Document:

Confidential Materials
  omitted and provided separately with the

  	
   

  	
  Exhibit
  10.30

  
	
   

  	
   

  	
  Securities and
  Exchange Commission. Asterisks denote omissions.

  	
   

  	
   

  

EXECUTION COPY

ELAN PHARMA INTERNATIONAL

LIMITED

AND

NITROMED,
INC.

LICENSE AGREEMENT

INDEX

	
  1.

  	
   

  	
  Definitions and Interpretation

  	
   

  
	
  2.

  	
   

  	
  The License

  	
   

  
	
  3.

  	
   

  	
  Intellectual Property

  	
   

  
	
  4.

  	
   

  	
  Non-Competition

  	
   

  
	
  5.

  	
   

  	
  Registration, Marketing and the Promotion of the
  Product

  	
   

  
	
  6.

  	
   

  	
  Production License

  	
   

  
	
  7.

  	
   

  	
  Financial Provisions

  	
   

  
	
  8.

  	
   

  	
  Payments, Reports and Audits

  	
   

  
	
  9.

  	
   

  	
  Duration and Termination

  	
   

  
	
  10.

  	
   

  	
  Consequences of Termination

  	
   

  
	
  11.

  	
   

  	
  Warranties, Indemnification and Liability

  	
   

  
	
  12.

  	
   

  	
  Confidentiality

  	
   

  
	
  13.

  	
   

  	
  Miscellaneous Provisions

  	
   

  
	
  Schedule
  1

  	
   

  	
  Technological Competitors of Elan

  	
   

  
	
  Schedule
  2

  	
   

  	
  Key Terms for Supply Agreement

  	
   

  
	
  Schedule
  3

  	
   

  	
  Product Manufacturing Costs

  	
   

  

 

THIS AGREEMENT
is dated 9 February, 2007.

PARTIES:

(1)                                 ELAN PHARMA INTERNATIONAL LIMITED, a public limited company incorporated
under the laws of Ireland, having its registered office at Monksland Industrial
Estate, Athlone, County Westmeath Ireland (“Elan”);
and

(2)                                 NITROMED,
INC., a Delaware corporation, having its principal place of business at 125
Spring Street, Lexington MA 02421-7801 (“NitroMed”).

BACKGROUND:

(A)                              Elan
possesses certain proprietary technology and confidential information used or
useful in the manufacture and use of pharmaceutical products displaying a
sustained or modified release profile, as described more fully below.

(B)                                NitroMed
is developing pharmaceutical formulations containing the Compound, as defined
below.

(C)                                NitroMed
wishes to enter into this Agreement to obtain the right to utilize the Elan
Intellectual Property (as defined below) to import, use, offer for sale and
sell the Product in the Field in the Territory, on the terms and conditions set
out below.

(D)                               Simultaneously
with this Agreement, Elan’s Affiliate EDDI (as defined below) and NitroMed have
entered into a Development Agreement whereby EDDI is to develop the Product
(the “Development Agreement”).

TERMS:

The parties agree as follows:

1.                                      DEFINITIONS AND INTERPRETATION

1.1.                              Definitions.  In this Agreement:

“Affiliate” means any corporation or
entity controlling, controlled or under common control with Elan or NitroMed,
as the case may be.  For the purposes of
this Agreement, “control” means the direct or indirect ownership of more than
50% of the issued voting shares or other voting rights of the subject entity to
elect directors, or if not meeting the preceding criteria, any entity owned or
controlled by or owning or controlling at the maximum control or ownership right
permitted in the country where such entity exists.

“Agreement” means this license agreement
(which expression shall be deemed to include its Recitals and Schedules).

“BiDil” means the existing immediate
release product containing the Compound that is currently marketed in the
United States by NitroMed.

 2
 

“Business Days” means Monday to Friday
inclusive, excluding any days on which the clearing banks are generally closed
in Dublin and/or New York.

“Claims” means all and any claims
(whether successful or otherwise), loss, liability, damages and expenses,
including reasonable attorneys’ fees and expenses and legal costs.

“CMC Section” means the chemistry,
manufacturing, and controls section of the Regulatory Application in the USA as
defined in 21 C.F.R. Section 314.50 (1) relating to the Product, as may be
amended from time to time, and/or its equivalent in other Regulatory
Applications.

“Competitive Product” means any
pharmaceutical product (other than the Product itself) that has received final
regulatory approval (including marketing, pricing, reimbursement and any other
applicable approval) from the applicable Governmental Authority in a country in
the Territory for use solely for the treatment of heart failure as an adjunct
to current standard therapy in self-identified black patients to improve
survival.

“Compound” means the combination of the
active drug substances isosorbide dinitrate and hydralazine HCl and/or other
salts, bases and isomeric forms of each.

“Compound Data” means data relating to
the Compound generated by NitroMed or EDDI pursuant to the R&D Program.

“DMF” means the Drug Master File, as
defined in the 21 C.F.R., Section 314.420  and/or its
equivalent in the other countries of the Territory, which Elan (or an
Affiliate) may file in respect of the Elan Technology and the application of
the Elan Technology as regards the Product.

“EDDI” means Elan Drug Delivery  Inc., a Delaware corporation, having its
principal place of business at 3000 Horizon
Drive, King of Prussia, PA 19406

“EEA” means the Member States of the
European Economic Area, as same may change from time to time in terms of Member
States.

“EHI” means Elan Holdings, Inc a
Delaware corporation having its principal place of business at 1300 Gould
Drive, Gainesville, GA 30504, USA.

“Effective Date” means the date of this
Agreement as first set forth above.

“Elan Improvements” means any and all
improvements to the Elan Patents, the Elan Know-How, the Elan Technology and/or
the Product Patents that have been conceived, created, developed and/or
otherwise invented by Elan and/or NitroMed under the R&D Program, or
otherwise pursuant to this Agreement.

“Elan Intellectual Property” means the
Elan Know-How, the Elan Patents, the Elan Improvements and the Product Patents.

“Elan Know-How” means any and all rights
owned, licensed or controlled by Elan as of the Effective Date to any
scientific, pharmaceutical or technical information, data, discovery, invention
(whether patentable or not), know-how, substances, techniques, processes,
systems, formulations, designs and expertise relating to the Elan Technology
which is not generally known to the public.

 3
 

“Elan Patents” means any and all Patent
Rights now existing, currently pending or hereafter filed by Elan relating to
the Elan Technology.

“Elan Technology” means the SODASâ oral controlled release formulation technology
that comprises the formation of 0.5-5mm beads containing an active agent and
excipients which can be coated with a product-specific modified release polymer
and then formulated into a final formulation such as a sprinkle, a tablet or a
capsule, as applied in the Elan Know-How.

“Elan Trademark” means SODAS® or such other trade marks as Elan may from
time to time reasonably specify.

“EXW” (ex works) has the same meaning as
in the ICC Incoterms 2000, International Rules for the Interpretation of Trade
Terms, ICC Publication No. 560.

“FDA” means the United States Food and
Drug Administration or any other successor agency whose approval is necessary
to market the Product in the United States of America.

“Field” means the use as a prescription
or over-the-counter pharmaceutical product in humans.

“Force Majeure” means any cause or
condition beyond the reasonable control of the party obliged to perform,
including acts of God, acts of government (in particular with respect to the
refusal to issue necessary import or export licenses), fire, flood, earthquake,
war, acts of terrorism, riots or embargoes, strikes or other labour
difficulties affecting a party.

“Governmental Authority” means all
governmental and regulatory bodies, agencies, departments or entities, whether
or not located in the Territory, which regulate, direct or control commercial
and other related activities in or with the Territory.

“In Market” means the sale of the
Product in the Territory by NitroMed, or where applicable, by a permitted
sub-licensee, to an unaffiliated third party, such as a wholesaler,
distributor, managed care organisation, hospital or pharmacy, and shall exclude
the transfer pricing of the Product by one NitroMed Affiliate to another
NitroMed Affiliate or a permitted sub-licensee.

“Major Market(s)” means the United
States, the United Kingdom, France, Germany, Spain and Italy and such
additional countries as may be agreed by the parties from time to time.

“Major Territories” means the United
States, the United Kingdom, France, Germany, Spain, Italy, Canada, Australia,
New Zealand, Japan, South Korea and Brazil.

“Net Sales” shall, subject to the
provisions of Clause 7.4, mean in the case of Product sold by NitroMed, or by a
permitted sub-licensee, the aggregate gross In Market sales proceeds billed for
the Product by NitroMed, or by a permitted sub-licensee, as the case may be, in
accordance with generally accepted accounting principles, less the following:

(i)                                     trade,
cash or quantity discounts, allowances, adjustments and rejections;

(ii)                                  rebates,
recalls (other than where the Product is replaced without charge) and returns;

(iii)                               price reductions or
rebates imposed by Governmental Authorities;

 4
 

(iv)                              debts
arising from failure to collect on customer accounts (such debts not to exceed
1% of gross In Market sales);

(v)                                 sales,
excise, turnover, inventory, value-added and similar taxes assessed on the
royalty-bearing sale of such Product, but not including any taxes on income
paid by or assessed against NitroMed or a permitted sub-licensee;

(vi)                              transportation,
importation, shipping, insurance and other handling expenses directly
chargeable to the royalty-bearing sale of the Product, but only to the extent
that such expenses are separately delineated in the applicable invoices; and

(vii)                           chargebacks granted to drug
wholesalers or their customers in cases where there are not direct shipments to
such customers by NitroMed or its permitted sublicense.

Any discretionary rebates, discounts or adjustments shall be
commercially reasonable and consistent with standard industry practices.

“NitroMed Improvements” means any and
all improvements to the NitroMed Patents, the NitroMed Know-How and/or the
Compound that have been conceived, created, developed and/or otherwise invented
by NitroMed and/or Elan under the R&D Program, or otherwise pursuant to
this Agreement.

“NitroMed Intellectual Property” means
the NitroMed Know-How, the NitroMed Patents and the NitroMed Improvements.

“NitroMed Know-How” means any and all
rights owned, licensed or controlled by NitroMed (otherwise than pursuant to
the Elan License) to any scientific, pharmaceutical or technical information,
data, discovery, invention (whether patentable or not), know-how, substances,
techniques, processes, systems, formulations and designs and expertise relating
to the Compound which is not generally known to the public.

“NitroMed Patents” means any and all
Patent Rights now existing, currently pending or hereafter filed, or acquired
or licensed by NitroMed relating to the Compound.

“NitroMed Trademark” means NitroMed’s
rights to use the trademark(s) NitroMed®,  BiDil®, NitRx®, the NitroMed “N” logo and such other
trademarks as NitroMed may from time to time reasonably specify.

“Patent Rights” means any and all rights
under any and all patent applications and/or issued or granted patents, now
existing, currently pending or hereafter filed, including, but not limited to,
provisional applications, substitutions, divisionals, continuations,
continuations-in-part, renewals and any foreign counterparts thereof or
equivalents thereto, including the right to claim priority from any of the
foregoing under the Paris Convention, and all patents issuing or granted on any
of the foregoing, and any foreign counterparts thereof, together with all
registrations, reissues, re-examinations, supplemental protection certificates,
or extensions thereof, and any foreign counterparts thereof, or any other
government-issued rights substantially equivalent to the foregoing.

“Product” means the once or twice-daily
oral tablet or oral capsule formulation(s) incorporating the Elan Technology
and containing the Compound as its sole active combination of ingredients,
being developed pursuant to the R&D Program.

 5
 

“Product Patents” means Patent Rights
specifically exemplifying or claiming the Product.  For the avoidance of doubt, Product Patents
do not include the NitroMed Patents or the Elan Patents.

“Prosecute” means in relation to a class
of intellectual property:

(a)                                  to
secure the grant of any patent application within such class;

(b)                                 to
file and prosecute patent applications on patentable inventions and discoveries
relating to that class;

(c)                                  to
defend all such applications against third party oppositions; and

(d)                                 to
maintain in force any issued letters patent relating to the same

and “Prosecution” has a corresponding
meaning.

“R&D Program” means the research and
development program set forth in the Development Agreement.

“Regulatory Application” means any
regulatory application or any other application for marketing approval for the
Product, which NitroMed may file in the Territory, including any supplements or
amendments thereto which NitroMed may file.

“Regulatory Approval” means the final
approval to market the Product in any country of the Territory, including all
approvals which are required to launch the Product in the normal course of
business.

“Supply Agreement” means the
manufacturing and supply agreement to be negotiated in good faith between Elan
and NitroMed whereby Elan will supply substantially all of NitroMed’s
commercial requirements of the Product, subject to the terms herein and
therein, and which shall incorporate the key terms set out in Schedule 2.

“Technical Failure” means the inability
to achieve a pharmacokinetic profile for Product (assessing Cmax (maximum
concentration) and AUC (area under the curve) criteria within 80-125% of mean
data) consistent with that of BiDil administered three times daily (at 6 hour
intervals).

“Technological Competitor” means a
person or entity listed in Schedule 1, and divisions, subsidiaries and
successors thereof, and such other corporate entities that, other than as a de
minimis activity, develop oral drug delivery technology displaying a sustained
release or modified release profile and/or manufacture products displaying a
sustained or modified release profile that Elan may request to add to Schedule
1 from time to time, subject to the consent of NitroMed, which consent may not
be unreasonably withheld or delayed.

“Term” means the term of this Agreement,
as set out in Clause 9.

“Territory” means all of the countries
of the world.

“$” and “US$”
mean United States Dollars.

1.2.                              Further
Definitions.  In addition, the
following definitions have the meanings in the Clauses corresponding thereto,
as set forth below:

 6
 

 

	
   

  	
  Definition

  	
   

  	
  Clause

  
	
   

  	
  “Alternate Source”

  	
   

  	
  6.1

  
	
   

  	
  “Bankruptcy Code”

  	
   

  	
  2.3

  
	
   

  	
  “Confidential Information”

  	
   

  	
  12.1

  
	
   

  	
  “Development Agreement”

  	
   

  	
  Recital (D)

  
	
   

  	
  “Disclosing Party”

  	
   

  	
  12.12

  
	
   

  	
  “Due Date”

  	
   

  	
  8.8

  
	
   

  	
  “Elan License”

  	
   

  	
  2.1

  
	
   

  	
  “Estimated Statement”

  	
   

  	
  8.1

  
	
   

  	
  “Final Statement”

  	
   

  	
  8.1

  
	
   

  	
  “Firm”

  	
   

  	
  3.5.5

  
	
   

  	
  “Infringement Claim”

  	
   

  	
  3.4.1

  
	
   

  	
  “Initial Term”

  	
   

  	
  9.1

  
	
   

  	
  “License Milestone Payments”

  	
   

  	
  7.1

  
	
   

  	
  “Manufacturer”

  	
   

  	
  6.1.2

  
	
   

  	
  “Second Source”

  	
   

  	
  6.1

  
	
   

  	
  “Tech Transfer Program”

  	
   

  	
  6.2

  
	
   

  	
  “Notice”

  	
   

  	
  13.11.1

  
	
   

  	
  “Notified Party”

  	
   

  	
  3.5.1

  
	
   

  	
  “Notifying Party”

  	
   

  	
  3.5.1

  

 

1.3.                              Interpretation.  In this Agreement:

1.3.1                        the singular includes the
plural and vice versa, and unless the context or subject otherwise requires,
references to words in one gender include references to the other genders;

1.3.2                        references to persons include
all natural or legal persons including unincorporated associations;

1.3.3                        unless the context otherwise
requires, reference to a recital, article, paragraph, provision, clause or
schedule is to a recital, article, paragraph, provision, clause or schedule of
or to this Agreement;

1.3.4                        the headings in this Agreement
are inserted for convenience only and do not affect its construction; and

1.3.5                        the expressions “include”, “includes”,
“including”, “in particular” and similar expressions shall be construed without
limitation.

2.                                      THE LICENSE

2.1.                              Elan
License to NitroMed.  Subject to the
terms of this Agreement, Elan hereby grants to NitroMed for the Term an
exclusive license (the “Elan License”)
to the Elan Intellectual Property to import, use, offer for sale and sell the
Product in the Field in the Territory. For the avoidance of doubt, the Elan
License does not include the right to perform any formulation and/or process
development activities for the Product.

 7
 

2.2.                              Sub-licensing.  NitroMed shall be entitled to grant
sub-licenses in respect of the Elan Intellectual Property in one or more
countries of the Territory, subject to the following conditions:

2.2.1                        NitroMed shall have the right
to grant a sub-license to a Technological Competitor solely for the purposes of
co-promotion, distribution and/or marketing in countries where a DMF or
equivalent procedure exists such that Elan will not be required to disclose to
the sub-licensee or publicly Elan’s Confidential Information; outside of these
countries NitroMed shall have the right to grant a sub-license to a
Technological Competitor for the purposes aforementioned provided all of the
following conditions are met (and in the case of a Technological Competitor
acquiring control of NitroMed pursuant to Clause 13.2.4, or the assignment of
this Agreement to a Technological Competitor pursuant to Clause 13.2.2, the
requirements of this Clause 2.2.1 shall apply):

(a) the potential sub-licensee does not generate a majority of its
revenues in connection with activities in relation to oral controlled release
technologies;

(b) the commercialisation activities in relation to the Product will be
carried out by a separate division that is 
not  involved in any activities
related to sub-licensee’s oral controlled release technology;

(c) NitroMed has used its reasonable best efforts to ensure that the
potential sub-licensee does not gain access to Elan’s confidential information
in relation to the chemistry, manufacturing and control processes for the
Product and to this end the parties agree to negotiate in good faith an
appropriate three-way confidentiality agreement between NitroMed, Elan and the
potential sub-licensee; and

(d) if such access to information cannot be avoided then Elan and
NitroMed shall discuss in good faith the establishment of mechanisms to allow
for the maximum reasonable protection of Elan’s confidential information whilst
permitting the commercialisation of the Product in such countries, which will
ensure that the potential sub-licensee provides, directly to Elan, appropriate
undertakings, with appropriate rights of enforcement of those undertakings.

2.2.2                        NitroMed shall not grant a
sub-license to a person selling Competitive Products, and any sub-license shall
automatically terminate upon the sub-licensee selling Competitive Products;

2.2.3                        Any sub-license granted shall
be in the same terms as the terms of this Agreement insofar as they are applicable,
mutatis mutandis, but excluding the right to grant a sub-license or a
production license;

2.2.4                        For the avoidance of doubt,
NitroMed shall ensure that Elan shall have the same rights of audit and
inspection vis-à-vis a sub-licensee as Elan has vis-à-vis NitroMed pursuant to
this Agreement;

2.2.5                        NitroMed shall be liable to
Elan for all acts and omissions of any sub-licensee as though such acts and
omissions were by NitroMed; and

2.2.6                        NitroMed
shall undertake to protect the confidentiality of Elan’s chemistry,
manufacturing and control processes for the Product in its dealings with
permitted sub-

 8
 

licensees and shall not disclose any information from the CMC Section
to a any third party, including a permitted sub-licensee, without the prior
written consent of Elan, which consent shall not be unreasonably withheld or
delayed, other than as contemplated pursuant to the terms of Clause 2.2.1.

2.3.                              Section
365(n) of the Bankruptcy Code.  The
licenses granted under this Agreement shall be treated as licenses of rights to
“intellectual property” (as defined in Section 101(56) of Title 11 of the
United States Code, as amended (the “Bankruptcy Code”))
for purposes of Section 365(n) of the Bankruptcy Code.  The parties agree that each party may elect
to retain and may fully exercise all of its rights and elections under the
Bankruptcy Code; provided  that the electing party complies with
the terms of this Agreement.

3.                                      INTELLECTUAL PROPERTY

3.1.                              Ownership
of Intellectual Property.

3.1.1                        Elan shall be and remain the
owner of the Elan Intellectual Property.

3.1.2                        NitroMed shall be and remain
the owner of the NitroMed Intellectual Property.

3.2.                              Patent
Prosecution and Maintenance.

3.2.1                        Elan, at its sole discretion
and expense, may Prosecute the Elan Intellectual Property in the Territory.

3.2.2                        NitroMed, at its sole
discretion and expense, may Prosecute the NitroMed Intellectual Property in the
Territory.

3.2.3                        Elan shall promptly notify
NitroMed of any developments that fall within the NitroMed Intellectual
Property.  NitroMed shall promptly notify
Elan of any developments that fall within the Elan Intellectual Property.

3.2.4                        Each party shall provide the
other with reasonable support in the Prosecution of the Elan Intellectual
Property and the NitroMed Intellectual Property in respect of any inventions
that were developed under this Agreement and shall provide all information
and/or data in its possession that is necessary to support any relevant patent
application in the Territory.

3.2.5                        NitroMed and Elan shall discuss
the filing strategy for any proposed patent application(s) in the Territory and
shall co-ordinate the filing of such patent application(s) between the two
parties in order to protect the intellectual property rights of both parties in
the Territory.

3.2.6                        In the event that Elan does not
wish to Prosecute the Elan Intellectual Property, or some part thereof, in a
particular country, Elan shall notify NitroMed prior to ceasing Prosecution,
and NitroMed shall then have the right to assume such further action at its own
expense.

3.3.                              Enforcement.

 9
 

With respect to infringement of the Elan Intellectual Property or the
NitroMed Intellectual Property as it relates to the Product or a Competitive
Product the parties agree as follows:

3.3.1                        Elan and NitroMed shall promptly
inform each other in writing of any actual or alleged unauthorized use of the
Elan Intellectual Property or the NitroMed Intellectual Property by a third
party of which it becomes aware and provide the other party with any available
evidence of such unauthorized use.

3.3.2                        Subject to Clause 3.3.5, Elan
shall have the right to enforce for Elan’s own benefit (including by agreement
or by litigation) Elan’s intellectual property rights at its own
instigation.  To the extent such rights
relate to Elan Improvements and/or Product Patents, NitroMed shall reasonably
cooperate with Elan to enforce such rights, provided that NitroMed is
indemnified for any out-of-pocket expenses incurred in providing such
cooperation.  NitroMed shall be kept
advised at all times of all such suits or proceedings under this Clause 3.3.2
brought by Elan. Any recovery, lump-sum settlement, royalty payment or other
consideration received by Elan for past infringement or misappropriation as a
result of litigation related to the Elan Improvements and/or Product Patents
shall be disbursed as follows:

3.3.2.1               first, Elan and NitroMed shall be
reimbursed pro rata for the expenses of the suit actually incurred by them in
connection with the alleged infringement or misappropriation including, without
limitation, attorney’s fees and court costs;

3.3.2.2               second, any amount awarded in relation
to actual damage (calculated on the basis of lost sales, reasonable royalty,
account of profits or otherwise) shall be paid [**]% to Elan and [**]% to NitroMed;
and

3.3.2.3               third, all other amounts shall be paid
[**]% to Elan and [**]% to NitroMed.

3.3.3                        In the event Elan elects not to
enforce the Elan Improvements and/or Product Patents pursuant to Clause 3.3.2
as a result of an actual unauthorised use of such Elan intellectual property by
a third party and NitroMed has actual money damages from such unauthorised use,
NitroMed may institute such infringement suit at its own expense. Elan shall
reasonably cooperate with NitroMed to enforce such rights, provided that Elan
is indemnified for any out-of-pocket expenses incurred in providing such
cooperation. Elan shall be kept advised at all times of all such suits or
proceedings under this Clause 3.3.3 brought by NitroMed. NitroMed shall not
settle or compromise any such infringement suit without the prior written
consent of Elan which shall not be unreasonably withheld. Any recovery, lump
sum settlement, royalty payment or other consideration received by NitroMed for
past infringement or misappropriation as a result of litigation related to the
Elan Improvements and/or Product Patents shall be disbursed in the same manner
as laid down in Clause 3.3.2.

3.3.4                        Subject to
Clause 3.3.5, NitroMed shall have the right to enforce for NitroMed’s own
benefit (including by agreement or through litigation) NitroMed’s intellectual
property rights at its own instigation. 
To the extent such rights relate to NitroMed Improvements, Elan shall
fully cooperate with NitroMed to enforce such rights, provided that Elan is
indemnified for out-of-pocket expenses incurred in providing such 

 10
 

cooperation.  Elan shall be kept
advised at all times of all such suits or proceedings under this Clause 3.3.4
brought by NitroMed.

3.3.5                        In the event that Elan and
NitroMed Orange Book listed patents are collectively challenged, the Parties
shall have joint enforcement rights. In particular under the foregoing
circumstances where a “Paragraph IV Certification” (as defined in CFR Title 21)
is filed by a third party against Product in the United States, the parties
shall consult as to the commercial reasonableness of suing such third party for
patent infringement within 15 days of receipt of such notice.  Following such discussion, the parties shall
be entitled jointly to commence such action within 45 days of the date of such
notice, except that no action shall be taken in relation to a party’s patent
where that same party’s litigation counsel believes such claim to be baseless
(even considering the doctrine of equivalents).

3.4.                              Defense
of and Liability for Infringement Claims.

3.4.1                        Each of the parties shall
promptly notify the other party in writing of any Claim made or brought against
either of them alleging infringement or other unauthorised use of the
proprietary rights of a third party arising from the development, manufacture,
importation, use, offer for sale, sale or other commercialization of the
Product in the Territory (“Infringement Claim”).

3.4.2                        NitroMed shall indemnify and
hold harmless Elan against all Infringement Claims resulting from:

3.4.2.1               a breach by NitroMed of its
representations and warranties set forth in Clauses 11.2.3 or 11.2.4; or

3.4.2.2               intellectual property which is owned by,
licensed to or controlled by NitroMed, any Affiliate of NitroMed or a permitted
sub-licensee in the country in question, or which is/was generated pursuant to
some agreement between NitroMed (or an Affiliate or permitted sub-licensee) on
the one hand and a third party on the other.

3.4.3                        Subject to Clauses 3.4.4, 3.4.5
and 3.4.6 Elan shall indemnify and hold harmless NitroMed against all
Infringement Claims resulting from a breach by Elan of its representations and
warranties set forth in Clauses 11.1.3 and 11.1.4. For the avoidance of doubt,
the parties agree that NitroMed shall indemnify and hold harmless Elan against
all claims (whether successful or otherwise), damages, losses, liabilities and
expenses (including reasonable attorney’s fees) which may arise in connection
with any Infringement Claim where such Infringement Claim does not result from a
breach by Elan of any of its representations or warranties set forth in Clauses
11.1.3 and 11.1.4 or by NitroMed of its representations and warranties set
forth in Clauses 11.2.3 and 11.2.4.

3.4.4                        Subject to Clauses 3.4.5 and
3.4.6, Elan’s aggregate cumulative liability pursuant to Clause 3.4.3 (and/or
under any other provision of this Agreement) in respect of those Infringement
Claims for which Elan is liable under Clause 3.4.3 (“Infringement
Claim Fees”) shall not exceed certain limitations as follows:

 

 11

 

3.4.4.1                                           [**]% of any lump sum payment due to a third party as a result of a
court order or settlement in respect of the Infringement Claim (including a
claim for damages); and

3.4.4.2                                           [**]% of any license fees due to a third party under any license entered
into hereunder in order to develop, manufacture, sell or otherwise
commercialize the Product in the Territory under this Agreement.

3.4.5                             NitroMed will be entitled to recover amounts due by Elan to NitroMed
under Clause 3.4.4 solely as a credit against the royalties payable by NitroMed
to Elan under the provisions of Clause 7.3, provided, however, that the maximum
credit which may be claimed by NitroMed in any one such year will be [**]% of
the royalty otherwise payable to Elan until such time as the aggregate amount
of the credit due by Elan to NitroMed pursuant to this clause exceeds the
amount that represents all royalties that have previously been paid by NitroMed
to Elan under the provisions of Clause 7.3, after which such time the maximum
credit shall be reduced to [**]% of the royalty otherwise payable to Elan.

3.4.5.1                                           Any deficit remaining in NitroMed’s recovery of amounts due by Elan to
NitroMed under Clauses 3.4.3 and 3.4.4 following recovery by NitroMed within
the limitations set forth in this Clause 3.4.5 shall be borne by NitroMed and
Elan shall have no liability to NitroMed in relation thereto.

3.4.5.2                                           For the avoidance of doubt, NitroMed shall indemnify and hold harmless
Elan against all Infringement Claims to the extent they are in excess of the
limits set forth in Clause 3.4.4 and this Clause 3.4.5.

3.4.6                                                                                 Save as specifically provided
otherwise in this Clause 3.4, the provisions of Clause 11.7 shall apply as
regards the conduct of any Infringement Claim.

3.4.6.1                   With
reference to the provisions of Clause 11.7.4, Elan and NitroMed shall consult
as regards any actions Elan or NitroMed proposes to take in order to mitigate
any loss or liability in respect of any Infringement Claim, such as NitroMed
ceasing to sell the Product, the parties agreeing to modify the Product, or
either or both of the parties entering into a licensing or settlement
negotiation with the third party.

3.4.6.2                   In
the event that NitroMed and Elan fail to reach agreement on the course of such
actions, the party directing such actions shall indemnify and hold the other
party harmless against all Infringement Claims to the extent that such
Infringement Claims (i) relate to the period after the date that  the parties were unable to reach final
agreement on such action and (ii) arose as a direct result of the failure of
NitroMed and Elan to reach final agreement on such action.  For the avoidance of doubt, the Elan’s
aggregate cumulative liability pursuant to Clause 3.4.4 and the NitroMed
recovery mechanism pursuant to Clause 3.4.5 shall apply to this Clause 3.4.6.

3.5.                                   Third Party Licenses

3.5.1                             Notice.  If during the Term either party reasonably
believes that the importation, use, offer for sale or sale of the Product in
the Field in the Territory would infringe the

 12
 

intellectual property rights of a third party
and that such infringement arises from or relates to use of the Elan Technology
in the Product, that party (the “Notifying Party”)
shall so inform the other party (the “Notified Party”)
by written notice, which shall include documents supporting the Notifying Party’s
position.  If the Notifying Party
believes a license from such third party is necessary or advisable to exercise
its rights and obligations under this Agreement, including without limitation
to sell the Product and/or mitigate any potential liability arising therefrom
(a “Third Party License”), the notice shall
include reference to such Third Party License.

3.5.2                             Counter-Notice.  The Notified Party shall have fifteen (15)
working days to review the notice issued pursuant to Clause 3.5.1 from the
Notifying Party and to agree or disagree with the Notifying Party’s belief by
written counter-notice.  If the Notified
Party disagrees with the Notifying Party’s belief, then the Notified Party
shall provide the Notifying Party with documents supporting the Notified Party’s
position.  The Notifying Party shall have
fifteen (15) working days from the date of receipt to review the documents from
the Notified Party.  Failure to respond
to the other party’s notice shall be taken for the purposes of the decision as
to whether to obtain a license under this Clause 3.5.2 (but for the avoidance
of doubt, not for any other purpose whatsoever) as accession to the position of
the other party.  The parties agree that
the time periods as set forth in this Clause 3.5.2 may be reasonably extended
by the mutual written agreement of the parties.

3.5.3                             Use of Documents.  All documents exchanged by the parties shall
be maintained in confidence and shall not be used for any other purpose than the
resolution of the scope of a third party’s intellectual property rights as it
pertains to the importation, use, offer for sale or sale of the Product as set
forth in this Agreement.

3.5.4                             Resolution.  If the Notified Party disagrees with the
Notifying Party’s position pursuant to the terms as set forth in Clause 3.5.2
herein and if the Notifying Party maintains its original position after such
review period, then the matter shall be referred first to the officers of Elan
and NitroMed having responsibility for the subject matter of the dispute, or
their designees.  Such officers, or their
designees, as the case may be, shall negotiate in good faith to resolve such
dispute in a mutually satisfactory manner. 
If such efforts do not result in a mutually satisfactory resolution of
the dispute within fifteen (15) working days of such referral, the matter shall
be referred to the chief executive officer of each party, or their respective
designees.

3.5.5                             Final Resolution.  If the parties’ chief executive officers or
their designees do not resolve the dispute within fifteen (15) working days of
the matter being referred to them (or such longer time periods as may be
mutually agreed in writing by the parties), an independent mutually acceptable
Third Party law firm with suitable expertise in the field of intellectual
property in pharmaceuticals (the “Firm”) shall be
appointed to determine whether, in its opinion, the sale of the Product would
infringe such third party intellectual property. The Firm’s opinion shall be
binding on both parties.  An appropriate
community of interest agreement shall be entered into so that the benefit of
the Firm’s opinion shall inure to both parties. 
Once appointed, the Firm shall not be used by either party for matters
pertaining to the Elan Intellectual Property or the NitroMed Intellectual
Property, other than subsequent disputes under this Clause 3.5.  The costs of the Firm shall be borne by the
party with whom the Firm disagrees.

 13
 

3.5.6                             Disputes Not To Be Reopened.  The procedure in Clauses 3.5.1 to 3.5.5 shall
not be used more than once in relation to any particular third party
intellectual property allegedly infringed, absent new and relevant facts.

3.5.7                             Negotiation.  If the parties or the Firm determine that a
license should be obtained, Elan shall have the initial right to negotiate such
license.  Elan shall not agree to or
settle any license negotiations for an amount that exceeds its obligation to
pay pursuant to Section 3.4 without NitroMed’s prior written approval.  To the extent Elan violates the foregoing,
Elan shall be fully liable for the monetary obligation arising from the
agreement and/or settlement as a result thereof.  In the event that Elan is unsuccessful in
obtaining such a license within [**] days of the determination to seek a
license from such third party, then NitroMed shall have the right to negotiate
such license.  In the event that NitroMed
obtains the right to negotiate a third party license pursuant to this Clause
3.5.7, and chooses to exercise such right, NitroMed shall not, without Elan’s
prior written approval, propose nor agree to the grant of any right whatsoever
under the Elan Intellectual Property as a part of those negotiations or as a
part of any settlement arising from such negotiations.

3.5.8                             Terms.  The party attempting to negotiate the license
shall:

3.5.8.1                                           use all commercially reasonable efforts to achieve commercially
reasonable terms;

3.5.8.2                                           keep the other party reasonably informed of such negotiations;

3.5.8.3                                           submit to the other party any draft terms for approval;

3.5.8.4                                           reasonably take into account any comments the other party may have; and

3.5.8.5                                           without prejudice to the generality of the foregoing, use all
commercially reasonable efforts to ensure that the license is sub-licensable to
NitroMed (in the case of Elan) or sub-licensable and freely transferable to
Elan (in the case of NitroMed).

3.5.9                             Third Party Royalties. Regardless
as to whether Elan or NitroMed is responsible for negotiating any Third Party
License pursuant to this Clause 3.5 the costs of obtaining such Third Party
License shall be apportioned as follows:

3.5.9.1                                           Elan shall be responsible for [**] of all such costs, including license
fees, milestone payments and royalties up to a maximum aggregate responsibility
under all Third Party Licenses (“Third Party Royalties”)
in any given calendar quarter up to [**] of the royalties otherwise payable to
Elan under this Agreement in that quarter, subject to the provisions of Clause
3.4;

3.5.9.2                                           NitroMed shall be responsible for any Third Party Royalties in any
calendar quarter of the Term in excess in excess of the limits set forth in
Clause 3.5.9.1; and

3.5.9.3                                           Notwithstanding the foregoing, any amounts payable by NitroMed under
Clause 3.5.9.2 may be carried forward to subsequent calendar quarters of

 14
 

the Term until exhausted. Such carry forward shall
remain subject to the limit of [**] of the royalties otherwise payable to Elan
under this Agreement in such calendar quarter, except as otherwise provided
herein.

3.5.10                       Unrelated Licenses.  Nothing in this Clause 3.5 shall be construed
as affecting NitroMed’s rights to obtain licenses wholly unrelated to the
incorporation of the Elan Technology in the Product, at its own expense.

3.6.                                   Notwithstanding any provision to the contrary in this Agreement and for
clarity, Elan’s maximum aggregate liability for Third Party Royalties and
Infringement Claim Fees shall be limited to a maximum of [**] of the royalties
otherwise payable to Elan under this Agreement, except as otherwise provided in
Clause 3.4, but NitroMed shall be entitled to recover any Third Party Royalties
or Infringement Claim Fees for which (in each case) Elan is responsible in
excess of such quarterly limit as a credit against any royalties due to  Elan in subsequent quarters of the Term up to
[**] of the royalties otherwise payable to Elan under this Agreement in such
quarter, except as otherwise provided in Clause 3.4.

3.7.                                   Trademarks.

3.7.1                             NitroMed Trademark.

3.7.1.1                                           NitroMed shall market the Product in the Territory under the NitroMed
Trademark.

3.7.1.2                                           NitroMed grants to Elan and its Affiliates for the Term a royalty free,
worldwide, non-exclusive license to the NitroMed Trademark and, if different,
trademarks showing NitroMed’s corporate logo, for the purpose of Elan’s promotion
of its activities and of the Elan Technology.

3.7.1.3                                           Elan shall ensure that each reference to and use of the NitroMed
Trademark by Elan is in a manner from time to time approved by NitroMed and
accompanied by an acknowledgement, in a form approved by NitroMed, that the
same is a trademark (or registered trademark) of NitroMed.

3.7.1.4                                           Elan shall not use the NitroMed Trademark in any way which might
materially prejudice its distinctiveness or validity or the goodwill of
NitroMed therein.

3.7.1.5                                           Elan shall not use in the Territory any trademarks or trade names so
resembling the NitroMed Trademark as to be likely to cause confusion or
deception.

3.7.1.6                                           NitroMed shall, at its sole discretion and expense, file and prosecute
applications to register and maintain registrations of the NitroMed Trademark
in the Territory.

3.7.1.7                                           NitroMed will be entitled to conduct all enforcement proceedings
relating to the NitroMed Trademark and shall at its sole discretion decide what
action, if any, to take in respect of any infringement or alleged infringement
of the NitroMed Trademark or passing-off or any other claim

 15
 

or counter-claim brought or threatened in respect of
the use or registration of the NitroMed Trademark.  Any such proceedings shall be conducted at
NitroMed’s expense and for its own benefit.

3.7.2                             Elan Trademark.

3.7.2.1                                           To the extent permitted under applicable law, NitroMed shall prominently
display the Elan Trademark on the packaging of the Product and on all
promotional materials in relation to the Product to acknowledge that the Elan
Technology has been applied in developing and manufacturing the Product.

3.7.2.2                                           Elan grants to NitroMed for the Term a paid-up, worldwide, non-exclusive
license to the Elan Trademark, solely for the purpose of fulfilling NitroMed’s
obligations under this Clause 3.7.2.

3.7.2.3                                             NitroMed shall ensure that each reference to and use of the Elan
Trademark by NitroMed is in a manner from time to time approved by Elan and
accompanied by an acknowledgement, in a form approved by Elan, that the same is
a trademark (or registered trademark) of Elan.

3.7.2.4                                           NitroMed shall not use the Elan Trademark in any way which might
materially prejudice its distinctiveness or validity or the goodwill of Elan
therein.

3.7.2.5                                           NitroMed shall not use in the Territory any trademarks or trade names so
resembling the Elan Trademark as to be likely to cause confusion or deception.

3.7.2.6                                           Elan shall, at its sole discretion and expense, file and prosecute
applications to register and maintain registrations of the Elan Trademark in
the Territory.

3.7.2.7                                           Elan will be entitled to conduct all enforcement proceedings relating to
the Elan Trademark and shall at its sole discretion decide what action, if any,
to take in respect of any infringement or alleged infringement of the Elan
Trademark or passing-off or any other claim or counter-claim brought or
threatened in respect of the use or registration of the Elan Trademark.  Any such proceedings shall be conducted at
Elan’s expense and for its own benefit.

4.                                           NON-COMPETITION

4.1.                                   NitroMed.  Following the earlier of (i) achievement of a
pharmacokinetic profile for Product (assessing Cmax (maximum concentration) and
AUC (area under the curve) criteria within 80-125% of mean data) consistent
with that of BiDil administered three times daily (at 6 hour intervals) or (ii)
achievement of such other pharmacokinetic profile for the Product as may be
defined by the FDA, NitroMed shall not, and shall procure that its Affiliates
do not develop, market or sell any oral dosage formulation containing the
Compound other than (a) the Product, (b) BiDil in its current formulation or
any other immediate release formulation, (c) the current formulation of BiDil
or any other immediate

 16
 

release
formulation of BiDil in combination with any other compound in the Territory
and (d) any such formulation containing hydralazine as its sole active
ingredient,  during the Term; (provided,
however, that to the extent EEA laws and regulations specifically so require,
this restriction shall apply in the EEA for a period of five years beginning on
the date of First Commercial Sale of the Product in the EEA, or such other
maximum time period as EEA laws and regulations shall specifically so require).

4.2.                                   Elan.  Elan shall not license, develop, manufacture
or sell any oral dosage formulation (i) applying the Elan Intellectual Property
to the Compound, (ii) applying the Elan Improvements to either constituent
ingredient of the Compound as the sole active ingredient or (iii) applying the
Elan Intellectual Property to hydralazine as the sole active ingredient: in the
Territory during the Term;(provided, however, that to the extent EEA laws and
regulations specifically so require, this restriction shall apply in the EEA
for a period of five years beginning on the date of First Commercial Sale of
the Product in the EEA, or such other maximum time period as EEA laws and
regulations shall specifically so require).

5.                                           REGISTRATION, MARKETING AND THE PROMOTION OF THE
PRODUCT

5.1.                                   Regulatory Matters.  Except as specified otherwise in this
Agreement or in the Development Agreement and/or Supply Agreement, NitroMed
shall own and shall be responsible for filing for and maintaining all necessary
Regulatory Approvals and any necessary export or import licenses in relation to
the Compound and/or the Product.

5.2.                                   Diligent Efforts.  NitroMed shall use commercially reasonable
efforts, and at least the same level of effort as used by it with other similar
products of similar sales potential:

5.2.1                             to obtain Regulatory Approvals for the Product; and

5.2.2                             to market and promote the Product with a view to achieving maximum
market impact and concentration throughout the Territory.

5.3.                                   Reporting: NitroMed shall promptly
notify Elan in writing of (i) the submission date of all Regulatory
Applications; (ii) the date that such submissions are accepted for filing by
the relevant regulatory authority and (iii) the date of all Regulatory
Approvals.

5.4.                                   Promotional Campaigns  NitroMed shall:

5.4.1                             control and be responsible for the content and format of each
promotional campaign to be submitted to the relevant Governmental Authority but
shall inform Elan thereof in a reasonably detailed manner;

5.4.2                             within a reasonable period of time after the filing of the first
Regulatory Application in the Territory, NitroMed will outline to Elan the
structure of the promotional activities to be carried out by NitroMed for the
period up to the first launch of the Product and for a period of one year
thereafter;

5.4.3                             prior to the launch of the Product, communicate with Elan regarding its
objectives for  the Product in the
Territory.

5.5.                                   Meetings. Following the first
Regulatory Approval of the Product, the parties shall meet as often as
reasonably requested by the other (not more than once per calendar quarter). At

 17
 

such
meetings NitroMed shall report on the ongoing sales performance of the Product
in each country of the Territory, including overviews of marketing, promotional
and educational campaigns, information on performance of the Product in the market
and plans for the next quarterly period. Such meetings may be held by
telephone. If held in person, each party shall be responsible for its own costs
in respect of travel and accommodation expenses in attending such meetings.

5.6.                                   Required Markings.  All trade packaging and marketing materials
shall:

5.6.1                             to the extent permitted by law, include due acknowledgement that the
Product is manufactured by an Affiliate of Elan; and

5.6.2                             have marked representative patent number(s) including that of the formulation
patent in respect of the Elan Patents on all Product, or otherwise reasonably
communicate to the trade the existence of any Elan Patents for the countries
within the Territory in such a manner as to ensure compliance with, and
enforceability under, applicable laws.

5.7.                                   Launch.  NitroMed shall effect the first full scale
national commercial launch of the Product:

5.7.1                             in each Major Market, within [**] days after the Regulatory Approval in
that Major Market is obtained, subject to the timely receipt of launch stocks;
and

5.7.2                             in each of the other countries of the Territory, within [**] days after
the relevant Regulatory Approval in that country is obtained, subject to the
timely receipt of launch stocks.

6.                                           PRODUCTION LICENSE  

6.1.                                   Qualification.  NitroMed shall be entitled at its own expense
to qualify another facility as an alternate to supply of the Product by Elan or
its affiliates  (“Alternate
Source”), subject to the following provisions if the operator of
NitroMed’ desired facility is not NitroMed or an Affiliate of NitroMed:

6.1.1                             The facility shall be subject to the written approval of Elan, which
shall not be unreasonably withheld.

6.1.2                             The operator of the facility (the “Manufacturer”)
shall have undertaken to Elan, in terms reasonably satisfactory to Elan, to
protect the confidentiality of Elan’s manufacturing processes related to
Product and not use them for any other purpose.

6.2.                                   Technology Transfer Program.  In the event that NitroMed wishes to qualify
an Alternate Source, it shall so notify Elan in writing.  Thereafter, the parties shall negotiate in
good faith a technology transfer program (“Tech Transfer  Program”) consistent with this Agreement.  Elan may specify that its activities shall be
carried out by Elan or another Affiliate. 
Such Tech Transfer Program shall have due regard to the commercial
interests of Elan in relation to the manufacture of the Product and other
products, and shall be such that the Program will be completed with due
dispatch but without undue disruption to Elan’s   other commercial activities.

 18
 

6.3.                                   Assistance.  At NitroMed’s request, it shall be part of
the Tech Transfer Program that Elan shall use commercially reasonable efforts
to assist in qualifying the Alternate Source as an alternative site of
manufacture of the Product.  Pursuant to
this obligation, Elan shall:

6.3.1                             provide NitroMed or the Manufacturer (at NitroMed’s request) with any
information necessary to manufacture the Product;

6.3.2                             provide to NitroMed or the Manufacturer (at NitroMed’s request) the
documentation constituting the required material support, more particularly
practical performance advice, shop practice, specifications as to materials to
be used and control methods;

6.3.3                             assist NitroMed and/or the Manufacturer (at NitroMed’s request) with the
working up and use of the technology and with the training of Manufacturer’s
personnel to the extent which may reasonably be necessary in relation to the
manufacture of the Product by the Manufacturer. 
In this regard, Elan will receive the NitroMed’s and/or Manufacturer’s
scientific staff, as applicable, in its premises for certain periods, the term
of which will be agreed by the parties; and

6.3.4                             comply with the other obligations and responsibilities of Elan relating
to technology transfer to the Alternate Source, as set forth in the Tech
Transfer Program.

6.4.                                   NitroMed Obligations.  NitroMed shall comply with its obligations
and responsibilities set forth in the Tech Transfer Program.

6.5.                                   Technological Competitors.  Under no circumstances may the Manufacturer
be a Technological Competitor.  In the
event of a Manufacturer becoming a Technological Competitor or an Affiliate of
a Technological Competitor, all manufacturing rights of the Manufacturer shall
cease.  In such event, Elan shall on
request negotiate in good faith terms for qualifying and using a different
Alternate Source.

6.6.                                   Supply of Product from Alternate Source.  NitroMed may acquire from the Alternate
Source only such quantities of Product as are permitted to be so sourced under
the terms of the Supply Agreement, as amended from time to time.

7.                                           FINANCIAL PROVISIONS

7.1.                                   License Milestone Payments.  In consideration of the grant of the Elan
License, NitroMed shall pay to Elan the following non-refundable amounts:

7.1.1                             a milestone payment of US$[**] dollars) upon the execution of this
Agreement by both NitroMed and Elan;

7.1.2                             a milestone payment of US$[**] dollars) upon the delivery by EDDI of
clinical supplies of the Product for the first pivotal study of the Product
(Phase II or Phase III) or, if earlier, upon the License Milestone Payment
referred to in Clause 7.1.3 becoming payable (in addition to such payment);

7.1.3                             a milestone payment of US$[**] dollars) upon the first filing of a DMF
supportive of a Regulatory Application, provided that Elan is not notified by
the FDA or its equivalent in another country within thirty (30) days of filing
of the rejection thereof, in which

 19
 

case such milestone payment shall be payable
upon notice of acceptance of such DMF filing, or if earlier, Regulatory
Approval of the Product in that country;

7.1.4                             a milestone payment of US$[**] dollars) upon the first Regulatory
Approval of the Product.

(the payments described in Clauses 7.1.1 to 7.1.4
being “License Milestone Payments”).

The License Milestone Payments shall be payable in
respect of each of the once-daily and twice —daily formulations of the Product,
as and when applicable, but in no circumstances will such License Milestone
Payments be payable more than twice each.

7.2.                                   Not Subject to Future Performance Obligations.  The License Fee and the License
Milestone Payments shall not be subject to future performance obligations of
Elan to NitroMed and shall not be applicable against future services provided
by Elan to NitroMed.

The terms of Clause 7.1 relating to the License Fee
and License Milestone Payments are independent and distinct from the other
terms of this Agreement.

7.3.                                   Royalty on Sales.  In further consideration of the grant of the
Elan License, NitroMed shall pay to Elan a non-refundable royalty calculated by
reference to the table set out below, being the royalties within the bands of
aggregate Net Sales below for the applicable formulation as from the date of
its first commercial sale at the corresponding royalty percentage below:

	
  Formulation

  	
  Annual Net Sales Bands

  	
  Applicable Royalty Rate

  
	
   

  	
   

  	
   

  
	
  Once-daily

  	
  First US$[**]

  	
  [**]% of Net Sales

  
	
   

  	
   

  	
   

  
	
   

  	
  Next US$[**]

  	
  [**]% of Net Sales

  
	
   

  	
   

  	
   

  
	
   

  	
  Increments above US$[**]

  	
  [**]% of Net Sales

  
	
   

  	
   

  	
   

  
	
  Twice-daily

  	
  First US$[**]

  	
  [**]% of Net Sales

  
	
   

  	
   

  	
   

  
	
   

  	
  Next US$[**]

  	
  [**]% of Net Sales

  
	
   

  	
   

  	
   

  
	
   

  	
  Increments above US$[**]

  	
  [**]% of Net Sales

  

 

By way of example for
the purposes of clarifying the intention of the parties, if: (a) prior to
commencement of a given calendar quarter, aggregate Net Sales to date are $[**]
for the once daily formulation and $[**] for the twice daily formulation; and
(b) Net Sales in the calendar quarter are $[**] for each formulation, the
royalty payable shall be:

Once-daily —first
band:  ($[**] - $[**]) x [**]%

PLUS

Once-daily —second
band:  ($[**] - ($[**] - $[**]) x [**]%

 20
 

PLUS

Twice-daily — first
band:  $[**] x [**]%

= $[**] + $[**] +
$[**] = $[**]

7.4.                                   Bundling.  In the event that NitroMed or a permitted
sub-licensee shall sell the Product together with other products to third
parties (by the method commonly known in the pharmaceutical industry as “bundling”),
the price attributable to the Product shall be discounted by reference to the
average price of “arms length” sales by no more than the discount applied to
any other product with which it is bundled.

7.5.                                   Method of calculation of fees.  The parties acknowledge and agree that the
methods for calculating the royalties and fees under this Agreement are for the
purposes of the convenience of the parties, are freely chosen and not coerced.

8.                                           PAYMENTS, REPORTS AND AUDITS  

8.1.                                   Records.  NitroMed shall keep true and accurate records
of gross sales of the Product, the items deducted from the gross amount in
calculating the Net Sales, the Net Sales and the royalties payable to Elan
under Clause 7.3.  NitroMed shall deliver
to Elan a written estimated statement (the “Estimated
Statement”) thereof within 45 days following the end of each
calendar quarter, (or any part thereof in the first or last calendar quarter of
this Agreement) for such calendar quarter, with a written final statement (the “Final Statement”) to be delivered by NitroMed to Elan no
later than 75 days following the end of each calendar quarter.  The Estimated Statement shall outline on a
country-by-country basis, the calculation of the Net Sales from gross revenues
during that calendar quarter, the aggregate Net Sales of each formulation from
its first commercial sale to the end of that calendar quarter, the applicable
percentage rate, and a computation of the sums due to Elan.  Following the delivery of the Final Statement
for each calendar quarter, the parties shall reconcile the Estimated Statement
and the Final Statement.  If the Final
Statement reports a greater amount of royalties due than were initially
reported in the Estimated Statement, NitroMed shall pay the difference to
Elan.  If the Final Statement reports a
lesser amount of royalties due that was initially reported in the Estimated
Statement, Elan shall refund the difference to NitroMed.  In either case, the additional amount due to
Elan or the refund due to NitroMed shall be paid by the other party, as the
case may be, within 30 days of delivery of the Final Statement.  The parties’ financial officers shall agree
upon the precise format of the Estimated Statement and the Final Statement.

8.2.                                   Foreign Currency.  Net Sales of the Product based on sales
amounts in a currency other than US$ shall be converted to US$ on the basis of
the median exchange rate in effect for the purchase of US$ with such foreign
currency quoted in the Wall Street Journal (or comparable publication if not
quoted in the Wall Street Journal) at the closing of the Business Days during
the calendar quarter in question, prior to being included in the Estimated
Statement or the Final Statement.

8.3.                                   VAT.  All payments to Elan are exclusive of any
applicable value added or any other sales tax for which NitroMed will be
additionally liable if applicable.

 

 21

 

8.4.                                   Taxes.  If NitroMed is required by law to pay or
withhold any income or other taxes on behalf of Elan with respect to any monies
payable to Elan under this Agreement:

8.4.1                             NitroMed shall deduct them from the amount of such monies due;

8.4.2                             any such tax required to be paid or withheld shall be an expense of and
borne solely by Elan;

8.4.3                             NitroMed shall promptly provide Elan with a certificate or other
documentary evidence to enable Elan to support a claim for a refund or a
foreign tax credit.

8.5.                                   Double Tax Co-operation.  Elan and NitroMed agree to co-operate in all
respects necessary to take advantage of any double taxation agreements or
similar agreements as may, from time to time, be available in order to enable
NitroMed to make such payments to Elan without any deduction or withholding.

8.6.                                   Timing.  Payments to Elan shall be made as follows:

8.6.1                             each of the License Milestone Payments shall be paid within 45 days of
the achievement of the relevant event to which they relate; and

8.6.2                             payment of royalties shall be made upon provision of the Estimated
Statement (subject to applicable further payment or refund in the event the
Final Statement reports a greater or lesser amount of royalties due, as the
case may be).

8.7.                                   Manner of Payment.  All payments due hereunder shall be made in
US$ to the designated bank account of Elan in accordance with such timely
written instructions as Elan shall from time to time provide.

8.8.                                   Interest.  Without prejudice to Elan’s other remedies
hereunder, NitroMed shall pay interest to Elan on sums not paid to Elan on the
date on which payment should have been made pursuant to the applicable
provisions of this Agreement (“Due Date”) over
the period from the Due Date until the date of actual payment (both before and
after judgement) at the Prime Rate publicly announced by Morgan Guaranty Trust
Company of New York at its principal office on the Due Date (or next to occur
Business Day, if such date is not a Business Day) plus 5%, such interest to
payable on demand from time to time and compounded monthly.  Interest shall be payable both before and
after judgment.

8.9.                                   Audit.  For the 180 day period following the close of
each calendar year of the Agreement, NitroMed will, in the event that Elan
reasonably requests such access, provide Elan’s independent certified
accountants (reasonably acceptable to the other party) with access, during
regular business hours and subject to the confidentiality provisions as
contained in this Agreement, to NitroMed’s books and records relating to the
Product, solely for the purpose of verifying the accuracy and reasonable
composition of the calculations under this Agreement for the calendar year then
ended.

8.10.                             Correction of Discrepancies.  In the event of a discovery of a discrepancy,
a correcting payment shall be made forthwith by NitroMed to Elan or Elan to
NitroMed, as the case may be, together with interest at the rate specified in
Clause 8.8.  If the discrepancy exceeds
5% of the amount due or charged by a party for any period and provided that the
amount of the

 22
 

discrepancy
exceeds US$25,000, then additionally the cost of such accountants shall be
borne by the audited party.

9.              DURATION AND TERMINATION

9.1.                                   Initial Term.  This Agreement shall be deemed to have come
into force on the Effective Date and, subject to the rights of termination
outlined in this Clause 9 and the provisions of applicable laws, will expire:

9.1.1                             In the US:  on (a) the 20th
anniversary of the date of the first In Market sale of the Product; or (b) the
expiration of the last-to-expire patent for the Product listed in the Food and
Drug Administration’s “Orange Book”; and

9.1.2                             Elsewhere in the Territory, on a country by country basis: on (a) the 20th anniversary of the date of the
first In Market sale of the Product in the country concerned; or (b)  the expiration of the life of the last to
expire patent included in the Elan Intellectual Property in that country;

in each case whichever date is later to occur (the “Initial Term”).

9.2.                                   Continuation.  At the end of the Initial Term, the Agreement
shall continue automatically for rolling 3 year periods thereafter, unless the
Agreement has been terminated by either of the parties by serving 1 year’s
written notice on the other party immediately prior to the end of the Initial
Term or any such additional 3 year period.

9.3.                                   Breach / Insolvency.  In addition to the rights of termination
provided for elsewhere in this Agreement, either party will be entitled
forthwith to terminate this Agreement by written notice to the other party if:

9.3.1                             that other party commits a material breach of any of the provisions of
this Agreement, and fails to cure the same within [**] days after receipt of a
written notice from another party hereto giving full particulars of the breach
and requiring it to be remedied; provided, that if the breaching party has
proposed a course of action to cure the breach and is acting in good faith to
cure same but has not cured the breach by the [**] day, such period shall be
extended by such period as is reasonably necessary to permit the breach to be
cured, provided that such period shall not be extended by more than 90 days,
unless otherwise agreed in writing by the parties;

9.3.2                             that other party goes into liquidation under the laws of any applicable
jurisdiction (except for the purposes of amalgamation or reconstruction and in
such manner that the company resulting therefrom effectively agrees to be bound
by or assume the obligations imposed on that other party under this Agreement);

9.3.3                             a receiver, administrator, examiner, trustee or similar officer is
appointed over all or substantially all of assets of that other party under the
laws of any applicable jurisdiction; or

9.3.4                             any proceedings are filed or commenced by that other party under
bankruptcy, insolvency or debtor relief laws, or anything analogous to any of
the foregoing under the laws of any applicable jurisdiction occurs in relation
to that other party.

 23
 

9.4.                                   Additional Elan Rights.  In further addition to the rights and
termination provided for elsewhere in this Agreement, Elan shall be entitled to
terminate this Agreement with respect to any particular country in the
Territory in the event that NitroMed, in such particular country:

9.4.1                             fails to use commercially reasonable efforts to develop and promote the
Product in any Major Territory;

9.4.2                             notifies Elan that it does not wish to commercialise the Product in a
Major Market or does not notify Elan within [**] months of the later of the
completion of the R&D Program or the conclusion of the Phase III clinical
trial program as regards a Major Market that it wishes to advance to
commercialisation of the Product; or

9.4.3                             fails to obtain Regulatory Approval in a Major Market in Europe within
[**] months of receiving marketing authorisation in that country, or under the
mutual recognition procedure, as the case may be, unless such failure is due to
circumstances beyond NitroMed’s control (including governmental action,
inaction and / or delay).

Elan
agrees that, prior to exercising its termination rights under this Clause 9.4,
it shall (i) consult with NitroMed, and (ii) grant extensions to the above
timelines (the duration of which shall be at Elan’s sole discretion), provided
Elan has been in receipt of information from NitroMed that has demonstrated (either
pursuant to the meetings referred to in Clause 5.5 or otherwise) that such
extensions are reasonably required.

9.5.                                   Cross-Termination.  This Agreement shall automatically terminate
upon the termination of the Development Agreement or the termination of the
Supply Agreement.  For the purposes of
Clause 10, such a termination of this Agreement shall be treated:

9.5.1                             if termination of the Development Agreement or Supply Agreement is on
the ground of a material breach by NitroMed or EDDI / EHI (as the case may be),
as if this Agreement were terminated on the ground of a material breach by
NitroMed or Elan, as the case may be; and

9.5.2                             if termination of the Development Agreement or the Supply Agreement is
on the ground of the insolvency of NitroMed or EDDI / EHI (as the case may be),
as if this Agreement were terminated on the ground of the insolvency of
NitroMed or Elan, as the case may be.

9.6.                                   Additional NitroMed Termination Rights.  In further addition to the rights and
termination provided for elsewhere in this Agreement, NitroMed shall be
entitled to terminate this Agreement in the event of a Technical Failure.

10.            CONSEQUENCES OF TERMINATION

10.1.                             General Consequence.  Upon exercise of those rights of termination
specified in Clause 9 or elsewhere in this Agreement, this Agreement shall,
subject to Clause 10.2, automatically terminate forthwith and be of no further
legal force or effect.

10.2.                             Specific Consequences.  Upon termination of the Agreement by either
party, or upon termination by Elan of a license for a particular country under
Clause 9.4, the following shall be the consequences relating to the Territory
or the particular country, as applicable:

 24
 

10.2.1                       any sums that were due from NitroMed to Elan under the provisions of
this Agreement prior to its termination or expiry shall be paid in full within
14 days of termination of this Agreement and Elan shall not be liable to repay
to NitroMed any amount of money paid or payable by NitroMed to Elan up to the
date of the termination of this Agreement;

10.2.2                       all representations and warranties shall insofar as are appropriate
remain in full force and effect;

10.2.3                       the provisions of this Agreement regarding with respect to
confidentiality and non-use of materials or confidential information shall remain
in effect for a further period of 7 (seven) years.

10.2.4                       the rights of inspection and audit shall continue in force for the
period referred to in the relevant provisions of this Agreement;

10.2.5                       the license granted by Elan to NitroMed of the Elan Trademark under
Clause 3.7.2.2 shall automatically terminate; provided, however, that NitroMed
may utilize such license for a period not exceeding six (6) months after
termination in connection with the sale of any inventory existing at the time
of termination subject to the provisions of this Agreement regarding royalties
in respect thereof;

10.2.6                       any other provision of this Agreement which, by its nature, is intended
to continue after termination, shall survive termination; and

10.2.7                       any sub-license granted under Clause 2.2 shall automatically terminate.

11.            WARRANTIES, INDEMNIFICATION AND LIABILITY

11.1.                             Elan Warranties.  Elan represents and warrants to NitroMed as
of the Effective Date, as follows:

11.1.1                       Elan has the right to enter into this Agreement and grant the Elan
License.

11.1.2                       There are no agreements between Elan and any third party that conflict
with the Elan License.

11.1.3                       Elan has not been notified of, nor to the best of its knowledge with no
special search are there any, infringement proceedings, actions, suits or
complaints pending against nor any outstanding injunctions, judgments, orders,
decrees, rulings or other charges against, Elan or any Affiliate of Elan in
connection with the Elan Patents, the Elan Technology or the Elan Know How in
the Territory that may affect the making, using, or selling of the Product.

11.1.4                       Elan has not been notified of any allegation by a third party that the
application of the Elan Patents, the Elan Technology or the Elan Know-How in
the Territory as it may concern the making, using, or selling of the Product
infringes the intellectual property rights of a third party, nor to the best of
its knowledge with no special search has any such allegation been made.

 25
 

11.2.                             NitroMed Warranties.  NitroMed represents and warrants to Elan as
of the Effective Date, as follows:

11.2.1                       NitroMed has the right to enter into this Agreement.

11.2.2                       There are no agreements between NitroMed and any third party that conflict
with this Agreement.

11.2.3                       NitroMed has not been notified of, nor to the best of its knowledge with
no special search are there any, infringement proceedings, actions, suits or
complaints pending against nor any outstanding injunctions, judgments, orders,
decrees, rulings or other charges against, NitroMed or any Affiliate of
NitroMed in connection with the NitroMed Patents or the NitroMed Know How in
the Territory that may affect the making, using, or selling of the Product.

11.2.4                       NitroMed has not been notified of any allegation by a third party that
the application of the NitroMed Patents or the NitroMed Know-How in the
Territory as it may concern the making, using, or selling of the Product
infringes the intellectual property rights of a third party, nor to the best of
its knowledge with no special search has any such allegation been made.

11.3.                             Mutual Indemnification.  Each of the parties shall indemnify and hold
harmless the other party against all Claims insofar as they arise out of any
breach by the first party of any of its obligations or warranties under this
Agreement or from the first party’s fraud or wilful misconduct.

11.4.                             Infringement Claims.  The parties acknowledge that Clause 3.4
contains the parties’ full agreement as regards liability for Infringement
Claims, save to the extent that Clause 3.4 incorporates other provisions of
this Agreement by specific cross-reference.

11.5.                             Indemnification (Medical Claims). NitroMed
shall indemnify Elan against all Claims made or brought against Elan seeking
damages for personal injury (including death) and/or for the cost of medical
treatment, caused by or attributed to the Product, but without prejudice to any
right of indemnification NitroMed may have against EDDI or EHI under the
Development Agreement or the Supply Agreement respectively.

11.6.                             Sub-licensees.  With reference to Clause 2.2.5, NitroMed
shall indemnify and hold harmless Elan to the extent that any Claims arise out
of any such acts or omissions of any sub-licensee.

11.7.                             Conduct of Claims.  Subject to Clause 11.8, the party seeking an
indemnity shall:

11.7.1                       fully and promptly notify the other party of any claim or proceedings,
or threatened claim or proceedings;

11.7.2                       permit the indemnifying party to take full control of such claim or
proceedings, with counsel of the indemnifying party’s choice, provided that the
indemnifying party shall reasonably and regularly consult with the indemnified
party in relation to the progress and status of such claim or proceedings;

11.7.3                       co-operate in the investigation and defense of such claim or
proceedings; and

 26
 

11.7.4                       take all reasonable steps to mitigate any loss or liability in respect
of any such claim or proceedings.

The indemnifying party may settle a Claim on terms
which provide only for monetary relief and do not include any admission of
liability.  Save as aforesaid, neither
the indemnifying party nor the party to be indemnified shall acknowledge the
validity of, compromise or otherwise settle any Claim without the prior written
consent of the other, which shall not be unreasonably withheld.

11.8.                             Pursuant to the procedure set out in Clause 3.5 and the monetary limits
set out therein, NitroMed may settle an Infringement Claim of the type referred
to therein on terms which provide only for monetary relief and/or the grant by
the plaintiff in such Infringement Claim of a license solely relating to the
Product and not to any other product and do not include any admission of
liability, infringement, or invalidity or unenforceability of any of the Elan
Intellectual Property.  Save as aforesaid, neither Elan nor NitroMed shall
acknowledge the validity of, compromise or otherwise settle any such
Infringement Claim without the prior written consent of the other, which shall
not be unreasonably withheld.

11.9.                             Exclusion of Implied Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, NITROMED ACKNOWLEDGES THAT THE ELAN LICENSE IS GRANTED ON AN “AS IS”
BASIS, WITHOUT REPRESENTATION OR WARRANTY WHETHER EXPRESS OR IMPLIED INCLUDING
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE EXPRESSLY
DISCLAIMED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS.

11.10.                       Exclusion of Consequential Loss.  WITHOUT PREJUDICE TO THE OBLIGATION OF EITHER
PARTY TO INDEMNIFY THE OTHER IN RESPECT OF CLAIMS BY A THIRD PARTY,
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ELAN AND NITROMED
SHALL NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION OR WARRANTY,
CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS
OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL OR PUNITIVE LOSS
OR DAMAGE (WHETHER FOR LOSS OF CURRENT OR FUTURE PROFITS, LOSS OF ENTERPRISE
VALUE OR OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE
PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE.

11.11.                       Extension of Indemnification.  Where this Agreement provides for the
indemnification of a party to this Agreement or for the limitation of a party’s
liability, such indemnification and/or limitation (as the case may be) shall
also apply for the benefit of such party’s Affiliates and the employees,
officers, directors and agents of any of them, acting in such capacity.

11.12.                       Inherent Risk.  It is hereby acknowledged that there are
inherent uncertainties involved in the development and registration of
pharmaceutical products and such uncertainties form part of the business risk
involved in undertaking the form of commercial collaboration outlined in this
Agreement.  Accordingly, Elan and
NitroMed shall have no liability to each other as a result of the failure of
the Product to obtain Regulatory Approval, and Elan will

 27
 

have
no liability to NitroMed as a result of any failure or delay of the Product to
achieve the Product Specifications (as defined in the Development Agreement) or
one or more of the milestones set out in the R&D Program and/or to obtain
Regulatory Approval in one or more countries of the Territory.  The foregoing shall not derogate from the
responsibilities and obligations of each of Elan and NitroMed pursuant to the
terms of this Agreement.

11.13.                       Insurance.  Throughout the Term, and for a period of five
(5) years thereafter, each party shall maintain comprehensive general business
liability insurance coverage, with minimum limits of $10,000,000 per occurrence
and $10,000,000 annual aggregate of all claims.  In addition, from and after the
later of NitroMed’s commercial launch of the Product, during the Term, and for
a period of one (1) year thereafter, each party shall maintain product
liability insurance coverage, with minimum limits of $10,000,000 per occurrence
and $10,000,000 annual aggregate of all claims.

Each
party shall provide the other party with a certificate from the insurance
company verifying the above and shall notify the other party in writing at
least 30 days prior to the expiration or termination of such coverage.

12.            CONFIDENTIALITY

12.1.                             Confidential Information:  The parties agree that it will be necessary,
from time to time, to disclose to each other confidential and proprietary
information, including without limitation, inventions, trade secrets,
specifications, designs, data, know-how and other proprietary information
relating to the Product and the processes, services and business of the
disclosing party.

The foregoing shall be referred to collectively
as “Confidential Information”.

12.2.                             Exclusion.  Confidential Information shall be deemed not
to include:

12.2.1                       information which is in the public domain prior to disclosure;

12.2.2                       information which is made public through no breach of this Agreement;

12.2.3                       information which is independently developed by a party without
reference to the other party’s Confidential Information, as evidenced by such
party’s written records; or

12.2.4                       information that becomes available to a receiving party on a
non-confidential basis, whether directly or indirectly, from a source other
than the other party hereto, which source did not acquire this information on a
confidential basis.

12.3.                             Use of Confidential Information.  Any Confidential Information disclosed by the
disclosing party shall be used by the receiving party exclusively for the
purposes of fulfilling the receiving party’s obligations, or exercising the
receiving party’s rights, under this Agreement and for no other purpose.

12.4.                             Non-Disclosure.  Except as otherwise specifically provided in
this Agreement, each party shall disclose Confidential Information of the other
party only to those employees, representatives and agents requiring knowledge
thereof in connection with fulfilling the party’s obligations under this
Agreement, and not to any other third party.

 28
 

12.5.                             Obligation to Inform.  Each party further agrees to inform all such
employees, representatives and agents of the terms and provisions of this
Agreement relating to Confidential Information and to obtain their agreement to
confidentiality obligations no less onerous in any respect than those set forth
herein as a condition of receiving Confidential Information.

12.6.                             Care.  Each party shall exercise the same standard
of care as it would itself exercise in relation to its own confidential
information (but in no event less than a reasonable standard of care) to
protect and preserve the proprietary and confidential nature of the
Confidential Information disclosed to it by the other party.

12.7.                             Return of Information.  Upon termination or expiration of this
Agreement, each party shall promptly, upon request of the other party, return
all documents and any copies thereof containing Confidential Information
belonging to, or disclosed by, such other party, save that it may retain one
copy of the same solely for the purposes of ensuring compliance with this
Clause 12.

12.8.                             Attribution.  Any breach of this Clause 12 by any person
informed by one of the parties is considered a breach by the party itself.

12.9.                             Acknowledgment.  The parties agree that the obligations of
this Clause 12 are necessary and reasonable in order to protect the parties’
respective businesses.  The parties
further agree that monetary damages may be inadequate to compensate a party for
any breach by the other party of its covenants and agreements with respect to
confidentiality, and that each party shall be entitled to seek injunctive or
other equitable relief against the threatened or continued breach of those
provisions, in addition to with any other remedy which may be available.

12.10.                       Compound Data.  For the purpose of demonstrating to third
parties the benefits of the Elan Technology, Elan shall be entitled, subject to
the prior written consent of NitroMed, to disclose to third parties the
Compound Data provided that Elan does not disclose NitroMed’s name or the name
of the Compound. Prior to any such disclosure, Elan and NitroMed shall agree on
a mutually acceptable scope of disclosure for the Compound Data. For the
avoidance of doubt, Elan shall be entitled, without the consent of NitroMed, to
disclose any portion of the Compound Data already in the public domain.

12.11.                       Announcements.  No announcement or public statement
concerning the existence, subject matter or any term of this Agreement, or its
performance, shall be made by or on behalf of any party without the prior
written approval of the other, such approval not to be unreasonably withheld or
delayed.  Notwithstanding any provision
in this Agreement to the contrary, following the initial disclosure relating to
the terms of this Agreement on a Form 8-K and an application for confidential
treatment filed with the U.S. Securities and Exchange Commission (on both of
which the parties shall collaborate), the parties may make such announcements
or public statements concerning the existence, subject matter or any term of
this Agreement to the extent required by applicable law or regulation
(including, without limitation, any requirements of any stock exchange, Nasdaq
or the U.S. Securities and Exchange Commission); provided, however, that
neither party shall, without the consent of the other party, disclose any term
which remains confidential pursuant to the confidential treatment application
filed with the U.S. Securities and Exchange Commission.

 29
 

12.12.                       Required Disclosures.  A party (the “Disclosing
Party”) will be entitled to make an announcement or public statement
concerning the existence, subject matter or any term of this Agreement, or to
disclose Confidential Information that the Disclosing Party is required to make
or disclose pursuant to:

12.12.1                 a
valid order of a court or Governmental Authority; or

12.12.2                 any
other requirement of law or any securities or stock exchange;

provided that if the Disclosing Party becomes legally
required to make such announcement, public statement or disclosure hereunder,
the Disclosing Party shall give the other party prompt notice of such fact to
enable the other party to seek a protective order or other appropriate remedy
concerning any such announcement, public statement or disclosure, including
confidential treatment and/or appropriate redactions.

The Disclosing Party shall fully co-operate with the
other party in connection with that other party’s efforts to obtain any such
order or other remedy.  If any such order
or other remedy does not fully preclude announcement, public statement or
disclosure, the Disclosing Party shall make such announcement, public statement
or disclosure only to the extent that the same is legally required.

13.            MISCELLANEOUS PROVISIONS

13.1.                             Force Majeure.  Neither party shall be liable for failure or
delay in the performance of any of its obligations under this Agreement if such
failure or delay results from Force Majeure, but any such failure or delay
shall be remedied by such party as soon as practicable.

13.2.                             Assignment and Change of Control.

13.2.1                       Elan shall be entitled, without prior consent, to assign or subcontract,
in whole or in part, its rights and obligations under this Agreement to an
Affiliate or in connection with the sale or transfer of all or substantially
all of the Elan Intellectual Property provided that Elan fully compensates
NitroMed for any adverse tax consequence that may arise from the assignment.

13.2.2                       NitroMed shall be entitled, without prior consent, to assign or
subcontract, in whole or in part, its rights and obligations under this
Agreement to an Affiliate or to a third party in connection with the sale and
transfer of all NitroMed’s business assets relating to this Agreement provided
that:

(i)                                     the assignment does not grant manufacturing rights to a Technological
Competitor;

(ii)                                  NitroMed fully compensates Elan for any adverse tax consequences that
may arise from the assignment; and

(iii)                               where the assignee is a Technological Competitor, Elan shall have the
right to refuse to grant its consent to the assignment unless the conditions of
Clause 2.2.1 (a) to (d), as applied to assignment to a Technological
Competitor, have been satisfied.

 30
 

13.2.3                       Except as provided for in Clauses 13.2.1 and 13.2.2, this Agreement may
not be assigned by a party without the prior written consent of the other,
which shall not be unreasonably withheld or delayed.

13.2.4                       Elan shall be entitled to terminate this Agreement by notice in writing
to NitroMed in the event a Technological Competitor obtains Control of NitroMed
during the Term of this Agreement unless the conditions set out in Clause
2.2.1(a) to (d), as applied to a Technological Competitor acquiring Control,
have been satisfied. For the purposes of this Clause 13.2.4 “Control” will have
been obtained where a person or persons acting in concert acquire the direct or
indirect ownership of more than 50% of the issued  voting shares or 50% of the other voting
rights, if applicable, to elect directors.

13.3.                             Parties Bound.  This Agreement shall be binding upon and run
for the benefit of the parties, their successors and permitted assigns.

13.4.                             Relationship of the Parties.  In this Agreement, nothing shall be deemed to
constitute a partnership between the parties or make either party an agent for
the other, for any purpose whatsoever.

13.5.                             Entire Agreement.  This Agreement constitutes the entire
agreement and understanding between the parties with respect to its subject
matter, and except as otherwise expressly provided, supersedes all prior
representations, writings, negotiations or understandings with respect to that
subject matter.

Nothing
in this Clause 13.5 shall exclude any liability which any party would otherwise
have to the other party or any right which either of them may have to rescind
this Agreement in respect of any statements made fraudulently by the other
prior to the execution of this Agreement or any rights which either of them may
have in respect of fraudulent concealment by the other.

13.6.                             Severability.  If any provision in this Agreement is deemed
to be, or becomes invalid, illegal, void or unenforceable under applicable
laws, such provision will be deemed amended to conform to applicable laws so as
to be valid and enforceable, or if it cannot be so amended without materially
altering the intention of the parties, it will be deleted, but the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be impaired or affected in any way.

13.7.                             Further Assurance.  Each party shall do and execute, or arrange
for the doing and executing of, each necessary act, document and thing
reasonably within its power to implement this Agreement.

13.8.                             Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute this Agreement.

13.9.                             Waivers.  A failure to exercise or delay in exercising
a right or remedy provided by this Agreement or by law does not constitute a
waiver of the right or remedy or a waiver of other rights or remedies.  No single or partial exercise of a right or
remedy provided by this Agreement or by law prevents further exercise of the right
or remedy or the exercise of another right or remedy.

 

 31

13.10.                     Variations.  No variation of this Agreement
shall be effective unless it is made in writing and signed by each of the
parties.

13.11.                     Notices.

13.11.1                A notice under or in
connection with this Agreement (a “Notice”)

(a) shall be in
writing; and

(b) may be delivered
personally or sent by first class post (and air mail if overseas) by any
internationally recognized overnight courier or by fax to the party due to
receive the Notice at its address set out below.

13.11.2                The address referred
to in Clause 13.12.1 is:

(a)           in the case of Elan:

	
  Address:

  	
  Elan Pharma
  International Limited

  
	
   

  	
  Monksland Industrial Estate

  
	
   

  	
  Athlone

  
	
   

  	
  Co. Westmeath

  
	
   

  	
  Ireland

  
	
   

  	
   

  
	
  Fax:

  	
  +353 9064 95402

  

 

Marked
for the attention of:  Vice President
& Legal Counsel

(b)           in the case of NitroMed:

	
  Address:

  	
  125 Spring Street

  
	
   

  	
  Lexington

  
	
   

  	
  MA 02421-7801

  
	
   

  	
  United States of America

  
	
   

  	
   

  
	
  Fax:

  	
  +1 781-274 8080

  

 

Marked for the attention of:  Vice President Finance

13.12.                     Set-off.  Each of the parties will be
entitled but not obliged to set-off against any amount of money payable to it
by the other party under this Agreement, any amount of money payable by it to
the other party under this Agreement.

13.13.                     Governing
Law and Jurisdiction:  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to its conflict of laws rules, and shall be subject to the exclusive
jurisdiction of the State and Federal Courts located in New York, New York.

***

 32
 

 

	
  SCHEDULE 1

  	
  TECHNOLOGICAL COMPETITORS OF ELAN

  
	
   

  

[**]

 33
 

SCHEDULE
2

KEY TERMS
FOR SUPPLY AGREEMENT

Capitalized terms
used and not otherwise defined in this Schedule shall have the meaning ascribed
to such term in the License Agreement.

1.               EHI shall supply
Product to NitroMed in the Territory for commercial supplies, subject to Clause
8 below.  EHI to use commercially
reasonable efforts to meet NitroMed supply requirements.

2.               EHI to own and be
responsible for (i) filing regulatory approvals in regard to Elan Technology,
(ii) DMFs that EHI or its Affiliates may file in respect of Elan Technology and
the application of Elan Technology as regards the Product and/or the
manufacture of Product, and (iii) all necessary manufacturing approvals for the
commercial manufacture of the Product. 
NitroMed to be responsible for filing for and maintaining all other
necessary Regulatory Approvals.

3.               EHI to supply
Product that conforms to agreed specifications and to all applicable laws and
regulations for supply and manufacturing, including cGMP, within the
Territory.  Product to be provided EXW in
defined packaging configuration (bulk or finished).  Product packaging to conform to
specifications agreed with and  approved
by the FDA or other relevant regulatory body in the Territory.

4.               Detailed
forecasting, ordering and delivery provisions to be negotiated in good faith
between the parties and to be fully set out in the Supply Agreement, the
foregoing to include (i) a provision that delivery periods for binding purchase
orders of Product shall be commensurate with the Product manufacturing lead
time and (ii) NitroMed shall be entitled to cancel any Purchase Order for
Product provided Elan is compensated by NitroMed for the non-recoverable cost
incurred in manufacturing the Product up to the date of notification of any
such cancellation plus the full margin that would otherwise have been earned by
Elan if the Product Purchase Order had not been cancelled. The parties agree
that during the agreed “launch period” the forecasting and ordering provisions
may differ to reflect the respective challenges for both parties during this
period.

5.               NitroMed shall in a
timely fashion review and approve proposed changes in advance of their
implementation specific to the Product manufacturing, testing, or controls
documentation which require prior Regulatory Authority approval.

6.               NitroMed to have
right to audit EHI and subcontractors relevant to the Product manufacturing and
testing in conformance with cGMPs no more than once per calendar year, or for
just cause provided in each case that reasonable advance notice is provided to
EHI.

7.               NitroMed to order
safety stock through agreed order and forecast procedures.  EHI shall not hold safety stock.

8.               NitroMed shall have
a Manufacturing License and the right to obtain Product from the Alternate
Source in the event of an EHI “serious failure to supply”, the meaning of such
term to be negotiated in good faith and defined in the Supply Agreement.  The cost of such technology transfer shall be
borne by NitroMed.   Otherwise NitroMed
may only source such quantities of Product from the Alternate Source as are necessary
to maintain its qualification.

 34
 

9.               Release and
rejection provisions reasonably acceptable to the parties, with EHI to have a
specified time to rectify the issue. NitroMed to be refunded where problem
cannot be rectified within specified time save where it is established that the
non-conformity is due to the negligent acts or omissions of NitroMed.

10.         NitroMed to be
responsible for coordinating any Product recall and ensuring that recalls are
conducted in a commercially reasonable manner. 
Costs of recall shall be borne by NitroMed unless the recall arises from
EHI’s failure to supply Product in accordance with agreed specifications or
cGMP or from the negligent acts or omissions of EHI in manufacturing the
Product.

11.         EHI responsible for
compliance to cGMP, applicable laws for supply and manufacture, and adherence
to specifications. NitroMed responsible for marketing and promotion and for
recalls and indemnification arising otherwise. Indemnification provisions will
correspond to such responsibilities.

12. NitroMed shall pay to
EHI a fixed sum per dosage unit for the Product, which such sum will be
specified in the Supply Agreement and shall be [**]%.  For purposes of this calculation, the cost of
manufacturing shall be as described in Schedule 3 and in accordance with US
GAAP. For the avoidance of doubt, EHI shall not include costs associated with [**].
On the second anniversary of the first Product launch date (or such other date
as may be agreed between the parties) the parties shall enter into good faith
negotiations to settle [**] for commercial supplies of Product. From the time
the price for commercial supplies is agreed as aforesaid, thereafter the price
for such commercial supplies of Product shall be as EHI notifies to NitroMed
from time to time provided that during the term of the Supply Agreement price
increases for commercial supplies of Product shall be limited to the [**], as
compared to the most recent price adjustment for Product.  In addition, if (i) the price EHI must pay
for the active ingredients (or other raw materials) used to manufacture the
Product increases by a percentage in excess of [**], (ii) additional regulatory
obligations are imposed on EHI by law or a Governmental Authority; or (iii) any
other price increase is required or agreed resulting from changes to Product
specifications, EHI may increase the price of the Product by [**].  The parties agree that NitroMed will be [**] on
the date of the License Agreement.  For
the avoidance of doubt, NitroMed [**] with the manufacture of the Product.

13.  NitroMed shall have audit rights in order to
verify EHI manufacturing costs, such audit to occur (i) in the first two years,
no more than twice per annum; and (ii) thereafter, no more than once per annum,
and upon reasonable advance notice to EHI.

14.       The
parties shall agree minimum volumes of product to be ordered by NitroMed under
the Supply Agreement, such minimum volumes to take effect [**] months after the
first launch of the Product. EHI shall ensure that sufficient capacity is
available during the term of the Supply Agreement to manufacture such minimum
volumes.  In the event that the actual
quantities of Product ordered by NitroMed fall below such minimum volumes,
NitroMed shall pay to EHI an annual capacity fee equal to [**]% of the
applicable price of shortfall of Product ordered for delivery in that
year.   Shortfall shall mean the amount,
if any, by

 35
 

which
in the calendar year in question the quantities of Product properly ordered is
less than the minimum volumes.   The
parties further agree that the Supply Agreement shall include a mechanism
whereby EHI shall be entitled to terminate the Supply Agreement  where there is a failure to meet minimum
volume requirements and subject to conditions (to include tech transfer to a
third party).  The parties further agree
that as part of the negotiations of the Supply Agreement there will be good
faith discussions on additional EHI termination rights in circumstances other
than failure to meet minimum volume requirements.

15.  Term of the
Supply Agreement will be the term of the License Agreement.

 

 36
 

SCHEDULE 3

Product Manufacturing Costs

The following costs are
Product Manufacturing Costs which are prepared by EHI.

1.                                      Direct
Materials

                                               Materials
used in the manufacturing process that are traced directly to the completed
product and include:

-                                            Inert
raw materials or excipients.

-                                            Active
substances/ingredients.

-                                            Packaging
components such as bottles, caps, labels, etc.

2.                                      Direct
Labor

                                               The cost
of employees engaged in production activities which are directly identifiable
with product costs.  Excludes
supervision, which is included in indirect labor, and production support
activities such as inspection, plant and equipment maintenance labor, and
material handling personnel.  Direct
Labor cost includes:

-                                            Base
pay, overtime, vacation and holidays, illness, personal with pay and shift
differential.

-                                            
Cost of employee fringe benefits such as health and life insurance, payroll
taxes, welfare, pension and profit sharing.

3.                                      Indirect
Manufacturing Costs

                                               Costs
which are ultimately allocated to product based on standard labor hours of the
operating departments.  These costs
include:

-                                            Indirect
Production Labor: Salaries of employees engaged in production labor which
are not classified as direct labor, including supervision, clerical, etc.

-                                            Costs
of Direct Labor:  Employees not
utilized for the manufacturing of product such as training, downtime and
general duties.

-                                            Indirect
Materials:  Supplies and chemicals
which are used in the manufacturing process and are not assigned to specific
products but are included in manufacturing overhead costs.  Includes supplies which are either common to
several products or for which direct assignment to products is not practical.

-                                            Utilities:  Expenses incurred for fuel, electricity and
water in providing power for production and other plant equipment.

 37
 

-                                            Maintenance
and Repairs:  Amount of expense
incurred in-house or purchased to provide services for plant maintenance and
repairs of facilities and equipment.

-                                            Other
Services:  Purchased outside services
and rentals such as the cost of security, ground maintenance, etc.

-                                            Depreciation:
Of plant (being manufacturing and laboratory premises and buildings and the
service, maintenance and renovation thereof) on the basis of a 40 year life and
equipment (being handling, storage, manufacturing, processing and testing
machinery and equipment) on the basis of a 10 year life utilizing the
straight-line method of calculation.

-                                            Insurance:  Cost of comprehensive and other insurance
necessary for the safeguard of manufacturing plant and equipment, and business
interruption.

-                                            Taxes:  Expense incurred for taxes on real and
personal property (manufacturing site, buildings, and the fixed assets of
equipment, furniture and fixtures, etc.). 
If manufacturing site includes other operations (marketing, research,
etc.), taxes are allocated on the basis of total real and personal property.

-                                            Cost
of Manufacturing Service Department such as:

•                                                 Packaging Engineering.

•                                                 Manufacturing Maintenance.

•                                                 Industrial Engineering.

•                                                 Receiving and Warehousing.

•                                                 Purchasing and Accounting.

•                                                 Inventory Management.

•                                                 Plant Materials Management.

•                                                 Central Weigh.

•                                                 Manufacturing Administration.

-                                            Allocation
Costs of Services Provided to Manufacturing including (where applicable):

•                                                 Cafeteria

•                                                 Personal Operations

•                                                 Health and Safety Services

•                                                 Division Engineering and Operations
Services

•                                                 Plant Services (housekeeping)

•                                                 Manufacturing Information Systems

•                                                 Plant Power

•                                                 Office of VP Manufacturing

 38
 

                                               Various
bases are used for allocating these costs to manufacturing operating
departments including headcount, square feet, metered utilities use, estimated
services rendered, EDP computer hours etc.

4.                                      Quality
Assurance Costs

                                               Direct
labor and indirect costs for Quality Assurance departments testing and approving
materials used in manufacturing and completed manufacturing batches and
finished products.  This includes all
manufacturing in-process testing and testing of finished materials.  Excluded from product costs are QA costs
related to research and development testing and testing which is allocated back
to appropriate manufacturing sites.

5.                                      Inventory
Carrying Costs

                                               Inventory
carrying costs which relate to personnel and warehousing, but excluding any
application of interest costs suffered as a result of carrying inventory.

 

 39
 

SIGNED

 

	
  /s/ Paul Breen

  	
   

  	
   

  
	
  Duly authorised for and on behalf of:

  	
   

  
	
  ELAN PHARMA INTERNATIONAL
  LIMITED

  	
   

  

 

 

SIGNED

 

	
  /s/ Kenneth M. Bate

  	
   

  	
   

  
	
  Duly authorised for and on behalf of:

  	
   

  
	
  NITROMED, INC.

  	
   

  

 

 

 

 

 40Exhibit 10.31

LEASE BY AND BETWEEN

THE REALTY ASSOCIATES
FUND VI, L.P.

AND

NITROMED, INC.

at

45-55 Hayden Avenue

Lexington, Massachusetts

Dated

February 23, 2007

The mailing, delivery or negotiation of this Lease
shall not be deemed an offer to enter into any transaction or to enter into any
relationship, whether on the terms contained herein or on any other terms.  This Lease shall not be binding upon Landlord
or Tenant, nor shall Landlord or Tenant have any obligations or liabilities
with respect thereto, or with respect to the premises, unless and until
Landlord and Tenant have signed counterparts and executed and delivered such
counterparts of this Lease to the other party. 
Until such execution and delivery of this Lease by Landlord and Tenant,
Landlord or Tenant may terminate all negotiation and discussion of the subject
matter hereof, without causes and for any reason, without recourse or
liability.

 

 

TABLE OF CONTENTS

	
  1.

  	
   

  	
  Basic Lease Provisions.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Premises

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Term

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Rent.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Security Deposit

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Permitted Use.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Maintenance, Repairs and Alterations.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Insurance.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Damage or Destruction.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Real and Personal Property Taxes.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Utilities.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Assignment and Subletting.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Default; Remedies.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Landlord’s Right to Cure Default; Payments by Tenant

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Condemnation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Vehicle Parking.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Broker’s Fee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Estoppel Certificate.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Financial Information

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Landlord’s Liability

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Indemnity

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Exemption of Landlord from Liability

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Hazardous Substances.

  	
   

  	
   

  

 

 i
 

 

	
  24.

  	
   

  	
  Intentionally Omitted.

  
	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Tenant Improvements

  
	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Subordination and Rights of Mortgagees.

  
	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Option to Extend

  
	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Landlord Reservations

  
	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Changes to Property

  
	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  Intentionally Omitted

  
	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  Holding Over

  
	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Landlord’s Access

  
	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Security Measures

  
	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Easements

  
	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Transportation Management

  
	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  Severability

  
	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Time of Essence

  
	
   

  	
   

  	
   

  
	
  38.

  	
   

  	
  Definition of Additional Rent

  
	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  Incorporation of Prior Agreements

  
	
   

  	
   

  	
   

  
	
  40.

  	
   

  	
  Amendments

  
	
   

  	
   

  	
   

  
	
  41.

  	
   

  	
  Notices

  
	
   

  	
   

  	
   

  
	
  42.

  	
   

  	
  Waivers

  
	
   

  	
   

  	
   

  
	
  43.

  	
   

  	
  Covenants

  
	
   

  	
   

  	
   

  
	
  44.

  	
   

  	
  Binding Effect; Choice of Law

  
	
   

  	
   

  	
   

  
	
  45.

  	
   

  	
  Attorneys’ Fees

  
	
   

  	
   

  	
   

  
	
  46.

  	
   

  	
  Auctions

  
	
   

  	
   

  	
   

  
	
  47.

  	
   

  	
  Signs

  
	
   

  	
   

  	
   

  
	
  48.

  	
   

  	
  Merger

  

 ii
 

 

	
  49.

  	
   

  	
  Quiet Possession

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  50.

  	
   

  	
  Authority

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  51.

  	
   

  	
  Conflict

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  52.

  	
   

  	
  Multiple Parties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  53.

  	
   

  	
  Interpretation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  54.

  	
   

  	
  Prohibition Against Recording

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  55.

  	
   

  	
  Relationship of Parties

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  56.

  	
   

  	
  Rules and Regulations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  57.

  	
   

  	
  Right to Lease

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  58.

  	
   

  	
  Intentionally Omitted

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  59.

  	
   

  	
  Intentionally Omitted

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60.

  	
   

  	
  Attachments

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  61.

  	
   

  	
  Costs Related to Tenant Requests

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  62.

  	
   

  	
  Confidentiality

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  63.

  	
   

  	
  Waiver Of Jury Trial

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  64.

  	
   

  	
  Access To Premises

  	
   

  	
   

  

 iii
 

INDEX
TO DEFINED TERMS

	
  Term

  	
   

  	
  Section

  
	
  Alterations

  	
   

  	
  7.3(a)

  
	
  Bankruptcy Code

  	
   

  	
  13.1(e)

  
	
  Base Rent

  	
   

  	
  1.14

  
	
  Building

  	
   

  	
  1.3

  
	
  Changes

  	
   

  	
  29

  
	
  Comparison Year

  	
   

  	
  4.2(b)

  
	
  Commencement
  Date

  	
   

  	
  1.11

  
	
  Common Areas

  	
   

  	
  2.2

  
	
  Condemnation

  	
   

  	
  15

  
	
  Damages

  	
   

  	
  21

  
	
  Expiration Date

  	
   

  	
  1.13

  
	
  Extended Term

  	
   

  	
  27

  
	
  Force Majeure

  	
   

  	
  13.3

  
	
  Grossed Up
  Operating Expenses

  	
   

  	
  4.2

  
	
  HVAC

  	
   

  	
  4.2(c)

  
	
  Hazardous
  Substance

  	
   

  	
  23.1

  
	
  Holder

  	
   

  	
  26.1

  
	
  Indemnified
  Matter

  	
   

  	
  21

  
	
  Indemnified
  Parties

  	
   

  	
  21

  
	
  Land

  	
   

  	
  1.4

  
	
  Landlord

  	
   

  	
  1.1

  
	
  Mortgage

  	
   

  	
  26.1

  
	
  Net Worth

  	
   

  	
  12.2

  
	
  Number of Tenant
  Parking Spaces

  	
   

  	
  1.19

  
	
  Operating
  Expense Base Year

  	
   

  	
  1.18

  
	
  Operating
  Expenses

  	
   

  	
  4.2(c)

  
	
  Option

  	
   

  	
  27

  
	
  Permitted Use

  	
   

  	
  1.9

  
	
  Premises

  	
   

  	
  1.2

  
	
  Property

  	
   

  	
  1.5

  
	
  Real Estate
  Broker

  	
   

  	
  1.20

  
	
  Real Property
  Taxes

  	
   

  	
  10.2

  
	
  Rent
  Commencement Date

  	
   

  	
  1.12

  
	
  Rentable Area of
  Building

  	
   

  	
  1.8

  
	
  Rentable Area of
  Premises

  	
   

  	
  1.7

  
	
  Requisition

  	
   

  	
  3.1(c)(2)

  
	
  Rules

  	
   

  	
  16.1

  
	
  SNDA

  	
   

  	
  26.2

  
	
  Security Deposit

  	
   

  	
  1.16

  
	
  Supplemental
  Systems

  	
   

  	
  11.5

  
	
  Tax Base Year

  	
   

  	
  1.18

  
	
  Tenant

  	
   

  	
  1.1

  

 iv
 

 

	
  Tenant Parties

  	
   

  	
  21

  
	
  Tenant’s Property

  	
   

  	
  9.5

  
	
  Tenant’s Share

  	
   

  	
  1.17

  
	
  Term

  	
   

  	
  1.10

  
	
  Transfer

  	
   

  	
  12.1

  
	
  Transfer Premium

  	
   

  	
  12.6

  
	
  Work Letter

  	
   

  	
  3.2

  

 

 

 v

 

LEASE

1.             Basic Lease Provisions.

1.1          Parties:  This Lease, dated as of February     ,
2007, made by and between The Realty Associates Fund VI, L.P., a Delaware
limited partnership (“Landlord”)
and NitroMed, Inc., a Delaware corporation (“Tenant”).

1.2          Premises:  A portion of the third (3rd) floor of the Building, consisting of
19,815 rentable square feet, as shown on Exhibit A attached hereto.

1.3          Building:  Together, the two connected buildings known
as and numbered 45-55 Hayden Avenue, Lexington, Massachusetts.

1.4          Land: 
The Land upon which the Building is located as it may be enlarged or
reduced from time to time.

1.5          Property: 
The Land and the Building.

1.6          Intentionally Omitted.

1.7          Rentable Area of Premises: Agreed to be
19,815 square feet.

1.8          Rentable Area of Building: Agreed to be
190,079 square feet.

1.9          Permitted Use:  General office use, subject to the
requirements and limitations contained in Section 6.

1.10        Term: The period commencing on the
Commencement Date and ending on the Expiration Date.

1.11        Commencement Date: The Commencement Date
shall be the earlier of (i) the day immediately following the Substantial
Completion Date, or (ii) the first day on which Tenant occupies all or any
portion of the Premises for the conduct of Tenant’s business.

1.12        Rent Commencement Date: The Commencement
Date.

1.13        Expiration Date: 11:59 p.m., local time, on
the day immediately preceding the sixty-sixth (66th) monthly anniversary of the
Commencement Date or, if the Commencement Date is not the first day of a
calendar month, then the last day of the sixty-sixth (66th) full calendar month
following the calendar month in which the Commencement Date occurs.

1.14        Base Rent:  Subject to Section 4.1, the Base Rent is as
follows:

 

	
  RENTAL PERIOD (Months)

  	
   

  	
   

  	
   

  	
  ANNUAL BASE RENT

  	
   

  	
  MONTHLY PAYMENT

  	
   

  	
  BASE RENT PER

  SQUARE FOOT

  	
   

  
	
  Lease Months
  1-12

  	
   

  	
  $

  	
  535,005.00

  	
   

  	
  $

  	
  44,583.75

  	
   

  	
  $

  	
  27.00

  	
   

  
	
  Lease Months
  13-24

  	
   

  	
  $

  	
  544,912.50

  	
   

  	
  $

  	
  45,409.38

  	
   

  	
  $

  	
  27.50

  	
   

  
	
  Lease Months
  25-36

  	
   

  	
  $

  	
  564,727.50

  	
   

  	
  $

  	
  47,060.63

  	
   

  	
  $

  	
  28.50

  	
   

  
	
  Lease Months
  37-48

  	
   

  	
  $

  	
  584,542.50

  	
   

  	
  $

  	
  48,711.88

  	
   

  	
  $

  	
  29.50

  	
   

  
	
  Lease Months
  49-60

  	
   

  	
  $

  	
  594,450.00

  	
   

  	
  $

  	
  49,537.50

  	
   

  	
  $

  	
  30.00

  	
   

  
	
  Lease Months 61-66

  	
   

  	
  $

  	
  614,265.00

  	
   

  	
  $

  	
  51,188.75

  	
   

  	
  $

  	
  31.00

  	
   

  

 

1.15        Intentionally
Omitted

1.16        Security Deposit:  $189,761.65.

1.17        Tenant’s Share: 10.42%

1.18        Tax Base Year:
 Fiscal Year 2008.

Operating
Expense Base Year: 
Calendar Year 2007.

1.19        Number of
Tenant Parking Spaces:  Fifty-nine (59) spaces (3 per 1,000 square
feet of rentable area), to be used in common and on an unassigned basis.

1.20        Real Estate Broker: Richards Barry Joyce
& Partners, LLC

1.21        Attachments to
Lease:

Exhibit
A — Layout Plan

Exhibit
A-1 — Work Letter

Exhibit
A-2 — Temporary Premises

Exhibit
B — Verification Letter

Exhibit
C — Rules and Regulations

Exhibit D — Cleaning
Specifications

1.22        Address for Notices:

	
  

  	
  Landlord:

  	
  The Realty Associates Fund VI, L.P.

  
	
   

  	
   

  	
  c/o Jones Lang LaSalle
  Americas, Inc

  
	
   

  	
   

  	
  55 Hayden Avenue

  
	
   

  	
   

  	
  Lexington, Massachusetts
  02421

  
	
   

  	
   

  	
  Telephone No. (781)
  778-2563

  
	
   

  	
   

  	
  Fax No. (781) 676-7719

  
	
   

  	
   

  	
  Attention: Property Manager

  

 

 2
 

 

	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  TA Associates Realty

  
	
   

  	
   

  	
  28 State Street, 10th Floor

  
	
   

  	
   

  	
  Boston, Massachusetts 02109

  
	
   

  	
   

  	
  Telephone No. (617) 476-2700

  
	
   

  	
   

  	
  Fax No. (617) 476-2799

  
	
   

  	
   

  	
  Attention: Hayden Asset Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  and:

  	
  Stephen T. Langer, Esq.

  
	
   

  	
   

  	
  Langer & McLaughlin, LLP

  
	
   

  	
   

  	
  137 Newbury Street

  
	
   

  	
   

  	
  Boston, MA 02116

  
	
   

  	
   

  	
  Telephone No. (617) 536-9050

  
	
   

  	
   

  	
  Fax No. (617) 536-9040

  
	
   

  	
   

  	
   

  
	
   

  	
  Tenant:

  	
   

  
	
   

  	
   

  	
  NitroMed, Inc.

  
	
   

  	
   

  	
  125 Spring Street

  
	
   

  	
   

  	
  Lexington, MA

  
	
   

  	
   

  	
  Attn: James G. Ham, III, Vice President/

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  Telephone No. (781) 266-4129

  
	
   

  	
   

  	
  Fax No. (781) 274-8080

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Cynthia B. Keliher, Esq.

  
	
   

  	
   

  	
  McCarter & English, LLP

  
	
   

  	
   

  	
  225 Franklin Street

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  
	
   

  	
   

  	
  Telephone No. (617) 345-7000

  
	
   

  	
   

  	
  Fax No. (617) 345-7050

  

 

2.             Premises

2.1          Lease of
Premises.  Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, upon all of the conditions set forth herein, the
Premises, together with certain rights to the Common Areas as hereinafter
specified.

2.2          Common Areas-Defined. The term “Common
Areas” is defined as all areas and facilities outside the Premises
and within the exterior boundary line of the Property that are designated by
Landlord from time to time for the general non-exclusive use of Landlord,
Tenant and the other tenants of the Property and their respective employees,
suppliers, customers and invitees, including, but not limited to, common
entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking
areas, loading and unloading areas, roadways and sidewalks.  Landlord may also designate other land and
improvements outside the boundaries of the Property in which Landlord has
rights to be a part of the Common Areas, provided that such other land and
improvements have a reasonable and functional relationship to the Property.

 3
 

3.             Term.

3.1          (a) Term, Commencement Date, Rent
Commencement Date and Expiration Date.  The
Term, Commencement Date, Rent Commencement Date and Expiration Date of this
Lease are as specified in Sections 1.10,
1.11, 1.12 and 1.13, respectively. As used in this Lease, “Lease Year” shall mean each period of one
year during the Term commencing on the Commencement Date or on any anniversary
thereof, provided that the first Lease Year shall consist of the period between
the Commencement Date and the last day of the calendar month in which the
Commencement Date occurs and the succeeding twelve full calendar months, and
each succeeding Lease Year shall consist of a one-year period (or part thereof
with respect to the last Lease Year) commencing on the first day of the
calendar month following the calendar month in which the Commencement Date
fell.

Tenant
shall, within fifteen (15) days after Landlord’s written request, complete and
execute the Verification Letter attached hereto as Exhibit B, or propose
appropriate modification to accurately reflect the factual state of affairs,
and deliver it to Landlord.  Tenant’s
failure to execute the Verification Letter or propose such modifications within
said fifteen (15) day period shall constitute Tenant’s acknowledgment of the
truth of the facts contained in the letter delivered by Landlord to Tenant.
However, Landlord’s failure to prepare or deliver a Verification Letter shall
have no effect on the Term, Commencement Date, Rent Commencement Date or
Expiration Date.

3.2          Preparation of the Premises.

(a)           Attached to this
Lease as Exhibit A is a “Layout Plan,” dated December 21, 2006, showing
generally the improvements to be made by Landlord to prepare the Premises for
Tenant’s occupancy. The Layout Plan attached as Exhibit A has been
approved by Tenant.  Landlord will have
further plans (the “Plans”)
prepared consistent with the Layout Plan, and in accordance with Building
standards and otherwise with information provided to Landlord by Tenant. The
Plans shall be submitted to Tenant for its approval, which shall not be
unreasonably withheld or delayed. Failure by Tenant to disapprove any
submission or resubmission of the Plans within five (5) business days after
submission or any resubmission shall constitute approval thereof. Any
disapproval shall be accompanied by a specific statement of the reasons
therefor.

(b)           A
work letter (the “Work Letter”)
describing the work to be performed by Landlord pursuant to the Plans (“Landlord’s Work”) is attached hereto as Exhibit A-1.
Landlord shall undertake Landlord’s Work at Landlord’s sole cost and expense
and in accordance with the Work Letter and applicable laws, codes and
regulations. Except as specifically set forth in the Work Letter, Landlord’s
Work shall not include any furniture, fixtures or equipment for Tenant’s
business or any wiring for Tenant’s equipment. Subject to the provisions of Section 3.3(b)
below, Landlord shall use commercially reasonable efforts to achieve Substantial
Completion on or before the sixtieth (60th) day following the date hereof, but Landlord shall have
no liability for failure to do so, and Tenant shall have no claim against
Landlord, except for the right to terminate this Lease as provided in Section 3.3(c)
below.  The Landlord’s Work shall be
deemed Substantially Complete on the first day as of which (i) Landlord’s Work
has been completed, including, to the extent applicable, the Substantial
Completion Punch List (as hereinafter defined) (as certified in writing by
Landlord’s Architect),

 4
 

except for items of work (and, if applicable,
adjustment of equipment and fixtures) which can be completed after occupancy
has been taken without unreasonable interference with Tenant’s use of the
Premises (the “Final Punch List”), and (ii) a certificate of occupancy has been issued by
the Town of Lexington for the Premises (or Landlord has obtained other
written confirmation from a responsible official of the Town of Lexington that
the requirements for such a certificate have been satisfied and that a
certificate will issue in the ordinary course), and (iii) the utilities serving
the Premises are operational, and (iv) Tenant has been given written notice of
the occurrence of the matters described in the foregoing clauses (i), (ii) and
(iii). Such date is hereinafter called the “Substantial
Completion Date.”  Upon receipt of such notice, Tenant shall be
entitled to inspect the Premises with a representative of Landlord or Landlord’s
contractor for the purpose of preparing the Final Punch List. Landlord shall
complete as soon as conditions permit all Final Punch List items, and Tenant
shall afford Landlord access to the Premises for such purposes. Landlord shall
use commercially reasonable efforts to complete all Final Punch List items
within 45 days after the Substantial Completion Date. In the course of
completing either the Substantial Completion Punch List or the Final Punch List
in accordance with this Article 3, Landlord shall use commercially reasonable efforts
to avoid unreasonable interference with Tenant’s operations in the Premises.

3.3          Condition; Landlord’s Performance                (a) Tenant shall give Landlord
written notice, not later than forty-five (45) days after the Substantial
Completion Date, of any respects in which Landlord has not performed Landlord’s
Work fully, properly and in accordance with the terms of this Lease (except for
latent defects and matters that could not be discovered by normal use or a
reasonably careful visual inspection). Except as identified in any such notice
from Tenant to Landlord, Tenant shall have no right to make any claim that
Landlord has failed to perform any of Landlord’s Work fully, properly and in
accordance with the terms of this Lease, or to require Landlord to perform any
further Landlord’s Work.  Except for
Landlord’s Work, the Premises are being leased in their present condition, AS
IS, WITHOUT REPRESENTATION OR WARRANTY by Landlord. Tenant acknowledges that it
has inspected the Premises and Common Areas and, subject to completion of
Landlord’s Work, has found the same satisfactory.

(b) Landlord acknowledges that Tenant has advised
Landlord that, due to its existing tenancy conditions, Tenant must vacate its
current leased premises on or before March 31, 2007. Notwithstanding anything
to the contrary in Section 3.2(b),
Landlord will use commercially reasonable efforts (excluding overtime labor or
other premium services) to Substantially Complete Landlord’s Work and make the
Premises ready for occupancy on or before March 31, 2007, but Landlord makes no
commitment that it will be able to do so, and Landlord will have no liability
or penalty (except for any delay in the Commencement Date or any offset to a
Tenant Delay that may apply in accordance with Section 3.4) if
Landlord’s Work is not Substantially Complete and the Premises are not ready
for Occupancy by March 31, 2007.  No
later than March 9, 2007, authorized representatives from Landlord and Tenant
will meet at Landlord’s office in Boston (or at another mutually agreeable
location) to review the then status of the Landlord’s Work (the “Status Meeting”),
at which time Landlord will identify in writing those items of Landlord’s Work
which, despite the use of commercially reasonable efforts, will not be
Substantially Complete by March 31, 2007 (collectively, the “Substantial
Completion Punch

 5
 

List”).  Based
on the Substantial Completion Punch List, Tenant, no later than March 15, 2007,
will identify, in writing, (i) those items (the “Priority Items”) of Landlord’s
Work which Tenant requests be completed by March 31, 2007 and (ii) those items
of Landlord’s Work which Tenant requests be completed by the Substantial
Completion Date. Tenant acknowledges that, due to subcontractor availability,
materials availability or other matters beyond the reasonable control of
Landlord or its contractor, it is possible that not every Priority Item
requested by Tenant can be accommodated. Landlord will review Tenant’s request
described in clause (i) and advise Tenant within three (3) business days of (A)
the then estimated costs associated with completing such Priority Items by
March 31, 2007 (including without limitation the estimated costs of material
fabrication or delivery, or the re-sequencing or reallocation of work and/or
labor priorities), and (B) if applicable, any Priority Item(s) that Landlord
and its contractor do not believe can be accommodated by March 31, 2007. With
respect to those Priority Items that can be accommodated, Landlord will
(subject to Tenant’s approval of the estimated costs of the Priority Items as
set forth above, within two (2) business days after receipt of the notice from
Landlord described in the immediately preceding sentence) use overtime labor or
use such other premium services as may be appropriate to Substantially Complete
such Priority Items  by March 31, 2007,
provided that Tenant shall be solely responsible for any and all costs
associated therewith.  With respect to
those items of Landlord’s Work referred to in the foregoing clause (ii),
Landlord shall use commercially reasonable efforts to complete such work by the
Substantial Completion Date.  Any
overtime labor or premium services costs (including without limitation the cost
of expedited material fabrication or delivery, and any costs or delays incurred
as a result of re-sequencing work or reallocation of labor priorities) due in
accordance with Section 3.3(b)(i) shall be paid by
Tenant as additional rent within thirty (30) days after Tenant’s receipt of an
itemized bill from Landlord. Tenant acknowledges that requesting that the
Landlord’s contractor change priorities to meet the Substantial Completion
Punchlist may result in other portions of Landlord’s Work (that would otherwise
have been completed) being delayed. Notwithstanding the foregoing, if, for any
reason other than a Tenant’s Delay, the Priority Items have not been
Substantially Completed by March 31, 2007, then Landlord will provide for
Tenant’s temporary use space in the Building (the “Temporary Premises”) from
April 1, 2007 until such time as Landlord’s Work is Substantially Complete and
the Premises are ready for occupancy. The Temporary Premises will contain
approximately 5,690 rentable square feet of space (as shown on Exhibit A-2),
and be delivered in their “As Is” condition. Tenant will be responsible for the
cost of relocating Tenant’s property, furnishings and equipment from the
Temporary Premises to the Premises following the Substantial Completion Date.
During such time as Tenant occupies the Temporary Premises, the Temporary
Premises shall be deemed to be the Premises for all purposes of this Lease
(including without limitation all indemnification and insurance requirements),
except that (i) Tenant shall not be required to pay Base Rent for the Temporary
Premises, (ii) Tenant’s Share of Operating Expenses and Real Property Taxes
shall be based on the square footage of the Temporary Premises during such
period and (iii) the Commencement Date shall not be deemed to have occurred
solely by virtue of such occupancy.

(c)           Notwithstanding anything to the
contrary in this Lease, if the Substantial Completion Date has not occurred by
the ninetieth (90th)
day after the date hereof (the “Construction Deadline,”
which shall be extended for the period of any Tenant’s Delays or Force
Majeure), then Tenant shall have the option, as its sole and exclusive remedy
at law or in equity, upon notice to Landlord given within ten (10) days after the
Construction Deadline (as so

 6
 

extended), to
terminate this Lease.  In the event of
such termination, this Lease shall be without further force or effect upon the
thirtieth (30th)
day after the Landlord receives such notice, unless the Substantial Completion
Date occurs prior to such thirtieth (30th) day. In the event of such termination, Landlord shall
return to Tenant any security deposit or Base Rent that Tenant may have paid to
Landlord hereunder, and Landlord shall have no further obligation or liability
to Tenant in connection with this Lease or the Premises.

3.4          Tenant’s Delays.

(a)           If a delay shall
occur in the Substantial Completion Date, and such delay would not have
occurred but for the occurrence of any of the following:

(i)                                     any request by
Tenant that Landlord delay the commencement or completion of Landlord’s Work
for any reason;

(ii)                                  any change by Tenant
in the Layout Plan, or in any other Plans or specifications, after initial
approval thereof by Tenant, or any request by Tenant for work that is
inconsistent with the Layout Plan as approved, or any request for items or
materials not specifically reflected on materials submitted by Tenant to
Landlord and agreed to by Landlord prior to the date hereof (including the
request by Tenant for so-called “long lead-time” items);

(iii)                               any other act or
omission of Tenant or its officers, agents, employees or contractors;

(iv)                              any re-sequencing or any
change in labor or materials priorities as a result of a request by Tenant
described in Section 3.3(b); or

(v)                                 any reasonably
necessary displacement of any of Landlord’s Work from its place in Landlord’s
construction schedule resulting from any of the causes for delay referred to in
this paragraph (a) and the fitting of such
Landlord’s Work back into such schedule;

then Tenant shall, from time to time and within
thirty (30) days after demand therefor, pay to Landlord for each day of such
delay the amount of Base Rent, Additional Rent and other charges that would
have been payable hereunder had the Rent Commencement Date occurred immediately
prior to such delay. If any of the circumstances described in clauses (i)
through (v) above occur, and Landlord is aware that such occurrence is
reasonably likely to result in a delay in the Substantial Completion Date, then
Landlord shall so advise Tenant, and shall give Tenant the Landlord’s then good
faith estimate of the likely duration of such delay. Such estimate will not be
binding on Landlord and shall not limit any subsequent claim of a Tenant’s
Delay. Landlord will use reasonable efforts to advise Tenant periodically if
circumstances change or if Landlord becomes aware of any change in the
estimated duration of any delay described herein. The period of any Tenant’s
Delay shall not include any delay attributable solely to the negligent or
willful and wrongful act or omission of Landlord, including without limitation
Landlord’s disregard of any deadlines set forth in this Lease or any work
letter. In the event of any dispute regarding the duration of any Tenant’s
Delay, the parties agree that such dispute shall be resolved through
arbitration, with a single arbitrator (with opportunity for review, as set
forth in such procedures), in accordance with the procedures established by the
Real Estate Bar Association for Massachusetts (REBA Dispute Resolution, Inc.).

 7
 

(b)           If
a delay in the Substantial Completion Date, or if any substantial portion of
such delay, is the result of Force Majeure, and such Force Majeure delay would
not have occurred but for a delay described in paragraph (a), such Force Majeure delay shall be added to
the delay described in paragraph (a).

(c)           The
delays referred to in paragraphs (a) and (b) are herein referred to collectively and individually as
“Tenant’s Delay” or “Tenant Delay.” The Construction Deadline
shall be extended one day for each day of Tenant’s Delays.

3.5          Early Access.  At such time as Landlord’s contractor reasonably
determines that such access will not interfere with the timely and efficient
completion of Landlord’s Work, Tenant shall have access to the Premises (and,
if applicable, the Temporary Premises) prior to the Commencement Date solely
for the purpose of installation of furniture, equipment, and telephone/data
wiring, provided that such access shall be subject to all of the terms and
conditions of this Lease, other than the payment of Base Rent or any additional
rent or electrical charges. Landlord will in any event afford Tenant’s
information systems consultants access to the Premises at least seven (7) days
prior to the earlier of (i) March 31, 2007 or (ii) the then-estimated
Substantial Completion Date. Subject to the preceding sentence, Tenant’s access
shall be subject to reasonable scheduling, and shall in any event be subject to
other requirements of Landlord and Landlord’s contractor, and Tenant shall
deliver to Landlord certificates of liability, casualty and workmen’s
compensation insurance prior to having any such access. Any interference with
Landlord’s Work as a result of Tenant’s early access shall constitute a Tenant
Delay. Both Landlord’s and Tenants contractors shall use commercially
reasonable efforts to accommodate one another’s requirements to complete work
in a timely and professional manner.

4.             Rent.

4.1          Base Rent.  Tenant shall pay to
Landlord the Base Rent set forth in Section 1.14, without offset or deduction
commencing on the Rent Commencement Date and thereafter on the first day of
each calendar month. So long as (i) this Lease shall be in full force and
effect and (ii) there shall exist no Event of Default on the part of Tenant
(nor any event or circumstance which, with the passage of time or the giving of
notice, or both, would constitute an Event of Default), Landlord will waive
payment of Base Rent (but not Additional Rent, utility charges or any other
amounts due or payable hereunder) on 4,815 rentable square feet of Premises
Area for the period commencing on the Commencement Date and expiring on the 365th day following the Commencement Date (e.g.
Tenant shall only be responsible during such period for Base Rent on 15,000
rentable square feet of Premises Area (19,815 r.s.f. - 4,815 r.s.f. = 15,000
r.s.f. x $27.00/r.s.f./annum = $405,000/year or $33,750/month)). If the
Commencement Date is not the first day of a calendar month, the partial month
will be added to the first full twelve months of the Term, and Base Rent shall
commence on the Commencement Date and shall be payable for the remainder of the
partial month at the rate set forth in Section
1.14 for such period.  Base
Rent for any period during the term hereof which is for less than one month
shall be prorated based upon the actual number of days of the calendar month
involved.  Base Rent and all other
amounts payable to Landlord hereunder shall be payable to Landlord in lawful
money of the United States, and Tenant shall be responsible for delivering said
amounts to Landlord at the

 8
 

address stated herein or to such other person
or to such other place in the continental United States as Landlord may
designate in writing.
Landlord and Tenant agree that all amounts
due from Tenant under or in respect of this Lease, whether labeled Base Rent,
additional rent, additional charges or otherwise, shall be considered as rental
reserved under this Lease for all purposes, including without limitation
regulations promulgated pursuant to the Bankruptcy Code, and including further
without limitation Section 502(b) thereof.

4.2          Operating
Expense Increases. 
Tenant shall pay to Landlord during the term hereof, in addition to the
Base Rent, Tenant’s Share of the amount by which all Operating Expenses for
each Comparison Year exceed the amount of all Operating Expenses for the
Operating Expense Base Year.  If less
than 95% of the rentable square feet in the Building is occupied by tenants or
Landlord is not supplying services to tenants occupying 95% of the rentable
square feet of the Building at any time during any calendar year (including the
Operating Expense Base Year), Operating Expenses for such calendar year shall
be reasonably extrapolated by Landlord to the amount of Operating Expenses that
would normally be expected to be incurred had 95% of the Building’s rentable
square feet been occupied and had Landlord been supplying services to tenants
occupying 95% of the Building’s rentable square feet throughout such calendar
year (hereinafter the “Grossed Up Operating
Expenses”), and such amount shall be the Operating Expenses for such
calendar year. Landlord’s good faith estimate of Grossed Up Operating Expenses
shall not be subject to challenge or recalculation by Tenant, except as
otherwise set forth in Section 4.2(h).  Tenant’s Share of Operating Expense increases
shall be determined in accordance with the following provisions:

(a)           “Tenant’s Share” is defined as the percentage set forth in Section 1.17, which percentage has been determined by
dividing the Rentable Area of Premises by the Rentable Area of Building, and
multiplying the resulting quotient by one hundred (100). In the event that the
Rentable Area of Premises or the Rentable Area of Building changes, Tenant’s
Share shall be adjusted in the year the change occurs, and Tenant’s Share for
such year shall be determined on the basis of the days during such year that
each Tenant’s Share was in effect.

(b)           For purposes of
determining Tenant’s Share of Operating Expense increases, “Comparison Year” is defined as each calendar year during the
term of this Lease after the Operating Expense Base Year. In the event of any
partial Comparison Years during the Term, Tenant’s Share of the Operating
Expense increases therefor shall be prorated according to that portion of such
Comparison Year as to which Tenant is responsible for a share of such increase.  For purposes of determining Tenant’s Share of
Real Property Tax increases, “Comparison Year” is defined as each tax fiscal
year during the term of this Lease after the Tax Base Year. Tenant’s Share of
Real Property Tax increases for any partial Comparison Years during the Term
shall be prorated according to that portion of such Comparison Year as to which
Tenant is responsible for a share of such increase.

(c)           “Operating Expenses” shall mean, except as expressly provided
herein, all costs, expenses and fees incurred by Landlord in connection with or
attributable to the Property, including but not limited to, the following
items: (i) all costs, expenses and fees associated with or attributable to the
ownership, management, operation, repair, maintenance, improvement, alteration
and replacement of the Property, or any part thereof, including but not limited
to, the following: (A) all surfaces, coverings, decorative items, carpets,
drapes, window

 9
 

coverings, parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, stairways, landscaped areas, striping, bumpers, irrigation
systems, lighting facilities, building exteriors and roofs, fences and gates;
(B) all heating, ventilating and air conditioning equipment (“HVAC”), plumbing,
mechanical, electrical systems, life safety systems and equipment,
telecommunication equipment, elevators, escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair; (ii) the
cost of trash disposal, janitorial services and security services and systems;
(iii) the cost of all insurance purchased by Landlord pursuant to Section 8 of this Lease, including any deductibles; (iv) the
cost of water, sewer, gas, electricity, and other utilities available at the
Property and paid by Landlord; (v) the cost of labor, salaries and applicable
fringe benefits incurred by Landlord with respect to the Property; (vi) the
cost (purchase or rental) of materials, supplies and tools used in operating,
managing, maintaining, repairing and/or cleaning the Property; (vii) the cost
of reasonable accounting fees, management fees, legal fees and consulting fees
attributable to the ownership, operation, management, maintenance and repair of
the Property plus the cost of any space at the Property occupied by the
property manager, provided that if the Property is managed by Landlord or an
affiliate of Landlord, the management fee so included in Operating Expenses
shall not exceed an amount equal to four percent (4%) of the gross rental
receipts of the Property (excluding for this purpose capital expenses, Landlord’s
markups and amounts separately reimbursed by tenants); (viii) the cost of
replacing, modifying and/or adding improvements or equipment mandated by any
law, statute, regulation or directive of any governmental agency and any
repairs, disposals or removals necessitated thereby (including, but not limited
to, the cost of complying with the Americans With Disabilities Act), so long as
the cost is not incurred to cure a violation of such requirement that existed
on the date of this Lease; (ix) payments made by Landlord under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the payment or sharing of costs among property owners; (x) any
business property taxes or personal property taxes imposed upon the fixtures,
machinery, equipment, furniture and personal property used in connection with
the operation of the Property; (xi) the cost of all business licenses, any
gross receipt taxes based on rental income or other payments received by
Landlord, commercial rental taxes or any similar taxes or fees; (xii) all costs
and expenses associated with or related to the implementation or support by
Landlord of any vanpool or other traffic management or transportation demand
management or similar program, such as but not limited to the 128 Business
Council or LEXPRESS, if and to the extent required by any governmental agency
or board, or if Landlord is subsidizing such cost for tenants of the Property;
(xiii) fees assessed by any air quality management district or other
governmental or quasi-governmental entity regulating pollution; and (xiv) the
cost of any other service provided by Landlord to all tenants of the Building
or any cost that is elsewhere stated in this Lease to be an Operating Expense. With respect to the foregoing subparagraphs (i) -
(xiv), if any such costs associated therewith relate to other properties of
Landlord, such costs shall be allocated by Landlord among the Property and such
other properties.

(d)           Operating Expenses shall not include
any expenses paid by any tenant directly to third parties, or as to which
Landlord is otherwise reimbursed by any third party or by insurance
proceeds.  The following costs and expenses
shall also be excluded from the definition of “Operation Expenses” for purposes
of this Lease:

(i)            Repairs
or other work occasioned by fire, windstorm or other casualty to the extent
that Landlord is reimbursed by insurance or would have been

 10
 

reimbursed if Landlord had carried insurance
specifically required of landlord under Section 8 below (but the amount of any
deductible paid shall be included),

(ii)           Leasing
commissions, attorneys’ fees, accountant’s fees, costs and disbursements and
other expenses incurred in connection with negotiations or disputes with
present or prospective tenants or other occupants, or associated with the
enforcement of any leases;

(iii)          Costs
(including permit, license and inspection fees) incurred in renovating or
otherwise improving or decorating, painting, or redecorating space for new
tenants or existing tenants in connection with extensions of the terms of their
respective tenancies;

(iv)          Depreciation
and amortization on the Building (except that the foregoing shall not limit
Landlord’s rights to amortize certain capital expenses as provided in
Subsection 4.2(e) below);

(v)           expenses
for the repair, maintenance or operation of any parking garage (including
without limitation salaries and benefits of attendants, and the cost utilities)
to the extent that Landlord receives separately stated income from such parking
garage;

(v)           Costs
(including the amortization thereof) of any repairs, improvements, alterations,
or equipment that would be properly classified as a capital expenditure
according to generally
accepted accounting principles, except as otherwise
expressly included in the definition of “Operating Expenses” under Subsection
4.2(e) below;

(vii)         Costs
of services provided free of direct charge to other tenants but not offered
free of direct charge to Tenant;

(viii)        Costs
incurred to remedy any violation of the terms and conditions of any lease or
any governmental law or regulation, which violation existed on the date of this
Lease, as determined by written admission, stipulation, final judgment, or
arbitration award, except to the extent that such costs reflect costs that
would have been incurred by Landlord absent such violation;

(ix)           Overhead
and profit increment paid to Landlord or its subsidiaries or affiliates for
management or other services on or to the Property or for supplies or other
materials, to the extent that the costs of such materials, services, or
supplies exceed the costs normally payable for like services, supplies or
materials provided by unaffiliated parties on a competitive basis (taking into
account the market factors in effect on the date any relevant contracts were
negotiated) in comparable office buildings in the greater Route 128/Route 2
office market;

(x)            Principal,
interest or other financing charges (including points and fees) on debt secured
by any mortgages or deeds of trust;

(xi)           Landlord’s
general corporate overhead and general administrative expenses unrelated to the
Property;

 11

 

(xii)          The
cost of any work required in order to rectify design and/or construction
defects and bring the Building into compliance with building and safety code
requirements applicable to the Building at the time of its construction;

(xiii)         Advertising
and promotional expenditures for leasing space at the Property;

(xiv)        Costs
for purchasing paintings, sculpture, and other objects of “fine art” that would
be considered unusually or unreasonably expensive in comparison with that found
in other first-class suburban office parks and buildings in the Route 2/Route
128 office market (provided, however, that the cost of customary and reasonable
artwork, wall hangings and decorations, and the reasonable costs of installing,
protecting, and maintaining any such items of artwork, may be included in “Operating
Expenses”);

(xv)         The
costs and expenses incurred by Landlord in operating any retail stores, hotels
or similar amenities in the Building;

(xvi)        Any
compensation paid to clerks, attendants, or to other persons in commercial
concessions operated by Landlord;

(xvii)       Rental
under any ground lease or underlying lease;

(xviii)      The cost of abating, removing,
remediating, or cleaning up any unlawful levels of asbestos or other Hazardous
Materials, except that Operating Expenses may include the costs attributable to
those actions taken by Landlord to comply with any environmental requirements
in connection with the ordinary operation and maintenance of the Property; and

(xix)         Reserves.

(e)           If the cost incurred in making a capital
improvement or replacing (as opposed to repairing) any capital equipment is
either (i) required to meet the requirements of any applicable laws, codes,
ordinances or regulations, or (ii) reasonably deemed by Landlord to be likely
to reduce Operating Expenses or to increase the operating efficiency of the
Building, consistent with sound property management practices and procedures
and, in either case such cost is not fully deductible as an expense in the year
incurred in accordance with generally accepted accounting principles, the cost
shall be amortized in accordance with generally accepted accounting principles
over the useful life of the capital improvement or equipment, as reasonably
determined by Landlord, together with a reasonable interest factor on the
unamortized cost of such item. In no event shall the expiration or earlier
termination of the Term of this Lease shorten the useful life of any such
improvement or replacement. Any costs described in clause (i) above shall not
include any cost necessary to cure a violation of such laws, codes, ordinances
or regulations that existed on the date hereof. The cost of any capital repairs
shall also be amortized according to the foregoing provisions.

(f)            Real Property Taxes
shall be paid in accordance with Section 10
below and shall not be included in Operating Expenses.

(g)           Tenant’s Share of
Operating Expense increases shall be payable by Tenant within twenty (20) days
after a reasonably detailed statement of actual expenses is presented to 

 12
 

Tenant by Landlord.  At Landlord’s option, however, Landlord may,
from time to time, estimate what Tenant’s Share of Operating Expense increases
will, and the same shall be payable by Tenant in monthly installments during
each Comparison Year of the Lease Term, on the same day as the Base Rent is due
hereunder.  In the event that Tenant pays
Landlord’s estimate of Tenant’s Share of Operating Expense increases, Landlord
shall use its best efforts to deliver to Tenant within one hundred eighty (180)
days after the expiration of each Comparison Year a reasonably detailed
statement showing Tenant’s Share of the actual Operating Expense increases
incurred during such year.  Landlord’s
failure to deliver the statement to Tenant within said period shall not
constitute Landlord’s waiver of its right to collect said amounts or otherwise
prejudice Landlord’s rights hereunder. 
If Tenant’s payments under this Section
4.2(f) during said Comparison Year exceed Tenant’s Share as
indicated on said statement, Tenant shall be entitled to credit the amount of
such overpayment against Tenant’s Share of Operating Expense increases next
falling due (or refund within thirty (30) days the amount of such overpayment
if the Term of this Lease has ended and Tenant has no further obligation to Landlord).  If Tenant’s payments under this Section 4.2(f) during said Comparison Year
were less than Tenant’s Share as indicated on said statement, Tenant shall pay
to Landlord the amount of the deficiency within thirty (30) days after delivery
by Landlord to Tenant of said statement. Landlord agrees that Tenant shall not
be responsible to pay any amounts due on account of Operating Expenses that are
not billed by Landlord to Tenant within two (2) years after the last day of the
Comparison Year in which such Expenses were incurred, or if later, within two
(2) years after the date on which any third-party costs are billed to Landlord
(including corrections or revisions to billings previously sent to Landlord).
Landlord and Tenant shall forthwith adjust between them by cash payment any
balance determined to exist with respect to that portion of the last Comparison
Year for which Tenant is responsible for Operating Expense increases,
notwithstanding that the Lease term may have terminated before the end of such
Comparison Year; and this provision shall survive the expiration or earlier
termination of the Lease.

                                (h)           Provided there then exists no Event
of Default on the part of Tenant hereunder, if Tenant shall so request within
sixty (60) days after receipt of any statement presented by Landlord hereunder,
and upon reasonable advance written notice from Tenant, Landlord shall permit
Tenant, at Tenant’s expense and during normal business hours, to review
Landlord’s ledger and supporting records relating to Operating Expenses for the
Comparison Year in respect of which such statement was prepared for the purpose
of verifying any accounting that Landlord is required to give hereunder. Any
third party agent retained by Tenant to perform such a review shall have expertise
in and familiarity with general industry practice with respect to the operation
of and accounting for a first class office building and such agent’s
compensation shall in no way be contingent upon or correspond to the financial
impact on Tenant resulting from the review. In making any such examination,
Tenant agrees, and shall cause its auditors, accountants and any other
employees, agents or contractors having access to such information to agree, to
keep strictly confidential (i) any and all information contained in such
records, and (ii) the circumstances and details pertaining to such examination,
including without limitation the nature of any dispute in respect of Operating
Expenses and the nature or details of any settlement thereof; and Tenant will confirm
and cause its auditors, accountants, employees, agents and contractors to
confirm such agreement in writing, if so requested by Landlord, prior to such
examination. Landlord’s accounting shall be binding and conclusive upon Tenant
unless, (i) Tenant has within such 60-day period, advised Landlord of Tenant’s
desire to review Landlord’s records, and (ii) within thirty (30) days
after completion of such 

 13
 

review, Tenant shall
notify Landlord in writing that Tenant disputes the correctness of such accounting,
specifying the particular respects in which the accounting is claimed to be
incorrect. If such dispute has not been resolved by agreement within thirty
(30) days after Tenant’s notice of such dispute, then Tenant may, within ten
(10) days after the expiration of such 30-day period, submit the matter to
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, except that there shall be only one arbitrator, who
shall have had at least ten (10) years’ experience as a certified property
manager in buildings similar to the Building and in the same general location
and market, and who has not at any time been employed by either party hereto or
any affiliate of either party. Such arbitrator shall be reasonably agreed upon
by Landlord and Tenant, in good faith, upon receipt of Tenant’s submission, and
the fees of such arbitrator shall be paid by Tenant (subject to reimbursement
as provided below). If the parties are unable within ten (10) business days to
agree on an acceptable arbitrator, either party may request that the then
president of the Real Estate Finance Association of the Greater Boston Real
Estate Board designate an arbitrator meeting the qualifications herein. If
Tenant shall fail to submit the matter to arbitration within such 10-day
period, then the accounting shall be conclusively deemed to be correct. Pending
resolution by agreement or arbitration, and as a condition to Tenant’s rights
hereunder, Tenant shall continue to make any payments claimed by Landlord to be
due on account of Operating Expenses, such payment to be without prejudice to
Tenant’s position. Any decision by an arbitrator shall be final and binding on
the parties. If the dispute shall be resolved in Tenant’s favor, Landlord shall
forthwith credit the amount overpaid by Tenant against amounts subsequently
coming due on account of Operating Expenses (or refund within thirty (30) days
the amount of such overpayment if the Term of this Lease has ended and Tenant
has no further obligation to Landlord), and Landlord shall reimburse Tenant for
the actual out-of-pocket third party costs incurred by Tenant in connection
with such arbitrator. If the arbitrator shall determine that Tenant was
overcharged Operating Expenses by more than five percent (5%), Landlord shall
reimburse Tenant for the actual out-of-pocket third party costs reasonably paid
by Tenant in connection with such review.

(i)            The computation of Tenant’s Share of
Operating Expense increases is intended to provide a formula for the sharing of
costs by Landlord and Tenant and will not necessarily result in the
reimbursement to Landlord of the exact costs it has incurred.

5.             Security
Deposit.  (a)  Tenant shall deliver to Landlord at the time
of execution of this Lease by Tenant the security deposit set forth in Section 1.16 as security for Tenant’s
faithful performance of Tenant’s obligations hereunder. If Tenant fails to pay
Base Rent or other charges due hereunder, and such failure continues beyond the
expiration of applicable notice and grace periods, or otherwise defaults with
respect to any provision of this Lease, which default continues beyond the
expiration of applicable notice and grace periods, Landlord may (but shall have
no obligation to) use all or any portion of said deposit for the payment of any
Base Rent or other charge due hereunder, to pay any other sum to which Landlord
may become obligated by reason of Tenant’s default, or to compensate Landlord
for any loss or damage which Landlord may suffer thereby.  Provided that (i) Tenant has properly elected
to exercise its option to extend the Term of this Lease for the Extended Term
as provided in Section 27, and as of the first
day of the Extended there exists no Event of Default on the part of Tenant
under this Lease (nor any event or circumstance which, with the giving of
notice or the passage of time, would constitute an Event of Default) and this
Lease is then in full force and effect, then Tenant shall be entitled to reduce
the face amount of the security deposit (or the letter of credit referred to
below) as of 

 14
 

the first day of the Extended Term to an amount equal
to two (2) months’ Base Rent (at the rate in effect for the first year of the
Extended Term), and (unless the Landlord has then elected to keep the security
deposit in the form of cash) Landlord shall accept a substitute letter of
credit for such reduced amounts or an endorsement to the then existing letter
of credit. If Landlord so uses or applies all or any portion of the security
deposit hereunder, Tenant shall within twenty (20) days after written demand
therefor deposit cash with Landlord in an amount sufficient to restore said
deposit to its full amount. Landlord shall not be required to keep said
security deposit separate from its general accounts. If Tenant performs all of
Tenant’s obligations hereunder, said deposit, or so much thereof as shall not
then have been applied by Landlord, shall be returned, without payment of
interest or other amount for its use, to Tenant (or, at Landlord’s option, to
the last assignee, if any, of Tenant’s interest hereunder) within a reasonable
time after the expiration of the Term hereof, and after Tenant has vacated and
delivered the Premises as required hereunder. Landlord may retain an amount
reasonably calculated to be sufficient to pay any final amount of Taxes or
Operating Expenses for the Comparison Year in which the Term ends, provided
that the amount so retained shall not exceed 107% of the Tenant’s actual share
of Taxes and Operating Expenses for the immediately prior Comparison Year. No
trust relationship is created herein between Landlord and Tenant with respect
to said security deposit. Tenant acknowledges that the security deposit is not
an advance payment of any kind or a measure of or limit on Landlord’s damages
in the event of Tenant’s default. Any application of the security deposit by
Landlord shall be without prejudice to any other right or remedy.  If
Landlord conveys Landlord’s interest under this Lease, the security deposit, or
any part thereof not previously applied, may be turned over by Landlord to
Landlord’s grantee, and, if so turned over, Tenant agrees to look solely to
such grantee for proper application of the security deposit in accordance with
the terms of this Section 5, and the return thereof
in accordance herewith. The holder of a mortgage shall not be responsible to
Tenant for the return or application of any such deposit, whether or not it
succeeds to the position of Landlord hereunder, unless such deposit shall have
been received in hand by such holder. Tenant hereby waives the provisions of any law which is
inconsistent with this Section 5.

(b)           Landlord and Tenant agree that,
instead of a cash security deposit, Tenant will satisfy the security deposit
requirement under this Lease by delivering to Landlord, upon execution of this
Lease by Tenant, a clean irrevocable standby letter of credit in favor of
Landlord in the amount of the security deposit referred to in Section 1.16.  Any
such letter of credit shall be drawn on a Massachusetts or New York bank having
offices in Boston, Massachusetts reasonably approved by Landlord from time to
time, and shall be in form and substance reasonably acceptable to
Landlord.  In the event of a material
adverse change in the financial position of any bank which has issued a letter
of credit hereunder, Landlord reserves the right, on any scheduled expiration
or renewal date of any such letter (or immediately, in the event that Landlord
reasonably determines that the condition of the issuing bank is in imminent
danger of insolvency), to request that Tenant change the issuing bank to
another bank reasonably approved by Landlord. Regardless of whether Landlord
shall have previously requested that Tenant change issuing banks, if the bank
on which the original letter of credit or any replacement letter is drawn is
declared insolvent or placed into conservatorship or receivership, Tenant
shall, within 20 days thereafter, replace the then-outstanding letter of credit
with a like letter of credit from another bank acceptable to Landlord. In the
event of a reduction in the required amount of the security deposit pursuant to
paragraph (a) hereof, Tenant shall obtain and deliver to Landlord (at Tenant’s
expense) an endorsement to the then-existing letter of credit reflecting such 

 15
 

reduction in amount or a substitution thereof. The letter of credit
shall in all events be assignable by Landlord to any successor without cost or
charge to Landlord.

(c)           The letter of credit shall contain a
so-called “Evergreen” clause, whereby the issuing bank agrees to automatically
extend the term of the letter of credit from year to year throughout the
Initial Term and any Extended Term, with a final expiry date no sooner than
thirty (30) days beyond the Initial Term (or any Extended Term, as the case may
be) unless, not less than sixty (60) days prior to the date on which the letter
would expire absent such extension, the issuing bank gives written notice to
Landlord, by commercial overnight delivery or by certified or registered mail,
of non-extension.  In the event of notice
from the issuing bank of non-extension, Tenant shall, not later than twenty
(20) business days prior to the date on which the outstanding letter shall
expire without extension, obtain a replacement letter of credit from a
Massachusetts or New York bank reasonably acceptable to Landlord, under all of
the terms and conditions set forth above. 
Upon the occurrence of any failure or default on the part of Tenant
hereunder, Landlord may at its election draw all or a portion of the letter of
credit, and within twenty (20) days Tenant shall cause the issuing bank to
replenish the letter of credit to the original full amount.  Upon the failure of Tenant to replace any
such letter at least twenty (20) days prior to its expiration or to replenish
any funds as herein required, and upon written certification thereof by
Landlord to the issuing bank, Landlord may at its election draw the full amount
or any part thereof, and either (x) hold, use and apply the proceeds thereof as
if such proceeds were originally deposited with Landlord in cash under this
Section, or (y) use such proceeds (or any excess proceeds after application) to
obtain from another bank a replacement letter of credit, and the cost of such
replacement shall be deducted from the available balance and reimbursed by
Tenant. Tenant hereby agrees, if so requested by Landlord, to enter into a
letter of credit agreement with the bank so designated by Landlord, failing
which Landlord may do so in Tenant’s name and behalf.  The order in which Landlord applies the
proceeds of the cash security deposit and the proceeds of the letter of credit
shall be determined by Landlord from time to time in its sole discretion.

(d)           From and after the time at which
Landlord shall have drawn all or any portion of the proceeds of such a letter
of credit, Landlord shall have the right from time to time without prejudice to
any other remedy Landlord may have on account thereof, to apply such proceeds,
or any part thereof, to Landlord’s damages arising from any then existing or
subsequently occurring default by Tenant hereunder.  While Landlord holds any unapplied proceeds,
Landlord may commingle the same as hereinabove provided, and shall not be
required to pay interest thereon.  There
then existing no Event of Default by Tenant hereunder (nor any event or
circumstance which, with the giving of notice or the passage of time, or both,
would constitute an Event of Default), at the expiration of the Term of this
Lease and delivery of the Premises to Landlord in accordance herewith and
payment of all amounts then due and coming due, Landlord shall return to Tenant
the proceeds thereof (or, if not drawn upon, any letter of credit), or so much
thereof as shall not have theretofore been applied or returned in accordance
with the terms of this Section, within a reasonable time after the expiration
of the Term hereof, and after Tenant has vacated and delivered the Premises as
required hereunder. Landlord may retain an amount (to be in the form of a
letter of credit or cash, at Tenant’s election) reasonably calculated by
Landlord (taking into account information then available for prior years) to be
sufficient to pay any final amount of Taxes or Operating Expenses for the
Comparison Year in

 16
 

which the Term
ends, provided that the amount so retained shall not exceed 107% of the Tenant’s
actual share of Taxes and Operating Expenses for the immediately prior
Comparison Year.  If Landlord conveys
Landlord’s interest under this Lease, the proceeds (or, if not drawn upon, any
letter of credit), or any part thereof not previously applied, may be turned
over or endorsed by Landlord to Landlord’s grantee, and, if actually turned
over, Tenant agrees to look solely to such grantee for proper application of
the proceeds in accordance with the terms of this Section, and the return
thereof in accordance herewith.  The
holder of a mortgage shall not be responsible to Tenant for the return of any
letter of credit or application of any such proceeds, whether or not it
succeeds to the position of Landlord hereunder, unless such proceeds or letter
of credit shall have actually been received by such holder.

6.             Permitted
Use.

                6.1          Permitted Use.  The Premises shall be used and occupied only
for the Permitted Use set forth in Section 1.9 and for no other purpose.  If Section 1.9 gives Tenant the right to use the
Premises for general office use, by way of example and not limitation, general
office use shall not include medical or dental office use or any similar use,
offices of a governmental agency or authority, clinic or laboratory use,
classroom use, or any other use not characterized by applicable zoning and land
use restrictions as general office use, or any use which would require Landlord
or Tenant to obtain a conditional use permit, special permit or variance from
any federal, state or local authority. Notwithstanding any Permitted Use set
forth in Section 1.9,
Tenant shall not use the Premises for any purpose that would violate the
Building’s certificate of occupancy, any conditional use permit, special permit
or variance applicable to the Property or violate any covenants, conditions or
other restrictions applicable to the Building or the Property.  No exclusive use has been granted to Tenant
hereunder.

                6.2          Compliance with Law.  Except as otherwise set forth below, Tenant
shall, at Tenant’s sole expense, promptly comply with all applicable laws and
ordinances, governmental rules, regulations, and orders, certificates of
occupancy, conditional use or other permits, variances, covenants and
restrictions of record, the reasonable recommendations of Landlord’s engineers
or other consultants, and all requirements of any fire insurance underwriters,
rating bureaus or government agencies, now in effect or which may hereafter
come into effect, whether or not they reflect a change in policy from that now
existing, during the Term or any part of the Term hereof, relating in any
manner to the Premises and the occupation and use by Tenant of the Premises (i.e., a use giving rise to legal or other requirements other
than those applicable to commercial business offices generally).  Except as otherwise set forth below, Tenant
shall, at Tenant’s sole expense, comply with those requirements of the
Americans With Disabilities Act that relate to the Premises or to Tenant’s
specific use of the Premises (or that apply by reason of any work performed in
the Premises by Tenant or the special needs of any employee, agent, contractor
or invitee of Tenant), and with all federal, state and local laws and
regulations governing occupational safety and health.  Tenant shall conduct its business and use the
Premises in a lawful manner and shall not use or permit the use of the Premises
or the Common Areas in any manner that will tend to create waste or a nuisance
or shall tend to disturb other occupants of the Building.  Tenant shall obtain, at its sole expense, any
permit or other governmental authorization required to operate its business
from the Premises. Landlord shall not be liable for the failure of any other
tenant or person to abide by the requirements of this Section 6 or to otherwise
comply with applicable laws and regulations and, to the extent permitted by
law, 

 17
 

Tenant shall not be excused from the performance of
its obligations under this Lease due to such a failure. Notwithstanding any of
the foregoing to the contrary, Tenant
shall not be required to make any alterations, modifications, renovations,
additions or improvements to the Premises that are mandated by such laws,
regulations or insurance requirements for all buildings of the nature of the
Building generally, except to the extent that such requirements would not have
been applicable (or that such work would not have been required) but for any
act, omission of, or special requirements of, Tenant or its agents, employees,
contractors or invitees as aforesaid. Such alterations, modifications,
renovations, additions or improvements shall be Landlord’s responsibility at
Landlord’s cost and expense (provided that the same may be included in
Operating Expenses). Furthermore,
Landlord shall be responsible for the cost of correcting or changing any system
or structural element of the Property, including the Premises, the need for
which arises solely from a violation of any governmental law or
regulation, if such violation existed on the date of this Lease, as determined
by written admission, stipulation, final judgment, or arbitration award.

                6.3          Condition of Premises. Tenant hereby accepts the Premises and the Building in
their condition existing as of the date this Lease is executed by Landlord and
Tenant, subject to all applicable federal, state and local laws, ordinances,
regulations and permits governing the use of the Premises, the Building’s
certificate of occupancy, any applicable permits, approvals or variances, and
any easements, covenants or restrictions affecting the use of the Premises or
the Property.  Tenant acknowledges that
it has satisfied itself by its own independent investigation that the Premises
and the Property are suitable for its intended use, and that neither Landlord
nor Landlord’s agents has made any representation or warranty as to the present
or future suitability of the Premises, or the Building or the Property for the
conduct of Tenant’s business.

7.             Maintenance,
Repairs and Alterations.

                7.1          Landlord’s
Obligations.  (a) 
Landlord shall keep the Building and Common Areas (including the parking
areas, walkways, driveways, landscaping and exterior lighting, structures,
floors, subfloors, slabs, glass, ceilings, common or party walls, as well as
the roof and exterior of the Building, and the plumbing, heating, lighting and
other building standard electrical equipment, ventilating equipment, air
conditioning equipment, and the elevators or escalators and life safety
systems, but excluding the interior of the Premises and space leased to other
occupants of the Building) in good condition and repair.  If Tenant becomes aware that plumbing, pipes,
electrical wiring, or HVAC ducts or vents within the Premises (that are not
part of any separate system or equipment installed by or for Tenant) are in
need of repair, Tenant shall notify Landlord promptly upon becoming aware of
the same, and Landlord shall cause the repairs to be completed within a
reasonable time and the cost thereof shall be included in Operating
Expenses.  Except as provided in Section 9.3, there shall be no abatement of rent or
liability to Tenant on account of any injury or interference with Tenant’s
business with respect to any improvements, alterations or repairs made by
Landlord to the Property or any part thereof. To the extent permitted by law,
and except as expressly provided in paragraph (b) below, Tenant expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford Tenant the right to make repairs at Landlord’s expense or to
terminate this Lease because of Landlord’s failure to keep the Property in good
order, condition and repair.  Landlord
shall never be liable for any failure to make repairs which Landlord has
undertaken to make under the provisions of this Section 7.1
or elsewhere in this Lease, unless Tenant has given notice to 

 18
 

Landlord of the need to make such repairs, and
Landlord has failed to commence to make such repairs within thirty (30) days
after receipt of such
notice (provided that, in the case of any failure posing an imminent threat to
Tenant’s property or to the safety of occupants, Tenant shall so advise
Landlord and such 30-day period will be shortened to that which is commercially
reasonable under the particular circumstances), or fails thereafter to proceed
with reasonable diligence to complete such repairs.

(b)  If (i) Landlord fails to make any repair to
the Premises after receipt of notice of the need therefor and within the time
period described in paragraph (a) above, and (ii) as a result of such failure
there is interference with Tenant’s ability to use the Premises for the
reasonable conduct of Tenant’s business, and (iii) such failure to repair
involves only an area within the Premises and does not involve the structure of
the Building or any of the electrical, mechanical or plumbing systems in the
Building that serve areas other than the Premises, then Tenant may give
Landlord a second notice of such failure and stating that Tenant intends to
cure such failure. A copy of such notice shall be delivered to Landlord’s
managing agent (in addition to any other parties required hereunder), and the
envelope in which any such notice or copy is delivered shall be marked
in prominent lettering “NOTICE OF FAILURE — IMMEDIATE RESPONSE REQUIRED.” If Landlord shall fail to advise Tenant
within five (5) additional business days after receipt of such notice that
Landlord has commenced to restore such services or utilities, then Tenant may
(as its sole remedy) commence and thereafter diligently pursue the same to
completion (provided that, in the case of any failure posing an imminent threat
to Tenant’s property or to the safety of occupants, Tenant shall so advise
Landlord and Tenant shall not be required to wait for such additional 5-day
period before commencing repairs). Tenant shall undertake any such work using
qualified contractors and suppliers, and in complete accordance with all
applicable laws, codes and ordinances. Once Tenant commences such restoration,
Tenant shall not discontinue or abandon the same without Landlord’s consent,
which shall not be unreasonably withheld. Landlord shall reimburse Tenant for
the actual and reasonable out-of-pocket cost to Tenant of completing such
restoration, within thirty (30) days after receipt from Tenant of invoices
evidencing the same. Tenant shall in no event have the right to deduct or
offset any such amounts from payments of rent, additional rent or any other
amount payable by Tenant under this Lease.

7.2          Tenant’s
Obligations.

(a)           Subject to Landlord’s maintenance and
repair obligations set forth in Section 7.1,
and to the requirements of Section 7.3,
Tenant shall be responsible for keeping the Premises in good condition and
repair, at Tenant’s sole expense.  By way
of example, and not limitation, Tenant shall be responsible, at Tenant’s sole
expense, for repairing and/or replacing carpet, marble, tile or other flooring,
paint, wall coverings, corridor and interior doors and door hardware, telephone
and computer equipment, interior glass, window treatments, ceiling tiles,
shelving, cabinets, millwork and other tenant improvements made by or for
Tenant.  In addition, Tenant shall be
responsible for the installation, maintenance and repair of all of Tenant’s
required telephone, computer, and related cabling from the telephone terminal
room on the floor on which the Premises is located to and throughout the Premises,
and Tenant shall be responsible for any loss, cost, damage, liability and
expense (including without limitation reasonable attorneys’ fees) arising out
of or related to the installation, maintenance, repair and replacement of such
cabling.  If Tenant fails to keep the
Premises in good condition and repair, Landlord may,

 19
 

but shall not be
obligated to, make any necessary repairs. 
If Landlord makes such repairs, Landlord may bill Tenant for the cost of
the repairs as additional rent, and said additional rent shall be payable by
Tenant within thirty (30) days after receipt of Landlord’s invoice therefor.

(b)           On the last day of the Term hereof,
or on any sooner termination, Tenant shall surrender the Premises, together
with any Alterations made by Tenant in accordance with this Lease and which
Tenant is not obligated to remove pursuant to Section 7.3,
to Landlord in the condition in which Tenant is required to keep the Premises
pursuant to Section 7.2(a),
ordinary wear and tear and damage by fire or other casualty excepted, clean and
free of debris and Tenant’s personal property. 
Tenant shall repair any damage to the Premises occasioned by the
installation or removal of Tenant’s personal property, trade fixtures,
furnishings and equipment and any Alterations that Landlord requires Tenant to
remove pursuant to Section 7.3.  Unless Landlord otherwise requires pursuant
to Section 7.3, Tenant shall leave
the electrical distribution systems, plumbing systems, lighting fixtures, HVAC
ducts and vents, window treatments, wall coverings, carpets and other floor
coverings, doors and door hardware, millwork, ceilings and other tenant improvements
at the Premises and in good condition, ordinary wear and tear and damage by
casualty excepted. The parties hereby acknowledge and agree that, except with
respect to specialty items or features such as extensive glazed partitions,
Tenant shall not be obligated to remove any portion of the Landlord’s Work from
Premises upon the expiration or earlier termination of the Lease.
Notwithstanding the foregoing, Tenant shall not pull or otherwise remove any
computer network cabling, telephone cabling or similar items which Tenant has
installed in the Premises, without Landlord’s prior written consent, which
shall not be unreasonably withheld, conditioned or delayed.  In the event of any such removal, Tenant
shall repair any damage to the Premises occasioned thereby.

7.3          Alterations and Additions.

(a)           Except as provided herein, Tenant
shall not, without Landlord’s prior written consent, make any alterations,
improvements, additions, utility installations or repairs (hereinafter
collectively referred to as “Alterations”) in, on or about the Premises or the
Property.  Alterations shall include, but
shall not be limited to, the installation or alteration of security or fire
protection systems, communication systems, millwork, shelving, file retrieval
or storage systems, carpeting or other floor covering, window and wall
coverings, electrical distribution systems, lighting fixtures, telephone or
computer system wiring, HVAC and plumbing. Landlord agrees that its consent
shall not be unreasonably withheld, conditioned or delayed as to non-structural
Alterations proposed by Tenant that do not affect the electrical, mechanical or
plumbing systems of the Building or the Premises. As to Alterations for which
Landlord’s consent is given hereunder, if Tenant so requests at the time of its
request for consent, Landlord shall, at the time of giving such consent, advise
Tenant as to whether Landlord will require the removal of such Alterations and
the restoration of the Premises and the Building to their prior condition at
the expiration or earlier termination of this Lease, such removal and
restoration to be at Tenant’s expense. As to any other Alterations, at the
expiration of the Term, Landlord may require the removal of any Alterations
installed by Tenant and the restoration of the Premises and the Building to
their prior condition, at Tenant’s expense. 
If, as a result of any Alteration made by Tenant, Landlord is obligated
to comply with the Americans With Disabilities Act or any other law or
regulation and such compliance requires Landlord to make any improvement or
alteration to any portion of the Building, as a condition to Landlord’s
consent, Landlord shall 

 20
 

have the right to require
Tenant to pay to Landlord prior to the construction of any Alteration by
Tenant, the entire cost of any improvement or alteration Landlord is obligated
to complete by such law or regulation. 
With respect to any Alterations for which Landlord’s approval is
required, Tenant shall reimburse Landlord for the actual and reasonable
overhead and other costs it incurs in reviewing the plans for the Alterations
and in monitoring the construction of the Alterations.  Should Landlord permit Tenant to make such
Alterations, Tenant shall use only such contractor as has been expressly
approved by Landlord, which approval shall not be unreasonably withheld, and
with respect to any Alterations (or any group or series of related alterations
comprising one project) costing twenty-five thousand dollars ($25,000) or more,
Landlord may require Tenant to provide to Landlord, at Tenant’s sole cost and
expense, a lien and completion bond in an amount equal to one and one-half
times the estimated cost of such Alterations, to insure Landlord against any
liability for mechanic’s and materialmen’s liens and to insure completion of
the work.  Should Tenant make any
Alterations without the prior approval of Landlord, or use a contractor not
expressly approved by Landlord, Landlord may, at any time during the term of
this Lease, require that Tenant remove all or part of the Alterations and
return the Premises to the condition it was in prior to the making of the
Alterations.  In the event Tenant makes
any Alterations, Tenant agrees to obtain or cause its contractor to obtain,
prior to the commencement of any work, “builder’s all risk” insurance in an
amount reasonably approved by Landlord and workers compensation insurance.

(b)           Any request for Landlord’s consent to
Alterations in or about the Premises that Tenant shall desire to make shall be
presented to Landlord in written form, with plans and specifications which are
sufficiently detailed to obtain a building permit (if and to the extent
necessary in light of the Alterations being proposed).  If Landlord consents to an Alteration, the
consent shall be deemed conditioned upon Tenant acquiring a building permit (if
necessary) and any other licenses, permits, approvals or authorizations
required therefor from the applicable governmental agencies, furnishing copies
thereof to Landlord prior to the commencement of the work, and compliance by
Tenant with all conditions of said permits, licenses, approvals and
authorizations in a prompt and expeditious manner. Tenant shall provide
Landlord with as-built plans and specifications for any Alterations made to the
Premises.

(c)           Tenant shall pay, when due, all
claims for labor or materials furnished or alleged to have been furnished to or
for Tenant at or for use in the Premises, which claims are or may be secured by
any mechanic’s or materialmen’s lien against the Premises or the Building, or any
interest therein.  If Tenant shall, in
good faith, contest the validity of any such lien, Tenant shall furnish to
Landlord a surety bond satisfactory to Landlord in an amount equal to not less
than one and one half (11⁄2) times the amount of such contested lien claim
indemnifying Landlord against liability arising out of such lien or claim.  Such bond shall be sufficient in form and
amount to free the Property from the effect of such lien.  In addition, Landlord may require Tenant to
pay Landlord’s reasonable attorneys’ fees and costs in participating in such
action.

(d)           Tenant shall give Landlord not less
than ten (10) days’ advance written notice prior to the commencement of any
work in the Premises by Tenant, and Landlord shall have the right to post notices
of non-responsibility in or on the Premises or the Property.

(e)           All Alterations
(whether or not such Alterations constitute trade fixtures of Tenant) which may
be made to the Premises by Tenant shall be paid for by Tenant, at Tenant’s 

 21
 

sole expense, and shall
be made and done in a good and workmanlike manner and with new materials
reasonably satisfactory to Landlord, and such Alterations shall be the property
of Landlord and remain upon and be surrendered with the Premises at the
expiration of the Lease Term, unless Landlord requires their removal pursuant
to Section 7.3(a). Tenant’s
personal property and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises
or the Property, shall remain the property of Tenant and may be removed by
Tenant subject to the provisions of Section
7.2(b).

                7.4          Failure of Tenant to Remove Property.  If this Lease expires or is otherwise
terminated, and Tenant fails to remove its property as required by Section 7.2(b), in
addition to any other remedies available to Landlord under this Lease, and
subject to any other right or remedy Landlord may have under applicable law,
Landlord may remove any property of Tenant from the Premises and store the same
elsewhere at the expense and risk of Tenant. If such property is not claimed
within thirty (30) days, Landlord may at its option dispose of the same in any
manner Landlord in its sole discretion deems appropriate. All of Landlord’s
costs and expenses of removal and storage (and other amounts owed by Tenant to
Landlord) shall be paid by Tenant within thirty (30) days after Tenant’s
receipt of an invoice therefor, and any proceeds realized by Landlord may be
applied to Landlord’s costs and expenses and other amounts owed by Tenant to
Landlord.

8.             Insurance.

8.1          Insurance-Tenant.

(a)           Tenant shall obtain
and keep in force during the Term of this Lease a commercial general liability
policy of insurance with coverages reasonably acceptable to Landlord, which
shall without limitation protect Tenant and Landlord, any lender of Landlord
and such other persons as Landlord may reasonably request as additional
insureds, against claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount
not less than $2,000,000 per occurrence with an “Additional Insured-Managers
and Landlords of Premises Endorsement” and contain the “Amendment of the
Pollution Exclusion” for damage caused by heat, smoke or fumes from a hostile
fire.  The policy shall not contain any
intra-insured exclusions as between insured persons or organizations, but shall
include coverage for liability assumed under this Lease (as the same may be
amended or modified from time to time) as an “insured contract.”

(b)           Tenant shall obtain
and keep in force during the term of this Lease “special form” property
insurance with coverages acceptable to Landlord, in Landlord’s sole discretion.
Said insurance shall be written on a one hundred percent (100%) replacement
cost basis on Tenant’s personal property, all tenant improvements installed at
the Premises by Landlord or Tenant, Tenant’s trade fixtures and other
property.  Such policies shall provide
protection against any peril included within the classification “fire and
extended coverage,” or “special form coverage” against vandalism and malicious
mischief, theft, sprinkler leakage, earthquake damage and flood damage.  If this Lease is terminated as the result of
a casualty in accordance with Section 9,
the proceeds of said insurance attributable to the replacement of all tenant
improvements at the Premises shall be paid to Landlord.

 

 22

(c)           Tenant shall, at all
times during the term hereof, maintain in effect workers’ compensation
insurance as required by applicable law and business interruption and extra
expense insurance satisfactory to Landlord.

(d)           From time to time,
upon not less than thirty (30) days prior written notice to Tenant, Landlord
may require Tenant to carry such additional insurance or higher coverage
amounts as landlords of comparable buildings in the geographical area of the
Property are requiring of their tenants.

(e)           Tenant shall have
the right to provide its required insurance coverage pursuant to blanket
policies obtained by the Tenant.

8.2          Insurance-Landlord.

(c)           Landlord shall
obtain and keep in force a policy of general liability insurance providing
coverage to Landlord with respect to liability arising out of the ownership,
operation and management of the Property.

(d)           Landlord shall also
obtain and keep in force during the Term of this Lease a commercially
reasonable policy or policies of insurance covering loss or damage to the
Property (excluding any alterations or improvements made by Tenant).  The terms and conditions of said policies and
the perils and risks covered thereby shall be determined by Landlord, from time
to time, in Landlord’s sole discretion. 
In addition, at Landlord’s option, Landlord shall obtain and keep in
force, during the term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance shall, at Landlord’s
option, also cover all Operating Expenses. 
At Landlord’s option, Landlord may obtain insurance coverages and/or
bonds related to the operation of the parking areas. In addition, Landlord
shall have the right to obtain such additional insurance as is customarily
carried by prudent and sophisticated owners or operators of other comparable
office buildings in the geographical area of the Property.  Tenant will not be named as an additional
insured in any insurance policies carried by Landlord and shall have no right
to any proceeds therefrom.  The policies
purchased by Landlord shall contain such deductibles as Landlord may reasonably
determine.  In addition to amounts
payable by Tenant in accordance with Section 4.2,
Tenant shall pay any increase in the property insurance premiums for the
Property over what was payable immediately prior to the increase to the extent
the increase is specified by Landlord’s insurance carrier as being caused by
the nature of Tenant’s occupancy or any act or omission of Tenant.

8.3          Insurance
Policies.  Tenant shall deliver to Landlord certificates
evidencing the issuance and validity of the insurance policies required under Section 8.1 not later than fifteen (15) days prior to the
Commencement Date of this Lease, and Landlord shall have the right, upon
request, to receive the actual policies in order to verify that the terms and
conditions of said policies conform to the requirements hereof.  Tenant’s insurance policies shall not be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to Landlord.  Tenant shall, at least thirty (30) days prior
to the expiration of such policies, furnish Landlord with certificates
evidencing renewal thereof.  Tenant’s
insurance policies shall be issued by insurance companies authorized to do
business in the state in which the Property is located, and said companies
shall maintain during the policy term a “General Policyholder’s Rating” of at
least A-X (or such other rating as may be required by any lender

 23
 

having a lien on the Property) as set forth in the
most recent edition of “Best Insurance Reports.”  All insurance obtained by Tenant shall be
primary to and not contributory with any similar insurance carried by Landlord,
whose insurance shall be considered excess insurance only.  Landlord, and at Landlord’s option, the
holder of any mortgage or deed of trust encumbering the Building and any person
or entity managing the Building on behalf of Landlord, shall be named as an
additional insured on all insurance policies Tenant is obligated to obtain by Section 8.1 above. 
Tenant’s insurance policies shall not include deductibles in excess of
Five Thousand Dollars ($5,000).

8.4          Waiver
of Claims and Subrogation.  Landlord
waives any and all rights of recovery against Tenant for or arising out of
damage to, or destruction of, the Property. 
Landlord’s waiver shall not relieve Tenant from liability under Section 21 below except to the extent
Landlord’s insurance company actually satisfies Tenant’s obligations under Section 21 in accordance with the
requirements of Section 21. Tenant
waives any and all rights of recovery against Landlord, Landlord’s employees,
agents and contractors for liability or damages if such liability or damage is
covered by Tenant’s insurance policies then in force or the insurance policies
Tenant is required to obtain by Section 8.1
(whether or not the insurance Tenant is required to obtain by Section 8.1 is then in force and effect),
whichever is broader. Tenant’s waiver shall not relieve Landlord from liability
under Section 21 below except to
the extent Tenant’s insurance company actually pays or reimburses Tenant for
Tenant’s loss. Each party shall cause the insurance policies it obtains in
accordance with this Section 8 to provide that the insurance company consents
to the foregoing waivers by the parties and that it waives all right of
recovery by subrogation against the other party in connection with any
liability or damage covered by any policy or policies covering the insured
party.

8.5          Coverage.  Landlord makes no representation to Tenant
that the limits or forms of coverage specified above or approved by Landlord
are adequate to insure Tenant’s property or Tenant’s obligations under this
Lease, and the limits of any insurance carried by Tenant shall not limit Tenant’s
obligations or liability under any indemnity provision included in this Lease
or under any other provision of this Lease.

9.             Damage or
Destruction.

9.1          Effect of Damage or Destruction.   (a) If all or part of the
Building is damaged by fire, earthquake, flood, explosion, the elements, riot,
the release or existence of Hazardous Substances (as defined below) or by any
other cause whatsoever (hereinafter collectively referred to as “damages”), but
the damages are not material (as defined in Section 9.2
below), Landlord shall promptly and diligently pursue appropriate insurance
claims and settlements, and following receipt of proceeds from appropriate
insurance policies, Landlord shall diligently commence and complete repair of
the damage to the Building within a commercially reasonable time, and this
Lease shall remain in full force and effect. If all or part of the Building is
destroyed or materially damaged (as defined in Section 9.2 below), Landlord
shall have the right, in its sole and complete discretion, to repair or to
rebuild the Building or to terminate this Lease. Landlord shall within sixty
(60) days after the occurrence of such material damage or destruction notify
Tenant (a “Landlord Election Notice”) in
writing of Landlord’s intention to repair or to rebuild or to

 24
 

terminate this
Lease.  Except for the rent abatement
referred to in Section 7.3, Tenant shall in no event be entitled to
compensation or damages on account of annoyance or inconvenience in making any
repairs, or on account of construction, or on account of Landlord’s election to
terminate this Lease.

(b)           Notwithstanding the foregoing, if the
Premises are destroyed or materially damaged as aforesaid and Landlord in good
faith determines that the Premises cannot be rebuilt or repaired within two
hundred seventy (270) days from the time
that repair work would commence, without payment of overtime or other
premiums, and such damage will render the entire Premises Untenantable during
said two hundred seventy (270) day period, Landlord shall in the Landlord’s
Election Notice advise Tenant thereof, and Tenant shall thereafter have a
period of fifteen (15) days within which Tenant may elect to terminate this
Lease, such termination to be effective upon written notice to Landlord. If Landlord
does not give a Landlord’s Election Notice within the 60-day period referred to
in paragraph (a) above,
then Tenant may give Landlord a notice of such failure, which shall clearly
state that failure to give the Landlord’s Election Notice may result in a
termination of this Lease.. A copy of such notice from Tenant shall be
delivered to Landlord’s managing agent (in addition to any other parties
required hereunder), and the envelope in which any such notice or copy is
delivered shall be marked in prominent lettering “NOTICE OF FAILURE —
IMMEDIATE RESPONSE REQUIRED.” If the
Landlord does not give a Landlord’s Election Notice within ten (10) days after
the receipt of Tenant’s notice, then Tenant shall thereafter have a
period of fifteen (15) days within which Tenant may elect to terminate this
Lease, such termination to be effective upon written notice to Landlord.  As used in this Article 9, the term “Premises”
shall mean the Premises itself and such portions of the common areas and
facilities of the Building as are necessary to provide reasonably safe access
to the Premises and to provide those building services, such as parking
facilities, utilities, elevator and HVAC service, that Landlord is required to
provide hereunder. In addition, if Tenant does not so elect to terminate this
Lease within such 15-day period, and if Landlord’s restoration work in the
Premises is not substantially completed within two hundred seventy (270) days
after the date of the occurrence of the damage or destruction (which 270-day
period shall be extended (i) for such time as Landlord is prevented or delayed
by acts or omissions of Tenant, or (ii) for such time as Landlord is prevented
or delayed by any Force Majeure, then Tenant may again elect to terminate this
Lease, any such termination to be effective on the forty-fifth (45th) day after written notice to Landlord of
such termination (unless restoration work to the Premises is substantially
completed within such 45-day period).

(c)           Subject to Section 9.3
below, if Landlord or Tenant terminates this Lease in accordance with this Section 9.1, Tenant shall continue to pay all Base Rent,
Operating Expense increases and other amounts due hereunder which arise prior
to the date of termination.

9.2          Definition
of Material Damage.  Damage to the Building or the Premises shall
be deemed material if, in Landlord’s reasonable judgment, the uninsured cost of
repairing the damage will exceed Twenty-Five Thousand Dollars ($25,000).  If insurance proceeds are available to
Landlord in an amount which is sufficient to pay the entire cost of repairing
all of the damage to the Premises or the Building (subject to any applicable
deductible), the damage shall be deemed material if the cost of repairing the
damage exceeds One Hundred Thousand Dollars ($100,000).  Damage to the Premises or the Building shall
also be deemed material if (a) the

 25
 

Premises or the Building, as the case may be, cannot
be rebuilt or repaired to substantially the same condition it was in prior to
the damage due to laws or regulations in effect at the time the repairs will be
made, (b) the holder of any mortgage or deed of trust encumbering the Property
requires that insurance proceeds available to repair the damage in excess of
Twenty-Five Thousand Dollars ($25,000) be applied to the repayment of the
indebtedness secured by the mortgage or the deed of trust, or (c) the damage
occurs during the last twelve (12) months of the Lease Term.

9.3          Abatement
of Rent.  If Landlord elects to repair damage to the
Property and all or part of the Premises will be unusable or inaccessible to
Tenant in the ordinary conduct of its business until the damage is repaired,
Tenant’s Base Rent and Tenant’s Share of Operating Expense increases and Tenant’s
Share of Real Property Taxes shall be abated until the repairs are completed in
proportion to the amount of the Premises which is unusable or inaccessible to
Tenant in the ordinary conduct of its business. 
Notwithstanding the foregoing, there shall be no abatement of Base Rent,
Tenant’s Share of Operating Expense increases or Tenant’s Share of Real
Property Taxes by reason of any portion of the Premises being unusable or
inaccessible for a period equal to three (3) consecutive business days or less.

9.4          Tenant’s
Acts.  If such damage
or destruction occurs as a result of the negligence or the intentional acts of
Tenant or Tenant’s employees, agents, contractors or invitees, and the proceeds
of insurance which are actually received by Landlord or its mortgagee (or, if
Landlord was not carrying the insurance that Landlord is required to carry
under this Lease, then the proceeds that would have been received if Landlord
were carrying all such insurance)  are not
sufficient to pay for the repair of all of the damage, Tenant shall pay, at
Tenant’s sole cost and expense, to Landlord within thirty (30) days after
written demand, the difference between the cost of repairing the damage and the
insurance proceeds received by Landlord.

9.5          Tenant’s
Property.  As more
fully set forth in Section 22,
Landlord shall not be liable to Tenant or its employees, agents, contractors,
invitees or customers for loss or damage to merchandise, tenant improvements,
fixtures, automobiles, furniture, equipment, computers, files or other property
(hereinafter in this Section 9.5
collectively “Tenant’s Property”) located at the Property, unless damaged due
to the gross negligence or willful misconduct of Landlord, its employees or
agents.  Tenant shall repair or replace
all of Tenant’s property at Tenant’s sole cost and expense.  Tenant acknowledges that it is Tenant’s sole
responsibility to obtain adequate insurance coverage to compensate Tenant for
damage to Tenant’s property.

9.6          Waiver.  Landlord and Tenant hereby waive the
provisions of any present or future statutes which relate to the termination of
leases when leased property is damaged or destroyed and agree that such event
shall be governed by the terms of this Lease.

10.          Real and
Personal Property Taxes.

10.1        Payment
of Taxes.  Tenant shall pay to Landlord during the Term
of this Lease, in addition to Base Rent and Tenant’s Share of Operating Expense
increases, Tenant’s Share of the amount by which all “Real Property Taxes” (as
defined in Section 10.2 below) for each
Comparison Year exceeds the amount of all Real Property Taxes for the Tax Base
Year.  Tenant’s Share of Real Property
Tax increases shall be payable by Tenant at the same time, in

 26
 

the same manner and under the same terms and
conditions as Tenant pays Tenant’s Share of Operating Expense increases as
provided in Section 4.2(f) of this Lease.  Except as expressly provided in Section 10.4 below, if the Real Property Taxes incurred
during any Comparison Year are less than the Real Property Taxes incurred
during the Tax Base Year, Tenant shall not be entitled to receive any credit,
offset, reduction or benefit as a result of said occurrence.

10.2        Definition
of “Real Property Tax”. 
As used herein, the term “Real Property Taxes”
shall mean (i) all taxes, assessments (special or otherwise), levies, fees
and all other government levies, exactions and charges of every kind and
nature, general and special, ordinary and extraordinary, foreseen and
unforeseen, which are, at any time prior to or during the Term, imposed or
levied upon or assessed against the Property or any portion thereof, or against
any Base Rent, additional rent or other rent of any kind or nature payable to
Landlord by anyone on account of the ownership, leasing or operation of the
Property, or which arise on account of or in respect of the ownership,
development, leasing, operation or use of the Property or any portion thereof;
(ii) all gross receipts taxes or similar taxes imposed or levied upon,
assessed against or measured by any Base Rent, additional rent or other rent of
any  kind or nature or other sum payable
to Landlord by anyone on account of the ownership, development, leasing,
operation, or use of the Property or any portion thereof; (iii) all value
added, use and similar taxes at any time levied, assessed or payable on account
of the ownership, development, leasing, operation, or use of the Property or
any portion thereof; and (iv) reasonable expenses of any proceeding for
abatement of any of the foregoing items included in Real Property Taxes,
provided Landlord prevails in such abatement proceeding; but the amount of
special taxes or special assessments included in Real Property Taxes shall be
limited to the amount of the installment (plus any interest, other than penalty
interest, payable thereon) of such special tax or special assessment required
to be paid during the year in respect of which such Real Property Taxes are
being determined. There shall be excluded from Real Property Taxes all income,
estate, succession, inheritance and transfer taxes of Landlord or any tax
defined as an Operating Expense by Section 4.2(c);
provided, however, that if at any time during the Term the present system of ad
valorem taxation of real property shall be changed so that a capital levy,
franchise, income, profits, sales, rental, use and occupancy, or other tax or
charge shall in whole or in part be substituted for, or added to, such ad
valorem tax and levied against, or be payable by, Landlord with respect to the
Property or any portion thereof, such tax or charge shall be included in the
term “Real Property Taxes” for the purposes
of this Lease.

10.3        Personal
Property Taxes.  Tenant
shall pay prior to delinquency all taxes assessed against and levied upon trade
fixtures, furnishings, equipment and all other personal property of Tenant
contained in the Premises or related to Tenant’s use of the Premises.  If any of Tenant’s personal property shall be
assessed with Landlord’s real or personal property, Tenant shall pay to
Landlord the taxes attributable to Tenant within thirty (30) days after receipt
of a written statement from Landlord setting forth the taxes applicable to
Tenant’s property.

10.4        Reassessments.  From time to time Landlord may challenge the
assessed value of the Building and Land as determined by applicable taxing
authorities and/or Landlord may attempt to cause the Real Property Taxes to be
reduced on other grounds.  If Landlord is
successful in causing the Real Property Taxes to be reduced or in obtaining a
refund, rebate, credit or similar benefit (hereinafter in this Section 10.4 collectively referred to as a “reduction”), Landlord shall, after
deducting the costs reasonably incurred by Landlord in

 27
 

causing the reduction to be made, credit the
reduction(s) to Real Property Taxes for the calendar year to which a reduction
applies and to recalculate the Real Property Taxes owed by Tenant for years
after the year in which the reduction applies based on the reduced Real
Property Taxes (if a reduction applies to Tenant’s Tax Base Year, the Tax Base
Year Real Property Taxes shall be reduced by the amount of the reduction and
Tenant’s Share of Real Property Tax increases shall be recalculated for all
Comparison Years following the year of the reduction based on the lower Tax
Base Year amount).  After deducting
Landlord’s reasonably incurred expenses as hereinabove provided, Landlord
shall, within thirty (30) days after Landlord actually receives net proceeds
thereof, refund to Tenant Tenant’s Share of the reduction of Real Property
Taxes (exclusive of interest) for the years to which any reductions apply.

11.          Utilities.

11.1        Services
Provided by Landlord.  Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall use commercially
reasonable efforts to provide:

a.             heating, ventilation and air
conditioning to the Common Areas and the Premises during the times described in
Section 11.4, and sufficient to
maintain reasonably comfortable temperature and conditions;

b.             electricity within the Premises at a
level sufficient to reasonably accommodate normal business office uses with the
improvements to be made by Landlord as part of Landlord’s Work as reflected on
the Plans approved by Landlord, and in the Common Areas, and the replacement of
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures in the Common Areas (Landlord will replace light bulbs and/or
fluorescent tubes and ballasts for standard overhead fixtures in the Premises
at Tenant’s expense);

c.             domestic water supply to the
Premises (at the temperature and pressure provided by the applicable utility
company), and hot and cold water to the Common Areas for reasonable and normal
drinking and lavatory use;

d.             building standard janitorial
services (including window cleaning), substantially consistent with the
standards set forth in Exhibit A-3;

e.             maintenance of the Common Areas, as described in Section
7.1, including reasonable landscaping and snow and ice removal;

f.              at least one (1) passenger elevator during normal
Building hours; and

g.             access to the Premises, including parking areas,
twenty-four hours per day, three hundred sixty-five days per year, subject to
reasonable security systems and precautions from time to time in effect, and
subject always to emergency conditions.

11.2        Intentionally
Omitted.

11.3        Services
Exclusive to Tenant.  Tenant shall pay directly to the provider
thereof, on or before the date when due and in addition to payments of Base
Rent and other additional

 28
 

rent provided for herein,
the costs of all electricity used in the Premises (including, but not limited
to, for HVAC), water, gas, heat, heat pump fuel, telephone and any other
utilities and services supplied and/or metered exclusively to the Premises or
to Tenant, together with any taxes thereon. Tenant acknowledges that, as of the
date hereof, electricity provided to the Premises is measured by a submeter,
and that natural gas, water and sewer service are all metered to the
Building.  If Landlord measures
electricity or any other utility usage in the Premises by a submeter, Tenant
shall pay the costs as shown on such submeter to Landlord, as additional rent,
at Landlord’s actual cost for such services, without mark-up, within thirty
(30) days after receipt of an invoice therefor. If any such services are not
separately metered or submetered to the Premises, Tenant shall pay Tenant’s
Share thereof as an Operating Expense.

11.4        Hours
of Service.  Building
services described in Section 11.1(a)-(c)
and (e)-(f)shall be provided Monday through
Friday from 8:00 a.m. to 6:00 p.m. and Saturdays from 9:00 a.m. to 1:00
p.m.  Janitorial services described in Section 11.1(d) shall be provided Monday through
Friday.  Other Building services, if any,
shall not be provided at other times or on nationally recognized holidays.
Nationally recognized holidays are: New Years Day, Martin Luther King Jr. Day,
Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day (and the following day when any such day occurs on Sunday)
and such other days that may hereafter be designated as national holidays.

11.5        Excess
Usage by Tenant. Notwithstanding the Permitted Use set forth
in Section 1.9, Tenant shall not use
Building utilities or services in excess of those used by the average office
building tenant using its premises for ordinary office use; provided, however,
that the parties hereby acknowledge and agree that Tenant may use the Building
utilities or services for the Permitted Use, as contemplated by the Layout Plan
attached hereto as Exhibit A, and Landlord agrees that the HVAC capacity
of the Building and the Premises upon completion of the Landlord’s Work in
accordance with the Plans will be adequate for normal office use in the
Premises as reflected on the Plans, given an occupancy not exceeding one person
per 125 square feet of usable area in the Premises.  Tenant shall not install at the Premises
office machines, lighting fixtures or other equipment which will generate above
average heat, noise or vibration at the Premises or which will adversely affect
the Building’s HVAC or other systems. If the Premises include or if Tenant
hereafter installs any computer, telecommunications or other so-called “special
purpose” room or area, other than the “computer room” currently identified on
the Layout Plan attached hereto as Exhibit A, Tenant shall at its sole
cost and expense, provide such supplemental heating, ventilation and air
conditioning equipment and systems (the “Supplemental Systems”)
as may be required to keep such room or area at the proper temperature and
environmental conditions. All Supplemental Systems shall be subject to Landlord’s
prior review and consent and other conditions in Article 7,
and if approved, shall be maintained, repaired and replaced as necessary by
Tenant, so as not to impose any additional load on the Building systems. Tenant
shall pay, as additional rent, the cost of electricity, water and other
materials necessary for the proper operation of Supplemental Systems, as well
as any costs or expenses incurred by Landlord to provide additional capacity
for Building systems to accommodate or provide the same. Without limiting the
foregoing, if Tenant does use Building utilities or services in excess of those
used by the average office building tenant, Landlord shall have the right (but
no obligation), in addition to any other rights or remedies it may have under
this Lease, to (a) at Tenant’s expense, install additional equipment and/or
separate metering devices at the Premises, and to charge Tenant therefor and
for such usage, (b) require Tenant to

 29
 

install Supplemental Systems as provided above, (c)
require Tenant to pay to Landlord all costs, expenses and damages incurred by
Landlord as a result of such usage, and/or (d) require Tenant to stop using
excess utilities or services.

11.6        Interruptions. (a)  Except as expressly provided below, Tenant agrees
that Landlord shall not be liable to Tenant for its failure to furnish gas,
electricity, telephone service, water, HVAC or any other utility services or
building services when such failure is occasioned, in whole or in part, by
repairs, replacements, or improvements, by any strike, lockout or other labor
trouble, by inability to secure electricity, gas, water, telephone service or
other utility at the Building, by any accident, casualty or event arising from
any cause whatsoever, including the negligence of Landlord, its employees,
agents and contractors, by act, negligence or default of Tenant or any other
person or entity, or by any other cause and, to the extent permitted by law,
such failures shall never be deemed to constitute an eviction or disturbance of
Tenant’s use and possession of the Premises or relieve Tenant from the
obligation of paying rent or performing any of its obligations under this
Lease.  Furthermore, Landlord shall not
be liable under any circumstances for loss of property or for injury to, or
interference with, Tenant’s business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any such services or utilities.  Landlord may comply with voluntary controls
or guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease.

(b)           Notwithstanding the foregoing to the
contrary, if, due to any act or omission of Landlord or Landlord’s agents or
employees, Tenant is prevented from receiving essential services or utilities
that Landlord is obligated to perform or deliver under this Lease, and such
interruption of essential services or utilities renders all or a material
portion of the Premises “Untenantable” (meaning that Tenant is unable to use
and occupy the Premises or such portion in a reasonably safe manner for the
conduct of Tenant’s business), and if such interruption resulting in
Untenantability shall continue for a period of five (5) consecutive business
days after notice thereof from Tenant to Landlord that the Premises are
Untenantable as a result thereof, then Base Rent and additional rent shall
abate commencing on the sixth (6th) business day after such notice (and, if less
than all of the Premises rendered Untenantable by such interruption, such
abatement shall be pro-rated according to the area rendered Untenantable) until
such time as such services or utilities are restored.

(c)           In
addition to the foregoing, if, as a result of any act or omission by Landlord
as described in paragraph (b) above, the Premises are rendered Untenantable for
more than sixty (60) consecutive days after written notice thereof from Tenant
to Landlord, and Tenant shall actually have vacated the Premises as a result of
such failure, then Tenant shall have the right to terminate this Lease by
giving Landlord notice of its desire to do so, whereupon this Lease shall
terminate on the fifteenth (15th) day after the giving of such notice with the
same force and effect as if such 15th day were the date originally set forth herein
as the expiration date hereof, unless within such 15-day period Landlord has
made the necessary repairs or taken such action as may be necessary to make the
Premises tenantable. The foregoing paragraph (b) and this paragraph (c) shall
not apply to any failure to perform services to the extent the same arises from
any act or omission of Tenant or its agents, contractors or employees, or from
fire or casualty, Force Majeure or taking or
condemnation by the power of eminent domain. Tenant’s rights under paragraph
(b) and this

 30
 

paragraph (c) shall be Tenant’s sole and exclusive remedies
for any loss or damage arising from any such Untenantability arising from such
an interruption.

12.          Assignment
and Subletting.

12.1        Landlord’s
Consent Required. (a) Except as otherwise expressly provided
herein, Tenant shall not
voluntarily or by operation of law assign, pledge, hypothecate, mortgage,
sublet, or otherwise transfer or encumber all or any part of Tenant’s interest
in this Lease or in the Premises (any of the foregoing hereinafter may be
referred to as a “Transfer”), or
permit any Transfer to occur, without Landlord’s prior written consent in each
case, which shall be given or withheld according to the standards set forth
below.  A “Transfer” requiring Landlord’s
consent hereunder shall include, without limitation, the use or occupancy of
the Premises or any part thereof by any party other than Tenant, and the
granting of concessions, licenses and the like with respect to the Premises or
any part thereof.  Landlord shall respond
to Tenant’s written request for consent hereunder within thirty (30) days after
Landlord’s receipt of the written request from Tenant. If Landlord fails to
respond (which means failure to approve, disapprove or request additional
information consistent with the requirements of this Section 12)
to any request for Landlord’s consent hereunder within such 30-day period,
Tenant may give Landlord an additional notice of such failure.  A copy of such additional notice shall be
delivered to Landlord’s managing agent (in addition to any other parties
required hereunder), and the envelope in which any such notice or copy is
delivered shall be marked in prominent lettering “NOTICE OF FAILURE —
IMMEDIATE RESPONSE REQUIRED.” If
Landlord shall fail to respond within five (5) additional business days after
receipt of such notice, then Landlord shall be deemed to have approved such
request. Any attempted Transfer without such consent shall be void and shall
constitute an Event of Default under this Lease.  Tenant’s written request for Landlord’s
consent shall include, and Landlord’s thirty (30) day response period referred
to above shall not commence, unless and until Landlord has received from
Tenant, all of the following information: (a) one or more of (i)
financial statements for the proposed assignee or subtenant for the past two
(2) years (or, if shorter, from inception of the entity) prepared in accordance
with generally accepted accounting principles, or (ii) federal tax returns for
the proposed assignee or subtenant for the past two (2) years (or, if shorter,
from inception of the entity); (b) a detailed description of the business the
assignee or subtenant intends to operate at the Premises; (c) the proposed
effective date of the assignment or sublease; (d) a copy of the executed term
sheet or letter of intent, setting forth the material terms and conditions of
the proposed assignment or sublease; (e) a detailed description of any
ownership or commercial relationship between Tenant and the proposed assignee
or subtenant; and (f) a description of any Alterations the proposed assignee or
subtenant desires to make to the Premises.  If the obligations of the proposed assignee
or subtenant will be guaranteed by any person or entity, Tenant’s written
request shall not be considered complete until the information described in (a)
of the previous sentence has been provided with respect to each proposed
guarantor. If Landlord will require, as a condition to its consent hereunder,
that any proposed assignee of this Lease provide an acceptable guaranty of the
assignee’s obligations hereunder (without in any way diminishing Tenant’s
ongoing liability), Landlord shall so advise Tenant at the time of responding
to Tenant’s request for Landlord’s consent.

(b)           A “Transfer” shall also include: (i)
if Tenant is a corporation, and Tenant’s stock is not publicly traded over a
recognized securities exchange, or Tenant is a partnership, limited liability

 31
 

company, or other entity, transfer of more than fifty
percent (50%) of the voting stock of such corporation or fifty percent (50%)
(or in either case, such lower percentage as would effect a change of control)
of the voting interests in such partnership, limited liability company or other
entity during the Term of this Lease (whether or not in one or more transfers,
but excluding bona fide transfers not entered into for the purpose of evading
this provision and constituting further equity investment in Tenant or
transfers of not more than ten percent (10%) and not resulting in a change of
control); and (ii) the dissolution, merger or liquidation of the corporation or
other entity, and (iii) the involvement by Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or
not a formal assignment or hypothecation of this Lease or Tenant’s assets
occurs, but only if such transaction results or will result in a reduction of
the “Net Worth” of Tenant (as hereinafter defined), by an amount equal to or
greater than twenty-five percent (25%) of such Net Worth of Tenant as it is
represented to Landlord at the time of the execution by Landlord of this Lease

12.2        Business
Combinations; Affiliate Transactions. (a) Section 12.1 shall not apply to, and Landlord’s prior
consent shall not be required for, any Transfer arising or resulting from the
involvement by Tenant or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, refinancing,
transfer, leveraged buy-out or otherwise), whether or not a formal assignment
or hypothecation of this Lease or Tenant’s assets occurs, unless such
transaction or series of transactions results or will result in a reduction of
the “Net Worth” of Tenant as hereinafter defined, by an amount equal to or
greater than twenty-five percent (25%) of such Net Worth of Tenant as it is
represented to Landlord at the time of the execution by Landlord of this Lease,
or as it exists immediately prior to said transaction or transactions
constituting such reduction, at whichever time said Net Worth of Tenant was or
is greater. “Net Worth” of Tenant for purposes
of this Section 12.2 shall be the net worth of
Tenant (excluding any guarantors) established under generally accepted
accounting principles consistently applied.

(b)           Section 12.1
shall not apply to, and Landlord’s prior consent shall not be required for, any
assignment of this Lease, or a sublease of all or any portion of the Premises,
by the Tenant to its wholly owned subsidiary or immediate controlling entity or
its Affiliate (as hereinafter defined) (for such period of time as such
corporation remains such a subsidiary or such a controlling entity or such an
Affiliate, respectively, it being agreed that the subsequent sale or transfer
of stock or ownership interest resulting in a change in voting control, or any
other transaction(s) having the overall effect that such entity ceases to be
such a subsidiary or such a controlling entity or such an Affiliate,
respectively, of the Tenant, shall be treated as if such sale or transfer or transaction(s)
were, for all purposes, a Transfer governed by the provisions of Section 12.1),
provided (and it shall be a condition of the validity of any such assignment)
that such Transferee first agree directly with the Landlord to be bound by all
of the obligations of the Tenant hereunder, including, without limitation, the
obligation to pay the rent and other amounts provided for under this Lease, the
covenant to use the Premises only for the purposes specifically permitted under
this Lease and the covenant against further assignment, but no such assignment
or sublease shall relieve the Tenant herein named of any of its obligations
hereunder, and the Tenant shall at the request of Landlord affirm in writing
its ongoing primary liability therefor. As used herein, “Affiliate”
shall mean any entity that is under common direct or indirect control with
Tenant.  “Control”
shall mean ownership of fifty-one percent (51%) or more of the voting

 32
 

securities, or other ownership interests or rights of
the controlled entity (which includes the right to elect the directors of the
corporation or the equivalent if such entity is not a corporation)

12.3        Standard
For Approval.  Landlord shall not unreasonably withhold,
condition or delay its consent to a Transfer, provided that Tenant has complied
with each and every requirement, term and condition of this Section 12. 
Tenant acknowledges and agrees that each requirement, term and condition
in this Section 12 is a reasonable
requirement, term or condition, but that the terms and conditions of this Section 12 are not an exclusive statement
of the reasonable grounds on which Landlord may withhold its consent to a
Transfer.  Without limiting the
generality of the foregoing, it shall be deemed reasonable for Landlord to withhold
its consent to a Transfer if any requirement, term or condition of this Section 12 is not complied with, or: (a)
the Transfer would cause Landlord to be in violation of its obligations under
another lease or agreement to which Landlord is a party; (b) a proposed
assignee or subtenant has a smaller Net Worth than Tenant had on the date of
this Lease, or, in Landlord’s sole but reasonable judgment, is less able
financially to pay the rents due under this Lease as and when they are due and
payable; (c) a proposed assignee’s or subtenant’s business will impose a burden
on the Property’s parking facilities, elevators, Common Areas or utilities that
is greater than the burden imposed by Tenant, in Landlord’s reasonable
judgment; (d) the terms of a proposed assignment or subletting will allow the
proposed assignee (unless the Assignee is an Affiliate of Tenant) to exercise a
right of renewal, right of expansion, right of first offer, right of first
refusal or similar right held by Tenant; (e) a proposed assignee or subtenant
refuses to enter into a written agreement, satisfactory to Landlord in its
reasonable discretion, which provides that it will abide by and assume all of
the terms and conditions of this Lease for the term of any assignment or
sublease and containing such other terms and conditions as Landlord reasonably
deems necessary or appropriate; (f) the use of the Premises by the proposed
assignee or subtenant will not be consistent with the Permitted Use; (g) any
then-existing guarantor of this Lease refuses to consent to the Transfer or to
execute a written agreement reaffirming the guaranty; (h) there exists at the time of the request by
Tenant an Event of Default on the part of Tenant under this Lease (or a
failure by Tenant to make any required payment or perform any obligation, of
which failure Tenant has received notice and which, with the passage of time,
would constitute an Event of Default),
or there shall have existed more than two Events of Default during the Term of
this Lease; (i) if requested by Landlord, the assignee or subtenant refuses to
sign a non-disturbance and attornment agreement in favor of Landlord’s lender
as provided in Section 26 of this Lease; (j)
Landlord has sued or been sued by the proposed assignee or subtenant; (k) the
proposed assignee or subtenant is involved in a business which in Landlord’s
reasonable judgment is not in keeping with the then current standards of the
Building; (l) if Landlord or an affiliate of Landlord has space available for
lease in the Building and the proposed assignee or subtenant is an existing
tenant or subtenant of the Building; or (m) the proposed assignee or subtenant
is a person or entity then negotiating with Landlord for the lease of space in
the Building (as evidenced by the exchange of one or more written proposals
within the three month period preceding Tenant’s request for consent).

12.4        Additional
Terms and Conditions. 
The following terms and conditions shall be applicable to any Transfer:

(a)           Regardless of
Landlord’s consent, no Transfer shall release Tenant from Tenant’s obligations
hereunder or alter the primary liability of Tenant to pay the rent and other

 33
 

sums due Landlord hereunder and to perform all other obligations to be
performed by Tenant hereunder, or release any guarantor from its obligations
under its guaranty.

(b)           Landlord may accept
rent from any person other than Tenant pending approval or disapproval of an
assignment or subletting.

(c)           Neither a delay in
the approval or disapproval of a Transfer, nor the acceptance of rent, shall
constitute a waiver or estoppel of Landlord’s right to exercise its rights and
remedies for the breach of any of the terms or conditions of this Section 12.

(d)           The consent by
Landlord to any Transfer shall not constitute a consent to any subsequent Transfer
by Tenant or to any subsequent or successive Transfer by an assignee or
subtenant. However, Landlord may consent to subsequent Transfers or any
amendments or modifications thereto without notifying Tenant or anyone else
liable on the Lease and without obtaining their consent, and such action shall
not relieve such persons from liability under this Lease.

(e)           In the event of any
Event of Default under this Lease, Landlord may proceed directly against
Tenant, any then-existing guarantors or anyone else responsible for the
performance of this Lease, including any subtenant or assignee, without first
exhausting Landlord’s remedies against any other person or entity responsible
therefor to Landlord, or any security held by Landlord.

(f)            Landlord’s written
consent to any Transfer by Tenant shall not constitute an acknowledgment that
no default then exists under this Lease nor shall such consent be deemed a
waiver of any then existing default.

(g)           The discovery of the
fact that any financial statement relied upon by Landlord in giving its consent
to an assignment or subletting was materially false shall, at Landlord’s
election, render Landlord’s consent null and void.

(h)           Landlord shall not
be liable under this Lease or under any sublease to any subtenant.

(i)            No assignment or
sublease may be terminated, modified or amended without Landlord’s prior
written consent, which shall not be unreasonably withheld, delayed or
conditioned.

(j)            Any assignee of, or
subtenant under, this Lease shall, by reason of accepting such assignment or
entering into such sublease, be deemed, for the benefit of Landlord, to have
assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Tenant during the
term of said assignment or sublease, except as Landlord may otherwise
specifically agree in writing.

12.5        Additional
Terms and Conditions Applicable to Subletting.  The following terms and conditions shall apply
to any subletting by Tenant of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not expressly
incorporated therein:

 34

 

(a)           Tenant hereby
absolutely and unconditionally assigns and transfers to Landlord all of Tenant’s
interest in all rentals and income arising from any sublease entered into by
Tenant, and Landlord may collect such rent and income and apply same toward Tenant’s
obligations under this Lease; provided, however, that until an Event of Default
shall occur in the performance of Tenant’s obligations under this Lease, Tenant
may receive, collect and enjoy the rents accruing under such sublease.  Landlord shall not, by reason of this or any
other assignment of such rents to Landlord nor by reason of the collection of
the rents from a subtenant, be deemed to have assumed or recognized any
sublease or to be liable to the subtenant for any failure of Tenant to perform and
comply with any of Tenant’s obligations to such subtenant under such sublease,
including, but not limited to, Tenant’s obligation to return any security
deposit.  Tenant hereby irrevocably
authorizes and directs any such subtenant, upon receipt of a written notice
from Landlord stating that an Event of Default exists in the performance of
Tenant’s obligations under this Lease, to pay to Landlord the rents due as they
become due under the sublease.  Tenant
agrees that such subtenant shall have the right to rely upon any such statement
and request from Landlord, and that such subtenant shall pay such rents to
Landlord without any obligation or right to inquire as to whether such default
exists and notwithstanding any notice from or claim from Tenant to the
contrary.

(b)           Each sublease shall provide that if, prior to
the termination of any sublease, any event (other than a casualty described in Section 9.1 or condemnation described in Section 15) occurs which, by voluntary or
involuntary act or by operation of law, might cause or permit this Lease to be
terminated, expire, be canceled, be foreclosed against, or otherwise come to an
end, including but not limited to (1) an Event of Default by Tenant under this
Lease of any of the terms or provisions hereof, (2) foreclosure proceedings
brought by the holder of any mortgage or trust deed to which the Property is
subject; or (3) the termination of Tenant’s leasehold estate by dispossession
proceeding or otherwise, then, at Landlord’s sole election and option, the subtenant
shall attorn to Landlord and recognize Landlord as the subtenant’s landlord
under the sublease, upon the terms and conditions and at the rental rate
specified in the sublease, and for the then remaining term of the sublease,
except that Landlord shall not be bound by any provision of the sublease which
in any way increases Landlord’s duties, obligations or liabilities to the
subtenant beyond those owed to Tenant under this Lease.  The subtenant shall execute and deliver, at
any time and from time to time, upon request of Landlord, any commercially
reasonable instruments which may be necessary or appropriate to evidence such
attornment.  Landlord shall not (i) be
liable to the subtenant for any act, omission or breach of the sublease by
Tenant, (ii) be subject to any offsets or defenses which the subtenant might
have against Tenant, (iii) be bound by any rent or additional rent which the
subtenant might have paid in advance to Tenant, or (iv) be bound to honor any
rights of the subtenant in any security deposit made with Tenant except to the
extent Tenant has turned over such security deposit to Landlord.  Tenant hereby agrees that upon the occurrence
of any event with respect to this Lease described above, Tenant shall
immediately pay or transfer to Landlord any security deposit, rent or other
sums then held by Tenant.  In the event
of any such attornment, Landlord’s liability shall be limited to matters
arising during Landlord’s ownership of the Building.  The liability of Landlord to the subtenant for
any default by landlord after such attornment, or arising in connection with
Landlord’s operation, management, leasing, repair, renovation, alteration, or
any other matter relating to the Building or the subleased premises, shall be
limited to the interest of the Landlord in the Building (and proceeds
thereof).  Landlord shall have the right,
in Landlord’s sole discretion, to elect not to have the subtenant attorn to
Landlord and, in that event, the sublease 

 35
 

shall
be deemed terminated on the date of the occurrence of the event with respect to
this Lease described above, and Landlord shall have no obligation to permit the
subtenant to continue to occupy all or any part of the Premises.

12.6        Transfer Premium from Assignment or
Subletting.  Landlord
shall be entitled to receive from Tenant (as and when received by Tenant) as an
item of additional rent fifty percent (50%) of the gross amounts received by
Tenant from such assignee or subtenant in excess of the amounts payable by
Tenant to Landlord hereunder (the “Transfer Premium”).  The Transfer Premium shall be reduced by (i)
the reasonable brokerage commissions and legal fees actually paid by Tenant in
order to assign the Lease or to sublet all or a portion of the Premises, as
well as (ii) the actual and commercially reasonable out-of-pocket costs paid by
Tenant for leasehold improvements or other work performed by Tenant for such
subtenant (or allowances paid to the assignee or subtenant for such
improvements or work) as an inducement to enter into such assignment or
sublease, and (iii) a commercially reasonable and customary (if any) period of “free
rent” granted as an inducement to enter into such assignment or sublease. If
less than all of the Premises is transferred, the Base Rent and the additional
rent shall be determined on a per rentable square foot basis.  “Transfer Premium” shall also include, but
not be limited to, key money and bonus money paid by the assignee or subtenant
to Tenant in connection with such Transfer, the fair value of any work or services
provided by the assignee or subtenant for Tenant, and any payment in excess of
fair market value for services rendered by Tenant to the assignee or subtenant
or for assets, fixtures, inventory, equipment, or furniture transferred by
Tenant to the assignee or subtenant in connection with such Transfer.

12.7        Landlord’s Option to Recapture Space.  Notwithstanding anything to the contrary
contained in this Section 12, in
the case of any proposed assignment of this Lease or any proposed sublease that
covers (together with any other sublease(s) then in effect) fifty percent (50%)
or more of the Premises, Landlord shall have the option, by giving written
notice to Tenant within thirty (30) days after receipt of any request from
Tenant for Landlord’s consent to such assignment or sublease, to terminate this
Lease as of the date thirty (30) days after Landlord’s election. In addition,
and without limiting the foregoing rights, in the event that Tenant shall at
any time hereafter lease other space in the Building, and such space is
included in the Premises by amendment to this Lease, and if Tenant thereafter
desires to (x) enter into any sublease that covers (together with any other
sublease(s) then in effect) fifty percent (50%) or more of such additional space,
or (y) enter into any sublease of such additional space (or a portion thereof)
that has a term equal to all or substantially all of the then-remaining Term of
this Lease, Landlord will also have the right to terminate this Lease, provided
that such termination right would only be effective with respect to such
additional space. In the event of any recapture by Landlord, if this Lease
shall be terminated with respect to less than the entire Premises, the Base
Rent, Tenant’s Share of Operating Expense and Real Property Tax increases and
the number of parking spaces Tenant may use shall be adjusted on the basis of
the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the original Premises, and this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party, the parties shall execute written confirmation of
same.  If Landlord recaptures only a
portion of the Premises, it shall construct and erect at its sole cost such
partitions as may be required to sever the space to be retained by Tenant from
the space recaptured by Landlord. 
Landlord may, at its option, lease any recaptured portion of the
Premises to the proposed subtenant or assignee or to any other person or entity
without liability

 36
 

to Tenant. 
Tenant shall not be entitled to any portion of the profit, if any,
Landlord may realize on account of such termination and reletting.  Tenant acknowledges that the purpose of this Section 12.7 is to enable Landlord to receive profit in the
form of higher rent or other consideration to be received from an assignee or
subtenant, to give Landlord the ability to meet additional space requirements
of other tenants of the Building and to permit Landlord to control the leasing
of space in the Building.  Tenant
acknowledges and agrees that the requirements of this Section 12.7
are commercially reasonable and are consistent with the intentions of Landlord
and Tenant. The provisions of this Section 12.7
shall not be applicable to any Transfer described in Section 12.2.
 Notwithstanding anything to the contrary in
this Section 12.7, if, within
fifteen (15) days after Landlord gives notice of an election to terminate this
Lease, Landlord receives from Tenant a written notice withdrawing and canceling
its notice regarding such Transfer, then Tenant’s notice of such Transfer and
Landlord’s recapture notice shall be deemed null, void and of no further force
or effect, and Tenant shall not enter into such Transfer. Tenant shall not have
the right to withdraw and cancel any notice of a proposed Transfer more than
once in any twelve (12) month period, and in the event that Tenant does
withdraw such a notice, Tenant shall reimburse Landlord for all of Landlord’s
reasonable costs and expenses incurred in connection therewith, including, but
not limited to, attorneys’, architects’, accountants’, engineers’ or other
consultants’ fees (and the limitation on such costs in Section 12.8
shall not be applicable).

12.8        Landlord’s Expenses.  In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord’s reasonable costs and expenses incurred in
connection therewith, including, but not limited to, attorneys’, architects’,
accountants’, engineers’ or other consultants’ fees. Landlord agrees that
during the first two (2) years of the Term, Tenant shall not be required to
reimburse Landlord more than $2,000 (per request) on account of legal fees in
connection with any such request for consent.

13.          Default;
Remedies.

13.1        Default by Tenant.  Landlord and
Tenant hereby agree that the occurrence of any one or more of the following
events shall be an “Event of Default” by Tenant under this Lease and that said
Event of Default shall give Landlord the rights described in Section 13.2.  Landlord or Landlord’s authorized
agent shall have the right to execute and to deliver any notice of default,
notice to pay rent or quit or any other notice Landlord gives Tenant.

(a)           Tenant’s failure to
make any payment of Base Rent, Tenant’s Share of Operating Expense increases,
Tenant’s Share of Real Property Taxes, late charges, or any other payment
required to be made by Tenant hereunder, as and when due, where such failure
shall continue for a period of five (5) days after written notice thereof from
Landlord to Tenant.  In the event that
Landlord serves Tenant with a notice to pay rent or quit pursuant to applicable
summary process or unlawful detainer statutes, such notice shall also
constitute the notice required by this Section
13.1(a), so long as
Tenant has the benefit of the grace period described above.

(b)           The abandonment of
the Premises by Tenant, in which event Landlord shall not be obligated to give
any notice of default to Tenant.

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(c)           The failure of
Tenant to (1) comply with any of its obligations under Sections 7.3, 8, 12, 21, 23 or 26 and
failure to cure the same within fifteen (15) days following written notice from
Landlord to Tenant, or (2) comply with any of its obligations under Section 6.2 and failure to cure the same
within such time as may be allowed by the applicable legal or regulatory
requirement, so long as (i) Tenant shall diligently and continuously work to
effect such cure at the soonest practicable time, and (ii) the time used by
Tenant to effect such a cure shall not in any way subject Landlord or the
Property to civil or criminal sanction or liability or create a default under
Landlord’s mortgage or any other lease or contract to which Landlord is a party
or by which Landlord or the Property is bound, and all enforcement proceedings
against Landlord or the Property shall be stayed.  In the event Landlord serves Tenant with a
notice to quit or any other notice pursuant to applicable summary process or
unlawful detainer statutes, said notice shall also constitute the notice
required by this Section 13.1(c), so long as Tenant has the benefit
of the grace period described above.

(d)           The failure by
Tenant to observe or perform any of the covenants, conditions or provisions of
this Lease to be observed or performed by Tenant (other than those referenced
in Sections 13.1(a), (b) and
(c), above), where such failure shall
continue for a period of thirty (30) days after written notice thereof from
Landlord to Tenant; provided, however, that if the nature of Tenant’s
non-performance is such that more than thirty (30) days are reasonably required
for its cure, then an Event of Default shall not be deemed to exist if Tenant
commences such cure within fifteen (15) days after such notice and thereafter
diligently pursues such cure to completion. 
In the event that Landlord serves Tenant with a notice to quit or any
other notice pursuant to applicable summary process or unlawful detainer
statutes, said notice shall also constitute the notice required by this Section 13.1(d), so
long as Tenant has the benefit of the grace period described above.

(e)           (i) The making by
Tenant or any guarantor of Tenant’s obligations hereunder of any general
arrangement or general assignment for the benefit of creditors; (ii) Tenant or
any guarantor becoming a “debtor” as defined in 11 U.S.C. Section 101 (the “Bankruptcy Code”) or any successor statute thereto (unless,
in the case of a petition filed against Tenant or guarantor, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant’s assets located at the Premises or
of Tenant’s interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant’s assets located at the Premises or of
Tenant’s interest in this Lease, where such seizure is not discharged within
thirty (30) days; (v) Tenant shall be adjudicated insolvent, or shall file any
petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future Federal, State or other statute, law or regulation for the
relief of debtors (other than the Bankruptcy Code), or shall seek or consent to
or acquiesce in the appointment of any trustee, receiver or liquidator of
Tenant or of all or any substantial part of its properties, or shall admit in
writing its inability to pay its debts generally as they become due; (vi) a
petition shall be filed against Tenant under any law other than the Bankruptcy
Code seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future
Federal, State or other statute, law or regulation and shall remain undismissed
or unstayed for an aggregate of sixty (60) days (whether or not consecutive),
or if any trustee, conservator, receiver or liquidator of Tenant or of all or
any substantial part of its properties shall be appointed without the consent

 38
 

or acquiescence of Tenant and such appointment shall remain unvacated
or unstayed for an aggregate of sixty (60) days (whether or not consecutive);
or (vii) the occurrence of any of the events described in this paragraph (e) with respect to any guarantor of all or any
portion of Tenant’s obligations under this Lease.  In the event that any provision of this Section 13.1(e) is unenforceable under applicable law, such
provision shall be of no force or effect.

(f)            The discovery by
Landlord that any financial statement, representation or warranty given to
Landlord by Tenant, or by any guarantor of Tenant’s obligations hereunder, is
or was materially false.  Tenant
acknowledges that Landlord has entered into this Lease in material reliance on
such information.

(g)           If Tenant is a
corporation, limited liability company, partnership, or other business entity,
the dissolution or liquidation of Tenant.

(h)           If Tenant’s
obligations under this Lease are guaranteed: (i) the death of a guarantor, (ii)
the termination of a guarantor’s liability with respect to this Lease other
than in accordance with the terms of such guaranty, (iii) a guarantor’s
becoming insolvent or the subject of a bankruptcy filing, or (iv) a guarantor’s
refusal to honor the guaranty.

13.2        Remedies.

(a)           In the event of any
default or breach of this Lease by Tenant, continuing after any applicable
notice and grace period provided for by Section 13.1, Landlord may, at any time thereafter, with or
without notice or demand, and without limiting Landlord in the exercise of any
other right or remedy which Landlord may have by reason of such default:

(i)                                     terminate Tenant’s right to possession of the
Premises by any lawful means, in which case this Lease and the Term hereof
shall terminate and Tenant shall immediately surrender possession of the
Premises to Landlord; and Tenant covenants that in case of such termination,
Tenant shall pay any amount of Base Rent that was initially waived by Landlord
under Section 4.1, and otherwise pay the rent, additional charges and other
sums payable hereunder (including, without limitation, Tenant’s share of
Operating Expenses increases and Tenant’s Share of Real Property Tax Increases)
up to the time of such termination. Thereafter, Tenant shall continue to pay
all such amounts until the end of what would have been the Expiration Date in
the absence of such termination, which shall be reduced by the net receipts (if
any, after deducting all expenses of reletting) actually received by Landlord
from any replacement tenant. At any time after such termination, Landlord may
elect to recover from Tenant, in lieu of all other rent so payable by Tenant
hereunder, a lump sum equal to the then net present value (computed using an
interest rate equal to the discount rate of the Federal Reserve Bank of Boston)
of the amount by which (x) the unpaid rent and all additional charges that
would have been payable hereunder from the date of such election for what would
have been the remainder of the Term of this Lease

 39
 

(including, without
limitation, Tenant’s share of Operating Expenses increases and Tenant’s Share
of Real Property Tax Increases) exceeds (y) the fair market rental value of the
Premises as of the date of such election. In addition Tenant shall be
responsible for and pay on demand any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant’s failure to
perform its obligations under the Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, the
cost of recovering possession of the Premises, expenses of releasing, including
necessary renovation and alteration of the Premises, reasonable attorneys’
fees, any real estate commissions actually paid by Landlord and the unamortized
value of any free rent, reduced rent, tenant improvement allowance or other
economic concessions provided by Landlord. For purposes of this Section 13.2(a)(i), “rent” shall be deemed to be all
monetary obligations required to be paid by Tenant pursuant to the terms of
this Lease.

(ii)                                  collect
sublease rents (or appoint a receiver to collect such rent) and otherwise
perform Tenant’s obligations at the Premises, it being agreed, however, that
the appointment of a receiver for Tenant shall not constitute an election by
Landlord to terminate this Lease; and/or

(iii)                               pursue
any other remedy now or hereafter available to Landlord under the laws or
judicial decisions of the Commonwealth of Massachusetts.

(b)           No remedy or
election hereunder shall be deemed exclusive, but shall, wherever possible, be
cumulative with all other remedies at law or in equity.  The expiration or termination of this Lease
and/or the termination of Tenant’s right to possession of the Premises shall
not relieve Tenant of liability under any indemnity provisions of this Lease as
to matters occurring or accruing during the Term of this Lease or by reason of
Tenant’s occupancy of the Premises.

(c)           If Tenant abandons
the Premises, Landlord may re-enter the Premises and such re-entry shall not be
deemed to constitute Landlord’s election to accept a surrender of the Premises
or to otherwise relieve Tenant from liability for its breach of this
Lease.  No surrender of the Premises shall
be effective against Landlord unless Landlord has entered into a written
agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under this
Lease.  The delivery by Tenant to
Landlord of possession of the Premises shall not constitute the termination of
this Lease or the surrender of the Premises.

13.3        Default by Landlord.  Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the Holder
of any Mortgage encumbering the Property whose name and address shall have
theretofore been furnished to Tenant in writing, specifying

 40
 

wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord’s obligation is
such that more than thirty (30) days are required for its cure, then Landlord
shall not be in default if Landlord commences performance within such thirty (30)
day period and thereafter diligently pursues the same to completion.

13.4        Late Charges.  Tenant hereby acknowledges that late payment
by Tenant to Landlord of Base Rent, Tenant’s Share of Operating Expense
increases, Tenant’s Share of Real Property Tax increases or other sums due
hereunder will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed encumbering the Property.
Accordingly, if any installment of Base Rent, Tenant’s Share of Operating
Expense increases, Tenant’s Share of Real Property Tax increases or any other
sum due from Tenant shall not be received by Landlord when such amount shall be
due, then, without any requirement for notice or demand to Tenant, Tenant shall
immediately pay to Landlord a late charge equal to three percent (3%) of such
overdue amount, provided that Landlord agrees to waive such late charge for the
first late payment in any period of twelve consecutive months, so long as the
requisite payment is made in full within two (2) business days after notice
from Landlord that such payment was not received when due.  The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant’s default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder including the assessment of interest
under Section 13.5.

13.5        Interest on Past-due Obligations.  Except as expressly herein provided, any
amount due to Landlord that is not paid within five (5) days of the date when
due shall bear interest at the lesser of (i) the prime rate from time to time
in effect at the Bank of America (at its Boston, Massachusetts offices), plus
three percent (3%), or (ii) the maximum rate permitted by applicable law.
Payment of such interest shall not excuse or cure any default by Tenant under
this Lease.

This Lease and the
obligations of Landlord and Tenant hereunder shall not be affected or impaired
because such party is unable to fulfill any of its obligations hereunder or is
delayed in doing so, if such inability or delay is caused by reason of strike
or other labor problems, acts of God, riot, insurrection, governmental actions
or requirements, or any other cause beyond the reasonable control of such party
(the foregoing circumstances being individually and collectively referred to as
“Force Majeure”), and the time for performance by such party shall be extended
for the period of any such delay. Any party so affected by a Force Majeure
delay shall promptly notify the other party thereof, and shall use commercially
reasonable efforts to minimize the adverse effect of such delay. In no event,
however, shall lack or unavailability of adequate funds ever be grounds for a
delay or excuse hereunder, and Force Majeure shall not be an excuse for failure
to pay rent or additional rent as and when due.

14.          Landlord’s Right to Cure Default; Payments by Tenant.  All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant’s
sole cost and expense and without any reduction of rent.  If Tenant shall fail to perform

 41
 

any of its obligations
under this Lease, within a reasonable time after such performance is required
by the terms of this Lease (or immediately, in case of emergency), Landlord
may, but shall not be obligated to, after three (3) days prior written notice
to Tenant, (but no notice will be required in case of emergency), make any such
payment or perform any such act on Tenant’s behalf without waiving its rights
based upon any default of Tenant and without releasing Tenant from any
obligations hereunder.  Tenant shall pay
to Landlord, within thirty (30) days after delivery by Landlord to Tenant of
statements therefor, an amount equal to the expenditures reasonably made by
Landlord in connection with the remedying by Landlord of Tenant’s defaults
pursuant to the provisions of this Section 14.

15.          Condemnation.  If any portion of the Premises is taken under
the power of eminent domain, or sold under the threat of the exercise of said
power (all of which are herein called “Condemnation”), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises is taken by Condemnation as would substantially and adversely affect
the operation and profitability of Tenant’s business conducted from the
Premises, and said taking lasts for ninety (90) days or more, Tenant shall have
the option, to be exercised only in writing within thirty (30) days after
Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession. 
If a taking lasts for less than ninety (90) days and limits Tenant’s use
of the Premises for the Permitted Use, Tenant’s rent shall be abated in
proportion to such limitation during said period but Tenant shall not have the
right to terminate this Lease.  If Tenant
does not terminate this Lease in accordance with the foregoing, this Lease
shall remain in full force and effect as to the portion of the Premises
remaining, except that the Base Rent and Tenant’s Share of Operating Expenses
shall be reduced in the proportion that the usable floor area of the Premises
taken bears to the total usable floor area of the Premises.  Common Areas taken shall be excluded from the
Common Areas usable by Tenant and no reduction of rent shall occur with respect
thereto or by reason thereof.  Landlord
shall have the option in its sole discretion to terminate this Lease as of the
taking of possession by the condemning authority, by giving written notice to
Tenant of such election within thirty (30) days after receipt of notice of a
Condemnation of any part of the Premises or the Property.  Any award for the taking of all or any part of
the Premises or the Property under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of
Landlord, whether such award shall be made as compensation for diminution in
value of the leasehold, for good will, for the taking of the fee, as severance
damages, or as damages for tenant improvements; provided, however, that Tenant
shall be entitled to any separate award for loss of or damage to Tenant’s
removable personal property.  In the
event that this Lease is not terminated by reason of such condemnation, and
subject to the requirements of any lender that has made a loan to Landlord
encumbering the Property, Landlord shall to the extent of severance damages
received by Landlord in connection with such condemnation, repair any damage to
the Property caused by such Condemnation except to the extent that Tenant has
been reimbursed therefor by the condemning authority.  Tenant shall pay any amount in excess of such
severance damages required to complete such repair.  This Section 15 shall govern the rights and
obligations of Landlord and Tenant with respect to the condemnation of all or
any portion of the Property.

 

 42

16.          Vehicle Parking.

16.1        Use of Parking Facilities.  During the Term and subject to the rules and
regulations attached hereto as Exhibit “C,” as modified by Landlord from time
to time (the “Rules”), Tenant shall be entitled to use the number of parking spaces
set forth in Section 1.19.
Landlord may, in its sole discretion designate the location of any reserved
parking spaces.  For purposes of this
Lease, a “parking space” refers to the space in which one (1) motor vehicle is
intended to park.  If Tenant commits or
allows in the parking facility any of the activities prohibited by the Lease or
the Rules, then Landlord shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be payable by
Tenant within thirty (30) days following demand by Landlord.  Tenant’s parking rights are the personal
rights of Tenant and Tenant shall not transfer, assign, or otherwise convey its
parking rights separate and apart from this Lease, except to a permitted
assignee or sublessee hereunder, and then only in connection with and subject
to such sublease or assignment. All spaces, whether covered or uncovered, are
currently available on a first-come, first-served basis.

16.2        Parking Charges.  INTENTIONALLY OMITTED.

17.          Broker’s Fee. 
Tenant and Landlord each represent and warrant to the other that neither
has had any dealings or entered into any agreements with any person, entity,
broker or finder other than the persons, if any, listed in Section 1.20, in connection with the
negotiation of this Lease, and no other broker, person, or entity is entitled
to any commission or finder’s fee in connection with the negotiation of this
Lease, and Tenant and Landlord each agree to indemnify, defend and hold the
other harmless from and against any claims, damages, costs, expenses, attorneys’
fees or liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings,
actions or agreements of the indemnifying party. Landlord shall be solely
responsible for any commission or finder’s fee due to the person or entity
listed in Section 1.20 pursuant to the terms of a
separate written agreement.

18.          Estoppel
Certificate.

18.1        Delivery of Certificate.  Tenant shall from time to time, upon not less
than twenty (20) days’ prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request including, but not limited to, the following:
(a) that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) (b) the date to which the
Base Rent and other charges are paid in advance and the amounts so payable, (c)
that there are not, to Tenant’s knowledge,
any uncured defaults or unfulfilled obligations on the part of Landlord, or
specifying such defaults or unfulfilled obligations, if any are claimed, (d)
that all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord’s obligations and (e) that Tenant has
taken possession of the Premises.  Any
such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Property.

18.2        Failure to Deliver Certificate.  At Landlord’s option, the failure of Tenant
to deliver such statement within such time shall constitute a representation by
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord,

 43
 

(b) there are no uncured defaults in Landlord’s
performance, (c) not more than one month’s Base Rent has been paid in advance,
(d) all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord’s obligations and (e) Tenant has taken
possession of the Premises.

19.          Financial Information. 
From time to time (but not more than once in any twelve-month period,
except in connection with a proposed sale or refinancing of the Building), at
Landlord’s request, Tenant shall cause the following financial information to
be delivered to Landlord, at Tenant’s sole cost and expense, upon not less than
twenty (20) days’ advance written notice from Landlord: (a) a current financial
statement for Tenant and Tenant’s financial statements for the previous two
accounting years, and (b) a current financial statement for any guarantor(s) of
this Lease and the guarantor’(s) financial statements for the previous two
accounting years.  All financial
statements shall be prepared in accordance with generally accepted accounting
principles consistently applied and either certified as true, correct and
complete by the Tenant’s chief financial officer or, if such is the normal
practice of Tenant, shall be audited by an independent certified public
accountant.

20.          Landlord’s Liability. 
Tenant acknowledges that Landlord shall have the right to transfer all
or any portion of its interest in the Property and to assign this Lease to the
transferee.  Tenant agrees that in the
event of such a transfer, and upon the transferee’s assumption of the same (as
evidenced by a written agreement between Landlord and such transferee),
Landlord shall automatically be released from all liability under this Lease
arising after the date of the transfer; and Tenant hereby agrees to look solely
to Landlord’s transferee for the performance of Landlord’s obligations
hereunder after the date of the transfer. 
Upon such a transfer, Landlord shall, at its option, return Tenant’s
security deposit to Tenant or transfer Tenant’s security deposit to Landlord’s
transferee and, in either event, Landlord shall have no further liability to Tenant
for the return of its security deposit. 
Subject to the rights of any lender holding a mortgage or deed of trust
encumbering all or part of the Property, Tenant agrees to look solely to
Landlord’s equity interest in the Property for the collection of any judgment
requiring the payment of money by Landlord arising out of (a) Landlord’s
failure to perform its obligations under this Lease or (b) the negligence or
willful misconduct of Landlord, its partners, employees and agents.  No other property or assets of Landlord shall
be subject to levy, execution or other enforcement procedure for the
satisfaction of any judgment or writ obtained by Tenant against Landlord.  No partner, trustee, beneficiary, officer,
director, member, shareholder, employee or agent of Landlord shall be
personally liable for the performance of Landlord’s obligations hereunder or be
named as a party in any lawsuit arising out of or related to, directly or
indirectly, this Lease and the obligations of Landlord hereunder.  The obligations under this Lease do not
constitute personal obligations of the individual partners, trustees or
shareholders, beneficiaries or members of Landlord, if any, and Tenant shall
not seek recourse against any of said persons or their assets. The provision contained
in the foregoing sentence is not intended to, and shall not, limit any right
Tenant might otherwise have to obtain injunctive relief against Landlord or
Landlord’s successors-in-interest, or to take any action not involving the
personal liability of Landlord (original or successor) to respond in monetary
damages from Landlord’s assets other than Landlord’s interest in the Property

21.          Indemnity.  (a)  Tenant hereby agrees to indemnify, defend and
hold harmless Landlord and its employees, officers, directors, trustees,
beneficiaries, members, partners, shareholders,

 44
 

agents,
contractors, lenders and ground lessors (said persons and entities are
hereinafter collectively referred to as the “Indemnified
Parties”) from and against any and all liability, loss, cost,
damage, claims, loss of rents, liens, judgments, penalties, fines, settlement
costs, investigation costs, the cost of consultants and experts, attorneys
fees, court costs and other legal expenses, the effects of environmental
contamination, the cost of environmental testing, the removal, remediation
and/or abatement of Hazardous Substances (as said term is defined below),
insurance policy deductibles and other expenses (hereinafter collectively
referred to as “Damages”) arising
out of or related to an “Indemnified Matter” (as defined below).

(b)           For purposes of this Section 21, an “Indemnified
Matter” shall mean any matter for which one or more of the
Indemnified Parties incurs liability or Damages if the liability or Damages
arise out of or involve, directly or indirectly, (i) Tenant’s or its employees’,
agents’, contractors’ or invitees’ (all of said persons or entities are
hereinafter collectively referred to as “Tenant
Parties”) use or occupancy of the Premises or the Property, (ii) any
act, omission or neglect of a Tenant Party, (iii) Tenant’s failure to perform
any of its obligations under this Lease, (iv) the existence, use or disposal of
any Hazardous Substance (as defined in Section
23 below) brought on to the Property by a Tenant Party, or (v) any
other matters for which Tenant has expressly agreed to indemnify Landlord
pursuant to any other provision of this Lease. 
Tenant’s obligations hereunder shall include, but shall not be limited
to compensating the Indemnified Parties for Damages arising out of Indemnified
Matters within ten (10) days after written demand from an Indemnified Party,
and providing a defense, with counsel reasonably satisfactory to the
Indemnified Party, at Tenant’s sole expense, within thirty (30) days after
written demand from the Indemnified Party, of any claims, action or proceeding
arising out of or relating to an Indemnified Matter whether or not litigated or
reduced to judgment and whether or not well founded.

(c)           If Tenant is obligated to compensate
an Indemnified Party for Damages arising out of an Indemnified Matter, Landlord
shall have the immediate and unconditional right, but not the obligation,
without notice or demand to Tenant, to pay the damages and Tenant shall, upon
thirty (30) days advance written notice from Landlord, reimburse Landlord for
the costs incurred by Landlord.  By way
of example, and not limitation, Landlord shall have the immediate and
unconditional right to cause any damages to the Common Areas, another tenant’s
premises or to any other part of the Property to be repaired and to compensate
other tenants of the Property or other persons or entities for Damages arising
out of an Indemnified Matter.  The
Indemnified Parties need not first pay any Damages to be indemnified
hereunder.  Tenant’s obligations under
this Section 21 shall not be released, reduced or otherwise limited because one
or more of the Indemnified Parties are or may be actively or passively
negligent with respect to an Indemnified Matter or because an Indemnified Party
is or was partially responsible for the Damages incurred.  This indemnity is intended to apply to the
fullest extent permitted by applicable law. 
Tenant’s obligations under this Section 21 shall survive the expiration
or termination of this Lease unless specifically waived in writing by Landlord
after said expiration or termination.  In
no event shall Tenant be required to indemnify and Indemnified Party to the
extent Damages are caused by the gross negligence or willful misconduct of such
party.

(d)           Subject to applicable waivers of
claims and subrogation set forth in Section 8.4,
Landlord agrees to indemnify and save harmless Tenant from and against all
claims, loss, cost, damage or expense arising from any accident, bodily or
personal injury or damage

 45
 

occurring in the common areas on the Property, to the
extent that such accident, damage or injury results from a negligent act or
omission on the part of Landlord or Landlord’s agents or employees, occurring
after the Commencement Date until the
end of the Term of this Lease. This indemnity and hold harmless agreement shall
include indemnity against all losses, costs, damages, expenses and liabilities
incurred during the Term of this Lease in connection with any such claim or
proceeding brought thereon, and the defense thereof, including, without
limitation, reasonable attorneys’ fees and costs at both the trial and
appellate levels.

22.          Exemption of Landlord from Liability.   Tenant hereby
agrees that Landlord shall not be liable for injury to Tenant’s business or any
loss of income therefrom or, except as may otherwise be expressly provided in
this Lease, for loss of or damage to the merchandise, tenant improvements,
fixtures, furniture, equipment, computers, files, automobiles, or other
property of Tenant, Tenant’s employees, agents, contractors or invitees, or any
other person in or about the Property. In addition, Landlord shall notincluding,
but not limited to, theft, criminal activity at the Property, bombings or bomb
scares, Hazardous Substances (as defined below), fire, steam, electricity, gas,
water or rain, flooding, breakage of pipes, sprinklers, plumbing, air
conditioning or lighting fixtures, or from any other cause, whether said damage
or injury results from conditions arising upon the Premises or upon other
portions of the Property, or from other sources or places, or from new
construction or the repair, alteration or improvement of any part of the
Property. 
Landlord shall not be liable for any damages arising from any act or
neglect of any employees, agents, contractors or invitees of any other tenant,
occupant or user of the Property, nor from the failure of Landlord to enforce
the provisions of the lease of any other tenant of the Property. Except as may
otherwise expressly provided in this Lease, Tenant, as a material part of the
consideration to Landlord hereunder, hereby assumes all risk of damage to
Tenant’s property or business, in, upon or about the Property arising from any
cause, except Landlord’s negligence or the negligence of its employees or
agents

23.          Hazardous
Substances.

23.1        Definition and Consent.  The term “Hazardous
Substance” as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or
affect, either by itself or in combination with other materials expected to be
on the Premises or the Property, is either: (a) potentially injurious to the
public health, safety or welfare, the environment or the Premises or the
Property, (b) regulated or monitored by any governmental entity, (c) a basis
for liability to any governmental entity or third party under any federal,
state or local statute or common law theory or (d) defined as a hazardous material
or substance by any federal, state or local law or regulation.  Except for small quantities of ordinary
office supplies such as copier toner, liquid paper, glue, ink and common
household cleaning materials, Tenant shall not cause or permit any Hazardous
Substance to be brought, kept, or used in or about the Premises or the Property
by Tenant, its agents, employees, contractors or invitees.

23.2        Duty to Inform.  If Tenant or
Landlord knows, or has reasonable cause to believe, that a Hazardous Substance,
or a condition involving or resulting from same, has come to be located in, on
or under or about the Premises or the Property, Tenant or Landlord, as the

 46
 

case may be, shall promptly give
written notice of such fact to the other. Tenant shall also immediately give
Landlord (upon demand) a copy of any statement, report, notice, registration,
application, permit, license, given to or received from, any governmental authority or private party, or persons entering or
occupying the Premises, concerning the presence, spill, release, discharge of
or exposure to, any Hazardous Substance or contamination in, on or about the
Premises the Property. Landlord agrees that, on the Substantial
Completion Date, there will be no unlawful levels of Hazardous Substances in
the Premises.

23.3        Inspection; Compliance.  Landlord and
Landlord’s employees, agent, contractors and lenders shall have the right to
enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times and upon reasonable notice (which need not be in writing, and
which need not be given at all in the case of any emergency), for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Tenant with this Section 23. 
Landlord shall have the right to employ experts and/or consultants in
connection with its examination of the
Premises and with respect to the installation, operation, use, monitoring,
remediation, maintenance, or removal of any Hazardous Substance on or from the
Premises.  The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a release,
discharge or contamination, caused or materially contributed to by Tenant, is
found to exist or be imminent, or unless the inspection is requested or ordered
by governmental authority as the result of any such existing or imminent
release, discharge or contamination.  In
any such case, Tenant shall upon request reimburse Landlord for the cost and
expenses of such inspection.

24.          Intentionally
Omitted.

25.          Tenant
Improvements.  Except
for Landlord’s Work, Tenant specifically agrees that Landlord has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, the Property, or any part thereof, or to provide any
allowance for such purposes and that, except for Landlord’s Work, no
representations respecting the condition of the Premises, Property or the
Building have been made by Landlord to Tenant.

26.          Subordination
and Rights of Mortgagees.

26.1        Effect of Subordination.  Landlord
represents to Tenant that, as of the date hereof, no mortgage encumbers the
Property. This Lease, and any option granted hereby, upon Landlord’s written
election, shall be subject and subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation or security interest (any of the
foregoing, a “Mortgage”) hereafter
made of or with respect to or placed on all or any part of the Property and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.  If the mortgagee or holder of any such
Mortgage (a “Holder”) shall elect to have this
Lease prior to the lien of its Mortgage and shall give written notice thereof
to Tenant, this Lease shall be deemed prior to such Mortgage, whether this
Lease is dated prior or subsequent to the date of said Mortgage or the date of
recording thereof. Upon request by Tenant (and at the sole cost and expense of
Tenant), Landlord shall request and use commercially reasonable efforts (which
shall not include the obligation to pay any fee or charge or to agree to any
less favorable terms or conditions in the secured indebtedness) to obtain an
agreement (a “SNDA”) executed by the Holder for
the benefit, on the Holder’s standard form

 47
 

then in use that, for so long as there exists no
default beyond applicable grace periods under this Lease by Tenant, and subject
to the Holder’s reasonable and customary exceptions and qualifications, the
Holder will not, in foreclosing against or taking possession of the Premises or
otherwise exercising its rights under such mortgage, terminate this Lease or
disturb Tenant’s possession of the Premises hereunder, or words of similar
import. In the event of the foreclosure of a Mortgage, or a deed in lieu of
foreclosure of a Mortgage, or exercise of any similar remedy by a Holder, the
new owner of the Property as a result of such exercise shall not (a) be liable
for any act or omission of any prior landlord or with respect to events
occurring prior to its acquisition of title, (b) be liable for the breach of
this Lease by any prior landlord, (c) be subject to any offsets or defenses
which Tenant may have against the prior landlord, or to any amendments to this
Lease prior to such foreclosure, or (d) be liable to Tenant for the return of
its security deposit.  At the request of
any such new owner, Tenant shall attorn to such new owner.  Tenant will arrange for the recording of the
SNDA in the appropriate registry of deeds.

26.2        Execution of Documents.  Tenant agrees to execute and acknowledge any
commercially reasonable documents Landlord reasonably requests that Tenant
execute to effectuate an attornment, a subordination, or to make this Lease
granted herein prior to the lien of any Mortgage, as the case may be. Tenant’s
failure to execute such documents or propose reasonable modifications thereto
within fifteen (15) days after written demand shall constitute an Event of
Default by Tenant hereunder.

26.3        Assignment to Mortgagee.  With reference to any assignment by Landlord
of Landlord’s interest in this Lease, or the rents payable hereunder,
conditional in nature or otherwise, which assignment is made to the Holder of a
Mortgage on property which includes the Premises, Tenant agrees that the
execution thereof by Landlord, and the acceptance thereof by the Holder of such
Mortgage shall never be treated as an assumption by such Holder of any of the
obligations of Landlord hereunder unless such Holder shall, by notice sent to
Tenant, specifically otherwise elect and, except as aforesaid, such Holder
shall be treated as having assumed Landlord’s obligations hereunder only upon
foreclosure of such holder’s Mortgage and the taking of possession of the
Premises.

26.4        Sale Leaseback.  In no event shall the acquisition of Landlord’s
interest in the Property by a purchaser which, simultaneously therewith, leases
Landlord’s entire interest in the Property back to the seller thereof be
treated as an assumption, by operation of law or otherwise, of Landlord’s
obligations hereunder, but Tenant shall look solely to such seller-lessee,
and its successors from time to time in title, for performance of Landlord’s
obligations hereunder.   For all
purposes, such seller-lessee, and its successors in title, shall be the
Landlord hereunder unless and until Landlord’s position shall have been assumed
by such purchaser-lessor.

26.5        Cure by Mortgagee.  The curing of any default of Landlord’s under
this Lease by any Holder shall be treated as performance by Landlord.

27.          Option
to Extend.

27.1        Tenant’s
Right.   Provided
that, at the time of such exercise, (i) there exists no Event of Default on the
part of Tenant under this Lease (nor any failure by Tenant to make any required
payment or perform any obligation, of which failure Tenant has received notice
and which, with the passage of time, would constitute an Event of Default), and
(ii) Tenant then

 48
 

actually occupies all of the Premises, and
(iii) this Lease is still in full force and effect, Tenant shall have the right
to extend the Term of this Lease for one extended term (the “Extended Term”) of
five (5) years. The Extended Term shall commence on the day immediately
following the last day of the initial Term, and shall end at 11:59 p.m. on that
day immediately preceding the fifth anniversary of the first day of the
Extended Term. Tenant shall exercise such option to extend by giving written
notice to Landlord not later than twelve (12) months prior to the date on which
the initial Term ends.  The giving of
such notice by Tenant shall automatically and irrevocably extend the Term of
this Lease for the Extended Term and no instrument of renewal need be
executed.  In the event that Tenant fails
to give such notice to Landlord, this Lease shall automatically terminate on
the last day of the initial Term, and Tenant shall have no further option to
extend the Term of this Lease, it being agreed that time shall be of the
essence in the giving of any such notice. The Extended Term shall be on all the
terms and conditions of this Lease, except that the Base Rent for the Extended
Term shall be determined pursuant to Section
27.2 below.

27.2        Rental Etc.  (a) The annual Base Rent for each year of the
Extended Term shall be an amount equal to the Fair Market Rental Value of the
Premises (exclusive of the cost of supplying Tenant electricity, if and to the
extent the same is paid separately by Tenant), established for each such year
as of the commencement of the Extended Term (the “Determination Date”). The term “Fair Market Rental Value” shall mean the
annual fixed rent that a willing tenant would pay and a willing landlord would
accept, each acting in its own best interest and without duress, in an
arms-length lease of the Premises as of the Determination Date, and shall take
into account, among other things, the location and condition of the Premises
and amenities of which Tenant has the benefit, and any inducements then usual
and customary in the leasing market in which the Property is located (such as
improvements allowances or so-called “free rent” periods). For purposes of
determining the Fair Market Rental Value, the Tax Base Year for the
Extended Term shall be the fiscal year ending June 30, 2013 and (iii) the
Operating Expense Base Year for the Extended Term shall be calendar year 2012. If Landlord and Tenant shall fail to agree upon
the Fair Market Rental Value within six (6) months before the Determination
Date, then Landlord and Tenant each shall give notice (the “Determination
Notice”) to the other setting forth their respective determinations of the Fair
Market Rental Value, and, subject to the provisions of paragraph (b) below,
either party may apply to the American Arbitration Association or any successor
thereto for the designation of an arbitrator satisfactory to both parties to
render a final determination of the Fair Market Rental Value. The fair
market rental value shall be determined by arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association, except
that there shall be only one arbitrator, who shall have had at least ten (10)
years’ experience as a real estate broker or appraiser in the greater Route
128/Route 2 area. The arbitrator shall
conduct such hearings and investigations as the arbitrator shall deem
appropriate and shall, within thirty (30) days after having been appointed,
choose one of the determinations set forth in either Landlord’s or Tenant’s
Determination Notice, and that choice by the arbitrator shall be binding upon
Landlord and Tenant. Each party shall pay its own counsel fees and expenses, if
any, in connection with any arbitration under this paragraph (a), and the
parties shall share equally all other expenses and fees of any such
arbitration. The determination rendered in accordance with the provisions of
this paragraph (a) shall be final and binding in fixing the Fair Market Rental
Value. The arbitrator shall not have the power to add to, modify, or change any
of the provisions of this Lease.

 49
 

(b)           In the event that the
determination of the Fair Market Rental Value set forth in the Landlord’s and
Tenant’s Determination Notices shall differ by less than five percent (5%) per
square foot of Premises Rentable Area per annum for each year for which the
same is being determined, then the Fair Market Rental Value shall not be
determined by arbitration, but shall instead be set by taking the average of
the determinations set forth in Landlord’s and Tenant’s Determination Notices.
Only if the determinations set forth in Landlord’s and Tenant’s Determination
Notices shall differ by more than five percent (5%) per square foot of Premises
Rentable area per annum for any year for which the same is being determined
shall the actual determination of Fair Market Rental Value be made by an
arbitrator as set forth in paragraph (a) above.

(c)           If for any reason the
Fair Market Rental Value shall not have been determined prior to the
Determination Date, then, until the Fair Market Rental Value and, accordingly,
the Base Rent, shall have been finally determined, Tenant shall continue to pay
Base Rent at the rate in effect as of the last day of the initial Term. Upon
final determination of the Fair Market Rental Value, an appropriate adjustment
to the Base Rent theretofore paid by Tenant from and after the Determination
Date shall be made reflecting such final determination, and Landlord or Tenant,
as the case may be, shall promptly credit or pay, respectively, to the other
any overpayment of deficiency, as the case may be, in the payment of Base Rent
from the Determination Date to the date of such final determination.

28.          Landlord
Reservations.  Landlord shall have the right: (a) to change
the name and address of the Property or Building upon not less than ninety (90)
days prior written notice; (b) to permit any tenant the exclusive right to
conduct any business as long as such exclusive right does not conflict with any
rights expressly given herein; and (c) to place signs, notices or displays upon
the roof, interior, exterior or Common Areas of the Building or the
Property.  Tenant shall not use a
representation (photographic or otherwise) of the Building in connection with
Tenant’s business or suffer or permit anyone, except in an emergency, to go
upon the roof of the Building. Landlord reserves the right to use the exterior
walls of the Premises, and the area beneath, adjacent to and above the Premises
together with the right to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Property, provided that Landlord’s use does not unreasonably
interfere with Tenant’s use of the Premises, including Tenant’s rights with
respect to signage under Section 47.

29.          Changes
to Property.  Landlord shall have the right, in Landlord’s
sole discretion, from time to time, to make changes to the size, shape,
location, number and extent of the improvements comprising the Property
(hereinafter referred to as “Changes”)
including, but not limited to, the Building interior and exterior, the Common
Areas, elevators, escalators, restrooms, HVAC, electrical systems,
communication systems, fire protection and detection systems, plumbing systems,
security systems, parking control systems, driveways, entrances, parking
spaces, parking areas and landscaped areas. 
In connection with the Changes, Landlord may, among other things, erect
scaffolding or other necessary structures at the Building, limit or eliminate
access to portions of the Building or Property, including portions of the
Common Areas, or perform work in the Building, which work may create noise,
dust or leave debris in the Building. 
Tenant hereby agrees that such Changes and Landlord’s actions in
connection with such Changes shall in no way constitute a constructive eviction
of Tenant or entitle Tenant to any abatement of rent.  Landlord shall have no responsibility or for
any reason be liable to Tenant for 

 50
 

any direct or indirect injury to or interference with
Tenant’s business arising from the Changes, nor shall Tenant be entitled to any
compensation or damages from Landlord for any inconvenience or annoyance
occasioned by such Changes or Landlord’s actions in connection with such
Changes.  Landlord shall use commercially
reasonable efforts to minimize interference with the conduct of Tenant’s
business in connection with any of the foregoing.

30.          Intentionally
Omitted.

31.          Holding
Over.  If Tenant remains in possession of the
Premises or any part thereof after the expiration or earlier termination of the
Term hereof, such occupancy shall be a tenancy from month to month upon all the
terms and conditions of this Lease pertaining to the obligations of Tenant,
except that the Base Rent payable with respect to the first thirty (30) days
shall be one hundred fifty percent (150%) of the Base Rent payable immediately
preceding the Expiration Date of this Lease, and all Options, if any, shall be
deemed terminated and be of no further effect. 
If Tenant remains in possession of the Premises or any part thereof for
more than thirty (30) days after the expiration of the Term hereof, Tenant may,
at Landlord’s option, be treated as a tenant at sufferance or a trespasser, and
Tenant shall be liable to Landlord for use and occupancy charges equal to the
greater of (a) two hundred percent (200%) of the Base Rent payable immediately
preceding the Expiration Date of this Lease or (b) the fair market Base Rent
for the Premises as of the date Tenant holds over, plus all other amounts
otherwise payable by Tenant under this Lease as though it continued in
effect.  Nothing contained herein shall
be construed to constitute Landlord’s consent to Tenant holding over at the
expiration or earlier termination of the Lease term or to give Tenant the right
to hold over after the expiration or earlier termination of the Lease
Term.  Tenant hereby agrees to indemnify,
hold harmless and defend Landlord from any cost, loss, claim or liability
(including attorneys’ fees) Landlord may incur as a result of Tenant’s failure
to surrender possession of the Premises to Landlord upon the termination of
this Lease.

32.          Landlord’s
Access.

32.1        Access.  Landlord and Landlord’s agents, contractors
and employees shall have the right to enter the Premises at reasonable times
and on reasonable advance notice (which need not be in writing, and which need
not be given at all in the case of an emergency) for the purpose of inspecting
the Premises, performing any services required of Landlord, showing the
Premises to prospective purchasers, lenders, or (during the last twelve (12)
months of the Term) tenants, or for undertaking safety measures and making alterations,
repairs, improvements or additions to the Premises or to the Building.  In the event of an emergency, Landlord may
gain access to the Premises by any reasonable means, and Landlord shall not be
liable to Tenant for damage to the Premises or to Tenant’s property resulting
from such access. Landlord may at any time place on or about the Building for
sale or for lease signs and Landlord may at any time during the last ninety
(90) days of the term hereof place on or about the Premises for lease signs.  Landlord shall use commercially reasonable
efforts to minimize interference with the conduct of Tenant’s business in
connection with any of the foregoing.

32.2        Keys.  Landlord shall have the right to retain keys
and electric codes or card keys to the locks, card key access systems and other
security systems on the entry doors to the Premises and all interior doors at
the Premises.  At Landlord’s option,
Landlord may require

 51
 

Tenant to obtain all keys to door locks at the
Premises from Landlord’s engineering staff or Landlord’s locksmith and to only
use Landlord’s engineering staff or Landlord’s locksmith to change locks at the
Premises.  Tenant shall pay Landlord’s or
its locksmith’s standard charge for all keys and other services obtained from
Landlord’s engineering staff or locksmith.

33.          Security
Measures.  Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Property, and Landlord shall have
no liability to Tenant due to its failure to provide such services.  Tenant assumes all responsibility for the
protection of Tenant, its agents, employees, contractors and invitees and the
property of Tenant and of Tenant’s agents, employees, contractors and invitees
from acts of third parties.  Nothing
herein contained shall prevent Landlord, at Landlord’s sole option, from
implementing security measures for the Property or any part thereof, in which
event Tenant shall participate in such security measures and the cost thereof
shall be included within the definition of Operating Expenses, and Landlord
shall have no liability to Tenant or its agents, employees, contractors and
invitees arising out of Landlord’s negligent provision of security
measures.  Landlord shall have the right,
but not the obligation, to require all persons entering or leaving the Property
to identify themselves to a security guard and to reasonably establish that
such person should be permitted access to the Property.

34.          Easements.  Landlord reserves
to itself the right, from time to time, to grant such easements, rights and
dedications that Landlord deems necessary or desirable, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use
of the Premises by Tenant.  Tenant shall
sign (or propose reasonable modifications) any of the aforementioned documents
within fifteen (15) days after Landlord’s request and Tenant’s failure to do so
shall constitute a material default by Tenant. 
The obstruction of Tenant’s view, air, or light by any structure erected
in the vicinity of the Building, whether by Landlord or third parties, shall in
no way affect this Lease or impose any liability upon Landlord.

35.          Transportation
Management.  Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity, such as but not limited to the 128 Business
Council or LEXPRESS, to manage parking, transportation, air pollution, or
traffic in and around the Property or the metropolitan area in which the
Property is located.

36.          Severability.  The invalidity of
any provision of this Lease as determined by a court of competent jurisdiction
shall in no way affect the validity of any other provision hereof.

37.          Time
of Essence.  Time is of the essence with respect to each
of the obligations to be performed by Tenant under this Lease.

38.          Definition
of Additional Rent.  All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant’s Share of Operating Expenses and Tenant’s Share of Real Property
Tax increases, shall be deemed to be rent.

39.          Incorporation
of Prior Agreements.  This Lease and the attachments listed in Section 1.17 contain all agreements of
the parties with respect to the lease of the Premises and

 52
 

any other matter mentioned herein.  No prior or contemporaneous agreement or
understanding pertaining to any such matter shall be effective. Except as
otherwise stated in this Lease, Tenant hereby acknowledges that no real estate
broker nor Landlord or any employee or agents of any of said persons has made
any oral or written warranties or representations to Tenant concerning the
condition or use by Tenant of the Premises or the Property or concerning any
other matter addressed by this Lease.

 

 53

 

40.          Amendments.  This Lease may be
modified in writing only, signed by the parties in interest at the time of the
modification.

41.          Notices.  All notices
required or permitted by this Lease shall be in writing and may be delivered
(a) in person (by hand, by messenger or by courier service), (b) by U.S. Postal
Service certified mail, return receipt requested, or (c) by U.S. Postal Service
Express Mail, Federal Express or other nationally recognized overnight courier,
and shall be deemed sufficiently given if served in a manner specified in this Section 41. 
The addresses set forth in Section
1.22 of this Lease shall be the address of each party for notice
purposes, provided that in any case a notice permitted or required hereunder,
including without limitation any notice to pay rent or quit or similar notice,
shall be deemed personally delivered to Tenant on the date the notice is
personally delivered to any employee of Tenant at the Premises. Landlord or
Tenant may by written notice to the other specify a different address for
notice purposes.  A copy of all notices
required or permitted to be given to either party hereunder shall be
concurrently transmitted to such party or parties at such addresses as such
other party may from time to time hereinafter designate by written notice to
the other party.  Any notice sent by
certified mail, return receipt requested, shall be deemed given three (3) days
after deposited with the U.S. Postal Service. 
Notices delivered by U.S. Express Mail, Federal Express or other nationally
recognized courier shall be deemed given on the date delivered by the carrier
or the date delivery is refused at the appropriate party’s address for notice
purposes.  If notice is received on
Saturday, Sunday or a legal holiday, it shall be deemed received on the next
business day.  Nothing contained herein
shall be construed to limit Landlord’s right to serve any notice to pay rent or
quit or similar notice by any method permitted by applicable law, and any such
notice shall be effective if served in accordance with any method permitted by
applicable law whether or not the requirements of this Section 41 have been
met.

42.          Waivers.  No waiver by
Landlord of any provision hereof shall be deemed a waiver of any other
provision hereof or of any subsequent breach by Tenant of the same or any other
provision. Landlord’s consent to, or approval of, any act shall not be deemed
to render unnecessary the obtaining of Landlord’s consent to or approval of any
subsequent act by Tenant.  The acceptance
of rent hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord’s knowledge of such
preceding breach at the time of acceptance of such rent.  No acceptance by Landlord of partial payment
of any sum due from Tenant shall be deemed a waiver by Landlord of its right to
receive the full amount due, nor shall any endorsement or statement on any
check or accompanying letter from Tenant be deemed an accord and
satisfaction.  Tenant hereby waives for
Tenant and all those claiming under Tenant all rights now or hereafter existing
to redeem by order or judgment of any court or by legal process or writ, Tenant’s
right of occupancy of the Premises after any termination of this Lease or to
otherwise obtain relief from the forfeiture or termination of the Lease.

43.          Covenants. This Lease shall be construed as though Landlord’s
covenants contained herein are independent and not dependent and, to the extent
permitted by applicable law, Tenant hereby waives the benefit of any statute or
other law to the contrary. Tenant agrees that Tenant shall not have any right
to terminate this Lease on account of any default or breach by Landlord of its
obligations hereunder, and that Tenant’s remedies in the case of such a default
or breach

 54
 

shall be limited to an action against Landlord for
damages. All provisions of this Lease to be observed or performed by Tenant are
both covenants and conditions.

44.          Binding Effect; Choice of Law

Subject to any provision hereof restricting assignment
or subletting by Tenant, this Lease shall bind the parties, their heirs,
personal representatives, successors and assigns.  This Lease shall be governed by the laws of
the state in which the Property is located and any litigation concerning this
Lease between the parties hereto shall be initiated in the county in which the
Property is located.

45.          Attorneys’
Fees.  If Landlord or Tenant brings an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, or appeal thereon, shall be entitled to its reasonable
attorneys’ fees and court costs to be paid by the losing party as fixed by the
court in the same or separate suit, and whether or not such action is pursued
to decision or judgment.  The attorneys’
fee award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys’ fees and court costs
reasonably incurred in good faith. 
Landlord shall be entitled to reasonable attorneys’ fees and all other
costs and expenses incurred in the preparation and service of notices of
default and consultations in connection therewith, whether or not a legal
action is subsequently commenced in connection with such default. Landlord and
Tenant agree that attorneys’ fees incurred with respect to defaults and
bankruptcy are actual pecuniary losses within the meaning of Section
365(b)(1)(B) of the Bankruptcy Code or any successor statute.

46.          Auctions.  Tenant shall not
conduct, nor permit to be conducted, either voluntarily or involuntarily, any
auction upon the Premises or the Common Areas. 
The holding of any auction on the Premises or Common Areas in violation
of this Section 46 shall
constitute a material default hereunder.

47.          Signs.  Tenant shall not
place any sign upon the Premises (including on the inside or the outside of the
doors or windows of the Premises) or the Building without Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole
discretion.  Landlord shall have the
right to place any sign it deems appropriate on any portion of the Building or
the Property except the interior of the Premises.  Any sign Landlord permits Tenant to place
upon the Premises shall be maintained by Tenant, at Tenant’s sole expense.  Landlord shall
include Tenant’s name in the Building’s directories (main lobby and third floor
elevator lobby) at Landlord’s expense, and the cost of any subsequent
modifications thereto shall be paid for by .

48.          Merger.  The voluntary or
other surrender of this Lease by Tenant, or a mutual cancellation thereof, or a
termination by Landlord, shall not result in the merger of Landlord’s and
Tenant’s estates, and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.

 55
 

49.          Quiet
Possession.  Provided there is no Event of Default
hereunder, and subject to the rights of any lender (and in that regard subject
to Section 26), Tenant shall have quiet
possession of the Premises for the entire Term hereof, subject to all of the
provisions of this Lease.

50.          Authority.  Each party
represents and warrants to the other that the individual executing and
delivering this Lease is duly authorized to execute and deliver this Lease on
behalf of said party, that said party is duly authorized to enter into this
Lease, and that this Lease is enforceable against said party in accordance with
its terms.

51.          Conflict.  Except as otherwise
provided herein to the contrary, any conflict between the printed provisions,
exhibits, addenda or riders of this Lease and the typewritten or handwritten
provisions, if any, shall be controlled by the typewritten or handwritten
provisions.

52.          Multiple
Parties.  If more than one person or entity is named as
Tenant herein, the obligations of Tenant shall be the joint and several
responsibilities of all persons or entities named herein as Tenant.  Service of a notice in accordance with Section 41 on one Tenant shall be deemed
service of notice on all Tenants.

53.          Interpretation.  This Lease shall be
interpreted as if it was prepared by both parties and ambiguities shall not be
resolved in favor of Tenant because all or a portion of this Lease was prepared
by Landlord.  The captions contained in
this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease.  As used in
this Lease the words tenant and landlord include the plural as well as the
singular.  Words used in the neuter
gender include the masculine and feminine gender.

54.          Prohibition
Against Recording.  Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant.  Either Landlord or Tenant shall have the
right to record a notice of this Lease, and the other party shall execute,
acknowledge and deliver to the party requesting same for recording any such
notice within thirty (30) following request. The form of any such notice shall
be reasonably acceptable to counsel for each party.

55.          Relationship
of Parties.  Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

56.          Rules
and Regulations.  Tenant agrees to abide by and conform to the
Rules and to cause its employees, suppliers, customers and invitees to so abide
and conform.  Landlord shall have the
right, from time to time, to modify, amend and enforce the Rules in a
non-discriminatory manner. Landlord shall not be responsible to Tenant for the
failure of other persons including, but not limited to, other tenants, their
agents, employees and invitees to comply with the Rules.

57.          Right
to Lease.  Landlord reserves the absolute right to
effect such other tenancies in the Building or the Property as Landlord in its
sole discretion shall determine, and Tenant is not relying on any
representation that any specific tenant or number of tenants will occupy the
Building or the Property.

 56
 

58.          Intentionally
Omitted.

59.          Intentionally
Omitted.

60.          Attachments.  The items listed in
Section 1.21 are a part of this
Lease and are incorporated herein by this reference.

61.          Costs
Related to Tenant Requests.  To the extent that the proper evaluation of,
and/or response to, any request by Tenant reasonably requires professional
advice or input, and if Landlord in fact seeks such professional advice, Tenant
shall (except as may otherwise be provided in this Lease) reimburse Landlord
promptly upon request for the actual and reasonable out-of-pocket costs and
expenses incurred by Landlord as a result of any Tenant request, including, for
example, legal fees and expenses incurred to review an assignment or subletting
request or architectural and engineering fees incurred to review a proposed
alteration by Tenant.

62.          Confidentiality.  Tenant acknowledges
and agrees that the terms of this Lease are confidential and constitute
propriety information of Landlord. 
Disclosure of the terms hereof could adversely affect the ability of
Landlord to negotiate other leases with respect to the Building and may impair
Landlord’s relationship with other tenants of the Building. Except to the extent required by any applicable
statutes, rules, regulations, including, but not limited to, any filings
required by the Securities and Exchange Commission, the National Association of
Securities Dealers or any regulatory body, or in connection with any legal
action or as requested by its auditors, Tenant agrees that it and its
partners, officers, directors, employees, brokers, and attorneys, if any, shall
not disclose the terms and conditions of this Lease to any other person or
entity without the prior written consent of Landlord which may be given or
withheld by Landlord, in Landlord’s sole discretion.  It is understood and agreed that damages
alone would be an inadequate remedy for the breach of this provision by Tenant,
and Landlord shall also have the right to seek specific performance of this
provision and to seek injunctive relief to prevent its breach or continued
breach.

63.          Waiver
Of Jury Trial.  LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF
INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.  LANDLORD AND TENANT ACKNOWLEDGE THAT THEY
HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND
VOLUNTARY CONSENT THERETO.  THE PARTIES
HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE
ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD
AND TENANT WITH RESPECT TO THE PREMISES. 
TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN THE OPPORTUNITY TO

 57
 

HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO
ITS EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD’S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES.  THIS LEASE SHALL BECOME
BINDING UPON LANDLORD ONLY WHEN FULLY EXECUTED BY BOTH PARTIES AND WHEN
LANDLORD HAS DELIVERED A FULLY EXECUTED ORIGINAL OF THIS LEASE TO TENANT.

64.          Access
To Premises.  Tenant shall have access to the Premises 24
hours a day, 7 days per week, but such access shall always be subject to
reasonable rules and regulations from time to time established for the Building
by Landlord (and shall be subject to interruption due to causes beyond Landlord’s
reasonable control).

Balance of Page
Intentionally Left Blank

 58
 

IN WITNESS WHEREOF, the undersigned have hereunto se their hands and
seals as of the date first above written.

	
  

  	
   

  	
  LANDLORD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Realty Associates Fund VI, L.P.,

  
	
   

  	
   

  	
  a Delaware limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Fund VI LLC,

  
	
   

  	
   

  	
   

  	
  a Massachusetts limited liability company,

  
	
   

  	
   

  	
   

  	
  general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors LLC, a Delaware

  
	
   

  	
   

  	
   

  	
  limited liability company, Manager

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors Trust, a

  
	
   

  	
   

  	
   

  	
   

  	
  Massachusetts business trust, sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  /s/ James P. Raisides

  	
   

  
	
   

  	
   

  	
   

  	
  Name: James P. Raisides

  
	
   

  	
   

  	
   

  	
  Title: Sr. Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Fund VI Texas Corporation,

  
	
   

  	
   

  	
   

  	
  a Texas corporation, general partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ James P. Raisides

  	
   

  
	
   

  	
   

  	
   

  	
  Name: James P. Raisides

  
	
   

  	
   

  	
   

  	
  Title: Sr. Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NITROMED, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth M. Bate

  	
   

  
	
   

  	
   

  	
  Name: Kenneth M. Bate

  
	
   

  	
   

  	
  Title: President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James G. Ham, III

  	
   

  
	
   

  	
   

  	
  Name: James G. Ham, III

  
	
   

  	
   

  	
  Title: Vice President, CFO, Treasurer and Secretary

  
															

 

 59
 

IF TENANT IS A CORPORATION, TRUST, LIMITED PARTNERSHIP
OR LIMITED LIABILITY COMPANY, A SECRETARY’S, CLERK’S, TRUSTEE’S, GENERAL
PARTNER’S OR MANAGING MEMBER’S CERTIFICATE OF THE AUTHORITY AND THE INCUMBENCY
OF THE PERSON SIGNING ON BEHALF OF TENANT SHALL BE ATTACHED.

 

 60

 

EXHIBIT A

LAYOUT PLAN

 61
 

EXHIBIT A-1

WORK LETTER

45
Hayden Avenue

Lexington MA

 -
Nitromed — Work Letter -

February 9,
2007

	
  I. General Requirements

  	
   

  
	
   

  	
   

  
	
  ADA

  	
  All architectural and engineering will conform to
  the requirements of ADAAG. All new construction and renovations shall comply
  to with the Americans with Disabilities Act.

  
	
   

  	
   

  
	
  Building Codes

  	
  All new construction and renovations shall be built
  in full compliance with all city regulation, the city zoning ordinance and
  state building codes. The contractor shall obtain and pay for all applicable
  permits including building and occupancy permits.

  
	
   

  	
   

  
	
  Substitutions

  	
  The information given here is intended to provide
  minimum quality levels for construction standards. Substitutions will be
  entertained but must be approved in writing by the owner’s architect and
  agent

  
	
   

  	
   

  
	
  Existing Conditions

  	
  Where improvements as planned to modify an existing
  space, the existing condition shall not fall below the standard described in
  this document.

  
	
   

  	
   

  
	
  Electric Meters

  	
  Tenant must connect all power sources to meters
  supplied by Landlord

  
	
   

  	
   

  
	
  II. Doors, Frames & Hardware

  
	
   

  	
   

  
	
  Main Tenant

  	
   

  
	
  Entrance Doors

  	
  Main tenant entrance door shall be 3’-0” wide x
  8’-0” high, 1-3/4” thick, rail & stile, natural finished wood door with
  glass panel and adjacent natural finished wood framed sidelight to match
  existing. Hardware will include 2 pairs of butt hinges, one lever action lock
  set, one floor stop & one closer.

  
	
  Additional Tenant

  	
   

  
	
  Entrance Doors

  	
  Additional entrance doors will be 3’-0” x 7’-0”,
  natural finished wood, solid core, 1 3¤4”
  thick, to match existing conditions and finished with two coats clear
  polyurethane. Door frames will be natural finish wood to match existing.
  Hardware will include 2 pairs of butt hinges, one lever action lock set, one
  floor stop, and one closer. Entrance doors will be provided in sufficient
  quantity to meet local code requirements.

  

 

 62
 

 

	
  Interior Doors

  	
  Interior doors will be 3’-0” x 7’-0”, natural finish
  wood, solid core, 1 3¤4”
  thick, stained to match existing conditions and finished with two coats of
  polyurethane. Door frames will be hollow metal (unless otherwise noted) to
  match existing. Hardware will include 1-1/2 pairs of butt hinges, one lever
  action passage latch set and one floor stop.

  
	
   

  	
   

  
	
   

  	
  Door finish to match - HALCON Light Beech - BE10S5

  
	
   

  	
   

  
	
  Sidelights

  	
  All offices will have sidelights. Sidelights will be
  2’-0” x 7’-0” with hollow metal frames painted to match door frames.

  
	
   

  	
   

  
	
  Door Hardware

  	
  All door hardware shall be US26D brushed chrome
  finish.

  
	
   

  	
   

  
	
   

  	
  All pairs and uneven pairs shall receive concealed
  manual flush bolts at top and bottom of inactive leaf.

  
	
   

  	
   

  
	
   

  	
  Passage Latch Set:

  
	
   

  	
  “Schlage” Series “D” Athens

  
	
   

  	
  Model: Passage #D10S

  
	
   

  	
   

  
	
   

  	
  Lock Set:

  
	
   

  	
  “Schlage” Series “D” Athens

  
	
   

  	
  Model: Lock #D73P

  
	
   

  	
   

  
	
   

  	
  Store Room Lock Set:

  
	
   

  	
  “Schlage” Series “D” Athens

  
	
   

  	
  Model: Lock #D80PD

  
	
   

  	
   

  
	
   

  	
  Dummy Trim:

  
	
   

  	
  “Schlage” Series “D” Athens

  
	
   

  	
  Model: #D170

  
	
   

  	
   

  
	
   

  	
  Stops:

  
	
   

  	
  “Ives” #436 Floor Stop

  
	
   

  	
   

  
	
   

  	
  Hinges:

  
	
   

  	
  “Hagar”

  
	
   

  	
  Number pairs per leaf varies, see door descriptions

  
	
   

  	
   

  
	
  Door Closures

  	
  All closures shall be US26D brushed chrome finish.

  
	
   

  	
   

  
	
   

  	
  Tenant wood doors: LCN 4041

  
	
   

  	
   

  
	
  III. Partitions

  	
   

  
	
   

  	
   

  
	
  Note: Partition thicknesses vary. Verify in field.

  

 

 63
 

 

	
  Typical Partition

  	
  Partitions will be 3-5/8” metal studs, 16” o.c. with
  one layer of 5/8” gypsum board on each side. Partition will extend from floor
  to 6” above acoustical tile ceiling. (Studs need only extend to 6” above
  ceiling).

  
	
   

  	
   

  
	
   

  	
  Partitions will be 2-1/2” metal studs, 16” o.c. with
  one layer of 5/8” gypsum board on each side. Partition will extend from floor
  to 6” above acoustical tile ceiling. (Studs need only extend to 6” above
  ceiling).

  
	
   

  	
   

  
	
  Demising Partition

  	
  Demising partition will be 3-5/8” metal studs, 16”
  o.c. with one layer of 5/8” type X gypsum board on each side, sound batt
  insulation. Wall will extend to deck of floor above.

  
	
   

  	
   

  
	
   

  	
  Demising partition will be 2-1/2” metal studs, 16”
  o.c. with one layer of 5/8” type X gypsum board on each side, sound batt insulation.
  Wall will extend to deck of floor above.

  
	
   

  	
   

  
	
  Covebase

  	
  All partitions will have a vinyl base, 4” high,
  color selection to be from building standard. Straight base at carpet, cove
  base at VCT. Johnsonite 1/8” vinyl base — Color — 44 — Dark Brown

  
	
   

  	
   

  
	
  IV. Ceilings

  	
   

  
	
   

  	
   

  
	
  Tenant Area

  	
   

  
	
  Tile and Grid

  	
  Shall be 24” x 24” lay-in mineral acoustical tile
  “Armstrong”, Model 2195, white tile, with angled tegular edge, to match
  existing, on an exposed 15/16” grid “T” white suspension system.

  
	
   

  	
   

  
	
   

  	
  Ceiling heights will be: 9’-4”

  
	
   

  	
   

  
	
  V. Floor

  	
   

  
	
   

  	
   

  
	
  Tenant Area

  	
   

  
	
   

  	
   

  
	
  Carpeting

  	
  Tenant will have its choice of “Bigelow” carpeting.
  All carpet shall be directly glued down and min. 28 oz. (bldg. standard).

  
	
   

  	
   

  
	
   

  	
  Field Carpet - Bigelow - Grid works W024 - color
  3779 Wrought Iron - 32 oz. per sq yd

  
	
   

  	
  Accent Border - Spectrum III 36 BC112 - color 7979
  Ebony - 36 oz. per sq yd

  

 

 64
 

 

	
  Tile

  	
  Shall be 12” x 12”standard vinyl composition to be
  installed only in kitchen area, mail room and computer server rooms. Tile shall
  be Armstrong Imperial Texture Standard Excelon — Color —Polar White - 51941
  w/ 20% random accent tile Shadow Blue - 51807

  
	
   

  	
   

  
	
  VI. Painting and Wallcovering

  
	
   

  
	
  Painting

  	
  All wall surfaces shall receive two coats of
  “Benjamin Moore” (or equal) pearl finish latex paint. Color selection will be
  tenant’s discretion with not more than one color per room. All metal door
  frames shall receive two coats of semi-gloss latex.

  
	
   

  	
   

  
	
  VII. Specialties

  	
   

  
	
   

  	
   

  
	
  Window Coverings

  	
  Vertical “Laserlite” blinds shall be installed at
  exterior windows throughout the tenant area. Blinds will be uniform in color
  throughout the building.

  
	
   

  	
   

  
	
   

  	
  Track: “Laserlite” V-3000, color: clear anodized
  aluminum

  
	
   

  	
   

  
	
   

  	
  Louvers: 3-1/2” wide perforated PVC, color: to match
  existing

  
	
   

  	
   

  
	
  Signage

  	
  Company name in white vinyl lettering, reverse cut.
  No logos are allowed.

  
	
   

  	
   

  
	
  Movable Partition

  	
  Movable partition of approximately 16’-3” x 9’high
  to be provided in split conference room. Hufcor or equal.

  
	
   

  	
   

  
	
  VIII. Lighting

  	
   

  
	
   

  	
   

  
	
  Tenant Area

  	
   

  
	
   

  	
   

  
	
  Lighting

  	
  “Lightolier” #DPA2G18LP332 or equal. Low brightness,
  2’x4’, 18- cell, three tube parabolic fixtures.

  
	
   

  	
   

  
	
   

  	
  “Lightolier” Paralyte #PLA2G9LP3U4OC or equal. Low
  brightness, 2’x2’, 9- cell, two-tube (“U”) parabolic fixtures.

  
	
   

  	
   

  
	
   

  	
  “Lightolier” or equal fluorescent downlight fixtures
  to match existing.

  
	
   

  	
   

  
	
  IX. Fire Protection

  	
   

  
	
   

  	
   

  
	
  Sprinklers

  	
  A complete fire protection sprinkler system using
  exposed chrome ring, semi-recessed sprinkler heads, manufactured by Reliable,
  will be provided to protect normal office use. Additional fire protection for
  special uses will be provided at tenant’s request. Tenant should advise its
  architect that sprinkler heads have already been installed. Relocation or
  additional heads will be at tenant’s expense.

  

 

 65
 

 

	
  Fire Extinguishers

  	
  “Larsen’s” or equal semi-recessed fire extinguisher
  white, full glass cabinets to match existing.

  
	
   

  	
   

  
	
  Smoke Detectors

  	
  Smoke detectors shall be installed to meet all
  local, state, & federal codes.

  
	
   

  	
   

  
	
  Horn Strobes

  	
  Horn Strobes shall be installed to meet all local,
  state, & federal codes.

  
	
   

  	
   

  
	
  Exit Signage

  	
  “Cooper” Sure-Lites or equal. Exit signage shall be
  installed to meet all local, state, & federal codes.

  
	
   

  	
   

  
	
  X. Electrical Service

  	
   

  
	
   

  	
   

  
	
  Electrical Outlets

  	
  One duplex outlet will be provided for each 100
  square feet of usable area. Outlets shall be ivory on ivory in all public
  spaces, and ivory on ivory in all tenant spaces.

  
	
   

  	
   

  
	
  XI. HVAC

  	
   

  
	
   

  	
   

  
	
  HVAC System

  	
  A zoned variable air volume HVAC system will be
  provided including distribution duct work, diffusers, return air grilles and
  thermostatic controls for a normal office layout. The perimeter boxes in the
  building are also fan powered induction type with heating hot water coils.
  Relocation of VAV boxes or creation of additional for specialty areas will not
  be allowed.

  
	
   

  	
   

  
	
   

  	
  The building is equipped with a “Johnson” pneumatic
  automatic temperature control system.

  
	
   

  	
   

  
	
   

  	
  If areas such as computer rooms, copier rooms,
  telephone/network rooms, or cafeterias require special cooling equipment,
  stand-alone units will be provided at the tenant’s expense.

  
	
   

  	
   

  
	
  Zones

  	
  Exterior: 12-15’ x 40-60’ (diffusers every other
  window and approx. 14 zones per floor) Linear diffusers are standard

  
	
  Corners:

  	
  Separate Zones

  
	
  Interior:

  	
  1500-2000 SF (Approx. 12 zones per floor)

  
	
  Conference Rooms:

  	
  Separate zone recommended

  
	
  Returns & Diffusers

  	
  All HVAC returns & diffusers shall match
  existing. Returns & diffusers shall be 2’x2’. Provide 4’ linear diffusers
  at exterior window line.

  

 

 66
 

EXHIBIT A-2

Temporary Premises

 67

 

EXHIBIT B

VERIFICATION
LETTER

                      ,
200  

[Name of Contact]

[Name
of Tenant]

RE:          [Name
of Tenant]

[Premises Rentable Area and Floor]

Dear
[Name of Contact]:

Reference is made to that certain Lease, dated as of            ,
200  , between THE REALTY ASSOCIATES FUND VI, L/P/, as
Landlord and NitroMed, Inc. as Tenant, with respect to approximately 19,815
square feet of space on the third floor of 45-55 Hayden Avenue, Lexington,
Massachusetts. In accordance with Section 3.1 of the Lease, this is to confirm
that the Commencement Date of the Term of such Lease occurred on            ,
and that the Term of such Lease shall expire on            ,
200  , subject to Tenant’s Option to Extend set forth in Section 27
of the Lease. If the foregoing is in accordance with your understanding, would
you kindly execute this letter in the space provided below, and return the same
to us for execution by Landlord, whereupon it will become a binding agreement
between us.

Very truly yours,

	
  

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
  [Name of Tenant]

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
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 68
 

EXHIBIT C

RULES AND REGULATIONS

GENERAL RULES

Tenant shall faithfully
observe and comply with the following Rules and Regulations. In the event of
any irreconcilable conflict between these Rules and Regulations, on the one
hand, and the Lease, on the other, the terms and conditions of the Lease shall
prevail and control.

1.             Tenant shall not alter any locks or install any new or
additional locks or bolts on any doors or windows of the Premises without
obtaining Landlord’s prior written consent, which shall not be unreasonably
withheld, conditioned or delayed.  Tenant
shall bear the cost of any lock changes or repairs required by Tenant. Keys
required by Tenant must be obtained from Landlord at a reasonable cost to be
established by Landlord.

2.             All doors opening to public corridors shall be kept
closed at all times except for normal ingress and egress to the Premises.
Tenant shall assume any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.

3.             Landlord reserves the right to close and keep locked all
entrance and exit doors of the Building except during the Building’s normal
hours of business as defined in Section 11.4
of the Lease.  Tenant, its employees and
agents must be sure that the doors to the Building are securely closed and
locked when leaving the Premises if it is after the normal hours of business of
the Building.  Tenant, its employees,
agents or any other persons entering or leaving the Building at any time when
it is so locked, or any time when it is considered to be after normal business
hours for the Building, may be required to sign the Building register.  Access to the Building or the Property may be
refused unless the person seeking access has proper identification or has a
previously received authorization for access to the Building or the
Property.  Landlord and its agents shall
in no case be liable for damages for any error with regard to the admission to
or exclusion from the Building or the Property of any person.  In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right to prevent or limit
access to the Building or the Property during the continuance thereof by any
means it deems appropriate for the safety and protection of life and property, subject to the applicable provisions of this Lease.

4.             Landlord reserves the right, in Landlord’s commercially
reasonable discretion, to close or limit access to the Building, the Property
and/or the Premises, from time to time, due to the failure of utilities, due to
damage to the Building, the Property and/or the Premises, to ensure the safety
of persons or property or due to government order or directive, and Tenant
agrees to comply with any such decision by Landlord.  If Landlord closes or limits access to the
Building, the Property and/or the Premises for the reasons described above,
Landlord’s actions shall not constitute a breach of the Lease.

5.             No furniture, freight or equipment of any kind shall be
brought into the Building without Landlord’s prior authorization, which shall
not be unreasonably withheld, delayed or conditioned.  All moving activity into or out of the
Building shall be scheduled with Landlord

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and done only at such time and in such manner as
Landlord reasonably designates.  Landlord
shall have the right to prescribe the weight, size and position of all safes
and other heavy property brought into the Building and also the times and
manner of moving the same in and out of the Building.  Safes and other heavy objects shall, if
considered reasonably necessary by Landlord, stand on supports of such
thickness as is necessary to properly distribute the weight, and Tenant shall
be solely responsible for the cost of installing all supports.  Except as may be expressly provided in the
Lease, (i) Landlord will not be responsible for loss of or damage to any such
safe or property in any case, and (ii) any damage to any part of the Building
or the Property, its contents, occupants or visitors by moving or maintaining
any such safe or other property shall be the sole responsibility and expense of
Tenant.

6.             The requirements of Tenant will be attended to only upon
application at the management office for the Building or at such office
location designated by Landlord.  Tenant
shall not ask employees of Landlord to do anything outside their regular duties
without special authorization from Landlord.

7.             Tenant shall not disturb, solicit, or canvass any
occupant of the Building and shall cooperate with Landlord and its agents to
prevent the same.  Tenant, its employees
and agents shall not loiter in or on the entrances, corridors, sidewalks,
lobbies, halls, stairways, elevators, or any Common Areas for the purpose of
smoking tobacco products or for any other purpose, nor in any way obstruct such
areas, and shall use them only as a means of ingress and egress for the
Premises.  Smoking shall not be permitted
in the Common Areas.

8.             The toilet rooms, urinals and wash bowls shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein.  The expense of any breakage, stoppage or
damage resulting from the violation of this rule shall be borne by the tenant
who, or whose employees or agents, shall have caused it.

9.             Except for vending machines intended for the sole use of
Tenant’s employees and invitees, no vending machine or machines other than
fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord, which shall
not be unreasonably withheld, conditioned or delayed.  All vendors or other persons visiting the Premises
shall be subject to the reasonable control of Landlord.  Tenant shall not permit its vendors or other
persons visiting the Premises to solicit other tenants of the Building.

10.           Tenant shall not use or keep in or on
the Premises or the Building any kerosene, gasoline or other inflammable or
combustible fluid or material.  Tenant
shall not bring into or keep within the Premises or the Building any animals,
birds, bicycles or other vehicles.

11.           Tenant shall not use, keep or permit
to be used or kept, any foul or noxious gas or substance in or on the Premises,
or permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of
noise, odors, or vibrations, or to otherwise interfere in any way with the use
of the Building or the Property by other tenants.

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12.           No cooking shall be done or permitted
on the Premises, nor shall the Premises be used for the storage of merchandise,
for loading or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters’ Laboratory approved equipment and
microwave ovens may be used in the Premises for heating food and brewing
coffee, tea, hot chocolate and similar beverages for employees and visitors of
Tenant, provided that such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations; and provided
further that such cooking does not result in odors escaping from the Premises.

13.           Landlord shall have the right to
reasonably approve where and how telephone wires are to be introduced to the
Premises.  No boring or cutting for wires
shall be allowed without the consent of Landlord as provided in Section 7.3 of
the Lease. The location of telephone call boxes and other office equipment
affixed to the Premises shall be subject to the approval of Landlord.  Tenant shall not mark, drive nails or screws,
or drill into the partitions, woodwork or plaster contained in the Premises or
in any way deface the Premises or any part thereof without Landlord’s prior
written consent.  Tenant shall not
install any radio or television antenna, satellite dish, loudspeaker or other
device on the roof or exterior walls of the Building.  Tenant shall not interfere with broadcasting
or reception from or in the Building or elsewhere.

14.           Landlord reserves the right to
exclude or expel from the Property any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of these Rules and Regulations.

15.           Tenant shall not waste electricity,
water or air conditioning and agrees to cooperate fully with Landlord to ensure
the most effective operation of the Building’s heating and air conditioning
system, and shall refrain from attempting to adjust any controls.  Tenant shall not without the prior written
consent of Landlord use any method of heating or air conditioning other than
that supplied by Landlord.  Tenant shall
not use electric fans or space heaters in the Premises.

16.           Tenant shall store all its trash and
garbage within the interior of the Premises. 
No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash from the Building without
violation of any law or ordinance governing such disposal.  All trash, garbage and refuse disposal shall
be made only through entry-ways and elevators provided for such purposes at
such times as Landlord shall designate.

17.           Tenant shall comply with all safety,
fire protection and evacuation procedures and regulations established by
Landlord or any governmental agency.

18.           No awnings or other projection shall
be attached to the outside walls or windows of the Building by Tenant.  No curtains, blinds, shades or screens shall
be attached to or hung in any window or door of the Premises without the prior
written consent of Landlord.  Landlord shall
have the right to require Tenant to use Landlord’s standard curtains or window
coverings. Tenant shall not place any signs in the windows of the Premises or
the Building.  All electrical ceiling
fixtures hung in the Premises must be fluorescent and/or of a quality, type,
design and bulb color approved by Landlord. 
Tenant shall abide by Landlord’s reasonable regulations

 71
 

concerning the opening and closing of window coverings
which are attached to the windows in the Premises.  The skylights, windows, and doors that
reflect or admit light and air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant, nor shall
any bottles, parcels or other articles be placed on the window sills.

19.           Tenant shall not employ any person or
persons other than the janitor of Landlord for the purpose of cleaning the
Premises unless otherwise agreed to in writing by Landlord.   Landlord shall not be obligated to notify
Tenant of the times at which the janitorial staff will enter the Premises, and
Tenant hereby authorizes the janitorial staff to enter the Premises at
reasonable times, without notice. 
Janitor service shall include ordinary dusting and cleaning by the
janitor assigned to such work and shall not include cleaning of carpets or
rugs, except normal vacuuming, or moving of furniture and other special
services. Window cleaning shall be done only by Landlord at reasonable
intervals and as Landlord deems necessary.

20.           Tenant acknowledges that the local
fire department has previously required Landlord to participate in a fire and
emergency preparedness program or may require Landlord and/or Tenant to
participate in such a program in the future. 
Tenant agrees to take all actions necessary to comply with the
requirements of such a program including, but not limited to, designating
certain employees as “fire wardens” and requiring them to attend any necessary
classes and meetings and to perform any required functions.

PARKING RULES

1.             Parking areas shall be used only for parking by vehicles
no longer than full size, passenger automobiles or minivans.  Tenant and its employees shall park
automobiles within the lines of the parking spaces.

2.             Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant’s employees, suppliers,
shippers, customers, or invitees to be loaded, unloaded, or parked in areas
other than those designated by Landlord for such activities.  Users of the parking area will obey all
posted signs and park only in the areas designated for vehicle parking.

3.             Parking stickers, parking cards and other identification
devices shall be the property of Landlord and shall be returned to Landlord by
the holder thereof upon termination of the holder’s parking privileges.  Landlord may require Tenant and each of its
employees to give Landlord a deposit when a parking card or other parking
device is issued.  Landlord shall not be
obligated to return the deposit unless and until the parking card or other
device is returned to Landlord.  Tenant
will pay such replacement charges as is reasonably established by Landlord for
the loss of such devices.  Loss or theft
of parking identification stickers or devices from automobiles must be reported
to the parking operator immediately.  Any
parking identification stickers or devices reported lost or stolen found on any
unauthorized car will be confiscated and the illegal holder will be subject to
prosecution.

4.             Landlord reserves the right to relocate all or a part of
parking spaces within the parking area, and to allocate them between compact
and standard size and tandem spaces, as long as the same complies with the
terms of the Lease and with applicable laws, ordinances and regulations.

 72
 

5.             Unless otherwise instructed, every person using the
parking area is required to park and lock his own vehicle.  Landlord will not be responsible for any
damage to vehicles, injury to persons or loss of property, all of which risks
are assumed by the party using the parking area.

6.             Validation of visitor parking, if established, will be
permissible only by such method or methods as Landlord may establish at rates
determined by Landlord, in Landlord’s sole discretion.  Only persons visiting Tenant at the Premises
shall be permitted by Tenant to use the Property’s visitor parking facilities.

7.             The maintenance, washing, waxing or cleaning of vehicles
in the parking spaces or Common Areas is prohibited.

8.             Tenant shall be responsible for seeing that all of its
employees, agents and invitees comply with the applicable parking rules,
regulations, laws and agreements. 
Parking area managers or attendants, if any, are not authorized to make
or allow any exceptions to these Parking Rules and Regulations.  Landlord reserves the right to terminate
parking rights for any person or entity that willfully fails or refuses to
comply with these rules and regulations, provided that (except in circumstances
where safety of persons or property is reasonably likely to be jeopardized)
Landlord shall have given Tenant notice thereof and such failure or refusal is
not corrected to the Landlord’s reasonable satisfaction within ten (10) days.

9.             Every driver is required to park his own car. Tenant
agrees that all responsibility for damage to cars or the theft of or from cars
is assumed by the driver, and further agrees that Tenant will hold Landlord
harmless for any such damages or theft.

10.           Any vehicle parked by Tenant, its employees, contractors or visitors in
a reserved parking space or in any area of the parking area that is not
designated for the parking of such a vehicle may, at Landlord’s option, and
without notice or demand, be towed away by any towing company selected by
Landlord, and the cost of such towing shall be paid for by Tenant.

11.           At Landlord’s request, Tenant shall
provide Landlord with a list which includes the name of each person using the
parking facilities based on Tenant’s parking rights under this Lease and the
license plate number of the vehicle being used by that person. Tenant shall
provide Landlord with an updated list semi-annually or as Landlord may
otherwise request.

Landlord reserves the
right at any time to change or rescind any one or more of these Rules and
Regulations, or to make such other and further reasonable Rules and Regulations
as in Landlord’s reasonable judgment may from time to time be necessary for the
management, safety, care and cleanliness of the Property, and for the
preservation of good order therein, as well as for the convenience of other
occupants and tenants therein.  Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant, but no such waiver by Landlord shall be construed as a
waiver of such Rules and Regulations in favor of any other tenant, nor prevent
Landlord from thereafter enforcing any such Rules or Regulations against any or
all tenants of the Property.  Tenant
shall be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition of its occupancy of the Premises.

 

 73

EXHIBIT D

CLEANING SPECIFICATIONS

Janitorial vendor will
perform daily, weekly, and monthly services at 45-55 Hayden Ave. Lexington,
MA.  The services are the following:

Cleaning will begin at
6:00pm each evening.  Monday through
Friday.  The contractor shall not provide
cleaning during holidays unless otherwise requested, if cleaning is requested
on a holiday Monday through Friday, cleaning services shall be provided at an
additional cost.

Janitorial company to provide
all equipment and material necessary to perform all cleaning.

Services will also
include one full-time Day Porter.

All cleaners and
supervisors shall be provided with proper identification (uniforms and name
tags)

Contractor shall have a
full time Manager on location nightly, and identified as Manager.

Cleaners shall be
restricted to the assigned areas, keep tenant doors locked and familiar with
the security systems.

Janitorial Manager
quality control audit tour of common area & tenants areas performed once
per month during normal business hours.  The
inspections of tenant space also allows each tenant the option to discuss
deficiencies or concerns.

Lobbies & Common Areas
(Nightly):

Daily:

·      Vacuum
clean all carpet floor surfaces, including entry mats.  Inspect for stains and remove where possible.

·      thoroughly
sweep and damp mop all hard surface floors

·      empty
all waste receptacles and replace liners (to be supplied by customer)

·      remove
dust from all horizontal surfaces, furniture, window ledges, radiators, coat
racks, artificial plants, paintings and other wall decorations using chemically
treated cloths

·      completely
wipe all furniture

·      spot
clean doors and walls, especially around door frames and light switches

·      spot
clean all glass

Weekly:

·      spray-buff
or hi-speed burnish all hard surface floors

·      completely
wash all glass

·      vacuum
carpet edges

Monthly:

·      vacuum
all upholstered furniture

·      render
all dusting of accessible surfaces not reached by daily cleaning

Quarterly:

·      dust
all ceiling vents

General Office Areas:

Daily:

·      empty
all waste receptacles and replace liners (to be supplied by customer)

·      empty
all Hayden Recycles receptacles when 3/4
full to recycle container at loading doc.

·      spot
clean all glass doors, partitions and glass walls that may exist

·      spot
vacuum all carpeting

·      thoroughly
sweep and damp mop all hard surface floors

Weekly:

·      remove
dust from all furniture, window ledges, radiators, etc.

·      spot
clean doors and walls especially around door frames and light switches

·      completely
wash all glass doors, partitions and glass walls that may exist

·      thoroughly
vacuum all carpeting

·      spot
clean all carpeting

Monthly:

·      render
all dusting of accessible surfaces not reached by daily cleaning

·      spray-buff
or hi-speed burnish all hard surface floors

Quarterly:

·      dust
all ceiling vents

Cafeteria:

Daily:

·      pull
all trash and replace liners (to be provided by customer)

·      wipe
down all trash containers

·      remove
dust from all furniture, window ledges, radiators, coat racks, artificial
plants, paintings and other wall decorations

·      clean
and polish all tables, chairs and arrange in an orderly fashion

·      spot
clean doors and walls especially around and behind trash receptacles

·      thoroughly
vacuum and spot clean all carpeting

·      thoroughly
dry mop and damp mop all hard surface floors

 2
 

Monthly:

·      spray-buff
or hi-speed burnish all hard surface flooring

Quarterly:

·      vacuum
all ceiling vents

General Items

1.               Any damages
internally or externally to the building will be reported to Jones Lang LaSalle
(781) 778-2563 (i.e. defective locks, plumbing etc.)

2.               All trash will be
removed from the building nightly.

3.               At the end of each
evening, all lights will be extinguished and doors secured.

 

 3

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