Document:

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                                                                    Exhibit 10.1

                               SUBLEASE AGREEMENT

This Sublease Agreement (this "Sublease") is made on this 16th day of July, 2002
between Antigenics, Inc., a Massachusetts Corporation, with an address of 34
Commerce Way, Woburn, Massachusetts 01801 a wholly-owned subsidiary of
Antigenics Inc., a Delaware corporation formerly known as Aquila
Biopharmaceuticals, Inc. ("Sublessor") and GTC Biotherapeutics, Inc., a
Massachusetts corporation with an address of 175 Crossing Boulevard, Suite 410,
Framingham, Massachusetts ("Sublessee").

                                    RECITALS

         WHEREAS, Aquila Biopharmaceuticals, Inc., a Delaware corporation and
wholly owned subsidiary of Sublessor, is the tenant under a lease with NDNE 9/90
Corporate Center LLC (the "Prime Lessor") dated September 19, 1997 as amended by
that certain First Amendment to Lease ("First Amendment") dated December 17,
1997, as further amended by that certain Second Amendment to Lease ("Second
Amendment") dated as of January 14, 1998, as further amended by that certain
Third Amendment to Lease ("Third Amendment") dated as of February 3, 1998, as
further amended by that certain Fourth Amendment to Lease ("Fourth Amendment")
dated as of February 27, 1998, as further Amended by that certain Fifth
Amendment to Lease ("Fifth Amendment") dated as of March 13, 1998 and as
affected by that certain Consent to Assignment of Lease ("Consent") dated April
2001 (the Lease as so amended and affected by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and
the Consent is hereinafter called the "Prime Lease") which relates to space in
the Building (as said term is defined in the Prime Lease) comprised of
approximately 41,020 rentable square feet located on the 1st, 2nd and 3rd floors
of the Building (the "Leased Premises");

         WHEREAS, Sublessee desires, and Sublessor has agreed, to sublet a
portion of the Leased Premises to the Sublessee consisting of approximately
11,852 rentable square feet located on the third floor of the Leased Premises
(referred to hereinafter as "Primary Space") and a portion of the Leased
Premises located on the second floor to Sublessee consisting of approximately
8,036 rentable square feet located on the second floor of the Leased Premises
(referred to hereinafter as "Secondary Space"); and

         WHEREAS, Sublessee desires, and Sublessor has agreed to grant, an
option to sublease the remainder of the Leased Premises consisting of
approximately 21,132 rentable square feet located on the first and second floor
of the Leased Premises (referred to hereinafter as "Tertiary Space").

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee covenant
and agree as follows:

1.       DEFINITIONS:

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a.    Additional Rent: any sum designated under this Sublease and/or the Prime
      Lease constitutes "Additional Rent" including, without limitation,
      payments by Sublessee to the Sublessor under the Antigenics Leasehold
      Lease. With respect to any amounts due under Prime Lease, Sublessee shall
      only be responsible for Sublessee's Proportionate Share of such costs.

b.    Annual Fixed Rent: the Annual Fixed Rent payable by the Sublessee to the
      Sublessor as set forth in Exhibit B attached hereto and made a part
      hereof, shall commence on the Sublease Commencement Date.

c.    Annual Rent: Annual Fixed Rent, Additional Rent and any other charge,
      and/or assessment payable by Sublessor to the Prime Lessor under the Prime
      Lease or payable by Sublessee to Sublessor under this Sublease. With
      respect to any amounts due under the Prime Lease, Sublessee shall only be
      responsible for Sublessee's Proportionate Share of such costs.

d.    Commencement Date of Prime Lease: September 9, 1998.

e.    Antigenics Leasehold Lease: shall refer to that lease agreement entered
      into between the Sublessor and the Sublessee as of the date hereof,
      attached hereto as Exhibit C.

f.    Primary Space: shall refer to that portion of the Leased Premises
      consisting of approximately 11,852 rentable square feet located on the
      third floor.

g.    Secondary Space: shall refer to that portion of the Leased Premises
      consisting of approximately 8,036 rentable square feet located on the
      second floor.

h.    Sublease Commencement Date: July 19, 2002 for the Primary Space and
      January 1, 2003 for the Secondary Space.

i.    Sublease Termination Date: December 31, 2006, unless the Sublessee
      exercises its rights to sublease the Tertiary Space, in which event the
      Sublease Termination Date shall be extended to September 30, 2010.

j.    Subleased Premises: the Subleased Premises consists of the Primary Space,
      the Secondary Space and the Tertiary Space, in the event Sublessee elects
      to exercise its rights under the Tertiary Space Option, as shown on a
      sketch plan attached hereto as Exhibit A.

k.    Sublessee's Proportionate Share: shall be based on the square footage of
      the Subleased Premises leased by the Sublessee divided by the square
      footage of the

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      Leased Premises in order to determine the Sublessee's equitable share of
      expenses.

l.    Sublessee's Security Deposit: shall refer to the Letter of Credit to be
      provided by the Sublessee to the Sublessor in an amount not less than Two
      Hundred Thousand and 00/100 Dollars ($200,000.00), the form of which is
      attached hereto as Exhibit E.

m.    Sublease Term: shall refer to the Sublessor's remaining term under the
      Prime Lease, specifically excluding any option terms.

n.    Tertiary Space: the remaining portion of the Leased Premises consisting of
      approximately 21,132 rentable square feet located on the second floor and
      first floor of the Leased Premises.

o.    Tertiary Space Option: shall refer to the Sublessee's option to sublease
      the Tertiary Space, as further set forth herein.

All other capitalized terms used in this Sublease not otherwise defined herein
shall have the meanings ascribed to such terms as set forth in the Prime Lease
and/or the Antigenics Leasehold Lease.

2. PRIME LEASE: The terms and conditions of the Prime Lease are hereby
incorporated by reference and made a part hereof, meaning that, as applicable,
references to "Tenant" therein shall be deemed to be "Sublessee" hereunder,
references to "Landlord" therein shall be deemed to be "Sublessor" hereunder,
and such other terms shall be deemed modified as may be appropriate in the given
context, provided:

      a.    Prime Lessor shall continue to have all rights set forth in the
            Prime Lease (notwithstanding the fact that Sublessor shall also have
            the same rights under this Sublease);

      b.    Sublessor shall not be deemed to have assumed any of the obligations
            of Prime Lessor as a result of the incorporation of the Prime Lease
            unless specifically set forth herein;

      c.    Sublessor, except as otherwise provided herein, shall not be liable
            for the performance of any of the obligations of Prime Lessor under
            the Prime Lease;

      d.    Sublessee shall have no claim against Sublessor by reason of any
            default in fulfilling such obligations upon the part of Prime Lessor
            unless such default

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            results from Sublessor's being in default under the Prime Lease and
            not due to a default of Sublessee hereunder;

      e.    Sublessor agrees not to modify or amend the Prime Lease without the
            consent of the Sublessee, which consent shall not be unreasonably
            withheld or delayed; and

      f.    with respect to work, services, repairs and restoration or the
            performance of other obligations required of Prime Lessor under the
            Prime Lease, if any, Sublessor's sole obligation with respect
            thereto, shall be to request the same, after requested by Sublessee,
            and to send all notices required under the Prime Lease to Prime
            Lessor, as the case may be.

3. TERM AND SUBLEASED PREMISES. Sublessor hereby sublets and demises unto
Sublessee and Sublessee hereby takes and hires from Sublessor the Subleased
Premises for the period commencing on the Sublease Commencement Date until the
Sublease Termination Date, unless this Sublease shall sooner terminate as herein
provided. Sublessee shall have the non-exclusive right to use, in common with
others entitled thereto, that certain number of parking spaces on the Leasehold
Parking Area, as defined under Section 2.3(a) of the Prime Lease, equal to four
(4) spaces per each 1,000 square feet of Subleased Premises.

4. ANNUAL RENT. Sublessee covenants and agrees to pay to Sublessor at the
address set forth above, or to such other address as Sublessor may specify by
notice to Sublessee:

      a.    Annual Fixed Rent which shall commence on Sublease Commencement Date
            and thereafter be due and payable on the first day of each and every
            month during the term of this Sublease at the rates set forth in
            Exhibit B, without notice or demand:

      b.    Additional Rent which shall be due and payable within the applicable
            time periods set forth in the Prime Lease and/or within ten (10)
            days after Sublessee's receipt of a demand in writing for such
            payment by Sublessor, or as otherwise set forth in the Antigenics
            Leasehold Lease. If the Sublessee shall fail to pay the Additional
            Rent when due or any other amounts, the Sublessor may elect to pay
            the same in which event all such payments shall be charged to and
            paid by the Sublessee, on demand, as Additional Rent, at Sublessor's
            option draw under the Letter of Credit. Sublessor shall be entitled
            to charge any fees or interest on such Additional Rent as permitted
            under the Prime Lease; and

      c.    Annual Rent for any portion of a calendar month at the beginning or
            end of the Sublease Term shall be prorated on a per diem basis.

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5. SECURITY DEPOSIT. This Sublease and the Antigenics Leasehold Lease shall be
secured by an Irrevocable Letter of Credit ("Letter of Credit") as further set
forth herein. The Letter of Credit shall be in the form of Exhibit E and shall
otherwise:

      a.    be in the stated original amount of not less than Two Hundred
            Thousand and 00/00 Dollars ($200,000.00) which amount shall increase
            by One Hundred Seventy Five Thousand Dollars ($175,000.00) by a
            replacement Letter of Credit for a total of Three Hundred Seventy
            Five Thousand 00/100 Dollars ($375,000.00), in the event the
            Sublessee shall elect to exercise its right to sublease the Tertiary
            Space, as provided hereunder. The Sublessor's receipt of the
            replacement Letter of Credit in the amount of Three Hundred Seventy
            Five Thousand 00/100 Dollars ($375,000.00) shall be a condition
            precedent to Sublessee occupying the Tertiary Space;

      b.    be issued in a form reasonably acceptable to Sublessor;

      c.    name Sublessor as its beneficiary;

      d.    be drawn on a FDIC insured financial institution reasonably
            satisfactory to Sublessor; and

      e.    expire no earlier than thirty (30) days after the expiration of the
            Sublease Termination Date.

Sublessor may, from time to time, without prejudice to any other remedy, use all
or a portion of the Letter of Credit to:

      a.    satisfy amounts owing to Sublessor under this Sublease and/or the
            Antigenics Leasehold Lease as a result of an Event of Default under
            such agreements;

      b.    cure any uncured Event of Default by Sublessee under this Sublease
            or the Antigenics Leasehold Lease; or

      c.    pay for any and all damages or costs incurred by Sublessor to
            enforce its rights under this Sublease or the Antigenics Leasehold
            Lease.

6. USE. Sublessee covenants and agrees to use the Subleased Premises only for
those uses specifically authorized in the Prime Lease.

7. INSURANCE. Sublessee agrees to observe and comply with the provisions of
Section 7 of the Prime Lease and, in addition, Sublessee shall maintain its own
insurance with respect to its personal property. All policies of insurance
procured by Sublessee shall be issued in forms and

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by insurance carriers reasonably acceptable to Sublessor and Prime Lessor and
name them both as additional insureds. Before Sublessor shall deliver possession
of the Subleased Premises to Sublessee, Sublessee shall provide Sublessor with
certificates of insurance evidencing the insurance coverages set forth in this
Section. Such certificates shall provide that, in the event of cancellation or
material change, thirty (30) days' prior written notice shall be given to
Sublessor and all other named insureds. To the extent provided in the Prime
Lease, each party agrees to waive the rights of recovery and to obtain from its
respective insurer a waiver of subrogation.

8. CONDITION OF SUBLEASED PREMISES: Sublessee acknowledges that it has inspected
the Subleased Premises and agrees to accept the Subleased Premises in "as-is"
condition, and further acknowledges that no representations or warranties as to
the condition thereof have been made to it by Sublessor and/or the Prime Lessor,
except as may be specifically set forth in Paragraph 9 of this Sublease.
Sublessee hereby covenants and agrees to undertake and perform all obligations
with respect to the Subleased Premises that Sublessor has undertaken to Prime
Lessor in the Prime Lease except as specifically set forth in Paragraph 9 of
this Sublease. Notwithstanding the above, Sublessor hereby agrees that it shall
be Sublessor's obligation to deliver the Subleased Premises, including the
Tertiary Space, on the Sublease Commencement Date , in the following condition
and with all of the following tasks completed (the "Sublessor Tasks") prior to
the Sublease Commencement Date for each leased space, at Sublessor's sole cost
and expense, subject only to the Sublessee Contribution, as defined below:

      a.    The Subleased Premises shall be clean of all chemicals and reagents;

      b.    All biosafety cabinets shall be decontaminated by a qualified vendor
            licensed in The Commonwealth of Massachusetts and Sublessor shall
            deliver to Sublessee copies of all decontamination records including
            documentation qualifying the Subleased Premises for release for
            unrestricted use per Commonwealth of Massachusetts regulations, 105
            CMR 120.291 and the Nuclear Regulatory Commission (NRC) document
            entitled "Guidelines for Decontamination of Facilities and Equipment
            Prior to Release for Unrestricted Use: Table 1."

      c.    All floors shall be broom clean and all lab counters and desks shall
            be free of dust and debris; and

      d.    Any damage to walls, floors, and/or ceilings caused by equipment
            removal shall be repaired and painted.

Sublessee shall reimburse Sublessor for costs associated with undertaking and
completing the Sublessor Tasks, in an aggregate amount for all of the Subleased
Premises not to exceed Fifteen Thousand and 00/100 Dollars ($15,000.00)
("Sublessee Contribution"). The Sublessee Contribution shall be charged to and
paid by the Sublessee, as Additional Rent with the monthly

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rent payment next due after Sublessee receives copies of invoices from the
vendors or suppliers substantiating the Sublessee Contribution.

9. OBLIGATION TO PROVIDE AND MAINTAIN UTILITY SERVICES

         a.       Sublessor's Obligations. Sublessor agrees to provide the
                  following utility services which are located in Tertiary Space
                  to the Primary and Secondary Spaces, respectively, for the
                  sole benefit of Sublessee, such services to be provided seven
                  (7) days per week, twenty-four (24) hours per day, with the
                  exception of steam which shall only be provided between the
                  hours of 6:00 AM and 4:30 PM Monday-Friday.

                  i.       Commencing on the Sublease Commencement Date the
                           Sublessor shall provide:
                           (aa)     water (hot and cold);
                           (bb)     tempered water for the safety showers and
                                    eye washers;
                           (cc)     compressed air;
                           (dd)     steam;
                           (ee)     purified water (RODI);
                           (ff)     electricity;
                           (gg)     natural gas;
                           (hh)     heating ventilation and cooling (HVAC);
                           (ii)     PH adjustment for the waste system;
                           (jj)     emergency power; and
                           (kk)     plumbing systems.
                  (Subparagraphs (aa) through (kk) shall be collectively
                  referred to as the "Utility Services").

                  ii.   Sublessor's obligation to provide Utility Services for
                        the benefit of Sublessee shall terminate on December 31,
                        2006 (the "Utility Services Termination Date").

                  iii.  Sublessor's obligations to provide Utility Services
                        shall only apply to those Utility Services that are
                        generated from the utility/maintenance room located in
                        the Tertiary Space.

                  iv.   Utilities Services will be charged by Sublessor and paid
                        by Sublessee at the rates set forth in Exhibit B (the
                        "Utility Rates"), which are based on the percentage of
                        office space and laboratory space located in the
                        Subleased Premises as of the date of this Sublease. The
                        Utility Rates are subject to change based on Sublessee's
                        change in use or percentage of office and laboratory
                        space of the Subleased Premises and/or an increase

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                        in actual rates charged to Sublessor by the utility
                        providers. In the event that any of the utility
                        providers increase the rates payable by Sublessor,
                        Sublessor shall deliver to Sublessee copies of written
                        notices, bills or invoices received by Sublessor from
                        the utility providers documenting the increased rates
                        before increasing any such Utility Rates. The increases
                        in Utility Rates shall exclude however, costs that are
                        directly attributable to those portions of the Leased
                        Premises leased by Sublessor. Any adjustments to the
                        Utility Rates shall not be effective until twenty (20)
                        days after Sublessor provides written notice to
                        Sublessee of such increased Utility Rate.
                        Notwithstanding the foregoing, in no event shall the
                        Utility Rates or monthly payment amounts set forth in
                        Exhibit B increase prior to January 1, 2003.

                  v.    Payment's for Utility Services shall be due and payable
                        as Annual Fixed Rent on the first day of each month
                        without notice, in the amounts set forth in Exhibit B
                        commencing on the Sublease Commencement Date and ending
                        on the Utility Services Termination Date, provided,
                        however, that Sublessee shall remain responsible for the
                        cost of any Utility Services provided to Sublessee
                        during such term, notwithstanding, whether an invoice
                        was submitted by Sublessor or the utility providers
                        prior to the Utility Services Termination Date. Failure
                        to pay such charges when due shall constitute a monetary
                        Event of Default under Paragraph 14 of this Sublease.

                  vi.   Sublessor, to the best of its knowledge, represents that
                        all of the Utility Services are connected to the
                        Subleased Premises and the Utility Systems that provide
                        the Utility Services to the Subleased Premises,
                        including all generation and distribution systems
                        located in any of the Subleased Premises (collectively
                        referred to herein as the "Utility Systems"), are in
                        good condition and repair.

                  vii.  Except as expressly provided in subparagraphs 9(b)(ii)
                        and 9(b)(iii) below, Sublessor agrees to perform all
                        ordinary maintenance, repair, and replacement of the
                        Utility Systems located within the utility/maintenance
                        room in the Tertiary Space at its sole cost and expense
                        until the Utility Services Termination Date. In
                        addition, Sublessor shall be responsible for any and all
                        damage to the Utility Services and Utility Systems
                        caused by Sublessor, its employees, contractors,
                        licensees, and invitees. Notwithstanding the above,
                        Sublessor shall not be responsible for undertaking
                        and/or completing any improvements to the Utility
                        Systems or the Utility Services in order to upgrade
                        and/or expand the capacities of the Utility Systems or
                        the Utility Services for Sublessee's use, provided

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                        however, that Sublessee shall have the right to make
                        such improvements, at its expense, subject to the
                        provisions below.

                  viii. Sublessor agrees to use reasonable efforts to ensure
                        that the Utility Systems and Utility Services are
                        maintained and functioning properly prior to the earlier
                        of the Sublease Termination Date or the Sublessee's
                        occupancy of the Tertiary Space.

         b.       Sublessee's Obligations Concerning Utility Services.

                  i.    Sublessee agrees and acknowledges that commencing on the
                        Sublease Commencement Date until the Sublease
                        Termination Date, to pay for all Utility Services at the
                        rates and at the monthly payment amounts set forth in
                        Exhibit B on the first day of each month without notice
                        or demand;

                  ii.   Sublessee agrees and acknowledges that it has had the
                        opportunity to inspect the Utility Systems and Utility
                        Services and is accepting the Utility Systems and
                        Utility Services in their current condition (the
                        "Acceptance"), subject only to Sublessor obligation to
                        continue to maintain, repair and replace the Utility
                        Systems as set forth in subparagraph 9(a)(vii) of this
                        Sublease;

                  iii.  Sublessee agrees and acknowledges that in the event the
                        sublessee elects to exercise its right to sublease the
                        Tertiary Space commencing on January 1, 2007 or the
                        sooner occupancy of the Tertiary Space, Sublessee shall
                        be solely responsible for the maintenance, repair and
                        replacement of the Utility Services and Utility Systems.

                  iv.   Sublessee shall be solely responsible for any and all
                        damage to the Utility Services and Utility Systems
                        caused by Sublessee, its employees, contractors,
                        licensees, and invitees and for any Alterations (as
                        defined below). In the event the Sublessee exercises its
                        right to occupy the Tertiary Space, Sublessee shall be
                        solely responsible for any and all damage to the Utility
                        Services and Utility Systems commencing on January 1,
                        2007.

                  v.    Sublessee shall coordinate the construction, repair,
                        replacement or maintenance of the Utility Systems with
                        Sublessor;

                  vi.   Sublessee shall certify to Sublessor the square footage
                        of laboratory space and office space leased by
                        Sublessee, on a semi-annual basis;

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                  vii.  Sublessee shall be solely responsible for providing
                        telecommunication services to the Subleased Premises.

         c.       Utility Rates do not include the construction, repair,
                  replacement or maintenance of any Utility Systems and/or
                  Utility Services located within the Subleased Premises leased
                  by the Sublessee, which shall be the sole and exclusive
                  responsibility of Sublessee, except as otherwise provided in
                  subparagraph 9(a)(vii) of this Sublease.

         d.       Sublessor acknowledges and agrees that Sublessee may desire to
                  upgrade and/or expand the capacities of the Utility Services
                  and Utility Systems, provided, however that Sublessee shall
                  not make or perform, or permit the making or performance of,
                  any alterations, improvements, or additions in or about the
                  Subleased Premises, including upgrading and/or expanding the
                  capacities of the Utility Services and Utility Systems
                  (collectively, "Alterations") without obtaining on each
                  occasion Sublessor's prior written consent which consent shall
                  not be unreasonably withheld or delayed and the consent of the
                  Prime Lessor. Sublessor agrees not to unreasonably withhold
                  its consent to such Alterations, provided that such
                  Alterations are performed only by licensed and insured
                  contractors or mechanics first reasonably approved by
                  Sublessor and no Alterations shall adversely affect the
                  Utility Services and/or Utility Systems within the Leased
                  Premises. All Alterations shall be done at Sublessee's sole
                  cost and expense and at such times and in such manner as to
                  minimize, interference with the operations of Sublessor.
                  Sublessee shall provide not less than 24 hour prior written
                  notice to Sublessor of the commencement of any such
                  Alterations.

                  No approval of any plans or specifications by Sublessor or
                  consent by Sublessor allowing Sublessee to make any
                  Alterations or any inspection of Alterations made by or for
                  Sublessor shall in any way be deemed to be an agreement by
                  Sublessor that the contemplated Alterations comply with any
                  legal requirements or insurance requirements or the
                  certificate of occupancy for the Subleased Premises, nor shall
                  it be deemed to be a waiver by Sublessor of the compliance by
                  Sublessee of any provision of this Sublease.

                  Sublessee shall promptly reimburse Sublessor for all
                  reasonable fees, costs and expenses including, but not limited
                  to, those of architects and engineers, incurred by Sublessor
                  in connection with the review of Sublessee's plans and
                  specifications and inspecting the Alterations to determine
                  whether the same are being or have been performed in
                  accordance with the approved plans and specifications therefor
                  and with all legal and insurance requirements in an aggregate
                  amount not to exceed Five Thousand Dollars ($5,000.00) on each
                  occasion.

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10. ANTIGENICS LEASEHOLD LEASE. In consideration of Sublessor's current
leasehold improvements made to the Subleased Premises and for Sublessor's right,
title and interest in the Yield Up Equipment located within the Subleased
Premises, Sublessee hereby agrees to pay, without notice or demand except as set
forth therein , the Antigenics Leasehold Lease Payments in accordance with the
terms and conditions of the Antigenics Leasehold Lease, attached hereto and made
a part hereof as Exhibit C.

11. GRANT OF OPTION FOR THE TERTIARY SPACE. Sublessor does hereby grant to
Sublessee the exclusive right and option to sublease the Tertiary Space upon the
terms and conditions as set forth below:

         a.       Sublessee may exercise its exclusive right to sublease the
                  Tertiary Space pursuant to the terms in this Sublease,
                  effective as of January 1, 2007, by giving written notice
                  thereof to Sublessor not later than July 1, 2006 in which
                  event Sublessor agrees to deliver the Tertiary Space to
                  Sublessee in the condition required under Section 8 of this
                  Sublease on or before January 1, 2007. The parties agree to
                  execute an amendment to this Sublease within thirty (30) days
                  after the date Sublessee exercises its option for the sole
                  purpose of:

                  i.       incorporating the Tertiary Space as being a part of
                           the Subleased Premises;

                  ii.      adjusting the Sublessee's Proportionate Share and the
                           Annual Rent, as set forth in Exhibit B attached
                           hereto and made a part hereof;

                  iii.     providing Sublessor with an amended or replacement
                           Letter of Credit in an amount equal to Three Hundred
                           Seventy Five Thousand and 00/100 Dollars
                           ($375,000.00).

         b.       At the time of leasing the Tertiary Space, the Sublessee shall
                  have any and all rights of Sublessor under the Prime Lease
                  with respect to the exterior signage.

         c.   Sublessor hereby agrees that the rights granted herein for the
              Subleased Premises shall be exclusive and agrees that, from and
              after the Sublease Commencement Date until the Sublease
              Termination Date, Sublessor shall not offer to or enter into a
              lease, sublease, rental, or occupancy agreement affecting any
              portion of the Subleased Premises, nor permit any tenant or
              licensee to use or occupy any portion of the Subleased Premises,
              without receipt of written consent of Sublessee, which consent
              shall not be unreasonably withheld or delayed.

12. ASSIGNMENT AND SUBLETTING. Sublessee shall not assign this Sublease, nor
sublet the whole or any part of the Subleased Premises, or suffer or permit any
other person to occupy the same without first obtaining, on each occasion, the
prior written consent of Sublessor and Prime

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Lessor, which consent shall not be unreasonably withheld but shall be
conditioned upon the same terms set forth in Section 9.13 of the Prime Lease.
Notwithstanding the foregoing, Sublessee may assign or sub-sublease this
Sublease to Related Occupants, as defined in Section 9.13 of the Prime Lease,
any affiliated entity or purchaser so long as the affiliated entity or purchaser
has a net worth equal to or greater than Sublessee as of the date of this
Sublease or on the date of such assignment, whichever is greater. Sublessee
agrees to pay all Sublessor's reasonable attorneys' fees in connection with such
assignment and/or subletting and the cost of preparation of any documents
required by the Sublessor and/or Prime Lessor in connection therewith with the
Sublessor's legal fees and document preparation not to exceed Five Thousand
Dollars ($5,000.00) on each occasion.. In all events, Sublessee will continue to
remain responsible to Sublessor for the payment of the Annual Rent and the
performance of all obligations contained herein. At Sublessor's sole election,
Sublessor may require Sublessee to cause any permitted sub-Sublessee to pay the
Annual Rent directly to Sublessor.

13. DAMAGE, DESTRUCTION OR TAKING. Sublessor and Sublessee agree that in the
event the Subleased Premises is destroyed, damaged by fire or other casualty, or
taken by eminent domain, payment of the Annual Rent, the right to terminate this
Sublease and the right to pursue awards shall be governed by the provisions of
Section 10 of the Prime Lease.

14.      DEFAULT AND REMEDIES. An Event of Default shall occur if:

         a.       if a Default, as defined in Section 11 of the Prime Lease,
                  shall occur with respect to the Sublessee.

         b.       Sublessee fails to pay when due any installment of Annual
                  Rent, without notice or demand, provided, however that
                  Sublessor agrees to permit Sublessee to cure such monetary
                  default by paying the late fee set forth herein,, within five
                  (5) days after receipt of written notice to Sublessee of such
                  non-payment of Annual Rent ("Grace Period"), provided further
                  that such Grace Period shall only be permitted to occur twice
                  in any twelve month period.

         c.       Sublessee shall fail to perform or observe any non-monetary
                  covenant, condition or agreement to be performed or observed
                  by it under this Sublease and such failure continues uncured
                  for more than twenty (20) days after written notice thereof to
                  Sublessee by Sublessor (unless such default is of a nature
                  that it cannot be cured within such twenty (20) day period, in
                  which event no default shall occur so long as Sublessee shall
                  diligently commence the curing of the default within the
                  twenty (20) day cure period and promptly prosecutes the curing
                  of the same), provided further that such event of default
                  shall not be deemed an Event of Default under the Prime Lease,
                  in which event the notice periods set forth in the Prime Lease
                  shall control.

                                                                              12
<PAGE>
         d.       Sublessee attempts to remove, sell, transfer, encumber, part
                  with possession or sublet the Equipment, as defined under the
                  Antigenics Leasehold Lease, without the prior written approval
                  of Sublessor.

         e.       Sublessee, as Lessee, defaults under the Antigenics Leasehold
                  Lease.

          Upon the occurrence of an Event of Default and the expiration of any
applicable notice and cure period, Sublessor shall have all the rights and
remedies provided by applicable law, this Sublease, the Prime Lease and/or the
Antigenics Leasehold Lease. In addition, Sublessor, at its sole election, may:

         a.       declare all unpaid Annual Fixed Rent and other sums due and to
                  become due hereunder under this Sublease immediately due and
                  payable; and/or

         b.       proceed by appropriate court action or actions or other
                  proceedings either at law or in equity to enforce performance
                  by Lessee of any and all covenants of this Sublease and to
                  recover damages for the breach thereof; and/or

         c.       draw on the Letter of Credit; and/or

         d.       perform the same for the account of Sublessee without thereby
                  waiving such Event of Default, and any reasonable amount paid
                  or expense (including reasonable attorneys' fees), penalty or
                  other liability incurred by Sublessor in such performance,
                  together with interest at the rate of one and one-half
                  (1-1/2%) percent per month thereon until paid by Sublessee to
                  Sublessor, shall be payable by the Sublessee upon demand as
                  Additional Rent").

Should any proceedings be instituted by or against Sublessor hereunder and/or
for possession of any or all of the Sublease Premises and/or the Equipment or
for any other relief, Sublessee shall pay a Sublessor's reasonable attorney's
fees and court costs.

No remedy of Sublessor hereunder shall be exclusive of any remedy herein or by
law provided, but each shall be cumulative and in addition to every other
remedy.

In addition to any and all remedies set forth herein, Sublessor shall have all
remedies available to the Prime Lessor under the Prime Lease and at law or in
equity, and any and all remedies shall be cumulative and non-exclusive.

15. SUBLESSEE'S OBLIGATIONS UNDER PRIME LEASE. For so long as the Prime Lease
remains in full force and effect, Sublessee agrees to perform, fulfill and
observe all of the covenants, agreements, obligations, conditions,
representations, warranties, terms and provisions imposed upon Sublessor as
tenant under the Prime Lease and which are applicable to the Subleased Premises
except for the covenants and agreements of Sublessor set forth therein with
respect to any remaining portions of the Leased Premises not being Subleased to
the Sublessee hereunder, including, Sublessor's obligations with respect to the
payment of the Annual Rent. Sublessee

                                                                              13
<PAGE>
agrees to indemnify and hold Sublessor harmless from and against all claims,
liabilities, losses and damages of any kind whatsoever which Sublessor may incur
by reason of Sublessee's failure to perform, fulfill or observe any of the
covenants or agreements set forth herein or the applicable provisions set forth
in the Prime Lease. Sublessor agrees to indemnify and hold Sublessee harmless
from and against all claims, liabilities, losses and damages of any kind
whatsoever incurred by Sublessee as a result of any default by Sublessor under
the Prime Lease.

16. ENFORCEMENT AND DELIVERY OF PREMISES AT SUBLEASE TERMINATION DATE. Sublessee
agrees that it will pay all Sublessor's expenses, including reasonable
attorneys' fees incurred in enforcing any obligation of the Sublessee or
remedies of the Sublessor under this Sublease, or in recovering possession of
the Subleased Premises. Sublessee agrees that the Subleased Premises will, at
the expiration or earlier termination of this Sublease, be returned in good
condition, ordinary wear and tear and damage by fire or other casualty only
excepted. In the event of the Sublessee's failure to remove any of the
Sublessee's property from the Subleased Premises, specifically excluding the
Yield Up Equipment, the Sublessor is hereby authorized, after written notice to
Sublessee without liability to the Sublessee for any loss or damage thereto, and
at the sole risk of the Sublessee, to remove and store any of the property at
the Sublessee's sole cost and expense; or to retain same under the Sublessor's
exclusive use and control; or to sell at public or private sale, without notice
to the Sublessee all of the property not so removed and to apply the net
proceeds of such sale to the payment of any sum due hereunder, or to destroy
such property.

17. NOTICES. All notices or other communications hereunder shall be in writing
and delivered to the addresses set forth below by registered or certified mail,
return receipt requested, postage prepaid, or sent by an overnight express
courier service which provides evidence of delivery or attempted delivery. If
intended for Sublessor addressed to it at 34 Commerce Way, Woburn, Massachusetts
01801, Attention: Mr. Neal Gordon. If intended for Sublessee, addressed to it at
175 Crossing Boulevard, Suite 410, Framingham, Massachusetts 01702, Attention:
Mr. Jack Green, with a courtesy copy to Palmer & Dodge LLP, 111 Huntington
Avenue, Boston, Massachusetts 02199; Attention: Thomas G. Schnorr, Esq. Notices
shall be deemed given when mailed and otherwise on the earlier to occur of the
date of delivery or the date delivery was first attempted, as shown by postal
records. The parties hereto may, from time to time, by notice given hereunder,
designate in writing any different address to which subsequent notices,
certificates or other communications shall be sent.

18. BROKERAGE COMMISSION. Sublessor shall be solely responsible for the payment
of a Eighty Thousand and 00/100 Dollar ($80,000.00) brokerage commission to CB
Richard Ellis. Sublessor represents and warrants that it has not dealt with any
broker any other than Insignia/ESG in connection with this Sublease and will
indemnify and hold harmless Sublessee from and against any loss or expense
suffered by Sublessee as a result of such dealings with any other broker. If
Sublessee exercises its option for the Tertiary Space, and an amendment is fully
executed by both parties and consented to by the Prime Lessor, Sublessor shall
pay CB Richard

                                                                              14
<PAGE>
Ellis an additional brokerage fee of $21,132.00. Sublessee represents and
warrants that it has not dealt with any broker other than CB Richard Ellis in
connection with this Sublease and will indemnify and hold harmless each of
Sublessor and Prime Lessor from and against any loss and expenses suffered by
either of them as a result of such dealings with any broker. Sublessor
represents and warrants that it has not dealt with any broker other than
Insignia/ESG in connection with this Sublease and will indemnify and hold
harmless the Sublessee from and against any loss and expenses suffered by
Sublessee as a result of such dealings with any broker, including any additional
brokerage commissions which may be due CB Richard Ellis in connection with this
Sublease.

19.      SUBLESSEE'S REPRESENTATIONS AND WARRANTIES.

         a.       Sublessee acknowledges it has read and examined the Prime
                  Lease, and is fully familiar with the terms, covenants and
                  conditions on the Sublessor's part as tenant, to be performed
                  thereunder, and all of the applicable terms, covenants and
                  conditions of the Prime Lease are included herein.

         b.       Sublessee does hereby assume and agree to be bound by and
                  perform all the aforesaid terms, covenants and conditions on
                  the Sublessor's part (as tenant under the Prime Lease) to be
                  performed under the Prime Lease with respect to the Subleased
                  Premises, except as otherwise herein specified, and Sublessee
                  agrees to indemnify, defend (by counsel reasonably acceptable
                  to Sublessor) and hold Sublessor harmless against any claim or
                  liability asserted against Sublessor by reason of Sublessee's
                  failure to perform such obligations. Sublessee agrees that
                  this Sublease is separate from and subordinate in all respects
                  to the Prime Lease (and amendments thereto) and to any
                  agreement to which the Prime Lease is subject. In the event
                  Sublessee shall default in the full performance of any of the
                  terms, covenants and conditions on its part to be performed
                  under this Sublease, then Sublessor shall have the same rights
                  and remedies with respect to such default as are given to
                  Prime Lessor with respect to defaults by Sublessor as tenant
                  under the Prime Lease, all with the same force and effect as
                  though the provisions of the Prime Lease with respect to
                  defaults, and the rights and remedies of Prime Lessor in the
                  event thereof, were set forth at length herein. Sublessee
                  further agrees that Sublessor shall have no liability of any
                  nature whatsoever to Sublessee as a consequence of Prime
                  Lessor's default under the Prime Lease, including, but not
                  limited to, Prime Lessor's breach of a covenant of quiet
                  enjoyment. Any conflicts between the terms, covenants and
                  conditions of this Sublease and the Prime Lease shall be
                  resolved in favor of the Prime Lease.

                                                                              15
<PAGE>
         c.       In any case, where Prime Lessor reserves the right to enter
                  the Subleased Premises, said right shall enure to Prime Lessor
                  as well as to Sublessor. Furthermore, Sublessor reserves the
                  right upon 24 hours prior notice to Sublessee to enter the
                  Subleased Premises for the purpose of accessing, repairing and
                  maintaining the Subleased Premises. Sublessee may elect to
                  have a representative present at the time of such entry. No
                  such prior notice shall be required in the event of an
                  emergency.

         d.       Sublessee agrees to perform and comply with the terms,
                  provisions, covenants and conditions of the Prime Lease and
                  not to do, or suffer or permit anything to be done, which
                  would result in a default under, or cause the Prime Lease to
                  be terminated or forfeited.

         e.       In the event that any mechanic's lien or other lien is filed
                  against the Sublease Premises, or any part thereof, for any
                  reason whatsoever by reason of Sublessee's acts or failure to
                  act, then Sublessee shall cause same to be discharged in the
                  time periods set forth in Section 9.4 of the Prime Lease.

         f.       Sublessee will fully and faithfully perform the terms and
                  conditions of the Prime Lease on its part to be performed, and
                  in addition thereto, Sublessee will not do, or cause to be
                  done or suffer or permit any act or thing to be done, which
                  would, or might, cause the Prime Lease or the rights of
                  Sublessor as tenant under the Prime Lease to be endangered,
                  cancelled, terminated, forfeited, or surrendered, or which
                  would or might make Sublessor liable for any damages, claim or
                  penalty.

20.      SUBLESSOR'S REPRESENTATIONS AND WARRANTIES.
Sublessor represents and warrants to Sublessee that:

         a.       the Prime Lease is in full force and effect and has not been
                  modified or amended (except as expressly set forth in the
                  recitals to this Sublease); and there are no other documents,
                  instruments, agreements or the like creating obligations on
                  Sublessor's part under the Prime Lease;

         b.       Sublessor has delivered to Sublessee redacted copies of:

                  i. the Prime Lease and the other documents expressly set forth
                  in the recitals to this Sublease, and

                  ii. all riders, modifications, schedules, exhibits and addenda
                  relating thereto;

         c.       Sublessor is the current tenant under the Prime Lease;

         d.       neither the Prime Lessor nor Sublessor is in default under the
                  Prime Lease; nor has any event occurred which, with the giving
                  of notice, the passage of time, or

                                                                              16
<PAGE>
                  both, would constitute a default under the Prime Lease; nor
                  has Sublessor received any notice from Prime Lessor that any
                  outstanding charges for Annual Fixed Rent, Additional Rent
                  and/or other charges under the Prime Lease are past due;

         e.       Prime Lessor has consented to this Sublease and this Sublease
                  shall not constitute a default under the Prime Lease; and

         f.       In the event that pursuant to the terms in the Prime Lease,
                  the Sublessor under the fire and condemnation provisions, if
                  any, contained in the Prime Lease has the right to terminate
                  the Prime Lease, Sublessor agrees that it will not exercise
                  such right of termination without first obtaining Sublessee's
                  consent to said termination.

         g.       Sublessor does hereby assume and agree to be bound by and
                  perform all the aforesaid terms, covenants and conditions on
                  the Sublessor's part to be performed under this Sublease with
                  respect to the Subleased Premises, and Sublessee agrees to
                  indemnify, defend (by counsel reasonably acceptable to
                  Sublessee) and hold Sublessee harmless against any claim or
                  liability asserted against Sublessee by reason of Sublessor's
                  failure to perform such obligations.

         h.       Sublessor agrees to perform and comply with the terms,
                  provisions, covenants and conditions of the Prime Lease and
                  not to do, or suffer or permit anything to be done, which
                  would result in a default under, or cause the Prime Lease to
                  be terminated or forfeited.

21. ARBITRATION. All disputes arising out of or in connection with this Sublease
Agreement and/or the Antigenics Leasehold Lease shall be finally settled under
the Commercial Arbitration Rules of the American Arbitration Association then in
effect by an arbitrator appointed in accordance with such rules. The
arbitrator's award shall be final and binding. Judgment upon the award rendered
may be entered in any court having jurisdiction over the party against which the
award is rendered. The parties expressly consent to the jurisdiction of the
federal and state courts situated in The Commonwealth of Massachusetts for the
purpose of enforcing any arbitration award rendered pursuant to this Section.
The arbitration shall take place in Framingham, Massachusetts or such other
place as the parties may agree. The arbitration shall include (a) a provision
that the prevailing party in such arbitration shall recover its costs of the
arbitration and reasonable attorneys' fees from the other party, and (b) the
amount of such costs and fees.

22. PRIME LANDLORD CONSENT. This Sublease shall be contingent upon the
Sublessor's receipt of the Prime Landlord's written consent to this Sublease, in
the form attached hereto as Exhibit D.

                                                                              17
<PAGE>
23. COVENANT OF QUIET ENJOYMENT. Sublessor hereby warrants and covenants that
upon payment of the Annual Rent and any additional rent due hereunder, and upon
the performance of all the terms and covenants of this Sublease, Sublessee shall
have peaceful and quiet use and possession of the Subleased Premises without
hindrance or interruption on the part of Sublessor.

24.      MISCELLANEOUS.

         a.       This Sublease and the Antigenics Leasehold Lease contain the
                  entire and exclusive agreement between the parties and
                  supersedes all prior arrangements, understandings and
                  agreements, whether oral or written. This Sublease may not be
                  amended or modified except by a written instrument executed by
                  Sublessor and Sublessee and approved in each instance by Prime
                  Lessor.

         b.       One or more waivers of any covenant or condition by Sublessor
                  shall not be construed as a waiver of a subsequent breach of
                  the same or any other covenant or condition, and the consent
                  or approval by Sublessor to or of any act by Sublessee
                  requiring Sublessor's consent or approval shall not be
                  construed to waive or render unnecessary Sublessor's consent
                  or approval to or of any subsequent similar act by Sublessee.

         c.       This Sublease shall be governed by and interpreted in
                  accordance with the laws of The Commonwealth of Massachusetts.
                  In the event any provision of this Sublease shall be
                  determined invalid or unenforceable under applicable law, or
                  shall be determined to be a violation of the Prime Lease, this
                  Sublease shall be construed as if such provision had never
                  been made a part hereof, but shall otherwise continue in full
                  force and effect.

         d.       The headings used herein are used only for convenience of
                  reference and are not to be considered part of this Sublease
                  or to be used in determining the intent of the parties hereto.

         e.       This Sublease shall be binding upon and inure to all
                  successors and permitted assigns, including all permitted
                  sub-subleases, of the parties hereto.

         f.       Sublessor shall in no event be construed, held or become in
                  any way or for any purpose a partner, associate or joint
                  venturer of Sublessee or any party associated with Sublessee
                  in the conduct of its business or otherwise.

         g.       Sublessee knowingly agrees to and hereby waives any and all
                  rights to trial by jury in any matter arising out of this
                  Sublease or otherwise with the Sublessor.

                                                                              18
<PAGE>
         h.       The specific remedies to which Sublessor may resort under the
                  terms of this Sublease are cumulative and are not intended to
                  be exclusive of any other remedies or means of redress to
                  which it may be lawfully entitled in case of any breach or
                  threatened breach by Sublessee of any provisions of this
                  Sublease. In addition to the other remedies provided in this
                  Sublease, Sublessor shall be entitled to the restraint by
                  injunction of the violation or attempted or threatened
                  violation of any of the covenants, conditions or provisions of
                  this Sublease or to a decree compelling specific performance
                  of any such covenants, conditions or provisions.

IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as an
instrument under seal by their duly authorized officers on the day and the year
first above written

PRIME LESSOR                                SUBLESSOR

                                        Antigenics Inc., a Massachusetts
                                        corporation and a wholly owned
                                        subsidiary of Antigenics Inc., a
                                        Delaware corporation.

                                        By:    /s/ Neal Gordon
                                        ---------------------------------
---------------------------------       Name:      Neal Gordon
All Terms and Provisions Approved       Title:  Senior Vice President

                                        SUBLESSEE

                                        GTC Biotherapeutics, Inc.

                                        By:    /s/ John B. Green
                                        ---------------------------------
                                        Name:      John B. Green
                                        Title:  Senior Vice President

                                        By:
                                        ---------------------------------
                                        Name:
                                        Title:

                                                                              19
<PAGE>
                                    EXHIBIT A

                               (SUBLEASE PREMISES)

                                   SKETCH PLAN

              Utility Equipment Area - Tertiary Space - First Floor

[FIRST FLOOR PLAN]

                                                                              20
<PAGE>
              Secondary/Tertiary Space Segregation on Second Floor

                         Hatched Area is Secondary Space

                           Open Area is Tertiary Space

[SECOND FLOOR PLAN]

                                                                              21
<PAGE>
                           Primary Space - Third Floor

[THIRD FLOOR PLAN]

                                                                              22
<PAGE>
                                    EXHIBIT B
                     (ANNUAL FIXED RENT AND ADDITIONAL RENT)

                                                                              23
<PAGE>
ANTIGENICS, INC.
SUBLEASE AGREEMENT - EXHIBIT B
UPDATED:  JULY 8, 2002

<TABLE>
<CAPTION>
                                      SQ. FT. TOTAL                       SQ. FT. - UTILITIES ALLOC.
                                         ------                             OFFICE            LAB
                                                                            ------          ------
<S>                                 <C>                                    <C>              <C>
Phase 1 - Square Feet                      11,852                            8,891           2,961
Phase 2 - Square Feet                       8,036                            5,125           2,911
Phase 3 - Square Feet                      21,132                            3,297          17,835
                                           ------                           ------          ------
TOTAL SQUARE FEET                          41,020                           17,313          23,707
                                           ------                           ------          ------

Base rent per sq ft @ 7/1/02        $       21.38
Base rent per sq ft @ 9/1/02        $       22.88
Base rent per sq ft @ 9/1/06        $       24.38

Monthly 2002 CAM Escalation(1)      $    6,347.58
Monthly 2002 RE Tax Escalation(1)   $    4,834.68
</TABLE>

<TABLE>
<CAPTION>
                                   JUL-AUG      SEP-OCT     NOV-DEC     JAN-DEC     JAN-DEC     JAN-DEC
MONTHLY SUB-LEASE PAYMENTS           2002        2002        2002        2003         2004        2005
                                 ----------   ----------  ----------  ----------  ----------  ----------
<S>                              <C>          <C>         <C>         <C>         <C>         <C>
Base Rent                        $21,116.31   $22,597.81  $22,597.81  $37,919.79  $37,919.79  $37,919.79
CAM Escalation(1)                 1,834.02      1,834.02   1,834.02     3,077.54   3,077.54    3,077.54
RE Tax Escalation(1)              1,396.89      1,396.89   1,396.89     2,344.03   2,344.03    2,344.03
Leasehold Improvements Allocation        -             -   9,231.61    17,533.00  17,533.00   17,533.00
Utilities Allocation(2,3)         4,531.62      4,531.62   4,531.62     8,925.12   9,639.13   10,410.26
                                 ----------   ----------  ----------  ----------  ----------  ----------
TOTAL MONTHLY PAYMENTS           $28,878.85   $30,360.35  $39,591.96  $69,799.47  $70,513.48  $71,284.61
                                 ----------   ----------  ----------  ----------  ----------  ----------
</TABLE>

<TABLE>
<CAPTION>
                                    JAN-AUG     SEP-DEC     JAN-DEC     JAN-DEC     JAN-DEC     JAN-SEP
MONTHLY SUB-LEASE PAYMENTS           2006        2006        2007        2008         2009        2010
                                  ----------  ----------  ----------- ----------- ----------- -----------
<S>                               <C>         <C>         <C>         <C>         <C>         <C>
Base Rent                         $37,919.79  $40,405.79  $83,338.97  $83,338.97  $83,338.97  $83,338.97
CAM Escalation(1)                   3,077.54    3,077.54    6,347.58    6,347.58    6,347.58    6,347.58
RE Tax Escalation(1)                2,344.03    2,344.03    4,834.68    4,834.68    4,834.68    4,834.68
Leasehold Improvements Allocation  17,533.00   17,533.00   39,155.05   39,155.05   39,155.05   39,155.05
Utilities Allocation(2,3)          11,243.08   11,243.08   all costs   all costs   all costs   all costs
                                  ----------  ----------  ----------- ----------- ----------- -----------
TOTAL MONTHLY PAYMENTS            $72,117.43  $74,603.43  $133,676.28 $133,676.28 $133,676.28 $133,676.28
                                  ----------  ----------  ----------- ----------- ----------- -----------
</TABLE>

-------------------
(1)   Annual escalation of CAM & RE Tax to be passed through to sub-lessee at
      appropriate % as invoiced by NDNE

(2)   Utilities allocation charge calculated at $0.20/square foot for office and
      $0.93/square foot for laboratory

      An inflationary factor of 8% is used for calculating annual increases and
      subject to adjustment based on actual rate increases of the Utility
      providers.

(3)   100% of incurred costs for utilities to be borne by sub-lessee.

                                                                              24
<PAGE>
                                    EXHIBIT C
                            ANTIGENIC LEASEHOLD LEASE

                                                                              25
<PAGE>
                           ANTIGENICS LEASEHOLD LEASE

         THIS ANTIGENICS LEASEHOLD LEASE (this "Leasehold Lease") dated as of
this 19th day of July, 2002 entered into between GTC Biotherapeutics, Inc. a
Massachusetts corporation, formerly known as Genzyme Transgenics Corporation,
with an address of 175 Crossing Boulevard, Suite 410, Framingham, Massachusetts
("Lessee") and Antigenics Inc., a Massachusetts Corporation ("Lessor"), and a
wholly-owned subsidiary of Antigenics Inc., a Delaware corporation, formerly
known as Aquila Biopharmaceuticals, Inc., with an address of 34 Commerce Way,
Woburn, Massachusetts 01801.

                                    RECITALS

         WHEREAS, Aquila Biopharmaceuticals, Inc., a Delaware corporation and
wholly owned subsidiary of Sublessor, is the tenant under a lease with NDNE 9/90
Corporate Center LLC (the "Prime Lessor") dated September 19, 1997 as amended by
that certain First Amendment to Lease ("First Amendment") dated December 17,
1997, as further amended by that certain Second Amendment to Lease ("Second
Amendment") dated as of January 14, 1998, as further amended by that certain
Third Amendment to Lease ("Third Amendment") dated as of February 3, 1998, as
further amended by that certain Fourth Amendment to Lease ("Fourth Amendment")
dated as of February 27, 1998, as further Amended by that certain Fifth
Amendment to Lease ("Fifth Amendment") dated as of March 13, 1998 and as
affected by that certain Consent to Assignment of Lease ("Consent") dated April,
2001 (the Lease as so amended and affected by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment and
the Consent is hereinafter called the "Prime Lease") which relates to space in
the Building (as said term is defined in the Prime Lease) comprised of
approximately 41,020 rentable square feet located on the 1st, 2nd and 3rd floors
of the building (the "Leased Premises");

         WHEREAS, Lessor and Lessee entered into a Sublease Agreement (the
"Sublease") for a portion of the Leased Premises dated July 16, 2002 (the
"Subleased Premises");

         WHEREAS, pursuant to the terms of the Sublease, the Lessor, as
Sublessor, and the Lessee, as Sublessee, agreed to enter into this Leasehold
Lease Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lessor and Lessee covenant and
agree as follows:

         All terms not otherwise defined herein shall have the same meaning as
set forth in the Prime Lease and the Sublease.

         Lessor hereby leases to Lessee, and Lessee hereby hires and takes from
Lessor, the leasehold improvements, fixtures and personal property described in
Exhibit A, attached hereto and made a part hereof (hereinafter, with all
replacement parts, additions, repairs and accessories incorporated therein
and/or affixed thereto, collectively referred to as "Equipment"), subject to the
following terms and conditions:

                                                                               1
<PAGE>
1. TERM AND RENTALS: This Leasehold Lease is for the term beginning on the
Sublease Commencement Date and terminating on December 31, 2006 unless all of
the following conditions are satisfied:

         (a) Lessee exercises its right under the Tertiary Space Option;

         (b) Lessor and Lessee enter into an amendment to the Sublease adding
         the Tertiary Space and extending the term of the Sublease until
         September 30, 2010, as provided for under the Sublease; and

         (c) Prime Lessor fails to exercise its Take Back Option with respect to
         the Leased Premises pursuant to Section 9.13 of the Prime Lease, in
         which event this Leasehold Lease shall terminate on September 30, 2010.

         During the term, Lessee agrees to pay to Lessor the monthly rental
amounts set forth in Exhibit B of the Sublease as the Leasehold Improvements
Allocation (the "Leasehold Rent") on or before the first day of each month. All
Leasehold Rent due under this Leasehold Lease shall be paid to Lessor or its
assigns without notice or demand and without abatement, offset, defense or
counterclaim, with the exception of any rights Lessee may have under subsection
3(d) of this Leasehold Lease, at Lessor's principal office address set forth
above, or such other place as Lessor or its assignee may designate in writing to
Lessee.

         If Lessee fails to pay Leasehold Rent or other payments due under this
Leasehold Lease on or before the same becomes due and upon the expiration of any
applicable notice and grade periods, Lessor may, at its election without notice
or demand:

         (a) accept the Leasehold Rent payment in arrears and Lessee shall pay,
         as liquidated damages, a late charge equal to one and one-half (1 1/2)
         percent per month (computed on the basis of a thirty (30) day month) on
         each defaulted Leasehold Rent payment from the due date thereof; or

         (b) declare all unpaid Leasehold Rent and other sums due hereunder
         immediately due and payable, as further set forth in Section 7 of this
         Leasehold Lease.

In addition, Lessor, as Sublessor, shall have all of the rights under the
Sublease, including the right to draw down on the Letter of Credit.

         Lessee's obligation to pay the Leasehold Rent and other payments due
under this Leasehold Lease shall be absolute and unconditional and shall not be
affected by reason of:

         (a) any defect in, lack of fitness for a particular purpose, use of,
         damage to, loss of possession or use of or destruction of, all or any
         of the Equipment;

         (b) the prohibition or other restriction against Lessee's use of said
         Equipment; or

                                                                               2
<PAGE>
         (c) for any other cause, being the agreement of the parties that this
         Leasehold Lease and any other amount payable by Lessee hereunder shall
         continue to be payable in all events in the manner and at the times
         provided herein.

Notwithstanding the above, Lessee shall be entitled to off-set Leasehold Rent
payments due under this Leasehold Lease but not the Sublease, pursuant to the
provisions of subsection 3(d)(iii)) of this Leasehold Lease.

         2. DESTRUCTION OF EQUIPMENT: The Lessor agrees to maintain insurance on
the Equipment located in the Subleased Premises (the location of the Equipment
is set forth in Exhibit B) until the Sublease Commencement Date for the Primary
Space, Secondary Space and the Tertiary Space, respectively. Lessee agrees to
maintain insurance on the Equipment located in the Subleased Premises during the
Sublessee's lease of the Primary, Secondary and Tertiary Space. In the event of
any loss or damage to the Equipment the respective party shall, to the extent
permitted under the Prime Lease, use the proceeds of any insurance to repair or
replace the Equipment. Lessor shall have no further obligations with respect to
the Equipment after the Lessee's leasing of the Tertiary Space.

         3. INSPECTION; WARRANTIES BY LESSOR; MAINTENANCE, COMPLIANCE WITH LAWS
AND INSURANCE:

         (a)      Except as provided in subsection 3(d) of this Leasehold Lease,
                  Lessee agrees that it has had the opportunity to inspect all
                  of the Equipment prior to the date of this Leasehold Lease and
                  that Lessee is taking the Equipment "as-is" in its current
                  condition and location as set forth in Exhibit B (the
                  "Acceptance").

         (b)      Except as provided in subsection 3(d) of this Leasehold Lease,
                  Lessor, not being the manufacturer of the Equipment, nor
                  manufacturer's agent, makes no warranty or representation,
                  either express or implied, as to the fitness, quality, design,
                  capacity, suitability, merchantability or performance of the
                  Equipment or of the material or workmanship thereof, it being
                  agreed that the Equipment is leased "as is" and that all such
                  risks, as between Lessor and Lessee, are to be borne by the
                  Lessee at its sole risk and expense. Lessee further agrees,
                  regardless of cause, not to assert any claim whatsoever
                  against the Lessor for loss of anticipatory profits or
                  consequential damages.

         (c)      No oral agreement, guaranty, promise, condition,
                  representation or warranty shall be binding; all prior
                  conversations, agreements or representations related hereto
                  and/or to the equipment are integrated herein, and no
                  modification hereof shall be binding unless in writing signed
                  by parties.

         (d)      Lessor shall have the following maintenance obligations with
                  regard to the Equipment.

                  (i)      Lessor agrees to maintain the Equipment located
                           within the Leased Premises leased by Lessor in at
                           least the same condition as of the date of this
                           Leasehold Lease (with the exception of normal wear
                           and tear), under

                                                                               3
<PAGE>
                           the same maintenance procedures currently utilized by
                           Lessor, until the Sublease Commencement Date for the
                           Primary Space, Secondary Space and Tertiary Space,
                           respectively, at which time Lessee shall be solely
                           obligated to maintain the Equipment located within
                           the applicable portion of the Subleased Premises as
                           set forth below. As stated above, Lessee's obligation
                           to maintain, install, repair, erect, test, adjust or
                           service the Equipment shall not commence until such
                           time as the Sublease Commencement Date for the
                           Primary Space, with respect to Equipment located in
                           the Primary Space, the Sublease Commencement Date for
                           the Secondary Space with respect to Equipment located
                           in the Secondary Space and in the event the Lessee
                           elects to exercise its option to sublease the
                           Tertiary Space, January 1, 2007 with respect to
                           Equipment located in the Tertiary Space.

                  (ii)     Lessor shall provide reasonable evidence of such
                           maintenance to Lessee upon written request by sending
                           Lessee copies of its maintenance records and Lessee
                           shall have the right to inspect the Equipment and
                           audit such maintenance records at reasonable times
                           upon 24 hour prior written notice to Lessor.

                  (iii)    If Lessor fails to maintain the Equipment in the
                           required condition during its occupancy thereof,
                           Lessee may, after prior written notice to Lessor and
                           only after Lessor fails to maintain such Equipment
                           within ten (10) days after receipt of such written
                           notice, arrange to have the Equipment maintained or
                           repaired by a licensed professional and off-set an
                           amount equal to the actual cost of such
                           maintenance/repair from its next Leasehold Rent
                           payment under this Leasehold Lease, provided however,
                           that any rights of off-set shall not apply to a
                           Lessee, as Sublessee, payment of Annual Fixed
                           Leasehold Rent under the Sublease. Lessee shall
                           provide Lessor with copies of all such invoices for
                           such maintenance as a condition precedent to any
                           rights of set-off. Provided further that, Lessee
                           shall not be entitled to off-set Leasehold Rent, if
                           it is determined that such maintenance obligation
                           resulted from any acts of Lessee, its contractors,
                           employees or invitees.

                  (iv)     From and after Sublessee's occupancy of the Primary
                           Space, Secondary Space, and Tertiary Space, Lessor
                           shall have no further obligations to maintain,
                           install, repair, erect, test, adjust or service the
                           Equipment located within such occupied space.

         (e)      Lessee shall have the following Maintenance Obligations with
                  regard to the Equipment:

                  (i)      From and after the Sublease Commencement Date for the
                           Primary Space, Secondary Space and Tertiary Space,
                           respectively, Lessee shall be

                                                                               4
<PAGE>
                           obligated to maintain the Equipment located in the
                           applicable portion of the Subleased Premises as set
                           forth in Schedule C in at least the same condition as
                           of the date Sublessee leases such portion of the
                           Subleased Premises (with the exception of normal wear
                           and tear), under the same maintenance procedures
                           currently utilized by Lessor.

                  (ii)     If Lessee has not maintained the Equipment in the
                           required condition, Lessor may, after prior written
                           notice to Lessee and only after Lessee fails to
                           maintain such Equipment within ten (10) days after
                           receipt of such written notice, arrange to have the
                           Equipment maintained or repaired by a licensed
                           professional and charge the actual cost of such
                           maintenance/ repair as Additional Rent due with the
                           next monthly Leasehold Rent payment. Lessor shall
                           provide Lessee with copies of all such invoices for
                           such maintenance as a condition precedent to charging
                           any Additional Rent.

         (f)      Lessee and Lessor each agree, at their own cost and expense,
                  to comply with all of the following requirements with respect
                  to the Equipment while such party leases the Leased Premises
                  in which such Equipment is located:

                  (i)      to pay all charges and expenses in connection with
                           the operation of each item of Equipment;

                  (ii)     to comply with all governmental laws, ordinances,
                           regulations, requirements and rules with respect to
                           the use, maintenance and operation of each item of
                           Equipment;

                  (iii)    to maintain at all times public liability, property
                           damage, fire with extended coverage, theft and
                           comprehensive insurance in an amount equal to the
                           book value of such Equipment, as set forth on the
                           depreciation schedule attached hereto as Exhibit C,
                           protecting the other party's interest as it may
                           appear, delivering to the other party evidence of
                           such insurance coverage upon the commencement of this
                           Leasehold Lease and annually thereafter, provided,
                           however that Lessor shall have no further obligations
                           to insure the Equipment after the earlier of the
                           Sublease Termination Date or the Sublessee's leasing
                           of the Tertiary Space; and

                  (iv)     all insurance policies shall provide that no
                           cancellation thereof shall be effective without
                           thirty (30) days prior written notice to the other
                           party.

         4. LESSOR'S TITLE, RIGHT OF INSPECTION AND IDENTIFICATION OF EQUIPMENT:
Title to the Equipment shall at all times remain in the Lessor and Lessee will
at all times protect and defend, at its own cost and expense, the title of
Lessor from and against all claims, liens and legal processes of creditors of
Lessee and keep all the Equipment free and clear from all such claims, liens and
processes. Lessor shall have the right from time to time during reasonable
business hours, with reasonable advance notice, to enter upon the Subleased
Premises

                                                                               5
<PAGE>
for the purpose of confirming the existence, condition and proper maintenance of
the Equipment. Lessor shall be accompanied by a representative of Lessee during
any such inspection. The foregoing rights of entry are subject to any applicable
governmental laws, regulations and rules concerning industrial security. Prime
Lessor has consented to this Leasehold Lease and this Leasehold Lease shall not
constitute a default under the Prime Lease. Lessor hereby represents that it
either has or does not require authority to lease the Equipment and that this
Leasehold Lease does not constitute a breach of any agreement with respect to
the Equipment.

         5. POSSESSION, PLACE OF USE AND CHANGES IN LOCATION OF EQUIPMENT: So
long as Lessee shall not be in default under this Leasehold Lease or the
Sublease the Lessee shall be entitled to the possession and use of the Equipment
in accordance with the terms of this Leasehold Lease and the Sublease. The
Equipment shall be used in the conduct of the lawful business of Lessee and
shall be kept at the address of Lessee set forth above. Lessee shall not,
without Lessor's prior written consent, remove the Equipment from such location,
part with possession or control of the Equipment or attempt or purport to sell,
pledge, mortgage or otherwise encumber any of the Equipment or otherwise dispose
of or encumber any interest under this Leasehold Lease.

         6. PERFORMANCE OF OBLIGATIONS OF LESSEE BY LESSOR: In the Event of
Default (as defined below), the Lessor may, at its option, perform the same for
the account of Lessee without thereby waiving such Event of Default, and any
reasonable amount paid or expense (including reasonable attorneys' fees),
penalty or other liability incurred by Lessor in such performance, together with
interest at the rate of one and one-half (1 -1/2%) percent per month thereon
until paid by Lessee to Lessor, shall be payable by the Lessee upon demand as
additional rent ("Additional Rent") for the Equipment.

         7. EVENT OF DEFAULT: An "Event of Default" by Lessee shall occur if:

         (a)      Lessee fails to pay when due any installment of Leasehold Rent
                  and/or Additional Rent, without notice or demand, provided,
                  however that Lessor agrees to permit Lessee to cure such
                  monetary default by paying the late fee set forth in Section
                  1(a) of this Leasehold Lease, within five (5) days after
                  receipt of written notice to Lessee of such non-payment of
                  Leasehold Rent ("Grace Period"), provided further that such
                  Grace Period shall only be permitted to occur twice in any
                  twelve month period and shall not apply to any payments due
                  under the Sublease with the exception of payments made under
                  this Leasehold Lease;

         (b)      Lessee shall fail to perform or observe any non-monetary
                  covenant, condition or agreement to be performed or observed
                  by it under this Leasehold Lease and such failure continues
                  uncured for twenty (20) days after written notice thereof to
                  Lessee by Lessor (unless such default is of a nature that it
                  cannot be cured within such twenty (20) day period, in which
                  event no default shall occur so long as Lessee shall
                  diligently commence the curing of the default within the
                  twenty (20) day cure period and promptly prosecutes the curing
                  of the same);

                                                                               6
<PAGE>
         (c)      Lessee ceases doing business, makes an assignment for the
                  benefit of creditors, admits in writing its inability to pay
                  its debts as they become due, files a voluntary petition in
                  bankruptcy, is adjudicated a bankrupt or an insolvent, files a
                  petition seeking for itself any reorganization, arrangement,
                  composition, readjustment, liquidation, dissolution or similar
                  arrangement under any present or future statute, law or
                  regulation or files an answer admitting the material
                  allegations of a petition filed against it in any such
                  proceeding, consents to or acquiesces in the appointment of a
                  trustee, receiver, or liquidator of it or of all or any
                  substantial part of its assets or properties, or if it or its
                  shareholders shall take any action looking to its dissolution
                  or liquidation;

         (d)      within ninety (90) days after the commencement of any
                  proceedings against Lessee seeking reorganization,
                  arrangement, readjustment, liquidation dissolution or similar
                  relief under any present or future statute, law or regulation,
                  such proceedings shall not have been dismissed, or if within
                  ninety (90) days after the appointment without Lessee's
                  consent or acquiescence of any trustee, receiver or liquidator
                  of it or of all or any substantial part of its assets and
                  properties, such appointment shall not be vacated;

         (e)      Lessee attempts to remove, sell, transfer, encumber, part with
                  possession or sublet the Equipment or any item thereof,
                  without the prior written approval of Lessor; or

         (f)      Lessee, as Sublessee shall be in default under the Sublease.

         Upon the occurrence of an Event of Default and the expiration of any
applicable notice and cure period, Lessor shall have all the rights and remedies
provided by applicable law, this Leasehold Lease and/or the Sublease. In
addition, Lessor, at its sole election, may:

         (a)      declare all unpaid Leasehold Rent and other sums due and to
                  become due under this Leasehold Lease immediately due and
                  payable; and/or

         (b)      proceed by appropriate court action or actions or other
                  proceedings either at law or in equity to enforce performance
                  by Lessee of any and all covenants of this Leasehold Lease and
                  to recover damages for the breach thereof.

         Lessor shall also be entitled to recover immediately as liquidated
damages for loss of the bargain and not as penalty any unpaid Leasehold Rent
that accrued on or before the occurrence of the Event of Default for the
unexpired term of this Leasehold Lease. No remedy of Lessor hereunder shall be
exclusive of any remedy herein or by law provided, but each shall be cumulative
and in addition to every other remedy.

         8. INDEMNITY: Lessee agrees that Lessor shall not be liable to Lessee
for, and Lessee shall indemnify and save Lessor harmless from and against any
and all liability, loss, damage, expense, causes of action, suits, claims or
judgments arising from or caused directly or indirectly by an Event of Default
by Lessee under this Leasehold Lease; or injury to person or

                                                                               7
<PAGE>
property resulting from or based upon the actual use, operation, delivery or
transportation of any or all of the Equipment or its location or condition,
after the Sublease Commencement Date unless caused by the negligence of Lessor
or its agents, employees, contractors or representatives; and shall, at its own
cost and expense, defend any and all suits which may be brought against Lessor,
either alone or in conjunction with others upon any such liability or claim or
claims and shall satisfy, pay and discharge any and all judgments and fines that
may be recovered against Lessor in any such action or actions, provided,
however, that Lessor shall give Lessee written notice of any such claim or
demand.

         9. ASSIGNMENT, NOTICES, REMEDIES AND WAIVERS: Lessee shall not be
permitted to assign this Leasehold Lease without the prior written consent of
Lessor, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, as long as there is no Event of Default by the
Lessee under the provisions of this Leasehold Lease and/or the Sublease, this
Leasehold Lease and any rights pursuant hereto may be assigned by Lessee as
provided under Section 9.13 of the Prime Lease. Notwithstanding, the Lessee may
assign its rights hereunder to any Related Occupants, as defined in Section 9.13
of the Prime Lease, any affiliated entity or purchaser so long as the affiliated
entity or purchaser has a net worth equal to or greater than Lessee as of the
date of this Leasehold Lease or on the date of such assignment, whichever is
greater. It shall be a condition of the validity of any assignment that the
assignee agrees directly with Lessor, to be bound by all of the terms and
obligations of Lessee hereunder. No assignment shall relieve Lessee from its
obligations hereunder and Lessee shall remain fully and primarily liable
therefor.

         10. NOTICES: All notices relating hereto shall be delivered in person
to an officer of the Lessor or Lessee or shall be mailed registered to Lessor or
Lessee at its respective address below shown or at any later address last known
to the sender. If intended for Lessor, addressed to Antigenics Inc., 34 Commerce
Way, Woburn, Massachusetts 01801, Attention: Mr. Neal Gordon. If intended for
Lessee, addressed to GTC Biotherapeutics, Inc., 175 Crossing Boulevard, Suite
410, Framingham, Massachusetts 01702, Attention: Mr. Jack Green, with a courtesy
copy to Palmer & Dodge LLP, 111 Huntington Avenue, Boston, Massachusetts 02199,
Attention: Thomas G. Schnorr, Esq. No remedy of Lessor hereunder shall be
exclusive of any other remedy herein or by law provided, but each shall be
cumulative and in addition to every other remedy. A waiver of a default shall
not be a waiver of any other or a subsequent default.

         11. FURTHER ASSURANCES: Lessee shall execute and deliver to Lessor,
upon Lessor's request, such instruments and assurances as Lessor deems necessary
or advisable for the confirmation or perfection of this Leasehold Lease and
Lessor's rights hereunder, including the filing or recording of this agreement
at Lessor's option and at Lessor's sole cost and expense.

         12. LEASE IRREVOCABILITY: This Leasehold Lease is irrevocable for the
full term hereof and for the aggregate rentals hereinabove reserved and the
Leasehold Rent shall not abate by reason of termination of Lessee's right of
possession, except in the event of default by the Lessor under the Prime Lease
or in the event Prime Lessor exercises its Take Back Option with respect to the
Leased Premises pursuant to Section 9.13 of the Prime Lease

                                                                               8
<PAGE>
         13. PURCHASE OPTION: Lessee shall purchase the Equipment upon the
expiration of this Leasehold Lease, provided all Leasehold Rent and Additional
Rent is paid in full, for consideration in the amount of One Dollar ($1.00).

         14. LESSOR AND LESSEE REPRESENTATION: The parties hereto hereby
represent and warrant as follows:

         (a)      Lessee hereby represents and warrants as follows:

                  (i)      is a corporation duly organized, validly existing and
                           in good standing under the laws of the jurisdiction
                           of its incorporation, has all requisite corporate
                           power and authority to own its property and conduct
                           its business as is now conducted, is duly qualified
                           and in good standing as a Massachusetts corporation
                           and is duly authorized to do business in each
                           jurisdiction where the nature of its properties or
                           business requires such qualification; and

                  (ii)     the execution, delivery and performance of this
                           Leasehold Lease and the related documents referenced
                           to herein: (aa) is within its corporate power and
                           authority; (bb) has been authorized by all necessary
                           corporate proceedings; (cc) does not and will not
                           require the consent of the stockholders of Lessee or
                           approvals of any governmental authority; (dd) will
                           not contravene any provision of the charter documents
                           or by-laws of Lessee or any law, rule or regulation
                           applicable to Lessee; (ee) will not constitute a
                           default under any other agreement, order or
                           undertaking binding on Lessee; and (ff) will not
                           require the consent or approval of any obligee or
                           holder of any instrument relating to any indebtedness
                           of Lessee.

         (b)      Lessor hereby represents and warrants as follows:

                  (i)      is a corporation duly organized, validly existing and
                           in good standing under the laws of the jurisdiction
                           of its incorporation, has all requisite corporate
                           power and authority to own its property and conduct
                           its business as is now conducted, is duly qualified
                           and in good standing as a Massachusetts corporation
                           and is duly authorized to do business in each
                           jurisdiction where the nature of its properties or
                           business requires such qualification; and

                           (ii)     the execution, delivery and performance of
                                    this Leasehold Lease and the related
                                    documents referenced to herein: (aa) is
                                    within its corporate power and authority;
                                    (bb) has been authorized by all necessary
                                    corporate proceedings; (cc) does not and
                                    will not require the consent of the
                                    stockholders of Lessor or approvals of any
                                    governmental authority; (dd) will not
                                    contravene any provision of the charter
                                    documents or by-laws of Lessee or any law,
                                    rule or regulation applicable to Lessee; and
                                    (ee) will not constitute a

                                                                               9
<PAGE>
                                    default under any other agreement, order or
                                    undertaking binding on Lessor.

                           (iii)    Prime Lessor has consented to this Leasehold
                                    Lease and this Leasehold Lease shall not
                                    constitute a default under the Prime Lease;

         15. CONSENT: This Leasehold Lease is contingent upon the prior written
approval of Silicon Valley Bank and shall not be effective until and unless
Silicon Valley Bank has given its approval hereto, if such approval is required.

         16. ARBITRATION: All disputes arising out of or in connection with this
Lease Agreement shall be finally settled under the Commercial Arbitration Rules
of the American Arbitration Association then in effect by an arbitrator
appointed in accordance with such rules. The arbitrator's award shall be final
and binding. Judgment upon the award rendered may be entered in any court having
jurisdiction over the party against which the award is rendered. The parties
expressly consent to the jurisdiction of the federal and state courts situated
in The Commonwealth of Massachusetts for the purpose of enforcing any
arbitration award rendered pursuant to this Section. The arbitration shall take
place in Framingham, Massachusetts or such other place as the parties may agree.
The arbitration shall include (a) a provision that the prevailing party in such
arbitration shall recover its costs of the arbitration and reasonable attorneys'
fees from the other party, and (b) the amount of such costs and fees.

         17. MISCELLANEOUS PROVISIONS: No oral agreement, guaranty, promise,
condition, representation or warranty shall be binding; all prior conversations,
agreements or representations related hereto and/or to the equipment are
integrated herein, and no modification hereof shall be binding unless in writing
signed by Lessor and Lessee. If any provision of the Leasehold Lease is held to
be invalid or unenforceable by a court of competent jurisdiction, all of the
other provisions hereof shall remain in full force and effect and shall be
liberally construed in favor of the Lessor in order to effect the provisions of
the Leasehold Lease.

         This Leasehold Lease shall be governed, construed and enforced under
the laws of the Commonwealth of Massachusetts. Lessee also agrees that any and
all legal actions hereunder or related to the Leasehold Lease shall be pursued
in the courts located in the Commonwealth of Massachusetts and agrees to submit
to the jurisdiction of the courts of the Commonwealth of Massachusetts for such
purposes.

         No delays or omissions by the Lessor in exercising or enforcing any of
the Lessor's rights and remedies shall constitute a waiver of or otherwise
impair any such right or remedy, nor shall it be construed to be a waiver of any
such Event of Default or an acquiescence therein. A waiver on one occasion shall
not operate as a bar to or waiver of any such right or remedy on any future
occasion, nor shall it be deemed a continuing waiver.

         The Schedules attached hereto are made a part of this Leasehold Lease
for all purposes.

                                                                              10
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.

                                        LESSEE
                                        GTC BIOTHERAPEUTICS, INC.

                                        By:  /s/ John B. Green
-------------------------                    -----------------------------------
Witness                                      Name:  John B. Green
                                             Title:  Senior Vice President

                                        By:
-------------------------                    -----------------------------------
Witness                                      Name:
                                             Title:

                                                                              11
<PAGE>
                                        LESSOR

                                        ANTIGENICS INC., a Massachusetts
                                        Corporation and a wholly owned
                                        subsidiary of Antigenics Inc., a
                                        Delaware Corporation

                                        By:    /s/ Neal Gordon
-------------------------                    -----------------------------------
Witness                                      Name:  Neal Gordon
                                             Title:  Senior Vice President

  /s/ Karla Brown                       By:
-------------------------                    -----------------------------------
Witness                                      Name:
                                             Title:

                                                                              12
<PAGE>
                                    Exhibit A

                            LEASEHOLD LEASE AGREEMENT
                         (EQUIPMENT AND FIXED EQUIPMENT)

<TABLE>
<S>                                 <C>              <C>                                         <C>
Project Administration              $8,445           Plumbing Fixture and Equipment              $46,392

Principal                           $15,840          Plumbing Fixtures                           $5,000

Project Manager                     $135,140         Casework Plumbing Fixtures                  $6,800

Assit Project Manager               $41,551          Casework Fixtures-Eyewash                   $1,020

Superintendent                      $173,345         Heating Boiler & Accessories                $112,155

Clerical Support                    $8,158           Condensers                                  $100,000

Reimbursables                       $14,725          Air Handling Units                          $130,570

Travel-Job Site                     $6,040           Ducts                                       $317,699

Drawings & Prints                   $5,785           Ductwork Demolition                         $7,750

Pre-Construction Estimating         $12,915          Fans                                        $20,000

Liability Insurance                 $26,600          HVAC Instrument and Control                 $533

Bonds                               $96,275          Testing, Adjusting & Balancing              $12,556

Permits                             $31,010          Electrical Contract                         $104,517

Small Tools and Equipment           $9,148           Standby Generator Conduit/Wiring            $14,010

Temp Facilities & Control           $3,987           Control Wiring                              $14,757

Fire Protection Details             $15,310          Power Wiring, Equipment                     $47,849

Execution                           $5,465           Electrical Service                          $125,495

Cleaning                            $8,820           Power Wiring, UPS Power                     $16,242

Tunneling, Boring, and
Jacking                             $11,340          Security Wiring                             $9,025

Concrete                            $760             Security System HW/SW                       $4,864

Concrete                            $57,017          Swipe/Strikes & Interlocks                  $31,994
</TABLE>

                                                                              13
<PAGE>
<TABLE>
<S>                                 <C>              <C>                                         <C>
Masonry Contractor                  $11,740          Additional Power Supplies                   $1,050

Structure Steel                     $1,992           Security System Sales Tax                   $1,410

Metal Fabrication                   $2,290           Emergency Generator                         $64,750

Rough Carpentry                     $6,000           Lighting                                    $146,898

Custom Casework                     $29,575          Communications                              $4,427

Roofing                             $21,038          Tel/Data Wiring/ Outlet                     $25,411

Solvent Storage Vault Roof          $7,003           Fiber & Copper Backbone                     $13,500

Solvent Storage Blowout
Panels                              $2,875           Tel/Data Faceplate/Jacks                    $1,700

Metal Doors and Frames              $144,664         Termination-Station Cable                   $1,300

Door Closures                       $1,500           Instruments                                 $30,952

Architecture Contract               $106,603         Instrumentation Freight                     $3,158

Misc. Patch/Caulk                   $2,366           PLC & Automation                            $6,334

Ceiling Suspension                  $62,890          Control Panel HW & SW                       $12,354

Plaster & Gypsum Board              $132,263         Dumpsters                                   $12,100

Flooring                            $135,672         Equipment                                   $297,371

Paints and Coatings                 $51,040          Centrifugal Pump                            $8,221

Specialties                         $20,257          Sales Tax                                   $23,887

Rigging                             $122,876         Process Piping Sales Tax                    $15,020

Pass-Thru                           $1,833           Equipment Freight                           $2,172

Manufacturing Metal
Casework                            $128,950         HVAC Sub Consultants                        $19,241

Epoxy Resin Tables                  $6,960           Plumbing Eng. Subconsultant                 $15,000

Fume Hoods                          $58,745          Structural Eng. Subconsultant               $7,147

Stainless Steel Tables              $1,650           Fire Protection Subconsultant               $10,413
</TABLE>

                                                                              14
<PAGE>
<TABLE>
<S>                                 <C>              <C>                                         <C>
Cold Rooms                          $37,185          MEP Subconsultant                           $5,898

Instruments                         $242             Engineering Sub Consultant                  $2,280

Building Automation Control         $158,232         Electrical Sub Consultant                   $20,000

Elevators                           $20,580          Architectural Sub Consultant                $52,553

Mechanical                          $203,814         Arch Sub Consultant                         $53

HVAC Contract                       $51,726          C/I Sub Consultant                          $3,040

Plumbing Supervisor                 $7,471           Process Sub Consultant                      $1,040

Plumbing Miscellaneous              $1,296           Telecom Subconsultant                       $10,868

Hangers and Supports                $12,674          Design and Engineering                      $63,435

Mechanical Identification           $1,962           CAD Design                                  $69,063

Mechanical Insulation               $37,558          HVAC Engineering                            $53,345

Duct Insulation                     $73,100          Mechanical Engineering                      $21,120

Pipes and Tubes                     $130,000         Instrument Engineering                      $94,935

Pumps                               $25,000          Lead Process Engineer                       $58,300

Domestic Water Piping               $33,300          Process Engineer                            $108,489

Sanitary Waste and Vent Pipe        $3,669           Construction Support                        $71,795

Fuel Piping                         $26,375          Start Up IQ/OQ Support                      $37,073

Process Piping                      $43,022          Turnover Books                              $5,940

Process Mechanical
Demolition                          $2,400           Fee                                         $178,240

Equipment Disconnects               $24,880          Warranty                                    $21,629

Stainless Steel Piping              $88,594          Warranty Labor                              $1,695

Stainless Steel Valves              $10,493          Reduction in final payment                  ($27,207)

Passivation                         $6,500

QA/QC                               $6,000                                                       $6,064,092
</TABLE>

                                                                              15
<PAGE>
<TABLE>
<S>                                 <C>
Process Piping Copper               $58,600

Process Piping Copper
-Valve                              $6,760

Process Piping Plastic              $128,597

Process Piping Plastic-
Valve                               $34,933

Chilled Water Piping                $54,287

Plant Steam Piping                  $138,547

Process Water and Waste
Pipe                                $106,351

Fire Protection Contract            $74,861
</TABLE>

                                                                              16
<PAGE>
                                    EXHIBIT B
                            LEASEHOLD LEASE AGREEMENT
                         BREAKDOWN OF EQUIPMENT BY ROOM
                             UPDATED: JULY 10, 2002

MANUFACTURING AREAS - SECOND FLOOR

<TABLE>
<CAPTION>
SPACE                              ROOM   EQUIPMENT                              TAG NUMBER           SERIAL NUMBER    VENDOR
-----                              ----   ---------                              ----------           -------------    ------

<S>                                <C>    <C>                                    <C>                  <C>             <C>
Tertiary                            200   2- Combo Walk In/Bench top
                                             Fume hoods                          Hood 200-01                          Labconco
Tertiary                            200   2- Combo Walk In/Bench top
                                             Fume hoods                          Hood 200-02                          Labconco
Tertiary                            200   Exhuast "Snorkels"                                                          Alsedent
Tertiary                            206   Walk In Hood                           No Tag                               Labconco
Tertiary                            206   Exhaust "Snorkel"                                                           Alsedent
Tertiary                            208   Lancer Glass Washer                    4042 Aquila                          Lancer
Tertiary                            215   Getinge Autoclave                      0237 Aquila                          Getinge
Tertiary                            215   Getinge Autoclave                      0155 Aquila                          Getinge
Tertiary                            215   1 Gruenberg Oven                       4136 Aquila                          Gruenberg
Tertiary                            211   1 BSC (Not ducted)                     1227 Cambridge                       Nuaire
Tertiary                            213   Walk In Fume Hood                      0277 Aquila                          Labconco
Tertiary                            213   Combo Walk In/bench top
                                          Fume Hood                              0276 Aquila                          Labconco
Tertiary                            214   Lancer Glass Washer                    4120 Aquila                          Lancer
Tertiary                            214   Dryer                                  4119 Aquila                          Forma Quick
Tertiary                            219   Fume Hood                                                   981141263F      Labconco
Tertiary                            221   1 BSC                                  0194 Cambridge
Tertiary                            221   1 Class 100 Soft Wall
                                            Clean Room                           4114 Aquila
Tertiary                            223   Cold Room
Tertiary                            224   1 BSC                                  000304                               The Baker
                                                                                 Antigenics                           Company

ANIMAL FACILITY - SECOND FLOOR
Secondary                           246   6' BSC (Ducted)                        1226 Cambridge       56-1530IV
Secondary                           246   4' BSC (Ducted)                        4223 Aquila                          Nuaire
Secondary                           246   1 Getinge Autoclave                    4220 Aquila                          Getinge
RESEARCH LABS - SECOND FLOOR
Tertiary                            250   1- 6' BSC (Not Ducted)                 4206 Aquila          14154 SR        Nuaire
Tertiary                            252   1- 6' BSC (Not Ducted)                 4214 Aquila          18940 UT        Nuaire
Tertiary                            254   1 Fume Hood                            No Tag               13937SP         Nuaire
Tertiary                            254   BSC (Not ducted)                       117 Cambridge                        Nuaire
Tertiary                            254   BSC Not ducted)                        175 Cambridge                        Nuaire
Tertiary                            257   Fume Hood                              No Tag                               Labconco
Tertiary
Tertiary                            257   Electric Boiler                        4186 Aquila          N4-11336-P89
Tertiary                            257   Autoclave (small)                      4280                 120176          Market Forge
2                                   260   Fume Hood                              No Tag                               Labconco
2                                   262   1- 4' BSC (Not ducted)                 4208 Aquila                          Nuaire
2                                   262   1- 6' BSC (Not Ducted)                 4209 Aquila                          Nuaire
2                                   264   Cold Room                                                                   Bally
Tertiary                            267   Cold Room                                                                   Masterbilt

FACILITY SYSTEMS - FIRST FLOOR
Tertiary                                  PH Neutralization System                                    P73938A-2       Nettco
Tertiary                                  PH Neutralization System                                    P73938A-1       Nettco
Tertiary                                  Solvent Delivery System                                     PRV602501
Tertiary                                  Purified Water System                                       Cal Tags
                                                                                                      683,684,685
Tertiary                                  Compressed Air                                              K7775U84F
Tertiary                                  Glycol Chiller                         3396 Cambridge       L87E02251
Tertiary                                  2 Hot Water Boilers                                         BT-6384         Cleaver Brooks
Tertiary                                  Hot Water Boiler                                            BT-6385         Cleaver Brooks
Tertiary                                  High Pressure Boilers                                       64638           Fulton
Tertiary                                  High Pressure Boilers                                       81992           Fulton
Tertiary                                  1 Low Pressure Boiler                                       64546           Fulton
Tertiary                                  1 Electric Chromulux Boiler                                 875-10882
Tertiary                                  1 Clean Steam Generator                                     910125A-1
Tertiary                                  1 Biokill System                                            LSL 112100
Tertiary                                  1 Stand by Generator                                        981120
Tertiary                                  1 Siemens Building Automation
                                          System                                 No Tag
Tertiary                                  1 Intellution Monitoring System for
                                          Biokill/Solvent                                             66685A1
                                                                                                      6685A2
</TABLE>

                                                                              17
<PAGE>
                                    EXHIBIT C
                            LEASEHOLD LEASE AGREEMENT
                            DEPRECIATION CALCULATIONS
                             UPDATED: JULY 10, 2002

<TABLE>
<CAPTION>
                                                            PRIMARY SPACE
                                                            -------------
                                             Total          Res & Admin
                                            Spending         3RD FLOOR
                                            --------         ---------
<S>                                        <C>              <C>
Gross Fixed Assets

  Equipment(1)                             $   705,484      $        --
  Leasehold Improvements                     5,358,608        1,303,237
                                           -----------      -----------
  Total Gross Fixed Assets                   6,064,092        1,303,237
                                           -----------      -----------

Accum. Depr / Amort @ 12/31/01
  Equipment                                   (302,350)              --
  Leasehold Improvements                    (1,370,825)        (343,150)
                                           -----------      -----------
  Total Accum Depr / Amort                  (1,673,175)        (343,150)
                                           -----------      -----------

Net Gross Fixed Assets                     $ 4,390,916      $   960,087
                                           ===========      ===========

NET EQUIPMENT & LEASEHOLD IMPROVEMENTS     $ 4,390,916      $   960,087
                                           -----------      -----------

LEASE MONTHS REMAINING @ 12/31/01                                   104

AMORTIZATION OF LHI PER MONTH                               $  9,231.61
                                                            ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                   SECONDARY SPACE
                                                             ----------------------------
                                              Total           Research      E-Prise Space
                                            Spending         2ND FLOOR        2ND FLOOR
                                            --------         ---------        ---------
<S>                                        <C>              <C>              <C>
Gross Fixed Assets

  Equipment(1)                             $   705,484      $        --      $        --
  Leasehold Improvements                     5,358,608          947,178          195,436
                                           -----------      -----------      -----------

  Total Gross Fixed Assets                   6,064,092          947,178          195,436

Accum. Depr / Amort @ 12/31/02
  Equipment                                   (403,133)              --               --
  Leasehold Improvements                    (1,818,334)        (321,405)         (57,481)
                                           -----------      -----------      -----------
  Total Accum Depr / Amort                  (2,221,467)        (321,405)         (57,481)
                                           -----------      -----------      -----------

Net Gross Fixed Assets                     $ 3,842,624      $   625,773      $   137,955
                                           ===========      ===========      ===========

NET EQUIPMENT & LEASEHOLD IMPROVEMENTS     $ 3,842,624      $   625,773      $   137,955
                                           -----------      -----------      -----------

LEASE MONTHS REMAINING @ 12/31/02                                                     92

AMORTIZATION OF LHI PER MONTH                                                $  8,301.39
                                                                             ===========
</TABLE>

                                                                              18
<PAGE>
<TABLE>
<CAPTION>
                                                                            TERTIARY SPACE
                                                                            --------------
                                              Total        Manufacturing    Manufacturing      Facilities
                                            Spending           QS-21            Fel-V          Mech Room
                                            --------           -----            -----          ---------
<S>                                        <C>              <C>             <C>                <C>
Gross Fixed Assets

  Equipment(1)                             $   705,484      $   172,595      $   167,506      $   365,382
  Leasehold Improvements                     5,358,608        1,239,669        1,203,114          469,974
                                           -----------      -----------      -----------      -----------
  Total Gross Fixed Assets                   6,064,092        1,412,265        1,370,620          835,356
Accum. Depr / Amort @ 12/31/06
  Equipment                                   (705,484)        (172,595)        (167,506)        (365,382)
  Leasehold Improvements                    (3,608,369)        (834,766)        (810,150)        (316,470)
                                           -----------      -----------      -----------      -----------
  Total Accum Depr / Amort                  (4,313,852)      (1,007,361)        (977,656)        (681,852)
                                           -----------      -----------      -----------      -----------

Net Gross Fixed Assets                     $ 1,750,239      $   404,903      $   392,963      $   153,504
                                           ===========      ===========      ===========      ===========

NET EQUIPMENT & LEASEHOLD IMPROVEMENTS     $ 1,750,239      $   404,903      $   392,963      $   153,504
                                           ===========      ===========      ===========      ===========

LEASE MONTHS REMAINING @ 12/31/06                                                                      44

AMORTIZATION OF LHI PER MONTH                                                                 $ 21,622.05
</TABLE>

                                                                              19
<PAGE>
                                    EXHIBIT D
                              PRIME LESSOR CONSENT
<PAGE>
                               CONSENT TO SUBLEASE

                                    PREAMBLE

         THIS CONSENT TO SUBLEASE ("Consent") dated as of July 18, 2002, is made
with reference to that certain Sublease dated July 16, 2002 (the "Sublease") by
and between Antigenics, Inc., a Massachusetts corporation having an address of
34 Commerce Way, Woburn, MA 01801,a wholly owned subsidiary of Antigenics, Inc.,
a Delaware corporation formerly known as Aquila Biopharmaceuticals, Inc.
("Sublandlord") and GTC Biotherapeutics, Inc., a Massachusetts corporation
having an address at 175 Crossing Boulevard, Suite 410, Framingham, MA 01702
("Subtenant"), and is entered into by and among NDNE 9/90 Corporate Center LLC,
a Massachusetts limited liability company, having an address c/o National
Development, 2310 Washington Street, Newton Lower Falls, MA 02462
("Overlandlord"), Sublandlord, and Subtenant, with respect to the following
facts:

         A.       Overlandlord and Sublandlord are the parties to that certain
                  Lease dated as of September 19, 1997, as amended by (i) that
                  certain First Amendment to Lease ("First Amendment") dated
                  December 17, 1997 (ii) that certain Second Amendment to Lease
                  ("Second Amendment") dated as of January 14, 1998 (iii) that
                  certain Third Amendment to Lease ("Third Amendment") dated
                  February 3, 1998 (iv) that certain Fourth Amendment to Lease
                  ("Fourth Amendment") dated February 27, 1998 and (v) that
                  certain Fifth Amendment to Lease ("Fifth Amendment") dated as
                  of March 13, 1998 and as affected by that certain Consent to
                  Assignment of Lease ("Consent") dated May 8, 2001 (said
                  Lease as amended and affected by the First Amendment, the
                  Second Amendment, the Third Amendment, the Fourth Amendment,
                  the Fifth Amendment and the Consent is hereafter the
                  "Overlease") pertaining to certain space comprised of
                  approximately 41,020 rentable square feet rentable square feet
                  located on the 1st, 2nd and 3rd floor(s) (the "Original
                  Premises") of a building owned by Overlandlord and known as
                  and numbered 175 Crossing Boulevard, Framingham, Massachusetts
                  (the "Building");

         B.       Sublandlord and Subtenant wish to enter into the Sublease;

         C.       The Overlease provides, inter alia, that Sublandlord may not
                  enter into any sublease without Overlandlord's prior written
                  approval; and

         D.       Sublandlord and Subtenant have presented the fully executed
                  Sublease (a true copy of which is attached hereto as Exhibit
                  A) to Overlandlord for Overlandlord's review and approval.

                                   Agreements

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

                                                                               1
<PAGE>
         1.       Overlandlord hereby consents to the execution and delivery of
                  the Sublease upon the terms and conditions set forth in the
                  General Conditions of Consent to Sublease ("General
                  Conditions") attached hereto and made an integral part hereof.

         2.       Sublandlord and Subtenant hereby acknowledge receipt of the
                  General Conditions and further acknowledge that Overlandlord's
                  consent is subject to such General Conditions, and that in the
                  event of a conflict between (a) this Consent and the General
                  Conditions and (b) the Sublease or any other agreement by and
                  between Sublandlord and Subtenant including, without
                  limitation, the Equipment Lease (as defined in the Sublease),
                  this Consent and the General Conditions shall control.

         3.       Notwithstanding anything contained in the Sublease to the
                  contrary, as a result of the subletting of the Subleased
                  Premises to Subtenant and the Additional Rent payable under
                  the Sublease as the result of the Antigenics Leasehold Lease,
                  Overlandlord is entitled to receive the amounts set forth in
                  Exhibit B to this Consent from Sublandlord pursuant to the
                  last sentence of Section 9.13(a) of the Overlease. Such amount
                  is considered Additional Rent under the Overlease and shall be
                  paid by Sublandlord to Overlandlord as Additional Rent under
                  the Overlease on or before the first (1st) day of each and
                  every calendar month. The Sublease Overage is subject to
                  increase and adjustment upon any increase in the rent payable
                  under the Sublease and/or the Antigenics Leasehold Lease from
                  time to time (whether due to increased rates or additions to
                  the Subleased Premises or equipment demised under the Sublease
                  and/or Antigenics Leasehold Lease from time to time).

         4.       In no event shall Sublandlord or Subtenant remove any of the
                  Yield Up Equipment described in Exhibit N of the Overlease
                  from the Original Premises or Property upon expiration or
                  earlier termination of the Sublease Term.

         5.       The parties hereto acknowledge and agree that, as and to the
                  extent that the Sublease initially constitutes a subletting of
                  only 19,888 square feet of the 41,020 square foot Original
                  Premises, this Consent does not constitute a consent to a
                  subletting of the entire Original Premises demised under the
                  Overlease and, accordingly, the Take Back Option set forth in
                  Section 9.13(c) of the Lease does not apply to the initial
                  subletting of only the Primary Space and the Secondary Space.
                  However, in the event Subtenant shall exercise its option to
                  sublease the "Tertiary Space" pursuant to the Tertiary Space
                  Option contained in paragraph 11 of the Sublease, the Take
                  Back Option set forth in Section 9.13(c) of the Lease shall be
                  applicable and, in such event, Landlord shall be entitled to
                  exercise any and all rights afforded Landlord under Section
                  9.13(c) of the Overlease.

                  Notwithstanding anything contained in the Sublease to the
                  contrary, upon the giving of the notice of exercise of
                  Subtenant's option to sublease the Tertiary Space described in
                  paragraph 11(a) of the Sublease by Subtenant, Subtenant shall
                  simultaneously provide Overlandlord with such written notice
                  in the form sent to

                                                                               2
<PAGE>
                  Sublandlord. The parties agree that the Take Back Option
                  granted to Overlandlord pursuant to Section 9.13(c) of the
                  Lease shall then apply and Overlandlord shall have the right
                  to exercise the Take Back Option as to the entire Premises
                  then demised under the Overlease (including the Primary Space,
                  the Secondary Space, the Tertiary Space and any other portion
                  of the Building then leased by Sublandlord pursuant to the
                  Overlease, as amended) within the thirty (30) day period
                  immediately following Overlandlord's receipt of the notice
                  from Subtenant exercising its right to Sublease the Tertiary
                  Space. In no event shall any exercise of the Tertiary Space
                  Option be effective unless and until Overlandlord is provided
                  with a copy of the Subtenant's exercise of the Tertiary Space
                  Option and Overlandlord shall fail or refuse to timely
                  exercise the Take Back Option with respect to the entire
                  Premises then demised under the Overlease within the thirty
                  (30) day period provided in this paragraph 5 of this
                  Agreements section of this Consent.

         6.       In no event shall Subtenant or Sublandlord modify, amend or
                  alter the terms and provisions of the Sublease and/or the
                  Antigenics Leasehold Lease without the written consent of
                  Overlandlord, which consent may be granted or denied by
                  Overlandlord in its sole but reasonable judgment.

                  Overlandlord shall not unreasonably withhold or delay its
                  consent to any such modification, alteration or amendment
                  unless the same would materially and adversely affect
                  Overlandlord's rights or the economic entitlements of the
                  Overlandlord under the Overlease or this Consent.

EXECUTED under seal as of the date first written above.

OVERLANDLORD:                               SUBLANDLORD:

NDNE 9/90 Corporate Center LLC                       Antigenics, Inc.

By:  NDNE 9/90 Corporate Center LLC
Its:  Manager

By:    [Signature illegible]                      By:   /s/ Neal Gordon
     -------------------------------------              ------------------------

Its:   Treasurer                                  Its:  Senior Vice President
     -------------------------------------              ------------------------
             hereunto duly authorized                   hereunto duly authorized

                                                                               3
<PAGE>
                                    SUBTENANT:
                            GTC Biotherapeutics, Inc.

                                      By:      /s/ John B. Green
                                               ---------------------------------

                                      Its:     Senior Vice President
                                               ---------------------------------
                                               hereunto duly authorized

                                                                               4
<PAGE>
                    GENERAL CONDITIONS OF CONSENT TO SUBLEASE

         The following General Conditions are an integral part of and are hereby
incorporated into the foregoing Consent to Sublease:

         1.       Neither the Overlease, the Sublease nor this Consent shall be
                  deemed, nor are such documents intended to grant to Subtenant,
                  any rights whatsoever against Overlandlord. Subtenant hereby
                  acknowledges and agrees that its sole remedy for any alleged
                  or actual breach of its rights in connection with the Sublease
                  shall be solely against Sublandlord. Subtenant acknowledges
                  and agrees that it is not a third party beneficiary under the
                  Overlease and is not entitled to assert any of Sublandlord's
                  rights thereunder against Overlandlord, whether in its own
                  right or on behalf of Sublandlord.

         2.       This Consent and the Sublease shall not (i) be deemed or
                  construed to mean that Overlandlord shall be bound by any of
                  the terms, covenants or conditions of the Sublease and
                  Overlandlord shall not be bound thereby or (ii) release
                  Sublandlord from any existing or future duty, obligation or
                  liability to Overlandlord pursuant to the Overlease (and
                  Sublandlord shall be and remain liable for the full payment,
                  performance and observance of all of the terms, covenants and
                  conditions contained in the Overlease to be paid, performed
                  and observed by the "Tenant" thereunder as if the Sublease and
                  this Consent had never been made), or (iii) change, modify or
                  amend the Overlease in any manner, except insofar as it
                  constitutes Overlandlord's mere consent to the execution and
                  delivery of the Sublease. Notwithstanding the generality of
                  the foregoing, this Consent expressly shall not absolve
                  Sublandlord from any requirement set forth in the Overlease
                  that Sublandlord (a) obtain Overlandlord's prior written
                  approval of any additional subleases, assignments or other
                  dispositions of its interest in the Overlease or the Premises
                  (as defined in the Overlease) or (b) pay any amounts due and
                  payable to Overlandlord pursuant to Section 9.13 of the
                  Overlease in connection with the subletting contemplated by
                  the Sublease and/or the letting under the Antigenics Leasehold
                  Lease as they may be amended (with Overlandlord's Consent as
                  provided herein) from time to time or (c) surrender and
                  deliver the Premises to Overlandlord in the condition and
                  manner required by the Lease upon expiration or earlier
                  termination of the Lease including, without limitation,
                  surrender and delivery of the Yield-up Equipment described in
                  Exhibit N of the Overlease.

         3.       (a) In the event of Overlease Termination (as hereinafter
                  defined) prior to the expiration or earlier termination of the
                  Sublease, and subject to the provisions of Section 3(b)
                  hereof, Overlandlord may, at its discretion, by written notice
                  to Subtenant (an "Assumption Notice") within ten (10) days
                  after Overlease Termination, but shall not be required to,
                  require Subtenant to assume and agree to perform Sublandlord's
                  obligations under the Overlease with respect to the entire
                  Original Premises as a direct tenancy between Overlandlord and
                  Subtenant

                                                                               5
<PAGE>
                  beginning as of and with respect to matters which accrue or
                  are to be performed from and after (x) the date (the
                  "Assumption Date") of such Assumption Notice with respect to
                  those portions of the Original Premises subleased to Subtenant
                  under the Sublease as of the date of Overlease Termination and
                  (y) the Effective Date (as hereafter defined) as to those
                  portions of the Original Premises then not leased to
                  Subtenant. It is agreed and understood that Subtenant shall
                  not be responsible for any breaches of the Overlease by
                  Sublandlord prior to the Assumption Date and the Effective
                  Date as to those respective portions of the Original Premises
                  provided, however, that Subtenant shall be responsible for any
                  breach or default under the Overlease which arises or occurs
                  prior to such dates where such breach or default is the result
                  of the acts or omissions of Subtenant. Such assumption by
                  Subtenant of each and every one of the obligations of
                  Sublandlord under the Overlease with respect to the entire
                  Original Premises shall entitle the Subtenant to occupy the
                  entire Original Premises leased pursuant to the Overlease, but
                  shall not relieve Sublandlord from any liability to
                  Overlandlord under the Overlease. In the event of such
                  assumption, Subtenant agrees to execute and deliver at any
                  time and from time to time, within ten (10) business days
                  after written request of Overlandlord, any instruments which
                  may reasonably be necessary or reasonably appropriate to
                  evidence such assumption; provided, however, that Subtenant's
                  failure or refusal to execute and deliver such instruments
                  within such ten (10) day period shall not be deemed or
                  construed to release Subtenant from its obligations under the
                  Overlease as a direct tenancy with Overlandlord as provided
                  herein. As used herein, the term "Effective Date" shall mean
                  that date upon which Sublandlord shall vacate and deliver up
                  the portions of the Original Premises which are not then
                  subleased to Subtenant as of the date of Overlease
                  Termination. In the event Overlandlord requires such
                  assumption, Overlandlord shall not (i) be liable to Subtenant
                  for any act, omission or breach of the Sublease by
                  Sublandlord, (ii) be subject to any offsets or defenses which
                  Subtenant might have against Sublandlord under the Sublease,
                  (iii) be bound by any rent or additional rent which Subtenant
                  might have paid in advance to Sublandlord, (iv) be bound to
                  honor any rights of Subtenant in any security deposit or
                  advance rent made with or paid to Sublandlord by Subtenant
                  except to the extent Sublandlord has specifically assigned and
                  turned over such security deposits and advance rent to
                  Overlandlord, or (v) be bound by any provision of the
                  Sublease.

                  Sublandlord hereby agrees that in the event of Overlease
                  Termination, at Overlandlord's request, Sublandlord shall
                  immediately pay or transfer to Overlandlord any security
                  deposits (or cause Overlandlord to be named as the beneficiary
                  under any Letter of Credit given as a Security Deposit under
                  the Sublease and simultaneously amend such Letter of Credit so
                  that it constitutes a security deposit under the Overlease
                  between Subtenant and Overlandlord in form satisfactory to
                  Overlandlord in its sole but reasonable judgment), rent or
                  other sums then held by Sublandlord in connection with the
                  subleasing of the Subleased Premises. Such security deposit or
                  Letter of Credit may be applied by

                                                                               6
<PAGE>
                  Overlandlord pursuant to the terms of the Overlease in the
                  event of any holding over by Subtenant beyond expiration of
                  the Sublease or upon the occurrence of a Monetary Default by
                  the Subtenant pursuant to Section 11.1(a) of the Overlease
                  after an Overlease Termination and exercise of Landlord's
                  rights pursuant to this Section 3(a) to cause Subtenant to
                  assume Sublandlord's rights and obligations under the
                  Overlease as a direct Lease between Overlandlord and Subtenant
                  as provided above. Subtenant hereby agrees that under no
                  circumstances whatsoever shall Overlandlord (x) be required to
                  release any Security Deposit or other form of Security given
                  to Overlandlord by Sublandlord and securing Sublandlord's
                  obligations to Overlandlord under the Overlease whether or not
                  such obligations accrue or arise under the Overlease before or
                  after Overlease Termination or (y) be held in any way
                  responsible or accountable for any security deposit or any
                  sums paid by Subtenant to Sublandlord unless and until and to
                  the extent that Overlandlord has actually received such sums
                  from Sublandlord and has acknowledged their source, and
                  Subtenant shall have no claim to any security or other deposit
                  made by Sublandlord under the Overlease.

                  (b) "Overlease Termination" means any event, which by
                  voluntary or involuntary act or by operation of law, causes
                  the Overlease to be terminated, expire, or be canceled
                  including, but not limited to: (i) a termination of the
                  Overlease as the result of a default by Sublandlord under the
                  Overlease or any of the terms and provisions thereof or hereof
                  which continues past receipt of applicable notice of such
                  default and the expiration of any applicable cure period, if
                  any; (ii) foreclosure proceedings brought by the holder of any
                  mortgage or trust deed to which the Overlease is subject and
                  from whom Sublandlord has not received a non-disturbance
                  agreement pursuant to Section 12.2 of the Overlease; (iii) the
                  termination of Sublandlord's leasehold estate by dispossession
                  proceeding or otherwise; and (iv) termination of the Overlease
                  in accordance with its terms.

         4.       In addition to Overlandlord's rights under Section 3 hereof,
                  in the event Sublandlord is in default under any of the terms
                  and provisions of the Overlease after receipt of applicable
                  notice(if any is required) and expiration of applicable cure
                  periods, if any, Overlandlord may elect to receive directly
                  from Subtenant all sums due or payable to Sublandlord by
                  Subtenant pursuant to the Sublease, and upon receipt of
                  Overlandlord's written notice to Sublandlord and Subtenant,
                  Sublandlord agrees that Subtenant shall thereafter pay to
                  Overlandlord any and all sums becoming due or payable under
                  the Sublease and Sublandlord shall receive from Overlandlord a
                  credit for such sums actually received by Overlandlord against
                  any and all payments then owing from Sublandlord under the
                  Overlease. Neither the service of such written notice nor the
                  receipt of such direct payments shall cause Overlandlord to
                  assume any of Sublandlord's duties, obligations and/or
                  liabilities under the Sublease, nor shall such event impose
                  upon Overlandlord the duty or obligation to honor the
                  Sublease, nor subsequently to accept any purported attornment
                  by Subtenant. Sublandlord grants Overlandlord a security
                  interest in all such future payments due to Sublandlord from
                  Subtenant, which security

                                                                               7
<PAGE>
                  interest Overlandlord may perfect by filing a UCC-1 (which
                  Sublandlord shall sign within three (3) days of Overlandlord's
                  request and Sublandlord hereby irrevocably appoints
                  Overlandlord as its attorney-in-fact, coupled with an
                  interest, to execute on behalf of Sublandlord and file such
                  instrument if Sublandlord fails to do so). Overlandlord shall
                  credit payments actually received pursuant to this conditional
                  assignment to Sublandlord's obligations under the Overlease.
                  Without limitation of the foregoing, acceptance of rent or
                  other payments from Sublandlord and/or Subtenant by
                  Overlandlord shall not: (i) constitute a waiver or cure of any
                  default or breach of the Overlease or (ii) cause nor result in
                  a reinstatement of the Overlease as between Overlandlord and
                  Sublandlord after Overlease Termination or (iii) be deemed or
                  construed to mean that Overlandlord has accepted the Subtenant
                  as its "Tenant" under the Overlease (unless Overlandlord
                  expressly so elects in writing pursuant to paragraph 3 of
                  these General Conditions) or (iv) be deemed to mean that
                  Subtenant is entitled to any rights under the Sublease or the
                  Overlease.

         5.       Subtenant hereby acknowledges that it has read and has
                  knowledge of all of the terms, provisions, rules and
                  regulations of the Overlease and agrees not to do or omit to
                  do anything which would cause Sublandlord to be in breach of
                  the Overlease. Any such act or omission also shall constitute
                  a breach of the Overlease and this Consent and shall entitle
                  Overlandlord to recover any damage, loss, cost, or expense
                  which it thereby suffers, from Sublandlord and/or Subtenant.

         6.       In the event of the commencement of an action at law or in
                  equity by the filing of a complaint or other similar action
                  involving a request for relief from a judicial body between or
                  involving the parties hereto with respect to the Sublease, the
                  Overlease, this Consent or the rights of the parties hereto,
                  hereunder or thereunder, the Sublandlord and Subtenant,
                  jointly and severally, hereby agree to pay the Overlandlord on
                  demand all reasonable costs, expense and attorneys' fees
                  incurred therein by Overlandlord, which amounts may be
                  included as a part of any judgment rendered in favor of
                  Overlandlord therein.

         7.       The parties acknowledge that the Sublease constitutes the
                  entire agreement between Sublandlord and Subtenant with
                  respect to the subject matter thereof, and that no amendment,
                  termination, modification or change therein will be binding
                  upon Overlandlord unless Overlandlord shall have given its
                  prior written consent thereto, which consent may be granted or
                  denied by Overlandlord in its sole and absolute discretion.

         8.       This Consent shall be binding upon and shall inure to the
                  benefit of the parties' respective successors in interest and
                  assigns, subject at all times, nevertheless, to all agreements
                  and restrictions contained in the Overlease, the Sublease, and
                  herein, with respect to subleasing, assignment or other
                  transfer and the foregoing shall not be deemed to limit or
                  negate Overlandlord's rights to prohibit or

                                                                               8
<PAGE>
                  condition its consent to a future dispossession of
                  Sublandlord's or Subtenant's interests. The agreements
                  contained herein constitute the entire understanding between
                  parties with respect to the subject matter hereof and
                  supersede all prior agreements.

         9.       This Consent shall not be assignable and shall only apply with
                  respect to the Sublease by and between Sublandlord and
                  Subtenant.

         10.      The consent by Overlandlord to the use and occupancy of the
                  Subleased Premises by Subtenant shall not be construed as a
                  consent by Overlandlord to the use and occupancy of the
                  Subleased Premises by anyone other than Subtenant or
                  Sublandlord or as a consent to further subletting by
                  Sublandlord or by Subtenant of the Subleased Premises, or any
                  part thereof except as expressly provided in the Sublease but
                  subject to the provisions of paragraph 5 of the "Agreements"
                  section of this Consent and the Take Back Option set forth in
                  Section 9.13(c) of the Overlease with respect to Subtenant's
                  right to Lease any portion of the Original Premises other than
                  the Primary Space and the Secondary Space (as each of those
                  terms are defined in the Sublease). Neither the Sublease nor
                  any of the rights, privileges or obligations thereunder shall
                  be assigned, modified, renewed or extended, nor shall the
                  Subleased Premises, or any part thereof, be further sublet or
                  occupied by others except by Sublandlord, in accordance with
                  and subject to the terms and provisions of the Overlease or by
                  Subtenant in accordance with the terms and provisions of the
                  Sublease but subject to the provisions of paragraph 5 of the
                  "Agreements" section of this Consent and the Take Back Option
                  set forth in Section 9.13(c) of the Overlease with respect to
                  Subtenant's right to Lease any portion of the Original
                  Premises other than the Primary Space and the Secondary Space
                  (as each of those terms are defined in the Sublease).

         11.      Subject to the provisions of General Condition numbered 3 of
                  this Consent to Sublease and the rights of Overlandlord
                  thereunder, on or before the day immediately preceding the
                  date of expiration of the Overlease or upon the date of any
                  earlier termination of the term of the Overlease, the Sublease
                  and its term shall expire, terminate and come to an end as of
                  the effective date of the expiration or termination of the
                  Overlease, and Sublandlord shall cause Subtenant to vacate and
                  surrender the Subleased Premises on or before such date in
                  accordance with the applicable provisions of the Overlease
                  regarding surrender and delivery of the Premises to
                  Overlandlord.

         12.      Sublandlord and Subtenant hereby acknowledge and agree that
                  Overlandlord shall not be responsible for any brokers
                  commissions or fees of any kind or nature in connection with
                  the Sublease or the subject matter thereof and they each
                  hereby agree to indemnify and hold Overlandlord harmless from
                  and against any such claims including all reasonable attorneys
                  fees sustained or incurred by Overlandlord as a result of any
                  such claim against Overlandlord. Sublandlord and Subtenant
                  hereby jointly and severally agree to indemnify and hold
                  Overlandlord

                                                                               9
<PAGE>
                  harmless from and against any and all claims, costs or damages
                  sustained or incurred by Overlandlord as the result of any
                  claim by any party that they are entitled to a commission or
                  broker's fee in connection with this Consent or the Sublease.
                  The indemnity contained herein shall include, without
                  limitation, all reasonable attorneys' fees and expenses
                  incurred by Overlandlord in connection with any such claim.
                  This paragraph 12 shall survive expiration or earlier
                  termination of the Sublease.

         13.      Sublandlord and Subtenant, jointly and severally, hereby agree
                  to indemnify and hold Overlandlord harmless with respect to
                  any and all liability to and claims by Subtenant in connection
                  with the Sublease, Subtenant's use and occupancy of the
                  Subleased Premises, or the subject matter hereof unless
                  arising from the gross negligence or willful misconduct of
                  Overlandlord. The within indemnity shall be joint and several
                  and shall include all losses, costs, damages or expenses
                  including, without limitation, reasonable attorneys fees
                  sustained or incurred by Overlandlord arising out of the
                  matters contained herein. The provisions of this paragraph 13
                  shall survive any expiration or earlier termination of the
                  Sublease or the Overlease.

         14.      In the event that there shall be any conflict between the
                  terms, covenants and conditions of this Consent to Sublease
                  and the terms, covenants and, conditions of the Sublease
                  and/or any other agreement by and between Sublandlord and
                  Subtenant, then the terms, covenants and conditions of this
                  Consent to Sublease shall prevail in each instance and any
                  conflicting terms, covenants or conditions of the Sublease
                  shall be deemed modified to conform with the terms, covenants
                  and conditions of this Consent to Sublease.

         15.      Notwithstanding anything contained in the Sublease to the
                  contrary, Sublandlord and Subtenant represent to and agree
                  with Overlandlord that no changes, additions or improvements
                  including, without limitation, electrical, HVAC or other
                  construction work shall be performed in the Subleased Premises
                  unless detailed plans and specifications for such work are
                  first submitted to Overlandlord for its approval and
                  Overlandlord shall have granted such approval in writing. Such
                  approval shall be given or withheld in accordance with the
                  applicable terms of the Overlease. In accordance with the
                  provisions of the Overlease, all such work, if approved by
                  Overlandlord, shall be subject to the requirements contained
                  in the Overlease applicable to construction within or
                  alterations of the Subleased Premises and shall be performed
                  in accordance with the Overlease.

         16.      No signs shall be placed upon or within the Building and/or
                  the Subleased Premises without the express written consent of
                  Overlandlord, which consent may be granted or withheld by
                  Overlandlord in its sole and absolute discretion.

                                                                              10
<PAGE>
         17.      Subtenant shall, within 10 Business Days of written request
                  from Overlandlord therefor, execute and deliver to
                  Overlandlord and/or the holder of any mortgage upon or
                  proposed purchasers of the Building, a so-called "Estoppel
                  Letter" in form satisfactory to Overlandlord or such holder of
                  a Mortgage or proposed purchaser which shall include, among
                  other things, if so requested, a statement (i) certifying that
                  the Sublease is in full force and effect and has not been
                  assigned, modified or amended, (ii) that to Subtenant's
                  knowledge, Sublandlord is not in default thereunder, (iii) the
                  date through which rent has been paid and (iv) that, to
                  Subtenant's knowledge, there are no defenses or set-offs
                  against enforcement of the Sublease or this Agreement against
                  Subtenant.

         18.      Subtenant hereby further agrees that upon the written request
                  of Overlandlord, Subtenant shall subordinate its interest in
                  the Sublease to the lien of any mortgage, security agreement
                  or lease now or hereafter affecting the Building or the land
                  upon which the Building is constructed. Provided, however,
                  that in the event of Overlease Termination and Overlandlord's
                  election to treat the Overlease as a direct lease between
                  Subtenant and Overlandlord pursuant to Section 3 of these
                  General Conditions then, Subtenant shall step into the place
                  of Sublandlord for purposes of Section 12.2 of the Lease and
                  Sublandlord's rights to receive a non-disturbance agreement in
                  accordance with and subject to the provisions of Section 12.2.

         19.      As a condition to the effectiveness of the within Consent, as
                  additional rent under the Overlease, Sublandlord shall, within
                  ten (10) days after invoice, reimburse Overlandlord for all
                  costs and expenses including without limitation, attorneys
                  fees sustained or incurred by Overlandlord in connection with
                  Sublandlord's request for Overlandlord's Consent to the
                  execution and delivery of the Sublease including, without
                  limitation, review of the Sublease and preparation and
                  negotiation of this Consent.

         20.      All notices and demands which may or are to be required or
                  permitted to be given by any party hereunder shall be in
                  writing. All notices and demands to Subtenant shall be sent by
                  United States Mail, certified mail return receipt requested,
                  postage prepaid, addressed to Subtenant at the Subleased
                  Premises, and to the address of Subtenant set forth in the
                  Preamble to this Consent, or to such other place as Subtenant
                  may from time to time designate in a notice to the other
                  parties hereto given in the manner herein provided.

                  All notices and demands to Sublandlord shall be sent by United
                  States Mail, certified mail return receipt requested, postage
                  prepaid, addressed to the Sublandlord at the address of
                  Sublandlord set forth in the Preamble to this Consent, and to
                  such other person or place as the Subtenant may from time to
                  time designate in a notice to the other parties hereto given
                  in the manner herein provided.

                                                                              11
<PAGE>
                  ALL NOTICES AND DEMANDS TO OVERLANDLORD SHALL BE SENT BY
                  UNITED STATES MAIL, CERTIFIED MAIL RETURN RECEIPT REQUESTED,
                  POSTAGE PREPAID, ADDRESSED TO THE OVERLANDLORD AT THE ADDRESS
                  OF OVERLANDLORD SET FORTH IN THE PREAMBLE TO THIS CONSENT, AND
                  TO SUCH OTHER PERSON OR PLACE AS THE OVERLANDLORD MAY FROM
                  TIME TO TIME DESIGNATE IN A NOTICE TO THE OTHER PARTIES HERETO
                  GIVEN IN THE MANNER HEREIN PROVIDED.

                  Notices may also be sent via overnight courier to such
                  addresses, as applicable.

         21.      Submission of this document to the Sublandlord and/or the
                  Subtenant shall have no binding effect and shall not be deemed
                  or construed to mean that Overlandlord has consented or will
                  consent to the subletting contemplated by the Sublessor.
                  Execution of this Consent to Sublease by Sublandlord and/or
                  Subtenant and delivery thereof to Overlandlord shall similarly
                  have no binding effect unless and until Overlandlord has
                  approved the terms and provisions of the Sublease and Landlord
                  has approved, executed and delivered this Consent to Sublease
                  to both Sublandlord and Subtenant. In submitting this document
                  to Sublandlord and/or Subtenant, Overlandlord hereby reserves
                  any and all rights, privileges and protections afforded to
                  Overlandlord under the Lease, at law and in equity.

                -Remainder of this Page Intentionally left Blank-

                                                                              12
<PAGE>
                                    EXHIBIT E
                            Form of Letter of Credit
<PAGE>
                                                             SILICON VALLEY BANK
                                                          International Division

IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB02IS4413
DATE: JULY 18, 2002

BENEFICIARY:
ANTIGENICS, INC
34 COMMERCE WAY
WOBURN, MA 01801
AS "SUBLANDLORD"

APPLICANT:
GTC BIOTHERAPEUTICS, INC.
175 CROSSING BLVD., SUITE 410
FRAMINGHAM, MA 01702
AS "SUBTENANT"

AMOUNT: US$200,000.00 (TWO HUNDRED THOUSAND AND 00/100 U.S. DOLLARS)

EXPIRATION DATE: JULY 18, 2003

LOCATION: AT OUR COUNTERS IN SANTA CLARA, CALIFORNIA

DEAR SIR/MADAM:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB02IS4413 IN
YOUR FAVOR AVAILABLE BY YOUR DRAFT DRAWN ON US AT SIGHT IN THE FORM OF EXHIBIT
"B" ATTACHED AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:

1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY.

2. A DATED CERTIFICATION FROM THE BENEFICIARY SIGNED BY AN AUTHORIZED
    OFFICER, FOLLOWED BY ITS DESIGNATED TITLE, STATING THE FOLLOWING:

         (A)      "THE AMOUNT REPRESENTS FUNDS DUE AND OWING TO US AS A RESULT
                  OF AN EVENT OF DEFAULT BY APPLICANT WITH RESPECTS TO ONE OR
                  MORE OF THE TERMS OF THAT CERTAIN SUBLEASE AND/OR ANTIGENICS
                  LEASEHOLD LEASE BY AND BETWEEN BENEFICIARY, AS SUBLANDLORD,
                  AND APPLICANT, AS SUBTENANT."

                                       OR

         (B)      "WE HEREBY CERTIFY THAT WE HAVE RECEIVED WRITTEN NOTICE FROM
                  SILICON VALLEY BANK THAT LETTER OF CREDIT NO. SVB02ISXXXX WILL
                  NOT BE RENEWED, AND THAT WE HAVE NOT RECEIVED A REPLACEMENT OF
                  THIS LETTER OF CREDIT FROM APPLICANT SATISFACTORY TO US AT
                  LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION DATE OF THIS
                  LETTER OF CREDIT."

PARTIAL DRAWS ARE ALLOWED. THIS LETTER OF CREDIT MUST ACCOMPANY ANY DRAWINGS
HEREUNDER FOR ENDORSEMENT OF THE DRAWING AMOUNT AND WILL BE RETURNED TO THE
BENEFICIARY UNLESS IT IS FULLY UTILIZED

                                   PAGE 1 OF 2

         3003 TASMAN DRIVE | SANTA CLARA, CA, U.S.A. 95054 | www.svb.com
     PHONE: 408-654-7400 | DIRECT LINE: 408-654-7736 | FAX: 408-496-2418 OR
                                  408-969-6510
<PAGE>
                                                             SILICON VALLEY BANK
                                                          International Division

IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB02IS4413
DATED JULY 18, 2002

DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER AND DATE OF THIS LETTER OF
CREDIT.

THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD
OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE
UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE
NOTIFY YOU AND THE APPLICANT BY REGISTERED MAIL/OVERNIGHT COURIER SERVICE AT THE
ABOVE ADDRESSES THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE
CURRENT EXPIRATION DATE. IN NO EVENT SHALL THIS LETTER OF CREDIT BE
AUTOMATICALLY EXTENDED BEYOND DECEMBER 31, 2006.

THIS LETTER OF CREDIT MAY ONLY BE TRANSFERRED IN ITS ENTIRETY BY THE ISSUING
BANK UPON OUR RECEIPT OF THE ATTACHED "EXHIBIT A" DULY COMPLETED AND EXECUTED BY
THE BENEFICIARY AND ACCOMPANIED BY THE ORIGINAL LETTER OF CREDIT AND ALL
AMENDMENTS, IF ANY, WITH THE PAYMENT OF OUR TRANSFER FEE OF -1/4 OF 1% OF THE
TRANSFER AMOUNT (MINIMUM USD250.00). THE TRANSFEREE FEE WILL BE PAID BY THE
BENEFICIARY.

ALL DEMANDS FOR PAYMENT SHALL BE MADE BY PRESENTATION OF THE ORIGINAL
APPROPRIATE DOCUMENTS PRIOR TO 10:00 A.M. CALIFORNIA TIME, ON A BUSINESS DAY AT
OUR OFFICE (THE "BANK'S OFFICE") AT: SILICON VALLEY BANK, 3003 TASMAN DRIVE
SANTA CLARA, CA 95054, ATTENTION: STANDBY LETTER OF CREDIT NEGOTIATION SECTION
OR BY FACSIMILE TRANSMISSION AT: (408) 654-6211 OR (408) 496-2418; AND
SIMULTANEOUSLY UNDER TELEPHONE ADVICE TO: (408) 654-7120 OR (408) 654-3052),
ATTENTION: STANDBY LETTER OF CREDIT NEGOTIATION SECTION WITH ORIGINALS TO FOLLOW
BY OVERNIGHT COURIER SERVICE; PROVIDED, HOWEVER, THE BANK WILL DETERMINE HONOR
OR DISHONOR ON THE BASIS OF PRESENTATION BY FACSIMILE ALONE, AND WILL NOT
EXAMINE THE ORIGINALS.

PAYMENT AGAINST CONFORMING PRESENTATIONS HEREUNDER SHALL BE MADE BY BANK DURING
NORMAL BUSINESS HOURS OF THE BANK'S OFFICE WITHIN TWO (2) BUSINESS DAYS AFTER
PRESENTATION.

WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS AND BONAFIDE HOLDERS THAT THE DRAFTS
DRAWN UNDER AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF
CREDIT SHALL BE DULY HONORED UPON PRESENTATION TO THE DRAWEE, IF NEGOTIATED ON
OR BEFORE THE EXPIRATION DATE OF THIS CREDIT.

THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE,
PUBLICATION NO. 500.

/s/ Evelio G. Barairo                         /s/ Cesar Agoncillo
--------------------------------------        ----------------------------------
AUTHORIZED SIGNATURE                          AUTHORIZED SIGNATURE

                                   PAGE 2 OF 2

         3003 TASMAN DRIVE | SANTA CLARA, CA, U.S.A. 95054 | www.svb.com
     PHONE: 408-654-7400 | DIRECT LINE: 408-654-7736 | FAX: 408-496-2418 OR
                                  408-969-6510
<PAGE>
                                                             SILICON VALLEY BANK
                                                          International Division

                                   EXHIBIT "A"

DATE:

TO: SILICON VALLEY BANK
    3003 TASMAN DRIVE                       RE: STANDBY LETTER OF CREDIT
    SANTA CLARA, CA 95054                       NO. SVB02IS4413 ISSUED BY
    ATTN:INTERNATIONAL DIVISION.                SILICON VALLEY BANK, SANTA CLARA
         STANDBY LETTERS OF CREDIT              L/C AMOUNT:

GENTLEMEN:

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

(NAME OF TRANSFEREE)
(ADDRESS)

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

SINCERELY,

-----------------------------
   (BENEFICIARY'S NAME)

-----------------------------
 SIGNATURE OF BENEFICIARY

SIGNATURE AUTHENTICATED

----------------------------
     (NAME OF BANK)

----------------------------
   AUTHORIZED SIGNATURE

         3003 TASMAN DRIVE | SANTA CLARA, CA, U.S.A. 95054 | www.svb.com
     PHONE: 408-654-7400 | DIRECT LINE: 408-654-7736 | FAX: 408-496-2418 OR
                                  408-969-6510
<PAGE>
                                   EXHIBIT "B"

     DATE: _______________                          REF. NO. ___________________

     AT SIGHT OF THIS DRAFT

     PAY TO THE ORDER OF _________________________________________ US$__________

     USDOLLARS _________________________________________________________________

     DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, STANDBY
     LETTER OF CREDIT NUMBER NO. _____________________ DATED ___________________

     TO: SILICON VALLEY BANK
          3003 TASMAN DRIVE                      _______________________________
          SANTA CLARA, CA 95054                      (BENEFICIARY'S NAME)

                                                 _______________________________
                                                     AUTHORIZED SIGNATURE

                         GUIDELINES TO PREPARE THE DRAFT

1.   DATE: ISSUANCE DATE OF DRAFT.

2.   REF. NO.: BENEFICIARY'S REFERENCE NUMBER, IF ANY.

3.   PAY TO THE ORDER OF: NAME OF BENEFICIARY AS INDICATED IN THE L/C (MAKE SURE
     BENEFICIARY ENDORSES IT ON THE REVERSE SIDE).

4.   US$: AMOUNT OF DRAWING IN FIGURES.

5.   USDOLLARS: AMOUNT OF DRAWING IN WORDS.

6.   LETTER OF CREDIT NUMBER: SILICON VALLEY BANK'S STANDBY L/C NUMBER THAT
     PERTAINS TO THE DRAWING.

7.   DATED: ISSUANCE DATE OF THE STANDBY L/C.

8.   BENEFICIARY'S NAME: NAME OF BENEFICIARY AS INDICATED IN THE L/C.

9.   AUTHORIZED SIGNATURE: SIGNED BY AN AUTHORIZED SIGNER OF BENEFICIARY.

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS DRAFT, PLEASE CALL OUR L/C
PAYMENT SECTION AND ASK FOR:

ALICA DA LUZ: 408-654-7120
CESAR AGONCILLO: 408-654-3052<PAGE>

                                                                    Exhibit 10.1

                 FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

     This Amendment is made as of the 23rd day of May 2002, by and between
IPARTY RETAIL STORES CORP. ("iParty Retail"), a Delaware corporation, and IPARTY
CORP. ("iParty Corp.") , a Delaware corporation, (iParty Retail and iParty Corp.
are collectively referred to as the "BORROWER"), and WELLS FARGO RETAIL FINANCE,
L.L.C., a Delaware limited liability company (the "LENDER").

                                    RECITALS

     The Borrower, iParty Retail, and the Lender have entered into a Loan and
Security Agreement dated as of August 23, 2000 (the "LOAN AGREEMENT").

     The Borrower, iParty Retail, may request certain advances from the Lender
from time to time pursuant to the Loan Agreement and the Borrower, iParty
Retail, may request that certain letters of credit be issued for its account
under the Loan Agreement, and the Lender shall, subject to the terms and
conditions of the Loan Agreement, make loans to the Borrower, iParty Retail, or
issue or cause to be issued letters of credit. The Lender may demand repayment
of the loans at any time pursuant to the terms of the Loan Agreement.

     The loan advances under the Loan Agreement are evidenced by the Borrower,
iParty Retail's, Master Note dated as of August 23, 2000, in the maximum
principal amount of Seven Million Five Hundred Thousand ($7,500,000.00) Dollars
and payable to the order of the Lender (the "NOTE").

     All indebtedness of the Borrower, iParty Retail, to the Lender is secured
pursuant to the terms of the Loan Agreement and all other related security
documents (collectively, the "SECURITY DOCUMENTS") and is guaranteed pursuant to
the unconditional guarantees of the Guarantors defined therein (the
"GUARANTOR").

     The Borrower, iParty Retail, has requested that certain amendments be made
to the Loan Agreement, which the Lender is willing to make pursuant to the terms
and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

     1. Terms used in this Amendment which are defined in the Loan Agreement
shall have the same meanings as defined therein, unless otherwise defined
herein.

     2. The Loan Agreement is hereby amended as follows:

          (a) The term "BORROWER" as used in the Loan Agreement is hereby
     amended to mean iParty Retail Stores Corp., a Delaware corporation ("iPARTY
     RETAIL"), iParty Corp., a

<PAGE>

     Delaware corporation ("IPARTY CORP"), and the entities which are now, or in
     accordance with Section 14-19 become, Borrowers hereunder.

          (b) The definition of "MATURITY DATE" is hereby stricken in its
     entirety and the following new definition of "MATURITY DATE" substituted
     therefor:

               "`MATURITY DATE':July 31, 2004."

          (c) The definition of "BORROWING BASE" is hereby stricken in its
     entirety and the following new definition of "BORROWING BASE" substituted
     therefor:

               "`BORROWING BASE': Means the lesser of (i) or (ii), where (i) is
          Sixty-five (65%) percent of the aggregate value of Acceptable
          Inventory at Cost, and (ii) is Ninety (90%) percent of the most
          recently determined Net Retail Liquidation Value, or One Hundred
          (100%) percent of the most recently determined Net Retail Liquidation
          Value (the "Seasonal Advance Rate") during the months of June and
          July."

          (d) The definition of "INVENTORY RESERVES" is hereby stricken in its
     entirety and the following new definition of "INVENTORY RESERVES"
     substituted therefor:

               "`INVENTORY RESERVES": Such reserves as may be established from
          time to time by the Lender in the Lender's discretion with respect to
          the determination of the saleability, at retail, of the Acceptable
          Inventory or which reflect such other factors as affect the current
          Retail or market value of the Acceptable Inventory. Without limiting
          the generality of the foregoing, Inventory Reserves may include (but
          are not limited to) reserves based on the following:

                (a)      shrinkage;
                (b)      customer deposits;
                (c)      sales tax attributable to the State of Florida;
                (d)      damaged/unsaleable goods; and
                (e)      Non-SKU items.

          Notwithstanding the foregoing, so long as the Business Plan attached
     to the Loan Agreement as Exhibit 9-10 is in effect and Borrower performs in
     substantial compliance therewith and there is not then existing any Event
     of Default, Lender shall not establish Reserves for (i) obsolescence
     (determined based upon Inventory on hand beyond a given number of days),
     (ii) seasonality, (iii) imbalance, (iv) change in inventory character,
     composition or mix, (v) markdowns (both permanent and point of sale) or
     (vi) retail markons or markups inconsistent with prior period practice and
     performance, or advertising calendar and planned advertising events."

<PAGE>

          (e) Section 1-8(a) is stricken in its entirety and the following new
     Section 1-8(a) substituted therefor:

               "(a) The unpaid principal balance of the Loan Account shall bear
          interest, until repaid (calculated based upon a 360-day year and
          actual days elapsed), at the aggregate of Base plus one (1%) percent
          but in no event less than six and one half of one (6.5%) percent per
          annum or in excess of the maximum rate permitted by applicable law:
          such rate of interest shall be effective as of October 1, 2001."

          (f) Section 1-9(b) is stricken in its entirety and the following new
     Section 1-9(b) substituted therefor:

               "(b) Collateral Monitoring Fees. On the execution date hereof and
          on the first day of each month thereafter, a collateral monitoring fee
          in the amount of Three Thousand Five Hundred ($3,500) Dollars for all
          loans, or in the alternative, Five Thousand ($5,000) Dollars if there
          were any outstanding loans under the Seasonal Advance Rate for the
          previous month; provided, however, that the first collateral
          monitoring fee payable hereunder shall be prorated in accordance with
          the number of days remaining in such month."

          (g) Section 2-1(b) is hereby stricken in its entirety and the
     following new Section 2-1(b) substituted therefor:

               "(b) All Accounts, accounts receivable, contracts, contract
          rights, notes, Chattel Paper (whether tangible or electronic), Deposit
          Accounts, Letter of Credit Rights (whether or not the letter of credit
          is evidenced by a writing), Supporting Obligations, Commercial Tort
          Claims, bills, drafts, acceptances, General Intangibles, Instruments,
          Documents, Document of Title, securities, Security Entitlements,
          Security Accounts, Investment Property, choses in action, and all
          other debts, obligations and liabilities in whatever form, owing to
          Borrower from any Person, firm or corporation or any other legal
          entity, whether now existing or hereafter arising, now or hereafter
          received by or belonging or owing to Borrower, for goods sold by it or
          for services rendered by it, or however otherwise same may have been
          established or created, all guarantees and securities therefor, all
          right, title and interest of Borrower in the merchandise or services
          which gave rise thereto, including the rights of reclamation and
          stoppage in transit, all rights to replevy goods, and all rights of an
          unpaid seller of merchandise or services."

          (h) The following new Sections 5-27, 5-28, 5-29 and 5-30 are hereby
     added:

               "5-27. GOODS IN POSSESSION OF BAILEE. If any goods are at any
          time in the possession of a bailee, Borrower shall promptly notify
          Lender thereof and, if requested by Lender, shall promptly obtain an
          acknowledgment from the bailee, in

<PAGE>

          form and substance satisfactory to Lender, that the bailee holds such
          Collateral for the benefit of Lender and shall act upon the
          instructions of Lender, without the further consent of Borrower.
          Lender agrees with Borrower that Lender shall not give any such
          instructions unless an Event of Default has occurred and is continuing
          or would occur after taking into account any action by Borrower with
          respect to the bailee.

               5-28. LETTERS OF CREDIT. If Borrower is at any time a beneficiary
          under a letter of credit now or hereafter issued in favor of Borrower,
          Borrower shall promptly notify Lender thereof and, at the request and
          option of Lender, Borrower shall, pursuant to an agreement in form and
          substance satisfactory to Lender, either (a) arrange for the issuer
          and any confirmer of such letter of credit to consent to an assignment
          to Lender of the proceeds of any drawing under the letter of credit,
          or (b) arrange for Lender to become the transferee beneficiary of the
          letter of credit, with Lender agreeing, in each case, that the
          proceeds of any drawing under the letter of credit are to be applied
          in the same manner as any other payment on an Account.

               5-29. COMMERCIAL TORT CLAIMS. If Borrower shall at any time hold
          or acquire a commercial tort claim, Borrower shall immediately notify
          Lender in a writing signed by Borrower of the brief details thereof
          and grant to Lender in such writing a security interest therein, and
          in the proceeds thereof, all upon the terms of this Agreement, with
          such writing to be in form and substance satisfactory to Lender.

               5-30. CHANGES IN LEGAL STATUS. The Borrower shall not (a) change
          its name, its place of business or, if more than one, chief executive
          office, or its mailing address or organizational identification number
          if it has one, or (b) change its type of organization, jurisdiction or
          organization or other legal structure; without providing thirty (30)
          days' prior written notice to Lender in each case. If the Borrower
          does not have an organizational identification number and later
          obtains one, the Borrower shall forthwith notify the Lender of such
          organizational identification number."

          (i) Section 7-5(a) is hereby stricken in its entirety and the
     following new Section 7-5(a) substituted therefor:

               "(a) On each Banking Day, upon receipt by Lender, the Lender
          shall apply towards the Liabilities, the then collected balance of the
          Concentration Account (net of fees charged, and of such impressed
          balances as may be required by the bank at which the Concentration
          Account is maintained), provided, however, for purposes of the
          calculation of interest on the unpaid principal balance of the Loan
          Account, such payment shall be deemed to have been made one (1)
          Banking Day after such transfer, provided, however, if no Liabilities
          are outstanding, then any amounts contained in the Concentration
          Account shall then be transferred immediately to the Funding Account."

<PAGE>

          (j) Section 9-9(b) is hereby stricken in its entirety and the
     following new Section 9-9(b) substituted therefor:

               "(b) Upon the Lender's request from time to time after reasonable
          notice (except after the occurrence of an Event of Default, when the
          requirement for reasonable notice will not be applicable), the
          Borrower shall obtain, or shall permit the Lender to obtain (in all
          events, at the Borrower's expense) financial or SKU based physical
          counts and/or inventories of the Collateral, conducted by such
          inventory takers as are reasonably satisfactory to the Lender and
          following such methodology as may be required by the Lender, each of
          which physical counts and/or financial or SKU based inventories shall,
          at Lender's request, be observed by the Borrower's accountants. The
          Lender will require the Borrower to conduct one (1) such count and/or
          inventory during each twelve (12) month period during which this
          Agreement is in effect, but in its discretion, may undertake
          additional such counts or inventories during such period. The draft or
          unaudited results of all inventories or counts shall be furnished to
          Lender immediately thereafter and final, reconciled results within
          fifteen (15) days of the taking of such inventories or counts. The
          Lender reserves the right to seek directly unaudited or draft results
          from such inventory takers."

          (k) The following new Sections 11-7 and 11-8 are hereby added:

               "11-7. SALES ON CREDIT. If the Lender sells any of the Collateral
          on credit, the Borrower will be credited only with payments actually
          made by the purchaser of such Collateral and received by the Lender.
          If the purchaser fails to pay for the Collateral, the Lender may
          re-sell the Collateral and the Borrower shall be credited with the
          proceeds of the sale.

               11-8. STANDARDS FOR EXERCISING REMEDIES. To the extent that
          applicable law imposes duties on Lender to exercise remedies in a
          commercially reasonable manner, Borrower acknowledges and agrees that
          it is not commercially unreasonable for Lender (a) to fail to incur
          expenses reasonably deemed significant by Lender to prepare Collateral
          for disposition or otherwise to complete raw material or work in
          process into finished goods or other finished products for
          disposition, (b) to fail to obtain third party consents for access to
          Collateral to be disposed of, or to obtain or, if not required by
          other law, to fail to obtain governmental or third party consents for
          the collection or disposition of Collateral to be collected or
          disposed of, (c) to fail to exercise collection remedies against
          account debtors or other persons obligated on Collateral or to remove
          liens or encumbrances on or any adverse claims against Collateral, (d)
          to exercise collection remedies against account debtors and other
          persons obligated on Collateral directly or through the use of
          collection agencies and other collection specialists, (e) to advertise
          dispositions of Collateral through publications or media of general
          circulation, whether or not the Collateral is of a specialized nature,
          (f) to contact other persons, whether or not in the same business as
          Borrower, for expressions of interest in acquiring all or any portion
          of the Collateral, (g) to hire one or more professional auctioneers to
          assist in the disposition of

<PAGE>

          Collateral, whether or not the Collateral is of a specialized nature,
          (h) to dispose of the Collateral by utilizing Internet sites that
          provide for the auction of assets of the types included in the
          Collateral or that have the reasonable capability of doing so, or that
          match buyers and sellers of assets, (i) to dispose of assets in
          wholesale rather than retail markets, (j) to disclaim disposition
          warranties specifically to disclaim any warranties of title or the
          like, (k) to purchase insurance or credit enhancements to insure
          Lender against risks of loss, collection or disposition of Collateral
          or to provide to Lender a guaranteed return from the collection or
          disposition of Collateral, or (l) to the extent deemed appropriate by
          Lender, to obtain the services of other brokers, investment bankers,
          consultants and other professionals to assist Lender in the collection
          or disposition of any of the Collateral. Borrower acknowledges that
          the purpose of this section is to provide non-exhaustive indications
          of what actions or omissions by Lender would not be commercially
          unreasonable in Lender's exercise of remedies against the Collateral
          and that other actions or omissions by Lender shall not be deemed
          commercially unreasonable solely on account of not being indicated in
          this section. Without limitation upon the foregoing, nothing contained
          in this section shall be construed to grant any rights to Borrower or
          to impose any duties on Lender that would not have been granted or
          imposed by this Agreement or by applicable law in the absence of this
          section."

          (l) Sections 13-1 and 13-3 are hereby stricken in their entirety and
     the following new Sections 13-1 and 13-3 substituted therefor:

               "13.1. TERMINATION OF REVOLVING CREDIT. This Agreement is, and is
          intended to be, a continuing agreement and shall remain in full force
          and effect for an initial term ending on the Maturity Date, and
          thereafter for successive twelve-month periods, each beginning on the
          1st day of August (commencing 2004) of each year and ending on July
          31st of the following year (each such twelve-month period is
          hereinafter referred to as a "RENEWAL TERM"); provided, however, that
          either party may terminate this Agreement as of the end of the initial
          term or any subsequent renewal term by giving the other party notice
          to terminate in writing at least forty-five (45) days prior to the end
          of any such period whereupon at the end of such period all Liabilities
          shall be due and payable in full without presentation, demand, or
          further notice of any kind, whether or not all or any part of the
          Liabilities is otherwise due and payable pursuant to the agreement or
          instrument evidencing same. Lender may terminate this Agreement
          immediately and without notice upon the occurrence of an Event of
          Default. Notwithstanding the foregoing or anything in this Agreement
          or elsewhere to the contrary, the security interest, Lender's rights
          and remedies hereunder and Borrower's obligations and liabilities
          hereunder shall survive any termination of this Agreement and shall
          remain in full force and effect until all of the Liabilities
          outstanding, or contracted or committed for (whether or not
          outstanding), before the receipt of such notice by Lender, and any
          extensions or renewals thereof (whether made before or after receipt
          of such notice), together with interest accruing thereon after such
          notice, shall be finally and irrevocably paid in full. No Collateral

<PAGE>

          shall be released or financing statement terminated until such final
          and irrevocable payment in full of the Liabilities, as described in
          the preceding sentence.

               13.3. PREPAYMENT PREMIUM. If Borrower pays in full all or
          substantially all of the Liabilities prior to the end of the initial
          term of this Agreement (or any renewal term), other than temporarily
          from funds internally generated in the ordinary course of business or
          through an infusion of capital of, or into, iParty Corp. (provided
          this Agreement is not terminated as a consequence of such payment or
          infusion or otherwise), at the time of such payment Borrower shall
          also pay to Lender a prepayment premium in an amount equal to: (i) two
          (2%) percent of the unpaid principal balance of the Loan Account, if
          prepaid on or before July 31, 2003, and (ii) one (1%) percent of the
          unpaid principal balance of the Loan Account, if prepaid after July
          31, 2003 and before the Maturity Date. Any tender of payment in full
          of the Liabilities following an acceleration by Lender of the
          Liabilities pursuant to ARTICLE 10 hereof, shall be for purposes of
          this section deemed to be a prepayment requiring Borrower to pay the
          aforementioned prepayment premium.

               Such prepayment premium shall be paid to Lender as additional
          consideration, and in view of the impracticality and extreme
          difficulty of ascertaining the actual amount of damages to the Lender
          or profits lost by the Lender as a result of such early terminations
          and by mutual agreement of the parties as to a reasonable estimation
          and calculation of the Lender's lost profits or damages, as liquidated
          damages for the loss of the bargain by Lender and not as a penalty."

          (m) The following new Sections 14-19 and 14-20 are hereby added:

               "14-19. ADDITIONAL BORROWERS. With the prior written consent of
          the Lender, an Affiliate of the Borrower may become a Borrower
          hereunder (a "NEW BORROWER") by executing and delivering to the Lender
          an assumption agreement in the form of EXHIBIT D annexed hereto and by
          executing and delivering to the Lender a demand promissory note in the
          maximum principal amount of the Credit Limit payable to the order of
          the Lender and executed by the New Borrower and the then existing
          Borrower(s).

               14-20. JOINT AND SEVERAL LIABILITY.

               (a) Each Borrower is accepting joint and several liability under
          this Agreement and the Master Note in consideration of the financial
          accommodations to be provided by Lender under this Agreement, for the
          mutual benefit, directly and indirectly, of each Borrower and in
          consideration of the undertakings of each other Borrower to accept
          joint and several liability for the Liabilities of each Borrower to
          Lender.

               (b) Each Borrower, jointly and severally, hereby irrevocably and

<PAGE>

          unconditionally accepts, not merely as a surety but also as a
          co-debtor, joint and several liability with each other Borrower, with
          respect to the payment and performance of all of the Liabilities of
          each Borrower to Lender under this Agreement and the Master Note
          (including, without limitation, any Liabilities arising under this
          section), it being the intention of the parties hereto that all the
          Liabilities of each Borrower to Lender under this Agreement and the
          Master Note shall be the joint and several Liabilities of each of the
          Borrowers without preferences or distinction among them.

               (c) If and to the extent that any of the Borrowers shall fail to
          make any payment with respect to any of the Liabilities of each
          Borrower to Lender under this Agreement or the Master Note, as and
          when due or to perform any of such Liabilities in accordance with the
          terms thereof, then in each such event the other Borrower, under this
          Agreement or the Master Note will make such payment with respect to,
          or perform, such Liabilities.

               (d) The Liabilities of each Borrower under the provisions of this
          section constitute full recourse Liabilities of each Borrower
          enforceable against each such Borrower to the full extent of its
          properties and assets, irrespective of the validity, regularity or
          enforceability of this Agreement or any other circumstance whatsoever.

               (e) Each Borrower hereby waives notice of acceptance of its joint
          and several liability, notice of any loans made under this Agreement,
          notice of any action at any time taken or omitted by Lender under or
          in respect of any of the Liabilities of each Borrower to Lender under
          this Agreement and the Master Note, and, generally, to the extent
          permitted by applicable law, all demands, notices and other
          formalities of every kind in connection with this Agreement. Each
          Borrower hereby assents to, and waives notice of, any extension or
          postponement of the time for the payment of any of the Liabilities of
          each Borrower to Lender under this Agreement and the Master Note, the
          acceptance of any payment of any of such Liabilities, the acceptance
          of any partial payment thereon, any waiver, consent or other action or
          acquiescence by Lender at any time or times in respect of any default
          by any Borrower in the performance or satisfaction of any term,
          covenant, condition or provision of this Agreement, any and all other
          indulgences whatsoever by Lender in respect of any of the Liabilities
          of each Borrower to Lender under this Agreement and the Master Note,
          and the taking, addition, substitution or release, in whole or in
          part, at any time or times, of any security for any of such
          Liabilities of each Borrower to Lender or the addition, substitution
          or release, in whole or in part, of any Borrower. Without limiting the
          generality of the foregoing, each Borrower assents to any other action
          or delay in acting or failure to act on Lender's part with respect to
          the failure by any Borrower to comply with any of its respective
          Liabilities, including, without limitation, any failure strictly or
          diligently to assert any right or to pursue any remedy or to comply
          fully with applicable laws or regulations thereunder, which might, but
          for the provisions of this section, afford grounds for terminating,
          discharging or relieving any Borrower, in whole or in part, from any
          of its Liabilities under this

<PAGE>

          section, it being the intention of each Borrower that, so long as any
          of the Liabilities under this Agreement remain unsatisfied, the
          Liabilities of such Borrower under this section shall not be
          discharged except by performance and then only to the extent of such
          performance. The Liabilities of each Borrower under this section shall
          not be diminished or rendered unenforceable by any winding up,
          reorganization, arrangement, liquidation, reconstruction or similar
          proceeding with respect to any other Borrower or Lender. The joint and
          several liability of each Borrower under this Agreement shall continue
          in full force and effect notwithstanding any absorption, merger,
          amalgamation or any other change whatsoever in the name, membership,
          constitution or place of formation of any Borrower or Lender.

               (f) The provisions of this section are made for the benefit of
          Lender and Lender's successors and assigns, and may be enforced by
          Lender in good faith from time to time against any or all of the
          Borrowers as often as occasion therefor may arise and without
          requirement on Lender's part first to marshal any of its claims or to
          exercise any of its rights against any Borrower or to exhaust any
          remedies available to Lender against any other Borrower or to resort
          to any other source or means of obtaining payment of any of the
          Liabilities under this Agreement or to elect any other remedy. The
          provisions of this section shall remain in effect until all of the
          Liabilities of each Borrower to Lender under this Agreement and the
          Master Note shall have been paid in full or otherwise fully satisfied.
          If at any time, any payment, or any part thereof, made in respect of
          any of such Liabilities of each Borrower to Lender, is rescinded or
          must otherwise be restored or returned by Lender upon the insolvency,
          bankruptcy or reorganization of any Borrower, or otherwise, the
          provisions of this section will forthwith be reinstated in effect, as
          though such payment had not been made.

               (g) Until such time as all outstanding Liabilities are paid and
          discharged in full, each Borrower agrees that it shall not have, and
          hereby expressly waives: (i) any right to subrogation or
          indemnification, and any other right to payment from or reimbursement
          by any other Borrower, in connection with or as a consequence of any
          payment made by any Borrower to Lender, (ii) any right to enforce any
          right or remedy which Lender have or may hereafter have against any
          other Borrower, and (iii) any benefit of, and any right to participate
          in (A) any collateral now or hereafter held by Lender, or (B) any
          payment to Lender by, or collection by Lender from any other Borrower.
          The provisions of this paragraph are made for the express benefit of
          each Borrower as well as Lender, and may be enforced independently by
          each Borrower or any successor in interest to each Borrower."

          (n) The following new Section 14-21 is hereby added:

               "14-2. FINANCING STATEMENTS. Borrower hereby irrevocably
          authorizes Lender at any time and from time to time to file in any
          Uniform Commercial Code jurisdiction any initial financing statements
          and amendments thereto that (a) indicate the Collateral (i) as all
          assets of Borrower or words of similar effect, regardless of

<PAGE>

          whether any particular asset comprised in the Collateral falls within
          the scope of Article 9 of the Uniform Commercial Code of such
          jurisdiction, or (ii) as being of an equal or lesser scope or with
          greater detail, and (b) contain any other information required by the
          Uniform Commercial Code for the sufficiency or filing office
          acceptance of any financing statement or amendment, including (i)
          whether Borrower is an organization, the type of organization and any
          organization identification number issued to Borrower, and (ii) in the
          case of a financing statement filed as a fixture filing or indicating
          Collateral as as-extracted Collateral or timber to be cut, a
          sufficient description of real property to which the Collateral
          relates. Borrower agrees to furnish any such information to Lender
          promptly upon request. Borrower also ratifies its authorization for
          Lender to have filed in any Uniform Commercial Code jurisdiction any
          like initial financing statements or amendments thereto if filed prior
          to the date hereof. All reasonable charges, expenses and fees Lender
          may incur in filing any of the foregoing, together with reasonable
          costs and expenses of any lien search required by Lender, and any
          taxes relating thereto, shall be charged to the Revolving Loan Account
          and added to the Liabilities."

          (o) Exhibits 1-6, 5-2, 5-3, 5-4, 5-5, 5-6, 5-7, 5-9, 5-12, 7-1, 7-2,
     9-4, 9-10 and 9-11 to the Loan Agreement are hereby stricken in their
     entirety and the following new Exhibits 1-6, 5-2, 5-3, 5-4, 5-5, 5-6, 5-7,
     5-9, 5-12, 7-1, 7-2, 9-4, 9-10 and 9-11 attached hereto substituted
     therefor.

     3. Except as explicitly amended by this Amendment, all of the terms and
conditions of the Loan Agreement shall remain in full force and effect and shall
apply to any advance or letter of credit thereunder.

     4. This Amendment shall be effective upon receipt by the Lender of an
executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender:

          (a)  The replacement note substantially in the form of EXHIBIT A
               hereto, duly executed on behalf of the Borrower (the "REPLACEMENT
               NOTE") and the return to the Borrower, iParty Retail, of the
               original existing note;

          (b)  An assumption agreement substantially in the form of Exhibit D
               hereto, duly executed on behalf of the Borrower; and

          (c)  A multi-entity guaranty substantially in the form of EXHIBIT E
               hereto, duly executed on behalf of the Borrower.

     5. The Borrower hereby represents and warrants to the Lender as follows:

          (a)  The Borrower has all requisite power and authority to execute
               this Amendment and the Replacement Note and to perform all of
               their obligations hereunder, and this Amendment and the
               Replacement Note has been duly

<PAGE>

               executed and delivered by the Borrower and constitutes the legal,
               valid and binding obligation of the Borrower, enforceable in
               accordance with its terms.

          (b)  The execution, delivery and performance by the Borrower of this
               Amendment and the Replacement Note have been duly authorized by
               all necessary action and do not (i) require any authorization,
               consent or approval by any governmental department, commission,
               board, bureau, agency or instrumentality, domestic or foreign,
               (ii) violate any provision of any law, rule or regulation or of
               any order, writ, injunction or decree presently in effect, having
               applicability to the Borrower, or the articles of incorporation
               or by-laws of the Borrower, or (iii) result in a breach of or
               constitute a default under any indenture or loan or credit
               agreement or any other agreement, lease or instrument to which
               the Borrower is a party or by which any of them or their
               properties may be bound or affected.

          (c)  Except as set forth on "SCHEDULE 5(C)" hereto, all of the
               representations and warranties contained in Article V of the Loan
               Agreement are correct on and as of the date hereof as though made
               on and as of such date, except to the extent that such
               representations and warranties relate solely to an earlier date.

     6. All references in the Loan Agreement to "this Agreement" shall be deemed
to refer to the Loan Agreement as amended hereby. Any and all references in the
Security Documents to the Loan Agreement shall be deemed to refer to the Loan
Agreement as amended hereby.

     7. The execution of this Amendment and acceptance of any documents related
hereto shall not be deemed to be a waiver of any Default or Event of Default
under the Loan Agreement or breach, default or event of default under any
Security Document or other document held by the Lender, whether or not known to
the Lender and whether or not existing on the date of this Amendment. Upon
satisfaction of each of the conditions set forth in paragraph 4 hereof, the
definition of "Note" and all references thereto in the Loan Agreement shall be
deemed amended to describe the Replacement Note, which Replacement Note shall be
issued by the Borrower to the Lender in replacement, renewal and amendment, but
not in repayment, of the Note.

     8. The Borrower hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, and related to the Loan Agreement or Loan Documents
which the Borrower has had, now has or has made claim to have against any such
person for or by reason of any act, omission, matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this Amendment,
whether such claims, demands and causes of action are matured or unmatured or
known or unknown.

<PAGE>

     9. The Borrower hereby reaffirms its agreement under the Loan Agreement to
pay or reimburse the Lender on demand for all costs and expenses incurred by the
Lender in connection with the Loan Agreement, the Security Documents and all
other documents contemplated thereby, including without limitation all
reasonable fees and disbursements of legal counsel. Without limiting the
generality of the foregoing, the Borrower specifically agrees to pay all fees
and disbursements of counsel to the Lender for the services performed by such
counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto. The Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization by the Borrower, make a loan to the Borrower under the Loan
Agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses.

     10. This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which counterparts, taken together, shall constitute one and the same
instrument.

                          [SIGNATURES PAGES TO FOLLOW]

<PAGE>

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

                                    BORROWER

                                    IPARTY RETAIL STORES CORP.

                                    By:  /s/ Patrick Farrell
                                        --------------------------------------

                                    Name:  Patrick Farrell
                                         -------------------------------------

                                    Title: President
                                         -------------------------------------

                                    BORROWER

                                    IPARTY CORP.

                                    By:  /s/ Patrick Farrell
                                        --------------------------------------

                                    Name: Patrick Farrell
                                        --------------------------------------

                                    Title: President
                                        --------------------------------------

<PAGE>

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

                                     LENDER

                                     WELLS FARGO RETAIL FINANCE, L.L.C.

                                     By: /s/ Daniel F. O'Rourke
                                         ---------------------------------------
                                         Daniel F. O'Rourke, Vice President

<PAGE>

                                    EXHIBIT A

                                   MASTER NOTE
                                   (REVOLVING)

$7,500,000.00                                              Boston, Massachusetts
                                                               May 23, 2002

     For value received, the undersigned, jointly and severally (the
"BORROWER"), hereby promises to pay on July 31, 2004, to the order of Wells
Fargo Retail Finance, L.L.C., a Delaware limited liability company (the
"LENDER"), at its main office in Boston, Massachusetts, or at any other place
designated at any time by the holder hereof, in lawful money of the United
States of America and in immediately available funds, the principal sum of Seven
Million Five Hundred Thousand ($7,500,000.00) Dollars or, if less, the aggregate
unpaid principal amount of all advances made by the Lender to the Borrower
hereunder, together with interest on the principal amount hereunder remaining
unpaid from time to time, computed on the basis of the actual number of days
elapsed and a 360-day year, from the date hereof until this Note is fully paid
at the rate from time to time in effect under the Loan and Security Agreement
dated August 23, 2000, as amended, (the "LOAN AGREEMENT") by and between the
Lender and the Borrower. The principal hereof and interest accruing thereon
shall be due and payable as provided in the Loan Agreement. This Note may be
prepaid only in accordance with the Loan Agreement.

     This Note is issued pursuant, and is subject, to the Loan Agreement, which
provides, among other things, for acceleration hereof. This Note is the Master
Note referred to in the Loan Agreement. This Note supercedes, and is issued in
replacement for, but not in satisfaction of, a Master Note (Revolving) dated as
of August 23, 2000, issued by the Borrower to the order of Lender in the
original principal amount of $7,500,000.

     This Note is secured, among other things, pursuant to the Loan Agreement
and may now or hereafter be secured by one or more other security agreements,
mortgages, deeds of trust, assignments or other instruments or agreements.

     The Borrower hereby agrees to pay all costs of collection, including
attorneys' fees and legal expenses in the event this Note is not paid when due,
whether or not legal proceedings are commenced.

     Presentment or other demand for payment, notice of dishonor and protest are
expressly waived.

<PAGE>

     This Note shall be deemed to be under seal.

WITNESS:                           IPARTY RETAIL STORES CORP.

                                   By:______________________________________

                                   Name:____________________________________

                                   Title:___________________________________

                                   IPARTY CORP.

                                   By:______________________________________

                                   Name:____________________________________

                                   tle:_____________________________________

<PAGE>

                                    EXHIBIT D

                              ASSUMPTION AGREEMENT

     AGREEMENT made this 23rd day of May 2002, between Wells Fargo Retail
Finance, L.L.C., a Delaware limited liability company with a usual place of
business at One Boston Place, 18th Floor, Boston, Massachusetts 02108
(hereinafter the "LENDER"), and iParty Corp. a Delaware corporation with a usual
place of business at 1457 VFW Parkway, West Roxbury, Massachusetts 02132
(hereinafter the "COMPANY").

     WHEREAS, iParty Retail Stores Corp., a Delaware corporation and iParty
Corp., a Delaware corporation (collectively, the "BORROWER"), entered into a
Loan and Security Agreement with the Lender dated as of August 23, 2000, as
amended by First Amendment dated May 23, 2002 (the "LOAN AGREEMENT"); and

     WHEREAS, the Company desires to become a Borrower under the Loan Agreement
in accordance with the procedures set forth in Section 14-19 of the Loan
Agreement; and

     WHEREAS, the Company and the Borrower desire the consent of the Lender to
add the Company as part of the Borrower.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. The Lender consents to the Company becoming a Borrower under the Loan
Agreement on the condition that the rights of the Lender shall not in any manner
be impaired nor shall any Liability or obligation or any claim or demand
existing by the Lender against the Borrower be released or impaired by such
addition of the Company as a Borrower and that the Company assume and be liable
for all Liabilities of the Borrower to the Lender in the same manner and to the
same extent as if the Company itself was an original signatory to the Loan
Agreement and named as the Borrower therein.

     2. The Company hereby agrees to assume all obligations and Liabilities of
the Borrower to the Lender pursuant to the Loan Agreement, which Loan Agreement
is incorporated herein by reference, and to be liable for the same in the manner
and to the extent as if the Company itself had incurred such obligations or
Liabilities and had executed the Loan Agreement, and further agrees to ratify
and confirm the terms of this Agreement by executing such promissory notes and
other documents as the Lender may required.

     3. The Company confirms to the Lender that the Lender has and hereby grants
to the Lender a continuing security interest in the Collateral as security for
all Liabilities of the Company and the Borrower to the Lender.

<PAGE>

     4. The Company confirms to the Lender, and hereby assumes, joint and
several liability with each other Borrower pursuant to Section 14-20 of the Loan
Agreement.

     5. Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement.

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

                                     IPARTY CORP.

                                     By:______________________________________

                                     WELLS FARGO RETAIL FINANCE, L.L.C.

                                     By:______________________________________

ASSENTED TO:

IPARTY RETAIL STORES CORP.
IPARTY CORP.

By:___________________________________

<PAGE>

                                    EXHIBIT E

                              MULTI-ENTITY GUARANTY
                                   (UNLIMITED)

TO:      Wells Fargo Retail Finance, L.L.C.
         One Boston Place, 18th Floor
         Boston, MA  02108

     1. GUARANTY OF PAYMENT AND PERFORMANCE OF OBLIGATIONS. In consideration of
the Lender extending credit or otherwise in its discretion giving time,
financial or banking facilities or accommodations to any one or more of the
undersigned (each a "BORROWER" with respect to such extensions of credit,
facilities or accommodations), each undersigned hereby unconditionally
guarantees to the Lender (each undersigned being referred to as a "GUARANTOR"
with respect to its guaranty obligations set forth herein) that (a) each
Borrower will duly and punctually pay or perform, at the place specified
therefor or, if no place is specified, at the Lender's main office in Boston,
Massachusetts or at such other location designated by Lender, all indebtedness,
obligations and liabilities, direct or indirect, matured or unmatured, primary
or secondary, certain or contingent, of any Borrower to the Lender now or
hereafter owing or incurred (including without limitation reasonable costs and
expenses incurred by the Lender in attempting to collect or enforce any of the
foregoing) which are chargeable to any Borrower either by law or under the terms
of the Lender's arrangements with such Borrower, accrued in each case to the
date of payment hereunder (collectively, the "OBLIGATIONS" and individually, an
"OBLIGATION"); and (b) if there is an agreement evidencing or executed and
delivered in connection with any Obligation, each Borrower will perform in all
other respects strictly in accordance with the terms thereof. This Guaranty is
an absolute, unconditional and continuing guaranty of the full and punctual
payment and performance by each Borrower of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Lender first attempt to collect any of the Obligations from any Borrower or
resort to any security or any other means of obtaining payment of any of the
Obligations which the Lender now has or may acquire after the date hereof, or
upon any other contingency whatsoever. Upon any default by any Borrower in the
full and punctual payment and performance of the Obligations, the liabilities
and obligations of each Guarantor hereunder shall, at the option of the Lender,
become forthwith due and payable to the Lender without demand or notice of any
nature, all of which are expressly waived by each Guarantor. Payments by each
Guarantor hereunder may be required by the Lender on any number of occasions.

     2. GUARANTORS' FURTHER AGREEMENTS TO PAY. Each Guarantor further agrees, as
the principal obligor and not as a guarantor only, to pay to the Lender
forthwith upon demand, in funds immediately available to the Lender, all
reasonable costs and expenses (including court costs and legal expenses)
incurred or expended by the Lender in connection with this Guaranty and the
enforcement hereof, together with interest on amounts recoverable under this
Guaranty from the time such amounts become due until payment at the usual rate
charged by the Lender to each of the undersigned respectively.

<PAGE>

     3. UNLIMITED LIABILITY OF GUARANTORS. The liability of each Guarantor
hereunder shall be unlimited.

     4. TERMINATION OF GUARANTY. The obligations of each Guarantor under this
Guaranty shall continue in full force and effect until all Obligations are fully
paid and performed.

     5. SECURITY; SETOFF. Each Guarantor grants to the Lender, as security for
the full and punctual payment and performance of such Guarantor's obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to such Guarantor now or hereafter held by the Lender and in
all deposits and other sums credited by or due from the Lender to such Guarantor
or subject to withdrawal by such Guarantor; and regardless of the adequacy of
any collateral or other means of obtaining repayment of the Obligations, the
Lender may at any time and without notice to such Guarantor set off the whole or
any portion or portions of any or all such deposits and other sums against
amounts payable under this Guaranty, whether or not any other person or persons
could also withdraw money therefrom.

     6. LENDER'S FREEDOM TO DEAL WITH BORROWERS AND OTHER PARTIES. The Lender
shall be at liberty, without giving notice to or obtaining the assent of any
Guarantor and without relieving any Guarantor of any liability hereunder, to
deal with each Borrower and with each other party who now is or after the date
hereof becomes liable in any manner for any of the Obligations, in such manner
as Lender in its sole discretion deems fit, and to this end each Guarantor gives
to the Lender full authority in its sole discretion to do any or all of the
following things: (a) extend credit, make loans and afford other financial
accommodations to any Borrower at such times, in such amounts and on such terms
as the Lender may approve, (b) vary the terms and grant extensions or renewals
of any present or future indebtedness or obligation to the Lender of any
Borrower or of any such other party, (c) grant time, waivers and other
indulgences in respect thereto, (d) vary, exchange, release or discharge, wholly
or partially, or delay in or abstain from perfecting and enforcing any security
or guaranty or other means of obtaining payment of any of the Obligations which
the Lender now has or acquires after the date hereof, (e) accept partial
payments from any Borrower or any such other party, (f) release or discharge,
wholly or partially, any endorser or guarantor, and (g) compromise or make any
settlement or other arrangement with any Borrower or any such other party.

     7. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWERS; INVALIDITY OF
SECURITY OR OTHER GUARANTIES. If for any reason Borrower has no legal existence
or is under no legal obligation to discharge any of the Obligations undertaken
or purported to be undertaken by it or on its behalf, or if any of the moneys
included in the Obligations have become irrecoverable from any Borrower by
operation of law or for any other reason, this Guaranty shall nevertheless be
binding on each Guarantor to the same extent as if such Guarantor at all times
had been the principal debtor on all such Obligations. This Guaranty shall be in
addition to any other guaranty or other security for the Obligations, and it
shall not be prejudiced or rendered unenforceable by the invalidity of any such
other guaranty or security.

     8. WAIVERS BY GUARANTORS. Each Guarantor waives: notice of acceptance
thereof, notice of any action taken or omitted by the Lender in reliance hereon,
and any requirement that the Lender be

<PAGE>

diligent or prompt in making demands hereunder, giving notice of any default by
any Borrower or asserting any other right of the Lender hereunder. Each
Guarantor also irrevocably waives, to the fullest extent permitted by law, all
defenses which at any time may be available in respect of such Guarantor's
obligations hereunder by virtue of any homestead exemption, statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect.

     9. NO CONTEST WITH LENDER. So long as any Obligation remains unpaid or
undischarged, no Guarantor will, by paying any sum recoverable hereunder
(whether or not demanded by the Lender) or by any means or on any other ground,
claim any setoff or counterclaim against any Borrower in respect of any
liability of such Guarantor to such Borrower or, in proceedings pursuant to
Title 11 of the United States Code entitled "Bankruptcy" (commonly referred to
as the Bankruptcy Code) or insolvency proceedings of any nature, prove in
competition with the Lender in respect of any payment hereunder or be entitled
to have the benefit of any counterclaim or proof of claim or dividend or payment
by or on behalf of any Borrower or the benefit of any other security for any
Obligation which, now or hereafter, the Lender may hold or in which it may have
any share.

     10. WAIVER OF SUBROGATION. Until such time as all outstanding Liabilities
are paid and discharged in full, each Guarantor agrees that the Guarantors shall
not have, and hereby expressly waive, (1) any right to subrogation or
indemnification, and any other right to payment from or reimbursement by the
Borrower in connection with or as a consequence of any payment made by any
Guarantor hereunder, (2) any right to enforce any right or remedy which Lender
has or may hereafter have against any of the Borrowers, and (3) any benefit of,
and any right to participate in, (a) any collateral now or hereafter held by
Lender, or (b) any payment to Lender by, or collection by Lender from, any
Borrower.

     11. DEMANDS AND NOTICES. Any demand on or notice to any Guarantor shall be
in writing and shall be effective when handed to such Guarantor or left at or
mailed or sent by telegraph to such Guarantor's usual or last know address.

     12. AMENDMENTS, WAIVERS, ETC. Except as otherwise provided in Paragraph 6
of this Guaranty, no provision of this Guaranty can be changed, waived,
discharged or terminated except by an instrument in writing signed by the Lender
and the Guarantor to be affected by the same, expressly referring the provision
of this Guaranty to which such instrument relates; and no such waiver shall
extend to, affect or impair any right with respect to any Obligation which is
not expressly dealt with therein. No course of dealing or delay or omission on
the part of the Lender in exercising any right shall operate as a waiver thereof
or otherwise be prejudicial thereto.

     13. SECURED AND COTERMINOUS OBLIGATIONS. The Obligations of the Borrowers
are secured pursuant to a Loan and Security Agreement dated August 23, 2000, as
amended by a First Amendment to Loan and Security Agreement of even date
herewith (the "LOAN AGREEMENT"). The termination of any of the aforementioned
Loan Agreement or the occurrence of a default under this Guaranty shall
constitute a default under each of the aforementioned Loan Agreement.

     14. MISCELLANEOUS PROVISIONS. This Guaranty is intended to take effect as a
sealed instrument to be governed by and construed in accordance with the laws of
the Commonwealth of

<PAGE>

Massachusetts and shall inure to the benefit of the Lender and its successors in
title and assigns, and shall be binding on the Guarantors and the Guarantors'
respective successors in title and assigns.

     IN WITNESS WHEREOF, the undersigned have executed this Guaranty or have
caused this Guaranty to be executed on their behalf by an officer or other
person thereunto duly authorized this day of May 2002.

Witness:                              IPARTY RETAIL STORES CORP.

                                      By:______________________________________

                                      Name:____________________________________

                                      Title:___________________________________

                                      IPARTY CORP.

                                      By:______________________________________

                                      Name:____________________________________

                                      Title:___________________________________

<PAGE>

                                  EXHIBIT 9-11

FINANCIAL COVENANTS:

MINIMUM EXCESS AVAILABILITY
Borrower shall maintain Availability of at least $300,000, measured at the end
of each month.

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