled to adjust the
amount by reallocating the remaining payments for such year, for the months of the Lease Year which
remain for the revised projections, and to advise Tenant of an adjustment in future monthly amounts
to the end result that the Operating Expenses and Taxes shall be collected on a reasonably current
basis each Lease Year.

          (d) In calculating the Recognized Expenses as hereinbefore described, if for thirty (30)
or more days during the preceding Lease Year less than ninety-five (95%) percent of the rentable
area of the Building shall have been occupied by tenants, then the Recognized Expenses
attributable to the Property shall be deemed for such Lease Year to be amounts equal to the
Recognized Expenses which would normally be expected to be incurred had such occupancy of the
Building been at least ninety-five (95%) percent throughout such year, as reasonably determined by
Landlord (i.e., taking into account that certain expenses depend on occupancy (e.g., janitorial)
and certain expenses do not (e.g., landscaping)). Furthermore, if Landlord shall not
furnish any item or items of Recognized Expenses to any portions of the Building because such
portions are not occupied or because such item is not required by the tenant of such portion of the
Building, for the purposes of computing Recognized Expenses, an equitable adjustment shall be made
so that the item of Operating Expense in question shall be shared only by tenants actually
receiving the benefits thereof.

          (e) By April 30th of each Lease Year or as soon thereafter as administratively
available, Landlord shall send to Tenant a statement of actual expenses incurred for Recognized
Expenses and Taxes for the prior Lease Year showing the Allocated Share due from Tenant. Landlord
shall use its reasonable efforts to provide Tenant with the aforesaid statements on or before April
30 of each Lease Year; provided, however, if Landlord is unable to provide such statements by April
30, Landlord shall not have been deemed to waive its right to collect any such amounts as
Additional Rent. In the event the amount prepaid by Tenant exceeds the amount that was actually
due then Landlord shall issue a credit to Tenant in an amount equal to the over charge, which
credit Tenant may apply to future payments on account of Recognized Expenses and Taxes until Tenant
has been fully credited with the over charge. If the credit due to Tenant is more than the
aggregate total of future rental payments, Landlord shall pay to Tenant the difference between the
credit in such aggregate total. In the event Landlord has undercharged Tenant, then Landlord shall
send Tenant an invoice with the additional amount due, which amount shall be paid in full by Tenant
within twenty (20) days of receipt.

          (f) Each of the Operating Expenses and Tax amounts, whether requiring lump sum payment or
constituting projected monthly amounts added to the Fixed Rent, shall for all purposes be treated
and considered as Additional Rent and the failure of Tenant to pay the same as and when due in
advance and without demand shall have the same effect as failure to pay any installment of the
Fixed Rent and shall afford Landlord all the remedies in the Lease therefor as well as at law or in
equity. All Operating Expenses shall be charged at standard rates from the

9

 

applicable service
provider, without reduction on account of volume discounts or preferred vendor rates applicable to
Landlords.

          (g) If this Lease terminates other than at the end of a calendar year, Landlord’s annual
estimate of Recognized Expenses and Taxes shall be accepted by the parties as the actual Recognized
Expenses and Taxes for the year the Lease ends until Landlord provides Tenant with actual
statements in accordance with subsection 6(e) above.

     7. ELECTRICITY CHARGES.

          Landlord shall not be liable for any interruption any utility service for any reason
unless caused by the gross negligence or willful misconduct of Landlord. Notwithstanding the
preceding sentence in this Section 7 to the contrary, (i) if any interruption of electric or any
other utility services, however caused, shall continue for more than five (5) consecutive business
days or ten (10) business days within any twelve (12) month period, and such interruption
substantially affects Tenant’s ability to use and occupy the Premises for its Permitted Use, Rent
shall be equitably abated based upon the portion of the Premises which is rendered uninhabitable as
a result of such interruption (but not in an aggregate amount in excess of the aggregate amount of
proceeds Landlord receives under its “loss of rents” policy) until such electric or other utility
services are restored. Tenant shall pay to Landlord, as Additional Rent, all charges incurred by
Landlord for electricity, such charges to be based upon Tenant’s Share. Tenant shall pay to
Landlord as
Additional Rent Landlord’s monthly estimate of Tenants Share of electricity charges in the same
manner, and pursuant to the same process as Tenant is required to pay the monthly estimates of
Recognized Expenses pursuant to Article 6 above. The aforesaid electricity charges shall commence
upon occupancy by Tenant of the Premises. Landlord, during the hours of 8:00 A.M. to 6:00 P.M. on
weekdays and on Saturdays from 8:00 A.M. to 1:00 P.M. (“Working Hours”), excluding legal holidays,
shall furnish the Premises with heat and air-conditioning in the respective seasons, and provide
the Premises with electricity for lighting and usual office equipment. At any hours other than the
aforementioned, such services will be provided at Tenant’s expense at $65.00 per hour.
Notwithstanding anything herein to the contrary, if Landlord reasonably determines that Tenant’s
use of electricity is excessive, Tenant agrees to pay for the installation of a separate electric
meter to measure electrical usage in excess of normal office use and to pay Landlord for all such
excess electricity registered in such submeter.

     8. SIGNS; USE OF PREMISES AND COMMON AREAS.

          (a) As part of Tenant fit-out cost, Landlord shall provide Tenant with standard identification
signage on all Building directories and at the entrance to the Premises. Tenant, at its expense
may place its name and logo on the glass at the entrance of the portion of the Premises on the
first floor of the Building. Landlord shall use its commercially reasonable efforts to obtain
required governmental approvals to allow Tenant to install a facade sign bearing Tenant’s name on
the west wing of the Building of a size similar to ARI (the “Facade Sign”), and upon receipt of
such approval and Landlord’s consent as to the content, size and location of same, Tenant shall
have the right, at Tenant’s expense, to install the Facade Sign on the west wing of the Building.
If Landlord does not obtain the required governmental approvals for the Facade Sign, Landlord
shall use its commercially reasonable efforts to obtain the required governmental approvals to
install the names of two tenants on the existing monument sign located at the Building (the
“Monument Sign”). Upon receipt of the governmental approvals for the Monument Sign, Tenant shall
have the exclusive right, at Tenant’s expense, and subject to Landlord’s consent as to the content,
size and location of same, to have Tenant’s name placed on the Monument Sign, provided that if
Landlord receives a written request from ARI or a replacement tenant of the Building leasing space
of a square footage which is equal or greater than that leased to ARI, Landlord shall have the
right to install the name and logo of ARI or such replacement tenant on the Monument Sign. No
other signs shall be placed, erected or maintained by Tenant at any place upon the Premises,
Building or Project.

          (b) Tenant may use and occupy the Premises only for the express and limited purposes
stated in Article 1(i) above; and the Premises shall not be used or occupied, in whole or
in part, for any other purpose without the prior written consent of Landlord; provided that
Tenant’s right to so use and occupy the Premises shall remain

10

 

expressly subject to the provisions
of “Governmental Regulations”, Article 27 herein. No machinery or equipment shall be
permitted that shall cause vibration, noise or disturbance beyond the Premises. Tenant, without
Landlord’s consent or direction, shall not “vacate” the Premises at any time during the Term, nor
permit the Premises to remain unoccupied. “Vacate” shall be defined as Tenant’s ceasing to use the
Premises for its Permitted Use or the removal of substantially all of its furniture and equipment
and personal property from the Premises.

          (c) Tenant shall not overload any floor or part thereof in the Premises or the Building,
including any public corridors or elevators therein, bringing in, placing, storing, installing or
removing any large or heavy articles, and Landlord may prohibit, or may direct and control the
location and size of, safes and all other heavy articles, and may require, at Tenant’s sole cost
and expense, supplementary supports of such material and dimensions as Landlord may deem necessary
to properly distribute the weight.

          (d) Tenant shall not install in or for the Premises, without Landlord’s prior written
approval, any equipment which requires more electric current than Landlord is required to provide
under this Lease, and Tenant shall ascertain from Landlord the maximum amount of load or demand for
or use of electrical current which can safely be permitted in and for the Premises, taking into
account the capacity of electric wiring in the Building and the Premises and the needs of Building
common areas (interior and exterior) and the requirements of other tenants of the Building,
Tenant and shall not in any event connect a greater load than such safe capacity.

          (e) Tenant shall not commit or suffer any waste upon the Premises, Building or Project or
any nuisance, or do any other act or thing which may disturb the quiet enjoyment of any other
tenant in the Building or Project.

          (f) Tenant shall have the right, non-exclusive and in common with others, to use the exterior
paved driveways and walkways of the Building for vehicular and pedestrian access to the Building.
Tenant shall also have the right, in common with other tenants of the Building and Landlord, to use
not less than 183 of the designated parking areas of the Project for the parking of automobiles of
Tenant and its employees and business visitors, incident to Tenant’s permitted use of the Premises;
provided that Landlord shall have the right to restrict or limit Tenant’s utilization of the
parking areas in the event the same become overburdened and in such case to equitably allocate on
proportionate basis or assign parking spaces among Tenant and the other tenants of the Building.

     9. ENVIRONMENTAL MATTERS.

          (a) Hazardous Substances.

               (i) Tenant shall not, except as provided in subparagraph (ii) below, bring or otherwise cause
to be brought or permit any of its agents, employees, contractors or invitees to bring in, on or
about any part of the Premises, Building or Project, any hazardous substance or hazardous waste in
violation of law, as such terms are or may be defined in (x) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., as the same may
from time to time be amended, and the regulations promulgated pursuant thereto (“CERCLA”); the
United States Department of Transportation Hazardous Materials Table (49 CFR 172.102); by the
Environmental Protection Agency as hazardous substances (40 CFR Part 302); the Clean Air Act; and
the Clean Water Act, and all amendments, modifications or supplements thereto; (y) the Industrial
Site Recovery Act, formerly known as the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6
et seq., as the same may from time to time be amended, and the regulations promulgated pursuant
thereto (“ISRA”); and/or (z) any other rule, regulation, ordinance, statute or requirements of any
governmental or administrative agency regarding the environment (collectively, (x) and (y) shall be
referred to as an “Applicable Environmental Law”).

               (ii) Tenant may bring to and use at the Premises, hazardous substances incidental to its
normal business operations under the NAI Code referenced in paragraph 1(l) above in solely de
minimis

11

 

quantities and strictly in accordance with all Applicable Environmental Law. Tenant shall
store and handle such substances in strict accordance with all Applicable Environmental Law.

          (b) NAI Numbers.

               (i) Tenant represents and warrants that Tenant’s NAI number as designated in the North
American Industry Classification System Manual prepared by the Office of Management and Budget, and
as set forth in Article 1(l) hereof, is correct. Tenant represents that the specific
activities intended to be carried on in the Premises are in accordance with Article 1(i)
and Tenant covenants and agrees that it will not do or suffer anything which will cause its NAI
number (or that of any assignee or subtenant) to fall within any of the following “major group”
classifications of NAI numbers during the Term (and any exercised renewal term) hereof: 22 through
39 inclusive, 46 through 49 inclusive, 51 and 76 or as set forth on Appendix C to ISRA (together
the “Covered Numbers”). Tenant further covenants and agrees to notify Landlord at least thirty
(30) days prior to any change of facts which would result in the change of Tenant’s NAI number form
its present number to any of the covered Numbers. Upon such notice, Landlord shall
have the right, at its option, to terminate this Lease within thirty (30) days of receipt of
such notice by notifying Tenant in writing.

               (ii) Tenant shall not engage in operations at the Premises which involve the generation,
manufacture, refining, transportation, treatment, storage, handling or disposal of “hazardous
substances” or “hazardous waste” as such terms are defined under any Applicable Environmental Law.
Tenant further covenants that it will not cause or permit to exist any “discharge” (as such term is
defined under Applicable Environmental Laws) on or about the Premises.

               (iii) (A) If Tenant’s operations at the Premises now or hereafter constitute an “Industrial
Establishment” subject to the requirements of ISRA, then prior to: (1) closing operations or
transferring ownership or operations of Tenant at the Premises (as defined under ISRA), (2) the
expiration or sooner termination of this lease, or (3) any assignment of this Lease or any
subletting of any portion of the Premises; Tenant shall, at its expense, comply with all
requirements of ISRA pertaining thereto. Without limitation of the foregoing, Tenant’s obligations
shall include (i) the proper filing of an initial notice under N.J.S.A. 13:1K-9(a) to the
NJDEP and (ii) the performance of all remediation and other requirements of ISRA, including without
limitation all requirements of N.J.S.A. 13:1K-9(b) through and including (l).

                    (B) In addition, upon written request of Landlord, Tenant shall cooperate with Landlord in
obtaining Applicable Environmental Laws approval of any transfer of the Building. Specifically in
that regard, Tenant agrees that it shall (1) execute and deliver all affidavits, reports, responses
to questions, applications or other filings required by Landlord and related to Tenant’s activities
at the Premises, (2) allow inspections and testing of the Premises during normal business hours,
and (3) as respects the Premises, perform any requirement reasonably requested by Landlord
necessary for the receipt of approvals under Applicable Environmental Law, provided the foregoing
shall be at no out-of-pocket cost or expense to Tenant except for clean-up and remediation costs
arising from Tenant’s violation of this Article 9.

               (iv) The parties acknowledge and agree that, except as provided in subparagraph (iii)(B)
above, pursuant to the provisions of Section 20(c) of ISRA, Tenant shall be, and is hereby,
designated the party responsible (the “Party Responsible”) to comply with the requirements of ISRA
(P.L. 1983, c.330) with respect to the Premises, and that as a result, the NJDEP may compel Tenant
to so comply. In addition, any failure of Tenant to provide any information and submission as
required under Section 20(a) and Section 20(c) of ISRA shall constitute a default under this Lease.
Any assignee or subtenant of Tenant shall be deemed to have, and by entering into such assignment
or sublease, and/or by entering into possession of the Premises, does hereby, acknowledge that they
shall be the Party Responsible, jointly and severally with Tenant, under the provisions of this
Lease.

               (v) In the event that Tenant is not obligated to comply with Article 9(b)(iii) for any reason,
including without limitation inapplicability of ISRA to Tenant, then prior to the expiration or
sooner

12

 

termination of this Lease or any subletting of any portion of the Premises, Tenant shall, at
Tenant’s expense, and at Landlord’s option:

                    (A) Obtain from the NJDEP a “non-applicability letter” confirming that the proposed
termination, assignment or subletting shall not be subject to the requirements of ISRA. Any
representation or certification made by Tenant in connection with the non-applicability letter
request shall constitute a representation and warranty by Tenant in favor of
Landlord and any misrepresentation or breach of warranty contained in Tenant’s request shall
constitute a default under this Lease; provided, however, if a non-applicability letter is not
issued due to factors relating solely to the Building or parties other than Tenant, then Tenant
shall be deemed to have complied with this provision.

                    (B) If reasonably indicated by a reputable environmental consultant engaged by Landlord, at
Landlord’s expense, Tenant shall remove “hazardous waste” or “hazardous waste” attributable to
Tenant’s occupancy at the Premises in a manner which complies with NJDEP requirements under ISRA,
at Tenant’s expense, as if ISRA applied to Tenant and/or the Premises.

               (vi) In the event Tenant is obligated, under this Article or otherwise, to perform and/or
cooperate in performing any ISRA obligations and/or obtain and/or cooperate in obtaining any ISRA
approval, by way of a non-applicability letter, “negative declaration”, the performance of an
approved remedial action work plan, the obtaining of a no further action letter, the performance
under a remediation agreement and/or otherwise (collectively the “ISRA Obligations”) and, prior to
fully performing such ISRA Obligations, there occurs the scheduled expiration of the Term of this
Lease or any other termination of this Lease (collectively, a “Lease Termination”), and in the
event (i) Landlord is obligated to deliver possession to a new tenant and (ii) Landlord is
prevented from being able to deliver lawful possession because of such failure of Tenant to fully
perform same, then Tenant shall, following such Lease Termination, pay, at the time and in the
manner Fixed Rent payments were due during the term, an amount equal to: (i) Fixed Rent at twice
the rate in effect immediately prior to such Lease Termination; and (ii) Additional Rent as
provided under the Lease until such time as all such ISRA Obligations have been fully completed.

          (c) Additional Terms. In the event of Tenant’s failure to comply in full with this
Article, Landlord may, after written notice to Tenant and Tenant’s failure to cure within thirty
(30) days of its receipt of such notice, at Landlord’s option, perform any and all of Tenant’s
obligations as aforesaid and all costs and expenses incurred by Landlord in the exercise of this
right shall be deemed to be Additional Rent payable on demand and with interest at the Default
Rate. The parties acknowledge and agree that Tenant shall not be held responsible for any
environmental issue at the Premises unless such issue was caused by an action or omission of Tenant
or its agents, employees, consultants or invitees. This Article 9 shall survive the expiration or
sooner termination of this Lease.

     10. TENANT’S ALTERATIONS.

          Tenant will not cut or drill into or secure any fixture, apparatus or equipment or make
alterations, improvements or physical additions (collectively, “Alterations”) of any kind to any
part of the Premises without first obtaining the written consent of Landlord, such consent not to
be unreasonably withheld. Alterations shall, at Landlord’s option, be done by Landlord at Tenant’s
sole cost and expense. Landlord’s consent shall not be required for (i) the installation of any
office equipment or fixtures including internal partitions which do not require disturbance of any
structural elements or systems (other than attachment thereto) within the Building or (ii) minor
work, including decorations, which does not require disturbance of any structural elements or
systems (other than attachment thereto) within the Building and which costs in the aggregate less
than $50,000. If no approval is required or if Landlord approves Tenant’s Alterations and agrees
to permit Tenant’s contractors to do the work, Tenant, prior to the commencement of labor or supply
of any materials, must furnish to Landlord (i) a duplicate or original policy or certificates of
insurance evidencing (a) general public liability insurance for personal injury and property damage
in the minimum amount of $1,000,000.00 combined single limit, (b) statutory workman’s compensation
insurance, and (c) employer’s liability insurance from each contractor to be employed (all such
policies shall be non-cancelable without thirty (30) days prior written notice to Landlord and
shall be in amounts and with

13

 

companies satisfactory to Landlord); (ii) construction documents
prepared and sealed by a registered New Jersey architect if such alteration causes the aggregate of
all Alterations to be in excess of $50,000; (iii) all applicable building permits required by law;
and (iv) an executed, effective Waiver of Mechanics Liens from such contractors and all
sub-contractors in states allowing for such waivers or the cost of such alteration must be bonded
by Tenant. In connection with all Alterations involving Landlord’s approval, Landlord shall be
entitled to collect a construction management fee equal to 3% of the cost of the Alteration in
connection with Landlord’s services in supervising and review of such Alternations. Any approval
by Landlord permitting Tenant to do any or cause any work to be done in or about the Premises shall
be and hereby is conditioned upon Tenant’s work being performed by workmen and mechanics working in
harmony and not interfering with labor employed by Landlord, Landlord’s mechanics or their
contractors or by any other tenant or their contractors. If at any time any of the workmen or
mechanics performing any of Tenant’s work shall be unable to work in harmony or shall interfere
with any labor employed by Landlord, other tenants or their respective mechanics and contractors,
then the permission granted by Landlord to Tenant permitting Tenant to do or cause any work to be
done in or about the Premises, may be withdrawn by Landlord upon forty-eight (48) hours written
notice to Tenant.

     All Alterations (whether temporary or permanent in character) made in or upon the Premises,
either by Landlord or Tenant, shall be Landlord’s property upon installation and shall remain on
the Premises without compensation to Tenant unless Landlord provides written notice to Tenant to
remove same at the expiration of the Lease, in which event Tenant shall promptly remove such
Alterations and restore the Premises to good order and condition. All furniture, movable trade
fixtures and equipment (including telephone, security and communication equipment system wiring and
cabling) installed by Landlord at Tenant’s request, Tenant, its assignees and sublessees shall be
removed by Tenant at the termination of this Lease. All such installations, removals and
restoration shall be accomplished in a good and workmanlike manner so as not to damage the Premises
or Building and in such manner so as not to disturb other tenants in the Building. If Tenant fails
to remove any items required to be removed pursuant to this Article, Landlord may do so and the
reasonable costs and expenses thereof shall be deemed Additional Rent hereunder and shall be
reimbursed by Tenant to Landlord within fifteen (15) business days of Tenant’s receipt of an
invoice therefor from Landlord.

     11. CONSTRUCTION LIENS.

          (a) Tenant will not suffer or permit any contractor’s, subcontractor’s or supplier’s lien (a
“Construction Lien”) to be filed against the Premises or any part thereof by reason of work, labor
services or materials supplied or claimed to have been supplied to Tenant; and if any Construction
Lien shall at any time be filed against the Premises or any part thereof, Tenant, within ten (10)
days after notice of the filing thereof, shall cause it to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shall fail to
cause such Construction Lien to be discharged within the period aforesaid, then in addition to any
other right or remedy, Landlord may, but shall not be obligated to, discharge it either by paying
the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding
proceedings. Any amount so paid by Landlord, plus all of Landlord’s costs and expenses associated
therewith (including, without limitation, reasonable legal fees), shall constitute Additional Rent
payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand with interest
from the date of advance by Landlord at the Default Rate.

          (b) Nothing in this Lease, or in any consent to the making of alterations or improvements
shall be deemed or construed in any way as constituting authorization by Landlord for the making of
any alterations or additions by Tenant within the meaning of Section 3 of the
Construction Lien Law (P.L. 1993, c. 318) or any amendment thereof, or constituting a request
by Landlord, express or implied, to any contractor, subcontractor or supplier for the performance
of any labor or the furnishing of any materials for the use or benefit of Landlord.

     12. ASSIGNMENT AND SUBLETTING.

          (a) Subject to the remaining subsections of Article 12, except as expressly
permitted pursuant to this section, Tenant shall not, without the prior written consent of
Landlord, such consent not to be unreasonably

14

 

withheld, assign, transfer or hypothecate this Lease
or any interest herein or sublet the Premises or any part thereof. Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord, terminate this Lease.
Subject to subparagraph 12(i) below, this Lease shall not, nor shall any interest herein, be
assignable as to the interest of Tenant by operation of law or by merger, consolidation or asset
sale, without the written consent of Landlord.

          (b) If at any time or from time to time during the term of this Lease Tenant desires to assign
this Lease or sublet all or any part of the Premises, Tenant shall give notice to Landlord of such
desire, including the name, address and contact party for the proposed assignee or subtenant, a
description of such party’s business history, the effective date of the proposed assignment or
sublease (including the proposed occupancy date by the proposed assignee or sublessee), and in the
instance of a proposed sublease, the square footage to be subleased, a floor plan professionally
drawn to scale depicting the proposed sublease area, and a statement of the duration of the
proposed sublease (which shall in any and all events expire by its terms prior to the scheduled
expiration of this Lease, and immediately upon the sooner termination hereof). Landlord may, at
its option, and in its sole and absolute discretion, exercisable by notice given to Tenant within
forty-five (45) days next following Landlord’s receipt of Tenant’s notice (which notice from Tenant
shall, as a condition of its effectiveness, include all of the above-enumerated information), elect
to recapture the Premises if Tenant is proposing to sublet or assign the Premises or such portion
as is proposed by Tenant to be sublet (and in each case, the designated and non-designated parking
spaces included in this demise, or a pro-rata portion thereof in the instance of the recapture of
less than all of the Premises), and terminate this Lease with respect to the space being
recaptured. Notwithstanding the foregoing, Landlord shall not have the right to recapture on
subleases of the Premises to Tenant’s Affiliate (defined below).

          (c) If Landlord elects to recapture the Premises or a portion thereof as aforesaid, then from
and after the effective date thereof as approved by Landlord, after Tenant shall have fully
performed such obligations as are enumerated herein to be performed by Tenant in connection with
such recapture, and except as to obligations and liabilities accrued and unperformed (and any other
obligations expressly stated in this Lease to survive the expiration or sooner termination of this
Lease), Tenant shall be released of and from all lease obligations thereafter otherwise accruing
with respect to the Premises (or such lesser portion as shall have been recaptured by Landlord).
The Premises, or such portion thereof as Landlord shall have elected to recapture, shall be
delivered by Tenant to Landlord free and clear of all furniture, furnishings, personal property and
removable fixtures, with Tenant repairing and restoring any and all damage to the Premises
resulting from the installation, handling or removal thereof, and otherwise in the same condition
as Tenant is, by the terms of this Lease, required to redeliver the Premises to Landlord upon the
expiration or sooner termination of this Lease. In the event of a sublease of less than all of the
Premises, the cost of erecting any required demising walls, entrances and entrance corridors, and
any other or further improvements required in connection therewith, including without limitation,
modifications to HVAC, electrical, plumbing, fire, life safety and security systems (if any),
painting, wallpapering
and other finish items as may be acceptable to or specified by Landlord shall be shared 50% by
Tenant and 50% by Landlord. All of the foregoing improvements shall be made in accordance with
applicable legal requirements and Landlord’s then-standard base building specifications and shall
be performed by Landlord’s contractors. Upon the completion of any recapture and termination as
provided herein, Tenant’s Fixed Rent, Recognized Expenses and other monetary obligations hereunder
shall be adjusted pro-rated based upon the reduced rentable square footage then comprising the
Premises.

          (d) If Landlord provides written notification to Tenant electing not to recapture the Premises
(or so much thereof as Tenant had proposed to sublease), then Tenant may proceed to market the
designated space and may complete such transaction and execute an assignment of this Lease or a
sublease agreement (in each case in form acceptable to Landlord) within a period of five (5) months
next following Landlord’s notice to Tenant that it declines to recapture such space, provided that
Tenant shall have first obtained in any such case the prior written consent of Landlord to such
transaction, which consent shall not be unreasonably withheld. If, however, Tenant shall not have
assigned this Lease or sublet the Premises with Landlord’s prior written consent as aforesaid
within five (5) months next following Landlord’s notice to Tenant that Landlord declines to
recapture the Premises (or such portion thereof as Tenant initially sought to sublease), then in
such event, Tenant shall again be required to request Landlord’s consent to the proposed
transaction, whereupon Landlord’s right to recapture the Premises (or such portion as Tenant shall
desire to sublease) shall be renewed upon the same terms and as otherwise provided in subsection
(b) above.

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               For purposes of this Section 12(d), and without limiting the basis upon which Landlord
may withhold its consent to any proposed assignment or sublease, the parties agree that it shall
not be unreasonable for Landlord to withhold its consent to such assignment or sublease if: (i) the
proposed assignee or sublessee shall have a net worth which is not acceptable to Landlord in
Landlord’s reasonable discretion; (ii) the proposed assignee or sublessee shall have no reliable
credit history or an unfavorable credit history, or other reasonable evidence exists that the
proposed assignee or sublessee will experience difficulty in satisfying its financial or other
obligations under this Lease; (iii) the proposed assignee of sublessee, in Landlord’s reasonable
opinion, is not reputable and of good character; (iv) the portion of the Premises requested to be
subleased renders the balance of the Premises unleasable as a separate area; (v) Tenant is
proposing a sublease at a rental or subrental rate which is less than the then fair market rental
rate for the portion of the Premises being subleased or assigned, or Tenant is proposing to assign
or sublease to an existing tenant of the Building or another property owned by Landlord or by its
partners, or to another prospect with whom Landlord or its partners, or their affiliates are then
negotiating; (vi) the proposed assignee or sublessee will cause Landlord’s existing parking
facilities to be reasonably inadequate, or in violation of code requirements, or require Landlord
to increase the parking area or the number of parking spaces to meet code requirements, or the
nature of such party’s business shall reasonably require more than four (4) parking spaces per
1,000 rentable square feet of floor space, or (vii) the nature of such party’s proposed business
operation would or might reasonably permit or require the use of the Premises in a manner
inconsistent with the “Permitted Use” specified herein, would or might reasonably otherwise be in
conflict with express provisions of this Lease, would or might reasonably violate the terms of
any other lease for the Building, or would, in Landlord’s reasonable judgement, otherwise be
incompatible with other tenancies in the Building.

          (e) Any sums or other economic consideration received by Tenant as a result of any subletting,
assignment or license (except rental or other payments received which are attributable to the
amortization of the cost of leasehold improvements made to the sublet or assigned portion of the
premises by Tenant for subtenant or assignee, and other reasonable expenses incident to the
subletting or assignment, including standard leasing commissions) whether denominated rentals under
the sublease or otherwise, which exceed, in the aggregate, the total sums which Tenant is obligated
to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the
premises subject to such sublease or assignment) shall be divided evenly between Landlord and
Tenant, with Landlord’s portion being payable to Landlord as Additional Rental under this Lease
without affecting or reducing any other obligation of Tenant hereunder.

          (f) Regardless of Landlord’s consent, no subletting or assignment shall release Tenant of
Tenant’s obligation or alter the primary liability of Tenant to pay the Rent and to perform all
other obligations to be performed by Tenant hereunder. The acceptance of rental by Landlord from
any other person shall not be deemed to be a waiver by Landlord of any provision hereof. Consent
to one assignment or subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee or successor.

          (g) In the event that (i) the Premises or any part thereof are sublet and Tenant is in default
under this Lease, or (ii) this Lease is assigned by Tenant, then, Landlord may collect Rent from
the assignee or subtenant and apply the net amount collected to the rent herein reserved; but no
such collection shall be deemed a waiver of the provisions of this Article 12 with respect
to assignment and subletting, or the acceptance of such assignee or subtenant as Tenant hereunder,
or a release of Tenant from further performance of the covenants herein contained.

          (h) In connection with each proposed assignment or subletting of the Premises by Tenant,
Tenant shall pay to Landlord (i) an administrative fee of $250 per request (including requests for
non-disturbance agreements and Landlord’s or its lender’s waivers) in order to defer Landlord’s
administrative expenses arising from such request, plus (ii) Landlord’s reasonable attorneys’ fees.

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          (i) Tenant may, after notice to, but without the consent of Landlord, assign this Lease to an
affiliate (i.e., an entity, 50% or more of whose ownership interest is owned by the same owners
owning 50% or more of Tenant’s ownership interest), parent or subsidiary corporation of
Tenant(“Affiliate”), or to an entity to which it sells or assigns all or substantially all of its
assets or ownership interests or with which it may be consolidated or merged , provided such
purchasing, consolidated or merged entity shall, in writing, assume and agree to perform all of the
obligations of Tenant under this Lease, shall have a net worth at least equal to that of Tenant as
of the date hereof, and it shall deliver such assumption with a copy of such assignment to Landlord
within ten (10) days thereafter, and provided further that Tenant shall not be released or
discharged from any liability under this Lease by reason of such assignment.

          (j) Anything in this Article 12 to the contrary notwithstanding, no assignment or
sublease shall be permitted under this Lease if Tenant is in default at the time of such assignment
or has previously defaulted (irrespective of the fact that Tenant cured such default) more than
twice in connection with any of its monetary obligations under this Lease and such monetary
defaults aggregate in excess of $20,000.

     13. LANDLORD’S RIGHT OF ENTRY.

          Landlord and persons authorized by Landlord may enter the Premises at all reasonable
times upon reasonable advance notice (except in the case of an emergency in which case no prior
notice is necessary) for the purpose of inspections, repairs, alterations to adjoining space,
appraisals, or other reasonable purposes; including enforcement of Landlord’s rights under this
Lease. Landlord shall not be liable for inconvenience to or disturbance of Tenant by reason of any
such entry; provided, however, that in the case of repairs or work, such shall be done, so far as
practicable, so as to not unreasonably interfere with Tenant’s use of the Premises. Provided,
however, that such efforts shall not require Landlord to use overtime labor unless Tenant shall pay
for the increased costs to be incurred by Landlord for such overtime labor. Landlord also shall
have the right to enter the Premises at all reasonable times after giving prior oral notice to
Tenant, to
exhibit the Premises to any prospective purchaser and/or mortgagee. Landlord also shall have
the right to enter the Premises at all reasonable times after giving prior oral notice to Tenant,
to exhibit the Premises to any prospective tenants.

     14. REPAIRS AND MAINTENANCE.

          (a) Except as specifically otherwise provided in subparagraphs (b) and (c) of this
Article, Tenant, at its sole cost and expense and throughout the Term of this Lease, shall keep and
maintain the Premises in good order and condition, free of accumulation of dirt and rubbish, and
shall promptly make all non-structural repairs necessary to keep and maintain such good order and
condition. Tenant shall have the option of replacing lights, ballasts, tubes, ceiling tiles,
outlets and similar equipment itself or it shall have the ability to advise Landlord of Tenant’s
desire to have Landlord make such repairs. If requested by Tenant, Landlord shall make such
repairs to the Premises within a reasonable time of notice to Landlord and shall charge Tenant for
such services at Landlord’s standard rate (such rate to be competitive with the market rate for
such services). When used in this Article 14, the term “repairs” shall include
replacements and renewals when necessary. All repairs made by Tenant shall utilize materials and
equipment which are at least equal in quality and usefulness to those originally used in
constructing the Building and the Premises.

          (b) Landlord, throughout the Term of this Lease and at Landlord’s sole cost and expenses,
shall make all necessary repairs to the footings and foundations and the structural steel columns
and girders forming a part of the Premises.

          (c) Landlord shall maintain all HVAC systems, plumbing and electric systems serving the
Building and the Premises other than Tenant’s specialty HVAC system or electrical system which
shall be maintained exclusively by Tenant at Tenant’s sole cost and expense. Tenant’s Allocated
Share of Landlord’s cost for HVAC, electric and plumbing service, maintenance and repairs, as
limited under Article 6 with respect to capital expenditures, shall be included as a
portion of Recognized Expenses as provided in Article 6 hereof.

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          (d) Landlord, throughout the Term of this Lease, shall make all necessary repairs to the
Building outside of the Premises and the common areas, including the roof, walls, exterior portions
of the Premises and the Building, utility lines, equipment and other utility facilities in the
Building, which serve more than one tenant of the Building, and to any driveways, sidewalks, curbs,
loading, parking and landscaped areas, and other exterior improvements for the Building; provided,
however, that Landlord shall have no responsibility to make any repairs unless and until Landlord
receives written notice of the need for such repair or Landlord has actual knowledge of the need to
make such repair. Tenant shall pay its Allocated Share of the cost of all repairs, as limited
under Article 6 with respect to capital repairs, to be performed by Landlord pursuant to
this Article 14(d) as Additional Rent as provided in Article 6 hereof.

          (e) Landlord shall keep and maintain all common areas appurtenant to the Building and any
sidewalks, parking areas, curbs and access ways adjoining the Property in a clean and orderly
condition, free of accumulation of dirt, rubbish, snow and ice, and shall keep and maintain all
landscaped areas in a neat and orderly condition. Tenant shall pay its Allocated Share of the cost
of all work to be performed by Landlord pursuant to this subaragraph (e) as Additional Rent as
provided in Article 6 hereof. Landlord’s obligation to provide snow removal services shall
be limited to the parking areas and the sidewalk entrances to the Building.

          (f) Notwithstanding anything herein to the contrary, repairs to the Premises, Building or
Project and its appurtenant common areas made necessary by a negligent or willful act
or omission of Tenant or any employee, agent, contractor, or invitee of Tenant shall be made
at the sole cost and expense of Tenant, except to the extent of insurance proceeds received by
Landlord.

          (g) Landlord shall provide Tenant with janitorial services for the Premises Monday through
Friday of each week in accordance with the guidelines set forth in Exhibit “D” attached
hereto and the Tenant shall pay its Allocated Share of the cost thereof as Additional Rent as
provided in Article 6 hereof.

          (h) Notwithstanding the foregoing to the contrary, in the event that Tenant is not satisfied
with the maintenance, repair and janitorial services for the Premises provided by the Landlord, and
such service is not corrected within sixty (60) days following receipt by Landlord of written
notice setting forth the precise nature of the deficiencies, then Tenant shall have the right, at
its expense, to provide for its own maintenance, repair and janitorial services of the Premises,
which shall be performed in a manner consistent with first class office buildings, and in such
event, the cost of performing such services shall be deducted from the Recognized Expenses.

     15. INSURANCE; SUBROGATION RIGHTS.

          (a) Tenant shall obtain and keep in force at all times during the term hereof, at its own
expense, commercial general liability insurance including contractual liability and personal injury
liability and all similar coverage, with combined single limits of $3,000,000.00 on account of
bodily injury to or death of one or more persons as the result of any one accident or disaster and
on account of damage to property, or in such other amounts as Landlord may from time to time
require. Tenant shall also require its movers to procure and deliver to Landlord a certificate of
insurance naming Landlord as an additional insured.

          (b) Tenant shall, at its sole cost and expense, maintain in full force and effect on all
Tenant’s trade fixtures, equipment and personal property on the Premises, a policy of “special
form” property insurance covering the full replacement value of such property.

          (c) All liability insurance required hereunder shall not be subject to cancellation
without at least thirty (30) days prior notice to all insureds, and shall name Landlord, Brandywine
Realty Trust, Landlord’s Agent and Tenant as insureds, as their interests may appear, and, if
requested by Landlord, shall also name as an additional insured any mortgagee or holder of any
mortgage which may be or become a lien upon any part of the Premises. Prior to the commencement of
the Term, Tenant shall provide Landlord with certificates which evidence that the coverages
required have been obtained for the policy periods. Tenant shall also furnish to Landlord
throughout the term hereof replacement certificates at least thirty (30) days prior to the
expiration dates of the then

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current policy or policies. All the insurance required under this
Lease shall be issued by insurance companies authorized to do business in the State of New Jersey
with a financial rating of at least an A-VII as rated in the most recent edition of Best’s
Insurance Reports and in business for the past five years. The limit of any such insurance shall
not limit the liability of Tenant hereunder. If Tenant fails to procure and maintain such
insurance, Landlord may, but shall not be required to, procure and maintain the same, at Tenant’s
expense to be reimbursed by Tenant as Additional Rent within ten (10) days of written demand. Any
deductible under such insurance policy or self-insured retention under such insurance policy in
excess of Twenty Five Thousand ($25,000) must be approved by Landlord in writing prior to issuance
of such policy. Tenant shall not self-insure without Landlord’s prior written consent. The policy
limits set forth herein shall be subject to periodic review, and Landlord reserves the right to
require that Tenant increase the liability coverage limits if, in the reasonable opinion of
Landlord, the coverage becomes inadequate or is less than commonly maintained by tenants of similar
buildings in the area making similar uses.

          (d) Landlord shall obtain and maintain the following insurance during the Term of this
Lease: (i) replacement cost insurance including “special form” property insurance on the Building
and on the Project, (ii) builder’s risk insurance for the Landlord Work to be constructed by
Landlord in the Project, and (iii) commercial general liability insurance (including bodily injury
and property damage) covering Landlord’s operations at the Project in amounts reasonably required
by the Landlord’s lender or Landlord.

          (e) Each party hereto, and anyone claiming through or under them by way of subrogation, waives
and releases any cause of action it might have against the other party and Brandywine Realty Trust
and their respective employees, officers, members, partners, trustees and agents, on account of any
loss or damage that is insured against under any insurance policy required to be obtained hereunder
(to the extent that such loss or damage is recoverable under such insurance policy) that covers the
Project, Building or Premises, Landlord’s or Tenant’s fixtures, personal property, leasehold
improvements or business and which names Landlord and Brandywine Realty Trust or Tenant, as the
case may be, as a party insured. Each party hereto agrees that it will cause its insurance carrier
to endorse all applicable policies waiving the carrier’s right of recovery under subrogation or
otherwise against the other party. During any period while such waiver of right of recovery is in
effect, each party shall look solely to the proceeds of such policies for compensation for loss, to
the extent such proceeds are paid under such policies.

     16. INDEMNIFICATION.

          (a) Tenant shall defend, indemnify and hold harmless Landlord, Brandywine Realty Services
Corp. and Brandywine Realty Trust and their respective employees and agents from and against any
and all third-party claims, actions, damages, liability and expense (including all reasonable
attorney’s fees, expenses and liabilities incurred in defense of any such claim or any action or
proceeding brought thereon) arising from (i) Tenant’s improper use of the Premises, (ii) the
improper conduct of Tenant’s business, (iii) any activity, work or things done, permitted or
suffered by Tenant or its agents, licensees or invitees in or about the Premises or elsewhere
contrary to the requirements of the Lease, (iv) any breach or default in the performance of any
obligation of Tenant’s part to be performed under the terms of this Lease, and (v) any negligence
or willful act of Tenant or any of Tenant’s agents, contractors, employees or invitees. Without
limiting the generality of the foregoing, Tenant’s obligations shall include any case in which
Landlord, Brandywine Realty Services Corp. or Brandywine Realty Trust shall be made a party to any
litigation commenced by or against Tenant, its agents, subtenants, licensees, concessionaires,
contractors, customers or employees, then Tenant shall defend, indemnify and hold harmless
Landlord, Brandywine Realty Services Corp. and Brandywine Realty Trust and shall pay all costs,
expenses and reasonable attorney’s fees incurred or paid by Landlord, Brandywine Realty Services
Corp. and Brandywine Realty Trust in connection with such litigation, after notice to Tenant and
Tenant’s refusal to defend such litigation, and upon notice from Landlord shall defend the same at
Tenant’s expense by counsel satisfactory to Landlord.

          (b) Landlord shall defend, indemnify and hold harmless Tenant and its respective employees and
agents from and against any and all third-party claims, actions, damages, liability and expense
(including all attorney’s fees, expenses and liabilities incurred in defense of any such claim or
any action or proceeding brought

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thereon) arising from (i) Landlord’s improper use of the Premises,
(ii) the improper conduct of Landlord’s business, (iii) any activity, work or things done,
permitted or suffered by Landlord in or about the Premises or elsewhere contrary to the
requirements of the Lease, (iv) any breach or default in the performance of any obligation of
Landlord’s part to be performed under the terms of this Lease, and (v) any negligence or willful
act of Landlord or any of Landlord’s agents, contractors, employees or invitees without limiting
the generality of the foregoing, Landlord’s obligations shall include any case in which Tenant
shall be made a party to any litigation commenced by or against Landlord, its agents, subtenants,
licensees, concessionaires, contractors, customers or employees, then Landlord shall defend,
indemnify and
hold harmless Tenant and shall pay all costs, expenses and reasonable attorney’s fees incurred
or paid by Tenant in connection with such litigation, after notice to Landlord and Landlord’s
refusal to defend such litigation, and upon notice from Tenant shall defend the same at Landlord’s
expense by counsel satisfactory to Tenant.

     17. QUIET ENJOYMENT.

          Provided Tenant has performed all of the terms and conditions of this Lease, including the
payment of Fixed Rent and Additional Rent, to be performed by Tenant, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Term, without hindrance from Landlord, or anyone
claiming by through or under Landlord under and subject to the terms and conditions of this Lease
and of any mortgages now or hereafter affecting all of or any portion of the Premises.

     18. FIRE DAMAGE.

          (a) Except as provided below, in case of damage to the Premises by fire or other insured
casualty, Landlord shall repair the damage. Such repair work shall be commenced promptly following
notice of the damage and completed with due diligence, taking into account the time required for
Landlord to effect a settlement with and procure insurance proceeds from the insurer, except for
delays due to governmental regulation, scarcity of or inability to obtain labor or materials,
intervening acts of God or other causes beyond Landlord’s reasonable control.

          (b) Notwithstanding the foregoing, if (i) the damage is of a nature or extent that, in
Landlord’s reasonable judgment (to be communicated to Tenant within sixty (60) days from the date
of the casualty), the repair and restoration work would require more than two hundred ten (210)
consecutive days to complete after the casualty (assuming normal work crews not engaged in
overtime), or (ii) if more than thirty (30%) percent of the total area of the Building is
extensively damaged, or (iii) the casualty occurs in the last Lease Year of the Term and Tenant has
not exercised a renewal right, either party shall have the right to terminate this Lease and all
the unaccrued obligations of the parties hereto, by sending written notice of such termination to
the other within ten (10) days of Tenant’s receipt of the notice from Landlord described above.
Such notice is to specify a termination date no less than fifteen (15) days after its transmission.

          (c) If the insurance proceeds received by Landlord as dictated by the terms and conditions of
any financing then existing on the Building, (excluding any rent insurance proceeds) would not be
sufficient to pay for repairing the damage or are required to be applied on account of any mortgage
which encumbers any part of the Premises or Building, or if the nature of loss is not covered by
Landlord’s fire insurance coverage, Landlord may elect either to (i) repair the damage as above
provided notwithstanding such fact or (ii) terminate this Lease by giving Tenant notice of
Landlord’s election as aforesaid.

          (d) In the event Landlord has not completed restoration of the Premises within two hundred ten
(210) days from the date of casualty (subject to delay due to weather conditions, shortages of
labor or materials or other reasons beyond Landlord’s control, Tenant may terminate this Lease by
written notice to Landlord within thirty (30) business days following the expiration of such 210
day period (as extended for reasons beyond Landlord’s control as provided above) unless, within
thirty (30) business days following receipt of such notice, Landlord has substantially completed
such restoration and delivered the Premises to Tenant for occupancy. Notwithstanding the
foregoing, in the event Tenant is responsible for the aforesaid casualty, Tenant shall not
have the right to terminate this Lease if Landlord is willing to rebuild and restore the Premises.

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          (e) In the event of damage or destruction to the Premises or any part thereof, Tenant’s
obligation to pay Fixed Rent and Additional Rent shall be equitably adjusted or abated.

     19. SUBORDINATION; RIGHTS OF MORTGAGEE.

          (a) Landlord represents to Tenant that, as of the date of this Lease, no mortgage
encumbers the Building or the Premises. This Lease shall be subject and subordinate at all times to
the lien of any mortgages hereafter placed upon the Premises, Building and/or Project and land of
which they are a part without the necessity of any further instrument or act on the part of Tenant
to effectuate such subordination, provided that the holder of such mortgage executes and delivers a
subordination, attornment and nondisturbance agreement (“Nondisturbance Agreement”) on its
standard form, which provides, inter alia, that the leasehold estate granted to
Tenant under this Lease will not be terminated or disturbed by reason of the foreclosure of the
mortgage held by Landlord’s Mortgagee, so long as Tenant shall not be in default under this Lease
and shall pay all sums due under this Lease without offsets or defenses thereto and shall fully
perform and comply with all of the terms, covenants and conditions of this Lease on the part of
Tenant to be performed and/or complied with, and in the event a mortgagee or its respective
successor or assigns shall enter into and lawfully become possessed of the Premises covered by this
Lease and shall succeed to the rights of Landlord hereunder, Tenant will attorn to the successor as
its landlord under this Lease and, upon the request of such successor landlord, Tenant will execute
and deliver an attornment agreement in favor of the successor landlord. Tenant further agrees to
execute and deliver upon demand such further instrument or instruments evidencing such
subordination of this Lease to the lien of any such mortgage and such further instrument or
instruments of attornment as shall be desired by any mortgagee or proposed mortgagee or by any
other person. Notwithstanding the foregoing, any mortgagee may at any time subordinate its
mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant, and thereupon
this Lease shall be deemed prior to such mortgage without regard to their respective dates of
execution and delivery and in that event such mortgagee shall have the same rights with respect to
this Lease as though it had been executed prior to the execution and delivery of the mortgage.

          (b) In the event Landlord shall be or is alleged to be in default of any of its obligations
owing to Tenant under this Lease, Tenant agrees to give to the holder of any mortgage (collectively
the “Mortgagee”) hereafter placed upon the Premises, Building and/or Project, notice by overnight
mail of any such default which Tenant shall have served upon Landlord, provided that prior thereto
Tenant has been notified in writing (by way of Notice of Assignment of Rents and/or Leases or
otherwise in writing to Tenant) of the name and addresses of any such Mortgagee. Tenant shall not
be entitled to exercise any right or remedy as there may be because of any default by Landlord
without having given such notice to the Mortgagee; and Tenant further agrees that if Landlord shall
fail to cure such default the Mortgagee shall have forty-five (45) additional days (measured from
the later of the date on which the default should have been cured by Landlord or the Mortgagee’s
receipt of such notice from Tenant), within which to cure such default, provided that if such
default be such that the same could not be cured within such period and Mortgagee is diligently
pursuing the remedies necessary to effectuate the cure (including but not limited to foreclosure
proceedings if necessary to effectuate the cure); then Tenant shall not exercise any right or
remedy as there may be arising because of Landlord’s default, including but not limited to,
termination of this Lease as may be expressly provided for herein or available to Tenant as a
matter of law, if the Mortgagee either has cured the default within such time periods, or as the
case may be, has initiated the cure of same within such period and is diligently pursuing the cure
of same as aforesaid.

     20. CONDEMNATION.

          (a) If more than (i) fifteen (15%) percent of the floor area of the Premises or (ii) fifty
(50%) percent of the parking area serving the Building is taken or condemned for a public or
quasi-public use (a sale in lieu of condemnation to be deemed a taking or condemnation for purposes
of this Lease), this Lease shall, at either party’s option, terminate as of the date title to the
condemned real estate vests in the condemnor, and the Fixed Rent and

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Additional Rent herein reserved shall be apportioned and paid in full by Tenant to Landlord to
that date and all rent prepaid for period beyond that date shall forthwith be repaid by Landlord to
Tenant and neither party shall thereafter have any liability hereunder.

          (b) If less than (i) fifteen (15%) percent of the floor area of the Premises or (ii) fifty
(50%) percent of the parking area serving the Building is taken or if neither Landlord nor Tenant
have elected to terminate this Lease pursuant to the preceding sentence, Landlord shall do such
work as may be reasonably necessary to restore the portion of the Premises not taken to tenantable
condition for Tenant’s uses, but shall not be required to expend more than the net award Landlord
reasonably expects to be available for restoration of the Premises. If Landlord determines that
the damages available for restoration of the Building and/or Project will not be sufficient to pay
the cost of restoration, or if the condemnation damage award is required to be applied on account
of any mortgage which encumbers any part of the Premises, Building and/or Project, Landlord may
terminate this Lease by giving Tenant thirty (30) days prior notice specifying the termination
date.

          (c) If this Lease is not terminated after any such taking or condemnation, the Fixed Rent and
the Additional Rent shall be equitably reduced in proportion to the area of the Premises which has
been taken for the balance of the Term.

          (d) If a part or all of the Premises shall be taken or condemned, all compensation awarded
upon such condemnation or taking shall go to Landlord and Tenant shall have no claim thereto other
than Tenant’s damages associated with moving, storage and relocation; and Tenant hereby expressly
waives, relinquishes and releases to Landlord any claim for damages or other compensation to which
Tenant might otherwise be entitled because of any such taking or limitation of the leasehold estate
hereby created, and irrevocably assigns and transfers to Landlord any right to compensation of all
or a part of the Premises or the leasehold estate.

     21. ESTOPPEL CERTIFICATE.

          Each party agrees at any time and from time to time, within fifteen (15) days after the other
party’s written request, to execute, acknowledge and deliver to the other party a written
instrument in recordable form certifying all information reasonably requested, including but not
limited to, the following: that this Lease is unmodified and in full force and effect (or if there
have been modifications, that it is in full force and effect as modified and stating the
modifications), the Commencement Date, the expiration date of this Lease, the square footage of the
Premises, the rental rates applicable to the Premises, the dates to which Rent, Additional Rent,
and other charges have been paid in advance, if any, and stating whether or not to the best
knowledge of the party signing such certificate, the requesting party is in default in the
performance of any covenant, agreement or condition contained in this Lease and, if so, specifying
each such default of which the signer may have knowledge. It is intended that any such
certification and statement delivered pursuant to this Article may be relied upon by any
prospective purchaser of the Project or any mortgagee thereof or any assignee of Landlord’s
interest in this Lease or of any mortgage upon the fee of the Premises or any part thereof.

     22. DEFAULT.

          If:

          (a) Tenant fails to pay any installment of Fixed Rent or any amount of Additional Rent when
due; provided, however, Landlord shall provide written notice of the failure to pay such Rent and
Tenant shall have a five (5) business day grace period from its receipt of such Landlord’s notice
(facsimile receipt being deeded to be notice hereunder) within which to pay such Rent without
creating a default hereunder. The late fee set forth in Article 5 hereof shall be due on the first
day after such payment is due irrespective of the foregoing notice and grace period. No
additional notice shall be required thereafter and Landlord shall be entitled to immediately
exercise its remedies hereunder if payment is not received during the grace period,

          (b) Tenant “vacates” the Premises (other than in the case of a permitted subletting or
assignment) or permits the same to be unoccupied for a period in excess of thirty (30) days,

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          (c) Tenant fails to bond over a construction or mechanics lien within the time period set
forth in Article 11,

          (d) Tenant fails to observe or perform any of Tenant’s other non-monetary agreements or
obligations herein contained within thirty (30) days after written notice specifying the default,
or the expiration of such additional time period as is reasonably necessary to cure such default,
provided Tenant immediately commences and thereafter proceeds with all due diligence and in good
faith to cure such default,

          (e) Tenant makes any assignment for the benefit of creditors,

          (f) a petition is filed or any proceeding is commenced against Tenant or by Tenant under any
federal or state bankruptcy or insolvency law and such petition or proceeding is not dismissed
within thirty (30) days,

          (g) a receiver or other official is appointed for Tenant or for a substantial part of Tenant’s
assets or for Tenant’s interests in this Lease,

          (h) any attachment or execution against a substantial part of Tenant’s assets or of Tenant’s
interests in this Lease remains unstayed or undismissed for a period of more than ten (10) days, or

          (i) a substantial part of Tenant’s assets or of Tenant’s interest in this Lease is taken by
legal process in any action against Tenant,

then, in any such event, an Event of Default shall be deemed to exist and Tenant shall be in
default hereunder.

          If an Event of Default shall occur, the following provisions shall apply and Landlord shall
have, in addition to all other rights and remedies available at law or in equity, the rights and
remedies set forth therein, which rights and remedies may be exercised upon or at any time
following the occurrence of an Event of Default unless, prior to such exercise, Landlord shall
agree in writing with Tenant that the Event(s) of Default has been cured by Tenant in all respects.

          (a) Acceleration of Rent. By notice to Tenant, Landlord shall have the right to
accelerate all Fixed Rent and all expense installments due hereunder and otherwise payable in
installments over the remainder of the Term, and, at Landlord’s option, any other Additional Rent
to the extent that such Additional Rent can be determined and calculated to a fixed sum; and the
amount of accelerated rent to the termination date, without further notice or demand for payment,
shall be due and payable by Tenant within five (5) days after Landlord has so notified Tenant, such
amount collected from Tenant shall be discounted to present value using an interest rate of six
percent (6%) per annum. Additional Rent which has not been included, in whole or in part, in
accelerated rent, shall be due and payable by Tenant during the remainder of the Term, in the
amounts and at the times otherwise provided for in this Lease.

          Notwithstanding the foregoing or the application of any rule of law based on election of
remedies or otherwise, if Tenant fails to pay the accelerated rent in full when due, Landlord
thereafter shall have the right by notice to Tenant, (i) to terminate Tenant’s further right to
possession of the Premises and (ii) to terminate this Lease under subparagraph (b) below; and if
Tenant shall have paid part but not all of the accelerated rent, the portion thereof attributable
to the period equivalent to the part of the Term remaining after Landlord’s termination of
possession or termination of this Lease shall be applied by Landlord against Tenant’s obligations
owing to Landlord, as determined by the applicable provisions of subparagraphs (c) and (d) below.

          (b) Termination of Lease. By notice to Tenant, Landlord shall have the right to
terminate this Lease as of a date specified in the notice of termination and in such case, Tenant’s
rights, including any based on any option to renew, to the possession and use of the Premises shall
end absolutely as of the termination date; and this

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Lease shall also terminate in all respects except for the provisions hereof regarding Landlord’s damages and Tenant’s liabilities arising
prior to, out of and following the Event of Default and the ensuing termination.

          Following such termination and the notice of same provided above (as well as upon any other
termination of this Lease by expiration of the Term or otherwise) Landlord immediately shall have
the right to recover possession of the Premises; and to that end, Landlord may enter the Premises
and take possession, without the necessity of giving Tenant any notice to quit or any other further
notice, with or without legal process or proceedings, and in so doing Landlord may remove Tenant’s
property (including any improvements or additions to the Premises which Tenant made, unless made
with Landlord’s consent which expressly permitted Tenant to not remove the same upon expiration of
the Term), as well as the property of others as may be in the Premises, and make disposition
thereof in such manner as Landlord may deem to be commercially reasonable and necessary under the
circumstances.

          (c) Tenant’s Continuing Obligations/Landlord’s Reletting Rights.

               (i) Unless and until Landlord shall have terminated this Lease under subparagraph (b) above,
Tenant shall remain fully liable and responsible to perform all of the covenants and to observe all
the conditions of this Lease throughout the remainder of the Term to the early termination date;
and, in addition, Tenant shall pay to Landlord, upon demand and as Additional Rent, the total sum
of all costs, losses, damages and expenses, including reasonable attorneys’ fees, as Landlord
incurs, directly or indirectly, because of any Event of Default having occurred.

               (ii) If Landlord either terminates Tenant’s right to possession without terminating this Lease
or terminates this Lease and Tenant’s leasehold estate as above provided, then, subject to the
provisions below, Landlord shall have the unrestricted right to relet the Premises or any part(s)
thereof to such tenant(s) on such provisions and for such period(s) as Landlord may deem
appropriate. Landlord agrees, however, to use reasonable efforts to mitigate its damages, provided
that Landlord shall not be liable to Tenant for its inability to mitigate damages if it shall
endeavor to relet the Premises in like manner as it offers other comparable vacant space or
property available for leasing to others in the Project of which the Building is a part. If
Landlord relets the Premises after such a default, the costs recovered from Tenant shall be
reallocated to take into consideration any additional rent which Landlord receives from the new
tenant which is in excess to that which was owed by Tenant.

          (d) Landlord’s Damages.

               (i) The damages which Landlord shall be entitled to recover from Tenant shall be the sum of:

                    (A) all Fixed Rent and Additional Rent accrued and unpaid as of the termination date; and

                    (B) (i) all costs and expenses incurred by Landlord in recovering possession of the Premises,
including removal and storage of Tenant’s property, (ii) the costs and expenses of restoring the
Premises to the condition in which the same were to have been surrendered by Tenant as of the
expiration of the Term, and (iii) the costs of reletting commissions; and

                    (C) all Fixed Rent and Additional Rent (to the extent that the amount(s) of Additional Rent
has been then determined) otherwise payable by Tenant over the remainder of the Term as reduced to
present value.

Less deducting from the total determined under subparagraphs (A), (B) and (C) all Rent and all
other Additional Rent to the extent determinable as aforesaid, (to the extent that like charges
would have been payable by Tenant) which Landlord receives from other tenant(s) by reason of the
leasing of the Premises or part during or attributable to any period falling within the otherwise
remainder of the Term.

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               (ii) The damage sums payable by Tenant under the preceding provisions of this subparagraph (d)
shall be payable on demand from time to time as the amounts are determined; and if from
Landlord’s subsequent receipt of rent as aforesaid from reletting, there be any excess
payment(s) by Tenant by reason of the crediting of such rent thereafter received, the excess
payment(s) shall be refunded by Landlord to Tenant, without interest.

               (iii) Landlord may enforce and protect the rights of Landlord hereunder by a suit or suits in
equity or at law for the specific performance of any covenant or agreement contained herein, and
for the enforcement of any other appropriate legal or equitable remedy, including, without
limitation, injunctive relief, and for recovery of consequential damages and all moneys due or to
become due from Tenant under any of the provisions of this Lease.

          (e) Landlord’s Right to Cure. Without limiting the generality of the foregoing, if
Tenant shall be in default in the performance of any of its obligations hereunder, Landlord,
without being required to give Tenant any notice or opportunity to cure, may (but shall not be
obligated to do so), in addition to any other rights it may have in law or in equity, cure such
default on behalf of Tenant, and Tenant shall reimburse Landlord upon demand for any sums paid or
costs incurred by Landlord in curing such default, including reasonable attorneys’ fees and other
legal expenses, together with interest at 10% per annum Rate from the dates of Landlord’s incurring
of costs or expenses.

          (f) Interest on Damage Amounts. Any sums payable by Tenant hereunder, which are not
paid after the same shall be due, shall bear interest from that day until paid at the rate of four
(4%) percent over the then Prime Rate as published daily under the heading “Money Rates” in The
Wall Street Journal, unless such rate be usurious as applied to Tenant, in which case the
highest permitted legal rate shall apply (the “Default Rate”).

          (g) Landlord’s Statutory Rights. Landlord shall have all rights and remedies now or
hereafter existing at law or in equity with respect to the enforcement of Tenant’s obligations
hereunder and the recovery of the Premises. No right or remedy herein conferred upon or reserved
to Landlord shall be exclusive of any other right or remedy, but shall be cumulative and in
addition to all other rights and remedies given hereunder or now or hereafter existing at law.
Landlord shall be entitled to injunctive relief in case of the violation, or attempted or
threatened violation, of any covenant, agreement, condition or provision of this Lease, or to a
decree compelling performance of any covenant, agreement, condition or provision of this Lease.

          (h) Remedies Not Limited. Nothing herein contained shall limit or prejudice the right
of Landlord to exercise any or all rights and remedies available to Landlord by reason of default
or to prove for and obtain in proceedings under any bankruptcy or insolvency laws, an amount equal
to the maximum allowed by any law in effect at the time when, and governing the proceedings in
which, the damages are to be proved, whether or not the amount be greater, equal to, or less than
the amount of the loss or damage referred to above.

          (i) No Waiver by Landlord. No delay or forbearance by Landlord in exercising any
right or remedy hereunder, or Landlord’s undertaking or performing any act or matter which is not
expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of
Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or
matter thereafter. Waiver by Landlord of any breach by Tenant of any covenant or condition herein
contained (which waiver shall be effective only if so expressed in writing by Landlord) or failure
by Landlord to exercise any right or remedy in respect of any such breach shall not constitute a
waiver or relinquishment for the future of Landlord’s right to have any such covenant or condition
duly performed or observed by Tenant, or of Landlord’s rights arising because of any subsequent
breach of any such covenant or condition nor bar any right or remedy of Landlord in respect of such
breach or any subsequent breach. Landlord’s receipt and acceptance of any payment from Tenant
which is tendered not in conformity with the provisions of this Lease or following an Event of
Default (regardless of any endorsement or notation on any check or any statement in any letter
accompanying any payment) shall not operate as an accord and satisfaction or a waiver of the right
of

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Landlord to recover any payments then owing by Tenant which are not paid in full, or act as a
bar to the termination of this Lease and the recovery of the Premises because of Tenant’s previous
default.

     23. INTENTIONALLY OMITTED PRIOR TO EXECUTION. 

     24. LANDLORD’S REPRESENTATIONS AND WARRANTIES.

          Landlord represents and warrants to Tenant that: (a) Landlord is the owner of the Building
and the Project; (b) Landlord has the authority to enter into this Lease and (c) the person
executing this Lease is duly authorized to execute and deliver this Lease on behalf of Landlord.

     25. SURRENDER.

          Tenant shall, at the expiration of the Term, promptly quit and surrender the Premises in good
order and condition and in conformity with the applicable provisions of this Lease, excepting only
reasonable wear and tear and damage by fire or other insured casualty. Tenant shall have no right
to hold over beyond the expiration of the Term and in the event Tenant shall fail to deliver
possession of the Premises as herein provided, such occupancy shall not be construed to effect or
constitute other than a tenancy at sufferance. During any period of occupancy beyond the
expiration of the Term the amount of rent owed to Landlord by Tenant shall automatically become one
hundred fifty (150%) percent of the sum of the Rent and all Additional Rent as those sums are at
that time calculated under the provisions of the Lease. If Tenant fails to surrender the space
within six (6) months days of the termination date, Landlord may elect to automatically extend the
Term for an additional month, at Landlord’s option, with a Rent of two hundred percent (200%) the
sum of the Rent and Additional Rent as those sums are at that time calculated under the provisions
of the Lease. The acceptance of rent by Landlord or the failure or delay of Landlord in notifying
or evicting Tenant following the expiration or sooner termination of the Term shall not create any
tenancy rights in Tenant and any such payments by Tenant may be applied by Landlord against its
costs and expenses, including attorney’s fees, incurred by Landlord as a result of such holdover.

     26. RULES AND REGULATIONS.

          Tenant agrees that at all times during the terms of this Lease (as same may be extended) it,
its employees, agents, invitees and licenses shall comply with all rules and regulations specified
on Exhibit “C” attached hereto and made a part hereof, together with all reasonable Rules
and Regulations as Landlord may from time to time promulgate provided they do not increase the
financial burdens of Tenant or unreasonably restrict Tenant’s rights under this Lease. Tenant’s
right to dispute the reasonableness of any changes in or additions to the Rules and Regulations
shall be deemed waived unless asserted to Landlord within ten (10) business days after Landlord
shall have given Tenant written notice of any such adoption or change. In case of any conflict or
inconsistency between the provisions of this Lease and any Rules and Regulations, the provisions of
this Lease shall control. Landlord shall have no duty or obligation to enforce any Rule and
Regulation, or any term, covenant or condition of any other lease, against any other tenant, and
Landlord’s failure or refusal to enforce any Rule or Regulation or any term, covenant of condition
of any other lease against any other tenant shall be without liability of Landlord to Tenant.
However, if Landlord does enforce Rules or Regulations, Landlord shall endeavor to enforce same
equally in a non-discriminatory manner.

     27. GOVERNMENTAL REGULATIONS.

          (a) Tenant shall, in the use and occupancy of the Premises and the conduct of Tenant’s
business or profession therein, at all times comply with all applicable laws, ordinances, orders,
notices, rules and regulations of the federal, state and municipal governments, or any of their
departments and the regulations of the insurers of the Premises, Building and/or Project.

          (b) Without limiting the generality of the foregoing, Tenant shall (i) obtain, at Tenant’s
expense, before engaging in Tenant’s business or profession within the Premises, all necessary
licenses and permits including

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(but not limited to) state and local business licenses or permits,
and (ii) remain in compliance with and keep in full force and effect at all times all licenses,
consents and permits necessary for the lawful conduct of Tenant’s business or profession at the
Premises. Tenant shall pay all personal property taxes, income taxes and other taxes, assessments,
duties, impositions and similar charges which are or may be assessed, levied or imposed upon Tenant
and which, if not paid, could be liened against the Premises or against Tenant’s property therein
or against Tenant’s leasehold estate.

          (c) Landlord shall be responsible for compliance with Title III of the Americans with
Disabilities Act of l990, 42 U.S.C. §12181 et seq. and its regulations,
(collectively, the “ADA”) (i) as to the design and construction of exterior common areas
(e.g. sidewalks and parking areas) and (ii) with respect to the initial design and
construction by Landlord of Landlord’s Work (as defined in Article 4 hereof). Except as
set forth above in the initial sentence hereto, Tenant shall be responsible for compliance with the
ADA in all other respects concerning the use and occupancy of the Premises, which compliance shall
include, without limitation (i) provision for full and equal enjoyment of the goods, services,
facilities, privileges, advantages or accommodations of the Premises as contemplated by and to the
extent required by the ADA, (ii) compliance relating to requirements under the ADA or amendments
thereto arising after the date of this Lease and (iii) compliance relating to the design, layout,
renovation, redecorating, refurbishment, alteration, or improvement to the Premises made or
requested by Tenant at any time following completion of the Landlord’s Work.

     28. NOTICES.

          Wherever in this Lease it shall be required or permitted that notice or demand be given or
served by either party to this Lease to or on the other party, such notice or demand shall be
deemed to have been duly given or served if in writing and either: (i) personally served; (ii)
delivered by pre-paid nationally recognized overnight courier service (e.g. Federal
Express) with evidence of receipt required for delivery; (iii) forwarded by Registered or Certified
mail, return receipt requested, postage prepaid; (iv) facsimile with a copy mailed by first class
United States mail or (v) e-mailed with evidence of receipt and delivery of a copy of the notice by
first class mail; in all such cases addressed to the parties at the addresses set forth in
Article 1(k) hereof. Each such notice shall be deemed to have been given to or served upon
the party to which addressed on the date the same is delivered or delivery is refused. Either
party hereto may change its address to which said notice shall be delivered or mailed by giving
written notice of such change to the other party hereto, as herein provided.

     29. BROKERS.

          Landlord and Tenant each represents and warrants to the other that such party has had no
dealings, negotiations or consultations with respect to the Premises or this transaction with any
broker or finder other than the Broker identified in Article 1(j); and that otherwise no
broker or finder called the Premises to Tenant’s attention for lease or took any part in any
dealings, negotiations or consultations with respect to the Premises or this Lease. Each party
agrees to indemnify and hold the other harmless from and against all liability, cost and expense,
including attorney’s fees and court costs, arising out of any misrepresentation or breach of
warranty under this Article.

     30. CHANGE OF BUILDING/PROJECT NAME.

          Landlord reserves the right at any time and from time to time to change the name by which the
Building and/or Project is designated. Landlord agrees to pay for the reasonably documented costs
of stationery charges (including letterhead and cards) necessitated by any such name change, such
cost not to exceed $2,500.

     31. LANDLORD’S LIABILITY.

          Landlord’s obligations hereunder shall be binding upon Landlord only for the period of time
that Landlord is in ownership of the Building; and, upon termination of that ownership, Tenant,
except as to any obligations which are then due and owing, shall look solely to Landlord’s
successor in interest in the Building for the satisfaction of each and every obligation of Landlord
hereunder. Landlord shall have no personal liability under any

27

 

of the terms, conditions or covenants of this Lease and Tenant shall look solely to the equity of Landlord in the Building of
which the Premises form a part for the satisfaction of any claim, remedy or cause of action
accruing to Tenant as a result of the breach of any section of this Lease by Landlord. In addition
to the foregoing, no recourse shall be had for an obligation of Landlord hereunder, or for any
claim based thereon or otherwise in respect thereof, against any past, present or future trustee,
member, partner, shareholder, officer, director, partner, agent or employee of Landlord, whether by
virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such other liability being expressly waived and released by Tenant with respect to
the above-named individuals and entities.

     32. AUTHORITY.

          Tenant represents and warrants that (a) Tenant is duly organized, validly existing and legally
authorized to do business in the State of New Jersey, (b) the persons executing this Lease are duly
authorized to execute and deliver this Lease on behalf of Tenant, and (c) this Lease has been
executed under seal in accordance with N.J.S.A. 2A:14-4.

     33. NO OFFER.

          The submission of the Lease by Landlord to Tenant for examination does not constitute a
reservation of or option for the Premises or of any other space within the Building or in other
buildings owned or managed by Landlord or its affiliates. This Lease shall become effective as a
Lease only upon the execution and legal delivery thereof by both parties hereto.

     34. RENEWAL.

          Provided Tenant is neither in default at the time of exercise nor has Tenant ever been in
default (irrespective of the fact that Tenant cured such default) of any monetary obligations under
this Lease more than twice during the Term and such monetary default aggregates in excess of
$20,000, and Tenant is fully occupying the Premises and the Lease is in full force and effect,
Tenant shall have the right to renew this Lease for one (1) term of five (5) years beyond the end
of the initial Term (a “Renewal Term”). Tenant shall furnish written notice of intent to renew not
less than nine (9) months prior to the expiration of the Term, failing which, such renewal right
shall be deemed waived; time being of the essence. The terms and conditions of this Lease during
the Renewal Term shall remain unchanged except that the annual Fixed Rent for each Renewal Term
shall be the Fair Market Rent (as such term is hereinafter defined). All factors regarding
Additional Rent shall remain unchanged, and no Tenant Allowance shall be included in the absence of
further agreement by the parties. Anything herein contained to the contrary notwithstanding,
Tenant shall have no right to renew the term hereof other than or beyond the one (1), five (5) year
term hereinabove described. It shall be a condition of each such Renewal Term that Landlord and
Tenant shall have executed, not less than nine (9) months prior to the expiration of the then
expiring term hereof, an appropriate amendment to this Lease, in form and content satisfactory to
each of them, memorializing the extension of the term hereof for the next ensuing Renewal Term.

          For purposes of this Lease, “Fair Market Rent” shall mean the base rent, for comparable space.
In determining the Fair Market Rent, Landlord, Tenant and any appraiser shall take into account
applicable measurement and the loss factors, applicable lengths of lease term, differences in size
of the space demised, the location of the Building and comparable buildings, amenities in the
Building and comparable buildings, the ages of the Building and comparable buildings, differences
in base years or stop amounts for operating expenses and tax escalations and other factors normally
taken into account in determining Fair Market Rent. The Fair Market Rent shall reflect the level
of improvement made or to be made by Landlord to the space and the Recognized Expenses and Taxes
under this Lease. If Landlord and Tenant cannot agree on the Fair Market Rent, the Fair Market
Rent shall be established by the following procedure: (1) Tenant and Landlord shall agree on a
single MAI certified appraiser who shall have a minimum of ten (10) years experience in real estate
leasing in the market in which the Premises is located, (2) Landlord and Tenant shall each notify
the other (but not the appraiser), of its determination of such Fair Market Rent and the reasons
therefor, (3) during the next seven (7) days both Landlord and Tenant shall

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prepare a written critique of the other’s determination and shall deliver it to the other party, (4) on the tenth
(10th) day following delivery of the critiques to each other, Landlord’s and Tenant’s
determinations and critiques (as originally submitted to the other party, with no modifications
whatsoever) shall be submitted to the appraiser, who shall decide whether Landlord’s or Tenant’s
determination of Fair Market Rent is more correct. The determinations so chosen shall be the Fair
Market Rent. The appraiser shall not be empowered to choose any number other than the Landlord’s
or Tenant’s. The fees of the appraiser shall be paid by the non-prevailing party.`

     35. RIGHT OF EXPANSION.

          Subject to (a) Tenant not being in default at the time of exercise nor Tenant ever being in
default (irrespective of the fact that Tenant cured such default) of any monetary obligations under
this Lease more than twice during the Term and such monetary defaults aggregate in excess of
$20,000; (b) Tenant is fully occupying the Premises originally demised hereunder (c) the rights of
other tenants within the Building from time to time, and (d) such limitations as are imposed by
other tenant leases, upon Tenant’s written request, Landlord shall notify Tenant with regard to
space that is or Landlord expects to become vacant and available for lease (i) on the first (which
is contiguous with the portion of the Premises on the first floor of the Building, or (ii) on the
third floor of the Building, and Landlord shall propose to Tenant the basic economic terms upon
which Landlord would be prepared to entertain the negotiation of a new lease for such space (on
all of the same terms and conditions as are set forth in this Lease, except as otherwise specified
by Landlord) or an amendment to this Lease with which the parties would add such space to the
description of the “Premises,” in either case for a term which would be coterminous with this Lease
unless otherwise specified by Landlord, and which economic terms shall include the estimated date
that the space shall be available for delivery, the Base Rent and the tenant allowance (if any) to
be furnished to Tenant, whereupon Tenant shall have fifteen (15) days next following Landlord’s
delivery of such notice within which to accept such terms, time being of the essence. Should Tenant
accept such terms as are specified by Landlord, the parties shall negotiate the terms of a new
lease, or an amendment to this Lease, to memorialize their agreement. In the absence of any further
agreement by the parties, such additional space shall be delivered in “AS –IS” condition, and Rent
for such additional space shall commence on that date which is the earlier of: (x) Tenant’s
occupancy thereof, and (y) five (5) days after Landlord delivers such additional space to Tenant
free of other tenants and occupants. If Tenant shall not accept Landlord’s terms within such
fifteen (15) day period, or if the parties shall not have executed and delivered a mutually
satisfactory new lease or lease amendment within thirty (30) days next following Landlord’s
original notice under this Article 35, then Tenant’s rights to lease such space shall lapse
and terminate, and Landlord may, at its discretion, lease such space on such terms and conditions
as Landlord shall determine. Tenant’s rights hereunder shall not include the right to lease less
than all of the space identified in Landlord’s notice.

     Anything herein contained to the contrary notwithstanding, Landlord may at any time modify or
extend any existing or future tenant lease, or choose to use any space that is or about to become
vacant within the Building for marketing or property management purposes, without in any such case
notifying or offering such space to Tenant, or giving rise to any right of Tenant hereunder.
Nothing contained in this Article 35 is intended nor may anything herein be relied upon by
Tenant as a representation by Landlord as to the availability of expansion space within the
Building at any time. In the event Landlord notifies Tenant of space and Tenant rejects such
offer, Landlords obligations under this Article 35 shall terminate and this Article
35 shall be of no further force or effect.

     36. ROOF RIGHTS. So long as it (i) does not impact Landlord’s roof warranty and (ii)
complies with all applicable laws, rules and regulations, Tenant, at Tenant’s sole cost and
expense, shall have access to the roof of the Building in designated areas mutually agreed upon for
the purpose of installation of microwave satellite, antenna and other communications devices or
supplemental HVAC units (the “Roof Equipment”). Notwithstanding the foregoing, all such Roof
Equipment shall be for the sole benefit of Tenant and Landlord, shall relate specifically to
Tenant’s use of the Premises, and shall not be used as a switching station, amplification
station or by other tenants or third parties. Tenant shall make a request for approval of the Roof
Equipment hereunder by submission of specific plans and specifications for the work to be performed
by Tenant. Landlord shall respond in writing within fifteen (15) business days from receipt of the
same, advising Tenant of approved contractors and those portions of the work that are acceptable
and disapproving those portions of the work that are, in Landlord’s judgment, reasonably

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exercised,unacceptable and with respect to the plans, specifying in detail the nature of Landlord’s
objection. Tenant shall be solely responsible for all damages caused by its Roof Equipment, for
the removal of all Roof Equipment and the restoration of the roof upon the expiration or early
termination of this Lease unless directed in writing by Landlord otherwise. Landlord shall be
named as an additional insured on all Tenant insurance relating to the Roof Equipment. All
installation, repair, replacement and modification of the Roof Equipment shall be coordinated with
Landlord, shall only use those approved contractors and shall be in accordance with the Rules and
Regulations set forth herein.

     37. EARLY TERMINATION. Provided that Tenant is not in default of any obligations
under this Lease, Tenant shall have the one time right to terminate this Lease effective as of the fifth
anniversary of the Commencement Date (the “Termination Date”) upon the following terms and
conditions:

          (a) The Tenant shall have the right to terminate the Lease by providing Landlord with no
less than twelve (12) months prior written notice (the “Termination Notice”) of Tenant’s intention, which termination shall be effective on the Termination Date

          (b) The Termination Notice shall be accompanied by Tenant’s good check in an amount equal to
the Termination Payment (defined below). For purposes hereof, the Termination Payment shall be
determined as follows:

               (i) The entire cost of the Improvements and Leasing Commissions payable in connection with
this Lease shall be deemed to be amortized over a period of eighty-four (84) months at an assumed
interest rate of six (6%) percent per annum (the payments under the calculation are referred to as
the “Amortization Schedule”).

               (ii) The Termination Payment shall be the principal balance due under the Amortization
Schedule as of the Termination Date.

          (c) On the Termination Date, Tenant shall vacate the Premises and leave same in the condition
required under this Lease, including but not limited to the removal of all cable and
telecommunications lines from the Premises.

     If Tenant fails to vacate the Premises on the Termination Date or any of the other conditions
to Tenant’s right of termination as set forth herein are not satisfied or waived by Landlord in
writing, Tenant shall be deemed to have forever forfeited its right to terminate the Lease pursuant
to the provisions of this Section 37. Time is of the Essence of this Section 37.

     38. TENANT FINANCIAL INFORMATION.

          Any time and from time to time during the Term (but not more than once during any twelve month
period unless a default has occurred under this Lease or Landlord has a reasonable basis to suspect
that Tenant has suffered a material adverse change in its financial position) upon not less than
thirty (30) days prior written request from Landlord, Tenant shall deliver to Landlord Tenant’s
most recent financial statement prepared either for Tenant’s lender or shareholders reflecting the
financial condition of the Tenant, such information shall be certified by an officer of Tenant to
be a fair and true presentation of Tenant’s current financial position. Landlord shall keep all
information provided hereunder strictly confidential.

     39. MISCELLANEOUS PROVISIONS.

          (a) Successors. The respective rights and obligations provided in this Lease shall
bind and inure to the benefit of the parties hereto, their successors and assigns; provided,
however, that no rights shall inure to the benefit of any successors or assigns of Tenant unless
Landlord’s written consent for the transfer to such successor and/or assignee has first been
obtained as provided in Article 12 hereof.

30

 

          (b) Governing Law. This Lease shall be construed, governed and enforced in accordance
with the laws of the State of New Jersey, without regard to principles relating to conflicts of
law.

          (c) Severability. If any provisions of this Lease shall be held to be invalid, void
or unenforceable, the remaining provisions hereof shall in no way be affected or impaired and such
remaining provisions shall remain in full force and effect.

          (d) Captions. Marginal captions, titles or exhibits and riders and the table of
contents in this Lease are for convenience and reference only, and are in no way to be construed as
defining, limiting or modifying the scope or intent of the various provisions of this Lease.

          (e) Gender. As used in this Lease, the word “person” shall mean and include, where
appropriate, an individual, corporation, partnership or other entity; the plural shall be
substituted for the singular, and the singular for the plural, where appropriate; and the words of
any gender shall mean to include any other gender.

          (f) Entire Agreement. This Lease, including the Exhibits and any Riders hereto (which
are hereby incorporated by this reference, except that in the event of any conflict between the
printed portions of this Lease and any Exhibits or Riders, the term of such Exhibits or Riders
shall control), supersedes any prior discussions, proposals, negotiations and discussions between
the parties and the Lease contains all the agreements, conditions, understandings, representations
and warranties made between the parties hereto with respect to the subject matter hereof, and may
not be modified orally or in any manner other than by an agreement in writing signed by both
parties hereto or their respective successors in interest. Without in any way limiting the
generality of the foregoing, this Lease can only be extended pursuant to the terms hereof, and in
Tenant’s case, with the terms hereof, with the due exercise of an option (if any) contained herein
pursuant to a written agreement signed by both Landlord and Tenant specifically extending the term.
No negotiations, correspondence by Landlord or offers to extend the term shall be deemed an
extension of the termination date for any period whatsoever.

          (g) Counterparts. This Lease may be executed in any number of counterparts, each of
which when taken together shall be deemed to be one and the same instrument.

          (h) Telefax Signatures. The parties acknowledge and agree that notwithstanding any
law or presumption to the contrary a telefaxed signature of either party whether upon this Lease or
any related document shall be deemed valid and binding and admissible by either party against the
other as if same were an original ink signature.

          (i) Calculation of Time. In computing any period of time prescribed or allowed by any
provision of this Lease, the day of the act, event or default from which the designated period of
time begins to run shall not be included. The last day of the period so computed shall be
included, unless it is a Saturday, Sunday or a legal holiday, in which event the period runs until
the end of the next day which is not a Saturday, Sunday, or legal holiday. Unless otherwise
provided herein, all Notices and other periods expire as of 5:00 p.m. (local time in Newtown
Square, Pennsylvania) on the last day of the Notice or other period.

          (j) No Merger. There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof by reason of the fact that
the same person, firm, corporation, or other legal entity may acquire or hold, directly or
indirectly, this Lease of the leasehold estate and the fee estate in the Premises or any interest
in such fee estate, without the prior written consent of Landlord’s mortgagee.

          (k) Time of the Essence. TIME IS OF THE ESSENCE IN ALL PROVISIONS OF THIS LEASE,
INCLUDING ALL NOTICE PROVISIONS TO BE PERFORMED BY OR ON BEHALF OF TENANT.

31

 

          (l) Recordation of Lease. Tenant shall not record this Lease without the written
consent of Landlord.

          (m) Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser
amount than any payment of Fixed Rent or Additional Rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated Fixed Rent or Additional Rent due and payable
hereunder, nor shall any endorsement or statement or any check or any letter accompanying any check
or payment as Rent be deemed an accord and satisfaction. Landlord may accept such check or payment
without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other right
or remedy provided for in this Lease, at law or in equity.

          (n) No Partnership. Landlord does not, in any way or for any purpose, become a
partner of Tenant in the conduct of its business, or otherwise, or joint venturer or a member of a
joint enterprise with Tenant. This Lease establishes a relationship solely of that of a landlord
and tenant.

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

          (p) Force Majeure. If by reason of strikes or other labor disputes, fire or other
casualty (or reasonable delays in adjustment of insurance), accidents, orders or regulations of any
Federal, State, County or Municipal authority, or any other cause beyond Landlord’s reasonable
control, Landlord is unable to furnish or is delayed in furnishing any utility or service required
to be furnished by Landlord under the provisions of this Lease or is unable to perform or make or
is delayed in performing or making any installations, decorations, repairs, alterations, additions
or improvements, or is unable to fulfill or is delayed in fulfilling any of Landlord’s other
obligations under this Lease, no such inability or delay shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Fixed Rent, or
relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord
or its agents, by reason of inconvenience or annoyance to Tenant, or injury to or interruption of
Tenant’s business, or otherwise.

     40. WAIVER OF TRIAL BY JURY.

          LANDLORD AND TENANT WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY TENANT AND TENANT ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY PERSON ACTING ON
BEHALF OF LANDLORD HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR
IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANT FURTHER ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS LEASE AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS
HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. TENANT FURTHER ACKNOWLEDGES THAT IT HAS
READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION AND AS EVIDENCE OF SAME
HAS EXECUTED THIS LEASE.

     41. CONSENT TO JURISDICTION.

          Tenant hereby consents to the exclusive jurisdiction of the state courts located in Camden and
Burlington County and to the federal courts located in the District of New Jersey.

32

 

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

	 	 	 	 	 	 	 	 	 
	WITNESS:	 	LANDLORD:	 	 
	 	 	BRANDYWINE OPERATING PARTNERSHIP, L.P.
	 

	 	By:
	 	 	 	Brandywine Realty Trust,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Daniel Pulizzo

	 	By:
	 	 	 	/s/ George D. Sowa	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	George D. Sowa, Senior Vice President	 	 
	 
	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	TENANT:

QAD Inc. a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Kent Harris

	 	By:
	 	 	 	/s/ Daniel Lender	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: Daniel Lender	 	 
	 	 	 	 	Title: Chief Financial Officer	 	 

33

 

EXHIBIT “A”

SPACE PLAN

34

 

EXHIBIT “B”

Tenant:  QAD Inc.

Premises: 2nd floor and portion of 1st floor

10000 Midlantic Drive

Square Footage: 43,258

CONFIRMATION OF LEASE TERM

     1. THIS MEMORANDUM MADE AS OF THE                      DAY OF                                  
       , 2006, BETWEEN BRANDYWINE OPERATING
PARTNERSHIP, L.P., A DELAWARE LIMITED PARTNERSHIP, WITH AN OFFICE LOCATED AT 401 PLYMOUTH ROAD,
SUITE 500, PLYMOUTH MEETING, PENNSYLVANIA 19462 (“LANDLORD”) AND QAD INC. (“TENANT”), WHO ENTERED
INTO A LEASE
DATED                                                             , 2006 COVERING CERTAIN PREMISES LOCATED AT 10,000 MIDLANTIC
DRIVE, MT. LAUREL, NEW JERSEY. ALL CAPITALIZED TERMS, IF NOT DEFINED HEREIN, SHALL BE DEFINED AS
THEY ARE DEFINED IN THE LEASE.

     2. THE PARTIES TO THIS MEMORANDUM HEREBY AGREE THAT THE DATE OF                                                     
        , 2006 IS
THE “COMMENCEMENT DATE” OF THE TERM AND THE DATE OF                                                             , 2014 IS THE EXPIRATION DATE
OF THE LEASE.

     3. TENANT HEREBY CONFIRMS THE FOLLOWING:

          (a) That it has accepted possession of the Premises pursuant to the terms of the Lease;

          (B) THAT THE IMPROVEMENTS, INCLUDING THE LANDLORD WORK, REQUIRED TO BE FURNISHED
ACCORDING TO THE LEASE BY LANDLORD HAVE BEEN SUBSTANTIALLY COMPLETED;

          (C) THAT LANDLORD HAS FULFILLED ALL ITS DUTIES OF AN INDUCEMENT
NATURE OR ARE OTHERWISE SET FORTH IN THE LEASE;

          (d) That there are no offsets or credits against rentals;

          (e) That there is no default by Landlord or Tenant under the Lease and the Lease is in full
force and effect.

     3. Landlord hereby confirms to Tenant that its Building Number is 260 and its
Lease Number is                                                             . This information must accompany each Rent check or wire
payment.

     4. Tenant’s Notice Address is:                     Tenant’s Billing Address is:

35

 

     5. This Memorandum, each and all of the provisions hereof, shall inure to the benefit, or
bind, as the case may require, the parties hereto, and their respective successors and assigns,
subject to the restrictions upon assignment and subletting contained in the Lease.

	 	 	 	 	 	 	 
	WITNESS:	 	LANDLORD:

BRANDYWINE OPERATING PARTNERSHIP, L.P.
	 

	 	By:
	 	 	 	Brandywine Realty Trust,

its general partner
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	 	 	George D. Sowa, Senior Vice President
	 
	 	 	 	 	 	 
	 	 	TENANT:

QAD Inc., a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 	 	 	 	Name:
	 	 	 	 	Title:

36

 

EXHIBIT “C”

BUILDING RULES AND REGULATIONS

LAST REVISION: NOVEMBER 1, 2000

     Landlord reserves the right to rescind any of these rules and make such other and further
rules and regulations as in the judgment of Landlord shall from time to time be needed for the
safety, protection, care and cleanliness of the Project, the operations thereof, the preservation
of good order therein and the protection and comfort of its tenants, their agents, employees and
invitees, which rules when made and notice thereof given to Tenant shall be binding upon him in a
like manner as if originally prescribed. Landlord will notify Tenant in writing of any changes to
the Building Rules and Regulations.

	1.	 	Sidewalks, entrances, passages, elevators, vestibules, stairways, corridors, halls, lobby and
any other part of the Building shall not be obstructed or encumbered by any Tenant or used for
any purpose other than ingress or egress to and from each tenant’s premises. Landlord shall
have the right to control and operate the common portions of the Building and exterior
facilities furnished for common use of the tenants (such as the eating, smoking, and parking
areas) in such a manner as Landlord deems appropriate.

	2.	 	No awnings or other projections shall be attached to the outside walls of the Building
without the prior written consent of Landlord. All drapes, or window blinds, must be of a
quality, type and design, color and attached in a manner approved by Landlord.

	3.	 	No showcases or other articles shall be put in front of or affixed to any part of the
exterior of the Building, or placed in hallways or vestibules without prior written consent of
Landlord.

	4.	 	Rest rooms and other plumbing fixtures shall not be used for any purposes other than those
for which they were constructed and no debris, rubbish, rags or other substances shall be
thrown therein. Only standard toilet tissue may be flushed in commodes. All damage resulting
from any misuse of these fixtures shall be the responsibility of the Tenant who, or whose
employees, agents, visitors, clients, or licensees shall have caused same.

	5.	 	No tenant, without the prior consent of Landlord, shall mark, paint, drill into, bore, cut or
string wires or in any way deface any part of the Premises or the Building of which they form
a part except for the reasonable hanging of decorative or instructional materials on the walls
of the Premises.

	6.	 	Tenants shall not construct or maintain, use or operate in any part of the project any
electrical device, wiring or other apparatus in connection with a loud speaker system or other
sound/communication system which may be heard outside the Premises. Any such communication
system to be installed within the Premises shall require prior written approval of Landlord.

	7.	 	No mopeds, skateboards, scooters or other vehicles and no animals, birds or other pets of any
kind shall be brought into or kept in or about the Building.

	8.	 	No tenant shall cause or permit any unusual or objectionable odors to be produced upon or
permeate from its premises.

	9.	 	No space in the Building shall be used for the manufacture of goods for sale in the ordinary
course of business, or for sale at auction of merchandise, goods or property of any kind.

	10.	 	No tenant, or employees of Tenant, shall make any unseemly or disturbing noises or disturb or
interfere with the occupants of this or neighboring buildings or residences by voice, musical
instrument, radio, talking machines, whistling, singing, or in any way. All passage through
the Building’s hallways, elevators,

37

 

	 	 	and main lobby shall be conducted in a quiet,
business-like manner. Rollerblading shall not be permitted in the Building nor in the common
areas of the Project.

	11.	 	No tenant shall throw anything out of the doors, windows, or down corridors or stairs of the
Building.

	12.	 	Tenant shall not place, install or operate on the Premises or in any part of the Project, any
engine, stove or machinery or conduct mechanical operations or cook thereon or therein (except
for coffee machine, microwave oven, and/or vending machine), or place or use in or about the
Premises or Project any explosives, gasoline, kerosene oil, acids, caustics or any other
flammable, explosive, or hazardous material without prior written consent of Landlord.

	13.	 	No smoking is permitted in the rest rooms, hallways, elevators, stairs, lobby, exit and
entrances vestibules, sidewalks, parking lot area except for the designated exterior smoking
area. All cigarette ashes and butts are to be deposited in the containers provided for same,
and not disposed of on sidewalks, parking lot areas, or toilets within the Building rest
rooms.

	14.	 	Tenants are not to install any additional locks or bolts of any kind upon any door or window
of the Building without prior written consent of Landlord. Each tenant must, upon the
termination of tenancy, return to the Landlord all keys for the Premises, either furnished to
or otherwise procured by such tenant, and all security access cards to the Building.

	15.	 	All doors to hallways and corridors shall be kept closed during business hours except as they
may be used for ingress or egress.

	16.	 	Tenant shall not use the name of the Building, Landlord or Landlord’s Agent in any way in
connection with his business except as the address thereof. Landlord shall also have the
right to prohibit any advertising by Tenant, which, in its sole opinion, tends to impair the
reputation of the Building or its desirability as a building for offices, and upon written
notice from Landlord, Tenant shall refrain from or discontinue such advertising.

	17.	 	Tenants must be responsible for all Security Access cards issued to them, and to secure the
return of same from any employee terminating employment with them. Lost cards shall cost
$35.00 per card to replace. No person/company other than Building Tenants and/or their
employees may have Security Access cards unless Landlord grants prior written approval.

	18.	 	All deliveries by vendors, couriers, clients, employees or visitors to the Building which
involve the use of a hand cart, hand truck, or other heavy equipment or device must be made
via the Freight Elevator. Tenant shall be responsible to Landlord for any loss or damage
resulting from any deliveries made by or for Tenant to the Building. Tenant shall procure and
deliver a certificate of insurance from Tenant’s movers which certificate shall name Landlord
as an additional insured.

	19.	 	Landlord reserves the right to inspect all freight to be brought into the Building, and to
exclude from the Building all freight or other material which violates any of these rules and
regulations.

	20.	 	Tenant will refer all contractors, contractor’s representatives and installation technicians,
rendering any service on or to the premises for Tenant, to Landlord for Landlord’s approval
and supervision before performance of any contractual service or access to Building. This
provision shall apply to all work performed in the Building including installation of
telephones, telegraph equipment, electrical devices and attachments and installations of any
nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any other
physical portion of the Building. Landlord reserves right to require that all agents of
contractors/vendors sign in and out of the Building.

38

 

	21.	 	Landlord reserves the right to exclude from the Building at all times any person who is not
known or does not properly identify himself to Landlord’s management or security personnel.

	22.	 	Landlord may require, at its sole option, all persons entering the Building after 6 PM or
before 7 AM, Monday through Friday and at any time on Holidays, Saturdays and Sundays, to
register at the time they enter and at the time they leave the Building.

	23.	 	No space within the Building, or in the common areas such as the parking lot, may be used at
any time for the purpose of lodging, sleeping, or for any immoral or illegal purposes.

	24.	 	No employees or invitees of Tenant shall use the hallways, stairs, lobby, or other common
areas of the Building as lounging areas during “breaks” or during lunch periods.

	25.	 	No canvassing, soliciting or peddling is permitted in the Building or its common areas by
tenants, their employees, or other persons.

	26.	 	No mats, trash, or other objects shall be placed in the public corridors, hallways, stairs,
or other common areas of the Building.

	27.	 	Tenant must place all recyclable items of cans, bottles, plastic and office recyclable paper
in appropriate containers provided by Landlord in each tenant’s space. Removal of these
recyclable items will be by Landlord’s janitorial personnel.

	28.	 	Landlord does not maintain suite finishes which are non-standard, such as kitchens,
bathrooms, wallpaper, special lights, etc. However, should the need arise for repair of items
not maintained by Landlord, Landlord at its sole option, may arrange for the work to be done
at Tenant’s expense.

	29.	 	Drapes installed by Tenant, which are visible from the exterior of the Building, must be
cleaned by Tenant, at its own expense, at least once a year.

	30.	 	No pictures, signage, advertising, decals, banners, etc. are permitted to be placed in or on
windows in such a manner as they are visible from the exterior, without the prior written
consent of Landlord.

	31.	 	Tenant or Tenant’s employees are prohibited at any time from eating or drinking in hallways,
elevators, rest rooms, lobby or lobby vestibules.

	32.	 	Tenant shall be responsible to Landlord for any acts of vandalism performed in the Building
by its employees, agents, invitees or visitors.

	33.	 	No tenant shall permit the visit to its Premises of persons in such numbers or under such
conditions as to interfere with the use and enjoyment of the entrances, hallways, elevators,
lobby or other public portions or facilities of the Building and exterior common areas by
other tenants.

	34.	 	Landlord’s employees shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord. Requests for such requirements must
be submitted in writing to Landlord.

	35.	 	Tenant agrees that neither Tenant nor its agents, employees, licensees or invitees will
interfere in any manner with the installation and/or maintenance of the heating, air
conditioning and ventilation facilities and equipment.

39

 

	36.	 	Landlord will not be responsible for lost or stolen personal property, equipment, money or
jewelry from Tenant’s area or common areas of the Project regardless of whether such loss
occurs when area is locked against entry or not.

	37.	 	Landlord will not permit entrance to Tenant’s Premises by use of pass key controlled by
Landlord, to any person at any time without written permission of Tenant, except employees,
contractors or service personnel supervised or employed by Landlord.

	38.	 	Tenant and its agents, employees and invitees shall observe and comply with the driving and
parking signs and markers on the Building grounds and surrounding areas.

	39.	 	Tenant and its employees, invitees, agents, etc. shall not enter other separate tenants’
hallways, restrooms or premises unless they have received prior approval from Landlord’s
management.

	40.	 	Tenant shall not use or permit the use of any portion of the Premises for outdoor storage.

***********

40

 

EXHIBIT “D”

CLEANING SPECIFICATIONS

DAILY

Empty Trash and Recycle

Remove Spots/Spills from Carpet

Remove Visible Debris/Litter from Carpet

Spot Clean Desks and Tables

Straighten Chair – Furniture

Turn Off Lights

WEEKLY

Dust Desks and Computer Monitors

Vacuum Carpet

Clean Wastebaskets

Clean Light Fixtures and Vents

Clean Telephones

Clean Walls, Switch Plates and Baseboards

Dust File Cabinets, Partitions and Bookshelves

Clean Chairs

Clean Doors

Clean Tables

Dust Pictures and Surfaces Over 5’

Dust Window Sills, Ledges and Radiators

Spot Clean Side Light Glass

RESTROOM CLEANING SPECIFICIATIONS DAILY

Sinks

Floors

Counters

Trash Receptacle

Toilet/Urinals

Dispensers

Door

Spot Clean Walls

Spot Clean Partitions

WEEKLY

Dust Lights

Dust Surfaces Over 5’

Ceiling Vents

Clean Walls

Clean Partitions

FLOOR CARE SPECIFICATIONS

DAILY

Spot Clean Carpet

WEEKLY

Burnish Polished Surfaces

41

 

MONTHLY

Machine Scrub Restroom Floors

Scrub and Recoat Copy Room Floors

Scrub and Recoat Kitchenette Floors

ONCE EVERY FOUR MONTHS

Shampoo Conference Room Carpets

YEARLY

Strip and Refinish all vinyl tile

THESE SPECIFICATIONS ARE SUBJECT TO CHANGE WITHOUT NOTICE.

THE COST FOR ANY CLEANING OVER AND ABOVE THE STANDARD CLEANING SPECIFICATIONS IS TO BE BORNE BY THE TENANT.

42exv10w1

 

Exhibit 10.1

Fourth Amendment to the

I-SECTOR CORP. INCENTIVE PLAN

(As Amended and Restated Effective July 28, 2003)

WHEREAS, the I-Sector Corp. Incentive Plan as amended and restated effective July 28, 2003, (the
“Plan”) was adopted by the Board of Directors of INX Inc. and approved by shareholders on July 28,
2003; and

WHEREAS, under Section 7.7 of the Plan the Board has the authority to amend the Plan subject to
certain shareholder approval requirements; and

WHEREAS, the Board has authorized this Fourth Amendment of the Plan subject to stockholder approval
as provided herein.

NOW THEREFORE, the Plan is hereby amended as follows:

Section 1.4 shall be amended in its entirety to read as follows:

1.4 Shares of Common Stock Available for Incentive Awards

Subject to adjustment under Section 6.5, there shall be available for Incentive Awards that are
granted wholly or partly in Common Stock (including rights or Options that may be exercised for or
settled in Common Stock) 2,473,103 Shares of Common Stock. The total number of Shares reserved for
issuance under the Plan (pursuant to the previous sentence) shall be available for any one of the
following types of grants: Incentive Stock Options, Nonstatutory Stock Options, SAR, Restricted
Stock, a payment of a Performance Share in Shares, a payout of a Performance Unit in Shares, a
payout of an Other Stock-Based Award in Shares described in Section 5 which includes, without
limitation, Deferred Stock, purchase rights, shares of Common Stock awarded which are not subject
to any restrictions or conditions, convertible or exchangeable debentures, other rights convertible
into Shares, Incentive Awards valued by reference to the value of securities of or the performance
of a specified Subsidiary, division or department, and settlement in cancellation of rights of any
person with a vested interest in any other plan, fund, program or arrangement that is or was
sponsored, maintained or participated in by the Company or any Parent or Subsidiary. The number of
Shares of Common Stock that are the subject of Incentive Awards under this Plan, that are forfeited
or terminated, expire unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the Shares covered by an Incentive Award are not issued to a Grantee or are
exchanged for Incentive Awards that do not involve Common Stock, shall again immediately become
available for Incentive Awards hereunder. The Committee may from time to time adopt and observe
such procedures concerning the counting of Shares against the Plan maximum as it may deem
appropriate. The Board and the appropriate officers of the Company shall from time to time take
whatever actions are necessary to file any required documents with governmental authorities, stock
exchanges and transaction reporting systems to ensure that Shares are available for issuance
pursuant to Incentive Awards.

During any period that the Company is a Publicly Held Corporation, then unless and until the
Committee determines that a particular Incentive Award granted to a Covered Employee is not
intended to comply with the Performance-Based Exception, the following rules shall apply to grants
of Incentive Awards to Covered Employees:

     (a) Subject to adjustment as provided in Section 6.5, the maximum aggregate number of Shares
of Common Stock (including Stock Options, SARs, Restricted Stock, Performance Units and Performance
Shares paid out in Shares, or Other Stock-Based Awards paid out in Shares) that may be granted or
that may vest, as applicable, in any calendar year pursuant to any Incentive Award held by any
individual Employee shall be 2,473,103 Shares.

     (b) The maximum aggregate cash payout (including SARs, Performance Units and Performance
Shares paid out in cash, or Other Stock-Based Awards paid out in cash) with respect to Incentive
Awards granted in any calendar year which may be made to any individual Employee shall be Twenty
Million dollars ($20,000,000).

 

 

     (c) With respect to any Stock Option or Stock Appreciation Right granted to a Covered Employee
that is canceled or repriced, the number of Shares subject to such Stock Option or Stock
Appreciation Right shall continue to count against the maximum number of Shares that may be the
subject of Stock Options or Stock Appreciation Rights granted to such Employee hereunder to the
extent such is required in accordance with Section 162(m) of the Code.

     (d) The limitations of subsections (a), (b) and (c) above shall be construed and administered
so as to comply with the Performance-Based Exception.

The Plan as amended hereby is effective on April 28, 2006, subject to approval of the stockholders
of the Company within one year from April 28, 2006. Incentive Awards may be granted under the Plan
pursuant to this amendment prior to the receipt of such stockholder approval; provided however,
that if the requisite stockholder approval is not obtained then any such Incentive Awards granted
hereunder shall automatically become null and void and have no force and effect.

	 	 	 	 	 
	 	INX Inc.

 	 
	 	By:  	/s/ JAMES H. LONG
 	 
	 	 	James H. Long, Chairman of the Board 	 
	 	 	and Chief Executive Officer

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