Document:

EX-10.50 Stock Purchase Agreement

 

EXHIBIT 10.50

     STOCK PURCHASE AGREEMENT, dated as of September 1, 2005 (this “Agreement”), between
Ceres Group, Inc., a Delaware corporation (“Ceres”), and International Managed Care, LLC, a
Delaware limited liability company (“IMC”) and International Managed Care (Bermuda), L.P.,
a Bermuda limited partnership (“IMC Bermuda”) (each a “Seller” and together
“Sellers”).

RECITALS

     A. Sellers own 2,381,670 shares of Ceres’ common stock, par value $.001 per share (the
“Common Stock”); and

     B. Ceres desires to purchase from Sellers, and Sellers desire to sell to Ceres, 1,000,000
shares of Common Stock (with IMC selling 670,236 shares and IMC Bermuda selling 329,764 shares,
collectively, the “Shares”), upon the terms and subject to the conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements
herein set forth, the parties hereto hereby agree as follows:

ARTICLE I

PURCHASE AND SALE OF SHARES

     SECTION 1.1 Purchase and Sale of Shares. At the Closing, upon the terms and subject to
the conditions of this Agreement, Sellers shall sell, transfer and deliver to Ceres, and Ceres
shall purchase from Sellers, all of the Shares. The aggregate purchase price to be paid by Ceres
for all of the Shares shall be $5,920,000 (with IMC receiving $3,967,797.12 and IMC Bermuda
receiving 1,952,202.88, collectively, the “Purchase Price”). The Purchase Price shall be
paid in cash, in its entirety, by wire transfer in immediately available funds, to one or two
accounts designated by each of IMC and IMC Bermuda.

     SECTION 1.2 Closing Date. The closing of the purchase and sale of the Shares
(hereinafter called the “Closing”) shall take place on September 8, 2005.

     SECTION 1.3 Transactions to be Effected at the Closing. At the Closing, Ceres shall
deliver the Purchase Price to the Sellers against delivery of the Shares to Ceres. Each Seller
shall deliver certificates for the Shares being sold by it endorsed in blank or accompanied by
stock powers endorsed in blank with signatures guaranteed by a bank or trust company or
broker-dealer that is a member of the New York Stock Exchange, all in form reasonably acceptable to
Ceres.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLERS

     SECTION 2.1 Authorization and Validity of Agreement. Each Seller has all requisite
power to execute, deliver and perform under this Agreement. The execution, delivery and
performance by each Seller of this Agreement and the consummation by each Seller of the
transactions contemplated hereby have been duly authorized by all necessary action. This Agreement
has been duly executed and delivered by each Seller and, assuming due authorization, execution and
delivery by Ceres, is a legal, valid and binding obligation of each Seller, enforceable against
each Seller in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered in a proceeding in
equity or at law).

     SECTION 2.2 No Conflict. The execution and delivery by each Seller of, and the
performance by each Seller of its obligations under, this Agreement will not contravene or conflict
with any provision of applicable law, or the certificate of incorporation, by-laws or other
constitutive documents of such Seller, or any agreement or other instrument binding upon such
Seller or any judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Seller, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the performance by such Seller
of its obligations under this Agreement.

     SECTION 2.3 Ownership of Shares. As of the date hereof and at the Closing Date, each
Seller owns and will own, beneficially and of record, all of the Shares being sold by it, free and
clear of all security interests, liens, claims, pledges, agreements, limitations in voting rights,
charges or other encumbrances of any nature whatsoever (collectively, “Liens”). At the
Closing Date, each Seller will transfer to Ceres good and marketable title to the Shares being sold
by it, free and clear of all Liens.

     SECTION 2.5 No Liability. Each Seller expressly acknowledges that it is not relying
upon any information, representation or warranty by Ceres in determining to sell the Shares and
that Ceres has not made any representations or warranties to the Sellers in connection therewith
except as set forth herein. Each Seller represents that it is a sophisticated seller with respect
to the Shares and acknowledges that it has, independently and without reliance upon Ceres, and
based on such documents and information as such Seller has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property, financial and other
condition and prospects of Ceres and the merits and consequences of its sale of the Shares and made
its own decision with respect to its sale of the Shares. Each Seller represents that it has
consulted to the extent deemed appropriate by it with its own advisers as to the financial, tax,
legal and related matters concerning a sale of the Shares and on that basis understands the
financial, legal, tax and related consequences of a sale of the Shares, and believes that a sale of
the Shares is suitable and appropriate for it.

     SECTION 2.6 No Manipulation. Each Seller has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or

 

result in, under the U.S. Securities Exchange Act of 1934, as amended, or otherwise,
stabilization or manipulation of the price of any security of Ceres to facilitate the sale or
resale of the Common Stock.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BUYER

     SECTION 3.1 Authorization and Validity of Agreement. Ceres has all requisite corporate
power to execute, deliver and perform under this Agreement. The execution, delivery and
performance by Ceres of this Agreement and the consummation by Ceres of the transactions
contemplated hereby have been duly authorized by all necessary corporate action. This Agreement
has been duly executed and delivered by Ceres and, assuming due authorization, execution and
delivery by each Seller, is a legal, valid and binding obligation of Ceres, enforceable against
Ceres in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’
rights generally and general equitable principles (whether considered in a proceeding in equity or
at law).

     SECTION 3.2 Execution. The execution and delivery by Ceres of, and the performance by
Ceres of its obligations under, this Agreement will not contravene any provision of applicable law,
or the certificate of incorporation, by-laws or other constitutive documents of Ceres, or any
judgment, order or decree of any governmental body, agency or court having jurisdiction over Ceres,
and no consent, approval, authorization or order of, or qualification with, any governmental body
or agency is required for the performance by Ceres of its obligations under this Agreement.

ARTICLE IV

MISCELLANEOUS

     SECTION 4.1 Expenses. Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, each party hereto agrees to pay or cause to be
paid all expenses incident to the preparation for and performance of its obligations under this
Agreement.

     SECTION 4.2 Notices. All statements, requests, notices and agreements hereunder shall
be in writing, and (i) if to any Seller shall be delivered or sent by mail or telecopy transmission
to Bradley E. Cooper, 54 Thompson Street, New York, New York 10012 (Facsimile: 212-965-2431) or
(ii) if to Ceres, shall be delivered or sent by mail or telecopy transmission to Ceres Group, Inc.,
17800 Royalton Road, Strongsville, Ohio 44136, Attention: General Counsel (Facsimile:
440-878-3600). Any such statements, requests, notices or agreements shall take effect at the time
of receipt thereof. Each Seller shall only be entitled to act and rely upon any request, consent,
notice or agreement given or made on behalf of Ceres.

     SECTION 4.3 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of this Agreement.

 

     SECTION 4.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same instrument.

     SECTION 4.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio without regard to conflicts of laws principles
thereof.

[The remainder of this page intentionally left blank]

 

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

	 	 	 	 
	 

	 	CERES GROUP, INC.

	 

	 	/s/ David I. Vickers
	 

	 	 
	 

	 	By: David I. Vickers

Its: Executive Vice President

       and Chief Financial Officer

INTERNATIONAL MANAGED CARE, LLC

By: Insurance Partner, L.P.,

       its managing member

By: Insurance GenPar, L.P.,

       its general partner

By: Insurance GenPar MGP, L.P.,

       its general partner

By: Insurance GenPar MGP, Inc.,

       its general Partner

	 	 	 	 
	 

	 	/s/ Robert A. Spass
	 

	 	 
	 

	 	By: Robert A. Spass

Title: President

INTERNATIONAL MANAGED CARE

(BERMUDA), L.P.

By: Insurance Partner Offshore (Bermuda), L.P.,

       its general partner

By: Insurance GenPar (Bermuda), L.P.,

       its general partner

By: Insurance GenPar (Bermuda) MGP, L.P.,

       its general partner

By: Insurance GenPar (Bermuda)

       MGP, Ltd., its general Partner

	 	 	 	 
	 

	 	/s/ Robert A. Spass
	 

	 	 
	 

	 	By: Robert A. Spass

Title: PresidentEX-10.1

 

LEASE

between

LANDLORD:

REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION

OF SOUTHWESTERN PENNSYLVANIA

and

TENANT:

TOLLGRADE COMMUNICATIONS, INC.

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1. Definitions
	 	 	1	 
	 
	 	 	 	 
	2. Premises
	 	 	3	 
	2.1 Description
	 	 	3	 
	2.2 Demise
	 	 	3	 
	 
	 	 	 	 
	3. Term
	 	 	3	 
	3.1 Initial Term
	 	 	3	 
	3.1.1 Commencement/Termination
	 	 	3	 
	3.2 Renewal Term(s)
	 	 	3	 
	3.2.1 Renewal Option
	 	 	3	 
	3.2.2 Exercise
	 	 	4	 
	3.2.3 Terms
	 	 	4	 
	3.3 Holdover
	 	 	4	 
	 
	 	 	 	 
	4. Base Rent
	 	 	4	 
	4.1 Amount
	 	 	4	 
	4.1.1 Initial Term Base Rent
	 	 	4	 
	4.1.2 Renewal Term Base Rent
	 	 	4	 
	4.2 Place and Method of Payment
	 	 	5	 
	4.3 Late Charge
	 	 	5	 
	 
	 	 	 	 
	5. Additional Rent
	 	 	5	 
	5.1 Payment
	 	 	5	 
	 
	 	 	 	 
	6. Taxes, Utilities and Operation and Maintenance Costs
	 	 	6	 
	6.1 Taxes
	 	 	6	 
	6.1.1 Change in Method of Taxation
	 	 	6	 
	6.1.2 Tax Assessment Appeal Rights
	 	 	6	 
	6.1.3 Prorated Taxes
	 	 	7	 
	6.2 Utilities
	 	 	7	 
	6.3 Maintenance and Operations
	 	 	7	 
	 
	 	 	 	 
	7. Use and Occupancy
	 	 	7	 
	7.1 Use
	 	 	7	 
	7.2 Equipment and Personal Property
	 	 	8	 
	 
	 	 	 	 
	8. Compliance with Laws and Other Obligations
	 	 	8	 
	8.1 Compliance with Laws
	 	 	8	 
	8.2 Rules and Regulations
	 	 	8	 
	 
	 	 	 	 
	9. Indemnification
	 	 	8	 
	9.1 Tenant Indemnification
	 	 	8	 

i

 

	 	 	 	 	 
	 	 	Page
	9.2 Landlord Indemnification
	 	 	9	 
	 
	 	 	 	 
	10. Insurance
	 	 	9	 
	10.1 Tenant’s Insurance
	 	 	9	 
	10.1.1 Coverages
	 	 	9	 
	10.1.1.1 Liability Insurance
	 	 	9	 
	10.1.1.2 All Risk Insurance
	 	 	9	 
	10.1.1.3 Workers’ Compensation
	 	 	10	 
	10.1.1.4 Builder’s Risk
	 	 	10	 
	10.1.1.5 Terrorist Acts
	 	 	10	 
	10.2 Requirements
	 	 	10	 
	10.3 Waiver of Subrogation
	 	 	10	 
	10.4 Landlord’s Fire and Casualty Insurance
	 	 	10	 
	 
	 	 	 	 
	11. Utilities and Building Services
	 	 	10	 
	11.1 Services and Utilities
	 	 	10	 
	11.2 Snow Removal
	 	 	10	 
	11.3 Landscaping
	 	 	11	 
	 
	 	 	 	 
	12. Maintenance and Repairs
	 	 	11	 
	12.1 Landlord’s Obligations
	 	 	11	 
	12.2 Tenant’s Obligations
	 	 	11	 
	12.3 No Liability
	 	 	12	 
	12.4 Mold
	 	 	12	 
	 
	 	 	 	 
	13. Improvements
	 	 	12	 
	13.1 Tenant’s Improvements
	 	 	12	 
	13.2 Damage to Systems
	 	 	13	 
	13.3 Mechanics Liens
	 	 	13	 
	 
	 	 	 	 
	14. Assignment and Subletting
	 	 	14	 
	14.1 Consent Required
	 	 	14	 
	 
	 	 	 	 
	15. Rights of Landlord
	 	 	14	 
	15.1 Access
	 	 	14	 
	15.2 Changes
	 	 	15	 
	 
	 	 	 	 
	16. Surrender
	 	 	15	 
	 
	 	 	 	 
	17. Damage to or Destruction of Leased Premises
	 	 	16	 
	17.1 Landlord’s Duty to Repair and Restore
	 	 	16	 
	17.2 Repairs
	 	 	16	 
	17.3 Landlord’s Right to Terminate
	 	 	16	 
	17.4 Notice of Termination
	 	 	17	 

ii

 

	 	 	 	 	 
	 	 	Page
	18. Default; Remedies of Landlord
	 	 	17	 
	18.1 Tenant’s Defaults
	 	 	17	 
	18.2 Landlord Remedies
	 	 	17	 
	18.3 Remedies Cumulative
	 	 	18	 
	18.4 Additional Costs
	 	 	18	 
	18.5 Landlord’s Defaults
	 	 	18	 
	 
	 	 	 	 
	19. Eminent Domain
	 	 	18	 
	19.1 Total or Partial Taking
	 	 	18	 
	19.2 Award
	 	 	19	 
	 
	 	 	 	 
	20. Subordination of Lease/Attornment
	 	 	19	 
	20.1 Subordination
	 	 	19	 
	20.2 Attornment
	 	 	19	 
	 
	 	 	 	 
	21. Estoppel Certificate/Reporting Requirements
	 	 	20	 
	21.1 Estoppel Certificate
	 	 	20	 
	 
	 	 	 	 
	22. Environmental Matters
	 	 	20	 
	22.1 Definitions
	 	 	20	 
	22.2 Tenant’s Obligations
	 	 	20	 
	 
	 	 	 	 
	23. Miscellaneous
	 	 	22	 
	23.1 Force Majeure
	 	 	22	 
	23.2 Quiet Enjoyment
	 	 	22	 
	23.3 Non-Waiver by Landlord
	 	 	22	 
	23.4 No Acceptance of Surrender
	 	 	22	 
	23.5 No Waiver of Payment
	 	 	22	 
	23.6 Brokers
	 	 	22	 
	23.8 Governing Law
	 	 	23	 
	23.9 Severability
	 	 	23	 
	23.10 Interpretation
	 	 	23	 
	23.11 Entire Agreement
	 	 	23	 
	23.12 Notices
	 	 	23	 
	23.13 Successors and Assigns
	 	 	24	 
	23.14 Captions
	 	 	24	 
	23.15 Lease Not an Offer
	 	 	24	 
	23.16 Counterparts
	 	 	24	 

iii

 

EXHIBITS

A — Legal Description of Leased Premises

B — Drawing of Leased Premises

C — Capital Items

D — Rules and Regulations

E — Tenant Lease Estoppel Certificate

iv

 

EXHIBIT 10.1

LEASE

     THIS LEASE (this “Lease”) is made and entered into this 31st day of August, 2005
(the “Execution Date”), by and between REGIONAL INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTHWESTERN
PENNSYLVANIA, a Pennsylvania nonprofit corporation (“Landlord”), and TOLLGRADE COMMUNICATIONS,
INC., a Pennsylvania corporation (“Tenant”), but shall be deemed to be effective as of January 1,
2005.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Lease Agreement dated August 5, 1993,
as amended (the “Original Lease”), pursuant to which Tenant occupies the entirety of that certain
building known as Harmar Industrial Manor located as 493 Nixon Road, Cheswick, PA 15024 (the
“Building”); and

     WHEREAS, in order to reflect numerous desired changes to the Original Lease, Landlord and
Tenant desire that this Lease supersede and replace the Original Lease in its entirety.

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

1. DEFINITIONS

As used in this Lease, the following terms shall have the meanings set forth below or in the
Section of this Lease referred to, unless the context otherwise requires:

Additional Rent: As defined in Section 5.1.

Base Rent: As defined in Section 4.1.1.

Building: As defined in the Recitals hereto.

Capital Items: As defined in Section 2.2.

Casualty: As defined in Section 17.1.

CERCLA: As defined in Section 22.1.1.

Commencement Date: As defined in Section 3.1.1.

Environmental Laws: As defined in Section 22.1.1.

Event of Default: As defined in Section 18.1.

 

 

Final Walk-Through: As defined in Section 16.

Hazardous Substances: As defined in Section 22.1.2.

HSCA: As defined in Section 22.1.1.

Initial Term: As defined in Section 3.1.1.

Initial Term Base Rent: As defined in Section 4.1.1.

Initial Walk-Through: As defined in Section 16.

Land: As defined in Section 2.1.

Late Rate: As defined in Section 4.3.

Laws: As defined in Section 8.1.

Leased Premises: As defined in Section 2.1.

Mold Conditions: As defined in Section 12.4.1.

Obligation: As defined in Section 23.3.

Operation and Maintenance Costs: As defined in Section 6.3.

Original Lease: As defined in the Recitals hereto.

Prepaid Taxes: As defined in Section 6.1.3.

Punch List Items: As defined in Section 16.

RCRA: As defined in Section 22.1.1.

Renewal Notice: As defined in Section 3.2.2.

Renewal Term: As defined in Section 3.2.1.

Renewal Term Base Rent: As defined in Section 4.1.2.

Rent: As defined in Section 5.1.

Rentable Square Feet: As defined in Section 2.1.

Rules and Regulations: As defined in Section 8.2.

2

 

Taxes: As defined in Section 6.1.1.

Tenant’s Improvements: As defined in Section 13.1.

Term: As defined in Section 3.1.1.

Termination Date: As defined in Section 3.1.

Utility Costs: As defined in Section 6.2.

2. PREMISES

2.1 Description. The leased premises shall consist of the Building together with all
appurtenances thereto including, without limitation, the land upon which the Building is situated
(the “Land” and together with the Building, the “Leased Premises”). The Building contains One
Hundred Eleven Thousand Six Hundred (111,600) square feet of space (“Rentable Square Feet”). The
legal description of the Land is attached hereto and incorporated herein as Exhibit A. A drawing
depicting the Leased Premises is attached hereto and incorporated herein as Exhibit B.

2.2 Demise. For and in consideration of payment of Rent and performance of other
obligations hereunder and intending to be legally bound, Landlord does hereby lease and demise unto
Tenant, and Tenant does hereby lease and take from Landlord, the Leased Premises. No personal
property or equipment of Landlord shall be part of the Leased Premises. Except for Landlord’s
obligations as set forth in Section 12.1, the items described on Exhibit C attached hereto and
incorporated herein and any latent defects related thereto (“Capital Items”) and any latent defects
otherwise related to the Leased Premises, and to the extent the Leased Premises are in compliance
with applicable Laws, Tenant hereby accepts the Leased Premises in its “AS IS, WHERE IS” condition
“WITH ALL FAULTS”.

3. TERM

3.1 Initial Term.

3.1.1 Commencement/Termination. The initial term of this Lease (the “Initial Term”) shall
be deemed to have commenced as of 12:01 A.M. on January 1, 2005 (the “Commencement Date”) and
shall expire as of 11:59 P.M. on June 30, 2007 (the “Termination Date”), unless the Initial Term is
extended as provided in Section 3.2.1 hereof. The Initial Term and the Renewal Term (as defined
herein) are sometimes hereinafter collectively referred to as the “Term.”

3.2 Renewal Term.

3.2.1 Renewal Option. Tenant shall have the option to renew this Lease for two (2) years
following expiration of the Initial Term (the “Renewal Term”), provided: (i) that this Lease is in
full force and effect immediately prior to the date of the commencement of the Renewal Term; and
(ii) that there is no then-existing Event of Default under any of the provisions herein.

3

 

3.2.2 Exercise. Such renewal option shall be exercised by Tenant serving on Landlord
written notice to that effect not later than six (6) months prior to the expiration of the Initial
Term (the “Renewal Notice”). The Renewal Notice given by Tenant shall be irrevocable and shall
constitute an agreement between the parties for a renewal of this Lease. If Tenant fails to
exercise its renewal option on or before such time period, Tenant waives its renewal option.
Subject to Section 3.3 below, if this Lease or the right of occupancy of Tenant hereunder shall
have expired or come to an end pursuant to any of the provisions of this Lease, all rights of
Tenant to renew shall be deemed terminated automatically.

3.2.3 Terms. Said renewal shall be upon the same terms, covenants, conditions and
limitations as provided in this Lease, except that the Renewal Term Base Rent shall be the amount
set forth in Section 4.1.2.

3.3. Holdover. If Tenant occupies the Leased Premises after the expiration of (a) the
Initial Term, absent an exercise of its renewal rights hereunder, or (b) the Renewal Term, as the
case may be, this Lease and all of its terms, provisions, conditions, covenants, waivers, remedies
and any and all of Landlord’s rights herein specifically given and agreed to, shall be in force for
one month thereafter and thereafter from month to month.

4. RENT

4.1 Amount.

4.1.1 Initial Term Base Rent . Tenant shall pay Base Rent to Landlord during the
Initial Term beginning on the Commencement Date and on the first business day of each successive
calendar month, in advance and without demand. The Base Rent for the Initial Term (“Initial Term
Base Rent”) shall be Four Hundred Eighteen Thousand Five Hundred Dollars and No Cents ($418,500.00)
per year, payable in equal monthly installments of Thirty-Four Thousand Eight Hundred Seventy-Five
Dollars and No Cents ($34,875.00). Landlord acknowledges that for the period January 1, 2005 to
September 30, 2005 (the “Stub Period”), it has received Base Rent payments from Tenant in an amount
equal to Four Hundred Ninety Seven Thousand One Hundred Seventy-Eight Dollars and No Cents
($497,178.00) which represents an overpayment of Base Rent of One Hundred Eighty-Three Thousand
Three Hundred Three Dollars and No Cents ($183,303.00) during the Stub Period. Tenant shall be
credited such amount less the amount of Prepaid Taxes (as defined in Section 6.1.3), Insurance
Costs (as defined in Section 10.1.1.2) and Operation and Maintenance Costs (as defined in Section
6.3) incurred by Landlord as set forth herein. Such credit amounts to Seventy-Nine Thousand
Eighty-Four Dollars and Ninety-Eight Cents ($79,084.98) which will be applied to the Base Rent for
the months of October, November and December of 2005. Accordingly, the next Base Rent payment due
to Landlord shall be Twenty-Five Thousand Five Hundred Forty Dollars and Two Cents ($25,540.02)
which shall be due and payable on December 1, 2005.

4.1.2 Renewal Term Base Rent. Tenant shall pay Base Rent to Landlord on the first day
of each month during the Renewal Term, in advance and without demand. The Base Rent for the
Renewal Term (“Renewal Term Base Rent”) shall be an amount equal to Four Hundred Twenty-Six
Thousand Eight Hundred Seventy Dollars and No Cents ($426,870.00) per each twelve (12)

4

 

month period of the Renewal Term, payable in equal monthly installments of Thirty-Five Thousand
Five Hundred Seventy-Two Dollars and Fifty Cents ($35,572.50).

4.2 Place and Method of Payment. Tenant agrees to pay Base Rent (whether for the Initial
Term or for the Renewal Term), in monthly installments, on or before the first business day of each
month throughout the Term. Base Rent must be received by Landlord, on the first business day of
each month by either (a) wire transfer to Landlord’s account at Dollar Bank, account #
266-587-7127, Dollar Bank, ABA # 243-074-385, or (b) by check made payable to Landlord, which shall
be delivered or mailed, postage prepaid, to Regional Industrial Development Corporation of
Southwestern Pennsylvania, Post Office Box 3830, Pittsburgh, PA 15230-3830, or to such other
account or address as Landlord may specify from time to time.

4.3 Late Charge. If any installment of Rent, or any other sum due from Tenant shall not be
received by Landlord within ten (10) days after the due date, then Tenant shall pay Landlord a late
charge for each month or partial month that such amount is overdue equal to the overdue amount of
any Rent or other sum that is due and payable to Landlord multiplied by FIVE PERCENT (5%) (the
“Late Rate”). Acceptance of such late charge by Landlord shall in no event constitute a waiver of
Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of
the other rights and remedies granted hereunder.

5. ADDITIONAL RENT

5.1 Payment. In addition to Base Rent, Tenant shall pay all Taxes, Utility Costs,
insurance costs and Operation and Maintenance Costs related to the Leased Premises (collectively,
the “Additional Rent”). To the extent that Tenant is required to pay any items of Additional Rent
directly to Landlord, following receipt of appropriate documentation of such items from Landlord,
Additional Rent shall be payable by Tenant in the same manner as Base Rent pursuant to Subsection
4.2 above without demand. Tenant’s failure to pay any such Additional Rent shall entitle Landlord
to the same remedies available for non-payment of Base Rent. Base Rent and Additional Rent are
herein collectively referred to as “Rent”. Additional Rent shall not include: (a) depreciation,
interest, or amortization on any mortgage encumbering the Leased Premises, (b) legal fees incurred
in negotiating and enforcing this Lease or any sublease or assignment hereof, (c) expenses incurred
in leasing or procuring new lessees including, real estate brokers’ leasing commissions and
advertising, (d) costs of any items to the extent Landlord receives reimbursement for same from
insurance proceeds or a third party, (e) interest, principal, attorney fees, costs of environmental
investigations or reports, points, fees, and other lender costs and closing costs on any mortgage
or mortgages or other debt instrument encumbering any portion of the Leased Premises, (f) costs of
(i) Landlord’s accounting and legal matters which may, include, without limitation, (A) defending
or prosecuting any lawsuit with any mortgagee, lender, broker, tenant, occupant, or prospective
tenant or occupant, (B) selling or syndicating any of Landlord’s interest in the Leased Premises,
and (C) disputes between Landlord and Landlord’s property manager, if any; (g) wages, salaries, and
other compensation paid to any employee or independent contractor of Landlord, including Landlord’s
property manager, if any; (h) costs or penalties incurred by Landlord because the Leased Premises
violates any valid, applicable building code, regulation, or law in effect and as interpreted by
government authorities before the date hereof; and (i) fines, penalties, interest, and the costs of
repairs, replacements, alterations, or

5

 

improvements necessary to make all or any portion of the Leased Premises comply with applicable
past laws in effect and as interpreted by government authorities before the date hereof,
such as sprinkler installation or requirements under the Americans With Disabilities Act of 1990
(42 USC ss. 12101-12213). Tenant shall have the right to audit Landlord’s books and records
relating to the calculation of Additional Rent and Landlord shall reimburse Tenant for any
overcharge. In the event it is determined as a result of such audit that Landlord overcharged
Tenant by more than five percent (5%), Landlord will reimburse Tenant for the cost of such audit.

6. TAXES, UTILITIES AND OPERATION AND MAINTENANCE COSTS

6.1 Taxes. “Taxes” shall mean all taxes pertaining to the Leased Premises, including all
federal, state and local governmental ad valorem real estate taxes, assessments and charges of
every kind or nature, including, but not limited to, any municipal Business Privilege Tax,
Neighborhood Improvement District Tax, and Business Improvement District Tax, which Landlord shall
pay or become obligated to pay because of or in connection with the ownership, leasing, management,
control or operations of the Leased Premises. For purposes hereof, Taxes for any year shall be
Taxes which are assessed for such year. Taxes in any year shall be reduced by the net amount of
any tax refund received by Landlord with respect to such year and all payments in such year shall
be paid so as to take advantage of any discount. In the event that Landlord receives a tax refund,
Landlord shall immediately notify Tenant in writing of such tax refund. Taxes shall not include any
federal, state or local use, franchise, capital stock, inheritance, general income, gift or estate
taxes except as provided below.

6.1.1 Change in Method of Taxation. If at any time during the Term hereof the methods of
taxation prevailing at the commencement of the Term hereof shall be altered so that in lieu of or
as a supplement to or a substitute for the whole or any part of the real estate taxes or
assessments now levied, assessed, or imposed upon the Leased Premises, there shall be levied,
assessed, or imposed any form of assessment, tax, license fee, license tax, business license fee,
business license tax, excise tax, commercial rental tax, levy, charge, penalty, or other imposition
by the federal or state government, any political subdivision, municipality, school district, or
other taxing or assessing body or assessing body, which constitutes (1) a tax, levy, assessment,
fee, imposition or other charge upon the Rent payable hereunder, the Landlord’s right to rent or
other income from the Building or upon the Landlord’s business of leasing the Leased Premises; or
(2) a tax, levy, assessment, fee, imposition or other charge allocable to or measured, in whole or
in part, by the area of the Building or the Leased Premises or the Rent payable hereunder; or (3) a
tax, levy, assessment, fee, imposition or other charge upon this transaction or any document
related thereto, or upon the status of Landlord or Tenant as such; or (4) any tax, levy,
assessment, fee, imposition or other charge upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy of the Building or the
Leased Premises; then all such taxes, assessments, levies, impositions and charges or the part
thereof so measured or based, which are in lieu of or a substitute for the whole or any part of
the real estate taxes or assessments now levied, assessed or imposed on the Leased Premises or the
Leased Premises shall also be included in the definition of the term “Taxes.”

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6.1.2 Tax Assessment Appeal Rights. In the event that the Leased Premises is reassessed
for Tax purposes during the Term, Landlord hereby authorizes Tenant to appeal any tax reassessment
for and on its behalf using counsel of Tenant’s choice. If Tenant elects not to appeal a tax
reassessment, Landlord shall have the right to do so at its sole cost and expense provided that
Landlord periodically provide Tenant with information relating to the appeal. In the event a
governmental authority institutes proceedings for the purposes of challenging the current
assessment or any reassessment, Landlord shall immediately notify Tenant and shall give Tenant the
option of either jointly defending the challenge with Landlord or defending the challenge for and
on behalf of Landlord.

6.1.3 Prorated Taxes. Tenant acknowledges and agrees that prior to the Execution Date,
Landlord has paid Seventy-Seven Thousand Eight Hundred Eighty-Nine Dollars and Sixteen
Cents($77,889.16) for certain Taxes applicable to the years 2005 and 2006 which were not payable or
paid by Tenant under the Original Lease (“Prepaid Taxes”). In order to comply with Section 5.1
hereof, Tenant shall reimburse Landlord for the amount of Prepaid Taxes in accordance with Section
4.1.1 above.

6.2 Utilities. “Utility Costs” shall mean the cost of all utilities serving the Leased
Premises, including, without limitation, gas, steam, water, sewer, electricity, power, heating,
lighting, air-conditioning and ventilation consumed by the Leased Premises and the servicing
thereof.

6.3 Maintenance and Operations. The expenses for maintaining and operating the Leased
Premises (hereinafter referred to as “Operation and Maintenance Costs”) shall be deemed to mean any
and all expenses, costs and disbursements incurred during such operating year in respect of the
operation, maintenance, servicing and repair of the Leased Premises except for expenses related to
(i) improvements, repair or maintenance to the exterior walls, roof and foundation of the Building
(ii) Capital Items (as described in Exhibit C hereto), and (iii) the items stated in the last
sentence of Section 5.1 hereof. Landlord shall be solely responsible for the expenses related to
items (i), (ii) and (iii). Tenant acknowledges and agrees that prior to the Execution Date,
Landlord has paid Eight Thousand Eight Hundred Thirteen Dollars and Eighty-Six Cents ($8,813.16)
for certain Operation and Maintenance Costs applicable to the calendar year 2005 which were not
payable by Tenant under the Original Lease. In order to comply with Section 5.1 hereof, Tenant
shall reimburse Landlord for said amount of Operation and Maintenance Costs in accordance with
Section 4.1.1 above.

7. USE AND OCCUPANCY

7.1 Use. Tenant will not engage nor will Tenant permit any person, corporation or other
entity to engage upon the Leased Premises in any trade or occupation which is in violation of law.
Tenant shall use the Leased Premises for the purpose of conducting its business operations which
includes light manufacturing operations and adjunct uses, such as storage and related office
activities. Tenant shall not use or occupy the Leased Premises for any other purpose or business
without the prior written consent of Landlord which such consent shall not be unreasonably
withheld, conditioned or delayed. The Leased Premises shall not be used for retail sales or
displays for such purposes, nor shall Tenant install an automated teller machine within the Leased
Premises. Product displays will be permitted provided the same cannot be seen from

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the outside of the Leased Premises. Tenant covenants and agrees that no more than the maximum
number of occupants allowed by applicable Law shall occupy the Leased Premises at any time.

7.2 Equipment and Personal Property. Tenant may bring such equipment, furniture, trade
fixtures or other personal property into the Leased Premises as may be required for its business,
including, without limitation, special HVAC units (including Liebert temperature and humidity
control system or the equivalent thereof). Title to such personal property shall at all times be
vested in Tenant. Such personal property shall not be of an unusual size, type, or weight so as to
adversely affect the Leased Premises.

8. COMPLIANCE WITH LAWS AND OTHER OBLIGATIONS

8.1 Compliance with Laws. Tenant will, at Tenant’s expense, observe and comply with all
laws, orders, regulations, rules, and requirements of federal, state and local governments or any
subdivision, agency or authority thereof, including, but not limited to, the Americans with
Disabilities Act (the “Laws”), applicable to the Leased Premises to the extent such Laws pertain to
the manner in which Tenant uses the Leased Premises; provided, however, Tenant shall have no
obligation to make structural changes to the Leased Premises required as a result of any change in
Law enacted or becoming effective prior to or during the Term. Without limiting the foregoing,
Tenant agrees that it shall not, nor shall it permit or suffer any subtenant, occupant or other
user of the Leased Premises to engage in any activity that could result in any liability, cost or
expense under any Environmental Laws (as hereinafter defined) or any other law or regulation.
Except for, and to the extent of, Landlord’s gross negligence, willful misconduct or failure to
comply with the terms of this Lease, Tenant will indemnify and save harmless Landlord from any
liability, damage or expense (including reasonable attorney’s fees and expenses) arising from
Tenant’s failure to comply with this Section 8.

8.2 Rules and Regulations. Tenant will observe and comply with the Rules and Regulations
for the Building (the “Rules and Regulations”) contained on Exhibit D attached hereto and made a
part hereof by reference and as the same may be amended from time to time. The Rules and
Regulations standards shall apply to Tenant and its employees, agents, licensees, invitees,
permitted subtenants and contractors.

9. INDEMNIFICATION

9.1 Tenant Indemnification. Tenant shall indemnify, hold harmless and defend Landlord from
and against any and all costs, expenses (including reasonable attorney’s fees and court costs),
liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any kind
asserted by or on behalf of any person or governmental authority, arising out of or in any way
connected with, and Landlord shall not be liable to Tenant on account of, (i) any failure by Tenant
to perform any of the agreements, terms, covenants or conditions of this Lease required to be
performed by Tenant, (ii) any failure by Tenant to comply with any statutes, ordinances,
regulations or orders of any governmental authority relating to the use and occupancy of the Leased
Premises, or (iii) any accident, death or personal injury, or damage to, or loss or theft of,
property, which shall occur in or about the Leased Premises, except as the same may be caused

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solely by the gross negligence or intentional wrongdoing of Landlord, its employees or agents or
failure of Landlord to observe its covenants hereunder.

9.2 Landlord Indemnification. Landlord shall indemnify, hold harmless and defend Tenant
from and against any and all costs, expenses (including reasonable attorney’s fees and court
costs), liabilities, losses, damages, suits, actions, fines, penalties, claims or demands of any
kind asserted by or on behalf of any person or governmental authority, arising out of or in any way
connected with, and Tenant shall not be liable to Landlord on account of, (i) any failure by
Landlord to perform any of the agreements, terms, covenants or conditions of this Lease required to
be performed by Landlord, (ii) any failure by Landlord to comply with any statutes, ordinances,
regulations or orders of any governmental authority relating to the use and occupancy of the Leased
Premises, or (iii) any accident, death or personal injury, or damage to, or loss or theft of,
property, which shall occur in or about the Leased Premises, except as the same may be caused
solely by the gross negligence or intentional wrongdoing of Tenant, its employees or agents or
failure of Tenant to observe its covenants hereunder.

10. INSURANCE

10.1 Tenant’s Insurance.

10.1.1 Coverages. Tenant will, at Tenant’s cost and expense, maintain with insurance
companies satisfactory to Landlord during the Term:

10.1.1.1 Liability Insurance. Commercial general public liability insurance on an
occurrence basis insuring against claims for bodily injury, death or property damage occurring on,
in or about the Leased Premises with minimum combined limits of One Million Dollars ($1,000,000.00)
for bodily injury liability and property damage liability. This policy shall be written on a
comprehensive basis to provide all major divisions of coverage, including, but not limited to, the
following: (1) Leased Premises operations, (2) products and complete operations, (3) personal
injury liability, (4) broad form property damage, and (5) fire legal liability.

10.1.1.2 All Risk Insurance. Insurance covering the Leased Premises, all trade fixtures
and personal property in or on the Leased Premises, in an amount not less than one hundred percent
(100%) of their actual replacement cost, providing protection against all risks of direct physical
loss. Notwithstanding the foregoing, the parties acknowledge and agree that prior to the Execution
Date, Landlord has solely maintained insurance coverage on the Leased Premises and in connection
therewith, Landlord has paid Seventeen Thousand Five Hundred Fifteen Dollars and No Cents
($17,515.00) for said insurance coverage for the period January 1, 2005 to September 1, 2005 which
was not payable by Tenant under the Original Lease (“Insurance Costs”). In order to comply with
Section 5.1 hereof, Tenant shall reimburse Landlord for said Insurance Costs in accordance with
Section 4.1.1 above. Additionally, beginning on September 1, 2005, Tenant shall obtain and
maintain the insurance described in this Section 10.1.1.2 at its sole cost and expense.

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10.1.1.3 Workers’ Compensation. Worker’s compensation insurance in the amounts required
by law and employer’s liability insurance in the amount of Five Million Dollars ($5,000,000).

10.1.1.4 Builder’s Risk. During any period of construction by Tenant on the Leased
Premises, builder’s risk insurance on a completed value, non-reporting basis for the total cost of
such alterations and improvements providing protection against all risks of direct physical loss.

10.1.1.5 Terrorist Acts. Coverage for terrorist acts, if such coverage is commercially,
reasonably available, with limits and deductibles satisfactory to Landlord. Such coverage will be
deemed commercially, reasonably available if a majority of similarly situated (or comparable)
Tenants in the county in which the Leased Premises is located maintain such coverage.

10.2 Requirements. Such insurance coverage (other than workers’ compensation) shall name
Landlord as loss payee and an additional insured and shall contain a provision that the same may
not be cancelled or reduced without providing Landlord at least thirty (30) days’ prior written
notice. All policies shall be procured for periods of not less than one (1) year. Tenant shall
deposit with Landlord certificates of such insurance (or copies of policies upon Landlord’s
request) at or prior to the commencement of this Lease and thereafter not less than ten (10) days
prior to the expiration of such policy or policies. In the event that the Tenant fails to comply
with any of the foregoing requirements, and after ten (10) business days notice allowing Tenant an
opportunity to cure, Landlord shall be entitled, but not obligated, to procure such insurance. Any
sums expended by Landlord in procuring such insurance shall be deemed Additional Rent and shall be
paid by Tenant immediately upon written demand therefor by Landlord.

10.3 Waiver of Subrogation. Landlord and Tenant each waives any and all rights of recovery
that such party, or any party claiming by, through or under such party by subrogation or otherwise,
may have against the other party, or against the officers, employees, agents and representatives of
the other party, for loss of, or damage to, such waiving party or its property or the property of
others under its control, to the extent any such loss or damage is insured against (or should be
insured against pursuant to the terms of this Lease) under any insurance policy in force at the
time of such loss or damage. Landlord and Tenant shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers that the foregoing mutual waiver of
subrogation is contained in this Lease and such insurance policies shall contain a provision by
which the insurance company specifically waives its right of subrogation with respect to any loss
or losses paid thereunder.

11. UTILITIES AND BUILDING SERVICES

11.1 Services and Utilities. Tenant shall promptly pay, as the same become due, all
Utilities Costs related to the Leased Premises during the Term, including without limitation,
meter, use and/or connection fees, hook-up fees, or standby fees and penalties for discontinued or
interrupted service caused by Tenant.

11.2 Snow Removal. Tenant shall be responsible for arranging and paying for snow and ice
removal services for the parking lot, roadways, sidewalks and walkways of the Leased Premises.

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11.3 Landscaping. Tenant shall be responsible for arranging and paying for landscaping
services at the Leased Premises.

12. MAINTENANCE AND REPAIRS

12.1 Landlord’s Obligations. Landlord shall be responsible to maintain and repair the
roof, the exterior walls and the foundation of the Leased Premises and shall also be responsible
for the maintenance and repair of Capital Items as provided in Exhibit C. If Landlord refuses or
neglects to perform the maintenance and repair obligations for which it has responsibility under
this Lease, or fails to diligently prosecute the same to completion, after written notice from
Tenant of the need therefore, and after a reasonable time thereafter in which to make the same,
Tenant may make such repairs at the expense of Landlord and such expense shall be credited against
the next payable installment of Rent.

12.2 Tenant’s Obligations. Except as the Landlord is obligated for repairs as provided in
Section 12.1, Tenant shall make, at its sole cost and expense, all repairs and replacements
necessary to maintain the Leased Premises and shall keep the Leased Premises and fixtures therein,
and the parking lots, roadways, sidewalks and walkways which are part of the Leased Premises in
neat, clean, and orderly condition. Tenant’s repair and maintenance obligations shall include, but
shall not be limited to, all HVAC, plumbing and sewerage facilities within the Leased Premises,
fixtures, interior walls and ceiling, floors, windows (including the repairing, resealing, cleaning
and replacing of both interior and exterior windows), interior and exterior doors, entrances, plate
glass, showcases, skylights, all electrical facilities and equipment, including lighting fixtures,
lamps, fans and any exhaust equipment and systems, electrical motors and all other appliances and
equipment of every kind and nature located in, upon or about the Leased Premises. Tenant shall
also be responsible for all pest control within the Leased Premises, and for all trash removal and
disposal for the Leased Premises. Tenant shall obtain HVAC systems preventive maintenance
contracts in accordance with manufacturer recommendations and paid for by Tenant, and which shall
provide for and include replacement of filters, oiling and lubricating of machinery, parts
replacements, adjustment of drive belts, oil changes and other preventive maintenance, including
maintenance of duct work interior unit drains and caulking at sheet metal, and recaulking of jacks
and vents on an as-needed basis. Tenant shall have the benefit of all warranties available to
Landlord regarding the equipment in such HVAC systems. Tenant shall also be responsible for any
repairs needed due to Tenant’s negligence or misuse. If Tenant refuses or neglects to make any
such repairs which are its responsibility hereunder, or fails to diligently prosecute the same to
completion, after written notice from Landlord of the need therefor, and a reasonable time
thereafter in which to make the same, Landlord may make such repairs at the expense of Tenant and
such expense shall be collectible as Additional Rent. Notwithstanding the foregoing, the parties
acknowledge and agree that certain portions of the parking lots and roadways on the Leased Premises
are in need of replacement as of the date of execution hereof. Landlord further acknowledges and
agrees that Tenant shall not be obligated to replace all or any portion of the parking lots and
roadways or improve the same beyond their current condition, provided that Tenant shall maintain
the condition of the same in at least the same condition as they are in as of the date of execution
hereof using methods similar to those used by Landlord for the maintenance thereof prior to the
date hereof.

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12.3 No Liability. Landlord shall not be liable by reason of any injury to or interference
with Tenant’s business arising from the making of any repairs, alterations, additions or
improvements in or to the Leased Premises or the Building or to any appurtenances or equipment
therein except for injuries or interference with Tenant’s business relating to Landlord’s repairs
of the items it is required to repair hereunder, including Capital Items.

12.4 Mold.

Tenant shall not install any Tenant’s Improvements or conduct any activities in the Leased Premises
that would create any mold (“Mold”) or conditions that reasonably can be expected to give rise to
mold (the “Mold Conditions”), including, but not limited to, observed or suspected instances of
water damage, mold growth, repeated complaints of respiratory ailment or eye irritation by Tenant’s
employees or any other occupants in the Leased Premises, or any notice from a governmental agency
of complaints regarding the indoor air quality at the Leased Premises attributable to Tenant’s
Improvements or Tenant’s activities in the Leased Premises. Tenant shall promptly notify Landlord
in writing if it suspects Mold or Mold Conditions at the Leased Premises.

In the event of suspected Mold or Mold Conditions at the Leased Premises, Landlord shall have the
right to cause an inspection of the Leased Premises to be conducted, during such time as Landlord
may reasonably designate, to determine if Mold or Mold Conditions are present at the Leased
Premises; provided that Tenant shall have the right to perform its own inspection of the Leased
Premises. If it is ultimately determined that Mold or Mold Conditions are present and are
exclusively attributable to Tenant’s Improvements or Tenant’s activities in the Leased Premises,
Tenant will reimburse Landlord for the cost of such inspection and will pay for the reasonable cost
of remediation by Landlord. If it is determined that Mold or Mold Conditions are present and are
attributable to Landlord’s failure to perform any of its maintenance and repair obligations
hereunder, Landlord will reimburse Tenant for the cost of inspection and will pay for the cost of
remediation by Tenant.

13. IMPROVEMENTS

13.1 Tenant’s Improvements. Tenant shall have the right to make any additions, alterations
and improvements to the Leased Premises. Any such improvements made by Tenant are collectively
referred to as “Tenant’s Improvements”. The installation of all of Tenant’s Improvements shall
comply with all insurance requirements and all applicable governmental laws, ordinances, and
regulations, and shall be done in a good and workmanlike manner. Tenant shall obtain all necessary
permits required by governmental authorities having jurisdiction prior to the commencement of
construction of Tenant’s Improvements. In the event that Tenant is required to obtain such a
permit(s) to perform the Tenant Improvements, Tenant shall also be required to receive Landlord’s
prior approval prior to the commencement of construction of the Tenant Improvements. Landlord
shall provide such approval no later then five (5) business days after receiving Tenant’s request
for approval and such approval may not be unreasonably withheld, conditioned or delayed.

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13.2 Damage to Systems. If any part of the mechanical, electrical or other systems in the
Leased Premises (i.e., life safety or automatic fire extinguisher/sprinkler system) shall be
damaged by Tenant, its contractors or subcontractors during the performance of the Tenant’s
Improvements, Tenant shall promptly notify Landlord and Tenant will promptly repair such damage at
Tenant’s expense. In the event that Tenant does not repair such damage within a reasonable period
of time (which shall not exceed sixty (60) days), Landlord shall have the right but not the
obligation to make any repairs or alterations which Landlord deems necessary for the safety or
protection of the Building, or which Landlord is required to make by any court or pursuant to any
governmental requirement. The cost of any repairs made by Landlord on account of Tenant’s default,
or on account of the misuse or neglect by Tenant or its invitees, contractors or agents anywhere in
the Building shall become Additional Rent payable by Tenant within thirty (30) days of Tenant’s
receipt of Landlord’s invoice for the same. In no event shall such damage result in the abatement
of any Rent payable hereunder.

13.3 Mechanics Liens. Nothing contained in this Lease shall be construed as constituting
the consent or request of Landlord, express or implied, to or for the performance (on behalf of or
for the benefit of Landlord) by any contractor, laborer, materialman or vendor, of any labor or
services or for the furnishing of any materials for any construction, alteration, addition, repair
or demolition of or to the Leased Premises or any part thereof. Notice is hereby given that
Landlord will not be liable for any labor, services or materials furnished or to be furnished to
Tenant, or to anyone holding an interest in the Leased Premises or any part thereof through or
under the Tenant, and that no mechanic’s or other liens for any such labor, services or materials
shall attach to or affect the interest of Landlord in and to the Leased Premises. Tenant will not
file, nor will it permit or suffer any contractor or subcontractor, materialman or mechanic or
other person under it to file, nor shall any contractor, subcontractor, materialman or mechanic
file any mechanics’ lien or other liens or claims for work done or materials furnished in or about
the Leased Premises against the Leased Premises, the Building or the Leased Premises. Unless
Landlord otherwise agrees, in writing, prior to the commencement of any work on the Leased
Premises, Tenant shall file in the office of the Prothonotary of the county where the Leased
Premises is located a waiver of the right to file liens which shall be in the usual form for such
waivers, such form to be approved by the Landlord. Landlord’s consent to any such work shall not
be deemed to mean that the work is for the benefit of Landlord. Notwithstanding the foregoing, if
any mechanics’ or other lien shall be filed against the Leased Premises purporting to be for labor
or material furnished or to be furnished at the request of Tenant, then Tenant shall, at its
expense, cause such lien to be discharged of record by payment, bonded over or other adequate
security provided, within thirty (30) days after the filing thereof. If Tenant shall fail to cause
such lien to be discharged of record within such thirty-day period, or, if such lien is contested
by Tenant and Tenant fails to provide adequate security for Landlord’s protection; then Landlord
may cause such lien to be discharged by payment, bond or otherwise, without investigation as to the
validity thereof or as to any offsets or defenses thereto, and Tenant shall, upon demand, reimburse
Landlord for all reasonable amounts paid and costs incurred including attorneys’ fees, in having
such lien discharged of record.

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14. ASSIGNMENT AND SUBLETTING

14.1 Consent Required. Tenant may not assign, transfer, encumber, mortgage or convey this
Lease or sublet all or any part of the Leased Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided,
however, that such consent may be withheld at Landlord’s sole discretion if the proposed assignee
or subtenant or its proposed use of the Leased Premises would be in violation of the requirements
of any provider of financing for the Leased Premises or any agency having authority over the Leased
Premises. Landlord’s refusal to grant consent under this Section 14.1 shall not be deemed an
unreasonable withholding of consent if the general reputation or financial position of the proposed
assignee or sublessee is unsatisfactory to Landlord after having had the opportunity to review
financial and other information relating to the proposed assignee or sublessee and to make any
necessary inquiries of the proposed assignee or sublessee. Notwithstanding the foregoing, Tenant
shall have the right to assign this Lease to a present or future wholly owned subsidiary or parent
or any successor-in-interest of the entire business of Tenant as a result of merger, consolidation,
purchase, assignment or operation of law without the consent of Landlord. If Tenant is a
corporation, except in cases where all the outstanding voting stock of Tenant is listed on the
National Securities Exchange, any change in ownership or power to vote a majority of the
outstanding voting stock or any merger, consideration or liquidation involving Tenant shall be
deemed an assignment of Tenant’s interest in this Lease. In the event Landlord consents to any
assignment or subletting, no such consent shall be deemed to be a consent to any subsequent
assignment or sublease. In the event that Landlord consents to an assignment of this Lease to a
third party, Tenant shall be relieved of all of its obligations set forth in this Lease. If
Landlord consents to any sublet, the sublease shall be subject to the terms and conditions of this
Lease, except those terms and conditions relating to Rent, Additional Rent, and any other amount
due under this Lease. Any subtenant shall acknowledge that it has reviewed and agreed to all of
the terms and conditions of this Lease. Such subtenant shall agree in the sublease not to do, or
fail to do, anything that would cause Tenant to violate its obligations under this Lease. The
sublease shall (a) require that subtenant shall have no right to exercise any purchase option
granted to Tenant in this Lease, (b) contain a waiver of subrogation against Landlord and require
subtenant’s insurance policies to acknowledge such a waiver of subrogation, (c) require subtenant
to send Landlord copies of any and all notices concerning the subleased space that subtenant is
obligated to provide to Tenant, (d) provide that, at Landlord’s option, the sublease shall not
terminate in the event this Lease terminates and subtenant shall execute an attornment agreement if
Landlord, in its absolute discretion, elects to have the sublease continue beyond the date of the
termination of this Lease, (e) provide that subtenant shall have no right (and shall waive any
rights it may have) to hold Landlord responsible for any liability in connection with the Leased
Premises, including, without limitation, any liability arising from the noncompliance with any
federal, state or local laws applicable to the Leased Premises.

15. RIGHTS OF LANDLORD

15.1 Access. Landlord, its employees and agents, upon reasonable notice to Tenant (except
in the event of an emergency), shall have the right, but not the obligation, to enter the Leased
Premises for the purpose of examining or inspecting the same, showing the same to prospective

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purchasers, mortgagees, or tenants of the Leased Premises or the Building, and making such repairs,
alteration, improvement or additions to the Leased Premises as are required of Landlord hereunder.
If representatives of Tenant shall not be present to open and permit entry into the Leased Premises
at any time when such entry by Landlord is necessary or permitted hereunder, then Landlord may
enter by means of a master key (or forcibly in the event of an emergency) without liability to
Tenant and without such entry constituting an eviction of Tenant or termination of this Lease.

15.2 Changes. The Landlord reserves the right to change the name of the Building without
notice or liability to Tenant.

16. SURRENDER

At the expiration or sooner termination of this Lease, Tenant shall surrender the Leased Premises
to Landlord, together with all Tenant Improvements, in broom clean condition and in good order and
repair except for ordinary wear and tear and damage by fire or other hazard for which Tenant is
obligated to make repairs under this Lease. Tenant shall not be required to restore the Building
to its original warehouse design and shall not be liable for any costs that may be incurred by
Landlord in doing so. Tenant shall remove from the Leased Premises all of Tenant’s personal
property brought onto or into the Leased Premise pursuant to Section 7.2 hereof. Landlord shall
have no claim to such personal property as a result of the expiration or sooner termination of this
Lease except as provided herein. Any such removal as described in the previous sentence shall not
damage the Leased Premises, and to the extent it does so damage the Leased Premises, such damage
shall be repaired by Tenant in a good and workmanlike manner. Any personal property or equipment
not so removed by Tenant shall be deemed abandoned and, if Landlord elects, shall become the sole
property of Landlord. If Landlord elects to remove and dispose of the same, Tenant will reimburse
Landlord for the cost of such removal and disposal. Landlord may, in its sole discretion, conduct
an inspection of the Leased Premises thirty (30) days prior to the Termination Date (the “Initial
Walk-Through”) and an inspection on the Termination Date (“the Final Walk-Through”) in order to
determine whether the Leased Premises is in the condition required pursuant to the first sentence
of this Section 16 and after the Initial Walk-Through and the Final Walk-Through, Landlord shall
note and deliver any punch list items (the “Punch List Items”) which Tenant must repair for the
Leased Premises to be in the required condition. In the event that the Leased Premises is not in
the condition specified in the first sentence of this Section 16 at the time that Landlord conducts
the Final Walk-Through, Tenant shall have a seven (7) day period immediately following the date of
such Final Walk-Through to repair the Punch List Items and surrender the Leased Premises in the
condition required hereunder. If Tenant has not repaired the Punch List Items and surrendered the
Leased Premises in the condition required hereunder prior to the expiration of such seven (7) day
period, the Landlord shall make such repairs and send Tenant an invoice for the actual cost of the
same. Tenant’s only obligation to Landlord during such seven (7) day period shall be to repair the
Punch List Items. All other obligations of Tenant shall terminate as of the Termination Date.

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17. DAMAGE TO OR DESTRUCTION OF LEASED PREMISES

17.1 Landlord’s Duty to Repair and Restore. Subject to Section 17.3 below, if all or a
part of the Leased Premises is rendered untenantable or inaccessible by damage to all or part of
the Building from fire, the elements, accident, or other casualty (collectively, “Casualty”)
Landlord shall, at its expense, use best efforts to repair and restore the Leased Premises and/or
the Building, as the case may be, to its former condition to the extent permitted by then
applicable laws; provided, however, that in no event shall Landlord have any obligation:

17.1.1 To make repairs or restoration beyond the extent of insurance proceeds received by Landlord
and Tenant for such repairs or restoration; or

17.1.2 To repair or restore any of Tenant’s personal property, trade fixtures, or alterations.

17.2 Repairs. If Landlord is required to repair damage to the Leased Premises and/or the
Building:

17.2.1 This Lease shall continue in full force and effect, but Tenant’s Base Rent and Additional
Rent from the date of the Casualty through the date of completion of the repair shall be abated
with regard to any portion of the Leased Premises that Tenant is prevented from using by reason of
such damage or its repair;

17.2.2 In no event shall Landlord be liable to Tenant by reason of any injury to or interference
with Tenant’s business or property arising from a Casualty or by reason of any repairs to any part
of the Building necessitated by the Casualty, and

17.2.3 Tenant shall be obligated to repair, restore or replace trade fixtures and equipment
installed by Tenant which may be damaged or destroyed by the Casualty.

17.3 Right to Terminate. Tenant may elect to terminate this Lease following damage caused
by any Casualty under the following circumstances:

17.3.1 If Landlord and Tenant agree that the Leased Premises or the Building cannot be repaired
and restored under applicable laws within twelve (12) months from the date of the Casualty;

17.3.2 If Landlord and Tenant agree that adequate proceeds are not, for any reason, made available
to Landlord from Tenant’s and Landlord’s respective insurance policies to make the required
repairs;

17.3.3 If 60% or more of the Leased Premises is damaged or destroyed (including, without
limitation, by smoke or water damage);

17.3.4 If 60% or more of the Building is damaged or destroyed (including, without limitation, by
smoke or water damage), regardless of whether the Leased Premises are damaged or destroyed; or

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17.3.5 If the Casualty occurs during the last twelve (12) months of the Term.

17.4 Notice of Termination. If any of the circumstances described in Section 17.3 above
occur or arise, Tenant shall notify Landlord in writing of that fact within one hundred twenty
(120) days after the date of the Casualty and in such notice Tenant shall also advise Landlord
whether Tenant has elected to terminate this Lease. With respect to Sections 17.3.1 and 17.3.2, if
Landlord and Tenant cannot agree as to the restoration period or adequacy of insurance proceeds
within thirty (30) days after the occurrence of the Casualty, the parties shall submit their
dispute to a third-party mediator to be agreed upon by the parties within forty-five (45) days
after the occurrence of the Casualty. Such third-party mediator shall make a determination with
respect thereto which shall be final and binding on the parties. The parties shall share equally
the cost of the mediator.

18. DEFAULT; REMEDIES OF LANDLORD

18.1 Tenant’s Defaults. The occurrence of any of the following shall constitute an event
of default (“Event of Default”) under this Lease:

18.1.1 If Tenant shall fail to pay Rent to Landlord or any other financial obligation hereunder to
Landlord or a third party when the same is due and payable under the terms of this Lease and such
failure shall continue for a period of ten (10) days after due, or

18.1.2 The Tenant shall fail to perform any other duty or obligation imposed upon it by this Lease
and such failure shall continue for a period of thirty (30) days after written notice thereof has
been given to Tenant by Landlord, unless such default cannot be reasonably remedied within thirty
(30) days after receipt of Landlord’s notice, in which event Tenant shall have such additional time
as may be reasonably necessary to remedy such default, or

18.1.3 The Tenant shall be adjudged bankrupt, or shall make a general assignment for the benefit
of its creditors, or

18.1.4 A receiver of any property of Tenant in or upon the Leased Premises is appointed in any
action, suit, or proceeding by or against Tenant and such appointment shall not be vacated or
annulled within ninety (90) days, or

18.1.5 The interest of Tenant in the Leased Premises shall be sold under execution or other legal
process, or

18.1.6 Tenant shall fail to assume or reject this Lease within thirty (30) days after an order for
bankruptcy relief has been entered against Tenant, or

18.1.8 Tenant shall vacate or abandon the Leased Premises.

18.2. Landlord Remedies. Upon the occurrence of an Event of Default, Landlord shall have
the right to re-enter and repossess the Leased Premises and/or any part thereof, and thereupon, at
Landlord’s option, this Lease shall terminate without prejudice, however, to the right of Landlord

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to recover from Tenant all rent due and unpaid up to the time of such re-entry. In the event of
re-entry, if Landlord does not elect to terminate this Lease, Landlord shall use best efforts to
relet all or any portion of the Leased Premises for the remainder of the Term, for the highest rent
then obtainable, and Tenant shall be liable to Landlord and Landlord shall have the right to
recover from Tenant the difference between the Rent for the remainder of the Term and the amount
obtained through such reletting. For the purposes of such reletting, Landlord may decorate or make
repairs, changes, alterations or additions in or to the Leased Premises to the extent deemed
desirable by Landlord, and the cost of such decoration, repairs, changes, alterations or additions,
as well as any brokerage and legal fees expended by Landlord, shall be paid from rents collected
from any resultant letting of the Leased Premises, and the balance if any thereof shall be credited
against Rent due hereunder as aforesaid.

18.3 Remedies Cumulative. The rights and remedies given to Landlord in this Lease are
distinct, separate and cumulative remedies and no one of them, whether or not exercised by
Landlord, shall be deemed to be in exclusion of any of the others. Each right and remedy may be
exercised concurrently with other remedies and rights of Landlord at law or in equity and shall
survive any expiration or termination of this Lease. The receipt of Rent after default or after
judgment or after execution shall not deprive Landlord of other actions against Tenant for
possession or for Base Rent or Additional Rent or other changes or expense or for damages.

18.4 Additional Costs. Each party hereby agrees to pay reasonable attorneys’ fees and
disbursements and all other reasonable court costs or expenses which the other party may incur or
pay by reason of, or in connection with any default(s) by the former party (the “defaulting party”)
in the observance or performance of any obligation under this Lease including, but not limited to,
matters involving payment of Base Rent and/or Additional Rent, alterations or other Tenant’s work
and subletting or assignment, provided that the other party secures a final judgment against the
defaulting party for such default(s).

18.5 Landlord’s Defaults. Landlord shall not be deemed to be in default in the performance
of any obligation required to be performed by Landlord hereunder unless and until it has failed to
perform such obligation within thirty (30) days after written notice thereof from Tenant to
Landlord; provided, however, that if the nature of Landlord’s obligation is such that more than
thirty (30) days are required for its performance, then Landlord shall not be deemed to be in
default if it shall commence such performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion. In the event Landlord does not perform within a
reasonable time after such notice, Tenant’s sole remedy is to commence legal proceedings hereunder.
Tenant shall have no right to terminate this Lease or to perform on Landlord’s behalf.

19. EMINENT DOMAIN

19.1 Total or Partial Taking. If the whole of the Leased Premises shall be condemned or
taken either permanently or temporarily for any public or quasipublic use or purpose, under any
statute or by right of eminent domain, or by private purchase in lieu thereof, then in that event,
the term of the Lease shall cease and terminate from the date of title vesting in such proceeding
or purchase and Tenant shall have no claim against Landlord for the value of any unexpired term of
said Lease, and shall release unto Landlord any such claim it may have against the condemnor

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for such value. In the event only a portion only of the Leased Premises shall be so taken,
Landlord or Tenant may elect to terminate this Lease from the date of title vesting in such
proceeding or purchase. If this Lease is not terminated, Landlord shall repair and restore, at its
own expense, the portion not taken and thereafter the Rent shall be reduced proportionately to the
portion of the Leased Premises taken. If Landlord elects to terminate in the event of a partial
taking and thereafter restores the Leased Premises, Tenant shall have a right of first refusal to
re-let the Leased Premises on substantially the same terms as herein provided.

19.2 Award. Tenant shall have the right to claim and recover from the condemning authority
such compensation as may be awarded or recoverable by Tenant in its own right on account of any and
all damages to Tenant’s equipment, personal property, furniture, and removable trade fixtures, and
Tenant’s relocation costs; but Tenant’s rights, as stated hereinabove, shall not include any right
to any value attributed to the unexpired term of this Lease or any other matter which would act to
reduce Landlord’s award.

20. SUBORDINATION OF LEASE/ATTORNMENT

20.1 Subordination. This Lease is and shall remain subordinate and subject to any mortgage
or mortgages which are now or at any time shall be placed upon the freehold interest of Landlord or
any part thereof or to any assignment of the interest of Landlord in this Lease. Tenant agrees to
execute and deliver to Landlord within twenty (20) days following the date of any written request,
without cost, any instrument which may be deemed necessary by Landlord to further effect the
subordination of this Lease to any such mortgage, mortgages or assignments, except that such
instrument shall provide that, so long as Tenant is not in default hereunder, its possession will
not be disturbed (including by relocation) nor will its leasehold interest be divested.

20.2 Attornment. In the event of a foreclosure of any such mortgage, Tenant hereby agrees
that this Lease shall not terminate by reason thereof, and Tenant further agrees to attorn to and
to recognize as Landlord hereunder the mortgagee, or any purchaser at a foreclosure sale or any
purchaser of the Leased Premises in lieu thereof, for the balance of the term of this Lease,
subject to all the terms and provisions hereof provided, however, any such mortgagee or purchaser
which shall become the Landlord hereunder shall not be:

20.2.1 liable for any act or omission of Landlord,

20.2.2 subject to any offsets or defenses which Tenant might have against Landlord,

20.2.3 bound by any rent or additional rent which Tenant may have paid to Landlord for more than
the current month, or

20.2.4 bound by any amendment or modifications of this Lease made without its consent.

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21. ESTOPPEL CERTIFICATE/REPORTING REQUIREMENTS

21.1 Estoppel Certificate. Tenant shall, at any time and from time to time, within twenty
(20) days following the date of any written request from Landlord, execute, acknowledge and deliver
to Landlord an estoppel certificate substantially in the form attached hereto as Exhibit E, or such
other form as may be reasonably requested by any ground lessor, purchaser or lender. Any such
statement may be relied upon by any ground lessor or prospective purchaser or mortgagee of all or
any part of the Leased Premises. Tenant’s failure to deliver such statement within said twenty
(20) day period shall be conclusive upon Tenant that this Lease is in full force and effect and
unmodified, and that there are no uncured defaults in Landlord’s performance hereunder.

22. ENVIRONMENTAL MATTERS

22.1 Definitions. For purposes of this Lease as used herein:

22.1.1 The term “Environmental Laws” shall mean any and all federal, state, or local laws,
statutes, rules, regulations, ordinances, interstate compacts, or judicial or administrative
decrees, orders, decisions, or permits relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or Hazardous Substances into the environment otherwise
relating to the use, storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of such pollutants, contaminants or Hazardous Substances, including, without
limitation, the following statutes, as amended and judicially and administratively interpreted
through the date hereof, and all regulations promulgated thereunder as of such date, including
without limitation all comparable statutes, regulations, and interpretations by the Commonwealth of
Pennsylvania: the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§9601 et seq., as amended (“CERCLA”); the Clean Air Act, 42 USC §7401 et
seq., as amended; the Resource Conservation and Recovery Act, 42 USC §6901 et
seq., as amended (“RCRA”); the Safe Drinking Water Act, 42 USC §300f et
seq., as amended; the Toxic Substance Control Act, 15 USC §2601 et seq., as
amended; the Clean Water Act, 33 U.S.C. § 1251 et seq., as amended; the National
Environmental Policy Act 42 U.S.C. §4321 et seq., as amended; the Hazardous
Substances Cleanup Act, 35 Pa. C.S.A. §6020.101 et seq., as amended (“HSCA”); the
Clean Streams Law, 35 Pa. C.S.A. §691.1 et seq., as amended; the Solid Waste
Management Act, 35 Pa. C.S.A. §6018.101 et seq., as amended; and the Pennsylvania
Storage Tank and Spill Prevention Act, 35 PS §6021.101 et seq., as amended; and

22.1.2 The term “Hazardous Substance” shall mean any and all elements, compounds, chemical
mixtures, contaminants, pollutants, or other substances identified as “Hazardous Substances” under
CERCLA or HSCA and all comparable statutes and regulations, and any used or unused petroleum or
petroleum products.

22.2 Tenant’s Obligations. Tenant shall:

22.2.1 Not cause or permit its agents, employees, invitees, contractors or any subtenant, or
occupant, to (a) cause any Hazardous Substance to be placed, held, located, released, spilled,
transported or disposed of on, under, at or from the Building, Leased Premises or any real estate

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contiguous thereto in contravention of any Environmental Laws, (b) otherwise violate any
Environmental Laws, or (c) engage in any activity that could result in any liability, cost or
expense to any such agent, employee, invitee, contractor, subtenant, or occupant, Tenant, Landlord
or any other owner of the Leased Premises or any portion thereof or the creation of a lien on the
Leased Premises under any Environmental Laws or under any similar applicable law or regulation;

22.2.2 Except with respect to conditions existing as of the Commencement Date, contain at or
remove from the Leased Premises or perform any other remedial action regarding any Hazardous
Substance, at Tenant’s sole cost and expense, if, as and when such containment, removal or other
remedial action is required under any Legal Requirement and, whether or not so required, perform
any containment, removal or remediation of any kind of any Hazardous Substance in compliance with
all Legal Requirements;

22.2.3 Provide Landlord with written notice (and a copy as may be applicable) of any of the
following within ten (10) days thereof; (a) Tenant’s obtaining actual knowledge or notice of any
kind of the presence, or any actual or threatened release, of any Hazardous Substance on, under, at
or from the Leased Premises not authorized or permitted under Environmental Laws; (b) Tenant’s
receipt or submission, or Tenant’s obtaining actual knowledge or notice of any kind, of any report,
citation, notice or other communication from or to any federal, state or local government or
quasigovernmental authority regarding any Hazardous Substance or any violation of Environmental
Laws in any way materially, adversely affecting the Leased Premises; or (c) Tenant’s obtaining
actual knowledge or notice of any kind of the incurrence of any cost or expense by any federal,
state or local governmental or quasigovernmental authority or any private party in connection with
the assessment, monitoring, containment, removal or remediation of any kind of any Hazardous
Substance on, under, at or from the Leased Premises, or of the recording of any lien on the Leased
Premises in connection with any such action or Hazardous Substance on, under or at the Leased
Premises; and

22.2.4 Except with respect to conditions existing as of the date hereof and except for, and to the
extent of, Landlord’s negligence or willful misconduct, defend all actions against the Landlord and
pay, protect, indemnify and save harmless the Landlord from and against any and all liabilities,
losses, damages, costs, expenses (including, without limitation, reasonable attorneys’ fees and
expenses), causes of action, suits, claims, demands or judgments of any nature arising from
Tenant’s failure to comply with this Section 22. The indemnity contained in this Section 22 shall
survive the expiration or earlier termination of this Lease with respect to the obligations and
liabilities of Tenant hereunder, actual or contingent, which have arisen on or prior to such
expiration or earlier termination.

22.2.5 Landlord shall defend, indemnify and save Tenant harmless from and against any injuries,
claims, accidents, damages, liabilities, costs and expenses (include reasonable attorney’s fees)
caused as a result of hazardous substances or materials on the Leased Premises which were not
introduced by Tenant. This provision shall survive the expiration or termination of this Lease.

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23. MISCELLANEOUS

23.1 Force Majeure. In the event that either party shall be delayed or hindered in, or
prevented from, the performance of any work, service or other acts required under this Lease to be
performed by the party and such delay or hindrance is due to strikes, lockouts, labor disputes that
prohibit or impede the performance by Landlord or Tenant, inability to obtain materials, acts of
God, governmental actions, inactions or laws, regulations or restrictions, enemy act, terrorist
act, civil commotion, fire or other casualty, or other causes of a like nature beyond the control
of the party so delayed or hindered, then performance of such work, service or other act shall be
excused for a period of such delay and the period for the performance of such work, service or
other act shall be extended for a period equivalent to the period of such delay. In no event shall
such delay constitute a termination of this Lease. The provisions of this Section shall not
operate to excuse Tenant from the prompt payment of Base Rent and Additional Rent, after the
commencement of the Term. Written notice of any such delays, other than temporary or emergency
interruptions, shall be given to the other party as well as written notice of the cessation of the
same.

23.2 Quiet Enjoyment. If Tenant shall pay the Rent and perform all its other obligations
hereunder, Landlord covenants that Tenant shall, during the term hereof, enjoy quiet and peaceable
possession of the Leased Premises.

23.3 Non-Waiver by Landlord. No obligation, term, covenant, condition, or agreement in
this Lease (collectively, “Obligation”) shall be deemed waived by Landlord unless such waiver is in
writing and signed by Landlord. No waiver of any Obligation by Landlord will imply or constitute
the further waiver of that or any other Obligation. The failure of Landlord to (i) seek redress
for the breach of, or default in, or (ii) insist upon the strict performance of any Obligation or
of any of the rules and regulations set forth herein or hereinafter adopted by Landlord, shall not
be deemed a waiver of any rights or remedies Landlord may have, and shall not be deemed a waiver of
any subsequent breach of, or default in, such Obligation or such rules and regulations.

23.4 No Acceptance of Surrender. No act or thing done by Landlord or Landlord’s agents
during the Term will be deemed an acceptance of a surrender of the Leased Premises, and no
agreement to accept a surrender will be valid unless in writing, signed by Landlord. The delivery
of Tenant’s keys to any employee or agent of Landlord will not constitute a termination of this
Lease unless Landlord has entered into a written agreement to that effect.

23.5 No Waiver of Payment. No payment by Tenant, nor receipt by Landlord, of a lesser
amount than the Rent or other charges stipulated in this Lease will be deemed to be anything other
than a payment on account of the earliest Rent. No endorsement or statement on any check, or any
letter accompanying any check or payment as Rent, will be deemed an accord and satisfaction.
Landlord will accept the check for payment without prejudice to Landlord’s right to recover the
balance of such Rent or to pursue any other remedy available to Landlord.

23.6 Brokers. Landlord and Tenant each represent and warrant to the other that no broker
has been employed in carrying on any negotiations relating to this Lease. Further, in the event
that the Term of this Lease is extended and Tenant engages a broker at or prior to the time of the

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exercise of such extension by Tenant, Tenant shall be solely responsible for any leasing commission
payable to such broker. Each party shall indemnify and hold harmless the other from any claim for
brokerage or other commission arising from or out of its brokerage obligations described above or
from any breach of the foregoing representation and warranty.

23.8 Governing Law. This Lease shall be construed, governed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania, without regard to the principles of the laws of
conflicts thereof. SHOULD ANY DISPUTE ARISE HEREUNDER, THE PARTIES HEREBY AGREE TO WAIVE ANY RIGHT
TO A TRIAL BY JURY AND FURTHER CONSENT TO THE JURISDICTION AND VENUE OF ANY ACTION TO BE IN THE
COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA.

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

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

23.11 Entire Agreement; Amendment. This Lease and all of the Exhibits forming a part
hereof, all incorporated herein by this reference, constitute the complete and entire statement of
the agreement between the Parties with respect to the Leased Premises, and supersedes all prior
communications, understandings, proposals, negotiations, agreements, commitments and
representations, either oral or written, between the parties with respect thereto, including,
without limitation, the Original Lease and all amendment thereto. No modification of the terms
hereof shall be binding unless set forth in a writing signed by both parties hereto.

23.12 Notices. Any notice, request, demand, consent, approval, or other communication
required or permitted under this Lease must be in writing and shall be deemed to have been given
(a) when personally delivered, (b) one business day following prepaid deposit with any nationally
recognized overnight carrier which routinely issues receipts for delivery, (c) two business days
following deposit in any depository regularly maintained by the United States Postal Service,
postage prepaid, certified mail, return receipt requested, or (d) upon sending party’s receipt of
facsimile confirmation of notice sent thereby, provided that such notice sent by facsimile also be
sent by, certified mail as set forth in (c), in any case addressed to the party for whom it is
intended at its address set forth below.

Landlord:

Regional Industrial Development Corporation of Southwestern Pennsylvania

425 Sixth Avenue, Suite 500

Pittsburgh, PA 15219

Attention: President

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Telecopier No. 412-471-1740

Tenant:

Tollgrade Communications, Inc.

493 Nixon Road

Cheswick, PA 15024

Attention: Sara M. Antol, General Counsel and Corporate Secretary

Telecopier No. 412-820-1539

Landlord or Tenant each shall have the right to change its address or telecopier number by giving
to the other party ten (10) days’ prior written notice of such change to the other party in the
manner set forth in this Section 23.12.

23.13 Successors and Assigns. The respective rights and obligations provided in this Lease
shall bind and shall inure to the benefit of the parties hereto, their successors and permitted
assigns; provided, however that no rights shall inure to the benefit of any successor of Tenant,
unless Landlord’s written consent for the transfer to such successor has first been obtained as
herein provided.

23.14 Captions. The captions in this Lease are for convenience of reference only and shall
not be deemed to alter or affect any provision hereof or the interpretation or construction hereof.

23.15 Lease Not an Offer. The submission of this Lease to Tenant shall not be construed
(i) as an offer or (ii) as a reservation of or an option for lease, nor shall the Tenant have any
rights with respect thereto unless and until Landlord shall execute a copy of this Lease and
deliver the same to Tenant.

23.16 Counterparts. This Lease may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.
This Lease shall become effective when one or more counterparts have been signed by Tenant and
delivered to the Landlord and one or more counterparts have been signed by the Landlord and
delivered to Tenant.

[SIGNATURE PAGE FOLLOWS]

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WITNESS the due execution hereof on the day and year first above written.

	 	 	 	 	 	 	 
	Witness:	 	 	 	LANDLORD:
	 
	 	 	 	 	 	 
	 	 	 	 	REGIONAL INDUSTRIAL DEVELOPMENT

CORPORATION OF SOUTHWESTERN

PENNSYLVANIA
	 
	 	 	 	 	 	 
	/s/ Bobbie Snowball

	 	 	 	By:
	 	/s/ William E. Burroughs
	 

	 	 	 	 	 	 
	Print Name: Bobbie Snowball	 	 	 	Print Name: William E. Burroughs
	Title: Leasing Manager	 	 	 	Title: Vice President
	 
	 	 	 	 	 	 
	Witness:	 	 	 	TENANT:
	 
	 	 	 	 	 	 
	 	 	 	 	TOLLGRADE COMMUNICATIONS, INC.
	 
	 	 	 	 	 	 
	/s/ Alex DelVecchio

	 	 	 	By:
	 	/s/ Sara M. Antol
	 

	 	 	 	 	 	 
	Print Name: Alex DelVecchio	 	 	 	Print Name: Sara M. Antol
	Title: Corporate Attorney	 	 	 	Title: General Counsel and Secretary

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EXHIBIT A

LEGAL DESCRIPTION OF LEASED PREMISES

[LEGAL DESCRIPTION OF LEASED PREMISES]

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EXHIBIT B

DRAWING OF LEASED PREMISES

[DRAWING OF LEASED PREMISES]

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EXHIBIT C

CAPITAL ITEMS

Pavement and Catch Basins

Landlord acknowledges that certain paved areas surrounding the Leased Premises are in need of
removal and complete replacement. Landlord previously provided Tenant with a sketch, attached
hereto as Exhibit C-1, which depicts the different areas of parking lot and roadways which serve
the Leased Premises. Landlord has determined that pavement areas “A” and “B” have severely
deteriorated and are in need of removal and replacement. Area A extends from Nixon Road along the
entire west side of the Building and connects to Area B, which includes all paved areas at the
north side of the Building. In addition, the catch basins located on the Leased Premises have
begun to collapse and, therefore, are in need of inspection and repair. Landlord represents that
only superficial repairs (e.g., crack filling and patching) have been made to the aforesaid
pavement areas and catch basins since 2000. As per this Lease, Landlord assumes the entire cost of
the removal and replacement of pavement areas depicted on Exhibit C-1 as well as the catch basins
and acknowledges and agrees that; (1) Tenant shall only be responsible for making superficial
repairs of the nature previously performed by Landlord to both the pavement and catch basins during
the Term; (2) that it will accept the condition of the pavement and catch basins “as-is” at the
expiration or termination of this Lease; and (3) should the replacement of the pavement areas and
catch basins become necessary during the Term, Landlord shall have the option but not the
obligation to cause the same to be completed.

Overhead Roll-up Door

Landlord acknowledges that an 8’ x 10’ overhead roll-up door located at the northeast corner of the
Building has failed and that it is in need of replacement. Under the terms of the Original Lease,
Landlord agreed to contribute fifty percent (50%) of the cost to replace exterior, steel doors
throughout the Building that had deteriorated. Notwithstanding Tenant’s maintenance obligations
set forth in this Lease, Landlord shall contribute fifty percent (50%) of the cost to replace, in
kind, the 8’ x 10’ roll-up door.

Structural Defects

Landlord acknowledges that the Building contains certain unremedied structural defects which are
described in that certain structural engineering report issued to Tenant by L.D. Astorino
Companies dated March 29, 2001 (the “Report”), a copy of which Landlord acknowledges having
received from Tenant. Specifically, the defects that have been identified are as follows:

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Roof Joist Bearing on Masonry Walls

In 1995, Tenant reported to Landlord that masonry block units on the exterior masonry walls cracked
and fell into the interior of the Building. Corrective action was taken by Landlord to remedy the
situation in which roof joist bearing plates spanned across control/expansion joints. However, the
Report recommended that all joist bearing locations be inspected to ensure that cells of all
bearing blocks (3 courses) are grouted solid and that all bearing blocks are free from cracks and
rotation. Landlord acknowledges that such an inspection has not taken place as of the date of
execution of this Lease. At Landlord’s option, Landlord will cause an inspection to occur within
six (6) months of such date. To the extent that such inspection indicates that corrective actions
are necessary, Landlord shall be responsible for such corrective actions.

Wall Cracked at Northwest Corner of High Bay

Landlord acknowledges that significant cracking has occurred in the masonry wall and foundation
pier at the northwest corner of the Building. The Report assumed that the cracks have occurred due
to differential settlement of the foundation. The structural engineer recommended that the cracks
in the masonry wall be filled and that a “telltale” device be installed to determine whether
settlement is still active. Landlord acknowledges that the Tenant previously communicated this
recommendation but Landlord has elected not to follow such recommendation as of the date of this
Lease.

Water/Moisture Migration in Single Wythe Masonry Walls

Landlord acknowledges that concrete masonry walls are not impervious to water and that the masonry
block used in the Building has been found and is known to be porous and that the Report
recommended, at a minimum, to apply a masonry water repellant/stain to the masonry walls of the
Building to prevent moisture from migrating into the block and wicking into the interior face.
Landlord further acknowledges that Tenant has observed moisture on the interior of the block and
that signs of efflorescence/moisture migration exist along the below-grade portions of masonry
walls. Landlord further acknowledges that this condition may cause paint to fail and that it may
facilitate Mold growth and/or Mold Conditions. In addition, Landlord acknowledges that all
control/expansion joints along the entire perimeter of the Building need to be re-caulked.

HVAC Capital Items

Landlord acknowledges that there are two (2) remaining HVAC units that have not been replaced in
accordance with the terms of the Original Lease. As such, these units are the property of the
Landlord and they shall be replaced by the Landlord, at its sole cost and expense when they reach
the end of their useful lives. Tenant shall continue to maintain/repair these units but Landlord
shall replace the units if the cost to maintain/repair either unit exceeds Four Thousand Dollars
and No Cents ($4,000.00). The two (2) units serve the second floor of the Building and their
respective unit numbers, model numbers, and serial numbers are as follows:

29

 

	 	 	 	 	 	 	 
	Unit ID #
	 	Manufacturer
	 	Model Number
	 	Serial Number
	Unit #8
	 	American Standard
	 	 ych120ayk0aa
	 	 g17143054d
	Unit#10
	 	American Standard
	 	 ych120ayk0aa
	 	 f17143060d

In accordance with the terms and conditions of this Lease, Landlord acknowledges and agrees that it
is solely responsible for the repair and remediation of the items described on this Exhibit C
together with any and all un-matured and latent defects related thereto and further acknowledges
that Tenant shall have no liability whatsoever with respect thereto.

30

 

EXHIBIT D

RULES AND REGULATIONS

	1.	 	Tenant shall not place anything, or allow anything to be placed on the glass of any
window, door, partition or wall which may, in Landlord’s reasonable judgment, appear
unsightly from the outside of the Building.

	2.	 	The Building directory, if any, shall be used by Landlord to display names and
locations of tenants in the Building. No tenant shall use or make any changes to such
directories without Landlord’s prior written consent, which consent shall not be
unreasonably withheld or delayed.

	3.	 	Tenant shall not allow pallets, crates, and any other debris or material to accumulate
on or around the Leased Premises and / or loading docks so that in the Landlord’s
reasonable judgment, an unsightly appearance is created.

	4.	 	The sidewalks, halls, passages, exits, entrances, elevators and stairways shall not be
obstructed by Tenant or used by Tenant for any purposes other than for ingress to and
egress from the Leased Premises, unless Tenant is the sole occupant of the Building.
Tenant shall lend its full reasonable cooperation to keep such areas free from all
obstruction and in a clean and orderly condition and shall move all supplies, furniture and
equipment as soon as received directly to the Leased Premises and move all such items and
waste being taken from the Leased Premises (other than waste customarily removed by
employees of the Building) directly to the shipping platform at or about the time arranged
for removal from there.

	5.	 	Neither Tenant nor any employee or invitee of Tenant shall go upon the roof of the
Building except to maintain any apparatus Tenant has installed on the roof.

	6.	 	The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any
purposes other than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein, and to the extent caused by Tenant or its
employees or invitees, the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by Tenant.

	7.	 	Tenant shall not use the Leased Premises for housing, lodging or sleeping purposes.
Tenant shall not occupy or use the Leased Premises or permit the Leased Premises to be
occupied or used for any purpose, act or thing which is in violation of any governmental
requirement or which may be dangerous to persons or property.

	8.	 	Tenant shall not install linoleum, tile, carpet or other floor covering so that the
same shall be affixed to the floor of the Leased Premises in any manner without prior
written consent from Landlord, which consent shall not be unreasonably withheld or delayed.

	9.	 	Tenant shall cooperate fully with Landlord to assure the most effective operation of
the Leased Premises’ heating and air conditioning.

	10.	 	Tenant assumes full responsibility for protecting the Leased Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means of entry to the
Leased Premises closed and secured.

31

 

	11.	 	No animals or pets shall be allowed in the Leased Premises, halls, freight docks, or
any other parts of the Building except for certified assistance animals for the disabled.

	12.	 	Tenant shall not make or permit any unreasonable noise, vibration or odor to emanate
from the Leased Premises, or do anything therein tending to create, or maintain, a
nuisance, or do any act tending to injure the reputation of the Building or Landlord.

	13.	 	Tenant acknowledges that Building security problems may occur which may require the
employment of security measures in the day-to-day operation of the Building. Tenant agrees
that it and its employees will cooperate fully with Landlord in the implementation of any
and all reasonable security procedures.

	14.	 	Tenant shall not disturb the quiet enjoyment of any other tenant.

	15.	 	Landlord may retain a pass key to the Leased Premises and be allowed admittance thereto
at all times to enable its representatives to examine the Leased Premises from time to
time; provided, however, that Landlord shall at all times maintain the confidentiality of
all information obtained and observations made during such examinations.

	16.	 	Up to six (6) months prior to lease termination Landlord shall have the right to place
and keep on the windows and doors of the Leased Premises signs advertising the Leased
Premises for rent.

	17.	 	Tenant shall not overload any floors in the Leased Premises or any public corridors or
elevators in the Building.

	18.	 	Only business identification signs shall be permitted to be mounted on the main façade
of the building. No billboard or similar advertising signs will be permitted. All signs
will be of a permanent quality and will be mounted in a fashion which will not materially
affect the integrity of the building structure, face brick or metal siding. No flashing,
animated or glaring signs will be permitted. Sign copy will be restricted to company name
and logo.

	19.	 	All exterior signs installed by Tenant must comply with all Laws and must be approved
by Landlord.

	20.	 	Whenever Landlord’s consent, approval, or satisfaction is required under these Rules,
then unless otherwise stated, any such consent, approval or satisfaction must be obtained
in advance and in writing, such consent or approval may be granted or withheld only in
Landlord’s reasonable discretion, and Landlord’s satisfaction shall be determined in its
sole but reasonable judgment.

32

 

EXHIBIT E

TENANT LEASE ESTOPPEL CERTIFICATE

	 	 	 
	Tenant:
	 	 
	 
	 	 
	Landlord:

	 	Regional Industrial Development Corporation of Southwestern Pennsylvania
	 
	 	 
	Lease Date:
	 	 
	 
	 	 
	Building:
	 	 
	 
	 	 
	Leased

Premises:
	 	 

     The undersigned Tenant of the above Lease (including all amendments thereto as noted) hereby
certifies to Landlord that the foregoing and following information is accurate:

     1. That the Term of the Lease commenced on                                         , and the Tenant is in full and
complete possession of the Leased Premises and has commenced full occupancy and use of the Leased
Premises, such possession having been delivered by the Landlord and having been accepted by the
Tenant.

     2. That all obligations and conditions under said Lease to be performed to date by Landlord or
Tenant have been satisfied, free of defenses and set-offs, including all construction work in the
Leased Premises and any payments required in connection therewith, except as follows:
                                                             
                                
                      
                                                                  
                                
                      
                                                                  
                                
                      
                                                                  
                                
                      
     .

     3. That the current month’s rental amount is $                                         for Base Rent and $                                         for
Additional Rent.

     4. That no security deposit, advance rental or other payment has been made in connection with
the Lease, except rental for the current month, and all rental has been paid to and including                                         .

     5. That the Lease is a valid lease and in full force and effect and represents the entire
agreement between the parties; that there is no existing default on the part of the Landlord or the
Tenant in any of the terms and conditions thereof and no event has occurred which, with the passing
of time or giving of notice or both, would constitute an event of default; and that said lease has:
(initial one)

          (   ) not been amended, modified, supplemented, extended, renewed or assigned.

33

 

        
  (    ) been amended, modified, supplemented, extended, renewed or assigned as follows:  
                                                            
                                
                      
                                                                  
                                
                      
                                                                  
                                
                      
     .

     6. That the Lease provides for lease renewal options (Yes ___No ___) under terms as
follows:                                                              
                                
                      
                                                                  
                                
                      
                                                                  
                                
                      
     .

     7. That the Term of the current lease period terminates                                         .

     8. That there are no actions, voluntary or involuntary, pending against the Tenant under the
bankruptcy laws of the United States or any state thereof.

     9. That this certification is made knowing that the Landlord, its lenders, successors and/or
assigns is relying upon the representations herein made.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	TENANT
	 
	 	 	 	 	 	 	 	 
	Attest/Witness:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	Print Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 

34

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