Document:

exhibit10-11.htm

    
      
        

      
Exhibit 10.11

    

    LEASE
AGREEMENT

    

    This
Lease made as of the First day of October, 2007 between Hertz Investors Group,
L.P. hereinafter referred to as LANDLORD, and Track Data Corporation hereinafter
jointly, severally and collectively referred to as TENANT.

    

    Witnesseth,
that the Landlord hereby leases to the Tenant, and the Tenant hereby hires and
takes from the Landlord in the building known as the entire building @ 93-97
Rockwell Place, Brooklyn, NY 11217 to be used and occupied by the Tenant for any
commercial purpose and for no other purpose, for a term to commence on October
1, 2007 and to end on September 30, 2009 unless sooner terminated as hereinafter
provided, at the ANNUAL RENT of $656,700 plus reimbursement of all Real Estate
Taxes, all payable in equal monthly installments in advance on the first day of
each and every calendar month during said term.

    

    THE
TENANT JOINTLY AND SEVERALLY COVENANTS:

    

    FIRST.--That
the Tenant will pay the rent as above provided.

    

    SECOND.--That,
throughout said term the Tenant will take good care of the demised premises,
fixtures and appurtenances, and all alterations, additions and improvements to
either; make all repairs in and about the same necessary to preserve them in
good order and condition, which repairs shall be, in quality and class, equal to
the original work; promptly pay the expense of such repairs; suffer no waste or
injury; give prompt notice to the Landlord of any fire that may occur; execute
and comply with all laws, rules, orders, ordinances and regulations at any time
issued or in force (except those requiring structural alterations), applicable
to the demised premises or to the Tenant’s occupation thereof, of the Federal,
State and Local Governments, and of each and every department, bureau and
official thereof, and of the New York Board of Fire Underwriters; permit at all
times during usual business hours, the Landlord and representatives of the
Landlord to enter the demised premises for the purpose of inspection, and to
exhibit them for purposes of sale or rental; suffer the Landlord to make repairs
and improvements to all parts of the building, and to comply with all orders and
requirements of governmental authority applicable to said building or to any
occupation thereof; suffer the Landlord to erect, use, maintain, repair and
replace pipes and conduits in the demised premises and to the floors above and
below; forever indemnify and save harmless the Landlord for and against any and
all liability, penalties, damages, expenses and judgements arising from injury
during said term to person or property of any nature, occasioned wholly or in
part by any act or acts, omission or omissions of the Tenant, or of the
employees, guests, agents, assigns or undertenants of the Tenant and also for
any matter or thing growing out of the occupation of the demised premises or of
the streets, sidewalks or vaults adjacent thereto; permit, during the six months
next prior to the expiration of the term the usual notice “To Let” to be placed
and to remain unmolested in a conspicuous place upon the exterior of the demised
premises; repair, at or before the end of the term, all injury done by the
installation or removal of furniture and property; and at the end of the term,
to quit and surrender the demised premises with all alterations, additions and
improvements in good order and condition.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    THIRD. --
That the Tenant will not disfigure or deface any part of the building, or suffer
the same to be done, except so far as may be necessary to affix such trade
fixtures as are herein consented to by the Landlord; the Tenant will not
obstruct, or permit the obstruction of the street or the sidewalk adjacent
thereto; will not do anything, or suffer anything to be done upon the demised
premises which will increase the rate of fire insurance upon the building or any
of its contents, or be liable to cause structural injury to said building; will
not permit the accumulation of waste or refuse matter, and will not, without the
written consent of the Landlord first obtained in each case, either sell,
assign, mortgage or transfer this lease, underlet the demised premises or any
part thereof, permit the same or any part thereof to be occupied by anybody
other than the Tenant and the Tenant’s employees, make any alterations in the
demised premises, use the demised premises or any part thereof for any purpose
other than the one first above stipulated, or for any purpose deemed extra
hazardous on account of fire risk, nor in violation of any law or ordinance.
That the Tenant will not obstruct or permit the obstruction of the light, halls,
stairway or entrances to the building, and will not erect or inscribe any sign,
signals or advertisements unless and until the style and location thereof have
been approved by the Landlord; and if any be erected or inscribed without such
approval, the Landlord may remove the same.

    

    IT IS
MUTUALLY COVENANTED AND AGREED, THAT

    

    FOURTH.
-- If the demised premises shall be partially damaged by fire or other cause
without the fault or neglect of Tenant, Tenant’s servants, employees, agents,
visitors or licensees, the damages shall be repaired by and at the expense of
Landlord and the rent until such repairs shall be made shall be apportioned
according to the part of the demised premises which is usable by Tenant. But if
such partial damage is due to the fault or neglect of Tenant, Tenant's servants,
employees, agents, visitors or licensees, without prejudice to any other rights
and remedies of Landlord and without prejudice to the rights of subrogation of
Landlord's insurer, the damages shall be repaired by Landlord but there shall be
no apportionment or abatement of rent. No penalty shall accrue for reasonable
delay which may arise by reason of adjustment of insurance on the part of
Landlord and/or tenant, and for reasonable delay on account of "labor troubles",
or any other cause beyond Landlord's control. If the demised premises are
totally damaged or are rendered wholly untenantable by fire or other cause, and
if Landlord shall decide not to restore or not to rebuild the same, or if the
building shall be so damaged that Landlord shall decide to demolish it or to
rebuild it, then or in any of such events Landlord may, within ninety (90) days
after such fire or other cause, give Tenant a notice in writing of such
decision, which notice shall be given as in Paragraph twelve hereof provided and
thereupon the term of this lease shall expire by lapse of time upon the third
day after such notice is given, and Tenant shall vacate the demised premises and
surrender the same to Landlord. If Tenant shall not be in default under this
lease then, upon the termination of this lease under the conditions provided for
in the sentence immediately preceding, Tenant's liability for rent shall cease
as of the day following the casualty. Tenant hereby expressly waives the
provisions of Section 227 of the Real Property Law and agrees that the foregoing
provisions of this Article shall govern and control in lieu thereof. If the
damage or destruction be due to the fault or neglect of Tenant the debris shall
be removed by, and at the expense of, Tenant.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    FIFTH. --
The whole or any part of the premises hereby demised shall be taken or condemned
by any competent authority for any public use or purpose then the term hereby
granted shall cease from the time when possession of the part so taken shall be
required for such public purpose and without apportionment of award, the Tenant
hereby assigning to the Landlord all right and claim to any such award, the
current rent, however, in such case to be apportioned.

    

    SIXTH. --
If before the commencement of the term, the Tenant be adjudicated a bankrupt, or
make a “general assignment,” or take the benefit of any insolvent act, or if a
Receiver or Trustee be appointed for the Tenant’s property, or if this lease or
the estate of the Tenant hereunder be transferred or pass to or devolve upon any
other person or corporation, or if the Tenant shall default in the performance
of any agreement by the Tenant contained in any other lease to the Tenant by the
Landlord or by any corporation of which an officer of the Landlord is a
Director, this lease shall thereby, at the option of the Landlord, be terminated
and in that case, neither the Tenant nor anybody claiming under the Tenant shall
be entitled to go into possession of the demised premises. If after the
commencement of the term, any of the events mentioned above in this subdivision
shall occur, or if Tenant shall make default in fulfilling any of the covenants
of this lease, other than the covenants for the payment of rent or "additional
rent" or if the demised premises become vacant or deserted, the Landlord may
give to the Tenant ten days' notice of intention to end the term of this lease,
and thereupon at the expiration of said ten days' (if said condition which was
the basis of said notice shall continue to exist) the term under this lease
shall expire as fully and completely as if that day were the date herein
definitely fixed for the expiration of the term and the tenant will then quit
and surrender the demised premises to the Landlord, but the Tenant shall remain
liable as hereinafter provided.

    

    If the
Tenant shall make default in the payment of the rent reserved hereunder, or any
item of “additional rent” herein mentioned, or any part of either or in making
any other payment herein provided for, or if the notice last above provided for
shall have been given and if the condition which was the basis of said notice
shall exist at the expiration of said ten days’ period, the Landlord may
immediately, or at any time thereafter, re-enter the demised premises and remove
all persons and all or any property therefrom, either by summary dispossess
proceedings, or by any suitable action or proceeding at law, or by force or
otherwise, without being liable to indictment, prosecution or damages therefor,
and re-possess and enjoy said premises together with all additions, alterations
and improvements. In any such case or in the event that this lease be
“terminated” before the commencement of the term, as above provided, the
Landlord may either re-let the demised premises or any part or parts thereof for
the Landlord’s own account, or may, at the Landlord’s option, re-let the demised
premises or any part or parts thereof as the agent of the Tenant, and receive
the rents therefor, applying the same first to the payment of such expenses as
the Landlord may have incurred, and then to the fulfillment of the covenants of
the Tenant herein, and the balance, if any, at the expiration of the term first
above provided for, shall be paid to the Tenant. Landlord may rent the premises
for a term extending beyond the term hereby granted without releasing Tenant
from any liability. In the event that the term of this lease shall expire as
above in this subdivision “Sixth” provided, or terminate by summary proceedings
or otherwise, and if the Landlord shall not re-let the demised premises for the
Landlord’s own account, then, whether or not the premises be re-let, the Tenant
shall remain liable for, and the Tenant hereby agrees to pay to the Landlord,
until the time when this lease would have expired but for such termination or
expiration, the equivalent of the amount of all of the rent and “additional
rent” reserved herein, less the avails of reletting, if any, and the same shall
be due and payable by the Tenant to the Landlord on the several rent days above
specified, that is, upon each of such rent days the Tenant shall pay to the
Landlord the amount of deficiency then existing. The Tenant hereby expressly
waives any and all right of redemption in case the Tenant shall be dispossessed
by judgment or warrant of any court or judge, and the Tenant waives and will
waive all right to trial by jury in any summary proceedings hereafter instituted
by the Landlord against the Tenant in respect to the demised premises. The words
“re-enter” and “re-entry” as used in this lease are not restricted to their
technical legal meaning.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    In the
event of a breach or threatened breach by the Tenant of any of the covenants or
provisions hereof, the Landlord shall have the right of injunction and the right
to invoke any remedy allowed at law or in equity, as if re-entry, summary
proceedings and other remedies were not herein provided for.

    

    SEVENTH.
-- If the Tenant shall make default in the performance of any covenant herein
contained, the Landlord may immediately, or at any time thereafter, without
notice, perform the same for the account of the Tenant. If a notice of
mechanic’s lien be filed against the demised premises or against premises of
which the demised premises are part, for, or purporting to be for, labor or
material alleged to have been furnished, or to be furnished to or for the Tenant
at the demised premises, and if the Tenant shall fail to take such action as
shall cause such lien to be discharged within fifteen days after the filing of
such notice, the Landlord may pay the amount of such lien or discharge the same
by deposit or by bonding proceedings, and in the event of such deposit or
bonding proceedings, the Landlord may require the lienor to prosecute an
appropriate action to enforce the lienor's claim. In such case, the Landlord may
pay any judgment recovered on such claim. Any amount paid or expense incurred by
the Landlord as in this subdivision of this lease provided, and any amount as to
which the Tenant shall at any time be in default for or in respect to the use of
water, electric current or sprinkler supervisory service, and any expense
incurred or sum of money paid by the Landlord by reason of the failure of the
Tenant to comply with any provision hereof, or in defending any such action,
shall be deemed to be of any other “additional rent” for the demised premises,
and shall be due and payable by the Tenant to the Landlord on the first day of
the next following month, or, at the option of the Landlord, on the first day of
any succeeding month. The receipt by the Landlord of any installment of the
regular stipulated rent hereunder or any of said “additional rent” shall not be
a waiver of any other “additional rent” then due.

    

    EIGHTH.
--The failure of the Landlord to insist, in any one or more instances upon a
strict performance of any of the covenants of this lease, or to exercise any
option herein contained, shall not be construed as a waiver or a relinquishment
for the future of such covenant or option, but the same shall continue and
remain in full force and effect. The receipt by the Landlord of rent, with
knowledge of the breach of any covenant hereof, shall not be deemed a waiver of
such breach and no waiver by the Landlord of any provision hereof shall be
deemed to have been made unless expressed in writing and signed by the Landlord.
Even though the Landlord shall consent to an assignment hereof no further
assignment shall be made without express consent in writing by the
Landlord.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    NINTH.--If
this lease be assigned, or if the demised premises or any part thereof be
underlet or occupied by anybody other than the Tenant the Landlord may collect
rent from the assignee, under-tenant or occupant, and apply the net amount
collected to the rent herein reserved, and no such collection shall be deemed a
waiver of the covenant herein against assignment and under-letting, or the
acceptance of the assignee, under-tenant or occupant as tenant, or a release of
the Tenant from the further performance by the Tenant of the covenants herein
contained on the part of the Tenant.

    

    TENTH.--This
lease shall be subject and subordinate at all times, to the lien of the
mortgages now on the demised premises, and to all advances made or hereafter to
be made upon the security thereof, and subject and subordinate to the lien of
any mortgage or mortgages which at any time may be made a lien upon the
premises. The Tenant will execute and deliver such further instrument or
instruments subordinating this lease to the lien of any such mortgage or
mortgages as shall be desired by any mortgagee or proposed mortgagee. The Tenant
hereby appoints the Landlord the attorney-in-fact of the Tenant, irrevocable, to
execute and deliver any such instrument or instruments for the
Tenant.

    

    ELEVENTH.--All
improvements made by the Tenant to or upon the demised premises, except said
trade fixtures, shall when made, at once be deemed to be attached to the
freehold, and become the property of the Landlord, and at the end or other
expiration of the term, shall be surrendered to the Landlord in as good order
and condition as they were when installed, reasonable wear and damages by the
elements excepted.

    

    TWELFTH.--Any
notice or demand which under the terms of this lease or under any statute must
or may be given or made by the parties hereto shall be in writing and shall be
given or made by mailing the same by certified or registered mail addressed to
the respective parties at the addresses set forth in this lease.

    

    THIRTEENTH.--The
Landlord shall not be liable for any failure of water supply or electrical
current, sprinkler damage, or failure of sprinkler service, nor for injury or
damage to person or property caused by the elements or by other tenants or
persons in said building, or resulting from steam, gas, electricity, water, rain
or snow, which may leak or flow from any part of said buildings, or from the
pipes, appliances or plumbing works of the same, or from the street or
sub-surface, or from any other place, nor for interference with light or other
incorporeal hereditaments by anybody other than the Landlord, or caused by
operations by or for a governmental authority in construction of any public or
quasi-public work, neither shall the Landlord be liable for any latent defect in
the building.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    FOURTEENTH.--
No diminution or abatement of rent, or other compensation shall be claimed or
allowed for inconvenience or discomfort arising from the making of repairs or
improvements to the building or to its appliances, nor for any space taken to
comply with any law, ordinance or order of a governmental authority. In respect
to the various "services" if any, herein expressly or impliedly agreed to be
furnished by the Landlord to the Tenant, it is agreed that there shall be no
diminution or abatement of the rent, or any other compensation, for interruption
or curtailment of such “service” when such interruption or curtailment shall be
due to accident, alterations or repairs desirable or necessary to be made or to
inability or difficulty in securing supplies or labor for the maintenance of
such “service” or to some other cause, not gross negligence on the part of the
Landlord. No such interruption or curtailment of any such “service” shall be
deemed a constructive eviction. The Landlord shall not be required to furnish,
and the Tenant shall not be entitled to receive, any of such “services” during
any period wherein the Tenant shall be in default in respect to the payment of
rent. Neither shall there be any abatement or diminution of rent because of
making of repairs, improvements or decorations to the demised premises after the
date above fixed for the commencement of the term, it being understood that rent
shall, in any event, commence to run at such date so above fixed.

    

    FIFTEENTH.--The
Landlord may prescribe and regulate the placing of safes, machinery, quantities
of merchandise and other things. The Landlord may also prescribe and regulate
which elevator and entrances shall be used by the Tenant’s employees, and for
the Tenant’s shipping. The Landlord may make such other and further rules and
regulations as, in the Landlord’s judgment, may from time to time be needful for
the safety, care or cleanliness of the building, and for the preservation of
good order therein. The Tenant and the employees and agents of the Tenant will
observe and conform to all such rules and regulations.

    

    SIXTEENTH.--
In the event that an excavation shall be made for building or other purposes
upon land adjacent to the demised premises or shall be contemplated to be made,
the Tenant shall afford to the person or persons causing or to cause such
excavation, license to enter upon the demised premises for the purpose of doing
such work as said person or persons shall deem to be necessary to preserve the
wall or walls, structure or structures upon the demised premises from injury and
to support the same by proper foundations.

    

    SEVENTEENTH.--
No vaults or space not within the property line of the building are leased
hereunder. Landlord makes no representation as to the location of the property
line of the building. Such vaults or space as Tenant may be permitted to use or
occupy are to be used or occupied under a revocable license and if such license
be revoked by the Landlord as to the use of part or all of the vaults or space
Landlord shall not be subject to any liability; Tenant shall not be entitled to
any compensation or reduction in rent nor shall this be deemed constructive or
actual eviction. Any tax, fee or charge of municipal or other authorities for
such vaults or space shall be paid by the Tenant for the period of the Tenant’s
use or occupancy thereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EIGHTEENTH.--
That during seven months prior to the expiration of the term hereby granted,
applicants shall be admitted at all reasonable hours of the day to view the
premises until rented; and the Landlord and the Landlord’s agents shall be
permitted at any time during the term to visit and examine them at any
reasonable hour of the day, and workmen may enter at any time, when authorized
by the Landlord or the Landlord’s agents, to make or facilitate repairs in any
part of the building; and if the said Tenant shall not be personally present to
open and permit an entry into said premises, at any time, when for any reason an
entry therein shall be necessary or permissible hereunder, the Landlord or the
Landlord’s agents may forcibly enter the same without rendering the Landlord or
such agents liable to any claim or cause of action for damages by reason thereof
(if during such entry the Landlord shall accord reasonable care to the Tenant’s
property) and without in any manner affecting the obligations and covenants of
this lease: it is, however, expressly understood that the right and authority
hereby reserved, does not impose, nor does the Landlord assume, by reason
thereof, any responsibility or liability whatsoever for the care or supervision
of said premises, or any of the pipes, fixtures, appliances or appurtenances
therein contained or therewith in any manner connected.

    

    NINETEENTH.--The
Landlord has made no representations or promises in respect to said building or
to the demised premises except those contained herein, and those, if any,
contained in some written communication to the Tenant, signed by the Landlord.
This instrument may not be changed, modified, discharged or terminated
orally.

    

    TWENTIETH.--
If the Tenant shall at any time be in default hereunder, and if the Landlord
shall institute an action or summary proceeding against the Tenant based upon
such default, then the Tenant will reimburse the Landlord for the expense of
attorneys fees and disbursements thereby incurred by the Landlord, so far as the
same are reasonable in amount. Also so long as the Tenant shall be a tenant
hereunder the amount of such expenses shall be deemed to be “additional rent”
hereunder and shall be due from the Tenant to the Landlord on the first day of
the month following the incurring of such respective expenses.

    

    TWENTY-FIRST.--
Landlord shall not be liable for failure to give possession of the premises upon
commencement date by reason of the fact that premises are not ready for
occupancy, or due to a prior Tenant wrongfully holding over or any other person
wrongfully in possession or for any other reason: in such event the rent shall
not commence until possession is given or is available, but the term herein
shall not be extended.

    

    THE
TENANT FURTHER COVENANTS:

    

    TWENTY-SECOND.--If
the demised premises or any part thereof consist of a store, or of a first
floor, or of any part thereof, the Tenant will keep the sidewalk and curb in
front thereof clean at all times and free from snow and ice, and will keep
insured in favor of the Landlord, all plate glass therein and furnish the
Landlord with policies of insurance covering the same.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TWENTY-THIRD.
--If by reason of the conduct upon the demised premises of a business not herein
permitted, or if by reason of the improper or careless conduct of any business
upon or use of the demised premises, the fire insurance rate shall at any time
be higher than it otherwise would be, then the Tenant will reimburse the
Landlord, as additional rent hereunder, for that part of all fire insurance
premiums hereafter paid out by the Landlord which shall have been charged
because of the conduct of such business not so permitted, or because of the
improper or careless conduct of any business upon or use of the demised
premises, and will make such reimbursement upon the first day of the month
following such outlay by the Landlord; but this covenant shall not apply to a
premium for any period beyond the expiration date of this lease, first above
specified. In any action or proceeding wherein the Landlord and Tenant are
parties, a schedule or “make up” of rate for the building on the demised
premises, purporting to have been issued by New York Fire Insurance Exchange,
or, other body making fire insurance rates for the demised premises, shall be
prima facie evidence of the facts therein stated and of the several items and
charges included in the fire insurance rate then applicable to the demised
premises.

    

    TWENTY-FOURTH.--If
a separate water meter be installed for the demised premises, or any part
thereof, the Tenant will keep the same in repair and pay the charges made by the
municipality or water supply company for or in respect to the consumption of
water, as and when bills therefor are rendered. If the demised premises, or any
part thereof, be supplied with water through a meter which supplies other
premises, the Tenant will pay to the Landlord, as and when bills are rendered
therefor, the Tenant’s proportionate part of all charges which the municipality
or water supply company shall make for all water consumed through said meter, as
indicated by said meter. Such proportionate part shall be fixed by apportioning
the respective charge according to floor area against all of the rentable floor
area in the building (exclusive of the basement) which shall have been occupied
during the period of the respective charges, taking into account the period that
each part of such area was occupied. Tenant agrees to pay as additional rent the
Tenant’s proportionate part, determined as aforesaid, of the sewer rent or
charge imposed or assessed upon the building of which the premises are a
part.

    

    TWENTY-FIFTH.--That
the Tenant will purchase from the Landlord, if the Landlord shall so desire, all
electric current that the Tenant requires at the demised premises, and will pay
the Landlord for the same, as the amount of consumption shall be indicated by
the meter furnished therefor. The price for said current shall be the same as
that charged for consumption similar to that of the Tenant by the company
supplying electricity in the same community. Payments shall be due as and when
bills shall be rendered. The Tenant shall comply with like rules, regulations
and contract provisions as those prescribed by said company for a consumption
similar to that of the Tenant.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    TWENTY-SIXTH.--If
there now is or shall be installed in said building a “sprinkler system” the
Tenant agrees to keep the appliances thereto in the demised premises in repair
and good working condition, and if the New York Board of Fire Underwriters or
the New York Fire Insurance Exchange or any bureau, department or official of
the State or local government requires or recommends that any changes,
modifications, alterations or additional sprinkler heads or other equipment be
made or supplied by reason of the Tenant’s business, or the location of
partitions, trade fixtures, or other contents of the demised premises, or if
such changes, modifications, alterations, additional sprinkler heads or other
equipment in the demised premises are necessary to prevent the imposition of a
penalty or charge against the full allowance for a sprinkler system in the fire
insurance rate as fixed by said Exchange, or by any Fire Insurance Company, the
Tenant will at the Tenant’s own expense, promptly make and supply such changes,
modifications, alterations, additional sprinkler heads or other
equipment.

    

    TWENTY-SEVENTH.--The
sum of No Dollars is deposited by the Tenant herein with the Landlord herein as
security for the faithful performance of all the covenants and conditions of the
lease by the said Tenant. If the Tenant faithfully performs all the covenants
and conditions on his part to be performed, then the sum deposited shall be
returned to said Tenant.

    

    TWENTY-EIGHTH.--This
lease is granted and accepted on the especially understood and agreed condition
that the Tenant will conduct his business in such a manner, both as regards
noise and kindred nuisances, as will in no wise interfere with, annoy, or
disturb any other tenants, in the conduct of their several businesses, or the
landlord in the management of the building: under penalty of forfeiture of this
lease and consequential damages.

    

    TWENTY-NINTH.--The
Landlord hereby recognizes No Broker as the broker who negotiated and
consummated this lease with the Tenant herein, and agrees that if, as, and when
the Tenant exercises the option, if any, contained herein to renew this lease,
or fails to exercise the option, if any, contained therein to cancel this lease,
the Landlord will pay to said broker a further commission in accordance with the
rules and commission rates of the Real Estate Board in the community. A sale,
transfer, or other disposition of the Landlord’s interest in said lease shall
not operate to defeat the Landlord’s obligation to pay the said commission to
the said broker. The Tenant herein hereby represents to the Landlord that the
said broker is the sole and only broker who negotiated and consummated this
lease with the Tenant.

    

    THIRTIETH.--
The Tenant agrees that it will not require, permit, suffer, nor allow the
cleaning of any window, or windows, in the demised premises from the outside
(within the meaning of Section 202 of the Labor Law) unless the equipment and
safety devices required by law, ordinance, regulation or rule, including,
without limitation, Section 202 of the New York Labor Law, are provided and
used, and unless the rules, or any supplemental rules of the Industrial Board of
the State of New York are fully complied with; and the Tenant hereby agrees to
indemnify the Landlord, Owner, Agent, Manager and/or Superintendent, as a result
of the Tenant’s requiring, permitting, suffering, or allowing any window, or
windows in the demised premises to be cleaned from the outside in violation of
the requirements of the aforesaid laws, ordinances, regulations and/or
rules.

    

    THIRTY-FIRST.--The
invalidity or unenforceability of any provision of this lease shall in no way
affect the validity or enforceability of any other provision
hereof.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    THIRTY-SECOND.--In
order to avoid delay, this lease has been prepared and submitted to the Tenant
for signature with the understanding that it shall not bind the Landlord unless
and until it is executed and delivered by the Landlord.

    

    THIRTY-THIRD.--The
Tenant will keep clean and polished all metal, trim, marble and stonework which
are a part of the exterior of the premises, using such materials and methods as
the Landlord may direct, and if the Tenant shall fail to comply with the
provisions of this paragraph, the Landlord may cause such work to be done at the
expense of the Tenant.

    

    THIRTY-FOURTH.--The
Landlord shall replace at the expense of the Tenant any and all broken glass in
the skylights, doors and walls in and about the demised premises. The Landlord
may insure and keep insured all plate glass in the skylights, doors and walls in
the demised premises, for and in the name of the Landlord and bills for the
premiums therefor shall be rendered by the Landlord to the Tenant at such times
as the Landlord may elect, and shall be due from and payable by the Tenant when
rendered, and the amount thereof shall be deemed to be, and shall be paid as,
additional rent.

    

    THIRTY-FIFTH.--This
lease and the obligation of Tenant to pay rent hereunder and perform all of the
other covenants and agreements hereunder on part of Tenant to be performed shall
in nowise be affected, impaired or excused because Landlord is unable to supply
or is delayed in supplying any service expressly or impliedly to be supplied or
is unable to make, or is delayed in making any repairs, additions, alterations
or decorations or is unable to supply or is delayed in supplying any equipment
or fixtures if Landlord is prevented or delayed from so doing by reason of
governmental preemption in connection with a National Emergency declared by the
President of the United States or in connection with any rule, order or
regulation of any department or subdivision thereof of any government agency or
by reason of the conditions of supply and demand which have been or are affected
by war or other emergency.

    

    THE
LANDLORD COVENANTS

    

    FIRST.--
That if and so long as the Tenant pays the rent and “additional rent” reserved
hereby, and performs and observes the covenants and provisions hereof, the
Tenant shall quietly enjoy the demised premises, subject, however, to the terms
of this  lease, and to the mortgages above mentioned, provided
however, that this covenant shall be conditioned upon the retention of title to
the premises by Landlord.

    

    SECOND.--Subject
to the provisions of Paragraph “Fourteenth” above, the Landlord will furnish the
following respective services: (a) Elevator service, if the building shall
contain an elevator or elevators, on all days. (b) Heat, during the same hours
on the same days in the cold season in each year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    And it is
mutually understood and agreed that the covenants and agreements contained in
the within lease shall be binding upon the parties hereto and upon their
respective successors, heirs, executors and administrators.

    

    In
Witness Whereof, the Landlord and Tenant have respectively signed and sealed
these presents the day and year first above written

    

    

    
      	 
      	
              /S/

            	
              Barry
      Hertz

            	 
      	
               [
      L.S.]

            
	 
      	 
      	
              Hertz
      Investors Group L.P

            	
              Landlord

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              /S/

            	
              Martin Kaye

            	 
      	
               [
      L.S.]

            
	 
      	 
      	
              Track
      Data Corporation, CEO

            	 
      	
              Tenantexv10w53

 

    Exhibit 10.53

 

     

 

		
	    July 11,
    2006
    	    
    CONFIDENTIAL
    

 

    Terence A. Rugg, M.D.

    6 Erick Court

    Chester, NJ 07930

 

    Dear Terry:

 

    SGX Pharmaceuticals is pleased to offer you the position of Vice
    President, Development and Chief Medical Officer reporting to
    Mike Grey, Chief Executive Officer. This position is categorized
    as full-time, exempt. Following are the details of our offer.

 

			
	 	    • 
	
    The salary in this position is $300,000.00 on an annualized
    basis, or approximately $11,538.46 bi-weekly, subject to
    standard deductions and withholdings.

	 
	 	    • 
	
    Subject to approval by the Board of Directors, you will receive
    an option to purchase 75,000 shares of the Company’s
    common stock (“Option”) at a price per share equal to
    the market closing price of the Company’s common stock on
    the last date prior to your first day of employment. This Option
    will have a vesting commencement date of your first day of
    employment with the Company. One quarter (1/4) of the granted
    shares vest one year after the vesting commencement date and
    1/48th of
    the shares vest monthly thereafter over the next three years
    (fourth anniversary of the vesting commencement date). The offer
    of these Options is conditioned upon your acceptance of our
    offer of employment and subject to the terms and requirements of
    the Company’s 2005 Equity Incentive Plan (the
    “Incentive Plan”) and the Company’s form of stock
    option agreement. You are also eligible to participate in the
    SGX 2005 Employee Stock Purchase Plan.

	 
	 	    • 
	
    Included in the compensation package is a benefits plan that
    offers medical, dental, vision, life insurance, Accidental Death
    and Dismemberment (AD&D) insurance, long-term disability,
    short-term disability insurance; and a 401(k) plan. For
    full-time employees, vacation accrues on a pay period basis at
    the annual rate of 120 hours (three weeks). The vacation
    accrual increases by one day after each anniversary with the
    Company, up to a maximum of 20 days per year. The Company
    also provides employees with five days of sick time per year. In
    addition to our vacation policy as noted above, the company is
    closed over the week between Christmas and New Year.

	 
	 	    • 
	
    You are also eligible to participate in the Company’s cash
    bonus program. In your position, you are eligible to earn a cash
    bonus of up to 30% of your base salary based upon corporate and
    individual goal achievement.

	 
	 	    • 
	
    You will receive a one-time conditional sign on bonus in the
    amount of $100,000. This bonus is subject to federal, state and
    payroll tax withholdings and will be paid to you in January
    2007, provided you are still employed by the company at said
    time. If you leave the company prior to completing one year of
    service, you will be required to repay the full amount of this
    bonus at that time.

 

    You are also eligible for relocation assistance from the
    Chester, New Jersey area to the San Diego area. SGX will
    reimburse you for expenses related to your move as follows:

 

    1. Reasonable travel and living expenses associated with
    one trip of five days (four night hotel stay and travel) for up
    to 4 people to San Diego for the purpose of securing a
    place to live, or, alternately, if you are required to report to
    work prior to the sale and closure of your existing house in New
    Jersey, an equivalent trip

 

 

    SGX
    Pharmaceuticals,
    Inc. • www.sgxpharma.com

    Corporate
    Headquarters • 10505 Roselle
    Street • San Diego, CA
    92121 • 858.558.4850 • 858.558.4859
    fax
    

    SGX
    Beamline • Argonne National Laboratory, Bldg.
    438A • 9700 S. Cass
    Avenue • Argonne, IL
    60439 • 630.252.0820 • 630.252.0835
    fax
    

 

    

 

    Terence A. Rugg, M.D.

    2 of 5

 

    from San Diego back to New Jersey to finalize your affairs
    in New Jersey. If needed, a second trip may be requested.
    Original receipts are required for reimbursement.

 

    2. Normal and customary non-recurring costs including the
    sales commission associated with the sale of your home in
    Chester, up to 8% of the purchase price.

 

    3. Normal and customary non-recurring costs associated with
    the purchase of your new home, up to 1.5% of the purchase price.

 

    4. Prior to the arrival of your own vehicles to
    San Diego, reimbursement of the costs of interim rental
    cars pending the arrival of your own vehicles, for a period not
    to exceed 8 weeks.

 

    SGX will
    gross-up the
    reimbursements described in
    Items 1-4
    above (to the extent that these reimbursements are considered
    taxable income) for income and employment taxes. The income tax
    gross-up
    will be calculated using the supplemental wage rates in effect
    when the payment is made. SGX will reimburse these described
    relocation expenses in
    paragraphs 1-4
    above up to $105,000.

 

    In addition, you will receive the following relocation benefits:

 

			
	 	    • 
	
    Reasonable costs associated with the transportation for you and
    your family (including pets) with your final move trip to
    San Diego.

	 
	 	    • 
	
    Household goods move to include packing, shipping, partial
    unpack, 2 cars, insurance of goods during shipment and third
    party services.

	 
	 	    • 
	
    SGX has contracted with Relocation Coordinates, Inc. to
    coordinate your move with a variety of relocation assistance
    including finding a moving company, interim housing, a real
    estate agent and general information about the San Diego
    area. If you use a real estate agent associated with Relocation
    Coordinates for the sale
    and/or
    purchase of a home, you can receive 25% of 1% of the purchase
    price towards your closing costs. If the realtor is used on both
    the sale and purchase, you would receive the benefit on each
    transaction.

	 
	 	    • 
	
    Miscellaneous Expense Allowance: SGX realizes you will incur
    incidental moving costs during the relocation. To assist you
    with these incidental expenses, SGX will provide you with a
    moving allowance of $8,000. This moving allowance is subject to
    required federal, state, and payroll withholdings and will be
    paid with the first paycheck you receive from SGX.

	 
	 	    • 
	
    If you are required to report to work prior to finding a new
    permanent residence, you are eligible for Temporary Housing up
    to a maximum of 90 days.

	 
	 	    • 
	
    If you are required to report to work prior to finding a new
    permanent residence, you are eligible for temporary storage of
    household goods up to a maximum of 90 days.

 

    To receive the relocation benefits outlined above, relocation to
    San Diego must occur within the first three (3) months
    of your employment with SGX.

 

    In the event that the Company terminates your employment for
    cause prior to the completion of 3 years of service or you
    terminate your employment prior to the completion of
    3 years of service, you will be required to reimburse SGX
    for the relocation assistance described in this letter. Third
    party services provided by the relocation company are not
    subject to payback. Repayment will be in accordance with the
    following reimbursement schedule: i) if you terminate
    employment or your employment is terminated prior to your first
    year anniversary date of your employment, you will be required
    to repay 100% of the relocation assistance ii) if you
    terminate employment or your employment is terminated prior to
    your second year anniversary date, but after one year of
    employment, you

 

    

 

    Terence A. Rugg, M.D.

    3 of 5

 

    will be required to repay two-thirds (2/3) of the relocation
    assistance iii) if you terminate employment or your
    employment is terminated prior to your third year anniversary
    date, but after your second year of employment, you will be
    required to repay one-third (1/3) of the relocation assistance.
    SGX reserves the right to withhold such amount from your final
    paycheck and you agree to also execute any documents necessary
    to facilitate this reimbursement.

 

    In the event of a Change of Control (as that term is defined
    below) the vesting of any outstanding stock options described
    above will be accelerated by 12 months. In the event your
    employment is terminated by the Company without cause within one
    year after a Change of Control, the vesting of your outstanding
    stock options described above will be accelerated by a further
    12 months, provided that you comply with all surviving
    provisions of this letter and the Employment, Confidential
    Information and Invention Assignment Agreements and execute a
    full general release, releasing all claims, known or unknown,
    that you may have against the Company arising out of or any way
    related to you employment or termination of employment with the
    Company. In the event of such termination all other obligations
    of the Company to you pursuant to this letter other than the
    severance payments described below, will become automatically
    terminated and completely extinguished.

 

    A Change of Control means any one of the following occurrences:

 

    (i) Any “person” (as such term is used in
    Sections 13(d) and 14(d) of the Securities Exchange Act of
    1934 (the “Exchange Act”), other than a trustee or
    other fiduciary holding securities of SGX under an employee
    benefit plan of SGX, becomes the “beneficial owner”
    (as defined in
    Rule 13d-3
    promulgated under the Exchange Act), directly or indirectly, of
    the securities of SGX representing more than 50% of (a) the
    outstanding shares of common stock of SGX or (b) the
    combined voting power of SGX’ then-outstanding
    securities; or

 

    (ii) The sale or disposition of all or substantially all of
    SGX’ assets (or any transaction having similar effect is
    consummated) other than to an entity of which SGX owns at least
    50% of the Voting Stock so long as the sale or disposition is
    not under duress of SGX’ financial hardship; or

 

    (iii) SGX is party to a merger or consolidation that
    results in the holders of voting securities of SGX outstanding
    immediately prior thereto failing to continue to represent
    (either by remaining outstanding or by being converted into
    voting securities of the surviving entity) less than 50% of the
    combined voting power of the voting securities of SGX or such
    surviving entity outstanding immediately after such merger or
    consolidation.

 

    In the event that SGX terminates your employment without cause,
    notification may be at any time on thirty (30) days’
    advance written notice to you. In the event of such termination,
    you will receive a severance payment equivalent to twelve months
    of your Base Salary then in effect on the date of termination
    (the “Severance Payment”) payable in accordance with
    SGX’ regular payroll cycle, provided that you:
    (a) execute a full general release, releasing all claims,
    known or unknown, that you may have against SGX arising out of
    or any way related to your employment or termination of
    employment with SGX; and (b) agree to act as a consultant
    for SGX for up to a maximum of sixty (60) days, without
    additional compensation, if requested to do so by SGX. All other
    SGX obligations (other than the change of control acceleration
    of stock provisions described above) pursuant to your employment
    will become automatically terminated and completely extinguished.

 

    This offer is contingent upon the following:

 

			
	 	    • 
	
    Signing a copy of our Employment, Confidential Information and
    Invention Assignment Agreement, this is attached for your
    information.

 

    

 

    Terence A. Rugg, M.D.

    4 of 5

 

 

			
	 	    • 
	
    Conforming to the Immigration Reform and Control Act of 1986.
    Please bring with you, on your start date, the original of one
    of the documents noted in List A on the I-9 form attached or one
    document from List B and one document from List C. If you do not
    have the originals of any of these documents, please call Human
    Resources immediately. Please do not complete or sign the I-9
    until you begin employment. You will need to provide sufficient
    documentation to show proof of eligibility for employment in the
    United States.

	 
	 	    • 
	
    Receiving satisfactory results from your background check and
    drug screening, as well as any other pre-employment testing that
    may be required due to the specific nature of the industry
    and/or your
    position.

 

    It is the Company’s policy to fully respect the proprietary
    and confidential information rights of your previous employers.
    You are not expected to disclose, nor are you allowed to use for
    the Company’s purposes, any confidential or proprietary
    information you may have acquired as a result of previous
    employment.

 

    If you accept our offer, your employment with SGX
    Pharmaceuticals will be “at will.” This means your
    employment is not for any specified period of time and can be
    terminated by you at any time for any reason. Likewise, SGX
    Pharmaceuticals may terminate the employment relationship at any
    time, with or without cause or advance notice. In addition, SGX
    Pharmaceuticals reserves the right to modify your position or
    duties to meet business needs, providing such changes do not
    result in a decrease in either your base salary or title, and
    also providing that such changes are broadly within your sphere
    of expertise. Any change to the at-will employment relationship
    must be specified in a written agreement signed by you and an
    officer of SGX Pharmaceuticals.

 

    I am pleased to extend this offer to you and look forward to
    your acceptance. Please sign and return the attached copy of
    this offer letter as soon as possible, but within at least five
    days of receipt, to indicate your agreement with the terms of
    this offer.

 

    Once signed by you, but contingent upon satisfactory results
    from your background check and drug test, this letter, the
    Employment, Confidential Information and Invention Assignment
    Agreement, will constitute the complete agreement between you
    and SGX Pharmaceuticals, Inc. regarding employment matters and
    will supersede all prior written or oral agreements or
    understandings on these matters. This letter may only be
    modified by a written agreement signed by you and an officer of
    SGX Pharmaceuticals, Inc.

 

    We hope you will join us on or before August 14, 2006.
    Please contact Kristine Figueroa in Human Resources if you have
    any questions. This offer is valid until the end of business
    on July 21, 2006.

 

    

 

    Terence A. Rugg, M.D.

    5 of 5

 

    I feel you will be able to make an immediate contribution to our
    efforts, and I think you will enjoy the rewards of working for
    an innovative, fast-paced organization.

 

    Sincerely,

 

    /s/  Mike
    Grey

    

    Mike Grey

    President and CEO

 

    Attachments:

 

			
	 	    • 
	
    Copy of Offer Letter

	 
	 	    • 
	
    I-9

	 
	 	    • 
	
    Employment, Confidential Information And Invention Assignment
    Agreement

	 
	 	    • 
	
    Consumer Report Disclosure and Authorization

	 
	 	    • 
	
    Background check release form

	 
	 	    • 
	
    Forensic Drug Testing Custody and Control Form

	 
	 	    • 
	
    Quest Diagnostic location sheet

	 
	 	    • 
	
    Summaries: Your rights under the Fair Employment Credit
    Reporting Act and California Civil Code 1786.22

 

 

    I have read and accept the terms and conditions of employment
    as described in this offer letter and will start my employment
    on 14 August, 2006.

 

    Print Name: Terence Anthony Rugg

 

    Signature: /s/ Terence Anthony Rugg Date: July 22, 2006

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