Document:

<PAGE>
                                                                EXHIBIT 10.1

                                      LEASE

                          OF PREMISES AT 3 FORBES ROAD,

                            LEXINGTON, MASSACHUSETTS

                                      FROM

                             BHX, LLC, AS TRUSTEE OF
                              3 FORBES REALTY TRUST

                                       TO

                                ANTIGENICS, INC.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>                                                                                                      <C>
SUMMARY OF BASIC TERMS...............................................................................    iii
ARTICLE I............................................................................................     1
ARTICLE II...........................................................................................     6
         Section 2.1    Lease Of The Premises........................................................     6
         Section 2.2    Common Rights................................................................     7
         Section 2.3    Parking......................................................................     7
         Section 2.4    Commencement Date; Lease Term; Rights to Extend..............................     8
         Section 2.5    Security Deposit.............................................................     8
         Section 2.6    Measurement..................................................................     9
         Section 2.7    Lease Amendment..............................................................     10
ARTICLE III..........................................................................................     10
         Section 3.1    Base Building Work...........................................................     10
         Section 3.2    Amenities Work...............................................................     10
         Section 3.3    Tenant's Work; Pre-Term Occupancy............................................     11
         Section 3.4    Signs........................................................................     12
ARTICLE IV...........................................................................................     13
         Section 4.1    Base Rent....................................................................     13
         Section 4.2    Additional Rent..............................................................     13
         Section 4.3    Net Lease....................................................................     13
         Section 4.4    Taxes........................................................................     14
         Section 4.5    Insurance Costs..............................................................     14
         Section 4.6    Operating Costs..............................................................     14
         Section 4.7    Payment for Electricity......................................................     15
         Section 4.8    Tenant's Audit Rights........................................................     15
ARTICLE V............................................................................................     16
         Section 5.1    Permitted Use................................................................     16
         Section 5.2    Restrictions on Use..........................................................     16
         Section 5.3    Hazardous Materials..........................................................     16
ARTICLE VI...........................................................................................     16
         Section 6.1    Landlord's Services..........................................................     16
         Section 6.2    Tenant's Rights Regarding Services...........................................     17
         Section 6.3    Extraordinary Use............................................................     17
         Section 6.4    Interruption; Delay..........................................................     18
         Section 6.5    Additional Services..........................................................     18
         Section 6.6    Remediation of Hazardous Materials...........................................     18
ARTICLE VII..........................................................................................     19
         Section 7.1    Rent.........................................................................     19
         Section 7.2    Utilities; Waste Removal.....................................................     19
         Section 7.3    No Waste.....................................................................     19
         Section 7.4    Maintenance; Repairs; and Yield-Up...........................................     19
         Section 7.5    Alterations by Tenant........................................................     20
         Section 7.6    Trade Fixtures and Equipment.................................................     20
         Section 7.7    Compliance with Laws.........................................................     20
         Section 7.8    Contents at Tenant's Risk....................................................     20
         Section 7.9    Exoneration; Indemnification and Insurance...................................     21
         Section 7.10   Landlord's Access............................................................     22
         Section 7.11   No Liens.....................................................................     22
ARTICLE VIII.........................................................................................     22
         Section 8.1    Subletting and Assignment....................................................     22
ARTICLE IX...........................................................................................     24
         Section 9.1    Subordination to Mortgages and Ground Leases.................................     24
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                       <C>
         Section 9.2    Lease Superior at Mortgagee's or Ground Lessor's Election....................     24
         Section 9.3    Limitations on Obligations of Mortgagees, Ground Lessors and Successors......     24
         Section 9.4    Estoppel Certificates........................................................     25
ARTICLE X............................................................................................     25
         Section 10.1   Damage From Casualty.........................................................     25
         Section 10.2   Abatement of Rent............................................................     26
         Section 10.3   Termination..................................................................     26
ARTICLE XI...........................................................................................     26
         Section 11.1   Eminent Domain; Right to Terminate and Abatement in Rent.....................     26
         Section 11.2   Restoration..................................................................     26
         Section 11.3   Proceeds.....................................................................     26
ARTICLE XII..........................................................................................     27
         Section 12.1   Event of Default.............................................................     27
         Section 12.2   Landlord's Remedies..........................................................     27
         Section 12.3   Reimbursement of Landlord....................................................     28
         Section 12.4   Landlord's Right to Perform Tenant's Covenants...............................     28
         Section 12.5   Cumulative Remedies..........................................................     28
         Section 12.6   Expenses of Enforcement......................................................     29
         Section 12.7   Landlord's Default...........................................................     29
         Section 12.8   Limitation of Liability......................................................     29
         Section 12.9   Late Payment and Administrative Expense......................................     30
ARTICLE XIII.........................................................................................     30
         Section 13.1   Brokers......................................................................     30
         Section 13.2   Quiet Enjoyment..............................................................     30
         Section 13.3   Notices......................................................................     30
         Section 13.4   Waiver of Subrogation........................................................     30
         Section 13.5   Entire Agreement; Execution; Time of the Essence and Headings
                        and Table of Contents........................................................     30
         Section 13.6   Partial Invalidity...........................................................     31
         Section 13.7   No Waiver....................................................................     31
         Section 13.8   Holdover.....................................................................     31
         Section 13.9   When Lease Becomes Binding...................................................     31
         Section 13.10  No Recordation...............................................................     32
         Section 13.11  As Is........................................................................     32
         Section 13.12  Tenant's Financial Statements; Certain Representations
                        and Warranties of Tenant.....................................................     32
         Section 13.13  Summary of Basic Terms.......................................................     32
         Section 13.14  Landlord Waivers.............................................................     32
ARTICLE XIV..........................................................................................     32
         Section 14.1   Arbitrable Matters...........................................................     32
         Section 14.2   Arbitration..................................................................     33
</TABLE>

Exhibits:
A - Property Description
B - Site Plan
C - Building Floor Plans
D - Base Building Work
E - Tenant's Work
F - Form of Letter of Credit
G - INTENTIONALLY OMITTED
H - Subordination, Non-Disturbance and Attornment Agreement
I - Clerk's Certificate

                                     -ii-

<PAGE>

                             SUMMARY OF BASIC TERMS

                                      LEASE

                          OF PREMISES AT 3 FORBES ROAD,
                            LEXINGTON, MASSACHUSETTS

                                       TO

                                ANTIGENICS, INC.

                          DATED AS OF DECEMBER 6, 2002

================================================================================

         The following is a summary of certain basic terms of this Lease which
is intended for the convenience and reference of the parties. Capitalized terms
used, but not defined, in this Summary of Basic Terms, have their defined
meanings in this Lease. In addition, some of the following items or terms are
incorporated into this Lease by reference to the item or term or to this
"Summary of Basic Terms".

1.       Landlord: BHX, LLC, a Massachusetts limited liability company, as
         Trustee of 3 Forbes Realty Trust, a Massachusetts nominee trust.

2.       Tenant: Antigenics, Inc., a Delaware corporation.

3A.      Premises: Initially, a portion of the first floor and a portion of the
         second floor of the Building, designated as "Original Premises" on the
         Building Floor Plans (the "Original Premises"). Additional space on the
         second floor of the Building, designated as "First Additional Premises"
         on the Building Floor Plans (the "First Additional Premises"), to be
         added as of the First Expansion Date. Additional space on the first
         floor of the Building, designated as "Second Additional Premises" on
         the Building Floor Plans (the "Second Additional Premises"), to be
         added as of the Second Expansion Delivery Date. The Original Premises,
         the First Additional Premises and the Second Additional Premises
         together constitute all of the leasable space in the Building.

3B.      Landlord's Property: The Land with the Building and any other
         improvements now or hereafter thereon, now commonly known as 3 Forbes
         Road, Lexington, Massachusetts, as described on Exhibit A to this Lease
         and depicted on Exhibit B.

3C.      Leasable Square Footage of the Premises: From the Commencement Date
         until the First Expansion Date, 88,510 square feet (the Original
         Premises), subject to adjustment as provided in Section 2.6; from the
         First Expansion Date until the Second Expansion Delivery Date, 128,510
         square feet (the Original Premises and the First Additional Premises),
         subject to adjustment as provided in Section 2.6; and from and after
         the Second Expansion Delivery Date, 160,000 square feet (the Original
         Premises, the First Additional Premises and the Second Additional
         Premises).

3D.      Leasable Square Footage of the Building: An agreed upon 160,000 square
         feet.

4A.      Base Building Work: As set forth in Section 3.1 and Exhibit D.

4B.      Tenant's Work: As set forth in Section 3.3 and Exhibit E.

4C.      Amenities Work: In addition to the Base Building Work, Landlord shall
         install and furnish (a) the Fitness Center, (b) the Food Service
         Facility, (c) a stone lobby for the Premises, and (d) four (4) complete
         sets of finished restrooms in the Premises with tile and finishes
         selected by Tenant (collectively, the "Amenities Work").

<PAGE>

5A.      Lease Term: From the Commencement Date until the last day of the
         tenth (10th) Lease Year (August 31, 2013), subject to the terms of
         this Lease.

5B.      Commencement Date: August 15, 2003.

5C.      Rights of Extension: Tenant shall have the right to extend the
         Lease Term for two (2) terms of ten (10) years each in
         accordance with Section 2.4(b).

6.       Permitted Use: Subject to applicable Legal Requirements, the
         Premises may be used only for laboratory, research and development,
         light manufacturing and assembly, and general office purposes and
         lawful uses ancillary or accessory to any of the foregoing.

7.       Security Deposit: $1,000,000, in the form of cash or Letter of Credit.

8.       Tenant's Parking Allocation: All of the parking spaces in the Parking
         Areas, other than spaces which BAE is entitled to use until the Second
         Expansion Delivery Date.

9.       Base Rent: Base Rent for the first Lease Year is $885,100.00
         ($73,758.33 per month), determined on the basis of an annual rate of
         $10.00 per square foot (subject to adjustment on the basis of an
         adjustment in the Leasable Square Footage of the Premises pursuant to
         Section 2.6). The annual per square foot Base Rent shall be adjusted as
         of the beginning of each Lease Year during the Lease Term to be one
         hundred three percent (103%) of the annual per square foot Base Rent
         for the immediately preceding Lease Year, rounded to the nearest cent.
         Therefore, the Base Rent for the Initial Term shall be as follows
         (subject to adjustment prior to the Second Expansion Rent Commencement
         Date on the basis of an adjustment in the Leasable Square Footage of
         the Premises pursuant to Section 2.6):

<TABLE>
<CAPTION>
                                                       ANNUAL              MONTHLY              PSF
 PERIOD                                                 RATE                RATE                RATE
----------------------------------------------------------------------------------------------------------
<S>                                                <C>                   <C>                   <C>
First (1st) Lease Year (8/15/03-8/31/04):          $  885,100.00         $ 73,758.33           $10.00

Second (2nd) Lease Year until First Expansion
 Date (9/1/04-8/15/05 (anticipated))               $  911,653.00         $ 75,971.08           $10.30

First Expansion Date until end of second (2nd)
 Lease Year (8/15/05 (anticipated)-8/31/05         $1,323,653.00         $110,304.41           $10.30

Third (3rd) Lease Year until Second Expansion
 Rent Commencement Date (9/1/05-3/31/06
 (anticipated))                                    $1,363,491.10         $113,624.25           $10.61

Second Expansion Rent Commencement Date until
 end of third (3rd) Lease Year (3/31/06
 (anticipated)-8/31/06)                            $1,697,600.00         $141,466.67           $10.61

Fourth (4th) Lease Year (9/1/06-8/31/07)           $1,748,800.00         $145,733.33           $10.93

Fifth (5th) Lease Year (9/1/07-8/31/08)            $1,801,600.00         $150,133.33           $11.26

Sixth (6th) Lease Year (9/1/08-8/31/09)            $1,856,000.00         $154,666.67           $11.60
</TABLE>

                                      -iv-

<PAGE>

<TABLE>
<S>                                                <C>                   <C>                   <C>
Seventh (7th) Lease Year (9/1/09-8/31/10)          $1,912,000.00         $159,333.33           $11.95

Eighth (8th) Lease Year (9/1/10-8/31/11)           $1,969,600.00         $164,133.33           $12.31

Ninth (9th) Lease Year (9/1/11-8/31/12)            $2,028,800.00         $169,066.67           $12.68

Tenth (10th) Lease Year (9/1/12-8/31/13)           $2,089,600.00         $174,133.33           $13.06
</TABLE>

         During any Extension Term, the annual per square foot Base Rent shall
         continue to be adjusted as of the beginning of each Lease Year to be
         one hundred three percent (103%) of the annual per square foot Base
         Rent for the immediately preceding Lease Year, rounded to the nearest
         cent.

10A.     Additional Rent: (a) Tenant's Share of (i) Taxes, (ii) Insurance Costs
         and (iii) Operating Costs, (b) Tenant's Electricity Costs, and/or (c)
         Other Additional Rent.

10B.     Tenant's Electricity Costs: Tenant shall directly pay its actual
         costs for electricity provided to the Premises and/or the HVAC
         equipment and systems serving the Premises ("Tenant's Electricity
         Costs"), as provided in Section 4.7.

10C.     Other Additional Rent: Includes all fees, charges, expenses, fines,
         assessments, interest, indemnities, or other sums payable by Tenant
         hereunder other than (a) Base Rent, (b) Tenant's Share of (i) Taxes,
         (ii) Insurance Costs and (iii) Operating Costs, and (c) Tenant's
         Electricity Costs due under this Lease.

11.      Utilities: To be supplied by Landlord (including water and sewer
         charges) as part of the Operating Costs (except that Tenant's
         Electricity Costs shall not be included in Operating Costs and shall be
         paid by Tenant as provided in Section 4.7). However, Landlord, in
         addition to electricity, reserves the right to separately meter or
         submeter gas, water, sewer and other utilities serving the Premises in
         which event such separately metered or submetered items shall be
         directly billed to Tenant.

12.      First Payment: First month's Base Rent in the amount of $73,758.33,
         plus the Security Deposit in the amount of $1,000,000, shall be paid
         upon execution of this Lease; provided that the Security Deposit may be
         in the form of a Letter of Credit complying with Section 2.5(b).

13.      Brokers: (a) The Bulfinch Companies, Inc., having an office at First
         Needham Place, 250 First Avenue, Suite 200, Needham, MA 02494, and (b)
         Insignia/ESG, having an office at 111 Huntington Avenue, 12th Floor,
         Boston, MA 02119.

14A.     Tenant's Address For Notices, Telephone Number, Fax Number and Taxpayer
         Identification No.:

         Prior to the Commencement Date:

         Antigenics, Inc.
         34 Commerce Way
         Woburn, MA 01801
         Attn: Russ Herndon, Chief Operating Officer and President
         Telephone: (781) 721-3818; Fax: (781) 938-6496

         From and after the Commencement Date:

                                      -v-

<PAGE>

         Antigenics, Inc.
         3 Forbes Road
         Lexington, MA
         Attn: Russ Herndon, Chief Operating Officer and President
         Telephone: ____________;  Fax: ____________

         with a copy to:

         Ropes & Gray
         One International Place
         Boston, MA 02110
         Attn: Stephen P. Lindsay, Esq.
         Telephone: (617) 951-7000; Fax: (617) 951-7050

         Tenant F.I.D.#06-1562417

14B.     Landlord's Address for Notices:

         BHX, LLC, as Trustee of 3 Forbes Realty Trust
         c/o The Bulfinch Companies, Inc.
         First Needham Place
         250 First Avenue, Suite 200
         Needham, MA 02494
         Attention: Robert A. Schlager
         Telephone: (781) 707-4000; Fax: (781) 707-4001

         with a copy to:

         Vorys, Sater, Seymour and Pease LLP
         Suite 2000, Atrium Two
         221 E. Fourth Street
         Cincinnati, OH 45202
         Attn: Charles C. Bissinger, Jr., Esq.
         Telephone: (513) 723-4000; Fax: (513) 723-4056

                                      -vi-

<PAGE>

                                      LEASE

         THIS LEASE (this "Lease"), made as of the 6th day of December, 2002,
between BHX, LLC, a Massachusetts limited liability company, as Trustee of 3
Forbes Realty Trust, a Massachusetts nominee trust, and Antigenics, Inc., a
Delaware corporation, is as follows:

                              W I T N E S S E T H:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

         In addition to the words and terms defined elsewhere in this Lease, the
following words and terms shall have in this Lease the meanings set forth in
this Article (whether or not underscored):

         "Additional Rent" has the meaning set forth in Item 10A of the Summary
of Basic Terms.

         "Amenities Work" has the meaning set forth in Item 4C of the Summary of
Basic Terms.

         "Applicable Interest Rate" means the lesser of (a) a rate per annum
equal to four percent (4%) plus the prime rate of Fleet National Bank, Boston,
Massachusetts (or any successor), in effect on the day the payment became due
and subject to change thereafter or (b) the maximum rate permitted by applicable
law.

         "BAE" means BAE SYSTEMS Information and Electronics Systems Integration
Inc., a Delaware corporation, its successors and assigns, or any other tenant or
occupant of the Second Additional Premises (other than Tenant).

         "Bankruptcy Laws" means any existing or future bankruptcy, insolvency,
reorganization, dissolution, liquidation or arrangement or readjustment of debt
law or any similar existing or future law of any applicable jurisdiction, or any
laws amendatory thereof or supplemental thereto, including, without limitation,
the United States Bankruptcy Code of 1978, as amended (11 U.S.C. Section 101 et
seq.), as any or all of the foregoing may be amended or supplemented from time
to time.

         "Base Building Plans" means the plans and specifications for the Base
Building Work as identified in Exhibit D hereto.

         "Base Building Work" means the work to be performed by Landlord
pursuant to the Base Building Plans. Base Building Work includes, without
limitation, any such work with respect to the Original Premises and the First
Additional Premises.

         "Base Rent" has the meaning set forth in Item 9 of the Summary of Basic
Terms.

         "Brokers" has the meaning set forth in Item 13 of the Summary of Basic
Terms.

         "Building" means the building located on Landlord's Property and shown
on the Site Plan, and any additions thereto and alterations and replacements
thereof from time to time.

         "Building Floor Plans" means the floor plans of the Building attached
hereto as Exhibit C.

         "Business Days" mean Monday through Friday, except holidays. The term
"holiday" shall mean (a) the federal day of celebration of the following
holidays: New Year's Day, President's Day, Memorial Day, July 4th, Labor Day,
Thanksgiving and Christmas and (b) the Friday after Thanksgiving.

         "Commencement Date" has the meaning set forth in Item 5B of the Summary
of Basic Terms.

<PAGE>
         "Common Areas" means all areas of Landlord's Property, as designated by
Landlord from time to time, located inside or outside of the Building, which are
not intended for the use of a single tenant and which are intended (a) for the
non-exclusive common use of Landlord, Tenant and other tenants of portions of
the Building and their respective employees, agents, licensees and invitees
and/or (b) to serve Landlord's Property. Restroom facilities in the Building
which are intended for use by one tenant only shall not be part of the Common
Areas. Common Areas include, without limitation, the loading dock of the
Building and the portion of the Building providing access to the loading dock,
sidewalks, Parking Areas, access drives, landscaped areas, and utility lines and
systems serving more than a single tenant. It is understood that there will be
no Common Areas from and after the Second Expansion Delivery Date.

         "Delivery Condition" means the condition in which the Original Premises
and the First Additional Premises presently exist, subject to ordinary wear and
tear and subject to any damage caused by Tenant, with the Base Building Work
substantially complete, free and clear of tenants and occupants.

         "Effective Date" means December 6, 2002.

         "Environmental Law" means the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Clean Water Act, 33
U.S.C. Section 1321 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
the Massachusetts Oil and Hazardous Material Release Prevention and Response
Act, Chapter 21E of the Massachusetts General Laws, all regulations promulgated
thereunder, and any other federal, state, county, municipal, local or other
statute, law, ordinance or regulation (including any state or local board of
health rules, regulation, or code), which may relate to the protection of human
health or the environment, all as may be from time to time amended or modified.

         "Event of Default" has the meaning set forth in Section 12.1.

         "Extension Term" means, as applicable, (a) the period of time beginning
at the end of the Initial Term and ending at 11:59 p.m. on the last day of the
twentieth (20th) Lease Year, and (b) the period of time beginning at the end of
the twentieth (20th) Lease Year and ending at 11:59 p.m. on the last day of the
thirtieth (30th) Lease Year.

         "First Additional Premises" has the meaning set forth in Item 3A of the
Summary of Basic Terms.

         "First Expansion Date" means August 15, 2005, subject to acceleration
as provided in Section 2.1(c).

         "Fitness Center" means the space on the first floor of the Building
designated as "Fitness Center" on the Building Floor Plans, containing
approximately 3,000 square feet.

         "Food Service Facility" means the space on the first floor of the
Building designated as "Cafe" on the Building Floor Plans, containing
approximately 4,000 square feet.

         "GAAP" means generally accepted accounting principles, consistently
applied.

         "Hazardous Materials" or "Hazardous Substances" means, at any time, (a)
any "hazardous substance" as defined in Section 101(14) of CERCLA (42 U.S.C.
Section 9601(14)) or regulations promulgated thereunder; (b) any "hazardous
waste" or "infectious waste," as such terms are defined in any Environmental Law
at such time; and (c) asbestos, urea-formaldehyde, polychlorinated biphenyls
("PCBs"), bio-medical materials or waste, nuclear fuel or material, chemical
waste, radioactive material, explosives, known carcinogens, petroleum products
and by-products and other dangerous, toxic or hazardous pollutants,
contaminants, chemicals, materials or substances which may be hazardous to human
health or the environment and which are listed or identified in, or regulated
by, any Environmental Law.

                                      -2-

<PAGE>

         "HVAC" means heating, ventilation and air conditioning.

         "Initial Term" means the period beginning at 12:01 A.M. on the
Commencement Date and ending at 11:59 P.M. on the last day of the tenth (10th)
Lease Year.

         "Insurance Costs" includes the cost of insuring Landlord's Property,
including without limitation the buildings and improvements now or hereafter
situated thereon, and all operations conducted in connection therewith, with
such policies, coverages and companies and in such limits as may be selected by
Landlord (and/or which may be required by Landlord's lenders), including, but
not limited to, fire insurance with extended or with all-risk coverage,
comprehensive public liability insurance covering personal injury, deaths and
property damage with a personal injury endorsement covering false arrest,
detention or imprisonment, malicious prosecution, libel and slander, and
wrongful entry or eviction, rent loss or business interruption insurance, plate
glass insurance, contractual liability insurance and boiler insurance, all such
insurance to be with coverages and in amounts and with deductibles consistent
with insurance maintained by landlords of properties of comparable type and
character in the Boston area.

         "Invitees" means employees, workers, visitors, guests, customers,
suppliers, agents, contractors, representatives, licensees and other invitees.

         "Land" means the land located at 3 Forbes Road, Lexington,
Massachusetts more particularly described in Exhibit A attached hereto and
incorporated by reference herein and which is depicted on the Site Plan.

         "Landlord" means BHX, LLC, a Massachusetts limited liability company,
as Trustee of 3 Forbes Realty Trust, a Massachusetts nominee trust, its
successors and assigns.

         "Landlord's Architect" means ADD, Inc. or any other architect or
architectural firm designated by Landlord.

         "Landlord's Property" has the meaning set forth in Item 3B of the
Summary of Basic Terms.

         "Landlord's Restoration Work" has the meaning set forth in Section
10.1(a).

         "Landlord's Work" means the Base Building Work and the Amenities Work.

         "Leasable Square Footage" has, (a) when used with respect to the
Premises, the meaning set forth in Item 3C of the Summary of Basic Terms, and
(b) when used with respect to the Building, the meaning set forth in Item 3D of
the Summary of Basic Terms.

         "Lease Term" means the Initial Term and, if Tenant timely and properly
exercises its right to extend pursuant to Section 2.4(b), each Extension Term
with respect to which Tenant has so exercised such right.

         "Lease Year" means (a) with respect to the first Lease Year, the period
beginning on the Commencement Date and ending one (1) year after the last day of
the calendar month in which the Commencement Date occurs, if the Commencement
Date is any day other than the first day of a calendar month and (b) with
respect to the second Lease Year and each Lease Year thereafter, the twelve (12)
month period immediately following the preceding Lease Year.

         "Legal Requirements" means all applicable laws, statutes, rules,
regulations and requirements of governmental authorities, including, but not
limited to, zoning laws and building codes, subject to the right of the party
responsible for compliance to defer compliance pending its efforts to contest
the same in good faith and in compliance with applicable procedures.

         "Letter of Credit" has the meaning set forth in Section 2.5(a).

                                      -3-

<PAGE>

         "Operating Costs" means all costs, expenses and disbursements of every
kind and nature (except Taxes and Insurance Costs) which Landlord shall pay or
become obligated to pay in connection with owning, operating, managing,
maintaining, repairing or replacing Landlord's Property or elements thereof, all
as determined by Landlord. Operating Costs shall include, by way of
illustration, but not be limited to: all charges payable by Landlord in
connection with the performance of Landlord's maintenance and repair obligations
with respect to Landlord's Property; all charges payable by Landlord to provide
utility services to Landlord's Property; all costs related to removal of snow
and ice; all costs of pest and vermin control; all costs of providing,
maintaining, repairing and replacing of paving, curbs, walkways, landscaping,
planters, roofs, walls, drainage, utility lines, security systems and other
equipment; all costs of painting the exterior of the Building; all costs of
repaving, resurfacing, and restriping Parking Areas and drives; all surcharges,
costs and expenses that may result from any Environmental Laws or other laws,
rules, regulations, guidelines or orders; all costs of licenses, permits and
inspection fees; all legal, accounting, inspection and consulting fees; all
costs of capital replacements to Landlord's Property, amortized over their
expected useful life based upon and including a market rate of interest; all
costs of wages, salaries and benefits of operating personnel, including welfare,
retirement, vacations and other compensation and fringe benefits and payroll
taxes; and a management fee equal to two percent (2%) of gross rents (which
management fees may be payable to an affiliate of Landlord). However,
notwithstanding the above, the following specific items shall not be included:
(a) costs incurred by Landlord in discharging its obligations to do Landlord's
Work; (b) cost of casualty repairs or other work needed because of fire,
windstorm or other casualty (except for reasonable deductibles paid by Landlord
under insurance policies maintained by Landlord); (c) costs associated with the
financing of Landlord's Property, interest on debt or amortization payments on
mortgages or deeds of trust or any other debt for borrowed money; (d) costs of
disputes between Landlord and its employees, contractors and tenants (including
Tenant); (e) Taxes; (f) costs incurred by Landlord that would be considered
capital improvements (as distinct from capital replacements) under GAAP, except
that the annual amortization over the useful life with a reasonable salvage
value on a straight-line basis of the following items shall be included: (i) any
capital improvements made by Landlord and required by any changes in Legal
Requirements after the Effective Date; and (ii) any capital improvements made by
Landlord as a labor-saving measure or to accomplish other savings in operating,
repairing, managing or maintaining Landlord's Property, but only to the extent
of the savings; (g) depreciation and amortization on the Building, except as
expressly permitted elsewhere in this Lease; (h) costs incurred because Landlord
or another tenant violated the terms of any lease, including this Lease; (i)
overhead and profit paid to affiliates of Landlord for services on or to
Landlord's Property or for supplies or materials, to the extent that the costs
of the services, supplies or materials exceed the competitive costs of the
services, supplies or materials were they not provided by an affiliate of
Landlord or to the extent they were paid for management services, for which a
maximum management fee in specified in this Lease; (j) rentals and other related
expenses incurred in leasing air conditioning systems, elevators or other
equipment ordinarily considered to be of a capital nature, except equipment used
in providing janitorial services that is not affixed to the Building; (k) items
and services for which Tenant reimburses Landlord or pays third parties or for
which Landlord is entitled to be reimbursed by third parties; (l) advertising
and promotional expenditures; (m) nonrecurring costs incurred to remedy defects
in original construction materials or installations of Landlord's Work; (n) any
costs, fees or penalties incurred because Landlord violated any Legal
Requirement; (o) costs incurred to test, survey, clean-up, contain, abate,
remove or otherwise remediate Hazardous Materials from Landlord's Property,
unless the Hazardous Materials were in or on Landlord's Property because of
Tenant's breach of this Lease or its negligence or intentional acts; (p) asset
or property management fees other than the management fee payable to Landlord as
specified in this Lease; and (q) costs of services assumed or declined by Tenant
in accordance with Section 6.2.

         "Original Premises" has the meaning set forth in Item 3A of the Summary
of Basic Terms.

         "Other Additional Rent" has the meaning set forth in Item 10C of the
Summary of Basic Terms.

         "Parking Areas" means those portions of Landlord's Property which may
be used for parking as depicted on the Site Plan, as such areas may be changed
from time to time.

                                      -4-

<PAGE>

         "Partial Completion" means, with respect to the Base Building Work,
that the Base Building Work has been completed to the point that, provided that
Landlord and Tenant and their respective contractors reasonably cooperate and
coordinate with each other, Tenant may thereafter perform Tenant's Work
substantially continuously without material interference from performance of
Landlord's Work. "Partial Completion" means, with respect to Landlord's
Restoration Work, that Landlord's Restoration Work has been completed to the
point that, provided that Landlord and Tenant and their respective contractors
reasonably cooperate and coordinate with each other, Tenant may thereafter
perform Tenant's Restoration Work substantially continuously without material
interference from performance of Landlord's Restoration Work.

         "Permitted Use" has the meaning set forth in Item 6 of the Summary of
Basic Terms.

         "Person" means any individual, partnership, joint venture, trust,
limited liability company, business trust, joint stock company, unincorporated
association, corporation, institution or other entity, including any
governmental authority.

         "Premises" means (a) the Original Premises at all times until the First
Expansion Date, (b) the Original Premises and the First Additional Premises at
all times from the First Expansion Date until the Second Expansion Delivery
Date, and (c) the Original Premises, the First Additional Premises and the
Second Additional Premises (being all of the leasable space in the Building)
from and after the Second Expansion Delivery Date.

         "Second Additional Premises" has the meaning set forth in Item 3A of
the Summary of Basic Terms.

         "Second Expansion Delivery Date" has the meaning set forth in Section
2.1(b).

         "Second Expansion Rent Commencement Date" means the date which is
ninety (90) days after the Second Expansion Delivery Date.

         "Security Deposit" has the meaning set forth in Item 7 of the Summary
of Basic Terms.

         "Site Plan" means the site plan attached hereto as Exhibit B which
depicts the approximate size and layout of the Land, the Building and the
Parking Areas.

         "Substantial Completion" means, with respect to Landlord's Work, that
Landlord's Work has been substantially completed, except for minor incomplete or
unsatisfactory items which do not materially interfere with Tenant's use of the
Premises for the Permitted Use. "Substantial Completion" means, with respect to
Landlord's Restoration Work, that Landlord's Restoration Work has been
substantially completed, except for minor incomplete or unsatisfactory items
which do not materially interfere with Tenant's use of the Premises for the
Permitted Use.

         "Summary of Basic Terms" means the Summary of Basic Terms which is
affixed to this Lease immediately after the table of contents of this Lease.

         "Tax Fiscal Year" shall mean July 1 through June 30 next following, or
such other tax period as may be established by law for the payment of Taxes.

         "Taxes" shall mean all taxes, assessments, betterments, water or sewer
entrance fees and charges including general, special, ordinary and
extraordinary, environmental, or any other charges (including charges for the
use of municipal services if billed separately from other taxes), levied,
assessed or imposed at any time by any governmental authority upon or against
the Land, the Building, or the fixtures, signs and other improvements thereon
then comprising Landlord's Property. This definition of Taxes is based upon the
present system of real estate taxation in the Commonwealth of Massachusetts; if
taxes upon rentals or any other basis shall be substituted, in whole or in part,
for the present ad valorem

                                      -5-

<PAGE>

real estate taxes, the term "Taxes" shall be deemed changed to the extent to
which there is such a substitution for the present ad valorem real estate taxes.

         "Tenant" means Antigenics, Inc., a Delaware corporation, its permitted
successors and permitted assigns.

         "Tenant Affiliate" means any Person which controls, is controlled by,
or is under common control with, Tenant, or is a successor to Tenant by merger,
consolidation or sale of substantially all of the assets of Tenant. For purposes
of this definition, "control" of a Person means the power, direct or indirect,
to vote more than 50% of the securities (or other ownership interests) having
voting power for the election of directors or managers (in the case of a limited
liability company) of the Person.

         "Tenant Improvements Plans" means the plans and specifications for
Tenant's build-out of the Premises, to prepared by Tenant in accordance with
Section 3.3(a).

         "Tenant Invitees" means Tenant, its subtenants and assignees, any
Tenant Affiliate, together with any of their respective Invitees.

         "Tenant's Electricity Costs" has the meaning set forth in Item 10B of
the Summary of Basic Terms.

         "Tenant's Restoration Work" has the meaning set forth in Section
10.1(a).

         "Tenant's Share" means the amount (expressed as a percentage) equal to
(a) the Leasable Square Footage of the Premises divided by (b) the Leasable
Square Footage of the Building; provided, however, that for purposes of
determining Tenant's Share of Taxes, Insurance Costs and Operating Costs for the
period from the Commencement Date until the Second Expansion Rent Commencement
Date, the Premises shall be deemed to include the Original Premises and the
First Additional Premises. The percentage determined by the preceding sentence
shall be rounded upward to the nearest one-tenth of one percent (0.1%). From the
Commencement Date until the Second Expansion Rent Commencement Date, Tenant's
Share is 80.3%, subject to increase or decrease, as applicable, in the event of
an increase or decrease in the Leasable Square Footage of the Premises
(including pursuant to Section 2.6). The parties understand that the immediately
preceding sentence has the effect of requiring Tenant to pay certain Additional
Rent with respect to the First Additional Premises from and after the
Commencement Date, before the Premises have been expanded to include the First
Additional Premises. From and after the Second Expansion Rent Commencement Date,
Tenant's Share is 100%.

         "Tenant's Work" means the work to be performed by Tenant pursuant to
the Tenant Improvements Plans.

                                   ARTICLE II

                                LEASE OF PREMISES

         Section 2.1 Lease Of The Premises. Landlord does hereby lease the
Premises to Tenant, and Tenant hereby leases the Premises from Landlord, upon
and subject to the terms and provisions of this Lease and all zoning ordinances,
and easements, restrictions, and conditions of record. This Lease is effective
as of the Effective Date, but the Lease Term will not commence until the
Commencement Date. Initially, the Premises shall consist of the Original
Premises, including the Fitness Center and the Food Service Facility. The
Premises shall be expanded as follows:

                  (a)      As of the First Expansion Date, the Premises shall be
expanded to include the First Additional Premises. Landlord shall deliver the
First Additional Premises to Tenant on the First Expansion Date in the Delivery
Condition. From the First Expansion Date until the Second Expansion Delivery
Date, the Premises shall consist of the Original Premises and the First
Additional Premises.

                                      -6-

<PAGE>

                  (b)      Landlord shall not (i) expand the rights of BAE to
use Landlord's Property beyond those that exist under its lease as of the
Effective Date or (ii) give BAE the right to use or occupy any portion of the
Second Additional Premises beyond March 31, 2006. As used herein, the "Second
Expansion Delivery Date" means (x) January 1, 2006, if BAE is not then in
occupancy of any portion of the Second Additional Premises and Landlord has then
put the Second Additional Premises in the Delivery Condition, or (y) if, as of
January 1, 2006, BAE is in occupancy of all or any portion of the Second
Additional Premises or Landlord has not put the Second Additional Premises in
the Delivery Condition, such later date as of which BAE has vacated and
surrendered the Second Additional Premises and Landlord has put the Second
Additional Premises in the Delivery Condition, but not later than thirty (30)
days after BAE vacates and surrenders the Second Additional Premises. If BAE
holds over in any portion of the Second Additional Premises beyond March 31,
2006, Landlord will not have any liability to Tenant for the delay in the Second
Expansion Delivery Date caused by such holdover, but Landlord shall take
commercially reasonable steps to recover possession of the Second Additional
Premises from BAE and to put the Second Additional Premises in the Delivery
Condition. Landlord shall attempt in good faith to keep Tenant informed as to
the anticipated Second Expansion Delivery Date, and shall respond to Tenant's
inquiries in connection therewith. As of the Second Expansion Delivery Date, the
Premises shall be expanded to include the Second Additional Premises. Landlord
shall deliver the Second Additional Premises to Tenant on the Second Expansion
Delivery Date in the Delivery Condition. From and after the Second Expansion
Delivery Date, the Premises shall consist of the entire Building and Tenant
shall have the exclusive right to possess the entire Landlord's Property
(subject to Landlord's rights of access as provided herein). Notwithstanding the
above provisions of this Section 2.1(b) to the contrary, Tenant's rent
obligations with respect to the Second Additional Premises shall not commence
until the Second Expansion Rent Commencement Date.

                  (c)      The First Additional Premises are presently unleased.
Landlord will not lease the First Additional Premises to a third party, other
than under a lease that would commence after the Lease Term. From the
Commencement Date until the First Expansion Date, Tenant shall have the right to
use the First Additional Premises for dead storage purposes and to make
improvements to and otherwise prepare for occupancy of the First Additional
Premises, without the obligation to pay Base Rent therefor. Such use of the
First Additional Premises prior to the First Expansion Date shall be subject to
all the terms and conditions of this Lease other than the obligation to pay Base
Rent for the First Additional Premises. Tenant may, at its option exercisable by
written notice to Landlord, accelerate the First Expansion Date to a date
earlier than August 15, 2005 (but not earlier than the Commencement Date) as
specified in such notice.

         Section 2.2 Common Rights. The Premises are leased subject to, and with
the benefit of, the non-exclusive right to use in common with others at any time
entitled thereto the Common Areas for all such purposes as such areas may be
reasonably designated, but only in connection with lawful business in the
Building. Landlord shall have the right from time to time to change the Common
Areas. The above provisions of this Section 2.2 shall be operative only until
the Second Expansion Delivery Date, after which there shall be no Common Areas.
Prior to the Second Expansion Delivery Date, to the extent that Landlord is
required to allow BAE access to the Food Service Facility under Landlord's lease
with BAE, Tenant shall permit BAE and BAE's Invitees to have access to and to
use the Food Service Facility for its intended purpose, subject to such
reasonable rules and regulations as may be established by Tenant from time to
time.

         Section 2.3 Parking. Subject to the rights of BAE until the Second
Expansion Delivery Date, Tenant Invitees are authorized to park passenger
automobiles in the Parking Areas. Until the Second Expansion Delivery Date,
Tenant shall not (a) permit any Tenant Invitees (other than visitors) to park in
spaces designated as "visitor" spaces, (b) permit any Tenant Invitees to park in
spaces designated as "reserved" spaces for BAE pursuant to BAE's lease, and (c)
except for delivery trucks using designated loading and unloading facilities,
permit any Tenant Invitee to park any vehicle on Landlord's Property other than
passenger automobiles. Subject to (i) the rights of BAE until the Second
Expansion Delivery Date, and (ii) Legal Requirements (including but not limited
to Legal Requirements applicable to the Permitted Use), Tenant may restripe the
Parking Areas and reconfigure the parking spaces within the Parking Areas and,
to the extent necessary to use the Premises in compliance with Legal
Requirements, and subject to

                                      -7-

<PAGE>

compliance with Section 7.5 (without regard to Permitted Alterations as defined
in Section 7.5), expand or construct additional Parking Areas, whether
structured parking or otherwise, on Landlord's Property; provided, however, that
if, under the terms of any mortgage on Landlord's Property, the consent of the
mortgagee is required as a condition of expanding or constructing any additional
Parking Areas, such expansion or construction shall be subject to such
mortgagee's consent, but Landlord shall use commercially reasonable efforts to
obtain such consent. With respect to any future mortgage on Landlord's Property,
Landlord will negotiate in good faith to attempt to include a provision to the
effect that the mortgagee will not unreasonably withhold its consent to the
expansion or construction of additional Parking Areas.

         Section 2.4 Commencement Date; Lease Term; Rights to Extend.

                  (a)      The Lease Term shall commence at 12:01 A.M. on the
Commencement Date and, unless Tenant timely and properly exercises its right to
extend pursuant to Section 2.4(b), shall end at 11:59 P.M. on the last day of
the Initial Term.

                  (b)      Provided there then exists no uncured Event of
Default, Tenant shall have the right to extend the Lease Term for two (2)
periods of ten (10) years each by giving Landlord written notice exercising such
extension, which notice must be received by Landlord not more than eighteen (18)
months nor less than twelve (12) months prior to the expiration date of the
Initial Term or then current Extension Term, as applicable. If such notice is
timely and properly given, the Lease Term shall be automatically extended upon
the same terms and conditions except that (i) Base Rent for each Lease Year of
an Extension Term shall be one hundred three percent (103%) of the Base Rent for
the immediately preceding Lease Year, and (ii) there shall be no further right
to extend or renew beyond the periods expressly set forth herein.

         Section 2.5 Security Deposit.

                  (a)      Simultaneously with the execution and delivery of
this Lease, Tenant shall deliver to Landlord the Security Deposit, which shall
be in the form of cash or a letter of credit which satisfies the conditions of
Section 2.5(b) ("Letter of Credit").

                  (b)      If the Security Deposit is in the form of a Letter of
Credit, such Letter of Credit must satisfy all of the following conditions: (i)
the Letter of Credit must be in the exact form attached hereto as Exhibit F or
otherwise reasonably approved by Landlord with an expiration date not less than
one (1) year after the date of the Letter of Credit; (ii) the beneficiary of the
Letter of Credit must be Landlord or Landlord's designee; (iii) the Letter of
Credit must be irrevocable, unconditional and transferable one or more times
without charge; (iv) the Letter of Credit must by issued by Fleet National Bank
or another Massachusetts bank satisfactory to Landlord in its sole and absolute
discretion; and (v) the Letter of Credit must provide that it may be drawn at a
location in Boston, Massachusetts. If, at any time, the issuer of the Letter of
Credit gives notice of its election not to renew, extend and/or reissue the
Letter of Credit, then Tenant shall, on or before forty-five (45) days prior to
the expiration of the term of the Letter of Credit, deliver to Landlord (1) a
replacement Letter of Credit satisfying all of the above conditions or (2) cash
in the full amount of the expiring Letter of Credit; and if Tenant fails to
timely deliver to Landlord a replacement Letter of Credit as provided above or
cash in the full amount of the expiring Letter of Credit, such failure shall
constitute a payment failure under Section 12.1(a) and, in addition to any other
rights which Landlord might have by reason of such payment failure, Landlord may
draw on the Letter of Credit and hold the proceeds of such drawing as the
Security Deposit. If Landlord draws on the Letter of Credit and holds the
proceeds of such drawing as the Security Deposit under the immediately preceding
sentence, then, as long as there exists no uncured Event of Default, Tenant may
provide a replacement Letter of Credit in the amount of the Security Deposit
which satisfies the conditions of this Section 2.5(b), whereupon Landlord will
release the cash Security Deposit to Tenant. If (x) Landlord shall reasonably
determine that there has been a material adverse change in the creditworthiness
of the bank issuing the Letter of Credit and Tenant shall fail, within ten (10)
days after notice, to either provide a replacement Letter of Credit as provided
above or cash in the full amount of the existing Letter of Credit, or (y) Tenant
fails to provide Landlord with cash in the full amount of the Letter of Credit
within ten (10) days after notice

                                      -8-

<PAGE>

to Tenant that (I) any proceedings under the Bankruptcy Code, receivership or
any insolvency law are instituted with the issuer of the Letter of Credit as
debtor or (II) the bank issuing the Letter of Credit is taken over by the
Federal Deposit Insurance Corporation, the Resolution Trust Corporation or a
similar entity, then such failure by Tenant under clauses (x) or (y) of this
sentence shall constitute an Event of Default and, in addition to any other
rights which Landlord might have by reason of such Event of Default, Landlord
may draw on the Letter of Credit and hold the proceeds of such drawing as part
of the Security Deposit.

                  (c)      The Security Deposit is security for the faithful
performance and observance by Tenant of the terms, provisions and conditions of
this Lease and is not an advance payment of rent. It is agreed that if an Event
of Default occurs, Landlord may use, apply or retain the whole or any part of
the Security Deposit to the extent required for payment of any Base Rent,
Additional Rent, or any other sum as to which Tenant is in default or for any
sum which Landlord may expend or may be required to expend by reason of the
occurrence of an Event of Default, including, but not limited to, any damage or
deficiency accrued before or after summary proceedings or other re-entry by
Landlord, including the costs of such proceeding or re-entry and further
including, without limitation, reasonable attorneys' fees. It is agreed that
Landlord shall always have the right to apply the Security Deposit, or any part
thereof, as aforesaid, without additional notice and without prejudice to any
other remedy or remedies which Landlord may have, or Landlord may pursue any
other such remedy or remedies in lieu of applying the Security Deposit or any
part thereof. No interest shall be payable on the Security Deposit and Landlord
shall have the right to commingle the Security Deposit with other funds of
Landlord. If Landlord shall apply the Security Deposit in whole or in part,
Tenant shall immediately upon demand pay to Landlord the amount so applied to
restore the Security Deposit to its original amount. Because (i) Tenant's Share
of (A) Taxes, (B) Insurance Costs and (C) Operating Costs, (ii) Tenant's
Electricity Costs and (iii) Other Additional Rent may be subject to annual
reconciliation based on actual amounts determined to be due, in addition to the
other rights provided herein to Landlord regarding the Security Deposit,
Landlord shall have the right, in its discretion, upon the end of the Lease and
delivery of the Premises in accordance with the terms hereof, to hold a
reasonable portion of the Security Deposit (or whatever amount remains after
Landlord exercises its other rights hereunder) until fifteen (15) days after
such reconciliation, at which time Landlord has the right to deduct any amounts
then determined to be due from the remaining Security Deposit and return any
balance of the Security Deposit to Tenant. If the remaining Security Deposit, if
any, is not sufficient to pay Tenant's obligations hereunder, Tenant shall pay
the same within ten (10) days of billing from Landlord. In the event of a sale
or other transfer of Landlord's Property, or leasing of the entire Landlord's
Property including the Premises subject to Tenant's tenancy hereunder, Landlord
shall transfer the Security Deposit then remaining to the vendee or lessee, in
which event Landlord shall thereupon be released from all liability for the
return of such Security Deposit to Tenant; and Tenant agrees to look solely to
the new landlord for the return of the Security Deposit then remaining. Tenant
further covenants that it will not assign or encumber or attempt to assign or
encumber the Security Deposit and that neither Landlord nor its successors or
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.

         Section 2.6 Measurement. Either party may, by written notice given to
the other during the period of ninety (90) days after the Commencement Date
and/or during the period of ninety (90) days after the First Expansion Date,
request an actual measurement of the Leasable Square Footage of the Premises, in
which event Landlord's Architect shall make the requested measurement in
accordance with BOMA standards and such measurement shall be used for purposes
of this Lease until the Second Expansion Rent Commencement Date. If a
measurement pursuant to this Section 2.6 results in an adjustment in the
Leasable Square Footage of the Premises from that set forth in Item 3C of the
Summary of Basic Terms, such adjustment shall be made retroactive to the
Commencement Date (if the measurement is made within ninety (90) days after the
Commencement Date) or the First Expansion Date (if the measurement is made
within ninety (90) days after the First Expansion Date). If such adjustment is
an increase in the Leasable Square Footage of the Premises, Tenant shall pay to
Landlord the retroactive increase in Base Rent and Additional Rent within ten
(10) Business Days after Landlord invoices Tenant therefor. If such adjustment
is a decrease in the Leasable Square Footage of the Premises, Tenant may credit
the overpayment of Base Rent and Additional Rent resulting from the retroactive
decrease in Base Rent and Additional Rent against the installments of Base Rent
and Additional Rent next coming due.

                                      -9-

<PAGE>

         Section 2.7 Lease Amendment. If, pursuant to Sections 2.1, 2.6, 8.1 or
11.1 or any other provision of this Lease, there results a change in (or, in the
case of the Second Expansion Delivery Date, the confirmation of) any of the
terms or amounts in the Summary of Basic Terms (including, without limitation,
the Leasable Square Footage of the Premises, Base Rent, or Tenant's Share) then
in effect, Landlord and Tenant will promptly execute a written amendment to, and
restatement of, the Summary of Basic Terms, substituting the changed (or
confirmed) terms and recomputed amounts in lieu of each of the applicable terms
and amounts then in effect which have been changed. As of the effective date of
the amendment to the Summary of Basic Terms, the changed terms (and recomputed
amounts) will be effective for all purposes of this Lease, and the amended and
restated Summary of Basic Terms will be a part of, and incorporated into, this
Lease.

                                   ARTICLE III
                                      WORK

         Section 3.1 Base Building Work.

         (a)      Landlord shall perform the Base Building Work in a good and
workmanlike manner using new, first class materials, in accordance with all
Legal Requirements, and substantially in accordance with the Base Building
Plans. Landlord reserves the right to make changes in the Base Building Work
from time to time as Landlord deems necessary and/or appropriate in order to
complete the performance of the Base Building Work. Without limiting the
generality of the foregoing, Landlord may substitute materials to minimize
delays and Landlord may make such changes to the Base Building Plans as Landlord
deems necessary or appropriate in light of actual conditions, provided that no
such changes or substitutions of materials shall decrease the quality of the
materials, fixtures and devices used in the Base Building Work.

         (b)      Landlord shall achieve Partial Completion (with respect to
both the Original Premises and the First Additional Premises) not later than
January 10, 2003, subject to extension for delays beyond the reasonable control
of Landlord. After Landlord achieves Partial Completion of the Base Building
Work and Tenant commences Tenant's Work, Landlord will cause its contractor to
coordinate the continuing performance of the Base Building Work with the
performance of Tenant's Work in order that Tenant's Work may proceed
continuously and without material interference.

         (c)      Landlord shall achieve Substantial Completion not later than
the Commencement Date. Tenant's taking possession of the Premises for purposes
of conducting Tenant's business shall be conclusive evidence, as against Tenant,
that Landlord has achieved Substantial Completion, in substantial accordance
with the Base Building Plans when Tenant took possession, except for punch list
items on a list signed by both parties within thirty (30) days after Substantial
Completion. Landlord shall complete all punch list items within thirty (30) days
after the date of the punch list. Landlord warrants to Tenant that the Base
Building Work shall be free from defects in workmanship and materials. Tenant
shall deemed to have waived any claim under such warranty except for such
matters of which Tenant advises Landlord in writing on or before the first
anniversary of the Commencement Date. Except for the warranty specifically set
forth above in this Section 3.1(c), Landlord disclaims any and all warranties
with respect to the Base Building Work. Landlord shall assign to Tenant any
warranties made by contractors or material suppliers to or for the benefit of
Landlord with respect to the Base Building Work, including but not limited to
any warranty made to or for the benefit of Landlord with respect to the roof of
the Building.

         Section 3.2 Amenities Work. Not later than the Commencement Date,
Landlord shall perform the Amenities Work in a good and workmanlike manner using
new, first class materials, in accordance with all Legal Requirements, and
substantially in accordance with plans submitted to and approved by Tenant
(which approval Tenant will not unreasonably withhold, condition or delay). The
parties intend that the level and finishes of the Amenities Work shall be that
customary for similar types of amenities in suburban office buildings of a type
and character similar to the Building in the Boston area. Landlord reserves the
right to make changes in the Amenities Work from time to time as Landlord deems
necessary and/or appropriate in order to complete the performance of the
Amenities. Without limiting the generality of the foregoing, Landlord may
substitute materials to minimize delays and Landlord may make such changes to

                                      -10-

<PAGE>

the plans as Landlord deems necessary or appropriate in light of actual
conditions, provided that no such changes or substitutions of materials shall
decrease the quality of the materials, fixtures and devices used in the
Amenities Work. Landlord will coordinate the performance of the Amenities Work
with the performance of Tenant's Work in order that Tenant's Work may proceed
continuously and without material interference. Tenant's taking possession of
the Amenities Work for their intended purposes shall be conclusive evidence, as
against Tenant, that Landlord has completed the Amenities Work in accordance
with this Lease, except for punch list items on a list signed by both parties
within thirty (30) days after delivery of possession. Landlord shall complete
all punch list items within thirty (30) days after the date of the punch list.
Landlord warrants to Tenant that the Amenities Work shall be free from defects
in workmanship and materials. Tenant shall be deemed to have waived any claim
under such warranty except for such matters of which Tenant advises Landlord in
writing on or before the first anniversary of the Commencement Date. Except for
the warranty specifically set forth above in this Section 3.2, Landlord
disclaims any and all warranties with respect to the Amenities Work. Landlord
shall assign to Tenant any warranties made by contractors or material suppliers
to or for the benefit of Landlord with respect to the Amenities Work.

         Section 3.3 Tenant's Work; Pre-Term Occupancy.

         (a)      Tenant Improvements Plans.

                  (i)      Tenant will prepare and submit to Landlord for review
and approval final working plans and specifications for the build-out of the
Premises, taking into account the Landlord's Work to be performed by Landlord.
Within ten (10) days after receipt of the Tenant Improvements Plans, Landlord
shall, by written notice to Tenant, approve or disapprove the Tenant
Improvements Plans. Landlord will not unreasonably withhold, condition or delay
its approval of any Tenant Improvements Plans, and in any disapproval of the
Tenant Improvements Plans, Landlord shall specify in reasonable detail the
respects in which the Tenant Improvements Plans are not satisfactory to
Landlord. After receiving any notice of disapproval from Landlord with respect
to the Tenant Improvements Plans, Tenant may revise the Tenant Improvements
Plans to satisfy the reasonable concerns of Landlord and resubmit the revised
Tenant Improvements Plans to Landlord for review and approval in accordance with
the procedures set forth in this Section. Tenant may, from time to time
thereafter, make changes in the Tenant Improvements Plans only with the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.

                  (ii)     Tenant shall be fully responsible for the compliance
of the Tenant Improvements Plans with all Legal Requirements and for assuring
that the Tenant Improvements Plans provide for Tenant's Work that will be in
compliance with all Legal Requirements and will satisfy Tenant's requirements.
Landlord's approval of the Tenant Improvements Plans shall not, and shall not be
deemed to, be a certification, representation, or warranty by Landlord that the
Tenant Improvements Plans are adequate, complete, or in compliance with Legal
Requirements.

                  (iii)    Landlord may, as reasonably necessary, have
Landlord's Architect and/or one or more engineers selected by Landlord: (A)
review the Tenant Improvements Plans and/or any proposed changes therein and/or
(B) inspect Tenant's Work. All reasonable fees and charges of Landlord's
Architect and/or any such engineers in connection with any such reviews and/or
inspections shall be paid by Tenant as Additional Rent within fifteen (15) days
after Tenant is billed therefor. All such reviews and inspections shall be for
the sole benefit of Landlord and neither Landlord nor Landlord's Architect
and/or engineers shall have any liability or obligation to Tenant or any other
Person with respect to Tenant's Work or the performance thereof.

         (b)      Performance of Tenant's Work. Tenant shall be fully
responsible for the performance of Tenant's Work. Tenant shall be responsible
for, and shall pay on or before the dates when due, all costs and expenses
related to Tenant's Work, including, but not limited to, architects' and
engineers' fees and charges, permits and other governmental fees and charges and
all direct and/or indirect construction costs. The contractor(s) performing
Tenant's Work shall be subject to the prior written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed. Landlord
hereby

                                      -11-

<PAGE>

approves any of Sasso, John Moriarty & Associates, Shawmut Design &
Construction, Turner Construction or The Richmond Company as a contractor to
perform Tenant's Work. Tenant may commence Tenant's Work after Landlord has
achieved Partial Completion. All of Tenant's Work shall be done in a good and
workmanlike manner using new and high quality materials, in accordance with the
provisions of all Legal Requirements and insurance requirements applicable
thereto and in accordance with the requirements of Section 7.5. Tenant shall at
its sole cost and expense do all work necessary and take all other steps
required in order to obtain and maintain a certificate of occupancy for such
portions of the Premises as Tenant intends to occupy from time to time;
provided, however, that Landlord shall be responsible for compliance of
Landlord's Work with Legal Requirements. Landlord may conduct such inspections
of Tenant's Work as Landlord, in its sole discretion, determines. In addition to
amounts payable pursuant to Section 3.3(a)(iii), Tenant shall pay to Landlord
the sum of 2.5% of the cost of Tenant's Work to compensate Landlord for its time
and expenses in connection with the inspection and review of Tenant's Work (such
amount to be paid monthly based upon costs incurred); provided, however, that
the maximum amount that Tenant shall be required to pay to Landlord under this
sentence shall be $250,000. All such inspections and reviews are for the sole
benefit of Landlord and Landlord shall have no liability or obligation to Tenant
or any other Person with respect to Tenant's Work or the performance thereof.

         (c)      Pre-Term Occupancy. Tenant may enter Landlord's Property prior
to the Commencement Date at Tenant's own risk solely for the purpose of planning
and performing Tenant's Work and otherwise preparing the Premises for occupancy
by Tenant and installing fixtures and equipment; provided, however, that at all
times that both Landlord's Work and Tenant's Work are ongoing, Tenant shall
cooperate reasonably with Landlord in Landlord's efforts to coordinate the
performance of the Base Building Work and the Amenities Work with the
performance of Tenant's Work in accordance with Sections 3.1(b) and 3.2. During
the period of any entry by Tenant prior to the Commencement Date pursuant to
this Section, Tenant shall be subject to the insurance obligations set forth in
Sections 7.8 and 7.9 and to all other obligations of Tenant under this Lease,
other than the obligation to pay Base Rent and Additional Rent, and, prior to
any such entry by Tenant prior to the Commencement Date, Tenant shall furnish
Landlord with a certificate of insurance confirming its procurement of the
insurance required by Sections 7.8 and 7.9.

         (d)      Applicability. The provisions of Sections 3.3(a), (b) and (c)
are applicable to the Original Premises, the First Additional Premises and the
Second Additional Premises.

         Section 3.4 Signs. Tenant shall have the right to erect one (1) sign
on the exterior of the Building provided that such sign complies with the
provisions of this Section 3.4 and other applicable provisions of this Lease.
The sign's location, design, shape, size, materials, color and type and all
other matters related to such sign (other than Tenant's right to erect a sign)
shall be subject to Landlord's prior written approval, which Landlord will not
unreasonably withhold, condition or delay, following submission by Tenant to
Landlord of detailed plans and specifications therefor. Except for the one sign
permitted pursuant to the preceding three sentences, Tenant shall not erect any
signs which are visible from the exterior of the Building. Tenant shall not
erect signs except in compliance with all applicable requirements of the Town of
Lexington and all other applicable Legal Requirements. Tenant shall be solely
responsible for confirming that any proposed sign is in compliance with all such
requirements. Tenant understands that, prior to the Second Expansion Date, BAE
may have rights to erect signs on or visible from the exterior of the Building.
All costs of obtaining permits and approvals, creating, installing,
illuminating, maintaining, repairing, and/or replacing such sign shall be paid
by Tenant. Any signs located in the interior of the Building shall comply with
all applicable Legal Requirements. Tenant shall maintain its signs, if any, in
good repair and condition. In addition, Tenant may, at its sole cost and
expense, place a sign board identifying Tenant on the existing sign post located
at the intersection of Route 2A and Forbes Road, subject to applicable Legal
Requirements and the rights of other Persons. Any such sign board shall be
consistent in size, color and appearance with other sign boards placed on such
sign post. Tenant acknowledges that the sign post is not part of Landlord's
Property and that Landlord makes no representations, warranties or commitments
of any kind regarding Tenant's right to place and/or maintain any sign board
thereon. At the end of the Lease Term or earlier termination of this Lease,
Tenant shall

                                      -12-

<PAGE>

promptly remove all exterior signage placed on the Building and/or sign post and
restore all damage related to the installation, existence and/or removal of such
signage.

                                   ARTICLE IV
                           BASE RENT; ADDITIONAL RENT

         Section 4.1 Base Rent. In consideration of the lease of the Premises
pursuant to this Lease, Tenant shall pay therefor Base Rent in the amounts set
forth in Item 9 of the Summary of Basic Terms. Base Rent for each Lease Year
shall be payable in equal monthly installments and shall be paid without offset
for any reason, except as herein expressly provided, in advance, on the first
day of each calendar month during the Lease Term commencing on the Commencement
Date. If the Commencement Date is not on the first day of a calendar month,
Tenant shall pay, on or before the Commencement Date, a proportionate part of
the Base Rent and Additional Rent for the month in which the Commencement Date
occurs based upon the annual Base Rent and Additional Rent applicable to the
first Lease Year, divided by 360 and then multiplied by the number of days in
such month (including the Commencement Date) included in the Lease Term. Base
Rent and Additional Rent shall be paid by an "electronic funds transfer" system
arranged by and among Tenant, Tenant's bank and Landlord, or in such other
manner as Landlord shall from time to time designate in writing. The parties
hereto acknowledge and agree that the obligations owing by Tenant under this
Section 4.1 are rent reserved under this Lease, for all purposes hereunder, and
are rent reserved within the meaning of Section 502(b)(6) of the Bankruptcy Code
or any successor provision thereto.

         Section 4.2 Additional Rent. Tenant shall pay, without offset for any
reason, except as herein expressly provided, all payments of Additional Rent
payable by Tenant to Landlord hereunder. If Tenant fails to pay any Additional
Rent, Landlord shall have all the rights and remedies for failure to pay Base
Rent. The parties hereto acknowledge and agree that the obligations owing by
Tenant under this Section 4.2 are rent reserved under this Lease, for all
purposes hereunder, and are rent reserved within the meaning of Section
502(b)(6) of the Bankruptcy Code or any successor provision thereto.

         Section 4.3 Net Lease. Landlord and Tenant intend that the rent payable
under this Lease shall be net Base Rent and Additional Rent to Landlord as
described herein during the Lease Term. Landlord and Tenant have attempted in
this Lease to set forth their respective responsibilities for all costs of
owning, operating, maintaining, repairing, replacing and rebuilding Landlord's
Property, with Landlord to be responsible for the costs of Landlord's Work, the
costs of Landlord's Restoration Work, the costs of remediation of contamination
by Hazardous Materials which is the responsibility of Landlord pursuant to
Section 6.6(a), the costs excluded from Operating Costs under items (c), (d),
(f), (g), (h), (i), (j), (l), (m), (n) and (p) of the definition of Operating
Costs, and any other costs which are the responsibility of Landlord under the
terms of this Lease, and Tenant to be responsible for Tenant's Share of Taxes,
Insurance Costs and Operating Costs, Tenant's Electricity Costs, other utility
costs, the costs of Tenant's Work, the costs of maintaining and repairing the
Premises, the costs of any alterations or additions to the Premises, the costs
of liability insurance, the costs of insurance with respect to Tenant's Work or
any alterations or additions to the Premises, the costs of Tenant's Restoration
Work, the costs of remediation of contamination by Hazardous Materials which is
the responsibility of Tenant pursuant to Section 7.7, and any other costs which
are the responsibility of Tenant under the terms of this Lease. The parties
intend that neither party is to be responsible to the other for the costs of
remediation of contamination by Hazardous Materials except as herein provided.
In the event that this Lease does not expressly assign responsibility for any
particular cost of owning, operating, maintaining, repairing, replacing or
rebuilding Landlord's Property to Landlord or Tenant, then such cost shall be
assigned to, or allocated as between, Landlord and/or Tenant in accordance with
customary practice in the Boston area for single-user building net leases
similar to this Lease. In the further event that Landlord and Tenant are unable
to agree as to the assignment or allocation of responsibility for any particular
cost under the immediately preceding sentence, then, at the written request of
either party, such assignment or allocation shall be determined by arbitration
pursuant to Section 14.2.

                                      -13-

<PAGE>

         Section 4.4 Taxes.

                  (a)      Tenant shall pay to Landlord, as Additional Rent, an
amount equal to Tenant's Share of Taxes. Tenant's Share of Taxes shall be
estimated in good faith by Landlord at the beginning of each Tax Fiscal Year,
and shall be payable by Tenant to Landlord in equal estimated monthly
installments together with the payment of Base Rent, subject to readjustment
when the actual amount of Taxes is determined. After readjustment, any shortage
shall be due and payable by Tenant within 15 days of demand by Landlord and any
excess shall, unless an Event of Default has occurred, be credited against
Additional Rent obligations next coming due, or refunded if the Lease Term has
ended and Tenant has no further obligations to Landlord. If the taxing authority
provides an estimated tax bill, then monthly installments of Taxes shall be
based thereon until the final tax bill is ascertained. Landlord shall furnish to
Tenant, upon receipt, a copy of any tax bill or any estimated tax bill.

                  (b)      If, after Tenant shall have made any payment under
this Section 4.4, Landlord shall, as a result of an abatement of Taxes, by final
determination of legal proceedings, settlement or otherwise, receive a refund
(the "Refund") of any portion of the Taxes paid on account of any Tax Fiscal
Year in which such payments shall have been made Landlord shall, within thirty
(30) days after receiving the Refund, pay to Tenant (unless there then exists an
uncured Event of Default) an amount equal to Tenant's Share of the Refund, which
payment to Tenant shall be appropriately adjusted if Tenant's Share of Taxes
covered a shorter period than covered by the Refund.

                  (c)      Tenant shall have the right, at Tenant's cost, to
pursue an abatement, reduction or contest of Taxes, provided that (i) Tenant
shall give Landlord the opportunity, at Landlord's sole expense, to participate
to such extent as Landlord may desire in such proceedings, and (ii) Tenant will
not settle any such proceedings without the written consent of Landlord, which
Landlord will not unreasonably withhold, condition or delay. Subject to the
foregoing, Tenant shall have control of all tax abatement proceedings.

                  (d)      If the Commencement Date is not on July 1, or the
expiration or termination of this Lease is not on June 30, Tenant's obligation
in respect of Taxes shall be prorated. If the final tax bill for the Tax Fiscal
Year in which such expiration or termination of this Lease occurs shall not have
been received by Landlord, then within thirty (30) days after the receipt of the
tax bill for such Tax Fiscal Year, Landlord and Tenant shall make appropriate
adjustments of estimated payments.

                  (e)      Without limiting the generality of the foregoing,
Tenant shall pay all rent and personal property taxes attributable to its signs
or any other personal property including but not limited to its trade fixtures,
the existing or any future floor coverings, wall treatments and light fixtures
in the Premises.

         Section 4.5 Insurance Costs. Tenant shall pay to Landlord, as
Additional Rent, an amount equal to Tenant's Share of Insurance Costs. Tenant's
Share of Insurance Costs shall be estimated in good faith by Landlord at the end
of each calendar year, and shall be payable by Tenant to Landlord in equal
estimated monthly installments, together with the Base Rent, subject to
readjustment from time to time as reasonably determined by Landlord and also
when actual Insurance Costs are determined. After a readjustment, any shortage
shall be due and payable by Tenant within 15 days of demand by Landlord and any
excess shall, unless there then exists an uncured Event of Default, be credited
against Additional Rent obligations next coming due, or refunded if the Lease
Term has ended and Tenant has no further obligations to Landlord. Landlord shall
provide Tenant upon request with reasonable supporting documentation for the
Insurance Costs for the prior calendar year; provided that such request is
received by Landlord within six (6) months after the end of the calendar year to
which such Insurance Costs relate.

         Section 4.6 Operating Costs. Tenant shall pay to Landlord, as
Additional Rent, amounts equal to Tenant's Share of Operating Costs. Tenant's
Share of Operating Costs shall be estimated in good faith by Landlord at the end
of each calendar year, and shall be payable by Tenant to Landlord in equal
estimated monthly installments, together with the Base Rent, subject to
readjustment from time to time as determined by Landlord and also when actual
Operating Costs are determined. After a readjustment, any

                                      -14-

<PAGE>

shortage shall be due and payable by Tenant within 15 days of demand by Landlord
and any excess shall, unless there then exists an uncured Event of Default, be
credited against Additional Rent obligations next coming due, or refunded if the
Lease Term has ended and Tenant has no further obligations to Landlord.

         Section 4.7 Payment for Electricity. Landlord shall cause the Premises
to be separately metered or submetered for electrical use including, without
limitation, with respect to all variable air volume ("VAV") boxes and
pre-heaters, HVAC equipment and systems, lighting and outlets serving the
Premises. If the Premises are separately metered or submetered such that the
utility provider bills Tenant directly for Tenant's Electricity Costs, Tenant
shall pay Tenant's Electricity Costs directly to the utility provider promptly
as due and payable. If the Premises are separately metered or submetered such
that the utility provider bills Landlord for electric service provided to the
Building and Landlord bills Tenant for Tenant's Electricity Costs, Tenant shall
pay Landlord's bills for Tenant's Electricity Costs within ten (10) days after
receipt, it being intended that, if Landlord bills Tenant for Tenant's
Electricity Costs promptly after receipt of the bill of the utility provider,
and Tenant pays Landlord's bill for Tenant's Electricity Costs within ten (10)
days after receipt, Landlord will receive payment of Tenant's Electricity Costs
prior to the time that Landlord is required to pay the corresponding bill of the
utility provider; provided, however, that if the timing of such billing and
payment cycle is not such as will result in Landlord receiving payment of
Tenant's Electricity Costs prior to the time that Landlord is required to pay
the corresponding bill of the utility provider, Landlord may bill Tenant monthly
for Tenant's Electricity Costs on an estimated basis, with periodic
reconciliation of overpayments and underpayments of actual Tenant's Electricity
Costs.

         Section 4.8 Tenant's Audit Rights. Annually, not later than the date
120 days after the end of each calendar year during the Lease Term, Landlord
shall furnish to Tenant a report setting forth in reasonable detail the
Operating Costs, Insurance Costs, and Taxes for the immediately preceding
calendar year (in the case of Operating Costs and Insurance Costs) or Tax Fiscal
Year (in the case of Taxes). Tenant shall have the right to audit Landlord's
books and records relating to Operating Costs, Insurance Costs and/or Taxes with
respect to the period covered by each such report within two (2) years after
receipt of such report (such two (2) year period being called the "Audit
Period") by delivering a notice of its intention to perform such audit to
Landlord. Any such audit shall be performed at Landlord's office in Needham,
Massachusetts, and Landlord shall make such books and records available within
ten (10) Business Days after receiving Tenant's written notice. If, as a result
of such audit, Tenant believes that it is entitled to receive a refund of any
Additional Rent paid by Tenant in respect of Operating Costs, Insurance Costs
and/or Taxes, Tenant shall deliver to Landlord, no later than thirty (30) days
after expiration of the Audit Period, a notice demanding such a refund, together
with a statement of the grounds for each such demand and the amount of each
proposed refund. If, as a result of such audit, it is established that the
Additional Rent charged to Tenant for the period in question was overstated,
Landlord shall refund to Tenant within thirty (30) days after such overstatement
is established the amount of the overstatement; and, if the Additional Rent was
overstated by more than five percent (5%), Landlord shall pay Tenant interest on
the refund at the Applicable Rate from the payment of the overstated amount by
Tenant to the date of the refund. The cost of any such audit shall be paid by
Tenant, except that, if it is established that the Additional Rent charged to
Tenant for the period in question was overstated by more than five percent (5%),
the reasonable cost of such audit shall be paid or reimbursed to Tenant by
Landlord. An overstatement shall not be deemed to exist due to a Refund. Any
audit shall be performed by either (a) Tenant's regular employees, (b) an
independent accounting firm whose compensation is not, directly or indirectly,
contingent in whole or in part on the results of the audit, or (c) an attorney
or independent consultant retained by Tenant whose compensation is not, directly
or indirectly, contingent in whole or in part on the results of the audit. If
Landlord determines that a report previously furnished by Landlord was in error,
Landlord may furnish a corrective or supplemental report to Tenant, and if such
corrective or supplemental report results in increased Additional Rent, the
Audit Period for the year covered by such report shall be extended for one (1)
year after Landlord furnishes the corrective or supplemental report.
Notwithstanding the foregoing, if Landlord has not billed Tenant on account of
any Operating Cost, Insurance Cost or Taxes on or before the date two (2) years
after the end of the calendar year in which such cost was incurred by Landlord,
then Landlord shall be conclusively deemed to have waived any obligation on the
part of Tenant to pay for such cost, provided that such two (2) year period
shall be extended for such period of time, if any, that delay in billing by
Landlord is attributable to a delay in Landlord's receipt of a bill from a third
party.

                                      -15-

<PAGE>

                                    ARTICLE V
                                 USE OF PREMISES

         Section 5.1 Permitted Use. Tenant shall not use or occupy the Premises
for any purpose other than the Permitted Use. Landlord will cooperate with
Tenant in pursuing any change in zoning, any variance, special permit or other
similar relief and any permit or approval with respect to Landlord's Property as
Tenant reasonably requires to allow a Permitted Use, and, at Tenant's request
and cost, will sign applications in connection therewith in its capacity as fee
simple owner of Landlord's Property; provided, however, that Landlord shall not
be required to sign any application for a change in zoning which, under the
terms of any mortgage on Landlord's Property, would require the consent of the
mortgagee, without the consent of the mortgagee, but Landlord shall use
commercially reasonable efforts to obtain such consent. With respect to any
future mortgage on Landlord's Property, Landlord will negotiate in good faith to
attempt to include a provision to the effect that the mortgagee will not
unreasonably withhold its consent to a change in zoning to permit a Permitted
Use.

         Section 5.2 Restrictions on Use. Tenant shall use the Premises in a
careful, safe and proper manner, shall not commit or suffer any waste on or
about Landlord's Property, and shall not make any use of Landlord's Property
which is prohibited by or contrary to any Legal Requirements, or which would
cause a public or private nuisance. Tenant shall comply with and obey all Legal
Requirements which in any way affect the use of Landlord's Property. Tenant, at
its own expense, shall obtain any and all permits, approvals and licenses
necessary for use of the Premises, except that Landlord shall obtain all
building permits and approvals required for the performance of Landlord's Work.
Tenant shall not overload the floors or other structural parts of the Building;
and shall not commit or suffer any act or thing on Landlord's Property which is
illegal or which unreasonably disturbs BAE. Tenant shall not do or permit to be
done any act or thing on Landlord's Property which will invalidate or be in
conflict with any insurance policies covering Landlord's Property. If, due to
any use of the Premises or activity of Tenant in or about Landlord's Property,
the Insurance Costs are increased, Tenant shall pay Landlord the amount of such
increase caused by the failure of Tenant to comply with the provisions of this
Section. Tenant shall cause any fire lanes located on Landlord's Property to be
kept free of all parking associated with its business or occupancy and in
compliance with all applicable regulations. Tenant acknowledges that BAE may
maintain, during the term of its lease, a "clean room" in its premises, which
clean room may be designed and constructed to maintain an atmosphere free from
any dust, noise, light and/or other external stimuli which might interfere with
BAE's research and development operations therein ("Clean Room Operations").
Tenant shall refrain from causing any unusual noise, vibrations, dust or other
conditions which may interfere with BAE's Clean Room Operations, including
during the performance of the Tenant Improvements Work. Tenant will coordinate
Tenant's Work with BAE to minimize disruptions, including using diligent efforts
to coordinate Tenant's Work that could result in vibrations, dust, utility
outages or noise that might affect BAE's Clean Room Operations. Provided BAE
informs Tenant of BAE's critical testing schedule periods, Tenant will use
diligent efforts to schedule Tenant's Work to avoid such critical testing
periods, to the extent practicable without materially extending the schedule for
the completion of Tenant's Work.

         Section 5.3 Hazardous Materials. Tenant in its use of the Premises
will not use, store, discharge, release, or permit the presence of any Hazardous
Materials on Landlord's Property, except in a manner and in quantities
customarily incidental to and consistent with the Permitted Use(s) and in
compliance with all applicable Environmental Laws.

                                   ARTICLE VI
                               LANDLORD'S SERVICES

         Section 6.1 Landlord's Services. Landlord shall furnish to the Building
the services set forth below in this Section 6.1, subject to the conditions
stated in this Lease. The cost of certain of these services are to be (i) paid
by Tenant, as provided in this Lease, or (ii) included in Operating Costs,
Insurance Costs or Taxes, as applicable.

                                      -16-

<PAGE>

                  (a)      Exterior of Building and Mechanical Elements.
Landlord shall keep the exterior of the Building in good condition and repair
the exterior and mechanical elements of the Building, including the roof, and
the utility lines and systems outside the Building (except to the extent those
utility lines or systems are the property or responsibility of the applicable
utility company). Landlord will make any changes in the Base Building Work
required by any changes in Legal Requirements after the date of this Lease.

                  (b)      Systems. Subject to Tenant's obligations under
Section 7.4, Landlord shall operate, maintain and repair the HVAC system, the
plumbing system and the electrical system of the Building. Landlord shall
provide HVAC services to the Premises to heat and cool the Premises at
temperatures in accordance with ASHRAE standards.

                  (c)      Water and Sewer. Cold and hot water at standard
Building temperatures will be available for ordinary drinking, cleaning,
sanitary and lavatory purposes. If Tenant requires or uses water for any purpose
in addition to such ordinary purposes, Landlord may install a water meter at
Tenant's expense and thereby measure Tenant's water consumption. Tenant shall
pay Landlord, as Additional Rent, on demand the cost of all water consumption so
metered, including without limitation any and all sewer rents, taxes or levies
assessed by any governmental authority or utility in connection with metered
consumption. Such meter and installation equipment shall be maintained in good
working order and repair at Tenant's expense.

                  (d)      Elevator. Landlord will maintain two (2) automatic
operatorless elevators in operation in the Building.

                  (e)      Exterior. Landlord shall maintain and keep the
portions of Landlord's Property outside of the Building in good condition and
repair.

                  (f)      Taxes. Landlord shall pay all Taxes levied upon or
with respect to the Landlord's Property.

                  (g)      Insurance. Landlord shall procure and maintain in
full force and effect so-called "all risk" fire, casualty and extended coverage
insurance with respect to Landlord's Property, with vandalism and malicious
mischief endorsements and replacement cost coverage, liability insurance with
respect to Landlord's Property, and rent loss insurance, all in such amounts,
with such deductibles and with such other insurance upon or with respect to
Landlord's Property as is consistent with insurance maintained by landlords of
properties of a type and character comparable to Landlord's Property in the
Boston area or otherwise required by Landlord's lender consistent with the
customary practices of institutional lenders. However, Landlord will not
maintain "all risk" fire, casualty and extended coverage insurance with respect
to the improvements to the Premises constructed by Tenant pursuant to Section
3.3 or Section 7.5, which insurance will be maintained by Tenant as provided in
Section 7.9.

         Section 6.2 Tenant's Rights Regarding Services. Notwithstanding the
provisions of Section 6.1 to the contrary, Tenant may, at Tenant's option
exercisable by written notice given by Tenant to Landlord from time to time, (a)
at Tenant's sole cost and expense, assume from Landlord the performance of any
of the services to be provided by Landlord pursuant to Section 6.1(a)-(e), in
which event Landlord shall have no obligation to Tenant for such assumed
services and Tenant shall be responsible for the performance of such assumed
services, and/or (b) decline any of such services provided by Landlord pursuant
to Section 6.1(a)-(e) as are not customarily provided to properties of
comparable type and character in the Boston area, in which event Landlord shall
have no obligation to Tenant for such declined services; provided, however, that
Tenant may not assume or decline the performance of such services with respect
to exterior portions of Landlord's Property or which affect the Second
Additional Premises until the Second Expansion Delivery Date.

         Section 6.3 Extraordinary Use. Except for Landlord's Work, Landlord
shall have no obligation to make the Premises suitable for Tenant's use. Any
additional capacity or structural support which may be necessary and/or
appropriate in connection with the conduct of Tenant's business and/or Tenant's
use of

                                      -17-

<PAGE>

the Premises shall be installed and maintained at the sole cost and expense of
Tenant subject to, and in accordance with, the applicable provisions of this
Lease.

         Section 6.4 Interruption; Delay. Landlord shall have no responsibility
or liability for failure or interruption of any such repairs or services
referred to in this Article VI, or for any interruption in utility services,
caused by breakage, accident, strikes, repairs, inability after exercise of
reasonable diligence to obtain supplies or otherwise furnish services, or for
any cause or causes beyond the reasonable control of Landlord (but Landlord, in
respect of those matters for which Landlord is responsible, will use reasonable
efforts to restore such services or make such repairs as soon as possible), nor
in any event for any indirect or consequential damages; and failure or omission
on the part of Landlord to furnish such service or make such repair shall not be
construed as an eviction of Tenant, nor render Landlord liable in damages, nor
entitle Tenant to an abatement of Base Rent or Additional Rent, nor release
Tenant from the obligation to fulfill any of its covenants under this Lease,
except as provided in Articles X and XI with respect to eminent domain and
damage by fire or other casualty.

         Section 6.5 Additional Services. Should Tenant request any additional
services, or services beyond the noted hours for such services, Tenant agrees to
pay to Landlord as Additional Rent therefor Landlord's costs for providing such
service, plus an additional fifteen (15%) percent as an administrative fee,
within fifteen days of Landlord's billing Tenant therefor.

         Section 6.6 Remediation of Hazardous Materials.

                  (a)      If (i) all or any portion of Landlord's Property is
contaminated by Hazardous Materials in violation of Environmental Laws and such
contamination either existed prior to the date on which Landlord achieves
Partial Completion or was caused by Landlord or Landlord's contractors or
agents, and (ii) such contamination materially affects the practical use and
enjoyment of a substantial portion of the Premises by Tenant, then Landlord
shall be responsible to Tenant to act diligently to remediate or otherwise
address such contamination so the violation of Environmental Laws caused thereby
ceases to exist ("Remediate"). If, by reason of a contamination of Landlord's
Property by Hazardous Materials in violation of Environment Laws for which
Landlord is responsible to Tenant under the above provisions of this Section, a
substantial portion of the Premises is not tenantable by Tenant for the
Permitted Use, and if Landlord defaults in the performance of its obligations
under this Section (subject to the notice and cure provision set forth in
Section 12.7), Tenant may either (x) take reasonable steps to Remediate such
contamination, in which case Tenant may setoff the reasonable costs thereof
against the Base Rent and Additional Rent next coming due, or (y) terminate this
Lease; provided, however, that as a condition of such rights of Tenant to
exercise self-help and setoff, or to terminate this Lease, such rights shall
either have been conceded by Landlord or Landlord's default under this Section
(subject to the notice and cure provision set forth in Section 12.7) shall have
been determined by arbitration pursuant to Section 14.2 and, if such default is
determined by arbitration, Landlord shall have failed to commence to cure such
default within thirty (30) days after such determination or shall fail
thereafter to diligently complete the cure.

                  (b)      If, by reason of a contamination of Landlord's
Property by Hazardous Materials in violation of Environmental Laws for which
Landlord is not responsible to Tenant under Section 6.6(a) and which is not the
responsibility of Tenant under Section 7.7 (for example, the migration of
Hazardous Materials to Landlord's Property from an adjacent property), a
substantial portion of the Premises is not tenantable by Tenant for the
Permitted Use, and Landlord, in its sole discretion, undertakes in writing,
within thirty (30) days after Tenant gives Landlord written notice thereof, the
obligation to Remediate such contamination, then the respective rights and
obligations of Landlord and Tenant with respect to such contamination shall be
as set forth in Section 6.6(a). If, by reason of contamination described in the
immediately preceding sentence, a substantial portion of the Premises is not
tenantable by Tenant for the Permitted Use, but Landlord, in its sole
discretion, fails or refuses to undertake in writing, within thirty (30) days
after Tenant gives Landlord written notice thereof, the obligation to Remediate
such contamination, Tenant may (x) at Tenant's cost (but without waiving any
rights Tenant may have against potentially liable parties), take reasonable
steps to Remediate such contamination, or (y) terminate this Lease; provided,
however, that as a condition of such right of Tenant to terminate this Lease,
such right shall either have

                                      -18-

<PAGE>

been conceded by Landlord or determined by arbitration pursuant to Section 14.2
and, if such right is determined by arbitration and the contamination can
reasonably be Remediated within nine (9) months after commencement of such
remediation, Landlord may, in its sole discretion, avoid such termination by
undertaking in writing the obligation, and commencing, to Remediate the
contamination within thirty (30) days after such determination and thereafter
diligently pursuing and completing such remediation, in any event making the
Premises tenantable by Tenant for the Permitted Use within nine (9) months after
commencement of such remediation.

                  (c)      In the event that the provisions of Section 6.6(a) or
Section 6.6(b) shall become applicable, the Base Rent and Tenant's Share of
Taxes, Insurance Costs and Operating Costs shall be abated or reduced
proportionately during any period in which, by reason of the contamination,
there is substantial interference with the operation of the business of Tenant
in the Premises, having regard to the extent to which Tenant may be required to
discontinue its business in the Premises, and such abatement or reduction may be
adjusted from time to time based on the extent of the interference with Tenant's
operations.

                                   ARTICLE VII
                          CERTAIN OBLIGATIONS OF TENANT

         Section 7.1 Rent. Tenant will promptly pay the Base Rent and Additional
Rent (including without limitation any and all sums payable by Tenant to the
applicable provider of utilities) at the time and in the manner provided for in
this Lease.

         Section 7.2 Utilities; Waste Removal. In addition to electricity which
is the subject of Section 4.7 and water and sewer which is the subject of
Section 6.1(c), Landlord reserves the right to cause any or all of Tenant's
other utilities to be separately metered or submetered. In the event that Tenant
is billed directly by a utility provider, then Tenant shall pay such bills
directly to such utility provider prior to their due dates. In the event
Tenant's utility usage is separately metered or sub-metered by Landlord, Tenant
shall pay the billed charges therefor to Landlord as Additional Rent within
fifteen (15) days of Landlord's billing therefor. In the event Tenant's utility
usage is not separately metered, then, except for Tenant's Electricity Costs,
Tenant shall pay for such usage as a part of the Operating Costs. Tenant agrees
that its use of electric current shall never exceed the capacity of existing
feeders, risers and wiring installations in the Building. Tenant shall be solely
responsible for removing its trash, debris and waste from Landlord's Property
and proper disposal and/or recycling of same.

         Section 7.3 No Waste. Tenant shall not overload, damage or deface the
Premises nor shall it suffer or permit the same to be done, nor shall it commit
any waste.

         Section 7.4 Maintenance; Repairs; and Yield-Up. Tenant will keep the
Premises neat and clean and maintain the same in such repair and condition as
the same now are or hereafter may be put. Tenant's obligation to so maintain and
repair the Premises shall apply to all of the Premises, including, without
limitation, all doors, glass, fixtures, interior walls, floors and ceilings.
There is excepted from Tenant's obligations under this Section 7.4 only (a)
damage due to fire or other casualty ("Casualty"), (b) repairs and work which
are otherwise the specific responsibility of Landlord hereunder, and (c)
reasonable wear and tear. At the end of the Lease Term or sooner termination of
this Lease, Tenant shall peaceably surrender and deliver up the Premises to
Landlord, leaving all erections, alterations and additions to the Premises in
such repair and condition, broom clean, with all utilities safely capped, and
removing all signs and lettering and all trade fixtures, personal property,
goods and effects belonging to Tenant or anyone claiming through or under
Tenant. Without limiting the foregoing, Tenant and not Landlord shall be solely
responsible for the maintenance and repair of the Premises and all the pipes,
wires, conduits, utilities and other installations that serve only the Premises.
Tenant shall cause all maintenance and repair work to conform to Legal
Requirements. Tenant shall keep the Premises clear of all filth, trash and
refuse. If at any time there exists an uncured Event of Default as to Tenant's
obligations under the above provisions of this Section, then Landlord will have
the right (but not the obligation), without waiving any such Event of Default by
Tenant, to cause such obligations to be performed upon not less than three (3)
days' prior written notice to Tenant (or a shorter period of prior written
notice, or a contemporaneous written notice, if

                                      -19-

<PAGE>

appropriate in Landlord's judgment in light of the nature of Tenant's
obligations to be performed), and if Landlord causes any of such obligations to
be performed, the costs and expenses reasonably incurred by Landlord in
connection therewith shall be due and payable by Tenant to Landlord as
Additional Rent upon demand. Tenant shall be responsible for janitorial services
for the Premises and all restroom facilities located therein.

         Section 7.5 Alterations by Tenant. Tenant will not make any change in,
or addition to, the Premises without first obtaining, on each occasion,
Landlord's consent in writing, which consent shall not be unreasonably withheld,
conditioned or delayed, and then only at Tenant's expense, and in a lawful
manner subject to (a) maintenance of insurance in form and substance
satisfactory to Landlord and (b) compliance with Sections 7.9 and 7.11;
provided, however, that Tenant may, upon prior written notice to, but without
the requirement of consent of, Landlord, make the following alterations or
additions ("Permitted Alterations"): (i) alterations or additions which (1) are
non-structural, (2) do not penetrate or otherwise affect the roof of the
Building, (3) do not materially adversely affect Building systems, and (4) are
not reasonably anticipated to cost more than $100,000 in any single instance or
related instances, and (ii) alterations which are purely cosmetic in nature,
such as paint, wallcovering, carpeting and the like, regardless of cost. Any
such alteration or addition shall be consistent with the Permitted Use and shall
be made only after duly obtaining (and providing to Landlord copies of) all
required permits and licenses from all governmental authorities. Tenant will
deliver to Landlord in writing a schedule setting forth the details and location
of all such proposed alterations or additions and detailed plans and
specifications. The contractor(s) performing the work other than Permitted
Alterations shall be subject to Landlord's approval, which shall not be
unreasonably withheld, conditioned or delayed. All approved repairs,
installations, alterations, additions or other improvements made by Tenant shall
be made in a good and workmanlike manner and in such a way that BAE will not
suffer unreasonable inconvenience or interference as reasonably determined by
Landlord. Tenant agrees not to construct or permit the installation of
partitions and/or other obstructions in the Premises which might interfere with
Landlord's free access to the Premises or Building, or impede the free flow of
air to and from air vents and other portions of the HVAC systems in the
Building. Except as herein otherwise provided, all installations, alterations,
additions or improvements in or to the Premises shall become the property of
Landlord and shall remain upon, and be surrendered with, the Premises at the end
of the Lease Term or sooner termination of this Lease. Without limiting the
generality of the foregoing, the provisions of this Section 7.5 shall be
applicable to Tenant's Work.

         Section 7.6 Trade Fixtures and Equipment. Any trade or specialty
fixtures installed in, or attached to, the Premises by, and at the expense of,
Tenant, shall remain the property of Tenant. Tenant shall have the right, at any
time and from time to time during the Lease Term, to remove any and all of its
trade or specialty fixtures, which it may have installed in, or attached to, the
Premises, during the Lease Term. In addition, at the end of the Lease Term or
sooner termination of this Lease, Tenant shall remove all of Tenant's trade or
specialty fixtures unless Landlord gives Tenant a written waiver for same;
provided that Tenant may leave the wiring for its trade or specialty fixtures as
long as such wiring is concealed and is appropriately capped. At any time that
Tenant removes any of its trade or specialty fixtures, Tenant shall promptly
repair Landlord's Property as a result of any damage to, or destruction of,
Landlord's Property caused by the removal of any of its trade or specialty
fixtures.

         Section 7.7 Compliance with Laws. Tenant, in its use of the Premises
and at its sole expense, shall comply with all Legal Requirements, including,
without limitation, all Legal Requirements related to the use, storage,
discharge, release, removal or existence of Hazardous Materials. Tenant agrees
that the Premises shall be kept in a sanitary and safe condition in accordance
with all Legal Requirements.

         Section 7.8 Contents at Tenant's Risk. All inventory, equipment, goods,
merchandise, furniture, fixtures and property of every kind which may be on or
about the Premises shall be at the sole risk and hazard of Tenant, and if the
whole or any part thereof shall be destroyed or damaged by fire, water or
otherwise, or by the use or abuse of water or by the leaking or bursting of
water pipes, or by rising water, or by roof or other structural leak, or by loss
of electrical service, or in any other way or manner, no part of such loss or
damage shall be charged to or borne by Landlord in any case whatsoever, except
that the foregoing shall not exculpate the Landlord from liability for its own
negligent acts or omissions. Tenant

                                      -20-

<PAGE>

agrees to maintain full and adequate insurance coverage on all of its property
at the Premises and in the remainder of Landlord's Property, including physical
damage, theft and business interruption insurance, or Tenant shall be a
self-insurer thereof, in which case Tenant shall so advise Landlord in writing
and shall be fully responsible for all such damage, and shall indemnify and save
harmless Landlord from any loss, cost, expense, damage or liability resulting
from Tenant's failure to have such insurance as required in this Lease. Such
insurance on Tenant's property shall contain a waiver of subrogation clause in
favor of Landlord, or shall name Landlord as an additional insured for the sole
purpose of preventing a subrogation claim against Landlord. If Tenant is a
self-insurer, in whole or in part, Landlord shall be entitled to the same
benefits it would have enjoyed had insurance covering the loss in full with a
waiver of subrogation clause been in effect, or as if the Landlord has been
named on insurance covering the loss in full as an additional insured for the
purpose of preventing a subrogation claim.

         Section 7.9 Exoneration; Indemnification and Insurance.

                  (a)      Tenant will exonerate, indemnify, defend, save and
hold harmless Landlord (and any and all Persons claiming by, through or under
Landlord) from and against all liabilities and claims for personal injury and
property damage, and costs and expenses, including legal fees, in connection
therewith arising from: (i) any breach of this Lease by Tenant or any Tenant
Invitee or other Person claiming by, through or under Tenant; and/or (ii) any
act, omission or negligence of any Tenant Invitee, or arising from any accident,
injury or damage occurring in, on or about Landlord's Property, which such
accident, damage or injury results from the negligence or misconduct on the part
of any Tenant Invitee; provided, however, that the above provisions of this
sentence shall not exculpate Landlord from its own negligence or that of its
contractors or agents. This exoneration, indemnification and hold harmless
agreement shall survive the termination of this Lease.

                  (b)      Landlord shall not be responsible or liable to
Tenant, or to those Persons claiming by, through or under Tenant, for any loss
or damage that may be occasioned by or through the acts or omissions of Persons
occupying or using adjoining premises or any part of Landlord's Property, or
otherwise, or for any loss or damage resulting to Tenant or those Persons
claiming by, through or under Tenant, or its or their property, except that the
foregoing shall not exculpate the Landlord from liability for its own negligence
or that of its contractors or agents.

                  (c)      From and after any pre-term occupancy by Tenant, if
any allowed by Landlord, and thereafter during the Lease Term and any period of
holding over, Tenant shall maintain in full force and effect a policy of
commercial general liability insurance under which Landlord (and its designees)
and Landlord's mortgagee(s) are named as additional insureds. Each such policy
shall be non-cancelable with respect to Landlord without thirty (30) days prior
written notice to Landlord (except in the case of non-payment of premium, in
which event the notice period shall be ten (10) days), and Tenant shall deliver
to Landlord prior to any pre-term occupancy and thereafter at least thirty (30)
days prior to the expiration of any then effective coverage a satisfactory
written certificate of insurance coverages or the renewal or replacement of such
coverages. The minimum limits of liability of such insurance shall be One
Million Dollars ($1,000,000.00) combined single limits for bodily injury and
property damage, each occurrence, and One Million Dollars ($1,000,000.00) limits
for personal injury, together with an overall umbrella coverage of an additional
Five Million Dollars ($5,000,000.00), subject to adjustment from time to time
during the Lease Term as reasonably required by Landlord consistent with limits
for liability insurance customarily maintained on properties of comparable type
and character in the Boston area. Any contractor engaged by Tenant to do any
work at or furnish any materials to be incorporated into the Premises, whether
or not included in Tenant's Work, shall deliver to Landlord evidence of the
Contractor's commercial general liability insurance, worker's compensation
insurance and automobile insurance each reasonably acceptable to Landlord.

                  (d)      Tenant shall maintain in full force and effect
so-called "all risk" fire, casualty and extended coverage insurance, with
replacement cost coverage, with respect to the improvements to the Premises
constructed by Tenant pursuant to Section 3.3 or Section 7.5. Tenant shall
provide Landlord with a certificate evidencing such insurance and containing a
provision that the same may not be canceled without thirty (30) days' prior
written notice to Landlord and Landlord's lender (except in the case of
non-

                                      -21-

<PAGE>

payment of premium, in which event the notice period shall be ten (10) days),
and Tenant shall provide Landlord and Landlord's lender with such a certificate
prior to the Commencement Date and thereafter at least thirty (30) days prior to
the expiration of any such coverage.

                  (e)      All insurance requirements imposed upon Tenant or its
contractors under this Lease shall be subject to the requirements that the forms
of coverage be reasonably acceptable to Landlord and that the insurers providing
the insurance be licensed in the Commonwealth of Massachusetts, be in sound
financial condition, carry an A or better Best's rating, and be reasonably
acceptable to Landlord.

         Section 7.10 Landlord's Access. Landlord and its representatives shall
have the right without charge to it and without reduction in Base Rent or
Additional Rent, upon reasonable prior notice, at reasonable times and in such
manner as shall not unreasonably interfere with Tenant's business, to enter the
Premises for the purposes of showing the Premises to prospective purchasers,
tenants (during the last year of the Lease Term) and lenders and investigating
repair or maintenance problems and making such repairs or changes as Landlord is
required or permitted to make hereunder. In case of an emergency, whether
resulting from circumstances in the Premises or elsewhere on Landlord's
Property, Landlord or its representatives may enter the Premises (forcibly, if
necessary) at any time to take such measures as may be needed to cope with such
emergency.

         Section 7.11 No Liens. Tenant shall not permit any mechanics',
laborers' or materialmen's liens to stand against Landlord's Property or
Tenant's interests in the Premises, this Lease, or the estate created hereby for
any labor or materials furnished to Tenant or claimed to have been furnished to
Tenant in connection with work of any character performed or claimed to have
been performed in or on the Premises by or at the direction or sufferance of
Tenant. Landlord may condition the right of Tenant to do Tenant's work or to do
any other work which could result in a lien upon Landlord's Property or Tenant's
interests in the Premises, this Lease, or the estate created hereby on the
delivery and recording of statutory lien bonds or indemnities satisfactory to
Landlord. Tenant shall have the right to record a statutory lien bond.

                                  ARTICLE VIII
                            SUBLETTING AND ASSIGNMENT

         Section 8.1 Subletting and Assignment.

                  (a)      Except as set forth in Section 8.1(b), Tenant shall
not assign, mortgage, pledge or encumber this Lease nor sublet all or any part
of the Premises, nor permit or allow the use of all or any part of the Premises
by third party users, such as concessionaires, without, on each occasion,
obtaining Landlord's written consent thereto, which consent shall not be
unreasonably withheld, conditioned or delayed. In connection with a proposed
sublease or assignment for which Tenant requests Landlord's consent pursuant to
this Section 8.1(a), Tenant shall furnish to Landlord (i) a copy of the proposed
sublease or assignment (or, if the proposed sublease or assignment has not yet
been negotiated, a summary of the material business terms of the sublease or
assignment), (ii) financial and other information about the subtenant or
assignee, and the proposed use of the Premises by the subtenant or assignee, as
reasonably requested by Landlord to assess the creditworthiness of the subtenant
or assignee, to determine whether the subtenant or assignee, and its proposed
use, is of a character consistent with the operation of a building of the type
and character of the Building, and to determine whether the proposed use of the
subtenant or assignee is a Permitted Use. Tenant shall pay to Landlord all of
Landlord's reasonable expenses arising out of a proposed sublease or assignment,
including, without limitation, a legal retainer in a reasonable amount required
by Landlord in advance of Landlord's review of any of Tenant's documentation in
connection therewith. Tenant may not assign this Lease nor sublet all or any
part of the Premises at any time that there exists an uncured Event of Default.
Any proposed sublease must prohibit any assignment of the sublease or any
sub-sublease of any portion of the Premises without the prior written consent of
Landlord, which consent shall be granted or denied on terms consistent herewith.

                                      -22-

<PAGE>

                  (b)      (i)      Notwithstanding anything to the contrary in
Section 8.1(a), but subject to Section 8.1(c), Tenant may, upon at least ten
(10) Business Days prior written notice to, but without the requirement of
consent by, Landlord, sublease all or any portion of the Premises to one or more
Tenant Affiliates, so long as (A) Tenant furnishes to Landlord a copy of the
sublease and evidence reasonably satisfactory to Landlord that the sublease is
permitted under this Section 8.1(b)(i); (B) the subtenant's proposed use is a
Permitted Use; (C) there does not then exist an uncured Event of Default; (D)
the sublease prohibits any assignment of the sublease or any sub-sublease of any
portion of the Premises without the prior written consent of Landlord, which
consent shall be granted or denied on terms consistent herewith; and (E) Tenant
pays all of Landlord's reasonable expenses arising out of such sublease
including, without limitation, a legal retainer in a reasonable amount specified
by Landlord in advance of Landlord's review of any of Tenant's documentation in
connection therewith.

                           (ii)     Notwithstanding anything to the contrary in
Section 8.1(a), but subject to Section 8.1(c), Tenant may, upon prior written
notice to, but without the requirement of consent by, Landlord, assign this
Lease to a Tenant Affiliate, so long as (A) within ten (10) Business Days after
such assignment, Tenant furnishes to Landlord a copy of the assignment and
evidence reasonably satisfactory to Landlord that the assignment is permitted
under this Section 8.1(b)(ii); (B) the assignee's proposed use is a Permitted
Use; (C) there does not then exist an uncured Event of Default; and (D) Tenant
pays all of Landlord's reasonable expenses arising out of such assignment
including, without limitation, a legal retainer in a reasonable amount specified
by Landlord in advance of Landlord's review of any of Tenant's documentation in
connection therewith.

                           (iii)    Notwithstanding anything to the contrary in
Section 8.1(a), Tenant may, upon prior written notice to, but without the
requirement of consent by, Landlord, allow one or more Tenant Affiliates to use
portions of the Premises from time to time; provided that in such use of the
Premises the applicable Tenant Affiliate shall be subject to all of the terms of
this Lease.

                           (iv)     Notwithstanding anything to the contrary in
Section 8.1(a), Tenant may collaterally assign Tenant's interest in this Lease
to a bank or other financial institution as security for financing provided by
such bank or other financial institution to Tenant, provided that any assignment
of this Lease occurring by reason of the enforcement of such collateral
assignment, other than an assignment to such bank or financial institution,
shall be subject to Section 8.1(a), and after any assignment of this Lease to
such bank or financial institution occurring by reason of the enforcement of
such collateral assignment, such bank or financial institution shall thereafter
be subject to, and have the rights of Tenant under, Article VIII.

                  (c)      In the event of an assignment of this Lease consented
to by Landlord or permitted pursuant to Section 8.1(a) or Section 8.1(b), Tenant
shall be jointly and severally liable with the new tenant for the payment of any
and all Base Rent and Additional Rent which may become due by the terms of this
Lease and for the performance of all covenants, agreements and conditions on the
part of Tenant to be performed hereunder. Tenant shall also pay to Landlord,
with respect to portions of the Lease Term after the tenth (10th) Lease Year,
fifty percent (50%) of the amount, if any, by which any rent from time to time
received as a result of the assignment or sublease, after deducting therefrom
the costs incurred by Tenant in the assignment or sublease transaction (which
costs shall include leasing commissions, reasonable attorneys' fees and tenant
improvements costs), exceeds the Base Rent and Additional Rent payable hereunder
on a per square foot basis; provided, however, that the foregoing provisions of
this sentence shall not apply to an assignment or a sublease to a Tenant
Affiliate. No such assignment or sublease shall be valid or effective unless and
until (i) the new tenant and the Tenant execute and deliver to Landlord an
agreement, in commercially reasonable form submitted by Landlord and with the
assignment or sublease attached, pursuant to which inter alia, such new tenant
(A) in the case of an assignment, assumes all of the obligations of the Tenant
under this Lease, (B) agrees to execute and deliver such estoppel certificates
and subordination agreements as may be reasonably required by Landlord, (C) in
the case of a sublease, acknowledges that Landlord has no obligations to new
tenant under this Lease, the sublease or otherwise and (D) agrees to maintain
the same insurance coverages as the insurance coverages which Tenant is required
to maintain under this Lease and to provide evidence thereof satisfactory to
Landlord when requested; and (ii) the new tenant delivers to

                                      -23-

<PAGE>

Landlord evidence, in form and substance satisfactory to Landlord, of the
insurance coverages required to be maintained by such new tenant under the
agreement referenced in clause (i) above. No modification of the terms of this
Lease or any course of dealing between Landlord and any assignee or sublessee of
Tenant's interest herein shall operate to release or impair Tenant's obligations
hereunder.

                  (d)      Notwithstanding anything to the contrary contained in
this Article VIII or other provisions of this Lease, in the event that Tenant
seeks Landlord's consent to an assignment of this Lease or a sublease of all or
any part of the Premises to become effective after the twentieth (20th) Lease
Year, Landlord, at its option, may terminate this Lease (or if the request is
for a sublease of less than all of the Premises, at Landlord's option, Landlord
may terminate this Lease as to the portion requested to be sublet and Landlord
and Tenant shall execute an amendment to this Lease to modify the Premises and
to adjust Base Rent and Tenant's Share based upon the approximate remaining
leasable square footage to the Leasable Square Footage of the Building). In such
an event, Landlord may enter into a new lease with the proposed assignee or
sublessee or any other party on any terms and provisions acceptable to Landlord
in Landlord's sole discretion for the Premises or the portion of the Premises
released from this Lease.

                  (e)      Tenant shall not enter into any arrangements with any
subtenant or assignee for the purpose of circumventing (i) its obligation to
share rents received from a sublease or assignment or (ii) any other provisions
of this Article VIII.

                                   ARTICLE IX
         RIGHTS OF MORTGAGEES AND GROUND LESSORS; ESTOPPEL CERTIFICATES

         Section 9.1 Subordination to Mortgages and Ground Leases. Tenant agrees
that this Lease is and shall be and remain subordinate to the lien of any
present or future mortgage or mortgages, or ground lease, upon Landlord's
Property, irrespective of the time of execution or time of recording of any such
mortgage or mortgages, or ground lease, and to all renewals, extensions, and
modifications therefor or amendments thereto; provided, however, that as a
condition to such subordination, the mortgagee or ground lessor must agree not
to disturb Tenant's possession of the Premises pursuant to the terms of this
Lease so long as no Event of Default exists. Tenant agrees that it will, upon
five (5) Business Days' advance written request from Landlord or any holder of a
mortgage on all or a portion of Landlord's Property or the ground lessor
thereof, execute, acknowledge, and deliver an agreement to give effect to, or
notice of, such subordination, provided that the terms of such agreement are
similar in substance to the form of Subordination, Non-Disturbance and
Attornment Agreement attached hereto as Exhibit H. Upon five (5) days' written
request from Landlord, any holder of a mortgage or ground lease on Landlord's
Property or any successor in interest to Landlord, whether by purchase,
foreclosure, deed in lieu of foreclosure or otherwise, Tenant shall enter into
an attornment agreement consistent with the attornment provisions in Exhibit H.

         Section 9.2 Lease Superior at Mortgagee's or Ground Lessor's Election.
At the request in writing of any mortgagee, or ground lessor, of Landlord's
Property, this Lease shall be deemed superior to such mortgage, or ground lease,
whether this Lease was executed before or after such mortgage, or ground lease,
and Tenant shall execute such documents to effect the foregoing in recordable
form as such mortgagee, or ground lessor, shall request.

         Section 9.3 Limitations on Obligations of Mortgagees, Ground Lessors
and Successors. Tenant agrees that the holder of a mortgage or ground lease or
any successor-in-interest to any of them or to Landlord shall not be: (a) liable
for any act or omission of Landlord under this Lease; (b) subject to any offsets
or defenses which Tenant might have against Landlord under this Lease; (c) bound
by the payment of any Base Rent or Additional Rent which Tenant might have paid
for more that the current month to Landlord under the Lease; (d) bound by any
amendment or modification of this Lease made without the prior written consent
of the mortgagee or ground lessor and not otherwise permitted under the mortgage
or ground lease; (e) personally liable for any default under this Lease of any
covenant or obligation on its part to be performed, it being acknowledged that
Tenant's sole monetary recourse in the event of such default shall be to proceed
against the interest of such mortgagee, ground lessor or successor-in-interest
in this Lease and Landlord's Property; or (f) obligated to perform any of
Landlord's

                                      -24-

<PAGE>

Work. Further, Tenant agrees that it will not seek to terminate this Lease by
reason of any act or omission of Landlord until Tenant shall have given written
notice of such act or omission to the holder of such mortgage or ground lease
(at such holder's last address furnished to Tenant) and following the giving of
such notice such holder shall have the right, but shall not be obligated, to
remedy such act or omission within twenty (20) business days after the time
period provided for in this Lease for Landlord to cure the same or such longer
period as may be reasonably necessary to cure the same. Tenant shall enter into
a written agreement confirming the foregoing from time to time upon written
request from Landlord and/or the holder of a mortgage or ground lease on
Landlord's Property. In the event of any inconsistency between any
Subordination, Non-Disturbance and Attornment Agreement entered into as
contemplated by Section 9.1, and the above provisions of this Section 9.3, such
Subordination, Non-Disturbance and Attornment Agreement shall control.

         Section 9.4 Estoppel Certificates. Each party ("Responding Party")
agrees, at any time and from time to time, within ten (10) days after written
request by the other party ("Requesting Party"), to execute, acknowledge and
deliver to the Requesting Party a statement in writing certifying that (except
as may be otherwise specified by the Responding Party): (i) this Lease is
presently in full force and effect and unmodified; (ii) Tenant has accepted
possession of the Premises; (iii) any improvements required by the terms of this
Lease to be made by Landlord have been completed to the satisfaction of Tenant;
(iv) no rent under this Lease has been paid more than 30 days in advance of its
due date; (v) the addresses for notices to be sent to the Responding Party is as
set forth in this Lease or as specified in such certificate; (vi) Tenant as of
the date of executing the certificate has no charge, lien or claim of offset
under this Lease, or otherwise, against rents or other charges due or to become
due hereunder; (vii) to the best of the knowledge of the Responding Party, the
Responding Party is not in default under this Lease; and (viii) such other
information as the Requesting Party may reasonably request about this Lease or
Tenant's occupancy.

                                    ARTICLE X
                                    CASUALTY

         Section 10.1 Damage From Casualty.

         (a)      If any portion of the Building is damaged by fire or other
casualty, Tenant shall give Landlord written notice of such casualty promptly
after Tenant becomes aware of such casualty. Within sixty (60) days after Tenant
gives Landlord written notice of such casualty, Landlord shall reasonably
estimate (based upon an estimate from a reputable architectural or engineering
firm), and give Tenant written notice of, the period commencing with the start
of restoration work (the "Restoration Period") that Landlord anticipates will be
reasonably required to achieve Partial Completion of Landlord's Restoration Work
and the anticipated date on which Landlord will start Landlord's Restoration
Work; provided, however, that in no event shall the Restoration Period extend
more than ten (10) months after the occurrence of the casualty. Landlord shall,
with reasonable dispatch, repair or rebuild the Building, or the damaged portion
thereof, other than such portions or elements of the Building as were part of
Tenant's Work or were otherwise constructed by Tenant, to substantially their
condition immediately prior to the casualty (subject, however, to Legal
Requirements then in existence) (such work to be performed by Landlord being
called "Landlord's Restoration Work"). From and after such time that Landlord
achieves Partial Completion of Landlord's Restoration Work, Tenant shall repair
or rebuild such portions or elements of the Building as were part of Tenant's
Work or were otherwise constructed by Tenant ("Tenant's Restoration Work").
Landlord shall design and perform Landlord's Restoration Work in accordance with
the provisions of Article III applicable to Landlord's Work, and Tenant shall
design and perform Tenant's Restoration Work in accordance with the provisions
of Article III applicable to Tenant's Work. Notwithstanding the above provisions
of this Section 10.1(a) to the contrary, if Landlord is not permitted by then
existing Legal Requirements to repair and rebuild the Building after a casualty,
Landlord may, by written notice given to Tenant within sixty (60) days after
Tenant gives Landlord written notice of the casualty, terminate this Lease, and
if Tenant is then occupying the Premises, Tenant shall thereafter have a
reasonable period of time in which to vacate the Premises.

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<PAGE>

         (b)      If, pursuant to Section 10.1(a), Landlord is required to
perform Landlord's Restoration Work and (i) Landlord fails to achieve Partial
Completion of Landlord's Restoration Work by the end of the Restoration Period
or (ii) Landlord fails to achieve Substantial Completion of Landlord's
Restoration Work by the later of (x) the date on which Tenant substantially
completes Tenant's Restoration Work or (y) six (6) months after Landlord
achieves Partial Completion of Landlord's Restoration Work, then Tenant shall
have the following rights: (1) Tenant may terminate this Lease upon sixty (60)
days prior written notice to Landlord, and if Landlord fails to achieve Partial
Completion or Substantial Completion of Landlord's Restoration Work, as
applicable, within such sixty (60) day period, then this Lease shall terminate
as of such sixtieth (60th) day; or (2) Tenant may undertake and complete
Landlord's Restoration Work, in which case Tenant may setoff the reasonable
costs thereof against the Base Rent and Additional Rent next coming due;
provided, however, that as a condition of such right of Tenant to setoff such
costs, such right shall either have been conceded by Landlord or Landlord's
failure to achieve Partial Completion or Substantial Completion of Landlord's
Restoration Work within the applicable time period shall have been determined by
arbitration pursuant to Section 14.2.

         Section 10.2 Abatement of Rent. In the event that the provisions of
Section 10.1 shall become applicable, the Base Rent and Tenant's Share of Taxes,
Insurance Costs and Operating Costs shall be abated or reduced proportionately
during any period in which, by reason of any such damage or destruction, there
is substantial interference with the operation of the business of Tenant in the
Premises, having regard to the extent to which Tenant may be required to
discontinue its business in the Premises, and such abatement or reduction shall
continue (but may be adjusted from time to time based on the extent of the
interference with Tenant's operations) for the period commencing with such
destruction or damage and ending not later than the later of (a) the date on
which Landlord achieves Substantial Completion of Landlord's Restoration Work or
(b) three (3) months after Landlord achieves Partial Completion of Landlord's
Restoration Work.

         Section 10.3 Termination. Landlord and Tenant shall not be obligated to
do any repair or restoration work if Landlord or Tenant has the right to and
does elect to terminate this Lease as provided for in this Article X. If this
Lease terminates as provided in this Article XI, Tenant shall be entitled to the
proceeds of the insurance maintained by Tenant pursuant to Section 7.9(d).

                                   ARTICLE XI
                                 EMINENT DOMAIN

         Section 11.1 Eminent Domain; Right to Terminate and Abatement in Rent.
If the entire Premises or the entire Landlord's Property shall be taken, or if a
conveyance shall be made in anticipation thereof, by action of municipal, state,
federal or other authorities (such a taking or conveyance being called a
"Taking"), this Lease shall terminate as of the Taking. If there is a Taking of
a material part of the Premises or a substantial part of Landlord's Property,
and if, by reason of such Taking, it is not commercially reasonable for Tenant
to continue to use the Premises in Tenant's business, then Tenant may, at its
option exercisable by written notice given to Landlord within sixty (60) days
after such Taking, terminate this Lease. In the case of a partial Taking which
materially affects Tenant's use and enjoyment of the Premises but does not
result in a termination of this Lease, the Base Rent shall be equitably adjusted
on the basis of the extent of interference with Tenant's use and enjoyment of
the Premises.

         Section 11.2 Restoration. If this Lease is not terminated as a result
of a partial Taking of Landlord's Property, Landlord shall apply so much of its
share of the available proceeds of the Taking as are required to restore
Landlord's Property and the Premises to a condition, to the extent practical,
substantially the same as that immediately preceding the Taking, but subject to
Legal Requirements then in existence. If Landlord's share of the available
proceeds of the Taking are insufficient, in Landlord's judgment, for that
purpose, Landlord shall have no obligation to expend funds in excess of said
proceeds. The term "available proceeds" shall mean the amount of the award paid
to Landlord, less cost of obtaining the same (including attorneys' fees and
appraisal fees).

         Section 11.3 Proceeds. To the extent this Lease is terminated as a
result of a Taking or a partial Taking of Landlord's Property, the available
proceeds (as defined in Section 11.2) shall be allocated as

                                      -26-

<PAGE>

between Landlord and Tenant on the basis of the relative values of their
interests in Landlord's Property as determined by agreement of the parties or,
at the request of either party if they have not reached such an agreement, by
arbitration pursuant to Section 14.2. The above provisions of this Section 11.3
shall be subject to any contrary rights of any mortgagee of Landlord's Property,
to the extent that the applicable mortgage secures a loan made on the basis of
the value of Landlord's Property determined subject to this Lease.

                                   ARTICLE XII
                              DEFAULT AND REMEDIES

         Section 12.1 Event of Default. As used herein, "Event of Default" shall
mean the occurrence and/or existence of any one or more of the following: (a)
(i) Tenant shall fail to pay any installment of Base Rent or Tenant's Share of
Taxes, Insurance Costs or Operating Costs on or before the date on which the
same becomes due and payable, and such failure continues for ten (10) days after
Landlord gives Tenant written notice thereof, or (ii) Landlord having given the
notice specified in the foregoing clause (a)(i) to Tenant twice in any twelve
(12) month period, Tenant shall fail, on another occasion within twelve (12)
months after the first such notice, to pay any installment of Base Rent or
Additional Rent on or before the date on which the same becomes due and payable;
or (b) Tenant shall neglect or fail to perform or observe any of the other
covenants or undertakings herein on its part to be performed or observed and
such neglect or failure shall continue for thirty (30) days after notice to
Tenant; provided, however, that if the default is other than a default under
clause (a) above, or clauses (c) through (i) below, and is such that it cannot
be cured within thirty (30) days, but is capable of being cured, such thirty
(30) day period shall be extended by up to sixty (60) additional days provided
that Tenant commences to cure such default within said thirty (30) day period,
continues to do so diligently, and thereafter completes such cure; or (c) there
is filed by Tenant any case, petition, proceeding or other action for
protection, reorganization or liquidation under any Bankruptcy Law; or (d) any
other proceedings shall be instituted against Tenant under any Bankruptcy Law
and not be dismissed within ninety (90) days; or (e) Tenant shall admit its
inability to pay its financial obligations when they become due; or (f) Tenant
shall execute an assignment of its property for the benefit of its creditors; or
(g) a receiver, custodian or other similar officer for Tenant shall be appointed
and not be discharged within ninety (90) days; or (h) the estate hereby created
shall be taken by execution or by other process of law and is not redeemed by
Tenant within thirty (30) days thereafter; or (i) an assignment or sublease in
violation of the terms of this Lease.

         Section 12.2 Landlord's Remedies.

                  (a)      During the continuance of an uncured Event of
Default, Landlord may, immediately or at any time thereafter (notwithstanding
any license or waiver of any former breach or waiver of the benefit hereof, or
consent in a former instance), and without demand or notice, in person or by
agent or attorney, enter the Premises or any part thereof and repossess the same
as of its former estate, and terminate this Lease by written notice to Tenant,
and expel Tenant and those claiming through or under it and remove their effects
(forcibly, if necessary) without being deemed guilty of any manner of trespass
and without prejudice to any remedy which might otherwise be used for arrears of
Base Rent or Additional Rent or breach of covenant, and thereupon this Lease
shall terminate and Landlord, in addition to all other remedies which it may
have at law or equity, and not in limitation thereof, shall have the remedies
provided in this Article XII. No termination of this Lease and/or repossession
of the Premises pursuant to this Section 12.1 shall relieve Tenant of its
obligations under this Lease, which shall survive such termination or
repossession.

                  (b)      From the termination of this Lease pursuant to
Section 12.2(a) through the remainder of the Lease Term, until such time, if
any, that Landlord exercises its right pursuant to Section 12.2(c), Tenant shall
pay to Landlord the Base Rent and Additional Rent in installments as and when
the same become due and payable, subject to reduction by any rent actually
received by Landlord as a result of a re-letting of the Premises (net of the
reasonable and customary costs of re-letting, including remodeling costs,
brokerage commissions and attorneys' fees). Landlord shall exercise commercially
reasonable efforts to re-let the Premises to mitigate damages, and Landlord may
re-let the Premises or any part or parts thereof, either in the name of Landlord
or otherwise for a term or terms which may, at

                                      -27-

<PAGE>

Landlord's option, be less than or exceed the period which would otherwise have
constituted the balance of the Lease Term and may grant concessions or free
rent. The good faith failure of Landlord to re-let the Premises or any part or
parts thereof, or, if the Premises are re-let, the good faith failure to collect
the rents due under such re-letting, shall not release or affect Tenant's
liability for damage so long as Landlord does not act arbitrarily or
capriciously. Any suit brought to collect the amount of deficiency for any month
or other period shall not prejudice in any way the right of Landlord to collect
the deficiency for any subsequent month or period by a similar proceeding.
Landlord, at Landlord's option, may make such alterations, repairs, replacements
and decorations on the Premises as Landlord in Landlord's sole but reasonable
judgment considers advisable and necessary for the purpose of re-letting the
Premises, and the making of such alterations or decorations shall not operate or
be construed to release Tenant from liability hereunder.

                  (c)      At Landlord's option exercisable by written notice
given to Tenant upon or after the termination of this Lease pursuant to Section
12.2(a), Tenant shall forthwith pay to Landlord as damages, in addition to all
sums which were due prior to the exercise of such option by Landlord, a sum
equal to the amount by which the Base Rent and Additional Rent for the remainder
of the Lease Term exceeds the fair rental value of the Premises determined as of
the termination date for the remainder of the Lease Term, discounted to present
value using a then market rate of interest as reasonably determined by Landlord.
For the purposes of computing damages payable pursuant to this Section 12.2(c),
the annual Additional Rent with respect to Taxes, Insurance Costs and Operating
Costs for the remainder of the Lease Term will be assumed to be such Additional
Rent for the most recently ended fiscal, calendar or lease year, as the case may
be.

         Section 12.3 Reimbursement of Landlord. Upon the occurrence of an Event
of Default, Tenant will, in addition to paying Landlord all amounts due under
the terms and provisions of this Lease, including, without limitation, Section
12.9, reimburse Landlord for all reasonable expenses incurred by Landlord in
collecting such rent or in obtaining possession of, or in re-letting the
Premises, or in defending any action, including expenses for reasonable counsel
fees and commissions. Tenant further agrees that, if on termination of this
Lease by expiration or otherwise, Tenant shall fail to remove any of its
property from the Premises as provided for herein, Landlord shall be authorized,
in its sole option, and in Tenant's name and on its behalf, either (a) to cause
such property to be removed and placed in storage for the account and at the
expense of Tenant; or (b) to sell such property at public or private sale, with
or without notice, and to apply the proceeds thereof, after the payment of all
expenses of removal, storage and sale, to the indebtedness, if any, of Tenant to
Landlord, the surplus, if any, to be paid to Tenant. All sums payable by Tenant
under this Article XII shall be deemed Additional Rent.

         Section 12.4 Landlord's Right to Perform Tenant's Covenants. Tenant
covenants and agrees that, if there shall at any time exist an uncured Event of
Default with respect to its obligation to make any payment or perform any other
act on its part to be made or performed as in this Lease provided, Landlord, in
its sole discretion may make any payment or perform such other act on the part
of Tenant to be made or performed as in this Lease provided, in such manner and
to such extent as Landlord may reasonably deem desirable, and in exercising any
such rights, Landlord may pay necessary and incidental costs and expenses,
employ counsel, and incur and pay reasonable attorneys' fees. The making of any
such payment or the performing of such other act by Landlord pursuant to this
Article shall not waive, or release Tenant from, any obligations of Tenant in
this Lease contained. All sums so paid by Landlord and all reasonably necessary
and incidental costs and expenses in connection with the performance of any such
act by Landlord shall, except as otherwise in this Lease expressly provided, be
payable to Landlord on demand, and Tenant covenants to pay any such sum or sums
promptly, and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the non-payment thereof
by Tenant as in the case of default by Tenant in the payment of the Base Rent.

         Section 12.5 Cumulative Remedies. The specified remedies to which
Landlord or Tenant may resort under the terms of this Lease, or under the
provisions of applicable law, are cumulative and not intended to be exclusive of
any other remedies or means of redress to which Landlord may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of this Lease. The failure of Landlord or Tenant to insist in any one or more
cases upon the strict performance of any of the

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<PAGE>

covenants of this Lease or to exercise any option contained herein shall not be
construed as a waiver or a relinquishment for the future of such covenant or
option. Receipt by Landlord of any Base Rent or Additional Rent payment with
knowledge of the breach of any covenants hereof shall not be deemed a waiver of
such breach. No payment by Tenant, whether or not expressly under protest, shall
be deemed a waiver of Tenant's right to dispute its obligation to pay or its
right to seek a refund of the same. No waiver by Landlord or Tenant of any
provision of this Lease shall be deemed to have been made unless expressed in
writing and signed by it. In addition to the other remedies provided in this
Lease, Landlord and Tenant shall be entitled to restraint by injunction of any
violation or attempted or threatened violation of any of the covenants,
conditions or provisions of this Lease. Notwithstanding anything else to the
contrary elsewhere in this Lease, Tenant will not be liable for indirect or
consequential damages, other than damages for holding over beyond the end of the
Lease Term.

         Section 12.6 Expenses of Enforcement. Tenant agrees to pay all
reasonable expenses and reasonable attorneys' fees incurred by Landlord in
enforcing any obligation or any remedies hereunder including, without
limitation, in connection with collection of Base Rent or Additional Rent,
recovery by Landlord of the Premises, or in any litigation in which Landlord
shall become involved by reason of any act or negligence of Tenant Invitees or
any breach of this Lease by Tenant.

         Section 12.7 Landlord's Default. Landlord shall not be deemed to be in
default hereunder unless such default shall remain uncured for more than thirty
(30) days following written notice from Tenant to Landlord specifying the nature
of such default, or such longer period as may be reasonably required to correct
such default. Landlord's liability to keep, maintain, and repair shall always be
limited to the cost of making such repair or accomplishing such maintenance or
repair. In no event whatsoever shall Landlord be liable for consequential or any
indirect damages. Notwithstanding anything to the contrary contained herein, so
long as any uncured Event of Default exists, Tenant shall not be entitled to
enforce any obligation from Landlord or seek any cure of Landlord's defaults
under this Lease. The provisions of this Section 12.7 are further subject to the
provisions of Articles X and XI dealing with eminent domain and fire and other
casualty. If Landlord is in default under this Lease (other than a default under
Section 6.6) and such default remains uncured for the period provided for in the
first sentence of this Section 12.7, Tenant may take reasonable steps to cure
the default, in which case Tenant may setoff the reasonable costs thereof
against the Base Rent and Additional Rent next coming due; provided, however,
that as a condition of such right of Tenant to setoff such costs, such right
shall have either been conceded in writing by Landlord or Landlord's default
shall have been determined by arbitration pursuant to Section 14.2. In no event
shall Tenant have the right to terminate this Lease by reason of a default by
Landlord, except as expressly provided herein. Landlord's and Tenant's
obligations under this Lease are independent of each other, except that nothing
shall limit or affect the rights of either party for a default of the other as
set forth herein.

         Section 12.8 Limitation of Liability. The obligations of Landlord
hereunder shall be binding upon Landlord and each succeeding owner of Landlord's
interest hereunder only during the period of such ownership, and Landlord and
each succeeding owner shall have no liability whatsoever except for its
obligations during each such respective period. Tenant hereby agrees for itself
and each succeeding holder of Tenant's interest, or any portion thereof,
hereunder, that any judgment, decree or award obtained against Landlord or any
succeeding owner of Landlord's interest, which is in any manner related to this
Lease, the Premises or Tenant's use and occupancy of the Premises or the
remainder of Landlord's Property, whether at law or in equity, shall be
satisfied out of Landlord's equity in the land and buildings then comprising
Landlord's Property owned by Landlord to the extent then owned by Landlord and
such succeeding owner, and further agrees to look only to such assets and to no
other assets of Landlord, or such succeeding owner, for satisfaction. Neither
Landlord nor any Person executing this Lease on behalf of Landlord, nor any
partner, limited or general, or any officer, director, employee, member,
trustee, beneficiary, or owner of Landlord, nor any subsequent Landlord, or any
partner, limited or general, or any officer, director, employee, member,
trustee, beneficiary, or owner of any subsequent Landlord shall have any
personal liability hereunder. No Person executing this Lease on behalf of
Tenant, nor any shareholder, director, officer or employee of Tenant, shall have
any personal liability hereunder.

                                      -29-

<PAGE>

         Section 12.9 Late Payment and Administrative Expense. If Tenant shall
fail to pay Base Rent, Additional Rent or other charges within ten (10) days
after the same become due and payable under this Lease, such unpaid amounts
shall bear interest from the due date thereof to the date of payment at the
Applicable Interest Rate ("Interest Payment"). In addition, if Landlord is
required to redeposit any check which is returned for insufficient funds or if
Tenant shall fail to pay Base Rent or Tenant's Share of Taxes, Insurance Costs
or Operating Costs on or before the date on which the same become due and
payable, then Tenant shall also pay to Landlord an administrative expense charge
("Administrative Expense") of five percent (5.0%) of the amount thereof. The
provisions herein for Interest Payment and Administrative Expense shall not be
construed to relieve Tenant of the obligation to pay Base Rent, Additional Rent
and all other charges when due under this Lease and shall be in addition to and
not in limitation of Landlord's other remedies as provided for in this Lease.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

         Section 13.1 Brokers. Tenant represents that it has not dealt with any
licensed real estate broker in connection with the Premises or the negotiation
or execution of this Lease other than the Brokers. Tenant shall indemnify and
save harmless Landlord from and against all claims and liabilities for brokerage
fees and commissions, and costs and expenses in connection therewith, incurred
as a result of the foregoing representation by Tenant not being true when made.
All broker's fees payable to Brokers for this Lease shall be payable by
Landlord.

         Section 13.2 Quiet Enjoyment. Tenant shall, upon paying all Base Rent
and Additional Rent due hereunder and observing and performing all of the terms,
covenants and conditions on Tenant's part to be observed and performed within
applicable grace and/or cure periods after notice, peaceably and quietly have
and hold the Premises, subject, however, to the terms of this Lease.

         Section 13.3 Notices. Any notice, demand, request or statement required
or intended to be given or delivered under the terms of this Lease shall be in
writing, shall be addressed to the party to be notified at the address or
addresses set forth in the Summary of Basic Terms or at such other address in
the continental United States as each party may designate for itself from time
to time by notice hereunder, and shall be deemed to have been given, delivered
or served upon (a) deposit in the U.S. Mail, with proper postage prepaid,
certified or registered, return receipt requested, (b) delivery to a regularly
scheduled overnight delivery carrier with delivery fees either prepaid or an
arrangement, satisfactory with such carrier, made for the payment of such fees,
or (c) telecopy or personal delivery, except that where any time period is
specified to commence upon notice from one party to the other, such time period
shall not be deemed to commence until postal service records, courier service
records or telecopy confirmation, as applicable, indicates that delivery was
made or first attempted.

         Section 13.4 Waiver of Subrogation. Notwithstanding anything to the
contrary in this Lease, Landlord and Tenant hereby release each other from any
and all liability for any loss or damage caused by fire, any of the extended
coverage casualties, or other casualties insured against, or which would be
covered by insurance either of them is required hereunder to carry, even if such
fire or other casualty shall be brought about by the fault or negligence of the
party benefited by the release or its agents, and whether or not any applicable
policy shall contain a clause, or be subject to a statutory provision, to the
effect that such release shall not affect said policies or the right of the
releasing party to recover thereunder. Landlord and Tenant agree that their
fire, extended coverage, and other insurance policies will include such a
clause, whenever available. To the extent that Tenant is a self-insurer with
respect to personal property, the provisions of Section 7.8 shall be applicable.
The provisions in favor of Landlord under this Section 13.4 are in addition to,
and not in lieu of, the other terms of this Lease.

         Section 13.5 Entire Agreement; Execution; Time of the Essence and
Headings and Table of Contents. This Lease together with all Exhibits referred
to herein and the Summary of Basic Terms, sets forth the entire agreement
between the parties hereto and cannot be modified or amended, except in a
writing duly executed by the respective parties. This Lease, together with all
Exhibits referred to herein and the Summary of Basic Terms, supersedes all
previous written and oral negotiations, understandings

                                      -30-

<PAGE>

and agreements regarding the subject matter of this Lease. Neither Landlord nor
Tenant nor any Person acting on behalf of Landlord or Tenant has made any
representations to the other on which the other has relied in entering into this
Lease except any representations expressly stated in this Lease. This Lease is
executed as a sealed instrument and in multiple counterparts, all copies of
which are identical, and any one of which is to be deemed to be complete in
itself and may be introduced in evidence or used for any purpose without the
production of any other copy. Time is of the essence of the obligations of
Tenant and Landlord to be performed within a specific time frame in this Lease.
The headings throughout this Lease and the Table of Contents are for convenience
of reference only, and shall in no way be held or deemed to define, limit,
explain, describe, modify or add to the interpretation, construction or meaning
of any provision of this Lease.

         Section 13.6 Partial Invalidity. If any term or condition of this Lease
or its application to any Person or circumstance shall to any extent be in
violation of or unenforceable under any law, rule, regulation or order
(including any court order) now existing or hereafter enacted or entered by any
court or other governmental entity having competent jurisdiction (including
after all appeals therefrom), the remainder of this Lease, or the application of
such term or condition to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby and shall be
enforceable to the fullest extent not prohibited by law.

         Section 13.7 No Waiver. No assent, express or implied, by Landlord or
Tenant to any breach of any agreement or condition herein contained on the part
of the other to be performed or observed, and no waiver, express or implied, of
any such agreement or condition shall be deemed to be a waiver of or an assent
to any succeeding breach of the same or any other agreement or condition. The
acceptance by Landlord of Base Rent or Additional Rent due hereunder (whether
such payment is made by Tenant or another Person), or silence by Landlord as to
any breach, shall not be construed as waiving any of Landlord's rights hereunder
unless such waiver shall be in writing. No payment by Tenant or acceptance by
Landlord of a lesser amount than shall be due Landlord from Tenant shall be
deemed to be anything but payment on account, and the acceptance by Landlord of
a check for a lesser amount with an endorsement or statement thereon, or upon a
letter accompanying said check, that said lesser amount is payment in full shall
not be deemed an accord and satisfaction, and Landlord may accept said check
without prejudice to recover the balance due or pursue any other remedy. No
payment by Tenant, whether or not expressly under protest, shall be deemed a
waiver of Tenant's right to dispute its obligation to pay or its right to seek a
refund of the same.

         Section 13.8 Holdover. If Tenant remains in the Premises beyond the
expiration of this Lease at the end of the Lease Term, or sooner following an
early termination as provided for herein, such holding over shall not be deemed
to create any tenancy, but Tenant shall be a daily Tenant at sufferance only
subject to all of Tenant's obligations set forth herein, but at a daily rate
equal to two (2) times the Base Rent, then in effect, and Additional Rent and
other charges provided for under this Lease. The acceptance of a purported rent
check following termination shall not constitute the creation of a tenancy at
will, it being agreed that Tenant's status shall remain that of a daily Tenant
at sufferance, at the aforesaid daily rate. If Tenant shall remain in occupancy
sixty (60) days after the later of (i) the expiration or earlier termination of
this Lease or (ii) notice from Landlord that it has signed a lease or purchase
and sale agreement requiring that Tenant vacate the Premises, Tenant shall also
pay to Landlord all damages, if any, sustained by reason of any such holding
over. Otherwise, such holding over shall be on the terms and conditions set
forth in this Lease as far as applicable.

         Section 13.9 When Lease Becomes Binding. The submission of this
document for examination and negotiation does not constitute an offer to lease
or a reservation or an option for the Premises, and this document shall become
effective and binding only upon the execution and delivery hereof by both
Landlord and Tenant and the receipt by Landlord of the Security Deposit, the
first monthly installment of Tenant's Electricity Cost, the first monthly
installment of Tenant's Share of Taxes, Insurance Costs and Operating Costs, and
the first monthly installment of Base Rent. All negotiations, considerations,
representations and understandings between Landlord and Tenant are incorporated
herein and may be modified or altered only by agreement in writing between
Landlord and Tenant, and no act or omission of any employee or agent of Landlord
shall alter, change or modify any of the provisions hereof.

                                      -31-

<PAGE>

         Section 13.10 No Recordation. Tenant shall not record this Lease with
any registry of deeds or land court, and any recordation of this Lease will be
void and constitute an Event of Default under this Lease. However, at the
request of either party, the parties shall execute and record a Notice of Lease.

         Section 13.11 As Is. Except for Landlord's Work and Landlord's
obligation to Remediate contamination of Landlord's Property by Hazardous
Materials as provided in Section 6.6, Tenant represents to Landlord that it has
leased the Premises after a full and complete examination of the same, and by
its execution and delivery of this Lease, Tenant hereby acknowledges that
neither Landlord, nor Landlord's agents, has made any representation or promises
with respect to the Premises, the Building, or the land upon which it stands,
and no rights, easements or licenses are acquired by Tenant, by implication or
otherwise, except as may be set forth expressly in this Lease.

         Section 13.12 Financial Statements; Certain Representations and
Warranties of Tenant. From time to time as requested by Landlord, Tenant shall
provide to Landlord, any actual or potential mortgagee and any actual or
potential ground lessor or any representative of any of the foregoing, copies of
Tenant's annual financial statements (audited or reviewed, if available) and
quarterly financial statements, all certified as true and correct by the
president or chief financial officer of Tenant, and such other information
regarding Tenant's financial condition as Landlord may reasonable request.
Tenant represents and warrants to Landlord, its successors and assigns that: (a)
all financial statements of Tenant previously provided to Landlord have been
prepared in accordance with GAAP, were true, complete and correct as of their
respective dates and fairly and accurately reflect the financial condition of
Tenant; (b) there has been no material adverse change in the financial condition
of Tenant subsequent to the date(s) of such financial statements; (c) all
financial statements of Tenant provided to Landlord after the date hereof will
be prepared in accordance with GAAP, will be true, complete and correct as of
their respective dates and will fairly and accurately reflect the financial
conditions of the Tenant (d) Tenant is a corporation duly organized, validly
existing and in good standing under the laws of State of Delaware; (e) the
execution, delivery and performance of this Lease by Tenant has been duly
authorized by the directors of Tenant; and (f) this Lease is valid and binding
upon the Tenant and is enforceable against Tenant in accordance with the terms
hereof. Notwithstanding anything else to the contrary in this Lease, Landlord
acknowledges that Tenant's stock is publicly traded and that so long as Tenant's
stock remains publicly traded, documents on file with the Securities and
Exchange Commission (SEC) and available to Landlord from the SEC shall satisfy
all financial reporting requirements of this Lease. If at any time Tenant is no
longer a public company, Tenant will furnish the financial statements and other
information provided for above in this Section 13.12 subject to a
confidentiality agreement to be negotiated in good faith by the parties.

         Section 13.13 Summary of Basic Terms. The Summary of Basic Terms which
is affixed to this Lease sets forth certain basic terms and information which is
thereafter referred to in the main text of this Lease. The Summary of Basic
Terms, and every particular item thereon, shall be deemed incorporated by
reference into the main text of this Lease.

         Section 13.14 Landlord Waivers. Landlord agrees to waive for the
benefit of Tenant and Tenant's lenders any lien upon Tenant's trade or specialty
fixtures and personal property; provided, however, that such waiver shall not
affect the right of Landlord to execute against Tenant's trade or specialty
fixtures and personal property to enforce any judgment obtained by Landlord
against Tenant, the lien for which would be subject and subordinate to any
security interests existing prior to the enforcement of such judgment. At the
request of Tenant, Landlord will enter into access agreements, on terms and
conditions reasonably satisfactory to Landlord, for the benefit of Tenant's
lenders to permit Tenant's lenders access to the Premises to recover Tenant's
trade and specialty fixtures and personal property.

                                   ARTICLE XIV
                                   ARBITRATION

         Section 14.1 Arbitrable Matters. The following matters (collectively,
the "Arbitrable Matters") shall be subject to arbitration as provided in Section
14.2: (a) whether a cost paid or incurred by Landlord is properly included in
Operating Costs, Taxes or Insurance Costs; (b) the date of the Second Expansion

                                      -32-

<PAGE>

Delivery Date; (c) the date as of which Landlord achieves Partial Completion;
(d) the date as of which Landlord achieves Substantial Completion; (e) a claim
by Tenant for breach by Landlord of the warranty with respect to the Base
Building Work set forth in Section 3.1(c); (f) approval or disapproval by Tenant
of proposed plans for the Amenities Work; (g) a claim by Tenant for breach by
Landlord of the warranty with respect to the Amenities Work set forth in Section
3.2; (h) approval or disapproval by Landlord of proposed Tenant Improvements
Plans; (i) any other design or construction issues related to the Base Building
Work, the Amenities Work or the Tenant Improvements Work; (j) approval or
disapproval by Landlord of plans for proposed alterations or additions by Tenant
pursuant to Section 7.5; (k) whether an alteration or addition by Tenant is a
"Permitted Alteration" under Section 7.5; (l) any other design or construction
issues related to alterations or additions by Tenant pursuant to Section 7.5;
(m) the reasonableness of Landlord in withholding, conditioning or delaying
consent to a sublease or assignment pursuant to Section 8.1(a); (n) the
permissibility of any sublease or assignment by Tenant under Section 8.1(b); (o)
the sharing of any profit on a sublease or assignment as contemplated by Section
8.1(c); (p) the commercial reasonableness of a form submitted by Landlord under
Section 8.1(c); (q) any issues in connection with a casualty loss or eminent
domain proceeding (or conveyance in lieu thereof) under Article X or Article XI;
(r) the existence of a fact or circumstance which is or could become an Event of
Default under clause (b) of Section 12.1; (s) the existence of a default by
Landlord under this Lease and any right of Tenant to exercise any right to
self-help (to the extent such right is subject to arbitration as provided in
this Lease), setoff or termination with respect to such default; and (t) the
assignment or allocation of responsibility for any particular cost of owning,
operating, maintaining, repairing, replacing and rebuilding Landlord's Property
as contemplated by Section 4.3. With respect to Arbitrable Matters, the
arbitrator(s) may determine and order remedies in connection therewith,
including damages.

         Section 14.2 Arbitration. Any claim, dispute or disagreement between
Landlord and Tenant regarding any Arbitrable Matter shall, if not resolved by
agreement of the parties, be resolved by arbitration administered by the
American Arbitration Association under its Arbitration Rules for the Real Estate
Industry, as amended and effective September 1, 2000, and judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction.
Any such arbitration proceeding shall occur in Boston, Massachusetts under the
"Expedited Procedures" provided for in such Arbitration Rules for the Real
Estate Industry; provided that any such arbitration shall be before a 3-member
arbitration panel. Landlord and Tenant irrevocably agree that the exclusive
method for resolving any claim, dispute or disagreement between them regarding
any Arbitrable Matter shall be arbitration in accordance with this Section. In
the event of multiple claims, disputes or disagreements between Landlord and
Tenant regarding Arbitrable Matters, such Arbitrable Matters shall be
consolidated in a single arbitration proceeding to the extent practical without
materially delaying the arbitration of any such Arbitrable Matters. In the event
of multiple claims, disputes or disagreements between Landlord and Tenant, one
or more of which regard Arbitrable Matters and one or more of which regard
matters which are not Arbitrable Matters, the Arbitrable Matters shall be
resolved by arbitration in accordance with this Section and the matters which
are not Arbitrable Matters shall, unless the parties agree to submit the same to
arbitration, be subject to litigation between the parties in a court of
competent jurisdiction. The provisions of Article XIV shall survive termination
of this Lease.

                          [EXECUTION ON FOLLOWING PAGE]

                                      -33-

<PAGE>

         Tenant and Landlord, each by its duly authorized officer, has signed
this Lease as of the Effective Date.

                                  TENANT:

                                  ANTIGENICS, INC.

                                  By: /s/ Garo H. Armen
                                  --------------------------------------------
                                    Garo H. Armen, Chief Executive Officer

                                  LANDLORD:

                                  BHX, LLC, AS TRUSTEE OF 3 FORBES
                                   REALTY TRUST

                                  By: /s/ Robert A. Schlager
                                  --------------------------------------------
                                     Robert A. Schlager, Member<PAGE>
                                                                   EXHIBIT 10.18

                                  CONFIDENTIAL

                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                          MONARCH MANUFACTURING COMPANY

                                    AS BUYER

                                       AND

                          AMERICAN WEATHER-SEAL COMPANY

                                    AS SELLER

                                   DATED AS OF

                                OCTOBER 15, 2002

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
ARTICLE 1 DEFINITIONS...............................................................6
     1.1      Definitions...........................................................6

ARTICLE 2 SALE AND PURCHASE OF THE ASSETS...........................................7
     2.1      Transferred Assets....................................................7
     2.2      Excluded Assets.......................................................8
     2.3      Assumption of Liabilities.............................................9
     2.4      Excluded Liabilities.................................................10

ARTICLE 3 THE CLOSING; PURCHASE PRICE..............................................11
     3.1      Place and Date.......................................................11
     3.2      Purchase Price.......................................................11
     3.3      Deposit..............................................................11
     3.4      Allocation of Purchase Price.........................................11
     3.5      Deliveries...........................................................12
     3.6      Working Capital Adjustment...........................................12
     3.7      Consents of Third Parties............................................13

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER.................................14
     4.1      Organization, Standing, Etc. of Seller...............................14
     4.2      Corporate Authorization..............................................14
     4.3      Enforceability.......................................................14
     4.4      Governmental Authorizations and Consents.............................14
     4.5      Financial Statements.................................................14
     4.6      Absence of Certain Changes or Events.................................15
     4.7      Title to Transferred Assets..........................................15
     4.8      Transferred Intellectual Property....................................15
     4.9      Assumed Contracts....................................................15
     4.10     Licenses and Permits.................................................15
     4.11     Environmental Compliance.............................................15
     4.12     Benefit Plans........................................................16
     4.13     Brokers..............................................................16
     4.14     Taxes................................................................16
     4.15     Compliance with Law..................................................16
     4.16     Product Warranties...................................................16
     4.17     No Other Representations and Warranties..............................17

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER..................................17
     5.1      Organization and Standing of Buyer...................................17
     5.2      Authorization........................................................17
     5.3      Enforceability.......................................................17
     5.4      Compliance with Other Instruments and Laws...........................17
     5.5      Governmental Authorizations and Consents.............................17
     5.6      Access...............................................................18
</TABLE>

                                     - i -

<PAGE>
<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
     5.7      Brokers..............................................................18
     5.8      Buyer Awareness......................................................18

ARTICLE 6 COVENANTS RELATING TO PERSONNEL ARRANGEMENTS.............................18
     6.1      Transferee Employees...................................................
     6.2      COBRA Obligations....................................................18
     6.3      Plans, Benefits and Policies.........................................18

ARTICLE 7 COVENANTS OF SELLER......................................................19
     7.1      Conduct of Business..................................................19
     7.2      Access...............................................................20

ARTICLE 8 COVENANTS OF BUYER.......................................................20
     8.1      Investigation........................................................20
     8.2      Assistance with Respect to Excluded Assets...........................20

ARTICLE 9 COVENANTS OF BOTH PARTIES................................................21
     9.1      Commercially Reasonable Efforts......................................21
     9.2      Governmental Filings...................................................
     9.3      Public Announcements.................................................21
     9.4      Use of Business Names by Buyer.......................................21
     9.5      Consents; Cooperation................................................22
     9.6      Communications with Customers and Suppliers..........................22
     9.7      Liability for Transfer Taxes.........................................23
     9.8      Books and Records....................................................23
     9.9      Tax Matters..........................................................23
     9.10     Confidentiality......................................................24
     9.11     Transition Period Assistance.........................................25

ARTICLE 10 BUYER PROTECTIONS:  OVERBIDDING PROCEDURES AND BREAK-UP FEES............25
     10.1     Bankruptcy Court Approvals...........................................25
     10.2     Bidding Procedures...................................................26

ARTICLE 11 CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE.............................28
     11.1     Accuracy of Representations and Warranties...........................28
     11.2     Performance..........................................................28
     11.3     No Conflict..........................................................29
     11.4     Certificate..........................................................29
     11.5     Bankruptcy Court Approval............................................29
     11.6     Consents.............................................................29
     11.7     Transfer Documents...................................................29
     11.8     Transaction Documents................................................29
     11.9     Further Instruments..................................................29
     11.10    Transition Services Agreement........................................30

ARTICLE 12 CONDITIONS TO OBLIGATIONS OF SELLER TO CLOSE............................30
</TABLE>
                                      -ii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>

     12.1     Accuracy of Representations and Warranties...........................30
     12.2     Performance..........................................................30
     12.3     No Conflict..........................................................30
     12.4     Certificate..........................................................30
     12.5     Bankruptcy Court Approval............................................30
     12.6     Consents.............................................................30
     12.7     Assumption Agreement.................................................30
     12.8     Transaction Documents................................................31
     12.9     Further Instruments..................................................31
     12.10    Payment..............................................................31
     12.11    Transition Services Agreement........................................31

ARTICLE 13 TERMINATION.............................................................31
     13.1     Right to Terminate Agreement.........................................31
     13.2     Return of Deposit After Termination..................................32

ARTICLE 14 MISCELLANEOUS...........................................................32
     14.1     Expiration of Representations, Warranties and Covenants..............32
     14.2     Disclaimer of Projections, Etc.......................................32

ARTICLE 15 AGREEMENT CONVENTIONS...................................................32
     15.1     Further Assurances...................................................32
     15.2     Notices..............................................................32
     15.3     Assignment...........................................................34
     15.4     Entire Agreement; Amendment; Governing Law; Etc......................34
     15.5     Consent to Jurisdiction..............................................35
     15.6     Severability.........................................................35
     15.7     Reliance on Counsel and Other Advisors...............................35
     15.8     Exhibits and Schedules...............................................35
     15.9     Rules of Construction................................................35
     15.10    Counterparts.........................................................36

EXHIBIT A        Definitions.......................................................38
EXHIBIT B        Sample Working Capital Calculation................................45
EXHIBIT C        Bidding Procedures, Motion and Form of Bidding Procedures Order...46
EXHIBIT D        Sale Motion and Form of Sale Order................................47
EXHIBIT E        Transition Services Agreement.....................................48
</TABLE>

                                     -iii-

<PAGE>
                                    SCHEDULES

Schedule          Subject Matter
--------          --------------
2.1(c)            Owned and Leased Real Property

2.1(d)            Transferred Intellectual Property

2.2(g)            Excluded Litigation Rights

2.3(c)            Assumed Liabilities

2.4(i)            Other Excluded Liabilities

4.6               Exceptions to Ordinary Course

4.7               Title to Transferred Assets

4.9               Assumed Contracts

4.10              Licenses, Permits and Exceptions

4.11              Environmental Compliance Exceptions

4.12              Benefit Plans

4.14              Tax Matters

4.16              Product Warranties

5.5               Government Authorizations and Consents Required By Buyer

7.1               Conduct of Business

11.6              Consents as Conditions to Obligations

                                      -iv-
<PAGE>

                                    EXHIBITS

A.       Definitions

B.       Sample Working Capital Calculation

C.       Bidding Procedures Motion and Form of Bidding Procedures Order

D.       Sale Motion and Form of Sale Order

E.       Transition Services Agreement

                                       v

<PAGE>

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
October 15, 2002, by and between MONARCH MANUFACTURING COMPANY, an IOWA
corporation ("BUYER"), on the one hand, and AMERICAN WEATHER-SEAL COMPANY, a
Delaware corporation ("AWS" or "SELLER"), on the other hand.

                                    RECITALS

         WHEREAS, Seller, among others, filed a bankruptcy petition under
Chapter 11 of the United States Bankruptcy Code ("BANKRUPTCY CODE") on December
18, 2000 (the "FILING DATE") in the United States Bankruptcy Court for the
Northern District of Ohio ("BANKRUPTCY COURT") which case is being jointly
administered as Case No. 00-43726 ("BANKRUPTCY CASE");

         WHEREAS, AWS is a wholly owned subsidiary of American Architectural
Products Corporation ("AAPC");

         WHEREAS, AWS is engaged in the business of the manufacture, sale and
installation of vinyl windows, doors and related products for residential,
institutional and commercial markets;

         WHEREAS, AWS is known as the "BUSINESS";

         WHEREAS, Buyer wishes to purchase and acquire from Seller, and Seller
wishes to sell, assign and transfer to Buyer, the Transferred Assets (as defined
in Exhibit A), and Seller wishes to assume and assign to Buyer and Buyer has
agreed to assume the Assumed Liabilities (as defined in Exhibit A), with the
approval of the Bankruptcy Court pursuant to sections 363 and 365 of the
Bankruptcy Code, all for the Purchase Price (as defined in Exhibit A), and upon
the terms and subject to the conditions, herein set forth; and

         WHEREAS, the transactions contemplated by this Agreement involve a
sale, other than in the ordinary course of business, of certain of Seller's
assets and properties out of Seller's bankruptcy estate pursuant to Bankruptcy
Code Sections 363 and 365.

         NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants hereinafter set forth, and intending
to be legally bound hereby, the parties agree as follows:

                                  ARTICLE 1

                                 DEFINITIONS

         1.1 DEFINITIONS. The definitions set forth in Exhibit A are
incorporated herein by reference.

                                      -6-

<PAGE>

                                   ARTICLE 2

                         SALE AND PURCHASE OF THE ASSETS

         2.1 TRANSFERRED ASSETS. Subject to and upon the terms and conditions
set forth in this Agreement, at the Closing, Seller shall sell, assign,
transfer, convey and deliver to Buyer, free and clear of all Liens, except as
set forth in this Agreement, and Buyer shall purchase and acquire from Seller,
all right, title and interest of Seller in and to the properties, assets,
contracts and rights of Seller used in the Business, other than the Excluded
Assets (collectively, the "TRANSFERRED ASSETS"). The Transferred Assets include,
without limitation, the following:

            (a) all of the Fixed Assets specific to the Business;

            (b) all of the Accounts Receivable, other than Intercompany
Receivables, specific to the Business;

            (c) all rights and ownership interest of Seller in the owned and
leased real property listed on SCHEDULE 2.1(c);

            (d) rights in respect of the Transferred Intellectual Property
specific to the Business and identified in SCHEDULE 2.1(d);

            (e) to the extent transferable, all of Seller's rights under the
Assumed Contracts;

            (f) all inventories of goods, office and other supplies located at
the Transferred Facilities or used in the Business;

            (g) all of the prepaid expenses and security deposits that relate to
any of the Assumed Contracts;

            (h) customer lists, files and all of the Books and Records of the
Business;

            (i) to the extent their transfer is permitted by Applicable Law, all
Consents and Permits specific to the Transferred Facilities, the Transferred
Assets or the Business;

            (j) to the extent transferable, all rights under express or implied
warranties from or rights against Seller's suppliers with respect to the
Transferred Assets or the Assumed Contracts;

            (k) all rights to causes of action, lawsuits, claims and demands of
any nature available to Seller that are specific to the Transferred Assets, the
Assumed Liabilities or to the Business, other than (i) avoidance actions under
the Bankruptcy Code and (ii) causes of action, lawsuits, claims and demands
referred to in SCHEDULE 2.2(g);

            (l) to the extent transferable, all guarantees, warranties,
indemnities, bonds, letters of credit and similar arrangements that run in favor
of Seller in connection with the Transferred Assets;

            (m) the retentions and advances that relate to the Assumed
Contracts;

                                      -7-
<PAGE>

            (n) additional assets of the Business acquired in the ordinary
course of business between the date hereof and the Closing Date;

            (o) business names of the Business;

            (p) telephone and facsimile numbers of the Business;

            (q) e-mail addresses and web sites of the Business;

            (r) to the extent transferable, software used in the Business;

            (s) all of Seller's rights and interests under all outstanding
purchase orders entered into by Seller for the purchase of goods or services
used in the Business; and

            (t) to the extent transferable and used in the Business, all other
or additional privileges, rights, interests, properties and assets of Seller of
every kind and description and wherever located, that are used or intended for
use in connection with, or that are necessary to the continued conduct of, the
Business as presently being conducted.

         2.2 EXCLUDED ASSETS. Notwithstanding anything contained in Section 2.1
hereof to the contrary, the Transferred Assets do not include, and Buyer shall
not purchase or acquire any right, title or interest of Seller in or to any of
the following (herein referred to collectively as the "EXCLUDED ASSETS"):

            (a) except to the extent expressly set forth in the Transaction
Documents, the names and marks "American Architectural Products Corporation" and
"AAPC" and any name or mark derived from or including the foregoing, including
all corporate symbols or logos incorporating "American Architectural Products
Corporation" or "AAPC" (the "EXCLUDED INTELLECTUAL PROPERTY");

            (b) any rights of Seller in intellectual property, intangible
property rights, license agreements and software licenses not within the
definition of Transferred Intellectual Property;

            (c) all collateral posted by Seller or its Affiliates associated
with any bonds, letters of credit and similar arrangements provided by Seller
that run in favor of third parties;

            (d) Intercompany Receivables and payables arising between or among
the Business and the balance of AAPC's business from the conduct of the Business
prior to the Closing Date (including without limitation any prepaid assets
associated with AAPC's property, general liability and automobile insurance
policies);

            (e) all books and records relating to or used in the business of
Seller and not specific to the Business, Seller's corporate franchise and stock
record books, corporate seal, corporate record books containing minutes of
meetings of directors and stockholders, tax returns and records;

            (f) all Policies maintained by Seller, and all rights of action,
lawsuits, claims and demands, rights of recovery and set-off, and proceeds,
under or with respect to such Policies;

            (g) all rights to causes of action, lawsuits, claims and demands
listed on SCHEDULE 2.2(g) and any rights accruing under this Agreement;

                                      -8-
<PAGE>

            (h) all right, title and interest of Seller in and to and any claims
for any refund, credit, rebate or abatement with respect to Taxes of the
Business for any period or portion thereof prior to the Closing Date, but only
to the extent such corresponding tax liability is not assumed by Buyer;

            (i) all assets relating to Benefit Plans;

            (j) all prepaid expenses and security deposits other than those
transferred pursuant to Section 2.1(g);

            (k) all claims against third parties for Losses suffered in
connection with Excluded Assets and Excluded Liabilities;

            (l) all cash and cash equivalents and similar type investments
specific to the Business, such as certificates of deposit, treasury bills and
other marketable securities;

            (m) the services available to Seller that are not specific to the
Business as conducted prior to the Closing Date;

            (n) except to the extent transferable and specific to the
Transferred Assets, permits related to the conduct of the Business;

            (o) all contracts and leases rejected pursuant to Section 365 of the
Bankruptcy Code by Seller prior to the Closing Date;

            (p) any properties, assets, contracts and rights of Seller not
constituting a part of the Transferred Assets;

            (q) the assets and properties used in the Business which have been
disposed of since the date of this Agreement, provided such disposition has been
made in accordance with the terms hereof and in the ordinary course of business
consistent with past practice;

            (r) any shares of capital stock or debenture of Seller; and

            (s) any projections, descriptive brochures or other sales related
documentation prepared in connection with the sale of the Transferred Assets.

For the avoidance of doubt, and in those instances where certain categories of
Transferred Assets are expressly described as those being specific either to the
Business or to any other assets otherwise transferred hereby, or as otherwise
specified, the term "Excluded Assets" shall include properties, assets,
contracts and rights of the Business which are not primarily used in the
Business. Notwithstanding the foregoing, it is the intention of the parties that
Buyer is buying and shall have the benefit of all assets currently used and
necessary to operate the Business.

         2.3 ASSUMPTION OF LIABILITIES. Subject to the terms and conditions set
forth herein, at the Closing, Buyer shall assume and agree to pay, honor,
perform and discharge when due all of the Liabilities and obligations relating
to the Transferred Assets and the Business (other than the Excluded
Liabilities), including, without limitation, the following:

                                      -9-
<PAGE>

            (a) Liabilities and obligations of Seller to be performed from and
after the Closing Date under or relating to the Transferred Assets, Assumed
Contracts and the Transferred Facilities;

            (b) all Liabilities and obligations relating to or arising out of
the conduct of the Business on or after the Closing Date;

            (c) all Liabilities identified on SCHEDULE 2.3(c) and reflected on
the Financial Statements but only to the extent incurred on or after the Filing
Date; and

            (d) all Liabilities with respect to warranty claims relating to the
Business arising solely out of the express terms of Seller's warranty Contracts
with its customers that are in the form of (and solely in the form of) the
express warranties identified on Schedule 4.16 hereto and that relate solely to
products sold by Seller with respect to the Business on or after the Filing
Date, excluding Liabilities for personal injury or damage to property other than
the windows and doors manufactured by Seller and sold to such customers.

         The Liabilities and obligations described in clauses (a) through (d)
are collectively referred to as the "ASSUMED LIABILITIES."

         2.4 EXCLUDED LIABILITIES. Except as specifically set forth in Section
2.3 and elsewhere in the Transaction Documents, Buyer shall not assume or in any
way be responsible for, and Seller shall remain responsible for, the following
debts, claims, commitments, liabilities and obligations of Seller and the
Business (the "EXCLUDED LIABILITIES"):

            (a) all Tax liabilities, including penalties and interest, in
respect of periods prior to the Closing Date;

            (b) all indebtedness for borrowed money relating to the conduct of
the Business for all periods prior to the Closing Date;

            (c) Liabilities arising directly out of the Excluded Assets;

            (d) any Environmental Liabilities relating to or arising out of (1)
the acts or omissions of Seller, (2) the acts or omissions of any person prior
to the Closing Date related to Seller, the Business or the Transferred Assets,
or (3) the use, handling, storage, treatment or disposal of any Hazardous
Materials related to Seller, the Business or the Transferred Assets prior to the
Closing Date;

            (e) Inter-company payables and receivables between or among the
Business and the balance of AAPC's business arising from the conduct of the
Business prior to the Closing Date;

            (f) Liabilities and obligations under Benefit Plans;

            (g) all trade payables and obligations incurred prior to the Filing
Date;

            (h) all amounts owing to employees of Seller under the Key Employee
Retention Program, as approved and described by the Bankruptcy Court Order in
Orders dated June 11, 2001 and June 12, 2002;

                                      -10-

<PAGE>

            (i) the Liabilities, if any, listed on SCHEDULE 2.4(i); and

            (j) any Liabilities relating to pending or threatened litigation,
warranty claims (other than those included in the Assumed Liabilities), or
bankruptcy and any Liability of Seller for costs and expenses incurred in
connection with the Contemplated Transactions, including, without limitation,
any broker's or finder's commission, fee or similar compensation;

            (k) any actual or alleged violation by Seller or any of its
Affiliates of any Applicable Law;

            (l) any infringement or alleged infringement of the rights of any
Person arising out of the use of any of the Transferred Intellectual Property in
connection with the Business prior to the Effective Time;

            (m) except as reflected on Schedule 2.3(c), any workers compensation
claims relating to the Business for any period prior to the Effective Time; and

            (n) except for items specifically included in the Assumed
Liabilities, all Liabilities of Seller relating to or arising out of any act,
event or omission occurring prior to the Effective Time.

                                   ARTICLE 3

                           THE CLOSING; PURCHASE PRICE

         3.1 PLACE AND DATE. The closing of the sale and purchase of the
Transferred Assets (the "CLOSING") and the assumption of the Assumed Liabilities
shall take place at 10:00 a.m. local time, not later than (i) five business days
following the satisfaction or waiver of the conditions referred to in Articles
11 and 12 or (ii) seven business days after the Sale Order is entered, whichever
is later, at such place upon which the parties may agree. The day on which the
Closing actually occurs is sometimes referred to herein as the "Closing Date."
Notwithstanding the actual time of Closing on the CLOSING DATE, the Closing
shall be deemed to have occurred as of 12:01 a.m., local time, on the Closing
Date (the "EFFECTIVE TIME").

         3.2 PURCHASE PRICE. On the terms and subject to the conditions set
forth in this Agreement, the purchase price shall be U.S. $6,625,000.00 (the
"CASH PORTION") plus the assumption of the Assumed Liabilities plus or minus, as
applicable, the Working Capital Adjustment (collectively the "PURCHASE PRICE").

         3.3 DEPOSIT. Simultaneously with the execution of this Agreement, the
Buyer shall deliver to Squire, Sanders & Dempsey, L.L.P. attorneys for Seller an
amount equal to U.S.$150,000.00 (the "DEPOSIT") as a deposit toward the Cash
Portion of the Purchase Price. The Deposit shall be held and invested in an
interest bearing account, the proceeds of which shall be included in the Deposit
for the benefit of either Buyer or Seller, as the case may be.

         3.4 ALLOCATION OF PURCHASE PRICE.

            (a) The parties shall allocate the aggregate consideration received
by Seller with respect to the Transferred Assets and the assumption of the
Assumed Liabilities, in accordance with Section 1060 of the Tax Code, as
mutually agreed to by the parties within seven (7) business days following the
parties'

                                      -11-
<PAGE>
agreement with respect to the Working Capital Adjustment pursuant to the
procedure described below. Subject to the requirements of any applicable Tax law
or election, all such mutually agreed to allocations shall be used by each party
in preparing any filings required pursuant to Section 1060 of the Tax Code or
any similar provisions of state or local law and all relevant Income Tax
Returns. Neither Buyer nor Seller will take any position before any taxing
authority or in any judicial proceeding with respect to Income Taxes that is
inconsistent with such mutually agreed to allocations without the prior written
consent of the other party, in the consenting party's commercially reasonable
discretion. The parties shall exercise commercially reasonable efforts to
support such mutually agreed to reported allocations in any audit proceedings
initiated by any taxing authority.

             (b) Within 30 days after the date the parties agree to the Working
Capital Adjustment, Buyer will provide to Seller copies of IRS Form 8594 and any
required exhibits thereto with Buyer's proposed allocation of the consideration
received by Seller with respect to the Transferred Assets for Seller's approval,
which shall not be unreasonably withheld. If Seller fails to respond to Buyer
within 30 days of Seller receiving such IRS Form 8594, then Seller shall be
deemed to have approved Buyer's allocation.

         3.5 DELIVERIES. At the Closing: (a) Buyer shall deliver to, or as
directed by Seller, the Cash Portion of the Purchase Price, plus or minus the
Estimated Working Capital Adjustment, less the Deposit, and the agreements,
instruments of assumption, certificates and other documents required to be
delivered by Buyer pursuant to Article 12; and (b) Seller shall deliver to Buyer
the agreements, instruments of transfer, certificates and other documents
required to be delivered by Seller pursuant to Article 11.

         3.6 WORKING CAPITAL ADJUSTMENT.

             (a) If as of the Effective Time, Current Assets of the Business
that are included as Transferred Assets minus Current Liabilities of the
Business that are included as Assumed Liabilities (the foregoing calculation
referred to as "WORKING CAPITAL") exceeds $3,731,159.00 ("TARGET WORKING
CAPITAL"), the Cash Portion of the Purchase Price shall be increased dollar for
dollar by the amount of such excess. If the Working Capital as of the Effective
Time is less than the Target Working Capital, the Cash Portion of the Purchase
Price shall be reduced dollar for dollar by the amount of such deficiency. The
foregoing adjustment to the Cash Portion of the Purchase Price shall be referred
to as the "WORKING CAPITAL ADJUSTMENT". A sample Working Capital calculation is
attached hereto as Exhibit B. The calculation of Working Capital and the Target
Working Capital shall be done in accordance with the past practices of Seller
and shall be applied on a consistent basis throughout all the periods identified
and consistent with the preparation of the Financial Statements.

             (b) Seller shall deliver to Buyer three (3) business days prior to
the Closing Date, written notice of Seller's good faith estimate of the Working
Capital Adjustment ("ESTIMATED WORKING CAPITAL ADJUSTMENT"). Seller shall make
available during normal business hours to Buyer all appropriate personnel to
answer any questions of Buyer relating to Seller's calculation of such
estimates.

             (c) The actual Working Capital Adjustment shall be determined and
paid as follows:

                          (i) As soon as reasonably practicable after the
             Closing Date, but in no event later than the twenty-first (21st)
             day following the Closing Date, Seller (with the cooperation of
             Buyer) shall prepare and deliver to Buyer a schedule detailing the
             amount and computation

                                      -12-
<PAGE>

             of the Working Capital Adjustment and final Purchase Price
             ("CLOSING SCHEDULE"). Buyer will give Seller access to the Books
             and Records for the purpose of preparing the Closing Schedule and
             access to the appropriate personnel of Buyer for the purpose of
             calculating the amounts set forth in the Closing Schedule.

                          (ii) Unless Buyer notifies Seller in writing ("DISPUTE
             NOTICE") that Buyer disagrees with the amount of the Working
             Capital Adjustment contained in the Closing Schedule on the later
             of ten (10) days after receipt of the Closing Schedule, the Closing
             Schedule shall be conclusive and binding on Buyer and Seller and
             deemed final. Buyer or Seller, as the case may be, shall pay within
             five (5) days thereafter to the other party the amounts in cash
             identified in the Closing Schedule.

                          (iii) If Buyer delivers a Dispute Notice to Seller,
             Buyer and Seller shall attempt to amicably resolve their
             differences with respect thereto in good faith. If Buyer and Seller
             are unable to resolve any disputed item within ten (10) days of
             delivery of the Dispute Notice, then the parties shall submit the
             issues in dispute to an accounting firm (the "RESOLVING
             ACCOUNTANTS") mutually acceptable to both parties or, in the
             absence of agreement, to an accounting firm of national reputation
             selected by lot after eliminating the parties' principal outside
             accountants and one additional firm designated as objectionable by
             each of Buyer and Seller. If the disputed issues are submitted to
             the Resolving Accountants, each party shall furnish to the
             Resolving Accountants such work papers and other documents and
             information relating to the disputed issues as the Resolving
             Accountants may request and are available to such party, and each
             will be afforded the opportunity to present to the Resolving
             Accountants any material relating to the determination and to
             discuss the determination with the Resolving Accountants. Each
             party shall be entitled to request and receive information from the
             other which the Resolving Accountants determine is or may be
             relevant to the resolution of the disputed issues. The Resolving
             Accountants shall be required to make a decision within thirty (30)
             days of the date of their acceptance of their appointment as the
             Resolving Accountants. The determination of the Resolving
             Accountants, as set forth in a written notice delivered to the
             parties by the Resolving Accountants (the "NOTICE OF
             DETERMINATION"), shall be binding and conclusive on the parties
             absent fraud or manifest error. Buyer or Seller, as the case may
             be, shall pay within twenty (20) days thereafter to the other party
             the amounts in cash as is identified in the Notice of
             Determination. The fees and expenses of the Resolving Accountants
             shall be shared equally by Buyer and Seller.

         3.7 CONSENTS OF THIRD PARTIES. Notwithstanding anything to the contrary
in this Agreement, this Agreement shall not constitute an agreement to assign or
transfer any Consent from a Governmental Authority, instrument, contract
(including the Assumed Contracts), lease, or other agreement or arrangement or
any claim, right or benefit arising thereunder or resulting therefrom, to the
extent that such assignment or transfer or an attempt to make such an assignment
or transfer cannot be made pursuant to Section 365 of the Bankruptcy Code
without the consent or approval of a third party. In the event any such consent
or approval is not obtained on or prior to the Closing Date, Seller shall, in
any lawful arrangement, provide Buyer with the benefits under any such Consent,
instrument, contract, lease or other agreement or arrangement, PROVIDED that
Buyer shall undertake to pay, perform, discharge or satisfy the corresponding
liabilities and obligations for the enjoyment of such benefit to the extent
Buyer would have been responsible therefor if such consent or approval had been
obtained.

                                      -13-
<PAGE>

                                   ARTICLE 4

                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Except as set forth in the Disclosure Schedule delivered to Buyer
contemporaneously herewith (the "DISCLOSURE SCHEDULE"), of which the Schedules
referred to below are a part, and in the documents and other materials
identified in the Disclosure Schedule (it being agreed that any matter disclosed
in the Disclosure Schedule with respect to any section of this Agreement shall
be deemed to have been disclosed with respect to all other sections of this
Agreement), and subject to the limitations contained in Section 14.1, as of the
date of this Agreement, Seller makes to Buyer the following representations and
warranties.

         4.1 ORGANIZATION, STANDING, ETC. OF SELLER. AWS is a corporation duly
incorporated and validly existing under the laws of the jurisdiction where it is
organized and has all requisite corporate power and authority to carry on the
Business as currently conducted and to own or lease and to operate the
properties of the Business. AWS is in good standing and is qualified to do
business in each state of the United States in which the Business is conducted
that requires such qualification and where the failure to so qualify would have
a Material Adverse Effect on the Business. For the purposes of the Transaction
Documents, a "MATERIAL ADVERSE EFFECT ON THE Business" means any material
adverse change in, or material adverse effect on, the assets, liabilities,
business or operations of the Transferred Assets or the Business taken as a
whole. Seller is currently a debtor-in-possession in the Bankruptcy Case
pursuant to the Bankruptcy Code, and retains full authority and power to operate
its business and affairs pursuant to Sections 1107 and 1108 of the Bankruptcy
Code, with no trustee, examiner, facilitator or other officer or agent with
similar authority or powers to a trustee, examiner or facilitator having been
appointed in such Bankruptcy Case.

         4.2 CORPORATE AUTHORIZATION. Subject to approval by the Bankruptcy
Court, the execution, delivery and performance of this Agreement and all other
documents executed or to be executed pursuant to this Agreement by Seller, and
the consummation of the Contemplated Transactions, have been duly authorized by
all necessary corporate action on the part of Seller. Subject to approval by the
Bankruptcy Court, this Agreement has been duly executed and delivered by a duly
authorized officer of Seller.

         4.3 ENFORCEABILITY. Subject to approval by the Bankruptcy Court, this
Agreement constitutes the valid and legally binding obligation of Seller,
enforceable in accordance with its terms.

         4.4 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. No consents, licenses,
approvals or authorizations of, or registrations or declarations with, any
Governmental Authority are required to be obtained or made by Seller in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement, other than (a) bankruptcy court approval, and
(b) other consents, licenses, approvals, authorizations, registrations or
declarations, where the failure to obtain such would have a Material Adverse
Effect on the Business.

         4.5 FINANCIAL STATEMENTS. Seller has delivered to Buyer the following:
a) audited financial statements and a balance sheet, each as of and for the
twelve month period ending December 31, 2001; b) 2002 monthly income statement
of the Business for the months available through the date this Agreement is
executed; and c) 2002 monthly balance sheet for the Business for the months
available through the date this Agreement is executed (such statements
hereinafter being referred to as the "FINANCIAL STATEMENTS"). The Financial
Statements have been prepared in accordance with past practice and the
accounting records

                                      -14-
<PAGE>

and policies of Seller and reasonably present in all material respects the
Transferred Assets and the Assumed Liabilities of the Business as of the dates
thereof.

         4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 2001,
Seller has conducted its operations related to the Business in the ordinary
course of business except: (i) as set forth on SCHEDULE 4.6, (ii) the filing of
the Bankruptcy Case and any actions taken in connection therewith, and (iii)
activities related to the Contemplated Transactions. Since December 31, 2001,
there has been no material adverse change in the results of operations,
financial condition or prospects of the Business which result in the failure to
satisfy a closing condition of Buyer pursuant to Article 11 of this Agreement

         4.7 TITLE TO TRANSFERRED ASSETS. Except as set forth on SCHEDULE 4.7,
and except for real and personal property subject to leases, Seller has good,
transferable and marketable title to or other valid ownership rights in the
Transferred Assets. This Section 4.7 does not apply to the Transferred
Intellectual Property.

         4.8 TRANSFERRED INTELLECTUAL PROPERTY.

             (a) Seller owns, or is licensed or otherwise possesses the right to
use, all the Transferred Intellectual Property, and the Transferred Intellectual
Property is all the intellectual property necessary to conduct the Business
substantially as currently conducted by Seller in all material respects.

             (b) SCHEDULE 2.1(D) includes a list of patents, registered
copyrights, registered trademarks, registered trade names and registered service
marks, and any pending applications therefor, included in the Transferred
Intellectual Property.

         4.9 ASSUMED CONTRACTS. SCHEDULE 4.9 includes a list of all Assumed
Contracts of the Business.

         4.10 LICENSES AND PERMITS. SCHEDULE 4.10 includes a list of all
permits, licenses and other authorizations from Governmental Authorities
necessary for the conduct of the Business substantially as currently conducted.
Seller has all licenses, permits and other authorizations from Governmental
Authorities necessary for the conduct of the Business as conducted by Seller
prior to the date hereof (collectively "PERMITS"), except where the failure to
have such Permits could not reasonably be expected to result in a Material
Adverse Effect on the Business. Except as set forth on SCHEDULE 4.10, (a) each
of said Permits is in full force and effect, (b) the Business is in compliance
with the terms, provisions and conditions thereof, except where the failure to
be so in compliance could not reasonably be expected to result in a Material
Adverse Effect on the Business, (c) to Seller's Knowledge, there are no
outstanding violations, notices of noncompliance, judgments, consent decrees,
orders or judicial or administrative actions, investigations or proceedings
adversely affecting any of said Permits, and (d) to Seller's Knowledge, no
condition exists and no event has occurred which (whether with or without
notice, lapse of time or the occurrence of any other event) would permit the
suspension or revocation of any material Permits other than by expiration of the
term set forth therein. Seller makes no representation or warranty with respect
to the transferability of the Permits to Buyer.

         4.11 ENVIRONMENTAL COMPLIANCE. Except as set forth in SCHEDULE 4.11,
the conduct of the Business complies in all material respects with all
Environmental Laws, except where the failure to so comply would not reasonably
be expected to result in a Material Adverse Effect on the Business.
"ENVIRONMENTAL LAWS" shall mean all applicable U.S. and foreign federal, state
and local laws, ordinances

                                      -15-
<PAGE>

and regulations pertaining to air and water quality, Hazardous Materials, waste,
disposal or other environmental matters, including the Clean Water Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Solid Waste Disposal
Act, the Resource Conservation Recovery Act, the Occupational Health and Safety
Act, the Comprehensive Environmental Response, Compensation, and Liability Act,
and the rules, regulations and ordinances of the cities and other jurisdictions
in which the Business is located, the Environmental Protection Agency and all
other applicable Governmental Authorities.

         4.12 BENEFIT PLANS. SCHEDULE 4.12 lists and identifies (i) each
employee pension benefit plan, as defined in Section 3(2) of ERISA (a "PENSION
PLAN"); and (ii) each employee welfare benefit plan, as defined in Section 3(1)
of ERISA (a "WELFARE PLAN"), that is maintained by Seller for employees of the
Business (collectively, the "BENEFIT PLANS"). Except for the 2000 and 2001
contributions to the Pension Plans which by law may not yet be required to be
made, all required contributions of Seller have been made to the Pension Plans.
Except as disclosed on SCHEDULE 4.12, Seller does not maintain or contribute to
any Welfare Plan that provides benefits to employees after termination of
employment other than as required by Part 6 of Subtitle B of Title I of ERISA.

         4.13 BROKERS. With the exception of fees and expenses payable to
Conway, Del Genio, Gries & Co., LLC, which shall be paid by AWS, all
negotiations relating to this Agreement, and the Contemplated Transactions, have
been carried on without the participation of any Person acting on behalf of
Seller or its Affiliates in such manner as to give rise to any valid claim
against Buyer for any brokerage or finder's commission, fee or similar
compensation upon consummation of the Contemplated Transactions.

         4.14 TAXES. Except as set forth on SCHEDULE 4.14, with respect to
Taxes:

             (a) Seller has properly completed and filed or caused to be filed
or shall properly complete and file or cause to be filed, within the time
prescribed by law, including extensions, all Tax Returns with respect to the
Transferred Assets that are or were required to be filed under federal, state,
local or any foreign laws on or prior to the Closing Date, except where the
failure to file such Tax Returns would not have a Material Adverse Effect on the
Business.

             (b) Seller has, within the time and in the manner prescribed by
law, paid or caused to be paid (and until the Closing will, within the time and
in the manner prescribed by law, pay or cause to be paid) all Taxes that are
shown to be due and payable on Tax Returns filed prior to the Closing. The
Business has paid or, in the case of Taxes not due or being contested in good
faith, has made adequate provisions for the payment of all Taxes for which the
Business is or may reasonably become liable for payment.

         4.15 COMPLIANCE WITH LAW. TO THE KNOWLEDGE OF THE SELLER, SELLER IS IN
COMPLIANCE WITH ALL APPLICABLE LAWS. TO THE KNOWLEDGE OF THE SELLER, SELLER HAS
NOT RECEIVED ANY NOTICE OF ANY VIOLATION OR ALLEGED VIOLATION OF ANY APPLICABLE
LAWS.

         4.16 PRODUCT WARRANTIES. SCHEDULE 4.16 CONTAINS A TRUE, CORRECT, AND
COMPLETE COPY OF SELLER'S STANDARD WARRANTIES AND RETURN POLICIES FOR ITS
PRODUCTS, AND EXCEPT AS STATED THEREIN OR PROVIDED FOR UNDER ANY APPLICABLE LAW,
THERE ARE NO WARRANTIES, COMMITMENTS OR OBLIGATIONS WITH RESPECT TO THE RETURN,
REPAIR OR REPLACEMENT OF SELLER'S PRODUCTS.

                                      -16-
<PAGE>

         4.17 NO OTHER REPRESENTATIONS AND WARRANTIES. Except as expressly set
forth in this Agreement, the Schedules and Exhibits hereto, and any certificate
or instrument delivered pursuant to the terms hereof, Seller makes no
representations or warranties with respect to the Business or Seller's
operations, assets (including, without limitation, the Transferred Assets),
liabilities (including, without limitation, the Assumed Liabilities) or
condition, including, with respect to the Transferred Assets, any representation
or warranty of merchantability, suitability or fitness for a particular purpose,
or quality as to the Transferred Assets, or any part thereof, or as to the
condition or workmanship thereof, or the absence of any defects therein, whether
latent or patent.

                                    ARTICLE 5

                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Seller as set forth below as of the
date of this Agreement:

         5.1 ORGANIZATION AND STANDING OF BUYER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction where it is organized and has all requisite corporate power and
authority to enter into this Agreement, and on the Closing Date will have all
requisite corporate power and authority to carry out the Contemplated
Transactions and to perform its obligations hereunder. Buyer is a domestic
corporation within the meaning of Section 7701 of the Tax Code.

         5.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement and all other documents executed or to be executed by Buyer pursuant
to this Agreement, and the consummation of the Contemplated Transactions have
been duly authorized by all necessary corporate and other action on the part of
Buyer. This Agreement has been duly executed and delivered by a duly authorized
officer of Buyer.

         5.3 ENFORCEABILITY. This Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its terms, except as
such enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws
relating to or affecting the rights of creditors generally.

         5.4 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. The execution, delivery
and performance of this Agreement and the consummation of the Contemplated
Transactions will not conflict with or result in any violation of or default
under any provision (a) of the charter or bylaws of Buyer, or (b) of any
mortgage, indenture, trust, lease, partnership or other agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Buyer or any
of its properties or assets, the result of which, with respect to items
identified in clause (b) would (either individually or in the aggregate) have a
material adverse effect on the operations or financial condition of Buyer or
would materially impair Buyer's ability to consummate the Contemplated
Transactions (a "MATERIAL ADVERSE EFFECT ON BUYER").

         5.5 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Except as set forth on
SCHEDULE 5.5, no consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority, bureau, agency
or commission, or any third party, are required to be obtained or made by Buyer
in connection with the execution, delivery, performance, validity and
enforceability of this Agreement other than (a) Bankruptcy Court approval, and
(b) other consents, licenses, approvals, authorizations,

                                      -17-
<PAGE>

registrations or declarations, where the failure to obtain such would not have a
Material Adverse Effect on Buyer.

         5.6 ACCESS. Buyer has received and reviewed the Financial Statements
and is acquainted with the Business. Buyer has had an opportunity to review the
assets, books, records and contracts of the Business, and has been given the
opportunity to meet with officers and other representatives of Seller for the
purpose of investigating and obtaining information regarding the Business
operations and its financial and legal affairs.

         5.7 BROKERS. No agent, broker, Person or firm acting on behalf of Buyer
or its stockholders is, or will be, entitled to any commission or broker's or
finder's fees from any of the parties hereto, or from any Person controlling,
controlled by or under common control with any of the parties hereto, in
connection with any of the Contemplated Transactions.

         5.8 BUYER AWARENESS. Buyer is not aware of any fact, circumstance or
condition which would constitute a breach of any representation or warranty of
Seller contained in this Agreement, or which could reasonably be expected to
have a Material Adverse Effect on the Business.

                                   ARTICLE 6

                  COVENANTS RELATING TO PERSONNEL ARRANGEMENTS

         6.1 TRANSFEREE EMPLOYEES. Effective as of the Closing Date, Seller
shall terminate the employment of the employees of the Business. Buyer shall
offer employment to all employees of the Business, except Sheldon B. Taylor and
George H. Angelhoff, on the Closing Date on substantially similar terms and
conditions of employment as those previously provided by Seller. All such
employees offered and accepting employment with Buyer shall be referred to
herein as "TRANSFEREE EMPLOYEES."

         6.2 COBRA OBLIGATIONS.

             (a) Buyer will be solely responsible for any obligations for
continuation coverage under Section 4980B of the Tax Code and part 6 of Subtitle
B of Title I of ERISA with respect to Transferee Employees.

             (b) Seller will be solely responsible for any obligations for
continuation coverage under Section 4980B of the Tax Code and part 6 of Subtitle
B of Title I of ERISA with respect to all employees other than Transferee
Employees.

         6.3 PLANS, BENEFITS AND POLICIES.

             (a) Buyer will, as of the Closing Date, adopt and provide a group
health plan for Transferee Employees.

             (b) Buyer will credit Transferee Employees with service with Seller
(and predecessors of Seller) for purposes of (i) vesting for and eligibility to
participate in any Pension Plan of Buyer, but not for purposes of benefit
accruals; (ii) any waiting periods, eligibility or pre-existing condition
limitations for any Welfare Plan of Buyer; and (iii) eligibility and benefit
computation for vacation and severance pay plans of Buyer; PROVIDED, HOWEVER,
that the foregoing shall not require Buyer to offer any of such plans to

                                      -18-
<PAGE>

Transferee Employees, except as provided in paragraph (a) above. Such
requirements identified in (i) and (ii) above shall only apply to plans
qualified under 401(a) of the Internal Revenue Code.

             (c) Except as otherwise provided herein, as of the Closing Date,
all Transferee Employees shall cease participation in Benefit Plans of Seller.
Except as set forth in Section 2.3, Seller shall retain all liabilities related
to its Benefit Plans.

             (d) After Closing, Buyer and Seller will cooperate with each other
and provide each other such information as is required concerning Transferee
Employees in order to determine whether a Transferee Employee is entitled to
compensation from either party or benefits under any plan, program or
arrangement sponsored or maintained by either party.

             (e) No provision in this Section 6.3 shall create any third-party
beneficiary rights in any employee or former employee (including any beneficiary
or dependent thereof) of Buyer, Seller or any of their respective Affiliates.

             (f) Buyer shall have no responsibility, liability or obligation
relative to the Benefit Plans, except as may be set forth in this Agreement.

                                   ARTICLE 7

                               COVENANTS OF SELLER

         7.1 CONDUCT OF BUSINESS.

             (a) Except as set forth on SCHEDULE 7.1 or as may be otherwise
expressly permitted by this Agreement or with the prior written consent of
Buyer, and subject to any order of the Bankruptcy Court which shall take
precedence over any provision of this Agreement, from the date hereof and prior
to the Closing, Seller will: (i) operate the Business only in the ordinary
course; (ii) use commercially reasonable efforts to preserve intact the
organization of the Business; (iii) continue in full force and effect all
existing insurance policies (or comparable insurance) of or relating to the
Business; (iv) preserve relationships with suppliers, customers, licensors and
licensees and others having business dealings with Seller relating to the
Business; and (v) repair or replace any material Transferred Asset damaged or
destroyed.

             (b) Without limiting the generality of Section 7.1(a), and except
as may be otherwise expressly permitted by this Agreement or approved by the
Bankruptcy Court or with the prior written consent of Buyer, which shall not be
unreasonably withheld, delayed or conditioned, from the date hereof through the
Closing, Seller shall not, with respect to the Business:

                          (i) enter into any material transaction in connection
             with the Business outside the ordinary course of business;

                          (ii) conduct the Business in a manner that departs
             materially from the manner in which the Business was being
             conducted prior to the date of this Agreement;

                          (iii) sell, lease, transfer, mortgage or assign any of
             the Transferred Assets, tangible or intangible, other than in the
             ordinary course of business;

                                      -19-
<PAGE>

                          (iv) cancel, compromise, knowingly waive or lease any
             material right or claim (or series of related rights and claims)
             under Material Contracts, outside the ordinary course of business;

                          (v) make any material change in the rate of
             compensation, commission, bonus or other direct or indirect
             remuneration payable, to or in respect of any employee of the
             Business, other than the increases and payments in the ordinary
             course of business consistent with past practice since the Filing
             Date;

                          (vi) enter into any contract or obligation related to
             the Business or the Transferred Assets that can reasonably be
             expected to create an obligation in excess of $100,000;

                          (vii) make or agree to make any capital expenditure in
             excess of $100,000; or

                          (viii) agree to do any of the foregoing.

             (c) In the event that Seller wishes to engage in any act which
falls within the provisions of Section 7.1(b), Seller shall provide notice
thereof to Buyer who shall advise Seller within three business days of any
objection Buyer has with respect to such action. In the event that Buyer fails
to object within such period, Buyer shall be deemed to have waived any objection
to such act.

         7.2 ACCESS. Subject to reasonable notice and as permitted by law,
Seller shall afford to Buyer and its accountants, counsel and other agents and
representatives full access during normal business hours throughout the period
prior to the Closing Date to all of the properties, books, contracts,
commitments and records of the Business and, during such period, Seller shall
furnish promptly to Buyer and its representatives in relation to the Business
access to all other information concerning the business, properties and
personnel of the Business as Buyer may reasonably request. Seller shall promptly
upon request provide Buyer access to a true, complete and correct copy of each
written agreement or other instrument, together with all amendments or
clarifications thereto, and a true, complete and correct summary of the terms
and conditions of each oral agreement, identified in the Disclosure Schedule. If
access is restricted due to a term in the agreement or by Applicable Law, Seller
shall use its commercially reasonable efforts to secure consent from the other
party(ies) to the agreement to provide such access prior to Closing with
sufficient time for Buyer review. Buyer will treat the documents and other
material and information referred to in this Section 7.2 as confidential in
compliance with Section 9.10.

                                   ARTICLE 8

                               COVENANTS OF BUYER

         8.1 INVESTIGATION. In conducting its review of the Business, Buyer
shall conduct itself so as to not unreasonably interfere with the Business or
with the performance of Seller's employees.

         8.2 ASSISTANCE WITH RESPECT TO EXCLUDED ASSETS. Following the Closing
Date, upon the request of Seller, Buyer will use its commercially reasonable
efforts to assist Seller in connection with collection, maintenance or
liquidation of the Excluded Assets. If Buyer receives payment in respect of such
items following the Closing, Buyer shall promptly pay such amounts to Seller and
shall notify

                                      -20-
<PAGE>

promptly each such payor that any and all payments by that payor to Seller in
the future should be made directly to Seller.

                                   ARTICLE 9

                            COVENANTS OF BOTH PARTIES

         9.1 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party will use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under Applicable Law and the terms of
this Agreement to consummate the Contemplated Transactions, including at any
time and from time to time after the Closing the execution and delivery of any
further instruments or documents which are reasonably requested by a party or
its counsel to any party signatory hereto in order to evidence or facilitate the
consummation of the Contemplated Transactions.

         9.2 GOVERNMENTAL FILINGS. Buyer and Seller shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any Material
Contracts, in connection with the consummation of the Contemplated Transactions
and (ii) in taking such actions or making any such filings, in furnishing such
information as may be required in connection therewith, and in seeking timely to
obtain any such actions, consents, approvals or waivers.

         9.3 PUBLIC ANNOUNCEMENTS. None of Buyer, Seller nor any of their
Affiliates will issue any press release or make any public statement with
respect to this Agreement or the Contemplated Transactions to any Person or
entity prior to the Closing and, after the Closing, will not issue any such
press release or make any such public statement without the prior consent of the
other party (which consent shall not be unreasonably withheld or delayed),
subject to disclosures required in connection with the Bankruptcy Case. In
addition and subject to Section 9.9(a), prior to the Closing Date: 1) Seller may
inform its employees of the Contemplated Transactions; and 2) Buyer may engage
in transitional discussions with Seller's employees in any reasonable manner
deemed appropriate and necessary by Buyer.

         9.4 USE OF BUSINESS NAMES BY BUYER.

             (a) Buyer acknowledges that Seller has asserted the absolute and
exclusive proprietary right to all names, marks, trade names, trademarks,
service names and service marks (collectively, "NAMES") incorporating "American
Architectural Products Corporation" or "AAPC" or any similar Name and to all
corporate symbols or logos (collectively, "LOGOS") incorporating "American
Architectural Products Corporation" or "AAPC" or any similar Name. All rights of
Seller and its Affiliates to the same and the goodwill represented thereby and
pertaining thereto are being retained by Seller or its Affiliates. Buyer agrees
that it will not, and will cause the Business following the Closing not to, use
the American Architectural Products Corporation or AAPC Name or any similar Name
or any Logo incorporating such Name or any similar Name in any manner, including
in connection with the sale of any products or services or otherwise in the
conduct of the Business, except as expressly permitted by subsection (b) of this
Section 9.4.

             (b) For a period of six months from the Closing Date (the "WINDOW
PERIOD"), Seller shall and hereby irrevocably grants to Buyer, effective as of
the Closing Date, on a fully-paid, non-

                                      -21-
<PAGE>

exclusive, royalty-free basis, the non-exclusive right to use the American
Architectural Products Corporation and AAPC Logos and the American Architectural
Products Corporation and AAPC Names in connection with the operation of the
Business as currently conducted including, during the Window Period, (i) to
market and sell all such services and products produced by the Business and (ii)
to use any other assets on hand included in the Transferred Assets, including,
without limitation, any catalogs, invoices, packaging material or stationery,
bearing the American Architectural Products Corporation and AAPC Names or
American Architectural Products Corporation and AAPC Logos PROVIDED, HOWEVER,
that Buyer shall use its commercially reasonable efforts to cease its use of the
American Architectural Products Corporation and AAPC Names and the American
Architectural Products Corporation and AAPC Logos within the Window Period.
Immediately upon the expiration of the Window Period, Buyer shall cease to use
in any manner the American Architectural Products Corporation and AAPC Names and
the American Architectural Products Corporation and AAPC Logos incorporating
such Names and remove or obliterate such Names and the American Architectural
Products Corporation and AAPC Logos from any products or other Assets and
clearly and prominently mark the new name of the Business thereon. Except as set
forth in this Section 9.4, at all times following the Closing, Buyer shall not
indicate that Buyer or the Business is affiliated with Seller or any of its
Affiliates.

             (c) On the Closing Date, Seller shall modify the formal corporate
or trade names, as the case may be, of AWS in all jurisdictions where those
names are registered and shall make such names available for Buyer's immediate
use.

         9.5 CONSENTS; COOPERATION. Seller and Buyer will use their commercially
reasonable efforts:

             (a) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all authorizations, consents, orders, permits or
approvals of, or notices to, or filings, registrations or qualifications with,
all Governmental Authorities (including, without limitation, the approval of the
Bankruptcy Court) and any other Person or entity that are required on their
respective parts, for the consummation of the Contemplated Transactions;

             (b) to defend, consistent with applicable principles and
requirements of law, any lawsuit or other legal proceeding, whether judicial or
administrative, whether brought derivatively or on behalf of third Persons
(including Governmental Authorities) challenging this Agreement or the
Contemplated Transactions;

             (c) to furnish to each other such information and assistance as may
reasonably be requested in connection with the foregoing; and

             (d) to reasonably assist each other as necessary with regard to the
determination of contract or order closeouts or other issues which affect the
Assumed Contracts, to notify Buyer of additional disallowances or potential
adverse audit findings, and to consult and reach agreement with respect to
advanced coordination of negotiating positions, offers of compromise, or final
agreements or settlements, all such cooperation to be at a reasonable charge to
the party receiving such cooperation.

         9.6 COMMUNICATIONS WITH CUSTOMERS AND SUPPLIERS. Buyer may engage in
communications with suppliers and customers of the Business relating to this
Agreement and the Contemplated Transactions prior to the Closing Date.

                                      -22-
<PAGE>

         9.7 LIABILITY FOR TRANSFER TAXES.

             (a) The parties shall cooperate and use commercially reasonable
efforts to avail themselves of the exemption from transfer taxes contained in
Section 1146(c) of the Bankruptcy Code. Buyer shall pay in a timely manner all
title search, title policy, sales, use, value added, documentary, stamp, gross
receipts, foreign withholding, registration, transfer, conveyance, excise,
recording, license, property and other similar Taxes and fees (including without
limitation any goods and services tax ("TRANSFER TAXES") arising out of or in
connection with or attributable to the Contemplated Transactions. Each party
hereto shall prepare and timely file all Tax Returns required to be filed in
respect of Transfer Taxes that are the primary responsibility of such party
under Applicable Law, PROVIDED, HOWEVER, that such party's preparation of any
such Tax Returns shall be subject to the other party's approval which approval
shall not be unreasonably withheld, conditioned or delayed.

             (b) The Transferred Assets are composed of (i) assets as to which
the "isolated, casual or occasional sale" exemption or similar exemption from
Transfer Taxes is or may be applicable and (ii) other assets as to which other
exemptions from Transfer Taxes are or may be applicable. In order to obtain any
exemption or favorable tax rate, Buyer shall, to the extent consistent with
Applicable Law, provide Seller with any exemption or resale certificate, permit,
license or such other documentation as may be required by any taxing authority
to establish the right to such exemption or tax rate.

         9.8 BOOKS AND RECORDS. Subject to the confidentiality provisions
hereof, Seller shall have the right to retain copies of the Books and Records.
From and after the Closing and until the second anniversary thereof, (a) Seller
agrees to grant to Buyer, upon reasonable notice and during normal business
hours, reasonable access to any books and records that pertain to the Business,
but which are not Books and Records, to the extent it is operating and has books
and records in its possession, and (b) Buyer agrees to grant to Seller or its
estate, upon reasonable notice and during normal business hours, reasonable
access to any Books and Records included in the Transferred Assets that pertain
to the operations of the Business on or prior to the Closing Date.

         9.9 TAX MATTERS.

             (a) Seller and Buyer shall provide each other and their Affiliates
with such assistance and documents, without charge and in a timely fashion, as
may be reasonably requested by either of them in connection with (i) the
preparation of any Tax Return, (ii) the conduct of any procedure relating to
Taxes, or (iii) any other matter that is the subject of this Agreement. Such
assistance shall include, without limitation: (x) the provision on demand of
books, records, Tax Returns, documentation or other information relating to any
relevant Tax Return ("TAX DATA"); (y) the execution of any document that may be
necessary or reasonably helpful in connection with the filing of any Tax Return,
or in connection with any procedure relating to Taxes, including, without
limitation, the extensions of applicable statutes of limitations; and (z) the
use of reasonable efforts to obtain any documentation from any Governmental
Authority or other Person that may be necessary or reasonably helpful in
connection with the foregoing. Such cooperation shall include, without
limitation, making their respective employees and independent auditors
reasonably available on a mutually convenient basis for all reasonable purposes,
including, without limitation, to provide explanations and background
information and to permit the copying of books, records, schedules, workpapers,
notices, revenue agent reports, settlement or closing agreements and other
documents containing the Tax Data ("TAX DOCUMENTATION"). If a third party is
retained in connection with

                                      -23-
<PAGE>

any review hereunder, the party retaining such third party shall be responsible
for any fees and expenses for such third party.

             (b) Seller and Buyer shall retain or cause to be retained the Tax
Data, the Tax Documentation, all Tax Returns, schedules and workpapers, and all
material records or other documents relating thereto, until one year after the
Closing Date or until the expiration of any additional period that either Buyer
or Seller, as the case may be, may reasonably request in writing with respect to
specifically designated material records or documents; PROVIDED, HOWEVER, that
in the event a party notifies the other party that an audit, examination,
investigation or other proceeding has been instituted prior to the first
anniversary of the Closing Date, the Tax Data and Tax Documentation relating
thereto shall be retained until there is a final determination thereof (and the
time for any appeal has expired). After the expiration of the time when the Tax
Data and the Tax Documentation must be retained pursuant to this Section 9.9,
then any such material may be destroyed. Seller shall give Buyer not less than
thirty (30) day's prior written notice before Tax Data or Tax Documentation, in
the possession or control of any member of the consolidated group of which AAPC
is the common parent, is destroyed and shall give Buyer an opportunity to copy
any such material during such thirty (30) day period.

         9.10 CONFIDENTIALITY.

             (a) Between the date of this Agreement and the Closing Date, Buyer
and Seller will maintain in confidence, and will cause their respective
Affiliates, directors, officers, employees, agents and advisors to maintain in
confidence, and not use to the detriment of another party any written, oral, or
other information obtained in confidence from another party in connection with
this Agreement or the Contemplated Transactions, unless (i) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(ii) the use of such information is necessary or appropriate in making any
filing or obtaining any consent or approval required for the consummation of the
Contemplated Transactions (including, without limitation, Bankruptcy Court
approval of any of the Contemplated Transactions), or (iii) the furnishing or
use of such information is required by legal proceedings, PROVIDED, HOWEVER,
that the party required to disclose the confidential information shall first
notify the other party of such order and afford the other party the opportunity
to seek a protective order relating to such disclosure. Notwithstanding anything
herein to the contrary, Seller shall not be under any restrictions with respect
to disclosures to the Committee, the Bankruptcy Court in the Bankruptcy Case or
any prospective purchaser of the Business (and their respective agents and
representatives) (provided that any such prospective purchaser enters into a
confidentiality agreement with terms substantially similar to the Prior
Confidentiality Agreement). Buyer acknowledges that Seller will file this
Agreement with the Bankruptcy Court in furtherance of obtaining the Sale Order
or other appropriate relief from the Bankruptcy Court.

             (b) If the Contemplated Transactions are not consummated, each
party will immediately return or destroy all such confidential information and
any and all copies thereof, however stored, and, if requested by the other
party, shall certify conformity with this Section 9.9(b) in writing.

             (c) The provisions of this Article 9.10 are in addition to, and not
in lieu of, the provisions of the Confidentiality Agreement dated June 4, 2002,
between Buyer and Seller related to the Contemplated Transactions (the "PRIOR
CONFIDENTIALITY AGREEMENT"). From and after the Closing Date, the Prior
Confidentiality Agreement shall be of no further force or effect.

                                      -24-
<PAGE>

             9.11 TRANSITION PERIOD ASSISTANCE. Seller agrees that during the
60-day period beginning on the Closing Date it will reasonably cooperate, and
cause its officers, directors and other representatives to reasonably cooperate,
with Buyer in transitioning to Buyer payroll and other general corporate
services pertaining to the Business.

                                   ARTICLE 10

                    BUYER PROTECTIONS: OVERBIDDING PROCEDURES
                                AND BREAK-UP FEES

         10.1 BANKRUPTCY COURT APPROVALS.

             (a) The obligations of Buyer hereunder are subject to, and
conditioned upon (i) the entry of an order of the Bankruptcy Court, in form and
substance reasonably satisfactory to Buyer (the "BIDDING PROCEDURES ORDER"), (A)
approving and expressly incorporating the procedures and provisions set forth in
Section 10.2 hereof, including, without limitation, the provisions regarding the
payment of a Break-Up Fee, (B) authorizing the allowance and ordering the
payment of a Break-Up Fee in accordance with the provisions of Section 10.2(d)
(subject to any limitations imposed by the Bankruptcy Court), and (C) granting
Buyer a claim for such amounts pursuant to Sections 503(b)(1), 507(a)(1), and
105 of the Bankruptcy Code, and (ii) the Bidding Procedures Order becoming final
and no longer subject to appeal (unless Buyer, in its sole discretion, shall
elect to waive some or all of the conditions set forth in this Section 10.1)
(the conditions set forth in this Section 10.1(a) being referred to herein as
the "BIDDING PROCEDURES ORDER APPROVAL").

             (b) The obligations of Buyer and Seller to consummate the
Contemplated Transactions (other than the obligations of the Seller under
Section 10.2(d)) are subject to and conditioned upon (i) the hearing before the
Bankruptcy Court to approve the Sale Order (the "SALE HEARING") occurring on or
before DECEMBER 6, 2002, (ii) the entry of an order (the "SALE ORDER") of the
Bankruptcy Court, in form and substance reasonably satisfactory to Buyer, (A)
approving this Agreement and the Contemplated Transactions, (B) transferring the
Transferred Assets to Buyer free and clear of all interests and Liens (except
Permitted Encumbrances), and subject to the Assumed Liabilities, pursuant to
Sections 105, 363 and 365 of the Bankruptcy Code, (C) authorizing Seller to
assume and assign to Buyer and Buyer to assume all of the Assumed Contracts
pursuant to Section 365 of the Bankruptcy Code, (D) finding that good and
sufficient notice of the application for approval of the Sale Order has been
given to all Persons to whom such notice is required under the rules and
procedures of the Bankruptcy Court or otherwise to effectuate the Contemplated
Transactions, and (E) finding that this Agreement was entered into in good faith
by the parties and was not the result of any improper agreements or actions,
such that the parties are afforded the protections set forth in Section 363(m)
of the Bankruptcy Code, and (iii) such Sale Order becoming final and no longer
subject to appeal on or before DECEMBER 17, 2002, or, if there shall be an
appeal of the Sale Order, such order shall not have been stayed pending such
appeal (the conditions set forth in this Section 10.1(b) being referred to
herein as the "SALE ORDER APPROVAL").

             (c) Within five (5) business days after the date hereof, Seller
shall file with the Bankruptcy Court (i) a motion, notices and proposed order,
for the Bidding Procedures Order in accordance with Section 10.1(a) above (the
"BIDDING PROCEDURES MOTION"), and (ii) a motion, notices and proposed order for
the Sale Order as described in Section 10.1(b) above (the "SALE MOTION"). Seller
shall use commercially reasonable efforts to obtain the Bidding Procedures Order
Approval and Sale Order

                                      -25-
<PAGE>

Approval, and Buyer shall cooperate with Seller in obtaining such orders and
approvals. Seller shall give notice of the Bidding Procedures Motion and the
Sale Motion to all parties on the official service list as maintained in the
Bankruptcy Case and all non-debtor parties to Assumed Contracts and other
Persons to whom notice may be required under all applicable rules and orders of
the Bankruptcy Court to obtain the Bidding Procedures Order Approval and Sale
Order Approval, to render such orders valid and enforceable and to implement the
Contemplated Transactions.

         10.2 BIDDING PROCEDURES. Seller acknowledges that this Agreement is the
culmination of an extensive process undertaken by Seller to identify and
negotiate a transaction with a bidder who was prepared to pay the highest and
best purchase price for the Transferred Assets while assuming or otherwise
satisfying certain liabilities in order to maximize the value of those assets.
Set forth below are the bidding procedures (the "BIDDING Procedures") to be
employed with respect to this Agreement concerning the sale of the Transferred
Assets to Buyer (the "SALE"). The Sale is subject to competitive bidding only as
set forth herein and approval by the Bankruptcy Court at the Sale Hearing under
Sections 105, 363, and 365 of the Bankruptcy Code. The following overbid
provisions and related bid protections are designed to compensate Buyer for its
efforts and agreements to date and to facilitate a full and fair process
designed to maximize the value of the Transferred Assets for the benefit of
Seller's creditors and stakeholders.

             (a) BID DEADLINE. All Bids must be submitted to Seller, c/o
American Architectural Products Corporation, 860 Boardman-Canfield Road, Boca
Building, Suite 107, Boardman, Ohio 44512, to the attention of its General
Counsel and to Seller's counsel, Squire, Sanders & Dempsey L.L.P., and Conway,
Del Genio, Gries & Co., LLC, Seller's financial advisor, so as to be received
not later than 11:00 a.m., prevailing Eastern time on the date which is five (5)
business days prior to the date scheduled by the Bankruptcy Court for the Sale
Hearing, which date may change from time to time (the "BID DEADLINE"). Seller
will immediately distribute by facsimile transmission, personal delivery or
reliable overnight courier service in accordance with the notice procedures set
forth in Section 15.2 a copy of each Bid upon receipt to (i) counsel to the
Committee and (ii) counsel to Buyer. For purposes of this Agreement, "BID" shall
mean a letter from a Person who the Board of Directors of Seller has determined
in the exercise of its fiduciary duty is financially able to consummate the
Contemplated Transactions (a "QUALIFIED BIDDER") stating that (A) such Qualified
Bidder offers to purchase the Transferred Assets upon the terms and conditions
set forth in this Agreement, together with all Schedules and Exhibits hereto
(the "DEFINITIVE SALE DOCUMENTATION"), marked to show those amendments and
modifications to the Definitive Sale Documentation, including, but not limited
to, price and the time of closing, that such Qualified Bidder proposes, (B) such
Qualified Bidder is prepared to enter into and consummate the Contemplated
Transactions within not more than eleven (11) days after approval by the
Bankruptcy Court of a sale order, subject to receipt of any Consents of
Governmental Authorities (which must be obtained within sixty (60) days of the
approval by the Bankruptcy Court of a sale order), and (C) such Qualified
Bidder's offer is irrevocable until the closing of a purchase of the Transferred
Assets.

             (b) QUALIFIED BID. Only Qualified Bids will qualify for
consideration at the Auction. For purposes of this Agreement, a "QUALIFIED BID"
is a Bid that:

                          (i) complies in all respects with Section 10.2(a);

                          (ii) has a cash component of at least an amount
             sufficient to pay a Break-Up Fee to Buyer in accordance with
             Section 10.2(d) and provides for payment, in full, of such Break-Up
             Fee directly to Buyer at closing;

                                      -26-
<PAGE>

                          (iii) is a proposal that Seller determines, in the
             good faith opinion of the Board of Directors of Seller after
             consultation with the independent financial advisor of Seller and
             the Committee, is under all circumstances, on balance, a higher and
             better Bid and has a value greater than or equal to the sum of (x)
             the value, as reasonably determined by the independent financial
             advisor of Seller, of Buyer's offer plus (y) the amount of the
             Break-Up Fee payable to Buyer pursuant to Section 10.2(d) plus (z)
             $200,000 over the preceding Qualified Bid;

                          (iv) is substantially on the same or better terms and
             conditions as those set forth in the Definitive Sale Documentation;

                          (v) is accompanied by satisfactory evidence of
             committed financing or other ability to perform; and

                          (vi) is accompanied by a deposit (by means of a
             certified bank check from a U.S. bank or by wire transfer) equal to
             or greater than the Break-Up Fee payable to Buyer pursuant to
             Section 10.2(d). Such deposit shall either be returned to the
             Qualified Bidder in the event the Qualified Bidder's Bid is not
             determined to be the best Qualified Bid, or retained by Seller at
             the Closing and applied toward the Purchase Price.

             If Seller does not receive any Qualified Bids, no Auction will be
conducted, Seller will report the same to the Bankruptcy Court and will proceed
with a sale and assignment of the Transferred Assets to Buyer pursuant to the
terms of this Agreement. This Agreement executed by Buyer shall constitute a
Qualified Bid for all purposes.

             (c) AUCTION, BIDDING INCREMENTS, AND BIDS REMAINING OPEN.

                          (i) If Seller receives a Qualified Bid, Seller will
             conduct an auction (the "AUCTION") at the location designated by
             Seller at least 3 business days prior to the Auction, on the date
             that is one (1) business day prior to the date scheduled by the
             Bankruptcy Court for the Sale Hearing, beginning at 11:00 a.m.,
             prevailing Eastern time, or such later time or other place as
             Seller shall notify all Qualified Bidders who have submitted
             Qualified Bids. Only Buyer, Seller, representatives of the
             Committee, and a representative from the U.S. Trustee's office (via
             telephone conference) and any Qualified Bidders who have timely
             submitted Qualified Bids and their respective counsel shall be
             entitled to attend the Auction, and only Buyer and Qualified
             Bidders will be entitled to make any subsequent Qualified Bids at
             the Auction. The opening bid, which does not need to be
             re-submitted at the Auction, is the highest Qualified Bid submitted
             before the Auction by a Qualified Bidder (the "OPENING BID"), which
             must include (A) the Break-up Fee and (B) an incremental increase
             in the Purchase Price of not less than $200,000 (the "OVERBID
             INCREMENT"). Bidding at the Auction will continue until such time
             as the highest and best Qualified Bid is determined. Seller may
             announce at or prior to the Auction additional procedural rules
             that are reasonable under the circumstances (e.g., the amount of
             time allotted to make subsequent overbids) for conducting the
             Auction so long as such rules are not inconsistent with these
             Bidding Procedures.

                                      -27-
<PAGE>

                          (ii) After the Opening bid, all subsequent bids must
             exceed the previous bid by not less than the Overbid Increment. Any
             bid by Buyer over the Opening Bid must be in an amount not less
             than the last bid plus the Overbid Increment (giving Buyer non-cash
             credit for the Break-Up Fee). For the duration of the Auction, all
             bids by either a Qualified Bidder or Buyer include the Break-Up
             Fee. If Buyer is the successful bidder at the close of the Auction,
             Buyer's winning bid will be reduced by the Break-Up Fee.

                          (iii) At least one (1) business day prior to the
             Auction, Seller will give Buyer and all other Qualified Bidders a
             copy of the highest and best Qualified Bid received and copies of
             all other Qualified Bids. In addition, Seller will inform Buyer and
             each Qualified Bidder who has expressed its intention to
             participate in the Auction of the identity of all Qualified Bidders
             that may participate in the Auction.

             (d) BREAK-UP FEE.

                          (i) If this Agreement is terminated pursuant to either
             Section 13.1(c)(i) because any condition in Section 11.1, 11.2,
             11.4, 11.7, 11.8 or 11.9 is not satisfied , or Section 13.1(d) then
             Seller shall be obligated to pay to Buyer, a break-up fee (a
             "BREAK-UP FEE") of $250,000, in order to reimburse Buyer for its
             reasonable out-of pocket expenses in connection with due diligence
             and the negotiation and preparation of this Agreement (including,
             but not limited to, the expense of accountants, consultants, and
             other experts, and the obtaining of related financing), and the
             value added by Buyer (A) in establishing a bid standard or minimum
             for other bidders, (B) in placing Seller's estate property in a
             sales configuration mode attracting other bidders to the Auction
             and (C) for serving, by its name and expressed interest, as a
             catalyst for other potential or actual bidders.

                          (ii) If a Break-Up Fee is owed pursuant to the
             provisions of this Section 10.2(d), it shall be allowed and paid as
             an administrative expense of Seller under Section 503(b)(1) of the
             Bankruptcy Code upon the termination of this Agreement.

                                   ARTICLE 11

                   CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE

         The obligations of Buyer to purchase the Business and the Transferred
Assets and otherwise consummate the transactions that are to be consummated at
the Closing are subject to the satisfaction, as of the Closing Date, of the
following conditions (any of which may be waived by Buyer, in its sole
discretion, in whole or in part):

         11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Seller set forth in Article 4 shall be accurate in all
material respects as of the Closing, as though made on and as of the Closing
Date, except to the extent in Section 4.5 of this Agreement that any of such
representations and warranties refers specifically to a date other than the
Closing Date, in which case such representation or warranty shall have been
accurate in all material respects as of such other date.

         11.2 PERFORMANCE. Seller shall have performed in all material respects
all obligations required by this Agreement to be performed by Seller on or
before the Closing Date.

                                      -28-
<PAGE>

         11.3 NO CONFLICT. The Contemplated Transactions and the consummation of
the Closing shall not be illegal or prohibited under any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or any
competent Governmental Authority or any other legal restraint or prohibition
preventing the transfers contemplated hereby or the consummation of the Closing
shall be in effect, and there shall be no pending or threatened actions or
proceedings by any Governmental Authority (or determinations by any Governmental
Authority).

         11.4 CERTIFICATE. Buyer shall have received from a duly authorized
officer of Seller a certificate dated the Closing Date confirming that the
conditions in Sections 11.1, 11.2 and, to Seller's Knowledge, 11.3 have been
met.

         11.5 BANKRUPTCY COURT APPROVAL. The Bankruptcy Court shall have entered
the Sale Order, in form and substance reasonably satisfactory to Buyer, and the
implementation, operation or effect of such order shall not be stayed or any
stay entered shall have been dissolved.

         11.6 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Seller in connection with the Contemplated
Transactions that are identified on SCHEDULE 11.6 shall have been obtained and
shall be in full force and effect, except where the failure to obtain such
consents did not and would not reasonably be expected to result in a Material
Adverse Effect on the Business.

         11.7 TRANSFER DOCUMENTS. Seller shall have delivered to Buyer at the
Closing all documents, certificates and agreements necessary to transfer to
Buyer all of Seller's right and title to and interests in the Transferred Assets
free and clear of all Liens, except Permitted Encumbrances or those assumed by
Buyer, including, without limitation:

             (a) bills of sale, assignments and general conveyances, in form and
substance reasonably satisfactory to Buyer, dated the Closing Date, with respect
to the Transferred Assets;

             (b) assignments of all Assumed Contracts and any other agreements
and instruments constituting Transferred Assets, dated the Closing Date,
assigning to Buyer all of Seller's right, title and interest therein and
thereto;

             (c) certificates of title to all owned motor vehicles, if any,
included in the Transferred Assets to be transferred to Buyer hereunder, duly
endorsed for transfer to Buyer as of the Closing Date; and

             (d) quit claim real property deeds transferring all of Seller's
interest in the owned transferred real property to Buyer.

         11.8 TRANSACTION DOCUMENTS. Buyer and Seller shall have entered into
the Transaction Documents.

         11.9 FURTHER INSTRUMENTS. Seller shall deliver to Buyer such further
instruments of assignment, conveyance or transfer or other documents of further
assurance as Buyer may reasonably request.

                                      -29-
<PAGE>

         11.10 TRANSITION SERVICES AGREEMENT. SELLER AND AAPC SHALL EXECUTE AND
DELIVER TO BUYER THE TRANSITION SERVICES AGREEMENT SUBSTANTIALLY IN THE FORM OF
EXHIBIT E TO BE ATTACHED TO THIS AGREEMENT (THE "TRANSITION SERVICES
AGREEMENT").

                                   ARTICLE 12

                  CONDITIONS TO OBLIGATIONS OF SELLER TO CLOSE

         The obligation of Seller to sell the Transferred Assets and otherwise
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction, as of the Closing Date, of the following conditions (any of
which may be waived by Seller upon consultation with the Committee, in their
sole discretion in whole or in part):

         12.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer set forth in Article 5 shall be accurate in all material
respects as of the Closing, as though made on and as of the Closing Date, except
to the extent that any of such representations and warranties refers
specifically to a date other than the Closing Date, in which case such
representation or warranty shall have been accurate in all material respects as
of such other date.

         12.2 PERFORMANCE. Buyer shall have performed in all material respects
all obligations required by this Agreement to be performed by Buyer on or before
the Closing.

         12.3 NO CONFLICT. The Contemplated Transactions and the consummation of
the Closing shall not be illegal or prohibited under any Applicable Law. No
temporary restraining order, preliminary or permanent injunction, cease and
desist order or other order issued by any court of competent jurisdiction or any
competent Governmental Authority or any other legal restraint or prohibition
preventing the transfer contemplated hereby or the consummation of the Closing,
or imposing damages in respect thereto, shall be in effect, and there shall be
no pending or threatened actions or proceedings by any Governmental Authority
(or determinations by any Governmental Authority) that would reasonably be
expected to have a material adverse effect on the Contemplated Transactions.

         12.4 CERTIFICATE. Seller shall have received from a duly authorized
officer of Buyer a certificate dated the Closing Date confirming that the
conditions in Sections 12.1, 12.2 and, to Buyer's actual knowledge, 12.3 have
been met.

         12.5 BANKRUPTCY COURT APPROVAL. The Bankruptcy Court shall have entered
the Sale Order, in form and substance reasonably satisfactory to Seller, and the
implementation, operation or effect of such order shall not be stayed or any
stay entered shall have been dissolved.

         12.6 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Buyer in connection with the Contemplated
Transactions that are identified on SCHEDULE 11.6 shall have been obtained and
shall be in full force and effect, except where the failure to obtain such
consents did not and would not reasonably be expected to have a material adverse
effect on the Contemplated Transactions.

         12.7 ASSUMPTION AGREEMENT. Seller shall have received from Buyer an
assumption agreement, in form and substance reasonably satisfactory to Seller,
under which Buyer shall have assumed the Assumed Liabilities.

                                      -30-
<PAGE>

         12.8 TRANSACTION DOCUMENTS. Buyer and Seller shall have entered into
the other Transaction Documents.

         12.9 FURTHER INSTRUMENTS. Buyer shall deliver to Seller such further
instruments of assumption or other documents as Seller may reasonably request.

         12.10 PAYMENT. Seller shall have received immediately available funds
by wire transfer in accordance with Section 3.2 hereto in the amount of the Cash
Portion of the Purchase Price, plus or minus as applicable, the Estimated
Working Capital Adjustment, less the Deposit.

         12.11 TRANSITION SERVICES AGREEMENT. BUYER shall execute and deliver to
AAPC and Seller the Transition Services Agreement.

                                   ARTICLE 13

                                   TERMINATION

         13.1 RIGHT TO TERMINATE AGREEMENT. This Agreement may be terminated and
the Contemplated Transactions may be abandoned at any time prior to the Closing
(the actual date on which this Agreement is terminated being referred to herein
as the "TERMINATION DATE"):

             (a) by Buyer or Seller, if the Closing has not occurred on or
before the date that is thirty (30) days after the Sale Order is entered (the
"OUTSIDE DATE"), unless such failure to close is due to the failure of the party
seeking to terminate this Agreement to comply fully with its obligations under
this Agreement;

             (b) by mutual written consent of Buyer and Seller, subject to any
necessary Bankruptcy Court approval;

             (c) (i) by Buyer, if any condition in Article 11 has not been
satisfied or if satisfaction of any such condition is or becomes impossible as
of the Outside Date (other than through the failure of Buyer to comply with
Buyer's obligations under this Agreement), and Buyer has not waived such
conditions on or before the Outside Date; or

                 (ii) by Seller, if any condition in Article 12 has not been
satisfied or if satisfaction of any such condition is or becomes impossible as
of the Outside Date (other than through the failure of Seller to comply with
Seller's obligations under this Agreement), and Seller has not waived such
conditions on or before the Outside Date; or

             (d) automatically, if the Bankruptcy Court shall have entered an
order approving a Competing Bid and the transactions contemplated by the
Competing Bid are subsequently consummated.

Notwithstanding anything to the contrary, any termination by Seller shall be
made only upon consultation with the Committee.

                                      -31-
<PAGE>

         13.2 RETURN OF DEPOSIT AFTER TERMINATION. SELLER SHALL PROMPTLY RETURN
THE DEPOSIT TO BUYER IN THE EVENT THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTIONS 13.1(A); 13.1(B); 13.1(C)(I); 13.1(C)(II), BUT ONLY BECAUSE ANY
CONDITION IN SECTION 12.3, 12.5, OR 12.6 IS NOT SATISFIED; OR 13.1(D).

                                   ARTICLE 14

                                  MISCELLANEOUS

         14.1 EXPIRATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties set forth in Articles 4 and 5 of this Agreement
shall terminate and expire, and shall cease to be of any force or effect, on the
Closing Date; all liability of the parties hereto with respect to such
representations and warranties shall thereupon be extinguished; and BUYER
ACKNOWLEDGES THAT IT HAS HAD SUFFICIENT OPPORTUNITY TO MAKE WHATEVER
INVESTIGATION MAY BE NECESSARY AND ADVISABLE FOR PURPOSES OF DETERMINING WHETHER
OR NOT TO ENTER INTO AND CLOSE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
The covenants provided for in Articles 6, 7, 8, 9 and 15 shall continue without
expiration or limit; PROVIDED HOWEVER, that nothing in this sentence shall
prevent Seller and/or any of its Affiliates from consummating a complete
liquidation.

         14.2 DISCLAIMER OF PROJECTIONS, ETC. Seller makes no representation or
warranty to Buyer except as specifically made in this Agreement. In particular,
Seller makes no representation or warranty to Buyer with respect to the contents
of Seller's descriptive materials and management presentations to Buyer or the
data room made available to Buyer, including the certainty or accuracy of any
financial projection or forecast delivered by or on behalf of Seller to Buyer.
Buyer acknowledges that (a) there are uncertainties inherent in attempting to
make such projections and forecasts, (b) it is familiar with such uncertainties,
(c) it is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts so furnished to it,
and (d) it shall have no claim against Seller with respect thereto.

                                   ARTICLE 15

                              AGREEMENT CONVENTIONS

         15.1 FURTHER ASSURANCES. Each party agrees, at any time and from time
to time after the Closing Date, upon reasonable request from the other party, to
do, execute, acknowledge and deliver, as appropriate, such further acts, deeds,
assignments, transfers, conveyances, assumptions, and powers of attorney as may
reasonably be required for (a) the better assigning, transferring, granting,
conveying, assuming, assuring and confirming to such other party, or its
successors and assigns, of any of the assets, properties or liabilities to be
assigned to it, or (b) the reassignment or return to Seller of assets that may
have been inadvertently assigned, transferred or delivered to Buyer but should
not have been so assigned, transferred or delivered, in each case as provided in
the Transaction Documents.

         15.2 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under the Transaction Documents
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (c) sent by next-day or overnight mail or
courier or (d) sent by facsimile transmission. All such notices, requests,
demands, waivers and other communication shall be deemed to have been received
(i) if by personal delivery, upon delivery, (ii) if by certified or registered
mail, on the

                                      -32-
<PAGE>

third business day after the mailing thereof, (iii) if by next-day or overnight
mail or courier, on the business day after such mailing, (iv) if by facsimile,
three hours after the sender receives a fax confirmation, unless the fax is sent
after 5:00 p.m. on a business day or on a non-business day, in which case it
shall be deemed received on the next business day.

         If to Buyer:

                  Monarch Manufacturing Company
                  P.O. Box 250
                  Waukee, IA 50263
                  Attention:  David S. Mulcahy, Chairman

                  Tel:  515-993-4561
                  Fax:  515-993-4372

         with a copy to:

                  Nyemaster, Goode, Voigts, West, Hansell & O'Brien , P.C.
                  700 Walnut Street, Suite 1600
                  Des Moines, IA  50309-3899
                  Attention:  Rod Kubat, Esq.

                  Tel:  515-283-3197
                  Fax:  515-283-3108

         If to Seller, to:

                  American Weather-Seal Company
                  6500 Brooktree Road
                  Suite 101
                  Wexford, PA  15090
                  Attention:  Joseph Dominijanni

                  Tel:  (724) 940-2330
                  Fax:  (724) 940-2340

                                      -33-
<PAGE>

with a copy to:

                  American Weather-Seal Company
                  860 Boardman-Canfield Road
                  Suite 107
                  Boca Building
                  Boardman, Ohio 44512
                  Tel:  (330) 965-9910
                  Fax:  (330) 965-9915
                  Attention:  Jonathan Schoenike, Esq.

and
                  Squire, Sanders & Dempsey L.L.P.
                  Two Renaissance Square
                  40 North Central Avenue, Suite 2700
                  Phoenix, AZ  85004-4498
                  Attention:  Jordan A. Kroop, Esq.

                  Tel:  (602) 528-4024
                  Fax:  (602) 253-8129

or, in each case, to such other address as may be specified in writing to the
other parties.

         Any party may give any notice, instruction or communication in
connection with the Transaction Documents using any other means (including
telecopy or ordinary mail), but no such notice, instruction or communication
shall be deemed to have been delivered unless and until it is actually received
by the party to whom it was sent. Any party may change the address to which
notices, instructions, or communications are to be delivered by giving the other
parties to the Transaction Documents notice thereof in the manner set forth in
this Section 15.2.

         15.3 ASSIGNMENT. This Agreement may not be assigned by any party
without the express written consent of the other party hereto; provided,
however, Buyer may assign its rights, duties and obligations under this
Agreement to a parent or affiliate corporation or company of Buyer. Subject to
the foregoing, this Agreement and the rights and obligations set forth herein
shall inure to the benefit of, and be binding upon, the parties hereto and each
of their respective successors, heirs and permitted assigns.

         15.4 ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW; ETC. The Transaction
Documents (together with the Exhibits and Schedules thereto) embody the entire
agreement and understanding between the parties hereto with respect to the
subject matter thereof. The Transaction Documents may be amended, modified,
waived, discharged or terminated only by (and any consent hereunder shall be
effective only if contained in) an instrument in writing signed by the party
against which enforcement of such amendment, modification, waiver, discharge,
termination or consent is sought. The Transaction Documents shall be construed
in accordance with and governed by the laws of the State of Ohio as it applies
to contracts to be performed entirely within Ohio.

                                      -34-
<PAGE>

         15.5 CONSENT TO JURISDICTION. THE BANKRUPTCY COURT SHALL HAVE
JURISDICTION OVER ALL MATTERS, INCLUDING, BUT NOT LIMITED TO, ANY LEGAL ACTION,
SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY AND THE
INTERPRETATION, IMPLEMENTATION AND ENFORCEMENT OF THIS AGREEMENT, AND THE
PARTIES HERETO IRREVOCABLY SUBMIT AND CONSENT TO SUCH JURISDICTION.

         Each of Buyer and Seller further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth in Section 15.2 of this Agreement shall be effective service
of process for any action, suit or proceeding with respect to any matters to
which it has submitted to jurisdiction as set forth above. Each of Buyer and
Seller irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement in the
Bankruptcy Court, and irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. In the
event that a court should find that subject matter jurisdiction is not available
in the Bankruptcy Court, Buyer and Seller hereby agree to submit any and all
disputes arising out of this Agreement to the jurisdiction and venue of the U.S.
District Court for the Northern District of Ohio.

         15.6 SEVERABILITY. Any term or provision of the Transaction Documents
that is invalid or unenforceable in any jurisdiction, as to such jurisdiction,
shall be ineffective to the extent of such invalidity or unenforceability,
without rendering invalid or unenforceable the remaining terms and provisions of
the Transaction Documents or affecting the validity or enforceability of any of
the terms or provisions of the Transaction Documents in any other jurisdiction.

         15.7 RELIANCE ON COUNSEL AND OTHER ADVISORS. Each party has consulted
such legal, financial, technical or other experts as it deems necessary or
desirable before entering into the Transaction Documents. Each party represents
and warrants that it has read, knows, understands and agrees with the terms and
conditions of the Transaction Documents.

         15.8 EXHIBITS AND SCHEDULES. Each of the Exhibits and Schedules
referred to in the Transaction Documents and attached thereto is an integral
part of the Transaction Documents and is incorporated in the respective
Transaction Documents by this reference.

         15.9 RULES OF CONSTRUCTION. Unless the context otherwise requires: (a)
a term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles; (c) references in the singular or to "him," "her," "it,"
"itself," or other like references, and references in the plural or the feminine
or masculine reference, as the case may be, shall also, when the context so
requires, be deemed to include the plural or singular, or the masculine or
feminine reference, as the case may be; (d) the use of the word "including"
shall mean including, without limitation, with regard to the items listed
thereafter; (e) provisions apply to successive events and transactions; (f)
references to Articles, Sections, Schedules and Exhibits in a Transaction
Document shall refer to Articles, Sections, Schedules and Exhibits of that
Transaction Document, unless otherwise specified; (g) the headings in the
Transaction Documents are for convenience and identification only and are not
intended to describe, interpret, define or limit the scope, extent, or intent of
the respective Transaction Documents or any provision thereof; (h) the
Transaction Documents shall be construed without regard to any presumption or
other rule requiring construction against the party that drafted and caused the

                                      -35-
<PAGE>

Transaction Documents to be drafted; (i) the use of the term "specific" in
relation to a subject means relating exclusively to that subject; and (j)
references to "commercially reasonable efforts" in the Transaction Documents
shall require the efforts that a prudent person desirous of achieving a
commercially reasonable result would use in similar circumstances to achieve a
result within a commercially reasonable time.

         15.10 COUNTERPARTS. The Transaction Documents may be executed in
several counterparts, each of which shall be an original, but all of which shall
constitute one instrument.

                           SIGNATURE PAGE TO FOLLOW

                                      -36-
<PAGE>

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

                               MONARCH MANUFACTURING COMPANY

                               By:
                                   -------------------------------------
                                   Name: David S. Mulcahy
                                   Title: Chairman

                               AMERICAN WEATHER-SEAL COMPANY

                               By:
                                   -------------------------------------
                                   Name: Joseph Dominijanni
                                   Title: President and Chief Executive Officer

                                      -37-

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