Document:

Exhibit 10.1

 

AGREEMENT
OF LEASE

 

 

BETWEEN

 

 

ISLAND
VIEW TCI, L.P.

 

 

AS
LANDLORD

 

 

AND

 

 

LENOX,
INCORPORATED

 

 

AS
TENANT

 

 

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE made this 30th day of December, 2005 by and between ISLAND VIEW
TCI, L.P., a Pennsylvania limited partnership (hereinafter called “Landlord”), and LENOX, INCORPORATED,
a New Jersey corporation (hereinafter called “Tenant”).

 

1.             FUNDAMENTAL LEASE
PROVISIONS.

 

(a)           “Building”: shall mean the building located in Bristol,
Pennsylvania commonly known as “Island View Crossing”.

 

(b)           “Building RSF”: shall mean the rentable square footage of
floor area of the Building, which is deemed to be 183,000 rentable square feet.

 

(c)           “Property”: shall mean the Building and the parcel(s) of
land on which the Building is located, together with all improvements thereon
which Property, Building and other improvements upon the Property are shown on
the site plan attached hereto as Exhibit “A-1”.
A legal description of the Property is attached hereto as Exhibit “A-2”.

 

(d)           “Demised Premises”: shall mean the portion of the Building
identified on the plan attached hereto as Exhibit “A-3”.

 

(e)           “Tenant’s RSF”: shall mean the rentable square footage of
floor area of the Demised Premises, which is mutually agreed by Landlord and
Tenant to be the stipulated amount of 126,000 rentable square feet (which
includes an add-on factor of 6.0%).

(f)            “Annual Base Rent”:

 

	
  Lease Year*

  	
   

  	
  Annual Base Rent

  	
   

  	
  Monthly Installment

  	
   

  	
  Base Rent/R.S.F.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 to 3

  	
   

  	
  $

  	
  2,186,100.00

  	
   

  	
  $

  	
  182,175.00

  	
   

  	
  $

  	
  17.35

  	
   

  
	
  4 to 6

  	
   

  	
  $

  	
  2,312,100.00

  	
   

  	
  $

  	
  192,675.00

  	
   

  	
  $

  	
  18.35

  	
   

  
	
  7 to 9

  	
   

  	
  $

  	
  2,438,100.00

  	
   

  	
  $

  	
  203,175.00

  	
   

  	
  $

  	
  19.35

  	
   

  
	
  10 to 12

  	
   

  	
  $

  	
  2,564,100.00

  	
   

  	
  $

  	
  213,675.00

  	
   

  	
  $

  	
  20.35

  	
   

  
	
  First Renewal Term

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13 to 15

  	
   

  	
  $

  	
  2,690,100.00

  	
   

  	
  $

  	
  224,175.00

  	
   

  	
  $

  	
  21.35

  	
   

  
	
  16 to 17

  	
   

  	
  $

  	
  2,816,100,00

  	
   

  	
  $

  	
  234,675.00

  	
   

  	
  $

  	
  22.35

  	
   

  
	
  Second Renewal Term

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  $

  	
  2,816,100.00

  	
   

  	
  $

  	
  234,675.00

  	
   

  	
  $

  	
  22.35

  	
   

  
	
  19 to 22

  	
   

  	
  $

  	
  3,068,100.00

  	
   

  	
  $

  	
  255,675.00

  	
   

  	
  $

  	
  24.35

  	
   

  

 

*              As used herein, the first (1st) “Lease Year” shall commence on the Commencement Date and
shall end on the date which is (i) the day immediately preceding the first
(1st) anniversary of the Commencement Date, if the Commencement Date is the
first day of a calendar month, or (ii) the last day of the calendar month
in

 

1

 

which
the first (1st) anniversary of the Commencement Date occurs, if the
Commencement Date is any day other than the first day of a calendar month. Each
succeeding “Lease Year” shall be each next
following twelve (12) calendar month period.

 

**           Notwithstanding the foregoing, Tenant shall
not be obligated to pay any Annual Base Rent that is applicable to the period
commencing on the Commencement Date and ending on the date that is the one
hundred eightieth (180th) day thereafter (the
“Free Rent Period”); provided, however, that Tenant shall at all
times during the Free Rent Period remain liable for all utilities.

 

(g)           “Tenant’s Fraction”: 68.85%, which is the Tenant’s RSF divided
by the Building RSF, as the same may be adjusted from time to time in the event
of a change in the Tenant’s RSF as provided in this Lease.

 

(h)           “Base Year”: The calendar year 2006.

 

(i)            “Initial Term” or “Term”: Twelve (12) years commencing on the
Commencement Date and ending on the date (the “Expiration
Date”) which is (i) the day immediately preceding the twelfth
(12th) anniversary of the Commencement Date, if the Commencement Date is the
first day of a calendar month, or (ii) the last day of the calendar month
in which the twelfth (12th) anniversary of the Commencement Date occurs, if the
Commencement Date is any day other than the first day of a calendar month. In
the event that Tenant validly exercises any Renewal Option(s) (as hereinafter
defined) pursuant to Section 34 of the Lease, then all references herein
to the “Term” shall be deemed to include the applicable Renewal Term(s) (as
hereinafter defined) and the “Expiration Date” shall mean the last day of the
applicable Renewal Term.

 

(j)            “Commencement Date”: the earlier of (i) the date Tenant
commences occupancy of all or substantially all of the Demised Premises for its
intended regular business purposes, and (ii) the Delivery Date (as
hereinafter defined). Notwithstanding the foregoing, Landlord shall provide
access to the Premises thirty (30) days prior to the Delivery Date so that
Tenant may install its furniture, fixtures, equipment and computer equipment;
provided, however, that such access shall be subject to the reasonable
conditions set by Landlord and any delay caused by such access shall be deemed
a Tenant Delay (hereinafter defined) hereunder. Upon the request of either
party, following the determination of the Commencement Date, Landlord and
Tenant shall enter into a Commencement Date Agreement in the form annexed hereto
as Exhibit “I”.

 

(k)           “Delivery Date”: shall mean the date on which all of the
following conditions have first been satisfied: (i) the work to be
performed by Landlord constituting the Tenant Improvements has been “Substantially
Completed” pursuant to the terms of Section 3 below, and (ii) all
common areas on Tenant’s floors and in the Building are complete and available
for use by the public, including installation of all finishes.

 

2

 

(l)            Intentionally deleted.

 

(m)          “Estimated Delivery Date”: May 1, 2006.

 

(n)           Intentionally Deleted.

 

(o)           Intentionally Deleted.

 

(p)           Intentionally Deleted.

 

(q)           “Notice Addresses”:

 

	
   

  	
   

  	
  Landlord:

  	
   

  	
  Island View TCI, L.P.

  
	
   

  	
   

  	
   

  	
   

  	
  c/o Preferred Real Estate
  Investments, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  1001 E. Hector Street,
  Suite 100

  
	
   

  	
   

  	
   

  	
   

  	
  Conshohocken, PA 19428

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Legal Dept.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tenant:

  	
   

  	
  Prior to the Commencement
  Date:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Lenox, Incorporated

  
	
   

  	
   

  	
   

  	
   

  	
  100 Lenox Drive

  
	
   

  	
   

  	
   

  	
   

  	
  Lawrenceville, NJ 08648

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Lenox Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Lenox Group Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  1 Village Place

  
	
   

  	
   

  	
   

  	
   

  	
  6436 City West Parkway

  
	
   

  	
   

  	
   

  	
   

  	
  Eden Prairie, MN 55344

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  After the Commencement
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Lenox, Incorporated

  
	
   

  	
   

  	
   

  	
   

  	
  Island View Crossing

  
	
   

  	
   

  	
   

  	
   

  	
  1414 Radcliffe Street

  
	
   

  	
   

  	
   

  	
   

  	
  Bristol, PA 19007

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Lenox Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Lenox Group Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  1 Village Place

  
	
   

  	
   

  	
   

  	
   

  	
  6436 City West Parkway

  
	
   

  	
   

  	
   

  	
   

  	
  Eden Prairie, MN 55344

  
	
   

  	
   

  	
   

  	
   

  	
  Attn: Chief Executive
  Officer

  

 

3

 

(r)           “Rent Payment Address” / “Property
Manager”:

 

Island
View TCI, L.P.

c/o
Preferred Plus

1001
E. Hector Street, Suite 100

Conshohocken,
PA 19428

 

(s)           “Security Deposit”: None.

 

(t)            “Permitted Use”: (i) General office use and related
uses required by Tenant in the operation of its business (including, without
limitation, storage and showroom purposes and product design and development
activities), (ii) retail sale of Tenant’s and Tenant’s affiliates’
products, (iii) design, development and production of prototype products,
including but not limited to the operation of kilns, paint spray booths, and
mold making equipment together with equipment ancillary thereto, as an
accessory use and/or (iv) any other lawful purpose approved in advance by
Landlord (such approval not to be unreasonably withheld, conditioned or
delayed). Tenant acknowledges that Landlord shall have the right to withhold
its approval if, in Landlord’s reasonable determination, such proposed use is
not consistent with the uses intended to be carried out at the Building.
Landlord represents that the Demised Premises are presently zoned to lawfully
permit their use and occupancy for the Permitted Use described in clauses “i”
and “iii” of the preceding sentence and that there is currently in existence a
valid, permanent Certificate of Occupancy for the Building permitting such use
and occupancy.

 

(u)           “Broker”: 

 

“Landlord’s
Broker” -       Preferred Real Estate Advisors, Inc. 

 

“Tenant’s
Broker” -          Fennelly Associates, Inc.

 

2.             DEMISED PREMISES / COMMON AREAS. Landlord, for the Term, and subject to the
provisions and conditions hereof, leases to Tenant and Tenant accepts from
Landlord, the Demised Premises together with any and all easements,
appurtenances, rights and privileges now or hereafter belonging thereto. Tenant
shall further have, for the Term, the non-exclusive right, in common with the
other tenants and occupants of the Building and with others who have been
granted such rights by Landlord in accordance with the express provisions of
this Lease (subject to the understanding that Tenant hereby approves the grant
by Landlord, pursuant to a reciprocal easement agreement to be entered into
after the date of this Lease, to the owner of the property adjacent to the
Parking Area (as defined herein) to use one hundred (100) parking spaces in the
Parking Area in that portion of the Parking Area identified as “REA Parking
Spaces” on Exhibit “F”
which is annexed hereto), to use the “Common Areas” of the Building and
Property. Landlord acknowledges that it shall be required to obtain Tenant’s
prior written consent (which shall not be unreasonably withheld, conditioned or
delayed) if it desires to grant the right to use more than the aforementioned
one hundred (100) parking spaces to the neighboring owner in

 

4

 

connection with such owner’s development of the adjacent property. As
used herein, “Common Areas” shall mean any areas or facilities made available
from time to time for the general use of all tenants in the Building, including
any non-reserved parking areas, driveways, sidewalks, hallways, restrooms, and
other similar public areas and common access ways of the Building.
Notwithstanding the foregoing, in granting rights to third-parties to use the
Common Areas as provided for herein, Landlord shall use commercially reasonable
efforts not to materially interfere with Tenant’s use and enjoyment of the
Demised Premises or with Tenant’s rights to use the Parking Area in accordance
with Section 37 herein. Landlord shall maintain the Common Areas and the
Property in a first class manner. Notwithstanding the foregoing, it is further
understood and agreed that Tenant shall have the exclusive use of its main
entrance and lobby area on the ground floor of the Building (as such area is
identified on Exhibit “A-3”) and
that, inter alia, Landlord shall have no rights to grant any use of such main
entrance and lobby area to any third parties; provided, however, that,
notwithstanding the foregoing provisions of this sentence, it is agreed that
such main entrance and lobby area may be used by other tenants of first floor
of the Building as an emergency secondary means of pedestrian egress from such
tenants’ premises and may further be used to provide a primary means of
pedestrian access and egress to the premises of any first floor tenant which
shall otherwise not be able to obtain reasonable pedestrian access and egress
to its premises to or from the exterior of the Building.

 

3.             TENANT IMPROVEMENTS.

 

(a)           Landlord shall construct, or cause to be
constructed, on a “turnkey” basis, at Landlord’s sole cost and expense (but
subject, however, to Tenant’s obligation to pay for those certain “Tenant Extra Cost Items” as are specified in the “Tenant’s Plans” (as such term is hereinafter defined), in a
good and workmanlike manner, certain improvements to the Demised Premises as
provided for in a Tenant Work Letter, to be prepared by IEI Group, Ltd., and
the MPE/FP Schematic Design, to be prepared by Dimitri J. Ververelli, Inc.
(hereinafter collectively referred to as the “Tenant’s
Plans”), which shall be finalized and approved in writing by
Landlord and Tenant on or before January 6, 2006 and incorporated by
reference herein and made a part hereof as Exhibit “B”.
The work described in the Tenant’s Plans is hereinafter referred to as the “Tenant Improvements”. In the event Tenant’s Plans are not
finalized and approved in writing by Landlord and Tenant by the end of the
business day on January 6, 2006, either party shall have the right to
terminate this Lease on or before the end of business day on January 11,
2006 by giving written notice of such termination to the other party.
Notwithstanding anything to the contrary contained herein, the parties hereto
acknowledge that Landlord’s termination notice pursuant to this Section 3(a) may
be sent via facsimile (and in the event Landlord sends such termination notice,
such facsimile shall be sent to both Jim Berwick (609-896-3418) and Lou Fantin
(609-844-1595)). In the event of such termination by Landlord or Tenant, this
Lease shall become null and void and thereafter neither party shall have any
further rights, obligations or liabilities hereunder. If said Lease is not
terminated as set forth above, Tenant’s Plans are deemed approved and Landlord
shall construct Tenant Improvements in accordance with such Tenant’s Plans.
Except for the Tenant Improvements, Landlord shall have no obligation to
perform any improvements to the Demised Premises to

 

5

 

prepare the same for Tenant’s occupancy,

 

(b)           All
work described in the Tenant’s Plans shall be furnished, installed and
performed by Landlord, utilizing a general contractor selected by Landlord, for
the Total TI Costs (as hereinafter defined), which Total TI Costs shall be paid
by Landlord (subject to the Tenant’s obligation to pay for the Tenant Extra
Cost Items) as provided herein. The “Total TI Costs”
shall include all costs and expenses incurred by Landlord in connection with
the completion of the Tenant Improvements, including, without limitation: (i) Landlord’s
out-of-pocket contract or purchase price(s) for materials, components, labor
and services, plus (ii) Landlord’s architects’ and engineers’ fees and
costs, plus (iii) fees for all required permits and governmental approvals
plus (iv) an amount equal to ten percent (10%) of the foregoing items as
Landlord’s construction management fee. The aggregate dollar amount which has
been budgeted for the Total TI Costs (inclusive of the Tenant Extra Cost Items)
shall be set forth in Tenant’s Plans as the “Budgeted
Total TI Costs”; and shall be approved in writing by Landlord and
Tenant on or before January 6, 2006 and shall be incorporated by reference
herein and made a part hereof; and the aggregate dollar amount included in
Budgeted Total TI Costs which has been budgeted for the Tenant Extra Cost Items
shall be set forth in Tenant’s Plans as the “Budgeted
Tenant Extra Cost Item Costs.” In addition, Tenant shall have the
right, at its sole cost and expense, to construct and/or install the items to
be set forth in an “Exhibit “B-1””,
which shall be approved by Landlord and Tenant on or before January 6,
2006 and incorporated by reference herein and made a part hereof (hereinafter “Tenant Items”). In the event Tenant Items, the Budgeted
Total TI Costs, and/or Budgeted Tenant Extra Cost Item Costs are not finalized
and approved in writing by Landlord and Tenant by the end of the business day
on January 6, 2006, either party shall have the right to terminate this
Lease on or before the end of business day on January 11, 2006 by giving
written notice of such termination to the other party. Notwithstanding anything
to the contrary contained herein, the parties hereto acknowledge that Landlord’s
termination notice pursuant to this Section 3(b) may be sent via
facsimile (and in the event Landlord sends such termination notice, such
facsimile shall be sent to both Jim Berwick (609-896-3418) and Lou Fantin (609-844-1595)).
In the event of such termination by Landlord or Tenant, this Lease shall become
null and void and thereafter neither party shall have any further rights,
obligations or liabilities hereunder. If said Lease is not terminated as set
forth above, Tenant Items, the Budgeted Total TI Costs proposed in Tenant’s
Plans, and the Budgeted Tenant Extra Cost Item Costs proposed in Tenant’s Plans
are deemed approved.

 

(c)           In constructing the
Tenant Improvements, Landlord reserves the right to: (i) make
substitutions of material of equivalent grade and quality when and if any
specified material shall not be readily and reasonably available, and (ii) make
changes necessitated by conditions met during the course of construction;
provided, however, that Tenant’s approval of any substantial change shall first
be obtained, which approval shall not be unreasonably withheld or delayed.
Tenant shall not be permitted to request any changes to the Tenant’s Plans (a “Tenant Change Order”) without the prior written approval of
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed by Landlord so long as the Tenant Change Order does not materially
delay Substantial Completion (as hereinafter defined). Any increase in cost

 

6

 

attributable to or resulting from such Tenant Change Order (including,
without limitation, additional architect’s fees and additional costs of
constructing the Tenant Improvements, as well as Landlord’s additional
administrative costs and engineering review fees) shall be added to the Total
TI Costs (subject, however, to the understanding that in determining any such
increase the same shall be determined on a net basis taking into account any
cost savings realized by the elimination of any originally-included items of Tenant
Improvements which may be reflected in connection with such Tenant Change
Order). As a condition to Landlord’s approval of any Tenant Change Order which
shall be anticipated to cause the cost of the Tenant Improvements to exceed the
Budgeted Total TI Costs amount described in subsection (b) above,
Landlord may require that, prior to Landlord’s commencement of any work related
to such Tenant Change Order, Tenant shall agree in writing to pay to Landlord
one hundred percent (100%) of the amount over such Budgeted Total TI Costs
amount described in subsection (b) above as estimated by Landlord
with respect to such Tenant Change Order, which amount shall be paid in
accordance with subsection (f) herein.

 

(d)           Upon Substantial Completion of the Tenant
Improvements, Landlord shall notify Tenant, and Tenant shall inspect the
Demised Premises with Landlord within five (5) business days after Tenant’s
receipt of Landlord’s notice. Upon completion of the inspection, it shall be
presumed that all work theretofore performed by or on behalf of Landlord was
satisfactorily performed in accordance with, and meeting the requirements of
this Lease, excepting, however: (i) required work not actually completed
by Landlord or which is otherwise deficient, and which is identified at the
time of the inspection on a “punchlist” prepared by the construction
representatives of Landlord and Tenant, or (ii) latent defects in such
work which could not reasonably have been discovered at the time of the
inspection provided that Tenant notifies Landlord in writing of such defects
within one (1) year after the Commencement Date. Landlord shall complete
the items of incomplete or deficient work set forth on such “punchlist” as
hereinbefore described within forty-five (45) days, except for Long Lead Items
as set forth herein.

 

(e)           Landlord’s work in constructing the Tenant
Improvements shall be deemed to be “Substantially Completed”
when: (i) the work to be performed by Landlord shown on the Tenant’s Plans
has been completed except for minor or insubstantial details of construction,
mechanical adjustments, or finishing touches like plastering or painting, which
items shall not materially and adversely affect Tenant’s conduct of its
ordinary business activities in the Demised Premises, and (ii) Tenant may
lawfully occupy the Demised Premises for its ordinary business activities
(except to the extent that such lawful occupancy is conditioned on remaining
installations, work or improvements to be performed by Tenant). Notwithstanding
the foregoing, in the event that Substantial Completion of the Tenant
Improvements is delayed by reason of the acts or omissions of Tenant in respect
of the reasons set forth in subparagraphs (i) through (iv) below (a “Tenant Delay”), then Tenant’s obligation to pay Rent
hereunder shall not be affected or deferred on account of such delay and, for
purposes of establishing the date of Substantial Completion hereunder, the date
of Substantial Completion shall be deemed to occur on the date upon which the
same would otherwise have occurred absent the Tenant Delay (taking into account
any delays in Substantial

 

7

 

Completion that are not attributable to Tenant Delay) - it being
understood and agreed, however, that, notwithstanding anything to the contrary
contained herein, no Tenant Delay shall be deemed to have occurred hereunder
unless and until Landlord shall have given written notice to Tenant of any such
delay caused by the acts or omissions of Tenant and Tenant shall have failed to
remedy the same within three (3) business days after its receipt of such
notice:

 

(i)            Tenant’s failure to promptly make changes in
the Tenant’s Plans required by any applicable governmental authority in
connection with the approval thereof, or as required during construction due to
as-built conditions; or

 

(ii)           Tenant Change Order(s); or

 

(iii)         delays, not caused by Landlord, in furnishing
special items which are not readily available (“Long Lead
Items”) or procuring specialized labor required for installation of
Long Lead Items, provided that Tenant shall be notified of Landlord’s good
faith estimate of the anticipated delay promptly after discovery thereof by
Landlord, and shall be given an opportunity to specify alternative materials or
requirements which are readily available; or

 

(iv)          the performance of any work or activity in
the Demised Premises or Building by Tenant or any of its employees, agents or
contractors (including, without limitation, the installation of Tenant’s
furniture, cabling or equipment). Without limiting the foregoing, Tenant
specifically acknowledges that the municipality’s issuance of a certificate of
occupancy (or similar certificate) may be conditioned upon Tenant’s
installation of its furniture, cabling or equipment or the completion of any
other work or activity in the Demised Premises by Tenant or any of its
employees, agents or contractors. In such event, if the municipal authority
will not issue a certificate of occupancy (or similar certificate) or schedule an
inspection of the Demised Premises due to Tenant’s failure to install such
furniture, cabling or equipment or failure to complete such other work or
activity, then the same shall constitute a Tenant Delay hereunder.

 

(f)            Following payment of the final invoice,
Landlord shall furnish Tenant with a written statement setting forth the actual
amount paid by Landlord in respect of the Total TI Costs; whereupon the
information pertaining to the determination of such amount shall be subject to
examination by Tenant, and Tenant shall have reasonable access to Landlord’s
cost records relative thereto. In the event that such actual amount of the
Total TI Costs is less than the Budgeted Total TI Costs amount described in subsection (b) above,
Landlord shall be entitled to the benefit of the savings and Tenant shall not
be entitled to any refund or credit against the Rent payable hereunder. In the
event that, due to any Tenant Change Order(s) in respect of which Tenant shall
have agreed in writing to pay to Landlord the associated increase in the cost
of the Tenant Improvements in accordance with the provisions of subparagraph (c) above,
such actual amount of the Total TI Costs is greater than the Budgeted Total TI
Costs amount described in subsection (b) above, Tenant shall remit to
Landlord, within thirty (30) days after Landlord shall have furnished the
statement of the actual amount

 

8

 

paid by Landlord in respect of the Total TI Costs as hereinbefore
provided, payment in the amount of such excess in the actual amount of such
Total TI Costs so thereby caused. Tenant shall also remit to Landlord, within
thirty (30) days after Landlord shall have furnished the statement of the
actual amount paid by Landlord in respect of the Total TI Costs as hereinbefore
provided, payment in an amount equal to the lesser of (i) the Budgeted
Tenant Extra Cost Item Costs or (ii) the actual amount paid by Landlord in
respect of the Tenant Extra Cost Items.

 

4.             DELAY IN POSSESSION. Landlord currently anticipates that the
Delivery Date will occur on or before the Estimated Delivery Date.
Notwithstanding the foregoing, in the event that the Delivery Date does not
occur by the date which is thirty (30) days after the Estimated Delivery Date
(other than on account of a Tenant Delay), then Tenant shall be entitled, as
its sole and exclusive remedy, to a rent credit equal to two (2) days
Annual Base Rent for each day that the Delivery Date is delayed beyond such
thirtieth (30th) day after the Estimated Delivery Date, which rent credit shall
be applied against the payment(s) of Annual Base Rent first coming due after
the expiration of the Free Rent Period. (By way of example, if the Delivery
Date were not to occur until forty (40) days after the Estimated Delivery Date
(other than by reason of a Tenant Delay as hereinbefore provided), then Tenant
would be entitled to an aggregate credit equal of twenty (20) days Annual Base
Rent; and, accordingly, would not be required to pay Annual Base Rent in
respect of the first twenty (20) days following the expiration of the Free Rent
Period.)

 

5.             RENT.

 

(a)           During the Term from and after the expiration
of the Free Rent Period (and taking into account any credits due in respect
thereof pursuant to Section 4 above), Tenant shall pay to Landlord the
Annual Base Rent in the amounts set forth in Section 1(f) (Fundamental
Lease Provisions) above. Such Annual Base Rent shall be payable in equal
monthly installments in advance on the first day of each calendar month.

 

(b)           The term “Rent” as used in this Lease shall
mean the Annual Base Rent, Tenant’s Share of Operating Expenses (as hereinafter
defined), payments for any utilities which are to be made by Tenant to Landlord
in accordance with the express provisions of this Lease and all other
additional rent or other sums payable by Tenant to Landlord under any other
express provision of this Lease. All Rent other than the Annual Base Rent is
referred to herein as “Additional Rent”.

 

(c)           The first installment of Annual Base Rent
shall be payable on the date (the “Rent Commencement Date”)
next following the expiration of the Free Rent Period (subject, however, to the
understanding that such date may be extended in order to take into account any
credits due in respect thereof pursuant to Section 4 above). If the Rent
Commencement Date shall be a day other than the first day of a calendar month,
Annual Base Rent from such day until the first day of the following calendar
month shall be prorated on a per diem basis for each day of such partial month.

 

9

 

(d)           All Rent due to Landlord hereunder shall be
payable to Landlord c/o Landlord’s Property Manager at the Rent Payment Address
specified in Section 1(r) (Fundamental Lease Provisions), or to such other
party or at such other address as Landlord may designate, from time to time, by
written notice to Tenant given not less than fifteen (15) days prior to the
date upon which such change shall become effective, without demand (except to
the extent demand or notice shall be expressly provided for herein) and without
deduction or set-off (except to the extent that any of the same shall be
provided under this Lease).

 

(e)           If Landlord, at any time or times, shall
accept said Rent due to it hereunder after the same shall become due and
payable, such acceptance shall not excuse delay upon subsequent occasions, or
constitute or be construed as, a waiver of any of Landlord’s rights hereunder.

 

6.             INTENTIONALLY DELETED.

 

7.             PAYMENT OF INCREASES IN
OPERATING EXPENSES.

 

(a)           For and with respect to each calendar year of
the Term commencing with the 2007 calendar year (but, subject to the provision
of Section 7(c)(vi) herein), Tenant shall pay to Landlord, as
Additional Rent, an amount (“Tenant’s Share of
Increases in Operating Expenses”) equal to the product obtained by
multiplying Tenant’s Fraction by the amount by which Operating Expenses (as
hereinafter defined) for such calendar year exceed the Operating Expenses for
the Base Year (which Base Year amount shall be grossed up in similar manner to
the example set forth in Exhibit “N”
to cover the full 2006 calendar year and in no event shall be less than $4.00
per rentable square foot for the purpose of calculating Tenant’s required
payment of Tenant’s Share of Increases in Operating Expenses (it being
understood, however, that such limitation imposed hereunder shall be for sole
purpose of calculating Tenant’s required payment of Tenant’s Share of Increases
in Operating Expenses and in no event shall the same be deemed to limit the
amounts which Landlord shall be required to expend in Operating Expenses in
order to fulfill its obligations to manage, repair, maintain and insure the
Building and Property in accordance with the provisions of this Lease))
(appropriately prorated for any partial calendar year at the end of the Term).

 

(b)           As used herein, the following terms shall
have the meanings set forth below:

 

(i)            “Operating Expenses” shall mean, except as expressly limited by
subparagraph (ii) below, the actual, necessary and reasonable out of
pocket expenses incurred by or on behalf of Landlord in respect of the
operation and management of the Property and shall include, without limitation:
(1) labor costs, including wages, salaries and benefits and taxes imposed
upon employers with respect to persons employed by Landlord or Landlord’s
managing agent for rendering service in the operation, cleaning, maintenance,
repair and replacement of the Property, whether paid directly by Landlord or
reimbursed to contractors or other third parties; (2) costs for

 

10

 

the operation, cleaning, maintenance, repair and replacement of the
Property, including payments to contractors; (3) the cost of steam,
electricity, gas, water and sewer and other utilities chargeable to the
operation and maintenance of the Property; (4) cost of premiums and
deductibles for insurance for the Property including fire and extended
coverage, elevator, boiler, sprinkler leakage, water damage, public liability
and property damage, environmental liability, plate glass, and rent protection;
(5) supplies; (6) legal and accounting expenses directly related to
the operations of the Building and Property; (7) Taxes (as hereinafter
defined) and costs of obtaining any reductions thereof; (8) management
fees (which fees shall not increase prior to December 31, 2008, and then
shall not increase by more than 2% per annum from one year to the next) and
expenses, including, without limitation, the fair rental value and costs
associated with maintaining a management office at the Property; and (9) all
other costs and expenses incurred by or on behalf of Landlord in connection
with the repair, replacement, operation, maintenance, securing, insuring and
policing of the Building and Property.

 

(ii)           Notwithstanding anything to the contrary
contained herein, it is understood and agreed that the term “Operating Expenses” shall not include: (1) the cost of
any item which, by standard accounting practice, should be capitalized, except that
in lieu of capital expenses for repairs, replacements or enhancements to the
Building or Property (including without limitation any upgrades for the purpose
of reducing Operating Expenses or for the purpose of complying with applicable
laws, codes and regulations), there shall be included within Operating Expenses
for each calendar year, from and after the expenditure in question, the annual
amortization of such expenditure over the useful life of the item(s) in
question, as reasonably determined by Landlord and including an interest factor
equal to the Prime Rate of interest (the “Prime Rate”)
as published from time to time in The Wall Street Journal plus two
percent (2%); (2) any charge for depreciation, interest on encumbrances or
ground rents paid or incurred by Landlord; (3) commissions; (4) costs
actually reimbursed by insurance proceeds; (5) costs of electricity, gas
and any other utilities provided to tenant spaces (as opposed to Common Areas)
in the Building to the extent Tenant is chargeable for the utility service in
question pursuant to Section 8 below, (6) damage and repairs
necessitated by the willful misconduct of Landlord or Landlord’s employees,
contractors or agents; (7) executive salaries of Landlord (not including
regional property leaders); (8) salaries of service personnel to the
extent that such service personnel perform services not related to the
management, operation, repair or maintenance of the Building or the Property; (9) Landlord’s
general overhead expenses not related to the Building; (10) legal fees,
accountants’ fees and other expenses incurred in connection with disputes with
tenants or other occupants of the Building or associated with the enforcement
of any leases or defense of Landlord’s title to or interest in the Building or
any part thereof; (11) costs, including permit, license and inspection fees,
incurred in renovating or otherwise improving, decorating, painting or altering
space for other tenants or other occupants or vacant space in the Building;
(12) costs incurred due to violations by Landlord or any other tenant of the
Building of the terms and conditions of any lease; (13) the costs of any
service provided to other tenant(s) of the Building to the extent Landlord
separately charges therefor, and the cost of any service provided to other
tenant(s) of the Building but not to Tenant; (14) charitable or political
donations by Landlord; (15) any cost or expense related to the

 

11

 

testing, removal, transportation or storage of Hazardous Substances (as
hereinafter defined) from the Building, other than periodic and routine
testing; (16) interest, penalties or other costs arising out of Landlord’s
failure to make timely payments of its obligations; (17) costs associated with
revenue-generating public parking areas of the Building where fees are charged
for use of parking areas by the public and not by tenants of the Building; (18)
costs incurred in advertising and marketing or leasing promotional activities
for the Building; (19) costs incurred in enforcing leases against tenants,
including legal fees; and (20) costs incurred in connection with making changes
to the Property necessary in order to bring the same into compliance, including
but not limited to ADA compliance, with laws which shall be in effect as of the
Commencement Date (provided, however, repairs to such changes, or to normal
wear and tear, and repair made necessary by a change in the law after the
Commencement Date shall be included in Operating Expenses).

 

(iii)        “Taxes” shall mean all real estate taxes and assessments, general and special,
ordinary or extraordinary, foreseen or unforeseen, imposed upon the Property or
with respect to the ownership thereof. If, due to a future change in the method
of taxation, any franchise, income, profit or other tax, however designated,
shall be levied or imposed in substitution in whole or in part for (or in lieu
of) any tax which would otherwise be included within the term “Taxes” as
defined herein, then the same shall be included in the term “Taxes.” If a
special improvement shall hereafter be made for the sole benefit of Tenant
which results in an increase in the taxable value of the Building (as opposed
to general tenant improvements consistent with normal office use, but subject
to the understanding that none of the improvements comprising the initial
Tenant Improvements under this Lease shall be deemed special improvements for
the purposes of this sentence), then any increase in Taxes attributable to such
special improvement shall be the responsibility of Tenant. Notwithstanding
anything to the contrary set forth herein, “Taxes” shall also include any and
all payments, however designated, levied or imposed in substitution in whole or
in part, or in lieu of, any tax which would otherwise be included within the
term “Taxes” as defined herein. The foregoing payments shall include, but not
be limited to, any payments made by any master lessor or master lessee of the
Property and reimbursed directly or indirectly by Landlord, whether
characterized as base rent, additional rent or otherwise. Notwithstanding
anything to the contrary contained herein, in no event shall Taxes include (i) any
gift, franchise, corporate transfer, succession, transfer, capital levy, gross
receipts, corporation, stamp or payroll tax imposed upon Landlord, (ii) penalties
imposed upon Landlord by reason of Landlord’s delinquent payment of any taxes
or impositions, unless same are assessed by reason of Tenant’s failure to
timely pay Tenant’s Share of Increases in Operating Expenses, (iii) any
tax upon the sale, transfer and/or assignment of the title or estate of
Landlord or (iv) any assessments for improvements to the Building or
assessments for public streets, public sidewalks, sewers, water or other installations
made at governmental expense before or in connection with the initial
construction and development of the Building or any part thereof. Landlord
shall cause the Property and Building to be maintained entirely within the two (2) current
tax parcels or lots (which two (2) parcels or lots comprise only the
Property and not any adjacent property thereto), and Landlord shall pay and
discharge before delinquency all taxes which become due during the Term, except
if Tenant fails

 

12

 

to timely pay same. Taxes applicable to any fiscal tax year shall only
include those amounts actually paid by Landlord to the appropriate governmental
authorities in respect of the Property and Building for such fiscal tax year,
with the benefit of any abatements, credits, rebates, refunds and the like
which may be applicable to Landlord’s payment obligations to the appropriate
taxing authorities to be applied before such “taxes” shall be determined for
the purpose of calculating Tenant’s Share of Increases in Operating Expenses
hereunder. If, by law, any taxes may, at the option of the taxpayer, be paid in
installments (whether or not interest shall accrue on the unpaid balance
thereof), Landlord shall exercise such option to pay the same in installments
and shall pay the installments as the same respectively become due and before
any fine, penalty, interest or cost may be added for non payment thereof. Only
installments becoming due during or applicable to the Term from and after January 1,
2007 shall be included in Taxes for computation of Tenant’s Share of increases
in Operating Expenses, and any installments for a real estate fiscal tax year,
a part of which is included within the Term and a part of which is applicable
to a period of time before the Commencement Date or after the Expiration Date
(or sooner date of expiration or termination), shall be apportioned on the
basis of the number of days in the real estate fiscal tax year which are
included in the Term for the purpose of computing Tenant’s Share of Increases
in Operating Expenses. Landlord shall use its reasonable judgment in
determining whether or not to contest or attempt to obtain a reduction in
Taxes; provided, however, that, notwithstanding anything to the contrary
contained herein, Landlord shall, upon the receipt of written notice from
Tenant, have an obligation to contest, object to or litigate the levying or
imposition of any Taxes and assessments, at no out of pocket cost to Landlord,
and may thereafter settle, compromise, consent to, waive or otherwise
reasonably determine to abandon any contest with respect to the amount of any
Taxes with the prior written consent of Tenant, which shall not be unreasonably
withheld. Notwithstanding the foregoing, Landlord shall not be obligated to
contest or object to the imposition of any Taxes if Landlord has previously
settled the amount of Taxes to be imposed upon the Property, thereby preventing
such appeal. If Landlord shall receive a refund of Taxes for any year after the
Base Year, Tenant shall be entitled to its share of the portion of the refund
applicable to an increase in said Taxes, after deducting from such refund that
portion of the reasonable, actual and necessary out-of-pocket costs and
expenses (including experts’ and attorneys’ fees) incurred by Landlord in
obtaining such refund.

 

(c)           In determining Operating Expenses for any
year, the following adjustments shall be made:

 

(i)            if less than ninety-five percent (95%) of the
Building RSF shall have been occupied by tenants at any time during such year,
Operating Expenses shall be deemed for such year to be an amount equal to the
like expenses which Landlord reasonably determines would normally be incurred
had such occupancy been ninety-five percent (95%) throughout such year
(subject, however, to the understanding that in no event shall such
determination by Landlord result in Tenant’s Share of Increases in Operating
Expenses exceeding the actual cost to Landlord of providing the services which
were included in Operating Expenses for the period in question), and in such
event Landlord shall furnish to Tenant such documentation as Tenant shall

 

13

 

request in order to confirm that such adjustment has been made in such
a manner so as to equitably reflect what such Operating Expenses would have
been had the Building had such 95% occupancy level;

 

(ii)           if any tenant of the Building supplies itself
with a service at any time during such year that Landlord would ordinarily supply
without separately charging therefor, then Operating Expenses shall be deemed
to include the cost that Landlord would have incurred had Landlord supplied
such service to such tenant (subject, however, to the understanding that in no
event shall such determination by Landlord result in Tenant’s Share of
Increases in Operating Expenses exceeding the actual cost to Landlord of
providing the services which were included in Operating Expenses for the period
in question);

 

(iii)         intentionally deleted;

 

(iv)          if any Operating Expenses incurred for the
Building and/or the Property consist of shared costs and expenses with one or
more other buildings or properties, whether pursuant to a reciprocal easement
agreement, cost sharing agreement, common area agreement, or otherwise, the
shared costs and expenses shall be equitably allocated by Landlord between the
Building and/or the Property (as applicable) and such other buildings or
properties;

 

(v)            in the event the actual Operating Expenses
for the Base Year (appropriately adjusted for a full calendar year) are
ultimately determined to be less than $4.00 per rentable square foot, then, at
Tenant’s option, within fifteen (15) days after the date of such determination,
either Landlord shall reimburse Tenant for an amount equal to the difference
between $4.00 per rentable square foot and the actual Operating Expenses for
the Base Year or permit Tenant to off-set such amount from the next
installments(s) of Annual Base Rent coming payable hereunder (provided,
however, that, notwithstanding any such circumstance in which actual Operating
Expenses for the Base Year are ultimately determined to be less than $4.00 per
rentable square foot, the figure of $4.00 per rentable square foot shall
continue to be utilized for the calculation of Tenant’s Share of Increases in
Operating Expenses as provided in Section 7(a) above);

 

(vi)          in no event shall Tenant be responsible for
any payment to Landlord in respect of Operating Expenses or any Tenant’s Share
of Increases in Operating Expenses during the first (1st) Lease Year;

 

(vii)         for the calendar year 2007, the Operating
Expenses shall not exceed five percent (5%) over the Operating Expenses for the
Base Year for the purpose of calculating Tenant’s required payment of Tenant’s
Share of Increases in Operating Expenses (it being understood, however, that
such limitation imposed hereunder shall be for sole purpose of calculating
Tenant’s required payment of Tenant’s Share of Increases in Operating Expenses
and in no event shall the same be deemed to limit the amounts which Landlord
shall be required to expend in Operating Expenses in order to fulfill its
obligations to manage, repair, maintain and insure the

 

14

 

Building and Property in accordance with the provisions of this Lease);
and

 

(viii)        commencing on January 1, 2008 and
continuing for the balance of the Term, for the purpose of calculating Tenant’s
required payment of Tenant’s Share of Increases in Operating Expenses,
Controllable Operating Expenses (hereinafter defined) shall not increase, in
the aggregate and on a cumulative basis, by more than five percent (5%) per
annum over the amount of Controllable Operating Expenses payable by Tenant
hereunder in respect of the immediately preceding calendar year (it being
understood, however, that such limitation imposed hereunder shall be for sole
purpose of calculating Tenant’s required payment of Tenant’s Share of Increases
in Operating Expenses and in no event shall the same be deemed to limit the
amounts which Landlord shall be required to expend in Controllable Operating
Expenses in order to fulfill its obligations to manage, repair, maintain and
insure the Building and Property in accordance with the provisions of this
Lease). (By way of example, (i) if Controllable Operating Expenses for and
in respect of the 2007 calendar year were to have been $2.50 per rentable
square foot, then, for the purpose of calculating Tenant’s required payment of
Tenant’s Share of Increases in Operating Expenses for the 2008 calendar year,
Controllable Operating Expenses could not exceed $2.625 per rentable square
foot; while (ii) if Tenant’s payments (as so limited pursuant to the
provisions of clause “i” hereof, notwithstanding that actual Controllable
Operating Expenses for the 2008 calendar year had been higher) in respect of
Controllable Operating Expenses for and in respect of the 2008 calendar year
were to have been $2.625 per rentable square foot, then, for the purpose of
calculating Tenant’s required payment of Tenant’s Share of Increases in
Operating Expenses for the 2009 calendar year, Controllable Operating Expenses
could not exceed $2.75625 per rentable square foot.) As used herein, “Controllable Operating Expenses” shall mean all Operating
Expenses other than Taxes, insurance, snow removal costs and utility rate
charges. The foregoing cap shall apply solely with respect to Controllable
Operating Expenses and shall not apply with respect to any other Operating
Expenses; and

 

(ix)          in the event as a result of the first (and
only the first) reassessment of Taxes after the Commencement Date pertaining to
the completion of construction of the Tenant Improvements, Taxes shall increase
to an amount over $1.00 per rentable square foot per annum, then the $0.25 per
rentable square foot per annum over $1.00 per rentable square foot per annum
(to the extent Taxes equal such amount) shall be excluded from Operating
Expenses.

 

(d)           Landlord shall furnish to Tenant at the
commencement of the Term, or as soon thereafter as practicable, a statement of
Landlord’s good faith estimate of Operating Expenses for the Base Year (which
statement shall delineate which of the same shall constitute Controllable
Operating Expenses). Not later than March 31, 2007, Landlord shall furnish
to Tenant a statement prepared by Landlord or its accountants and certified as
correct by Landlord of the actual Operating Expenses (including, without
limitation, Controllable Operating Expenses) actually incurred for and in
respect of the Base Year, together with a statement of Landlord’s good faith
estimate of Operating Expenses for the 2007 calendar year and the amount of
Tenant’s Share of Increases in Operating Expenses which shall be payable for
the 2007 calendar year. Commencing

 

15

 

with the 2008 calendar year and continuing for each subsequent calendar
year during the Term, Landlord shall, not later than March 31 of each such
calendar year, furnish to Tenant a statement (an “Expense
Statement”) prepared by Landlord or its accountants and certified as
correct by Landlord of the actual Operating Expenses (including, without
limitation, Controllable Operating Expenses) actually incurred for and in
respect of the immediately preceding calendar year, together with a statement
of Landlord’s good faith estimate of Operating Expenses for the then-current
calendar year and the amount of Tenant’s Share of Increases in Operating
Expenses which shall be payable for such then-current calendar year (the “Estimated Share”). If Landlord from time to time determines
that Landlord’s good faith estimate is incorrect due to the subsequent
occurrence of unusual or unforeseen circumstances, Landlord shall have the
right to provide Tenant with a revised statement of Landlord’s good faith
estimate of Operating Expenses for the then-current year, in which event Tenant’s
Estimated Share shall be adjusted accordingly; provided, however, that,
notwithstanding the foregoing, in the event that Landlord shall seek to revise
such estimate during any calendar year Landlord shall furnish Tenant with a
written statement showing in reasonable detail the nature and amount of such
unusual and unforeseen expenses (e.g., snow expenses) that shall have given
rise to such revision.

 

(e)           Within thirty (30) days after Tenant receives
an Expense Statement, Tenant shall pay to Landlord the difference, if positive,
between the Tenant’s Share of Increases in Operating Expenses for such previous
year and the actual payments made by Tenant on account of Tenant’s Share of
Increases in Operating Expenses during such calendar year; or if the actual
payments exceed Tenant’s Share of Increases in Operating Expenses for such
previous year, Tenant shall receive a credit against the next payment(s) of
Rent falling due (if the Lease shall have expired, Landlord shall refund such
overpayment together with the submission of such Expense Statement to Tenant,
which obligation shall survive the expiration or earlier termination of this
Lease).

 

(f)            When requested by Tenant, Landlord will
furnish to Tenant such additional information as may be reasonably necessary
for the verification of any such Expense Statement theretofore submitted by
Landlord (which information shall include, without limitation, true copies of
Landlord’s bills for all expenses incurred in respect of Operating Expenses
during the calendar year in question). Landlord shall maintain for a period of
not less than three (3) years after the expiration of each calendar year
of the Term complete and accurate books and records in respect of such
Operating Expenses and shall permit the pertinent records to be examined by
Tenant or its independent accountants. Unless Tenant, within one hundred eighty
(180) days after any Expense Statement is furnished, shall give notice to
Landlord that Tenant disputes the amount due in accordance with the foregoing
provisions, specifying in detail the basis for such dispute, each Expense
Statement furnished to Tenant by Landlord under this Section shall be
conclusively binding upon Tenant as to the Operating Expenses and Tenant’s
Share of Increases in Operating Expenses in respect thereof due from Tenant for
the period represented thereby; provided, however, that, notwithstanding the
foregoing, Tenant shall also have the right, upon the giving of prior written
notice to Landlord at any time within one (1) year after receipt of any
such Expense Statement, to examine

 

16

 

and audit such books and records maintained by Landlord in respect of
such Operating Expenses. In the event that Tenant timely disputes such Expense
Statement and the dispute is not amicably resolved within thirty (30) days
after Tenant’s notice of dispute, then either party may refer the dispute to an
independent certified public accounting firm mutually acceptable to Landlord
and Tenant, and the determination of such accounting firm shall be final,
binding and conclusive on Landlord and Tenant. Tenant and Landlord agree to
equally share the cost of such audit. In the event Landlord’s original
determination of the actual Operating Expenses was in error by less than two
percent (2%), Tenant will forfeit their right to audit Landlord’s books and
records for a period of two (2) years, unless there is a material
irregularity in Landlord’s calculation of Operating Expenses. If any dispute in
connection with the amounts due in accordance with this Section is settled
in Tenant’s favor, Landlord shall, within thirty (30) days after the notice of
such determination, pay Tenant the amount of Tenant’s overpayment of Tenant’s
Share of Increases in Operating Expenses. Any payment due from Tenant to
Landlord on account of Tenant’s Share of Increases in Operating Expenses not
yet determined as of the Expiration Date shall be made within thirty (30) days
after submission to Tenant of the next Expense Statement, which obligation
shall survive the expiration or earlier termination of this Lease. In
connection with any dispute or any information from Landlord’s records obtained
by Tenant with respect thereto, Tenant covenants that (x) it will hold the
results of any investigation into Landlord’s records in confidence (provided,
however, that Tenant may discuss the results of such investigation with its
attorneys, accountants and other consultants and use the information obtained
in the investigation to the extent required in any legal or other proceedings
related thereto or as may be required by applicable law); and (y) it will cause
any consultants retained by it to adhere to a similar covenant of
confidentiality for the benefit of Landlord.

 

(g)           Beginning with the next installment of Annual
Base Rent due after delivery of the statement of Tenant’s Estimated Share,
Tenant shall pay to Landlord, on account of Tenant’s Share of Increases in
Operating Expenses, one-twelfth (1/12) of the Estimated Share for the current
calendar year multiplied by the number of full or partial calendar months
elapsed during the current calendar year up to and including the month payment
is made (less any amounts previously paid by Tenant on account of Tenant’s
Share of Increases in Operating Expenses for such period). On the first day of
each succeeding month up to the time Tenant shall receive a new statement of
Tenant’s Estimated Share, Tenant shall pay to Landlord, on account of Tenant’s
Share of Increases in Operating Expenses, one-twelfth (1/12) of the then
current Estimated Share.

 

8.             UTILITIES FURNISHED TO
DEMISED PREMISES.

 

(a)           Tenant shall pay for all utilities
(including, without limitation, gas and electricity and, to the extent
separately billable, HVAC service) that are furnished to or consumed within the
Demised Premises, as such consumption shall be measured by separate meters for
such utilities which shall be installed by Landlord as part of Tenant Improvements.

 

17

 

(b)           Tenant shall pay all utility bills within
twenty (20) days after receipt by Tenant, either from Landlord or the billing
authority. Notwithstanding anything to the contrary contained herein, it is
understood and agreed that with respect to any such utility bills payable by
Tenant to Landlord hereunder, the charges thereon shall be based upon the
actual amounts payable by Landlord to the applicable utility provider in
respect thereof without the imposition of any markup or surcharge by Landlord.
Landlord shall have the right, to be exercised by written notice to Tenant and
to the extent that the same may be lawfully done, to direct Tenant to contract
directly with the utility provider supplying electricity and/or gas to the
Building, in which event Tenant shall pay all charges therefor directly to the
utility provider. Landlord shall at all times have the exclusive right to
select the provider or providers of the utility service to the Demised Premises
and the Property, and Landlord shall have the right of access to the Demised
Premises from time to time to install or remove utility facilities, provided,
however, in the event Tenant occupies at least 95% of the Building, Tenant
shall have the right to select providers of utilities, in its sole discretion,
so long as (i) such selection by Tenant shall not result in increases in
the cost to any other tenant in the Building of obtaining such utilities over
the cost that such other tenant had been paying from its then-existing
provider, (ii) such provider so selected by Tenant shall be capable of
providing such utilities in a manner reasonably consistent with that of the
then-existing provider and (iii) any costs incurred in changing over from
the then-existing provider to the new provider so selected by Tenant shall be
borne by Tenant.

 

9.             SERVICES.

 

(a)           Landlord shall provide or cause to be
provided the following services throughout the Term (the cost of which services
shall be subject to reimbursement by Tenant as provided in Sections 7 and 8
above – it being understood, however, that, except as shall be otherwise
expressly provided hereinafter in this Section, such costs shall be included in
Operating Expenses and such reimbursement shall be only in the nature of Tenant’s
obligation to reimburse Landlord for Tenant’s Share of Increases in Operating
Expenses as provided in said Sections 7 and 8):

 

(i)            Provide water for drinking, lavatory and
toilet purposes on the floor(s) on which the Demised Premises are located;

 

(ii)           Furnish heat, ventilation and
air-conditioning (“HVAC Service”)
to the Demised Premises for ordinary office purposes. No overtime surcharge
shall be imposed since all utilities required for HVAC Service to the Demised
Premises are separately metered and all consumption charges will be separately
paid for by Tenant pursuant to Section 8 above.

 

(iii)         Furnish electricity to the Demised Premises
in order to provide a consumption capacity of not less than an aggregate of
thirteen (13) watts per square foot of floor space of the Demised Premises
(such aggregate minimum thirteen (13) watts per square foot requirements having
been determined on the basis of the sum of: five (5) watts per square foot
for electrical receptacles, plus two (2) watts per square foot for
lighting, plus five (5) watts per square foot for HVAC, plus an additional

 

18

 

one (1) watt per square foot for miscellaneous expansion purposes.
Tenant’s use of electrical service shall not exceed, either in voltage, rated
capacity or overall load, the capacity so provided pursuant to the provisions
of the preceding sentence.

 

(iv)          Provide janitorial services in accordance
with Landlord’s building standard janitorial specifications as set forth on Exhibit “D” attached hereto.
Any and all additional or specialized janitorial service desired by Tenant
(i.e., over and above the services specified in Exhibit “D”
attached hereto) shall be contracted for by Tenant directly with a Vendor
selected by Tenant and the cost and payment thereof shall be the sole
responsibility of Tenant; and

 

(v)            Provide access to the Property, the Building
and the Demised Premises twenty-four hours per day, seven days per week,
subject to reasonable security measures as may be implemented by Landlord.

 

(b)           If Tenant requests permission to consume
excess or supplemental electrical service, HVAC Service or other utility
services (i.e., any of the same which shall be over and above those to be
provided in accordance with the provisions of Section 9(a) above),
Landlord may condition its consent upon conditions that Landlord reasonably
determines based upon the adequacy of such service capacity at the Building,
and in the event such consent is granted, all costs for such additional
service, including, without limitation, required changes, replacements or
additions to the existing facilities servicing the Demised Premises, shall be
paid for by Tenant at Tenant’s sole cost and expense.

 

(c)           Tenant shall directly reimburse Landlord for
any supplemental services requested by Tenant in writing from Landlord and
supplied by Landlord, said reimbursement to be paid within thirty (30) days
after Tenant’s receipt of Landlord’s invoice therefor. Notwithstanding the
foregoing, Landlord shall have no obligation to provide any such supplemental
services to Tenant. In the event Landlord elects not to provide such
supplemental services, Tenant, at its sole cost and expense, shall have the
right to contract for such services on its own.

 

(d)           It is understood that Landlord does not
warrant that any of the services referred to in this Section will be free
from interruption from causes beyond the reasonable control of Landlord. No
interruption of service shall ever be deemed an eviction or disturbance of
Tenant’s use and possession of the Demised Premises or any part thereof or
render Landlord liable to Tenant for damages, permit Tenant to abate Rent or
otherwise relieve Tenant from performance of Tenant’s obligations under this
Lease. Notwithstanding the foregoing, if any “Essential
Service” (as hereinafter defined) which Landlord is required to
provide to the Demised Premises pursuant to the terms of this Section is
interrupted due to the negligence of Landlord, its agents or employees (a “Service Interruption”) and such Service Interruption causes
Tenant to be unable to reasonably use all or a material portion of the Demised
Premises (the “Affected Space”) for a period of
three (3) or more days after written notice thereof from Tenant to
Landlord (the “Interruption Notice”), then, the
Annual Base Rent shall abate in the proportion that the rentable square footage
of the Affected Space bears to the

 

19

 

rentable square footage of the Demised Premises, which abatement shall
commence on the fourth (4th) day following
Landlord’s receipt of the Interruption Notice and expire the date that the
Service Interruption is remedied. Notwithstanding the foregoing, in no event
shall Tenant be entitled to abatement or any other remedy if the interruption
of any Essential Service is caused by the negligence of Tenant, its agents or
employees. Except as may be otherwise provided for in Sections 14 and 15
herein, in the event of any Service Interruption pursuant to which Tenant shall
exercise its right to abate Annual Base Rent in accordance with the foregoing
provisions of this Section, it is understood and agreed that Tenant shall not
be entitled to pursue any other rights against Landlord (including, without
limitation, any right to terminate this Lease or to claim an actual or
constructive eviction or to bring an action for money damages) unless such
Service Interruption shall have continued for fifteen (15) or more days. For
purposes of this Section, an “Essential Service”
shall mean the service provided by the HVAC systems, plumbing and waste
disposal systems and electrical systems (to the extent supplied by Landlord).
Nothing contained herein shall expand or limit Tenant’s right to abatement in
the case of a fire or other casualty or condemnation as provided in the “Fire
or Casualty” or “Condemnation” Sections of this Lease.

 

10.          CARE OF DEMISED PREMISES. Tenant agrees that it shall:

 

(a)           In its use of the Demised Premises comply at
all times with any and all federal, state and local statutes, regulations,
ordinances, and other requirements of any of the constituted public authorities
relating to Tenant’s use, occupancy or alteration of the Demised Premises (and
with the reasonable, commercially customary and non-discriminatory requirements
of the insurers insuring the Building relating thereto). Notwithstanding the
foregoing, with respect to any obligation of Tenant hereunder, Tenant shall
have the right, upon giving prior written notice to Landlord, to contest any
obligation imposed upon Tenant hereunder and to defer compliance during the
pendency of such contest, provided that the failure of Tenant to so comply will
not subject Landlord to prosecution, criminal penalty or, unless Tenant shall
agree in writing to reimburse Landlord for same, any additional costs. Landlord
shall cooperate with Tenant in any such contest, at no cost to Landlord, and
shall execute, acknowledge and deliver any documents reasonably required in
furtherance of such purpose. The provisions of this Section are not
intended to impose on Tenant at any time any obligation to make changes or
alterations to the Building or any obligation which under this Lease is an
obligation of Landlord;

 

(b)           Maintain, repair and replace the interior,
non-structural portions of the Demised Premises so as to keep same in safe,
good order and repair, as and when needed, and commit no waste in the Demised
Premises. The provisions of this Section are not intended to impose on
Tenant at any time any obligation to make changes or alterations to the
Building or any obligation which under this Lease is an obligation of Landlord
and the provisions of this Section shall not apply in the case of damage
or destruction by fire or other casualty or in the case of any taking; the
obligations of the parties in such cases shall be as provided in other Sections
of this Lease. Notwithstanding the foregoing, in the event any glass is broken
by Tenant, its agents, employees or invitees, Landlord agrees to repair and
replace the same, as necessary,

 

20

 

at Tenant’s sole cost and expense;

 

(c)           Not overload, damage or deface the Demised
Premises or do any act of an extra-hazardous nature which might make void or
voidable any insurance on the Demised Premises or the Building or which may
render an increased or extra premium payable for insurance over and above the
premium which would otherwise have been payable absent such act by Tenant (and
without prejudice to any right or remedy of Landlord regarding this
subparagraph, Landlord shall have the right to collect from Tenant, within
thirty (30) days after written demand (which demand shall be accompanied by a schedule or
“make-up” prepared by the Fire Insurance Exchange or other body making such
rates and setting forth the nature of such act and the specific amount of
increase in premiums caused thereby), any such increase or extra premium
resulting from such act by Tenant). Notwithstanding anything to the contrary
contained herein, it is understood and agreed that Tenant’s use of the Demised
Premises for the Permitted Use described in clause “i” of Section 1(t)
shall not be deemed to comprise any such act; and it is further understood and
agreed that if Landlord shall permit the use of any other portion of the
Building for any use or purpose and by reason thereof the insurance rate
applicable to Tenant’s property at the Demised Premises shall at any time be
higher than it otherwise would be, then Landlord shall reimburse Tenant on
demand (which demand shall be accompanied by a schedule or “make-up”
prepared by the Fire Insurance Exchange or other body making such rates and
setting forth the nature of such use and the specific amount of increase in
premiums caused thereby) for the part of all insurance premiums which shall
have been then or in the future charged as a result of such use or purpose and
which Tenant shall have paid on account of increase in rate in its own policies
of insurance;

 

(d)           Not make any alteration of or addition to the
Demised Premises without the prior written approval of Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed, except for
interior, non-structural alterations that do not exceed more than Two Dollars
($2.00) per rentable square feet of the Demised Premises in the aggregate. All
alterations and additions performed in the Demised Premises by Tenant, whether
or not requiring Landlord’s consent, shall be performed: (i) at Tenant’s
sole cost and expense, (ii) by qualified contractors and subcontractors
(Tenant shall submit the names of such contractors and subcontractors to
Landlord prior to performing any alterations or additions), and (iii) in a
good and workmanlike manner and in accordance with all applicable laws and
ordinances. Upon completion of any alterations requiring Landlord’s consent
hereunder, Tenant shall pay to Landlord an amount equal to the lesser of (i) five
percent (5%) of the total cost of such alterations, or (ii) Landlord’s
construction manager’s fee in reviewing and inspecting such alterations (such
construction manager’s rate is $100.00 per hour), to reimburse Landlord for
review of all plans and specifications and final inspection of the work. All
alterations to the Demised Premises by Tenant shall be the property of Tenant
until the expiration or earlier termination of this Lease.  Upon the expiration or earlier termination of
this Lease, all such alterations shall remain at the Demised Premises and
become the property of Landlord without payment by Landlord therefor; provided,
however, that movable furniture and furnishings and other trade fixtures of
Tenant (including, without limitation, all signs, displays, decorations, track
lighting and other specialized lighting

 

21

 

fixtures), shall, regardless of the manner or mode of attachment,
remain the property of Tenant and may be removed by Tenant at any time. Tenant
shall procure all necessary permits or licenses from the appropriate
governmental authorities which may be expressly required in connection with the
prosecution of any such alterations and additions by Tenant and Landlord agrees
to cooperate with Tenant, at no additional cost to Landlord, in respect of such
procurement and in furtherance thereof shall promptly execute, or join with
Tenant in the execution of, any applications for such permits or licenses in
connection with such procurement, at no additional cost to Landlord.
Notwithstanding the foregoing, if Landlord advises Tenant in writing at the
time Landlord approves any alteration requiring Landlord approval (or, if not
requiring Landlord’s approval, upon Tenant’s written request prior to making
any such alteration) that Landlord will require such alterations to be removed
at the expiration or earlier termination of the Lease, Tenant shall, at Tenant’s
sole cost and expense, remove such alterations and repair any resulting damage.
Notwithstanding anything to the contrary herein, Tenant shall not be obligated
to remove any paint or carpet from the Demised Premises;

 

(e)           Not install any equipment of any kind
whatsoever which will materially adversely affect any of the heating,
ventilating, air-conditioning, electric, sanitary, elevator or other systems
serving the Demised Premises or any other portion of the Building, or any of
the services required of Landlord under this Lease, without the prior written
approval of Landlord (which approval shall not be unreasonably withheld,
conditioned or delayed), and in the event such approval is granted, the
reasonable and actual cost of any replacements, changes or additions shall be
paid for by Tenant at Tenant’s sole cost and expense. Notwithstanding anything
to the contrary contained herein, Landlord hereby consents to the installation
by Tenant upon the Demised Premises of a kiln and mold making machine for
Tenant’s use in connection with its product development activities and agrees
that such installation shall not be deemed to require any replacements, changes
or additions to such systems as are described in this Section and that
such installation shall not require the payment by Tenant to Landlord for any
additional costs hereunder. Notwithstanding the foregoing, Landlord, at
Landlord’s option, shall have the right to require that the kiln and mold
making machine be removed upon the expiration or earlier termination of the
Lease by providing written notice thereof to Tenant, in which event Tenant, at
Tenant’s sole cost and expense, shall remove such alterations and repair any
resulting damage;

 

(f)            Subject to Section 38 hereof, not place
signs on the Demised Premises except for (i) signs located entirely within
the Demised Premises and which are not visible from the exterior of the Demised
Premises, (ii) signs on doors provided that the lettering and text are
approved by Landlord; and (iii) signs in the lobby and elevator areas.

 

(g)           Not install or authorize the installation of
any coin operated vending machine, except for the dispensing of snacks, coffee,
and similar items to the employees of Tenant for consumption in the cafeteria
and the Demised Premises; and

 

(h)           Provided that the same shall be uniformly
imposed upon, and 

 

22

 

non-discriminatorily enforced against, all tenants and occupants of the
Building, observe the rules and regulations annexed hereto as Exhibit “C”, as Landlord may
from time to time amend the same, for the general safety, comfort and
convenience of Landlord, occupants and tenants of the Building; provided,
however, that any such amendments shall likewise be uniformly imposed upon, and
non-discriminatorily enforced against, all tenants and occupants of the
Building (and written notice thereof shall be given to Tenant by Landlord in
each instance at least thirty (30) days prior to the date upon which any of
same shall be scheduled to take effect) and provided further that no such
amendments shall interfere with Tenant’s operation of its business upon the
Demised Premises nor serve to increase the obligations, or limit the rights, of
Tenant under this Lease.

 

11.          MECHANICS’ LIENS. Prior to Tenant performing any alterations
to the Demised Premises for which a lien could be filed against the Demised
Premises or the Building, Tenant shall have its contractor execute and file in
the appropriate public office a Waiver of Mechanics’ Lien, in statutory form
and provide Landlord with an original copy thereof. If any mechanic’s lien
shall be filed against the Demised Premises or the Building by reason of Tenant’s
failure to pay for any materials or labor furnished to the Demised Premises on
Tenant’s behalf (except for work contracted for by Landlord) Tenant shall,
within thirty (30) days after receipt of notice from Landlord of the filing
thereof, discharge (by bond, payment or otherwise) such mechanics’ lien and
shall indemnify and hold harmless Landlord from any and all claims, costs,
damages, loss, liabilities and expenses (including, without limitation,
reasonable attorney’s fees) incurred by Landlord in connection with any failure
by Tenant to discharge the same as aforesaid.

 

12.          REPAIRS AND MAINTENANCE. Landlord shall keep and maintain the Common
Areas of the Building clean and in good working order and shall maintain the
Building and Property in first-class condition at all times during the Term.
Landlord shall further make, or cause to be made, all necessary repairs to the
structure and exterior of the Building, as well as to the mechanical, HVAC,
electrical and plumbing systems servicing Building (including, without
limitation, all portions of such systems as are located within and/or
exclusively serve the Demised Premises). Landlord shall also keep and maintain
in good and tenantable condition and repair and replace, as necessary, (i) the
roof, roof drainage systems, exterior walls, foundations, floor (except floor
coverings), (ii) all structural components of the Demised Premises and the
Building, (iii) all windows within, and/or comprising, the exterior walls
of the Demised Premises and/or within, and/or comprising, the walls separating
the Demised Premises from any Common Areas and (iv) all doors providing
access to the Demised Premises from any Common Areas. Landlord shall, at its
sole cost and expense (and not to be included in Operating Expenses), further
make or cause to be made any other repairs and changes required to the Demised
Premises and said Building by reason of any breach by Landlord of any provision
of this Lease or by reason of the negligence or fault of Landlord or its
servants, agents or employees. Landlord shall maintain and repair all sewer
facilities and other utility facilities outside the Demised Premises servicing
the Demised Premises. Landlord shall cause all repairs and changes to be made
without unreasonable interference with the operation of the Building or the
business of Tenant

 

23

 

or any subtenant or licensee of Tenant. When used herein, the term “repair”
shall be deemed to include restoration and replacement as may be necessary to
achieve or maintain good working order. The cost of the foregoing maintenance
and repairs shall be included in Operating Expenses, except to the extent
expressly excluded therefrom pursuant to any provision of this Lease
(including, without limitation, the provisions of this Section and of Section 7).
Notwithstanding the foregoing, all repairs made necessary by the negligent acts
or willful misconduct of Tenant, its agents, employees or invitees or by reason
of damage caused by Tenant, its agents, employees or contractors, to the
Demised Premises or other portions of the Building in connection with Tenant’s,
its agents’, employees’ or contractors’ construction of any alterations, shall
be made at the sole cost and expense of Tenant. The provisions of this Section shall
not apply in the case of damage or destruction by fire or other casualty or in
the case of any taking; the obligations of the parties in such cases shall be
as provided in other Sections of this Lease.

 

13.         SUBLETTING AND ASSIGNING.

 

(a)           Except as otherwise provided in this Lease,
Tenant shall not assign this Lease, or sublet all or any portion of the Demised
Premises, whether voluntarily or by operation of law, without first obtaining
Landlord’s prior written consent thereto, such consent not to be unreasonably
withheld, conditioned or delayed. Tenant acknowledges that, without in any way
limiting the foregoing, Landlord shall have the right to withhold its consent
if, by way of example and not limitation, the financial responsibility of a
proposed assignee or subtenant (as compared to Tenant or other tenants of the
Building as applicable to the comparable financial obligation then being
undertaken by such assignee or subtenant in comparison to the Tenant or such
other tenants and taking into account the then-current combined financial
responsibility of such assignee or subtenant and Tenant) is unsatisfactory to
Landlord, if such subtenant’s or assignee’s business is not for the Permitted
Use or would significantly increase the density of personnel use, if the
proposed sublease or assignment is to a tenant of the Building or to a prospect
with whom Landlord is then actively negotiating or has been engaged in active
negotiations with during the immediately preceding six (6) month period,
or if Tenant is in default beyond the cure period in the payment or performance
of any of its material obligations hereunder. In addition, Tenant shall not
mortgage, pledge or hypothecate this Lease. Any assignment, sublease, mortgage,
pledge or hypothecation in violation of this Section shall be void at the
option of Landlord and shall constitute a default hereunder without the
opportunity for notice or cure by Tenant.

 

(b)           A transfer or sale by Tenant of a majority of
the voting shares, partnership interests or other controlling interests in
Tenant shall be deemed an assignment of this Lease by Tenant requiring Landlord’s
prior written consent pursuant to subparagraph (a) above. Notwithstanding
the foregoing, so long as Tenant is not in default under this Lease beyond the
applicable cure period, upon thirty (30) days prior written notice to Landlord,
Tenant shall have the right, without Landlord’s consent, to sublet all or a
portion of the Demised Premises or to assign this Lease to any entity which is
an Affiliate (as hereinafter defined) of Tenant so long as the Affiliate has a
net worth (excluding intangibles) equal to or greater than the net worth
(excluding

 

24

 

intangibles) of Tenant as of the date of this Lease or as of the date
of the transfer, whichever is greater; provided, however, that there shall be
no such net worth requirement or condition applicable to the sublease to any
Affiliate of Tenant of premises comprising less than 65,000 rentable square
feet. As used herein, “Affiliate” shall mean any entity (x) that directly owns
more than fifty percent (50%) of the voting shares, partnership interests or
other controlling interests in Tenant, or (y) in which Tenant owns such
controlling interests, or (z) with which Tenant is in common control by virtue
of the ownership of such controlling interests by another person or entity.

 

(c)           Notwithstanding the foregoing, any such
subletting or assignment (whether or not requiring Landlord’s consent) shall
not in any way relieve or release Tenant from liability for the payment and
performance of all obligations under this Lease (including, if applicable,
obligations relating to any extension of the Term for any Renewal Term as
expressly provided in Section 34 hereinafter), and Tenant shall remain
primarily liable to Landlord for all such obligations without release or
limitation by reason of any modification or amendment to this Lease entered
into by Landlord and any assignee of Tenant (provided, however, that,
notwithstanding anything to the contrary contained herein, it is understood and
agreed that, unless Tenant shall have otherwise expressly agreed in writing
with Landlord, in no event shall Tenant be liable for any aspect of any such
modification or amendment entered into by Landlord and any such assignee which
shall not be a parent, subsidiary, or affiliated company of the original Tenant
under this Lease which shall increase the obligations of “Tenant” hereunder).
Furthermore, no assignment will be valid unless the assignee shall execute and
deliver to Landlord an assignment and assumption agreement in the form attached
hereto as Exhibit “L”, which shall include an assumption by
the assignee of all of the obligations of Tenant and the assignee’s
ratification of and agreement to be bound by all the provisions of this Lease;
and no subletting will be valid unless Tenant and the subtenant have executed
and delivered to Landlord a sublease agreement pursuant to which such subtenant
agrees that the sublease shall be subject to all of the terms and conditions of
this Lease, as the same shall be applicable to such subtenant’s use and
occupancy of the subleased premises.

 

(d)           In the case of a sublease to other than any
parent, subsidiary, or affiliated company of Tenant, Tenant shall pay to
Landlord, as Additional Rent hereunder, fifty percent (50%) of the amount by
which all subrents or other sums or economic consideration received by Tenant
(after deducting the aggregate amount of all reasonable costs and expenses
incurred by Tenant in the making of such sublease (including, without limitation,
brokerage commissions, attorneys’ and other professionals’ fees and
disbursements, construction and alteration costs, and free and/or reduced rent
periods)), whether denominated as rentals or otherwise, shall exceed the
corresponding monthly sums which Tenant is required to pay under this Lease. In
the case of an assignment to other than any parent, subsidiary, or affiliated
company of Tenant or other than any surviving company in a merger or
consolidation involving Tenant, Tenant shall pay to Landlord, as Additional
Rent hereunder, fifty percent (50%) of all sums or economic consideration
received by Tenant for the assignment (after deducting the aggregate amount of
all reasonable costs and expenses incurred by Tenant in the making of such
assignment (including, without

 

25

 

limitation, brokerage commissions, attorneys’ and other professionals’
fees and disbursements, construction and alteration costs, and free and/or
reduced rent periods), whether denominated as rentals or otherwise.

 

(e)           When Tenant requests Landlord’s required
consent to an assignment or sublease as hereinbefore provided, it shall notify
Landlord in writing of (i) the name and address of the proposed assignee
or subtenant; (ii) the nature and character of the business of the
proposed assignee or subtenant; (iii) financial information including
financial statements of the proposed assignee or subtenant; (iv) the
rental rate and material monetary terms, such as rent concessions, work, or work
allowance, at which Tenant intends to sublet any of the Demised Premises or
assign this Lease, the proposed effective date of the sublet or assignment and,
in the case of a sublet, the portion of the Demised Premises sought to be
sublet and the length of the sublet, and (v) a copy of the proposed sublet
or assignment documentation.

 

(f)            Intentionally deleted.

 

(g)           No subletting, occupancy or collection of
rent with respect to a subtenant or assignee pursuant to which Landlord’s
consent shall be required hereunder shall be deemed the acceptance of the
subtenant or occupant as tenant under this Lease unless otherwise consented to
by Landlord. The consent by Landlord to an assignment or subletting where such
Landlord consent is required shall not in any respect be construed to relieve
Tenant from obtaining the express consent in writing of Landlord to any further
assignment or subletting where such consent shall be expressly required under
this Lease.

 

(h)           Tenant shall pay to Landlord, promptly upon
demand therefor, all reasonable out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys’ fees and disbursements) incurred by
Landlord in connection with any request by Tenant for Landlord’s consent to an
assignment of this Lease or sublease of all or any part of the Demised Premises
where such consent shall be expressly required under this Lease; provided,
however, that in no event shall the amount of any such required reimbursement
hereunder exceed $500.00.

 

14.          FIRE OR CASUALTY. In the event that the whole or any part of
the Building or the Demised Premises or any other improvements upon the
Property is damaged or destroyed by fire or other casualty, Landlord shall, at
Landlord’s sole cost and expense, promptly commence, and thereafter prosecute
the completion thereof with all due diligence, the repair, restoration and
rebuilding of the portion(s) of the Building or the Demised Premises or other
improvements so damaged or destroyed to as nearly as practicable their
condition immediately prior to the occurrence of such damage or destruction.
Notwithstanding anything to the contrary contained in this Section 14, in
the event that (i) the Demised Premises shall be damaged by fire or other
casualty to the extent of twenty-five percent (25%) or more of the full
replacement cost thereof during the last eighteen (18) months of the Lease
Term, or (ii) the Demised Premises and/or the Building shall be damaged by
fire or other casualty to the extent of fifty percent (50%) or more of the full
replacement cost thereof and more than one hundred

 

26

 

eighty (180) days shall be reasonably anticipated to be required in
order to fully complete the reconstruction thereof, or (iii) notwithstanding the
extent of any such damage to the Demised Premises and/or said Building, if
Landlord’s reconstruction is not completed within one hundred eighty (180) days
after the date of such damage, Tenant shall have the option to terminate this
Lease on written notice to Landlord of exercise thereof within thirty (30) days
after (x) the date of occurrence of such damage or (y) the expiration of the
aforesaid one hundred eighty (180) day period for the completion of such
restoration by Landlord, whichever shall be applicable. To the extent and for
the time that the Demised Premises are rendered untenantable on account of fire
or other casualty, the Rent shall proportionately abate according to the part
of the Demised Premises which is usable by Tenant for its normal business operations
(with usability to be determined by the extent, if any, that Tenant, in its
reasonable judgment, shall deem it infeasible to conduct its business upon the
Demised Premises as a result of any such damage and/or repair and
reconstruction to the Demised Premises and/or said Building) commencing from
the date of damage or destruction and continuing during the period of repair
and reconstruction; provided, however, that in the event that the Demised
Premises shall have been rendered wholly untenantable by reason of any such
damage and/or reconstruction to the Demised Premises and/or said Building, such
abatement shall continue until the earlier to occur of (i) the
thirty-first day after Landlord shall have completed its reconstruction as
aforesaid or (ii) the date upon which Tenant shall first resume its normal
business operations at the Demised Premises. Notwithstanding anything to the
contrary contained herein, if any mortgagee, having the right to do so, shall
direct that the insurance proceeds are to be applied to reduce the mortgage
debt rather than to the repair of such damage, this Lease shall, at the option
of Landlord (which option shall be exercised by Landlord by the giving of
written notice thereof to Tenant within thirty (30) days after Landlord’s
receipt of such direction from such mortgagee), be terminated effective as of
the date of casualty.

 

15.          EMINENT DOMAIN. If the whole or substantially all of the
Building is taken or condemned for a public or quasi-public use under any
statute or by right of eminent domain by any competent authority or sold in
lieu of such taking or condemnation, this Lease shall automatically terminate
on the date that the right to possession shall vest in the condemning authority
(the “Taking Date”), with Rent being adjusted
to said Taking Date, and Tenant shall have no claim against Landlord for the
value of any unexpired term of this Lease. Tenant shall have no claim against
Landlord and no claim or right to any portion of any amount that may be awarded
as damages or paid as a result of any taking, condemnation or purchase in lieu
thereof; all rights of Tenant thereto are hereby assigned by Tenant to
Landlord, except that, notwithstanding the foregoing, Tenant shall retain the
right to receive compensation or damages for its fixtures and personal property
and for moving expenses, the expense of removal of Tenant’s trade fixtures and
other personal property, loss of good will, and awards for Tenant’s
interruption or dislocation of business in the Demised Premises, remodeling
expenses; provided that any such claim by Tenant with respect to the
depreciated book value of any such leasehold improvements shall in no way
diminish the award, damages or compensation payable to or recoverable by
Landlord in connection with such condemnation. If any part of the Demised
Premises is so taken or condemned and

 

27

 

this Lease is not terminated in accordance with the foregoing
provisions of this Section, this Lease shall automatically terminate as to the
portion of the Demised Premises so taken or condemned, as of the Taking Date,
and this Lease shall continue in full force as to the remainder of the Demised
Premises, with Rent abating only to the extent of the Demised Premises so taken
or condemned; provided, however, that if the remaining portion of the Demised
Premises is no longer suitable for the Permitted Use, then Tenant shall have
the right to terminate this Lease by providing written notice thereof to
Landlord within thirty (30) days after the Taking Date.

 

16.          INSOLVENCY. (a) The appointment of a receiver or
trustee to take possession of all or substantially all of the assets of Tenant,
or (b) an assignment by Tenant for the benefit of creditors, or (c) the
institution by or against Tenant of any proceedings for bankruptcy or
reorganization under any state or federal law (unless the same shall be
dismissed within ninety (90) days after institution), or (d) any execution
issued against all or substantially all of the assets of Tenant which is not
stayed or discharged within thirty (30) days after issuance thereof, shall
constitute a breach of this Lease by Tenant. Landlord in the event of such a
breach, shall have, without need of further notice, the rights enumerated in Section 17
herein, except that Landlord shall not have the right to the Accelerated Rent
Component pursuant to Section 17(a)(i) so long as all of the other
obligations of Tenant (including, without limitation, the obligation to pay
Rent) are being performed by Tenant or anyone claiming through or under Tenant.

 

17.          DEFAULT.

 

(a)           It shall be deemed that an “Event of Default”
shall have occurred if (i) Tenant shall fail to pay Rent hereunder when
due and such failure continues for more than ten (10) days after written
notice of such failure from Landlord to Tenant (provided, however, that
Landlord shall not be required to provide written notice to Tenant more than
two times during any twelve month period), or (ii) any of the events
specified in Section 16 occur; or (iii) Tenant vacates or abandons
the Demised Premises during the Term hereof [provided, however, Tenant’s
abandoning of the Demised Premises shall not constitute an “Event of Default”
hereunder if (x) Tenant pays to Landlord promptly upon demand any and all
reasonable costs incurred by Landlord as a result of said action, including,
but not limited to, increase in security costs and increase in insurance
premiums, and (y) Tenant deposits in escrow or provides Landlord with an
unconditional letter of credit (in a form and substance satisfactory to
Landlord) in an amount equal to the sum of the Annual Base Rent which otherwise
would have been payable for the six (6) months after the date that Tenant
abandons the Demised Premises (such amount may be drawn against if Tenant fails
to pay Rent in accordance with the terms of this Lease); notwithstanding the
foregoing, if Tenant defaults in the payment of Rent during the period that
Tenant has abandoned the Demised Premises, Landlord, regardless of whether or
not such default has been cured, shall be immediately entitled to pursue any
and all remedies provided for herein and retain all proceeds for the letter of
credit (provided that such proceeds are applied to the amount of Tenant’s
defaults in the payment Rent then due or to become due)]; or (iv) Tenant
sublets the Demised Premises or assigns this Lease in any circumstance where
such sublease or assignment shall violate the provisions of Section 13
hereof; or (v) Tenant fails to

 

28

 

maintain the insurance required pursuant to Section 19 hereof and
such failure continues for more than five (5) days after written notice
thereof from Landlord; or (vi) Tenant fails to perform or observe any of
the other covenants, terms or conditions contained in this Lease and such
failure continues for more than thirty (30) days after written notice thereof
from Landlord (or such longer period as is reasonably required to correct any
such default, provided Tenant commences to effectuate a cure within thirty (30)
days after written notice thereof by Landlord and thereafter diligently
continues the prosecution thereof); then and in any of said cases and during
the continuance of any such Event of Default, Landlord shall have the right, at
Landlord’s sole option (and notwithstanding any former breach of covenant or
waiver thereof in a former instance), to serve upon Tenant a notice of Landlord’s
intention to exercise its rights and remedies as hereinafter provided in this Section at
the expiration of five (5) days after the date of the giving of such
notice, and upon the expiration of said five (5) day period, if Tenant
shall have failed to cure such Event of Default (unless such Event of Default
is of such a character that rectification thereof reasonably requires more than
said five (5) day period and Tenant shall have commenced to cure said
Event of Default within said five (5) day period and is continuing to
diligently prosecute such cure to completion), then Landlord, in addition to
all other rights and remedies available to it by law or equity or by any other
provisions hereof, may at any time thereafter:

 

(i)            declare to be immediately due and payable, a
sum equal to the Accelerated Rent Component (as hereinafter defined), and
Tenant shall remain liable to Landlord as hereinafter provided;

 

(ii)           terminate this Lease upon written notice to
Tenant and, on the date specified in said notice, this Lease and the term
hereby demised and all rights of Tenant hereunder shall expire and terminate
and Tenant shall thereupon quit and surrender possession of the Demised
Premises to Landlord in the condition elsewhere herein required, and Tenant
shall remain liable to Landlord as hereinafter provided; and/or

 

(iii)         enter upon and repossess the Demised
Premises, by force, summary proceedings, ejectment or otherwise, and dispossess
Tenant and remove Tenant and all other persons and property from the Demised
Premises, without being liable to Tenant for prosecution or damages therefor,
and Tenant shall remain liable to Landlord as hereinafter provided.

 

(b)           For purposes herein, the Accelerated Rent
Component shall mean the aggregate of:

 

(i)            all Rent and other charges, payments, costs
and expenses due from Tenant to Landlord and in arrears at the time of the
election of Landlord to recover the Accelerated Rent Component;

 

(ii)           the Annual Base Rent reserved for the then
entire unexpired balance of the Term (taken without regard to any early
termination of the Term by virtue of any default or any early termination
rights set forth herein), plus all other charges,

 

29

 

payments, costs and expenses herein agreed to be paid by Tenant up to
the end of the Term which shall be capable of precise determination at the time
of Landlord’s election to recover the Accelerated Rent Component, discounted to
then present value at the Prime Rate (as defined in Section 7(b)(ii)); and

 

(iii)         Landlord’s good faith estimate of all
charges, payments, costs and expenses herein agreed to be paid by Tenant up to
the end of the Term which shall not be capable of precise determination as
aforesaid, discounted to then present value at the Prime Rate (and for such
purposes no estimate of any component of the Additional Rent to accrue pursuant
to the provisions of Sections 7 and Section 8 hereof shall be less than
the amount which would be due if each such component continued at the highest
monthly rate or amount in effect during the twelve (12) months immediately
preceding the default).

 

(c)           In the event that Landlord shall, after
default or breach by Tenant, recover the Accelerated Rent Component and/or
retake possession of the Demised Premises, then Landlord agrees to use
reasonable efforts to relet the Demised Premises; provided, however, in no
event shall Landlord be required to (i) lease the Demised Premises over
other available space in the Building, (ii) accept a below-market rental
rate for the Demised Premises, (iii) accept any tenant whose
creditworthiness is unsatisfactory to Landlord, in its sole discretion,
reasonably exercised, or (iv) accept any tenant whose business is not
compatible with the other tenants of the Building, as determined by Landlord in
its sole discretion, reasonably exercised. For the purpose of such reletting,
Landlord may decorate or make reasonable repairs, changes, alterations or
additions to the Demised Premises to the extent deemed desirable or convenient
by Landlord. All reasonable and commercially customary costs of reletting,
including, without limitation, the cost of such repairs, changes, alterations
and additions, brokerage commissions and reasonable legal fees, shall be
charged to and be payable by Tenant as Additional Rent hereunder for the
purpose of calculating Landlord’s damages arising from such termination. Any sums
collected by Landlord from any new tenant shall be credited against the balance
of the Annual Base Rent and Additional Rent due hereunder as aforesaid.

 

(d)           Tenant shall, with respect to all periods of
time up to and including the expiration of the Term of this Lease (or what
would have been the expiration date in the absence of default or breach) remain
liable to Landlord as follows:

 

(i)            In the event of termination of this Lease on account
of an Event of Default pursuant to the provisions of Section 17(b) above,
Tenant shall remain liable to Landlord for damages equal to the Rent payable
under this Lease by Tenant as if this Lease were still in effect, less the net
proceeds of any reletting after deducting all reasonable and commercially
customary costs incident thereto (including without limitation all repossession
costs, brokerage and management commissions, operating and reasonable legal
expenses and fees, alteration costs and expenses of preparation for reletting)
and to the extent such damages shall not have been recovered by Landlord by
virtue of payment by Tenant of the Accelerated Rent Component (but without
prejudice to the right of Landlord to demand and receive the Accelerated Rent

 

30

 

Component), such damages shall be payable to Landlord, at Landlord’s
option, monthly upon presentation to Tenant of a bill for the amount due or at
such other intervals or times as Landlord shall determine.

 

(ii)           In the event and so long as this Lease shall
not have been terminated after default or breach by Tenant, the rent and all
other charges payable under this Lease shall be reduced by the net proceeds of
any reletting by Landlord (after deducting all costs incident thereto as above
set forth) and by any portion of the Accelerated Rent Component paid by Tenant
to Landlord (but without prejudice to the right of Landlord to demand and
receive the Accelerated Rent Component), and any amount due to Landlord shall
be payable monthly, at Landlord’s option, upon presentation to Tenant of a bill
for the amount due, or at such other intervals or times as Landlord shall
determine.

 

(e)           If Landlord shall, after default or breach by
Tenant, recover the Accelerated Rent Component from Tenant and it shall be
determined at the expiration of the term of this Lease (taken without regard to
early termination for default) that a credit is due Tenant because the net
proceeds of reletting, as aforesaid, plus the amounts paid to Landlord by
Tenant exceed the aggregate of rent and other charges accrued in favor of
Landlord to the end of the term, Landlord shall refund such excess to Tenant
(but not an amount more than the rent and additional rent paid by Tenant for
any particular period of time), without interest, promptly after such determination.

 

(f)            Nothing contained in this Lease shall limit
or prejudice the right of Landlord to prove for and obtain as damages incident
to a termination of or default under this Lease, in any bankruptcy,
reorganization or other court proceedings, the maximum amount allowed by any
statute or rule of law in effect when such damages are to be proved.

 

(g)           Provided Landlord uses commercially
reasonable efforts to mitigate damages subject to subsection (c) above,
Landlord shall in no event be responsible or liable for any failure to relet
the Demised Premises or any part thereof, or for any failure to collect any
Rent due upon a reletting.

 

(h)           Tenant shall pay upon demand all of Landlord’s
reasonable and actual out-of-pocket costs, charges and expenses, including the
reasonable fees and out-of-pocket expenses of counsel, agents and others
retained by Landlord, incurred in enforcing Tenant’s obligations hereunder or
incurred by Landlord in any litigation, negotiation or transaction in which
Tenant causes Landlord, without Landlord’s fault, to become involved or
concerned.

 

(i)           AFTER A DEFAULT OR THE
EXPIRATION OF THE TERM, FOR THE SOLE AND EXPRESS PURPOSE OF OBTAINING
POSSESSION OF THE DEMISED PREMISES, TENANT HEREBY AUTHORIZES AND EMPOWERS THE
PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD IN THE COMMONWEALTH OF
PENNSYLVANIA, AS ATTORNEY FOR TENANT AND ALL PERSONS CLAIMING UNDER OR THROUGH
TENANT, TO APPEAR FOR AND

 

31

 

CONFESS JUDGMENT AGAINST TENANT FOR POSSESSION OF THE DEMISED
PREMISES, AND AGAINST ALL PERSONS CLAIMING UNDER OR THROUGH TENANT, IN FAVOR OF
LANDLORD, FOR RECOVERY BY LANDLORD OF POSSESSION THEREOF, FOR WHICH THIS
AGREEMENT OR A COPY HEREOF VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT;
AND THEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE
DEMISED PREMISES, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY
STAY OF EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED THE SAME
SHALL BE TERMINATED AND THE POSSESSION OF THE DEMISED PREMISES REMAINS IN OR IS
RESTORED TO TENANT, LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT
TO CONFESS JUDGMENT IN ONE OR MORE FURTHER ACTIONS IN THE MANNER AND FORM SET
FORTH ABOVE TO RECOVER POSSESSION OF SAID DEMISED PREMISES FOR SUCH SUBSEQUENT
DEFAULT. NO SUCH TERMINATION OF THIS LEASE, NOR TAKING, NOR RECOVERING POSSESSION
OF THE DEMISED PREMISES SHALL DEPRIVE LANDLORD OF ANY REMEDIES OR ACTION
AGAINST TENANT FOR RENT OR FOR DAMAGES DUE OR TO BECOME DUE FOR THE BREACH OF
ANY CONDITION OR COVENANT HEREIN CONTAINED, NOR SHALL THE BRINGING OF ANY SUCH
ACTION FOR RENT, OR BREACH OF COVENANT OR CONDITION NOR THE RESORT TO ANY OTHER
REMEDY HEREIN PROVIDED FOR THE RECOVERY OF RENT OR DAMAGES FOR SUCH BREACH BE
CONSTRUED AS A WAIVER OF THE RIGHT TO INSIST UPON THE FORFEITURE AND TO OBTAIN
POSSESSION IN THE MANNER HEREIN PROVIDED.

 

(j)            Intentionally Deleted.

 

(k)           Intentionally Deleted.

 

(l)            If Rent or any other sum due from Tenant to
Landlord shall be overdue for more than ten (10) days after written notice
from Landlord to Tenant (provided, however, that Landlord shall not be required
to provide written notice to Tenant more than two times during any twelve month
period), it shall thereafter bear interest at the rate of ten percent (10%) per
annum until paid.

 

(m)          All remedies available to Landlord hereunder
and at law and in equity shall be cumulative and concurrent. No termination of
this Lease pursuant to the provisions of this Section 17 nor taking or recovering
possession of the Demised Premises after any such termination shall deprive
Landlord of any remedies or actions against Tenant as are expressly permitted
under this Section 17 for Rent, for charges or for damages for the breach
of any covenant, agreement or condition herein contained, nor, after any such
termination, shall the bringing of any such action for Rent, charges or breach
of covenant, agreement or condition, nor the resort to any other remedy or
right for the recovery of Rent, charges or damages for such breach be construed
as a waiver or release of the right to insist upon the forfeiture and to obtain
possession. No reentering or taking possession of the Demised Premises, or
making of repairs, alterations or improvements thereto, or reletting thereof,
shall be construed as an

 

32

 

election on the part of Landlord to terminate this Lease unless written
notice of such election to terminate is given by Landlord to Tenant.

 

(n)           No waiver of any provision of this Lease
shall be implied by any failure of Landlord to enforce any remedy allowed for
the violation of such provision, even if such violation is continued or
repeated, and no express waiver shall affect any provision other than the
one(s) specified in such waiver and only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease pursuant to the provisions of Section 17 shall
in any way alter the length of the Term or of Tenant’s right of possession
hereunder or after the giving of any notice shall reinstate, continue or extend
the Term or affect any notice given to Tenant prior to the receipt of such
moneys, it being agreed that after the service of notice or the commencement of
a suit or after final judgment for possession of the Demised Premises, Landlord
may receive and collect any Rent due, and the payment of said Rent shall not
waive or affect said notice, suit or judgment. The receipt by Landlord of a
lesser amount than the Annual Base Rent or any Additional Rent due shall not be
construed to be other than a payment on account of the Annual Base Rent or
Additional Rent then due, and any statement on Tenant’s check or any letter
accompanying Tenant’s check to the contrary shall not be deemed an accord and
satisfaction, and Landlord may accept such payment without prejudice to
Landlord’s right to recover the balance of the Annual Base Rent or Additional
Rent due or to pursue any other remedies provided in this Lease or otherwise.

 

18.          LANDLORD’S RIGHT TO CURE. Landlord may (but shall not be obligated),
on thirty (30) days notice to Tenant (except that only reasonable notice based
on the circumstances need be given in case of emergency, or in the event a
default by Tenant causes a default under any other agreement to which Landlord
is a party) cure on behalf of Tenant any default hereunder by Tenant, and the
reasonable and actual out-of-pocket cost of such cure (including any reasonable
attorney’s fees incurred) shall be deemed Additional Rent payable upon demand.

 

19.          INSURANCE.

 

(a)           Tenant shall at all times during the Term,
including any renewal or extension thereof, at Tenant’s sole cost and expense,
maintain in full force and effect with respect to the Demised Premises and
Tenant’s use thereof from responsible insurance companies licensed in the
Commonwealth of Pennsylvania, the following insurance coverages:

 

(i)            commercial general liability insurance,
covering injury to person and property in amounts at least equal to Five
Million Dollars ($5,000,000) per occurrence and annual aggregate limit for
bodily injury and Five Million Dollars ($5,000,000) per occurrence and annual
aggregate limit for property damage. All such commercial general liability
insurance policies shall name Landlord, the Property Manager and at Landlord’s
request any institutional first mortgagee of the Property as additional
insureds. The commercial general liability policy shall include a General
Aggregate Limit per Location as per Tenant’s standard policy;

 

33

 

(ii)         All risk of physical
loss insurance with extended coverage (also referred to as property insurance),
including Boiler & Machinery Insurance which shall in no event be less
than the 100% replacement value of the machinery, equipment, furniture, trade fixtures
and other personal property of Tenant located at the Demised Premises, with a
replacement cost coverage endorsement and agreed value endorsement and business
interruption and extra expense coverage. Should the Boiler & Machinery
Insurance be placed with a carrier other than the Property insurer, then both
the Property and Boiler & Machinery Insurance shall be endorsed with a
Joint Loss Agreement Endorsement;

 

(iii)        Worker’s compensation
insurance with statutory limits covering all of Tenant’s employees working at
the Demised Premises including employer’s liability limits of $1,000,000; and

 

(iv)         Automobile liability
insurance with minimum limits of $1,000,000 combined single limit, each
occurrence.

 

(b)          Tenant shall deliver to Landlord certificates of
such insurance at or prior to the Commencement Date, and shall deliver to
Landlord certificates evidencing renewals thereof at least ten (10) days
prior to expiration. All such policies and certificates shall provide that such
insurance coverage may not be cancelled or the limits thereof reduced below the
required minimum limit hereinbefore set forth unless Landlord, the Property
Manager and any mortgagee named as an additional insured as aforesaid are given
at least thirty (30) days prior written notice of the same.

 

(c)          Landlord shall obtain and keep in force during
the Term of this Lease a policy or policies of property insurance covering the
improvements which comprise the Demised Premises and the Building, in an amount
of one hundred percent (100%) of full replacement cost (exclusive of the cost
of excavations, foundations and footings) providing protection against any
peril generally included in the classification “all
risk” (including, without limitation, protection against loss or damage from
the following perils: fire, lightning, windstorm, hail, explosion, riot, riot
attending a strike, civil commotion, aircraft, vehicles, smoke, vandalism,
malicious mischief and sprinkler leakage) and including earthquake coverage.
The policy or policies of Landlord’s “all
risk” property insurance described in this Article shall provide for a per
occurrence deductible of not less than $10,000.00. In addition to the policies
of “all risk” property insurance hereinbefore
provided, Landlord shall at all times maintain in respect of the Common Areas
and the Building commercial general liability insurance with limits of coverage
of not less than $3,000,000 combined single limit for bodily injury or death
and for property damage, including water damage and sprinkler leakage legal
liability. The aforesaid policies of Landlord’s insurance shall contain an
endorsement or provision that they cannot be canceled or the limits of
protection thereunder reduced below the minimum limits required under this
Lease except upon ten (10) days prior notice to Tenant. In addition,
Landlord shall submit to Tenant the appropriate certificates of insurance
evidencing such policies if so requested.

 

34

 

20.          LIABILITY.

 

(a)          Each of the parties
hereto hereby releases the other from any and all liability for any loss or
damage which may be inflicted upon the property of such party even if such loss
or damage shall be brought about by the fault or negligence of the other party,
its agents or employees. Landlord and Tenant shall cause their respective
property insurance policies to contain a clause to the effect that this release
shall not affect the policy or the right of the insured to recover thereunder.
If any such policy does not permit such a waiver, and if the party to benefit
therefrom requests that such a waiver be obtained, the other party agrees to
obtain an endorsement to its insurance policies permitting such waiver of
subrogation if it is available; provided that if an additional premium is
charged for such waiver, the party benefiting therefrom agrees to pay the
amount of such additional premium promptly upon being billed therefor.

 

(b)          Landlord agrees that,
except for loss or damage resulting from the willful acts or negligence of Tenant,
its agents or employees (while such agents or employees shall actually be
engaged in the performance of their official duties for and at the direction of
Tenant), Landlord shall indemnify and save Tenant, its agents and employees,
harmless from and against any and all claims, actions, damages, demands, liens,
costs, liability and expense, including, without limitation, reasonable
attorneys’ fees (and the costs of any deductible maintained by Tenant under its
commercial general liability insurance policy) in connection with loss of life,
personal injury or property damage arising from or out of any occurrence in or
upon any part of the Building and/or the Property. Tenant shall and does hereby
indemnify and hold Landlord, its agents and employees, harmless from and
against any and all claims, actions, damages, liabilities and expenses
(including reasonable attorneys fees) (i) in connection with any loss of
life, personal injury or damage to property in or about the Demised Premises,
or (ii) arising out of the use or occupancy of the Demised Premises by
Tenant, its agents, employees, invitees or contractors, or occasioned by
Tenant, its agents, employees, invitees or contractors (while such agents,
employees, invitees or contractors shall actually be engaged at the direction
of Tenant), unless such loss, injury or damage was caused by the negligence or
willful misconduct of Landlord, its agents or employees. Landlord’s and Tenant’s
covenants, obligations and liabilities under this Section shall survive
the expiration or earlier termination of this Lease.

 

(c)          Notwithstanding
anything to the contrary contained in this Lease, it is expressly understood
and agreed by Tenant that none of Landlord’s covenants, undertakings or
agreements are made or intended as personal covenants, undertakings or
agreements by Landlord’s partners, shareholders or trustees, or any of their
respective partners, shareholders or trustees, and any liability for damage or
breach or nonperformance by Landlord, its agents or employees or for the
negligence of Landlord, its agents or employees, shall be collectible only out
of Landlord’s interest in the Property and no personal liability is assumed by,
nor at any time may be asserted against, Landlord or its partners, shareholders
or trustees or any of its or their partners, shareholders, trustees, officers,
agents, employees, legal representatives, successors or assigns, if any; all
such liability, if any, being expressly waived and released by Tenant.
Notwithstanding anything to the contrary contained in this Lease, in no event
shall Landlord be liable to Tenant for any consequential damages, lost profits,
loss of business or other similar damages, regardless of whether the same
arises out of the

 

35

 

negligence of Landlord, its agents or
employees.

 

21.       ENVIRONMENTAL
MATTERS.

 

(a)          Landlord shall
conduct, and cause to be conducted, all operations and activity at the Property
in compliance with, and shall in all other respects applicable to the Property
comply with, all applicable present and future federal, state, municipal and
other governmental statutes, ordinances, regulations, orders, directives and
other requirements, and all present and future requirements of common law,
concerning the environment (hereinafter collectively called “Environmental Statutes”) including, without
limitation, (i) those relating to the generation, use, handling,
treatment, storage, transportation, release, emission, disposal, remediation or
presence of any material, substance, liquid, effluent or product, including,
without limitation, hazardous substances, hazardous waste or hazardous
materials, (ii) those concerning conditions at, below or above the surface
of the ground and (iii) those concerning conditions in, at or outside the
Building. Tenant shall conduct, and cause to be conducted by anyone under
Tenant’s control, all of its operations and activity at the Property in
compliance with, and shall in all other respects applicable to Tenant’s use of
the Property comply with, all applicable present and future Environmental
Statutes, including, without limitation, (i) those relating to the
generation, use, handling, treatment, storage, transportation, release,
emission, disposal, remediation or presence of any material, substance, liquid,
effluent or product, including, without limitation, hazardous substances,
hazardous waste or hazardous materials, (ii) those concerning conditions
at, below or above the surface of the ground and (iii) those concerning
conditions in, at or outside the Building.

 

(b)          Notwithstanding
anything else contained herein, Landlord represents and warrants that, except
as may be provided in the Environmental Reports (as defined herein) and to
Landlord’s actual knowledge as of the date hereof, (a) Landlord has not
caused nor permitted any activity to take place in, on or under the Demised
Premises, and/or in, on or under the Property and/or the Building, which has
generated, manufactured, refined, transported, treated, stored, handled,
disposed, transferred, produced, cleaned up or processed any “Hazardous Substances” (as such term is
hereinafter defined), except in compliance with all applicable federal, state
and local laws, regulations, ordinances and orders, and has not caused nor
expressly permitted and has no knowledge of any discharge, release, storage or
disposal of any Hazardous Substances on, in or under the Demised Premises,
and/or on, in or under the Property and/or the Building; (b) Landlord is
in compliance with all federal, state and local requirements relating to
protection of health or the environment in connection with its ownership or use
of the Demised Premises and the Property and the Building; (c) there is no
action, suit, lien or other proceeding brought or threatened by any governmental
agency against Landlord or the Demised Premises or the Property or the Building
to enforce any law, regulation, ordinance or order relating to protection of
health or the environment or any lien, litigation of other proceeding brought
or threatened against Landlord or the Demised Premises or the Property or the
Building, or any settlements reached by any person(s) or group(s) alleging the
presence, disposal, release or threatened release of any Hazardous Substances,
on or arising from any

 

36

 

activity conducted on the Demised Premises or
the Property or the Building; (d) there are no underground tanks which may
be located on or under the Demised Premises or the Property or the Building; (e) there
are no PCBs or PCB contaminated material or asbestos which me be contained in
or otherwise be present on, in or under the Demised Premises or the Property or
the Building; and (f) no asbestos or materials containing asbestos has
been, or will be, utilized in the construction of the Demised Premises or is
otherwise present therein. Notwithstanding anything in this Lease to the
contrary. Landlord will indemnify, defend and hold Tenant harmless from and
against any and all liabilities, claims, damages, penalties, expenditures,
losses or charges, including, but not limited to, all reasonable and actual
costs of investigation, monitoring, reasonable and actual costs of legal
representation, remedial response, removal, restoration or permit acquisition
from the beginning of time (said indemnity to survive the termination of this
Lease) which are suffered, paid, awarded, assessed or otherwise incurred as a
result of any contamination by Hazardous Substances existing on, in or under
the Demised Premises, and/or on, in or under the Property and/or the Building
not caused by Tenant or anyone claiming through or under Tenant. As used
herein, the term “Hazardous
Substances” shall mean any hazardous or toxic substance or material, including,
without limitation, any of the following: (i) those substances included
within the definitions of “hazardous substances,”
“hazardous materials,” “toxic substances.” or “solid
waste” in CERCLA, RCRA, and the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801 et  seq., and in the regulations promulgated
pursuant to said laws (ii) those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and any amendments thereto)
or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and any amendments thereto); (iii) such
other substances, materials and wastes which are or become regulated under
applicable local, state or federal law, or the United States government, or
which are classified as hazardous or toxic under federal, state or local laws
or regulations; and (iv) any materials, wastes or substances which is (a) asbestos,
(b) polychlorinated biphenyls, (c) designated as a “hazardous substance” pursuant to Section 311 of
the Clean Water Act, 33 U.S.C. Sections 1251 et  seq. (33 U.S.C. Section 1321)
or listed pursuant to Section 107 of the Clean Water Act (33 U.S.C. Section 1371),
(d) an explosive, (e) radioactive or (f) gasoline, diesel fuel,
kerosene or other petroleum products not properly contained in a governmental
approved underground storage tank. Should there occur any release of Hazardous
Substances at the Property in violation of any Environmental Statute, Landlord
shall immediately notify Tenant in writing and immediately contain, remove and
dispose of, such Hazardous Substances and any material that was contaminated by
the release and to remedy and mitigate all threats to human health or the
environment relating to such release. When conducting any such measures the
Landlord shall comply with all Environmental Statutes.

 

(c)          Tenant, its agents,
employees, contractors and invitees shall not cause to occur in, on or under
the Demised Premises and/or the Property any generation, use, manufacturing,
refining, transportation, emission, release, treatment, storage, disposal,
presence or handling of Hazardous Substances, except that construction
materials (other than asbestos or polychlorinated biphenyls), equipment and
cleaning solutions, and other maintenance materials that are or contain
Hazardous Substances may be used, generated, handled or stored on the Demised
Premises,

 

37

 

provided such is incident to and reasonably
necessary for the operation and maintenance of the Demised Premises for the
Permitted Use and is in compliance with all Environmental Statutes and all
other applicable governmental requirements. Should Tenant, its agents,
employees, contractors or invitees cause any release of Hazardous Substances at
the Demised Premises or the Property in violation of any Environmental Statute,
Tenant shall immediately notify Landlord in writing and immediately contain,
remove and dispose of, such Hazardous Substances and any material that was
contaminated by the release and to remedy and mitigate all threats to human
health or the environment relating to such release. When conducting any such
measures the Tenant shall comply with all Environmental Statutes.

 

(d)          Tenant will
indemnify, defend and hold Landlord harmless from and against any and all
liabilities, claims, damages, penalties, expenditures, losses or charges,
including, but not limited to, all reasonable and actual costs of
investigation, monitoring, reasonable and actual costs of legal representation,
remedial response, removal, restoration or permit acquisition from the
beginning of time (said indemnity to survive the termination of this Lease)
which are suffered, paid, awarded, assessed or otherwise incurred as a result
of any contamination by Hazardous Substances existing on, in or under the Demised
Premises, and/or on, in or under the Property and/or the Building which shall
have been caused by reason of Tenant’s breach of the provisions of Section 21 (c)
above.

 

(e)          Landlord’s and Tenant’s
covenants, obligations and liabilities under this Section 21 shall survive
the expiration or earlier termination of this Lease.

 

(f)           Landlord has
heretofore furnished to Tenant certain environmental reports listed on Exhibit “G” (the “Environmental Reports”). Tenant acknowledges that Landlord
has provided Tenant with a copy of the Environmental Reports and that Tenant
has reviewed the same.

 

22.          SUBORDINATION. This Lease is and
shall be subject and subordinate to all of the terms and conditions of all
underlying mortgages which may now or hereafter encumber the Building and/or
the Property, and to all renewals, modifications, consolidations, replacements
and extensions thereof, provided, however, that with respect to future
mortgages, this Lease shall be subject and subordinate so long as the holder of
any such mortgage shall have provided to Tenant a nondisturbance agreement
which shall provide, inter alia, that (a) Tenant’s rights under
this Lease shall not be extinguished by any foreclosure or other enforcement
proceedings (b) subject to the foregoing, the Tenant’s rights under this
Lease are subordinate to the rights of the holder of such mortgagee, and (c) Tenant
shall attorn to the holder of such mortgage. Except as provided above, this
clause shall be self-operative and no further instrument of subordination shall
be necessary. Notwithstanding the automatic subordination of this Lease, Tenant
shall execute, within thirty (30) business days after request, any certificate
that Landlord may reasonably require acknowledging such subordination so long
as such certificate shall include express reference to the nondisturbance of
Tenant as herein provided. In confirmation of the subordination and
nondisturbance set forth herein, the current lender holding a mortgage or deed
of trust covering all or any portion

 

38

 

of the Demised Premises shall enter into a
commercially reasonable subordination, non-disturbance and attornment agreement
(the “SNDA”) with Tenant and Landlord on
such lender’s customary form. If Tenant, Landlord and such lender cannot agree
upon the form of SNDA, then in all cases, Tenant, Landlord and such lender
shall execute the form of SNDA set forth in Exhibit “H”
attached hereto and by this reference incorporated herein.

 

23.          ESTOPPEL STATEMENT.  Landlord and Tenant shall from time to time,
within thirty (30) business days after request by the other party hereto,
execute, acknowledge and deliver to the requesting party a statement certifying
that this Lease is unmodified and in full force and effect (or that the same is
in full force and effect as modified, listing any instruments or
modifications), the dates to which Rent and other charges have been paid, and
whether or not, to the best knowledge the party providing such statement, the
other party hereto is in default or whether the party providing such statement
has any claims or demands against the other party hereto (and, if so, the
default, claim and/or demand shall be specified), and such other information
relating to the status of this Lease as may be reasonably requested by the
requesting party.

 

24.          RESERVATION OF LANDLORD’S RIGHTS.  Notwithstanding anything to the contrary
contained herein, Landlord explicitly reserves the following rights (subject,
however, to the applicable limitations and conditions thereon as are expressly
set forth in this Lease, and provided that Landlord agrees to use commercially
reasonable efforts not to materially interfere with Tenant’s business
operations in the Demised Premises, which shall be deemed to include, but not
limited to, performing any work hereunder outside normal business hours
provided Tenant allows Landlord to access the Demised Premises during such
times):

 

(a)          to temporarily close
doors, entrance ways, corridors or any other public areas of the Building in
connection with Landlord’s performance of its express obligations under this
Lease to decorate or to make required repairs, or permitted alterations,
additions or improvements, whether structural or otherwise, in and about the
Property, including the Building and the Common Areas, or temporarily suspend
services or the use of facilities in connection with any such work, so long as
there shall be no interruption, other than to a de minimus extent, of Tenant’s
access to the Demised Premises;

 

(b)          to regulate delivery
of supplies and the usage of common loading docks, receiving areas and freight
elevators, if any (subject, however, to the understanding that such right of
Landlord hereunder shall not extend or apply to, or otherwise affect or limit,
Tenant’s right to the exclusive use of the loading dock, receiving area and
freight elevator as hereinafter provided);

 

(c)          to enter the Demised
Premises at reasonable times during Tenant’s usual business hours when Tenant’s
management personnel are present, upon prior written notice to Tenant (Landlord
shall provide at least three (3) days prior written notice if Tenant is
forced to relocate individuals in the Demised Premises due to Landlord
exercising its rights hereunder), to inspect the Demised Premises and to make

 

39

 

repairs or alterations to the Demised Premises
or other portions of the Building (including other tenants’ premises) as
Landlord shall be required or shall have the right to make pursuant to the express
provisions of this Lease;

 

(d)          to erect, use and
maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in and
through the Demised Premises in reasonable locations, provided that Landlord
shall use reasonable efforts to avoid material interference to the conduct of
Tenant’s business operations therein;

 

(e)          to utilize the roofs,
telephone, electrical and janitorial closets, equipment rooms, building risers
and similar areas that are used by Landlord for the provision of Building services;
and

 

(f)           to show the Demised
Premises, at reasonable times during Tenant’s usual business hours when Tenant’s
management personnel are present, upon prior written notice to Tenant, to
prospective mortgagees and purchasers and, during the six (6) months prior
to expiration of the Term, to prospective tenants.

 

25.          EXPIRATION OF TERM;
HOLDING-OVER. Upon or prior to the expiration or earlier termination of this Lease,
Tenant shall remove Tenant’s goods and effects and those of any other person
claiming under Tenant, and quit and deliver up the Demised Premises to Landlord
peaceably and quietly in as good order and condition as existed at the
inception of the Term, reasonable use and wear thereof, damage from fire and
extended coverage type risks, the effects of any condemnation or taking, and
repairs which are Landlord’s obligation excepted. Goods and effects not removed
by Tenant within ten (10) days after the giving of written notice
specifying the continued presence thereof after the termination of this Lease,
however terminated, shall be considered abandoned and Landlord may dispose of
and/or store the same as it deems expedient, the reasonable and actual
out-of-pocket cost thereof to be charged to Tenant. In removing said goods and
effects, Tenant shall use commercially reasonable efforts not to interfere with
any construction being performed by Landlord in the Demised Premises. Should
Tenant continue to occupy the Demised Premises after the expiration of the
Term, including any renewal or renewals thereof, such tenancy shall (without
limitation of any of Landlord’s rights or remedies therefor) be one at
sufferance at a monthly rental equal to one hundred fifty percent (150%) of the
Rent payable for the last full month of the Term. No holdover by Tenant or
payment by Tenant after the expiration of the Term of this Lease shall be
construed to extend the Term or prevent Landlord from seeking immediate
recovery of the Demised Premises by summary proceedings or otherwise. In the
event that Landlord is unable to deliver possession of the Demised Premises to
a new tenant or to perform improvements for a new tenant as a result of any
holdover by Tenant continuing after thirty (30) days after receipt of Landlord’s
notice to vacate (which notice to vacate shall notify Tenant that its failure
to timely vacate the Demised Premises may subject the Tenant to liability for
consequential damages), Tenant shall be liable to Landlord for all damages,
including, without limitation, consequential damages, that Landlord suffers as
a result of Tenant’s holdover. Notwithstanding the foregoing, Tenant shall have
the right to extend the Term for up to one (1), two (2) or three (3) months
by providing Landlord with nine (9) months

 

40

 

written notice prior to the then Expiration
Date; provided, however, in the event Tenant does not provide such notice
within the time period set forth above, Tenant shall have the additional right
to extend the Term for one (1) month only by providing Landlord with six (6) months
written notice prior to the then Expiration Date. In either event this Lease
shall continue for such period as to which notice shall have been given, Tenant
shall have no further Renewal Options hereunder, and the Annual Base Rent for
such period shall be the amount payable immediately prior to the then
Expiration Date.

 

26.          INTENTIONALLY DELETED.

 

27.          FINANCIAL STATEMENTS. Upon the request of
any mortgagee, prospective mortgagee or prospective purchaser of the Property,
Tenant shall provide to Landlord unaudited copies of Tenant’s latest annual
financial statements (prepared in accordance with generally accepted accounting
principles), certified by an officer of Tenant to be true.

 

28.          RENT, USE AND OCCUPANCY TAX. If, during the Term,
including any renewal or extension thereof, any tax is imposed by an
appropriate governmental agency upon the privilege of renting or occupying the
Demised Premises, Tenant’s use of the Demised Premises, or upon the amount of
rentals collected therefor, and provided such tax is imposed by such
governmental agency on all tenants (and not landlords) under commercial leases
in the applicable jurisdiction in which the Property is located, then Tenant
will pay each month, as Additional Rent, a sum equal to such tax or charge that
is imposed for such month, but nothing herein shall be taken to require Tenant
to pay any income, estate, inheritance or franchise tax imposed upon Landlord.

 

29.          LANDLORD’S TITLE AND QUIET
ENJOYMENT.  Landlord represents and warrants
to Tenant that Landlord has the right and lawful authority to enter into this
Lease for the Term (inclusive of the Renewal Terms) and that Landlord is the
owner of the fee simple title of the Property, and title to the Property is,
and shall continue to be until the Commencement Date, free and clear of any
liens and encumbrances except the “Permitted Encumbrances” as set forth in Exhibit “J”. Tenant shall
quietly have and enjoy the Demised Premises during the Term of this Lease
without hindrance or molestation by anyone claiming by or through Landlord,
subject, however, to the terms, covenants and conditions contained in this
Lease.

 

30.          NOTICES.  All notices required to be given hereunder
shall be sent by registered or certified mail, return receipt requested, by
Federal Express or other nationally-recognized overnight express delivery
service providing written receipt or signed proof of delivery, to the
respective Notice Addresses set forth in Section 1 (Fundamental Lease
Provisions), and to such other person and address as each party may from time
to time designate in writing to the other by notice given in accordance with
the provisions of this Section. Notices shall be deemed to have been received
on the earlier to occur of (i) the date of actual receipt by the party to
which same shall have been addressed as herein set forth or (ii) the third
(3rd) business day next following the date upon which the same shall have been
mailed, or sent by such overnight courier, as aforesaid. For convenience
purposes only, notices may also be sent via facsimile or

 

41

 

electronic
mail; provided, however, that such notices shall not be deemed to have been
received until the same notice is also sent in accordance with the first
sentence of this Section and the time period set forth in the second
sentence of this Section shall have expired.

 

31.          EXPANSION OPTION.  So long as this Lease shall remain in full
force and effect at the time of exercise thereof by Tenant, Landlord hereby
grants Tenant the right (the “Expansion Option”)
to lease an additional 39,000 rentable square feet of space as shown on Exhibit “E” attached hereto
and made a part hereof (the “Expansion Space”),
subject to the following terms and conditions:

 

(a)          In the event that
Tenant desires to exercise the Expansion Option, Tenant shall provide Landlord
with written notice (the “Expansion Exercise Notice”)
on or before the earlier of (i) the date that is ten (10) days after
Landlord provided written notice to Tenant that it has found a party interested
in leasing such space or (ii) the expiration of the second (2nd) Lease
Year (the “Exercise Deadline”) of Tenant’s
election to exercise the Expansion Option; provided, however, that,
notwithstanding the foregoing, in the event that Tenant shall have elected not
to provide Landlord with an Expansion Exercise Notice pursuant to the
provisions of clause “i” hereinbefore and Landlord ultimately does not enter
into a lease for such space with such interested party, then Tenant’s rights to
the Expansion Option under this Section 31 (a) shall be reinstated
and Landlord shall be obligated to give another such notice to Tenant at such
time prior to the expiration of the second (2nd) Lease Year as
Landlord shall again have found a party interested in leasing such space (with
the further understanding that such reinstatement shall also continue to apply
in any such subsequent situation where Landlord ultimately does not enter into
a lease for such space with such subsequent interested party).

 

(b)          In the event Tenant
elects to lease the Expansion Space by giving Landlord written notice pursuant
to Section 31 (a) herein, then all other terms and conditions of the
Lease shall apply to the Expansion Space except that (i) the Annual Base
Rent with respect to Expansion Space for the balance of the Initial Term shall
be as determined by subparagraph (c) below; (ii) the Annual Base Rent
with respect to Expansion Space for any Renewal Term, if applicable, shall be
at the same base rental rate (on a dollars per square foot basis) payable with
respect to the balance of the Demised Premises pursuant to Section 1(f) hereof;
(iii) Tenant’s Fraction with respect to Operating Expenses shall be
increased to take into account the additional square footage of the Expansion
Space and all other figures in the Lease affected by the addition of such
square footage shall be adjusted accordingly; and (iv) Tenant shall not be
entitled to any allowances, credits, options or other concessions with respect
to the Expansion Space, except as follows: Landlord shall provide a
contribution toward the cost of constructing improvements to the Expansion
Space (with the amount of such contribution be calculated by applying to the
rentable square footage of the Expansion Space the same amount per rentable
square foot as the amount of the Budgeted Total TI Costs provided for in Section 3(c) hereinabove
applied to the rentable square footage of the original Demised Premises
(appropriately decreased based on the amount of time remaining in the Term
i.e., the rate per square foot of rentable square footage of the

 

42

 

Demised Premises applicable to the original
Budgeted Total TI Costs shall be pro-rated using a fraction, the numerator of
which shall be the number of months remaining in the Initial Term from and
after the date of the giving of the Expansion Exercise Notice and the
denominator of which shall be the total number of months contained within the
Initial Term.

 

(c)          Commencing on the “Expansion Space Commencement Date” (as such term is
hereinafter defined), the Annual Base Rent payable with respect to the
Expansion Space during the remainder of the Initial Term shall be: Seventeen
Dollars ($17.00) per rentable square foot for the first 30,000 rentable square
feet (or total rentable square feet remaining in the Building less 9,000
rentable square feet, whichever is less) and Nine Dollars ($9.00) per rentable
square foot for the remaining 9,000 rentable square feet, each of which amounts
shall increase by One Dollar ($1.00) per rentable square foot every three (3) years
during the remainder of the Initial Term commencing on date which is (i) the
third (3rd) anniversary of the Expansion Space Commencement Date, if the
Expansion Space Commencement Date is the first day of a calendar month, or (ii)
the first day of the calendar month next following the third (3rd) anniversary
of the Expansion Space Commencement Date, if the Expansion Space Commencement
Date is any day other than the first day of a calendar month.

 

(d)          Except for any
allowances set forth in Section 31(b)(iv) herein and the minimum base
building work to be performed by Landlord pursuant to Exhibit “M”
attached hereto, Tenant shall perform, at its sole cost and expense, all
improvements which Tenant deems necessary or desirable for Tenant’s initial
occupancy thereof, which improvements shall be subject to the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
conditioned, or delayed. All contractors utilized for the performance of such
improvements shall be subject to the prior written approval of Landlord (which
approval shall not be unreasonably withheld, conditioned or delayed), and all
work shall be performed in accordance with the Expansion Plans (as hereinafter
defined) in a good and workmanlike manner and in accordance with all applicable
laws. Prior to the commencement of any work within the Expansion Space, Tenant
shall submit to Landlord, for Landlord’s prior approval, proposed plans and
specifications (the “Proposed Expansion Plans”)
for Tenant’s proposed improvements to the Expansion Space, which plans shall be
prepared by a registered architect licensed to do business within the State in
which the Property is located. The Proposed Expansion Plans shall include all
information and specifications necessary for Landlord to fully review the work
described therein and shall conform to all applicable laws and requirements of
public authorities and insurance underwriters’ requirements. If Landlord
disapproves the Proposed Expansion Plans in accordance with the foregoing
provisions of this Section, Landlord shall state specifically the reasons for
such disapproval, and Tenant shall cause its architects to promptly make any
changes in the Proposed Expansion Plans reasonably required by Landlord. The
Proposed Expansion Plans, as finally approved by Landlord, are referred to
herein as the “Expansion Plans”. All work
described in the Expansion Plans is referred to herein as the “Expansion Space Improvements”.

 

(e)          In the event that
Tenant exercises the Expansion Option in

 

43

 

accordance
with this Section, the term of this Lease as it relates to Expansion Space
shall commence on the earlier of; (i) Tenant’s occupancy of all or any
portion of the Expansion Space for the conduct of Tenant’s business, and (ii) one
hundred eighty (180) days after the delivery of the Exercise Notice (the “Expansion Space Commencement Date”) and shall expire
coterminous with the Expiration Date of this Lease. Notwithstanding the
foregoing, if the Expansion Space Commencement Date has not occurred because of
the holding over or retention of possession of any tenant or occupant, or for
any other reason, Landlord shall not be subject to any liability to Tenant,
but, in any event, the 180-day period set forth in clause (ii) of the
preceding sentence shall not commence until the Expansion Space is delivered to
the Tenant.

 

(f)           In the event that
Tenant exercises the Expansion Option in accordance with this Section, Landlord
and Tenant shall, within forty-five (45) days thereafter, execute an amendment
to this Lease memorializing Tenant’s lease of the Expansion Space under the
terms set forth herein. Tenant shall commence payment of Rent with respect to
the Expansion Space as of the Expansion Space Commencement Date.

 

(g)          If Tenant fails to
exercise its Expansion Option strictly in accordance with the provisions of
this Section, then Landlord shall have the right to lease such Expansion Space
to any other party(-ies) with no further obligation to lease such space to
Tenant pursuant to the terms of this Section.

 

(h)          In the event that
Tenant have elected not to provide Landlord with an Expansion Exercise Notice
pursuant to the provisions of Section 31 (a) and Landlord shall
subsequently arrive at agreement on final terms of a proposed lease with the
party interested in leasing such space in respect of which Landlord had given
written notice to Tenant pursuant to the provisions of clause “i” of Section 31
(a), then Landlord shall give Tenant a Written Proposal setting forth such
final terms of agreement and Tenant shall thereupon have the same rights to
lease such space pursuant to the provisions of Section 33 as if the same
were deemed “First Refusal Space” thereunder. Notwithstanding the foregoing, in
the event Tenant elects to lease the Expansion Space on the terms and
conditions set forth in such Written Proposal in the event that after having
elected not to provide Landlord with an Expansion Exercise Notice pursuant to
the provisions of Section 31 (a) Tenant shall subsequently elect to
lease the Expansion Space pursuant to the provisions of Section 33, then
the terms and conditions of the Lease as they relate to the Expansion Space
shall be governed by Section 33 herein.

 

32.          RIGHT OF FIRST OFFER.  So long as this Lease shall remain in full
force and effect at the time of exercise thereof by Tenant, Tenant shall have a
one-time right of first offer (the “Right of First Offer”)
to lease other previously leased space available in the Building (the “First Offer Space”) after the Exercise Deadline, upon the
following terms and conditions:

 

(a)          In the event that
Landlord anticipates that all or any portion of the First Offer Space may become
available during the Term after the Exercise Deadline, Landlord shall give
Tenant written notice of the availability of all or such portion of the

 

44

 

First Offer Space, as the case may be (the “Offered Space”), setting forth the following terms and
conditions (the “Landlord’s  Availability
Notice”): (i) the Annual Base Rental rate for the Offered Space
shall equal to the Annual Base Rent for the remainder of the Demised Premises
as set forth in Section 1(f) hereinabove; and (ii) the Term for
the Offered Space will be co-terminous with the remainder of the Demised
Premises. If Tenant shall elect to lease the Offered Space, then within twenty
(20) days after Tenant’s receipt of Landlord’s Availability Notice, Tenant must
give Landlord written notice (the “First Offer Exercise
Notice”) pursuant to which Tenant shall elect to lease the entire
Offered Space on the terms and conditions set forth in Landlord’s Availability
Notice. If Tenant fails to give such First Offer Exercise Notice within such
twenty (20) day period, then Tenant shall be deemed to have declined to lease
the Offered Space at the time of the giving of such Landlord’s Availability
Notice; and in such event; then Landlord shall be free to lease the Offered
Space to any other party(ies) without any further obligation to Tenant
hereunder; however, Tenant shall retain its first offer rights hereunder with
respect to any part of the First Offer Space (i) that was not covered by
Landlord’s Availability Notice and (ii) that was not covered by any
previous Landlord’s Availability Notice.

 

(b)          If Tenant elects to
lease the Offered Space in accordance with subparagraph (a) above (upon
such election, the “Additional Space”),
then Landlord and Tenant shall execute an amendment to the Lease to provide for
the inclusion of the Additional Space under the terms and conditions set forth
in Landlord’s Availability Notice. Except as provided in Landlord’s
Availability Notice, all other terms and conditions of the Lease shall apply to
the Additional Space except that: (i) Tenant’s Fraction with respect to
Operating Expenses shall be increased to take into account the square footage
of the Additional Space and all other terms of the Lease affected by the
addition of such square footage shall be adjusted accordingly, (ii) Landlord
shall not be required to perform any improvements to the Additional Space
unless specifically provided for in Landlord’s Availability Notice, and (iii) Tenant
shall not be entitled to any allowances, credits, options or other concessions
with respect to the Additional Space unless specifically provided for in
Landlord’s Availability Notice.

 

(c)          The effective date of
the addition of the Additional Space to the Demised Premises shall be the date
that Landlord delivers possession of the Additional Space to Tenant in
accordance with the terms of Landlord’s Availability Notice.

 

(d)          Except as otherwise
provided in Landlord’s Availability Notice, Tenant agrees to accept the
Additional Space in its “AS IS” condition, in the then current physical state
and condition thereof, without any representation or warranty by Landlord.

 

33.          RIGHT OF FIRST REFUSAL.  So long as this Lease shall remain in full
force and effect at the time of exercise thereof by Tenant, and provided Tenant
has been deemed to have declined to lease the Offered Space as provided for in Section 32
herein, then Tenant shall have a right of first refusal to lease other
previously leased space available in the Building (the “First
Refusal Space”) after the Exercise Deadline, upon the following
terms and conditions:

 

45

 

(a)          In the event that
Landlord receives or intends to send a written offer to lease all or any
portion of the First Refusal Space (the “First Refusal Offered
Space”) to any third party during the Term, Landlord shall provide
Tenant with a copy of said proposal (the “Written Proposal”),
which Written Proposal shall set forth the terms and conditions (including,
without limitation, the rental rate and the duration of the proposed term,
etc.) upon which Landlord is willing to lease the First Refusal Offered Space.
Within ten (10) days after Tenant’s receipt of the Written Proposal,
Tenant must give Landlord written notice pursuant to which Tenant shall elect
either: (i) to lease the entire First Refusal Offered Space on the terms
and conditions set forth in the Written Proposal, or (ii) to decline to
lease the First Refusal Offered Space. If Tenant fails to elect clause (i) within
such ten (10) day period, then Tenant shall be deemed to have declined to
lease the First Refusal Offered Space. In the event that Tenant declines (or s
deemed to have declined) to lease the First Refusal Offered Space, then
Landlord shall be free to lease the First Refusal Offered Space to any other
party(ies) without any further obligation to Tenant hereunder; however, Tenant
shall retain its first refusal rights hereunder with respect to any part of the
First Refusal Space that was not: (i) covered by the Written Proposal; or (ii) covered
by any previous Written Proposal.

 

(b)          If Tenant elects to
lease the First Refusal Offered Space in accordance with subparagraph (a) above
(upon such election, the “First Refusal Additional
Space”), then Landlord and Tenant shall execute an amendment to the
Lease to provide for the inclusion of the First Refusal Additional Space under
the terms and conditions set forth in the Written Proposal. Except as provided
in the Written Proposal, all other terms and conditions of the Lease shall
apply to the First Refusal Additional Space except that: (i) Tenant’s
Fraction with respect to Operating Expenses shall be increased to take into
account the square footage of the First Refusal Additional Space and all other
terms of the Lease affected by the addition of such square footage shall be
adjusted accordingly; (ii) Landlord shall not be required to perform any
improvements to the First Refusal Additional Space unless specifically provided
for in the Written Proposal; and (iii) Tenant shall not be entitled to any
allowances, credits, options or other concessions with respect to the First
Refusal Additional Space unless specifically provided for in the Written
Proposal.

 

(c)          The effective date of
the addition of the First Refusal Additional Space to the Demised Premises
shall be the date that Landlord delivers possession of the First Refusal
Additional Space to Tenant in accordance with the terms of the Written
Proposal.

 

(d)          Except as otherwise
provided in the Written Proposal, Tenant agrees to accept the First Refusal
Additional Space in its “AS IS” condition, in the then current physical state
and condition thereof, without any representation or warranty by Landlord.

 

(e)          Notwithstanding
anything herein to the contrary, Tenant’s Right of First Refusal hereunder is
subject to all expansion, extension, renewal, first offer, first refusal and
other rights to lease, as applicable, which Landlord (or any predecessor to
Landlord’s interest in the Property) has granted to other tenants of the Building
prior to

 

46

 

the date of this Lease. Thus, Landlord’s Written
Proposal will be delivered to Tenant only after Landlord has appropriately
notified and received negative responses from all other tenants with rights in
the First Refusal Space superior to Tenant’s.

 

34.          RENEWAL OPTIONS.  Except if Tenant elects to extend the term in
accordance with Section 25 hereinabove, Tenant shall have the option to
extend the Term for two (2) separate, consecutive renewal periods of five (5) years
each (each, a “Renewal Option”), under and
subject to the following terms and conditions:

 

(a)          The first renewal
term (the “First Renewal Term”) shall be for a
five (5) year period commencing on the day immediately following the
expiration date of the Initial Term and expiring at midnight on the day immediately
preceding the fifth (5th) anniversary thereof. The second renewal term (the “Second Renewal Term”) shall be for a five (5) year
period commencing on the day immediately following the expiration date of the
First Renewal Term and expiring at midnight on the day immediately preceding
the fifth (5th) anniversary thereof. The First Renewal Term and the Second
Renewal Term are collectively referred to as the “Renewal
Terms”. If Tenant fails to exercise any Renewal Option, all
subsequent Renewal Options shall be null and void and of no further force and
effect.

 

(b)          Tenant must exercise
each Renewal Option, if at all, by written notice to Landlord delivered at
least seven (7) months prior to the expiration date of the then current
Term of this Lease; provided, however, that in order to avoid any forfeiture or
inadvertent lapse of any right to extend or renew as aforesaid, if Tenant shall
not have given notice of such election to Landlord by such date in respect of
any Renewal Term and shall not have given Landlord prior written notice of
intention not to extend or renew as aforesaid, then Tenant’s right to exercise
such option shall nevertheless continue, as shall its tenancy hereunder (under
the same terms and conditions as theretofore in effect and notwithstanding that
the Lease Term shall have expired), until the date which is ten (10) business
days after Landlord shall have given notice to Tenant that Tenant has failed to
give its notice of such election, and Tenant’s time to give notice of such
election shall continue until the expiration of such ten (10) business day
period after the giving of such notice from Landlord. Upon the giving of notice
of renewal and extension in accordance with the foregoing provisions of this
Section, the Term shall thereupon be renewed and extended for such Renewal Term
in accordance with such notice without further act by Landlord or Tenant, the
same as if such notice had been timely given hereunder. Notwithstanding the
foregoing, within ten (10) days after the request of either party after
the exercise of any of said options, Landlord and Tenant shall execute,
acknowledge and deliver to each other duplicate originals of an agreement in
recordable form confirming the extension of the Term for the Renewal Term.

 

(c)          Intentionally
Deleted.

 

(d)          Each Renewal Term
shall be on the same terms and conditions contained in this Lease, except that (i) the
Annual Base Rent shall be as specified in Section 1(f) hereinabove
with respect to the applicable Renewal Term, and (ii) Tenant

 

47

 

shall not be entitled to any allowances or
other concessions with respect to the Renewal Terms except for a tenant
improvement allowance of Ten Dollars ($10.00) per rentable square foot of the
then-leased Demised Premises at the commencement of each Renewal Term, which
must be used towards improvements (including, without limitation, cosmetic
refurbishment) to the Demised Premises (which (if required under Section 10)
are approved by Landlord in writing, such approval not to be unreasonably
withheld, conditioned or delayed) and shall be paid to Tenant after receipt of
invoices and lien waivers related to such improvements.

 

(e)          Except for the
specific Renewal Options set forth above, there shall be no further privilege
of renewal.

 

35.          SATELLITE EQUIPMENT.  Tenant, at Tenant’s sole cost and expense,
shall have the non-exclusive right to locate a satellite dish and related
communications equipment (collectively, the “Satellite Equipment”) on the roof of the Building in a location reasonably approved by
Landlord, but in no event to exceed 100 square feet of roof area. All roof work
shall be coordinated with Landlord’s roofing contractor and all plans for
equipment and installation shall be subject to the review and approval of
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned provided that the installations are properly designed to limit
potential damage or excessive stress of the roof areas and that the proposed
Satellite Equipment is for the use of the Tenant in the normal course of its
business. Should Landlord have a roof bond in effect, Tenant shall utilize
Landlord’s roofing contractor for any roof penetrations necessary for
installation; provided that such roofing contractor’s charges for such work
shall be reasonably competitive with the prevailing rates therefor in the area
in which the Building is located. Tenant acknowledges that Landlord’s review
and approval of any plans for the Satellite Equipment shall not constitute an
acknowledgement by Landlord that, without limitation, the proposed Satellite
Equipment complies with all applicable laws and requirements, will not damage
the roof areas, or will not cause any Interference (as hereinafter defined),
all of which shall be Tenant’s responsibility to ensure notwithstanding any
approval by Landlord as to such plans. All costs directly relating to the
Satellite Equipment shall be borne solely by Tenant, including, without
limitation, all costs related to: (i) the installation of the Satellite
Equipment, including all required permits and approvals therefor; (ii) the
operation, maintenance, repair and/or replacement of the Satellite Equipment
throughout the Term; (iii) all utilities (including consumption and
installation costs); (iv) compliance with all applicable legal
requirements of governmental authorities; (v) taxes levied on the
Satellite Equipment, if any; (vi) removal of the Satellite Equipment upon
the expiration or earlier termination of this Lease and the repair of any
damage occasioned thereby; (vi) repairs to the roof caused by the
Satellite Equipment or installation thereof. The operation of Satellite
Equipment shall not cause any interference to: (i) the Building or the
operation thereof; (ii) the equipment of Landlord and any tenants,
licensees or occupants which are in existence prior to the date of Tenant’s
installation of its Satellite Equipment; or (iii) the reception or
transmission of communication signals by or from any antenna, satellite dishes
or similar equipment installed by Landlord or any tenants, licensees or
occupants that have been installed prior to the date of Tenant’s installation
of its Satellite Equipment (collectively, “Interference”).
In the event of any such Interference, Tenant

 

48

 

shall, within forty-eight (48) hours after
written notice from Landlord specifying in reasonable detail the nature of such
interference, fully remedy such interference at Tenant’s sole cost and expense,
and Tenant shall further indemnify, defend and hold Landlord, its agents and
employees harmless from and against any and all claims, demands, liabilities,
costs and expenses (including, without limitation, reasonable attorney’s fees)
suffered or incurred by Landlord directly arising out of or in any way directly
related to Tenant’s use and operation of the Satellite Equipment. Upon the
expiration or earlier termination of this Lease, Tenant shall remove all
Satellite Equipment and repair all damage occasioned thereby, which obligation
shall survive the expiration or earlier termination of the Lease. In the event
that any of the Satellite Equipment is not so removed within fifteen (15) days
after notice from Landlord to Tenant after such expiration or earlier
termination of this Lease or any damage caused by the removal is not so
restored, the Satellite Equipment shall be considered abandoned and Landlord
may use, remove, dispose of, and/or store the Satellite Equipment, or repair
such damage, as Landlord determines in its sole discretion, the cost of such
removal, disposal, storage and/or repair to be charged to Tenant,
Notwithstanding the provisions of Section 13 to the contrary, Tenant shall
not separately sublease any portion of the roof area utilized by Tenant
hereunder to any unaffiliated third parties (subject, however, to the
understanding that any subtenant of Tenant occupying the Demised Premises or
any portion thereof under a sublease entered into pursuant to the provisions of
Section 13 hereof shall be entitled to similar rights hereunder with
respect to the installation, use and operation of Satellite Equipment as
hereinbefore provided in this Section).

 

36.          SPACE PLANNING, DESIGN AND CONSTRUCTION
DOCUMENTS. Landlord shall reimburse Tenant for Tenant’s actual and reasonable
architect/design firm costs, such amount not to exceed $0.10 per rentable
square foot of the Demised Premises. The foregoing amount shall be paid to
Tenant upon the later of: (i) thirty (30) days of receipt of an invoice
for same; and (ii) the Commencement Date.

 

37.          PARKING. Landlord shall
provide Tenant, throughout the Term, with the use of up to 580 parking spaces
within the parking area (the “Parking Area”)
at the Property, of which 20 parking spaces shall be reserved for Tenant’s
exclusive use, 14 parking spaces shall be reserved for handicapped use, and the
balance of such parking spaces shall be non-reserved. The reserved and
handicapped parking spaces shall be located in the area identified on Exhibit “F” attached hereto,
and the non-reserved parking spaces shall be located in the general parking
area at the Property as the same is also shown on Exhibit “F”.
Subject to governmental laws and ordinances, Landlord shall identify the
aforementioned reserved parking spaces by appropriate signage as being reserved
for Tenant’s use and shall take all reasonable action as shall be necessary in
order to enforce Tenant’s exclusive rights with respect to such reserved
parking spaces. Landlord shall keep and maintain the Parking Area and the other
Common Areas in good condition and repair, including, without limitation:
repairing and replacing paving; keeping the Parking Area and the other Common
Areas properly policed, drained, free of snow, ice, water, rubbish and other
obstructions, and in a neat, clean, orderly and sanitary condition; keeping the
Parking Area and the other Common Areas suitably lighted during, and for
appropriate periods before and after, Tenant’s

 

49

 

business hours; maintaining signs, markers,
painted lines and other means of pedestrian and vehicular traffic control;
maintaining adequate roadways, entrances and exits; maintaining any plantings
and landscaped areas; and keeping the Parking Area and the other Common Areas
properly policed (the costs of such services to be performed by Landlord shall
be included in Operating Expenses and subject to reimbursement by Tenant with
respect to Tenant’s obligation to pay Tenant’s Share of Increases in Operating
Expenses as provided in Section 7 herein). Except as otherwise expressly
provided herein (including without limitation, Section 2 above), the
parking spaces in the Parking Area shall be used for the parking of private
automobiles of tenants, subtenants and licensees of the Building and their
officers, employees, agents, customers and invitees, and for no other purpose,
and the access, perimeter and through roads, streets and drives shall be used
for pedestrian and vehicular traffic and no other purpose. Landlord shall
maintain the Parking Area at all times throughout the Term in accordance with
applicable code. Landlord shall indemnify Tenant, and hold Tenant harmless
against, any and all claims for personal injury, death and property damage
occurring in the Parking Area and/or in the other Common Areas. Landlord shall
not exact any charge or permit others to exact any charge for parking in the
Parking Area by tenants, subtenants or licensees in the Building and their
officers, employees, agents, customers and invitees. Landlord shall not permit any advertisements or signs in the Parking
Area and/or in the other Common Areas except for traffic control signs and
signs required by governmental authorities (i.e., handicap parking signs) and
reserved spaces signs for tenants of the Building. Landlord shall not permit
any merchandise to be sold or displayed, or any loudspeakers to be operated, in
the Parking Area and/or in the other Common Areas.

 

38.          EXTERIOR S1GNAGE.  Tenant shall have the right, at Tenant’s sole
cost and expense, to install and maintain identification signage with Tenant’s
name on the exterior of the Building (the “Exterior Signage”),
subject to the following terms and conditions: (i) the size, location, content
and illumination of the Exterior Signage shall be subject to Landlord’s prior
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed) and shall not violate any historical certification limitations; (ii) prior
to the installation of any Exterior Signage, Tenant shall deliver to Landlord
complete plans for the installation of such Exterior Signage for Landlord’s
review and approval; (iii) prior to the installation such Exterior
Signage, Tenant shall obtain all required municipal and other governmental
approvals therefor and shall submit copies of the same to Landlord, provided
that Landlord agrees to cooperate with Tenant, at no cost to Landlord, in
respect of the procurement of such governmental approvals and in furtherance
thereof Landlord shall, upon the request of Tenant, promptly execute or join in
the execution of any applications for such permits and licenses as may be
necessary in connection with such procurement, provided that Landlord shall not
be obligated to incur any costs as a result of such applications; (iv) Tenant
shall repair all damage to the Building caused by the installation of such
Exterior Signage; (v) Tenant shall repair and maintain the Exterior
Signage in good condition and in accordance with all applicable laws and
requirements throughout the Term; (vi) if any Exterior Signage is
illuminated, Tenant shall be solely responsible for all utility costs
(including installation and consumption costs) for such illuminated Exterior
Signage; and (vii) upon the expiration or earlier termination of this
Lease, Tenant shall remove the

 

50

 

Exterior Signage and shall repair all damage
occasioned thereby, which obligation shall survive the expiration or earlier termination
of this Lease. In the event that any Exterior Signage is not so removed within
fifteen (15) days after notice from Landlord to Tenant after such expiration or
earlier termination of this Lease or any damage caused by the removal is not so
restored, Landlord may remove and dispose of such Exterior Signage, and/or
repair such damage, as Landlord determines in its sole discretion, the cost of
such removal, disposal and repair to be charged to Tenant. Tenant may insure
such Exterior Signage for its own benefit and at its own expense, and Tenant
shall maintain all such Exterior Signage in good condition and repair and may
replace or remove any or all such signs at any time during the term of this
Lease. Landlord shall not permit any obstruction of visibility to Tenant’s
Exterior Signage. Landlord further agrees that it will not place or erect, nor
will it permit anyone to place, erect or maintain, any sign upon the exterior
walls of the Demised Premises and Landlord agrees that it shall not affix, nor shall
Landlord permit or suffer any other party (including, without limitation, any
other tenant or occupant of other portions of the Building) to affix any
sign(s) to the roof of the Building), It is expressly understood and agreed
that, while this Lease remains in full force and effect, no other tenant or
occupant of the Building or the Property shall be entitled to place signage
upon the exterior of the Building or elsewhere in any exterior areas of the
Property, nor shall Landlord place or install any signage upon the exterior of
the Building or elsewhere in any exterior areas of the Property identifying any
other such tenant or occupant. Notwithstanding anything to the contrary
contained herein, it is understood and agreed that in the event that Landlord
shall at any time provide monument or similar signage identifying the Building
and/or the Property, the same shall prominently include Tenant’s name.

 

39.          INCENTIVE PAYMENT.  Landlord shall pay Tenant Four Million Five
Hundred Thousand Dollars ($4,500,000.00) upon the earlier of (i) Tenant’s
occupancy of the Demised Premises; and (ii) May 1, 2006.

 

40.          INTENTIONALLY DELETED.

 

41.          BUILDING DIRECTORY SIGNAGE. Landlord, at
Landlord’s sole cost and expense, shall provide and maintain throughout the
Term signage identifying Tenant and up to five (5) of Tenant’s offices,
departments and other informational categories as Tenant shall specify to
Landlord from time to time during the Term on all directory signage located at
the Building.

 

42.          NO RELOCATION. Notwithstanding
anything to the contrary contained in this Lease, it is expressly understood
and agreed that Landlord shall have no rights hereunder to relocate Tenant (or
any subtenant of Tenant) from all or any portion of the Demised Premises to any
other location within the Building or elsewhere.

 

43.          TENANT’S EXCLUSIVE LOADING DOCK,
RECEIVING AREA AND FREIGHT ELEVATOR.  Notwithstanding
anything to the contrary contained in this Lease, it is understood and agreed
that throughout the Term Tenant, at no additional cost to Tenant hereunder,
shall have exclusive use of the loading dock, receiving area and freight
elevator shown on Exhibit “K”
attached hereto, with such use to be

 

51

 

available to Tenant on a 24 hour per day, seven
day per week basis (except for those periods of time when the use of such
loading dock, receiving area and freight elevator may be unavailable to Tenant
in order for Landlord to carry out its repair and maintenance obligations
hereunder and as may be restricted by governmental authority). Notwithstanding
such exclusive use by Tenant, it is further understood and agreed that such
loading dock, receiving area and freight elevator shall be maintained and
repaired by Landlord in the same manner as if the same had remained Common
Areas with the cost of such maintenance and repair included in Operating
Expenses; provided, however, that, notwithstanding the foregoing, it is
understood and agreed that, for the purposes of calculating “Tenant’s Share of Increases
in Operating Expenses” pursuant to the provisions of Section 7(a) above,
Tenant shall be required to pay one hundred percent (100%) of the cost of all
increases in such costs to maintain and repair such exclusive loading dock,
receiving area and freight elevator over the costs thereof for the Base Year
(rather than a Tenant’s Share thereof based on Tenant’s Fraction, as the same
applies to all other Increases in Operating Expenses).

 

44.          MOVING OF TENANT’S PROPERTY IN
BUILDING.  Notwithstanding anything to the
contrary contained in this Lease, it is understood and agreed that throughout
the Term Tenant shall have the right to move its property into and out of the
Building at any hour without any additional charges for porters or security or
otherwise; provided, however, Tenant shall use commercially reasonable efforts
not to interfere with other tenants use and enjoyment of the Property, or with
Landlord’s operations at the Property.

 

45.          BUILDING SECURITY SYSTEMS.  Landlord agrees that at all times during the
Term it shall provide and maintain throughout the Building, a fire and smoke
sensor and alarm system electronically monitored on a 24 hour per day, 365 day
per year basis (the cost of which services shall be included in Operating
Expenses and subject to reimbursement by Tenant with respect to Tenant’s
obligation to pay Tenant’s Share of Increases in Operating Expenses as provided
in Section 7 herein).

 

46.          ENERGY MANAGEMENT SYSTEM.  Landlord agrees that at all times during the
Term it shall provide and maintain throughout the Building a computerized
energy management system which shall function on a 24 hour per day, 365 day per
year basis, access and control of which system shall be provided to Tenant (the
cost of which services shall included in Operating Expenses and be subject to
reimbursement by Tenant with respect to Tenant’s obligation to pay Tenant’s
Share of Increases in Operating Expenses as provided in Section 7 herein).

 

47.          RESTRICTIONS ON USE OF TENANT’S TRADE
NAMES. Notwithstanding anything to the contrary contained in this Lease, Tenant
shall have absolute, sole and complete control over the use of the name “Lenox”
and over the use of any other tradenames or trademarks (and any logos and
insignias) used in connection with the business of Tenant and/or its parent
and/or of any subsidiaries or affiliates of Tenant and/or its parent; and
neither Landlord nor its affiliates, its mortgagees or any merchants’
association or any other entity not solely controlled by Tenant and/or its
parent and/or any subsidiaries or affiliates of Tenant and/or its parent,

 

52

 

shall at any time prior to, during or after the
term of this Lease use any of such tradenames, trademarks, logos or insignias
in any manner without Tenant’s prior written consent in each instance (which
consent may be given or withheld by Tenant in Tenant’s sole and absolute
discretion), except that Landlord shall have the right to list “Lenox” as one
of Landlord’s tenants in its promotional materials and to utilize photographs
of the Building, including Tenant’s exterior signage, if any, on the Building,
in its promotional materials, provided, however, in no event will Landlord name
or otherwise identify the Building as the “Lenox Building” or by any similar
name.

 

48.         WAIVER OF
DISTRAINT. Landlord hereby expressly waives any and all rights granted by or under
any present or future laws to levy or distrain for rent, in arrears, in advance
or both, upon all goods, merchandise, equipment, fixtures, furniture and other
personal property of Tenant or any subtenant or licensee of Tenant in the
Demised Premises, delivered or to be delivered thereto.

 

49.          INTENTIONALLY DELETED.

 

50.          INTENTIONALLY DELETED.

 

51.          CONSENT OR APPROVAL OF LANDLORD AND
TENANT.

 

(a)          Except as otherwise
set forth in this Lease, whenever the consent or approval of Landlord is
referred to or is a condition precedent to the taking of any action by Tenant,
Landlord covenants not to unreasonably withhold, condition or delay such consent
or approval. Whenever Tenant is required under this Lease to do anything to the
satisfaction of Landlord, the reasonable satisfaction of Landlord shall be
deemed sufficient.

 

(b)          Except as otherwise
set forth in this Lease, whenever the consent or approval of Tenant is referred
to or is a condition precedent to the taking of any action by Landlord, Tenant
covenants not to unreasonably withhold, condition or delay such consent or
approval. Whenever Landlord is required under this Lease to do anything to the
satisfaction of Tenant, the reasonable satisfaction of Tenant shall be deemed
sufficient.

 

52.          RENT
NOTICES. If the ownership of the Demised Premises or the name or address of the
party entitled to receive the rent shall be changed, Tenant may, until receipt
of proper notice of such change from the party entitled to receive the rent
immediately preceding such change, continue to pay the rent and additional rent
to the party to which, and in the manner in which, the last preceding
installment of rent was paid, and such payments shall be deemed made to
Landlord until Tenant receives proper notice of such change.

 

53.          WAIVER.  Failure on the part of either party to
complain of any action or non-action on the part of the other party, no matter
how long the same may continue, shall not be deemed to be a waiver by either
party of any of its rights hereunder. No waiver at any time of any of the
provisions hereof by either party shall be construed as a waiver of any of the
other provisions hereof, and a waiver at any time of any of the

 

53

 

provision(s) hereof shall not be construed as a
waiver at any subsequent time of the same provision(s). The consent or approval
of either party to or of any action by the other party requiring consent or
approval of the first party shall not be deemed to waive or render unnecessary
such consent or approval to or of any subsequent similar act by said party

 

54.          SUCCESSORS AND ASSIGNS.  The provisions of this Lease, except as herein
otherwise specifically provided, shall extend to, bind and inure to the benefit
of the parties hereto and their respective personal representatives, heirs,
successors and assigns.

 

55.          LANDLORD’S DEFAULT OR FAILURE.  If Landlord shall be in default hereunder and
such failure continues for more than thirty (30) days after written notice
(except that only reasonable notice based on the circumstances need be given in
case of emergency) thereof from Tenant (or, if the default is of such a nature
that it cannot reasonably be cured within such thirty (30) day period, then
Landlord shall be entitled to such additional time as may be reasonably
necessary to cure such default so long as Landlord diligently continues to cure
such default), then, Tenant shall have the right, but not the obligation, to
cure such default, and to recover from Landlord all reasonable out of pocket
costs thereof (including any reasonable attorneys’ fees) incurred by Tenant
(plus interest at the Prime Rate) which were necessary to cure such default
(the “Cure Costs”). Tenant shall provide
Landlord with all back-up information reasonably requested by Landlord with
respect to Tenant’s Cure Costs. If Landlord fails to pay Tenant’s Cure Costs
within thirty (30) days after Tenant’s written request for payment and receipt
by Landlord of the back-up documentation reasonably requested by Landlord, then
Tenant shall have the right to setoff any amounts which are not the subject of
a bona fide, good faith dispute by Landlord against the next installment(s) of
Base Rent payable by Tenant hereunder; provided, however, that in no event
shall the amount setoff by Tenant in any calendar month exceed fifteen percent
(15%) of the Base Rent payable by Tenant for such calendar month. Nothing
herein shall be construed as a waiver by Landlord of Landlord’s right to
contest the validity of any amounts setoff by Tenant pursuant to this Section,
and Landlord expressly reserves all rights and remedies available to Landlord
hereunder for any amounts improperly setoff by Tenant pursuant to this Section.

 

56.          INTENTIONALLY DELETED.

 

57.          OTHER USES OF BUILDING. Landlord agrees that,
except as otherwise expressly permitted by Tenant in writing, at all times
during the Term, it shall not permit any of the following uses within the
Building: (i) repair or service center, (ii) bingo, lotto, off-track
betting hall or other gambling facility, (iii) health spa, karate class,
gymnasium, exercise studio or similar facility (provided, however, the use
restriction set forth in this sub-section (iii) shall not apply to
any existing health spa, gymnasium or similar facility in the Building as of
the date hereof), (iv) bowling alley, billiard or poolroom, arcade,
amusement center, gameroom or other entertainment facility, (v) ballroom,
dance hall or discotheque, (vi) warehouse, except for storage areas as an
incidental part of a tenant’s business, (vii) blood bank, (viii) mortuary,
(ix) theater (live or motion picture), (x) beauty

 

54

 

school or barber college, (xi) municipal
facility that is customarily open to the public, (xii) community center, (xiii)
heliport, (xiv) bus shelter, (xv) telecom satellite dish, or (xvi) any other
use which shall not be permitted in the Building under applicable zoning
ordinances in effect as of the date of this Lease (except to the extent that it
is understood that the provisions of this clause “xvi” shall not be deemed to
prohibit Tenant from using the Demised Premises for any such other use as shall
be permitted to Tenant under the provisions of clauses “i”, “ii” and “iii” Section 1(t)
above).

 

58.          EXTERMINATION.  Landlord shall be responsible for the prompt
extermination of any rodents, vermin or other pests (including, without
limitation, termites) which shall infest the Demised Premises for any reason
not directly caused by Tenant’s acts or omissions (the cost of which services
shall be included in Operating Expenses and subject to reimbursement by Tenant
with respect to Tenant’s obligation to pay Tenant’s Share of Increases in
Operating Expenses as provided in Section 7 herein).

 

59.          TENANT’S ACCESS TO AND USE OF
BUILDING AREAS.  Notwithstanding
anything to the contrary contained in this Lease, it is understood and agreed
that: (i) Tenant shall have 365 day per year, 24 hour per day, access to
any and all equipment rooms, telephone rooms, condensers and any other areas of
the Building in which Tenant’s equipment, or other equipment servicing the
Demised Premises, may be placed or located and (ii) Tenant shall have the
right to use any shafts, risers and conduits connecting the Demised Premises
with other parts of the Building, and/or with the exterior thereof, for the
installation and maintenance of cables, ducts, conduits, flues, pipes and other
devices, and for supplementary heating, ventilating and/or air conditioning
equipment and for other facilities consistent with Tenant’s use of the Demised
Premises and other portions of the Building, so long as the installation and
maintenance by Tenant of any of the same shall not unreasonably interfere with
the operation of the Building or with other tenants’ use and enjoyment of the
Building and provided that Tenant shall give prior notice to Landlord of any
such installation in order that Landlord may be assured that such installation
will not so interfere.

 

60.          MISCELLANEOUS.

 

(a)          Landlord and Tenant
represent to each other that neither has dealt with any broker, agent or other
intermediary in connection with this Lease other than Landlord’s Broker and
Tenant’s Broker, if any, specified in Section 1 (Fundamental Lease
Provisions), and that insofar as Landlord and Tenant each know, no other
broker, agent or other intermediary negotiated this Lease or introduced Tenant
to Landlord or brought the Building to Tenant’s attention for the lease of
space therein. Landlord agrees to pay all commissions payable to Landlord’s
Broker and Tenant’s Broker pursuant to separate, written agreements between
Landlord and Landlord’s Broker and Landlord and Tenant’s Broker.

 

(b)          The term “Tenant” as
used in this Lease shall be construed to mean tenants in all cases where there
is more than one tenant, and the necessary grammatical changes required to make
the provisions hereof apply to corporations,

 

55

 

limited liability companies, partnerships or
individuals, men or women, shall in all cases be assumed as though in each case
fully expressed.

 

(c)          The term “Landlord”
as used in this Lease means the fee owner of the Property and Building. In the
event of the voluntary or involuntary transfer of such ownership to a
successor-in-interest of Landlord, Landlord shall, upon the assumption thereof
by such transferee, be freed and relieved of all liability and obligation
hereunder which shall thereafter accrue.

 

(d)          If either Landlord or
Tenant institutes a suit against the other for violation of or to enforce any
covenant or condition of this Lease, the prevailing party shall be entitled to
all reasonable costs and expenses incurred by the prevailing party in
connection with such litigation, including, without limitation, reasonable
attorneys’ fees.

 

(e)          Time is of the
essence of this Lease and all of its provisions.

 

(f)           If Landlord or Tenant
is delayed or prevented from performing any of their respective obligations
under this Lease due to strikes, acts of God, shortages of labor or materials,
war, civil disturbances or other causes beyond the reasonable control of the
performing party (“Force Majeure”), the period of such delay or prevention shall be
deemed added to the time herein provided for the performance of any such
obligation by the performing party. Notwithstanding the foregoing, events of
Force Majeure shall not extend any period of time for the payment of Rent or
other sums payable by either party or any period of time for the written
exercise of an option or right by either party.

 

(g)          Tenant shall not
record this Lease without the prior written consent of Landlord; however, upon
the request of either Landlord or Tenant, the other party will execute,
acknowledge and deliver a Memorandum of Lease or a short form of lease for the
purpose of recording by the party making such request, and the same shall be in
such form and contain such information as may be required by law for
recordation. In the event that a Memorandum of Lease had theretofore been
recorded in accordance with the foregoing provisions of this Section, upon
Landlord’s written request after the expiration or earlier termination of this
Lease, Tenant shall execute a termination of such Memorandum of Lease or a
short form of lease in a recordable form.

 

(h)          Any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not apply to the interpretation of this Lease or any
amendments or exhibits hereto.

 

(i)           This Lease, the
exhibits, and any riders attached hereto and forming a part hereof set forth
all of the promises, agreements, conditions, warranties, representations,
understandings and promises between Landlord and Tenant relative to the
Property, the Building, the Demised Premises and this leasehold and Tenant
expressly acknowledges that Landlord and Landlord’s agents have made no
representation, agreements, conditions, warranties, representations,
understandings or promises, either oral or written, other than as herein set
forth, with respect to the

 

56

 

Property, the Building, the Demised Premises,
this leasehold or otherwise. No alteration, amendment, modification, waiver,
understanding or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and signed by Landlord and Tenant.

 

(j)           The captions of the
paragraphs in this Lease are inserted and included solely for convenience and
shall not be considered or given any effect in construing the provisions
hereof.

 

(k)          If any provision
contained in this Lease shall, to any extent, be invalid or unenforceable, the
remainder of this Lease (and the application of such provision to the persons
or circumstances, if any, other than those as to which it is invalid or
unenforceable) shall not be affected thereby, and each and every provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.

 

(l)           This Lease shall be
governed by and construed in accordance with the laws of the State in which the
Property is located, without giving effect to the principles of conflict of
laws.

 

(m)         This Lease may be
executed in two or more counterparts, each of which shall be deemed to be an
original hereof, but all of which, taken together, shall constitute one and the
same instrument.

 

61.          BUCKS COUNTY COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM.  Upon
the written request of Landlord, Tenant and/or its employees shall execute in a
timely manner those documents reasonably required by Landlord for the
satisfaction of certain requirements pursuant to a certain $2,500,000,00 loan
from the Department of Housing and Urban Development, such documents to be in
form substantially similar to the form annexed hereto as Exhibit “O”.
Tenant shall be liable for any and all damages that Landlord may incur in the
event Tenant fails to respond and cooperate with Landlord’s request in a timely
manner.

 

62.          DELIVERY FOR EXAMINATION.
DELIVERY OF THE LEASE TO TENANT SHALL NOT BIND LANDLORD IN ANY MANNER, AND NO
LEASE OR OBLIGATIONS OF LANDLORD SHALL ARISE UNTIL THIS INSTRUMENT IS SIGNED BY
BOTH LANDLORD AND TENANT.

 

[signatures
on next page]

 

57

 

 

58

 

 

59

 

EXHIBIT “A-1”

 

SITE PLAN OF PROPERTY

 

 

 

	
  Preferred Real Estate
  Investments Inc.

  

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW
  CROSSING

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXB1

  

 

 

EXHIBIT “A-2”

 

LEGAL DESCRIPTION OF PROPERTY

 

 

ALL
THAT CERTAIN lot or parcel of land situate In the Borough of Bristol, County of
Bucks, Commonwealth of Pennsylvania, bounded and described as shown on a “Boundary
Survey for Dial Corporation”, Project Number M-828, Sheet 1 of 1, dated December 2000,
last revised December 7, 2000, prepared by Unitech Engineers, Inc.,
Langhorne, PA 19047, as follows to wit:

 

BEGINNING
at a point, said point being at the intersection of the Northeasterly
Right-of-Way line of Pine Grove Street (variable width) with the Southeasterly
Right-of-Way line of Radcliffe Street (60 feet wide) (SR 2002); Thence along
said Right-of-Way line of Radcliffe Street North 36 degrees 23 minutes 00
seconds East for a distance of 729.84 feet to a point; Thence along the lands
now or formerly of Bucks County Redevelopment Authority, Bucks County Tax
Parcel Number 04-022-049, the following four courses and distances: (1) South
53 degrees 37 minutes 00 seconds East for a distance of 345.70 feet to a point;
Thence (2) South 36 degrees 23 minutes 33 seconds West for a distance of
152.61 feet to a point; Thence (3) South 53 degrees 37 minutes 00 seconds
East for a distance of 389.38 feet to a point on the High Water Line, a corner
of an Easement in favor of the Commonwealth of Pennsylvania; Thence, (4) along
said Easement South 53 degrees 37 minutes 00 seconds East for a distance of
26.54 feet to a point on the Low Water Line, a corner of said Easement, Thence,
along the Low Water Line, the Southeasterly edge of an Easement in favor of the
Commonwealth of Pennsylvania, the following four courses and distances: (1) South
43 degrees 35 minutes 38 seconds West for a distance of 181.13 feet to a point;
Thence, (2) South 43 degrees 58 minutes 10 seconds West for a distance of
191.32 feet to a point; Thence (3) South 45 degrees 02 minutes 50 seconds
West for a distance of 191.21 feet to a point; Thence (4) South 45 degrees
42 minutes 18 seconds West for a distance of 184.85 feet to a point, a corner;
Thence, along the lands now or formerly of Pamela Kuhn, Bucks County Tax Parcel
Number 04-04-22-50, North 34 degrees 07 minutes 00 seconds West for a distance
of 8.71 feet to a point on the High Water Line, a corner of an Easement in
favor of the Commonwealth of Pennsylvania; Thence continuing along the same
lands of Kuhn, North 34 degrees 07 minutes 00 seconds West for distance of
415.84 feet to a point; Thence, continuing along the lands now or formerly of
Pamela Kuhn, and along the Easterly Right-of-Way Line of the aforesaid Pine
Grove Street, North 01 degrees 15 minutes 00 seconds East for a distance of 85.70
feet to a point; Thence continuing along the aforesaid Northeasterly
Right-of-way line of Pine Grove Street, the following two courses and
distances: (1) North 64 degrees 15 minutes 00 seconds West for a distance
of 84.50 feet to a point; Thence (2) North 68 degrees 34 minutes 00
seconds West for a distance of 126.58 feet to a point, the point and place of
beginning.

 

CONTAINING
503,631 square feet or 11.5618 Acres more or less.

 

 

passage
in and along a right of way over and across two certain strips or pieces of
land included in lands conveyed by Merchant Sterling Corporation to George N.
Maroney by deed dated April 5,1926 (now of Superior Zinc Corporation) in
common with said Merchant-Sterling Corporation and Huff, Daland &
Company, Incorporated, their respective successors and assigns, tenant and
undertenants, occupiers and possessors of land owned by either of them, subject
to the reservations and upon the terms and conditions stated in the deed dated April 5,1926,
from George N. Maroney to Merchant Sterling Corporation.

 

Together
with the perpetual, free and uninterrupted use, liberty, privilege of and
passage in and along a right of way over and across a certain strip or piece of
land included in lands conveyed by Merchant-Sterling Corporation to the said
Huff, Daland & Company, Incorporated, by deed dated May 29, 1925,
for a perpetual right of way for a railroad of one or two tracks over and
across the said premises, as surveyed and laid out by Charles Henry Moon, shown
on the map or plan annexed to another deed also dated May 29,1925, from
Huff, Daland & Company, Inc., to the said Merchant-Sterling Corporation,
conveying the right of way herein described in common with the said
Merchant-Sterling Corporation and Huff, Daland & Company, Inc.,
their respective successors and assigns, tenants and undertenants, occupiers
and possessors of land owned by either of them, subject to the reservations and
upon the terms and conditions stated to the reservations and upon the terms and
conditions stated in said deed, dated May 29,1925, from said Huff, Daland &
Company Incorporated to the said Merchant-Sterling Corporation.

 

Together
with the perpetual, free and uninterrupted use, liberty and privilege of and
passage in and along all that certain 50 feet wide right of way extending from
the premises of Huff, Daland & Company, Inc., in a Northwesterly
direction to the property and right of way of the Pennsylvania Railroad
Company, as surveyed and laid out by Charles Henry Moon, Surveyor, May 20,
1925, the boundaries and limits thereof being shown and fixed by the red lines
on the map or plan, marked “Right of Way Map A” attached to the deed dated May 29,1925
from the said Merchant Sterling Corporation to Huff, Daland & Company, Inc.,
their respective successors an assigns.

 

The
Rights of Way mentioned in the three foregoing paragraphs are appurtenant to
the premises herein conveyed and run with said land.

 

COUNTY
PARCEL NUMBER 4-22-48.

 

BEING
the same premises which The Dial Corporation, a Delaware Corporation by Deed
dated April 6, 2001 and recorded April 9, 2001 in Bucks County, in
Land Record Book 2262 page 268, granted and conveyed unto Redevelopment
Authority of the County of Bucks, in fee.

 

 

ALL
THAT CERTAIN lot or piece of ground with the buildings and improvements thereon
erected situate in the Borough of Bristol, Bucks County, Pennsylvania, and
described according to a survey made thereof by C.H. Moon on February 17, 1926,
as follows:

 

BEGINNING
at an iron pipe in the center line of Radcliffe Street in line of land of Huff
and Daland Company; thence extending Southwardly along the same 53 degrees 37
minutes East 375.7 feet; thence extending Northwardly 36 degrees 23 minutes
East 36.1 feet; thence extending Southwardly 53 degrees 37 minutes East 455.7
feet to a point in the United States Government Pier head and bulkhead line of
the Delaware River; thence along the same Southwardly 33 degrees, 49 minutes
West 446.85 feet; thence extending Northwardly 53 degrees 37 minutes West 475.7
feet; thence extending Northwardly 36 degrees 23 minutes East 152.6 feet;
thence extending Northwardly 53 degrees 37 minutes West 375.7 feet to a point
in the center line of Radcliffe Street; thence along the same Northwardly 36
degrees 23 minutes East 257.7 feet to the place of beginning.

 

County
Parcel No. 4-22-49.

 

BEING
the same premises which The Bucks County Redevelopment Authority acquired title
to premises identified as Bucks County Tax Parcel No. 4-22-49 by
Declaration of Taking filed 03/23/1989 as No. 89-02313-14-4 and a Notice
of Filing recorded in Land Record Book 30 page 117.

 

 

EXHIBIT “A-3”

 

DEMISED PREMISES

 

 

 

	
  Preferred Real Estate
  Investments Inc.

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW
  CROSSING

  Floor:          1ST
  FLOOR

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXA

  

 

 

 

 

	
  Preferred Real Estate
  Investments Inc.

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW
  CROSSING

  Floor:         2ND
  FLOOR

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXA

  

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preferred Real Estate
  Investments Inc.

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW
  CROSSING

  Floor:         3RD
  FLOOR

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXA

  

 

 

EXHIBIT B

 

(To be provided by Landlord and Tenant by January 6,
2006)

 

 

EXHIBIT B-1

 

(To be provided by Landlord and Tenant by January 6,
2006)

 

 

EXHIBIT “C”

 

BUILDING RULES AND REGULATIONS

 

1.            The sidewalks,
entryways, passages, corridors, stairways and elevators shall not be obstructed
by any of the tenants, their employees or agents, or used by them for purposes
other than ingress or egress to and from their respective suites. All safes or
other heavy articles shall be carried up or into the leased premises only at
such times and in such manner as shall be prescribed by the Landlord and the
Landlord shall in all cases have the right to specify a maximum weight and
proper position or location of any such safe or other heavy article. The
responsible tenant shall pay for any damage done to the Building by taking in
or removing any safe or from overloading any floor in any way. The responsible
tenant shall pay for the cost of repairing or restoring any part of the
Building, which shall be defaced or injured by the tenant, its agents or
employees.

 

2.            Except as otherwise
provided for in the Lease, each tenant will refer all contractors, contractor’s
representatives and installation technicians rendering any service on or to the
leased premises for the tenant to Landlord for Landlord’s approval and
supervision before performance of any contractual service. This provision shall
apply to all work performed in the Building, including installation of
telephones, telegraph equipment, electrical devices and attachments and
installations of any nature affecting floors, walls, woodwork, trim, windows,
ceilings, equipment or any other physical portion of the Building.

 

3.            Except as otherwise
provided for in the Lease, no, sign, advertisement or notice shall be
inscribed, painted or affixed on any part of the inside or outside of the
Building unless of such color, size and style and in such place upon or in the
Building as shall first be designated by Landlord; there shall be no obligation
or duty on Landlord to allow any sign, advertisement or notice to be inscribed,
painted or affixed on any part of the inside or outside of the Building except
as specified in a tenant’s lease. Signs on or adjacent to doors shall be in
color, size and style approved by Landlord, the cost to be paid by the tenants.
Landlord will provide a directory in a conspicuous place, with the names of
tenants, Landlord will make any necessary revision in this within a reasonable
time after notice from the tenant of an error or of a change making revision
necessary. No furniture shall be placed in front of the Building or in any
lobby or corridor without written consent of Landlord.

 

4.            Except as otherwise
provided for in the Lease, no tenant shall do or permit anything in its leased
premises, or bring or keep anything therein, which will in any way increase the
rate of fire insurance on the Building, or on property kept therein, or
obstruct or interfere with the rights of other tenants, or in any way injure or
annoy them, or conflict with the laws relating to fire prevention and safety,
or with any regulations of the fire department, or with any rules or
ordinances of any Board of Health or other governing bodies having jurisdiction
over the Building.

 

5.            The janitor of the
Building may at all times keep a pass-key, and

 

 

said
janitor and other agents of the Landlord shall at all times, be allowed
admittance to the leased premises for purposes permitted in tenant’s lease.

 

6.            No additional locks
shall be placed upon any doors without the written consent of the Landlord. All
necessary keys shall be furnished by the Landlord, and the same shall be
surrendered upon the termination of the Lease, and the tenant shall then give
the Landlord or its agents explanation of the combination of all locks upon the
doors of vaults.

 

7.            The water closets and
other water fixtures shall not be used for any purpose other than those for
which they were constructed, and any damage resulting to them from misuse or
abuse by a tenant or its agents, employees or invitees, shall be borne by such
tenant.

 

8.            No person shall
disturb the occupants of the Building by the use of any musical instruments;
the making or transmittal of noises which are audible outside the leased
premises, the making of odors which are apparent outside the leased premises,
or any unreasonable use. No dogs or other animals or pets of any kind will be
allowed in the Building.

 

9.            Nothing shall be
thrown out of the windows of the Building or down the stairways or other
passages.

 

10.          Tenants shall not be
permitted to use or to keep in the Building any kerosene, camphene, burning
fluid or other illuminating materials.

 

11.          If any tenant desires
telegraphic, telephonic or other electric connections, Landlord or its agents
will direct the electricians as to what and how the wires may be introduced,
and without such directions no boring or cutting for wires will be permitted.

 

12.          If a tenant desires
shades, they must be of such shape, color, materials and make as shall be
prescribed by Landlord. No outside awning shall be permitted.

 

13.          No portion of the
Building shall be used for the purposes of lodging rooms or for any immoral or
unlawful purposes.

 

14.          No tenant shall store
anything outside the Building or in any common areas in the Building.

 

In the event of any conflict between any of the terms of the
Lease and the Building Rules and Regulations, the terms of the Lease shall
control.

 

 

EXHIBIT “D”

 

SPECIFICATIONS FOR

JANITORIAL SERVICES

 

A.                                   Daily: The following
services are to be performed on a daily basis (Monday through Friday, except
for legal holidays, unless otherwise provided herein):

 

1.            Empty all trash
containers, wastebaskets and recycling containers, including all exterior trash
containers

 

2.            Damp wipe all areas
of desk and credenza tops, file cabinets, counters, sills and ledges. Dust
under all desk equipment and telephone and replace same. Clean and disinfect
telephone equipment.

 

3.            Dust mop all hard
surface flooring and remove debris or dust buildup from corners. Damp mop cove
base and any areas where spillage may have occurred.

 

4.            Vacuum all carpeted
areas and remove spots from carpet and mats. 
Remove gum, tar, etc. adhering to floor.

 

5.            Vacuum entrance mats
and runners.

 

6.            Remove finger marks
and smudges from all doors, frames, walls, partitions, switch plates and glass.

 

7.            Wash and squeegee
clean all side lights to offices and all glass doors.

 

8.            Damp wipe the
framework and ledges at all entrance ways. Dust picture frames, baseboards, and
wall hangings as needed.

 

9.            Special attention is
to be paid to all common areas such as lobbies, reception areas and conference
areas to maintain superior quality of appearance.

 

10.          Trash and debris is
to be removed to a dumpster area so designated at the site, secured in
heavy-duty plastic bags. Trash bags are to be placed in a cart to be taken to
dumpster. Trash bags are not to be put in elevator unless they are in a cart.
Nothing in tenant space is to be thrown away unless in a wastebasket or specifically
marked trash.

 

11.          Wipe down all vinyl
floor mats as needed.

 

12.          Clean elevator
thresholds nightly, certificate holder and panels.

 

13.          Clean, sanitize and
polish all drinking fountains.

 

14.          Wipe down all tenant
and building doors to remove fingerprints and soil.

 

 

15.          Cleaning and
disinfecting of lavatories.

 

(a)          Empty all waste
containers and replace bags inside containers (plastic liners purchased
specifically for recessed stainless containers, shall remain in containers
after trash is removed).

 

(b)          Sweep and/or damp mop
floors.

 

(c)          Fill and maintain all
toilet tissue, soap and towel dispensers, personal seat dispensers and sanitary
protection dispensers. Sanifresh gentle lotion cleaner or liquid soap, napkin
receptacle, trash can liners, personal seat covers.

 

(d)          Disinfect all
fixtures and disposals.

 

(e)          Thoroughly clean and
disinfect all sinks, bowls and urinals. Pour water down floor drains on each
floor.

 

(f)           Clean all counter
tops and cosmetic shelves.

 

(g)          Clean and polish all
mirrors and chrome fixtures.

 

(h)          Damp mop floor
(including the cafeteria) with disinfecting solution including tile baseboards,
pay special attention to corners and under urinals.

 

(i)           Clean and polish
outside of all waste containers.

 

(j)           Wipe down entrance
doors and signage.

 

(k)          Wipe down wall tile
as needed.

 

(l)           High dust all
partitions and low dust baseboards.

 

(m)         Clean and disinfect
all sanitary disposal units.

 

16.          As needed basis:

 

High dust all horizontal and vertical surfaces not
reached daily.

 

17.          Turn off all lights
and secure all designated interior doors and all exterior entrances upon
completion of work assignments according to the security procedures as to each
tenants individual security system. Supervisor should check all doors at the
end of each evening to ensure they are secure.

 

18.          All dumpster areas
are to be kept clean.

 

19.          Areas provided for
storage of janitorial supplies and equipment to be kept orderly and clean at
all times.

 

 

B.                                   Weekly:

 

1.                                     Maintain marble surfaces with
Multi-Seal as per manufacturer’s specifications.

 

2.                                     Maintain all types of flooring as per
manufacturer’s specifications.

 

3.                                     Sweep entrance to building.

 

4.                                     Dust tops of cubicle furniture.

 

C.                                   Monthly:

 

1.                                     All lights lenses and air diffusers
are to be cleaned the first Friday of each month.

 

2.                                     Damp wash diffusers, vents, grills and
tight lenses that are soiled.

 

3.                                     Dust venetian blinds and window frames
(every other month).

 

D.                                   Quarterly:

 

1.                                     Strip and wax all VCT tile in all
tenant and common areas.

 

2.                                     Perform maintenance to all types of
flooring as per manufacturer’s specifications.

 

E.                                     Semi-Annually:

 

1.                                     Damp wipe venetian blinds.

 

F.                                     Performance of Extra
Janitorial Services:

 

Performance of any extra work over and above the scope of the contract
will be done only by written authorization by Landlord. Invoicing for same will
be separate from regular invoicing.  A
purchase order must be obtained prior to performing work. If a purchase order
is not obtained prior to work being performed, Landlord will not be responsible
for the cost of same.

 

Extras shall include cleaning services and trash removal to be provided
on Saturdays and Sundays or related Tenant’s activities on weekends (e.g.,
cleaning the Premises prior to commencement of business on Mondays).  In the event Tenant requires such services,
Tenant shall provide a written request to Landlord therefor and Tenant shall
promptly pay Landlord, upon presentation of a bill or bills therefor, for the
cost of such additional services.

 

 

G.                                   Tenant’s Right to
Hire Additional Help:

 

Provided that no undue interference is caused to Landlord’s Contractor,
Tenant shall have the right, as its sole cost and expense, with prior written
approval by Landlord, to hire additional service for the cleaning of the
premises. All labor, supervision equipment, and cleaning supplies required for
the proper performance of this work, unless otherwise specified, is to be
furnished by a contractor of Tenant’s choice. Contractor must provide Landlord
with adequate insurance coverages.

 

 

EXHIBIT “E”

 

EXPANSION SPACE

 

 

 

	
  Preferred Real Estate
  Investments Inc.

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW CROSSING

  Floor:         1ST
  FLOOR

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXE

  

 

 

EXHIBIT “F”

 

PARKING EXHIBIT

 

 

 

	
  Preferred Real Estate
  Investments Inc.

  1001 E. Hector Street

  Conshohocken, PA 19428

  Tel. (610) 834-1969

  Fax. (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND VIEW
  CROSSING

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXF

  

 

 

EXHIBIT “G”

 

ENVIRONMENTAL REPORTS

 

 

Phase I Environmental Site
Agreement (updated)

1414 N. Radcliffe Street

Bristol, PA

RT Project # 6526-01

 

Prepared by: RT
Environmental Services, Inc.

215 W. Church Rd.

King of Prussia, PA 19406

March 7, 2003

 

Phase I Environmental Site
Assessment

Property B of the former
Riverfront North Site

1414 Radcliffe Street

Bristol, PA

RT Project # 6544-01

 

Prepared by: RT
Environmental

215 W. Church Street

King of Prussia, PA 194066

March 13, 2003

 

 

EXHIBIT “H”

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT

 

 

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”)
is made as of the       day of December,
2005, by and among MANUFACTURERS AND TRADERS
TRUST COMPANY, One M&T Plaza, Buffalo, New York 14240,
Attention: Office of the General Counsel (the “Lender”), and LENOX, INCORPORATED, a New Jersey corporation, with an
address at 100 Lenox Drive, Lawrenceville, New Jersey 08648, Attention: Lenox
Counsel (the “Tenant”) and ISLAND VIEW TCI, L.P.,
a Pennsylvania limited partnership, with an address at c/o Preferred Real
Estate Investments, Inc., 1001 E. Hector Street, Suite 100,
Conshohocken, Pennsylvania 19428, Attention: Legal Department (the “Landlord”).

 

WHEREAS, the undersigned Tenant, is the lessee of certain leased
premises (the “Premises”), located at that certain property (the “Property)
known as Island View Crossing, 1414 Radcliffe Street, Bristol, Pennsylvania, as
said Premises are identified and leased to Tenant under that certain Lease
between Tenant and the Landlord, dated as of December        ,
2005 (as amended, extended or modified, the “Lease”); and

 

WHEREAS, Lender and Landlord have entered into a certain loan
transaction on or about
               ,
2003, in a principal amount of up to $              (the
“Loan”) pursuant to which a mortgage lien on the Property have been created
from Landlord in favor of Lender (the “Mortgage”); and

 

WHEREAS, the Tenant, by this Agreement, has agreed to subordinate its
leasehold interest in the Premises to the Mortgage; and

 

WHEREAS, Lender, by this Agreement, has agreed not to disturb Tenant in
the event of foreclosure or other rights asserted by Lender under the Mortgage.

 

NOW, THEREFORE, the undersigned, intending to be legally bound hereby,
for One Dollar ($1.00) and other good and valid consideration, receipt whereof
is hereby acknowledged, hereby agrees as follows:

 

1.                                     Subordination. 
That, subject to the provisions of Paragraph 4 hereinafter, the
Lease is, and all of Tenants’ rights thereunder are and shall always be,
subject and subordinate to the Mortgage, and to all advances made or to be made
thereunder and to the interest and other charges due thereon, and all renewals,
replacements, modifications, consolidations, or extensions thereof.

 

2.                                     Termination of Lease. 
(intentionally deleted).

 

3.                                     Attornment. 
In the event of any foreclosure of the Mortgage or other acquisition of
the Property by Lender, its successors or assigns, or in the event of any
conveyance of the Property to any purchaser thereof at any foreclosure sale,
Tenant will, upon receipt of appropriate notice as to the succession of Lender
or such purchaser to the interest of Landlord under the Lease, attorn to, and
recognize Lender, its successors or assigns, or such purchaser, as the case may
be, as the lessor under the aforementioned Lease for the balance then remaining
of the term of the Lease, subject to all the terms of the Lease; and that the
aforesaid provisions shall be self-operative and no further instrument or
document shall be necessary unless required by Lender, its successor or
assigns, or such purchaser. Notwithstanding anything to the contrary contained
herein, it is understood and agreed that Tenant shall not be bound to perform
any covenant contained in the Lease to a greater standard than that set forth
in the Lease by virtue of the inclusion in the Mortgage of any greater such
standard, and Lender shall not have any rights to approve, prohibit or consent
to the exercise by Tenant of any of its rights under the Lease, except as in
the Agreement or in the Lease expressly provided.

 

4.                                     Agreement Not to Disturb
Tenant.  Notwithstanding anything to the contrary herein, in the event of
foreclosure or other rights asserted under said Mortgage by the Lender, or its
successors or assigns, Lender agrees that (i) neither Lender nor any of
such successors or assigns shall name or join Tenant as a party-defendant or
otherwise in any suit, action or proceeding to enforce any rights given to
Lender or such successors or assigns pursuant to the terms, covenants or conditions
contained in such

 

1

 

Mortgage or any other
document held by Lender or any such successors or assigns, or any rights given
to Lender or any such successors or assigns as a matter of law; (ii) said
Lease and the rights of the Tenant thereunder shall continue in full force and
effect and shall not be terminated or disturbed (whether by a foreclosure, deed
in lieu of foreclosure or otherwise), except as permitted for default of Tenant
under the Lease continuing after notice and beyond any applicable grace period
in accordance with the provisions of said Lease; and (iii) all
condemnation awards and proceeds of insurance shall be applied in the manner
provided for in the Lease.

 

5.                                     Transfer of Interests to Lender.  If the interests of Landlord in the Property shall be transferred to
and owned by Lender by reason of foreclosure or other proceedings brought by
it, or by deed in lieu of foreclosure, or if Lender takes possession of the
Property pursuant to any provisions of any documents relating to the Loan,
then: (i) Lender and Tenant shall be directly bound to each other under
all terms, covenants and conditions of the Lease for the balance of the term
thereof and for any extensions or renewals thereof which may be exercised by
Tenant, with the same force and effect as if Lender were the Landlord under the
Lease; and (ii) Tenant does hereby attorn to Lender as its landlord, said
attornment to be effective and self-operative (without the execution of any
further instruments) immediately upon Lender succeeding to the interests of the
Landlord under the Lease; provided, however, regarding item (ii) above,
that Tenant shall have received written notice from Lender that it has
succeeded to the interests of the Landlord under the Lease. The respective
rights and obligations of Tenant and Lender upon such attornment, to the extent
of the then-remaining balance of the term of the Lease and any such extensions
and renewals, shall be and are the same as now set forth from and after Lender’s
succession to the interests of the Landlord under the Lease, and Tenant shall
have the same remedies against Lender for the breach of any agreement contained
in the Lease that Tenant might have under the Lease against Landlord if Lender
had not succeeded to the interest of Landlord; provided, however, that Lender
shall not be:

 

(a)                               liable for any act or omission, or
any accrued obligation of any prior landlord (including Landlord); or

 

(b)                              subject to any defenses which Tenant
might have against any prior landlord (including Landlord) prior to the earlier
to occur of (i) the date on which ownership of the Property shall be
transferred to Lender or (ii) the date that Lender first takes possession
of the Property without ownership of the Property having otherwise been
transferred to Lender, unless relating to a default or breach continuing after
the earlier to occur of (i) the date on which ownership of the Property
shall be transferred to Lender or (ii) the date that Lender first takes
possession of the Property without ownership of the Property having otherwise
been transferred to Lender; or

 

(c)                               bound by any “Annual Base Rent” (as
such term is defined in the Lease) which Tenant might have paid for more than
the current month;

 

(d)                              bound by any security deposit which
Tenant may have paid to any prior landlord (including Landlord), unless such
deposit is in an escrow or other fund available to Lender;

 

(e)                               bound by any surrender or other early
termination of the Lease (except as permitted in the Lease without Landlord’s
consent) made without the consent of Lender, or by any amendment or
modification of any of the monetary or material non-monetary provisions of the
Lease made without the consent of Lender; or

 

(f)                                 obligated to commence or complete any
construction or make any contribution toward construction or installation of
any improvements upon the Premises required under the Lease or any expansion or
rehabilitation of existing improvements thereon.

 

6.                                    Notices of Default.  Tenant shall notify Lender in writing at the address set forth herein
of the occurrence of any default or event of default by Landlord under the
Lease which would give Tenant the right to cancel or terminate the Lease; and
Tenant will grant to Lender a reasonable time (not to exceed 90 days) in which
to cure such Landlord’s default (which time shall be at least the period of
time granted to the

 

2

 

Landlord by the Lease),
provided, however, that Lender shall, within ten (10) business days after
the giving of such notification by Tenant to Lender of such default, give
Tenant written notice of Lender’s intent to cure such Landlord’s default and
shall thereupon promptly commence the prosecution of such cure and thereafter
diligently continue the prosecution of such cure to completion. So long as
Lender shall have given notice to Tenant of Lender’s intent to cure such
default as provided in the next preceding sentence and so long as Lender shall
be prosecuting the cure of such default as provided in the next preceding
sentence, Tenant agrees that it will not terminate or cancel the Lease on
account of such default until such notice to Lender has been given, and Lender
has had the opportunity to cure any such default in accordance with the
provisions of the next preceding sentence. Should Lender fail to so notify
Tenant of Lender’s intent to cure such Landlord’s default within said ten (10) business
days or after having given any such notice shall fall to cure (or commence to
cure) such default in accordance with the foregoing provisions of this
Paragraph, then Tenant shall have all available rights and remedies (including
the right to cure Landlord’s default) under the Lease, at law and/or in equity.
It is expressly understood and agreed that the above shall not be deemed to
create any obligation of Lender to cure any such default or defaults at any
time prior to the earlier to occur of (i) the date on which ownership of
the Property shall be transferred to Lender or (ii) the date that Lender
first takes possession of the Property without ownership of the Property having
otherwise been transferred to Lender.

 

7.                                     Confirmation of
Subordination.  Should Lender, its successors or assigns, or
any purchaser desire confirmation of the subordination or the attornment, as
the case may be, as is expressly provided for in this Agreement, Tenant shall
at any time or from time to time, execute and deliver without charge such
reasonable and commercially customary Instruments and/or documents as may be reasonably
requested to acknowledge such subordination and/or agreement to attorn, in
recordable form.

 

8.                                     Notices. 
Whenever in this Agreement it is provided that notice be given to or
served upon any of the parties, each such notice or demand shall be in writing,
and any law or statute to the contrary notwithstanding, shall not be effective
for any purpose unless the same shall be given or served as follows: If given
or served by the Lender, by mailing the same to the Tenant and Landlord by
registered or certified mail, return receipt requested, or by overnight courier
service provided a receipt or other proof of delivery is required, at the
addresses listed above, or at such other addresses as the Tenant and Landlord
may from time to time designate by notice given to the Lender; and if given or
served by the Tenant, by mailing the same to the Lender and Landlord by
registered or certified mail, return receipt requested, or by overnight courier
service provided a receipt or other proof of delivery is required, addressed to
the Lender and Landlord at the addresses listed above, or at such other
addresses as the Lender and Landlord may from time to time designate by written
notice given to Tenant; and if given or served by Landlord, by mailing the same
to Tenant and Lender by registered or certified mail, return receipt requested,
or by overnight courier service provided a receipt or other proof of delivery
is required, addressed to the Tenant and Lender at the addresses listed above,
or such other addresses as the Tenant and Lender may from time to time
designate by written notice given to Landlord. All such notices to be given
hereunder shall be effective on the earlier to occur of (i) the date of
actual receipt by the party to which same shall have been addressed as herein
set forth or (ii) the third (3rd) business day next following the date
upon which the same shall have been mailed, or sent by such overnight courier
service, as aforesaid.

 

9.                                     Waiver of Condemnation
Awards.  (intentionally deleted).

 

10.                               Obligations of Lender. 
Anything herein or in the Lease to the contrary notwithstanding, in the
event that Lender shall acquire title to the Property, Lender shall have no
obligation, nor incur any liability, beyond Lender’s then interest in the
Property, and Tenant shall look exclusively to such interest of Lender in the
Property for the payment and discharge of any obligations imposed upon Lender
hereunder or under the Lease. Tenant agrees that with respect to any money
judgment which may be obtained or secured by Tenant against Lender in
connection with any ownership by Lender of the Property, Tenant shall look
solely to the estate or interest owned by Lender in the Property, and Tenant
will not collect or attempt to collect any such judgment out of any other
assets of Lender.

 

11.                               Subordination of Mortgage. 
Notwithstanding anything to the contrary herein, the Lender may, at its
sole discretion, provide, by the giving of written notice thereof to Tenant,
that the Mortgage

 

3

 

is subordinate to the Lease.

 

12.                               Miscellaneous.

 

(a)                               This Agreement shall be effective as
of the date of its execution.

 

(b)                              This Agreement may not be modified
orally or in any other manner than by an Agreement in writing signed by the
undersigned and Lender, or their respective heirs, executors, administrators,
successors and assigns.

 

(c)                               This Agreement shall be binding upon
the undersigned, their respective successors, assigns and subtenants, and, as
respects the obligations of Tenant hereunder, shall inure in favor of the
Lender, its successors and assigns, and any purchaser at any foreclosure sale,
or any other sale upon the Mortgage; while, as respects the obligations of
Lender hereunder, shall inure in favor of Tenant, its successors and assigns.

 

(d)                              The invalidity or unenforceability of
any portion hereof shall not affect the remaining portions hereof, and in the
case of such invalidity, this Agreement shall be construed as if such portion
had not been inserted.

 

(e)                               This Agreement has been delivered in
and shall be governed by, construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania.

 

(d)                              The headings preceding the various
paragraphs and subparagraphs of this Agreement are inserted for convenience of
reference and shall not alter the meaning of the provisions hereof.

 

(e)                               This Agreement may be recorded by
Lender or Tenant at any time in the sole discretion of either such party.

 

(f)                                 The Agreement may be executed in one
or more counterparts by some or all of the parties hereto, each of which
counterparts shall be an original and of which together shall constitute an
original agreement.

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed, under seal, as of the date and year first above stated.

 

 

	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  LENOX, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
   

  	
  ISLAND VIEW TCI, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

4

 

	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  MANUFACTURERS AND TRADERS TRUST

  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[SEAL]

 

5

 

	
  COMMONWEALTH OF
  PENNSYLVANIA

  	
  :

  	
   

  
	
   

  	
  :

  	
  ss

  
	
  COUNTY OF

  	
  :

  	
   

  

 

On this, the         
day of           , 2005,
before me the undersigned officer, personally appeared                                  ,
known to me or proven to be the person who executed the above instrument, and
who acknowledged that he/she is the                       
of                   ,
and that he/she as such officer, being authorized to do so, executed the
foregoing instrument for the purposes therein contained by signing the name of
the corporation as such officer.

 

IN WITNESS WHEREOF, I
hereunder set my hand and official seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  	
   

  
				

 

	
  COMMONWEALTH OF
  PENNSYLVANIA

  	
  :

  	
   

  
	
   

  	
  :

  	
  ss

  
	
  COUNTY OF

  	
  :

  	
   

  

 

On this, the         
day of           , 2005,
before me the undersigned officer, personally appeared                                  ,
known to me or proven to be the person who executed the above instrument, and
who acknowledged that he/she is the                       
of                   ,
and that he/she as such officer, being authorized to do so, executed the
foregoing instrument for the purposes therein contained by signing the name of
the corporation as such officer.

 

IN WITNESS WHEREOF, I
hereunder set my hand and official seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  	
   

  
				

 

	
  COMMONWEALTH OF
  PENNSYLVANIA

  	
  :

  	
   

  
	
   

  	
  :

  	
  ss

  
	
  COUNTY OF

  	
  :

  	
   

  

 

On this, the         
day of           , 2005,
before me the undersigned officer, personally appeared                                  ,
known to me or proven to be the person who executed the above instrument, and
who acknowledged that he/she is the                       
of                   ,
and that he/she as such officer, being authorized to do so, executed the
foregoing instrument for the purposes therein contained by signing the name of
the corporation as such officer.

 

IN WITNESS WHEREOF, I
hereunder set my hand and official seal.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public

  	
   

  
				

 

6

 

EXHIBIT “I”

 

COMMENCEMENT DATE AGREEMENT

 

 

EXHIBIT “I”

 

COMMENCEMENT DATE
AGREEMENT

 

THIS AGREEMENT, made as of
this      day of                    , 2006, between ISLAND VIEW TCI, LP. (herein
called “Landlord”) and LENOX, INCORPORATED (herein called “Tenant”).

 

W I  T  N  E  S
S  E  T  H:

 

WHEREAS, Landlord is the
owner of the Island View Crossing office building situate in Bristol,
Pennsylvania (herein called the “Building”); and

 

WHEREAS, by that certain lease
dated                    , 2005 (herein called the “Lease”), Landlord
leased to Tenant certain space (herein called the “Premises”) in the Building;
and

 

WHEREAS, Tenant is now in
possession of the Premises and the term of the Lease has commenced; and

 

WHEREAS, under Section 1
(i) of the Lease, Landlord and Tenant agreed to enter into an
agreement setting forth certain information in respect of the Premises and the
Lease.

 

NOW, THEREFORE, Landlord and
Tenant agree as follows:

 

1.  The Initial Term (as such term is defined in
the Lease) commenced on, and the Commencement Date (as such term is defined in
the Lease) was,                    , 2006. The Rent Commencement Date (as such
term is defined in the Lease) was                   , 2006. 
The Initial Term of the Lease shall expire on                     , 2018 unless Tenant exercises any option to
extend the Term of the Lease or unless the Lease terminates earlier as provided
in the Lease.

 

2.  The
date of commencement of the First Renewal Term (as such term is defined n the
Lease) shall
be                    ,
2018 if Tenant effectively exercises its option in respect thereof, and if
Tenant does so, the Term of the Lease shall expire on               , 2023 unless Tenant exercises any rights to
further extend the Term of the Lease or unless the Lease terminates earlier as
provided in the Lease.

 

3.  The date of commencement of the Second
Renewal Term (as such term is defined in the Lease) shall be                    , 2023 if Tenant effectively exercises its
option in respect thereof, and if Tenant does so, the Term of the Lease shall
expire on                     , 2028 unless the Lease terminates earlier as
provided in the Lease.

 

4.  The date of expiration of the second (2nd)
Lease Year (as such term is defined in the Lease), as such date shall be
utilized in connection with the determination of the Exercise Deadline (as such
term is defined in the Lease) applicable to Tenant’s right to exercise the
Expansion Option (as such term is defined in the Lease), is                     , 2008.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed the day and year first
above written.

 

 

	
  Attest or Witness:

  	
  ISLAND VIEW TCI, LP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest or Witness:

  	
  LENOX, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
						

 

 

EXHIBIT “J”

 

PERMITTED ENCUMBRANCES

 

 

Notwithstanding the foregoing, the Property may also be subject to the
following: (i) all applicable federal, state or local statutes,
ordinances, codes, regulations, decrees, orders, laws or other governmental
requirements now or hereafter in effect; (ii) such a state of facts which
an accurate current survey and physical inspection of the Property would reveal
including, without limitation, all existing easements and encroachments, if
any; (iii) all current real estate taxes, assessments and other sums
assessed against the Property and not yet due and payable; subject to
prorations for the current year; (iv) all public improvement bonds,
obligations conditions and assessments affecting the Property; (v) any
other matters which will not materially interfere with Tenant’s use and
enjoyment of the Property.

 

1.               Rights or claims of Tenants in possession
under unrecorded leases.

 

2.               Any encroachments, easements, measurements,
variations in area or content, party walls or other facts which a correct
survey of the premises would show.

 

3.               Possible additional tax assessment by reason
of new construction or improvements pursuant to the provisions of the Acts of
assembly relating thereto, not yet due and payable.

 

4.               Rights granted to the Bristol Water Co., as in
Misc. deed Book 38 page 265.

 

5.               Rights of ways as set forth in Deed Book 516 page 448;
Deed Book 525 page 238; Deed Book 535 page 550; deed Book 659 page 430
and Deed Book 659 page 432.

 

6.               Possible rights of the United States of
America, the Commonwealth of Pennsylvania, the Public and other riparian owners
between high and low water marks of Delaware River.

 

7.               Subject to the laws and authority of the
Federal and State Government, their political subdivisions and agencies, to
regulate commerce and navigation over part of the premises extending beyond the
high water mark of Delaware River and to exert governmental title and ownership
in the area lying beyond the original low water mark.

 

8.               Conditions disclosed by Boundary Survey for
Dial Corporation, prepared by Unitech Engineers Inc., dated Dec. 2000 and
last revised 12/7/2000; Building set back lines Easements in favor of
Commonwealth of Pennsylvania over that portion of property located between the
high water line and low water line.

 

9.               Covenants, restrictions, or conditions as set
out in the Deed Book 2262 page 268 which restrict the property from being
used for the production of laundry detergent, soap, or any related or ancillary
products at any time in the future.

 

10.         That certain ALTA/ACSM Land Title Survey prepared by Joel C. DeFreytas, Jr.,
Land Surveyor, dated 11/26/2002, bearing Commitment No. C1255 discloses the
following:

 

a.
Water and gas lines

 

b.
Sanitary sewer and storm sewer lines; and

 

c.
Underground electric line

 

11.         Consent Order and Agreement; by and among the Commonwealth of Pennsylvania
Department of Environmental Protection, Redevelopment Authority of the County
of Bucks, Island View Crossing I, L.P. and Island View Crossing II, L.P., dated
May 30, 2003, recorded August 25, 2003, in Book 3537 page 0241.

 

12.         Plan recorded 10/1/2003 in Plan Book 315 page 60.

 

 

13.         Memorandum of Lease between Island View Crossing I, LP and Island View
TCI, LP dated 6/27/2003 and recorded 11/18/2003 in Land Record Book 3715 page 1006.

 

 

EXHIBIT “K”

 

LOADING DOCK, RECEIVING AREA AND
FREIGHT ELEVATOR

 

 

 

	
  Preferred
  Real Estate Investments Inc.

   

  1001
  E. Hector Street

  Conshohocken,
  PA 19428

  Tel.
  (610) 834-1969

  Fax.
  (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND
  VIEW CROSSING

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXL

  

 

 

 

	
  Preferred
  Real Estate Investments Inc.

   

  1001
  E. Hector Street

  Conshohocken,
  PA 19428

  Tel.
  (610) 834-1969

  Fax.
  (610) 834-7593

  	
   

  	
  Project:       LENOX

  Location:    ISLAND
  VIEW CROSSING

  Floor:         1ST
  FLOOR

   

  Drawn By:  BK

  Date:           12/21/05

  Scale:          N.T.S.

  	
   

  	
  SHEET NO.

   

  EXL

  

 

 

EXHIBIT
“L”

 

FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT

 

 

EXHIBIT
“L”

 

ASSIGNMENT
AND ASSUMPTION AGREEMENT

 

ASSIGNMENT
(the “Assignment”) made this        
day of                             ,
20    , by LENOX, INCORPORATED, a New Jersey corporation
having an office at Island View Crossing, 1414 Radcliffe Street, Bristol,
Pennsylvania 19007 (“Assignor”), to                                                               ,
a                           
                     having
an office at                               ,
                   ,
                          
             (“Assignee”).

 

WHEREAS,
pursuant to a certain lease dated                ,
20     (which lease has heretofore been amended by
                     ,
and which lease, as so amended, is hereinafter referred to as the “Lease”), Island View TCI, L.P., a
Pennsylvania limited partnership having an office in care of Preferred Real
Estate Investments, Inc., 1001 E. Hector Street, Suite 100, Conshohocken,
Pennsylvania 19428 (the “Landlord”),
leased to Assignor certain premises in the office building known as Island View
Crossing located in Bristol, Pennsylvania.

 

NOW,
THEREFORE, in consideration of $10.00 and other good and valuable consideration
paid by Assignee to Assignor, receipt of which is hereby acknowledged, Assignor
does hereby assign and set over unto Assignee all of Assignor’s right, title
and interest as Tenant in and to the Lease and the premises demised thereunder.

 

TO HAVE AND TO
HOLD unto Assignee, its successors and assigns, for all the rest of the term of
the Lease.

 

AND Assignor
does hereby represent that it is the owner of the leasehold estate created by
the Lease and that Assignor has not at any time done anything whereby the
leasehold estate has been encumbered in any way.

 

Assignee
hereby assumes the performance of all of the terms, covenants and conditions of
the Lease and agrees to pay when due the Rent (as defined in the Lease) and all
other charges under the

 

1

 

Lease and to perform
all of the terms, covenants and conditions of the Lease as if Assignee had signed
the Lease originally as Tenant named therein.

 

Assignee
hereby agrees to indemnify, defend and hold harmless Assignor from all suits,
actions, damages, charges and expenses, including reasonable attorneys’ fees
and disbursements, that Assignor may sustain by reason of Assignee’s failure to
pay the rent under the Lease or by reason of Assignee’s breach of any of the
terms, covenants or conditions of the Lease.

 

Nothing in
this Assignment shall be deemed to relieve Assignor from any of its obligations
or liabilities under the Lease whether accruing prior to or after the date
hereof, and Assignor hereby agrees to be bound by any amendment to the Lease
after the date hereof which is executed by the then current Tenant (provided,
however, that, notwithstanding anything to the contrary contained herein, it is
understood and agreed that, unless Assignor shall have otherwise expressly
agreed in writing with Landlord, in no event shall Assignor be liable for any
aspect of any such amendment entered into by Landlord and any such assignee
which shall not be a parent, subsidiary, or affiliated company of the original
Tenant under the Lease which shall increase the obligations of the original
“Tenant”
under the Lease). In furtherance of the foregoing, it is specifically
understood and agreed that in the event of an Event of Default under the Lease,
Landlord shall be entitled to commence any action or proceeding against
Assignor or otherwise exercise any available remedies at law or in equity to
enforce the provisions of the Lease against Assignor without first commencing
any action or otherwise proceeding against Assignee or any other party, or
otherwise exhausting all of its available remedies against Assignee or any
other party.

 

Except as
expressly set forth herein, the Lease is unmodified and in full force and
effect. This Assignment shall be binding upon and shall inure to the benefit of
the parties and their successors and assigns.

 

This
Assignment shall be of no force or effect unless consented to by Landlord, in
the event such consent is required under the terms of the Lease.

 

2

 

IN WITNESS
WHEREOF, Assignor and Assignee have duly executed this Assignment of Lease as
of the day and year first above written.

 

	
  Attest:

  	
  LENOX,
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Assistant Secretary

  	
   

  	
   

  	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ASSIGNOR   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Assistant Secretary

  	
   

  	
   

  	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSIGNEE   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ISLAND VIEW
  TCI, L.P.,

  	
   

  
	
   

  	
  a
  Pennsylvania limited partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  , INC.

  	
   

  	
   

  
	
  Witness:

  	
   

  	
  its general
  partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  LANDLORD   

  	
   

  	
   

  
												

 

3

 

EXHIBIT “M”

 

BASE BUILDING WORK

 

 

Exhibit “M”

 

Base Building for Expansion Space

 

The following work will be
completed by the Landlord and is specific to the base building. Work not
specifically listed is to be considered part of the Tenant Work.

 

I.              SITE WORK

 

a.             Site preparation work including cleaning,
grubbing, temporary erosion control.

b.             Surface and subsurface water control during
construction

c.             Excavation, filling, compaction and grading
for building, site improvements, and utilities.

d.             Asphalt paving over prepared sub-base. Patch
and repair of existing paving prior to topping. Asphalt and sub-base sections
per local requirements.

e.             Drive lane and parking area paint. Handicapped
parking and signage, quantities required per local codes.

f.              Concrete curbs and walkways. Curb and walkway
profiles and lay out per land development plans and local requirements.

g.             Storm water management system per approved
land development plans and local requirements.

h.             Landscaping to meet the requirements of the
local code.

 

II.            BUILDING STRUCTURAL
SYSTEM

 

a.             Existing poured in place concrete structure
with truss roof system.

 

III.           BUILDING ENCLOSURE

 

a.             New window system is a combination of new
curtain wall, strip and punched dry glazed insulated window system internally
drained and thermally broken. Finish to
be clear anodized or other manufacturer’s standard single color as
selected by landlord. Glass to be manufacturer standard. Window system to be
Kawneer or approved equal. Interior windowsill by tenant.

b.             Exterior skin to be restored masonry and
concrete. Finishes to match project renderings.

c.             Entrance doors to be narrow style aluminum
doors with 1/4”
tinted glass as manufactured by Kawneer or equal. Color to match windows or
manufacturer standard color selection. Hardware to include surface mounted
closure with push pulls and/or panic devices with brushed aluminum finish.

d.             Exterior doors other than main entrance doors
will be insulated hollow metal.

e.             Building sealants to be compatible with
appropriate substrates.

 

IV.           BUILDING CORE

 

a.             Stair towers to meet requirements as
determined by code. Stairs and landings to be exposed concrete treads and
landings with painted metal railings and stringers. Walls to be painted
block/drywall with exposed structure ceilings.

b.             Mechanical, electrical, machine rooms to have
exposed floor, walls and ceiling.

c.             Building will be delivered to the tenant with
the interiors completely demolished with all core rooms and shafts remaining.

 

 

V.            PLUMBING

 

a.             All plumbing to be installed to meet
requirements of the local code. Provide water and sanitary service to a location within the building wet
column and stack.

 

VI.           FIRE PROTECTION

 

a.             Fire protection system shall be existing
system supplied by city/local municipality underground water main sized to meet
applicable codes. Doubte check value type backflow preventer with bypass meter
to be provided. Sprinkler system shall remain existing. Tenant will be
responsible for sprinkler head relocations and any special fire protection
requirements resulting from tenant plan.

 

b.             Wall hung 10 lb. ABC fire extinguishers shall
be provided at each stair tower. Mechanical and electrical rooms to be provided
with 10 lb. ABC wall hung extinguishers. Additional extinguishers in tenant
space to be provided by tenant as required by code.

 

c.             Core building areas will be fully sprinklered
with chrome (semi-recessed heads) in ceiling areas or upturned heads in areas
of exposed ceilings.

 

VII.          HVAC SYSTEM

 

a.             Provide complete gas fired DX rooftop HVAC by
Carrier or approved equal system in accordance with all governing code
requirements, ashrae standards, NFPA-90 and Boca mechanical code. Cooling
system in tenant space is to be designed to provide a minimum of 1 ton of A/C
per 325 square feet. Average zone size to be 3000 square feet. Additional HVAC
for specialty rooms to be provided by Tenant. Ductwork drops to be provided to
each floor for distribution by the tenant.

b.             Provide ductwork risers and drops in
accordance with the appropriate sections of SMACKNA guidelines.

c.             Provide programmable digital thermostat for
each zone (To be located at time of Tenant fit-out work).

d.             Ventilation system to provide a minimum
outside airflow rate of 20 CFM/person for office space.
Toilet rooms to be designed for minimum ventilation of 1.5CFM/foot.

e.             Furnish copies of all equipment cuts, permits,
spec sheets, and as-builts for mechanical system.

f.              One-year labor/material warrantee/guarantee
from date of tenant commencement and manufacturers standard equipment
warrantee.

 

VIII.        ELECTRICAL SYSTEM

 

a.             The building shall be served by a utility pad
mounted transformer with 277/480 volt, 3-phase service to an indoor electrical
room. The electrical service will be sized to 5 watts/sf for power, 2 watts/sf
for lighting, 5 watts/sf for HVAC and 1 watt/sf for expansion.

 

 

b.             The entire electrical distribution system
shall comply with any applicable local codes and the most recent issue of The
National Electrical Code. Tenant will distribute electric from main
distribution panel in the main electric room.

c.             Lighting to be provided in core areas only.
Lighting to be as follows:

•              Ceiling areas to have 3 lamp 2”x4”
deep cell parabolic florescent fixtures with electronic ballast and T-8 lamps

•              Back of house areas will be industrial grade 2
lamp chain hung or wall/ceiling mounted fluorescent fixtures.

•              Site lighting provided to meet local food
candle requirements

d.             Provide batter back-up emergency lighting
fixtures and exit lights. Quantities as required to meet life safety code in
the Base Building areas.

e.             Provide convenience outlets in all base
building rooms in quantity to meet requirements of NEC.

f.              Fire alarm: Provide a local fire protection
signaling system in accordance with BOCA, ADA, NFPA and local requirements for
all base building rooms. The system shall include:

•              Manual pull stations

•              Sprinkler alarm and supervisory services

•              Automatic smoke and/or heat detection

•              Audio and visual alarm signaling devices

•              Annunciation at locations as approved in AHJ and
Landlord

•              Duct detectors for all AHU’s as required by
code. (Coordinated with Tenant ductwork).

Tenant will be required to
utilize the same FA system for additional fire alarm work resulting from tenant
fit-up design.

g.             Provide complete set of product cuts,
as-builts, warrantees/guarantees for entire electrical system.

 

 

EXHIBIT “N”

 

EXAMPLE OF GROSS UP OF OPERATING EXPENSES

 

 

ISLAND VIEW CROSSING

Operating Expenses - 95% vs. 10% Occupancy

 

Total Sq. Ft. 183,000

 

	
   

  	
   

  	
  95%Occupancy

  	
   

  	
  10% Occupancy

  	
   

  	
  Variance

  	
   

  
	
   

  	
   

  	
  2006 Budget

  	
   

  	
  2006 Budget

  	
   

  	
  2006 Budget

  	
   

  	
  2006 Budget

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Dollars

  	
   

  	
  Per Sq. Ft.

  	
   

  	
  Total Dollars

  	
   

  	
  Per Sq. Ft.

  	
   

  	
  Total Dollars

  	
   

  	
  Per Sq.Ft.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Security / Life Safety

  	
   

  	
  11,600

  	
   

  	
  0.06

  	
   

  	
  11,600

  	
   

  	
  0.06

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Elevator Expense

  	
   

  	
  4,300

  	
   

  	
  0.02

  	
   

  	
  4,300

  	
   

  	
  0.02

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Payroll Expense

  	
   

  	
  39,600

  	
   

  	
  0.22

  	
   

  	
  39,600

  	
   

  	
  0.22

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Landscaping / Exterior
  Maint.

  	
   

  	
  27,000

  	
   

  	
  0.15

  	
   

  	
  27,000

  	
   

  	
  0.15

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Repairs & Maintenance

  	
   

  	
  98,000

  	
   

  	
  0.54

  	
   

  	
  58,300

  	
   

  	
  0.32

  	
   

  	
  39,700

  	
   

  	
  0.22

  	
   

  
	
  Snow Removal

  	
   

  	
  28,000

  	
   

  	
  0.15

  	
   

  	
  23,500

  	
   

  	
  0.13

  	
   

  	
  4,500

  	
   

  	
  0.02

  	
   

  
	
  Janitorial

  	
   

  	
  164,700

  	
   

  	
  0.90

  	
   

  	
  42,300

  	
   

  	
  0.23

  	
   

  	
  122,400

  	
   

  	
  0.67

  	
   

  
	
  HVAC Repairs

  	
   

  	
  18,000

  	
   

  	
  0.10

  	
   

  	
  8,400

  	
   

  	
  0.05

  	
   

  	
  9,600

  	
   

  	
  0.05

  	
   

  
	
  Trash Removal

  	
   

  	
  25,000

  	
   

  	
  0.14

  	
   

  	
  4,600

  	
   

  	
  0.03

  	
   

  	
  20,400

  	
   

  	
  0.11

  	
   

  
	
  Electricity

  	
   

  	
  27,000

  	
   

  	
  0.15

  	
   

  	
  27,000

  	
   

  	
  0.15

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Gas

  	
   

  	
  5,000

  	
   

  	
  0.03

  	
   

  	
  5,000

  	
   

  	
  0.03

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Fuel Oil

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Water & Sewer

  	
   

  	
  4,000

  	
   

  	
  0.02

  	
   

  	
  3,000

  	
   

  	
  0.02

  	
   

  	
  1,000

  	
   

  	
  0.01

  	
   

  
	
  Insurance

  	
   

  	
  30,000

  	
   

  	
  0.16

  	
   

  	
  30,000

  	
   

  	
  0.16

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Office Expense

  	
   

  	
  5,000

  	
   

  	
  0.03

  	
   

  	
  5,000

  	
   

  	
  0.03

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Property Management Fee

  	
   

  	
  74,800

  	
   

  	
  0.41

  	
   

  	
  24,000

  	
   

  	
  0.13

  	
   

  	
  50,800

  	
   

  	
  0.28

  	
   

  
	
  Professional Fees

  	
   

  	
  1,200

  	
   

  	
  0.01

  	
   

  	
  1,200

  	
   

  	
  0.01

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  183,000

  	
   

  	
  1.00

  	
   

  	
  183,000

  	
   

  	
  1.00

  	
   

  	
  0

  	
   

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL OPERATING EXPENSES

  	
   

  	
  746,200

  	
   

  	
  4.08

  	
   

  	
  497,
  800

  	
   

  	
  2.72

  	
   

  	
  248,400

  	
   

  	
  1.36

  	
   

  

 

 

EXHIBIT “O”

 

JOB CREATION FORM

 

 

	
  

  	
   

  	
   

  
	
   

  	
  BUCKS COUNTY CDBG PROGRAM

  
	
   

  	
  NEW
  EMPLOYEE FAMILY INCOME STATEMENT

  
	
   

  	
  Bucks County Loan Fund Job Creation
  Requirements

  
	
   

  	
   

  
	
   

  	
  -INSTRUCTIONS FOR EMPLOYERS-

  

 

1.               This form must be
filled out by each new employee being counted toward satisfying the job
requirements of one job creation for every $35,000 of assistance, and the
requirement that 51 percent of the jobs created must go to persons qualifying
as low/moderate income. Please make copies of the form as needed.

 

2.               Companies receiving
funding assistance must complete the overall job requirements within three
years from the date of provision of the assistance. Failure to comply may
result in the loan being found in default and subject to a recall under the
terms and conditions of the loan agreement. If the term of the loan is shorter
than three years, then the length, of time available to complete the job
requirements will be established in the loan agreement.

 

3.               The form should be
completed on the first day of work. The form is easily integrated as part of
the documentation that new hires are asked to fill.

 

4.               Please note the
reporting period. If the period when the form is being submitted is different
than the one listed, please cross out the years listed and write the newer
period.

 

5.               The
employee’s income before being hired for the job must be given and expressed on
an annual basis. For example if the employee was receiving $200 a week from
unemployment compensation, the employee should list the income as $10,400 (or
$200 times $52 weeks).

 

6.               If the employee’s
prior income was irregular, that is, it varied from week to week or one part of
the year to another due to seasonal employment, then the amount report should
be the amount listed on the most recently filed federal income tax return.

 

7.               To be considered
for job creation credit, the form must be completely filled out. It must also
be signed and dated by the prospective employee.

 

8.               If no jobs were
created since the starting of the assistance or since the last reporting period
(whichever applicable), the portion, of the form identifying the company should
be filled out. In the portion to be filled by the employee, the company should
list in place of the name the following information: “No Jobs Created during
this period.”

 

9.               The original form
should be sent to the county agency from which the company obtained funding
assistance. The agency will forward the form to The Bucks County Department of
Community and Business Development. A copy of the form should be kept in the
company records.

 

10.         The information will be
placed on file and will be subject to the review and inspection by County and
HUD officials and as part of regular program monitoring activities, such as
periodic reporting and auditing.

 

 

Job
Creation Requirements

Updated 12-21-04

 

•                  51% of full-time permanent jobs must be held
by LMI persons

 

•                  Company must provide training for jobs requiring
special skills or education

 

•                  During the application process, Company
should provide list by job title of jobs to be created, including

 

•                  Which jobs are available to LMI persons

•                  Which jobs require special skills/education,
and attainment of such

•                  All jobs are full-time and permanent

•                  Starting salary

•                  Job responsibilities

 

•                  Company should provide completed Employee
Income Statement for each job filled

 

 

Job Creation Requirements for Company

 

•      List job titles,
starting salaries, and major responsibilities of each new job targeted for creation:

 

1.

 

 

2.

 

 

3.

 

 

4.

 

 

5.

 

 

6.

 

•                  Do
jobs require any special skills/training/work experience or education beyond
high school?

•      o     NO

•      o     YES;
please describe how your company will provide these skills/training to your workforce:

 

•                  I
certify the above jobs will be targeted to and held by low/moderate income
persons. The jobs will be full-time and permanent. An Employee Income Statement
shall be completed for each job filled, within the timeframe required.

 

 

	
  Signature

  	
   

  	
   

  	
   

  	
  Date

  	
   

  	
   

  

 

 

BUCKS
COUNTY CDBG PROGRAM

NEW EMPLOYEE FAMILY INCOME STATEMENT

Bucks
County Loan Fund Job Creation Requirements

 

-Company
Information-

 

	
  Company Name:

  	
  Reporting Period: 4/1/05-03/31/06

  
	
   

  	
   

  
	
  Address:

  	
  EIN:

  
	
   

  	
   

  
	
  Contact Person:

  	
  Phone:

  
			

 

-New Hire Information-

 

	
  Name:

  	
  Phone:

  
	
   

  	
   

  
	
  Address:

  	
  Job Title:

  

 

Job
Description/Responsibilities:

Does job require special
skills, training, work experience and/or education beyond high school?

If
answer is “yes”,
please explain:

Race:       
White         Black
        Hispanic
        Asian
        Other:

	
  Gender:
          Male
          Female

  	
  Physical Disability:      Yes      No

  
	
  Starting Salary:

  	
  Job is:     full-time
  or       part-time

  

 

Below please provide the
name and age of all dependents residing in your household, including yourself.
Write the source of income and the amount income earned by each person,
including yourself, before you were hired, as reported on your federal tax return. If there was no income
earned during the year, please list “none,” 

 

	
  NAME

  	
   

  	
  AGE

  	
   

  	
  SOURCE OF INCOME

  	
   

  	
  ANNUAL INCOME

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
  FAMILY SIZE:

  	
   

  	
   

  	
   

  	
  TOTAL FAMILY INCOME:

  	
   

  	
  $

  	
   

  

 

Please review the following
table. Compare your family size to the family size listed. Compare the income
to the income listed for the Family Size. Please answer the following question
(next to the table):

 

	
  Family

  	
   

  	
   

  	
   

  	
   

  
	
  Size

  	
   

  	
  Income

  	
   

  	
   

  
	
  1

  	
   

  	
  $

  	
  38,550

  	
   

  	
   

  
	
  2

  	
   

  	
  $

  	
  44,050

  	
   

  	
   

  
	
  3

  	
   

  	
  $

  	
  49,550

  	
   

  	
  My total family income is

  
	
  4

  	
   

  	
  $

  	
  55,050

  	
   

  	
  o above or o below (check one)

  
	
  5

  	
   

  	
  $

  	
  59,450

  	
   

  	
  income listed on the table

  
	
  6

  	
   

  	
  $

  	
  63,850

  	
   

  	
   

  
	
  7

  	
   

  	
  $

  	
  68,250

  	
   

  	
   

  
	
  8

  	
   

  	
  $

  	
  72,650

  	
   

  	
   

  

 

ANY FALSE STATEMENT MADE
KNOWINGLY AND WILLFULLY MAY SUBJECT THE SIGNER TO

PENALTIES UNDER SECTION 1001
OF THE UNITED STATES CODE.

 

	
   

  	
   

  	
   

  	
   

  
	
  Signature of Applicant

  	
  DateExhibit 10.2

 

AGREEMENT OF SALE

 

THIS AGREEMENT OF SALE (this “Agreement”) is made the 30th day of December, 2005 (the “Effective Date”), by and between LENOX, INCORPORATED, a New
Jersey corporation (“Seller”), party
of the first part, and PREI WHEELER WAY ASSOCIATES, LP, A Pennsylvania limited
partnership, with its principal office located at c/o Preferred Real Estate
Investments, Inc., 1001 E. Hector Street, Suite 100, Conshohocken, PA 19428
(“Buyer”), party of the second part.

 

W I T N E S S E T H

 

1.                                     Definitions.  Whenever used in this
Agreement, the following words and phrases shall have the respective meanings
ascribed to them in the Sections of this Agreement referred to below:

 

(a)                                  “Affidavit” –
as defined in Section 11 hereof.

 

(b)                                 “Brokers” –
as defined in Section 22 hereof.

 

(c)                                  “Buyer” –
as defined in the preamble to this Agreement.

 

(d)                                 “Buyer Parties” –
as defined in Section 10 hereof.

 

(e)                                  “Certification” –
as defined in Section 15 hereof.

 

(f)                                    “Deposit” –
as defined in Section 3 hereof.

 

(g)                                 “Due Diligence Period” – as defined in Section 9 hereof.

 

(h)                                 “Effective Date” – as defined in the preamble
to this Agreement.

 

(i)                                     “Langhorne
Property” – as defined in Section 2 hereof.

 

(j)                                     “Lease” – as defined in Section 6(b) hereof.

 

(k)                                  “Permitted Title Exceptions” – as defined in
Section 4 hereof.

 

(1)                                  “Pollutant” – any condition, contamination or
substance which is regulated by Applicable Environmental Laws. “Applicable
Environmental Laws” shall mean any and all existing or future federal, state
and local statutes, ordinances, regulations, rules, executive orders, standards
and requirements, including the requirements imposed by common law, concerning
or relating to industrial hygiene and the protection of health and the
environment including, without limitation: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601 et
seq.; (ii) the Resource Conservation and Recovery Act of 1976; as
amended, 42 U.S.C. 6901 et  seq.;
(iii) the Clean Air Act, as amended, 42 U.S.C. 7901 et seq.: (iv) the
Clean Water Act, as amended, 33 U.S.C. 1251 et  seq.; (v) the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. 1801 et  seq.;
(vi) the Pennsylvania Solid Waste Management Act, as

 

 

amended,
35 P.S. 6018.101 et  seq.; (vii) the Pennsylvania Clean Streams
Law, as amended, 35 P.S. 691.1 et
seq.;(viii) the Pennsylvania Hazardous Sites Cleanup Act, as amended, 35
P.S. 6020.101 et seq.; (ix) the Pennsylvania Storage Tank and Spill Prevention
Act, as amended, 35 P.S. 6021.101 et  seq.; and (x) the
Pennsylvania Hazardous Material Emergency Planning and Response Act, as
amended, 35 P.S. 6022.101 et  seq. Any terms mentioned in this
Agreement which are defined in any Applicable Environmental Law shall have the
meanings ascribed to such terms in said laws; provided, however, that if any of
such laws are amended so as to broaden any term defined therein, such broader
meaning shall apply subsequent to the effective date of such amendment.

 

(m)                               “Purchase Price” – as defined in Section 3 hereof.

 

(n)                                 “Seller” –
as
defined in the preamble to this Agreement.

 

(o)                                 “Seller Parties”
– as defined in Section 10 hereof.

 

(p)                                 “Settlement” – as defined in
Section 5 hereof.

 

(q)                                 “Settlement Date”
– as defined in Section 5 hereof.

 

(r)                                    “Title Insurer”
– as defined in Section 3.

 

2.                                     Sale of Langhorne
Property.  Subject to all of the terms and
conditions of this Agreement, Seller agrees to sell and convey to Buyer, and
Buyer agrees to purchase from Seller, the property known as 900 Wheeler Way,
Langhorne, Pennsylvania, more particularly described in Exhibit A, attached
hereto and made a part hereof, together with all easements, appurtenances,
rights and privileges belonging, benefiting or in any way pertaining thereto
(hereinafter referred to as the “Langhorne Property”). The Langhornc Property is improved with a building
consisting of approximately one hundred seventy nine thousand (179,000) square
feet of rentable space.

 

3.                                     Purchase Price.  The purchase price for the Langhorne Property
(the “Purchase Price”) shall be Five Million Five Hundred Thousand and
00/100 Dollars ($5,500,000.00) to be allocated as follows:

 

The
Purchase Price shall be paid by Buyer as follows:

 

(a)       One Hundred Thirty
Seven Thousand Five Hundred and 00/100 Dollars ($137,500.00) by check or wire
transfer of immediately available federal funds to Land Services USA, Inc. (“Title Insurer”)
within three (3) business days after the Effective Date.

 

(b)      One Hundred Thirty
Seven Thousand Five Hundred and 00/100 Dollars ($137,500.00) in funds to the
Title Insurer within three (3) days of the expiration of the Due Diligence
Period.

 

(c)       The balance of the
Purchase Price, plus or minus adjustments as provided herein, by wire transfer
of immediately available federal funds to such account as Seller shall direct
at Settlement.

 

2

 

All
sums paid by Buyer in accordance with Subsections 3(a) and 3(b) of this Section
plus interest earned on said sums, shall be referred to as the “Deposit”. The Deposit shall
be held in escrow by the Title Insurer in accordance with the provisions of
this Agreement. The parties hereto direct Title Insurer to place the Deposit in
an interest-bearing account in a federally insured bank or savings and loan association.
At Settlement, the Deposit shall be paid to Seller and credited against the
Purchase Price. If this Agreement is terminated pursuant to Section 8 hereof,
the Deposit shall be applied as provided therein. If Settlement is not
completed hereunder for any other reason whatsoever, the Deposit shall be
returned to Buyer. Buyer’s Federal Taxpayer Identification No. is
                                                  .

 

4.                                     Condition of Title.

 

(a)       Within ten (10) days
after the Effective Date, Buyer shall order a title search from the Title
Insurer, and direct the Title Insurer promptly to deliver to Buyer and Seller,
a preliminary title commitment for an ALTA extended owner’s policy of title
insurance with respect to the Langhorne Property, together with complete and
legible copies of all instruments and documents referred to as exceptions to
title (the “Title Commitment”).

 

Within
thirty (30) days after receipt of the Title Commitment but, in any event, prior
to the expiration of the Due Diligence Period, Buyer shall give Seller notice
of any title exceptions which are reasonably unsatisfactory to Buyer. If any
additional material title exceptions are revealed after the expiration of the
Due Diligence Period, Buyer shall have five (5) days after notice thereof to
object thereto. If, for any reason, Seller is unable or unwilling to take such
actions as may be required to cause such exceptions to be removed from the
Title Commitment, Seller shall give Buyer notice thereof; it being understood
and agreed that the failure of Seller to give such notice within ten (10) days
after Buyer’s notice of objection shall be deemed an election by Seller not to
remedy such matters. If Seller shall be unable or unwilling to remove any title
defects to which Buyer has reasonably objected, Buyer may elect (i) to
terminate this Agreement in which event the Deposit and all interest thereon
shall be returned to Buyer and this Agreement shall be null and void and
neither party shall have any further obligations hereunder, or (ii) to
consummate the transaction contemplated hereby, notwithstanding such title
defect, with a reduction in the Purchase Price, as set forth in Section 4(d),
in which case such defects shall he considered “Permitted Title Exceptions”. Buyer shall make any such
election by written notice to Seller given on or prior to the tenth (10th) business day after
Seller’s notice of its unwillingness to cure such defect. Failure of Buyer to
give such notice shall be deemed an election by Buyer to proceed in accordance with
clause (ii) above.

 

(b)                                 If title to the
Langhorne Property cannot be conveyed to Buyer at Settlement in accordance with
the requirements of this Agreement, then Buyer, as its sole remedy, shall have
the option of either:

 

(i)             Taking such title as
Seller can cause to be conveyed and waiving the unfulfilled condition, with a
reduction in the Purchase Price, as set forth in Section 4(d), whereupon the
parties hereto shall complete the transaction herein contemplated and the
provisions relating to the condition of title shall be deemed waived by Buyer;
or

 

(ii)          Terminating this
Agreement by written notice to Seller and having

 

3

 

the Deposit returned to Buyer whereupon Buyer shall surrender to Seller
Buyer’s copy of this Agreement for cancellation; this Agreement shall become
null and void; and, thereafter, neither party hereto shall have any further
rights, liabilities or obligations hereunder.

 

(c)                                  Seller agrees that so long as this Agreement is
in effect, Seller shall not voluntarily further encumber the Langhorne Property.

 

(d)                                 Notwithstanding anything herein to the
contrary, Seller shall pay or discharge, prior to Settlement, all mortgages and
other monetary encumbrances of a fixed or ascertainable amount. In the event
Seller fails to do so, the Purchase Price shall be reduced in such amount so
that such mortgages or other monetary encumbrances can be satisfied or removed
of record. In the event the parties can not reach agreement on the amount
necessary to discharge such encumbrances which do not have a fixed or
ascertainable amount, Buyer shall have the right to terminate the Agreement no
later than fifteen (15) days after the expiration of the Due Diligence Period
and neither party shall have any further obligations hereunder. If Buyer fails
to terminate this Agreement because the parties have not reached agreement on
the amount necessary to discharge such encumbrances, the parties shall
consummate the transaction contemplated herein, notwithstanding such encumbrances,
without a reduction in the Purchase Price.

 

5.                                     Settlement.

 

The closing of title to the Langhorne Property (“Settlement”) shall
take place on the later to occur of the following: (i) first business day to
occur thirty (30) days after the expiration of the Due Diligence Period, or
(ii) Seller’s occupancy of the Bristol Building (as defined herein), but in no
event later than May 1, 2006 (the “Settlement Date”), with time being of the
essence, at the offices of the Title Insurer or such other place as Buyer and
Seller shall mutually select.

 

6.                                     Provisions With Respect to Settlement.   At
Settlement, the parties shall deliver, or cause to be delivered, each of the
following:

 

(a)                                  Deed.   A special warranty Deed (or
equivalent) for the Langhorne Property duly
executed and acknowledged by Seller in proper recordable form, conveying title
to the Langhorne Property to Buyer subject to the Permitted Title Exceptions.

 

(b)                                 Possession, Lease.   Possession
of the Langhorne Property, subject to the Lease, is to be given by Seller to
Buyer at the completion of Settlement by delivery of the Deed. Concurrently
with the execution and delivery of the Deed, Seller, as tenant, and Buyer, as
landlord, shall execute and deliver a lease agreement covering approximately
140,000 square feet of the Langhorne
Property in the form and on the terms and conditions set forth in Exhibit B,
attached hereto and incorporated herein by reference (the “Lease”) including
but not limited to (i) a two-year initial term with a tenant right to terminate
upon six (6) months prior written notice at any time after March 31, 2007, (ii)
triple net rent of $4.00 per rentable square foot with a twenty-five cent
($0.25) per rentable square foot annual escalation, and (iii) a tenant right to
renew upon six (6) months prior written notice for an additional one-year term
on the same terms and conditions.

 

4

 

(c)                                  FIRPTA Affidavit.   The
Certification required pursuant to the terms of Section 15 below.

 

(d)                                 Settlement Affidavits.   Affidavits
and similar instruments as are reasonably required by the Title Insurer for (i)
the elimination of any standard or printed exceptions in Buyer’s final policy
of title insurance, and (ii) the satisfaction of any Internal Revenue Service
disclosure and reporting requirements, including, but not limited to, Form 1099B.
All such affidavits and similar instruments shall be in form and substance
reasonably satisfactory to Seller, Buyer and the Title Insurer.

 

(e)                                  Settlement Sheet.   A
closing statement to be executed by Seller and Buyer, setting forth the
prorations and adjustments to the Purchase Price as required by this Agreement.

 

(f)                                    Real Estate Reporting Person.   Title
Insurer is designated the “real estate reporting person” for purposes of
Section 6045 of Title 26 of the United States Code and Treasury Regulation
1.6045-4 and any instructions or settlement statement prepared by Title Insurer
shall so provide. Upon the consummation of the transaction contemplated by this
Agreement, Title Insurer shall file Form 1099 information return and send the
statement to Seller as required under the aforementioned statute and
regulation.

 

(g)                                 Resolutions.   Separate resolutions certified
by an officer of Seller and Buyer, respectively, authorizing the appropriate
officers of such party to enter into this Agreement and to carry out the
transactions contemplated hereby in accordance with the terms of this Agreement.

 

(h)                                 Affidavit.   The Affidavit referred to in Section 11
hereof.

 

7.                                     Taxes; Apportionments.

 

(a)                                  All realty transfer taxes hereunder imposed on
the sale of the Langhorne Property shall be
shared equally by Seller and Buyer at Settlement. Buyer shall pay the premium
for any title insurance obtained by Buyer, the cost of any survey obtained by
Buyer and recording fees for recording of the Deed. All other closing and
transaction costs (including, without limitation, sales and use taxes, mortgage
or intangible taxes and similar taxes or charges and recording charges) shall
be paid by Buyer. Seller and Buyer shall, however, be responsible for the fees
of their respective attorneys.

 

(b)                                 Real estate taxes, rents, water and sewer
charges (if any) and all other apportionable charges fairly allocable to the
Langhorne Property shall be prorated as of Settlement on a per diem basis, and
such apportionments shall be made, where applicable, with relation to the
fiscal year or billing period, as applicable, of the levying authority. If the
real estate and/or personal property tax rate and assessments have not been set
by the taxing authorities for the tax year in which Settlement occurs, then the
proration of such taxes shall be based upon the rate and assessments in effect
as of Settlement.

 

(c)                                  Seller reserves the right to protest, or, as applicable,
to continue to protest

 

5

 

any
real estate taxes relating to the period prior to the Settlement Date and to
receive and retain any refunds on account of such real estate taxes.

 

8.                                     Default.

 

(a)                                  If (i) Buyer fails to
complete Settlement in accordance with the terms of this Agreement, or (ii)
Buyer otherwise defaults in the performance of its obligations under this
Agreement and such default is not cured within seven (7) days after written
notice specifying such default is given to Buyer, then in either such event,
Seller may, at its option, terminate this Agreement by written notice to that
effect to Buyer, in which event the Deposit shall be released by the Title
Insurer to Seller who shall retain the Deposit as liquidated and agreed
damages, whereupon Buyer shall surrender to Seller Buyer’s copy of this
Agreement for cancellation, this Agreement shall become null and void and,
thereafter, neither party hereto shall have any further rights, liabilities or
obligations hereunder. Notwithstanding anything to the contrary, the limitation
of liability shall not apply to Buyer’s indemnification obligations under this
Agreement or to any damages (including reasonable attorneys fees, court costs
and other costs of collection) Seller may incur in the event Buyer fails to
authorize the release of the Deposit by Title Insurer to Seller, as required by
this Subsection.

 

(b)                                 If Seller defaults hereunder at or prior to Settlement by failing
to complete Settlement in accordance with the terms of this Agreement, then
Buyer may, as its only options, either (i) seek specific performance of this
Agreement or (ii) terminate this Agreement by written notice to that effect to
Seller, in which event Seller shall pay to Buyer Buyer’s actual out-of-pocket
costs incurred in connection with this transaction as of the date of such
termination not to exceed $50,000.00 in the aggregate (and Buyer shall provide
documentation evidencing such costs to Seller), and not damages relating to
lost profits or lost opportunity, and this Agreement shall be null and void,
the Deposit shall be returned to Buyer, and neither party shall have any rights
or obligations under this Agreement. In no event shall Buyer be entitled to
recover additional money damages against Seller or to compel Seller to spend
any sums of money in excess of those specifically required under this
Agreement.

 

(c)                                  After Settlement, Seller shall not be liable to Buyer in
respect of obligations under this Agreement or any documents delivered at
Settlement or any representations or warranties which survive Settlement for
any amounts in excess of Three Hundred Fifty Thousand Dollars ($350,000.00),
Buyer hereby waiving any and all claims it may have to such recoveries in
excess of the foregoing amount. The foregoing limitations shall apply only to
liabilities admitted by Seller to exist or proven by Buyer to exist through the
final adjudication thereof in an appropriate judicial proceeding.

 

9.                                     Due Diligence; Inspection,
Tests, Surveys, etc.

 

(a)                                  Buyer or its designees
may enter the Langhorne Property at all reasonable times while this Agreement
remains in full force and effect for the purposes of conducting such
inspections, measurements, surveys, engineering studies, environmental assessments,
and other reports as Buyer deems appropriate at Buyer’s sole cost and expense.
Buyer’s right

 

6

 

of inspection pursuant to this Section 9 shall include the right to
enter the Langhorne
Property, but shall not in any way interfere with the conduct of Seller’s
business at the Langhorne Property. No
inspection shall be undertaken without reasonable prior notice to Seller.
Seller or its representatives or contractors shall have the right to be present
at any or all inspections. No inspection shall involve the taking of samples or
other physically invasive procedures without the prior consent of Seller, which
consent shall not be unreasonably withheld, delayed or conditioned. If Buyer
takes, or causes to be taken, any sample from the Langhorne Property in connection with the foregoing,
Buyer shall contemporaneously provide to Seller a portion of such sample being
tested to allow Seller, if it so chooses, to perform its own testing. Buyer
shall promptly deliver to Seller copies of all reports, oral or written,
relating to any testing or other inspection of the Langhorne Property performed by or on behalf of Buyer.
All such action taken by or on behalf of Buyer pursuant to this Section 9 shall
be in accordance with all applicable laws, rules and regulations of the
appropriate governmental authorities having jurisdiction. Buyer shall maintain,
and shall ensure that any representative or contractor that tests or inspects
the Langhorne Property shall maintain, public liability and
property damage insurance insuring Seller against all liability arising out of
any entry or inspection of the Langhorne
Property pursuant to the provisions hereof. Each such insurance policy shall be
in the amount of no less than One Million Dollars ($1,000,000.00) combined
single limit for injury to or death of one or more persons in an occurrence,
and for damage to tangible property (including loss of use) in an occurrence.
The policy maintained, or caused to be maintained, by Buyer shall insure the
contractual liability of Buyer covering the Seller Parties and shall (i) name
Seller as an additional insured party and (ii) contain a provision that the
insurance provided by Buyer thereunder shall be primary and noncontributing
with any other insurance available to Seller. There shall be no exclusion
relating to Pollutants or hazardous substances. Buyer shall provide Seller with
evidence of such insurance coverage prior to any entry or inspection of the Langhorne Property by Buyer or any of its
representatives or contractors. Buyer shall indemnify, defend and hold Seller
harmless of, from and against all claims, costs, expenses, causes of action and
losses of whatsoever kind or nature, including, but limited to, all liability
by reason of injury (including death) to persons and damage to any property and
mechanics’ liens or similar charges which may affect the Langhorne Property, as well as reasonable attorneys fees
and court costs, resulting from the entry onto the Langhorne Property or work conducted thereon by or on
behalf of Buyer as well as all costs, including reasonable attorneys fees, of
enforcing this indemnity. Buyer further agrees that if Settlement is not
completed for any reason, Buyer shall promptly repair any damage to the Langhorne Property caused by said entry and fully
restore the Langhorne Property to the
condition existing prior to said entry.

 

(b)                                 If on or before sixty (60) days after the
Effective Date (the “Due Diligence Period”), Buyer is dissatisfied with the
results of any tests or investigations with respect to the Langhorne Property, f Buyer shall have the right to
terminate this Agreement by giving written notice to Seller on or before the expiration
of the Due Diligence Period. If this Agreement is so terminated, Buyer shall
surrender to Seller Buyer’s copy of this Agreement for cancellation and deliver
to Seller, within five (5) days after the termination date, without charge and
without warranty, copies of all reports, test results, plans and surveys
obtained by Buyer with respect to the Langhorne Property, the Title Insurer shall

 

7

 

return the Deposit to Buyer, and this Agreement shall become null and
void and, thereafter, neither
party shall have any further rights, obligations or liabilities hereunder. If
Buyer does not so terminate this Agreement, Buyer shall have waived its right
to terminate this Agreement pursuant to this Subsection (b). Buyer shall have
no right after the expiration of the Due Diligence Period to terminate this
Agreement pursuant to this Subsection (b).

 

(c)                                  Anything contained in this Agreement to the
contrary notwithstanding, the indemnification provisions in subsection 9(a)
above shall survive the completion of Settlement or other termination of this
Agreement. The repair/restoration obligation of Buyer set forth in subsection
9(a) above shall survive termination of this Agreement but any claim Seller may
have for repair or restoration shall be deemed waived if not made within ninety
(90) days after such termination.

 

(d)                                 Seller shall cooperate with Buyer with respect
to Buyer’s investigation and shall not act in any manner to hinder, obstruct or
prevent the same. The Seller shall promptly deliver to the Buyer within five
(5) days after the Effective Date copies of the documents set forth in Exhibit
C, attached hereto and made a part hereof. Seller makes no representation or
warranty concerning such documents listed in Exhibit C or the completeness or
accuracy of their work product. If, during the Due Diligence Period, Seller
identifies additional documents pertaining to environmental matters at the
Langhorne Property, Seller shall promptly deliver them to Buyer.

 

10.                               Condition of the Langhorne Property.

 

(a)                                  Except as expressly provided in this Agreement,
Buyer shall take the Langhorne Property in the “AS
IS” and “WHERE IS” condition subject to “ALL FAULTS”
including but not limited to all latent and patent defects and liabilities and
the existence of Pollutants on, in, under or at the Langhorne Property, and to
normal wear and tear between the Effective Date and the date of Settlement.
Buyer for itself and its successors in interest, assigns, lessees and any
person or entity which shall subsequent to Settlement acquire any property
interest or right (equitable, beneficial, direct or otherwise) in or with
respect to all or any portion of the Langhorne Property (collectively, the “Buyer Parties”) specifically and expressly
releases the Seller, its present, prior or subsequent shareholders, affiliates,
direct and ultimate parents and subsidiaries, transferees, lessees, partners
and joint venturers, assignees and the past, present and future officers,
directors, shareholders, employees, representatives and agents of it or any of
them (collectively, the “Seller Parties”) from any statutory, contractual or
common law obligation which they or any of them may have to provide the Buyer
Parties with further information relating to the Langhorne Property and is instead relying on its own review, examination, investigation
and inspection and its own results of soil and groundwater samples of the Langhorne Property. Except as expressly provided in
Section 8 of this Agreement, Buyer does not release Seller from any liabilities
for a default by Seller of its obligations hereunder, for Seller’s fraud, for
liability under the warranty in the Deed or for any misrepresentation of any
matters in Section 35.

 

(b)                                 Unless required by law, Buyer agrees that prior
to Settlement as contemplated by this Agreement, neither it nor its contractors
or representatives will contact any governmental agency or authority or take
any action which may cause any governmental

 

8

 

agency or authority to commence any investigation of the Langhorne Property or the business conducted by Seller
at the Langhorne Property (hereinafter the “Business”) or
commence any enforcement action with respect to the Langhorne Property, the Business or Seller.

 

(c)                                  Except as otherwise provided for herein, Buyer
acknowledges that it is assuming all risk that adverse physical or
environmental conditions of the Langhorne
Property or environmental liabilities of the Business or Seller, existing,
contingent or potential, may not have been disclosed by Buyer’s review, examination,
inspection and investigation. Except as its right to bring such a claim or
cause of action is specifically, expressly and directly set out in writing and
provided for in this Agreement, the Buyer Parties waive any and all
contractual, statutory, common law and/or other claims or causes of action
presently existing or which may come into being at any time in the future which
they or any of them may otherwise be entitled to assert against the Seller
Parties arising in whole or in part out of or relating in any way to the past,
present or future conditions or liabilities, including, but not limited to,
environmental conditions or liabilities, of the Langhorne Property or the Business, or of Pollutants emanating from the Langhorne Property.

 

(d)                                 The provisions of this Section 10 shall survive
the completion of Settlement.

 

11.                               Settlement Affidavit.   Buyer
shall confirm in an affidavit to be delivered by Buyer at and effective as of
Settlement and in form and substance reasonably satisfactory to Seller and
Buyer (the “Affidavit”) the following.

 

Buyer represents, warrants and covenants that, except as expressly,
directly and specifically set forth in writing in this Agreement, neither
Seller, nor any agent, officer, employee or representative of Seller has made
any representation, warranty or promise whatsoever, express or implied,
regarding the subject matter of this Agreement or any part thereof for any
purpose whatsoever, including, without limitation, representations, warranties
or promises as to the physical nature or the condition of the Langhorne Property and/or the Business, floor
elevations, drainage patterns, zoning, value, use or permitted use, soil and
subsoil composition and compaction levels, title, the existence or
non-existence of Pollutants on, at, in or under the Langhorne Property, the use of the Langhorne Property,
the existence of any boundary report or any warranty of habitability,
merchantability or fitness for a particular purpose and that Buyer, in
executing, delivering and performing its obligations under this Agreement, is
not relying upon any such statement, representation, promise or information by
or to whomever made or given, directly or indirectly, orally or in writing.

 

12.                               Condemnation.

 

(a)                                  In the event of the taking of all or any
material portion or portions of the Langhorne Property by eminent domain proceedings or the commencement of any such
proceeding, at any time prior to the completion of Settlement, Buyer shall have
the right, at Buyer’s sole option, to terminate this Agreement by giving
written notice to Seller within fifteen (15) calendar days after Seller
notifies Buyer of such proceeding. If this Agreement

 

9

 

is so terminated, Buyer shall surrender to Seller Buyer’s copy of this
Agreement for cancellation, the Deposit shall he returned to Buyer, and this
Agreement shall thereupon become null and void and, thereafter, neither party
hereto shall have any further rights, liabilities or obligations hereunder. If
Buyer does not so terminate this Agreement, the Purchase Price for the
Langhorne Property shall be reduced by the total of any awards or other
proceeds received by Seller with respect to any such taking, or the Purchase
Price for the Langhorne Property shall remain unchanged and at Settlement
Seller shall assign to Buyer all rights of Seller in and to any awards or other
proceeds payable by reason of any such taking.

 

(b)                                 Notwithstanding the foregoing, Seller shall not
settle, compromise or otherwise stipulate to any award or recovery in
connection with any condemnation of the Langhorne Property if such condemnation reduces the value by at least Five
Hundred Thousand Dollars ($500,000) (as reasonably estimated by Seller) and
occurs after the expiration of the Due Diligence Period, without the prior
written approval of Buyer, which approval shall not be unreasonably withheld or
delayed and shall be deemed denied if not given in writing by Buyer within
three (3) business days after Buyer’s receipt of Seller’s request therefor.

 

13.                               Risk of Loss.

 

(a)(i)                       Seller agrees to maintain in effect until the Settlement Date the
insurance policies now in effect on the Langhorne Property.

 

(ii)                                  Buyer shall have the right, at its option, to
insure its equitable interest in the Langhorne Property as of the date of this
Agreement.

 

(b)                                 In the event that the Langhorne Property shall
be damaged or destroyed by fire or other casualty between the date of this
Agreement and the completion of Settlement, such that Buyer is not entitled to
terminate this Agreement as provided for in this Section 13, the obligation of
Buyer to complete Settlement hereunder shall in no way be voided or impaired,
and Buyer shall be required to accept the Langhorne Property in its then
damaged condition without abatement of the Purchase Price, provided, however,
Seller shall assign to Buyer any rights Seller may have in insurance proceeds
payable with respect to such damage or destruction. In the event that the
Langhorne Property shall be damaged or destroyed by fire or other casualty
between the date of this Agreement and the completion of Settlement, such that
the cost to repair the damage or destruction, as reasonably determined by Buyer
and Seller, is in excess of twenty percent (20%) of the Purchase Price, then
Buyer shall have the option, upon written notice given to the Seller within
thirty (30) days from the date of such destruction or damage, to terminate this
Agreement and upon giving of such notice, this Agreement shall be null and
void, the Deposit shall be returned to Buyer, and neither party shall have any
further rights or obligations under this Agreement. If Buyer does not elect to
terminate this Agreement, then Seller shall immediately assign to Buyer any
right Seller may have in insurance proceeds payable with respect to such damage
or destruction. In the event that Buyer’s total costs to restore the Langhorne
Property to its condition prior to such fire or casualty are less than the
actual amount of insurance proceeds received in connection with such damage or
destruction, Buyer shall reimburse such

 

10

 

difference to Seller upon receipt of the excess proceeds (to the extent
such insurance proceeds are received by the Buyer); provided, however, the
foregoing shall not determine the manner or limit the way the building on the
Langhorne Property is re-constructed as a result of such fire or casualty, so
long as the restoration costs do not exceed the replacement costs.

 

14.                               Assessments.   Seller shall be responsible to
pay for all assessments for any improvements (including, but not limited to
roads, curbs, sewer lines and the like) which serve the Langhorne Property,
provided such assessments are levied against the Langhorne Property prior to
the dale of this Agreement, or levied against the Langhorne Property after the
date of this Agreement by reason of work ordered, commenced or completed prior
to the date of this Agreement; and, if Settlement is completed by Buyer, Buyer
shall be responsible to pay for all assessments levied against the Langhorne
Property after the date of this Agreement by reason of work or improvements
ordered after such date.

 

15.                               Certification Regarding FIRPTA.   Seller
covenants and agrees that Seller shall execute, with acknowledgement before a
notary public, and deliver to Buyer at Settlement a certification in the form
of Exhibit “D” attached hereto and made a part hereof (the “Certification”)
confirming that Seller is not a nonresident alien for purposes of United States
Income Tax.

 

In the event that Seller fails to deliver to Buyer at Settlement the
Certification, then, and in such event, Buyer shall deduct and withhold ten
(10%) percent of the Purchase Price and pay such amount so withheld to the
Internal Revenue Service pursuant to forms supplied by the Internal Revenue
Service pending determination by the Secretary of Seller’s tax liability under
FIRPTA, and Buyer shall have no liability or obligation lo Seller with respect
to such sums so withheld. Seller acknowledges Seller’s obligation to complete
Settlement notwithstanding the deduction and withholding of the aforesaid ten
(10%) percent of the Purchase Price.

 

16.                               Environmental Matters.

 

(a)                                  Buyer acknowledges that Buyer has been or will
have been given sufficient opportunity, pursuant to Section 9 hereof, to
inspect the Langhorne Property and conduct the tests, investigations and
environmental audits it deems necessary, and Buyer acknowledges that Buyer
shall rely solely on its own tests, investigations and audits concerning the
environmental condition of the Langhorne Property and not on any reports or
records provided or to be provided by Seller under this Section. If Buyer
terminates this Agreement, a copy of any environmental audits, tests and/or
non-proprietary reports of the Langhorne Property prepared for or by Buyer or
Buyer’s agent shall be delivered to Seller upon written request to Buyer.

 

(b)                                 Subject to Sub-section (e) below, Buyer, for
itself, and the other Buyer Parties, agrees to assume full responsibility for and
protect, defend, indemnify and hold harmless the Seller Parties from and
against any and all liabilities, obligations, losses, damages (whether direct,
special, compensatory, consequential, equitable, punitive or otherwise),
claims, penalties, fines, interest, judgments, costs, reasonable counsel fees
and direct and indirect expenses of every kind and nature which may be asserted
or levied

 

11

 

against
the Seller Parties at any time or which they or any of them may suffer, incur,
be put to pay or expend arising out of, resulting from, by reason of or
relating in any way, in whole or in part, to:

 

(i)                                 the breach or the
partial breach or the partial or total falsity of any representation, covenant
or warranty made by Buyer contained in this Agreement or otherwise made by or
on behalf of Buyer, its officers, directors, employees, representatives or
agents;

 

(ii)                              any Pollutant
existing after Settlement at, in, on, under or in the vicinity of in the
Langhorne Property unless caused by the Seller Parties;

 

(iii)                           the transportation
and/or disposal at any time subsequent to Settlement of any soil, sludge,
debris, water or other material from the Langhorne Property or which originated
at, in, on, under, or in the vicinity of the Langhorne Property that contains
any Pollutant;

 

(iv)                          all claims,
conditions, causes of action or circumstances which may lead to liabilities,
whether common law, contractual, statutory, regulatory, administrative,
contingent or otherwise (either as a result of exposure, contamination,
discharge, threatened contamination, sale, injury, manufacture or otherwise)
with respect to Pollutants which existed at the Langhorne Property after
Settlement unless caused by the Seller Parties;

 

(v)                             all costs, including
court costs and reasonable attorneys’ fees, of enforcing the indemnity granted
herein.

 

(c)                                  Subject to Subsection
(e) below, the Buyer Parties agree that should the Seller Parties or any of
them be required to reimburse, indemnify or contribute to any person or entity (other
than directly to the Buyer Parties) with respect to or as a result of any legal
or equitable payment or undertaking or claim arising in whole or in part out of
or relating in any way to the past, present or future condition or liabilities,
including, but not limited to, environmental conditions or liabilities, of the
Langhorne Property or the Business or of Pollutants emanating from the
Langhorne Property, Buyer will take whatever action may be reasonably necessary
to assure that no such reimbursement, indemnity or contribution need be made by
the Seller Parties and will otherwise save the Seller Parties harmless from
having to make such payment. The intent of this provision is to obviate the
necessity and expense of the Seller Parties having to remain a party on the
record in any action commenced against them or any of them by any person or
entity relating in any way to an action arising in whole or in part out of the
past, present or future condition or liabilities, including, but not limited
to, environmental conditions or liabilities, of the Langhorne Property or the
Business or of Pollutants emanating from the Langhorne Property.

 

(d)                                 The obligations of
Buyer set forth in this Section 16 shall survive the completion of Settlement.

 

(e)                                  The foregoing waivers
and releases shall not release Seller from any liability arising out of fraud
or criminal conduct.

 

12

 

17.                                 Operation of the Langhorne Property.

 

Between the
date hereof and the Settlement Date, Seller shall maintain the Langhorne
Property substantially in accordance with Seller’s current maintenance
practices, subject to reasonable wear and tear and subject to the occurrence of
any damage or destruction to the Langhorne Property by casualty (in which event
the terms of Subsection 13(b) shall govern) or other causes or events beyond
the reasonable control of Seller; provided, however, that in no event shall Seller
be obligated to make any capital repairs or improvements.

 

18.                                          Notices. All notices, statements, demands,
requests, consents, communications and certificates from either party hereto to
the other shall be made in writing and sent (i) by United States registered or
certified mail, return receipt requested, postage prepaid, (ii) by courier
service with guaranteed overnight delivery, or (iii) by telefacsimile confirmed
by hard copy notice given pursuant to clause (ii) above, addressed as follows:

 

(a)  If intended for Seller:

 

Lenox,
Incorporated

100 Lenox
Drive

Lawrenceville,
NJ 08648

Attn: Louis A.
Fantin, Esquire

Facsimile
Number:   (609) 844-1595

 

(b) If intended for Buyer:

 

PREI Wheeler
Way Associates, LP

c/o Preferred
Real Estate Investments, Inc.

1001 E. Hector
Street

Suite 100

Conshohocken,
PA 19428

Attn: Legal
Department

Facsimile
Number: 610-834-7593

 

With a copy
to:

 

Scott S.
Butler, Esquire

Kaplin Stewart
Mcloff Reiter & Stein, P.C.

350 Sentry
Parkway Building 640

Blue Bell, PA
19422-0765

Facsimile
Number: 610-260-1240

 

or such other
addresses or entities as either party hereto may from time to time direct by
service of notice on the other party as provided above. Any such notices,
statements, demands, requests, consents, communications or certificates shall
be deemed received on the date delivered or the date delivery is refused.

 

13

 

19.                                              No Recording. This Agreement shall not be
filed of record by or on behalf of Buyer in any office or place of public
record and, if Buyer shall fail to comply with the terms hereof by recording or
attempting to record the same, such act shall not operate to bind or cloud the
title to the Langhorne Property. Seller shall, nevertheless, have the right
forthwith to institute appropriate legal proceedings to have the same removed
from record. If Buyer or any agent, broker or counsel acting for Buyer shall
cause or permit this Agreement or a copy thereof to be filed in an office or
place of public record, Seller, at its option, and in addition to Seller’s
other rights and remedies, may treat such act as a default of this Agreement on
the part of Buyer. However, the filing of this Agreement in any suit or other
proceedings in which such document is relevant or material shall not be deemed
to be a violation of this Section.

 

20.                                              Waiver of Tender of Deed and Purchase Monies.
The tender of executed Deeds by Seller and the tender by Buyer of the portion
of the Purchase Price payable at Settlement are hereby mutually waived, but
nothing herein contained shall be construed as a waiver of Seller’s obligation
to deliver the Deeds and/or of the concurrent obligation of Buyer to pay the
Purchase Price payable at Settlement.

 

21.                                              Assignment - Nominee. Buyer shall have the
right without Seller’s consent by notice to Seller prior to Settlement, to
designate an affiliate to take title to the Langhorne Property. Otherwise,
Buyer shall not be permitted to assign this Agreement or any of its rights hereunder,
or to name nominees to take title to the Langhorne Property or any portion or
portions thereof, without the prior written consent of Seller, which consent
shall not be unreasonably withheld, conditioned or delayed.

 

22.                                              Brokerage. Seller and Buyer represent and
warrant that each has not dealt with any broker, agent, finder or other
intermediary in connection with the conveyance of the Langhorne Property or
this Agreement other than Fennelly Associates, Inc. and Preferred Real Estate
Advisors, Inc. (the “Brokers”).

 

Each party
agrees to indemnify, defend and hold the other harmless of, from and against
any damages, costs, claims, losses or liabilities whatsoever (including
reasonable attorney’s fees, expenses and court costs) arising from any breach
by such party of its warranties, representations and agreements set forth in
this Section 22. Seller shall be responsible for the payment of the commission
due Fennelly Associates, Inc. pursuant to a separate agreement. Buyer shall be
responsible for the payment of the commission due Preferred Real Estate
Advisors, Inc. pursuant to a separate agreement.

 

23.                                              Time of the Essence. Time, wherever mentioned
herein, shall be of the essence of this Agreement.

 

24.                                              Binding Effect. This Agreement shall be
binding upon and inure to the benefit of Seller and Buyer and their respective
successors and assigns.

 

14

 

25.                                              Entire Agreement. This is the entire agreement
between the parties hereto regarding the transaction contemplated hereby and
there are no other terms, covenants, conditions, warranties, representations or
statements, oral or otherwise, of any kind whatsoever. Any agreement hereafter
made shall be ineffective to change, modify, discharge or effect an abandonment
of this Agreement in whole or in part unless such agreement is in writing and
signed by the party against whom enforcement of the change, modification,
discharge or abandonment is sought.

 

26.                                              Headings. The headings incorporated in this
Agreement are for convenience and reference only and are not a part of this
Agreement and do not in any way control, define, limit, or add to the terms and
conditions hereof.

 

27.                                              Governing Law. This Agreement shall be
construed, interpreted and governed by the laws of the Commonwealth of
Pennsylvania.

 

28.                                              Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be an original, and such
counterparts together shall constitute one and the same instrument.

 

29.                                              Limitation of Liability. The liability of each
party under this Agreement shall be limited to and enforceable solely out of
each party’s respective assets. No direct or indirect partner, trustee,
director, officer, employee, beneficiary or shareholder of a party or any of
its direct or indirect partners shall have any liability with respect to the
obligations of such party hereunder.

 

30.                                              Survival of Settlement. Except as provided in
Section 35 herein below,
acceptance by Buyer of the executed Deed at Settlement shall constitute an
acknowledgment and/or waiver by Buyer of full performance by Seller of all of
Seller’s obligations hereunder. Such of Buyer’s obligations hereunder as shall
possibly imply performance or observance after Settlement shall survive
Settlement, notwithstanding any presumption to the contrary. Any indemnity
undertakings by either party hereunder shall also survive Settlement or the
early termination of this Agreement.

 

31.                                              Attorney’s Fees.  In the event of litigation between the parties
with respect to this Agreement or the transactions contemplated hereby, the
prevailing party therein shall be entitled to recover from the losing party
therein its reasonable attorney’s fees and costs of suit.

 

32.                                              Property Information and Confidentiality.

 

(a)                                           Buyer agrees that, prior to the Settlement, Buyer shall use diligent
efforts to keep all “Property Information” (as defined below) confidential, and
that Property Information shall not, without the prior consent of Seller, be
disclosed by Buyer or Buyer’s Representatives (as hereinafter defined), except
as otherwise set forth herein, and that Property Information will not be used
for any purpose other than investigating and evaluating the Langhorne Property.
Moreover, Buyer agrees that, prior to the Settlement, the Property Information
will be transmitted only to Buyer’s Representatives who need to know the
Property Information for the purpose of investigating and evaluating the
Property, and

 

15

 

who are informed by Buyer of
the confidential nature of the Property Information and who agree in writing to
comply with and be bound by this Section 32 for the benefit of Seller. The
provisions of this Section 32 shall not apply to Property Information which is
a matter of public record.

 

(b)                                          As used in this Agreement, the term
“Property Information” shall mean:

 

(i)                                   All information and documents
relating to the Langhorne Property, the operation thereof or the sale thereof
(including, without limitation, existing leases, services contracts and
licenses) that Seller furnished to, or otherwise made available to, Buyer or
its directors, officers, employees, affiliates, partners, brokers, agents,
title insurers, surveyors or other representatives, including, without
limitation, lenders, attorneys, accountants, contractors, consultants,
engineers and financial advisors (collectively, “Buyer’s Representatives”).

 

(ii)                                All analyses, compilations, data,
studies, reports or other information or documents prepared or obtained by
Buyer or Buyer’s Representatives containing or based in any material part on
any information or documents described in the preceding clause (i).

 

(c)                                           Notwithstanding the foregoing,
nothing contained herein shall be construed so as to prohibit Buyer or Buyer’s
Representatives from making any disclosure required by law or with regard to
any lawsuit, or to any potential investors, tenants, purchasers, lenders or any
other Buyer’s Representatives.

 

33.                                              Joint Undertaking. 
 In addition to the obligations
expressly required to be performed hereunder by Seller and Buyer, each party
agrees to cooperate with the other and to perform such other acts and to
execute, acknowledge and deliver, prior to and after Settlement, such other
instruments, documents and materials as a party may reasonably request and as
shall be necessary in order to effect the consummation of the transactions
contemplated hereby; provided that no such other instrument, document or
material shall either extend or enlarge the obligations of the non-requesting
party beyond the express undertakings of this Agreement or shall require or
could require the non-requesting party to make any payment or expend any funds
which are not expressly provided for herein or which the requesting party shall
not reimburse. This Section shall survive Settlement.

 

34.                                            Waiver of Trial by Jury.   EACH PARTY HEREBY WAIVES, IRREVOCABLY AND
UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF
OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN
CONNECTION HEREWITH, THE PROPERTY, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF
OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.

 

35.                                              Representations and Warranties of
Seller.

 

To induce Buyer to enter
into this Agreement, Seller represents and warrants to Buyer as follows:

 

16

 

(a)                                           Status and Authority of Seller.   Seller is duly organized, validly existing
and in good standing under the laws of its state of formation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Seller has
duly qualified to transact business in each jurisdiction in which the nature of
the business conducted by it requires such qualification.

 

(b)                                          Action of Seller.   Seller has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by Seller on or
prior to Settlement, such document shall constitute the valid and binding
obligation and agreement of Seller, enforceable against Seller in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the rights and remedies of creditors.

 

(c)                                           No Violations of Agreements.   Neither the execution, delivery or
performance of this Agreement by Seller, nor compliance with the terms and
provisions hereof, will result in any breach of the terms, conditions or provisions
of, or conflict with or constitute a default under, or result in the creation
of any lien, charge or encumbrance upon the Langhorne Property pursuant to the
terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness
or any other agreement or instrument by which Seller is bound.

 

(d)                                          Litigation.   Seller has received no written notice of and, to
Seller’s actual knowledge as of the date hereof, no action or proceeding is
pending or threatened and no investigation looking toward such an action or
proceeding has begun, which questions the validity of this Agreement or any
action taken or to be taken pursuant hereto or which will result in any change
in the business, operation, affairs or condition of the Langhorne Property,
result in or subject the Langhorne Property to a liability, or involve
condemnation or eminent domain proceedings against any part of the Langhorne
Property. Seller shall cure all violations affecting the Langhorne Property
prior to Settlement, to the extent the same can be cured by the payment of
money.

 

(e)                                           Agreements, Etc.   Seller has not entered into any contract or
agreement with respect to the Langhorne Property which will be binding on Buyer after
Settlement other than contracts and agreements which Buyer has agreed in
writing to assume prior to the expiration of the Due Diligence Period or which
will be terminated by Seller prior to Settlement (Seller shall be responsible
for any and all costs and fees related to such contracts or agreements).

 

(f)                                             Leases.   There are no oral or written leases or rights
of occupancy for any portion of the Langhorne Property, except the Lease as set
forth in Exhibit “B” to be executed by the parties at Settlement.

 

(g)                                          Environmental.   Seller has not installed any
underground storage tanks on the Langhorne Property.

 

17

 

The term
“Seller’s knowledge” as used in this Agreement means the actual knowledge of
senior corporate officers of Seller without investigation. The foregoing individuals
are the persons with the best knowledge and familiarity with the
representations and warranties above and are the best persons to make such
statements.

 

The
representations and warranties made in this Agreement by Seller shall be
continuing and shall be deemed remade by Seller as of the Settlement Date with
the same force and effect as if made on, and as of, such date. All
representations and warranties made in this Agreement by Seller with respect to
the Langhorne Property shall survive Settlement.

 

Each of the
representations and warranties of Seller contained in this Section: (i) is made
subject to the information disclosed in the due diligence materials delivered
by Seller to Buyer; (ii) is made as of the date hereof, and (iii) shall be true
in all material respects as of the Settlement Date, except and to the extent
any such representation and warranty is rendered inaccurate by any (aa)
information disclosed in the due diligence materials, (bb) litigation,
condemnation proceedings, casualties and events beyond Seller’s reasonable
control that occur or (as applicable) are commenced after the date hereof, or
(cc) other matters permitted in this Agreement or otherwise approved in writing
by Buyer; and (iii) shall survive the Settlement as provided in this Section 35.

 

36.                                              Representations and Warranties of Buyer.

 

To induce Seller to enter in this Agreement,
Buyer represents and warrants to Seller as follows:

 

(a)                                           Status and Authority of Buyer.   Buyer is duly organized, validly existing and
in good standing under the laws of its state of formation, and has all
requisite power and authority under the laws of such state and its respective
charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Buyer has
duly qualified to transact business in each jurisdiction in which the nature of
the business conducted by it requires such qualification.

 

(b)                                          Action of Buyer.   Buyer has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon
the execution and delivery of any document to be delivered by Buyer on or prior
to Settlement, such document shall constitute the valid and binding obligation
and agreement of Buyer, enforceable against Buyer in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.

 

(c)                                           No Violations of Agreements.   Neither
the execution, delivery or performance of this Agreement by Buyer, nor
compliance with the terms and provisions hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or encumbrance
upon the Langhorne Property pursuant to the terms of any indenture, mortgage,
deed of trust, note, evidence of indebtedness or any other agreement or
instrument by which Buyer is bound.

 

18

 

(d)                                          Litigation.   Buyer has received no written notice of and,
to Buyer’s actual knowledge as of the date hereof, no action or proceeding is
pending or threatened and no investigation looking toward such an action or
proceeding has begun, which questions the validity of this Agreement or any
action taken or to be taken pursuant hereto or which will result in any
material adverse change in the business, operation, affairs or condition of
Buyer or result in or subject Buyer to a material liability.

 

The term
“Buyer’s knowledge” as used in this Agreement means the actual knowledge of the
senior officers of Buyer without investigation.

 

The
representations and warranties made in this Agreement by Buyer shall be
continuing and shall be deemed remade by Buyer as of the Settlement Date with
the same force and effect as if made on, and as of, such date. All
representations and warranties made in this Agreement by Buyer shall survive
Settlement.

 

37.                                              Contingency.   Contemporaneously with the execution hereof,
Buyer and Seller shall execute a lease agreement (the “Additional Lease”)
covering approximately 125,000 square feet of space in the building located in
Bristol, Pennsylvania commonly known as “Island View Crossing” (the “Bristol Building”),
in the form and on the terms and conditions set forth in Exhibit E, attached hereto and incorporated
herein by reference.

 

38.                                              Counterparts.   This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original hereof, but all
of which, taken together, shall constitute one and the same instrument.

 

[Signatures to
Follow]

 

19

 

 

20

 

 

21

 

Exhibit “A”

 

LEGAL
DESCRIPTION OF PREMISES– LANGHORNE, PENNSYLVANIA

 

 

EXHIBIT
A

 

900 Wheeler Way

Langhorne, Pennsylvania

 

ALL THAT CERTAIN lot, parcel or piece of land, situate, lying and being
in the Township of Middletown, County of Bucks, Commonwealth of Pennsylvania,
more particularly bounded and described according to a plan prepared by Martin
J. Eustace Jr., P.E., Consulting
Engineer for Cabot 95 Trust title ‘Conveyance Plan, Lot 1-4 Parcel A, Bucks
County Business Park’ dated June 25,
1979 and last revised September 10, 1979 as follows, to wit:

 

BEGINNING at a point on the center line of
Wheeler Way (80 feet wide) said point bears North 15 degrees 37 minutes 31 seconds East 548.39
feet from the intersection of the centerline of Wheeler Way with the title line
in the bed of LR 291 Spur-Maple Avenue and running thence (1) along other lands
now or formerly of Cabot 95 Trust, crossing the Westerly right of way line of
Wheeler Way, a 10 foot wide sanitary sewer easement, running along the center
line of a 40 foot wide drainage easement crossing a 32 foot wide rail siding
easement and finally crossing a 20 foot wide easement or right of way for
installing, constructing and maintaining sign or signs, North 74 degrees 22
minutes 29 seconds West 1020.90 feet to a point on the Easterly right of way
line of LR 281 parallel, thence (2) along the Easterly right of way line of LR
281 parallel and running along the 20 foot wide sign easement, North 05 degrees
37 minutes 11 seconds East 224.38 feet to a point of curvature; thence (3)
still along the same and still along the sign easement along a line curving to
the right, having a radius of 631.78 feet an arc distance of 42.73 feet the
chord bearing North 07 degrees 33 minutes 26 seconds East a distance of 42.72
feet to a point of tangent; thence (4) still along
the said right of way of LR 281 parallel North 14 degrees 24 minutes 41 seconds
West 77.14 feet to a point of curve; thence (5) still along the same along a
line curving to the right having a
radius of 666.78 feet the arc distance of 229.42 feet the chord bearing North
25 degrees 25 minutes 23 seconds East a distance of 228.29 feet to a point of
tangent; thence (6) still along the same South 54 degrees 43 minutes 12 seconds
East 36.00 feet to a point, thence (7) still along the same North 35 degrees 16
minutes 48 seconds East 576.17 feet to
a point; thence (8) along Lot 1-2 now or formerly lands of Bucks County
Industrial Development Authority and running along the centerline of a 40 feet
wide spur track and general utility easement, South 74 degrees 22 minutes 29
seconds East 355.79 feet to a point a corner of lands now or formerly of United
States Postal Services, thence (9) along the aforesaid lands South 15 degrees
37 minutes 31 seconds West 518.57 feet crossing the Southerly side of the 40
feet wide spur track and general utility easement and crossing a 15 foot wide
slope easement and a 30 foot wide access and general utility easement to a
point, thence (10) still along the same and running along the aforementioned
access and general utility easement, South 74 degrees 22 minutes 29 seconds
East 482.15 feet recrossing a 10 feet wide sanitary sewer easement and the
Westerly right of way line of Wheeler Way, to a point on the centerline of
Wheeler Way, thence (11) along the said centerline of Wheeler Way along lands
now or late of Guilford Glazer, South 15 degrees 37 minutes 31 seconds West 566.93
feet to the point and place of beginning.

 

CONTAINING 19.2250
acres of land, more or less.

 

BEING LOT 1-4 as
shown on the above mentioned Plan.

 

ALSO KNOWN AS
BUCKS COUNTY UNIFORM PARCEL IDENTIFIER:

TAX PARCEL #
22-21-66.

 

 

Exhibit “B”

 

LEASE

 

 

LEASE

 

THIS Lease is made and
entered into this
                         ,
2006, (“Commencement Date”) by and between PREI WHEELER WAY ASSOCIATES, LP, a
Pennsylvania limited partnership with its principal office located at 1001 E.
Hector Street, Suite 100, Conshohocken, PA 19428 (“Landlord”), and LENOX,
INCORPORATED, a New Jersey corporation (“Tenant”), as follows:

 

1.                                        Premises.                            Subject to the terms and conditions
set forth in this Lease, Landlord leases to Tenant, and Tenant leases from
Landlord, a portion of Landlord’s property located at 900 Wheeler Way,
Langhorne, Pennsylvania 19047 (the “Property”) consisting of the area of
approximately                    square feet [SUBJECT TO REVIEW AND FINAL DETERMINATION BY BOTH
PARTIES], as shown on the plat attached as Exhibit A hereto (the “Leased
Premises”), together with permitted access at all reasonable times to and the
non-exclusive use of the parking lot and the common areas in and around the
Property. Landlord shall have the right to alter the common areas so long as
said changes do not negatively affect Tenant’s parking, signage, ingress/egress
and car/foot traffic.

 

2.                                        Term.

 

(a)                                Initial Term.   The initial term of this Lease
(“Initial Term”) shall begin on the Commencement Date and end on the date which
is (i) the day immediately preceding the second anniversary of the Commencement
Date, if the Commencement Date is the first day of a calendar month, or (ii)
the last day of the calendar month in which the second (2nd) anniversary of the
Commencement Date occurs, if the Commencement Date is any day other than the
first day of a calendar month, unless earlier terminated or renewed in
accordance with this Lease.

 

(b)                               Renewals.   Tenant shall have the option to
extend the term of this Lease upon the same terms, covenants and conditions
contained in this Lease for an additional one-year term (“Renewal Term”).

 

(c)                                  Exercise of
Renewal.   Tenant must exercise the renewal option provided for in Section 2(b),
if at all, by written notice to Landlord delivered at least six (6) months
prior to the expiration date of the then Initial Term; provided, however, that
in order to avoid any forfeiture or inadvertent lapse of any right to extend or
renew as aforesaid, if Tenant shall not have given notice of such election to Landlord
by such date in respect of the Renewal Term and shall not have given Landlord
prior written notice of intention not to extend or renew as aforesaid, then
Tenant’s right to exercise such option shall nevertheless continue, as shall
its tenancy hereunder (under the same terms and conditions as theretofore in
effect and notwithstanding that the Initial Term shall have expired), until the
date which is ten (10) business days after Landlord shall have given notice to
Tenant that Tenant has failed to give its notice of such election, and Tenant’s
time to give notice of such election shall continue until the expiration of
such ten (10) business day period after the giving of such notice from
Landlord. Upon the giving of notice of renewal and extension in accordance with
the foregoing provisions of this

 

1

 

Section, the Term shall thereupon be renewed
and extended for the Renewal Term in accordance with such notice without
further act by Landlord or Tenant, the same as if such notice had been timely
given hereunder.

 

(d)                                           Optional Termination.   Provided that Tenant is not in material
default in the performance of any of its obligations hereunder on the date that
Tenant delivers the Early Termination Notice (as defined herein) and on the
Early Termination Date (as defined herein), Tenant may terminate this Lease at
any time after March 31, 2007 by giving Landlord written notice of termination
(the “Early Termination Notice”) at least six (6) months prior to the
termination date (the foregoing date of termination is referred to as the
“Early Termination Date”). Notwithstanding anything to the contrary contained
herein, in the event Tenant exercises its renewal option pursuant to Section
2(c), Tenant shall be deemed to have waived its right to terminate this Lease
pursuant to this Section 2(d) and such termination option shall automatically
become null and void.

 

3.                                         Rent.

 

(a)                                  Base Rent.   “Base Rent” means
the amount of $4.00 per square foot per year (i.e., $560,000.00 based on
140,000 square feet) for the first lease year, $4.25 per square foot per year
for the second lease year and $4.50 per square foot per year for the Renewal
Term, if any.

 

(b)                               Payment.   Base Rent will be
payable in advance in equal monthly installments of one-twelfth of the annual
Base Rent, without demand, not later than the first day of each and every month.

 

(c)                                  Property Taxes.   As additional
rent, Tenant shall pay its pro rata share (         %) [TO BE DETERMINED UPON FINAL SQUARE FOOTAGE
FIGURE SET FORTH IN SECTION  1] of the real
property taxes payable during the term of this Lease with respect to the
Property. Tenant’s pro rata share of real property taxes shall be paid by
Tenant in equal monthly installments in advance along with the payments of Base
Rent in such amounts as are reasonably estimated and billed by Landlord based
upon the total real property taxes due for the fiscal year of the applicable
taxing authority. Landlord may revise its estimate and may adjust such monthly
payment at the end of any calendar month. After Landlord has received the tax
bills for each year, Landlord will notify Tenant of the amount of real estate
taxes on which Tenant’s pro rata share is based, and the amount of Tenant’s pro
rata share. If the aforesaid monthly payments on account of Tenant’s pro rata
share for a given year or partial year are greater than Tenant’s share of the
taxes payable for a given year or partial year, Tenant shall receive a
credit from Landlord for the excess against installments of Tenant’s pro rata
share next becoming due to Landlord (in the event of a credit to the Tenant
upon termination of the Lease, Tenant shall receive the credit in the form of a
refund check payable to the Tenant), and if said payments are less than Tenant’s
share, Tenant shall forthwith pay Landlord the difference.

 

2

 

4.                                    Use.

 

(a)                               Use by Tenant.   Tenant will use the Leased Premises primarily
for distribution/warehousing, retail and offices and all incidental purposes
related thereto, and for no other purposes whatsoever. Tenant, its employees,
invitees and licensees shall observe all laws (including without limitation
applicable health, safety and environmental laws) applicable to the use and
occupancy of the Leased Premises.

 

(b)                              Signs.   Tenant may place signs directing customers to
its Leased Premises and maintain all signage that currently exists at the
Property, so long as Tenant obtains Landlord’s prior written consent to the
size, location and design of any new signs, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

Any sign must
comply with all zoning and other applicable governmental ordinances and laws.
Upon termination of this Lease, Tenant shall remove all such signs and shall
repair all damage occasioned hereby, which obligation shall survive the
expiration or earlier termination of this Lease.

 

(c)                               Parking.   Tenant will have full use of the
parking lot at the Property.

 

(d)                              Loading Dock and Trash Dumpsters/Compactors.   Tenant will have full and exclusive use of
the loading docks at the Property. Tenant shall also have the right to locate
its trash dumpsters/compactors in the loading dock area or in such other area(s)
as mutually agreed upon by the parties.

 

5.                                          Utility Expenses.

 

All utility
expenses for the Leased Premises shall be borne by Tenant. Landlord will
arrange for and pay the cost of installation of meters to measure utilities
used by Tenant in the Leased Premises. If any such separate meter is not
installed by the Commencement Date, Landlord and Tenant will agree upon a
reasonable allocation of the affected service between the Leased Premises and
the remainder of the Property.

 

6.                                         Maintenance.

 

(a)                               Landlord’s
Responsibilities.   Landlord shall maintain in good order,
condition, and state of repair all exterior and structural portions (including,
but not limited to, the roof, exterior walls, interior load bearing walls,
floors and foundation) and all mechanical systems (plumbing, heating and
ventilation, air conditioning and electrical) at the Property (including the
Leased Premises), and all parking areas, drives, sidewalks and landscaping.
Landlord will be responsible for snow removal. Tenant shall reimburse Landlord
for its pro rata share (      %) [TO BE DETERMINED UPON FINAL SQUARE FOOTAGE
FIGURE SET FORTH IN SECTION
1] of such reasonable sums (the
“Operating Expenses”) which Landlord expends (and which are not reimbursed by
Landlord’s insurer or other third party) in effecting its repairs and
maintenance hereunder, provided, however, the cost of any item which,

 

3

 

by standard accounting practice, should be capitalized, will not be
included in Operating Expenses. Notwithstanding the foregoing, in lieu of
capital expenses for repairs or replacements to the Property (including without
limitation any upgrades for the purpose of reducing Operating Expenses or for
the purpose of complying with applicable laws, codes and regulations), there
shall be included within Operating Expenses for each calendar year, from and
after the expenditure in question, the annual amortization of such expenditure
over the useful life of the item(s) in question, as reasonably determined by
Landlord and including an interest factor equal to the Prime Rate of interest
as published from time to time in The Wall Street Journal plus two
percent (2%). Notwithstanding the foregoing, the term “Operating Expenses”
shall not include expenses of constructing tenant improvements for any tenant
in the Property.

 

(i)                                          Tenant’s pro rata share of Operating
Expenses shall be paid by Tenant in equal monthly installments in advance along
with the payments of Base Rent in such amounts as are reasonably estimated and
billed by Landlord based upon the total Operating Expenses due for the current
calendar year. Landlord may revise its estimate and may adjust such monthly
payment at the end of any calendar month. After Landlord has received the final
statement for the Operating Expenses for the previous calendar year, Landlord
will notify Tenant of the amount of Operating Expenses on which Tenant’s pro
rata share is based, and the amount of Tenant’s pro rata share. If the
aforesaid monthly payments on account of Tenant’s pro rata share for a given
year or partial year are greater than Tenant’s share of the Operating Expenses
payable for a given year or partial year, Tenant shall receive a credit from
Landlord for the excess against installments of Tenant’s pro rata share next
becoming due to Landlord (in the event of a credit to the Tenant upon
termination of the Lease, Tenant shall receive the credit in the form of a
refund check payable to the Tenant), and if said payments are less than
Tenant’s share, Tenant shall forthwith pay Landlord the difference.

 

(ii)                                    In determining Operating Expenses for
any year, the following adjustments shall be made:

 

(a)                                     if less than ninety-five percent
(95%) of the Property rentable area shall have been occupied by tenants at any
time during such year, Operating Expenses shall be deemed for such year to be
an amount equal to the like expenses which Landlord reasonably determines would
normally be incurred had such occupancy been ninety-five percent (95%)
throughout such year (subject, however, to the understanding that in no event
shall such determination by Landlord result in Tenant’s pro rata share of such
Operating Expenses exceeding the actual cost to Landlord of providing the
services which were included in Operating Expenses for the period in question);

 

4

 

(b)                                    if any tenant of the Property
supplies itself with a service at any time during such year that Landlord would
ordinarily supply without separately charging therefor, then Operating Expenses
shall be deemed to include the cost that Landlord would have incurred had
Landlord supplied such service to such tenant (subject, however, to the
understanding that in no event shall such determination by Landlord result in
Tenant’s pro rata share of such Operating Expenses exceeding the actual cost to
Landlord of providing the services which were included in Operating Expenses
for the period in question);

 

(c)                                     if any Operating Expenses incurred
for the Property consist of shared costs and expenses with one or more other
buildings or properties, whether pursuant to a reciprocal easement agreement,
cost sharing agreement, common area agreement, or otherwise, the shared costs
and expenses shall be equitably allocated by Landlord between the Property and
such other buildings or properties.

 

(b)                                        Tenant’s
Responsibilities.   Tenant shall, at Tenant’s sole expense,
maintain, repair and replace the non-structural interior portion of the Leased
Premises in good order, condition and repair. Tenant shall also be responsible
for the cost of any repairs or replacements made necessary by the negligent or
intentional acts of Tenant, its employees, licensees or invitees. Tenant shall
be responsible for lightbulb replacement, regular cleaning services for the
Leased Premises, and trash removal from the Leased Premises.

 

5

 

7.                                         Alterations.

 

(a)                                       By Tenant.   Tenant shall make no alterations, additions,
or improvements to the Leased Premises without obtaining Landlord’s prior
written consent, which shall not be unreasonably withheld, conditioned or
delayed, except for interior, nonstructural alterations of a decorative nature
that do not exceed more than Two Dollars ($2.00) per rentable square foot of
the Leased Premises in the aggregate. As a condition to performing such alterations,
whether or not requiring Landlord’s consent, Landlord may require Tenant to
provide Landlord with all plans and specifications for the proposed alterations
and with all agreements with proposed contractors and subcontractors. Upon
completion of any alterations requiring Landlord’s consent hereunder, Tenant
shall pay to Landlord an amount equal to the lesser of (i) five percent (5%) of
the total cost of such alterations, or (ii) Landlord’s construction manager’s
fee in reviewing and inspecting such alterations (such construction manager’s
rate is $100.00 per hour), to reimburse Landlord for review of all plans and
specifications and final inspection of the work. All such alterations,
additions, and improvements shall be at Tenant’s sole expense and shall be
performed by qualified contractors and subcontractors (Tenant shall submit the
names of such contractors and subcontractors to Landlord prior to performing
any alterations or additions). Tenant shall indemnify Landlord against the
imposition of mechanics’ or materialmen’s liens resulting from work performed
by Tenant’s contractors. All improvements, additions, and alterations to the
Leased Premises (except trade fixtures) shall become the property of Landlord
and shall be surrendered up to Landlord upon the expiration of this Lease
unless otherwise agreed by Landlord and Tenant. Landlord acknowledges that all
conveyors, trade fixtures and warehousing equipment and racking are the
property of Tenant.

 

Prior to
Tenant performing any alterations to the Leased Premises in excess of
$20,000.00 for which a lien could be filed against the Leased Premises or the
Property, Tenant shall have its contractor execute and file in the appropriate
public office a Waiver of Mechanics’ Lien, in statutory form and provide
Landlord with an original copy thereof.

 

(b)                                     By
Landlord.  Landlord
may erect such alterations, additions, or improvements to the Property as
Landlord in its sole discretion deems reasonably necessary or appropriate for
the proper maintenance or operation of the Property. In so doing, Landlord and
its contractors shall not interfere unreasonably with Tenant’s use and
occupancy of the Leased Premises. Landlord shall repair any damages caused by
its activities hereunder, and no such alterations, additions or improvements
shall permanently or unreasonably alter or affect the visibility of or access
to the Leased Premises or diminish the size or usable square feet of the Leased
Premises.

 

6

 

8.                                        Indemnity, Insurance.

 

(a)                                      Indemnity by Tenant. Except as otherwise
provided in subsection (e), Tenant shall defend, indemnify and hold Landlord
harmless from and against any and all loss, damage, liability, or expense,
including reasonable attorneys’ fees, resulting from any injury to or death of
any person in the Leased Premises, or any loss of or damage to any property in
the Leased Premises caused by, arising out of, or related to any reason
whatsoever, unless such loss, injury or damage is the result of the negligence
or willful misconduct of Landlord, its agents or employees.

 

(b)                                    Indemnity by Landlord. Except as otherwise
provided in subsection (e), Landlord shall defend, indemnify and hold Tenant
harmless (or shall cause a third-party tenant in the Property to defend,
indemnify and hold Tenant harmless) from and against any and all loss, damage,
liability, or expense, including reasonable attorneys’ fees and the costs of
any deductible maintained by Tenant under its public liability insurance
policy, resulting from any injury to or death of any person in or about any
portion of the Property within the exclusive control of Landlord or third-party
tenant, or any loss of or damage to any property in or about any portion of the
Property within the exclusive control of Landlord or third-party tenant, caused
by, arising out of, or related to any reason whatsoever, except to the extent
that such loss, injury or damage was caused by the negligence of Tenant, its
agents or employees.

 

Except as
otherwise provided in subsection (e), Landlord shall defend, indemnify and hold
Tenant harmless from and against any and all loss, damage, liability, or
expense, including reasonable attorneys’ fees and the costs of any deductible
maintained by Tenant under its public liability insurance policy, resulting
from any injury to or death of any person in or about any portion of the common
areas of the Property or any loss or damage to any property in or about any
portion of the common areas of the Property (to the extent any such loss,
damage or liability is covered by Landlord’s insurance, including any
deductibles for which Landlord elects to self insure); provided, however, to
the extent that such loss, injury or damage in the common areas of the Property
was caused by the negligence of Landlord, its agents or employees, the
foregoing cap set forth above shall not apply.

 

Landlord shall
not, however, be liable for and the foregoing indemnification shall not extend
to, any damage or injury caused by the negligence of Tenant, its agents or
employees, unless Landlord is required by this Lease to insure against damage
or injury.

 

(c)                                      Public Liability Insurance. Each party shall
maintain, at its sole expense, public liability insurance with a combined
single limit of not less than $2,000,000, insuring against injury to or death
of any person or loss of or damage to any property, and specifically endorsed
to cover the contractual liability for which it is responsible as set forth in
subsection (a) or (b), as applicable. Each party shall provide the other with a
certificate of insurance evidencing its compliance with this subsection and
providing that the other party will be given written notice by the insurer at
least 30 days prior to any termination or amendment of the insurance. All of
Tenant’s liability insurance policies shall name Landlord, the Property manager
and at Landlord’s request any mortgagee of all or any portion of the Property
as additional insureds.

 

7

 

(d)                                  Fire Insurance. Landlord shall maintain fire
and extended coverage insurance against the Property equal in amount to the
full replacement value (exclusive of fixtures and personal property owned or
affixed to the Property by Tenant).

 

(e)                                    Waiver of Subrogation. Landlord and Tenant
each release and relieve the other, and on behalf of their insurers waive their
entire right of recovery against the other, for loss or damage arising out of
or incident to the casualties covered by the insurance required to be
maintained by this Lease, regardless of whether loss or damage arises out of
the negligence of the party released, its agents, invitees, employees, or
otherwise. Both Landlord and Tenant shall require that their respective
insurance policies contain a waiver of subrogation clause or endorsement.

 

9.                                             Damage or Destruction.

 

(a)                                     Leased Premises. If the Leased Premises are
damaged by casualty to such an extent as to render them partially or wholly
untenantable, Landlord shall proceed promptly to repair and restore the Leased
Premises in a good and workmanlike manner, but in no event shall Landlord be
obligated to expend in its repair or restoration of the Leased Premises more
than the proceeds of insurance actually received by Landlord as a result of the
casualty. During the period of repairs, Tenant’s obligation to pay rent shall
be abated in proportion to the portion of the Leased Premises rendered
untenantable by the casualty.

 

(b)                                  Extensive Damage. If damage to the Leased Premises resulting from a
casualty cannot, in the reasonable estimation of Landlord, be restored to
Tenant’s use within 180 days of the occurrence of the casualty, then either
party may elect to terminate this Lease by delivery of written notice to that
effect to the other party.

 

10.                                      Assignment and Subletting.

 

(a)                                  By Tenant.  Except as set forth in this subsection, Tenant
shall not assign, sublet or otherwise transfer its rights in the Leased
Premises or this Lease without first obtaining the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding anything to the contrary, Tenant may, without
Landlord’s prior consent, assign, sublet, or otherwise transfer its rights in
the Leased Premises or this Lease in connection with a sale or transfer of all
or substantially all assets of Tenant, or in connection with a corporate
reorganization of Tenant or Tenant’s operations, whether effected by sale of
stock, merger, consolidation, spin off, exchange or otherwise. In the case of
any transfer of this Lease, whether or not Landlord’s consent is required,
Tenant shall remain liable for all obligations under the Lease.

 

(b)                                  By Landlord.   Landlord may, without Tenant’s prior consent,
assign, transfer, mortgage, or otherwise encumber all or any portion of
Landlord’s interest in the Leased Premises. In connection with such a
transaction, Tenant shall provide within ten business days of

 

8

 

receiving a
written request from Landlord a statement in writing certifying to any third party
the following:

 

(1)                                  That this Lease is unmodified and is in full force and effect, or, to
the extent that this Lease is modified, a statement specifically describing the
modifications;

 

(2)                                  That to the best of Tenant’s knowledge, Landlord is not in default
under this Lease, or if Landlord is in default, a specific description of the
nature and extent of the default;

 

(3)                                  The amount, if any, of any prepayment of rent or other prepayments made
by Tenant hereunder; and

 

(4)                                  An agreement to notify the third party to whom the certificate is
directed of any matters for which that third party reasonably requires
notification from Tenant.

 

Tenant’s
rights in the Leased Premises under this Lease shall be subordinate to the
rights of any mortgagee or purchaser of the Property, whether that mortgagee or
purchaser’s rights are prior or subsequent in time to those of Tenant. In the
event there is a mortgage encumbering the Property, Landlord agrees to use
reasonable efforts to obtain such mortgagee’s standard form of nondisturbance
agreement for the benefit of Tenant.

 

11.                                      Surrender. Upon the termination of this Lease
for whatever reason, Tenant shall surrender the Leased Premises to Landlord in
good condition and repair (including, without limitation, all additions and
alterations constructed on the Leased Premises), reasonable wear and tear and
casualty not attributable to Tenant’s act or omission excepted. If the Leased
Premises are damaged at the time of surrender due to an act or omission of
Tenant, Tenant’s responsibility for that damage shall be limited to that
portion of the repair or restoration not paid by casualty insurance maintained
by Landlord. In removing its fixtures and personal property from the Leased
Premises, Tenant shall repair any damage to the Leased Premises resulting from
that removal. If Tenant fails to remove any of such property or to adequately
repair damage caused by the removal, Landlord may at Landlord’s option remove
the property or repair the damage, in which event the cost of removal or repair
shall be due and payable by Tenant to Landlord upon demand. Should Tenant
continue to occupy the Leased Premises after the expiration of the Term,
including any renewal thereof, such tenancy shall (without limitation of any of
Landlord’s rights or remedies therefor) be one at sufferance at a minimum
monthly rental equal to one hundred fifty percent (150%) of the rent payable
for the last full month of the Term. No holdover by Tenant or payment by Tenant
after the expiration or earlier termination of this Lease shall be construed to
extend the Term or prevent Landlord from immediate recovery of the Leased
Premises by summary proceedings or otherwise. In the event that Landlord is
unable to deliver possession of the Leased Premises to a new tenant or to
perform improvements for a new tenant as a result of any holdover by Tenant
after receipt of Landlord’s notice to vacate, Tenant shall be

 

9

 

liable to Landlord for all
damages, including, without limitation, consequential damages, that Landlord
suffers as a result of Tenant’s holdover.

 

12.                                    Default.

 

(a)                                   Events of Default.   The following shall constitute an Event of
Default under this Lease:

 

(1)                             Tenant’s failure to pay any sum due
under this Lease within ten days after receiving written notice from the
Landlord of nonpayment (provided, however, that Landlord shall not be required
to provide written notice to Tenant more than two times during any twelve month
period);

 

(2)                             a party’s
failure to cure any event of noncompliance with this Lease within 30 days after
receiving written notice from the other party specifying the event of
non-compliance (or such longer period as is reasonably required to correct any
such default, provided such party promptly commences and diligently commences
to effectuate a cure).

 

(3)                             Tenant sublets the Leased Premises or assigns this Lease in any
circumstance where such sublease or assignment shall violate the provisions of
Section 10 hereof; or

 

(4)                             Tenant fails to maintain the insurance required pursuant to Section 8
hereof and such failure continues for more than five (5) days after written notice thereof from Landlord;

 

(b)                               Landlord’s Rights.   Upon the occurrence of any Event
of Default, Landlord shall have the right, at its sole option, (i) to terminate
this Lease, and notwithstanding such termination, to exercise such other rights
and remedies as are provided by law or in equity, or (ii) without terminating
the Lease, to enter upon the Leased Premises and remove Tenant’s personal
property therefrom and to relet all or any portion thereof for any term, at
such rent and upon such conditions as may be determined by Landlord in its sole
discretion. Landlord shall have the obligation to mitigate damages by reletting
the Leased Premises (provided, however, in no event shall Landlord be required
to (i) lease the Leased Premises over other available space in the Property,
(ii) accept a below-market rental rate for the Leased Premises, (iii) accept
any tenant whose creditworthiness is unsatisfactory to Landlord, in its sole
discretion, reasonably exercised, or (iv) accept any tenant whose business is
not compatible with the other tenants of the Property, as determined by
Landlord in its sole discretion, reasonably exercised) and Tenant shall be
liable to Landlord for the difference between the sums received by Landlord as
a result of such reletting and the amounts due from Tenant under this Lease,
together with all costs and expenses (including reasonable attorney’s fees)
incurred by Landlord in connection with such reletting. The

 

10

 

rights, options, elections, powers, and
remedies contained in this Lease and those at law and equity shall be construed
as cumulative and no one of them shall be exclusive of any of the others. The
exercise by Landlord or Tenant of any one right or remedy shall not impair any
other right or remedy until all obligations upon the part of the other party
shall have been fully performed.

 

If Base Rent,
additional rent or any other sum due from Tenant to Landlord shall be overdue
for more than ten (10) days after written notice from Landlord to Tenant
(provided, however, that Landlord shall not be required to provide written
notice to Tenant more than two times during any twelve month period), it shall
thereafter bear interest at the rate of ten percent (10%) per annum until paid.

 

AFTER AN EVENT OF DEFAULT OR THE EXPIRATION OF THE TERM, FOR THE SOLE AND EXPRESS
PURPOSE OF OBTAINING POSSESSION OF THE LEASED PREMISES, TENANT HEREBY
AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD
IN THE COMMONWEALTH OF PENNSYLVANIA, AS ATTORNEY FOR TENANT AND ALL PERSONS CLAIMING UNDER OR THROUGH
TENANT, TO APPEAR FOR AND CONFESS
JUDGMENT AGAINST TENANT FOR
POSSESSION OF THE LEASED PREMISES, AND AGAINST ALL PERSONS CLAIMING UNDER OR
THROUGH TENANT, IN FAVOR OF
LANDLORD, FOR RECOVERY BY LANDLORD OF POSSESSION THEREOF, FOR WHICH THIS
AGREEMENT OR A COPY HEREOF VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT;
AND THEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE
LEASED PREMISES, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT
ANY STAY OF EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED
THE SAME SHALL BE TERMINATED AND
THE POSSESSION OF THE LEASED PREMISES REMAINS IN OR IS RESTORED TO
TENANT, LANDLORD SHALL HAVE THE RIGHT
UPON ANY SUBSEQUENT DEFAULT TO CONFESS JUDGMENT IN ONE OR MORE FURTHER ACTIONS IN THE MANNER AND FORM SET FORTH ABOVE TO RECOVER POSSESSION
OF SAID LEASED PREMISES FOR SUCH SUBSEQUENT DEFAULT. NO SUCH TERMINATION OF
THIS LEASE, NOR TAKING, NOR
RECOVERING POSSESSION OF THE LEASED PREMISES SHALL DEPRIVE LANDLORD OF ANY
REMEDIES OR ACTION AGAINST TENANT
FOR RENT OR FOR DAMAGES DUE OR TO BECOME DUE FOR THE BREACH OF ANY CONDITION OR
COVENANT HEREIN CONTAINED, NOR SHALL THE BRINGING OF ANY SUCH ACTION FOR RENT,
OR BREACH OF COVENANT OR
CONDITION NOR THE RESORT TO ANY OTHER REMEDY HEREIN PROVIDED FOR THE RECOVERY
OF RENT OR DAMAGES FOR SUCH BREACH BE CONSTRUED AS A WAIVER OF THE RIGHT TO
INSIST UPON THE FORFEITURE AND TO OBTAIN POSSESSION IN THE MANNER HEREIN PROVIDED.

 

11

 

(c)                                   Tenant’s Rights. If Landlord is in default
hereunder, Tenant, after 30 days notice that Tenant intends to cure such
default, or without notice if in Tenant’s reasonable judgment an emergency
exists, shall have the right, but not the obligation, to cure such default, and
to recover from Landlord the reasonable costs incurred by Tenant which were
necessary to cure such default (the “Cure Costs”). Tenant shall provide
Landlord with all back-up information reasonably requested by Landlord with
respect to the Cure Costs. If Landlord fails to pay the Cure Costs within
thirty (30) days after Tenant’s written request for payment (and receipt of the
back-up documentation), Tenant may deduct any amounts which are not the subject
of a bona-fide, good faith dispute by landlord against the next installment(s)
of Base Rent payable by Tenant hereunder; provided, however, that in no event
shall the amount setoff by Tenant in any calendar month exceed fifteen percent
(15%) of the rent payable by Tenant for such calendar month.

 

(d)                                    Nonwaiver.  Either party’s failure to give notice of any
event of non-compliance with any provision of this Lease to the other party, or
either party’s failure to avail itself of any right or remedy available to it
upon the occurrence of any Event of Default shall not constitute a waiver of
the right to exercise any or all of its rights or remedies upon the subsequent
occurrence of a similar or different Event of Default. No waiver of either
party’s rights or remedies hereunder shall be effective unless set forth in a
writing signed by such party, and then only to the extent set forth therein.

 

13.                                     Quiet Enjoyment. Landlord covenants that upon
the payment of rent and the observance and performance of all the terms,
covenants, and conditions of this Lease on Tenant’s part to be observed and
performed, Tenant may peaceably and quietly enjoy the Leased Premises, subject,
nevertheless, to the terms and conditions of this Lease and all restrictions of
record.

 

No
interruption of the services referred to in this Lease shall ever be deemed an
eviction or disturbance of Tenant’s use and possession of the Leased Premises
or any part thereof or render Landlord liable to Tenant for damages, permit
Tenant to abate rent or otherwise relieve Tenant from performance of Tenant’s
obligations under this Lease. Notwithstanding the foregoing, if any “Essential
Service” (as hereinafter defined) which Landlord is required to provide to the
Leased Premises pursuant to the terms of this Lease is interrupted due to the
negligence of Landlord, its agents or employees (a “Service Interruption”) and such
Service Interruption causes Tenant to be unable to reasonably use all or a
material portion of the Leased Premises (the “Affected Space”) for a period of
three (3) or more days after written notice thereof from Tenant to Landlord
(the “Interruption Notice”), then, the Base Rent shall abate in the proportion
that the rentable square footage of the Affected Space bears to the rentable
square footage of the Leased Premises, which abatement shall commence on the
fourth (4th) day following Landlord’s
receipt of the Interruption Notice and expire the date that the Service
Interruption is remedied. Notwithstanding the foregoing, in no event shall
Tenant be entitled to abatement or any other remedy if the interruption of any
Essential Service is caused by the negligence of Tenant, its agents or
employees. Except as may be otherwise provided for in Section 9 herein, in the
event of any Service Interruption pursuant to which Tenant shall exercise its
right to abate Base Rent in accordance with the foregoing provisions of this
Section, it is

 

12

 

understood and
agreed that Tenant shall not be entitled to pursue any other rights against
Landlord (including, without limitation, any right to terminate this Lease or
to claim an actual or constructive eviction or to bring an action for money
damages) unless such Service Interruption shall have continued for fifteen (15)
or more days. For purposes of this Section, an “Essential Service” shall mean
the service provided by the HVAC systems, plumbing and waste disposal systems
and electrical systems (to the extent supplied by Landlord). Nothing contained
herein shall expand or limit Tenant’s right to abatement in the case of a fire
or other casualty or condemnation as provided in the “Damage or Destruction”
section of this Lease.

 

14.                                         Notice.  All notices, claims, demands and other
communications hereunder will be in writing and will be either delivered
personally, mailed (by registered or certified mail, return receipt requested
and postage prepaid), sent by reputable overnight courier service for next
business day delivery, or sent by facsimile transmission, as follows:

 

if to Tenant:                                                                            Chief Executive Officer

Lenox Group
Inc.

Island View Crossing

1414 Radcliffe
Street

Bristol, Pennsylvania
19007

 

with a copy
to:                                                                 Louis A. Fantin

Senior Vice
President, Secretary and General Counsel

Lenox Group
Inc.

Island View
Crossing

1414 Radcliffe
Street

Bristol,
Pennsylvania 19007

 

if to
Landlord:                                                                     PREI Wheeler Way Associates, LP

1001 E. Hector
Street

Suite 100

Conshohockcn,
PA 19428

Attn: Legal
Department

Facsimile
Number: 610-834-7593

 

with a copy
to:                                                                Scott C. Butler, Esquire

Kaplin Stewart
Meloff Reiter & Stein, P.C.

350 Sentry
Parkway Building 640

Blue Bell, PA
19422-0765

Facsimile
Number: 610-260-1240

 

or to such other address as the party to whom
notice is to be given may have furnished to the other party in writing in
accordance herewith. Any such communication shall be deemed to be received on
the date delivered or the date delivery is refused.

 

13

 

15.                                     Estoppel. Tenant shall from time to time,
within five (5) business days after request by Landlord, execute, acknowledge
and deliver to Landlord a statement certifying that this Lease is unmodified and
in full force and effect (or that the same is in full force and effect as
modified, listing any instruments or modifications), the dates to which rent
and other charges have been paid, and whether or not, to the best of Tenant’s
knowledge, Landlord is in default or whether Tenant has any claims or demands
against Landlord (and, if so, the default, claim and/or demand shall be
specified), and such other information reasonably requested by Landlord.

 

16.                             Landlord’s Liability.  Notwithstanding anything to the contrary
contained in this Lease, it is expressly understood and agreed by Tenant that
none of Landlord’s covenants, undertakings or agreements are made or intended
as personal covenants, undertakings or agreements by Landlord or its partners,
shareholders or trustees, or any of their respective partners, shareholders or
trustees, and any liability for damage or breach or nonperformance by Landlord,
its agents or employees or for the negligence of Landlord, its agents or
employees, shall be collectible only out of Landlord’s interest in the Property
and no personal liability is assumed by, nor at any time may be asserted
against, Landlord or its partners, shareholders or trustees or any of its or
their partners, shareholders, trustees, officers, agents, employees, legal
representatives, successors or assigns, if any; all such liability, if any,
being expressly waived and released by Tenant. Notwithstanding anything to the
contrary contained in this Lease, in no event shall Landlord be liable to
Tenant for any consequential damages, lost profits, loss of business or other
similar damages, regardless of whether the same arises out of the negligence of
Landlord, its agents or employees.

 

17.                                 As-Is Lease.   Tenant has inspected the Leased Premises, is
familiar with the condition thereof, and accepts the Leased Premises in its “AS
IS” condition, without any representation or warranty by Landlord, express or
implied. Tenant expressly acknowledges that Landlord shall have no obligation
to perform any improvements to the Leased Premises to prepare the Leased
Premises for Tenant’s occupancy.

 

18.                                Landlord’s Right to Cure. Landlord may (but
shall not be obligated), on thirty (30) days notice to Tenant (except that no
notice need be given (i) in case of emergency, or (ii) in the event a default
by Tenant causes a default under any other agreement to which Landlord is a
party) cure on behalf of Tenant any default hereunder by Tenant, and the cost
of such cure (including any attorney’s fees incurred) shall be deemed rent
payable upon demand.

 

19.                                   Miscellaneous.

 

(a)                                      Time of Essence. Time is of the essence with
respect to the performance of all of the obligations of Landlord and Tenant
contained in this Lease.

 

(b)                                     Benefit. This Lease shall be binding upon and
inure to the benefit of the parties, and their respective permitted successors
and assigns.

 

(c)                                      Complete Agreement. This Lease contains all of
the covenants and agreements between the parties relating to Tenant’s use and
occupancy of the Leased Premises

 

14

 

and the Property from the Commencement Date.
No prior agreement or understanding pertaining to the same shall be valid or of
any force and effect. This Lease may not be altered, changed, modified, or
added to except in a writing signed by the party sought to be charged.

 

(d)                                     Applicable Law. This Lease shall be governed
in accordance with the laws of the Commonwealth of Pennsylvania.

 

(e)                                      Fees. If there is any litigation proceeding
between the parties related to this Lease, the prevailing party will be
entitled to recover all reasonable costs and expenses (including, without
limitation, reasonable attorneys’, accountants’ and other professional fees and
expenses).

 

20.                                    Financial Statements. Upon the request of any
mortgagee, prospective mortgagee or prospective purchaser of the Property,
Tenant shall provide to Landlord unaudited copies of Tenant’s latest annual
financial statements (prepared in accordance with generally accepted accounting
principles), certified by an officer of Tenant to be true.

 

21.                                    Force Majeure. If Landlord or Tenant is
delayed or prevented from performing any of their respective obligations under
this Lease due to strikes, acts of God, shortages of labor or materials, war,
civil disturbances or other causes beyond the reasonable control of the
performing party (“Force Majeure”), the period of such delay or prevention
shall be deemed added to the time herein provided for the performance of any
such obligation by the performing party. Notwithstanding the foregoing, events
of Force Majeure shall not extend any period of time for the payment of Base
Rent, additional rent or other sums payable by either party or any period of
time for the written exercise of an option or right by either party.

 

22.                                    Reservation of Landlord’s Rights.
Notwithstanding anything to the contrary contained herein, Landlord explicitly
reserves the following rights (subject, however, to the applicable limitations
and conditions thereon as are expressly set forth in this Lease, and provided
that Landlord agrees to use commercially reasonable efforts not to materially
interfere with Tenant’s business operations in the Leased Premises, which shall
be deemed to include, but not limited to, performing any work hereunder outside
normal business hours provided Tenant allows Landlord to access the Leased
Premises during such times):

 

(a)                                      to temporarily close doors, entrance ways, corridors or any other
public areas of the Property in connection with Landlord’s performance of its
express obligations under this Lease to decorate or to make required repairs,
or permitted alterations, additions or improvements, whether structural or
otherwise, in and about the Property and the common areas, or temporarily
suspend services or the use of facilities in connection with any such work, so
long as there shall be no interruption, other than to a de minimus extent, of
Tenant’s access to the Leased Premises;

 

(b)                                     to regulate delivery of supplies and the usage of the loading docks,
(subject, however, to the understanding that such right of Landlord hereunder
shall not extend or

 

15

 

apply to, or
otherwise affect or limit, Tenant’s right to the use of the loading dock as
provided for herein);

 

(c)                                      to enter the Leased Premises at reasonable times during Tenant’s usual
business hours when Tenant’s management personnel are present, upon prior
written notice to Tenant (Landlord shall provide at least three (3) days prior
written notice if Tenant is forced to relocate individuals in the Leased
Premises due to Landlord exercising its rights hereunder), to inspect the
Leased Premises and to make repairs to the Leased Premises or other portions of
the Property as Landlord shall be required or shall have the right to make pursuant
to the express provisions of this Lease;

 

(d)                                     to erect, use and maintain pipes, ducts, wiring and conduits, and
appurtenances thereto, in and through the Leased Premises in reasonable
locations, provided that Landlord shall use reasonable efforts to avoid
material interference to the conduct of Tenant’s business operations therein;

 

(e)                                      to utilize the roofs, telephone, electrical and janitorial closets,
equipment rooms, building risers and similar areas that are used by Landlord
for the provision of Property services; and

 

(f)                                        to show the Leased Premises, at reasonable times during Tenant’s usual
business hours when Tenant’s management personnel are present, upon prior
written notice to Tenant, to prospective mortgagees and purchasers and, during
the six (6) months prior to expiration of the Term, to prospective tenants.

 

23.                                  Environmental. Both parties shall conduct, and
cause to be conducted, all operations and activity at the Property in
compliance with, and shall in all other respects applicable to the Property
comply with, all applicable present and future federal, state, municipal and
other governmental statutes, ordinances, regulations, orders, directives and
other requirements, and all present and future requirements of common law,
concerning the environment (hereinafter collectively called “Environmental
Statutes”). Tenant hereby agrees to indemnify and to hold harmless Landlord,
its agents and employees, of, from and against any and all expense, loss or
liability suffered by Landlord by reason of Tenant’s breach of any of the
provisions of this Section, including, but not limited to, (i) any and all
expenses that Landlord, its agents and employees may incur in complying with
any Environmental Statutes, (ii) any and all fines or penalties assessed, or
threatened to be assessed, upon Landlord, its agents and employees by reason of
a failure of Tenant to comply with any obligations, covenants or conditions set
forth in this Section, and (iii) any and all legal fees and costs incurred by
Landlord, its agents and employees in connection with any of the foregoing.
Landlord hereby agrees to indemnify and to hold harmless Tenant, its agents and
employees, of, from and against any and all expense, loss or liability suffered
by Tenant by reason of Landlord’s breach of any of the provisions of this
Section, including, but not limited to, (i) any and all expenses that Tenant,
its agents and employees may incur in complying with any Environmental
Statutes, (ii) any and all fines or penalties assessed, or threatened to be
assessed, upon Tenant, its agents and employees by reason of a failure of
Landlord to comply with any obligations, covenants or conditions set forth in
this

 

16

 

Section, and
(iii) any and all legal fees and costs incurred by Tenant, its agents and
employees in connection with any of the foregoing. The parties’ covenants,
obligations and liabilities under this Section shall survive the expiration or
earlier termination of this Lease.

 

IN TESTIMONY WHEREOF,
WITNESS the signatures of the parties hereto as of the day and year first above
written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  PREI WHEELER WAY ASSOCIATES, LP, a

  	
  LENOX, INCORPORATED

  
	
  Pennsylvania limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  PREI Wheeler Way, Inc., a Pennsylvania

  	
   

  
	
  corporation, its general partner

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attachment:  Exhibit A –
  Description of Leased Premises

  	
   

  

 

17

 

Exhibit A

 

Description of Leased
Premises

 

 

Exhibit C

 

ENVIRONMENTAL
RELATED DOCUMENTS

 

	
  1.

  	
   

  	
  Letter from Gary W. Berman dated August 27,
  1992

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Escrow Agreement effective January 2, 1992

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  SHV Realty Company Underground Storage Tank
  Removal and Post-Excavation Sampling Report dated September 11, 1991

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Letter from Pennsylvania Department of
  Environmental Resources dated April 10, 1992

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Letter from Pennsylvania Department of
  Environmental Resources dated July 17, 1992 (550 gallon diesel underground
  storage tank)

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Letter from Pennsylvania Department of
  Environmental Resources dated July 17, 1992 (storage tank program)

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Transmittal Closure Report from Earth
  Sciences Consultants, Inc. dated February 10, 1992

  
	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Summary of Groundwater Sampling from Earth
  Sciences Consultants, Inc. dated April 14, 1992

  
	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Letter and preclosure analytical data from
  Earth Sciences Consultants, Inc. dated March 31, 1992

  
	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Phase II Environmental Site Investigation from ATEC dated September
  16, 1991

  
	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Phase I Environmental Liability Assessment
  from McLaren/Hart Environmental Engineering Corporation dated June 26, 1991

  
	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Final Report, Level 1 Environmental Site
  Evaluation from Dames & Moore dated December 14, 1988

  
	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Facility Asbestos
  Inspection Report - March 2004

  
	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Asbestos Inspection
  Form (3-15-04 & 3-16-04)

  
	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Acer Associates,
  LLC Report – March 14, 2005

  
	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Asbestos Waste
  Shipment Record – 4/7/05

  

 

 

Exhibit “D”

 

CERTIFICATION

 

Section 1445
of the Internal Revenue code provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform
Buyer (“Buyer”) that withholding of tax is not required upon the disposition of
U.S. real property interests by Lenox, Incorporated (“Seller”), the undersigned
hereby certifies the following on behalf of Seller:

 

1.                                              Seller is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate (as those terms are defined in the Internal Revenue
Code and Income Tax Regulations). Seller’s U.S. employer identification number
is 21-0498476.

 

2.                                               Seller’s office address is 100 Lenox Drive, Lawrenceville, New Jersey
08648. Seller understands that this Certification may be disclosed to the
Internal Revenue Service by Buyer and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

Under
penalties of perjury I declare that I have examined this Certification and to
the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have the authority to sign this document on behalf of
Seller.

 

 

	
   

  	
   

  	
  LENOX, INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Sworn to and subscribed before me

  	
   

  	
   

  
	
  this       
  day of                 
  , 2005.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Notary
  Public

  	
   

  	
   

  	
   

  	
   

  
	
  My Commission
  Expires:

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