Document:

Unassociated Document

    
      Exhibit
        10.2

    

    
 

     FIRST
      AMENDMENT TO LEASE AGREEMENT

    

    

    This
      FIRST
      AMENDMENT TO LEASE AGREEMENT
      (this
“First Amendment”) made this 2nd
      day of
      April , 2007 ("Execution Date"), by and between TR
      STONE MANOR CORP.,
      a
      Delaware corporation (hereinafter called “Landlord”), and DISCOVERY
      LABORATORIES, INC., a
      Delaware corporation (hereinafter called “Tenant”).

    

    WHEREAS,
      Landlord's predecessor in interest, Stone Manor Corporate Center, L.P. ("SMCC")
      and Tenant entered into that certain Office Lease Agreement dated May 26, 2004
      ("Original Lease"), as amended by that certain Addendum to Office Lease
      Agreement between SMCC and Tenant dated of even date as the Original Lease
      ("Addendum"), as further amended by that certain Commencement Date Agreement
      between SMCC and Tenant dated January 19, 2005 ("Commencement Date Agreement",
      and together with the Original Lease and the Addendum, the "Lease"), under
      which
      Landlord demised to Tenant the premises consisting of approximately 39,594
      rentable square feet of office space on the first and second floors (the
“Premises") in the building commonly known as Stone Manor Corporate Center,
      2600
      Kelly Road, in Doyleston and Warrington Townships, Pennsylvania (the
“Building"), all as more particularly set forth in the Lease, for a Lease Term
      expiring February 28, 2010.

    

    WHEREAS,
      Tenant
      desires to undertake certain improvements to the Premises, Building and
      surrounding area, which improvements include (i) renovation of the Premises
      to
      include a laboratory; (ii) the installation of wiring, plumbing, duct work
      and
      related appurtenances in the Building; (iii) the installation of an emergency
      power generator near the Building; and (iv) other related work, all as set
      forth
      on the plans and specifications prepared by Trident Engineering, Inc., attached
      to the Work Letter as Schedule
      1
      (the
      "Plans"), approved by the Landlord, and as the same may be revised with
      Landlord's prior written approval (the "Tenant's Work").

    

    WHEREAS,
      Landlord has approved the Tenant's Work, subject to (i) Tenant's covenant to
      pay
      for the costs associated with the modifications to the HVAC in the Premises
      required to make such HVAC sufficient for the increased ventilation needs
      created by Tenant's laboratory and generator; and (ii) the terms of this First
      Amendment, and the Work Letter and Generator License Agreement attached hereto
      as Exhibit
      A and
      Exhibit
      B,
      respectively, and incorporated herein by reference and made a part
      hereof

    

    WHEREAS,
      Landlord and Tenant desire to extend the Lease Term and to amend certain other
      provisions of the Lease, as more particularly set forth in this First
      Amendment.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements herein set forth, the mutual agreements
      set forth in the Lease, and other good and valuable consideration, the receipt
      and sufficiency of which are hereby acknowledged, Landlord and Tenant have
      agreed, and hereby agree that the Lease is amended as follows:

    

    
      	1.  	
              Recitals
                Incorporated.
                The Recitals set forth above are hereby incorporated by this reference
                and
                shall be deemed terms and provisions hereof with the same force and
                effect
                as if fully set forth in this Section 1.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	2.  	
              Defined
                Terms.
                Capitalized terms which are not otherwise defined herein shall be
                deemed
                to have the same meanings herein as are ascribed to such terms in
                the
                Lease. All references herein to “Lease” shall be deemed to be references
                to the Lease, as amended hereby.

            

    

     

    
      	3.  	
              Term.
                The Lease Term is hereby extended for a period of thirty-six (36)
                months
                commencing on March 1, 2010, and expiring on February 28, 2013 (the
                "Extension Term").

            

    

     

    
      	4.  	
              Base
                Rental.
                During the Extension Term, Base Rental due under the Lease shall
                be
                increased to the amounts set forth in the following schedule, which
                shall
                be payable in accordance with the provisions of the
                Lease:

            

    

     

    
      	
              Period

            	
              Base
                Rental 

              (annual)

            	
              Monthly
                Installments of Base Rental

            
	
              March
                1, 2010 - February 28, 2011

            	
              $979,951.56

            	
              $81,662.63

            
	
              March
                1, 2011 - February 29, 2012

            	
              $999,748.56

            	
              $83,312.38

            
	
              March
                1, 2012 - February 28, 2013

            	
              $1,019,545.56

            	
              $84,962.13

            

    

    

    
      	 	 	
              During
                the remainder of the Lease Term and during the Extension Term, Tenant
                shall pay, as rent, the amounts and charges provided in Section 6
                of the
                Original Lease with respect to Tenant's Building Proportionate Share
                and
                Tenant's Site Proportionate Share, as the case may be, of the Operating
                Expenses, together with all other amounts and charges payable by
                Tenant to
                Landlord under the Lease. 

            

    

    

    
      	5.  	
              Security
                Deposit.
                Subject to the provisions of Section 6 of the Addendum, Landlord
                shall
                continue to hold during the Extension Term the security deposit consisting
                of $600,000.00, in the form of a letter of credit dated September
                24, 2004
                and amended on December 29, 2005, issued by Wachovia Bank (the "Letter
                of
                Credit"). Section 6(f) of the Addendum is hereby deleted in its entirety
                and the following is substituted in lieu thereof: "As of March 1,
                2010,
                provided that no Event of Default has occurred and is continuing,
                and
                there is no existing circumstance with which the passage of time
                or the
                giving of notice, or both, would give rise to an Event of Default,
                Tenant
                may reduce the Letter of Credit to the amount of $400,000.00 for
                the
                remainder of the Extension Term by (i) delivering to Landlord either
                cash
                or a substitute letter of credit in the reduced amount; (ii) modifying
                the
                Letter of Credit to the reduced amount without changing any of the
                other
                provisions thereof, including the Landlord's ability to draw on the
                Letter
                of Credit, if necessary; or (iii) otherwise reducing the Letter of
                Credit
                in a manner mutually acceptable to both Landlord and
                Tenant."

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	6.  	
              Condition
                of the Premises.
                Tenant is in possession of the Premises and accepts the same "as
                is"
                without any representations or warranties of any kind, subject to
                conditions that are the responsibility of the Landlord to repair
                or
                maintain pursuant to the express provisions of the Lease. No agreement
                of
                Landlord to alter, remodel, redecorate, repair or improve the Premises,
                or
                the Building, or to provide Tenant with any credit or allowance for
                the
                same, and no representation regarding the condition of the Premises
                or the
                Building have been made by or on behalf of Landlord or relied upon
                by
                Tenant, except as otherwise expressly provided with respect to the
                Tenant's Work described in Section 7 below.

            

    

     

    
      	7.  	
              Tenant's
                Work.
                Tenant shall construct those certain improvements to the Premises
                and duct
                work and generator installation in the Building, described as the
                Tenant's
                Work in the Work Letter, Exhibit
                A,
                which is attached hereto and made a part hereof, in accordance with
                the
                Plans (attached to the Work Letter), and in a good and workmanlike
                manner.
                The Tenant's Work shall be completed at Tenant's cost and expense,
                subject
                to Landlord's Contribution (as defined in the Work Letter). In accordance
                with the provisions of Section 11.4 of the Original Lease, Tenant
                shall be
                required, at its cost and expense, to: (i) remove, upon the expiration
                or
                earlier termination of the Lease: (A) the laboratory fixtures and
                equipment and any exhaust duct work for the operation of the laboratories
                installed as part of the Tenant's Work, including the fans from the
                roof
                of the Building, all hoods, and exhaust venting; (B) the generator
                and
                related appurtenances installed as part of the Tenant's Work; and
                (C)
                plumbing and electrical fixtures and other equipment (which is not
                located
                within the walls or under the floor of the Premises or the Building
                and is
                not common to a general office build-out), if any, installed within
                the
                Premises or the Building as part of the Tenant's Work; (ii) restore
                the
                Premises and the Building to broom-clean condition, reasonable wear
                and
                tear excepted; and (iii) repair any damage to the Premises or the
                Building
                resulting from such removal and restoration. Notwithstanding the
                foregoing, Tenant shall not be required to demolish or restore: (1)
                any
                plumbing fixtures or equipment within the walls of the Premises or
                the
                Building installed or constructed as part of the Tenant's Work; and
                (2)
                any electrical fixtures or equipment installed as part of the Tenant's
                Work which are considered common to a standard office build-out.
                If Tenant
                fails to remove any of the Tenant's Work referenced in subsections
                (A),
                (B) and (C) above or restore the Premises and/or Building to the
                condition
                required or repair any damage, then Landlord may perform such actions,
                and
                Tenant shall reimburse Landlord for any and all costs incurred by
                Landlord
                in connection therewith. Any other improvements to the Premises shall
                be
                made by Tenant at the sole cost and expense of
                Tenant.

            

    

     

    
      	8.  	
              Termination
                of Termination Option.
                Upon execution of this First Amendment, Section 3 of the Addendum,
                Termination Option, shall become null and void and of no further
                force and
                effect.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	9.  	
              Right
                of First Offer.
                During the remainder of the Lease Term and during the Extension Term,
                subject to any existing rights of other tenants, and provided that
                Tenant
                is not then in default under the Lease, Tenant shall be granted a
                right of
                first offer, on the terms and conditions set forth in Section 5 of
                the
                Addendum, on any space that comes available within the Building,
                or any
                buildings in Stone Manor Corporate Center currently owned or later
                acquired, controlled or owned by Landlord, or any affiliate of or
                other
                company related to Landlord.

            

    

     

    
      	10.  	
              Extension
                Option.
                The Extension Option, as set forth in Section 8 of the Addendum,
                shall be
                modified and amended such that Tenant shall only be entitled to one
                (1)
                additional term of three (3) years, commencing upon the expiration
                of the
                Extension Term (the "New Extension Option"). Tenant must notify Landlord
                of its intention to exercise the New Extension Option, in writing,
                at
                least nine (9) months prior to the expiration of the Extension Term.
                Except as otherwise expressly provided herein, the New Extension
                Option
                shall be exercised in accordance with the terms and conditions set
                forth
                in Section 8 of the Addendum.

            

    

     

    
      	11.  	
              Termination
                of First Amendment.
                Notwithstanding any other provision hereof, at any time prior to
                commencement of construction of Tenant's Work, but in no event later
                than
                May 15, 2007, Tenant shall have the right to terminate this First
                Amendment by providing written notice thereof to Landlord ("Tenant's
                Termination Notice"). Upon Landlord's receipt of Tenant's Termination
                Notice, (i) this First Amendment shall become null and void and of
                no
                further force and effect; (ii) neither Landlord nor Tenant shall
                be bound
                by any of the terms and conditions hereof; and (iii) the Lease shall
                continue in full force and effect without regard to this First
                Amendment.

            

    

     

    
      	12.  	
              Notices.
                Notwithstanding anything to the contrary contained in the Lease,
                all
                notices from Tenant to Landlord under the Lease shall henceforth
                be sent
                to the following:

            

    

     

    TR
      Stone
      Manor Corp.

    c/o
      Capri
      Capital Partners LLC

    875
      N.
      Michigan Ave.

    Suite
      3430

    Chicago,
      IL 60611

    Attention:
      Asset Manager

    

    with
      a
      copy to:

    

    Holland
      & Knight LLP

    131
      South
      Dearborn Street

    30th
      Floor

    Chicago,
      IL 60603

    Attention:
      James T. Mayer.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	13.  	
              Broker.
                Landlord and Tenant represent and warrant to each other that they
                have had
                no dealings with any real estate broker, finder or other person entitled
                to compensation for services rendered in connection with the negotiation
                or execution of this First Amendment other than CB Richard Ellis,
                Inc.,
                representing Landlord, and Cushman & Wakefield of Pennsylvania, Inc.,
                representing Tenant (the "Brokers"). Landlord and Tenant each agree
                to
                defend, indemnify and hold harmless the other from and against any
                claim
                for broker's or finder's fees or commissions made by any entity,
                other
                than the Brokers, asserting such claim by, through or under it. Landlord
                shall be responsible to pay a commission to the Brokers pursuant
                to a
                separate agreement.

            

    

     

    
      	14.  	
              Counterparts.
                This First Amendment may be executed in counterparts, each of which
                shall
                constitute an original, and all of which, when taken together, shall
                constitute one and the same
                instrument.

            

    

     

    
      	15.  	
              Time
                is of the Essence.
                Time is of the essence for this First Amendment and the Lease and
                each
                provision hereof and thereof.

            

    

     

    
      	16.  	
              Submission
                of First Amendment.
                Submission of this instrument for examination shall not bind Landlord
                and
                no duty or obligation on Landlord shall arise under this instrument
                until
                this instrument is signed and delivered by Landlord and
                Tenant.

            

    

     

    
      	17.  	
              Entire
                Agreement.
                This First Amendment and the Lease contain the entire agreement between
                Landlord and Tenant with respect to Tenant’s leasing of the Premises.
                Except for the Lease and this First Amendment, no prior agreements
                or
                understandings with respect to the Premises shall be valid or of
                any force
                or effect.

            

    

     

    
      	18.  	
              Severability.
                If any provision of this First Amendment or the application thereof
                to any
                person or circumstance is or shall be deemed illegal, invalid or
                unenforceable, the remaining provisions hereof shall remain in full
                force
                and effect and this First Amendment shall be interpreted as if such
                illegal, invalid or unenforceable provision did not exist
                herein.

            

    

     

    
      	19.  	
              Lease
                In Full Force and Effect.
                Except as modified by this First Amendment, all of the terms, conditions,
                agreements, covenants, representations, warranties and indemnities
                contained in the Lease remain in full force and effect. In the event
                of
                any conflict between the terms and conditions of this First Amendment
                and
                the terms and conditions of the Lease, the terms and conditions of
                this
                First Amendment shall prevail.

            

    

     

    
      	20.  	
              Successors
                and Assigns.
                This First Amendment is binding upon and shall inure to the benefit
                of the
                parties hereto and their respective heirs, legal representatives,
                successors and assigns.

            

    

     

    
      	21.  	
              Integration
                of the First Amendment and the Lease.
                This First Amendment and the Lease shall be deemed to be, for all
                purposes, one instrument. In the event of any conflict between the
                terms
                and provisions of this First Amendment and the terms and provisions
                of the
                Lease, the terms and provisions of this First Amendment shall, in
                all
                instances, control and prevail. 

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	22.  	
              Patriot
                Act.
                Landlord and Tenant represent and warrant that they are not acting,
                directly or indirectly, for or on behalf of any person, group, entity,
                or
                nation named by the United States Treasury Department as a Specially
                Designated National and Blocked Person, or for or on behalf of any
                person,
                group, entity, or nation designated in Presidential Executive Order
                13224
                as a person who commits, threatens to commit, or supports terrorism;
                and
                that they are not engaged in this transaction directly or indirectly
                on
                behalf of, or facilitating this transaction directly or indirectly
                on
                behalf of, any such person, group, entity, or nation. Each party
                hereby
                agrees to defend, indemnify, and hold harmless the other party from
                and
                against any and all claims, damages, losses, risks, liabilities,
                and
                expenses (including reasonable attorneys’ fees and costs) arising from or
                related to any breach of the foregoing representation and
                warranty.

            

    

     

    
      	23.  	
              Exculpation.
                It is understood and agreed expressly by and between the parties
                hereto,
                anything herein to the contrary notwithstanding, that each and all
                of the
                representations, warranties, covenants, undertakings and agreements
                made
                herein or in the Lease on the part of Landlord, while in form purporting
                to be the representations, warranties, covenants, undertakings and
                agreements of Landlord, are nevertheless each and every one of them
                made
                and intended, not as personal representations, warranties, covenants,
                undertakings and agreements by Landlord or for the purpose or with
                the
                intention of binding Landlord personally, but are made and intended
                for
                the purpose only of subjecting Landlord's interest in (i) the Building,
                (ii) the Premises and (iii) the building located at 2700 Kelly Road,
                in
                Doyleston and Warrington Townships, Pennsylvania (the "2700 Building")
                to
                the terms of this First Amendment and the Lease and for no other
                purpose
                whatsoever, and in case of default hereunder by Landlord, Tenant
                shall
                look solely to the interests of Landlord in the Building and the
                2700
                Building; that Landlord shall have no personal liability whatsoever
                to pay
                any indebtedness accruing hereunder or to perform any covenant, either
                express or implied, contained herein; and that no personal liability
                or
                personal responsibility of any sort is assumed by, nor shall at any
                time
                be asserted or enforceable against, said Landlord, individually or
                personally, on account of any representation, warranty, covenant,
                undertaking or agreement of Landlord in this First Amendment or the
                Lease
                contained, either express or implied, all such personal liability,
                if any,
                being expressly waived and released by Tenant and by all persons
                claiming
                by, through or under Tenant. Notwithstanding the provisions of the
                foregoing exculpation clause, nothing therein is intended to limit
                or
                preclude payment of the Landlord's obligations and claims of the
                Tenant
                from public liability insurance, excess liability insurance (umbrella
                policies), fire and casualty insurance policies and all other policies
                of
                insurance affecting the Premises maintained by the
                Landlord.

            

    

     

    

    (EXECUTION
      PAGE FOLLOWS)

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      Landlord and Tenant have executed this First Amendment as of the day and year
      first above written.

    

    
      	 	 	 
	WITNESS:	LANDLORD:
	 	 
	 	TR STONE MANOR CORP., 
	 	a Delaware corporation
	 
 	 
 	 
 
	By:	By:  	/s/ 
	
              
                
Name: Burma
                G James 

            	
              
Name: Chris
              Ball
	 	Its: Vice
              President

    

    
      	 	 	 
	 	 
	WITNESS:	TENANT:
	 	 
	 	DISCOVERY LABORATORIES,
              INC.,
	 	a Delaware corporation
	 
 	 
 	 
 
	By:	By:  	/s/ 
	
              
                
Name:Kathleen
                Fitzgibbon 

            	
              
Name: Robert
              Capetola
	 	Its: CEO

    

         

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    WORK
      LETTER

    

    It
      is the
      intent of this Work Letter that Tenant shall be permitted freedom in the design
      and layout of the Premises, consistent with all applicable building and
      environmental codes and requirements of law, including without limitation the
      Americans with Disabilities Act, and with sound architectural and construction
      practice in first-class office buildings, provided that neither the design
      nor
      the implementation of the Tenant's Work shall cause any interference to the
      operation of the Building's HVAC, mechanical, plumbing, life safety, electrical
      or other systems or to other Building operations or functions, nor shall they
      increase the maintenance or utility charges for operating the Building, except
      as otherwise expressly provided herein. Capitalized terms used herein, unless
      otherwise defined in this Work Letter, shall have the respective meanings
      assigned to them in the Lease or the First Amendment, as the case may be.

     

    For
      and
      in consideration of the First Amendment and the mutual covenants contained
      herein and in the Lease, Landlord and Tenant hereby agree as
      follows:

     

    1  .Tenant's
      Work.
      Subject
      to the Landlord's Contribution (described in Paragraph 8 hereof), Tenant, at
      its
      cost and expense, shall perform or cause to be performed the work in the
      Premises, Building and surrounding area provided for in the Plans, as defined
      in
      Paragraph 2(c) hereof, (the "Tenant's
      Work")
      in
      accordance with the provisions of this Work Letter and the Generator License
      Agreement in the form attached as Exhibit
      B.
      Tenant's Work shall be constructed in a good and workmanlike fashion, in
      accordance with the requirements set forth herein and in compliance with all
      applicable laws, ordinances, rules and other governmental requirements. Tenant
      shall commence the construction of Tenant's Work promptly following completion
      of the preconstruction activities provided for in Paragraph 3 below and shall
      diligently proceed with all such construction. Tenant shall coordinate Tenant's
      Work so as avoid unreasonable interference with any other work being performed
      by or on behalf of Landlord and other tenants at the Building, except as
      otherwise expressly set forth herein.

     

    2  .Pre-Approved
      Activities.

     

    (a )
      Prior
      to
      the execution and delivery of the First Amendment by Landlord and Tenant, Tenant
      has submitted the following information and items to Landlord for Landlord's
      review and approval:

     

    (i) the
      names
      and addresses of Tenant's contractors (and the contractors' subcontractors),
      including any architects and engineers, to be engaged by Tenant for the Tenant's
      Work ("Tenant's
      Contractors"),
      which
      have already been submitted to and approved by Landlord; and

    

    (ii) the
      Plans
      for the Tenant's Work, which Plans have been approved by Landlord in accordance
      with Paragraph 3(c) below.

    

    (b )
      Tenant
      shall update such information and items by providing written notice to Landlord
      of any changes.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    (c )
      As
      used
      herein, the term "Plans"
      shall
      mean (i) the plans and specifications prepared by Trident Engineering, Inc.
      attached hereto as Schedule
      1
      and
      incorporated herein, as such plans and specifications may be revised from time
      to time in accordance with Paragraph 5 below. The Plans have been approved
      by
      Landlord, and such approval by Landlord shall in no way be deemed to be a
      representation or warranty of Landlord that such Plans are adequate for any
      use
      or comply with any applicable laws, ordinances or regulations or other
      governmental requirements; or be deemed to be an acceptance or approval of
      any
      element therein contained which is in violation of any applicable laws,
      ordinances, regulations or other governmental requirements. 

     

    3. Pre-Construction
      Activities.

     

    (a) No
      Tenant's Work shall be undertaken or commenced by Tenant in the Premises
      until:

     

    (i) all
      necessary building permits, governmental approvals, permits and licenses have
      been obtained by Tenant, at Tenant's sole cost and expense; and

    

    (ii) all
      required insurance coverages have been obtained by Tenant, but failure of
      Landlord to receive evidence of such coverage upon commencement of the Tenant's
      Work shall not waive Tenant's obligations to obtain such coverages.

    

    4. Charges
      and Fees.
      Subject
      to Paragraph 8 below, Tenant shall be responsible for all costs and expenses
      attributable to the Tenant's Work. Notwithstanding the foregoing, Tenant shall
      not be responsible for any costs or expenses related to Landlord's review and
      approval of the Plans or Landlord's supervision of Tenant's Work, nor shall
      Tenant be required to furnish any additional security.

     

    5. Change
      Orders. 

     

    (a) All
      changes to the final Plans requested by Tenant must be submitted to Landlord
      in
      writing within a reasonable time after Tenant or Tenant's Contractor makes
      or
      receives changes to such Plans, regardless of whether or not such changes are
      subject to Landlord's prior approval. Material Changes (hereinafter defined)
      to
      the Plans must be approved by Landlord in writing in advance of the
      implementation of such changes as part of the Tenant's Work. Landlord's consent
      to such Material Changes is not to be unreasonably withheld or
      delayed.

     

    (b) Material
      Changes are defined as those changes to the Plans which either:

     

    (i) affect
      the mechanical, electrical, plumbing, HVAC or other systems
      of the Building;

     

    (ii) alter
      or
      affect the exterior or the structure of the Building; or

     

    (iii) alterations
      or additions which cost in excess of $25,000.00.

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    (c) Delays
      caused by Tenant-initiated change orders, including, without limitation, any
      stoppage of Tenant's Work during the change order review process, are solely
      the
      responsibility of Tenant and shall cause no delay in the commencement of the
      Extension Term or the rental obligations set forth in the Lease.

     

    6. Standards
      of Design and Construction and Conditions of Tenant's
      Performance.
      All
      Tenant's Work done in or upon the Premises by Tenant shall be done according
      to
      the standards set forth in this Paragraph 6, except as the same may be modified
      in the Plans approved by or on behalf of Landlord and Tenant.

     

    (a) Tenant's
      Plans and all design and construction of the Tenant's Work shall comply with
      all
      applicable statutes, ordinances, regulations, laws, codes and industry
      standards, including, but not limited to, requirements of Landlord's fire
      insurance underwriters. Approval by Landlord of the Plans shall not constitute
      a
      waiver of this requirement or assumption by Landlord of responsibility for
      compliance. Where several sets of the foregoing laws, codes and standards must
      be met, the strictest shall apply where not prohibited by another law, code
      or
      standard.

     

    (b) Tenant
      shall obtain, at its own cost and expense, all required building permits and,
      when construction has been completed, shall obtain, at its own cost and expense,
      an occupancy permit for the Premises, which permit shall be delivered to
      Landlord. Tenant's failure to obtain such permits shall not cause a delay in
      the
      commencement of the Extension Term or the rental obligations set forth under
      the
      Lease or First Amendment.

     

    (c) Tenant's
      Contractors shall be licensed contractors, possessing good labor relations,
      capable of performing quality workmanship and working in harmony with Landlord's
      contractors and subcontractors and with other contractors and subcontractors
      in
      the Building. 

     

    (d)
      Landlord
      shall have the right, but not the obligation, to perform on behalf of and for
      the account of Tenant, subject to reimbursement by Tenant, any Tenant's Work
      (i)
      which Landlord deems to be necessary on an emergency basis, (ii) which pertains
      to structural components, building systems or the general utility systems for
      the Building, (iii) which pertains to the erection of temporary safety
      barricades or signs during construction, or (iv) which pertains to patching
      of
      the Tenant's Work.

     

    (e)
      Tenant
      shall use only new, first-class materials in the Tenant's Work, except where
      explicitly shown otherwise in the Plans. Tenant shall obtain warranties of
      at
      least one (1) year's duration from the completion of the Tenant's Work against
      defects in workmanship and materials on all Tenant's Work performed and
      equipment installed in the Premises as part of the Tenant's Work.

     

    (f)
      Tenant
      and Tenant's Contractors, in performing Tenant's Work, shall not unreasonably
      interfere with other tenants and occupants of the Building. Tenant and Tenant's
      Contractors shall make all efforts and take all steps appropriate to
      construction activities undertaken in a fully occupied, first-class office
      building so as not to interfere with the operation of the Building and shall,
      in
      any event, comply with all reasonable rules and regulations existing from time
      to time at the Building. Tenant and Tenant's Contractors shall take all
      precautionary steps to minimize dust, noise and construction traffic and to
      protect their facilities and the facilities of others affected by the Tenant's
      Work and to properly police same. Construction equipment and materials are
      to be
      kept within the Premises, and delivery and loading of equipment and materials
      shall be done at such locations and at such time as Landlord shall direct so
      as
      not to burden the construction or operation of the Building. In the event that
      Tenant's Work may disrupt, interfere or in any way affect another tenant's
      use
      of the Building or any portion thereof, Landlord shall use good faith efforts
      to
      secure any approvals that may be required of those tenants. Notwithstanding
      the
      foregoing, Tenant and Tenant's Contractors shall have the right to perform
      the
      Tenant's Work.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    (g)
      Landlord
      shall have the right to order Tenant or any of Tenant's Contractors who
      materially violate the requirements imposed on Tenant or Tenant's Contractors
      in
      performing Tenant's Work to cease Tenant's Work and remove its equipment and
      employees from the Building. No such action by Landlord shall delay the
      commencement of the Lease or the rental and other obligations therein set
      forth.

     

    (h)
      Utility
      costs or charges for any service (including HVAC, hoisting or freight elevator
      and the like) to the Premises shall be the responsibility of Tenant from the
      date Tenant commences the Tenant's Work and shall be paid for by Tenant at
      Landlord's rates. Tenant shall apply and pay for all utility meters required.
      All use of freight elevators is subject to scheduling by Landlord. Tenant shall
      arrange and pay for removal of construction debris and shall not place debris
      in
      the Building's waste containers.

     

    (i)
      Tenant
      shall permit access to the Premises, and the Tenant's Work shall be subject
      to
      inspection, by Landlord and Landlord's architects, engineers, contractors and
      other representatives at all times during the period in which the Tenant's
      Work
      is being constructed and installed and following completion of the Tenant's
      Work.

     

    (j)
      Tenant
      shall proceed with the Tenant's Work expeditiously, continuously and
      efficiently, and shall complete the same on or before December 31, 2007, and
      Landlord shall use reasonable commercial efforts to assist Tenant with the
      completion of the Tenant's Work on or before said date. Tenant shall notify
      Landlord upon completion of the Tenant's Work and shall furnish Landlord with
      such further documentation as may be necessary under Paragraph 8 below.

     

    (k)
      Tenant
      shall have no authority to deviate from the Plans in performance of the Tenant's
      Work unless: (i) such deviation meets the requirements set forth in Paragraph
      5
      above; or (ii) such deviations have been authorized by Landlord or its
      designated representative in writing. Tenant shall furnish to Landlord
      "as-built" drawings of the Tenant's Work within ten (10) days after completion
      of the Tenant's Work.

     

    (l)
      Landlord
      shall have the right to run utility lines, pipes, conduits, duct work and
      component parts of all mechanical and electrical systems where necessary or
      desirable through the Premises, to repair, alter, replace or remove the same,
      and to require Tenant to install and maintain proper access panels
      thereto.

     

    (m)
      Tenant
      shall impose on and enforce all applicable terms of this Work Letter against
      Tenant's Contractors.

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

    7. Insurance
      and Indemnification.

     

    (a) Tenant
      covenants and agrees to secure and maintain, at all times before, during and
      after completion of the Tenant's Work (and through the Term of the Lease),
      insurance of the types and amounts set forth in Article 17 of the Original
      Lease. Tenant further covenants and agrees to insure the Tenant's Work for
      the
      full replacement value thereof, in accordance with Article 11 and Article 17
      of
      the Original Lease. Tenant's insurance shall include Tenant's Contractors and
      Tenant shall require Tenant's Contractors to secure, pay for and maintain during
      the continuance of the construction within the Building or the Premises,
      insurance of the types and amounts set forth in Article 17 of the Original
      Lease.

     

    (b) Without
      limitation of the indemnification provisions contained in the Lease, to the
      fullest extent permitted by law, Tenant agrees to indemnify, protect, defend
      and
      hold harmless Landlord, Landlord's contractors and Landlord's architects and
      their respective partners, directors, officers, employees and agents, from
      and
      against all claims, liabilities, losses, damages and expenses of whatever nature
      arising out of or in connection with the Tenant's Work or the entry of Tenant
      or
      Tenant's Contractors into the Building and the Premises, including, without
      limitation, mechanics' liens or the cost of any repairs to the Premises or
      Building necessitated by activities of Tenant or Tenant's Contractors and death
      of or bodily injury to persons or damage to the property of Tenant, Tenant's
      Contractors and their respective employees, agents, invitees or licensees or
      others, except for such claims, liabilities, losses, damages and expenses solely
      caused by the gross negligence or willful misconduct of Landlord, its employees,
      agents or contractors. It is understood and agreed that the foregoing indemnity
      shall be in addition to the insurance requirements set forth above and shall
      not
      be in discharge of or in substitution for same or any other indemnity or
      insurance provision of the Lease.

     

    8. Landlord's
      Contribution; Excess Amounts.

     

    (a) In
      connection with the Tenant's Work, provided that Tenant complies with all of
      the
      requirements of this Section 8 and Tenant is not in default hereunder or under
      the Lease, Landlord shall contribute a maximum amount ("Landlord's
      Contribution")
      of
      Three Hundred Ninety-Five Thousand Nine Hundred Forty and No/100 Dollars
      ($395,940.00) (calculated at the rate of $10.00 per rentable square foot of
      the
      Premises), as Landlord's share of the cost of the Tenant's Work incurred by
      Tenant

     

    (b) Periodically
      after completion of a portion of the Tenant's Work, Tenant may submit to
      Landlord a payment request for costs of the Tenant's Work (the "Payment
Request").
      The
      Payment Request shall include: (i) all applications for payment to Tenant's
      Architect and certificates of payment issued by Tenant's Architect; and (ii)
      copies of the AIA documents G702tm-1992 and G703tm-1992 received or issued
      for
      each application for payment made by Tenant's Contractors. 

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    (c) Within
      five (5) days of receiving a Payment Request from Tenant, Landlord shall pay
      a
      portion of the Landlord's Contribution in the amount of Eighty-Nine Thousand
      Eighty-Six and 50/100 Dollars ($89,086.50), which amount equals one-quarter
      (1/4) of the Landlord's Contribution, minus the ten percent (10%) retainage
      (as
      set forth in subsection (d) below).

     

    (d) After
      each Payment Request, Landlord shall pay the portion of the Landlord
      Contribution as set forth in subsection (c) above, until ninety percent (90%)
      of
      Landlord's Contribution has been expended and only the ten percent (10%)
      retainage amount remains (the "Retainage").
      The
      Retainage shall equal $39,594.00, and Tenant shall not be entitled to such
      Retainage until it has complied with the requirements set forth in subsection
      (f) below.

     

    (e) Upon
      written request by Landlord, at no expense to Landlord, Tenant shall furnish
      Landlord with legible copies or originals of any records of Tenant or Tenant's
      Contractors regarding the Tenant's Work, including the progress thereof and
      payments made therefor, which request shall not delay the payments required
      by
      Landlord under subsections (c) and (d) above. Tenant shall accommodate such
      requests in a timely manner.

     

    (f) Upon
      completion of the Tenant's Work, Tenant shall furnish Landlord with final
      waivers of liens and contractors' affidavits, in such form as may be required
      by
      Landlord, from all parties performing labor or supplying materials or services
      in connection with the Tenant's Work showing that all of said parties have
      been
      compensated in full and waiving all liens in connection with the Premises and
      Building. Tenant shall submit to Landlord a detailed breakdown of Tenant's
      total
      construction costs, together with such evidence of payment as is reasonably
      satisfactory to Landlord. Within fifteen (15) days of Landlord's receipt of
      such
      documentation and waivers as described herein, Landlord shall pay to Tenant
      the
      Retainage.

     

    9. Miscellaneous.

     

    (a) Except
      as
      expressly set forth herein, in the First Amendment or in the Lease, Landlord
      has
      no agreement with Tenant and has no obligation to do any Tenant's Work with
      respect to the Premises.

     

    (b) If
      the
      Plans for the Tenant's Work require the construction and installation of more
      fire hose cabinets or telephone/electrical closets than the number regularly
      provided by Landlord in the core of the Building in which the Premises are
      located, then Tenant agrees to pay all costs and expenses arising from the
      construction and installation of such additional fire hose cabinets or
      telephone/electrical closets.

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    (c) Time
      is
      of the essence under this Work Letter.

     

    (d) If
      Tenant
      fails to make any payment relating to the Tenant's Work as required hereunder,
      Landlord, at its option, may complete the Tenant's Work pursuant to the approved
      Plans and continue to hold Tenant liable for the costs thereof and all other
      costs due to Landlord. Tenant's failure to pay any amounts owed by Tenant
      hereunder when due or Tenant's failure to perform its obligations hereunder
      shall also constitute a default under the Lease, and Landlord shall have all
      the
      rights and remedies granted to Landlord under the Lease for nonpayment of any
      amounts owed thereunder or failure by Tenant to perform its obligations
      thereunder.

     

    (e) Notices
      under this Work Letter shall be given in the same manner as under the
      Lease.

     

    (f) The
      liability of Landlord hereunder or under any amendment hereto or any
 instrument
      or document executed in connection herewith (including, without  limitation,
      the Lease) shall be limited to and enforceable solely against Landlord's
 interest
      in the Building.

     

    (g) The
      headings set forth herein are for convenience only.

     

    (h) Except
      as
      set forth in the First Amendment, or the Generator License  Agreement
      attached thereto, this Work Letter sets forth the entire agreement of
 Tenant
      and Landlord regarding the Tenant's Work. This Work Letter may only be
 amended
      if in writing and duly executed by both Landlord and Tenant.

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

    SCHEDULE
      1

     

    PLANS

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    

    GENERATOR
      LICENSE AGREEMENT

    

    This
      GENERATOR
      LICENSE AGREEMENT (this
      “Agreement”) made this 2nd
      day of
      April , 2007 ("Execution Date"), by and between TR
      STONE MANOR CORP.,
      a
      Delaware corporation (hereinafter called “Licensor”), and DISCOVERY
      LABORATORIES, INC., a
      Delaware corporation (hereinafter called “Licensee”).

    

    WHEREAS,
      Licensor's predecessor in interest, Stone Manor Corporate Center, L.P. ("SMCC")
      and Licensee entered into that certain Office Lease Agreement dated May 26,
      2004
      ("Original Lease"), as amended by that certain Addendum to Office Lease
      Agreement between SMCC and Licensee dated of even date as the Original Lease
      ("Addendum"), as further amended by that certain Commencement Date Agreement
      between SMCC and Licensee dated January 19, 2005 ("Commencement Date
      Agreement"), as further amended by that certain First Amendment to Lease between
      Licensor and Licensee (the "First Amendment", and together with the Original
      Lease, the Addendum and the Commencement Date Agreement, the "Lease"), under
      which Licensor demised to Licensee the premises consisting of approximately
      39,594 rentable square feet of office space on the first and second floors
      (the
“Premises") in the building commonly known as Stone Manor Corporate Center,
      2600
      Kelly Road, in Doyleston and Warrington Townships, Pennsylvania (the
“Building"), all as more particularly set forth in the Lease, for a Lease Term
      expiring February 28, 2013.

    

    WHEREAS,
      in
      connection with such Lease, Licensee desires a license to use certain space,
      depicted on the plan sheet SK2, prepared by Trident Engineering, Inc., attached
      hereto as Attachment
      1
      for the
      purpose of installing and using an emergency generator (the "Generator"), the
      fuel storage tank and related equipment ("Related Equipment") described in
      the
      specifications prepared Trident Engineering, Inc., attached hereto as
Attachment
      2
      (the
      "Licensed Space"). For the purposes hereof, the Related Equipment includes
      the
      Connecting Equipment (as hereinafter defined), unless otherwise
      indicated.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual agreements herein set forth and other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Landlord and Tenant have agreed, and hereby agree as
      follows:

    

    
      	1.  	
              Grant
                of License.
                Licensor, for and in consideration of the covenants and agreements
                made by
                Licensee herein contained, does hereby grant unto Licensee, for a
                term
                coterminous with the term of the Lease, unless sooner terminated
                as
                provided herein, a license to utilize the Licensed Space for the
                purpose
                of installing and using the Generator and Related Equipment in order
                to
                obtain emergency standby or back-up power only (the
                "License").

            

    

     

    
      	2.  	
              Licensor's
                Approval; Costs.
                The size, location and placement, as well as the manner and method
                of
                installation and removal of the Generator and Related Equipment shall
                be
                subject to the prior written approval of Licensor, in its sole and
                absolute discretion. Licensor hereby approves the location and size
                of the
                Generator and Related Equipment to the extent that such location
                and size
                are specifically indicated and described on Attachment
                1
                and Attachment
                2,
                respectively. If Licensor elects to hire structural, mechanical and/or
                other engineers or consultants to review any material changes to
                such
                plans and specifications, Licensee shall reimburse Licensor for the
                reasonable costs thereof. Such costs and any other amounts due hereunder
                shall be deemed rent payable in accordance with, and governed by,
                the
                provisions of the Lease. In addition, Licensee shall pay for all
                utilities
                consumed to install, maintain, operate and remove the Generator and
                Related Equipment, as well as the reasonable costs of any engineers
                or
                consultants employed by Licensor to review or monitor the installation
                or
                removal of same.

            

    

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    
      	3.  	
              Approvals,
                Permits and Compliance with Laws.
                Prior to the installation of the Generator and Related Equipment,
                Licensee
                shall secure, and shall at all times thereafter maintain, the requisite
                approvals and permits of all governmental bodies having jurisdiction.
                Licensee, at its expense, shall at all times comply with all applicable
                laws and ordinances, rules and regulations, codes and statutes of
                municipal, state and federal governmental authorities relating to
                the
                installation, maintenance, height, location, use, operation and removal
                of
                the Generator and Related Equipment and all environmental matters
                with
                respect thereto. Licensor makes no representation of any kind whatsoever
                with respect to the Generator and Related Equipment, including any
                representation that applicable laws, ordinances or regulations permit
                the
                installation or operation of the Generator and Related Equipment
                on the
                Property.

            

    

     

    
      	4.  	
              Access;
                Installation of Connecting Equipment.
                Licensor hereby grants unto Licensee the right, to be exercised as
                herein
                set forth, to enter upon the Licensed Space for the sole purpose
                of
                gaining access to and maintaining the Generator and Related Equipment.
                In
                addition thereto, Licensor grants unto Licensee the right, to be
                exercised
                as herein set forth, to install in connection with and as a part
                of the
                Generator and Related Equipment such equipment, conduits, cables
                and
                materials (hereinafter called the "Connecting Equipment") in shafts,
                ducts, conduits, chases, utility closets and other facilities of
                the
                Building, including the premises of other tenants of the Building,
                upon
                the terms hereinafter provided, as designated by Licensor, as is
                reasonably necessary to connect the Generator to Licensee's other
                machinery and equipment in the Premises, subject to the requirements
                of
                any permits and the codes, regulations and rules of any governmental
                body,
                agency or authority having jurisdiction. Licensor further grants
                to
                Licensee the right of access to the areas where such Connecting Equipment
                is located for the purposes of maintaining, repairing, testing, replacing
                or removing the Connecting Equipment; provided, however, that such
                access
                and installations do not cause damage to or interfere with the operation
                or maintenance of any part of the Building or with any other tenants'
                operation of their business or use of their premises. Anything herein
                to
                the contrary notwithstanding, Licensee shall only enter upon the
                Licensed
                Space at times in accordance with the Schedule (as defined in Section
                6
                below) and such other areas only at such times, in such manner and
                under
                such circumstances as shall not cause damage or endangerment to life
                or
                limb. 

            

    

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    
      	5.  	
              Licensee's
                Responsibilities with Respect to Testing, Operating and Maintaining
                the
                Generator.
                Licensee, at its expense, shall be solely responsible for testing,
                operating and maintaining the Generator and Related Equipment in
                a safe,
                structurally sound, clean and sightly condition and in strict compliance
                with all requirements of any governmental authority, Licensor's insurer
                and Licensor's lender, including providing to such parties any
                certifications required by such parties in connection with this License.
                Any Environmental Protection Agency ("EPA") manifests required with
                respect to such testing, operation and maintenance of the Generator
                and
                Related Equipment shall be in the name of Licensee and shall be the
                sole
                responsibility of Licensee. The Generator and Related Equipment located
                in
                the Licensed Space shall be shielded by a wooden or chain-link fence,
                at
                Landlord's election, and reasonably landscaped in accordance with
                Licensor's written specifications at the sole cost and expense of
                Licensee. Licensee shall indemnify and hold harmless Licensor from
                and
                against all liens and claims of mechanics and materialmen furnishing
                labor
                and materials in the construction, installation and maintenance of
                the
                Generator and Related Equipment.

            

    

     

    
      	6.  	
              Testing
                and Operation of the Generator and Related
                Equipment.
                Except for periodic scheduled testing, the Generator shall be operated
                only during electrical utility outages. Licensee shall establish
                a
                schedule (the "Schedule") of dates and time periods for testing of
                the
                Generator and Related Equipment, which schedule shall be subject
                to
                Licensor's written approval (such approval not to be unreasonably
                withheld
                or delayed). Licensee shall test and operate the Generator and Related
                Equipment in strict accordance with the terms and conditions of this
                Agreement and such testing and operation shall not interfere with
                the use
                and quiet enjoyment of other tenants of their premises. Licensee
                shall
                take all appropriate steps in the selection of the Generator and
                Related
                Equipment to ensure quiet operation of such Generator and Related
                Equipment consistent with a sound level acceptable in a normal office
                environment, as determined by Licensor in its reasonable discretion.
                In
                the event that Licensor notifies Licensee of any interference in
                the quiet
                enjoyment of other tenants of their premises in the Building or other
                occupants of the Building from the Generator and Related Equipment
                (including but not limited to interference resulting from harmonics,
                buzzing, or similar noise or vibration related matters), Licensee
                shall
                use reasonable efforts to promptly eliminate such interference, or
                failing
                such elimination, except in the case of an emergency, cease operation
                of
                the Generator and Related Equipment until such interference is eliminated.
                If Licensee fails to comply with any provision of this Agreement
                (including but not limited to eliminating any interference or ceasing
                operation as provided in this paragraph), and such failure continues
                after
                notice thereof from Licensor to Licensee, Licensor shall have the
                right,
                but not the obligation, to cure such failure, and Licensee shall
                reimburse
                Licensor for any and all costs incurred by Licensor in connection
                therewith. 

            

    

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    
      	7.  	
              Environmental
                Concerns; Indemnity.
                

            

    

     

    
      	1.  	
              In
                connection with the testing and operation of the Generator and Related
                Equipment, Licensee shall have the right to have a quantity of natural
                gas, a Hazardous Material (as defined in Section 7.3 below), brought
                upon and stored in the Licensed Space and used in connection with
                the
                Generator and Related Equipment, provided that such natural gas is
                delivered, stored, used and removed in compliance with all applicable
                laws, rules, codes, and regulations, including Environmental Laws
                (hereinafter defined), and that the quantities of such natural gas
                shall
                be in such limited quantities as reasonably required for such testing,
                operation and use of the Generator and Related Equipment.
                

            

    

     

    
      	2.  	
              Except
                as otherwise expressly set forth herein, Licensee, its agents, employees,
                contractors or engineers shall not (i) cause or permit any Hazardous
                Materials to be brought upon, stored, used or disposed on, in or
                about the
                Licensed Space and/or the Building), or (ii) knowingly permit the
                release,
                discharge, spill or emission of any Hazardous Materials in or about
                the
                Licensed Space and/or Building (except as otherwise expressly provided
                herein). Licensee hereby agrees that it is and shall be fully responsible
                for all costs, expenses, damages or liabilities (including, but not
                limited to, those incurred by Licensor and/or its mortgagee) which
                may
                occur from the use, storage, disposal, release, spill, discharge
                or
                emissions of Hazardous Materials by Licensee in, on or about the
                Licensed
                Space and/or Building whether or not the same may be permitted by
                this
                Agreement. Licensee shall defend, indemnify and hold harmless Licensor,
                its mortgagee and its agents from and against any claims, demands,
                administrative orders, judicial orders, penalties, fines, liabilities,
                settlements, damages, costs or expenses (including, without limitation,
                reasonable attorney and consultant fees, court costs and litigation
                expenses) of whatever kind or nature, known or unknown, contingent
                or
                otherwise, arising out of or in any way related to the use, storage,
                disposal, release, discharge, spill or emission of any Hazardous
                Materials, or the violation of any Environmental Laws, by Licensee,
                its
                agents, employees, contractors or invitees. The provisions of this
                Section
                shall be in addition to any other obligations and liabilities Licensee
                may
                have to Licensor at law or in equity and shall survive the transactions
                contemplated herein or any termination of this Lease.
                

            

    

     

    
      	3.  	
              For
                the purposes of this Agreement, all federal, state or local environmental
                laws, statutes, regulations, rules, ordinances, codes, standards,
                orders,
                licenses and permits of any governmental authority or issued or
                promulgated thereunder shall be referred to as the "Environmental
                Laws"
                and "Hazardous Materials" shall include, without
                limitation:

            

    

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

    (i)  those
      substances included within the definitions of "hazardous substances," "hazardous
      materials," toxic substances," or "solid waste" in the Comprehensive
      Environmental Response Compensation and Liability Act of 1980 (42 U.S.C. § 9601
      et seq.) ("CERCLA"), as amended by Superfund Amendments and Reauthorization
      Act
      of 1986 ("SARA"), the Resource Conservation and Recovery Act of 1976 ("RCRA"),
      and the Hazardous Materials Transportation Act, and in the regulations
      promulgated pursuant to said laws, all as amended;

     

    (ii)  those
      substances listed in the United States Department of Transportation Table (49
      CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
      (of any successor agency) as hazardous substances (40 CFR Part 302 and
      amendments thereto); and

     

    (iii)  any
      material, waste or substance which is (A) gas or petroleum, (B) asbestos, (C)
      polychlorinated biphenyl, (D) designated as a "hazardous substance" pursuant
      to
      Section 311 of the Clean Water Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321)
      or listed pursuant to Section of the Clean Water Act (33 U.S.C. § 1317); (E)
      flammables or explosives; or (F) radioactive materials.

     

    
      	8.  	
              Relocation.
                Licensor, at its cost and expense, reserves the right upon not less
                than
                ninety (90) days written notice to Licensee, to relocate the Generator
                and/or Related Equipment to substitute space reasonably satisfactory
                to
                Licensee (the "Substitute Space"). Upon such relocation, the Substitute
                Space shall thereafter constitute the Licensed Space under this Agreement.
                In the event that Licensee, using good faith efforts to accommodate
                Licensor in the relocation, is unable to secure the substitute plans,
                government approvals, permits, materials or equipment necessary for
                the
                relocation of the Generator and/or Related Equipment to the Substitute
                Space within the ninety (90) day period, then Licensor shall allow
                for an
                additional thirty (30) days for the relocation of the Generator and/or
                Related Equipment (the "Additional Period"). In the event that Licensee,
                using good faith efforts, is unable to obtain the substitute
                plans, government
                approvals,
                permits,
                materials or equipment
                necessary for the relocation during the Additional Period, then Licensee
                shall request Licensor's consent, which consent shall not be unreasonably
                withheld or delayed, for an extension of the Additional Period for
                an
                amount of time reasonably necessary for Licensee's acquisition of
                such
                plans, government approvals,
                materials
                or equipment.

            

    

     

    
      	9.  	
              Non-Exclusive,
                Non-Interference.
                The License hereby granted to Licensee is non-exclusive and shall
                not
                preclude Licensor from granting a license or licenses to others with
                generators or any other equipment. The rights of Licensee hereunder
                shall
                be exercised without causing interference with the activities being
                carried on by other licensees, and, further, Licensee shall use reasonable
                efforts to minimize interference with the activities carried on by
                other
                licensees on or near the Licensed Space. Licensee shall not change
                or
                alter the Generator or Related Equipment described on Attachment
                2
                hereto without the prior written consent of
                Licensor.

            

    

     

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

    
      	10.  	
              Right
                to Terminate.
                If any lease made by Licensee for any space in the Building (including
                without limitation the Lease) shall be terminated or terminable after
                the
                making of this Agreement, because of any default by Licensee thereunder
                beyond any applicable cure or grace period, such Event of Default
                shall
                empower Licensor, at Licensor's sole option, to terminate this Agreement
                by notice to Licensee thereof. Notwithstanding the foregoing, this
                Agreement shall terminate automatically upon the termination of the
                First
                Amendment.

            

    

     

    
      	11.  	
              Removal
                of Generator and Related Equipment.
                Licensor hereby waives its right to and interest in the Generator,
                Related
                Equipment and Connecting Equipment. At the termination of this Agreement
                by lapse of time or otherwise, the Generator, Related Equipment and
                Connecting Equipment installed hereunder shall be removed from the
                Licensed Space and other areas of the Building at Licensee's sole
                cost and
                expense. The Licensed Space and Building areas from which any equipment
                is
                removed pursuant to the terms of this Section shall be restored by
                Licensee to as good condition as existed immediately prior to installation
                of the Generator, Related Equipment and/or Connecting Equipment,
                normal
                wear and tear excepted. In connection therewith, the removal of the
                Related Equipment shall include the removal of the transfer switch
                and
                restoration of electrical circuiting and panels to the main building
                systems. Penetrations of the exterior of the Building shall be filled
                with
                like material of appropriate finish and detail. If Licensee fails
                to
                remove the Generator, Related Equipment and/or Connecting Equipment
                as
                required by Licensor, Licensor may remove, store or dispose of the
                Generator and such Related Equipment and repair and restore any damage
                to
                the Building caused by such removal or installation. Licensee shall
                reimburse Licensor for any and all costs incurred by Licensor in
                connection therewith.

            

    

     

    
      	12.  	
              Notices;
                Documentation.
                All notices required to be given hereunder shall be given in accordance
                with the notice provisions of the Lease. Upon written request from
                Licensor, Licensee shall provide Licensor with copies of all documentation
                with respect to the Generator and Related Equipment, including, but
                not
                limited to, the following: (i) the complete description thereof;
                (ii)
                purchase contracts; (iii) manufacturers' warranties; (iv) plans and
                specifications with respect to the Licensed Space and any other areas
                of
                the Building; (v), consultants' reports, if any; (vi) installation,
                service and maintenance contracts; (vii) testing and maintenance
                reports
                and logs and certifications; (viii) communications, letters, agreements
                and notices from or with any other tenants in the Building with respect
                to
                the Generator and/or Related Equipment, if any; and (ix) any other
                information or documentation of any material significance. Such
                documentation shall be provided to Licensor promptly upon the request
                by
                Licensor therefor, and in no event more than seven (7) days after
                such
                request.

            

    

     

    
      	13.  	
              Insurance
                and Indemnity.
                Licensee's insurance and indemnity obligations and agreements under
                the
                Lease shall be applicable to the Licensed Space and the Generator
                and
                Related Equipment. At all times during the term of this Agreement,
                Licensee shall maintain general commercial liability and casualty
                insurance coverage in such forms and amounts, and with such insurers,
                approved by Licensor, in its reasonable discretion, with Licensor
                named as
                an additional insured. Prior to installing the Generator or Related
                Equipment, Licensee shall deliver to Licensor evidence that such
                insurance
                coverage is in effect. Licensee shall assume the full risk of loss
                with
                respect to all Generator and Related Equipment located in the Building
                and
                Licensed Space, and Licensee shall protect, indemnify and hold Licensor,
                its partners, employees, contractors, agents, directors, officers,
                partners and members (the "Licensor Parties") harmless (and, if requested
                by Licensor, shall defend with counsel reasonably acceptable to Licensor
                and such Licensor Parties) from and against any and all claims,
                liabilities, costs and expenses (including reasonable attorney and
                consultant fees, court costs and litigation expenses), including,
                without
                limitation, claims for damage, loss or injury either to persons or
                property, arising from and/or related to the installation, use, testing
                and maintenance of the Generator and Related Equipment by Licensee,
                its
                employees, agents, contractors, consultants or representatives, or
                the
                failure of Licensee to comply with any of the obligations hereunder.
                Licensee hereby waives all claims against Licensor and all of the
                other
                Licensor Parties for injury to persons, damage to property or to
                any other
                interests of the Licensee sustained by Licensee or any person claiming
                through Licensee resulting from any occurrence in, on or about the
                Licensed Space or Building with respect to the Generator or Related
                Equipment. The provisions of this Section shall survive the expiration
                or
                earlier termination of this
                Agreement.

            

    

     

    
      
        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

    
      	14.  	
              Exculpatory
                Clause.
                It is expressly understood and agreed by and between the parties
                hereto,
                anything herein to the contrary notwithstanding, that the liability
                of
                Licensor hereunder shall be limited as provided in Section 24 of
                the First
                Amendment and relevant provisions of the Original
                Lease.

            

    

     

    
      	15.  	
              Submission
                of Agreement.
                Submission of this instrument for examination shall not bind Licensor
                and
                no duty or obligation on Licensor shall arise under this instrument
                until
                this instrument is signed and delivered by Licensor and
                Licensee.

            

    

     

    
      	16.  	
              Defined
                Terms.
                Capitalized terms which are not otherwise defined herein shall be
                deemed
                to have the same meanings herein as are ascribed to such terms in
                the
                Lease.

            

    

     

    
      	17.  	
              Successors
                and Assigns.
                This Agreement shall be binding upon the successors and assigns of
                the
                parties hereto, provided that Licensee shall not assign or transfer
                this
                Agreement to any other person without Licensor's prior written consent,
                which may be withheld by Licensor in its sole and absolute
                discretion.

            

    

     

     

    

    

    (EXECUTION
      PAGE FOLLOWS)

    
      
        
        

      

      
        B-7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      Licensor and Licensee have executed this Agreement as of the day and year first
      above written.

    
      	
            	 	 
	WITNESS:	LICENSOR:
	 	 
	 	TR STONE MANOR CORP., 
	 	a Delaware corporation
	 
 	 
 	 
 
	By:	By:  	 
	
              
                
Name: 

            	
              
Name: 
	 	Its: 

      
        	 	 	 
	 	 
	WITNESS:	LICENSEE
                
	 	 
	 	DISCOVERY LABORATORIES,
                INC.,
	 	a Delaware corporation
	 
 	 
 	 
 
	By:	By:  	 
	
                
                  
Name:

              	
                
Name: 
	 	Its: 

      

           

      
        
          
          

        

        
          B-8

          
            

          

        

        
          
          

        

      

    ATTACHMENT
      1

     

    GENERATOR

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
      2

     

    SPECIFICATIONSExhibit
      4.1 

    

    THIS
      NOTE
      HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
      LAWS. IT MAY NOT BE TRANSFERRED, ASSIGNED, SOLD OR OFFERED FOR SALE EXCEPT
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
      APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
      REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED BECAUSE
      OF AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.

    

    PROMISSORY
      NOTE

     

    
      	$_____________ 	
              __________,
                2007 

            

    

            

    FOR
      VALUE
      RECEIVED, Pure Vanilla eXchange, Inc., a Nevada corporation with an address
      at
      805 Third Avenue, New York NY 10022 (the “Company”),
      promises to pay to the order of [HOLDER]
      (“Holder”),
      the
      principal sum of ______________________ ($_________) plus interest on the
      outstanding principal from the date hereof to and including the day when
      principal is paid in full. Interest shall accrue monthly at the annual rate
      of
      nine and nine tenths percent (9.9%) per annum; provided that so long as an
      Event
      of Default (as hereinafter defined), or any event which with notice or passage
      of time or both would constitute an Event of Default, shall exist and be
      continuing, interest shall accrue daily at the rate of five percent (15%) per
      annum.

    

    1.
      Payments.
      The
      Company shall pay principal and accrued interest on the earlier of (i) two
      business days after the date on which the Company has raised and reported,
      in
      the aggregate from February 12, 2007 to the date of such report, $20 million
      of
“Net
      Financing”
      (defined below) provided, all “Indebtedness”
defined
      in the Senior Secured Convertible Note issued on December 26, 2006 in the
      original principal amount of $1,500,000 to Gottbetter Master, Ltd. has been
      paid
      in full and (ii) April 5, 2008. For the purposes of this Note, “Net
      Financing”
means,
      the gross proceeds received by the Company from the sale of any of its
      securities, less any loans that have been outstanding for a term of less than
      six months on the date such financing is closed (regardless of the maturity
      at
      the date of issue) that are repaid from the proceeds of the Financing. Payments
      shall be made at the offices of the Company or at such other place as Holder
      or
      any subsequent holder may designate to the Company in writing.

    

    2. Prepayment.
      The
      indebtedness evidenced by this Note may be prepaid at any time and from time
      to
      time, without advance notice to Holder, in whole or in part without premium
      or
      penalty, but with accrued and unpaid interest to the date of prepayment on
      the
      amount of principal being prepaid.

     

    3. Events
      of Default.
      If any
      of the following events shall occur and be continuing, Holder may, by notice
      to
      the Company, declare this Note, all accrued and unpaid interest hereon, and
      all
      other amounts payable hereunder to be due and payable, whereupon the same shall
      become due and payable,10 days after notice to the Company if during such 10
      day
      period, the Company shall fail to cure the event (an “Event
      of Default”):

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    a. There
      is
      a failure to make any payment of principal of, interest on, or any other amount
      payable under this Note, or the Company breaches any other obligation to Holder
      hereunder, or the Holder uses the proceeds of this note for any purpose other
      than payroll expenses or payment to consultants in the ordinary course of
      business consistent with agreements in effect with such consultants entered
      into
      prior to February 14, 2007. 

    

    b. Any
      proceedings shall be instituted by or against the Company seeking either (i)
      an
      order for relief with respect to, or reorganization, arrangement, adjustment
      or
      composition of, its debts under the United States Bankruptcy Code or under
      any
      other law relating to bankruptcy, insolvency, reorganization or relief of
      debtors, or (ii) appointment of a trustee, receiver or similar official for
      the
      Company or for any substantial part of its property; and, with respect only
      to a
      proceeding instituted against the Company, such proceeding is not dismissed
      within sixty (60) days thereafter;

     

    c. The
      Company’s failure to conduct business in the ordinary course, dissolution or
      termination of existence;

    

    d. Any
      sale,
      transfer, pledge, lien, grant of a security interest or other disposition,
      outside the ordinary course of business, in or of any material assets or a
      material portion of the assets or business of the Company, except a disposition
      of assets to a wholly owned subsidiary of the Company;

    

    e. Any
      declaration or payment by the Company of any dividend or distribution with
      respect to its capital stock; any payment with respect to any stock appreciation
      right, phantom stock or similar plan; or redemption of any shares of its capital
      stock, or of options, warrants, or other rights to acquire, or securities
      convertible into its capital stock; 

    

    f. A
      final
      judgment or order for the payment of money in excess of $100,000 shall be
      rendered against the Company and such judgment or order shall continue
      unsatisfied, in effect and unstayed for a period of thirty (30) consecutive
      days

    

    g. The
      failure of the Company to comply in all material respects with all applicable
      laws, rules, regulations or orders, including, without limitation, (i) paying
      before same become due all taxes, assessments and governmental charges imposed
      upon it, upon its income and profits or upon its property, except to the extent
      contested in good faith and covered by adequate reserves, and (ii) compliance
      with all applicable environmental and toxic substance laws, rules and
      regulations; or 

    

    4. No
      Waiver, etc.
      No delay
      or omission on the part of Holder in exercising any right hereunder shall
      operate as a waiver of such right or of any other right of Holder, nor shall
      any
      delay, omission or waiver on any one occasion be deemed a bar to or waiver
      of
      the same or any other right on any future occasion. The Company and every
      endorser of this Note, regardless of the time, order or place of signing, waives
      presentment, demand, protest and notices of every kind with respect to this
      Note
      and assents (i) to any extension or postponement of the time of payment and
      to
      any other indulgence, (ii) to the addition or release of, or any compromise
      or
      settlement with, any endorser or other party or person primarily or secondarily
      liable hereunder, and (iii) to the addition or release of, the failure to take
      or perfect an interest in, any compromise or settlement with respect to, or
      any
      delay in proceeding or failure to proceed against, any collateral or other
      security for this Note.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    

    5. Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York applicable to contracts made and to be performed wholly within
      New
      York State, without giving effect to conflict of laws principles.

    

    6. Subordination.
      The
      following provisions are for the benefit of Holder of Senior Indebtedness
      (defined below).

     

    (a) Subordination.
      Holder
      for itself, its successors and assigns covenants and agrees that to the extent
      and in the manner hereinafter set forth, the Loans shall be subordinated and
      subject in right of payment to the prior payment in full of all Senior
      Indebtedness (defined below) solely in the manner set forth in this Section
      6.
      The provisions of this Section 6 are made for the benefit of all holders of
      Senior Indebtedness and are intended to be and are an inducement and a
      consideration for each holder of Senior Indebtedness, whether created on, before
      or after the date hereof, to acquire and hold or continue to hold such Senior
      Indebtedness. Any such holder may proceed to enforce such provisions and Holder
      for itself, its successors and assigns hereby waives notice or proof of reliance
      hereon by any holder of Senior Indebtedness and protest, demand for payment
      and
      notice of default.

    

    (b) “Senior
      Indebtedness”
means
      “Indebtedness”
as
      defined in the Senior Secured Convertible Note issued on December 26, 2006
      in
      the original principal amount of $1,500,000 to Gottbetter Master,
      Ltd.

    

    (c) Subordination
      Agreements.
      Holder
      covenants and agrees that payment of the sums due or to be due under the Notes
      are expressly subordinated to all Senior Indebtedness in the manner provided
      herein, and Holder agrees to enter into any further subordination agreement
      by
      any holder of Senior Indebtedness, provided, however, that such agreement is
      reasonable and consistent with the terms and conditions set forth in this
      Section 5. 

    

    (d) Hold
      Payments in Trust.
      If
      Holder receives any payment in respect of any sum due or to be due under the
      Notes which Holder knows it is not entitled to receive, it will hold any amount
      so received in trust for the benefit of the holders of the Senior Indebtedness
      and will forthwith turn over such payment to such holders of the Senior
      Indebtedness in the form received to be applied on the Senior Indebtedness
      upon
      receipt of written notice from all such holders.

    

    (e) No
      Action.
      Holder
      will not commence any action or proceeding against the Company or any guarantor
      hereof to recover all or any part of this Note or join with any creditor under
      any bankruptcy, reorganization, readjustment or arrangement of debt,
      receivership, liquidation or insolvency law or statute of the federal or any
      state government, unless Holder shall have given the holders of the Senior
      Indebtedness 60 days notice of its intention to do so and unless the holders
      of
      the Senior Indebtedness shall also have the opportunity to join in bringing
      any
      such proceedings against the Company.

     

    (f)
       Changes
      to Senior Indebtedness.
      At any
      time and from time to time, the holders of the Senior Indebtedness may, without
      the consent of or notice to Holder, without incurring responsibility to Holder,
      and without impairing or releasing any of their rights or any of the obligations
      of Holder hereunder:

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    

    (i) change
      the amount, manner, place or terms of payment or change or extend the time
      of
      payment of or renew or alter the Senior Indebtedness in any manner;

    

    (ii) sell,
      exchange, release or otherwise deal with any property pledged or mortgaged
      to
      secure, or howsoever securing, the Senior Indebtedness;

    

    (iii)
       release
      anyone liable in any manner for the payment or collection of the Senior
      Indebtedness;

    

    (iv)
       exercise
      or refrain from exercising any rights against the Company and others;
      and

    

    (v) apply
      any
      sums by whomsoever paid or however realized to the Senior
      Indebtedness.

    

    7. Notices.
      Any
      notice or other communication required or permitted under this Note shall be
      in
      writing and shall be deemed to have been duly given (i) upon hand delivery,
      or
      (ii) on the third day following delivery to the U.S. Postal Service as certified
      or registered mail, return receipt requested and postage prepaid, or (iii)
      on
      the first day following delivery to a nationally recognized United States
      overnight courier service, fee prepaid, return receipt or other confirmation
      of
      delivery requested, or (iv) when telecopied or sent by facsimile transmission
      if
      an additional notice is also delivered or mailed, as set forth under (i), (ii)
      or (iii) above, within three days thereafter. Any such notice or communication
      shall be delivered or directed to a party at its address set forth above or,
      as
      to each such party or any holder hereof, at such other address as may be
      designated by such party or holder in a notice given to the other parties hereto
      in accordance with the provisions of this paragraph.

    

    8. Maximum
      Interest.
      Notwithstanding any other provisions of this Note, Holder does not intend to
      charge, and the Company shall not be required to pay, any interest or other
      fees
      or charges in excess of the maximum permitted by applicable law. Any payments
      in
      excess of such maximum shall be refunded to the Company or credited against
      unpaid principal.

     

    9. Modifications;
      Waiver.
      No
      modification or waiver of this Note or any part hereof shall be effective unless
      in writing and signed by the Company and Holder. No waiver of any breach or
      condition of this Note shall be deemed to be a waiver of any other or subsequent
      breach or condition, whether of like kind or different nature. No course of
      dealing between the Company and Holder, or between Holder and any other party,
      will be deemed effective to modify, amend, waive or discharge any part of this
      Note or of the rights or obligations of the Company hereunder.

    

    10. Jurisdiction
      and Venue.
      In the
      event that any legal proceedings are commenced in any court with respect to
      any
      matter arising under this Note, the Company specifically consents and agrees
      that: (i) the courts of the State of New York and/or the United States Federal
      Courts located in the State of New York shall have exclusive jurisdiction over
      the Company and over the subject matter of any such proceedings; and (ii) the
      venue of any such action shall be in New York County, New York and/or the United
      States District Court for the Southern District of New York.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

    IN
      WITNESS WHEREOF, Pure Vanilla eXchange has executed this Note as of the date
      first above written.

     

    
      	 	 	 
	 	Pure
              Vanilla
              eXchange, Inc.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Steven
              Yevoli
	 	
              Its
                Chief Executive Officer

            

    
      
         

      

      
        -5-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]