Document:

exv10w2

 

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

     AGREEMENT made as of April 6, 2004, by and between Riggs Bank NA and its
subsidiaries, a Delaware corporation (the “Company”) and Lawrence Connell
(“Executive”).

     The parties hereto agree as follows:

	 	1.	 	Employment.

	 	(a)	 	General. Company hereby employs
Executive, and Executive hereby accepts employment with
Company, upon the terms and conditions set forth in this
Agreement.
	 
	 	(b)	 	Term. Subject to the provisions hereof,
Executive’s employment will begin upon the date first written
above and continue through the close of business on April 5,
2005 (the “Term”), unless sooner terminated pursuant to
Section 4 hereof.
	 
	 	(c)	 	Position and Duties. Executive will
report directly to the President and CEO of the Company and
will perform duties consistent with his position and title as
assigned to him by the Board of Directors of the Company.
Unless amended by the Board of Directors, Executive’s title
will be Vice Chairman, International.
	 
	 	(d)	 	Full Time. Executive will devote his
full business time, attention and energy to the performance
of his duties under this Agreement.

	 	2.	 	Supervision.

	 	(a)	 	Reporting. The Executive shall report
to the President and CEO of the Company and shall serve at
the pleasure of the Board of Directors of the Company. The
Executive shall serve as a Section 16 Officer and as a member
of the Bank Operating Committee of the Company.
	 
	 	(b)	 	Authority. The Executive will have such
authority and responsibility as determined by the President
and CEO of the Company and the Board of Directors.

	 	3.	 	Compensation.

	 	(a)	 	Base Salary. The Company will pay a
base salary to Executive of no less than $400,000 per year,
payable in equal bi-weekly installments in accordance with
the Company’s normal payroll practices.

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	 	(b)	 	Benefits. During the term of his
employment, Executive will be entitled to the fringe, welfare
and pension benefits (including participation in the
Company’s 401(k) plan and other benefit plans, as applicable)
that are generally made available to other executives and
senior level employees of subsidiaries of the Company.
	 
	 	(c)	 	Bonus Compensation. In addition to the
base salary and other benefits specified above, Executive
will also be entitled to receive a bonus of $200,000 for the
successful completion of his specific goals within the time
frame set by the President and CEO. The goals set for the
Executive will be those defined by the President and CEO and
agreed upon by the Executive.

	 	4.	 	Termination of Employment.

	 	(a)	 	Death. Executive’s employment hereunder
shall terminate upon his death.
	 
	 	(b)	 	Disability. The Company may terminate
Executive’s employment if he has been unable to perform his
duties hereunder due to a physical or mental disability for a
period of six (6) consecutive months and if he has not
resumed on a full-time basis the performance of such duties
within thirty (30) days after written notice from the Company
of its intent to terminate his employment due to disability.
	 
	 	(c)	 	Termination by Board of Directors. The
Board of Directors of the Company may terminate Executive’s
employment hereunder for Cause, effective immediately, at any
time. For this purpose, “Cause” means: (i) any willful
failure or refusal by Executive to carry out specific
directions of the Board consistent with the provisions hereof
or to perform a material part of the duties assigned to him
hereunder; (ii) any willful violation by Executive of any
material provisions of this Agreement, which failure, refusal
or violation is not remedied by Executive within thirty (30)
days after written notice from the Company; (iii) any
commission by Executive of any act materially detrimental to
the best interests of the Company and Riggs and that
constitutes on the part of Executive personal dishonesty,
willful misconduct in clear conflict with reasonable
standards of employee conduct; breach of fiduciary duty
involving personal profit; any willful violation of any law,
governmental rule or regulation (other than traffic
violations or similar offenses), final cease and desist
order, formal agreement or commitment enforceable in writing;
or any act or conduct which for any reason would constitute
grounds for suspension, bar or removal from office by any
federal or state bank or securities regulatory agency under
applicable law; (iv) any gross negligence by Executive in the
performance of Executive’s duties; or (v) any

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	 	 	 	failure to meet the performance expectations of the Company as reasonably
set forth and determined by the Company’s Board of
Directors. The Board of Directors shall be responsible for
making any determinations of “Cause” for purposes of this
paragraph (c).

	 	(d)	 	Effect of Termination.

	 	(1)	 	Death or Disability. If
Executive’s employment terminates by reason of his
death or disability, Executive, either directly or
through his personal representative or estate
(whichever the case may be), shall be entitled to
amounts equal to the sum of the unpaid portion of
Executive’s annual base salary up to the term date as
it is defined in paragraph 1(b).
	 
	 	(2)	 	Termination For Cause. If
Executive’s employment is terminated by the Company
for Cause, then the Company shall have no obligation
to make any further payments or provide any further
benefits hereunder for any period subsequent to the
date of such termination.
	 
	 	(3)	 	Termination for
Resignation. In the event Executive resigns from
his position, then the Company shall have no
obligation to make any further payments or provide any
further benefits hereunder for any period subsequent
to the date of such termination including any pro-rata
payout of any accrued bonus. Resignation shall require
thirty (30) days written notice to Company and, unless
otherwise stipulated by Company in writing, Executive
shall continue to perform his job fully and do nothing
willful to damage the interests of Company.
Executive’s failure to provide adequate notice of
resignation to Company, or to perform his job fully
prior to the effective date thereof, shall constitute
grounds for immediate termination for Cause.
	 
	 	(4)	 	Termination without Cause.
If Executive’s employment is terminated by the
Company without Cause, the Executive shall for the
term of this Agreement continue to be entitled to the
salary, benefits and any bonus amount accrued to date
as described in Section 3 of this Agreement; provided,
however, that the Executive complies with Section 5 of
this Agreement.

	 	5.	 	Restrictive Covenants.

	 
	 	(a)	 	Confidential Information. Executive
acknowledges that, during the course of his employment
hereunder, he will have access to confidential information,
documents and

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	 		 	other materials relating to the Company and its
affiliates which are
not generally known to persons outside the Company
(whether conceived or developed by Executive or
others) and confidential information, documents and
other materials entrusted to the Company and its
affiliates by third parties, including, without
limitation, financial information, trade secrets,
techniques, know-how, marketing and other business
plans, data, strategies and forecasts, and the
substance of arrangements and agreements with
customers, suppliers and others (collectively,
“Confidential Information”). Any Confidential
Information conceived or developed by Executive
during employment will be the exclusive property of
the Company and its affiliates. Except as
specifically authorized by the Company and its
affiliates, Executive will not (during or after his
employment hereunder) disclose Confidential
Information for his own purposes or for the benefit
of any third person, firm or entity other than (i) as
may be legally required in response to any final and
enforceable summons, order or subpoena issued by a
court or governmental agency, upon reasonable prior
notice to the Company of the proposed disclosure
thereof, or (ii) such Confidential Information which
is or becomes available to the general public through
no act or failure to act by Executive.
	 
	 	(b)	 	Company Documents. Upon
the termination of his employment for any reason,
Executive will deliver to the Company all documents,
data files and other tangible property containing
Confidential Information which are then in his
possession or control.
	 
	 	(c)	 	Covenant Not to Compete. Executive
acknowledges that his duties hereunder and the services he
will provide to the Company are of a special, unique, unusual
and extraordinary character, which gives this Agreement
particular value to the Company, and that it would be
difficult to employ any individual or individuals to replace
Executive in the performance of such duties and services.
Therefore, during employment and for a period of one (1) year
after the termination of his employment for any reason,
Executive will not, directly or indirectly, enter into,
organize, control, engage in, be employed by, serve as a
consultant to, be an officer or director of or have any
direct or indirect investment in any business, person,
partnership, association, firm or corporation engaged in the
same or similar business within a 100 mile radius of any city
in which the Company, or any affiliate or subsidiary thereof,

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	 	 	 	has an office and transacts financial services business.
Executive and the Company agree that the provisions of the
covenant not to
compete are reasonable. However, if any court shall
determine that any aspect of the covenant not to
compete is unreasonable either in period of time,
geographical area or otherwise, the parties agree
that the covenant not to compete should be
interpreted and enforced to the maximum extent that
such court deems reasonable. Any amounts (including,
without limitation, unpaid salary and bonus) which
would otherwise be payable will be forfeited by
Executive (in addition to any other remedies
available to the Company) immediately upon and
following a breach by Executive of this subsection
(c).
	 
	 	(d)	 	Nonsolicitation. During his employment
and for a period of one (1) years after the Executive’s
termination for any reason of his employment (including the
expiration of this Agreement), Executive will not, directly
or indirectly, solicit, induce or otherwise attempt to
influence (i) any employee of the Company or any subsidiary
or other affiliate thereof to leave employment therewith or
(ii) any client of the Company for the purposes of providing
products or services.
	 
	 	(e)	 	Remedies. Executive acknowledges and
agrees that damages in an action at law for breach of any of
the provisions of this Section 5 of this Agreement will be
difficult to determine and will not afford a full and
adequate remedy and, therefore, agrees that the Company, in
addition to seeking damages in an action at law, may seek
specific performance and such equitable or other remedies as
may be available for breach of this paragraph, including,
without limitation, the issuance of a temporary or permanent
injunction, without the necessity of a bond.
	 
	 	(f)	 	Survival. The obligations set forth in
this Section 5 shall survive the termination of Executive’s
employment for such periods as are specified.

	 	6.	 	Dispute Resolution.

	 	(a)	 	All disputes arising out of or concerning the
terms or conditions of employment of Executive by Company,
including without being limited to any claims concerning the
application of this Agreement or that the termination of the
employment relationship violates any federal, state, or local
law, regulation, or ordinance, including but not limited to
the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act, the Equal Pay Act, or any other

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	 	 	 	federal,
state or local laws prohibiting employment discrimination,
laws concerning wage payment, or claims arising out of any
legal restrictions on Company’s right to terminate
its employees, but excluding disputes which require
injunctive or other equitable relief arising out of
Section 5 of this Agreement, shall be resolved timely
and exclusively by final and binding arbitration,
pursuant to the National Rules for the Resolution of
Employment Dispute Resolution (the “Rules”) of the
American Arbitration Association (the “AAA”) then in
effect, to be held in the Washington, D.C.
metropolitan area, and such arbitration shall be the
sole and exclusive forum for determination of any
such dispute. Arbitration must be demanded within
three hundred sixty five (365) calendar days of the
time when the demanding party knows or should have
known of the event or events giving rise to the
claim. Notwithstanding the foregoing, any disputes
relating to or arising from the provisions of Section
5 of this Agreement shall not be arbitrated or
otherwise subject to the requirements of this Section
6.
	 
	 	(b)	 	The parties stipulate that the decision of the
arbitration with respect to any dispute within subsection (a)
of this Section 6 shall be the sole and exclusive remedy.
The parties hereby acknowledge that since arbitration is the
exclusive remedy for any such dispute, neither party has the
right to resort to any federal, state or local court or
administrative agency for relief concerning any such dispute
and that the decision of the arbitrator shall be a complete
defense to any suit, action or proceeding instituted in any
federal, state or local court or before any administrative
agency with respect to any such dispute which is arbitrable
as set forth in subsection (a) of this Section 6.
	 
	 	(c)	 	The award of the arbitrator may be enforced by,
and entered as a judgment in any local, state of federal
court and shall be considered final, conclusive and binding.
	 
	 	(d)	 	The parties recognize that this Section 6 means
that certain claims will be litigated and reviewed before an
impartial arbitrator or panel of arbitrators instead of
before a court of law and/or a jury, but desire the many
benefits of the arbitration process over court proceedings,
including without limitation speed of resolution, lower costs
and fees, and more flexible rules of evidence. The
arbitrator or arbitrators duly selected pursuant to the Rules
of the AAA shall have the same power and authority to order
any

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	 	 	 	remedy for violation of a statute, regulation, or
ordinance as a court would have.

7.     Copyright. In the event any work performed by Executive in his
capacity as an employee of the Company, is entitled to copyright or
intellectual property protection, he agrees that such work will be deemed
to be work for hire and the Company shall be the owner of the same, or, if
such work cannot be deemed work for hire, he agrees to transfer all rights
to such work to the Company or grant the Company an exclusive license to
use such work, for $1.00.

8.     Notices. Any notice under this Agreement must be in writing and
will be deemed to have been given when personally delivered or mailed by
first-class or express mail to the recipient at his or its last known
address.

9.     Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the District of Columbia without
regard to its conflicts of law provisions. Each of the parties
irrevocably and unconditionally consents that any arbitration, suit,
action or proceeding relating to or arising out of this Agreement shall be
exclusively brought in a state or federal court sitting in the District of
Columbia metropolitan area, and each party hereby irrevocably waives, to
the fullest extent permitted by law, any objection that it may have,
whether now or in the future, to the laying of the venue in, or to the
jurisdiction of, any and each of such courts for the purpose of any such
suit, action, proceeding or judgment and further waives any claim that any
such suit, action, proceeding or judgment has been brought in an
inconvenient forum, and each party hereby submits to such jurisdiction.

COMPANY AND EXECUTIVE EXPRESSLY HEREBY WAIVE ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, COUNTERCLAIM OR PROCEEDING BASED UPON,
OR RELATED TO, DIRECTLY OR INDIRECTLY, THE SUBJECT MATTER OF
THIS AGREEMENT. THIS WAIVER APPLIES TO ALL CLAIMS AGAINST
ALL PARTIES TO SUCH ACTIONS AND PROCEEDINGS, INCLUDING
PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.

10.     Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law in any
jurisdiction, such invalidity, illegality or

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unenforceability will not
affect any other provision or the interpretation of this Agreement in any
other jurisdiction.

11.     Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the District of Columbia without regard to
its conflicts of law provisions.

12.     Successors and Assigns. The services and duties to be performed
by Executive hereunder are personal and may not be assigned. This
Agreement shall be binding upon and inure to the benefit of the Company,
its successors and assigns, and Executive, and his heirs and
representatives.

13.     Complete Agreement. The provisions of this Agreement supersede in
their entirety any prior agreement, memorandum or understanding, and this
Agreement constitutes the entire agreement between the parties, concerning
the subject matter hereof. No amendment hereto, or waivers or releases of
obligations or liabilities hereunder, shall be effective unless agreed to
in writing by the parties hereto.

14.     Counterparts. This Agreement may be executed in several
counterparts, each of which, when so executed and delivered, shall be
deemed an original, but all of which together shall constitute one and the
same agreement.

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

	 	 	 	 	 
	 	 	 
	 	By:	/s/ Lawrence Connell	 	     4/6/04
	 	 	
	 
	 	Name:	Lawrence Connell	 
	 	Title:	Vice Chairman, International	 
	 

	 	 	 	 	 
	 	 	Riggs Bank NA	     
	 
	 	 	/s/ Lawrence I. Hebert	     4/6/04
	 	 	
	 
	 	 	Lawrence I. Hebert 	 
	 	 	President and CEO 	 
	 

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Exhibit 10.1

LEASE AGREEMENT

BETWEEN

LIBERTY PROPERTY LIMITED PARTNERSHIP

Landlord

AND

NOVAVAX, INC.

Tenant

FOR

Great Valley Corporate Center

508 Lapp Road, Malvern, Pennsylvania

 

 

LEASE AGREEMENT

 INDEX 

	 	 	 	 	 	 	 
	SECTION
	 	 	 	PAGE

	1.
	 	Basic Lease Terms and Definitions	 	 	1	 
	2.
	 	Premises	 	 	2	 
	3.
	 	Use	 	 	2	 
	4.
	 	Term; Possession	 	 	2	 
	5.
	 	Rent	 	 	2	 
	6.
	 	Operating Expenses	 	 	2	 
	7.
	 	Utilities	 	 	2	 
	8.
	 	Insurance; Waivers; Indemnification	 	 	3	 
	9.
	 	Maintenance and Repairs	 	 	4	 
	10.
	 	Compliance	 	 	4	 
	11.
	 	Signs	 	 	5	 
	12.
	 	Alterations	 	 	5	 
	13.
	 	Mechanics’ Liens	 	 	5	 
	14.
	 	Landlord’s Right of Entry	 	 	5	 
	15.
	 	Damage by Fire or Other Casualty	 	 	5	 
	16.
	 	Condemnation	 	 	6	 
	17.
	 	Quiet Enjoyment	 	 	6	 
	18.
	 	Assignment and Subletting	 	 	6	 
	19.
	 	Subordination; Mortgagee’s Rights	 	 	7	 
	20.
	 	Tenant’s Certificate; Financial Information	 	 	7	 
	21.
	 	Surrender	 	 	7	 
	22.
	 	Defaults - Remedies	 	 	8	 
	23.
	 	Tenant’s Authority	 	 	9	 
	24.
	 	Liability of Landlord	 	 	9	 
	25.
	 	Miscellaneous	 	 	10	 
	26.
	 	Notices	 	 	10	 
	27.
	 	Security Deposit	 	 	10	 

Rider 1  —  Additional Definitions

Rider 2 -

	 	 	 	 	 	 	 
	28.
	 	Completion by Tenant	 	 	R2 - 1	 
	29.
	 	Expansion Option	 	 	R2 - 1	 
	30.
	 	Option to Extend Term	 	 	R2 - 3	 
	31.
	 	Early Termination Option	 	 	R2 - 4	 
	32.
	 	Exclusive	 	 	R2 - 4	 
	33.
	 	Signage	 	 	R2 - 4	 
	34.
	 	Broker	 	 	R2 - 4	 
	35.
	 	Satellite Dish Antenna	 	 	R2 - 4	 
	36.
	 	Condition of Premises	 	 	R2 - 5	 
	37.
	 	ADA Compliance	 	 	R2 - 5	 
	38.
	 	Janitorial, Trash	 	 	R2 - 5	 
	39.
	 	Subordination of Landlord’s Lien	 	 	R2 - 5	 
	40.
	 	Monthly Payment Installments	 	 	R2 - 5	 

i

 

     THIS LEASE AGREEMENT is made by and between LIBERTY PROPERTY LIMITED
PARTNERSHIP, a Pennsylvania limited partnership (“Landlord”), with its address
at 65 Valley Stream Parkway, Suite 100, Malvern, Pennsylvania 19355, and
NOVAVAX, INC. a corporation organized under the laws of Delaware (“Tenant”),
and with its address at 8320 Guilford Road, Suite C, Columbia, MD 21046 and is
dated as of the date on which this Lease has been fully executed by Landlord
and Tenant.

	1.	 	 Basic Lease Terms and Definitions.

     (a) Premises: Consisting of approximately 32,908 rentable square feet as
shown on Exhibit “A”.

     (b) Building: Approximate rentable square feet: 50,200

          Address: 508 Lapp Road, Malvern, East Whiteland Township, Chester County, Pennsylvania.

     (c) Term: One Hundred Twenty (120) months plus any partial month from the
Commencement Date until the first day of the next full calendar month during
the Term.

     (d) Commencement Date: Earlier of (i) September 15, 2004, or (ii) the
date Tenant takes possession of the Premises for the conduct of its business
(conduct of single board of directors meeting at the Premises shall not
constitute the conduct of business for this purpose), or (iii) date of issuance
of a certificate of occupancy for the Premises.

     (e) Expiration Date: The last day of the Term.

     (f) Minimum Annual Rent: Payable in monthly installments as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lease Year	 	$/RSF Rate	 	 	Annual	 	 	 	Monthly	 
	1
	 	$	6.22	 	 	$	204,687.76	 	 	$	17,057.31	 
	2
	 	$	6.29	 	 	$	206,991.32	 	 	$	17,249.28	 
	3
	 	$	6.37	 	 	$	209,623.96	 	 	$	17,468.66	 
	4
	 	$	6.53	 	 	$	214,889.24	 	 	$	17,907.44	 
	5
	 	$	6.70	 	 	$	220,483.60	 	 	$	18,373.63	 
	6
	 	$	6.87	 	 	$	226,077.96	 	 	$	18,839.83	 
	7
	 	$	7.04	 	 	$	231,672.32	 	 	$	19,306.03	 
	8
	 	$	7.21	 	 	$	237,266.68	 	 	$	19,772.22	 
	9
	 	$	7.38	 	 	$	242,861.04	 	 	$	20,238.42	 
	10
	 	$	7.57	 	 	$	249,113.56	 	 	$	20,759.46	 

     (g) Annual Operating Expenses: $107,609.16, payable in monthly
installments of $8,967.43, subject to adjustment as provided in this Lease.

     (h) Tenant’s Share: 65.55% (also see Definitions)

     (i) Use: General offices, pharmaceutical research and development,
laboratory use and light manufacturing..

     (j) Security Deposit: $25,065.00

     (k) Addresses For Notices:

	 	 	 	 	 	 	 
	Landlord:

	 	Liberty Property Limited Partnership
	 	Tenant:
	 	Before the Commencement Date:
	

	 	65 Valley Stream Parkway, Suite 100
	 	 	 	NOVAVAX, INC.
	

	 	Malvern, PA 19355
	 	 	 	8320 Guilford Road, Suite C
	

	 	Attn: Senior Vice President/City Manager
	 	 	 	Columbia, MD 21046
	 
	

	 	 	 	 	 	On or after the Commencement Date:
	

	 	 	 	 	 	Premises

     (l) Additional Defined Terms: See Rider 1 for the definitions of other
capitalized terms.

     (m) Contents: The following are attached to and made a part of this
Lease:

	 	 	 	 	 
	Rider 1 — Additional Definitions

	 	Exhibits:
	 	“A” — Plan showing Premises
	

	 	 	 	“B” — Building Rules
	

	 	 	 	“C” — Estoppel Certificate and Non-Disturbance and Attornment Agreement
	

	 	 	 	“D” — Tenant Estoppel Certificate
	Rider 2 – Additional Provisions

	 	 	 	“E”  — Letter of Credit Requirements
	

	 	 	 	“F”  — Subordination of Landlord’s Lien
	

	 	 	 	“G” — Authorization Agreement for Direct Payments

 

 

2. Premises. Landlord leases to Tenant and Tenant leases from Landlord the
Premises, together with the right in common with others to use the Common
Areas. Tenant accepts the Premises, Building and Common Areas “AS IS”, without
relying on any representation, covenant or warranty by Landlord other than as
expressly set forth in this Lease. Landlord and Tenant stipulate and agree to
the rentable square footage set forth in Section 1(a) above without regard to
actual measurement.

3. Use. Tenant shall occupy and use the Premises only for the Use specified in
Section 1 above. Tenant shall not permit any conduct or condition by or created
by Tenant or any Agent, invitee or licensee of Tenant, which may endanger,
disturb or otherwise interfere with any other Building occupant’s normal
operations or with the management of the Building. Tenant shall not use or
permit the use of any portion of the Property for outdoor storage or
installations outside of the Premises. Tenant may use all Common Areas only for
their intended purposes. Landlord shall have exclusive control of all Common
Areas at all times.

4. Term; Possession. The Term of this Lease shall commence on the Commencement
Date and shall end on the Expiration Date, unless sooner terminated in
accordance with this Lease. If Landlord is delayed in delivering possession of
all or any portion of the Premises to Tenant as of the Commencement Date,
Tenant will take possession on the date Landlord delivers possession, which
date will then become the Commencement Date (and the Expiration Date will be
extended so that the length of the Term remains unaffected by such delay).
Landlord shall not be liable for any loss or damage to Tenant resulting from
any delay in delivering possession due to the holdover of any existing tenant
or other circumstances outside of Landlord’s reasonable control.
Notwithstanding anything to the contrary contained herein, if possession of the
Premises is not delivered on or before September 1, 2004, Tenant shall have the
right to terminate this Lease upon written notice to Landlord.

5. Rent. Tenant agrees to pay to Landlord, without demand, deduction or
offset, Minimum Annual Rent and Annual Operating Expenses for the Term. Tenant
shall pay the Monthly Rent, in advance, on the first business day of each
calendar month during the Term, at Landlord’s address designated in Section 1
above unless Landlord designates otherwise by no less than 10 days prior
written notice to Tenant; provided that Monthly Rent for the first full month
shall be paid at the signing of this Lease. If the Commencement Date is not the
first day of the month, the Monthly Rent for that partial month shall be
apportioned on a per diem basis and shall be paid on or before the Commencement
Date. Tenant shall pay Landlord a service and handling charge equal to 5% of
any Rent not paid within 5 business days after the date due. In addition, any
Rent, including such charge, not paid within 5 business days after the due date
will bear interest at the Interest Rate from the date due to the date paid. If
any taxes, special assessments, fees or other charges are imposed against
Landlord by any authority with respect to the Rent, Tenant will pay these
amounts to Landlord upon no less than 10 business days’ prior written notice by
Landlord to Tenant, accompanied by back-up documentation evidencing such
charges. Notwithstanding anything in this paragraph to the contrary, if Tenant
has not been delinquent in the payment of Rent more than twice in the preceding
twelve month period, Landlord shall charge either a late fee or interest, but
not both.

6. Operating Expenses. The amount of the Annual Operating Expenses set forth in
Section 1(g) above represents Tenant’s Share of the estimated Operating
Expenses for the calendar year in which the Term commences. Landlord may adjust
such amount from time to time if the estimated Annual Operating Expenses
increase or decrease; Landlord may also invoice Tenant separately from time to
time for Tenant’s Share of any extraordinary or unanticipated Operating
Expenses. By March 31st of each year (and as soon as practical after the
expiration or termination of this Lease or, at Landlord’s option, after a sale
of the Property), Landlord shall provide Tenant with a statement of Operating
Expenses for the preceding calendar year or part thereof. Within 30 days after
delivery of the statement to Tenant, Landlord or Tenant shall pay to the other
the amount of any overpayment or deficiency then due from one to the other. If
Tenant does not give Landlord notice within 90 days after receiving Landlord’s
statement that Tenant disagrees with the statement and specifying the items and
amounts in dispute, Tenant shall be deemed to have waived the right to contest
the statement. Landlord’s and Tenant’s obligation to pay any overpayment or
deficiency due the other pursuant to this Section shall survive the expiration
or termination of this Lease. Notwithstanding any other provision of this Lease
to the contrary, Landlord may, in its reasonable discretion, determine from
time to time the method of computing and allocating Operating Expenses,
including the method of allocating Operating Expenses to various types of space
within the Building to reflect any disparate levels of services provided to
different types of space. Tenant shall have the right from time to time, by
its accountants or representatives, to inspect and examine all of Landlord’s
records relating to the calculation of Operating Expenses payable by Tenant
hereunder, as well as to request and receive reasonable invoice support with
respect to the same. Landlord shall retain such records for at least 2 years.
In the event that any such inspection discloses that Tenant has paid an amount
in excess of that payable by Tenant under this Section, Landlord shall refund
such excess to Tenant within 30 days after receipt from Tenant of a report
substantiating Tenant’s position to Landlord’s reasonable satisfaction. In
addition, in the event that any such inspection discloses (subject to
Landlord’s reasonable satisfaction) that Landlord has charged Tenant in excess
of 3% more than the amount properly chargeable to Tenant, Landlord shall
reimburse to Tenant the reasonable costs of such inspection within 30 days
after receipt from Tenant of reasonable substantiation for such costs.

7. Utilities. Tenant shall pay for water, sewer, gas, electricity, heat, power,
telephone and other communication services and any other utilities supplied to
the Premises. Except to the extent Landlord elects to provide any such services
and invoice Tenant for the cost or include the cost in Operating Expenses,
Tenant shall obtain service in its own name and timely pay all charges directly
to the provider. Landlord shall not be responsible or liable for any
interruption in such services, nor shall such interruption affect the
continuation or validity of this Lease. Landlord shall have the exclusive right
to select, and to change, the companies providing such

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services to the Building or Premises, other than Tenant’s telephone/data
telecommunication services. Any wiring, cabling or other equipment necessary to
connect Tenant’s telecommunications equipment shall be Tenant’s responsibility,
and shall be installed in a manner approved by Landlord, which approval shall
not be unreasonably withheld, delayed or conditioned. In the event Tenant’s
consumption of any utility or other service included in Operating Expenses is
excessive when compared with other occupants of the Property, Landlord may
invoice Tenant separately for, and Tenant shall pay on demand, the cost of
Tenant’s excessive consumption, as reasonably determined by Landlord.

8.  Insurance; Waivers; Indemnification.

     (a) Landlord shall maintain insurance against loss or damage to the
Building or the Property with coverage for perils as set forth under the
“Causes of Loss-Special Form” or equivalent property insurance policy in an
amount equal to the full insurable replacement cost of the Building (excluding
coverage of Tenant’s personal property and any Alterations by Tenant), and such
other insurance, including rent loss coverage, as Landlord may reasonably deem
appropriate or as any Mortgagee may require.

     (b) Tenant, at its expense, shall keep in effect commercial general
liability insurance, including blanket contractual liability insurance,
covering Tenant’s use of the Property, with such coverages and limits of
liability as Landlord may reasonably require, but not less than combined single
limits of $5,000,000 per occurrence and in the aggregate for bodily injury or
property damage; however, such limits shall not limit Tenant’s liability
hereunder. Any general aggregate limit shall apply on a “per location” basis.
The policy shall name Landlord, Liberty Property Trust and any other associated
or affiliated entity as their interests may appear and at Landlord’s request,
any Mortgagee(s), as additional insureds with respect to the Premises, shall be
written on an “occurrence” basis and not on a “claims made” basis and shall be
endorsed to provide that it is primary to and not contributory to any policies
carried by Landlord and to provide that it shall not be cancelable or reduced
without at least 30 days prior notice to Landlord. The insurer shall be
authorized to issue such insurance, licensed to do business and admitted in the
state in which the Property is located and rated at least A VII in the most
current edition of Best’s Insurance Reports. Tenant shall deliver to Landlord
on or before the Commencement Date or any earlier date on which Tenant accesses
the Premises, and at least 30 days prior to the date of each policy renewal, a
certificate of insurance evidencing such coverage.

     (c) Landlord and Tenant each waive, and release each other from and
against, all claims for recovery against the other for any loss or damage to
the property of such party arising out of fire or other casualty coverable by a
standard “Causes of Loss-Special Form” property insurance policy with, in the
case of Tenant, such endorsements and additional coverages as are considered
good business practice in Tenant’s business, even if such loss or damage shall
be brought about by the fault or negligence of the other party or its Agents;
provided, however, such waiver by Landlord shall not be effective with respect
to Tenant’s liability described in Sections 9(b) and 10(c) below, and such
waiver by Tenant shall not be effective with respect to Landlord’s liability
described in Section 9(a) below. This waiver and release is effective
regardless of whether the releasing party actually maintains the insurance
described above in this subsection and is not limited to the amount of
insurance actually carried, or to the actual proceeds received after a loss.
Each party shall have its insurance company that issues its property coverage
waive any rights of subrogation, and shall have the insurance company include
an endorsement acknowledging this waiver, if necessary. Tenant assumes all risk
of damage of Tenant’s property within the Property, including any loss or
damage caused by water leakage, fire, windstorm, explosion, theft, act of any
other tenant, or other cause.

     (d) Subject to subsection (c) above, and except to the extent caused by
the negligence or willful misconduct of Landlord or its Agents, Tenant will
indemnify, defend, and hold harmless Landlord and its Agents from and against
any and all claims, actions, damages, liability and expense (including
reasonable fees of attorneys, investigators and experts) which may be asserted
against, imposed upon, or incurred by Landlord or its Agents and arising out of
or in connection with loss of life, bodily injury or damage to property in or
about the Premises or to the extent arising out of the occupancy or use of the
Property by Tenant or its Agents or to the extent occasioned by any act or
omission of Tenant or its Agents, whether prior to, during or after the Term.
Tenant’s obligations pursuant to this subsection shall survive the expiration
or termination of this Lease. Landlord shall provide to Tenant prompt written
notice of any third party claim covered by Tenant’s indemnification obligations
under this Subsection 8(d). Landlord agrees to cooperate reasonably with
Tenant in connection with the performance by Tenant of its obligations under
this Subsection, which cooperation shall include but not be limited to
providing Tenant with periodic status reports on the matter.

     (e) Subject to subsection (c) above, and except to the extent caused by
the negligence or willful misconduct of Tenant or its Agents, Landlord will
indemnify, defend, and hold harmless Tenant and its Agents from and against any
and all claims, actions, damages, liability and expense (including reasonable
fees of attorneys, investigators and experts) which may be asserted against,
imposed upon, or incurred by Tenant or its Agents and arising out of or in
connection with loss of life, personal injury or damage to property in or about
the Property occasioned wholly or in part by any act or omission of Landlord or
its Agents, whether prior to, during or after the Term. Landlord’s obligations
pursuant to this subsection shall survive the expiration or termination of this
Lease. Tenant shall provide to Landlord prompt written notice of any third
party claim covered by Landlord’s indemnification obligations under this
Subsection 8(d). Tenant agrees to cooperate reasonably with Landlord in
connection with the performance by Landlord of its obligations under this
Subsection.

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     (f) Notwithstanding anything to the contrary contained in this Lease
(except as provided in Section 21 with respect to holdover liability of
Tenant), in no event shall Landlord or Tenant be liable for any indirect,
special, consequential or incidental damages, regardless of whether it has
been informed of the possibility of such damages or is negligent.

9.  Maintenance and Repairs.

     (a) Landlord shall Maintain, in a manner consistent with other similar
properties owned and managed by Landlord, including replacements where required
in like kind: (i) Building footings, foundations, structural steel columns and
girders at Landlord’s sole expense; (ii) Building roof and exterior walls;
(iii) Building Systems; and (iv) Common Areas. Costs incurred by Landlord under
the foregoing subsections (ii), (iii) and (iv) will be included in Operating
Expenses. Tenant, not Landlord, shall maintain HVAC and other equipment
installed by Tenant. If Tenant becomes aware of any condition that is
Landlord’s responsibility to repair, Tenant shall promptly notify Landlord of
the condition.

     (b) Except as provided in subsection (a) above, Tenant at its sole expense
shall Maintain the Premises and all fixtures and equipment in the Premises. All
repairs and replacements by Tenant shall utilize materials and equipment which
are comparable to those originally used in constructing the Building and
Premises. Alterations, repairs and replacements to the Property, including the
Premises, made necessary because of Tenant’s Alterations or installations, any
use or circumstances special or particular to Tenant, or any act or omission of
Tenant or its Agents shall be made by Landlord or Tenant as set forth above,
but at the sole expense of Tenant. Notwithstanding anything to the contrary
contained in this Lease, Tenant shall in no event be obligated to make or
otherwise to pay the cost of any repairs or replacements which are required as
the result of the negligence or willful misconduct of Landlord or its Agents,
or the failure of Landlord to perform any of its obligations under this Lease,
all of which repairs and replacements shall be made by Landlord at Landlord’s
sole cost and expense.

10.  Compliance.

     (a) Tenant will, at its expense, promptly comply with all Laws now or
subsequently pertaining to Tenant’s particular and specific use. Tenant will
pay any taxes or other charges by any authority on Tenant’s property or trade
fixtures. Neither Tenant nor its Agents shall make any use of the Premises
particular or special to Tenant that under any Law would require Landlord to
make any Alteration to or in the Building or Common Areas (without limiting the
foregoing, Tenant shall not use the Premises in any manner that would cause the
Premises or the Property to be deemed a “place of public accommodation” under
the ADA if such use would require any such Alteration). Tenant shall be
responsible for compliance with the ADA, and any other Laws regarding
accessibility, with respect to the Premises.

     (b) Tenant will comply, and will cause its Agents to comply, with the
Building Rules of which Tenant shall have received written notice and to the
extent the same are reasonable and non-discriminatory. Tenant agrees not to do
anything or fail to do anything which will increase the cost of Landlord’s
insurance or which will prevent Landlord from procuring policies (including
public liability) from companies and in a form reasonably satisfactory to
Landlord. If any breach of the preceding sentence by Tenant causes the rate of
fire or other insurance to be increased, Tenant shall pay the amount of such
increase as additional Rent within 30 days after being billed.

     (c) Tenant agrees that (i) no activity will be conducted on the Premises
that will use or produce any Hazardous Materials, except for activities which
are part of the ordinary course of Tenant’s business and are conducted in
accordance with all Environmental Laws (“Permitted Activities”); (ii) the
Premises will not be used for storage of any Hazardous Materials, except for
materials used in the Permitted Activities which are properly stored in a
manner and location complying with all Environmental Laws; (iii) no portion of
the Premises or Property will be used by Tenant or Tenant’s Agents for disposal
of Hazardous Materials; (iv) Tenant will deliver to Landlord copies of all
Material Safety Data Sheets and other written information prepared by
manufacturers, importers or suppliers of any chemical prior to locating such
chemicals in the Premises, and (v) Tenant will immediately notify Landlord of
any violation by Tenant or Tenant’s Agents of any Environmental Laws or the
release or suspected release of Hazardous Materials in, under or about the
Premises, and Tenant shall immediately deliver to Landlord a copy of any
notice, filing or permit sent or received by Tenant with respect to the
foregoing. If at any time during or after the Term, any portion of the Property
is found to be contaminated by Tenant or Tenant’s Agents or subject to
conditions prohibited in this Lease caused by Tenant or Tenant’s Agents, Tenant
will indemnify, defend and hold Landlord harmless from all claims, demands,
actions, liabilities, costs, expenses, reasonable attorneys’ fees, damages and
obligations of any nature to the extent arising from or as a result thereof,
and Landlord shall have the right to direct remediation activities, all of
which shall be performed at Tenant’s cost. Tenant’s obligations pursuant to
this subsection shall survive the expiration or termination of this Lease.
Landlord shall provide to Tenant prompt written notice of any third party claim
covered by Tenant’s indemnification obligations hereunder. Landlord agrees to
cooperate reasonably with Tenant in connection with the performance by Tenant
of its obligations under this Section, which cooperation shall include but not
be limited to providing Tenant with periodic status reports on the matter.

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11.  Signs. Tenant shall not place any signs on the Property without the prior
consent of Landlord, which consent shall not be unreasonably withheld, delayed
or conditioned, other than signs that are located wholly within the interior of
the Premises and not visible from the exterior of the Premises. Tenant shall
maintain all signs installed by Tenant in good condition. Except for signage
installed by Landlord on behalf of Tenant, Tenant shall remove its signs at the
termination of this Lease, shall repair any resulting damage.

12.  Alterations. Except for cosmetic Alterations (such as painting, wall
covering and floor covering) that (i) are not visible from the exterior of the
Premises, (ii) do not affect the structure of the Building or any Building
System, (iii) do not require penetrations into the floor, ceiling or walls, and
(iv) do not require work within the walls, below the floor or above the
ceiling, Tenant shall not make or permit any Alterations in or to the Premises
without first obtaining Landlord’s consent, which consent shall not be
unreasonably withheld. With respect to any Alterations made by or on behalf of
Tenant (whether or not the Alteration requires Landlord’s consent): (i) not
less than 10 days prior to commencing any Alteration, Tenant shall deliver to
Landlord the plans, specifications and necessary permits for the Alteration,
together with certificates evidencing that Tenant’s contractors and
subcontractors have adequate insurance coverage naming Landlord, Liberty
Property Trust and any other associated or affiliated entity as their interests
may appear as additional insureds, (ii) Tenant shall obtain Landlord’s prior
written approval of any contractor or subcontractor, (iii) the Alteration shall
be constructed with new materials, in a good and workmanlike manner, and in
compliance with all Laws and the plans and specifications delivered to, and, if
required above, approved by Landlord, (iv) Tenant shall pay Landlord all
reasonable costs and expenses in connection with third party review of Tenant’s
plans and specifications, and of any third party supervision or inspection of
the construction Landlord deems reasonably necessary, and (v) upon Landlord’s
request Tenant shall, prior to commencing any Alteration, provide Landlord
reasonable security against liens arising out of such construction. Any
Alteration by Tenant shall be the property of Tenant until the expiration or
termination of this Lease; at that time without payment by Landlord the
Alteration shall remain on the Property and become the property of Landlord
unless Landlord gives notice to Tenant to remove it, in which event Tenant will
remove it, will repair any resulting damage and will restore the area of the
Premises affected by the Alteration to the condition existing prior to Tenant’s
Alteration. At Tenant’s request prior to Tenant making any Alterations,
Landlord will notify Tenant whether Tenant is required to remove the
Alterations at the expiration or termination of this Lease. Tenant may install
its trade fixtures, furniture and equipment in the Premises, provided that the
installation and removal of them will not affect any structural portion of the
Property, any Building System or any other equipment or facilities serving the
Building or any occupant.

13.  Mechanics’ Liens. Tenant promptly shall pay for any labor, services,
materials, supplies or equipment furnished to Tenant in or about the Premises.
Tenant shall keep the Premises and the Property free from any liens arising out
of any labor, services, materials, supplies or equipment furnished or alleged
to have been furnished to Tenant. Tenant shall take all steps permitted by law
in order to avoid the imposition of any such lien. Should any such lien or
notice of such lien be filed against the Premises or the Property, Tenant shall
discharge the same by bonding or otherwise within 15 days after Tenant has
notice that the lien or claim is filed regardless of the validity of such lien
or claim.

14.  Landlord’s Right of Entry. Tenant shall permit Landlord and its Agents to
enter the Premises at all reasonable times following reasonable notice (except
in an emergency) to inspect, Maintain, or make Alterations to the Premises or
Property, to exhibit the Premises for the purpose of sale or financing, and,
during the last 12 months of the Term, to exhibit the Premises to any
prospective tenant. Landlord will make reasonable efforts not to inconvenience
Tenant in exercising such rights, but Landlord shall not be liable for any
interference with Tenant’s occupancy resulting from Landlord’s entry; provided,
however, that Landlord shall indemnify Tenant for any damage to Tenant’s trade
fixtures, furniture, equipment or other personal property caused by the
negligence or willful misconduct of Landlord or its Agents. Except in the
event of any emergency, Landlord or its Agents shall be accompanied while
entering the Premises by an Agent of Tenant, which Agent Tenant shall make
available promptly upon request.

15.  Damage by Fire or Other Casualty. If the Premises or Common Areas shall be
damaged or destroyed by fire or other casualty, Tenant shall promptly notify
Landlord, and Landlord, subject to the conditions set forth in this Section,
shall repair such damage and restore the Premises or Common Areas to
substantially the same condition in which they were immediately prior to such
damage or destruction, but not including the repair, restoration or replacement
of the fixtures, equipment, or Alterations installed by or on behalf of Tenant.
Landlord shall notify Tenant, within 30 days after the date of the casualty, if
Landlord anticipates that the restoration will take more than 160 days from the
date of the casualty to complete; in such event, either Landlord or Tenant
(unless the damage was caused by Tenant) may terminate this Lease effective as
of the date of casualty by giving notice to the other within 10 days after
Landlord’s notice. If a casualty occurs during the last 12 months of the Term,
Landlord may terminate this Lease unless Tenant has the right to extend the
Term for at least 3 more years and does so within 30 days after the date of the
casualty. Moreover, Landlord may terminate this Lease if the loss is not
covered by the insurance required to be maintained by Landlord under this
Lease. Tenant will receive an abatement of Minimum Annual Rent and Annual
Operating Expenses to the extent the Premises are rendered untenantable as a
result of the casualty. Landlord shall use reasonable efforts to perform such
repairs so as to minimize the interference with Tenant’s use and occupancy of
the Premises. Notwithstanding anything to the contrary contained in this
Lease, if Landlord shall fail, either to complete the restoration and repair of
the Premises, or to restore the same to their condition immediately prior to
the fire or other casualty, within 160 days from the date of occurrence of the
fire or casualty, then, in either such event, Tenant

5

 

may terminate this lease by 10 days’ prior written notice to Landlord given no
later than 30 days after the expiration of the aforesaid 160-day period, and
prior to completion of the restoration and repair of the Premises. In the
event of a termination of this Lease in accordance with the provisions of this
Section, Landlord shall refund to Tenant any Rent paid for any time subsequent
to the effective date of termination.

16.  Condemnation. If (a) all of the Premises are Taken, (b) any part of the
Premises is Taken and the remainder is insufficient in Tenant’s reasonable
opinion for the reasonable operation of Tenant’s business, or (c) any of the
Property is Taken, and, in Landlord’s reasonable opinion, it would be
impractical or the condemnation proceeds are insufficient to restore the
remainder, then this Lease shall terminate as of the date the condemning
authority takes possession. If this Lease is not terminated, Landlord shall
restore the Building to a condition as near as reasonably possible to the
condition prior to the Taking, the Minimum Annual Rent and Annual Operating
Expenses shall be abated for the period of time all or a part of the Premises
is untenantable in proportion to the square foot area untenantable, and this
Lease shall be amended appropriately. If Landlord fails to so restore the
Building within 160 days from the date that possession of the portion of the
Building taken is delivered to the condemning authority, then, in such event,
Tenant may elect to terminate this Lease by no less than 10 days’ prior written
notice to Landlord given no later than 30 days after the expiration of the
aforesaid 160 day period. The compensation awarded for a Taking shall belong
to Landlord. Notwithstanding anything to the contrary contained herein, except
for any relocation benefits or an award for the value of Tenant’s fixtures to
which Tenant may be entitled, Tenant hereby assigns all claims against the
condemning authority to Landlord, including, but not limited to, any claim
relating to Tenant’s leasehold estate. In the event of the termination of this
Lease in accordance with the provisions of this Section, Landlord shall refund
to Tenant any Rent paid for any time subsequent to the effective date of
termination.

17.  Quiet Enjoyment.

Landlord covenants that Tenant, upon performing all of its covenants,
agreements and conditions of this Lease so that Tenant is not in default
hereunder beyond the expiration of all applicable notice and cure periods,
shall have quiet and peaceful possession of the Premises as against anyone
claiming by or through Landlord, subject, however, to the terms of this Lease.

18.  Assignment and Subletting.

     (a) Except as provided in Section (b) below, Tenant shall not enter into
nor permit any Transfer voluntarily or by operation of law, without the prior
consent of Landlord, which consent shall not be unreasonably withheld. Without
limitation, Tenant agrees that Landlord’s consent shall not be considered
unreasonably withheld if (i) the proposed transferee is an existing tenant of
Landlord or an affiliate of Landlord, (ii) the creditworthiness of the proposed
transferee is unacceptable to Landlord in Landlord’s reasonable discretion,
(iii) Landlord or an affiliate of Landlord has comparable space available for
lease by the proposed transferee or (iv) an Event of Default has occurred and
is continuing. A consent to one Transfer shall not be deemed to be a consent to
any subsequent Transfer. In no event shall any Transfer relieve Tenant from any
obligation under this Lease. Landlord’s acceptance of Rent from any person
shall not be deemed to be a waiver by Landlord of any provision of this Lease
or to be a consent to any Transfer. Any Transfer not in conformity with this
Section 18 shall be void at the option of Landlord.

     (b) Landlord’s consent shall not be required in the event of any Transfer
by Tenant to an Affiliate provided that (i) the Affiliate has a tangible net
worth reasonably acceptable to Landlord, (ii) Tenant provides Landlord notice
of the Transfer at least 15 days prior to the effective date, together with
current financial statements of the Affiliate certified by an executive officer
of the Affiliate, and (iii) in the case of an assignment or sublease, Tenant
delivers to Landlord an assumption agreement reasonably acceptable to Landlord
executed by Tenant and the Affiliate, together with a certificate of insurance
evidencing the Affiliate’s compliance with the insurance requirements of Tenant
under this Lease.

     (c) The provisions of subsection (a) above notwithstanding, if Tenant
proposes to Transfer all of the Premises (other than to an Affiliate), Landlord
may terminate this Lease, either conditioned on execution of a new lease
between Landlord and the proposed transferee or without that condition. If
Tenant proposes to enter into a Transfer of less than all of the Premises
(other than to an Affiliate), Landlord may amend this Lease to remove the
portion of the Premises to be transferred, either conditioned on execution of a
new lease between Landlord and the proposed transferee or without that
condition. If this Lease is not so terminated or amended, Tenant shall pay to
Landlord, immediately upon receipt, the excess of (i) 50% of all compensation
received by Tenant for the Transfer, less any costs incurred by Tenant in
connection with such Transfer, including without limitation leasing
commissions, attorneys’ fees and cost of tenant improvements, over (ii) the
Rent allocable to the Premises transferred.

     (d) If Tenant requests Landlord’s consent to a Transfer, Tenant shall
provide Landlord, at least 15 days prior to the proposed Transfer, current
financial statements of the transferee certified by an executive officer of the
transferee, a complete copy of the proposed Transfer documents, and any other
information Landlord reasonably requests. Immediately following any approved
assignment or sublease, Tenant shall deliver to Landlord an assumption
agreement reasonably acceptable to Landlord executed by Tenant and the
transferee, together with a certificate of insurance evidencing the
transferee’s compliance with the insurance requirements of Tenant under this
Lease. Tenant agrees to reimburse Landlord for reasonable third party
administrative fees and

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attorneys’ fees in connection with the processing and documentation of any
Transfer for which Landlord’s consent is requested.

19.  Subordination; Mortgagee’s Rights.

     (a) Tenant accepts this Lease subject and subordinate to any Mortgage now
or in the future affecting the Premises, provided that Tenant’s right of
possession of the Premises shall not be disturbed by the Mortgagee so long as
no Event of Default has occurred and is continuing. However, any Mortgagee may
at any time subordinate its Mortgage to this Lease, without Tenant’s consent,
by giving notice to Tenant, and this Lease shall then be deemed prior to such
Mortgage without regard to their respective dates of execution and delivery;
provided that such subordination shall not affect any Mortgagee’s rights with
respect to condemnation awards, casualty insurance proceeds, intervening liens
or any right which shall arise between the recording of such Mortgage and the
execution of this Lease. Landlord shall use good faith and diligent efforts to
obtain and deliver to Tenant, by the Commencement Date, an Estoppel
Non-Disturbance and Attornment Agreement in the form attached hereto as Exhibit
“C” (the “SNDA”). If the SNDA is not delivered to Tenant within fifteen (15)
business days after the date upon which a fully signed original of this Lease
is delivered to Tenant, Tenant shall have the option to terminate this Lease by
written notice to Landlord, provided that such notice is delivered not later
than twenty (20) business days after the date upon which a fully signed
original of this Lease is delivered to Tenant and prior to the delivery of the
SNDA to Tenant. If this Lease is so terminated, Landlord shall promptly pay to
Tenant the actual cost of construction work by Tenant within the Premises, not
to exceed $70,000 in the aggregate, through the last day of such fifteen (15)
business day period, upon submission to Landlord of reasonable substantiation
for such costs. Tenant shall execute and deliver to any future Mortgagee an
agreement substantially in the form of Exhibit “C” upon written request of
Landlord.

     (b) No Mortgagee shall be (i) liable for any act or omission of a prior
landlord unless and to the extent such act or omission continues after the
Mortgagee becomes the owner of the Property, (ii) subject to any rental offsets
or defenses against a prior landlord, (iii) bound by any amendment of this
Lease made without its written consent, or (iv) bound by payment of Monthly
Rent more than one month in advance or liable for any other funds paid by
Tenant to Landlord unless such funds actually have been transferred to the
Mortgagee by Landlord. Tenant shall not be in default because Tenant has paid
rent to any Mortgagee rather than to Landlord if such payment is made pursuant
to the written direction of such Mortgagee.

     (c) The provisions of Sections 15 and 16 above notwithstanding, Landlord’s
obligation to restore the Premises after a casualty or condemnation shall be
subject to the consent and prior rights of any Mortgagee.

20.  Tenant’s Certificate; Financial Information. Within 10 business days after
Landlord’s request from time to time, (a) Tenant shall execute, acknowledge and
deliver to Landlord, for the benefit of Landlord, Mortgagee, any prospective
Mortgagee, and any prospective purchaser of Landlord’s interest in the
Property, an estoppel certificate in the form of attached Exhibit “D” (or other
form requested by Landlord), modified as necessary to accurately state the
facts represented, and (b) Tenant shall furnish to Landlord, Landlord’s
Mortgagee, prospective Mortgagee and/or prospective purchaser reasonably
requested financial information, provided that Tenant shall not be required to
provide any financial information that is readily publicly available to
Landlord (or any other party) for so long as Tenant is a public company. Any
financial information provided to Landlord by Tenant that is not publicly
available shall be kept in confidence by Landlord and disseminated only to
employees and representatives of Landlord, and existing or prospective lenders
and buyers having an interest in the financial status of tenants of the
Building who shall be obligated to keep such information confidential.

21.  Surrender.

     (a) On the date on which this Lease expires or terminates, Tenant shall
return possession of the Premises to Landlord in good condition, except for
ordinary wear and tear, and except for casualty damage or other conditions that
Tenant is not required to remedy under this Lease. Prior to the expiration or
termination of this Lease, Tenant shall remove from the Property all furniture,
trade fixtures, equipment, wiring and cabling (unless Landlord directs Tenant
otherwise), and all other personal property installed by Tenant or its
assignees or subtenants. Tenant shall repair any damage resulting from such
removal and shall restore the Property to good order and condition. Any of
Tenant’s personal property not removed as required shall be deemed abandoned,
and Landlord, at Tenant’s expense, may remove, store, sell or otherwise dispose
of such property in such manner as Landlord may see fit and/or Landlord may
retain such property or sale proceeds as its property. If Tenant does not
return possession of the Premises to Landlord in the condition required under
this Lease, Tenant shall pay Landlord all resulting damages Landlord may
suffer.

     (b) If Tenant remains in possession of the Premises after the expiration
or termination of this Lease, Tenant’s occupancy of the Premises shall be that
of a tenancy at will. Tenant’s occupancy during any holdover period shall
otherwise be subject to the provisions of this Lease (unless clearly
inapplicable), except that the Monthly Rent shall be 150% the Monthly Rent
payable for the last full month immediately preceding the holdover. No holdover
or payment by Tenant after the expiration or termination of this Lease shall
operate to extend the Term or prevent Landlord from immediate recovery of
possession of the Premises by summary proceedings or otherwise. Any provision
in this Lease to the contrary notwithstanding, any holdover by Tenant shall
constitute a default on the part of Tenant under this Lease entitling Landlord
to exercise, without obligation to provide Tenant any notice or cure

7

 

period, all of the remedies available to Landlord in the event of a Tenant
default, and Tenant shall be liable for all damages, including consequential
damages, that Landlord suffers as a result of the holdover.

22.  Defaults — Remedies.

     (a) It shall be an Event of Default:

          (i) If Tenant does not pay in full when due any and all Rent and, except
as provided in Section 22(d) below, Tenant fails to cure such default on or
before the date that is 5 days after Landlord gives Tenant notice of default;

          (ii) If Tenant enters into or permits any Transfer in violation of Section
18 above;

          (iii) If Tenant fails to observe and perform or otherwise breaches any
other provision of this Lease, and, except as provided in Section 22(d) below,
Tenant fails to cure the default on or before the date that is 20 days after
Landlord gives Tenant notice of default; provided, however, if the default
cannot reasonably be cured within 20 days following Landlord’s giving of
notice, Tenant shall be afforded additional reasonable time to cure the default
if Tenant begins to cure the default promptly following Landlord’s notice and
continues diligently in good faith to completely cure the default; or

          (iv) If Tenant is adjudicated insolvent or makes a general assignment for
the benefit of creditors or offers a settlement to creditors, or if a petition
in bankruptcy or for reorganization or for an arrangement with creditors under
any federal or state law is filed by or against Tenant, or a bill in equity or
other proceeding for the appointment of a receiver for any of Tenant’s assets
is commenced, or if any of the real or personal property of Tenant shall be
levied upon; provided that any proceeding brought by anyone other than Landlord
or Tenant under any bankruptcy, insolvency, receivership or similar law shall
not constitute an Event of Default until such proceeding has continued unstayed
for more than 60 consecutive days.

     (b) If an Event of Default occurs, Landlord shall have the following
rights and remedies:

          (i) Landlord, without any obligation to do so, may elect to cure the
default on behalf of Tenant, in which event Tenant shall reimburse Landlord
upon demand for any sums paid or costs incurred by Landlord (together with an
administrative fee of 7% thereof) in curing the default, plus interest at the
Interest Rate from the respective dates of Landlord’s incurring such costs,
which sums and costs together with interest at the Interest Rate shall be
deemed additional Rent;

          (ii) To enter and repossess the Premises, by breaking open locked doors if
necessary, and remove all persons and all or any property, by action at law or
otherwise, without being liable for prosecution or damages. Landlord may, at
Landlord’s option, make Alterations and repairs in order to relet the Premises
and relet all or any part(s) of the Premises for Tenant’s account. Tenant
agrees to pay to Landlord any deficiency (taking into account all costs
incurred by Landlord) that may arise by reason of such reletting as the same
would become due and payable under this Lease. In the event of reletting
without termination of this Lease, Landlord may at any time thereafter elect to
terminate this Lease for such previous breach;

          (iii) To accelerate the whole or any part of the Rent for the balance of
the Term, and declare the same to be immediately due and payable; and

          (iv) To terminate this Lease and the Term without any right on the part of
Tenant to save the forfeiture by payment of any sum due or by other performance
of any condition, term or covenant broken.

     (c) Intentionally Deleted.

     (d) Any provision to the contrary in this Section 22 notwithstanding,
Landlord shall not be required to give Tenant the notice and opportunity to
cure provided in Section 22(a) above (provided that the notice period under
Sections 13, 20 or 27 shall be 5 business days and the cure period shall not
exceed such 5 business day period) more than four times in any consecutive
12-month period, and thereafter Landlord may declare an Event of Default
without affording Tenant any of the notice and cure rights provided under this
Lease.

     (e) No waiver by either party of any breach by the other shall be a waiver
of any subsequent breach, nor shall any forbearance by either party to seek a
remedy for any breach by the other party be a waiver by such forebearing party
of any rights and remedies with respect to such or any subsequent breach.
Efforts by either party to mitigate the damages caused by the other party’s
default shall not constitute a waiver of the mitigating party’s right to
recover damages hereunder. No right or remedy herein conferred upon or reserved
to either party is intended to be exclusive of any other right or remedy
provided herein or by law, but each shall be cumulative and in addition to
every other right or remedy given herein or now or hereafter existing at law or
in equity. No payment by Tenant or receipt or acceptance by Landlord of a
lesser amount than the total amount due Landlord under this Lease shall be
deemed

8

 

to be other than on account, nor shall any endorsement or statement on any
check or payment be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of Rent due, or Landlord’s right to pursue any other available remedy.

     (f) If either party commences an action against the other party arising
out of or in connection with this Lease, the prevailing party shall be entitled
to have and recover from the other party reasonable attorneys’ fees, costs of
suit, investigation expenses and discovery costs, including costs of appeal.

     (g) Landlord and Tenant waive the right to a trial by jury in any action
or proceeding based upon or related to, the subject matter of this Lease.

     (h) When this Lease and the Term or any extension thereof shall have been
terminated on account of any default by Tenant, or when the Term or any
extension thereof shall have expired, Tenant hereby authorizes any attorney of
any court of record of the Commonwealth of Pennsylvania to appear for Tenant
and for anyone claiming by, through or under Tenant and to confess judgment
against all such parties, and in favor of Landlord, in ejectment and for the
recovery of possession of the Premises, for which this Lease or a true and
correct copy hereof shall be good and sufficient warrant. AFTER THE ENTRY OF
ANY SUCH JUDGMENT A WRIT OF POSSESSION MAY BE ISSUED THEREON WITHOUT FURTHER
NOTICE TO TENANT AND WITHOUT A HEARING. If for any reason after such action
shall have been commenced it shall be determined and possession of the Premises
remain in or be restored to Tenant, Landlord shall have the right for the same
default and upon any subsequent default(s) or upon the termination of this
Lease or Tenant’s right of possession as herein set forth, to again confess
judgment as herein provided, for which this Lease or a true and correct copy
hereof shall he good and sufficient warrant.

	 	 	 	 	 
	 	 	NOVAVAX, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Nelson M. Sims
	

	 	 	 	
 

     (i) The warrants to confess judgment set forth above shall continue in
full force and effect and be unaffected by amendments to this Lease or other
agreements between Landlord and Tenant even if any such amendments or other
agreements increase Tenant’s obligations or expand the size of the Premises.

     (j) TENANT EXPRESSLY AND ABSOLUTELY KNOWINGLY AND EXPRESSLY WAIVES AND
RELEASES (i) ANY RIGHT, INCLUDING, WITHOUT LIMITATION, UNDER ANY APPLICABLE
STATUTE, WHICH TENANT MAY HAVE TO RECEIVE A NOTICE TO QUIT PRIOR TO LANDLORD
COMMENCING AN ACTION FOR REPOSSESSION OF THE PREMISES AND (ii) ANY PROCEDURAL
ERRORS IN CONNECTION WITH THE ENTRY OF ANY SUCH JUDGMENT OR IN THE ISSUANCE OF
ANY ONE OR MORE WRITS OF POSSESSION OR EXECUTION OR GARNISHMENT THEREON.

	 	 	 	 	 
	 	 	NOVAVAX, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Nelson M. Sims
	

	 	 	 	
 

23.  Tenant’s Authority. Tenant represents and warrants to Landlord that: (a)
Tenant is duly formed, validly existing and in good standing under the laws of
the state under which Tenant is organized, and qualified to do business in the
state in which the Property is located, and (b) the person(s) signing this
Lease are duly authorized to execute and deliver this Lease on behalf of
Tenant.

24.  Liability of Landlord. The word “Landlord” in this Lease includes the
Landlord executing this Lease as well as its successors and assigns, each of
which shall have the same rights, remedies, powers, authorities and privileges
as it would have had it originally signed this Lease as Landlord. Any such
person or entity, whether or not named in this Lease, shall have no liability
under this Lease after it ceases to hold title to the Premises except for
obligations already accrued (and, as to any unapplied portion of Tenant’s
Security Deposit, Landlord shall be relieved of all liability upon transfer of
such portion to its successor in interest). Tenant shall look solely to
Landlord’s successor in interest for the performance of the covenants and
obligations of the Landlord hereunder which subsequently accrue and for the
curing of defaults by Landlord which are continuing at the time such successor
in interest succeeds to Landlord’s interest under this Lease. Landlord shall
not be deemed to be in default under this Lease unless Tenant gives Landlord
notice specifying the default and Landlord fails to cure the default within a
reasonable period following Tenant’s notice. In no event shall Landlord be
liable to Tenant for any loss of business or profits of Tenant or for
consequential, punitive or special damages of any kind. Neither Landlord nor
any principal of Landlord nor any owner of the Property, whether disclosed or
undisclosed, shall have any personal liability with respect to any of the
provisions of this Lease or the Premises; Tenant shall look solely to the
equity of Landlord in the Property for the satisfaction of any claim by Tenant
against Landlord. Nothing in this paragraph shall be construed to preclude
Tenant from obtaining equitable relief against Landlord.

9

 

25.  Miscellaneous.

     (a) The captions in this Lease are for convenience only, are not a part of
this Lease and do not in any way define, limit, describe or amplify the terms
of this Lease.

     (b) This Lease represents the entire agreement between the parties hereto
and there are no collateral or oral agreements or understandings between
Landlord and Tenant with respect to the Premises or the Property. No rights,
easements or licenses are acquired in the Property or any land adjacent to the
Property by Tenant by implication or otherwise except as expressly set forth in
this Lease. This Lease shall not be modified in any manner except by an
instrument in writing executed by the parties. The masculine (or neuter)
pronoun and the singular number shall include the masculine, feminine and
neuter genders and the singular and plural number. The word “including”
followed by any specific item(s) is deemed to refer to examples rather than to
be words of limitation. The word “person” includes a natural person, a
partnership, a corporation, a limited liability company, an association and any
other form of business association or entity. Both parties having participated
fully and equally in the negotiation and preparation of this Lease, this Lease
shall not be more strictly construed, nor any ambiguities in this Lease
resolved, against either Landlord or Tenant.

     (c) Each covenant, agreement, obligation, term, condition or other
provision contained in this Lease shall be deemed and construed as a separate
and independent covenant of the party bound by, undertaking or making the same,
not dependent on any other provision of this Lease unless otherwise expressly
provided. All of the terms and conditions set forth in this Lease shall apply
throughout the Term unless otherwise expressly set forth herein.

     (d) If any provisions of this Lease shall be declared unenforceable in any
respect, such unenforceability shall not affect any other provision of this
Lease, and each such provision shall be deemed to be modified, if possible, in
such a manner as to render it enforceable and to preserve to the extent
possible the intent of the parties as set forth herein. This Lease shall be
construed and enforced in accordance with the laws of the state in which the
Property is located.

     (e) This Lease shall be binding upon and inure to the benefit of Landlord
and Tenant and their respective heirs, personal representatives and permitted
successors and assigns. All persons liable for the obligations of Tenant under
this Lease shall be jointly and severally liable for such obligations.

     (f) Neither party shall record this Lease or any memorandum without the
other party’s prior written consent.

26.  Notices. Any notice, consent or other communication under this Lease shall
be in writing and addressed to
Landlord or Tenant at their respective addresses specified in Section 1 above
(or to such other address as either may designate by no less than 10 business
days notice to the other) with a copy to any Mortgagee or other party
designated by Landlord by no less than 10 business days notice. Each notice or
other communication shall be deemed given if sent by prepaid overnight delivery
service or by certified mail, return receipt requested, postage prepaid or in
any other manner, with delivery in any case evidenced by a receipt, and shall
be deemed to have been given on the day of actual delivery to the intended
recipient (or if such day is not a business day, on the next succeeding
business day) or on the business day delivery is refused. The giving of notice
by Landlord’s attorneys, representatives and agents under this Section shall be
deemed to be the acts of Landlord.

27.  Security Deposit. At the time of signing this Lease, Tenant shall deposit
with Landlord the Security Deposit to be retained by Landlord as cash security
for the faithful performance and observance by Tenant of the provisions of this
Lease. Tenant shall not be entitled to any interest on the Security Deposit.
Landlord shall have the right to commingle the Security Deposit with its other
funds. Landlord may use the whole or any part of the Security Deposit for the
payment of any amount as to which Tenant is in default or to compensate
Landlord for any loss or damage it may suffer by reason of Tenant’s default
under this Lease. If Landlord uses all or any portion of the Security Deposit
as herein provided, within 10 business days after demand, Tenant shall pay
Landlord cash in an amount equal to that portion of the Security Deposit used
by Landlord. Any remaining amount of the Security Deposit shall be returned to
Tenant after the Expiration Date and surrender of the Premises to Landlord.
Landlord shall keep the Security Deposit in an interest bearing account and the
interest earned thereon shall become a part of the Security Deposit and paid to
Tenant in accordance with the immediately preceding sentence. Tenant shall
receive a form 1099 from the banking institution holding the Security Deposit
Upon written notice to Landlord, Tenant may elect to substitute a letter of
credit for the cash Security Deposit, provided that the letter of credit is in
form and substance reasonably satisfactory to Landlord and meets the criteria
of Exhibit “E” attached hereto and made a part hereof.

10

 

     Landlord and Tenant have executed this Lease on the respective date(s) set
forth below.

	 	 	 	 	 
	Date signed:

	 	Landlord:	 	 
	 
	 	 	 	 
	As of July 15, 2004	 	LIBERTY PROPERTY LIMITED PARTNERSHIP
	 
	 	 	 	 
	

	 	By:
	 	Liberty Property Trust, Sole General Partner
	 
	 	 	 	 
	

	 	By:	 	/s/ James J. Mazzarelli, Jr.
	

	 	 	 	
 
	

	 	Name:
	 	James J. Mazzarelli, Jr.
	

	 	Title:
	 	Senior Vice President / City Manager
	 
	 	 	 	 
	Date signed:

	 	Tenant:	 	 
	 
	 	 	 	 
	As of July 15, 2004	 	NOVAVAX, INC.
	 
	 	 	 	 
	

/s/ Dennis W. Genge	 	By:	 	/s/ Nelson M. Sims
	
 

	 	 	 	
 
	Attest
	 	Name:
	 	Nelson M. Sims
	

	 	Title:
	 	President and Chief Executive Officer

11

 

 Rider 1 to Lease Agreement 

(Multi-Tenant Industrial)

ADDITIONAL DEFINITIONS

“ADA” means the Americans With Disabilities Act of 1990 (42 U.S.C. § 1201 et
seq.), as amended and supplemented from time to time.

“Affiliate” means (i) any entity controlling, controlled by, or under common
control of, Tenant, (ii) any successor to Tenant by merger, consolidation or
reorganization, and (iii) any purchaser of all or substantially all of the
assets of Tenant as a going concern.

“Agents” of a party means such party’s employees, agents, representatives,
contractors, licensees or invitees. “Alteration” means any addition, alteration
or improvement to the Premises or Property, as the case may be.

“Building Rules” means the rules and regulations attached to this Lease as
Exhibit “B” as they may be amended from time to time.

“Building System” means any electrical, mechanical (including elevator),
structural, plumbing, heating, ventilating, air conditioning, sprinkler, life
safety or security system serving the Building.

“Common Areas” means all areas and facilities as provided by Landlord from time
to time for the use or enjoyment of all tenants in the Building or Property,
including, if applicable, driveways, sidewalks, parking, loading and landscaped
areas.

“Environmental Laws” means all present or future federal, state or local laws,
ordinances, rules or regulations (including the rules and regulations of the
federal Environmental Protection Agency and comparable state agency) relating
to the protection of human health or the environment.

“Event of Default” means a default described in Section 22(a) of this Lease.

“Hazardous Materials” means pollutants, contaminants, toxic or hazardous wastes
or other materials the removal of which is required or the use of which is
regulated, restricted, or prohibited by any Environmental Law.

“Interest Rate” means interest at the rate of prime (daily rate, as reported
in The Wall Street Journal) plus 2% per month.

“Land” means the lot or plot of land on which the Building is situated or the
portion thereof allocated by Landlord to the Building.

“Laws” means all laws, ordinances, rules, orders, regulations, guidelines and
other requirements of federal, state or local governmental authorities or of
any private association or contained in any restrictive covenants or other
declarations or agreements, now or subsequently pertaining to the Property or
the use and occupation of the Property.

“Lease Year” means the period from the Commencement Date through the succeeding
12 full calendar months (including for the first lease year any partial month
from the Commencement Date until the first day of the first full calendar
month) and each successive 12 month period thereafter during the Term.

“Maintain” means to provide such maintenance, repair and, to the extent
necessary and appropriate, replacement, as may be needed to keep the subject
property in good condition and repair.

“Monthly Rent” means the monthly installment of Minimum Annual Rent plus the
monthly installment of estimated Annual Operating Expenses payable by Tenant
under this Lease.

“Mortgage” means any mortgage, deed of trust or other lien or encumbrance on
Landlord’s interest in the Property or any portion thereof, including without
limitation any ground or master lease if Landlord’s interest is or becomes a
leasehold estate.

“Mortgagee” means the holder of any Mortgage, including any ground or master
lessor if Landlord’s interest is or becomes a leasehold estate.

“Operating Expenses” means all costs, charges and expenses incurred or charged
by Landlord in connection with the ownership, operation, maintenance and repair
of, and services provided to, the Property, including, but not limited to, (i)
the charges at standard retail rates charged by the applicable utility company
for any utilities provided by Landlord pursuant to Section 7 of this Lease,
(ii) the

Rider 1 - Page 1 of 2

 

cost of insurance carried by Landlord pursuant to Section 8 of this Lease
together with the cost of any deductible paid by Landlord in connection with an
insured loss, (iii) Landlord’s cost to Maintain the Property, subject to the
provisions of Section 9 of this Lease and subsection (vi) of this paragraph,
(iv) the cost of trash collection, (v) all levies, taxes (including real estate
taxes, sales taxes and gross receipt taxes), assessments (provided that they
are paid over the longest period allowed by the assessing authority and are
included in Operating Expenses as and when so paid), liens, license and permit
fees, together with the reasonable cost of contesting any of the foregoing (and
provided that Operating Expenses are reduced by the amount of any award
received by Landlord as a result of such contest), which are applicable to the
Term, and which are imposed by any authority or under any Law, or pursuant to
any recorded covenants or agreements, upon or with respect to the Property, or
any improvements thereto, or directly upon this Lease or the Rent or upon
amounts payable by any subtenants or other occupants of the Premises, or
against Landlord because of Landlord’s estate or interest in the Property, (vi)
the annual amortization (over their estimated economic useful life or payback
period, whichever is shorter) of the costs (including reasonable financing
charges) of capital improvements or replacements, (vii) a management and
administrative fee, not to exceed the rate charged for similar properties by
first class management companies (Tenant agrees that six percent (6%) of
Minimum Annual Rent and Annual Operating Expenses meets this standard) and
(viii) a tenant service charge (generally, the costs for personnel and
equipment reasonably required for Landlord to provide the maintenance and other
services required under this Lease and similar leases for other space at the
Property). The foregoing notwithstanding, Operating Expenses will not include:
(i) depreciation on the Building and original costs of the Building
construction and installation, (ii) financing and refinancing costs (except as
provided above), interest on debt or amortization payments on any mortgage, or
rental under any ground or underlying lease, (iii) leasing commissions,
advertising expenses, tenant improvements or other costs directly related to
the leasing of the Property, (iv) income, excess profits or corporate capital
stock tax imposed or assessed upon Landlord, unless such tax or any similar tax
is levied or assessed in lieu of all or any part of any taxes includable in
Operating Expenses above, or (v) any item for which Landlord is otherwise
compensated. If Landlord elects to prepay real estate taxes during any discount
period, Landlord shall be entitled to the benefit of any such prepayment.
Landlord shall have the right to directly perform (by itself or through an
affiliate) any services provided under this Lease provided that the Landlord’s
charges included in Operating Expenses for any such services shall not exceed
competitive market rates for comparable services.

“Property” means the Land, the Building, the Common Areas, and all
appurtenances to them.

“Rent” means the Minimum Annual Rent, Annual Operating Expenses and any other
amounts payable by Tenant to Landlord under this Lease.

“Taken” or “Taking” means acquisition by a public authority having the power of
eminent domain by condemnation or conveyance in lieu of condemnation.

“Tenant’s Share” means the percentage obtained by dividing the rentable square
feet of the Premises by the rentable square feet of the Building, as set forth
in Section 1 of this Lease.

“Transfer” means (i) any assignment, transfer, pledge or other encumbrance of
all or a portion of Tenant’s interest in this Lease, (ii) any sublease, license
or concession of all or a portion of Tenant’s interest in the Premises, or
(iii) any transfer of a controlling interest in Tenant.

Rider 1 - Page 2 of 2

 

 Rider 2 to Lease Agreement 

28.  Completion by Tenant.

     (a) Except for the work to be performed by Landlord described in
subsection 28(d), the Premises is leased to Tenant in its “as is” condition,
and shall be completed by Tenant and its contractor(s), at Tenant’s sole
expense, in accordance with the plans to be reviewed and approved by Landlord
(“Tenant’s Construction”). Tenant shall comply with Sections 12 and 13 of this
lease and the following conditions:

          (i) In addition to the right of Landlord and its Agents to inspect the
Premises set forth in Section 14 of this lease, Landlord and its Agents shall
have the right to conduct at a reasonable time and upon reasonable notice to
Tenant a walk-through inspection of the Premises as completed by Tenant.

          (iii) The warranties from Tenant’s contractor(s) shall be for the benefit
of Landlord as well as Tenant and Tenant shall deliver such warranties to
Landlord upon receipt, to the extent assignable. Tenant shall use good faith
diligent efforts to cause such warranties to be assignable.

          (iv) All construction shall be done in a good and workmanlike manner and
shall comply at the time of completion with all Laws, subject to the completion
by Landlord of the ADA work described in subsection 28(d) below. Tenant shall
deliver to Landlord copies of all certificates of occupancy, permits and
licenses required to be issued by any authority in connection with Tenant’s
Construction.

     (b) Tenant’s Construction shall not commence, and Tenant shall not have
access to the Premises for Tenant’s Construction, unless and until Tenant has
complied with Sections 12 and 13 of this lease and Landlord has approved
Tenant’s plans and specifications for Tenant’s Construction (including but not
limited to plans for storage of chemicals including identification of such
chemicals), such approval not to be unreasonably withheld, delayed or
conditioned. The date that Tenant enters the Premises to commence Tenant’s
Construction shall be the “Tenant’s Construction Access Date”. On and from the
Tenant’s Construction Access Date, Tenant shall commence payment of Tenant’s
Share of the cost of insurance, electric, gas, water and sewer provided to the
Premises, but not the payment of Minimum Annual Rent or other Annual Operating
Expenses, the obligation for which shall commence on the Commencement Date.

     (c) Tenant shall pay the costs, expenses and fees incurred for the
Tenant’s Construction; including without limitation (i) architectural,
engineering and design costs, (ii) the cost charged to Landlord or Tenant by
the general contractor and all subcontractors for performing such construction,
(iii) the cost to Landlord of performing directly any portion of such
construction, if Tenant fails to do so (iv) project management fees, (v)
construction permit fees, (vi) costs of built-in furniture, (vii) mechanical
and structural engineering fees, and (viii) only if Landlord manages the
construction, if Tenant fails to do so, or upon Tenant’s written request to
Landlord, an administrative and construction management fee for Landlord’s
supervision of such construction in an amount equal to seven percent (7%) of
the aggregate costs incurred by or on behalf of Landlord in connection with
such construction; provided, however, that Landlord agrees to credit Tenant
with an allowance equal to $73,290.00. Tenant shall promptly pay all costs for
Tenant’s Construction.

     (d) Landlord shall perform the following work at Landlord’s sole cost and
expense prior to the Commencement Date: repair parking lot and driveways, seal
coat and restripe the lot; power wash Building exterior; clean the Premises;
check and place all existing major Building Systems in proper working order
(including without limitation lights, HVAC, plumbing); provide one unisex ADA
compliant restroom; and install signage in accordance with Section 33.

     (e) Notwithstanding any provision of Section 12 to the contrary, Tenant
shall not be required to remove the following components of Tenant’s
Construction upon expiration of the Lease: partition walls and doors in place
for the three large rooms to be constructed in the first floor warehouse for
lab, pilot manufacturing and packaging functions. Tenant shall, however,
restore the ceilings in these three rooms to the 14’ height existing on the
date of this Lease, if Tenant rebuilds them at lower height as part of Tenant’s
Construction of these 3 rooms. Rebuilt ceilings shall include lighting, air
conditioning distribution grilles and fire sprinkler heads equal to or better
than what exists on the date of this Lease. Tenant shall remove specialized
equipment, process piping, containment dikes, tanks and other personal
property. Electrical wiring and or conduits shall be removed back to the
panels or sub-panels.

29.  Expansion Option.

     (a) Provided that Landlord has not given Tenant notice of a material
non-monetary default or any monetary default more than four (4) times in the
preceding 24-month period, that there then exists no Event of Default by Tenant
under this Lease, and that Tenant and Tenant’s Affiliates occupy all of the
Premises, Tenant shall have the right and option to lease the space in the
Building

Rider 2 - Page 1 of 5

 

adjoining the Premises, consisting of approximately 17,292 rentable square
feet (the “Expansion Premises”) as provided below in subsections 29(a)(i), (ii)
and (iii). The Existing Lease has a term ending March 31, 2008, with one
twenty four (24) month renewal term ending March 31, 2010, requiring nine (9)
months prior notice of renewal.

     (i) For so long as the Expansion Premises is subject to the lease
existing on the date of this lease (the “Existing Lease”) under the initial
term or renewal term (except as otherwise more specifically addressed in
subsections 29(a)(ii) or (iii)), Tenant shall have an option to lease the
Expansion Premises by providing written notice to Landlord, in which event the
lease of the Expansion Premises shall commence on the date that is six (6)
months following receipt of such notice by Landlord.

     (ii) If the tenant under the Existing Lease (the “Existing Tenant”) does
not exercise the renewal option for the period April 1, 2008, through March 31,
2010, Landlord shall provide a “notice of availability” to Tenant and Tenant
shall have a period of fifteen (15) business days in which to lease the
Expansion Premises by providing written notice to Landlord. If Tenant exercises
this expansion option, the lease of the Expansion Premises shall commence upon
the expiration of the Existing Lease.

     (iii) If the Existing Tenant does exercise the renewal option for the
period April 1, 2008 through March 31, 2010, Tenant shall have an option to
lease the Expansion Premises by providing written notice to Landlord not less
than six (6) months prior to the expiration of the Existing Lease renewal term.
If Tenant exercises this expansion option, the lease of the Expansion Premises
shall commence upon the expiration of the Existing Lease.

     (b) The lease of the Expansion Premises (and the obligation of Tenant to
pay Minimum Annual Rent and Operating Expenses for the Expansion Premises)
shall commence on the date provided in subsection 29(a)(i), (ii) or (iii), as
applicable, and shall end on the Expiration Date for the Premises. Upon
commencement of the lease of the Expansion Premises, the Expansion Premises
shall be included in the “Premises” for all purposes, and this option, having
been exercised, shall terminate. The Expansion Premises is leased to Tenant in
its “as is” condition, and Landlord shall have no obligation to improve the
Expansion Premises for Tenant’s occupancy. The Existing Tenant may remove the
back-up power generator and refrigerated temperature controlled rooms and
equipment, in addition to Existing Tenant’s personal property. Landlord shall
deliver possession of the Expansion Premises to Tenant in broom clean
condition, free and clear of all personal property of the Existing Tenant.
Minimum Annual Rent shall be payable for the Expansion Premises as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lease Year *	 	$/RSF Rate	 	 	Annual	 	 	 	Monthly	 
	1
	 	$	6.22	 	 	$	107,556.24	 	 	$	8,963.02	 
	2
	 	$	6.29	 	 	$	108,766.68	 	 	$	9,063.89	 
	3
	 	$	6.37	 	 	$	110,150.04	 	 	$	9,179.17	 
	4
	 	$	6.53	 	 	$	112,916.76	 	 	$	9,409.73	 
	5
	 	$	6.70	 	 	$	115,856.40	 	 	$	9,654.70	 
	6
	 	$	6.87	 	 	$	118,796.04	 	 	$	9,899.67	 
	7
	 	$	7.04	 	 	$	121,735.68	 	 	$	10,144.64	 
	8
	 	$	7.21	 	 	$	124,675.32	 	 	$	10,389.61	 
	9
	 	$	7.38	 	 	$	127,614.96	 	 	$	10,634.58	 
	10
	 	$	7.57	 	 	$	130,900.44	 	 	$	10,908.37	 

     provided, however, that:

     
(i) If the Lease of the Expansion Premises commences during the period:

	 
	8/1/04-9/30/05, then Annual Minimum Rent shall be $6.25 per square foot through 9/30/05; or

	 

	10/1/05-9/30/06, then Annual Minimum Rent shall be$6.50 per square foot through 9/30/06; or

	 

	10/1/06-9/30/07, then Annual Minimum Rent shall be $6.75 per square foot through 9/30/07; or

	 

	10/1/07-3/31/08 , then Annual Minimum Rent shall be $7.00 per square foot through 3/31/08.

     
(ii) If Existing Tenant exercises its one renewal option for twenty-four
(24) months, and if the Lease of the Expansion Premises commences during the
period:

	 
	4/1/08-9/30/09, then Annual Minimum Rent shall be $7.00 per square foot;or

	 

	10/1/09-3/31/10, then Annual Minimum Rent shall be $7.25 per square foot.

* The end of each Lease Year for the Expansion Premises shall correspond with
the end of each Lease Year for the initial Premises.

Rider 2 - Page 2 of 5

 

30.  Option to Extend Term. Provided that Landlord has not given Tenant notice
of a material non-monetary default or any monetary default more than four (4)
times in the 24-month period preceding the Expiration Date, that there then
exists no Event of Default by Tenant under this Lease, and that Tenant and
Tenant’s Affiliates occupy all of the Premises, Tenant shall have the right and
option (“Extension Option”) to extend the Term (only for the entire Premises,
including the Expansion Area if then part of the Premises) for two (2)
additional periods of five (5) years (each, an “Extension Term”), exercisable
in the following manner. If Tenant is desirous of exercising the extension
option under this Section 30, Tenant shall give Landlord prior written notice,
at least twelve (12) months in advance of the scheduled Expiration Date, of
Tenant’s intention to extend the Term (“Tenant’s Extension Notice”); it being
agreed that time is of the essence and that the Extension Option is personal to
Tenant and is non-transferable to any assignee or sublessee (but only if any
such assignment or sublease required Landlord’s consent) or other party.
Within ten (10) business days after receipt of Tenant’s Extension Notice,
Landlord shall notify Tenant of Landlord’s calculation of rent, which shall be
equivalent to ninety-five percent (95%) of Fair Market Rental Value (defined
below) as reasonably determined by Landlord, which Landlord proposes to be
applicable to the Extension Term (“Landlord’s Notice of Extension Rent Terms”).
Landlord shall include with Landlord’s Notice of Extension Rent Terms data in
support of Landlord’s calculation of Fair Market Rental Value. Within ten (10)
business days following Tenant’s receipt of Landlord’s Notice of Extension of
Rent Terms, Tenant shall notify Landlord in writing (the “Tenant Response”)
that Tenant either (1) elects to extend the Term for the Extension Term and
accepts Landlord’s calculation of rent for the Extension Term, or (2) elects to
extend the Term for the Extension Term, but disagrees with Landlord’s
calculation of rent and elects to submit the determination of rent applicable
to the Extension Term to arbitration as set forth in sub-section 30(d) below
(the “Arbitration Election”). If Tenant fails to issue the Tenant’s Response
within the time and in the manner set forth herein, Tenant will be deemed to
have withdrawn its Tenant’s Extension Notice and waives its Extension Option
under this Lease. If Tenant exercises its option to extend as set forth above,
the Extension Term shall be under the same terms and conditions as provided in
this Lease except as follows:

     (a) The Extension Term shall begin on the Expiration Date, as such date
may have been extended, and thereafter the expiration Date shall be deemed to
be the fifth (5th) anniversary thereof. All references in this lease to the
Term shall be deemed to mean the Term as extended by this Section 30.

     (b) The rent payable by Tenant shall be ninety-five percent (95%) of the
Fair Market Rental Value, as defined below, as of the commencement of the
Extension Term.

     (c) For the purposes of this Section 30, “Fair Market Rental Value” shall
mean, as of the date in question, the then current annual rental charge,
including provisions for subsequent increases and other adjustments for leases
or agreements to lease then currently executed in comparable space located in
the Building, the office park of which the Building is a part, and leases or
agreements to lease then currently executed for comparable space located
elsewhere in office buildings located in the Chester County, Pennsylvania area,
for a term commencing on or about the then scheduled Expiration Date of this
Lease. In determining Fair Market Rental Value, the following factors, among
others, shall be taken into account and given effect: size, location of
premises, lease term, condition of building, condition of premises, economic
concessions (including tenant improvements being performed by landlords for
tenants, or tenant improvements allowances being granted by landlords to
tenants), then being granted by landlords to tenants and services provided by
the landlords. The value of specialized improvements made to the Premises and
paid for directly by Tenant shall not be taken into account in determining Fair
Market Rental Value.

     (d) If the Tenant Response is the Arbitration Election, Fair Market Rental
Value shall be submitted to arbitration as follows: Fair Market Rental Value
shall be determined by impartial arbitrators, one to be chosen by the Landlord,
one to be chosen by Tenant, and a third to be selected, if necessary, as below
provided. The unanimous written decision of the two first chosen, without
selection and participation of a third arbitrator, or otherwise, the written
decision of a majority of three arbitrators chosen and selected as aforesaid,
shall be conclusive and binding upon Landlord and Tenant. Landlord and Tenant
shall each notify the other of its chosen arbitrator within ten (10) business
days following the Arbitration Election and, unless such two arbitrators shall
have reached a unanimous decision within thirty (30) days after their
designation, they shall so notify the President of the Philadelphia Board of
Realtors (or such organization as may succeed to said Philadelphia Board of
Realtors) and request him to select an impartial third arbitrator, who shall be
an office building owner, a real estate counselor or a broker familiar with
similar types of suburban office properties, to determine Fair Market Rental
Value as herein defined. Such third arbitrator and the first two chosen shall,
subject to commercial arbitration rules of the American Arbitration
Association, hear the parties and their evidence and render their decision
within thirty (30) days following the conclusion of such hearing and notify
Landlord and Tenant thereof. Landlord and Tenant shall bear the expense of the
third arbitrator (if any) equally. If the dispute between the parties as to a
Fair Market Rental Value has not been resolved before the commencement of
Tenant’s obligation to pay Rent based upon such Fair Market Rental Value, then
Tenant shall pay Minimum Annual Rent and other charges under the Lease for the
Premises based upon the Fair Market Value designated by Landlord until either
the agreement of the parties as to the Fair Market Rental Value, or the
decision of the arbitrators, as the case may be, at which time Tenant shall pay
any underpayment of Rent and other charges to Landlord, or Landlord shall
refund any overpayment of Rent and other charges to Tenant.

Rider 2 - Page 3 of 5

 

31.  Early Termination Option. Provided that (i) Landlord has not given Tenant
notice of a material non-monetary default or any monetary default more than
four (4) times in the preceding 24-month period, (ii) there then exists no
Event of Default by Tenant under this Lease, (iii) Tenant and Tenant’s
Affiliates occupy all of the Premises, and (iv) Tenant has not expanded the
Premises beyond 32,908 rentable square feet pursuant to Section 29 or
otherwise, Tenant shall have the right and option, exercisable by giving
Landlord a minimum of twelve (12) months prior written notice thereof, to
terminate this Lease on the expiration of the sixtieth (60th) full month of the
Term, or if such option to terminate on the expiration of the sixtieth (60th)
full month of the Term is not exercised, then on the expiration of the
eighty-fourth (84th) full month of the Term, by paying Landlord at the time of
giving notice a termination fee equal to $98,867.32 if the Lease terminates on
the expiration of the sixtieth (60th) full month of the Term, and $65,644.00 if
the Lease terminates on the expiration of the eighty-fourth (84th) full month
of the Term. Tenant shall pay all Rent under the Lease and abide by all of the
terms and conditions of the Lease through and including such early termination
date.

Acknowledgment by Officers of Landlord:

	 	 	 	 	 
	By:

	 	/s/ JJM	 	 
	

	 	
 	 	 
	 
	 	 	 	 
	By:
	 	Sr. VP	 	 
	

	 	
 	 	 

32.  Exclusive. During the Term of this lease, Landlord will not knowingly
lease space in the Building to any tenant which to Landlord’s knowledge is then
a direct competitor of Tenant in the pharmaceutical production business.

33.  Signage. Landlord, at Landlord’s expense, will place Tenant’s name and
logo on the monument sign in front of the Building, and Tenant’s name (but not
logo) on exterior signage at the front and rear entrances of the Building,
subject to and in compliance with all applicable Laws and Requirements and
recorded covenants and agreements.

34.  Broker. The parties agree that they have dealt with no brokers in
connection with this lease, except for USI Real Estate Advisors, LLC, whose
commission shall be paid by Landlord pursuant to separate agreement. Landlord
agrees to indemnify Tenant and hold Tenant harmless from the commission payable
to USI Real Estate Advisors, LLC, and each party agrees to indemnify and hold
the other harmless from any and all claims for commissions or fees in
connection with the Premises and this lease from any other real estate brokers
or agents with whom they may have dealt.

35.  Satellite Dish Antenna. Provided that Tenant is not in default under this
lease beyond applicable notice and cure periods, Tenant shall have the
non-exclusive right to install, maintain and repair a satellite dish antenna
(the “Antenna”) on the roof of the Building at a location designated by
Landlord and under and subject to the following conditions:

     (a) Tenant shall comply with all Laws (including but not limited to zoning
ordinances) relating to the installation, maintenance and repair of the
Antenna.

     (b) Tenant shall obtain Landlord’s prior approval of the location of the
Antenna and of the plans and specifications for the Antenna, which approval
shall not be unreasonably withheld, delayed or conditioned. If Landlord
approves installation of the Antenna on the roof of the Building, Tenant agrees
to consult with Landlord’s roofing contractor prior to installation and
strictly to comply with the roofing contractor’s recommendations and
requirements. Tenant shall pay all costs incurred in connection with the
Antenna including without limitation all architectural, engineering,
contractors’ and legal fees.

     (c) Tenant shall comply with the provisions of Section 12 of this Lease.

     (d) At least three (3) business days prior to installation, Tenant shall
notify Landlord of the date and time of the installation. Tenant shall install
the Antenna only if Landlord is present with Tenant at the installation.

     (e) Tenant shall maintain the Antenna in a safe, good and orderly
condition. The installation, maintenance, repair and removal of the Antenna
shall be performed at Tenant’s sole expense in a manner which will not impair
the integrity of, damage or adversely affect the warranty applicable to, the
roof or any other portion of the Building.

     (f) No later than the expiration or sooner termination of the Term, at
Tenant’s sole expense, Tenant shall remove the Antenna and repair any resulting
damage.

     (g) Tenant’s indemnification of Landlord pursuant to Section 8(d) of this
lease also applies to the Antenna and Tenant’s use of any portion of the
Building therefor. Without limiting the foregoing, Tenant solely shall be
responsible for any damages or injury caused by or in any way relating to the
Antenna, including, but not limited to, damage or injury caused by reason of
the Antenna collapsing or being blown from the roof, but excluding damage or
injury to the extent caused by the negligence or willful misconduct of Landlord
or its Agents.

Rider 2 - Page 4 of 5

 

     (h) Tenant shall not permit any other person or entity to use the Antenna,
and shall not receive revenue from use of the Antenna by others.

36.  Condition of Premises. Landlord represents and warrants that to the best
of its knowledge the Premises is free and clear of toxic and/or hazardous
materials and no part of the Premises, including the walls, ceilings,
structural steel, flooring, pipes or boilers is wrapped, insulated,
fire-proofed or surfaced with any asbestos-containing materials.
Notwithstanding anything to the contrary contained in this Lease, Landlord
agrees to indemnify, defend and hold harmless Tenant from and against any and
all liabilities, losses, damages, suits, actions, causes of action, costs,
expenses (including without limitation reasonable attorneys’ fees and
disbursements and court costs), penalties, fines, demands, judgments, claims or
liens (including without limitation claims or liens imposed under any so-called
“Superfund” or other environmental legislation) arising from or in connection
with the presence at the time of Tenant’s taking possession of the Premises of
Hazardous Materials on, or the subsequent removal thereof from, the Property or
the Building (including without limitation the Premises). Landlord shall have
the right to assume exclusive control of the defense of any such suit, action
or claim, and Tenant agrees to cooperate reasonably with Landlord in the
performance by Landlord of its obligations under this Section.

37.  ADA Compliance. Landlord shall be responsible at Landlord’s sole cost and
expense for compliance of exterior walks and entrances to the Premises with
applicable ADA requirements and shall provide in the Premises one unisex ADA
compliant restroom, as of the Commencement Date. Tenant shall be responsible
for all ADA compliance in the Premises from and after the Commencement Date.

38.  Janitorial, Trash. Notwithstanding anything in this Lease to the contrary,
Tenant shall provide for janitorial and trash removal services for the
Premises.

39.  Subordination of Landlord’s Lien. Upon written request of Tenant, Landlord
will enter into a subordination of Landlord’s lien with a lender(s) obtaining
financing liens on Tenant’s personal property located at the Premises,
substantially in the form attached hereto as Exhibit “F”.

40.  Monthly Payment Installments. At Tenant’s election by written notice to
Landlord, Landlord shall arrange, at no cost to Tenant, for Tenant’s monthly
installments of Minimum Annual Rent and Annual Operating Expenses to be made on
the first day of each month via the Direct Payment (ACH) process initiated by
Landlord from Tenant’s designated account to Landlord’s designated account.
Section 5 of this Lease entitled “Rent” is amended by deleting from the first
sentence the words “at Landlord’s address designated in Section 1 above unless
Landlord designates otherwise by no less than 10 days prior written notice to
Tenant” and substituting therefor the following: “together with monthly
installments of the Annual Operating Expenses as set forth in Section 6 below,
to an account designated by Landlord via the Direct Payment Rider attached to
this Lease as Exhibit “G” (unless Landlord designates otherwise by no less than
10 days prior written notice to Tenant) and which Direct Payment Rider shall be
executed by Tenant”.

The terms set forth in this Rider shall control over any inconsistent
provisions of Sections 2 – 27 of the Lease.

Rider 2 - Page 5 of 5

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