Document:

EXHIBIT 10.10 

August 23, 2007 

To:     The
Holders listed on Schedule I hereto 

Re:     Current Conversion Price of the warrants
listed on Schedule I hereto (the “Warrants”) 

Dear Warrant Holder: 

     Pursuant
to the terms of the Warrants, Emisphere Technologies, Inc. (the “Company”) is
required to provide you with notice upon any antidilution adjustments to the
exercise price of the Warrants. As described below, the Company has consummated
a financing that results in a new exercise price for shares subject to the
Warrants of $3.76. 

     According
to the terms and conditions of the Warrants, the exercise price for each share
of Common Stock is $4.00. Thereafter, certain antidilution adjustments to the
exercise price are required to be made upon the occurrence of certain
events.

     On August
22, 2007, the Company completed the sale (the “Offering”) of 2,000,000 shares of
Common Stock and warrants to purchase 400,000 shares of Common Stock. The shares
of Common Stock and warrants were sold together as units for a negotiated sales
price of $3.785. The Common Stock sold in the Offering had a deemed per share
price of $3.76 per share, the last reported sale price for our common stock on
the Nasdaq Global Market on August 16, 2007. Therefore, pursuant to the terms of
the Warrants, the Offering resulted in the automatic adjustment of the Exercise
Price to $3.76, which is the lowest per share price received in the
Offering.

     The value
of the warrant coverage for the warrants sold in the Offering was $0.025. Based
on the 20% level of warrant coverage, the consideration received for a warrant
to purchase one full share of Common Stock is $0.125 ($0.025 multiplied by 5).
The warrants are also subject to an exercise price of $3.948 per share of common
stock, resulting in a total price for each share of Common Stock subject to the
warrants of $0.125 plus $3.948, or $4.073. Therefore, the sale of the warrants
in the Offering does not trigger any further antidilution adjustment to the
exercise price of the Warrants.

     If you have any questions regarding
this notice, please contact William T. Rumble by telephone at (914) 785-4717.

Very truly yours, 

 

	By: 	/s/ Michael V. Novinski
	Michael V. Novinski
	President and Chief Executive
Officer

SCHEDULE I 

	Holder 
    	Warrant 
    	Issue
      Date  	Expiration  	Equivalent
      Shares         
	   	No.  	  	Date 
	Outstanding  
	MHR Capital Partners (100)
      LP  	A-5  	9/23/2005  	3/31/2010  	47,152 
    
	 	 	 	 	 
	MHR Capital Partners
      Master  	A-6  	9/23/2005  	3/31/2010  	340,222 
    
	Account LP (formerly MHR
      Capital  	   	   	   	   
	Partners (500)
      LP)  	   	   	   	   
	MHR Institutional Partners IIA
      LP  	A-12  	9/21/2006  	9/26/2011  	37,030 
    
	 	 	 	 	 
	MHR Institutional Partners II
      LP  	A-13  	9/21/2006  	9/26/2011  	14,698 
    
	 	  	 	 	 
	MHR Capital Partners (100)
      LP  	A-14  	9/21/2006  	9/26/2011  	68,809 
    
	 	 	 	 	 
	MHR Capital Partners
      Master  	A-15  	9/21/2006  	9/26/2011  	496,674 
    
	Account
      LPEXHIBIT 10.11 

August 30, 2007 

To:     Michael B. Targoff 

Re:     Adjustments to warrant No. A16 issued by
Emisphere Technologies, Inc. on September 23, 2005 (the “Warrant”) 

Dear Warrant Holder: 

     Pursuant
to the terms of the Warrant, Emisphere Technologies, Inc. (the “Company”) is
required to provide you with notice upon any antidilution adjustments. As
described below, the Company has consummated a financing that results in a new
exercise price for shares subject to the Warrant of $3.98. Additionally, the
Warrant now entitles you to purchase from the Company up to a total of 402,138
shares of common stock of the Company (“Common Stock”).

     According
to the terms and conditions of the Warrant, the Warrant entitles the holder to
purchase up to 400,127 shares of Common Stock at an exercise price for each
share of Common Stock of $4.00 (“Warrant Shares”). Thereafter, certain
antidilution adjustments are required to be made upon the occurrence of certain
events.

     On August 22, 2007, the Company
completed the sale (the “Offering”) of 2,000,000 shares of Common Stock and
warrants to purchase 400,000 shares of Common Stock. The shares of Common Stock
and warrants were sold together as units for a negotiated sales price of $3.785.
The Common Stock sold in the Offering had a deemed per share price of $3.76 per
share, the last reported sale price for our common stock on the Nasdaq Global
Market on August 16, 2007. Therefore, pursuant to the terms of the Warrant, the
Offering resulted in the automatic adjustment of the Exercise Price to $3.98 and
of the Warrant Shares to 402,138. The calculation reflecting these adjustments
is shown below.

     The value
of the warrant coverage for the warrants sold in the Offering was $0.025. Based
on the 20% level of warrant coverage, the consideration received for a warrant
to purchase one full share of Common Stock is $0.125 ($0.025 multiplied by 5).
The warrants are also subject to an exercise price of $3.948 per share of common
stock, resulting in a total price for each share of Common Stock subject to the
warrants of $4.073 ($0.125 plus $3.948). Therefore, the sale of the warrants in
the Offering does not trigger any further antidilution adjustment to the
exercise price of the Warrant.

Adjustment Calculations

Adjustment to Exercise
Price 

     The
Warrant provides that upon the issuance of Additional Shares of Common Stock (as
defined in the Warrant), without consideration or for a consideration per share
less than the Exercise Price in effect on the date of and immediately prior to
such issue, the Exercise Price shall be reduced to a price (calculated to the
nearest cent) determined in accordance with the following formula: 

	New Exercise
      Price =  	EP1  
    	x 
     	CS1  + 
      AS1 
	  	  	  	CS1 
      +  AS2 

where 

EP1 = the
Exercise Price then in effect; 
CS1 = the
total number of shares of Common Stock outstanding immediately prior to such
issue calculated on a fully diluted basis, as if all convertible securities had
been fully converted into shares of Common Stock and any outstanding options
bearing an exercise price lower than the price at which the Additional Shares of
Common Stock were issued had been fully exercised as of such date; 
AS1 = the
total number of Additional Shares of Common Stock that would have been issued at
the aggregate consideration received by the Company at the Exercise Price in
effect immediately prior to such issuance; and 
AS2 = the total number of
Additional Shares of Common Stock issued. 

New Exercise
Price = $4.00   x   29,450,133 + 1,880,000 
 
29,450,133 + 2,000,000 

New Exercise
Price = $4.00   x   31,330,133 
 
31,450,133 

New Exercise
Price = $3.98 

Adjustment to Share
Number 

     The
Warrant provides that upon each adjustment of the Exercise Price, the number of
Warrant Shares shall be adjusted by multiplying such number of Warrant Shares by
a fraction, the numerator of which shall be the Exercise Price in effect
immediately prior to such adjustment and the denominator of which shall be the
Exercise Price in effect after giving effect to such adjustment.

     New Warrant Shares =
400,127   x   $4.00 
          $3.98

     New Warrant Shares =
402,138

     If you have any questions regarding
this notice, please contact William T. Rumble by telephone at (914) 785-4717.

Very truly yours, 

 

	By: 	/s/ William T. Rumble
	William T. Rumble
	Corporate ControllerEXHIBIT 10.12 

CEDAR KNOLLS CORPORATE CENTER
240
CEDAR KNOLLS ROAD 
CEDAR KNOLLS, NEW
JERSEY 07927 

STANDARD OFFICE LEASE 

	1.	 	Basic
      Lease Provisions.
	 
	 		1.1.	 	Parties: This Lease, dated for reference purposes only October
      25, 2007, is made by and between THE
      REALTY ASSOCIATES FUND VI, L.P., a
      Delaware limited partnership ("Landlord") and EMISPHERE TECHNOLOGIES, INC., a Delaware corporation ("Tenant"). The Tenant’s Employer
      Identification Number is 13-3306985.
	 
	 		1.2		Premises: A portion of the
      second floor known as Suite 200, as shown on Exhibit “A” attached hereto
      (the "Premises").
	 
	 		1.3.		Rentable Area of
      Premises: 15,281 rentable square
      feet.
	 
	 		1.4.		Building
      Address: 240 Cedar Knolls Road, Cedar
      Knolls, Hanover Township, New Jersey
	 
	 		1.5.		Use: General and administrative office use, subject to the
      requirements and limitations contained in Section 7.
	 
	 		1.6.		Term: Five (5) years and three
      (3) months.
	 
	 		1.7.		Commencement
      Date: November 1, 2007.
	 
	 		1.8.	    	Base Rent and
      Electric Energy Charge:
	 
	 		 		Base Rent:
	 

	Lease
      Period  	Monthly Base
      Rent  	Annual Base
      Rent  	Annual
      Base  
	   	   	(annualized
      amount)  	Rent per
      RSF  
	11/01/07 –
      10/31/08*  	$27,378.46  	$328,541.52  	$21.50  
	11/01/08 –
      10/31/09   	$28,015.17  	$336,182.04  	$22.00  
	11/01/09 –
      10/31/10   	$28,651.88  	$343,822.56  	$22.50  
	11/01/10 –
      10/31/11   	$29,288.58  	$351,462.96  	$23.00  
	11/01/11 –
      10/31/12   	$29,925.29  	$359,103.48  	$23.50  
	11/01/12 –
      01/31/13   	$30,562.00  	$366,744.00  	$24.00  

*Notwithstanding anything to the contrary contained herein, Landlord
hereby agrees to conditionally waive the monthly installments of Base Rent due
with respect to the Premises for the period commencing on the Commencement Date
and ending January 31, 2008 (the “Base Rent Abatement”). Subject to the terms
and conditions set forth herein, Tenant’s obligation to pay Base Rent shall
commence on February 1, 2008. No amounts due to Landlord under the Lease other
than the Base Rent Abatement referred to above shall be conditionally waived,
except as expressly provided to the contrary in the Lease. If the Commencement
Date is other than the first day of the of a month, then any Base Rent for the
period following the Commencement Date which is for less than one calendar month
shall be prorated based upon the actual number of days of the calendar month
involved. Nothing herein shall be construed to waive Tenant’s obligation to pay
the first month’s Base Rent upon Tenant’s execution of the Lease pursuant to
Section 5 below, which such amount shall be applied to the Base Rent payable for
the month of February, 2008. In the event Tenant commits a default as defined in
Section 13.1 of the Lease, Base Rent coming due thereafter shall not be waived,
and all Base Rent that Landlord conditionally waived in the past shall be
immediately due and payable by Tenant to Landlord without notice or demand from
Landlord. If the Lease expires in accordance with its terms, and does not
terminate as a result of a default by Tenant, Landlord agrees to permanently
waive the Base Rent it has conditionally waived.

	     	 	 	Electric Energy Charge:
      The Electric Energy Charge shall be measured by
      a checkmeter and reimbursed by Tenant in accordance with Section 11.6
      below.
		 
		1.9.	 	Base Rent Paid Upon
      Execution: $27,378.46 for the first
      full month of the Lease for which Base Rent is payable
  hereunder.
		 
		1.10.	 	Security
      Deposit: $246,406.14, in the form of an
      unconditional, irrevocable letter of credit more fully described in
      Paragraph 1 of the Addendum.
		 
		1.11.	 	Tenant's Share
      (i.e. proportionate share for purposes of Operating Expenses and Real
      Property Taxes): 13.02%.
		 
		1.12.	 	Base
      Year: The calendar year
  2008.
		 
		1.13.	 	Number of Parking
      Spaces: Reserved: Six (6) (in the
      location designated on Exhibit A-1 attached hereto); Unreserved:
      Fifty-Five (55). For purposes herein, said reserved space shall only be
      reserved during the hours of 8:00 a.m. until 6:00 p.m. Monday through
      Friday (excluding legal holidays).
		 		      		
		1.14.	 	Initial Monthly
      Parking Rates Per Space:
  None.
		 
		1.15.	 	Real Estate
      Broker(s): Kwartler Associates, Inc.,
      representing Landlord, and Cushman & Wakefield of New Jersey, Inc.,
      representing Tenant.
		 
		1.16.	 	Attachments to
      Lease: Addendum; Exhibit A -
      "Premises", Exhibit A-1 - "Location of Reserved Parking”; Exhibit B -
      "Verification Letter", Exhibit C - "Rules and Regulations", Exhibit D -
      “Form of Letter of Credit”, Exhibit E - "Janitorial and Maintenance
      Services", Schedule 1 - "Work Letter Agreement”, and Schedule 1-A -
      "Improvements (Scope of Work”).
		 
		1.17.	 	Address for
      Notices:
		 
		 		Landlord:	    	The Realty Associates Fund IV,
    L.P. 
						c/o Kwartler Associates, Inc.
						2 North Street
		 		 		Waldwick, New Jersey
      07463-1804
				 		
				With Copy To:		TA Associates Realty
						28 State Street
		 		 		Boston, Massachusetts
    02109
		 		 		Attention: Asset
  Manager
		 
		 		Tenant:		Emisphere Technologies, Inc.
      
						240 Cedar Knolls Road, Suite 200
  
						Cedar Knolls, New Jersey 07927 
						Attention: Chief Financial
  Officer
		 
		 		With Copy To:		Emisphere Technologies, Inc.
      
						240 Cedar Knolls Road, Suite 200
  
						Cedar Knolls, New Jersey 07927 
						Attention: General Counsel
		 
		 		A copy of any
      notices of default given to Tenant shall also be provided
      to:
		 		 		Price, Meese, Shulman &
      D’Arminio, P.C. 
						50 Tice Boulevard –
      3rd Floor 
						Woodcliff Lake, New Jersey 07677
  
						Attention: Michael K. Breen,
  Esq.
		 
		1.18.		Agent for Service of
      Process: The name and address of
      Tenant's registered agent for service of process is:
		 		 		United States Corporation
      Company 
						27-11 Centerville Road, Suite 400
  
						Wilmington, Delaware 19808
				 		 
		1.19.		Tenant’s North American
      Industry Classification System (herein "NAICS") Number: 551114, as determined by reference to the NAICS Manual and its
      operations shall consist of the Use described in Section
    1.5.
		 

2. Premises. 

     2.1 Lease
of Premises. The "Project" consists of one
(1) building (the "Building"), the Common Areas (as defined below), the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, including all parking facilities. Landlord hereby leases
to Tenant, and Tenant hereby leases from Landlord, upon all of the conditions
set forth herein the Premises, together with the non-exclusive right to use the
Common Areas as hereinafter specified. The Premises shall not include an
easement for light, air or view. 

    
2.2 Calculation of Size of Building and Premises.
All provisions included in this Lease
relating to the number of rentable square feet in the Premises, including, but
not limited to, Base Rent and Tenant's Share, shall reflect the number of
rentable square feet in the Premises and in the Building. The calculation of the
number of rentable square feet in the Premises is specified in Section 1.3
hereinabove. 

    
2.3 Common Areas-Defined. The term "Common Areas" is defined as all areas and facilities outside
the Premises and within the exterior boundary line of the Project that are
designated by Landlord from time to time for the general non-exclusive use of
Landlord, Tenant and the other tenants of the Project and their respective
employees, suppliers, customers and invitees, including, but not limited to,
common entrances, lobbies, corridors, stairwells, public restrooms, elevators,
parking areas, loading and unloading areas, roadways and sidewalks. Landlord may
also designate other land and improvements outside the boundaries of the Project
to be a part of the Common Areas, provided that such other land and improvements
have a reasonable and functional relationship to the Project.

3. Term. 

    
3.1 Term and Commencement Date. The Term and Commencement Date of this Lease are as specified in Sections
1.6 and 1.7. Following the Commencement Date, Tenant shall, within ten (10)
business days after Landlord's request, complete and execute the letter attached
hereto as Exhibit "B" and deliver it to Landlord. Tenant's failure to execute
the letter attached hereto as Exhibit "B" within said ten (10) business day
period shall be a default hereunder and shall constitute Tenant's acknowledgment
of the truth of the facts contained in the letter delivered by Landlord to
Tenant.

    
3.2 Delay in Possession. Notwithstanding the Commencement Date specified in Section 1.7, if for
any reason Landlord cannot deliver possession of the Premises to Tenant on said
date, Landlord shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Tenant hereunder
or extend the Term hereof; provided, however, in such a case, Tenant shall not
be obligated to pay rent or perform any other obligation of Tenant under this
Lease, except as may be otherwise provided in this Lease, until possession of
the Premises is tendered to Tenant, as defined in Section 3.4. If Landlord shall
not have tendered possession of the Premises to Tenant within sixty (60) days
following the Commencement Date specified in Section 1.7, Tenant may, at
Tenant's option, by notice in writing to Landlord within ten (10) days after the
expiration of the sixty (60) day period, terminate this Lease. If Tenant
terminates this Lease as provided in the preceding sentence, the parties shall
be discharged from all obligations hereunder, except that Landlord shall return
any money previously deposited with Landlord by Tenant; and provided further,
that if such written notice by Tenant is not received by Landlord within said
ten (10) day period, Tenant shall not have the right to terminate this Lease as
provided above unless Landlord fails to tender possession of the Premises to
Tenant within one hundred twenty (120) days following the Commencement Date
specified in Section 1.7. If Landlord is unable to deliver possession of the
Premises to Tenant on the Commencement Date due to a "Force Majeure Event," the
Commencement Date shall be extended by the period of the delay caused by the
Force Majeure Event. A Force Majeure Event shall mean fire, earthquake, weather
delays or other acts of God, strikes, boycotts, war, riot, insurrection,
embargoes, shortages of equipment, labor or materials, delays in issuance of
governmental permits or approvals, or any other cause beyond the reasonable
control of Landlord. 

    
3.3 [Intentionally
omitted]

    
3.4 Tender of Possession. Landlord shall use commercially reasonable efforts to complete
Improvements (defined in Paragraph 2 of the Addendum) on or before the
Commencement Date. Possession of the Premises shall be deemed tendered to Tenant
on the Commencement Date set forth in Section 1.7 provided Landlord has actually
delivered possession of the Premises to Tenant and whether or not the
Improvements have been substantially completed. 

     3.5 Early Possession.
If Tenant occupies the Premises prior to
the Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Tenant shall
pay Base Rent and all other charges provided for in this Lease during the period
of such occupancy. Provided that Tenant does not interfere with or delay the
completion by Landlord or its agents or contractors of the construction of any
tenant improvements, Tenant shall have the right to enter the Premises up to
fourteen (14) days prior to the anticipated Commencement Date for the purpose of
installing furniture, trade fixtures, equipment, and similar items. Provided
that Tenant has not begun operating its business from the Premises, and subject
to all of the terms and conditions of the Lease, the foregoing activity shall
not constitute the delivery of possession of the Premises to Tenant and the
Lease Term shall not commence as a result of said activities. Prior to entering
the Premises Tenant shall obtain all insurance it is required to obtain by the
Lease and shall provide certificates of said insurance to Landlord. 

4. Rent.

    
4.1 Base Rent (also referred to as "Fixed Rent").
Subject to adjustment as hereinafter
provided in Section 5 of the Lease and subject to the provisions set forth in
Section 1.8 above, Tenant shall pay to Landlord the Base Rent for the Premises
set forth in Section 1.8, without offset or deduction on the first day of each
calendar month. At the time Tenant executes this Lease it shall pay to Landlord
the advance Base Rent described in Section 1.9. Base Rent for any period during
the Term hereof which is for less than one month shall be prorated based upon
the actual number of days of the calendar month involved. Base Rent and all
other amounts payable to Landlord hereunder shall be payable to Landlord in
lawful money of the United States at the address stated herein or to such other
persons or at such other places as Landlord may designate in writing.

5. Adjustments in Rent (also
referred to as "Additional Rent"). 

    
5.1 Operating Expense Increases. Tenant shall pay to Landlord during the Term hereof, in addition to the
Base Rent, Tenant's Share of the amount by which all Operating Expenses for each
Comparison Year exceeds the amount of all Operating Expenses for the Base Year.
If less than 95% of the rentable square feet in the Project is occupied by
tenants or Landlord is not supplying services to 95% of the rentable square feet
of the Project at any time during any calendar year (including the Base Year),
Operating Expenses for such calendar year shall be an amount equal to the
Operating Expenses which would normally be expected to be incurred had 95% of
the Project's rentable square feet been occupied and had Landlord been supplying
services to 95% of the Project's rentable square feet throughout such calendar
year. Tenant's Share of Operating Expense increases shall be determined in
accordance with the following provisions:

          (a) "Base
Year" as used in this Section 5, shall mean the calendar year (January through
December) set forth in Section 1.12. “Base Year Expenses” shall mean the
Operating Expenses for the Base Year (as grossed up pursuant to Section 5.1
above). 

          (b)
"Tenant's Share" is defined as the percentage set forth in Section 1.11, which
percentage has been determined by dividing the number of rentable square feet
attributed to the Premises by the total number of rentable square feet in the
Building and multiplying the resulting quotient by one hundred (100). In the event
that the number of rentable square feet in the Building or the Premises changes,
Tenant's Share shall be adjusted in the year the change occurs, and Tenant's
Share for such year shall be determined on the basis of the days during such
year that each Tenant's Share was in effect. 

          (c)
"Comparison Year" is defined as each calendar year during the Term of this Lease
subsequent to the Base Year. "Comparison Expenses" are those Operating
Expenses occurring during a Comparison Year, to be compared to Base Year Expenses.
Tenant's Share of the Operating Expense increases for the last Comparison Year
of the Term shall be prorated according to that portion of such Comparison Year
as to which Tenant is responsible for a share of such increase. 

          (d)
"Operating Expenses" shall include all costs, expenses and fees incurred by
Landlord in connection with or attributable to the Project, including but not
limited to, the following items: (i) all costs, expenses and fees associated
with or attributable to the ownership, management, operation, repair,
maintenance, improvement, alteration and replacement of the Project, or any part
thereof, including but not limited to, the following: (A) all surfaces,
coverings, decorative items, carpets, drapes, window coverings, parking areas,
loading and unloading areas, trash areas, roadways, sidewalks, stairways,
landscaped areas, striping, bumpers, irrigation systems, lighting facilities,
building exteriors and roofs, fences and gates; (B) all heating, ventilating and
air conditioning equipment ("HVAC"), plumbing, mechanical, electrical systems,
life safety systems and equipment, telecommunication equipment, elevators,
escalators, tenant directories, fire detection systems including sprinkler
system maintenance and repair; (ii) the cost of trash disposal, janitorial
services and security services and systems; (iii) the cost of all insurance
purchased by Landlord and enumerated in Section 9 of this Lease, including any
deductibles; (iv) the amount of the real property taxes to be paid by Landlord
under Section 5.2 hereof; (v) the cost of water, sewer, gas, electricity, and
other utilities available at the Project and paid by Landlord; (vi) the cost of
labor, salaries and applicable fringe benefits incurred by Landlord; (vii) the
cost of materials, supplies and tools used in managing, maintaining and/or
cleaning the Project; (viii) the cost of accounting fees, management fees, legal
fees and consulting fees attributable to the ownership, operation, management,
maintenance and repair of the Project plus the cost of any space occupied by the
property manager and leasing agent (if Landlord is the property manager,
Landlord shall be entitled to receive a fair market management fee); (ix) the
cost of replacing and/or adding improvements mandated by any law, statute,
regulation or directive of any governmental agency and any repairs or removals
necessitated thereby; (x) personal property taxes imposed upon the fixtures,
machinery, equipment, furniture and personal property used in connection with
the operation of the Project; (xi) payments made by Landlord under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the payment or sharing of costs among property owners; and (xii)
the cost of any other service provided by Landlord or any cost that is elsewhere
stated in this Lease to be an "Operating Expense." Landlord shall have the right
but not the obligation, from time to time, to equitably allocate some or all of
the Operating Expenses among different tenants of the Project (the "Cost
Pools"). Such Cost Pools may include, but shall not be limited to, the office
space tenants of the Project and the retail space tenants of the Project.

          (e) Operating Expenses shall not include: (i) any expenses
paid by any tenant directly to third parties, or as to which Landlord is
otherwise reimbursed by any third party or by insurance proceeds; (ii)
electricity required to be paid for by any tenant of the Project as described in
Section 11.6 of the Lease; (iii) salaries for Landlord’s executives above the
grade of building manager and/or any employee of Landlord not directly involved
with the Project; (iv) costs associated with Landlord’s performance of work or
services solely for the benefit of other tenant(s) and not for the benefit of
the Tenant; (v) leasing commissions; (vi) interest and amortization payments on
any mortgage or mortgages; (vii) debt service, ground lease payments, interest
and depreciation and amortization of the Building or any equipment, machinery,
fixtures or improvements therein except for amortization of capital improvements
specifically permitted in the Lease; (viii) costs incurred to correct violations
by Landlord of any law, rule, order or regulation which was in effect as of the
date hereof; (ix) costs incurred by Landlord for capital improvements, except
for the cost incurred for such capital improvements made: (a) to conform with
laws (which are amended, become effective, or are interpreted or enforced
differently after the date of this Lease; provided, however, all capital
expenditures made in order to conform or comply with ADA shall be included in
Operating Expenses); or (b) for the primary purpose of promoting safety or
reducing or controlling increases in Operating Expenses, such as lighting
retrofit and installation of energy management systems; (x) any amounts which
would otherwise be included in Operating Expenses paid to any person, firm or
corporation related or otherwise affiliated with Landlord or any general
partner, officer or director of Landlord or any of its general partners, to the
extent same exceeds arms-length competitive prices paid in the Cedar Knolls, New
Jersey area for the services or goods provided (i.e., that portion of the costs
and expenses for such services that exceed the competitive rate shall not be
included in Operating Expenses); and (xi) Landlord’s general corporate overhead
and general and administrative expenses except as it relates specifically to the
actual management of the Project. 

          (f)
If the cost
incurred in making an improvement or replacing any equipment is not fully
deductible as an expense in the year incurred in accordance with generally
accepted accounting principles, the cost shall be amortized over the useful life
of the improvement or equipment, as reasonably determined by Landlord, together
with an interest factor of ten percent (10%) per annum on the unamortized cost
of such item. 

          (g) As soon
as practicable after each calendar year, Landlord shall furnish Tenant with a statement
(the "Statement") which shall show the Comparison Expenses for the preceding
Comparison Year compared to the Base Year Expenses. Within thirty (30) days
following the furnishing of such Statement: (1) Tenant shall pay to Landlord a
sum (the "Expense Increase") equal to Tenant’s Share of the increase, if any, of
the Operating Expenses for the preceding Comparison Year over the Base Year
Expenses as determined by comparing the Comparison Expenses to the Base Year
Expenses; (2) Tenant shall pay to Landlord a sum equal to one-twelfth (1/12th)
of the Expense Increase multiplied by the number of months then elapsed
commencing with the first day of the then current Comparison Year; (3) Tenant
shall pay, in advance, one-twelfth (1/12th) of the Expense Increase with respect
to the then current month and thereafter, each and every month, until a
different Statement shall be submitted to Tenant as provided hereinabove.
Notwithstanding the above, if the Landlord shall estimate that any Comparison
Year’s Operating Expenses shall be in excess of those for the preceding
Comparison Year, then the said monthly installments of Expense Increase shall be
increased to an amount equal to Tenant’s Share of one-twelfth (1/12th) of
Landlord’s estimate of said Comparison Expenses. If Tenant's payments under this
Section 5.1(g) during said Comparison Year exceed Tenant's Share as indicated on
the Statement, Tenant shall be entitled to credit the amount of such overpayment
against Tenant's Share of Expense Increases next falling due. If Tenant's
payments under this Section 5.1(g) during said Comparison Year were less than
Tenant's Share as indicated on the statement, Tenant shall pay to Landlord the
amount of the deficiency within thirty (30) days after delivery by Landlord to
Tenant of the Statement. Landlord and Tenant shall forthwith adjust between them
by cash payment any balance determined to exist with respect to that portion of
the last Comparison Year for which Tenant is responsible for Expense Increases,
notwithstanding that the Term of the Lease may have terminated before the end of
such Comparison Year; and this provision shall survive the expiration or earlier
termination of the Lease. 

          (h) The
computation of Tenant's Share of Operating Expense increases is intended to
provide a formula for the sharing of costs by Landlord and Tenant and will not
necessarily result in the reimbursement to Landlord of the exact costs it has
incurred; provided, however, Tenant shall never be required to pay more than one
hundred percent (100%) of its share of Operating Expenses actually incurred by
Landlord during any calendar year. 

          (i) If
Tenant disputes the amount set forth in the Statement, Tenant shall have the
right, at Tenant's sole expense, not later than one hundred twenty (120) days
following receipt of such Statement, to cause Landlord's books and records in
respect to the calendar year which is the subject of the Statement to be audited
by a certified public accountant selected by Tenant and reasonably approved by
Landlord. The audit shall take place at the offices of Landlord where its books
and records are located (it being understood and agreed that such location shall
be within fifty (50) miles of the Building)
at a mutually convenient time during
Landlord's regular business hours. Before conducting any audit, Tenant must pay
the full amount of Operating Expenses billed. Tenant shall have no right to
conduct an audit or to give Landlord notice that it desires to conduct an audit
at any time Tenant is in default under the Lease. The accountant conducting the
audit shall be compensated on an hourly basis and shall not be compensated based
upon a percentage of overcharges it discovers. No subtenant shall have any right
to conduct an audit, and no assignee shall conduct an audit for any period
during which such assignee was not in possession of the Premises.

Tenant's right to undertake an audit
with respect to any calendar year shall expire one hundred twenty (120) days
after Tenant's receipt of the Statement for such calendar year, and such
Statement shall be final and binding upon Tenant and shall, as between the
parties, be conclusively deemed correct, at the end of such one hundred twenty
(120) day period, unless prior thereto Tenant shall have given Landlord written
notice of its intention to audit Operating Expenses for the calendar year which
is the subject of the Statement. If Tenant gives Landlord notice of its
intention to audit Operating Expenses, it must commence such audit within sixty
(60) days after such notice is delivered to Landlord, and the audit must be
completed within one hundred twenty (120) days after such notice is delivered to
Landlord. If Tenant does not commence and complete the audit within such
periods, the Statement which Tenant elected to audit shall be deemed final and
binding upon Tenant and shall, as between the parties, be conclusively deemed
correct. If the parties agree to the results of such audit, Tenant's Share of
Operating Expenses shall be appropriately adjusted based upon the results of
such audit, and the results of such audit shall be final and binding upon
Landlord and Tenant. If the parties do not agree upon the inclusion or amount of
any Operating Expense charged by Landlord, the sole remedy of Tenant shall be to
conduct an audit within the time specified in this Lease and, if still in
disagreement with Landlord, to submit the matter to arbitration within thirty
(30) days after completion of the audit to request an adjustment to any disputed
Operating Expense item. In no event will this Lease be terminable nor shall
Landlord be liable for damages based upon any disagreement regarding an
adjustment of Operating Expenses. Tenant agrees that the results of any
Operating Expenses audit shall be kept strictly confidential by Tenant and shall
not be disclosed to any other person or entity. 

     5.2 Real
Property Taxes. 

         
(a) Landlord shall pay the real property tax, as defined in Section
5.2(b), applicable to the Project, subject to reimbursement by Tenant of
Tenant's Share of increases in such Taxes in accordance with the provisions of
Section 5.1. 

         
(b) "Real property tax" shall include any form of real property tax or
assessment, general, special, or otherwise, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax levied upon or with respect
to the Building, the Project, and the Land, imposed upon or with respect to the
Building, the Project, and the Land, imposed by Federal, State and/or local
governments, as well as school districts and/or other taxing authorities (but
shall not include income, franchise, capital stock, estate or inheritance taxes
or taxes based upon receipts of rentals, unless the same be in substitution for
or in lieu of a real property tax or assessment), and any personal property
taxes imposed upon the fixtures, machinery, equipment. apparatus, systems and
appurtenances in, upon or used in connection with the Building and the Project for the
operation thereof. However, if, because of any change in the method of taxation
of real property, any other or additional tax or assessment is imposed upon
Landlord or upon or with respect to the Building, the Project, and/or the Land
or the rents or income therefrom, in addition to or in substitution for, or in
lieu of any tax or assessment which would otherwise be a real property tax, or
personal property tax of the type referred to above, such other tax or
assessment shall also be deemed a real property tax. As used herein, the term
"real property tax" shall be deemed to include "real estate tax”.

          (c) Tenant
shall pay prior to delinquency all taxes assessed against and levied upon trade
fixtures, furnishings, equipment and all other personal property of Tenant
contained in the Premises or related to Tenant's use of the Premises. If any of
Tenant's personal property shall be assessed with Landlord's real property,
Tenant shall pay to Landlord the taxes attributable to Tenant within ten
(10) days
after receipt of a written statement from Landlord setting forth the taxes
applicable to Tenant's property. 

         
(d) From time to time Landlord may challenge the assessed value of the
Project as determined by applicable taxing authorities and/or Landlord may
attempt to cause the real property taxes to be reduced on other grounds. If
Landlord is successful in causing the real property taxes to be reduced or in
obtaining a refund, rebate, credit or similar benefit (hereinafter collectively
referred to as a "reduction"), Landlord shall, to the extent practicable, credit
the reduction(s) to real property taxes for the calendar year to which a
reduction applies and recalculate the Expense Increases owed by Tenant for years
after the year in which the reduction applies based on the reduced real property
taxes (if a reduction applies to Tenant's Base Year, the Base Year Expenses
shall be reduced by the amount of the reduction and Tenant's Share of Expense
Increases shall be recalculated for all Comparison Years following the year of
the reduction based on the lower Base Year amount). All reasonable costs
incurred by Landlord in obtaining the real property taxes reductions shall be
considered an Operating Expense and Landlord shall determine, in its sole
discretion to which years any reductions will be applied. In addition, all
reasonable accounting and related costs incurred by Landlord in calculating new
Base Years for tenants and in making all other adjustments shall be an Operating
Expense. 

6. Security Deposit.
Tenant shall deliver to Landlord at the time
it executes this Lease the security deposit set forth in Section 1.10 as security for Tenant's faithful performance of Tenant's
obligations hereunder. If Tenant fails to pay Base Rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Landlord may use all or any portion of said deposit for the payment of any Base
Rent or other charge due hereunder, to pay any other sum to which Landlord may
become obligated by reason of Tenant's default, or to compensate Landlord for
any loss or damage which Landlord may suffer thereby. If Landlord so uses or
applies all or any portion of said deposit, Tenant shall within ten (10) days
after written demand therefor deposit cash with Landlord in an amount sufficient
to restore said deposit to its full amount. Landlord shall not be required to
keep said security deposit separate from its general accounts. If Tenant
performs all of Tenant's obligations hereunder, said deposit, or so much thereof
as has not heretofore been applied by Landlord, shall be returned, without
payment of interest or other amount for its use, to Tenant (or, at Landlord's
option, to the last assignee, if any, of Tenant's interest hereunder) at the
expiration of the Term hereof, and after Tenant has vacated the Premises. No
trust relationship is created herein between Landlord and Tenant with respect to
said security deposit. Tenant acknowledges that the security deposit is not an
advance payment of any kind or a measure of Landlord's damages in the event of
Tenant's default. 

See Addendum Paragraph 1 

7. Use. 

     7.1
Use. The Premises shall be used and occupied
only for the purpose set forth in Section 1.5 and for no other purpose. If
Section 1.5 gives Tenant the right to use the Premises for general office use,
by way of example and not limitation, general office use shall not include
medical office use or any similar use, laboratory use, classroom use, any use
not characterized by applicable zoning and land use restrictions as general
office use, or any use which would require Landlord or Tenant to obtain a
conditional use permit or variance from any federal, state or local authority.
No exclusive use has been granted to Tenant hereunder. 

    
7.2 Compliance with Law. Notwithstanding any permitted use inserted in Section 1.5, Tenant shall
not use the Premises for any purpose which would violate the Project's
certificate of occupancy, any conditional use permit or variance applicable to
the Project or violate any covenants, conditions or other restrictions
applicable to the Project. Tenant shall, at Tenant's expense, promptly comply
with all applicable laws, ordinances, rules, regulations, orders, certificates
of occupancy, conditional use permits, variances, covenants and restrictions of
record, and requirements of any fire insurance underwriters, rating bureaus or
government agencies, now in effect or which may hereafter come into effect,
whether or not they reflect a change in policy from that now existing, during
the Term or any part of the Term hereof, relating in any manner to the Premises
and the occupation and use by Tenant of the Premises except that Tenant shall
not be required to perform any alterations or installations in the Premises
necessitated thereby unless required by reason of Tenant’s particular use of the
Premises or a modification of the Premises by Tenant. Unless Tenant is required
to perform any such alterations or installations because of its particular use
of the Premises or a modification of the Premises, then any such alterations or
installations shall be performed by Landlord and shall be reimbursed by Tenant
in accordance with Section 5.1 above (including, without limitation, the
amortization of any alterations or improvements which are capital in nature as
provided in Section 5.1). Tenant shall conduct its business and use the Premises
in a lawful manner and shall not use or permit the use of the Premises or the
Common Areas in any manner that will tend to create waste or a nuisance or shall
tend to disturb other occupants of the Project. Tenant shall obtain, at its sole
expense, any permit or other governmental authorization required to operate its
business from the Premises. Landlord shall not be liable for the failure of any
other tenant or person to abide by the requirements of this section or to
otherwise comply with applicable laws and regulations, and Tenant shall not be
excused from the performance of its obligations under this Lease due to such a
failure. Landlord warrants to Tenant that, to the best of Landlord's knowledge,
the Building, in the state existing on the date this Lease is executed by
Landlord and Tenant, but without regard to alterations or improvements to be
made by Tenant or the use for which Tenant will occupy the Premises, does not
violate any covenants or restrictions of record, or any applicable building
code, regulation or ordinance in effect on such date. To the extent that the
Landlord receives any notice from a governmental entity that the Common Areas of
the Building are in violation of any requirement of the Americans with
Disabilities Act ("ADA") and the Landlord is obligated pursuant to a final
determination to undertake action in order to comply with ADA, then in such
event Landlord agrees to undertake such remedial action. If such requirement was
in effect as of the date hereof and such violation existed as of the date
hereof, Landlord shall be responsible for the cost of curing such violation. If
such requirement was not in effect as of the date hereof or such violation did
not exist as of the date hereof, then the cost of curing such violation shall be
included in Operating Expenses. To the extent that such notice requires action
with regard to Tenant's particular use of the Premises (including, without
limitation, in connection with any alterations, improvements or additions made
to the Premises by or on behalf of Tenant), Tenant shall be obligated to
undertake such action at Tenant's sole cost and expense. Tenant shall be solely
responsible, at Tenant's sole cost and expense, for complying with all
requirements of the ADA which relate to the interior of the Premises.

    
7.3 Condition of Premises. Except as otherwise provided in this Lease, Tenant hereby accepts the
Premises and the Project in their condition existing as of the date this Lease
is executed by Landlord and Tenant, subject to all applicable federal, state and
local laws, ordinances, regulations and permits governing the use of the
Premises, the Project's certificate of occupancy, any applicable conditional use
permits or variances, and any easements, covenants or restrictions of record
affecting the use of the Premises or the Project. Tenant shall comply with all
federal, state and local laws and regulations governing occupational safety and
health at Tenant's sole cost and expense. Tenant acknowledges that it has
satisfied itself by its own independent investigation that the Premises and the
Project are suitable for its intended use, and that neither Landlord nor
Landlord's agents has made any representation or warranty as to the present or
future suitability of the Premises, or the Project for the conduct of Tenant's
business. 

8. Maintenance, Repairs and
Alterations. 

    
8.1 Landlord's Obligations. Landlord shall keep the Project (excluding the interior of the Premises
and space leased to other occupants of the Project) in good condition and
repair, including without limitation, any necessary repairs and replacements to
(i) exterior walls, windows and doors, roof, floor slabs, structural elements of
the Project, and (ii) the Common Areas, including all heating, life-safety,
plumbing, ventilating, air-conditioning, electrical and mechanical systems
serving the Common Areas, all subject to reimbursement permitted by Section 5.1
hereinabove. If plumbing pipes, electrical wiring,
HVAC ducts or vents within the Premises are in need of repair, Tenant shall
advise Landlord (telephonically or otherwise), and Landlord shall cause the
repairs to be completed within a reasonable time, and, unless necessitated by
the negligent or intentional acts of Tenant, its agents, employees or
contractors, the entire cost of the repairs shall be considered an Operating
Expense and, unless expressly excluded pursuant to Section 5.1, reimbursed in
accordance with Section 5.1 herein. Except as provided in Section 9.3, there
shall be no abatement of rent or liability to Tenant on account of any injury or
interference with Tenant's business with respect to any improvements,
alterations or repairs made by Landlord to the Project or any part thereof.
Tenant expressly waives the benefits of any statute now or hereafter in effect
which would otherwise afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
Project in good order, condition and repair. All repairs and maintenance
required to be performed by Landlord pursuant to this Section 8.1 or elsewhere
in this Lease shall be performed in a manner consistent with the services
provided in similar buildings of the same age and quality and which are
centrally located in the Cedar Knolls, New Jersey area. Nothing in this Section
8.1 shall be deemed to be a waiver of Tenant’s right to a claim of constructive
eviction. 

     8.2
Tenant's Obligations.

          (a) Subject
to the requirements of Section 8.3 and except as otherwise provided in Section
8.1 above, Tenant shall be responsible for payment of the cost of keeping the
Premises in good condition and repair, and if Landlord makes any repairs to the
Premises, except as provided in Section 8.1 above, the cost thereof shall be
paid by Tenant to Landlord. Tenant shall be responsible for the cost of
painting, repairing or replacing wall coverings, and the cost of repairing or
replacing any improvements made to the Premises by Landlord or Tenant. Upon
reasonable notice to Tenant, Landlord may, but shall not be obligated to, enter
the Premises at all reasonable times to make such repairs, alterations,
improvements and additions to the Premises or to any equipment located therein
as Landlord deems necessary, in its reasonable discretion. 

          (b) Tenant
is responsible for the maintenance of the lighting fixtures in the Premises. At
the option of Tenant, Landlord agrees to sell to Tenant, replacement parts for
the lighting fixtures, including lamps, ballasts, starters, lenses and grills
used in the Premises. In addition, if Landlord provides replacement part
installation and/or repair work, then in said event, Tenant shall pay Landlord
the cost of installation thereof. 

          (c) On the
last day of the Term hereof, or on any sooner termination, Tenant shall
surrender the Premises to Landlord in the same condition as received, ordinary
wear and tear excepted, clean and free of debris and Tenant's personal property.
Tenant shall repair any damage to the Premises occasioned by the installation or
removal of Tenant's trade fixtures, furnishings and equipment. Except as
otherwise stated in this Lease, Tenant shall leave the power panels, electrical
distribution systems, lighting fixtures, HVAC, window coverings, wall coverings,
carpets, wall paneling, ceilings and plumbing at the Premises and in good
operating condition. 

    
8.3 Alterations and Additions. 

          (a) Tenant
shall not, without Landlord's prior written consent, which may be given or
withheld in Landlord's sole discretion, make any alterations, improvements,
additions, utility installations or repairs (hereinafter collectively referred
to as "Alterations") in, on or about the Premises or the Project. As used in
this Lease, the term "utility installation" shall mean carpeting or other floor
covering, window and wall coverings, power panels, electrical distribution
systems, lighting fixtures, telephone or computer system wiring, HVAC and
plumbing. At the expiration of the Term, Landlord may require the removal of any
Alterations installed by Tenant and the restoration of the Premises and the
Project to their prior condition, at Tenant's expense. To the extent Landlord's
consent is required pursuant to this Section, at the written request of Tenant,
Landlord agrees to notify Tenant concurrently with Landlord's approval of such
Alteration whether or not Landlord will require Tenant to remove such Alteration
at the end of the Term. If a work letter agreement is entered into by Landlord
and Tenant, Tenant shall not be obligated to remove the tenant improvements
constructed in accordance with the work letter agreement. Should Landlord permit
Tenant to make its own Alterations, Tenant shall use only such contractor as has
been expressly approved by Landlord, and Landlord may require Tenant to provide
to Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such Alterations,
to insure Landlord against any liability for mechanic's and materialmen's liens
and to insure completion of the work. Should Tenant make any Alterations without
the prior approval of Landlord, or use a contractor not expressly approved by
Landlord, Landlord may, at any time during the Term of this Lease, require that
Tenant remove all or part of the Alterations and return the Premises to the
condition it was in prior to the making of the Alterations. In the event Tenant
makes any Alterations, Tenant agrees to obtain or cause its contractor to
obtain, prior to the commencement of any work, "builders all risk" insurance in
an amount approved by Landlord and workers compensation insurance.
Notwithstanding anything to the contrary contained herein, Landlord will not
unreasonably withhold, condition or delay its consent to any non-structural
Alterations provided that Tenant otherwise complies with the provisions of this
Section 8.3 and that (i) such Alterations are not visible from the exterior of
the Premises, and (ii) such Alterations do not adversely affect any of the
Building systems or structure. Furthermore, Tenant shall have the right to make
cosmetic, non-structural Alterations (consisting of painting, carpeting, wall
papering only) (hereinafter, “Cosmetic Alterations”) to the Premises without
obtaining Landlord's prior written consent, provided that Tenant has given
Landlord prior written notice of its intention to make such Alterations and that
Tenant otherwise complies with the provisions of this Section 8.3. For purposes
of the Lease, it shall be deemed reasonable for Landlord: (i) to require Tenant
to perform Alterations during non-business hours if such Alterations will create
unreasonable noise, noxious fumes or otherwise interfere with the quiet
enjoyment of the other tenants in the Building, and (ii) to require Tenant to
perform Alterations in accordance with a reasonable schedule approved by the
manager of the Building.  

          (b) Any
Alterations in or about the Premises that Tenant shall desire to make shall be
presented to Landlord in written form, with plans and specifications which are
sufficiently detailed to obtain a building permit. If Landlord consents to an
Alteration, the consent shall be deemed conditioned upon Tenant acquiring a
building permit from the applicable governmental agencies, furnishing a copy
thereof to Landlord prior to the commencement of the work, and compliance by
Tenant with all conditions of said permit in a prompt and expeditious manner.
Tenant shall provide Landlord with as-built plans and specifications for any
Alterations made to the Premises. 

          (c) Tenant
shall pay, when due, all claims for labor or materials furnished or alleged to
have been furnished to or for Tenant at or for use in the Premises, which claims
are or may be secured by any mechanic's or materialmen's lien against the
Premises or the Project, or any interest therein. If Tenant shall, in good
faith, contest the validity of any such lien, Tenant shall furnish to Landlord a
surety bond satisfactory to Landlord in an amount equal to such contested lien
claim or demand indemnifying Landlord against liability arising out of such lien
or claim. In addition, Landlord may require Tenant to pay Landlord's reasonable
attorneys' fees and costs in participating in such action. 

          (d) Tenant
shall give Landlord not less than five (5) business days' advance written notice
prior to the commencement of any work in the Premises by Tenant, and Landlord
shall have the right to post notices of non-responsibility in or on the Premises
or the Project as provided by law.

          (e) All
Alterations (whether or not such Alterations constitute trade fixtures of
Tenant) which may be made to the Premises by Tenant shall be made and done in a
good and workmanlike manner and with new materials satisfactory to Landlord and
shall be the property of Landlord and remain upon and be surrendered with the
Premises at the expiration of the Lease Term, unless Landlord requires their
removal pursuant to Section 8.3(a). Provided Tenant is not in default,
notwithstanding the provisions of this Section 8.3(e), Tenant's personal
property and equipment, other than that which is affixed to the Premises so that
it cannot be removed without material damage to the Premises or the Project,
shall remain the property of Tenant and may be removed by Tenant subject to the
provisions of Section 8.2(b). 

     8.4 Failure of Tenant to
Remove Property. If this Lease is
terminated due to the expiration of its Term or otherwise, and Tenant fails to
remove its property as required by Section 8.2(b), in addition to any other
remedies available to Landlord under this Lease, and subject to any other right
or remedy Landlord may have under applicable law, Landlord may remove any
property of Tenant from the Premises and store the same elsewhere at the expense
and risk of Tenant and at any time (before or after Landlord stores said
property), Landlord may sell any or all such property at public or private sale,
in such a manner and at such times and places as Landlord, in its sole
discretion, may deem proper, without notice to or demand upon Tenant. Landlord
shall apply the proceeds of such sale: first, to the cost and expenses of the
sale, including reasonable attorneys' fees actually incurred; second, to the
payment of the cost of or charges for storing any such property; third, to the
payment of any other sums of money which may then or thereafter be due to
Landlord from Tenant under this Lease; and fourth, the balance, if any, to
Tenant. 

9. Insurance.

     9.1
Insurance-Tenant.

          (a)
During the Term of the Lease and at such other times as Tenant occupies the
Premises, Tenant shall keep in force at its expense "comprehensive general
liability" insurance including an ISO broad form endorsement or its equivalent
with respect to the Premises with limits of not less than Three Million Dollars
($3,000,000) combined single limit or such higher amount as Landlord may
reasonably require in writing from time to time. The insurance shall cover
liability arising out of Tenant's operations and liability arising out of work
performed at the Premises by other persons on behalf of Tenant, and shall
specifically include the contractual liability assumed by Tenant under this
Lease. Such coverage, if written on a claims-made basis, must provide for a
retroactive date which is prior to the date Tenant occupies the Premises, and
the same retroactive date shall continue during the entire Term of this Lease.

          (b)
Tenant will also maintain "all risk" extended coverage property insurance
written on a one hundred percent (100%) replacement cost basis on Tenant's
personal property, all tenant improvements installed at the Premises by Landlord
or Tenant, Tenant's trade fixtures and other property. Such policies shall
provide protection against any peril included within the classification "fire
and extended coverage," against vandalism and malicious mischief, theft,
sprinkler leakage and flood damage. If this Lease is terminated as the result of
a casualty in accordance with Section 10, the proceeds of said insurance
attributable to the replacement of all tenant improvements at the Premises shall
be paid to Landlord. 

          (c)
Tenant shall, at all times during the Term hereof, maintain in effect workers'
compensation insurance as required by applicable law (but not less than
$1,000,000) and business interruption and extra expense insurance satisfactory
to Landlord. In addition, Tenant shall maintain in effect during the Term hereof
a policy of automobile liability insurance with bodily injury limits of $500,000
per person, $1,000,000 per accident, and $100,000 per accident for property
damage. 

     9.2
Insurance-Landlord. 

          (a)
Landlord shall obtain and keep in force a policy of comprehensive general
liability insurance with coverage against such risks and in such amounts as
Landlord deems advisable insuring Landlord against liability arising out of the
ownership, operation and management of the Project. 

          (b)
Landlord shall also obtain and keep in force during the Term of this Lease a
policy or policies of "all risk" insurance covering loss or damage to the
Project in the amount of not less than the full replacement cost thereof (less
foundations and footings), as determined by Landlord from time to time. The
terms and conditions of said policies and the perils and risks covered thereby
shall be determined by Landlord, from time to time, in Landlord's sole
discretion. In addition, at Landlord's option, Landlord shall obtain and keep in
force, during the Term of this Lease, a policy of rental interruption insurance,
with loss payable to Landlord, which insurance shall, at Landlord's option, also
cover all Operating Expenses. Tenant will not be named as an additional insured
in any insurance policies carried by Landlord and shall have no right to any
proceeds therefrom. At Landlord's option, Landlord may obtain insurance
coverages and/or bonds related to the operation of the parking areas. At
Landlord's option, Landlord may obtain coverage for flood and earthquake
damages. In addition, Landlord shall have the right to obtain such additional
insurance as is customarily carried by owners or operators of other comparable
office buildings in the geographical area of the Project. The policies purchased
by Landlord shall contain such deductibles as Landlord may determine. In
addition to amounts payable by Tenant in accordance with Section 5, Tenant shall
pay any increase in the property insurance premiums for the Project over what
was payable immediately prior to the Commencement Date to the extent the
increase is specified by Landlord's insurance carrier as being caused by the
nature of Tenant's occupancy or any act or omission of Tenant. 

     9.3 Insurance Policies.
On or before the date on which this
Lease has been executed by Tenant, Tenant shall deliver to Landlord copies of
the certificates of insurance required under Section 9.1, and Landlord shall
have the right to approve the terms and conditions of said policies. Tenant's
insurance policies shall not be cancelable or subject to reduction of coverage
or other modification except after thirty (30) days prior written notice to
Landlord. Tenant shall, at least thirty (30) days prior to the expiration of
such policies, furnish Landlord with renewals thereof. Tenant's insurance
policies shall be issued by insurance companies authorized to do business in the
state in which the Project is located, with a general policyholders rating of
not less than "A" and a financial rating of not less than "Class X," as rated in
the most recent edition of "Best Insurance Reports." Tenant's insurance policies
shall be issued as primary policies and not contributing with and not in excess
of coverage which Landlord may carry. Landlord, and at Landlord's option the
holder of any mortgage or deed of trust encumbering the Project, shall be named
as an additional insured on all insurance policies Tenant is obligated to obtain
by Section 9.1 above. Tenant's insurance policies shall not include deductibles
in excess of Five Thousand Dollars ($5,000). 

     9.4 Waiver of Subrogation.
Tenant and Landlord each hereby release
and relieve the other, and waive their entire right of recovery against the
other, for direct or consequential loss or damage arising out of or incident to
the perils covered by insurance carried by such party (or required to be carried
by such party by this Lease) to the extent of the insurance proceeds actually
received, whether due to the negligence of Landlord or Tenant or their agents,
employees, contractors and/or invitees. Landlord and Tenant shall each cause the
insurance policies they obtain in accordance with this Section 9 to provide that
the insurance company waives all right of recovery by subrogation against either
party in connection with any damage covered by any policy. 

     9.5 Coverage.
Landlord makes no representation to
Tenant that the limits or forms of coverage specified above or approved by
Landlord are adequate to insure Tenant's property or Tenant's obligations under
this Lease, and the limits of any insurance carried by Tenant shall not limit
its obligations under this Lease. 

10. Damage or
Destruction. 

     10.1 Effect of Damage or
Destruction. If all or part of the
Project is materially damaged (as defined in Section 10.2 below) by fire,
earthquake, flood, explosion, the elements, riot or any other casualty, Landlord
shall have the right in its sole and complete discretion to repair or to rebuild
the Project or to terminate this Lease. Landlord shall use commercially
reasonable efforts to, within sixty (60) days but in no event later than ninety
(90) days after the occurrence of such damage, notify Tenant in writing of
Landlord's intention to repair or to rebuild or to terminate this Lease. If
Landlord elects to terminate, Landlord shall provide Tenant at least ninety (90)
days’ prior notice of the date of termination. In all other events of damage or
casualty to the Project, Landlord shall repair and restore such damage to the
Premises and/or the Project, as the case may be, substantially to their
condition existing prior to the damage. 

With respect to restoration of the
Premises, subject to the other provisions of this Lease, Landlord shall restore
the Premises using Building standard tenant improvements commensurate to those
existing on the Commencement Date. Tenant shall in no event be entitled to
compensation or damages on account of annoyance or inconvenience in making any
repairs, or on account of construction, or on account of Landlord's election to
terminate this Lease. Notwithstanding the foregoing, if Landlord shall elect to
rebuild or repair the Project, but in good faith determines that the Project
cannot be rebuilt or repaired within two hundred seventy (270) days after the
date of the occurrence of the damage, without payment of overtime or other
premiums, and the damage to the Project has rendered the Premises unusable,
Landlord shall notify Tenant thereof in writing at the time of Landlord's
election to rebuild or repair, and Tenant shall thereafter have a period of
thirty (30) days within which Tenant may elect to terminate this Lease, upon
written notice to Landlord. Tenant's termination right described in the
preceding sentence shall not apply if the damage was caused by Tenant's
negligence or willful misconduct. Failure of Tenant to exercise said election
within said period shall constitute Tenant's agreement to accept delivery of the
Premises under this Lease whenever tendered by Landlord, provided Landlord
thereafter pursues reconstruction or restoration diligently to completion,
subject to delays beyond Landlord's reasonable control; provided further,
however, in the event Landlord pursues reconstruction or restoration of the
Project and such reconstruction and restoration is not substantially complete
due to delays within Landlord’s control within two hundred seventy (270) days
after the date of the occurrence of the damage, then Tenant shall have a further
right to terminate this Lease upon written notice to Landlord, so long as
Tenant’s written notice is delivered to Landlord prior to Landlord’s delivery of
the Premises substantially completed to Tenant. If Landlord is unable to repair
the damage to the Premises or the Project during such two hundred seventy (270)
day period due to a Force Majeure Event, the two hundred seventy (270) day
period shall be extended by the period of delay caused by the Force Majeure
Event. 

     10.2
Definition of Material Damage. The damage
shall be deemed material if, in Landlord's reasonable judgment, the uninsured
cost of repairing the damage will exceed Two Hundred Fifty Thousand Dollars
($250,000.00). If insurance proceeds are available to Landlord in an amount
which is sufficient to pay the entire cost of repairing all of the damage to the
Project, the damage shall be deemed material if the cost of repairing the damage
exceeds Five Hundred Thousand Dollars ($500,000.00). Damage to the Project shall
also be deemed material if (a) the Project cannot be repaired to substantially
the same condition it was in prior to the damage due to laws or regulations in
effect at the time the repairs will be made, (b) the holder of any mortgage or
deed of trust encumbering the Project requires that insurance proceeds available
to repair the damage in excess of Twenty-Five Thousand Dollars ($25,000) be
applied to the repayment of the indebtedness secured by the mortgage or the deed
of trust, or (c) the damage occurs during the last twelve (12) months of the
Lease Term. 

    
10.3 Abatement of Rent. If all or part of the Premises will be unusable or inaccessible to Tenant
in the ordinary conduct of its business until the damage is repaired or until
the Lease is terminated pursuant to Section 10.1 above, and the damage was not
caused by the negligence or willful misconduct of Tenant or its employees,
agents, contractors or invitees, Tenant's Base Rent and Tenant's Share of
Operating Expense increases shall be abated in proportion to the amount of the
Premises which is unusable or inaccessible to Tenant in the ordinary conduct of
its business until the repairs are completed. 

    
10.4 Tenant's Negligence. If such damage or destruction occurs as a result of the negligence or
willful misconduct of Tenant or Tenant's employees, agents, contractors or
invitees, and the proceeds of insurance which are actually received by Landlord
are not sufficient to repair all of the damage, Tenant shall pay, at Tenant's
sole cost and expense, to Landlord upon demand, the difference between the cost
of repairing the damage and the insurance proceeds received by Landlord.

    
10.5 Tenant's Property. Landlord shall not be required to repair any injury or damage to, or to
make any repairs or replacements of, any fixtures, furniture, equipment or
tenant improvements installed in the Premises (except as provided in Section
10.1 above), and Tenant shall repair and restore all such property at Tenant's
sole expense.

    
10.6 Waiver. Landlord and
Tenant hereby waive the provisions of any statutes which relate to the
termination of leases when leased property is damaged or destroyed and agree
that such event shall be governed by the terms of this Lease. 

11. Services Provided by Landlord.
Landlord shall furnish, without charge to
Tenant (except where otherwise specified herein), the following services
("Building Services"): 

    
11.1 Air-Conditioning. Air-conditioning during Business Hours on Business Days (as those terms
are hereinafter defined) when, in the reasonable judgment of Landlord, it may be
required for the comfortable occupancy of the Premises. At other times during
Business Hours on Business Days, Landlord shall provide ventilation for the
Premises. Tenant at all times agrees to cooperate fully with Landlord and to
abide by all regulations and requirements which Landlord may reasonably
prescribe, for the proper functioning and protection of its heating, ventilating
and air-conditioning systems. Landlord shall have free access to any and all
mechanical installations of Landlord, including but not limited to:
air-conditioning, fans, ventilating and machine rooms and electrical closets;
and Tenant agrees that there shall be no construction of partitions or other
obstructions which might interfere with Landlord’s equipment to or from the
enclosures containing said installations. Tenant agrees that Tenant, its agents,
employees or contractors shall not at any time enter the said enclosures or
tamper with, adjust, touch or otherwise in any manner, affect Landlord’s said
mechanical installations.

 

    
11.2 Heat. Heat, when and
as required by law and/or when in the reasonable judgment of Landlord, it may be
required for the comfortable occupancy of the Premises, on Business Days during
Business Hours. 

    
11.3 Water. Cold and hot
water at standard building temperatures to all lavatories, public or private,
for ordinary drinking, cleaning, sanitary and lavatory purposes. 

    
11.4 Janitorial and Maintenance Services. Janitorial and maintenance services for the Premises as
defined in Exhibit E, provided the Premises are kept in reasonable order by
Tenant. Tenant shall pay to Landlord the cost incurred by Landlord, for the
removal of any of Tenant’s refuse and rubbish which exceeds by quantity and
nature, the daily refuse and rubbish that might otherwise result from the daily
use of such premises as offices. Bills for the such additional cost shall be
rendered by Landlord to Tenant and shall be due and payable when rendered; and
the amount of such bills shall be deemed to be, and shall be paid as, Additional
Rent. Alternately, Tenant shall use Landlord’s contractors or employees, at the
option of Landlord, for the removal of such excess rubbish and refuse and Tenant
agrees to pay reasonable charges therefor. 

    
11.5 Elevators. Automatic
(non-attended) elevator facilities during Business Hours on Business Days and at
least one (1) automatic elevator available at all other times. 

    
11.6 Electricity.

          (a)
Electric current, with the understanding, however, that the Base Rent does not
include the cost of electricity consumed by Tenant in the Premises; and Tenant
shall, in addition to the Base Rent, be required to pay an Electric Energy
Charge as a condition for the Landlord to provide electric current to the
Premises. The Premises shall be separately checkmetered for Tenant’s electrical
use and, during the Term hereof, Tenant shall be obligated to reimburse Landlord
for the Electric Energy Charge as Additional Rent based on Tenant’s usage of
electricity as measured by said checkmeter within twenty (20) days following
Landlord’s invoice therefor. 

          (b) For the
purposes hereof, energy adjustment charges, fuel adjustment charges, and any
other charge of, or factor upon which, the public utility company supplying
electricity fixes or determines charges or rates, shall be deemed included in
determining and computing the "rate" or charges for such electric current. If
any tax or other charge is imposed upon Landlord’s receipt from the sale or
resale of electric energy to Tenant by any federal, state or municipal
authority, Tenant covenants and agrees that, where permitted by law, Tenant’s
pro rata share of such taxes or other charges shall be passed on to and paid by
Tenant to Landlord. 

          (c) Except
as expressly provided in Section 11.10 below, Landlord shall not in any way be
responsible or liable to Tenant at any time for any loss, damage or expense
resulting from any change in the quantity or character of the electric service
or for its being no longer suitable for Tenant’s requirements or from any
cessation or interruption of the supply or current; nor shall any such loss,
damage or expense, or non-supply of electric service or current in any way
affect the tenancy or in any way relieve Tenant of any obligation under the
terms of this Lease. 

          (d) Tenant
covenants and agrees that at all times its use of electric current shall never
exceed the capacity provided by Landlord pursuant to this Section 11.6. Tenant
shall make no changes, alterations, additions, substitutions ("Changes") to any
risers, conduits, meters, panel boxes, switch gear, wiring, or any other part of
the electric service without the express prior written consent of Landlord. Any
Changes requested by Tenant shall be sent in writing to Landlord; and if, in the
reasonable judgment of Landlord, such Changes will not cause or create a
dangerous or hazardous condition or damage or injury to the Building, or entail
excessive or unreasonable alterations or repairs, or interfere with or disturb
other tenants or occupants and/or the electrical service then or thereafter to
be supplied to tenants or occupants, Landlord will, at the sole cost and expense
of Tenant, make such Changes. Tenant covenants and agrees to pay Landlord for
such costs and expenses as additional rent, upon the rendition of a bill
indicating the amount due therefor. 

          (e)  (i) Landlord reserves the right to terminate the furnishing of
electricity to the Premises at any time, upon no less than ninety (90) days’
written notice to the Tenant, in which event, Tenant shall make immediate
application directly to the utility company servicing the Building for the
Tenant’s entire separate supply of electric current; and Landlord shall permit
its risers, wires, conduits and other electrical equipment, to the extent
available and safely capable, to be used for such purpose. Any meters, and
additional risers, wires, conduits and equipment or connections necessary to
enable Tenant to obtain electric current directly from such utility company
shall be installed at Tenant’s sole cost and expense if the termination of
Landlord’s service is legally required; otherwise, they shall be installed at
Landlord’s sole cost and expense, and in compliance with all applicable laws,
ordinances and regulations and requirements of insurance companies and fire
underwriters. 

              
(ii) No alterations, modifications or changes shall be
made by the Tenant to any meters, risers, conduits or other equipment or
connections in the Building in a manner which would cause damage to the Building
or interfere with the use, enjoyment, occupancy or possession of the Building by
Landlord and its other tenants. Rigid conduit only, or such other type as may be
specified by Landlord, will be allowed. 

              
(iii) Tenant’s liability for the Electric Energy Charge provided for in
this Lease shall terminate as of the date of discontinuance by Landlord of the
supplying of electric current, but this Lease shall otherwise remain in full
force and effect. Unless required by law, however, Landlord shall not
discontinue furnishing electricity to the Premises until after Tenant shall have
commenced receiving its electricity directly from the utility company unless
Tenant shall have failed to make such arrangements with due
diligence.

     11.7
Building Services on Non-Business Days or Non-Business Hours.

         
(a) Tenant acknowledges that Landlord is only required to provide the
Building Services specified in Sub-sections 11.1 through 11.6 hereinabove only
during Business Hours on Business Days and in addition, access to electricity,
water and one (1) automatic elevator, during Non-Business Hours on Non-Business
Days as well. Anything to the contrary notwithstanding, Landlord shall provide Tenant
reasonable access to the Common Areas of the Project and Building and to the
Premises, twenty-four (24) hours a day, seven (7) days per week, subject to such
security procedures, restrictions and regulations which Landlord may reasonably
promulgate. 

          (b)
Landlord shall use its best efforts to provide HVAC to Tenant at times other
than those set forth above subject to (i) the payment by Tenant of Landlord's
standard charge, as determined by Landlord from time to time, in Landlord's
reasonable discretion, for after hours HVAC and (ii) Tenant providing to
Landlord at least one (1) Business Day's advance written notice of Tenant's need
for Non-Business Hours and/or Non-Business Day HVAC service. As of the date of
this Lease, and subject to future increases, the standard charge for after hours
HVAC is Fifty-Five Dollars ($55.00) per hour (subject to increase by the same
percentage of the increase in electrical charges) with a four (4) hour minimum
if Tenant’s after hours use of the HVAC is not continuous in any one (1) day.
For purposes hereof “continuous in any one (1) day” shall mean uninterrupted
weekday service (not including weekends and holidays). For example, if Tenant
requests after hours use of the HVAC between 6:00 p.m. and 8:00 p.m. on a
non-holiday Tuesday, then the four (4) hour minimum shall not apply and Tenant
shall be charged for two (2) hours of after hours use of the HVAC.
Alternatively, if Tenant requests after hours use of the HVAC between 10:00 a.m.
and 12:00 p.m. on a Sunday, Tenant shall be charged for the minimum amount of
four (4) hours of after hours use of the HVAC. Tenant shall pay all after hours
HVAC charges to Landlord within twenty (20) days after Landlord bills Tenant for
said charges. 

    
11.8 Definition of Business Days and Business Hours of Building
Services. "Business Days" as defined
herein, shall be Monday through Friday from 8:00 A.M. to 6:00 PM and Saturdays
from 8:00 A.M. to 1:00 P.M., excluding all days observed as non-working
(vacation) holidays by the State and/or Federal government ("Holidays").
"Business Hours" as defined herein, shall mean 8:00 A.M. and 6:00 P.M. on Monday
through Friday, excluding Holidays, and Saturday, from 8:00 A.M. to 1:00 P.M.,
excluding Holidays.

    
11.9 Excess Usage by Tenant. Notwithstanding the use set forth in Section 1.5 and/or Section 11 and
its sub-sections, Tenant shall not use Building utilities or services in excess
of those used by the average office building tenant using its premises for
ordinary office use. Tenant shall not install at the Premises office machines,
lighting fixtures or other equipment which will generate above average heat,
noise or vibration at the Premises or which will adversely effect the
temperature maintained by the HVAC system. If Tenant does use Building utilities
(i.e. electricity) or services in excess of those used by the average office
building tenant, Landlord shall have the right, in addition to any other rights
or remedies it may have under this Lease, to (a) at Tenant's expense, install
separate metering devices at the Premises, and to charge Tenant for its usage,
(b) require Tenant to pay to Landlord all costs, expenses and damages incurred
by Landlord as a result of such usage, and (c) require Tenant to stop using
excess utilities or services. 

    
11.10 Interruptions. Tenant agrees that Landlord shall not be liable to Tenant for its failure
to furnish utilities or other Building Services when such failure is occasioned,
in whole or in part, by repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Project after reasonable effort to do so, by any accident
or casualty whatsoever, by act or default of Tenant or other parties, or by any
other cause beyond Landlord's reasonable control, and such failures shall never
be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying rent or performing any
of its obligations under this Lease. Furthermore, Landlord shall not be liable
under any circumstances for loss of property or for injury to, or interference
with, Tenant's business, including, without limitation, loss of profits, however
occurring, through or in connection with or incidental to a failure to furnish
any of the Building Services or utilities as set forth in this Section 11 and
its sub-sections. Landlord may comply with voluntary controls or guidelines
promulgated by any governmental entity relating to the use or conservation of
energy, water, gas, light or electricity or the reduction of automobile or other
emissions without creating any liability of Landlord to Tenant under this Lease.
Notwithstanding anything contained herein to the contrary, if any interruption
of utilities or services caused by Landlord’s gross negligence or willful
misconduct shall continue for more than ten (10) consecutive business days and
shall render all or any portion of the Premises unusable for the normal conduct
of Tenant's business, and if Tenant does not in fact use or occupy such portion
of the Premises, then all Base Rent and additional rent payable hereunder with
respect to such portion of the Premises which Tenant does not occupy shall be
abated from and after the eleventh (11th) consecutive business day
until full use of such portion of the Premises is restored to Tenant. Nothing in
this Section 11.10 shall be deemed to be a waiver of Tenant’s right to a claim
of constructive eviction if such interruption or failure is caused by the gross
negligence or willful misconduct of Landlord.  

     11.11
Services Exclusive to Tenant. Tenant shall
pay for all water, gas, heat, electricity, telephone and other utilities and
services supplied and/or metered exclusively to the Premises or to Tenant,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Tenant shall pay, at Landlord's option, either Tenant's Share
or a reasonable proportion to be determined by Landlord of all charges jointly
metered with other premises in the Project. 

12. Assignment and
Subletting.

    
12.1 Landlord's Consent Required. Tenant shall not voluntarily or by operation of law assign,
transfer, hypothecate, mortgage, sublet, or otherwise transfer or encumber all
or any part of Tenant's interest in this Lease or in the Premises (hereinafter
collectively a "Transfer"), without Landlord's prior written consent, which
shall not be unreasonably withheld. Landlord shall respond to Tenant's written
request for consent hereunder within twenty (20) days after Landlord's receipt
of the written request from Tenant. Any attempted Transfer without such consent
shall be void and shall constitute a material default and breach of this Lease.
Tenant's written request for Landlord's consent shall include, and Landlord's
twenty (20) day response period referred to above shall not commence, unless and
until Landlord has received from Tenant, all of the following information: (a)
financial statements for the proposed assignee or subtenant for the past three
(3) years prepared in accordance with generally accepted accounting principles,
(b) federal tax returns for the proposed assignee or subtenant for the past
three (3) years, (c) a TRW credit report or similar report on the proposed
assignee or subtenant, (d) a detailed description of the business the assignee
or subtenant intends to operate at the Premises, (e) the proposed effective date
of the assignment or sublease, (f) a copy of the proposed sublease or assignment
agreement which includes all of the terms and conditions of the proposed
assignment or sublease, and (g) a detailed description of any ownership or
commercial relationship between Tenant and the proposed assignee or subtenant.
If the obligations of the proposed assignee or subtenant will be guaranteed by
any person or entity, Tenant's written request shall not be considered complete
until the information described in (a), (b) and (c) of the previous sentence has
been provided with respect to each proposed guarantor. "Transfer" shall also
include the transfer (a) if Tenant is a corporation, and Tenant's stock is not
publicly traded over a recognized securities exchange, of more than forty-nine
percent (49%) of the voting stock of such corporation during the term of this
Lease (whether or not in one or more transfers) or the dissolution or merger of
the corporation, or (b) if Tenant is a partnership or other entity, of more than
forty-nine percent (49%) of the profit and loss participation in such
partnership or entity during the term of this Lease (whether or not in one or
more transfers) or the dissolution or liquidation of the partnership.

    
12.2 Standard For Approval. Landlord shall not unreasonably withhold its consent to a Transfer
provided that Tenant has complied with each and every requirement, term and
condition of this Section 12. Tenant acknowledges and agrees that each
requirement, term and condition in this Section 12 is a reasonable requirement,
term or condition. It shall be deemed reasonable for Landlord to withhold its
consent to a Transfer if any requirement, term or condition of this Section 12
is not complied with or: (a) the Transfer would cause Landlord to be in
violation of its obligations under another lease or agreement to which Landlord
is a party; (b) in Landlord's reasonable judgment, a proposed assignee or
subtenant has a smaller net worth than Tenant had on the date this Lease was
entered into with Tenant or is less able financially to pay the rents due under
this Lease as and when they are due and payable; (c) a proposed assignee's or
subtenant's business will impose a burden on the Project's parking facilities,
elevators, Common Areas or utilities that is materially greater than the burden
imposed by Tenant, in Landlord's reasonable judgment; (d) the terms of a
proposed assignment or subletting will allow the proposed assignee or subtenant
to exercise a right of renewal, right of expansion, right of first offer, right
of first refusal or similar right held by Tenant; (e) a proposed assignee or
subtenant does not, in Landlord's reasonable judgment, have a good credit
rating; (f) a subletting shall be for less than the entirety of the Premises or
for less than the entire unexpired Term of the Lease; (g) a proposed assignee or
subtenant refuses to enter into a written assignment agreement or sublease,
reasonably satisfactory to Landlord, which provides that it will abide by and
assume all of the terms and conditions of this Lease for the term of any
assignment or sublease and containing such other terms and conditions as
Landlord reasonably deems necessary; (h) the use of the Premises by the proposed
assignee or subtenant will not be identical to the use permitted by this Lease;
(i) the proposed assignee or subtenant is then currently a tenant of the
Landlord at the Project; (j) Landlord has ever evicted or been involved in
litigation with the proposed assignee or subtenant; (k) any guarantor of this
Lease refuses to consent to the Transfer or to execute a written agreement
reaffirming the guaranty; (l) Tenant is in default as defined in Section 13.1 at
the time of the request; (m) if requested by Landlord, the assignee or sublessee
refuses to sign a non-disturbance and attornment agreement in favor of
Landlord's lender; (n) Landlord is marketing space in the Project at the time of
Tenant’s request and Tenant has marketed or advertised space for sublet in the
Premises at a base rent less than the advertised base rent being charged new
tenants in the Building at the time of such Transfer; or (o) the proposed
assignee or subtenant is a person or entity then, or during the prior six (6)
months, negotiating with Landlord for the lease of space in the Project.

    
12.3 Additional Terms and Conditions. The following terms and conditions shall be applicable to any
Transfer: 

          (a)
Regardless of Landlord's consent, no Transfer shall release Tenant from Tenant's
obligations hereunder or alter the primary liability of Tenant to pay the rent
and other sums due Landlord hereunder and to perform all other obligations to be
performed by Tenant hereunder or release any guarantor from its obligations
under its guaranty.

          (b)
Landlord may accept rent from any person other than Tenant pending approval or
disapproval of an assignment or subletting. 

          (c) Neither
a delay in the approval or disapproval of a Transfer, nor the acceptance of
rent, shall constitute a waiver or estoppel of Landlord's right to exercise its
rights and remedies for the breach of any of the terms or conditions of this
Section 12.

          (d) The
consent by Landlord to any Transfer shall not constitute a consent to any
subsequent Transfer by Tenant or to any subsequent or successive Transfer by an
assignee or subtenant. However, Landlord may consent to subsequent Transfers or
any amendments or modifications thereto without notifying Tenant or anyone else
liable on the Lease and without obtaining their consent, and such action shall
not relieve such persons from liability under this Lease. 

          (e) In the
event of any default under this Lease, Landlord may proceed directly against
Tenant, any guarantors or anyone else responsible for the performance of this
Lease, including any subtenant or assignee, without first exhausting Landlord's
remedies against any other person or entity responsible therefor to Landlord, or
any security held by Landlord. 

          (f)
Landlord's written consent to any Transfer by Tenant shall not constitute an
acknowledgment that no default then exists under this Lease nor shall such
consent be deemed a waiver of any then existing default. 

          (g) The
discovery of the fact that any financial statement relied upon by Landlord in
giving its consent to an assignment or subletting was materially false shall, at
Landlord's election, render Landlord's consent null and void. 

          (h)
Landlord shall not be liable under this Lease or under any assignment or
sublease to any assignee or subtenant. 

          (i) No
assignment or sublease may be modified or amended without Landlord's prior
written consent. 

          (j) Tenant
or its agent shall not advertise the Premises for lease, sublet or assignment
for less Rent than the then current asking rent for space in the Project.

    
12.4 Additional Terms and Conditions Applicable to Subletting.
The following terms and conditions shall
apply to any subletting by Tenant of all or any part of the Premises and shall
be deemed included in all subleases under this Lease whether or not expressly
incorporated therein: 

          (a) Tenant
hereby absolutely and unconditionally assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease entered
into by Tenant, and Landlord may collect such rent and income and apply same
toward Tenant's obligations under this Lease; provided, however, that until a
default shall occur in the performance of Tenant's obligations under this Lease,
Tenant may receive, collect and enjoy the rents accruing under such sublease.
Landlord shall not, by reason of this or any other assignment of such rents to
Landlord nor by reason of the collection of the rents from a subtenant, be
deemed to have assumed or recognized any sublease or to be liable to the
subtenant for any failure of Tenant to perform and comply with any of Tenant's
obligations to such subtenant under such sublease, including, but not limited
to, Tenant's obligation to return any security deposit. Tenant hereby
irrevocably authorizes and directs any such subtenant, upon receipt of a written
notice from Landlord stating that a default exists in the performance of
Tenant's obligations under this Lease, to pay to Landlord the rents due as they
become due under the sublease. Tenant agrees that such subtenant shall have the
right to rely upon any such statement and request from Landlord, and that such
subtenant shall pay such rents to Landlord without any obligation or right to
inquire as to whether such default exists and notwithstanding any notice from or
claim from Tenant to the contrary. 

          (b) In the
event Tenant shall default in the performance of its obligations under this
Lease, Landlord at its option and without any obligation to do so, may require
any subtenant to attorn to Landlord, in which event Landlord shall undertake the
obligations of Tenant under such sublease from the time of the exercise of said
option to the termination of such sublease; provided, however, Landlord shall
not be liable for any prepaid rents or security deposit paid by such subtenant
to Tenant or for any other prior defaults of Tenant under such
sublease.

    
12.5 Transfer Premium from Assignment or Subletting.
Landlord shall be entitled to receive
from Tenant (as and when received by Tenant) as an item of additional rent fifty
percent (50%) of all amounts received by Tenant from such assignee or subtenant
in excess of the amounts payable by Tenant to Landlord hereunder (the "Transfer
Premium"). "Transfer Premium" shall
mean all Base Rent, additional rent or other consideration of any type
whatsoever payable by the assignee or subtenant in excess of the Base Rent and
additional rent payable by Tenant under this Lease. The Transfer Premium shall
be reduced by the reasonable brokerage commissions, tenant improvement costs,
market rental concessions and legal fees actually paid by Tenant in order to
assign the Lease or to sublet all or a portion of the Premises. If less than all
of the Premises is transferred, the Base Rent and the additional rent shall be
determined on a per rentable square foot basis. "Transfer Premium" shall also
include, but not be limited to, key money and bonus money paid by the assignee
or subtenant to Tenant in connection with such Transfer, and any payment in
excess of fair market value for services rendered by Tenant to the assignee or
subtenant or for assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to the assignee or subtenant in connection with such
Transfer. For purposes of calculating the Transfer Premium, expenses will be
amortized over the life of the sublease. The provisions of this Section 12.5
shall not apply in connection with a Permitted Transfer (defined in Section 12.8
below). 

     12.6
Landlord's Option to Recapture Space. Notwithstanding anything to the contrary contained in this Section 12, if
Tenant shall request to assign this Lease or sublease space in the Premises,
then Landlord shall have the option, by giving written notice to Tenant
("Recapture Notice") within thirty (30) days after receipt of Tenant’s request
for consent to such sublease or assignment, to terminate this Lease and
recapture the Premises. Tenant shall have five (5) business days after receipt
of such Recapture Notice to notify Landlord of its intention to withdraw its
request to assign or sublease the Premises. If Tenant does not withdraw its
request to assign or sublease the Premises, then Landlord may terminate this
Lease as of the commencement date of the proposed sublease or assignment and
recapture the Premises, whereupon this Lease shall terminate. If Tenant so
withdraws its request to assign or sublease the Premises, then this Lease shall
continue in full force and effect. Tenant acknowledges that the purpose of this
Section 12.6 is to enable Landlord to receive profit in the form of higher rent
or other consideration to be received from an assignee or sublessee, to give
Landlord the ability to meet additional space requirements of other tenants of
the Project and to permit Landlord to control the leasing of space in the
Project. Tenant acknowledges and agrees that the requirements of this Section
12.6 are commercially reasonable and are consistent with the intentions of
Landlord and Tenant. 

    
12.7 Landlord's Expenses. In the event Tenant shall assign this Lease or sublet the Premises or
request the consent of Landlord to any Transfer, then Tenant shall pay
Landlord's reasonable costs and expenses incurred in connection therewith,
including, but not limited to, attorneys', architects', accountants', engineers'
or other consultants' fees. The provisions of this Section 12.7 shall not apply
in connection with a Permitted Transfer. 

     12.8 Permitted Transfers.
Notwithstanding anything to the contrary
contained in this Section 12, provided Tenant is not in default after expiration
of any applicable notice and cure periods, Tenant shall have the right, without
Landlord's consent, upon thirty (30) days advance written notice to Landlord, to
assign the Lease or sublet the whole or any part of the Premises (i) to any
entity or entities which are owned by Tenant, or which owns Tenant or any entity
that controls, is controlled by or is under common control with Tenant (which
for purposes hereof, “control” shall be deemed to be ownership of more than
fifty percent (50%) of the stock or other voting interest of the controlled
corporation or other business entity), (ii) in connection with the sale or
transfer of substantially all of the assets of the Tenant or the sale or
transfer of substantially all of the outstanding ownership interests in Tenant,
or (iii) in connection with a merger, consolidation or other corporate
reorganization of Tenant (each of the transactions referenced in the above
subparagraphs (i), (ii), and (iii) are hereinafter referred to as a "Permitted
Transfer," and each surviving entity shall hereinafter be referred to as a
"Permitted Transferee"); provided, that such assignment or sublease is subject
to the following conditions: 

          (a) Tenant
shall remain fully liable under the terms of the Lease; 

          (b) such
Permitted Transfer shall be subject to all of the terms, covenants and
conditions of the Lease;

          (c) such
Permitted Transferee has a net worth at least equal to the net worth of Tenant
as of the date of this Lease, and 

          (d) such
Permitted Transferee shall expressly assume the obligations of Tenant under the
Lease by a document reasonably satisfactory to Landlord.

13. Default;
Remedies.

    
13.1 Default by Tenant. Landlord and Tenant hereby agree that the occurrence of any one or more
of the following events is a material default by Tenant under this Lease and
that said default shall give Landlord the rights described in Section 13.2.
Landlord or Landlord's authorized agent shall have the right to serve any notice
of default, notice to pay rent or quit or similar notice. 

          (a)
Tenant's failure to make any payment of Base Rent, Electric Energy Charge,
Tenant's Share of Operating Expense increases, parking charges, charges for
after hours HVAC, late charges, or any other payment required to be made by
Tenant hereunder, as and when due, where such failure shall continue for a
period of three (3) days after written notice thereof from Landlord to Tenant.
In the event that Landlord serves Tenant with a notice to pay rent or quit
pursuant to applicable unlawful detainer statutes, such notice shall also
constitute the notice required by this Section 13.1(a). 

          (b) The
abandonment of the Premises by Tenant in which event Landlord shall not be
obligated to give any notice of default to Tenant, unless expressly required by
law. 

          (c) The
failure by Tenant to observe or perform any of the covenants, conditions or
provisions of this Lease to be observed or performed by Tenant (other than those
referenced in Sections 13.1(a) and (b), above), where such failure shall
continue for a period of twenty (20) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant's
non-performance is such that more than twenty (20) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said twenty (20) day period and thereafter diligently
pursues such cure to completion. In the event that Landlord serves Tenant with a
notice to quit pursuant to applicable unlawful detainer statutes, said notice
shall also constitute the notice required by this Section 13.1(c). 

          (d) (i) The
making by Tenant or any guarantor of any general arrangement or general
assignment for the benefit of creditors; (ii) Tenant or any guarantor becoming a
"debtor" as defined in 11 U.S.C. 101 or any successor statute thereto (unless,
in the case of a petition filed against Tenant or guarantor, the same is
dismissed within sixty (60) days); (iii) the institution of proceedings seeking
the appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days or the
institution of a foreclosure proceeding against Tenant's real or personal
property; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this Section 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect. 

          (e) The
discovery by Landlord that any financial statement, representation or warranty
given to Landlord by Tenant, or by any guarantor of Tenant's obligations
hereunder, is or was materially false. 

          (f) If
Tenant is a corporation, limited liability company or a partnership, the
dissolution or liquidation of Tenant. 

     13.2
Remedies. 

          (a) In the
event of any default or breach of this Lease by Tenant, Landlord may, at any
time thereafter, with or without notice or demand, and without limiting Landlord
in the exercise of any right or remedy which Landlord may have by reason of such
default: 

              
(i) terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease and the Term hereof shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord. If Landlord
terminates this Lease, Landlord may recover from Tenant (A) the worth at the
time of award of the unpaid rent which had been earned at the time of
termination; (B) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; (C) the worth at the time of award of the amount by which
the unpaid rent for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(D) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of releasing, including necessary renovation and
alteration of the Premises, reasonable attorneys' fees, any real estate
commissions actually paid by Landlord and the unamortized value of any free
rent, reduced rent, tenant improvement allowance or other economic concessions
provided by Landlord. The "worth at time of award" of the amounts referred to in
Section 13.2(a)(i)(A) and (B) shall be computed by allowing interest at the
lesser of two percent (2%) per annum over the "prime rate" as established by
Citibank, N.A., or the maximum interest rate permitted by applicable law. The
worth at the time of award of the amount referred to in Section 13.2(a)(i)(C)
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of New York at the time of award plus one percent (1%). For
purposes of this Section 13.2(a)(i), "rent" shall be deemed to be all monetary
obligations required to be paid by Tenant pursuant to the terms of this Lease.

              
(ii) maintain Tenant's right of possession in which event Landlord shall
have the remedy which permits Landlord to continue this Lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due. 

              
(iii) collect sublease rents (or appoint a receiver to collect such rent)
and otherwise perform Tenant's obligations at the Premises, it being agreed,
however, that the appointment of a receiver for Tenant shall not constitute an
election by Landlord to terminate this Lease. 

              
(iv) pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the state in which the Premises are located.

          (b) No
remedy or election hereunder shall be deemed exclusive, but shall, wherever
possible, be cumulative with all other remedies at law or in equity. 

          (c) If
Tenant abandons or vacates the Premises, Landlord may re-enter the Premises and
such re-entry shall not be deemed to constitute Landlord's election to accept a
surrender of the Premises or to otherwise relieve Tenant from liability for its
breach of this Lease. No surrender of the Premises shall be effective against
Landlord unless Landlord has entered into a written agreement with Tenant in
which Landlord expressly agrees to (i) accept a surrender of the Premises and
(ii) relieve Tenant of liability under the Lease. The delivery of keys to
Landlord or any employee or agent of Landlord shall not constitute the
termination of the Lease or the surrender of the Premises. 

    
13.3 Default by Landlord. Landlord shall not be in default under this Lease unless Landlord fails
to perform obligations required of Landlord within thirty (30) days after
written notice by Tenant to Landlord and to the holder of any mortgage or deed
of trust encumbering the Project whose name and address shall have theretofore
been furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligation; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its cure,
then Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently pursues the same to
completion. This Lease and the obligations of Tenant hereunder shall not be
affected or impaired because Landlord is unable to fulfill any of its
obligations hereunder or is delayed in doing so, if such inability or delay is
caused by reason of strike or other labor problems, acts of God, riot,
insurrection, governmental actions or requirements, or any other cause beyond
the reasonable control of Landlord, and the time for Landlord's performance
shall be extended for the period of any such delay. 

    
13.4 Late Charges. Tenant
hereby acknowledges that late payment by Tenant to Landlord of Base Rent,
Tenant's Share of Operating Expense increases, parking charges, after hours HVAC
charges, or other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed encumbering the Project. Accordingly, if any
installment of Base Rent, Tenant's Share of Operating Expense increases, parking
charges, after hours HVAC charges or any other sum due from Tenant shall not be
received by Landlord within five (5) days of when such amount shall be due,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
a late charge equal to six percent (6%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of late payment by Tenant. Acceptance of
such late charge by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder including the
assessment of interest under Section 13.5. Notwithstanding anything to the
contrary contained in this Section 13.4 of the Lease, Landlord agrees to waive
imposition of such late charge on the first occasion in any twelve (12) month
period provided the overdue payment is made within five (5) business days after
Landlord gives Tenant written notice that the payment was not made when due.

    
13.5 Interest on Past-due Obligations. Except as expressly herein provided, any amount due to
Landlord that is not paid when due shall bear interest at the lesser of two
percent (2%) per annum over the "prime rate" as established by Citibank, N.A.,
or the maximum rate permitted by applicable law. Payment of such interest shall
not excuse or cure any default by Tenant under this Lease; provided, however,
that interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant. 

    
13.6 Payment of Rent after Default. If Tenant fails to pay Base Rent, Tenant's Share of Operating
Expense increases, parking charges or any other monetary obligation due
hereunder on the date it is due, after Tenant's third failure to pay any
monetary obligation on the date it is due, at Landlord's option, all monetary
obligations of Tenant hereunder shall thereafter be paid by cashiers check. If
Landlord has required Tenant to make said payments by cashiers check, Tenant's
failure to make a payment by cashiers check shall be a material default
hereunder. 

14. Landlord's Right to Cure
Default; Payments by Tenant. All covenants
and agreements to be kept or performed by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any reduction
of rent. If Tenant shall be in default pursuant to Section 13.1, Landlord may,
but shall not be obligated to, after three (3) days' prior written notice to
Tenant, make any such payment or perform any such act on Tenant's behalf without
waiving its rights based upon any default of Tenant and without releasing Tenant
from any obligations hereunder. Tenant shall pay to Landlord, within ten (10)
days after delivery by Landlord to Tenant of statements therefor, an amount
equal to the expenditures reasonably made by Landlord in connection with the
remedying by Landlord of Tenant's defaults pursuant to the provisions of this
Section 14. 

15. Condemnation. If any portion of the Premises or the Project are taken under
the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises or Project are taken by such condemnation as would substantially and
adversely affect the operation and profitability of Tenant's business conducted
from the Premises, and said taking lasts for ninety (90) days or more, Tenant
shall have the option, to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession. Landlord shall endeavor to provide
Tenant with reasonable prior notice of any such taking which will directly
impact the Premises to the extent that Landlord has prior notice of the same. If
a taking lasts for less than ninety (90) days, Tenant's rent shall be abated
during said period but Tenant shall not have the right to terminate this Lease.
If Tenant does not terminate this Lease in accordance with the foregoing, this
Lease shall remain in full force and effect as to the portion of the Premises
remaining, except that the rent and Tenant's Share of Operating Expenses shall
be reduced in the proportion that the usable floor area of the Premises taken
bears to the total usable floor area of the Premises. Common Areas taken shall
be excluded from the Common Areas usable by Tenant and no reduction of rent
shall occur with respect thereto or by reason thereof. Landlord shall have the
option in its sole discretion to terminate this Lease as of the taking of
possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of a taking by
condemnation of any part of the Premises or the Project. Any award for the
taking of all or any part of the Premises or the Project under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, as severance damages, or as damages for tenant improvements; provided,
however, that Tenant shall be entitled to any separate award for loss of or
damage to Tenant's trade fixtures and removable personal property and any award
available for the relocation of Tenant's business. In the event that this Lease
is not terminated by reason of such condemnation, and subject to the
requirements of any lender that has made a loan to Landlord encumbering the
Project, Landlord shall to the extent of severance damages received by Landlord
in connection with such condemnation, repair any damage to the Project caused by
such condemnation except to the extent that Tenant has been reimbursed therefor
by the condemning authority. Tenant shall pay any amount in excess of such
severance damages required to complete such repair. Except as set forth in this
Section 15, Landlord shall have no liability to Tenant for interruption of
Tenant's business upon the Premises, diminution of Tenant's ability to use the
Premises, or other injury or damage sustained by Tenant as a result of such
condemnation.

16. Vehicle Parking. 

    
16.1 Use of Parking Facilities. During the Term and subject to the rules and regulations attached hereto
as Exhibit "C" as modified by Landlord from time to time (the "Rules"), Tenant
shall be entitled to use the number of parking spaces set forth in Section 1.13
in the parking facility of the Project at the monthly rate applicable from time
to time for monthly parking as set by Landlord and/or its licensee. Landlord
may, in its sole discretion, assign and designate the location of any reserved
parking spaces. Landlord reserves the right at any time to reasonably relocate
Tenant's reserved and unreserved parking spaces. If Tenant commits or allows in
the parking facility any of the activities prohibited by the Lease or the Rules,
then Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable by Tenant
upon demand by Landlord. Tenant's parking rights are the personal rights of
Tenant and Tenant shall not transfer, assign, or otherwise convey its parking
rights separate and apart from this Lease. 

    
16.2 [Intentionally
omitted] 

17. Broker's Fee. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
Section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party. Landlord shall pay any commission(s) due Broker identified
in Section 1.15, according to separate agreement between Broker and Landlord.

18. Estoppel
Certificate. 

    
18.1 Delivery of Certificate. Tenant shall at any time upon not less than ten (10) business days' prior
written notice from Landlord execute, acknowledge and deliver to Landlord a
statement in writing certifying such information as Landlord may reasonably
request including, but not limited to, the following: (a) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect) (b) the date to which the Base Rent and other charges are paid
in advance and the amounts so payable, (c) that there are not, to Tenant's
knowledge, any uncured defaults or unfulfilled obligations on the part of
Landlord, or specifying such defaults or unfulfilled obligations, if any are
claimed, and (d) that all tenant improvements to be constructed by Landlord, if
any, have been completed in accordance with Landlord's obligations and Tenant
has taken possession of the Premises. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Project.

 

    
18.2 Failure to Deliver Certificate. At Landlord's option, the failure of Tenant to deliver such
statement within such time shall constitute a material default of Tenant
hereunder, or it shall be conclusive upon Tenant that (a) this Lease is in full
force and effect, without modification except as may be represented by Landlord,
(b) there are no uncured defaults in Landlord's performance, (c) not more than
one month's Base Rent has been paid in advance, and (d) all tenant improvements
to be constructed by Landlord, if any, have been completed in accordance with
Landlord's obligations and Tenant has taken possession of the Premises.

    
18.3 Financial Information. If Landlord desires to finance, refinance, or sell the Project, or any
part thereof, Tenant hereby agrees to deliver, and to cause any guarantor of
Tenant's obligations to deliver, to any lender or purchaser designated by
Landlord such financial statements of Tenant or any guarantor and other
information as may be reasonably required by such lender or purchaser. All such
financial statements shall be received by Landlord and such lender or purchaser
in confidence and shall be used only for the purposes herein set forth.
Notwithstanding the foregoing, so long as Tenant is a publicly traded company,
Tenant needs only to submit its annual report to comply with the provisions of
this Section 18.3. 

19. Landlord's Liability.
Tenant acknowledges that Landlord shall have
the right to transfer all or any portion of its interest in the Project and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease; and Tenant hereby agrees to look solely to Landlord's transferee for the
performance of Landlord's obligations hereunder after the date of the transfer.
Upon such a transfer, Landlord shall, at its option, return Tenant's security
deposit to Tenant or transfer Tenant's security deposit to Landlord's transferee
and, in either event, Landlord shall have no further liability to Tenant for the
return of its security deposit. Subject to the rights of any lender holding a
mortgage or deed of trust encumbering all or part of the Project, Tenant agrees
to look solely to Landlord's equity interest in the Project for the collection
of any judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or willful misconduct of Landlord, its partners, employees and
agents. No partner, employee or agent of Landlord shall be personally liable for
the performance of Landlord's obligations hereunder or be named as a party in
any lawsuit arising out of or related to, directly or indirectly, this Lease and
the obligations of Landlord hereunder. The obligations under this Lease do not
constitute personal obligations of the individual partners of Landlord and
Tenant shall not seek recourse against the individual partners of Landlord or
their assets. 

20. Indemnity. Tenant shall indemnify, defend and hold harmless Landlord, its
agents, partners, and employees from and against any and all claims for damage
to the person or property of any person or entity arising from Tenant's use of
the Project, or from the conduct of Tenant's business or from any activity, work
or things done, permitted or suffered by Tenant in or about the Project and
shall further indemnify, defend and hold harmless Landlord, its agents, partners
and employees from and against any and all claims, costs and expenses arising
from any breach or default in the performance of any obligation of Tenant to be
performed under the terms of this Lease, or arising from any act or omission of
Tenant, or any of Tenant's agents, contractors, employees, or invitees, and from
and against all costs, attorneys' fees, expenses and liabilities incurred by
Landlord, its agents, partners and employees as the result of any such use,
conduct, activity, default or negligence. In case any action or proceeding is
brought against Landlord, its agents, partners and employees, Tenant shall
defend Landlord, and its agents, partners and employees at Tenant's expense by
counsel reasonably satisfactory to Landlord and Landlord shall cooperate with
Tenant in such defense. Landlord need not have first paid any claim in order to
be so indemnified. This indemnity shall survive the expiration or sooner
termination of this Lease. Notwithstanding the provisions of Sections 20 and 21
of the Lease to the contrary, Tenant shall not be required to indemnify and hold
Landlord harmless from any loss, cost, liability, damage or expense
(collectively "Claims"), to any person, property or entity resulting from the
gross negligence or willful misconduct of Landlord or its agents or employees,
in connection with Landlord's activities at the Project. Landlord hereby
indemnifies and holds Tenant harmless from any Claims by any third party in
connection with the gross negligence or willful misconduct of Landlord or its
agents or employees in connection with Landlord’s activities at the Project.
Each party’s agreement to indemnify and hold the other harmless set forth above
are not intended to, and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Landlord or Tenant pursuant
to the provisions of the Lease to the extent that such policies cover the
results of such acts or conduct. 

21. Exemption of Landlord from
Liability. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers, or any other person
in or about the Project, nor shall Landlord be liable for injury to the person
of Tenant, Tenant's employees, agents or contractors, whether such damage or
injury is caused by or results from any cause whatsoever including, but not
limited to, theft, criminal activity at the Project, negligent security
measures, bombings or bomb scares, hazardous waste, fire, steam, electricity,
gas, water or rain, breakage of pipes, sprinklers, plumbing, air conditioning or
lighting fixtures, or from any other cause, whether said damage or injury
results from conditions arising upon the Premises or upon other portions of the
Project, or from other sources or places, or from new construction or the
repair, alteration or improvement of any part of the Project, or of the
equipment, fixtures or appurtenances applicable thereto, unless the cause of the
damage or injury arises out of the gross negligence or willful misconduct of
Landlord's or its employees or agents. Landlord shall not be liable for any
damages arising from any act or neglect of any other tenant, occupant or user of
the Project, nor from the failure of Landlord to enforce the provisions of the
lease of any other tenant of the Project. Tenant, as a material part of the
consideration to Landlord hereunder, hereby assumes all risk of damage to
property of Tenant or injury to persons, in, upon or about the Project arising
from any cause, excluding Landlord's gross negligence or willful misconduct or
the gross negligence or willful misconduct of its agents, partners or employees,
and Tenant hereby waives all claims in respect thereof against Landlord, its
agents, partners and employees.

22. Environmental
Provisions. 

          (a) For purposes of this lease, the following additional
definitions shall apply: 

              
(i) "Hazardous Substances" shall include any pollutants, petroleum
products, dangerous substances, toxic substances, hazardous wastes, hazardous
materials, or hazardous substances as defined in or pursuant to the Industrial
Site Recovery Act and all rules, regulations, orders, directives and opinions
promulgated thereunder ("ISRA") N.J.S.A. 13:1K-6 et seq.; the Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 et seq. and all rules, regulations,
orders, directives and opinions promulgated thereunder ("Spill Act"); the Solid
Waste Management Act, N.J.S.A. 13:1E-1 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. '6901 et seq.; the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. '9601 et seq. and all rules,
regulations, orders, directives and opinions promulgated thereunder ("CERCLA");
or any other Federal, State or Local environmental law or ordinance; and all
rules, regulations, orders, directives and opinions promulgated under the
foregoing, any amendments to any of the foregoing and any successor legislation
to any of the foregoing (collectively "Environmental Laws");

              
(ii) "Release" means releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping;

              
(iii) "Notice" means any summons, citation, directive, order, claim,
litigation, investigation, proceeding, judgment, letter, submission or other
communication, written or oral, actual or threatened, from the New Jersey
Department of Environmental Protection ("DEP"), the United States Environmental
Protection Agency ("EPA"), any other Federal, State or Local agency or authority
or any other entity or any individual, concerning any act or omission resulting
or which may result in the Release of Hazardous Substances into the waters or
onto the lands of the State of New Jersey or into waters outside the
jurisdiction of the State of New Jersey or into the "environment" as such terms
are defined in CERCLA, or otherwise related to any Environmental Law or Tenant's
obligations pursuant to this Section 22. "Notice" shall include the imposition
of any liens of any real or personal property or revenues of Tenant including,
but not limited to, Tenant's interest in the Premises or any of Tenant's
property located thereon, pursuant to or resulting from the violation of any
Environmental Law, or any other governmental actions, orders or permits or any
knowledge after due inquiry and investigation of any facts which could give rise
to any of the above. 

          (b) To the
extent that Tenant may be permitted under applicable law to use the Premises
and/or the Project for the generating, manufacturing, refining, transporting,
treating, storing, handling, disposing, transferring or processing of Hazardous
Substances, Tenant shall ensure that said use shall be conducted at all times
strictly in accordance with applicable Environmental Law. Tenant shall not cause
as a result of any intentional or unintentional act, a Release of Hazardous
Substances. If any intentional or unintentional act or omission results in any
actual or alleged Release of Hazardous Substances, Tenant promptly shall conduct
necessary sampling and cleanup and remediate such Release in accordance with
applicable Environmental Laws.

          (c) Tenant
shall not operate any business at the Premises which shall be subject to ISRA.
Tenant hereby represents that its North
American Industry Classification System (herein "NAICS") Number is the NAICS Number set
forth in Section 1.19 above as determined by
reference to the SIC Manual and its operations shall consist of the Use
described in Section 1.5. Notwithstanding any provision of ISRA to the contrary,
if the Tenant's operations become subject to ISRA, Tenant, at Tenant's own
expense, shall do whatever is necessary to comply with ISRA whenever an
obligation to do so arises. If Landlord reasonably suspects that Tenant’s
operations at the Premises may be subject to ISRA or if Landlord requires a
letter from DEP on behalf of Tenant in connection with a sale or refinancing of
the Project, then if requested to do so by Landlord, but no more often than once
per year, Tenant shall reasonably cooperate with Landlord to obtain a letter
from DEP or any successor agency confirming that ISRA does not apply to Tenant's
operations. At no expense to Landlord, Tenant promptly shall provide all
information requested by Landlord regarding or in furtherance of ISRA
compliance. Tenant shall sign any affidavit concerning compliance with
Environmental Laws submitted by Landlord which is true, accurate and complete;
if an affidavit is not true, accurate and complete, Tenant shall provide the
necessary information to make it true, accurate or complete and then shall sign
same. 

          (d) Tenant
promptly shall furnish Landlord with true copies of any Notices of any nature
made by Tenant to, or received by Tenant from DEP, EPA, or any local, state or
federal authority.

          (e)
Notwithstanding anything in this Lease to the contrary, and without limiting any
other provisions of this Section 22, Tenant, at its sole cost and expense, shall
observe, comply and fulfill all of the terms and provisions of all applicable
Environmental Laws, as the same may be amended from time to time, as they relate
to Tenant's use and occupancy of the Premises during the term of this
Lease.

     Without
limiting the foregoing, Tenant agrees: 

              
(i) That it shall not do or omit to do nor suffer the commission or
omission of any act, the commission or omission of which is prohibited by or may
result in liability pursuant to any Environmental Law, including without
limitation, the Release of Hazardous Substances;

              
(ii) Whenever the provisions of any Environmental Law
requires the "owner or operator" of the Premises to do any act, Tenant on behalf
of Tenant and/or Landlord, as the case may be, shall do such act at its sole
cost and expense, including the making of all submissions and the providing of
all information with respect to Tenant’s use and occupancy of the Premises, it
being the intention of the parties hereto that Landlord shall be free of all
expenses and obligations arising from or in connection with compliance with
Environmental Laws relating to Tenant’s use and occupancy of the Premises to the
extent caused by Tenant or any party claiming by, through or under Tenant and
that Tenant shall fulfill all such obligations and pay all such expenses.

          (f) In the
event there shall be filed a lien against the Premises and/or the Project
arising out of a claim(s) by DEP pursuant to the provisions of the Spill Act or
by EPA pursuant to the provisions of CERCLA caused or contributed to by Tenant
and/or any entity claiming by, through or under Tenant, Tenant immediately
either shall: 1) pay the claim and remove the lien from the Premises and/or the
Project; or, ii) furnish a bond, cash receipt or other security satisfactory to
Landlord sufficient to discharge the claim out of which the lien arises.

          (g) (i)
Tenant promptly shall provide Landlord with all documentation and correspondence
provided to DEP pursuant to the Worker and Community Right to Know Act, N.J.S.A.
34:5A-1 et seq., and all rules, regulations, orders, directives and opinions
promulgated thereunder. 

              
(ii) Tenant promptly shall supply Landlord all reports and notices made
by Tenant pursuant to the Hazardous Substance Discharge Reports and Notices Act,
N.J.S.A. 13:1K-15, et seq. and all rules, regulations, orders, directives and
opinions promulgated thereunder. 

              
(iii) Tenant promptly shall provide Landlord with a copy of all permits
obtained pursuant to any Environmental Law. 

          (h) Tenant
acknowledges that for Landlord to comply with the requirements of Environmental
Laws, Landlord from time to time, may have to enter the Premises. Landlord
and/or its agents shall have an irrevocable license and right to enter the
Premises for such purposes. All such entry by Landlord and/or its agents shall
be upon reasonable notice to Tenant. 

          (i) Tenant
agrees to cooperate with Landlord to provide any information necessary to
Landlord in order to effect compliance with any Environmental Law and to execute
any documents requested by Landlord in connection with compliance with any
Environmental Law. 

          (j) Tenant
shall cooperate fully in allowing, from time to time, such examinations, tests,
inspections and reviews of the Premises as Landlord, in its sole and absolute
discretion, shall determine to be advisable in order to evaluate any potential
environmental problems or Tenant's compliance with Environmental Laws.

          (k) Tenant
shall indemnify, defend and hold Landlord harmless from any and all fines,
suits, procedures, claims, liabilities, costs and actions of any kind, including
counsel fees (including those incurred to enforce this indemnity or for any
other purpose) arising out of or in any way related to (1) any spills or
discharges of Hazardous Substances at the Premises and/or Project to the extent
caused by Tenant or any party claiming by, through or under Tenant, or (2)
Tenant's failure to comply with this Section 22. Tenant's failure to abide by
the terms of this Section 22 shall be enforceable by injunction. Tenant’s
indemnity obligations set forth in this Section 22 shall survive the expiration
or earlier termination of this Lease. 

          (l)
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be responsible for complying with any Environmental Law in connection with
any spill or Release of Hazardous Substances which shall have occurred prior to
the Commencement Date of this Lease. 

          (m) In the
event Tenant shall fail to comply in full with this Section, pursuant to Section
14 above, Landlord, at its option, may perform any and all of Tenant's
obligations as aforesaid, and all costs and expenses so incurred by Landlord
shall be deemed a claim against Tenant as Additional Rent payable on demand.

          (n) In no
event shall Landlord be liable or responsible to Tenant or anyone claiming
through or under Tenant for the failure of any other tenant or other person to
comply with any Environmental Law and Tenant shall not be excused from the
performance of any obligation hereunder due to such failure. 

          (o) The
provisions of this Section 22 shall survive the expiration or earlier
termination of this Lease, regardless of the reason for such termination and
compliance with the provisions of this Section 22 may require Tenant to expend
funds or perform acts after the expiration or termination of this Lease. Tenant
agrees to expend such funds and/or perform such acts and shall not be excused
therefrom notwithstanding any expiration or termination of this Lease, it being
agreed and acknowledged that Landlord would not have entered into this Lease but
for the provisions of this Section 22. 

          (p)
Landlord represents and warrants that, as of the date of this Lease, to the best
of its knowledge and belief, there are no Hazardous Materials on, in or under
the Premises or the Project in violation of any applicable Environmental Laws
and Landlord has not received written notice from any governmental agencies that
the Project is in violation of any applicable Environmental Laws. Tenant shall
have no liability arising from the existence or disposal of Hazardous Material
brought into the Project by anyone other than Tenant, its employees, agents,
contractors, assignees, subtenants, licensees or any other party claiming by,
through or under Tenant. Landlord shall indemnify, defend and hold harmless
Tenant from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses which arise solely as a result of the
existence or disposal of Hazardous Material brought into the Project by
Landlord, its employees, contractors or agents in violation of any applicable
laws. Notwithstanding the foregoing, both parties hereto recognize and
acknowledge that the other party or their respective agents may use and store
within the Building reasonable quantities of customary office and cleaning
supplies; provided such items are stored, used and disposed of in accordance
with applicable federal, state or local law. Landlord’s indemnity obligations
set forth in this Section 22(p) shall survive the expiration or earlier
termination of this Lease. 

23. Medical Waste Disposal.
If
Tenant produces medical waste, Landlord may,
at its option, provide medical waste disposal services to Tenant. If Landlord
elects to provide such services, Landlord may require Tenant to use said
services. Landlord, at its option, may bill Tenant directly for such services,
which amounts shall then constitute additional rent hereunder, or Landlord may
include the cost of providing such services in Operating Expenses. Tenant waives
its right to the fullest extent allowed by law to assert any claim against
Landlord in connection with the negligent provision of medical waste disposal
services by Landlord. In the event Landlord is unable or chooses not to provide
such disposal services to Tenant, Tenant shall arrange for the disposal of its
medical waste and such disposal shall be done in compliance with all applicable
laws. Tenant hereby agrees to indemnify, defend and hold harmless Landlord
against any cost, loss, liability, action, suit or expense (including attorneys'
fees) arising out of or relating to the existence of or the disposal of medical
waste produced by Tenant at the Premises. 

24. Tenant Improvements.
Tenant acknowledges and agrees that Landlord
shall not be obligated to construct any tenant improvements on behalf of Tenant
unless a work letter agreement (the "Work Letter") is attached to this Lease as
Schedule 1. If a space plan is attached to the Work Letter, the space plan shall
not be effective unless separately initialed by Landlord. Except as set forth in
a Work Letter, it is specifically understood and agreed that Landlord has no
obligation and has made no promises to alter, remodel, improve, renovate, repair
or decorate the Premises, the Project, or any part thereof, or to provide any
allowance for such purposes, and that no representations respecting the
condition of the Premises or the Project have been made by Landlord to Tenant.

See Addendum Paragraph 2 

25. Subordination.

    
25.1 Effect of Subordination. This Lease, and any Option (as defined in Section 26 below) granted
hereby shall be subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Project and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. In the
event of a foreclosure of any such mortgage or the termination of this Lease,
Tenant will, upon request of any person or party succeeding to the interest of
Landlord as a result of such foreclosure or termination, automatically become
the Tenant of such successor in interest without change in the terms or other
provisions of this Lease. Upon request by Landlord's mortgagee or such successor
in interest, Tenant shall execute and deliver, on terms and conditions
reasonably acceptable to the parties, an instrument or instruments confirming
the attornment herein provided for. If any mortgagee, trustee or ground lessor
shall elect to have this Lease and any Options granted hereby prior to the lien
of its mortgage, deed of trust or ground lease, and shall give written notice
thereof to Tenant, this Lease and such Options shall be deemed prior to such
mortgage, deed of trust or ground lease, whether this Lease or such Options are
dated prior or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof. In the event that the Project shall
become subject to any lien of any mortgage, deed of trust or any other
hypothecation or security after the Commencement Date, Landlord shall use
commercially reasonable efforts to obtain a non-disturbance agreement from any
future lender of the Project on such lender’s standard form for the benefit of
Tenant. 

    
25.2 Execution of Documents. Tenant agrees to execute and acknowledge any documents required to
effectuate an attornment, a subordination, or to make this Lease or any Option
granted herein prior to the lien of any mortgage, deed of trust or ground lease,
as the case may be. Tenant's failure to execute such documents within ten (10)
business days after written demand shall constitute a material default by Tenant
hereunder or, at Landlord's option, Landlord shall have the right to execute
such documents on behalf of Tenant as Tenant's attorney-in-fact. Tenant does
hereby make, constitute and irrevocably appoint Landlord as Tenant's
attorney-in-fact and in Tenant's name, place and stead, to execute such
documents in accordance with this Section 25.2, said appointment to be a power
during the Term of this Lease coupled with an interest and irrevocable.

    
25.3 Obligations of Mortgagee. Anything herein contained to the contrary notwithstanding, under no
circumstances shall any mortgagee or purchaser upon foreclosure, or any assignee
or lessee of such mortgagee or purchaser, as the case may be, whether or not it
shall have succeeded to the interests of the Landlord under this Lease, be:

          (a) Liable
for any act, omission or default of any prior landlord or for the return of any
security deposit or part thereof not actually received by such lessor,
mortgagee, purchaser, assignee, or lessee, as the case may be; or 

          (b) subject
to any offsets, claims or defenses that the Tenant might have against any prior
landlord; or 

          (c) bound
by any Base Rent or other payment required to be made by Tenant hereunder that
Tenant might have paid to any prior landlord for more than one month in advance
or for more than three months in advance where such rent payments are payable at
intervals of more than one month; or 

          (d) bound
by any modification, amendment or abridgment of the Lease, or any cancellation
or surrender of the same (except any such cancellation made by Landlord as a
result of a default by Tenant), made without its prior written approval.

26. Options. 

    
26.1 Definition. As used
in this Lease, the word "Option" has the following meaning: (1) the right or
option to extend the Term of this Lease or to renew this Lease, and (2) the
option or right of first refusal to lease the Premises or the right of first
offer to lease the Premises or the right of first refusal to lease other space
within the Project or the right of first offer to lease other space within the
Project. Any Option granted to Tenant by Landlord must be evidenced by a written
option agreement attached to this Lease as a rider or addendum or said option
shall be of no force or effect. 

     26.2
Options Personal. Each Option granted to
Tenant in this Lease, if any, is personal to the original Tenant and may be
exercised only by the original Tenant while occupying the entire Premises and
may not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Tenant, including, without limitation, any permitted
transferee as defined in Section 12. The Options, if any, herein granted to
Tenant are not assignable separate and apart from this Lease, nor may any Option
be separated from this Lease in any manner, either by reservation or otherwise.
If at any time an Option is exercisable by Tenant, the Lease has been assigned,
or a sublease exists as to any portion of the Premises, the Option shall be
deemed null and void and neither Tenant nor any assignee or subtenant shall have
the right to exercise the Option. For purposes of this Section 26.2 only, a
Permitted Transferee shall be deemed to be the "original Tenant". 

     26.3
Multiple Options. In the event that Tenant
has multiple Options to extend or renew this Lease a later Option cannot be
exercised unless the prior Option to extend or renew this Lease has been so
exercised. 

     26.4 Effect
of Default on Options. Tenant shall have no
right to exercise an Option (i) during the time commencing from the date
Landlord gives to Tenant a notice of default pursuant to Section 13.1 and
continuing until the noncompliance alleged in said notice of default is cured,
or (ii) if Tenant is in default of any of the terms, covenants or conditions of
this Lease. The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Tenant's inability to exercise an Option
because of the provisions of this Section 26.4. 

     26.5
Limitations on Options. Notwithstanding
anything to the contrary contained in any rider or addendum to this Lease, any
options, rights of first refusal or rights of first offer granted hereunder
shall be subject and secondary to Landlord's right to first offer and lease any
such space to any tenant who is then occupying or leasing such space at the time
the space becomes available for leasing and shall be subject and subordinated to
any other options, rights of first refusal or rights of first offer previously
given to any other person or entity. 

See Addendum Paragraph 3 

27. Landlord Reservations.
Landlord shall have the right: (a) to change
the name and address of the Project or Building upon not less than ninety (90)
days prior written notice; (b) to, at Tenant's expense, provide and install
Building standard graphics on or near the door of the Premises and such portions
of the Common Areas as Landlord shall determine, in Landlord's sole discretion;
(c) to permit any tenant the exclusive right to conduct any business as long as
such exclusive right does not conflict with any rights expressly given herein;
and (d) to place signs, notices or displays upon the roof, interior, exterior or
Common Areas of the Project. Tenant shall not use a representation (photographic
or otherwise) of the Building or the Project or their name(s) in connection with
Tenant's business or suffer or permit anyone, except in an emergency, to go upon
the roof of the Building. Landlord reserves the right to use the exterior walls
of the Premises, and the area beneath, adjacent to and above the Premises
together with the right to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Project provided that Landlord's use does not unreasonably
interfere with Tenant's use of the Premises. 

28. Changes to Project.
Landlord shall have the right, in Landlord's
sole discretion, from time to time, to make changes to the size, shape,
location, number and extent of the improvements comprising the Project
(hereinafter referred to as "Changes") including, but not limited to, the
Project interior and exterior, the Common Areas, elevators, escalators,
restrooms, HVAC, electrical systems, communication systems, fire protection and
detection systems, plumbing systems, security systems, parking control systems,
driveways, entrances, parking spaces, parking areas and landscaped areas so long
as such Changes do not have a permanent material adverse effect on Tenant’s
access to or use of the Premises. In connection with the Changes, Landlord may,
among other things, erect scaffolding or other necessary structures at the
Project, limit or eliminate access to portions of the Project, including
portions of the Common Areas, or perform work in the Building, which work may
create noise, dust or leave debris in the Building. Tenant hereby agrees that
such Changes and Landlord's actions in connection with such Changes shall in no
way constitute a constructive eviction of Tenant or entitle Tenant to any
abatement of rent. Landlord shall have no responsibility or for any reason be
liable to Tenant for any direct or indirect injury to or interference with
Tenant's business arising from the Changes, nor shall Tenant be entitled to any
compensation or damages from Landlord for any inconvenience or annoyance
occasioned by such Changes or Landlord's actions in connection with such Changes
provided that Landlord agrees to use reasonable efforts to minimize unreasonable
interference with Tenant's use and occupancy of the Premises during Landlord's
actions in connection with such Changes. 

29. [Intentionally omitted]

30. Holding Over. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable shall be one hundred fifty percent
(150%) of the Base Rent payable immediately preceding the termination date of
this Lease, and all Options, if any, shall be deemed terminated and be of no
further effect. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the Term hereof without Landlord's consent,
Tenant shall, at Landlord's option, be treated as a tenant at sufferance or a
trespasser. Nothing contained herein shall be construed to constitute Landlord's
consent to Tenant holding over at the expiration or earlier termination of the
Lease Term. If Tenant remains in possession of the Premises for a period in
excess of sixty (60) days following the expiration or earlier termination of the
Lease, Tenant hereby agrees to indemnify, hold harmless and defend Landlord from
any cost, loss, claim or liability (including attorneys' fees) Landlord may
incur as a result of Tenant's failure to surrender possession of the Premises to
Landlord upon the termination of this Lease.

31. Landlord's
Access.

    
31.1 Access. Landlord and
Landlord's agents and employees shall have the right to enter the Premises at
reasonable times upon reasonable notice (except in the event of an emergency in
which case no such notice shall be required) for the purpose of inspecting the
Premises, performing any services required of Landlord, showing the Premises to
prospective purchasers, lenders, or tenants, undertaking safety measures and
making alterations, repairs, improvements or additions to the Premises or to the
Project. In the event of an emergency, Landlord may gain access to the Premises
by any reasonable means, and, unless caused solely by the gross negligence or
willful misconduct of Landlord or Landlord's agents and employees, Landlord
shall not be liable to Tenant for damage to the Premises or to Tenant's property
resulting from such access. Landlord may at any time place on or about the
Building for sale or for lease signs and Landlord may at any time during the
last one hundred twenty (120) days of the Term hereof place on or about the
Premises for lease signs. 

    
31.2 Keys. Landlord shall
have the right to retain keys to the Premises and to unlock all doors at the
Premises, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forcible or unlawful
entry or detainer of the Premises or an eviction. Tenant waives any claims for
damages or injuries or interference with Tenant's property or business in
connection therewith. Tenant shall provide Landlord with one key for each lock
in the Premises. 

32. Security Measures. Tenant
hereby acknowledges that Landlord shall have no obligation whatsoever to provide
guard service or other security measures for the benefit of the Premises or the
Project, and Landlord shall have no liability to Tenant due to its failure to
provide such services. Tenant assumes all responsibility for the protection of
Tenant, its agents, employees, contractors and invitees and the property of
Tenant and of Tenant's agents, employees, contractors and invitees from acts of
third parties. Nothing herein contained shall prevent Landlord, at Landlord's
sole option, from implementing security measures for the Project or any part
thereof, in which event Tenant shall participate in such security measures and
the cost thereof shall be included within the definition of Operating Expenses.
Landlord shall have the right, but not the obligation, to require all persons
entering or leaving the Project to identify themselves to a security guard and
to reasonably establish that such person should be permitted access to the
Project. 

 

33. Easements. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign
any of the aforementioned documents within ten (10) days after Landlord's
request and Tenant's failure to do so shall constitute a material default by
Tenant. The obstruction of Tenant's view, air, or light by any structure erected
in the vicinity of the Project, whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord. 

34. Transportation Management.
Tenant shall fully comply with all present or
future programs implemented or required by any governmental or
quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located. 

35. Severability. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof. 

36. Time of Essence.
Time is of the essence with respect to each
of the obligations to be performed by Tenant under this Lease. 

37. Definition of Additional Rent.
All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, parking charges and charges for
after hours HVAC shall be deemed to be rent. 

38. Incorporation of Prior
Agreements. This Lease and the attachments
listed in Section 1.16 contain all agreements of the parties with respect to the
lease of the Premises and any other matter mentioned herein. No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective. Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord or any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.

39. Amendments. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.

40. Notices. Any notice required or permitted to be given hereunder shall
be in writing and may be given by certified mail, return receipt requested,
personal delivery, Federal Express or other delivery service. If notice is given
by certified mail, return receipt requested, notice shall be deemed given three
(3) days after the notice is deposited with the U.S. Mail, postage prepaid,
addressed to Tenant or to Landlord at the address set forth in Section 1.17. If
notice is given by personal delivery, Federal Express or other delivery service,
notice shall be deemed given on the date the notice is actually received by
Landlord or Tenant. Either party may by notice to the other specify a different
address for notice purposes. Notwithstanding the address set forth in Section
1.17 for Tenant, upon Tenant's taking possession of the Premises, the Premises
shall constitute Tenant's address for notice purposes. A copy of all notices
required or permitted to be given to Landlord hereunder shall be concurrently
transmitted to such party or parties at such addresses as Landlord may from time
to time designate by notice to Tenant. Landlord agrees to also transmit a copy
of any notices of default given to Tenant to Tenant's attorney at the address
set forth in Section 1.17 hereinabove or such other address that Tenant may from
time to time designate by written notice to Landlord. 

41. Waivers. No waiver by Landlord of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.

No acceptance by Landlord of partial
payment of any sum due from Tenant shall be deemed a waiver by Landlord of its
right to receive the full amount due, nor shall any endorsement or statement on
any check or accompanying letter from Tenant be deemed an accord and
satisfaction. Tenant hereby waives for Tenant and all those claiming under
Tenant all rights now or hereafter existing to redeem by order or judgment of
any court or by legal process or writ, Tenant's right of occupancy of the
Premises after any termination of this Lease. 

42. Covenants. This Lease shall be construed as though the covenants
contained herein are independent and not dependent and Tenant hereby waives the
benefit of any statute to the contrary. 

43. Binding Effect; Choice of Law.
Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state in which the Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Project is located. 

44. Attorneys' Fees.
If Landlord or Tenant brings an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, or appeal thereon, shall be entitled to its reasonable
attorneys' fees and court costs to be paid by the losing party as fixed by the
court in the same or separate suit, and whether or not such action is pursued to
decision or judgment. The attorneys' fee award shall not be computed in
accordance with any court fee schedule, but shall be such as to fully reimburse
all attorneys' fees and court costs reasonably incurred in good faith. Landlord
shall be entitled to reasonable attorneys' fees and all other costs and expenses
incurred in the preparation and service of notices of default and consultations
in connection therewith, whether or not a legal action is subsequently commenced
in connection with such default. 

45. Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
Section 45 shall constitute a material default hereunder. 

46. Signs. Tenant shall not place any sign upon the Premises (including
on the inside or the outside of the doors or windows of the Premises) or the
Project without Landlord's prior written consent, which may be given or withheld
in Landlord's sole discretion. Landlord shall have the right to place any sign
it deems appropriate on any portion of the Project except the interior of the
Premises. 

See Addendum Paragraph 4 

47. Merger. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies. 

48. Quiet Possession.
Provided Tenant is not in default hereunder,
Tenant shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.

49. Authority. If Tenant is a corporation, trust, or general or limited
partnership, Tenant, and each individual executing this Lease on behalf of such
entity, represents and warrants that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity, that said entity is
duly authorized to enter into this Lease, and that this Lease is enforceable
against said entity in accordance with its terms. If Tenant is a corporation,
trust or partnership, Tenant shall deliver to Landlord upon demand evidence of
such authority satisfactory to Landlord. Landlord hereby warrants and represents
that (i) it is the owner of the Project, (ii) it has taken all action necessary
to authorize the execution and performance of this Lease, and (iii) the
person(s) executing this Lease on behalf of the Landlord are all of the persons
required to execute this Lease in order to bind the Landlord. 

50. Conflict. Except as otherwise provided herein to the contrary, any
conflict between the printed provisions, Exhibits, Addenda or Riders of this
Lease and the typewritten or handwritten provisions, if any, shall be controlled
by the typewritten or handwritten provisions. 

51. Multiple Parties.
If more than one person or entity is named as
Tenant herein, the obligations of Tenant shall be the joint and several
responsibility of all persons or entities named herein as Tenant. Service of a
notice in accordance with Section 40 on one Tenant shall be deemed service of
notice on all Tenants. 

52. Interpretation. This Lease shall be interpreted as if it was prepared by both
parties and ambiguities shall not be resolved in favor of Tenant because all or
a portion of this Lease was prepared by Landlord. The captions contained in this
Lease are for convenience only and shall not be deemed to limit or alter the
meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender. 

53. Prohibition Against Recording.
Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord. 

54. Relationship of Parties.
Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint -venture or any
association between Landlord and Tenant. 

55. Rules and Regulations.
Tenant agrees to abide by and conform to the
Rules and to cause its employees, suppliers, customers and invitees to so abide
and conform. Landlord shall have the right, from time to time, to modify, amend
and enforce the Rules provided Tenant shall not be bound by any changes in the Rules
until after it has received written notice of such changes. Landlord shall not
be responsible to Tenant for the failure of other persons including, but not
limited to, other tenants, their agents, employees and invitees to comply with
the Rules. Landlord shall use commercially reasonable efforts to enforce such Rules
in a non-discriminatory manner. 

56. Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project. 

57. Security Interest.
In consideration of the covenants and
agreements contained herein, and as a material consideration to Landlord for
entering into this Lease, Tenant hereby unconditionally grants to Landlord a
continuing security interest in and to all money and property of any kind or
description, including, without limitation, any personal property left by Tenant
at the Premises, the security deposit, if any, and any advance rent payment or
other deposit, now in or hereafter delivered to or coming into the possession,
custody or control of Landlord, by or for the account of Tenant, in any manner
and for any purpose, together with any increase in profits or proceeds from such
property. The security interest granted to Landlord hereunder secures payment
and performance of all obligations of Tenant under this Lease now or hereafter
arising or existing, whether direct or indirect, absolute or contingent, or due
or to become due. In the event of a default under this Lease which is not cured
within the applicable grace period, if any, Landlord is and shall be entitled to
all the rights, powers and remedies granted a secured party under the State of
New Jersey Commercial Code and otherwise available at law or in equity,
including, but not limited to, the right to retain as damages the personal
property, security deposit and other funds held by Landlord, without additional
notice or demand regarding this security interest. Tenant agrees that it will
execute such other documents or instruments as may be reasonably necessary to
carry out and effectuate the purpose and terms of this Section, or as otherwise
reasonably requested by Landlord, including without limitation, execution of a
UCC-1 financing statement. Landlord's rights under this Section are in addition
to Landlord's rights under Sections 5 and 13. Notwithstanding anything to the
contrary contained in Section 57 of this Lease, the security interest granted by
Tenant to Landlord shall be automatically subordinated to the security interest,
if any, granted to Tenant's lenders in the ordinary course of Tenant's business.
At Tenant's request, Landlord shall execute a lien waiver, the form of which
shall be reasonably satisfactory to Landlord, waiving Landlord's security
interest in the collateral described in any such lien waiver (which collateral
shall exclude tenant improvements and any fixtures installed in the Premises).

58. Security for Performance of
Tenant's Obligations. Notwithstanding any
security deposit held by Landlord pursuant to Section 5 and any security
interest held by Landlord pursuant to Section 57, Tenant hereby agrees that in
the event of a default by Tenant, Landlord shall be entitled to seek and obtain
a writ of attachment and/or a temporary protective order and Tenant hereby
waives any rights or defenses to contest such a writ of attachment and/or
temporary protective order on the basis of the State of New Jersey Code of Civil
Procedure or any other related statute or rule. 

59. Financial Statements.
From time to time, at Landlord's request,
Tenant shall cause the following financial information to be delivered to
Landlord, at Tenant's sole cost and expense, upon not less than ten (10) days'
advance written notice from Landlord: (a) a current financial statement for
Tenant and Tenant's financial statements for the previous two accounting years,
(b) a current financial statement for any guarantor(s) of this Lease and the
guarantor's financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.

60. Rule Against Perpetuities.
Notwithstanding anything to the contrary
contained in this Lease, if the Term of the Lease has not commenced within
twenty-one (21) years after the date of this Lease, this Lease shall
automatically terminate on the twenty-first (21st) anniversary of such date. The
sole purpose of this provision is to avoid any interpretation of this Lease as a
violation of the Rule Against Perpetuities, or any other rule of law or equity
concerning restraints on alienation.

61. Attachments. The items listed in Section 1.16 are a part of this Lease and
are incorporated herein by this reference. 

62. OFAC
Certification.

     62.1. Tenant
certifies that: (i) it is not acting, directly or indirectly, for or on behalf
of any person, group, entity, or nation named by any Executive Order or the
United States Treasury Department as a terrorist, “Specially Designated National
and Blocked Person,” or other banned or blocked person, entity, nation, or
transaction pursuant to any law, order, rule, or regulation that is enforced or
administered by the Office of Foreign Assets Control; and (ii) it is not engaged
in this transaction, directly or indirectly on behalf of, or instigating or
facilitating this transaction, directly or indirectly on behalf of, any such
person, group, entity, or nation.  

    
62.2. Tenant hereby agrees to defend, indemnify, and hold harmless
Landlord from and against any and all claims, damages, losses, risks,
liabilities, and expenses (including attorney’s fees and costs) arising from or
related to any breach of the foregoing certification. 

63. WAIVER OF JURY TRIAL.
LANDLORD AND TENANT HEREBY WAIVE THEIR
RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT. 

[SIGNATURES APPEAR ON NEXT PAGE]

LANDLORD AND TENANT ACKNOWLEDGE THAT
THEY HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND
VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE
IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE
THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.
TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO HAVE THIS LEASE
REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS EXECUTION. PREPARATION OF THIS LEASE
BY LANDLORD OR LANDLORD'S AGENT AND SUBMISSION OF SAME TO TENANT SHALL NOT BE
DEEMED AN OFFER BY LANDLORD TO LEASE THE PREMISES TO TENANT OR THE GRANT OF AN
OPTION TO TENANT TO LEASE THE PREMISES. THIS LEASE SHALL BECOME BINDING UPON
LANDLORD AND TENANT ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN LANDLORD
HAS DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT. 

	LANDLORD:  	TENANT:  
	  
	THE REALTY
      ASSOCIATES FUND VI, L.P., 
    	EMISPHERE
      TECHNOLOGIES, INC.,  
	a Delaware
      limited partnership  	a Delaware
      corporation  

	By: 
    	Realty
      Associates Fund VI LLC,  	  
	  	a
      Massachusetts limited liability company,  	By:
      /s/Michael V. Novinski, by Paul
      Lubetkin  
	  	general partner  	             Its: President and
      Chief Executive Officer  
	  
	  	By: 
    	Realty
      Associates Advisors LLC, a Delaware  	  
	  	  	limited liability company, manager  	  
	  
	  	  	By: 
    	Realty
      Associates Advisors Trust, a  	  
	  	  	  	Massachusetts
      business trust, sole member  	  
	  
	  
	  	  	  	By:
      /s/Heather Hohenthal 
	  
	  	  	  	                         
      Officer  	  

ADDENDUM 

     THIS
ADDENDUM (the "Addendum") is attached to the Lease dated as of October 25, 2007,
by and between THE REALTY ASSOCIATES FUND VI,
L.P., a Delaware limited partnership
("Landlord") and EMISPHERE TECHNOLOGIES,
INC., a Delaware corporation ("Tenant") and
incorporated herein by reference thereto. To the extent that there are any
conflicts between the provisions of the Lease and the provisions of this
Addendum, the provisions of this Addendum shall supersede the conflicting
provisions of the Lease. 

1. Security Deposit. Section 6 of the
Lease is hereby amended by adding the following at the end of Section 6:

     a. The
Security Deposit shall be in the form of an irrevocable, unconditional letter of
credit (the "Security Deposit L/C") in the amount set forth in Section 1.10, as
security for Tenant’s full and faithful performance of Tenant’s obligations
hereunder. The Security Deposit L/C shall be delivered to Landlord at Tenant's
sole cost and expense. The Security Deposit L/C shall be issued by and drawn on
a bank reasonably acceptable to Landlord, and shall name Landlord as
Beneficiary. The Security Deposit L/C shall be substantially in the form
attached hereto as Exhibit D. If the maturity date of the Security Deposit L/C
is prior to the end of the Term of the Lease, Tenant shall renew the Security
Deposit L/C as often as is necessary with the same bank or financial institution
(or a similar bank or financial institution reasonably acceptable to Landlord)
and upon the same terms and conditions, not less than thirty (30) days prior to
the purported expiration date of the Security Deposit L/C. In the event that
Tenant fails to timely renew the Security Deposit L/C as aforesaid, Landlord
shall be entitled to draw against the entire amount of the Security Deposit L/C.
The Security Deposit L/C shall be assignable by Landlord and upon such
assignment to any party assuming in writing the lessor interest in this Lease,
Landlord shall be relieved from all liability to Tenant therefor.

     b. Upon
the occurrence of any default by Tenant in the payment of Base Rent or upon the
occurrence of the events described in Section 13.1 of the Lease or in the event
that Landlord terminates this Lease in accordance with the terms hereof
following a default by Tenant, Landlord shall have the right to draw the entire
amount of the Security Deposit L/C. Landlord agrees to copy Tenant on any notice
to the issuing bank requesting a draw against the Security Deposit L/C. In the
event that Tenant defaults in making any money payment required to be made by
Tenant under the terms of this Lease other than the payment of Base Rent, then
Landlord shall be entitled to draw upon so much of the Security Deposit L/C as
equals the defaulted payment(s), plus any interest or other charges due thereon
in accordance with this Lease, plus any additional sums to which Landlord is
reasonably entitled under the terms and conditions of this Lease in connection
with a default by Tenant pursuant to Section 13.1. If Landlord elects to make a
partial draw upon the Security Deposit L/C, Tenant shall promptly restore the
Security Deposit L/C to its original amount within ten (10) days after written
demand therefor. Landlord's election to make a partial draw upon the Security
Deposit L/C shall in no event prejudice or waive Landlord's right to terminate
this Lease if permitted under applicable provisions of this Lease, nor shall
such election prejudice or waive any other remedy of Landlord reserved under the
terms of this Lease, including the right to draw the entire amount of the
Security Deposit L/C, if applicable. The Security Deposit L/C shall be available
for payment against the presentation of a sight draft by the Landlord together
with a certificate from Landlord that Tenant is in default of its obligations
hereunder beyond expiration of any applicable notice and cure periods and that
Landlord is entitled, by the terms of this Lease, to draw upon the Security
Deposit L/C. The proceeds of the Security Deposit L/C, if drawn by Landlord
pursuant to the terms hereof, shall be held by Landlord in accordance with the
provisions of Section 6 of the Lease and applied to reduce any amount owed by
Tenant to Landlord. No interest shall be payable for any Security Deposit L/C
proceeds held on account. 

     c. In the
event that (1) Landlord draws the full amount of the Security Deposit L/C as a
result of a default by Tenant, (2) this Lease is not terminated by Landlord as a
result of such default, (3) such default is fully cured by Tenant, and (4) there
is no outstanding uncured default by Tenant, then the balance of the sums drawn
(after the payment of any sums related to the curing of any defaults) shall be
applied first to obtain a replacement letter of credit as security for Tenant's
performance hereunder, and the remaining balance, if any, will be refunded to
Tenant. Upon the termination of this Lease and the payment in full to Landlord
of all damages, costs and expenses to which Landlord is entitled, the balance of
any funds drawn from the Security Deposit L/C after satisfying such obligations
in full shall be refunded to Tenant. 

     d. To the
extent that the Security Deposit L/C is either lost or the issuing bank will not
honor the Security Deposit L/C, Tenant guarantees the proceeds of the Security
Deposit L/C and will immediately remit to Landlord the amount of the Security
Deposit in cash to be held in accordance with this Section 6 of the Lease.

2. Tenant Improvements.

     a. Tenant
hereby agrees to accept the Premises in its “as-is” condition existing on the
date hereof subject to Landord’s completion of the Improvements (defined
hereinafter). 

     b.
Landlord shall construct improvements (“Improvements”) for the Premises in
accordance with the Work Letter Agreement attached hereto as Schedule 1 and the
scope of work set forth on Schedule 1-A attached hereto. In connection thereto,
Landlord hereby grants to Tenant an “Improvement Allowance” of up to Four and
00/100 Dollars ($4.00) per rentable square foot of space in the Premises (i.e.,
15,281 rentable square feet multiplied by $4.00 = $61,124.00) (the “Improvement
Allowance”), which Improvement Allowance shall be used only for the items
specified in the Cost Breakdown, as that term is defined in the Work Letter
Agreement. 

     c.
Landlord shall use commercially reasonable efforts to complete the Improvements
on or before the Commencement Date. In the event that Landlord has not completed
the Improvements prior to the Commencement Date, then Landlord shall complete
the Improvements within a reasonable period of time following the Commencement
Date, subject to long-lead items, Force Majeure Events and delays caused by
Tenant. Tenant hereby acknowledges that the Improvements may be constructed in
accordance with this Paragraph and the Work Letter Agreement while Tenant is in
occupancy of the Premises, and Landlord's actions in connection with such
Improvements shall in no way constitute a constructive eviction of Tenant or
entitle Tenant to any abatement of rent. Landlord shall have no responsibility
or for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's business arising from the construction of the
Improvements, nor shall Tenant be entitled to any compensation or damages from
Landlord for any inconvenience or annoyance occasioned by such construction or
Landlord's actions in connection with such construction. Notwithstanding the
foregoing, Landlord shall use commercially reasonable efforts to minimize
unreasonable interference with Tenant’s use and occupancy of the Premises during
any such construction. 

3. Options to Renew.

    
a. Subject to the provisions of Section 26 of the Lease, and provided
that Tenant has not been in default beyond any applicable cure period more than
twice during the twelve (12) month period immediately preceding (i) the date on
which Tenant exercises the applicable Option, or (ii) the commencement of the
applicable Option term, Tenant shall have two (2) five (5) year Options to renew
this Lease. Tenant shall provide to Landlord on a date which is prior to the
date that the applicable Option period would commence (if exercised) by at least
two hundred seventy (270) days and not more than three hundred sixty-five (365)
days, a written notice of the exercise of the applicable Option to extend the
Lease for the applicable additional Option term, time being of the essence. Such
notice shall be given in accordance with Section 40 of the Lease. If
notification of the exercise of the Option is not so given and received, all
Options granted hereunder shall automatically expire. Base Rent applicable to
the Premises for such Option Term (the “Option Rent”) shall be equal to the
greater of (i) the then current escalated Base Rent in effect for the Premises
as of the expiration of the Term of the Lease (as extended) (and such Base Rent
shall escalate annually at the same rate as Base Rent during the initial term),
and (ii) the Fair Market Rental (as hereinafter defined). All other terms and
conditions of the Lease shall remain the same, except that after the exercise of
the first renewal Option, Tenant shall have only one (1) Option to renew this
Lease, and after the exercise of the second Option, Tenant shall have no further
Options to renew the Lease. In addition, Tenant shall not be entitled to the
Base Rent Abatement referenced in Section 1.8 of the Lease or the Improvements
or the Improvement Allowance referenced in Paragraph 2 above. 

    
b. If the Tenant exercises either Option, the Landlord shall determine
the Option Rent by using its good faith judgment. Landlord shall provide Tenant
with written notice of such amount within fifteen (15) days after Tenant
exercises its Option. Tenant shall have fifteen (15) days ("Tenant's Review
Period") after receipt of Landlord's notice of the new base rent within which to
accept such rental. In the event Tenant fails to accept in writing such rental
proposal by Landlord, then such proposal shall be deemed rejected and Landlord
and Tenant shall attempt to agree upon such Option Rent, using their best good
faith efforts. If Landlord and Tenant fail to reach agreement within fifteen
(15) days following Tenant's Review Period ("Outside Agreement Date") then the
parties shall each within ten (10) days following the Outside Agreement Date
appoint a real estate broker who shall be licensed in the State of New Jersey
and who specializes in the field of commercial office space leasing in the
Morris County, New Jersey market, has at least ten (10) years of experience and
is recognized within the field as being reputable and ethical. If one party does
not timely appoint a broker, then the broker appointed by the other party shall
promptly appoint a broker for such party. Such two individuals shall each
determine within ten (10) days after their appointment such base rent. If such
individuals do not agree on Fair Market Rental, then the two individuals shall,
within five (5) days, render separate written reports of their determinations
and together appoint a third similarly qualified individual having the
qualifications described above. If the two brokers are unable to agree upon a
third broker, the third broker shall be appointed by the President of the Morris
County Board of Realtors. In the event the Morris County Board of Realtors is no
longer in existence, the third broker shall be appointed by the President of its
successor organization. If no successor organization is in existence, the third
broker shall be appointed by the Assignment Judge of the Superior Court of
Morris County, New Jersey. The third individual shall within ten (10) days after
his or her appointment make a determination of such Fair Market Rental. The
third individual shall determine which of the determinations of the first two
individuals is closest to his own and the determination that is closest shall be
final and binding upon the parties, and such determination may be enforced in
any court of competent jurisdiction. Landlord and Tenant shall each bear the
cost of its broker and shall share equally the cost of the third broker. Upon
determination of the base rent payable pursuant to this Section, the parties
shall promptly execute an amendment to this Lease stating the rent so
determined. 

    
c. The term "Fair Market Rental" shall mean the annual amount per
rentable square foot that a willing, comparable renewal tenant would pay and a
willing, comparable landlord of a similar office building would accept at arm's
length for similar space, giving appropriate consideration to the following
matters: (i) annual rental rates per rentable square foot; (ii) the type of
escalation clauses (including, without limitation, operating expenses, real
estate taxes, and CPI) and the extent of liability under the escalation clauses
(i.e., whether determined on a "net lease" basis or by increases over a
particular base year or base dollar amount); (iii) rent abatement provisions
reflecting free rent and/or no rent during the lease term; (iv) length of lease
term; (v) size and location of premises being leased; and (vi) other generally
applicable terms and conditions of tenancy for similar space; provided, however,
Tenant shall not be entitled to any tenant improvement or refurbishment
allowance; provided, however, Landlord and the brokers shall consider the
absence of such tenant improvement or refurbishment allowance or other
concessions paid for similar space in determining the Fair Market Rent. The Fair
Market Rental may also designate periodic rental increases, a new Base Year and
similar economic adjustments. The Fair Market Rental shall be the Fair Market
Rental in effect as of the beginning of the applicable Option period, even
though the determination may be made in advance of that date, and the parties
may use recent trends in rental rates in determining the proper Fair Market
Rental as of the beginning of the applicable Option period. 

4. Signs. Notwithstanding anything to
the contrary contained in Section 46 of the Lease, Landlord, at Landlord’s
expense, shall list Tenant’s name in the Building directory. Tenant shall be
permitted to install building standard signage on (or adjacent to) the entrance
door to the Premises at Tenant’s sole expense. Such suite entry signage shall be
subject to Landlord’s approval. Any changes by Tenant in the Building standard
suite entry signage to the Premises or the directory signage following its
initial installation shall be subject to Landlord’s approval and shall be at
Tenant's sole cost and expense. 

EXHIBIT A 

FLOOR PLAN 

EXHIBIT A-1 

LOCATION OF RESERVED PARKING 

EXHIBIT B

VERIFICATION LETTER 

     EMISPHERE TECHNOLOGIES, INC., a
Delaware corporation ("Tenant") hereby certifies that it has entered into a
lease with THE REALTY ASSOCIATES FUND VI,
L.P., a Delaware limited partnership
("Landlord") and verifies the following information as of the _____ day of
___________________ 20__: 

	     	Number of
      Rentable Square Feet in Premises:  	     	 
    	
		 		 	
		Commencement
      Date:  	 	 	
		 		 	
		Lease
      Termination Date:  		 	
		 		 	
		Tenant's
      Share:  		 	
		 		 	
		Initial Base
      Rent:  		 	
		   		 	
		Billing Address
      for Tenant:  		 
    	
		 		 
    	
		 		 
    	
		Attention:  		 	
		 		  	
		Telephone
      Number:  		 
    	
		 		  	
		Federal Tax I.D.
      No.:  		 
    	

     Tenant
acknowledges and agrees that all tenant improvements Landlord is obligated to
make to the Premises, if any, have been completed and that Tenant has accepted
possession of the Premises and that as of the date hereof, there exist no
offsets or defenses to the obligations of Tenant under the Lease. Tenant
acknowledges that it has inspected the Premises and found them suitable for
Tenant's intended commercial purposes. 

	TENANT  	
	 	
	EMISPHERE
      TECHNOLOGIES, INC.,  	 
	a Delaware
      corporation  	
	  	
	By:  	
	 	
	 	
	Its:  	
	 	

ACKNOWLEDGED AND AGREED TO: 

LANDLORD 

THE REALTY ASSOCIATES FUND VI,
L.P., 
a Delaware limited partnership

	By:	     	Realty Associates Fund
      VI LLC,
	  		a Massachusetts limited
      liability company,
	  		general
    partner

	  		By:	     	Realty
      Associates Advisors LLC, a Delaware
					limited liability
      company, manager
	  
	  		  		By:	     	Realty
      Associates Advisors Trust, a
	  		  		  		Massachusetts
      business trust, sole member
	  
	  		  		  		By: 	  	 
	  		  		  			 Officer
    	 
	  
	By:	     	Realty
      Associates Fund VI Texas Corporation,
	  		a Texas
      corporation, general partner
	  
	  		By:	    	 	 	 
	  	 	  	 Officer 	 	 

EXHIBIT C 

RULES AND REGULATIONS 

GENERAL RULES 

     Tenant shall
faithfully observe and comply with the following Rules and
Regulations.

1. Tenant shall not alter any locks or
install any new or additional locks or bolts on any doors or windows of the
Premises without obtaining Landlord's prior written consent. Tenant shall bear
the cost of any lock changes or repairs required by Tenant. Keys required by
Tenant must be obtained from Landlord at a reasonable cost to be established by
Landlord. 

2. All doors opening to public
corridors shall be kept closed at all times except for normal ingress and egress
to the Premises. Tenant shall assume any and all
responsibility for protecting the Premises from theft, robbery and pilferage,
which includes keeping doors locked and other means of entry to the Premises
closed. 

3. Landlord reserves the right to close
and keep locked all entrance and exit doors of the Project except during the
Project's normal hours of business as defined in
Section 11.3 of the Lease. Tenant, its employees and agents must be sure that
the doors to the Project are securely closed and locked when leaving the
Premises if it is after the normal hours of business of the Project. Tenant, its
employees, agents or any other persons entering or leaving the Project at any
time when it is so locked, or any time when it is considered to be after normal
business hours for the Project, may be required to sign the Project register.
Access to the Project may be refused unless the person seeking access has proper
identification or has a previously received authorization for access to the
Project. Landlord and its agents shall in no case be liable for damages for any
error with regard to the admission to or exclusion from the Project of any
person. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property. 

4. No furniture, freight or equipment
of any kind shall be brought into the Project without Landlord's prior
authorization. All moving activity into or out of
the Project shall be scheduled with Landlord and done only at such time and in
such manner as Landlord designates. Landlord shall have the right to prescribe
the weight, size and position of all safes and other heavy property brought into
the Project and also the times and manner of moving the same in and out of the
Project. Safes and other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight, and Tenant shall be solely responsible for the cost of
installing all supports. Landlord will not be responsible for loss of or damage
to any such safe or property in any case. Any damage to any part of the Project,
its contents, occupants or visitors by moving or maintaining any such safe or
other property shall be the sole responsibility and expense of Tenant.

5. The requirements of Tenant will be
attended to only upon application at the management office for the Project or at
such office location designated by Landlord. Tenant shall not ask employees of
Landlord to do anything outside their regular duties without special
authorization from Landlord. 

6. Tenant shall not disturb, solicit,
or canvass any occupant of the Project and shall cooperate with Landlord and its
agents to prevent the same. Tenant, its employees and agents shall not loiter in
or on the entrances, corridors, sidewalks, lobbies, halls, stairways, elevators,
or any Common Areas for the purpose of smoking tobacco products or for any other
purpose, nor in any way obstruct such areas, and shall use them only as a means
of ingress and egress for the Premises. Smoking shall not be permitted in the
Common Areas. 

7. The toilet rooms, urinals and wash
bowls shall not be used for any purpose other than that for which they were
constructed, and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
agents, shall have caused it. 

8. Except for vending machines intended
for the sole use of Tenant's employees and invitees, no vending machine or
machines other than fractional horsepower office machines shall be installed,
maintained or operated upon the Premises without the written consent of
Landlord. 

9. Tenant shall not use or keep in or
on the Premises or the Project any kerosene, gasoline or other inflammable or
combustible fluid or material. Tenant shall not bring into or keep within the
Premises or the Project any animals, birds, bicycles or other vehicles.

10. Tenant shall not use, keep or
permit to be used or kept, any foul or noxious gas or substance in or on the
Premises, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Project by
reason of noise, odors, or vibrations, or to otherwise interfere in any way with
the use of the Project by other tenants. 

11. No cooking shall be done or
permitted on the Premises, nor shall the Premises be used for the storage of
merchandise, for loading or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters' Laboratory approved equipment and
microwave ovens may be used in the Premises for heating food and brewing coffee,
tea, hot chocolate and similar beverages for employees and visitors of Tenant,
provided that such use is in accordance with all applicable federal, state and
city laws, codes, ordinances, rules and regulations; and provided further that
such cooking does not result in odors escaping from the Premises. 

12. Landlord shall have the right to
approve where and how telephone wires are to be introduced to the Premises. No
boring or cutting for wires shall be allowed without the consent of Landlord.
The location of telephone call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord. Tenant shall not mark,
drive nails or screws, or drill into the partitions, woodwork or plaster
contained in the Premises or in any way deface the Premises or any part thereof
without Landlord's prior written consent. Tenant shall not install any radio or
television antenna, satellite dish, loudspeaker or other device on the roof or
exterior walls of the Project. Tenant shall not interfere with broadcasting or
reception from or in the Project or elsewhere. 

13. Landlord reserves the right to
exclude or expel from the Project any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of these Rules and Regulations.

14. Tenant shall not waste electricity,
water or air conditioning and agrees to cooperate fully with Landlord to ensure
the most effective operation of the Project's heating and air conditioning
system, and shall refrain from attempting to adjust any controls. Tenant shall
not without the prior written consent of Landlord use any method of heating or
air conditioning other than that supplied by Landlord. 

15. Tenant shall store all its trash
and garbage within the interior of the Premises. No material shall be placed in
the trash boxes or receptacles if such material is of such nature that it may
not be disposed of in the ordinary and customary manner of removing and
disposing of trash in the vicinity of the Project without violation of any law
or ordinance governing such disposal. All trash, garbage and refuse disposal
shall be made only through entry-ways and elevators provided for such purposes
at such times as Landlord shall designate. 

16. Tenant shall comply with all
safety, fire protection and evacuation procedures and regulations established by
Landlord or any governmental agency. 

17. No awnings or other projection
shall be attached to the outside walls or windows of the Project by Tenant. No
curtains, blinds, shades or screens shall be attached to or hung in any window
or door of the Premises without the prior written consent of Landlord. All
electrical ceiling fixtures hung in the Premises must be fluorescent and/or of a
quality, type, design and bulb color approved by Landlord. Tenant shall abide by
Landlord's regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises. The skylights, windows, and
doors that reflect or admit light and air into the halls, passageways or other
public places in the Project shall not be covered or obstructed by Tenant, nor
shall any bottles, parcels or other articles be placed on the windowsills.

18. Tenant shall not employ any person
or persons other than the janitor of Landlord for the purpose of cleaning the
Premises unless otherwise agreed to in writing by Landlord. Except with the
prior written consent of Landlord, no person or persons other than those
approved by Landlord shall be permitted to enter the Project for the purpose of
cleaning same. Landlord shall in no way be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant or any of its employees or other persons by the janitor of
Landlord. Janitor service shall include ordinary dusting and cleaning by the
janitor assigned to such work and shall not include cleaning of carpets or rugs,
except normal vacuuming, or moving of furniture and other special services.
Window cleaning shall be done only by Landlord at reasonable intervals and as
Landlord deems necessary. 

PARKING RULES 

1. Parking areas shall be used only for
parking by vehicles no longer than full size, passenger automobiles herein
called "Permitted Size Vehicles". 

2. Tenant shall not permit or allow any
vehicles that belong to or are controlled by Tenant or Tenant's employees,
suppliers, shippers, customers, or invitees to be loaded, unloaded, or parked in
areas other than those designated by Landlord for such activities. Users of the
parking area will obey all posted signs and park only in the areas designated
for vehicle parking. 

3. Parking stickers or identification
devices shall be the property of Landlord and shall be returned to Landlord by
the holder thereof upon termination of the holder's parking privileges. Tenant
will pay such replacement charges as is reasonably established by Landlord for
the loss of such devices. Loss or theft of parking identification stickers or
devices from automobiles must be reported to the parking operator immediately.
Any parking identification stickers or devices reported lost or stolen found on
any unauthorized car will be confiscated and the illegal holder will be subject
to prosecution.

4. Landlord reserves the right to
relocate all or a part of parking spaces from floor to floor, within one
floor, and/or to reasonably adjacent off site locations(s), and to allocate
them between compact and standard size and tandem spaces, as long as the same
complies with applicable laws, ordinances and regulations. 

5. Unless otherwise instructed, every
person using the parking area is required to park and lock his own vehicle.
Landlord will not be responsible for any damage to vehicles, injury to persons
or loss of property, all of which risks are assumed by the party using the
parking area. 

6. Validation of visitor parking, if
established, will be permissible only by such method or methods as Landlord may
establish at rates determined by Landlord, in Landlord's sole discretion.

7. The maintenance, washing, waxing or
cleaning of vehicles in the parking structure or Common Areas is prohibited.

8. Tenant shall be responsible for
seeing that all of its employees, agents and invitees comply with the applicable
parking rules, regulations, laws and agreements. Garage managers or attendants
are not authorized to make or allow any exceptions to these Parking Rules and
Regulations. Landlord reserves the right to terminate parking rights for any
person or entity that willfully refuses to comply with these rules and
regulations.

9. Every driver is required to park his
own car. Where there are tandem spaces, the first car shall pull all the way to
the front of the space leaving room for a second car to park behind the first
car. The driver parking behind the first car must leave his key with the parking
attendant. Failure to do so shall subject the driver of the second car to a
Fifty Dollar ($50.00) fine. Refusal of the driver to leave his key when parking
in a tandem space shall be cause for termination of the right to park in the
parking facilities. The parking operator, or his employees or agents, shall be
authorized to move cars that are parked in tandem should it be necessary for the
operation of the garage. Tenant agrees that all responsibility for damage to
cars or the theft of or from cars is assumed by the driver, and further agrees
that Tenant will hold Landlord harmless for any such damages or theft.

10. No vehicles shall be parked in the
parking garage overnight. The parking garage shall only be used for daily
parking and no vehicle or other property shall be stored in a parking space.

     Landlord
reserves the right at any time to change or rescind any one or more of these
Rules and Regulations, or to make such other and further reasonable Rules and
Regulations as in Landlord's judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Project, and for the
preservation of good order therein, as well as for the convenience of other
occupants and tenants therein. Landlord may waive any one or more of these Rules
and Regulations for the benefit of any particular tenant, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other tenant, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Project. Tenant shall be
deemed to have read these Rules and Regulations and to have agreed to abide by
them as a condition of its occupancy of the Premises. 

EXHIBIT D

IRREVOCABLE STANDBY LETTER OF CREDIT

NUMBER ________

	 
      LETTER OF CREDIT  	 
      ISSUE DATE  	 
      EXPIRY DATE  
	  AMOUNT  	   	   
	   	  	  
	  US [AMOUNT]  	  [DATE]  	 
      [DATE]  
	 	 	 
	 	 	 

	BENEFICIARY:  	APPLICANT: 
    
	[LANDLORD] 
    	           [TENANT]  
	C/O TA ASSOCIATES
      REALTY  	[ADDRESS OF
      PROPERTY]  
	28 STATE
      STREET  	  
	BOSTON, MASSACHUSETTS
      02109  	  
	ATTENTION: LEASE
      ADMINISTRATOR  	  
	  
	WITH COPY
      TO:  	  
	[PROPERTY
      MANAGER]  	  
	[ADDRESS] 
    	  

GENTLEMEN: 

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY
LETTER OF CREDIT IN YOUR FAVOR FOR THE ACCOUNT OF THE ABOVE REFERENCED APPLICANT
IN THE AGGREGATE AMOUNT OF US [AMOUNT] WHICH IS AVAILABLE BY PAYMENT OF YOUR
DRAFT(S), AT SIGHT, DRAWN ON OURSELVES, , WHEN ACCOMPANIED BY THE FOLLOWING
DOCUMENTS: 

	1.	     	
      A STATEMENT PURPORTEDLY SIGNED BY
      AN AUTHORIZED REPRESENTATIVE OF [LANDLORD] (HEREIN CALLED “THE LANDLORD”)
      STATING THAT:

	 
	 		
           “THIS CERTIFIES THAT A DEFAULT
      EXISTS PURSUANT TO THAT CERTAIN DEED OF LEASE BETWEEN [LANDLORD], LANDLORD
      AND [TENANT], TENANT, AS AMENDED FROM TIME TO TIME.”

	  
	 -OR- 
	  
	 		
           “[TENANT] (THE “TENANT”) HAS FAILED TO RENEW OR REPLACE THIS LETTER
      OF CREDIT THIRTY (30) DAYS BEFORE ITS CURRENT EXPIRATION DATE AND LANDLORD
      IS ACCORDINGLY ENTITLED TO DRAW UPON THIS LETTER OF
  CREDIT.”

	 
	2.		THE ORIGINAL OF THIS LETTER OF
      CREDIT.

IT IS A CONDITION OF THIS LETTER OF
CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT WRITTEN AMENDMENT
FOR ONE YEAR FROM THE PRESENT OR ANY FUTURE EXPIRY DATE UNLESS AT LEAST
FORTY-FIVE (45) DAYS PRIOR TO SUCH EXPIRATION DATE, WE NOTIFY YOU IN WRITING AT
THE ABOVE ADDRESS BY EXPRESS COURIER THAT WE ELECT NOT TO RENEW THIS LETTER OF
CREDIT FOR ANY SUCH ADDITIONAL PERIODS(S). UPON RECEIPT BY YOU OF SUCH NOTICE,
YOU MAY DRAW HEREUNDER BY PRESENTATION OF YOUR DRAFT AT SIGHT ON US. 

PARTIAL DRAWINGS ARE PERMITTED.

THIS LETTER OF CREDIT IS TRANSFERABLE
BY BENEFICIARY. 

THIS IRREVOCABLE LETTER OF CREDIT SETS
FORTH IN FULL THE TERMS OF OUR UNDERTAKING. THIS UNDERTAKING SHALL NOT IN ANY
WAY BE MODIFIED, AMENDED, AMPLIFIED OR INCORPORATED BY REFERENCE TO ANY DOCUMENT
OR CONTRACT REFERRED TO HEREIN. 

WE HEREBY AGREE WITH YOU THAT DRAFT(S)
DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS CREDIT SHALL
BE DULY HONORED IF PRESENTED TOGETHER WITH DOCUMENT(S) AS SPECIFIED ABOVE AND
THE ORIGINAL OF THIS CREDIT, AT OUR OFFICE LOCATED AT [MUST BE ADDRESS LOCAL TO THE CEDAR KNOLLS, NEW JERSEY AREA]
ON OR BEFORE THE ABOVE STATED EXPIRY DATE.
DRAFT(S) DRAWN UNDER THIS CREDIT MUST SPECIFICALLY REFERENCE OUR CREDIT NUMBER.
DRAFTS DRAWN IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT SHALL BE
HONORED BY US WITHOUT INQUIRY AS OF THE TRUTH OF THE STATEMENTS SET FORTH IN THE
DRAW REQUEST AND REGARDLESS OF WHETHER APPLICANT DISPUTES THE CONTENT OR
ACCURACY OF SUCH STATEMENTS. FACSIMILE DRAWINGS ARE PERMITTED. IF A DRAFT IS
PRESENTED TO US BY FACSIMILE TO OUR FAX NUMBER _______________, THE ORIGINAL
LETTER OF CREDIT IS NOT REQUIRED. 

WE HEREBY ENGAGE WITH YOU THAT DRAWINGS
PRESENTED UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS LETTER OF CREDIT WILL
BE DULY HONORED WITHIN TWO (2) BUSINESS DAYS AFTER OUR RECEIPT OF YOUR
PRESENTATION OF THE CERTIFICATE AND ANY SUCH DOCUMENTS SPECIFIED HEREIN AT THE
ABOVE ADDRESS. 

EXCEPT AS OTHERWISE EXPRESSLY STATED
HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS, ESTABLISHED BY THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN
EFFECT ON THE DATE OF ISSUANCE OF THIS CREDIT. 

SINCERELY, 

______________________________
AUTHORIZED REPRESENATIVE

EXHIBIT E

JANITORIAL AND MAINTENANCE
SERVICES 

INTERIOR

A.    
Tenant Premises - Nightly Services - Monday
through Friday: 

         
1.     Empty and clean ash trays 

         
2.     Empty waste baskets 

         
3.     Clean cigarette urns 

         
4.     Remove trash to areas designated 

         
5.     Wipe drinking fountains 

         
6.     Vacuum carpets 

         
7.     Sweep, damp mop non-carpeted floors 

         
8.     Dust office furniture (i.e. desks, tables, file
cabinets, chairs) 

         
9.     Dust window sills 

B.     
Occasional Service: 

         
1.     Dust paneling, picture frames, diffusers, as needed

         
2.     High dust door tops, tops of partitions and high
ledges, as needed 

         
3.     Damp mop non carpeted floors (at least weekly)

C.     
Common Restrooms - Nightly Service - Monday
through Friday: 

         
1.     Sweep, mop and sanitize floors 

         
2.     Sanitize plumbing fixtures (i.e. commodes, toilet
seats, urinals, sinks) 

         
3.     Clean mirrors 

         
4.     Empty waste receptacles 

D.     
Common Restrooms - Occasional
Services:

         
1.     High dust walls, partitions, ceilings 

         
2.     Completely clean ceramic tile

         
3.     Replenish soap, toilet tissue, paper towels (as
needed) 

E.     
Common Areas: 

         
1.     Sweep and damp mop non-carpeted floors (i.e.
stairways, corridors, elevators), as needed 

         
2.     Vacuum carpeted areas, as needed 

         
3.     Wipe down wall surfaces and doors (i.e. elevators,
stairways, corridors with water or approved cleanser, as needed) 

         
4.     Dust electric fixtures and fittings, picture frames
and diffusers as needed 

         
5.     High dust door tops and high ledges, as needed

         
6.     Polish metallic surfaces, fixtures and trim, as
needed

         
7.     Interior glass surfaces (Tenant entrance doors and
hallway partition glass) shall be cleaned on both sides as needed, but not more
than two (2) times per year 

         
8.     Exterior glass windows to building shall be cleaned
on both sides as needed, but not more than two (2) times per year 

         
9.     Exterior glass entrance doors to building shall be
spot cleaned, as needed, and fully cleaned on both sides as needed, but not more
than two (2) times per year 

EXTERIOR OF BUILDING 

F.     
Outside Services, as required: 

         
1.     Sweep driveways - curbs 

         
2.     Sweep and clean sidewalks 

         
3.     Snow removal from driveways, sidewalks, steps and
parking areas 

MISCELLANEOUS 

The janitorial and maintenance services
described in this Exhibit shall be deemed all-inclusive and although Landlord,
at its sole discretion, reserves the right to provide, from time to time,
additional services, it shall not be required to provide any such additional
services in the Tenant’s Demised Premises. 

SCHEDULE 1 

WORK LETTER AGREEMENT 

1. Plans and Specifications.

     1.1.
Space Plan. Within fifteen (15) business days
after the execution of the Lease, Landlord shall submit to Tenant for approval a
detailed space plan ("Space Plan") for the Premises prepared by Landlord's
architects and consultants, which shall include without limitation, the location
of doors, partitions, electrical and telephone outlets, plumbing fixtures, heavy
floor loads and other special requirements. If applicable, Landlord reserves the
right to approve Tenant's architect and/or space planner. Tenant agrees to
cooperate with Landlord and its design representatives in connection with the
preparation of the Space Plan. Within five (5) days after receipt by Tenant of
the Space Plan, Tenant (i) shall give its written approval with respect thereto,
or (ii) shall notify Landlord in writing of its disapproval and state with
specificity the grounds for such disapproval and the revisions or modifications
necessary in order for Tenant to give its approval. Within five (5) days
following Landlord's receipt of Tenant's disapproval, Landlord shall submit to
Tenant for approval the requested revisions or modifications. Within three (3)
days following receipt by Tenant of such revisions or modifications, Tenant
shall give its written approval with respect thereto or shall request other
revisions or modifications therein. 

     1.2.
Plans. Based on the approved Space Plan,
Landlord shall cause its architects and engineers to prepare and submit to
Tenant for approval detailed plans, specifications and working drawings
("Plans") for the construction of Tenant's leasehold improvements to the
Premises listed on Schedule 1-A attached hereto ("Improvements"). Landlord
reserves the right to approve any space planner, architect or engineer if
employed by Tenant. As used herein, the term "Improvements" shall include all
non-base building work to be done in the Premises pursuant to the Plans,
including, but not limited to: demolition work, partitioning, doors, ceiling,
floor coverings, wall finishes (including paint and wall coverings), window
coverings, electrical (excluding the cost of computer cabling, Tenant’s
telephone system and wiring, and any other special electrical or wiring
dedicated to the Tenant’s operations or business), plumbing, heating,
ventilating and air conditioning, fire protection, cabinets and other millwork.
If Tenant has leased an entire floor, the Improvements shall include finished
toilet rooms, corridors and elevator vestibules. Landlord shall submit the Plans
to Tenant for approval within fifteen (15) business days following Tenant's
approval of the Space Plan. Within three (3) business days after receipt by
Tenant of the Plans, Tenant (i) shall give its written approval with respect
thereto, or (ii) shall notify Landlord in writing of its disapproval and state
with specificity the grounds for such disapproval and the revisions or
modifications necessary in order for Tenant to give its approval. Within five
(5) business days following Landlord's receipt of Tenant's disapproval, Landlord
shall submit to Tenant for approval the requested revisions or modifications.
Within three (3) business days following receipt by Tenant of such revisions or
modifications, Tenant shall give its written approval with respect thereto or
shall request other revisions or modifications therein, and any time delay
incurred in the approval of the Plans from the date of this second notice of
disapproval shall constitute Tenant Delay. After approval of the Plans by
Tenant, no further changes to the Plans shall be made without the prior written
approval of Landlord. 

2. Specifications for Building
Standard Improvements. Specifications and
details for building standard improvements ("Standards") are available in the office of the Building. Except as
specified in Section 3 below, the Space Plan and Plans shall be consistent with
the Standards, and no deviations shall be permitted from the Standards without
Landlord's consent as set forth in Section 3 below. 

3. Grounds for Disapproval.
Tenant may request deviations from the
Standards for Improvements provided that the deviations ("Non-Standards") shall
not be of lesser quality than the Standards. Landlord shall not be required to
approve any item of the Space Plan, the Plans or the Non-Standards that (a) does
not conform to applicable governmental regulations or is disapproved by any
governmental agency; (b) requires building service (including electrical power)
beyond the level normally provided to other tenants in the Building; or (c)
overloads the floors. 

4. Improvement Cost and
Allowance.

     4.1.
Cost Breakdown. Landlord shall provide Tenant
with a breakdown of the estimated total cost of the Improvements ("Cost
Breakdown"), including, without limitation: construction cost of the
Improvements; architectural and engineering fees relating to the preparation and
review of the Space Plan and the Plans (inclusive of the initial Space Plan and
all design work above and below the ceiling); governmental agency plan check,
permit and other fees; sales and use taxes; testing and inspection costs; and
construction fees (including general contractor's overhead and supervision fees
and the construction supervisory fee referred to in Section 5.3 hereof). Within
five (5) days after receipt by Tenant of the Cost Breakdown, Tenant shall either
approve the same in writing or shall provide Landlord with a detailed list of
revisions to the approved Plans. 

     4.2. Improvement Allowance. Landlord has
granted to Tenant the Improvement Allowance specified in Paragraph 2(b) of the
Addendum, which Improvement Allowance shall be used only for the items specified
in the Cost Breakdown. In the event that the Cost
Breakdown exceeds the Improvement Allowance, Tenant shall pay to Landlord the
sum in excess of the Improvement Allowance by cashier's check, which payment
shall be made within five (5) business days of Landlord's notice to Tenant that
Landlord is prepared to commence construction.  

     4.3. Cost Increases. In the event that the
cost of the Improvements increases subsequent to Tenant's approval of the Cost
Breakdown due to the requirements of any governmental agency imposed with
respect to the construction of the Improvements or due to any other
unforeseeable circumstances, Tenant shall pay to Landlord the amount of such
increase within five (5) business days of Landlord's written notice; provided,
however, that Landlord shall first apply toward such increase any remaining
balance in the Improvement Allowance. 

     4.4. Change in Plans. In the event that
Tenant requests a change in the Plans subsequent to approval of the Cost
Breakdown, Landlord shall advise Tenant as to any increases in the cost of the
Improvements and as to any delay such change would cause in the construction of
the Improvements, which delay would constitute a Tenant Delay. Tenant shall
approve or disapprove such change within five (5) days of written notice. In the
event that Tenant approves such change, Tenant shall accompany its approval with
payment in the amount of the increase; provided, however, that Landlord shall
first apply toward such increase any remaining balance in the Improvement
Allowance. Landlord shall have the right to decline Tenant's request for a
change in the approved Plans if the change is inconsistent with Sections 1, 2 or
3 above, or if the change would, in Landlord's sole opinion, unreasonably delay
construction of the Improvements. 

     4.5. No Refund. If the actual cost of the
Improvements does not exceed the Improvement Allowance, the unused portion of
the Improvement Allowance shall not be paid or refunded to Tenant or be
available to Tenant as a credit against any obligations of Tenant under the
Lease, except that any unused portion of the Improvement Allowance may be used
to reimburse Tenant for the cost of wallpaper and carpeting purchased by Tenant
and installed in the Premises pursuant to this Agreement following Landlord’s
receipt of Tenant’s written disbursement request which shall include the total
amount expended by Tenant for the wallpaper and carpet together with invoices,
paid receipts and any other documents reasonably requested by Landlord in order
to justify such a disbursement. 

5. Construction of
Improvements.

     5.1. Construction. Within a reasonable
period following approval of the Cost Breakdown by Tenant, and upon payment of
any sum required under Section 4.2 above, Landlord shall instruct its contractor
to secure a building permit and commence construction.

     5.2. Completion. Landlord shall endeavor to
cause the contractor to substantially complete construction of the Improvements
in a diligent manner, but Landlord shall not be liable for any loss or damage as
a result of delays in construction or delivery of possession of the Premises. As
used herein and in the Lease, the term "substantially" complete shall
specifically exclude Tenant's installation of its furniture, fixtures and
cabling which shall be Tenant's obligation and shall not affect the date of
substantial completion. 

     5.3. Construction Supervisory Fee. The cost
of the Improvements shall include a construction supervisory fee equal to five
percent (5%) of the total Improvement Allowance payable to Landlord or
Landlord’s agent for the supervision of the construction of the Improvements by
Landlord. 

6. Commencement Date. The Commencement Date and Tenant's obligation to pay rent
under the Lease shall be governed by Section 3 of the Lease.

7. Incorporation. This Agreement is and shall be incorporated by reference in
the Lease, and all of the terms and conditions of the Lease are and shall be
incorporated herein by this reference. 

SCHEDULE 1-A 

IMPROVEMENTS 
(SCOPE OF WORK)

Emisphere
Technologies

Landlord Responsibilities

Reception area: 
1. Remove reception closet,
patch walls and ceiling 
2. Remove existing carpet

3.
Install large crown molding as per tenant’s
sample board and stain and finish 
4. Install trim, as per sketch on sample board, around entry from reception
area to general office space – submit sample for approval 
5. Replace ceiling tiles with 2x2 ceiling tiles. 
6. Install 54” vinyl wall covering as per tenant’s sample board. (specs
attached) 
7. Rip up carpet 
Conference Room:

1.
Install large crown molding to match above

2.
Stain and finish crown molding to match
above
3.
Remove existing lights over conference table

4.
Install outlets for 2 chandeliers

5.
Install 2 chandeliers as per tenant’s sample
board 
6.
Replace ceiling tiles with 2x2 ceiling tiles.

7.
Install 54” vinyl wall covering (sample specs. As
above)
Mr. Novinsky’s
Office 
1. Remove wall to make 1 large office 
2. Paint trim. 
3. Install wall covering in
office to match conference room. Install wall covering in assistant area to
match reception area. 
General
Office 
1. Paint all trim 
2. Paint walls

3.
Paint perimeter offices with one accent wall

4.
Install office cubicles where needed

5.
Remove high hats install outlets for 4
chandeliers as per tenants direction 

Tenant Responsibilities

Reception area: 
1. Provide chandeliers

2.
Purchase 54” vinyl wall covering 
3. Provide and install new glue down carpet with coordinating carpet base

4.
Provide and install new reception desk and other
furniture as per tenant’s sample board 
5. Provide and install accessories 
Conference Room: 
1. Provide chandeliers 
2. Provide 54” vinyl wall
covering (same specs as above) 
3. Provide and Install
accessories 
Mr. Novinsky’s Office

1.
Provide wall covering in office to match
conference room. Provide wall covering in assistant area to match reception
area. 
General Office 
1. Provide and install accessories

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