Document:

EXHIBIT
        10.7

      

      

      SALE
        OF INTELLECTUAL PROPERTY AGREEMENT

      

      This
        Sale
        of Intellectual Property Agreement (“Agreement”) is made this fifth day of
        April, 2002 (“Effective Date”), between the University of Rochester, an
        educational institution chartered by the State of New York with offices at
        518
        Hylan Building, P.O. Box 271040, Rochester, New York 14627 (“Rochester”), and
        VirtualScopics, LLC, a for-profit New York limited liability company with
        offices at 160 Office Parkway, Pittsford, New York 14534
        (“VirtualScopics”).

      

      Rochester
        and VirtualScopics are parties to a certain License Agreement, dated December
        13, 2000 and amended on May 18, 2001 (“License Agreement”), pursuant to which
        Rochester licensed certain intellectual property to VirtualScopics. In return
        for a portion of the equity position in VirtualScopics held by the Research
        Foundation of the University of Rochester, Rochester waived any up-front
        license
        fees from VirtualScopics for the license rights granted in the License
        Agreement. 

      

      In
        connection with a proposed investment in VirtualScopics by Pfizer Corporation
        (“Pfizer”), VirtualScopics has requested that Rochester sell the IP (defined
        below) to VirtualScopics in accordance with the terms of this Agreement,
        and
        Rochester is willing to do so. 

      

      Therefore,
        in consideration of the premises and promises in this Agreement, the parties
        agree as follows:

      

      1.    Definitions

      

      Capitalized
        terms not defined elsewhere herein or in the License Agreement will have
        the
        meanings set forth below.

      

      1.1    “Domain
        Names”
        means
“VirtualScopics.com” and “VirtualScopic.com.”

      

      1.2    “Exhibit”
        means
        an Exhibit further identified by a Section number (e.g., Exhibit 1.6 for
        the
        Patent Rights; Exhibit 2.2 for the form of Patent Assignment, Exhibit 2.3
        for
        the form of Domain Name Assignment, etc.) which is attached to this Agreement
        and is hereby incorporated by reference.

      

      1.3    "Governmental
        Authority"
        means
        any government, court, regulatory or administrative agency or commission,
        or
        other governmental authority, agency or instrumentality, whether federal,
        state
        or local (domestic or foreign), including, without limitation, the U.S. Patent
        and Trademark Office (the "PTO").

      

      1.4    “IP”
        means
        the Patent Rights and Domain Names.

      

      1.5    “Operating
        Agreement”
        means
        the Second Amended and Restated Operating Agreement of VirtualScopics, LLC,
        which will be dated and executed on or before the closing of the Pfizer
        Transaction.

      

      1.6    “Patent
        Rights”
        means
        all issued patents, United States provisional patent applications, United
        States
        patent applications, and Patent Cooperation Treaty patent applications listed
        in
        Exhibit 1.6 and inventions disclosed therein and any divisions,
        continuations, continuations-in-part (to the extent directed to subject matter
        specifically described in their respective parent applications), reissues,
        reexaminations, renewals and substitutions thereof (including, without
        limitation, remedies against infringements thereof and rights of protection
        of
        all interest therein under the law of all jurisdictions); and any and all
        foreign patents and patent applications that claim priority from any of the
        foregoing.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.7    “Pfizer
        Transaction”
        means
        the execution of the Securities Purchase Agreement, dated on or before 14
        days
        after the Effective Date, between VirtualScopics and Pfizer or an affiliate
        of
        Pfizer, which, among other things, provides for the payment by Pfizer of
        $2.5
        Million to VirtualScopics for Series B Preferred Units of
        VirtualScopics.

      

      In
        this
        Agreement, including any Exhibit, any reference to “including” means “including
        but not limited to,” and any reference to “and” means “and/or” unless the
        context clearly means otherwise.

      

      2.    Sale
        of IP

      

      2.1    In
        accordance with the terms of, and subject to the conditions in, this Agreement,
        Rochester hereby sells, transfers, and assigns all of its right, title and
        interest in the IP to VirtualScopics, free and clear of all liens and
        encumbrances. 

      

      2.2    Rochester
        will execute a Patent Assignment with respect to the Patent Rights in
        substantially the form of Exhibit  2.2, which VirtualScopics may record
        in
        the United States Patent and Trademark Office, and Rochester will, at
        VirtualScopics’ expense, execute all such further documents and perform all such
        other acts as may be reasonably requested by VirtualScopics to effect the
        transfer of ownership in the Patent Rights to VirtualScopics free and clear
        of
        all liens and encumbrances.

      

      2.3    Rochester
        will execute a Domain Name Assignment with respect to the Domain Names in
        substantially the form of Exhibit 2.3, and Rochester will, at
        VirtualScopics’ expense, execute all such further documents and perform all such
        other acts as may be reasonably requested by VirtualScopics to effect the
        transfer of ownership in the Domain Names to VirtualScopics free and clear
        of
        all liens and encumbrances. Rochester will not register any domain names
        including the mark “VirtualScopic” and, to the extent it has or will register
        such domain names, hereby agrees to the transfer of such registrations to
        VirtualScopics.

      

      2.4    The
        sale
        of the IP is contingent upon VirtualScopics entering into a Securities Purchase
        Agreement with Pfizer for the payment of $2.5 Million to VirtualScopics for
        Series B Preferred Units of VirtualScopics within fourteen (14) days
        of the
        Effective Date; (b) agreement by the parties on the form of the Security
        Agreement required under Section 4.7 below within fourteen (14) days of the
        Effective Date; and (c) amendment and restatement of the Operating Agreement
        to
        incorporate all rights of Rochester under this Agreement to the satisfaction
        of
        Rochester within thirty (30) days of the Effective Date. VirtualScopics may
        not
        file the Patent Assignment described in Section 2.2 above until Rochester
        provides written notice to VirtualScopics that Rochester is satisfied that
        the
        conditions of this Section 2.4 have been met.

      

      2.5    Upon
        fulfillment of the conditions set forth in Section 2.4 above, and execution
        and
        delivery of (a) this Agreement and (b) the Assignment attached hereto as
        Exhibit
        2.2, the Leased Employee Agreements among Saara Totterman, M.D. and Kevin
        Parker, Ph.D. on the one hand and VirtualScopics and Rochester on the other
        hand
        effective as of December 12, 2000 will terminate and be of no further force
        and
        effect, except for the provisions of Section 2 of such Leased Employee
        Agreements with respect to the calculation and payment of any remaining costs
        incurred by Rochester prior to the termination of such Leased Employee
        Agreements and not yet paid by VirtualScopics.

      

      2.6    Upon
        fulfillment of the condition set forth in Section 2.4 above, and execution
        and
        delivery of (a) this Agreement, (b) the Assignment attached hereto as Exhibit
        2.2, (c) the Domain Name Assignment attached hereto as Exhibit 2.3, (d) the
        Security Agreement attached hereto as Exhibit 4.7, and (e) the Warrant to
        Purchase attached hereto as Exhibit 4.8, the License Agreement will terminate
        and be of no further force or effect except for costs incurred pursuant to
        Section 5.2 of the License Agreement, if any.

      
        
          
          

        

        
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      3.    License
        of Patent Rights; End of License Agreement; License Back

      

      3.1   VirtualScopics
        hereby grants to Rochester, subject to any rights the United States Government
        may possess under 37 C.F.R. §401, a limited non-exclusive, perpetual,
        irrevocable, royalty-free right and license to use the Patent Rights solely
        for
        the purposes of research and education. 

      

      3.2   (a)    If
        at any
        time VirtualScopics elects to phase-out its use of, or not commercialize,
        the IP
        or any part thereof that can be reasonably separated therefrom, VirtualScopics
        will promptly notify Rochester. Upon request of Rochester, VirtualScopics
        will
        negotiate with Rochester in good faith for Rochester’s repurchase or license of
        any or all of such separable but non-commercialized and/or phased out IP
        on
        reasonable terms.

      

      (b)    Rochester
        acknowledges that upon payment in full of the Preferred Amount by VirtualScopics
        or any of its affiliates, members, shareholders or employees, Rochester shall
        have no rights to the IP except for the limited, non-exclusive license set
        forth
        in Section 3.1 above.

      

      4.    Financial
        and Related Considerations 

      

      4.1   (a)    VirtualScopics
        will pay Rochester a liquidating preferred amount of $1,500,000 ("Preferred
        Amount"). 

      

      (b)    VirtualScopics
        will pay Rochester two and one-quarter percent (02.25%) of VirtualScopics’ gross
        sales revenues (including from any licenses) actually received from any source
        after the Effective Date until Rochester has received the Preferred Amount
        pursuant to such formula.

      

      (c)    In
        addition to amounts due under Section 4.1(b), if VirtualScopics licenses
        any of
        the IP to a third party, VirtualScopics will pay Rochester 25% of the amount
        of
        any “License Fee(s)” actually received from such third party(ies) by
        VirtualScopics until Rochester has been paid the Preferred Amount, except
        that
        the 25% payment will not apply to image-analysis software or software tools
        sold
        or licensed by VirtualScopics as is to its customers without granting them
        the
        right to make modifications thereto. For purposes of this Section 4.1(c),
        a
“License Fee” means any payment(s), e.g., upfront or installment payments, from
        any such third party licensee(s) which is not based on revenues or sales
        and is
        not due on at least a quarterly basis. 

      

      4.2    Installments
        of the Preferred Amount due pursuant to Sections 4.1(b) and (c) will be due
        at
        the end of each calendar quarter and will be paid within 30 days after the
        end
        of each such quarter to an account identified by Rochester. Each such
        installment payment will be accompanied by a report setting forth in reasonable
        detail and in accordance with generally accepted accounting principles, as
        applicable (i) the amount of VirtualScopics’ gross sales revenues for the
        preceding quarter and/or the basis of the calculation of any License Fees,
        and
        the sources of any such revenues or License Fees, and (ii) the calculation
        of
        the installment amount due. The report due by January 30th
        of each
        year will also show an annual history of the previous four quarters.

      

      4.3    If
        substantially all of the assets of or ownership interests in VirtualScopics
        are
        sold, or if VirtualScopics sells the IP, in whole or in part, the Preferred
        Amount will immediately become due and payable to the extent VirtualScopics
        or
        its owners receive any consideration for such sale.

      

      4.4    VirtualScopics
        may prepay the Preferred Amount at any time without prepayment
        penalty.

      
        
          
          

        

        
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      4.5    The
        Preferred Amount due Rochester will be preferred to all other amounts paid
        by or
        disbursed from VirtualScopics except taxes, and the Operating Agreement will
        be
        amended to provide that the Preferred Amount is prior and preferred to any
        other
        distribution or payment (except taxes) from VirtualScopics, including the
        dividend rights of Preferred Units described in Article X of the Operating
        Agreement. 

      

      4.6    Provided
        Rochester first executes a reasonable Non-Disclosure Agreement, Rochester
        will
        have the right to have its representative annually audit all books and records
        of VirtualScopics (and to make copies thereof) during normal business hours
        and
        upon reasonable notice to verify the amounts due Rochester. To the extent
        Rochester receives or learns of such accounting information pursuant to this
        Agreement, Rochester will treat such information as confidential information
        of
        VirtualScopics and use it solely to verify and, if necessary, to enforce
        its
        right to receive the Preferred Amount. If any amount is not paid when due,
        it
        will be subject to a late charge equal to one percent (1%) per month until
        paid.
        The presence or payment of any late charge will not prevent Rochester from
        exercising any other rights it may be entitled to as a result of any late
        payment, all of which rights are cumulative. Furthermore, if any audit reveals
        an underpayment (excluding any late payment charges) of more than ten percent
        (10%) of the amount otherwise due, in addition to any late payment charge,
        VirtualScopics will also pay Rochester’s reasonable costs incurred in connection
        with the audit.

      

      4.7    VirtualScopics
        will grant Rochester a security interest, substantially in the form of the
        Security Agreement that shall be attached to this Agreement as Exhibit 4.7,
        within fourteen (14) calendar days of execution of this Agreement, in the
        Patent
        Rights for the payment of the Preferred Amount. Upon payment of the Preferred
        Amount, Rochester's security interest shall terminate.

      

      4.8    VirtualScopics
        will also grant Rochester a warrant to purchase 375,000 of the Common Units
        of
        VirtualScopics. The warrant will be substantially in the form of Exhibit
        4.8.
        The exercise price for the Units will be $0.70 per Unit, subject to such
        adjustments of such price or other terms of the warrant as may be set forth
        in
        the warrant; provided, however (a) the warrant will be effective as
        of the
        Effective Date and will terminate ten years thereafter; and (b) the
        warrant
        may be assigned by Rochester to any corporation or other legal entity of
        which
        Rochester is the sole shareholder or sole member.

      

      5.    Rochester's
        Representations and Warranties 

      

      5.1   Rochester
        represents and warrants to VirtualScopics the following: 

      

      (a)    that
        before the closing of the sale of the IP hereunder Rochester is the sole
        owner
        of the IP, particularly including the Patent Rights, but excluding those
        inventions not included within the scope of valid claims ultimately issued
        on
        the Patent Rights; 

      

      (b)    that
        to
        the best of Rochester’s knowledge, no third party has any rights to the IP
        except those of VirtualScopics as set forth in the License Agreement and
        those
        of the inventors of the applicable IP who were employees of Rochester at
        the
        time of such inventions, provided, however, that all such rights shall terminate
        upon the sale of the IP to VirtualScopics hereunder; 

      

      (c)    that
        this
        Agreement, the Patent Assignment and the Domain Name Assignment (together
        with
        all other documents executed and delivered herewith and therewith) are within
        Rochester’s legal powers, have been duly executed and delivered and constitute
        the valid and binding agreements of Rochester;

      
        
          
          

        

        
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      (d)    that
        the
        execution, delivery and performance by Rochester of this Agreement, the Patent
        Assignment, Domain Name Assignment (together with all other documents executed
        and delivered herewith and therewith) do not require any notice to, action
        or
        consent by or in respect of, or filing with, any Governmental Authority (other
        than the filing of the Patent Assignments with the PTO and any other applicable
        Governmental Authority, and the filing of the Domain Name Assignment with
        Network Solutions, Inc.);

      

      (e)    that
        there is no action, suit, investigation or proceeding (or any basis thereof),
        of
        which Rochester has received written notice, pending or, to the knowledge
        of
        Rochester, threatened, before any Governmental Authority or arbitrator that
        has
        or could materially affect the IP; Rochester has not received written notice
        of
        any claims made by any person or entity with respect to, or any actions,
        suits
        or other proceedings relating to, the IP which would have a material adverse
        effect on the proposed or intended use of the IP; 

      

      (f)    that
        except for the License Agreement and the Leased Employee Agreements referenced
        in Section 2.5 above, Rochester has not granted any licenses, sublicenses
        or
        other rights relating to the IP, and that, prior to the date of this Agreement,
        Rochester has not granted any license or covenant not to sue with respect
        to the
        IP to any third party; and 

      

      (g)    that
        to
        its knowledge Rochester and each inventor listed in any patent or patent
        application and the attorneys of record thereto have complied with the PTO
        duty
        of candor and good faith in dealing with the PTO, including the duty to disclose
        to the PTO all information known to be material to the patentability of each
        of
        the patent applications.

      

      In
        Sections 5.1(b), 5.1(e), and 5.1(g) of this Agreement and Section 1.3 of
        Exhibit
        2.3 to this Agreement only, for the purposes of Rochester’s
“knowledge,”“Rochester” shall mean the University of Rochester Office of
        Technology Transfer and Office of Counsel to the Medical Center, University
        of
        Rochester and Strong Health.

      

      The
        representation and warranty set forth in Section 5.1(a) shall survive the
        closing of the sale of IP.

      

      5.2    EXCEPT
        AS
        SET FORTH IN SECTION 5.1 ABOVE, ROCHESTER MAKES NO REPRESENTATION OR WARRANTY,
        EXPRESS, IMPLIED, OR STATUTORY WITH RESPECT TO THE IP, INCLUDING WARRANTIES
        OF
        MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND THE VALIDITY OF ANY
        PART
        OF THE IP, INCLUDING BUT NOT LIMITED TO ISSUED OR PENDING CLAIMS OF THE PATENT
        RIGHTS AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERED
        OR
        DISCOVERABLE. NOTHING IN THIS AGREEMENT OR ANY OTHER AGREEMENT TO WHICH
        ROCHESTER AND VIRTUALSCOPICS ARE PARTIES WILL BE CONSTRUED AS A REPRESENTATION
        OR WARRANTY THAT THE PRACTICE OF THE PATENT RIGHTS OR ANY OTHER USE OF THE
        IP
        WILL NOT INFRINGE UPON AN INTELLECTUAL PROPERTY RIGHT OF ANY OTHER
        PERSON.

      

      6.    Rochester's
        Covenants

      

      6.1   Confidentiality.
        Rochester will hold, and will use reasonable commercial efforts to cause
        its
        officers, directors, employees, accountants, counsel, consultants, advisors
        and
        agents to hold, in confidence, all confidential documents and information
        concerning the IP, and such information which is identified in writing as
        confidential or, if delivered orally, if confirmed in writing as confidential
        within 30 days after oral delivery. Such obligation of confidentiality shall
        not
        apply to information that (a) is publicly known as of the date of the
        disclosure; (b) becomes publicly known after the date of disclosure through
        no
        fault of Rochester or any person or entity to whom Rochester has disclosed
        the
        information pursuant to the terms of this Section 6.1; (c) is received after
        the
        date of this Agreement, from a third party who is not known to Rochester
        to have
        any obligation of confidentiality to VirtualScopics; (d) is disclosed by
        Rochester in accordance with and subject to any limitations set forth in
        any
        written consent granted by VirtualScopics; or (e) is requested to be disclosed
        by Rochester pursuant to a judicial or administrative process, provided that
        Rochester shall use its best efforts to minimize such disclosure, and provided
        further that Rochester shall notify VirtualScopics of the disclosure request
        or
        order and cooperate with VirtualScopics in obtaining a protective order if
        VirtualScopics opts to seek one, which efforts shall be communicated to
        Rochester prior to the date the disclosure is due and shall be at
        VirtualScopics’ sole expense.

      
        
          
          

        

        
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      6.2    Patent
        Documentation.
        Upon
        request of VirtualScopics, Rochester shall promptly advise its patent counsel
        of
        the existence of this Agreement and request that patent counsel transfer
        the
        ownership of its files concerning the IP from Rochester to VirtualScopics
        and,
        to the extent it has the authority to do so, will provide VirtualScopics
        or its
        representative Power to Inspect any pending U.S. or foreign patent application
        as set forth in the Patent Rights.

      

      7.    Indemnity;
        Limitation of Liability

      

      7.1   VirtualScopics
        will at all times defend, indemnify and hold harmless Rochester, its trustees,
        directors, officers, employees, and affiliates from and against all claims,
        proceedings, demands, losses, expenses (including attorney fees and expenses,
        whether incurred as the result of a third party claim or a claim to enforce
        this
        Agreement), liabilities, and damages (collectively, “Claim”) to the extent
        arising out of the exercise of VirtualScopics’ rights hereunder with respect to
        VirtualScopics’ intellectual property, including the IP, or any part thereof,
        including a Claim associated with injury or death to any person(s), damage
        to
        property, and the research, production, manufacture, testing, sale, use,
        marketing, consumption, and advertising related to the exercise and exploitation
        of VirtualScopics’ intellectual property in any form. Rochester shall promptly
        notify VirtualScopics of any Claim of which it becomes aware and, at
        VirtualScopics’ expense, will cooperate in the defense and settlement thereof.
        Failure to provide such notice will not absolve VirtualScopics from its
        indemnity obligation except to the extent of actual prejudice and additional
        expenses caused by such failure. Except at its own cost, Rochester will not
        compromise or settle any Claim without the prior written consent of
        VirtualScopics, which will not be unreasonably withheld or delayed.

      

      7.2   Rochester
        will at all times defend, indemnify and hold harmless VirtualScopics, its
        trustees, directors, officers, employees and affiliates from and against
        all
        claims, proceedings, demands, losses, expenses (including attorneys' fees
        and
        expenses, whether incurred as a result of a third-party claim or a claim
        to
        enforce this Agreement), liabilities and damages (collectively, "Claim")
        to the
        extent arising out of a breach of a representation, warranty or covenant
        by
        Rochester hereunder or as a result of Rochester's use or exploitation of
        the IP.
        VirtualScopics will endeavor to properly notify Rochester of any Claim of
        which
        it becomes aware and, at Rochester's expense, will cooperate in defense and
        settlement thereof. Failure to provide such notice will absolve Rochester
        from
        its indemnity obligation to the extent of actual prejudice and additional
        expense caused by such failure. Except at its own cost, VirtualScopics will
        not
        compromise or settle any Claim without the prior written consent of Rochester,
        which will not be unreasonably delayed or withheld.

      

      7.3   Rochester’s
        sole liability, monetary or otherwise, to VirtualScopics or anyone claiming
        under or through VirtualScopics hereunder shall in no event exceed the amounts
        actually paid to Rochester pursuant to Section 4.1(a). VirtualScopics
        shall
        have no right to claim any such amount except solely as a result of a successful
        Claim by VirtualScopics pursuant to Rochester’s indemnity obligation under
        Section 7.2 above. These limitations shall apply regardless whether such
        Claim
        is based in contract, warranty, tort (including negligence), strict liability,
        or any other legal theory, and, for the purposes of this Section, all Claims
        will be aggregated. Furthermore, in no event will Rochester be liable for
        incidental, indirect, consequential, special, economic, or punitive damages,
        even if Rochester has been advised, or has other reason to know, of their
        possibility.

      
        
          
          

        

        
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      8.    Default

      

      8.1   If
        VirtualScopics defaults in any obligation hereunder, including failure to
        pay
        any amount due under Section 4.1(a), and such default continues more
        than
        30 days after Rochester has given notice to VirtualScopics of such breach,
        Rochester will have to right, at its election, to terminate this Agreement
        and
        to pursue any other remedy available to it. 

      

      8.2   Without
        limiting the foregoing, upon VirtualScopics’ breach of this Agreement Rochester
        will have the right, but not the obligation, to repossess the IP as set forth
        in
        the Security Agreement. No other amount will be due VirtualScopics in such
        event, other than amounts due pursuant to the Security Agreement.

      

      9.    Miscellaneous

      

      9.1   This
        Agreement will be construed in accordance with the laws of the United States
        of
        America and the State of New York, without reference to its conflict of law
        provisions. All actions or proceedings arising in connection with this Agreement
        will be tried and litigated exclusively in the courts located in Monroe County,
        New York. The parties consent to the exclusive personal jurisdiction of such
        venue, which choice of venue is intended by the parties to be mandatory and
        not
        permissive and to preclude the possibility of litigation between the parties
        arising out of this Agreement in any jurisdiction other than that specified
        in
        this Section. Each party waives any right it may have to assert the doctrine
        of
        forum non-conveniens or similar doctrine or to object to venue with respect
        to
        any proceeding brought in accordance with this Section.

      

      9.2   This
        Agreement may be executed in one or more counterparts, each of which will
        be
        deemed an original, and will become effective and binding upon the parties
        as of
        the execution date at such time as all the signatories hereto have signed
        a
        counterpart of this Agreement.

      

      9.3   This
        Agreement is the entire agreement between the parties with respect to its
        subject matter, and it supersedes all other prior and contemporary agreements
        and understandings, written or oral, between them with respect thereto. This
        Agreement may be modified only by a written instrument signed by both
        parties.

      

      9.4   This
        Agreement is binding on and will inure to the benefit of the respective
        successors and permitted assigns of the parties.

      

      9.5   All
        rights and remedies available at law or in equity available to a party are
        will
        be considered to be cumulative and not limited by this Agreement.

      

      9.6   All
        notices to a party hereunder will be in writing and will be delivered
        personally, by certified or registered mail (return receipt requested), or
        by a
        nationally recognized courier service with a tracking system to verify receipt.
        Notices will be effective upon receipt and delivered to the addresses set
        forth
        below or to such other address as may be changed by notice.

      
        
          
          

        

        
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                  Notices
                    to Rochester will be sent to:

                	
                  Director,
                    Office of Technology Transfer

                
	 	
                  University
                    of Rochester

                
	 	
                  518
                    Hylan Building

                
	 	
                  P.O.
                    Box 270140

                
	 	
                  Rochester,
                    New York 14627

                
	 	
                  Tel.:
                    585.275.3998

                
	 	 
	 	
                  With
                    a copy to: Jeanine Arden Ornt, Esq.

                
	 	
                  Office
                    of Counsel

                
	 	
                  University
                    of Rochester

                
	 	
                  Box
                    308

                
	 	
                  601
                    Elmwood Avenue

                
	 	
                  Rochester,
                    New York 14642

                
	 	
                  Tel.:
                    585.275.8571

                
	 	 
	
                  Notices
                    to VirtualScopics will be sent to:

                	
                  Dr.
                    Kevin Parker, President

                
	 	
                  VirtualScopics,
                    LLC

                
	 	
                  160
                    Office Parkway

                
	 	
                  Pittsford,
                    New York 14534

                
	 	
                  Tel:
                    585.249.6231

                

        

      

      

      In
        witness whereof, the parties have executed and delivered this Agreement as
        of
        the Effective Date:

       

      
        	UNIVERSITY OF ROCHESTER	 	VIRTUALSCOPICS, LLC
	 	 	 	 	 
	By:	/s/
                Charles E. Phelps	 	By:	/s/
                Mikael Totterman
	 	
                
                  
Charles
                  E. Phelps

              	 	 	
                
                  
Mikael
                  Totterman

              
	 	 	 	 	 
	Its: 	Provost	 	Its: 	COO
	 	 	 	 	 
	Date:	April 5, 2002	 	Date:	April 5,
                2002

      

      
 

       

      
 

      
        
          
          

        

        
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            8
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        1.6
        -
        Patents and Patent Applications

      

      

      
        	
                UR
                  

                tech.

                ref.

              	
                Law
                  

                firm
                  

                ref.

              	
                Number

              	
                Title

              	
                Status

              
	
                *765

              	
                000687.0025

              	
                6,169,817

                (09/185,514)

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                US
                  issued 01/02/2001

                (filed
                  11/04/1999) 

              
	
                *765

              	
                000687.0123

              	
                PCT/US99/25704

                WO
                  00/26852

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                PCT
                  filed 11/03/1999

                WIPO
                  published 05/11/2000

              
	
                *765

              	
                000687.0176

              	
                99958737.1

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Europe
                  filed 11/03/1999

              
	
                *765

              	
                000687.0173

              	
                7005694/01

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Korea
                  filed 05/04/2001

              
	
                *765

              	
                000687.0174

              	
                580158/00

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Japan
                  filed 05/07/2001

              
	
                *765

              	
                000687.0175

              	
                142972

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Israel
                  filed 05/04/2001

              
	
                *765

              	
                000687.0177

              	
                2350017

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Canada
                  filed 05/04/2001

              
	
                *765

              	
                000687.0178

              	
                16034/00

              	
                System
                  and Method For 4D Reconstruction and Visualization

              	
                Australia
                  filed 05/22/2001

              
	
                *765-01

              	
                000687.0138

              	
                09/540,524 

              	
                Magnetic
                  Resonance Imaging with Resolution and Contrast Enhancement

              	
                US
                  filed 03/31/2000

              
	
                *765-01

              	
                000687.0168

              	
                PCT/US01/10308

                WO
                  01/75483 

              	
                Magnetic
                  Resonance Imaging with Resolution and Contrast Enhancement

              	
                PCT
                  filed 04/02/2001

              
	
                *765-01

              	
                000687.0169

              	
                90107831 

              	
                Magnetic
                  Resonance Imaging with Resolution and Contrast Enhancement

              	
                Taiwan
                  filed 05/28/2001 **

              
	
                *985

              	
                000687.0180

              	
                09/908,492

              	
                System
                  and Method for Reducing or Eliminating Streak Artifacts and Illumination
                  Inhomogeneity in CT Imaging

              	
                US
                  filed 07/19/2001

              
	
                *1047

              	
                000687.0183

              	
                60/306,166

              	
                System
                  and Method for Quantifying Tissue Structures and their Change over
                  Time

              	
                Provisional
                  filed 07/19/2001

              
	
                *1047

              	
                000687.

                0182

              	
                Not
                  yet filed

              	
                System
                  and Method for Quantifying Tissue Structures and their Change over
                  Time

              	
                Draft
                  application prepared, but not filed.

              
	
                *1048

              	
                000687.0186

              	
                60/307,869

              	
                System
                  and Method for Quantitative Assessment of Joint Diseases and the
                  Change
                  over Time of Joint Diseases

              	
                Provisional
                  filed 07/27/2001

              
	
                *1048

              	
                000687.

                0198

              	
                Not
                  yet filed

              	
                System
                  and Method for Quantitative Assessment of Joint Diseases and the
                  Change
                  over Time of Joint Diseases

              	
                Draft
                  application prepared, but not filed.

              
	
                *1059

              	
                000687.0191

              	
                60/316,965

              	
                System
                  and Method for Quantitative Assessment of Neurological Diseases
                  and the
                  Change over Time of Neurological Diseases

              	
                Provisional
                  filed 09/05/2001

              
	
                *1059

              	
                000687.

                0199

              	
                Not
                  yet filed

              	
                System
                  and Method for Quantitative Assessment of Neurological Diseases
                  and the
                  Change over Time of Neurological Diseases

              	
                Draft
                  application prepared, but not filed.

              
	
                *1060

              	
                000687.0192

              	
                60/322,427

              	
                System
                  and Method for Quantitative Assessment of Cancers and their Change
                  over
                  Time 

              	
                Provisional
                  filed 09/17/2001 

              
	
                *1060

              	
                000687.

                0200

              	
                Not
                  yet filed

              	
                System
                  and Method for Quantitative Assessment of Cancers and their Change
                  over
                  Time

              	
                Draft
                  application prepared, but not
                  filed.

              

      

       

      
        
          	
                  Notes:

                	
                  University
                    of Rochester Technology Reference Number preface is 2-11144-
                    * in all
                    cases.

                
	 	
                  Law
                    firm reference number is that of the firm, Blank Rome Comisky
&
                    McCauley, LLP, Washington, D.C.

                
	 	
                  **
                    With a change in Taiwanese law, a filing date of 04/02/2001 was
                    recently
                    accorded. 

                

        

         

      

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        2.2

      

      ASSIGNMENT

      

      The
        University of Rochester (“Assignor”),
        an educational institution chartered by the State of New York with offices
        at
        518 Hylan Building, Rochester, New York 14627 is the owner of the United
        States
        and foreign Letters Patents and patent applications identified and set forth
        on
        Exhibit 1.6 attached hereto and incorporated herein and made a part hereof
        (“Patents and Patent Applications”) and desires to assign its entire right,
        title and interest in and to the Patents and Patent Applications to Assignee
        (defined below). 

       

      VirtualScopics,
        LLC, a for-profit New York limited liability company with offices at 160
        Office
        Parkway, Pittsford, New York 14534 (“VirtualScopics”), desires to acquire all
        right, title and interest in and to the Patents and Patent
        Applications.

       

      Therefore,
        for good and valuable consideration, the receipt and sufficiency of which
        is
        hereby acknowledged, Assignor, intending to be legally bound, does hereby
        sell,
        assign, and transfer to VirtualScopics and its successors, legal
        representatives, and assigns (collectively, “Assignee”) all right, title, and
        interest throughout the world in and to the Patents and Patent Applications
        and
        all divisions, renewals, continuations, reissues and extensions thereof,
        and all
        Letters Patent of the United States and elsewhere which may be granted thereon,
        and all rights of priority under International Conventions and applications
        for
        Letters Patent which may hereafter be filed on any of the foregoing in the
        United States or elsewhere. Assignor hereby authorizes and requests the
        Commissioner of Patents of the United States, and any Official of any country
        or
        countries foreign to the United States, whose duty it is to issue patents
        on
        applications, to issue all Letters Patent with respect to the Patents and
        Patent
        Applications to Assignee in accordance with the terms of this
        instrument.

      

      The
        assignment herein is made pursuant to terms as set forth in that certain
        Sale of
        Intellectual Property Agreement of even date hereof.

      

      At
        Assignee’s expense, Assignor will (or will cause its representatives or agents
        to) testify in any legal proceeding, sign all lawful papers, execute all
        divisional, continuing and reissue applications, make all rightful oaths
        and
        generally do everything commercially reasonable to aid Assignee to obtain
        and
        enforce proper patent protection for the Patents and Patent Applications
        in all
        countries.

      

      IN
        WITNESS WHEREOF, Assignor’s duly authorized officer signed this instrument this
        fifth day of April, 2002.

       

      UNIVERSITY
        OF ROCHESTER

      

      

      By:     
        _______________________________

      Charles
        E. Phelps

      

      Title:  
        Provost

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        2.3

       

      DOMAIN
        NAME ASSIGNMENT

       

      

       

      This
        Domain Name Assignment (“Agreement”) is effective as of April 5, 2002
        (“Effective Date”), and is between the University of Rochester, an educational
        institution chartered by the State of New York with offices at 518 Hylan
        Building, Rochester, New York 14627 (“Rochester”), and VirtualScopics, LLC, a
        for-profit New York limited liability company with offices at 160 Office
        Parkway, Pittsford, New York 14534 (“VirtualScopics”).

       

      In
        connection with the Sale Of Intellectual Property Agreement between the parties
        effective as of the Effective Date (“IP Agreement”), Rochester has sold and
        VirtualScopics has purchased, the following domain names “VirtualScopics.com”
        and “VirtualScopic.com” (the “Domain Names”), subject to the conditions of this
        Agreement. Therefore, the parties agree as follows:

       

      1.    DOMAIN
        NAME ASSIGNMENT.

       

      1.1    Assignment
        of Domain Name. For good and valuable consideration, Rochester hereby transfers
        and assigns to VirtualScopics all of Rochester’s right, title and interest in
        and to the two Domain Names, “VirtualScopics.com” and “VirtualScopic.com”, and
        the registrations thereof. The transfer and the assignment will take effect
        upon
        execution of this Agreement and the IP Agreement.

       

      1.2    Cooperation
        in Transferring Domain Name. Rochester will cooperate with VirtualScopics
        and
        will follow VirtualScopics’ reasonable instructions to effect the transfer of
        the Domain Names and their registrations in a timely manner. Specifically,
        Rochester will complete, execute and transmit the necessary Network Solutions,
        Inc. ("NSI") or such other entity Registrant Name Change Agreements and/or
        to
        correspond with NSI (or such other entity) to authorize transfer of the Domain
        Names.

       

      1.3    Warranty.
        In addition to the representations and warranties made by Rochester in the
        IP
        Agreement with respect to the Domain Names, Rochester warrants and represents
        that, to the best of its knowledge, it has unencumbered rights in the Domain
        Names, that Rochester properly registered the Domain Names with NSI without
        committing fraud or misrepresentation, that Rochester has the authority to
        transfer the Domain Names, and that the Domain Names do not infringe the
        rights
        of any third party. 

       

      2.    MISCELLANEOUS.

       

      2.1    Choice
        of
        Law; Venue. This Agreement will be construed in accordance with the laws
        of the
        State of New York, without reference to its conflict of law provisions. All
        actions or proceedings arising in connection with this Agreement will be
        tried
        and litigated exclusively in the courts located in Monroe County, New York.
        The
        parties consent to the exclusive personal jurisdiction of such venue, which
        choice of venue is intended by the parties to be mandatory and not permissive
        and to preclude the possibility of litigation between the parties arising
        out of
        this Agreement in any jurisdiction other than that specified in this Section.
        Each party waives any right it may have to assert the doctrine of forum
        non-conveniens or similar doctrine or to object to venue with respect to
        any
        proceeding brought in accordance with this Section.

       

      2.2    Counterparts.
        This Agreement may be executed in one or more counterparts, each of which
        will
        be deemed an original, and will become effective and binding upon the parties
        as
        of the execution date at such time as all the signatories hereto have signed
        a
        counterpart of this Agreement.

       

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      

      2.3    Entire
        Agreement. This Agreement together with the IP Agreement contains the entire
        agreement between the parties with respect to its subject matter, and it
        supersedes all other prior and contemporary agreements and understandings,
        written or oral, between them with respect thereto.

       

      2.4    Successors
        and Assigns. This Agreement is binding on and will inure to the benefit of
        the
        respective successors and assigns of the parties.

       

      In
        witness whereof, the parties have executed and delivered this Agreement as
        of
        the Effective Date:

       

       

      
        
          	UNIVERSITY OF ROCHESTER	 	VIRTUALSCOPICS, LLC
	 	 	 	 	 
	By:	 	 	By:	 
	 	
                  
                    
Charles
                    E. Phelps

                	 	 	
                  
                    
Mikael
                    Totterman

                
	 	 	 	 	 
	Its: 	Provost	 	Its: 	COO
	 	 	 	 	 
	Date:	April 5, 2002	 	Date:	April 5,
                  2002

        

      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        4.7

      

      Security
        Agreement

       

      need

       

      
        
          
          

        

        
          -
            13
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        4.8

      

      THIS
        WARRANT AND THE SECURITIES ISSUED UPON THE EXERCISE HEREOF HAVE BEEN OR WILL
        BE
        ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT OF
        1933, AS AMENDED (THE “ACT’). SUCH SECURITIES MAY NOT BE OFFERED OR SOLD OR
        TRANSFERRED IN THE UNITED STATES OR TO U.S. PERSONS IN THE ABSENCE OF SUCH
        REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT WHICH, EXCEPT IN THE
        CASE
        OF AN EXEMPTION PURSUANT TO RULE 144 UNDER THE ACT, IS CONFIRMED IN
        A LEGAL
        OPINION SATISFACTORY TO THE COMPANY. IN ADDITION, THESE SECURITIES ARE SUBJECT
        TO RESTRICTIONS ON TRANSFER CONTAINED IN THE THEN CURRENT VIRTUALSCOPICS
        OPERATING AGREEMENT (“OPERATING AGREEMENT”) A CURRENT COPY OF WHICH MAY BE
        OBTAINED FROM THE COMPANY, THE ISSUER OF THESE SECURITIES.

       

      Warrant
        to Purchase

      Common
        Units of VirtualScopics, LLC

       

      
        
          	
                  Issue
                    Date: April 5, 2002

                	
                  Warrant
                    No. 2

                

        

      

       

      This
        Warrant to Purchase Common Units of VirtualScopics, LLC (“Warrant”)
        certifies that, for value received the person named below (“Investor”),
        is
        entitled, upon the terms and subject to the conditions hereinafter set forth,
        at
        any time after April 5, 2002 (“Exercise
        Date”)
        and
        prior to April 5, 2012 (“Termination
        Date”)
        to
        subscribe for and purchase from VirtualScopics, LLC, a New York limited
        liability company (“Company”),
        375,000 Common Units (“Warrant
        Units”);
        provided, however, the Initial Exercise Date will accelerate to the date
        of an
“Accelerating
        Event”
        defined
        below. The purchase price per unit for the Warrant Units will equal $0.70
        (“Exercise
        Price”).
        The
        Exercise Price and the number of Common Units for which the Warrant is
        exercisable will be subject to adjustment as provided herein. This Warrant
        is
        being issued in connection with the Sale of Intellectual Property Agreement
        (“IP
        Agreement”),
        dated
        as of April 5, 2002, between Company and Investor, and is subject to its
        terms.
        Capitalized terms not otherwise defined herein will have that meaning as
        set
        forth in the IP Agreement or in the Operating Agreement. If there is any
        conflict between the terms of this Warrant and the IP Agreement, the IP
        Agreement will control. For purposes of this Agreement, an Accelerating Event
        will mean the date of a sale of all or substantially all of Company’s
        assets.

       

      1.    Title
        of Warrant.
        This
        Warrant will be issued in the name of Investor. Investor may transfer or
        assign
        this Warrant to any corporation or other legal entity of which Rochester
        is the
        sole shareholder or sole member.

       

      2.    Authorization
        of Common Units.
        Company
        covenants that all Common Units which may be issued upon the exercise of
        rights
        represented by this Warrant will, upon exercise of the rights represented
        by
        this Warrant and payment of the Exercise Price, be duly authorized, validly
        issued, fully paid and non-assessable and free from all taxes, liens and
        charges
        in respect of the issue thereof (other than taxes in respect of any transfer
        occurring contemporaneously with such issue).

       

      3.    Exercise
        of Warrant.
        Exercise of the purchase rights represented by this Warrant may be made at
        any
        time or times after the Issue Date, in whole or in part, before the close
        of
        business on the Termination Date, or such earlier date on which this Warrant
        may
        terminate as provided in Section 9 below, by the surrender of this
        Warrant
        and the Notice of Exercise annexed hereto as Exhibit A duly executed, at
        the
        office of Company (or such other office or agency of Company as it may designate
        by notice in writing to Investor at the address of Investor appearing on
        the
        books of Company), upon payment of the Exercise Price for the Warrant Units
        thereby purchased and the execution of joinder agreements, if necessary,
        satisfactory to Company for Investor to become a party to the Operating
        Agreement and the Agreement with respect to the Warrant Units being acquired
        unless Investor is already a party to such agreements; whereupon Investor
        will
        be entitled to receive a certificate and/or have its ownership of the Warrant
        Units being acquired recorded in Company’s member ledger as set forth under
        Section 6 below. Payment of the Exercise Price may be paid by Acceptable
        Currency to an account designated by Company in an amount equal to the Exercise
        Price multiplied by the number of Warrant Units being purchased.

       

      
        
          
          

        

        
          -
            14
            -

          
            

          

        

        
          
          

        

      

      4.    Expenses.
        Issuance of certificates for Common Units upon the exercise of this Warrant
        will
        be made without charge to Investor for any incidental expense in respect
        of the
        issuance of such certificate, all of which will be paid by Company, and such
        certificates will be issued in the name of Investor.

       

      5.    Restrictions
        on Transfer of Warrant Units.

       

      (a)    Warrant
        Units may not be sold, transferred, pledged, hypothecated or otherwise disposed
        of except in accordance with applicable federal and state securities laws
        and,
        if applicable, the terms and conditions of the IP Agreement and the Operating
        Agreement.

       

      (b)    Unless
        the Warrant Units have been registered under the Act, or are exempt from
        registration, upon exercise of the Warrant or any portion thereof and the
        issuance of any Warrant Units, all certificates representing Warrant Units,
        if
        any are issued, will bear on the face thereof substantially the following
        legend:

       

      THESE
        SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED
        UNDER
        THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).
        SUCH
        SECURITIES MAY NOT BE OFFERED OR SOLD OR TRANSFERRED IN THE UNITED STATES
        OR TO
        U.S. PERSONS IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
        UNDER
        THE ACT WHICH, EXCEPT IN THE CASE OF AN EXEMPTION PURSUANT TO RULE 144
        UNDER THE ACT, IS CONFIRMED IN A LEGAL OPINION SATISFACTORY TO THE COMPANY.
        IN
        ADDITION, THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER
        RESTRICTIONS CONTAINED IN THE THEN CURRENT VIRTUALSCOPICS, LLC OPERATING
        AGREEMENT AND THE IP AGREEMENT, WHICH MAY BE OBTAINED FROM THE ISSUER OF
        THESE
        SECURITIES.

       

      Investor
        agrees and acknowledges that this Warrant is being purchased for its own
        account, for investment purposes only, and not for the account of any other
        person, and not with a view to distribution, assignment, pledge or resale
        to
        others or to fractionalization in whole or in part. Investor further represents,
        warrants and agrees as follows: no other person has or will have a direct
        or
        indirect beneficial interest in this Warrant and Investor will not sell,
        hypothecate or otherwise transfer the Warrant except in accordance with the
        Act
        and applicable state securities laws or unless, in the opinion of counsel
        for
        Investor acceptable to Company, an exemption from the registration requirements
        of the Act and such laws is available and except in accordance with the
        Operating Agreement.

       

      6.    No
        Rights as Member Under This Warrant until Exercise.
        This
        Warrant does not entitle Investor to any rights to allocations or profits
        or
        losses, distributions or to vote or other rights as a member of Company prior
        to
        the due exercise thereof. If, however, at the time of the surrender of this
        Warrant and purchase of Warrant Units Investor will be entitled to exercise
        this
        Warrant, the Common Units so purchased will be and be deemed to be issued
        to
        Investor as the record owner of such Units as of the close of business on
        the
        date on which this Warrant will have been exercised.

       

      
        
          
          

        

        
          -
            15
            -

          
            

          

        

        
          
          

        

      

      7.    Loss,
        Theft, Destruction or Mutilation of Warrant.
        Company
        represents and warrants that upon receipt by Company of evidence reasonably
        satisfactory to it of the loss, theft, destruction or mutilation of any Warrant,
        and in case of loss, theft or destruction, of indemnity or security reasonably
        satisfactory to it, and upon reimbursement to Company of all reasonable expenses
        incidental thereto, and upon surrender and cancellation of such Warrant,
        if
        mutilated, Company will make and deliver a new Warrant of like tenor and
        dated
        as of such cancellation, in lieu of this Warrant.

       

      8.    Saturdays,
        Sundays, Holidays, etc.
        If the
        last or appointed day for the taking of any action or the expiration of any
        right required or granted herein is a Saturday, Sunday or a legal holiday,
        then
        such action may be taken or such right may be exercised on the next succeeding
        day not a Saturday, Sunday or legal holiday.

       

      9.    Effect
        of Certain Events.

       

      (a)    If
        at any
        time Company proposes to sell or otherwise convey all or substantially all
        of
        its assets, a sale in which the consideration to be received by Company or
        its
        members consists solely of cash, Company will give Investor thirty (30) days’
        notice of the proposed effective date of the transaction specifying that
        the
        Warrant will terminate if the Warrant has not been exercised by the effective
        date of the transaction. If Investor exercises its option under this section,
        the option will be net exercisable.

       

      (b)    If
        Company will at any time effect any merger, consolidation, exchange of Units,
        recapitalization, reorganization, or other similar event, as a result of
        which
        Common Units will be changed into the same or a different number of Units
        of the
        same or another class or classes of Units or securities of Company or another
        entity, or other property, Investor will have the right thereafter to purchase,
        by exercise of this Warrant and payment of the aggregate Exercise Price for
        the
        Warrant Units being purchased, the kind and amount of securities and property
        which it would have owned or have been entitled to receive after the happening
        of such transaction had this Warrant been exercised immediately prior
        thereto.

       

      10.   Adjustments
        of Exercise Price and Number of Warrant Units.
        The
        number and kind of securities purchasable upon the exercise of this Warrant
        and
        the Exercise Price will be subject to adjustment from time to time if Company
        (i) declares or pays a dividend in Units or makes a distribution in
        Units
        to holders of its outstanding Common Units, (ii) subdivides its outstanding
        Common Units, (iii) combines its outstanding Common Units into a smaller
        number of Common Units or (iv) issues any Common Units in a
        reclassification of Units. In such event, the number of Common Units purchasable
        upon exercise of this Warrant immediately prior thereto and the corresponding
        Exercise Price will be equitably and proportionately adjusted so that Investor
        will be entitled to receive the kind and number of Units or other securities
        of
        Company which it would have owned or had been entitled to receive at an
        equitably and proportionately adjusted Exercise Price had such Warrant been
        exercised immediately prior to such event, as determined in good faith by
        Company’s Board of Directors. An adjustment made pursuant to this
        Section 10 will become effective immediately after the effective date
        of
        such event retroactive to the record date, if any, for such event.

       

      11   Voluntary
        Adjustment by Company.
        Company
        may at its sole discretion, at any time during the term of this, Warrant,
        reduce
        the then current Exercise Price to any amount and for any period of time
        deemed
        appropriate by Company’s Board of Directors.

       

      
        
          
          

        

        
          -
            16
            -

          
            

          

        

        
          
          

        

      

      12.    Notice
        of Adjustment.
        Whenever the number of Warrant Units or number or kind of securities or other
        property purchasable upon the exercise of this Warrant or the Exercise Price
        is
        adjusted, as herein provided, Company will promptly mail to Investor by
        registered or certified mail, return receipt requested, notice of such
        adjustment or adjustments setting forth the number of Warrant Units (and
        other
        securities or property) purchasable upon the exercise of this Warrant and
        the
        Exercise Price of such Warrant Units after such adjustment, setting forth
        a
        brief statement of the facts requiring such adjustment and setting forth
        computation by which such adjustment was made. Such notice, in absence of
        manifest error, will be conclusive evidence of the correctness of such
        adjustment.

       

      13.    Miscellaneous.

       

      (a)    Issue
        Date; Jurisdiction.
        The
        provisions of this Warrant will be construed and will be given effect in
        all
        respects as if it had been issued and delivered by Company on the date hereof.
        This Warrant will be binding upon any successors or assigns of the parties
        hereto. This Warrant will constitute a contract under the laws and jurisdiction
        of New York and for all purposes will be construed in accordance with and
        governed by the laws of such State without regard to its conflict of laws
        principles or rules.

       

      (b)    Restrictions.
        Investor acknowledges that the Common Units acquired upon the exercise of
        this
        Warrant, if not registered, may have restrictions upon their resale imposed
        by
        state and federal securities laws and under the Operating
        Agreement.

       

      (c)    Modification
        and Waiver.
        This
        Warrant and any provisions hereof may be changed, waived, discharged or
        terminated only by an instrument in writing signed by the party against which
        enforcement of the same is sought.

       

      (d)    Notices.
        Any
        notice, request or other document required or permitted to be given or delivered
        to Investor or Company will be delivered or sent by certified or registered
        mail, postage prepaid, to Investor at its address as shown on the books of
        Company or to Company at the address set forth in the IP Agreement.

       

      (e)    Investor’s
        Representations, Warranties and Covenants.
        All of
        the representations, warranties and covenants made by Investor in the Agreement
        are incorporated herein and made a part hereof and are restated upon exercise
        of
        the Warrant.

       

      (f)    Execution
        of Operating Agreement.
        As a
        condition of exercising the Warrant and receiving Common Units, Investor
        (or
        Investor’s permitted assignee) shall execute the then current VirtualScopics
        Operating Agreement if requested to do so by Company. 

       

      IN
        WITNESS WHEREOF, Company
        has caused this Warrant to be executed by its officers thereunto duly
        authorized.

       

      
        	 	 	 
	Dated
                as of: April 5, 2002 	VirtualScopics,
                LLC
	 
 	 
 	 
 
	 	By:  	 
	 	
                
Name: Mikael
                Totterman
	 	Title: Chief
                Operating Officer

      

       

      INVESTOR:

       

      
        
          
          

        

        
          -
            17
            -

          
            

          

        

        
          
          

        

      

      Exhibit
        A

       

      NOTICE
        OF EXERCISE

       

      To:   VirtualScopics,
        LLC

       

      (1)    The
        undersigned hereby elects to purchase _____________ Common Units of
        VirtualScopics, LLC, a New York limited liability company (“Company”),
        pursuant to the terms of the attached Warrant, and tenders herewith payment
        of
        the purchase price in full as set forth in the Warrant and in the
        Agreement.

       

      (2)    Please
        issue a certificate or certificates representing the Common Units (if Company
        has issued certificates to any other holders of Common Units) in the name
        of the
        undersigned or if no certificates are issued, please indicate on Company’s
        member ledger that the undersigned is the holder of such Common
        Units.

       

       

      By:______________________________

      

      Name:____________________________

      

      Dated:____________________________

       

      NOTE:
        Signature must conform in all respects to holder’s name as specified on the face
        of the attached Warrant.

       

      
        
          
          

        

        
          -
            18
            -

          
            

          

        

        
          
          

        

      

      FIRST
        AMENDMENT TO THE 

      SALE
        OF INTELLECTUAL PROPERTY AGREEMENT

       

      THIS
        FIRST AMENDMENT is
        made
        this 24 day of May, 2002, between VIRTUALSCOPICS,
        LLC
        ("VirtualScopics")
        with a
        principal office located at 160 Office Parkway, Pittsford, New York 14534
        and
UNIVERSITY
        OF ROCHESTER
        ("Rochester")
        with a
        principal office located at 518 Hylan Building, P.O. Box 271040, Rochester,
        New
        York 14627.

      

      RECITALS:

      

      A.    On
        April
        5, 2002, Rochester and VirtualScopics executed and delivered a certain Sale
        of
        Intellectual Property Agreement ("IP
        Agreement").
        All
        capitalized terms used but not defined in this Amendment shall have the meanings
        ascribed to them in the IP Agreement.

      

      B.    Pursuant
        to Section 2 of the IP Agreement, Rochester has agreed to sell all of its
        right,
        title and interest in the IP (as defined in the IP Agreement) to VirtualScopics
        free of all liens and encumbrances.

      

      C.    Pursuant
        to Section 4 of the IP Agreement and in consideration for the transfer of
        the
        IP, VirtualScopics is required to pay Rochester $1,500,000 (the "Preferred
        Amount")
        and to
        deliver Rochester warrants to purchase VirtualScopics' Membership Units (as
        more
        particularly defined in the IP Agreement).

      

      D.    To
        secure
        payment of the Preferred Amount only, Section 4.7 of the IP Agreement provides
        that: "VirtualScopics will grant Rochester a security interest, substantially
        in
        the form of the Security Agreement that shall be attached to this Agreement
        as
        Exhibit 4.7, within fourteen (14) calendar days of execution of this Agreement,
        in the Patent Rights for the payment of the Preferred Amount. Upon payment
        of
        the Preferred Amount, Rochester's security interest shall terminate."

      

      E.    Pursuant
        to Section 8 of the IP Purchase Agreement, upon the occurrence of a default
        by
        VirtualScopics including payment defaults of the Preferred Amount, Rochester
        will have the right to terminate this Agreement and foreclose on its security
        interest in the IP pursuant to the Security Agreement.

      

      F.    As
        a
        result of VirtualScopics' intention to pay the Preferred Amount upon
        consummation of the Pfizer Transaction, the parties desire to amend the IP
        Agreement to more accurately reflect the purchase and sale of the IP pursuant
        thereto.

      

      PROVISIONS:

      

      NOW,
        THEREFORE,
        in
        consideration of the mutual promises set forth herein, the parties agree
        as
        follows:

      
        
          
          

        

        
          -
            19
            -

          
            

          

        

        
          
          

        

      

      1.    Amendment
        to the IP Agreement.

      

      (a)    Section
        2.4 shall be revised to remove Section 2.4(b) and the last sentence of Section
        2.4 from the IP Agreement in its entirety.

      

      (b)    Section
        2.6 shall be revised to remove Section 2.6(d) from the IP Agreement in its
        entirety.

      

      (c)    Sections
        4.1(a), (b), and (c) shall be deleted in their entirety and a new Section
        4.1
        shall be added as follows:

      

      "4.1
        VirtualScopics shall pay Rochester $1,500,000 concurrently with the occurrence
        of the Pfizer Transaction."

      

      (d)    Section
        4
        shall be revised to remove Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 4.7 from
        the IP
        Agreement in their entirety.

      

      (e)    Exhibit
        4.7 is removed from the IP Agreement in its entirety.

      

      (f)    Section
        4.8 shall be renumbered to Section 4.2 and Exhibit 4.8 shall be renumbered
        to
        Exhibit 4.2.

      

      (g)    Section
        8
        shall be revised in its entirety to read as follows:

      

      "8.1 If
        VirtualScopics defaults in any obligation hereunder, Rochester will have
        the
        right to pursue any and all remedies available to it in law and in
        equity."

      

      (h)    Section
        8.2 shall be removed from the IP Agreement in its entirety.

      

      2.    Satisfaction
        of Conditions.
        The
        parties agree that upon execution and delivery of this Agreement and the
        payment
        of the amount due pursuant to revised Section 4.1 of the IP Agreement,
        VirtualScopics will have satisfied all conditions precedent set forth in
        Sections 2.4, 2.5 and 2.6 of the IP Agreement. 

      

      3.    No
        Other Changes.
        Except
        as amended hereby and to the extent the dates for satisfaction of the
        contingencies set forth in Section 2.4 of the IP Agreement were extended
        by
        letters executed by Rochester on April 19, 2002 and May 2, 2002, the terms
        and
        conditions of the IP Agreement shall remain in full force and effect as agreed
        to on the 5th
        day of
        April, 2002.

      

      IN
        WITNESS WHEREOF,
        the
        parties have executed and delivered this Agreement as of the date first above
        written.

       

      
        
          	 	 	 
	 	VIRTUALSCOPICS,
                  LLC
	 
 	 
 	 
 
	 	By:  	/s/
                  Mikael Totterman
	 	
                  
Mikael
                  Totterman
	 	Its: Chief
                  Operating Officer

        

        
          	
                	 	 
	 	UNIVERSITY
                  OF ROCHESTER
	 
 	 
 	 
 
	 	By:  	/s/
                  Charles Phelps
	 	
                  

                
	 	Its: Chief
                  Operating Officer

        

      

       

      
        
          
          

        

        
          -
            20
            -EXHIBIT
      10.8

      
        

        

      

       

      

      

      

      LEASE

       

      BY
        AND
        BETWEEN

      

      350
        LINDEN OAKS, L.P.

      LANDLORD

      

      AND

      

      VIRTUALSCOPICS

      TENANT

      

      DATED
        AS
        OF

      

      October
        17, 2003

      

      

      

      
        

        

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS

       

      
        
          
            	
                    PARAGRAPH
                      1: TERMS AND DEFINITIONS

                  	
                    1

                  
	
                    PARAGRAPH
                      2: OPTION TO RENEW

                  	
                    2

                  
	
                    PARAGRAPH
                      3: CONSENT

                  	
                    3

                  
	
                    PARAGRAPH
                      4: COMMENCEMENT AND POSSESSION

                  	
                    3

                  
	
                    PARAGRAPH
                      5: RENT

                  	
                    3

                  
	
                    PARAGRAPH
                      6: INTENTIONALLY DELETED

                  	
                    4

                  
	
                    PARAGRAPH
                      7: BUILDOUT; TENANT’S WORK

                  	
                    4

                  
	
                    PARAGRAPH
                      8: INTENTIONALLY DELETED

                  	
                    4

                  
	
                    PARAGRAPH
                      9: HOLDOVER TENANCY

                  	
                    4

                  
	
                    PARAGRAPH
                      10: TENANT’S ALTERATIONS

                  	
                    5

                  
	
                    PARAGRAPH
                      11: INTENTIONALLY DELETED

                  	
                    6

                  
	
                    PARAGRAPH
                      12: PROJECT SERVICES

                  	
                    6

                  
	
                    PARAGRAPH
                      13: INTERRUPTION OF SERVICES

                  	
                    7

                  
	
                    PARAGRAPH
                      14: USE OF LEASED PREMISES

                  	
                    7

                  
	
                    PARAGRAPH
                      15: SIGNS AND GRAPHICS

                  	
                    7

                  
	
                    PARAGRAPH
                      16: ENVIRONMENTAL PROVISIONS

                  	
                    8

                  
	
                    PARAGRAPH
                      17: INSURANCE AND WAIVER OF SUBROGATION

                  	
                    9

                  
	
                    PARAGRAPH
                      18: REPAIRS

                  	
                    10

                  
	
                    PARAGRAPH
                      19: ASSIGNMENT AND SUBLETTING

                  	
                    10

                  
	
                    PARAGRAPH
                      20: ADDITIONAL RIGHTS RESERVED TO THE LANDLORD

                  	
                    11

                  
	
                    PARAGRAPH
                      21: LANDLORD’S REPRESENTATIONS

                  	
                    12

                  
	
                    PARAGRAPH
                      22: CASUALTY AND UNTENANTABILITY

                  	
                    12

                  
	
                    PARAGRAPH
                      23: CONDEMNATION

                  	
                    13

                  
	
                    PARAGRAPH
                      24: WAIVER OF CERTAIN CLAIMS

                  	
                    13

                  
	
                    PARAGRAPH
                      25: LIMITATION OF LANDLORD’S LIABILITY

                  	
                    13

                  
	
                    PARAGRAPH
                      26: TENANT’S DEFAULT

                  	
                    13

                  
	
                    PARAGRAPH
                      28: LANDLORD’S DEFAULT

                  	
                    15

                  
	
                    PARAGRAPH
                      29: REMEDIES OF TENANT

                  	
                    15

                  
	
                    PARAGRAPH
                      30: SURRENDER OF LEASED PREMISES

                  	
                    16

                  
	
                    PARAGRAPH
                      31: SEVERABILITY

                  	
                    16

                  
	
                    PARAGRAPH
                      32: WAIVER

                  	
                    16

                  
	
                    PARAGRAPH
                      33: ESTOPPEL

                  	
                    16

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          
            	
                    PARAGRAPH
                      34: SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE

                  	
                    16

                  
	
                    PARAGRAPH
                      35: QUIET ENJOYMENT

                  	
                    17

                  
	
                    PARAGRAPH
                      36: ATTORNEYS’ FEES

                  	
                    17

                  
	
                    PARAGRAPH
                      37: FORCE MAJEURE

                  	
                    17

                  
	
                    PARAGRAPH
                      38: APPLICABLE LAW

                  	
                    17

                  
	
                    PARAGRAPH
                      39: BINDING EFFECT; GENDER

                  	
                    17

                  
	
                    PARAGRAPH
                      40: TIME

                  	
                    17

                  
	
                    PARAGRAPH
                      41: WAIVER OF JURY TRIAL

                  	
                    17

                  
	
                    PARAGRAPH
                      42: HEADINGS

                  	
                    18

                  
	
                    PARAGRAPH
                      43: BROKERS

                  	
                    18

                  
	
                    PARAGRAPH
                      44: ENTIRE AGREEMENT

                  	
                    18

                  
	
                    PARAGRAPH
                      45: NOTICES

                  	
                    18

                  
	
                    PARAGRAPH
                      46: WAIVER OF REDEMPTION

                  	
                    18

                  
	
                    PARAGRAPH
                      47: PARKING

                  	
                    19

                  
	
                    PARAGRAPH
                      48: EXHIBITS

                  	
                    19

                  
	
                    PARAGRAPH
                      49: ADA

                  	
                    20

                  

          

        

      

      

      

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      LEASE

       

      This
        Lease is made as of the 17th day of October, 20053
        between
350
        LINDEN OAKS, L.P.,
        a
        limited partnership organized under the laws of the State of New York
        (“Landlord”), and VIRTUALSCOPICS,
        a
        limited liability company organized under the laws of the State of New York
        (“Tenant”). Landlord leases to Tenant and Tenant accepts from Landlord the
        Leased Premises, subject to the following terms and conditions:

       

      PARAGRAPH
        1: TERMS AND DEFINITIONS.

       

      The
        following terms and definitions shall be applied uniformly throughout the
        Lease:

       

      A.    “Leased
        Premises”
        shall
        mean a portion of the space located on the 1st
        floor of
        the Building shown on the floor plan attached hereto as Exhibit
        A,
        together with the right to use in common with other tenants of the Building
        hallways, elevators, restrooms and other common areas, plus associated
        parking.

       

      B.    “Building”
        shall
        mean a three story, masonry construction office building located at 350 Linden
        Oaks.

       

      C.    “Project”
        shall
        mean Linden Oaks Office Park located in the Town of Pittsford, County of
        Monroe,
        State of New York, with a mailing address of Rochester, New York
        14625.

       

      D.    “Tenant’s
        Rentable Square Footage”
        shall
        mean approximately 12,258 rentable square feet (10,945 usable square feet
        plus a
        building “add-on factor” of twelve percent (12%)) in the Leased Premises. “Total
        Rentable Square Footage” of the Building shall mean 77,000 rentable square
        feet.

       

      E.    “Lease
        Commencement Date”
        shall
        mean October 1, 2003, or upon the completion of Landlord’s Work, whichever
        occurs later. Notwithstanding the foregoing provisions, the Lease Commencement
        Date shall be subject to the provisions of Paragraph 4 hereof. 

       

      F.    “Lease
        Expiration Date”
        shall
        mean March 31, 2006 unless sooner terminated by Landlord or Tenant pursuant
        to
        the provisions of this Lease.

       

      G.    “Term”
        shall
        mean the two (2) year six (6) month period, commencing with the Lease
        Commencement Date and ending with the Lease Expiration Date. The Lease
        Commencement Date, Lease Expiration Date and Term may be adjusted pursuant
        to
        Paragraph 4 of this Lease.

       

      H.    “Base
        Rent”
        shall
        mean $73,548.00 for the first six (6) months of the Term ($12.00 per square
        foot
        multiplied by Tenant’s Rentable Square Footage) payable in monthly installments
        of $12,258.00 except that there shall be no Base Rent due for the first month
        of
        the Term; $79,677.00 for the second six (6) months of the Term ($13.00 per
        square foot multiplied by Tenant’s Rentable Square Footage) payable in monthly
        installments of $13,279.50; $85,806.00 for the third sixth (6) months of
        the
        Term ($14.00 per square foot multiplied by Tenant’s Rentable Square Footage)
        payable in monthly installments of $14,301.00; and $183,870.00 for the last
        twelve (12) months of the Term ($15.00 per square foot multiplied by Tenant’s
        Rentable Square Footage) payable in monthly installments of $15,322.50. The
        Total Base Rent over the entire term is $422,901.00. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      I.    Intentionally
        Deleted.

       

      J.    “Lease
        Year”
        shall
        mean a period of twelve (12) months beginning with the Lease Commencement
        Date
        or any anniversary thereof (unless such day is other than the first of a
        calendar month, in which event it shall begin on the first day of the following
        calendar month). 

       

      K.    Intentionally
        Deleted. 

       

      L.    “Permitted
        Purpose”
        shall
        mean general office use.

       

      M.    “Managing
        Agent”
        shall
        mean Linden Oaks Management Company, Inc., whose address is 400 Linden Oaks
        Office Park, Rochester, New York 14625, or such other party as Landlord may
        designate from time to time.

       

      N.    “Broker
        of Record”
        shall
        mean Gerbracht Hines Associates, Roz Gerbracht, Broker.

       

      O.    “Landlord’s
        Notice Address”
        is 400
        Linden Oaks Office Park, Rochester, New York, 14625.

       

      P.    “Tenant’s
        Notice Address”:
        350
        Linden Oaks, Pittsford, New York 14625.

       

      Q.    “Additional Rent”
        shall
        mean all sums payable by Tenant under this Lease, whether or not stated to
        be
        Base Rent or Additional Rent.

       

      PARAGRAPH
        2: OPTION TO RENEW.

       

      If
        this
        Lease shall not have been terminated pursuant to any provisions hereof, and
        provided that Tenant is not in default hereunder, then Tenant may, at Tenant’s
        option, extend the term of this Lease for one (1) additional term of two
        (2)
        years, commencing on the expiration of the original term, on the same terms,
        covenants and conditions of this Lease, except that there shall be no further
        option to renew (the “Renewal Term”). The renewal option shall be subject to the
        following conditions:

       

      A.    Tenant
        shall notify Landlord in writing of its desire to exercise its renewal option
        no
        later than three (3) months prior to the expiration of the initial Term.
        If
        Tenant fails to so notify Landlord, Tenant’s option to renew shall automatically
        expire.

       

      B.    Base
        Rent
        for the Renewal Term shall mean $196,128.00 annually ($16.00 per square foot
        multiplied by Tenants Rentable Square Footage) payable in monthly installments
        of $16,344.00 plus applicable sales tax, if any.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        3: CONSENT.

       

      Notwithstanding
        any other provision of this Lease, all consents and approvals to be given
        by
        Landlord or Tenant, as the case may be, shall not be unreasonably or arbitrarily
        withheld, delayed or conditioned, and shall be timely made.

       

      PARAGRAPH
        4: COMMENCEMENT AND POSSESSION.

       

      A.    Subject
        to the terms and conditions herein, the Term and the possession of the Leased
        Premises by Tenant shall commence on the Lease Commencement Date. Subject
        to the
        conditions herein, the Rent shall commence one month after the Lease
        Commencement Date. 
        Notwithstanding anything to the contrary contained herein, Tenant hereby
        waives
        any right to rescind this Lease under Section 223-a of the New York Real
        Property Law or any successor statute of similar import then in force and
        further waives the right to recover any damages which may result from Landlord’s
        failure to deliver possession of the Leased Premises to Tenant on the Lease
        Commencement Date, and provided that Tenant is not responsible for such
        inability to give such possession, the Base Rent and Additional Rent reserved
        and covenanted to be paid herein shall not commence until possession of the
        Leased Premises is given to, or the Leased Premises are available for occupancy
        by Tenant, and no such failure by Landlord to give possession of the Leased
        Premises on the Lease Commencement Date shall in any wise affect the validity
        of
        this Lease or the obligations of Tenant hereunder or give rise to any claim
        for
        damages by Tenant or claim for rescission of this Lease nor shall the same
        be
        construed in any wise to extend the Term. Tenant shall have the right to
        terminate the Lease if possession is not delivered by November 1,
        2003.

       

      B.    Promptly
        after the Lease Commencement Date is ascertained, Landlord and Tenant shall
        execute a Lease Commencement Date Agreement in the form attached hereto as
        Exhibit
        E,
        confirming the Lease Commencement Date, Tenant’s Rentable Square Footage, Base
        Rent, and the Lease Expiration Date.

       

      PARAGRAPH
        5: RENT.

       

      Tenant
        shall pay each monthly installment of Base Rent in advance on or before the
        first calendar day of each month, together with each monthly installment
        of
        Additional Rent, as defined below. Base Rent and Additional Rent, together
        with
        all other amounts payable by Tenant to Landlord under this Lease, shall be
        sometimes referred to collectively as “Rent.” Tenant shall pay all Rent to
        Landlord or Managing Agent at a place specified by Landlord. If Tenant fails
        to
        make any payment of Rent within ten (10) business
        days after receipt of written notice from Landlord that payment is
        past due,
        then
        Tenant shall pay a late charge of two percent (2%) of the amount of the payment
        per month from the date when due. Such late charge shall constitute Additional
        Rent, and shall be paid with the next monthly installment of Rent coming
        due.
        Such late charge shall be in addition to, and not in lieu of, all other rights
        and remedies provided to Landlord in this Lease.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          6: INTENTIONALLY DELETED.

         

      

      PARAGRAPH
        7: BUILDOUT; TENANT’S WORK.

       

      A.    Landlord
        will provide the Leased Premises in “as is” condition except that Landlord shall
        add a door/separation between the conference rooms of the lobby and the work
        area (“Landlord’s Work”). Landlord will also provide to Tenant the furnishings
        currently existing in the Leased Premises for Tenant’s use during the term of
        this Lease. Landlord and Tenant shall agree upon an inventory list to be
        prepared by Landlord’s representative. Provided there are no uncured Tenant
        defaults at the expiration of the Term of this Lease, the furnishings shall
        then
        become the property of Tenant. In the event the Lease is terminated prior
        to the
        end of the Term, or Tenant elects not to remove the furnishings at the
        expiration of the Term, then Tenant shall leave the furniture in the Leased
        Premises in reasonably good condition, normal wear and tear excepted.

       

      B.    After
        reasonable notice to Landlord, Tenant shall have the right to enter the Leased
        Premises prior to the Lease Commencement Date to perform Tenant’s Work (as
        hereinafter defined). Tenant agrees (a) to comply with all covenants and
        conditions of this Lease, except for the payment of Rent while performing
        such
        Tenant’s Work prior to the Lease Commencement Date, (b) that Tenant’s Work will
        not interfere with the other tenants in the building, (c) such occupancy
        shall
        be at Tenant’s sole risk and (d) Tenant shall be responsible for any damage
        caused to Landlord’s work by Tenant or its contractors.

       

      C.    The
        term
“Tenant’s Work” shall mean installation of telephones, computers, additional
        furnishings not provided in (a) above, finishes, signage, artwork and other
        improvements which will need to be installed in the Leased Premises. As part
        of
        Tenant’s Work, Tenant shall provide chair pads for wheeled and swivel-type
        chairs.

       

      D.    All
        Tenant’s Work shall be done at Tenant’s sole cost and expense and in accordance
        with all laws, ordinances, and rules and regulations of any federal, state,
        county, municipal, or other public authority having jurisdiction over the
        Leased
        Premises. Tenant shall use qualified contractors and all work must be done
        in a
        good and workmanlike manner and conform with the standard of the
        Building.

       

      E.    Any
        mechanic’s lien filed against the leased Premises or the Building for work
        claimed to have been done or materials claimed to have been furnished to
        Tenant
        shall be discharged by Tenant within thirty (30) days from the date of receipt
        of notice of the lien.

       

      PARAGRAPH
        8: INTENTIONALLY DELETED.

       

      PARAGRAPH
        9: HOLDOVER TENANCY.

       

      If
        Tenant
        shall holdover without permission after the expiration of the Term, Tenant
        shall
        be deemed to occupy the Leased Premises as a tenant from month to month,
        which
        tenancy may be terminated by thirty (30) days written notice. During such
        tenancy, Tenant agrees to pay to Landlord an amount equal to one hundred
        fifty
        percent (150%) of the monthly Base Rent (the Base Rent being in effect the
        last
        month of the Term) plus Additional Rent, and to be bound by all of the terms,
        conditions and covenants herein specified or the holdover shall be deemed
        to be
        a Tenant’s Default under Paragraph 26 of this Lease. Landlord may exercise all
        of its rights and remedies in the event of Tenant’s holdover without permission
        after the expiration of the Term.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          10: TENANT’S ALTERATIONS.

         

      

      A.    With
        the
        exception of Tenant’s Work, Tenant shall not make any alterations, additions or
        improvements (collectively referred to as “Tenant Alterations”) in or to the
        Leased Premises without first obtaining the written consent of Landlord.
        All
        Tenant’s Alterations shall be done in accordance with (i) all laws, ordinances,
        and rules and regulations of any federal, state, county, municipal, or other
        public authority having jurisdiction over the Leased Premises, (ii) all
        requirements of any national or local board of fire underwriters or other
        body
        exercising similar functions, and (iii) all requirements of any insurance
        company which has issued a policy with respect to the Tenant’s
        Alterations.

       

      B.    Tenant
        shall use qualified contractors and all work must be done in a good and
        workmanlike manner and conform with the standard of the Building. At Landlord’s
        election, Tenant shall remove all Tenant’s Alterations prior to its return of
        possession of the Leased Premises to Landlord pursuant to the terms of this
        Lease and Tenant shall restore the Leased Premises to its original condition
        prior to the installation of such Tenant’s Alterations, subject to ordinary wear
        and tear and damage by fire and other insured casualty excepted. Notwithstanding
        the foregoing, Tenant shall not be required to remove any of Tenant’s
        Alterations for which Tenant received prior written approval from the Landlord
        allowing such Tenant’s alterations to remain after the expiration or earlier
        termination of this Lease.

       

      C.    Any
        mechanic’s lien filed against the Leased Premises or the Building for work
        claimed to have been done or material claimed to have been furnished to Tenant
        shall be discharged by Tenant within thirty (30) days from the date of receipt
        of notice of the lien. For the purposes hereof, the bonding of such lien
        by a
        reputable casualty or insurance company reasonably satisfactory to Landlord
        shall be deemed the equivalent of a discharge of any such lien. Should any
        action, suit, or proceeding be brought upon any such lien for the enforcement
        or
        foreclosure of the same, Tenant shall defend Landlord therein, by counsel
        reasonable satisfactory to Landlord, and pay any damages and satisfy and
        discharge any judgment entered therein against Landlord.

       

      D.    Tenant
        shall indemnify and hold Landlord harmless from any injury, damage, cost
        or loss
        sustained by persons or property as a result of any defect in the design,
        material or workmanship of Tenant Alterations, unless caused by Landlord’s
        breach of this Lease or by the negligent or willful acts or omissions of
        Landlord, its agent, contractor or employees.

       

      E.    Upon
        completion of the Tenant’s Alterations, Tenant shall furnish to Landlord (i) a
        photocopy of each final or permanent certificate of occupancy issued for
        all
        portions of the Tenant’s Alterations by all governmental authorities, (ii)
        photocopies of all other governmental approvals issued for or with respect
        to
        the construction of the Tenant’s Alterations and the use and occupancy of the
        Leased Premises, (iii) photocopies of all certificates and approvals issued
        by
        the fire underwriters, and (iv) two (2) complete sets of “as built” drawings and
        specifications for Tenant’s Alterations (the “As Built Drawings”) prepared on an
        AutoCAD Computer Assisted Drafting and Design System (or such other system
        or
        medium as Landlord may direct) using naming conventions acceptable to Landlord
        and copies of such drawing and specifications supplied on magnetic computer
        media in a format acceptable to Landlord. Tenant shall not use or occupy,
        and
        shall not permit the use or occupancy of the Leased Premises unless and until
        a
        certificate of occupancy shall have been issued with respect to such portion
        if
        the issuance of such a certificate is a prerequisite to use and occupancy
        under
        applicable laws.

       

      
        
          
          

        

        
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        PARAGRAPH
          11: INTENTIONALLY DELETED.

         

      

      PARAGRAPH
        12: PROJECT SERVICES.

       

      Landlord
        shall furnish Project Services, as defined herein, in the manner generally
        provided in first class office buildings in the Rochester, New York area,
        including, but not limited to:

       

      A.    Utility
        Services: Electricity, hot and cold water; sewer; refuse and rubbish removal;
        lighting, and bulb, tube, lamp and ballast replacement; and heating, ventilation
        and air conditioning all available twenty-four (24) hours a day, seven (7)
        days
        a week. Bulb, tube, lamp and ballast replacements are at Tenant’s expense, and
        will be billed as performed by Landlord. 

       

      The
        heating, ventilation and air conditioning system shall be available twenty-four
        (24) hours a day, seven (7) days a week and shall provide a working environment
        capable of maintaining (as individually controlled by Tenant) seventy-two
        (72)
        degrees Fahrenheit in all spaces in accordance with the American Society
        of
        Heating, Refrigeration and Air-conditioning Engineers (“ASHRAE”) winter design
        conditions, and capable of maintaining seventy-four (74) degrees Fahrenheit
        with
        not more than fifty percent (50%) relative humidity in all spaces in accordance
        with ASHRAE summer design conditions. Fresh air shall be introduced into
        the
        Building in accordance with ASHRAE but not less than twenty (20) cubic feet
        per
        person per minute. The carbon dioxide count in the Building shall never exceed
        one thousand (1000) parts per million. 

       

      Should
        Tenant, in Landlord’s reasonable judgment, use additional, unusual or excessive
        utility services, Landlord reserves the right to charge Tenant Landlord’s actual
        costs for such services as determined by separate submeter installed at Tenant’s
        expense, or by other means mutually acceptable to Landlord and
        Tenant.

       

      B.    Maintenance
        Services: Maintenance of all interior and exterior areas including parking
        areas
        (exclusive of the Leased Premises) and the roof. Services include, but are
        not
        limited to, lighting, landscaping, cleaning, painting, window washing, and
        snow
        plowing.

       

      C.    Janitorial
        Service: Landlord shall provide for cleaning of the Leased Premises.

       

      D.    Elevator
        Service: During normal business hours (if the Building contains an elevator
        or
        elevators for the use of Tenant). There shall also be at least one (1) elevator
        available twenty-four (24) hours a day, seven (7) days a week.

       

      E.    Security:
        Landlord shall provide adequate security for the Building, including personnel
        or equipment to limit access to the Building after normal business hours.
        However, Landlord shall not be liable for loss to Tenant, its agents, employees,
        and visitors arising out of theft, burglary, or damage or injury to persons
        or
        property caused by persons gaining access to the Building or the Leased
        Premises, except if such loss, injury, or damage arises from the breach of
        this
        Lease by Landlord or the negligent or willful acts or omissions of
        Landlord.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      The
        services described in Paragraphs 12(A) (B) (C) (D) and (E) above shall be
        collectively referred to as “Project Services.” The costs of Project Services
        shall be part of Base Rent, unless otherwise indicated. Tenant will have
        access
        twenty-four (24) hours a day, seven (7) days a week to the
        Building.

       

      PARAGRAPH
        13: INTERRUPTION OF SERVICES.

       

      Notwithstanding
        any other provisions of this Lease, if any of the Project Services to be
        provided by Landlord are suspended or interrupted for any reason other than
        the
        default, willful acts or negligence of Tenant for a period of more than three
        (3) consecutive business days, Rent due hereunder shall abate until such
        time as
        Project Services are restored to the Leased Premises.

       

      PARAGRAPH
        14: USE OF LEASED PREMISES.

       

      Tenant
        agrees to:

       

      A.    Use
        the
        Leased Premises for the Permitted Purpose and for no other purpose.

       

      B.    Use
        the
        Leased Premises in compliance with all laws, ordinances, regulations or rules
        applicable to the Leased Premises and all requirements of the carriers of
        insurance covering the Building and the Project. However, so long as it uses
        the
        Leased Premises for the Permitted Purpose, Tenant shall not be obligated
        to make
        any changes to the Leased Premises due to laws, ordinances, regulations or
        rules, unless such changes are required as a result of Tenant
        Alterations.

       

      C.    Not
        do or
        permit anything to be done in or about the Leased Premises, or bring or keep
        anything in the Leased Premises that may increase Landlord’s fire and extended
        coverage insurance premium, damage the Building or the Project, constitute
        waste, constitute an immoral purpose, or be a nuisance, public or private,
        or
        menace or other disturbance to tenants of adjoining premises or anyone
        else.

       

      D.    Observe,
        perform and abide by all the Rules and Regulations as shown on Exhibit
        C
        attached
        hereto and made a part hereof any such other reasonable rules and regulations
        as
        may be subsequently enacted by Landlord from time to time.

       

      PARAGRAPH
        15: SIGNS AND GRAPHICS.

       

      Tenant
        shall be listed on the Building directory at Landlord’s cost in a manner
        proportionate to its occupancy and on no less favorable a basis as is accorded
        to other tenants of the Building. Tenant shall be responsible, at its sole
        cost,
        for its sign at the entrance to the Leased Premises, containing its standard
        graphic. Tenant’s signage shall be substantially equal in magnitude, location
        and quality as the signage provided for any other office tenant in the
        Building. Tenant
        shall not place or permit any additional lettering, sign, advertisement,
        notice
        or object on the windows or doors or on the outside of the perimeter walls
        of
        the Leased Premises, unless Landlord has given prior written consent. Any
        sign
        or lettering not approved by Landlord may be removed by Landlord and the
        cost of
        such removal and any necessary repair shall be paid for by Tenant.

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          16: ENVIRONMENTAL PROVISIONS.

         

      

      A.    “Hazardous
        Materials” include substances (i) which require remediation under any
        Environmental Laws; or (ii) which are or become defined as a “hazardous
        waste,”“hazardous substance”, pollutant or contaminant under any Environmental
        Laws; or (iii) which are toxic, explosive, corrosive, flammable, infectious,
        radioactive, carcinogenic or mutagenic; or (iv) which contain petroleum (as
        defined under New York State navigation laws), petroleum hydrocarbons,
        polychlorinated biphenyls, asbestos, asbestos containing materials or urea
        formaldehyde.

       

      B.    “Environmental
        Laws” mean all applicable present and future statutes, regulations, rules,
        ordinances, codes, permits or orders of all governmental agencies, departments,
        commissions, boards bureaus, or instrumentalities of the United States, states
        and their political subdivisions and all applicable judicial, administrative
        and
        regulatory decrees and judgments relating to the protection of public health
        or
        safety or of the environment.

       

      C.    “Environmental
        Damages” means all claims, judgments, losses, penalties, fines, liabilities,
        encumbrances, liens, costs and reasonable expenses of investigation, defense
        or
        good faith settlement resulting from violations of Environmental Laws, and
        including, without limitation: (i) damages for personal injury and injury
        to
        property or natural resources; (ii) reasonable fees and disbursements of
        attorneys, consultants, contractors, experts and laboratories; and (iii)
        costs
        of any cleanup, remediation, removal, response, abatement, containment, closure,
        restoration or monitoring work required by any Environmental Laws and other
        costs reasonable necessary to restore full economic use of the Leased Premises
        or Project.

       

      D.    Tenant
        agrees to indemnify, defend (with counsel satisfactory to Landlord), reimburse
        and hold Landlord harmless against any Environmental Damages incurred by
        Landlord arising from Tenant’s breach of Paragraph E below. The obligations of
        Tenant under this Paragraph 16 shall survive the termination of this Lease
        and
        the discharge of all other obligations owed by the Tenant to the Landlord
        under
        this Lease. Notwithstanding the above, Tenant shall not be liable for any
        Environmental Damages resulting from the use of the Premises prior to Tenant’s
        occupancy thereof. Landlord shall defend, indemnify and hold Tenant harmless
        from all claims, losses and liabilities resulting from any such use prior
        to
        Tenant’s occupancy of the Premises.

       

      E.    Tenant
        shall (i) comply with all Environmental Laws; (ii) not cause or permit any
        Hazardous Materials to be treated, stored, disposed of, generated, or used
        in
        the Leased Premises or the Project, provided, however, that Tenant may store,
        use or dispose of products customarily found in offices and used in connection
        with operation and maintenance of property if it complies with all Environmental
        Laws and does not contaminate the Leased Premises, the Building, the Project
        or
        the environment; and (iii) promptly after receipt, deliver to the Landlord
        a
        copy of any communication concerning any past or present, actual or potential
        violation of Environmental Laws or liability of Tenant for Environmental
        Damages.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      F.    The
        air
        circulated through the HVAC system located in the Leased Premises shall consist
        of an average amount of fresh air to meet applicable ventilation codes, and
        shall meet all of the latest recommendations from the American Society of
        Heating, Refrigeration and Air Conditioning Engineers, whether in existence
        now
        or promulgated at any time during the Term of the Lease, including, without
        limitation, those pertaining to air exchange, ventilation rates and HVAC
        design
        and maintenance for existing buildings. Landlord covenants and warrants that
        the
        HVAC system will be checked periodically to assure the safety of the air
        furnished to the Leased Premises and to common areas in the Building. All
        costs
        (including claims) associated with testing, upkeep, operations, maintenance,
        repairs and remediation of the HVAC system, shall be borne by
        Landlord.

       

      G.    Landlord
        represents and warrants, to Landlord’s knowledge, that no part of the Building,
        including the walls, ceiling, structural steel, flooring, pipes or boilers,
        is
        wrapped, insulated, fire proofed, or surfaced with any asbestos containing
        materials.

       

      PARAGRAPH
        17: INSURANCE AND WAIVER OF SUBROGATION.

       

      A.    Landlord
        agrees that throughout the Term it will insure the Building (excluding any
        property which Tenant is obligated to insure) for its full replacement cost
        against loss due to fire and other casualties included in standard extended
        coverage insurance. In addition, Landlord will maintain public liability
        and
        loss of rental income insurance in amounts and with insurers satisfactory
        to
        Landlord.

       

      B.    Throughout
        the Term, Tenant will, at its own expense, maintain comprehensive general
        liability insurance with respect to the Leased Premises and Tenant’s activities
        in the Leased Premises and the Building, providing bodily injury and property
        damage coverage, in amounts no less than:

       

      
        	 	
                (i)

              	
                $3,000,000
                  with respect to bodily injury or death to any one
                  person;

              

      

       

      
        	 	
                (ii)

              	
                $3,000,000
                  with respect to bodily injury or death arising out of any one
                  occurrence;

              

      

       

      
        	 	
                (iii)

              	
                $500,000
                  with respect to property damage or other loss arising out of any
                  one
                  occurrence.

              

      

       

      C.    Nothing
        in this Paragraph 17 shall prevent Tenant from obtaining insurance of the
        kind
        and in the amount specified above under a blanket insurance policy covering
        other properties as well as the Leased Premises. Tenant agrees that it will
        name
        Landlord as an additional insured under the liability policies it is required
        to
        maintain pursuant to this Paragraph 17, and at least five (5) days prior
        to the
        Lease Commencement Date and annually thereafter, Tenant will deliver evidence
        of
        such insurance to Landlord on ACORD Form 27, which shall provide Landlord
        thirty
        (30) days’ notice of any cancellation or modification of Tenant’s insurance
        policy.

       

      D.    Tenant
        and Landlord release each other and waive any right of recovery against each
        other for loss or damage to the waiving party or its respective property,
        which
        occurs in or about the Leased Premises, whether due to the negligence of
        either
        party, its agents, employees, officers, contractors, licensees, invitees
        or
        otherwise, to the extent that such loss or damage would be insured against
        under
        the terms of standard fire and extended coverage insurance policies if the
        parties hereto complied with their obligations. Tenant and Landlord agree
        that
        all policies of insurance obtained by either of them in connection with the
        Leased Premises shall contain appropriate waiver of subrogation
        clauses.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          18: REPAIRS.

         

      

      Subject
        only to Tenant’s liability to repair damage caused by the negligence or willful
        acts of its agents, employees or occupants, Landlord shall at its expense
        maintain and keep in repair the Building and Leased Premises including both
        exterior, interior, parking lots, driveways and all structural parts, fixtures,
        wiring, plumbing, heating, water pipes, plastering and flooring therein,
        except
        only those installations, if any, provided by Tenant. Without limiting the
        foregoing, Landlord agrees to keep heating plant, electrical and water
        connections and facilities and air conditioning in first class operating
        condition and available for continuous use. If Landlord fails to make repairs
        or
        replacements when necessary to the Building or the Leased Premises within
        thirty
        (30) days of receipt of written notice from Tenant, Tenant may at its option
        make such repairs, and Tenant may deduct its reasonable out-of-pocket costs
        for
        the repairs from subsequent payments of Rent.

       

      PARAGRAPH
        19: ASSIGNMENT AND SUBLETTING.

       

      A.    Tenant
        shall not assign or sublet, in whole or in part, all or any part of the Leased
        Premises, without the prior written consent of Landlord.

       

      B.    Landlord
        shall not be deemed to have acted unreasonably with respect to the denial
        of any
        request for consent if (i) the proposed assignee or sublessee is not of
        substantial and recognized financial responsibility, satisfactory to Landlord
        and its mortgagee, if any, unless Tenant agrees to remain liable on the Lease
        for the remainder of the term, including any renewal option; (ii) the Landlord
        has been unable to obtain any required consent of its mortgagee to such
        assignment; or (iii) the Landlord would be prohibited from leasing space
        in the
        Building to the proposed assignee or sublessee pursuant to a provision contained
        in a lease for space in the Building or Project. Tenant shall, at the time
        Tenant requests consent of Landlord, deliver to Landlord such information
        in
        writing as Landlord may reasonably require respecting the proposed assignee
        or
        subtenant including, without limitation, the name, address, nature of business,
        ownership, financial responsibility and standing of such proposed assignee
        or
        subtenant and the terms of the proposed assignment or subletting, and Landlord
        shall have ten (10) days
        after receipt of all required information to elect one of the following:
        (i)
        consent to such proposed assignment or sublease; (ii) refuse such consent;
        or
        (iii) elect to terminate this Lease or in a partial sublease, terminate this
        Lease as to the portion of the Leased Premises proposed to be sublet, which,
        in
        both instances, Tenant remains liable for the remainder of the Lease. If
        Landlord elects to exercise its right to terminate this Lease or a portion
        thereof under a proposed assignment or subletting, Tenant shall have the
        right
        to withdraw its request for Landlord’s consent, in which event Landlord’s
        termination notice shall be null and void and the Lease shall remain in full
        force and effect. No subletting by Tenant shall relieve Tenant of any obligation
        under this Lease, including, but not limited to, Tenant’s obligation to pay Rent
        and Additional Rent. An assignment of this Lease shall result in Tenant being
        fully released from any and all liability accruing subsequent to the assignment.
        Any purported assignment or subletting contrary to the provisions hereof
        without
        consent shall be void. The consent by Landlord to any assignment or subletting
        shall not constitute a waiver of the necessity for such consent to any
        subsequent assignment or subletting. Landlord’s consent may be subject to
        Landlord’s requirements regarding security deposit, lease guarantees and other
        security requirements.  In
        obtaining Landlord’s consent required by this Paragraph, Tenant shall be
        responsible for all legal, professional, administrative, managerial and all
        other expenses (collectively “Expenses”), which expenses may include, without
        limitation, hourly fees for administrative and management personnel and an
        allocation for overhead and profit, incurred by Landlord in connection with
        Landlord’s review of any proposed assignment or sublet, including, but not
        limited to, attorney’s fees and disbursements, in reviewing any documents
        relating to any proposed assignment or sublease. All forms of consents and
        agreements relating to or affecting any assignment or sublease shall be supplied
        or approved, as Landlord shall elect, by counsel to Landlord. For purposes
        of
        this Lease, Expenses shall be deemed to be either (a) two percent (2%) of
        the
        Base Rent to be paid by the subtenant or assignee to Tenant where the Tenant
        produces the subtenant or assignee or (b) four percent (4%) of the Base Rent
        to
        be paid by the subtenant or assignee where the Landlord produces the subtenant
        or assignee, plus Landlord’s legal fees and disbursements arising out of or
        related to the review of the proposed sublease or assignment and shall be
        due
        and payable as Additional Rent. The obligation of Tenant to pay Landlord
        its
        Expenses shall survive the expiration or earlier termination of this Lease.
        Additionally, the terms of any sublease or assignment shall be deemed
        confidential and proprietary information that shall not be disseminated to
        any
        third parties. Finally, advertising or publicity to attempt to sublet or
        assign
        any portion of the Leased Premises shall not be permitted without the Landlord’s
        consent which may be withheld in its sole and absolute discretion. 

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      C.    If
        the
        sublease or assignment is approved, Tenant will pay to Landlord fifty percent
        (50%) of the “Net” (a) premium, if any, as and when received by Tenant on
        account of an assignment or (b) profit, if any, as and when received by Tenant
        on any sublease. “Net” means after deducting from the first payments received
        all reasonable, actual out-of-pocket expenses incurred (and actually paid)
        in
        connection with the transaction, including, but not limited to, advertising
        costs, brokerage fees, legal fees, construction costs, cash inducements,
        and
        non-cash inducements such as lease takeovers and rent and additional rent
        paid
        by Tenant apportioned to the subject space for the period when the space
        was
        vacant and on the market for subletting or assignment. Tenant shall provide
        all
        reasonable documentation required by Landlord to confirm any expenses claimed
        by
        Tenant. Any sums due hereunder shall constitute Additional Rent and shall
        be
        paid by Tenant within twenty (20) days of the receipt of sublet or assignment
        rent from the approved sublease or assignee.

       

      PARAGRAPH
        20: ADDITIONAL RIGHTS RESERVED TO THE LANDLORD.

       

      Without
        notice and without liability to Tenant or without effecting an eviction or
        disturbance of Tenant’s use or possession, Landlord hereby reserves the right
        to: (a) grant utility easements or other easements in, or replat, subdivide
        or
        make other changes in the legal status of the land underlying the Building
        or
        the Project as Landlord shall deem appropriate in its sole discretion, provided
        such changes do not substantially interfere with Tenant’s use of the Leased
        Premises for the Permitted Purpose; (b) enter the Leased Premises at reasonable
        times and upon reasonable notice and at any time in the event of an emergency
        to
        inspect, alter or repair the Leased Premises or the Building and to perform
        any
        acts related to the safety, protection, reletting, sale or improvement of
        the
        Leased Premises, the Building or the Project or to enter the Leased Premises
        to
        perform janitorial services; (c) change the name or street address of the
        Building or the Project; (d) install and maintain signs on and in the Building
        and the Project; and (e) make such rules and regulations as, in the sole
        judgment of Landlord, may be needed from time to time for the safety of the
        tenants, the care and cleanliness of the Leased Premises, the Building and
        the
        Project and the preservation of good order therein, so long as such rules
        and
        regulations are equitably enforced against all other tenants.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          21: LANDLORD’S REPRESENTATIONS.

         

      

      Landlord
        represents that the heating and air conditioning systems, plumbing, hot water
        heater, electrical systems, and any other systems equipment, fixture or property
        presently existing or to be installed in the Leased Premises by Landlord
        will be
        in compliance with all local building codes, in good working order and that
        the
        roof will be free from leaks upon Lease Commencement Date. Landlord represents
        and covenants that Landlord has obtained all necessary permits, licenses
        and
        certificates of occupancy and the Leased Premises and Building is or shall
        be
        constructed in accordance with and shall comply with all zoning codes and
        other
        governmental regulations and statutes, covenants, conditions and restrictions
        of
        record, compliance to be in effect when Tenant takes possession of the Leased
        Premises and throughout the Term, for the use contemplated herein.

       

      PARAGRAPH
        22: CASUALTY AND UNTENANTABILITY.

       

      A.    If
        the
        Leased Premises or the Building is damaged or destroyed by fire or any other
        casualty, cause, or condition, or if the common areas in the Building are
        damaged to such an extent as to substantially interfere with Tenant’s use of the
        Leased Premises, and that damage or destruction cannot be repaired within
        one
        hundred twenty (120) days (or thirty (30) days during the last six (6) months
        of
        the Term, Landlord or Tenant may, by written notice to the other party given
        within thirty (30) days after such damage, terminate this Lease. The termination
        shall be effective as of the date of such damage. Landlord’s determination as to
        whether the Building can be repaired within one hundred twenty (120) days
        may be
        conditioned on Landlord obtaining authorization from its mortgagee to apply
        insurance proceeds for the purpose of repairing or rebuilding.

       

      B.    Unless
        this Lease is terminated as provided above, Landlord shall proceed with due
        diligence to restore, repair and replace the Leased Premises and Building
        to the
        same condition as they were in as of the Lease Commencement Date, subject
        to
        compliance with all existing codes at the time of reconstruction and from
        and
        after the date of such damage to the date of completion of the repairs,
        replacements and restorations, a just proportion of the Rent shall abate
        according to the extent the full use and enjoyment of the Leased Premises
        are
        rendered impracticable by reason of such damage. Landlord shall be under
        no duty
        to restore any Tenant’s Alterations or Tenant’s Work.

       

      C.    Tenant
        hereby agrees that Landlord’s obligation to restore the Leased Premises and the
        rental abatement provided for in this Paragraph shall be Tenant’s sole recourse
        against Landlord in the event of a fire or other casualty to the Leased Premises
        and constitutes an “express agreement to the contrary” for purposes of Section
        227 of the New York Real Property Law or any successor statute of similar
        import
        then in effect.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      If
        any
        portion of the Leased Premises, including the parking spaces available to
        Tenant, if any, or access to the Leased Premises is taken by the power of
        eminent domain and if, in Tenant’s reasonable opinion, the remainder is
        inadequate for carrying out the Permitted Purpose, then Tenant shall have
        the
        option to cancel this Lease as of the effective date of condemnation. Tenant
        shall have the right, to the extent that the same shall not reduce or prejudice
        Landlord’s award, to claim from the condemning authority, but not from Landlord,
        such compensation as may be recoverable by Tenant in its own right for moving
        expenses and value of Tenant’s leasehold interest (including options to extend
        the same). If any characteristics of the Leased Premises are made less desirable
        by condemnation, and Tenant elects not to cancel, then there shall be an
        equitable adjustment of Rent for the balance of the Term, in direct proportion
        to the amount of the Leased Premises so taken.

       

      PARAGRAPH
        24: WAIVER OF CERTAIN CLAIMS.

       

      Tenant,
        to the extent permitted by law, waives all claims it may have against Landlord
        and against Landlord’s agents, employees and contractors for any damages
        sustained by Tenant or by any occupant of the Leased Premises, or by any
        other
        person, resulting from any cause arising at any time unless such damages
        are
        caused by the negligence, willful misconduct or breach of this Lease by
        Landlord, its agents, employees and contractors. Landlord, to the extent
        permitted by law, waives all claims it may have against Tenant, and against
        Tenant’s agents, employees and contractors for any damages sustained by Landlord
        or by any occupant of the Leased Premises, or by any other person, resulting
        from any cause arising at any time unless such damages are caused by the
        negligence, willful misconduct or breach of this Lease by Tenant, its agents,
        employees and contractors. Subject to the waiver of subrogation provision
        of
        Paragraph 17 hereof, Tenant and Landlord each agree to indemnify and hold
        the
        other party harmless from and against uninsured claims and liability of injuries
        to all persons and for damage to or loss of property occurring in or about
        the
        Leased Premises, Building or Project caused by any act of negligence, willful
        misconduct or breach of this Lease by the other party, its contractors, agents,
        employees, licensees and invitees.

       

      PARAGRAPH
        25: LIMITATION OF LANDLORD’S LIABILITY.

       

      The
        obligations of Landlord under this Lease do not constitute personal obligations
        of the individual partners, shareholders, directors, officers, employees,
        agents
        or contractors of Landlord, and Tenant shall look solely to Landlord’s interest
        in the Building, if any, and to no other assets of Landlord for satisfaction
        of
        any liability in respect of this Lease. Tenant will not seek recourse against
        the individual partners, shareholders, directors, officers, employees, agents
        or
        contractors of Landlord or any of their personal assets for such
        satisfaction.

       

      PARAGRAPH
        26: TENANT’S DEFAULT.

       

      It
        shall
        be a “Tenant’s Default” if Tenant shall: (a) fail to pay any monthly installment
        of Base Rent or Additional Rent, or any other sum payable hereunder within
        ten
        (10) days of the due date; (b) violate or fail to perform any of the other
        covenants or agreements herein made by Tenant, and such violation or failure
        shall continue for thirty (30) days after written notice thereof to Tenant
        by
        Landlord, except that if within the thirty (30) day period Tenant commences
        and
        thereafter proceeds diligently to remedy the violation or failure, Tenant
        shall
        not be in default hereunder; (c) make a general assignment for the benefit
        of
        its creditors or file a petition for bankruptcy or other reorganization,
        liquidation, dissolution or similar relief; (d) fail to have dismissed within
        sixty (60) days of filing a proceeding filed against Tenant seeking any relief
        mentioned in (c) above; or (e) have a trustee, receiver or liquidator appointed
        for Tenant or a substantial part of its property.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        27: REMEDIES OF LANDLORD.

       

      A.    If
        a
“Tenant’s Default” occurs, Landlord may, at its option pursue any or all of the
        following remedies: (i) terminate this Lease and Tenant’s right of possession of
        the Leased Premises; or (ii) peaceably reenter the Leased Premises and maintain
        this Lease in full force and effect and endeavor to relet all or part of
        the
        Leased Premises, or (iii) declare remaining Scheduled Rent and Additional
        Rent
        to be accelerated and immediately due and payable. In the event Landlord
        elects
        to maintain this Lease, Landlord shall have the right to relet the Leased
        Premises for such rent and upon such terms as Landlord deems reasonable and
        necessary, and Tenant shall be liable for damages sustained by Landlord,
        including, but not limited to, any deficiency in Rent for the period of time
        which would have remained in the Term in the absence of any termination,
        leasing
        fees, attorneys’ fees, other marketing and collection costs and all expenses of
        placing the Leased Premises in rentable condition. Notwithstanding anything
        to
        the contrary provided herein, Tenant remains liable for all its obligations
        under this Lease, even after its eviction from, or abandonment of, the Leased
        Premises, except as provided in Paragraph 19. 

       

      B.    The
        remedies granted to Landlord herein shall be cumulative and shall not exclude
        any other remedy allowed by law or in equity unless expressly waived or limited
        herein, and shall not prevent the enforcement of any claim Landlord may have
        against Tenant.

       

      PARAGRAPH
        28: LANDLORD’S DEFAULT.

       

      It
        shall
        be a “Landlord’s Default” if Landlord violates or fails to perform any of the
        covenants or agreements herein made by Landlord, and such violation or failure
        shall continue for thirty (30) days after written notice thereof to Tenant
        by
        Landlord, except that if within the thirty (30) day period Landlord commences
        and thereafter proceeds diligently to remedy the violation or failure within
        a
        reasonable period not to exceed one hundred twenty (120) days from the receipt
        of the notice, then Landlord shall not be in default hereunder. Landlord’s
        attempt to cure the default shall not affect Tenant’s right to have Rent abated
        pursuant to the terms of this Lease.

       

      PARAGRAPH
        29: REMEDIES OF TENANT.

       

      If
        Landlord has not cured a Landlord’s Default within the applicable notice and/or
        grace periods and if such uncured Landlord’s Default substantially interferes
        with the operations of Tenant’s business and use of the Leased Premises then, in
        such event, Tenant shall have the right to either (i) terminate this Lease;
        provided, however, Tenant shall, before exercising its right to terminate
        this
        Lease, give Landlord ten (10) days prior notice of such termination and give
        the
        same notice to any mortgagee of the Building for which Tenant has received
        written notice of mortgagee’s name and address or (ii) cure Landlord’s default.
        Any mortgagee receiving notice of Tenant’s intent to terminate shall have the
        same right to cure as Landlord, but not the obligation. If Tenant exercises
        its
        right to cure Landlord’s default in accordance with this Paragraph 29, Tenant
        shall comply with all building codes and other appropriate governmental
        regulations, shall use fully qualified contractors and shall conform to the
        standards of the Building. If Tenant at any time pays any sum because of
        Landlord’s Default, such sum shall be reimbursed to Tenant from Landlord upon
        written demand, with interest at the amount charged to Tenant for late payment
        of Rent pursuant to Paragraph 5.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          30: SURRENDER OF LEASED PREMISES.

         

      

      Upon
        the
        Lease Expiration Date or other termination of this Lease, Tenant shall surrender
        the Leased Premises to Landlord in accordance with Paragraph 10.B. and in
        the
        same condition as provided to Tenant on the Lease Commencement Date, normal
        wear
        and tear and damage by fire or other insured casualty excepted. The obligations
        of Tenant under this Paragraph 30 shall survive the expiration and/or earlier
        termination of this Lease. 

       

      PARAGRAPH
        31: SEVERABILITY.

       

      The
        parties intend this Lease to be legally valid and enforceable in accordance
        with
        all of its terms to the fullest extent permitted by law. If any term hereof
        shall be invalid or unenforceable, the parties agree that such term shall
        be
        stricken from this Lease to the extent unenforceable the same as if it never
        had
        been contained herein. Such invalidity or unenforceability shall not extend
        to
        any other term of this Lease, and the remaining terms hereof shall continue
        in
        effect to the fullest extent permitted by law.

       

      PARAGRAPH
        32: WAIVER.

       

      The
        waiver of either party hereto of any breach of any term, covenant or condition
        herein contained shall not be deemed to be a waiver of any subsequent breach
        of
        the same or any other term, covenant or condition herein contained. The
        subsequent acceptance of Rent hereunder by Landlord shall not be deemed to
        be a
        waiver of any preceding breach by Tenant of any term, covenant or condition
        of
        this Lease, other than the failure of Tenant to pay the particular rental
        so
        accepted, regardless of Landlord’s knowledge of such preceding breach at the
        time of acceptance of such Rent. The subsequent payment of Rent hereunder
        by
        Tenant shall not be deemed to be a waiver of any preceding breach by Landlord
        of
        any term, covenant or condition of this Lease, regardless of Tenant’s knowledge
        of such preceding breach at the time of payment of such Rent. No covenant,
        term
        or condition of this Lease shall be deemed to have been waived by either
        party,
        unless such waiver is acknowledged in writing by such party.

       

      PARAGRAPH
        33: ESTOPPEL.

       

      Tenant
        shall, within ten (10) days after written request from Landlord, execute
        and
        deliver to Landlord a written statement certifying that: (a) the Lease is
        unmodified and in full force and effect, or that the Lease is in full force
        and
        effect as modified and listing the instruments of modification; (b) the dates
        to
        which the Rent, Additional Rent and other charges have been paid; (c) to
        the
        best of Tenant’s knowledge, whether or not Landlord is in default hereunder and,
        if so, specifying the nature of the default; and (d) such other factual matters
        as may be reasonably requested by Landlord.

       

      PARAGRAPH
        34: SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE.

       

      Tenant
        covenants and agrees that this Lease is subject and subordinate to any mortgage
        or deed of trust which may now or hereafter encumber the Leased Premises,
        the
        Building or the Project, and to all renewals, modifications, consolidations,
        replacements and extensions thereof. Notwithstanding the above, such
        subordination shall not be effective until Landlord obtains a Subordination,
        Non-Disturbance and Attornment Agreement in substantially the form attached
        hereto as Exhibit
        D
        and made
        a part hereof from its mortgagee and any future mortgagees. In the event
        of the
        enforcement by the mortgagee under any such mortgage of the remedies provided
        for by law or by such mortgage, Tenant will become the Tenant of, and attorn
        to,
        such successor in interest without change in the terms or other provisions
        of
        this Lease. If Landlord does not obtain a Subordination, Non-Disturbance
        and
        Attornment Agreement from its current mortgagee within fourteen (14) days
        of
        this Lease, Tenant shall have the right to terminate this Lease.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        35: QUIET
        ENJOYMENT.

       

      If
        and so
        long as Tenant pays all Rent and keeps and performs each and every term,
        covenant and condition herein contained on the part of Tenant to be kept
        and
        performed, Tenant shall quietly enjoy the Leased Premises without hindrance
        by
        Landlord.

       

      PARAGRAPH
        36: ATTORNEYS’ FEES.

       

      If
        the
        services of an attorney are required by any party to secure the performance
        under the Lease or otherwise upon the breach or default of the other party
        to
        the Lease, each party shall be responsible for its own legal fees. If a judicial
        remedy is necessary to enforce or interpret any provision of the Lease, the
        prevailing party shall be entitled to reasonable attorneys’ fees, costs and
        other expenses, in addition to any other relief to which such prevailing
        party
        may be entitled.

       

      PARAGRAPH
        37: FORCE MAJEURE.

       

      Except
        for Paragraphs 5 and 6 hereof, if either party hereto shall be delayed or
        hindered in or prevented from the performance of any act required hereunder
        by
        reason of strikes, lockouts, labor troubles, inability to procure materials,
        failure of power, restrictive governmental laws or regulations, riots,
        insurrection, war or other reason of a like nature beyond the reasonable
        control
        of the party delayed in performing work or doing acts required under the
        terms
        of this Lease, then performance of such act shall be excused for the period
        of
        the delay and the period for the performance of such act shall be extended
        for a
        period equivalent to the period of such delay.

       

      PARAGRAPH
        38: APPLICABLE LAW.

       

      This
        Lease shall be construed according to the laws of the State of New
        York.

       

      PARAGRAPH
        39: BINDING EFFECT; GENDER.

       

      This
        Lease shall be binding upon and inure to the benefit of the parties and their
        successors and assigns. It is understood and agreed that the terms “Landlord”
        and “Tenant” and verbs and pronouns in the singular number are uniformly used
        throughout this Lease regardless of gender, number or fact of incorporation
        of
        the parties hereto.

       

      PARAGRAPH
        40: TIME.

       

      Time
        is
        of the essence of this Lease.

       

      PARAGRAPH
        41: WAIVER OF JURY TRIAL.

       

      Landlord
        and Tenant each hereby waives all right to trial by jury in any claim, action,
        proceeding or counterclaim by either party against the other on any matters
        arising out of or in any way connected with this Lease, the relationship
        of
        Landlord and Tenant and/or Tenant’s use or occupancy of the Leased
        Premises.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      
        PARAGRAPH
          42: HEADINGS.

         

      

      The
        headings in this Lease are included for convenience only and shall not be
        taken
        into consideration in any construction or interpretation of this Lease or
        any of
        its provisions.

       

      PARAGRAPH
        43: BROKERS.

       

      Landlord
        and Tenant each represent to the other that each has not had any dealing
        with
        any broker, agent or finder in connection with this Lease except as set forth
        in
        Paragraph 1(N), whose compensation shall be paid by Landlord pursuant to
        separate written agreement, and Landlord and Tenant each agrees to hold the
        other harmless from and indemnify the other against any cost, expense, or
        liability for any compensation, commission, fee charge or damages, including
        reasonable attorneys’ fees, as a result of any claim of any other broker, agent
        or finder claiming under or through the indemnifying party with respect to
        this
        Lease or the negotiation of this Lease.

       

      PARAGRAPH
        44: ENTIRE AGREEMENT.

       

      This
        Lease sets forth all the covenants, promises, agreements, representations,
        conditions, statements and understandings between Landlord and Tenant concerning
        the Leased Premises and the Building and the Project. This Lease shall not
        be
        amended or codified except in writing signed by both parties. Failure to
        exercise any right in one or more instances shall not be construed as a waiver
        of the right to strict performance or as an amendment to this
        Lease.

       

      PARAGRAPH
        45: NOTICES.

       

      Any
        notice or demand provided for or given pursuant to this Lease shall be in
        writing and served on the parties at the addresses listed in Paragraph 1(O)
        and
        Paragraph 1(P). Any notice shall be either: (a) personally delivered to the
        addressed set forth above, in which case it shall be deemed delivered on
        the
        date of delivery to the addressee; (b) sent by registered or certified
        mail/return receipt requested, in which case it shall be deemed delivered
        three
        (3) business days after deposited in the U.S. Mail; or (c) sent by a nationally
        recognized overnight courier, in which case it shall be deemed delivered
        one (1)
        business day after delivered to the nationally recognized overnight courier.
        The
        addresses listed in Paragraphs 1(O) and l(P) may be changed by written notice
        to
        the other parties; provided, however, that no notice of a change of address
        shall be effective until date of delivery of such notice. Copies of notice
        are
        for informational purposes only and a failure to give or receive copies of
        any
        notice shall not be deemed a failure to give notice.

       

      PARAGRAPH
        46: WAIVER OF REDEMPTION.

       

      Tenant
        hereby expressly waives any and all rights of redemption granted by or under
        any
        present or future laws, including, but not limited to Section 761 of the
        New
        York Real Property Law, in the event of Tenant being dispossessed or removed
        from the Leased Premises because of any default by Tenant in the performance
        of
        the covenants or agreements contained in this Lease. Tenant, on behalf of
        all
        persons claiming by, through or under Tenant, including, but not limited
        to, the
        executors, administrators, assignees, judgment creditors and leasehold
        mortgagees of Tenant, hereby waives all rights which such persons might
        otherwise have under any applicable law including, but not limited to Section
        763 of the New York Real Property Law.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        47: PARKING.

       

      Landlord
        shall provide to Tenant and Tenant’s visitors, at no cost to Tenant, no fewer
        than 4.0 spaces per 1,000 square feet available for use in common with the
        other
        tenants of the Building and their visitors. None of these parking spaces
        shall
        be reserved for the exclusive use of any particular tenant of the Building.
        Landlord shall take all such measures as are reasonably within its control
        to
        assure that Tenant will, subject only to non-recurring usage peaks or
        circumstances, enjoy the use of parking spaces proportionate to the space
        which
        it occupies in the Building.

       

      PARAGRAPH
        48: EXHIBITS.

       

      The
        exhibit(s) listed below are attached and incorporated into this Lease by
        reference. The terms of schedules, exhibits, and typewritten addenda, if
        any,
        attached to this Lease shall control over any inconsistent provision in this
        Lease.

       

      Exhibits:

       

      A.    Schematic
        Floor Plan

       

      B.    Intentionally
        Deleted

       

      C.    Rules
        and
        Regulations 

       

      D.    Subordination,
        Non-Disturbance and Attornment Agreement

       

      E.    Lease
        Commencement Date Agreement

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      PARAGRAPH
        49: ADA.

       

      Landlord
        warrants and represents that as of the Lease Commencement Date, the Building
        is
        in compliance with The Americans with Disabilities Act (“ADA”) and all state and
        local laws and ordinances regarding handicapped and disabled citizens, and
        all
        amendments, supplements and regulations promulgated thereunder. Tenant is
        responsible for ADA compliance with respect to Tenant’s Work and arising from
        its own business operations.

       

      
        	
                LANDLORD:

                 

                350
                  LINDEN OAKS, L.P.

              	 	
                TENANT:

                 

                VIRTUALSCOPICS

              
	 	 	 
	By: 	
                Linden
                  Oaks Management Company, Inc., 
Member

              	 	 	 
	 	 	 	 	 
	By: 	s/o Mark
                R. Gianniny	 	By:
                	s/o
                Edward Schreyer
	 	
                
Mark
                R. Gianniny, President 	 	 	
                

              
	 	 	 	 	 
	DATE EXECUTED: October
                18, 2005	 	DATE EXECUTED: October
                17, 2005

      

       

       

      

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      Exhibit
        A

      

      SCHEMATIC
        FLOOR PLAN

      

      

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      Exhibit
        B

      

      INTENTIONALLY
        DELETED

      

      

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      Exhibit
        C

      RULES
        AND REGULATIONS

      
        

          
            
              	
                      1.

                    	
                      The
                        sidewalks, entrances, passages, courts, elevators, vestibules,
                        stairways,
                        corridors or halls shall not be obstructed or encumbered
                        by any Tenant or
                        used for any purpose other than ingress and egress to and
                        from the demised
                        premises.

                    
	 	 
	
                      2.

                    	
                      No
                        awnings or other projections shall be attached to the outside
                        walls of the
                        building without the prior written consent of the Landlord.
                        No curtains,
                        blinds, shades, or screens shall be attached to or hung in,
                        or used in
                        connection with, any window or door of the demised premises,
                        without the
                        prior written consent of the Landlord. Such awnings, projections,
                        curtains, blinds, shades, screens or other fixtures must
                        be of a quality,
                        type, design and color, and attached in the manner approved
                        by
                        Landlord.

                    
	 	 
	
                      3.

                    	
                      No
                        sign, advertisement, notice or other lettering shall be exhibited,
                        inscribed, painted or affixed by any Tenant on any part of
                        the outside or
                        inside of the demised premises or building without the prior
                        written
                        consent of the Landlord, which consent shall not be unreasonably
                        withheld.
                        In the event of the violation of the foregoing by any Tenant,
                        Landlord may
                        remove same without any liability, and may charge the expense
                        incurred by
                        such removal to the Tenant or Tenants violating this rule.
                        Interior signs
                        on doors and directory tablet shall be inscribed, painted
                        or affixed for
                        each Tenant by the Landlord at the expense of such Tenant,
                        and shall be of
                        a size, color and style acceptable to the Landlord except
                        with the prior
                        written consent of the Landlord, which consent shall not
                        be unreasonably
                        withheld.

                    
	 	 
	
                      4.

                    	
                      The
                        sashes, sash doors, skylights, windows, and doors that reflect
                        or admit
                        light and air into the halls, passageways or other public
                        places in the
                        building shall not be covered or obstructed by any Tenant,
                        nor shall any
                        bottles, parcels, or other articles be placed on the
                        windowsills.

                    
	 	 
	
                      5.

                    	
                      No
                        show cases or other articles shall be put in front of or
                        affixed to any
                        part of the exterior of the building, nor placed in the halls,
                        corridors
                        or vestibules without the prior written consent of the
                        Landlord.

                    
	 	 
	
                      6.

                    	
                      The
                        water and wash closets and other plumbing fixtures shall
                        not be used for
                        any purposes other than those for which they were constructed,
                        and no
                        sweepings, rubbish, rags or other substances shall be thrown
                        therein. All
                        damage resulting from any misuse of the fixtures shall be
                        borne by the
                        Tenant who, or whose servants, employees, agents, visitors
                        or licensees,
                        shall have caused the same.

                    
	 	 
	
                      7.

                    	
                      No
                        Tenant shall mark, paint, drill into, or in any way deface
                        any part of the
                        demised premises or the building of which they form a part.
                        No boring,
                        cutting or stringing of wires shall be permitted, except
                        with the prior
                        written consent of the Landlord, and as the Landlord may
                        direct. No Tenant
                        shall lay linoleum, or other similar floor covering, so that
                        the same
                        shall come in direct contact with the floor of the demised
                        premises, and
                        if linoleum or other similar floor covering is desired to
                        be used, an
                        interlining of builder’s deadening felt shall be first affixed to the
                        floor by a paste or other material, soluble in water, the
                        use of cement or
                        other similar adhesive material being expressly prohibited
                        except with the
                        prior written consent of the
                        Landlord.

                    

            

             

            
              
                
                

              

              
                C-1

                
                  

                

              

              
                
                

              

            

             

            
              
                	
                        8.

                      	
                        No
                          bicycles, vehicles or animals of any kind shall be brought
                          into or kept in
                          or about the premises; however, Tenant shall be permitted
                          to use, in
                          common with other tenants of the Building, a bike rack
                          to be installed and
                          maintained by Landlord. No Tenant shall cause or permit
                          any unusual or
                          objectionable odors to be produced upon or permeate from
                          the demised
                          premises.

                      
	 	 
	
                        9.

                      	
                        No
                          space in the building shall be used for manufacturing,
                          for the storage of
                          merchandise, or for the sale of merchandise, goods, or
                          property of any
                          kind at auction; provided, however, such prohibition shall
                          not extend to
                          medically related items sold or dispenses in conjunction
                          with Tenant’s use
                          of the Leased Premises for medical offices.

                      
	 	 
	
                        10.

                      	
                        No
                          Tenant shall make, or permit to be made, any unseemly or
                          disturbing noises
                          or disturb or interfere with occupants of this or neighboring
                          buildings or
                          premises or those having business with them whether by
                          the use of any
                          musical instrument, radio, talking machine, unmusical noise,
                          whistling,
                          singing, or in any other way. No Tenant shall throw anything
                          out of the
                          doors, windows or skylights or down the passageways.

                      
	 	 
	
                        11.

                      	
                        No
                          Tenant, nor any of the Tenant’s servants, employees, agents, visitors or
                          licensees, shall at any time bring or keep upon the demised
                          premises any
                          flammable, combustible or explosive fluid, chemical or
                          substance except in
                          accordance with and in quantities permitted by applicable
                          law.

                      
	 	 
	
                        12.

                      	
                        No
                          additional locks or bolts of any kind shall be placed upon
                          any of the
                          doors or windows by any Tenant, nor shall any changes be
                          made in existing
                          locks or the mechanism thereof. Each Tenant must, upon
                          the termination of
                          his tenancy, restore to the Landlord all keys of stores,
                          offices and
                          toilet rooms, either furnished to, or otherwise procured
                          by, such Tenant,
                          and in the event of the loss of any keys, so furnished,
                          such Tenant shall
                          pay to the Landlord the cost thereof.

                      
	 	 
	
                        13.

                      	
                        All
                          removals, or the carrying in or out of any safes, freight,
                          furniture or
                          bulky matter of any description must take place during
                          the hours which the
                          Landlord or its Agent may determine from time to time.
                          The Landlord
                          reserves the right to inspect all freight to be brought
                          into the building
                          and to exclude from the building all freight which violates
                          any of these
                          Rules and Regulations or the Lease of which these Rules
                          and Regulations
                          are a part. Tenant must list all furniture and fixtures
                          to be taken from
                          the building upon a blank furnished by the Tenant. Such
                          list shall be
                          presented at the office of the building for approval.

                      
	 	 
	
                        14.

                      	
                        No
                          Tenant shall occupy or permit any portion of the premises
                          demised to him
                          to be occupied as an office for a public
                          stenographer.

                      

              

               

              
                
                  
                  

                

                
                  C-2

                  
                    

                  

                

                
                  
                  

                

              

               

              
                	
                        15.

                      	
                        No
                          Tenant shall occupy or permit any portion of the premises
                          demised to him
                          to be occupied for the possession, storage, manufacture
                          or sale of liquor,
                          narcotics (except in accordance with and in quantities
                          permitted by
                          applicable law) and within the scope of Tenant’s medical practice, dope,
                          tobacco in any form, or as a barber or manicure shop, or
                          as an employment
                          bureau.

                      
	 	 
	
                        16.

                      	
                        Intentionally
                          omitted.

                      
	 	 
	
                        17.

                      	
                        No
                          Tenant shall purchase within the Project, Building or Leased
                          Premises,
                          milk, soft drinks, ice, towels, or other like service from
                          any vending
                          machines, company or persons not approved by the
                          Landlord.

                      
	 	 
	
                        18.

                      	
                        Landlord
                          shall have the right to prohibit any advertising by any
                          Tenant which, in
                          Landlord’s opinion, tends to impair the reputation of the building
                          or its
                          desirability as a building for offices, and upon written
                          notice from
                          Landlord, Tenant shall refrain from or discontinue such
                          advertising.

                      
	 	 
	
                        19.

                      	
                        Tenant
                          shall keep all windows tightly closed at all times.

                      
	 	 
	
                        20.

                      	
                        The
                          premises shall not be used for lodging or sleeping or for
                          any immoral or
                          illegal purpose.

                      
	 	 
	
                        21.

                      	
                        The
                          requirements of Tenants will be attended to only upon application
                          at the
                          office of the building. Employees of the Landlord shall
                          not perform any
                          work or do anything outside of their regular duties, unless
                          under special
                          instructions from the office of the Landlord.

                      
	 	 
	
                        22.

                      	
                        Canvassing,
                          soliciting and peddling in the building is prohibited and
                          each Tenant
                          shall cooperate to prevent the same.

                      
	 	 
	
                        23.

                      	
                        There
                          shall not be used in any space, or in the public halls
                          of any building,
                          either by any Tenant or by jobbers or others, in the delivery
                          or receipt
                          of merchandise, any hand trucks, except those equipped
                          with soft tires and
                          side guards.

                      
	 	 
	
                        24.

                      	
                        If
                          the Tenant desires Venetian blinds, they will be furnished
                          and installed
                          by the Landlord at the expense of the Tenant, and must
                          be of such type,
                          color, material and make as may be prescribed by the
                          Landlord.

                      
	 	 
	
                        25.

                      	
                        The
                          installation and use of a vending machine in the building
                          is prohibited
                          without the Landlord’s consent in writing.

                      
	 	 
	
                        26.

                      	
                        Parking
                          areas provided by Landlord for deliveries by vendors and
                          suppliers to
                          Tenant shall be under the sole and absolute control of
                          Landlord.

                      

              

            

          

        

      

      
        
          
          

        

        
          C-3

          
            

          

        

        
          
          

        

      

      Exhibit
        D

      

      SUBORDINATION,
        NON-DISTURBANCE AND ATTORNMENT AGREEMENT

      

      THIS
        AGREEMENT
        made as
        of the _____ day of ____________, 2003 between M & T REAL ESTATE, INC., a
        corporation duly organized and existing under the laws of the State of New
        York,
        having a place of business at 255 East Avenue, Rochester, NY 14604,
        (“Mortgagee”) and VIRTUALSCOPICS,
        a New
        York limited liability company organized under the laws of the State of New
        York, having an office at ________________________ (collectively
“Tenant”).

      

      W
        I T N E S S E T H:

      

      WHEREAS,
        Mortgagee is the owner and holder of a first mortgage made by 350 LINDEN
        OAKS,
        L.P., a limited partnership duly organized and existing under the laws of
        the
        State of New York (“Landlord”) to Mortgagee (“Mortgage”) covering premises known
        as 350 Linden Oaks, Town of Pittsford, County of Monroe, State of New York
        (“Mortgaged Premises”) more particularly described on Schedule
        A
        annexed
        hereto and made a part hereof; and

      

      WHEREAS,
        Tenant
        is tenant under a lease from Landlord last dated ____________ (“Lease”) covering
        space in an office building (“Demised Premises”) constructed on the Mortgaged
        Premises; and

      

      WHEREAS,
        Mortgagee and Tenant desire to confirm their understanding with respect to
        the
        Mortgage and Lease.

      

      NOW,
        THEREFORE,
        in
        consideration of the mutual covenants and agreements herein contained, Mortgagee
        and Tenant hereby agree and covenant:

      

      FIRST:
        So
        long as Tenant is not in default (beyond any period given Tenant to cure
        such
        default) in the payment of rent or additional rent or in the performance
        of any
        of the terms, covenants or conditions of the Lease on Tenant’s part to be
        performed, Mortgagee will not join Tenant as a party defendant in any action
        or
        proceeding for the purpose of terminating Tenant’s interest and estate under the
        Lease because of any default under the Mortgage.

      

      SECOND:
        So long as Tenant is not in default (beyond any period given Tenant to cure
        such
        default) in the payment of rent or additional rent or in the performance
        of any
        of the terms, covenants or conditions of the Lease on Tenant’s part to be
        performed, Tenant’s possession of the Demised Premises and Tenant’s rights,
        privileges, options and immunities under the Lease or any extensions or renewals
        thereof which may be effected in accordance with any option thereof in the
        Lease
        shall not be diminished or interfered with by Mortgagee, and Tenant’s occupancy
        of the Demised Premises shall not be disturbed by Mortgagee for any reason
        whatsoever during the term of the Lease or any such extension or renewals
        thereof.

      

      THIRD:
        If
        the interest of Landlord in the Mortgaged Premises shall be transferred to
        and
        owned by Mortgagee or any other person or entity (such transferee being
        hereinafter referred to as the “Successor Landlord”) by reason of foreclosure or
        other proceedings or by any other manner, then Tenant shall be bound to the
        Successor Landlord under all the terms, covenants and conditions of the Lease
        for the balance of the term thereof remaining and any extensions or renewals
        thereof which may be effected in accordance with any option therefor with
        the
        same force and effect as if the Successor Landlord were the Landlord under
        the
        Lease and Tenant does hereby attorn to the Successor Landlord, such attornment
        to be effective and self-operative without the execution of any further
        instruments on the part of any of the parties immediately upon such transfer
        of
        title; provided, however, that Tenant receives written notice from such party
        claiming to be Successor Landlord that it has succeeded to the interest of
        the
        Landlord under the Lease and giving such proof as may be reasonably required
        to
        protect Tenant in treating such party as Successor Landlord. The respective
        rights and obligations of the Tenant and Successor Landlord upon such attornment
        (to the extent of the then remaining balance of the term of the Lease and
        any
        such extensions and renewals) shall be and are the same as now set forth
        therein; it being the intention of the parties hereto for this purpose to
        incorporate the Lease in this Agreement by reference with the same force
        and
        effect as if set forth at length herein.

      
        
          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

      FOURTH:
        Any Successor Landlord shall be bound to Tenant under all the terms, covenants
        and conditions of the Lease, and Tenant shall, from and after such succession
        to
        the interest of the Landlord under the Lease, have the same remedies against
        Successor Landlord for the breach of agreement contained in the Lease that
        Tenant might have under the Lease against the Landlord; provided, further,
        however, that Successor Landlord shall not be:

      

      (a)
        liable for any act or omission of any prior landlord; or

      

      (b)
        subject to any offsets or defenses which Tenant might have against any prior
        landlord; or

      

      (c)
        bound
        by any rent or additional rent which Tenant might have paid for more than
        the
        current month to any prior landlord; or

      

      (d)
        bound
        by an amendment or modification of the Lease made without its
        consent.

      

      FIFTH:
        The Lease now is, and shall at all times continue to be, subject and subordinate
        to the Mortgage, and to any advance which may be made from time to time
        thereunder and to any and all renewals, modifications, extensions,
        substitutions, replacements and/or consolidations of the Mortgage, but any
        and
        all such renewals, modifications, extensions, substitutions, replacements
        and/or
        consolidations, or any such other mortgage or mortgages, shall nevertheless
        be
        subject to and entitled to the benefits of the terms of this
        Agreement.

      

      SIXTH:
        To
        the extent that the Lease or Mortgage shall entitle the Tenant to notice
        of any
        mortgage or Mortgagee to notice of any lease, this Agreement shall constitute
        such notice.

      

      SEVENTH:
        This Agreement may not be modified orally or in any other manner than by
        an
        agreement in writing signed by the parties hereto or their respective successors
        in interest. This Agreement shall inure to the benefit of and be binding
        upon
        the parties hereto and their respective successors in interest.

       

      
        
          
          

        

        
          D-2

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have hereunto caused this Agreement to be duly executed as
        of the
        day and year first above written.

      

      Mortgagee:

      

      M
        & T REAL ESTATE, INC.

       

      By: 
        ________________________________

      Name:

      Title:

      

      Tenant:

      

      VIRTUALSCOPICS

       

      By: 
        ________________________________

      Name:

      Title:

      

      STATE
        OF
        NEW YORK   )

      COUNTY
        OF
        MONROE   )    ss.:

      

      On
        the
        ____ day of ___________, in the year ____, before me, the undersigned, a
        Notary
        Public in and for said State, personally appeared ____________________________,
        personally known to me or proved to me on the basis of satisfactory evidence
        to
        be the individual whose name is subscribed to the within instrument and
        acknowledged to me that he/she executed the same in his/her capacity, and
        that
        by his/her signature on the instrument, the individual, or the person upon
        behalf of which the individual acted, executed the instrument.

      

      ______________________________

      Notary
        Public

      

      

      

      STATE
        OF
        NEW YORK   )

      COUNTY
        OF
        MONROE   )    ss.:

      

      On
        the
        ____ day of ___________, in the year ____, before me, the undersigned, a
        Notary
        Public in and for said State, personally appeared ____________________________,
        personally known to me or proved to me on the basis of satisfactory evidence
        to
        be the individual whose name is subscribed to the within instrument and
        acknowledged to me that he/she executed the same in his/her capacity, and
        that
        by his/her signature on the instrument, the individual, or the person upon
        behalf of which the individual acted, executed the instrument.

      

      ______________________________

      Notary
        Public

      

      
        
          
          

        

        
          D-3

          
            

          

        

        
          
          

        

      

      Exhibit
        E

      

      LEASE
        COMMENCEMENT DATE AGREEMENT

      

      THIS
        AGREEMENT
        made
        this _____ day of _____________, by and between 350 LINDEN OAKS, L.P., a
        New
        York limited partnership, with offices at 400 Linden Oaks, Rochester, New
        York
        14625 (“Landlord”), and VIRTUALSCOPICS,
        a
        corporation, with offices at 360 Linden Oaks, Rochester, NY 14625
        (“Tenant”).

      

      W
        I T N E S S E T H:

      

      WHEREAS,
        Landlord and Tenant entered into a Lease dated as of _______________, (“Lease”)
        which set forth the terms of occupancy by Tenant for premises located at
        350
        Linden Oaks, Town of Pittsford, County of Monroe, New York
        (“Premises”).

      

      WHEREAS,
        it has
        been determined in accordance with the provisions of Paragraph 1 (E) of the
        Lease that _______ 1, 2003 is the Lease Commencement Date of the initial
        term of
        this Lease.

      

      NOW,
        THEREFORE,
        in
        order to provide a record of certain events since the execution of said Lease,
        it is agreed and confirmed:

      

      1.
        The
        Lease is in full force and effect.

      

      2.
        The
        Lease Commencement Date of the term of the Lease is _________, 2003 and the
        expiration date of the initial term of the Lease is _________________,
        2004.

      

      3.
        In
        accordance with Paragraph l(D) of the Lease, the rentable square footage
        of the
        Premises is 12,258 square feet as of the day and year first above
        written.

      

      4.
        Tenant
        has complied fully and completely with all requirements, conditions,
        representations, warranties, covenants, agreements and obligations under
        the
        Lease to the date hereof including without limitation construction of all
        improvements constructed by Tenant.

      

      5.
        Landlord has complied fully and completely with all requirements, conditions,
        representations, warranties, covenants, agreements and obligations under
        the
        Lease to the date hereof.

      

      IN
        WITNESS WHEREOF,
        the
        Parties hereto have duly executed this instrument.

       

      
        	350 LINDEN OAKS, L.P.	 	 	VIRTUALSCOPICS
	 	 	 	 
	 	 	 	 
	By:
                _______________________________	 	 	By:
                _______________________________
	 	 	 	 
	Its:
                _______________________________	 	 	Its:
                _______________________________

      

      
        
          
          

        

        
          E-1

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