Document:

-- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 4.2 

Section I – ESTF 

Natural gas Transportation contract 

Firm transportation service 

	

	   
	
Contract Number: 			 

	
      1.      
	
ESTF – 04 – 2006 			 

	
      Identification:      
	  		 

	

	   
	
2.1 Corporate name 		
      2.2 Tax Identification 

	

	   

	
      2.Transporter:      
	
Empresa Colombiana 		
      804.005.081-6 

	

	   
	
de gas – Ecogas 			 

	

	   
	
2.3 Legal 		
      2.4 Identification 

	

	   
	
representative 			 

	

	   
	
Carlos Alberto Gomez 		
      13.810.800 of Bucaramanga 

	

	   
	
Gomez 			 

	

	   

	
      3. REMITTENT      
	
3.1 Corporate name 		
      3.2 Tax Identification 

	

	   
	
Ecopetrol S.A. 		
      899.999.086-1 

	

	   
	
3.3 Authorized Officer 		
      3.4 Identification 

	

	   
	
Camilo Marulanda 		
      10.008.868 of Pereira 

	

	   
	
Lopez 			 

	

	   

	
      4. Description      
	
4.1 Entry Node 		
      4.2 Exit Node 

	

	   
	
1. Ballena 		
      Barrancabermeja 

	

	   
	
2. For occasional 			 

	

	   
	
Entry Point detour: 			 

	

	   
	
Cusiana 			 

	

	   
	
4.3 Entry Point 		
      4.4 Exit Point 

	

	   
	
1. Exit flange of the 		
      1. Exit Flange of the measurers of 

	

	   
	
measurer located at 		
      Centragas in Barrancabermeja 

	

	   
	
the Centragas Ballena 			 

	

	   
	
Station 			 

	

	   
	
2. For occasional 		
      2. Hot tap done on the 20” line of 

	

	   
	
Entry Point detour: 		
      high-pressure gas between Centragas 

	

	   
	
will be the Entry 		
      and COGB located on the lands of 

	

	   
	
Flange of the scrapper 		
      Petrosantander and that transports 

	

	   
	
trap at the CPF of 		
      Gas towards Turbogas of the 

	

	   
	
Cusiana of the gas 		
      Barrancabermeja Management 

	

	   
	
pipeline Cusiana – El 		
      Complex (GCB) property of THE 

	

	   
	
Porvenir – La Belleza 		
      REMITTENT. 

	

	   
	 		
      Once the measurer is installed per 

	

	   
	 		
      numeral 2 of chapter 3 – Operative 

	

	   
	 		
      Conditions –, the Exit Point
    will be 

 

	 		 		
the exit Flange of said measurer, 	
	 		 		
unless otherwise agreed by the 	
	 		 		
Parties 		 	
	 		 		
3. On the derivation located on the 	
	 		 		
16” line between Centragas and the 	
	 		 		
COGB in the lands of Petrosantander 	
	 		 		
and that transports Gas toward GCB. 	
	 		 		
Once a measurer is installed per 	
	 		 		
numeral 2 of chapter 3 – Operative 	
	 		 		
Conditions –, the Exit Point will be 	
	 		 		
the exit Flange of said measurer, 	
	 		 		
unless otherwise agreed by the 	
	 		 		
Parties 		 	
	
5. Dates and 		
5.1 Date of contract 		
5.2 Date of Service initiation 	
	
terms 		 		 		 	
	 		
October 5, 2006 		
January 1, 2007 		 	
	 	
	 		
5.3 Execution Term 		
5.4 Trial Periods 		 	
	 		
From January 1, 2007 		
It does not have any 	
	 		
until November 30, 		 		 	
	 		
2007 		 		 	
	 	
	
6. Capacity 		
6.1 Contracted Firm 		 		 	
	 		
capacity (kpc/d) 		 		 	
	 		
See Annex IV 		 		 	
	 	
	
7. Charges 		
7.1 Fixed Charge 		
7.2 Variable Charge (US$/kpc) 	
	
and Contract 		
(US$/kpc/d/a) 		 		 	
	
Price 		 		 		 	
	 		
See Annex IV 		
See Annex IV 		 	
	 		
7.3 Charge per MO&M 		
7.4 Charge per reference Capacity 	
	 		
($/kpc) 		
(US$/kpc/d/a) 		 	
	 		
See Annex IV 		
126 		 	
	 		
7.5 Daily Charge per 		
7.6 Estimate Annual Contract Price 	
	 		
reference Capacity 		 		 	
	 		
(US$/kpc) 		 		 	
	 		 		
(US$/a) 		
      ($/a) 	

	 		
0.345 		
See Annex IV 		
      See Annex IV 	

	 	
	 		
8.1.1 Postal 		
8.1.2 Telephone 		 	
	
8. Addresses 		 		 		 	
	
8.1 		
Carrera 34 # 41 – 51 		
(1) 2344437-2344438 	
	
Transporter 		
Bucaramanga 		 		 	

 

	 		
      8.1.3 Fax      
	
8.1.4 Electronic 	
	 		
      (7) 6325525      
	
ssanabria@ecogas.com.co 	
	 	
	
8.2 		
      8.2.1 Postal      
	
8.2.2 Telephone 	
	
REMITTENT 		

	   
	 	
	 		
      Carrera 7 # 37 – 69      
	
(1) 2344437-2344438 	
	 		
      sixth floor      
	 	
	 		
      Bogotá      
	 	
	 	
	 		
      8.2.3 Commercial fax      
	
8.2.4 Commercial electronic 	
	 		
      (1) 2344492      
	
Claudia.castellanos@ecopetrol.com.co 	
	 	
	 		
      8.2.5 Operative      
	
8.2.6 Invoice Fax 	
	 		
      telephone      
	 	
	 		
      (1) 2344053-2344052      
	
(1) 2344500 	
	 	
	 		
      8.2.7 operative      
	 	
	 		
      electronic      
	 	
	 		
      ccg@ecopetrol.com.co      
	 	
	 	
	
9. Party 		

	   
	 	
	
Nature 		

	   
	 	
	
9.1 		
      Company organized as a public share company pursuant with       

	
REMITTENT 		
      Decree Law 1760 of 2003, modified by Decree 409 of 2006,       

	 		
      linked to the Ministry of Mines and Energy, ruled by its by-       

	 		
      laws by Public Deed No. 4832 of October 31, 2005 and Public       

	 		
      deed 5773 of December 23 of 2005 (clarification of article 32       

	 		
      and 38) granted in Notary Second of the Notary Circle of       

	 		
      Bogotá D.C., domiciled in Bogotá D.C.       

	 	
	
9.2 		
      Decentralized entity of national order, linked to the Ministry of       

	
Transporter 		
      mines and Energy as a Industrial and Commercial Company of       

	 		
      the State, with legal personality, administrative, financial and       

	 		
      patrimonial autonomy, denominated Empresa Colombiana de       

	 		
      Gas and with short name Ecogas, entity ruled by Law 401 of       

	 		
      1997      
	 	

 

CHAPTER I 

GENERAL CONDITIONS 

	
1.      		
IDENTIFICATION OF THE PARTIES	
	 
	 	
 The Parties: one Party, ECOPETROL
S.A. a company organized as a public share company pursuant with Decree Law 1760
of 2003, modified by Decree 409 of 2006, linked to
the Ministry of Mines and Energy, ruled by its by-laws by Public Deed No. 4832
of October 31, 2005 and Public deed 5773 of December 23 of 2005 (clarification
of article 32 and 38) granted in Notary Second of the Notary Circle of Bogotá D.C.,
domiciled in Bogotá D.C.
hereinafter and for the effects of this contract THE REMITTENT, represented by CAMILO
MARULANDA LOPEZ, of legal age, resident of
Bogotá, identified with the citizenship card
number 10.008.868, issued in Pereira, who, as Vice president of Supply and Marketing
and exercising the authorization included in the Administrative Control Manual,
acts in name and representing this Company, the other Party: Ecogas, Decentralized
 entity of national order, linked to the Ministry of mines and Energy as a Industrial
and Commercial Company of the State, with legal personality, administrative,
financial and patrimonial autonomy, denominated Empresa Colombiana de Gas and
with  short name Ecogas, entity ruled by Law 401 of 1997, with principal domicile
on Bucaramanga, represented by CARLOS ALBERTO
GOMEZ GOMEZ, of legal age, resident of Bucaramanga,
 identified with citizenship card number 13.810.800 of Bucaramanga, acting as
President of the Company, hereinafter THE TRANSPORTER, have agreed to undertake
this contract, taking into account the following	
	 
	
2.      		
CONSIDERATIONS	
	 
	 	
2.1.      		
That the TRANSPORTER is the owner and operates a system of gas pipelines within the country (systems), which passes near the REMITTENT’s facilities.	
	 
	 	
2.2.      		
That the REMITTENT, through communication dated November 11, 2005 stated to the TRANSPORTER its interest in hiring transportation capacity through the systems Ballena – Barrancabermeja up to 180 MPCD-	
	 
	 	
2.3.      		
That the TRANSPORTER through communication #7997 dated November 28, 2005 informed of the capacity available in this system and stated that in order to comply with the request the REMITTENT must enhance the capacity in the
systems Ballena – Barrancabermeja.	
	 
	 	
2.4.      		
That the REMITTENT in its communication VSM-BOG-005363-2005-S of December 13, 2005, requested the TRANSPORTER the Service to transport Gas from the Entry Points to the Exit Points indicated in	
	 

	 	 	numeral 4 of Section
        I-ESTF for the total transportation availability of the gas pipeline
    Ballena – Barrancabermeja of the TRANSPORTER. 
	 	 	 
	 	2.5.    	That
      the REMITTENT in this communication also stated its need for a total
      capacity of 175,000 KPCD which would imply an enhancement of the transportation
      systems in the section of Ballena – Barrancabermeja 
       
	 	 	 
	 	2.6.  	That
        the TRANSPORTER through communication No. 8562 dated December 23, 2005,
        informed the REMITTENT that it had available capacity in the gas pipeline
    Ballena Barrancabermeja between June 2006 and December 2012. 
	 	 	 
	 	2.7.    	That
        through communication VSM-BOG-000288-2006-S dated January 17, 2006, the
        REMITTENT proposed the contractual schedule to contract the capacity
        of the Ballena Barrancabermeja system, requesting to maintain the Casacará compression
    until the capacity system enhancement was ready. 
	 	 	 
	 	2.8.    	That
        through communication No. 509 of January 24, 2006 the TRANPORTER accepted
        to enter into a natural gas transportation contract for the total available
        primary capacity up to that point until achieving a capacity equal to
        175,000 KPCD, conditioned to the expansion to be carried out by the TRANSPORTER,
    and with a term ending on December 31, 2012. 
	 	 	 
	 	2.9.    	That
        the TRANSPORTER and the REMITTENT based on article 5.5 of Resolution
        CREG-001-2000 have freely agreed the charges for the remuneration of
        the natural gas transportation service according to Resolution CREG 125
    of 2003. 
	 	 	 
	 	2.10.   	That
        since the object of the contract includes the transportation of Gas of
        la Guajira and some of that Gas, is again transported by the TRANSPORTER
        for the clients of the REMITTENT, the TRANSPORTER has agreed with the
        REMITTENTs located downward of the Exit Point the distribution of the
        stamp charges (Branches and Principle Gas pipelines) proportionally to
        the length of the gas pipeline used by each one of them, applying for
        the REMITTENT 70.03% of said stamps. The length is calculated as the
        distance from the Ballena station and the Exit Point agreed by the TRANSPORTER
        with each REMITTENT, and that for the present Contract is the exit flange
    from the measurers of Centragas located at the Centragas Station of Barrancabermeja. 
	 	 	 
	 	2.11.   	That
        the Parties recognize and accept that this Contract and the natural gas
        transportation contract is subject to regulation, control, and supervision
        of the State, since Gas Transportation is a complementary public service
        activity pursuant with Law 142 of 1994 and 401 of 1997, which may imply
    modifications to this contract. 
	 	 	 
	 	2.12.   	That
        article 5.9 of Resolution CREG-001 of 2000 established that the charges
        for Counter flow Transportation Services may be freely agreed by the
    Parties and that the TRANSPORTER is bound to accept the 

 

 

	 
	 	 	
requests for counter flow transportation services if rendering the service it technically viable.	
	 
	 	2.13. 	
That the TRANSPORTER carried out a market investigation
ECG- VID-SM01-06 dated August 16, 2006 to receive non binding offers for purchase
of the compression units in order to enhance the capacity of the natural gas
transportation system in the gas pipeline Ballena – Barrancabermeja.	
	 
	 	2.14. 	
That the TRANSPORTER carried out a market investigation
ECG- VID-SM02-06 dated September 8, 2006 to receive non binding offers to enter
into a turnkey contract to: i) supply the compression equipment, ii) Carry out
the design engineering for conceptual, basic and of detail for architectural,
civil, mechanical, electrical, instrumental and control works for installation,
y iii) Carry out the construction, installation, and set up of two (2) Compressing
Stations and its activities (precommission commission) one located in the Operational
Gas Center in Barrancabermeja – Santander and the other one located at Casacará – Cesar, on the gas pipeline Ballena Barrancabermeja.	
	 
	 	2.15. 	
That the REMITTENT has a exceptional future spending
availability allowing it to enter into this contract until November 2012, granted
through communication of the Ministry of Finance and Public Credit No. 2-2006-21218 of August 3, 2006.	
	 
	3.  	DEFINITIONS	
	 

	
The terms whose initial in the capital letter (singular or plural), it its Annexes 	
	
mad in its clarifications or modifications, will have the meaning found 	
	
hereinafter, notwithstanding the definitions that may be included in the Law: 	
	
Fiscal Year 		
It is the period between January 1 and December 31 of 	
	 		
the same year. For the last year of the Contract it will 	
	 		
be the period between January 1 and November 30, 	
	 		
2012. 	
	
Daily Charge for 		
Charge for the Reference Capacity / 365 in US$ / kpc. 	
	
Reference Capacity 		 	
	
Charge for MO&M 		
Annual Fixed charge that covers the costs for 	
	 		
administration, Operation and Maintenance and is 	
	 		
applied to the capacity contracted expressed in 	
	 		
$/kpc/d/a. 	
	
Charge for 		
Corresponds to the Charge for Capacity of the route 	
	
Reference Capacity 		
Barrancabermeja – La Dorada, applied to the 	
	 		
determination of sanctions of the REMITTENT or 	
	 		
recognitions of the TRANSPORTER in US$/kpc/d/a. This 	
	 	charge
    is indicated in Section I.

	
Variable Charge 		
Charge expressed in US$/kpc that covers investment 	
	 		
costs and is applied to the volume of the Gas 	

 

	 	 
	 		
transported. 	
	
REMITTENT 		
It is an operational unit, made up by at least: flow 	
	
Connection 		
measurers,
equipment.  
	
Detour 		
It is a change of the Entry Points and/or Exit Points 	
	 		
with regards to the initial primary origin and/or 	
	 		
destination specified in the transportation contract. 	
	
Day 		
Will be understood as calendar day when not specified 	
	 		
expressly as working day. 	
	
Start of Service Date 		
It is the day in which the execution of this Contract is 	
	 		
commenced. The execution is included in Section I – 	
	 		
ESTF, numeral 5.2. 	
	
Contract Date 		
Date of contract undertaking. 	
	
Transportation gas 		
Are the gas pipelines object to this contract: Ballena – 	
	
pipelines 		
Barrancabermeja and Cusiana – Barrancabermeja. 	
	
GHV 		
Gross calorific power of Gas in BTU/pc, object of the 	
	 		
transportation published in the electronic bulletin of 	
	 	Operations
    of the Transporter.

	
Default Interests 		
It is the maximum percentage of commercial default 	
	 		
interest authorized by Colombian Law for default 	
	 		
payments. 	
	
MBTU 		
Equals to 1,000,000 BTU referring to the real gross 	
	 		
calorific power 	
	
Entry Month 		
It is the calendar month in which the REMITTENT has 	
	 		
requested the service. 	
	
Entry Node 		
Geographical region where the Entry Point is located. 	
	
Exit Node 		
Geographical region where the Exit Point is located. 	
	
Party or Parties 		
Are the REMITTENT and the TRANSPORTER or their 	
	 		
assignees jointly considered or each one of them 	
	 		
independently. 	
	
Contractual Period 		
Will begin on the Date of Service Initiation and will end 	
	 		
on November 30, 2012. 	
	
Pc/d, kpc/d, mpc/d 		
Gas flow measurement units that mean: cubic feet per 	
	 		
day, thousands of cubic feet per day, and millions of 	
	 	cubic
    feet per day, respectively.

	
Execution Term 		
Period between the Date of Service Initiation and the 	
	 		
last day of Service. 	
	
Monthly 		
It is the Gas transportation program for a delivery 	
	
Programming 		
month, day by day, expressed in kpc/d that must be 	
	 		
presented by the REMITTENT to the TRANSPORTER no 	
	 		
later than on the last day on the previous month of the 	
	 		
month of service rendering. 	
	
Firm Natural Gas 		
Gas Transportation Service to the REMITTENT by the 	
	
transportation 		
Transporter, through the modality of Firm Capacity 	

 

	 	 
	
Service or Firm 		
using the Transportation National Service in exchange 	
	
Service 		
of a corresponding payment. 	
	
Exchange Rate 		
It is the average exchange rate of Dollars of the United 	
	 		
States of America and Colombian Pesos, according with 	
	 		
the Board of Directors of the Central Bank, or other 	
	 		
corresponding entity. 	
	
TRANSPORTER 		
It is the party rendering the Transportation Service. 	
	
REMITTENT 		
Corresponds to the result of adding daily variations in a 	
	
accumulated 		
period of one month in each Entry Point and in each 	
	
variation 		
Exit Point of the Transportation System. 	
	
Entry Variation 		
Absolute value of the difference between the Amount 	
	 		
of Confirmed Energy and the Amount of Energy 	
	 		
Delivered in each hour by the REMITTENT. 	
	
Exit Variation 		
Absolute value of the difference between the Amount 	
	 		
of Energy Confirmed and the Amount of Energy Taken 	
	 		
in each hour by the REMITTENT. 	
	
Contract Duration 		
Period between the Contract Date and the date in 	
	 		
which the contract liquidation Minutes are drawn up. 	

	
4.      		
RULING PRINCIPLES	
	 
	 	
4.2.1      		
The common interest of the Parties is that the Transportation
System operates under the terms of trustworthiness,
security, efficiency, continuity, and quality, under the terms agreed herein. 
	 
	 	
4.2.2      		
The Transportation System is an interconnected and interdependent network
where the activity of one of the intervening agents in the transportation process
may affect the rights or other agent(s) and therefore, the coordination of this
System has as principal objective the preservation of common interest of the
Parties, pursuant with the Contract and the Sole Transportation Regulation (RUT). 
	 
	 	
4.2.3      		
The Parties agree to use the Transportation System with efficiency, pursuant with the terms of this Contract and regulations.	
	 
	
  CHAPTER II 

    PARTICULAR CONDITIONS 

	 
	
1.      		
OBJECT	
	 
	 	
It is the rendering to the REMITTENT by the TRANSPORTER of a Firm Natural Gas Transportation Service through the gas pipeline Ballena – Barrancabermeja, and the occasional detour of entry Point from Ballena
to	
	 

	 	 	Cusiana for the transport
          of naturals gas through the system Cusiana – Barrancabermeja,
          pursuant to the terms and conditions of this Contract. 

       The Firm contracted capacity through the present
          Contract will be equal to the current available amounts in the gas
          pipeline Ballena – Barrancabermeja, as setout in numeral 1) Annex
          IV of this Contract, plus the capacity resulting from the enhancement
          to 262,000 KPCD of the mentioned gas pipeline measured by the TRANSPORTER,
          until reaching the total capacity amount of 175,000 KPCD, requested
          by the REMITTENT. 

       The transportation capacity requested by the
          REMITTENT in the gas pipeline Ballena – Barrancabermeja will be
          made available when the TRANSPORTER has the facilities in operation
          allowing for the enhancement of the system, which hopes to carry out
    on these dates: 

	 	 	 
	 	1)  	A
          first enhancement under operation no later that may 31, 2007, that
          will carry the total capacity of the system Ballena – Barrancabermeja
          up to 190,000 KPCD, corresponding to the works to be developed during
          the first phase (Phase I) of the project for the enhancement of the
          Ballena – Barrancabermeja section up to 262,000 KPCD. The contracted
          capacity of the REMITTENT in this Contract, will be increased automatically
          as the capacity of the Ballena – Barrancabermeja system is increased
          as of the date in which Phase I becomes operative, with reference to
          the current capacity of 146,000 KPCD, as stated in numeral 2) Annex
          IV of this Contract, until reaching a minimum value of 134,066 KPCD. 

       Notwithstanding the aforementioned, Ecogas
          will make all efforts to allow for Phase I to become operative before
          May 31, 2007. 

       The TRANSPORTER accepts that the REMITTENT
          keeps operative the current compression station at Casacará between
          January 1, 2007 and the date when Phase I becomes operative. 

       Given that the compression service contract
          of the station at Casacará has been assumed directly by the
          REMITTENT, the tariff associated to transportation capacity acquired
          through said compression contract, will be affected under the terms
          of the “Transportation Agreement
          between ECOPETROL S. A. and the Transporter”  entered
          into on April 27, 2006. 

       The “Transportation
            Agreement between ECOPETROL S. A. and the transporter”  may
            be prorogated until May 31, 2007, which will occur automatically
            if the TRANSPORTER does not communicate with the REMITTENET no later
            than January 31, 2007, regarding the anticipated operation of the
    compression station of Casacará. 

	 	 	 

 

	 	2)  	A
        second enhancement as of October 2007, subject to the installation and
        operation of all compression stations required to enhance the capacity
        of the gas pipeline Ballena – Barrancabermeja to 262,000 KPCD, with
        which the contracted capacity of the REMITTENT through this contract
        will be automatically increased to 175,000 KPCD, as follows: Exit point
        1) 130,000 KPCD; Exit point 2) 4,000 KPCD; Exit Point 3) 41,000 KPCD.
        The obligation for the enhancement of the system to be done by the TRANSPORTER,
    for the effects of this numeral 2) are means obligations. 
	 	 	 
	2.  	SCOPE 
	 	 	 
	 	It is the Firm Natural
        Gas Transportation Service through the System Ballena – Barrancabermeja
        and the occasional detour through the system Cusiana – Barrancabermeja,
    from the Entry Points to the Exit Points determined in Section I – ESTF. 
	 	 	 
	3.  	APPLICABILITY 
	 	 	 
	 	3.1.    	Subject
        to the considerations and terms of this Contract, each day of gas as
        assigned by the producer of the REMITTENT and as long as said Service
        in authorized by the TRANSPORTER, pursuant to numeral 4 of Chapter III
        (Nominations and Amount of Confirmed Energy), the REMITTENT will deliver
        to the TRANSPORTER and the TRANSPORTER will receive at the entry points
        the Amount of Energy Delivered. Said Gas will be transported by the TRANSPORTER
        and the REMITTENT will take that same amount at the Exit Point(s), which
    will be name Amount of Energy Taken. 
	 	 	 
	 	3.2.    	On
        each Day of Gas, the REMITTENT is bound to deliver at the Entry Point(s)
        and to take from the Exit Point(s) the Authorized Amount of Energy, at
    a flow as constant as possible. 
	 	 	 
	 	3.3.    	Since
        the moment in which the gas is delivered to the TRANSPORTER at the Entry
        Point(s), the TRANSPORTER has the right to mix said Gas with any other
        gas as long as the Gas delivered at the Exit Point(s) to the REMITTENT
        complies with the quality specifications established in Annex I of this
    Contract. 
	 	 	 
	4.  	ENTRY
    AND EXIT POINTS 
	 	 	 
	 	The Entry Point(s) and
        Exit Point(s) will be included at numerals 4.3 and 4.4 of Section I – ESTF
        of this Contract, and in such numerals the obligations of Gas delivery
    are specified, as object to this Contract. 
	 	 	 
	 	 	 
	 	 	 

 

 

	The REMITTENT may request
        detours at Entry Point or Exit Point, pursuant with numeral 2.2.2 of
    the Sole Transportation Regulations RUT. 
	 	 	 
	5.  	TRANSPORTATION
    CHARGES
	 	 	 
	 	5.1.    	The
        charges for the rendering of the service object to this Contract, will
        be those established in numeral 7 of Section I – ESTF and will be
        subject to modifications established by the Gas and Energy Regulation
    Committee – CREG. 
	 	 	 
	 	 	PARAGRAPH: Taking
        into account consideration 2.10 of this document, once the contracted
        Firm capacities are modified by the TRANSPORTER with the REMITTENTs who
        in turn have supply contracts with the REMITTENT, located downstream
        of Exit Point 1, or in case of new REMITTENTs who are clients of the
        REMITTENT downstream of Exit Point 1, the percentage of the stamp paid
        by the REMITTENT will be calculated once again, taking as basis the new
        quantities. In order to comply with this paragraph, the TRANSPORTER will
        inform of new contracts and/or modifications to their contracts in which
        has as Entry Point the Exit Point 1 described in Section I – ESTF
    numeral 4.4. 
	 	 	 
	 	5.2.    	The
        REMITTENT and the TRANSPORTER may negotiate special transportation tariffs
        for the amount of Gas used to provide the GNCV market. Said tariffs will
    be defined through written communication between the Parties. 
	 	 	 
	 	5.3.    	The
        TRANSPORTER may not acquire Capacity Freed by the REMITTENT in the system
        Ballena – Barrancabermeja, nor it may commercialize it or use it
    in any manner, as indicated in numeral 2.5.1 of the RUT. 
	 	 	 
	6.  	CONTRACT
    TERM
	 	 	 
	 	It is the period between
        the Date of Initiation of Service and the last day of the Execution Term
    as indicated in numeral 5.3 of Section I – ESTF. 
	 	 	 
	7.  	NOTIFICATIONS 
	 	 	 
	 	7.1.    	All
        notifications, communications, requests, allowed or necessary under the
        present Contract must be done in writing and must be delivered personally
        or by facsimile or certified mail or through electronic data transmission,
    addressed to the address included in numeral 8 of Section I – ESTF. 
	 	 	 

 

 

 

	 	7.2.    	The
        addresses, facsimile numbers and electronic mail addresses for notifications
        under the present Contract, may be changed through written notification
        presented to the other Party at least fifteen (15) calendar days in advance
    to the use of said address. 
	 	 	 
	8.  	SOLEMNITY
    AND EXECUTION OF THE CONTRACT 
	 	 	 
	 	8.1.    	The
        present Contract solemnized through the signature of the representatives
    of both Parties. 
	 	 	 
	 	8.2.    	Pursuant
        to article 96 of Decree 2150 of December 5, 1995, due to the fact that
        it is an inter-administrative Contract, it does not require to be published
        in the Public Contracting Newspaper as previous condition to the initiation
        of its execution. Nevertheless, and pursuant with article 16of Law 190
        of 1995, the TRANSPORTER is bound to include the information relating
        to this Contract in the monthly list of contracts to be sent to the Official
    Newspaper. 
	 	 	 
	9.  	TAXES 
	 	 	 
	 	The transportation
          tax included in the Oil Code and in Law 756 of 2003, as well as the
          Promotion Share included in article 15 of Law 402 of 1997 and regulated
          through Decree 3531 of 2004 issued by the National Government will
          be covered by the REMITTENT. 

       The present Contract, since it is a Transportation
          Contract, is exempt of stamp tax. Each entity will assume its tax obligations
          relating to income tax, industry and commerce tax, or any other type
          of tax related to the present Contract. 

       The REMITTENT will assume the payment of the
          Solidarity Contribution established through CREG Resolution 15 of 1997,
          with respects to the transportation of the portion of Gas delivered
          at the Exit Point No. 3 of numeral 4.4 of Section I-ESTF, reported
    by the REMITTENT. 

	 	 	 
	10.  	GUARANTY 
	 	 	 
	 	Due to the governmental
        nature of the Parties, both entities agree not to require any type of
    guaranty from the other. 
	 	 	 
	11.  	APPLICABLE
    LAW 
	 	 	 
	 	This Contract will be
        ruled by the Political Constitution, Laws 142 of 1994 and 401 of 1997,
    Decree 3531 of 2004, the Commerce Code, the Civil Code, the 
	 	 	 

 

 

	 	Resolutions of the
          CREG and other concordant regulations, as for all regulations that
          may form time to time modify, add or substitute them. 

       Pursuant with the aforementioned legal framework,
          the present Contract established a commercial relationship between
    the Parties, ruled by Private Law. 

	 	 
	12.  	REGULATORY
    ADJUSTMENT 
	 	 
	 	Both the Service rendering
        conditions as the economical conditions included in this Contract will
        be ruled by the regulations issued by the CREG or who acts as such, and
        by those regulations that from time to time may modify, add or substitute
    them. 
	 	 
	13.  	DOMICILE 
	 	 
	 	For all the effects
    the contractual domicile is the city of Bucaramanga, Department of Santander. 
	 	 
	14.  	DELEGATION
	 	 
	 	The administration of
        the present Contract for the TRANSPORTER will be carried out by the Vice
        presidency of Operations and Transportation of the Empresa Colombiana
        de Gas – Ecogas, or in the division that may later be assigned for
        such effect. On the other hand, the REMITTENT delegates to its Gas manager,
        or the person later appointed to that effect, the administration of the
        present Contract, as well as the appointment of the officers that will
    be in charge of follow up tasks. 
	 	 
	15.  	PROPERTY
    TITLE OVER GAS 
	 	 
	 	The REMITTENT guarantees
          that it will have property and possession of the Gas delivered at the
          Entry Points at the time of entrance to the Transportation System.
          The title of the Gas will be proven with the assignment of the Agent
          delivering Gas to the System for the REMITTENT. 

       For the gas delivered at the Exit Point 1)
          the owners of the gas will be clients of the REMMITENT to which it
    delivers the gas at Barrancabermeja. 

	 	 
	16.  	INDEMNITY 
	 	 
	 	The REMITTENT will indemnify
        the TRANSPORTER of all liability against all claim, legal action, or
    damages that may result from suits or claims from third 
	 	 	 
	 	 	 

 

	 	parties disputing the
    property, holding right or possession of the transported Gas. 
	 	 
	17.  	GAS
    CUSTODY 
	 	 
	 	The TRANSPORTER will
          exercise custody, holding and vigilance over the Gas under the terms
          and conditions of this Contract and the regulations issued by the Energy
          and Gas Regulatory Commission – CREG, from the moment it receives
          it at the Entry Point(s) until the moment the REMITTENT takes it at
          the Exit Point(s).

       In case of loss of Gas within the System due
          to force majeure or excusable event, the REMMITENT and the other REMITTENTs
          will assume said loss, unless the CREG establishes something different
          through a resolution act. For the pro rata division of the loss among
          the different REMITTENTs using the system and the TRANSPORTER, it will
          consider the Gas Balance decided by the Principal Control Center based
          on the Amount of Energy Confirmed. 

       Operational Losses exceeding 1% will be assumed
          by the TRANSPORTER. The operational losses that do not exceed 1% will
          be distributed among the REMITTENTs as established in numeral 4.9.1
          of the RUT or the regulation that modifies, add or substitute it, and
          will be accepted by such REMITTENTs to the TRANSPORTER in the monthly
    service invoice. 

	 	 
	18.  	CHANGE
    OF NODES OR ENTRY OR EXIT POINTS 
	 	 
	 	Changes to the Entry
        and Exit Nodes may be done. As well new Node or Entry and Exit Points
    may be added as long as it is technically and operatively viable. 
	 	 
	19.  	CONTRACT
    ASSIGNMENT 
	 	 	 
	 	19.1.   	The
          TRANSPORTER may assign this Contract automatically to whomever acts
          as TRANSPORTER in the gas pipelines used by this Contract. The REMITTENT
          may assign this Contract totally or partially with the written authorization
          of the TRANSPORTER. 

       Once the assignment of this Contract has taken
    place, the Parties will evaluate the guaranties that may be granted. 

	 	 	 
	 	19.2.   	The
        authorized assignee must assume all the liabilities and obligations of
        the REMITTENT or of the TRANSPORTER, as accordingly, included in this
        Contract and this requirement must be clearly stated in the assignment
    document. 
	 	 	 

 

	 
	
20.      		
FORCE MAJEURE OR EXCUSABLE EVENT	
	 
	 	
20.1.      		
If there are circumstances of force majeure, or excusable event taking place, that affect directly the compliance of the obligations of this Contract, the compliance of these obligations will be suspended during the time said
circumstances persist.	
	 
	 	 	
The Party affected by force majeure or excusable event will notify the other Party of such situation, within the twenty-four (24) hours following its occurrence, compromising to delivery all details within the following five
(5) working days.	
	 
	 	
20.2.      		
Force Majeure: For the effects of this Contract, force majeure mean, will cover and include, among others, the following abnormal acts, facts or events when unpredictable and irresistible as long as they are not under the
control of the Parties and occur without intention or negligence, duly proven, such as:	
	 	 	 
	 	 	
a) 		Acts of Nature, including
    landslides, hurricanes, floods, avalanches, lighting, earthquakes, fires,
    seaquakes, shipwrecks, disasters in land, air, train, fluvial or ocean transportation. 
	 	 	 	 
	 	 	b) 	Acts or lack of acts of the government
      or of the competent legislative or judicial branch such as laws, regulations
      of all governmental level, decrees, rulings, judicial actions, issuance,
      renewal or confirmation of permits and licenses, that directly contribute
      or result in the impossibility of either Party to comply with its obligations
      or that may affect gravely and unjustifiably the interests of one or both
    Parties or strongly affect its financial capacity. 
	 	 	 	 
	 	 	c) 	Acts of civil disobedience including
      war, blockades, insurrections, mutinies, mass strikes, and military forces
    actions related to or as a response to any civil disobedience act.
	 	 	 	 
	 	
20.3.      		
Excusable or Exempting Events: For the effects of this Contract, an excusable event is any violent act from a third party, that may be unpredictable and irresistible, not under the control of either Party, and occurring
without intention or negligence, including, but not limited to acts of guerrillas or terrorists, hat may cause damage to the System or to the REMITTENT’s facilities at each Exit Point, or that may interrupt or delay the compliance by the
Parties of their obligations.	
	 
	 	
20.4.      		
The Party affected by force majeure must carry out all reasonable acts that may be needed to restart as soon as possible its compliance with the Contract’s obligations. As well it must direct all efforts
toward	
	 

	 	 	minimizing or mitigating
    any delay or additional costs that may be caused. 
	 	 	 
	 	20.5.   	The
        aforementioned will not excuse either Party of the outstanding payment
    duties. 
	 	 	 
	21.  	DISPUTE
    RESOLUTION 
	 	 	 
	 	21.1.   	In
        case of any dispute, either Party may request the direct solution. In
        such a case, the Party that considers that there is a disagreement will
        notify the other Party in order to meet with the following ten (10) working
    days to solve the dispute within the following twenty (20) days.
        Once the term has elapsed without a solution
        to the dispute, either Party must immediately access the dispute resolution
    mechanisms included hereinafter. 
	 	 	 
	 	21.2.   	Legal
        Nature Controversies: The disputes of legal nature, and in general, disputes
        that are not considered of technical or accounting nature that derive
        from or are related to this Contract, that have not been solved after
        complying with the aforementioned procedure, will be decided by a Arbitration
        Tribunal made up of three (3) Colombian lawyers, who will rule under
        law and will be appointed by the agreement of the Parties. If the Parties
        were not able to reach an agreement to appoint some or all of the arbitrators,
        this or these will be appointed by the Center for Arbitration and Settlement
        of the Chamber of Commerce of Bogotá D. C. from its list, after
        the request of either Party. The domicile of the Arbitration Tribunal
        will be the Chamber of Commerce of Bogotá D. C. and will act under
    the Rules of said Center and in absence of rule, by the law. 
	 	 	 
	 	 	In case there is a disagreement
    of the nature of the controversy, it will be deemed legal. 
	 	 	 
	 	21.3.   	Technical
        and/or Accounting Controversy: All differences of technical and/or accounting
        nature that may arise between the Parties due to the legal interpretation
        or application of this Contract, will be decided by the report of an
        amicable settler made up of one (1) expert appointed by the agreement
        of the Parties. If the Parties do not reach an agreement on the appointment
        of the expert it will be appointed by the Board of Directors of the Colombian
        Society of Engineers (CSE), domiciled in Bogotá, by the request
        of either Party. All differences of accounting nature that may arise
        between the Parties due to the interpretation and execution of the Contract,
        will be submitted to the decision of an (1) expert appointed by the agreement
    of the Parties, who must be a Public 
	 	 	 

 

	 	 	Accountant. If the
          Parties do not reach an agreement to appoint the expert, it will be
          appointed by the Central board of Accountants of Bogotá D. C.
          at the request of any of the Parties. 

       The decision of the expert will be final and
          must be issued no later than ninety (90) days as of the date of the
    expert’s appointment. 

	 	 	 
	 	21.4.   	The
        charges, fees and expenses related to the necessary procedure in order
        to resolve the disputes of this Clause, will be covered by the Party
    as decided y the Arbitration Tribunal or expert. 
	 	 	 
	22. 	ANTICIPATED
    TERMINATION OF CONTRACT 
	 	 	 
	 	22.1.  	Either
    Party may declare it when: 
	 	 	 
	 	 	a)  	Due to force majeure
        or excusable event that completely suspends the Contract’s execution
        for a continuous period greater than three hundred sixty five (365) calendar
        days in each event, in which case no liability will rise from either
    Party. 
	 	 	 
	 	 	b)  	By
    mutual agreement in writing by the Parties. 
	 	 	 
	 	22.2.   	El
    TRANSPORTER may declare it in the following cases:
	 	 	 
	 	 	a)  	When
        for more than three (3) times in a period of three hundred sixty five
        (365) continuous calendar days the TRANSPORTER has suspended Service
        due to the cause included in numeral 11.3 of Chapter III, or when the
        default payment persists for an invoice of the REMITTENT for sixty (60)
        days pursuant with numeral 5 of Chapter IV, except when it is the object
    of a dispute. 
	 	 	 	 
	 	 	b)  	When
        in a period of three hundred sixty five (365) calendar days, the REMMITENT
        has incurred in compensations whose sum exceeds the Annual Estimated
    Value of the Contract. 
	 	 	 
	 	22.3.   	The
        REMITTENT may declare the anticipated termination when due to causes
        claimed to be of the TRANSPORTER, when for more than fifteen (15) continuous
        days the guarantee of minimum pressure included in numeral 9 of Chapter
        III is not complied with or there has been a breach on the quality of
    the Gas. 
	 	 	 
	 	 	In case of the anticipated
        termination due to causes of either Party, the defaulted Party will recognize
        and pay as sole damages payment to the other Party as damages an amount
    equal to the Estimated Annual Amount of the Contract. 
	 	 	 

 

 

 

	 	 	PARAGRAPH: Within
        the following ten (10) calendar days following the occurrence of any
        of the aforementioned events, the Party with the right to terminate the
        Contract must notify their decision in writing to the other Party, indicating
        the reasons for such determination and the effective date for the Contract
        termination. The Contract termination does not excuse or free the Parties
        of the respective obligations from the previous period of the effective
    date of termination. 
	 	 	 
	23. 	CONTRACT
          LIQUIDATION 

       No more that one hundred twenty (120) days
          following the end of the Contract term, or in case there is an anticipated
          termination, the Parties must agree on the “Liquidation Minutes” which
          must include a summary of the most important aspects of the execution
          of the Contract, indicating the balances in favor of either Party if
          there were any. In case there is disagreement on this, the Parties
          will include such statements as necessary, and may access the methods
          for dispute resolution include in numeral 21 of this Chapter, on the
          day one hundred twenty one (121) as of the end of the Contract term
          or of the anticipated termination. The liquidation minutes entered
          into by the Parties or the document including the decision of the amicable
          settlers will have executive title. 

       Due to the Public Nature of the Parties, if
          after one hundred twenty days (120) of the end of the Term of the Contract
          or the Anticipated Termination the aforementioned Liquidation Minutes
          has not been drawn up, either Party may issue a Unilateral Liquidation
    Minutes. 

	 	 	 

CHAPTER III 

OPERATIVE CONDITIONS 

	1.  	GAS
    QUALITY 
	 	 	 
	 	1.1.    	The
        Gas that the REMITTENT delivers to the TRANSPORTER at the Entry Point(s)
        and the Gas that the TRANSPORTER delivers to the REMITTENT at the Exit
        Point(s), must comply with the quality specifications included in Annex
    I of this Contract. 
	 	 	 
	 	1.2.	  If
        the Gas Delivered by the REMITTENET to the TRANSPORTER in order to star
        its transportation does not comply with the quality specifications included
        in Annex I of this Contract, the TRANSPORTER will notify the REMITTENT
        of the quality deficiencies and will have the right, but not the obligation,
        to reject said Gas, until the situation is corrected. If for a term no
        greater that three (3) calendar days, the REMITTENT has not corrected
    the deficiency, the TRANSPORTER, at its sole discretion and not 
	 	 	 

 

 

 

	 
	 	 	
being bound to it by this Contract, may: (i) carry out the activities necessary to accept such Gas, in such case, the REMITTENT must reimburse the TRANSPORTER of the over costs effectively incurred due to said activities,
after the Parties have agreed on the budget previously, or (ii) reject the Gas for its transportation. The responsibility of the REMITTENT will end with the payment of the over costs incurred by the TRANSPORTER.	
	 
	 	1.3. 	
If the gas delivered by the TRANSPORTER to the REMITTENT
does not comply with the quality specifications described in Annex I of this
Contract, for circumstances solely imputable to the TRANSPORTER, the REMITTENT
will notify of the deficiency in quality and will have the right to reject said
Gas until the deficiency is corrected, which must be notified before to the TRANSPORTER.
If for a term no greater that three (3) calendar days, the TRANSPORTER has not
corrected the deficiency, the REMITTENT, at its sole discretion may carry out
the necessary activities to accept such Gas. The TRASNPORTER must reimburse the
REMITTENT of the over costs effectively incurred due to said activities, after
the Parties have agreed on the budget previously. The responsibility of the REMITTENT
will end with the payment of the over costs incurred by the REMITTENT.	
	 
	 	1.4. 	
It is the REMITTENT’S responsibility to have, at Entry Point, the equipment necessary for volumetric measurements and for the determination of the Gas’ quality.	
	 
	 	 	
If the REMITTENT considers it necessary to carry out, at the Exit Points, a volumetric measurement and determination of the Gas’ quality, the REMITTENT will provide, at its own cost, the equipment necessary for said
previous calibration by agreeing with the TRANSPORTER of the procedures to follow.	
	 
	 	1.5.	
 The verification if the Gas’ quality both at the Entry Point and at the Exit Point will be done by the TRANSPORTER, but the REMITTENT has the right to be present at the measurements and analysis. The aforementioned,
with no regards to the responsibility of the REMITTENT for delivering the Gas to the TRANSPORTER at the Entry Point not complying with the quality specifications included in the present Contract. As well, the TRANSPORTER will verify the minimum variables determined in the RUT, being it the sole responsibility of the REMITTENT to control permanently and continuously, that said Natural Gas quality specifications
included in this Contract are met at delivery in the Entry Point.	
	 
	 	 
	 

	2.	GAS MEASUREMENT
	 	 	 
	 	2.1.	  It
        is the REMITTENT’S obligation at Entry Points 2), and 3) described
        in numeral 4 of section I, and the TRANSPORTER’s at Exit Point 1)
        of the same numeral, to have necessary equipment to install, operate,
    and maintain measurement equipment including for calibration. 
	 	 	 
	 	2.2.    	The
          installation of the measuring system of Exit Points 2 and 3 must be
          done immediately after said points. 

       Unless otherwise agreed by the Parties, the
          installation of the measurement system at Exit Point 3 will be done
          by the TRANSPORTER in the in the Gas Operations Center at Barrancabermeja – COGB,
          per the technical and operative characteristics agreed through the
          Lease, Operation and Maintenance Contract of the System and measuring
          Loop, which will be subscribed between the TRANSPORTER and the Industrial
          Complex of Barrancabermeja property of the REMMITENT. The maximum date
          for the installation and start up of the system and mediation Loop
          of Exit Point 3 to be located at the COGB, will be two (2) months as
          of the subscription of the Lease, Operation and Maintenance Contract
          of the system and mediation Loop, which must be executing as of October
          15, 2006. 

       In case that after the date of subscription
          of the Lease, Operation and Maintenance Contract of the System and
          measuring Loop located at Exit Point 3, the REMMITENT decides for the
          installation of a measurer at a location different from the COGB, established
          originally by the TRANSPORTER, the installation and star up of this
          system will be agreed previously by the Parties, bearing in mind that
          it must be done immediately after the Exit Point 3), after the recognition
          by the REMITTENT of the costs and investment incurred by the TRANSPORTER
          for the construction and start up of Exit Point 3). 

       Unless otherwise agreed by the Parties, the
          installation of the measurement system at Exit Point 2 will be located
          at the facilities of Petrosantander or at the COGB of the TRANSPORTER.
          If the location of the measuring system is at the COGB of TRANSPORTER,
          the installation and start up of this system will be carried out by
          the TRANSPORTER, who will charge the REMITTENT a fee for rent, administration,
          operation and maintenance and of the Loop. The maximum date for the
          installation and start up of the measuring system at Exit Point 2,
          will be four (4) months as of the subscription of the Lease, Operation
          and Maintenance Contract of the system and mediation Loop. The type
    of system in any case will be agreed by the Parties. 

	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

 

 

	 	 	In case that after
          the date of subscription of the Lease, Operation and Maintenance Contract
          of the System and measuring Loop to be located at Exit Point 2), the
          REMMITENT decides for the installation of a measurer at a location
          different from the COGB, established originally by the TRANSPORTER,
          the installation and star up of this system will be agreed previously
          by the Parties, bearing in mind that it must be done immediately after
          the Exit Point 2), after the recognition by the REMITTENT of the costs
          and investment incurred by the TRANSPORTER for the construction and
          start up of Exit Point 2). 

       The installations and star up of the measuring
          systems to be located at the COGB will be carried out by the TRANSPORTER,
          after validation and approval from the REMITTENT of the execution procedures
          of such activities, as well as of the assurance that the development
          of such activities will not be a risk to the flow of Gas and to the
          continuous operation of the Barrancabermeja Refinery owned by the REMMITANT,
          for which both Parties, within twenty (20) calendar days as of delivery
          of pertinent documentation by the TRANSPORTER to the REMITTANT, will
          conduct a detailed analysis of the risks involved. If after this term,
          the Industrial Complex of Barrancabermeja owned by the REMITTENT has
          not it acceptance or rejection of the procedure, the TRANSPORTER may
          continue with the immediate execution of the necessary works for the
          installation and start up of the aforementioned measuring systems and
          loops. 

       In case the TRANSPORTER installs and stars
          up the measuring systems and loops, it must provide the necessary equipment
          for the REMITTENT to have the information on line of the gas measures
    at its facilities, as long as the communication protocols are compatible. 

	 	 	 
	 	2.3.    	The
          TRANSPORTER has the obligation to read the measurers and verify the
          calibration both of the Entry and Exit Points. The REMITTENT reserves
          the right to be present at the verification of the measurers calibration
          and to that effect it will be notified by the TRANSPORTER at least
          seventy two (72) hours in advance. 

       As long as the measuring systems to be located
          after Exit Points 2) and 3) are not installed and started up, the natural
          gas unbalances at this time will be assumed by the REMITTENT, which
          will be calculated as the difference between the Gas volumetric measures
          between the measurers at the Centragas high pressure line, Merilectrica
          and the entry to COGB of the TRANSPORTER for the case of the Turbogas,
          or the difference between the volumetric gas measures between the measurers
    of 

 

 

 

	 
	 	 	
Centragas on the low pressure line, Ferticol, Gases de Barrancabermeja for the case of the GCB consumption, different from that of Turbogas.	
	 
	 	 	
The REMITTENT reserves the right to be present at the verification of the measurers calibration installed at Centragas, Merilectrica, Ferticol, Gases de Barrancabermeja and the COGB of the TRANSPORTER, that may have a
relation to the gas balance and to that effect it will be notified by the TRANSPORTER at least seventy two (72) hours in advance.	
	 
	 	
2.4.      		
The determination of volumetric amounts will be done according to the calculation methods established by the manufacturer on the specific manuals for each type of measurer and the recommendations from the American Gas
Association AGA.	
	 
	 	
2.5.      		
The cost associated with the necessary facilities for the REMITTENT to take the gas, from the Exit Point on, including construction, operation and maintenance, will be covered by the REMITTENT.	
	 
	 	
2.6.      		
Once the measurers at the Exit Points No. 2 and No. 3 are duly installed and in operation, the REMITTENT will no assume, under any circumstance, the total unbalances pursuant with numeral 2.2 herein.	
	 
	
3.      		
TRANSPORTATION NEEDS	
	 
	 	
No Later than five (5) days before the end of the month prior to month of deliveries, the REMITTENT will send the TRANSPORTER the estimated average of transportation needs for the following month of deliveries.	
	 
	
4.      		
NOMINATIONS AND QUALITY OF CONFIRMED ENERGY	
	 
	 	
Nominations and quantity of energy confirmed. The nominations for each hour of the gas day will be carried out pursuant with the transportation sole regulations RUT, or its posterior modifications.	
	 
	 	
4.1.      		
The REMITTENT will deliver to the TRANSPORTER the nomination for each hour of the gas day through electronic transmission of data, before 16:20 hours of the
day before the nomination day. In case there are inconveniences with the communication, the REMITTENT will deliver the Nomination via facsimile or electronic mail.	
	 
	 	
4.2.      		
If the TRANSPORTER does not receive the hourly nomination from the REMITTENT or if such nomination is not transmitted within the terms and conditions timelines herein established, the Nomination will be	
	 

	 
	 	 	
understood as that of the day before and will be applicable until when the REMITTENT delivers a new nomination	
	 
	 	4.3. 	
The TRANSPORTER will accept totally or partially the
Nomination, pursuant with the contract, bearing in mind that in such event in
which the REMITTENT nominates quantities inferior or equal to the Firm Contracted
Quantity, the Authorized Energy amount must be as minimum the Firm Contracted
Amount. The TRANSPORTER will inform the REMITTENT through electronic data transmission
before 18:20 hours of the possible Transportation Program and the amount of Authorized
Energy. In case there are problems with the communication, it will be done by
facsimile. If the TRANSPORTER does not inform the Amount of Authorized Energy
on time, the Amount of Authorized Energy will be understood as the Amount Nominated.
After receiving this communication, and not after 18:50 hours of the same day,
the REMITTENT will send the TRANSPORTER a confirmed Amount of Energy within the
mentioned term, or if the confirmed Amount of Energy is greater than the Amount
of Authorized Energy, then the Amount of Confirmed Energy is equal to the Amount
of Authorized Energy. The TRANSPORTER must send the REMITTENT its final Gas Transportation
Program by 20:20 hours.	
	 
	 	 	
PARAGRAPH: The parties accept that the compensation for timetables and the Nomination process maybe modified in the future, based on CREG’ decision.	
	 
	5.	VARIATION
CALCULATION	
	 
	 	
  During the first twenty (20) days of the month following the Delivery Month, The TRANSPORTER will calculate The Entry variation of The REMITTENT for each Gas Day of the Delivery Month.	
	 
	6.	COMPENSATIONS
DUE TO VARIATIONS	
	 
	 	
In the cases where the aforementioned take place, The TRANSPORTER may inform and coordinate with the REMITTENT the necessary operative corrective actions, in order to remedy the Entry or Exit Variation of the REMITTENT. If it
is solved immediately, the REMITTENT will not be liable for compensation.	
	 

	 
	 	
In case that the REMITTENT does not apply the operative corrective actions to the TRANSPORTER’s satisfaction and it decides that the variations were caused directly by the REMITTENT, the TRANSPORTER may apply the
compensation as specified herein after.	
	 
	 	
For every Gas Day of a Delivery Month, when the REMITTENT’s Entry Variation and or the Exit Variation exceed(s) 4% of The Confirmed Energy Capacity, The REMITTENT will pay a charge equal to five (5) times the daily
charge for the Reference capacity, multiplied by :	
	 
	 	
— 	The volumetric equivalent in which The Entry Variation
    of the REMITTENT exceeds 4% of the Confirmed Energy Amount.	
	 
	 	— 	The volumetric equivalent in which the Exit Variation of the REMITTENT exceeds 4% of the Confirmed Energy Amount.	
	 
	 	
PARAGRAPH I: the compensation for Exit Variation will not by applied to Exit Point 1) described in Section I-ESTF numeral 4.4.	
	 
	 	
PARAGRAPH II: In case there is a simultaneous Entry variation and Exit variation, the charge indicated in the first paragraph of this numeral will be multiplied by the sum of the
volumetric equivalents aforementioned.	
	 
	 	
PARAGRAPH III: These payments will not grant the REMITTENT the right to incur in Entry or Exit Variations.	
	 
	 	
PARAGRAPH IV: When the CREG approves the Entry and Exit Variation Matrixes caused by the REMITTENT, said compensations will start to be applied and will replace the
aforementioned.	
	 
	 	
The Entry and Exit Variation Compensations caused by the REMITTENT will by calculated daily and will be invoiced per month, as established in numeral	3 Chapter
IV.
	 
	
7.      		
BALANCE ACCOUNT	
	 
	 	
7.1.      		
During the first twenty (20) days of each Delivery Month, the TRANSPORTER will calculate for the Delivery Month the Energy Unbalances. The Energy Balance Account will be updated every day with the measures taken by the
TRANSPORTER.	
	 

	 
	 	
7.2.      		
The REMITTENT agrees to provide the TRANSPORTER with the information that the REMITTENT is capable of providing, in order to calculate the unbalances. Under the TRANSPORTER’s criteria, this information must be provided
electronically.	
	 
	 	
7.3.      		
Before the initiation of this Contract the TRANSPORTER will create on the BEO the format of what will be the REMITTENT’S Balance Account, which will be integral to the Contract. The TRANSPORTER agrees to maintain updated
the information included in the BEO corresponding to the balance accounts created for the REMITTENT for the Exit Points 2) and 3) included in this Contract.	
	 
	
8.      		
COMPENSATION FOR UNBALANCES	
	 
	 	
In case that the Unbalance of Energy exceeds 0.5% of the Confirmed Energy Amount on the Delivery Month, the TRANSPORTER, at first instance, may agree with the REMITTENT on the accounting principles to follow, to manage,
settle and eliminate the Energy Unbalances. In case that said situation is not remedied to the TRANSPORTER’S satisfaction, it may demand payment from the REMITTENT, as compensation, of a sum equal to the excess multiplied by the Daily charge
for Reference Capacity.	
	 
	 	
This payment will not give the right to the REMITTENT to incur in Energy Unbalances.	
	 
	 	
PARAGRAPH I: The amounts liquidated for each Delivery Month for Compensations owed by the REMITTENT will be invoiced monthly together with the cost for Service as included in numeral 3 of
Chapter IV.	
	 
	
9.      		
ENTRY AND EXIT POINTS PRESSURE	
	 
	 	
9.1.      		
The TRANSPORTER will provide the REMITTENT with the Gas at the Exit Points at a minimum pressure of 350 psig.	
	 
	 	
9.2.      		
As of the Exit Point, the REMITTENT must take all the measures necessary to guaranty the capacity to take from the System the Volume for transportation it has contracted.	
	 
	 	
9.3.      		
The REMITTENT must provide what ever is necessary in order for the Gas to enter the Systems at Entry Point at a maximum operation pressure defined as 1200 psig. The TRANSPORTER may abstain from receiving Gas not compliant
with this pressure requirement.	
	 

	10.  	DEFAULT
    DUE TO LOW PRESSURE OR REDUCED QUALITY OF GAS AT EXIT POINT 
	 	 	 
	 	If the pressure at Exit
        Point is less that the minimum pressure defined in numeral 9 of this
        Chapter, and if for any reason the REMITTENT cannot take the amount of
        Confirmed Energy or if the REMITTENT decides to exercise its right not
        to receive the Gas pursuant with numeral 1.3 of Chapter III, the following
    will be applied: 
	 	 	 
	 	10.1.   	The
        TRANSPORTER will not charge for the difference between the Authorized
    Energy Amount and the Amount of Energy Taken by the REMITTENT. 
	 	 	 
	 	10.2.	The
    REMITTENT may demand that the TRANSPORTER pays for the following: 
	 	 	 
	 	 	a)  	The
        payment for fines, extra charges, compensations, and/or overcharges that
        the REMITTENT effectively incurs in relation to its clients and/or GCB,
    as a direct consequence of the events included in this Clause. 
	 	 	 	 
	 	 	b)  	The
        value of the investment or expenses that the REMITTENT effectively incurs
        due to the works necessary to correct or supply the missing Gas not transported,
    as a direct consequence of the events included in this Clause. 
	 	 	 
	 	 	PARAGRAPH: The
        TRANSPORTER will subtract the aforementioned concepts from the following
    transportation invoice. 
	 	 	 
	 	10.3.	In
        the event that the Parties do not decide on the payment of the aforementioned
    concepts, numeral 21 of Chapter II of this Contract will be applied. 
	 	 	 
	11.  	SUSPENSION 
	 	 	 
	 	11.1.   	The
    Parties may agree to suspend the obligations in this Contract. 
	 	 	 
	 	11.2.   	The
    REMITTENT may suspend its obligations in the following cases: 
	 	 	 
	 	 	a)  	Due
        to maintenance of the REMITTENT’S facilities for a period not greater
        than seven hundred twenty (720) continuous or discontinuous hours during
        each Fiscal Year. For these effects, the REMITTENT will inform TRANSPORTER
    every month of its maintenance program which 
	 	 	 

 

	 	 	 	must be delivered no
        later that the last working day of the Month previous to the scheduled
    maintenance. 
	 	 	 	 
	 	 	b)  	Due
        to force majeure or excusable event, during the time that the cause may
    last. 
	 	 	 	 
	 	 	c) 	Due
        to review and maintenance activities of the measurers at Exit Points
        No. 2 and No. 3 that may affect the gas flow for the REMITTENT, during
        the time that said effect lasts, as long as said tasks are carried out
    by the TRANSPORTER. 
	 	 	 
	 	11.3.   	The
    TRANSPORTER may suspend its obligations in the following cases: 
	 	 	 
	 	 	a)  	Due
        to technical repairs or maintenance of the transportation system facilities
        for a period not greater than seven hundred twenty (720) continuous or
        discontinuous hours during each Fiscal Year. For these effects, the TRANSPORTER
        will inform REMITTENT every month of its maintenance program included
        in the Detailed Work Plan, which must be sent no later than the last
        working day of the Month previous to the scheduled maintenance. Said
        Plan will include the estimated date for the maintenance activity, the
    duration of it, and the estimated impact on the capacity. 
	 	 	 	 
	 	 	b)	Due
        to force majeure or excusable event, during the time that the cause may
    last. 
	 	 	 	 
	 	 	c) 	Due
        to default in any payment from the REMITTENT for more than ten (10) calendar
    days, except when it is under a controversy. 
	 	 	 	 
	 	 	d)  	Due
        to breach or delay in the compliance of any obligation related to the
        measurements by the REMITTENT, for a period greater than thirty (30)
    days. 
	 	 	 	 
	 	11.4.   	The
        events included in literals a) and b) of numerals 11.2 and 11.3 will
        suspend the obligations of both Parties. That included in this numeral
        does not excuse the Parties of their payment obligations caused up to
    the moment of suspension. 
	 	 	 
	 	11.5.	  Except
        in unforeseeable cases, the suspending Party will notify the other Party
        of the suspension with at least forty eight (48) hours in advance. In
    unforeseeable cases, it will notify as soon as possible. 

 

 

 

	 
	 	11.6. 	
The suspension will stop when the cause that originated
it seizes, therefore the Party who suspended must notify the other Party of the
end of the suspension and the Contract will recommence automatically under the
terms previous to the suspension.	
	 
	
  CHAPTER IV 

	 
	
  ECONOMICAL CONDITIONS 

	 
	
1.      		
SERVICE APPLICATION	
	 
	 	
The REMITTENT may require the Service herein described for each Gas Day during the Execution Term of the Contract. The Nominations must be done as stated in numeral 3 Chapter III. The Service will not be subject to
restrictions or interruptions other than those included in numeral 11 of Chapter III.	
	 
	 	
The TRANSPORTER is not bound to transport a Gas volume greater than the Firm Contracted Capacity, unless accepted during the transportation nomination cycle.	
	 
	 	
PARAGRAPH: Occasional Transportation: Subject to its technical or operative feasibility, the TRANSPORTER may authorize the transportation of volumes in excess to the Firm Contracted
Capacity in the gas pipeline Ballena — Barrancabermeja, and/or in the gas pipeline Cusiana – Barrancabermeja, for a given Gas Day, as requested by the REMITTENT within the Nomination Process, as established in numeral 4 of Chapter III, which will be invoiced as included in numeral 2.3 hereinafter.	
	 
	
2.      		
CHARGES	
	 
	 	
2.1. 	The charges caused by this Contract
    include Fixed Charge, Variable Charge, and Fixed Charge for MO&M, indicated in Section I – ESTF, which reflect what has been included in consideration 2.10 of Chapter I of this Contract, therefore include stamp portion corresponding to the
REMITTENT in the system Ballena – Barrancabermeja according to the methodology agreed with the REMITTENTs located downstream from the Exit Point. In Annex III of this Contract the stamp calculus percentage memory to be covered by the REMITTENT
is included.	
	 
	 	 	
Paragraph: The charges in this Contract are established in pesos and dollars of December 31, 2005 applicable to 2006.	
	 
	 	
2.2. 	The value of the Service during the
    Delivery Month and that is
    monthly invoiced corresponds to the following three
    concepts: 
	 
	 	 	 
	 

	 	 	2.2.1.  	Costs for Fixed Charges,
        equal to the Firm Contracted Capacity multiplied by the twelfths part
        of the Fixed Charge. The Fixed Charge will be caused as of the Initiation
    Data of the service. 
	 	 	 
	 	 	2.2.2.  	Costs for Variable Charges, which
        is equal to the sum of the Daily Amounts Requested and Accepted by the
        REMITTENT for its clients with Entry Point Barrancabermeja, for the GCB
        and for the Turbogas of the GCB, multiplied by the Variable Charge. The
    Variable Charge will be caused as of the Initiation Date of the service.  
	 	 	 
	 	 	2.2.3.  	Costs for Charge for MO&M, equal
        to the Firm Contracted Capacity multiply by the twelfths part of the
        Fixed Charge for MO&M. The Fixed Charge for MO&M will be caused
    as of the Initiation Date of the service.  
	 	 	 
	 	2.3.  	As
        long as the TRANSPORTER has the transportation capacity to offer firm
        in the gas pipeline Ballena – Barrancabermeja, in case it authorizes
        for a Gas Day in this Gas pipeline, the transportation of amounts that
        relating to the daily average are greater to the Firm Contracted Capacity,
        as established in the Paragraph of numeral 1 of Chapter IV, the charge
        for occasional transportation service will be equal volumetric of the
        occasional capacity multiplied by a transportation charge that will be
        equal to a charge in dollars and a charge in pesos corresponding to the
    couple of charges 0% Fixed, 100 % Variable, as follows: 
	 	 	 
	 	 	 

	 
	
CHARGE TYPE 		
EXIT POINT 1) 		
EXIT POINT 2) AND 3)	
	
Charges 
in 
dollars 		
0.694 		
      0.765 

	
US$/kpc 		  		 

	
Charges 
in 
pesos 		
910 		
      988 

	
$/kpc 		  	  

 

	 	 	2.3.1.  	The aforementioned charges
        will be adjusted when the charges are adjusted with numeral 5.1 of Chapter
    II of this document.  
	 	 	 
	 	 	2.3.2.	 Nevertheless,
        in the moment that the TRANSPORTER does not have the transportation capacity
        to offer in the gas pipeline Ballena –
Barrancabermeja, the service of this greater daily volume will have a Occasional
Charge in dollars and an Occasional Charge in pesos, which correspond to the
maximum tariff of the couple 90% fixed 10% variable for the Exit Points 2 and
3 and the couple 50% fixed and 50% variable for Exit Point 1, as follows: 

 

 

 

	 
	
CHARGE TYPE 		
EXIT POINT 1) 		
EXIT POINT 2) AND 3)	
	
Charges 
in 
dollars 		
0.615 		
      0.609 

	
US$/kpc 		  		 

	
Charges 
in 
pesos 		
910 		
      988 

	
$/kpc 		  	  

	 	2.4.  	The
        charges for detour between Exit Point 1 and Exit Points 2 and 3 will
    be defined through written communication of the Parties.  
	 	 	 
	 	2.5.  	The
        charge for detour of Entry Point of Ballena to Cusiana for natural gas
        transportation through the system Cusiana – Barrancabermeja corresponds
    to: 

	 	 	 
	
CHARGE TYPE 		
EXIT POINT 1) 		
EXIT POINT 2) AND 3)	
	
Charges 
in 
dollars 		
0.792 		
      0.614 

	
US$/kpc 		  		 

	
Charges 
in 
pesos 		
608 		
      686 

	
$/kpc 		  	  

	 	 	
The aforementioned charges are additional to those included in the Firm transportation from Ballena to Barrancabermeja of the present Contract.	
	 
	 	2.6.     	
The Charge Values expressed in dollars will be taken with three (3) decimal points, as follows: if the fourth decimal point is less than 5, the third decimal point is maintained, and if the fourth decimal point is greater
that or equal to 5, the third decimal point is increased to 1, and the values of the charges expressed in pesos will be taken as whole numbers, amounts that must be updated pursuant with numerals 5.7 and 5.8 of article 5 of resolution CREG-001 of
January 20, 2000.	
	 
	 	2.7.  	
At the moment in which CREG modifies the Natural Gas transportation tariffs, the tariffs herein will be updated.	
	 
	3.	INVOICING	
	 
	 	3.1.   	
The TRANSPORTER will invoice, in pesos, the value of Service, the compensations for Entry and/or Exit Variations that have been caused and the Unbalances during the month before Delivery Month, using for invoicing the part of
the charges established in dollars, the Exchange Rate of the Finance Superintendence of the last day of the month in which transportation was rendered.	
	 

	 
	 	
3.2.      		
The invoice will be based on the result of adding the Daily Amounts Requested and Accepted by the REMITTENT for its clients with entry point in Barrancabermeja, for the GCB and for Turbogas of the CGB.	
	 
	 	
3.3.      		
The invoice issued by the TRANSPORTER will be executive title.	
	 
	 	
3.4.      		
For all effects of this Contract it is understood that the invoice is delivered by the TRANSPORTER to the REMITTENT on the date that it is provided with all the support documentation electronically or via facsimile to the
facsimile number registered in Section I – ESTF. Simultaneously, the TRANSPORTER will deliver the invoice originals with the corresponding support documentation by certified mail no later that the day following the facsimile delivery. The lack
of delivery of the original invoice within the timeframe will result in the extension of the term for payment equal to the term of delay.	
	 
	
4.      		
PAYMENTS	
	 
	 	
The REMITTENT will pay the invoice at the time and place that the TRANSPORTER decides to that effect, in pesos, no later that thirty (30) calendar days as of the delivery of the invoice.	
	 
	 	
If before the due date of payment the REMITTENT controverts an invoice of part thereof or of any of its concepts, it may abstain from paying the said amount, giving the reasons to do so. If within the following eight (8)
working days the Parties agree on the controversy amount, and if the controversy is resolved in favor of the TRANSPORTER, the REMITTENT will pay the owed amount on the ninth (9th) day working day following the date in which the dispute was resolved, with the corresponding default interests that may exist.	
	 
	 	
If the Parties do not agree on the amount of the controversy, the REMITTENT must pay as a minimum, the amount not under controversy of the invoice corresponding to the transportation service fee under the terms
aforementioned. In this case either Party may access the procedures included in numeral 21 of Chapter II.	
	 
	 	
In case the claim is solved in favor of the REMITTENT, the TRANSPORTER must reimburse the excess payment, if there is one, within five (5) working days following the agreement or decision, of the amicable settler or the
arbitration tribunal, as may correspond. The payment will be carried out within the following five (5) working days of the decision of the Parties or as decided by the amicable settler or the arbitration tribunal.	
	 
	 	 
	 

	5.      	DEFAULT PAYMENT
	 	 	 
	 	If the Party bound
          to do so, does not pay on the fixed dates any of the owed amounts to
          the other Party per this Contract, it will pay default interests. The
          default interests will be applied to the balance of the amount owed
          in pesos and pro rata to the time passed from the date in which the
          payment should have been done, pursuant with the Contract, until the
          day in which the payment is effectively made. 

       The TRANSPORTER will have the right to suspend
          the Service as of the eleventh (11th)
          calendar day as of the date in which the other Party incurs in payment
          default. If the payment default lasts fifty (50) days more, the affected
          Party has the right to terminate the Contract and require payment pursuant
    numeral 22 Chapter II. 

	 	 
	 	PARAGRAPH: For
        the effects of this Contract, the Parties waive both public and private
    requirements for default constitution. 
	 	 
	6.  	CONTRACT
    ANNUAL ESTIMATED VALUE
	 	 
	 	It is considered equal
        to the Firm Contracted Capacity multiplied by the Fixed Charges that
        cover the investment and the Charges for MO&M, expressed in dollars
    US$  and in pesos ($) . 
	 	 
	7.  	DISCOUNTS
    ON FIXED CHARGE  
	 	 
	 	7.1.	 If
          during the Contract execution Force Majeure or Excusable Events as
          included in numeral 20 Chapter II take place, or the TRANSPORTER does
          not deliver to the REMITTENT the Authorized Amount of Energy in an
          amount equal to the Firm Contracted Capacity, the TRANSPORTER will
          subtract from the REMITTENT the Fixed Charge an amount calculated in
          dollars and in pesos for each Gas Day, as follows: 

       Discount in dollars = [Firm Contracted Amount
          (kpc/d) – Volume taken by the REMITTENT (kpc/d)] x Fixed Charge
          (US$/kpc/d/a)/365 days) 

       Discount in pesos = [Firm Contracted Amount
          (kpc/d) – Volume taken by the REMITTENT (kpc/d)] x Fixed Charge
    (US$/kpc/d/a)/365 days) 

	 	 
	 	7.2.    	If
        the TRANSPORTER refuses to accept Gas deliveries of the REMITTENT or
        restricts deliveries to the REMITTENT based on its rejection right included
        in numeral 1 Chapter III related to Gas Quality, the TRANSPORTER is not
    bound to make any discount on the Fixed Charge. 
	 	 
	 	 

 

	 	7.3.    	As
          well, in the event that Suspension of obligations of this Contract
          take place pursuant with numeral 11 Chapter 3 by any of the Parties,
          there will be a discount to Fixed Charges both in pesos and in dollars,
          over the capacity that the TRANSPORTER did not have available as follows: 

       Discount in dollars = [Firm Contracted Amount
          (kpc/d) – Available Firm Volume that the TRANSPORTER has reported
          during maintenance (kpc/d)] x Fixed Charge (US$/kpc/d/a)/365 days) 

       Discount in pesos = [Firm Contracted Amount
          (kpc/d) – Available Firm Volume that the TRANSPORTER has reported
          during maintenance (kpc/d)] x Charge for MO&M ($/kpc/d/a)/365
    days) 

	 	 	 
	8.  	SIGNATURES  
	 	 	 
	 	AS PROOF THEREOF, the
        parties sign the Present Contract in two originals of exact content,
    on the sixth (6) day of October of two thousand six (2006) 
	 	 

 

	The Transporter 	The
    Remittent 
	(Signed) 	(Signed) 
	CARLOS ALBERTO GOMEZ GOMEZ	 CAMILO
    MARULANDA LOPEZ 
	CC. No. 13.810.800 of Bucaramanga 	CC. No. 10.008.868 of Pereira 
	 	 
	 	 
	 	 

 

 

 

ANNEX I 

SPECIFICATIONS OF NATURAL GAS TO BE TRANSPORTED THROUGH A

GAS PIPELINE

	
SPECIFICATIONS       	
      INT. S. 
	       	
      ENGLISH S. 

	
Minimum Gross Calorific Power (GHV)         	
      35.4 MJ/m3 
	     	
      950 BTU/ft3 

	
(Note 1)      	  
	    	  

	
Maximum Superior Calorific Power (GHV)      	
      42.8 MJ/m3 
	     	
      1150 BTU/ft3 

	
(Note 1)      	  
	    	  

	
Liquid Content (Note 2)       	
      Free of Liquids 
	    	
      Free of Liquids 

	
Maximum H2S Total Content   	
      6mg/m3  
	 	
      0.25 

	  	  
	    	
      grain/100PCS 

	
Maximum Sulfur Total Content        	
      23mg/m3 
	    	
      1.0 grain/100PCS 

	
Maximum CO2 Content in Volume %     	
      2%  
	 	
      2% 

	
Maximum N2 Content in Volume %      	
      3% 
	    	
      3% 

	
Maximum Inert Content in % Volume   	
      5%  
	 	
      5% 

	
(Note 3)     	  
	    	  

	
Maximum Oxygen Content in % Volume  	
      0.1% 
	    	
      0.1% 

	
Maximum Water Content       	
      97mg/m3 
	    	
      6.0 Lb/MPCS 

	
Maximum Temperature at Delivery     	
      49°C 
	    	
      120°F 

	
Minimum Temperature at Delivery     	
      4.5°C 
	    	
      40°F  

	
Maximum Dust and suspension material        	
      1.6mg/m3 
	     	
      0.7grain/1000 pc 

	
(Note 4)     	 
	    	  

Note 1: All data referred to in cubic meters or cubic feet of Gas refer to Standard Conditions, that is at 14.65 Psia ad 15.6°C (60°F) 

Note 2: The natural gas must be delivered at an amount that it is not liquid at the critical operation conditions of the Transportation System. The characteristic used to measure the
quality will be “Cricondentherm”, which will be fixed for each case in particular depending on the use and the zones where the Gas is used.

Note 3: The inert content is the sum of CO2, nitrogen and oxygen. 

Note 4: the maximum size of the particles must be 15 microns.

 

ANNEX II 

MEASUREMENTS 

The REMITTENT must guaranty that the Gas consumption ratio at its facilities will be, at all times within the operative limits of the measurement system installed.  In case the consumption ratio is over the measurer range
that is over the operational limits the REMITTENT will compensate the TRANSPORTER for the Gas not measured and will be responsible for the operational problems that such a situation may cause.  

Additionally, if the REMITTENT requires enhancing its consumption capacity (both increase in pressure and in volume), it must cover all costs that may be required at Entry and Connection Point.  

The temperature of the Gas that flows through the measurers to compute the Gas amounts will be determined using continuous registration equipment.  The arithmetic average of the temperature registered for each Gas 24-hour
Day, or during the period of those 24 hours in which the Gas flow, will be used to compute the amounts of Gas, or as well to the effects of such computation, the temperature instantaneous measures may be applied to the measuring instruments.

	
    1.     
	The specific gravity of the Gas that
        flow through the measurers to compute the amounts of Gas at Entry Point,
        will be determined, except when agreed by the Parties, using a gravimeter
        of continuous registration or chromatographs installed on the line. The
        arithmetic average of the 24-hour registry, or of those 24 hours during
        which Gas flowed, continuous instantaneous measurements of specified
        weight may be applied to the measurement instruments to obtain the result
        of the amounts. At Exit Point the specified gravity will be determined
    pursuant with the Parties’ agreement. 
	 	 
	2.   	The
        distance of the Gas of the Ideal Gas Laws will be calculated following
        the recommendations of the “American Gas Association” (A. G.
        A. ) Gas Measurement Committee Report No.  “Compressibility Factors
        of Natural Gas and other related Hydrocarbons Gases”. IF the Gas’ composition
        were such that it turned out that the aforementioned procedure were inapplicable,
        other determination of deviation factors methods may be used pursuant
    to agreement between the REMITTENT and the TRANSPORTER.
	 	 
	3.   	The
        calorific power will be determined by (1) the use of a chromatograph
        dully located and of an acceptable trademark, (2) the calculation by
        fraction analysis, (3) the methods setout by the “A. G. A. ” Gas
    Measurement 

 

	 	
  Committee Report No. 5 latest edition, or (4) other methods agreed by the Parties.     
	 
	
4.        	
The orifice measurers where used, will be constructed and installed pursuant with the “A.G.A.” Gas Measurement Committee Report No. 3 latest edition, for B=0.7 allowing vein straightening tools.     
	 
	
5.        	
It is understood by relative density the relationship
between the mass of a given gas volume and the mass of that same volume of dry
air, free of carbon dioxide, measured under the same pressure and temperature
conditions.  The values of the constant physicals corresponding to the Natural
gas components that may be necessary to adopt for the effect of calculation,
will be those included in table 3-F-1 of the AGA Report No. 3 or in the more
recent AGA GPA 2145. The  relative density of the Gas, will be determined, except
otherwise agreed by the Parties, using a gravimeter of continuous registry. The
arithmetic average of the 24-hour registry, or of the period of 24
hours in which Gas flowed, or the instantaneous continuous measures of relative
density, may be applied to the measurement instruments to obtain the computation
of amounts. 
	 
	
6.        	
The calorific power will be determined as specified in RUT.      
	 
	
7.         	
Inaccurate measurement    
	 
	 	
In case a measurer is out of order or would provide inaccurate readings, the amount of delivered Natural Gas will be determined pursuant the RUT.        
	 
	
8.         	
Verification      
	 
	 	
The accuracy of the measurement equipment of the TRNASPORTER may be verified by the REMITTENT from time to time at its own judgment. But the TRANSPORTER may summon the REMITTENT’S representatives to verify the accuracy
of the measurement equipment, but cannot require, as routine, the accuracy verification of said equipment more than once every thirty (30) days. 
	 
	 	
The TRANSPORTER must provide the REMITTENT with a monthly
program of measurement equipment calibration at Exit Point 1) established in
numeral 4.4 of section I – ESTF,
as well as to inform of the verification of said measurers calibration three
(3) working days in advance for the REMITTENT or its operator to be present.
For Exit Points 2) and 3) described in the measurement numeral, it will be the
REMITTENT who will provide the TRANSPORTER with the monthly calibration measurement
equipment program, as well as to confirm said measurers calibration no less than
three    

	 	(3) working days in advance in order
    for the TRANSPORTER or its operator to be present.  
	 	 
	9. 
   	Adjustment
    due to inaccuracy 

	 	 
	 	 If, according to the evaluation, any measurement
          equipment, including registering chromatographs, shows an error margin
          no greater than one percent (1%), the previous readings will be considered
          exact to commutate the deliveries, but said equipment will be adjusted
          immediately in order for it to work correctly. If, according to the
          evaluation, any measurement equipment shows an error margin greater
          than one percent (1%), in an average flow per hour reading of a period
          posterior to the last evaluation, all the prior evaluations of said
          equipment will be corrected to zero error to all certain period. In
          case the invoicing measurer is out of order or it is determined that
          it is providing inexact registries, the delivered gas volumes during
    such time will be calculated as follows: 

	 	 
	 	 	- 
    	Using
          the registry of any existent measurer(s) and that by agreement of the
          Parties are providing exact registries, or 
     
	 	 	 	 
	 	 	-  	Correcting
          the error if the amount or error percentage is variable through calibration,
          proof or mathematical calculation. 
   
	 	 	 	 
	 	 	-  	In
        the absence of the aforementioned information, relating to the amount
        of deliveries of the deliveries done through the periods under similar
        conditions, when the invoicing measurer was considered to be providing
    accurate registries. 
	 	 	 	 
	10.  	Inspection
    of Orifice Plaque 
	 	 
	 	Every time there is a change in the
        orifice plaque or to its periodical inspection, there will be a previous
        notification to the interested Party in order to allow for their presence,
        having the TRANSPORTER to verify and inform about the involved plaque
        or plaques, as follows: orifice diameter, status of the straight boarder,
        curvature of the plaque, exterior diameter, eccentricity or the plaque
    and all the information that the inspection deems necessary. 
	 	 
	11.  	Gravimeter 
	 	 
	 	The verification will be done by
        comparing a sample of gas by the TRANSPORTER, whose density will be determined
        by the method of gravitometric scale Ac-Me. In case the referred element
        does not contrast, a sample of Gas with certified relative density may
    be used. 

 

	11.  	Chromatograph 
	 	 
	 	
       The TRANSPORTER who is the owner and operative
          Party of the equipment at Entry Point will calibrate it with a patron
          gas of quality Primary standard” with similar composition to the
    contrasting gas. 

	 	 
	13.  	Readings
    File
	 	 
	 	 The TRANSPORTER and the REMITTENT
          will keep the original documents or diskettes of all proof, graphics,
          or any other similar registry data for a period of four years or a
          shorter period if allowed by applicable regulations of the Energy and
          gas Regulation Commission – CREG – as of the date of the
    evaluation. 

 

 

Annex III 

Calculations Data 

Percentage of stamp that Ecopetrol S.A. must assume 

In the Ballena System – Barrancabermeja 

June to December of 2006 

	
Remittent    	 	    	 	
      % Ecopetrol 
	 	
      % Client 
	 	
      Km. Client         
	    
	
Termocentro  	 	
53.00        	 	
83.53     	
%    	 	
16.47     	
%    	 	
114.16       	 	    
	
Termosiera   	 	
60.00        	 	
79.25     	
%    	 	
20.75     	
%    	 	
151.60       	 	    
	
Termodorada  	 	
12.40        	 	
68.77     	
%    	 	
31.23     	
%    	 	
262.94       	 	    
	
Termovalle   	 	
36.00        	 	
47.54     	
%    	 	
52.46     	
%    	 	
638.92       	 	    
	
Ferticol     	 	
1.20         	 	
100.00    	
%    	 	
0.00      	
%    	 	
-    	 	    
	
Gases de Barrancabermeja     	 	
4.50         	 	
100.00    	
%    	 	
0.00      	
%    	 	
-    	 	    
	
Firm Contracts total  	 	
167.10        	 	    	     	 	    	     	 	
247.8         	 	
      70.03% 

Annex IV 

Capacity of Contracted Firm 

     
The Contracting Firm Capacity in the Ballena – Barrancabermeja gas pipeline is ... 

1) Current available capacity: 

	
Exit       	       	
      YEAR 2007 

	
Point      	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
Jan       	      	
Feb       	      	
Mar       	      	
Apr       	      	
May       	      	
Jun       	      	
Jul       	      	
Aug       	      	
Sep       	      	
Oct       	      	
Nov       	      	
Dec       
	
1 	      	
45.086    	      	
45.086    	      	
45.086    	      	
45.086    	      	
45.066    	      	
45.066    	      	
45.066    	      	
45.066    	      	
45.066    	      	
45.066    	      	
45.066    	      	
45.066    
	
2 	      	
  4.000      	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     
	
3 	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    
	
Total     	      	
90.086    	      	
90.086    	      	
90.086    	      	
90.086    	      	
90.066    	      	
90.066    	      	
90.066    	      	
90.066    	      	
90.066    	      	
90.066    	      	
90.066    	      	
90.066    

	
Exit       	       	
      YEAR 2008 

	
Point      	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
Jan       	      	
Feb       	      	
Mar       	      	
Apr       	      	
May       	      	
Jun       	      	
Jul       	      	
Aug       	      	
Sep       	      	
Oct       	      	
Nov       	      	
Dec       
	
1 	      	
51.186    	      	
51.186    	      	
51.186    	      	
51.186    	      	
51.156    	      	
51.156    	      	
51.156    	      	
51.156    	      	
51.156    	      	
51.156    	      	
51.156    	      	
55.450    
	
2 	      	
  4.000      	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     
	
3 	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    
	
Total     	      	
96.186    	      	
96.186    	      	
96.186    	      	
96.186    	      	
96.156    	      	
96.156    	      	
96.156    	      	
96.156    	      	
96.156    	      	
96.156    	      	
96.156    	      	
96.156    

	
Exit       	    	
      YEAR 2009 

	
Point      	      	         	   	         	   	         	   	         	   	         	   	         	   	         	   	         	   	         	   	         	   	         	   	         
	    	      	
Jan       	      	
Feb       	      	
Mar       	      	
Apr       	      	
May       	      	
      Jun 
	      	
Jul       	      	
Aug       	      
	
      Sep 
	      
	
      Oct 
	      	
Nov       	      	
Dec       
	
1 	      	
52.071    	      	
52.071    	      	
52.071    	      	
52.071    	      	
52.771    	      	

 52.771 
	      	
52.771    	      	
52.771    	      	
      52.771 
	 
	
      52.771 
	      	
52.771    	      	
52.771    
	
2 	      	
  4.000      	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
    4.000 
	      	
4.000     	      	
4.000     	      	

 4.000 
	      
	

 4.000 
	      	
4.000     	      	
4.000     
	
3 	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	
41.000    	      	

 41.000 
	      	
41.000    	      	
41.000    	      	
      41.000 
	      
	
      41.000 
	      	
41.000    	      	
41.000    
	
Total     	      	
97.071    	      	
97.071    	      	
97.071    	      	
97.071    	      	
97.771    	      	

 97.771 
	      	
97.771    	      	
97.771    	      	
      97.771 
	      
	
      97.771 
	      	
97.771    	      	
97.771    

	
Exit       	       	
      YEAR 2010 

	
Point      	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	
      Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 
	 
	
      Dec 

	
1 	      	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 
	 
	
      55.092 

	
2 	      	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	      	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 

	
Total     	      	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 
	 
	
      100.092 

	
Exit       	       	
      YEAR 2011 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	

 Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 
	 
	
      Dec 

	
1 	       	
      84.292 
	    
	
      84.292 
	    
	
      84.292 
	    
	
      84.292 
	    
	
      92.192 
	    
	

 92.192 
	    
	
      92.192 
	    
	
      92.192 
	    
	
      92.192 
	    
	
      92.192 
	    
	
      92.192 
	    
	
      92.192 

	
2 	      	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	

 4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	      	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	

 41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 

	Total 	 	129.292 
	
	129.292 
	
	129.292 
	
	129.292 
	
	137.292 
	
	137.292 
	
	137.292 
	
	137.292 
	
	137.292 
	
	137.292 
	
	137.292 
	
	137.292 

	
Exit       	       	
    YEAR 2012 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	                	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	
      Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 

	
1 	      	
      92.371 
	 
	
      92.371 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 
	 
	
      92.871 

	
2 	      	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	      	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 

	
Total     	       	
      137.371 
	    
	
      137.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 
	    
	
      142.371 

2) Current available capacity plus Phase I: 

	
Exit       	       	
      YEAR 2007 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	
      Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 
	 
	
      Dec 

	
1 	       	
      45.086 
	    
	
      45.086 
	    
	
      45.086 
	    
	
      45.086 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 
	    
	
      89.066 

	
2 	      	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	       	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 

	
Total     	       	
      90.086 
	    
	
      90.086 
	    
	
      90.086 
	    
	
      90.086 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 
	    
	
      134.066 

	
Exit       	       	
      YEAR 2008 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
Jan       	      	
Feb       	      	
Mar       	      	
Apr       	      	
May       	      	
Jun       	      	
Jul       	      	
Aug       	      	
Sep       	      	
Oct       	      	
Nov       	      	
Dec       
	1 	 	95.186 	 	95.186 	 	95.186 	 	95.186 	 	95.156 	 	95.156 	 	95.156 	 	95.156 	 	95.156 	 	95.156 	 	95.156 	 	99.450 
	
2 	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     
	
3 	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     
	
Total     	       	
140.186     	       	
140.186     	       	
140.186     	       	
140.186     	       	
140.156     	       	
140.156     	       	
140.156     	       	
140.156     	       	
140.156     	       	
140.156     	       	
140.156     	       	
144.450     

	
Exit       	       	
      YEAR 2009 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
Jan       	      	
Feb       	      	
Mar       	      	
Apr       	      	
May       	      	
Jun       	      	
Jul       	      	
Aug       	      	
Sep       	      	
Oct       	      	
Nov       	      	
Dec       
	
1 	       	
96.071     	       	
96.071     	       	
96.071     	       	
96.071     	       	
96.771     	       	
101.771     	       	
101.771     	       	
101.771     	       	
101.771     	       	
101.771     	       	
101.771     	       	
101.771     
	
2 	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     	      	
4.000     
	
3 	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	  	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     	       	
41.000     
	
Total     	       	
141.071     	       	
141.071     	       	
141.071     	       	
141.071     	       	
141.771     	       	
146.771     	       	
146.771     	       	
146.771     	       	
146.771     	       	
146.771     	       	
146.771     	       	
146.771     

	
Exit       	       	
      YEAR 2010 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
    Jan 
	 
	
    Feb 
	 
	
    Mar 
	 
	
    Apr 
	 
	
    May 
	 
	

 Jun 
	 
	
    Jul 
	 
	
    Aug 
	 
	
    Sep 
	 
	
    Oct 
	 
	
    Nov 
	 
	
    Dec 

	
1 	       	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	

 99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 
	    
	
    99.092 

	
2 	      	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	

 4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 
	 
	
    4.000 

	
3 	       	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	

 41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 
	    
	
    41.000 

	
Total     	       	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	

 144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 
	    
	
    144.092 

	
Exit       	       	
      YEAR 2011 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	      	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	

 Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 
	 
	
      Dec 

	
1 	       	
      128.292 
	    
	
      128.292 
	    
	
      128.292 
	    
	
      128.292 
	    
	
      130.000 
	    
	

 130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 

	
2 	      	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	

 4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	       	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	

 41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 
	    
	
      41.000 

	
Total     	       	
      173.292 
	    
	
      173.292 
	    
	
      173.292 
	    
	
      173.292 
	    
	
      175.000 
	    
	

 175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 

	
Exit       	       	
    YEAR 2012 

	Point	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    	      	    
	    	   	
      Jan 
	 
	
      Feb 
	 
	
      Mar 
	 
	
      Apr 
	 
	
      May 
	 
	
      Jun 
	 
	
      Jul 
	 
	
      Aug 
	 
	
      Sep 
	 
	
      Oct 
	 
	
      Nov 

	
1  	  	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 
	    
	
      130.000 

	
2 	     	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 
	 
	
      4.000 

	
3 	      	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 
	 
	
      41.000 

	
Total     	      	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 
	    
	
      175.000 

CHARGES 

	CHARGE   	    	
POINT 1   	     	
POINT 2 & 3   	 
	     
	
C.F. (US$/KPC-year)  	      	
74.831   	      	
134,695  	 
	
Stamp CF(US$/KPCD-year)      	      	
23.114   	      	
59,412   	 
	
Total CF (US$/KPCD-year)      	      	
97,945    	      	
194,107   	 

1) ESTIMATED CONTRACT ANNUAL VALUE WITH CURRENT AVAILABLE CAPACITY 

	 
      ESTIMATED
    CONTRACT ANNUAL VALUE WITH CURRENT AVAILABLE CAPACITY 

	 	2007 
	2008 
	 2009 
	2010 
	2011 
	 2012 

	US$ 	13,149,435 
	13,781,294 
	14,166,267 
	14,130,778 
	17,506,614 
	16,704,283 

	$ 	31,210,081,258 
	33,353,721,865 
	34,659,777,008 
	34,539,378,251 
	45,992,213,072 
	44,386,944,094 

 2) ESTIMATED CONTRACT ANNUAL VALUE
      WITH CURRENT AVAILABLE CAPACITY PLUS PHASE I 

  	ESTIMATED
        CONTRACT ANNUAL VALUE WITH PHASE I 

	 	2007 
	2008 
	2009 
	2010 
	2011 
	2012 

	US$ 	16,022,487 
	18,090,873 
	18,475,845 
	18,440,357 
	21,411,898 
	19,678,700 

	$ 	40,957,174,723 
	47,974,362,061 
	49,280,417,204 
	49,160,018,448 
	59,241,246,338 
	54,477,927,200a0000727510-95000.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

INDENTURE OF LEASE

BETWEEN

HOLLAND REALTY CORP., Landlord

and

ENZON, INC., Tenant

Dated: April 1, 1995

INDEX

							
	ARTICLE I          Demise of Premises	 	 	 	 	
- 1
-
	Section 1.01.	 	 	 	 	
- 1
-
	 	 	 	 	 		 	 
	ARTICLE II         Term of Lease	 	 	 	 	- 1 -
	Section 2.01.	 	 	 	 	- 1 -
	 	 	 	 	 		 	 
	ARTICLE III        Rent	 	 	 	 	- 1 -
	
    Section 3.01.	 	 	 	 	- 1 -
	
    Section 3.02.	 	 	 	 	
- 2
-
	
    Section 3.03.	 	 	 	 	- 2 -
	
    Section 3.04.	 	 	 	 	- 2 -
	
    Section 3.05.	 	 	 	 	
- 3
-
	 	 	 	 	 		 	 
	ARTICLE IV        The Demised Premises	 	 	 	 	- 3 -
	
    Section 4.01.	 	 	 	 	- 3 -
	
    Section 4.02.	 	 	 	 	- 3 -
	
    Section 4.03.	 	 	 	 	- 3 -
	 	 	 	 	 		 	 
	ARTICLE V         Use	 	 	 	 	- 3 -
	
    Section 5.01.	 	 	 	 	- 3 -
	
    Section 5.02.	 	 	 	 	- 3 -
	 	 	 	 	 		 	 
	ARTICLE VI        Quiet Enjoyment	 	 	 	 	
- 4
-
	
    Section 6.01.	 	 	 	 	- 4 -
	 	 	 	 	 		 	 
	ARTICLE VII        Additional Rent, Taxes, Assessments	 	 	 	 	 	
	Water Rates, Charges, Etc.	 	 	 	 	- 4 -
	
    Section 7.01.	 	 	 	 	- 4 -
	
    Section 7.04.	 	 	 	 	
- 5
-
	
    Section 7.05.	 	 	 	 	- 5 -
	
    Section 7.06.	 	 	 	 	
- 6
-
	
    Section 7.07.	 	 	 	 	- 6 -
	 	 	 	 	 		 	 
	ARTICLE VIII      Insurance	 	 	 	 	- 6 -
	
    Section 8.01. Tenant's Insurance	 	 	 	 	- 6 -
	
    Section 8.02. Landlord's Insurance	 	 	 	 	
- 8
-
	
      Section 8.03. Waiver of Claim/Waiver of
    Subrogation	 	 	 	 	- 9 -
	
    Section 8.04. Indemnity	 	 	 	 	
- 9
-
	
    Section 8.05. Escrow	 	 	 	 	
- 10
-
	 	 	 	 	 		 	 
	ARTICLE IX        Repairs	 	 	 	 	- 10 -
	
    Section 9.01.	 	 	 	 	- 10 -
	
    Section 9.02.	 	 	 	 	
- 11
-
							
	 	 	 	 	 	 	 
	ARTICLE X    Tenant's Additional Obligations	 	 	 	 	
- 12 -
	
    Section 10.01.	 	 	 	 	
- 12 -
	 	 	 	 	 		 	 
	ARTICLE XI        Casualty	 	 	 	 	
- 13
-
	
    Section 11.01.	 	 	 	 	- 13 -
	
    Section 11.02.	 	 	 	 	- 13 -
	
    Section 11.03.	 	 	 	 	- 13 -
	
    Section 11.04.	 	 	 	 	- 13 -
	 	 	 	 	 		 	 
	ARTICLE XII       Condemnation	 	 	 	 	
- 15
-
	
    Section 12.01.	 	 	 	 	- 15 -
	
    Section 12.02.	 	 	 	 	
- 16
-
	 	 	 	 	 		 	 
	ARTICLE XIII      Compliance With Laws, Etc.	 	 	 	 	- 16 -
	
    Section 13.01.	 	 	 	 	- 16 -
	
    Section 13.02.	 	 	 	 	- 16 -
	
    Section 13.03.	 	 	 	 	
- 17
-

	ARTICLE XIV      Subordination	 	 	 	 	
- 22
-
	
    Section 14.01.	 	 	 	 	- 22 -
	 	 	 	 	 		 	 
	ARTICLE XV       Defaults, Remedies	 	 	 	 	
- 23
-
	
    Section 15.01.	 	 	 	 	
- 23 -
	
    Section 15.02.	 	 	 	 	
- 25
-
	
    Section 15.03.	 	 	 	 	
- 25 -
	
    Section 15.04.	 	 	 	 	
- 26
-
	
    Section 15.05.	 	 	 	 	
- 27
-
	 	 	 	 	 		 	 
	ARTICLE XVI      Assignment
      and Sublease	 	 	 	 	
- 27 -
	
    Section 16.01.	 	 	 	 	
- 27 -
	
    Section 16.02.	 	 	 	 	
- 27 -
	
    Section 16.03.	 	 	 	 	
- 27 -
	
    Section 16.04.	 	 	 	 	
- 28
-
	
    Section 16.05.	 	 	 	 	
- 28 -
	
    Section 16.06.	 	 	 	 	
- 30
-
	
    Section 16.07.	 	 	 	 	
- 30 -
	 	 	 	 	 		 	 
	ARTICLE XVII     Notices	 	 	 	 	
- 31
-
	
    Section 17.01.	 	 	 	 	
- 31 -
	 	 	 	 	 		 	 
	ARTICLE XVIII    Holding
      Over	 	 	 	 	
- 32
-
	
    Section 18.01.	 	 	 	 	
- 32 -
	 	 	 	 	 		 	 
	ARTICLE XIX      Liens	 	 	 	 	
- 32 -
	
    Section 19.01.	 	 	 	 	
- 32 -
	 	 	 	 	 		 	 
	ARTICLE XX       Condition
      of Demised Premises, Loss, Etc.	 	 	 	 	
- 33
-
	
    Section 20.01.	 	 	 	 	
- 33 -
	 	 	 	 	 		 	 
	ARTICLE XXI      Inspection,
      For Sale and For Rent Signs	 	 	 	 	
- 33 -
	
    Section 21.01.	 	 	 	 	
- 33 -
	 	 	 	 	 		 	 
	ARTICLE XXII     Signs	 	 	 	 	
- 34
-
	
    Section 22.01.	 	 	 	 	
- 34 -
	 	 	 	 	 		 	 
	ARTICLE XXIII    Security
      and Late Charge	 	 	 	 	
- 34 -
	
    Section 23.01.	 	 	 	 	
- 34 -
	
    Section 23.02.	 	 	 	 	
- 34 -
	
    Section 23.03.	 	 	 	 	
- 34 -
	
    Section 23.04.	 	 	 	 	
- 34 -
	 	 	 	 	 		 	 
	ARTICLE XXIV    Financial Statements	 	 	 	 	
- 35
-
	
    Section 24.01.	 	 	 	 	
- 35 -
	 	 	 	 	 		 	 
	ARTICLE XXV     Broker	 	 	 	 	
- 35 -
	
    Section 25.01.	 	 	 	 	
- 35 -
							
	 	 	 	 	 	 	 
	ARTICLE XXVI    Short Form Memorandum of Lease	 	 	 	 	
- 35 -
	
    Section 26.01.	 	 	 	 	
- 35 -
	 	 	 	 	 		 	 
	ARTICLE XXVII   Waiver of Trial by Jury	 	 	 	 	
- 36
-
	
    Section 27.01.	 	 	 	 	
- 36 -
	 	 	 	 	 		 	 
	ARTICLE XXVIII  Waiver
      of Distraint	 	 	 	 	
- 36 -
	
    Section 28.01.	 	 	 	 	
- 36 -
	 	 	 	 	 		 	 
	ARTICLE XXIX     ERISA Representation	 	 	 	 	
- 36 -
	
    Section 29.01.	 	 	 	 	
- 36 -
	 	 	 	 	 		 	 
	ARTICLE XXX     Miscellaneous	 	 	 	 	
- 37
-
	
    Section 30.01.	 	 	 	 	
- 37 -
	
    Section 30.03.	 	 	 	 	
- 37 -
	
    Section 30.04.	 	 	 	 	
- 37 -
	
    Section 30.05.	 	 	 	 	
- 37 -
	
    Section 30.06.	 	 	 	 	
- 37 -
	
    Section 30.07.	 	 	 	 	
- 38
-
	
    Section 30.08.	 	 	 	 	
- 38 -

	
    Section 30.09.	 	 	 	 	
- 38 -
	
    Section 30.10.	 	 	 	 	
- 38 -
	
    Section 30.11.	 	 	 	 	
- 38 -
	
    Section 30.12.	 	 	 	 	
- 38 -
	
    Section 30.13.	 	 	 	 	
- 39
-
	
    Section 30.14.	 	 	 	 	
- 39 -
	
    Section 30.15.	 	 	 	 	
- 39 -
	 	 	 	 	 		 	 
	ARTICLE XXXI    Personal
      Liability	 	 	 	 	
- 39 -
	
    Section 31.01.	 	 	 	 	
- 39 -
	 	 	 	 	 		 	 
	ARTICLE XXXII   Landlord's Retained Rights	 	 	 	 	
- 40
-
	
    Section 32.01.	 	 	 	 	
- 40 -
	 	 	 	 	 		 	 
	ARTICLE XXXIII  Intentionally
      Omitted	 	 	 	 	
- 40 -
	 	 	 	 	 		 	 
	ARTICLE XXXIV  Intentionally Omitted	 	 	 	 	
- 40 -
	 	 	 	 	 		 	 
	ARTICLE XXXV   Intentionally Omitted	 	 	 	 	
- 40 -
	 	 	 	 	 		 	 
	ARTICLE XXXVI  Intentionally Omitted	 	 	 	 	
- 40 -

THIS LEASE, dated the 1st day of April 1995, between HOLLAND REALTY CORP., a Delaware corporation, with an address c/o LPC Commercial Services, Inc., 1530 Wilson Boulevard, Arlington,
Virginia 22209 (hereinafter referred to as the "Landlord"); and ENZON, INC., a corporation of the State of Delaware, with offices at 20 Kingsbridge Road, Piscataway, New Jersey 08854 (hereinafter referred to as the "Tenant").

W I T N E S S E T H :

ARTICLE I

Demise of Premises

Section 1.01. The Landlord, for and in consideration of the rents to be paid and of the covenants and agreements hereinafter contained to be kept and performed by the Tenant, hereby demises
and leases unto the Tenant, and the Tenant hereby hires and takes from the Landlord, for the term and the rent and upon the covenants and agreements hereinafter set forth, the premises described in Exhibit A attached hereto and made a part hereof, which is situated on that certain parcel of land located at 20 Kingsbridge Road, Piscataway, Middlesex County, New Jersey (hereinafter referred to as the
"Real Property"), as described on Exhibit A-l attached hereto and made a part hereof (such premises, together with the Building as hereinafter defined, being hereinafter referred to as the "Premises" or "Demised Premises").

The Landlord and the Tenant covenant and agree as follows:

ARTICLE II

Term of Lease

Section 2.01. The term of this Lease and the demise of the Demised Premises shall be for a period of approximately twelve (12) years and two and one-half (2 1/2 ) months commencing on the
date hereof ("Commencement Date"), and ending at 11:59 p.m. on June 15, 2007, or on such earlier termination as hereinafter set forth (which term is hereinafter called the "Term" or "Lease Term").

ARTICLE III

Rent

Section 3.01. The Tenant shall pay to the Landlord, during the term without counterclaim, deduction or set-off, basic rent in the amount of Six Million Four Hundred Sixteen Thousand Five
Hundred Eighty-Three and 30/100 ($6,416,583.30) Dollars (hereinafter "Term Basic Rent"), payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private
debts.

Section 3.02. The Term Basic Rent shall be payable as follows:

			
	 	 		 	
	 	 		 	
	 		
Annual	
Monthly
	 		
Basic Rent	
Basic Rent
	 		 	 
	
April 1, 1995 -	
$440,002.57	
$36,666.88
	
June 15, 1996 -	 		 	
	
June 16, 1996 -	
$496,485.57	
$41,373.80
	
June 15, 2002 -	 		 	
	
June 16, 2002 -	
$581,210.07	
$48,434.17
	
June 15, 2007 -	 		 	

The payment of the aforesaid Monthly Basic Rent shall commence on the Commencement Date of the Term and shall be payable in advance on the first day of each calendar month during the Term, except that a proportionately
lesser sum may be paid for the last month of the Term of this Lease if the Lease Term ends on a date other than the last day of the month, in accordance with the provisions of this Lease hereinafter set forth. The Monthly Basic Rent, and any
Additional Rent, shall be payable at the office of the Landlord, at the address above set forth, or as may otherwise be directed by notice from the Landlord to the Tenant

Section 3.03. The Tenant shall, and will, during the Term well and truly pay, or cause to be paid, to the Landlord, the Monthly Basic Rent as herein provided and all other sums that may
become due and payable by the Tenant, hereunder, at the time and in the manner herein provided, without counterclaim, offset or deduction; and all other sums due and payable by the Tenant hereunder may, at the Landlord's option, be deemed to be, and
treated as, Additional Rent, and added to any Monthly Basic Rent due and payable by the Tenant hereunder, and, in the event of nonpayment of such other sums, the Landlord shall have all the rights and remedies herein provided
for in the case of the nonpayment of Term Basic Rent and Additional Rent, or of a breach of any covenant to be performed by the Tenant.

Section 3.04. The Basic Rent (Term, Annual and Monthly) payable by the Tenant pursuant to this Lease is intended to be net to the Landlord, and all other charges and expenses imposed upon
the Demised Premises or incurred in connection with its use, occupancy, care, maintenance, operation and control, including but not limited to the charges and expenses payable pursuant to Articles VII and VIII of this Lease, shall be paid by the
Tenant, excepting liens resulting from acts or omissions of the Landlord and other payments to be paid or obligations undertaken by the Landlord as specifically provided in this Lease.

Section 3.05. As used in this Lease, "Basic Rent" shall mean either Term Basic Rent, Annual Basic Rent or Monthly Basic Rent, as appropriate.

ARTICLE IV

The Demised Premises

Section 4.01. The Demised Premises includes a building consisting of approximately 56,483 gross square feet of space (which building is hereinafter called the "Building") previously erected
thereon which the Tenant acknowledges that it has inspected and is fully familiar with its condition and is leasing the same in an "AS IS" condition.

Section 4.02. Intentionally Omitted.

Section 4.03. The Demised Premises hereinabove described constitutes a self-contained unit and nothing in this Lease shall impose upon the Landlord any obligation to provide any services
for the benefit of the Tenant, including but not limited to water, gas, electricity, heat or janitorial, unless and to the extent expressly provided in this Lease.

ARTICLE V

Use

Section 5.01. The Demised Premises may be used by the Tenant for research and development, manufacturing and warehousing of biochemical products and office use incidental thereto and for
any other lawful purpose. Nothing contained herein shall be construed as a representation on the part of Landlord that Tenant's use of the Demised Premises is a permitted use and, unless otherwise stated in this Lease, it shall be Tenant's
obligation, at Tenant's sole cost and expense, to make application for and to obtain any and all certificates and/or permits to permit Tenant's use from any governmental agencies having jurisdiction over the Demised Premises.

Section 5.02. The aforesaid permitted use does not permit the stacking of merchandise and/or materials against walls or columns, nor does it permit the hanging of equipment from (or
otherwise loading) the roof or structural members of the Building.

ARTICLE VI

Quiet Enjoyment

Section 6.01. Landlord covenants that if, and so long as, Tenant pays the Basic Rent, and any Additional Rent as herein provided, and performs
the covenants hereof, Landlord shall do nothing to affect Tenant's right to peaceably and quietly have, hold and enjoy the Demised Premises for the Term herein mentioned, subject to the provisions of this Lease and to
any mortgage or deed of trust to which this Lease shall be subordinate.

ARTICLE VII

Additional Rent, Taxes, Assessments

Water Rates, Charges, Etc.

Section 7.01. The Tenant shall pay, before any interest or penalties accrue thereon, all Real Estate Taxes, as hereinafter defined, and all water and sewer rates and charges imposed during
the Term on the Demised Premises, adjusted proportionately for any partial Lease year. Upon request, Tenant shall exhibit to the Landlord receipted bills or other proof of payment.

Notwithstanding anything in this Section 7.01 and Section 7.03 to the contrary, Tenant shall pay to Landlord together with each monthly installment of Basic Rent, an additional amount sufficient to enable Landlord to
pay, when due, all of the Real Estate Taxes. The determination of the amount so payable and of the fractional part thereof to be deposited with the Landlord each month so that the aggregate of such deposits shall be sufficient for this purpose,
shall be made by the Landlord in its reasonable discretion. Such amounts shall be held by he Landlord in trust and applied to the payment of the Real Estate Taxes. All funds deposited by Tenant with Landlord hereunder shall be deposited in an
interest bearing account and any interest earned on such funds shall accrue for the benefit of Tenant less an administrative fee to the Landlord of one (1%) percent. Interest earned are such funds during any Lease Year or Partial Lease Year (less
the administrative fee) shall be retained by Landlord and shall be applied towards Tenant's monthly installments of Real Estate Taxes for the subsequent Lease Year. If one month prior to the due date of any Real Estate Taxes amounts then on deposit
with Landlord therefor shall be insufficient for the payment of such obligation in full, Tenant within five (5) days after demand, shall deposit the amount of the deficiency with Landlord. Landlord shall not be required to segregate the amounts
deposited with it under this Section 7.01 but may commingle same with any other funds held by it. Upon notice to Tenant, Landlord shall have the right, at any time and from time to time, to elect not to escrow the Real Estate Taxes pursuant to the
provisions of this paragraph, whereupon the provisions of the preceding paragraph of this Section 7.01 shall apply. Notwithstanding any such election to discontinue escrowing the Real Estate Taxes, Landlord shall have the right, at any time and from
time to time, upon giving notice to Tenant to resume escrowing the Real Estate Taxes in accordance with the provisions of this paragraph of Section 7.01. In determining Tenant's montly escrow installment in respect of Real Estate Taxes all
assessments referred to in Section 7.03 shall be payable over the maximum period permitted by law.

Section 7.02. The Tenant shall not be required to pay any estate, inheritance, devolution, succession, transfer, legacy or gift tax charged against the Landlord or the estate or interest of
the Landlord in the Demised Premises or upon the right of any person to succeed to the same or any part thereof by inheritance, succession, transfer or gift, nor any capital stock tax or corporate franchise tax incurred by the Landlord, nor any
income tax upon or against the income of the Landlord (including any rental income derived by the Landlord from the Demised Premises).

Section 7.03. The Tenant shall pay all assessments that may be imposed upon the Real Property by reason of any specific public improvement (including but not limited to assessments for
street openings, grading, paving and sewer installations and improvements). Any such benefit, assessment or installment thereof relating to a fiscal period in which the Term of this Lease begins or ends shall be apportioned.

Section 7.04. The Tenant, in its name or the Landlord's name, shall have the right to contest, or review, by appropriate proceedings, in such
manner as it may deem suitable, at its own expense, and without expense to the Landlord, any tax, assessment, water and sewer rents or charges, or other charges payable by the Tenant pursuant to this Lease. Any refund
resulting from such contest or review shall be assigned to and belong to the Tenant and shall be paid to the Tenant promptly upon its receipt by the Landlord. If the refund relates to a tax year that is apportioned between the Landlord and the
Tenant, the refund shall be apportioned between the Landlord and the Tenant.

Section 7.05. Notwithstanding anything contained herein to the contrary, should Landlord's mortgagee require at any time, the maintenance of an escrow reserve for the tax obligations of
Tenant or for any other obligation of Tenant as in this Lease contained, Tenant shall promptly pay to said escrowee the required amount as the same may be periodically adjusted from time to time.

Section 7.06. As used in this Lease, Real Estate Taxes shall mean the property taxes and assessments imposed upon the Demised Premises, or upon the Rent (Basic and Additional), as such
payable to Landlord, including but not limited to, real estate, city, county, village, school and transit taxes, or taxes, assessments or changes levied, imposed or assessed against the Real Property including the Building, by any other taxing
authority, whether general or specific, ordinary or extraordinary, foreseen or unforeseen. If due to a future change in the method of taxation, any franchise, income or profit tax or other tax shall be levied against Landlord in substitution for, or
in lieu of, or in addition to, any tax which would otherwise constitute a Real Estate Tax, such franchise, income or profit tax or other tax shall be deemed to be a Real Estate Tax for the purPoses hereof.

Section 7.07. Tenant agrees to pay the cost of all utilities, including but not limited to gas and electricity charges for the Demised Premises.

ARTICLE VIII

Insurance

Section 8.01. Tenant's Insurance. (A) Tenant covenants and represents, said representation being specifically designed to induce Landlord to execute this Lease, that during the entire Term
hereof, at its sole cost and expense, Tenant shall obtain, maintain and keep in full force and effect, the following insurance:

(1) "All Risk" property insurance against fire, theft, vandalism, malicious mischief, sprinkler leakage and such additional perils as are now, or hereafter may, be included in a standard
extended coverage endorsement from time to time in general use in the State of New Jersey, upon property of every description and kind owned by Tenant and located in the Demised Premises for which Tenant is legally liable or installed by or on
behalf of Tenant, including by way of example and not by way of limitation, furniture, fixtures, fittings, installations and any other personal property, in an amount equal to the full replacement cost thereof. The Tenant may self-insure as to plate
glass insurance.

(2) Comprehensive General Liability Insurance coverage, to include personal injury, bodily injury, broad form property damage, and contractual liability, naming Landlord and 

Landlord's mortgagee or trust deed holder and ground lessors (if any) as additional insureds in limits of not less than Three Million and 00/100 (S3,000,000.00) Dollars.

(3) Workers' Compensation insurance in form and amount as required by law.

(4) Any other form or forms of insurance or increase in the limits of any of the aforesaid enumerated coverages or other forms of insurance as Landlord or the mortgagees or ground lessors
(if any) of Landlord may reasonably require from time to time if in the reasonable opinion of Landlord or said mortgagees or ground lessors said coverage and/or limits become inadequate and less than that commonly maintained by prudent tenants in
similar buildings in the area by tenants making similar uses.

(B) All property insurance policies shall be taken out with insurers rated AX by Best Rating Service of Oldwick, New Jersey who are licensed to do business in the State of New Jersey and
shall be in form satisfactory from time to time to Landlord. A policy or certificate evidencing such insurance together with a paid bill shall be delivered to Landlord not less than fifteen (15) days prior to the commencement of the Term hereof.
Such insurance policy or certificate will provide an undertaking by the insurers to notify Landlord and the mortgagors or ground lessors (if any) of Landlord in writing not less than thirty (30) days prior to any material change, reduction in
coverage, cancellation, or other termination thereof. Should a certificate of insurance initially be provided, a policy shall be furnished by Tenant within thirty (30) days of the Term's commencement. The aforesaid insurance shall be written with no
deductible.

(C) In the event of damage to or destruction of the Demised Premises entitling Landlord or Tenant to terminate this Lease pursuant to Article XI hereof, and if this Lease is so terminated,
Tenant will immediately pay to Landlord all of its insurance proceeds, if any, relating to the leasehold improvements and alterations (but not Tenant's trade fixtures, equipment, furniture and other personal property of Tenant in the Demised
Premises or those leasehold improvements and alterations to which Landlord has consented and pursuant to which consent are required to be removed by Tenant at the expiration or sooner termination of the Term) which have become Landlord's property on
installation or would have become Landlord's property at the Term's expiration or sooner termination.

(D) Tenant agrees that it will not keep or use or offer for sale (if sales of goods is a permitted use pursuant to this Lease) in or upon the Demised Premises any article which may be
prohibited by any insurance policy in force from time to time covering the Demised Premises. Tenant shall promptly comply with all reasonable requirements of the insurance authority or of any insurer now or hereafter in effect relating to the
Demised Premises.

(E) If any insurance policy carried by Landlord, as provided in Section 8.02 hereof, shall be cancelled or cancellation shall be threatened or the coverage thereunder reduced or threatened
to be reduced in any way by reason of the use or occupation of the Demised Premises or any part thereof by Tenant or any assignee or sublessee of Tenant or anyone permitted by Tenant to be upon the Demised Premises, and if Tenant fails to remedy the
conditions giving rise to said cancellation or threatened cancellation or reduction in coverage on or before (i) forty-eight (48) hours after notice thereof from Landlord, or (ii) prior to said cancellation or reduction becoming effective, Tenant
shall be in default hereunder and Landlord shall have all of the remedies available to Landlord pursuant to this Lease.

Section 8.02. Landlord's Insurance. Landlord covenants and agrees that throughout the Term it will insure the Demised Premises [excluding any property with respect to which Tenant is
obligated to insure pursuant to Subsection 8.01(A)(l) above] against damage by fire and standard extended coverage perils for full replacement value and public liability insurance in such reasonable amounts with such reasonable deductibles as
required by any mortgagee or ground lessor (if any), or if none, as would be carried by a prudent owner of a similar building in the area. In addition, Landlord shall

maintain and keep in force and effect during the Term, rental income insurance insuring Landlord against abatement or loss of Basic Rent, including items of Additional Rent, in case of fire or other casualty similarly
insured against, in an amount at least equal to the Basic Rent and Additional Rent during, at the minimum, one (1) Lease year hereunder. Landlord may, but shall not be obligated to, take out and carry any other forms of insurance as it or the mortgagee or ground lessor (if any) of the Real Property may
reasonably require or reasonably determine available. All insurance carried by Landlord on the Demised Premises shall be reimbursed in full by Tenant, as Additional Rent. Upon written request of Tenant, Landlord shall provide Tenant with copies of
certificates evidencing the insurance maintained by Landlord together with copies of premium invoices with respect to such insurance coverage. Tenant further acknowledges that the exculpatory provisions of this Lease as set forth in Article XX and
the provisions of this Subsection 8.02 as to Tenant's insurance are designed to insure adequate coverage as to Tenant's property and business without regard to fault and to avoid Landlord obtaining similar coverage for said loss for its negligence
or that of its agents, servants or employees which would result in double coverage for the same perils which is payable by Tenant. Landlord will not carry insurance of any kind on Tenant's furniture or furnishings, or on any fixtures, equipment,
appurtenances or improvements of Tenant under this Lease, and Landlord shall not be obligated to repair any damage thereto or replace the same.

Section 8.03. Waiver of Claim/Waiver of Subrogation. Notwithstanding anything contained herein to the contrary, in the event of any loss or damage to the Building, the Premises and/or any
contents, each party waives all claims against the other for any such loss or damage and each party shall look only to any insurance which it has obtained to protect against such loss. Any policy or policies of fire, extended coverage or similar
casualty insurance, which either party obtains in connection with the Demised Premises, shall include a clause or endorsement denying the insurer any rights of subrogation against the other party (i.e. Landlord or Tenant) for all perils covered by
said policy. Should such waiver not be available, then the policy for which the waiver is not available must name the other party as an additional insured affording it the same coverage as that provided the party obtaining said coverage.

Section 8.04. Indemnity. Tenant is and shall be in exclusive control and possession of the Demised Premises as provided herein, and Landlord shall not in any event whatsoever be liable for
any injury or damage to any property or to any person happening on or about the Demised Premises, or for any injury or damage to the Demised Premises, nor to any property of Tenant, or of any other person contained therein.

Tenant shall indemnify and save Landlord harmless against and from all liabilities, claims, suits, fines, penalties, damages, losses, fees, costs and expenses (including reasonable attorneys' fees) which may be imposed
upon, incurred by or asserted against Landlord by reason of:

(1) Any work or thing done by Tenant, its agents or employees in, on or about the Demised Premises or any part thereof;

(2) Any use, occupation, condition, operation by Tenant, its agents or employees of the Demised Premises or any part thereof or of any street, alley, sidewalk, curb, vault, passageway or
space adjacent thereto or any occurrence on any of the same;

(3) Any act or omission on the part of Tenant or any subtenant or any employees, licensees or invitees;

(4) Any accident, injury (including death) or damage, unless caused by Landlord, its agents or employees, to any third party or property owned by someone other than Tenant and not under the
care, custody or control of the Tenant occurring in, on or about the Demised Premises, or any part thereof or in, on or about any street, alley, sidewalk, curb, vault, passageway or space adjacent thereto; and

(5) Any failure on the part of Tenant to perform or comply with any of the covenants, agreements, terms or conditions contained in this Lease.

The provisions of this Section shall survive the expiration or earlier termination thereof.

Notwithstanding anything contained herein to the contrary, Tenant shall have no obligation to indemnify Landlord and its agents from any matter arising out of the negligence or intentional
acts of Landlord or its agents.

Section 8.05. Escrow. In the event any mortgagee, ground lessor or trust deed holder requires an escrow for insurance, taxes or any other reoccurring charges, Tenant shall, on demand from
Landlord, deposit the required escrow as required by any of the aforesaid. Notwithstanding the above, any payment by Tenant in excess of the actual charges for the above shall be refunded to the Tenant.

ARTICLE IX

Repairs

Section 9.01. The Tenant shall keep the Demised Premises, including the sidewalks in front thereof, in good condition and repair, and shall redecorate, paint and renovate the Demised
Premises as may be necessary to keep them in good condition and repair and good appearance. The Tenant shall keep the Demised Premises and all parts thereof in a clean and sanitary condition and free from trash, flammable material and other
objectionable matter. The Tenant shall keep the sidewalks, roadways and landscaped areas forming part of the Demised Premises clean and free of obstructions, snow and ice. Throughout the Term of this Lease, the Tenant, at its sole cost and expense,
will take good care of the Demised Premises and will keep the same in good order and condition and make all necessary repairs and replacements thereto, structural and non-structural, interior and exterior, ordinary and extraordinary, foreseen and
unforeseen.

The Tenant shall replace, at the Tenant's expense, all glass in and on the Demised Premises which may become broken after the date of Tenant's occupancy. When used in this Article, the term
"repairs" shall include all necessary replacements and renewals. All repairs made by Tenant shall be equal in quality and class to the original work. The Tenant shall quit and surrender the Demised Premises at the end of the Term in good order and
repair, reasonable wear and tear excepted and in compliance with the requirements stated herein and in a "broom-clean" condition, and shall, by way of example and not by way of limitation, clean and reseal all exposed concrete floors.

Should the Tenant fail to keep the Demised Premises in good condition and repair, Landlord, after reasonable notice to Tenant (or without notice in the case of an emergency), may, without
being obliged, make the repairs, and Tenant shall pay to Landlord, immediately upon demand, the cost therefor, which shall constitute Additional Rent due hereunder and shall be subject to all remedies by law or otherwise for the collection of Basic
Rent and Additional Rent; however, nothing herein shall be construed to impose a duty on Landlord to mitigate its damages by undertaking any repair which is Tenant's obligation.

Section 9.02. The Tenant shall not make any alterations, additions or improvements to the Demised Premises without the prior written consent of the Landlord, which Landlord shall not
unreasonably withhold or delay. In the event Tenant has not received a response from Landlord to Tenant's request for such alteration, addition or improvement, within ten (10) days of Landlord's receipt of such request, Tenant shall so notify
Landlord of its failure to respond, and should Landlord still not respond to Tenant within five (5) days of receipt of such Tenant's notice, Landlord's consent shall be
deemed granted. All erections, alterations, additions and improvements, whether temporary or permanent in character, which may be made upon or to the Demised

Premises either by the Landlord or the Tenant, except
furniture or movable trade fixtures installed at the expense of the Tenant, shall be the property of the Landlord and shall remain open and be surrendered with the Demised Premises as a part thereof at the expiration or sooner termination of this
Lease, without compensation to the Tenant; or, in the alternative and at the direction of Landlord, Tenant shall remove all or so much of the property therefrom as directed or such property shall be conclusively deemed abandoned and may be removed
by Landlord, and Tenant shall reimburse Landlord for the cost of such removal. Landlord may have any such property stored at Tenant's risk and expense. Landlord shall notify Tenant at the time of its consent, as to whether it will require that
Tenant remove, at the expiration or sooner termination of the Lease Term, any erections, alterations, additions or improvements made by Tenant, and restore the Demised Premises to its preexisting condition and that the Tenant use contractors
approved by Landlord.

Notwithstanding anything contained herein to the contrary, Tenant may, without the need for obtaining Landlord's prior written consent, make alterations, additions and improvements within
the Premises which do not affect the Building Systems (i.e. heating, ventilating, plumbing, electrical or other utilities) or which do not affect any structural portion of the Building, provided said alteration, addition and/or improvement does not
exceed the sum of Forty Thousand and 00/100 ($40,000.00) Dollars in the aggregate in any one (1) Lease year. Tenant shall, however, as to said alterations, additions and/or improvements not requiring Landlord's consent, provide Landlord with
reasonable prior notice of its intention to perform such alterations, together with information as to the nature of said alterations, additions and/or improvements, including but not limited to plans and specifications.

ARTICLE X

Tenant's Additional Obligations

Section 10.01. Notwithstanding anything contained herein to the contrary, during the Lease Term, Tenant agrees to maintain and repair and replace, at its sole cost and expense, if
necessary: (i) the roof; and (ii) the parking lot, sidewalks and curbs. With respect to maintenance and repair of the heating, ventilating and air conditioning ("HVAC") system servicing the Demised Premises, Tenant shall, at its sole cost and
expense, purchase a maintenance and service contract, each Lease Year during the Term. Landlord shall have the right to review and approve (which approval shall not be unreasonably withheld or delayed) said maintenance and service contract and the
contractor. Any items of maintenance and repair to the HVAC system not covered by said maintenance and service contract and/or any required replacement of all or a portion of said HVAC system (as determined by Landlord in its sole but reasonable
judgment) shall be Tenant's responsibility, at its sole cost and expense. Additionally, during the Lease Term, Tenant hereby agrees, at its own cost and expense, to maintain and repair, when necessary, the Building Structure, which, for the purposes
hereof, shall be the footings, foundation, the steel supporting columns, and exterior walls and to maintain, repair and/or replace, at its own cost and expense the electrical transformer servicing the Demised Premises and plumbing supply lines to
the Building. Tenant shall purchase a maintenance and service contract for the roof in accordance with the requirements set forth above as to maintenance and service contract for the HVAC system. Tenant shall promptly deliver to Landlord a copy of
the maintenance and service contracts for the HVAC system and the roof. Landlord shall assign to Tenant all existing warranties and guaranties relating to the Demised Premises and its systems.

ARTICLE XI

Casualty

Section 11.01. If the Demised Premises or the Building is damaged or destroyed by fire, explosion, the elements or otherwise during the Term so as to render the Demised Premises wholly untenantable or unfit for occupancy, or should the Demised Premises be so badly injured that
the same cannot be repaired within one hundred eighty (180) days from the happening of such injury [as determined by Landlord's architect or engineer by notice to

Landlord and Tenant within thirty (30) days of the date of the casualty], then, and in
such case, the Term hereby created shall, at the option of either the Landlord or the Tenant terminate upon the giving of a notice of termination. If a notice of termination is given, the Term of this Lease shall terminate effective as of the date
of such damage or destruction, and the Tenant shall immediately surrender the Demised Premises and all the Tenant's interest therein to the Landlord, and pay Basic Rent and Additional Rent to the time of such damage or destruction, and the Landlord
may re-enter and repossess the Demised Premises discharged from this Lease and may remove all parties therefrom.

Section 11.02. Should the Demised Premises be rendered untenantable and unfit for occupancy, but yet be repairable within one hundred eighty (180) days from the happening of said injury [as
determined by Landlord's architect or engineer within thirty (30) days of the date of the casualty], the Landlord will, provided the mortgagee makes the proceeds of any casualty insurance required to be carried pursuant to this Lease available to
the Landlord to restore and further provided that the insurance proceeds so received are adequate to restore the Building and the Demised Premises, enter and repair the same with reasonable speed, and the Basic Rent and Additional Rent shall not
accrue after said injury or while such repairs are being made, but shall recommence immediately after such repairs shall be completed; provided that Landlord has delivered to Tenant a certificate of occupancy as required by local law. Landlord shall
endeavor to provide Tenant with thirty (30) days prior notice of the estimated date of completion of such repairs.

Section 11.03. If the Demised Premises shall be so slightly injured as not to be rendered untenantable and unfit for occupancy, the Landlord shall repair the same with reasonable promptness
and the Basic Rent and Additional Rent accrued and accruing shall not cease or terminate. The Tenant shall immediately notify the Landlord in case of fire or other damage to the Demised Premises.

Section 11.04. Notwithstanding anything to the contrary in Section 11.01, neither the Landlord nor the Tenant shall have any option to terminate this Lease upon the happening of an injury
referred to in Section 11.01, provided: (i) that the happening of such injury occurs at a time when the unexpired Term of this Lease is two (2) years or more; (ii) further provided that the mortgagee makes the proceeds of any casualty insurance
required to be carried pursuant to this Lease available to Landlord to restore; and (iii) further provided that the insurance proceeds so received are adequate to restore the Building and the Demised Premises. In such event, the Landlord shall
repair the Demised Premises, even to the extent of rebuilding the Building if necessary, subject, however, to the receipt of sufficient insurance proceeds. The Landlord shall promptly enter and repair the Demised Premises with reasonable speed,
making due allowance for conditions beyond the Landlord's control, including but not limited to time lost in adjusting insurance claims and strikes, and the Basic Rent and Additional Rent shall not accrue after such injury and while repairs are
being made, provided Landlord receives the proceeds of rent insurance maintained by the Tenant, but shall recommence immediately after said repairs shall be completed and the Landlord delivers possession thereof to the Tenant. Landlord shall have no
obligation to repair or restore Tenant's improvements.

Notwithstanding anything contained herein to the contrary, in the event Landlord shall commence the restoration of the Demised Premises in accordance with this Section 11.04, and if
Tenant's acts or omissions, or those of its agents, servants, or employees did not cause the casualty, then unless Landlord restores the Demised Premises within one hundred eighty (180) days of the date of the casualty, as said period is extended by
Force Majeure, however in no event beyond two hundred seventy (270) days from the date of the
casualty, Tenant shall have the right to terminate this Lease upon thirty (30) days' prior notice to Landlord of its intent so to do, which notice shall be given no earlier than said one hundred eightieth (180th) day as
extended by Force Majeure, but in no event beyond said two hundred seventieth (270th) day, unless Landlord completes said restoration within the thirty (30) day period similarly extended by Force Majeure but not beyond two hundred seventy (270) days
from the date of the casualty. Notwithstanding the foregoing, if, during said restoration, Landlord's architect or engineer determines that the Premises

will not be restored within one hundred eighty (180) days of the date of the casualty, subject
to Force Majeure [but not beyond two hundred seventy (270) days from the date of the casualty], then Landlord shall so notify Tenant and Tenant shall have the right to terminate this Lease on thirty (30) days' notice to Landlord of its intent to do
so, unless Landlord completes said restoration within said thirty (30) day period, similarly extended for Force Majeure.

ARTICLE XII

Condemnation

Section 12.01. If Tenant's use of the Demised Premises is materially affected due to a taking under any power of eminent domain or condemnation then, at the option of the Tenant, to be
exercised in writing within thirty (30) days of the taking of title thereto, this Lease shall expire within thirty (30) days of the date of such notice and the Basic Rent and any Additional Rent herein reserved shall be apportioned as of that date.
However, if the Tenant does not exercise the aforementioned option, or if the taking does not materially affect the Tenant's use of the Demised Premises, this Lease shall not expire but the Basic Rent and Additional Rent shall be equitably
apportioned. If the Landlord and the Tenant fail to agree upon an equitable apportionment, the Basic Rent and Additional Rent for the Building, after such taking, shall be determined in accordance with the Commercial Rules of the American
Arbitration Association of Somerset, New Jersey, and the arbitrator shall be empowered to assess the costs and expenses of the proceedings as part of the determination. Pending such determination the Tenant shall pay, on account of the Basic Rent
and Additional Rent, such proportion of the Basic Rent and Additional Rent reserved in this Lease as the total area of the Building after the taking bears to the total area of the Building before the taking, subject to adjustment in accordance with
the arbitrator's award. If the Landlord can, after such taking, construct an addition to the remaining Building so as to restore all of the Building area and Building facilities theretofore taken, the Landlord shall, subject to the adequacy of the
condemnation award and to the mortgagee making the same available to the Landlord, promptly construct such addition and restore such facilities so taken and upon the completion of such restoration, the full Basic Rent and Additional Rent reserved by
this Lease shall be reinstated, as of the date of such restoration, and, if the Tenant is able to occupy and use the Building, the proportionate Basic Rent and Additional Rent shall be paid by the Tenant as herein provided, during the period between
the taking and the restoration of the Building and facilities. No part of any award shall belong to the Tenant except that nothing contained herein is intended to affect or limit the Tenant's separate claim for fixtures or other improvements owned
by Tenant provided the same does not diminish the Landlord's award. It is expressly understood and agreed that the provisions of this Article XII shall not be applicable to any condemnation or taking for governmental occupancy for a limited period
of time, and this Lease shall be and remain unaffected by such condemnation or taking and the Tenant shall continue to be responsible for all of its obligations hereunder and Tenant shall continue to pay the Basic Rent and Additional Rent as
provided in the Lease, provided in the event of any such condemnation or taking Tenant shall be entitled to appear, claim, prove and receive any award; but if the period of temporary use or occupancy extends beyond the expiration date, Landlord
shall be entitled to appear, claim, prove and receive the entire award as represents the costs of restoration to the Demised Premises and the portion of any such award allocable to the period following the expiration date. To the extent Landlord
receives any award for loss of Tenant's rental or for the temporary use and occupancy of the Demised Premises attributable to any portion of the Term hereof, Landlord agrees to credit same against the Basic Rent and Additional Rent and otherwise payable by Tenant hereunder. For purposes of this Section 12.01, a
"limited period of time" shall be deemed to mean six (6) months or less.

Section 12.02. Tenant agrees to execute and deliver any instruments, at the expense of Landlord, as may be reasonably necessary or required to expedite any condemnation proceeding or to
effectuate a proper transfer of title to such governmental or other public authority, agency, body or public utility seeking to take or acquire the Demised Premises or any portion thereof. The Tenant covenants and agrees to vacate the Demised
Premises

in the event the Lease is terminated as a result of condemnation and to remove all of Tenant's personal property therefrom in accordance with the terms of this Lease and deliver up peaceably possession thereof to the Landlord or to such
other party designated by Landlord by written notice in the condition provided for in the Lease. In the event that the Lease is terminated all obligations of the parties (except those obligations accruing prior to the termination date and those
which by the terms of this Lease survive termination) shall cease as of such taking. Landlord and Tenant each agree to provide prompt notice to the other of any taking or proposed taking of the Demised Premises or any part thereof.

ARTICLE XIII

Compliance With Laws, Etc.

Section 13.01. The Tenant shall not do or permit anything to be done in the Demised Premises which shall constitute a public nuisance or which will conflict with the regulations of the Fire
Department or with any insurance policy upon said improvements or any part thereof.

Section 13.02. The Tenant shall, at its own expense, obtain all necessary environmental and operating permits and comply with all requirements of law and with all ordinance or orders, rules
and regulations of any state, municipal or other public authority affecting the Demised Premises and with all requirements of the Fire Insurance Exchange or similar body, and of any liability insurance company insuring the Landlord against liability
for accidents in or connected with the Demised Premises including, but not limited to laws, ordinance, orders, rules and regulations which apply to the interior or exterior of the Demised Premises, the structural or nonstructural parts thereof, and
to make all improvements and repairs required by such laws, ordinances, orders, rules and regulations, ordinary or extraordinary, foreseen or unforeseen.

Section 13.03. (A) Tenant acknowledges the existence of environmental laws, rules and regulations, including but not limited to the provisions of IRA, as hereinafter defined. Tenant shall
comply with any and all such laws, rules and regulations.

(B) Tenant hereby agrees to execute such documents as Landlord reasonably deems necessary and to make such applications as Landlord reasonably requires to assure compliance with IRA. Tenant
shall bear all costs and expenses incurred by Landlord associated with any required ISRA compliance resulting from Tenant's use of the Demised Premises including but not limited to state agency fees, engineering fees, clean-up costs, filing fees and
suretyship expenses. As used in this Lease, IRA compliance shall include applications for determinations of nonapplicability by the appropriate governmental authority. The foregoing undertaking shall survive the termination or sooner expiration of
the Lease and surrender of the Demised Premises and shall also survive sale, or lease or assignment of the Demised Premises by Landlord. Tenant agrees to indemnify and hold Landlord harmless from any violation of IRA occasioned by Tenant's use of
the Demised Premises. The Tenant shall immediately provide the Landlord with copies of all correspondence, reports, notices, orders, findings, declarations and other materials pertinent to the Tenant's compliance and the requirements of the New
Jersey Department of Environmental Protection and Energy ("NJDEPE") under IRA as they are issued or received by the Tenant

(C) As used herein, Hazardous Substances shall be defined as any "hazardous chemical", "hazardous substance" or similar term as defined in the Comprehensive Environmental Responsibility
Compensation and Liability Act, as amended (42 U.S.C. 9601, et seq.), the New Jersey Environmental Cleanup Act, as amended, N.J.S.A. 13:lK-6 ET SEQ. and/or the Industrial Site Recovery Act ("ISRA"), the New Jersey Spill Compensation and Control Act,
as amended, N.J.S.A. 58:10-23.11b, ET SEA., any rules or regulations promulgated thereunder, or in any other applicable federal, state or local law, rule or regulation dealing with environmental protection. It is understood and agreed that the
provisions contained in this Section shall be applicable notwithstanding the fact that any substance shall not be deemed to be a Hazardous Substance at the time of its use by the Tenant but shall thereafter

be deemed to be a Hazardous Substance.

(D) In the event Tenant fails to comply with ISRA as stated in this Section or any other governmental law as of the termination or sooner expiration of the Lease and as a consequence
thereof Landlord is unable to rent the Demised Premises, then the Landlord shall treat the Tenant as one who has not removed at the end of its Term, and thereupon be entitled to all remedies against the Tenant provided by law in that situation
including a monthly rental of two hundred (200%) percent of the Monthly Basic Rent for the last month of the Term of this Lease or any renewal term, payable in advance on the first day of each month, until such time as Tenant provides Landlord with
a negative declaration or confirmation that any required clean-up plan has been successfully completed.

(E) Tenant agrees that Tenant, its agents and contractors, licensees, or invitees shall not handle, use, manufacture, store or dispose of any Hazardous Substances, as hereinafter defined,
on, under, or about the Demised Premises, without Landlord's prior written consent (which consent shall not be unreasonably withheld as long as Tenant demonstrates and documents to Landlord's reasonable satisfaction (i) that such Hazardous
Substances (a) are necessary or useful to Tenant's business; and (b) will be used, kept, and stored in compliance with all laws relating to any Hazardous Substances so brought or used or kept in or about the Demised Premises; and (ii) that Tenant
will give all required notices concerning the presence in or on the Demised Premises or the release of such Hazardous Substances from the Demised Premises) provided that Tenant may handle, store, use or dispose of products containing small
quantities of Hazardous Substances, which products are of a type customarily found in office and households (such as aerosol cans containing insecticides, toner for copies, paints, paint remover, and the like), provided further that Tenant shall
handle, store, use and dispose of any such Hazardous Substances in a safe and lawful manner and shall not allow such Hazardous Substances to contaminate the Demised Premises or the environment.

(F) Tenant further agrees that Tenant will not permit any substance suspected of causing cancer or reproductive toxicity to come into contact with groundwater under the Demised Premises.
Any such substance coming into contact with groundwater shall be considered a Hazardous Substance for purposes of this Section.

(G) (i) Notwithstanding the provisions of Section 13.03(E), Tenant may handle, store, and use Hazardous Substances, limited to the types, amounts, and use identified in the Hazardous
Substances Exhibit attached hereto. If no Hazardous Substances Exhibit is attached to this Lease, then this Section 13.03(G) shall be of no force and effect. Tenant hereby certifies to Landlord that the information provided by Tenant pursuant to
this Section is true, correct, and complete. Tenant covenants to comply with the use restrictions shown on the attached Hazardous Substances Exhibit. Tenant's business and operations, and more especially its handling, storage, use and disposal of
Hazardous Substances shall at all times comply with all applicable laws pertaining to Hazardous Substances. Tenant shall secure and abide by all permits necessary for Tenant's operations on the Demised Premises. Tenant shall give or post all notices
required by all applicable laws pertaining to Hazardous Substances. If Tenant shall at any time fail to comply with this Section, Tenant shall immediately notify Landlord in writing of such noncompliance.

(ii) Tenant shall provide Landlord with copies of all Material Safety Data Sheets (as required by the Occupational Safety and Health Act) relating to any Hazardous Substances to be used,
kept, or stored at or on the Demised Premises, at least thirty (30) days prior to the first use, placement, or storage of such Hazardous Substance on the Demised Premises. Landlord shall have ten (10) days following delivery of such Material Safety
Data Sheets to approve or forbid, in its sole discretion subject to the limitation contained in Section 13.03(E) above, such use, placement, or storage of a Hazardous Substance on the Demised Premises.

(iii) Tenant shall not store hazardous wastes on the Demised Premises for more than ninety (90) days; "hazardous waste" has the meaning given it by the Resource Conservation and Recovery
Act of 1976, as

amended. Tenant shall not install any underground or aboveground storage tanks on the Demised Premises. Tenant shall not dispose of any Hazardous Substance or solid waste on the Demised Premises. In performing any alterations of the
Demised Premises permitted by the Lease, Tenant shall not install any Hazardous Substance in the Demised Premises without the specific consent of Landlord attached as an Exhibit to this Section.

(iv) Any increase in the premium for necessary insurance on the Demised Premises which arises from Tenant's use and/or storage of Hazardous Substances shall be solely at Tenant's expense.
Tenant shall procure and maintain at its sole expense such additional insurance as may be necessary to comply with any requirement of any federal, state or local governmental agency with jurisdiction.

(H) If Landlord, in its sole discretion, believes that the Demised Premises or the environment have become contaminated with Hazardous Substances that must be removed under the laws of the
State where the Demised Premises are located, in breach of the provisions of this Lease, Landlord, in addition to its other rights under this Lease, may enter upon the Demised Premises and obtain samples from the Demised Premises, including without
limitation, the soil and groundwater under the Demised Premises, for the purposes of analyzing the same to determine whether and to what extent the Demised Premises or the environment have become so contaminated. Tenant shall reimburse Landlord for
the costs of any inspection, sampling and analysis that discloses contamination for which Tenant is liable under the terms of this Section. Tenant may not perform any sampling, testing, or drilling to locate any Hazardous Substances on the Demised
Premises without Landlord's prior written consent.

(I) Without limiting the above, Tenant shall reimburse, defend, indemnify and hold Landlord harmless from and against any and all claims, losses, liabilities, damages, costs and expenses,
including without limitation, loss of rental income, loss due to business interruption, and attorneys' fees and costs, arising out of or in any way connected with the use, manufacture, storage, or disposal of Hazardous Substances by Tenant, its
agents or contractors on, under or about the Demised Premises, including, without limitation, the costs of any required or necessary investigation, repair, clean-up or detoxification and the preparation of any closure or other required plans in
connection herewith, whether voluntary or compelled by governmental authority. The indemnity obligations of Tenant under this clause shall survive any termination of the Lease. At Landlord's option, Tenant shall perform any required or necessary
investigation, repair, clean-up, or detoxification of the Demised Premises required under any applicable federal or state statute or regulation. In such case, Landlord shall have the right, in its sole discretion, to approve all plans, consultants,
and clean-up standards. Tenant shall provide Landlord on a timely basis with (i) copies of all documents, reports, and communications with governmental authorities; and (ii) notice and an opportunity to attend all meetings with regulatory
authorities. Tenant shall comply with all notice requirements and Landlord and Tenant agree to cooperate with governmental authorities seeking access to the Demised Premises for purposes of sampling or inspection. No disturbance of Tenant's use of the Demised Premises resulting from activities conducted pursuant to this
Section shall constitute an actual or constructive eviction of Tenant from the Demised Premises. In the event that such clean-up extends beyond the termination of the Lease, Tenant's obligation to pay Basic Rent (including Additional Rent) shall
continue until such clean-up is completed and any certificate of clearance or similar document has been delivered to Landlord. Basic Rent during such holdover period shall be at market rent; if the parties are unable to agree upon the amount of such
market rent, then Landlord shall have the option of (a) increasing the Basic Rent for the period of such holdover based upon the increase in the cost of living (as determined by the Consumer Price Index for the New York Metropolitan Area) from the
third (3rd) month preceding the commencement date to the third (3rd) month preceding the start of the holdover period, using such indices and assumptions and calculations as Landlord in its sole reasonable judgment shall determine are necessary; or
(b) having Landlord and Tenant each appoint a qualified MAI appraiser doing business in the same area; in turn, these two independent MAI appraiser shall appoint a third MAI appraiser and the majority shall decide upon the fair market rental for
Demised Premises as of the expiration of the then current Term. Landlord and Tenant

shall equally share in the expense of the appraisal except that in the event the Basic Rent is found to be within fifteen (15%) percent of the original rate quoted
by Landlord, then Tenant shall bear the full cost of all the appraisal process. In no event shall the Basic Rent be subject to determination or modification by any person, entity, court, or authority other than as set forth expressly herein, and in
no event shall the rent for any holdover period be less than the Basic Rent due in the preceding period.

(J) Notwithstanding anything set forth in the Lease, Tenant shall only be responsible for contamination of Hazardous Substances or any clean-up resulting directly therefrom, resulting
directly or indirectly from matters occurring or Hazardous Substances deposited (other than by contractors, agents or representatives controlled by Landlord) during the Lease Term, and any other period of time during which Tenant is in actual or
constructive occupancy of the Demised Premises. Tenant shall take reasonable precautions to prevent the contamination of the Demised Premises with Hazardous Substances by third parties.

(K) It shall not be unreasonable for Landlord to withhold its consent to any proposed assignment or sublease if (i) the proposed assignee's or sublessee's anticipated use of the Demised
Premises involves the generation, storage, use, treatment or disposal of Hazardous Substances; (ii) the proposed assignee or sublessee has been required by any prior landlord, lender or governmental authority to take remedial action in connection
with Hazardous Substances contaminating the property if the contamination resulted from such assignee's or sublessee's actions or use of the property in question; or (iii) the proposed assignee or sublessee is subject to an enforcement order issued
by any governmental authority in connection with the use, disposal, or storage of a Hazardous Substance.

(L) Any of Tenant's insurance insuring against claims of the type dealt with in this Section shall be considered primary coverage for claims against the Demised Premises arising out of or
under this Section.

(M) In the event (i) any transfer of Tenant's interest under this Lease; or (ii) the termination of this Lease, by lapse of time or otherwise, Tenant shall be solely responsible for
compliance with any and all then effective Federal, state or local laws concerning (a) the physical condition of the Demised Premises, Building, or Building Area; or (b) the presence of hazardous or toxic materials in or on the Demised Premises,
Building, or Building Area (for example, the New Jersey Environmental Cleanup Responsibility Act, or similar applicable state laws), including, but not limited to, any reporting or filing requirements imposed by such laws. Tenant's duty to pay Basic
Rent and Additional Rent shall continue until the obligations imposed by such laws are satisfied in full and any certificate of clearance or similar document has been delivered to Landlord. The Basic Rent and Additional Rent required to be paid by Tenant in accordance with this Subsection 13.03(M) during that period beyond the termination or sooner expiration of this Lease shall be as described in Subsection 13.03(D).

(N) All consents given by Landlord pursuant to this Section shall be in writing and shall be considered amendments to this Lease.

(O) Landlord represents to Tenant that (i) it has received no notice of a violation of any environmental law, rule or regulation including, but not limited to, ISRA with respect to the
Demised Premises; and (ii) to its actual knowledge, it is not aware of any violation of such laws, rules or regulations with respect to the Demised Premises.

Section 13.04. Notwithstanding anything contained herein to the contrary, Tenant shall have no responsibility for any cost or expense for any Hazardous Substance or environmental condition
determined to have been in existence prior to its initial occupancy of the Demised Premises.

ARTICLE XIV

Subordination

Section 14.01. This Lease is and shall be subject and subordinate to all present and future first mortgages or first deeds of trust affecting the Demised Premises. The Tenant shall execute,
any instrument which may be deemed necessary or desirable by the Landlord to further effect or to evidence the subordination of this Lease to any such first mortgage or first deed of trust. The Landlord may assign this Lease to any such first
mortgagee or first trust deed holder in connection with any such lien superior to this Lease, and the Tenant shall execute, at no expense to the Tenant, any instrument which may be necessary or desirable by the Landlord or the holder of said lien in
connection with said assignment. Any expense incurred in the preparing, executing or recording of such assignment to any such holder shall be without expense or cost to the Tenant. The Tenant further agrees, within ten (10) days of Landlord's
written request, to certify by written instrument duly executed and acknowledged to any first mortgagee, first trust deed holder or purchaser, or any proposed first mortgage lender, first trust deed holder or purchaser, that this Lease is in full
force and effect, or if not, in what respect it is not, that this Lease has not been modified, or the extent to which it has been modified, that there are no existing defaults hereunder to the best of the knowledge of the party so certifying, or
specifying the defaults, if any, and any other information which Landlord shall reasonably require. Any such certification shall be without prejudice as between the Landlord and the Tenant, it being agreed that any document required hereunder shall
not be used in any litigation between the Landlord and the Tenant. Landlord agrees to use its best efforts to obtain, on behalf of Tenant, a non-disturbance, subordination and attornment agreement from the present mortgagee; however, this Lease is
not conditioned upon the same being granted, and any charges assessed by the holders of such mortgages in connection with the obtaining of the aforesaid non-disturbance agreement shall be paid by Tenant.

Landlord agrees to obtain a non-disturbance agreement from the holder of any future mortgage on the property, on behalf of Tenant and in connection therewith, Tenant agrees to attorn to said mortgagee and any purchaser
following foreclosure. Any charges assessed by the holders of said mortgage in connection with the obtaining of the aforesaid non-disturbance agreement shall be paid by Tenant.

Notwithstanding anything contained herein to the contrary, in no event will Tenant be required to pay more than Two Thousand and 00/100 ($2,000.00) Dollars in the aggregate for any charges assessed by the holders of
the aforesaid mortgages in connection with obtaining the aforesaid non-disturbance agreements.

ARTICLE XV

Defaults, Remedies

Section 15.01. If, during the Term any one or more of the following acts or occurrences (any one of such occurrences or acts being hereinafter called an Event of Default) shall happen:

(A) The Tenant shall default in making any payment of Basic Rent or any Additional Rent as and when the same shall become due and payable, and such default shall continue for a period of
ten (10) days after notice from the Landlord that such payment is due and unpaid; or

(B) The Tenant shall default in the performance of or compliance with any of the other covenants, agreements, terms or conditions of this Lease to be performed by the Tenant (other than any
default curable by payment of money), and such default shall continue for a period of thirty (30) days after written notice thereof from the Landlord to the Tenant, or, in the case of a default which cannot with due diligence be cured within thirty
(30) days, the Tenant shall fail to proceed promptly (except for unavoidable delays) after the giving of such notice and with all due diligence to cure such default and thereafter to prosecute the curing hereof with all due diligence (it being
intended that as to a default not susceptible of being cured with due diligence within thirty (30) days, the time within which such default may be cured shall be extended for such period as may be reasonably necessary to permit the same

to be cured with all due diligence); or

(C) The Tenant or any guarantor of this Lease shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition or answer seeking any
reorganization, composition, readjustment or similar relief under any present or future bankruptcy or other applicable law, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of the Tenant or any
guarantor of this Lease or of all or any substantial part of its properties or of all or any part of the Demised Premises; or

(D) If, within sixty (60) days after the filing of an involuntary petition in bankruptcy against the Tenant or any guarantor of this Lease, or the commencement of any proceeding against the
Tenant or such guarantor seeking any reorganization, composition, readjustment or similar relief under any law, such proceeding shall not have been dismissed, or if, within sixty (60) days after the appointment, without the consent or acquiescence
of the Tenant or such guarantor, of any trustee, receiver or liquidator of the Tenant or such guarantor, or of all or any part of the Demised Premises, such appointment shall not have been vacated or stayed on appeal or otherwise, or if, within
sixty (60) days after the expiration of any such stay, such appointment shall have been vacated, or if, within sixty (60) days after the taking possession, without the consent or acquiescence of the Tenant or such guarantor, of the property of the
Tenant, or of such guarantor by any governmental office or agency pursuant to statutory authority for the dissolution or liquidation of the Tenant or such guarantor, such taking shall not have been vacated or stayed on appeal or otherwise; or

(E) If the Demised Premises shall be abandoned by the Tenant for a period of thirty (30) consecutive days.

then, and in any such event, and during the continuance thereof, the Landlord may, at its option, then or thereafter while any such Event of Default shall continue and notwithstanding the fact that the Landlord may have
any other remedy hereunder or at law or in equity, by notice to the Tenant, designate a date, not less than ten (10) days after the giving of such notice, on which this Lease shall terminate; and thereupon, on such date the Term of this Lease and
the estate hereby granted shall expire and terminate upon the date specified in such notice with the same force and effect as if the date specified in such notice was the date hereinbefore fixed for the expiration of the Term of this Lease, and all rights of the Tenant hereunder shall expire and terminate, but the Tenant shall remain liable as hereinafter provided. The parties agree that either party who brings an action to enforce
any obligation of the other party under this Lease shall, if successful, be entitled to recover from said unsuccessful party all reasonable attorneys' fees and other reasonable expenses incurred in enforcing said obligation against the unsuccessful
party, this to survive the expiration or sooner termination of this Lease.

Section 15.02. If this Lease is terminated as provided in Section 15.01, or as permitted by law, the Tenant shall peaceably quit and surrender the Demised Premises to the Landlord, and the
Landlord may, without further notice, enter upon, re-enter, possess and repossess the same by summary proceedings, ejectment or other legal proceedings, and again have, repossess and enjoy the same as if this Lease had not been made, and in any such
event neither the Tenant nor any person claiming through or under the Tenant by virtue of any law or an order of any court shall be entitled to possession or to remain in possession of the Demised Premises, and the Landlord, at its option, shall
forthwith, notwithstanding any other provision of this Lease, be entitled to recover from the Tenant in lieu of all other claims for damages on account of such termination as and for liquidated damages an amount equal to the excess of all Term Basic
Rent and Additional Rent reserved hereunder for the unexpired portion of the Term of this Lease discounted at the rate of six (6%) percent per annum to the then present worth, over the fair rental value of the Demised Premises at the time of
termination for such unexpired portion of the Term (the rent received on a reletting shall be conclusively accepted as the fair rental value). Nothing herein contained shall limit or prejudice the right of the Landlord, in any bankruptcy or
reorganization or insolvency proceeding, to prove for and obtain as liquidated damages by reason of such

termination an amount equal to the maximum allowed by any bankruptcy or reorganization or insolvency proceedings, or to prove for and obtain as
liquidated damages by reason of such termination, an amount equal to the maximum allowed by any statute or rule of law whether such amount shall be greater or less than the excess referred to above.

Section 15.03. If the Landlord re-enters and obtains possession of the Demised Premises, as provided in Section 15.02 of this Lease, following an Event of Default, the Landlord shall have
the right, without notice, to repair or alter the Demised Premises in such a manner as the Landlord may deem necessary or advisable so as to put the Demised Premises in good order and to make the same rentable, and shall have the right, at the
Landlord's option, to relet the Demised Premises or a part thereof, and the Tenant shall pay to the Landlord on demand all reasonable expenses incurred by the Landlord in obtaining possession, and in altering, repairing and putting the Demised
Premises in good order and condition and in reletting the same, including reasonable fees of attorneys and architects, and all other reasonable expenses or commissions, and the Tenant shall pay to the Landlord upon the rent payment dates following
the date of such re-entry and including the date for the expiration of the Term of this Lease in effect immediately prior to such re-entry, the sums of money which would have been payable by the Tenant as Monthly Basic Rent and Additional Rent
hereunder on such rent payment dates if the Landlord had not re-entered and resumed possession of the Demised Premises, deducting only the net amount of rent (basic and additional), if any, which the Landlord shall actually receive (after deducting
from the gross receipts the expenses, costs and payments of the Landlord which in accordance with the terms of this Lease would have been borne by the Tenant) in the meantime from and by any reletting of the Demised Premises, and the Tenant shall
remain liable for all sums otherwise payable by the Tenant under this Lease, including but not limited to the expense of the Landlord aforesaid, as well as for any deficiency aforesaid, and the Landlord shall have the right from time to time to
begin and maintain successive actions or other legal proceedings against the Tenant for the recovery of such deficiency, expenses or damages or for a sum equal to any Monthly Basic Rent payment and Additional Rent. As an alternative remedy, the
Landlord shall be entitled to damages against the Tenant for breach of this Lease, at any time (whether or not the Landlord shall have become entitled to or shall have received any damages as hereinabove provided) in an amount equal to the excess, if any, of the Term Basic Rent and Additional Rent which would be payable under this Lease at the date of the expiration of the Term, less the amount of Term Basic Rent and Additional Rent received by the
Landlord upon any reletting, both discounted to present worth at the rate of six (6%) percent per annum, semi-annually. The obligation and liability of the Tenant to pay the Term Basic Rent and the Additional Rent shall survive the commencement,
prosecution and termination of any action to secure possession of the Demised Premises. Nothing herein contained shall be deemed to require the Landlord to wait to begin such action or other legal proceedings until the date when this Lease would
have expired had there not been an Event of Default.

Section 15.04. The Tenant hereby waives all right of redemption to which the Tenant or any person under it may be entitled by any law nor or hereafter in force. Notwithstanding anything
herein contained, Landlord agrees to use reasonable efforts to relet the Demised Premises in order to mitigate its damages, but nothing herein shall limit the Landlord's right, in its sole discretion, to approve any tenant and to determine the terms
and conditions of any lease, including but not limited to rent and length of term. The Landlord's remedies hereunder are in addition to any remedy allowed by law.

Section 15.05. In the event of any breach or threatened breach by Tenant of any of the agreements, terms, covenants or conditions contained in this Lease, Landlord shall be entitled to
enjoin such breach or threatened breach and shall have the right to invoke any right or remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary dispossess proceedings, and other remedies were not provided for in
this Lease. During the pendency of any proceedings brought by Landlord to recover possession by reason of default, Tenant shall continue all money payments required to be made to Landlord, and Landlord may accept such payments for use and occupancy
of the Demised Premises. In such event, Tenant waives its right in such proceedings to claim as a defense that the receipt of such money payments by Landlord constitutes a waiver by landlord of such default.

ARTICLE XVI

Assignment and Sublease

Section 16.01. The Tenant may not mortgage, pledge, hypothecate, assign, transfer, sublet or otherwise deal with this Lease or of the Demised Premises in any manner except as specifically
provided for in this Article XVI.

Section 16.02. In the event that Tenant desires to sublease the whole or any portion of the Demised Premiss or assign the within Lease to any other party, Tenant shall give Landlord written
notice of such desire and furnish Landlord with an exact copy of the proposed assignment or sublease not less than thirty (30) days prior to the effective date on which Tenant desires to make such assignment or sublease and the identity of the
subtenant or assignee. The Tenant shall not submit, nor shall Landlord accept, any assignment or sublease for review which has a proposed rent less than the current market value. The Landlord shall require a Five Hundred and 00/100 ($500.00)
Dollar payment to cover its handling charges for each request for consent to any sublet or assignment prior to its consideration of the same.

Section 16.03. The Landlord shall have a period of thirty (30) days following receipt of the aforementioned notice within which to notify the Tenant in writing that Landlord elects either:

(A) to terminate this Lease as to the space so affected as of the date so specified by the Tenant as above (with the same effect as if such date was the date fixed herein for the expiration
of the Term) in which event Tenant will be relieved of all further obligation hereunder as to such space; or

(B) to, upon the execution of the proposed sublease or assignment to the proposed subtenant or assignee, assume the proposed assignment or sublease so that such prospective sublessee or assignee shall then become the tenant of the Landlord hereunder; or

(C) to permit the Tenant to assign or sublet such space, subject, however, to the Tenant remaining liable for the observance of all of the covenants and provisions of this Lease, including,
but not limited to the payment of Term Basic Rent reserved herein, through the entire Term of this Lease. If the rental rate agreed between Tenant and assignee or sublessee is greater than the Term Basic Rent and Additional Rent that Tenant must pay
Landlord (computed on the basis of an average square foot rent for the Demised Premises), then all of such excess rental shall be shared equally by Landlord and Tenant; or

(D) to reasonably refuse to consent to Tenant's assignment or sublet and to continue this Lease in full force and effect. The Landlord's refusal to consent shall not be deemed unreasonable
if, by way of example and not by way of limitation, the proposed assignment or sublet is to any governmental or quasi-governmental agency or to anyone whose use would impose abnormal or excessive wear and tear on the Demised Premises.

If Landlord should fail to notify Tenant in writing of such election within said thirty (30) day period, Landlord shall be deemed to have elected option (C) above. No future assignment or subletting shall be made except
upon compliance with this Section. Any attempted assignment or sublease by Tenant in violation of this Section shall be void. This absolute prohibition against assigning or subletting except in compliance with this Section shall include those by
operation of law or statute.

Section 16.04. In any event, except as otherwise provided in Section 16.03, the acceptance by the Landlord of any Basic Rent or Additional Rent from the assignee or from any of the
subtenants or the failure of the Tenant to insist upon a strict performance of any of the terms, conditions and covenants herein shall not release the Tenant herein, nor any assignee assuming this Lease, from any and all of the obligations herein
during and for the entire Term of this Lease.

Section 16.05. Notwithstanding anything contained herein to the contrary, any sublet or assignment to an Affiliated Company or to any entity into which Tenant has been merged or which is
wholly owned by Tenant, or by which Tenant is wholly owned in connection with a joint venture entered into by Tenant shall not be subject to the provisions of Sections 16.01, 16.02, and 16.03(A), (B) and (D). As used herein, Affiliated Company shall
mean any corporation related to such party as a parent, subsidiary or brother-sister corporation so that such corporation and such party or such corporation and such party and other corporations constitute a controlled group as determined under
Section 1563 of the Internal Revenue Code of 1986, as amended and as elaborated by the Treasury Regulations promulgated thereunder.

In the event that any or all of Tenant's interest in the Demised Premises and/or this Lease is transferred by operation of law to any trustee, receiver, or other representative or agent of Tenant, or to Tenant as a
debtor in possession, and subsequently any and all of Tenant's interest in the Demised Premises and/or this Lease is offered or to be offered by Tenant or any trustee, receiver, or other representative or agent of Tenant as to its estate or property
(such person, firm or entity being hereinafter referred to as the "Grantor"), for assignment, conveyance, lease, or other disposition to a person, firm or entity other than Landlord (each such transaction being hereinafter referred to as a
"Disposition"), it is agreed that Landlord has and shall have a right of first refusal to purchase, take, or otherwise acquire, the same upon the same terms and conditions as the Grantor thereof shall accept upon such Disposition to such other
person, firm, or entity; and as to each such Disposition the Grantor shall give written notice to Landlord in reasonable detail of all of the terms and conditions of such Disposition within twenty (20) days next following its determination to accept
the same but prior to accepting the same, and Grantor shall not make the Disposition until and unless Landlord has failed or refused to accept such right of first refusal as to the Disposition, as set forth herein.

Landlord shall have sixty (60) days next following its receipt of the written notice as to such Disposition in which to exercise the option to acquire Tenant's interest by such Disposition, and the exercise of the
option by Landlord shall be effected by notice to that effect sent to the Grantor; but nothing herein shall require Landlord to accept a particular Disposition or any Disposition, nor does the rejection of any one such offer of first refusal
constitute a waiver or release of the obligation of the Grantor to submit other offers hereunder to Landlord. In the event Landlord accepts such offer of first refusal, the transaction shall be consummated pursuant to the terms and conditions of the
Disposition described in the notice to Landlord. In the event Landlord rejects such offer of first refusal, Grantor may consummate the Disposition with such other person, firm, or entity; but any decrease in price of more than two (2%) percent of
the price sought from Landlord or any change in the terms of payment for such Disposition shall constitute a new transaction requiring a further option of first refusal to be given to Landlord hereunder. Without limiting any of the provisions of
Article XV, if pursuant to the Federal Bankruptcy Code (herein the "Code"), or any similar law hereafter enacted having the same general purpose, Landlord declines the right provided it in the preceding paragraph and Tenant is permitted to assign
this Lease notwithstanding the restrictions contained in this Lease, adequate assurance of future performance by an assignee expressly permitted under such Code shall be deemed to mean the deposit of cash security in an amount equal to one (1)
year's Annual Basic Rent and Additional Rent for the next succeeding twelve (12) months (which Additional Rent shall be reasonably estimated by Landlord), which deposit shall be held by Landlord for the balance of the Lease Term, without interest,
as security for the full performance of all of Tenant's obligations under this Lease, to be held and applied in the same manner specified for security in Section 23.02.

Except as specifically set forth above, no portion of the Demised Premises or of Tenant's interest in this Lease may be acquired by any other person or entity, whether by assignment, mortgage, sublease, transfer,
operation of law or act of the Tenant, nor shall Tenant pledge its interest in this Lease or in any security deposit required hereunder.

Section 16.06. If Tenant is a corporation and if at any time

during the Lease Term the persons owning a majority of its "voting stock" at the time of the execution of this Lease should
cease to own a majority of such voting stock (except as the result of transfers by bequest or inheritance), Tenant covenants to notify Landlord of any such transfer and such transfer shall be deemed an assignment of this Lease. In the event of such
transfer, Landlord may either (a) not unreasonably withhold its consent thereto or (b) terminate this Lease by notice to Tenant to be effective ninety (90) days after service. This Section shall not apply whenever Tenant is a corporation, the
outstanding stock of which is listed on a recognized stock exchange. For the purposes of this Section 16.06, stock ownership shall be determined in accordance with the principles set forth in Section 544 of the Internal Revenue Code of 1986, as
amended, to and including the date of this Lease, and the term "voting stock" shall refer to shares of stock regularly entitled to vote for the election of directors of the corporation.

Section 16.07. Tenant shall have no claim, and hereby waives the right to any claim, against Landlord for money damages by reason of any refusal, withholding or delaying by Landlord of any
consent, and in such event, Tenant's only remedies therefor shall be an action for specific performance, injunction or declaratory judgment to enforce any such requirement. Landlord acknowledges that Tenant may commence such action by means of an
order to show cause before the Superior Court of New Jersey, in which event Landlord acknowledges Tenant's rights to an expedited proceeding and to notify Landlord of the institution of the Order to Show Cause by telephone means. Landlord and Tenant
further agree that the determination of such Court shall be conclusive and non-appealable.

ARTICLE XVII

Notices

Section 17.01. All notices, demands, consents, approvals, requests and instruments or documents by this Lease required or permitted to be given to or served upon the Landlord or the Tenant
shall be in writing. Any such notice, demand, consent, approval, request, instrument or document shall be sufficiently given or served if sent by certified or registered mail, postage prepaid, addressed at the address set forth below, or at such
other address as it shall designate by notice, as follows:

If to the Landlord:

		
	 		
HOLLAND REALTY CORPORATION c/o LPC Commercial
	 		
Services, Inc.
	 	1530 Wilson Boulevard
	 	Arlington, VA 22209
	 		 
	
With Copy to:	
VIB MANAGEMENT, INC.
	 		
712 Fifth Avenue
	 		
New York, NY 10019
	 		
Attn: Donald M. Kurdziel
	 		
Vice President
	 		 
	 		
SPITZER & FELDMAN P.C.
	 		
405 Park Avenue
	 		
New York, NY 10022
	 		
Attn: M. James Spitzer, Jr., Esq.
	 		 
	
If to the Tenant:	 	
	 		 
	 		
ENZON, INC.
	 	20 Kingsbridge Road
	 	Piscataway, NJ 08854

Any notice so sent shall be deemed given or served on the second (2nd) business day following the date mailed as aforesaid.

ARTICLE XVIII

Holding Over

Section 18.01. If the Tenant shall remain in the Demised Premises after the expiration of the Term without having executed and delivered a new lease with the Landlord, such holding over
shall not constitute a renewal or extension of this Lease. The Landlord may, at its option, elect to treat the Tenant as one who has not removed at the end of its Term, and thereupon be entitled to all the remedies against the Tenant provided by law
in that situation, or the Landlord may elect, at its option, to construe such holding over as a tenancy from month to month, subject to all the terms and conditions of this Lease, except as to duration thereof, and in that event the Tenant shall pay
Monthly Basic Rent and Additional Rent in advance in the amount as provided for pursuant to N.J.S.A. 2A:42-6. The time limitations described in this Article XVIII shall not be subject to extension for Force Majeure, except that any increased rental
as herein described shall not be applicable for the first thirty (30) days beyond the expiration of the Term if, and only if, said holding over is as a result of Tenant's inability to move its furniture, fixtures and equipment to a new location for
reasons attributable to Force Majeure.

ARTICLE XIX

Liens

Section 19.01. Tenant shall not do any act, or make any contract, which may create or be the foundation for any lien or other encumbrance upon any interest of Landlord or any ground or
underlying lessor in any portion of the Demised Premises. If, because of any act or omission (or alleged act or omission) of Tenant, any Notice of Intention, mechanic's or other lien, ,charge, or order for the payment of money or other encumbrance
shall be filed against Landlord and/or any ground or underlying lessor and/or any portion of the Demised Premises (whether or not such lien, charge, order, or encumbrance is valid or enforceable as such), Tenant shall, at its own cost and expense,
cause same to be discharged of record or bonded within fifteen (15) days after the filing thereof; and Tenant shall indemnify and save harmless Landlord and all ground and underlying lessor(s) against and from all costs, liabilities, suits,
penalties, claims, and demands, including reasonable counsel fees, resulting therefrom. If Tenant fails to comply with the foregoing provisions, Landlord shall have the option of discharging or bonding any such lien, charge, order, or encumbrance,
and Tenant agrees to reimburse Landlord for all costs, expenses and other sums of money in connection therewith (as additional rental) with interest at the maximum rate permitted by law promptly upon demand. All materialmen, contractors, artisans,
mechanics, laborers and any other person now or hereafter contracting with Tenant or any contractor or subcontractor of Tenant for the furnishing of any labor services, materials, supplies, or equipment with respect to any portion of the Demised
Premises, at any time from the date hereof until the end of the Lease Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same.

ARTICLE XX

Condition of Demised Premises, Loss, Etc.

Section 20.01. After the commencement of the Tenant's occupancy, the Landlord shall not be responsible for the loss of, or damage to, property occurring in or about the Demised Premises,
for any reason whatsoever, to include but not be limited to: any existing or future condition, defect, matter or thing in the Demised Premises; the acts, omissions or negligence of other persons or tenants in and about the Demised Premises; theft or
burglary from the Demised Premises; the negligence of Landlord, its agents, servants or invitees; and defects, errors or omissions in the construction or design of the Demised Premises and/or the Building including the structural and non-structural
portions thereof. Tenant covenants and agrees to make no claims for any such loss, damage or injury at any time. Nothing in this Section 20.01 shall be construed to preclude any claim for personal injury by any third party or for any property damage
claim by any third party for its property, provided

said property is not under the care, custody or control of Tenant if such loss or injury is due in whole or in part to Landlord's negligence or misconduct or that of its employees or agents. As
used herein, third parties include but are not limited to employees, agents, contractors, invitees or any other party not occupying the Demised Premises pursuant to a sublet or license or as a successor or assign of Tenant.

ARTICLE XXI

Inspection, For Sale and For Rent Signs

Section 21.01. The Landlord, or its agents, shall have the right to enter the Demised Premises at reasonable hours to examine the same, or to exhibit the Demised Premises to prospective
purchasers and to place upon the Demised Premises a suitable "For Sale" sign, which sign must be approved by the Tenant, which approval shall not be unreasonably withheld. For twelve (12) months prior to the expiration of the Term, the Landlord, or
its agents, may exhibit the Demised Premises to prospective tenants and may place the usual "To Let" signs thereon. Notwithstanding the foregoing, except in the event of an emergency, Landlord shall provide Tenant with reasonable telephone notice
prior to entering the Demised premises in connection with this Section 21.01.

ARTICLE XXII

Signs

Section 22.01. No sign, advertisement or notice shall be affixed to or placed upon any part of the Demised Premises by the Tenant, except in such manner, and of such size, design and color
as shall be approved in advance in writing by the Landlord, which approval the Landlord shall not unreasonably withhold, provided: (i) that Tenant comply with all applicable governmental ordinances and regulations and receives all necessary
governmental approvals required for erection and maintenance of the sign and (ii) no later than the last day of the Term, Tenant shall, at Tenant's expense, remove the sign and repair all injury done by or in connection with the installation or
removal of the sign. Notwithstanding the foregoing, Landlord hereby consents to that sign to be located at the Demised Premises which is described on Exhibit D attached hereto and made a part hereof.

ARTICLE XXIII

Security and Late Charge

Section 23.01. Intentionally Omitted.

Section 23.02. Intentionally Omitted.

Section 23.03. In the event of the insolvency of Tenant or in the event of the entry of a judgment in bankruptcy in any court against Tenant which is not discharged within thirty (30) days
after entry, or in the event a petition is filed by or against Tenant under any chapter of the bankruptcy laws of the State of New Jersey or the United States of America then and in such event Landlord may require the Tenant to deposit security in
the amount specified in Section 16.05 to adequately assure Tenant's performance of all of its obligations under this Lease, including all payments subsequently accruing. Failure of Tenant to deposit the security required by this Section within
thirty (30) days after Landlord's written demand shall constitute a material breach of this Lease by Tenant.

Section 23.04. Anything in this Lease to the contrary notwithstanding, at Landlord's option, Tenant shall pay a "Late Charge" of eight (8%) percent of any installment of Monthly Basic Rent
or Additional Rent paid more than ten (10) days after the due date thereof, to cover the extra expense involved in handling delinquent payments.

ARTICLE XXIV

Financial Statements

Section 24.01. The Tenant agrees after the end of the Tenant's accounting year to furnish to the Landlord or mortgagee, a certified balance sheet and profit and loss statement for the last
accounting year.

ARTICLE XXV

Broker

Section 25.01. The Tenant represents and warrants to the Landlord that LPC Commercial Services, Inc. ("LPC"), The Pyne Companies, Ltd. and Edward S. Gordon Co. of New Jersey, Inc.
("Gordon") are the sole brokers with whom Tenant has dealt in connection with this Lease, and the Tenant shall pay the commission, if any, which may be due to said brokers (other than LPC). The Tenant agrees to indemnify and hold Landlord harmless
from any and all claims of Pyne, Gordon and any other brokers with whom Tenant has dealt in connection with this Lease, and expenses in connection therewith arising out of or in connection with the negotiation of or the entering into
this Lease by Landlord and Tenant. Landlord represents and warrants to the Tenant that LPC, Pyne and Gordon are the sole brokers with whom it has dealt in connection with this Lease and Landlord shall indemnify and hold harmless Tenant from any and
all claims arising out of conduct which is inconsistent with said representation. Landlord shall pay any commission owing to LPC in connection with this Lease.

ARTICLE XXVI

Short Form Memorandum of Lease

Section 26.01. At the request of either party, the Landlord and the Tenant will execute and deliver, in duplicate original counterparts, a recordable memorandum of this Lease identifying
the Demised Premises and stating the commencement and termination dates of the Term of this Lease.

ARTICLE XXVII

Waiver of Trial by Jury

Section 27.01. The Landlord and the Tenant waive trial by jury in any action, proceeding or counterclaim brought by either the Landlord or the Tenant against the other in any matters
whatsoever arising out of or in any way connected with this Lease, the Tenant's use or occupancy of the Demised Premises, and/or any claim of injury or damage.

ARTICLE XXVIII

Waiver of Distraint

Section 28.01. Landlord waives all lien, right, interest and claim it might otherwise have in and waives its right of distraint of, the machinery, fixtures and other property of the Tenant,
and in any other property of any nature whether on or off the Demised Premises, belonging to the Tenant. The provisions of this Section are intended to apply to the Landlord's common law (if any) and statutory right of distraint because of failure
to pay Basic Rent or Additional Rent.

ARTICLE XXIX

ERISA Representation

Section 29.01. Tenant represents and warrants to Landlord to the best of its knowledge that, as of the date hereof, neither Tenant nor any

affiliate of Tenant has employee pension or
profit-sharing plans that hold, in the aggregate, beneficial interests representing greater than five (5%) percent of the total assets of any Innovest, N.V. investment fund. Tenant acknowledges that a breach of the foregoing representation and
warranty may constitute a prohibited transaction under the terms of the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code, as modified by PTE 82-51, an administrative exemption from certain of the prohibited transaction
rules granted to the Innovest, N.V. by the United States Department of Labor [46 Fed. Reg. 14, 238 (April 2, 1982)]. If at any time Tenant or any affiliate of Tenant has employee pension or profit-sharing plans that hold, in the aggregate,
beneficial interests representing greater than five (5%) percent of the total assets of any Innovest, N.V. investment fund, Tenant shall promptly advise Landlord of such fact in writing.

ARTICLE XXX

Miscellaneous

Section 30.01. Partial Invalidity. If any term or provision of this Lease or the application thereof to any party or circumstances shall to any extent be invalid or unenforceable, the
remainder of this Lease or the application of such term or provision to parties or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid
and enforced to the fullest extent permitted by law. Section 30.02. Waivers. One or more waiverS by either party of the obligation of the other to perform any covenant or condition shall not be construed as a waiver of a subsequent breach of the
same or any other covenant or condition.

The receipt of Basic Rent or Additional Rent by the Landlord, with knowledge of any breach of this Lease by the Tenant or of any default on the part of the Tenant in the observance or performance of any of the
conditions or Covenants of this Lease, shall not be deemed to be a waiver of any provision of this Lease except with respect to the non-payment of Basic Rent or Additional Rent and then only to the extent of the Basic Rent or Additional Rent
actually received by Landlord. Neither acceptance of the keys nor any other act or thing done by the Landlord or any agent or employee during the Term herein demised shall be deemed to be in acceptance of a surrender of said Demised Premises,
excepting only an agreement in writing signed by the Landlord accepting or agreeing to accept such a surrender.

Section 30.03. Number, Gender. Wherever herein the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders.

Section 30.04. Successors, Assigns. The terms, covenants and conditions herein contained shall be binding upon and inure to the benefit of the respective parties and their successors and
assigns.

Section 30.05. Headings. The Article and marginal headings herein are intended for convenience in finding the subject matters, and are not to be taken as part of this Lease and are not to
be used in determining the intent of the parties to this Lease.

Section 30.06. Entire Agreement. This instrument and any other documents executed by the parties in connection herewith contain the entire and only agreement between the parties and no oral
statements or representations or prior written matter not contained in this instrument or in any other documents executed by the parties in connection herewith shall have any force or effect. This Lease shall not be modified in any way or terminated
except by a writing executed by both parties.

Section 30.07. Landlord. The term "Landlord" as used in this Lease means only the holder, for the time being, of the Landlord's interest under this Lease, so that in the event of any
transfer of title to the Demised Premises the Landlord shall be and hereby is entirely freed and relieved of all obligations of the Landlord hereunder accruing after such transfer, and it shall be deemed without further agreement between the parties
that such

grantee, transferee or assignee has assumed and agreed to observe and perform all obligations of the Landlord hereunder arising during the period it is the holder of the Landlord's interest hereunder.

Section 30.08. Words of Duty. Whenever in this Lease any words of obligation or duty are used, such words or expressions shall have the same force and effect as though made in the form of
covenants.

Section 30.09. Cumulative Remedies. The specified remedies to which the Landlord or the Tenant may resort under the terms of this Lease are cumulative and are not intended to be exclusive
of any other remedies or means of redress to which the Landlord or the Tenant may lawfully be entitled in case of any breach or threatened breach of any provision of this Lease.

Section 30.10. No option. The submission of this Lease Agreement for examination does not constitute a reservation of, or option for, the Demised Premises, and this Lease Agreement becomes
effective as a Lease Agreement only upon execution and delivery thereof by Landlord and Tenant.

Section 30.11. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount that the Basic Rent and additional charges payable hereunder shall be deemed to be
other than a payment on account of the earliest stipulated Monthly Basic Rent and Additional Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment for Basic Rent or Additional Rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Basic Rent and Additional Rent or pursue any other remedy provided herein or by law.

Section 30.12. Corporate Authority. If Tenant is a corporation, Tenant represents and warrants that this Lease and the undersigned's execution of this Lease has been duly authorized and
approved by the corporation's Board of Directors. The undersigned officers and representatives of the corporation executing this Lease on behalf of the corporation represent and warrant that they are officers of the corporation with authority to
execute this Lease on behalf of the corporation, and within fifteen (15) days of execution hereof, Tenant will provide Landlord with a corporate resolution confirming the aforesaid.

If Landlord is a corporation, Landlord represents and warrants that this Lease and the undersigned's execution of this Lease has been duly authorized and approved by the corporation's Board of Directors. The undersigned
officers and representatives of the corporation executing this Lease on behalf of the corporation represent and warrant that they are officers of the corporation with authority to execute this Lease on behalf of the corporation, and within fifteen
(15) days of execution hereof, Landlord will provide Tenant with a corporate resolution confirming the aforesaid.

Section 30.13. Intentionally omitted.

Section 30.14. Force Majeure. Force Majeure shall mean and include those situations beyond either party's control, including by way of example and not by way of limitation, acts of God;
accidents; repairs; strikes; shortages of labor, supplies or materials; inclement weather; or, where applicable, the passage of time while waiting for an adjustment of insurance proceeds. Any time limits required to be met by either party hereunder,
whether specifically made subject to Force Majeure or not, except those related to the payment of Term Basic Rent or Additional Rent and except as to the time periods set forth in Article XVIII, shall, unless specifically stated to the contrary
elsewhere in this Lease, be automatically extended by the number of days by which any performance called for is delayed due to Force Majeure.

Section 30.15. Additional Rent. As used in this Lease, Additional Rent shall mean all sums in addition to Basic Rent payable by Tenant to Landlord pursuant to the provisions of this Lease.

ARTICLE XXXI

Personal Liability

Section 31.01. Notwithstanding anything to the contrary provided in this Lease, it is specifically understood and agreed, such agreement being a primary consideration for the execution of
this Lease by Landlord, that there shall be absolutely no personal liability on the part of Landlord, its successors, assigns or any mortgagee in possession (for the purposes of this Paragraph, collectively referred to as "Landlord"), with respect
to any of the terms, covenants and conditions of this Lease, and that Tenant shall look solely to the equity of Landlord in the Building for the satisfaction of each
and every remedy of Tenant in the event of any breach by Landlord of any of the terms, covenants and conditions of this Lease to be performed by Landlord, such exculpation of liability to be absolute and without any
exceptions whatsoever.

ARTICLE XXXII

Landlord's Retained Rights

Section 32.01. The Landlord hereby reserves to itself, its successors and assigns, the right to grant, construct, maintain and use ingress and egress easements, railroad easements, utility
easements, drainage easements, across, through, over and under the Demised Premises, Building and Building Area or to or from other lands and other portions of the Real Property and to construct and install pipes and other equipment necessitated
thereby, provided, however, that the same be at the cost of the Landlord and does not unreasonably interfere with the use of or access to the Demised Premises by the Tenant.

ARTICLE XXXIII

Intentionally Omitted

ARTICLE XXXIV

Intentionally Omitted

ARTICLE XXXV

Intentionally Omitted

ARTICLE XXXVI

Intentionally Omitted

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals the day and year first above written.

		
	
ENZON, INC., Tenant	
HOLLAND REALTY CORPORATION, a
	 		
Delaware corporation, Landlord
	 		 
	
By: /S/ KENNETH J. ZUERBLIS	
By: /S/ M. JAMES SPITZER, JR.
	
Title: Vice President	
M. James Spitzer, Jr.,
	
Finance	
Secretary
	
Dated: April 1, 1995	
Dated: As of April 1, 1995

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