Document:

Exhibit 10.38

 

THE
HANKIN GROUP

707 Eagleview Boulevard

Post Office Box 562, Exton,
PA 19341

 

Lease

 

LEASE MADE THIS 25th day of August, 2004
between 4 Fellowship Drive Associates, a Pennsylvania Partnership (“Landlord”),
with its office at 707 Eagleview Boulevard, P.O. Box 562, Exton, PA 19341.
 

 

AND

 

Longport
Inc.  (“Tenant”), a Delaware corporation with its
office at 740 South Chester Road, Suite A, Swarthmore, PA 19081.

 

1.                                      Leased
Space

 

Landlord hereby rents to Tenant all that
certain space (“Leased Space”) within the center (“Center”) known as Spring
Valley Business Park, Concordville, Concord Township, Delaware County,
Pennsylvania, 2 Braxton Way, Suite 111, as more fully shown on the plan
attached hereto as Exhibit ”A”, consisting of 7,277 rentable square feet,
more or less. The Leased Space includes all fixtures, improvements, additions
and other property installed therein at the Commencement Date, or at any time
during the term of this Lease (other than Tenant’s movable personal property
and trade fixtures), together with the right to use, in common with others, the
lobbies, entrances, loading dock, stairs, parking lot, elevators and other
public portions of the building in which the Leased Space is located (the “Building”).

 

The Leased Space shall be used and occupied as an office as well as for
(a) the receipt, repackaging and reshipment of ultrasound equipment, including
equipment related thereto and (b) the performance of quality assurance on
such equipment within the areas designed for same in the plan attached hereto
as Exhibit ”A”, and for no other purpose.

 

2.                                      Term

 

The term of this Lease and Tenant’s
obligation to pay rent hereunder shall commence upon the earlier of:

 

(i)  the date when the Leased Space is
ready for occupancy; or

 

(ii)  the date when Tenant shall take
possession of the Leased Space (“Commencement Date”).

 

The Leased Space shall be deemed ready for
occupancy when Landlord has substantially completed the work described in Exhibit ”B”
attached hereto and the approved “Tenant’s Drawings” (if any, as hereinafter
defined), such work to be completed by Landlord, at its sole
cost and expense, in a good and workmanlike manner and in accordance with all
applicable laws. “Substantial Completion” shall mean such completion as shall
enable Tenant to reasonably and conveniently use and occupy the Leased Space
for the conduct of its business. Substantial Completion shall be deemed to have
been achieved even though minor or insubstantial details of construction,
mechanical adjustment or decoration remain to be performed, the non-completion
of which does not materially interfere with Tenant’s use of the Leased Space or
the conduct of its business therein. The term (“Term”) of this Lease shall end 5
years after the Commencement Date; provided, however, that if the Commencement
Date is not the first day of the calendar month, the initial Lease Term shall
extend to

 

1

 

the last day of the calendar month 5 years after the
first calendar month following the Commencement Date.

 

3.                                      Rent

 

(a)                                  Definitions

 

(i) ”Tenant’s
Proportionate Share” shall mean (1) with respect to Real Estate Taxes, and
those Operating Expenses not described in clause (ii) below, including
without limitation, insurance premiums, common area janitorial costs, common
area electrical costs, common area natural gas costs, window washing,
extermination service, grounds maintenance, snow plowing, alarm monitoring (and
related telephone charges), plant care, and park common area charges (allocable
to the Building), 6.40%, being the ratio of Tenant’s rentable area (7,277
square feet) to the total amount of rentable area (113,702 square feet)
available in the Building, whether occupied or not, and (2) with respect
to janitorial costs for occupied usable areas, supplies, trash disposal, water
and sewer charges, maintenance and management fees, the ratio, expressed as a
percentage, of Tenant’s rentable area (7,277 square feet) to the weighted
average number of rentable square feet occupied by all tenants during the
applicable year.

 

(ii) ”Real
Estate Taxes” shall mean all taxes and assessments levied, assessed or imposed
at any time by any governmental authority upon or against the Building and the
land upon which the Building is situate, and also any tax or assessment levied,
assessed or imposed at any time by any governmental authority in connection
with the receipt of income or rents from said Building or land, net income and
excess profit taxes, only to the extent that the same shall be in lieu of (and/or
in lieu of an increase in) all or a portion of any of the aforesaid taxes or
assessments upon or against the said Building and/or land. There shall be
excluded from the term “Real Estate Taxes” all net excise, franchise, estate,
succession and inheritance taxes, penalties due to Landlord’s lateness or
failure to pay taxes when due and transfer taxes imposed on Lessor.

 

(iii) ”Operating
Expenses” shall mean that part of any and all expenses reasonably incurred by
Landlord in connection with its ownership, maintenance and operation of the
Building, the land upon which the Building is situate, excluding Real Estate
Taxes and interest or amortization payments on any mortgage, but including,
without limitation, electricity (other than as billed directly to tenants based
on usage), insurance maintained on the Building which, in Landlord’s judgment,
shall be necessary, all direct and indirect labor costs, management fees
(provided, however, that if management fees are paid to any affiliate of
Landlord, then the amount thereof to be included in Operating Expenses shall
not exceed such amount as is customarily charged for similar services rendered
to comparable buildings in the geographical market within which the Center is
located), legal and advertising expense, service contracts and supplies used in
connection with the cleaning, operating, labor and maintenance of the Building,
all repairs and decorating required to be performed by Landlord as provided for
in this Lease (other than “Landlord’s Work” as defined herein), common area
maintenance and snow removal, building supplies, equipment, purchases and
maintenance, all charges for the entire Building (including leaseable portions
as well as nonleaseable portions) for steam, oil, gas (or other fuel) and water
(including sewer rentals and including any taxes on such utilities) (unless
such steam, oil, gas, fuel and/or water is billed directly to tenants based on
usage), removal of trash, rubbish, garbage and refuse, the cost of operating or
leasing an identification sign or signs for the Building, repair and
maintenance of paving, curbs, walkways, maintenance, repair and replacement of
directions or other signs, drainage, maintenance of fire sprinkling systems (if
any), and such other expenses as Landlord may deem necessary and proper in
connection with the operation and maintenance of the Building, excluding any
costs which under generally accepted accounting principles are capital
expenditures; provided, however; that Operating Expenses shall also include the
annual amortization (over the anticipated useful life) of a capital improvement
falling within the following categories; (i) a labor saving device or
improvement which is intended to reduce or eliminate any other component of
Operating Expenses; (ii) an installation or improvement required by reason
of any law, ordinance or regulation, which requirement did not exist on the
date of this Lease and is generally applicable to similar office buildings; (iii) an
installation or improvement which directly enhances safety of tenants in the
Building or Center generally (collectively, “Included Capital Items”).

 

2

 

(iv)                              Notwithstanding the provisions of Section 3(a)(iii) above,
“Operating Expenses” shall not include expenditures for any of the following: (1) except
to the extent as expressly permitted under Section 3(a)(iii) above,
capital expenditures (as determined in accordance with (GAAP), including
without limitation any capital addition made to the Building other than
Included Capital Items, including the cost to prepare space for occupancy by a
new tenant; (2) any amounts paid by Landlord’s insurance, including
without limitation repairs or other work occasioned by fire, windstorm or other
insured casualty or hazard; (3) leasing commissions, advertising and other
expenses incurred in leasing or procuring new tenants, and expenses of
renovating space for tenants; (4) repairs or rebuilding necessitated by
condemnation to the extent that Landlord has received condemnation or similar proceeds
for such repairs or rebuilding; (5) depreciation and amortization of the Building (other than for Included
Capital Items); (6) Real Estate Taxes; (7) the salaries and benefits
of executive officers of Landlord, if any; (8) debt service payments on
any indebtedness applicable to the Center or Building, including any mortgage
debt, or ground rents payable under any ground lease for the Center or
Building; (9) any direct or indirect management fee or administrative fee
except for the management fee specifically referred to in Section 3(a)(iii) above;
(10) any charge for Landlord’s overhead or profit; (11) charges for any
repair of defects in construction covered by contractors’ warranties; (12) employee
benefits of maintenance personnel; (13) remediation of hazardous substances
required under applicable law and not caused by the act or omission of Tenant,
its agents and invitees; (14) expenses
related to off-site maintenance or managerial personnel or facilities; (15) any
advertising or marketing service organized by Landlord or other tenants of the
Center or Building; (16) any amount paid by another tenant other than such
tenants’ payment of their share of Operating Expenses; (17) damage awards or
settlement amounts paid by Landlord relating to claims against Landlord for the
negligence or intentional misconduct of Landlord, including, without
limitation, attorney’s fees and disbursements; (18) costs incurred by Landlord
due to violations by Landlord of the terms and conditions of any lease; (19)
costs incurred for any item to the extent of Landlord’s recovery under a
manufacturer’s, materialmen’s, vendor’s or contractor’s warranty, if any; (20)
costs of acquisition of sculpture, paintings or other objects of art; (21)
services provided to individual tenants of the Center or Building other than
Tenant; (22) costs incurred in constructing any new improvements to the Center
or Building, or in expanding, or constructing additions to or replacements of,
the Center or Building. In the event of any dispute as to whether an item
represents an expense or a capital item, GAAP shall be determinative and
binding on the parties.

 

(b)                                 Tenant shall pay Landlord the minimum annual
rent (“Minimum Annual Rent”) as listed below on the first day of each calendar month
in advance, the first full monthly installment to be paid at the signing of
this Lease. If the Commencement Date is not the first day of a calendar month,
rent from the Commencement Date to the first day of the following month shall
be apportioned at the Minimum Annual Rent rate for the initial year (based on a
365-day year) and shall be paid, in addition to the first full monthly
installment, on or before the Commencement Date. All rent shall be payable, in
advance, and without prior notice or demand, at the address of Landlord set
forth in the heading of this Lease or such other place, or to such other person
as Landlord may from time to time direct.

 

	
  Month/Years

  	
   

  	
  Minimum

  Annualized Rent

  	
   

  	
  Monthly

  Installment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Month 1

  	
   

  	
  $

  	
  00.00

  	
   

  	
  $

  	
  00.00

  	
   

  
	
  Months 2-12

  	
   

  	
  $

  	
  87,324.00

  	
   

  	
  $

  	
  7,277.00

  	
   

  
	
  Month 13

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  00.00

  	
   

  
	
  Months 14-24

  	
   

  	
  $

  	
  90,962.50

  	
   

  	
  $

  	
  7,580.21

  	
   

  
	
  Month 25

  	
   

  	
  $

  	
  00.00

  	
   

  	
  $

  	
  00.00

  	
   

  
	
  Months 26-36

  	
   

  	
  $

  	
  98,239.50

  	
   

  	
  $

  	
  8,186.63

  	
   

  
	
  Year 4

  	
   

  	
  $

  	
  109,155.00

  	
   

  	
  $

  	
  9,096.25

  	
   

  
	
  Year 5

  	
   

  	
  $

  	
  123,709.00

  	
   

  	
  $

  	
  10,309.08

  	
   

  

 

3

 

(c)                                  In addition, Tenant shall pay to Landlord as
Additional Rent in equal monthly installments one twelfth (1/12) of Tenant’s
Proportionate Share of annual Real Estate Taxes and Operating Expenses for the
Building, at the time of payment of each monthly installment of Minimum Annual
Rent, based upon the most recent costs of Operating Expenses and Real Estate
Taxes available. For the period from the Commencement Date until the issuance
of a statement pursuant to subparagraph 3(d) below, such monthly
installment shall be equal to $6.86 multiplied by 7,277 square feet, being the
Tenant’s rentable area, divided by 12.

 

(d)                                 Within ninety (90) days of the expiration of
each calendar year Landlord shall furnish Tenant with a written statement of
the actual Operating Expenses and Real Estate Taxes incurred for such year. Within ten (10) days of the
rendition of such statement, Tenant shall pay any amounts in excess of those
collected pursuant to the payments on account of Real Estate Taxes and
Operating Expenses pursuant to paragraph 3(c) exclusive of electricity and
natural gas billed separately pursuant to Paragraph 4(c) below hereof. In
the event the first and/or last years of the Term of this Lease shall not be
full calendar years, then Tenant’s obligation for Operating Expenses and Real
Estate Taxes attributable to such years shall be prorated. In the event the
total of the amounts paid by Tenant for such calendar year is in excess of the
actual Operating Expenses and Real Estate Taxes incurred for such year, Landlord shall promptly refund or
credit such excess to Tenant. If Landlord shall receive a refund of any portion
of the Real Estate Taxes for which Tenant has previously paid Tenant’s
Proportionate Share, Landlord shall credit against future payments due from Tenant for its Proportionate Share of Real Estate Taxes an amount equal
to Tenant’s Proportionate Share of the net refund received by Landlord after
deducting all costs and expenses (including, but not limited to, reasonable
attorneys’ and appraisers’ fees) expended or incurred in obtaining such refund.

 

4.              Additional Rent

 

Tenant shall pay to Landlord as “Additional Rent”
(in addition to sums payable)

 

(a)                                  Expenses Incurred by Landlord as a Result of Tenant’s Default. All sums which may become due by reason of
Tenant’s failure to comply (subject to applicable notice and cure periods) with
any of the terms, conditions and covenants of this Lease to be kept and
observed by Tenant, and any and all reasonable damages, costs and expenses
(including without limitation thereto reasonable attorney’s fees) which
Landlord actually suffers or incurs by reason of any default of Tenant (subject
to applicable notice and cure periods) and any damage to the Building or the
real estate of which the Building is a part caused by any act or omission of
Tenant, together with interest from the due date of such payment without regard
to any notice or cure periods to the date of payment (whether before or after entry of judgment and issuance of
execution thereon) at a rate equal to the greater of twelve (12%) percent or
five (5%) percent above the
prime interest rate (or similar rate if the prime interest rate is no longer
published) of Wachovia Bank or its successor, in effect during the period said
payment is due (“Default Rate”)

 

(b)                                 Use and Occupancy Taxes. All use and occupancy taxes imposed by any governmental
body allocable to the Leased Space 

 

(c)                                  Utilities.
All charges for heat, gas, water, electric or sewage disposal for the Leased
Space, whether billed directly by the providers of the same to Tenant, or by
Landlord as the owner of the Building, provided that if such charges are billed
by Landlord as the owner of the Building, then such charges shall not exceed
the charges charged to Landlord by the utility providers.

 

5.              Negative Covenants of Tenant

 

Tenant will not:

 

(a)                                  damage the Leased
Space or any other part of the Building;

 

(b)                                 bring into or permit
to be kept in the Leased Space any dangerous, explosive, or obnoxious
substances;

 

4

 

(c)                                  except in the ordinary course of Tenant’s
business, have property of substantial size or quantity
delivered to or removed from the Leased Space without first making arrangements
reasonably satisfactory to Landlord;

 

(d)                                 bring into the Leased Space or use any
furniture or equipment that might be harmful thereto or harmful or annoying to
others in the Building; 

 

(e)                                  conduct itself or permit its agents,
servants, employees or invitees to conduct themselves in a manner that in
Landlord’s judgment reasonably exercised is improper or unsafe;

 

(f)                                    manufacture any commodity or prepare or
dispense any food or beverages in the Leased Space, except for consumption in
Leased Space by Tenant, its employees or invitees; or

 

(g)                                 do or suffer to be done, any act, matter or
thing objectionable to the fire insurance companies or Board of Underwriters
whereby the fire insurance or any other insurance now in force or hereafter to
be placed on the Leased Space or the Building or Center shall become void or
suspended, or whereby the same shall be rated as a more hazardous risk than at
the Commencement Date. Tenant agrees to pay to Landlord as Additional Rent, any
and all increase in premiums for insurance carried by Landlord on the Leased
Space, or on the Building, caused in any way by the occupancy of Tenant.

 

6.              Late Payment

 

If any payment required by
Tenant under any of the terms hereof shall not be paid on the date it is due,
Tenant shall, upon demand, pay a late charge to Landlord equal to the greater
of (a) Fifty ($50.00) Dollars or (b) $.06 for each dollar so due and
such late charge shall be deemed Additional Rent for purposes of this Lease.
Notwithstanding the foregoing Landlord shall waive the late charges twice in
any twelve (12) month period if Tenant cures such non-payment within ten (10) days
after written notice from Landlord.

 

7.              Construction of Leased Space

 

Landlord shall, without cost
to Tenant, complete that portion of the construction and other items of work in
the Leased Space described as “Landlord’s Work” (as hereinafter defined) in Exhibit ”B”
attached hereto.

 

Tenant shall, without cost
to Landlord, furnish the drawings and specifications as Landlord may require to
complete the Landlord’s Work, (“Tenant’s Drawings”) and as may be described in Exhibit ”C”
attached hereto. If, at Tenant’s request and with Tenant’s prior written
approval, Landlord performs any items of work or furnishes any materials which
it is not required to perform or furnish hereunder, Tenant shall pay Landlord
for such additional work and materials, at such reasonable rates as Landlord
may charge. If Tenant’s Drawings have not been attached hereto upon execution
hereof, Tenant shall pay Landlord 1/360th of Minimum Annual
Rent and Additional Rent payable hereunder for each day of delay in delivering
Tenant Drawings beyond ten (10) business days from the date hereof. Such
Tenant Drawings when completed shall be initialed for identification by
Landlord and Tenant and be attached as Exhibit ”C” to this Lease when so
initialed.

 

Within thirty (30) days
after the Commencement Date, Tenant shall give Landlord a written list (the “Final
Punch List”) of all contended defects, if any, in Landlord’s construction work
and of all contended variances in Landlord’s Work from the requirements hereof.
Any and all such defects and variances not set forth in the Final Punch List
shall be conclusively deemed to be waived by Tenant. Landlord shall correct all
items on the Final Punch List that constitute valid defects or variances within
sixty (60) days after Landlord’s receipt of the Final Punch List, unless the
nature of the defect or variance is such that a longer period of time is
required to repair or correct the same, in which case Landlord shall exercise
due diligence in correcting such defect or variance at the earliest possible
date and with a minimum of interference with the operation of Tenant. Any
disagreement that may arise between Landlord and Tenant with respect to whether
an item on the Final Punch List constitutes a valid

 

5

 

defect or variance shall be conclusively resolved by
the decision of Landlord’s architect exercising reasonable discretion.  By occupying the Leased Space as a
Tenant, or by installing fixtures, facilities or equipment or by performing
finishing work, Tenant shall be conclusively deemed to have
accepted the same and to have acknowledged that the Leased Space is in the
condition required by this Lease, except as to any defects or variances set
forth in the Final Punch List.

 

8.              Tenant’s Alterations

 

Tenant shall make no
alteration, additions or improvement (“Tenant Improvements”) to the Leased
Space without the consent of the Landlord, which shall not be unreasonably
withheld, conditioned or delayed; provided, however, Tenant may make cosmetic
or decorative alterations to the Leased Space which do not affect the structure
or systems of the Building and are not visible outside the Leased Space without
the consent of Landlord.  If Landlord
consents to such Tenant Improvements it may impose such conditions with respect thereto as Landlord deems
reasonably appropriate, including, without limitation, requiring Tenant to
furnish Landlord with reasonable evidence of the availability of finds to pay
all cost to be incurred in connection with such work, insurance, and copies of
the plans, specifications and permits necessary for such work. Tenant
Improvements shall be done at Tenant’s expense by employees of or contractors hired
by Landlord, except to the extent that Landlord gives prior written consent to
the Tenant to hire its own contractors, which shall not be unreasonably
withheld, conditioned or delayed in connection with work not affecting the
structure or systems of the Building, Tenant shall promptly pay to Landlord, or
to Tenant’s contractors, as the case nay be, the cost of all such work, and
shall pay to Landlord in addition thereto Landlord’s standard hourly charges
for the involvement of employees or Landlord or its affiliate in reviewing
plans and inspecting the work to reimburse Landlord for all overhead, general
conditions, fees and other expenses arising from Landlord’s involvement with
such work. All Tenant Improvements shall be done in a first class, workmanlike
manner and shall comply with all insurance requirements and all applicable
laws, ordinances, rules and regulations of governmental authorities having
jurisdiction thereover, and if performed by Tenant’s contractors hired with
Landlord’s consent, with all reasonable requirements of Landlord imposed as a condition of such consent.

 

All Tenant Improvements
shall become a part of the Leased Space when made and shall remain upon and be
surrendered with the Leased Space at the end of the Term, provided, however, if
prior to the installation of a Tenant Improvement, Landlord so directs by
written notice to Tenant, that upon termination of this Lease, Tenant shall
promptly remove said Tenant Improvement which was so designated by Landlord in
said written notice to Tenant.  Tenant
shall repair any damage occasioned by such removal, and, in default thereof,
Landlord may effect said removal and repairs at Tenant’s expense.  Any property left in the Leased Space by the
Tenant shall be deemed to have been abandoned; Landlord may dispose of such
property at Tenant’s expense and without notice to Tenant.

 

9.              Mechanic’s Liens

 

Prior to Tenant performing
any construction or other work on or about the Leased Space for which a lien
could be filed against the Leased Space or the Building, Tenant shall enter
into a written waiver of liens agreement with the contractor who is to perform
such work, and such written agreement shall be filed, in accordance with the
Mechanics’ Lien Law of the state where the Building is located prior to the
commencement of such work. Notwithstanding the foregoing, if any mechanics’ or
other lien shall be filed against the Leased Space or the Building purporting
to be for labor or material furnished or to be furnished at the request of the
Tenant, then Landlord shall notify Tenant of such lien and Tenant shall have
thirty (30) days to contest (with Landlord’s reasonable cooperation) the
validity of such lien.  If Tenant is
unsuccessful in contesting the validity of such lien with in said thirty (30) day period then Tenant shall at its expense cause such lien to be discharged
of record by payment, bond or otherwise, within forty (40) days after the
filing thereof.

 

If Tenant shall fail to
cause such lien to be discharged by payment, bond or otherwise within such
period, Landlord may cause such lien to be discharged by payment, bond or
otherwise, without investigation as to the validity thereof or as to any
offsets or defenses thereto, and Tenant shall, upon demand, reimburse Landlord
for all reasonable amounts paid and cost incurred, including reasonable

 

6

 

attorneys’ fees, in having such lien discharged of
record.

 

10.       Condition of Leased Space; Compliance with Laws

 

(a)                                  Tenant acknowledges and agrees that, except
as expressly set forth in this Lease, there have been no representations or
warranties made by or on behalf of Landlord with respect to the Leased Space or
the Building or with respect to the suitability of either for the conduct of
Tenant’s business.  The taking possession
of the Leased Space by Tenant shall conclusively establish that the Leased
Space and the Building were at such time in satisfactory condition, order and
repair as required by Paragraph 2 hereof, subject to the provisions respecting
the Final Punch List in Paragraph 7 hereof.

 

(b)                                 Tenant, at its sole cost and expense, shall
comply with all laws, statutes, rules and regulations, now existing or
hereafter enacted which relate to Tenant’s particular use of the Leased Space.  Except as provided in the immediately
preceding sentence, Landlord shall comply with all laws, statutes, rules and
regulations, now existing or hereafter enacted which relate to the Center, the
Building, the common areas, and/or the land on which the Center, the Building
and/or common areas are situated.

 

11.       Building Services

 

Landlord shall provide,
during normal business hours, five (5) days a week, all heat, light, electricity, air conditioning, restroom
facilities and janitorial services, all as are commercially reasonable, and
provided Tenant is not in default under any of the provisions of this Lease.  It is understood that this is a “triple net”
lease, with rent paid to Landlord.  Notwithstanding
the foregoing, Tenant shall have access to the Leased Space on a 24 hours per
day, 7 days per week basis and Landlord shall provide heat, light, electricity,
air conditioning and restroom facilities during those hours, provided, however,
that Landlord shall not be obligated to provide maintenance services, including
without limitation, janitorial, repairs, and snow removal other than during normal
business hours.

 

Landlord shall not be liable
in damages or otherwise for temporary delay or failure in furnishing any
services or facilities to be provided by Landlord under this Lease or any other
agreement between Tenant and Landlord (or its agents) or implied by law.  In no event shall such delay or failure
regardless of cause, constitute an eviction, disturbance of Tenant’s use and
possession of the Leased Space, authorize abatement of rent, relieve Tenant
from performance of its obligations under this Lease, or result in termination
of this Lease.  Notwithstanding the
foregoing, if such failure or delay was not caused by any act or omission by
Tenant or its agents and invitees, lasts for more than five (5) consecutive days and Tenant is unable to use
all or substantially all of the Leased Space as a result of such failure or
delay, then Minimum Annual Rent and Additional Rent hereunder shall abate until
such time as Landlord restores such services or facilities to the level that
existed prior to the commencement of such delay or failure.

 

12.       Assignment and Subletting

 

Tenant shall not, without
the prior written consent of Landlord, not to be unreasonably withheld, conditioned
or delayed, assign or mortgage this Lease or any interest therein or sublet the
Leased Space or any part thereof.  For
the purpose of this paragraph, the sale or assignment of a controlling interest
in the Tenant corporation or a majority interest in the Tenant partnership as
the case may be shall be deemed an assignment, but the assignment to a parent
or wholly-owned subsidiary of the Tenant shall be permitted upon notice to
Landlord but without Landlord’s consent, provided that such assignee assumes
the obligations of Tenant and that such assignment shall not relieve Tenant of
its obligations hereunder.  As to any
other assignment, Landlord agrees that it shall not unreasonably withhold,
condition or delay its consent, provided that business of Tenant’s assignee or
subtenant is no more hazardous than that of Tenant, it being understood that it shall not be
unreasonable for Landlord to require, as a condition of such consent: 

 

(a)                                  That any money or other economic
consideration received by Tenant as a result of such subletting or assignment, whether denominated as rent under the
sublease or otherwise, which exceeds,

 

7

 

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 Leased Space subject to the sublease or
assignment) shall be payable to Landlord as Additional Rent under this Lease
without affecting or reducing any other obligation of Tenant hereunder; and

 

(b)                                 That Landlord shall not be obligated to
consent at any time when there exists comparable space available for lease in
the Center; and

 

(c)                                  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 rental 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.  Landlord shall not consent to subsequent
assignment or subletting of this Lease or amendments or modifications to this
Lease with assignees of Tenant, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto, such consent not to
be unreasonably withheld or delayed.

 

13.       Access to Leased Space

 

Landlord, its employees and
agents shall have the right to enter the Leased Space at all reasonable times
for the purpose of examining or inspecting the same, showing the same to
prospective purchasers or mortgagees, or, during the last two hundred seventy (270)
days of the Term hereof, to prospective tenants, of the Building and making
such alterations, repairs, improvements or additions to the Leased Space or to
the Building as Landlord may deem necessary or desirable or as are required
hereunder.  Except in case of emergency,
any such entry shall be after reasonable notice to Tenant.  Tenant shall provide Landlord with the names
and home phone numbers of at least three (3) of Tenant’s employees to be
utilized by Landlord in the event of an emergency.  If a representative of Tenant shall not be
present to open and permit entry into the Leased Space at any time when such
entry by Landlord is necessary or permitted hereunder, Landlord may enter by
means of a master key (or forcibly in the event of any emergency) without
liability to Tenant, except for the negligent acts or omissions of Landlord,
its employees, agents, representatives and contractors, and without such entry
constituting an eviction of Tenant or termination of this Lease.  No locks or similar devices shall be attached
to any doors or windows in the Leased Space without the prior written consent
of Landlord.

 

14.       Repairs

 

(a)                                  Landlord shall make (i) all structural
repairs and, at Landlord’s election, replacements, to the Center and Building, (ii) all
repairs and, at Landlord’s election, replacements, to the roof, exterior walls
and exterior windows and glass and to the common areas of the Center and
Building, (iii) all repairs and replacements necessary to maintain the
plumbing, air conditioning, heating, ventilation, electrical, sprinkler, and other
utility and mechanical systems, elevators, floors (excluding carpeting), and (iv) repairs
and, at Landlord’s election, replacements, to all other items which constitute
a part of the Leased Space and are installed or furnished by Landlord;
provided, however that Landlord shall not be obligated for any such repairs or
replacements until the expiration of a reasonable period of time after written
notice from Tenant that such repair is needed, but in no event longer than
thirty (30) days thereafter, or if such repairs or replacements are not capable
of being completed within such 30-day period, than within such additional
reasonable amount of time as is necessary, provided Landlord has commenced such
repairs or replacements during such 30-day period and
proceeds thereafter with due diligence to complete such repairs or
replacements.  In no event shall Landlord
be obligated to repair any damage caused by an act, omission or negligence of
the Tenant or its employees, agents, invitees, licensees, subtenants or
contractors.

 

(b)                                 Except as the Landlord is obligated for
repairs as provided above, Tenant shall make, at its sole cost and expense, all
repairs necessary to maintain the Leased Space and shall keep the Leased

 

8

 

Space and the fixtures therein in neat and orderly
condition.  If the Tenant refuses or
neglects to make such repairs, or fails to diligently prosecute the same to
completion, following expiration of a reasonable time after Tenant’s receipt of
written notice from Landlord of the need therefor, Landlord may make such
repairs at the expense of Tenant and the reasonable expense thereof shall be
collectible as Additional Rent.  Any such
repairs and any labor performed or materials furnished in, on or about the
Leased Space shall be performed and furnished by Tenant in strict compliance
with all applicable laws, regulations, ordinances and requirements of all duly
constituted authorities or governmental bodies having jurisdiction over the
Building, the requirements of any board of underwriters having jurisdiction
thereof, as well as any reasonable regulations imposed by Landlord pertaining
thereto.  Tenant agrees that prior to
performing any work which will become permanently affixed to the Leased Space,
Tenant shall provide Landlord with plans and specifications of its proposed
improvements for Landlord’s review and, if acceptable, its approval, which
shall not be unreasonably withheld, conditioned or delayed.  Tenant shall reimburse Landlord for Landlord’s
cost in reviewing said plans and specifications at the rate of $70 per hour.

 

(c)                                  Landlord shall not be liable by reason of any
injury to or interference with Tenant’s business arising from the making of any
repairs, alterations, additions or improvements in or to the Leased Space, or
the Building or Center or to any appurtenances or equipment therein.  Notwithstanding the foregoing, Landlord shall
make reasonable efforts to avoid unnecessary interference to Tenant’s
operations in performing such repairs, alterations, additions or improvements,
but such efforts shall not require Landlord to perform work outside normal
business hours.

 

15.       Termination and Extension

 

It is hereby mutually agreed
that this Lease shall terminate at the end of the Term without notice.

 

16.       Surrender of Leased Space

 

At the end of the Term of
this Lease, Tenant shall surrender the Leased Space to Landlord, together with
all alterations, additions and improvements thereto, in broom clean condition
and in good order and repair except for ordinary wear and tear and damage for
which Tenant is not obligated to make repairs under this Lease, and damage from
casualty or condemnation.  Subject to
Paragraph 9 hereof and if Tenant is not then in default under any of the terms
hereof, Tenant shall have the right at the end of the Term hereof to remove any
equipment, furniture, trade fixtures or other personal property placed in the
Leased Space by Tenant, provided that Tenant promptly repairs any damage to the
Leased Space caused by such removal.  Tenant shall repair all damage to the Leased
Space caused by such removal and restore the Leased Space to the condition in
which it was prior to the installation of the items so removed.  Tenant shall surrender the Leased Space to
Landlord at the end of the Term hereof, without notice of any kind, and Tenant
waives all right to any such notice as may be provided under any laws now or
hereafter in effect in Pennsylvania.  If
Tenant shall fail to remove any of its equipment, furniture, trade fixtures or
other personal property, Landlord may remove and store the same at the expense
of Tenant or sell the same on behalf of Tenant at public or private sale in
such manner as is commercially reasonable, with any proceeds thereof to be
first applied to the reasonable costs and expenses, including reasonable
attorney’s fees, of the storage and sale and the payment of any amounts owed
hereunder by the Tenant.

 

17.       Indemnification and Insurance

 

(a)                                  Tenant covenants and agrees that it shall,
without notice or demand and at its own cost and expense, indemnify and save
harmless Landlord against and from, and Landlord not be liable to Tenant for,
any and all claims by or on behalf of any person arising in any manner
whatsoever from, out of or in connection with

 

(i)                                     the use and occupancy of the Leased Space by
Tenant, its agents, employees and invitees,

 

(ii)                                  any failure by Tenant to perform any of the
terms or conditions of this Lease

 

9

 

required to be performed by Tenant,

 

(iii)                               any failure by Tenant to comply with any
statutes, regulations, ordinances or orders of any governmental authority, or

 

(iv)                              any accident, death, injury, or damage, loss
or theft of property in or about the Leased Space (whether involving
property belonging to Tenant or any other person) resulting from any cause
whatsoever, except to the extent such accident, death, injury, damage, loss or
theft is caused by the negligent act or omission of the Landlord, its agents,
employees, contractors or invitees, and from and against all reasonable costs,
reasonable attorney fees, expenses and liabilities incurred in or as a result
of any such claim or action or proceeding brought against Landlord by reason of
any such claim. Tenant, upon notice from Landlord covenants to resist or defend
such action or proceeding by legal counsel reasonably satisfactory to Landlord.

 

This provision of this Section 17(a) shall
survive expiration or earlier termination of this Lease.

 

(b)                                 Tenant shall keep in force during the Term
hereof public liability insurance with respect to the Leased Space, including
contractual insurance with respect to the covenants and agreements above, with
companies with at least a Best rating of A10 and in form reasonably acceptable
to the Landlord to afford protection of not less than One Million ($1,000,000)
Dollars with respect to personal injury or death and property damage, and
naming the Landlord as an additional insured and providing thirty (30) days’
notice of cancellation.  Certificates of
Insurance for such policies shall be delivered to Landlord.

 

(c)                                  Landlord covenants and agrees that it shall,
without notice or demand and at its own cost and expense, indemnify and save
harmless Tenant against and from, and Tenant not be liable to Landlord for, any
and all claims by or on behalf of any person arising in any manner whatsoever
from, out of or in connection with

 

(i)                                     any work, including, without limitation, the
Landlord’s Work, done, in, on or about the Leased Space, the Center, the Building,
or the common areas of the Building or the Center, or any part of any of the
foregoing, at the direction of or caused by Landlord, its employees, agents,
representatives, contractors,

 

(ii)                                  any failure by Landlord to perform any of the
terms or conditions of this Lease required to be performed by Landlord,

 

(iii)                               any failure by Landlord to comply with any
statutes, regulations, ordinances or orders of any governmental authority which
relate to the Center, the Building, the common areas of the Building or the
Center, or any part of any of the foregoing, or

 

(iv)                              any accident, death, injury, or damage, loss
or theft of property in or about the Leased Space, the Building, or the Center
(whether involving property belonging to Tenant or any other person) resulting
from any cause whatsoever, to the extent such accident, death, injury, damage,
loss or theft is caused by the negligent act or omission of the Tenant, its
agents, employees, contractors or invitees, and from and against all reasonable
costs, reasonable attorney fees, expenses and liabilities incurred by Tenant in
or as a result of any such claim or action or proceeding brought against Tenant
by reason of any such claim.  Landlord,
upon notice from Tenant covenants to resist or defend such action or proceeding
by legal counsel reasonably satisfactory to Tenant.

 

This provision of this Section 17(c) shall
survive expiration or earlier termination of this Lease.

 

(d)                                 Landlord shall keep in force during the Term
hereof the following types and amounts of insurance with an insurer with at
least a Best rating of A10: (1) insurance on the Building against loss or damage by fire or other casualty with
endorsements providing what is commonly known as all risk fire and extended
coverage, vandalism and malicious mischief insurance, including loss of rental
coverage, in an amount equal to one hundred percent (100%) of the replacement
cost thereof with such deductible

 

10

 

as Landlord from time to time may determine in a commercially
reasonable manner; and (2) commercial general liability insurance in the
minimum amount of one million dollars ($1,000,000.00) per occurrence and two
million dollars ($2,000,000.00) general aggregate, with such deductible as
Landlord from time to time may determine in a commercially reasonable manner.  The commercial general liability insurance
policy shall provide coverage which will pay all sums any named and/or
additional insured shall be legally liable to pay as damages due to bodily
injury (including death) or property damage.  Landlord’s insurance required hereunder shall
not cover any property with respect to which Tenant or other tenants are
obliged to insure. Landlord shall have the right to insure and maintain the
insurance coverages set forth herein under blanket insurance policies covering
other properties owned, leased or operated by Landlord or its affiliates,
provided the insurance requirements in this Lease are fulfilled and the
insurance coverage required hereunder is not diminished in any way.

 

(e)                                  As to any loss or damage which may occur upon
the property of a party hereto, such party hereby releases the other, to the
extent of such damaged party’s insurance indemnities, from any and all
liability for such loss or damage even if such loss or damage shall be brought
about by the fault or negligence of such other party, or the agent or employees
of such other party; provided, however, that this release shall be effective
only with respect to loss or damage occurring during such time as the
applicable policies of insurance shall contain a clause to the effect that this
release shall not affect said policies or the right of the insured to recover
thereunder. If any policy does not contain such a clause, the insured party
shall, at the written request of the other party to this Lease, have such a
clause added to said policy if an endorsement so providing is obtainable.

 

18.       Fire or Other Casualty

 

(a)                                  If the Leased Space or the Building is
partially damaged by fire or other casualty, and insurance proceeds are
available to Landlord, the damages shall be repaired by and at the expense of
Landlord and the rent, until such repairs shall be made, shall be apportioned
and abated from the date of such fire or other casualty according to the part of
the Leased Space which is usable by Tenant, in its reasonable judgment, for the
purposes contemplated herein, until the date on which Landlord completes the
repairs of such damage. Landlord agrees to repair such damage, including the
Landlord’s Work, within a reasonable period of time after receipt from Tenant
of written notice of such damage, except that Tenant agrees to repair and
replace its own furniture, furnishings and equipment; provided, however, that
if Landlord has not completed such repairs within nine (9) months after
the date of the fire or other casualty which has rendered all or substantially
all of the Leased Space untenantable, then Tenant may terminate this Lease upon
written notice to Landlord delivered prior to the expiration of such nine (9) month
period.

 

(b)                                 If the Leased Space is totally damaged or is
rendered wholly untenantable by fire or other casualty and if Landlord shall
decide not to restore or not to rebuild the same, or if the Building shall be
so damaged that Landlord shall decide to demolish it or not to rebuild it, then
or in any such event Landlord shall, within thirty (30) days after such fire or
other casualty, give Tenant written notice of such decision, and thereupon the
Term of this Lease shall expire by lapse of time upon the third (3rd) day after such notice is given, and Tenant
shall vacate the Leased Space and surrender the same to Landlord in accordance
with the terms hereof. Upon the termination of this Lease under the conditions
hereinbefore provided, Tenant shall have no liability for Minimun Annual Rent,
and Additional Rent accruing after the day of the casualty. If Landlord elects
to restore or rebuild the Leased Space or the Building in the event of a fire
or other casualty under this Section 18(b), then Landlord agrees to
perform such restoration or rebuilding, including the Landlord’s Work, within a reasonable period of time after the date of such fire or other
casualty, except that Tenant agrees to repair and replace its own furniture,
furnishings and equipment; provided, however, that if Landlord has not
completed such restoration or rebuilding within nine (9) months after the
date of the fire or other casualty, then Tenant may terminate this Lease upon
written notice to Landlord delivered prior to the expiration of the nine (9) month
period.

 

11

 

19.       Condemnation

 

If the Leased Space or the
Building or any material part of either shall be condemned for public use, then
and in that event, upon the vesting of title to the same for such public use,
this Lease shall terminate, anything herein contained to the contrary
notwithstanding, except that Tenant shall have the right to prove and collect
the value of the trade fixtures installed by it, including moving expenses.  In the event of such termination of this
Lease, all rent paid in advance shall be apportioned as of the date of such
termination.  Notwithstanding the
foregoing, if only a part of the Leased Space shall be so taken and the part
not so taken shall be sufficient for the operation of Tenant’s business, in
Tenant’s reasonable judgment, Tenant, at its election, may retain the part not
so taken and there shall be a proportional reduction in the rent.  All compensation awarded or paid upon such a
total or partial taking of the Leased Space shall belong to and be the property
of the Landlord without any participation by the Tenant, provided, however,
that nothing contained herein shall be construed to preclude the Tenant form
prosecuting any claim directly against the condemning authority in such
condemnation proceedings for loss of business, or depreciation to, damage to,
or cost of removal of, or for the value of stock, trade fixtures, furniture,
and other personal property belonging to the Tenant; provided, however, that no
such claim shall diminish or otherwise adversely affect the Landlord’s award or
the award of any mortgagee.

 

20.       Estoppel Certificates

 

At any time, and from time
to time, upon the written request of Landlord or any “Mortgagee” (as defined in
section 29 hereof), Tenant, within ten (10) business days of the date
of such written request, agrees to execute and deliver to Landlord and/or such
Mortgagee, a written statement: (a) ratifying this Lease; (b) confirming
the commencement and expiration dates of the Term of this Lease; (c) certifying
that Tenant is in occupancy of the Leased Space, and that the Lease is in full
force and effect and has not been modified, assigned, supplemented or amended
except by such writings as shall be stated; (d) certifying that all
conditions and agreements under this Lease to be satisfied or performed by
Landlord have been satisfied and performed except as shall be stated; (e) certifying
that Landlord is not in default under the Lease and there are no defenses or
offsets against the enforcement of this Lease by Landlord, or stating the
defaults and/or defenses claimed by Tenant; (f) reciting the amount of
advance rent, if any paid by Tenant and the date to which such rent has been
paid; (g) reciting the amount of security deposited
with Landlord, if any; and (h) any other information which Landlord or the
Mortgagee shall reasonably require.  The
failure of Tenant, after signed receipt, to execute, acknowledge and deliver to
Landlord and/or any Mortgagee a statement in accordance with the provisions
herein within the period set forth herein shall constitute an acknowledgment by
Tenant which may be relied upon by any person holding or intending to acquire
any interest whatsoever in the Leased Space or the Building that this Lease has
not been assigned, amended, changed or modified, is in full force and effect
and that the Minimum Annual Rent, and Additional Rent have been duly and fully
paid not beyond the respective due dates immediately preceding the date of the
request for such statement and shall constitute as to any persons entitled to
rely on such statements a waiver of any defaults by Landlord or defenses or
offsets against the enforcement of this Lease by Landlord which may exist prior
to the date of the written request, and Landlord, at its option, may treat such
failure as an event of default.

 

21.       Default

 

The occurrence of any of the
following shall constitute an event of default and breach of this Lease by
Tenant:

 

(a)                                  Failure of Tenant to take possession of the
Leased space within ten (10) days after the Commencement Date.

 

(b)                                 The vacation or abandonment of the Leased
Space by Tenant.

 

(c)                                  A failure by Tenant to pay, when due, any
installment of rent hereunder or any such other sum herein required to be paid
by Tenant where such failure continues for ten (10) days after Tenant’s
receipt of written notice from Landlord.

 

12

 

(d)                                 A failure by Tenant to observe and perform any
other terms or conditions of this Lease to be observed or performed by Tenant,
where such failure continues for thirty (30) days after Tenant’s receipt of
written notice thereof from Landlord to Tenant.

 

(e)                                  The making by Tenant of any assignment for
the benefit of creditors; an adjudication that Tenant is bankrupt, insolvent,
or unable to pay its debts; the filing by or against Tenant of a petition in
bankruptcy or of a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days after the filing thereof); the
appointment of a trustee or receiver to take possession of substantially all of
Tenant’s assets located in the Leased Space or of Tenant’s interest in this
Lease (unless possession is restored to Tenant within thirty (30) days after
such appointment); or the attachment, execution or levy against, or other
judicial seizure of, substantially all of Tenant’s assets located in the Leased
Space or of Tenant’s interest in this Lease (unless the same is discharged
within thirty (30) days after issuance thereof).

 

22.       Remedies

 

Upon the occurrence of any event of default:

 

(a)                                  Landlord may perform for the account of
Tenant any such act, the omission of which constituted a default by Tenant and
immediately recover as Additional Rent any expenditures reasonably made and the
amount of any obligations reasonably incurred in connection therewith, plus
interest at the Default Rate from the date the obligations are incurred by
Landlord until payment therefor to Landlord, whether before or after entry of judgment
and issuance of execution thereon.

 

(b)                                 Landlord may accelerate all Minimum Annual
Rent and Additional Rent due for the balance of the Term of this Lease and
declare the same to be immediately due and payable, provided, however, that the
amounts described in this Section 22(b) are paid by Tenant within
thirty (30) days of demand, they shall be discounted to present value (as of
the date of receipt) at the rate of Five Percent (5%);

 

(c)                                  In determining the amount of any future
payments due Landlord relating to Operating Expenses and/or Real Estate Taxes, Landlord may make such determination based upon the
most recent estimates of Operating Expenses and/or Real Estate Taxes available;

 

(d)                                 Landlord, at its option, may serve notice upon Tenant that this Lease and the then unexpired Term hereof shall cease
and expire and become absolutely void on the date specified in such notice, to
be not less than ten (10) days after the date of such notice without any
right on the part of the Tenant to save the forfeiture by payment of any sum
due or by the performance of any term or condition broken; and, thereupon at
the expiration of the time limit in such notice, this Lease and the Term hereof,
as well as the right, title and interest of the Tenant hereunder, shall wholly
cease and expire and become void in the same manner and with the same force and
effect (except as to Tenant’s liability) as if the date fixed in such notice
were the date herein granted for expiration of the Term of this Lease.
Thereupon, Tenant shall immediately quit and surrender to Landlord the Leased
Space, and Landlord may enter into and repossess the Leased Space by summary
proceedings, detainer, ejectment or other lawful means and remove all occupants
thereof and, at Landlord’s option, any property thereon without being liable to
indictment, prosecution or damages therefor. No such expiration or termination
of this Lease shall relieve Tenant of its liability and obligations under this
Lease, whether or not the Leased Space shall be relet;

 

(e)                                  Landlord may, at any time after the
occurrence of any event of default, re-enter and repossess the Leased Space and
any part thereof and attempt in its own name, as agent for Tenant if this Lease
not be terminated, or on its own behalf if this Lease be terminated, to relet
all or any part of the Leased Space for and upon such terms and to such persons
and for such period or periods as Landlord, in its sole discretion, shall
determine, including a term beyond the termination of this Lease; and Landlord
shall not be required to accept any tenant offered by Tenant or observe any
instruction given by Tenant about such reletting. For the purpose of such
reletting, Landlord may decorate or make

 

13

 

repairs, changes, alterations or additions in or to
the Leased Space to the extent deemed by Landlord desirable or convenient; and
the reasonable cost of such decoration, repairs, changes, alteration or
additions shall be charged to and be payable by Tenant as Additional Rent
hereunder, as well as any reasonable brokerage and attorneys fees incurred by
Landlord; and any sums collected by Landlord from any new tenant obtained shall
be credited against the balance of the rent due hereunder as aforesaid. Tenant
shall pay to Landlord monthly, on the days when the rent would have been
payable under this Lease, the amount due hereunder less the amount obtained by
Landlord from such new tenant;

 

(f)                                    Landlord shall have the right of injunction,
in the event of a breach or threatened breach by Tenant of any of the terms and
conditions hereof, to restrain the same and the right to invoke any remedy
allowed by law or in equity, whether or
not other remedies indemnities or reimbursements are herein provided. The
rights and remedies given to Landlord in this Lease are distinct, separate and
cumulative remedies; and no one of them, whether or not exercised by Landlord,
shall be deemed to be in exclusion of any of the others.

 

23.       Confession of Judgment 

 

IN THE EVENT OF ANY DEFAULT, TENANT HEREBY AUTHORIZES AND EMPOWERS ANY
PROTHONOTARY OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR TENANT IN ANY AND
ALL ACTIONS FOR RENT IN ARREARS OR TREATED AS IF IN ARREARS AND CHARGES,
WHETHER OR NOT PAYABLE AS RENT, AND TO CONFESS JUDGMENT AGAINST TENANT FOR ALL
ARREARS OR SUCH SUMS TREATED AS IF IN ARREARS AND THE SAID CHARGES, AND FOR
INTEREST AND COSTS, TOGETHER WITH AN ATTORNEY’S COMMISSION OF TEN PERCENT (10%)
OF THE AGGREGATE OF THE FOREGOING SUMS AND CHARGES.  SUCH AUTHORITY SHALL NOT BE EXHAUSTED BY ONE
EXERCISE THEREOF, BUT JUDGMENT MAY BE CONFESSED FROM TIME TO TIME AS OFTEN
AS ANY RENT IN ARREARS OR RENT TREATED AS IF IN ARREARS OR CHARGES FALL DUE AND
ARE NOT PAID. SUCH POWERS MAY BE EXERCISED DURING AS WELL AS AFTER THE EXPIRATION
OR TERMINATION OF THE TERM AND DURING, AND AT ANY TIME, AFTER ANY EXTENSION OR
RENEWAL OF THE TERM.

 

WHEN THIS LEASE SHALL BE TERMINATED BY COVENANT OR CONDITION BROKEN,
EITHER DURING THE ORIGINAL TERM OR ANY RENEWALS OR EXTENSIONS THEREOF, AND ALSO
WHEN AND AFTER THE TERM HEREBY CREATED OR, ANY RENEWAL OR EXTENSION THEREOF
SHALL HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANY ATTORNEY OF ANY COURT OF RECORD
AS ATTORNEY FOR TENANT TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT AND ALL
PERSONS CLAIMING UNDER TENANT, AND A JUDGMENT FOR THE RECOVERY BY LANDLORD OF
POSSESSION MAY ISSUE FORTHWITH WITHOUT ANY PRIOR WRIT OR PROCEEDINGS
WHATSOEVER. IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED, IT
SHALL BE CANCELED OR SUSPENDED AND POSSESSION OF THE LEASED SPACE REMAINS IN OR
IS RESTORED TO TENANT, LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT
DEFAULT OR TERMINATION OF THIS LEASE, OR ANY RENEWAL OR EXTENSION HEREOF, TO
BRING ONE OR MORE ACTIONS IN CONFESSION OF JUDGMENT FOR EJECTMENT AS
HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE LEASED SPACE. IF IN ANY
ACTION TO CONFESS JUDGMENT IN EJECTMENT, LANDLORD SHALL CAUSE TO BE FILED IN SUCH
ACTION AN AFFIDAVIT SETTING

 

14

 

FORTH THE FACTS
NECESSARY TO AUTHORIZE THE ENTRY OF JUDGMENT AND IF A TRUE COPY OF THIS LEASE
(AND THE TRUTH OF THE COPY STATED IN SUCH AFFIDAVIT SHALL BE SUFFICIENT PROOF)
BE FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL AS A
WARRANT OF ATTORNEY, ANY LAW, RULE OF COURT,
CUSTOM OR PRACTICE TO THE CONTRARY NOTWITHSTANDING. TENANT EXPRESSLY RELEASES
TO LANDLORD, AND TO ANY AND ALL
ATTORNEYS WHO MAY APPEAR
FOR TENANT, ALL
ERRORS IN THE SAID PROCEEDINGS, AND ALL LIABILITY THEREFOR.
TENANT EXPRESSLY WAIVES THE BENEFIT OF ALL LAWS, NOW OR HEREAFTER IN FORCE,
EXEMPTING ANY
GOODS WITHIN THE LEASED SPACE OR
ELSEWHERE FROM DISTRAINT, LEVY OR SALE.

 

24.       Waiver

 

The failure or delay on the part of Landlord to enforce or exercise at any time any of the terms and conditions of this Lease shall in no way be construed to be a waiver thereof, nor
in any way to affect the validity of this Lease or any part hereof, or the
right of Landlord to thereafter enforce each and every such term or condition.
No waiver by Landlord of any breach of this Lease shall be held to be a waiver
of any other or subsequent breach. The receipt by Landlord of rent at a time
when the rent is in default under this Lease shall not be construed as a waiver
of such default. The receipt by Landlord of a lesser amount than the rent due
shall not be construed to be other than a payment on account of the rent then
due, nor shall any statement on Tenant’s check or any letter accompanying
Tenant’s check be deemed an accord and satisfaction, and Landlord may accept such payment without prejudice to Landlord’s right
to recover the balance of the rent due or to pursue any other remedies provided
in this Lease. No act or thing done by this Lease shall be deemed any acceptance
or a surrender of the Leased Space, and no agreement to accept such a surrender
shall be valid unless in writing and signed by Landlord.

 

25.       Quiet Enjoyment

 

If and so long as Tenant
pays the rent reserved hereunder and observes and performs all the terms and
conditions on Tenant’s part to be observed and performed hereunder, Tenant
shall and may peaceably and quietly have, hold and enjoy the Leased Space for
the entire Term hereof without hindrance or obstruction by Landlord or any
other person claiming by, through or under Landlord, subject to all of the
provisions of this Lease.

 

26.       Force Majeure

 

Time periods for either
party’s performance of its respective obligations under any of the term of this
Lease shall be extended for periods of time during which such party’s
performance is prevented due to circumstances beyond such party’s reasonable
control, including without limitation, strikes, embargoes and governmental
regulations, acts of God, war or other strife or delays in construction of the
Leased Space, but in no event shall the provisions of this Section extend
the times for payment of Rent by Tenant when due under this Lease.

 

27.       Successors 

 

The respective rights and
obligations provided in this Lease shall bind and shall inure to the parties
hereto, and their successors and permitted assigns.

 

28.       Landlord’s Liability

 

Landlord’s responsibility
under this Lease shall be limited to its interest in the Leased Space and in
the Building, and no members of Landlord’s partnership shall be personally
liable hereunder.  Tenant agrees to look
solely to Landlord’s interest in the Leased Space and in the Building for the
collection of any judgment, and, in entering any such judgment, the person entering
the same shall request the

 

15

 

prothonotary to mark the judgment index accordingly.
If the Leased Space or the Building is transferred or conveyed, Landlord shall
be relieved of all covenants and obligations under this Lease thereafter,
provided that notice of said transfer or conveyance is given to Tenant by
Landlord.

 

29.       Subordination

 

Tenant agrees; (a) that,
except as hereinafter provided, this Lease is, and all of Tenant’s rights
hereunder are and shall always be, subject and subordinate to any mortgage,
leases of Landlord’s property (in sale-leaseback) pursuant to which Landlord
has or shall retain the right of possession of the Leased Space (and/or the
Building) or security instruments (collectively called “Mortgage”) that now
exist, or may hereafter be placed upon the Leased Space or the Building, or any
part thereof and all advances made or to be made thereunder and extensions thereof; and (b) that
if the holder of any such Mortgage (“Mortgagee”) or if the purchaser at any
foreclosure sale or at any sale under
a power of sale contained in any
Mortgage shall at its sole option so request, Tenant will, attorn to, and
recognize such Mortgagee or purchaser, as the case may be, as Landlord under this Lease for the balance then remaining of the term of this Lease, subject to all terms of this
Lease; and (c) that the
aforesaid provisions shall be self-operative and no further instrument or
document shall be necessary unless required by any such Mortgagee or purchaser.
Notwithstanding anything to the contrary set forth above, any Mortgagee may at
any time subordinate its Mortgage to this Lease, without Tenant’s consent, by
execution of a written document subordinating such Mortgage to this Lease to
the extent set forth therein, and thereupon this Lease shall be deemed prior to
such Mortgage to the extent set forth in such written document without regard
to their respective dates of execution, delivery and/or recording and in that
event, to the extent set forth in such written document such Mortgagee shall have
the same rights with respect to this Lease as though this Lease had been
executed and a memorandum thereof recorded prior to the execution, delivery and
recording of the Mortgage as though this Lease had been assigned to such Mortgagee.
Should Landlord or any Mortgagee or purchaser desire confirmation of either
such subordination or such attornment, as the case may be, Tenant upon written
request, and from time to time, will execute and deliver without charge and in
form satisfactory to Landlord, to the Mortgagee or the purchaser all
instruments and/or documents that may be reasonably required to acknowledge
such subordination and/or
agreement to attorn, in recordable form within five (5) days following a
request therefor from Landlord. Tenant shall agree to any reasonable changes to
this Lease as may be required by a Mortgagee, which changes do not materially
alter the non-economic terms, or alter in
any way the economic terms, of this Lease. Notwithstanding the foregoing,
Landlord shall request from Landlord’s Mortgagee a non-disturbance instrument
in favor of Tenant.

 

30.       Intentionally Deleted.

 

31.       Rules and Regulations

 

Tenant agrees to comply with
the reasonable rules and regulations established by Landlord for time to
time, which Landlord agrees will be applied uniformly to all tenants. The
existing rules and regulations are attached hereto as Exhibit ”D”.

 

32.       Governing Laws

 

This Lease shall be governed
by and construed in accordance with
the laws of the state in which the Building is located.

 

33.       Severability

 

If any provisions of this
Lease shall prove to be invalid, void or illegal, it shall in no way affect any
other provision hereof and the remaining provisions shall nevertheless remain
in full force and

 

16

 

effect.

 

34.       Holding Over

 

If Tenant shall, with the
consent of Landlord, hold over after the expiration of the Term hereof, such
tenancy shall be deemed a month-to-month tenancy, which tenancy may be
terminated as provided by applicable state law. During such tenancy, Tenant
agrees to pay to Landlord monthly rent equal to one hundred fifty percent (150%) of the monthly rent payable
for the last month of the Term of this Lease, and to be bound by all the terms
and conditions herein. 

 

35.       Notices

 

All notices and statements required or permitted
under this Lease shall be in writing, delivered in person or sent by United
States Certified Mail, postage prepaid, return receipt requested, by Federal
Express or other recognized overnight courier service, charges prepaid, or by
hand delivery, addressed as follows: 

 

	
  As to Tenant:

  	
   

  	
  Longport, Inc.

  
	
   

  	
   

  	
  Spring Valley Business Park

  
	
   

  	
   

  	
  2 Braxton Way, Suite 111

  
	
   

  	
   

  	
  Concordville, PA 19331

  
	
   

  	
   

  	
  Attention: Michael Boyd, CEO

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Mark L. Silow, Esquire

  
	
   

  	
   

  	
  Fox Rothschild LLP

  
	
   

  	
   

  	
  2000 Market Street, 10th Floor

  
	
   

  	
   

  	
  Philadelphia, PA 19103

  
	
   

  	
   

  	
   

  
	
  As to Landlord:

  	
   

  	
  4 Fellowship Drive Associates

  
	
   

  	
   

  	
  C/O The Hankin Group

  
	
   

  	
   

  	
  707 Eagleview Boulevard

  
	
   

  	
   

  	
  P.O. Box 562

  
	
   

  	
   

  	
  Exton, PA 19341

  

 

Notices shall be effective upon the earlier of (i) three (3) business days after mailing, (ii) one
(1) business day after delivery to an overnight courier, or (iii) actual
receipt. Either party may at any time, in the manner set forth for giving
notices to the other, designate a different address to which notices to it
shall be sent. Notices may be sent by the respective counsel of Landlord and
Tenant.

 

36.       Brokers

 

Landlord and Tenant each
represent and warrant to the other that neither Landlord nor Tenant has dealt
with any broker, firm, company or person in connection with the negotiation for
or the obtaining of this Lease, other than J C Partners, Inc. (“Broker”),
and each of Landlord and Tenant shall indemnify, defend and hold the other harmless
from and against any claim by any person (other than Broker) arising from the
breach of the aforesaid representation and warranty, including any reasonable
attorneys fees or other reasonable expenses incurred by the indemnified party
in connection therewith. The commission to Broker shall be paid by Landlord
pursuant to a separate agreement between Landlord and Broker.

 

17

 

37.       Signs

 

Tenant shall not, without
the prior written consent of Landlord, paint, place or erect any sign on the
exterior doors or walls of the Leased Space or of the Building or Center.

 

38.       Security Deposits

 

Upon the execution of this
Lease, Tenant agrees to deposit with Landlord, in addition to the first month’s
rent pursuant to Section 3(b) above, the additional sum of eleven thousand, four hundred thirty-seven
dollars and 02/100 Dollars ($11,437.02) to be held by Landlord as security
for the faithful performance of all the terms and conditions of this Lease (“Security
Deposit”). If, during the Term of this Lease, the required monthly installments
of Minimum Annual Rent and/or Additional Rent are increased, the amount of the
Security Deposit shall be increased in proportion to such increase if Landlord
so requests, and Tenant shall deposit with the Landlord the increase in the
Security Deposit promptly upon demand therefor. 
Should the Tenant breach any of the terms and conditions of this Lease
(subject to applicable notice and cure periods), Landlord shall have the right,
at any time and from time to time, to apply the Security Deposit or any part
thereof, for the purpose of curing any such default or for the purpose of
reimbursing Landlord for any damage or reasonable costs occasioned by such
default, but the right of Landlord to apply the Security Deposit shall not affect
any other remedies available to Landlord under this Lease or under applicable
law.  If the Security Deposit, or any
part thereof, is so applied by Landlord, Tenant shall within five (5) days
after demand, deposit funds with Landlord to restore the Security Deposit, and
failure to do so shall constitute a default under this Lease.

 

If the Tenant shall have
faithfully complied with all the terms and conditions of this Lease, the
Security Deposit (without interest) shall be refunded to Tenant within thirty
(30) days after the expiration or sooner determination of this Lease; provided,
however, that Tenant first shall have vacated the Leased Space and surrendered
possession thereof to the Landlord by delivery of keys, in accordance with the
Lease provisions and shall have returned the Leased Space to Landlord in accordance
with the terms hereof.

 

Nothing herein contained
shall require Landlord to hold the sums so deposited as a trust fund, nor
establish any relationship other than that of debtor and creditor with respect
to said funds so deposited.

 

If Landlord shall assign or
otherwise transfer its interest in this Lease, Landlord shall have the right to
transfer the Security Deposit to the assignee or other transferee of such
interest (with like right of transfer to any subsequent assignee or other
transferee) and upon such transfer, Landlord shall be released and relieved
from all liability and/or responsibility with respect to this Security Deposit
and/or the return or application thereof.

 

39.       Use of Information in Advertising

 

Landlord and any agent
employed by Landlord shall be permitted, to utilize the name of Tenant and any
occupant or user of the Leased Space, and, subject to the prior written approval of Tenant, other
general information about the Tenant and such occupant or user, and the terms
of this Lease, in advertising and promotional material utilized by them.

 

40.       Captions

 

The title to paragraphs of
this Lease are for convenience of reference only, and are not to be construed
as defining, limiting or modifying the scope or intent of any of the terms and
conditions of this Lease.

 

41.       Entire Agreement

 

This Lease contains all
covenants and agreements between Landlord and Tenant relating in any manner to
the rental, use and occupancy of the Leased Space and Tenant’s use of the
Building and other

 

18

 

matters set forth in this Lease. No prior agreement
or understanding pertaining to the same shall be valid or of any force or
effect and the terms, covenants and conditions of this Lease shall not be
altered, modified or added to except in writing signed by Landlord and Tenant.

 

42.       Options To Renew

 

So long as Tenant is not or has not been in default (subject to
applicable notice and cure periods) during the original Term of this Lease, and
subject and secondary to Deloitte Consultings’ right to expand into the Suite 111
at the end of this original Term, Tenant shall have the option, exercisable by
giving Landlord written notice at least twelve (12) months prior to the
expiration of the original Term of this Lease to extend the Term of this Lease
for an additional period of five (5) years. In the event that Tenant
fails to give such notices to Landlord in the way and manner herein provided,
or fails to execute a lease renewal agreement in the manner described below,
this Lease shall automatically terminate at the expiration of the then current
Term, and Tenant shall have no further option to extend this Lease. The terms
and conditions shall be upon the same terms and conditions as during the
initial five (5) year Term, except that (i) this option to renew shall be eliminated,
and (ii) the Minimum Annual Rent shall be increased to the then current
rate as established by Landlord in accordance with the following: Upon receipt
of Tenant’s written notice that it is exercising an option to renew, Landlord
shall tender to Tenant multiple counterparts of a lease renewal agreement
setting forth the new rent established by Landlord, taking into account
Landlord’s evaluation of all relevant factors, including without limitation the
rent being charged for comparable space in the Center, the length of the
renewal term, the conditions of the space, Tenant’s relative financial
strength, and the desired tenant mix. Tenant shall perfect its renewal rights
by executing and returning to Landlord with thirty (30) days after receipt an
executed counterpart of the lease renewal agreement. In the absence of Tenant’s
execution and delivery of the lease renewal agreement within such thirty (30)
day period, Tenant’s right to renew shall terminate, and the Term of this Lease
shall expire at the end of the then current Term.

 

19

 

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed the day and
year first above written, intending to be legally bound hereby.

 

 

	
   

  	
  LANDLORD

  
	
   

  	
   

  
	
   

  	
  4 Fellowship Drive Associates, a partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:   Hankin and Sons, a Limited
  partnership

  
	
   

  	
   

  
	
   

  	
  BY:   Hankin and Sons, Inc.,
  its general partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DATE:

  	
  August 25, 2004

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT (Corporation)

  
	
   

  	
   

  
	
   

  	
  Longport, Inc.

  
	
   

  	
   

  
	
   

  	
  a corporation organized and existing under the

  
	
   

  	
   

  
	
   

  	
  laws of DELAWARE.

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  BY:

  	
  /s/ [ILLEGIBLE]

  	
   

  
								

 

20

 

List of
Exhibits

 

Exhibit ”A” – Plan

 

Exhibit ”B” – Landlord’s Work

 

Exhibit ”C” – Intentionally Omitted

 

Exhibit ”D” – Rules and Regulations

 

21

 

 

 

	
  2 BRAXTON
  WAY

  	
   

  	
   

  	
  THE
  HANKIN GROUP

  
	
  SPRING
  VALLEY BUSINESS PARK

  	
   

  	
   

  	
  Eagleview Corporate Center

  
	
  CONCORD
  TOWNSHIP, PENNSYLVANIA

  	
   

  	
  (610) 458-1900

  	
  707 Eagleview Boulevard

  
	
  FIRST FLOOR
  MARKETING PLAN

  	
   

  	
  FAX: 458-0764

  	
  Exton, PA 19341

  

 

 

EXHIBIT B

 

Exhibit B shall consist of the following:

 

	
  Exhibit B-1

  	
   

  	
  Dwg. CD-1 dated August 20, 2004

  
	
   

  	
   

  	
   

  
	
  Exhibit B-2

  	
   

  	
  Standard Specifications For Office Buildings At
  Spring Valley Business Park.

  

 

Where any conflicts exist between Exhibits B-1
and B-2, in such cases Exhibit B-1 shall overrule Exhibit B-2.

 

 

 

 

	
   

  	
   

  	
   

  	
  REVISIONS

  
	
  

  	
  TITLE:

  	
  Project No:

  	
   

  
	
   

  	
  14156.00

  	
   

  
	
  FLOOR PLAN

  	
  Scale:

  	
   

  
	
   

  	
  N.T.S.

  	
   

  
	
  PROJECT:

  	
  Date:

  	
  Drawing No:

  
	
   

  	
  08-20-04

  	
  CD-1

  
	
  LONGPORT, 2
  BRAXTON WAY, SPRING VALLEY BUSINESS PARK

  	
  Drawn By:

  
	
   

  	
  EMF

  

 

 

Exhibit B-2

 

STANDARD SPECIFICATIONS 

FOR OFFICE BUILDINGS AT 

SPRING VALLEY BUSINESS PARK

 

The following are standard
specifications for office buildings at Spring Valley constructed by the
Landlord. Individual buildings may vary in some details as indicated on their specific working drawings.
Landlord reserves the right to change these specifications without notice.
Construction Drawings and specifications will be specifically prepared for each
leased space.

 

Design Services:       Tenant will be provided with the necessary
lease plan layout and construction drawings for a “standard” tenant space by
the Landlord’s tenant planner at Landlord’s sole expense. Landlord will not be
responsible for construction schedule delays caused by Tenant’s failure to
provide necessary programming information to the tenant planner in a timely
manner, and as specifically requested in a schedulized format.

 

OFFICE ENTRY

 

Typical entry doors and
frames shall be 8’-10” aluminum frames. Entrance doors from corridor
shall be an 8’-8”, solid-core, stain-grade wood veneer door with
translucent glass inserts.

 

Signage at corridor will be
located adjacent to and to the right of each entry door. The sign will consist
of a suite number and Tenant’s name in the building-standard sign color format.

 

PARTITIONS

 

Standard Interior Partitions:  Standard
interior office partitions are to be 8’-10” in height, non-loadbearing, 3-5/8”
metal studs (16” o.c.), with 1/2” gypsum board on each side.
All gypsum wallboard partitions shall be taped, bedded, floated, textured,
sanded, and painted with two coats of water-base latex paint.

 

Two-inch (2”) thick sound
attenuation board will be provided within all walls around conference rooms,
with 3-1/2” thermal batts laid over ceiling at wall junction located such
that two feet of batt is laying on each side of partition.

 

Standard Tenant Demising
Wall Partitions:  Standard tenant separation partitions are to
be 3-5/8”, 25-gauge metal studs (16” o.c.) with gypsum wallboard on each side of wall to underside of structure.
Sound attenuation batts will be provided in all tenant demising walls.

 

Doors:  All
interior doors shall be 7’-0” solid-core stain-grade birch doors with
freestanding aluminum frames.

 

Locksets:  All
entry hardware shall be Sargent 10 Line lever-handle. Tenant entry doors will

 

 

be equipped with Ives door stops and silencers.

 

Latchsets:  Hardware
on interior doors shall be Schlage “Orbit”-type door handle. Finish to be brushed aluminum.
Hinges are to be McKinney (or equal) full-mortise steel hinges, prime coated
and ready for painting.

 

Additional Locksets:  Any locksets,
other than those described above, shall be provided at Tenant’s request and at
Tenant’s expense.

 

Windows:  Window
blinds are to be provided by Landlord at all exterior windows. Blinds will be
Levelor of equal.

 

Ceilings” 5/8” x 2’-0” x 4’-0”
lay-in fissured mineral acoustic tile with exposed grid system.

 

Floor Finish:  Landlord’s
standard carpeting is Armstrong Commendation III level loop carpeting, 26 ounce
(or equal). Standard vinyl tile is Armstrong VCT 1/8” x 12” x 12” (or equal). Upgrade floor coverings are
available from Landlord’s tenant selection samples. All flooring upgrades are
at Tenant’s expense.

 

Wall Finish:  Standard
finish will be two coats (one primer; one color coat) of latex paint as
selected by Tenant from Landlord’s samples.

 

Air-Conditioning and Heating:  Office
areas shall be equipped with a complete, roof-mounted, summer and winter air
conditioning and heating system based on the following performance
specifications (based on one person per 250 square feet with no heat-producing
machines):

 

	
  When outside conditions are:

  	
   

  	
  Office conditions shall
  be:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Summer:

  	
   

  	
  93 F (db) and 75 F (db)

  	
   

  	
  75 F-18 F (db)

  	
  50% R humidity

  
	
  Winter:

  	
   

  	
  0 F

  	
   

  	
  70 F (db)

  	
  20% R humidity

  

 

Air-conditioning shall be specifically designed for
each space. Equipment shall be manufactured by Carrier, General Electric, York
or equal. Restrooms shall be equipped with exhaust fans to be outside per local
code requirements. Conference rooms may be equipped with exhaust fan to ceiling
plenum as a Tenant upgrade and at Tenant’s expense.

 

Light Fixtures:  Allowances:
Sufficient fixtures to provide an average lighting level of 65 foot candles
(maintained at desk height).

 

Fixtures 2’-0” x 4’-0” recessed
fluorescent fixture with acrylic lens. Fixtures to be placed over work areas.

 

 

Convenience Receptacles:  Allowances:  1 for each 125 sq.ft. of leased area.

 

Wall type receptacles for
120 volts supply shall be of 1.5-amp per outlet, 1 pole, 3-wire
grounding type.

 

Telephone:  Each
tenant must arrange for their telephone requirements directory with Verizon or
shared tenant services provider. Telephone installation shall be scheduled and
coordinated by Tenant with Landlord at time of construction. Phone outlet
locations can be indicated on construction documents at the request of Tenant.

 

 

Exhibit C

 

 

(Intentionally Omitted)

 

 

Exhibit ”D”

 

RULES AND REGULATIONS

 

1.                                       DEFINITIONS

 

Wherever in these Rules and
Regulations the work “Tenant” is used, it shall be taken to apply to and
include the Tenant and his agents, employees, invitees, licensees, subtenants
and contractors, and is to be deemed of such number and gender as the
circumstances require.  The word “room”
is taken to include the space covered by the Lease. The word “Landlord” shall
be taken to include the employees and agents of Landlord.  Wherever terms of these Rules and
Regulations conflict with terms of the Lease, the terms of the Lease shall
govern.

 

2.                                       OBSTRUCTION

 

The streets, sidewalks,
entrances, halls, passages, elevators, stairways and other common areas
provided by Landlord shall not be obstructed by Tenant, or used by it for any
other purposes than for ingress and egress.

 

3.                                       WASHROOMS

 

Toilet rooms, water-closets
and other water apparatus shall not be used for any purposes other than those for
which they were constructed.

 

4.                                       GENERAL PROHIBITIONS

 

In order to insure proper
use and care of the Leased Space Tenant shall not:

 

(a)                                  Keep animals or birds in the rooms.

 

(b)                                 Use rooms as sleeping apartments.

 

(c)                                  Allow any sign, advertisement or notice to be
fixed to the outside of Building, or placed in a window, except as provided in
the Lease.

 

(d)                                 Make improper noises or disturbances of any
kind so as to disturb other tenants or tend to injure the reputation of the
Building or Center.

 

(e)                                  Mark or defile elevators, water-closets,
toilet rooms, walls, windows, doors or any other part of the Building or
Center.

 

(f)                                    Place anything on the outside of the
Building, including roof setbacks, window ledges, balconies and other
projections; or drop anything from the windows, stairways or parapets; or place
trash or other matter in the halls, stairways, elevators or light wells of the
Building.

 

(g)                                 Cover or obstruct any window, skylight, door
or transom in such a way that Landlord - supplied blinds are not
visible from the exterior of the Building.

 

(h)                                 Interfere with the heating or cooling
apparatus.

 

 

(i)                                     Leave rooms without locking exterior doors.

 

(j)                                     Install any shades, blinds, or awnings
without consent of Landlord.

 

(k)                                  Give its employees or other persons
permission to go upon the roof of the Building without the written consent of
Landlord.

 

(l)                                     Place door mats in public corridors without
the consent of Landlord.

 

5.                                       BUSINESS MACHINES

 

Business machines and
mechanical equipment which cause vibration, noise, cold or heat that may be
transmitted to the Building structure or to any area outside the Leased Space
shall be placed and maintained by Tenant, at its sole cost and expense, in
settings of cork, rubber, or spring type vibration eliminators sufficient to
absorb and prevent such vibration, noise, cold or heat.

 

6.                                       MOVEMENT OF EQUIPMENT

 

Landlord reserves the right
to designate the time and the method whereby freight, small office equipment,
furniture, safes and other like articles may be brought into, moved, or removed
from the Building or rooms, and to designate the location for temporary
disposition of such items.

 

7.                                       RIGHTS RESERVED TO LANDLORD

 

Without abatement or
diminution in rent, Landlord reserves and shall have the following additional
rights:

 

(a)                                  To install and maintain a sign or signs on
the exterior of the Building.

 

(b)                                 During the last six (6) months of the
term if the Tenant vacates the Premises, to decorate, remodel, repair, alter or
otherwise prepare the Premises for reoccupancy.Exhibit 10.39

 

DATED  March  20th 2004

 

 

(1)                                  LONGPORT INCORPORATED

 

(2)                                  FUTURE SCAN INCORPORATED

 

 

DISTRIBUTION AGREEMENT

 

 

THIS
AGREEMENT is made the 20th day of March 2004

 

BETWEEN
:

 

(1)                                  LONGPORT INCORPORATED, a corporation incorporated
under the laws of Delaware and having its principal place of business at 740
South Chester Road, Swarthmore, PA 19081, (“Longport”);
and

 

(2)          FUTURE SCAN INCORPORATED, a corporation incorporated
under the laws of  and having Delaware its principal place of business at , 720 Benjamin Fox Pavilion 
Jenkintown, PA 19046  (“FUTURE SCAN”).

 

WHEREAS
:

 

(A)                              Longport
develops, supplies and supports B-scan ultrasound scanning equipment (the “Equipment”) and software (the “Software”)
detailed in Schedule 1 (together, the “Scanner”
which expression extends to any versions, derivatives, parts, aspects and
ingredients thereof from time to time as specifically outlined in Schedule 1)
which has been designed for the purpose of imaging the human skin and
underlying few centimeters soft tissue, detecting the onset of certain
conditions that impact this region and allowing the monitoring of the rate and
extent of change to skin tissue induced by treatments or through natural
processes.

 

(B)                                Longport
wishes to appoint FUTURE SCAN as a distributor of the Scanner and FUTURE SCAN agrees to accept such
appointment on the terms set out in this Agreement, which, for the avoidance of
doubt, shall include the Terms and Conditions attached hereto.

 

IT IS
HEREBY AGREED as follows:

 

1.                                       DEFINITIONS

 

1.1                                 In this Agreement the
following expressions shall have the following meanings:

 

“Application
Training” means clinical training on the use of the scanner; such
training will only be provided to individuals who have previously successfully
completed “System

 

1

 

Training”.
Fees over and above Longport’s agreed selling price will under normal
circumstances be charged for this “Application Training” (see Schedule 3);

 

“Business Day” means any day on which
banks are open to conduct business in the United States of America;

 

“FUTURE SCAN Group” means together FUTURE
SCAN and every holding company or subsidiary of 
FUTURE SCAN;

 

“Effective Date” means five business days after signature of
this Agreement

 

“Longport Group” means together Longport and every holding
company or subsidiary of Longport;

 

“Order” means any order for the Scanner placed with Longport
by FUTURE SCAN from time to time in accordance with this Agreement;

 

“Parties” mean the parties to this
Agreement namely, Longport and FUTURE SCAN;

 

“Restricted Information” has the meaning attributed to it in
Condition 21 of the Terms and Conditions;

 

“Sub-agent” shall mean a subsidiary sales
or distribution agent appointed by FUTURE SCAN;

 

“System Training” shall mean instruction
offered by Longport on the general use of the scanner hardware and software.

 

“Terms and Conditions” has the meaning attributed to them in Schedule 2,
and;

 

“Territory” means the United States of America.

 

1.2                                 Any reference in this
Agreement to any statute or statutory provision shall be construed as including
a reference to that statute or statutory provision as from time to time amended
modified extended or re-enacted whether before or after the date of this
Agreement and to

 

2

 

all statutory
instruments orders and regulations for the time being made pursuant to it or
deriving validity from it and so far as may be applicable any past statutory
provisions as from time to time amended modified extended or re-enacted which
such provision has directly or indirectly replaced.

 

1.3                                 Except so far as the
context otherwise requires words denoting the singular shall include the plural
and vice versa and words denoting any one gender shall include all genders and
words denoting persons shall include bodies corporate, unincorporated,
associations, partnerships and individuals.

 

1.4                                 Unless otherwise
stated definitions of the parties included in the statement of parties in
Clause 1 of this Agreement and any definitions included in any particular
Clauses, or Schedules also apply in the remainder of this Agreement.

 

1.5                                 Headings to Clauses
are included for ease of reference only and shall have no effect on the
interpretation or construction of this Agreement.

 

2.                                       APPOINTMENT

 

2.1                                 Subject to the terms
of this Agreement, Longport hereby appoints FUTURE SCAN as a non-exclusive
distributor into all applicable medical markets for the “Scanner” across the
Territory and FUTURE SCAN hereby accepts such appointment.

 

2.2                                 For the avoidance of
doubt, Longport shall be entitled at any time or from time to time to sell the
Scanner direct to customers in the Territory.

 

2.3                                 For the duration of
this Agreement the FUTURE SCAN Group shall obtain the Scanner only from
Longport.

 

2.4                                 FUTURE SCAN shall not,
during this Agreement without the prior written consent of Longport, be
involved directly or indirectly whether on its own account or for or through
any other person, including its sub-agents, in the manufacture, sale,
distribution, promotion or marketing in the Territory of any ultrasound based
product which (a) competes or (b) is capable of competing with the
Scanner.

 

3

 

2.5                                 For the duration of
this Agreement, FUTURE SCAN shall not seek customers for the Scanner outside
the Territory and will not establish or maintain any branch or distribution
depot for the Scanner outside the Territory.

 

2.6                                 In addition, the
appointment of FUTURE SCAN is subject to the Terms and Conditions.

 

3.                                      UNDERTAKINGS AND OBLIGATIONS

 

3.1                                 The FUTURE SCAN Group
undertakes to Longport :

 

(a)                                  not
to register or assert any rights to :

 

(i)                                     any trade mark, patent, registered design,
internet domain name or other intellectual property rights owned from time to
time by any member of the Longport Group;

 

(ii)                                  the design of the Scanner or any invention
contained therein;

 

(b)                                 not
to be involved in any activity for the duration of this Agreement which may
bring the  intellectual property rights
or other rights of Longport or Longport the entity into question or disrepute;

 

(c)                                  bring
to the attention of Longport any improper or wrongful use of the Scanner or any
possible infringement of Longport’s intellectual property rights, or any faults
or defects in the Scanner which have become known to FUTURE SCAN;

 

(d)                                 shall
comply fully with the requirements of all relevant regulatory bodies and shall
ensure that it does not take any action or make any representation which may
impede Longport in obtaining or continuing subsistence of any such approval;
and

 

(e)                                  to
attend the initial training courses on the use of the Scanner, and any further
training courses required in the event that Longport produces an update,
enhancement or modification to the Scanner.

 

3.2                                 FUTURE SCAN and its Sub-Agent
shall not through any means state or imply that FUTURE SCAN has the any
exclusive distribution rights in the Territory.

 

4

 

3.3                                 The FUTURE SCAN Group
and Longport Group undertake to each other during the continuance of this
Agreement as well as after its termination to maintain the confidentiality
obligations contained in Condition 21 of Schedule 2.

 

3.4                                 For the duration of
this Agreement, FUTURE SCAN and Longport agree not to issue press releases or other
announcements that mentions the other party or its interests without first
seeking the written authorization, and whenever possible the agreement of the
other party. Neither party should unnecessary delay announcements by the other
party and should give good reason why they have requested editorial changes,
including when appropriate reference to this Agreement. Whenever a significant
event occurs involving Longport and FUTURE SCAN, both parties shall co-ordinate
the issuance of appropriate press releases in a timely manner. For the
avoidance of doubt the events described in Clause 7.1, subject to Clause 7.6,
shall be considered a significant event.

 

4.                                       RESTRICTIVE COVENANTS

 

4.1                                 The FUTURE SCAN Group
hereby warrants and undertakes in favor of Longport :

 

(a)                                  not
for a period of 36 months after the date of termination of this Agreement
howsoever arising to be directly or indirectly (whether as a shareholder,
partner, consultant, employee, agent or principal or in any other capacity)
engaged concerned or interested in any business or company carrying on within
the Territory the business of the manufacture, distribution or sale of any
ultrasound device which is capable of competing with the Scanner, except that FUTURE
SCAN may be beneficially interested in the securities in any company carrying
on within the Territory such a business if such securities are listed on a
recognized Stock Exchange and the FUTURE SCAN Group together with any associate
neither holds nor is beneficially interested in more than a total of five per
cent of all the securities in that company;

 

(b)                                 not
at any time after the termination of this Agreement to use or hold itself out
as using any of the corporate or trading names of Longport or any colorable
imitation or derivative thereof;

 

5

 

(c)                                  not
for a period of 12 months after the termination of this Agreement to directly
or through any other person to employ or seek to entice away from the
employment of Longport any person who was at any time during the twelve months
prior to the termination of this Agreement employed by Longport; and

 

(d)                                 not
at any time after the Termination of this Agreement to represent it or permit
it to be held out as being in any way connected with or interested in the
business of Longport.

 

4.2                                 The parties to this
Agreement agree that the restrictions set out in Clause 4.1 are separate and
severable undertakings and are reasonable in the circumstances and necessary
for the protection of the legitimate interests of Longport and the goodwill of FUTURE
SCAN.  If, however, any part of Clause
4.1 is found to be invalid or unenforceable for any reason then the remainder
of Clause 4.1 shall continue in full force and effect.

 

5.                                      DURATION

 

5.1                                 Subject
to Clause 12 below, this Agreement shall commence on the Effective Date and
shall continue for an initial period expiring on the third anniversary after
the Effective Date (“the Initial Term”).

 

6.                                      SUPPLY

 

6.1                                 Subject to Clause 7.6
below and Condition 14 (Force Majeure) of the Terms and Conditions, Longport
shall use all reasonable endeavors to supply the Scanner to FUTURE SCAN in
accordance with each Order placed by FUTURE SCAN.

 

6.2                                 Longport shall be
entitled at any time or from time to time to make such modifications to the specification
of the Scanner as it may in its sole discretion think fit. Whenever possible
Longport will review any change in specification with FUTURE SCAN before they
are implemented.

 

6.3                                 FUTURE SCAN shall in
respect of each Order for the Scanner to be supplied hereunder be responsible
for :

 

6

 

(a)                                  ensuring the accuracy of the Order;

 

(b)                                 providing
Longport with any information which is reasonably necessary in order to enable
Longport to fulfill the Order;

 

6.4                                 Upon receipt and
confirmation of each Order Longport shall, as soon as is reasonably
practicable, inform FUTURE SCAN of Longport’s estimated delivery date for the
order.  Longport shall use all reasonable
endeavors to meet the delivery date, normally four months after receipt of
order, but time of delivery shall not be of the essence and accordingly
Longport shall have no liability to FUTURE SCAN if, notwithstanding such
endeavors, there is any delay in delivery. Longport shall however advise FUTURE
SCAN of any expected delivery delays at the earliest practical opportunity.

 

6.5                                 The terms of this
Agreement, which includes the Schedules attached hereto, shall apply to the
exclusion of any other terms and conditions including any implied by trade,
custom, practice or course of dealing. 
Purported provisions to the contrary are excluded.

 

7.                                       PAYMENTS

 

7.1                                 On signature of this
Agreement FUTURE SCAN shall provide Longport with an initial order for 100
Scanners  at a cost of $20,000 per
Scanner. A 20% advance payment shall be made for these units, however half of
this advance payment shall be deferred until the first 10 scanners are
delivered.  Within 5 business days from
the date of applying FUTURE SCAN’s and Longport’s authorized signature to this
Agreement, Longport shall receive from FUTURE SCAN half of the advance payment
($200,000) by wire transfer for these Scanners. Longport shall immediately
notify FUTURE SCAN of the receipt of the transfer of these funds.

 

7.2                                 This agreed selling price
of $20,000 per Scanner excludes any applicable taxes and duties and does not
include any end user customer training and it is expected that FUTURE SCAN or
one of its sub-agents shall provide the first level of direct customer support
in both application and customer support matters.

 

7

 

7.3                                The first 10 units
covered by this Agreement shall be delivered by Longport to FURTURESCAN within
120 days of signature of this Agreement. Within 5 business days of receipt of
these first 10 Scanners FUTURE SCAN shall pay to Longport the outstanding deposit
of $200,000 and the residue amount due on these first 10 scanners ($160,000).

 

7.4                                 Future scan shall take delivery of the
remaining 90 scanners at a rate of approximately 10 per month following the
acceptance of the first ten scanners; however, all scanners shall be accepted
and paid for in full by FUTURE SCAN, no longer than 11 months following the
delivery date of the first 10 scanners.

 

7.5                                 Upon FUTURE SCAN accepting the last of the ordered
100 scanners, Longport shall issue to FUTURE SCAN 200,000 warrants.  Each warrant
shall entitle FUTURE SCAN to purchase one common share of restricted stock of
Longport, Inc., at  the price of $1.75 per share, for a period
of one year from the date of issue of the warrant.  In the event that the
common stock trades at or above a price of  $3.50 per share for a
period of 5 consecutive trading days, following the date of the issue of the
warrant, FUTURE SCAN has sixty calendar days from the last  date of the
five consecutive trading days to exercise any or all of the warrants.  Any
warrants not exercised during this time period shall be canceled at the end of
this time period.

 

7.6                                 This Agreement shall
not be considered consummated until the payments described in 7.1 are received
by Longport. If Longport does not receive the payment described in Clause 7.1
within 5 business days of signature of this Agreement, this Agreement will
automatically be null and void.

 

7.7                                 Between the time of
signature of this Agreement and the day that the initial deposit of the
$200,000 is received by Longport, no press release or announcement shall be
made by either party in regard to this Agreement. Further, if any party
believes that the other party, any company, sub-agent or any individual
associated with that party has directly or indirectly gained or tried to gain or
enabled an opportunity for any third party to gain any benefit from the
existence of this Agreement before it has been announced to the public at large
this Agreement can be made null and void, subject to Clause 10.3.

 

8

 

7.8                                 FUTURE SCAN’s normal
purchase price for the Scanner shall be $20,000 per unit when ordered in
quantities of 10 units or greater, excluding any applicable taxes and duties. A
20% advance payment shall be made when each order is placed. This price does
not include end user customer training and it is expected that FUTURE SCAN or
one of its sub-agents shall provide the first level of direct customer support
in both application and operational matters. Service support, training
provision as well as component costs available through Longport are defined in Schedule 3
of this Agreement.

 

7.9                                 Longport has the right
to change the purchase price for future orders. Not withstanding this Clause
7.9 it is recognized that FUTURE SCAN can purchase additional scanners at a set
price of $20,000 until September 3rd 2004.

 

8.                                       MARKETING

 

8.1                                 FUTURE SCAN shall use
its best endeavors to promote the sale of the Scanner throughout the Territory.

 

8.2                                 FUTURE SCAN shall be
entitled to market, resell or lease the Scanner to its customers at such prices
as it may determine.

 

8.3                                 FUTURE SCAN shall
respond promptly to all enquiries from prospective customers.

 

8.4                                 In connection with the
promotion and marketing of the Scanner FUTURE SCAN :

 

(a)                                  shall
not misrepresent Longport and shall make clear in all dealings with customers
and prospective customers that it is acting as distributor of the Scanner and
not as Longport’s agent, and shall use all reasonable endeavors to protect the
good name and reputation of Longport throughout the Territory;

 

(b)                                 shall
comply with all legal requirements from time to time in force relating to the
storage and sale of the Scanner;

 

(c)                                  inform
Longport in writing of its selling price current from time to time;

 

(d)                                 provide
Longport on a quarterly basis (or on such other basis as agreed from time to
time) with a report, in such form as Longport may reasonably require, of sales
of the Scanner which it has made in the preceding 3 months and containing such
other information as Longport may reasonably require;

 

9

 

(e)                                  from time to time consult with Longport’s
representatives for the purpose of assessing the market in the Territory and
permit them to;

 

(i)                                     inspect
any premises or documents used by FUTURE SCAN in connection with the sale of
the Scanner; or

 

(ii)                                  accompany FUTURE SCAN on visits to customers
or potential customers, subject to the agreement of the customer;

 

(f)                                    at
the request of Longport provide to it copies of such sales catalogues, sales
brochures and sales manuals as relate to the Scanner;

 

(g)                                 use in relation to the Scanner only such
advertising promotional and selling materials as are approved in advance in
writing by Longport;

 

(h)                                 maintain
an active and suitably trained sales force;

 

8.5                                 In connection with the
promotion and marketing of the Scanner, Longport shall :

 

(a)                                  provide
FUTURE SCAN with literature in English in relation to the Scanner. The cost of
this literature shall be borne by Longport if requested in reasonable
quantities and in Longport’s standard format, but at FUTURE SCAN’s expense if
literature is requested in quantities greater than thought reasonable by
Longport or if requested in a FUTURE SCAN specified format;

 

(b)                                 support
FUTURE SCAN by means of comprehensive website coverage, which shall include the
contact details of FUTURE SCAN and links to any appropriate FUTURE SCAN
website(s);

 

(c)                                  provide
FUTURE SCAN with access to a global network of research activities, including
opportunities for FUTURE SCAN to participate in local activities; and

 

(d)                                 provide
FUTURE SCAN with general marketing, clinical and technical support and insights
into development activities and new products.

 

9.                                       WARRANTIES

 

9.1                                                                                 Longport warrants and undertakes in favor of FUTURE
SCAN that :

 

(a)                                  Longport
is the owner with full title guarantee of each Scanner sold or offered for sale
to FUTURE SCAN pursuant to this Agreement;

 

(b)                                 all
Scanners delivered hereunder shall be of satisfactory quality and fit for the
purpose for which they are stated by Longport to be designed;

 

10

 

(c)                                  Longport’s
Scanner technology has FDA marketing clearance (FDA Ref K990238);

 

(d)                                 Scanners
supplied will be UL kite marked and UL listed under the appropriate medical
device category; and

 

(e)                                  the
Scanner manufacture will be undertaken by an FDA registered company.

 

9.2                                 FUTURE SCAN warrants
in favor of Longport that it has all necessary power and authority to enter
into this Agreement and to perform the obligations set out herein and that this
Agreement has been properly authorized and constitutes binding obligations on
it.

 

9.3                                 In the event of any
breach of Longport’s warranty in Clause 11.1 (whether by reason of defective
materials, production faults or otherwise) Longport’s liability shall be
limited to replacement of the Scanner in question.

 

9.4                                 Notwithstanding
anything to the contrary in this Agreement, Longport shall not, except in
respect of death or personal injury caused by Longport’s negligence, be liable
to FUTURE SCAN by reason of any representation or implied warranty, condition
or other term or any duty at common law, or under the express terms of this
Agreement for any consequential loss or damage (whether for loss of profit or
otherwise and whether occasioned by the negligence of Longport or its employees
or agents or otherwise) arising out of or in connection with any act or
omission of Longport to the manufacture or supply of the Scanner, its resale by
FUTURE SCAN or its use by any customer.

 

9.5                                 Longport shall provide
product liability insurance with reputable insurance companies in the amount of
at least $5 million per claim or series of connected claims.

 

10.                                 TERMINATION

 

10.1                           Longport shall be entitled
without prejudice to its other rights, to terminate this Agreement by notice in
writing to FUTURE SCAN in the event that :

 

(a)                                  FUTURE
SCAN commits any breach of its obligations hereunder and fails to remedy such
breach within fifteen (15) Business Days of receipt of notice from Longport
requiring the remedy thereof.

 

11

 

(b)                                 FUTURE
SCAN makes any arrangement with its creditors or an order is made or a
resolution is passed for the winding-up of FUTURE SCAN (other than solely for
the purpose of amalgamation or reconstruction) or a receiver, administrator or
administrative receiver or other officially appointed officer or manager is
appointed to the whole or any part of its assets or undertaking or
circumstances arise which entitle the Court or a creditor to appoint a receiver
or manager or administrator or administrative receiver or other official
officer or manager or which entitle the Court to make a winding-up order of if FUTURE
SCAN takes or suffers any similar or analogous action in consequence of debt;
or

 

(c)                                  FUTURE
SCAN is found to have made any material misrepresentation concerning the
Scanner or Longport.

 

(d)                                 Longport
receives no new orders for Scanners from FUTURE SCAN within a six-month period
of Longport supplying all Scanners due under previous orders.

 

(e)                                  FUTURE
SCAN shall be responsible for the actions of all its sub-agents, and all
sub-agents shall be obliged to sign Agreements with FUTURE SCAN that protect
the interests of Longport. If any sub-agent is found or believed to be damaging
the interests of Longport or Longport the entity then Longport can insist that FUTURE
SCAN or that sub-agent correct the damaging action or potential damaging action
within fifteen business days of receiving written notice from Longport. If such
corrective action does not occur to Longport’s satisfaction then FUTURE SCAN
shall terminate its agreement with that sub-agent immediately, failure to do so
will be considered a breach of this Agreement.

 

10.2                           Where Longport has
terminated this Agreement in accordance with Clause 10.1 FUTURE SCAN shall have
no claim or action against Longport in respect of an Order or part of an Order
so cancelled and, with regard to any uncancelled part of an Order, a right only
to receive that proportion of the price which the completed part of an Order
bears to the uncompleted part.

 

10.3                           If a dispute arises out of
or in connection with this Agreement either party may by written notice require
the other party to resolve the dispute by negotiation in good faith.  Where such a notice is given, each party
shall use their best endeavors to resolve the dispute.  In the event that such a dispute is not
resolved within 15 business days after the said notice was given, the aggrieved
party shall immediately refer the matter to the American

 

12

 

Arbitration
Association (“AAA”) to resolve the dispute through a binding arbitration. Such
arbitration shall be conduced in the State of Pennsylvania. The aggrieved party
shall pay all direct AAA costs incurred prior to the arbitration hearing, but
the AAA shall have the right to rule on how these and all other costs
directly incurred in the arbitration process are finally proportioned.

 

This Agreement
shall be governed by and construed in accordance with Delaware law.

 

11.                                 CONSEQUENCES OF TERMINATION

 

11.1                           Upon termination of this
Agreement :

 

(a)                                  Longport
shall be entitled, but not obliged, to repurchase from FUTURE SCAN all or part
of any order of the Scanner then held by FUTURE SCAN for a price equal to the
lower of cost or net realizable value provided that :

 

(i)                                     Longport
shall be responsible for arranging and for the cost of, transport and
insurance; and

 

(ii)                                  FUTURE
SCAN may sell the Scanner for which it has accepted orders from customers prior
to the date of termination or in respect of which Longport does not, by written
notice given to FUTURE SCAN within 10 Business Days after the date of
termination exercise its right of repurchase and for those purposes and to that
extent the provisions of this Agreement shall continue in full force and
effect;

 

(b)                                 FUTURE
SCAN shall, at its own expense, within 30 Business Days send to Longport any
advertising, promotional or sales material relating to the Scanner (and all
copies thereof) then in the possession of FUTURE SCAN;

 

(c)                                  outstanding
unpaid invoices rendered by Longport in respect to the Scanner shall become
immediately payable by FUTURE SCAN and invoices in respect to the Scanner
ordered prior to termination but for which an invoice has not been submitted
shall be payable immediately upon submission of an invoice;

 

(d)                                 FUTURE
SCAN shall cease to promote, market or advertise the Scanner or to make any use
of the Restricted Information (as defined in Condition 21 of the Terms and
Conditions) other than for the purpose of selling all or part of any

 

13

 

consignment of the
Scanner in respect of which Longport does not exercise its right of repurchase;

 

(e)                                  FUTURE
SCAN shall have no claim against Longport for compensation for loss of
distribution rights, loss of goodwill or any similar loss; and

 

(f)                                    subject
as otherwise provided herein and to any rights or obligations which have accrued
prior to termination neither party shall have any further obligation to the
other under this Agreement.

 

11.2                           Termination of this
Agreement shall be without prejudice to any right or remedy which either
Longport or FUTURE SCAN may have against the other in respect of the breach
concerned or any other breach.

 

11.3                           Termination of this
Agreement shall be without prejudice to any obligations expressed to continue
to apply notwithstanding any such termination.

 

12.                                 INDEMNITY

 

Both
parties shall forthwith on demand indemnify and keep each other indemnified
from and against any and all actions, claims, demands, costs, liabilities,
losses, damages or expenses (including loss of profit, legal expenses and
consequential loss and damage) :

 

(a)                                  sustained
by either party or for which each member may be liable as a result of the
failure of the other party to perform its obligations hereunder;

 

(b)                                 sustained
by Longport or for which Longport may be liable as a result of any action taken
by FUTURE SCAN in relation to the Scanner prior to resale of the Scanner
including any modification or alteration to the Scanner;

 

(c)                                  in
respect of any breach of either parties obligations of confidentiality pursuant
to Clause 3.3 or Condition 21 of Schedule 2; and

 

(d)                                 in
respect of any default, act, omission or other breach of this Agreement or
negligence of Longport or FUTURE SCAN or their respective employees or agents
(including sub-agents).

 

13.                                 SEVERANCE

 

If at
any time any one or more of the provisions of this Agreement or any part
thereof is held by any Court or other competent authority to be void or
otherwise unenforceable for

 

14

 

any
reason under applicable law, such provision shall be deemed omitted herefrom
and the validity and/or enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.

 

14.                                 ENTIRE AGREEMENT

 

This
Agreement together contains the entire agreement between the parties with
respect to the supply of the Scanner by Longport to FUTURE SCAN and supersedes
all previous agreements and understandings between the parties with respect
thereto.  This Agreement shall prevail
over any terms or conditions of sale of FUTURE SCAN and may not be modified
except by an instrument in writing signed by the duly authorized
representatives of the parties.

 

15.                                 PARTNERSHIP

 

Nothing
in this Agreement shall be deemed to constitute an agency or partnership
relationship between the parties.

 

16.                                 ASSIGNMENT

 

This
Agreement is personal to the parties to the Agreement and save as set out below
neither of the Parties may assign its rights and obligations under this
Agreement whether in whole or in part without the prior written consent of the
other save that Longport may (without the need for such prior written consent)
assign its rights and obligations to any other company within the Longport
Group, and FUTURE SCAN may assign within the FUTURE SCAN Group.

 

17.                                 NOTICES

 

Any
notice or consent required or permitted to be given hereunder shall be validly
given if delivered personally or sent by recorded delivered US Mail to the
registered office of the party concerned appearing in the definitions on the
first page of this letter or by facsimile transmission to the facsimile
number given below (or such other address as may be notified by one party to
the other in accordance with this paragraph) :

 

	
  Longport
  Incorporated

  	
   

  	
  Fax Number: 610-328-7017

  

 

Marked
for the attention of Michael Boyd and Paul Wilson

 

15

 

	
  Future
  Scan Incorporated

  	
   

  	
  Fax Number: 215-794-2490

  

 

Marked
for the attention of Philip
Goodman

 

Any
such notice shall be deemed to have been given when it was personally delivered
or served or, if sent by US Mail, seventy-two hours after it was posted (and
proof of due posting shall be sufficient evidence of delivery) or if sent by
facsimile transmission, at the time when the transmission was sent provided
that it is sent during normal office hours on a business day.

 

IN
WITNESS whereof the parties have executed this Agreement the
day and year first before written

 

16

 

SCHEDULE 1

 

The Scanner

 

(as at the Effective Date)

 

shall consist of the
following (a) :

 

A.                                   The
Equipment

 

I.                                EPISCAN-I-200
High Resolution Ultrasound Scanner

 

	
  Consisting of:

  	
   

  	
  Proprietary
  Ultrasound / 200 MHz ADC PCI Board

  	
   

  
	
   

  	
   

  	
  17” TFT Screen

  	
   

  
	
   

  	
   

  	
  Read / Write CD
  / DVD Drive

  	
   

  
	
   

  	
   

  	
  40 Gb Hard Disk
  Drive

  	
   

  
	
   

  	
   

  	
  Blue Tooth
  Enabled

  	
   

  
	
   

  	
   

  	
  Wireless
  Communication (802.11b)

  	
   

  
	
   

  	
   

  	
  Multicard Reader

  	
   

  
	
   

  	
   

  	
   

  	
  Compact flash
  types I & II

  
	
   

  	
   

  	
   

  	
  Smartmedia

  
	
   

  	
   

  	
   

  	
  Panasonic
  Securedigital Memory Card

  
	
   

  	
   

  	
   

  	
  Sony Memory
  Stick

  
	
   

  	
   

  	
  10 / 100 network
  port

  	
   

  
	
   

  	
   

  	
  Wipeable
  Keyboard

  	
   

  
					

 

II.                            20
MHz-Center Frequency Probe

 

	
   

  	
   

  	
  15mm scan length

  	
   

  
	
   

  	
   

  	
  Integrated scan
  control

  	
   

  
	
   

  	
   

  	
  Scan Rate ~1
  frame per second

  	
   

  

 

B.                                     The Software

 

I.                                Operating
System Windows XP or similar

 

II.                            Longport’s
Proprietary Software V3.00 Dec 2002 or subsequent updates (b)

 

(a) Specification
may change without notice

(b) The
scanner purchase price includes two additional software licenses allowing the
system user to view images on in-house PCs or laptops. End users shall however
not distribute Longport’s software to any third party.

 

17

 

SCHEDULE 2

 

Terms and Conditions

 

1.                                       DEFINITIONS

 

“Conditions” means these terms and conditions and “Condition”
shall be construed accordingly;

 

“Agreement” means the agreement between Longport and FUTURE
SCAN for the sale and purchase of the Scanner and these Conditions;

 

“Price” means the price set by Longport for the Scanner from
time to time, exclusive of sales tax, and any charges for special packaging of
the Scanner but inclusive of any charges made under the terms of freight set
out in Condition 5 of these Terms and Conditions.

 

2.                                       MAKING THE AGREEMENT

 

These
Conditions shall apply to and form part of the Agreement between Longport and FUTURE
SCAN for the distribution of the Scanner. 
No terms and/or conditions, which Longport or FUTURE SCAN may seek to
impose shall apply or have effect, unless agreed in writing by both parties.

 

3.                                       QUOTATIONS AND ACCEPTANCE OF ORDERS

 

Any
price quotation made by Longport and notified to FUTURE SCAN shall remain open
for a period of 120 Business Days and an agreement will only be established
when Longport has accepted FUTURE SCAN’s order in writing.

 

4.                                       SALES LITERATURE

 

The
specification of the Scanner shall be as set out in Longport’s sales
literature, which Longport reserves the right to update from time to time in
accordance with any update, enhancement or modification made to the
Scanner.  While Longport takes every
precaution in the preparation of its literature these documents are for FUTURE
SCAN’s general guidance and information only and shall not give rise to any
warranty, representation or liability on the part of Longport.

 

18

 

5.                                      PRICE

 

5.1                                 Calculation of Price

 

The
Price is calculated on a free carrier basis (as set out in ICC Incoterms 2000)
and includes the cost of packaging, carriage and insurance to the time at which
any Scanner is delivered to the carrier for carriage to FUTURE SCAN but
excludes all costs thereafter.

 

5.2                                 Change in Rates of Insurance and Transit Charges

 

The
Price is based on current rates of insurance and other transit charges and for
the normal route for carriage.  Any
increase in these charges or variation in such route shall entitle Longport to
increase the Price for the Scanner by a corresponding sum.

 

5.3                                 Delay or Failure in Making Payment

 

If FUTURE
SCAN fails to pay the price for any Scanner within 15 Business Days after the
date of the relevant invoice, Longport shall be entitled (without prejudice to
any other right or remedy it may have) to :

 

(a)                                  cancel
or suspend any further delivery to FUTURE SCAN under any Order; and

 

(b)                                 charge
FUTURE SCAN interest on the price at the rate of 4 per cent. per annum above US
base rate in force from time to time from the date the payment became due until
actual payment in full is made. Any interest so accrued shall be separately
invoiced by Longport and paid by FUTURE SCAN with 15 business days after the
date of the relevant invoice, non-payment of any such invoice shall be treated
in the same manner as a Scanner related invoice.

 

5.4                                 All
payments shall be made by FUTURE SCAN in US Dollars to such bank account as
Longport may from time to time notify in writing to FUTURE SCAN.

 

19

 

6.                                       DELIVERY

 

6.1                                 Place of Delivery

 

Longport
agrees to deliver or arrange delivery of the Scanner to the carrier or other
third party nominated by FUTURE SCAN at the place of delivery set out in this
Agreement or, if not so nominated or set out, such person or place notified to
Longport by FUTURE SCAN and in such manner as Longport decides is appropriate
in the circumstances.  FUTURE SCAN agrees
to pay all costs and comply with all requirements relating to the Scanner after
such time.  Longport shall not be
responsible or liable in any way for the costs of any carriage after such
delivery or for non-delivery or delay in such carriage, any loss of or damage
to the Scanner during such carriage or the act or omission (negligent or
otherwise) of the carrier or other third party in connection with any such
carriage.

 

6.2                                 Time of Delivery

 

Delivery
shall take place when the Scanner is delivered to the carrier or other third
party nominated by FUTURE SCAN as set out in Condition 6.1.  Longport shall use its reasonable endeavors
to meet any estimated or requested dates for delivery but shall not be liable
in any way for any failure to meet any such date.  The time of delivery shall not be of the
essence of this Agreement, subject to Clause 6.4 of the Agreement.

 

6.3                                 Delivery of Scanner Not Accepted

 

In the
event of the carrier or other third party nominated by FUTURE SCAN as set out
in Condition 6.1 not accepting delivery of the Scanner, Longport shall be free
to store the Scanner at the risk and expense of FUTURE SCAN and/or to re-sell
without prejudice to Longport’s rights and remedies against FUTURE SCAN.

 

7.                                       TITLE AND RISK

 

7.1                                 Title in Scanner

 

Legal
and beneficial title in the Scanner shall remain in Longport until Longport has
received payment in full for the Scanner.

 

20

 

7.2                               Seller’s
License to Enter Premises

 

For
the purpose of recovery of the Scanner at any time after payment therefore
shall have become due and before legal and beneficial title therein has passed,
FUTURE SCAN grants Longport an irrevocable license to enter on any FUTURE SCAN
Group premises where the Scanner is situated (or is reasonably thought to be
situated) to repossess it and FUTURE SCAN agrees to pay any costs of
repossession.

 

7.3                                 Risk in Scanner Notwithstanding the above, risk in the
Scanner shall pass to FUTURE SCAN at the time of delivery of the goods to the
carrier of other third party nominated by FUTURE SCAN.

 

8.                                       PRODUCT WARRANTY

 

The Scanner,
excepting the probe, will be supplied with a one-year limited warranty provided
by Longport. If during that period the Scanner develops a fault the unit so affected
will be repaired or replaced, at Longport’s discretion, free of charge. This
provision does not include Scanners that have been incorrectly used or
otherwise damaged by the user or other party. The probe will be provided with a
three month limited warranty under the same terms.

 

Units requiring
repair under warranty shall be returned to a Longport’s facility. End users
shall advise Longport of any fault by phone, e-mail, fax or through Longport’s
WEB site and if the reported problem cannot be corrected by simple remedial
actions (e.g. confirming connecting power cords have not come loose, power is
being provided from the wall socket, system software is being used and
interpreted correctly etc), which will be undertaken in conjunction with phone
and or e-mail communications, the unit or component will be collected by
Longport or an agent of Longport for repair or replacement. If the unit cannot
be repaired or replaced within four business days Longport will provide a loan
system, unit the original unit is either repaired or permanently replaced.

 

No unit shall be
returned to Longport without the end-user first obtaining a return reference
from Longport.

 

21

 

If a unit is
returned without the end user first obtaining a return reference Longport shall
automatically level an administration charge as defined in Schedule 3.

 

If a unit is
returned to Longport and is found to have no fault or one that simple remedial
action as illustrated above would have solved, then Longport will have a right
to charge a set administration as defined in Schedule 3 fee plus obtain
reimbursement for shipping fees incurred.

 

9.                                       PRODUCT UPDATES

 

Longport shall
offer to FUTURE SCAN and or its subagents all appropriate product updates.
Where these updates are in the form of software updates to the scanner program
these shall be offered free of charge for the twelve months following product
purchase.

 

10.                                 SELLER’S RESERVATION

 

If the
Scanner arrives in such state, through damage in transit or otherwise as would
entitle FUTURE SCAN to reject the Scanner, Longport reserves the right to
repair or replace the Scanner.

 

11.                               EXCLUSIONS AND LIMITATIONS OF LIABILITY

 

11.1                        No Liability for indirect Loss

 

Longport
shall not in any circumstances be liable for any claim, whether arising in
agreement, tort or otherwise, for consequential, economic, special or other
indirect loss including without limitation losses calculated by reference to
profits, agreements, business, goodwill, income, production or accruals and
whether or not arising out of any liability of FUTURE SCAN to any other party.

 

11.2                           Liability for Death and Personal Injury

 

Notwithstanding
anything to the contrary in this Agreement, nothing in this Agreement shall
exclude, restrict or limit Longport’s liability for death or personal injury
resulting from Longport’s negligence. Longport shall provide product liability
insurance with reputable insurance companies in the amount of at least $5
million per claim or series of connected claims.

 

22

 

11.3                           Acceptance by Buyer

 

FUTURE
SCAN accepts that the limitations and exclusions set out in these Conditions
are reasonable having regard to all the circumstances including, without
limitation, the Price.

 

11.4                           Condition to Survive Termination of this Agreement

 

This
Condition 11 (Exclusions and Limitations of Liability) shall survive the
termination of this Agreement for whatever cause.

 

12.                                 EXAMINATION AND CLAIMS

 

12.1                           Examination of Scanner by Buyer

 

FUTURE
SCAN, its sub-agents or end user customers shall upon delivery as set out in
Condition 6.1 (Place of Delivery) examine the Scanner and shall promptly notify
Longport, and the carrier where relevant, of any damage or defect reasonably
apparent on reasonable examination of the Scanner.  Claims in respect of any loss of or damage to
the Scanner in transit shall be made within the period set out in Condition 17
(Loss or Damage in Transit).  Claims in
respect of any other damage, defect or shortage must be made within 10 Business
Days following the time at which the Scanner is delivered as set out in
Condition 6.1 (Place of Delivery). 
Notwithstanding the above, claims for defects pursuant to Condition 8
(Seller’s Reservation) must be made within 10 Business Days after any such
defect is discovered.

 

12.2                           Buyer to Notify Seller if Scanner Not Delivered

 

FUTURE
SCAN or its sub-agents shall notify Longport if the Scanner is not delivered
within 72 hours of the expected date of delivery as notified by Longport.

 

12.3                           Claims and Notifications to be in Writing

 

All
claims and notifications pursuant to this Condition 12 must be made to Longport
by FUTURE SCAN in writing within the relevant period set out above, giving full
details of any alleged loss, damage, defect, shortage or delay.  Longport shall not be obliged to consider any
claim not made in accordance with this Condition.

 

23

 

12.4                           Longport to be Given Opportunity to Inspect Scanner

 

In all
cases where complaints of damage, defects or shortages are made, FUTURE SCAN
must afford Longport a reasonable opportunity to inspect the Scanner before any
use is made of it by FUTURE SCAN.

 

12.5                           No Return of Scanner Without Longport’s Consent

 

In no
circumstances may the Scanner be returned to Longport by FUTURE SCAN without
the prior written consent of Longport. 
The administration charge specified in Schedule 3 by Longport may
be deducted from any credit allowed by Longport, or paid to Longport by FUTURE
SCAN upon demand, where the Scanner is returned and no damage, defect, shortage
on the part of Longport is found.

 

13.                                 DUTY OF CARE OF FUTURE SCAN

 

13.1                           Distributor to Comply with Statutory and Common Law Duties

 

FUTURE
SCAN and/or its sub-agents shall be responsible for all health, safety and
other safety requirements in connection with the delivery, use or storage of
the Scanner and shall comply with all relevant statutory provisions or other
regulations relating to the Scanner for the period after risk in the Scanner has
passed to FUTURE SCAN pursuant to Condition 7.3 (Risk in Scanner).

 

14.                                 INSURANCE

 

FUTURE
SCAN shall effect and maintain insurance of the Scanner at its own expense at
all times after risk in the Scanner shall have passed to FUTURE SCAN until
title in the Scanner shall have passed under Condition 7 (Title and Risk) to
its full replacement value against all risks.

 

15.                               TRADE
MARKS

 

FUTURE
SCAN shall ensure that any trade marks of Longport or other words or marks
affixed to or used in relation to the Scanner are not obliterated, obscured or
omitted without Longport’s prior written consent.  FUTURE SCAN shall not add, affix or use any
additional words or marks to or in relation to the Scanner without Longport’s
prior written consent.  FUTURE SCAN shall
not process or alter the Scanner without Longport’s prior written consent to
the continued use on or in relation to the Scanner of any trade marks of
Longport or any other words or marks affixed to or used in relation to the
Scanner.

 

24

 

16.                                 FORCE MAJEURE

 

Longport
and FUTURE SCAN shall not be liable for any loss, damage or otherwise as a
direct or indirect result of the failure to perform or delay in performing any
of its obligations nor shall there be a breach of the Agreement as a result of
the occurrence of any cause whatsoever beyond its control, including without
limitation acts of God, war, hostilities, riot, terrorism, explosion, accident,
flood, sabotage, lack of adequate fuel, power, raw materials, containers,
transportation or labor, strike, lock-out or injunction (provided that Longport
or FUTURE SCAN or FUTURE SCAN’s sub-agents shall not be required to settle a
labor dispute against their own best judgment) compliance with Federal and
State laws, regulations or orders, breakage or failure of machinery or
apparatus, or any other cause, whether or not of the class or kind enumerated,
which affects performance of the Agreement arising from or attributable to
acts, events, non-happenings, omissions or accidents beyond the reasonable
control of the party affected.

 

17.                                 SUB-CONTRACTORS

 

Longport
shall be entitled to sub-contract the performance of the whole or part of this
Agreement without prior notice to or the consent of FUTURE SCAN.  In any contract of which these Conditions
form the basis Longport contracts for and on behalf of itself and its
sub-contractors.

 

18.                                 SPECIAL PACKING

 

An
additional charge will be made to FUTURE SCAN for any special packaging
required or requested by FUTURE SCAN.  FUTURE
SCAN or its sub-agents shall retain all scanner packaging for the purposes of
returning the Scanner to Longport, in accordance with the provisions of this
Agreement.

 

19.                               LOSS
OR DAMAGE IN TRANSIT

 

Longport
shall repair or replace free of charge any Scanner lost or damaged in transit
or not delivered in accordance with this Agreement provided that FUTURE SCAN
shall give Longport written notice of any loss, damage or non-delivery
(together with full details of the loss, damage or non-delivery) at least 2
Business Days prior to the latest date on which notification of any such loss,
damage or non-delivery must be made to any carrier in accordance with that
carrier’s conditions of carriage and, in any event, no later than 10

 

25

 

Business
Days after the time at which the Scanner is delivered as set out in Condition
6.1 (Place of Delivery) or is due to have been so delivered under this
Agreement.

 

20.                                 SAFETY

 

FUTURE
SCAN and its sub-agents shall comply fully with all user instructions and
safety recommendations issued by Longport in relation to the Scanner and shall
employ an adequate number of suitably qualified personnel to operate the
Scanner and Longport shall not be liable to FUTURE SCAN as a result of FUTURE
SCAN failing fully to observe the provisions of this Condition, save where
death or personal injury results from Longport’s negligence.

 

21.                                 CONFIDENTIAL INFORMATION

 

21.1                           Except
as provided by Conditions 21.2 and 21.3, FUTURE SCAN and Longport shall at all
times during the continuance of this Agreement and after its termination :

 

(a)                                  use
their best endeavors to keep all Restricted Information confidential and
accordingly not to disclose any Restricted Information to any other person; and

 

(b)                                 not
use any Restricted Information for any purpose other than the performance of
the obligations under this Agreement.

 

21.2                           Any
Restricted Information may be disclosed by FUTURE SCAN or Longport to :

 

(a)                                  any
customer or prospective customer of FUTURE SCAN;

 

(b)                                 any
governmental or other authority or regulatory body; or

 

(c)                                  any
employees of FUTURE SCAN or Longport or of any of the aforementioned persons,

 

to
such an extent only as is necessary for the purposes contemplated by this
Agreement or as is required by law and subject in each case to FUTURE SCAN or
Longport using their best endeavors to ensure that the person in question keeps
the same confidential and does not use the same except for the purposes for
which the disclosure is made.

 

21.3                           Any
Restricted Information may be used by the receiving party for any purpose or
disclosed by the receiving party to any other person, to the extent only that
it is at the date

 

26

 

hereof, or
hereafter becomes public knowledge through no fault of the receiving party
(provided that in doing so the receiving party shall not disclose any
Restricted Information which is not in the public domain).

 

21.4                           For the
purpose of this Condition 21, “Restricted Information” means all information
(whether written, oral or in electronic form) relating to Longport or FUTURE
SCAN and their businesses :

 

(a)                                  delivered
to the other party under this Agreement;

 

(b)                                 otherwise
in the possession or under the control of the receiving party, and including
without limitation any drawings, designs, specifications relating to the
Scanner and/or any modification of the Scanner; and

 

(c)                                  for
the benefit of doubt the terms of this Agreement shall also be considered
restricted information, but its existence shall not.

 

27

 

Schedule 3

 

Support Services and Price Schedule

 

1                                         Optional
Scanner Services and Ancillary Components

 

Longport will also
provide enhanced product support packages and application training courses for
which additional fees may be charged.

 

System
Training and Direct Support

 

“System training” to be
undertaken as close as practical to the delivery date of the Scanner. The “system
training” shall either be undertaken at Longport offices or those of the end
user. Whereas the end users offices are within 150 miles radius of Longport’s
offices no additional charge for on-site training shall be made.

 

System training will take
one full working day (~5 hours). The training course will provide tuition to a
maximum of five individuals. (If end users wish more than five people to attend
this course an additional fee may be charged.)

 

Direct customer support
for twelve months from the date of purchase. This “customer support” shall take
the form of direct telephone (1-800 number) and e-mail support as well as
WEB based capabilities. Additional visits to customer’s facilities shall be
undertaken at Longport’s discretion, it would however be expected that a
follow-up visit to every end user facility will normally be made within two
months of system training.

 

Customer Support shall
only be provided via individuals who have attended and passed the “system
training” course.

 

Product warranty shall be
as described in Clause 8 of the Terms and Conditions.

 

Cost $2,000 per scanner

 

Extended
Three-Year Warranty. This will extend the product warranty to
three years (excepting the probe) Cost $2,200
per system.

 

Software
Updates. $500 per year after the first year or $800 for two years if paid in advance.

 

28

 

Probe
Exchange. The probe(s) will be supported beyond the warranty
period through an exchange system, where faulty probes will be returned to
Longport and exchanged for replacement units. (Longport shall ship the
replacement probe within two business days of receipt of the faulty unit and
payment.) Each replacement unit will be provided with a three-month warranty. Cost $500 per exchange. (Price assumes
probe has not been damaged by improper use or handling.)

 

Additional
Probes. Additional probe will be supplied at a cost of $4,000 per unit.

 

Ancillary
Equipment.

 

Longport can supply the
following ancillary equipment.

 

•                                          Cart
with medical grade UPS(c) $1,000 per
unit.

 

•                                          Printers
/ digital cameras price on application

 

•                                          Probe
Membranes $25.00 per box of 100 (exclude shipping)

 

•                                          Ultrasound
coupling jell $36.00 per case of 12 bottles (excluding shipping)

 

Administration
Fee. The administration fee to be charged to users that
return goods without obtaining a
return reference or return goods that are found not to be at fault will be $50,
this fee excludes any shipping costs incurred by Longport.

 

Clinical
Application Training Longport is developing a series of
clinical training courses.

 

Initially a wound
assessment and prevention package will be offered. This course will undertaken
at the user’s premises or at Longport’s offices over two full days (time
includes system training). This training package will include consultation on
Scanner protocols for wound assessment / prevention outside of the training
course. The cost of the course will be $3,500
per facility  (five people
attending course).

 

(It is also possible to
provide this course to a group of facilities, price on application.)

 

(c) If FUTURE SCAN,
one of its sub-agents or any end user wishes to supply their own UPS to operate
with the Scanner they must advise Longport of the unit they intend to use and
obtain written approval from Longport on the suitability of that unit. Failure
to do this could invalidate the Scanner warranty and negate Longport’s product
liability responsibility.

 

29

 

Other clinical training
courses will be added. Also, additional courses will be run for staff members
that joined subsequent to the system training or could not attend for other
reasons. These courses will be run at single venues every few months.

 

Data
Achieving and Third Party Image Assessment

 

Packages can be developed
to address the needs of individual centers or groups who require remote data
achieving and or third party image assessment.

 

30

 

	
  SIGNED by

  
	
   

  
	
  for and on
  behalf of

  
	
  LONGPORT
  INCORPORATED

  
	
  Authorized
  Signatory

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Paul D. Wilson,

  
	
  President and
  Director

  
	
   

  
	
  in the presence
  of :

  
	
   

  
	
  Witness :

  
	
  Signature

  	
   

  	
   

  
	
   

  
	
   

  
	
  Name

  
	
   

  
	
   

  
	
  SIGNED
  by

  
	
   

  
	
  for and on
  behalf of

  
	
  FUTURE
  SCAN INCORPORATED

  
	
  Authorized
  Signatory

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Dr David A
  Goodman

  
	
  President

  
	
   

  
	
  in the presence
  of :

  
	
   

  
	
   

  
	
  Witness :

  
	
  Signature

  	
   

  	
   

  
	
   

  
	
   

  
	
  Name

  
						

 

31

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