Document:

exv10w1

Exhibit 10.1

COMMON STOCK AND WARRANT PURCHASE

AGREEMENT

Dated as of February 4, 2010

by and among

ECHO THERAPEUTICS, INC.

and

THE PURCHASERS LISTED ON EXHIBIT A

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	ARTICLE I     Purchase and Sale of Common Stock and Warrants	 	 	1	 
	Section 1.1
	 	Purchase and Sale of Common Stock and Warrants	 	 	1	 
	Section 1.2
	 	Purchase Price and Closings	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II     Representations and Warranties	 	 	2	 
	Section 2.1
	 	Representations and Warranties of the Company	 	 	2	 
	Section 2.2
	 	Representations and Warranties of the Purchasers	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE III     Covenants	 	 	17	 
	Section 3.1
	 	Securities Compliance	 	 	17	 
	Section 3.2
	 	Registration and Listing	 	 	18	 
	Section 3.3
	 	Subsequent Variable Rate Transactions	 	 	18	 
	Section 3.4
	 	Inspection Rights	 	 	18	 
	Section 3.5
	 	Compliance with Laws	 	 	18	 
	Section 3.6
	 	Keeping of Records and Books of Account	 	 	19	 
	Section 3.7
	 	Reporting Requirements	 	 	19	 
	Section 3.8
	 	Other Agreements	 	 	19	 
	Section 3.9
	 	Use of Proceeds	 	 	19	 
	Section 3.10
	 	Reporting Status	 	 	19	 
	Section 3.11
	 	Disclosure of Material Information	 	 	19	 
	Section 3.12
	 	Form D	 	 	20	 
	Section 3.13
	 	Blue Sky	 	 	20	 
	Section 3.14
	 	No Integrated Offerings	 	 	20	 
	Section 3.15
	 	Disclosure of Transaction	 	 	20	 
	Section 3.16
	 	Pledge of Securities	 	 	20	 
	Section 3.17
	 	Sarbanes-Oxley Act	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE IV     Conditions	 	 	21	 
	Section 4.1
	 	Conditions Precedent to the Obligation of the Company to Close
and to Sell the Securities	 	 	20	 
	Section 4.2
	 	Conditions Precedent to the Obligation of the Purchasers to
Close and to Purchase the Securities	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE V     Certificate Legend	 	 	23	 
	Section 5.1
	 	Legend	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE VI     Indemnification	 	 	24	 
	Section 6.1
	 	Company Indemnity	 	 	24	 
	Section 6.2
	 	Indemnification Procedure	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE VII     Miscellaneous	 	 	25	 
	Section 7.1
	 	Fees and Expenses	 	 	25	 
	Section 7.2
	 	Specific Performance; Consent to Jurisdiction; Venue	 	 	26	 
	Section 7.3
	 	Entire Agreement; Amendment	 	 	26	 
	Section 7.4
	 	Notices	 	 	26	 
	Section 7.5
	 	Waivers	 	 	27	 

 

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	Section 7.6

	 	Headings
	 	 	27	 
	Section 7.7

	 	Successors and Assigns
	 	 	27	 
	Section 7.8

	 	No Third Party Beneficiaries
	 	 	28	 
	Section 7.9

	 	Governing Law
	 	 	28	 
	Section 7.10

	 	Survival
	 	 	28	 
	Section 7.11

	 	Counterparts
	 	 	28	 
	Section 7.12

	 	Publicity
	 	 	28	 
	Section 7.13

	 	Severability
	 	 	28	 
	Section 7.14

	 	Further Assurances
	 	 	28	 

 

 

COMMON STOCK AND WARRANT PURCHASE AGREEMENT

     This COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”), dated as of
February 4, 2010, is entered into by and among Echo Therapeutics, Inc., a Delaware corporation (the
"Company”), and the purchasers listed on Exhibit A hereto (each a
"Purchaser” and collectively, the “Purchasers”), for the purchase and sale of
shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) by the
Purchasers.

     The parties hereto agree as follows:

ARTICLE I

PURCHASE AND SALE OF COMMON STOCK AND WARRANTS

          Section 1.1 Purchase and Sale of Common Stock and Warrants.

          (a) Upon the following terms and conditions, the Company shall issue and sell to the
Purchasers, and the Purchasers shall purchase from the Company, shares of Common Stock (the
"Shares”) at a price per share of $1.50 (the “Per Share Purchase Price”) for an
aggregate purchase price of up to Five Million Dollars ($5,000,000) (the “Purchase Price”);
provided, however, that in the event that this offering is oversubscribed, the Company may, in it
sole discretion, increase the Purchase Price up to twenty percent (20%). Each Purchaser shall pay
the portion of the Purchase Price and shall receive that number of shares set forth opposite its
name on Exhibit A hereto. The Company and the Purchasers are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities registration
afforded by Section 4(2) of the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the “Securities Act”), including Regulation D
(“Regulation D”), and/or upon such other exemption from the registration requirements of
the Securities Act as may be available with respect to any or all of the investments to be made
hereunder.

          (b) Upon the following terms and conditions, each of the Purchasers shall be issued Warrants,
in the form attached hereto as Exhibit B (the “Warrants”), to purchase the number
of shares of Common Stock equal to fifty percent (50%) of the number of Shares purchased by each
Purchaser pursuant to the terms of this Agreement, as set forth opposite such Purchaser’s name on
Exhibit A hereto. The consideration for the Warrants shall be $0.0001 per Warrant and
shall be deemed to be included in the Per Share Purchase Price. The Warrants shall expire five (5)
years following the Closing Date at which such Warrants were issued and shall have an initial
exercise price per share equal to $2.25, subject to appropriate adjustment as set forth in the
Warrants. Any shares of Common Stock issuable upon exercise of the Warrants (and such shares when
issued) are herein referred to as the “Warrant Shares.” The Shares, the Warrants and the
Warrant Shares are sometimes collectively referred to herein as the “Securities.”

          Section 1.2 Purchase Price and Closings. In consideration of and in express reliance
upon the representations, warranties, covenants, terms and conditions of this Agreement,

 

 

the Company agrees to issue and sell to the Purchasers and, in consideration of and in express reliance
upon the representations, warranties, covenants, terms and conditions of this Agreement, the
Purchasers, severally but not jointly, agree to purchase the number of Shares and Warrants set
forth opposite their respective names on Exhibit A. The Securities shall be sold and
funded in a closing (the “Closing”) that shall take place on or about February 9, 2010 (the
"Closing Date”); provided, however, that in the event that the Company receives an
aggregate Purchase Price of less than Three Million Dollars at the Closing, it may hold one or more
additional closings until it has received the maximum aggregate Purchase Price pursuant to Section
1.1(a) above. The Closing shall take place at the offices of the Company, 10 Forge Parkway,
Franklin, MA 02038; provided, that all of the conditions set forth in Article IV hereof and
applicable to the Closing shall have been fulfilled or waived in accordance herewith. At the
Closing and upon receipt by the Company of the appropriate purchase price from each Purchaser
(i.e., a purchase price equal to the number of Shares to be purchased by such Purchaser multiplied
by the Per Share Purchase Price), the Company shall deliver or cause to be delivered to each such
Purchaser (x) a certificate for the number of Shares set forth opposite the name of such Purchaser
on Exhibit A hereto, (y) a Warrant to purchase such number of shares of Common Stock as is
set forth opposite the name of such Purchaser on Exhibit A attached hereto and (z) any
other documents required to be delivered pursuant to Article IV hereof. Each Purchaser shall
deliver each of the documents required to be delivered by it pursuant to Article IV hereof as well
as its portion of the Purchase Price by wire transfer to the Company.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

          Section 2.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers as follows, as of the date hereof (or other applicable
date as stated in this Section 2.1) and the Closing Date, except as set forth on the Schedule of
Exceptions attached hereto with each numbered Schedule corresponding to the section number herein:

          (a) Organization, Good Standing and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power to own, lease and operate its properties and assets and to conduct
its business as it is now being conducted. The Company does not have any Subsidiaries (as defined
in Section 2.1(g)) or own securities of any kind in any other entity except as set forth on
Schedule 2.1(g) hereto. Each such Subsidiary is duly incorporated or formed, as the case
may be, validly existing and in good standing under the laws of the state opposite its name on
Schedule 2.1(g) and has the requisite power to own, lease and operate its properties and assets and
to conduct its business as it is now being conducted. The Company and each such Subsidiary is duly
qualified to do business as a foreign corporation and is in good standing in
every jurisdiction in which the nature of the business conducted or property owned by it makes
such qualification necessary except for any jurisdiction(s) (alone or in the aggregate) in which
the failure to be so qualified will not have a Material Adverse Effect. For the purposes of this
Agreement, “Material Adverse Effect” means any effect on the business, results of
operations, assets, condition or prospects (financial or otherwise) of the Company that is material
and

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adverse to the Company and its Subsidiaries (as hereafter defined), individually, or taken as a
whole, and/or any condition, circumstance, or situation that would prohibit or otherwise materially
interfere with the ability of the Company from entering into and performing any of its obligations
under the Transaction Documents (as defined below) in any material respect; provided,
however, that Material Adverse Effect shall not be deemed to include: (i) changes in
applicable law or (ii) any effect resulting from the public announcement of the transactions
contemplated by this Agreement or the consummation of the transactions contemplated by this
Agreement.

          (b) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Warrants, and any and all other documents
ancillary to the transactions contemplated hereby and thereby (all of the foregoing documents
collectively called the “Transaction Documents”), and to issue and sell the Securities in
accordance with the terms hereof and to complete the transactions contemplated by the Transaction
Documents. The execution, delivery and performance of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action. No further consent or authorization of the Company,
its Board of Directors or stockholders is required. When executed and delivered by the Company,
each of the Transaction Documents shall constitute a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

          (c) Capitalization. The authorized capital stock of the Company as of the date hereof
is set forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Common Stock
and any other outstanding security of the Company have been duly and validly authorized and validly
issued, fully paid and nonassessable and were issued in accordance with the registration or
qualification provisions of the Securities Act, or pursuant to valid exemptions therefrom. Except
as provided in this Agreement or as set forth on Schedule 2.1(c) hereto, no shares of Common Stock
or any other security of the Company are entitled to preemptive rights, registration rights, rights
of first refusal or similar rights and there are no outstanding options, warrants, scrip, rights to
subscribe to, call or commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company. Furthermore, except (i) as set forth
in this Agreement, and (ii) as set forth on Schedule 2.1(c) hereto, there are no contracts,
commitments, understandings, or arrangements by which the Company or any of its Subsidiaries are or
may become bound to issue additional shares of the capital stock of the Company or options,
securities or rights convertible into shares of capital stock of the Company. Except for customary
transfer restrictions contained in agreements entered into by the Company in order to sell
restricted securities and set forth on Schedule 2.1(c) hereto, the Company is not a party to or
bound by any agreement or understanding granting registration or anti-dilution rights to any person
with respect to any of its equity or debt securities. Except as set forth on Schedule 2.1(c), the
Company is not a party to, and neither it nor its Subsidiaries nor any officers or directors of the
Company or its Subsidiaries has no actual
or constructive knowledge of, any agreement or understanding restricting the voting or
transfer of any shares of the capital stock of the Company. Except as disclosed on Schedule
2.1(c), (i) there are no outstanding debt securities, or other form of material debt of the Company
or any of its Subsidiaries, (ii) there are no contracts, commitments, understandings, agreements or
arrangements under which the Company or any of its Subsidiaries is required to register the sale

3

 

of any of their securities under the Securities Act, (iii) there are no outstanding securities of the
Company or any of its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings, agreements or arrangements by which the Company or
any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its
Subsidiaries, (iv) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities, (v) the Company does not have
any stock appreciation rights or “phantom stock” plans or agreements, or any similar plan or
agreement and (vi) as of the date of this Agreement, to the Company’s and each of its Subsidiaries’
Knowledge, no Person (as defined below) or group of related Persons beneficially owns (as
determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the “Exchange Act”)) or has the
right to acquire by agreement with or by obligation binding upon the Company, beneficial ownership
of in excess of 5% of the Common Stock except as disclosed on Schedule 2.1(c). Any Person with any
right to purchase securities of the Company that would be triggered as a result of the transactions
contemplated hereby or by any of the other Transaction Documents has waived such rights in writing
or the time for the exercise of such rights has passed. Except as set forth on Schedule 2.1(c),
there are no options, warrants or other outstanding securities of the Company (including, without
limitation, any equity securities issued pursuant to any Company plan) the vesting of which will be
accelerated by the transactions contemplated hereby or by any of the other Transaction Documents.
Except as set forth in Schedule 2.1(c), none of the transactions contemplated by this Agreement or
by any of the other Transaction Documents shall cause, directly or indirectly, the acceleration of
vesting of any options issued pursuant the Company’s stock option plans. For purposes of this
Agreement, “Knowledge” means (i) the actual knowledge of all of the Company’s executive
officers, Patrick Mooney, Harry Mitchell and Kimberly Burke, and (ii) with respect to each
Subsidiary, all of the executive officers of such Subsidiary. For purposes of this Agreement,
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.

          (d) Issuance of Securities. The Securities to be issued at the Closing have been duly
authorized by all necessary corporate action and, when issued in accordance with the terms hereof
and the Warrants, the Shares and the Warrant Shares will be validly issued, fully paid and
nonassessable and free and clear of all liens, encumbrances and rights of refusal of any kind and
the holders shall be entitled to all rights accorded to a holder of Common Stock. The Company
shall reserve that number of shares of its common stock sufficient to issue the Shares and the
Warrant Shares without the necessity of having to authorize additional shares of common stock.

          (e) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby do not and will not (i) violate any provision of the Company’s
Certificate of Incorporation (the “Certificate”) or Bylaws (the “Bylaws”),
each as amended to date, or any Subsidiary’s comparable charter documents, (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation

4

 

to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries’ respective properties or assets are bound, or
(iii) result in a violation of any federal, state or local statute, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected. Neither the Company nor any of its Subsidiaries is required
under federal, state, foreign or local law, rule or regulation to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental agency in order for
it to execute, deliver or perform any of its obligations under the Transaction Documents or issue
and sell the Securities in accordance with the terms hereof.

          (f) Commission Documents, Financial Statements. The Common Stock of the Company is
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and, except as disclosed on
Schedule 2.1(f) hereto, the Company has timely filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Securities and Exchange
Commission (the “Commission”) pursuant to the reporting requirements of the Exchange Act,
including pursuant to Sections 13, 14 or 15(d) thereof (all of the foregoing and all exhibits
included therein and financial statement and schedules thereto, including filings incorporated by
reference therein being referred to herein as the “Commission Documents”). At the times of
their respective filings, all Commission Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and, to the knowledge of the Company, the Commission Documents at the time of their
respective filings did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. As of their respective
dates, the financial statements of the Company included in the Commission Documents complied as to
form and substance in all material respects with applicable accounting requirements set forth in
GAAP and GAAS and the published rules and regulations of the Commission or other applicable rules
and regulations with respect thereto. Such financial statements, together with the related notes
and schedules thereto, have been prepared in accordance with GAAP and GAAS applied on a consistent
basis during the periods involved (except (i) as may be otherwise indicated in such financial
statements or the Notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements), and fairly present in
all material respects the financial position of the Company and its Subsidiaries as of the dates
thereof and the results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments). The Company is in compliance
with all applicable state securities laws and regulations (“Blue Sky Laws”).

          (g) Subsidiaries. The Commission Documents set forth each Subsidiary of the Company,
showing the jurisdiction of its incorporation or organization and showing the percentage of each
person’s ownership of the outstanding stock or other interests of such
Subsidiary. For the purposes of this Agreement, “Subsidiary” shall mean any
corporation or other entity of which at least a majority of the securities or other ownership
interest having ordinary voting power (absolutely or contingently) for the election of directors or
other persons performing similar functions are at the time owned directly or indirectly by the
Company and/or any of its other Subsidiaries. All of the outstanding shares of capital stock of
each Subsidiary

5

 

have been duly authorized and validly issued, and are fully paid and nonassessable.
Except as set forth in Schedule 2.1(g), there is no outstanding preemptive, conversion or
other rights, options, warrants or agreements granted or issued by or binding upon any Subsidiary
for the purchase or acquisition of any shares of capital stock of any Subsidiary or any other
securities convertible into, exchangeable for or evidencing the rights to subscribe for any shares
of such capital stock. Neither the Company nor any Subsidiary is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any shares of the capital
stock of any Subsidiary or any convertible securities, rights, warrants or options of the type
described in the preceding sentence except as set forth on Schedule 2.1(g) hereto. Except
as set forth in the Schedule 2.1(g), neither the Company nor any Subsidiary is party to,
nor has any Knowledge of, any agreement restricting the voting or transfer of any shares of the
capital stock of any Subsidiary.

          (h) No Material Adverse Change. Since September 30, 2009, the Company has not
experienced or suffered any Material Adverse Effect.

          (i) No Undisclosed Liabilities. Except as disclosed on Schedule 2.1(i)
hereto, since September 30, 2009, neither the Company nor any of its Subsidiaries has incurred any
liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or
unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a
balance sheet of the Company or any Subsidiary (including the notes thereto) in conformity with
GAAP, other than those incurred in the ordinary course of the Company’s or its Subsidiaries
respective businesses or which, individually or in the aggregate, will not have a Material Adverse
Effect to the Company’s Knowledge. Since September 30, 2009, except as disclosed in on
Schedule 2.1(i) hereto, none of the Company or any of its Subsidiaries has participated in
any transaction material to the condition of the Company which is outside of the ordinary course of
its business.

          (j) No Undisclosed Events or Circumstances. Since September 30, 2009, except as
disclosed on Schedule 2.1(j) hereto, no event or circumstance has occurred or exists with
respect to the Company or its Subsidiaries or their respective businesses, properties, operations
or financial condition, which, under applicable law, rule or regulation, requires public disclosure
or announcement by the Company but which has not been so publicly announced or disclosed and which,
individually or in the aggregate, would have a Material Adverse Effect.

          (k) Indebtedness. Schedule 2.1(k) hereto sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this Agreement,
"Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess
of $100,000 (other than trade accounts payable incurred in the ordinary course of business), (b)
all guaranties, endorsements and other contingent obligations in respect of liabilities for
borrowed money of others in excess of $100,000, whether or not the same are or should be reflected
in the
Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business;
(c) the present value of any lease payments in excess of $25,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness or any liabilities (other than accrued liabilities or liabilities

6

 

referenced in subsections (a) through (c) above) that are not otherwise disclosed herein but which
in the aggregate total $100,000.

          (l) Title to Assets. Each of the Company and the Subsidiaries has good and marketable
title to all of its real and personal property reflected in the Commission Documentsthat
is material to the business of the Company, free and clear of any mortgages, pledges, charges,
liens, security interests or other encumbrances, except for those indicated on Schedule
2.1(l) hereto or such that, individually or in the aggregate, do not cause a Material Adverse
Effect, and except for Permitted Liens. All such leases of the Company and each of its
Subsidiaries are valid and subsisting and in full force and effect in all material respects.
"Permitted Liens” means (i) statutory liens for taxes, assessments and other governmental
charges which are not yet due and payable or are due but not delinquent or are being contested in
good faith by appropriate proceedings, (ii) statutory or common law liens to secure landlords,
sublandlords, licensors or sublicensors under leases or rental agreements, (iii) deposits or
pledges made in connection with, or to secure payment of, workers’ compensation, unemployment
insurance, old age pension or other social security programs mandated under applicable laws, (iv)
statutory or common law liens in favor of carriers, warehousemen, mechanics, workmen, repairmen and
materialmen to secure claims for labor, materials or supplies and other like liens, (v)
restrictions on transfer of securities imposed by applicable state and federal securities laws,
(vi) any other encumbrance affecting any asset which does not materially impede or otherwise affect
the ownership or operation of such asset, (vii) liens resulting from a filing by a lessor as a
precautionary filing for a true lease, (viii) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business, (ix) vendor’s liens to
secure payment, or (x) rights or claims of customers or tenants under licenses or leases.
Notwithstanding the foregoing, no Permitted Lien either individually or in the aggregate shall or
does constitute a Material Adverse Effect.

          (m) ERISA. Except as set forth in the Commission Documents, no liability to the
Pension Benefit Guaranty Corporation has been incurred with respect to any Plan by the Company or
any of its Subsidiaries which is or would be materially adverse to the Company and its
Subsidiaries. The execution and delivery of this Agreement and the issuance and sale of the
Securities will not involve any transaction which is subject to the prohibitions of Section 406 of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or in connection
with which a tax could be imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as
amended, provided that, if any of the Purchasers, or any person or entity that owns a beneficial
interest in any of the Purchasers, is an “employee pension benefit plan” (within the meaning of
Section 3(2) of ERISA) with respect to which the Company is a “party in interest” (within the
meaning of Section 3(14) of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA, if
applicable, are met. As used in this Section 2.1(cc), the term “Plan” shall mean an “employee
pension benefit plan” (as defined in Section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the
Company or any Subsidiary or by any trade or business, whether or not incorporated, which,
together with the Company or any Subsidiary, is under common control, as described in Section
414(b) or (c) of the Code.

7

 

          (n) Compliance with Law. The business of the Company and the Subsidiaries has been
and is presently being conducted in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, except as set forth on Schedule
2.1(n) hereto or such that, individually or in the aggregate, the noncompliance therewith would
not reasonably be expected to have a Material Adverse Effect. The Company and each of its
Subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of its business as now being conducted by it
unless the failure to possess such franchises, permits, licenses, consents and other governmental
or regulatory authorizations and approvals, individually or in the aggregate, would have a Material
Adverse Effect.

          (o) Taxes. Except as set forth on Schedule 2.1(o) hereto, and except for
matters that would not, individually or in the aggregate, have a Material Adverse Effect, the
Company and each of the Subsidiaries has accurately prepared and filed all federal, state and other
tax returns required by law to be filed by it, has paid all taxes shown to be due and all
additional assessments, and adequate provisions have been and are reflected in the financial
statements of the Company and the Subsidiaries for all current taxes and other charges to which the
Company or any Subsidiary is subject and which are not currently due and payable. Except as
disclosed on Schedule 2.1(o) hereto, none of the federal income tax returns of the Company
or any Subsidiary has been audited by the Internal Revenue Service. The Company has no Knowledge
of any additional assessments, adjustments or contingent tax liability (whether federal or state)
of any nature whatsoever, whether pending or threatened against the Company or any Subsidiary for
any period, nor of any basis for any such assessment, adjustment or contingency.

          (p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto, the Company
has not employed any broker or finder or incurred any liability for any brokerage or investment
banking fees, commissions, finders’ structuring fees, financial advisory fees or other similar fees
in connection with the Transaction Documents.

          (q) Disclosure. Neither this Agreement or the Schedules hereto nor any other
documents, certificates or instruments furnished to the Purchasers by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary in order to make
the statements made herein or therein, in the light of the circumstances under which they were made
herein or therein, not misleading.

          (r) Operation of Business. The Company and each of the Subsidiaries owns or possesses
the rights to use all patents, trademarks, domain names (whether or not registered) and any
patentable improvements or copyrightable derivative works thereof, websites and intellectual
property rights relating thereto, service marks, trade names, copyrights, licenses and
authorizations which, to the Company’s Knowledge, are necessary for the conduct of its business as
now conducted, which the failure to so have would have a Material Adverse Effect. Except as
set forth on Schedule 2.1(r), neither the Company nor any Subsidiary has received
written notice that the intellectual property rights used by the Company or any Subsidiary, and
necessary for their respective business, violates or infringes upon the rights of any third party.

8

 

          (s) Books and Records; Internal Accounting Controls; Sarbanes-Oxley. The records and
documents of the Company and its Subsidiaries accurately reflect in all material respects the
information relating to the business of the Company and its Subsidiaries, the location and
collection of their assets, the nature and amount of their liabilities, and the nature of all
transactions giving rise to the obligations or accounts receivable of the Company or any
Subsidiary. The Company and its officers are in material compliance with all provisions of the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and each
of its Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization, (iv)
the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate actions are taken with respect to any differences and (v) accounts, notes and other
receivables and inventory are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis. Except as set forth on
Schedule 2.1(s) hereto, there are no significant deficiencies or material weaknesses in the
design or operation of internal controls over financial reporting that would reasonably be expected
to materially and adversely affect the Company’s ability to record, process, summarize and report
financial information, and there is no fraud, whether or not material, that involves management or,
to the Knowledge of the Company, other employees who have a significant role in the Company’s
internal controls and the Company has provided to the Purchaser copies of any written materials
relating to the foregoing.

          (t) Material Agreements. Except for the Transaction Documents (with respect to clause
(i) of this Section 2.1(t) only) or as set forth on Schedule 2.1(t) hereto, or as would
not have a Material Adverse Effect, (i) to the Company’s Knowledge, the Company and each of its
Subsidiaries have performed all obligations required to be performed by them to date under any
written or oral contract, instrument, agreement, commitment, obligation, plan or arrangement, filed
or required to be filed with the Commission (the “Material Agreements”), (ii) neither the
Company nor any of its Subsidiaries has received any notice of default under any Material Agreement
and, (iii) to the Company’s Knowledge, neither the Company nor any of its Subsidiaries is in
default under any material provision of any Material Agreement.

          (u) Transactions with Affiliates. Except as set forth on Schedule 2.1(u)
hereto, there are no loans, leases, agreements, contracts, royalty agreements, management contracts
or arrangements or other continuing or proposed transactions exceeding $50,000 in value between (a)
the Company, any Subsidiary or any of their respective customers or suppliers on the one hand, and
(b) on the other hand, any officer, employee, consultant or director of the Company, or any of its
Subsidiaries (except for reimbursements to such persons for reasonable expenses incurred on behalf
of the Company or any Subsidiary, or arrangements entered into by and between any such person and
the Company or any Subsidiary as part of the normal and customary terms of such person’s employment
or services as a director or consultant with the
Company or any of its Subsidiaries), or any person owning any capital stock of the Company or
any Subsidiary or any member of the immediate family of such officer, employee, consultant,
director or stockholder or any corporation or other entity controlled by such officer, employee,
consultant, director or stockholder, or a member of the immediate family of such officer,

9

 

employee, consultant, director or stockholder which, in each case, is required to be disclosed in the
Commission Documents or in the Company’s most recently filed definitive proxy statement on Schedule
14A, that is not so disclosed in the Commission Documents or in such proxy statement.

          (v) Securities Act of 1933. Subject to the accuracy and completeness of the
representations and warranties of the Purchasers contained in the Transaction Documents, the
Company has complied and will continuously comply with all applicable federal and state securities
laws in connection with the offer, issuance and sale of the Securities hereunder. Neither the
Company nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or
solicit offers to buy any of the Securities or similar securities to, or solicit offers with
respect thereto from, or enter into any negotiations relating thereto with, any person, or has
taken or will take any action so as to bring the issuance and sale of any of the Securities under
the registration provisions of the Securities Act and applicable state securities laws, and neither
the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of any of the Securities.

          (w) Governmental Approvals. Except as set forth on Schedule 2.1(w) hereto,
and except for the filing of any notice prior or subsequent to the Closing that may be required
under applicable state and/or federal securities laws (which if required, shall be filed on a
timely basis), no authorization, consent, approval, license, exemption of, filing or registration
with any court or governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is or will be necessary for, or in connection with, the execution or delivery
of the Securities, or for the performance by the Company of its obligations under the Transaction
Documents except for such authorizations, consents, approvals, licenses, exemptions, filings or
registrations the Company’s failure of which to obtain would not, individually or in the aggregate,
constitute a Material Adverse Effect.

          (x) Employees. Neither the Company nor any Subsidiary has any collective bargaining
arrangements or agreements covering any of its employees, except as set forth on Schedule
2.1(x) hereto. Except as set forth on Schedule 2.1(x) hereto, neither the Company nor
any Subsidiary has any employment contract, agreement regarding proprietary information,
non-competition agreement, non-solicitation agreement, confidentiality agreement, or any other
similar contract or restrictive covenant, relating to the right of any officer, employee or
consultant to be employed or engaged by the Company or such Subsidiary. Since September 30, 2009,
no officer, consultant or key employee of the Company or any Subsidiary whose termination, either
individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, has
terminated, or indicated to the Company his or her intent to terminate, his or her employment or
engagement with the Company or any Subsidiary.

          (y) Environmental Compliance. Except as disclosed in the Commission Documents or on
Schedule 2.1(y) hereto, the Company and each of its Subsidiaries have
obtained all material approvals, authorization, certificates, consents, licenses, orders and
permits or other similar authorizations of all governmental authorities, or from any other person,
that are required under any Environmental Laws, except where failure to obtain such material
approvals, authorization, certificates, consents, licenses, orders and permits or other similar
authorizations

10

 

would not individually or in the aggregate have a Material Adverse Effect.
“Environmental Laws” shall mean all applicable laws relating to the protection of the environment
including, without limitation, all requirements pertaining to reporting, licensing, permitting,
controlling, investigating or remediating emissions, discharges, releases or threatened releases of
hazardous substances, chemical substances, pollutants, contaminants or toxic substances, materials
or wastes, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants, contaminants or
toxic substances, material or wastes, whether solid, liquid or gaseous in nature. Except as set
forth in the Commission Documents or on Schedule 2.1(y) hereto, the Company has all
necessary governmental approvals required under all Environmental Laws and used in its business or
in the business of any of its Subsidiaries, except for such instances as would not individually or
in the aggregate have a Material Adverse Effect. Except as disclosed in the Commission Documents,
the Company and each of its Subsidiaries are also in compliance with all other limitations,
restrictions, conditions, standards, requirements, schedules and timetables required or imposed
under all Environmental Laws, except where failure to be in compliance would not individually or in
the aggregate have a Material Adverse Effect. Except as disclosed in the Commission Documents or
for such instances as would not individually or in the aggregate have a Material Adverse Effect,
there are no past or present events, conditions, circumstances, incidents, actions or omissions
relating to or in any way affecting the Company or its Subsidiaries that violate or would be
reasonably likely to violate any Environmental Law after the Closing or that would be reasonably
likely to give rise to any environmental liability, or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing, study or investigation (i) under any Environmental Law
or (ii) based on or related to the manufacture, processing, distribution, use, treatment, storage
(including, without limitation, underground storage tanks), disposal, transport or handling, or the
emission, discharge, release or threatened release of any hazardous substance.

          (z) Labor Relations. Except as set forth in the Commission Documents or as could not
reasonably be expected to have a Material Adverse Effect, (i) neither the Company nor any of its
Subsidiaries is engaged in any unfair labor practice, (ii) there is no strike, labor dispute,
slowdown or stoppage pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries, and (iii) neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or contract.

          (aa) Absence of Certain Developments. Except as disclosed on Schedule 2.1(aa)
hereto, since September 30, 2009, neither the Company nor any Subsidiary has:

               (i) issued or become obligated to issue any stock, bonds or other corporate securities or any
right, options or warrants with respect thereto other than under the Company’s stock option plan(s)
and otherwise in the ordinary course of business;

               (ii) borrowed or become obligated to borrow any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities incurred in the ordinary course of
business which are comparable in nature and amount to the current liabilities incurred in the
ordinary course of business during the comparable portion of its prior

11

 

fiscal year, as adjusted to
reflect the current nature and volume of the Company’s or such Subsidiary’s business;

               (iii) discharged or satisfied any lien or encumbrance or paid any obligation or liability
(absolute or contingent), other than Permitted Liens and current liabilities paid in the ordinary
course of business;

               (iv) declared or made, or become obligated to make, any payment or distribution of cash or
other property to stockholders with respect to its stock, or purchased or redeemed, or made any
agreements so to purchase or redeem, any shares of its capital stock other than under any equity
incentive plans of the Company or any pre-existing cashless exercise rights issued in connection
with a prior financing, which plans and/or prior financing(s) are disclosed on Schedule
2.1(aa);

               (v) sold, assigned or transferred, or become obligated to sell, assign or transfer, any other
tangible assets, or canceled any debts or claims, except in the ordinary course of business;

               (vi) sold, assigned or transferred, or become obligated to sell, assign or transfer, any
patent rights, trademarks, trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights necessary for the conduct of its business activities;

               (vii) suffered any material losses or waived, or agreed to waive, any rights of material
value, whether or not in the ordinary course of business;

               (viii) made any changes in employee compensation except in the ordinary course of business and
consistent with past practices;

               (ix) made capital expenditures or commitments therefor that aggregate in excess of $100,000;

               (x) made charitable contributions or pledges in excess of $10,000 in the aggregate;

               (xi) experienced any material problems with labor or management in connection with the terms
and conditions of their employment; or

               (xii) entered into an agreement, written or otherwise, to take any of the foregoing actions.

          (bb) Investment Company Act Status. The Company is not, and as a result of and
immediately upon the Closing will not be, an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940, as amended.

12

 

          (cc) Independent Nature of Purchasers. The Company acknowledges that the obligations
of each Purchaser under the Transaction Documents are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under the Transaction Documents and the Company shall not be
excused from performance of its obligations to any Purchaser under the Transaction Documents as a
result of nonperformance or breach by any other Purchaser. The Company acknowledges that the
decision of each Purchaser to purchase Securities pursuant to this Agreement has been made by such
Purchaser independently of any other purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties, liabilities,
results of operations, condition (financial or otherwise) or prospects of the Company or of its
Subsidiaries which may have made or given by any other Purchaser or by any agent or employee of any
other Purchaser. The Company acknowledges that nothing contained herein, or in any Transaction
Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents.
The Company acknowledges that each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation, the rights arising out of this Agreement or out of the
other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as
an additional party in any proceeding for such purpose.

          (dd) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties herein, neither the Company, nor any of its affiliates, nor any person acting on its
or their behalf, has directly or indirectly made any offers or sales of any security or solicited
any offers to buy any security under circumstances that would cause the offering of the Securities
pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the
Securities Act which would prevent the Company from selling the Securities pursuant to Regulation D
and Rule 506 thereof under the Securities Act, or any applicable exchange-related stockholder
approval provisions, nor will the Company or any of its affiliates or Subsidiaries take any action
or steps that would cause the offering of the Securities to be integrated with other offerings if
such other offering, if integrated, would cause the offer and sale of the Securities not to be
exempt from registration pursuant to Regulation D and Rule 506 thereof under the Securities Act.
Except as set forth on Schedule 2.1(dd) hereto, the Company does not have any registration
statement pending before the Commission or currently under the Commission’s review and since June
30, 2009, the Company has not offered or sold any of its equity securities or debt securities
convertible into shares of Common Stock.

          (ee) DTC Status. The Company’s current transfer agent is a participant in and the
Common Stock is eligible for transfer pursuant to the Depository Trust Company Automated
Securities Transfer Program. The name, address, telephone number, fax number, contact person
and email address of the Company’s transfer agent is set forth on Schedule 2.1(ee) hereto.

          (ff) Insurance. The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. To
the best of Company’s knowledge, such insurance contracts and policies are

13

 

accurate and complete.
Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business without a significant increase
in cost. The Company currently maintains directors and officers insurance.

          (gg) Accountants. The Company’s accountants are set forth on Schedule
2.1(gg). To the Company’s knowledge, such accountants, who the Company expects will express
their opinion with respect to the financial statements to be included in the Company’s Annual
Report on Form 10-K for the year ending December 31, 2009, are a registered public accounting firm
as required by the Securities Act and are registered with the Public Company Accounting Oversight
Board.

          (hh) No Disagreements with Accountants. There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between the accountants
formerly or presently employed by the Company and/or its Subsidiaries, and the Company is current
with respect to any fees owed to its accountants.

          (ii) No General Solicitation or Advertising in Regard to this Transaction. Neither
the Company nor, to the knowledge of the Company, any of its directors, officers or any person
acting on their behalf (i) has conducted or will conduct any general solicitation (as that term is
used in Rule 502(c) of Regulation D) or general advertising with respect to the sale of the
Securities, or (ii) made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Shares or Warrant Shares.

          (jj) Foreign Corrupt Practices. Neither the Company nor its Subsidiaries, nor to the
knowledge of the Company or its officers or directors, any agent or other person acting on behalf
of the Company or its Subsidiaries, has (i) directly or indirectly, used any corrupt funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or
domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or its Subsidiaries (or
made by any person acting on their behalf of which the Company or its officers or directors are or
reasonably should be aware) which is in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended.

          (kk) Certificate of Incorporation. True and correct copies of the Company’s
certificate of incorporation and the certificates of incorporation and/or formation of the
Company’s Subsidiaries are attached under Schedule 2.1(kk).

          (ll) Litigation. There is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the Knowledge of the Company, threatened, against or materially
affecting the Company, any Subsidiary or any of their respective properties, or to the Company’s
Knowledge, against any of its or its Subsidiaries’ directors, officers or key employees before or
by any court, arbitrator, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or (ii)

14

 

could, if there were an unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect; nor to the Company’s knowledge does there exist any condition which may be
the basis of any such Action. Neither the Company nor any Subsidiary, nor, to the Company’s
knowledge, any director or officer thereof, is or has been the subject of any Action involving a
claim of violation of or liability under federal or state securities laws or a claim of breach of
fiduciary duty or involving the Company’s business, assets or properties, nor has any such Action
been threatened by or against the Company or any Subsidiary. There has not been, and to the
Knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration
statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

          (mm) Anti-takeover Device. Neither the Company nor any of its Subsidiaries has any
outstanding shareholder rights plan or “poison pill” or any similar arrangement. There are no
provisions of any anti-takeover or business combination statute applicable to the Company, the
Articles and the Bylaws which would preclude the issuance and sale of the Securities, the
reservation for issuance of the Warrant Shares and the consummation of the other transactions
contemplated by this Agreement or any of the other Transaction Documents.

          Section 2.2 Representations and Warranties of the Purchasers. Each of the Purchasers
hereby represents and warrants to the Company with respect solely to itself and not with respect to
any other Purchaser as follows as of the date hereof, except as set forth on the Schedule of
Exceptions attached hereto with each numbered schedule corresponding to the section number herein:

          (a) Organization and Standing of the Purchasers. If the Purchaser is an entity, such
Purchaser is a corporation, limited liability company or partnership duly incorporated or
organized, validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization.

          (b) Authorization and Power. Such Purchaser has the requisite power and authority to
enter into and perform its obligations under the Transaction Documents and to purchase the
Securities being sold to it hereunder. The execution, delivery and performance of the Transaction
Documents by such Purchaser and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary corporate, partnership or other action, and no further
consent or authorization of such Purchaser or its Board of Directors, stockholders, partners or
members, as the case may be, is required. When executed and delivered by the Purchasers, the
Transaction Documents shall constitute valid and binding
obligations of such Purchaser enforceable against such Purchaser in accordance with their
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or similar laws relating to,
or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable
principles of general application.

          (c) No Conflict. The execution, delivery and performance of the Transaction Documents
by such Purchaser and the consummation by such Purchaser of the transactions

15

 

contemplated thereby and hereby do not and will not (i) violate any provision of such Purchaser’s charter or
organizational documents, (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to which such Purchaser
is a party or by which such Purchaser’s respective properties or assets are bound, or (iii) result
in a violation of any federal, state, local or foreign statute, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations) applicable to such
Purchaser or by which any property or asset of such Purchaser are bound or affected, except, in all
cases, other than violations pursuant to clauses (i) or (iii) (with respect to federal and state
securities laws) above, for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, materially and
adversely affect such Purchaser’s ability to perform its obligations under the Transaction
Documents.

          (d) Acquisition for Investment. Such Purchaser is purchasing the Securities solely
for its own account for the purpose of investment and not with a view to or for sale in connection
with distribution. Such Purchaser does not have a present intention to sell any of the Securities,
nor a present arrangement (whether or not legally binding) or intention to effect any distribution
of any of the Securities to or through any person or entity; provided, however,
that by making the representations herein, such Purchaser does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with the terms and provisions of the Transaction Documents and
Federal and state securities laws applicable to such disposition. Such Purchaser acknowledges that
(i) it has such knowledge and experience in financial and business matters such that Purchaser is
capable of evaluating the merits and risks of Purchaser’s investment in the Company, (ii) it is
able to bear the financial risks associated with an investment in the Securities, (iii) it has been
given full access to such records of the Company and the Subsidiaries and to the officers of the
Company and the Subsidiaries as it has deemed necessary or appropriate to conduct its due diligence
investigation, (iv) it has reviewed or received copies of the Commission Documents, (v) it and has
sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Securities, (vi) except for this
Agreement and the transactions contemplated hereby, neither the Company nor its employees have
disclosed to such Purchaser any material non-public information that, according to applicable law,
rule or regulation, should have been disclosed publicly by the Company prior to the date hereof but
which has not been so disclosed, and (vii) it (and not the Company) shall be responsible for its
own tax liabilities that may arise as a result of this investment or the transactions contemplated
by this Agreement. Purchaser has the financial capability to perform
all of its obligations under this Agreement, including the financial capability to purchase
the Securities.

          (e) Rule 144. Such Purchaser understands that the Securities may not be sold unless
such Securities are registered under the Securities Act or an exemption from registration is
available. Such Purchaser acknowledges that such person is familiar with Rule 144 of the rules and
regulations of the Commission, as amended, promulgated pursuant to the Securities Act (“Rule
144”), and that such Purchaser has been advised that Rule 144 permits resales only under
certain circumstances. Such Purchaser understands that to the extent that Rule 144 is not

16

 

available, such Purchaser will be unable to sell any Securities without either registration under
the Securities Act or the existence of another exemption from such registration requirement.

          (f) General. Such Purchaser understands that the Securities are being offered and
sold in reliance on a transactional exemption from the registration requirements of federal and
state securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Securities. Such Purchaser understands that no United States federal or
state agency or any government or governmental agency has passed upon or made any recommendation or
endorsement of the Securities.

          (g) Accredited Investor. Such Purchaser is an “accredited investor” (as defined in
Rule 501 of Regulation D), and such Purchaser has such experience in business and financial matters
that it is capable of evaluating the merits and risks of an investment in the Securities. Such
Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act
and such Purchaser is not a broker-dealer. Such Purchaser acknowledges that an investment in the
Securities is speculative and involves a high degree of risk.

          (h) Independent Investment. Except as may be disclosed in any filings with the
Commission by the Purchasers under Section 13 and/or Section 16 of the Exchange Act, no Purchaser
has agreed to act with any other Purchaser for the purpose of acquiring, holding, voting or
disposing of the Shares purchased hereunder for purposes of Section 13(d) under the Exchange Act,
and each Purchaser is acting independently with respect to its investment in the Securities.

          (i) No Shorting. Since becoming aware of a potential investment opportunity in the
Company, no Purchaser has engaged in any short sales of any securities of the Company or instructed
any third parties to engage in any short sales of securities of the Company on its behalf prior to
the Closing Date. Each Purchaser covenants and agrees that, so long as it is in possession of any
Securities, it will not be in a net short position with respect to the shares of Common Stock
issued or issuable to it.

          (j) Not an Affiliate. Such Purchaser is not an officer, director or “affiliate” (as
defined in Rule 405 of the Securities Act) of the Company.

ARTICLE III

COVENANTS

     The Company covenants with each Purchaser as follows, which covenants are for the benefit of
each Purchaser and their respective permitted assignees.

          Section 3.1 Securities Compliance. The Company shall notify the Commission in
accordance with its rules and regulations, of the transactions contemplated by any of the
Transaction Documents and shall take all other necessary action and proceedings as

17

 

may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the
Securities to the Purchasers, or their respective subsequent holders.

          Section 3.2 Registration and Listing. The Company shall use commercially reasonable
efforts to (i) cause its Common Stock to continue to be registered under Sections 12(b) or 12(g) of
the Exchange Act, (ii) to comply in all respects with its reporting and filing obligations under
the Exchange Act and any applicable Blue Sky Laws, and (iii) to not take any action or file any
document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting and filing
obligations under the Exchange Act or Securities Act, except as permitted herein. The Company will
use commercially reasonable efforts to continue the listing or trading of its Common Stock on the
OTC Bulletin Board or any successor market. If the Company enters into a Qualified Financing (as
defined below) and grants registration rights with respect to the securities or instruments issued
to investors or other participants in the Qualified Financing, the Company shall provide
registration rights to the Purchasers with respect to the Securities upon the same terms and
conditions as those provided to the investors or other participants in the Qualified Financing.
For purposes of this Section, “Qualified Financing” means any equity financing
providing for the sale and issuance of any shares of Common Stock or securities convertible into
Common Stock, except for (i) the issuance of Common Stock upon the exercise or conversion of any
Common Stock equivalent outstanding on the Closing Date in accordance with the terms of such Common
Stock equivalents as of such date; (ii) the grant of options to purchase Common Stock, with
exercise prices not less than the closing price of the Common Stock on the date of grant, which are
issued to employees, officers, directors or consultants of the Company for the primary purpose of
soliciting or retaining their employment or service, and the issuance of shares of Common Stock
upon the exercise thereof; (iii) the issuance of securities in connection with strategic business
partnerships or joint ventures, the primary purpose of which, in the reasonable judgment of the
Board of Directors, is not to raise additional capital or (iv) the issuance of securities pursuant
to any equipment financing from a bank or similar financial or lending institution approved by the
Board of Directors. If, prior to December 31, 2010, the Company proposes to file a registration
statement under the Securities Act with respect to an offering (other than any registration
statement relating solely to an underwritten public offering or employee benefit plans or filed in
connection with an exchange offer) of shares, then the Company shall in each case give written
notice of such proposed filing to the Purchasers as soon as practicable (but no later than ten (10)
business days) before the anticipated filing date, and such notice shall offer each Purchaser the
opportunity to register such number of shares of
restricted stock as such Purchaser may request. Each Purchaser desiring to have Securities
included in such registration statement shall so advise the Company in writing within five (5)
business days after the date on which the Company’s notice is so given, setting forth the number of
shares of Securities for which registration is requested.

          Section 3.3 [Intentionally omitted.]

          Section 3.4 Inspection Rights. The Company shall permit, during normal business hours
and upon reasonable request and reasonable notice, each Purchaser, prospective Purchaser or any
employees, agents or representatives thereof, and for so long as any Purchaser shall be obligated
hereunder to purchase the Shares or shall beneficially own any Shares or Warrant Shares, or as long
as any prospective Purchaser has the right or option to purchase any

18

 

Shares, for purposes reasonably related to such Purchaser’s or prospective Purchaser’s interests as a stockholder or
prospective stockholder to examine and make reasonable copies of the records and books of account
of, and visit and inspect the properties, assets, operations and business of the Company and any
Subsidiary, and to discuss the affairs, finances and accounts of the Company and any Subsidiary
with any of its officers, consultants, directors, and key employees. The Company agrees to make
the appropriate employee(s) available for such discussion(s).

          Section 3.5 Compliance with Laws. The Company shall comply, and cause each Subsidiary
to comply, with all applicable laws, rules, regulations and orders, noncompliance with which would
have a Material Adverse Effect.

          Section 3.6 Keeping of Records and Books of Account. The Company shall keep and cause
each Subsidiary to keep adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all financial transactions of the
Company and its Subsidiaries.

          Section 3.7 Reporting Requirements. If the Commission ceases making the Company’s
periodic reports available via the Internet without charge, then the Company shall, promptly after
filing with the Commission, furnish the following to each Purchaser so long as such Purchaser shall
be obligated hereunder to purchase the Securities or shall beneficially own Shares or Warrant
Shares:

          (a) Quarterly Reports filed with the Commission on Form 10-Q;

          (b) Annual Reports filed with the Commission on Form 10-K; and

          (c) Copies of all notices, information and proxy statements in connection with any meetings
that are, in each case, provided to holders of shares of Common Stock, contemporaneously with the
delivery of such notices or information to such holders of Common Stock.

          Section 3.8 Other Agreements. The Company shall not enter into any agreement in which
the terms of such agreement would restrict or impair the right or ability of the Company or any
Subsidiary to perform its material obligations under the Transaction Documents.

          Section 3.9 Use of Proceeds. The net proceeds from the sale of the Shares will be
used by the Company for FDA registration, product development and manufacturing, and for working
capital to the extent not used for the foregoing specified purposes, and, with the exception of the
redemption of shares of the Company’s Series B Preferred Stock in accordance with the Certificate
of Designation, Preferences and Rights of Series B Preferred Stock, not to redeem any Common Stock
or securities convertible, exercisable or exchangeable into Common Stock or to settle any
outstanding litigation, nor for any other purpose not expressly specified herein.

          Section 3.10 Reporting Status. So long as a Purchaser beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed with the Commission

19

 

pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.

          Section 3.11 Disclosure of Material Information. The Company covenants and agrees
that neither it nor any other person acting on its behalf has provided or will provide any
Purchaser or its agents or counsel with any information that the Company believes constitutes
material non-public information, unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company understands and
confirms that each Purchaser shall be relying on the foregoing representations in effecting
transactions in securities of the Company.

          Section 3.12 Form D. The Company agrees to file a Form D with respect to the
Securities as required by Rule 506 under Regulation D and to provide a copy thereof to the
Purchasers promptly after such filing.

          Section 3.13 Blue Sky. The Company agrees to file any form or forms required by any
state with respect to the sale of any of the Securities hereunder.

          Section 3.14 No Integrated Offerings. The Company shall not make any offers or sales
of any security (other than the Securities being offered or sold hereunder) under circumstances
that would require registration of the Securities being offered or sold hereunder under the
Securities Act.

          Section 3.15 Disclosure of Transaction. The Company shall file with the Commission a
Current Report on Form 8-K (the “Form 8-K”) describing the material terms of the
transactions contemplated hereby (and attaching as exhibits thereto this Agreement and the form of
Warrant) as soon as practicable following the Closing Date but in no event more than four (4)
Trading Days following the Closing Date, which Press Release and Form 8-K shall be subject to prior
review and comment by the Purchasers. “Trading Day” means any day during which the OTC
Bulletin Board (or other principal exchange on which the Common Stock is traded) shall be open for
trading.

          Section 3.16 Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by a Purchaser in connection with a bona fide margin agreement or other
loan or financing arrangement that is secured by the Common Stock. The pledge of
Common Stock shall not be deemed to be a transfer, sale or assignment of the Common Stock
hereunder, and no Purchaser effecting a pledge of Common Stock shall be required to provide the
Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document; provided that a Purchaser and its pledgee shall be
required to comply with the provisions of Article V hereof in order to effect a sale, transfer or
assignment of Common Stock to such pledgee. At the Purchasers’ expense, the Company hereby agrees
to execute and deliver such documentation as a pledgee of the Common Stock may reasonably request
in connection with a pledge of the Common Stock to such pledgee by a Purchaser.

20

 

          Section 3.17 Sarbanes-Oxley Act. The Company shall comply with the applicable
provisions of the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, upon
the effectiveness of such provisions or the date by which compliance therewith by the Company is
required.

ARTICLE IV

CONDITIONS

          Section 4.1 Conditions Precedent to the Obligation of the Company to Close and to Sell the
Securities. The obligation hereunder of the Company to close and issue and sell the Securities
to the Purchasers is subject to the satisfaction or waiver, at or before the Closing, of the
conditions set forth below. These conditions are for the Company’s sole benefit and may be waived
by the Company at any time in its sole discretion.

          (a) Accuracy of the Purchasers’ Representations and Warranties. The representations
and warranties of each Purchaser shall be true and correct in all material respects (as of the date
when made and as of the Closing Date, as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

          (b) Performance by the Purchasers. Each Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Purchaser at or prior to the Closing
Date.

          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.

          (d) Delivery of Purchase Price. The Purchasers shall have delivered to the Company
the applicable purchase price for the Securities to be purchased by each Purchaser.

          (e) Delivery of Transaction Documents. The Transaction Documents shall have been duly
executed and delivered by the Purchasers to the Company.

          Section 4.2 Conditions Precedent to the Obligation of the Purchasers to Close and to
Purchase the Securities. The obligation hereunder of each Purchaser to purchase the Securities
and consummate the transactions contemplated by this Agreement is subject to the satisfaction or
waiver, at or before the Closing Date, of each of the conditions set forth below. These conditions
are for the Purchaser’s sole benefit and may be waived by the Purchaser at any time in its sole
discretion.

          (a) Accuracy of the Company’s Representations and Warranties. Each of the
representations and warranties of the Company in this Agreement, the schedules referenced herein
and attached hereto, and the other Transaction Documents shall be true and correct in all

21

 

material
respects (except for those representations and warranties that are qualified by materiality or
Material Adverse Effect, which shall be true and correct in all respects) as of the date when made
and as of the Closing Date as though made at that time, except for representations and warranties
that are expressly made as of a particular date, which shall be true and correct in all material
respects (except for those representations and warranties that are qualified by materiality or
Material Adverse Effect, which shall be true and correct in all respects) as of such date.

          (b) Performance by the Company. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing
Date.

          (c) No Suspension, Etc. Trading in the Common Stock shall not have been suspended by
the Commission or the OTC Bulletin Board (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any
time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial
Markets (“Bloomberg”) shall not have been suspended or limited, or minimum prices shall not
have been established on securities whose trades are reported by Bloomberg, or on the New York
Stock Exchange, nor shall a banking moratorium have been declared either by the United States or
New York State authorities.

          (d) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.

          (e) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator
or any governmental authority shall have been commenced, and no investigation by any governmental
authority shall have been threatened, against the Company or any Subsidiary, or any of the
officers, directors or affiliates of the Company or any Subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in connection with such
transactions.

          (f) Shares and Warrants. At or prior to the Closing, the Company shall have delivered
to the Purchasers certificates representing the Shares (in such denominations as each Purchaser may
request) and the Warrants (in such denominations as each Purchaser may request) duly executed by
the Company, in each case, being acquired by the Purchasers at the Closing.

          (g) Secretary’s Certificate. The Company shall have delivered to the Purchasers a
secretary’s certificate, dated as of the Closing Date, as to (i) the resolutions adopted by the
Board of Directors approving the transactions contemplated hereby, (ii) the Certificate, (iii) the
Bylaws, each as in effect at the Closing, and (iv) the authority and incumbency of the officers of
the Company executing the Transaction Documents and any other documents required to be executed or
delivered in connection therewith.

          (h) Officer’s Certificate. On the Closing Date, the Company shall have delivered to
the Purchasers a certificate signed by an executive officer on behalf of the Company,

22

 

dated as of
the Closing Date, confirming the accuracy of the Company’s representations, warranties and its
compliance with covenants as of the Closing Date and confirming the compliance by the Company with
the conditions precedent set forth in paragraphs (b)-(e) of this Section 4.2 as of the Closing Date
(provided that, with respect to the matters in paragraphs (d) and (e) of this Section 4.2, such
confirmation shall be based on the Knowledge of the Company).

          (i) Material Adverse Effect. No Material Adverse Effect shall have occurred at or
before the Closing Date.

          (j) Opinion of Counsel. The Purchasers shall have received an opinion of counsel to
the Company, dated the date of such Closing, substantially in the form of Exhibit C
hereto, with such exceptions and limitations as shall be reasonably acceptable to counsel to the
Purchasers.

ARTICLE V

CERTIFICATE LEGEND

          Section 5.1 Legend. Each certificate representing the Securities shall be stamped or
otherwise imprinted with a legend substantially in the following form (in addition to any legend
required by applicable state securities or “blue sky” laws):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS OR ECHO THERAPEUTICS, INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL TO THE
HOLDER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

     The Company agrees to reissue certificates representing any of the Shares and the Warrant
Shares, without the legend set forth above if at such time, prior to making any transfer of any
such Shares or Warrant Shares, such holder thereof shall give written notice to the Company
describing the manner and terms of such transfer and removal as the Company may reasonably request.
Such proposed transfer and removal will not be effected until: (a) either (i) the Company has
received an opinion of counsel reasonably satisfactory to the Company, to the effect that the
registration of the Shares or Warrant Shares, as the case may be, under the Securities Act is not
required in connection with such proposed transfer, (ii) a registration statement under the
Securities Act covering such proposed disposition has been filed by the Company with the Commission
and has become and remains effective under the Securities Act,
(iii) the Company has received other evidence reasonably satisfactory to the Company that such
registration and qualification under the Securities Act and state securities laws are not required,
or (iv) the holder provides the Company with reasonable assurances that such security can be

23

 

sold
pursuant to Rule 144 under the Securities Act or another exemption therefrom; and (b) either (i)
the Company has received an opinion of counsel reasonably satisfactory to the Company, to the
effect that registration or qualification under the securities or “blue sky” laws of any state is
not required in connection with such proposed disposition, or (ii) compliance with applicable state
securities or “blue sky” laws has been effected or a valid exemption exists with respect thereto.
The Company will respond to any such notice from a holder within five (5) business days. In the
case of any proposed transfer under this Section 5.1, the Company will use reasonable efforts to
comply with any such applicable state securities or “blue sky” laws, but shall in no event be
required, (x) to qualify to do business in any state where it is not then qualified, or (y) to take
any action that would subject it to tax or to the general service of process in any state where it
is not then subject. The restrictions on transfer contained in this Section 5.1 shall be in
addition to, and not by way of limitation of, any other restrictions on transfer contained in any
other section of this Agreement. Whenever a certificate representing the Shares or Warrant Shares
is required to be issued to a Purchaser without a legend, in lieu of delivering physical
certificates representing the Shares or Warrant Shares, provided the Company’s transfer agent is
participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer
program, the Company shall use its commercially reasonable efforts to cause its transfer agent to
electronically transmit the Shares or Warrant Shares to a Purchaser by crediting the account of
such Purchaser’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission
(“DWAC”) system (to the extent not inconsistent with any provisions of this Agreement).

ARTICLE VI

INDEMNIFICATION

          Section 6.1 Company Indemnity. The Company will indemnify and hold harmless to the
fullest extent of the law the Purchasers and their respective directors, officers, shareholders,
partners, affiliates, employees, agents, successors and assigns (each, an “Indemnified
Party”) from and against any and all losses, liabilities, deficiencies, costs, damages,
obligations, claims, contingencies and expenses, including without limitation all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees, charges and disbursements
and costs of investigation that any such Indemnified Party may suffer or incur (collectively,
“Damages”) as a result of or relating to (a) any inaccuracy in or breach of the
representations, warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents, or (b) any action instituted against a Purchaser, or any of them
or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of a Purchaser’s representations, warranties or
covenants under the Transaction Documents or any agreements or understandings a Purchaser may have
with any such stockholder or any violations by a Purchaser of state or federal securities laws or
any conduct by a Purchaser which constitutes fraud, gross negligence, willful misconduct or
malfeasance). For purposes of this Agreement,
the term “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or

24

 

managed account that is managed on a discretionary basis by the
same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.
Notwithstanding any of the foregoing in this Section 6.1, the Company shall not be liable under
this Section 6.1 to any Indemnified Party to the extent that such Damages resulted or arose from
the breach by an Indemnified Party of any representation, warranty, covenant or agreement of an
Indemnified Party contained in the Transaction Documents or the gross negligence, recklessness,
willful misconduct or bad faith of an Indemnified Party.

          Section 6.2 Indemnification Procedure. If any action is brought against any
Indemnified Party in respect of which indemnity may be sought pursuant to this Agreement, the
Indemnified Party will give written notice to the Company of any matters giving rise to a claim
for indemnification; provided, however, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Company of its obligations under this
Article VI except to the extent that the Company is actually prejudiced by such failure to give
notice. Upon the giving of such notice, Company shall have the right to assume the defense of
any such action with counsel of its own choosing but reasonably acceptable to the Indemnified
Party. Any Indemnified Party shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or (iii) in such action there is, in
the reasonable opinion of such separate counsel, a material conflict on any material issue between
the position of the Company and the position of such Indemnified Party. In any event, unless and
until the Company elects in writing to assume and does so assume the defense of any such action,
the Indemnified Party’s costs and expenses arising out of the defense, settlement or compromise of
any such action, shall be Damages subject to indemnification hereunder. The Indemnified Party will
cooperate fully with the Company in connection with any negotiation or defense of any such action
or claim by the Company, and shall furnish to the Company all information reasonably available to
the Indemnified Party which relates to such action. The Company shall keep the Indemnified Party
fully apprised at all times as to the status of the defense or any settlement negotiations with
respect thereto. The Company shall not be liable for any settlement of any action, claim or
proceeding effected without its prior written consent which shall not be unreasonably withheld.
Notwithstanding anything in this Article VI to the contrary, the Company shall not, without the
Indemnified Party’s prior written consent, settle or compromise any claim or consent to entry of
any judgment in respect thereof which imposes any future obligation on the Indemnified Party or
which does not include, as an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability in respect of such claim. The
indemnity agreements contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the Company or others, and (b) any liabilities to which the
Company may be subject to pursuant to the law.

ARTICLE VII

MISCELLANEOUS

          Section 7.1 Fees and Expenses. Except as otherwise set forth in this Agreement, each
party shall pay the fees and expenses of its advisors, counsel, accountants and

25

 

other experts, if
any, and all other expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Except as disclosed on Schedule
7.1, the Purchasers have not employed any broker or finder or incurred any liability for any
brokerage or investment banking fees, commissions, finders’ structuring fees, financial advisory
fees or other similar fees in connection with the Transaction Documents.

          Section 7.2 Specific Performance; Consent to Jurisdiction; Venue.

          (a) The Company and the Purchasers acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement or the other Transaction Documents are
not performed in accordance with their specific terms or are otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement or the other Transaction Documents and to enforce
specifically the terms and provisions hereof or thereof, this being in addition to any other remedy
to which any of them may be entitled by law or equity.

          (b) The parties agree that venue for any dispute arising under this Agreement will lie
exclusively in the state or federal courts located in New York County, New York, and the parties
irrevocably waive any right to raise forum non conveniens or any other argument that New York is
not the proper venue. The parties irrevocably consent to personal jurisdiction in the state and
federal courts of the state of New York. The Company and each Purchaser consent to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing in this Section 7.2
shall affect or limit any right to serve process in any other manner permitted by law.

          Section 7.3 Entire Agreement; Amendment. This Agreement and the Transaction Documents
contain the entire understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein or in the other Transaction Documents, neither
the Company nor any Purchaser make any representation, warranty, covenant or undertaking with
respect to such matters, and they supersede all prior understandings and agreements with respect to
said subject matter, all of which are merged herein. Following the Closing, no provision of this
Agreement may be waived or amended other than by a written instrument signed by the Company and
Boenning & Scattergood, Inc. in consultation with the Purchasers. Any amendment or waiver effected
in accordance with this Section 7.3 shall be binding upon each Purchaser (and their permitted
assigns) and the Company.

          Section 7.4 Notices. Any notice, demand, request, waiver or other communication
required or permitted to be given hereunder
shall be in writing and shall be effective (a) upon delivery, by hand, telecopy or facsimile
(or other electronic transmission) at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be:

26

 

	 	 	 
	If to the Company:

	 	Echo Therapeutics, Inc.

10 Forge Parkway

Franklin, MA 02038

Attention: Patrick Mooney, President and CEO

Tel. No.: 856-429-8778

Fax No.: 508-553-8760
	 
	 	 
	with copies (which copies shall not constitute notice to the Company) to:
	 
	 	 
	 

	 	Echo Therapeutics, Inc.

10 Forge Parkway

Franklin, MA 02038

Attention: Kimberly Burke, Vice President — Corporate Counsel

Tel. No.: 919-381-9099

Fax No.: 919-251-9833
	 
	 	 
	If to any Purchaser:

	 	At the address of such Purchaser set forth on Exhibit A to this Agreement, with copies to
Purchaser’s counsel as set forth on Exhibit A.

     Any party hereto may from time to time change its address for notices by giving written notice
of such changed address to the other parties hereto.

          Section 7.5 Waivers. No waiver by any party of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any
such right accruing to it thereafter.

          Section 7.6 Headings. The article, section and subsection headings, and the table of
contents, in this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions
hereof.

          Section 7.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. After the Closing, the assignment by
a party to this Agreement of any rights hereunder shall not affect the obligations of such party
under this Agreement. Subject to Section 5.1 hereof, the Purchasers may assign the Securities and
their rights under this Agreement and the other Transaction Documents and any other rights hereto
and thereto without the consent of the Company; provided, however, that such
Purchaser shall not assign such Securities and such rights under this Agreement and the other
Transaction Documents to any known competitor of the Company as identified in Schedule 7.7.
Notwithstanding the foregoing, a Purchaser may assign its rights as provided herein so long as (i)
such Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable time after such assignment,
(ii) the Company is, within a reasonable time after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or assignee, and (b) the rights

27

 

and/or securities with respect to which such rights are being transferred or assigned, (iii)
following such transfer or assignment the further disposition of such securities by the transferee
or assignees is in compliance under the Securities Act and applicable state securities laws, (iv)
at or before the time the Company receives the written notice contemplated by clause (ii) of this
Section 7.7, the transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement and the other Transaction Documents, and (v) such transfer shall
have been made in accordance with the applicable requirements of this Agreement.

          Section 7.8 No Third Party Beneficiaries. Subject to the provisions of Article VI
hereof, this Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

          Section 7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to any of the
conflicts of law principles which would result in the application of the substantive law of another
jurisdiction. This Agreement shall not be interpreted or construed with any presumption against
the party causing this Agreement to be drafted.

          Section 7.10 Survival. The representations and warranties of the Company and the
Purchasers, including the contents of the schedules attached hereto, shall survive the execution
and delivery hereof and the Closing until the first anniversary of the Closing Date.

          Section 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same instrument and shall
become effective when counterparts have been signed by each party and delivered to the other
parties hereto, it being understood that all parties need not sign the same counterpart.

          Section 7.12 Severability. In the event that any court of competent jurisdiction
shall determine that any one or more of the provisions or part of the provisions contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement and this Agreement shall be construed as if such invalid or illegal or
unenforceable provision, or part of such provision, had never been contained herein, so that such
provisions would be valid, legal and enforceable to the fullest extent of the law.

          Section 7.13 Publicity. The Company agrees that it will not disclose, and will not
include in any public announcement, the names of the Purchasers without the prior written consent
of the Purchasers, unless and until such disclosure is required by law, rule or applicable
regulation, and then only to the extent of such requirement.

          Section 7.14 Further Assurances. From and after the date of this Agreement, upon the
request of the Purchasers or the Company, the Company and each Purchaser shall execute and deliver
such instruments, documents and other writings as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the
Warrants.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

28

 

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

	 	 	 	 	 
	 	ECHO THERAPEUTICS, INC.

 	 
	 	By:  	/s/ Patrick T. Mooney
 	 
	 	 	Name:  	Patrick T. Mooney 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

[Additional Signature Pages Follow]

29

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ I. Wistar Morris
 	 
	 	 	Name:  	I. Wistar Morris 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Martha H. Morris
 	 
	 	 	Name:  	Martha H. Morris 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

Eleventh Generation, LP

 	 
	 	By:  	/s/ Martha H. Morris
 	 
	 	 	Name:  	Martha H. Morris, Agent 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

The Cotswold Foundation

 	 
	 	By:  	/s/ Martha H. Morris
 	 
	 	 	Name:  	Martha H. Morris, Trustee 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	     /s/ I. Wistar Morris
 	 
	 	 	Name:  	I. Wistar Morris, Trustee 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

[Signature Page to Common Stock
and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/  Barry J. Clairmont
 	 
	 	 	Name:  	Barry J. Clairmont 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

South Ferry #2, LP

 	 
	 	By:  	/s/   Morris Wolfson
 	 
	 	 	Name:  	Morris Wolfson, Portfolio Manager 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Michael P. Bova
 	 
	 	 	Name:  	Michael P. Bova 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

Furst Associates

 	 
	 	By:  	/s/   Robert Schober
 	 
	 	 	Name:  	Robert Schober, General Partner, Operations 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

Cranshire Capital LP

 	 
	 	By:  	/s/   Keith Goodman
 	 
	 	 	Name:  	Keith Goodman, COO, Downview Capital, Inc.,
 The General Partner 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Michaal Galantino
 	 
	 	 	Name:  	MichaelGalantino 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   James J. Dengler
 	 
	 	 	Name:  	James J. Dengler 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Jeff Hermanson
 	 
	 	 	Name:  	Jeff Hermanson 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   George H. McGovern III
 	 
	 	 	Name:  	George H. McGovern III 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Michael Kooper
 	 
	 	 	Name:  	Michael Kooper 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

FM Partners

 	 
	 	By:  	/s/   Robert Schober
 	 
	 	 	Name:  	Robert Schober, General Partner, Operations 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Jayk  Kooper
 	 
	 	 	Name:  	Jayk Kooper 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Sophie Kooper
 	 
	 	 	Name:  	Sophie Kooper 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Michaal Kooper
 	 
	 	 	Name:  	Michael Kooper, Custodian for 	 
	 	 	 	Luke Kooper, UTMA of NY 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

Eagle Partners

 	 
	 	By:  	/s/   Robert Schober
 	 
	 	 	Name:  	Robert Schober, General Partner, Operations 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Frank J. Gilday
 	 
	 	 	Name:  	Frank J. Gilday 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	     /s/   Margaret F. Gilday
 	 
	 	 	Name:  	Margaret F. Gilday 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Barry A. Silkowitz
 	 
	 	 	Name:  	Barry A. Silkowitz 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Marsha Bronsther
 	 
	 	 	Name:  	Marsha Bronsther 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Robert A. Melnick
 	 
	 	 	Name:  	Robert A. Melnick 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/   Patrick J. McCloskey
 	 
	 	 	Name:  	Patrick J. McCloskey 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Sondra W. Margolies
 	 
	 	 	Name:  	Sondra W. Margolies 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Elchanan Finestone
 	 
	 	 	Name:  	Elchanan Finestone 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Michaal A. Scherer
 	 
	 	 	Name:  	Michael A. Scherer 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ R. Ian Chaplin
 	 
	 	 	Name:  	R. Ian Chaplin 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Steve Hermann
 	 
	 	 	Name:  	Steve Hermann 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Terrence V. Fant
 	 
	 	 	Name:  	Terrence V. Fant 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

The Magoo Family Limited Partnership

 	 
	 	By:  	/s/ Sondra W. Margolies
 	 
	 	 	Name:  	Sondra W. Margolies, General Partner 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Jonathan M. Kaplan
 	 
	 	 	Name:  	Jonathan M. Kaplan 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Harry Randel
 	 
	 	 	Name:  	Harry Randel 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Jacob Finestone
 	 
	 	 	Name:  	Jacob Finestone 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Macy Lasky
 	 
	 	 	Name:  	Macy Lasky 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	     /s/ Robert T. Lasky
 	 
	 	 	Name:  	Robert T. Lasky 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Rodney D. Bell
 	 
	 	 	Name:  	Rodney D. bell 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

	 	 	 	 	 
	 	PURCHASER:

 	 
	 	By:  	/s/ Warren Sewall
 	 
	 	 	Name:  	Warren Sewall 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	/s/ Phyllis Sewall
 	 
	 	 	Name:  	Phyllis Sewall 	 
	 	 	 	 
	 

[Signature Page to Common Stock and Warrant Purchase Agreement]

 

 

EXHIBIT A

LIST OF PURCHASERS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name and Address of	 	 	 	 	 	 	No. of Shares	 	 	No. of Warrants	 	 	Name and Address of	 
	Purchaser	 	 	Investment Amount	 	 	Purchased	 	 	Purchased	 	 	Purchaser’s Counsel	 

 

 

EXHIBIT B

FORM OF WARRANT

 

 

EXHIBIT C

FORM OF LEGAL OPINIONexhibit10_1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
10.1

    

    STANDARD
FORM OF OFFICE LEASE

    The Real
Estate Board of New York, Inc.

    

    Agreement of
Lease, made as of this 15th day
of December 2009, between NEWMARK COMPANY REAL ESTATE, INC., AS AGENT FOR: 38TH
AND 8TH LLC, NEW. 520 GSH LLC, NEW 520 TRIPLE CROWN LLC AND NEW 520 EIGHTH LLC,
having offices at 125 Park Avenue, New York, New York 10017, party of the first
part, hereinafter referred to as Owner, EMERGING VISION USA, INC. and party of
the second part, hereinafter referred to as TENANT,

    

    Witnesseth:
Owner hereby leases to Tenant and Tenant hereby hires from Owner the Part
23rd
floor as indicated on the floor plan attached hereto in the building known as
520 Eighth Avenue in the Borough of Manhattan, City of New York, for the term of
ten (10) years, four (4) months (or until such term shall sooner cease and
expire as hereinafter provided) to commence upon the possession Date (as defined
under Article 64) and terminating ten (10) years, four (4) months from the last
day of the month in which the Possession Date occurs at a Fixed Annual Rent as
stated in Article 65 hereof. Fixed Annual Rent as stated hereunder is an
aggregate inclusive of the 2.5% fixed percentage annual escalation in rent and
is exclusive of electric charges and other items of Additional Rent. which
Tenant agrees to pay in lawful money of me United States, which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, in equal monthly installments in advance on the first day of each month
during said term at the office of Owner or such other place as Owner may
designate, without any setoff or deduction whatsoever, except that Tenant shall
pay the first monthly installment(s) on the execution hereof (unless this lease
be a renewal).

    

    The
parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

    

    
      	
              Rent:

            	
              1. Tenant shall pay the
      rent as above and as hereinafter
provided.

            

    

    

    
      	
              Occupancy:

            	
              2. Tenant shall use and
      occupy the demised premises for general, executive and for no other
      purpose.

            

    

    

    
      	
               
      

            	
              Tenant

            

    

    
      	
              Alterations:

            	
              3. Tenant shall make no
      changes in or to the demised premises of any nature without Owner's prior
      written consent.1
      Subject to the prior written consent of Owner, and to me provisions of
      this article, Tenant, at Tenant's expense, may make alterations,
      installations, additions or improvements which are non-structural and
      which do not affect utility services or plumbing and electrical lines, in
      or to the interior of the demised premises, by using contractors or
      mechanics first approved in each instance by Owner.2
      Tenant shall, before making any alterations, additions, installations or
      improvements, at its expense, obtain all permits, approval and
      certificates required by any governmental or quasi-governmental bodies and
      (upon completion) certificates of final approval thereof, and shall
      deliver promptly duplicates of all such permits, approvals and
      certificates to Owner and Tenant agrees to carry, and will cause Tenant's
      contractors and sub-contractors to carry, such worker's compensation,
      commercial general liability, personal and property damage insurance as
      Owner may require. If any mechanic's lien is filed against the demised
      premises, or the building of which the same forms a part, for work claimed
      to have been done for, or materials furnished to. Tenant, whether or not
      done pursuant to this article, the same shall be discharged by Tenant
      within thirty days thereafter, at Tenant's expense, by payment or filing a
      bond as permitted by law All fixtures and all paneling, partitions,
      railings and like installations, installed in the demised premises at any
      time, either by Tenant or by Owner on Tenant's behalf shall, upon
      installation, become the property of Owner and shall remain upon and be
      surrendered with the demised premises as the termination of this lease,
      elects to relinquish Owner's right thereto and to have them removed by
      Tenant, in which event the same shall be removed to the demised premises
      by Tenant prior to the expiration of the lease, at Tenant's expense.
      Nothing in this article shall be construed to give Owner title to, or to
      prevent Tenant's removal of, trade fixtures, moveable office furniture and
      equipment, but upon removal of, same from the demised premises Or upon
      removal, of other installations as may be required by Owner, Tenant shall
      immediately, and at its expense, repair and restore the demised premises
      to the condition existing prior to any such installations, and repair any
      damage to the demised premises or the building due to such removal. All
      property permitted or required to be removed by Tenant at the end of the
      term remaining in the demised premises after Tenant's removal shall be
      deemed abandoned and may, at the election of Owner either be retained as
      Owner's property or may be removed from the demised premises by Owner, at
      Tenant's expense.

            

    

    

    
      	
               
      

            	
              Maintenance

            

    

    
      	
               
      

            	
              and

            

    

    
      	
              Repairs:

            	
              4. Tenant shall,
      throughout the term of this lease, take good care of the demised premises
      and the fixtures and appurtenances therein. Tenant shall be responsible
      injury to the demised premises or any other part of the building and the
      systems and equipment thereof, whether requiring structural or
      nonstructural repairs caused by or resulting from, carelessness, omission,
      neglect or improper conduct of Tenant, Tenant's subtenants, agents,
      employees, invitees or licensees, or which arise out of any work, labor,
      service or equipment done for, or supplied to, Tenant or any subtenant, or
      arising out of the installation, use or operation of the property or
      equipment of Tenant or any subtenant. Tenant shall also repair all damage
      to the building and the demised premises caused by the moving of Tenant's
      fixtures, furniture and, equipment Tenant shall promptly make, at Tenant's
      expense, all repairs in ' and to the demised premises for which Tenant is
      responsible, using only the contractor for the trade or trades in
      question, selected from a list of at least two contractors per trade
      submitted by Owner.3
      Any other repairs in or to the building or the facilities and systems
      thereof, for which Tenant is responsible, shall be performed by Owner at
      the Tenant's expense. Owner shall maintain in good working order and
      repair the exterior and the structural portions of the building, including
      the structural portions of the demised premises 4
      and the public portions of the building interior and the building
      plumbing, electrical, heating and ventilating systems (to the extent such
      systems presently exist) serving the demised premises. Tenant agrees to
      give prompt notice of any defective condition in the demised premises for
      which Owner may be responsible hereunder. There shall be no allowance to
      Tenant for diminution of rental value and no liability on the part of
      Owner by reason of inconvenience, annoyance or injury to business arising
      from Owner or others making repairs, alterations, additions or
      improvements in or to any portion of the building or the demised premises,
      or in and to the fixtures, appurtenances or equipment thereof. It is
      specifically agreed that Tenant shall not be entitled to any setoff or
      reduction of rent by reason of any failure of Owner to comply with the
      covenants of this or any other article of this lease. Tenant agrees that
      Tenant's sole remedy at law in such instance will be by way of an action
      for damages for breach of contract. The provisions of this Article 4 shall
      not apply in the case of fire or other casualty, which are dealt with in
      Article 9 hereof.

            

    

    

    Window

    
      	
              Cleaning:

            	
              5. Tenant will not clean
      nor require, permit, suffer or allow any window in the demised premises to
      be cleaned from the outside in violation of Section 202 of the Labor Law
      or any other applicable law, or of the Rules of the Board of Standards and
      Appeals, or of any other Board or body having or asserting
      jurisdiction.

            

    

    

    Requirements

    of
Law

    Fire
Insurance,

    
      	
              Floor
    Loads:

            	
              6. Prior to the
      commencement of the lease term, if Tenant is then in possession, and at
      all times thereafter, Tenant, at Tenant's sole cost and expense, shall
      promptly comply with all present and future laws, orders and regulations
      of all state, federal municipal and local governments, departments,
      commissions and boards and any direction of any public officer pursuant to
      law, and all orders, rules and regulations of the New York Board of Fire
      Underwriters, Insurance Services Office, or any similar body which shall
      impose any premises, whether or not arising out of Tenant's use or manner
      of use thereof, (including Tenant's permitted use) or, with respect to the
      building if arising out of Tenant's use or manner of use of the demised
      premises or the building (including the use permitted under the ease).
      Nothing herein shall require Tenant to make structural repairs or
      alterations unless Tenant has, by its manner of use of the demised
      premises or method of operation therein, violated any such laws,
      ordinances, orders, rules, regulations or requirements with respect
      thereto. Tenant may, after securing Owner to Owner's satisfaction against
      all damages, interest, penalties and expenses, including, but not limited
      to, reasonable attorney's fees, by cash deposit or by surety bond in an
      amount and in a company satisfactory to Owner. contest and appeal any such
      laws, ordinances, orders, rules, regulations or requirements provided same
      is done with all reasonable promptness and provided such appeal shall not
      subject Owner to prosecution for a criminal offense, or constitute a
      default under any lease or mortgage under which Owner may be obligated, or
      cause the demised premises or any part thereof to be condemned or vacated.
      Tenant shall not do or permit any act or thing to be done in or to the
      demised premises which is contrary to law, or which will invalidate or be
      in conflict with public liability, fire or other policies of insurance at
      any time carried by or for the benefit of Owner with respect to the
      demised premises or the building of which the demised premises form a
      part, or which shall or might subject Owner to any liability or
      responsibility to any person, or for property damage. Tenant shall not
      keep anything in the demised premises, except as now or hereafter
      permitted by the Fire Department, Board of Fire Underwriters, Fire
      Insurance Rating Organization or other authority having jurisdiction, and
      then only in such manner and such, quantify so as not to increase the rate
      for fire insurance applicable to the building, nor use the demised
      premises in a manner which will increase the insurance rate for the
      building or any properly located therein over that in effect prior to the
      commencement of Tenant's occupancy. Tenant shall pay all costs, expenses,
      fines, penalties, or damages, which may be imposed upon Owner by reason of
      Tenant's failure to comply with the provisions of this article, and if by
      reason of such failure me fire insurance rate shall, at the beginning of
      this lease, or at any time thereafter, be higher than it otherwise would
      be, then, Tenant shall reimburse Owner, as additional rent hereunder, for
      that portion of all fire insurance premiums thereafter paid by Owner which
      shall have been charged because of such failure by Tenant. In any action
      or proceeding wherein Owner and Tenant are parties, a schedule or
      "make-up" of rate for the building or the demised premises issued by the
      New York Fire Insurance Exchange, or other body making fire insurance
      rates applicable to said premises shall be conclusive evidence of the
      facts therein stated and of the several items and charges in the fire
      insurance rates then applicable to said premises. Tenant shall not place a
      load upon any floor of the demised premises exceeding the floor load per
      square foot area which it was designed to carry and which is allowed by
      law. Owner reserves the right to prescribe the weight and position of all
      safes, business machines and mechanical equipment. Such installations
      shall be placed and maintained by Tenant at Tenant's expense, in settings
      sufficient in Owner's judgment to absorb and prevent vibration, noise and
      annoyance.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
              Subordination:

            	
              7. This lease is subject
      and subordinate to all ground or underlying leases and to all mortgages
      which may now or hereafter affect such leases or the real property of
      which the demised premises are a part, and to all renewals, modifications,
      consolidations, replacements and extensions of any such underlying leases
      and mortgages. This clause shall be self-operative and no further
      instrument of subordination shall be required by any ground or underlying
      lessor or by any mortgagee, affecting any lease or me real property of
      which the demised premises are a part. In confirmation of such
      subordination, Tenant shall from time to time execute promptly any
      certificate that Owner may request

            

    

    

    Property
Loss

    Damage

    Reimbursement

    
      	
              Indemnity:

            	
              8. Owner or its agents
      shall not be liable for any damage to property of Tenant or of others
      entrusted to employees of the building, nor for loss of or damage to any
      property of Tenant by damage to persons or property resulting from any
      cause of whatsoever nature, unless caused by, or due to, the negligence
      5
      of Owner, its agents, servants or employees. Owner or its agents will not
      be liable for any such damage caused by other tenants or persons in, upon
      or about said building, or caused by operations in construction of any
      private, public or quasi-public work. If at any time any windows of the
      demised premises are temporarily closed, darkened or bricked up (or
      permanently closed, darkened or bricked up, if required by law) for any
      reason whatsoever including, but not limited to, Owner's own acts, Owner
      shall not be liable for any damage Tenant may sustain thereby, and Tenant
      shall not be entitled to any compensation therefore, nor abatement or
      diminution of rent nor shall the same release Tenant from its obligations
      hereunder, nor constitute an eviction. Tenant shall indemnify and save
      harmless Owner against and from all liabilities, obligations, damages,
      penalties, claims; costs and expenses for which Owner shall not be
      reimbursed by insurance, including reasonable attorneys' fees, paid,
      suffered or incurred as a result of any breach by Tenant, Tenant's agents,
      contractors, employees, invitees, or licensees, of any covenant or
      condition of this lease, or the carelessness, negligence or improper
      conduct of the Tenant Tenant's agents, contractors, employees, invitees or
      licensees. Tenant's liability under this lease extends to the acts and
      omissions of any subtenant and any agent, contractor, employee, invitee or
      licensee of any subtenant In case any action or proceeding is brought
      against Owner by reason of any such claim, Tenant, upon written notice
      from Owner, will, at Tenant's expense, resist or defend such action or
      proceeding by counsel approved by Owner in writing, such approval not to
      be unreasonably withheld.

            

    

    

    Destruction,

    Fire
and Other

    
      	
              Casualty:

            	
              9. (a) If the demised
      premises or any part thereof shall be damaged by fire or other casualty,
      Tenant shall give immediate notice thereof to Owner, and this lease shall
      continue in full force and effect except as hereinafter set form, (b) If
      the demised premises are partially damaged or rendered partially unusable
      by fire or other casualty, the damages thereto shall be repaired by, and
      at the expense of, Owner, and the rent and other items of additional rent
      until such repair shall be substantially completed, shall be apportioned
      from the day following the casualty, according to the part of the demised
      premises which is usable. (c) If the demised premises are totally damaged
      or rendered wholly unusable by fire or other casualty, then the rent and
      other items of additional rent, as hereinafter expressly provided, shall
      be proportionately paid up to the time of the casualty, and thenceforth
      shall cease until the date when the demised premises shall have been
      repaired and restored by Owner (or if sooner reoccupied in part by the
      Tenant then rent shall be apportioned as provided in subsection (b)
      above), subject to Owner's right to elect not to restore the same as
      hereinafter provided. (d) If the demised premises are rendered wholly
      unusable or (whether or not the demised premises are damaged in whole or
      in part) if the building shall be so damaged that Owner shall decide to
      demolish it or to rebuild it then, in any of such events, Owner may elect
      to terminate this lease by written notice to Tenant given within ninety
      (90) days after such fire or casualty, or thirty (30) days after
      adjustment of the insurance claim for such fire or casualty, whichever is
      sooner, specifying a date for the expiration of the lease, which date
      shall not be more than sixty (60) days after the giving of such notice,
      and upon the date specified in such notice the term of this lease shall
      expire as fully and completely as if such date were the date set forth
      above for the termination of this lease, and Tenant shall forthwith quit
      surrender and vacate the demised premises without prejudice however, to
      Landlord's rights and remedies against Tenant under the lease provisions
      in effect prior to such termination, and any rent owing shall be paid up
      to such date, and any payments of rent made by Tenant which were on
      account of any period subsequent to such date shall be returned to Tenant.
      Unless Owner shall serve a termination notice as provided for herein,
      Owner shall make the repairs and restorations under the conditions of (b)
      and (c) hereof, with all reasonable expedition, subject to delays due to
      adjustment of insurance claims, labor troubles and causes beyond Owner's
      control. After any such casualty, Tenant shall cooperate with Owner's
      restoration by removing from the demised premises as promptly as
      reasonably possible, all of Tenant's salvageable inventory and movable
      equipment furniture, and other property. Tenant's liability for rent shall
      resume five (5) days after written notice from Owner that the demised
      premises are substantially ready for Tenant's occupancy. (e) Nothing
      contained hereinabove shall relieve Tenant from liability that may exist
      as a result of damage from fire or other casualty. Notwithstanding
      anything contained to the contrary in subdivisions (a) through (e) hereof,
      including Owner's obligation to restore under subparagraph (b) above, each
      party shall look first to any insurance in its favor before making any
      claim against the other party for recovery for loss or damage resulting
      from fire or other casualty, and to the extent that such insurance is in
      force and collectible, and to the extent permitted by law, Owner and
      Tenant each hereby releases and waives all right of recovery with respect
      to subparagraphs (b), (d), and (e) above, against the other, or any one
      claiming through or under each of them by way of subrogation or otherwise.
      The release and waiver herein referred to shall be deemed to include any
      loss or damage to the demised premises and/or to any personal property,
      equipment trade fixtures, goods and merchandise located therein. The
      foregoing release and waiver shall be in force only if both releasors'
      insurance policies contain a clause providing that such a release or
      waiver shall not invalidate the insurance. If, and to the extent that such
      waiver can be obtained only by the payment of additional premiums, then
      the parry benefiting from the waiver shall pay such premium within ten
      days after written demand or shall be deemed to have agreed that the party
      obtaining insurance coverage shall be free of any further obligation under
      the provisions hereof with respect to waiver of subrogation. Tenant
      acknowledges that Owner will not carry insurance on Tenant's furniture
      and/or furnishings or any fixtures or equipment improvements, or
      appurtenances removable by Tenant and agrees that Owner will not be
      obligated to repair any damage thereto or replace the same, (f) Tenant
      hereby waives the provisions of section 227 of the Real Property Law and
      agrees that the provisions of this article shall govern and control in
      lieu thereof. 6

            

    

    

    Eminent

    
      	
              Domain:

            	
              10. If the whole or any
      part of the demised premises shall be acquired or condemned by Eminent
      Domain for any public or quasi public use or purpose, then, and in that
      event the term of this lease shall cease and terminate from the date of
      title vesting in such proceeding, and Tenant shall have no claim for the
      value of any unexpired term of said lease, and assigns to Owner, Tenant's
      entire interest in any such award. Tenant shall have the right to make an
      independent claim to the condemning authority for the value of Tenant's
      moving expenses and personal property, trade fixtures and equipment
      provided Tenant is entitled pursuant to the terms of the lease to remove
      such property, trade fixtures and equipment at the end of the term, and
      provided further such claim does not reduce Owner's
  award.

            

    

    

    Assignment,

    Mortgage,

    
      	
              Etc.:

            	
              11. Tenant, for itself,
      its heirs, distributees, executors, administrators, legal representatives,
      successors and assigns, expressly covenants that it shall not assign,
      mortgage or encumber this agreement nor underlet or suffer or permit the
      demised premises or any part thereof to be used by others, without the
      prior written consent of Owner in each instance. Transfer of the majority
      of the stock of a corporate Tenant or the majority interest in any
      partnership or other legal entity which is Tenant shall be deemed an
      assignment If this lease be assigned, or if the demised premises or any
      part thereof be underlet or occupied by anybody other than Tenant Owner
      may, after default by Tenant collect rent from the assignee, under-tenant
      or occupant and apply the net amount collected to "the rent herein
      reserved, but no such assignment, underletting, occupancy or collection
      shall be deemed a waiver of this covenant, or the acceptance of the
      assignee, undertenant or occupant as tenant or a release of Tenant from
      the further performance by Tenant of covenants on the part of Tenant
      herein contained The consent by Owner to an assignment or underletting
      shall not in any way be construed to relieve Tenant from obtaining the
      express consent in writing of Owner to any further assignment or
      underletting.

            

    

    

    Electric

    Current:

    
      	
              F

            	
              12. Rates and conditions
      in respect to submetering or rent inclusion, as the case may be, to be
      added in RIDER attached hereto. Tenant covenants and agrees that at all
      times its use of electric current shall not exceed the capacity of
      existing feeders to the building or the risers or wiring installation, and
      Tenant may not use any electrical equipment which, in Owner's opinion,
      reasonably exercised, will overload such installations or interfere with
      the use thereof by other tenants of the building. The change at any time
      of the character of electric service shall in no way make Owner liable or
      responsible to Tenant for any loss, damages or expenses which Tenant may
      sustain.

            

    

    

    Access
to

    
      	
              Premises:

            	
              13. Owner or Owner's
      agents shall have the right (but shall not be obligated) to enter the
      demised premises in any emergency at any time, and, at other reasonable
      times, 7
      to examine the same and to make such repairs, replacements and
      improvements as Owner may deem necessary and reasonably desirable to the
      demised premises or to any other portion of the building or which Owner
      may elect to perform. Tenant shall permit Owner to use and maintain and
      replace pipes, ducts, and conduits in and through the demised premises and
      to erect new pipes, ducts, and conduits therein, provided they are
      concealed within the walls, floor, or ceiling. 8
      Owner may, during the progress of any work in the demised premises, take
      all necessary materials and equipment into said premises without the same
      constituting an eviction, nor shall the Tenant be entitled to any
      abatement of rent while such work is in progress, nor to any damages by
      reason of loss or interruption of business or otherwise. Throughout the
      term hereof, Owner shall have the right to enter the demised premises at
      reasonable hours 9
      for the purpose of showing the same to prospective purchasers or
      mortgagees of the building, and during the last six months of the term,
      for the purpose of showing the same to prospective tenants. If Tenant is
      not present to open and permit an entry into the demised premises, Owner
      or Owner's agents may enter the same whenever such entry may be necessary
      or permissible by master key or forcibly, and provided reasonable care is
      exercised to safeguard Tenant's property, such entry shall not render
      Owner or its agents liable therefore, nor in any event shall the
      obligations of Tenant hereunder be affected. if during the last month of
      the term Tenant shall have removed all or substantially all of Tenant's
      property therefrom, Owner may immediately enter, alter, renovate or
      redecorate the demised premises without limitation or abatement of rent,
      or incurring liability to Tenant for any compensation, and such act shall
      have no effect on this lease or Tenant's obligations
      hereunder.

            

    

    

    Vault,

    Vault
Space,

    
      	
              Area:

            	
              14. No vaults, vault
      space or area, whether or not enclosed or covered, not within the property
      line of the building, is leased hereunder, anything contained in or
      indicated on any sketch, blue print or plan, or anything contained
      elsewhere in this lease to the contrary notwithstanding. Owner makes no
      representation as to the location of the property line of the building.
      All vaults and vault space and all such areas not within the property line
      of the building, which Tenant may be permitted to use and/or occupy, is to
      be used and/or occupied under a revocable license, and if any such license
      be revoked, or if the amount of such space or area be diminished or
      required by any federal, state or municipal authority or public utility,
      Owner shall not be subject to any liability, nor shall Tenant be entitled
      to any compensation or diminution or abatement of rent, nor shall such
      revocation, diminution or requisition be deemed constructive or actual
      eviction. Any tax, the or charge of municipal authorities for such vault
      or area shall be paid by Tenant

            

    

    

    
      	
              Occupancy:

            	
              15. Tenant will not at
      any time use or occupy the demised premises in violation of the
      certificate of occupancy issued for the building of which the demised
      premises are apart Tenant has inspected the demised premises and accepts
      them as is, subject to the riders annexed hereto with respect to Owner's
      work, if any. In any event, Owner makes no representation as to the
      condition of the demised premises, and Tenant agrees to accept the same
      subject to violations, whether or not of record. 10

            

    

    

    
      	
              Bankruptcy:

            	
              16. (a) Anything
      elsewhere in this lease to the contrary notwithstanding, this lease may be
      cancelled by Owner by the sending of a written notice to Tenant within a
      reasonable time after the happening of any one or more of the following
      events: (1) the commencement of a case in bankruptcy or under the laws of
      any state naming Tenant (or a guarantor of any of Tenant's obligations
      under this lease) as the debtor; or (2) the making by Tenant (or a
      guarantor of any of Tenant's obligations under this lease) of an
      assignment or any other arrangement for the benefit of creditors under any
      state statute. Neither Tenant nor any person claiming through or under
      Tenant or by reason of any statute or order of court, shall thereafter be
      entitled to possession of the premises demised but shall forthwith quit
      and surrender the demised premises. If this lease shall be assigned in
      accordance with its terms, the provisions of this Article 16 shall be
      applicable only to the party then owning Tenant's interest in this
      lease.

            

    

    

    (b) It is
stipulated and agreed that in the event of the termination of this lease
pursuant to (a) hereof, Owner shall forthwith, notwithstanding any other
provisions of this lease to the contrary, be entitled to recover from Tenant as
and for liquidated damages, an amount equal to the difference between the rent
reserved hereunder for the unexpired portion of the term demised and the fair
and reasonable rental value of the demised premises for the same period. In the
computation of such damages the difference between any installment of rent
becoming due hereunder after the date of termination, and the fair and
reasonable rental value of the demised premises for the period for which such
installment was payable, shall be discounted to the date of termination at the
rate of four percent (4%) per annum. If such demised premises or any part
thereof be re-let by the Owner for the unexpired term of said lease, or any part
thereof; before presentation of proof of such liquidated damages to any court,
commission or tribunal, the amount of rent reserved upon such re-letting shall
be deemed to be the fair and reasonable rental value for the part or the whole
of the demised premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to prove for
and obtain as liquidated damages, by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater; equal to, or less than, the amount of the
difference referred to above.

    

    
      	
              Default:

            	
              17. (1) If Tenant
      defaults 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; or if any execution or attachment
      shall be issued against Tenant or any of Tenant's property, whereupon the
      demised premises shall be taken or occupied by someone other than Tenant;
      or if this lease be rejected under §365 of Title 11 of the U.S. Code
      (Bankruptcy Code); or if Tenant shall have failed, after five (5) days
      written notice, to redeposit with Owner any portion of the security
      deposit hereunder which Owner has applied to the payment of any rent and
      additional rent due and payable hereunder, or if Tenant shall be in
      default with respect to any other lease between Owner and Tenant; or if
      Tenant shall fail to move into or take possession of the demised premises
      within thirty (30) days after the commencement of the term of this lease,
      then, in any one or more of such events, upon Owner serving a written
      11
      days notice upon Tenant specifying the nature of said default, and upon
      the expiration of said 11
      days, if Tenant shall have failed to comply with or remedy such
      default, or if the said default or omission complained of shall be of a
      nature that, the same cannot be completely cured or remedied within said
      11
      day period, and if Tenant shall not have diligently commenced
      curing such default within such 11
      day period, and shall not thereafter with reasonable diligence and
      in good faith, proceed to remedy or cure such default, then Owner may
      serve a written five (5) days notice of cancellation of this lease upon
      Tenant and upon the expiration of said five (5) days this lease and the
      term thereunder shall end and expire as fully and completely as if the
      expiration of such five (5) day period were the day herein definitely
      fixed for the end and expiration of this lease and the term thereof, and
      Tenant shall then quit and surrender the demised premises to Owner, but
      Tenant shall remain liable as hereinafter
  provided.

            

    

    

    (2) If
the notice provided for in (1) hereof shall have been given, and the term shall
expire as aforesaid; or if Tenant shall make default in the payment of the rent
reserved herein, or any item of additional rent , herein mentioned, or any part
of either, or in making any other payment herein required; 12
then, and in any of such events, Owner may without notice 13
re-enter the demised premises either by force or otherwise, and dispossess
Tenant by summary proceedings or otherwise, and the legal representative of
Tenant or other occupant of the demised premises, and remove their effects and
hold the demised premises as if this lease had not been made, and Tenant hereby
waives the service of notice of intention to re-enter or to institute legal
proceedings to that end. If Tenant shall make default hereunder prior to the
date fixed as the commencement of any renewal or extension of this lease, Owner
may cancel and terminate such renewal or extension agreement by written
notice.

    

    Remedies
of

    Owner
and

    Waiver
of

    
      	
              Redemption:

            	
              18. In case of any such
      default re-entry, expiration and/or dispossess by summary proceedings or
      otherwise, (a) the rent shall become due thereupon and be paid up to the
      time of such re-entry, dispossess and/or expiration, (b) Owner may re-let
      the demised premises or any part or parts thereof, either in the name of
      Owner or otherwise, for a term or terms, which may at Owner's option be
      less than or exceed the period which would otherwise have constituted the
      balance of the term of this lease, and may grant concessions or free rent
      or charge a higher rental than that in this lease, and/or (c) Tenant or
      the legal representatives of Tenant shall also pay to Owner as liquidated
      damages for the failure of Tenant to observe and perform said Tenant's
      covenants herein contained, any deficiency between the rent hereby
      reserved and/or covenanted to be paid and the net amount if any, of the
      rents collected on account of the lease or leases of the demised premises
      for each month of the period which would otherwise have constituted the
      balance of the term of this lease. The failure of Owner to re-let the
      demised premises, or any part or parts thereof, shall not release or
      affect Tenant's liability for damages. In computing such liquidated
      damages there shall be added to the said deficiency such expenses as Owner
      may incur in connection with re-letting, such as legal expenses,
      reasonable attorney's fees, brokerage, advertising and for keeping the
      demised premises in good order or for preparing the same for re-letting.
      Any such liquidated damages shall be paid in monthly installments by
      Tenant on the rent day specified in this lease, and any suit brought to
      collect the amount of the deficiency for any month shall not prejudice in
      any way the rights of Owner to collect the deficiency for any subsequent
      month by a similar proceeding. Owner, in putting the demised premises in
      good order or preparing the same for re-rental may, at Owner's option,
      make such alterations, repairs, replacements, and/or decorations in the
      demised premises as Owner, in Owner's sole judgment considers advisable
      and necessary for the purpose of re-letting the demised premises, and the
      making of such alterations, repairs, replacements, and/or decorations
      shall not operate or be construed to release Tenant from liability
      hereunder as aforesaid.14
      "Owner shall in no event be liable in any way whatsoever for failure to
      re-let the demised premises, or in the event that the demised premises are
      re-let for failure to collect the rent thereof under such re-letting, and
      in no event shall Tenant be entitled to receive any excess, if any, of
      such net rents collected over the sums payable by Tenant to Owner
      hereunder. In the event of a breach or threatened breach by Tenant of any
      of the covenants or provisions hereof, Owner 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. Mention in this lease of any particular remedy, shall not
      preclude Owner from any other remedy, in law or in equity. Tenant hereby
      expressly waives any and all rights of redemption granted by or under any
      present or future laws in the event of Tenant being evicted or
      dispossessed for any cause, or in the event of Owner obtaining possession
      of the demised premises, by reason of the violation by Tenant of any of
      the covenants and conditions of this lease, or
  otherwise.

            

    

    

    Fees
and

    
      	
              Expenses:

            	
              19. If Tenant shall
      default in the observance or performance of any term or covenant on
      Tenant's part to be observed or performed under, or by virtue of, any of
      the terms or provisions in any article of this lease, after notice, if
      required, and upon expiration of any applicable grace period, if any,
      (except in an emergency), then, unless otherwise provided elsewhere in
      this lease, Owner may immediately, or at any time thereafter and without
      notice, perform the obligation of Tenant thereunder. If Owner, in
      connection with the foregoing, or in connection with any default by Tenant
      in the covenant to pay rent hereunder, makes any expenditures or incurs
      any obligations for the payment of money, including but not limited to
      reasonable attorneys fees, in instituting, prosecuting or defending any
      action or proceeding, and prevails in any such action or proceeding, then
      Tenant will reimburse Owner for such sums so paid, or obligations
      incurred, with interest and costs. The foregoing expenses incurred by
      reason of Tenant's default shall be deemed to be additional rent
      hereunder, and shall be paid by Tenant to Owner within ten (10) days of
      rendition of any bill or statement to Tenant therefore. If Tenant's lease
      term shall have expired at the time of making of such expenditures or
      incurring of such obligations, such sums shall be recoverable by Owner, as
      damages.

            

    

    

    Building

    Alterations

    and

    
      	
              Management:

            	
              20. Owner shall have the
      right at any time without the same constituting an eviction and without
      incurring liability to Tenant therefore, to change the arrangement and/or
      location of public entrances, passageways, doors, doorways, corridors,
      elevators, stairs, toilets or other public parts of the building, and to
      change the name, number or designation by which the building may be known.
      There shall be no allowance to Tenant for diminution of rental value and
      no liability on the part of Owner by reason of inconvenience, annoyance or
      injury to business arising from Owner or other Tenants making any repairs
      in the building or any such alterations, additions and improvements.
      Furthermore, Tenant shall not have any claim against Owner by reason of
      Owner's imposition of such 15
      Controls of the manner of access to the building by Tenant's social or
      business visitors as the Owner may deem necessary for the security of the
      building and its occupants.

            

    

    

    No
Repre-

    sentations

    
      	
              Owner:

            	
              21. 16
      Neither Owner nor Owner's agents have made any representations or promises
      with respect to the physical condition of the building, the land upon
      which it is erected or the demised premises, the rents, leases, expenses
      of operation or any other matter or thing affecting or related to the
      demised premises, except as herein expressly set forth, and no rights,
      easements or licenses are acquired by Tenant by implication or otherwise,
      except as expressly set forth in the provisions of this lease. Tenant has
      inspected the building and the demised premises and is thoroughly
      acquainted with their condition and agrees to take the same "as-is", and
      acknowledges feat the taking of possession of the demised premises by
      Tenant shall be conclusive evidence that the said premises and the
      building of which the same form a part were in good and satisfactory
      condition at the time such possession was so taken, except as to latent
      defects. All understandings and agreements heretofore made between the
      parties hereto are merged in this contract, which alone fully and
      completely expresses the agreement between Owner and Tenant, and any
      executory agreement hereafter made shall be ineffective to change, modify,
      discharge or effect an abandonment of it in whole or in part, unless such
      executory agreement is in writing and signed by the party against whom
      enforcement of the change, modification, discharge or abandonment is
      sought

            

    

    

    End
of

    
      	
              Term:

            	
              22. Upon the expiration
      or other termination of the term of this lease, Tenant shall quit and
      surrender to Owner the demised premises, "broom-clean", in good order and
      condition, ordinary wear and damages which Tenant is not required to
      repair as provided elsewhere in this lease excepted, and Tenant shall
      remove all its property. Tenant's obligation to observe or perform this
      covenant shall survive the expiration or other termination of this lease.
      If the last day of the term of this lease or any renewal thereof, falls on
      Sunday, this lease shall expire at noon on the preceding Saturday, unless
      it be a legal holiday, in which case it shall expire at noon on the
      preceding business day.

            

    

    

    Quiet

    
      	
              Enjoyment:

            	
              23. Owner covenants and
      agrees wife Tenant that upon Tenant paving the rent and additional rent
      and observing and performing all the terms, covenants and conditions, on
      Tenant's part to be observed and performed, Tenant may peaceably and
      quietly enjoy the premises hereby demised, subject, nevertheless, to the
      terms and conditions of this lease including, but not limited to, Article
      31 hereof; and to the ground leases, underlying leases and mortgages
      hereinbefore mentioned.

            

    

    

    Failure
to

    Give

    
      	
              Possession:

            	
              24. If Owner is unable
      to give possession of the demised premises on the date of the commencement
      of the term hereof because of the holding-over or retention of possession
      of any tenant, undertenant or occupants, or if the demised premises are
      located in a building being constructed, because such building has not
      been sufficiently completed to make the demised premises ready for
      occupancy, or because of the fact that a certificate of occupancy has not
      been procured, or for any other reason, Owner shall not be subject to any
      liability for failure to give possession on said date and the validity of
      the lease shall not be impaired under such circumstances, nor shall the
      same be construed in any way to extend the term of this lease, but the
      rent 17
      payable hereunder shall be abated (provided Tenant is not responsible for
      Owner's inability to obtain possession or complete construction) until
      after Owner shall have given Tenant written notice that the Owner is able
      to deliver possession in condition required by this lease. If permission
      is given to Tenant to enter into possession of the demises premises, or to
      occupy premises other than the demised premises, prior to the date
      specified as the commencement of the term of this lease, Tenant covenants
      and agrees that such possession and/or occupancy shall be deemed to be
      under all the terms, covenants, conditions and provisions of this lease,
      except the obligation to pay the fixed annual rent, set forth in the
      preamble to this lease. The provisions of this article are intended to
      constitute "an express provision to the contrary" within the meaning of
      Section 223-a of the New York Real Property Law. 18

            

    

    

    
      	
              No
    Waiver:

            	
              25. The failure of Owner
      to seek redress for violation of, or to insist upon the strict performance
      of, any covenant or condition of this lease or of any of the Rules or
      Regulations, set forth or hereafter adopted by Owner, shall not prevent a
      subsequent act which would have originally constituted a violation from
      having all the force and effect of an original violation. The receipt by
      Owner of rent and/or additional rent with knowledge of the breach of any
      covenant of this lease shall not be deemed a waiver of such breach, and no
      provision of this lease shall be deemed to have been waived by Owner
      unless such waiver be in writing signed by Owner, No payment by Tenant or
      receipt by Owner of a lesser amount than the monthly rent herein
      stipulated shall be deemed to be other than on account of the earliest
      stipulated rent, nor shall any endorsement or statement of any check or
      any letter accompanying any check or payment as rent be deemed an accord
      and satisfaction, and Owner may accept such check or payment without
      prejudice to Owner's right to recover the balance of such rent or pursue
      any other remedy in this lease provided. No act or thing done by Owner or
      Owner's agents during the term hereby demised shall be deemed an
      acceptance of a surrender of the demised premises, and no agreement to
      accept such surrender shall be valid unless in writing signed by Owner. No
      employee of Owner or Owner's agent shall have any power to accept the keys
      of said premises prior to the termination of the lease, and the delivery
      of keys to any such agent or employee shall not operate as a termination
      of the lease or a surrender of the demised
  premises.

            

    

    

    Waiver
of

    
      	
              Trial by
      Jury:

            	
              26. It is mutually
      agreed by and between Owner and Tenant that the respective parties hereto
      shall, and they hereby do, waive trial by jury in any action proceeding or
      counterclaim brought by either of the parties hereto against the other
      (except for personal injury or property damage) on any matters whatsoever
      arising out of or in any way connected with, this lease, the relationship
      of Owner and Tenant, Tenant's use of, or occupancy of, the demised
      premises, and any emergency statutory or any other statutory remedy. It is
      further mutually agreed that in the event Owner commences any proceeding
      or action for possession, including a summary proceeding for possession of
      the demised premises, Tenant will not interpose any counterclaim of
      whatever nature or description in any such proceeding, including a
      counterclaim under Article 4, except for statutory mandatory
      counterclaims.

            

    

    

    Inability
to

    
      	
              Perform:

            	
              27. 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 no way be affected, impaired or excused because Owner is unable to
      fulfill any of its obligations under this lease, or to supply, or is
      delayed in surviving, any service expressly or impliedly to be supplied,
      or is unable to make, or is delayed in making any repair, additions,
      alterations, or decorations, or is unable to supply, or is delayed in
      supplying, any equipment, fixtures, or other materials, if Owner is
      prevented or delayed from so doing by reason of strike or labor troubles
      or any cause whatsoever including, but not limited to, government
      preemption or restrictions, or by reason of any rule, order or regulation
      of any department or subdivision thereof of any government agency, or by
      reason of the conditions which have been or are affected, either directly
      or indirectly, by war or other emergency. 19

            

    

    

    Bills
and

    
      	
              Notices:

            	
              28. Except as otherwise
      in this lease provided, any notice, statement, demand or other
      communication required or permitted to be given, rendered or made by
      either party to the other, pursuant to this lease or pursuant to any
      applicable law or requirement of public authority, shall be in writing
      (whether or not so stated elsewhere in this lease) and shall be deemed to
      have been properly given, rendered or made, if sent by registered or
      certified mail (express mail, if available), return receipt requested, or
      by courier guaranteeing overnight delivery and furnishing a receipt in
      evidence thereof; addressed to the other party at the address hereinabove
      set forth (except feat after the date specified as the commencement of the
      term of this lease, Tenant's address, unless Tenant shall give notice to
      the contrary, shall be the building), and shall be deemed to have been
      given, rendered or made (a) on the date delivered, if delivered to Tenant
      personally, (b) on the date delivered, if delivered by overnight courier
      or (c) on the date which is two (2) days after being mailed. Either party
      may, by notice as aforesaid, designate a different address or addresses
      for notices, statements, demand or other communications intended for it
      Notices given by Owner's managing agent shall be deemed a valid notice if
      addressed and set in accordance wife the provisions of this Article. At
      Owner's option, notices and bills to Tenant may be sent by hand delivery.
      20

            

    

    

    Services

    Provided
by

    
      	
              Owner:

            	
              29. Owner shall provide;
      (a) necessary elevator facilities on business days from 8 a.m. to 6 p.m.
      and have one elevator subject to call at all other times; (b) heat to the
      demised premises when and as required by law, on business days from 8 a.m.
      to 6 p.m.; (c) water for ordinary lavatory purposes, but if Tenant uses or
      consumes water for any other purposes or in unusual quantities (of which
      fact Owner shall be the sole judge), Owner may install a water meter at
      Tenant's expense, which Tenant shall thereafter maintain at Tenant's
      expense in good working order and repair, to register such water
      consumption, and Tenant shall pay for water consumed as shown on said
      meter as additional rent as and when bills are rendered.  If,
      however, said premises are to be kept clean by Tenant, it shall be done at
      Tenant's sole expense, in a manner reasonably satisfactory to Owner, and
      no one other than persons approved by Owner shall be permitted to enter
      said premises or the building of which they are a part for such purpose.
      Tenant shall pay Owner the cost of removal of any of Tenant's refuse and
      rubbish from the building; (e) if the demised premises are serviced by
      Owner's air conditioning/cooling and ventilating system, air
      conditioning/cooling will be furnished to Tenant from May 15th through
      September 30th on business days (Mondays through Fridays, holidays
      excepted) from 8:00 a.m. to 6:00 pm., and ventilation will be furnished on
      business days during the aforesaid hours except when air
      conditioning/cooling is being furnished as aforesaid. If Tenant requires
      air conditioning/cooling or ventilation for more extended hours on
      Saturdays, Sundays or on holidays, as defined under Owner's contract wife
      the applicable Operating Engineers contract Owner will furnish the same at
      Tenant's expense. F RIDER to be added
      in respect to rates and conditions for such additional service; (f) Owner
      reserves the right to stop services of the heating, elevators, plumbing,
      air-conditioning, electric, power systems or cleaning or other services,
      if any, when necessary by reason of accident or for repairs, alterations,
      replacements or improvements necessary or desirable in the judgment of
      Owner, for as long as may be reasonably required by reason thereof. 21
      If the building of which the demised premises are a part supplies manually
      operated elevator service, Owner at any time may substitute automatic
      control elevator service and proceed diligently wife alterations necessary
      therefor without in any way affecting this tease or the obligations of
      Tenant hereunder. 21a

            

    

    

    
      	
              Captions:

            	
              30. The Captions are
      inserted only as a matter of convenience and for reference, and in no way
      define, limit or describe the scope of this lease nor the intent of any
      provisions thereof.

            

    

    

    
      	
              Definitions:

            	
              31. The term "office",
      or "offices", wherever used in this lease, shall not be construed to mean
      premises used as a store or stores, for the sale or display, at any time,
      of goods, wares or merchandise, of any kind, or as a restaurant, shop,
      booth, bootblack or other stand, barber shop, or for other similar
      purposes, or for manufacturing. The term "Owner" means a landlord or
      lessor, and as used in this lease means only the owner, or the mortgagee
      in possession for the time being, of the land and building (or the owner
      of a lease of the building or of the land and building) of which the
      demised premises form a part, so that in the event of any sale or sales or
      conveyance, assignment or transfer of said land and building, or of said
      lease, or in the event of a lease of said building, or of the land and
      building, the said Owner shall be, and hereby is, entirely freed and
      relieved of all covenants and obligations of Owner hereunder, and it shall
      be deemed and construed without further agreement between the parties or
      their successors in interest or between the parties and the purchaser, at
      any such sale, or the said lessee of the building, or of the land and
      building, that the purchaser, grantee, assignee or transferee or the
      lessee of the building has assumed and agreed to carry out any and all
      covenants and obligations of Owner, hereunder. The words "re-enter" and
      '"re-entry'' as used in this lease are not restricted to their technical
      legal meaning. The term "business days" as used in this lease shall
      exclude Saturdays, Sundays and all days as observed by the State or
      Federal Government as legal holidays and those designated as holidays by
      the applicable building service union employees service contract or by the
      applicable Operating Engineers contract with respect to HVAC service.
      Wherever it is expressly provided in this lease that consent shall not be
      unreasonably withheld, such consent shall not be unreasonably
      delayed.

            

    

    

    Adjacent

    Excavation-

    
      	
              Shoring:

            	
              32. If an excavation
      shall be made upon land adjacent to the demised premises, or shall be
      authorized to be made, Tenant shall afford to the person causing or
      authorized to cause such excavation, a license to enter upon the demised
      premises for the purpose of doing such work as said person shall deem
      necessary to preserve the wall or the building, of which demised premises
      form, a part, from injury or damage, and to support the same by proper
      foundations, without any claim for damages or indemnity against Owner, or
      diminution or abatement of rent.

            

    

    

    Rules
and

    
      	
              Regulations:

            	
              33. Tenant and Tenant's
      servants, employees, agents, visitors, and licensees shall observe
      faithfully, and comply strictly with, the Rules and Regulations and such
      other and further reasonable Rules and Regulations as Owner and Owner's
      agents may from time to time adopt Notice of any additional Rules or
      Regulations shall be given in such manner as Owner may elect In case
      Tenant disputes the reasonableness of any additional Rules or Regulations
      hereafter made or adopted by Owner or Owner's agents, the parties hereto
      agree to submit the question of the reasonableness of such Rules or
      Regulations for decision to the New York office of the American
      Arbitration Association, whose determination shall be final and conclusive
      upon the parties hereto, The right to dispute the reasonableness of any
      additional Rules or Regulations upon Tenant's part shall be deemed waived
      unless the same shall be asserted by service of a notice, in writing, upon
      Owner, within 22
      days after the giving of notice thereof. Nothing in this lease contained
      shall be construed to impose upon Owner any duty or obligation to enforce
      the Rules and Regulations or terms, covenants or conditions in any other
      lease, as against any other tenant, and Owner shall not be liable to
      Tenant for violation of the same by any other tenant, its servants,
      employees, agents, visitors or
licensees.

            

    

    

    
      	
              F
    Security:

            	
              34. Tenant has deposited
      with Owner the sum $45,066.68 as security for the faithful performance and
      observance by Tenant of the terms, provisions and conditions of this
      lease; it is agreed that in the event Tenant defaults in respect of any of
      the terms, provisions and conditions of this lease, including, but not
      limited to, the payment of rent and additional rent, Owner may use, apply
      or retain the whole or any part of the security so deposited to the extent
      required for the payment of any rent and additional rent, or any other sum
      as to which Tenant is in default or for any sum which Owner may expend or
      may be required to expend by reason of Tenant's default in respect of any
      of the terms, covenants and conditions of this lease, including but not
      limited to, any damages or deficiency in the re- letting of the demised
      premises, whether such damages or deficiency accrued before or after
      summary proceedings or other re-entry by Owner. In the case of every such
      use, application or retention, Tenant shall, within five (5) days after
      demand, pay to Owner the sum so used, applied or retained which shall be
      added to the security deposit so that the same shall be replenished to its
      former amount. In the event that Tenant 23
      the security shall be returned to Tenant after the date fixed as
      the end of the lease and after delivery of entire possession of the
      demised premises to Owner. In the event of a sale of the land and
      building, or leasing of the building of which the demised premises form a
      part, Owner shall have the right to transfer the security to the vendee or
      lessee, and Owner shall thereupon be released by Tenant from all liability
      for the return of such security; and Tenant agrees to look to the new
      Owner solely for the return of said security, and it is agreed mat the
      provisions hereof shall apply to every transfer or assignment made of the
      security to a new Owner. Tenant further covenants that it will not assign
      or encumber, or attempt to assign or encumber, the monies deposited herein
      as security, and that neither Owner nor its successors or assigns shall be
      bound by any such assignment encumbrance, attempted assignment or
      attempted encumbrance.

            

    

    

    
      	
              Estoppel
      Certificate:

            	
              35. Tenant, at any time,
      and from time to time, upon at least ten (10) days prior notice by Owner,
      shall execute, acknowledge and deliver to Owner, and/or to any other
      person, firm or corporation specified by Owner, a statement certifying
      that this lease is unmodified and in full force and effect (or, if mere
      have been modifications, that the same is in full force and effect as
      modified and stating the modifications), stating the dates to which the
      rent and additional rent have been paid, and stating whether or not there
      exists any default by Owner under this lease, and, if so, specifying each
      such default and such other information as shall be required of
      Tenant

            

    

    

    Successors

    
      	
              and
    Assigns:

            	
              36. The covenants,
      conditions and agreements contained in this lease shall bind and inure to
      the benefit of Owner and Tenant and their respective heirs, distributees,
      executors, administrators, successors, and except as otherwise provided in
      this lease, their assigns. Tenant shall look only to Owner's estate and
      interest id the land and building, for the satisfaction of Tenant's
      remedies for the collection of a judgment (or other judicial process)
      against Owner in the event of any default by Owner hereunder, and no other
      property or assets of such Owner (or any partner, member, officer or
      director thereof, disclosed or undisclosed), shall be subject to levy,
      execution or other enforcement procedure for me satisfaction of Tenant's
      remedies under, or with respect to, this lease, the relationship of .
      Owner and Tenant hereunder, or Tenant's use and occupancy of the demised
      premises.

            

    

    

    

    SEE RIDER
ATTACHED HERETO AND FORMING A PART HEREOF CONTAINING ARTICLES 37-76

    

    In Witness Whereof, Owner and
Tenant have respectively signed and sealed this lease as of the day and year
first above written.

    

    
      	
              Witness
      for Owner:

            	 
      	
              NEWMARK
      & COMPANY REAL ESTATE, INC., AS AGENT FOR: 38TH AND 8TH LLC, NEW 520
      GSH LLC NEW 520 TRIPLE CROWN LLC AND NEW 520 EIGHTH LLC

            
	 
      	 
      	 
      
	 
      	 
      	
              /s/
      Eric Gural

            
	 
      	 
      	 
      
	
              Witness
      for Tenant:

            	 
      	
              EMERGING
      VISION USA, INC.

            
	 
      	 
      	 
      
	 
      	 
      	
              By
      /s/ Glenn Spina

            
	 
      	 
      	
              President
      & CEO

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

    ACKNOWLEDGEMENT

    

    

    STATE
OF NEW YORK,

    

    SS.:

    

    COUNTY
OF NEW YORK

    

    On the
11th day of December in the year 2009, before me, the undersigned, a Notary
Public in and for said State, personally appeared Glenn Spina personally known
to me or proved to me on the basis of satisfactory evidence to be the
individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individuals), or the person upon behalf of which the individual(s) acted,
executed the instrument.

    

    
      	 
      	
              /s/
      Arlene Flohr

            
	 
      	
              NOTARY
      PUBLIC

            
	 
      	 
      
	 
      	 
      
	 
      	
              Arlene
      Flohr

            
	 
      	
              Notary
      Public, State of New York

            
	 
      	
              Qualified
      In New York County

            
	 
      	
              Llc.
      #31-4710657

            
	 
      	
              My
      Comm. Expires 9/17/2011

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

    RIDER
ATTACHED TO AND MADE A PART OF LEASE DATED DECEMBER 15, 2009  BETWEEN
NEWMARK & COMPANY REAL ESTATE, INC. AS AGENT FOR:  38TH AND
8TH LLC,
NEW 520 GSH LLC, NEW 520 TRIPLE CROWN, LLC AND NEW 520 EIGHTH LLC (AS
"LANDLORD") AND EMERGING VISION USA, INC. (AS "TENANT")

    

    Wherever
the terms, covenants and conditions contained in the printed portion of this
Lease shall be in conflict with any of the terms covenants and conditions in the
Additional Clauses 37 - 76 that follow, the Additional Clauses shall
prevail.

    

    

    
      	
              37.  

            	
              ELECTRIC
      CURRENT

            

    

    

    37.01           Landlord
shall furnish electricity to the Demised Premises on a submetered basis and
Tenant covenants and agrees to purchase the same from Landlord or Landlord's
designated agent at charges, terms and rates set, from time to time, during the
term of this Lease by Landlord, which shall not be higher than those specified
in the service classification in effect on December 1, 2009, pursuant to which
Landlord then purchased electric current from the public utility corporation
servicing the Building; provided, however, said charges shall be increased in
the same percentage as any percentage increase in the billing to Landlord for
electricity for the entire Building, by reason of increase in Landlord's
electric rates, charges, fuel adjustment or service classification or by taxes
or charges of any kind imposed thereon, or for any other such reason, subsequent
to December 1, 2009.  Any such percentage increase in Landlord's
billing for electricity shall be computed by the application of the average
consumption (energy and demand) of electricity for the entire Building for the
twelve (12) full months immediately prior to the rate change, other change, or
any changed methods of or rules on billing for same, on a consistent basis to
the new rate and to the service classification in effect on December 1,
2009  If the average consumption of electricity for the entire
Building for said prior twelve (12) months cannot reasonably be applied and used
with respect to changed methods of or rules on billing, then the percentage
increase shall be computed by the use of the average consumption (energy and
demand) for the entire Building for the first three (3) months after such
change, projected to a full twelve (12) months; and that same consumption, so
projected, shall be applied to the service classification in effect
on  December 1, 2009.  Where more than one meter measures
the service of Tenant in the Building, the service rendered through each meter
may be computed and billed separately in accordance with the provisions
hereof.  Bills therefore shall be rendered at such times as Landlord
may elect and the amount as computed from a meter shall be deemed to be, and be
paid as, additional rent.    In no event shall bills
rendered by Landlord pursuant to this Section 37 include any charge for
electricity furnished to portions of the Building other than the Demised
Premises.

    

    37.02           Tenant's
use of electric current in the Demised Premises shall not at any time exceed the
capacity of any of the electrical conductors and equipment in or otherwise
serving the Demised Premises.  Tenant shall not make or perform or
permit the making of, any alterations to wiring, installations or other
electrical facilities in or serving the Demised Premises without the prior
consent of the Landlord in each instance (which shall not be unreasonably
withheld or delayed.)  Should Landlord grant any such consent, all
additional risers or other equipment required therefor shall be installed by
Landlord and the cost thereof shall be paid by Tenant upon Landlord's demand;
any such work performed by Landlord shall be of workmanlike quality and the cost
thereof shall be comparable to costs payable for similar type installations
performed by Landlords of property similar to the Building.

    

    37.03           Unless the same shall arise due to the
willful or negligent act of Landlord, its agent, servant, employees, contractors
or subcontractors, Landlord shall not be liable in any way to Tenant for
any failure or defect in the supply or character of electric energy furnished to
the Demised Premises by reason of any requirement act or omission of the public
utility company servicing the Building with electricity or for any other reason
whatsoever.

    

    37.04           Landlord
reserves the right to discontinue furnishing electric energy to Tenant at any
time upon sixty (60) days' written notice to Tenant and from and after the
effective date of such termination, Landlord shall no longer be obligated to
furnish Tenant with electric energy, provided, however, that such termination
date may be extended for a time reasonably necessary for Tenant to make
arrangements to obtain electric service directly from the public utility company
servicing the Building.  If Landlord exercises such right of
termination this Lease shall remain unaffected thereby and shall continue in
full force and effect; and thereafter Tenant shall diligently arrange to obtain
electric service directly from the public utility company servicing the
Building, and may utilize the then existing electric feeders, risers and wiring
serving the Demised Premises to the extent available and safely capable of being
used for such purpose and only to the extent of Tenant's then authorized
connected load, Landlord shall be obligated to pay no part of any cost required
for Tenant's direct electric service.  Notwithstanding the provisions
of the first sentence of this Section 37.04, Landlord agrees that it shall not
discontinue furnishing electric energy to Tenant unless it has a bona fide
business reason for so doing.

    

    37.05           If
any tax (other than a Federal, State or City Income Tax) is imposed upon
Landlord's receipt from the sale or resale of electricity 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 shall be passed on to
and included in the bill of and paid by Tenant to Landlord.

    

    37.06           In
the event Tenant defaults in the payment of fixed rent more than twice in any
given twelve (12) month period , Landlord shall have the right to require Tenant
to place with Landlord a security deposit equal to charges for one (1) months
average consumption.  Such deposit shall be in addition to the
security deposit called for in Article   of this Lease, and shall
be payable within five (5) days of written notice by Landlord that such security
deposit is due and payable.  Landlord shall have the right to require
Tenant to increase the amount of the security deposit to an equivalent of two
(2) months charges in the event that Tenant's consumption or utility electric
rates shall increase.

    

    37.07           Notwithstanding
anything to the contrary contained herein, Tenant shall be charged for the
electric consumed by it for the Demised Premises based upon the Service
Classification rate for the usage as shown on the Tenant’s submeter or
submeters, (including all taxes, charges, terms, rates and other fees associated
with the Landlord providing electrical service) plus ten (10%)
percent.  Such taxes charges, terms, and rates may be revised by the
Utility Company servicing the Building, from time to time, and any change after
the aforesaid date in the taxes, charges terms and rates to Landlord in
connection with the supply of the electric current to the Building of which the
Demised Premises are a part, will be used in the calculation of the Tenant
billing.

    

    

    38.           ESCALATION INCREASE IN REAL
ESTATE TAXES

    

    
      	
               
      

            	
              Tenant
      shall pay to Landlord, as additional rent, tax escalation in accordance
      with this Article:

            

    

    

    
      	
               
      

            	
              38.01

            	
              For
      the purpose of this Article, the following definitions shall
      apply:

            

    

    

    (i)           The
term "Tax Base Year" shall mean the real estate taxes for the period beginning
January 1, 2010 and ending December 31, 2010.

    

     (ii)          The
term "The Percentage", for purposes of computing tax escalation, shall be deemed
to mean .70%.

    

    (iii)          The
term "the building” shall mean all of the land and the Building and improvements
located thereon, known as 261 West 36th
Street, 266 West 37th
Street and 520 Eighth Avenue collectively known as 520 Eighth Avenue, New York,
New York.

    

     (iv)           The
term "comparative year" shall mean the tax year following the year commencing
January 1, 2010 and ending December 31, 2010, and each subsequent period of
twelve (12) months.

    

    (v)      The
term "real estate taxes" shall mean the total of all taxes and special or other
assessments levied, assessed or imposed at any time by any governmental
authority upon or against the building project, and also any tax or assessment
levied, assessed or imposed at any time by any governmental authority in
connection with the receipt of income or rents from said building project to the
extent that same shall be in lieu of all or a portion of any of the aforesaid
taxes or assessments, or additions or increases thereof, upon or against said
Building Project.  If, due to a future change in the method of
taxation or in the taxing authority, or for any other reason, a franchise,
income, transit, profit or other tax or governmental imposition, however,
designated, shall be levied against Landlord in substitution in whole or in part
for the real estate taxes, or in lieu of additions to or increases of said real
estate taxes, then such franchise, income, transit, profit or other tax or
governmental imposition shall be deemed to be included within the definition of
"real estate taxes" for the purposes hereof.  As to special
assessments which are payable over a period of time extending beyond the term of
this Lease, only a pro rata portion thereof, covering the portion of the term of
this Lease unexpired at the time of the imposition of such assessment, shall be
included in "real estate taxes".

    

    38.02           In
the event that the real estate taxes payable for any comparative year shall
exceed the Tax Base Year, Tenant shall pay to Landlord, as additional rent for
such comparative year, an amount equal to The Percentage of the excess (“Tax
Payment”).  Before or after the start of each comparative year,
Landlord shall furnish to Tenant a statement of the real estate taxes payable
for such comparative year.  If the real estate taxes payable for such
comparative year exceed the Tax Base Year, additional rent for such comparative
year, in an amount equal to The Percentage of the excess, shall be due from
Tenant to Landlord, and shall be payable by Tenant to Landlord, within thirty
(30) days after Landlord's furnishing the aforesaid statement to
Tenant.  This
will be calculated by dividing the sum of the Real Estate Taxes payable for the
Building for the tax year of the City Of New York for 2009/2010 and for the tax
year of the City of New York for 2010/2011 by two. Tenant shall not be
subject to increases in real estate taxes for the twelve (12) month period
following lease commencement.

    

    38.03.           Notwithstanding
anything stated hereinabove, Landlord, in its sole discretion, may, upon written
notice to Tenant, institute a payment plan whereby Tenant’s Tax Payment with
respect to any comparative year, shall be payable to Landlord in advance, in
twelve (12) equal monthly installments payable on the first day of each month,
in amounts to be determined by Landlord.

    

    38.04           If
the installments payable with respect to any comparative year shall be less than
the Tax Payment for that comparative year, Tenant shall pay Landlord, as
additional rent, the difference between the Tax Payment for that comparative
year and the aggregate amount paid by Tenant on account of the Tax Payment for
that comparative year within thirty (30) days after Landlord renders a bill with
respect thereto.  If the installments payable with respect to any
comparative year shall exceed the Tax Payment for any comparative year, Tenant
shall be entitled to set off such excess, prorated over the next six (6) monthly
installments.

    

    38.05            The
benefit of any discount for any early payment or prepayment of real estate taxes
shall accrue solely to the benefit of Landlord, and such benefits shall not be
subtracted from the real estate taxes payable for any comparative year. If,
after Tenant shall have made a payment of additional rent under this paragraph,
Landlord shall receive a refund of any portion of the real estate taxes payable
for any comparative year on which such payment of additional rent shall have
been based, as a result of a reduction of such real estate taxes by final
determination of legal proceedings, settlement or otherwise, Landlord shall
promptly after receiving the refund pay to Tenant The Percentage of the refund
less The Percentage of expenses (including attorneys' and appraisers' fees)
incurred by Landlord in connection with any such application or
proceeding.  If, prior to the payment of taxes for any comparative
year, Landlord shall have obtained a reduction of that comparative year's
assessed valuation of the building project, and therefore of said taxes, then
the term "real estate taxes" for that comparative year shall be deemed to
include the amount of Landlord's expenses in obtaining such reduction in
assessed valuation, including attorneys' and appraisers' fees.

    

    
      	
              38.06

            	
              If
      the real estate taxes payable for the period(s) upon which the Tax Base
      Factor is based are reduced, the additional rent theretofore paid or
      payable hereunder for all comparative years shall be recomputed on the
      basis of such reduction, and Tenant shall pay to Landlord as additional
      rent, within thirty (30) days after being billed therefor, any deficiency
      between the amount of such additional rent as theretofore computed and the
      amount thereof due as the result of such recomputations.  Should
      the real estate taxes payable for such year be increased by final
      determination of legal proceedings, settlement or otherwise, then
      appropriate recomputation and adjustment also shall be
    made.

            

    

    

    38.07           The
statements of the real estate taxes to be furnished by Landlord as provided
above shall constitute a final determination as between Landlord and Tenant of
the real estate taxes for the periods represented thereby, unless Tenant within
thirty (30) days after they are furnished shall in writing challenge their
accuracy or their appropriateness.  If Tenant shall dispute said
statements, then, pending the resolution of such dispute, Tenant shall pay the
additional rent to Landlord in accordance with the statements furnished by
Landlord.

    

    
      	
              38.08

            	
              In
      no event shall the fixed annual rent under this Lease (exclusive of the
      additional rents under this Article) be reduced by virtue of this
      Article.

            

    

    

    
      	
              38.09

            	
              If
      the commencement date of this Lease occurs on a day which is not the first
      day of a comparative year, then the additional rent due hereunder for such
      comparative year shall be a proportionate share of said additional rent
      for the entire comparative year, said proportionate share to be based upon
      the length of time that the term of this Lease will be in existence during
      such comparative year.  Upon the date of any expiration or
      termination of this Lease (except termination because of Tenant's default)
      whether the same be the date hereinbefore set forth for the expiration of
      the term or any prior or subsequent date, a proportionate share of said
      additional rent for the comparative year during which such expiration or
      termination occurs shall immediately become due and payable by Tenant to
      Landlord, if it was not theretofore already billed and paid. The said
      proportionate share shall be based upon the length of time that this Lease
      shall have been in existence during such comparative
      year.  Landlord shall promptly cause statements of said
      additional rent for that comparative year to be prepared and furnished to
      Tenant.  Landlord and Tenant shall thereupon make appropriate
      adjustments of amounts then owing. Landlord's and Tenant's obligations to
      make the adjustments referred to above shall survive any expiration or
      termination of this Lease.

            

    

    

    38.10            Any
delay or failure of Landlord in billing any tax escalation hereinabove provided
shall not constitute a waiver of or in any way impair the continuing obligation
of Tenant to pay such tax escalation hereunder.

    

    

    39.           ANNUAL RENT
INCREASE

    

    Tenant agrees to pay to Landlord a
2.5%
increase in base rent excluding electric, in each and every year, commencing on
the first day of the third
(3rd) anniversary of the Possession
Date and continuing on each anniversary thereafter for the term of the
Lease.  The increase will be compounded and cumulative.

    

    Example:

    Annual
Base
Rent:                                $10,000.00
(Year 1)

    Increased
Annual

    Base
Rent:                                $10,000.00
x 2.5% = $250.00 + $10,000.00 = $10,250.00 (Year
2)

    Increased
Annual

    Base
Rent:                                $10,250.00
x 2.5% = $256.25 + $10,250.00 = $10,506.25 (Year
3)

    

    

    40.           FUEL

    

    40.01           Tenant
shall pay, as additional rent, collectible as such, an amount equal to .70% of
Landlord's increased cost of fuel, if any, for the Building of which the Demised
Premises forms a part for each calendar year of the term or portion thereof over
the cost of fuel for the calendar year 2009. At the end of each calendar year,
Landlord shall calculate such increased cost and bill Tenant for its share,
which bill shall be due and payable with the next regular installment of
rent.

    

    40.02           This
obligation shall survive termination of this Lease or any renewals thereof,
except that should Tenant's term expire other than at the end of a calendar
year, Tenant shall only be obligated pro rata for the number of months in such
year which formed a part of its term.  Landlord's fuel bills for the
years in question shall be conclusive as to cost.

    

    

    41.           USE

    

    41.01           Tenant
covenants that Tenant shall use and occupy the Demised Premises for the conduct
of Tenant's business, which is executive, general and administrative offices and
for no other purpose whatsoever.  Tenant shall not make nor permit to
be made any use of the Premises which would violate the terms of this Agreement,
cause an excessive density of traffic or unreasonably interfere with or cause
excessive demands on any of the Building's services or which, directly or
indirectly, is forbidden by statute, ordinance or government regulations, or
which may invalidate or increase the premium of any policy of insurance carried
on the Building. Further, Tenant shall not suffer or permit the Premises to be
used in any manner or permit anything to be brought into or kept in the Premises
which in the sole reasonable judgment of the Landlord, shall in any way impair
or tend to impair the character, reputation or appearance of the
Building.

     

    41.02           Tenant
shall not bring or permit to be brought or kept in or on the Demised Premises,
any inflammable, combustible, explosive or hazardous fluid, material, chemical
or substance, or cause or permit any odors of cooking or other processes, or any
unusual or other objectionable odors to permeate in or emanate from the Demised
Premises other than commonly used office supplies and chemicals such as, without
limitation, cleansers, general purpose cleaners, markerboard surface cleaner,
office machine developer, toner, fuser, fuser oil and printer cartridges,
alcohol cleaning swaps and wipes, liquid paper and rubber cement, all of which
shall be used, stored, handled and disposed of in accordance with applicable
environmental laws, rules and regulations. "Hazardous Materials" shall mean any
and all hazardous or toxic materials, substances, pollutants, contaminants and
wastes and all elements and compounds, including but not limited to, radioactive
substance, polychlorinated biphenyls, methane, volatile hydrocarbons, industrial
solvents, ambient air and water, or any other material or substance which may
cause or constitute a health, safety or other environmental hazard subject to
any Environmental Law.

     

    41.03           Tenant
acknowledges and agrees that Tenant's failure to comply with the foregoing
covenants shall constitute a breach of the Lease and Landlord shall be entitled
to exercise any and all of its rights and remedies under the Lease to cure such
default, including but not limited to, reducing the number of Permitted Invitees
and the default shall be considered in the same manner, as a default under the
Lease and Landlord shall be entitled to terminate the Lease consistent with the
provisions governing defaults.

    

    

    42.           UTILITIES

    

    42.01           Landlord
shall provide at Landlord’s expense, water for ordinary lavatory, sprinkler and
kitchen purposes. Tenant shall pay all charges for gas, heating of water and
other utilities only in the event that it is used in the Demised
Premises.

    

    

    43.           TENANT'S
INSTALLATIONS

    

    43.01           Notwithstanding
anything hereinbefore contained to the contrary, provided Tenant complies with
all of the laws, orders, rules and regulations of the governmental authorities
and the Fire Insurance Rating Organization having jurisdiction thereof and the
local Board of Fire Underwriters, or any other similar body, Tenant shall have
the right, at its own cost and expense, to install such machinery, equipment and
fixtures as may be required for the proper conduct of Tenant's business, except
that Landlord's prior consent shall be required for any installation requiring
structural alteration or changes to the Demised Premises.  Subject to
the provisions of this Article, any and all moveable machinery, equipment, and
fixtures installed by tenant (sometimes herein referred to as "Tenant's
Property") shall remain personal notwithstanding the fact that it may be affixed
or attached to the realty, and shall, during the term of this Lease, or any
extension or renewal thereof,  Tenant shall deliver the Demised
Premises to Landlord in the same condition as upon the commencement of the term
hereof, reasonable wear and tear excepted.   Prior to the
expiration of the term, or sooner termination thereof, Tenant shall, at its own
cost and expense, remove from the Demised Premises all of Tenant's personal
Property and Tenant shall repair any damage to the Demised Premises resulting
from such removal. Tenant shall ascertain from Landlord at the time the Tenant’s
plans are approved by Landlord, whether Landlord desires to have any
non-moveable fixtures, machinery and/or equipment permanently installed by
Tenant removed from the Demised Premises prior to the expiration of such term or
the sooner termination thereof and, if Landlord shall so desire, Tenant shall,
prior the end of the term hereof, remove such indicated items and restore the
Demised Premises with respect thereto, to the same condition as upon the
commencement of the term hereof, reasonable wear and tear excepted.
..Notwithstanding anything herein to the contrary, Landlord shall remove any
non-moveable fixtures, machinery and/or equipment permanently installed by
Tenant in the Demised Premises, at Landlord’s sole cost and expense. All fixtures, machinery
and equipment installed by Tenant, in the Demised Premises and become the
property of Landlord, remaining within the Demised Premises after the expiration
of such term or sooner termination thereof and after Tenant is no longer in
possession of the Demised Premises shall, at Landlord's option, either (i)
become the property of Landlord, free of any claim by Tenant or any person
claiming through Tenant, or (ii) be removed and disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon
Tenant.  Machinery, fixtures, chattels, or equipment, if any,
furnished or installed by Tenant, the cost of which is to be borne by Landlord,
shall become the property of Landlord upon payment, therefor by Landlord or
reimbursement of Tenant by Landlord, as the case may be, and shall not be
removed by Tenant.   Tenant's obligations under this Article
shall survive the expiration or sooner termination of the term
hereof.

    

    

    44.           INDEMNITY-LIABILITY
INSURANCE

    

    44.01           Tenant
agrees to indemnify and save Landlord harmless against and from any and all
claims by or on behalf of any person or persons, firm or firms, corporation or
corporations, arising from any work or thing whatsoever done by or on behalf of
Tenant, in or about the Demised Premises, unless caused by any act or
negligence of Landlord, its agents, employees, licensees, contractors or
servants and will further indemnify and save Landlord harmless against and from
any and all claims arising from any breach or default on the part of Tenant in
the performance of any covenant or agreement on the part of Tenant to be
performed, pursuant to the terms of this Lease, or arising from any act or
negligence of Tenant, or any of its agents, contractors, servants, employees or
licensees, and from and against all costs, reasonable counsel fees, expenses and
liabilities incurred in or about any such claim or action or proceeding brought
thereon; and in case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant, upon notice from Landlord covenants to resist
or defend, at Tenant's expense, such action or proceeding by counsel reasonably
satisfactory to Landlord.

    

    44.02           Tenant
covenants to provide on or before the commencement date of the term hereof and
to keep in force during the term hereof for the benefit of Landlord and Tenant a
comprehensive policy of liability insurance protecting Landlord and Tenant
against any liability whatsoever occasioned by accident on or about the Demised
Premises or any appurtenances thereto.  Such policy is to be written
by good and solvent insurance companies satisfactory to Landlord, and the limits
of liability thereunder shall not be less than the amount of One Million Five
Hundred Thousand Dollars ($1,500,000) per occurrence for bodily or personal
injury including death and in the amount of Five Hundred Thousand ($500,000)
Dollars in respect of property damage.  Such insurance may be carried
under a blanket policy covering the Demised Premises and other locations of
Tenant, if any. All insurance maintained by Tenant pursuant to this paragraph
shall name: 38th And
8th LLC,
New 520 GSH LLC, New 520 Triple Crown, LLC and New 520 Eighth LLC. as Landlord
and Newmark & Company Real Estate, Inc., as Agent, as certificate holders
and additional insureds and shall be paid fully by Tenant when obtained. Prior
to the time such insurance is first required to be carried by Tenant and
thereafter, at least fifteen (15) days prior to the expiration of any such
policy, Tenant agrees to deliver to Landlord either a duplicate original of the
aforesaid policy or two (2) separate Accord certificates evidencing such
insurance may not be cancelled except upon ten (10) days' notice to
Landlord.  Tenant's failure to provide and keep in force the
aforementioned insurance shall be regarded as a material default hereunder,
entitling Landlord to exercise any or all of the remedies as provided in this
Lease in the event of Tenant's default.

    

    

    45.           TENANT'S
CERTIFICATE

    

    45.01           Tenant
shall, without charge, at any time and from time to time, within ten (10) days
after request by Landlord, certify by written instrument, duly executed,
acknowledged and delivered, to any mortgagee, assignee or any mortgage or
purchaser, or any proposed mortgagee, assignee of any mortgage or purchaser, or
any other person, firm or corporation specified by Landlord:

    

    
      	
               
      

            	
              (a)

            	
              that
      this Lease is unmodified and in full force and effect (or, if there has
      been modification, that the same is in full force and effect as modified
      and stating the modifications);

            

    

    

    
      	
               
      

            	
              (b)

            	
              whether
      or not there are then existing any set-offs or defenses against the
      enforcement of any of the agreements, terms, covenants or conditions
      hereof upon the part of Tenant to be performed or complied with (and, if
      so, specifying the same); and

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      dates, if any, to which the rental and other charges hereunder have been
      paid in advance.

            

    

    

    

    46.           MODIFICATION FOR
MORTGAGES

    

    46.01           If,
in connection with obtaining financing or refinancing for the Building of which
the Demised Premises form a part, a banking, insurance or other institution
lender shall request reasonable modifications to this Lease as a condition to
such financing or refinancing, Tenant will not unreasonably withhold, delay or
defer its consent thereto, provided that such modifications do not increase the
obligations nor diminish any rights of Tenant hereunder (except, perhaps, to the
extent that Tenant may be required to give notices of any defaults by Landlord
to such lender and/or permit the curing of such defaults by such lender together
with the granting of such additional time for such curing as may be required for
such lender to get possession of said Building) or materially adversely affect
the leasehold interest hereby created.  In no event shall a
requirement that the consent of any such lender be given for any modification,
termination or surrender of this Lease be deemed to materially adversely affect
the leasehold interest hereby created.

    

    

    47.           BROKER

    

    47.01           Tenant
and Landlord each represents and warrants to the other that it has dealt with no
broker except Newmark & Co. Real Estate, Inc. (“Broker") in connection with
the execution of this Lease or the showing of the Demised Premises and the
breaching party agrees to hold and save the non-breaching party harmless from
and against any and all liabilities from any claims of any other broker
(including, without imitation, the cost of reasonable counsel fees in connection
with the defense of any such claims incurred by reason of a breach by the
indemnifying party of the aforesaid representation and warranty). Landlord
agrees to pay the Broker a commission pursuant to a separate
agreement.  The provisions of this Article shall survive the
expiration or earlier termination of this Lease.

    

    

    48.           "AS-IS"
CONDITION

    

    48.01           Tenant
has examined and inspected the Demised Premises and Tenant agrees to accept said
Demised Premises in their as-is condition existing on the commencement date of
the term hereof, subject to the completion of Landlord’s Work as provided
hereunder.

    

    

    49.           EXCULPATORY
CLAUSE

    

    490.01                      If
the Landlord or any successor in interest be an individual, joint venture,
tenancy in common, co-partnership, unincorporated association, or other
unincorporated aggregate of individuals or a corporation (all of which is
referred to below, individually and collectively, as a "landlord entity") then,
anything elsewhere to the contrary notwithstanding, Tenant shall look solely to
the estate and property of such landlord entity in the land and Building of
which the Demised Premises are a part, for the satisfaction of Tenant's remedies
for the collection of a judgement (or other judicial process) requiring the
payment of money by Landlord in the event of any default or breach by Landlord
with respect to any of the terms, covenants and conditions of the Lease to be
observed and/or performed by Landlord, and no other property or assets of such
Landlord entity shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies.

    

    

    50.           AIR
CONDITIONING

    

    50.01           Tenant
shall be permitted the use of and to operate the air conditioning equipment
serving the Demised Premises (the "Air Conditioning Unit"), which Landlord
agrees to deliver to Tenant in working order. Tenant acknowledges and agrees
that the Air Conditioning Unit is Landlord's property; however, Tenant shall
nevertheless, keep, maintain, and repair, restore and replace the ducts,
dampers, registers, grilles and appurtenances utilized in connection therewith;
and, in addition, Tenant shall at all times during the term hereof contract for
and maintain regular service of said Air Conditioning Unit and related equipment
with a recognized maintenance company and shall forward to Landlord duplicate
executed original copies of such contract and all renewals and modifications
thereof. Notwithstanding the foregoing provisions of this Section 50.01, unless
the same shall arise from the negligent or willful act or omission of Tenant,
its agents or employees, Landlord shall, at Landlord's sole cost and expense, be
responsible for the repair, maintenance, replacement and restoration of the
compressor of the Air Conditioning Unit. Tenant shall keep said contract in full
force and effect during the term of this Lease.  If Tenant fails to
make such repairs, restoration or replacements to, and maintain, such Air
Conditioning Unit and related equipment; or if Tenant fails to obtain or keep
the aforesaid service contract in force and effect, the same may be made,
performed, obtained or maintained by Landlord at the expense of Tenant and such
expense shall be collectible as additional rent and shall be paid by Tenant
within 15 days after rendition of a bill therefor.  Any restoration or
replacements of all or any part of the Air Conditioning Unit and related
equipment shall be in quality and class equal to the original work of
installations.  Tenant shall comply with all of the laws, orders,
rules and regulations including  payments of all fees, permits and
authorizations of all governmental authorities having jurisdiction
thereof,  including the City of New York Fire Bureau of Fire
Prevention, local board of fire underwriters or any similar body at Tenant's
sole cost and expense.

    

    50.02           Use
of the Demised Premises, or any part thereof, in a manner exceeding the design
conditions thereof (including occupancy and connected electrical load) for
heating and air conditioning service in the Demised Premises, or rearrangement
of partitioning which interferes with normal heating and air conditioning
service in the Demised Premises, or the use of computer or data processing
machines, may require changes in the systems servicing the Demised
Premises.  Such changes, so occasioned, shall be made by Landlord, at
Tenant's expense.  Tenant agrees to lower and keep closed the venetian
blinds or other window coverings in the Demised Premises, whenever required, for
the proper operation of the air conditioning service.  No supplemental
heating, ventilating or air conditioning equipment shall be installed or
utilized by Tenant in the Demised Premises without Landlord's prior consent,
which consent shall not be
unreasonably withheld or delayed.

    

    50.03           Landlord
reserves the right to interrupt, curtail or suspend the services required to be
furnished by Landlord under this Article when the necessity therefor arises by
reason of accident, emergency, mechanical breakdown or when required by any law,
order or regulation of any Federal, State, County or Municipal authority or for
any other cause beyond the reasonable control of Landlord.  Landlord
shall use due diligence to complete all required repairs or other necessary work
as quickly as possible so that Tenant's inconvenience resulting therefrom may be
for as short a period of time as circumstances will permit, except that nothing
shall be construed so as to require Landlord to employ overtime
help.  In the event
there is an interruption or suspension of such services for more than
ten
(10) business days after written notice thereof is provided to Landlord and due
to such failure of services Tenant is unable to reasonably conduct its business
in the Demised Premises and Tenant vacates the Demised Premises, then beginning
after such ten (10) day period, Tenant’s obligation to pay Fixed Annual Rent and
Additional Rent hereunder shall abate until such failure is cured, provided such
failure of services is not as result of the negligence or willful misconduct of
the Tenant, its agents, servants, employees, contractors or
subcontractors.  However, there shall be no rent abatement in the
event of any force of nature (including but not limited to, a tornado, flooding,
hurricane or earthquake) or any other event beyond the reasonable control of
Landlord (including but not limited to war, terrorism, black outs or strike) it
being agreed that financial inability to perform shall not be deemed an event
beyond the reasonable control of Landlord.   Essential services
as used herein shall mean access, electricity, HVAC, water and all elevator
service.

    

    50.04           Notwithstanding
anything to the contrary aforesaid, Tenant agrees that it shall pay, as
additional rent the cost of the electric current used in the operation of such
equipment, which electrical current shall be measured and paid pursuant to the
terms of Article 37 hereof.

    

    

    51.           ASSIGNMENT AND
SUBLETTING

    

    A.           Notwithstanding
anything to the contrary contained in Article 11 of this Lease, Tenant may not
sublet all or a portion of the Demised Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld,
provided:

    

    (i)      There shall not be more
than two (2) subtenants at any one time;

    

    
      	
               
      

            	
              (ii)

            	
              A
      copy of any proposed sublease shall be submitted to Landlord at least
      twenty (20) days prior to effective date
  thereof;

            

    

    

    
      	
               
      

            	 	
              (iii)

            	
              The
      sublease must provide that the same is subject and subordinate to all of
      the terms and conditions of this
Lease;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              The
      subtenant is a reputable party of reasonable financial worth considering
      the responsibilities involved and Tenant shall have provided Landlord with
      reasonable proof thereof;

            

    

    

    
      	
               
      

            	
              (v)

            	
              No
      subletting shall relieve tenant of its obligations or liabilities
      hereunder, or deemed consent to a further
  subletting;

            

    

    

    
      	
               
      

            	
              (vi)

            	
              Tenant
      shall not then be in default under any of the terms, covenants,
      provisions, agreements or conditions of this
  Lease;

            

    

    

    
      	
               
      

            	
              (vii)

            	
              The
      proposed subtenant shall not be a then existing tenant or occupant of the
      building of which the Demised Premises are a part;
  and

            

    

    

    
      	
               
      

            	
              (viii)

            	
              Tenant shall pay as additional
      rent the reasonable cost of Landlord's attorney's fees in connection with
      each subletting in an amount not to exceed $500.00 per
      transaction.

            

    

    
      	
               
      

            	
              .

            

    

    

    B.           Anything
to the contrary contained in Article 11 herein notwithstanding, Tenant may not
assign its interest in this Lease without Landlord's prior written consent,
which consent shall not be unreasonably withheld, provided:

    

    
      	
               
      

            	
              (i)

            	
              A
      true copy of such assignment shall be submitted to Landlord at least
      twenty (20) days prior to the execution and delivery thereof; under any of
      the terms, covenants, provisions, agreements and conditions or this
      Lease;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Such
      assignee shall execute, acknowledge and deliver to Landlord, prior to the
      effective date of the proposed Assignment an agreement in form and
      substance reasonably satisfactory to Landlord whereby such assignee shall
      agree to be bound by and upon all of the covenants, agreements, terms,
      provisions and conditions set forth in this lease on the part of the
      Tenant to be performed;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              The
      assignee is a reputable party of reasonable financial worth considering
      the responsibilities involved and Tenant shall have provided Landlord with
      reasonable proof thereof;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              The
      assignee shall not be a then existing tenant or occupant of the Building
      of which the Demised Premises are a
part.

            

    

    

    C.           Anything
to the contrary hereinbefore contained notwithstanding, should Tenant desire to
sublet or assign more than fifty (50%) percent of the Demised Premises, it shall
give written notice (which notice shall specify the area proposed to be sublet
and the effective date of such subletting or assignment) of its intention to do
so to Landlord sixty (60) days or more, before the effective date of such
proposed subletting, or assignment, and Landlord may, at any time within thirty
(30) days after receipt of such notice from Tenant, cancel this Lease by giving
Tenant written notice of its intention to do so, in which event such
cancellation shall become effective on the effective date of such proposed
subletting or assignment, with the same force and effect as if said cancellation
date were the date originally set forth as the expiration date of the term of
this Lease, provided that Tenant may rescind such termination by withdrawing its
request to assign or sublet within fifteen (15) days after Landlord has
exercised such cancellation right.

    

    D.           It
is expressly understood and agreed that there shall be no further subletting or
assignment unless the same are in strict compliance with Article 11 or this
Article 51.

    

    E.           Tenant
shall have the right to sublet the premises without the use of a licensed real
estate broker.

    

    F.           In
the event of any subletting or assignment pursuant to the provisions of this
Article, Landlord shall have the right, upon five (5) days' prior written notice
to Tenant, to require Tenant thereafter to pay to Landlord a sum equal to 50%
of  (i) any rent or other consideration paid to Tenant by any
subtenant or assignee which is in excess of the rent then being paid by Tenant
to Landlord pursuant to the terms hereof, and 50% of (ii) any other profit or
gain realized by Tenant from any such subletting or assignment, less reasonable
legal fees, brokerage commission, free rent  and improvement costs
incurred by Tenant in connection with such
transaction.    All sums payable hereunder by Tenant shall
be paid to Landlord as additional rent immediately upon receipt thereof by
Tenant.

    

    G.           Notwithstanding
anything to the contrary contained in Article 11 or this Article 51, Tenant
shall have the privilege, without the consent of Landlord, to assign its
interest in this Lease (i) to any entity which is a successor to Tenant either
by merger or consolidation, (ii) to a purchaser of all or substantially all of
Tenant's assets or its outstanding Capital Stock, or (iii) other entity (an
"Affiliate")
which shall (1) control, (2) be under the control of,  (3) be under
common control with Tenant to its Parent Company. Tenant may also sublease all
or any portion of the Demised Premises to any entity described above in clauses
(1), (2) and (3), without the consent of Landlord.  Any assignment or
subletting pursuant to the previous sentences of this Section G is subject to
the satisfaction of the conditions that, (a) any such assignee or subtenant
shall continue to use the Demised Premises for the conduct of the same business
as Tenant was conducting prior to such assignment or subtenancy, and (b)
provided, Tenant, remains obligated for the performance and observance of the
covenants and conditions of this Lease through the term of the
Lease.  Tenant shall, within ten (10) business days after execution
thereof, deliver to Landlord (a) a duplicate original instrument of assignment
in form and substance reasonably satisfactory to Landlord, duly executed by
Tenant, and (b) an instrument in form and substance reasonably satisfactory to
Landlord, duly executed by the assignee, in which such assignee shall assume
observance and performance of, and agree to be personally bound by, all of the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed.  The transfer of shares of Tenant (if Tenant is a
corporation or trust) for purposes of this Section E shall not include the sale
of shares by persons other than those deemed "insiders" within the meaning of
the Securities Exchange Act of 1934, as amended, which sale is effected through
the "over-the-counter market" or through any recognized stock
exchange.  A transfer of stock among current stockholders of Tenant or
a transfer of stock amount the current stockholders of Tenant and their
immediate families (i.e. spouses, parents, brothers, sisters, children,
grandchildren, or any spouse of any such parent, brother, sister, child or
grandchildren) or a transfer of stock by will or devise or to a trust for their
benefit shall not constitute an assignment for the purposes of this Lease. The
Transfers recited in this Section G shall be referred to as “Permitted
Transfers” and the Landlord shall waive the fees recited in Section A (viii)
above.

    

    

    

    52.           ATTORNMENT

    

    52.01           Tenant
agrees that if by reason of default on the part of Landlord herein, under any
ground or underlying lease or any leasehold mortgage affecting Landlord's
interest (as ground lessee), a ground or underlying lessor or a leasehold
mortgagee shall enter into and become possessed of the real property of which
the Demised Premises form a part, or any part or parts of such real property,
either through possession or foreclosure action or proceedings, or through the
issuance and delivery of a new lease of the Premises covered by the ground or
underlying lease to said leasehold mortgagee, then, if this Lease is in full
force and effect at such time, Tenant shall attorn to such lessor or such
leasehold mortgagee, as its Landlord; and in such event, such lessor or
leasehold mortgagee shall not be liable to Tenant for any defaults theretofore
committed by Landlord and no such default shall give rise to any rights of
offset or deduction against the rents payable under this Lease.

    

    52.02           The provisions for attornment
hereinbefore set forth shall not require the execution of any further
instrument.  However, if any such lessor or mortgagee to which Tenant
agrees to attorn, as aforesaid, reasonably requests a further instrument
expressing such attornment, Tenant agrees to execute the same promptly and if
Tenant fails to so,  same shall be deemed a default
hereunder.

     
 

    

    53.           SAVING
PROVISION

    

    53.01           If
any provision of this Lease, or its application to any situation shall be
invalid and unenforceable to any extent, the remainder of this Lease, or the
application thereof to situations other than that as to which it is invalid, or
unenforceable, shall not be affected thereby, and every provision of this Lease
shall be valid and enforceable to the fullest extent permitted by
law.

    

    

    54.           LEASE NOT BINDING UNLESS
EXECUTED

    

    54.01           Submission
by Landlord of the within Lease for execution by Tenant, shall confer no rights
nor impose any obligations on either party unless and until both Landlord and
Tenant shall have executed this Lease and duplicate originals thereof shall have
been delivered to the respective parties.

    

    

    55.           LATE PAYMENT
CLAUSE

    

    55.01           It
is agreed that the rental under this Lease is due and payable in equal monthly
installments in advance on the first day of each month during the entire lease
term.  In the event that any monthly installment of rent, or any other
payment required to be made by the Tenant under this Lease shall be ten (10)
days overdue, a late charge of .05 dollars per every one dollar owed may be
charged by the Landlord for each month, or fraction of each month, from its due
date until paid, for the purpose of defraying the expenses incurred in handling
delinquent payments.

    

    

    56.           ENTIRE
AGREEMENT

    

    56.01           No
earlier statement or prior written matter shall have any force or
effect.  Tenant agrees that it is not relying on any representations
or agreements other than those contained in this Lease.  This
agreement shall not be modified or cancelled except by writing subscribed by all
the parties.

    

    

    57.           
WINDOW
CLEANING

    

    57.01 Tenant,
at its expense, and in a manner satisfactory to Landlord, shall cause the
Demised Premises, including the exterior and interior of the windows thereof, to
be kept clean.  Tenant shall utilize for such cleaning only persons or
contractors approved by Landlord (at Landlord's sole reasonable
discretion).

    

    57.02           Tenant
shall regularly and in no event less frequently than once every twenty-six (26)
weeks clean the interior and exterior of the windows surrounding the Demised
Premises.  Such cleaning shall be performed in conformity with the
requirements of the Labor Law of the State of New York.

    

    

    58.           SORTING AND SEPARATION OF
REFUSE AND TRASH

    

    58.01           Tenant
shall, at Tenant's expense, remove all Tenants’ rubbish and trash to such area
of the building and at such time as Landlord shall designate, at Tenant’s sole
cost and expense. Tenant covenants and agrees, at its sole cost and expense, to
comply with all present and future laws, orders and regulations of all state,
federal, municipal and local governments, departments, commissions and board
regarding the collection, sorting, separation and recycling of waste products,
garbage, refuse and trash. Tenant shall sort and separate such waste products,
garbage, refuse and trash into such categories as provided by law. Each
separately sorted category of waste products, garbage and trash shall be placed
in separate receptacles reasonably approved by Landlord. Such separate
receptacles may at Landlord's option, be removed from the Demised Premises in
accordance with a collection schedule prescribed by law. Landlord reserves the
right to refuse to collect or accept from Tenant any waste products, garbage,
refuse or trash, which is, not separate and sorted as required by law and to
require Tenant to arrange for such collection, at Tenant's sole cost and expense
utilizing a contractor approved by Landlord. Tenant shall pay all costs,
expenses, fines, penalties or damages which may be imposed on Landlord or Tenant
by reason of Tenant's failure to comply with the provisions of this Article,
and, at Tenant's sole cost and expense, shall indemnify, defend and hold
Landlord harmless, including legal fees and expenses) from and against any
actions, claims suits arising from such non-compliance, utilizing counsel
reasonably satisfactory to Landlord.

    

    

    59.           OFFICE
MAINTENANCE

    

    59.01           Tenant,
at its sole cost and expense, shall provide for all waxing, polishing, cleaning,
lamp replacement and maintenance work in the Demised Premises. Tenant shall not
employ any contractor without Landlord's prior written consent, which shall not
be unreasonably withheld or delayed.

    

    

    60.           HOLDING
OVER

    

    60.01           
If tenant holds over in possession after the expiration or sooner termination of
the original term or of any extended term of this lease, such holding over shall
not be deemed to extend the term or renew the lease, but such holding over
thereafter shall continue upon the covenants and conditions herein set forth
except that the charge for use and occupancy of such holding over for each
calendar month or part thereof (even if such part shall be a small fraction of a
calendar month) shall be the sum of:

    

    
      	
               
      

            	
              (a)

            	
              1/12
      of the highest annual rent rate set forth on page one of this lease, times
      1.5, plus

            

    

    

    
      	
               
      

            	
              (b)

            	
              1/12
      of the net increase, if any, in annual fixed rental due solely to
      increases in the cost of the value of electric service furnished to the
      premises in effect on the last day of the term of the lease,
      plus

            

    

    

    
      	
               
      

            	
              (c)

            	
              1/12
      of all other items of annual additional rental, which annual additional
      rental would have been payable pursuant to this lease had this lease not
      expired, plus

            

    

    

    
      	
               
      

            	
              (d)

            	
              those
      other items of additional rent (not annual additional rent) which would
      have been payable monthly pursuant to this lease, had this lease not
      expired, which total sum tenant agrees to pay to landlord promptly upon
      demand, in full, without set-off or deduction.  Neither the
      billing nor the collection of any money for use and occupancy in the above
      amount shall be deemed a waiver of any right of Landlord to collect
      damages for Tenant's failure to vacate the Demised Premises after the
      expiration or sooner termination of this lease.  The aforesaid
      provisions of this Article shall survive the expiration or sooner
      termination of this lease.

            

    

    

    

    

    61.           GOVERNMENTAL
REGULATIONS

    

    61.01           If,
at any time during the term of this lease, Landlord expends any sums for
alterations or improvements to the building which are required to be made
pursuant to any law, ordinance or governmental regulation, or any portion of
such law ordinance or governmental regulation, which becomes effective after the
date hereof, Tenant shall pay to Landlord, as additional rent, the same
percentage of such cost as is set forth in the provision of this lease which
requires Tenant to pay increases in Real Estate Taxes, within ten (10) days
after demand therefor.  If, however, the cost of such alteration or
improvement is one which is required to be amortized over a period of time
pursuant to applicable governmental regulations, Tenant shall pay to Landlord,
as additional rent, during each year in which occurs any part of the lease term,
the above-stated percentage of the reasonable annual amortization of the cost of
the alteration or improvement made.  For the purposes of this Article,
the cost of any alteration or improvement made shall be deemed to include the
cost of preparing any necessary plans and the fees for filing such.

    

    

                62.      SECURITY

    

    62.01 The
sum of $45,066.68
representing security (referred to as "Security") for the faithful
performance and observance by Tenant of the terms, covenants and conditions of
this lease on the Tenant's part to be observed and performed is due and payable
at the time of the execution and delivery of this lease.  In the event
of any default by Tenant in the observance or performance of any of the terms,
covenants or conditions of this lease on the part of the Tenant to be observed
or performed, including, but not limited to, any default in the payment when due
of any monthly installment of the Fixed Rent or of any additional rent at the expiration of applicable notice
and grace periods, Landlord may use or apply all or any part of the
Security for the payment to Landlord for Tenant's account of any sum or sums due
under this lease, without thereby waiving any other rights and remedies of
Landlord with respect to such default.  Tenant agrees to replenish all
or any part of the Security so used or applied during the demised
term.  After (i) the expiration date or any other date upon which the
demised term shall expire and come to an end and (ii) the full observance and
performance by Tenant of all of the terms, covenants and conditions of this
lease on the Tenant's part to be observed or performed, including but not
limited, the provision of Article 22, Landlord shall return to Tenant the
balance of the Security then held or retained by Landlord.  Landlord
agrees that, unless prohibited by law or by the general policies of lending
institutions in New York City, Landlord shall deposit the Security in an
interest bearing savings account with a bank selected by Landlord, in which
event all interest accruing thereon, except for a service charge of (1%)
percent, shall be added to and become part of the Security and shall be retained
by Landlord under the same conditions as the sum originally deposited as
Security.  Tenant agrees that Tenant shall not assign or encumber any
part of the security, and no assignment or encumbrance by Tenant of all or any
part of the Security shall be binding upon Landlord, whether made prior to,
during, or after the demised term.  Landlord shall not be required to
exhaust its remedies against Tenant or against the Security before having
recourse by Landlord to any form of security held by Landlord and recourse by
the Landlord to any form of security shall not effect any remedies of Landlord
which are provided in this lease or which are available to Landlord in law or
equity.  In the event of any sale, assignment or transfer by Landlord
named herein (or any subsequent Landlord) of its interest in the Building as
Landlord or lessee, Landlord (or such subsequent Landlord) shall have the right
to assign or transfer the Security to its grantee, assignee, or transferee and,
in the event of any such assignment or transfer, Landlord named herein (or such
subsequent landlord) shall have no liability to Tenant for the return of the
Security and Tenant shall look solely to the grantee, assignee or transferee for
such return.  A lease of the entire building shall be deemed a
transfer within the meaning of the foregoing sentence.

    

    62.02           In
lieu of cash, the Landlord agrees to accept an irrevocable Letter of Credit,
which automatically renews itself annually in the amounts as provided hereunder,
without amendment, is transferable, (if transferred by Landlord, at Landlord’s
sole cost and expense), partial drawings are permitted. The Letter of Credit
shall provide that:

    

    
      	
               
      

            	
              The
      Issuing Bank shall pay to the Landlord or its designee up to the face
      amount of Letter of Credit upon presentation of only (a) Letter of Credit
      and (b) a certificate executed by an officer of the Landlord stating that
      “Tenant is in default of the Lease, between Landlord and Tenant beyond any
      applicable grace period, $ [amount to be designated] is due under such
      Lease and you are hereby instructed to pay such amount to NEWMARK &
      COMPANY REAL ESTATE, INC. AS AGENT FOR:  38TH AND 8TH
      LLC, NEW 520 GSH LLC, NEW 520 TRIPLE CROWN, LLC AND NEW 520 EIGHTH LLC.
      under the Letter of Credit No. ____, dated _____, 2009, issued by ________
      to Landlord, or stating that Tenant has not delivered a renewal or new
      Letter of Credit to Landlord in accordance with the requirements of
      Section 62 of the Lease, between Landlord and Tenant and you are hereby
      directed to pay the entire amount of the Letter of Credit No. _____, dated
      _______, 2009, to NEWMARK & COMPANY REAL ESTATE, INC. AS AGENT FOR:
      38TH AND 8TH
      LLC, NEW 520 GSH LLC, NEW 520 TRIPLE CROWN, LLC AND NEW 520 EIGHTH LLC
      under the Letter of Credit No. _____ dated __________, 2009, issued by
      [Bank] to Landlord.

            

    

    

    

    62.03    If
Tenant is entitled, by the terms and conditions of this Article 62, to receive
interest on the security deposited with Landlord, then, Tenant shall deliver to
Landlord, upon execution of this Lease, a fully completed and executed W-9
form.  If Tenant fails to provide same to Landlord, Tenant's security
shall be deposited into a non-interest bearing account until Landlord receives a
W-9. 

    

    62.04  In
the event that Landlord applies or retains any portion or all of the cash
security or the proceeds of a letter of credit in lieu of a cash security,
Tenant shall within five (5) days notice from Landlord, restore the amount so
applied or retained so that, at all times, the amount deposited with Landlord
shall be $45,066.68.  Failure
to comply with the terms of this provision shall be deemed a material default
under the terms and conditions of this lease.

    

    62.05           Provided
Tenant is not then in default of any of the material terms, covenants,
conditions or provisions of this Lease beyond any applicable grace periods, the
security deposited with the Landlord, shall be reduced to
$33,800.00 on the first day of the fourth (4th)
lease year and if the Security is in the form of cash, Landlord shall remit to
Tenant, $11,266.67 plus any interest accrued thereon, within sixty (60) days
thereof. In the event such security is held in the form of a Letter of Credit,
in lieu of cash, the Letter of Credit shall be reduced accordingly.

    

    62.06           Provided
Tenant is not then in default of any of the material terms, covenants,
conditions or provisions of this Lease beyond any applicable grace periods, the
security deposited with the Landlord, shall be reduced to
$24,265.94 (two (2) months of the then escalated rent)  on the first
day of the fifth (5th)
lease year and if the Security is in the form of cash, Landlord shall remit to
Tenant, $9,534.06 plus any interest accrued thereon,  within sixty
(60) days thereof. In the event such security is held in the form of a Letter of
Credit, in lieu of cash, the Letter of Credit shall be reduced
accordingly.

    

    

    63.           ADDITIONAL
RENT

    

    63.01           The
term additional rent shall mean all other sums, other than fixed annual rent
payable by Tenant to Landlord, including but not limited to escalations for real
estate tax and charges for electricity. In the event Tenant defaults in the
payment of Additional rent Landlord shall have the same rights and remedies for
a default in the payment of fixed annual rent. Landlord's failure during the
lease term to prepare and deliver any of the tax bills, statements, notices or
bill set forth in this lease or Landlord's failure to make a demand shall not in
any way cause Landlord to forfeit or surrender its rights to collect any of the
foregoing items of Additional Rent. Tenant's liability for the amounts due under
this Lease shall survive the expiration or sooner termination of the Lease
term.

    

    

              64.             POSSESSION
DATE

    

    64.01           Tenant
may take possession of the Demised Premises from the Possession Date stated
below subject to all terms, covenants and conditions contained in this
Lease.

    

    64.02           "Possession
Date" as used herein shall mean the date upon which Landlord’s Work is
Substantially Completed.

    

    64.03   “Substantially
Completed" as used herein shall mean that (a) all of Landlord's Work (other than
minor punch list items, such as pencil-lined cracks in spackling and plaster and
missing switch plates, which can be completed within thirty (30) days) has been
completed and that (b) such uncompleted work will not materially interfere with
Tenant's use of the premises for the normal and ordinary operation and occupancy
of the entire Demised Premises by Tenant and for Tenant's business.

    

    64.04           "Term
of Lease" as used herein shall mean the parties hereto agree that the Lease
shall be for a term of ten (10) years, four (4) months commencing on the
Possession Date and terminating ten (10) years, four (4) months from the last
day of the month in which the Possession Date occurs or on any sooner date of
termination in accordance with the terms of this Lease.

    

    

    65.           FIXED ANNUAL
RENT

    

    65.01           The
Fixed Annual Rent under this Lease shall be as follows:

    

    LEASE
YEAR                                           ANNUAL
RENT                                           MONTHLY
RENT

    

    Yr
1                                          $135,200.00                                           $11,266.67

    Yr
2                                          $135,200.00                                           $11,266.67

    Yr
3                                          $138,580.00                                           $11,548.33

    Yr
4                                          $142,044.50                                           $11,837.04

    Yr
5                                          $145,595.61                                           $12,132.97

    Yr
6                                          $149,235.50                                           $12,436.29

    Yr
7                                          $152,966.39                                           $12,747.20

    Yr
8                                          $156,790.55                                           $13,065.88

    Yr
9                                          $160,710.31                                           $13,392.53

    Yr
10                                          $164,728.07                                           $13,727.34

    Yr
11                                          $168,846.27                                           $14,070.52

    

    Fixed
Annual Rent herein is inclusive of the 2.5% annual fixed rent escalation and is
exclusive of electric charges or other items of additional rent.

    

    

    66.           RENT
ABATEMENT

    

    66.01           Notwithstanding
anything to the contrary hereinabove contained, so long as Tenant not then be in
default of its obligations under the Lease, upon the expiration of applicable
notice and grace periods, Tenant shall be permitted to occupy the Demised
Premises for the period commencing on the Possession Date and continuing for a
four (4) month period without being obligated to pay the installment of the
annual rental rate, but subject to all other terms and conditions of this Lease
including, but not limited to, the obligation to pay for any and all electric
current utilized in or furnished to the Demised Premises during such
period.

    

    

    67.           INTENTIONALLY
DELETED

    

    

    68.           TENANT’S
WORK/INSTALLATION

    

    68.01           Other
than the performance of Landlord’s Work, Tenant shall perform all work necessary
or desirable in Tenant’s sole judgment to make the Demised Premises suitable for
Tenant’s use and occupancy at Tenant's own cost and expense (hereinafter called
"Tenant's Work").  Tenant's work to be performed by Tenant in the
Demised Premises shall be subject to the following conditions:

    

    68.02           Tenant
shall comply with all of the laws, orders, rules and regulations of all city
agencies, including but not limited to the Department of Buildings, governmental
authorities, and of the fire insurance rating organization having jurisdiction
thereof, and the local board of fire underwriters, or any similar body, and
Tenant shall have procured and paid for, so far as the same may be required, all
governmental permits, filings and authorizations.  Tenant, at Tenant’s
sole cost and expense, agrees to use Landlord’s expeditor for all required
filings, plan review and final sign-offs in order to ensure that proposed
construction plans are in compliance with rules and regulations of the governing
authorities.  Landlord agrees to cooperate with Tenant and shall sign
permits or applications for approval if necessary with regard to the above so
long as there is no cost to Landlord or Tenant covers any such out of pocket
third party costs reasonably incurred by Landlord  in an amount not to exceed
$500.00. Tenant further acknowledges and agrees that should Tenant not
provide Landlord with the required sign-offs from the Department of Buildings,
city agencies, or any governmental authorities having jurisdiction thereof,
Landlord retains the right to perform same at Tenant’s sole cost and
expense

    

    68.03.  Prior
to commencing Tenant's Work, all plans and specifications therefor shall be
submitted to Landlord for Landlord's prior written approval which shall not be
unreasonably withheld or delayed, which do not adversely affect the Building
plumbing, electrical, H V A C and security/fire alarm/communication
systems.  Landlord's failure to approve or disapprove Tenant's plans
and specifications within twenty (20) days after Landlord's receipt thereof
shall be deemed Landlord's approval thereof.  The approval by Landlord
of any of Tenant's plans and specifications shall not constitute an assumption
of any liability on the part of Landlord for their accuracy or their conformity
with applicable law, and Tenant shall be solely responsible
therefor.  Approval by Landlord of any of Tenant's plans and
specifications shall not constitute a waiver by Landlord of the right to
thereafter require Tenant to amend same to correct for Tenant's non-compliance
with applicable laws and omissions or errors adversely affecting the Building
structure or Building systems therein later discovered by
Landlord.  If, in connection with determining whether or not to
approve Tenant's plans and specifications Landlord reasonably incurs
out-of-pocket architectural or engineering fees, Tenant shall reimburse Landlord
for such fees, to the extent reasonable, as additional rent within twenty (20)
days of submission of such receipted bills to Tenant

    

    68.04  Tenant's
Work shall be completed (i) with reasonable dispatch, and ii) substantially in
accordance with the plans and specifications submitted to, and approved in
writing by, Landlord pursuant to Paragraph (B) hereof. Landlord reserves the
right from time to time, to inspect work in progress for the purpose of
confirming its substantial conformity with approved plans, specifications and
drawings.   Tenant shall complete, or cause to be completed,
Tenant's Work in a good and workmanlike manner, to the extent reasonably
possible, and in substantial compliance with the customary standards employed by
contractors in New York City in buildings of like kind and class.

    

    68.05  Prior
to commencing Tenant's Work, Tenant shall at its own cost and expense deliver to
Landlord a certificate of Tenant's or Tenant’s contractor's
policy of comprehensive general liability insurance which amounts shall be not
less than $1,000,000.00 in respect to any one person, not less than
$2,000,000.00 in respect to any one accident and not less than $500,000.00 in
respect of property damage, including Tenant’s work, covering the risk during
the course of performance of Tenant's Work, which policy shall protect Landlord
and its managing agent in the same amounts against any claims or liability
arising out of Tenant's Work, and Tenant or Tenant's contractors shall obtain
workers' compensation insurance to cover all persons engaged in Tenant's Work
and a certificate thereof shall be furnished to the Landlord before commencement
of any work by any contractor, subcontractor, their agents, servants or
employees.  Tenant's contractor shall name Landlord, its managing
agent, mortgagees and ground lessors, if any, as additional insured under said
insurance policies;

    

    68.06           All
of Tenant's Work shall be done in such a manner so as not to materially
interfere with Landlord or other Tenants.

    

    68.07           Prior
to commencing Tenant's Work, Tenant shall deliver to Landlord the name and
address of Tenant's general contractor and sub-contractors who must first be
approved by Landlord, whose approval shall not be unreasonably withheld or
delayed and Landlord will respond
to such information within five (5) days from submission.

    

    68.08
Tenant, at its sole cost and expense, shall be obligated to connect into and
coordinate its security and/or fire alarm systems with those systems existing in
the Building.

    

    68.09           It
is expressly understood and agreed that Landlord shall not be responsible for
any repair, replacement or maintenance of Tenant's Work, unless otherwise
provided in the Lease.

    

    

    69.         RELOCATION

    

    69.01  On
not less than ninety (90) days notice to Tenant, Landlord shall have the one
time right (unless otherwise agreed to by Landlord and Tenant) to move Tenant
out of the space demised and into similar space, with reasonably similar
exposures, of at least equal area to another floor in the same
building.  In this event, Landlord shall remove, relocate and
reinstall Tenant's equipment, telephone and computer lines
and  furniture, reconstruct the new space similar to the old space,
reimburse Tenant Tenant’s reasonable related expenses (i.e., costs to replace
letterhead and business cards),   all of which shall be done at
Landlord's sole cost and expense and without cost to Tenant, and for the balance
of the term this lease shall continue in full force and effect and shall apply
to the new space with the same force and effect as though this lease had
originally been for such new space. Landlord agrees to use reasonable efforts,
not to relocate Tenant any time during the last two (2) years of the lease term.
In order to minimize the disruption to Tenant’s business, Landlord agrees that
such relocation shall be done during non-business hours.

    

    

    70.           LANDLORD’S COST BY TENANT
DEFAULTS:

    

    70.01           In
the event of litigation or dispute between Landlord  and Tenant, the
successful party shall reimburse the other party for its reasonable
out-of-pocket costs and expenses including reasonable attorney’s fees; provided
that, if, as a result of Tenant’s failure to pay rent payable hereunder after
notice and expiration of the cure period applicable hereunder, Landlord
commences an action for non payment of such rent, Tenant agrees to reimburse the
reasonable out-of-pocket costs and expenses incurred in such action by
Landlord.   Such expenditures paid for by Landlord, shall be deemed to be
Additional Rent hereunder and shall be paid by Tenant to Landlord together with
interest thereon at the rate of ten (10%) percent per annum but not to exceed
the maximum amount then chargeable under applicable law within five (5) days of
rendition of any bill or statement to Tenant therefore, and if any expenditure
is incurred in collecting such obligations, such sum shall be recoverable by
Landlord as additional damages.

    

    

    71.           MECHANIC’S
LIENS:

    

    71.01          Notice
is hereby given that the Landlord shall not, under any circumstances, be liable
to pay for any work, labor or services rendered or materials furnished to or for
any work, labor or services rendered or materials furnished to or for the
account of the Tenant upon or in connection with the Demised Premises, and that
no mechanic’s or other liens for work, labor or services rendered or materials
furnished to or for the account of the Tenant shall, under any circumstances,
attach to or affect the reversionary or other estate or interest of the Landlord
in or to the Demised Premises or in and to any alterations, repairs or
improvements to be erected or made thereon.

    

    71.02          The
Tenant shall not suffer nor permit, during the term hereby granted, any
mechanic’s or other liens for work, labor, services or materials rendered or
furnished to or for the account of the Tenant upon or in connection with the
Demised Premises or to any improvement erected or to erected upon the same, or
any portion thereof; and it is understood that Tenant shall obtain and deliver
unconditional written waivers of mechanic’s liens as specifically set forth in
Paragraph 3 of the printed form hereof.  Nevertheless, Tenant shall
hold the Landlord and the Demised Premises harmless from all liens or charges,
of whatever nature or description, arising from, or in consequence of, any
alterations or improvements that the Tenant shall make, or cause to be made,
upon the Demised Premises.

    

    71.03           If
a notice of mechanic’s lien be filed against the Demised Premises for labor or
materials alleged to have been furnished, or to be furnished at the Demised
Premises to or for the Lessee or to or for someone claiming under the Lessee;
and if the Lessee shall fail to take such action as shall cause such lien to be
discharged or bonded within thirty (30) days after notice to Tenant of same; the
Lessor may discharge it by deposit or by bonding, proceeding, and in the event
of such deposit or bonding proceedings, the Lessor may require the lienor to
prosecute an appropriate action to enforce the lienor’s claim.  In
such case, the Lessor may pay any judgement recovered on such
claim.  Any amount paid or expense incurred by the Lessor, as in the
clause provided, and any expense incurred or sum of money paid by the Lessor by
reason of the failure or the Lessee to comply with this provision of this Lease,
or in defending any such action, shall be deemed to be additional rent for the
Demised Premises, and shall be due and payable by the Lessee to the Lessor on
the first day of the next following month or at the option of the Lessor, on the
first day of the succeeding month.  The receipt by the Lessor of any
installment of the regular stipulated rent hereunder or any of such additional
rent shall not be a waiver of any other additional rent then due.

    

    71.04
Notwithstanding anything to the contrary, any mechanic’s lien filed against the
Demised Premises for Landlord’s Work or work performed by Landlord during the
Lease term are excluded from the provisions of Article 71 herein.

    

    

    72.           TENANT’S LIABILITY FOR
CONSTRUCTION

    

    72.01   In
the event the Tenant performs any construction or alterations at the Demised
Premises, Landlord shall not be responsible for any structural defect, latent or
otherwise, in the premises, change of conditions elsewhere in the building or in
the premises with respect to the foregoing, directly resulting from or as a
condition of Tenant’s construction or alteration, or for any damages to same or
to goods or things contained or placed in the Demised Premises or in the vicinity
thereof in connection with such alteration or construction.

    

    72.02  Tenant
will indemnify and save Landlord harmless from and against any and all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses including reasonable attorneys’ fees, which may be imposed upon or
incurred by or asserted against Landlord by reason of any of the following
occurring during the terms of this Lease:

    

    
      	
              (i)  

            	
              any
      work or thing done by Tenant or any agent, contractor, employee, licensee
      or invitee of Tenant in, on or about the Demised Premises or any part
      thereof unless caused by the negligence or willful acts of Landlord, its
      agents, employees or contractors or
  subcontractors;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              any
      use, possession, occupation, condition, operation, maintenance or
      management by Tenant of the Demised Premises, unless caused by the
      negligence or willful acts of Landlord, its agents, employees, contractors
      or subcontractors or which result from any failure by Landlord, its
      agents, employees, contractors or subcontractors, to perform a direct
      obligation of Landlord pursuant to an express provision
      hereunder.

            

    

    

    
      	
               
      

            	
              (iii)
      all fines, suits, proceedings, claims, demands and actions of any kind or
      nature whatsoever brought by anyone whomsoever arising or growing out of
      or in any way connected with the Tenant’s use, operation and maintenance
      of the Demised Premises; unless caused by
      the negligence or willful acts of Landlord, its agents, employees,
      contractors or subcontractors or which result from any failure by
      Landlord, its agents, employees, contractors or subcontractors, to perform
      a direct obligation of Landlord pursuant to an express provision hereunder
      and any accident, injury, or damage to any person or property occurring in
      the Demised Premises or any part thereof unless caused by the negligence
      or willful acts of Landlord, its agents, employees, contractors or
      subcontractors.

            

    

    

    

    
      	
              73.  

            	
              LANDLORD’S
      CONSENT.                                                      

            

    

    

    73.01           Whenever
Landlord’s consent is required hereunder, Landlord agrees that such consent
shall not be unreasonably conditioned, withheld or delayed.

    

    

    
      	
              74.  

            	
              PATRIOT
      ACT

            

    

    

    74.01           Tenant
hereby certifies that it is in compliance with the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act (the “Patriot
Act”) and the Executive Order 13224 (the “Executive Order”) and, in
particular, Tenant acknowledges that (a) it is prohibited from doing any
business with any persons who commit, threaten to commit, or support terrorism;
(b) Tenant, and its employees, vendors, contractors, Landlords, officers,
directors, representatives, and/or agents are not persons who commit, threaten
to commit, or support terrorism; (c) Tenant  has performed, and will
perform during the Term of this Lease, a thorough investigation of those persons
described in Section (b) including checking such persons against the list
annexed to the Executive Order to ascertain whether they are persons who commit,
threaten to commit, or support terrorism; and (d) Tenant shall take commercially
diligent steps to ensure that it shall comply with the Patriot Act and Executive
Order during the Term of this Lease.  Tenant shall indemnify and hold
Landlord and its agents harmless from and against any losses arising from a
breach of the foregoing sentence.   The indemnification and hold
harmless shall survive the termination of this Lease.

    

    

    
      	
              75.  

            	
              IDENTIFICATION
      CARDS

            

    

    

    75.01           Landlord
has agreed to furnish tenants with an access control card (“Card”) to the
Building to allow all tenants to access their premises twenty-four hours a day,
seven days a week, or at other times as designated by Landlord, for business
purposes. The Card shall only be issued to employees (“Designated Employees”)
currently working on the 23rd
floor of the Building (the “Demised Premises”) and designated by
“Tenant”.  The names of the Designated Employees shall be furnished to
Landlord in writing prior to the distribution of the Cards. Tenant shall
initially be issued twenty-one (21) Cards for all Designated Employees within
the first lease year free of charge.  Thereafter, Tenant shall pay a
fee of $25.00 for each new Card requested from Landlord for additional
Designated Employees.

    

    75.02           The
Card shall be used to access the Building for business purposes only. All
Designated Employees shall, prior to receiving a Card, be photographed by
Landlord or its designee at a time and place as designated by Landlord in
accordance with the System. Cards are non-transferable and may not be used by an
individual not employed by Tenant at the Demised Premises, nor shall it be used
by any employee whose name has not been submitted to Landlord as a Designated
Employee. In the event that Tenant no longer occupies the Demised Premises, as a
result of the termination, sublet, assignment, license, sale or other
disposition of the Demised Premises, Tenant shall return all Cards to Landlord
or its designee immediately.  Upon the happening of any of the
foregoing events, all Cards will be immediately deactivated from the System.
Tenant shall immediately notify Newmark or Landlord’s designee if a Card is lost
or stolen.  Tenant shall pay Landlord $50.00 for the replacement of
any such lost or stolen Card before Landlord will issue a new Card.

    

    

    
      	
              76.  

            	
              SECURITY DEPOSIT
      DEFAULT:

            

    

    

    76.01           Pursuant
to Articles 34 and 62 of the Lease, the Tenant is required to pay and deliver to
the Landlord a Security Deposit.  In the event the Tenant, upon
execution of the Lease by Landlord and Tenant, shall have failed to
simultaneously deposit with or pay to the Landlord the Security in the amount
referred to in the Lease, or if any check delivered to the Landlord for the
Security shall be returned unpaid by the financial institution upon which the
check is drawn, (i) if Tenant is in possession of the Demised Premises the
Landlord shall have the right upon Landlord delivering to Tenant a three (3) day
written notice advising Tenant of its failure to have deposited Security with
the Landlord, and in the event the Tenant shall within three (3) days from the
date the notice is given to Tenant continue to fail to deposit with Landlord the
Security, then Landlord may serve upon Tenant a one (1) day written notice of
cancellation of this Lease and upon the expiration of such one (1) day, this
Lease and the term provided for therein shall end and expire as fully and
completely as if the expiration of such one (1) day period were the day herein
definitely fixed for the end and expiration of this Lease and the term thereof,
and Tenant shall then quit and surrender the Demised Premised to Landlord and if
Tenant shall fail to quit and surrender the Demised Premises to the Landlord,
Landlord shall have all rights and remedies as otherwise provided for in the
Lease; or (ii)  if Tenant shall not have yet taken possession of the
Demised Premises then and in such event the Landlord shall not be required to
deliver possession of the Demised Premises to the Tenant; and (iii) in either
instance Tenant shall remain liable as otherwise provided for in this
Lease.

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

    INSERTS
TO PRINTED FORM OF LEASE BETWEEN

    NEWMARK
& COMPANY REAL ESTATE, INC.,

    AGENT
FOR 38TH AND
8TH LLC,
NEW 520 GSH LLC, NEW 520 TRIPLE CROWN, LLC AND NEW 520 EIGHTH LLC, (AS
“LANDLORD”)

    AND
EMERGING VISION USA, INC., (AS TENANT”) FOR PART OF THE 23rd
FLOOR IN THE BUILDING KNOWN AS AT 520 EIGHTH AVENUE, NEW YORK, NEW
YORK

    

    

    

    
      	
              1.  

            	
              ,
      which consent shall not be unreasonably withheld or
    delayed.

            

    

    

    
      	
              2.  

            	
              ,
      which approval shall not be unreasonably withheld or
    delayed.

            

    

    

    
      	
              3.  

            	
              Notwithstanding
      anything to the contrary herein, Tenant will be permitted to select a
      contractor who may not be on Landlord’s list of approved contractors,
      subject to approval by Landlord, such approval not to be unreasonably
      withheld or delayed.

            

    

    

    
      	
              4.  

            	
              ,
      including the roof, foundation and exterior
  walls,

            

    

    

    
      	
              5.  

            	
              or
      willful misconduct

            

    

    

    
      	
              6.  

            	
              Notwithstanding
      anything herein to the contrary, if the demised premises are totally
      damaged or rendered substantially untenantable by fire or other casualty,
      Landlord shall, within thirty (30) days after the date of the fire or
      other casualty, deliver a notice to Tenant of (i) the estimated repair
      period of the demised premises from such fire or other casualty, and (ii)
      whether Landlord intends to repair and restore the demised
      premises.  If Landlord intends to repair and restore the demised
      premises, and if such period exceeds two hundred forty (240) days from the
      date of the fire or other casualty, or if Landlord does not intend to
      repair and restore the demised premises, then Tenant, within thirty (30)
      days after Landlord's notice, may give Landlord notice of termination of
      this Lease, in which event the term hereof shall expire ten (10) days
      after Tenant's termination notice is given.  If this Lease has
      not theretofore expired or been terminated, and Landlord does not
      substantially complete the repair and restoration of the demised premises
      within said two hundred forty (240) day period after the date of the
      casualty, Tenant shall give Landlord a ten (10) day notice to
      cure.  Failure to give notice shall not be deemed a default. If
      Landlord shall not complete said repair and restoration within twenty (20)
      days after the expiration of such ten (10) day period, Tenant may give
      Landlord notice of termination of this Lease, in which event the term
      hereof shall expire ten (10) days after Tenant's termination notice is
      given.

            

    

    

    
      	
              7.  

            	
              during
      regular office hours,

            

    

    

    
      	
              8.  

            	
              which
      items shall not unreasonably interfere with Tenant’s use of the Demised
      Premises and provided further that the Landlord maintains such pipes and
      conduits in good repair.

            

    

    

    
      	
              9.  

            	
              upon
      reasonable prior notice to Tenant,

            

    

    

    
      	
              10.  

            	
              In
      the event that in the course of Tenant’s submission of its applications
      for permits, one or more of its applications are disapproved due to
      uncured building violations noted or issued prior to the term of this
      Lease, the Tenant shall immediately notify the Landlord
      in  writing and it shall be the Landlord’s responsibility to
      correct the said violations.

            

    

    

    
      	
              11.  

            	
              twenty
      (20)

            

    

    

    
      	
              12.  

            	
              and
      such default continues for more than three (3) days after written notice
      from Landlord to Tenant,

            

    

    

    
      	
              13.  

            	
              further

            

    

    

    
      	
              14.  

            	
              Landlord
      agrees to use reasonable efforts to relet the Demised Premises to mitigate
      its damages, however,

            

    

    

    
      	
              15.  

            	
              reasonable,
      non-discriminatory and uniformly
enforced

            

    

    

    
      	
              16.  

            	
              Except
      as otherwise stated herein,

            

    

    

    
      	
              17.  

            	
              and
      additional rent

            

    

    

    
      	
              18.  

            	
              Landlord
      represents and warrants that, on the Possession Date of the Lease, it
      shall have legal possession of the Demised Premises to rightfully deliver
      the same to Tenant.

            

    

    

    
      	
              19.  

            	
              Except
      for monetary matters the provisions of Paragraph 27 also apply to
      Tenant.

            

    

    

    
      	
              20.  

            	
              As
      a courtesy, a copy of any notice addressed to Tenant as set forth herein
      shall be sent to Susan Goldberg, 100 Quentin Roosevelt Boulevard, Garden
      City, New York   11530 and Elliot Aronson, Esq., 44 Park
      Street, Suite 101, Andover,
      Massachusetts  01810.   Failure to do so will not
      be considered a default under the
Lease.

            

    

    

    
      	
              21.  

            	
              If
      Landlord undertakes to perform certain work hereunder and Tenant
      is unable to access the Demised Premises or if Tenant cannot
      continue to operate its business
      and vacates the Demised Premises and such conditions continue for
      more than ten
      (10) business days after written notice thereof is provided to Landlord
      then beginning after such period, Tenant’s obligation to pay Fixed Annual
      Rent and Additional Rent hereunder shall abate until such conditions are
      cured.  However, there shall be no rent abatement in the event
      such required work is due to any force of nature (including but not
      limited to, a tornado, flooding, hurricane or earthquake) or any other
      event beyond the reasonable control of Landlord (including but not limited
      to war, terrorism, black outs or strike) it being agreed that financial
      inability to perform shall not be deemed an event beyond the reasonable
      control of Landlord or in the event such work to be performed by Landlord
      is due to the negligence or will misconduct of Tenant, its agents, servants, employees,
      contractors or subcontractors.   Essential
      services as used herein shall mean access, electricity, HVAC, water and
      all elevator service.

            

    

    

    

    
      	
               
      

            	 	
              21(a).   Landlord
      agrees that the Premises will be accessible twenty-four (24) hours a day,
      seven (7) days a week.  Tenant shall have the ability to use the
      freight elevator during normal business hours for Tenant’s construction
      period and move-in at no additional charge to Tenant. After normal
      business hours, Tenant must call lobby desk for access to freight
      elevators.   Use of the freight elevator for normal freight
      use will be at the standard rate, prior notice
  required.

            

    

     
 

    
      	
              22.  

            	
              thirty
      (30)

            

    

    

    
      	
              23.  

            	
              is
      not in default, at the expiration of applicable notice and grace
      periods,

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