10-Q

FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended June 30, 2003 Commission File Number 0-22962

HUMAN GENOME SCIENCES, INC.

(Exact name of registrant)

Delaware
(State of organization) 22-3178468
(I.R.S. Employer Identification Number)

9410 Key West Avenue, Rockville, Maryland 20850-3331
(Address of principal executive offices and zip code)

(301) 309-8504
(Registrant’s telephone Number)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes  x    No  o

The number of shares of the registrant’s common stock outstanding on June 30, 2003 was 129,157,906.

TABLE OF CONTENTS

PART I		FINANCIAL INFORMATION	Page Number
	Item 1	Financial Statements
		Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002		3
		Consolidated Balance Sheets at June 30, 2003 and December 31, 2002		4
		Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002		5
		Notes to Consolidated Financial Statements		7
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
	Item 3	Quantitative and Qualitative Disclosures About Market Risk		16
	Item 4	Controls and Procedures		17
PART II		OTHER INFORMATION
	Item 4	Submission of Matters to a Vote of Security Holders		18
	Item 6	Exhibits and Reports on Form 8-K		18
		Signatures		21
		Exhibit Index	Exhibit Volume

2

PART I. FINANCIAL INFORMATION

HUMAN GENOME SCIENCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

			Three months ended						Six months ended
			June 30,						June 30,
			2003			2002			2003			2002
			(dollars in thousands, except share and per share amounts)
Revenue — research and development collaborative contracts			$	642		$	642		$	2,284		$	1,284
Costs and expenses:
	Research and development			47,787			48,703			94,080			94,290
	General and administrative			9,665			12,768			19,331			23,567
		Total costs and expenses		57,452			61,471			113,411			117,857
Income (loss) from operations				(56,810	)		(60,829	)		(111,127	)		(116,573	)
Interest income				15,345			20,253			34,292			43,661
Interest expense				(5,929	)		(5,934	)		(11,874	)		(11,886	)
Income (loss) before taxes				(47,394	)		(46,510	)		(88,709	)		(84,798	)
Provision for income taxes				—			—			—			—
Net income (loss)			$	(47,394	)	$	(46,510	)	$	(88,709	)	$	(84,798	)
Net income (loss) per share, basic and diluted			$	(0.37	)	$	(0.36	)	$	(0.69	)	$	(0.66	)
Weighted average shares outstanding, basic and diluted				129,055,376			128,511,597			128,975,343			128,434,134

The accompanying Notes to Consolidated Financial Statements are an integral part hereof.

3

HUMAN GENOME SCIENCES, INC.
CONSOLIDATED BALANCE SHEETS

			June 30,			December 31,
			2003			2002
			(dollars in thousands, except
			share and per share amounts)
Assets
Current assets:
	Cash and cash equivalents		$	32,675		$	25,205
	Short-term investments			1,111,733			1,261,183
	Prepaid expenses and other current assets			4,882			10,528
		Total current assets		1,149,290			1,296,916
Long-term investments				23,481			15,071
Property, plant and equipment (net of accumulated depreciation and amortization)				142,393			126,437
Restricted investments				240,528			205,352
Other assets				20,917			18,411
		TOTAL ASSETS	$	1,576,609		$	1,662,187
Liabilities and Stockholders’ Equity
Current liabilities:
	Current portion of long-term debt		$	448		$	448
	Current portion of capital lease obligation			263			241
	Accounts payable and accrued expenses			24,216			34,570
	Accrued payroll and related taxes			10,736			7,911
	Deferred revenues			2,568			2,568
		Total current liabilities		38,231			45,738
Long-term debt, net of current portion				503,020			503,020
Capital lease obligation, net of current portion				114			261
Deferred revenues				8,987			10,271
Other liabilities				8,597			2,344
		Total liabilities		558,949			561,634
Stockholders’ equity:
	Preferred stock			—			—
	Common stock			1,292			1,289
	Additional paid-in capital			1,760,001			1,757,685
	Unearned portion of compensatory stock options			—			(229	)
	Accumulated other comprehensive income (loss)			46,623			43,355
	Retained deficit			(790,256	)		(701,547	)
		Total stockholders’ equity		1,017,660			1,100,553
		TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,576,609		$	1,662,187

The accompanying Notes to Consolidated Financial Statements are an integral part hereof.

4

HUMAN GENOME SCIENCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

				Six months ended
				June 30,
				2003			2002
				(dollars in thousands)
Cash flows from operating activities:
	Net income (loss)			$	(88,709	)	$	(84,798	)
	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
		Accrued interest on short-term and restricted investments			3,675			5,401
		Depreciation and amortization			11,973			8,319
		Loss (gain) on disposal of fixed assets			(21	)		237
		Compensation expense related to stock options			229			33
		Changes in operating assets and liabilities:
			Prepaid expenses and other current assets		5,648			(8,747	)
			Other assets		754			1,114
			Accounts payable and accrued expenses		(9,024	)		2,612
			Accrued payroll and related taxes		2,825			2,273
			Deferred revenues		(1,284	)		(1,284	)
			Other liabilities		197			283
		Net cash provided by (used in) operating activities			(73,737	)		(74,557	)
Cash flows from investing activities:
	Capital expenditures — property, plant and equipment				(41,452	)		(34,598	)
	Proceeds from sale of property, plant and equipment				15,000			—
	Purchase of short-term investments and marketable securities				(290,300	)		(331,843	)
	Proceeds from sales and maturities of investments and marketable securities				427,659			372,366
		Net cash provided by (used in) investing activities			110,907			5,925
Cash flows from financing activities:
	Proceeds from sale of restricted investments				22,247			—
	Restricted investments				(54,141	)		(5,302	)
	Payments on capital lease				(125	)		(119	)
	Proceeds from issuance of common stock (net of expenses)				2,319			2,620
		Net cash provided by (used in) financing activities			(29,700	)		(2,801	)
Net increase (decrease) in cash and cash equivalents					7,470			(71,433	)
Cash and cash equivalents — beginning of period					25,205			88,319
Cash and cash equivalents - end of period				$	32,675		$	16,886
Supplemental disclosures of cash flow information:
	Cash paid during the period for:
		Interest		$	10,755		$	10,757
		Income taxes		$	—		$	—

5

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES (DOLLARS IN THOUSANDS):

In February 2003, the Company tendered its equity interest in Vascular Genetics, Inc. (“VGI”), a privately-held company, in exchange for approximately an 18% equity interest in Corautus Genetics Inc., a publicly-traded company that resulted from the merger of VGI and GenStar Therapeutics Corporation. As of the date of this exchange, the Company had no carrying value in its equity interest in VGI. Immediately following this transaction, the market value of the Company’s investment in Corautus was approximately $5,659.

The accompanying Notes to Consolidated Financial Statements are an integral part hereof.

6

HUMAN GENOME SCIENCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2003
(dollars in thousands, except share and per share data)

Note 1. Interim Financial Statements

The accompanying unaudited consolidated financial statements of Human Genome Sciences, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments necessary to present fairly the results of operations for the three and six month periods ended June 30, 2003 and 2002, the Company’s financial position at June 30, 2003, and the cash flows for the six month periods ended June 30, 2003 and 2002. These adjustments are of a normal recurring nature.

Certain notes and other information have been condensed or omitted from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s 2002 Annual Report on Form 10-K and the Company’s March 31, 2003 Quarterly Report on Form 10-Q.

The results of operations for the three and six month periods ended June 30, 2003 are not necessarily indicative of future financial results.

Note 2. Stock-Based Compensation

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 148, Accounting for Stock-Based Compensation — Transition and Disclosure (“SFAS No. 148”), the effect on net loss and net loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”) to stock-based employee compensation is as follows:

		Three months ended						Six months ended
		June 30,						June 30,
		2003			2002			2003			2002
Net income (loss), as reported		$	(47,394	)	$	(46,510	)	$	(88,709	)	$	(84,798	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(18,844	)		(36,226	)		(54,415	)		(64,427	)
Add: Stock-based non-employee compensation included in included in net income (loss)			—			17			229			33
Pro forma net income (loss)		$	(66,238	)	$	(82,719	)	$	(142,895	)	$	(149,192	)
Net income (loss) per share:
	Basic and diluted — as reported	$	(0.37	)	$	(0.36	)	$	(0.69	)	$	(0.66	)
	Basic and diluted — pro forma	$	(0.51	)	$	(0.64	)	$	(1.11	)	$	(1.16	)

The effect of applying SFAS No. 123 on the three and six month periods ended June 30, 2003 and 2002 pro forma net loss and net loss per share as stated above, is not necessarily representative of the effects on reported net loss for future years due to, among other things, (1) the vesting period of the stock options and (2) the fair value of additional stock options in future years.

7

HUMAN GENOME SCIENCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2003
(dollars in thousands, except share and per share data)

Note 3. Comprehensive Income (Loss)

SFAS No. 130, Reporting Comprehensive Income, requires unrealized gains or losses on the Company’s available-for-sale short-term and restricted securities, and on the Company’s long-term investments in Transgene, S.A. (“Transgene”), Cambridge Antibody Technology, Corautus Genetics Inc. (“Corautus”) and Ciphergen, along with the activity for the Company’s Foreign Currency Translation Adjustment, to be included in other comprehensive income. See Note 5, Investment in Corautus Genetics Inc., for discussion of the Company’s investment in Corautus.

During the three and six month periods ended June 30, 2003 and 2002, total comprehensive income (loss) amounted to:

		Three months ended						Six months ended
		June 30,						June 30,
		2003			2002			2003			2002
Net income (loss)		$	(47,394	)	$	(46,510	)	$	(88,709	)	$	(84,798	)
Net unrealized gains (losses):
	Short-term investments		(5,031	)		10,025			(8,419	)		(7,929	)
	Long-term investments		10,144			(8,027	)		8,410			(17,993	)
	Restricted investments		3,068			1,161			3,282			(56	)
	Foreign currency translation		(5	)		—			(5	)		—
Total comprehensive income (loss)		$	(39,218	)	$	(43,351	)	$	(85,441	)	$	(110,776	)

Realized gains and losses on securities sold before maturity, which are included in the Company’s net income (loss) for the three and six month periods ended June 30, 2003 and 2002, and their respective net proceeds were as follows:

	Three months ended						Six months ended
	June 30,						June 30,
	2003			2002			2003			2002
Realized gains	$	1,250		$	913		$	4,530		$	4,508
Realized losses		(415	)		(131	)		(415	)		(473	)
Net proceeds		95,919			57,642			213,578			284,689

Note 4. Commitments and Other Matters

In June 2003, the Company restructured the two lease agreements it had previously entered into in 2001 (the “October 2001 lease” and the “November 2001 lease”) as a result of new accounting requirements established by Financial Accounting Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51 (“FIN 46”). The October 2001 lease relates primarily to a research campus, located at 9800 Medical Center Drive, which the Company had leased for seven years from a trust controlled by third parties established solely for that purpose. The November 2001 lease related to the construction of the

8

HUMAN GENOME SCIENCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2003
(dollars in thousands, except share and per share data)

Note 4. Commitments and Other Matters (continued)

Company’s research and development and administrative main campus and a large-scale manufacturing facility. The Company originally planned to lease these November 2001 properties for approximately five years, following an estimated two-year construction period, from a trust controlled by third parties established solely for that purpose. The restructurings have eliminated and dissolved the trusts that were parties to these leases.

Under the terms of the restructuring of the October 2001 lease, the Company will continue to operate under the original lease, which has been assigned, effective June 26, 2003, to the existing owner of the facility (the “9800 MCD lease”). The total financed cost of the facility covered under the 9800 MCD lease is approximately $76,000. The Company’s rent obligation began in 2001 and will approximate the lessor’s debt service costs. As of June 30, 2003, the lessor had fixed the interest rate on $76,000 at a weighted-average interest rate of approximately 4.3%.

The November 2001 lease was cancelled effective June 30, 2003. The total projected financed cost of the facilities originally anticipated to be covered under the November 2001 lease was approximately $450,000. The Company has now separated the financing for the research and development and administrative main campus from the large-scale manufacturing facility. With respect to the research and development and administrative main campus, located on the Traville site, Wachovia Development Corporation (“WDC”) acquired ownership of the project and entered into an approximately seven-year operating lease (the “Traville lease”) with the Company. WDC, a wholly-owned subsidiary of Wachovia Corporation, is primarily engaged in real estate finance, development and leasing activities, with direct real estate investments and net real estate lease investments exceeding $650,000 at the time of inception of the Traville lease. The total projected financed cost of the Traville lease facility is approximately $200,000. The construction of the research and development and administrative main campus is on schedule and the facility is expected to be completed during the second half of 2003, at which time the rent obligations under the Traville lease will commence. The Company’s rent obligation will approximate the lessor’s debt service costs plus a return on the lessor’s equity investment. The Company’s rent obligation under the Traville lease is floating and is based primarily on short-term commercial paper, but the lessor can lock in a fixed interest rate at any time at the Company’s request. The floating rate was approximately 1.3% as of June 30, 2003.

With respect to the large-scale manufacturing facility, the Company has assumed ownership of and responsibility for financing this project. The total projected financed cost of this facility had been approximately $250,000, but as a result of a redesign completed earlier in 2003, the Company anticipates that the facility will be completed by 2005 at a cost of approximately $210,000.

With respect to restricted investments, the Company has no restricted investment obligations for the large-scale manufacturing facility. The Company’s restricted investments with respect to the 9800 MCD lease, the Traville lease and other leases for the existing process development and manufacturing facility could reach approximately $295,000, assuming the full amount committed is used for construction purposes. The Company will be required to restrict investments equal to 100% of the full amount of the approximately $76,000 financed project cost for the 9800 MCD lease and 102% of the full amount of the approximately $200,000 financed project cost for the Traville lease, or $204,000, by the conclusion of the construction period, as collateral for the duration of the leases. In addition, the Company is also required to maintain up to a maximum of $15,000 in restricted investments with respect to the process development and manufacturing facility leases. The Company’s restricted investments were $240,528 and $205,352 as of June 30, 2003 and December 31, 2002, respectively.

9

HUMAN GENOME SCIENCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2003
(dollars in thousands, except share and per share data)

Note 4. Commitments and Other Matters (continued)

Under the 9800 MCD and Traville lease agreements, which the Company has accounted for as operating leases, the Company has the option to purchase the properties, during or at the end of the lease terms, at an aggregate amount of approximately $276,000, assuming the full amount of the financings is used for construction activities. Alternatively, the Company can cause the properties to be sold to third parties.

With respect to the 9800 MCD lease, the Company has a residual value guarantee of 85% of the total financed cost at lease termination. In the event of the Company’s default, the Company is responsible for 100% of the total financed cost of the project. Because the lessor is responsible for servicing and repaying the debt financings to various parties, the Company has made the residual value guarantee to the lessor. In the event the lessor defaults to the lender, the Company has the right to cure the default or exercise its option to acquire the property. At any time during the lease term, the Company has the option to purchase legal and/or beneficial interest in the project for 100% of the lease balance plus any unpaid indemnity amounts. As of June 30, 2003, the Company’s residual value guarantee for the 9800 MCD lease had reached the full maximum amount of $64,600.

With respect to the Traville lease, upon completion the Company will have a residual value guarantee of 87.75% of the total financed cost at lease termination. In the event of default, the Company is responsible for 100% of the total financed cost of the project. During the construction period, except under certain limited circumstances, recourse to the Company is limited to approximately 89.9% of the financed cost incurred. Because the lessor is responsible for servicing and repaying the debt financings to various parties, the Company has made the residual value guarantee to the lessor. In the event the lessor defaults to the lender, the Company has the right to cure the default or exercise its option to acquire the property. The Company has the option to purchase legal and/or beneficial interest in the project for 100% of the lease balance plus any unpaid indemnity amounts at any time. As of June 30, 2003, recourse against the Company for the Traville lease was approximately $130,494, as compared to the potential maximum guarantee of $175,500, assuming the full amount of the lease is used for construction activities.

In connection with the 9800 MCD lease, the Company must maintain minimum levels of unrestricted cash, cash equivalents and marketable securities, as well as comply with certain dividend restrictions. In connection with the Traville lease, the Company must maintain minimum levels of unrestricted cash, cash equivalents and marketable securities and certain debt ratios.

In accordance with the provisions of Financial Accounting Standards Board Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (“FIN 45”), the Company recorded the estimated fair market value of the maximum residual value guarantee of the Traville lease during the second quarter of 2003. The Company has estimated the fair market value of the guarantee as approximately $4,400 and has recorded this amount within Other assets and Other liabilities on the Company’s consolidated balance sheet as of June 30, 2003. The Company will amortize both amounts on a straight-line basis over the term of the lease.

There are no recourse provisions under either the 9800 MCD or Traville lease that would enable the Company to recover from third parties any of the amounts paid under the guarantees. The Company

10

HUMAN GENOME SCIENCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended June 30, 2003
(dollars in thousands, except share and per share data)

Note 4. Commitments and Other Matters (continued)

has set aside collateral in the form of restricted investments sufficient to satisfy all current obligations under the guarantees. In addition, the Company has the right to cause the sale of the properties covered by the leases and may recover all or a portion of the money paid under the guarantees.

During the second quarter of 2003, the Company sold equipment with an original cost of approximately $15,000 to an equipment lessor and has entered into a lease-back arrangement for a lease with a term of five years, which the Company has accounted for as an operating lease. The Company must either purchase the equipment at the end of the initial term at the greater of fair market value or 20% of original cost or extend the term of the lease for an additional year. Minimum annual rentals are approximately $3,000.

Note 5. Investment in Corautus Genetics Inc.

During the first quarter of 2003, the Company tendered its equity interest in Vascular Genetics, Inc. (“VGI”), a privately-held company, in exchange for approximately an 18% equity interest in Corautus Genetics Inc., a publicly-traded company that resulted from the merger of VGI and GenStar Therapeutics Corporation. As of the date of this exchange, the Company had no carrying value in its equity interest in VGI. Immediately following this transaction, the market value of the Company’s investment in Corautus was approximately $5,659. As a result, the Company recorded an unrealized gain equal to the market value for this long-term investment as of the date of this exchange. The Company is adjusting this unrealized gain to reflect changes in market value in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities.

Note 6. Fair Value of Financial Instruments

The carrying amounts for the Company’s cash and cash equivalents, investments, other assets, accounts payable and accrued expenses and other accrued expenses reflected in the consolidated balance sheets at June 30, 2003 and December 31, 2002 approximate their respective fair values.

The carrying value of the Company’s debt was approximately $504,000 as of both June 30, 2003 and December 31, 2002. The fair value of the Company’s long-term debt is based primarily on quoted market prices. The quoted market prices of the Company’s convertible debt increased as of June 30, 2003 as compared to December 31, 2002, and accordingly, the fair value of the Company’s debt increased to approximately $425,000 as of June 30, 2003 from $344,000 as of December 31, 2002.

Note 7. Recent Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51 (“FIN 46”). FIN 46 clarifies the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. It requires the consolidation of variable interest entities in which an enterprise absorbs a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interests in the entity. FIN 46 applies immediately to variable interest entities created after January 31, 2003 and for periods beginning after June 15, 2003 for all other variable interest entities. As a result of these new requirements, the Company restructured certain of its leases. See Note 4, Commitments and Other Matters, for additional discussion.

11

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three Month and Six Month Periods Ended June 30, 2003 and 2002

Overview

     Human Genome Sciences’ goal is to build a global biopharmaceutical company that discovers, develops, manufactures and markets gene-based drugs to treat and cure disease. The success of our drug discovery efforts derives from our expertise in genomics, the systematic collection and understanding of human genes and their functions, and from our exclusive focus on developing human protein and antibody drugs. We focus our internal product development efforts on novel human protein and antibody drugs discovered through genomics-based research, and on new improved long-acting versions of existing protein drugs created using our albumin fusion technology.

     We are conducting clinical trials with ten of our products. Additional products are in clinical trials by companies with which we are collaborating. We continue to evaluate new drugs for advancement into clinical development.

     We have established strategic partnerships with a number of leading pharmaceutical and biotechnology companies to leverage our strengths and to gain access to complementary technologies and sales and marketing infrastructure. Some of these partnerships provide us with milestone and royalty payments as products are developed and commercialized. We also are entitled to certain co-promotion, co-development, revenue sharing and other product rights.

     We have not received any significant product sales revenue or royalties from product sales and any significant revenue from product sales or from royalties on product sales in the next several years is uncertain. To date, all of our revenue relates to payments made under our collaboration agreements with GlaxoSmithKline and, to a lesser extent, other agreements. The GlaxoSmithKline collaboration agreement and many of our other collaboration agreements expired in 2001 and will only generate additional milestone and royalty payments if our collaborators successfully develop drugs based on our technology. We may not receive any of these payments and may not be able to enter into additional collaboration agreements.

     We expect that any significant revenue or income for at least the next several years may be limited to interest income, payments under various collaboration agreements to the extent milestones are met, payments from the sale of product rights and other payments from other collaborators and licensees under existing or future arrangements, to the extent that we enter into any future arrangements. We expect to continue to incur substantial expenses relating to our research and development efforts, as we focus on preclinical and clinical trials required for the development of therapeutic protein, antibody and fusion protein product candidates. As a result, we expect to incur continued and significant losses over the next several years unless we are able to realize additional revenues under existing or new collaboration agreements. The timing and amounts of such revenues, if any, cannot be predicted with certainty and will likely fluctuate sharply. Results of operations for any period may be unrelated to the results of operations for any other period. In addition, historical results should not be viewed as indicative of future operating results.

Results of Operations

     Revenues. Revenues were $0.6 million for the three months ended June 30, 2003 compared to revenues of $0.6 million for the three months ended June 30, 2002. Revenues for both the three month periods ended June 30, 2003 and 2002 represent revenue recognized from Transgene. Revenues were $2.3 million for the six months ended June 30, 2003 compared to revenues of $1.3 million for the six months ended June 30, 2002. Revenues for the six months ended June 30, 2003 include a $1.0 million milestone payment earned and received from GlaxoSmithKline (“GSK”) and $1.3 million in revenue recognized from Transgene. Revenues for the six months ended June 30, 2002 represent revenue recognized from Transgene.

12

Results of Operations (continued)

     Expenses. Research and development expenses were $47.8 million for the three months ended June 30, 2003 compared to $48.7 million for the three months ended June 30, 2002. Research and development expenses were $94.1 million for the six months ended June 30, 2003 compared to $94.3 million for the six months ended June 30, 2002. We track our research and development expenditures by type of cost incurred – discovery, drug development, manufacturing and clinical development costs.

     Our discovery costs decreased to $8.0 million for the three months ended June 30, 2003 from $11.2 million for the three months ended June 30, 2002. Discovery costs decreased to $16.4 million for the six months ended June 30, 2003 from $22.8 million for the six months ended June 30, 2002. The decrease in discovery costs for both the three and six month periods ended June 30, 2003 is primarily due to reduced activity in gene discovery and in the study of preclinical therapeutic protein drug candidates.

     Our drug development costs decreased slightly to $13.5 million for the three months ended June 30, 2003 from $13.8 million for the three months ended June 30, 2002. Drug development costs increased slightly to $27.3 million for the six months ended June 30, 2003 from $27.0 million for the six months ended June 30, 2002.

     Our manufacturing costs increased to $15.7 million for the three months ended June 30, 2003 from $14.4 million for the three months ended June 30, 2002. Manufacturing costs increased to $31.1 million for the six months ended June 30, 2003 from $28.3 million for the six months ended June 30, 2002. The increase in manufacturing costs for both the three and six month periods ended June 30, 2003 is due to the increased production activities within our process development and manufacturing facilities needed to support our increased clinical activities.

     Our clinical development costs increased to $10.6 million for the three months ended June 30, 2003 from $9.3 million for the three months ended June 30, 2002. Clinical development costs increased to $19.3 million for the six months ended June 30, 2003 from $16.2 million for the six months ended June 30, 2002. The increase in clinical development costs for both the three and six month periods ended June 30, 2003 is primarily due to the cost of continuing ongoing trials from 2002 as well as initiating new trials in 2003.

     General and administrative expenses decreased to $9.7 million for the three months ended June 30, 2003 from $12.8 million for the three months ended June 30, 2002. General and administrative expenses decreased to $19.3 million for the six months ended June 30, 2003 from $23.6 million for the six months ended June 30, 2002. The decrease for both the three and six month periods ended June 30, 2003 resulted primarily from lower legal expenses associated with filing and prosecuting patent applications relating to genes and proteins we discovered, partially offset by higher facility and other costs.

     Interest income decreased for both the three and six month periods ended June 30, 2003, compared to the three and six month periods ended June 30, 2002, due to lower average cash balances as a result of our net losses in 2003 and 2002 and our capital expenditures during this period, as well as a reduced yield on our investments. Interest expense decreased for both the three and six month periods ended June 30, 2003 due to a reduction in our capital lease obligation for 2003 compared to 2002.

     Net Income (Loss). We recorded a net loss of $47.4 million, or $0.37 per share, for the three months ended June 30, 2003 compared to a net loss of $46.5 million, or $0.36 per share, for the three months ended June 30, 2002. We recorded a net loss of $88.7 million, or $0.69 per share, for the six months ended June 30, 2003 compared to a net loss of $84.8 million, or $0.66 per share, for the six months ended June 30, 2002. The increased loss for the three and six month periods ended June 30, 2003 reflects increased investment in the development of preclinical and clinical drug candidates, increased manufacturing operations and reduced net interest income, partially offset by decreased general and administrative expenses.

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Liquidity and Capital Resources

     We had working capital of $1.11 billion and $1.25 billion at June 30, 2003 and December 31, 2002, respectively. The reduction in our working capital during the six months ended June 30, 2003 is primarily due to our net loss, along with a net increase in our restricted investments and capital expenditures during this period.

     We expect to continue to incur substantial expenses relating to our research and development efforts, which may increase relative to historical levels as we focus on development and clinical trials required for the development of therapeutic protein, antibody and fusion protein product candidates.

     The amounts of expenditures that will be needed to carry out our business plan are subject to numerous uncertainties, which may adversely affect our liquidity and capital resources. We are proceeding with numerous clinical trials. We have several Phase 1 and Phase 2 trials underway and expect to initiate additional trials in the future. Completion of these trials may extend several years or more, but the length of time generally varies considerably according to the type, complexity, novelty and intended use of the drug candidate. We estimate that the completion periods for our Phase 1, Phase 2 and Phase 3 trials could span one year, one to two years and two to four years, respectively. The duration and cost of our clinical trials are a function of numerous factors such as the number of patients to be enrolled in the trial, the amount of time it takes to enroll them, the length of time they must be treated and observed, and the number of clinical sites and countries for the trial.

     We identify our potential drug candidates by conducting numerous preclinical studies. We may conduct multiple clinical trials to cover a variety of indications for each drug candidate. Based upon the results from our trials, we may elect to discontinue clinical trials for certain indications or certain drugs in order to concentrate our resources on more promising drug candidates.

     We are advancing many drug candidates, including therapeutic proteins, antibodies and albumin fusion proteins, in part to diversify the risks associated with our research and development spending. In addition, our manufacturing plants have been designed to enable multi-product manufacturing capability. Accordingly, we believe our future financial commitments, including those for preclinical, clinical or manufacturing activities, are not substantially dependent on any single drug candidate. Should we be unable to sustain a multi-product drug pipeline, our dependence on the success of one or a few drug candidates would increase.

     We must receive FDA clearance to advance each of our products into and through each phase of clinical testing. Moreover, we must receive FDA regulatory approval to launch any of our products commercially. In order to receive such approval, the FDA must conclude that our clinical data establish safety and efficacy and that our products and the manufacturing facilities meet all FDA requirements. We cannot be certain that we will establish sufficient safety and efficacy data to receive regulatory approval for any of our drugs or that our drugs and the manufacturing facilities will meet all FDA requirements.

     In addition, part of our business plan includes collaborating with others. For example, GSK is developing products discovered by GSK as part of our collaboration with them. We have no control over the progress of GSK’s development plans. While we have received an aggregate of $2.0 million from GSK in connection with development milestones met by GSK during 2003 and 2002, we cannot forecast with any degree of certainty the likelihood of receiving future milestone or royalty payments. We also cannot forecast with any degree of certainty whether any of our current or future collaborations will affect our drug development efforts and therefore, our capital and liquidity requirements.

     Because of the uncertainties discussed above, the costs to advance our research and development projects are difficult to estimate and may vary significantly. We expect that our existing funds and interest income will be sufficient to fund our operations for the next several years.

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Liquidity and Capital Resources (continued)

     Our future capital requirements and the adequacy of our available funds will depend on many factors, including scientific progress in our research and development programs (including our discovery and development activities), the magnitude of those programs, the ability to establish collaborative and licensing arrangements, the cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and competing technological and market developments. There can be no assurance that any additional financing required in the future will be available on acceptable terms, if at all.

     Depending upon market and interest rate conditions, we are exploring, and, from time to time, may take actions to strengthen further our financial position. In this regard, we recently restructured certain of our outstanding lease obligations and may further modify our lease financings and repurchase or restructure some or all of our outstanding convertible debt instruments in the future depending upon market and other conditions.

     Our future liquidity and capital resources will be affected by our contractual obligations, including two seven-year lease agreements that relate to a research campus and a research and development and administrative campus, either acquired or under construction (the “9800 MCD lease” and the “Traville lease”, respectively). None of our directors, officers or employees has any financial interest with regard to these lease arrangements.

     The 9800 MCD lease resulted from the restructure of an October 2001 lease, and relates to a $76.0 million research campus located at 9800 Medical Center Drive, adjacent to our future corporate campus. We are leasing this property for seven years. The rent under this lease is fixed. As of June 30, 2003, the weighted-average interest rate was approximately 4.3%.

     The Traville lease resulted from the cancellation of a November 2001 lease effective June 30, 2003 and relates to a research and development and administrative main campus located on the Traville site. The total projected financed cost of this main campus along with a large-scale manufacturing facility also anticipated to be covered under the original lease was approximately $450.0 million. We have now separated the financing for the research and development and administrative main campus from the large-scale manufacturing facility.

     With respect to the research and development and administrative main campus, we have entered into an approximately seven-year operating lease. The total projected financed cost of the Traville lease facility is approximately $200.0 million. The construction of the research and development and administrative main campus is on schedule and the facility is expected to be completed during the second half of 2003, at which time the rent obligations under the Traville lease will commence. Our rent obligation will approximate the lessor’s debt service costs plus a return on the lessor’s equity investment. The rent under this lease is currently based on the rate for short-term commercial paper, but the lessor can lock in a fixed interest rate at any time at our request. To the extent the lessor does not lock in a fixed interest rate, if interest rates increase, our rent obligations would also increase. If interest rates decrease, our rent obligations would decrease. The current floating rate was approximately 1.3% as of June 30, 2003.

     With respect to the large-scale manufacturing facility, we have assumed ownership of and responsibility for financing this project. The total projected financed cost of this facility had been approximately $250.0 million, but as a result of a redesign completed earlier in 2003, we anticipate the facility to be completed by 2005 at a cost of approximately $210.0 million. In addition, because we have assumed ownership and financing of this project, we have reduced our total future contractual obligations by approximately $19.0 million, based on the estimated future payments that had been due under the now cancelled operating lease for this facility. We no longer have any restricted investment obligations for the large-scale manufacturing facility that had been part of the November 2001 lease.

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Liquidity and Capital Resources (continued)

     Our restricted investments with respect to the 9800 MCD lease, the Traville lease and other leases for the existing process development and manufacturing facility could reach approximately $295.0 million, assuming the full amount committed is used for construction purposes. We will be required to restrict investments equal to 100% of the full amount of the approximately $76.0 million financed project cost for the 9800 MCD lease and 102% of the full amount of the approximately $200.0 million financed project cost for the Traville lease, or $204.0 million, by the conclusion of the construction period, as collateral for the duration of the leases. In addition, we are also required to maintain up to a maximum of $15.0 million in restricted investments with respect to the process development and manufacturing facility leases. Our restricted investments for all of these leases aggregated $240.5 million as of June 30, 2003 compared to $205.4 million as of December 31, 2002.

     Under the 9800 MCD and Traville leases, which we have accounted for as operating leases, we have the option to purchase the properties during and at the end of the lease terms at an aggregate amount of approximately $276.0 million. Alternatively, we can cause the properties to be sold to third parties. We are contingently liable for the residual value guarantee associated with each property in the event the net sale proceeds are less than the original financed costs of the facilities. Upon completion of the facilities covered by these leases, assuming the full amount of the leases is used for construction activities, we will be contingently liable for the residual value guarantee associated with each property up to an aggregate amount of $240.1 million. Of this amount, the residual value guarantee for the 9800 MCD lease and the Traville lease will be approximately $64.6 million and $175.5 million, respectively, assuming the full amount of the financings is used for construction activities.

     Our unrestricted and restricted funds may be invested in U.S. Treasury securities, government agency obligations, high grade corporate debt securities and various money market instruments rated “A” or better. Such investments reflect our policy regarding the investment of liquid assets, which is to seek a reasonable rate of return consistent with an emphasis on safety, liquidity and preservation of capital.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

     Certain statements contained Management’s Discussion and Analysis of Financial Condition and Results of Operations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements are based on our current intent, belief and expectations. These statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict. Actual results may differ materially from these forward-looking statements because of our unproven business model, our dependence on new technologies, the uncertainty and timing of clinical trials, our ability to develop and commercialize products, our dependence on collaborators for services and revenue, our substantial indebtedness and lease obligations, our changing requirements and costs associated with planned facilities, intense competition, the uncertainty of patent and intellectual property protection, our dependence on key management and key suppliers, the uncertainty of regulation of products, the impact of future alliances or transactions and other risks described in this filing and our other filings with the Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today’s date. We undertake no obligation to update or revise the information contained in this announcement whether as a result of new information, future events or circumstances or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     We do not have operations of a material nature that are subject to risks of foreign currency fluctuations, nor do we use derivative financial instruments in our operations or investment portfolio. Our investment portfolio may be comprised of low-risk U.S. Treasuries, government agency obligations, high-grade debt

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Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued)

having at least an “A” rating and various money market instruments. The short-term nature of these securities, which currently have an average term of approximately 18 months, significantly decreases the risk of a material loss caused by a market change. We believe that a hypothetical 100 basis point adverse move (increase) in interest rates along the entire interest rate yield curve would adversely affect the fair value of our cash, cash equivalents and short-term and restricted investments by approximately $20.6 million, or approximately 1.5% of the aggregate fair value of $1.38 billion, at June 30, 2003. For these reasons, and because these securities are generally held to maturity, we believe we do not have significant exposure to market risks associated with changes in interest rates related to our debt securities held as of June 30, 2003. We believe that any market change related to our investment securities held as of June 30, 2003 is not material to our consolidated financial statements. However, given the short-term nature of these securities, a general decline in interest rates would adversely affect the interest income from our portfolio as securities mature and are replaced with securities having a lower interest rate.

     As of June 30, 2003, the carrying values of our equity investments in Transgene, Cambridge Antibody Technology (“CAT”), Corautus and Ciphergen were approximately $4.6 million, $12.0 million, $4.7 million and $2.2 million, respectively. Our investments in Transgene, Corautus and Ciphergen are subject to equity market risk. Our investment in CAT is denominated in pounds sterling and is subject to both foreign currency risk as well as equity market risk.

     The facility leases we entered into during 2003 and 2001 require us to maintain minimum levels of restricted investments as collateral for these facilities. By 2005, our maximum restricted investments for these leases could be approximately $280.0 million. Together with the requirement to maintain up to approximately $15.0 million in restricted investments with respect to our process development and manufacturing facility leases, our overall level of restricted investments could reach $295.0 million. Although the market value for these investments may rise or fall as a result of changes in interest rates, we will be required to maintain this level of restricted investments in both a rising or declining interest rate environment.

     The rent under the Traville lease is based on a floating interest rate. We can direct the lessor to lock in a fixed interest rate. As of June 30, 2003, such a fixed rate for seven years would be approximately 3.3% compared to the floating rate as of June 30, 2003 of approximately 1.3%. If interest rates increase, our rent obligations would also increase, which would adversely affect our operating expenses.

     During 2002, we established a wholly-owned subsidiary, Human Genome Sciences Europe GmbH (“HGS Europe”), that will manage our clinical trials and clinical research collaborations in European countries. Although HGS Europe’s activities are denominated primarily in euros, we believe the foreign currency fluctuation risks for 2003 to be immaterial to our operations as a whole.

Item 4. Controls and Procedures

     Our management, including our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2003. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in this Form 10-Q quarterly report has been appropriately recorded, processed, summarized and reported. Based on that evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

     Our management, including our principal executive and principal financial officers, has evaluated any changes in our internal control over financial reporting that occurred during the quarterly period ended June 30, 2003, and has concluded that there was no change that occurred during the quarterly period ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

     At our Annual Meeting of Shareholders, held on May 21, 2003, the following members were re-elected to the Board of Directors:

		Affirmative		Votes
		Votes		Withheld
	Terms expiring in 2006
William A. Haseltine, Ph.D.			106,172,629		772,265
Laura D’Andrea Tyson, Ph.D.			81,148,373		25,796,521
Robert D. Hormats			101,630,403		5,314,491
Alan G. Spoon			105,859,793		1,085,101

     The following proposal was approved at our Annual Meeting of Shareholders:

	Affirmative		Negative
	Votes		Votes		Abstentions
Ratification of the selection of Ernst & Young, LLP as independent auditors for the fiscal year ending December 31, 2003		105,062,023		1,821,455		61,415

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

10.1 Omnibus Agreement between Maryland Economic Development Corporation, Wells Fargo Bank Northwest, National Association, Human Genome Sciences, Inc., Allfirst Bank, a division of M&T Bank and the other parties named therein dated June 26, 2003.

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Item 6. Exhibits and Reports on Form 8-K (continued)

10.2	Amended and Restated Participation Agreement and Appendix A to the Amended and Restated Participation Agreement between Human Genome Sciences, Inc., Wachovia Development Corporation and the other parties named therein dated June 30, 2003.
10.3	Amended and Restated Lease Agreement between Wachovia Development Corporation and Human Genome Sciences, Inc. dated June 30, 2003.
10.4	Amended and Restated Agency Agreement between Human Genome Sciences, Inc. and Wachovia Development Corporation dated June 30, 2003.
10.5	Amended and Restated Security Agreement between Wachovia Development Corporation and Wachovia Bank, National Association and accepted and agreed to by Human Genome Sciences, Inc. dated June 30, 2003.
10.6	Amended and Restated Assignment of Liquid Collateral Agreement between Human Genome Sciences, Inc. and Wachovia Bank, National Association dated June 30, 2003.
10.7	Amended and Restated Human Genome Sciences, Inc. Employee Stock Purchase Plan dated May 21, 2003.

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Item 6. Exhibits and Reports on Form 8-K (continued)

31.1	Rule 13a-14(a) Certification of Principal Executive Officer.
31.2	Rule 13a-14(a) Certification of Principal Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.

(b)	Reports on Form 8-K
	We filed a Current Report on Form 8-K, on April 24, 2003, furnishing our financial results for the three months ended March 31, 2003.
	We filed a Current Report on Form 8-K, on July 29, 2003, furnishing our financial results for the three and six months ended June 30, 2003.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HUMAN GENOME SCIENCES, INC.
	BY:	/s/ William A. Haseltine, Ph.D.
		William A. Haseltine, Ph.D.         Chairman and Chief Executive Officer
	BY:	/s/ Steven C. Mayer
		Steven C. Mayer        Senior Vice President and        Chief Financial Officer
Dated: August 11, 2003

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EXHIBIT INDEX

                 Exhibit Page Number

10.1	Omnibus Agreement between Maryland Economic Development Corporation, Wells Fargo Bank Northwest, National Association, Human Genome Sciences, Inc., Allfirst Bank, a division of M&T Bank and the other parties named therein dated June 26, 2003.
10.2	Amended and Restated Participation Agreement and Appendix A to the Amended and Restated Participation Agreement between Human Genome Sciences, Inc., Wachovia Development Corporation and the other parties named therein dated June 30, 2003.
10.3	Amended and Restated Lease Agreement between Wachovia Development Corporation and Human Genome Sciences, Inc. dated June 30, 2003.
10.4	Amended and Restated Agency Agreement between Human Genome Sciences, Inc. and Wachovia Development Corporation dated June 30, 2003.
10.5	Amended and Restated Security Agreement between Wachovia Development Corporation and Wachovia Bank, National Association and accepted and agreed to by Human Genome Sciences, Inc. dated June 30, 2003.
10.6	Amended and Restated Assignment of Liquid Collateral Agreement between Human Genome Sciences, Inc. and Wachovia Bank, National Association dated June 30, 2003.
10.7	Amended and Restated Human Genome Sciences, Inc. Employee Stock Purchase Plan dated May 21, 2003.
31.1	Rule 13a-14(a) Certification of Principal Executive Officer.
31.2	Rule 13a-14(a) Certification of Principal Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.

EX-10.1 3 w88716exv10w1.htm OMNIBUS AGREEMENT

Exhibit 10.1

OMNIBUS AGREEMENT

     THIS OMNIBUS AGREEMENT (this “Agreement”) dated as of June 26, 2003 (the “Effective Date”), is made among MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and corporate and public instrumentality of the State of Maryland (the “Issuer”); WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Owner Trustee under that certain Trust Agreement dated as of October 25, 2001 (the “Owner Trustee”); VAL T. ORTON, not in his individual capacity, but solely as Maryland Trustee appointed pursuant to that certain Trust Agreement dated as of October 25, 2001 (the “Maryland Trustee”); HUMAN GENOME SCIENCES, INC., a Delaware corporation, acting in its capacity as Lessee (the “Lessee”); HUMAN GENOME SCIENCES, INC., a Delaware corporation, acting in its capacity as Guarantor (the “Guarantor”); HUMAN GENOME SCIENCES, INC., a Delaware corporation, acting in its capacity as Pledgor (the “Pledgor”); ALLFIRST BANK, a Maryland banking corporation, and a division of M&T BANK, acting in its capacity as Agent for the benefit of the Participants (the “Agent”); ALLFIRST BANK, a Maryland banking corporation, and a division of M&T BANK, acting in its capacity as Certificate Holder (the “Certificate Holder”); ALLFIRST BANK, a Maryland banking corporation, and a division of M&T BANK, as Credit Facility Provider (the, “Credit Facility Provider”); M&T BANK, a division of MANUFACTURERS AND TRADERS TRUST COMPANY (successor in interest to ALLFIRST TRUST COMPANY NATIONAL ASSOCIATION), acting in its capacity as Bond Trustee (the “Bond Trustee”); M&T BANK, a division of MANUFACTURERS AND TRADERS TRUST COMPANY (successor in interest to ALLFIRST TRUST COMPANY NATIONAL ASSOCIATION), acting in its capacity as Collateral Agent (the “Collateral Agent”); and JOSEPH C. LEMENSE and GARTH C. HARDING, acting in their capacity as Individual Trustees (the “Individual Trustees”). This Agreement is accepted and approved by ALLFIRST BANK, a Maryland banking corporation, and a division of M&T BANK, acting in its capacity as Remarketing Agent (the “Remarketing Agent”) under that certain Placement and Remarketing Agreement by and between the Issuer and the Remarketing Agent dated as of October 25, 2001.

RECITALS

     A.     The Issuer and the Maryland Trustee are parties to that certain Lease dated as of October 25, 2001 (as amended or supplemented from time to time, the “Head Lease”), pursuant to which the Issuer leased the property more particularly described in the Head Lease (the “Property”) to the Maryland Trustee, and the Maryland Trustee leased the Property from the Issuer, as further evidenced by the execution and recordation of that certain Memorandum of Lease in the Land Records of Montgomery County, Maryland in Liber 19884 at Folio 674 (the “Memorandum of Head Lease”).

     B.     The Owner Trustee and the Lessee are parties to that certain Lease Agreement dated as of October 25, 2001 (as amended or supplemented from time to time, the “Facility Lease”), pursuant to which the Owner Trustee, acting through the Maryland Trustee, subleased the Property to the Lessee, and the Lessee subleased the Property from the Owner Trustee, acting through the Maryland Trustee, as evidenced by the execution and recordation of that certain Montgomery County, Maryland Lease Supplement, Short Form/Memorandum of Lease and

Remedies in the Land Records of Montgomery County, Maryland in Liber 19884 at Folio 681 (the “Lease Supplement”).

     C.     The Owner Trustee and the Certificate Holder are parties to that certain Trust Agreement dated as of October 25, 2001 (as amended or supplemented from time to time, the “Trust Agreement”), pursuant to which the Owner Trustee and the Certificate Holder established the HGSI Trust 2001-B (the “Trust”) for the purposes of (i) providing refinancing for a portion of the costs incurred by the Issuer in connection with the acquisition of the Property, (ii) providing financing for a portion of the costs attributable to the construction of the Additional Improvements (as defined in the Facility Lease), (iii) acquiring a leasehold interest in the Property from the Issuer and (iv) holding title to the Owner Trust Estate (as defined in the Trust Agreement), and, simultaneously therewith, pursuant to that certain Maryland Trustee Appointment dated as of October 25, 2001 (the “Maryland Trustee Appointment”), the Owner Trustee appointed the Maryland Trustee to serve as trustee for that portion of the Owner Trust Estate located from time to time in the State of Maryland.

     D.     Pursuant to the Trust Agreement, and in furtherance of the purposes set forth therein, the Owner Trustee issued that certain Certificate dated as of October 25, 2001, in the principal amount of $3,000,000 (the “Certificate”) to the Certificate Holder, and, using the proceeds from the Certificate, the Owner Trustee made a loan to the Issuer in the principal amount of $3,000,000, as evidenced by that certain Promissory Note and Security Agreement dated as of October 25, 2001, made by the Issuer in favor of the Owner Trustee (the “MEDCO Note”).

     E.     The Issuer and the Bond Trustee are parties to that certain Trust Indenture dated as of October 25, 2001 (as amended or supplemented from time to time, the “Trust Indenture”), pursuant to which the Issuer, in accordance with Article 83A, Title 5, Subtitle 2 of the Annotated Code of Maryland (as amended or supplemented from time to time, the “Act”), issued and sold its Taxable Variable Rate Demand Revenue Bonds (Human Genome Sciences, Inc. Facility), Series 2001A, in the aggregate principal amount of $73,000,000 (the “Bonds”) for the sole and exclusive purposes of (i) refinancing the remaining portion of the costs incurred by the Issuer in connection with the acquisition of the Property and (ii) financing the remaining portion of the costs attributable to the construction of the Additional Improvements.

     F.     In order to enhance the marketability of the Bonds, the Credit Facility Provider, at the request of the Issuer, issued to the Bond Trustee that certain Letter of Credit dated as of October 25, 2001, in the initial stated amount of $74,080,000 (as amended or supplemented from time to time, the “Letter of Credit”), and, in connection with the issuance of the Letter of Credit, the Issuer and the Credit Facility Provider entered into that certain Letter of Credit Agreement dated as of October 25, 2001 (as amended or supplemented from time to time, the “Letter of Credit Agreement”), pursuant to which the Issuer agreed to reimburse the Credit Facility Provider for all amounts drawn under the Letter of Credit, together with interest thereon at the Reimbursement Rate (as defined in the Letter of Credit Agreement) and, under certain circumstances, at the Penalty Rate (as defined in the Letter of Credit Agreement).

     G.     In order to induce the Certificate Holder to purchase the Certificate, the Credit Facility Provider to issue the Letter of Credit and the Hedge Counterparty (as defined in the

2

Facility Lease) to enter into a Hedge Agreement (as defined in the Facility Lease) with the Issuer:

(i) The Guarantor entered into that certain Guarantee dated as of October 25, 2001 (as amended or supplemented from time to time, the “Guarantee”), pursuant to which the Guarantor irrevocably and unconditionally guaranteed to the Agent, for the benefit of the Certificate Holder, the Credit Facility Provider and the Hedge Counterparty, the full and prompt payment when due, whether by acceleration or otherwise, and at all times thereafter, and the full and prompt performance of, certain Liabilities (as defined in the Guarantee);

(ii) The Pledgor, the Agent and the Collateral Agent entered into that certain Cash Collateral Pledge Agreement dated as of October 25, 2001 (as amended or supplemented from time to time, the “Pledge Agreement”), pursuant to which the Pledgor deposited cash and marketable securities in an account maintained by the Pledgor with the Collateral Agent and the Pledgor granted to the Agent a security interest in the Collateral (as defined in the Pledge Agreement) pursuant to the provisions of the Maryland Uniform Commercial Code in order to secure the Pledgor’s obligations under the Facility Lease and the other Operative Documents (as defined in the Facility Lease); and

(iii) The Issuer, the Owner Trustee, the Maryland Trustee and the Lessee (collectively, the “Grantors”) entered into that certain Deed of Trust, Assignment of Leases, Security Agreement and Fixture Filing dated as of October 25, 2001 and recorded in the Land Records of Montgomery County, Maryland in Liber 19884 at Folio 695 (as amended or supplemented from time to time, the “Deed of Trust”), pursuant to which the Grantors granted a deed of trust lien and security interest in certain Security Property to Joseph C. LeMense and J. Scott Ensor, as Trustees for the benefit of the Agent, to secure the Secured Obligations (as defined in the Deed of Trust), all as more particularly set forth in the Deed of Trust.

     H.     Pursuant to a Deed of Appointment of Substitute Trustee, the Agent has appointed Garth C. Harding to serve as a substitute trustee under the Deed of Trust for J. Scott Ensor.

     I.     Subject to the terms and conditions hereinafter set forth in this Agreement, the parties hereto have agreed that, as of the Effective Date, (i) the Head Lease and the Memorandum of Head Lease, respectively, shall be terminated, (ii) the Owner Trustee and the Maryland Trustee, respectively, shall assign all of their right, title and interest in and to the Facility Lease and the Lease Supplement, respectively, to the Issuer, (iii) the Owner Trustee shall assign the MEDCO Note to the Certificate Holder in full satisfaction of the obligations of the Trust under the Certificate, (iv) the Trust shall be terminated and released from all of its obligations under the Operative Documents, and (v) the Operative Documents shall be amended to reflect the foregoing.

3

AGREEMENT

     NOW, THEREFORE, for the specific consideration hereinafter set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1.     Capitalized Terms. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned thereto in the Deed of Trust.

     2.     Assignment of Facility Lease and Lease Supplement. For and in consideration of the termination of the Head Lease and the Memorandum of Head Lease and the release by the Issuer of the Lessor Parties (as hereinafter defined) from any and all liability thereunder from and after the Effective Date as set forth in Paragraph 3 below, the Owner Trustee and the Maryland Trustee, respectively, hereby transfer, grant, assign and convey, all of their respective rights, title and interests under the Facility Lease and the Lease Supplement, including, without limitation, the leasehold interest in the Property created thereby, to the Issuer, and the Issuer hereby accepts the assignment of the Facility Lease and the Lease Supplement and assumes any and all liability thereunder arising from and after the Effective Date, subject, however, to the provisions of Section 22 hereof.

     3.     Termination of Head Lease and Memorandum of Head Lease. For and in consideration of the assignment of the Facility Lease and Lease Supplement set forth in Paragraph 2 above, as of the Effective Date, the Head Lease and the Memorandum of Head Lease are hereby terminated and the Maryland Trustee, the Owner Trustee and the Trust and their respective successors and assigns (collectively, the “Lessor Parties”), are forever released and discharged from any and all liability arising thereunder from and after the Effective Date. As to the period prior to the Effective Date, the parties hereto acknowledge and agree that, to the best of their knowledge, there are no outstanding liabilities of the Lessor Parties under the Head Lease and the Memorandum of Head Lease.

     4.     No Merger. There shall be no merger of the Facility Lease or of the leasehold estate created thereby or of the Lessor’s interest thereunder created by reason of the fact that the same Person may acquire, own or hold, directly or indirectly, in whole or in part, (a) any interest in the Facility Lease or the leasehold estate created thereby or (b) title to or any other interest in the Property or any part thereof.

     5.     Attornment by Lessee to Issuer. The Lessee hereby acknowledges the transfer and assignment by the Owner Trustee and the Maryland Trustee, respectively, of all of their respective rights, title and interests under the Facility Lease and the Lease Supplement to the Issuer, and, in connection therewith, from and after the Effective Date, the Lessee hereby covenants and agrees to attorn to and recognize the Issuer as the Lessor under the Facility Lease and the Lease Supplement for the remainder of the Term (as defined in the Facility Lease), and the parties hereto acknowledge and agree that the Facility Lease and the Lease Supplement shall not terminate but shall continue in full force and effect as a direct lease between the Issuer and the Lessee.

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     6.     Status of Facility Lease and Lease Supplement. The Lessee and the Guarantor each represent and warrant to the other parties hereto, to the best of their respective knowledge, as follows: (i) the Facility Lease, the Lease Supplement and the other Operative Documents are in full force and effect; (ii) none of the parties to the Facility Lease, the Lease Supplement and the other Operative Documents are currently in default under any of the terms thereof, and no event has occurred which would, with the giving of notice or the lapse of time, or both, constitute a default under the Facility Lease and the Lease Supplement or any of the other Operative Documents; and (iii) the Lessee is the current tenant in possession under the Facility Lease and the Lease Supplement and there are no third parties entitled to possession of all or any portion of the Property pursuant to any subleases. The Owner Trustee and the Maryland Trustee each represent and warrant to the other parties hereto that, except for the prior assignment to the Agent pursuant to the Deed of Trust, neither the Owner Trustee nor the Maryland Trustee have previously assigned their respective rights, title and interests under the Facility Lease and the Lease Supplement to any third party.

     7.     Assignment of MEDCO Note to Certificate Holder and Cancellation of Certificates Replacement MEDCO Note. In full satisfaction of all of the obligations of the Trust to the Certificate Holder, as evidenced by the Certificate, the Owner Trustee hereby irrevocably assigns and transfers the MEDCO Note to the Certificate Holder, and the Certificate Holder hereby accepts the MEDCO Note and releases the Trust from any and all further liability under the Certificate. In furtherance of the foregoing, on the Effective Date, the Owner Trustee shall endorse the MEDCO Note to evidence the assignment and transfer thereof to the Certificate Holder and shall deliver the original MEDCO Note to the Certificate Holder, and, simultaneously therewith, the Certificate Holder shall surrender the Certificate to the Owner Trustee for cancellation. Simultaneously with the endorsement of the MEDCO Note by the Owner Trustee and the delivery of the original MEDCO Note by the Owner Trustee to the Certificate Holder, the original MEDCO Note shall be marked cancelled by the Certificate Holder, and the Issuer shall execute an Amended and Restated Promissory Note in favor of the Certificate Holder (the “Amended and Restated MEDCO Note”).

     8.     Termination of Trust. As of the Effective Date, (i) the Trust Agreement and the Maryland Trustee Appointment are hereby terminated, (ii) the Trust is hereby dissolved and (iii) the Owner Trust Estate, if applicable, is hereby distributed to the Certificate Holder. In connection with the foregoing, as of the Effective Date, all parties hereto release the Owner Trustee, the Maryland Trustee and Trust from all liabilities under and with respect to the Trust Agreement, the Maryland Trustee Appointment, the Certificate and the Operative Documents.

     9.     Modifications to Operative Documents. As of the Effective Date, the Operative Documents are hereby amended as follows:

     (a)  All references in the Operative Documents to the Head Lease, the Trust Agreement, the Certificates, the Certificate Holder, the Trust, the Owner Trustee and the Maryland Trustee are hereby deleted.

     (b)  All references in the Operative Documents to the MEDCO Note shall be deemed to refer to the Amended and Restated MEDCO Note.

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     (c)  The Facility Lease is hereby amended as follows:

          (A) Notwithstanding anything contained in the Facility Lease or any of the other Operative Documents to the contrary, as of the Effective Date, the Facility Lease shall be a direct lease of the Property by Lessor to Lessee and not a sublease.

          (B) Paragraph 1 is hereby amended and restated in its entirety as follows:

     “1. Demise of Property. In consideration of the rents and covenants herein stipulated to be paid and performed, Lessor hereby demises and leases to Lessee, and Lessee hereby demises and lets from Lessor, the Property.”

          (C) The definition of Break Costs in Paragraph 2 is hereby amended and restated in its entirety as follows:

     “Break Costs means an amount equal to the amount, if any, required to compensate any holder of the MEDCO Note or any Credit Facility Provider for any additional losses (including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or funds acquired by any holder of the MEDCO Note or any Credit Facility Provider to fund its obligations under the Operative Documents) it may incur as a result of (a) Lessee’s payment of Basic Rent other than on a Payment Date or (b) as a result of any conversion of the LIBO Rate other than on the last day of an Interest Period pursuant to and in accordance with the Operative Documents. A statement as the amount thereof, prepared in good faith and in reasonable detail and submitted by any holder of the MEDCO Note or any Credit Facility Provider, as the case may be, to Lessee, shall be presumed correct absent demonstrable error.”

          (D) All references to the Head Lessor’s Fee and Holder Yield are hereby deleted.

          (E) The definition of Lease Balance in Paragraph 2 is hereby amended and restated in its entirety as follows:

     “Lease Balance means, with respect to the Property, as of any date of determination, an amount equal to the aggregate sum of (i) the outstanding principal amount of the Bonds, including all accrued and unpaid interest thereon, (ii) the outstanding principal amount of the MEDCO Note, including all accrued and unpaid interest thereon, (iii) amounts due to the Hedge Counterparty under the Hedge Documents and the Collateral Pledge Agreement, and (iv) any other amounts due and owing under the Operative Documents, including, without limitation, all amounts owed to the Credit Facility Providers under the Credit Facility Documents (provided, however, that if the Lessee exercises its option to purchase the Property on the Expiration Date, all amounts owed under the Credit Facility Documents through and including the expiration of the Credit Facility Documents shall also be included within this calculation).”

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          (F) The definition of Lessee’s Equipment in Paragraph 2 is hereby amended and restated in its entirety as follows:

     “Lessee’s Equipment means Lessee’s machinery, apparatus, furnishings and other equipment that is (i) not paid for or financed, directly or indirectly, with the proceeds of the Bonds or the MEDCO Note, (ii) not included in any requisition or in any disbursement from the Facility Fund or any advance or extension of credit under the MEDCO Note, (iii) not a fixture or otherwise affixed to any part of the Property, and (iv) not in replacement for any property described in clauses (i) through (iii) above or for any of the other Building Equipment.”

          (G) The following definition is hereby added to Paragraph 2 before the definition of the MEDCO Note:

     “MEDCO Fee means an annual fee payable by the Lessee to the Issuer in the amount of $30,000.00.”

          (H) The definition of Participants in Paragraph 2 is hereby amended and restated in its entirety as follows:

     “Participants means the Credit Facility Providers, the holder of the MEDCO Note and the Hedge Counterparty.”

          (I) All references to Subsequent Holder Advances are hereby deleted.

          (J) The following definition is hereby added to Paragraph 2 before the definition of Subsidiary or Subsidiaries:

     “Subsequent MEDCO Loan Advances has the meaning given to such term in the MEDCO Note.

          (K) Subparagraph (b) of Paragraph 6 is hereby amended and restated in its entirety as follows:

     “(b) Lessor and Lessee acknowledge and agree that Basic Rent has been determined based upon a number of factors, which include the amount of interest payable of the aggregate sum of the outstanding principal amount of the Bonds from time to time, the interest payable of the aggregate sum of the outstanding principal amount of the MEDCO Note from time to time and any other amounts and costs payable pursuant to the Operative Documents. Accordingly, Basic Rent shall be adjusted from time to time by Lessor and Lessee to reflect (i) any increase in the aggregate sum of the outstanding principal amount of the Bonds and/or the MEDCO Note, (ii) any redemption of the Bonds

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prior to the maturity date, (iii) any increase or decrease in Basic Rent as a result of the existence of the Hedge Documents, (iv) the expiration of any Hedge or any default by any Hedge Counterparty in the performance of its obligations under any Hedge Documents, and (v) any additional amounts and costs that become due and owing pursuant to the other Operative Documents.”

          (L) The first paragraph of subparagraph (c) of Paragraph 6 is hereby amended and restated in its entirety as follows:

     “(c) Lessee covenants and agrees to pay and discharge, as additional rent (the “Additional Rent”), all amounts, liabilities and obligations (other than Basic Rent) which Lessee assumes or agrees or is otherwise obligated to pay under this Lease or any other Operative Document (whether or not designated as Additional Rent) to Agent or any other Person, including, without limitation, the MEDCO Fee, any costs otherwise payable by Issuer under the Hedge Documents, Break Costs, the Residual Guaranty Amount and any Lease Balance. The MEDCO Fee shall be payable commencing on June 1, 2002 and on each June 1 thereafter throughout the remainder of the Term. Each payment of Additional Rent received by the Agent shall be disbursed by the Agent in accordance with Article IX of the Deed of Trust.”

          (M) Paragraph 19(a)(ii) is hereby deleted.

          (N) Subparagraph (a) of Paragraph 29 is hereby amended and restated in its entirety as follows:

     “(a) This Lease is subject and subordinate to the lien, provisions, operation and effect of the Deed of Trust and other Encumbrances now or hereafter encumbering the Property or any interest therein, to all funds and indebtedness intended to be secured thereby, and to all renewals, extensions, modifications, recastings or refinancings thereof. The holder of any Encumbrance to which this Lease is subordinate shall have the right (subject to any required approval of the holders of any superior Encumbrance) at any time to declare this Lease to be superior to the lien, provisions, operation and effect of such Encumbrance, and Lessee shall execute, acknowledge and deliver all documents required by such holder in confirmation thereof.”

          (O) Subparagraph (i) of Paragraph 36 is hereby amended and restated in its entirety as follows:.

     “(i) Acceleration of MEDCO Note and Payments under the Letter of Credit Agreement and Other Operative Documents. In case of any sale of the Property, or of any part thereof, pursuant to any judgment or decree of any court or otherwise in connection with the enforcement of any of the terms of this Lease, the principal amount of the MEDCO Note and all outstanding amounts due and owing under the Letter of Credit Agreement and the other Operative Documents, if not previously due, and the interest accrued thereon, if any, shall at once

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become and be immediately due and payable. If at any foreclosure proceeding the Property shall be sold for a sum less than the total amount of indebtedness for which judgment is therein given, the judgment creditor shall be entitled to the entry of a deficiency decree against Lessee and against the property of Lessee for the amount of such deficiency; provided, however, during the Construction Period, the foregoing right of the judgment creditor to a deficiency decree against Lessee and the property of Lessee shall be subject to the limitations set forth in subparagraph (f) of Paragraph 17 hereof.”

               (P) The following Paragraph 39 is hereby added

     “39. Limited Liability of Lessor. Anything contained herein to the contrary notwithstanding, any claim based on or in respect of any liability of Lessor under this Lease shall be enforced only against Lessor’s interest in the Property (subject to the lien of the Deed of Trust), and not against any other assets, properties or funds of Lessor or against any assets, properties or funds of (i) any employee or agent of Lessor (or any director, officer, legal representative, successor, or assign of any thereof), or (ii) any other Person affiliated with any of the foregoing, including, without limitation, the State of Maryland or any department, agency of instrumentality thereof.

     Notwithstanding any other provision to the contrary set forth in this Lease or in any other agreement or document executed in connection with or relating to this Lease:

     (a) No provision of this Lease or of any other agreement or document executed in connection with or relating to this Lease shall be construed so as to give rise to any monetary or pecuniary liability of Lessor or of the State of Maryland, or any political subdivision or agency thereof, or to give rise to a charge upon the general credit of Lessor or of the State of Maryland, or any political subdivision or agency thereof, and any claim based on or in respect of any liability of Lessor under this Lease shall be enforced only as set forth in this Paragraph 39.

     (b) Neither this Lease nor any other agreement or document executed in connection with or relating to this Lease nor any claim hereunder or thereunder shall (i) constitute a debt of Lessor or of the State of Maryland, or any political subdivision or agency thereof, or a pledge of the full faith and credit or taxing power of the State of Maryland, or any political subdivision or agency thereof, or (ii) create any monetary liability on, or obligate Lessor or the State of Maryland, or any political subdivision or agency thereof, to make any appropriation for payment. Lessor has no taxing authority.

     (c) The liability of Lessor under this Lease and under any other agreement or document executed in connection with or relating to this Lease shall be non-recourse to Lessor, limited as set forth above in this Paragraph 39; and the lien of any judgment shall be restricted to only Lessor’s interest in the Property

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(subject to the lien of the Deed of Trust), and not against any other assets, properties or funds of Lessor or against any assets, properties or funds of (i) any employee or agent of Lessor (or any director, officer, legal representative, successor, or assign of any thereof), or (ii) any other Person affiliated with any of the foregoing, including, without limitation, the State of Maryland or any department, agency or instrumentality thereof; and Lessor shall have no other liability, legal, moral or otherwise, to Lessee, or any other Person, in connection with the Property, this Lease, or any other agreement or document executed in connection with or relating to this Lease. In no event shall Lessor be required to pay any claim under this Lease or under any other agreement or document executed in connection with or related to this Lease from any of its own funds.”

               (P) Exhibit C is hereby amended and restated in its entirety as follows:

“BASIC RENT

               Subject to adjustment as provided in Paragraph 6(b) of this Lease, Basic Rent, on each Payment Date, shall be an amount equal to the sum of (i) the amount of interest payable on the aggregate sum of the outstanding principal amount of the Bonds as of such Payment Date, (ii) the amount of interest payable on the aggregate sum of the outstanding principal amount of the MEDCO Note as of such Payment Date, and (iii) any other amounts and costs payable or reimbursable pursuant to the Operative Documents as of such Payment Date; provided, however, during the Construction Period, (a) the interest payable on that portion of the aggregate sum of the outstanding principal amount of the Bonds used to establish the Facility Fund shall be treated as Facility Costs and paid by Lessee from the Facility Fund and (b) the interest payable on that portion of the aggregate sum of the outstanding principal amount of the MEDCO Note used to fund Subsequent MEDCO Note Advances shall be capitalized and added to the outstanding principal amount of the MEDCO Note in accordance with the terms thereof.”

(d)          The Deed of Trust is hereby amended as follows:

               (A) The Owner Trustee and the Maryland Trustee are hereby deleted as Grantors under the Deed of Trust, and the Owner Trustee, the Maryland Trustee and the Trust established pursuant to the Trust Agreement are forever released and discharged from any and all liability arising thereunder.

               (B) The fourth paragraph of the Recitals is hereby deleted.

               (C) The fifth, sixth, seventh, eighth and ninth paragraphs of the Recitals are hereby amended and restated in its entirety as follows:

              “The Bank has made a loan to the Issuer in the aggregate principal amount of up to $3,000,000.00 (the “MEDCO Loan”), as evidenced by that certain

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Promissory Note and Security Agreement of even date herewith made by the Issuer in favor of the Bank (the “MEDCO Note”), the proceeds of which will be used by the Issuer, together with the proceeds of the Bonds, to refinance the costs incurred by the Issuer in connection with the acquisition of the Property and to finance the costs attributable to the construction of the Additional Improvements.

               The Issuer and the Lessee have entered into that certain Lease Agreement dated of even date herewith (the “Lease”), as evidenced by that certain Montgomery County, Maryland Lease Supplement, Short Form/Memorandum of Lease and Remedies dated of even date herewith (the “Lease Supplement”, and together with the Lease, the “Facility Lease”), pursuant to which the Issuer leased to the Lessee and the Lessee leased from the Issuer the Property, all as contemplated by the Lease.

               As a condition to the issuance of the Letter of Credit, the making of the MEDCO Loan and the consummation of the transactions contemplated by the Hedge Documents (as defined in Section 1.1 of this Deed of Trust), if applicable, the Beneficiary, on behalf of the Bank and the Hedge Counterparty (as defined in Section 1.1 of this Deed of Trust), if applicable, required (among other things) the execution and delivery of this Deed of Trust by the Grantors.

               As used in this Deed of Trust, the term “Beneficiary”, whether referred to as singular or plural, means the Agent, acting in its capacity as Agent pursuant to the provisions of Article III hereof for the benefit of (a) the Bank, as the issuer of the Letter of Credit, and its respective successors and assigns, (b) any other Credit Facility Providers (as defined in Section 1.1 of this Deed of Trust), (c) the Bank, as holder of the MEDCO Note, and its successors and assigns, and (d) the Hedge Counterparty (collectively, the “Participants”).

               Each of the Grantors intends, by the execution and delivery of this Deed of Trust, and in accordance with the Act, to secure the full and punctual payment and performance by (i) the Issuer of the Issuer’s obligations under the Bond Documents, the Letter of Credit Documents, the MEDCO Note, the Hedge Documents, if applicable, and the other Operative Documents, and (ii) the Lessee of the Lessee’s obligations under the Facility Lease, the Guarantee (as defined in Section 1.1 of this Deed of Trust), the Collateral Pledge Agreement (as defined in Section 1.1 of this Deed of Trust) and the other Operative Documents (collectively, the “Secured Obligations”).”

               (D) The definition of Certificate Holder Advance in Section 1.1 is hereby deleted.

               (E) The definition of Grantors is hereby amended and restated in its entirety as follows:

                “Grantors means, collectively, the Issuer and the Lessee.”

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               (F) The definitions of Head Lease Additional Rent, Head Lease Basic Rent and Holder Yield in Section 1.1 are hereby deleted.

               (G) The definition of Lease Balance in Section 1.1 is hereby amended and restated in its entirety as follows:

               “Lease Balance means, as of any date of determination, an amount equal to the aggregate sum of the outstanding principal amount of the Bonds, including all accrued and unpaid interest thereon, the outstanding principal amount of the MEDCO Note, including all accrued and unpaid interest thereon, and any other amounts due and owing under the Operative Documents, including, without limitation, all amounts owed to the Credit Facility Providers under the Credit Facility Agreements.”

               (H) The definition of Lessor in Section 1.1 is hereby amended and restated in its entirety as follows:

               “Lessor means the Issuer.”

               (I) The definitions of MEDCO Loan Advance and Owner Trust Estate in Section 1.1 are hereby deleted.

               (J) The definition of Subsequent Holder Advance in Section 1.1 is hereby deleted.

               (K) The following definition is hereby added to Section 1.1 after the definition of Security Property:

               “Subsequent_MEDCO Loan Advance has the meaning given to that term in Section 8.3 of this Deed of Trust.”

               (L) Subparagraphs (b) and (c) of Section 4.1 are hereby deleted.

               (M) Subparagraphs (a) and (b) of Section 4.5 are hereby amended and restated in its entirety as follows:

               “(a) Event of Loss. Any event (i) which would otherwise constitute a Casualty, and (ii) which, in the good faith judgment of the Lessee, renders repair and restoration of the Property impossible or impractical, or requires repairs to the Property that would cost in excess of fifty percent (50%) of the original cost of the Property, and (iii) as to which the Lessee, within sixty (60) days after the occurrence of such event, delivers to the Beneficiary a written notice signed by an authorized officer of the Lessee (the “Officer’s Certificate”) notifying the Beneficiary of such event and of such judgment, shall constitute an “Event of Loss”. In the case of any other event which constitutes a Casualty, the Lessee

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shall restore the Property pursuant to subparagraph (c) below. If an Event of Loss other than an Event of Taking shall occur, the Lessee shall pay to the Beneficiary on the later of (i) the thirtieth day (30th) and (ii) the next Payment Date following delivery of the Officer’s Certificate pursuant to clause (iii) above an amount equal to the Lease Balance. Upon the Beneficiary’s receipt of the Lease Balance on such date, the Beneficiary shall permit the Lessor’s interest in the Property to be conveyed to the Lessee in accordance with and subject to the provisions of Paragraph 19(e) of the Facility Lease. Upon completion of such purchase and payment of the Lease Balance by the Lessee to the Beneficiary, but not prior thereto, this Deed of Trust and all obligations hereunder shall terminate, except with respect to obligations and liabilities hereunder, actual or contingent, that have arisen or relate to events occurring on or prior to such date of purchase, or which are expressly stated herein to survive termination of this Deed of Trust.

               Upon the consummation of the purchase of the Property pursuant to this subparagraph (a), any proceeds derived from insurance required to be maintained by the Lessee pursuant to this Deed of Trust for the Property remaining after payment of the Lease Balance shall be paid over to, or retained by, the Lessee or as it may direct, and the Beneficiary shall assign to the Lessee, without warranty, all of the Beneficiary’s rights to and interest in such insurance required to be maintained by the Lessee pursuant to this Deed of Trust.

               “(b) Event of Taking. Any event (i) which constitutes a Condemnation of all of, or substantially all of, the Property, or (ii) (A) which would otherwise constitute a Condemnation, (B) which, in the good faith judgment of the Lessee, renders restoration and rebuilding of the Property impossible or impractical, or requires repairs to the Property that would cost in excess of fifty percent (50%) of the original cost of the Property, and (C) as to which the Lessee, within sixty (60) days after the occurrence of such event, delivers to the Beneficiary an Officer’s Certificate notifying the Beneficiary of such event and of such judgment, shall constitute an “Event of Taking”. In the case of any other event which constitutes a Condemnation, the Lessee shall restore and rebuild the Property pursuant to subparagraph (d) below. If an Event of Taking shall occur, the Lessee shall pay to the Beneficiary (1) on the later of (A) the thirtieth (30th) day and (B) the next Payment Date following the occurrence of such Event of Taking, in the case of an Event of Taking described in clause (i) above, or (2) on the later of (A) the thirtieth (30th) day and (B) the next Payment Date following delivery of the Officer’s Certificate pursuant to clause (ii) above, in the case of an Event of Taking described in clause (ii) above, an amount equal to the Lease Balance. Upon the Beneficiary’s receipt of the Lease Balance on such date, the Beneficiary shall permit the Lessor’s interest in the Property to be conveyed to the Lessee in accordance with and subject to the provisions of Paragraph 19(e) of the Facility Lease (provided that such conveyance shall be subject to all rights of the condemning authority). Upon completion of such purchase and payment of the Lease Balance by the Lessee to the Beneficiary, but not prior thereto, this Deed of Trust and all obligations hereunder shall terminate, except with respect to obligations and liabilities hereunder, actual or contingent, that have arisen or

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relate to events occurring on or prior to such date of purchase, or which are expressly stated herein to survive termination of this Deed of Trust.

               Upon the consummation of the purchase of the Property pursuant to this subparagraph (b), all Condemnation Awards received by the Beneficiary, after deducting any reasonable costs incurred by the Beneficiary in collecting such Condemnation Awards, received or payable on account of an Event of Taking with respect to the Property shall be paid to the Lessee, and all rights of the Beneficiary in Condemnation Awards not then received shall be assigned to the Lessee by the Beneficiary.”

               (N) The first paragraph of Section 8.1 is hereby amended and restated in its entirety as follows:

               “Section 8.1 Approval of Disbursements from Indenture for Facility Costs. The Bank, as the issuer of the Letter of Credit and as the holder of the MEDCO Note hereby appoints the Agent to act on its behalf to approve each requisition for disbursements from the Facility Fund and for Subsequent MEDCO Loan Advances pursuant to the MEDCO Note. Approval of each requisition for disbursements from the Facility Fund pursuant to Section 5.6 of the Indenture and for Subsequent MEDCO Loan Advances pursuant to the MEDCO Note by an authorized officer of the Agent shall be subject to the fulfillment to the satisfaction of, or waiver by, the Agent of the following conditions precedent:”

               (O) Item (1) of Section 8.1 is hereby amended and restated in its entirety as follows:

               “(1) Title Endorsements. If required by the Agent, the Agent shall have received with the submittal of the Requisition an endorsement to the title policies issued in favor of the Agent on the Closing Date (i) indicating that since the date of the preceding advance from the Facility Fund and the preceding Subsequent MEDCO Loan Advance there has been no change in the state of title to the Property, and (ii) updating such title policy to the date of the current advance from the Facility Fund and the current Subsequent MEDCO Loan Advance.”

               (P) The first paragraph of Section 8.2 is hereby amended and restated in its entirety as follows:

               “Section 8.2 Additional Requirements for Approval of Final Disbursement from Indenture for Facility Costs. In addition to the conditions precedent set forth in Section 8.1 above, the approval of the final requisition for disbursements from the Facility Fund pursuant to Section 5.6 of the Indenture and the final Subsequent MEDCO Loan Advance pursuant to the MEDCO Note by an authorized officer of the Agent acting on behalf of the Bank, as the issuer of the Letter of Credit and as the holder of the MEDCO Note, shall be subject to the fulfillment to the satisfaction of, or waiver by, the Agent of the following conditions precedent:”

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               (Q) Section 8.3 is hereby amended and restated in its entirety as follows:

               “Section 8.3 Procedures for Funding MEDCO Loan. During the Construction Period, within three (3) Business Days following receipt by Agent of a Requisition, the Bank shall, subject to the terms and conditions of this Article VIII, make additional advances under the MEDCO Note to the Lessee, acting in its capacity as construction agent for the Issuer pursuant to the Facility Lease, in order to pay a portion of the Facility Costs for which the Lessee is then seeking reimbursement for pursuant to the applicable Requisition (each, a “Subsequent MEDCO Loan Advance”). Each Subsequent MEDCO Loan Advance shall be made by the Bank to the Lessee by wire transfer of immediately available federal funds and shall be in an amount equal to three percent (3%) of the total amount of the Facility Costs requested by the Lessee in the applicable Requisition. The proceeds of each funding of a Subsequent MEDCO Loan Advance by the Bank shall be used for the sole purpose of paying Facility Costs which are due and payable on the proposed funding date or reimbursing the Lessee for Facility Costs previously paid by the Lessee prior to the proposed funding date but subsequent to the immediately preceding funding date of a Subsequent MEDCO Loan Advance. The Issuer hereby authorizes and directs that all Subsequent MEDCO Loan Advances be made by the Bank to the Lessee as contemplated in this Section 8.3.”

               (R) Section 8.4 is hereby deleted in its entirety.

               (S) Article IX is hereby amended and restated in its entirety as follows:

“ARTICLE IX

RECEIPT, DISTRIBUTION AND APPLICATION OF RECEIPTS

     Section 9.1 Rent Distribution. Except as otherwise provided in Section 9.3, each payment of Facility Lease Basic Rent under the Facility Lease as well as any payment of interest on overdue installments of Facility Lease Basic Rent under the Facility Lease and any other monies paid over by Lessee, Lessor, or Issuer to Agent for such purpose, shall be distributed as promptly as possible (it being understood that any such payments received by Agent on a timely basis and in accordance with the provisions of the Facility Lease, the MEDCO Note and/or any other Operative Document shall be distributed on the date received in the funds so received) in the following order of priority:

     first, an amount equal to the aggregate amount (as well as any interest on, to the extent permitted by law, overdue interest) then due under the Credit Facility Documents and the Hedge Documents (if any) shall be distributed and paid to the Credit Facility Providers and the Hedge Counterparty;

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     second, the balance, if any, of such payment remaining thereafter shall be distributed and paid to the Bank or any subsequent holder of the MEDCO Note, to the extent the Bank or any such subsequent holder of the MEDCO Note shall be entitled to such amounts under the MEDCO Note or any other Operative Document.

     Section 9.2 Distribution of Mandatory Prepayments and Other Payments.

               (a) Except as otherwise provided in Section 9.3, the amount of any prepayment or payment received pursuant to Paragraphs 17 and 19 of the Facility Lease shall in each case be distributed and paid in the following order of priority:

     first, an amount equal to the aggregate amounts then due under the Credit Facility Documents and the Hedge Documents, together with the other amounts then due and owing to the Credit Facility Providers and the Hedge Counterparty or otherwise required to be paid to the Credit Facility Providers and the Hedge Counterparty as a result of the prepayment made pursuant to Paragraphs 17 and 19 of the Facility Lease shall be distributed and paid to the Credit Facility Providers and the Hedge Counterparty, and in the case where the amount so to be distributed shall be insufficient to pay in full as aforesaid, then, pro rata among such Credit Facility Providers and the Hedge Counterparty, without priority of one such Credit Facility Provider and the Hedge Counterparty over the other, in the proportion that the unpaid principal amount as a result of draws under the respective Letters of Credit due to each Credit Facility Provider and Hedge Counterparty bears to the aggregate unpaid principal amount due to all Credit Facility Providers and the Hedge Counterparty;

     second, the balance, if any, of such payment remaining thereafter shall be distributed and paid as follows: (i) so much of such payment as is necessary to pay in full the aggregate principal amount of the MEDCO Note and all accrued but unpaid interest thereon to the date of distribution and all other amounts payable under or with respect to the MEDCO Note and/or payable to the Bank shall be paid to the Bank or any subsequent holder of the MEDCO Note; and (ii) the balance, if any, shall be paid to the Lessee.

               (b) (i) Except as otherwise provided in Section 9.3, the amount of any prepayment or payment received as a result of the termination of the Facility Lease with respect to the Property due to an Event of Loss (including, without limitation, any insurance proceeds, condemnation awards or payments by any Governmental Authority), shall be distributed and paid in the following order of priority:

     first, so much of such payments or amounts as shall be required to reimburse Agent for any tax, expense or other loss incurred by Agent (to the extent not previously reimbursed and to the extent incurred in connection with its duties as Agent) and any unpaid ongoing fees of Agent shall be distributed to Agent for its own account;

     second, so much of such payments or amounts as shall be required to reimburse the then existing or prior Credit Facility Providers and the Hedge Counterparty for payments made by them to Agent pursuant to Section 3.4 of this Deed of Trust (to the extent not previously reimbursed), and to pay such then existing or prior Credit Facility Providers and the Hedge Counterparty the amounts payable to them pursuant to any

16

expense reimbursement provisions of the Operative Documents shall be distributed to each such Participant, without priority of one over the other, in accordance with the amount of such payment or payments payable to each such Participant;

     third, an amount equal to the aggregate unpaid principal of, and accrued interest owed to the Credit Facility Providers and the Hedge Counterparty pursuant to the Credit Facility Documents and the Hedge Documents shall be paid and distributed to the Credit Facility Providers and the Hedge Counterparty, and, in the case where the amount to be so distributed shall be insufficient to pay such amount in full as aforesaid, then pro rata among the Credit Facility Providers and the Hedge Counterparty, without priority of one such Participant over another, in the proportion that the amounts owed to each such Participant bears to the aggregate unpaid amounts owed to all such Participants;

     fourth, the balance, if any, of such payment remaining thereafter shall be distributed and paid as follows: (i) so much of such payment as is necessary to pay in full the aggregate principal amount of the MEDCO Note and all accrued but unpaid interest thereon to the date of distribution shall be paid to the Bank or any subsequent holder of the MEDCO Note; and (ii) the balance, if any, shall be paid to the Lessee.

               (ii.) Any payment received as a result of a Casualty or Condemnation or any Event of Loss that does not result in the termination of the Facility Lease (including, without limitation, any insurance proceeds, condemnation awards or payments by any Governmental Authority), shall be paid to Lessee in accordance with this Deed of Trust if Lessee is otherwise entitled thereto, and otherwise shall be distributed and paid in accordance with Section 9.3.

               (c) The amount of any payment or prepayment received pursuant to Paragraph 19(f) of the Facility Lease shall be distributed and paid in the following order of priority:

             (i) If such payment constitutes the proceeds of the sale of the Property pursuant to Paragraph 19(f) of the Facility Lease or the Residual Guaranty Amount,

     first, an amount equal to the aggregate unpaid principal of, and accrued interest owed to the Credit Facility Providers and the Hedge Counterparty pursuant to the Credit Facility Documents and the Hedge Documents shall be paid and distributed to the Credit Facility Providers, and the Hedge Counterparty, and, in the case where the amount to be so distributed shall be insufficient to pay such amount in full as aforesaid, then pro rata among the Credit Facility Providers and the Hedge Counterparty, without priority of one such Participant over another, in the proportion that the amounts owed to each such Participant bears to the aggregate unpaid amounts owed to all such Participants;

     second, the balance, if any, of such payment remaining thereafter shall be distributed and paid as follows: (i) so much of .such payment as is necessary to pay in full the aggregate principal amount of the MEDCO

17

Note and all accrued but unpaid interest thereon to the date of distribution and all other amounts payable under or with respect to the MEDCO Note and/or payable to the Bank shall be paid to the Bank or any subsequent holder of the MEDCO Note; and (ii) the balance, if any, shall be paid to the Lessee.

     Section 9.3 Distribution of Payments After Event of Default.

     (a) All payments received and amounts realized by Agent after an Event of Default shall have occurred shall be distributed forthwith by Agent in the following order of priority:

     (i)     If such distribution is not proceeds from the sale of the Property pursuant to Paragraph 19(f) of the Facility Lease or any amount paid by the Lessee under Section 5.6 of this Deed of Trust,

     first, so much of such payments or amounts as shall be required to reimburse Agent for any tax, expense or other loss incurred by Agent (to the extent Agent is entitled to reimbursement therefore pursuant to the Operative Documents and has not previously been reimbursed and to the extent incurred in connection with its duties as Agent) and any unpaid ongoing fees of Agent shall be distributed to Agent for its own account;

     second, so much of such payments or amounts as shall.be required to reimburse the then existing or prior Participants for payments made by them to Agent pursuant to Section 3.4 of this Deed of Trust (to the extent not previously reimbursed), and to pay such then existing or prior Participants the amounts payable to them pursuant to any expense reimbursement provisions of the Operative Documents shall be distributed to each such Participant, without priority of one over the other, in accordance with the amount of such payment or payments payable to each such Participant;

     third, an amount equal to the aggregate unpaid principal of, and accrued interest owed to the Credit Facility Providers and the Hedge Counterparty pursuant to the Credit Facility Documents and the Hedge Documents shall be paid and distributed to the Credit Facility Providers and the Hedge Counterparty, and, in the case where the amount to be so distributed shall be insufficient to pay such amount in full as aforesaid, then pro rata among such Participants, without priority of one such Participant over another, in the proportion that the amounts owed to each such Participant bears to the aggregate unpaid amounts owed to all such Participants; and

     fourth, the balance, if any, of such payment remaining thereafter shall be distributed and paid as follows: (i) so much of such payment as is necessary to pay in full the aggregate principal amount of the MEDCO Note and all accrued but unpaid interest thereon to the date of distribution

18

and all other amounts payable under or with respect to the MEDCO Note and/or payable to the Bank shall be paid to the Bank or any subsequent holder of the MEDCO Note; and (ii) the balance, if any, shall be paid to the Lessee.

     (b) During the occurrence or continuance of any Event of Default, all amounts received or realized by Agent and otherwise distributable pursuant to Section 9.1 or Section 9.2 shall be distributed as provided in Section 9.3(a).

     Section 9.4 Other Payments.

     (a) Except as otherwise provided in Sections 9.1, 9.2 and 9.3 and paragraph (b) below,

     (i) any payments received by Agent for which no provision as to the application thereof is made in the Operative Documents or elsewhere in this Article TX, and

     (ii) all payments received and amounts realized by Agent under the Facility Lease, the MEDCO Note and any other Operative Document or otherwise with respect to the Secured Property to the extent received or realized at any time after payment in full of all amounts due under the Operative Documents to the Credit Facility Providers and the Hedge Counterparty, as well as any other amounts remaining as part of the Collateral after payment in full of all amounts due under the Operative Documents to the Credit Facility Providers and the Hedge Counterparty, shall be distributed forthwith by Agent in the order of priority set forth in Section 9.2(a) (in the case of any payment described in clause (i) above) or in Section 9.3(a) (in the case of any payment described in clause (ii) above), except that in the case of any payment described in clause (ii) above, such payment shall be distributed omitting clauses “third” of such Section 9.3(a).

     (b) Except after an Event of Default has occurred and is continuing, any payment received by Agent for which provision as to the application thereof is made in an Operative Document but not elsewhere in this Article IX shall be distributed forthwith by Agent to the Person for the purpose for which such payment was made in accordance with the terms of such Operative Document.

     Section 9.5 [INTENTIONALLY LEFT BLANK]

     Section 9.6 Supplemental Rent. Except as otherwise provided in Section 9.3, the amounts, if any, from time to time received by Agent which constitute payments of Facility Lease Additional Rent (but excluding any amount paid to any Person as an Indemnitee) shall be paid to or upon the order of the Person entitled thereto pursuant to the Operative Documents.

     Section 9.7 Guarantee Payments. Any payment received by Agent pursuant to the Guarantee shall be distributed forthwith or retained by Agent in the manner and subject to the same conditions as provided for in this Article IX with respect to payments

19

received by Agent in respect of the Lessee’s obligations as to which such payment relates, all as if such payment had been made by the Lessee.”

     (S) For purposes of Section 10.2, all notices sent to the Lessor shall be sent to the Lessor at the following address: Maryland Economic Development Corporation, 100 North Charles Street, Suite 630, Baltimore, Maryland 21201, Attention: Executive Director.

     (T) The limitations on liability set forth in Section 10.9 for the benefit of the Issuer shall also apply to and for the benefit of the Lessor.

(e) The Guarantee is hereby amended as follows:

     (A) The third and fourth “WHEREAS” clauses are amended and restated in its entirety as follows:

     “WHEREAS, simultaneously with the issuance of the Bonds, the Bank has made a loan to the Issuer in aggregate principal amount of up to $3,000,000.00 (the “MEDCO Loan”), as evidenced by that certain Promissory Note and Security Agreement dated of even date herewith made by the Issuer in favor of the Bank (the “MEDCO Note”), the proceeds of which will be used by the Issuer to refinance that portion of the acquisition cost of the Property not covered by the proceeds of the Bonds and to finance that portion of the cost associated with the construction of the Additional Improvements on the Property not covered by the proceeds of the Bonds;

     “WHEREAS, the Issuer may enter into from time to time a Hedge Agreement with the Hedge Counterparty (in each case, as defined in the Lease Agreement dated as of October 25, 2001 between the Issuer, as Lessor, and the Guarantor, as Lessee (as supplemented, the “Facility Lease”));”

     (B) The last sentence in the first paragraph of Section 1 is hereby amended and restated in its entirety as follows:

     “The term “Liabilities”, as used herein, shall mean all of the foregoing (without duplication), in each case howsoever created, arising or evidenced, whether direct or indirect, joint or several, absolute or contingent, or now or hereafter existing, or due or to become due: (i) all amounts now or hereafter payable by the Issuer under the Letter of Credit Agreement and the MEDCO Note, (ii) all amounts now or hereafter payable by the Issuer under the Hedge Agreement and (iii) all amounts now or hereafter payable under the Facility Lease and any of the other Operative Document (in each case whether or not Guarantor or any other Person shall be relieved or released from any or all liability or obligations under any of the Operative Documents, except on account of the full and indefeasible payment of all the Liabilities and full and strict compliance by Guarantor with its obligations hereunder); provided, however, that notwithstanding anything to the contrary contained herein, Guarantor shall not be obligated under any circumstances to pay under this Guaranty, and the term “liabilities” shall not include, any amounts greater than the Lessee (as defined in the Facility Lease) would have had to pay, under the Facility Lease, the Deed of Trust and the other Operative Documents, assuming that such

20

documents were enforced in accordance with their terms (and without giving effect to any discharge or limitation thereon resulting or arising by reason or the bankruptcy or insolvency of the Lessee), plus all reasonable costs actually incurred in enforcing this Guaranty.”

(f) The Letter of Credit Agreement is hereby amended as follows:

     (A) The second sentence of the second paragraph of the Recitals is hereby amended and restated in its entirety as follows:

     “Pursuant to the Facility Lease, the Lessor will lease the Property to the Lessee.”

     (B) The definition of Lessor in Section 1.1 is hereby amended and restated in its entirety as follows:

     “Lessor means the Issuer.”

     (C) The definition of Owner Trust Estate in Section 1.1 is hereby deleted.

     (D) Item (d) in Section 3.2 is hereby amended and restated in its entirety as follows:

     “(d) All right, title and interest of the Issuer in and to the Deed of Trust, the Collateral Pledge Agreement, the Facility Lease, the MEDCO Note and all other collateral, documents and instruments securing the payment and performance by the Lessee of its obligations under the Facility Lease and the other Operative Documents.”

     (E) The first sentence of Section 9.1 is hereby deleted.

     10.      Ratification of Deed of Trust. Except as expressly modified by this Agreement, the Deed of Trust is hereby ratified and reaffirmed and shall continue in full force and effect. In confirmation of the foregoing, each of the Issuer and the Lessee hereby ratifies and reaffirms the grant, bargain, sale and conveyance of the Security Property previously made in the Deed of Trust to the Individual Trustees, and, in confirmation of the foregoing, does hereby presently grant, bargain, sell and convey the Security Property unto the Individual Trustees, and each of the Issuer and the Lessee hereby ratifies and reaffirms the assignment of all leases, rents and profits relating to the Security Property previously made in the Deed of Trust to the Agent, and, in confirmation of the foregoing, does hereby presently assign to the Agent all leases, rents and profits relating to the Security Property, including, without limitation, the Facility Lease, and all security therefor and all guarantees thereof or of any of the Lessee’s obligations under the Operative Documents, including, without limitation, the Guarantee, as the same may be amended, supplemented or otherwise modified from time to time, IN TRUST, WITH POWER OF SALE, to secure to the Agent the prompt payment and performance of the Secured Obligations, subject, however, to the Permitted Encumbrances.

     11.     Ratification of Facility Lease. Except as expressly modified by this Agreement, the Facility Lease and Lease Supplement are hereby ratified and reaffirmed and shall continue in full force and effect as a direct lease from the Issuer to the Lessee. In confirmation of the foregoing,

21

the Issuer and the Lessee hereby ratify and reaffirm the demise and letting of the Property to the Lessee previously made in the Facility Lease and Lease Supplement, and, in confirmation of the foregoing, the Issuer does hereby presently demise and let to the Lessee and the Lessee does hereby presently demise and let from the Issuer, on the terms and conditions set forth in the Facility Lease and Lease Supplement, the Property, subject, however, to the Permitted Exceptions.

     12.     Ratification of Guarantee. Except as expressly modified by this Agreement, the Guarantee is hereby ratified and reaffirmed and shall continue in full force and effect.

     13.      Ratification of Other Operative Documents. Except as expressly modified by this Agreement, the Operative Documents are hereby ratified and reaffirmed and shall continue in full force and effect.

     14.     Further Assurances. At the Lessee’s sole cost and expense, each party hereto shall take, execute, acknowledge and deliver all further acts, documents and assurances as may be reasonably necessary in order to carry out more effectively the intent and purposes of this Agreement and the transactions contemplated hereby. Without limiting the generality of the foregoing, the following documents shall be delivered or obtained by the parties, at the Lessee’s sole cost and expense: (i) all applicable UCC financing statement amendments or terminations; (ii) endorsements to the title insurance policies previously issued in favor of the Agent; and (iii) such other documents as may be necessary to preserve and protect the rights of the parties under the Operative Documents.

     15.      Accounting and Tax Treatment. This Agreement is being entered into by the parties hereto, at the request of the Lessee, and, notwithstanding anything herein or in any of the other Operative Documents or in any other document or instrument entered into in connection herewith, the Lessee and the Guarantor acknowledge and agree that none of the parties hereto have made any representations or warranties regarding the Lessee’s accounting or tax treatment for the transactions contemplated by the Facility Lease and the other Operative Documents and that the Lessee and the Guarantor have obtained and relied solely upon the advice of their own accounting and tax advisors concerning this Agreement and the other Operative Documents for such purposes.

     16.      Recordation. The parties hereto consent to the recordation, at the Lessee’s sole cost and expense, in the Land Records of Montgomery County, Maryland, such documents as may be required to evidence the following pursuant to this Agreement (i) the termination of the Head Lease and Memorandum of Lease, (ii) assignment of the Facility Lease and Lease Supplement to the Issuer and (iii) the amendments to the Deed of Trust.

     17.      Applicable Law. This Agreement shall be governed by the laws of the State of Maryland.

     18.      Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of, and shall be enforceable by, the parties hereto and each of their respective successors and assigns.

     19.     No Novation. The parties hereto intend and agree that the transactions contemplated

22

by this Agreement shall not constitute a novation of the Facility Lease, the MEDCO Note or any other Operative Document.

     20.      Consent and Waiver. To the extent required pursuant to the terms of any of the Operative Documents, the parties hereto and the Remarketing Agent (i) acknowledge the delivery and receipt of any notices required under the Operative Documents concerning the transactions contemplated herein, (ii) consent to the transactions contemplated herein and to the amendments to the Operative Documents set forth herein and (iii) waive any default or event of default under the Operative Documents that would otherwise arise as a result of the transactions contemplated herein.

     21.      Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes, and all counterparts shall together constitute one and the same instrument.

     22.      Limitation on Issuer’s Liability. Notwithstanding any other provision set forth in this Agreement or in any other agreement or document executed in connection with or relating to the transactions contemplated by this Agreement to the contrary:

     (a)  No provision of this Agreement or any other agreement or document executed in connection with or relating to the transactions contemplated by this Agreement shall be construed so as to give rise to any monetary or pecuniary liability of the Issuer or of the State of Maryland, or any political subdivision or agency thereof, or to give rise to a charge upon the general credit of the undersigned or of the State of Maryland or any political subdivision or agency thereof, and any claim based on or in respect of any liability of the Issuer under this Agreement shall be enforced only as set forth in this Section 22.

     (b)  Neither this Agreement nor any other agreement or document executed in connection with or relating to the transactions contemplated by this Agreement nor any claim hereunder or thereunder shall (i) constitute a debt of the Issuer or of the State of Maryland, or any political subdivision or agency thereof, or a pledge of the full faith and credit or taxing power of the State of Maryland, or any political subdivision or agency thereof, or (ii) create any monetary liability on, or obligate the Issuer or the State of Maryland, or any political subdivision or agency thereof, to make any appropriation for payment. The Issuer has no taxing authority.

     (c)  The liability of the Issuer under this Agreement and under any other agreement or document executed in connection with or relating to this Agreement shall be non-recourse to the Issuer, limited as set forth above in this Section 22; and the lien of any judgment shall be restricted to only the Issuer’s interest in the Property (subject to the lien of the Deed of Trust), and not against any assets, properties or funds of (i) any employee or agent of the Issuer (or any director, officer, legal representative, successor, or assign of any thereof), or (ii) any other Person affiliated with any of the foregoing, including, without limitation, the State of Maryland or any department, agency or instrumentality thereof, and the Issuer shall have no other liability, legal, moral or otherwise, to the parties hereto, or any other Person, in connection with the Property, this Agreement, or any other agreement or document executed in connection with or relating to this Agreement. In no event shall the Issuer be required to pay any claim under this Agreement or under any other agreement or document executed in connection with or related to this Agreement from any of its own funds.

23

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed on their behalf, under seal, by their respective signatories thereunto duly organized as of the date first above written.

	ISSUER:
WITNESS:
	MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and corporate
	and public instrumentality of the State of
	Maryland
	By:	/s/	Hans F. Mayer
			Hans F. Mayer, Executive Director

S-1-

	OWNER TRUSTEE:
WITNESS:
	WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its
	individual capacity, but solely as Owner Trustee
	By:	/s/	Val T. Orton
	Name:		Val T. Orton
	Title:		Vice President

S-2-

	MARYLAND TRUSTEE:
WITNESS:
		/s/ Val T. Orton
	Val T. Orton, not in his individual capacity, but solely as Maryland Trustee appointed pursuant to that certain Trust Agreement dated as of October 25, 2001

S-3-

	LESSEE:
WITNESS:
	HUMAN GENOME SCIENCES, INC., a Delaware corporation
	By:	/s/	Steven C. Mayer
	Name:		Steven C. Mayer
	Title:		Senior Vice President and Chief Financial Officer

S-4-

	GUARANTOR:
WITNESS:	HUMAN GENOME SCIENCES, INC., a Delaware corporation
	By:	/s/	Steven C. Mayer
	Name:		Steven C. Mayer
	Title:		Senior Vice President and Chief Financial Officer

S-5-

	PLEDGOR:
WITNESS:	HUMAN GENOME SCIENCES, INC., a Delaware corporation
	By:	/s/	Steven C. Mayer
	Name:		Steven C. Mayer
	Title:		Senior Vice President and Chief Financial Officer

S-6-

	AGENT:
WITNESS:	ALLFIRST BANK, a Maryland banking corporation, a division of M&T BANK
	By:		/s/ Joseph C. LeMense
		Joseph C. LeMense Vice President and Unit Manager

S-7-

	CERTIFICATE HOLDER:
WITNESS:	ALLFIRST BANK, a Maryland banking corporation, a division of M&T BANK
	By:		/s/ Joseph C. LeMense
		Joseph C. LeMense Vice President and Unit Manager

S-8-

	CREDIT FACILITY PROVIDER:
WITNESS:	ALLFIRST BANK, a Maryland banking corporation, a division of M&T BANK
	By:	/s/ Joseph C. LeMense
		Joseph C. LeMense
		Vice President and Unit Manager

S-9-

	BOND TRUSTEE:
WITNESS:	M&T BANK, a division of MANUFACTURERS AND TRADERS TRUST COMPANY (successor in interest to ALLFIRST TRUST COMPANY NATIONAL ASSOCIATION
	By:	/s/ Patrick Wood
		Patrick Wood
		Vice President

S-10-

	COLLATERAL AGENT:
WITNESS:	M&T BANK, a division of MANUFACTURERS AND TRADERS TRUST COMPANY (successor in interest to ALLFIRST TRUST COMPANY NATIONAL ASSOCIATION
	By:	/s/ Melanie Stranix
		Melanie Stranix
		Vice President

S-11-

	INDIVIDUAL TRUSTEE:
WITNESS:
	By:	/s/ Joseph C. LeMense
		Joseph C. LeMense, as Individual Trustee

S-12-

	INDIVIDUAL TRUSTEE:
WITNESS:
	By:	/s/ Garth C. Harding
		Garth C. Harding, as Individual Trustee

S-13-

ACCEPTED AND APPROVED BY:
ALLFIRST BANK, a Maryland banking corporation, and a division of M&T BANK, as Remarketing Agent
By:	/s/ Howard M. Sakin
Name:	Howard M. Sakin
Title:	Managing Director

S-14- EX-10.2 4 w88716exv10w2.htm AMENDED AND RESTATED PARTICIPATION AGREEMENT

Exhibit 10.2

AMENDED AND RESTATED
PARTICIPATION AGREEMENT
AND APPENDIX A

Dated as of June 30, 2003

among

HUMAN GENOME SCIENCES, INC., as the Construction Agent and as the Lessee,

WACHOVIA DEVELOPMENT CORPORATION,
as the Borrower and as the Lessor,

VARIABLE FUNDING CAPITAL CORPORATION,
as a Credit Lender,

VARIABLE FUNDING CAPITAL CORPORATION,
as a Mortgage Lender,

THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Investors,

WACHOVIA SECURITIES, LLC,
as the Deal Agent,

and

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent for the Primary Financing Parties and,
respecting the Security Documents, as the Agent for the Secured Parties

TABLE OF CONTENTS

			Page
SECTION 1.		THE FINANCING		2
SECTION 2.		[RESERVED]		2
SECTION 3.		SUMMARY OF TRANSACTIONS		3
	3.1.	Operative Agreements		3
	3.2.	Property Purchase		3
	3.3.	Construction of Improvements; Commencement of Basic Rent		3
	3.4.	Funding of Loans by the Lenders		3
SECTION 4.		THE CLOSING		4
	4.1.	Closing Date		4
	4.2.	Closing Date; Construction Advances		4
SECTION 5.		FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION DATE; THE LESSEE’S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS		4
	5.1.	General		4
	5.2.	Procedures for Funding		5
	5.3.	Conditions Precedent for the Lessee, the Agent and the Primary Financing Parties Relating to the Closing Date		6
	5.4.	Conditions Precedent for the Lessee, the Agent and the Primary Financing Parties Relating to the Advance of Funds after the Closing Date		11
	5.5.	Additional Reporting and Delivery Requirements on Completion Date		13
	5.6.	The Construction Agent Delivery of Construction Budget Modifications		14
	5.7.	Restrictions on Liens		14
	5.8.	[Reserved]		15
	5.9.	[Reserved]		15
	5.10.	Payments		15
	5.11.	Liquid Collateral		15
	5.12.	Unilateral Right to Increase the Lessor Commitments and the Lender Commitments		17
	5.13.	Lessee’s Right to Request Assignment of Mortgage Notes		17
	5.14.	Lease Commencement Upon Completion		17
	5.15.	Funding of Punch List Liquid Collateral Account for Punch List Items		17
	5.16.	Overdue Amounts		18
	5.17.	Cap on Construction Advance for Construction Agent Reimbursement		18
SECTION 5A.		LESSOR ADVANCE		19
	5A.1.	Procedure for Lessor Advance		19
	5A.2.	Lessor Yield		19
	5A.3.	Scheduled Return of Lessor Advance		20
	5A.4.	Early Return of Lessor Advance		20
	5A.5.	Conversion and Continuation Options		21
	5A.6.	Computation of Lessor Yield		22

i

			Page
SECTION 6.		REPRESENTATIONS AND WARRANTIES		22
	6.1.	Representations and Warranties of the Borrower		22
	6.2.	Representations and Warranties of the Lessee		25
SECTION 7.		PAYMENT OF CERTAIN EXPENSES		32
	7.1.	Transaction Expenses		32
	7.2.	No Broker, etc.		32
	7.3.	Certain Fees and Expenses		33
	7.4.	Unused Fee		33
	7.5.	Administrative Fee		33
	7.6.	Structuring Fee		34
	7.7.	Liquidity Fee		34
	7.8.	Program Fee		34
SECTION 8.		OTHER COVENANTS AND AGREEMENTS		35
	8.1.	Cooperation with the Construction Agent or the Lessee		35
	8.2.	Covenants of the Lessor		35
	8.3.	The Lessee Covenants, Consent and Acknowledgment		37
	8.3A	Additional Covenants of the Lessee		43
	8.4.	Sharing of Certain Payments		50
	8.5.	Grant of Easements, etc.		50
	8.6.	Appointment of the Agent by the Primary Financing Parties		50
	8.7.	Payments		55
	8.8.	Release of the Property, etc.		59
	8.9.	Limitation of Lessor’s Obligations		59
	8.10.	No Representations or Warranties as to the Property or Operative Agreements		60
	8.11.	Reliance; Advice of Counsel		61
	8.12	[Reserved]		61
	8.13.	[Reserved]		61
	8.14.	Non-Disturbance		61
	8.15.	Payment of Appraiser Expenses		61
	8.16.	Bankruptcy Petition Against the Conduit		62
SECTION 9.		RIGHTS UNDER THE CREDIT AGREEMENTS		62
SECTION 10.		TRANSFER OF INTEREST		63
	10.1.	Restrictions on Transfer		63
	10.2.	Effect of Transfer		65
	10.3.	Permitted Refinancing of Loans		65
SECTION 11.		INDEMNIFICATION		66
	11.1.	General Indemnity		66
	11.2.	General Tax Indemnity		69
	11.3.	Increased Costs, Loan Adequacy; Illegality, etc.		74
	11.4.	Funding/Contribution Indemnity		76
	11.5.	EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.		76
	11.6.	Additional Provisions Regarding Environmental Indemnification		77
	11.7.	Indemnity Prior to Completion Date		77

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			Page
SECTION 12.		MISCELLANEOUS		78
	12.1.	Survival of Agreements		78
	12.2.	Notices		78
	12.3.	Counterparts		80
	12.4.	Terminations, Amendments, Waivers, Etc.		80
	12.5.	Headings, etc.		83
	12.6.	Parties in Interest		83
	12.7.	GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE		83
	12.8.	Severability		84
	12.9.	Liability Limited		84
	12.10.	Rights of the Lessee		85
	12.11.	Further Assurances		86
	12.12.	Calculations under Operative Agreements		86
	12.13.	Confidentiality		86
	12.14.	Financial Reporting/Tax Characterization		88
	12.15.	Deal Agent		88
	12.16.	Recourse Against Certain Parties		88
	12.17.	Parties in Interest		89
	12.18.	Hedging Agreements are not Collateral		89
	12.19.	Replacement of the Intermediary		89
	12.20.	Amendment and Restatement		90
List of Operative Agreements				11
Authority Documents of Represented Parties				13

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EXHIBITS
A	- -	Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B	- -	Form of Local Counsel Legal Opinion - Section 5.3(j)
C	- -	Form of Officer’s Certificate for Lessee - Section 5.3(y)
D	- -	Form of Secretary’s Certificate for Lessee - Section 5.3(z)
E	- -	Form of Officer’s Certificate for Lessor - Section 5.3(bb)
F	- -	Form of Secretary’s Certificate for Lessor - Section 5.3(cc)
G	- -	Form of Legal Opinion for Lessor - Section 5.3(dd)
H	- -	Form of Legal Opinion for Lessee - Section 5.3(ee)
I	- -	Form of Officer’s Certificate for Lessee - Section 5.5
J	- -	Description of Material Litigation - Section 6.2(d)
K	- -	Form of Officer’s Certificate for Agent - Section 5.11(e)
L	- -	Form of Monthly Report - Section 8.3A(b)(i)
M	- -	Form of Compliance Certificate for Lessee - Section 8.3A(u)(iii)
SCHEDULES
I	- -	Material Construction Documents
II	- -	Synthetic Lease Obligations

APPENDIX A - Rules of Usage and Definitions

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AMENDED AND RESTATED PARTICIPATION AGREEMENT

          THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT, dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, this “Agreement”) is by and among HUMAN GENOME SCIENCES, INC., a Delaware corporation (the “Lessee” or the “Construction Agent”); WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation (the “Borrower” or the “Lessor”); VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation (the “Conduit”), as a holder of a Credit Note; the Conduit, as a holder of a Mortgage Note; the various banks and other financial institutions which are parties hereto from time to time as investors (individually, an “Investor” and collectively, the “Investors”; each of the Conduit and the Investors, as a holder of a Credit Note, individually, a “Credit Lender” and collectively, the “Credit Lenders”; each of the Conduit and the Investors, as a holder of a Mortgage Note, individually, a “Mortgage Lender” and collectively, the “Mortgage Lenders”; each Credit Lender, each Mortgage Lender and the Lessor may be referred to, individually, as a “Primary Financing Party” and collectively, as the “Primary Financing Parties”); WACHOVIA SECURITIES, LLC, a Delaware limited liability company, as the deal agent (the “Deal Agent”); and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as the agent for the Primary Financing Parties and, respecting the Security Documents, as the agent for the Secured Parties (in such capacity, the “Agent”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A hereto. All terms which are defined in this Agreement are subject to the rules of usage of such terms set forth in Appendix A hereto.

RECITALS

          WHEREAS, the Lessee, Traville LLC, the Trust, Wells Fargo Bank Northwest, National Association, BancBoston Leasing Investments Inc., Wachovia Bank, National Association (as successor in interest to First Union National Bank), EagleFunding Capital Corporation, Fleet Securities, Inc., and Fleet National Bank were parties to that certain Participation Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from time to time, the “Original Participation Agreement”);

          WHEREAS, pursuant to the Master Transfer Agreement, among other things, (a) the Lessor has obtained (i) the right, title and interest of the Trust in the Property and under the Original Participation Agreement and the associated transaction documents with regard to the Property (including without limitation a ground leasehold interest in real estate comprising a part of the Property pursuant to the Ground Lease and titled ownership in the Equipment and Improvements comprising a part of the Property) and (ii) an assignment of the right, title and interest of the investors under the Original Participation Agreement and the associated transaction documents with regard to the Property and (b) the Lenders have obtained an assignment of the right, title and interest of the lenders under the Original Participation Agreement and the associated transaction documents with regard to the Property;

          WHEREAS, the parties hereto wish to amend and restate the Original Participation Agreement as it relates to the Property pursuant to the terms of this Agreement.

          In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. THE FINANCING.

          Subject to the terms and conditions of this Agreement and the other Operative Agreements and in reliance on the representations and warranties of each of the parties hereto contained herein or made pursuant hereto, the Primary Financing Parties have agreed to make Lessor Advances in an aggregate amount up to the Lessor Commitment (in the case of the Lessor), Credit Loans in an aggregate amount up to the Credit Loan Commitment (in the case of the Credit Lenders) and Mortgage Loans in an aggregate amount up to the Mortgage Loan Commitment (in the case of the Mortgage Lenders) in order for the Lessor to acquire the Property (including without limitation a ground lease interest therein), and to construct certain Improvements in accordance with the Agency Agreement and the terms and provisions hereof and for the other purposes described herein, all in connection with the amendment and restatement of the Original Participation Agreement and the associated transaction documents.

          Notwithstanding the foregoing, pursuant to the Master Transfer Agreement, (a) the Lessor has obtained (i) a ground leasehold interest in the Property from the Trust and (ii) an assignment of interest in the investor-provided amounts from the investors under the Original Participation Agreement and the associated transaction documents previously extended with regarded to the Property, (b) the amounts paid by the Lessor to obtain the interests referenced in the foregoing subsection (a) are hereby acknowledged and agreed by all parties to this Agreement to constitute for purposes of the Operative Agreements Lessor Advances and a portion of the Property Cost, (c) the Lenders have obtained an assignment of interest in the loans from the lenders under the Original Participation Agreement and the associated transaction documents (including without limitation the promissory notes issued in connection therewith) previously extended with regard to the Property and (d) the amounts paid by the Lenders to obtain the interests referenced in the foregoing subsection (c) are hereby acknowledged and agreed by all parties to this Agreement to constitute for purposes of the Operative Agreements Loans and a portion of the Property Cost.

          The parties hereto hereby amend and restate the Original Participation Agreement as it relates to the Property pursuant to the terms of this Agreement.

SECTION 2. [RESERVED].

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SECTION 3. SUMMARY OF TRANSACTIONS.

          3.1. Operative Agreements.

          On the Closing Date, each of the respective parties hereto and thereto shall execute and deliver the Master Transfer Agreement, this Agreement, the Lease, the Agency Agreement, the Credit Agreements, the Notes, the Security Agreement, the Mortgage Instrument and such other documents, instruments, certificates and opinions of counsel as agreed to by the parties hereto.

          3.2. Property Purchase.

          On the Closing Date and subject to the terms and conditions of the Operative Agreements (a) the Lessor will make a Lessor Advance, (b) the Lenders will (i) obtain an assignment of the right, title and interest of the lenders under the Original Participation Agreement and associated transaction documents with regard to the Property (including without limitation the promissory notes issued in connection therewith) and (ii) make Loans and (c) the Lessor will acquire the Property (including without limitation a ground lease interest therein in accordance with the Master Transfer Agreement and the other Operative Agreements) and such Lessor Advance and Loans shall be used to pay other Project Costs, as applicable. In addition, the Lessor and the Lessee will grant the Agent Liens on the Property and the other Collateral by execution of the required Security Documents.

          3.3. Construction of Improvements; Commencement of Basic Rent.

          Construction Advances will be made with respect to particular Improvements to be constructed on the Property and with respect to ongoing Work regarding the Equipment and Improvements, in each case, pursuant to the terms and conditions of the Operative Agreements. The Construction Agent will act as a construction agent on behalf of the Lessor respecting the Work regarding the Equipment and Improvements and the expenditures of the Construction Advances related to the foregoing. The Construction Agent shall promptly notify the Lessor upon Completion of the Work regarding the Improvements and the Lessee shall commence to pay Basic Rent as of the Commencement Date.

          3.4. Funding of Loans by the Lenders.

          At any time that the funding of a Loan is required pursuant to the Operative Agreements, the Conduit may elect to fund or not to fund such Loan subject to the terms of the Credit Agreements; provided, if the Conduit elects not to (or, for whatever reason, does not) fund such Loan, then the Investors shall fund their ratable share of such Loan based on their Lender Commitments; provided, further, in no event shall any Investor be obligated to fund any such Loan if (a) the Conduit is then subject to a Bankruptcy Event at such time or (b) the funding of such Loan would require such Investor to exceed its applicable Lender Commitment.

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SECTION 4. THE CLOSING.

          4.1. Closing Date.

          All documents and instruments required to be delivered on the Closing Date shall be delivered at the offices of Moore & Van Allen PLLC, Charlotte, North Carolina, or at such other location as may be determined by the Lessor, the Agent and the Lessee.

          4.2. Closing Date; Construction Advances.

          The Construction Agent shall deliver to the Agent a requisition (a “Requisition”), in the form attached hereto as EXHIBIT A or in such other form as is satisfactory to the Agent, in its reasonable discretion, in connection with (a) the Transaction Expenses payable, pursuant to Section 7.1(a), by the Lessor on the Closing Date and (b) each Construction Advance pursuant to Section 5.4.

SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING
REQUIREMENTS ON COMPLETION DATE; THE LESSEE’S DELIVERY OF
NOTICES; RESTRICTIONS ON LIENS.

          5.1. General.

          (a) To the extent funds have been made available by the Lenders to the Lessor pursuant to Section 5 and by the Lessor pursuant to Sections 5 and 5A, the Lessor will use such funds from time to time in accordance with the terms and conditions of this Agreement and the other Operative Agreements for the following purposes (costs expended for the following purposes pursuant to subsections (i), (ii) or (iii) of this Section 5.1(a) are herein referred to as the “Project Costs”) (i) at the direction of the Construction Agent to acquire the Property (including without limitation a ground lease interest therein) in accordance with the terms of the Master Transfer Agreement and the other Operative Agreements, (ii) to make Advances to the Construction Agent to permit the acquisition, testing, engineering, installation, development, construction, modification, design, and renovation, as applicable, of the Property (or components thereof) in accordance with the terms of the Agency Agreement and the other Operative Agreements, and (iii) to permit the funding of Capitalized Costs.

          (b) On any Payment Date with respect to the Property during the period prior to the Commencement Date (but subject to Section 5.17), the Lessor and the Lenders shall fund the Lessor Yield and the Interest due and payable on such date without regard to whether a Requisition therefor is delivered; provided, the Agent shall notify in a timely manner the Lessor and the Lenders of their respective amounts to be advanced; provided, further, neither the Lessor nor any Lender shall have any obligation to fund any Lessor Advance or Loan to the extent that at any time such funding would cause (i) regarding the Lessor, the Lessor Advance to exceed the Available Lessor Commitment and (ii) regarding any Lender, the Loan of such Lender to exceed, in the case of the Conduit, the Available Lender Commitments, or in the case of the Investors, such Investor’s Available Lender Commitment.

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          5.2. Procedures for Funding.

     (a) The Construction Agent shall designate the date for Advances in accordance with the Operative Agreements; provided, there shall be no more than two (2) Advances in any calendar month. The Loans extended on the Closing Date plus the amounts advanced on the Closing Date by the Lenders in connection with their acquisition of assignment interests pursuant to the Master Transfer Agreement as referenced in Section 1 shall be for an aggregate amount of $5,000,000 or more. Except with respect to any Capitalized Costs relating to any Hedging Agreement, the Loans extended on any other date shall be for an aggregate amount of $500,000 or more. Not less than (i) three (3) Business Days prior to the Closing Date (which shall also be the date the Lessor acquires the Property (including without limitation a ground lease interest therein)) and (ii) three (3) Business Days prior to the date on which any Construction Advance is to be made, the Construction Agent shall deliver to the Agent, with respect to the Closing Date and each Construction Advance, as applicable, a Requisition as described in Section 4.2 hereof in a form reasonably acceptable to the Agent.

     (b) Each Requisition shall: (i) be irrevocable, (ii) request funds in an amount not in excess of the total aggregate of the Available Credit Lender Commitments, plus the Available Mortgage Lender Commitments, plus the Available Lessor Commitments and (iii) request that the Lenders make Loans and that the Lessor make Lessor Advances for the payment of Transaction Expenses or other Project Costs (in the case of a Construction Advance) that have previously been incurred or are to be incurred on the date of such Advance to the extent such were not subject to a prior Requisition, in each case as specified in the Requisition.

     (c) Subject to the satisfaction of the conditions precedent set forth in Section 5.3 or 5.4, as applicable, (i) on the Closing Date and each date on which a Construction Advance is to be made, as applicable, the Conduit may (if the Conduit declines, the other Lenders, subject to Section 3.4, shall) make Loans up to the Credit Loan Commitments and Mortgage Loan Commitments in the case of the Conduit, or, in the case of the Investors, their respective Credit Loan Commitments and Mortgage Loan Commitments, and the Lessor shall make a Lessor Advance up to its Lessor Commitment such that eighty-two percent (82%) of the Requested Funds are funded by Credit Loans, twelve percent (12%) of the Requested Funds are funded by Mortgage Loans and six percent (6%) of the Requested Funds are funded by Lessor Advances, and (ii) the total amount of Credit Loans, Mortgage Loans and Lessor Advances on such date shall (x) be used by the Lessor to pay Project Costs including Transaction Expenses or (y) be advanced by the Lessor on the date of such Advance to the Construction Agent to pay Project Costs.

     (d) [Reserved].

     (e) All Operative Agreements which are to be delivered to the Agent or the Primary Financing Parties shall be delivered to the Agent, on behalf of the Agent or the

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Primary Financing Parties, and such items (except for Notes and chattel paper originals, with respect to which in each case there shall be only one original) shall be delivered with originals sufficient for the Agent and each Primary Financing Party. The Agent shall then deliver such Operative Agreements to each Primary Financing Party. All other items which are to be delivered to the Agent or the Primary Financing Parties shall be delivered to the Agent, on behalf of the Agent or the Primary Financing Parties, or directly to such party as required by the Operative Agreements, with originals sufficient for the intended recipients. To the extent any other items delivered to the Agent are requested in writing from time to time by any Primary Financing Party or are required to be delivered by the Agent pursuant to Section 8.6(g), the Agent shall provide a copy of such item to the party requesting it or to the parties entitled thereto, as applicable.

     (f) Notwithstanding the completion of any closing or funding under this Agreement pursuant to Sections 5.3 or 5.4, each condition precedent in connection with any such closing or funding may be subsequently enforced by the Agent as a covenant obligation of the Lessee (unless expressly waived by the Agent).

  5.3. Conditions Precedent for the Lessee, the Agent and the Primary Financing Parties Relating to the Closing Date.

      The obligations on the Closing Date of the Lessee, the Agent and the Primary Financing Parties to enter into the transactions contemplated by this Agreement, including without limitation the obligation to execute and deliver the applicable Operative Agreements to which each is a party on the Closing Date and, in the case of the Credit Lenders, to make Credit Loans, in the case of Mortgage Lenders, to make Mortgage Loans, and, in the case of the Lessor, to make Lessor Advances, in order to pay Transaction Expenses are subject to the satisfaction or waiver of the following conditions precedent on or prior to the Closing Date (to the extent such conditions precedent require the delivery of any agreement, certificate, instrument, memorandum, legal or other opinion, appraisal, commitment, title insurance commitment, lien report or any other document of any kind or type, such shall be in form and substance satisfactory to the Agent and the Primary Financing Parties, in their reasonable discretion; notwithstanding the foregoing, the obligations of a party shall not be subject to any conditions contained in this Section 5.3 which are required to be performed by such party):

     (a) the correctness in all material respects of the representations and warranties of the parties to this Agreement contained herein, in each of the other Operative Agreements and each certificate delivered pursuant to any Operative Agreement;

     (b) the performance by the parties to this Agreement of their respective agreements contained herein and in the other Operative Agreements to be performed by them on or prior to such date;

     (c) the Agent and the Primary Financing Parties shall have received fully executed counterpart copies of the Requisition, appropriately completed;

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     (d) title to the Property shall conform to the representations and warranties set forth in Section 6.2(l) hereof;

     (e) the effective date for the Master Transfer Agreement shall have occurred and the Construction Agent shall have delivered to the Agent (i) a good standing certificate for the Construction Agent in the state where the Property is located, (ii) the Ground Lease and the HVAC Easement, and (iii) a copy of any other documentation reasonably requested by the Agent which evidences the acquisition or transfer of any interest in the Property to any Financing Party;

     (f) there shall not have occurred and be continuing any Default or Event of Default and no Default or Event of Default will have occurred between the date of delivery of the Requisition and disbursement of the Advance or after giving effect to any such Advance;

     (g) the Construction Agent shall have delivered to the Agent separate title insurance commitments for the Lessor and for the Lenders to issue policies respecting the Property, with such endorsements as the Agent deem reasonably necessary, in favor of the Lessor and the Agent from a title insurance company reasonably acceptable to the Agent, but only with such title exceptions thereto as are reasonably satisfactory to the Agent;

     (h) the Construction Agent shall have delivered to the Agent an environmental site assessment respecting the Property prepared by an independent recognized professional reasonably acceptable to the Agent and evidencing no pre-existing environmental condition with respect to which there is more than a remote risk of loss;

     (i) the Construction Agent shall have delivered to the Agent a survey (with a flood hazard certification) respecting the Property prepared by (i) an independent recognized professional reasonably acceptable to the Agent and (ii) in a manner and including such information as is reasonably required by the Agent;

     (j) the Construction Agent shall have caused to be delivered to the Agent a legal opinion in the form attached hereto as EXHIBIT B or in such other form as is reasonably acceptable to the Agent with respect to local law real property issues respecting the state in which the Property is located addressed to the Financing Parties, from counsel located in the state where the Property is located, prepared by counsel reasonably acceptable to the Agent;

     (k) the Agent shall be reasonably satisfied that the acquisition, ground leasing and/or holding of the Property and the execution of the Mortgage Instrument and the other Security Documents (as applicable) will not adversely affect the rights of the Agent or the Financing Parties under or with respect to the Operative Agreements;

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     (l) the Construction Agent shall have delivered to the Agent invoices for, or other reasonably satisfactory evidence of, the various Transaction Expenses referenced in Section 7 of this Agreement, as appropriate;

     (m) the Construction Agent shall have caused to be delivered to the Agent the Mortgage Instrument (in such form as is reasonably acceptable to the Agent, with revisions as necessary to conform to applicable state law) and Primary Financing Party Financing Statements respecting the Property, all fully executed and in recordable form;

     (n) with respect to the Advance made on the Closing Date and the amounts paid by the Primary Financing Parties for the interests obtained by such parties pursuant to the Master Transfer Agreement on the Closing Date as described in Section 1, the sum of the Available Credit Lender Commitment, plus the Available Mortgage Lender Commitment plus the Available Lessor Commitment will be sufficient to pay all such amounts;

     (o) the Lessee shall have delivered to the Agent with respect to the Property a Lease Supplement and a memorandum (or short form lease) regarding the Lease and such Lease Supplement (such memorandum or short form lease to be in the form attached to the Lease as EXHIBIT B or in such other form as is acceptable to the Agent, with modifications as necessary to conform to applicable state law, and in form suitable for recording);

     (p) the Lessee shall have deposited good and immediately available funds, in Permitted Investments, into the Liquid Collateral Account in a sufficient amount so that after giving effect to the requested Advance on the Closing Date the Lessee is in compliance with Section 5.11;

     (q) the Construction Agent shall have delivered to the Agent a Construction Budget and a Construction Schedule for the Property (each to be in form and substance reasonably satisfactory to the Agent) evidencing that (i) the cost of Completion shall not exceed the Available Commitment and (ii) Completion shall occur on or prior to the Construction Period Termination Date;

     (r) the Construction Agent shall have provided evidence to the Agent of insurance as provided in the Agency Agreement;

     (s) the Construction Agent shall have caused an Appraisal regarding the Property to be provided to the Agent from an appraiser reasonably satisfactory to the Agent;

     (t) the Construction Agent shall cause (i) Uniform Commercial Code lien searches, tax lien searches and judgment lien searches regarding the Lessor and the Lessee to be conducted (and copies thereof to be delivered to the Agent) in such jurisdictions as determined by the Agent by a nationally recognized search company reasonably acceptable to the Agent and (ii) the liens referenced in such lien searches

8

which are objectionable to the Agent to be either removed or otherwise handled in a manner reasonably satisfactory to the Agent;

     (u) all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of the Operative Agreements and/or documents related thereto shall have been paid or provisions for such payment shall have been made to the reasonable satisfaction of the Agent;

     (v) [Reserved];

     (w) each of the Operative Agreements to be entered into on such date shall have been duly authorized, executed and delivered by the parties thereto, and shall be in full force and effect, and the Agent shall have received a fully executed copy of each such Operative Agreement;

     (x) since the date of the most recent audited consolidated financial statements of the Lessee which have been provided to the Agent, there shall not have occurred any event, condition or state of facts which shall have or could reasonably be expected to have a Material Adverse Effect, other than as specifically contemplated by the Operative Agreements;

     (y) the Agent shall have received an Officer’s Certificate, dated as of the Closing Date, of the Lessee in the form attached hereto as EXHIBIT C or in such other form as is reasonably acceptable to the Agent stating that (i) each and every representation and warranty of the Lessee contained in the Operative Agreements to which it is a party is true and correct in all material respects on and as of the Closing Date; (ii) no Lease Default or Lease Event of Default has occurred and is continuing under any Operative Agreement; (iii) each Operative Agreement to which the Lessee is a party is in full force and effect with respect to it except as the same may be limited by applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ or lessors’ rights generally and general principles of equity; and (iv) the Lessee has duly performed and complied with all covenants, agreements and conditions contained herein or in any Operative Agreement required to be performed or complied with by it on or prior to the Closing Date;

     (z) the Agent shall have received (i) a certificate of the Secretary or an Assistant Secretary of the Lessee, dated as of the Closing Date, in the form attached hereto as EXHIBIT D or in such other form as is reasonably acceptable to the Agent attaching and certifying as to (A) the resolutions of the Board of Directors of the Lessee duly authorizing the execution, delivery and performance by the Lessee of each of the Operative Agreements to which it is or will be a party, (B) the articles of incorporation of the Lessee certified as of a recent date by the Secretary of State of its state of incorporation and its by-laws and (C) the incumbency and signature of persons authorized to execute and deliver on behalf of the Lessee the Operative Agreements to which it is or will be a party and (ii) a good standing certificate (or local equivalent) from

9

the respective states where the Lessee is incorporated, where the principal place of business of the Lessee is located and where the Property is located as to its good standing in each such state;

     (aa) the Agent shall have received a copy of the then current investment guidelines of the Lessee duly authorized and adopted by the Lessee and such shall be certified by a Responsible Officer of the Lessee as true and correct;

     (bb) the Agent shall have received an Officer’s Certificate of the Lessor dated as of the Closing Date in the form attached hereto as EXHIBIT E or in such other form as is reasonably acceptable to the Agent, stating that (i) each and every representation and warranty of the Lessor contained in the Operative Agreements to which it is a party is true and correct in all material respects on and as of the Closing Date, (ii) no Default or Event of Default attributable solely to Lessor has occurred and is continuing under any Operative Agreement, (iii) each Operative Agreement to which the Lessor is a party is in full force and effect with respect to it except as the same may be limited by applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ or lessors’ rights generally and general principles of equity and (iv) the Lessor has duly performed and complied with all covenants, agreements and conditions contained herein or in any Operative Agreement required to be performed or complied with by it on or prior to the Closing Date;

     (cc) the Agent shall have received (i) a certificate of the Secretary or an Assistant Secretary of the Lessor in the form attached hereto as EXHIBIT F or in such other form as is reasonably acceptable to the Agent, attaching and certifying as to (A) the signing resolutions duly authorizing the execution, delivery and performance by the Lessor of each of the Operative Agreements to which it is or will be a party, (B) its articles of incorporation and its by-laws, and (C) the incumbency and signature of persons authorized to execute and deliver on its behalf the Operative Agreements to which it is a party and (ii) a good standing certificate (or local equivalent) from the respective states where the Lessor is incorporated and where the principal place of business of the Lessor is located as to its good standing in each such state;

     (dd) counsel for the Lessor reasonably acceptable to the Agent shall have issued to the Agent its opinion in the form attached hereto as EXHIBIT G or in such other form as is reasonably acceptable to the Agent, addressed to the Lessee and the Financing Parties;

     (ee) the Lessee shall have caused to be delivered to the Agent a legal opinion in the form attached hereto as EXHIBIT H or in such other form as is reasonably acceptable to the Agent, addressed to the Financing Parties, from counsel reasonably acceptable to the Agent;

     (ff) no Casualty and no Condemnation respecting the Property shall have occurred and be continuing and no action shall be pending or threatened by a Governmental Authority to initiate a Condemnation with respect to the Property;

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     (gg) the Lessee shall have caused the HVAC Easement and a lease memorandum (or short form lease) to be delivered to the Agent for the Ground Lease applicable to the Property and, if requested by the Agent, a landlord waiver and a mortgagee waiver regarding the Ground Lease (in each case, in such form as is reasonably acceptable to the Agent);

     (hh) the Lessee shall have caused counsel (reasonably acceptable to the Agent) for the ground lessor of the Property subject to the Ground Lease and regarding the HVAC Easement to have issued to the Agent, its opinion (in form and substance reasonably satisfactory to the Agent), addressed to the Primary Financing Parties and the Agent;

     (ii) as of the Closing Date only, the Agent shall have received (i) tax lien searches and judgment lien searches regarding the Lessee and the Lessor to be conducted (and copies thereof to be delivered to the Agent) in such jurisdictions as determined by the Agent by a nationally recognized search company acceptable to the Agent and (ii) the liens referenced in such lien searches which are reasonably objectionable to the Agent to be either removed or otherwise handled in a manner reasonably satisfactory to the Agent;

     (jj) no law or regulation shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of any Loan or Lessor Advance in accordance with the provisions of the Operative Agreements;

     (kk) the Lessor and the Lessee shall be in compliance with all applicable Laws; and

     (ll) the Lessee shall have delivered, or shall have caused to be delivered, any and all additional documents, certificates or other items as reasonably requested by the Conduit or the Deal Agent.

  5.4. Conditions Precedent for the Lessee, the Agent and the Primary Financing Parties Relating to the Advance of Funds after the Closing Date.

       The obligations of the Lenders to make Loans and the Lessor to make Lessor Advances in connection with all requests for Advances for Project Costs subsequent to the acquisition of the Property, including without limitation a ground lease interest therein (and to pay the Transaction Expenses in connection therewith) are subject to the satisfaction or waiver of the following conditions precedent (to the extent such conditions precedent require the delivery of any agreement, certificate, instrument, memorandum, legal or other opinion, appraisal, commitment, title insurance commitment, lien report or any other document of any kind or type, such shall be in form and substance satisfactory to the Agent, in its reasonable discretion; notwithstanding the foregoing, the obligations of a party shall not be subject to any conditions contained in this Section 5.4 which are required to be performed by such party):

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     (a) the correctness in all material respects on such date of the representations and warranties of the parties to this Agreement contained herein, in each of the other Operative Agreements and in each certificate delivered pursuant to any Operative Agreement, except to the extent any such representation or warranty relates to an earlier date, in which case such representation or warranty shall have been true and correct in all material respects as of such earlier date;

     (b) the performance by the parties to this Agreement of their respective obligations contained in the Operative Agreements in all material respects to be performed on or prior to such date;

     (c) the Agent shall have received a fully executed counterpart of the Requisition, appropriately completed;

     (d) based upon the Construction Budget which shall satisfy the requirements of this Agreement, the sum of the Available Lender Commitments plus the Available Lessor Commitments will be sufficient to complete the Improvements and, after giving effect to such Loan or Lessor Advance, the Available Lender Commitments and Available Lessor Commitments shall not be exceeded;

     (e) there shall not have occurred and be continuing any Default or Event of Default and no Default or Event of Default will have occurred as a result of and after giving effect to the Construction Advance requested by the applicable Requisition;

     (f) the title insurance policies delivered in connection with the requirements of Section 5.3(g) shall provide for (or shall be endorsed to provide for) insurance in an amount at least equal to the maximum total Property Cost indicated by the Construction Budget referred to in subparagraph (d) above (exclusive of the cost of budget items not constituting real property) and the insurance required pursuant to the Agency Agreement shall be in full force and effect;

     (g) the Construction Agent shall have provided the Agent with access to and a right to copy the Construction Documents;

     (h) (i) the Construction Agent shall have delivered to the Agent reasonably satisfactory evidence of the Transaction Expenses referenced in Section 7.1(b) that are to be paid with the Advances and (ii) all Transaction Expenses then due and owing shall have been paid;

     (i) the Construction Agent shall have delivered, or caused to be delivered, to the Agent, documents reasonably requested by the Agent in order to perfect the interest of the Lessor, in each case with regard to any Equipment or other components of the Property then being acquired with the proceeds of the Loans and the Lessor Advances;

     (j) all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of the Operative Agreements shall have been

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paid or provisions for such payment shall have been made to the reasonable satisfaction of the Agent;

     (k) since the date of the most recent audited consolidated financial statements of the Lessee which have been provided to the Agent, there shall not have occurred any event, condition or state of facts which shall have or could reasonably be expected to have a Material Adverse Effect, other than as specifically contemplated by the Operative Agreements;

     (l) in the opinion of the Agent and its counsel, the transactions contemplated by the Operative Agreements do not and will not subject the Financing Parties or the Agent to any adverse regulatory prohibitions, constraints, penalties or fines;

     (m) the Lessee shall have deposited good and immediately available funds, in Permitted Investments, into the Liquid Collateral Account in a sufficient amount so that after giving effect to the requested Advance the Lessee is in compliance with Section 5.11;

     (n) no law or regulation shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of any Loan or Lessor Advance in accordance with the provisions of the Operative Agreements;

     (o) the Lessor and the Lessee shall be in compliance with all applicable laws; and

     (p) the Lessee shall have delivered, or shall have caused to be delivered, any and all additional documents, certificates or other items as reasonably requested by the Conduit or the Deal Agent.

          5.5. Additional Reporting and Delivery Requirements on Completion Date.

          Within thirty (30) days after the Completion Date for the Property (but in no event later than the Completion Date for the Property), the Construction Agent shall deliver to the Agent an Officer’s Certificate in the form attached hereto as EXHIBIT I or in such other form as is reasonably acceptable to the Agent specifying (a) the Completion Date for the Property, (b) that the Property is capable of operation in a commercially reasonable manner as a Permitted Facility, (c) the aggregate Property Cost, and (d) that all representations and warranties of the Construction Agent and Lessee in each of the Operative Agreements and each certificate delivered pursuant thereto are true and correct in all material respects as of the Completion Date. The Agent shall have the right to contest the information contained in such Officer’s Certificate. Furthermore, on or prior to the Completion Date for the Property, the Construction Agent shall deliver or cause to be delivered to the Agent (unless previously delivered to the Agent) the following, each of which shall be in form and substance acceptable to the Agent, in its reasonable discretion: (v) a title insurance endorsement regarding the title insurance policy delivered in connection with the requirements of Section 5.3(g), but only to the extent such

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endorsement is necessary to provide for insurance in an amount at least equal to the maximum total Property Cost (divided between such policy in favor of the Lenders and the Lessor based on the percentages for Advances as set forth in Section 5.2(c)) and, if endorsed, the endorsement shall not include a title change or exception reasonably objectionable to the Agent; (w) an ALTA survey for the Property as built, (x) insurance certificates respecting the Property as required hereunder and under the Lease and (y) if reasonably requested by the Agent, amendments to the Primary Financing Party Financing Statements executed by the appropriate parties. In addition, on the Completion Date, the Construction Agent covenants and agrees that the recording fees, documentary stamp taxes or similar amounts required to be paid in connection with the Mortgage Instrument shall have been paid in an amount required by applicable law.

          5.6. The Construction Agent Delivery of Construction Budget Modifications.

     (a) The Construction Agent covenants and agrees to deliver to the Agent by the fifteenth (15^th) day of each month (and if such day is not a Business Day, then by the next occurring Business Day) notification of any modification to the Construction Budget regarding the Property if such modification increases the cost to construct the Property over the Construction Budget as of the Closing Date; provided no Construction Budget may be increased unless (a) the title insurance policies referenced in Section 5.3(g) are also modified or endorsed, if necessary, to provide for insurance in an amount that satisfies the requirements of Section 5.4(f) and (b) after giving effect to any such amendment, the Construction Budget remains in compliance with the requirements of Section 5.4(d).

     (b) In the event any such modification to the Construction Budget regarding the Property that is not caused by any acts or failure to act of the Construction Agent increases the cost to construct the Property by such amount as would cause the Available Lender Commitments plus the Available Lessor Commitments to be insufficient to complete the Improvements, at the request of the Construction Agent, the Agent shall use all reasonable efforts to find lenders, financial institutions or other institutional investors willing to fund such additional amounts.

          5.7. Restrictions on Liens.

          On the Closing Date, the Construction Agent shall cause the Property to be free and clear of all Liens except those referenced in Sections 6.2(r)(i) and 6.2(r)(ii), such other Liens that are expressly set forth as title exceptions on the title commitment or policy issued under Section 5.3(g) with respect to the Property, Liens for Taxes that are not yet due and payable and such other Liens that have been expressly approved or agreed to by the Agent. On the date the Property is either sold to a third party (other than the Lessee or any Affiliate or designee of the Lessee) in accordance with the terms of the Operative Agreements or, pursuant to Section 22.1(a) of the Lease Agreement, retained by the Lessor, the Lessee shall cause the Property to be free and clear of all Liens (other than Lessor Liens, such other Liens that are expressly set forth as title exceptions on the title commitment or policy issued under Section 5.3(g) with respect to the Property, Liens for Taxes that are not yet due and payable and such other Liens that have been expressly approved or agreed to by the Agent).

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          5.8. [Reserved].

          5.9. [Reserved]

          5.10. Payments.

          All payments of Rent, and other amounts payable to any Financing Party to be made by the Construction Agent or the Lessee under this Agreement or any other Operative Agreements (excluding Excepted Payments which shall be paid directly to the party to whom such payments are owed) shall be made to the Agent at the office designated by the Agent from time to time by written notice as provided herein in Dollars and in immediately available funds, without setoff, deduction, or counterclaim. Subject to the definition of “Interest Period” in Appendix A attached hereto, whenever any payment under this Agreement or any other Operative Agreements shall be stated to be due on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time in such case shall be included in the computation of Interest and fees payable pursuant to the Operative Agreements, as applicable and as the case may be.

          5.11. Liquid Collateral.

     (a) On the Closing Date, the Lessee shall pledge to the Agent, for the benefit of the Secured Parties, as security for the Obligations of the Lessee, by delivery to the Intermediary for depositing into the Liquid Collateral Account, Liquid Collateral in an amount such that (i) the Adjusted Market Value, in the case of Properly Margined Liquid Collateral or (ii) the Fair Market Sales Value, in the case of Non-Properly Margined Liquid Collateral (with respect to the foregoing subsections (i) and (ii) in which the Agent, for the benefit of the Secured Parties, has a first priority perfected security interest) shall be greater than or equal to the Required Liquid Collateral Amount.

     (b) The Lessee shall cause all Pledged Securities in the Liquid Collateral Account and the Punch List Liquid Collateral Account at all times to satisfy the requirements for Liquid Collateral. Unless the Operative Agreements otherwise require that the obligations of the Lessee under the Operative Agreements be secured with Properly Margined Liquid Collateral, the Lessee shall have the right to secure its obligations under the Operative Agreements with either Properly Margined Liquid Collateral or Non-Properly Margined Liquid Collateral. The Lessee may change its election of Properly Margined Liquid Collateral or Non-Properly Margined Liquid Collateral by written notice delivered to the Agent within the first fifteen (15) days of each March, June, September and December, and any such change in its election will be effective as of the first Business Day of the next following month.

     (c) (i) (A) Prior to the date of Final Completion, the Lessee shall at all times ensure that and (B) the Agent shall have the right at any time, and from time to time upon delivery to the Lessee of a demand given by telephone or fax (and confirmed in writing) (an “Additional Collateral Demand”), to require the Lessee to transfer

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additional Permitted Investments (the “Additional Liquid Collateral”) to the Liquid Collateral Account by the Additional Collateral Delivery Date to ensure that (1) the Adjusted Market Value, in the case of Properly Margined Liquid Collateral, or (2) the Fair Market Sales Value, in the case of Non-Properly Margined Liquid Collateral (with respect to the foregoing subsections (1) and (2) in which the Agent, for the benefit of the Secured Parties, has a first priority perfected security interest) shall be greater than or equal to the Required Liquid Collateral Amount; provided, that after taking into account a transfer of Pledged Securities the Liquid Collateral Account shall satisfy and at all times thereafter satisfy the Concentration Limits. Additionally, upon each release of Liquid Collateral from the Punch List Liquid Collateral Account as described in Section 5.15, the Lessee shall be obligated immediately to deposit additional Liquid Collateral into the Liquid Collateral Account so that sufficient Liquid Collateral is at all times prior to the date of Final Completion on deposit in the Liquid Collateral Account to satisfy the requirements described in this Section 5.11(c)(i) (regardless of whether any Additional Collateral Demand has been made).

     (ii) Without limiting Section 5.11(c)(i) above the Lessee shall transfer such Additional Liquid Collateral to the Liquid Collateral Account by the Additional Collateral Delivery Date to ensure that (A) the Adjusted Market Value, in the case of Properly Margined Liquid Collateral, or (B) the Fair Market Sales Value, in the case of Non-Properly Margined Liquid Collateral (with respect to the foregoing subsections (A) and (B) in which the Agent, for the benefit of the Secured Parties, has a first priority perfected security interest) shall be greater than or equal to the applicable Required Liquid Collateral Amount.

     (d) Pursuant to the Liquid Collateral Agreements, the Agent shall have the right to direct the reinvestment of any Pledged Securities credited to the Liquid Collateral Account upon the maturity of such Pledged Securities or prior thereto into one or more Permitted Investments constituting Liquid Collateral.

     (e) The parties hereto acknowledge and agree that (i) any Permitted Investments transferred to the Liquid Collateral Account pursuant to Sections 5.11(a), 5.11(c) or 5.11(d) or otherwise shall be deemed Pledged Securities for the purposes of this Agreement, (ii) on any transfer date, the Agent shall instruct the Lessee and the Intermediary to take or cause to be taken, and the Lessee and the Intermediary shall take or cause to be taken, at the Lessee’s sole cost and expense, such action as is necessary to create in the Lessor a valid perfected first priority security interest on such date in such Pledged Securities, and (iii) on any transfer date, the Agent shall instruct the Lessee, the Lessor and the Intermediary to take or cause to be taken, and the Lessee, the Lessor and the Intermediary shall take or cause to be taken, at the Lessee’s sole cost and expense, such action as is necessary to create in the Agent a valid perfected first priority security interest on such date in the Lessor’s right, title and interest in, to and under such Pledged Securities. Without limiting the foregoing, the Agent is hereby authorized to complete Exhibit K hereto upon acquisition of such Pledged Securities and deposit of same into the Liquid Collateral Account.

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     (f) To the extent no Lease Default or Lease Event of Default shall have occurred and be continuing and to the extent the Liquid Collateral in the Liquid Collateral Account has an Adjusted Market Value (in the case of Properly Margined Liquid Collateral) or a Fair Market Sales Value (in the case of Non-Properly Margined Liquid Collateral) in excess of the Required Liquid Collateral Amount, the Lessee may request the Agent to cause some or all of such excess Liquid Collateral to be released from the Liquid Collateral Account and the lien of the Security Documents. In such case, the Agent shall instruct the Intermediary to release such specified excess Liquid Collateral to the Lessee or pursuant to the instruction of the Lessee.

          5.12. Unilateral Right to Increase the Lessor Commitments and the Lender Commitments.

          At the request of the Lessee or the Construction Agent and in connection with a Requisition, (a) after an increase in the Lessor Commitments has been approved in accordance with Section 12.4, the Lessor, in its sole discretion, may unilaterally elect to increase its Lessor Commitment and (b) after an increase in the Lender Commitments has been approved in accordance with Section 12.4, each Investor, in its sole discretion, may unilaterally elect to increase its Lender Commitment.

          5.13. Lessee’s Right to Request Assignment of Mortgage Notes.

          On a one time basis after the Closing Date, the Lessee may request the Lenders (and if so requested, the Lenders shall use all reasonable efforts to comply) to assign some or all of (a) their then current Mortgage Loans, (b) in the case of the Investors, their then current Mortgage Loan Commitments and (c) (subject to this Section 5.13) associated right, title and interest as a Mortgage Lender pursuant to the Operative Agreements to one or more institutional investors identified by the Lessee. Such arrangement shall be accomplished in accordance with Section 10 of this Agreement. In connection with such assignment, the assignee and/or the Lessee (as determined between such parties) shall pay the Lenders all principal, Interest, fees and all other amounts then due and owing pursuant to the Operative Agreements in regard to the interest of the Lenders then being assigned, and the Lenders (notwithstanding such assignment) shall retain their rights and benefits pursuant to the Operative Agreements as Indemnified Persons regarding matters arising on or prior to the effective date of such assignment.

          5.14. Lease Commencement Upon Completion.

          Unless the Agency Agreement has been terminated as a result of an Agency Event of Default, the parties hereto acknowledge and agree that upon the occurrence of Completion, the Property shall automatically, without further act or notice by any Person, become subject to, and shall be leased by Lessor to Lessee under, the Lease.

          5.15. Funding of Punch List Liquid Collateral Account for Punch List Items.

          Prior to the submission by the Construction Agent of the Officer’s Certificate referenced in Section 5.5 regarding Completion of the Property, the Construction Agent shall submit a

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Requisition for a Construction Advance to cover all anticipated punch list items necessary for Final Completion of the Property. To the extent the conditions precedent set forth in Section 5.4 are satisfied or waived and prior to the termination of the Lender Commitments and the Lessor Commitments for the Property, the above-described Construction Advance shall be funded in accordance with the terms of the Operative Agreements into the Punch List Liquid Collateral Account, converted into Liquid Collateral and shall be subject to the Lien of the Punch List Liquid Collateral Agreements.

     Thereafter, the Construction Agent shall request funding for punch list items regarding the Property pursuant to a request for funding in form and substance reasonably satisfactory to the Agent describing the punch list items and the amounts payable therefor. Upon satisfaction of the conditions precedent set forth in Section 5.4 with regard to each such request for funding, the Agent shall request the Intermediary to release Liquid Collateral as identified by the Construction Agent from the Punch List Liquid Collateral Account to fund such request for funding; provided, the amount of Liquid Collateral to be so released shall not exceed the aggregate amount of Liquid Collateral so deposited and retained in the Punch List Liquid Collateral Account pursuant to this Section 5.15). Upon each such release of Liquid Collateral from the Punch List Liquid Collateral Account, the Lessee shall be obligated immediately to replenish the Liquid Collateral Account with Liquid Collateral so that sufficient Liquid Collateral is at all times on deposit in the Liquid Collateral Account to satisfy the requirements described in Section 5.11(c)(i) (regardless of whether any Additional Collateral Demand has been made).

     All amounts deposited in the Punch List Liquid Collateral Account pursuant to this Section 5.15 from time to time shall constitute Advances for purposes of determining the Property Cost from the date of such Advance by the Lenders and the Lessor for deposit into the Punch List Liquid Collateral Account.

     5.16 Overdue Amounts.

     Unless otherwise expressly stated pursuant to any Operative Agreement, all amounts not paid when due and owing pursuant to any Operative Agreement shall bear Interest at the Overdue Rate from and including the due date for such amount to but excluding the date such amount is actually paid.

     5.17 Cap on Construction Advance for Construction Agent Reimbursement.

     So long as no Full Recourse Event of Default is continuing and provided the conditions precedent set forth in Sections 5.4(c), 5.4(f), 5.4(g), 5.4(h)(ii) and 5.4(m) are satisfied (even if any or all of the other conditions precedent under Section 5.4 are not satisfied at that time), the Lessor and the Lenders shall make their respective Advances (subject to the Advance Cap) for each Construction Advance in accordance with the applicable Requisition (in order to reimburse the Construction Agent for amounts previously paid by the Construction Agent which are eligible for reimbursement by Advances but have not been so reimbursed) up to an aggregate amount for all such Construction Advances not to exceed $10,000,000 (the “Advance Cap”).

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SECTION 5A. LESSOR ADVANCE.

      5A.1. Procedure for Lessor Advance.

     (a) Upon receipt from the Construction Agent by the Agent of a Requisition pursuant to Section 4.2, and subject to the terms and conditions of this Agreement, the Lessor shall make an Advance under the Lessor Commitment equal to six percent (6%) of the amount requested in such Requisition on the Closing Date or on the date for any Construction Advance. The Lessor Advance shall be based on the Eurodollar Rate or the ABR, as designated by the Construction Agent in the Requisition.

     (b) To the extent that the Borrower shall have elected to terminate or reduce the amount of the Lender Commitments pursuant to Section 2.5(a) of a Credit Agreement, a pro rata election shall be deemed to have been made with respect to the Lender Commitment pursuant to Section 2.5(a) of the other Credit Agreement and with respect to the Lessor Commitments. On any date on which the Lender Commitments shall be reduced to zero (0) as a result of a Credit Agreement Event of Default (except for any Credit Agreement Event of Default which relates solely to the Lessor and does not relate to the Lessee, the Property or any other matter), the Lessor Commitments shall automatically be reduced to zero (0), and the Lessee shall prepay the Lessor Advances in full, together with accrued but unpaid Lessor Yield thereon and all other amounts owing to the Lessor under the Operative Agreements.

      5A.2. Lessor Yield.

     (a) The Lessor Advance shall bear yield calculated at the rate of Lessor Yield applicable from time to time. The Lessee shall pay as Basic Rent to the Agent for distribution to the Lessor the Lessor Yield in arrears on each Payment Date or as otherwise provided herein or in Section 8.7 of this Agreement.

     (b) If all or a portion of Lessor Yield shall not be received by the Lessor (or the Agent on behalf of the Lessor) when due (whether at the stated maturity, by acceleration or otherwise) for any reason other than the failure of the Lessor to fund a Lessor Advance in regard to the payment of such Lessor Yield at a time when the conditions precedent under the Operative Agreements have been satisfied in connection with such funding, such overdue amount shall, without limiting the rights of the Lessor hereunder or under any other Operative Agreement, bear interest at the Lessor Overdue Rate, in each case from the date of nonpayment until paid (whether after or before judgment) and shall be paid upon demand. Upon the occurrence and during the continuation of any Event of Default, Lessor Yield shall be calculated at the Lessor Overdue Rate.

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      5A.3. Scheduled Return of Lessor Advance.

The outstanding amount of the Lessor Advance shall be due in full on the Expiration Date. On the Expiration Date, subject to the terms of this Agreement and subject to the rights of the Lessee in connection with its election of the Sale Option in accordance with the Operative Agreements (including without limitation relating to the Maximum Residual Guarantee Amount), the Lessor (or the Agent on behalf of the Lessor) shall receive from the Lessee as Basic Rent under the Lease the outstanding amount of the Lessor Advance then due, together with all accrued but unpaid Lessor Yield and all other amounts due to Lessor under the Operative Agreements.

      5A.4. Early Return of Lessor Advance.

     (a) Subject to Sections 11.2(e), 11.3 and 11.4 of this Agreement, the Lessor Advance may at any time and from time to time be prepaid by the Lessee as a payment of Supplemental Rent, in whole or in part, without premium or penalty, upon at least three (3) Business Days’ irrevocable notice to the Agent, on behalf of the Lessor, specifying the date and amount of prepayment of the Lessor Advance. Upon receipt of such notice, the Agent shall promptly notify the Lessor thereof. If such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Amounts prepaid shall not be re-advanced.

     (b) If on any date the Agent or the Lessor shall receive any payment in respect of (i) any Casualty, Condemnation or Environmental Violation pursuant to Sections 15.1(a), 15.1(g) or 15.2 or Article XVI of the Lease (excluding any payments in respect thereof which are payable to Lessee in accordance with the Lease), or (ii) the Termination Value of the Property in connection with the delivery of a Termination Notice pursuant to Article XVI of the Lease, or (iii) the Termination Value of the Property or such other applicable amount in connection with the exercise of a Purchase Option under Article XX of the Lease or the exercise of the option of the Lessor to transfer the Property to the Lessee pursuant to Section 20.3 of the Lease, then in each case, the Agent or the Lessor shall receive such payment to be distributed in accordance with Section 8.7(b) of this Agreement.

     (c) Each prepayment of the Lessor Advances pursuant to Section 5A.4(a) shall be allocated to reduce the Property Cost based on the then current Property Cost immediately before giving effect to such prepayment. Each prepayment of the Lessor Advances pursuant to Section 5A.4(b) shall be allocated to reduce the Property Cost immediately before giving effect to such prepayment.

     (d) Each prepayment of the Lessor Advances (including without limitation pursuant to Sections 5A.4(a), 5A.4(b) or 5A.4(c)) shall be made on a Scheduled Interest Payment Date.

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5A.5. Conversion and Continuation Options.

     (a) Subject to Section 5A.5(c), the Lessee may elect from time to time to convert Eurodollar Lessor Advances to ABR Lessor Advances by giving the Lessor at least three (3) Business Days’ prior irrevocable notice of such election, provided, that any such conversion may only be made on the last day of an Interest Period with respect thereto, and provided, further, to the extent an Event of Default has occurred and is continuing on the last day of any such Interest Period, the applicable Eurodollar Lessor Advances shall automatically be converted to ABR Lessor Advances. Subject to Section 5A.5(c), the Lessee may elect from time to time to convert ABR Lessor Advances to Eurodollar Lessor Advances by giving the Lessor at least three (3) Business Days’ prior irrevocable notice of such election. All or any part of outstanding Lessor Advance may be converted as provided herein, provided, that (i) no ABR Lessor Advance may be converted into a Eurodollar Lessor Advance after the date that is one (1) month prior to the Expiration Date and (ii) such notice of conversion regarding any Eurodollar Lessor Advance shall contain an acknowledgment of the Lessee (subject to Section 5A.5(c)) of the requirements set forth in the definition of the term “Interest Period” including without limitation subparagraphs (A) through (D) thereof. The provisions of this Section 5A.5 are subject to Section 8.3(bb) of this Agreement.

     (b) Subject to the restrictions of Sections 5A.1 and 8.3(bb) of this Agreement, any Eurodollar Lessor Advance may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Lessee (subject to Section 5A.5(c)) giving irrevocable notice to the Lessor, in accordance with the applicable notice provision for the conversion of ABR Lessor Advances to Eurodollar Lessor Advances set forth herein, provided, that no Eurodollar Lessor Advance may be continued as such after the date that is one (1) month prior to the Expiration Date, provided, further, no Eurodollar Lessor Advance may be continued as such if an Event of Default has occurred and is continuing as of the last day of the Interest Period for such Eurodollar Lessor Advance, and provided, further, that if the Lessee (subject to Section 5A.5(c)) shall fail to give any required notice as described above or otherwise herein, or if such continuation is not permitted pursuant to the preceding proviso, such Eurodollar Lessor Advance shall automatically be converted to an ABR Lessor Advance on the last day of such then expiring Interest Period.

     (c) The rights of the Lessee in this Section 5A.5 are subject to there being no Lease Default or Lease Event of Default that has occurred and is continuing at the time any such right is to be exercised. To the extent any Lease Default or Lease Event of Default has occurred and is continuing (and unless Lessor otherwise agrees in writing), any outstanding Eurodollar Lessor Advance will be converted into an ABR Lessor Advance at the end of the applicable Interest Period, and any ABR Lessor Advance will be continued as such. The rights of the Lessee shall be restored upon the cure or waiver of any such Lease Default or Lease Event of Default in accordance with the Operative Agreements.

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5A.6. Computation of Lessor Yield.

     (a) Lessor Yield shall be calculated on the basis of a year of three hundred sixty (360) days for the actual days elapsed. Any change in the Lessor Yield resulting from a change in the Eurodollar Reserve Requirement shall become effective as of the opening of business on the day on which such change becomes effective.

     (b) Pursuant to Section 12.12 of this Agreement, the calculation of Lessor Yield under this Section 5A.6 shall be made by the Agent. Each determination of Lessor Yield by the Agent shall be conclusive and binding absent demonstrable error.

     (c) If the Eurodollar Rate cannot be determined by the Agent in the manner specified in the definition of the term “Eurodollar Rate”, then commencing on the Payment Date next occurring and continuing until such time as the Eurodollar Rate can be determined by the Agent in the manner specified in the definition of such term, the outstanding Lessor Advance shall bear a yield at the ABR.

SECTION 6. REPRESENTATIONS AND WARRANTIES.

     6.1. Representations and Warranties of the Borrower.

     The Borrower represents and warrants to each of the other parties hereto that as of the Closing Date and the date of each Advance (except to the extent that any such representation or warranty relates to an earlier date, including without limitation representation and warranty in Section 6.1(r)):

     (a) It is a corporation duly organized and validly existing and in good standing under the laws of the State of North Carolina and has the power and authority to enter into and perform its obligations under each of the Operative Agreements to which it is or will be a party and each other agreement, instrument and document to be executed and delivered by it on or before the Closing Date in connection with or as contemplated by each such Operative Agreement to which the Borrower is or will be a party, and is a multi-purpose, Wholly-Owned Entity of Wachovia Corporation;

     (b) The execution, delivery and performance of each Operative Agreement to which it is or will be a party has been duly authorized by all necessary action on its part and neither the execution and delivery thereof, nor the consummation of the transactions contemplated thereby, nor compliance by it with any of the terms and provisions thereof (i) does or will require any approval or consent of any trustee or holders of any of its indebtedness or obligations or any other consent or approval that has not previously been obtained, (ii) does or will contravene any Legal Requirement, (iii) does or will contravene or result in any breach of or constitute any default under, or result in the creation of any Lien upon any of its property under, (A) its charter or by-laws, or (B) any indenture, mortgage, chattel mortgage, deed of trust, conditional sales contract, bank loan or credit agreement or other agreement or instrument to which it is a party or by which it

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or its properties may be bound or affected, which contravention, breach, default or Lien under clause (B) could reasonably be expected to materially and adversely affect its ability to perform its obligations under the Operative Agreements to which it is a party or would question the validity or enforceability of any of the Operative Agreements to which it is or will become a party or (iv) does or will require any Governmental Action by any Governmental Authority;

     (c) Each Operative Agreement to which the Borrower is or will be a party have been, or on or before the Closing Date or the date of Advance will be, duly executed and delivered by the Borrower, and each Operative Agreement to which the Borrower is a party constitutes, or upon execution and delivery will constitute, a legal, valid and binding obligation enforceable against the Borrower in accordance with the terms thereof;

     (d) There is no action or proceeding pending or, to its knowledge, threatened to which it is or will be a party before any Governmental Authority that, if adversely determined, would materially and adversely affect its ability to perform its obligations under the Operative Agreements to which it is a party or would question the validity or enforceability of any of the Operative Agreements to which it is or will become a party;

     (e) The Borrower has not assigned or transferred any of its right, title or interest in or under the Lease, the Agency Agreement or its interest in the Property or any portion thereof, except in accordance with the Operative Agreements;

     (f) No Default or Event of Default under the Operative Agreements attributable to it has occurred and is continuing;

     (g) Except as otherwise contemplated in the Operative Agreements, the proceeds of the Advances shall not be applied by the Borrower for any purpose other than the acquisition, installation and testing of the Equipment, the repair, replacement, renovation and/or construction of Improvements and the payment of Capitalized Costs, in each case which accrue prior to the Commencement Date with respect to the Property; provided, the amounts advanced by the Primary Financing Parties in connection with their obtaining of the various interests pursuant to the Master Transfer Agreement as referenced in Section 1 shall be deemed to be permitted Advances for all purposes of the Operative Agreements;

     (h) Neither the Borrower nor any Person authorized by the Borrower to act on its behalf has offered or sold any interest in the Borrower’s Interest or the Notes, or in any similar security relating to the Property, or in any security the offering of which for the purposes of the Securities Act would be deemed to be part of the same offering as the offering of the aforementioned securities to, or solicited any offer to acquire any of the same from, any Person other than, in the case of the Notes, the Agent, the Lenders and other accredited investors (as such term is defined in the Securities Act), and neither the Borrower nor any Person authorized by the Borrower to act on its behalf will take any action which would subject, as a direct result of such action alone, the issuance or sale of

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any interest in the Borrower’s Interest or the Notes to the provisions of Section 5 of the Securities Act or require the qualification of any Operative Agreement under the Trust Indenture Act of 1939, as amended;

     (i) The location of the Borrower for purposes of the UCC is North Carolina. The Borrower’s principal place of business, chief executive office and office where the documents, accounts and records relating to the transactions contemplated by this Agreement and each other Operative Agreement are kept are located at One Wachovia Center, 301 South College Street, Charlotte, Mecklenburg County, North Carolina 28288;

     (j) The Borrower is not engaged principally in, and does not have as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U), and no part of the proceeds of the Loans or the Lessor Advances will be used by it to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent with, the provisions of Regulations T, U, or X;

     (k) The Borrower is not an “investment company” or a company controlled by an “investment company” within the meaning of the Investment Company Act;

     (l) The Property is free and clear of all Lessor Liens attributable to the Lessor;

     (m) [Reserved];

     (n) The Borrower’s true legal name as registered in the jurisdiction of its organization is Wachovia Development Corporation and its Federal Employer Identification Number is 56-1610288. The Borrower does not use, or transact any business under, any trade name other than its legal name;

     (o) The Borrower has filed all tax returns and all other material reports that are required under applicable Law to be filed by it and has paid all taxes or other charges of any Governmental Authority due pursuant to such returns or other reports, except for any taxes or other charges that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside on the books and records of the Borrower;

     (p) No Governmental Action by any Governmental Authority or other authorization, registration, consent, approval, waiver, notice or other action by, to or of any other Person pursuant to any Legal Requirement or any contract, indenture, instrument or agreement or for any other reason is required to authorize or is required in connection with (i) the execution, delivery or performance by the Borrower of any Operative Agreement to which the Borrower is a party or (ii) the legality, validity, binding effect or enforceability against the Borrower of any Operative Agreement to which the Borrower is a party, in each case, except those which have been obtained and

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are in full force and effect or those which the failure to obtain could not reasonably be expected to have a Material Adverse Effect;

     (q) The Borrower is not in default with respect to any judgment, order, writ, injunction, decree or decision of any Governmental Authority which default could reasonably be expected to have a material adverse effect on its ability to satisfy its obligations pursuant to the Operative Agreements. The Borrower is complying in all material respects with all Laws applicable to it, unless a violation of any such law could not reasonably be expected to have a material adverse effect on its ability to satisfy its obligations pursuant to the Operative Agreements; and

     (r) As of the Closing Date only, the fair value of the business and assets of the Borrower (including without limitation contingent, unmatured, and unliquidated claims arising out of all rights of indemnity, contribution, reimbursement, or any similar right) will be in excess of the amount that will be required to pay its liabilities (including without limitation contingent, subordinated, unmatured, and unliquidated liabilities on existing debts, as such liabilities may become absolute and matured), in each case after giving effect to the transactions contemplated by this Agreement and the use of proceeds therefrom.

     6.2. Representations and Warranties of the Lessee.

     The Lessee represents and warrants to each of the other parties hereto that as of the Closing Date and the date of each Advance (except to the extent that any such representation or warranty relates to an earlier date):

     (a) The Lessee and each Subsidiary of the Lessee is duly organized or formed and validly existing in good standing under the laws of the jurisdiction of its incorporation or formation, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business makes such qualification necessary, and has all requisite corporate power and authority to own its properties and to carry on its business as now conducted, except in the case of Subsidiaries where the failure to be so organized, formed, validly existing or qualified, or to be in such good standing or to have such power and authority, or to own such properties, or to carry on such business, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect;

(b) (i) The Lessee has the power and authority to enter into and perform its obligations under the Operative Agreements to which it is a party or will be a party and has the corporate power and authority to act in its various capacities under the Operative Agreements;

     (ii) The execution and delivery by the Lessee of this Agreement and the other applicable Operative Agreements to which the Lessee is a party as of such date and the performance by the Lessee of its obligations under this Agreement and the other applicable Operative Agreements to which the Lessee is a party are

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within the corporate powers of the Lessee, have been duly authorized by all necessary corporate action on the part of the Lessee (including without limitation any necessary shareholder action), have been duly executed and delivered, have received all necessary governmental approval, and do not and will not (A) violate any Legal Requirement which is binding on the Lessee, (B) contravene or conflict with, or result in a breach of, any provision of the articles of incorporation, by-laws or other organizational documents of the Lessee or of any agreement, indenture, instrument or other document which is binding on the Lessee or (C) result in, or require, the creation or imposition of any Lien (other than pursuant to the terms of the Operative Agreements) on any asset of the Lessee;

     (c) This Agreement and the other applicable Operative Agreements to which the Lessee is a party, executed prior to or as of such date by the Lessee, constitute the legal, valid and binding obligation of the Lessee, enforceable against the Lessee, in accordance with their terms except as the same may be limited by applicable bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors’ or lessors’ rights generally and general principles of equity;

     (d) Except as set forth on EXHIBIT J, there are no actions, suits or proceedings pending or, to Lessee’s knowledge, threatened against the Lessee or any of its Subsidiaries in any court or before any Governmental Authority (nor shall any order, judgment or decree have been issued or, to the knowledge of the Lessee, proposed to be issued by any Governmental Authority against the Lessee to set aside, restrain, enjoin or prevent the full performance of any Operative Agreement or any transaction contemplated thereby) that (i) concern the Property or Lessee’s interest therein, (ii) question the validity or enforceability of any Operative Agreement to which the Lessee is a party or the overall transaction described in the Operative Agreements to which the Lessee is a party or (iii) have or could reasonably be expected to have a Material Adverse Effect;

     (e) No Governmental Action by any Governmental Authority or other authorization, registration, consent, approval, waiver, notice or other action by, to or of any other Person pursuant to any Legal Requirement or any contract, indenture, instrument or agreement or for any other reason is required to authorize or is required in connection with (i) the execution, delivery or performance by the Lessee of any Operative Agreement to which the Lessee is a party, (ii) the legality, validity, binding effect or enforceability against the Lessee of any Operative Agreement to which the Lessee is a party, (iii) the acquisition, ownership, construction, completion, occupancy, operation, leasing or subleasing by the Lessee of the Property or (iv) the Construction Agent’s request for any Advance, in each case, except those which have been obtained and are in full force and effect or those which the failure to obtain could not reasonably be expected to have a Material Adverse Effect;

     (f) Upon the execution and delivery of the Lease Supplement to the Lease, (i) the Lessee will have unconditionally accepted the Property subject to the Lease

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Supplement, and (ii) no offset will exist with respect to any Rent or other sums payable under the Lease;

     (g) The Lessee is not in default in any respect under any contract, lease, loan agreement, indenture, mortgage, security agreement or other agreement or obligation to which it is a party or by which any of its properties is bound which default could have a Material Adverse Effect;

     (h) All information with respect to Lessee or any of its Affiliates heretofore or contemporaneously herewith furnished in writing by Lessee (or any of its Affiliates) to the Agent or any Primary Financing Party for purposes of or in connection with any Operative Agreement and the transactions contemplated hereby is true and accurate in every material respect on the date as of which such information is dated or certified, and such information, taken as a whole, does not omit to state any material fact necessary to make such information, taken as a whole, not misleading;

     (i) The location of the Lessee for purposes of the UCC is Delaware. The principal place of business, chief executive office and office of the Lessee where the documents, accounts and records relating to the transactions contemplated by this Agreement and each other Operative Agreement are kept are located at 9410 Key West Avenue, Rockville, Maryland 20850;

     (j) The representations and warranties of the Lessee set forth in any of the Operative Agreements are true and correct. There exists no Default or Event of Default under any of the Operative Agreements attributable to it which is continuing and which has not been cured within any cure period expressly granted under the terms of the applicable Operative Agreement or otherwise waived in accordance with the applicable Operative Agreement;

     (k) The Property being financed consists of Land, existing Improvements thereon and Equipment which Improvements will be completed in accordance with the terms of the Operative Agreements;

     (l) The Lessor has good and marketable title to and fee simple ownership of the Improvements and the Equipment, a valid, enforceable interest pursuant to the Appurtenant Rights and a valid ground leasehold interest in the Land enforceable against the Ground Lessor in accordance with the Ground Lease, subject regarding each of the foregoing only to (i) such Liens referenced in Sections 5.3(g), 6.2(r)(i) and 6.2(r)(ii) on the Closing Date and (ii) subject to Section 5.7, Permitted Liens and Lessor Liens after the Closing Date;

     (m) No portion of the Property is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, or if the Property is located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, then flood insurance has been obtained for the Property in accordance with the Agency Agreement

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and the Lease and in accordance with the National Flood Insurance Act of 1968, as amended;

     (n) The Property, the Plans and Specifications and the use and operation of the Property by the Lessee shall at all times comply with (i) all Legal Requirements (including without limitation all zoning and land use laws and Environmental Laws), except to the extent that failure to comply therewith, individually or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect and (ii) all Insurance Requirements (unless the failure to comply will not result in a denial of coverage under any insurance policy required pursuant to the Operative Agreements);

     (o) All utility services and facilities necessary for the construction and operation of the Improvements and the installation and operation of Equipment (including without limitation gas, electrical, water and sewage services and facilities) are available at the applicable Land and will be contracted or installed prior to the Completion Date;

     (p) Regarding the Property, all consents, licenses, permits, authorizations, assignments and building permits required by any applicable Legal Requirement or pursuant to the terms of any contract, indenture, instrument or agreement have been obtained and are in full force and effect, except to the extent that the failure to so obtain, individually or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect;

     (q) None of the Improvements encroach in any manner onto any adjoining land (except as permitted by express written easements, which have been approved by the Agent such approval not to be unreasonably withheld). Upon completion of the Improvements for the Property in accordance with the Plans and Specifications thereof, such Improvements will be within any building restriction lines and will not encroach in any manner onto any adjoining land (except as permitted by express written easements, which have been approved by the Agent in the exercise of its reasonable discretion);

     (r) (i) The Security Documents create, as security for the Obligations, valid and enforceable security interests in, and Liens on, all of the Collateral, in favor of the Agent, for the benefit of the Secured Parties and such security interests and Liens are subject to no other Liens other than Liens that are expressly set forth as title exceptions on the title commitment issued in accordance with Section 5.3(g) with respect to the Property and after the Closing Date (subject to Section 5.7) Permitted Liens and Lessor Liens; and

     (ii) The Lease Agreement creates, as security for the obligations of the Lessee under the Lease Agreement, valid and enforceable, perfected security interests in, and Liens on, the Property leased thereunder, in favor of the Lessor, and such security interests and Liens are subject to no other Liens other than Liens that are expressly set forth as title exceptions on the title commitment

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issued in accordance with Section 5.3(g) with respect to the Property and the Closing Date (subject to Section 5.7), Permitted Liens and Lessor Liens;

     (s) (i) Neither Lessee nor any Subsidiary of Lessee is engaged principally, or as one of its more important activities, in the business of extending credit for the purposes of buying or carrying Margin Stock (as defined in Regulation U); and

     (ii) No part of the proceeds of any Advance will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board including Regulation T, U or X;

     (t) The Lessee shall at all times cause the Lessor to have good and marketable title to and fee simple ownership of the Improvements and the Equipment, a valid, enforceable interest pursuant to the Appurtenant Rights and a valid ground leasehold interest in the Land enforceable against the Ground Lessor in accordance with the Ground Lease subject regarding each of the foregoing only to (i) such Liens referenced in Sections 5.3(g), 6.2(r)(i) and 6.2(r)(ii) on the Closing Date and (ii) subject to Section 5.7, Permitted Liens and Lessor Liens after the Closing Date;

     (u) The issuance, sale and delivery of the Notes and the interests in the Operative Agreements under the circumstances contemplated hereby do not require the registration or qualification of such Notes or interests under the Securities Act, any state securities laws, or the Trust Indenture Act of 1939. Neither Lessee nor anyone authorized to act on the Lessee’s behalf has, directly or indirectly, solicited any offers to acquire, offered or sold: (i) any interest in the Notes, the Property, the Lease or the Operative Agreements in violation of Section 5 of the Securities Act or any state securities laws, or (ii) any interest in any security or lease the offering of which, for purposes of the Securities Act or any state securities laws, would be deemed to be part of the same offering as the offering of the aforementioned interests. Neither the Lessee nor anyone authorized to act on its behalf was involved in (y) offering or soliciting offers for the Notes (or any similar securities) or (z) selling Notes (or any similar securities) to any Person other than an “accredited investor” (as such term is defined in the Securities Act);

     (v) The Property is located in Montgomery County, Maryland. No notices, complaints or orders of violation or non-compliance or liability have been issued to the Lessee or, to the best of its knowledge, threatened by any Person with respect to the Property or the present or intended future use thereof, except for such violations and instances of non-compliance as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and the Lessee is not aware of any circumstances which could give rise to the issuance of any such notices, complaints or orders;

     (w) To the best knowledge of the Lessee, the Property has been acquired at a price that is not in excess of fair market value;

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     (x) The consolidated balance sheet and income statement of the Lessee and its Consolidated Subsidiaries as of March 31, 2003, together with related consolidated statements of operations and retained earnings and of cash flows as of March 31, 2003, fairly present in all material respects the consolidated financial condition of the Lessee and its Consolidated Subsidiaries as at such dates and the consolidated results of the operations of the Lessee and its Consolidated Subsidiaries for the period ended on such dates, all in accordance with GAAP, subject with respect to the March 31, 2003 financial statements, to changes resulting from audit and normal year end audit adjustments;

     (y) Neither the Lessee nor any of its Subsidiaries is in default with respect to any judgment, order, writ, injunction, decree or decision of any Governmental Authority which default could reasonably be expected to have a Material Adverse Effect. Each of the Lessee and its Subsidiaries is complying in all material respects with all Laws applicable to it, a violation of which could reasonably be expected to have a Material Adverse Effect;

     (z) Each of the Lessee and its Subsidiaries has filed or caused to be filed all tax returns required to be filed and has paid, or has made adequate provision for the payment of, all taxes shown to be due and payable on said returns or in any assessments made against it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Lessee or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect;

     (aa) The Lessee is not subject to any statute or regulation which prohibits the incurrence of indebtedness under this Agreement or the other Operative Agreements;

     (bb) (i) As of the Closing Date only, there has been no material adverse change in the consolidated assets, liabilities, operations, business or conditions (financial or otherwise) of the Lessee and its Consolidated Subsidiaries taken as a whole from that set forth in the financial statements referenced in Section 6.2(x) and (ii) as of the date of each Advance after the Closing Date, there has been no change in the assets, liabilities, operations, business or conditions (financial or otherwise) of the Lessee which could reasonably be expected to result in a Material Adverse Effect;

     (cc) The execution and delivery of the Operative Agreements will not involve any transaction that is subject to the prohibitions of Section 406 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code;

     (dd) The Lessee’s true legal name as registered in the jurisdiction of its organization is “Human Genome Sciences, Inc.,” and its organizational identification number assigned by the State of Delaware is 2302223 (Del). Lessee does not use, or transact any business under, any trade name other than its legal name;

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     (ee) As of the Completion Date only, the Property shall be improved substantially in accordance with the applicable Plans and Specifications (including all construction finish outs and modifications to the Property) in a good and workmanlike manner and shall be operational;

     (ff) Neither a Reportable Event nor an “accumulated funding deficiency” (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan, and each Plan has complied in all material respects with the applicable provisions of ERISA and the Code, except to the extent that any such occurrence or failure to comply would not reasonably be expected to have a Material Adverse Effect. No termination of a Single Employer Plan has occurred resulting in any liability that has remained underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period which could reasonably be expected to have a Material Adverse Effect. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by an amount which, as determined in accordance with GAAP, could reasonably be expected to have a Material Adverse Effect. Neither the Lessee nor any ERISA Affiliate is currently subject to any liability for a complete or partial withdrawal from a Multiemployer Plan which could reasonably be expected to have a Material Adverse Effect;

     (gg) Each of the Lessee and its Subsidiaries has good and marketable fee simple title to all of its respective real estate assets, or if any real property is leased by the Lessee or a Subsidiary of the Lessee (excluding the Property), it has a valid leasehold interest enforceable against the ground lessor of such real property in accordance with the terms of such lease;

     (hh) The fair saleable value of the Lessee’s assets, measured on a going concern basis, exceeds all probable liabilities, including those to be incurred pursuant to the Operative Agreements. The Lessee (i) does not have unreasonably small capital in relation to the business in which it is or proposes to be engaged and has not (ii) incurred, and does not believe that it will incur after giving effect to the transactions contemplated by the Operative Agreements, debts beyond its ability to pay such debts as they become due; and

     (ii) There are no collective bargaining agreements or Multiemployer Plans covering the employees of the Lessee or any of its Subsidiaries as of the Closing Date and none of the Lessee or any of its Subsidiaries (i) have suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five years or (ii) have knowledge of any potential or pending strike, walkout or work stoppage.

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SECTION 7. PAYMENT OF CERTAIN EXPENSES.

          7.1. Transaction Expenses.

     (a) The Lessor agrees on the Closing Date to pay, or cause to be paid, all Transaction Expenses arising from the Closing, including without limitation all reasonable fees, expenses and disbursements of the Agent, the Deal Agent, the Lessor, the Lenders and their respective counsel in connection with the transactions contemplated by the Operative Agreements and incurred in connection with the Closing, all fees, taxes and expenses for the recording, registration and filing of documents and all other reasonable fees, expenses and disbursements incurred in connection with the Closing; provided, however, the Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to timely pay all amounts referred to in this Section 7.1(a) to the extent the Lessor is not required to pay such amounts.

     (b) For the period prior to the Commencement Date and during the Commitment Period, the Lessor agrees on the date of any Construction Advance and on the Completion Date to pay, or cause to be paid, all Transaction Expenses (subject to the following) including without limitation all reasonable fees, expenses and disbursements of counsel for the Agent, the Deal Agent, the Lessor, and the Lenders, in connection with the transactions contemplated by the Operative Agreements and billed in connection with such Advance or the Completion Date, all amounts described in Section 7.1(a) of this Agreement which have not been previously paid, the reasonable out-of-pocket expenses of the Lessor, all fees, expenses and disbursements incurred with respect to the various items referenced in Sections 5.3, 5.4 and/or 5.5 (including without limitation any premiums for title insurance policies and charges for any updates to such policies) and all other reasonable fees, expenses and disbursements in connection with such Advance or the Completion Date including without limitation all expenses relating to and all fees, taxes and expenses for the recording, registration and filing of documents and all fees, expenses and costs referenced in Sections 7.3(a), 7.3(b), 7.4, 7.5, 7.6 and 7.7; provided, however, the Lessor shall only be obligated to pay such amounts described in this Section 7.1(b) from the proceeds of Loans and Lessor Advances. On the date of any Construction Advance or the Completion Date, the Lessee agrees to timely pay all amounts referred to in this Section 7.1(b) to the extent the Lessor is not required to pay such amounts.

     (c) All fees payable pursuant to the Operative Agreements shall be calculated on the basis of a year of three hundred sixty (360) days for the actual days elapsed. All fees payable to the Conduit and the Liquidity Fees shall accrue on the same basis as the CP Loans.

     7.2. No Broker, etc.

     Each of the parties hereto represents to the others that it has not retained or employed any broker, finder or financial adviser (other than Wachovia Securities which has been retained by

32

the Lessee) to act on its behalf in connection with the Operative Agreements or the transactions contemplated thereby, nor has it authorized any broker, finder or financial adviser (other than Wachovia Securities which has been retained by the Lessee) retained or employed by any other Person so to act.

     7.3. Certain Fees and Expenses.

     From and after the Commencement Date, the Lessee agrees to pay (a) all reasonable out-of-pocket costs and expenses incurred by the Lessee, the Agent, the Deal Agent, the Lessor or the Lenders in entering into any future amendments, modifications, supplements, restatements and/or replacements with respect to any of the Operative Agreements, whether or not the amendments, modifications, supplements, restatements and/or replacements are ultimately entered into, or giving or withholding of waivers or consents hereto or thereto, which have been requested by the Lessee and (b) all reasonable out-of-pocket costs and expenses incurred by the Lessee, the Agent, the Lessor or the Lenders in connection with any transfer or conveyance of the Property to the Lessee or its designee or any third party pursuant to the terms of the Operative Agreements, whether or not such transfer or conveyance is ultimately accomplished. At all times, the Lessee agrees to pay all reasonable out-of-pocket costs and expenses incurred by the Lessee, the Agent or the Primary Financing Parties in connection with any exercise of remedies under any Operative Agreement or any purchase of the Property pursuant to the terms of the Operative Agreements by the Construction Agent, the Lessee or its designee.

     7.4. Unused Fee.

     For the period prior to the Commencement Date and during the Commitment Period, the Lessor agrees to pay, or cause to be paid, to the Agent for the account of (a) the Investors (provided, the Agent shall promptly forward such fee to the Investors, based on the relative commitments of the Investors), an unused fee (the “Lender Unused Fee”) equal to the product of the average daily Available Lender Commitment of each such Investor during the Commitment Period multiplied by the Applicable Percentage and (b) the Lessor, an unused fee (the “Lessor Unused Fee”) equal to the product of the average daily Available Lessor Commitment of the Lessor during the Commitment Period multiplied by the Applicable Percentage. Such Unused Fees shall be payable monthly in arrears on each Unused Fee Payment Date. The Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to pay all amounts referred to in this Section 7.4 to the extent the Lessor is not required to pay such amounts.

     7.5. Administrative Fee.

     For the period prior to Commencement Date and during the Commitment Period, the Lessor shall pay, or cause to be paid, as Transaction Expenses, an administrative fee to the Agent (for its individual account) on the Closing Date and each annual anniversary thereof (or if such annual anniversary date is not a Business Day, then on the next succeeding Business Day) on the terms and conditions set forth in the engagement letter dated April 24, 2003 (the “Engagement Letter”) addressed to Mr. Steven C. Mayer, Senior Vice President and Chief Financial Officer, on behalf of the Lessee, from Mr. Evander S. Jones, Jr., Vice President, on behalf of Wachovia

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Bank, National Association. The Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to pay all amounts referred to in this Section 7.5 to the extent the Lessor is not required to pay such amounts. The Lessee further agrees to continue paying such an administrative fee on the terms described above after the Commencement Date and after the Commitment Period until the Maturity Date.

     7.6. Structuring Fee.

     The Lessor agrees, on the Closing Date to pay, or cause to be paid, as Transaction Expenses, a structuring fee to Wachovia Securities, LLC on the terms and conditions set forth in the Engagement Letter. The Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to only pay all amounts referred to in this Section 7.6 to the extent the Lessor is not required to pay such amounts.

     7.7. Liquidity Fee.

     On each Payment Date prior to the Commencement Date from the date of this Agreement to the Facility Termination Date (as defined in the Liquidity Agreement) (as such date may be extended from time to time in accordance with the Liquidity Agreement) the Lessor shall pay, or cause to paid, as Transaction Expenses, and the Agent shall in turn pay to the Deal Agent (for prompt payment to the Investors), in immediately available funds a fee (the “Liquidity Fee”) payable in arrears for each Interest Period equal to the sum of the products for each day of such Interest Period of (a) one divided by 360, (b) the Applicable Percentage for the Liquidity Fee regarding the Loans and (c) one hundred and two percent (102%) of the aggregate sum of the Credit Loan Commitments plus the Mortgage Loan Commitments. The Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to pay all amounts referred to in this Section 7.7 to the extent the Lessor is not required to pay such amounts. The Lessee further agrees to continue paying such Liquidity Fees on the terms described above until (a) the financing pursuant to the Operative Agreements is prepaid in full or (b) if such financing is not so prepaid, the later of the Maturity Date or payment of all outstanding amounts pursuant to the Operative Agreements.

     7.8. Program Fee.

     For the period prior to the Commencement Date and during the Commitment Period, the Lessor agrees to pay, or cause to be paid, to the Deal Agent for the account of the Conduit a program fee for each Interest Period relating to CP Loans equal to the product of (a) one divided by 360, (b) the principal amount of the outstanding CP Loans on the last day of each such Interest Period and (c) 0.15% (the “Program Fee”). Such fee shall be payable on the twentieth (20^th) day of each month (unless such day is not a Business Day and in such case the next occurring Business Day). The Lessor shall only be obligated to pay such amounts from the proceeds of Loans and Lessor Advances. The Lessee agrees to pay all amounts referred to in this Section 7.8 to the extent the Lessor is not required to pay such amounts. The Lessee further agrees to continue paying such Program Fee on the terms described above until (a) the financing pursuant to the Operative Agreements is prepaid in full or (b) if such financing is not so prepaid,

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the later of the Maturity Date or payment of all outstanding amounts pursuant to the Operative Agreements.

SECTION 8. OTHER COVENANTS AND AGREEMENTS.

     8.1. Cooperation with the Construction Agent or the Lessee.

     The Primary Financing Parties and the Agent shall, at the expense of and to the extent reasonably requested by the Construction Agent or the Lessee (but without assuming additional liabilities on account thereof and only to the extent such is acceptable to the Primary Financing Parties and/or the Agent, as applicable, in their reasonable discretion), cooperate with the Construction Agent or the Lessee in connection with the Construction Agent or the Lessee satisfying its covenant obligations contained in the Operative Agreements including without limitation at any time and from time to time, promptly and duly executing and delivering any and all such further instruments, documents and financing statements (and continuation statements related thereto).

     8.2. Covenants of the Lessor.

     The Lessor hereby agrees that so long as this Agreement is in effect:

     (a) The Lessor will not create or permit to exist at any time, and will, at its own cost and expense, promptly take such action as may be necessary duly to discharge, or to cause to be discharged, all Lessor Liens on the Property attributable to it; provided, however, that the Lessor shall not be required to so discharge any such Lessor Lien while the same is being contested in good faith by appropriate proceedings diligently prosecuted so long as such proceedings shall not materially and adversely affect the rights of the Lessee under the Lease and the other Operative Agreements or involve any material danger of impairment of the Liens of the Security Documents or of the sale, forfeiture or loss of, and shall not interfere with the use or disposition of, the Property or title thereto or any interest therein or the payment of Rent;

     (b) The Lessor shall not (i) commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, arrangement, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seek appointment of a receiver, trustee, custodian or other similar official for all or any substantial benefit of the creditors of the Lessor; and the Lessor shall not take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in this paragraph;

     (c) The Lessor shall give prompt written notice to the Lessee, the Primary Financing Parties (other than the Lessor) and the Agent if the Lessor’s location for purposes of the UCC shall cease to be North Carolina, or if the Lessor’s principal place of business or chief executive office, or the office where the records concerning the

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accounts or contract rights relating to the Property are kept, shall cease to be located at One Wachovia Center, 301 South College Street, Charlotte, Mecklenburg County, North Carolina 28288;

     (d) The Lessor shall take or refrain from taking such actions and grant or refrain from granting such approvals with respect to the Operative Agreements and/or relating to the Property in each case as directed in writing by the Agent (until such time as the Loans are paid in full) or, in connection with Section 8.5 hereof, the Lessee; provided, however, that each of the Agent, the Primary Financing Parties (other than the Lessor) and the Lessee acknowledges, covenants and agrees that it will not instruct the Lessor to take any action in violation of the terms of any Operative Agreement; and

     (e) The Lessor shall give the Lessee prompt written notice (a “Lessor Notice”) following the Lessor’s knowledge, but in any event promptly upon receipt by it of (x) notice from an acquiring Person as provided in the related underlying transaction documents that a disposition of property will occur or (y) an appraisal or other form of written valuation study, in either case that, in the exercise of the Lessor’s reasonable judgment, would (regarding the Fair Market Sales Value of the Property as set forth in the Appraisal delivered pursuant to Section 5.3(s) or as set forth in any Appraisal requested from time to time by the Lessee and obtained at the sole cost and expense of the Lessee), in the case of clause (x) above, cause such Fair Market Sales Value of the Property to exceed forty-five percent (45%) of (or, in the case of clause (y) above, provide the Lessor with adequate information to determine that, such Fair Market Sales Value of the Property exceeds forty-five percent (45%) of) the fair market value (based on appraisals or other information in the Lessor’s possession and delivered in connection with the consummation of such underlying transactions relating to various properties of the Lessor or received by the Lessor as described in clause (y) above) of all of the property owned (as determined in accordance with Lessor’s financial reporting under GAAP) by the Lessor (the “Forty-five Percent FMV Event”). In the event that a Lessor Notice is given, the Lessor, upon receipt of a written request from the Lessee, may, at its option, elect to either (i) obtain additional assets such that the gross asset value of the Property does not ever constitute more than fifty percent (50%) of the total assets of the Lessor, (ii) transfer its interests in all of the Property to another Affiliate of the Lessor such that the representations set forth in the Lessor Confirmation Letter remain correct, (iii) obtain, at the Lessee’s sole cost and expense, additional appraisals on assets owned by the Lessor, or (iv) obtain, at the Lessee’s sole cost and expense, a SAS 97-type letter reasonably acceptable to the Lessee from the Lessor’s auditor to certify that the Lessor is a voting interest entity as defined by FASB Interpretation No. 46 (to be renewed as required). Nothing relating to the circumstances surrounding or the physical delivery of the Lessor Notice will in any way inhibit or prohibit the Lessee’s right to replace the Lessor pursuant to Section 10.1(d). Notwithstanding the foregoing, in no event will the Lessor be required to disclose or provide access to any information to the extent that such disclosure or access would violate any law applicable to the Lessor or its Affiliates, including without limitation banking regulations applicable to national banks, or result in a breach of the Lessor’s or any Affiliate’s confidentiality agreements.

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     In addition to the foregoing, if the Lessee determines, in its sole discretion, that a Forty-Five Percent FMV Event will occur, the Lessor agrees to use all reasonable commercial efforts to provide the non-confidential information necessary for the Lessee to make its accounting assessment under FASB Interpretation No. 46. Notwithstanding the foregoing, in no event will the Lessor be required to disclose or provide access to any information to the extent that such disclosure or access would violate any Law applicable to the Lessor or its Affiliates, including banking regulations applicable to national banks, or result in a breach of the Lessor’s or any Affiliate’s confidentiality agreements. The parties hereto agree that the Lessee and its auditors are the sole beneficiaries of the matters addressed in this Section 8.2(e).

     (f) Upon the Lessee’s prior written request, the Lessor shall provide to the Lessee at least fifteen (15) days prior to the end of each calendar quarter and at least forty-five (45) days prior to the end of each calendar year, a confirmed copy of the Lessor Confirmation Letter. The parties hereto agree that the Lessee and its auditors are the sole beneficiaries of the matters addressed in this Section 8.2(f).

     (g) At the direction of the Lessee, the Lessor shall undertake to enter into and maintain one or more Hedging Agreements (on terms and conditions satisfactory to the Agent) with respect to the financing of the Property regardless of whether Completion and/or the Commencement Date shall have occurred with respect to the Property and to terminate any such Hedging Agreement in accordance with the terms thereof; provided, (i) the Lessee must consent in writing (in form and substance satisfactory to the Hedge Provider and the Agent and in such form as may be relied upon by the Hedge Provider and each Financing Party) to each such Hedging Agreement and certify in such consent that each such Hedging Agreement is customary and reasonable, (ii) the Lessee must provide a copy of each such consent to each Financing Party, (iii) upon the date as of which the Lessor initially enters into any such Hedging Agreement, no Default or Event of Default shall have occurred and be continuing and (iv) each such Hedging Agreement must terminate on or prior to the last day of the Term.

     (h) The Lessor will not finance an amount equal to or greater than ninety-five percent (95%) of the fair value of the property with non-recourse debt or targeted equity.

     8.3. The Lessee Covenants, Consent and Acknowledgment.

     (a) The Lessee acknowledges and agrees that the Borrower, pursuant to the terms and conditions of various Security Documents, shall create Liens respecting the various collateral described therein in favor of the Agent. The Lessee hereby irrevocably consents to the creation, perfection and maintenance of such Liens. The Lessee shall, to the extent reasonably requested by any of the other parties hereto, cooperate with the other parties in connection with their covenants herein or in the other Operative Agreements and shall from time to time duly execute and deliver any and all such future instruments, documents and financing statements (and continuation statements related thereto) as any other party hereto may reasonably request.

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     (b) The Lessor hereby instructs the Lessee, and the Lessee hereby acknowledges and agrees, that until such time as the Loans and the Lessor Advances are paid in full and the Liens evidenced by the various Security Documents have been released (i) any and all Rent (excluding Excepted Payments, which shall be payable to the Person entitled thereto) and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable to any Person shall instead be paid directly to the Agent (excluding Excepted Payments, which shall be payable to the Person entitled thereto) or as the Agent may direct from time to time for allocation and distribution in accordance with the procedures set forth in Section 8.7 hereof and (ii) the Lessee shall cause all notices, certificates, financial statements, communications and other information, which are delivered, or are required to be delivered, to the Lessor, to be delivered to the Agent, as the Lessor’s agent.

     (c) The Lessee shall not consent to any amendment, supplement or other modification of the terms or provisions of any Operative Agreement to which it is a party except in accordance with Section 12.4 of this Agreement.

     (d) The Lessee hereby covenants and agrees that (except for amounts payable as Basic Rent, payments made in connection with the satisfaction or removal of Lessor Liens, certain Transaction Expenses funded by Advances pursuant to the Operative Agreements, principal and Interest due and owing with regard to the Loans or the Lessor Advances and amounts expressly excluded from indemnification pursuant to Section 11) any and all payment obligations owing from time to time under the Operative Agreements by any Person to the Agent, the Deal Agent, any Hedge Provider, any Primary Financing Party or any other Person shall (without further action) be deemed to be Supplemental Rent obligations payable by the Lessee; provided, however, during the period prior to the Completion Date, the Construction Agent may submit a Requisition for such Supplemental Rent obligations and such Supplemental Rent obligations shall be payable by the Construction Agent with the proceeds of one or more Advances made in accordance with the provisions of the Operative Agreements and upon satisfaction or express waiver of the conditions applicable to such Advance, and such amounts shall be added to the Property Cost; provided, further, in the event the Construction Agent shall fail to comply with the requirements set forth in the immediately preceding proviso or shall fail to submit a Requisition for such Supplemental Rent obligations, the Construction Agent shall pay such Supplemental Rent obligation to such Person from its own funds. Without limitation, such Supplemental Rent obligations of the Lessee shall include (except to the extent specifically excluded pursuant to the first sentence of this Section 8.3(d)) the Supplemental Rent obligations pursuant to this Section 8.3(d), Section 3.3 of the Lease, structuring fees, administrative fees, participation fees, unused fees, prepayment penalties, Breakage Costs, indemnities, program fees, liquidity fees, transaction expenses incurred by the parties hereto in connection with the transactions contemplated by the Operative Agreements and any and all payment obligations owing from time to time to any Hedge Provider pursuant to one or more Hedging Agreements (including without limitation any and all obligations to pay termination payments thereunder).

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     (e) The Lessee hereby covenants and agrees to cause an Appraisal or reappraisal (in form and substance reasonably satisfactory to the Agent and from an appraiser selected by the Agent) to be issued respecting the Property as requested by the Agent from time to time (i) at each and every time as such shall be required to satisfy any regulatory requirements imposed on the Agent and/or any Primary Financing Party and (ii) after the occurrence of an Event of Default that is not a Limited Recourse Event of Default, the costs and expenses of such Appraisal shall be deemed to be a Supplemental Rent obligation payable in accordance with the provisions of Section 8.3(d).

     (f) At any time the Lessor or the Agent is entitled under the Operative Agreements to possession of the Property or any component thereof, the Lessee hereby covenants and agrees, at its own cost and expense, to assemble and make the Property or such component, as applicable, available to the Agent (on behalf of the Lessor).

     (g) The Lessee hereby covenants and agrees that Equipment respecting the Property shall at no time constitute in excess of ten percent (10%) of the aggregate Advances respecting the Property funded at such time under the Operative Agreements.

     (h) The Lessee hereby covenants and agrees that it shall give thirty (30) days’ prior notice to the Agent if the Lessee’s location for purposes of the UCC, the Lessee’s principal place of business or chief executive office, or the office where the records concerning the accounts or contract rights relating to the Property are kept, shall cease to be located at the locations set forth in Section 6.2(i) or if it shall change its name or if it shall use, or transact business under, any tradename other than its legal name.

     (i) The Lessee hereby covenants and agrees that the rights of the Lessee under this Agreement and the Lease shall not impair or in any way diminish the obligations of the Construction Agent and/or the rights of the Lessor under the Agency Agreement.

     (j) The Lessee shall promptly notify the Agent and each Primary Financing Party, or cause the Agent and each Primary Financing Party to be promptly notified, upon a Responsible Officer of such Lessee gaining knowledge of the occurrence of any Default or Event of Default which is continuing at such time and describing the same in reasonable detail with a description of the action the Lessee or any Affiliate has taken or proposes to take with respect thereto. In any event, such notice shall be provided to the Agent within ten (10) days of when a Responsible Officer of the Lessee gains such knowledge.

     (k) Promptly after obtaining any required architectural approvals by any business park or any other applicable entity with oversight responsibility for the applicable Improvements, the Lessee shall deliver to the Agent copies of the same.

     (l) Except as otherwise contemplated by the Operative Agreements, the Lessee shall not use the proceeds of any Advance for any purpose other than the acquisition, installation and testing of the Equipment, the construction of the

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Improvements and the payment of Capitalized Costs and other Project Costs, in each case which accrue prior to the Commencement Date with respect to the Property; provided, the amounts advanced by the Primary Financing Parties in connection with their obtaining of the various interests pursuant to the Master Transfer Agreement as referenced in Section 1 shall be deemed to be permitted Advances for all purposes of the Operative Agreements.

     (m) The Property, the Plans and Specifications for the Property and the use and operation of the Property by the Lessee will comply with all applicable Legal Requirements (including without limitation all applicable Environmental Laws and building, planning, zoning and fire codes), except to the extent the failure to comply therewith, individually or in the aggregate, shall not have and could not reasonably be expected to have a Material Adverse Effect. Upon completion of the Improvements for the Property in accordance with the applicable Plans and Specifications, such Improvements will be within any building restriction lines and will not encroach in any manner onto any adjoining land (except as permitted by express written easements, which have been approved by the Agent).

     (n) The Property shall be improved in all material respects in accordance with the applicable Plans and Specifications.

     (o) The Lessee shall deliver (or cause to be delivered) an annual certificate evidencing the insurance required to be maintained under the Agency Agreement or Article XIV of the Lease, as applicable, on the date such certificate is due thereunder.

     (p) Until all of the obligations under the Operative Agreements have been finally and indefeasibly paid and satisfied in full (other than such obligations thereunder which expressly survive such payment and satisfaction in full) and the Lender Commitments and the Lessor Commitments terminated, the Lessee will:

     (i) preserve and maintain its separate legal existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and qualify and remain qualified as a foreign corporation (or partnership, limited liability company or other such similar entity, as the case may be) and authorized to do business in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect;

     (ii) pay and perform all obligations of the Lessee under the Operative Agreements and pay and perform (A) all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its property, and (B) all other indebtedness, obligations and liabilities in accordance with customary trade practices, which if not paid would have a Material Adverse Effect; provided, that the Lessee may contest any item described in this Section 8.3(p)(ii) in good faith so long as adequate reserves are maintained with respect thereto in accordance with (and to the extent required by) GAAP;

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     (iii) to the extent failure to do so would have a Material Adverse Effect, observe and remain in compliance with all applicable Laws and maintain in full force and effect all Governmental Actions, in each case applicable to the conduct of its business; keep (or cause to be kept) in full force and effect all licenses, certifications or accreditations necessary for the Property to carry on its business; and not permit the termination of any insurance reimbursement program available to the Property; and

     (iv) provide to the Agent, promptly, such additional financial and other information as the Agent, on behalf of any Primary Financing Party, may from time to time reasonably request and that is reasonably related to such Primary Financing Party’s credit analysis of the Lessee as it otherwise relates to the Property.

     (q) The Lessee shall perform (or cause to be performed) any and all obligations of Lessor under, and cause the Lessor to otherwise remain in full compliance with, the terms and provisions of the Ground Lease and the Appurtenant Rights; provided, however, the Lessee shall have no obligation to satisfy any Lessor Liens relating to the property subject to the Ground Lease or the Appurtenant Rights.

     (r) The Lessee shall prepare and submit to the Agent, on or prior to the Closing Date, a Construction Budget for the Property (which shall include a line item for Interest and Lessor Yield and all other reasonably anticipated Capitalized Costs that will accrue prior to the Completion Date) such that the sum of the Commitments will at all times exceed the expected Property Cost.

     (s) The Lessee shall cause the Property to comply with all Insurance Requirements (unless the failure to comply with such Insurance Requirements will not result in a denial of coverage under any insurance policy required to be maintained hereunder or under any other Operative Agreement) and all standards of Lessee with respect to similar properties owned by Lessee. The Lessee shall deliver evidence of builder’s risk insurance in compliance with the requirements set forth in the Agency Agreement or the Lease, as applicable.

     (t) [Reserved].

     (u) All utility services and facilities necessary for the construction and operation of the Improvements and the installation and operation of the Equipment regarding the Property (including without limitation gas, electrical, water and sewage services and facilities) shall be available at the Land or shall be constructed prior to the Completion Date for the Property.

     (v) The acquisition, installation and testing of the Equipment and construction of the Improvements shall be performed in a good and workmanlike manner, substantially in accordance with the applicable Plans and Specifications.

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     (w) The Lessee shall not incur or suffer to exist any Lien on the Property or any other collateral subject to the Security Documents other than Permitted Liens and Lessor Liens, and the Lessee shall at all times cause the Liens of the Security Documents to be maintained as valid, perfected, first-priority Liens (subject only to Permitted Liens and Lessor Liens).

     (x) The Lessee shall deliver a written notice to the Agent promptly upon the Lessee’s receiving notice or actual knowledge of a Responsible Officer of the Lessee of the taking by a Governmental Authority of an action, which would constitute a Condemnation, receiving notice of a material violation of any Legal Requirement on or at the Property, including any Environmental Law, under which liability may be imposed upon the Agent, any Primary Financing Party or the Lessee, or receiving notice or actual knowledge of modification of the Property (other than routine construction progress, fire, life-safety and similar inspections) required to remove or cure any violation of the Lessor under which criminal liability may be imposed upon the Agent, any Primary Financing Party or the Lessee.

     (y) The Lessee shall not, nor shall it permit anyone authorized to act on its behalf to, take any action which would subject the Property, the Operative Agreements, Loans, the Lessor Advances, or any security or lease the offering of which, for purposes of the Securities Act or any state securities laws, would be deemed to be part of the same offering of the aforementioned items, to the registration requirements of Section 5 of the Securities Act or any state securities laws.

     (z) The proceeds of Advances and the condemnation proceeds, awards, compensation and insurance proceeds regarding any Casualty or Condemnation concerning the Property shall not be spent in connection with any equipment, apparatus, furnishings, fittings or personal property of any kind or nature, except for the Equipment.

     (aa) The Lessee shall cause the Interest Period for any and all CP Loans, Eurodollar Loans and/or Eurodollar Lessor Advances subject to any Hedging Agreement to be identical to the interest period (or any similar period) for each such amount in each such Hedging Agreement.

     (bb) With respect to each Loan or portion thereof for which a Hedging Agreement is in place and unless either Credit Agreement (including without limitation Sections 2.6, 2.7, 2.8, 2.9 and 2.12 of either such Credit Agreement) or the Participation Agreement requires the application of the ABR to a Loan, the Lessee shall cause the interest rate applicable to the Loan (unless such Loan is a CP Loan) to be the Eurodollar Rate, not the ABR. With respect to each Lessor Advance or portion thereof for which a Hedging Agreement is in place and unless this Agreement (including without limitation pursuant to Sections 5A of this Agreement) requires the application of the ABR to a Lessor Advance, the Lessee shall cause the Lessor Yield applicable to the Lessor Advance to be the Eurodollar Rate, not the ABR.

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     8.3A Additional Covenants of the Lessee.

     Except as specifically provided below, during the Construction Period and the Term, if any, the Lessee covenants with each of the other parties hereto as follows:

     (a) [Reserved].

     (b) (i) During the Construction Period, the Construction Agent from time to time shall deliver to the Lessor and the Agent an Officer’s Certificate, which Officer’s Certificate shall state whether or not there exists an Agency Agreement Default or Agency Agreement Event of Default and whether or not the Site is In Balance, and shall attach a monthly report in the form of EXHIBIT N hereto. Such Officer’s Certificate and report shall be delivered together with any Requisition delivered by the Construction Agent and, if no such Requisition is delivered by the Construction Agent in any calendar month, then such Officer’s Certificate and report shall be delivered on the last Business Day of such calendar month.

     (ii) The Construction Agent shall make available to the Agent and the Construction Consultant for inspection and copying no later than the fifth (5^th) day of each calendar month: (A) copies of all Material Construction Documents entered into in the preceding calendar month; (B) copies of all change orders, changes to the Construction Materials, notices, requests for any increase of any contract sum payable, or other communication received under or in connection with any Material Construction Document which either (x) seeks to materially increase the total consideration payable under any Material Construction Document, or (y) asserts that the Construction Agent or any other party to any Material Construction Document is in material breach or default, or with notice and lapse of time or both will be in material breach or default under any Material Construction Document; (C) upon reasonable request by the Lessor, a list of the names and addresses of the subcontractors with whom written agreements have been made by the Construction Agent and (D) such other information as may be reasonably requested (in light of the Construction Agent’s obligations to provide information or documents contained herein or in the other Operative Agreements) by the Lessor regarding the status of (and to the extent reasonably available to the Construction Agent, the parties to material agreements relating to) the Construction, compliance of the parties to the Construction Documents with the terms thereof, and amounts due and payable under the Construction Documents, including, without limitation, such information as the Lessor shall reasonably require to determine that the Construction Budget is In Balance.

     (iii) The Construction Agent shall make available to the Agent and the Construction Consultant for inspection and copying (A) on each anniversary of the Closing Date (unless an Event of Default has occurred and is continuing in which case as requested) a copy of each of the then current Plans and Specifications and (B) within thirty (30) days after Completion of the Property, a copy of the then current Plans and Specifications.

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     (c) The Lessee shall deliver to the Lessor and the Agent promptly upon the occurrence of a Casualty that may result in a claim in excess of $1,000,000 an Officer’s Certificate describing in detail those Improvements that have suffered a Casualty (except to the extent such Casualty has been described in a previously delivered Officer’s Certificate) or been the subject of a Condemnation and have not been replaced in accordance with the Operative Agreements and cannot be repaired by (i) the Construction Period Termination Date, with regard to the Property prior to Completion or (ii) the then current end of the Term, with regard to the Property after Completion.

     (d) Each time the investment guidelines of the Lessee are modified, the Lessee shall deliver to the Agent (within ten (10) Business Days after any such modification has been adopted) a copy of the newly modified investment guidelines of the Lessee duly authorized and adopted by the Lessee. Such investment guidelines shall be certified by a Responsible Officer of the Lessee as true and correct.

     (e) Promptly upon the Lessee’s becoming aware of (i) any investigation of it by any Governmental Authority, (ii) any court or administrative proceeding involving it, or (iii) any notice, claim or demand from any Governmental Authority which alleges that any such Person is in violation of any Law or has failed to comply with any order issued pursuant to any Federal, state or local statute regulating its operation and business, which individually or in the aggregate is reasonably likely to result in a liability of $10,000,000 or more or to have a Material Adverse Effect, it shall notify the Lessor and the Agent specifying its nature and the action it is taking with respect thereto.

     (f) Promptly upon occurrence of Completion of the Property, the Lessee shall deliver written notice thereof to the Lessor and the Agent, together with true and correct copies of certificates of occupancy issued with respect to the Property. The failure to deliver a notice of Completion will not prevent the Property from becoming subject to the Lease in accordance with Section 5.14.

     (g) The Lessor or any Agent may designate any Person in writing who is its officer, employee or agent to visit and inspect the Property, and to the extent reasonable under the circumstances, examine the Lessee’s books of record and accounts pertaining to the Property all at such reasonable times as the Lessor or such Agent, as the case may be, may reasonably request and, upon such request, the Lessee shall make the Property and such books of record and accounts pertaining to the Property available to the Lessor or the Agent, as the case may be, for inspection; provided, that the Lessor and the Agent shall comply, and cause their respective officers, employees and agents to comply, with the provisions of Section 12.13. Notwithstanding the foregoing provisions of this Section 8.3A(g), (i) except in the case of emergency or Lease Event of Default, in connection with such visits and inspections, the Lessor or the Agent shall provide reasonable written notice to the Lessee prior to any such visit or inspection and, absent a Lease Event of Default and after the Commencement Date, such visits and inspections shall occur not more often than once per annum, (ii) any such visit and inspection shall be at the sole risk and expense of the Person so visiting or inspecting (but without excusing

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the Lessee for any liability for any injuries to the extent resulting from the Lessee’s negligence or willful misconduct where such Person has complied with clause (iii) hereof) unless a Lease Event of Default has occurred and is continuing, in which case any such visit and inspection shall be at the expense of the Lessee (provided that during the Construction Period the Lessee shall request an Advance, the proceeds of which shall be used to pay such expenses), (iii) each Person so visiting or inspecting the Property shall comply with such rules and regulations regarding the Lessee’s operations, safety and security as the Lessee may reasonably impose, and (iv) no such Person shall be entitled to inspect any areas of the Property or records that the Lessee reasonably characterizes as confidential, proprietary or similarly necessary of protection from disclosure.

     (h) [Reserved].

     (i) The Lessee shall, as soon as possible and in any event within ten (10) days after the occurrence of any violation of an Environmental Law that could reasonably be expected to have a Material Adverse Effect, provide the Lessor and the Agent with a statement of an authorized officer setting forth the details of such violation and the action which the Lessee proposes to take with respect thereto.

     (j) The Lessee shall not, nor shall it permit anyone authorized to act on its behalf to, take any action which would subject the issuance or sale of any interest in the Lease, the Lessor Advances, the Loans, the Notes or any security or lease the offering of which, for purposes of the Securities Act or any state securities laws, would be deemed to be part of the same offering as the offering of the aforementioned items, to the registration requirements of Section 5 of the Securities Act or any state securities laws.

     (k) The Lessee shall not, nor shall it permit anyone authorized to act on its behalf to, sell, contract to sell, assign, lease, transfer, convey or otherwise dispose of the Property or any part thereof in violation of the Operative Agreements.

     (l) Subject to the Lessee’s rights to conduct a permitted contest in accordance with the Operative Agreements in respect of the following, the Lessee shall pay (provided that during the Construction Period the Lessee shall request an Advance, the proceeds of which shall be used to pay) and discharge before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property, and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property, other than Permitted Liens.

     (m) During the Construction Period, the Lessee shall maintain, at the expense of the Lessor, insurance coverage covering the Property which meets in all respects the requirements of the Agency Agreement.

     (n) During the continuance of any Lease Event of Default, the Lessee shall deliver to the Lessor and the Agent an Environmental Audit for the Property within thirty (30) days of demand therefor.

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     (o) Upon demand from the Lessor or the Agent during the continuance of a Lease Event of Default, the Lessee shall deliver to the Lessor and the Agent an Appraisal of the Property, prepared by an appraiser satisfactory to the Lessor and the Agent and in form and substance reasonably satisfactory to each of them, showing the Fair Market Sales Value of the fee interest in the Land and the Lessor’s interest in the Improvements, dated within thirty (30) days of the delivery of such Appraisal.

     (p) The Lessee will cause the Property to be constructed in its entirety at and on the Site and will not approve or allow the construction of the Property or any portion thereof to be constructed at or on any location other than the Site, except with respect to certain assets subject to the HVAC Easement which have been specified in writing to the Financing Parties.

     (q) The Lessee shall not incur, and shall not cause nor permit any Lessee Person to incur, the Property Costs that, when added to the aggregate Property Costs then incurred to date, would exceed the aggregate commitments.

     (r) The Lessee shall not assign or transfer its interest in the Lease or any other Operative Agreement except in accordance with Article XXV of the Lease and Section 10.1(a) of this Agreement.

     (s) The Lessee covenants that the Agent has and shall continue to have a first priority perfected security interest in the Liquid Collateral Account and the Liquid Collateral credited thereto from time to time, which Liquid Collateral Account and Liquid Collateral secures all of the Obligations of the Lessee. At any time the Lessee is required under the Liquid Collateral Agreements or the other Operative Agreements, as applicable, to provide additional Liquid Collateral to the Agent, the Lessee shall pledge such Liquid Collateral to the Agent pursuant to the Cash Collateral Agreement or such other agreements in form and substance satisfactory to the Agent providing for a valid and perfected first priority security interest in favor of the Agent in such Liquid Collateral, free and clear of all Liens. Any Liquid Collateral that shall not be in the form of a direct obligation to the Agent shall be pledged to the Agent pursuant to a pledge and security agreement and a custody and control agreement, each in form and substance satisfactory to the Agent, to secure the Obligations of the Lessee. The Lessee shall maintain such pledged Liquid Collateral free and clear of all Liens other than Liens in favor of the Agent. Any income received (or loss incurred) by the Agent with respect to the balance from time to time on deposit in such Liquid Collateral Account, including any interest or capital gains on Permitted Investments made with amounts on deposit in such Liquid Collateral Account, shall remain, or be deposited, in (or be deducted from) such Liquid Collateral Account, and the Agent shall not be required to reimburse any such losses or otherwise have any liability therefor except as otherwise provided in the Liquid Collateral Agreements. All right, title and interest in and to the cash amounts on deposit in the Liquid Collateral Account together with any Permitted Investments from time to time made pursuant to this Section shall constitute part of the Liquid Collateral and shall be held for the benefit of the Secured Parties and shall not constitute payment of the Obligations of the Lessee (or any other obligations to which such funds are provided

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hereunder to be applied) until applied thereto as provided herein. On a monthly basis, the Agent has the right to mark-to-market the Liquid Collateral in its Liquid Collateral Account and to require the Lessee to transfer additional Liquid Collateral to the Liquid Collateral Account pursuant to the Liquid Collateral Agreements and the other Operative Agreements, as applicable.

     (t) The Lessee shall complete all Final Completion Work in a good and workmanlike manner in accordance with the Construction Materials, but in no event later than the last day of the Term.

     (u) The Lessee shall furnish to the Lessor and the Agent:

     (i) so long as the Lessee is subject to the reporting requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934, (A) within a reasonable amount of time (but not more than thirty (30) days) after the Lessee is required to file the same with the SEC or any successor thereto copies of its Annual Report on Form 10-K, and (B) within thirty (30) days after the Lessee is required to file the same with the SEC, copies of its quarterly reports on Form 10-Q and any reports filed on Form 8-K, if any:

     (ii) at any time when the Lessee is not subject to such reporting requirements, (A) as soon as available and in any event within forty-five (45) days after each Fiscal Quarter, the unaudited consolidated statements of consolidated earnings, stockholders’ equity and cash flows of the Lessee and its Consolidated Subsidiaries for such Fiscal Quarter and the related consolidated balance sheet of the Lessee and its Consolidated Subsidiaries as at the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding periods in the preceding fiscal year (except that, in the case of such balance sheet, such comparison shall be to the last day of the prior fiscal year), accompanied by a certificate of a senior financial officer of the Lessee which certificate shall state that said financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Lessee in accordance with generally accepted accounting principles, consistently applied, as at the end of, and for, the relevant period (subject to normal year-end audit adjustments) and (B) as soon as available and in any event within ninety (90) days after each fiscal year, the audited statements of consolidated earnings, stockholders’ equity and cash flows of the Lessee and its Consolidated Subsidiaries for such fiscal year and the related consolidated balance sheet of the Lessee and its Consolidated Subsidiaries as at the end of such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, accompanied by an opinion on such financial statements of independent certified public accountants of recognized national standing, which opinion shall state that said financial statements fairly present, in all material respects, the consolidated financial condition and results of operations of the Lessee and its Consolidated Subsidiaries as at the end of, and for, such fiscal year

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in accordance with generally accepted accounting principles, consistently applied, as at the end of, and for, such fiscal year;

     (iii) together with each delivery of financial statements pursuant to clauses (i) and (ii) above, an Officer’s Certificate, together with a duly executed Compliance Certificate (in the form of EXHIBIT M), stating that the signer has made such inquiries as the signer deems necessary and appropriate in the circumstances and that such review has not disclosed the existence during the accounting period covered by such financial statements, and that the signer does not have actual knowledge of the existence as of the date of such certificate, of any condition or event which constitutes a Lease Event of Default or an Agency Agreement Event of Default or which, after notice or lapse of time or both, would constitute a Lease Event of Default or an Agency Agreement Event of Default or, if any such condition or event existed or exists, specifying the nature and period of the existence thereof and what action the Lessee has taken or is taking or proposes to take with respect thereto and including a computation of the financial tests set forth in Sections 8.3A(v) and (w) and providing an itemization of the Liquid Collateral Account sufficient to demonstrate compliance with Section 5.11(c)(1)(A):

     (iv) such additional financial information, reports or statements as any Financing Party may from time to time reasonably request.

     Information required to be delivered pursuant to clause (i) of this Section 8.3A, if not previously delivered through paper copies, shall be deemed to have been delivered on the date on which the Lessee provides notice to the Financing Parties that such information has been posted on the Lessee’s website on the Internet, at sec.gov/edaux/searches.htm or at another website identified in such notice and accessible by the Financing Parties without a charge: provided that (x) such notice may be included in any certificate delivered pursuant to clause (iii) hereof and (y) the Lessee shall deliver paper copies of the information referred to in clause (i) of this Section 8.3A upon request of any Financing Party.

     (v) The Lessee will not permit its Unrestricted Cash, Cash Equivalents and Marketable Securities to be less than the greater of (a) $100,000,000 as at the end of any Fiscal Quarter and (b) the Cash Burn Amount for the period of four consecutive Fiscal Quarters as at the end of any Fiscal Quarter.

     (w) The Lessee will not permit the Senior Debt Ratio as of the end of any Fiscal Quarter to be less than 1.25:1.

     (x) (i) The Lessee will not sell, transfer, or otherwise dispose of the Ground Lessor, other than to a wholly-owned subsidiary of the Lessee, and (ii) the Lessee will not permit the Ground Lessor (A) to sell, transfer or otherwise dispose of the property subject to the Ground Lease or the Appurtenant Rights or (B) to assign or permit any Lien on its interest in the Ground Lease or the Appurtenant Rights.

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(y) (i) If (A) as of any Cash Collateral Test Date the Unrestricted Cash, Cash Equivalents and Marketable Securities of the Lessee and its Consolidated Subsidiaries as of such date is less than the greater of (i) $200,000,000 and (ii) the Cash Burn Amount for the period of four consecutive Fiscal Quarters ended on or most recently prior to such Cash Collateral Test Date, (B) all or substantially all of the assets of the Lessee or control of its outstanding shares of capital stock is acquired by a Non-Public Company, the Lessee shall no later than five (5) Business Days after such Cash Collateral Test Date, maintain all its Liquid Collateral on the basis of the Properly Margined Collateral Coverage and deliver to Agent additional Permitted Investments so that the Adjusted Market Value of the Liquid Collateral held in the Liquid Collateral Account of the Agent is not less than the Required Liquid Collateral Amount with respect to such Liquid Collateral Account and the Concentration Limits are met.

     (ii) From and after any date on which the Unrestricted Cash, Cash Equivalents and Marketable Securities of the Lessee shall be equal to or less than $300,000,000, the Lessee shall deliver to the Lessor and the Agent on the last Business Day of each calendar month an Officer’s Certificate stating the amount of the Lessee’s Unrestricted Cash, Cash Equivalents and Marketable Securities as of such date.

     (z) The Lessee will not, and will not permit any Subsidiary to, engage in any business activity, except the businesses of discovery, development, manufacture or sale of biotechnology or pharmaceutical products or services and any businesses reasonably ancillary, incidental, comparable or related thereto.

     (aa) The Lessee shall not allow at any time the aggregate amount of Advances received by the Lessee, together with all Interest, Lessor Yield, fees and Transaction Expenses or any other Capitalized Costs incurred or accruing with respect thereto, to exceed the aggregate Commitments.

     (bb) [Reserved].

     (cc) The General Contractor for the Construction of the Property shall be the Gilbane Building Company or any contractor acceptable to the Construction Consultant and the Agent.

     (dd) Upon Completion of the Property, the Lessee shall deliver to the Financing Parties a certification by the Gilbane Building Company in form and substance satisfactory to each addressee to the effect that the conditions set forth in Section 8.3A(bb) have been met.

     (ee) The Lessee will keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all applicable Law shall be made of all dealings and transactions in relation to its businesses and activities; and, provided that the Financing Parties use reasonable efforts to minimize disruption to the business of

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the Lessee and its Subsidiaries, permit representatives of the Financing Parties, from time to time, to visit and inspect its properties and to inspect, audit and make extracts from its books, records and files, including without limitation management letters prepared by independent accountants and to discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects.

     8.4. Sharing of Certain Payments.

     Except for Excepted Payments, the parties hereto acknowledge and agree that all payments due and owing by the Lessee to the Lessor under the Lease or any of the other Operative Agreements shall be made by the Lessee directly to the Agent as more particularly provided in Section 8.3 hereof. The Agent, the Primary Financing Parties and the Lessee acknowledge the terms of Section 8.7 of this Agreement regarding the allocation of payments and other amounts made or received from time to time under the Operative Agreements and agree that all such payments and amounts are to be allocated as provided in Section 8.7 of this Agreement.

     8.5. Grant of Easements, etc.

     The Agent and the Primary Financing Parties hereby agree that, so long as no Event of Default shall have occurred and be continuing, and until such time as the Agent gives instructions to the contrary to the Lessor after the occurrence and continuance of such Event of Default, the Lessor shall, with the prior consent of the Agent not to be unreasonably withheld, from time to time at the request of the Lessee, in connection with the transactions contemplated by the Agency Agreement, the Lease or the other Operative Agreements, (i) grant easements and other rights with respect to the Property, (ii) release existing easements or other rights which are for the benefit of the Property, (iii) execute and deliver to any Person any instrument appropriate to confirm or effect such grants or releases and (iv) execute and deliver to any Person such other documents or materials in connection with the acquisition, development, construction, testing, demolition or operation of the Property, including without limitation reciprocal easement agreements, construction contracts, operating agreements, development agreements, plats, replats or subdivision documents; provided, that each of the agreements referred to in this Section 8.5 shall be of the type normally executed by the Lessee in the ordinary course of its business and shall be on commercially reasonable terms so as not to diminish the value of the Property in any material respect or otherwise have a Material Adverse Effect.

     8.6. Appointment of the Agent by the Primary Financing Parties.

     (a) The Secured Parties acknowledge and agree and direct that the rights and remedies of the beneficiaries of the Lien of the Security Documents shall be exercised by the Agent on behalf of the Secured Parties; provided, in all cases, the Agent shall allocate payments and other amounts received in accordance with Section 8.7. The Agent is further appointed to provide notices under the Operative Agreements on behalf each Primary Financing Party (as determined by the Agent, in its reasonable discretion), to receive notices under the Operative Agreements on behalf of each Primary Financing

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Party and (subject to Section 8.5) to take such other action under the Operative Agreements on behalf of the Lessor as the Agent shall determine in its reasonable discretion from time to time. The Agent hereby accepts such appointments. Further, the Agent shall be entitled to take such action on behalf of the Lessor as is delegated to the Agent under any Operative Agreement (whether express or implied) as may be reasonably incidental thereto.

     (b) Each Primary Financing Party hereby designates and appoints the Agent as the agent of such Primary Financing Party under this Agreement and the other Operative Agreements, and each such Primary Financing Party authorizes the Agent, in such capacity, to execute the Operative Agreements as agent for and on behalf of such Primary Financing Party, to take such action on behalf of such Primary Financing Party under the provisions of this Agreement and the other Operative Agreements and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and other Operative Agreements, together with such other powers as are reasonably incidental thereto. Subject to the terms of the Operative Agreements, each of the Primary Financing Parties directs the Agent to exercise such powers, make such decisions and otherwise perform such duties as are delegated to the Agent hereunder or thereunder. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Primary Financing Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Operative Agreement or otherwise exist against the Agent.

     (c) The Agent may execute any of its duties under this Agreement and the other Operative Agreements by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

     (d) Neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Operative Agreement (except for its or such Person’s own gross negligence, willful misconduct or its or such Person’s failure to use ordinary care in the handling of funds) or (b) responsible in any manner to any of the Primary Financing Parties for any recitals, statements, representations or warranties made by the Borrower or the Lessee or any officer thereof contained in this Agreement or any other Operative Agreement or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Operative Agreement or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Operative Agreement or for any failure of the Borrower or the Lessee to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Primary Financing Party to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions

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of, this Agreement or any other Operative Agreement, or to inspect the properties, books or records of the Borrower or the Lessee.

     (e) The Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including without limitation counsel to the Borrower or the Lessee), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof and Wachovia Development Corporation as the Lessor for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Operative Agreement unless it shall first receive such advice or concurrence of the Lessor, the Majority Secured Parties or all the Primary Financing Parties, as the case may be, as set forth in any Operative Agreement or it shall first be indemnified to its satisfaction by the Primary Financing Parties against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Operative Agreements, and any action taken or failure to act pursuant thereto shall be binding upon all the Primary Financing Parties, all future holders of the Notes and future entities acting as the Lessor.

     (f) The Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder (other than the failure of the Lessee to pay Basic Rent as and when due) unless the Agent has received written notice from a Primary Financing Party, the Lessee or the Borrower referring to this Agreement or such other Operative Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that the Agent receives such a notice, the Agent shall give notice thereof to the Primary Financing Parties and the Lessee. The Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Majority Secured Parties or otherwise as determined pursuant to intercreditor provisions of any other agreement among the Primary Financing Parties; provided, that unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Primary Financing Parties; provided, further, the foregoing shall not limit the rights of the Lessor or the Majority Secured Parties or all the Primary Financing Parties, as the case may be, as described in this Agreement or any other Operative Agreement.

     (g) Each Primary Financing Party expressly acknowledges that neither the Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including without limitation any review of the affairs of the Borrower or the Lessee, shall be deemed to constitute any representation or warranty by the Agent to any

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Primary Financing Party. Each Primary Financing Party represents to the Agent that it has, independently and without reliance upon the Agent or any other Primary Financing Party, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrower and the Lessee and made its own decision to make its Credit Loans or make its Mortgage Loans or to make its Lessor Advances and enter into this Agreement. Each Primary Financing Party also represents that it will, independently and without reliance upon the Agent or any other Primary Financing Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Operative Agreements, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrower and the Lessee. The Agent agrees to provide to the Primary Financing Parties notices, reports and other documents that are customarily provided by the Agent in its capacity as Agent in transactions similar to the transactions contemplated hereby and by the other Operative Agreements. Except for notices, reports and other documents expressly required to be furnished to the Primary Financing Parties by the Agent hereunder, the Agent shall not have any duty or responsibility to provide any Primary Financing Party with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of the Borrower or the Lessee which may come into the possession of the Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

     (h) Each of the Lessor and the Investors (based on each such party’s pro rata share of the aggregate Commitment) agree to indemnify the Agent, in its capacity as such (to the extent not reimbursed by the Lessee and without limiting any obligation of the Lessee under and in accordance with the terms of the Operative Agreements to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Notes and Lessor Advances shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the payment of the Notes and the Lessor Advances) be imposed on, incurred by or asserted against any of them in any way relating to or arising out of, the Commitments, this Agreement, any of the other Operative Agreements or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by any of them under or in connection with any of the foregoing; provided, that no Primary Financing Party shall be liable for the payment of any portion of such liabilities, obligations, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Agent, or its failure to use ordinary care in the handling of funds. The agreements in this Section shall survive the payment of the Notes and the Lessor Advances and all other amounts payable hereunder.

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     (i) The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or the Lessee as though the Agent were not the Agent hereunder and under the other Operative Agreements.

     (j) (i) The Agent may resign at any time as the Agent upon sixty (60) days’ notice to the Primary Financing Parties, the Borrower and, so long as no Lease Event of Default shall have occurred and be continuing, the Lessee. If the Agent shall resign as the Agent under this Agreement, a successor Agent shall be appointed by the Majority Secured Parties which successor Agent shall be subject to the approval of, so long as no Lease Event of Default shall have occurred and be continuing, the Lessee, such approval not to be unreasonably withheld or delayed. If no successor Agent is appointed prior to the effective date of the resignation of the resigning Agent, the Agent may appoint, after consulting with the Primary Financing Parties and subject to the approval of, so long as no Lease Event of Default shall have occurred and be continuing, the Lessee, such approval not to be unreasonably withheld or delayed, a successor Agent. Any successor Agent, however appointed, shall be a bank or trust company incorporated and doing business within the United States of America and having a combined capital and surplus of at least $200,000,000, if there be such an institution willing, able and legally qualified to perform the duties of the Agent hereunder upon reasonable or customary terms. If no successor Agent has accepted appointment as the Agent by the date which is sixty (60) days following a retiring Agent’s notice of resignation, the retiring Agent’s notice of resignation shall nevertheless thereupon become effective and the Primary Financing Parties shall perform all of the duties of the Agent until such time, if any, as the Majority Secured Parties appoint a successor Agent, as provided for above. If no successor Agent shall have been appointed in accordance with the provisions of this Section 8.6(j)(i) on or before the effective date of such resignation, the Lessee shall pay Rent to such Person or Persons and at such location as the parties hereto shall agree at such time. Upon the effective date of such resignation, only such successor Agent shall succeed to all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such successor agent and the retiring Agent’s rights, powers and duties in such capacity shall be terminated. After any retiring Agent resigns hereunder as the Agent, the provisions of this Section 8.6 shall inure to such retiring Agent’s benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement.

     (ii) The Agent may be removed (x) by any of the Majority Secured Parties in the case of fraud, misappropriation of funds or the commission of illegal acts by the Agent or where the Agent has failed to perform its obligations hereunder or under any other Operative Agreement in any material respect, or (y) any time at the request of any Primary Financing Party, but only with the consent of the Majority Secured Parties and so long as no Lease Event of Default shall have occurred and be continuing, the Lessee. Any such removal shall be effective upon the acceptance of appointment of a successor Agent in accordance with the provisions of paragraph (i) of this Section 8.6(j); provided, however, to the extent the Agent being replaced pursuant to clause (x) of this Section 8.6(j)(ii) is also a

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Lender, such Person shall not be permitted to vote in connection with the appointment or approval of a successor Agent pursuant to paragraph (i) of this Section 8.6(j).

     (k) Other than the exercise of reasonable care to assure the safe custody of the Collateral while being held by the Agent hereunder or under any other Operative Agreement, the Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Lessee shall be responsible for preservation of all rights in the Collateral, and the Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it to the Lessee. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any of the Collateral.

     8.7. Payments.

     (a) The Lessee has agreed in accordance with the terms of this Agreement to pay to (i) the Agent any and all Rent (excluding Excepted Payments) and any and all other amounts of any kind or type under any of the Operative Agreements due and owing or payable by the Lessee to any party hereto and (ii) each Person as appropriate the Excepted Payments. Promptly after receipt, the Agent shall apply and allocate, in accordance with the terms of this Section 8.7, such amounts received from the Lessee and all other payments, receipts and other consideration of any kind whatsoever received by the Agent pursuant to the Operative Agreements or otherwise received by the Agent or any of the Primary Financing Parties in connection with the Collateral. Ratable distributions among the Lenders and the Lessor under this Section 8.7 shall be made based on (in the case of the Lenders) the ratio of the outstanding Loans to the aggregate Property Cost and (in the case of the Lessor) the ratio of the outstanding Lessor Advances to the aggregate Property Cost.

     (b) Payments and other amounts received by the Agent from time to time in accordance with the terms of subparagraph (a) shall be applied and allocated as follows (subject in all cases to Section 8.7(c)):

     (i) Any such payment or amount identified as or deemed to be Basic Rent shall be applied and allocated by the Agent first, ratably to the Lenders and the Lessor for application and allocation to the payment of Interest on the Loans and to the payment of accrued Lessor Yield with respect to the Lessor Advances and thereafter the principal of the Loans which is due and payable on such date and the portion of the Lessor Advances which is due on such date; and second, if no Lease Default or Lease Event of Default is in effect, any excess shall be paid to such Person or Persons as the Lessee may designate; provided, that if a Lease Default or Lease Event of Default is in effect, such excess (if any) shall instead be

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held by the Agent until the earlier of (I) the first date thereafter on which no Lease Default or Lease Event of Default shall be in effect (in which case such payments or returns shall then be made to such other Person or Persons as the Lessee may designate) and (II) the Maturity Date or the Expiration Date, as the case may be (or, if earlier, the date of any Acceleration), in which case such amounts shall be applied and allocated in the manner contemplated by Section 8.7(b)(iv).

     (ii) If on any date the Agent or the Lessor shall receive any amount in respect of (A) any Casualty or Condemnation pursuant to Sections 15.1(a) or 15.1(g) of the Lease or any Environmental Violation pursuant to Section 15.2 of the Lease (excluding any payments in respect thereof which are payable to the Lessee in accordance with the Lease), or (B) the Termination Value in connection with the delivery of a Termination Notice pursuant to Article XVI of the Lease or (C) the Termination Value in connection with the exercise of the Purchase Option under Section 20.1 of the Lease or the exercise of the option of the Lessor to transfer the Property to the Lessee pursuant to Section 20.3 of the Lease, then in each case, such amount shall be applied (1) if no Acceleration has occurred, to prepay the principal balance of the Loans and the Lessor Advances and the Breakage Costs, if any, on a pro rata basis, a portion of such amount to be distributed to the Lenders and the Lessor or (2) if an Acceleration has occurred, to apply and allocate the proceeds respecting Sections 8.7(b)(ii)(A) through 8.7(b)(ii)(C) in accordance with Section 8.7(b)(iii) hereof.

     (iii) An amount equal to any payment identified as proceeds of the sale or other disposition (or lease upon the exercise of remedies) of the Property or any portion thereof, whether pursuant to Article XXII of the Lease or the exercise of remedies under the Security Documents or otherwise, the exercise of remedies set forth in the Lease and any payment in respect of excess wear and tear pursuant to Section 22.3 of the Lease shall be applied and allocated by the Agent first, ratably to the payment of the principal and Interest of the Mortgage Loans then outstanding, second, to the payment to the Lessor of the outstanding principal balance of all Lessor Advances plus all outstanding Lessor Yield with respect to such outstanding Lessor Advances, third, to the payment to the Hedge Providers of the outstanding termination payments payable to the Hedge Providers pursuant to the Hedging Agreements, fourth, ratably to the payment of the principal and Interest of the Credit Loans then outstanding, fifth, to any and all other amounts owing under the Operative Agreements to the Lenders under the Mortgage Loans (including without limitation the related Breakage Costs), sixth, to any and all other amounts owing under the Operative Agreements to the Lessor (including without limitation the related Breakage Costs), seventh, to the payment to the Hedge Providers of any and all other amounts owing to the Hedge Providers under the Operative Agreements (including without limitation Breakage Costs), eighth, to any and all other amounts owing under the Operative Agreements to the Lenders under the Credit Loans (including without limitation the related Breakage Costs), and ninth, to the extent moneys remain after application and allocation pursuant to clauses first through eighth above, to the Lessor for application and

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allocation to any and all other amounts owing under the Operative Agreements as the Lessor shall determine; provided, where no Event of Default shall exist and be continuing and a prepayment is made for any reason with respect to less than the full amount of the outstanding principal amount of the Loans and the outstanding Lessor Advances, the proceeds shall be applied and allocated ratably to the Lenders and to the Lessor.

     (iv) An amount equal to (A) any such payment identified as a payment pursuant to Section 22.1(b) of the Lease (or otherwise) of the Maximum Residual Guarantee Amount (and any such lesser amount as may be required by Section 22.1(b) of the Lease) in respect of the Property and (B) any other amount payable upon any exercise of remedies after the occurrence and continuance of an Event of Default not covered by Sections 8.7(b)(i) or 8.7(b)(iii) above (including without limitation any amount received in connection with an Acceleration which does not represent proceeds from the sale or liquidation of the Property shall be applied and allocated by the Agent first, ratably, to the payment of the principal and Interest balance of Credit Loans then outstanding, second, ratably to the payment of the principal and Interest balance of the Mortgage Loans then outstanding, third, ratably to the payment of the principal balance of all Lessor Advances plus all outstanding Lessor Yield with respect to such outstanding Lessor Advances, fourth, to the payment to the Hedge Providers of the outstanding termination payments payable to the Hedge Providers pursuant to the Hedging Agreements, fifth, to the payment of any other amounts owing to the Credit Lenders hereunder or under any of the other Operative Agreements (including without limitation the related Breakage Costs), sixth, to the payment of any other amounts owing to the Mortgage Lenders hereunder or under any of the other Operative Agreements (including without limitation the related Breakage Costs), seventh, to the payment of any other amounts owing to the Lessor hereunder or under any of the other Operative Agreements (including without limitation the related Breakage Costs), eighth, to the payment to the Hedge Providers of any and all other amounts owing to the Hedge Providers under the Operative Agreements (including without limitation Breakage Costs), and ninth, to the extent moneys remain after application and allocation pursuant to clauses first through eighth above, to the Agent for application and allocation to any other amounts owing under the Operative Agreements as the Lessor shall determine.

     (v) An amount equal to any such payment identified as Supplemental Rent shall be applied and allocated by the Agent to the payment of any amounts then owing to the Agent, the Lenders, the Lessor, the Hedge Providers and the other parties to the Operative Agreements (or any of them) (other than any such amounts payable pursuant to the preceding provisions of this Section 8.7(b)) for which such payment is made in accordance with the provisions of Operative Agreements; provided, however, that Supplemental Rent received upon the exercise of remedies after the occurrence and continuance of an Event of Default in lieu of or in substitution of the Maximum Residual Guarantee Amount or as a

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partial payment thereon shall be applied and allocated as set forth in Section 8.7(b)(iv).

     (vi) The Agent in its reasonable judgment shall identify the nature of each payment or amount received by the Agent and apply and allocate each such amount in the manner specified above.

     (vii) If possession of the Property is delivered to Lessor pursuant to Section 22.6 of the Lease, then at the end of each calendar month following the Expiration Date, any amounts received by the Agent during the calendar month then ended as proceeds from the sale, rental, or other disposition of the Property and any insurance proceeds paid in connection with a Casualty or Condemnation relating to the Property shall be distributed by the Agent in the following order of priority: first, so much of such payment or amount as shall be required to reimburse the Agent and the Lessor for any expenses, fees, indemnities or other losses incurred by the Agent or the Lessor under the Operative Agreements relating to, or which the Agent or the Lessor determines is allocable to, the Property, second, so much of such amount as shall be required to pay to any Person, including the Agent or the Lessor, all expenses and other costs and expenses of maintaining, operating or insuring the Property, third, so much of such amount as shall be required to pay actual and reasonable costs of selling the Property during the preceding calendar month, including all finders’ and brokers’ fees allocable to the Property, fourth, to the Primary Financing Parties whose Primary Financing Party Balances were not paid in full as of the Expiration Date an amount not to exceed the Lease Supplement Balance for the Property (less the Uninsured Force Majeure Loss for the Property) to pay in full the Post-Expiration Date Balance of each such Primary Financing Party, fifth, solely with respect to a sale of the Property prior to the two year anniversary of the Expiration Date, to the Lessee any unreimbursed Maximum Residual Guarantee Amount; sixth, to the Primary Financing Parties whose Primary Financing Party Balances were not paid in full as of the Expiration Date to pay in full the remainder of the Post-Expiration Date Balance of each such Primary Financing Party, and seventh, the balance, if any, shall be promptly distributed to, or as directed by, the Lessor.

     (c) Upon the payment in full of all amounts then due and owing by the Lessee under the Operative Agreements (but subject to the distribution and allocation provisions of Section 8.7(b) above), any moneys remaining with the Agent shall be returned to the Lessee. It is agreed that, prior to the application and allocation of amounts received by the Agent and/or the Lessor in the order described in Section 8.7(b) above or any distribution of money to the Lessee, any such amounts shall first be applied and allocated to the payment of (i) any and all sums advanced by the Agent and/or the Lessor in order to preserve the Collateral or to preserve the Liens thereon, (ii) the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Collateral, or of any exercise by the Agent of its rights under the Security Documents, together with reasonable attorneys’ fees and expenses and court costs and (iii) any and all other amounts reasonably owed to the Agent under or in connection with the transactions

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contemplated by the Operative Agreements (including without limitation any accrued and unpaid administration fees). The Agent shall not, to its knowledge, duplicate payment of amounts in connection with the distribution and allocation of amounts pursuant to Sections 8.7(b) and 8.7(c).

     8.8. Release of the Property, etc.

     If the Lessee shall at any time purchase the Property pursuant to the Lease, or the Construction Agent shall purchase the Property pursuant to the Agency Agreement, or if the Property shall be sold in accordance with Article XXII of the Lease, then, upon satisfaction by the Borrower of its obligation to prepay the Financing and all other amounts owing to the Primary Financing Parties under the Operative Agreements, the Agent is hereby authorized and directed to release the Property from the Liens created by the Security Documents to the extent of its interest therein. In addition, upon the termination of the Commitments and the payment in full of the Financing and all other amounts owing by the Borrower and the Lessee hereunder or under any other Operative Agreement, the Agent is hereby authorized and directed to release the Property from the Liens created by the Security Documents to the extent of its interest therein. Following any such release, the Agent shall, at the sole cost and expense of the Lessee, execute and deliver to the Borrower and the Lessee such documents as the Borrower or the Lessee shall reasonably request to evidence such release.

     8.9. Limitation of Lessor’s Obligations.

     (a) The Lessor shall not have any duty or obligation to manage, control, use, make any payment in respect of, register, record, insure, inspect, sell, dispose of or otherwise deal with the Property or any other part of the Borrower’s Interest, or to otherwise take or refrain from taking any action under or in connection with any Operative Agreement to which the Lessor is a party, except as expressly provided by the terms of the Operative Agreements or in written instructions from all the Primary Financing Parties and/or the Majority Secured Parties, as applicable, received pursuant to Section 8.6; and no implied duties or obligations shall be read into the Operative Agreements against the Lessor. The Lessor shall have no duty or obligation to supervise or monitor the performance of the Construction Agent under the Agency Agreement, which for all purposes shall be an independent contractor. The Lessor nevertheless agrees that it will promptly take all action as may be necessary to discharge any Lessor Liens on any part of the Property.

     (b) The Lessor agrees that it will not manage, control, use, sell, dispose of or otherwise deal with the Property or any other part of the Borrower’s Interest except (a) as required by the terms of the Operative Agreements, (b) in accordance with the powers granted to, or the authority conferred upon, it pursuant to the Operative Agreements or (c) in accordance with the express terms hereof and with written instructions from all the Primary Financing Parties and/or the Majority Secured Parties, as applicable, pursuant to Section 8.6.

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     (c) Except in accordance with written instructions furnished pursuant to an applicable provision of the Operative Agreements (expressly cited in such instructions), and without limitation of the generality of Section 8.9(a), the Lessor shall not have any duty to (i) file, record or deposit any Operative Agreement or any other document, or to maintain any such filing, recording or deposit or to refile, rerecord or redeposit any such document; (ii) obtain insurance on the Property or effect or maintain any such insurance, other than to receive and forward to each Primary Financing Party and the Agent any notices, policies, certificates or binders furnished to the Lessor pursuant to the Lease; (iii) maintain the Property; (iv) pay or discharge any Tax or any Lien owing with respect to or assessed or levied against any part of the Borrower’s Interest, except as provided in the last sentence of Section 8.9(a), other than to forward notice of such Tax or Lien received by the Lessor to each Primary Financing Party and the Agent; (v) confirm, verify, investigate or inquire into the failure to receive any reports or financial statements of Lessee or any other Person; (vi) inspect the Property at any time or ascertain or inquire as to the performance or observance of any of the covenants of Lessee or any other Person under any Operative Agreement with respect to the Property; or (vii) manage, control, use, sell, dispose of or otherwise deal with the Property or any part thereof or any other part of the Borrower’s Interest, except as provided in Section 8.9(b).

     (d) The Lessor, in the exercise or administration of its powers pursuant to the Operative Agreements, may, at the expense and, so long as no Lease Default or Lease Event of Default shall have occurred and be continuing, with the consent of Lessee (which amounts may be funded prior to the Construction Period Termination Date in accordance with the Operative Agreements) employ agents, attorneys, accountants, and auditors and enter into agreements with any of them and the Lessor shall not be liable for the default or misconduct of any such agents, attorneys, accountants or auditors if such agents, attorneys, accountants or auditors shall have been selected by it with reasonable care.

      8.10. No Representations or Warranties as to the Property or Operative Agreements.

      THE LESSOR MAKES (i) NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE TITLE, VALUE, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT except that the Lessor hereby represents, warrants and covenants to each Primary Financing Party and the Lessee that it will comply with the last sentence of Section 8.9(a), and (ii) no representation or warranty as to the validity or enforceability of any Operative Agreement as against any Person other than the Lessor or as to the correctness of any statement made by a Person other than the Lessor contained in any thereof.

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     8.11. Reliance; Advice of Counsel.

     The Lessor shall not incur any liability to any Person in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper reasonably believed by it to be genuine and believed by it in good faith to be signed by the proper party or parties. The Lessor may accept and rely upon a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the manner of ascertainment of which is not specifically prescribed herein, the Lessor may for all purposes of the Operative Agreements rely on an Officer’s Certificate of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Lessor for any action taken or omitted to be taken by it reasonably in good faith in reliance thereon. In the administration of the Lessor’s duties, the Lessor may execute and perform its powers and duties directly or through agents or attorneys and may consult with counsel, accountants and other skilled Persons to be selected and employed by it, and the Lessor shall not be liable for anything done, suffered or omitted reasonably in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled Persons and not contrary to the Operative Agreements.

     8.12 [Reserved].

     8.13. [Reserved].

     8.14. Non-Disturbance.

     In the event of a foreclosure under any Security Document upon the occurrence of an Event of Default, so long as there shall then exist no Lease Event of Default, the Primary Financing Parties agree, for themselves and their respective successors and assigns, that neither the leasehold interest, right of possession nor use and enjoyment of the Property by Lessee under the Lease shall be extinguished or terminated by reason of such foreclosure, but rather the Lease shall continue in full force and effect and the Lease (subject to the rights of the Lessee pursuant to Section 10.1(d)) shall automatically and unconditionally become a direct lease between the Primary Financing Parties or any successor thereto, as lessor as if such Primary Financing Parties or successor were the Lessor originally named in the Lease, and Lessee. If any award, compensation or proceeds of insurance are received by or turned over to the Agent or any Primary Financing Party in accordance with the Lease, in respect of any Casualty or Condemnation (collectively, as used in this Section 8.14, “proceeds”), and if a Lease Default or Lease Event of Default shall not have occurred and be continuing, then the Agent and the Primary Financing Parties shall make available for expenses related to the Restoration of the Property, all such proceeds it receives pursuant to the terms of the Lease.

     8.15 Payment of Appraiser Expenses.

     Notwithstanding any provision in any Operative Agreement to the contrary, each of the Lessor and the Investors hereby agrees to pay its ratable share (based on each such party’s pro

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rata share of the aggregate Commitment) of the fees or expenses of any appraiser otherwise payable by the Lessor pursuant to Section 22.4 of the Lease.

     8.16 Bankruptcy Petition Against the Conduit.

     Each of the parties hereto (other than the Conduit) (by accepting the benefits of this Agreement) hereby agrees that it will not institute against, or join any other Person in instituting against, the Conduit any Insolvency Proceeding so long as any Commercial Paper Note issued by the Conduit shall be outstanding and there shall not have elapsed one year and one day since the last day on which any such Commercial Paper Note shall have been outstanding.

SECTION 9. RIGHTS UNDER THE CREDIT AGREEMENTS.

     Notwithstanding anything to the contrary contained in the Credit Agreements, the Agent, the Lenders, the Lessor and the Lessee hereby agree that, prior to the occurrence and continuation of any Lease Default or Lease Event of Default, the Lessee shall have the following rights of the Borrower:

     (a) the right to receive notices and provide notices and elections pursuant to Section 2.1(c) of the Credit Agreements;

     (b) the right to provide notices pursuant to Section 2.3(a) of the Credit Agreements;

     (c) the right to terminate or reduce Lender Commitments pursuant to Section 2.5(a) of the Credit Agreements;

     (d) the rights of the Borrower in connection with the replacement of an Investor pursuant to Section 2.7(b) of the Credit Agreements;

     (e) the right to receive notices pursuant to Section 2.8(a) of the Credit Agreements;

     (f) the right to exercise the conversion and continuation options pursuant to Section 2.12 of the Credit Agreements;

     (g) the right to approve any successor agent pursuant to Section 8.6 of this Agreement;

     (h) the right to consent to any assignment by an Investor pursuant to Section 9.8 of the Credit Agreements and the right to the information to be provided to the Borrower pursuant to Section 9.8 of the Credit Agreements;

     (i) the right to inspect the Register pursuant to Section 9.9 of the Credit Agreements; and

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     (j) without limiting the foregoing clauses (a) through (i), and in addition thereto, the Lessee shall have the right to perform the obligations of and exercise any other rights of the Borrower under the Credit Agreements upon not less than twenty (20) Business Days’ prior written notice from the Lessee to the Agent unless the Agent, on behalf of the Borrower and in its reasonable discretion, objects to such exercise within twenty (20) Business Days of receipt of such notice. The Lessee shall make elections and exercise its rights pursuant to this Section 9 in a consistent manner with regard to each Credit Agreement. Failure to do so shall void the particular election or exercise of rights by the Lessee.

SECTION 10. TRANSFER OF INTEREST.

     10.1. Restrictions on Transfer.

     (a) Any Lender may participate, assign or transfer all or a portion of its interest hereunder and under the other Operative Agreements in accordance with Sections 9.7 and 9.8 of the applicable Credit Agreement; provided, that any Lender that participates, assigns or transfers all or a portion of its interest hereunder and under the other Operative Agreements shall deliver to the Agent a copy of each Assignment and Acceptance (as referenced in Section 9.8 of each Credit Agreement) for purposes of maintaining the Register and shall also deliver to the Lessee a copy of such Assignment and Acceptance for the Lessee’s records; provided, no such Assignment and Acceptance shall be required to be delivered to the Agent or the Lessee in connection with an assignment, participation or transfer by any Investor of its interest in or under the Liquidity Agreement except to the extent an assignment and acceptance is required thereunder. The Lessor may, subject to the rights of the Lessee under the Lease and the other Operative Agreements and to the Lien of the applicable Security Documents, directly or indirectly, assign, convey, appoint an agent with respect to enforcement of, or otherwise transfer any of its right, title or interest in or to the Property, the Lease and the other Operative Agreements (including without limitation any right to indemnification thereunder), or any other document relating to the Property or any interest in the Property as provided in the Lease to any Eligible Lessor; provided, in such case, so long as no Lease Default or Lease Event of Default shall have occurred and be continuing, the Lessee shall have the right to require the Lessor (unless such transfer or conveyance has already occurred, in which case the Lessee shall have the right to require such transferee) to transfer its interest to an Eligible Lessor selected by the Lessee, in its sole discretion; provided, further, the Lessor and/or its assignee shall be responsible for any cost or expense incurred by the Lessor in connection with any assignment, conveyance, appointment or transfer by the Lessor pursuant to this Section 10.1(a). The provisions of the immediately preceding sentence shall not apply to the obligations of the Lessor to transfer the Property to the Lessee or a third party purchaser pursuant to Article XXII of the Lease upon payment for the Property in accordance with the terms and conditions of the Lease. The Lessee may not assign any of the Operative Agreements or any of its

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rights or obligations thereunder or with respect to the Property in whole or in part to any Person without the prior written consent of the Agent and the Primary Financing Parties.

     (b) Notwithstanding anything to the contrary in Section 10.1(a), no consent shall be required from the Agent, the Lessee or any Primary Financing Party (but Lessor shall provide one hundred eighty (180) days (or such shorter period as required by the Legal Requirement giving rise to the assignment, conveyance, appointment or transfer contemplated by this Section 10.1(b)) written notice to the Agent and the Lessee) in connection with any assignment, conveyance, appointment or transfer by the Lessor required by any Legal Requirement of all or any of its right, title or interest in or to the Property, the Lease and the other Operative Agreements (including without limitation any right to indemnification thereunder), or any other document relating to the Property or any interest in the Property as provided in the Lease to an Eligible Lessor; provided, in such case, so long as no Lease Default or Lease Event of Default shall have occurred and be continuing, the Lessee shall have the right to require the Lessor (unless such transfer or conveyance has already occurred, in which case the Lessee shall have the right to require such transferee) to transfer its interest to an Eligible Lessor selected by the Lessee, in its sole discretion; provided, further, the Lessee shall be responsible for any cost or expense incurred by the Lessor in connection with any assignment, conveyance, appointment or transfer by the Lessor pursuant to this Section 10.1(b).

     (c) The Lessee agrees to indemnify the Lessor for any loss, claim or increased costs incurred by the Lessor and quantified to the Lessee in writing by the Lessor in reasonable detail as a result of any change in GAAP that adversely affects the Lessor; provided, however, in the case of such a change in GAAP that adversely affects the Lessor, as long as no Lease Default or Lease Event of Default shall have occurred and be continuing, Lessee shall have the right to require the Lessor to transfer its interest to an Eligible Lessor selected by the Lessee, in its sole discretion; provided, further, nothing in the preceding proviso shall limit the obligation of the Lessee to provide the indemnity set forth in this Section 10.1(c).

     (d) Upon the occurrence and during the continuance of an Event of Default by the Lessor (unless such Event of Default is a Lease Event of Default), the Lessee shall have the right to require the Lessor to transfer its interest in the Property and the Operative Agreements to an Eligible Lessor selected by the Lessee, in its sole discretion.

     (e) Notwithstanding any provisions to the contrary contained in any Operative Agreements, the Conduit may at any time assign, or grant a security interest in or sell a participation interest in, any Loan (or portion thereof) or Note (or portion thereof) to any Person. The parties to any such assignment, grant or sale of participation interest, shall execute and deliver to the Agent, for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties and the Deal Agent.

     (f) On or about July 1, 2003, certain businesses of Wachovia Securities, Inc. (“WSI”) will be transferred, assigned or otherwise conveyed (the occurrence of such

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event, the “Transfer”) to Wachovia Capital Markets, LLC or another newly formed Affiliate of WSI (“WCM”). For purposes of the Operative Agreements, each of the parties to this Agreement expressly consents to the assignment by WSI of all of its rights and obligations under the Operative Agreements to WCM simultaneous with the Transfer. For purposes of the Operative Agreements, each of the parties to this Agreement acknowledges and agrees that upon the occurrence of the Transfer, such assignment shall be effective without any further action by any of the parties hereto or any other such Operative Agreement and from and after the Transfer: (i) WCM shall be a party to each Operative Agreement to which WSI had been a party and shall have all rights and obligations of WSI hereunder or thereunder, as the case may be, and (ii) WSI shall cease to be a party to any such Operative Agreement and shall be released from its obligations hereunder or thereunder, as the case may be.

     10.2. Effect of Transfer.

     From and after any transfer effected in accordance with this Section 10, the transferor shall be released, to the extent of such transfer, from its liability hereunder and under the other documents to which it is a party in respect of obligations to be performed on or after the date of such transfer; provided, however, that any transferor (excluding the Conduit in connection with any such transfer under or pursuant to the Liquidity Agreement) shall remain liable hereunder and under such other documents to the extent that the transferee shall not have assumed the obligations of the transferor thereunder. Upon any transfer by the Lessor or any other Primary Financing Party as above provided, any such transferee shall assume the obligations of the Lessor or such Primary Financing Party, as the case may be, and shall be deemed the “Lessor” and/or a “Primary Financing Party”, as the case may be, for all purposes of such documents and each reference herein to the transferor shall thereafter be deemed a reference to such transferee for all purposes, except as provided in the preceding sentence. Notwithstanding any transfer of all or a portion of the transferor’s interest as provided in this Section 10, the transferor shall be entitled to all benefits accrued and all rights vested prior to such transfer including without limitation rights to indemnification under any such document.

     10.3. Permitted Refinancing of Loans.

     Notwithstanding any provision to the contrary in any Operative Agreement, so long as no Lease Default or a Lease Event of Default shall have occurred and be continuing, the Lessee may request the Agent to facilitate a refinancing of the Credit Loans and the Mortgage Loans with institutional investors in order to change the relative amount of Mortgage Loans to Credit Loans; provided, in any event, any such refinancing must be on terms and conditions that are reasonably satisfactory to all Financing Parties. Such request to the Agent shall be made pursuant to a notice from the Lessee to the Agent and the Primary Financing Parties delivered not less than thirty (30) days prior to the anticipated closing date for such assignment. Such assignment shall be accomplished in accordance with the provisions of Section 10.1 of this Agreement and Section 9.8 of the Credit Agreements. Concurrent with the effective date of such assignment, one or more amendment documents (in form and substance satisfactory to the Financing Parties, the Lessee and any such assignee) regarding the Operative Agreements shall also be executed and

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effective in order to modify the Operative Agreements with regard to the inclusion of such institutional investors as Lenders.

SECTION 11. INDEMNIFICATION.

     11.1. General Indemnity.

        Subject to the limitations set forth in Section 11.7 hereof, whether or not any of the transactions contemplated hereby shall be consummated, the Indemnity Provider hereby assumes liability for and agrees to defend, indemnify and hold harmless each Indemnified Person on an After Tax Basis from and against any Claims which may be imposed on, incurred by or asserted against an Indemnified Person by any third party, or otherwise incurred by any Indemnified Person in connection with one or more Hedging Agreements including without limitation Claims arising from the negligence of an Indemnified Person (but not to the extent such Claims arise from the gross negligence or willful misconduct of such Indemnified Person, as determined by a court of competent jurisdiction) and Claims for loss or damage arising out of or as a result of the grant or denial of equitable relief in any way relating to or arising or alleged to arise out of the negotiation, execution, delivery, performance or enforcement of or compliance with this Agreement, the Lease or any other Operative Agreement or on or with respect to the Property or any component thereof, the Collateral or any component thereof, or the ownership of any Loan or Note or the making of any Lessor Advance, including without limitation Claims in any way relating to or arising or alleged to arise out of (a) the financing, refinancing, purchase, acceptance, rejection, ownership, transfer of ownership, design, construction, refurbishment, development, delivery, non-delivery, redelivery, leasing, subleasing, possession, use, occupancy, operation, maintenance, repair, modification, transportation, condition, sale, return, manufacture, ordering, transfer, titling or re-titling, registration or re-registration, storage, removal, mortgaging, granting any interest in, acquisition, repossession (whether by summary proceedings or otherwise), transfer of title to or other application or disposition of the Property or any part thereof or in the Collateral or any portion thereof, including without limitation the acquisition, holding or disposition of any interest in the Property, the Collateral, lease or agreement comprising a portion of any thereof; (b) any patent or latent or other defects in the Property or any portion thereof or in the Collateral or any portion thereof whether or not discoverable by an Indemnified Person or the Indemnity Provider or any other Person; (c) a violation of, or penalties arising from any violation of, Environmental Laws, Environmental Claims or the release of any substance into the environment or other loss of or damage to any property or the environment, relating to the Property, the Collateral, the Lease, the Agency Agreement or the Indemnity Provider; (d) the Operative Agreements, or any transaction contemplated thereby; (e) any breach by the Indemnity Provider of any of its representations or warranties under the Operative Agreements to which the Indemnity Provider is a party or failure by the Indemnity Provider to perform or observe any covenant or agreement to be performed by it under any of the Operative Agreements or the failure of the Indemnity Provider, the Lease, the Property or the Collateral to comply with applicable Law; (f) the transactions contemplated hereby or by

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any other Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) personal injury, death, property damage or loss, including without limitation Claims based on strict or absolute liability in tort or negligence; (h) any Claim not referenced in subsection (g) based on strict liability in tort or negligence; (i) any claim for patent, trademark, trade name or copyright infringement; (j) any fees, expenses and/or other assessments by any business park or any other applicable entity with oversight responsibility for the Property; (k) the failure of the Indemnity Provider to vest and maintain vested in the Agent (on behalf of the Secured Parties) or to transfer to the Agent (on behalf of the Secured Parties), a security interest in the Collateral, free and clear of any Lien whether existing at the time of any borrowing or at any time thereafter other than Permitted Liens and Lessor Liens; (l) any failure of the Indemnity Provider to perform its duties or obligations in accordance with the provisions of the Operative Agreements; (m) the failure by the Indemnity Provider to pay when due any Taxes for which the Indemnity Provider is liable, including without limitation, sales, excise or personal property taxes payable in connection with the Lease; (n) any repayment by the Agent, the Deal Agent, a Lender, the Lessor, an Affected Party or a Secured Party of any amount previously distributed hereunder which amount the Agent, the Deal Agent, a Lender, the Lessor, an Affected Party or a Secured Party believes in good faith is required to be repaid; (o) any investigation, litigation or proceeding related to the Operative Agreements or the use of proceeds of Loans or Lessor Advances or the ownership of the Notes or the making of an Lessor Advance or in respect to the Lease; (p) the failure to file, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable Laws with respect to any Collateral, whether at the time of any Loan or Lessor Advance or at any subsequent time; (q) any dispute, claim, offset or defense of the Indemnity Provider to the payment with respect to any Loan, Lessor Advance or Note (including without limitation a defense based on a Loan, a Lessor Advance a Note or any Operative Agreement not being a legal, valid and binding obligation of the Indemnity Party enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Loans, Lessor Advances, Notes or the Operative Agreements or the furnishing or failure to furnish such merchandise or services; (r) any inability to obtain any judgment in, or utilize the court or other adjudication system of, any state in which the Indemnity Provider may be located as a result of the Indemnity Provider’s failure to qualify to do business or file any notice or business activity or similar report; (s) any products liability claim or personal injury or property damage suit or other similar or related claim or action of whatever sort arising out of or in connection with the Collateral or services that are the subject of any Collateral; (t) the use of the proceeds of any Loan or Lessor Advance in a manner other than as provided in the Operative Agreements; or (u) the failure of the Indemnity Provider or any of its respective agents or representatives to remit to the Lenders, the Lessor, the Agent or the Deal Agent, collections, rents or payments remitted to the Indemnity Provider or any agent or representative.

       If a written demand is made against any Indemnified Person or if any proceeding shall be commenced against such Indemnified Person (including without limitation a written notice of such proceeding) for any Claim, such Indemnified Person shall promptly notify the Indemnity

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Provider in writing and shall not take action with respect to such Claim without the consent of the Indemnity Provider for thirty (30) days after the receipt of such notice by the Indemnity Provider; provided, however, that in the case of any such Claim, if action shall be required by law or regulation to be taken prior to the end of such period of thirty (30) days, such Indemnified Person shall endeavor to, in such notice to the Indemnity Provider, inform the Indemnity Provider of such shorter period, and no action shall be taken with respect to such Claim without the consent of the Indemnity Provider before seven (7) days before the end of such shorter period unless the Indemnified Person shall be required by such law or regulation to take action prior to the end of such seven (7) day period; provided, further, that the failure of such Indemnified Person to give the notices referred to in this sentence shall not diminish the Indemnity Provider’s obligation hereunder except to the extent such failure precludes the Indemnity Provider from contesting all or any part of such Claim, but only for the portion of the Claim that the Indemnity Provider is precluded from contesting.

     If, within thirty (30) days of receipt of such notice from the Indemnified Person (or such shorter period as the Indemnified Person has notified the Indemnity Provider is required by law or regulation for the Indemnified Person to respond to such Claim), the Indemnity Provider shall request in writing that such Indemnified Person respond to such Claim, the Indemnified Person shall, at the reasonable expense of the Indemnity Provider, in good faith conduct and control such action (including without limitation by pursuit of appeals) (provided, however, that (A) if such Claim, in the Indemnity Provider’s reasonable discretion, can be pursued by the Indemnity Provider on behalf of or in the name of such Indemnified Person, the Indemnified Person, at the Indemnity Provider’s request, shall allow the Indemnity Provider to conduct and control the response to such Claim and (B) in the case of any Claim (and notwithstanding the provisions of the foregoing subsection (A)), the Indemnified Person may request in writing that the Indemnity Provider conduct and control the response to such Claim (with counsel to be selected by the Indemnity Provider and consented to by such Indemnified Person, such consent not to be unreasonably withheld or delayed; provided, however, that any Indemnified Person may retain separate counsel at the expense of the Indemnity Provider in the event of a potential conflict of interest between such Indemnified Person and the Indemnity Provider)) by, in the sole discretion of the Person conducting and controlling the response to such Claim (1) resisting payment thereof, (2) not paying the same except under protest, if protest is necessary and proper, (3) if the payment be made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings, or (4) taking such other action as is reasonably requested by the Indemnity Provider from time to time.

     The party controlling the response to any Claim shall consult in good faith with the non-controlling party and shall keep the non-controlling party reasonably informed as to the conduct of the response to such Claim; provided, that all decisions ultimately shall be made in the discretion of the controlling party. The parties agree that an Indemnified Person may at any time decline to take further action with respect to the response to such Claim and may settle such Claim if such Indemnified Person shall waive its rights to any indemnity from the Indemnity Provider that otherwise would be payable in respect of such Claim (and any future Claim, the pursuit of which is precluded by reason of such resolution of such Claim) and shall pay to the Indemnity Provider any amount previously paid or advanced by the Indemnity Provider pursuant to this Section 11.1 by way of indemnification or advance for the payment of an amount

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regarding such Claim, except reasonable expenses therefrom incurred by such Indemnified Person in connection with the response to such Claim.

     Notwithstanding the foregoing provisions of this Section 11.1, an Indemnified Person shall not be required to take any action and the Indemnity Provider shall not be permitted to respond to any Claim in its own name or that of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to pay and shall pay to such Indemnified Person on demand and on an After Tax Basis all reasonable costs, losses and expenses that such Indemnified Person actually incurs in connection with such Claim, including without limitation all reasonable legal, accounting and investigatory fees and disbursements and the Indemnity Provider shall have agreed that the Claim is an indemnifiable Claim hereunder, (B) the Indemnified Person shall have reasonably determined that the action to be taken will not result in any material danger of sale, forfeiture or loss of the Property, or any part thereof or interest therein, will not interfere with the payment of Rent, and will not result in risk of criminal liability, (C) if such Claim shall involve the payment of any amount prior to the resolution of such Claim, the Indemnity Provider shall provide to the Indemnified Person an interest-free advance in an amount equal to the amount that the Indemnified Person is required to pay (with no additional net after-tax cost to such Indemnified Person) prior to the date such payment is due, (D) in the case of an appeal of an adverse determination of a Claim that must be pursued in the name of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall have provided to such Indemnified Person an opinion of independent counsel selected by the Indemnity Provider and reasonably satisfactory to the Indemnified Person stating that the position asserted in such appeal will more likely than not prevail and (E) no Event of Default by the Indemnity Provider shall have occurred and be continuing. In no event shall an Indemnified Person be required to appeal an adverse judicial determination to the United States Supreme Court. In addition, an Indemnified Person shall not be required to contest any Claim in its name (or that of an Affiliate) if the subject matter thereof shall be of a continuing nature and shall have previously been decided adversely to the position taken by the Indemnity Provider by a court of competent jurisdiction pursuant to the contest provisions of this Section 11.1, unless there shall have been a change in law (or interpretation thereof) and the Indemnified Person shall have received, at the Indemnity Provider’s expense, an opinion of independent counsel selected by the Indemnity Provider and reasonably acceptable to the Indemnified Person stating that as a result of such change in law (or interpretation thereof), it is more likely than not that the Indemnified Person will prevail in such contest. In no event shall the Indemnity Provider be permitted to adjust or settle any Claim without the consent of the Indemnified Person to the extent any such adjustment or settlement involves, or is reasonably likely to involve, any performance by or adverse admission by or with respect to the Indemnified Person.

     11.2. General Tax Indemnity.

         (a) Subject to the limitations set forth in Section 11.7 hereof, the Indemnity Provider shall pay and assume liability for, and does hereby agree to indemnify, protect and defend the Property and all Indemnified Persons, and hold them harmless against, all Impositions on an After Tax Basis, and all payments pursuant to the Operative Agreements shall be made free and clear of and without deduction for any and all present and future Impositions.

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     (b) Notwithstanding anything to the contrary in Section 11.2(a) hereof, the following shall be excluded from the indemnity required by Section 11.2(a):

     (i) Taxes (other than Taxes that are, or are in the nature of, sales, use, rental, value added, ad valorem, transfer or property taxes) that are imposed on a Indemnified Person by the United States federal government that are based on or measured by the net income (including without limitation taxes based on capital gains and minimum taxes) of such Person; provided, that this clause (i) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made;

     (ii) Taxes (other than Taxes that are, or are in the nature of, sales, use, rental, value added, ad valorem, transfer or property taxes) that are imposed on any Indemnified Person by any state or local jurisdiction or taxing authority within any state or local jurisdiction and that are based upon or measured by the net income (including without limitation taxes based on capital gains and minimum taxes) of such Person; provided that such Taxes shall not be excluded under this subparagraph (ii) to the extent such Taxes would have been imposed had the location, possession or use of the Property in, the location or the operation of the Lessee in, or the Lessee’s making payments under the Operative Agreements from, the jurisdiction imposing such Taxes been the sole connection between such Indemnified Person and the jurisdiction imposing such Taxes; provided, further, that this clause (ii) shall not be interpreted to prevent a payment from being made on an After Tax Basis if such payment is otherwise required to be so made;

     (iii) any Tax to the extent it relates to any act, event or omission that occurs after the termination of the Lease and redelivery or sale of the Property in accordance with the terms of the Lease (but not any Tax that relates to such termination, redelivery or sale and/or to any period prior to such termination, redelivery or sale);

     (iv) any Taxes which are imposed on an Indemnified Person as a result of the gross negligence or willful misconduct of such Indemnified Person itself, as determined by a court of competent jurisdiction (as opposed to gross negligence or willful misconduct imputed to such Indemnified Person), but not Taxes imposed as a result of ordinary negligence of such Indemnified Person; and

     (v) Impositions imposed or assessed by the PBGC on any Financing Party or on any pension plan (as defined in ERISA Section 3(2)) maintained by any Financing Party.

Notwithstanding the foregoing, the exclusions from the definition of “Impositions” set forth in clauses (i), (ii) and (iii) shall not apply (but the other exclusions shall apply) to any Taxes or increase in Taxes imposed on an Indemnified Person net of any decrease in Taxes realized by

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such Indemnified Person, to the extent that such tax increase or decrease would not have occurred if on each date of an Advance the Primary Financing Parties has advanced funds to the Lessee in the form of a loan secured by the Property in an amount equal to the Acquisition and Construction Advances funded on such date of an Advance, with debt service equal to the Basic Rent payable on each Schedule Interest Payment Date and a principal balance at the maturity of such loan in an amount equal to the then outstanding amount of the Notes at the end of the term of the Lease.

     (c) (i) Subject to the terms of Section 11.2(f) and 11.7, the Indemnity Provider shall pay or cause to be paid in a timely manner all Impositions directly to the taxing authorities where feasible and otherwise to the Indemnified Person, as appropriate, and the Indemnity Provider shall at its own expense, upon such Indemnified Person’s reasonable request, furnish to such Indemnified Person copies of official receipts or other satisfactory proof evidencing such payment.

     (ii) In the case of Impositions for which no contest is conducted pursuant to Section 11.2(f) and which the Indemnity Provider pays directly to the taxing authorities, the Indemnity Provider shall pay such Impositions prior to the latest time permitted by the relevant taxing authority for timely payment. In the case of Impositions for which the Indemnity Provider reimburses an Indemnified Person, the Indemnity Provider shall do so within ten (10) days after receipt by the Indemnity Provider of demand by such Indemnified Person describing in reasonable detail the nature of the Imposition and the basis for the demand (including without limitation the computation of the amount payable), accompanied by receipts or other reasonable evidence of such demand. In the case of Impositions for which a contest is conducted pursuant to Section 11.2(f), the Indemnity Provider shall pay such Impositions or reimburse such Indemnified Person for such Impositions, to the extent not previously paid or reimbursed pursuant to subsection (a), prior to the latest time permitted by the relevant taxing authority for timely payment after conclusion of all contests under Section 11.2(f).

     (iii) At the Indemnity Provider’s request, the amount of any indemnification payment by the Indemnity Provider pursuant to subsection (a) shall be verified and certified by an independent public accounting firm mutually acceptable to the Indemnity Provider and the Indemnified Person. The fees and expenses of such independent public accounting firm shall be paid by the Indemnity Provider unless such verification shall result in an adjustment in the Indemnity Provider’s favor of ten percent (10%) or more of the payment as computed by the Indemnified Person, in which case such fee shall be paid by the Indemnified Person.

     (d) The Indemnity Provider shall be responsible for preparing and filing any real and personal property or ad valorem tax returns in respect of the Property. In case any other report or tax return shall be required to be made with respect to any obligations of the Indemnity Provider under or arising out of subsection (a) and of which the

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Indemnity Provider has knowledge or should have knowledge, the Indemnity Provider, at its sole cost and expense, shall notify the relevant Indemnified Person of such requirement and (except if such Indemnified Person notifies the Indemnity Provider that such Indemnified Person intends to prepare and file such report or return) (A) to the extent required or permitted by and consistent with Legal Requirements, make and file in the Indemnity Provider’s name such return, statement or report; and (B) in the case of any other such return, statement or report required to be made in the name of such Indemnified Person, advise such Indemnified Person of such fact and prepare such return, statement or report for filing by such Indemnified Person or, where such return, statement or report shall be required to reflect items in addition to any obligations of the Indemnity Provider under or arising out of subsection (a), provide such Indemnified Person at the Indemnity Provider’s expense with information sufficient to permit such return, statement or report to be properly made with respect to any obligations of the Indemnity Provider under or arising out of subsection (a) no later than fifteen (15) days prior to the due date thereof. Such Indemnified Person shall, upon the Indemnity Provider’s request and at the Indemnity Provider’s expense, provide any data maintained by such Indemnified Person (and not otherwise available to or within the control of the Indemnity Provider) with respect to the Property which the Indemnity Provider may reasonably require to prepare any required tax returns or reports.

     (e) As between the Indemnity Provider on one hand, and each Financing Party on the other hand, the Indemnity Provider shall be responsible for, and the Indemnity Provider shall indemnify and hold harmless each Financing Party (without duplication of any indemnification required by subsection (a)) on an After Tax Basis against, any obligation for United States or foreign withholding taxes or similar levies, imposts, charges, fees, deductions or withholdings (collectively, “Withholdings”) imposed in respect of the Interest payable on the Notes or with respect to any other payments under the Operative Agreements (all such payments being referred to herein as “Exempt Payments” to be made without deduction, withholding or set off) (and, if any Financing Party receives a demand for such payment from any taxing authority or a Withholding is otherwise required with respect to any Exempt Payment, the Indemnity Provider shall discharge such demand on behalf of such Financing Party); provided, however, that the obligation of the Indemnity Provider under this Section 11.2(e) shall not apply to:

     (i) Withholdings on any Exempt Payment to any Financing Party which is a non-U.S. Person unless such Financing Party is, on the date hereof (or on the date it becomes a Financing Party hereunder) and on the date of any change in the principal place of business or the lending office of such Financing Party, entitled to submit a Form W-8BEN or Form W-8ECI or successor applicable form, certifying in each case that such party is entitled under Section 1441 or 1442 of the Code or any other applicable provision thereof or under any applicable tax treaty or convention to receive payments pursuant to the Operative Agreements without deduction or withholding of United States federal income tax and is a foreign Person thereby entitled to an exemption from United States backup withholding taxes (except where the failure of the exemption results from a change in the principal place of business of the Lessee); provided,

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however, if a failure of the exemption is due to a change in law after the date hereof or in the case of a Financing Party that acquires its interest after the date hereof, a change in law occurring after such date, then the Indemnity Provider shall be liable for any withholding resulting therefrom; or

     (ii) Any U.S. Taxes imposed solely by reason of the failure by a non-U.S. Person to comply with applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of America of such non-U.S. Person if such compliance is required by statute or regulation of the United States of America as a precondition to relief or exemption from such U.S. Taxes if the Indemnity Provider has provided such certification, information, documentation or other reporting requirements to the Financing Party on a timely basis and the Financing Party is eligible for such relief or exemption.

For the purposes of this Section 11.2(e), (A) “U.S. Person” shall mean a citizen, national or resident of the United States of America, a corporation, partnership or other entity created or organized in or under any laws of the United States of America or any State thereof, or any estate or trust that is subject to Federal income taxation regardless of the source of its income, (B) “U.S. Taxes” shall mean any present or future tax, assessment or other charge or levy imposed by or on behalf of the United States of America or any taxing authority thereof or therein, (C) “Form W-8BEN” shall mean Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Withholding) of the Department of the Treasury of the United States of America and (D) “Form W-8ECI” shall mean Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States) of the Department of the Treasury of the United States of America (or in relation to either such Form such successor and related forms as may from time to time be adopted by the relevant taxing authorities of the United States of America to document a claim to which such Form relates). Each of the Forms referred to in the foregoing clauses (C) and (D) shall include such successor and related forms as may from time to time be adopted by the relevant taxing authorities of the United States of America to document a claim to which such Form relates.

     If a Financing Party or an Affiliate with whom such Financing Party files a consolidated tax return (or equivalent) subsequently receives the benefit in any country of a tax credit or an allowance resulting from U.S. Taxes with respect to which it has received a payment of an additional amount under this Section 11.2(e), such Financing Party will pay to the Indemnity Provider such part of that benefit as in the opinion of such Financing Party will leave it (after such payment) in a position no more and no less favorable than it would have been in if no additional payment had been required to be paid, provided always that (i) such Financing Party will be the sole judge of the amount of any such benefit and of the date on which it is received, (ii) such Financing Party will have the absolute discretion as to the order and manner in which it employs or claims tax credits and allowances available to it and (iii) such Financing Party will not be obliged to disclose to the Borrower any information regarding its tax affairs or tax computations. A

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subsequent loss of such tax credit or allowance with respect to which a payment is made pursuant to this paragraph to an Indemnity Provider shall be treated as an Imposition that is indemnifiable under Section 11.2(a) hereof without regard to the exclusions of Section 11.2(b)(i), (ii), and (iii) hereof.

     Each non-U.S. Person that shall become a Financing Party after the date hereof shall, upon the effectiveness of the related transfer or otherwise upon becoming a Financing Party hereunder, be required to provide all of the forms and statements referenced above or other evidences of exemption from Withholdings if the Indemnity Provider has provided such certification, information, documentation or other reporting requirements to the Financing Party and the Financing Party is eligible for such relief or exemption.

     (f) If a written Claim is made against any Indemnified Person or if any proceeding shall be commenced against such Indemnified Person (including without limitation a written notice of such proceeding), for any Impositions, the provisions in Section 11.1 relating to notification and rights to contest shall apply; provided, however, that the Indemnity Provider shall have the right to conduct and control such contest only if such contest involves a Tax other than a Tax on net income of the Indemnified Person that can be pursued independently from any other proceeding involving a Tax liability of such Indemnified Person and the Indemnity Provider agrees to pay to such Indemnified Person on demand the Impositions which are the subject of such claim to the extent the contest is unsuccessful. The controlling party shall provide the non-controlling party with a copy of (or appropriate excerpts from) any reports or claims issued by the relevant auditing agents or taxing authority to the controlling party thereof, in connection with such claim or the contest thereof.

     (g) The parties agree that any party to this Agreement (and each employee, representative, or other agent of such party) may disclose the tax aspects of the transactions contemplated by this Agreement and the structural aspects of these transactions as they relate to such tax aspects without limitation of any kind on such disclosure.

     11.3. Increased Costs, Loan Adequacy; Illegality, etc.

     (a) If either (i) the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation of any law, guideline, rule, directive, request or regulation or (ii) the compliance by a Financing Party or any Affiliate thereof (each of which, an “Affected Party”) with any law, regulation, rule, directive, guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), including, without limitation, compliance by an Affected Party with any request or directive regarding loan adequacy or advance adequacy (A) shall subject an Affected Party to any Tax (except for Taxes on the overall net income of such Affected Party), duty or other charge with respect to a Loan, Lessor Advance, or any right to make Loans or Lessor Advances under the Operative Agreements, or on any payment made under the

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Operative Agreements or (B) shall impose, modify or deem applicable any reserve requirement (including, without limitation, any reserve requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in the determination of the Interest or Lessor Yield), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Affected Party or (C) shall impose any other condition affecting a Loan or a Lessor Advance or a Financing Party’s rights under the Operative Agreements, the result of which is to increase the cost to any Affected Party or to reduce the amount of any sum received or receivable by an Affected Party under the Operative Agreements, then within ten (10) days after demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Lessee shall pay to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered.

     (b) If either (i) the introduction of or any change in or in the interpretation of any law, guideline, rule, regulation, directive or request or (ii) compliance by any Affected Party with any law, guideline, rule, regulation, directive or request from any central bank or other Governmental Authority or agency (whether or not having the force of law), including without limitation compliance by an Affected Party with any request or directive regarding loan adequacy or advance adequacy, has or would have the effect of reducing the rate of return on the Loan or Lessor Advance of any Affected Party as a consequence of its obligations under the Operative Agreements or arising in connection therewith to a level below that which any such Affected Party could have achieved but for such introduction, change or compliance (taking into consideration the policies of such Affected Party with respect to loan adequacy or advance adequacy) by an amount deemed by such Affected Party to be material, then from time to time, within ten (10) days after demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Lessee shall pay to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction. For the avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial Accounting Statements Board shall constitute an adoption, change, request or directive subject to this Section 11.3.

     (c) If as a result of any event or circumstance similar to those described in clauses (a) or (b) of this section, any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with the Operative Agreements or the funding or maintenance of Loans thereunder, then on the Payment Date after demand by such Affected Party, the Lessee shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts paid by it.

     (d) In determining any amount provided for in this section, the Affected Party may use any reasonable averaging and attribution methods. Any Affected Party making a claim under this section shall submit to the Lessee a written description as to such

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additional or increased cost or reduction and the calculation thereof, which written description shall be conclusive absent demonstrable error.

     (e) For purposes of this Section 11.3, Governmental Authority shall include any accounting board or authority (whether or not part of government) which is responsible for the establishment or interpretation of national or international accounting principles in each case whether foreign or domestic.

     (f) If a Financing Party or the Deal Agent on behalf of the Conduit shall notify the Agent that a Eurodollar Disruption Event as described in clause (a) of the definition of “Eurodollar Disruption Event” has occurred, the Agent shall in turn so notify the Lessee, whereupon all Loans in respect of which Interest accrues, and all Lessor Advances in respect of which Lessor Yield accrues, at the Eurodollar Rate shall immediately be converted into Loans or Lessor Advances, as the case may be, in respect of which Interest and Lessor Yield, respectively, accrues at the ABR.

     11.4. Funding/Contribution Indemnity.

     The Lessee agrees to indemnify each Financing Party and to hold each Financing Party harmless from any and all Breakage Costs. Each Financing Party agrees to provide the Lessee prompt written notice of any occurrence which gives rise to Lessee’s indemnification obligations under this Section 11.4.

     11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY, ETC.

     WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY AND ALL OF THE OPERATIVE AGREEMENTS AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PERSON PROVIDING INDEMNIFICATION OF ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE, DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES, EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEY’S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY.

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     11.6. Additional Provisions Regarding Environmental Indemnification.

     Without limiting the generality of Section 11.1, each and every Indemnified Person shall at all times have the rights and benefits, and the Indemnity Provider shall have the obligations, in each case provided pursuant to the Operative Agreements with respect to environmental matters, violations of any Environmental Law, any Environmental Claim or other loss of or damage to any property or the environment relating to the Property, the Collateral, the Lease, the Agency Agreement or the Indemnity Provider (including without limitation the rights and benefits provided pursuant to Section 11.1(c)).

     11.7. Indemnity Prior to Completion Date.

     Notwithstanding the provisions of Sections 11.1, 11.2, 11.3, 11.4, 11.5 and 11.6 and any other indemnity obligations of the Indemnity Provider under the Operative Agreements, (a) the Lessor shall be the only beneficiary of the provisions set forth in Sections 11.1, 11.2, 11.3, 11.4, 11.5 and 11.6 and any other indemnity obligations of the Indemnity Provider under the Operative Agreements with respect to any Claim arising thereunder solely for the period prior to the Completion Date related to the Property, and (b) such limited rights of indemnification referenced in Section 11.7(a) (to the extent relating to third-party claims) shall be limited to third-party claims caused by or resulting from the Indemnity Provider’s acts or omissions and/or all other Persons acting by, through or under the Indemnity Provider (including, without limitation, contractors, subcontractors and other Persons contracted or controlled by the Construction Agent). After the Completion Date, each Indemnified Person shall be a beneficiary of the provisions set forth in Sections 11.1 through 11.6.

     To the extent the Indemnity Provider is not obligated to indemnify any Indemnified Person with respect to Claims arising under Sections 11.1, 11.2, 11.3, 11.4, 11.5 or 11.6 and any other indemnity obligations of the Indemnity Provider under the Operative Agreements prior to the Completion Date, the Lessor shall provide such indemnities (but only to the extent Loans and Lessor Advances are made available to the Lessor to pay such amounts) in favor of such Indemnified Person in accordance with the relevant provisions of Sections 11.1, 11.2, 11.3, 11.4, 11.5 or 11.6 and any other indemnity obligations of the Indemnity Provider under the Operative Agreements as the case may be. It is acknowledged and agreed that any amount which the Lessor pays in favor of any Indemnified Person with Loans and/or Lessor Advances shall be added to the Property Cost.

     THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE LESSOR PURSUANT TO THIS SECTION 11.7 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY REFERENCED IN SECTION 12.9.

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SECTION 12. MISCELLANEOUS.

     12.1. Survival of Agreements.

     The representations, warranties, covenants, indemnities and agreements of the parties provided for in the Operative Agreements, and the parties’ obligations under any and all thereof, shall survive the execution and delivery of this Agreement, the transfer of the Property to the Lessor, the acquisition of the Property (or any of its components), the construction of any Improvements, the Completion, any disposition of any interest of the Lessor in the Property, the payment of the Notes and the Lessor Advances and any disposition thereof and shall be and continue in effect notwithstanding any investigation made by any party and the fact that any party may waive compliance with any of the other terms, provisions or conditions of any of the Operative Agreements. Except as otherwise expressly set forth herein or in other Operative Agreements, the indemnities of the parties provided for in the Operative Agreements shall survive the expiration or termination of any thereof with respect to matters occurring prior to such expiration or termination.

     12.2. Notices.

     All notices required or permitted to be given under any Operative Agreement shall be in writing. Notices may be served by certified or registered mail, postage paid with return receipt requested; by private courier, prepaid; by facsimile or other telecommunication device capable of transmitting or creating a written record; or personally. Notices sent by mail or courier shall be deemed delivered when delivered as addressed, or if the addressee refuses delivery, when presented for delivery notwithstanding such refusal. Notices delivered by fax shall be deemed delivered when receipt is acknowledged by the addressee or its office. Personal delivery shall be effective when accomplished. Unless a party changes its address by giving notice to the other party as provided herein, notices shall be delivered to the parties at the following addresses:

     If to the Construction Agent or the Lessee, to such entity at the following address:

Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, MD 20850
Attention: Steve Mayer
Telephone:
Fax:

     with a copy to:

Human Genome Sciences, Inc.
9410 Key West Avenue
Rockville, MD 20850
Attention: Jim Davis
Telephone:
Fax:

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     If to the Borrower or the Lessor, to such entity at the following address:

Wachovia Development Corporation
c/o Wachovia Securities, LLC
One Wachovia Center
301 South College Street
Charlotte, NC 28288
Attention: Gabrielle Braverman
Telephone:
Fax:

     If to the Deal Agent or the Conduit, to either at the following address:

Wachovia Securities, LLC
One Wachovia Center, Mail Code: NC0610
Charlotte, NC 28288
Attention: Conduit Administration
Telephone:
Fax:

     with a copy to:

Lord Securities Corp.
2 Wall Street, 19th Floor
New York, NY 10005
Attention: Vice President
Telephone:
Fax:

     If to the Agent, to it at the following address:

Wachovia Bank, National Association
201 South College Street (NC5708)
Charlotte, NC 28288
Attention: Greg Ponder
Telephone:
Fax:

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     with a copy to:

Wachovia Bank, National Association
1970 Chain Bridge Road
3rd Floor
McLean, VA 22102
Attention: J. Kent Thompson
Telephone:
Fax:

     If to any Lender, to it at the address set forth for such Lender in Schedule 2.1 of the applicable Credit Agreement.

     From time to time any party may designate additional parties and/or another address for notice purposes by notice to each of the other parties hereto. Each notice hereunder shall be effective upon receipt or refusal thereof.

     12.3. Counterparts.

     This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one (1) and the same instrument.

     12.4. Terminations, Amendments, Waivers, Etc.

     Each of the parties hereto agrees that:

     (a) except as expressly provided in subsections (b) and (c) below and except for the Unanimous Vote Matters, each Operative Agreement may only be terminated, amended, modified, extended supplemented, restated, replaced or waived upon the approval in writing by the Borrower, the Agent, the Majority Secured Parties and the Lessee (to the extent the Lessee is a party to such Operative Agreement); provided, each termination, amendment, modification, extension, supplement, restatement, replacement or waiver regarding any Operative Agreement which adversely affects the rights of the Lessee shall also require the written consent of the Lessee (not to be unreasonably withheld or delayed) unless a Lease Default or Lease Event of Default shall have occurred and be continuing, provided, further, that each termination, amendment, modification, extension, supplement, restatement, replacement or waiver regarding any Operative Agreement shall also require the written consent of each Financing Party affected thereby (the “Unanimous Vote Matters”), so as to

     (i) except for a pro rata reduction in each such Lender Commitment and a corresponding reduction in the Lessor Commitment or, regarding the Lender Commitment, as otherwise provided in Section 2.5 of the Credit Agreements, reduce the Lender Commitments and/or the Lessor Commitment or extend the scheduled date of maturity of any Note or any Lessor Advance;

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     (ii) extend the scheduled Expiration Date or extend any payment date of any Note or Lessor Advance;

     (iii) reduce the stated rate of Interest payable on any Note or reduce the stated Lessor Yield payable on any Lessor Advance (other than as a result of waiving the applicability of any post-default increase in interest rates or Lessor Yields);

     (iv) modify the priority of any Lien in favor of the Agent under any Security Document;

     (v) subordinate any obligation owed to such Lender or the Lessor;

     (vi) extend the expiration date of such Lender’s Lender Commitment or the Lessor Commitment of the Lessor;

     (vii) terminate, amend, supplement, waive, discharge or modify any provision of this Section 12.4 or reduce the percentages specified in the definitions of Majority Secured Parties or Majority Lenders;

     (viii) release a material portion of the Collateral (except in accordance with Section 8.8);

     (ix) release the Borrower or the Lessee from its obligations under any Operative Agreement or otherwise alter any payment obligations of the Borrower or the Lessee to the Lessor or any Financing Party under the Operative Agreements; or

     (x) terminate, amend, supplement, waive, discharge or modify any provision of Section 8.6 of this Agreement.

     (b) the Mortgage Instrument (and any UCC Financing Statement related thereto) may only be terminated, amended, modified, extended supplemented, restated, replaced or waived upon the approval in writing by the Borrower, the Lessor, (to the extent relating to the Lessee as opposed to relating to the Borrower) the Lessee and (to the extent relating to the Lien in favor of the Lenders under the Mortgage Instrument or UCC Financing Statement) the Majority Lenders.

     (c) each termination, amendment, modification, extension, supplement, restatement, replacement or waiver regarding any Operative Agreement affecting Sections 4.1, 8.2, 8.3, 9.1, 10.1, 10.2, 11.1, 12.1, 13.1, 13.2, 14.1, 14.2, 14.3, 15.1, 15.2, 15.3, 16.1, 16.2, 18.1, 19.1, 19.2, 20.2, 20.3 (excluding all provisions related to payments in Sections 20.2 or 20.3), 22.1, 22.4, 22.5, 23.1 or 24.1 of the Lease or affecting in any way the Collateral or the Property requires the consent of the Lessor.

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     Any such termination, amendment, supplement, waiver, discharge or modification approved, executed, adopted or consented to pursuant to this Section 12.4 shall apply equally to each of the Lenders and the Lessor and shall be binding upon all the parties to this Agreement. In the case of any waiver, each party to this Agreement shall be restored to its former position and rights under the Operative Agreements, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

     If, at a time when the conditions precedent set forth in the Operative Agreements to any Lessor Advance are, in the reasonable opinion of the Agent, satisfied, the Lessor shall fail to fulfill its obligations to make such Lessor Advance, then, for so long as such failure shall continue, the Lessor shall (unless the Lessee and the Majority Secured Parties, determined as if the Lessor were not a “Financing Party”, shall otherwise consent in writing) be deemed for all purposes relating to terminations, amendments, supplements, waivers, discharges or modifications under the Operative Agreements to have no Lessor Advances for purposes of performing the computation of Majority Secured Parties, and shall have no rights under this Section 12.4; provided that any action taken with respect to a Unanimous Vote Matter shall not be effective as against the Lessor without the Lessor’s consent.

     If, at a time when the conditions precedent set forth in the Operative Agreements to any Loan are, in the reasonable opinion of the Agent, satisfied, any Lender (other than the Conduit) shall fail to fulfill its obligations to make such Loan, then, for so long as such failure shall continue, such Lender shall (unless the Lessee and the Majority Secured Parties, determined as if such Lender were not a “Financing Party”, shall otherwise consent in writing) be deemed for all purposes relating to terminations, amendments, supplements, waivers, discharges or modifications under the Operative Agreements to have no Loans for purposes of performing the computation of Majority Secured Parties, and shall have no rights under this Section 12.4; provided that any action taken with respect to a Unanimous Vote Matter shall not be effective as against such Lender without such Lender’s consent.

     Notwithstanding the foregoing, no termination, amendment, supplement, waiver or modification of any Operative Agreement shall, without the consent of each Hedge Provider, (i) terminate, amend, supplement, waive or modify any provision of the applicable provisions of the Operative Agreements relating to Hedging Agreements or the calculation of amounts payable in connection therewith, (ii) extend the scheduled date of maturity of any payment obligation owing to any Hedge Provider pursuant to the Operative Agreements, extend the last day of the Term, extend any payment date of any obligation owing to any Hedge Provider pursuant to the Operative Agreements, reduce any amount payable to any Hedge Provider pursuant to the Operative Agreements, modify the priority of any Lien in favor of the Agent under any Security Document, subordinate any obligation owed to any Hedge Provider, or (iii) terminate, amend, supplement, waive or modify any provision of this Section 12.4 or (so long as Wachovia is a Lender or Wachovia Development Corporation is the Lessor) reduce the percentages specified in the definition of Majority Secured Parties, or (except in accordance with the Operative Agreements) permit any additional rights of assignment or transfer by the Lessor of any of its rights and obligations under any Credit Document or release a material portion of the Collateral (except in accordance with Section 8.8 and provided, the foregoing shall not impair the release of

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Liquid Collateral in accordance with the express provisions of the Operative Agreements) or release the Lessee from its obligations under any Operative Agreement or otherwise alter any payment obligations of the Lessee to the Lessor or any Hedge Provider under the Operative Agreements.

     12.5. Headings, etc.

     The Table of Contents and headings of the various Articles and Sections of this Agreement are for convenience of reference only and shall not modify, define, expand or limit any of the terms or provisions hereof.

     12.6. Parties in Interest.

     Except as expressly provided herein, none of the provisions of this Agreement are intended for the benefit of any Person except the parties hereto.

12.7.  GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE.

     (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO APPLY. Any legal action or proceeding with respect to this Agreement or any other Operative Agreement may be brought in the courts of the State of New York or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each of the parties to this Agreement hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the nonexclusive jurisdiction of such courts. Each of the parties to this Agreement further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at the address set out for notices pursuant to Section 12.2, such service to become effective upon receipt or rejection. Nothing herein shall affect the right of any party to serve process in any other manner permitted by Law.

     (b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO ANY DISPUTE OR THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

     (c) Each of the parties to this Agreement hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement or

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any other Operative Agreement brought in the courts referred to in subsection (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.

     Subject to the other applicable provisions of the Operative Agreements, the parties shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale or under applicable law by judicial foreclosure including a proceeding to confirm the sale; (ii) all rights of self-help including peaceful occupation of real property and collection of rents, set-off and peaceful possession of personal property; and (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and filing an involuntary bankruptcy proceedings. Any claim or controversy with regard to any party’s entitlement to such remedies is a Dispute.

     Each party to this Agreement agrees that it shall not have a remedy of punitive or exemplary damages against any other party in any Dispute and hereby waives any right or claim to punitive or exemplary damages it has now or which may arise in the future in connection with any Dispute.

     12.8. Severability.

     Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     12.9. Liability Limited.

     (a) [Reserved].

     (b) Anything to the contrary contained in this Agreement or in any other Operative Agreement notwithstanding, no Exculpated Person shall be personally liable in any respect for any liability or obligation arising hereunder or in any other Operative Agreement including without limitation the payment of the principal of, or Interest on, the Notes, or for monetary damages for the breach of performance of any of the covenants contained in this Agreement or any of the other Operative Agreements. The Primary Financing Parties and the Agent agree that, in the event any remedies under any Operative Agreement are pursued, neither the Primary Financing Parties nor the Agent shall have any recourse against any Exculpated Person, for any deficiency, loss or Claim for monetary damages or otherwise resulting therefrom and recourse shall be had solely and exclusively against the Borrower’s Interest (excluding Excepted Payments) and the Lessee (with respect to the Lessee’s obligations under the Operative Agreements); but nothing contained herein shall be taken to prevent recourse against or the enforcement of

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remedies against the Borrower’s Interest (excluding Excepted Payments) in respect of any and all liabilities, obligations and undertakings contained herein and/or in any other Operative Agreement. Notwithstanding the provisions of this Section, nothing in any Operative Agreement shall: (i) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Notes arising under any Operative Agreement or secured by any Operative Agreement, but the same shall continue until paid or discharged; (ii) relieve any Exculpated Person from liability and responsibility for (but only to the extent of the damages arising by reason of): active waste knowingly committed by any Exculpated Person with respect to the Property, any fraud, gross negligence or willful misconduct on the part of any Exculpated Person; (iii) relieve any Exculpated Person from liability and responsibility for (but only to the extent of the moneys misappropriated, misapplied or not turned over) (A) except for Excepted Payments, misappropriation or misapplication by the Lessor (i.e., application in a manner contrary to any of the Operative Agreements) of any insurance proceeds or condemnation award paid or delivered to the Lessor by any Person other than the Agent, (B) except for Excepted Payments, any deposits or any escrows or amounts owed by the Construction Agent under the Agency Agreement held by the Lessor or (C) except for Excepted Payments, any rent or other income or funds received by the Lessor from the Lessee that is not turned over to the Agent; (iv) affect or in any way limit the Agent’s rights and remedies under any Operative Agreement with respect to the Rents and rights and powers of the Agent under the Operative Agreements or to obtain a judgment against the Lessee’s interest in the Property pursuant to the terms of the Operative Agreements or the Agent’s rights and powers to obtain a judgment against the Lessor or the Lessee; or (v) relieve any Exculpated Person from liability and responsibility (A) with respect to such Person’s obligations concerning Lessor Liens pursuant to Section 8.2(a) and the last sentence of Section 8.9(a) hereof or (B) to the extent such liability or responsibility is attributable to any representation or warranty of an y Exculpated Person contained in Section 6.1 hereof that was false or inaccurate in any material way when made (provided, that no deficiency judgment or other money judgment shall be enforced against any Exculpated Person except to the extent of the Lessor’s interest in the Borrower’s Interest (excluding Excepted Payments) or to the extent the Lessor may be liable as otherwise contemplated in clauses (ii), (iii) or (v) of this Section 12.9(b)).

     12.10. Rights of the Lessee.

     If at any time all obligations of the Borrower and the Lessee under the Operative Agreements have in each case been satisfied or discharged in full, then the Lessee shall be entitled to (a) terminate the Lease and (b) receive (i) all amounts then held under the Operative Agreements, and all proceeds with respect to, the Property and (ii) a release of the remaining Collateral. Upon the termination of the Lease pursuant to the foregoing clause (a), the Lessor shall transfer to the Lessee or its designee all of its right, title and interest free and clear of the Lien of the Lease, the Lien of the Security Documents and all other Operative Agreements and all Lessor Liens in and to the Property and any amounts or proceeds referred to in the foregoing clause (b) shall be paid over to the Lessee or its designee.

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     12.11. Further Assurances.

     The parties hereto shall promptly cause to be taken, executed, acknowledged or delivered, at the sole expense of the Lessee, all such further acts, conveyances, documents and assurances as the other parties may from time to time reasonably request in order to carry out and effectuate the intent and purposes of this Participation Agreement, the other Operative Agreements and the transactions contemplated hereby and thereby (including without limitation the preparation, execution and filing of any and all Uniform Commercial Code financing statements, filing of the Mortgage Instrument and other filings or registrations which the parties hereto may from time to time request to be filed or effected). The Lessee, at its own expense and without need of any prior request from any other party, shall take such action as may be necessary (including without limitation any action specified in the preceding sentence), or (if the Lessor shall so request) as so requested, in order to maintain and protect all security interests provided for hereunder or under any other Operative Agreement. In addition, in connection with the sale or other disposition of the Property or any portion thereof, the Lessee agrees to execute such instruments of conveyance as reasonably required pursuant to the Operative Agreements in connection therewith.

     12.12. Calculations under Operative Agreements.

     The parties hereto agree that all calculations and numerical determinations to be made under the Operative Agreements by the Lessor shall be made by the Agent and that such calculations and determinations shall be conclusive and binding on the parties hereto in the absence of demonstrable error.

     12.13. Confidentiality.

     Each Financing Party severally agrees to keep confidential all non-public information pertaining to the Lessee or any of its Subsidiaries which is provided to it by the Lessee or any of its Subsidiaries and which an officer of the Lessee or any of its Subsidiaries has requested in writing be kept confidential, and shall not intentionally disclose such information to any Person except:

     (a) to the extent such information is public when received by such Person or becomes public thereafter due to the act or omission of any party other than such Person;

     (b) to the extent such information is lawfully and independently obtained from a source other than the Lessee or any of its Subsidiaries and such information from such source is not, to such Person’s knowledge, subject to an obligation of confidentiality or, if such information is subject to an obligation of confidentiality, that disclosure of such information is permitted;

     (c) to counsel, auditors or accountants retained by any such Person or any Affiliates of any such Person (if such Affiliates are permitted to receive such information pursuant to clause (f) or (g) below), provided they agree to keep such information confidential as if such Person or Affiliate were party to this Agreement and to financial

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institution regulators, including examiners of any Financing Party or any Affiliate thereof in the course of examinations of such Persons;

     (d) in connection with any litigation or the enforcement or preservation of the rights of any Financing Party under the Operative Agreements;

     (e) to the extent required by any applicable statute, rule or regulation or court order (including without limitation, by way of subpoena) or pursuant to the request of any regulatory or Governmental Authority having jurisdiction over any such Person; provided,however, that such Person shall endeavor (if not otherwise prohibited by Law) to notify the Lessee prior to any disclosure made pursuant to this clause (e), except that no such Person shall be subject to any liability whatsoever for any failure to so notify the Lessee;

     (f) any Financing Party may disclose such information to another Financing Party or to any Affiliate of a Financing Party that is a direct or indirect owner of any Financing Party (provided, in each case that such Affiliate has agreed to maintain confidentiality as if it were such Financing Party);

     (g) any Financing Party may disclose such information to an Affiliate of any Financing Party to the extent required in connection with the transactions contemplated hereby or to the extent such Affiliate is involved in, or provides advice or assistance to such Person with respect to, such transactions (provided, in each case that such Affiliate has agreed to maintain confidentiality as if it were such Financing Party);

     (h) in connection with any proposed or actual assignment or grant of a participation by any of the Primary Financing Parties of interests in any Credit Agreement, any Note or the other Operative Agreements to such other financial institution (who shall in turn agree in writing to maintain confidentiality as if it were a Primary Financing Party originally party to this Agreement);

     (i) any Financing Party may disclose such information to any Rating Agency or any organization providing similar services in connection with the rating of commercial paper obligations (including without limitation the Commercial Paper Notes) of the Conduit; or

     (j) any Financing Party may disclose such information to any Liquidity Bank.

       Subject to the terms of Sections 12.13(a)-12.13(h), under the terms of any one or more of which circumstances disclosure shall be permitted, each Financing Party severally agrees to keep confidential all non-public information pertaining to the financing structure described in the unrecorded Operative Agreements. Any Person required to maintain the confidentiality of information as provided in this Section 12.13 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such information as such Person would accord to its own confidential information.

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     Notwithstanding anything herein to the contrary, confidential information shall not include, and the Financing Parties may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and by the other Operative Agreements and all materials of any kind (including opinions or other tax analyses) that are provided to such Financing Party relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the transactions contemplated hereby and by the other Operative Agreements.

     12.14. Financial Reporting/Tax Characterization.

     Lessee agrees to obtain advice from its own accountants and tax counsel regarding the financial reporting treatment and the tax characterization of the transactions described in the Operative Agreements. The Lessor acknowledges that the Lessee and its auditors will be relying upon the information provided pursuant to Sections 8.2(e) and 8.2(f) and the Lessor Confirmation Letters for purposes of determining consolidation under FASB Interpretation No. 46.

     It is the further intent of the Parties to this Agreement that this Agreement and the transaction evidenced by the Operative Agreements conform with and satisfy the requirements of, to the extent applicable, FAS 13, FASB Interpretation No. 46, Emerging Issues Task Force, 1997\Issue 97-1 and Emerging Issues Task Force, 1997\Issue 97-10.

     12.15 Deal Agent.

     The Deal Agent shall take all actions for and on behalf of the Conduit hereunder and under the Operative Agreements as provided in Section 2A of the Credit Agreements.

     12.16 Recourse Against Certain Parties.

     (a)  No recourse under or with respect to any obligation, covenant or agreement (including without limitation the payment of any fees or any other obligations) of any Secured Party as contained in the Operative Agreements or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any administrator of such Secured Party or any incorporator, affiliate, stockholder, officer, employee or director of such Secured Party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that the agreements of such Secured Party contained in the Operative Agreements and all of the other agreements, instruments and documents entered into by it pursuant thereto or in connection therewith are, in each case, solely the corporate obligations of such Secured Party, and that no personal liability whatsoever shall attach to or be incurred by any administrator of such Secured Party or any incorporator, stockholder, affiliate,

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officer, employee or director of such Secured Party or of any such administrator, as such, or any other of them, under or by reason of any of the obligations, covenants or agreements of such Secured Party contained in the Operative Agreements or in any other such instruments, documents or agreements, or that are implied therefrom, and that any and all personal liability of every such administrator of such Secured Party and each incorporator, stockholder, affiliate, officer, employee or director of such Secured Party or of any such administrator, or any of them, for breaches by such Secured Party of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of the Operative Agreements. The provisions of this section shall survive the termination of the Operative Agreements.

     (b)  Notwithstanding anything in the Operative Agreements to the contrary, the Conduit shall not have any obligation to pay any amount required to be paid by it hereunder in excess of any amount available to the Conduit after paying or making provision for the payment of its Commercial Paper Notes. All payment obligations of the Conduit hereunder are contingent on the availability of funds in excess of the amounts necessary to pay its Commercial Paper Notes; and each of the other parties to the Operative Agreements agrees that it will not have a claim under Section 101(5) of the Bankruptcy Code if and to the extent that any such payment obligation owed to it by the Conduit exceeds the amount available to the Conduit to pay such amount after paying or making provision for the payment of its Commercial Paper Notes.

     12.17 Parties in Interest.

     Except as expressly provided herein, none of the provisions of this Agreement are intended for the benefit of any Person except the parties hereto; provided, notwithstanding anything in any Operative Agreement to the contrary, each Hedge Provider is hereby automatically deemed, without further action, to be a third party beneficiary of this Agreement and the other Operative Agreements and to have full right to pursue one or more actions at law or in equity to protect its rights pursuant to this Agreement and the other Operative Agreements and (b) to have appointed Wachovia to act as Agent on its behalf pursuant to Section 8.6 (and Wachovia shall be deemed to have accepted such appointment).

     12.18 Hedging Agreements are not Collateral.

     Notwithstanding any provision in any Security Document to the contrary, all parties to this Agreement acknowledge and agree that no right, title or interest of the Borrower in and to any Hedging Agreement constitutes, or shall constitute, Collateral.

     12.19 Replacement of the Intermediary.

     Notwithstanding any provision of any Operative Agreement to the contrary, the Agent in its sole discretion may elect upon the Completion Date to replace the Intermediary with another Person (which may be Wachovia, an Affiliate of Wachovia or another Person) for all purposes in connection with the Operative Agreements (including without limitation with regard to the Liquid Collateral Agreements and the Punch List Liquid Collateral Agreements). Upon making

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such election, the Agent shall notify the Intermediary and the Lessee, and all such parties shall cooperate to modify and replace all documentation as necessary or appropriate in order to accomplish such replacement of the Intermediary promptly.

     12.20 Amendment and Restatement.

     The parties hereto hereby agree to amend and restate the Original Participation Agreement (in regards to the Property) pursuant to the terms of this Agreement.

     12.21 No Novation.

     The Notes and obligations evidenced and governed by this Agreement regarding Lessor Advances are not intended as a novation, but rather are intended as an amendment and restatement of the indebtedness and Lessor advanced amounts issued previously regarding the Property under the transactions evidence by the Original Participation Agreement and the related transaction documents. The Lenders and the Lessor acquired their respective interests in such indebtedness and in such Lessor advanced amounts pursuant to the Master Transfer Agreement.

[signature pages follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

THE CONSTRUCTION AGENT
AND THE LESSEE:

HUMAN GENOME SCIENCES, INC.
By:	/s/	Steven C. Mayer
Name:			Steven C. Mayer
Title:			Senior Vice President and
			Chief Financial Officer

[signature pages continue]

THE BORROWER AND THE LESSOR:

WACHOVIA DEVELOPMENT CORPORATION
By:	/s/	Evander S. Jones, Jr.
Name:			Evander S. Jones, Jr.
Title:			Vice President

[signature pages continue]

THE CONDUIT, A CREDITOR LENDER
AND A MORTGAGE LENDER:

VARIABLE FUNDING CAPITAL CORPORATION
By:		WACHOVIA SECURITIES, LLC,
		as attorney-in-fact
By:	/s/	Douglas R. Wilson, Sr.
Name:		Douglas R. Wilson, Sr.
Title:		Vice President

[signature pages continue]

THE INVESTORS, THE ADDITIONAL
CREDIT LENDERS AND THE
ADDITIONAL MORTGAGE LENDERS:

WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/	Barbara K. Angel
Name:		Barbara K. Angel
Title:		Senior Vice President

[signature pages continue]

     THE DEAL AGENT:

WACHOVIA SECURITIES, LLC
By:	/s/	Evander S. Jones, Jr.
Name:		Evander S. Jones, Jr.
Title:		Vice President

THE AGENT:

WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/	Weston R. Garrett
Name:		Weston R. Garrett
Title:		Vice President

[signature pages end]

Appendix A
Rules of Usage and Definitions

I. Rules of Usage

The following rules of usage shall apply to this Appendix A and the Operative Agreements (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context or unless otherwise defined therein:

     (a)  Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined.

     (b)  Except as otherwise expressly provided, references in any document to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such document.

     (c)  The headings, subheadings and table of contents used in any document are solely for convenience of reference and shall not constitute a part of any such document nor shall they affect the meaning, construction or effect of any provision thereof.

     (d)  References to any Person shall include such Person, its successors, permitted assigns and permitted transferees.

     (e) Except as otherwise expressly provided, reference to any agreement means such agreement as amended, modified, extended, supplemented and/or restated from time to time in accordance with the applicable provisions thereof.

     (f)  Except as otherwise expressly provided, references to any law includes any amendment or modification to such law and any rules or regulations issued thereunder or any law enacted in substitution or replacement therefor.

     (g)  When used in any document, words such as “hereunder”, “hereto”, “hereof” and “herein” and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof.

     (h)  References to “including” means including without limiting the generality of any description preceding such term and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned.

     (i)  Each of the parties to the Operative Agreements and their counsel have reviewed and revised, or requested revisions to, the Operative Agreements, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construction and interpretation of the Operative Agreements and any amendments or exhibits thereto.

     (j)  Capitalized terms used in any Operative Agreements which are not defined in this Appendix A but are defined in another Operative Agreement shall have the meaning so ascribed to such term in the applicable Operative Agreement.

     (k)  In computing any period of time for purposes of any Operative Agreement, the mechanics for counting the number of days set forth in Rule 6 of the Federal Rules of Civil Procedure shall be observed.

     (l)  For purposes of the Operative Agreements, any reference to the acquisition of the Property by the Lessor shall be deemed, unless otherwise expressly stated, to refer to the acquisition of a ground leasehold interest in the Property by the Lessor pursuant to the Ground Lease and the acquisition of an interest by the Lessor pursuant to the Appurtenant Rights.

     (m)  For purposes of the Operative Agreements, (i) any reference to a Lease Default shall be deemed to include a reference to an Agency Agreement Default, (ii) any reference to an Agency Agreement Default shall be deemed to include a reference to a Lease Default, (iii) any reference to a Lease Event of Default shall be deemed to include a reference to an Agency Agreement Event of Default, and (iv) any reference to an Agency Agreement Event of Default shall be deemed to include a reference to a Lease Event of Default.

     (n)  For purposes of the Operative Agreements, all references to the “Lessee” or the “Construction Agent” shall be deemed to refer to Human Genome Sciences, Inc., a Delaware corporation, in each of its respective capacities pursuant to the Operative Agreements.

II. Definitions

Appendix A - 2

     “ABR” shall mean, for any day but subject to the last sentence of this definition of “ABR”, a rate per annum equal to the Federal Funds Effective Rate in effect on such day plus 0.35%. For purposes hereof, “Federal Funds Effective Rate” shall mean for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the federal funds rates as quoted by Wachovia and confirmed in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by Wachovia (or, if such day is not a Business Day, for the next preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate determined, in the sole opinion of Wachovia, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. Charlotte, North Carolina time.

     “ABR Lessor Advances” shall mean Lessor Advances the rate of interest applicable to which is based upon the ABR.

     “ABR Loans” shall mean Loans the rate of interest applicable to which is based upon the ABR.

     “Acceleration” shall have the meaning given to such term in Section 6 of the applicable Credit Agreement.

     “Accountants” means Ernst & Young LLP (or any successor thereto), or any other firm of certified public accountants of recognized national standing selected by the Lessee.

     “Accounts” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Accumulated Funding Deficiency” shall have the meaning given to such term in Section 302 of ERISA.

     “Actual Knowledge” shall mean, with respect to the Lessee or any Affiliate of the Lessee, the actual knowledge of any of the following Persons: (i) with respect to facts or occurrences relating to the Property, employees of the Lessee, any Construction Agency Person or any Affiliate of the Lessee (but only such employees of the Lessee, any Construction Agency Person or any Affiliate of the Lessee regularly engaged in supervising the acquisition, construction, use, maintenance or operation of the Property), and (ii) with respect to facts or occurrences unrelated to the Property, any Responsible Officer of the Lessee, any Construction Agency Person or any Affiliate of the Lessee.

     “Additional Collateral Delivery Date” shall mean with respect to each Additional Collateral Demand, the day on or before the fifth Business Day following the making of an Additional Collateral Demand or if one or more Additional Collateral Demands are outstanding and the aggregate amount of the Pledged Securities required to be transferred to the Liquid Collateral Account exceeds $5,000,000, then with respect to all outstanding transfers of Pledged Securities, on the Business Day next following the Business Day when the aggregate amounts required to be transferred to such Liquid Collateral Account first exceeds $5,000,000.

Appendix A - 3

     “Additional Collateral Demand” shall have the meaning given to such term in Section 5.11(c)(i) of the Participation Agreement.

     “Additional Liquid Collateral” shall have the meaning given to such term in Section 5.11(c)(i) of the Participation Agreement.

     “Adjusted Market Value” shall mean with respect to Properly Margined Liquid Collateral, the sum of the Adjusted Market Value (Item) of each Permitted Investment constituting Properly Margined Liquid Collateral in respect of the Liquid Collateral Account on each date such Liquid Collateral is marked-to-market in accordance with Section 8.3A(s) of the Participation Agreement.

     “Adjusted Market Value (Item)” shall mean with respect to each Permitted Investment that constitutes Liquid Collateral on any date that the securities in the Liquid Collateral Account are marked-to-market, the product of the Fair Market Sales Value of the Permitted Investment on such date multiplied by the percentage in the table below under the column marked “Advance Rate to Maintain Properly Margined Liquid Collateral” opposite the type of investment into which such Permitted Investment falls.

	Advance Rate to Maintain Properly
Types of Permitted Investments	Margined Liquid Collateral
U.S. Treasury Obligations		90	%
Money Market Funds		90	%
Repurchase Obligations		90	%
Mortgage Backed Securities		80	%
Asset Backed Securities		80	%
Negotiable Certificates of Deposit		80	%
Commercial Paper rated A-l, P-1 or better		80	%
U.S. Agency Obligations		80	%
Taxable Municipal Bonds (Moody’s Aaa down through A3; S & P AAA down through A-)		80	%
Bonds (Moody’s Aaa down through A3; S & P AAA down through A-)		70	%
Bank Obligations		80	%
Other Permitted Investments not referenced above	As determined by the Agent in its sole discretion (acting upon the advice of the Majority Secured Parties)

     “Advance” shall mean a Construction Advance and, in accordance with Section 1 of the Participation Agreement, shall be deemed to include the amounts advanced by the Primary Financing Parties to obtain their respective interests pursuant to the Master Transfer Agreement on the Closing Date.

Appendix A - 4

     “Advance Cap” shall have the meaning given to such term in Section 5.17 of the Participation Agreement.

     “Affected Party” shall have the meaning given to such term in Section 11.3(a) of the Participation Agreement.

     “Affiliate” shall mean, with respect to any Person, any Person or group acting in concert in respect of the Person in question that, directly or indirectly, controls or is controlled by or is under common control with such Person.

     “After Tax Basis” shall mean, with respect to any payment to be received, the amount of such payment increased so that, after deduction of the amount of all taxes required to be paid by the recipient calculated at the then maximum marginal rates generally applicable to Persons of the same type as the recipient with respect to the receipt by the recipient of such amounts (less any tax savings realized as a result of the payment of the indemnified amount), such increased payment (as so reduced) is equal to the payment otherwise required to be made.

     “Agency Agreement” shall mean the Amended and Restated Agency Agreement, dated as of the Closing Date, between the Construction Agent and the Lessor.

     “Agency Agreement Default” shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute an Agency Agreement Event of Default.

     “Agency Agreement Event of Default” shall have the meaning given to such term in Section 5.1 of the Agency Agreement.

     “Agent” shall mean Wachovia Bank, National Association, as agent for the Primary Financing Parties pursuant to the Participation Agreement or any successor agent appointed in accordance with the terms of the Participation Agreement and, respecting the Security Documents, as agent for the Secured Parties.

     “Allocated Commercial Paper” shall mean commercial paper issued by or on behalf of the Conduit if the proceeds thereof are used to fund or maintain one or more CP Loans.

     “Applicable Percentage” shall mean:

(a) with respect to the Lender Unused Fee and the Lessor Unused Fee, 0.15% (15 basis points);

(b) with respect to the Liquidity Fee payable in connection with the Loans, (i) 0.20% (20 basis points) if all of the Liquid Collateral in the Liquid Collateral Account subject to the Liquid Collateral Agreements and the Liquid Collateral in the Punch List Liquid Collateral Account subject to the Punch List Liquid Collateral Agreements is Properly Margined Liquid Collateral and (ii) 0.25% (25 basis points) in all other cases;

Appendix A - 5

(c) with respect to Interest on the Credit Loans which are Eurodollar Loans or ABR Loans, 0.55% (55 basis points);

(d) with respect to Interest on the Mortgage Loans which are Eurodollar Loans or ABR Loans, (i) 0.55% (55 basis points) if all of the Liquid Collateral in the Liquid Collateral Account subject to the Liquid Collateral Agreements and the Liquid Collateral in the Punch List Liquid Collateral Account subject to the Punch List Liquid Collateral Agreements is Properly Margined Liquid Collateral and (ii) 1.40% (140 basis points) in all other cases; and

(e) with respect to Lessor Yield on the Lessor Advances which are Eurodollar Lessor Advances or ABR Lessor Advances, 2.25% (225 basis points).

     “Appraisal” shall mean, with respect to the Property, an “as-built” appraisal to be delivered in connection with the Participation Agreement or in accordance with the terms of the Lease, in each case prepared by a reputable appraiser reasonably acceptable to the Agent, which, in the reasonable judgment of counsel to the Agent, complies with all of the provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, the rules and regulations adopted pursuant thereto, and all other applicable Legal Requirements.

     “Appraisal Procedure” shall have the meaning given such term in Section 22.4 of the Lease.

     “Approved Bank” shall mean any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof.

     “Approved State” shall mean the State of Maryland.

     “Appurtenant Rights” shall mean (a) all agreements, easements, rights of way or use, rights of ingress or egress, privileges, appurtenances, tenements, hereditaments and other rights and benefits at any time belonging or pertaining to the Land underlying the Improvements or the Improvements, including without limitation the use of any streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land and (including without limitation the HVAC Easement) and (b) all permits, licenses and rights, whether or not of record, appurtenant to such Land or the Improvements.

     “Asset Backed Securities” shall mean asset backed securities rated AAA by S&P and Aaa by Moody’s.

     “Assigned Facility” shall have the meaning given to such term in EXHIBIT B of the applicable Credit Agreement.

     “Assigned Interest” shall have the meaning given to such term in EXHIBIT B of the applicable Credit Agreement.

Appendix A - 6

     “Assignment” shall have the meaning given to such term in the Cash Collateral Agreement.

     “Assignment and Acceptance” shall mean an Assignment and Acceptance in the form attached to the applicable Credit Agreement as EXHIBIT B.

     “Available Commitment” shall mean (a) as to any Credit Lender, the Available Credit Lender Commitment, (b) as to any Mortgage Lender, the Available Mortgage Lender Commitment and (c) as to the Lessor, the Available Lessor Commitment.

     “Available Credit Lender Commitment” shall mean, as to any Credit Lender at any time, an amount equal to the excess, if any, of (a) in the case of the Investors, the amount of each such Investor’s Credit Loan Commitment (or, in the case of the Conduit, the amount of the Credit Loan Commitment) over (b) the aggregate principal amount of all Credit Loans made by such Credit Lender as of such date (but without giving effect to any repayments or prepayments of any Credit Loans under the Credit Loan Agreement).

     “Available Lender Commitment” shall mean (a) as to any Credit Lender, the Available Credit Lender Commitment and (b) as to any Mortgage Lender, the Available Mortgage Lender Commitment.

     “Available Lessor Commitment” shall mean, as to the Lessor at any time, an amount equal to the excess, if any, of (a) the amount of the Lessor Commitment over (b) the aggregate principal amount of all Lessor Advances made by the Lessor as of such date (but without giving effect to any repayments or prepayments of any Lessor Advances under the Participation Agreement).

     “Available Mortgage Lender Commitment” shall mean, as to any Mortgage Lender at any time, an amount equal to the excess, if any, of (a) in the case of the Investors, the amount of such Investor’s Mortgage Loan Commitment (or, in the case of the Conduit, the amount of the Mortgage Loan Commitment) over (b) the aggregate principal amount of all Mortgage Loans made by such Mortgage Lender as of such date (but without giving effect to any repayments or prepayments of any Mortgage Loans under the Mortgage Loan Agreement).

     “Balance Deposit” shall have the meaning given such term in Section 5.5(c) of the Agency Agreement.

     “Bank Obligations” shall mean bank notes and banker’s acceptances the obligor of which has an unsecured long-term debt rating of at least A by S&P and A2 by Moody’s and has a commercial paper rating of at least A-1 by S&P and P-1 by Moody’s but excluding any such bank notes, banker’s acceptances or any other indebtedness or equity issued by, or any time deposits with, Wachovia or any of its Affiliates.

     “Bankruptcy Code” shall mean Title 11 of the U. S. Code entitled “Bankruptcy,” as now or hereafter in effect or any successor thereto.

Appendix A - 7

     “Bankruptcy Event” shall mean, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

     “Basic Documents” shall mean the following: the Participation Agreement, the Agency Agreement, the Credit Agreements, the Notes, the Lease, the Security Agreement, the Liquid Collateral Agreements and the Punch List Liquid Collateral Agreements.

     “Basic Rent” shall mean an amount equal to the scheduled Interest on the Loans and the Lessor Yield due on any Payment Date (but not including (a) Interest on any Loan or Lessor Yield on any Lessor Advance due prior to the Commencement Date with respect to the Property or (b) any overdue amounts under any Credit Agreement or the Participation Agreement) payable in accordance with the Lease and the Participation Agreement.

     “Basic Term” shall have the meaning given to such term in Section 2.2 of the Lease.

     “Basic Term Expiration Date” shall have the meaning given to such term in Section 2.2 of the Lease.

     “Benefitted Lender” shall have the meaning specified in Section 9.10(a) of the applicable Credit Agreement.

     “Bifurcation Documents” shall mean the various documents identified under the Master Transfer Agreement.

     “Bill of Sale” shall mean a Bill of Sale regarding Equipment in form and substance satisfactory to the Agent.

     “Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).

Appendix A - 8

     “Borrower” shall mean Wachovia Development Corporation, a North Carolina corporation, and any successor, replacement and/or additional borrower under the Credit Agreements expressly permitted under the Operative Agreements.

     “Borrower’s Interest” shall mean the Borrower’s rights in, to and under the Property, the Operative Agreements, any other property contributed on behalf of the Lessee and any and all other property or assets from time to time of the Borrower obtained with respect to the Operative Agreements, including, without limitation, Modifications, and all amounts of Rent, insurance proceeds and condemnation awards, indemnity or other payments of any kind received by the Borrower pursuant to the Operative Agreements; provided, “Borrower’s Interest” shall not include any Lessor Advance or Lessor Yield.

     “Borrowing Date” shall mean any Business Day specified in a notice delivered pursuant to Section 2.3 of the applicable Credit Agreement as a date on which the Lessor requests the Lenders to make Loans thereunder.

     “Breakage Costs” shall mean any amount or amounts as shall compensate a Financing Party for any loss, cost or expense incurred by such Financing Party (as determined by such Financing Party (or, in the case of the Conduit, by the Deal Agent on behalf of the Conduit) in such Person’s sole discretion) as a result of a prepayment on any date other than a Scheduled Interest Payment Date or the Maturity Date of all or a portion of a Loan, a Note, Interest, a Lessor Advance or Lessor Yield.

     “Budgeted Total Property Cost” shall mean, at any date of determination with respect to the Property during the Construction Period, an amount equal to the aggregate amount which the Construction Agent in good faith expects to be requisitioned in order to achieve Completion with respect to the Property.

     “Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Maryland, North Carolina or any other states from which the Agent, any Lender or the Lessor funds the transactions contemplated by the Operative Agreements or engages in administrative activities with respect to the transactions under the Operative Agreements are authorized or required by law to close; provided, however, that when used in connection with a Eurodollar Loan or Eurodollar Lessor Advance, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

     “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

     “Capital Stock” shall mean any nonredeemable capital stock of the Lessee or any of its Subsidiaries or of any other applicable Person, whether common or preferred.

Appendix A - 9

     “Capitalized Costs” shall mean during the Construction Period and to the extent the applicable conditions precedent pursuant to the Operative Agreements have been satisfied (a) Interest to the Credit Lenders pursuant to the Credit Notes, (b) Interest to the Mortgage Lenders pursuant to the Mortgage Notes, (c) Lessor Yield, (d) Transaction Expenses payable pursuant to Section 7 of the Participation Agreement by the Lessor, (e) rent payable with respect to the Ground Lease and scheduled amounts payable with respect to the Appurtenant Rights, (f) Impositions payable by the Construction Agent pursuant to Section 3.11 of the Agency Agreement, (g) insurance premiums payable by the Construction Agent pursuant to Section 3.5 of the Agency Agreement and (h) all amounts payable from time to time regarding any Hedging Agreement including without limitation all scheduled periodic payments and all termination payments.

     “Capitalized Lease” shall mean, as applied to any Person, any lease of property (whether real, personal, tangible, intangible or mixed of such Person) by such Person as the lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.

     “Cash Burn Amount” shall mean for any period, the amount by which the sum (without duplication) for HGSI and its Subsidiaries on a consolidated basis of the following amounts is less than $0:

     (i)     Consolidated Net Income for such period; plus

     (ii)     the amount which, in the determination of Consolidated Net Income for such period, has been deducted for depreciation and amortization (including, without limitation, amortization of goodwill and other intangibles); plus

     (iii)     the non-cash charges which, in the determination of Consolidated Net Income for such period, have been deducted in calculating “purchased in-process research and development expenses”; plus

     (iv)     the non-cash charges which, in the determination of Consolidated Net Income for such period, has been deducted as debt conversion expense or other similar non-cash charges; plus

     (v)     other similar non-cash charges described in clauses (iii) and (iv),

     all as determined in accordance with GAAP.

     “Cash Collateral Agreement” shall mean the Amended and Restated Assignment of Liquid Collateral Account dated as of the Closing Date executed by the Lessee in favor of the Agent, on behalf of the Secured Parties.

     “Cash Collateral Control Agreement” shall mean the Amended and Restated Control Agreement dated as of the Closing Date among the Agent, on behalf of the Secured Parties, the Lessee and the Intermediary.

Appendix A - 10

     “Cash Collateral Test Date” shall mean the last day of each Fiscal Quarter; provided, however, that if at the end of any Fiscal Quarter the aggregate amount of all Unrestricted Cash, Cash Equivalents and Marketable Securities of HGSI and its Subsidiaries on a consolidated basis is less than three hundred million dollars ($300,000,000) for the period of four consecutive Fiscal Quarters then ended, then at all times thereafter, “Cash Collateral Test Date” shall mean the last day of each calendar month.

     “Cash Equivalents” shall mean (a) Government Obligations having maturities of not more than one year from the date of acquisition, (b) certificates of deposit of any commercial bank incorporated under the laws of the United States, or any state, territory or commonwealth thereof, of recognized standing having capital and unimpaired surplus in excess of $500,000,000 and whose short-term commercial paper rating at the time of acquisition is at least A-1 or the equivalent by S&P or at least P-1 or the equivalent by Moody’s (any such bank, an “Approved Bank”), which certificates of deposit have maturities of not more than one year from the date of acquisition, (c) repurchase obligations with a term of not more than thirty-one (31) days for underlying securities of the types described in clauses (a), (b) and (d) of this definition entered into with any Approved Bank which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a), (b) and (d), and (ii) has a market value at the time such repurchase agreement is entered into of not less than one hundred percent (100%) of the repurchase obligation of such lender (or other commercial banking institution) thereunder, (d) commercial paper or financial company paper issued by any person incorporated under the laws of the United States., or any state thereof, and rated at least A-1 or the equivalent by S&P or at least P-1 or the equivalent by Moody’s, and in each case maturing not more than nine (9) months from the date of acquisition and not issued by HGSI or any Affiliate, and (e) investments in money market funds that are registered under the Investment Company Act of 1940,which have assets of at least $100,000,000 and at least ninety-five percent (95%) of whose assets consist of investments or other obligations of the type described in clauses (a) through (d) above and as to which withdrawals are permitted at least every thirty (30) days.

     “Casualty” shall mean any damage or destruction of all or any portion of the Property as a result of a fire or other casualty.

     “CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986.

     “Chattel Paper” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Claims” shall mean any and all obligations, liabilities, losses, actions, suits, penalties, claims, demands, costs and expenses (including without limitation reasonable attorney’s fees and expenses) of any nature whatsoever, but excluding Impositions and make termination payments and all other amounts due and payable from time to time pursuant to one or more Hedging Agreements.

Appendix A - 11

     “Closing” shall mean the initial closing with regard to the execution, delivery and effectiveness of certain of the Operative Agreements as of the Closing Date and the acquisition of the Property by the Lessor as of the Closing Date.

     “Closing Date” shall mean June 30, 2003.

     “Code” shall mean the Internal Revenue Code of 1986 together with rules and regulations promulgated thereunder, as amended from time to time, or any successor statute thereto.

     “Collateral” shall mean all assets of the Lessor, the Construction Agent and the Lessee, now owned or hereafter acquired, upon which a Lien is purported to be created by one or more of the Security Documents.

     “Commencement Date” shall mean the date of Completion.

     “Commercial Paper Notes” shall mean, on any day, any short-term promissory notes issued by the Conduit.

     “Commitment Percentage” shall mean, as to any Primary Financing Party at any time, the percentage which such Primary Financing Party’s Commitment then constitutes of the aggregate Commitments (or at any time after the Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Primary Financing Party’s Financing then outstanding constitutes of the aggregate principal amount of all of the Financing then outstanding).

     “Commitment Period” shall mean the period from and including the Closing Date to and including the Construction Period Termination Date, or such earlier date as the Commitments shall terminate as provided in the applicable Credit Agreement and the Participation Agreement.

     “Commitments” shall mean, (a) as to the Credit Lenders, the Credit Loan Commitments, (b) as to the Mortgage Lenders, the Mortgage Loan Commitments and (c) as to the Lessor, the Lessor Commitment.

     “Completion” shall mean, with respect to the Property, such time as the substantial completion (subject to completion of punch list items) of the Improvements on the Property has been achieved in accordance with the Plans and Specifications and a temporary certificate of occupancy has been issued with respect to the Property by the appropriate governmental entity (except if non-compliance, individually or in the aggregate, shall not have and could not reasonably be expected to have a Material Adverse Effect or if compliance with any of the foregoing is otherwise waived by the Agent upon instruction from the Secured Parties).

     “Completion Date” shall mean the date on which Completion for the Property has occurred.

     “Compliance Certificate” shall mean a certificate executed by an authorized officer of HGSI substantially in the form of EXHIBIT M to the Participation Agreement.

Appendix A - 12

     “Concentration Limits” shall mean

     (a)     there are no limits as to U.S. Treasury Obligations or U.S. Agency Obligations.

     (b)     no Permitted Investment may be transferred to the Liquid Collateral Account if at the time of transfer and at all times thereafter the aggregate amount of Liquid Collateral issued by the same issuer or Issuer Group exceeds or would exceed, after such transfer, five percent (5%) of the Adjusted Market Value or Fair Market Sales Value, as applicable, of the Liquid Collateral (including the Permitted Investments to be transferred) in respect of the Liquid Collateral Account, excepting U.S. Government Obligations that may constitute Liquid Collateral.

     (c)     no securities issued by a United States bank, other United States regulated depository institution and United States insurance company may be transferred to the Liquid Collateral Account if at the time of transfer and at all times thereafter the aggregate amount of bank and insurance company securities, including, for example, negotiable certificates of deposit, commercial paper, bankers acceptances or medium or long-term securities, exceeds or would exceed, after such transfer, eighty percent (80%) of the Adjusted Market Value or Fair Market Sales Value of the Liquid Collateral (including the Permitted Investments to be transferred) in respect of the Liquid Collateral Account at the time the additional Liquid Collateral is to be transferred thereto and at all times thereafter;

provided, that with respect to the Liquid Collateral Account, the Agent and HGSI agree in writing to other or no “Concentration Limits”.

     “Condemnation” shall mean any taking or sale of the use, access, occupancy, easement rights or title to the Property or any part thereof, wholly or partially (temporarily or permanently), by or on account of any actual or threatened eminent domain proceeding or other taking of action by any Person having the power of eminent domain, including without limitation an action by a Governmental Authority to change the grade of, or widen the streets adjacent to, the Property or alter the pedestrian or vehicular traffic flow to the Property so as to result in a change in access to the Property, or by or on account of an eviction by paramount title or any transfer made in lieu of any such proceeding or action.

     “Conduit” shall mean Variable Funding Capital Corporation, a Delaware corporation.

     “Consolidated” refers to the Lessee and its Subsidiaries the accounts of which are consolidated with those of the Lessee for financial reporting purposes.

     “Consolidated Net Income” shall mean with respect to any specified Person for any period, the aggregate of the Net Income of such specified Person and its Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP, “Net Income” of any Person shall mean the net income (loss) of such Person, determined in accordance with GAAP.

Appendix A - 13

     “Consolidated Subsidiary” shall mean, as to any Person, any Subsidiary of such Person which under the rules of GAAP consistently applied should have its financial results consolidated with those of such Person for purposes of financial accounting statements.

     “Construction” shall mean the construction and installation of all Improvements contemplated by the Plans and Specifications.

     “Construction Advance” shall mean an advance of funds to pay Project Costs pursuant to Section 5.4 of the Participation Agreement.

     “Construction Agency Person” shall mean the Construction Agent, the Lessee, any contractor, subcontractor, adviser, architect, engineer, developer, employee, attorney-in-fact or agent with respect to the Property and any other Person that the Construction Agent directly or indirectly supervises, hires or otherwise permits to engage in any Work with respect to the Property, any portion thereof or any Improvements thereto, and any Affiliate of any of the foregoing.

     “Construction Agent” shall mean Human Genome Sciences, Inc., a Delaware corporation, as the construction agent under the Agency Agreement.

     “Construction Agent Related Event” shall have the meaning given to such term in Section 3.6(e) of the Agency Agreement.

     “Construction Budget” shall mean the cost being financed pursuant to the Operative Agreements of acquisition, installation, testing, repairing, renovating, constructing, equipping and developing the Property and other Project Costs (including without limitation Capitalized Costs) as determined by the Construction Agent in its reasonable, good faith judgment.

     “Construction Change” shall mean a revision, amendment or modification to the Plans and Specifications, the schedule for construction of the Property or any of the Construction Contracts (including a change order under any Construction Contract).

     “Construction Commencement Date” shall mean the Closing Date.

     “Construction Consultant” shall mean Inspection And Valuation International, Inc. appointed by the Lessor or such other Person as may be selected by the Lessor and reasonably acceptable to the Lessee.

     “Construction Contract” shall mean each of (i) the construction contract between the Construction Agent and the General Contractor, and (ii) each other contract entered into between the Construction Agent or the Lessee with a Contractor for the construction of Improvements or any portion thereof on the Property, in each case in form and substance reasonably satisfactory to the Lessor.

Appendix A - 14

     “Construction Documents” shall mean each of the Construction Contracts, the Construction Budget, the Construction Schedule, the Plans and Specifications, and each Performance Bond.

     “Construction Failure” shall mean any actual failure (or, any such failure which is reasonably anticipated by the Construction Agent and/or the Agent) to achieve Completion with respect to the Construction Period Property on or prior to the Construction Period Termination Date.

     “Construction Materials” shall mean, collectively, the Improvements to be constructed on the Site in accordance with the Construction Budget, the Construction Schedule and the Plans and Specifications, each of which must satisfy the requirements imposed pursuant to the Operative Agreements.

     “Construction Period” shall mean with respect to the Property the period commencing on the Construction Commencement Date and ending on the Completion Date.

     “Construction Period Property” shall mean the Property prior to the Completion Date.

     “Construction Period Required Amounts” shall mean (a) with respect to the Construction Period Property, all amounts owed by the Construction Agent under or with respect to any Operative Agreement in connection with any Environmental Claim, Environmental Violation or other environmental matter related to the Construction Period Property, including without limitation payments pursuant to Section 11.6, fines and settlements regarding such environmental matters and any remediation and cleanup cost required to be paid pursuant to Section 15.2 of the Lease, (b) (i) any loss, cost or damage suffered by, and any other Claims brought by, any Financing Party as a result of fraud, misapplication of funds, illegal acts or willful misconduct on the part of any Construction Agency Person or (ii) any loss, cost or damage suffered by or any Claim by any Financing Party resulting from the occurrence of any Insolvency Event (each without regard to any limitation of the Construction Agent’s obligations to make a payment of the Maximum Amount or any other limitation in connection with the exercise of remedies upon the occurrence of an Agency Agreement Event of Default or otherwise) and (c) any indemnity claims pursuant to the Operative Agreements including without limitation pursuant to Sections 10.1(c) and 11.1 through 11.7 of the Participation Agreement (but subject to and limited by in all respects the provisions of Section 11.7 of the Participation Agreement).

     “Construction Period Termination Date” shall mean (a) the earlier of (i) the date that the Commitments have been terminated in their entirety in accordance with the terms of the applicable Credit Agreement and the Participation Agreement, or (ii) January 31, 2004 or (b) any such later date as shall be agreed to by the Majority Secured Parties.

     “Construction Schedule” shall mean the schedule prepared by the Construction Agent in its reasonable, good faith judgment reflecting, in reasonable detail, the anticipated progress and timing of the acquisition, installation, testing, repairing, renovating, constructing, equipping and developing the Property.

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     “Contingent Liability” shall mean any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby.

     “Contractor” shall mean each entity with whom the Construction Agent or the Lessee contracts to construct any Improvements or any portion thereof on the Property.

     “Controlled Group” shall mean all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Lessee, are treated as a single employer under Section 414 of the Code.

     “CP Loans” shall mean Loans the rate of interest applicable to which is based upon the CP Rate.

     “CP Rate” shall mean for any day during any Interest Period, the per annum rate equivalent to the weighted average of the per annum rates paid or payable by the Conduit from time to time as interest on or otherwise (by means of interest rate hedges or otherwise taking into consideration any incremental carrying costs associated with short-term promissory notes issued by the Conduit maturing on dates other than those certain dates on which the Conduit is to receive funds) in respect of the promissory notes issued by the Conduit that are allocated, in whole or in part, by the Deal Agent (on behalf of the Conduit) to fund or maintain a Loan during such period, as determined by the Deal Agent (on behalf of the Conduit) and reported to the Lessor and the Lessee, which rates shall reflect and give effect to (i) the commissions of placement agents and dealers in respect of such promissory notes, to the extent such commissions are allocated, in whole or in part, to such promissory notes by the Deal Agent (on behalf of the Conduit) and (ii) other borrowings by the Conduit, including, without limitation, borrowings to fund small or odd dollar amounts that are not easily accommodated in the commercial paper market; provided, however, that if any component of such rate is a discount rate, in calculating the CP Rate, the Deal Agent shall for such component use the rate resulting from converting such discount rate to an interest bearing equivalent rate per annum.

     “Credit Agreement” shall mean the Credit Loan Agreement and/or the Mortgage Loan Agreement, as applicable.

     “Credit Agreement Default” shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Credit Agreement Event of Default.

     “Credit Agreement Event of Default” shall mean any Credit Loan Event of Default and/or any Mortgage Loan Event of Default, as applicable.

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     “Credit Documents” shall mean the Participation Agreement, the Credit Agreements, the Notes and the Security Documents.

     “Credit Lender” shall mean the Conduit and each bank or other financial institution which is from time to time party to any of the Operative Agreements in its capacity as a “Credit Lender”.

     “Credit Loan” shall mean the loans made pursuant to the Credit Loan Commitments and, in accordance with Section 1 of the Participation Agreement, shall be deemed to include the amounts advanced by the Credit Lenders to obtain their respective interests pursuant to the Master Transfer Agreement on the Closing Date.

     “Credit Loan Agreement” shall mean the Amended and Restated Credit Agreement (Credit Loans) dated as of June 30, 2003 among the Borrower, Variable Funding Capital Corporation, as a Lender thereunder, the several Investors from time to time party thereto, Wachovia Securities, LLC, as the Deal Agent, and Wachovia Bank, National Association, as the Agent thereunder.

     “Credit Loan Commitments” shall mean the obligation of the Credit Lenders to make the Credit Loans to the Lessor in an aggregate principal amount at any one time outstanding not to exceed the aggregate of the amounts set forth opposite each Credit Lender’s name on Schedule 2.1 to the Credit Loan Agreement, as such amount may be increased or reduced from time to time in accordance with the provisions of the Operative Agreements; provided, no Credit Lender shall be obligated to make Credit Loans in excess of such Credit Lender’s share of the Credit Loan Commitments as set forth adjacent to such Credit Lender’s name on Schedule 2.1 to the Credit Loan Agreement.

     “Credit Loan Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute a Credit Loan Event of Default.

     “Credit Loan Event of Default” shall have the meaning given to such term in Section 6 of the Credit Loan Agreement.

     “Credit Note” shall mean each promissory note issued in favor of a Credit Lender from time to time pursuant to the Credit Loan Agreement.

     “Deal Agent” shall mean Wachovia Securities, LLC, a Delaware limited liability company.

     “Debt Rating” shall mean, as of any date of determination thereof and with respect to any Person, any of the ratings most recently published by any of the Rating Agencies relating to the unsecured, unsupported senior long-term debt obligations of such Person.

     “Deed” shall mean a bargain and sale deed regarding the Land and/or Improvements in form and substance satisfactory to the Agent.

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     “Deemed Insolvency” shall mean with respect to any Person, such Person (i) is insolvent pursuant to the Uniform Fraudulent Transfers Act or any similar, equivalent or replacement thereof, (ii) is engaged in a business or transaction, or is about to engage in business or a transaction, for which any property remaining with such Person is an unreasonably small amount of capital or (iii) intended to incur, or believed that such Person would incur, debt or other obligations that would be beyond such Person’s ability to pay as such debts and obligations mature or otherwise become due.

     “Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

     “Defaulting Investor” shall have the meaning given to such term in Section 2.3(c) of the applicable Credit Agreement.

     “Deficiency Balance” shall have the meaning given to such term in Section 22.1(b) of the Lease.

     “Deposit Accounts” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Dispute” shall mean any claim or controversy arising out of, or relating to, the Operative Agreements between or among the parties thereto.

     “Documents” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Dollars” and “$” shall mean dollars in lawful currency of the United States of America.

     “Domestic Subsidiary” shall mean, with respect to any Person, any Subsidiary of such Person which is incorporated or organized under the laws of any State of the United States or the District of Columbia.

     “Effective Date” shall have the meaning given to such term in EXHIBIT B of the applicable Credit Agreement.

     “Election Date” shall have the meaning given to such term in Section 20.1 of the Lease.

     “Election Notice” shall have the meaning given to such term in Section 20.1 of the Lease.

     “Eligible Assignee” shall mean (a) any Person whose short-term ratings are at least A-1 by S&P and P-1 by Moody’s or whose obligations under the Operative Agreements are guaranteed by a Person whose short-term ratings are at least A-1 by S&P and P-1 by Moody’s or (b) such other Person satisfactory to the Conduit, the Agent, the Deal Agent and the Rating Agencies rating any Commercial Paper Notes issued by the Conduit.

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     “Eligible Lessor” shall mean a Person with a minimum net worth of at least $200,000,000.00 and a Debt Rating from a Rating Agency of “A” or higher, or any Affiliate of such a Person if such Person otherwise agrees to indemnify the Lenders for any Claim arising solely as a result of a Bankruptcy Event respecting such Affiliate.

     “Employee Benefit Plan” or “Plan” shall mean an employee benefit plan (within the meaning of Section 3(3) of ERISA, including without limitation any Multiemployer Plan), or any “plan” as defined in Section 4975(e)(1) of the Code and as interpreted by the Internal Revenue Service and the Department of Labor in rules, regulations, releases or bulletins in effect on the Closing Date.

     “Engagement Letter” shall have the meaning given to such term in Section 7.5 of the Participation Agreement.

     “Environmental Audit” means a Phase One Environmental Site Assessment (the scope and performance of which meets or exceeds ASTM Standard Practice El527-93 Standard Practice for Environmental Site Assessments: Phase One Environmental Site Assessment Process (or the most recent version thereof)) of the Property.

     “Environmental Claims” shall mean any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or private in nature) relating to or affecting the Property arising (a) pursuant to, or in connection with, an actual or alleged violation of, any Environmental Law, (b) in connection with any Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or other response action in connection with a Hazardous Substance, Environmental Law, or other order of a Tribunal or (d) from any actual or alleged damage, injury, threat, or harm to health, safety, natural resources, or the environment.

     “Environmental Laws” shall mean any Law, permit, consent, approval, license, award, or other authorization or requirement of any Tribunal relating to emissions, discharges, releases, threatened releases of any Hazardous Substance into ambient air, surface water, ground water, publicly owned treatment works, septic system, or land, or otherwise relating to the handling, storage, treatment, generation, use, or disposal of Hazardous Substances, pollution or to the protection of health or the environment, including without limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., and state statutes analogous thereto.

     “Environmental Violation” shall mean any activity, occurrence or condition that violates or threatens (if the threat requires remediation under any Environmental Law and is not remediated during any grace period allowed under such Environmental Law) to violate or results in or threatens (if the threat requires remediation under any Environmental Law and is not remediated during any grace period allowed under such Environmental Law) to result in noncompliance with any Environmental Law relating to or affecting the Property.

     “Equipment” shall mean equipment, apparatus, furnishings, fittings and personal property of every kind and nature whatsoever purchased, leased or otherwise acquired by the Construction Agent, the Lessee or the Lessor using the proceeds of Advances whether or not now owned or

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hereafter acquired, including but without limiting the generality of the foregoing, all heating, electrical, and mechanical equipment, lighting fixtures, switchboards, plumbing, ventilation, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, cleaning systems (including without limitation window cleaning apparatus), computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description, but in all events acquired with the proceeds of the Advances, together with all modifications thereto and replacement thereof.

     “Equipment Schedule” shall mean (a) each Equipment Schedule attached to the applicable Requisition and (b) each Equipment Schedule attached to the Lease Supplement.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

     “ERISA Affiliate” shall mean each entity required to be aggregated with the Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.

     “Eurocurrency Liabilities” shall have the meaning given to such term in Regulation D of the Board, as in effect from time to time.

     “Eurodollar Disruption Event” shall mean the occurrence of any of the following: (a) a determination by a Financing Party that it would be contrary to Law or to the directive of any central bank or other governmental authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to make, fund or maintain any Eurodollar Loan or Eurodollar Lessor Advance, (b) the failure of one or more of the Reference Banks to furnish timely information for purposes of determining the Eurodollar Rate, (c) a determination by a Financing Party that the rate at which deposits of United States dollars are being offered to such Financing Party in the London interbank market does not accurately reflect the cost to such Financing Party of making, funding or maintaining any Eurodollar Loan or Eurodollar Lessor Advance or (d) the inability of a Financing Party to obtain United States dollars in the London interbank market to make, fund or maintain any Eurodollar Loan or Eurodollar Lessor Advance.

     “Eurodollar Lessor Advances” shall mean Lessor Advances the rate of interest applicable to which is based upon the Eurodollar Rate.

     “Eurodollar Loans” shall mean Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

     “Eurodollar Rate” shall mean for the Interest Period for each Eurodollar Loan or Eurodollar Lessor Advance comprising part of the same borrowing or advance (including without limitation conversions, extensions and renewals), a per annum interest rate equal to a fraction expressed as a percentage (rounded upward to the nearest one one-hundredth (1/100) of one percent (1%) (a) with the numerator equal to the LIBOR Rate for such Interest Period and

Appendix A - 20

(b)  the denominator equal to one hundred percent (100%) minus the Eurodollar Reserve Requirement.

     “Eurodollar Reserve Requirement” of any Reference Bank for any period, for any Eurodollar Loan or Eurodollar Lessor Advance shall mean the percentage applicable during such period (or, if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Reference Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term of one month.

     “Event of Default” shall mean a Lease Event of Default, an Agency Agreement Event of Default, a Credit Loan Event of Default, a Mortgage Loan Event of Default, a Liquid Collateral Agreement Event of Default or a Punch List Liquid Collateral Agreement Event of Default.

     “Event of Loss” shall mean any Casualty, Condemnation or Environmental Violation that causes or results in the delivery of a Termination Notice by the Lessee in accordance with Section 16.1 of the Lease.

     “Excepted Payments” shall mean:

          (a)     all indemnity payments (including without limitation indemnity payments made pursuant to Section 11 of the Participation Agreement), whether made by adjustment to Basic Rent or otherwise, to which any Financing Party or any of its Affiliates, agents, officers, directors or employees is entitled;

          (b)     any amounts (other than Basic Rent or Termination Value) payable under any Operative Agreement to reimburse any Financing Party or any of its Affiliates (including without limitation the reasonable expenses of any Financing Party incurred in connection with any such payment) for performing or complying with any of the obligations of the Lessee under and as permitted by any Operative Agreement;

          (c)     any amount payable to any Primary Financing Party by a transferee permitted under the Operative Agreements as the purchase price of the Lessor’s interest in the Borrower’s Interest (which amount shall not include any amounts necessary to pay the principal, interest and Breakage Costs on the Notes, Lessor Advances or any other amount payable to the Agent or the Primary Financing Parties) or such Primary Financing Party’s interest in the transactions contemplated by the Operative Agreements (or a portion thereof);

          (d)     any insurance proceeds (or payments with respect to risks self-insured or policy deductibles) under liability policies other than such proceeds or payments payable to any Financing Party;

Appendix A - 21

     (e)     any insurance proceeds under policies maintained by the Lessor or any other Financing Party pursuant to or in accordance with the terms of the Operative Agreements;

     (f)     Transaction Expenses or other amounts, fees, disbursements or expenses paid or payable to or for the benefit of the Lessor or any other Financing Party;

     (g)     any right, title or interest of the Lessor pursuant to any Hedging Agreement;

     (h)     any payments in respect of interest to the extent attributable to payments referred to in clauses (a) through (g) above; and

     (i)     any rights of the Financing Parties to demand, collect, sue for or otherwise receive and enforce payment of any of the foregoing amounts, provided that such rights shall not include the right to terminate the Lease.

     “Excess Proceeds” shall mean the excess, if any, of the aggregate of all awards, compensation or insurance proceeds payable in connection with a Casualty or Condemnation over the Termination Value paid by the Lessee pursuant to the Lease with respect to such Casualty or Condemnation.

     “Exculpated Persons” shall mean the Lessor (except with respect to the representations and warranties and the other obligations of the Lessor pursuant to the Operative Agreements solely with regard to the provision of Lessor Advances), the Borrower, and their respective successors, assigns, trustees, officers, directors, shareholders, partners, employees, agents and Affiliates.

     “Exempt Payments” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “Expiration Date” shall mean the last day of the Term; provided, in no event shall the Expiration Date be later than six years and eleven months after the Closing Date, unless a later date has been expressly agreed to in writing by each of the Lessee, the Deal Agent, the Agent and the Primary Financing Parties in accordance with the terms and conditions set forth in Section 2.2 of the Lease.

     “Extra Budget Costs” shall mean any actual cost (or, any such cost which is reasonably anticipated by the Construction Agent and/or the Agent) in excess of the Available Commitments necessary for Completion of the Property (a) in accordance with the Construction Budget for the Property and (b) on or prior to the Construction Period Termination Date.

     “Fair Market Sales Value” shall mean (a) with respect to the Property or any other property, the amount, which in any event, shall not be less than zero (0), that would be paid in cash in an arms-length transaction between an informed and willing purchaser and an informed and willing seller, neither of whom is under any compulsion to purchase or sell, respectively, the

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Property (or such other property) and (b) with respect to any Liquid Collateral, the closing bid price of each item of Liquid Collateral on the day the Liquid Collateral is marked-to-market, plus in the case of Liquid Collateral issued on a coupon basis, accrued and unpaid interest and yield thereon until such date, except that with respect to items of Liquid Collateral that will mature within ninety (90) days of the determination date, the amortized amount of such item on such date. Fair Market Sales Value of the Property shall be determined based on the assumption that, except for purposes of Section 17 of the Lease, the Property is in the condition and state of repair required under Section 10.1 of the Lease and the Lessee is in compliance with the other requirements of the Operative Agreements.

     “Federal Funds Effective Rate” shall have the meaning given to such term in the definition of ABR.

     “Final Completion” shall mean, with respect to the Property, such time as the acquisition, installation, testing and final completion (subject to completion of punch list items) of the Improvements on the Property has been achieved in accordance with the Plans and Specifications, the Agency Agreement and/or the Lease, and in compliance with all Legal Requirements and Insurance Requirements and a certificate of occupancy has been issued with respect to the Property by the appropriate governmental entity (except if non-compliance, individually or in the aggregate, shall not have and could not reasonably be expected to have a Material Adverse Effect or if compliance with any of the foregoing is otherwise waived by the Agent upon instruction from the Secured Parties).

     “Final Completion Work” shall mean any work that, subsequent to Completion of the Property, needs to be performed to achieve completion of the Improvements on the Property in accordance with the Plans and Specifications.

     “Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Lessee.

     “Financing” shall mean the financing extended pursuant to the Credit Agreements and the Participation Agreement and shall include both the Loans and the Lessor Advances.

     “Financing Parties” shall mean the Hedge Providers, the Deal Agent, the Agent, and the Primary Financing Parties.

     “FIRPTA” shall mean the Foreign Investors in U.S. Real Property Tax Act of 1980, as amended.

     “Fiscal Quarter” shall mean each of the Lessee’s four fiscal reporting periods ending, respectively, on March 31, June 30, September 30 and December 31 of each year or such other fiscal quarters as then correspond to HGSI’s fiscal year.

     “Fixtures” shall mean all fixtures relating to the Improvements, including without limitation all components thereof, located in or on the Improvements, together with all replacements, modifications, alterations and additions thereto.

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     “Force Majeure Event” shall mean, with respect to Construction, any event (the existence of which at the construction commencement date was not known, or would not reasonably have been expected to be discovered through the exercise of commercially reasonable due diligence, by the Lessee or the Construction Agent, as applicable, taking into account the contemplated use of the Land and the Construction) beyond the control of any such Person, including, but not limited to, general strikes (but not any strike or other job action involving employees of the Construction Agent or any Construction Agency Person or the Lessee), acts of God, government activities directly interfering with the work of construction of the Improvements, any general inability to obtain labor or materials, civil commotion and enemy action; but excluding in all cases any event, cause or condition that results from a breach by the Lessee, the Construction Agent or any Construction Agency Person of its obligations, representations or warranties under the Operative Agreements or any other agreements to which it is a party, from any Construction Agency Person’s financial condition or failure to pay or any event, cause or condition which could have been avoided or which could be remedied or mitigated through the exercise of commercially reasonable efforts or the commercially reasonable expenditure of funds (which expenditure of funds, in the case of such an event, cause or condition arising on or after the Closing Date, would have been covered by funds available under the applicable Construction Budget or Other Available Amounts) or other commercially reasonably action, election or arrangement which would correct or resolve the impact of such event on the Construction.

     “Force Majeure Loss” shall mean the actual construction costs, determined by the insurance company in assessing a claim for such costs under any policy of insurance, or if such loss is not fully insured in whole or in part under any policy of insurance, then as determined by a nationally recognized independent appraiser selected by the Agent, expended to repair and restore damage caused by a Force Majeure Event with respect to the Property (or portion thereof) to the condition of the Property immediately prior to such Force Majeure Event (but excluding all Capitalized Costs and other collateral costs and carrying costs whenever accrued).

     “Form W-8BEN” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “Form W-8ECI” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “Former Tax Affiliate” shall mean, with respect to any corporate Person, any other Person that had been but is not currently affiliated (within the meaning of Section 1504(a) of the Code or any similar provision of state or local law) with such Person, with respect to the period of their affiliation.

     “Forty-five Percent FMV Event” shall have the meaning given to such term in Section 8.2(e) of the Participation Agreement.

     “Full Recourse Event of Default” shall mean (a) an Agency Agreement Event of Default arising in whole or in part as a consequence of any fraudulent act or omission of any Construction Agency Person in connection with the negotiation, execution, delivery, consummation and/or performance of any Operative Agreement or any other contractual

Appendix A - 24

agreement relating to the Property or the construction or work thereon; (b) an Agency Agreement Event of Default arising in whole or in part as a consequence of the misapplication of any Advance or any portion thereof or any other funds made available to, or on behalf of, Construction Agent or any other Construction Agency Person under any Operative Agreement; (c) an Agency Agreement Event of Default arising as a consequence of an Insolvency Event; (d) any Construction Agency Person shall willfully breach any of its respective obligations, covenants, representations or warranties under any Operative Agreement, Construction Document or any other contractual agreement or law relating to the Property or the construction or work thereon; or (e) any Construction Agency Person shall commit any illegal act regarding the Property or otherwise causing any loss, cost or damage to any Financing Party.

     “GAAP” shall mean generally accepted accounting principles, consistently applied, set forth in the opinions and pronouncements of the accounting principles board of the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity (including but not limited to the SEC) as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination.

     “GAAP Eligible Cost” shall mean the Property Cost minus the Structuring Fee paid pursuant to Section 7.6 of the Participation Agreement, minus Lessor Yield accrued prior to the Commencement Date, minus the Lessor Unused Fee paid pursuant to Section 7.4 of the Participation Agreement accrued prior to the Commencement Date, minus Uninsured Force Majeure Losses.

     “General Contractor” shall mean the general contractor in connection with the Property selected by the Construction Agent and reasonably acceptable to Agent.

     “General Intangibles” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Government Obligations” shall mean readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America.

     “Governmental Action” shall mean all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, written interpretations, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any Legal Requirement, and shall include, without limitation, all environmental and operating permits and licenses that are required for the full use, occupancy, zoning and operating of the Property.

     “Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator.

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     “Ground Lease” shall mean a ground lease respecting the Property in favor of the Lessor as a ground lessee, on terms and conditions reasonably satisfactory to the Agent and the Lessor.

     “Ground Lessor” shall mean Traville LLC, a Maryland limited liability company.

     “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

     “Hard Costs” shall mean all costs and expenses payable for supplies, materials, labor, general conditions (including bonds, insurance and utilities) and profit for contractors and subcontractors; fees of a construction manager, if any; administrative, supervision, travel and overhead costs incurred by the Construction Agent or construction manager; permit fees; all so-called “impact”, “tap”, “development” or “traffic generation assessment” fees; periodic on-site inspections required to be made by the project engineer or other special consultants; and the cost of payment and performance bonds required by governmental authorities; in each case with respect to the Improvements under any Construction Contract.

     “Hazardous Substance” shall mean any of the following: (a) any petroleum or petroleum product, explosives, radioactive materials, asbestos, formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance, material, product, derivative, compound or mixture, mineral, chemical, waste, gas, medical waste, or pollutant, in each case whether naturally occurring, man-made or the by-product of any process, that is toxic, harmful or hazardous to the environment or human health or safety as determined in accordance with any Environmental Law; or (c) any substance, material, product, derivative, compound or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would support the assertion of any claim under any Environmental Law, whether or not defined as hazardous as such under any Environmental Law.

     “Hedge Provider” shall mean Wachovia, in its capacity as a party to the various Hedging Agreements.

     “Hedging Agreement” shall mean any interest rate protection agreement provided by the Hedge Provider or any Subsidiary or Affiliate thereof.

     “HGSI” means Human Genome Sciences, Inc., a Delaware corporation.

Appendix A - 26

     “HVAC Easement” shall mean the Declaration of Easements and Covenants Agreement (HVAC Equipment and HVAC Conduits) dated as of or about the Closing Date between the Ground Lessor and the Lessor.

     “Impositions” shall mean any and all liabilities, losses, expenses, costs, charges and Liens of any kind whatsoever for present or future fees, taxes, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever including interest, penalties and additions thereto (collectively, “Taxes”) including but not limited to (i) real and personal property taxes, including without limitation personal property taxes on any property covered by the Lease that is classified by Governmental Authorities as personal property, and real estate or ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes and other similar taxes (including rent taxes and intangibles taxes); (iii) excise taxes; (iv) real estate transfer taxes, conveyance taxes, stamp taxes and documentary recording taxes and fees; (v) taxes that are or are in the nature of franchise, income, value added, privilege and doing business taxes, license and registration fees; (vi) assessments on the Property, including without limitation all assessments for public Improvements or benefits, whether or not such improvements are commenced or completed within the Term; and (vii) taxes, Liens, assessments or charges asserted, imposed or assessed by the PBGC or any governmental authority succeeding to or performing functions similar to, the PBGC; and all interest, additions to tax and penalties, which at any time prior to, during or with respect to the Term or in respect of any period for which the Lessee shall be obligated to pay Supplemental Rent, may be levied, assessed or imposed by any Governmental Authority upon or with respect to (a) any Indemnified Person, the Property or any part thereof or interest therein; (b) the leasing, financing, refinancing, purchase, acceptance, rejection, demolition, construction, substitution, subleasing, assignment, control, condition, occupancy, servicing, maintenance, repair, ownership, possession, activity conducted on or in, delivery, insuring, use, rental, lease, operation, improvement, sale, transfer of title, return or other disposition of the Property or any part thereof or interest therein; (c) the Notes, the Lessor Advances, other indebtedness with respect to the Property, or any part thereof or interest therein; (d) the rentals, receipts or earnings arising from the Property or any part thereof or interest therein; (e) the Operative Agreements, the execution, performance or enforcement thereof, or any payment made or accrued pursuant thereto; (f) the income or other proceeds received with respect to the Property or any part thereof or interest therein upon the sale or disposition thereof; (g) any contract (including the Agency Agreement) relating to the construction, acquisition or delivery of the Property or any part thereof or interest therein; (h) the issuance of the Notes or the Lessor Advances; (i) the Borrower or the Borrower’s Interest; or (j) otherwise in connection with the transactions contemplated by the Operative Agreements.

     “Improvements” shall mean, with respect to the construction, repair, renovations, replacement and/or Modifications on the Land, all buildings, structures, Fixtures, and other improvements of every kind existing at any time and from time to time on or under the Land purchased or otherwise acquired using the proceeds of Advances, together with any and all appurtenances to such buildings, structures or improvements, including without limitation sidewalks, utility pipes, conduits and lines, parking areas and roadways, and including without limitation all Modifications and other additions to or changes in the Improvements at any time, including without limitation (a) any Improvements existing as of the Closing Date as such

Appendix A - 27

Improvements may be referenced on the applicable Requisition and (b) any Improvements made subsequent to the Closing Date.

     “In Balance” shall mean, with respect to the Site at any time of determination thereof (1) the undisbursed portions of the Available Commitments together with Other Available Amounts related to the Property, shall be sufficient to complete construction of the Improvements in accordance with the terms and conditions of the Agency Agreement prior to the applicable Construction Period Termination Date, and (2) the undisbursed portions of the Available Commitments, as such amounts may be adjusted pursuant to the Agency Agreement (including the contingency reserve in the Construction Budget approved in accordance with the Operative Agreements, to the extent such contingency funds have not theretofore been set aside by Construction Agent for the payment of overruns in other cost categories and Other Available Amounts) shall be sufficient to complete the Construction of each such item in accordance with the terms and conditions of the Agency Agreement prior to the Construction Period Termination Date.

          “Indebtedness” of any Person shall mean, without duplication;

     (a)     all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

     (b)     all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker’s acceptances issued for the account of such Person other than letters of credit or banker’s acceptances that support obligations of such Person in respect of accounts payable, trade payments and other short-term trade related obligations;

     (c)     all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capitalized Leases; and

     (d)     all Contingent Liabilities of such Person recorded in the financial statements (including the notes thereto) of such Person and its Consolidated Subsidiaries in respect of any of the foregoing.

For all purposes of the Operative Agreements, the indebtedness of any Person shall include the Indebtedness of any partnership or joint venture characterized as a partnership for commercial law purposes in which such Person is a general partner or a joint venturer as reflected in the books of such Person pursuant to GAAP, consistently applied. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability of any such Contingent Liabilities at such date as reflected in the books of such Person pursuant to GAAP, consistently applied.

     “Indemnified Person” shall mean each of the Financing Parties and their respective successors, assigns, directors, trustees, shareholders, partners, officers, employees, agents and Affiliates.

Appendix A - 28

     “Indemnity Provider” shall mean the Lessee.

     “Initial Construction Advance” shall mean any initial Advance to pay for Property Costs for construction of any Improvements.

     “Insolvency Event” shall mean one or more of (a) the liquidation or dissolution of the Construction Agent or the Lessee, or the suspension of the business of the Construction Agent or the Lessee, or the filing by the Construction Agent or the Lessee of a voluntary petition or an answer seeking reorganization, arrangement, readjustment of its debts or for any other relief under the Bankruptcy Code or under any other insolvency act or law, state or federal, now or hereafter existing, or any other action of the Construction Agent or the Lessee indicating its consent to, approval of or acquiescence in, any such petition or proceeding; the application by the Construction Agent or the Lessee for, or the appointment by, consent or acquiescence of the Construction Agent or the Lessee of a receiver, a trustee or a custodian of the Construction Agent or the Lessee for all or a substantial part of its property; the making by the Construction Agent or the Lessee of any assignment for the benefit of creditors; the inability of the Construction Agent or the Lessee, or the admission by the Construction Agent or the Lessee in writing of its inability, to pay its debts as they mature; or the Construction Agent or the Lessee taking any corporate action to authorize any of the foregoing; (b) the filing of an involuntary petition against the Construction Agent or the Lessee in bankruptcy or seeking reorganization, arrangement, readjustment of its debts or for any other relief under the Bankruptcy Code, as amended, or under any other insolvency act or law, state or federal, now or hereafter existing; or the involuntary appointment of a receiver, a trustee or a custodian of the Construction Agent or the Lessee for all or a substantial part of its property; or the issuance of a warrant of attachment, execution or similar process against any substantial part of the property of the Construction Agent or the Lessee, and the continuance of any of such events for ninety (90) days undismissed or undischarged; (c) the adjudication of the Construction Agent or the Lessee as bankrupt or insolvent or the occurrence of a Deemed Insolvency with respect to the Construction Agent or the Lessee; or (d) the entering of any order in any proceedings against the Construction Agent or the Lessee or any Subsidiary of the foregoing decreeing the dissolution, divestiture or split-up of the Construction Agent or the Lessee or any Subsidiary of the Construction Agent or the Lessee, and such order remains in effect for more than sixty (60) days.

     “Insolvency Laws” shall mean the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.

     “Insolvency Proceeding” shall mean, any case, action or proceeding before any court or other Governmental Authority relating to any Bankruptcy Event.

     “Instruments” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Insurance Requirements” shall mean all terms and conditions of any insurance policy either required by the Lease to be maintained by the Lessee or required by the Agency

Appendix A - 29

Agreement to be maintained by the Construction Agent, and all requirements of the issuer of any such policy and, regarding self insurance, any other requirements of the Lessee or the Construction Agent, as the case may be.

     “Interest” shall mean for each Loan for any Interest Period, the sum of the products (for each day during such Interest Period) of:

IR x LB x   1 / D

     where:

LB	=	the outstanding balance of such Loan;
IR	=	the Interest Rate applicable on such day; and
D	=	360 or, to the extent the Interest Rate is based on the ABR, 365 (or 366 as applicable)

provided, however, that (i) no provision of the Operative Agreements shall require the payment or permit the collection of Interest in excess of the maximum permitted by applicable Law and (ii) if at any time any distribution is rescinded or must otherwise be returned for any reason, Interest shall not be considered paid by such distribution after the date on which such distribution is rescinded or otherwise returned.

     “Interest Period” shall mean (a) as to any CP Loan, the first to the end of each calendar month, (b) as to any Eurodollar Loan or Eurodollar Lessor Advance (i) with respect to the initial Interest Period and any Interest Period immediately following a conversion from an ABR Loan to a Eurodollar Loan or from an ABR Lessor Advance to a Eurodollar Lessor Advance, the period beginning on the date of such Eurodollar Loan or Eurodollar Lessor Advance, as the case may be, and ending on but not including the twentieth (20^th) day of the following month, and (ii) thereafter, each period commencing on and including the last day of the preceding Interest Period applicable to such Eurodollar Loan or Eurodollar Lessor Advance, as the case may be, and ending on but not including the twentieth (20^th) day of the following month; provided, however, that all of the foregoing provisions relating to Interest Periods are subject to the following: (A) other than with respect to CP Loans, if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (B) no Interest Period shall extend beyond the Expiration Date, as the case may be, and (C) there shall not be more than four (4) Interest Periods outstanding at any one (1) time.

Appendix A - 30

     “Interest Rate” shall mean, unless the Lender Overdue Rate shall apply in accordance with the Operative Agreements, for any Interest Period and for each Loan funded by any Lender for each day during such Interest Period:

     (a)     to the extent the Conduit funds the applicable Loan through the issuance of Commercial Paper Notes, a rate equal to the CP Rate, or

     (b)     to the extent that clause (a) above is not applicable or, to the extent the Conduit has transferred all or a portion of a Loan or Note to one (1) or more Liquidity Banks pursuant to the Liquidity Agreement, then to the extent that clause (a) above is not applicable or with regard to the portion of a Loan or Note so transferred, a rate equal to the Eurodollar Rate determined for the applicable Interest Period plus the Applicable Percentage or the ABR plus the Applicable Percentage, as such rate shall be elected by the Borrower or as shall otherwise apply in the event of an Eurodollar Disruption Event (subject to Section 9 of the Participation Agreement) in accordance with Section 2.8 of the applicable Credit Agreement and the other applicable provisions of the Operative Agreements; provided, however, notwithstanding the above, the Interest Rate shall be the ABR plus the Applicable Percentage for any Interest Period for any Loan as to which the Conduit has funded the acquisition or maintenance thereof by the sale or assignment of an interest therein to any Liquidity Bank under the Liquidity Agreement on any day other than the first day of such Interest Period and without giving such Liquidity Bank(s) at least two (2) Business Days’ prior notice of such sale or assignment.

     “Intermediary” shall have the meaning given to such term in the Cash Collateral Control Agreement or the Punch List Cash Collateral Control Agreement, as applicable.

     “Investment Company Act” shall mean the Investment Company Act of 1940, as amended, together with the rules and regulations promulgated thereunder.

     “Investment Property” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Investor” shall mean each bank or other financial institution which is from time to time party to any of the Operative Agreements in its capacity as an “Investor”.

     “Investor Funding Deficit” shall have the meaning given to such term in Section 2.3(c) of the applicable Credit Agreement.

     “Issuer Group” shall mean any member of the same affiliated group for purposes of GAAP.

     “Land” shall mean a parcel of real property subject to the Ground Lease, as such parcel and/or Ground Lease is described on (a) the Requisition issued by the Construction Agent on the Closing Date relating to such parcel and (b) the schedules to the Lease Supplement executed and delivered in accordance with the requirements of Section 2.4 of the Lease.

Appendix A - 31

     “Land Cost” shall have the meaning specified in Section 5.4 of the Agency Agreement.

     “Law” shall mean, for any Person, all existing and future applicable laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, directives, certificates, orders and licenses of and interpretations by any Governmental Authority (including, without limitation, usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board), and applicable judgments, decrees, injunctions, writs, orders, or line action of any Tribunal, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.

     “Lease” or “Lease Agreement” shall mean the Amended and Restated Lease Agreement dated as of the Closing Date, between the Lessor and the Lessee, together with the Lease Supplement thereto.

     “Lease Default” shall mean any event or condition which, with the lapse of time or the giving of notice, or both, would constitute a Lease Event of Default.

     “Lease Event of Default” shall have the meaning specified in Section 17.1 of the Lease.

     “Lease Supplement” shall mean the Lease Supplement substantially in the form of EXHIBIT A to the Lease, together with all attachments and schedules thereto.

     “Lease Supplement Balance” shall mean, with respect to the Property, an amount equal to the Primary Financing Party Balances for all Primary Financing Parties including without limitation any Capitalized Costs and other amounts allocated to the Property pursuant to the Operative Agreements plus all other costs for obligations (monetary or otherwise) of the Lessee and/or the Construction Agent arising under or in connection with any of the Operative Agreements (including without limitation but without duplication, accrued and unpaid Rent), all as determined by the Agent, in the exercise of its reasonable judgment.

     “Legal Requirements” shall mean all foreign, federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting the Lessor, the Lessee, the Agent, the Deal Agent, any Primary Financing Party, any Hedge Provider or the Property, Land, Improvement, Equipment or the taxation, demolition, construction, use or alteration of the Property, Land, Improvements, or Equipment whether now or hereafter enacted and in force, including without limitation any that require repairs, modifications or alterations in or to the Property or in any way limit the use and enjoyment thereof (including without limitation all building, zoning and fire codes and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et. seq., and any other similar federal, state or local laws or ordinances and the regulations promulgated thereunder) and any that may relate to environmental requirements (including without limitation all Environmental Laws), and all permits, certificates of occupancy, licenses, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments which are either of record or known to the Lessee affecting the Property or the Appurtenant Rights.

Appendix A - 32

     “Lender” shall mean each Credit Lender and each Mortgage Lender.

     “Lender Commitment” shall mean the Credit Loan Commitment for each Credit Lender and the Mortgage Loan Commitment for each Mortgage Lender.

     “Lender Overdue Rate” shall have the meaning given to such term in Section 2.8(c) of the applicable Credit Agreement.

     “Lender Unused Fee” shall have the meaning given to such term in Section 7.4 of the Participation Agreement.

     “Lessee” shall have the meaning set forth in the Lease.

     “Lessee Person” shall mean the Lessee or any affiliate in its capacity as owner, Construction Agent, or any Affiliate or successors and assigns of the foregoing, and all of their respective officers, directors, shareholders, partners, employees, agents, consultants (on the Property), service-providers (on the Property), and any other Person under the supervision of any of the foregoing pursuant to a written contract or otherwise.

     “Lessor” shall mean Wachovia Development Corporation, a North Carolina corporation, and any successor, replacement and/or additional lessor under the Lease expressly permitted under the Operative Agreements.

     “Lessor Advance” shall mean each advance made by the Lessor pursuant to the terms of the Participation Agreement and, in accordance with Section 1 of the Participation Agreement, shall be deemed to include the amounts advanced by the Lessor to obtain its respective interests pursuant to the Master Transfer Agreement on the Closing Date.

     “Lessor Commitment” shall mean the obligation of the Lessor to make the Lessor Advances in an aggregate principal amount at any one time outstanding not to exceed $12,000,000 amount may be increased or reduced from time to time in accordance with the provisions of the Operative Agreements; provided, the Lessor shall not be obligated to make any Lessor Advance in excess of the Lessor Commitment.

     “Lessor Confirmation Letter” shall mean the confirmation letter issued by the Lessor from time to time to the Lessee pursuant to Section 8.2(f) of the Participation Agreement, in a form substantially similar to the form of confirmation letter provided to the Lessee on or prior to the Closing Date.

     “Lessor Lien” shall mean any Lien, true lease or sublease or disposition of title arising as a result of (a) any claim against the Lessor not resulting from the transactions contemplated by the Operative Agreements, (b) any act or omission of the Lessor which is not required by the Operative Agreements or is in violation of any of the terms of the Operative Agreements, (c) any claim against the Lessor with respect to Taxes or Transaction Expenses against which the Lessee is not required to indemnify the Lessor pursuant to Section 11 of the Participation Agreement or (d) any claim against the Lessor arising out of any transfer by the Lessor of all or any portion of

Appendix A - 33

the interest of the Lessor in the Property, the Borrower’s Interest or the Operative Agreements other than the transfer of title to or possession of the Property by the Lessor pursuant to and in accordance with the Lease, the Credit Agreements, the Security Documents or the Participation Agreement or pursuant to the exercise of the remedies set forth in Article XVII of the Lease.

     “Lessor Notice” shall have the meaning given to such term in Section 8.2(e) of the Participation Agreement.

     “Lessor Overdue Rate” shall mean the lesser of (a) the Lessor Yield plus two percent (2%) and (b) the highest rate permitted by applicable Law.

     “Lessor Unused Fee” shall have the meaning given to such term in Section 7.4 of the Participation Agreement.

     “Lessor Yield” shall mean, unless the Lessor Overdue Rate shall apply in accordance with the Operative Agreements, (a) regarding any Lessor Advance bearing a yield based on the Eurodollar Rate, the Eurodollar Rate plus the Applicable Percentage and (b) regarding any Lessor Advance bearing a yield based on the ABR, the ABR plus the Applicable Percentage.

     “Letter-of-Credit Rights” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “LIBOR Rate” shall mean for any Eurodollar Loan or Eurodollar Lessor Advance and any day during any Interest Period, an interest rate per annum equal to:

          (a)     the posted rate for thirty (30) day deposits in United States Dollars appearing on Telerate page 3750 as of 11:00 a.m. (London time) on the Business Day which is the second Business Day immediately preceding the first day of the applicable Interest Period; or

          (b)     if no such rate appears on Telerate page 3750 at such time and day, then the LIBOR Rate shall be determined by Wachovia at its principal office in Charlotte, North Carolina as its rate (each such determination, absent manifest error, to be conclusive and binding on all parties hereto and their assignees) at which thirty (30) day deposits in United States Dollars are being, have been, or would be offered or quoted by Wachovia to major banks in the applicable interbank market for Eurodollar deposits at or about 11:00 a.m. (Charlotte, North Carolina time) on such day.

     “Lien” shall mean any mortgage, pledge, security interest, encumbrance, lien, option or charge of any kind.

     “Limited Recourse Amount” shall mean with respect to the Property, an amount equal to the Termination Value with respect to the Property on the Expiration Date, less the Maximum Residual Guarantee Amount as of such date with respect to the Property.

Appendix A - 34

     “Limited Recourse Event of Default” shall have the meaning given to such term in Section 17.12 of the Lease.

     “Liquid Collateral” shall mean Permitted Investments with a scheduled maturity date of not more than seven (7) years from the date of purchase, except for corporate bonds rated lower than A by S&P or A2 by Moody’s which must have a scheduled maturity date not to exceed five (5) years from the date of purchase.

     “Liquid Collateral Account” shall mean the special purpose, segregated account (Account No. 1002669, ABA No. 022000046) established by M and T Bank and subject to a Lien in favor of the Agent for the benefit of the Secured Parties; the operation of the Liquid Collateral Account shall be governed by the Liquid Collateral Agreements and the other Operative Agreements, as applicable.

     “Liquid Collateral Agreement Event of Default” shall have the meaning given to such term in Section 3.1 of the Cash Collateral Agreement.

     “Liquid Collateral Agreements” shall mean the Cash Collateral Agreement and the Cash Collateral Control Agreement.

     “Liquidity Agreement” shall mean the Liquidity Purchase Agreement, dated as of the Closing Date, between the Conduit, as seller, the “Investors” named therein, the Deal Agent, as deal agent and documentation agent, and Wachovia, as liquidity agent.

     “Liquidity Bank” shall mean each liquidity bank that is a party to the Liquidity Agreement.

     “Liquidity Fee” shall have the meaning given to such term in Section 7.7 of the Participation Agreement.

     “Loans” shall mean the Credit Loans and the Mortgage Loans.

     “Majority Credit Lenders” shall mean at any time, Lenders whose Credit Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Credit Loans outstanding or (b) to the extent there are no Credit Loans outstanding, the aggregate of the Credit Loan Commitments.

     “Majority Lenders” shall mean at any time, Lenders whose Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Loans outstanding or (b) to the extent there are no Loans outstanding, the aggregate of the Lender Commitments.

     “Majority Mortgage Lenders” shall mean at any time, Lenders whose Mortgage Loans outstanding represent at least fifty-one percent (51%) of (a) the aggregate Mortgage Loans outstanding or (b) to the extent there are no Mortgage Loans outstanding, the aggregate of the Mortgage Loan Commitments.

Appendix A - 35

     “Majority Secured Parties” shall mean at any time, Primary Financing Parties whose Financings outstanding represent at least fifty-one percent (51%) of (a) the aggregate Financings outstanding or (b) to the extent there are no Financings outstanding, the aggregate of the Commitments of all Primary Financing Parties.

     “M and T Bank” shall mean Manufacturers and Traders Trust Company, a New York state chartered bank.

     “Marketable Securities” shall mean all securities regularly traded on a national securities exchange that are reflected on the balance sheet of HGSI and its Consolidated Subsidiaries in accordance with GAAP.

     “Marketing Period” shall mean, if the Lessee has given a Sale Notice in accordance with Section 20.1 of the Lease, the period commencing on the date such Sale Notice is given and ending on the Expiration Date.

     “Master Transfer Agreement” shall mean the Master Purchase and Liquidation Agreement dated as of or about the Closing Date among the Lessee, the Ground Lessor, the Genome Statutory Trust 2001A, in its various capacities thereunder, Wells Fargo Bank, Northwest, N.A., in its various capacities thereunder, BancBoston Leasing Investments Inc., in its various capacities thereunder, Eagle Funding Capital Corporation, in its various capacities thereunder, Fleet Securities, Inc., in its various capacities thereunder, Fleet National Bank in its various capacities thereunder, Wachovia Bank, National Association, in its various capacities thereunder, Wachovia Development Corporation in its various capacities thereunder, and Variable Funding Capital Corporation in its various capacities thereunder.

     “Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of any Person and its Subsidiaries taken as a whole.

     “Material Adverse Effect” shall mean any change or changes, effect or effects or condition or conditions that individually or in the aggregate are materially adverse to (a) the ability of the Lessee or the Construction Agent to perform its obligations under the Operative Agreements to which it is a party or to lease the Property under the Lease, (b) the validity or enforceability of any of the Operative Agreements or any rights or remedies under any thereof, (c) the status, priority or perfection of the Agent’s Lien on any Collateral pursuant to the Operative Agreements or (d) the value or condition of the Property.

     “Material Construction Documents” shall mean the contracts identified on Schedule I to the Participation Agreement.

     “Maturity Date” shall mean the Expiration Date.

     “Maximum Amount” shall have the meaning given to such term in Section 5.4 of the Agency Agreement.

Appendix A - 36

     “Maximum Residual Guarantee Amount” shall mean an amount equal to the product of the Property Cost times eighty-seven and seventy-five hundredths percent (87.75%).

     “Memorandum” shall have the meaning given to such term in the preamble of EXHIBIT B to the Lease.

     “Modifications” shall have the meaning specified in Section 11.1(a) of the Lease.

     “Money Market Funds” shall mean any regulated investment company of recognized standing shares of which are marketable with more than one billion dollars in assets that has had a historically constant dollar net asset value and has been in business more than five years, and whose performance is easily tracked.

     “Moody’s” shall mean Moody’s Investors Service, Inc.

     “Mortgage Backed Securities” shall mean any sequential, targeted or planned amortization mortgage-backed U.S. Agency Obligation rated at the time when pledged to the Liquid Collateral Account and at all times thereafter Aaa by Moody’s and AAA by S&P.

     “Mortgage Instrument” shall mean the deed of trust and any other instrument executed by the Lessor and the Lessee in favor of the Agent (for the benefit of the Secured Parties) and evidencing a Lien on the Property, in form and substance reasonably acceptable to the Agent.

     “Mortgage Lender” shall mean the Conduit and each bank or other financial institution which is from time to time party to any of the Operative Agreements in its capacity as a “Mortgage Lender”.

     “Mortgage Loan Agreement” shall mean the Amended and Restated Credit Agreement (Mortgage Loans) dated as of June 30, 2003 among the Borrower, Variable Funding Capital Corporation, as a Lender thereunder, the several Investors from time to time party thereto, Wachovia Securities, LLC, as the Deal Agent, and Wachovia Bank, National Association, as the Agent thereunder.

     “Mortgage Loan Commitments” shall mean the obligation of the Mortgage Lenders to make the Mortgage Loans to the Lessor in an aggregate principal amount at any one time outstanding not to exceed the aggregate of the amounts set forth opposite each Mortgage Lender’s name on Schedule 2.1 to the Mortgage Loan Agreement, as such amount may be increased or reduced from time to time in accordance with the provisions of the Operative Agreements; provided, no Mortgage Lender shall be obligated to make Mortgage Loans in excess of such Mortgage Lender’s share of the Mortgage Loan Commitments as set forth adjacent to such Mortgage Lender’s name on Schedule 2.1 to the Mortgage Loan Agreement.

     “Mortgage Loan Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute a Mortgage Loan Event of Default.

Appendix A - 37

     “Mortgage Loan Event of Default” shall have the meaning given to such term in Section 6 of the Mortgage Loan Agreement.

     “Mortgage Loans” shall mean the loans made pursuant to the Mortgage Loan Commitments and, in accordance with Section 1 of the Participation Agreement, shall be deemed to include the amounts advanced by the Mortgage Lenders to obtain their respective interests pursuant to the Master Transfer Agreement on the Closing Date.

     “Mortgage Note” shall mean each promissory note issued in favor of a Mortgage Lender from time to time pursuant to the Mortgage Loan Agreement.

     “Mortgage Obligations” shall mean any obligations owing to the Lessor pursuant to the Operative Agreements.

     “MPLA Documents” shall have the meaning given to such term in the Master Transfer Agreement.

     “Multiemployer Plan” shall mean a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been made by the Lessee or any ERISA Affiliate and that is covered by Title IV of ERISA.

     “Multiple Employer Plan” shall mean a plan to which the Lessee or any ERISA Affiliate and at least one (1) other employer other than an ERISA Affiliate is making or accruing an obligation to make, or has made or accrued an obligation to make, contributions.

     “Negotiable Certificates of Deposit” shall mean negotiable certificates of deposit traded on the secondary market of any commercial bank incorporated under the laws of the United States, or any state thereof, of recognized standing whose short-term commercial paper rating at the time the securities are pledged to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, and at all times thereafter is at least A-1 by S&P and at least P-1 by Moody’s and whose long-term unsecured debt rating at the time the negotiable certificates of deposit are pledged to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, and at all times thereafter is at least A by S&P and A2 by Moody’s.

     “Non-Defaulting Investor” shall have the meaning given to such term in Section 2.3(c) of the applicable Credit Agreement.

     “Non-Properly Margined Liquid Collateral” shall mean Liquid Collateral credited to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, that (a) satisfies the Concentration Limits (in the case of the Liquid Collateral Account only) but (b) is not otherwise Properly Margined Liquid Collateral.

     “Non-Public Company” shall mean a Person that at the time of determination is not obligated to register any class of securities pursuant to Section 12 or Section 15 of the Securities and Exchange Act of 1934, as amended.

Appendix A - 38

     “Notes” shall mean those notes issued to the Lenders pursuant to the Credit Agreements.

     “Obligations” shall mean the collective reference to all obligations (including without limitation all payment and performance obligations), now existing or hereafter arising, owing by the Borrower and/or the Lessee and/or any of their affiliates to the Secured Parties under or pursuant to the Operative Agreements whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, which may arise under, out of, or in connection with the Participation Agreement, the Lease Agreement, the Agency Agreement, any Hedging Agreement or any of the other Operative Agreements, whether on account of principal, advanced amounts, interest, reimbursement obligations, fees, indemnities, costs, expenses, termination payments or otherwise (including without limitation all reasonable fees and disbursements of counsel to any of the Secured Parties) that are required to be paid by the Borrower and/or the Lessee pursuant to the terms of the Operative Agreements.

     “Officer’s Certificate” with respect to any person shall mean a certificate executed on behalf of such person by a Responsible Officer who has made or caused to be made such examination or investigation as is necessary to enable such Responsible Officer to express an informed opinion with respect to the subject matter of such Officer’s Certificate.

     “Operative Agreements” shall mean the following: the Master Transfer Agreement, the MPLA Documents, the Participation Agreement, the Agency Agreement, the Credit Loan Agreement, the Mortgage Loan Agreement, the Notes, the Lease, the Lease Supplement, the Ground Lease, the HVAC Easement, the Security Agreement, the Hedging Agreements, the Liquid Collateral Agreements, the Punch List Liquid Collateral Agreements, the Mortgage Instruments, the Bifurcation Documents, the other Security Documents and any and all other agreements, documents and instruments executed in connection with any of the foregoing.

     “Original A Loan Agreement” shall have the meaning given to such term in the Recitals to the Credit Loan Agreement.

     “Original Agency Agreement” shall have the meaning given to such term in the Recitals of the Agency Agreement.

     “Original Assignment of Liquid Collateral” shall have the meaning given to such term in the Recitals to the Cash Collateral Agreement.

     “Original B Loan Agreement” shall have the meaning given to such term in the Recitals to the Mortgage Loan Agreement.

     “Original Control Agreement” shall have the meaning given to such term in the Recitals to the Cash Collateral Control Agreement.

     “Original Executed Counterpart” shall have the meaning given to such term in Section 5 of EXHIBIT A to the Lease.

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     “Original Lease” shall have the meaning given to such term in the Recitals to the Lease.

     “Original Participation Agreement” shall have the meaning given to such term in the Recitals to the Participation Agreement.

     “Original Security Agreement” shall have the meaning given to such term in the Recitals to the Security Agreement.

     “Other Available Amounts” shall mean any insurance proceeds available under related insurance policies maintained by or on behalf of the Lessee, the Lessor or the Construction Agent, letter of credit proceeds, proceeds under surety bonds, and similar proceeds consisting of available cash which are payable to the Lessee, the Lessor or the Construction Agent in settlement of a Claim or for use in the Construction of the Improvements.

     “Overdue Interest” shall mean any Interest payable pursuant to Section 2.8(b) of the applicable Credit Agreement.

     “Overdue Rate” shall mean (a) regarding amounts owing pursuant to the Operative Agreements to the Lessor, the Lessor Overdue Rate and (b) regarding amounts owing pursuant to the Operative Agreements to the Lenders and any other Person (other than the Lessor), the Lender Overdue Rate.

     “Participant” shall have the meaning given to such term in Section 9.7 of the applicable Credit Agreement.

     “Participation Agreement” shall mean the Amended and Restated Participation Agreement dated as of the Closing Date, among the Lessee and the Financing Parties.

     “Payment Date” shall mean any Scheduled Interest Payment Date and any date on which Interest or Lessor Yield in connection with a prepayment of principal on the Financing is due under the applicable Credit Agreement, the Participation Agreement, the Notes or with respect to the Lessor Advances, unless such day is not a Business Day and then on the next occurring Business Day.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation created by Section 4002(a) of ERISA or any successor thereto.

     “Pension Plan” shall mean a “pension plan”, as such term is defined in section 3(2) of ERISA, which is subject to title IV of ERISA (other than a Multiemployer Plan), and to which the Lessee or any ERISA Affiliate may have any liability, including without limitation any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time during the preceding five (5) years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA.

     “Performance Bonds” shall mean any performance bonds and labor and material payment bonds as to the General Contractor and any other Contractor (and any of their respective

Appendix A - 40

subcontractors) as may be reasonably required by the Agent, each of which shall name the Lessor and the Agent as additional obligees.

     “Permitted Facility” shall mean the office, clinical and laboratory facility located on an approximately 12.95 acre tract subject to the Ground Lease, as supported by the Appurtenant Rights, in Montgomery County, Maryland, known as “Traville”.

     “Permitted Investments” shall mean the following investments, in each case payable in Dollars and payable in the United States of America; (a) U.S. Treasury Obligations and U.S. Agency Obligations, (b) commercial paper notes with a rating of P-1 or higher by Moody’s and a rating of A-1 or higher by S&P, (c) notes or debentures issued or guaranteed by a state or political subdivision of a state rated at the time when pledged to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, and at all times thereafter at least A3 or higher by Moody’s and A- or higher by S&P (separately or collectively, “Municipal Bonds”), (d) any unsecured long-term debt obligations (other than Municipal Bonds) rated at the time when pledged to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, and at all times thereafter at least A3 or higher by Moody’s and A- or higher by S&P (separately or collectively, “Bonds”), (e) any asset-baked securities rated at the time when pledged to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, and at all times thereafter Aaa by Moody’s and AAA by S&P, (separately or collectively, “Asset Backed Securities”) (f) Money Market Funds, (g) Repurchase Obligations, (h) Mortgage Backed Securities, (i) Negotiable Certificates of Deposit, (j) Bank Obligations and (k) to the extent not otherwise included in the foregoing subsections (a)-(j), any other investment which is expressly permitted in accordance with the then current investment guidelines of the Lessee (previously delivered to the Agent) duly authorized and adopted by the Lessee but only to the extent such other investment is approved in writing by the Agent for inclusion as a Permitted Investment, with such determination to be in the sole discretion of the Agent (acting upon the advice of the Majority Secured Parties). Permitted Investments shall include those investments for which the Agent or an Affiliate of the Agent provides services, provided that such investments meet the criteria of any of (a)-(k) above. If a Permitted Investment is rated only by S&P or Moody’s, such single rating shall be applicable. No investment shall be a Permitted Investment unless it satisfies the requirements of the definition of “Liquid Collateral”.

     “Permitted Liens” shall mean, with respect to the Property:

     (a)     the respective rights and interests of the parties to the Operative Agreements as provided in the Operative Agreements;

     (b)     the rights of any sublessee or assignee under a sublease or an assignment expressly permitted by the terms of the Lease for no longer than the duration of the Lease;

     (c)     Liens for Taxes that either are not yet due or are being contested in accordance with the provisions of Section 13.1 of the Lease;

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     (d)     Liens arising by operation of law, materialmen’s, mechanics’, workmen’s, repairmen’s, employees’, carriers’, warehousemen’s and other like Liens relating to the construction of the Improvements or in connection with any Modifications or arising in the ordinary course of business for amounts that either are not more than thirty (30) days past due or are being diligently contested in good faith by appropriate proceedings, so long as such proceedings satisfy the conditions for the continuation of proceedings to contest Taxes set forth in Section 13.1 of the Lease;

     (e)     Liens of any of the types referred to in clause (d) above that have been bonded for not less than the full amount in dispute (or as to which other security arrangements reasonably satisfactory to the Lessor and the Agent have been made), which bonding (or arrangements) shall comply with applicable Legal Requirements, and shall have effectively stayed any execution or enforcement of such Liens;

     (f)     Liens arising out of judgments or awards with respect to which appeals or other proceedings for review are being prosecuted in good faith and for the payment of which adequate reserves have been provided as required by GAAP, which are or will be covered by a policy or policies of insurance or for which other appropriate provisions have been made, so long as such proceedings have the effect of staying the execution of such judgments or awards and, if such appeal relates to Taxes, the conditions for the continuation of proceedings to contest Taxes set forth in Section 13.1 of the Lease have been satisfied;

     (g)     Liens in favor of municipalities to the extent agreed to by the Lessor and the Agent;

     (h)     all encumbrances, exceptions, restrictions, easements, rights of way, servitudes, encroachments and irregularities in title, other than Liens which, in the reasonable assessment of the Agent, will have a Material Adverse Effect; and

     (i)     any other Lien expressly consented to or approved by the Agent.

     “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization, governmental authority or any other entity.

     “Plan” shall mean an Employee Benefit Plan.

     “Plans and Specifications” shall mean, with respect to Improvements, Equipment and other components of the Property, the plans and specifications for such Improvements, Equipment and other components of the Property to be constructed, as such Plans and Specifications may be amended, modified or supplemented from time to time in accordance with the terms of the Operative Agreements.

     “Pledged Securities” shall mean the Securities credited to the Liquid Collateral Account or the Punch List Liquid Collateral Account, as the case may be, from time to time, less any

Appendix A - 42

Pledged Securities released to the Lessee in accordance with the Liquid Collateral Agreements, the Punch List Liquid Collateral Agreements and the Participation Agreement.

     “Pledgor” shall have the meaning given to such term in the Cash Collateral Control Agreement or the Punch List Liquid Collateral Account, as the case may be.

     “Post-Expiration Date Balance” shall mean the sum of (i) the remaining Termination Value for the Property after application of the Maximum Residual Guarantee Amount actually paid to Lessor on the Expiration Date pursuant to Section 22.1(b) of the Lease, (ii) all reasonable costs and expenses incurred by or payable to Lessor (including management, supervisory or any remarketing fees payable to any Person, including Lessor) following the Expiration Date to maintain, lease or sell the Property (including any allocated internal costs of Lessor), and (iii) an amount equal to the amount of holdover rent that Lessor would have received under Article XXIII of the Lease if Lessee had remained in possession of the Property during the period following the Expiration Date through the date Lessor recovers gross proceeds of sale (without deduction for any marketing, closing or other costs, prorations or commissions) equal to the sum of items (i) and (ii) above.

     “Primary Financing Parties” shall mean the Credit Lenders, the Mortgage Lenders, the Lessor and any other banks, financial institutions or other institutional investors which may be from time to time a Credit Lender, a Mortgage Lender or the Lessor.

     “Primary Financing Party Balance” shall mean, with respect to any Primary Financing Party as of any date of determination: (i) with respect to any Lender, the outstanding principal amount of the Loans owed to such Lender or (ii) with respect to the Lessor, the outstanding principal amount of the Lessor Advance, plus, in each case, all accrued and unpaid Interest and Lessor Yield, as the case may be, thereon.

     “Primary Financing Party Financing Statements” shall mean UCC financing statements and fixture filings appropriately completed for filing in the applicable jurisdiction in order to procure a security interest in favor of the Agent in the Collateral subject to the Security Documents.

     “Proceeds” shall have the meaning given to such term in Section 1 of the Security Agreement.

     “Program Fee” shall have the meaning given to such term in Section 7.8 of the Participation Agreement.

     “Prohibited Transaction” shall mean a transaction that is prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt under Section 4975 of the Code or Section 408 of ERISA.

     “Project Cost” shall have the meaning given to such term in Section 5.1 of the Participation Agreement.

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     “Properly Margined Collateral Coverage” shall mean Liquid Collateral the Fair Market Sales Value of which is adjusted in accordance with the definition of Adjusted Market Value (Item), and maintained in accordance with the Concentration Limits (in the case of the Liquid Collateral Account only) and other terms set forth in the Operative Agreements.

     “Properly Margined Liquid Collateral” shall mean Liquid Collateral the amount of which is determined on the basis of Properly Margined Collateral Coverage.

     “Property” shall mean the Permitted Facility that is (or is to be) acquired, constructed and/or renovated pursuant to the terms of the Operative Agreements, the Land (including without limitation the Ground Lease) and each item of Equipment and the various Improvements, in each case located on such Land and the Appurtenant Rights.

     “Property Cost” shall mean, with respect to the Property at any date of determination, an amount equal to (a) the aggregate principal amount of all Advances made on or prior to such date and advanced to or for the benefit of the Construction Agent pursuant to and for the purposes set forth in Section 5.1 of the Participation Agreement with respect to the Property minus (b) the aggregate amount of prepayments or repayments as the case may be of the Credit Loans, the Mortgage Loans or the Lessor Advances allocated to reduce the Property Cost pursuant to Section 2.6(c) of the applicable Credit Agreement or Section 5A.4(c) of the Participation Agreement, respectively.

     “Punch List Cash Collateral Agreement” shall mean the Assignment of Punch List Liquid Collateral Account dated as of the Closing Date executed by the Lessee in favor of the Agent, on behalf of the Secured Parties.

     “Punch List Cash Collateral Control Agreement” shall mean the Punch List Control Agreement dated as of the Closing Date among the Agent, on behalf of the Secured Parties, the Lessee and the Intermediary.

     “Punch List Liquid Collateral” shall have the meaning given to such term in Section 1.1(d) of the Punch List Cash Collateral Agreement.

     “Punch List Liquid Collateral Account” shall mean the special purpose, segregated account (Account No.        , ABA No. 022000046) established by M and T Bank and subject to a Lien in favor of the Agent for the benefit of the Secured Parties; the operation of the Punch List Liquid Collateral Account shall be governed by the Punch List Liquid Collateral Agreements and the other Operative Agreements, as applicable.

     “Punch List Liquid Collateral Agreement Event of Default” shall have the meaning given to such term in Section 3.1 of the Punch List Cash Collateral Agreement.

     “Punch List Liquid Collateral Agreements” shall mean the Punch List Cash Collateral Agreement and the Punch List Cash Collateral Control Agreement.

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     “Purchase Option” shall have the meaning given to such term in Section 20.1 of the Lease.

     “Purchasing Lender” shall have the meaning given to such term in Section 9.8(a) of the applicable Credit Agreement.

     “Rating Agencies” shall mean Moody’s, S&P or Fitch Investors Service, L.P. or, in each case, any successor nationally recognized statistical rating organization.

     “Reference Bank” shall mean any bank that furnishes information for the purpose of determining the Eurodollar Rate.

     “Register” shall have the meaning given to such term in Section 9.9(a) of the applicable Credit Agreement.

     “Regulation B” shall mean Regulation B of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Regulation D” shall mean Regulation D of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Regulation T” shall mean Regulation T of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Regulation U” shall mean Regulation U of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Regulation X” shall mean Regulation X of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Regulation Z” shall mean Regulation Z of the Board, as the same may be modified and supplemented and in effect from time to time.

     “Release” shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or emission of a Hazardous Substance.

     “Renewal Term” shall mean each of the three (3) renewal terms with regard to the Lease permitted in accordance with Section 2.2 of the Lease.

     “Rent” shall mean, collectively, the Basic Rent and the Supplemental Rent, in each case payable under the Lease.

     “Reportable Event” shall have the meaning specified in Section 4043 of ERISA.

Appendix A - 45

     “Repurchase Obligations” shall mean repurchase obligations with a term of not more than 31 days for underlying debt securities that are rated AAA by S&P and Aaa by Moody’s, and/or that are U.S. Treasury Obligations and/or U.S. Agency Obligations which in each case are secured by a fully perfected security interest in 102% of such underlying securities.

     “Requested Funds” shall mean any funds requested by the Lessee or the Construction Agent, as applicable, in accordance with Section 5 of the Participation Agreement.

     “Required Liquid Collateral Amount” shall mean on any determination date, Liquid Collateral, in an amount equal to the sum of (a) the product of (i) one hundred two percent (102%) and (ii) the product of (A) ninety-four percent (94%) and (B) the Property Cost, including without duplication all Capitalized Costs and (b) the product of (i) six percent (6%) and (ii) the Property Cost, including without duplication all Capitalized Costs.

     “Requisition” shall have the meaning specified in Section 4.2 of the Participation Agreement.

     “Responsible Officer” shall mean the Chairman or Vice Chairman of the Board of Directors, the Chief Executive Officer, the President, any Senior Vice President or Executive Vice President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer.

     “Restoration” shall have the meaning given to such term in Section 15.1(e) of the Lease.

     “S&P” shall mean Standard and Poor’s Rating Group, a division of The McGraw-Hill Companies, Inc.

     “Sale Date” shall have the meaning given to such term in Section 20.3(a) of the Lease.

     “Sale Notice” shall mean a notice given to the Agent in connection with the election by the Lessee of its Sale Option.

     “Sale Option” shall have the meaning given to such term in Section 20.1 of the Lease.

     “Sale Proceeds Shortfall” shall mean the amount by which the proceeds of a sale described in Section 22.1 of the Lease are less than the Limited Recourse Amount with respect to the Property if it has been determined that the Fair Market Sales Value of the Property at the expiration of the term of the Lease has been impaired by greater than ordinary wear and tear during the Term of the Lease.

     “Scheduled Interest Payment Date” shall mean as to any CP Loan, any Eurodollar Loan, any Eurodollar Lessor Advance, any ABR Loan, any ABR Lessor Advance, any Interest payment to any Investor pursuant to any Note and any Lessor Yield payment to the Lessor in connection with any Lessor Advance, the twentieth (20^th) day of each month, unless such day is not a Business Day and in such case on the next occurring Business Day.

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     “SEC” means United States Securities and Exchange Commission.

     “Secured Parties” shall have the meaning given to such term in the Security Agreement.

     “Securities” shall have the meaning given to such term in Section 8-102(a)(15) of the Uniform Commercial Code.

     “Securities Act” shall mean the Securities Act of 1933, as amended, together with the rules and regulations promulgated thereunder.

     “Security Agreement” shall mean the Amended and Restated Security Agreement dated as of the Closing Date between the Borrower and the Agent, for the benefit of the Secured Parties, and accepted and agreed to by the Lessee.

     “Security Assets” shall have the meaning given to such term in Section 2 of the Security Agreement.

     “Security Documents” shall mean the collective reference to the Bifurcation Documents, the Security Agreement, the Mortgage Instrument, (to the extent the Lease is construed as a security instrument) the Lease, (to the extent the Agency Agreement is construed as a security instrument) the Agency Agreement, the Liquid Collateral Agreements, the Punch List Liquid Collateral Agreements, the Primary Financing Party Financing Statements and all other security documents hereafter delivered to the Agent granting a Lien on any asset or assets of any Person to secure the obligations and liabilities of the Lessor under the Credit Agreements and/or under any of the other Credit Documents.

     “Senior Debt” shall mean regarding any Person and its Consolidated Subsidiaries as of the determination date, the outstanding principal amount of Indebtedness less Indebtedness that is expressly subordinated in right of payment.

     “Senior Debt Ratio” shall mean, at the end of any Fiscal Quarter, the ratio of

     (a)     the aggregate amount of cash, Cash Equivalents and Marketable Securities of HGSI and its Subsidiaries on a consolidated basis at such time

     to

     (b)     the sum of total Senior Debt and (but without duplication) Synthetic Lease Obligations of HGSI and its Subsidiaries on a consolidated basis outstanding at such time.

     “Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

     “Site” shall mean the land subject (or to be subject) to the Ground Lease, and all of the appurtenances, easements, restrictions, and rights of way relating to the foregoing.

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     “Soft Costs” shall mean all costs which are ordinarily and reasonably incurred in relation to the acquisition, development, installation, construction, improvement and testing of the Property other than Hard Costs, including without limitation structuring fees, administrative fees, legal fees, upfront fees, fees and expenses related to appraisals, title examinations, title insurance, document recordation, surveys, environmental site assessments, geotechnical soil investigations and similar costs and professional fees customarily associated with a real estate closing, the fees and expenses of the Lessor payable or reimbursable under the Operative Agreements and costs and expenses incurred pursuant to Sections 7.3(a), 7.3(b), 7.4(a), 7.4(b), 7.5, 7.6, 7.7 and 7.8 of the Participation Agreement.

     “Subsidiary” shall mean, as to any Person, any corporation of which at least a majority of the outstanding stock having by the terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether or not at the time stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person, or by one (1) or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.

     “Supplemental Amounts” shall have the meaning given to such term in Section 9.18 of the applicable Credit Agreement.

     “Supplemental Rent” shall mean all amounts, liabilities and obligations (other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor, the Agent, the Primary Financing Parties or any other Person under the Lease or under any of the other Operative Agreements including without limitation payments of the Termination Value and the Maximum Residual Guarantee Amount, all indemnification amounts, liabilities and obligations and all amounts payable or owing to any Hedge Provider pursuant to one or more Hedging Agreements (including without limitation any and all termination payments thereunder).

     “Synthetic Lease Obligation” shall mean, with respect to any Person that is a lessee under a lease of the type referred to as a synthetic lease that is characterized as an operating lease in accordance with GAAP, the outstanding “lease balance” or other similar amount; i.e., the outstanding principal amount of any notes of the lessor outstanding with respect to the property under lease plus the equity investment made with respect to such lease, plus, without duplication the “lease balance”, subject to the limitations set forth in Schedule II of the Participation Agreement, with respect to the synthetic leases described in Schedule II to the Participation Agreement.

     “Tax Affiliate” means, with respect to any corporate Person, any member of an affiliated group (within the meaning of Section 1504(a) of the Code or any similar provision of state or local law) in which such Person is a member.

     “Taxes” shall have the meaning specified in the definition of “Impositions”.

     “Term” shall mean, collectively, the Basic Term and each Renewal Term, if any.

     “Termination Date” shall have the meaning specified in Section 16.2(a) of the Lease.

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     “Termination Event” shall mean (a) with respect to any Pension Plan, the occurrence of a Reportable Event or an event described in Section 4062(e) of ERISA, (b) the withdrawal of the Lessee or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan, (c) the distribution of a notice of intent to terminate a Plan or Multiemployer Plan pursuant to Section 4041(a)(2) or 4041A of ERISA, (d) the institution of proceedings to terminate a Plan or Multiemployer Plan by the PBGC under Section 4042 of ERISA, (e) any other event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (f) the complete or partial withdrawal of the Lessee or any ERISA Affiliate from a Multiemployer Plan.

     “Termination Notice” shall have the meaning specified in Section 16.1 of the Lease.

     “Termination Value” shall mean the sum of (a) the outstanding aggregate principal amount of the Mortgage Loans, plus (b) the outstanding aggregate principal amount of the Credit Loans, plus (c) the outstanding aggregate principal amount of the Lessor Advances, plus (d) any accrued and unpaid Interest and fees owing to the Credit Lenders and/or the Mortgage Lenders, plus (e) any accrued and unpaid Lessor Yield, plus (f) any amounts then due and payable pursuant to Section 11 of the Participation Agreement (including without limitation Breakage Costs and all other indemnification amounts then due and payable pursuant thereto), plus (g) to the extent the same is not duplicative of the amounts payable under clauses (a) through (f) above, all other Rent and other amounts then due and payable or accrued under the Agency Agreement, Lease and/or under any other Operative Agreement (including without limitation all costs and expenses referred to in clause FIRST of Section 22.2 of the Lease plus (h) to the extent the same is not duplicative of the amounts payable under clauses (a) through (g) above, all amounts payable or owing to any Hedge Provider pursuant to one or more Hedging Agreements (including without limitation any and all termination payments thereunder)).

     “Transaction Expenses” shall mean all Soft Costs and all other costs and expenses incurred in connection with the preparation, execution and delivery of the Operative Agreements and the transactions contemplated by the Operative Agreements including without limitation all costs and expenses described in Section 7 of the Participation Agreement and the following:

     (a)     the reasonable fees, out-of-pocket expenses and disbursements of counsel to the Financing Parties, and of counsel to the Lessee in negotiating the terms of the Operative Agreements and the other transaction documents, preparing for the closings under, and rendering opinions in connection with, such transactions and in rendering other services customary for counsel representing parties to transactions of the types involved in the transactions contemplated by the Operative Agreements, but excluding in all cases the fees, expenses and disbursements of counsel to any individual Credit Lender or Mortgage Lender;

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     (b)     the reasonable fees, out-of-pocket expenses and disbursements of accountants for the Lessee in connection with the transaction contemplated by the Operative Agreements;

     (c)     any and all other reasonable fees, charges or other amounts payable to the Financing Parties which arises under any of the Operative Agreements;

     (d)     any other reasonable fees, out-of-pocket expenses, disbursements or costs of any party to the Operative Agreements or any of the other transaction documents; and

     (e)     any and all Taxes and fees incurred in recording or filing any Operative Agreement or any other transaction document, any deed, declaration, mortgage, security agreement, notice or financing statement with any public office, registry or governmental agency in connection with the transactions contemplated by the Operative Agreements.

     “Transfer” shall have the meaning given to such term in Section 10.1(f) of the Participation Agreement.

     “Tribunal” shall mean any state, commonwealth, federal, foreign, territorial, or other court or government body, subdivision agency, department, commission, board, bureau or instrumentality of a governmental body.

     “Trust” shall mean Genome Statutory Trust 2001A, a Connecticut statutory trust.

     “Type” shall mean, as to any Loan, whether it is a CP Loan, an ABR Loan or a Eurodollar Loan.

     “U.S. Agency Obligations” shall mean bonds, notes, debentures, obligations or other evidence of indebtedness issued and/or guaranteed by Federal National Mortgage Association, Federal Home Loan Deed of Trust Corporation, Government National Mortgage Association or any other agency or instrumentality of the U.S. of America, in each case supported by the direct or indirect full faith and credit of the U.S. Government, as well as mortgaged backed securities issued by any of the foregoing agencies.

     “U.S. Person” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “U.S. Taxes” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “U.S. Treasury Obligations” shall mean securities issued or guaranteed by the U.S. Government, including U.S. Treasury obligations and any other obligations the timely payment of principal and interest of which are guaranteed by the U.S. Government.

     “UCC Financing Statements” shall mean collectively the Primary Financing Party Financing Statements.

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     “Unanimous Vote Matters” shall have the meaning given to such term in Section 12.4 of the Participation Agreement.

     “Unfunded Amounts” shall mean the unpaid cost of Construction and all other amounts necessary for Final Completion.

     “Unfunded Liability” shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all accrued benefits under such Plan exceeds (b) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of the Lessee or any member of the Controlled Group to the PBGC or such Plan under Title IV of ERISA.

     “Uniform Commercial Code” and “UCC” shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction.

     “Uninsured Force Majeure Loss” shall mean an amount equal to the Force Majeure Loss less any and all insurance proceeds paid in connection with the Force Majeure Event giving rise to such Force Majeure Loss.

     “Unrestricted Cash, Cash Equivalents and Marketable Securities” shall mean of any Person, as of the date of determination, all cash, Cash Equivalents and Marketable Securities of such Person and its Consolidated Subsidiaries as of such date which are not encumbered by any Lien or subject to any defeasance, sinking fund, escrow or similar deposit arrangement pursuant to which such funds are not subject to voluntary withdrawal by such Person and its Consolidated Subsidiaries or are set aside for a purpose other than use in such Person’s or its Consolidated Subsidiary’s current operation and which are not otherwise required to be designated as restricted funds on such Person’s consolidated balance sheet in accordance with GAAP.

     “Unused Fee Payment Date” shall mean the twentieth (20^th) Business Day of each calendar month during the Commitment Period.

     “Unused Fees” shall refer to the Lender Unused Fees and the Lessor Unused Fees.

     “Voting Stock” means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

     “Wachovia” shall mean Wachovia Bank, National Association, a national banking association.

     “Wachovia Securities” shall mean Wachovia Securities, LLC, a Delaware limited liability company.

Appendix A - 51

     “WCM” shall have the meaning given to such term in Section 10.1(f) of the Participation Agreement.

     “Wholly-Owned Entity” shall mean a Person all of the shares of capital stock or other ownership interest of which are owned by a specified Person and/or one of such specified Person’s wholly-owned Subsidiaries or other wholly-owned entities.

     “Withdraw Liability” shall have the meaning given to such term under Part I of Subtitle E of Title IV of ERISA.

     “Withholdings” shall have the meaning specified in Section 11.2(e) of the Participation Agreement.

     “Work” shall mean the furnishing of labor, materials, components, furniture, furnishings, fixtures, appliances, machinery, equipment, tools, power, water, fuel, lubricants, supplies, goods and/or services with respect to the Property.

     “WSI” shall have the meaning given to such term in Section 10.1(f) of the Participation Agreement.

Appendix A - 52 EX-10.3 5 w88716exv10w3.htm AMENDED AND RESTATED LEASE AGREEMENT

Exhibit 10.3

AMENDED AND RESTATED
LEASE AGREEMENT

Dated as of June 30, 2003

between

WACHOVIA DEVELOPMENT CORPORATION,
as Lessor,

and

HUMAN GENOME SCIENCES, INC.,
as Lessee

This Amended and Restated Lease Agreement is subject to a security interest in favor of Wachovia Bank, National Association, as the agent for the Primary Financing Parties and, respecting the Security Documents, as the agent for the Secured Parties (the “Agent”) under an Amended and Restated Security Agreement dated as of June 30, 2003, between Wachovia Development Corporation, as the Borrower and the Agent, as amended, modified, extended, supplemented and/or restated from time to time in accordance with the applicable provisions thereof. This Amended and Restated Lease Agreement has been executed in several counterparts. To the extent, if any, that this Amended and Restated Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Amended and Restated Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart containing the receipt therefor executed by the Agent on the signature page hereof.

TABLE OF CONTENTS

ARTICLE I			2
	1.1	Definitions	2
	1.2	Interpretation	2
ARTICLE II			2
	2.1	Property	2
	2.2	Lease Term	2
	2.3	Title	3
	2.4	Lease Supplement	3
	2.5	Lessor Bankruptcy	3
ARTICLE III			4
	3.1	Rent	4
	3.2	Payment of Basic Rent	4
	3.3	Supplemental Rent	4
	3.4	Performance on a Non-Business Day	5
	3.5	Rent Payment Provisions	5
	3.6	Payment to Agent	5
	3.7	Ground Lease and Appurtenant Rights	5
ARTICLE IV			5
	4.1	Taxes; Utility Charges	5
ARTICLE V			6
	5.1	Quiet Enjoyment	6
ARTICLE VI			6
	6.1	Net Lease	6
	6.2	No Termination or Abatement	7
ARTICLE VII			7
	7.1	Ownership of the Property	7
ARTICLE VIII			9
	8.1	Condition of the Property	9
	8.2	Possession and Use of the Property	9
	8.3	Integrated Property	10
ARTICLE IX			11
	9.1	Compliance With Legal Requirements, Insurance Requirements and Manufacturer’s Specifications and Standards	11
ARTICLE X			11
	10.1	Maintenance and Repair; Return	11
	10.2	Environmental Inspection	12
ARTICLE XI			13
	11.1	Modifications	13
ARTICLE XII			14
	12.1	Warranty of Title	14

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ARTICLE XIII			15
	13.1	Permitted Contests Other Than in Respect of Indemnities	15
	13.2	Impositions, Utility Charges, Other Matters	15
ARTICLE XIV			15
	14.1	Public Liability and Workers’ Compensation Insurance	15
	14.2	Permanent Hazard and Other Insurance	16
	14.3	Coverage	16
	14.4	Policies	17
ARTICLE XV			18
	15.1	Casualty and Condemnation	18
	15.2	Environmental Matters	20
	15.3	Notice of Environmental Matters	21
ARTICLE XVI			21
	16.1	Termination Upon Certain Events	21
	16.2	Procedures	21
ARTICLE XVII			22
	17.1	Lease Events of Default	22
	17.2	Surrender of Possession	25
	17.3	Reletting	25
	17.4	Damages	25
	17.5	Power of Sale	26
	17.6	Final Liquidated Damages	26
	17.7	Environmental Costs	27
	17.8	Waiver of Certain Rights	27
	17.9	Assignment of Rights Under Contracts	28
	17.10	Remedies Cumulative	28
	17.11	Lessee’s Right to Cure by Purchase of the Property	28
	17.12	Limitation Regarding Certain Lease Events of Default	28
ARTICLE XVIII			29
	18.1	Lessor’s Right to Cure Lessee’s Lease Defaults	29
ARTICLE XIX			29
	19.1	Provisions Relating to Lessee’s Exercise of its Purchase Option	29
	19.2	No Purchase or Termination With Respect to Less than All of the Property	30
ARTICLE XX			30
	20.1	Purchase Option or Sale Option-General Provisions	30
	20.2	Lessee Purchase Option	30
	20.3	Third Party Sale Option	31
ARTICLE XXI			32
ARTICLE XXII			32
	22.1	Sale Procedure	32
	22.2	Application of Proceeds of Sale	34
	22.3	Indemnity for Excessive Wear	34
	22.4	Appraisal Procedure	35

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	22.5	Certain Obligations Continue	35
	22.6	Post Expiration Sales	35
ARTICLE XXIII			36
	23.1	Holding Over	36
ARTICLE XXIV			37
	24.1	Risk of Loss	37
ARTICLE XXV			37
	25.1	Assignment	37
	25.2	Subleases	37
ARTICLE XXVI			38
	26.1	No Waiver	38
ARTICLE XXVII			38
	27.1	Acceptance of Surrender	38
	27.2	No Merger of Title	38
ARTICLE XXVIII			39
ARTICLE XXIX			39
	29.1	Notices	39
ARTICLE XXX			39
	30.1	Miscellaneous	39
	30.2	Amendments and Modifications	39
	30.3	Successors and Assigns	39
	30.4	Headings and Table of Contents	39
	30.5	Counterparts	40
	30.6	GOVERNING LAW	40
	30.7	Calculation of Rent	40
	30.8	Memoranda of Lease and Lease Supplement	40
	30.9	Allocations between the Lenders and Lessor	40
	30.10	Limitations on Recourse	40
	30.11	WAIVERS OF JURY TRIAL	41
	30.12	Exercise of Lessor Rights	41
	30.13	SUBMISSION TO JURISDICTION; VENUE	41
	30.14	USURY SAVINGS PROVISION	41
	30.15	Restriction On Collateralization	42
	30.16	Amendment and Restatement	42

EXHIBITS

EXHIBIT A	- -	Lease Supplement No.
EXHIBIT B	- -	Memorandum of Lease and Lease Supplement No.

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LEASE AGREEMENT

     THIS AMENDED AND RESTATED LEASE AGREEMENT dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, this “Lease”) is between WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation, as lessor (the “Lessor”), and HUMAN GENOME SCIENCES, INC., a Delaware corporation, as lessee (the “Lessee”). All terms which are defined in this Agreement are subject to rules of usage and the definitions of such terms set forth in Appendix A to the Participation Agreement.

W I T N E S S E T H:

     A.     WHEREAS, Lessee, Traville LLC, the Trust, Wells Fargo Bank Northwest, National Association, BancBoston Leasing Investments Inc., Wachovia Bank, National Association (as successor in interest to First Union National Bank), EagleFunding Capital Corporation, Fleet Securities, Inc., and Fleet National Bank were parties to that certain Participation Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from time to time, the “Original Participation Agreement”);

     B.     WHEREAS, pursuant to the Master Transfer Agreement, among other things, the Lessor has obtained the right, title and interest of the Trust in the Property and under the Original Participation Agreement and the associated transaction documents with regard to the Property (including without limitation a ground leasehold interest in real estate comprising a part of the Property pursuant to the Ground Lease and titled ownership in the Equipment and Improvements comprising a part of the Property);

     C.     WHEREAS, such assignment as referenced in recital B included an assignment of the Trust’s interest as Lessor under the Lease Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated, the “Original Lease”) between the Trust and the Lessee;

     D.     WHEREAS, subject to the terms and conditions of the Operative Agreements, Lessor will fund the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property by the Construction Agent;

     E.     WHEREAS, Lessor and Lessee wish to amend and restate the Original Lease, as it relates to the Property, pursuant to the terms of this Lease;

     F.     WHEREAS, the Basic Term shall commence with respect to the Property upon the Commencement Date; and

     G.     WHEREAS, this is a transaction between unrelated parties wherein Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, the Property.

     NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

     1.1 Definitions.

     For purposes of this Lease, capitalized terms used in this Lease and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Amended and Restated Participation Agreement dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time in accordance with the applicable provisions thereof, the “Participation Agreement”) among Lessee, Lessor, the Conduit, the various financial institutions which are parties thereto from time to time as additional Lenders, Wachovia Securities, LLC, as the Deal Agent, Wachovia Bank, National Association, as agent for the Primary Financing Parties and, respecting the Security Documents, as the agent for the Secured Parties. Unless otherwise indicated, references in this Lease to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Lease. All terms which are defined in this Agreement are subject to the rules of usage of such terms set forth in Appendix A to the Participation Agreement.

     1.2 Interpretation.

     The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Lease.

ARTICLE II

     2.1 Property.

     Subject to the terms and conditions hereinafter set forth and contained in the Lease Supplement relating to the Property, Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, the Property.

     2.2 Lease Term.

     The basic term of this Lease with respect to the Property (the “Basic Term”) shall begin upon the Commencement Date and shall end six years and eleven months after the Closing Date (the “Basic Term Expiration Date”), unless the Basic Term is renewed or earlier terminated. The obligations of the parties under this Lease shall not commence until the Commencement Date.

     To the extent no Lease Default or Lease Event of Default has occurred and is continuing as of the Basic Term Expiration Date or the last day of the immediately preceding Renewal Term, as applicable, Lessee may, not less than three hundred sixty (360) days and no more than

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seven hundred twenty (720) days prior to the Basic Term Expiration Date or the last day of the first or second (but not the third) Renewal Term, if any, by irrevocable notice to Lessor, the Lenders and the Agent make written request to extend the Expiration Date for an additional period in each such Renewal Term of five (5) years. Lessor, each Lender and the Agent shall each make a determination, in the absolute and sole discretion of each such party, within ninety (90) days of receiving a request from Lessee to renew the term of this Lease as to whether or not such party will agree to renew the term of this Lease as requested; provided, however, that failure by any such party to make a timely response to Lessee’s request to renew the term of this Lease shall be deemed to constitute a refusal by such party to renew the term of this Lease. In response to a request to renew the term of this Lease, if (a) Lessor, each Lender and the Agent shall each agree to the requested renewal of the term of this Lease by delivering written confirmation of such acceptance of renewal of the term of this Lease to the Agent, Lessee and Lessor, then the Lease shall be renewed and shall expire on the date which is six years and eleven months after the then current Expiration Date or (b) Lessor, any Lender or the Agent shall refuse (or deem to have refused) to agree to the requested extension, then the Term shall not be extended and shall expire on the then current Expiration Date and unless the Lessee properly makes an election pursuant to Section 20.1, the Lessee shall be deemed to have elected the Purchase Option which shall be exercised on the then current Expiration Date. Each Renewal Term, if any, shall commence on the day immediately following the Basic Term Expiration Date or the last day of the first or second Renewal Term, as applicable.

     2.3 Title.

     The Property is leased to Lessee without any representation or warranty, express or implied, by Lessor and subject to the rights of parties in possession (if any), the state of title (including without limitation the Permitted Liens) existing as of the Commencement Date, and all applicable Legal Requirements. Lessee shall in no event have any recourse against Lessor for any defect in Lessor’s title to the Property or any interest of Lessee therein other than for Lessor Liens.

     2.4 Lease Supplement.

     On the Closing Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for the Property; provided, the Term shall not commence until the Commencement Date.

     2.5 Lessor Bankruptcy.

     The parties hereto agree that if Lessee elects to remain in possession of the Property after the rejection of this Lease by Lessor under Section 365(h) of the Bankruptcy Code all of the terms and provisions of this Lease shall be effective during such period of possession by Lessee, including Lessee’s Purchase Option, even if Lessor becomes subject to a case or proceeding under the Bankruptcy Code prior to the exercise by Lessee of such purchase rights.

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ARTICLE III

     3.1 Rent.

     (a) Lessee shall pay Basic Rent in arrears on each Payment Date occurring on or after the Commencement Date.

     (b) Basic Rent shall be due and payable in lawful money of the United States and shall be paid by wire transfer of immediately available funds on or before the due date therefor to such account at such bank as Lessor shall from time to time direct.

     (c) Lessee’s inability or failure to take possession of all or any portion of the Property when delivered by Lessor, whether or not attributable to any act or omission of Lessor, the Construction Agent, Lessee or any other Person or for any other reason whatsoever, shall not delay or otherwise affect Lessee’s obligation to pay Rent for the Property in accordance with the terms of this Lease.

     (d) Lessee shall make all payments of Rent payable to Lessor by wire transfer, such that each such payment is received prior to 11:00 a.m. New York, New York time, on the applicable date for payment of such amount.

     3.2 Payment of Basic Rent.

     Basic Rent shall be paid absolutely net to Lessor or its designee, so that this Lease shall yield to Lessor the full amount thereof, without setoff, deduction or reduction.

     3.3 Supplemental Rent.

     Lessee shall pay to the Person entitled thereto any and all Supplemental Rent when and as the same shall become due and payable. All such payments of Supplemental Rent shall be in the full amount thereof, without setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as Supplemental Rent due and owing to such Person, among other things, upon ten (10) Business Days’ prior written notice, any and all payment obligations (except for amounts payable as Basic Rent, payments made in connection with the satisfaction or removal of Lessor Liens, certain Transaction Expenses funded by Advances pursuant to the Operative Agreements, principal, Interest and Lessor Yield due and owing with respect to the Loans or the Lessor Advances, and amounts expressly excluded from indemnification pursuant to Section 11 of the Participation Agreement). The expiration or other termination of Lessee’s obligations to pay Basic Rent hereunder shall not limit or modify the obligations of Lessee with respect to Supplemental Rent. Unless expressly provided otherwise in this Lease, in the event of any failure on the part of Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall also promptly pay and discharge any fine, penalty, interest or cost which may be assessed or added for nonpayment or late payment of such Supplemental Rent, all of which shall also constitute Supplemental Rent. As a clarification and not in limitation of the foregoing, any and all payment obligations owing from time to time to any Hedge Provider pursuant to one or more Hedging Agreements (including without limitation any and all obligations to pay

4

termination payments thereunder) are hereby expressly agreed to be Supplemental Rent Obligations payable by Lessee.

     3.4 Performance on a Non-Business Day.

     If any Basic Rent is required hereunder on a day that is not a Business Day, then such Basic Rent shall be due on the corresponding Payment Date. If any Supplemental Rent is required hereunder on a day that is not a Business Day, then such Supplemental Rent shall be due on the next succeeding Business Day.

     3.5 Rent Payment Provisions.

     Lessee shall make payment of all Basic Rent and Supplemental Rent when due regardless of whether any of the Operative Agreements pursuant to which same is calculated and is owing shall have been rejected, avoided or disavowed in any bankruptcy or insolvency proceeding involving any of the parties to any of the Operative Agreements. Such Operative Agreements, including without limitation provisions relating to the payment of Supplemental Rent with the proceeds of Advances pursuant to Section 8.3(d) of the Participation Agreement, and their related definitions are incorporated herein by reference and shall survive any termination, amendment or rejection of any such Operative Agreements.

     3.6 Payment to Agent.

     The Lessor hereby instructs the Lessee, and the Lessee hereby acknowledges and agrees, that until such time as the Loans and the Lessor Advances are paid in full and the Liens evidenced by the Security Documents (including the Security Agreement and the Mortgage Instrument) have been released (i) any and all Rent (excluding Excepted Payments) and any and all other amounts of any kind or type under this Lease due and owing or payable to any Person shall instead be paid directly to the Agent (excluding Excepted Payments) or as the Agent may direct from time to time for allocation and distribution in accordance with the procedures set forth in Section 8.7 of the Participation Agreement.

     3.7 Ground Lease and Appurtenant Rights.

     Lessee shall make (or cause to be made) all payments required to be made by Lessor and perform (or cause to be performed) all obligations of Lessor (whether such payment or other obligations are now existing or hereinafter arising) pursuant to the Ground Lease or with respect to any of the Appurtenant Rights.

ARTICLE IV

     4.1 Taxes; Utility Charges.

     Subject to the terms of Article XIII relating to permitted contests, Lessee shall pay or cause to be paid all Impositions with respect to the Property and/or the use, occupancy,

5

operation, repair, access, maintenance or operation thereof and all charges for electricity, power, gas, oil, water, telephone, sanitary sewer service and all other rents, utilities and operating expenses of any kind or type used in or on the Property during the Term. Upon Lessor’s reasonable written request, Lessee shall provide Lessor from time to time with evidence of all such payments referenced in the foregoing sentence. Lessee shall be entitled to receive any credit or refund with respect to any Imposition or utility charge paid by Lessee. Unless a Lease Event of Default shall have occurred and be continuing, the amount of any credit or refund received by Lessor on account of any Imposition or utility charge paid by Lessee, net of the costs and expenses incurred by Lessor in obtaining such credit or refund, shall be promptly paid over to Lessee. All charges for Impositions or utilities imposed with respect to the Property for a period during which this Lease expires or terminates shall be adjusted and prorated on a daily basis between Lessor and Lessee, and each party shall pay or reimburse the other for such party’s pro rata share thereof.

ARTICLE V

     5.1 Quiet Enjoyment.

     Subject to the rights of Lessor contained in Sections 17.2 – 17.11 and 20.3 and the other terms of this Lease and the other Operative Agreements and so long as no Lease Event of Default shall have occurred and be continuing, Lessee shall have the right to name the Property for purpose of commercial usage and shall peaceably and quietly have, hold and enjoy the Property for the Term, free of any claim or other action by Lessor or anyone rightfully claiming by, through or under Lessor (other than Lessee) with respect to any matters arising from and after the Commencement Date.

ARTICLE VI

     6.1 Net Lease.

     This Lease shall constitute a net lease, and the obligations of Lessee hereunder are absolute and unconditional. Lessee shall pay all operating expenses arising out of the use, operation and/or occupancy of the Property. Any present or future law to the contrary notwithstanding, this Lease shall not terminate, nor shall Lessee be entitled to any abatement, suspension, deferment, reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall the obligations of Lessee hereunder be affected (except as expressly herein permitted and by performance of the obligations in connection therewith) for any reason whatsoever, including without limitation by reason of: (a) any damage to or destruction of the Property or any part thereof; (b) any taking of the Property or any part thereof or interest therein by Condemnation or otherwise; (c) any prohibition, limitation, restriction or prevention of Lessee’s use, occupancy or enjoyment of the Property or any part thereof, or any interference with such use, occupancy or enjoyment by any Person or for any other reason; (d) any title defect, Lien or any matter affecting title to the Property; (e) any eviction by paramount title or otherwise; (f) any default by Lessor hereunder; (g) any action for bankruptcy, insolvency, reorganization, liquidation,

6

receivership, dissolution or other proceeding relating to or affecting the Agent, any Primary Financing Party, Lessee or any Governmental Authority; (h) the impossibility or illegality of performance by Lessor, Lessee or both; (i) any action of any Governmental Authority or any other Person; (j) Lessee’s acquisition of ownership of all or part of the Property; (k) breach of any warranty or representation with respect to the Property or any Operative Agreement; (l) any defect in the condition, quality or fitness for use of the Property or any part thereof; or (m) any other cause or circumstance whether similar or dissimilar to the foregoing and whether or not Lessee shall have notice or knowledge of any of the foregoing. The parties intend that the obligations of Lessee hereunder shall be covenants, agreements and obligations that are separate and independent from any obligations of Lessor hereunder and shall continue unaffected unless such covenants, agreements and obligations shall have been modified or terminated in accordance with an express provision of this Lease. Lessor and Lessee acknowledge and agree that the provisions of this Section 6.1 have been specifically reviewed and subject to negotiation.

     6.2 No Termination or Abatement.

     Lessee shall remain obligated under this Lease in accordance with its terms and shall not take any action to terminate, rescind or avoid this Lease, notwithstanding any action for bankruptcy, insolvency, reorganization, liquidation, dissolution, or other proceeding affecting any Person or any Governmental Authority, or any action with respect to this Lease or any Operative Agreement which may be taken by any trustee, receiver or liquidator of any Person or any Governmental Authority or by any court with respect to any Person, or any Governmental Authority. Lessee hereby waives all right (a) to terminate or surrender this Lease (except as permitted under the terms of the Operative Agreements) or (b) to avail itself of any abatement, suspension, deferment, reduction, setoff, counterclaim or defense (other than payment in full) with respect to any Rent. Lessee shall remain obligated under this Lease in accordance with its terms and Lessee hereby waives any and all rights now or hereafter conferred by statute or otherwise to modify or to avoid strict compliance with its obligations under this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound by all of the terms and conditions contained in this Lease.

ARTICLE VII

     7.1 Ownership of the Property.

     (a) Lessor and Lessee intend that (i) for financial accounting purposes with respect to Lessee (A) this Lease will be treated as an “operating lease” pursuant to Statement of Financial Accounting Standards No. 13, as amended, (B) Lessor will be the owner and lessor of the Property and (C) Lessee will be the lessee of the Property, but (ii) for federal and all state and local income tax purposes, and for all bankruptcy purposes (including the substantive law upon which bankruptcy proceedings are based), (A) this Lease will be treated as a financing arrangement and (B) Lessee will be treated as the owner of the Property and will be entitled to all tax benefits ordinarily available to owners of property similar to the Property for such tax purposes. Notwithstanding the foregoing, neither party hereto has made, or shall be deemed to have made, any

7

representation or warranty as to the availability of any of the foregoing treatments under applicable accounting rules, tax, bankruptcy or under any other set of rules. Lessee shall claim the cost recovery deductions associated with the Property, and Lessor shall not, unless prohibited by Law, take on its tax return a position inconsistent with Lessee’s claim of such deductions. It is the further intent of Lessor and Lessee that this Lease and the transaction evidenced by the Operative Agreements conform with and satisfy the requirements of, to the extent applicable, FASB Interpretation No. 46, Emerging Issues Task Force, 1997\Issue 97-1 and Emerging Issues Task Force, 1997\Issue 97-10.

     (b) In order to secure the obligations of Lessee now existing or hereafter arising under any and all Operative Agreements, Lessee hereby conveys, grants, assigns, transfers, hypothecates, mortgages and sets over to Lessor, for the benefit of the Secured Parties, a first priority security interest in and lien on all right, title and interest of Lessee (now owned or hereafter acquired) in and to the Property, Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and the proceeds of each of the foregoing to the extent such is personal property and irrevocably grants and conveys a lien, deed of trust or mortgage, as applicable, on all right, title and interest of Lessee (now owned or hereafter acquired) in and to the Property to the extent such is real property. Lessor and Lessee further intend and agree that, for the purpose of securing the obligations of Lessee now existing or hereafter arising under the Operative Agreements, this Lease as supplemented by the Lease Supplement, shall be a security agreement and financing statement within the meaning of Article 9 of the Uniform Commercial Code respecting the Lessee’s interest in the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and the proceeds of each of the foregoing) to the extent such is personal property and an irrevocable grant and conveyance of a lien, deed of trust or mortgage, as applicable, on the Lessee’s interest in the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and the proceeds of each of the foregoing) to the extent such is real property and constitutes a grant by Lessee to Lessor of a security interest, lien, deed of trust or mortgage, as applicable, in all of Lessee’s right, title and interest in and to the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and the proceeds of each of the foregoing) of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, and an assignment of all rents, profits and income produced by the Property. Lessee and Lessor further intend and agree that notifications to Persons holding such proceeds, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of Lessee, when given, shall be deemed to have been given for the purpose of perfecting the foregoing lien, security interest, mortgage lien or deed of trust, as applicable, under applicable law. Lessee shall promptly take such actions as necessary (including without limitation the filing of Primary Financing Party Financing Statements and memoranda (or short forms) of this Lease and the Lease Supplement) to ensure that the lien, security interest, mortgage lien or deed of trust, as applicable, in the Property and the other items referenced above will be deemed

8

to be a perfected lien, security interest, mortgage lien or deed of trust, as applicable, of first priority (subject only to Permitted Liens and Lessor Liens), under applicable law and will be maintained as such throughout the Term.

ARTICLE VIII

     8.1 Condition of the Property.

     LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY “AS-IS WHERE-IS” WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE STATE OF TITLE EXISTING AS OF THE COMMENCEMENT DATE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY PRIMARY FINANCING PARTY HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY PRIMARY FINANCING PARTY SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT THE PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT AND EACH PRIMARY FINANCING PARTY ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT AND THE PRIMARY FINANCING PARTIES, ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.

     8.2 Possession and Use of the Property.

     (a) At all times during the Term with respect to the Property, the Property shall be a Permitted Facility and shall be used by Lessee in the ordinary course of its

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business. Lessee shall pay, or cause to be paid during the Term, all charges and costs required in connection with the use of the Property as contemplated by this Lease. Lessee shall not commit or permit any physical waste of the Property or any part thereof.

     (b) As of the Commencement Date, the address stated in Section 6.2(i) of the Participation Agreement is the principal place of business and chief executive office of Lessee (as such terms are used in the Uniform Commercial Code) and its location of jurisdiction (as such term is used in the Uniform Commercial Code of any applicable jurisdiction) is Delaware. Lessee will provide Lessor with prior written notice of any change of location of its principal place of business, the location of its chief executive office or the location of its jurisdiction of organization. Regarding the Property, the Lease Supplement shall correctly identify the initial location of the related Equipment (if any) and Improvements (if any) and contain an accurate legal description for the related parcel of Land and describe the Appurtenant Rights. The Equipment and Improvements respecting the Property will be located only at the location identified in the Lease Supplement.

     (c) Lessee will not attach or incorporate any item of Equipment to or in any other item of equipment or personal property, or to or in any real property, in a manner that could give rise to the assertion of any Lien on such item of Equipment by reason of such attachment or the assertion of a claim that such item of Equipment has become a fixture and is subject to a Lien in favor of a third party that is prior to the Liens thereon created by the Operative Agreements.

     (d) As of the Commencement Date, the entire Property (and each component thereof), Equipment, Improvements and Land shall be deemed to have been accepted by Lessee for all purposes of this Lease and to be subject to this Lease.

     (e) At all times during the Term, Lessee will comply with all obligations under and (to the extent no Lease Event of Default exists and provided that any such exercise of rights and remedies hereinafter referred to will not impair the value, utility or remaining useful life of the Property) shall be permitted to exercise all rights and remedies under all operation and easement agreements and related or similar agreements applicable to the Property.

     8.3 Integrated Property.

     On the Commencement Date, Lessee shall, at its sole cost and expense, cause the Property, to constitute (and for the duration of the Term shall continue to constitute) all of the equipment, facilities, rights, personal property and real property necessary or appropriate for immediate occupancy.

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ARTICLE IX

     9.1 Compliance With Legal Requirements, Insurance Requirements and Manufacturer’s Specifications and Standards.

     Subject to the terms of Article XIII relating to permitted contests, Lessee, at its sole cost and expense, shall (a) comply with all applicable Legal Requirements (including without limitation all Environmental Laws) and all Insurance Requirements relating to the Property, (b) procure, maintain and comply with all licenses, permits, orders, approvals, consents and other authorizations required for the use, operation, maintenance, repair, refurbishment and restoration of the Property, and (c) comply with all manufacturer’s specifications and standards, including without limitation for the use, operation, maintenance, repair, refurbishment and restoration of the Property, whether or not compliance therewith shall require structural or extraordinary changes in the Property or interfere with the use and enjoyment of the Property unless the failure to procure, maintain and comply with such items identified in subparagraphs (b) and (c), individually or in the aggregate, shall not and could not reasonably be expected to have a Material Adverse Effect. Lessor agrees to take such actions as may be reasonably requested by Lessee in connection with the compliance by Lessee of its obligations under this Section 9.1.

ARTICLE X

     10.1 Maintenance and Repair; Return.

     (a) Lessee, at its sole cost and expense, shall maintain the Property in the repair and condition as existed as of the Completion Date (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof, of every kind and nature whatsoever, whether interior or exterior, ordinary or extraordinary, structural or nonstructural or foreseen or unforeseen, in each case as required by Section 9.1 and on a basis consistent with the operation and maintenance of Lessee’s properties or equipment comparable in type and function to the Property, such that the Property is capable of being immediately utilized by a third party and in compliance with standard industry practice, subject, however, to the provisions of Article XV with respect to Casualty and Condemnation.

     (b) Lessee shall not use or locate any component of the Property outside of Montgomery County, Maryland. Lessee shall not move or relocate any component of the Property beyond the boundaries of the Land (comprising part of the Property) described in the applicable Lease Supplement, except for the temporary removal of Equipment and other personal property for repair or replacement.

     (c) If any component of the Property becomes worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, Lessee, at its own expense, will within a reasonable time replace such component with a replacement component which is free and clear of all Liens (other than Permitted Liens and Lessor Liens) and has a value, utility and useful life at least equal to the component replaced

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(assuming the component replaced had been maintained and repaired in accordance with the requirements of this Lease). This Section 10.1(c) does not include certain processing equipment of the Lessee as a component of the Property, if and to the extent such processing equipment (i) was not purchased with any Advance, and (ii) is not necessary or appropriate in order for the Property to comply with Section 8.3, 9.1 or 11.1, or any other applicable provisions of this Lease.

     (d) [Reserved].

     (e) Lessee shall cause to be delivered to Lessor (at Lessee’s sole expense) one (1) or more additional Appraisals (or reappraisals or updates of prior Appraisals of the Property) as Lessor may request if and to the extent any of the Agent or any Primary Financing Party is required pursuant to any applicable Legal Requirement to obtain such Appraisals (or reappraisals or updates of prior Appraisals) and upon the occurrence of any Lease Event of Default.

     (f) Lessor shall under no circumstances be required to build any improvements or install any equipment on the Property, make any repairs, replacements, alterations or renewals of any nature or description to the Property, make any expenditure whatsoever in connection with this Lease or maintain the Property in any way. Lessor shall not be required to maintain, repair or rebuild all or any part of the Property, and Lessee waives the right to (i) require Lessor to maintain, repair, or rebuild all or any part of the Property, or (ii) make repairs at the expense of Lessor pursuant to any Legal Requirement, Insurance Requirement, contract, agreement, covenant, condition or restriction at any time in effect.

     (g) Lessee shall, upon the expiration or earlier termination of this Lease, if Lessee shall not have exercised its Purchase Option with respect to the Property and purchased the Property, surrender the Property (i) to Lessor pursuant to the exercise of the applicable remedies upon the occurrence and continuance of a Lease Event of Default or (ii) pursuant to the second paragraph of Section 22.1(a) hereof, to Lessor or the third party purchaser, as the case may be, subject to Lessee’s obligations under this Lease (including without limitation the obligations of Lessee at the time of such surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1, 12.1, 22.1 and 23.1).

     10.2 Environmental Inspection.

     If Lessee has not given notice of exercise of its Purchase Option on the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee does not elect (for itself or its designee) to purchase the Property in accordance with the terms of this Lease, then not more than one hundred eighty (180) days nor less than sixty (60) days prior to the Expiration Date, Lessee at its expense shall cause to be delivered to Lessor a Phase I environmental site assessment recently prepared (no more than thirty (30) days prior to the date of delivery) by an independent recognized professional reasonably acceptable to Lessor, and in form, scope and content reasonably satisfactory to Lessor.

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ARTICLE XI

     11.1 Modifications.

     (a) Lessee at its sole cost and expense, at any time and from time to time without the consent of Lessor may make modifications, alterations, renovations, improvements and additions to the Property or any part thereof and substitutions and replacements therefor (collectively, “Modifications”), and Lessee shall make any and all Modifications required to be made (subject to Section 9.1) pursuant to all Legal Requirements, Insurance Requirements and manufacturer’s specifications and standards; provided, that: (i) no Modification shall materially impair the value, utility or useful life of the Property from that which existed immediately prior to such Modification (assuming the Property has been maintained and repaired in accordance with the requirements of this Lease); (ii) each Modification shall be done expeditiously and in a good and workmanlike manner; (iii) no Modification shall adversely affect the structural integrity of the Property; (iv) to the extent required by Section 14.2(a), Lessee shall maintain builders’ risk insurance at all times when a Modification is in progress; (v) subject to the terms of Article XIII relating to permitted contests, Lessee shall pay all costs and expenses and discharge any Liens arising with respect to any Modification; (vi) each Modification shall comply with the requirements of this Lease (including without limitation Sections 8.2 and 10.1); and (vii) no Improvement shall be demolished or otherwise rendered unfit for use unless Lessee shall finance the proposed replacement Modification outside of this lease facility and without granting a lien to such financing party in such replacement Modification and such replacement Modification shall not cause a Material Adverse Effect; provided, further, Lessee shall not make any Modification (unless required by any Legal Requirement, Insurance Requirement or manufacturer’s specifications or standards) to the extent any such Modification, individually or in the aggregate, shall or could reasonably be expected to have a Material Adverse Effect. All Modifications shall immediately and without further action upon their incorporation into the Property (1) become property of Lessor, (2) be subject to this Lease and (3) be titled in the name of Lessor. Lessee shall not remove or attempt to remove any Modification titled to Lessor from the Property, except as set forth in Section 10.1. Lessee, at its own cost and expense, will pay for the repairs of any damage to the Property caused by the removal or attempted removal of any Modification.

     (b) [Reserved].

     (c) At the request of Lessee, Lessor shall execute and deliver to Lessee such authorizations and other documents as may reasonably be required in connection with any application for permits, licenses, consents, approvals, entitlements and other authorizations required for any such Modification, and, if reasonably requested by Lessee, shall join as a party therein; provided, that all costs and expenses actually incurred by Lessor shall be payable by Lessee.

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ARTICLE XII

     12.1 Warranty of Title.

     (a) Lessee hereby acknowledges and shall cause title in the Property (including without limitation all Equipment, all Improvements, all replacement components to the Property and all Modifications) immediately and without further action to vest in and be the property of Lessor and to be subject to the terms of this Lease from and after the Commencement Date or such date of incorporation into the Property. Lessee agrees that, subject to the terms of Article XIII relating to permitted contests, Lessee shall not directly or indirectly create or allow to remain, and shall promptly discharge at its sole cost and expense, any Lien, defect, attachment, levy, title retention agreement or claim upon the Property, any component thereof or any Modifications or any Lien, attachment, levy or claim with respect to the Rent or with respect to any amounts held by Lessor, the Agent or any Primary Financing Party pursuant to any Operative Agreement, other than Permitted Liens and Lessor Liens. Lessee shall promptly notify Lessor in the event it receives actual knowledge that a Lien other than a Permitted Lien or Lessor Lien has occurred with respect to the Property, the Rent or any other such amounts, and Lessee represents and warrants to, and covenants with, Lessor that the Liens in favor of Lessor and/or the Agent created by the Operative Agreements are (and until the Financing Parties under the Operative Agreements have been paid in full shall remain) first priority Liens subject only to Permitted Liens and Lessor Liens. At all times subsequent to the Commencement Date, Lessee shall (i) cause a valid, perfected, first priority Lien (subject to Permitted Liens and Lessor Liens) on the Property pursuant to this Lease to be in place in favor of the Agent (for the benefit of the Secured Parties) and (ii) file, or cause to be filed, all necessary documents under the applicable real property law and Article 9 of the Uniform Commercial Code to perfect such title and Liens.

     (b) Subject to Section 11.1(b), nothing contained in this Lease shall be construed as constituting the consent or request of Lessor or Agent, expressed or implied, to or for the performance by any contractor, mechanic, laborer, materialman, supplier or vendor of any labor or services or for the furnishing of any materials for any construction, alteration, addition, repair or demolition of or to the Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR NOR THE AGENT IS AND NEITHER SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR OR THE AGENT IN AND TO THE PROPERTY.

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ARTICLE XIII

     13.1 Permitted Contests Other Than in Respect of Indemnities.

     Except to the extent otherwise provided for in Section 11 of the Participation Agreement, Lessee, on its own or on Lessor’s behalf but at Lessee’s sole cost and expense, may contest, by appropriate administrative or judicial proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Legal Requirement, Imposition or utility charge payable pursuant to Section 4.1 or 13.2 or any of the matters described in Section 9.1(b) or any Lien, attachment, levy, encumbrance or encroachment and Lessor agrees not to pay, settle or otherwise compromise any such item, provided, that (a) the commencement and continuation of such proceedings shall suspend the collection of any such contested amount from, and suspend the enforcement thereof against, the Property, the Lessor, the Agent and each Primary Financing Party; (b) there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens) on the Property that would subject any part of the Property or any Rent to a material risk of being sold, forfeited, lost or deferred or a material reduction in value; (c) at no time during the permitted contest shall there be a risk of the imposition of criminal liability or material civil liability on the Agent or any Primary Financing Party for failure to comply therewith; and (d) in the event that, at any time, there shall be a material risk of extending the application of such item beyond the end of the Term, then Lessee shall deliver to Lessor, the Agent and each other Financing Party an Officer’s Certificate certifying as to the matters set forth in clauses (a), (b) and (c) of this Section 13.1. Lessor shall execute and deliver to Lessee such authorizations and other documents as may reasonably be required in connection with any such contest and, if reasonably requested by Lessee, shall join as a party therein; provided, that all reasonable costs and expenses actually incurred by Lessor shall be payable by Lessee.

     13.2 Impositions, Utility Charges, Other Matters.

     Except with respect to Impositions, utility charges and such other matters referenced in Section 13.1 which are the subject of ongoing proceedings contesting the same in a manner consistent with the requirements of Section 13.1, Lessee shall cause all Impositions, utility charges and such other matters to be timely complied with, paid, settled or compromised, as appropriate, with respect to the Property.

ARTICLE XIV

     14.1 Public Liability and Workers’ Compensation Insurance.

     Subject to Section 14.5, during the Term for the Property, Lessee shall procure and carry, at Lessee’s sole cost and expense, commercial general liability and umbrella liability insurance for claims for injuries or death sustained by persons or damage to property while on the Property or respecting the Equipment and such other public liability coverages as are then customarily carried by similarly situated companies conducting business similar to that conducted by Lessee in the same geographic region. Such insurance shall be on terms and in amounts that are no less

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favorable than insurance maintained by Lessee with respect to similar properties and equipment that it owns and are then carried by similarly situated companies conducting business similar to that conducted by Lessee, and in no event shall have a minimum combined single limit per occurrence coverage (i) for commercial general liability of less than $1,000,000 and (ii) for umbrella liability of less than $20,000,000. The policies shall name Lessee as the insured and shall be endorsed to name the Agent and each Primary Financing Party as additional insureds. The policies shall also specifically provide that such policies shall be considered primary insurance which shall apply to any loss or claim arising in connection with the Property before any contribution by any insurance which the Agent or any Primary Financing Party may have in force. In the operation of the Property, Lessee shall comply with applicable workers’ compensation laws and protect the Agent and each Primary Financing Party against any liability under such laws.

     14.2 Permanent Hazard and Other Insurance.

     (a) During the Term, Lessee shall keep the Property insured against all risk of physical loss or damage by fire and other risks covered under an all risk, extended coverage or “special form” policy of insurance and shall maintain builders’ risk insurance during construction of any Improvements or Modifications in each case in amounts no less than the Termination Value from time to time and on terms that (i) are no less favorable than insurance covering other similar properties owned by Lessee and (ii) are then carried by similarly situated companies conducting business similar to that conducted by Lessee. The policies shall name Lessee as the insured and shall be endorsed to name Lessor and the Agent (on behalf of the Secured Parties) as mortgagees and loss payees, as their interests may appear; provided, so long as no Lease Event of Default exists, any and all losses shall be adjusted by Lessee, and any loss payable under the insurance policies required by this Section for losses up to $1,000,000 will be paid to Lessee.

     (b) If, during the Term with respect to the Property the area in which the Property is located is designated a “flood-prone” area pursuant to the Flood Disaster Protection Act of 1973, or any amendments or supplements thereto or is in a zone designated A or V, then Lessee shall comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973. In addition, Lessee will fully comply with the requirements of the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as each may be amended from time to time, and with any other Legal Requirement, concerning flood insurance to the extent that it applies to the Property. During the Term, Lessee shall comply with workers’ compensation laws applicable to Lessee and protect the Agent and each Primary Financing Party against any liability under such laws.

     14.3 Coverage.

     (a) As of the date of this Lease and annually thereafter during the Term, Lessee shall furnish the Agent (on behalf of each Primary Financing Party and the other beneficiaries of such insurance coverage) with certificates, in form and substance

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reasonably satisfactory to Agent, prepared by the insurers or insurance broker of Lessee showing the insurance required under Sections 14.1 and 14.2 to be in effect, naming (to the extent of their respective interests) the Agent and each Primary Financing Party as additional insureds (in the case of liability insurance) and the Lessor and the Agent (on behalf of the Secured Parties) as mortgagees and loss payees (in the case of property/hazard, builders’ risk and flood insurance) and evidencing the other requirements of this Article XIV. All such insurance shall be at the cost and expense of Lessee and provided by nationally recognized, financially sound insurance companies having an A or better rating by A.M. Best’s Key Rating Guide and a rating by S&P or Moody’s of A or A2, respectively, or better. Lessee shall cause such certificates to include a provision for ten (10) days’ advance written notice by the insurer to the Agent (on behalf of Lessor, each Primary Financing Party and the other beneficiaries of such insurance coverage) in the event of cancellation or material alteration of such insurance. If a Lease Event of Default has occurred and is continuing and the Agent (on behalf of any of the Financing Parties) so requests, Lessee shall deliver to the Agent (on behalf of the Financing Parties) copies of all insurance policies required by Sections 14.1 and 14.2.

     (b) Lessee agrees that the insurance policy or policies required by Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate clause pursuant to which any such policy shall provide that it will not be invalidated with respect to the rights of the Agent or any Primary Financing Party should Lessee or any contractor, as the case may be, have waived any or all rights of recovery against any party for losses covered by such policy or due to any breach of warranty, fraud, action, inaction or misrepresentation by Lessee or any Person acting on behalf of Lessee. Lessee hereby waives any and all such rights against the Agent and each Primary Financing Party to the extent of payments made to any such Person under any such policy.

     (c) Lessee shall not carry separate insurance concurrent in kind or form or contributing in the event of loss with any insurance required under this Article XIV.

     (d) Lessee shall pay as they become due all premiums for the insurance required by Section 14.1 and Section 14.2, shall renew or replace each policy prior to the expiration date thereof or otherwise maintain the coverage required by such Sections without any lapse in coverage.

     14.4 Policies.

     All insurance required by this Article XIV may be provided under (i) an individual policy covering the Property, (ii) a blanket policy or policies which includes other liabilities, properties and locations of Lessee, (iii) an increased coverage or “umbrella policy” provided and utilized to increase the coverage provided by individual or blanket policies in lower amounts (provided the aggregate limits of liability shall comply with the provisions of this Article XIV) or (iv) a combination of any of the foregoing insurance programs.

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ARTICLE XV

     15.1 Casualty and Condemnation.

     (a) Subject to the provisions of this Article XV and Article XVI (in the event Lessee delivers, or is obligated to deliver or is deemed to have delivered, a Termination Notice), and prior to the occurrence and continuation of a Lease Default or a Lease Event of Default, Lessee shall be entitled to receive (and Lessor hereby irrevocably assigns to Lessee all of Lessor’s right, title and interest in) any condemnation proceeds, award, compensation or insurance proceeds under Sections 14.2(a) or 14.2(b) hereof to which Lessee or Lessor may become entitled by reason of their respective interests in the Property (i) if all or a portion of the Property is damaged or destroyed in whole or in part by a Casualty or (ii) if the use, access, occupancy, easement rights or title to the Property or any part thereof is the subject of a Condemnation; provided, however, if a Lease Default or Lease Event of Default shall have occurred and be continuing or if such condemnation proceeds, award, compensation or insurance proceeds shall exceed $1,000,000, then such condemnation proceeds, award, compensation or insurance proceeds shall be paid directly to Lessor or, if received by Lessee, shall be held in trust for Lessor, and shall be paid over by Lessee to Lessor and held in accordance with the terms of this Article XV. All such amounts in excess of $1,000,000 held by Lessor hereunder on account of any condemnation proceeds, award, compensation or insurance proceeds either paid directly to Lessor or turned over to Lessor shall be held, subject to the terms of this Article XV, as security for the performance of Lessee’s obligations hereunder and under the other Operative Agreements.

     (b) Lessee may appear in any proceeding or action to negotiate, prosecute, adjust or appeal any claim for any award, compensation or insurance payment on account of any such Casualty or Condemnation and shall pay all expenses thereof. At Lessee’s reasonable request, and at Lessee’s sole cost and expense, Lessor and the Agent shall participate in any such proceeding, action, negotiation, prosecution or adjustment. Lessor and Lessee agree that this Lease shall control the rights of Lessor and Lessee in and to any such award, compensation or insurance payment.

     (c) If Lessee shall receive notice of a Casualty or a Condemnation of the Property or any interest therein where damage to the Property is estimated to equal or exceed thirty-five percent (35%) of the Property Cost, Lessee shall give notice thereof to Lessor promptly after Lessee’s receipt of such notice. In the event such a Casualty or Condemnation occurs (regardless of whether Lessee gives notice thereof), then Lessee shall be deemed to have delivered a Termination Notice to Lessor and the provisions of Sections 16.1 and 16.2 shall apply.

     (d) In the event of a Casualty or a Condemnation (regardless of whether notice thereof must be given pursuant to paragraph (c)), this Lease shall terminate with respect to the Property in accordance with Section 16.1 if Lessee, within thirty (30) days after such occurrence, delivers to Lessor a notice to such effect.

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     (e) If pursuant to this Section 15.1 this Lease shall continue in full force and effect following a Casualty or Condemnation with respect to the Property, Lessee shall, at its sole cost and expense (and, unless a Lease Default or Lease Event of Default shall have occurred and be continuing, using the proceeds of any award, compensation or insurance with respect to such Casualty or Condemnation, including without limitation any such condemnation proceeds, award, compensation or insurance which has been received by Lessor or the Agent; provided, prior to Lessee using any such proceeds of any award, compensation or insurance and prior to the payment of the same from Lessor to Lessee, Lessee must give Lessor reasonable evidence of the applicable restoration and repair work regarding the Property), promptly and diligently repair any damage to the Property caused by such Casualty or Condemnation in conformity with the requirements of Sections 10.1 and 11.1, using the as-built plans and specifications or manufacturer’s specifications for the applicable Improvements, Equipment or other components of the Property (as modified to give effect to any subsequent Modifications, any Condemnation affecting the Property and all applicable Legal Requirements), so as to restore the Property to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty or Condemnation (assuming all maintenance and repair standards have been satisfied). In such event, title to the Property shall remain with Lessor.

     If any Lease Default or Lease Event of Default has occurred and is continuing and any Loans, Lessor Advances or other amounts are due and owing to any Financing Party pursuant to the Operative Agreements, Lessee shall promptly (and in any event within three (3) Business Days of the date Lessee receives any such amount) pay Lessor any award, compensation or insurance proceeds received on account of any Casualty or Condemnation with respect to the Property and any Excess Proceeds. All such awards, compensation, insurance proceeds and Excess Proceeds shall be held as security for the performance of Lessee’s obligations hereunder and under the other Operative Agreements and applied to such obligations upon the exercise of remedies in connection with the occurrence of a Lease Event of Default.

     (f) In no event shall a Casualty or Condemnation affect Lessee’s obligations to pay Rent pursuant to Article III.

     (g) Notwithstanding anything to the contrary set forth in Section 15.1(a) or Section 15.1(e), if during the Term a Casualty occurs with respect to the Property or Lessee receives notice of a Condemnation with respect to the Property, and following such Casualty or Condemnation, the Property cannot reasonably be restored, repaired or replaced on or before the day one hundred eighty (180) days prior to the end of the Term or the date nine (9) months after the occurrence of such Casualty or Condemnation (if such Casualty or Condemnation occurs during the Term) to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty or Condemnation (assuming all maintenance and repair standards have been satisfied) or on or before such day the Property is not in fact so restored, repaired or replaced, then Lessee shall be required to exercise its Purchase Option for the Property on the next Payment Date (notwithstanding the limits

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on such exercise contained in Section 20.2) and pay Lessor the Termination Value for the Property. If a Lease Default or a Lease Event of Default has occurred and is continuing and any Loans, Lessor Advance or other amounts are owing with respect thereto, then any Excess Proceeds (to the extent of any such Loans, Lessor Advance or other amounts owing with respect thereto) shall be paid to Lessor, held as security for the performance of Lessee’s obligations hereunder and under the other Operative Agreements and applied to such obligations upon the exercise of remedies in connection with the occurrence of a Lease Event of Default, with the remainder of such Excess Proceeds in excess of such Loans, Lessor Advance and other amounts owing with respect thereto being distributed to the Lessee.

     15.2 Environmental Matters.

     Promptly upon Lessee’s actual knowledge of the presence of Hazardous Substances in any portion of the Property in concentrations and conditions that constitute an Environmental Violation and which, in the reasonable opinion of Lessee, the cost to undertake any legally required response, clean up, remedial or other action will or might result in a cost to Lessee of more than $100,000, Lessee shall notify Lessor in writing of such condition. In the event of any Environmental Violation (regardless of whether notice thereof must be given), Lessee shall, not later than thirty (30) days after Lessee has actual knowledge of such Environmental Violation, either deliver to Lessor a Termination Notice with respect to the Property pursuant to Section 16.1, if applicable, or, at Lessee’s sole cost and expense, promptly during such thirty (30) day period deliver to Lessor notice of intention to remediate, and thereafter promptly and diligently undertake and complete any response, clean up, remedial or other action (including without limitation the pursuit by Lessee of appropriate action against any off-site or third party source for contamination) necessary to remove, cleanup or remediate the Environmental Violation in compliance with all Environmental Laws. Any such undertaking shall be timely completed in accordance with prudent industry standards. If Lessee does not deliver a Termination Notice with respect to the Property pursuant to Section 16.1, Lessee shall, upon completion of remedial action by Lessee, cause to be prepared by a reputable environmental consultant reasonably acceptable to Agent a report describing the Environmental Violation and the actions taken by Lessee (or its agents) in response to such Environmental Violation, and a statement by the consultant that the Environmental Violation has been remedied in compliance with applicable Environmental Law. Not less than sixty (60) days and not more than one hundred eighty (180) days prior to any time that Lessee elects to cease operations with respect to the Property or to re-market the Property pursuant to the Sale Option pursuant to Section 20.1 hereof or pursuant to any other provision of any Operative Agreement, Lessee at its expense shall cause to be delivered to Agent a Phase I environmental site assessment (or an update of a prior Phase I environmental site assessment) respecting the Property recently prepared (no more than thirty (30) days prior to the date of delivery) by an independent recognized professional acceptable to Agent in its reasonable discretion and in form, scope and content satisfactory to Agent in its reasonable discretion. If Lessee fails to comply with the foregoing obligation regarding the Phase I environmental site assessment, Lessee shall be obligated to purchase the Property for its Termination Value and shall not be permitted to exercise (and Lessor shall have no obligation to honor any such exercise) any rights under any

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Operative Agreement regarding a sale of the Property to a Person other than Lessee or any Affiliate or other designee of Lessee.

     15.3 Notice of Environmental Matters.

     Promptly, but in any event within fifteen (15) days from the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written notice of any pending or threatened claim, action or proceeding involving any Environmental Law or any Release on or in connection with the Property. All such notices shall describe in reasonable detail the nature of the claim, action or proceeding and Lessee’s proposed response thereto. In addition, Lessee shall provide to Lessor, within ten (10) days of receipt, copies of all material written communications with any Governmental Authority relating to any Environmental Law in connection with the Property. Lessee shall also promptly provide such detailed reports of any such material environmental claims as may reasonably be requested by Lessor.

ARTICLE XVI

     16.1 Termination Upon Certain Events.

     If Lessee has delivered, or is deemed to have delivered, written notice of a termination of this Lease to Lessor in the form described in Section 16.2(a) (a “Termination Notice”) pursuant to the provisions of this Lease, then following the applicable Casualty, Condemnation or Environmental Violation, this Lease shall terminate upon the payment in full of the Termination Value for the Property in accordance with the terms of the Operative Agreements on the applicable Termination Date.

     16.2 Procedures.

     (a) A Termination Notice shall contain: (i) notice of termination of this Lease on a Payment Date not more than sixty (60) days after Lessor’s receipt of such Termination Notice (the “Termination Date”); and (ii) a binding and irrevocable agreement of Lessee to pay the Termination Value for the Property and purchase the Property on such Termination Date.

     (b) On the Termination Date, Lessee shall pay to Lessor the Termination Value for the Property, and Lessor shall convey the Property or the remaining portion thereof, if any, to Lessee (or Lessee’s designee), all in accordance with Section 20.2.

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ARTICLE XVII

     17.1 Lease Events of Default.

     If any one (1) or more of the following events (each a “Lease Event of Default”) shall occur and be continuing:

     (a) Lessee shall fail to make payment of any Basic Rent or Termination Value, on the date any such payment is due and payable, or any payment of Supplemental Rent due on the due date of any payment of Termination Value, or any amount due on the Expiration Date;

     (b) Lessee shall fail to make payment of any Supplemental Rent (other than Supplemental Rent referred to in Section 17.1(a)) under any Operative Agreement which has become due and payable, in either case, within ten (10) days after receipt of written notice that such payment is due and payable;

     (c) Lessee shall fail to maintain insurance required by Article XIV; provided, that in the event that Lessee is otherwise in full compliance with its obligations under Article XIV, Lessee’s failure to timely deliver the certificates of insurance required by Article XIV shall not constitute a Lease Event of Default unless such failure shall continue for a period of ten (10) days after notice of such failure to Lessee from Lessor or the Agent;

     (d) Lessee shall fail to observe or perform any term, covenant, obligation or condition of Lessee under this Lease or any other Operative Agreement to which Lessee is a party (other than those set forth in this Section 17), and such failure shall continue for thirty (30) days after the Lessee either has received written notice thereof or a Responsible Officer of Lessee shall have actual knowledge thereof; provided, if such failure is not capable of remedy by the payment of money or otherwise within such thirty (30) day period but may be remedied with further diligence and if the Lessee has and continues to pursue diligently such remedy, then the Lessee shall be granted additional time to pursue such remedy; provided, further, in no event shall such additional period exceed one hundred twenty (120) days or extend beyond the Expiration Date;

     (e) any representation, warranty or statement made or restated by Lessee in this Lease or in any other Operative Agreement, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto, shall prove to be untrue in any material respect on the date as of which made or restated, and (i) the circumstances rendering such representation or warranty or statement incorrect shall not be remediable, or (ii) if such representation or warranty or statement is remediable and Lessee is proceeding diligently so to remedy, shall continue unremedied for thirty (30) days after the earlier of: (x) the date on which written notice is delivered by Lessor or the Agent to Lessee specifying such circumstances and demanding that they be remedied and (y) the date on which any Responsible Officer of Lessee has actual knowledge of such

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incorrectness; provided, however, that if such default is capable of cure but cannot be cured by payment of money or cannot be cured by diligent efforts within such thirty (30) day but such diligent efforts shall be properly commenced within the cure period and Lessee is diligently pursuing, and shall continue to pursue diligently, remedy of such failure, the cure period shall be extended for an additional period of time as may be necessary to cure, not to exceed an additional one hundred and twenty (120) days and not to extended beyond the Expiration Date.

     (f) the commencement by Lessee or any of its Affiliates of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or Lessee or any of its Affiliates shall have consented to the entry of an order for relief in an involuntary case under any such law, or the failure of Lessee or any of its Affiliates generally to pay its debts as such debts become due (within the meaning of the Bankruptcy Code), or the appointment of or taking possession by a receiver, liquidator or other similar official for Lessee or any of its Affiliates or a general assignment by Lessee or any of its Affiliates for the benefit of its creditors; or the filing against Lessee or any of its Affiliates of an involuntary petition in bankruptcy which results in an order for relief being entered or, notwithstanding that an order for relief has not been entered, the petition is not dismissed within ninety (90) days of the date of the filing of the petition, or the filing under any law relating to bankruptcy, insolvency or relief of debtors of any petition against Lessee or any of its Affiliates for reorganization, composition, extension or arrangement with creditors which either (i) results in a finding or adjudication of insolvency of Lessee or any of its Affiliates or (ii) is not dismissed within ninety (90) days of the date of the filing of such petition.

     (g) [Reserved];

     (h) [Reserved];

     (i) any default, event of default or any event which with the passage of time or the giving of notice, or both, would permit the exercise of remedies under the Ground Lease or any of the Appurtenant Rights or any sublease thereof or the Ground Lease or any of the necessary Appurtenant Rights shall terminate;

     (j) Lessee shall default in the due performance and observance of any of its obligations under Sections 5.11, 8.3A(v), (w), (x), (y) or (aa) of the Participation Agreement;

     (k) one or more judgments or orders for the payment of money in the aggregate amount in excess of $10,000,000 shall be rendered against Lessee or its Affiliates and such judgment or order shall continue unsatisfied or unstayed for a period of sixty (60) days;

     (l) any Lien granted under any Security Document shall, in whole or in part, terminate, cease to be effective or lose its first priority status, except as expressly

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contemplated by the Operative Agreements or as the result of an act or omission of Lessor or the Agent;

     (m) an “event of default” shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness of Lessee or any of its Subsidiaries having a principal amount, individually or in the aggregate, in excess of $10,000,000, or an event of default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness;

     (n) an Agency Agreement Event of Default, a Liquid Collateral Agreement Event of Default or a Punch List Liquid Collateral Agreement Event of Default shall have occurred:

     (o) Lessor’s rights pursuant to the Operative Agreements to require Lessee to pledge additional Permitted Investments shall for any reason cease to be a legal, valid and binding agreement with Lessee;

     (p) the lien of the Security Document with respect to the Liquid Collateral shall cease to constitute a first priority perfected security interest (except as a result of a voluntary release by the Agent of any Liquid Collateral);

     (q) Lessee shall default in the due performance and observance of any of its obligations under Section 8.3A(v), (w), (x), (y) or (aa) of the Participation Agreement or under Section 5.11 of the Participation Agreement;

     (r) there occurs an Environmental Violation that is reasonably likely to cost or actually costs more than $500,000 to remediate; or

     (s) Lessee or any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $2,000,000, which it shall have become liable to pay to the PBGC or to a Pension Plan under Title IV of ERISA; or notice of intent to terminate a Pension Plan or Pension Plans having aggregate Unfunded Liabilities in excess of $2,000,000 shall be filed under Title IV of ERISA by Lessee or any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Pension Plan or Pension Plans or a proceeding shall be instituted by a fiduciary of any such Pension Plan or Pension Plans against Lessee or any member of the Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Pension Plan or Pension Plans must be terminated;

then, in any such event, Lessor may, in addition to the other rights and remedies provided for in this Article XVII and in Section 18.1, terminate this Lease by giving Lessee five (5) days written notice of such termination (provided, notwithstanding the foregoing, this Lease shall be deemed to be automatically terminated without the giving of notice upon the occurrence of a Lease Event

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of Default under Section 17.1(f)), and this Lease shall terminate, and all rights of Lessee under this Lease (other than Lessee’s rights to enforce Lessor’s obligation to convey title to the Property to Lessee in accordance with the provisions of Sections 17.6 and/or 17.11) shall cease. Lessee shall, to the fullest extent permitted by law, pay as Supplemental Rent all costs and expenses incurred by or on behalf of Lessor or any other Financing Party, including without limitation reasonable fees and expenses of counsel, as a result of any Lease Event of Default hereunder.

     A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE AS SUPPLEMENTED BY THE LEASE SUPPLEMENT. A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE PROPERTY AND SELL THE PROPERTY WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE AND CONTINUANCE OF A LEASE EVENT OF DEFAULT.

     17.2 Surrender of Possession.

     If a Lease Event of Default shall have occurred after the Commencement Date and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to Lessor possession of the Property. Lessor may enter upon and repossess the Property by such means as are available at law or in equity, and may remove Lessee and all other Persons and any and all personal property and Lessee’s equipment and personalty and severable Modifications from the Property. Lessor shall have no liability by reason of any such entry, repossession or removal performed in accordance with applicable law. Upon the written demand of Lessor, Lessee shall return the Property promptly to Lessor, in the manner and condition required by, and otherwise in accordance with the provisions of, Section 22.1(c) hereof.

     17.3 Reletting.

     If a Lease Event of Default shall have occurred after the Commencement Date and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessor may, but shall be under no obligation to, relet any or all of the Property, for the account of Lessee or otherwise, for such term or terms (which may be greater or less than the period which would otherwise have constituted the balance of the Term) and on such conditions (which may include concessions or free rent) and for such purposes as Lessor may determine, and Lessor may collect, receive and retain the rents resulting from such reletting. Lessor shall not be liable to Lessee for any failure to relet the Property or for any failure to collect any rent due upon such reletting.

     17.4 Damages.

     Neither (a) the termination of this Lease as to the Property pursuant to Section 17.1; (b) the repossession of the Property; nor (c) the failure of Lessor to relet the Property, the reletting of all or any portion thereof, nor the failure of Lessor to collect or receive any rentals due upon any such reletting, shall relieve Lessee of its liabilities and obligations hereunder, all of which shall survive any such termination, repossession or reletting. If any Lease Event of Default shall have

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occurred after the Commencement Date and be continuing and this Lease is terminated pursuant to Section 17.1, Lessee shall forthwith pay to Lessor all Rent and other sums due and payable hereunder to and including without limitation the date of such termination. In the event this Lease is not terminated pursuant hereto, on the days on which the Basic Rent or Supplemental Rent, as applicable, are payable under this Lease or would have been payable under this Lease and until the end of the Term hereof Lessee shall pay Lessor, as current liquidated damages (it being agreed that it would be impossible accurately to determine actual damages) an amount equal to the Basic Rent and Supplemental Rent that are payable under this Lease or would have been payable by Lessee hereunder if this Lease had not been terminated pursuant to Section 17.1, less the net proceeds, if any, which are actually received by Lessor with respect to the period in question of any reletting of the Property or any portion thereof; provided, that Lessee’s obligation to make payments of Basic Rent and Supplemental Rent under this Section 17.4 shall continue only so long as Lessor shall not have received the amounts specified in Section 17.6. In calculating the amount of such net proceeds from reletting, there shall be deducted all of Lessor’s, the Agent’s and any Primary Financing Party’s reasonable expenses in connection therewith, including without limitation repossession costs, brokerage or sales commissions, fees and expenses for counsel and any necessary repair costs and expenses incurred in preparation for such reletting. To the extent Lessor receives any damages pursuant to this Section 17.4, such amounts shall be regarded as amounts paid on account of Rent. Lessee specifically acknowledges and agrees that its obligations under this Section 17.4 shall be absolute and unconditional under any and all circumstances and shall be paid and/or performed, as the case may be, without notice or demand and without any abatement, reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever.

     17.5 Power of Sale.

     (a) Without limiting any other remedies set forth in this Lease, Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b) hereof and the Lease Supplement, a Lien against the Property WITH POWER OF SALE, and that, upon the occurrence and during the continuance of any Lease Event of Default, Lessor shall have the power and authority, to the extent provided by law, after prior notice and lapse of such time as may be required by law, to foreclose its interest (or cause such interest to be foreclosed) in all or any part of the Property.

     (b) Upon the occurrence and during the continuance of a Lease Event of Default, the Lessor, in lieu of or in addition to exercising any power of sale hereinabove given, may proceed by a suit or suits in equity or at law, whether for a foreclosure hereunder, or for the sale of such interest in the Property, against Lessee for the Termination Value or for the appointment of a receiver pending any foreclosure hereunder or the sale of such interest in the Property, or for the enforcement of any other appropriate legal or equitable remedy.

     17.6 Final Liquidated Damages.

     If a Lease Event of Default shall have occurred and be continuing, whether or not this Lease shall have been terminated pursuant to Section 17.1 and whether or not Lessor shall have

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collected any current liquidated damages pursuant to Section 17.4, Lessor shall have the right to recover, by demand to Lessee and at Lessor’s election, and Lessee shall pay to Lessor, as and for final liquidated damages, but exclusive of the indemnities payable under Section 11 of the Participation Agreement (which, if requested, shall be paid concurrently), and in lieu of all current liquidated damages beyond the date of such demand (it being agreed that it would be impossible accurately to determine actual damages) the Termination Value. Upon payment of the amount specified pursuant to the first sentence of this Section 17.6, Lessee shall be entitled to receive from Lessor, either at Lessee’s request or upon Lessor’s election, in either case at Lessee’s cost, Lessor’s entire right, title and interest in and to the Property and all components thereof, free and clear of the Lien of this Lease (including without limitation the release of any memoranda of Lease and/or the Lease Supplement recorded in connection therewith) and any Lessor Liens. The Property shall be conveyed to Lessee “AS-IS, WHERE-IS” and in its then present physical condition. If any statute or rule of law shall limit the amount of such final liquidated damages to less than the amount agreed upon, Lessor shall be entitled to the maximum amount allowable under such statute or rule of law; provided, however, Lessee shall not be entitled to receive an assignment of Lessor’s interest in the Property or any of the components thereof unless Lessee shall have paid in full the Termination Value. Lessee specifically acknowledges and agrees that its obligations under this Section 17.6 shall be absolute and unconditional under any and all circumstances and shall be paid and/or performed, as the case may be, without notice or demand and without any abatement, reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever.

     17.7 Environmental Costs.

     If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessee shall pay directly to any third party (or at Lessor’s election, reimburse Lessor) for the cost of any environmental testing and/or remediation work undertaken respecting the Property, as such testing or work is deemed appropriate in the reasonable judgment of Lessor, and shall indemnify and hold harmless Lessor and each other Indemnified Person therefrom. Lessee shall pay all amounts referenced in the immediately preceding sentence within five (5) Business Days of any request by Lessor for such payment. The provisions of this Section 17.7 shall not limit the obligations of Lessee under any Operative Agreement regarding indemnification obligations, environmental testing, remediation and/or work.

     17.8 Waiver of Certain Rights.

     If this Lease shall be terminated pursuant to Section 17.1, Lessee waives, to the fullest extent permitted by Law, (a) any notice of re-entry or the institution of legal proceedings to obtain re-entry or possession; (b) any right of redemption, re-entry or possession; (c) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt; and (d) any other rights which might otherwise limit or modify any of Lessor’s rights or remedies under this Article XVII.

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     17.9 Assignment of Rights Under Contracts.

          If a Lease Event of Default shall have occurred and be continuing, and whether or not this Lease shall have been terminated pursuant to Section 17.1, Lessee shall upon Lessor’s demand (and provided Lessee has not cured such Lease Event of Default pursuant to Section 17.11 or otherwise paid to Lessor an amount equal to the liquidated damages set forth in Section 17.6 within ten (10) days after written demand therefor) immediately assign, transfer and set over to Lessor all of Lessee’s right, title and interest in and to each agreement executed by Lessee in connection with the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property (including without limitation all right, title and interest of Lessee with respect to all warranty, performance, service and indemnity provisions), as and to the extent that the same relate to the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property or any of them.

     17.10 Remedies Cumulative.

     The remedies herein provided shall be cumulative and in addition to (and not in limitation of) any other remedies available at law, equity or otherwise, including without limitation any mortgage foreclosure remedies; provided, however, Lessor shall not exercise any rights or remedies, other than the right to terminate this Agreement, to collect current or full liquidated damages pursuant to Section 17.4 and 17.6 above and to transfer and convey the Property to Lessee in accordance with Section 17.6 above, and to seek to enforce the indemnifications under this Agreement and any other Operative Agreement, unless and until Lessee shall have failed to pay to Lessor the liquidated damages set forth in Section 17.6 within ten (10) days after the Agent has delivered to the Lessee a written demand therefor.

     17.11 Lessee’s Right to Cure by Purchase of the Property.

     Notwithstanding anything in this Lease or in any of the other Operative Agreements to the contrary, upon the occurrence and continuance of a Lease Default or Lease Event of Default, Lessee may, but shall not be obligated to, cure any such Lease Default or Lease Event of Default, as the case may be, by purchasing the Property, such purchase to be consummated as provided in Section 19.1 and Section 20.2.

     17.12 Limitation Regarding Certain Lease Events of Default.

Notwithstanding anything contained herein or in any other Operative Agreement to the contrary, upon the occurrence and during the continuance of a Lease Event of Default attributable solely to a Lease Event of Default under Sections 5.3(x), 5.4(k), 5.4(l), 6.2(h), 6.2(p), 6.2(bb), 6.2(hh), 8.3(i), 8.3(n), 8.3(A)(u)(iv) or 10.1(c) of the Participation Agreement (collectively, a “Limited Recourse Event of Default”), the maximum aggregate amount of Lessee’s obligations attributable solely to a Limited Recourse Event of Default (including without limitation any liability for amounts due pursuant to Section 11.1(e) of the Participation Agreement for enforcement costs or losses arising as a result of such Limited Recourse Event of Default) shall be an amount equal to the Maximum Residual Guarantee Amount for the Property; provided, this

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Section 17.12 shall not in any way limit the liability of Lessee in the event of any other Lease Event of Default (other than a Limited Recourse Event of Default) or any indemnity payment to any Indemnified Person (except as expressly stated above), including without limitation the indemnities set forth in Sections 11.1 through 11.7 of the Participation Agreement and such indemnity payment shall not be included in the calculation set forth above.

     Lessee nonetheless acknowledges and aggress that even though the maximum aggregate recovery from Lessee is limited as aforesaid, neither Lessor’s nor any other Financing Party’s right of recovery from the Property (as opposed to any recovery from Lessee) is so limited and Lessor or any other applicable Financing Party shall be entitled to recover one hundred percent (100%) of the amounts owed to Lessor or such other Financing Party in accordance with the Operative Agreements from its interest in the Property, including without limitation, to the extent not duplicative, one hundred percent (100%) of the aggregate Termination Value for the Property.

ARTICLE XVIII

     18.1 Lessor’s Right to Cure Lessee’s Lease Defaults.

     Lessor, without waiving or releasing any obligation or Lease Event of Default, may (but shall be under no obligation to) remedy any Lease Event of Default for the account and at the sole cost and expense of Lessee, including without limitation the failure by Lessee to maintain the insurance required by Article XIV, and may, to the fullest extent permitted by law, and notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon the Property, and take all such action thereon as may be necessary or appropriate therefor. No such entry shall be deemed an eviction of any lessee. All reasonable out-of-pocket costs and expenses so incurred (including without limitation fees and expenses of counsel), together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.

ARTICLE XIX

     19.1 Provisions Relating to Lessee’s Exercise of its Purchase Option.

     Subject to Section 19.2, in connection with any termination of this Lease, or in connection with Lessee’s exercise of its Purchase Option, upon the date on which this Lease is to terminate, and upon tender by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable, Lessor shall execute and deliver to Lessee (or to Lessee’s designee) at Lessee’s cost and expense a ground lease assignment or termination (as requested by Lessee) regarding the Property, in each case in recordable form and otherwise in conformity with local custom and free and clear of the Lien of this Lease, the Liens of the Security Documents and any other Operative Agreements and any Lessor Liens, but without any other warranties (of title or otherwise) from Lessor and such other documents or instruments as may be reasonably requested by Lessee to effect the conveyance or assignment contemplated by this Section 19.1. The Property shall be conveyed to Lessee “AS-IS, “WHERE-IS” and in then present physical condition.

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     19.2 No Purchase or Termination With Respect to Less than All of the Property.

     Except as expressly permitted pursuant to Section 21.1, Lessee shall not be entitled to exercise its Purchase Option or the Sale Option separately with respect to a portion of the Property but shall be required to exercise its Purchase Option or the Sale Option with respect to the entire Property.

ARTICLE XX

     20.1 Purchase Option or Sale Option-General Provisions.

     Unless the term of this Lease has been renewed in accordance with Section 2.2 then not less than one hundred eighty (180) days and no more than two hundred forty (240) days prior to the Expiration Date or, respecting the Purchase Option only, not less than sixty (60) days and no more than two hundred forty (240) days prior to any Payment Date (such Expiration Date or, respecting the Purchase Option only, any such Payment Date being hereinafter referred to as the “Election Date”), Lessee may give Agent (on behalf of Lessor) irrevocable written notice (the “Election Notice”) that Lessee is electing (a) to purchase the Property on the applicable Election Date (the “Purchase Option”) or (b) with respect to an Election Notice given in connection with the Expiration Date only, the option to re-market the Property to a Person other than Lessee or any Affiliate of Lessee and cause a sale of the Property to occur on the applicable Election Date pursuant to the terms of Section 22.1 (the “Sale Option”). If Lessee does not give an Election Notice indicating the Purchase Option or the Sale Option at least one hundred eighty (180) days and not more than two hundred forty (240) days prior to the Expiration Date, then Lessee shall be deemed to have elected for the Purchase Option to apply on the Expiration Date. If Lessee shall either (i) elect (or be deemed to have elected) to exercise the Purchase Option or (ii) elect the Sale Option and fail to cause the Property to be sold in accordance with the terms of Section 22.1 on the applicable Election Date, then in either case Lessee shall pay to Lessor on the date on which such purchase or sale is scheduled to occur an amount equal to the Termination Value for the Property (which the parties do not intend to be a “bargain” purchase price) and, upon receipt of such amounts and satisfaction of such obligations, Lessor shall transfer to Lessee (or to Lessee’s designee) all of Lessor’s right, title and interest in and to the Property in accordance with Section 20.2.

     If the Property is the subject of remediation efforts respecting Hazardous Substances at the applicable Election Date which could materially and adversely impact the Fair Market Sales Value of the Property (with materiality determined in Lessor’s reasonable discretion), then Lessee shall be obligated to purchase the Property pursuant to Section 20.2.

     20.2 Lessee Purchase Option.

     Provided, that the Election Notice has been appropriately given specifying the Purchase Option, Lessee shall purchase the Property on the applicable Election Date at a price equal to the

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Termination Value for the Property (which the parties do not intend to be a “bargain” purchase price).

     Subject to Section 19.2, in connection with any termination of this Lease, or in connection with Lessee’s exercise of its Purchase Option, upon the date on which this Lease is to terminate with respect to the Property and upon tender by Lessee of the amounts set forth in Section 16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge (where required) and deliver to Lessee, at Lessee’s cost and expense, each of the following: (a) an assignment of the Appurtenant Rights (to the extent assignable) and an assignment or termination of the Ground Lease (as requested by the Lessee) or (to the extent it is real property) to Lessee (or Lessee’s designee) free and clear of the Lien of this Lease, the Liens of the Credit Documents and any other Operative Agreements and any Lessor Liens; (b) a Bill of Sale conveying the Property (to the extent it is personal property) to Lessee (or Lessee’s designee) free and clear of the Lien of this Lease, the Liens of the Credit Documents and any other Operative Agreements and any Lessor Liens; (c) any real estate tax affidavit or other document required by law to be executed and filed in order to record the Deed; and (d) FIRPTA affidavits and such documents or instruments as may be reasonably requested by Lessee to effect the conveyance and release contemplated by this Section 20.2. All of the foregoing documentation must be in form and substance reasonably satisfactory to Agent and Lessee. The Property shall be conveyed to Lessee (or Lessee’s designee) “AS-IS, WHERE-IS” and in then present physical condition.

     On the applicable Election Date on which Lessee has elected to exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor or the Agent, as appropriate, the sum of all reasonable costs and expenses incurred by any such party in connection with the election by Lessee to exercise its Purchase Option and all Rent then due and payable or accrued under this Lease and/or any other Operative Agreement.

     20.3 Third Party Sale Option.

     (a) Provided, that (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Election Notice has been appropriately given specifying the Sale Option, Lessee shall undertake to cause a sale of the Property on the applicable Election Date (all as specified in the Election Notice), in accordance with the provisions of Section 22.1 hereof. Such Election Date on which a sale is required may be hereafter referred to as the “Sale Date”.

     (b) In the event Lessee exercises the Sale Option then, as soon as practicable and in all events not less than sixty (60) days and not more than one hundred eighty (180) days prior to the Sale Date, Lessee at its expense shall cause to be delivered to Lessor a Phase I environmental site assessment for the Property recently prepared (no more than thirty (30) days old prior to the date of delivery) by an independent recognized professional reasonably acceptable to Lessor and in form, scope and content reasonably satisfactory to Lessor. In the event that Lessor shall not have received such environmental site assessment by the date sixty (60) days prior to the Sale Date or in the event that such environmental assessment shall reveal the existence of any material

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violation of Environmental Laws, other material Environmental Violation or potential material Environmental Violation (with materiality determined in each case by Lessor in its reasonable discretion), then Lessee on the Sale Date shall pay to Lessor an amount equal to the Termination Value for the Property. Upon receipt of such payment, Lessor shall transfer to Lessee all of Lessor’s right, title and interest in and to the Property in accordance with Section 19.1.

ARTICLE XXI

[RESERVED]

ARTICLE XXII

     22.1 Sale Procedure.

     (a) During the Marketing Period, Lessee, on behalf of Lessor, shall obtain bids for the cash purchase of the Property in connection with a sale to one (1) or more third party purchasers to be consummated on the Sale Date, shall notify Lessor promptly of the name and address of each prospective purchaser and the cash price which each prospective purchaser shall have offered to pay for the Property and shall provide Lessor with such additional information about the bids and the bid solicitation procedure as Lessor may reasonably request from time to time. All such prospective purchasers must be Persons other than Lessee or any Affiliate of Lessee. On the Sale Date, Lessee shall pay (or cause to be paid) to Lessor or the Agent, as appropriate, the sum of all reasonable costs and expenses incurred by Lessor and/or the Agent (as the case may be) in connection with such sale of the Property, all Rent then due and payable or accrued under this Lease and/or any other Operative Agreement.

     Lessor may reject any and all bids and may solicit and obtain bids by giving Lessee written notice to that effect; provided, however, that notwithstanding the foregoing, Lessor may not reject any bid submitted by Lessee if such bid is greater than or equal to the Limited Recourse Amount for the Property, and represents a bona fide offer from one (1) or more third party purchasers. If the highest price which a prospective purchaser or the prospective purchasers shall have offered to pay for the Property on the Sale Date is less than the Limited Recourse Amount for the Property or if such bid does not represent a bona fide offer from one (1) or more third parties or if there are no bids, Lessee may withdraw its exercise of the Sale Option and exercise Lessee’s Purchase Option by purchasing the Property on such Sale Date in accordance with Section 20.2, failing which Lessor may elect to retain the Property, subject to Section 22.6, by giving Lessee prior written notice of Lessor’s election to retain the same, and promptly upon receipt of such notice, Lessee shall surrender, or cause to be surrendered, the Property in accordance with the terms and conditions of Section 10.1. Upon acceptance of any bid, Lessor agrees, at Lessee’s request and expense, to execute a

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contract of sale with respect to such sale, so long as the same is consistent with the terms of this Article 22 and provides by its terms that it is nonrecourse to Lessor.

     Unless Lessor shall have elected to retain the Property pursuant to the provisions of the preceding paragraph, Lessee shall arrange for Lessor to sell the Property free and clear of the Lien of this Lease, the Liens of the Security Documents and any other Operative Agreements and any Lessor Liens, without recourse or warranty (of title or otherwise), for cash on the Sale Date to the purchaser or purchasers offering the highest cash sales price, as identified by Lessee or Lessor, as the case may be; provided, however, solely as to Lessor, any Lessor Lien shall not constitute a Lessor Lien so long as Lessor is diligently and in good faith contesting, at the cost and expense of Lessor such Lessor Lien by appropriate proceedings in which event (with the consent of the Lessee, but without penalty or cost to Lessee) the Sale Date shall be delayed for the period of such contest. To effect such transfer and assignment, Lessor shall execute, acknowledge (where required) and deliver to the appropriate purchaser each of the following: (a) an assignment of the Appurtenant Rights (to the extent assignable) and an assignment or termination of the Ground Lease (as requested by Lessee) (to the extent it is real property) to the appropriate purchaser free and clear of the Lien of this Lease, the Liens of the Credit Documents and the other Operative Agreements and any Lessor Liens; (b) a Bill of Sale conveying the Property (to the extent it is personal property) titled to Lessor to the appropriate purchaser free and clear of the Lien of this Lease, the Liens of the Credit Documents and the other Operative Agreements and any Lessor Liens; (c) any real estate tax affidavit or other document required by law to be executed and filed in order to record the assignment of the Appurtenant Rights or the assignment or termination of the Ground Lease; and (d) FIRPTA affidavits and such other documents or instruments required for the issuance of an owner’s policy of title insurance subject only to the Liens encumbering the Property on the Commencement Date and those consented to by Lessee, or otherwise to effect the conveyance and release contemplated herein, as appropriate. All of the foregoing documentation must be in form and substance reasonably satisfactory to Lessor and the Agent. Lessee shall surrender the Property so sold or subject to such documents to each purchaser in the condition specified in Section 10.1, or in such other condition as may be agreed between Lessee and such purchaser. Neither Lessor nor Lessee shall take or fail to take any action which would have the effect of unreasonably discouraging bona fide third party bids for the Property. If the Property is neither (i) sold on the Sale Date in accordance with the terms of this Section 22.1, nor (ii) retained by Lessor pursuant to an affirmative election made by Lessor pursuant to the second sentence of the second paragraph of this Section 22.1(a), then (x) Lessee shall be deemed to have elected the Purchase Option and shall be obligated to pay Lessor on the Sale Date an amount equal to the aggregate Termination Value for the Property less any sales proceeds received, and (y) Lessor shall transfer the Property to Lessee in accordance with Section 20.2.

     (b) If the Property is sold on the Sale Date to a third party purchaser in accordance with the terms of Section 22.1(a) and the purchase price paid for the Property is less than the Termination Value (hereinafter such difference shall be referred to as the “Deficiency Balance”), then Lessee hereby unconditionally promises to pay to Lessor on

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the Sale Date the lesser of (i) the Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount for the Property. On a Sale Date if Lessor receives the Termination Value for the Property, then Lessee may retain the excess of the net sale proceeds of the Property over the Termination Value. If the Property is retained by Lessor pursuant to an affirmative election made by Lessor pursuant to the provisions of Section 22.1(a) or if Section 22.6 applies, then Lessee hereby unconditionally promises to pay to Lessor on the Sale Date an amount equal to the Maximum Residual Guarantee Amount for the Property. Any payment of the foregoing amounts described in this Section 22.1(b) shall be made together with a payment of all amounts referenced in the last sentence of the first paragraph of Section 22.1(a).

     (c) In the event that the Property is either sold to one (1) or more third party purchasers on the Sale Date or retained by Lessor in connection with an affirmative election made by Lessor pursuant to the provisions of Section 22.1(a), then in either case on the Sale Date Lessee shall provide Lessor or such third party purchaser (unless otherwise agreed by such third party purchaser) with (i) all permits, certificates of occupancy, governmental licenses and authorizations necessary to use, operate, repair, access and maintain the Property for the purpose it is being used by Lessee, and (ii) such manuals, permits, easements, licenses, intellectual property, know-how, rights-of-way and other rights and privileges in the nature of an easement as are reasonably necessary or desirable in connection with the use, operation, repair, access to or maintenance of the Property for its intended purpose or otherwise as Lessor or such third party purchaser(s) shall reasonably request (and a royalty-free license or similar agreement to effectuate the foregoing on terms reasonably agreeable to Lessor or such third party purchaser(s), as applicable). All assignments, licenses, easements, agreements and other deliveries required by clauses (i) and (ii) of this paragraph (c) shall be in form reasonably satisfactory to Lessor or such third party purchaser(s), as applicable, and shall be fully assignable (including without limitation both primary assignments and assignments given in the nature of security) without payment of any fee, cost or other charge.

     22.2 Application of Proceeds of Sale.

     Lessor shall apply the proceeds of sale of the Property to a third party pursuant to the Sale Option in accordance with the intercreditor provisions among Lessor, the Primary Financing Parties and the Agent contained in the Operative Agreements, including without limitation Section 8.7 of the Participation Agreement.

     22.3 Indemnity for Excessive Wear.

     If the proceeds of the sale described in Section 22.1 with respect to the Property shall be less than the Limited Recourse Amount with respect to the Property, and at the time of such sale it shall have been reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market Sales Value of the Property shall have been impaired by greater than expected wear and tear during the term of the Lease, Lessee shall pay to Lessor within ten (10) days after receipt of Lessor’s written statement (i) the amount of such excess wear and tear determined by the Appraisal Procedure or (ii) the amount of the Sale Proceeds Shortfall, whichever amount is less.

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     22.4 Appraisal Procedure.

     For determining the Fair Market Sales Value of the Property or any other amount which may, pursuant to any provision of any Operative Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use the following procedure (the “Appraisal Procedure”). Lessor and Lessee shall endeavor to reach a mutual agreement as to such amount for a period of ten (10) days from commencement of the Appraisal Procedure under the applicable Section of the Lease, and if they cannot agree within ten (10) days, then two (2) qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor, shall mutually agree thereupon, but if either party shall fail to choose an appraiser within twenty (20) days after notice from the other party of the selection of its appraiser, then the appraisal by such appointed appraiser shall be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within twenty (20) days after both shall have been appointed, then a third appraiser shall be selected by the two (2) appraisers or, failing agreement as to such third appraiser within thirty (30) days after both shall have been appointed, by the American Arbitration Association. The decisions of the three (3) appraisers shall be given within twenty (20) days of the appointment of the third appraiser and the decision of the appraiser most different from the average of the other two (2) shall be discarded and such average shall be binding on Lessor and Lessee; provided, that if the highest appraisal and the lowest appraisal are equidistant from the third appraisal, the third appraisal shall be binding on Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee shall be paid by Lessee; the fees and expenses of the appraiser appointed by Lessor shall be paid by Lessor and the Investors, ratably, based on their relative percentages of the aggregate Commitments (such fees and expenses not being indemnified pursuant to Section 11 of the Participation Agreement); and the fees and expenses of the third appraiser shall be divided equally between (x) Lessee and (y) Lessor and the Investors, ratably, based on their relative percentage of the aggregate Commitments.

     22.5 Certain Obligations Continue.

     During the Marketing Period, the obligation of Lessee to pay Rent with respect to the Property (including without limitation the installment of Basic Rent due on the Sale Date) shall continue undiminished until payment in full to Lessor of the Maximum Residual Guarantee Amount or the Deficiency Balance (as applicable), the sale proceeds, if any, for the Property in accordance with this Lease, the amount due under Section 22.3, if any, and all other amounts due to Lessor or any other Person with respect to the Property or any Operative Agreement. Lessor shall have the right, but shall be under no duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or otherwise to take action in connection with any such sale, other than as expressly provided in this Article XXII.

     22.6 Post-Expiration Sales.

     If Lessee shall have exercised the Sale Option and prior to the Expiration Date, Lessee shall have either (i) failed to submit a bid for the purchase of the Property, or (ii) if any of the bids submitted by Lessee to Lessor for the purchase of the Property has not been accepted by Lessor pursuant to Section 22.1, and provided no Lease Event of Default has occurred and is

35

continuing (including as a result of Lessee’s failure to comply with any of the requirements at Articles XX and XXII), then all bids submitted by Lessee to Lessor for the purchase of the Property shall be deemed rejected, and the Lessee shall deliver possession of the Property to Lessor on the Expiration Date and in the condition required by Section 22.1, and Lessee shall pay to Lessor on the Expiration Date a Supplemental Rent payment equal to the Maximum Residual Guarantee Amount plus all accrued Basic Rent and any Supplemental Rent due and payable. Thereafter (except for obligations of indemnity including without limitation under Section 11 of the Participation Agreement and for other obligations of Lessee under the Operative Agreements which are expressed to survive), Lessee shall have no further obligation to pay Rent or the remaining unpaid Property Cost with respect to the Property, and, except with respect to the Property, Lessor shall request the Agent to release the Liens of the Security Documents regarding the Liquid Collateral. Nothing in this Section 22.6 shall adversely affect any other rights of Lessor to terminate this Lease or to pursue any remedy hereunder as a result of a Lease Event of Default arising as a result of Lessee’s failure to comply with the requirements set forth herein. Following the delivery of the Property to Lessor pursuant to this Section 22.6, Lessor shall be free to sell or lease the Property to any party for such amounts, as Lessor determines in its sole discretion in order to maximize Lessor’s opportunity to recover the portion of the Post-Expiration Balance for the Property. Proceeds from any such sale of the Property shall be applied as provided in Section 8.7(b)(vii) of the Participation Agreement. If Lessor fails to sell the Property prior to the two year anniversary of the Expiration Date, Lessor shall obtain an appraisal from an independent appraiser selected by Lessor which shall establish the Fair Market Sales Value of the Property (as “dark”) as of the end of such two year period and Lessor shall pay to Lessee the lesser of (x) the Maximum Residual Guarantee Amount paid by Lessee with respect to the Property and (y) the difference, if any, between the Fair Market Sales Value of the Property and the Post-Expiration Date Balance (as of the two year anniversary of the Expiration Date). Lessor shall be entitled to reimbursement of such amount paid to Lessee from the proceeds of any sale of the Property applied in accordance with Section 8.7(b)(vii) of the Participation Agreement. To the greatest extent permitted by law, Lessee hereby unconditionally and irrevocably waives and releases Lessor from any right to require Lessor following the Expiration Date to sell the Property for any minimum purchase price or on any particular terms or conditions.

ARTICLE XXIII

     23.1 Holding Over.

     If Lessee shall for any reason remain in possession of the Property after the expiration or earlier termination of this Lease (unless the Property is conveyed to Lessee), such possession shall be as a tenancy at sufferance during which time Lessee shall continue to pay Supplemental Rent that would be payable by Lessee hereunder were the Lease then in full force and effect with respect to the Property and Lessee shall continue to pay Basic Rent at the lesser of the highest lawful rate and one hundred ten percent (110%) of the last payment of Basic Rent due with respect to the Property prior to such expiration or earlier termination of this Lease. Such Basic Rent shall be payable from time to time upon demand by Lessor and such additional amount of Basic Rent shall be applied by Lessor ratably to the Primary Financing Parties based on their

36

relative amounts of the then outstanding Property Cost. During any period of tenancy at sufferance, Lessee shall, subject to the second preceding sentence, be obligated to perform and observe all of the terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by law to tenants at sufferance, to continue their occupancy and use of the Property. Nothing contained in this Article XXIII shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease (unless the Property is conveyed to Lessee) and nothing contained herein shall be read or construed as preventing Lessor from maintaining a suit for possession of the Property or exercising any other remedy available to Lessor at law or in equity.

ARTICLE XXIV

     24.1 Risk of Loss.

     During the Term, unless Lessee shall not be in actual possession of the Property solely by reason of Lessor’s exercise of its remedies of dispossession under Article XVII, the risk of loss or decrease in the enjoyment and beneficial use of the Property as a result of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is assumed by Lessee and Lessor shall in no event be answerable or accountable therefor.

ARTICLE XXV

     25.1 Assignment.

     (a) Lessee may not assign this Lease or any of its rights or obligations hereunder or with respect to the Property in whole or in part to any Person without the prior written consent of each of the Agent, the Credit Lenders, the Mortgage Lenders and the Lessor.

     (b) No assignment by Lessee (referenced in this Section 25.1 or otherwise) or other relinquishment of possession to the Property shall in any way discharge or diminish any of the obligations of Lessee to Lessor hereunder and Lessee shall remain directly and primarily liable under the Operative Agreements as to any rights or obligations assigned by Lessee.

     25.2 Subleases.

     (a) Promptly, but in any event within five (5) Business Days, following the execution and delivery of any sublease permitted by this Article XXV, Lessee shall notify Lessor and the Agent of the execution of such sublease and shall provide a copy of such sublease to Lessor and the Agent. As of the Commencement Date, any then existing tenant respecting the Property shall automatically be deemed to be a subtenant of Lessee and not a tenant of Lessor.

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     (b) Without the prior written consent of the Agent or any Primary Financing Party and subject to the other provisions of this Section 25.2, Lessee may sublet the Property or any portion thereof to any wholly-owned Subsidiary of Lessee. Subleases to wholly-owned Subsidiaries of Lessee are not required to be on market terms or at market rents. Lessee may sublet up to twenty percent (20%) of the Property to Persons other than wholly-owned Subsidiaries of Lessee. Such subleases to Persons other than wholly-owned Subsidiaries of Lessee may be at less than market rents but, in any event, shall otherwise be on market terms. No sublease shall in any way diminish the fair market value or useful life of the Property. Except as otherwise provided in this Section 25.2(b), no other subleasing with respect to the Property or any portion thereof shall be permitted without the written consent of the Lessor and the Agent, which consent shall not be unreasonably delayed, denied or conditioned.

     (c) No sublease (referenced in this Section 25.2 or otherwise) or other relinquishment of possession to the Property shall in any way discharge or diminish any of Lessee’s obligations to Lessor hereunder and Lessee shall remain directly and primarily liable under this Lease as to the Property, or portion thereof, so sublet. The term of any such sublease shall not extend beyond the Term. Each sublease shall be expressly subject and subordinate to this Lease.

ARTICLE XXVI

     26.1 No Waiver.

     No failure by Lessor or Lessee to insist upon the strict performance of any term hereof or to exercise any right, power or remedy upon a default hereunder, and no acceptance of full or partial payment of Rent during the continuance of any such default, shall constitute a waiver of any such default or of any such term. To the fullest extent permitted by law, no waiver of any default shall affect or alter this Lease, and this Lease shall continue in full force and effect with respect to any other then existing or subsequent default.

ARTICLE XXVII

     27.1 Acceptance of Surrender.

     No surrender to Lessor of this Lease or of all or any portion of the Property or of any part of any thereof or of any interest therein shall be valid or effective unless agreed to and accepted in writing by Lessor and no act by Lessor or the Agent or any representative or agent of Lessor or the Agent, other than a written acceptance, shall constitute an acceptance of any such surrender.

     27.2 No Merger of Title.

     There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same Person may acquire, own or hold, directly or indirectly, in whole or in

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part, (a) this Lease or the leasehold estate created hereby or any interest in this Lease or such leasehold estate, (b) any right, title or interest in the Property, (c) any Notes, or (d) a beneficial interest in Lessor.

ARTICLE XXVIII

[RESERVED]

ARTICLE XXIX

     29.1 Notices.

     All notices required or permitted to be given under this Lease shall be in writing and delivered as provided in Section 12.2 of the Participation Agreement.

ARTICLE XXX

     30.1 Miscellaneous.

     Anything contained in this Lease to the contrary notwithstanding, all claims against and liabilities of Lessee or Lessor arising from events commencing prior to the expiration or earlier termination of this Lease shall survive such expiration or earlier termination. If any provision of this Lease shall be held to be unenforceable in any jurisdiction, such unenforceability shall not affect the enforceability of any other provision of this Lease or of such provision or of any other provision hereof in any other jurisdiction.

     30.2 Amendments and Modifications.

     Neither this Lease nor the Lease Supplement may be amended, waived, discharged or terminated except in accordance with the provisions of Section 12.4 of the Participation Agreement.

     30.3 Successors and Assigns.

     All the terms and provisions of this Lease shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

     30.4 Headings and Table of Contents.

     The headings and table of contents in this Lease are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

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     30.5 Counterparts.

     This Lease may be executed in any number of counterparts, each of which shall be an original, but all of which shall together constitute one (1) and the same instrument.

     30.6 GOVERNING LAW.

     THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO APPLY.

     30.7 Calculation of Rent.

     All calculation of Rent payable hereunder shall be computed based on the actual number of days elapsed over a year of three hundred sixty (360) days.

     30.8 Memoranda of Lease and Lease Supplement.

     This Lease shall not be recorded; provided, Lessor and Lessee shall promptly record a memorandum of this Lease and the Lease Supplement (in substantially the form of EXHIBIT A attached hereto) or a short form lease (in form and substance reasonably satisfactory to Lessor) regarding the Property in the local filing office with respect thereto, in all cases at Lessee’s cost and expense, and as required under applicable law to sufficiently evidence this Lease and any such Lease Supplement in the applicable real estate filing records.

     30.9 Allocations between the Lenders and Lessor.

     Notwithstanding any other term or provision of this Lease to the contrary, the allocations of the proceeds of the Property and any and all other Rent and other amounts received hereunder shall be subject to the inter-creditor provisions among the Primary Financing Parties contained in the Operative Agreements (or as otherwise agreed among the Primary Financing Parties from time to time).

     30.10 Limitations on Recourse.

     Notwithstanding anything contained in this Lease to the contrary, except with respect to a breach of Lessor’s covenant set forth in Section 30.15 and Lessor’s obligations to discharge Lessor Liens, Lessee agrees to look solely to Lessor’s estate and interest in the Property, property insurance proceeds payable to Lessor pursuant to this Lease and/or Casualty or Condemnation proceeds payable to the Lessor pursuant to this Lease (and in no circumstance to the Agent or any of the Primary Financing Parties) for the collection of any judgment requiring the payment of money by Lessor in the event of liability by Lessor, and no other property or assets of Lessor or any shareholder, owner or partner (direct or indirect) in or of Lessor, or any director, officer, employee, beneficiary, Affiliate of any of the foregoing shall be subject to levy,

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execution or other enforcement procedure for the satisfaction of the remedies of Lessee under or with respect to this Lease, the relationship of Lessor and Lessee hereunder or Lessee’s use of the Property or any other liability of Lessor to Lessee. Nothing in this Section shall be interpreted so as to limit the terms of Sections 6.1 or 6.2 or the provisions of Section 12.9 of the Participation Agreement.

     30.11 WAIVERS OF JURY TRIAL.

     EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.

     30.12 Exercise of Lessor Rights.

     Lessee hereby acknowledges and agrees that the rights and powers of Lessor under this Lease have been assigned to the Agent pursuant to the terms of the Security Agreement and the other Operative Agreements. Lessor and Lessee hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(e) and 8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall be given to the Agent and (c) all notices to be given by Lessor may be given by the Agent, at its election.

     30.13 SUBMISSION TO JURISDICTION; VENUE.

     THE PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

     30.14 USURY SAVINGS PROVISION.

     IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS “INTEREST.” ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT

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PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.

     30.15 Restriction On Collateralization.

     Except to the extent required or permitted by the Operative Agreements, Lessor shall not mortgage, pledge, hypothecate or encumber its interest in this Lease or the Property.

     30.16 Amendment and Restatement.

     The parties hereto hereby agree to amend and restate the Original Lease (in regards to the Property) pursuant to the terms of this Lease.

[signature pages follow]

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     IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and delivered as of the date first above written.

WACHOVIA DEVELOPMENT CORPORATION, as Lessor
By:	/s/ Evander S. Jones, Jr.
Name:	Evander S. Jones, Jr.
Title:	Vice President

HUMAN GENOME SCIENCES, INC., as Lessee
By:	/s/ Steven C. Mayer
Name:	Steven C. Mayer
Title:	Senior Vice President and
	Chief Financial Officer

Amended and Restated Lease Agreement
Human Genome Sciences, Inc.

Receipt of this original counterpart of the foregoing Lease is hereby acknowledged as the date hereof

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent

By:

Name:

Title:

Amended and Restated Lease Agreement
Human Genome Sciences, Inc.

EX-10.4 6 w88716exv10w4.htm AMENDED AND RESTATED AGENCY AGREEMENT

Exhibit 10.4

AMENDED AND RESTATED AGENCY AGREEMENT

Dated as of June 30, 2003

between

HUMAN GENOME SCIENCES, INC.,
as the Construction Agent,

and

WACHOVIA DEVELOPMENT CORPORATION,
as the Lessor

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS; RULES OF USAGE			2
	1.1   Definitions		2
	1.2   Interpretation		2
ARTICLE II APPOINTMENT OF THE CONSTRUCTION AGENT			2
	2.1   Appointment		2
	2.2   Acceptance and Undertaking		3
	2.3   Term		3
	2.4   Scope of Authority		3
	2.5   Delegation of Duties		6
	2.6   Covenants of the Construction Agent		6
ARTICLE III THE PROPERTY			10
	3.1   Construction		10
	3.2   Amendments; Modifications		10
	3.3   Insufficient Lender Commitments and Lessor Commitments		11
	3.4   Grant of Security Interest		11
	3.5   Insurance		12
	3.6   Casualty, Condemnation and Environmental Violation		18
	3.7   Abandonment or Permanent Discontinuance		21
	3.8   Additions to the Property and Related Requirements		22
	3.9   Warranty of Title		23
	3.10  Permitted Contests Other Than in Respect of Indemnities		23
	3.11  Impositions and Other Matters		24
ARTICLE IV PAYMENT OF FUNDS			24
	4.1   Right to Receive Construction Cost		24
	4.2    Limitations During Construction Period		25
ARTICLE V AGENCY AGREEMENT EVENTS OF DEFAULT			25
	5.1   Agency Agreement Events of Default		25
	5.2   Damages		29
	5.3   Remedies; Remedies Cumulative		29
	5.4   Limitation on Recourse		31
	5.5   Determination of Whether Budget is “In Balance”		32
ARTICLE VI THE LESSOR’S RIGHTS			33
	6.1   [Reserved]		33
	6.2   The Lessor’s Right to Cure the Construction Agent’s Defaults		33
ARTICLE VII MISCELLANEOUS			33
	7.1   Notices		33
	7.2   Successors and Assigns		33
	7.3   GOVERNING LAW		33
	7.4   SUBMISSION TO JURISDICTION; VENUE; WAIVERS; ARBITRATION		33
	7.5   Amendments and Waivers		34

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	Page
7.6   Counterparts		34
7.7   Severability		34
7.8   Headings and Table of Contents		34
7.9   WAIVER OF JURY TRIAL		34
7.10  Assignment		34
7.11  No Waiver		35
7.12  Acceptance of Surrender		35
7.13  No Merger of Title		35
7.14  Survival		35
7.15  Limited Liability		35
7.16  Statement of Intent Regarding Accounting Compliance		35
7.17  Amendment Restatement		36

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AMENDED AND RESTATED AGENCY AGREEMENT

     THIS AMENDED AND RESTATED AGENCY AGREEMENT, dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, the “Agreement”), is between WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation (the “Lessor”) and HUMAN GENOME SCIENCES, INC., a Delaware corporation (the “Construction Agent”).

W I T N E S S E T H:

     A.     WHEREAS, the Construction Agent, Traville LLC, the Trust, Wells Fargo Bank Northwest, National Association, BancBoston Leasing Investments Inc., Wachovia Bank, National Association (as successor in interest to First Union National Bank), EagleFunding Capital Corporation, Fleet Securities, Inc., and Fleet National Bank were parties to that certain Participation Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from time to time, the “Original Participation Agreement”);

     B.     WHEREAS, pursuant to the Master Transfer Agreement, among other things, the Lessor has obtained the right, title and interest of the Trust in the Property and under the Original Participation Agreement and the associated transaction documents with regard to the Property (including without limitation a ground leasehold interest in real estate comprising a part of the Property pursuant to the Ground Lease and titled ownership in the Equipment and Improvements comprising a part of the Property);

     C.     WHEREAS, such assignment as referenced recital B included an assignment of the Trust’s interest as the Lessor under the Construction Agency Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated, the “Original Agency Agreement”) between the Trust and the Construction Agent;

     D.     WHEREAS, subject to the terms and conditions of the Operative Agreements, the Lessor will fund the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property by the Construction Agent; and

     E.     WHEREAS, the Lessor and the Construction Agent wish to amend and restate the Original Agency Agreement, as it relates to the Property, pursuant to the terms of this Agreement.

     NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS; RULES OF USAGE

     1.1 Definitions.

     For purposes of this Agreement, capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in Appendix A to that certain Amended and Restated Participation Agreement dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time in accordance with the applicable provisions thereof, the “Participation Agreement”) among the Construction Agent, the Lessor, the Conduit (as defined therein), the various banks and other financial institutions which are parties thereto from time to time as additional Lenders (as defined therein), Wachovia Securities, LLC, as Deal Agent (as defined therein), Wachovia Bank, National Association, as agent for the Primary Financing Parties (as defined therein) and, respecting the Security Documents (as defined therein), as the agent for the Secured Parties (as defined therein).

     1.2 Interpretation.

     The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Agreement. Unless otherwise indicated, references in this Agreement to articles, sections, paragraphs, clauses, appendices, schedules and exhibits are to the same contained in this Agreement.

ARTICLE II
APPOINTMENT OF THE CONSTRUCTION AGENT

     2.1 Appointment.

     Subject to the terms and conditions hereof, the Lessor hereby irrevocably designates and appoints, except as expressly provided herein or in the other Operative Agreements, the Construction Agent as its exclusive agent and the Construction Agent accepts such appointment, in connection with the identification and acquisition of the Property (provided, the interest of the Lessor in certain of the real estate comprising a part of the Property shall be a ground leasehold interest pursuant to the Ground Lease) and the development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property on the Land in accordance with the Construction Documents, and pursuant to the terms of the Operative Agreements. Notwithstanding any provisions hereof or in any other Operative Agreement to the contrary, but subject to the conditions precedent and other terms and conditions in the Operative Agreements applicable to Advances and Commitments, the Construction Agent acknowledges and agrees that the Lessor shall advance to the Construction Agent no more than the aggregate Commitments which shall be reduced by previous Advances and requested Advances, which are pending, and in accordance with the terms and conditions of the Operative Agreements.

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     For all purposes of the Operative Agreements, the Construction Agent agrees that (unless the Construction Agent has been replaced in accordance with the terms and conditions hereof) the Construction Agent shall be in absolute possession and control of the Property, in absolute control of all activities in connection therewith and as between the Lessor and the Construction Agent, the Construction Agent shall be solely responsible for any and all acts and/or omissions relating to the Property or activities in connection therewith, any component of the Property, any event, circumstance or occurrence at, near or otherwise with respect to the Property or any activity in connection therewith and any and all Claims resulting from any of the foregoing, including without limitation those arising under tort, contract, strict liability, negligence, gross negligence, willful misconduct or any other theory of law or equity.

     2.2 Acceptance and Undertaking.

     The Construction Agent hereby unconditionally accepts the agency appointment, acknowledges that the Lessor, concurrent with the effectiveness of this Agreement, has acquired a ground leasehold interest in certain of the real estate comprising a part of the Property pursuant to the Ground Lease and various Appurtenant Rights (which Property, Ground Lease and Appurtenant Rights are acceptable in all respect to the Construction Agent) and undertakes, for the benefit of the Lessor, to develop, acquire, install, construct and test the Improvements, the Equipment and the other components of the Property in accordance with the Construction Documents and the Operative Agreements including obtaining all necessary entitlements and permits (including all environmental and occupancy permits, maintaining books and records relating to the Property and other functions typically undertaken in developing the Property).

     2.3 Term.

     This Agreement and the agency created by this Agreement shall commence on the date hereof and except with respect to any (i) Construction Period Required Amounts, (ii) Defaults or Events of Default which have occurred and are continuing including any remedies related thereto or (iii) other matters as otherwise expressly stated herein or unless terminated earlier pursuant to the terms and conditions herein, shall terminate on the Construction Period Termination Date.

     2.4 Scope of Authority.

     (a) Subject to the terms, conditions, restrictions and limitations set forth in the Operative Agreements, the Lessor hereby expressly authorizes the Construction Agent, or any Construction Agency Person acting on behalf of the Construction Agent, and the Construction Agent unconditionally agrees for the benefit of the Lessor, subject to Section 2.4(b), to take all action necessary or desirable for the performance and satisfaction of any and all of the Lessor’s obligations under any construction agreement and to fulfill all of the obligations of the Construction Agent including without limitation:

     (i) the identification and assistance with the acquisition in the name of the Lessor of the Property in accordance with the terms and conditions of the Participation Agreement;

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     (ii) all design and supervisory functions relating to the development, acquisition, installation, construction and testing of the related Improvements, Equipment and other components of the Property and performing all engineering work related thereto;

     (iii) (A) negotiating, entering into, performing and enforcing all contracts and arrangements to acquire or ground lease the Property and to procure the equipment necessary to construct the Property and (B) negotiating, executing, performing and enforcing all contracts and arrangements to develop, acquire, install, construct, repair, renovate, replace and test the Improvements, the Equipment and the other components of the Property on such terms and conditions as are customary and reasonable in light of local and national standards and practices and the businesses in which the Construction Agent is engaged;

     (iv) obtaining all necessary permits, licenses, consents, approvals, entitlements and other authorizations, including without limitation all of the foregoing required for the Property and the use and occupancy thereof and those required under applicable Law (including without limitation Environmental Laws), from all Governmental Authorities in connection with the development, acquisition, installation, construction and testing of the Improvements, the Equipment and the other components of the Property in accordance with the Construction Documents;

     (v) maintaining all books and records with respect to the Property and the construction, operation and management thereof;

     (vi) performing any other acts necessary in connection with the identification and acquisition or ground leasing of the Property and the development, acquisition, installation, construction, repair, renovation, replacement and testing of the related Improvements, Equipment and all other additional components of the Property in accordance with the Construction Documents;

     (vii) performing or causing the performance of any other acts necessary or desirable (as reasonably determined by the Construction Agent) in connection with the construction and development of the Improvements in accordance with all applicable Laws and all Insurance Requirements unless the failure to comply is not reasonably likely to give rise to a Material Adverse Effect; provided, however, that the foregoing shall not limit the Construction Agent’s right to engage in permitted contests in accordance with Section 3.10;

     (viii) paying when due or causing to be paid when due (subject to reimbursement as provided for under this Agreement and subject to the terms and conditions, if any in the case of such reimbursement, relating to Construction Advances as set forth in the Participation Agreement) pursuant to and subject to the Construction Budget, and the Operative Agreements, all Property Costs

4

(including costs associated with the Construction Agent’s actions as provided in Section 2.4(a)(x), pursuant to and subject to the Construction Budget, provided, however, that the foregoing shall not limit the Construction Agent’s right to engage in permitted contests in accordance with Section 3.10; provided, further, that the Construction Agent shall pay directly any Property Costs either (x) during the continuance of an Agency Agreement Event of Default or (y) while it is unable to satisfy all of the conditions for a Construction Advance set forth in Section 5.4 of the Participation Agreement (it being understood, however, that the Construction Agent may be reimbursed for Property Costs paid by it prior to the occurrence of the events described in clauses (x) and (y) to the extent permitted under Section 5.17 of the Participation Agreement). The Construction Agent acknowledges that any liability resulting to any Primary Financing Party or any other Indemnified Person as a result of or arising from any such negotiation, permitted contest, or act or omission of the Construction Agent or its designees with respect to such permitted contest will be a Claim subject to indemnification under Section 11 of the Participation Agreement;

     (ix) enforcing or causing the enforcement in all material respects of performance by each party to each Construction Document of its respective obligations, warranties and other design, construction and other obligations with respect to the design, engineering, construction and completion of the Improvements on the Land or pursuing remedies with respect to the breach of those obligations, in each case, as deemed appropriate by the Construction Agent in its discretion; and

     (x) using the proceeds of any insurance maintained with respect to the Improvements to complete construction of or rebuild any portion of such Improvements with respect to a Casualty or Condemnation and to fund all Interest accrued on the Loans and Lessor Yield accrued on the Lessor Advances during the Construction Period or rebuild, provided that the foregoing shall not affect the Construction Agent’s right to purchase the Property in accordance with Article XX of the Lease which shall be applicable during the Construction Period and is hereby incorporated herein by reference, mutatis mutandis.

     (b) Neither the Construction Agent nor any Construction Agency Person shall enter into any contract or consent to any contract in the name of the Lessor without the Lessor’s prior written consent, such consent to be given or withheld in the exercise of the Lessor’s reasonable discretion (acting at the direction of the Agent); provided, however, that (i) no such contract will increase the obligations of the Lessor beyond the obligations of the Lessor as are expressly set forth in the Operative Agreements and (ii) each such contract shall be expressly non-recourse to the Lessor on terms and conditions that are reasonably acceptable to the Lessor, (iii) each such contract shall expressly acknowledge that the Lessor shall not have any liability, as principal for the acts of the Construction Agent under such contracts or for the acts of any other Construction Agency Person, (iv) each such contract shall contain an express waiver of the other party’s rights to assert any Lien or Claim against the Lessor arising out of any such purported agency relationship,

5

and (v) each such contract shall otherwise be on terms and conditions that are reasonably acceptable to the Lessor. It is deemed to be reasonable for the Lessor to withhold its consent to any contract which fails to comply, in the Lessor’s judgement, with any of clauses (i) through (v) of this subparagraph (b).

     (c) Subject to the terms and conditions of this Agreement and the other Operative Agreements, the Construction Agent shall have sole management and control over the installation, construction and testing means, methods, sequences and procedures with respect to the Property.

     (d) As between the Lessor and the Construction Agent, the Construction Agent shall be responsible for all acts or omissions of each Construction Agency Person. The Lessor and the Construction Agent agree that the Construction Agent shall at all times be deemed to be in possession and control of the Property at all times until such possession and control is relinquished pursuant to the terms of the Operative Agreements.

     2.5 Delegation of Duties.

     The Construction Agent may execute any of its duties under this Agreement by or through any Construction Agency Person; provided, however, that no such delegation shall limit or reduce in any way the Construction Agent’s duties, obligations or liabilities under this Agreement or any other Operative Agreement.

     2.6 Covenants of the Construction Agent.

     The Construction Agent hereby covenants and agrees that it will:

     (a) cause the design, procurement, development, acquisition, installation, construction, repair, renovation, replacement and testing of the Property to be prosecuted in a good and workmanlike manner (subject to Force Majeure Events), and respecting the Property in accordance with the Construction Documents, the Legal Requirements (including without limitation Environmental Laws), the Insurance Requirements, the applicable contracts relating to the Improvements, the Equipment, other components of the Property and procurement of construction materials, the manufacturer’s specifications and standards, prevalent industry practices and otherwise in accordance with Section 3.1 unless the failure to comply with the foregoing is not reasonably likely to give rise to a Material Adverse Effect; provided, however, the foregoing shall not limit the Construction Agent’s right to engage in permitted contests in accordance with Section 3.10;

     (b) [Reserved];

     (c) notify the Agent in writing not more than ten (10) Business Days after the Construction Agent or any Affiliate of the Construction Agent obtains Actual Knowledge of, or its receipt of oral or written notification of, the occurrence of any Force Majeure Event or an event under any Construction Document if such event is, in the reasonable

6

judgment of the Construction Agent or such Affiliate of the Construction Agent, reasonably likely to prevent Completion of the Property prior to the Construction Period Termination Date or result in a Force Majeure Event;

     (d) cause the Completion Date for the Property to occur by the Construction Period Termination Date free and clear (by removal or bonding) of Liens or claims for materials supplied or labor or services performed in connection with the development, acquisition, installation, construction or testing thereof other than Permitted Liens;

     (e) at all times during the Construction Period (i) cause the Lessor to retain at all times during the term of this Agreement an enforceable ground leasehold interest in the Property pursuant to the Ground Lease, an enforceable interest in the Appurtenant Rights and ownership of the portions of the Property not subject to the Ground Lease or the Appurtenant Rights, (ii) cause a valid, perfected, first priority Lien on the Property and the Collateral to be in place in favor of the Agent (for the benefit of the Secured Parties and securing the obligations owed to such party pursuant to the Operative Agreements), (iii) file all necessary documents under the applicable real property law and Article 9 of the Uniform Commercial Code to perfect such title and Liens and (iv) not permit Liens (other than Permitted Liens or Lessor Liens) to be filed or maintained respecting the Property or the Collateral;

     (f) on or prior to the Closing Date, deliver to the Agent (for the benefit of the Lessor) true, complete and correct copies of the Construction Budget and the Construction Schedule therefor, together with evidence of builders’ risk insurance. Thereafter, the Construction Agent, on a monthly basis, shall deliver to the Lessor true, correct and complete copies of any material modifications of the Construction Budget or the Construction Schedule and progress reports regarding the development, acquisition, installation, construction and testing of the Property, in a format acceptable to the Lessor;

     (g) to the fullest extent commercially available, procure insurance for the Property during the Construction Period in accordance with the provisions of Section 3.5 and, as the Lessor shall otherwise reasonably request from time to time, for such risks, which the Lessor determines are not otherwise sufficiently covered by the Construction Agent;

     (h) include in the Construction Budget and maintain Available Commitments in amounts equal to or greater than the cost for Completion plus all deductible amounts, if any, regarding insurance policies related to the Property in place from time to time pursuant to the Operative Agreements and also for the amount of all insurable losses regarding the Property that are not insured;

     (i) on or before the Construction Period Termination Date, cause the Commencement Date to occur with respect to the Property or purchase the Property for the Termination Value and otherwise in compliance with the other terms and provisions of the Operative Agreements; provided, notwithstanding the foregoing, upon the occurrence of any Force Majeure Event, Casualty or Condemnation, the Construction

7

Agent may provide the Lessor with written notice detailing such Force Majeure Event, Casualty or Condemnation and the reasonable manner in which the Construction Agent shall address the same in order to achieve Completion of the Property in accordance with the Operative Agreements and requesting an extension of the Construction Period Termination Date for up to sixty (60) days to the extent reasonably necessary to address such Force Majeure Event, Casualty or Condemnation; provided, further, upon receipt of such a notice, the Lessor shall acknowledge in writing the extension of the Construction Period Termination Date as requested;

     (j) following Completion for the Property, cause all outstanding punch list items and Final Completion Work to be completed in a timely manner, but in no event later than the Expiration Date;

     (k) procure, maintain and comply with all licenses, permits, orders, approvals, consents and other authorizations required for the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property;

     (l) from and after the occurrence of any Agency Agreement Default or Agency Agreement Event of Default, the Construction Agent shall not cause or permit itself to become obligated for any other payment obligation pursuant to any Construction Document, Construction Material or any other payment obligation with respect to the Property; provided, to the extent the Construction Agent does obligate itself for any such additional payment obligation from and after the occurrence of any Agency Agreement Default or Agency Agreement Event of Default, the Construction Agent acknowledges it shall have no right of reimbursement from any Financing Party with respect to such additional payment obligation;

     (m) regarding the Agreement dated as of November 7, 2001, as amended, modified, extended, supplemented and/or restated from time to time, between Human Genome Sciences, Inc., as the owner thereunder (as construction agent under the Original Agency Agreement) and Gilbane Building Company, as the designer/builder thereunder, the Construction Agent shall ensure that such contract is for a guaranteed maximum price, which price is not in excess of the amount contemplated therefor in the Construction Budget;

     (n) neither demand or accept any fees or other compensation for the performance of its services under this Agreement or any other Operative Agreement;

     (o) after the Construction Agent gains Actual Knowledge or a reasonable expectation that the costs for the Property shall exceed the original Construction Budget (or exceed any Construction Budget modified in accordance with the Operative Agreements) for the Property, that construction is not occurring in accordance with the Construction Schedule or that Completion for the Property shall not occur on or prior to the Construction Period Termination Date, the Construction Agent shall promptly (and in

8

any event within ten (10) Business Days of gaining such Actual Knowledge or expectation) notify the Lessor and the Agent in writing of the same;

     (p) pay or cause to be paid upon demand all Construction Period Required Amounts;

     (q) promptly notify the Lessor and the Agent in the event it receives Actual Knowledge that a Lien other than a Permitted Lien has occurred with respect to the Property or any amounts payable pursuant to this Agreement or any other Operative Agreement, and the Construction Agent represents and warrants to, and covenants with, the Lessor that the Liens in favor of the Lessor and/or the Agent created by the Operative Agreements are (and shall remain until all amounts owing to the Financing Parties under the Operative Agreements have been paid in full) first priority perfected Liens subject only to Permitted Liens and Lessor Liens. At all times prior to the Commencement Date respecting the Property, the Construction Agent shall (i) cause a valid, perfected, first priority Lien subject only to Permitted Liens and Lessor Liens on the Property to be in place in favor of the Agent (for the benefit of the Secured Parties) and (ii) file, or cause to be filed, all necessary documents under applicable real property law and Article 9 of the Uniform Commercial Code to perfect such title and Liens;

     (r) not exceed the scope of its authority or violate the terms and conditions of this Agreement;

     (s) take all commercially reasonable measures necessary to prevent the occurrence of any and all acts, omissions or circumstances giving rise to Claims against any Financing Party respecting the Property or in connection with such Financing Party’s role in the Operative Agreements;

     (t) take all commercially reasonable and lawful measures necessary to defend against any Condemnation by any Governmental Authority regarding the Property prior to the Completion of the Property;

     (u) take or cause to be taken commercially reasonable and practical steps to minimize liabilities of the Lessor or the Agent or any Primary Financing Party, delays, increased costs and the disruption of the construction process arising from Force Majeure Events, Casualties and Condemnations;

     (v) the Construction Agent shall not incur nor allow the incurrence of any Property Costs, individually or in the aggregate (i) in excess of the sum of the aggregate Available Commitments as of the date of determination thereof or (ii) that would or could reasonably be expected to cause the Construction Budget not to be In Balance; and

     (w) the Construction Agent shall make (or cause to be made) all payments required to be made by Lessor and perform (or cause to be performed) all obligations of Lessor (whether such payment or other obligations are now existing or hereinafter arising) pursuant to the Ground Lease or with respect to any of the Appurtenant Rights.

9

ARTICLE III
THE PROPERTY

     3.1 Construction.

  The Construction Agent shall cause the Improvements, the Equipment and all other components of the Property to be developed, acquired, installed, constructed and tested in compliance with all Legal Requirements, all Insurance Requirements, all manufacturer’s specifications and standards and the standards maintained by the Construction Agent for similar properties owned or operated by the Construction Agent, and all specifications and standards applicable to properties of the Construction Agent which are similar to the Permitted Facilities.

     3.2 Amendments; Modifications.

     (a) The Construction Agent may at any time revise, amend or modify (i) the Plans and Specifications without the consent of the Lessor; provided, that any such amendment to the Plans and Specifications does not (A) result in the Completion Date of the Improvements occurring on or after the Construction Period Termination Date, or (B) result in the cost of all Improvements exceeding the Budgeted Total Property Cost, as amended from time to time, or (C) result in the cost yet to be funded or reimbursed of all Improvements exceeding an amount equal to the then Available Commitments, and (ii) the Construction Budget and enter into any related amendments, modifications or supplements without the consent of the Lessor; provided, that such revisions, amendments or modifications to the Plans and Specifications or related amendments, modifications or supplements to the Construction Budget do not result in (A) any increase in the Budgeted Total Property Cost, for any single Property or in the aggregate, greater than the amount specified in the Construction Budget, as amended from time to time, or the then Available Commitments (reduced by the Unfunded Amount), or (B) any breach or default under any relevant construction contract. Notwithstanding the foregoing, it is specifically understood and agreed that if at any time the total Property Costs remaining to be expended or reimbursed exceed the then Available Commitments (reduced by the Unfunded Amount), an Agency Agreement Event of Default shall be deemed to have occurred and the Construction Agent shall have the right to purchase set forth in Section 5.3(c), in which case the limitations on recourse set forth in Section 5.4 shall not apply.

     (b) The Construction Agent agrees that it will not implement any revision, amendment or modification to the Construction Documents for the Property if the effect of such revision, amendment or modification, when taken together with any previous or contemporaneous revision, amendment or modification to the Construction Documents for the Property, would have an adverse effect on the utility, useful life or the residual value of the Property or would cause a material reduction in the fair market value of the Property in excess of the cost reduction (if any) of such revision, amendment or

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modification of the Property when completed, unless such revision, amendment or modification is required by Legal Requirements.

     (c) Upon the occurrence of any Construction Failure or Extra Budget Cost, the Lessor may (i) modify the Construction Documents for the Property in the sole discretion of the Lessor, (ii) inform the Construction Agent that such Construction Agent no longer has the right to modify any Construction Documents without the prior written consent of the Lessor, (iii) reorient or change the location of any of the Improvements, (iv) change the scope of the Property, (v) inform the Construction Agent to stop in part or in whole Work and all other activities as Construction Agent or (vi) replace the Construction Agent with another construction agent to finalize Completion of the Property. The costs and expenses incurred to finalize the Completion of the Property as referenced in the preceding sentence shall be paid, at the election of the Lessor, (x) by the Construction Agent on demand; provided, payment by the Construction Agent of such costs and expenses shall be part of (and limited by) the Maximum Amount for the Property or (y) by Advances to the extent the Lenders and the Lessor agree to fund the same.

     3.3 Insufficient Lender Commitments and Lessor Commitments.

     In the event the aggregate Available Commitments are insufficient or are determined by the Lessor, in its reasonable judgment, to be insufficient for Completion of the Property, then the Lessor may, in its sole discretion, elect to:

     (a) fund cost overruns (including in all cases all Excluded Costs) with Commitments, provided such Commitments have been increased in accordance with the Operative Agreements at then available financing rates to sufficiently fund such cost overruns and the Budgeted Total Property Cost with respect to the Property;

     (b) replace the Construction Agent with a new construction agent selected by the Lessor; or

     (c) cease funding any or all amounts pursuant to the Operative Agreements.

     3.4 Grant of Security Interest.

     The Construction Agent hereby conveys, grants, assigns, transfers, hypothecates, mortgages and sets over to the Lessor, for the benefit of the Secured Parties, a first priority security interest in and lien on all right, title and interest of the Construction Agent (now owned or hereafter acquired) in and to the Property, each of the Construction Documents, Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and the proceeds of each of the foregoing to the extent such is personal property, whether tangible or intangible, and irrevocably grants and conveys a lien, deed of trust and mortgage on all right, title and interest of the Construction Agent (now owned or hereafter acquired) in and to the Property to the extent such is real property. The Lessor and the Construction Agent further intend and agree that, for the purpose of securing the obligations of the Construction Agent

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and/or the Lessee now existing or hereafter arising under the Operative Agreements, (i) this Agreement shall be a security agreement and financing statement within the meaning of Article 9 of the Uniform Commercial Code respecting the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and all other proceeds thereof) to the extent such is personal property and an irrevocable grant and conveyance of a lien, deed of trust and mortgage on the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and all other proceeds thereof) to the extent such is real property; (ii) the Lessor’s acquisition of a leasehold interest pursuant to the Ground Lease in the portion of the Property subject thereto and the Lessor’s acquisition of its interest in the Appurtenant Rights constitutes a grant by the Construction Agent to the Lessor of a security interest, lien, deed of trust and mortgage in all of the Construction Agent’s right, title and interest in and to the Property and all proceeds (including without limitation Casualty and Condemnation proceeds, proceeds from any insurance required by the Insurance Requirements and all other proceeds thereof) of the conversion, voluntary or involuntary, of the foregoing into cash, investments, securities or other property, whether in the form of cash, investments, securities or other property, and an assignment of all rents, profits and income produced by the Property; and (iii) notifications to Persons holding such property, and acknowledgments, receipts or confirmations from financial intermediaries, bankers or agents (as applicable) of the Construction Agent shall be deemed to have been given for the purpose of perfecting such lien, security interest, mortgage lien and deed of trust under applicable law. The Construction Agent shall promptly take such actions as necessary (including without limitation the filing of Primary Financing Party Financing Statements and the various other filings reasonably requested by the Lessor) to ensure that the lien, security interest, mortgage lien and deed of trust in the Property and the other items referenced above will be deemed to be a perfected lien, security interest, mortgage lien and deed of trust of first priority (subject only to Permitted Liens and Lessor Liens) under applicable law and will be maintained as such throughout the term of this Agreement.

     3.5 Insurance.

     (a) Insurance By the Construction Agent: The Construction Agent shall maintain or cause others to maintain regarding the Property in full force and effect at all times during the Construction Period, insurance policies with (i) responsible insurance companies authorized to do business in Maryland (if so required by law or regulation) with (A) an A.M. Best’s Key Rating Guide rating of A+ or better and an financial size category of XI or higher, unless otherwise approved by the Lessor and the Agent and (B) and an S&P or Moody’s financial strength rating of A or A2, respectively, or higher, unless otherwise approved by the Lessor and the Agent, or (ii) other companies acceptable to the Lessor and the Agent, in all cases with regard to subsection (i) or (ii) above with limits and coverage provisions sufficient to satisfy the requirements set forth below. In addition, the Construction Agent shall from time to time, but at intervals of not less than twelve (12) months each, undertake all actions and due diligence as reasonably necessary to determine whether the insurance coverage maintained by the Construction Agent pursuant to this Agreement is in compliance with all of the requirements of this Agreement, including any increases in coverage required as a result of any change in any

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applicable Laws, and if the Construction Agent determines that such insurance coverage does not meet such requirements, it agrees to promptly cause such coverage to comply with such requirements and to notify the Lessor and the Agent of the steps being taken by the Construction Agent to do so.

     (1) General Liability Insurance: Liability insurance on an occurrence basis against claims filed anywhere in the world and occurring in the United States for the Construction Agent’s, each contractor’s and each subcontractor’s of any tier liability arising out of claims for bodily injury, personal injury and property damage. Such insurance shall provide coverage for products-completed operations (which coverage shall remain in effect for a period of at least five (5) years following the Construction Period Termination Date), blanket contractual, broad form property damage, personal injury insurance and independent contractors with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage provided that policy aggregates, if any, shall apply separately to claims occurring with respect to the Improvements. A maximum deductible or self-insured retention of $250,000 per occurrence shall be allowed. All loss payments due under the deductible shall be pre-funded by the Construction Agent through additional premium payments.

     (2) Automobile Liability Insurance: Automobile liability insurance for the Construction Agent’s liability arising out of claims for bodily injury and property damage covering all owned (if any), leased (if any), non-owned and hired vehicles used in the performance of the Construction Agent’s obligations under this Agreement with a $1,000,000 minimum limit per accident for combined bodily injury and property damage and containing appropriate no-fault insurance provisions wherever applicable. A maximum deductible or self-insured retention of $1,000 per occurrence shall be allowed.

     (3) Workers Compensation: Workers Compensation insurance, which shall include Stop Gap, Longshore and Harbor Workers Compensation, Outer Continental Shelf Lands Act, Maritime Coverage and Voluntary Coverage, with a minimum limit of the statutory limits for Part A and a $100,000/$500,000/$1,000,000 minimum limit for employer liability.

     (4) Umbrella or Excess Liability Insurance: Umbrella or excess liability insurance on an occurrence basis covering claims in excess of the underlying insurance described in the foregoing subsections (1) and (3), with a $100,000,000 minimum limit per occurrence, such insurance shall contain a provision that it will not be more restrictive than the primary insurance, provided that aggregate limits of liability, if any, shall apply separately to claims occurring with respect to the Improvements.

     The amounts of insurance required in the foregoing subsections (1), (3) and this subsection (4) may be satisfied by the Construction Agent purchasing coverage in the amounts specified or by any combination of primary and excess

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insurance, so long as the total amount of insurance meets the requirements specified above.

     (5) [Reserved.]

     (6) Builder’s Risk Insurance: During the Construction Period with respect to the Property, property damage insurance on an “all risk” basis insuring the Construction Agent and the Lessor, as their interests may appear, including coverage for the perils of earth movement (including but not limited to earthquake, landslide, subsidence and volcanic eruption), wind, flood, terrorist acts, if commercially available for similar operations in the mid-Atlantic region of the United States, at commercially reasonable cost, a boiler and machinery accidents.

     (A) Property Covered: The builder’s risk insurance shall provide coverage for (i) the buildings, all fixtures, materials, supplies, machinery and Equipment of every kind to be used in, or incidental to, the Construction if the acquisition of any such item was funded with one or more Advances (ii) new underground works, sidewalks, paving, site works and excavation works and landscaping, (iii) the Improvements, (iv) property of others in the care, custody or control of the Construction Agent or of a contractor to the extent the Construction Agent is under obligation to insure for physical loss or damage, (v) all preliminary works and temporary works, (vi) foundations and other property below the surface of the ground, and (vii) electronic equipment and media.

     (B) Additional Coverages: The builder’s risk policy shall insure (i) the cost of preventive measures to reduce or prevent a loss, (ii) inland transit with sub-limits sufficient to insure the largest single shipment to or from the Land from anywhere within the United States or Canada, (iii) attorney’s fees, engineering and other consulting costs, and permit fees directly incurred in order to repair or replace damaged insured property, (iv) expediting expenses, (v) off-site storage with sub-limits sufficient to insure the full replacement value of any property or equipment not stored on the Land, (vi) the removal of debris, and (vii) demolition and increased costs of construction due to the operation of building laws or ordinances in an amount not less than $10,000,000.

     (C) Special Clauses: The builder’s risk policy shall include (i) a 72 hour flood/storm/earthquake clause, (ii) an unintentional errors and omissions clause, (iii) a requirement that the insurer pay losses within 30 days after receipt of an acceptable proof or loss or partial proof of loss, (iv) an other insurance clause making this insurance primary over any other insurance (except any such builder’s risk policy placed and maintained by the Lessor or an Affiliate of the Lessor which covers the Property) and (v) a clause stating that the policy shall not be subject to

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cancellation by the insurer except for non-payment of premium, fraud or material misrepresentation.

     (D) Prohibited Exclusions: The builder’s risk policy shall not contain any (i) coinsurance provisions, or (ii) exclusion for loss or damage resulting from freezing or mechanical breakdown.

     (E) Sum Insured: The builder’s risk policy shall (i) be on a completed value form, with no periodic reporting requirements, (ii) insure 100% of the replacement value of the Improvements, and (iii) value losses at replacement cost, without deduction for physical depreciation or obsolescence including custom duties, taxes and fees (if rebuilt or repaired).

     (F) Deductible: The builder’s risk insurance shall have no deductible greater than $50,000 per occurrence for all coverage. All loss payments due under the deductible shall be pre-funded by the Construction Agent through additional premium payments.

     (7) Bonding: With respect to the Property, performance bond or comparable insurance program to manage the financial risks of failure to perform of each Construction Agency Person. The amount of the performance bond or comparable insurance shall have a policy limit no less than $30,000,000 per occurrence and $90,000,000 in the aggregate.

     (8) Deductibles: Such insurance shall (A) have a deductible of not greater than 30 days aggregate for all occurrences. during the Construction Period, (B) have an indemnity period not less than 12 months, (C) include an interim payments (or partial payment) clause allowing for the monthly payment of a claim pending final determination of the full claim amount, (D) cover loss sustained when access to the Land is prevented due to an insured peril at premises in the vicinity of the Land, (E) cover loss sustained due to the action of a public authority preventing access to the Land due to imminent or actual loss or destruction arising from an insured peril at premises in the vicinity of the Land, (F) insure loss caused by damage to finished equipment or machinery while awaiting shipment at a supplier’s premises, (G) insure loss caused by damage or mechanical breakdown to construction plant and equipment at the Land not already insured by Section (6) above, (H) not contain any form of a coinsurance provision or include a waiver of such provision and (I) cover loss sustained due to the accidental interruption or failure of supplies of electricity, gas, sewers, water or telecommunication up to the terminal point of the utility supplier with the Land.

     (9) Endorsements: All policies of liability insurance required to be maintained by the Construction Agent shall be endorsed as follows:

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     (A) To name the Lessor and each Financing Party as additional insureds;

     (B) To provide a severability of interests and cross liability clause;

     (C) That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by the Lessor.

     (10) Waiver of Subrogation: The Construction Agent hereby waives any and every claim for recovery from the Lessor for any and all loss or damage covered by any of the insurance policies to be maintained under this Agreement to the extent that such loss or damage is recovered under any such policy. Inasmuch as the foregoing waiver will preclude the assignment of any such claim to the extent of such recovery, by subrogation (or otherwise), to an insurance company (or other person), the Construction Agent shall give written notice of the terms of such waiver to each insurance company which has issued, or which may issue in the future, any such policy of insurance (if such notice is required by the insurance policy) and shall cause each such insurance policy to be properly endorsed by the issuer thereof to, or to otherwise contain one or more provisions that, prevent the invalidation of the insurance coverage provided thereby by reason of such waiver.

     (b) Conditions:

     (1) Loss Notification: The Construction Agent shall promptly notify the Agent of any single loss or event likely to give rise to a claim against an insurer for an amount in excess of $1,000,000 covered by any insurance maintained pursuant to this Agreement.

     (2) Payment of Loss Proceeds: All policies of insurance required to be maintained pursuant to Sections 3.5(a)(6), (7) and (8), shall provide that the proceeds of such policies shall be payable solely to the Lessor and the Agent.

     (3) Loss Adjustment and Settlement: A loss under any insurance required to be carried under Sections 3.5(a)(6), (7) and (8), shall be adjusted with the insurance companies, including the filing in a timely manner of appropriate proceedings, by the Construction Agent, subject to the approval of the Lessor and the Agent if such loss is in excess of $1,000,000. In addition the Construction Agent may in its reasonable judgment consent to the settlement of any loss, provided that in the event that the amount of the loss exceeds $1,000,000 the terms of such settlement is concurred with by the Lessor and the Agent.

     (4) Policy Cancellation and Change: All policies of insurance required to be maintained pursuant to Section 3.5(a) shall be endorsed so that if at any time

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should they be canceled, or coverage be reduced (by any party including the insured) which affects the interests of any Financing Party, such cancellation or reduction shall not be effective as to any Financing Party for 60 days, except for non-payment of premium which shall be for 10 days, after receipt by the Lessor and the Agent of written notice from such insurer of such cancellation or reduction.

     (5) Miscellaneous Policy Provisions: All policies of insurance required to be maintained pursuant to Sections 3.5(a)(6), (7) and (8), shall (i) not include any annual or term aggregate limits of liability except as regards the insurance applicable to the perils of flood and earth movement and pollutant clean up of land and water at the Land (project site), (ii) shall include the Lessor and the Agent as additional insured and as sole loss payee, as their interest may appear, and (iii) include a clause requiring the insurer to make final payment on any claim within 30 days after the submission of proof of loss and its acceptance by the insurer.

     (6) Separation of Interests: All policies (other than in respect to liability or workers compensation insurance) shall insure the interests of the Lessor and the Agent regardless of any breach or violation by the Construction Agent or any other party of warranties, declarations or conditions contained in such policies, any action or inaction of the Construction Agent or others.

     (7) Acceptable Policy Terms and Conditions: All policies of insurance required to be maintained pursuant to this Agreement shall contain terms and conditions acceptable to the Lessor.

     (8) Waiver of Subrogation: All policies of insurance to be maintained by the provisions of this Agreement shall provide for waivers of subrogation in favor of the Lessor and the Agent.

     (c) Evidence of Insurance: On the Closing Date and at least 10 days prior to each policy anniversary, the Construction Agent shall furnish the Lessor and the Agent with (1) certificates of insurance or binders, in a form acceptable to the Lessor and the Agent, evidencing all of the insurance required by the provisions of this Agreement and (2) a schedule of the insurance policies held by or for the benefit of the Construction Agent and required to be in force by the provisions of this Agreement. Such certificates of insurance/binders shall be executed by each insurer or by an authorized representative of each insurer where it is not practical for such insurer to execute the certificate itself. Such certificates of insurance/binders shall identify underwriters, the type of insurance, the insurance limits and the policy term and shall specifically list the special provisions enumerated for such insurance required by this Agreement. Upon request, the Construction Agent will promptly furnish the Lessor and the Agent with copies of all insurance policies, binders and cover notes or other evidence of such insurance relating to the insurance required to be maintained by the Construction Agent. The schedule of

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insurance shall include the name of the insurance company, policy number, type of insurance, major limits of liability and expiration date of the insurance policies.

     (d) Reports: Concurrently with the furnishing of the certification referred to in Section 3.5(c), the Construction Agent shall furnish the Lessor and the Agent with a report of an independent broker, signed by an officer of the broker, stating that in the opinion of such broker, the insurance then carried or to be renewed is in accordance with the terms of this Agreement and attaching an updated copy of the schedule of insurance required by Section 3.5(c) above. In addition the Construction Agent will advise the Lessor and the Agent in writing promptly of any default in the payment of any premium and of any other act or omission on the part of the Construction Agent which may invalidate or render unenforceable, in whole or in part, any insurance being maintained by the Construction Agent pursuant to this Agreement.

     (e) No Duty of Agent to Verify or Review: No provision of this Agreement shall impose on any Financing Party any duty or obligation to verify the existence or adequacy of the insurance coverage maintained by the Construction Agent, nor shall any Financing Party be responsible for any representations or warranties made by or on behalf of the Construction Agent to any insurance company or underwriter. Any failure on the part of any Financing Party to pursue or obtain the evidence of insurance required by this Agreement from the Construction Agent and/or failure of any Financing Party to point out any non-compliance of such evidence of insurance shall not constitute a waiver of any of the insurance requirements in this Agreement.

     3.6 Casualty, Condemnation and Environmental Violation.

     (a) Subject to the provisions of this Section 3.6 and prior to the occurrence and continuation of an Agency Agreement Default or an Agency Agreement Event of Default, the Construction Agent shall, prior to the Commencement Date for the Property, be entitled to receive (and the Lessor hereby irrevocably assigns to the Construction Agent all of the right, title and interest of the Lessor in) any condemnation proceeds, award, compensation or insurance proceeds under Sections 3.5(b) or 3.5(c) to which the Construction Agent or the Lessor may become entitled by reason of their respective interests in the Property, (i) if all or a portion of the Property is damaged or destroyed in whole or in part by a Casualty or (ii) if the use, access, occupancy, easement rights or title to the Property or any part thereof is the subject of a Condemnation; provided, however, if an Agency Agreement Default or Agency Agreement Event of Default shall have occurred and be continuing or if such award, compensation or insurance proceeds shall exceed $1,000,000, then such award, compensation or insurance proceeds (including without limitation any Excess Proceeds) shall be paid directly to the Lessor or, if received by the Construction Agent, shall be held in trust for the Lessor, and shall be paid over by the Construction Agent to the Lessor and held in accordance with the terms of this Section 3.6. All amounts held by the Lessor hereunder on account of any award, compensation or insurance proceeds either paid directly to the Lessor or turned over to the Lessor shall be held as security for the performance of the Construction Agent’s obligations hereunder and under the other Operative Agreements and (X) to the extent no

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Agency Agreement Default or Agency Agreement Event of Default shall have occurred and be continuing at such time, the Lessor shall pay such amounts so held by the Lessor to the Construction Agent to reimburse the Construction Agent for the costs it incurs to restore and repair the Property pursuant to Section 3.6(c); (provided, prior to such reimbursement, the Construction Agent must give the Lessor reasonable evidence of such restoration and repair work) with any excess amounts held by the Lessor hereunder after completion of such restoration or repair to be paid to the Construction Agent or (Y) to the extent an Agency Agreement Default or an Agency Agreement Event of Default shall have occurred and be continuing at such time, all amounts so held by the Construction Agent shall be paid over to the Lessor until all such obligations of the Construction Agent with respect to such matters (and all other obligations of the Construction Agent which should have been satisfied pursuant to the Operative Agreements as of such date have been satisfied and no Agency Agreement Default or Agency Agreement Event of Default is then continuing).

     (b) The Lessor and the Construction Agent agree that this Agreement shall control the rights of the Lessor and the Construction Agent in and to any award, compensation or insurance payment on account of any Casualty or Condemnation.

     (c) Subject to Section 3.6(d), if the Construction Agent shall receive notice or otherwise have Actual Knowledge of a Casualty, Condemnation or Force Majeure Event prior to the Commencement Date, the Construction Agent shall give notice thereof to the Lessor promptly after the Construction Agent’s receipt of such notice or gaining such Actual Knowledge. In the event such a Casualty, Condemnation or Force Majeure Event occurs (regardless of whether the Construction Agent gives notice or has Actual Knowledge thereof), then the Construction Agent shall (subject to reimbursement in accordance with Section 3.6(a) and subject to reimbursement in accordance with the procedures for obtaining Advances set forth in the Operative Agreements), promptly and diligently repair any damages to the Property in accordance with Section 3.6(a) and otherwise in conformity with the Plans and Specifications and in accordance with all applicable Legal Requirements and Insurance Requirements, so as to restore the Property to the same or a greater remaining economic value, useful life, utility, condition, operation and function as existed immediately prior to such Casualty, Condemnation or Force Majeure Event (assuming all construction requirements pursuant to the Operative Agreements and the applicable construction contracts have been satisfied) and on or before the Construction Period Termination Date. In such event, the Lessor shall retain its leasehold interest pursuant to the Ground Lease regarding the Property, its interest in the Appurtenant Rights and its ownership of such portion of the Property not subject to the Ground Lease or the Appurtenant Rights.

     (d) If the Construction Agent reasonably determines that a Force Majeure Event will cause Completion of the Property to occur later than the Construction Period Termination Date, the Construction Agent may request that the Construction Period Termination Date be extended by the Lessor for the period (not to exceed ninety (90) days following the original Construction Period Termination Date) reasonably necessary to achieve Completion of the Property in light of the event or circumstances giving rise to

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such Force Majeure Event. Any such request shall be in writing delivered to the Lessor and the Agent and shall contain a certification by the Construction Agent with respect to the Property (1) describing the facts and circumstances giving rise to such Force Majeure Event, the expected duration of such delay resulting in such Force Majeure Event, and the date the Construction Agent reasonably believes Completion will be achieved, (2) that the remaining Available Commitments, together with insurance proceeds paid and Other Available Amounts received, if any, with respect to such Force Majeure Event, are adequate to achieve Completion and rebuild or restore any portion of the Property not constituting part of the Improvements within such extension period in accordance with the applicable Construction Materials and Construction Contracts (including the Capitalized Costs accruing during such extension period), (3) that the occurrence of such Force Majeure Event and the construction repairs or restoration to occur following such date will not materially affect the appraised value of the Property set forth in the Appraisal delivered pursuant to the Participation Agreement, (4) that there are proceeds from Other Available Amounts which are sufficient to remediate all Force Majeure Losses arising from Force Majeure Events and that the Construction Agent will cause such Other Available Amounts to be applied to remediate such losses, and (5) the Construction Agent shall have caused any necessary Construction Changes to be made as necessary to effectuate such extension; provided, the Property shall in all events shall be a Permitted Facility. The Construction Agent shall also supply to the Lessor and the Agent such other information as each such Person may reasonably request. The consent of the Lessor under this Section 3.6(d) shall not be withheld or delayed if the determination is made that the request meets the requirements set forth herein in all material respects.

     (e) Notwithstanding any provision to the contrary contained herein without increasing any obligation of the Construction Agent hereunder, should a Casualty, Condemnation or Force Majeure Event with respect to the Property occur during the Construction Period, the Construction Agent shall have no recourse liability to fund any shortfall in the available insurance proceeds and/or Condemnation proceeds required to repair and restore the Property and to cause Completion of the Property unless such shortfall arose as a result of or was otherwise caused by a Construction Agent Related Event, a Full Recourse Event of Default, any Environmental Violation or any other environmental matter giving rise to an indemnity claim pursuant to the Operative Agreements in which case, unless the Construction Agent purchases the Property for the Termination Value, the Construction Agent shall be liable for such shortfall. “Construction Agent Related Event” shall mean any act or omission of the Construction Agent or any other Construction Agency Person, including without limitation any breach by any such Person under any Operative Agreement (including the insurance provisions of this Agreement) or by any such Person under any Construction Contract.

     (f) Promptly upon the Construction Agent’s Actual Knowledge of the presence of Hazardous Substances in any portion of the Property in concentrations and conditions that constitute an Environmental Violation and which, in the reasonable opinion of the Construction Agent, the cost to undertake any legally required response, clean up, remedial or other action will or might result in a cost to the Construction Agent of more than $100,000, the Construction Agent shall notify the Lessor in writing of such

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condition. In the event of any Environmental Violation (regardless of whether notice thereof must be given), the Construction Agent shall, not later than thirty (30) days after the Construction Agent has Actual Knowledge of such Environmental Violation, at the Construction Agent’s sole cost and expense, promptly and diligently undertake and diligently complete any response, clean up, remedial or other action (including without limitation the pursuit by the Construction Agent of appropriate action against any off-site or third party source for contamination) necessary to remove, cleanup or remediate the Environmental Violation in accordance with all Environmental Laws. Any such response, clean up, remedial or other action shall be timely completed in accordance with prudent industry standards and, upon completion of any such response, clean up, remedial or other action, the Construction Agent shall cause to be prepared by a reputable environmental consultant acceptable to the Lessor a report describing the Environmental Violation and the actions taken by the Construction Agent (or its agents) in response to such Environmental Violation, and a statement by the consultant that the Environmental Violation has been remedied in full compliance with applicable Environmental Law.

     (g) Promptly, but in any event within ten (10) Business Days from the date the Construction Agent has Actual Knowledge thereof, the Construction Agent shall provide to the Lessor written notice of any pending or threatened claim, action or proceeding involving any Environmental Law or any Release on or in connection with the Property. All such notices shall describe in reasonable detail the nature of the claim, action or proceeding and the Construction Agent’s proposed response thereto. In addition, the Construction Agent shall provide to the Lessor, within ten (10) Business Days of receipt, copies of all material written communications with any Governmental Authority relating to any Environmental Law in connection with the Property. The Construction Agent shall also promptly provide such detailed reports of any such material environmental claims as may reasonably be requested by the Lessor and the Lessor.

     3.7 Abandonment or Permanent Discontinuance.

     Until termination of the Agency Agreement, the Construction Agent shall promptly and diligently complete the development, acquisition, refinancing, installation, construction and testing of the Property in accordance with the Construction Documents and with the terms hereof and cause the date of Completion with respect to the Property to occur on or prior to the Construction Period Termination Date.

     If the Construction Agent shall abandon or permanently discontinue the construction and development of the Property (which abandonment or permanent discontinuance shall be deemed to have occurred if no work at the Property site is undertaken or completed during a period of thirty (30) days or more for reasons other than a Force Majeure Event), then the Construction Agent shall pay to the Lessor, on a date designated by the Lessor, an aggregate amount equal to the liquidated damages amount referenced in Section 5.3(b) regarding the Property. On such date, the Lessor shall convey the Property to the Construction Agent in accordance with Section 20.2 of the Lease; provided, however, in the event the Lessor replaced the Construction Agent, the Lessor may not cite abandonment or discontinuance, which occurs after such replacement of the Construction Agent.

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     3.8 Additions to the Property and Related Requirements.

     (a) The Construction Agent will provide the Lessor with prior written notice of any change of location of its principal place of business, the location of its chief executive office or the location of its jurisdiction of organization. Regarding the Property, the Lease Supplement shall correctly identify the initial location of the related Equipment (if any) and Improvements (if any) and contain an accurate legal description for the related parcel of Land. The Equipment and Improvements respecting the Property will be located only at the location identified in the Ground Lease or, respecting certain Equipment, at the location identified in the HVAC Easement.

     (b) The Construction Agent will not attach or incorporate any item of Equipment to or in any other item of equipment or personal property, or to or in any real property, in a manner that could give rise to the assertion of any Lien (other than any Permitted Lien or Lessor Lien) on such item of Equipment by reason of such attachment or the assertion of a claim that such item of Equipment has become a fixture and is subject to a Lien in favor of a third party that is prior to the Liens thereon created by the Operative Agreements.

     (c) [Reserved.]

     (d) The Construction Agent shall not use or locate any component of the Property outside of Montgomery County, Maryland. The Construction Agent shall not move or relocate any component of the Property beyond the boundaries of the Land (comprising part of the Property) described in the Ground Lease, except for the temporary removal of Equipment and other personal property for repair or replacement and except for certain of the Equipment which is subject to the HVAC Easement.

     (e) If any component of the Property becomes worn out, lost, destroyed, damaged beyond repair or otherwise permanently rendered unfit for use, the Construction Agent will within a reasonable time replace such component with a replacement component which is free and clear of all Liens (other than Permitted Liens and Lessor Liens) and has a value, utility and useful life at least equal to the component replaced (assuming the component replaced had been maintained and repaired in accordance with the requirements of this Agreement).

     (f) The Construction Agent shall cause to be delivered to the Lessor one (1) or more additional Appraisals (or reappraisals or updates of prior Appraisals of the Property) as the Lessor may request if and to the extent any of the Agent or any Primary Financing Party is required pursuant to any applicable Legal Requirement to obtain such Appraisals (or reappraisals or updates of prior Appraisals) and upon the occurrence of any Agency Agreement Event of Default.

     (g) The Lessor shall under no circumstances be required to build any improvements or install any equipment on the Property, make any repairs, replacements,

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alterations or renewals of any nature or description to the Property, make any expenditure whatsoever in connection with this Agreement or maintain the Property in any way. The Lessor shall not be required to maintain, repair or rebuild all or any part of the Property, and the Construction Agent waives the right to (i) require the Lessor to maintain, repair, or rebuild all or any part of the Property, or (ii) make repairs at the expense of the Lessor pursuant to any Legal Requirement, Insurance Requirement, contract, agreement, covenant, condition or restriction at any time in effect.

     3.9 Warranty of Title.

     The Construction Agent hereby acknowledges and shall cause (a) the Lessor to have a valid, enforceable ground leasehold interest pursuant to the Ground Lease in that portion of the Property subject to the Ground Lease and a valid, enforceable interest pursuant to the Appurtenant Rights in that portion of the Property subject to the Appurtenant Rights and (b) to the extent not subject to the Ground Lease, title in the Property (including without limitation all Equipment, all Improvements, all replacement components to the Property and all Modifications) immediately and without further action to vest in and be the property of the Lessor and to be subject to the terms of the Operative Agreements from and after the Closing Date or such date of incorporation into the Property. The Construction Agent agrees that, subject to the terms of Section 3.10 relating to permitted contests, the Construction Agent shall not directly or indirectly create or allow to remain, and shall promptly discharge at its sole cost and expense, any Lien, defect, attachment, levy, title retention agreement or claim upon the Property, any component thereof or any Modifications or any Lien, attachment, levy or claim with respect to any amounts held by the Lessor, the Agent or any Primary Financing Party pursuant to any Operative Agreement, other than Permitted Liens and the Lessor Liens. The Construction Agent shall promptly notify the Lessor in the event it receives Actual Knowledge that a Lien other than a Permitted Lien has occurred with respect to the Property or any other such amounts.

     3.10 Permitted Contests Other Than in Respect of Indemnities.

     Except to the extent otherwise provided for in Section 11 of the Participation Agreement, the Construction Agent, on its own or on the Lessor’s behalf may contest, by appropriate administrative or judicial proceedings conducted in good faith and with due diligence, the amount, validity or application, in whole or in part, of any Legal Requirement, Imposition or any of the matters described in Section 3.8(c) or any Lien, attachment, levy, encumbrance or encroachment and the Lessor agrees not to pay, settle or otherwise compromise any such item, provided, that (a) the commencement and continuation of such proceedings shall suspend the collection of any such contested amount from, and suspend the enforcement thereof against, the Property, the Lessor, the Agent and each Primary Financing Party; (b) there shall not be imposed a Lien (other than Permitted Liens and the Lessor Liens) on the Property that would subject any part of the Property to a material risk of being sold, forfeited, lost or deferred or a material reduction in value; (c) at no time during the permitted contest shall there be a risk of the imposition of criminal liability or material civil liability on the Agent or any Primary Financing Party for failure to comply therewith; and (d) in the event that, at any time, there shall be a material risk of extending the application of such item beyond the end of the Construction Period, then the Construction Agent shall deliver to the Lessor, the Agent and each other

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Financing Party an Officer’s Certificate certifying as to the matters set forth in clauses (a), (b) and (c) of this Section 3.10. The Lessor shall execute and deliver to the Construction Agent such authorizations and other documents as may reasonably be required in connection with any such contest and, if reasonably requested by the Construction Agent, shall join as a party therein.

     3.11 Impositions and Other Matters.

     Except with respect to Impositions and such other matters referenced in Section 3.10 which are the subject of ongoing proceedings contesting the same in a manner consistent with the requirements of Section 3.10, the Construction Agent shall cause all Impositions and such other matters to be timely complied with, paid through Advances, settled or compromised, as appropriate, with respect to the Property.

ARTICLE IV
PAYMENT OF FUNDS

     4.1 Right to Receive Construction Cost.

     (a) In connection with the development, acquisition, installation, construction, repair, renovation, replacement and testing of the Property and during the course of the construction of the Improvements on the Property, the Construction Agent may deliver Requisitions to request that the Lessor advance funds for the payment of Property Costs, and the Lessor will comply with such request to the extent provided for under the Participation Agreement and the other Operative Agreements. The Construction Agent and the Lessor acknowledge and agree that the Construction Agent’s right to request such funds and the Lessor’s obligation to advance such funds for the payment of Property Costs is subject in all respects to the terms and conditions of the Participation Agreement and each of the other Operative Agreements. Without limiting the generality of the foregoing it is specifically understood and agreed that in no event shall the aggregate amounts advanced by the Primary Financing Parties for Property Costs and any other amounts due and owing hereunder or under any of the other Operative Agreements exceed the sum of the aggregate Commitments of the Primary Financing Parties, including without limitation such amounts owing for (i) development, acquisition, installation, construction and testing of the Property, (ii) additional amounts which accrue or become due and owing under either Credit Agreement or the Participation Agreement as obligations of the Lessor prior to the Completion Date or (iii) any other purpose.

     (b) The proceeds of any funds made available to the Lessor to pay Property Costs shall be made available to or for the benefit of the Construction Agent in accordance with the Requisition relating thereto and the terms of the Participation Agreement. The Construction Agent will use such proceeds only to pay the Property Costs set forth in the Requisition relating to such funds.

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     4.2 Limitations During Construction Period.

     If at any time there shall be Property Costs (including any costs resulting from a Force Majeure Event), or other amounts which are required to be paid prior to or during the Construction Period through Advances under any Operative Agreement, and (i) such amounts are not included in the Construction Budget (as same may be adjusted pursuant to the Agency Agreement) or (ii) there are not sufficient Available Commitments remaining to complete the construction of the Improvements pursuant to the Construction Documents (net of all Advances for Lessor Yield and Interest on the Loans), and, in either case, there are no Other Available Amounts to pay for such amounts, then at such time an Agency Agreement Event of Default shall be deemed to have occurred.

ARTICLE V
AGENCY AGREEMENT EVENTS OF DEFAULT

     5.1 Agency Agreement Events of Default.

     If any one or more of the following events (each an “Agency Agreement Event of Default”) shall occur:

     (a) the Construction Agent applies any Advance for purposes other than as set forth in the related Requisition or the Construction Agent otherwise applies any funds paid by any Primary Financing Party to the Construction Agent for purposes not permitted hereby or by any other Operative Agreement, or there shall exist any other misapplication of funds relating to the Property, including, but not limited to fraud, illegal acts or willful misconduct by the Construction Agent or its Affiliates or any Construction Agency Person or any other Person under the direct or indirect supervision of the Construction Agent related to or in respect of the transaction contemplated herein or the Operative Agreement or with respect to the Property or the Land;

     (b) the Construction Agent shall fail to comply with Section 2.6(c);

     (c) (i) the Construction Budget shall not be In Balance and such failure to be In Balance shall continue after the expiration of the thirty (30) day period discussed in Section 5.5(b), or (ii) the Construction Agent shall fail to timely make a Balance Deposit required under Section 5.5(c);

     (d) an Insolvency Event with respect to the Construction Agent or any of its Affiliates shall have occurred and become continuing;

     (e) the Construction Agent shall default in the due performance and observance of any of its obligations under Sections 5.11, 8.3A(v), (w), (x), (y) or (aa) of the Participation Agreement or Section 5.11 of the Participation Agreement;

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     (f) any representation, warranty or statement made or restated by the Construction Agent or the Lessee in this Agency Agreement or in any other Operative Agreement, or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto, shall prove to be untrue in any material respect on the date as of which made or restated, and (i) the circumstances rendering such representation or warranty or statement incorrect shall not be remediable or, (ii) if such representation or warranty or statement is remediable and the Construction Agent or the Lessee is proceeding diligently so to remedy, shall continue unremedied for thirty (30) days after the earlier of: (x) the date on which written notice is delivered by the Lessor or the Agent to the Construction Agent or the Lessee specifying such circumstances and demanding that they be remedied and (y) the date on which any Responsible Officer of the Construction Agent or the Lessee has Actual Knowledge of such incorrectness; provided, however, that if such default is capable of cure but cannot be cured by payment of money or cannot be cured by diligent efforts within such thirty (30) day period but such diligent efforts shall be properly commenced within the cure period and the Construction Agent or the Lessee is diligently pursuing, and shall continue to pursue diligently, remedy of such failure, the cure period shall be extended for an additional period of time as may be necessary to cure, not to exceed an additional one hundred and twenty (120) days and not to extend beyond the Construction Period Termination Date;

     (g) except as otherwise permitted under the Operative Agreements, any Lien granted pursuant to any Operative Agreement affecting any portion of the Property shall, in whole or in material part, cease to be a perfected first priority security interest (other than Permitted Liens and the Lessor Liens), other than with respect to any immaterial portion of the Land, unless such cessation shall be the result of the willful misconduct or gross negligence of the Agent or the Lessor, provided, however, that with respect to any Lien which fails to be so effective or perfected, the Construction Agent shall have thirty (30) days from the earlier of the Construction Agent’s Actual Knowledge of such condition or receipt of notice thereof from the Lessor or the Agent to cure such failure;

     (h) the Construction Agent or the Lessee shall default in the due performance or observance by it of any term, covenant, condition or agreement on its part to be performed or observed under any Operative Agreement to which it is a party (not otherwise specified in this Section 5.1) and such default shall have continued unremedied for a period of at least thirty (30) days after receipt of notice by the Construction Agent or the Lessee from either the Lessor or the Agent, provided, however, that if such default is capable of cure but cannot be cured by payment of money or cannot be cured by diligent efforts within such thirty (30) day period but such diligent efforts shall be properly commenced within the cure period and the Construction Agent or the Lessee is diligently pursuing, and shall continue to pursue diligently, remedy of such failure, the cure period shall be extended for an additional period of time as may be necessary to cure, not to exceed an additional one hundred and twenty (120) days and not to extend beyond the Construction Period Termination Date;

     (i) an event described in Section 4.2 of this Agreement shall have occurred;

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     (j) any default, event of default or any event which with the passage of time or the giving of notice, or both, would permit the exercise of remedies under the Ground Lease or any of the Appurtenant Rights or any sublease thereof or the Ground Lease or any of the necessary Appurtenant Rights shall terminate;

     (k) the Construction Agent shall fail to maintain insurance required by Section 3.5 or the Construction Agent shall fail to deliver the certification required by Section 3.5 and such failure shall continue for ten (10) days after notice to the Construction Agent;

     (l) [Reserved];

     (m) one or more judgments or orders for the payment of money in the aggregate amount in excess of $10,000,000 shall be rendered against the Construction Agent or any of its Affiliates and such judgment or order shall continue unsatisfied or unstayed for a period of sixty (60) days;

     (n) an “event of default” shall occur in (i) the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness of the Construction Agent or any of its Subsidiaries having a principal amount, individually or in the aggregate, in excess of $10,000,000, or (ii) the performance or observance of any obligation or condition with respect to such Indebtedness;

     (o) the Lessor’s rights pursuant to the Liquid Collateral Agreements or the Punch List Liquid Collateral Agreements, as applicable, to require the Lessee to pledge additional Permitted Investments shall for any reason cease to be a legal, valid and binding agreement with the Lessee; or

     (p) the Lien of the Liquid Collateral Agreements or the Punch List Liquid Collateral Agreements, as applicable, with respect to the Liquid Collateral shall cease to constitute a first priority perfected security interest (except as a result of a voluntary release by the Agent of any Liquid Collateral).

     (q) any Lease Event of Default, Liquid Collateral Agreement Event of Default or Punch List Liquid Collateral Agreement of Default (as such terms are defined in Appendix A to the Participation Agreement) shall have occurred and not be cured within any cure period expressly permitted under the terms of the applicable document;

     (r) any fraudulent or illegal act or omission or any willful misconduct of any Construction Agency Person in connection with the Property or otherwise with respect to the negotiation, execution, delivery, consummation and/or performance of any Operative Agreement or any Construction Document or any other contractual agreement relating to the Property or the Construction or Work thereon which act, omission or misconduct contributes to the Construction Budget not being In Balance or which otherwise contributes to a Construction Failure;

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     (s) any Construction Agency Person shall breach any of its respective obligations, covenants, representations or warranties under this Agreement, any Construction Document or any other contractual agreement or law relating to the Property or the Construction or Work thereon;

     (t) there occurs an Environmental Violation that is reasonably likely to cost or actually costs more than $500,000 to remediate;

     (u) the Construction Agent or any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $2,000,000, which it shall have become liable to pay to the PBGC or to a Pension Plan under Title IV of ERISA; or notice of intent to terminate a Pension Plan or Pension Plans having aggregate Unfunded Liabilities in excess of $2,000,000 shall be filed under Title IV of ERISA by the Construction Agent or any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Pension Plan or Pension Plans or a proceeding shall be instituted by a fiduciary of any such Pension Plan or Pension Plans against the Construction Agent or any member of the Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Pension Plan or Pension Plans must be terminated;

     (v) [Reserved]; or

     (w) any Lien granted under any Security Document shall, in whole or in part, terminate, cease to be effective or lose its first priority status, except as expressly contemplated by the Operative Agreements or as the result of an act or omission of the Lessor or the Agent;

then, in any such event, the Lessor may, in addition to the other rights and remedies provided for in this Agreement, terminate this Agreement by giving the Construction Agent written notice of such termination and upon the expiration of the time fixed in such notice (or immediately if no such time is set forth in such notice) and the payment of all amounts owing by the Construction Agent hereunder (including without limitation any amounts specified under Section 5.3), this Agreement shall terminate provided, notwithstanding the foregoing, this Agreement shall be deemed to be automatically terminated without the giving of notice upon the occurrence of an Insolvency Event. The Lessor may enter upon and repossess the Property by such means as are available at law or in equity, and may remove the Construction Agent, all Construction Agency Persons and all other Persons and any and all personal property and the equipment and personalty of each Construction Agency Person and severable Modifications from the Property. The Lessor shall have no liability by reason of any such entry, repossession or removal performed in accordance with applicable law. Following an Agency Agreement Event of Default and upon the written demand of the Lessor, the Construction Agent shall return the Property promptly to the Lessor, in the manner and condition required by, and otherwise in accordance with the provisions of Section 3.8. With the exception of Uninsured Force Majeure Losses, subject to the limitation in Section 5.4, the Construction Agent shall pay all costs and

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expenses incurred by or on behalf of the Lessor, including without limitation fees and expenses of counsel, as a result of any Agency Agreement Event of Default hereunder.

     A POWER OF SALE HAS BEEN GRANTED IN THIS AGREEMENT. A POWER OF SALE MAY ALLOW THE LESSOR TO TAKE THE PROPERTY AND SELL THE PROPERTY WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF AN AGENCY AGREEMENT EVENT OF DEFAULT.

     5.2 Damages.

     The termination of this Agreement pursuant to Section 5.1 shall in no event relieve the Construction Agent of its liability and obligations hereunder, all of which shall survive any such termination.

     5.3 Remedies; Remedies Cumulative.

     (a) If an Agency Agreement Event of Default shall have occurred and be continuing, the Lessor shall have all rights available to the Lessor herein and under the other Operative Agreements and all other rights otherwise available at law, equity or otherwise; provided, however, such rights of the Lessor and the other remedies set forth in this Section 5.3 shall be subject to Section 5.4.

     (b) Upon the occurrence of an Agency Agreement Event of Default, the Lessor shall have (in addition to its rights otherwise described in this Agreement or existing at law, equity or otherwise) the option (and shall be deemed automatically, and without any further action, to have exercised such option upon the occurrence of any Insolvency Event) to transfer and convey to the Construction Agent upon a date designated by the Lessor all right, title and interest of the Lessor in and to the Property after the Lessor receives payment of the amount specified in subparagraph (iii) of this Section 5.3(b) (including without limitation any Land and/or any Improvements, any interest in any Improvements, any Equipment and the Property then under construction). On any transfer and conveyance date specified by the Lessor pursuant to this Section 5.3(b), (i) the Lessor shall transfer and convey (at the cost of the Construction Agent) all right, title and interest of the Lessor in and to the Property free and clear of the Lien of the Lease, this Agreement, the other Operative Agreements and all Lessor Liens, (ii) the Construction Agent hereby covenants and agrees that it will accept such transfer and conveyance of right, title and interest in and to the Property and (iii) the Construction Agent hereby promises to pay to the Lessor, as liquidated damages (it being agreed that it would be impossible accurately to determine actual damages), an aggregate amount equal to the Termination Value of the Property. The Construction Agent specifically acknowledges and agrees that its obligations under this Section 5.3(b), including without limitation its obligations to accept the transfer and conveyance of the Property and its payment obligations described in subparagraph (iii) of this Section 5.3(b), shall be absolute and unconditional under any and all circumstances and shall be performed and/or paid, as the case may be, without notice or demand and without any abatement, reduction, diminution, setoff, defense, counterclaim or recoupment whatsoever.

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Notwithstanding the foregoing provisions of this Section 5.3(b), the Lessor shall have the right in its sole discretion to rescind any exercise of its option under this Section 5.3(b) upon the giving of its written confirmation of such rescission to the Construction Agent.

     (c) Except to the extent the Lessor has previously transferred the Property pursuant to the exercise of remedies or otherwise, the Construction Agent shall have the right to cure an Agency Agreement Default or Agency Agreement Event of Default hereunder with respect to the Property by purchasing or causing the Construction Agent to purchase the Property from the Lessor for an amount equal to the liquidated damages amount set forth in Section 5.3(b).

     (d) With respect to any Agency Agreement Event of Default, none of (a) the termination of this Agreement as to the Property pursuant to Section 5.1; (b) the repossession of the Property; or (c) the failure of the Lessor to complete or relet the Property, the Completion or reletting of all or any portion thereof, or the failure of the Lessor to collect or receive any rentals due upon any such reletting, shall relieve the Construction Agent of its liabilities and obligations hereunder, all of which shall survive any such Final Completion, termination, repossession or reletting.

     (e) Without limiting any other remedies set forth in this Agreement, the Lessor and the Construction Agent agree that the Construction Agent has granted, pursuant to Section 3.4 hereof, a Lien against the Property WITH POWER OF SALE, and that, upon the occurrence and during the continuance of any Agency Agreement Event of Default, the Lessor shall have the power and authority, to the extent provided by law, after prior notice and lapse of such time as may be required by law, to foreclose its interest (or cause such interest to be foreclosed) in all or any part of the Property.

     (f) If an Agency Agreement Event of Default shall have occurred and be continuing, and whether or not this Agreement shall have been terminated pursuant to Section 5.1, the Construction Agent shall pay directly to any third party (or at the Lessor’s election, reimburse the Lessor) for the cost of any environmental testing (provided, if there is no recognized Environment Violation, recourse to the Construction Agent shall be limited as set forth in Section 5.4) and/or remediation work undertaken respecting the Property, as such testing or work is deemed appropriate in the reasonable judgment of the Lessor, and shall indemnify and hold harmless the Lessor and each other Indemnified Person therefrom. The Construction Agent shall pay all amounts referenced in the immediately preceding sentence within ten (10) days of any request by the Lessor for such payment. The provisions of this Section 5.3(f) shall not limit the obligations of the Construction Agent under any Operative Agreement regarding indemnification obligations, environmental testing, remediation and/or work.

     (g) If this Agreement shall be terminated pursuant to Section 5.1, the Construction Agent waives, to the fullest extent permitted by Law, (i) any notice of re-entry or the institution of legal proceedings to obtain re-entry or possession; (ii) any right of redemption, re-entry or possession; (iii) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt; and (iv) any other rights,

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which might otherwise limit or modify any of the Lessor’s rights or remedies under this Section 5.3.

     (h) If an Agency Agreement Event of Default shall have occurred and be continuing, and whether or not this Agreement shall have been terminated pursuant to Section 5.1, the Construction Agent shall upon the Lessor’s demand immediately assign, transfer and set over to the Lessor all of the Construction Agent’s right, title and interest in and to each agreement executed by the Construction Agent in connection with the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property (including without limitation all right, title and interest of the Construction Agent with respect to all warranty, performance, service and indemnity provisions and each Construction Document), as and to the extent that the same relate to the acquisition, installation, testing, use, development, construction, operation, maintenance, repair, refurbishment and restoration of the Property or any portion of them.

     (i) No failure to exercise and no delay in exercising, on the part of the Lessor, any right, remedy, power or privilege under this Agreement or under the other Operative Agreements shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges provided in this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

     (j) The remedies herein provided shall be cumulative and in addition to (and not in limitation of) any other remedies available at law, equity or otherwise, including without limitation any mortgage foreclosure remedies.

     5.4 Limitation on Recourse.

     Notwithstanding anything contained herein or in any other Operative Agreement to the contrary, upon the occurrence and during the continuance of an Agency Agreement Event of Default relating solely to the Property (other than as a result of (a) a Full Recourse Event of Default or (b) any indemnity claim pursuant to the Operative Agreements including without limitation pursuant to Sections 10.1(c) and 11.1 through 11.7 of the Participation Agreement, in either such case pursuant to the foregoing subsections (a) or (b), the limitations contained in this Section 5.4 shall not apply), the maximum aggregate amount (the “Maximum Amount”) that the Lessor, or any person or entity acting by or through the Lessor, including without limitation the Agent and the other Financing Parties, shall be entitled to recover from the Construction Agent on account of such Agency Agreement Event of Default shall be an amount equal to the sum of (i) 89.9% of the aggregate GAAP Eligible Cost, exclusive of the portion of the aggregate GAAP Eligible Cost expended for the purchase of the Land related to the Property (the “Land Cost”) plus (ii) 100% of the Land Cost, plus (iii) all amounts owed by the Construction Agent under or with respect to any Operative Agreement in connection with any potential Environmental Violation related to the Property. The Construction Agent nonetheless acknowledges and agrees that even though the maximum aggregate recovery from the Construction Agent is limited as

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aforesaid, the Lessor’s right of recovery from the Property (as opposed to any recovery from the Construction Agent) is not so limited and the Lessor shall be entitled to recover 100% of the amounts owed to the Lessor in accordance with the Operative Agreements from its interest in the Property.

     5.5 Determination of Whether Budget is “In Balance”.

     (a) If the Agent determines that the Construction Budget may not be In Balance, the Agent shall give notice to such effect to the Construction Agent, together with a reasonably detailed explanation of the basis for the Agent’s determination and to the extent available calculations upon which the Agent has based its determination. Within ten (10) days following the Construction Agent’s receipt of such notice, the Construction Agent shall deliver a certification to the Agent that either (i) the Construction Budget is not In Balance and describing the steps the Construction Agent is taking to remedy such condition, if any, or (ii) the Construction Budget is In Balance and stating sufficient detail to describe why the Construction Agent believes the Construction Budget is In Balance.

     (b) If after receipt by the Agent of a certification from the Construction Agent pursuant to Section 5.5(a)(ii) above that the Construction Budget is In Balance, the Agent still disagrees with such certification, the Construction Agent and the Agent shall, for a period of thirty (30) days following the Agent’s receipt of such certification, consult with each other and use their reasonable efforts to resolve such dispute as to whether the Construction Budget is In Balance.

     (c) Upon the occurrence of either (i) the Construction Agent’s delivery of certification pursuant to Section 5.5(a)(i) above that the Construction Budget is not In Balance, or (ii) the thirty (30) days consultation period referred to in Section 5.5(b) above shall expire and the Agent shall continue to disagree with the Construction Agent’s assertion that the Construction Budget is In Balance, the Lessor shall have the option, exercisable in its sole discretion, upon notice to the Construction Agent, to require the Construction Agent to deposit (a “Balance Deposit”) with the Lessor within five (5) Business Days an amount equal to the lesser of (x) the amount which if paid to the Construction Agent would, together with any Available Commitments and Other Available Amounts be sufficient to make the Construction Budget In Balance and (y) the Maximum Amount.

     (d) In the event the Construction Agent is required to make a Balance Deposit pursuant to Section 5.5(c) above, such Balance Deposit shall evidence a portion of the Maximum Amount and any amounts withdrawn from the Balance Deposit to fund Property Costs shall reduce dollar for dollar the Maximum Amount.

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ARTICLE VI
THE LESSOR’S RIGHTS

     6.1 [Reserved].

     6.2 The Lessor’s Right to Cure the Construction Agent’s Defaults.

     The Lessor, without waiving or releasing any obligation or Agency Agreement Event of Default, may (but shall be under no obligation to) remedy any Agency Agreement Event of Default for the account of and at the sole cost and expense of the Construction Agent. All out-of-pocket costs and expenses so incurred (including without limitation fees and expenses of counsel), together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid by the Lessor, shall be paid by the Construction Agent to the Lessor on demand.

ARTICLE VII
MISCELLANEOUS

     7.1 Notices.

     All notices required or permitted to be given under this Agreement shall be in writing and delivered as provided in Section 12.2 of the Participation Agreement.

     7.2 Successors and Assigns.

     This Agreement shall be binding upon and inure to the benefit of the Lessor, the Construction Agent, the Construction Agent and their respective successors and the assigns.

     7.3 GOVERNING LAW.

     THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO APPLY.

     7.4 SUBMISSION TO JURISDICTION; VENUE; WAIVERS; ARBITRATION

     THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

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     7.5 Amendments and Waivers.

     None of the terms or provisions of this Agreement may be terminated, amended, supplemented, waived, modified or discharged except in accordance with the provisions of Section 12.4 of the Participation Agreement.

     7.6 Counterparts.

     This Agreement may be executed in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

     7.7 Severability.

     Any provision of this Agreement, which is prohibited or unenforceable in any jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

     7.8 Headings and Table of Contents.

     The headings and table of contents contained in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

     7.9 WAIVER OF JURY TRIAL.

     TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, THE LESSOR AND THE CONSTRUCTION AGENT IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND ANY COUNTERCLAIM THEREUNDER.

     7.10 Assignment.

     (a) The Construction Agent may not assign this Agreement or any of its rights or obligations hereunder or with respect to the Property in whole or in part to any Person without the prior written consent of the Agent, the Lenders and the Lessor.

     (b) No assignment by the Construction Agent (referenced in this Section 7.10 or otherwise) or other relinquishment of possession to the Property shall in any way discharge or diminish any of the obligations of the Construction Agent to the Lessor hereunder and the Construction Agent shall remain directly and primarily liable under the Operative Agreements as to any rights or obligations assigned by the Construction Agent or regarding the Property in which rights or obligations have been assigned or otherwise transferred.

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     7.11 No Waiver.

     No failure by the Lessor or the Construction Agent to insist upon the strict performance of any term hereof or to exercise any right, power or remedy upon a default hereunder, and no acceptance of full or partial payment of any amount from, or on behalf of, the Construction Agent during the continuance of any such default, shall constitute a waiver of any such default or of any such term. To the fullest extent permitted by law, no waiver of any default shall affect or alter this Agreement, and this Agreement shall continue in full force and effect with respect to any other then existing or subsequent default.

     7.12 Acceptance of Surrender.

     No surrender to the Lessor of this Agreement or of all or any portion of the Property or of any part of the Property or of any interest therein shall be valid or effective unless agreed to and accepted in writing by the Lessor and no act by the Lessor or the Agent or any representative or agent of the Lessor or the Agent, other than a written acceptance, shall constitute an acceptance of any such surrender.

     7.13 No Merger of Title.

     There shall be no merger of this Agreement by reason of the fact that the same Person may acquire, own or hold, directly or indirectly, in whole or in part, (a) this Agreement or any interest in this Agreement, (b) any right, title or interest in the Property, (c) any Notes or (d) an assignment from or a beneficial interest in the Lessor.

     7.14 Survival.

     Anything contained in this Agreement to the contrary notwithstanding, all claims against and liabilities of the Construction Agent or the Lessor arising from events arising prior to the expiration or earlier termination of this Agreement shall survive such expiration or earlier termination. If any provision of this Agreement shall be held to be unenforceable in any jurisdiction, such unenforceability shall not affect the enforceability of any other provision of this Agreement and such jurisdiction or of such provision or of any other provision hereof in any other jurisdiction.

     7.15 Limited Liability.

     The parties to this Agreement hereby agree that the provisions of Section 12.9 of the Participation Agreement are hereby incorporated herein as though such Section 12.9 were restated herein in its entirety.

     7.16 Statement of Intent Regarding Accounting Compliance.

     It is the further intent of the parties to this Agreement that this Agreement and the transaction evidenced by the Operative Agreements conform with and satisfy the requirements

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of, to the extent applicable, FAS 13, FASB Interpretation No. 46, Emerging Issues Task Force, 1997\Issue 97-1 and Emerging Issues Task Force, 1997\Issue 97-10.

     7.17 Amendment Restatement.

     The parties hereto hereby wish to amend and restate the Original Agency Agreement (in regards to the Property) pursuant to the terms of this Agreement.

[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

HUMAN GENOME SCIENCES, INC., as the Construction Agent
By:	/s/ Steven C. Mayer
Name:		Steven C. Mayer
Title:		Senior Vice President and
		Chief Financial Officer
WACHOVIA DEVELOPMENT CORPORATION, as the Lessor
By:	/s/ Evander S. Jones, Jr.
Name:		Evander S. Jones, Jr.
Title:		Vice President

Amended and Restated Agency Agreement
Human Genome Sciences, Inc. EX-10.5 7 w88716exv10w5.htm AMENDED AND RESTATED SECURITY AGREEMENT

Exhibit 10.5

AMENDED AND RESTATED SECURITY AGREEMENT

Dated as of June 30, 2003

between

WACHOVIA DEVELOPMENT CORPORATION,
as the Borrower

and

WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent for the Secured Parties

and accepted and agreed to by

HUMAN GENOME SCIENCES, INC.

TABLE OF CONTENTS

1.	Definitions	3
2.	Grant of Security Interest	3
3.	Representations and Warranties	5
4.	Payment of Obligations	6
5.	Other Covenants	6
6.	Default; Remedies	6
7.	Remedies Not Exclusive	7
8.	Performance by the Agent of the Borrower’s Obligations	7
9.	Duty of the Agent	8
10.	Powers Coupled with an Interest	8
11.	Execution of Financing Statements	8
12.	Security Agreement Under Uniform Commercial Code	8
13.	Authority of the Agent	9
14.	Notices	9
15.	Severability	10
16.	Amendment in Writing; No Waivers; Cumulative Remedies	10
17.	Section Headings	10
18.	Successors and Assigns	10
19.	The Borrower’s Waiver of Rights	10
20.	GOVERNING LAW	11
21.	Obligations Are Without Recourse	11
22.	Partial Release; Full Release	11
23.	Miscellaneous	11
24.	Conflicts with Participation Agreement	12
25.	THE LESSEE AS A PARTY	12
26.	Counterparts	13
27.	Amendment and Restatement	13

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AMENDED AND RESTATED SECURITY AGREEMENT

     THIS AMENDED AND RESTATED SECURITY AGREEMENT, dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, this “Security Agreement”), is made between WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation, as the borrower (the “Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (the “Bank”), as agent for (a) the Credit Lenders (hereinafter defined) under the Amended and Restated Credit Agreement (Credit Loans) dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, the “Credit Loan Agreement”) by and among the Borrower, Variable Funding Capital Corporation (“VFCC”) and the several banks and other financial institutions from time to time parties thereto (VFCC and the foregoing banks and financial institutions are collectively referenced as the “Credit Lenders”) and Wachovia Bank, National Association, as the agent for the Credit Lenders, (b) the Mortgage Lenders (hereinafter defined) under the Amended and Restated Credit Agreement (Mortgage Loans) dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, the “Mortgage Loan Agreement”) by and among the Borrower, VFCC and the several banks and other financial institutions from time to time parties thereto (VFCC and the foregoing banks and financial institutions are collectively referenced as the “Mortgage Lenders”) and Wachovia Bank, National Association, as the agent for the Mortgage Lenders, (c) the Lessor, (d) the Hedge Providers and (e) itself. The Credit Lenders, the Mortgage Lenders, the Lessor, the Hedge Providers and the Agent, together with their successors and permitted assigns, are collectively referred to hereinafter as the “Secured Parties.” The Bank, in its capacity as agent for the Secured Parties is referred to hereinafter as the “Agent,” and this Security Agreement is accepted and agreed to by HUMAN GENOME SCIENCES, INC., a Delaware corporation (the “Lessee”).

Preliminary Statement

     A.     WHEREAS, the Lessee, Traville LLC, the Trust, Wells Fargo Bank Northwest, National Association, BancBoston Leasing Investments Inc., Wachovia Bank, National Association (as successor in interest to First Union National Bank), EagleFunding Capital Corporation, Fleet Securities, Inc., and Fleet National Bank were parties to that certain Participation Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from time to time, the “Original Participation Agreement”);

     B.     WHEREAS, pursuant to the Master Transfer Agreement, among other things, (i) the Credit Lenders obtained an assignment of the right, title and interest of the tranche a lenders under the Original Participation Agreement and the associated transaction documents with regard to the Property and (ii) the Mortgage Lenders obtained an assignment of the right, title and interest of the tranche b lenders under the Original Participation Agreement and the associated transaction documents with regard to the Property;

     C.     WHEREAS, such assignment as referenced in Recital B included an assignment in favor of (i) the Conduit (with regard to the Property) of the right, title and interest of EagleFunding Capital Corporation in and to the A Loan Agreement dated as of November 7,

2001 (as amended, modified, extended, supplemented and/or restated, the “Original A Loan Agreement”) among the Trust, EagleFunding Capital Corporation, Fleet Security, Inc., Fleet National Bank and Wachovia Bank, National Association (as successor in interest to First Union National Bank) and the associated transaction documents and the B Loan Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated, the “Original B Loan Agreement”) among the Trust, EagleFunding Capital Corporation, Fleet Security, Inc., Fleet National Bank and Wachovia Bank, National Association (as successor in interest to First Union National Bank) and the associated transaction documents, (ii) the Investors (with regard to the Property) of the right, title and interest of Fleet National Bank and Wachovia Bank, National Association (as successor in interest to First Union National Bank) in their capacities as liquidity providers pursuant to the Original A Loan Agreement and the Original B Loan Agreement, (iii) the Lessor (with regard to the Property) of the right, title and interest of the Trust pursuant to the Original Participation Agreement and the associated transaction documents and (iv) the Agent (with regard to the Property) of the right, title and interest of Fleet National Bank, in its capacity as administrative agent pursuant to the Original Participation Agreement and the associated transaction documents (including without limitation in such associated transaction documents is the Security Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from the time to time, the “Original Security Agreement”)) among EagleFunding Capital Corporation, Fleet Securities, Inc., Fleet National Bank, Wachovia Bank, National Association (as successor in interest to First Union National Bank), BancBoston Leasing Investments Inc., Genome Statutory Trust 2001A and Human Genome Sciences, Inc.;

     D.     WHEREAS, pursuant to (i) the Credit Loan Agreement, the Credit Lenders have agreed to make the Credit Loans in favor of the Borrower up to the Credit Loan Commitment, (ii) the Mortgage Loan Agreement, the Mortgage Lenders have agreed to make the Mortgage Loans in favor of the Borrower up to the Mortgage Loan Commitments and (iii) the Participation Agreement, the Lessor has agreed to make the Lessor Advances up to the Lessor Commitment;

     E.     WHEREAS, the Hedge Providers have agreed to provide interest rate protection pursuant to the Hedging Agreements;

     F.     WHEREAS, the parties to this Agreement wish to amend and restate the Original Security Agreement as such agreement relates to the Property, pursuant to the terms of this Agreement; and

     G.     WHEREAS, it is a condition, among others, to the obligation of the Credit Lenders to make the Credit Loans, the Mortgage Lenders to make the Mortgage Loans, the Lessor to make the Lessor Advances and the Bank to act in the capacity as Agent that the Borrower shall have executed and delivered this Security Agreement to the Agent, for the benefit of the Secured Parties.

     NOW, THEREFORE, in consideration of the premises and to induce the Credit Lenders to make the Credit Loans, the Mortgage Lenders to make the Mortgage Loans, the Lessor to make the Lessor Advances, the Hedge Providers to provide interest rate protection pursuant to

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the Hedging Agreements and the Bank to act in the capacity as Agent, the Borrower hereby agrees with the Agent, for the benefit of the Secured Parties, as follows:

1. Definitions.

     (a) The following terms are used herein as defined in the Uniform Commercial Code as in effect from time to time in the State of New York (the “UCC”): Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Instruments, Investment Property, Letter-of-Credit Rights and Proceeds. Each such term as used in relationship with the Borrower and/or the Lessee shall mean such property only to the extent arising from or relating to the transactions contemplated by the Operative Agreements or arising directly or indirectly from or otherwise relating to (i) the ownership by the Borrower and/or the Lessee of, (ii) the right, title or interest of the Borrower and/or the Lessee in, (iii) the planning, design, engineering, construction, development, completion, insuring, operation, maintenance, modification, alteration, lease, sublease or use of, or (iv) the sale, casualty, condemnation, assignment, transfer, pledge, encumbrance or other disposition of, the Property or any part thereof or any other property financed pursuant to the Operative Agreements. For the avoidance of doubt, (i) the term “Accounts” as used herein shall exclude all accounts receivable of the business and operations of the Borrower and/or the Lessee and (ii) the term “General Intangibles” as used herein shall exclude all trademarks, trade names and symbols of the Borrower and/or the Lessee.

     (b) Capitalized terms used but not otherwise defined in this Security Agreement shall have the respective meanings specified in Appendix A to the Amended and Restated Participation Agreement dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time in accordance with the applicable provisions thereof, the “Participation Agreement”) among the Lessee, the Borrower, VFCC, the various banks and other financial institutions which are parties thereto from time to time, as the investors, Wachovia Securities, LLC, as the deal agent, and the Bank, as agent for the Primary Financing Parties and, respecting the Security Documents, as the agent for the Secured Parties.

     (c) The rules of usage set forth in Appendix A to the Participation Agreement shall apply to this Agreement.

2. Grant of Security Interest.

     To secure the payment and performance of all the Obligations, THE BORROWER HEREBY CONVEYS, GRANTS, ASSIGNS, TRANSFERS, HYPOTHECATES, MORTGAGES AND SETS OVER TO THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, BUT SUBJECT TO THE EXCLUSION SET FORTH IN THIS SECTION 2, A FIRST PRIORITY SECURITY INTEREST IN AND LIEN ON ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE BORROWER’S INTEREST (AS THE TERM “BORROWER’S INTEREST” IS DEFINED IN APPENDIX A TO THE PARTICIPATION AGREEMENT), WHETHER NOW EXISTING OR HEREAFTER

3

ACQUIRED, IN EACH OF THE FOLLOWING, BUT SOLELY TO THE EXTENT SUCH RIGHT, TITLE OR INTEREST IS ACQUIRED WITH RESPECT TO THE PROPERTY, ANY OPERATIVE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY:

     (a) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Accounts;

     (b) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Chattel Paper (including without limitation all rights under the Lease);

     (c) [Reserved];

     (d) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Documents;

     (e) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Equipment;

     (f) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Fixtures;

     (g) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all General Intangibles, including without limitation (i) all rights to payment and all indemnity rights under the Operative Agreements, (ii) all books and records relating to or used in connection with the operation of the Property or any part thereof, (iii) all unearned premiums under insurance policies now held or subsequently obtained by the Lessee relating to the Property, (iv) all consents, licenses, certificates and other governmental approvals relating to construction, completion, use or operation of the Property or any part thereof, and (v) all Construction Documents relating to the Property; specifically excluding however, trademarks, trade names and symbols;

     (h) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Instruments;

     (i) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Investment Property;

     (j) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Letter-of-Credit Rights;

     (k) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, the Property and each part thereof;

4

     (l) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all money, cash or cash equivalent and Deposit Accounts;

     (m) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all Proceeds, including without limitation (i) all Rent and all other rents, payments, purchase prices, receipts, revenues, issues and profits payable under the Lease or pursuant to any other lease with respect to the Property, (ii) subject to application thereof in accordance with the terms of the Lease, all proceeds of any insurance policies maintained pursuant to the Operative Agreements by third parties for the benefit of the Borrower, including without limitation any right to collect and receive such proceeds and (iii) all awards and other compensation, including without limitation the interest payable thereon and any right to collect and receive the same, made to the present or any subsequent owner of the Property for the taking by eminent domain, condemnation or otherwise, of all or any part of the Property or any easement or other right therein; and

     (n) excluding in all cases all right, title and interest of the Borrower in and to any and all Hedging Agreements, all right, title and interest of the Borrower in and to all substitutes, modifications and replacements of, and all additions, accessions and improvements to, the Fixtures and Equipment, subsequently acquired or leased by the Borrower or constructed, assembled or placed by the Borrower on the Property, immediately upon such acquisition, lease, construction, assembling or placement, and in each such case, without any further conveyance, assignment or other act by the Borrower;

     (All of the foregoing property and rights and interests now owned or held or subsequently acquired by the Borrower and described in the foregoing clauses (a) through (n) are collectively referred to as the “Security Assets”).

     TO HAVE AND TO HOLD the Security Assets and the rights and privileges hereby granted unto the Agent (for the benefit of the Secured Parties) its successors and assigns for the uses and purposes set forth, until all of the Commitments have been terminated and all of the Obligations owing to the Secured Parties are paid in full; provided, that EXCLUDED from the Security Assets at all times and in all respects shall be (i) all Excepted Payments and (ii) all right, title and interest of the Borrower in and to any and all Hedging Agreements.

3. Representations and Warranties.

     The Lessee hereby represents and warrants that the Lessee has taken, or caused to be taken, all steps necessary to cause good title and legal ownership of the Security Assets to be conveyed to the Borrower, subject to Permitted Liens and Lessor Liens, or has otherwise caused the Borrower to posses rights in the Security Assets sufficient to permit the Borrower to grant the Liens described in Section 2 hereof, free and clear of all Liens other than Permitted Liens and Lessor Liens.

5

4. Payment of Obligations.

     The Borrower shall pay all Obligations in accordance with the terms of the Operative Agreements.

5. Other Covenants.

     (a) At any time and from time to time, upon the written request of the Agent, and at the expense of the Borrower (with funds provided by the Advances or by the Lessee for such purpose in accordance with the terms of the Operative Agreements), the Borrower will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Agent reasonably may request for the purposes of obtaining or preserving the full benefits of this Security Agreement and of the rights and powers granted by this Security Agreement.

     (b) The Borrower will not, and none of the Financing Parties authorizes the Borrower to, sell, exchange transfer, assign, lease or otherwise dispose of the Security Assets or any interest therein except as permitted under the Operative Agreements.

     (c) The Borrower shall execute and deliver all agreements, assignments, instruments or other documents as reasonably requested by the Agent for the purpose of obtaining and maintaining control within the meaning of the UCC with respect to any Security Assets consisting of Deposit Accounts and Letter-of-Credit Rights.

6. Default; Remedies.

     (a) If a Credit Agreement Event of Default has occurred and is continuing:

     (i) subject to such notice as may be required by applicable law, the Agent, in addition to all other remedies available at law or in equity, shall have the right forthwith (subject to the rights of Lessee pursuant to Section 8.14 of the Participation Agreement) to enter upon the Property (or any other place where any component of any Security Assets is located at such time) without charge, and take possession of all or any portion of the Security Assets, and to sell, re-let or otherwise dispossess itself of the Security Assets and receive the rents, issues and profits thereof, to make repairs and to apply said rentals and profits, after payment of all necessary or proper charges and expenses, on account of the amounts hereby secured (subject to the Excepted Payments); and

     (ii) the Agent, shall, as a matter of right, be entitled to the appointment of a receiver for the Security Assets, and the Borrower hereby consents to such appointment and waives notice of any application therefor.

     (b) If a Credit Agreement Event of Default has occurred and is continuing, the Agent may proceed by an action at law, suit in equity or other appropriate proceeding, to protect and enforce its rights, whether for the foreclosure of the Lien of this Security

6

Agreement, or for the specific performance of any agreement contained herein or for an injunction against the violation of any of the terms hereof. The proceeds of any sale of any of the Security Assets shall be applied pursuant to Section 8.7 of the Participation Agreement. In addition, the Agent may proceed under Section 11 hereof.

     (c) The Borrower hereby waives the benefit of all appraisement, valuation, stay, extension and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale of the Security Assets or any portion thereof or interest therein.

7. Remedies Not Exclusive.

     The Agent shall be entitled to enforce payment of the indebtedness and performance of the Obligations and to exercise all rights and powers under this Security Agreement or under any of the other Operative Agreements or any laws now or hereafter in force, notwithstanding some or all of the Obligations may now or hereafter be otherwise secured, whether by deed of trust, mortgage, security agreement, pledge, Lien, assignment or otherwise. Neither the acceptance of this Security Agreement nor its enforcement, shall prejudice or in any manner affect the Agent’s right to realize upon or enforce any other security now or hereafter held by the Agent as security for the Obligations, it being agreed that the Agent shall be entitled to enforce this Security Agreement and any other security now or hereafter held by the Agent in such order and manner as the Agent may determine in its absolute discretion. Every power or remedy given by any of the Operative Agreements to the Agent or to which it may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Agent. In no event shall the Agent, in the exercise of the remedies provided in this Security Agreement (including without limitation in connection with the assignment of Rents to the Agent, or the appointment of a receiver and the entry of such receiver onto all or any part of the Property), be deemed a “mortgagee in possession” or a “pledgee in possession”, and the Agent shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.

8. Performance by the Agent of the Borrower’s Obligations.

     If the Borrower fails to perform or comply with any of its agreements contained herein the Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. The reasonable expenses of the Agent incurred in connection with actions undertaken as provided in this Section 8, together with interest thereon at a rate per annum equal to the Overdue Rate, from the date of payment by the Agent to the date reimbursed by the Borrower, shall be payable by the Borrower (to the extent relating solely to a Credit Agreement Event of Default which is wholly unrelated to any Lease Event of Default or any Agency Agreement Event of Default with funds provided by the Advances or by the Lessee for such purpose in accordance with the terms of the Operative Agreements) to the Agent on demand and constitutes part of the Obligations secured hereby.

7

9. Duty of the Agent.

     The Agent’s sole duty with respect to the custody, safekeeping and physical preservation of any Security Assets in its possession, if any, shall be to deal with it in the same manner as the Agent deals with similar property for its own account. Neither the Agent nor any other Secured Party nor any of their respective directors, officers, employees, shareholders, partners or agents shall be liable for failure to demand, collect or realize upon any of the Security Assets or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Assets upon the request of the Borrower or any other Person or to take any other action whatsoever with regard to the Security Assets or any part thereof.

10. Powers Coupled with an Interest.

     All powers, authorizations and agencies contained in this Security Agreement are coupled with an interest and are irrevocable until this Security Agreement is terminated and the Liens created hereby are released.

11. Execution of Financing Statements.

     Each of the Borrower and the Lessee authorizes the Agent at the expense of the Borrower or the Lessee, as applicable (such amounts to be paid with the Advances or with funds provided by the Lessee for such purpose), to file financing statements with respect to the Security Assets under this Security Agreement without the signature of the Borrower or the Lessee, as applicable, in such form and in such filing offices as the Agent reasonably determines appropriate to perfect the security interests of the Agent under this Security Agreement. A carbon, photographic or other reproduction of this Security Agreement shall be sufficient as a financing statement for filing in any jurisdiction. For purposes of such financing statement, the Borrower or the Lessee, as applicable, shall be deemed to be the debtor, and the Agent shall be deemed to be the secured party. The address of the Borrower is Wachovia Development Corporation, c/o Wachovia Securities, LLC, One Wachovia Center, 301 South College Street, Charlotte, NC 28288, Attention: Gabrielle Braverman. The address of the Lessee is Human Genome Sciences, Inc., 9410 Key West Avenue, Rockville, MD 20850, Attention: Steve Mayer. The address of the Agent is Wachovia Bank, National Association, 201 South College Street (NC5708), Charlotte, NC 28288, Attention: Greg Ponder.

12. Security Agreement Under Uniform Commercial Code.

     (a) It is the intention of the parties hereto that this Security Agreement, as it relates to matters of the grant, perfection and priority of security interests the subject hereof, shall constitute a security agreement within the meaning of the Uniform Commercial Code of the states in which the Security Assets are located. If a Credit Agreement Event of Default shall occur and be continuing, then in addition to having any other right or remedy available at law or in equity, the Agent may proceed under the applicable Uniform Commercial Code and exercise such rights and remedies as may be provided to a secured party by such Uniform Commercial Code with respect to all or any portion of the Security Assets which is personal property (including without limitation

8

taking possession of and selling such property). If the Agent shall elect to proceed under the Uniform Commercial Code, then ten (10) days’ notice of sale of the personal property shall be deemed reasonable notice and the reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by the Agent shall include, but not be limited to, reasonable attorneys’ fees and legal expenses. At the Agent’s request, the Borrower shall assemble such personal property and make it available to the Agent at a place designated by the Agent which is reasonably convenient to both parties.

     (b) The Borrower, upon reasonable request by the Agent from time to time as may be necessary to protect Agent’s interest in the Security Assets, shall execute, acknowledge and deliver to the Agent one (1) or more separate security agreements, in form satisfactory to the Agent, covering all or any part of the Security Assets and will further execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any financing statement, affidavit, continuation statement or certificate or other document as the Agent may request in order to perfect, preserve, maintain, continue or extend the security interest under, and the priority of the Liens granted by, this Security Agreement and such security instrument. The Borrower further agrees to pay to the Agent (with funds provided by the Advances or by the Lessee for such purpose in accordance with the terms of the Operative Agreements) on demand all costs and expenses incurred by the Agent in connection with the preparation, execution, recording, filing and re-filing of any such document and all reasonable costs and expenses of any record searches for financing statements the Agent shall reasonably require. The filing of any financing or continuation statements in the records relating to personal property or chattels shall not be construed as in any way impairing the right of the Agent to proceed against any property encumbered by this Security Agreement.

13. Authority of the Agent.

     The Borrower acknowledges that the rights and responsibilities of the Agent under this Security Agreement with respect to any action taken by the Agent or the exercise or non-exercise by the Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Security Agreement shall be governed by the Credit Agreements, Section 8.6 of the Participation Agreement, intercreditor agreements among the Secured Parties and by such other agreements with respect thereto as may exist from time to time (until such time as all amounts due and owing to the Secured Parties and the Agent under the Operative Agreements have been paid in full), but the Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and the Borrower shall be under no obligation, or entitlement, to make any inquiry respecting such authority.

14. Notices.

     All notices required or permitted to be given under this Security Agreement shall be in writing and delivered as provided in Section 12.2 of the Participation Agreement.

9

15. Severability.

     Any provision of this Security Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.

16. Amendment in Writing; No Waivers; Cumulative Remedies.

     (a) None of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified except in accordance with the terms of Section 12.4 of the Participation Agreement and any intercreditor agreements among the Secured Parties.

     (b) No failure to exercise, nor any delay in exercising, on the part of the Agent, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Agent of any right or remedy hereunder on any one (1) occasion shall not be construed as a bar to any right or remedy which the Agent would otherwise have on any future occasion.

     (c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

17. Section Headings.

     The section headings used in this Security Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

18. Successors and Assigns.

     This Security Agreement shall be binding upon the successors of the Borrower, and the Borrower shall not assign any of its rights or obligations hereunder or with respect to any of the Security Assets without the prior written consent of the Agent. This Security Agreement shall inure to the benefit of the Secured Parties and their respective successors and assigns, in accordance with their respective interests herein.

19. The Borrower’s Waiver of Rights.

     Except as otherwise set forth herein, to the fullest extent permitted by law, the Borrower waives the benefit of all laws now existing or that may subsequently be enacted providing for (a) any appraisement before sale of any portion of the Security Assets, (b) any extension of the time for the enforcement of the collection of the indebtedness or the creation or extension of a period of redemption from any sale made in collecting such debt and (c) exemption of any

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portion of the Security Assets from attachment, levy or sale under execution or exemption from civil process. Except as otherwise set forth herein, to the fullest extent the Borrower may do so, the Borrower agrees that the Borrower will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, exemption, extension or redemption, or requiring foreclosure of this Security Agreement before exercising any other remedy granted hereunder and the Borrower, for the Borrower and its successors and assigns, and for any and all Persons ever claiming any interest in the Security Assets, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the Obligations and marshalling in the event of foreclosure of the Liens hereby created.

20. GOVERNING LAW.

     EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 12(a) HEREOF, THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE REQUIRED TO APPLY.

21. Obligations Are Without Recourse.

     The provisions of the Participation Agreement relating to limitations on liability are hereby incorporated by reference herein, mutatis mutandis.

22. Partial Release; Full Release.

     The Agent may (subject to the applicable provisions of the Operative Agreements) release for such consideration as it may require any portion of the Security Assets without (as to the remainder of the Security Assets) in any way impairing or affecting the Lien, security interest and priority herein provided for the Agent compared to any other Lien holder or secured party. Further, the Agent shall execute and deliver to the Borrower such documents and instruments as may be required to release the Lien and security interest created by this Security Agreement with respect to the Property as provided in Section 8.8 of the Participation Agreement or to grant the easements and permit the other matters provided for in Section 8.5 of the Participation Agreement.

23. Miscellaneous.

     (a) This Security Agreement is one (1) of the documents which create Liens and security interests that secure payment and performance of the Obligations. The Agent, at its election, may commence or consolidate in a single action all proceedings to realize upon all such Liens and security interests. The Borrower hereby waives (i) any objections to the commencement or continuation of an action to foreclose the Lien of this Security Agreement or exercise of any other remedies hereunder based on any action

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being prosecuted or any judgment entered with respect to the Obligations or any Liens or security interests that secure payment and performance of the Obligations and (ii) any objections to the commencement of, continuation of, or entry of a judgment in any such other action based on any action or judgment connected to this Security Agreement. In case of a foreclosure sale, the Security Assets may be sold, at the Agent’s election, in one (1) parcel or in more than one (1) parcel and the Agent is specifically empowered (without being required to do so, and in its sole and absolute discretion) to cause successive sales of portions of the Security Assets to be held.

     (b) THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE HEREIN, MUTATIS MUTANDIS.

24. Conflicts with Participation Agreement.

     Notwithstanding any other provision hereof, in the event of any conflict between the terms of this Security Agreement and the Participation Agreement, the terms of the Participation Agreement shall govern.

25. THE LESSEE AS A PARTY.

     THE LESSEE HAS EXECUTED THIS SECURITY AGREEMENT FOR THE PURPOSES OF SECTIONS 3 AND 11 HEREOF AND FOR THE PURPOSE OF SUBJECTING TO THE SECURITY INTEREST AND LIEN GRANTED HEREUNDER IN FAVOR OF THE AGENT FOR THE BENEFIT OF THE SECURED PARTIES ALL OF THE RIGHT, TITLE AND INTEREST OF THE LESSEE, IF ANY, IN AND TO THE SECURITY ASSETS TO SECURE THE PROMPT PAYMENT IN FULL OF ALL AMOUNTS OWING BY THE LESSEE FROM TIME TO TIME AND THE PERFORMANCE OF ALL OBLIGATIONS OF THE LESSEE FROM TIME TO TIME UNDER THE OPERATIVE AGREEMENTS. TO EFFECT THE FOREGOING, LESSEE HEREBY GRANTS TO THE AGENT (FOR THE BENEFIT OF THE SECURED PARTIES) A SECURITY INTEREST IN AND TO ALL OF THE RIGHT, TITLE AND INTEREST OF THE LESSEE, IF ANY, IN AND TO THE SECURITY ASSETS (TO THE EXTENT LESSEE, RATHER THAN THE BORROWER, IS DETERMINED TO HAVE ANY RIGHT, TITLE OR INTEREST THEREIN AND WITHOUT REGARD TO ANY LANGUAGE IN SECTION 2 OR THE DEFINITION OF “SECURITY ASSETS” OR ANY DEFINITION OF ANY ITEM CONSTITUTING THE SECURITY ASSETS WHICH OTHERWISE WOULD LIMIT THE SECURITY ASSETS TO THE RIGHT, TITLE AND INTEREST OF THE BORROWER THEREIN), TO SECURE THE PROMPT PAYMENT IN FULL OF ALL AMOUNTS OWING BY THE LESSEE FROM TIME TO TIME AND THE PERFORMANCE OF ALL OBLIGATIONS OF THE LESSEE UNDER THE OPERATIVE AGREEMENTS. THE LESSEE ACKNOWLEDGES AND AGREES THAT, UPON THE OCCURRENCE AND CONTINUANCE OF A LEASE EVENT OF DEFAULT, THE AGENT SHALL HAVE THE RIGHT TO EXERCISE ANY OR ALL OF ITS RIGHTS AND REMEDIES HEREUNDER AS AGAINST ANY SUCH RIGHT, TITLE OR INTEREST OF THE LESSEE IN OR TO THE SECURITY ASSETS.

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26. Counterparts.

     This Security Agreement may be executed in counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute one instrument.

27. Amendment and Restatement.

     The parties hereto hereby agree to amend and restate the Original Security Agreement (in regard to the Property) pursuant to the terms of this Security Agreement.

[signature page follows]

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     IN WITNESS WHEREOF, each of the undersigned has caused the Security Agreement to be duly executed and delivered as of the date first above written.

WACHOVIA DEVELOPMENT CORPORATION, as the Borrower
By:	/s/ Evander S. Jones, Jr.
Name:	Evander S. Jones, Jr.
Title:	Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION, as the Agent for the Secured Parties
By:	/s/ Weston R. Garrett
Name:	Weston R. Garrett
Title:	Vice President

Accepted and Agreed to:
HUMAN GENOME SCIENCES, INC.
By:	/s/ Steven C. Mayer
Name:		Steven C. Mayer
Title:		Senior Vice President and
		Chief Financial Officer

Amended and Restated Security Agreement
Human Genome Sciences, Inc.

EX-10.6 8 w88716exv10w6.htm ASSIGNMENT OF LIQUID COLLATERAL AGREEMENT

Exhibit 10.6

AMENDED AND RESTATED
ASSIGNMENT OF LIQUID COLLATERAL AGREEMENT

     THIS AMENDED AND RESTATED ASSIGNMENT OF LIQUID COLLATERAL ACCOUNT (as amended, modified, extended, supplemented and/or restated from time to time, the “Assignment”) is made as of June 30, 2003, by HUMAN GENOME SCIENCES, INC., a Delaware corporation (the “Pledgor”), to WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as agent for the Secured Parties (the “Agent”). Capitalized terms used herein but not otherwise defined shall have the meanings provided in the Participation Agreement (hereinafter defined). All terms which are defined in this Assignment are subject to the rules of usage of such terms set forth in Appendix A to the Participation Agreement.

RECITALS

     1.     The Pledgor is a party to the First Union Liquid Collateral Agreement dated as of November 7, 2001 (as amended, modified, extended, supplemented and/or restated from time to time, the “Original Assignment of Liquid Collateral”) among the Pledgor, Genome Statutory Trust 2001A and Wachovia Bank, National Association (as successor to First Union National Bank).

     2.     The Pledgor is a party to the Amended and Restated Participation Agreement dated as of June 30, 2003 (as amended, modified, extended, supplemented and/or restated from time to time, the “Participation Agreement”) among the Pledgor, Wachovia Development Corporation, Variable Funding Capital Corporation, the various banks and other financial institutions which are parties thereto from time to time as investors, Wachovia Securities, LLC and Wachovia Bank National Association.

     3.     A lease financing facility has been extended in favor of the Pledgor pursuant to the Participation Agreement and the other Operative Agreements.

     4.     The Secured Parties have required the Pledgor, and the Pledgor has agreed, to execute this Assignment in favor of the Agent with respect to various deposits of Liquid Collateral by the Pledgor.

     5.     The parties hereto wish to amend and restate the Original Assignment of Liquid Collateral, as it relates to the Property, pursuant to the terms of this Assignment.

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

Creation of Security Interest

     Section 1.1     To secure the prompt payment and performance in full when and as due, whether by lapse of time or otherwise, of the Obligations of the Pledgor, the Pledgor hereby assigns, mortgages, conveys, pledges, hypothecates and delivers to the Agent, for the benefit of the Secured Parties, and hereby grants to the Agent, for the benefit of the Secured Parties, a security interest in, all right, title and interest of the Pledgor in and to:

     (a)     Account number         maintained by the Intermediary in the name of the Pledgor or for the benefit of the Pledgor, and all successor and replacement accounts, regardless of the numbers of such accounts or the offices at which such accounts are maintained (collectively, any or all of the foregoing may be referred to herein as the “Liquid Collateral Account”) and all rights of the Pledgor in connection with the Liquid Collateral Account, and all investment property, security entitlements, financial assets, certificated securities, uncertificated securities (including mutual funds shares), money, cash, currency, deposit accounts, instruments, general intangibles, and all other investments or property of any sort now or hereafter held, maintained or administered in the Liquid Collateral Account in the name of or for the benefit of the Pledgor.

     (b)     All rollovers, renewals or reinvestments of any of the foregoing property.

     (c)     All stock or conversion rights, rights to subscribe, liquidation dividends or preferences, stock dividends, dividends, rights to interest, interest payments, dividends paid in stock, rights under hedge or derivative transactions, equity swaps, caps, floors or collars, new securities or other property which the Pledgor is or may hereafter become entitled to receive on account of or related to any of the foregoing property.

     (d)     The proceeds (including, without limitation, insurance proceeds from the Federal Deposit Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the Securities Investor Protection Corporation or any other insurance company), increase and products of any of the foregoing or replacements thereof or substitutions therefor (any and all of the foregoing items set forth in this Section 1.1(a)-(d) and all proceeds thereof being hereinafter referred to as the “Liquid Collateral”).

     Section 1.2     The Pledgor will execute and deliver to the Agent, concurrently with the execution of this Assignment, and at any time or times hereafter at the request of the Agent, all assignments, conveyances, assignment statements, financing statements, renewal financing statements, security agreements, affidavits, notices and all other agreements, instruments and documents that the Agent may reasonably request, and will execute all necessary endorsements in order to perfect and maintain the security interests and liens granted herein by the Pledgor to the Agent and in order to fully consummate all of the transactions contemplated herein and under the Operative Agreements. In addition, the Pledgor represents and warrants that its name is as set forth on the signature page hereto and that the location of the Pledgor for purposes of the

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Uniform Commercial Code is the State of Delaware. The Pledgor covenants to provide written notice to the Agent prior to the date of changing its name and/or the location of the Pledgor for purposes of the Uniform Commercial Code. In addition, the Pledgor authorizes the Agent to file Uniform Commercial Code financing statements and renewal financing statements without the Pledgor’s signature as the Agent may reasonably deem necessary to perfect and maintain the security interests granted herein. In furtherance of the foregoing, the Pledgor hereby appoints the Agent as its attorney-in-fact for the purpose of making and executing any of the foregoing endorsements and making and filing any such financing statements, and executing or filing documents and agreements. The foregoing power of attorney is a power coupled with an interest and shall be irrevocable until payment and performance in full of the Obligations of the Pledgor.

ARTICLE II

Priority of Security Interests

     Section 2.1     The Pledgor warrants, represents and covenants that the pledge and security interest created in Section 1.1 hereof is a first-priority security interest in favor of the Agent, for the benefit of the Secured Parties, and shall constitute at all times a valid and perfected security interest in and upon all of the Liquid Collateral and that said security interest in the Liquid Collateral shall not become subordinate or junior to the security interests, liens or claims of any other person, firm or corporation, including without limitation the United States or any department, agency or instrumentality thereof, or any state, county or local governmental agency. The Pledgor shall not (without the prior written approval of the Agent, acting upon the direction of the Majority Secured Parties) grant a security interest in or permit a lien or encumbrance upon the Liquid Collateral to anyone except the Agent as long as all or any portion of the Obligations of the Pledgor remain unsatisfied.

ARTICLE III

Default

     Section 3.1     An event of default shall exist under the terms of this Assignment upon the existence of a Lease Event of Default, an Agency Agreement Event of Default, a Punch List Liquid Collateral Agreement Event of Default or any other Event of Default attributable to the Pledgor (each such occurrence may be referred to herein as a “Liquid Collateral Agreement Event of Default”).

     Section 3.2     Upon the occurrence of a Liquid Collateral Agreement Event of Default and during the continuation thereof, the Agent, for and on behalf of the Secured Parties, shall have, in respect of the Liquid Collateral, (a) the right, immediately and without further action by the Agent, to set off against the outstanding Obligations of the Pledgor all amounts then due and payable in the Liquid Collateral Account, (b) all the rights and remedies contained in this Assignment, the Operative Agreements or permitted by law and (c) all the rights and remedies of a secured party under the Uniform Commercial Code, all of which shall be cumulative to the

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extent permitted by law. Exercise by the Agent of the remedies contained herein shall not limit or affect any other remedies available to the Agent.

     Section 3.3     If at any time or times hereafter the Agent employs counsel to prepare or consider waivers or consents or to intervene, file a petition, answer, motion or other pleading in any suit or proceeding related to this Assignment or the other Operative Agreements, or relating to any Liquid Collateral, or to protect, take possession of, or liquidate any Liquid Collateral, or to attempt to enforce any security interest or lien in any Liquid Collateral, or to enforce any rights of the Agent, then in any of such events, all of the reasonable attorneys’ fees arising from such services, and any expenses, costs and charges relating thereto, shall become a part of the Obligations of the Pledgor secured by the Liquid Collateral and payable on demand.

     Section 3.4     The Agent’s failure at any time or times hereafter to require strict performance by the Pledgor of any of the provisions, warranties, terms and conditions contained in this Assignment shall not waive, affect or diminish any right of the Agent at any time or times hereafter to demand strict performance therewith and with respect to any other provisions, warranties, terms and conditions contained in this Assignment.

ARTICLE IV

Access/Release of Liquid Collateral

     Section 4.1     Although the Liquid Collateral Account will be maintained in the name of the Pledgor, the Pledgor shall not have access thereto or to any of the funds or other Liquid Collateral therein, and the Agent shall have exclusive control and authority over the Liquid Collateral Account and all such funds and other Liquid Collateral therein except as expressly provided in Article V.

ARTICLE V

Initial Investment and Replenishment of the Liquid Collateral Account;
Investment Parameters for Liquid Collateral

     Section 5.1     As of the date of this Assignment, the Pledgor shall pledge to the Agent as security for the Obligations of the Pledgor by delivery to the Intermediary for deposit (and shall request the Intermediary to so deposit) into the Liquid Collateral Account, Liquid Collateral in an amount as specified in Section 5.11(a) of the Participation Agreement.

     After the date of this Assignment, the Pledgor shall comply in all respects with the provisions of Section 5.11 of the Participation Agreement, including without limitation those regarding (a) the pledging of additional Liquid Collateral from time to time, (b) the scheduled reporting regarding the Liquid Collateral and (c) each of the other matters as described in Section 5.11 of the Participation Agreement.

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     Section 5.2     Except upon the occurrence of a Liquid Collateral Agreement Event of Default and during the continuation thereof, the Agent shall consult from time to time with the Pledgor regarding the investment of all amounts in the Liquid Collateral Account and shall invest such amounts as the Pledgor or its designated representative may request in writing from time to time; provided, upon the occurrence and during the continuation of a Liquid Collateral Agreement Event of Default, the Agent shall make all determinations regarding the investment and reinvestment of amounts in the Liquid Collateral Account; provided, further, that all such amounts shall be invested at all times in Permitted Investments.

ARTICLE VI

Miscellaneous

     Section 6.1     THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE ACCOUNT IS LOCATED ARE REQUIRED TO APPLY.

     Section 6.2     This Assignment shall be binding upon and inure to the benefit of the Pledgor, the Agent and their respective successors and assigns permitted in accordance with the provisions of this Assignment and the other Operative Agreements.

     Section 6.3     This Assignment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Assignment to produce or account for more than one such counterpart.

     Section 6.4     If any provision of this Assignment is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions hereof shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provision.

     Section 6.5     The parties hereto hereby agree to amend and restate the Original Assignment of Liquid Collateral, as it relates to the Property, pursuant to this Assignment.

[remainder of page intentionally left blank]

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     The Pledgor has caused a counterpart of this Assignment to be duly executed and delivered as of the date first above written.

HUMAN GENOME SCIENCES, INC., as the Pledgor
By:	/s/ Steven C. Mayer
Name:		Steven C. Mayer
Title:		Senior Vice President and
		Chief Financial Officer

Accepted and agreed as of the date
first above written.

WACHOVIA BANK, NATIONAL
ASSOCIATION, as the Agent

By:	/s/ Weston R. Garrett
Name:		Weston R. Garrett
Title:		Vice President

Amended and Restated Assignment of Liquid Collateral Account
Human Genome Sciences, Inc.

EX-10.7 9 w88716exv10w7.htm EMPLOYEE STOCK PURCHASE PLAN

Exhibit 10.7

HUMAN GENOME SCIENCES, INC.
EMPLOYEE STOCK PURCHASE PLAN
(As Amended and Restated Effective May 21, 2003)

     This Human Genome Sciences, Inc. Employee Stock Purchase Plan (this “PLAN”) provides eligible employees of Human Genome Sciences, Inc. (the “CORPORATION”) and certain of its subsidiaries with opportunities to purchase shares of the Corporation’s Common Stock, $0.01 par value per share (the “COMMON STOCK”). The Plan is intended to benefit the Corporation by increasing the employees’ interest in the Corporation’s growth and success and encouraging employees to remain in the employ of the Corporation or its participating subsidiaries. The Plan is intended to constitute an “employee stock purchase plan” within the meaning of section 423 of the Internal Revenue Code of 1986, as amended (the “CODE”), and shall be so applied and interpreted.

     1.       Shares Subject to the Plan. Subject to adjustment as provided herein, the aggregate number of shares of Common Stock that may be made available for purchase under the Plan is 250,000 shares. The shares purchased under the Plan may, in the discretion of the Board of Directors of the Corporation (the “BOARD”), be authorized but unissued shares of Common Stock, shares purchased on the open market, or shares from any other proper source.

     2.       Administration. The Plan will be administered by the Board or by a committee appointed by the Board (the “ADMINISTRATOR”).. The Administrator has authority to interpret the Plan, to make, amend and rescind all rules and regulations for the administration and operation of the Plan, and to make all other determinations necessary or desirable in administering and operating the Plan, all of which will be final and conclusive. No member of the Administrator shall be liable for any action or determination made in good faith with respect to the Plan.

     3.       Eligibility. All employees of the Corporation, including directors who are employees, and all employees of any subsidiary of the Corporation (as defined in Code section 424(f)), now or hereafter existing, that is designated by the Administrator from time to time as a participating employer under the Plan (a “DESIGNATED SUBSIDIARY”), are eligible to participate in the Plan, subject to such further eligibility requirements as may be specified by the Administrator consistent with Code section 423.

     4.       Options to Purchase Common Stock.

     (a)     Options (“OPTIONS”) will be granted pursuant to the Plan to each eligible employee on the first day on which the National Association of Securities Dealers Automated Quotation (“NASDAQ”) system is open for trading (“TRADING DAY”) on or after January 1 of each year commencing on or after the Effective Date (as defined in Section 18), or such other date specified by the Administrator. Each Option will terminate on the last Trading Day of a period specified by the Administrator (each such period referred to herein as an “OPTION PERIOD”). No Option Period shall be longer than 27 months in duration. Unless the Administrator determines otherwise, subsequent Option Periods of equal duration will follow consecutively thereafter, each commencing on the first Trading Day immediately after the expiration of the preceding Option Period.

     (b)     An individual must be employed as an eligible employee by the Corporation or a Designated Subsidiary on the first Trading Day of an Option Period in order to be granted an

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Option for that Option Period. However, the Administrator may designate any subsequent Trading Day(s) (each such designated Trading Day referred to herein as an “INTERIM TRADING DAY”) in an Option Period upon which Options will be granted to eligible employees who first commence employment with, or first become eligible employees of, the Corporation or a Designated Subsidiary after the first Trading Day of the Option Period. In such event, the Interim Trading Day shall constitute the first Trading Day of the Option Period for all Options granted on such day for all purposes under the Plan.

     (c)     Each Option represents a right to purchase on the last Trading Day of the Option Period or on one or more Trading Days within the Option Period designated by the Administrator (each such designated Trading Day and the last Trading Day of the Option Period, a “PURCHASE DATE”), at the Purchase Price hereinafter provided for, shares of Common Stock up to such maximum number of shares specified by the Administrator on or before the first day of the Option Period. All eligible employees granted Options under the Plan for an Option Period shall have the same rights and privileges with respect to such Options. The purchase price of each share of Common Stock (the “PURCHASE PRICE”) subject to an Option will be determined by the Administrator, in its discretion, on or before the beginning of the Option Period; provided, however, that the Purchase Price for an Option with respect to any Option Period shall never be less than the lesser of 85 percent of the Fair Market Value of the Common Stock on (i) the first Trading Day of the Option Period or (ii) the Purchase Date, and shall never be less than the par value of the Common Stock.

     (d)     For purposes of the Plan, “FAIR MARKET VALUE” on a Trading Day means the average of the high and low sale prices per share of Common Stock as reflected on the principal consolidated transaction reporting system for securities listed on any national securities exchange or other market quotation system on which the Common Stock may be principally listed or quoted or, if there are no transactions on a Trading Day, then such average for the preceding Trading Day upon which transactions occurred.

     (e)     Notwithstanding any provision in this Plan to the contrary, no employee shall be granted an Option under this Plan if such employee, immediately after the Option would otherwise be granted, would own 5% or more of the total combined voting power or value of the stock of the Corporation or any subsidiary. For purposes of the preceding sentence, the attribution rules of Code section 424(d) will apply in determining the stock ownership of an employee, and all stock which the employee has a contractual right to purchase will be treated as stock owned by the employee.

     (f)     Notwithstanding any provision in this Plan to the contrary, no employee may be granted an Option which permits his rights to purchase Common Stock under this Plan and all other stock purchase plans of the Corporation and its subsidiaries to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined at the time such Option is granted) for each calendar year in which the Option is outstanding at any time, as required by Code section 423.

     5.       Payroll Deductions and Cash Contributions.

     To facilitate payment of the Purchase Price of Options, the Administrator, in its discretion, may permit eligible employees to authorize payroll deductions to be made on each payday during the Option Period, and/or to contribute cash or cash-equivalents to the Corporation, up to a maximum amount determined by the Administrator. The Corporation will maintain bookkeeping accounts for all employees who authorize payroll deduction or make cash contributions. Interest will not be paid on any employee accounts, unless the Administrator determines otherwise. The Administrator shall establish rules and procedures, in its discretion,

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from time to time regarding elections to authorize payroll deductions, changes in such elections, timing and manner of cash contributions, and withdrawals from employee accounts. Amounts credited to employee accounts on the Purchase Date will be applied to the payment of the Purchase Price of outstanding Options pursuant to Section 6 below.

     6.       Exercise of Options; Purchase of Common Stock. Options shall be exercised at the close of business on the Purchase Date. In accordance with rules established by the Administrator, the Purchase Price of Common Stock subject to an option shall be paid (i) from funds credited to an eligible employee’s account, (ii) by a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System, or (iii) by such other method as the Administrator shall determine from time to time. Options shall be exercised only to the extent the purchase price is paid with respect to whole shares of Common Stock, unless the Administrator otherwise provides.. Any balance remaining in an employee’s account on a Purchase Date after such purchase of Common Stock will be carried forward automatically into the employee’s account for the next Purchase Date or Option Period, as applicable, unless the employee is not an eligible employee with respect to the next Purchase Date or Option Period, as applicable, in which case such amount will be promptly refunded.

     7.       Issuance of Certificates. As soon as practicable following each Purchase Date, certificates representing shares of Common Stock purchased under the Plan will be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Administrator’s sole discretion) in the street name of a brokerage firm, bank or other nominee holder designated by the employee or the Administrator. In the alternative, the Administrator may provide for uncertificated, book entry issuance of the shares of Common Stock purchased under the Plan.

     8.       Rights on Retirement, Death, Termination of Employment, or Termination of Status as Eligible Employee. In the event of an employee’s termination of employment or termination of status as an eligible employee prior to a Purchase Date (whether as a result of the employee’s voluntary or involuntary termination, retirement, death or otherwise), any outstanding Option granted to him will immediately terminate, no further payroll deduction will be taken from any pay due and owing to the employee and the balance in the employee’s account will be paid to the employee or, in the event of the employee’s death, (a) to the executor or administrator of the employee’s estate or (b) if no such executor or administrator has been appointed to the knowledge of the Administrator, to such other person(s) as the Administrator may, in its discretion, designate. If, prior to a Purchase Date, the Designated Subsidiary by which an employee is employed will cease to be a subsidiary of the Corporation, or if the employee is transferred to a subsidiary of the Corporation that is not a Designated Subsidiary, the employee will be deemed to have terminated employment for the purposes of this Plan.

     9.       Optionees Not Stockholders. Neither the granting of an Option to an employee nor the deductions from his pay will constitute such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to him.

     10.     Options Not Transferable. Options under this Plan are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.

     11.     Withholding of Taxes. To the extent that a participating employee realizes ordinary income in connection with the purchase, sale or other transfer of any shares of Common Stock purchased under the Plan or the crediting of interest to the employee’s account, the Corporation may withhold amounts needed to cover such taxes from any payments otherwise

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due and owing to the participating employee or from shares that would otherwise be issued to the participating employee hereunder. Any participating employee who sells or otherwise transfers shares purchased under the Plan must, within 30 days of such sale or transfer, notify the Corporation in writing of the sale or transfer.

     12.     Application of Funds. All funds received or held by the Corporation under the Plan may be used for any corporate purpose until applied to the purchase of Common Stock and/or refunded to participating employees and can be commingled with other general corporate funds. Participating employees’ accounts will not be segregated.

     13.     Effect of Changes in Capitalization.

     (a)     Changes in Stock. If the number of outstanding shares of Common Stock is increased or decreased or the shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Corporation by reason of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Corporation occurring after the effective date of the Plan, the number and kind of shares that may be purchased under the Plan shall be adjusted proportionately and accordingly by the Corporation. In addition, the number and kind of shares for which Options are outstanding shall be similarly adjusted so that the proportionate interest, if any, of a participating employee immediately following such event shall, to the extent practicable, be the same as immediately prior to such event. Any such adjustment in outstanding Options shall not change the aggregate Purchase Price payable by a participating employee with respect to shares subject to such Options, but shall include a corresponding proportionate adjustment in the Purchase Price per share.

     (b)     Reorganization in Which the Corporation Is the Surviving Corporation. Subject to Subsection (c) of this Section 13, if the Corporation shall be the surviving corporation in any reorganization, merger or consolidation of the Corporation with one or more other corporations, all outstanding Options under the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Common Stock subject to such Options would have been entitled immediately following such reorganization, merger or consolidation, with a corresponding proportionate adjustment of the Purchase Price per share so that the aggregate Purchase Price thereafter shall be the same as the aggregate Purchase Price of the shares subject to such Options immediately prior to such reorganization, merger or consolidation.

     (c)     Reorganization in Which the Corporation Is Not the Surviving Corporation or Sale of Assets or Stock. Upon any dissolution or liquidation of the Corporation, or upon a merger, consolidation or reorganization of the Corporation with one or more other corporations in which the Corporation is not the surviving corporation, or upon a sale of all or substantially all of the assets of the Corporation to another corporation, or upon any transaction (including, without limitation, a merger or reorganization in which the Corporation is the surviving corporation) approved by the Board that results in any person or entity owning more than 50 percent of the combined voting power of all classes of stock of the Corporation, the Plan and all Options outstanding hereunder shall terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of the Plan and/or the assumption of the Options theretofore granted, or for the substitution for such Options of new Options covering the stock of a successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and exercise prices, in which event the Plan and Options theretofore granted shall continue in the manner and under the terms so provided. In the event of any such termination of the Plan, the Option Period shall be deemed to have ended on the last Trading Day prior to such termination, and, unless the Administrator determines otherwise in its

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discretion, each participating employee shall have the ability to choose either to (i) have all monies then credited to such employee’s account (including interest, to the extent any has accrued) returned to such participating employee or (ii) exercise his Options in accordance with Section 6 on such last Trading Day; provided, however, that if a participating employee does not exercise his right of choice, his Options shall be deemed to have been automatically exercised in accordance with Section 6 on such last Trading Day. The Administrator shall send written notice of an event that will result in such a termination to all participating employees not later than the time at which the Corporation gives notice thereof to its stockholders.

     (d)     Adjustments. Adjustments under this Section 13 related to stock or securities of the Corporation shall be made by the Committee, whose determination in that respect shall be final, binding, and conclusive.

     (e)     No Limitations on Corporation. The grant of an Option pursuant to the Plan shall not affect or limit in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.

     14.     Amendment of the Plan. The Board may at any time, and from time to time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the stockholders of the Corporation is required by Code section 423, such amendment will not be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Code section 423 unless expressly so provided by the Board.

     15.     Insufficient Shares. In the event that the total number of shares of Common Stock specified in elections to be purchased under any Option plus the number of shares purchased under all Options previously granted under this Plan exceeds the maximum number of shares issuable under this Plan, the Administrator will allot the shares then available on a pro rata basis. Any funds then remaining in a participating employee’s account after purchase of the employee’s pro-rata number of shares will be refunded.

     16.     Termination of the Plan. This Plan may be terminated at any time by the Board. Except as otherwise provided in Section 13(c) hereof, upon termination of this Plan all outstanding Options shall immediately terminate and amounts in the employees’ accounts will be promptly refunded.

     17.     Governmental Regulations.

     (a)     The Corporation’s obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange or quotation on Nasdaq and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.

     (b)     The Plan will be governed by the laws of the State of Delaware, without regard to the conflict of laws principles thereof, except to the extent that such law is preempted by federal law.

     18.     Effective Date. The Plan became effective as of July 1, 2000 (the “EFFECTIVE DATE”), subject to approval of the Plan by the stockholders of the Corporation within 12 months of the Effective Date, and shall continue in effect, as amended and restated herein, until further amended or terminated by the Board.

-5- EX-31.1 10 w88716exv31w1.htm CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Exhibit 31.1

I, William A. Haseltine, Ph.D., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2003 of Human Genome Sciences, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2003

/s/ William A. Haseltine, Ph.D.

William A. Haseltine, Ph.D.
Chairman and Chief Executive Officer

EX-31.2 11 w88716exv31w2.htm CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Exhibit 31.2

I, Steven C. Mayer, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2003 of Human Genome Sciences, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions)

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 11, 2003

/s/ Steven C. Mayer

Steven C. Mayer
Senior Vice President and Chief Financial Officer

EX-32.1 12 w88716exv32w1.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Exhibit 32.1

Certification of Principal Executive Officer
Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)

I, William A. Haseltine, Ph.D., Chairman and Chief Executive Officer (principal executive officer) of Human Genome Sciences, Inc. (the “Registrant”), certify, to the best of my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended June 30, 2003 of the Registrant (the “Report”), that:

     (1)  The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ William A. Haseltine, Ph.D. Name: William A. Haseltine, Ph.D.
Date: August 11, 2003

EX-32.2 13 w88716exv32w2.htm CERIFICATION OF CHIEF FINANCIAL OFFICER

Exhibit 32.2

Certification of Principal Financial Officer
Pursuant to 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)

I, Steven C. Mayer, Chief Financial Officer (principal financial officer) of Human Genome Sciences, Inc. (the “Registrant”), certify, to the best of my knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period ended June 30, 2003 of the Registrant (the “Report”), that:

     (1)  The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

     (2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Steven C. Mayer Name: Steven C. Mayer
Date: August 11, 2003

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