Docstoc

Whereas, Pida, Under A Loan Agreement - DESTINATION MATERNITY CORP - 12-18-1996

Document Sample
Whereas, Pida, Under A Loan Agreement - DESTINATION MATERNITY CORP - 12-18-1996 Powered By Docstoc
					OPEN-END MORTGAGE (This Mortgage secures future advances) THIS INDENTURE made this 4th day of April, 1996, effective as of the 4th day of April, 1996, between PIDC FINANCING CORPORATION, a nonprofit corporation organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania (the "Mortgagor"), and THE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY, a public body corporate and politic, organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania, having its principal place of business in Harrisburg, Pennsylvania ("PIDA"). WHEREAS, PIDA, under a Loan Agreement bearing even date herewith (the "Loan Agreement"), incorporated herein by reference thereto and made a part hereof, has agreed to lend the Mortgagor the principal sum of Two Million Dollars ($2,000,000) (the "Loan") upon terms and subject to conditions as set forth therein; WHEREAS, the Mortgagor under a Note bearing even date herewith (the "Note"), incorporated herein by reference thereto and made a part hereof, is obligated to pay unto PIDA on or before the first day of May, 2011, the principal sum of Two Million Dollars ($2,000,000), together with interest thereon, lawful money of the United States of America in the manner provided in the Note and in the Loan Agreement, and to perform all of the provisions of the Note and this Mortgage, as therein and herein set forth; and WHEREAS, PlDA's agreement to make the Loan has been made subject to and in reliance upon execution and delivery of the Loan Documents; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that the Mortgagor in consideration of the principal indebtedness, and to secure the payment thereof and all other sums due or to become due under the Loan Documents, including without limitation the Note, the Loan Agreement, this Mortgage and the Assumption Agreement (the "Indebtedness") and the performance of all other provisions of the Loan Documents, intending to be legally bound by these presents, does hereby grant, bargain, sell, convey, release, alien, confirm and assign unto PIDA, its successors and assigns, all that certain parcel of land fully and accurately described on Exhibit A, attached hereto and made a part hereof. TOGETHER with all and singular the buildings and improvements erected or to be erected thereon, streets, alleys, passages, ways, waters, watercourses, rights, liberties, privileges, hereditaments and appurtenances whatsoever, thereunto belonging or in anywise appertaining, and the reversions and remainders and rents, issues and profits thereof, including all income arising therefrom and all insurance proceeds and proceeds of condemnation awards (collectively, the "Premises").

TO HAVE AND TO HOLD the Premises hereby granted or mentioned and intended so to be unto PIDA, its successors and assigns, to and for the only proper use and behoof of PIDA, its successors and assigns forever. PROVIDED, HOWEVER, that if there shall be and is paid PIDA the Indebtedness together with interest thereon and any other sums properly payable under the terms of the Loan Documents, on the date and in the manner provided in the Loan Documents, and all the other covenants and promises herein and therein contained are kept by the particular parties subject thereto, then and from thenceforth this Mortgage and the estate hereby created, granted, transferred and assigned shall be void, but otherwise shall remain in full force and effect. AND THE MORTGAGOR HEREBY FURTHER REPRESENTS, COVENANTS AND AGREES AS FOLLOWS: 1. The Mortgagor has good, valid and marketable title to the Premises. The Mortgagor has the right, full power and lawful authority to grant, bargain, sell, convey, assign, transfer, mortgage, pledge, set over and confirm the same to PIDA in the manner and form herein done. The Premises are free and clear of all liens and encumbrances

TO HAVE AND TO HOLD the Premises hereby granted or mentioned and intended so to be unto PIDA, its successors and assigns, to and for the only proper use and behoof of PIDA, its successors and assigns forever. PROVIDED, HOWEVER, that if there shall be and is paid PIDA the Indebtedness together with interest thereon and any other sums properly payable under the terms of the Loan Documents, on the date and in the manner provided in the Loan Documents, and all the other covenants and promises herein and therein contained are kept by the particular parties subject thereto, then and from thenceforth this Mortgage and the estate hereby created, granted, transferred and assigned shall be void, but otherwise shall remain in full force and effect. AND THE MORTGAGOR HEREBY FURTHER REPRESENTS, COVENANTS AND AGREES AS FOLLOWS: 1. The Mortgagor has good, valid and marketable title to the Premises. The Mortgagor has the right, full power and lawful authority to grant, bargain, sell, convey, assign, transfer, mortgage, pledge, set over and confirm the same to PIDA in the manner and form herein done. The Premises are free and clear of all liens and encumbrances except those of record which have been previously disclosed in writing to PIDA. This Mortgage is and shall be subordinate in lien and in payment only to that certain mortgage in the principal sum of $4,094,684.93 encumbering the Premises given to MERIDIAN BANK, dated September 28, 1995 which principal sum shall be reduced to the sum of $4,000,000 on the same date hereof (the "Bank Mortgage"). The Mortgagor will warrant and defend the rights and title of PIDA to all of the Premises against all claims, except the Bank Mortgage. 2. The proceeds of the Note secured hereby shall be used solely for the purpose of paying a part of the cost of establishing an industrial development project (the "Project") to be purchased by MOTHERS WORK, INC. (the "Industrial Occupant") pursuant to the Premises Agreement. The Mortgagor represents and warrants that no default has occurred under the Premises Agreement on the part of Mortgagor or on the part of Industrial Occupant of which Mortgagor has knowledge. 3. The Mortgagor will perform promptly all the terms, covenants, and conditions required under the Premises Agreement, and the Mortgagor will do or cause to be done all things necessary to preserve unimpaired its rights thereunder and will immediately notify PIDA in writing of any default under the Agreement. 4. The Mortgagor will immediately do or cause to be done from time to time all things necessary to maintain and preserve its corporate existence, rights, franchises and privileges and will duly observe, conform, obey and comply with or will cause due observation, conformance. obedience and compliance with all requirements of any court or governmental authority relative to the Premises. The Mortgagor shall duly and punctually pay, or cause to be paid, the Indebtedness, and at the time and times and in the manner as provided in and by the Loan Documents, and shall perform all other agreements and provisions hereof and thereof, and pay when due all other obligations and debts hereby secured. The Mortgagor shall duly and punctually pay, or cause to be paid, all amounts secured by the Bank Mortgage and shall duly and punctually perform or cause to be performed in accordance with the terms of the Bank Mortgage, the Note secured thereby and any other obligations undertaken in connection therewith. 2

The Mortgagor will duly and promptly pay and discharge, as the same shall become due and payable and before they become delinquent, all taxes, water and sewer rents, assessments and other governmental charges, levied or assessed or imposed upon or against the property mortgaged hereby or upon the rents, issues, income and profits therefrom so as to prevent the same from becoming or being an enforceable lien or claim against the property mortgaged hereby or the interest of the Mortgagor having a priority over the lien of this Mortgage or the obligations of Mortgagor to PIDA under the Note or the Loan Agreement. Upon request, the Mortgagor will furnish, or will cause to be furnished to PIDA, not less than fifteen (15) days prior to the date on which payment of the same would become delinquent, receipts or other evidence satisfactory to PIDA of the payment of all such taxes, rates, assessments and other governmental charges.

The Mortgagor will duly and promptly pay and discharge, as the same shall become due and payable and before they become delinquent, all taxes, water and sewer rents, assessments and other governmental charges, levied or assessed or imposed upon or against the property mortgaged hereby or upon the rents, issues, income and profits therefrom so as to prevent the same from becoming or being an enforceable lien or claim against the property mortgaged hereby or the interest of the Mortgagor having a priority over the lien of this Mortgage or the obligations of Mortgagor to PIDA under the Note or the Loan Agreement. Upon request, the Mortgagor will furnish, or will cause to be furnished to PIDA, not less than fifteen (15) days prior to the date on which payment of the same would become delinquent, receipts or other evidence satisfactory to PIDA of the payment of all such taxes, rates, assessments and other governmental charges. 5. The Mortgagor shall keep all buildings and improvements now or hereafter erected upon the Premises insured for the benefit of PIDA under an all-risk hazard insurance policy covering physical loss or damage including fire and extended coverage, collapse, liquid damage, flood (to the extent required below), earthquake and comprehensive boiler/machinery, written on a replacement cost basis in an amount not less than the full insurable value of the property mortgaged hereby (excluding (on fire and extended coverage only) foundations and other parts below the surface of the lowest floor), as determined, upon request of PIDA, not more than once annually by an appraiser or rating bureau satisfactory to PIDA. In addition, the aforesaid policy shall have attached thereto, or the Mortgagor shall provide or cause to be provided by separate policy, business interruption insurance, insuring all fixed charges of the Industrial Occupant (or any other person or entity that may from time to time be the Mortgagor's lessee or purchaser of the mortgaged premises), including the amount necessary to repay this Mortgage, for a period of not less than one year, such insurance to be acceptable to PIDA. During the period of construction of the Project on the Premises, the Mortgagor shall maintain builder's risk insurance in an amount satisfactory to PIDA and shall require its contractor to maintain worker's compensation insurance. PIDA shall receive copies of all of said policies. PIDA shall receive copies of all of said policies upon the execution of this Mortgage and upon each renewal, expansion or modification thereof, together with a current Acord 27 Evidence of Property Insurance Certificate. Any modification of such insurance policy must be approved by PIDA in writing prior to the effective date of such modification. PIDA may settle all claims under all such policies except workers compensation and may demand, receive and receipt for all moneys becoming payable thereunder. The proceeds under any policy shall be paid by the insurer to Mortgagor and PIDA as their respective interests may appear, and PIDA in its discretion may apply the amount so collected toward the payment of the Indebtedness or toward the alteration, reconstruction, repair or restoration of the damaged portion of the Premises or any portion thereof. The Mortgagor shall prepay the premiums for all such insurance for at least one (1) month in advance and thereafter deliver to PIDA evidence of payment of all premiums due on such insurance together with certificates of such insurance at least thirty (30) days before payment is due. The Mortgagor shall also secure such certificates from public officials as are available for the purpose or otherwise demonstrate to the satisfaction of PIDA that the Premises is not located within an area identified by Federal Emergency Management Agency as having "special flood hazards," as such term is used in the National Flood Insurance Act of 1968, as amended and supplemented by The Flood Disaster Protection Act of 1973, and in regulations, interpretations and rulings thereunder or in a zoned flood 3

plain or flood hazard area as determined by local findings, determinations, ordinances, regulations or rulings, and if located therein, the Mortgagor shall secure the amount of flood insurance required by PIDA in its discretion and demonstrate payment of all premiums due therefor. All insurance policies described in this Section 5 shall be written by insurance companies licensed to do business within the Commonwealth of Pennsylvania and satisfactory to PIDA. While this Mortgage is in effect, the Mortgagor shall also maintain worker's compensation insurance (containing a stop gap endorsement) and public liability on the Premises in amounts satisfactory to PIDA and shall deliver copies of such policies to PIDA. Insurance carried in accordance with this Section 5 shall be endorsed to provide (a) With respect to all liability insurance policies, PIDA is included as additional insured, with the understanding that any obligation imposed upon Mortgagor (including without limitation, the liability to pay premiums) shall be the sole obligation of Mortgagor and not that of PIDA. (b) Property and business interruption insurance policies shall include a standard lender's loss payable endorsement in favor of PIDA. All coverage shall be written with a valid agreed amount endorsement and in a

plain or flood hazard area as determined by local findings, determinations, ordinances, regulations or rulings, and if located therein, the Mortgagor shall secure the amount of flood insurance required by PIDA in its discretion and demonstrate payment of all premiums due therefor. All insurance policies described in this Section 5 shall be written by insurance companies licensed to do business within the Commonwealth of Pennsylvania and satisfactory to PIDA. While this Mortgage is in effect, the Mortgagor shall also maintain worker's compensation insurance (containing a stop gap endorsement) and public liability on the Premises in amounts satisfactory to PIDA and shall deliver copies of such policies to PIDA. Insurance carried in accordance with this Section 5 shall be endorsed to provide (a) With respect to all liability insurance policies, PIDA is included as additional insured, with the understanding that any obligation imposed upon Mortgagor (including without limitation, the liability to pay premiums) shall be the sole obligation of Mortgagor and not that of PIDA. (b) Property and business interruption insurance policies shall include a standard lender's loss payable endorsement in favor of PIDA. All coverage shall be written with a valid agreed amount endorsement and in a sufficient amount to prevent any coinsurance penalty and PIDA as additional named insured with the understanding that any obligation imposed upon Mortgagor (including with limitation, the liability to pay premiums) shall be the sole obligation of Mortgagor and not that of PIDA. In the event of Default, PIDA and other lenders to Mortgagor shall be named as sole loss payees as their interests shall appear. (c) With respect to all insurance maintained pursuant to this Section 5, the interests of PIDA are not invalidated by any action or inaction of Mortgagor or any other natural or artificial person and PIDA is insured regardless of any breach or violation by Mortgagor or any other person of any warranties, declarations or conditions contained in such policies. (d) With respect to all insurance maintained pursuant to this Section 5, such policies shall be endorsed to provide that: (i) the insurers thereunder waive all rights of subrogation against PIDA, any right of set-off and counterclaim and any other right to deduction whether by attachment or otherwise, (ii) such insurance is primary without right of contribution of any other insurance carried by or on behalf of PIDA, (iii) if such insurance is cancelled by the insurer for any reason whatsoever (including without limitation, nonpayment or premium) or any substantial change is made in the coverage that affects the interests of PIDA, such cancellation or substantial change is not to be effective as to PIDA until thirty (30) days after receipt by PIDA of notice sent to PIDA as specified in the Loan Agreement. (e) On each anniversary of the Closing Date, Mortgagor shall furnish PIDA with approved certification of all required insurance. Such certification 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 certification shall identify underwriters, the type of insurance, the insurance limits and the policy terms, and shall specifically list the special provisions enumerated for such insurance required by this Section 5. Upon request, Mortgagor shall furnish PIDA with copies of all insurance policies, binders and cover notes or other evidence of such insurance. 4

(f) Concurrently with the furnishing of all certifications referred to in paragraph (e) of this Section 5, Mortgagor shall furnish PIDA with an opinion of each insurance broker stating that all premiums then due have been paid and that, in the opinion of such broker, the insurance is then in accordance with the provisions of this Section 5. Furthermore, Mortgagor shall cause each insurer or such broker to advise PIDA promptly in writing of any default in the payment of any premiums or any other act or omission on the part of Mortgagor or any contractor of Mortgagor which might invalidate or render unenforceable, in whole or part, any insurance provided hereunder. PIDA, at its sole option, may obtain such insurance if not provided by Mortgagor, and, in such event, Mortgagor shall reimburse PIDA upon demand for the cost thereof, together with interest from the date of payment of the premiums by PIDA to the date on which Borrower repays such premiums, at the rate provided in Section 14 hereof. (g) Upon the occurrence and continuance of an Event of Default, all proceeds payable from any property and casualty above which are payable to Mortgagor shall be paid to PIDA and other lenders to Mortgagor, as their interests shall appear without the consent of Mortgagor.

(f) Concurrently with the furnishing of all certifications referred to in paragraph (e) of this Section 5, Mortgagor shall furnish PIDA with an opinion of each insurance broker stating that all premiums then due have been paid and that, in the opinion of such broker, the insurance is then in accordance with the provisions of this Section 5. Furthermore, Mortgagor shall cause each insurer or such broker to advise PIDA promptly in writing of any default in the payment of any premiums or any other act or omission on the part of Mortgagor or any contractor of Mortgagor which might invalidate or render unenforceable, in whole or part, any insurance provided hereunder. PIDA, at its sole option, may obtain such insurance if not provided by Mortgagor, and, in such event, Mortgagor shall reimburse PIDA upon demand for the cost thereof, together with interest from the date of payment of the premiums by PIDA to the date on which Borrower repays such premiums, at the rate provided in Section 14 hereof. (g) Upon the occurrence and continuance of an Event of Default, all proceeds payable from any property and casualty above which are payable to Mortgagor shall be paid to PIDA and other lenders to Mortgagor, as their interests shall appear without the consent of Mortgagor. 6. The Mortgagor shall keep the Premises and improvements thereon in good condition and repair and shall not remove, demolish or materially alter in a manner so as to reduce the value thereof the buildings or improvements on the Premises nor commit or suffer waste with respect thereto. The Mortgagor shall maintain the Premises in compliance with all applicable governmental requirements. In the event of damage to the Premises caused by fire or other casualty or condemnation, the Mortgagor shall restore the Premises to the condition it was in prior to the occurrence of such damage, and shall further comply with any additional requirements imposed by law, required by insurance, or otherwise required, applicable to the Premises subsequent to such restoration. The Mortgagor shall permit PlDA's agents at any reasonable time, and from time to time, to enter upon the Premises and the buildings and improvements constructed thereon for the purpose of inspecting and appraising the same. While the Mortgage is outstanding and unpaid, neither the Mortgagor nor its successors shall take or permit any action with respect to the property mortgaged hereby which will in any manner impair PlDA's security under this Mortgage, including but not limited to the creation of any additional debt secured by the Premises, nor shall they, without the prior written approval of PIDA, convey, transfer, encumber, hypothecate, lease or otherwise dispose of the Premises. 7. The Mortgagor will, and hereby does, assign to PIDA as additional security for the repayment of the Indebtedness, all its right, title and interest in, to and under the Premises Agreement, together with all sums due thereunder, and agrees that PIDA may collect and apply the same to the payment of any sum required to be paid by the Mortgagor under the Note or this Mortgage, provided, however, that by reason of such assignment the Mortgagor shall not be relieved of, and PIDA does not assume, the Mortgagor's obligations under the Agreement. 8. If PIDA retains the services of counsel in order to cure any default under this Mortgage or any of the Loan Documents, reasonable attorneys' fees shall be payable by the Mortgagor to PIDA and shall be secured hereby. The Mortgagor shall also pay all costs in connection with the satisfaction of this Mortgage of record. 9. An event of default hereunder (an "Event of Default") shall be any of the following: (i) the occurrence of any Event of Default as defined in the Loan Agreement, (ii) failure to pay any sum required to be paid under any of 5

the Loan Documents within thirty (30) days after the same becomes due and payable, (iii) default in the due and punctual payment of the principal of or interest on any loan or debt instrument secured by the Premises after the same shall become due and payable and any applicable cure period shall have expired, or (iv) default in the due and punctual observance or performance of any of the covenants or agreements contained in any loan or debt instrument secured by the Premises which default shall have created a right of acceleration pursuant to such loan or debt instrument. Upon the occurrence of any such Event of Default, other than an Event of Default declared solely as a result of a breach by the Industrial Occupant of Section 4.03 of the Assumption Agreement, at the option of PIDA: (a) the entire unpaid balance of the Indebtedness shall become due and payable immediately, without further notice to the Mortgagor, and shall be recoverable by PIDA immediately or at any time or times thereafter, without stay of execution or other process; (b) PIDA may take immediate possession of the Premises as provided hereunder; and (c) PIDA may immediately exercise any and all other rights and remedies provided in

the Loan Documents within thirty (30) days after the same becomes due and payable, (iii) default in the due and punctual payment of the principal of or interest on any loan or debt instrument secured by the Premises after the same shall become due and payable and any applicable cure period shall have expired, or (iv) default in the due and punctual observance or performance of any of the covenants or agreements contained in any loan or debt instrument secured by the Premises which default shall have created a right of acceleration pursuant to such loan or debt instrument. Upon the occurrence of any such Event of Default, other than an Event of Default declared solely as a result of a breach by the Industrial Occupant of Section 4.03 of the Assumption Agreement, at the option of PIDA: (a) the entire unpaid balance of the Indebtedness shall become due and payable immediately, without further notice to the Mortgagor, and shall be recoverable by PIDA immediately or at any time or times thereafter, without stay of execution or other process; (b) PIDA may take immediate possession of the Premises as provided hereunder; and (c) PIDA may immediately exercise any and all other rights and remedies provided in this Mortgage and in the Note, or which may be available to PIDA, and all such rights and remedies shall be cumulative and concurrent and may be pursued singly, successively or together in PlDA's sole discretion, and may be exercised from time to time and as often as an occasion, or occasions, therefor shall occur until the Indebtedness hereby secured is paid in full. 10. Subject to the rights of MERIDIAN BANK under the First Mortgage, if PIDA shall take possession of the Premises as provided hereunder, PIDA may in its sole discretion: (a) hold, manage, operate and lease the same to the Mortgagor or any other person or persons, on such terms and for such periods of time as PIDA may deem appropriate and the provisions of any lease made by PIDA pursuant hereto shall be valid and binding upon the Mortgagor notwithstanding the fact that PlDA's right of possession may terminate or this Mortgage may be satisfied of record prior to the expiration of the term of such lease; (b) make such alterations, additions, improvements, renovations, repairs and replacements thereto as PIDA may deem proper; (c) remodel such improvements so as to make the same available in whole or in part for other industrial purposes; and (d) collect the rents, issues and profits arising from the Premises, past due and thereafter becoming due, and apply the same, in such order of priority as PIDA may determine, to the payment of all charges and commissions incidental to the collection of rents and the management of the Premises and all other sums or charges required to be paid by the Mortgagor hereunder. In addition to the payment of such charges and commissions, PIDA shall be entitled to retain not less than fifteen percent (15%) of such rents, issues and profits in payment for the services of PIDA. All moneys advanced by PIDA for the purposes aforesaid and not repaid out of the rents collected shall immediately and without demand be repaid by the Mortgagor to PIDA, together with interest thereon at the rate of fifteen percent (15%) per annum, and shall be added to the principal of the Indebtedness and be secured by this Mortgage. The production of a receipt by PIDA shall be conclusive proof of a payment or advance authorized hereby, and the amount and validity thereof. The taking of possession and collection of rents by PIDA as aforesaid shall not be construed to be an affirmation of any lease of the Premises or any part thereof, and PIDA or any other purchaser at any foreclosure sale may, if otherwise entitled to do so, exercise the right to terminate any such lease as though such taking of possession and collection of rents had not occurred. 6

11. THE FOLLOWING PARAGRAPH SETS FORTH A WARRANT OF AUTHORITY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR, THE MORTGAGOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, ON THE ADVICE OF THE SEPARATE COUNSEL OF THE MORTGAGOR, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE MORTGAGOR HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA. IN CASE OF ANY EVENT OF DEFAULT HEREUNDER, (OF WHICH AN AFFIDAVIT ON BEHALF OF PIDA SHALL BE SUFFICIENT EVIDENCE), THEN, AND IN ANY SUCH EVENT, ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE IS HEREBY AUTHORIZED AND EMPOWERED TO APPEAR FOR THE MORTGAGOR, AND ALL PERSONS CLAIMING UNDER OR THROUGH THE MORTGAGOR, AND AS ATTORNEY FOR THE MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH THE MORTGAGOR, TO SIGN AN AGREEMENT FOR ENTERING AN AMICABLE ACTION OF EJECTMENT FOR POSSESSION OF THE PREMISES OR ANY PART THEREOF AND TO CONFESS JUDGMENT

11. THE FOLLOWING PARAGRAPH SETS FORTH A WARRANT OF AUTHORITY FOR AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR. IN GRANTING THIS WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR, THE MORTGAGOR HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, ON THE ADVICE OF THE SEPARATE COUNSEL OF THE MORTGAGOR, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE MORTGAGOR HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF PENNSYLVANIA. IN CASE OF ANY EVENT OF DEFAULT HEREUNDER, (OF WHICH AN AFFIDAVIT ON BEHALF OF PIDA SHALL BE SUFFICIENT EVIDENCE), THEN, AND IN ANY SUCH EVENT, ANY ATTORNEY OF ANY COURT OF RECORD OF PENNSYLVANIA OR ELSEWHERE IS HEREBY AUTHORIZED AND EMPOWERED TO APPEAR FOR THE MORTGAGOR, AND ALL PERSONS CLAIMING UNDER OR THROUGH THE MORTGAGOR, AND AS ATTORNEY FOR THE MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH THE MORTGAGOR, TO SIGN AN AGREEMENT FOR ENTERING AN AMICABLE ACTION OF EJECTMENT FOR POSSESSION OF THE PREMISES OR ANY PART THEREOF AND TO CONFESS JUDGMENT THEREIN AGAINST THE MORTGAGOR, IN FAVOR OF PIDA, WHEREUPON A WRIT FOR POSSESSION MAY IMMEDIATELY ISSUE FOR THE POSSESSION OF THE PREMISES. WITHOUT ANY PRIOR COMPLAINT, WRIT OR PROCEEDING WHATSOEVER; AND FOR SO DOING THIS MORTGAGE. OR A COPY HEREOF VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT. THIS POWER MAY BE EXERCISED AS OFTEN AS PIDA SHALL REQUIRE AND SHALL NOT BE EXHAUSTED BY ONE OR MORE OR BY ANY IMPERFECT EXERCISE THEREOF. IF MORTGAGOR WISHES TO CHALLENGE ANY JUDGMENT CONFESSED PURSUANT TO THIS SECTION, IT SHALL DO SO ONLY BY FILING A PETITION TO OPEN THE JUDGMENT PURSUANT TO PENNSYLVANIA RULES OF CIVIL PROCEDURE RULE 2959, AS IN EFFECT FROM TIME TO TIME ("RULE 2959"), AND SHALL NOT OTHERWISE INTERFERE (BY FILING ANY CIVIL ACTION, BILL IN EQUITY, OR OTHERWISE) WITH THE OPERATION OF THE JUDGMENT GRANTED PURSUANT TO THIS SECTION. MORTGAGOR EXPRESSLY ACKNOWLEDGES THAT THE PROCEDURE AVAILABLE TO IT THROUGH RULE 2959 WILL PROVIDE IT WITH A FULL AND FAIR OPPORTUNITY TO BE HEARD AS TO ANY REASON WHY JUDGMENT SHOULD NOT BE ENTERED AGAINST IT. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED THE SAME SHALL BE DISCONTINUED OR POSSESSION OF THE PREMISES SHALL REMAIN IN OR BE RESTORED TO THE MORTGAGOR, PIDA SHALL HAVE THE RIGHT FOR THE SAME DEFAULT OR ANY SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER AMICABLE ACTIONS AS ABOVE PROVIDED TO RECOVER POSSESSION OF THE PREMISES. PIDA MAY BRING SUCH AMICABLE ACTION IN EJECTMENT BEFORE OR AFTER JUDGMENT ON THIS MORTGAGE OR ON THE NOTE, OR AFTER A SALE OF THE PREMISES BY THE SHERIFF. IF AFTER EXECUTION AND RETURN OF THE WRIT OF POSSESSION, THE 7

MORTGAGOR SHALL RE-ENTER INTO POSSESSION OF THE PREMISES, THE PROTHONOTARY, UPON PRAECIPE AND AFFIDAVIT SETTING FORTH THE FACTS FILED WITHIN THREE YEARS AFTER THE RETURN OF THE WRIT UPON WHICH EXECUTION WAS COMPLETED SHALL ISSUE A NEW WRIT OF POSSESSION. THE MORTGAGOR ACKNOWLEDGES THAT IT UNDERSTANDS THE MEANING AND EFFECT OF THE CONFESSION CONTAINED IN THE FOREGOING PARAGRAPH. SPECIFICALLY, THE MORTGAGOR UNDERSTANDS AMONG OTHER THINGS THAT (1) IT IS RELINQUISHING THE RIGHT TO HAVE NOTICE EXCEPT AS PROVIDED HEREIN, AN OPPORTUNITY TO BE HEARD AND THE RIGHT TO HAVE THE BURDEN OF PROOF OF DEFAULT REST ON PIDA PRIOR TO THE ENTRY OF JUDGMENT, (2) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN ON ITS PROPERTY, (3) IT WILL BEAR

MORTGAGOR SHALL RE-ENTER INTO POSSESSION OF THE PREMISES, THE PROTHONOTARY, UPON PRAECIPE AND AFFIDAVIT SETTING FORTH THE FACTS FILED WITHIN THREE YEARS AFTER THE RETURN OF THE WRIT UPON WHICH EXECUTION WAS COMPLETED SHALL ISSUE A NEW WRIT OF POSSESSION. THE MORTGAGOR ACKNOWLEDGES THAT IT UNDERSTANDS THE MEANING AND EFFECT OF THE CONFESSION CONTAINED IN THE FOREGOING PARAGRAPH. SPECIFICALLY, THE MORTGAGOR UNDERSTANDS AMONG OTHER THINGS THAT (1) IT IS RELINQUISHING THE RIGHT TO HAVE NOTICE EXCEPT AS PROVIDED HEREIN, AN OPPORTUNITY TO BE HEARD AND THE RIGHT TO HAVE THE BURDEN OF PROOF OF DEFAULT REST ON PIDA PRIOR TO THE ENTRY OF JUDGMENT, (2) THE ENTRY OF JUDGMENT MAY RESULT IN A LIEN ON ITS PROPERTY, (3) IT WILL BEAR THE BURDEN AND EXPENSE OF ATTACKING THE JUDGMENT AND CHALLENGING EXECUTION ON THE LIEN AND SALE OF THE PROPERTY COVERED THEREBY, AND (4) ENOUGH OF ITS PROPERTY MAY BE TAKEN TO PAY THE PRINCIPAL AMOUNT, INTEREST, COSTS AND ATTORNEY'S FEES. 12. The Mortgagor waives the right of inquisition on any property levied upon under a judgment obtained in proceedings to collect the Indebtedness hereby secured or in proceedings on this Mortgage, and further waives and releases any and all benefits that may accrue to the Mortgagor by virtue of any law relating to appraisements, stay of execution or exemption of the Premises from levy or sale under execution, now or hereafter in force. A foreclosure sale shall constitute a foreclosure sale of all equity whatsoever of the Mortgagor in the Premises and PIDA shall, if it is the purchaser at the sale, hold the Premises and any part thereof so purchased free of any equity of redemption by reason of any circumstances whatsoever and not as collateral for any obligation. 13. No extension or indulgence granted to the Mortgagor, and no alteration, change or modification of the Note consented or agreed to by PIDA, and no other act or omission of PIDA, including the taking of additional security or the release of any security, or the waiver by PIDA or failure by PIDA to enforce any provision of any of the Loan Documents or to declare a default with respect thereto, shall constitute a release of the lien and obligation of this Mortgage or be interposed as a defense against the enforcement of this Mortgage, or operate as a waiver of any subsequent defaults or otherwise affect the right of PIDA to exercise all rights or remedies stipulated herein and in any of the Loan Documents, except an act of PIDA which constitutes an express, effective, written release and satisfaction of the Note. 14. In the event of any failure to pay or cause to be paid all amounts due under any indebtedness secured by the Premises, or any taxes, water and sewer rents, charges, claims, assessments, assessments for public improvements, liens or encumbrances or to furnish and pay for the insurance required hereunder, or to keep the Premises in good condition and repair, or to pay any other amount required to be paid by any person under any of the Loan Documents, PIDA may, at its option, pay any or all such items together with penalties and interest thereon, and procure and pay for such insurance and repairs; and PIDA may at any time and from time to time advance such additional sum or sums as PIDA in its sole discretion may deem necessary to protect the security of this Mortgage. All such sums so paid or advanced by PIDA shall immediately and without demand be secured hereby and be repaid by the Mortgagor to PIDA, 8

together with interest thereon at the rate of fifteen percent (15%) per annum, and shall be added to the principal of the indebtedness and be secured by this Mortgage. The production of a receipt by PIDA shall be conclusive proof of a payment or advance authorized hereby, and the amount and validity thereof. 15. The Mortgagor covenants and agrees that it shall in the Premises Agreement require of the Industrial Occupant and that it shall further require of any subsequent buyer, lessee or occupant of the Premises, that the Premises shall be used solely for purposes at all times eligible for financing by PIDA under the provisions of the Pennsylvania Industrial Development Authority Act, regulations, statements of policy, guidelines and interpretations of the PIDA Board and staff, each as in effect from time to time, until the Indebtedness shall have been paid in full.

together with interest thereon at the rate of fifteen percent (15%) per annum, and shall be added to the principal of the indebtedness and be secured by this Mortgage. The production of a receipt by PIDA shall be conclusive proof of a payment or advance authorized hereby, and the amount and validity thereof. 15. The Mortgagor covenants and agrees that it shall in the Premises Agreement require of the Industrial Occupant and that it shall further require of any subsequent buyer, lessee or occupant of the Premises, that the Premises shall be used solely for purposes at all times eligible for financing by PIDA under the provisions of the Pennsylvania Industrial Development Authority Act, regulations, statements of policy, guidelines and interpretations of the PIDA Board and staff, each as in effect from time to time, until the Indebtedness shall have been paid in full. 16. All covenants, stipulations and agreements contained in this Mortgage by or on behalf of the Mortgagor shall be binding upon its successors in title or interest and its assigns, whether so expressed or not. 17. This Mortgage may be amended only with the written consent of the Mortgagor, PIDA and the Industrial Occupant. 18. Notice to the Mortgagor under the Note or this Mortgage shall be deemed sufficient if given in accordance with Section 10.14 of the Loan Agreement. 19. The provisions of this Mortgage are severable. In the event of the unenforceability or invalidity of any one or more of the terms, covenants, conditions or provisions of this Mortgage under federal, state or other applicable law, such unenforceability or invalidity shall not render any other of the terms, covenants, conditions or provisions hereof unenforceable or invalid. In the event any waiver by Mortgagor hereunder is prohibited by law, including but not limited to the waiver of exemption from execution, such waiver shall be and be deemed to be deleted herefrom. 20. All capitalized terms not defined herein shall have the meanings ascribed to them in the Loan Agreement. 21. This Mortgage is an open-end mortgage as defined at 42 PA C.S.A. 8143(f) and as such is entitled to all the benefits of 42 PA C.S.A. 8143 et seq., P.L. 525, No. 126, Act 126 of 1990 (the "Act"). The parties to this Mortgage intend that, in addition to any other debt or obligation secured hereby, this Mortgage shall secure unpaid balances of loan advances made after the Mortgage is left for recording, whether such advances are made pursuant to an obligation of PIDA or otherwise. The maximum amount of unpaid loan indebtedness (which shall consist of unpaid advances made either before or after, or both before and after, this Mortgage is left for recording) and which may be outstanding at any time shall be the face amount of the Note, plus accrued and unpaid interest thereon and any additional obligations payable hereunder or thereunder. In addition to the other obligations of the Mortgagor secured hereby, this Mortgage secures unpaid balances of advances made, with respect to the Premises, for the payment of taxes, assessments, maintenance charges, insurance premiums or costs incurred for the protection of the Premises or the lien created by this Mortgage and other expenses, including but not limited to costs and attorney's fees incurred by PIDA by reason of default by Mortgagor under this Mortgage or under any of the Loan Documents. 22. This is a purchase money mortgage. 23. This is a construction mortgage and secures an obligation incurred for the construction of an obligation on land including the acquisition cost of the land. 9

IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage on the day and year first above written.
ATTEST: /s/ J. Joseph A. Mee --------------------Assistant Secretary

IN WITNESS WHEREOF, the Mortgagor has executed this Mortgage on the day and year first above written.
ATTEST: /s/ J. Joseph A. Mee --------------------Assistant Secretary

PIDC FINANCING CORPORATION
By: /s/ Joseph J. Aylmer ----------------------Senior Vice President (CORPORATE SEAL)

10

EXHIBIT "A" THE PREMISES ALL THAT CERTAIN lot or piece of ground with the buildings and improvements thereon erected SITUATE in the Fifth Ward of the City of Philadelphia and described in accordance with a Survey and Plan of Property made February 10, 1995, and revised July 17, 1995 by Lawrence J. Cleary, Surveyor and Regulator of the Third Survey District: BEGINNING at the point formed by the intersection of the Southerly side of Spring Garden Street (120 feet wide) with the Westerly side of Fifth Street (70 feet wide); Thence extending South 13 degrees 37 minutes 25 seconds West, along the said Westerly side of Fifth Street, the distance of 58.984 feet to a point of curve; Thence extending Southwardly, along the said Westerly side of Fifth Street, on the arc of a circle curving to the left, having a radius of 3855.419 feet, the distance of 176.224 feet to a point of tangency; Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, the distance of 357.768 feet to a point on the Northerly side of a certain right-of-way for Public Utility purposes (40 feet wide, lying within the lines of former Noble Street, stricken and vacated from the City Plan by Ordinance approved December 6, 1971); Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, crossing the Easterly end of said right-of-way, the distance of 40.501 feet to a point; Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, the distance of 103.465 feet to a point of cure; Thence extending Southwardly, along the said Westerly side of Fifth Street, on the arc of a circle curving to the left, having a radius of 757.254 feet, the distance of 94.102 feet to a point of tangency; Thence extending South 03 degrees 53 minutes 05 seconds West, along the said Westerly side of Fifth Street, the distance of 44.770 feet to a point of the Northerly side of a certain right-of-way for drainage purposed (10 feet wide, reserved by Ordinance approved December 6, 1971); Thence extending 03 degrees 53 minutes 05 seconds West, along the said Westerly side of Fifth Street crossing the Easterly end of said right-ofway for drainage purposes, the distance of 10.199 feet to a point on the Northerly side of Willow Street (30 feet wide); Thence extending South 82 degrees 33 minutes 12 seconds West, along the said Northerly side of Willow Street, the distance of 180.741 feet to a point; Thence extending North 89 degrees 07 minutes 50 seconds West, along the said Northerly side of Willow Street, the distance of 199.778 feet to a point on the Easterly side of Sixth Street (70 feet wide); Thence extending North 09 degrees 57 minutes 50 seconds East, 11

EXHIBIT A (cont'd) THE PREMISES along the said Easterly side of Sixth Street, crossing the Westerly end of said right-of-way for drainage purposed,

EXHIBIT "A" THE PREMISES ALL THAT CERTAIN lot or piece of ground with the buildings and improvements thereon erected SITUATE in the Fifth Ward of the City of Philadelphia and described in accordance with a Survey and Plan of Property made February 10, 1995, and revised July 17, 1995 by Lawrence J. Cleary, Surveyor and Regulator of the Third Survey District: BEGINNING at the point formed by the intersection of the Southerly side of Spring Garden Street (120 feet wide) with the Westerly side of Fifth Street (70 feet wide); Thence extending South 13 degrees 37 minutes 25 seconds West, along the said Westerly side of Fifth Street, the distance of 58.984 feet to a point of curve; Thence extending Southwardly, along the said Westerly side of Fifth Street, on the arc of a circle curving to the left, having a radius of 3855.419 feet, the distance of 176.224 feet to a point of tangency; Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, the distance of 357.768 feet to a point on the Northerly side of a certain right-of-way for Public Utility purposes (40 feet wide, lying within the lines of former Noble Street, stricken and vacated from the City Plan by Ordinance approved December 6, 1971); Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, crossing the Easterly end of said right-of-way, the distance of 40.501 feet to a point; Thence extending South 11 degrees 00 minutes 17 seconds West, along the said Westerly side of Fifth Street, the distance of 103.465 feet to a point of cure; Thence extending Southwardly, along the said Westerly side of Fifth Street, on the arc of a circle curving to the left, having a radius of 757.254 feet, the distance of 94.102 feet to a point of tangency; Thence extending South 03 degrees 53 minutes 05 seconds West, along the said Westerly side of Fifth Street, the distance of 44.770 feet to a point of the Northerly side of a certain right-of-way for drainage purposed (10 feet wide, reserved by Ordinance approved December 6, 1971); Thence extending 03 degrees 53 minutes 05 seconds West, along the said Westerly side of Fifth Street crossing the Easterly end of said right-ofway for drainage purposes, the distance of 10.199 feet to a point on the Northerly side of Willow Street (30 feet wide); Thence extending South 82 degrees 33 minutes 12 seconds West, along the said Northerly side of Willow Street, the distance of 180.741 feet to a point; Thence extending North 89 degrees 07 minutes 50 seconds West, along the said Northerly side of Willow Street, the distance of 199.778 feet to a point on the Easterly side of Sixth Street (70 feet wide); Thence extending North 09 degrees 57 minutes 50 seconds East, 11

EXHIBIT A (cont'd) THE PREMISES along the said Easterly side of Sixth Street, crossing the Westerly end of said right-of-way for drainage purposed, the distance of 10.127 feet to a point; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, the distance of 292.452 feet to a point on the Southerly side of said right-ofway for Public Utility purposes; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, crossing the Westerly end of said right-of-way for Public Utility purposes, the distance of 40.000 feet to a point; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, the distance of 626.504 feet to a point on the said Southerly side of Spring Garden Street; Thence extending South 80 degrees 18 minutes 06 seconds East, along the said Southerly side of Spring Garden Street, the distance of 379.881 feet to the said Westerly side of Fifth Street, the first mentioned point and place of beginning. BEING known as No. 456 North Fifth Street. CONTAINING IN AREA 342,545.82 sq. feet (7.86377 Acres) BEING the same premises which SmithKline Beecham Corporation by Deed dated 8/2/1995 and recorded 9/29/1995 in Philadelphia County in Deed Book VCS 978 page 573 granted and conveyed unto PIDC Financing Corporation, a Pennsylvania Non-Proft Corporation, in fee.

EXHIBIT A (cont'd) THE PREMISES along the said Easterly side of Sixth Street, crossing the Westerly end of said right-of-way for drainage purposed, the distance of 10.127 feet to a point; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, the distance of 292.452 feet to a point on the Southerly side of said right-ofway for Public Utility purposes; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, crossing the Westerly end of said right-of-way for Public Utility purposes, the distance of 40.000 feet to a point; Thence extending North 09 degrees 57 minutes 50 seconds East, along the said Easterly side of Sixth Street, the distance of 626.504 feet to a point on the said Southerly side of Spring Garden Street; Thence extending South 80 degrees 18 minutes 06 seconds East, along the said Southerly side of Spring Garden Street, the distance of 379.881 feet to the said Westerly side of Fifth Street, the first mentioned point and place of beginning. BEING known as No. 456 North Fifth Street. CONTAINING IN AREA 342,545.82 sq. feet (7.86377 Acres) BEING the same premises which SmithKline Beecham Corporation by Deed dated 8/2/1995 and recorded 9/29/1995 in Philadelphia County in Deed Book VCS 978 page 573 granted and conveyed unto PIDC Financing Corporation, a Pennsylvania Non-Proft Corporation, in fee. Registry No./Parcel No.: 4 N 7 - 292 Brt No. 88-4-028600 Ward No.: 5th

NWA/04-03-96 PIDA #7846 LOAN AGREEMENT THIS LOAN AGREEMENT is made this 4th day of April, 1996, BY AND BETWEEN PIDC FINANCING CORPORATION, a nonprofit corporation organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania, with an address at 2600 Centre Square West, 1500 Market Street, Philadelphia, Pennsylvania 19102 (the "Borrower"), and THE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ("PIDA"), a public body corporate and politic, organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania, having its principal place of business at Room 480 Forum Building, Harrisburg, Pennsylvania 17120. ARTICLE I Background Section 1.01. The Borrower, to facilitate the financial transactions referred to herein, has acquired or is acquiring as of the date hereof legal title to a tract of land in Philadelphia, Philadelphia County, Pennsylvania (hereinafter called the "Premises") upon which the Borrower proposes to establish an industrial development project as defined in the Pennsylvania Industrial Development Authority Act, as amended, 73 P.S. section 301 et seq. (the "Act") (the "Project") to be purchased or leased, occupied and controlled by MOTHERS WORK, INC. (the "Industrial Occupant"), a corporation organized and existing under the laws of the State of Delaware and qualified to do business in Pennsylvania, pursuant to an Installment Sale Agreement, effective as of April 4, 1996, between the Borrower and the Industrial Occupant (the "Premises Agreement").

NWA/04-03-96 PIDA #7846 LOAN AGREEMENT THIS LOAN AGREEMENT is made this 4th day of April, 1996, BY AND BETWEEN PIDC FINANCING CORPORATION, a nonprofit corporation organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania, with an address at 2600 Centre Square West, 1500 Market Street, Philadelphia, Pennsylvania 19102 (the "Borrower"), and THE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY ("PIDA"), a public body corporate and politic, organized and existing under and by virtue of the laws of the Commonwealth of Pennsylvania, having its principal place of business at Room 480 Forum Building, Harrisburg, Pennsylvania 17120. ARTICLE I Background Section 1.01. The Borrower, to facilitate the financial transactions referred to herein, has acquired or is acquiring as of the date hereof legal title to a tract of land in Philadelphia, Philadelphia County, Pennsylvania (hereinafter called the "Premises") upon which the Borrower proposes to establish an industrial development project as defined in the Pennsylvania Industrial Development Authority Act, as amended, 73 P.S. section 301 et seq. (the "Act") (the "Project") to be purchased or leased, occupied and controlled by MOTHERS WORK, INC. (the "Industrial Occupant"), a corporation organized and existing under the laws of the State of Delaware and qualified to do business in Pennsylvania, pursuant to an Installment Sale Agreement, effective as of April 4, 1996, between the Borrower and the Industrial Occupant (the "Premises Agreement"). Section 1.02. The Borrower has filed with PIDA an application for financing for the Project (as amended through the date hereof, the "Application") and accepted from PIDA a commitment letter dated March 13, 1995 (as amended, the "Commitment") for a loan in a principal amount not to exceed $2,000,000 (the "Loan") to be used exclusively to defray a portion not to exceed 40% (such maximum percentage, the "Participation Percentage") of the "cost of establishing an industrial development project" as defined in the Act (the "Cost").

Section 1.03. PIDA is willing to make the Loan upon the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, the parties hereto, in consideration of the mutual promises herein contained, and intending to be legally bound hereby, covenant and agree as follows: ARTICLE II The Loan Section 2.01. The Loan. Subject to the conditions set forth herein, PIDA agrees to make the Loan to the Borrower for the purpose of defraying a portion of the Cost. ARTICLE III The Note Section 3.01. The Note. The Loan shall be evidenced by a note (the "Note") of even date herewith given by Borrower to PIDA in a principal amount equal to the principal amount referred to in Section 1.02 hereof. ARTICLE IV Loan Security

Section 1.03. PIDA is willing to make the Loan upon the terms and subject to the conditions hereinafter set forth. NOW, THEREFORE, the parties hereto, in consideration of the mutual promises herein contained, and intending to be legally bound hereby, covenant and agree as follows: ARTICLE II The Loan Section 2.01. The Loan. Subject to the conditions set forth herein, PIDA agrees to make the Loan to the Borrower for the purpose of defraying a portion of the Cost. ARTICLE III The Note Section 3.01. The Note. The Loan shall be evidenced by a note (the "Note") of even date herewith given by Borrower to PIDA in a principal amount equal to the principal amount referred to in Section 1.02 hereof. ARTICLE IV Loan Security Section 4.01. The Mortgage. Payment of the Note and satisfaction of all obligations of the Borrower hereunder and under the Note and of the Industrial Occupant under a Consent, Subordination and Assumption Agreement effective as of even date herewith from the Industrial Occupant to PIDA (the "Assumption Agreement") shall be secured by a mortgage (the "Mortgage") effective as of even date herewith given by Borrower to PIDA. The Mortgage shall constitute not less than a second lien upon the Premises, subordinate only to a $4,094,684.93 mortgage, dated September 28, 1995, on the Premises given to MERIDIAN BANK which principal sum shall be reduced to the sum of $4,000,000 on the same date hereof (the "First Mortgage"). Section 4.02. Additional Security. The following shall constitute additional collateral security for the payment of the Note and satisfaction by the Borrower of all of the Borrower's obligations hereunder and under the Mortgage and/or the obligations of the Industrial Occupant under the Assumption Agreement: (a) the Assumption Agreement given by the Industrial Occupant to PIDA; 2

(b) an Assignment by Borrower to PIDA of Borrower's rights under the Premises Agreement which Assignment is subordinate to a prior Assignment to MERIDIAN BANK (the "Assignment"), agreed to by the Industrial Occupant; and (c) a bank letter of credit in the amount of $1,000,000. This Agreement, the Note, the Mortgage, the Premises Agreement, the Assignment, the Assumption Agreement, the opinions of counsel hereinafter referred to, and all other agreements, instruments and documents to be delivered hereunder shall collectively be termed the "Loan Documents." ARTICLE V Representations and Warranties of Borrower To induce PIDA to enter into this Agreement and to make the Loan, the Borrower represents and warrants that: Section 5.01. Corporate Organization. The Borrower is a nonprofit corporation, duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania.

(b) an Assignment by Borrower to PIDA of Borrower's rights under the Premises Agreement which Assignment is subordinate to a prior Assignment to MERIDIAN BANK (the "Assignment"), agreed to by the Industrial Occupant; and (c) a bank letter of credit in the amount of $1,000,000. This Agreement, the Note, the Mortgage, the Premises Agreement, the Assignment, the Assumption Agreement, the opinions of counsel hereinafter referred to, and all other agreements, instruments and documents to be delivered hereunder shall collectively be termed the "Loan Documents." ARTICLE V Representations and Warranties of Borrower To induce PIDA to enter into this Agreement and to make the Loan, the Borrower represents and warrants that: Section 5.01. Corporate Organization. The Borrower is a nonprofit corporation, duly organized, validly existing and in good standing under the laws of the Commonwealth of Pennsylvania. Section 5.02. Power and Authority. The Borrower has all necessary corporate power and authority to purchase, own, mortgage and sell its properties and to carry on its business as now being conducted, and to carry out the transactions contemplated by the Loan Documents. Section 5.03. Certification as Industrial Development Agency. Borrower is an industrial development agency as that term is defined in the Act certified as such by PIDA. Borrower is not aware of any facts that would make its application to PIDA for certification as an industrial development agency materially incomplete, incorrect or misleading if filed as of the date hereof. Borrower has filed with PIDA all reports and other information required by PIDA. Section 5.04. Loan Documents Consistent with Law and Agreements. The execution and delivery of this Agreement and of each of the Loan Documents to be executed and delivered by Borrower, consummation of the transactions herein contemplated, and compliance with the terms and provisions hereof and of the Loan Documents which Borrower has executed and delivered or to which it is otherwise subject do not (i) contravene any provision of law, statute, rule or regulation to which Borrower is subject or any judgment, decree, franchise, order or permit applicable to the Borrower or (ii) conflict with, or result in, a breach of any of the terms, conditions or provisions of the 3

Articles of Incorporation or Bylaws of the Borrower, or of any material agreement, indenture or other instrument to which the Borrower is a party or by which it is bound or to which it or its property is subject. Section 5.05. Due Authorization. The execution, delivery and performance of this Agreement, the performance of the transactions contemplated by the provisions hereof, and the execution, issuance, delivery and performance of each of the Loan Documents to be executed and delivered by Borrower hereunder have each been duly authorized by all necessary corporate action on the part of the Borrower. Section 5.06. Execution and Delivery. This Agreement and each of the Loan Documents being executed and delivered by Borrower concurrently herewith have been duly and validly executed and delivered by the Borrower and constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other substantially similar laws of general application relating to or affecting the enforcement of creditors' rights or by general principles of equity. Section 5.07. Litigation. There is no material litigation or governmental proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower other than that which has been previously disclosed to PIDA in writing. If such litigation or proceeding exists, it shall be set forth in an exhibit which shall be attached hereto and

Articles of Incorporation or Bylaws of the Borrower, or of any material agreement, indenture or other instrument to which the Borrower is a party or by which it is bound or to which it or its property is subject. Section 5.05. Due Authorization. The execution, delivery and performance of this Agreement, the performance of the transactions contemplated by the provisions hereof, and the execution, issuance, delivery and performance of each of the Loan Documents to be executed and delivered by Borrower hereunder have each been duly authorized by all necessary corporate action on the part of the Borrower. Section 5.06. Execution and Delivery. This Agreement and each of the Loan Documents being executed and delivered by Borrower concurrently herewith have been duly and validly executed and delivered by the Borrower and constitute valid and legally binding obligations of the Borrower, enforceable in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other substantially similar laws of general application relating to or affecting the enforcement of creditors' rights or by general principles of equity. Section 5.07. Litigation. There is no material litigation or governmental proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower other than that which has been previously disclosed to PIDA in writing. If such litigation or proceeding exists, it shall be set forth in an exhibit which shall be attached hereto and made a part hereof. Section 5.08. Taxes. The Borrower has filed all required federal, state and local tax returns and has paid all taxes shown on such returns as they have become due unless the obligation to file such return or pay such tax is the subject of a pending administrative or judicial appeal or proceeding with respect to which the Borrower has posted or caused to be posted a bond or other security satisfactory to PIDA in an amount which is at least equal to the sum which is the subject of the appeal or proceeding, together with all interest, costs, and charges relating thereto. Section 5.09. Infrastructure Improvements. Adequate street and public infrastructure improvements, including without limitation water and sanitary and surface sewers, in and about the Project (i) have been fully authorized or approved by appropriate ordinance or other required municipal action and (ii) have either (A) been completed, (B) are the subject of contracts being let by the municipality involved, (C) are covered by a bond that the Borrower has posted with the municipality in an amount deemed sufficient by the municipality to secure the completion of such improvements; or (D) are otherwise available at the Premises for the use and benefit, inter alia, of PIDA. All of the representations and warranties of the Borrower set forth herein are expressed as of the date hereof, unless a specific date prior to the date hereof is given as the date as of which such representation or warranty is expressed, and 4

shall survive and continue until the Loan is paid in full and all of the Borrower's obligations hereunder have been satisfied. ARTICLE VI Borrowing Procedures and Agreements The following provisions shall be applicable with respect to all disbursements of the Loan, whether made concurrently with Closing hereunder or subsequent thereto: Section 6.01. General Disbursement Procedures. Disbursement of the Loan will be made in accordance with the Commitment. Disbursements shall be made only to pay for work performed and materials incorporated into the Project and comprising part of the Cost of the Project. Requests for all disbursements under the Loan shall be submitted to PIDA in writing, shall consist of such documentation and contain such information as may be reasonably required by PIDA concerning the Project and

shall survive and continue until the Loan is paid in full and all of the Borrower's obligations hereunder have been satisfied. ARTICLE VI Borrowing Procedures and Agreements The following provisions shall be applicable with respect to all disbursements of the Loan, whether made concurrently with Closing hereunder or subsequent thereto: Section 6.01. General Disbursement Procedures. Disbursement of the Loan will be made in accordance with the Commitment. Disbursements shall be made only to pay for work performed and materials incorporated into the Project and comprising part of the Cost of the Project. Requests for all disbursements under the Loan shall be submitted to PIDA in writing, shall consist of such documentation and contain such information as may be reasonably required by PIDA concerning the Project and the Cost (or the portion thereof theretofore paid or invoiced) and shall be accompanied by such other documentation as may be reasonably required by PIDA or its counsel. Such requests shall be submitted in sufficient time prior to the date upon which the Borrower requests that a disbursement under the Loan be made hereunder to enable PIDA to process such request, but in any event not less than 30 days prior to the proposed date of such disbursement. Section 6.02. Subsequent Disbursements. In the event that the Project is not completed and the entire Loan is not disbursed at the time of the initial disbursement hereunder, subject to compliance by the parties subject thereto with the terms and conditions of this Agreement and each of the other Loan Documents, the Borrower shall be entitled after completion of construction of the Project to borrow the undisbursed balance, if any, of the Loan, provided that the total Cost of the Project multiplied by the Participation Percentage exceeds the amount of the Loan. Section 6.03. Conditions Precedent to All Disbursements. As a condition precedent to each disbursement hereunder, whether made concurrently with Closing or subsequent thereto, the Borrower shall, in addition to satisfying such other requirements as PIDA may reasonably impose, provide PIDA with: (a) evidence satisfactory to PIDA that, at the time of such disbursement (unless with respect to items (i), (ii) and (iii), such items are covered by an acceptable title insurance commitment delivered to PIDA as of the date hereof, and applicable at the time of such disbursement), (i) there are no mechanics' or materialmen's liens or claims filed against the Premises, (ii) no financing statements have been filed under the 5

Uniform Commercial Code as then in effect in the Commonwealth with respect to fixtures or building systems (including, but not limited to, heating, plumbing, electrical, air conditioning, sprinkler, fire alarm and elevator systems) not directly employed in the industrial activities of the Industrial Occupant, which would have priority over the lien in favor of PIDA created by the Mortgage other than those specifically permitted by the Mortgage or hereunder, (iii) there are no liens or encumbrances filed or recorded with respect to the Premises which would have priority over the lien in favor of PIDA created by the Mortgage other than those specifically permitted by the Mortgage or hereunder, (iv) the Industrial Occupant has filed all tax returns and reports required to be filed by it with the Commonwealth through the date hereof and is current in the payment of all monies due to the Commonwealth from it, whether as taxes or otherwise, unless the obligation to file such return or pay such tax is the subject of a pending administrative or judicial appeal or proceeding with respect to which the Industrial Occupant has posted or caused to be posted a bond or other security satisfactory to PIDA in an amount which is at least equal to the sum which is the subject of the appeal or proceeding, together with all interest, costs, and charges relating thereto and (v) the insurance relating to the Project required by the Mortgage is in effect; (b) a certificate of the Borrower executed by its President or Vice President dated as of the disbursement date certifying that all representations and warranties made herein with regard to the Borrower were true and correct

Uniform Commercial Code as then in effect in the Commonwealth with respect to fixtures or building systems (including, but not limited to, heating, plumbing, electrical, air conditioning, sprinkler, fire alarm and elevator systems) not directly employed in the industrial activities of the Industrial Occupant, which would have priority over the lien in favor of PIDA created by the Mortgage other than those specifically permitted by the Mortgage or hereunder, (iii) there are no liens or encumbrances filed or recorded with respect to the Premises which would have priority over the lien in favor of PIDA created by the Mortgage other than those specifically permitted by the Mortgage or hereunder, (iv) the Industrial Occupant has filed all tax returns and reports required to be filed by it with the Commonwealth through the date hereof and is current in the payment of all monies due to the Commonwealth from it, whether as taxes or otherwise, unless the obligation to file such return or pay such tax is the subject of a pending administrative or judicial appeal or proceeding with respect to which the Industrial Occupant has posted or caused to be posted a bond or other security satisfactory to PIDA in an amount which is at least equal to the sum which is the subject of the appeal or proceeding, together with all interest, costs, and charges relating thereto and (v) the insurance relating to the Project required by the Mortgage is in effect; (b) a certificate of the Borrower executed by its President or Vice President dated as of the disbursement date certifying that all representations and warranties made herein with regard to the Borrower were true and correct as of the date hereof and shall remain true and correct as of the date of such certificate, unless some date other than the date hereof is expressly set forth as of the date as of which such representation and warranty is expressed, in which event such representation and warranty was true and correct as of the effective date thereof; and (c) a certificate of the Industrial Occupant executed by an authorized officer dated as of the disbursement date that: (i) all representations and warranties made in the Assumption Agreement were true and correct as of the date hereof and shall remain true and correct as of the date of such certificate, unless some date other than the date hereof is expressly set forth as of the date as of which such representation and warranty is expressed, in which event such representation and warranty was true and correct as of the effective date thereof and (ii) the Premises and the Project are in compliance in all material respects with all environmental, building, subdivision, zoning and all other ordinances and regulations applicable to the Premises and the Project respectively, together with copies of all subdivision, building, zoning, use and other permits required for the Premises and the Project unless PIDA shall permit the omission of such copies. Section 6.04. Suspension of Disbursements. In the event any material environmental, building, subdivision, use, zoning or other permits relating to the Premises or the construction or operation of the Project are revoked, 6

rescinded, suspended or materially adversely affected by any preliminary or final injunction or decision by any court or other body issuing such permit or otherwise having jurisdiction, PIDA may refuse to make further advances under this Agreement until the matter is resolved to PIDA's reasonable satisfaction, whether or not PIDA has declared an Event of Default hereunder or such revocation, rescission, suspension, or material adverse effect would comprise an Event of Default hereunder. ARTICLE VII Covenants of the Borrower Until the Loan has been entirely repaid and all of its obligations to PIDA in connection therewith and herewith have been satisfied, the Borrower hereby covenants that: Section 7.01. Use of Proceeds. The Borrower shall use the proceeds of the Loan solely for the purpose of defraying the Cost. Section 7.02. Preservation of Existence. The Borrower shall preserve its corporate existence, rights, privileges and franchises, and maintain its good standing as a nonprofit corporation under the laws of the Commonwealth of Pennsylvania and its certification by PIDA as an industrial development agency. Section 7.03. Compliance with Law. The Borrower shall comply with all laws, regulations and orders of any

rescinded, suspended or materially adversely affected by any preliminary or final injunction or decision by any court or other body issuing such permit or otherwise having jurisdiction, PIDA may refuse to make further advances under this Agreement until the matter is resolved to PIDA's reasonable satisfaction, whether or not PIDA has declared an Event of Default hereunder or such revocation, rescission, suspension, or material adverse effect would comprise an Event of Default hereunder. ARTICLE VII Covenants of the Borrower Until the Loan has been entirely repaid and all of its obligations to PIDA in connection therewith and herewith have been satisfied, the Borrower hereby covenants that: Section 7.01. Use of Proceeds. The Borrower shall use the proceeds of the Loan solely for the purpose of defraying the Cost. Section 7.02. Preservation of Existence. The Borrower shall preserve its corporate existence, rights, privileges and franchises, and maintain its good standing as a nonprofit corporation under the laws of the Commonwealth of Pennsylvania and its certification by PIDA as an industrial development agency. Section 7.03. Compliance with Law. The Borrower shall comply with all laws, regulations and orders of any court or governmental body having jurisdiction over the Project. To the extent Borrower is required to do so by applicable law or by agreement with the Industrial Occupant, Borrower shall obtain all environmental, zoning, subdivision, building and other permits required for completion of the Project. To the extent that such permits are (i) required for the Project but (ii) pursuant to agreement with the Industrial Occupant and in accordance with applicable law are being obtained by Industrial Occupant or some other person other than Borrower, Borrower shall in its agreements with the Industrial Occupant require the Industrial Occupant to obtain such permits and Borrower shall thereafter exercise reasonable diligence to determine whether such permits are being timely and appropriately obtained, and shall promptly advise PIDA if Borrower believes such permits are not being so obtained. As and when requested by PIDA, Borrower shall deliver to PIDA copies of all permits required for completion of the Project. Section 7.04. Provision of Information. The Borrower shall, not less frequently than annually and at such other times as PIDA may reasonably request, provide financial information and other information in form reasonably satisfactory to PIDA, including at least (i) financial statements of the Borrower for its most recent fiscal year, including its balance sheet and income statement, duly certified by an authorized officer of the Borrower and (ii) a certificate of 7

an authorized officer of the Borrower stating (A) that it has complied with all terms and conditions of each of the Loan Documents to which the Borrower is subject, including, without limitation, the requirements of the Mortgage with respect to insurance on the Premises and (B) that it has complied with its bylaws with respect to the holding of regular and annual meetings and the election of officers. Section 7.05. Compliance with Loan Documents. The Borrower shall comply with all of the terms and conditions of this Agreement and each of the Loan Documents to be executed and delivered by Borrower. Section 7.06. Notice of Defaults. The Borrower shall give immediate notice to PIDA of the occurrence of (i) any breach or Event of Default on the part of Borrower, (ii) any breach or Event of Default on the part of Industrial Occupant of which Borrower becomes aware, under this Agreement or under any Loan Document, or (iii) any material breach or Event of Default by any other person of which Borrower becomes aware, under any other material agreement relating to the Project. Section 7.07. Enforcement of Terms Against Industrial Occupant. The Borrower shall specifically enforce, as and to the extent PIDA shall request, all material provisions of all agreements between the Borrower and the Industrial Occupant relating to the Project and shall not waive any material breach of, or material default under,

an authorized officer of the Borrower stating (A) that it has complied with all terms and conditions of each of the Loan Documents to which the Borrower is subject, including, without limitation, the requirements of the Mortgage with respect to insurance on the Premises and (B) that it has complied with its bylaws with respect to the holding of regular and annual meetings and the election of officers. Section 7.05. Compliance with Loan Documents. The Borrower shall comply with all of the terms and conditions of this Agreement and each of the Loan Documents to be executed and delivered by Borrower. Section 7.06. Notice of Defaults. The Borrower shall give immediate notice to PIDA of the occurrence of (i) any breach or Event of Default on the part of Borrower, (ii) any breach or Event of Default on the part of Industrial Occupant of which Borrower becomes aware, under this Agreement or under any Loan Document, or (iii) any material breach or Event of Default by any other person of which Borrower becomes aware, under any other material agreement relating to the Project. Section 7.07. Enforcement of Terms Against Industrial Occupant. The Borrower shall specifically enforce, as and to the extent PIDA shall request, all material provisions of all agreements between the Borrower and the Industrial Occupant relating to the Project and shall not waive any material breach of, or material default under, any of such agreements of which Borrower becomes aware, without the prior written consent of PIDA. Section 7.08. Mergers, etc. Without the prior written consent of PIDA, the Borrower shall not merge or consolidate with any other corporation or other entity, unless Borrower is the surviving corporation, nor divide into two or more corporations, nor convey, transfer or dispose of all or any material part of its assets. Section 7.09. Debt Secured by Premises. Without the prior written consent of PIDA, the Borrower shall not take any action to cause or permit any mortgage, lien or encumbrance to be placed against the Premises or any interest therein, including without limitation the equitable interest of the Industrial Occupant therein, except such mortgages, liens and encumbrances as may be expressly permitted by the Mortgage. Borrower shall, in its agreements with the Industrial Occupant, prohibit the Industrial Occupant from causing or permitting any mortgage, lien or encumbrance to be placed against the Premises or any interest therein, including without limitation the equitable interest of the Industrial Occupant therein. Section 7.10. Extensions and Prepayments of Premises Debt. Without the prior written consent of PIDA, the Borrower shall not request, consent to, or enter into any agreement providing for, the extension of the time of payment of the First Mortgage. Borrower shall in its agreements with the Industrial Occupant prohibit the Industrial Occupant 8

from requesting, consenting to or entering into any agreement providing for the extension of the time of payment of the First Mortgage without the prior written consent of PIDA and the Borrower. The Borrower may prepay the First Mortgage in whole or in part at any time provided that (i) such prepayment does not materially adversely affect the financial condition of the Borrower or the Industrial Occupant, (ii) prior written notice of such prepayment is given to PIDA and (iii) there is no default or event which with the passage of time or giving of notice would constitute a default under the Mortgage. The Borrower shall not, without the prior written consent of PIDA, prepay any indebtedness secured by a lien on the Premises which is subordinate to the Mortgage. Borrower shall in its agreements with the Industrial Occupant prohibit the Industrial Occupant from requesting, consenting to or entering into any agreement providing for, the prepayment of any indebtedness secured by a lien on the Premises or any interest therein which is subordinate to the Mortgage without the prior written consent of PIDA and the Borrower. Section 7.11. Nondiscrimination. The Borrower hereby accepts and agrees to be bound by the nondiscrimination provisions set forth in Exhibit 7.11 attached hereto. The Borrower shall cause comparable provisions to be included in the Premises Agreement and all other Project contracts to which Borrower is a party and shall, in the agreements to which Borrower is a party with the Industrial Occupant and all other persons relating to the Project (including, without limitation, contractors and professionals), require the insertion of comparable provisions in all Project contracts to which the Industrial Occupant or such other persons are party.

from requesting, consenting to or entering into any agreement providing for the extension of the time of payment of the First Mortgage without the prior written consent of PIDA and the Borrower. The Borrower may prepay the First Mortgage in whole or in part at any time provided that (i) such prepayment does not materially adversely affect the financial condition of the Borrower or the Industrial Occupant, (ii) prior written notice of such prepayment is given to PIDA and (iii) there is no default or event which with the passage of time or giving of notice would constitute a default under the Mortgage. The Borrower shall not, without the prior written consent of PIDA, prepay any indebtedness secured by a lien on the Premises which is subordinate to the Mortgage. Borrower shall in its agreements with the Industrial Occupant prohibit the Industrial Occupant from requesting, consenting to or entering into any agreement providing for, the prepayment of any indebtedness secured by a lien on the Premises or any interest therein which is subordinate to the Mortgage without the prior written consent of PIDA and the Borrower. Section 7.11. Nondiscrimination. The Borrower hereby accepts and agrees to be bound by the nondiscrimination provisions set forth in Exhibit 7.11 attached hereto. The Borrower shall cause comparable provisions to be included in the Premises Agreement and all other Project contracts to which Borrower is a party and shall, in the agreements to which Borrower is a party with the Industrial Occupant and all other persons relating to the Project (including, without limitation, contractors and professionals), require the insertion of comparable provisions in all Project contracts to which the Industrial Occupant or such other persons are party. Section 7.12. Compliance with Governmental Requirements. Borrower shall require, in all Project contracts to which Borrower is a party, (i) that the Project be in compliance with all applicable governmental regulations, including without limitation all anti-pollution regulations and standards, and (ii) that comparable provisions be included in all other Project contracts to which persons, who are parties to Project contracts with the Borrower, are themselves a party. Section 7.13. Recording and Other Costs. The Borrower shall pay all the costs of recording and any other costs that PIDA may incur in connection with closing the Loan, to the extent such costs are not paid by Industrial Occupant. Section 7.14. Inspection. The Borrower shall in its agreements with the Industrial Occupant require the Industrial Occupant to provide proper facilities at all times for inspection of the Project before and after completion thereof by PIDA and PlDA's authorized representatives (including, without limitation, any independent consulting engineer (such engineer, the "PIDA Engineer") or environmental consultant retained by PIDA), and afford full and free access to the Project to such persons as may from time to time be designated by PIDA. 9

Section 7.15. Documentation. The Borrower shall provide, or, by agreement with the Industrial Occupant, require the Industrial Occupant to provide, all documentation requested by the PIDA Engineer for preparation of the final engineering report, including, but not limited to, such things as a breakdown of the final costs with invoices, proofs of payment, and a final affidavit of costs. Section 7.16. Completion of Project. The Borrower shall by agreement with the Industrial Occupant or otherwise require that the Project be constructed on the Premises, in strict accordance with all plans and specifications delivered to PIDA; that all fixtures, equipment and other property constituting a part of the Premises be timely acquired and installed; and that construction proceed diligently, continuously and expeditiously, employing sufficient workmen and supplying sufficient materials to fully finish and complete the same, inside and outside, with the appurtenant areas, paving, grading and curbing, sewers, laterals, water and all public utility connections and all necessary street, footway and other improvements, free and clear and discharged of all liens and municipal claims and the possibility of liens therefor. Section 7.17. Removal of Work Deemed Unsound. The Borrower shall, by its own action or by agreement with the Industrial Occupant, take down and remove from, or require the taking down and removal from, the Premises, within seventy-two (72) hours after receiving notice from PIDA, all portions of the Project and related materials, whether worked or unworked, which, after inspection by the PIDA Engineer, are determined by the PIDA Engineer to be materially not in compliance with the PIDA Engineering Guidelines supplied to the Borrower in connection with the Project, and make good, at no cost to PIDA, all work and materials damaged

Section 7.15. Documentation. The Borrower shall provide, or, by agreement with the Industrial Occupant, require the Industrial Occupant to provide, all documentation requested by the PIDA Engineer for preparation of the final engineering report, including, but not limited to, such things as a breakdown of the final costs with invoices, proofs of payment, and a final affidavit of costs. Section 7.16. Completion of Project. The Borrower shall by agreement with the Industrial Occupant or otherwise require that the Project be constructed on the Premises, in strict accordance with all plans and specifications delivered to PIDA; that all fixtures, equipment and other property constituting a part of the Premises be timely acquired and installed; and that construction proceed diligently, continuously and expeditiously, employing sufficient workmen and supplying sufficient materials to fully finish and complete the same, inside and outside, with the appurtenant areas, paving, grading and curbing, sewers, laterals, water and all public utility connections and all necessary street, footway and other improvements, free and clear and discharged of all liens and municipal claims and the possibility of liens therefor. Section 7.17. Removal of Work Deemed Unsound. The Borrower shall, by its own action or by agreement with the Industrial Occupant, take down and remove from, or require the taking down and removal from, the Premises, within seventy-two (72) hours after receiving notice from PIDA, all portions of the Project and related materials, whether worked or unworked, which, after inspection by the PIDA Engineer, are determined by the PIDA Engineer to be materially not in compliance with the PIDA Engineering Guidelines supplied to the Borrower in connection with the Project, and make good, at no cost to PIDA, all work and materials damaged thereby. ARTICLE VIII Payments Section 8.01. Repayment of Excess Loan Amounts. If, upon final determination by the PIDA Engineer of the Cost of the Project, excluding Costs attributable to any portion of the Project determined by the PIDA Engineer to be materially not in compliance with the PIDA Engineering Guidelines supplied to the Borrower in connection with the Project (which determination shall be conclusive), the amount of the Loan previously disbursed to the Borrower exceeds the Cost (as so determined) multiplied by the Participation Percentage, the entire amount of such excess shall be repaid to PIDA by or on behalf of the Borrower within thirty (30) days of notice thereof to the Borrower and the Industrial Occupant. Section 8.02. Payments of Premises Rentals. Whether or not PIDA consents to such lease or sublease, if any portion of the Premises is leased or subleased to any party not substantially related to the Industrial Occupant, Borrower 10

shall pay or cause to be paid to PIDA, as a prepayment on the Loan, on the first anniversary of the commencement of the lease or sublease and annually thereafter, fifty percent (50%) of (i) the gross annual rentals or subrentals less only (ii) the proportionate amount of taxes, insurance and utilities allocable to the portion of the Premises so leased or subleased. If PIDA shall not have consented in advance to such lease or sublease, acceptance by PIDA of such prepayment shall be without prejudice to any right PIDA may have to declare an Event of Default hereunder. ARTICLE IX Events of Default Section 9.01. Events of Default. The following shall each constitute an event of default hereunder (an "Event of Default"): (a) there shall not have been paid when due any amount payable by any person under any of the Loan Documents (including, without limitation, any installment of principal or interest under the Note or any prepayment under Article VIII hereof), and such failure shall continue for a period of thirty (30) days;

shall pay or cause to be paid to PIDA, as a prepayment on the Loan, on the first anniversary of the commencement of the lease or sublease and annually thereafter, fifty percent (50%) of (i) the gross annual rentals or subrentals less only (ii) the proportionate amount of taxes, insurance and utilities allocable to the portion of the Premises so leased or subleased. If PIDA shall not have consented in advance to such lease or sublease, acceptance by PIDA of such prepayment shall be without prejudice to any right PIDA may have to declare an Event of Default hereunder. ARTICLE IX Events of Default Section 9.01. Events of Default. The following shall each constitute an event of default hereunder (an "Event of Default"): (a) there shall not have been paid when due any amount payable by any person under any of the Loan Documents (including, without limitation, any installment of principal or interest under the Note or any prepayment under Article VIII hereof), and such failure shall continue for a period of thirty (30) days; (b) any representation, warranty or statement made by any person herein or in the Application or in any of the Loan Documents or in any certificate or financial or other statement furnished pursuant to the provisions of any of the Loan Documents or the Application (except for any representation, warranty or statement expressly made effective as of a date prior to the date when made or furnished), shall have been false or misleading in any material respect as of the time made or furnished or as of the date hereof, whichever is later; any representation, warranty or statement expressly made effective as of a date prior to the date when made or furnished shall have been false or misleading in any material respect as of the effective date thereof; (c) the Borrower or the Industrial Occupant shall (i) become insolvent, (ii) admit its inability to pay its debts as they come due, (iii) make an assignment to the benefit of its creditors, (iv) be adjudicated bankrupt or insolvent, (v) voluntarily initiate proceedings under any bankruptcy or reorganization law either now or hereafter in effect, (vi) become the subject of any involuntary proceedings under any bankruptcy or reorganization law either now or hereafter in effect that shall not have been dismissed within ninety (90) days of the initiation thereof, or (vii) seek to take advantage of any moratorium law either now or hereafter in effect; (d) a receiver, liquidator or trustee shall be appointed for either the Borrower or the Industrial Occupant and shall not have been dismissed within ninety (90) days; 11

(e) the Premises or any interest therein are sold, leased, sub-leased, mortgaged, liened, encumbered, or otherwise conveyed without the prior written consent of PIDA, which consent will not unreasonably be withheld, provided that (i) the beneficial owner and occupant of the Premises remain substantially related to each other, (ii) the Project remains in substantial use for a PIDA-Eligible purpose (as defined in the Assumption Agreement), (iii) the beneficial owner and occupant remain financially responsible, and (iv) the security for the Loan is not impaired; (f) any building, subdivision, use, zoning, environmental or other permit material to the construction of the Project or the use thereof as contemplated in the Application shall be effectively revoked, rescinded, suspended or materially adversely affected or the use of the Project as contemplated in the Application shall have been effectively enjoined or prohibited; (g) there shall have occurred and be continuing, after giving effect to any applicable notice and cure periods, an Event of Default as defined in any of the Loan Documents by any party subject thereto; or (h) a material failure to comply by any party subject thereto with any covenant of this Agreement or any of the Loan Documents, including, but not limited to, the failure to provide job information, insurance information, and annual financial statements required by PIDA under those instruments, shall occur and be continuing after written

(e) the Premises or any interest therein are sold, leased, sub-leased, mortgaged, liened, encumbered, or otherwise conveyed without the prior written consent of PIDA, which consent will not unreasonably be withheld, provided that (i) the beneficial owner and occupant of the Premises remain substantially related to each other, (ii) the Project remains in substantial use for a PIDA-Eligible purpose (as defined in the Assumption Agreement), (iii) the beneficial owner and occupant remain financially responsible, and (iv) the security for the Loan is not impaired; (f) any building, subdivision, use, zoning, environmental or other permit material to the construction of the Project or the use thereof as contemplated in the Application shall be effectively revoked, rescinded, suspended or materially adversely affected or the use of the Project as contemplated in the Application shall have been effectively enjoined or prohibited; (g) there shall have occurred and be continuing, after giving effect to any applicable notice and cure periods, an Event of Default as defined in any of the Loan Documents by any party subject thereto; or (h) a material failure to comply by any party subject thereto with any covenant of this Agreement or any of the Loan Documents, including, but not limited to, the failure to provide job information, insurance information, and annual financial statements required by PIDA under those instruments, shall occur and be continuing after written notice of such failure has been given to such party, with a copy to Borrower, for thirty (30) days or, if such failure shall not be capable of being cured within thirty (30) days, and curative action shall have been initiated within such 30 day period and pursued diligently thereafter, for such time period after notice of such failure has been given to such party, with a copy to Borrower, as shall, in the good faith judgment of PIDA, which shall be conclusive, be required for such cure. Section 9.02. Remedies Upon Event of Default. Immediately and without further notice to any person (including, without limitation, the Borrower or the Industrial Occupant), upon the occurrence of an Event of Default hereunder other than (i) an Event of Default arising solely from a breach by the Industrial Occupant of Section 4.03 "Operations and Number of Jobs" of the Assumption Agreement, pertaining to job creation or retention, or (ii) an Event of Default arising solely from the internal operations of the Borrower over which the Industrial Occupant has no control, during which the Industrial Occupant has paid all amounts required to be paid by them and performed all acts required to be performed by them under each of the Loan Documents, PIDA may exercise any one or more of the following remedies: 12

(a) declare the Note and all liabilities of the Borrower thereunder to be immediately due and payable, and the same shall thereupon become and be due and payable; (b) raise the rate of interest on the Loan as provided in the Note; (c) foreclose on the Mortgage; (d) bring an action (which may be by confession of judgment to the extent permitted by the particular instrument) against the Borrower under the Note and/or the Mortgage, against the Industrial Occupant under the Assumption Agreement and/or the Premises Agreement, as assigned to PIDA by the Assignment; (e) bring an action of ejectment to recover possession of the Premises; and/or (f) exercise any other remedy available to it under any of the Loan Documents or applicable law. Except as expressly required by the particular Loan Document pursuant to which such remedies are exercised or by applicable law, PIDA may exercise any of the foregoing remedies without presentment, demand, protest or notice of any kind to any person (including, without limitation, the Borrower or the Industrial Occupant), all of which are hereby expressly and knowingly waived. Subject solely to the limitation that PIDA is limited to one recovery for the aggregate amounts due and owing under the Loan Documents, PlDA's remedies under the Loan Documents are cumulative and concurrent and

(a) declare the Note and all liabilities of the Borrower thereunder to be immediately due and payable, and the same shall thereupon become and be due and payable; (b) raise the rate of interest on the Loan as provided in the Note; (c) foreclose on the Mortgage; (d) bring an action (which may be by confession of judgment to the extent permitted by the particular instrument) against the Borrower under the Note and/or the Mortgage, against the Industrial Occupant under the Assumption Agreement and/or the Premises Agreement, as assigned to PIDA by the Assignment; (e) bring an action of ejectment to recover possession of the Premises; and/or (f) exercise any other remedy available to it under any of the Loan Documents or applicable law. Except as expressly required by the particular Loan Document pursuant to which such remedies are exercised or by applicable law, PIDA may exercise any of the foregoing remedies without presentment, demand, protest or notice of any kind to any person (including, without limitation, the Borrower or the Industrial Occupant), all of which are hereby expressly and knowingly waived. Subject solely to the limitation that PIDA is limited to one recovery for the aggregate amounts due and owing under the Loan Documents, PlDA's remedies under the Loan Documents are cumulative and concurrent and may, in PlDA's sole discretion, be exercised, deferred, compromised, settled or discontinued without affecting any other remedy available to PIDA under any of the Loan Documents or under applicable law. Notwithstanding anything to the contrary herein contained, so long as the Industrial Occupant shall keep and perform all the provisions, covenants and conditions to be assumed or performed by the Industrial Occupant respectively under the Loan Documents, including the payment of all amounts due thereunder and performance of all obligations set forth therein, PIDA shall not terminate, impair or otherwise adversely affect the rights of the Industrial Occupant thereunder. It is further agreed that PIDA shall use its best efforts to supply the Industrial Occupant with a copy of each notice required to be supplied to Borrower hereunder, but failure to so supply copies of such notices shall not adversely affect any right of PIDA hereunder. 13

Section 9.03. Remedies for Event of Default Arising From Internal Operations of Borrower. Upon the occurrence of an Event of Default arising solely from the internal operations of the Borrower over which the Industrial Occupant has no control, during which the Industrial Occupant and any Guarantor have paid all amounts required to be paid by them and performed all acts required to be performed by them under each of the Loan Documents, PIDA may (i) suspend or revoke the certification of the Borrower as an Industrial Development Agency under the Act, or (ii) initiate or participate or intervene in any action or legal proceeding (including, without limitation, any action or proceeding under the U.S. Bankruptcy Code) to (A) compel compliance with the terms of the Loan Documents, (B) to appoint a trustee or receiver for Borrower or to dissolve, reorganize or liquidate Borrower, or (C) otherwise to protect the interests of PIDA and/or the Industrial Occupant. Section 9.04. Remedies for Event of Default Arising From Failure to Create or Preserve Jobs. Upon the occurrence of an Event of Default arising solely from a breach by the Industrial Occupant of Section 4.03 "Operations and Number of Jobs" of the Assumption Agreement, PIDA may, in compliance with such regulations and statements of policy, if any, as are then in effect, raise the rate of interest on the Loan as permitted under the Note. ARTICLE X Miscellaneous Section 10.01. Obligations Unconditional. The obligations to PIDA under this Agreement and each of the Loan

Section 9.03. Remedies for Event of Default Arising From Internal Operations of Borrower. Upon the occurrence of an Event of Default arising solely from the internal operations of the Borrower over which the Industrial Occupant has no control, during which the Industrial Occupant and any Guarantor have paid all amounts required to be paid by them and performed all acts required to be performed by them under each of the Loan Documents, PIDA may (i) suspend or revoke the certification of the Borrower as an Industrial Development Agency under the Act, or (ii) initiate or participate or intervene in any action or legal proceeding (including, without limitation, any action or proceeding under the U.S. Bankruptcy Code) to (A) compel compliance with the terms of the Loan Documents, (B) to appoint a trustee or receiver for Borrower or to dissolve, reorganize or liquidate Borrower, or (C) otherwise to protect the interests of PIDA and/or the Industrial Occupant. Section 9.04. Remedies for Event of Default Arising From Failure to Create or Preserve Jobs. Upon the occurrence of an Event of Default arising solely from a breach by the Industrial Occupant of Section 4.03 "Operations and Number of Jobs" of the Assumption Agreement, PIDA may, in compliance with such regulations and statements of policy, if any, as are then in effect, raise the rate of interest on the Loan as permitted under the Note. ARTICLE X Miscellaneous Section 10.01. Obligations Unconditional. The obligations to PIDA under this Agreement and each of the Loan Documents shall be absolute and unconditional without defense or set-off by reason of any default by the contractors under the contracts relating to the Project or by PIDA under this Agreement, any of the Loan Documents, or under any other agreement between the Borrower or the Industrial Occupant and PIDA, or for any other reason, including without limitation failure to complete the Project, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, or failure of PIDA to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement, it being the intention of the parties that the payments required under each of the Loan Documents will be paid in full when due without any delay or diminution whatsoever. Payments and additional sums required to be paid to PIDA under any of the Loan Documents shall be received by PIDA as net sums and the Borrower agrees to pay or cause to be paid all charges against or which might diminish such net sums. The provisions of this Section shall not impair the ability of the Borrower or any other persons to bring an independent action against PIDA with respect to any cause of action such person may have against PIDA. Section 10.02. Provisions Complementary. The provisions of this Agreement shall be in addition to those of any other Loan Document. All of such provisions shall be construed as complementary to each other. Nothing 14

contained herein shall prevent PIDA from enforcing any and all of such provisions in accordance with their respective terms. Section 10.03. Rights and Remedies. The terms of all Loan Documents shall be liberally construed in favor of PIDA to effectuate the purposes hereof. No delay or failure on the part of PIDA in exercising any right, power or privilege under any of the Loan Documents shall affect such right, power or privilege; nor shall any single or partial exercise thereof or any abandonment, waiver, or discontinuance of steps to enforce such a right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. The rights and remedies of PIDA under any of the Loan Documents are cumulative and concurrent and not exclusive of any rights or remedies which PIDA might otherwise have. PIDA shall have the right at all times to enforce the provisions of each of the Loan Documents and all related documentation in strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on the part of PIDA in refraining from so doing at any time or times. The failure of PIDA at any time or times to enforce PIDA's rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner contrary to specific provisions of such Loan Documents or any such documentation, or as having in any way or manner modified or waived the same.

contained herein shall prevent PIDA from enforcing any and all of such provisions in accordance with their respective terms. Section 10.03. Rights and Remedies. The terms of all Loan Documents shall be liberally construed in favor of PIDA to effectuate the purposes hereof. No delay or failure on the part of PIDA in exercising any right, power or privilege under any of the Loan Documents shall affect such right, power or privilege; nor shall any single or partial exercise thereof or any abandonment, waiver, or discontinuance of steps to enforce such a right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right, power or privilege. The rights and remedies of PIDA under any of the Loan Documents are cumulative and concurrent and not exclusive of any rights or remedies which PIDA might otherwise have. PIDA shall have the right at all times to enforce the provisions of each of the Loan Documents and all related documentation in strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on the part of PIDA in refraining from so doing at any time or times. The failure of PIDA at any time or times to enforce PIDA's rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner contrary to specific provisions of such Loan Documents or any such documentation, or as having in any way or manner modified or waived the same. Section 10.04. Writing Required. Any permit, consent or approval of any kind or character on the part of PIDA under any of the Loan Documents, and any waiver of any provision or condition thereof, must be in writing and executed by PIDA and shall be effective only to the extent specifically set forth in such writing. Section 10.05. Duration of Covenants. All covenants and agreements of the Borrower or the Industrial Occupant in any of the Loan Documents, or otherwise made in writing in connection herewith, shall survive and continue until the Loan is entirely paid and all of the Borrower's obligations hereunder have been entirely satisfied, unless a longer term is expressly provided for, in which event such longer term shall apply. Section 10.06. Pennsylvania Law to Govern. Each of the Loan Documents shall be deemed to be contracts made under the laws of the Commonwealth of Pennsylvania and, for all purposes, shall be construed in accordance with the laws of such Commonwealth. Section 10.07. Counterparts. Each of the Loan Documents may be executed in as many counterparts as may be deemed necessary and convenient and each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. All signatures need not appear on the same copy of any Loan Document. 15

Section 10.08. PIDA Project Inspections Solely for PlDA's Benefit. It is understood and agreed that PIDA, its agents, servants, invitees and employees, may inspect the plans and specifications for the Project and enter the Premises and conduct such tests, surveys, examinations and inspections (collectively, "Project Inspections") as it shall, from time to time, deem appropriate. The Borrower hereby acknowledges and agrees (i) that such Project Inspections are solely for the protection and benefit of PIDA; (ii) that PIDA, its agents, servants, invitees and employees including, without limitation, the PIDA Engineer carry no responsibility whatsoever for the design or construction of the Project, its quality or the compliance or lack of compliance with the plans and specifications, (iii) that any engineering report issued by the PIDA Engineer as to the quantity and quality of work is for the benefit of PIDA only and (iv) that the engineering certifications by the PIDA Engineer are not certifications of compliance by the contractor with the building specifications or of the quality of the work, nor are they intended as construction supervision. Section 10.09. Setoff. The Borrower agrees that the Commonwealth of Pennsylvania may set off the amount of any state tax liability or other debt of the Borrower or its respective subsidiaries that is owed to the Commonwealth and not being contested on appeal against any payments due the Borrower under this or any other contract with the Commonwealth. Section 10.10. Borrower Responsibility. Included in and made a part of this Agreement is Exhibit 10.10, a clause pertaining to Borrower Responsibility.

Section 10.08. PIDA Project Inspections Solely for PlDA's Benefit. It is understood and agreed that PIDA, its agents, servants, invitees and employees, may inspect the plans and specifications for the Project and enter the Premises and conduct such tests, surveys, examinations and inspections (collectively, "Project Inspections") as it shall, from time to time, deem appropriate. The Borrower hereby acknowledges and agrees (i) that such Project Inspections are solely for the protection and benefit of PIDA; (ii) that PIDA, its agents, servants, invitees and employees including, without limitation, the PIDA Engineer carry no responsibility whatsoever for the design or construction of the Project, its quality or the compliance or lack of compliance with the plans and specifications, (iii) that any engineering report issued by the PIDA Engineer as to the quantity and quality of work is for the benefit of PIDA only and (iv) that the engineering certifications by the PIDA Engineer are not certifications of compliance by the contractor with the building specifications or of the quality of the work, nor are they intended as construction supervision. Section 10.09. Setoff. The Borrower agrees that the Commonwealth of Pennsylvania may set off the amount of any state tax liability or other debt of the Borrower or its respective subsidiaries that is owed to the Commonwealth and not being contested on appeal against any payments due the Borrower under this or any other contract with the Commonwealth. Section 10.10. Borrower Responsibility. Included in and made a part of this Agreement is Exhibit 10.10, a clause pertaining to Borrower Responsibility. Section 10.11. Borrower Integrity. The Borrower represents, warrants and covenants that it currently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of its obligations hereunder. Included in and made a part of this Agreement is Exhibit 10.11, a clause pertaining to Borrower Integrity. Section 10.12. Americans with Disabilities Act. Included in and made a part of this Agreement is Exhibit 10.12, a clause pertaining to compliance with the Americans with Disabilities Act. Section 10.13. Successors and Assigns. This Agreement and each of the Loan Documents shall inure to the benefit of, and shall be binding upon, the respective successors and assigns of PIDA and the Borrower. Although PIDA has no present intention to convey, pledge or otherwise assign its rights under the Loan Documents, it may nevertheless do so in whole or in part without notice to any person (including, without limitation, the Borrower and the Industrial Occupant). The Borrower has no right to assign any of its rights or obligations hereunder or under any of the Loan Documents without the prior written consent of PIDA, and any such assignment without the prior written consent of PIDA shall be void. 16

The Borrower and PIDA intend that no person (other than Industrial Occupant) shall have any claim or interest under this Agreement or right of action hereunder. Section 10.14. Notices. Notices required hereunder, or any correspondence concerning this Agreement shall be directed to the following addresses and shall be deemed properly given (a) if delivered by hand, (b) if sent by certified mail, return receipt requested, postage prepaid, or by recognized overnight courier service (including, without limitation, Federal Express or United Parcel Service overnight service), charges prepaid; or (c) if sent by facsimile, with a copy sent by first class U.S. Mail, postage prepaid. To PIDA: PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY c/o Department of Commerce 480 Forum Building Harrisburg, Pennsylvania 17120 FAX: (717) 234-4560 Attention: Executive Director To Borrower:

The Borrower and PIDA intend that no person (other than Industrial Occupant) shall have any claim or interest under this Agreement or right of action hereunder. Section 10.14. Notices. Notices required hereunder, or any correspondence concerning this Agreement shall be directed to the following addresses and shall be deemed properly given (a) if delivered by hand, (b) if sent by certified mail, return receipt requested, postage prepaid, or by recognized overnight courier service (including, without limitation, Federal Express or United Parcel Service overnight service), charges prepaid; or (c) if sent by facsimile, with a copy sent by first class U.S. Mail, postage prepaid. To PIDA: PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY c/o Department of Commerce 480 Forum Building Harrisburg, Pennsylvania 17120 FAX: (717) 234-4560 Attention: Executive Director To Borrower: PIDC FINANCING CORPORATION 2600 Centre Square West 1500 Market Street Philadelphia, Pennsylvania 19102 Attention: President and Chief Executive Officer Notices and communications hereunder shall be deemed sufficiently given when dispatched pursuant to the foregoing provisions. Notices and communications delivered by hand shall be effective upon receipt; notices and communications sent by fax, with a copy by first class U.S. Mail, shall be effective upon dispatch; notices and communications sent by recognized overnight courier service shall be effective on the business day following dispatch; and notices sent by certified mail shall be effective on the third business day following dispatch. The parties hereto may, by a notice given hereunder, designate any further or different addresses to which any subsequent notice or communication hereunder shall be sent. Section 10.15. Severability. If any provision hereof or of the Loan Documents is found by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction, it shall be ineffective as to such jurisdiction only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision as to such jurisdiction to the extent it is not prohibited or unenforceable, nor invalidate such provision in any other jurisdiction, nor invalidate the other provisions of the Loan Documents, all of which shall be liberally construed in favor of PIDA in order to effect the provisions of this Agreement. Notwithstanding anything 17

to the contrary herein contained, the total liability of the Borrower for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable law to be contracted for, charged or received, and if any payments by the Borrower to PIDA include interest in excess of such a maximum amount, PIDA shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shall be refunded to the Borrower; provided that, to the extent permitted by applicable law, in the event the interest is not collected, is applied to principal or is refunded pursuant to this sentence and interest thereafter payable pursuant hereto shall be less than such maximum amount, then such interest thereafter so payable shall be increased up to such maximum amount to the extent necessary to recover the amount of interest, if any, theretofore uncollected, applied to principal or refunded pursuant to this sentence. Any such application or refund shall not cure or waive any Event of Default. In determining whether or not any interest payable under the Loan Documents exceeds the highest rate permitted by law, any nonprincipal payment (except payments specifically stated to be "interest") shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest.

to the contrary herein contained, the total liability of the Borrower for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable law to be contracted for, charged or received, and if any payments by the Borrower to PIDA include interest in excess of such a maximum amount, PIDA shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shall be refunded to the Borrower; provided that, to the extent permitted by applicable law, in the event the interest is not collected, is applied to principal or is refunded pursuant to this sentence and interest thereafter payable pursuant hereto shall be less than such maximum amount, then such interest thereafter so payable shall be increased up to such maximum amount to the extent necessary to recover the amount of interest, if any, theretofore uncollected, applied to principal or refunded pursuant to this sentence. Any such application or refund shall not cure or waive any Event of Default. In determining whether or not any interest payable under the Loan Documents exceeds the highest rate permitted by law, any nonprincipal payment (except payments specifically stated to be "interest") shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest. Section 10.16. Consent to Jurisdiction. The Borrower hereby irrevocably (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement or the Loan Documents may be brought in any federal or state court located in or whose district includes Harrisburg, Pennsylvania or the county wherein the Project is located and consents to the jurisdiction of such court in any such suit, action or proceeding, and (b) waives any objection which it may have to the laying of venue of any such suit, action or proceeding in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. The Borrower hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by mailing of copies of such process to the Borrower at its address provided under or pursuant to Section 10.14. The Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. All mailings under this section shall be by certified or registered mail, return receipt requested. Nothing in this section shall affect the right of PIDA to serve legal process in any other manner permitted by law or affect the right of PIDA to bring any suit, action or proceeding against the Borrower or Borrower's property in the courts of any other jurisdiction. Section 10.17. Defined Terms. In each of the Loan Documents, unless otherwise indicated, (i) defined terms may be used in the singular or the plural and the use of any gender includes all genders, (ii) the words, "hereof', "herein", "hereto", "hereby" and "hereunder" refer to the particular Loan Document in which they occur in such document's entirety, (iii) the term, the "Loan Documents", and the words, "thereof", "therein", "thereto", "thereby" and "thereunder" refer to all the Loan Documents, taken together as a whole, (iv) all references to particular Articles, Sections or Paragraphs are references to the particular Article, Section or Paragraph of the particular Loan Document in which such references occur. 18

Section 10.18. Incorporation by Reference. All exhibits to this Agreement and the terms of all Loan Documents shall be incorporated herein by reference as though expressly set forth herein. Section 10.19. Descriptive Headings. Descriptive headings of the several Articles and Sections of each of the Loan Documents are intended for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 10.20. Further Assurances. The Borrower, from time to time, shall execute such further instruments as PIDA may reasonably request to further confirm and assure the interests and rights created or intended to be created in favor of PIDA hereunder or under the Loan Documents. Section 10.21. Complete Agreement. The Loan Documents constitute the entire agreement between PIDA and the Borrower with respect to the Project and the Loan. The Loan Documents supersede and replace all prior agreements related to the subject matter thereof including, without limitation, the Commitment, except to the extent such prior agreements are expressly incorporated by reference or otherwise referred to. This Agreement, the Premises Agreement, the Assignment, and the Assumption Agreement may be modified or amended only by a written instrument duly executed by PIDA, the Borrower, and the Industrial Occupant. Each of the remaining Loan Documents may be modified only by a written instrument duly executed by PIDA and the remaining parties to the particular Loan Document.

Section 10.18. Incorporation by Reference. All exhibits to this Agreement and the terms of all Loan Documents shall be incorporated herein by reference as though expressly set forth herein. Section 10.19. Descriptive Headings. Descriptive headings of the several Articles and Sections of each of the Loan Documents are intended for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 10.20. Further Assurances. The Borrower, from time to time, shall execute such further instruments as PIDA may reasonably request to further confirm and assure the interests and rights created or intended to be created in favor of PIDA hereunder or under the Loan Documents. Section 10.21. Complete Agreement. The Loan Documents constitute the entire agreement between PIDA and the Borrower with respect to the Project and the Loan. The Loan Documents supersede and replace all prior agreements related to the subject matter thereof including, without limitation, the Commitment, except to the extent such prior agreements are expressly incorporated by reference or otherwise referred to. This Agreement, the Premises Agreement, the Assignment, and the Assumption Agreement may be modified or amended only by a written instrument duly executed by PIDA, the Borrower, and the Industrial Occupant. Each of the remaining Loan Documents may be modified only by a written instrument duly executed by PIDA and the remaining parties to the particular Loan Document. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
ATTEST: /s/ Pascula M. Hunter --------------------Assistant Secretary THE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY By: /s/ Marguerite Harris ----------------------------Administrator PIDC FINANCING CORPORATION By: /s/ Joseph J. Aylmer ----------------------------Senior Vice President

(CORPORATE SEAL) ATTEST: /s/ Joseph A. Mee --------------------Assistant Secretary

(CORPORATE SEAL)

19

EXHIBIT 11 MOTHERS WORK, INC. AND SUBSIDIARIES COMPUTATION OF PRIMARY EARNINGS (LOSS) PER COMMON SHARE
Year Ended September 30 ----------------------1994 1995 1996 -----------------------------================================================================================ Average shares outstanding 3,108,886 3,120,535 3,269,290

- -------------------------------------------------------------------------------Net effect of dilutive stock options and warrants

77,999 ---------3,186,885 ==========

-----------3,120,535 ===========

-----------3,269,290 ===========

EXHIBIT 11 MOTHERS WORK, INC. AND SUBSIDIARIES COMPUTATION OF PRIMARY EARNINGS (LOSS) PER COMMON SHARE
Year Ended September 30 ----------------------1994 1995 1996 -----------------------------================================================================================ Average shares outstanding 3,108,886 3,120,535 3,269,290

- -------------------------------------------------------------------------------Net effect of dilutive stock options and warrants

77,999 ---------3,186,885 ==========

-----------3,120,535 ===========

-----------3,269,290 ===========

- -------------------------------------------------------------------------------Net income (loss) $1,845,851 $(6,635,854) $ 903,766

- -------------------------------------------------------------------------------Preferred stock dividends ----------(162,916) ----------(977,500) -----------

- -------------------------------------------------------------------------------Net income (loss) applicable to common stockholders $1,845,851 ========== $(6,798,770) =========== $ (73,734) ===========

- -------------------------------------------------------------------------------Per common share amount: - -------------------------------------------------------------------------------Before extraordinary item $ .58 $ (.83) $ (.02)

- -------------------------------------------------------------------------------Extraordinary item ----------$ .58 ========== (1.35) ----------(2.18) =========== -----------$ (.02) ===========

EXHIBIT 21 SUBSIDIARIES OF THE COMPANY
Name Under Which Subsidiary Does Business ------------Cave Springs A Pea in the Pod Motherhood

Name of Subsidiary - ---------Cave Springs, Inc. Mothers Work (R.E.), Inc. Motherhood Maternity Shops, Inc.

Jurisdiction of Incorporation ------------Delaware Pennsylvania Delaware

EXHIBIT 21 SUBSIDIARIES OF THE COMPANY
Name Under Which Subsidiary Does Business ------------Cave Springs A Pea in the Pod Motherhood Maternite

Name of Subsidiary - ---------Cave Springs, Inc. Mothers Work (R.E.), Inc. Motherhood Maternity Shops, Inc. The Page Boy Company, Inc.

Jurisdiction of Incorporation ------------Delaware Pennsylvania Delaware Delaware

Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statements File Nos. 33-64580, 333-2404, 333-3480 and 333-12321. Arthur Andersen LLP Philadelphia, PA December 16, 1996

ARTICLE 5 The schedule contains summary financial information extracted from the Company's 1996 10-K and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION

12 MOS SEP 30 1996 OCT 01 1995 SEP 30 1996 1,262,435 0 2,288,026 0 57,209,499 66,366,032 58,646,989 (13,195,875) 164,612,738 28,930,889 96,680,722 0 11,500,000 35,593 23,570,921 164,612,738 199,179,984 199,179,984 88,416,648 88,416,648 0 0

Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statements File Nos. 33-64580, 333-2404, 333-3480 and 333-12321. Arthur Andersen LLP Philadelphia, PA December 16, 1996

ARTICLE 5 The schedule contains summary financial information extracted from the Company's 1996 10-K and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

12 MOS SEP 30 1996 OCT 01 1995 SEP 30 1996 1,262,435 0 2,288,026 0 57,209,499 66,366,032 58,646,989 (13,195,875) 164,612,738 28,930,889 96,680,722 0 11,500,000 35,593 23,570,921 164,612,738 199,179,984 199,179,984 88,416,648 88,416,648 0 0 12,864,351 2,732,338 1,828,572 903,766 0 0 0 903,766 (.02) (.02)

ARTICLE 5 The schedule contains summary financial information extracted from the Company's 1996 10-K and is qualified in its entirety by reference to such financial statements. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

12 MOS SEP 30 1996 OCT 01 1995 SEP 30 1996 1,262,435 0 2,288,026 0 57,209,499 66,366,032 58,646,989 (13,195,875) 164,612,738 28,930,889 96,680,722 0 11,500,000 35,593 23,570,921 164,612,738 199,179,984 199,179,984 88,416,648 88,416,648 0 0 12,864,351 2,732,338 1,828,572 903,766 0 0 0 903,766 (.02) (.02)