LEASE AND LEASE AGREEMENT Between 504 Carnegie Associates Limited Partnership The Landlord And Pharmanet, Inc. The Tenant For Leased Premises In 504 Carnegie Center Princeton, New Jersey March 4, 1999

EXHIBIT 10.3

LEASE AND LEASE AGREEMENT

Between

504 Carnegie Associates Limited Partnership

The Landlord

And

Pharmanet, Inc.

The Tenant

For Leased Premises In

504 Carnegie Center

Princeton, New Jersey

March 4, 1999

Prepared by:

L. Stephen Pastor, Esq.

202 Carnegie Center

Princeton, New Jersey 08543-5226

Phone:

609 734 6360

Fax:

609 734 6388

INDEX

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iii

EXHIBITS

iv

LEASE AND LEASE AGREEMENT, dated as of March 4, 1999, between 504 Carnegie Associates Limited Partnership, a New Jersey limited partnership, with offices at Suite 101, 101 Carnegie Center, Princeton, New Jersey 08540 (the “Landlord”), and Pharmanet, Inc. a Delaware Corporation, with its principal office at 504 Carnegie Center Drive, Princeton, New Jersey 08543 (the “Tenant”).

Subject to all the terms and conditions set forth below, the Landlord and the Tenant hereby agree as follows:

1.

Glossary of Terms and Definitions .

As used in this Agreement, the terms and phrases hereinafter set forth shall have the respective meanings herein assigned or referred to:

1.1.

“Additional Rent” means all amounts other than Basic Rent required to be paid by the Tenant to the Landlord in accordance with this Agreement.

1.2.

“Agreement” means this Lease and Lease Agreement (including exhibits).

1.3.

“Base Rate” means the interest rate per year equal to the “prime” or equivalent interest rate per year announced from time to time by Citibank, N.A., s published at its main office in New York City.

1.4.

“Basic Rent” is defined in Section 4.2 of this Agreement.

1.5.

“Basic Monthly Rent” is defined in Section 4.2 of this Agreement.

1.6.

“Building” means the office building erected on the Property which is commonly known as Building 504, Carnegie Center, Princeton, New Jersey 08540.

1.7.

“Building Complex” means the Building, Common Facilities and Property.

1.8.

“Building 506” means the office building erected adjacent to the Building which is commonly known as Building 504, Carnegie Center, Princeton, New Jersey 08540.

1.9.

“Cafeteria” means the cafeteria within Building 506.

1.10.

“Calendar Year” means the period January 1 through December 31 of any year.

1.11.

“Capital Expenditure” is defined in Section 5 of this Agreement.

1.12.

“Carnegie Center” shall mean the office park owned and developed by Carnegie Center Associates and its affiliates, in the Township of West Windsor, New Jersey, of which the 500 Series Complex is a part.

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1.13.

“Casualty Termination Notice” shall have the meaning referred to in Section 15.

1.14.

“Commencement Date” is defined in Section 3 of this Agreement.

1.15.

“Common Facilities” means the areas, facilities and improvements provided by the Landlord in the Building (except the Premises and the Other Premises) and on or about the Property, including, without limiting the generality of the foregoing, the Parking Facilities and access roads thereto (for non-exclusive use by the Tenant in accordance with Section 2 of this Agreement).

1.16.

“Electric Charges” means all the supplying utility’s charges for, or in connection with, furnishing electricity including charges determined by actual usage, any seasonal adjustments, demand charges, energy charges, energy adjustment charges and any other charges, howsoever denominated, of the supplying utility, including sales and excise taxes and the like.

1.17.

“Event of Default” is defined in Section 21 of this Agreement.

1.18.

“Expansion Space” is defined in Section 33 of this Agreement.

1.19.

“Expiration Date” shall mean the last day of the Term.

1.20

“Expiring Term” means, when used in the context of the Option of Renew, the Initial Term.

1.29.

“500 Series Complex” shall mean the buildings designated as Buildings 502, 504, 506, and 508, and any other buildings developed by the Landlord or its affiliates and designated as 500 Series Complex buildings.

1.30.

“Force Majeure” shall have the meaning referred to in Section 28 of this Agreement.

1.31.

“Gross Rentable Area of the Building” shall be measured based on the aggregate of the gross rentable area of each floor of the Building, measured based on outside of exterior walls of the Building, excluding (i) exterior balconies and projections, (ii) “major vertical penetrations” as defined in the BOMA American National Standard for Measuring Floor Area in Office Building, reprinted May 1981 (“BOMA”), but including (iii) the area of the elevator shafts on the ground floor, (iv) all stairways in the Building, and (v) any balconies within the Building. At the commencement of this Lease, the parties agree that the Gross Rentable Area of the Building is equal to 121,990 square feet.

1.32.

“Gross Rentable Area of the Premises” is the product of the Net Rentable Area of the Premises times a fraction whose numerator is the Gross Rentable Area of the Building and whose denominator is the Net Rentable Area of the Building. Gross Rentable Area of the Premises shall be the basis for determination of Basic Rent and as a component for determination of Tenant’s Percentage. At the commencement of this Lease, the parties agree that the Gross Rentable Area of the Premises is equal to 121,990 square feet.

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1.33.

“Guests” shall mean the Tenant’s licensees and invitees in, on or about the Premises, the Building, the Common Facilities or the Property, either at the Tenant’s express or implied request or invitation or for the purpose of visiting the Tenant.

1.34.

A “History of Recurring Events of Default” means the occurrence of three or more Events of Default (whether or not cured by the Tenant) in any period of twelve (12)months.

1.35.

“Holdover Damages” is defined in Section 22.4 of this Agreement.

1.36.

“Initial Term” means the period so designated in Section 3 of this Agreement.

1.37.

“Landlord” means Carnegie 504 Associates and those successors to the Landlord’s interest in the Property and/or the Landlord’s rights and obligations under this Agreement contemplated by Section 25 of this Agreement.

1.38.

“Landlord’s Estimate” shall have the meaning set forth in Section 5.8.

1.39.

“Landlord’s Recapture” shall have the meaning referred to in Section 17.3 of this Agreement.

1.40.

“Lease Year” shall mean each of ten (10) individual twelve (12)-month periods beginning on the Commencement Date, and each of ten (10) further twelve (12)-month periods in the event Tenant exercises its Option to Renew.

1.41.

“Legal Holidays” means New Year’s Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

1.42.

“Management Fees” is defined in Section 5.3.8 of this Agreement.

1.43.

“Market Rental Rate” means that rate per square foot per annum to be determined as hereinafter provided in Section 7.

1.44.

“Municipality” means the Township of West Windsor in Mercer County, New Jersey, or any successor municipality with jurisdiction over the Property.

1.45.

“Net Rentable Area of the Building” shall mean the square footage rentable to all tenants, including the Tenant, defined and determined in accordance with the definition of Net Rentable Area of the Premises.

1.46.

“Net Rentable Area of the Premises” shall mean the square footage computed based on the gross area of the horizontal plans enclosed by the interior surface of the exterior walls of the Building, the midpoint of any walls separating portions of the Premises from adjacent tenants, the slab penetration line of all walls separating the Premises from service areas, and the interior corridor side of walls separating the Premises from the interior common areas, which shall include corridors, lobbies and other core and common areas. In computing Net Rentable Area of the Premises, no deduction shall be made for columns or projections necessary to the Building.

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1.47.

“Nuisance” means any condition or occurrence which unreasonably or materially interferes with the authorized use and enjoyment of the Other Premises and the Common Facilities by any tenant of Other Premises or by any person authorized to use any Other Premises or Common Facilities or with the authorized use of any other areas, buildings or other improvements in Carnegie Center.

1.48.

“Operational Expenses” is defined in Section 5 of this Agreement.

1.49.

“Option to Renew” is defined in Section 7 of this Agreement.

1.50.

“Other Premises” means all premises within the Building, with the exception of the Premises, that are, or are available to be, leased to tenants or prospective tenants, respectively.

1.51.

“Parking Facilities” means the parking structure and parking areas adjacent to the Building, containing no fewer than one (1) parking space for each 250 square feet of Gross Rentable Area of the Building, which are provided as Common Facilities.

1.52.

“Permitted Assignment” shall have the meaning referred to in Section 17.1.

1.53.

“Premises” means the Premises leased to Tenant in Building 504.

1.54.

“Property” means the parcel of land on which the Building is erected, as is more particularly described by metes and bounds in Exhibit A attached hereto.

1.55.

“Ready for Occupancy” shall have the meaning defined in Section 3.3.

1.56.

“Ready for Occupancy Notice” shall have the meaning defined in Section 3.5.

1.57.

“Real Estate Taxes” means, in any Calendar Year, the taxes defined in Section 5.2.

1.58.

“Reconstruction Notice” shall have the meaning referred to in Section 15.

1.59.

“Regular Business Hours” shall be those hours designated as such from time to time by Tenant, provided, however, that in the event there shall be other tenants in the Building during the Term which occupy more than 20% of the Gross Rentable Area of the Building, Landlord in the exercise of its reasonable discretion may elect to modify the Regular Business Hours to make them consistent with the regular business hours established by the landlords of other buildings in Carnegie Center having more than one (1) tenant.

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1.60.

“Re-Leasing Damages” is defined in Section 22.3.

1.61.

“Renewal Notice” shall have the meaning referred to in Section 7.

1.62.

“Renewal Rent” shall mean the rent to be determined pursuant to Section 7.

1.63.

“Renewal Term” means, at the time of reference, any portion of the Term, other than the Initial Term, as to which the Tenant has properly exercised the Option to Renew.

1.64.

“Rent” means Basic Rent and Additional Rent.

1.65.

“Rent Commencement Date” shall have the meaning referred to in Section 4.3.

1.66.

“Restoration Notice” shall have the meaning referred to in Section 15.2.

1.67.

“Target Date” means the estimated Commencement Date which is hereby established to be July 1, 2001.

1.68.

“Tenant” means Pharmanet, Inc. and its permitted assigns.

1.69.

“Tenant Electric Charges” means Electric Charges attributable to the Tenant’s use of electricity in the Premises provided in Section 10.

1.70.

“Tenant Allowance” shall have the meaning referred to in Section 6.

1.71.

“Tenant’s Percentage” shall mean the ratio of the Gross Rentable Area of the Premises to the Gross Rentable Area of the Building, multiplied by 100. Tenant’s Percentage has been initially established as one hundred percent (100%) and shall be subject to adjustment if circumstances change.

1.72.

“Term” means the Initial Term plus, at the time of reference, any Renewal Term.

1.73.

“Termination Damages” is defined in Section 22.2 of this Agreement.

2.

Lease of the Premises .

2.1.

The Landlord shall, and hereby does, lease to the Tenant, and the Tenant shall, and hereby does, lease from the Landlord, the Premises during the Term.

2.2.

The Landlord shall, and hereby does, grant to the Tenant, and the Tenant shall, and hereby does, accept from the Landlord, the non-exclusive right to use the Common Facilities during the Term for itself, its Guests, employees and other agents in common with the Landlord, any tenant of Other Premises, tenants of other buildings in Carnegie Center, any of their respective employees, other agents and guests and such other persons as the Landlord may, in the exercise of its reasonable discretion, determine from time to time.

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2.3.

Landlord shall, at no additional cost or charge to Tenant, provide one (1) parking space in the Parking Facilities for each 250 square feet of Gross Rentable Area of the Premises for the use of Tenant and Tenant’s employees and Guests to be used by Tenant in common with other tenants of the Building. It is expressly understood and agreed, however, that in the event of any governmental imposition of any excise tax or other imposition in the nature of a parking surcharge, the same shall be deemed to be an Operational Expense for purposes of Section 5 of this Lease.

2.4.

Tenant shall at all times during the term of this Lease, without payment of any charge in addition to those provided in Sections 4 and 5 hereof, have the right to use, and for its employees and Guests to use, the Cafeteria in common with other tenants of the Building and the tenant(s) of Carnegie Center, and their employees and Guests, subject to reasonable rules and regulations, of uniform application to all patrons of the Cafeteria, adopted from time to time by Landlord and Tenant.

2.4.1 Landlord will continue to maintain a full service cafeteria in Building 506, so long as it is economically reasonable for Landlord to do so.

2.5.

If the net Rentable Area of the Premises changes at any time during the Term, Landlord and Tenant agree to execute a new lease amendment reflecting any appropriate adjustments in Basic Rent, Basic Monthly Rent, and Tenant’s Percentage.

2.6.

If at any time during the Term of this Lease there shall be one of more tenants of Other Premises, and if at such time Tenant occupies less than a full floor in the Building, on at least six (6) months’ prior written notice to the Tenant, the Landlord shall have the right to move the Tenant out of the Premises and into premises having at least equal floor space located in the Building, Building 502 or Building 506 for the duration of the Term, which premises shall be contiguous with other space leased by Tenant in such building, if available.

In the event the Landlord exercises this right of relocation, the Landlord shall improve and decorate the new premises similarly to the Premises and remove, relocate and reinstall the Tenant’s furniture, trade fixtures, furnishings and equipment, all at the sole cost and expense of the Landlord. Landlord shall cause the relocation to take place outside Regular Business Hours and shall use its best efforts to minimize disruption to Tenant’s ongoing business operations as a result of the relocation. The Landlord shall, and hereby does, indemnify the Tenant against any and all liabilities, obligations, damages, penalties, claims, costs, charges and expenses including, without limiting the generality of the foregoing, reasonable attorney’s fees, imposed on or incurred by the Tenant as a result of any relocation. When the substitute new premises is ready, the Tenant shall surrender the Premises, and this Agreement shall be amended or a new lease executed, as necessary to reflect the relocation.

2.6.1 Landlord agrees to not relocate Tenant to a building which is

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then currently occupied by a major competitor of the Tenant or by a major client of the Tenant.

3.

Term and Commencement Date .

3.1.

The Initial Term shall commence on the first day of July, 2001, (the “Commencement Date”) and shall, unless sooner terminated in accordance with the terms and conditions of this Lease, expire on the last day of the tenth Lease Year (the “Expiration Date”). The Term shall continue until the later of the conclusion of the Renewal Term(s), unless sooner terminated in accordance with the terms and conditions of this Lease.

3.2.

Landlord anticipates that the Premises shall be delivered to the Tenant on July 1, 2001 (the “Target Date”). In the event that the entirety of the Premises are not delivered on this date, Landlord shall provide one and one-half (1-1/2) days’ free Basic Rent applicable to such Net Rentable Area of the Premises not so delivered to Tenant for each day delivery of such space is delayed beyond the Target Date (the “Delay Penalty”); provided, however, that the Delay Penalty shall not accrue if, and to the extent that, the delay is a result of Force Majeure. In the event there is any Delay Penalty as hereinabove provided, the amount of the Delay Penalty to which Tenant is entitled shall be reflected in a Lease Amendment.

3.2.1 In the event Landlord cannot deliver to Tenant a minimum of 100,000 square feet of the Gross Rentable Area on or before November 1, 2001, Tenant shall have the right to terminate this Lease upon sixty (60) days written notice to Landlord. In the event Landlord has delivered to Tenant a minimum of 100,000 square feet of the Gross Rentable Area on or before November 1, 2001, or prior to Tenant providing such notice to Landlord to terminate this Lease as provided for herein, then Tenant shall not have the right to terminate this Lease as provided for herein.

3.3.

Landlord shall give Tenant fifteen (15) days’ prior written notice (the “Ready for Occupancy Notice”) that the Premises are Ready for Occupancy. If the Tenant does not object in writing to the Landlord within fifteen (15) days following receipt of the Ready for Occupancy Notice, the Commencement Date shall be conclusively established as the first day of the month subsequent to the date that the Premises are Ready for Occupancy; provided, however, that if the fifteenth day following receipt of the Ready for Occupancy Notice is the first day of a month, the Commencement Date shall be that day.

4.

Basic Rent .

4.1.

The Tenant shall punctually pay the Basic Rent for the Premises for the Term to the Landlord in the amounts and at the times set forth below, without bill or other demand and without offset, deduction or counterclaim, and without abatement except as expressly provided herein.

4.2.

The Basic Rent for the Premises during the Initial Term shall be at the rates set forth below:

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4.3.

Tenant’s obligation to pay Rent shall begin on the later of (i) the Target Date, or (ii) the date Landlord delivers possession of all of any part of the Premises to the Tenant (the “Rent Commencement Date.”). Basic Monthly Rent shall be payable in advance on the first day of each calendar month during the Term of this Lease. If the obligation to pay Basic Monthly Rent begins or ends on a day other than on the first or last day of a calendar month, then the Basic Monthly Rent for such month shall be prorated at the rate of one thirtieth (1/30 ^th ) of the Basic Monthly Rent for each day of the month for which the obligation to pay rent existed.

4.4.

That portion of any amount of Rent or other amount which is not paid when it is first due shall bear interest at the Base Rate in effect from time to time plus two (2) additional percentage points from the day such portion is first due through the day of receipt thereof by the Landlord. Any such interest shall be due and payable upon demand as Additional Rent.

5.

Additional Rent .

5.1.

In addition to the Basic Rent to be paid as herein provided, Tenant shall pay as Additional Rent Tenant’s Percentage of all Real Estate Taxes and Operational Expenses during the Term, as hereinbelow provided.

5.2.

Real Estate Taxes .

5.2.1.

“Real Estate Taxes” shall mean the amount of real estate taxes (or tax impositions in substitution for real estate taxes), assessments, sewer rents, rates and charges, state and local taxes, transit taxes or any other governmental charge, general, special, ordinary or extraordinary (but not including any “Roll Back Taxes” assessed pursuant to the Farmland Assessment Act of 1964, N.J.S.A. 54:4 – 23.1 et seq., any payments imposed pursuant to the West Windsor Township Transportation Improvement District Program which program is set forth in Section 24-5.5 of the Revised General Ordinances of the Township of West Windsor and further not including income or franchise taxes or any other taxes imposed upon or measured by the Landlord’s income or profits, except if in substitution for real estate taxes as hereinafter provided) which may now or hereafter be levied or assessed against the Building and its related improvements. The Landlord shall take the benefit of the provisions of any statute or ordinance permitting any assessment to be paid over a period of time.

5.2.2.

If Landlord shall receive any refund or rebate of Real Estate Taxes in respect of any tax year falling within the Term (or any portion thereof), Landlord shall credit the amount of such refund, less any reasonable expenses incurred in obtaining such tax refund, to the amount of Real Estate Taxes to be passed through to the tenants of the Building in the year of receipt.

5.2.3.

If the tax year for Real Estate Taxes shall be changed

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by governmental action, then an appropriate adjustment shall be made in the computation of Real Estate Taxes, in accordance with Generally Accepted Accounting Principles applied on a consistent basis.

5.2.4.

If at any time during the Term of this Lease the method or scope of taxation prevailing at the commencement of the Lease Term shall be altered, modified or enlarged so as to cause the method of taxation to be changed, in whole or in part, so that in substitution for the Real Estate Taxes now assessed there may be, in whole or in part, a capital levy or other imposition based on the value of the Building, or the rents received therefrom, or some other form of assessment based in whole or in part on some other valuation of the Building, then and in such event, such substituted tax or imposition shall be included in Real Estate Taxes.

5.2.5.

For so long as Tenant’s Percentage is fifty percent (50%) or more at any time during the Term, Tenant shall have the right to contest or appeal the amount or imposition of Real Estate Taxes, with the prior consent of Landlord, which consent shall not be unreasonably withheld or denied (in the name of Tenant, or of Landlord, or both, as Tenant shall elect and in conformance with the requirements of any mortgage on the Building) by appropriate proceedings. Tenant’s right to institute such challenge or appeal shall be expressly subject to Tenant’s furnishing Landlord an appraisal by a recognized appraiser of the State of New Jersey having expertise in the field of tax appeals in order to demonstrate that the proposed tax appeal shall have a reasonable chance of success based on the appraised valuation as relates to the then tax assessment. Tenant shall advance all costs in connection with such tax appeal and in the event the tax appeal is successful, there shall be deducted from the award or rebate Tenant’s reasonable costs and Tenant’s Percentage of the balance shall be credited to and offset against Tenant’s next payments of Basic Monthly Rent and Additional Rent.

5.3.

“Operational Expenses” shall mean the following unreimbursed expenses paid or incurred by Landlord in connection with managing, operating, maintaining, servicing, insuring and repairing the Building and related exterior appurtenances:

5.3.1.

Wages, salaries, fees and other compensation and payments and payroll taxes and contributions to any social security, unemployment insurance, welfare, pension or similar fund and payments for other fringe benefits required by law or union agreement (or, if the employees or any of them are non-union, then payments for benefits comparable to those generally required by union agreement in first—class office buildings in the Princeton, New Jersey area, which are unionized), or portion thereof, made to or on behalf of all non-executive employees of Landlord or agent performing services rendered in connection with the operation and maintenance of the Building, including, without limitation, elevator operators, elevator starters, window cleaners, porters, janitors, maids, miscellaneous handymen, watchmen, persons engaged in patrolling and protecting the Building, carpenters, engineers, firemen, mechanics, electricians, plumbers, persons engaged in the operation and maintenance of the Building, Building superintendent and assistants, and Building manager. In the event any services are rendered by non-executive employees to facilities other than the Building, the expense attributable thereto shall be properly allocated and apportioned.

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5.3.2.

The uniforms of all employees, cleaning, pressing and the repair thereof.

5.3.3.

Cleaning costs for the Building, including the windows and sidewalks, all snow and rubbish removal (including separate contracts therefore), and the costs of all labor, supplies, equipment and materials incidental thereto required to maintain the Building as a first-class office building.

5.3.4.

Premiums and other charges incurred by Landlord with respect to all insurance obtained by Landlord relating to the Building and the operation and maintenance thereof, including, without limitation: fire and full extended coverage insurance, including windstorm, flood, hail, explosion, riot, rioting attending a strike, civil commotion, aircraft, vehicle and smoke insurance; public liability; elevator; worker’s compensation; boiler and machinery; use and occupancy; health, accident and group life insurance of all employees; casualty rent insurance; excess liability insurance; sprinkler damage insurance; difference in conditions coverage; and such other insurance coverage as Landlord shall purchase in the exercise of its reasonable discretion.

5.3.5.

The cost of electricity, heat, water and sewer and any and all other utility services used in connection with the operation and maintenance of the Building (excluding electricity and other utility services, if any, which are paid directly by tenants). “Cost of electricity” shall include the actual cost of electricity for all tenant premises and electricity for common areas attributable to the operation of the Building [i.e., mechanical equipment operation, common area electricity usage, exterior lighting and in general, all other electric utility usage mutually enjoyed by all tenants (based upon the electricity rate to be adjusted for summer and winter as applicable, and inclusive of demand charge, energy charge and energy adjustment charge in effect as of the Commencement Date] reduced by amounts due from tenants for tenant electricity submetered or charged based on independent survey, or for special electrical usage in conjunction with elapsed time recorded usage for overtime operation of the Building mechanical systems actually billed to other tenants.

5.3.6.

Costs incurred for operation, services, maintenance, inspection, repair and alteration of the Building required for proper operation thereof, including, but not limited to, landscaping, interior planting, and holiday decorations, and the heating, air-conditioning, ventilating, plumbing, electrical and elevator systems of the Building (including any separate contract therefore), and the costs of labor, materials (including light bulbs, tubes, starters and ballasts), supplies and equipment used in connection with all of the aforesaid items.

5.3.7.

Sales and excise taxes and the like upon any of the Operational Expenses and Capital Expenditures enumerated herein.

5.3.8.

Management fees of the managing agent for the Building (“Management Fees”), which managing agent may be a company affiliated with Landlord; provided, however, that the Management Fees of any

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managing agent affiliated with Landlord to be included in Operational Expenses shall not exceed three percent (3%) per annum of all gross income of the Building, exclusive of the Management Fees, including reasonable attribution based on market rent for actual management office space in the Building, provided that such management office space shall not exceed, in aggregate, five hundred (500) square feet; and provided further that noting herein shall prevent Landlord from passing through to any other tenants of the Building a management fee not to exceed four percent (4%) of the gross income of the Other Premises. It is expressly understood and agreed that the Management Fees are intended to cover the costs of clerical and administrative personnel to the extent they perform services in connection with the Building.

5.3.9.

The cost of replacements for miscellaneous and minor tools and equipment used in the operation and maintenance of the Building.

5.3.10.

The cost repainting or otherwise redecorating any part of the Building other than the Premises and the Other Premises, including decorations for the lobby and other public portions of the Building, as the same shall be reasonably required to keep the condition of the Building as a first-class office building.

5.3.11.

The cost of telephone service, postage, office supplies, maintenance and repair of office equipment and similar costs related to operation of the Building superintendent’s office.

5.3.12.

The cost of licenses, permits and similar fees and charges related to operation, repair and maintenance of the Building.

5.3.13.

Accounting fees incurred in connection with the preparation and certification by the Landlord of the Operational Expense and Real Estate Tax Statements pursuant to this Section 5.

5.3.14.

Capital Expenditures incurred by Landlord to retrofit any portion or all of the Building to comply with a change in existing legislation, whether Federal, State or Municipal; and for repairs or replacements which are necessary for the continued operation of the Building as a first-class office building; and to install energy or cost-saving devices which have the effect of lowering Operational Expenses.

5.3.15.

Any and all other reasonable expenditures of Landlord in connection with the operation, repair or maintenance of the Building which are properly expensed in accordance with Generally Accepted Accounting Principles consistently applied with respect to the operation, repair and maintenance of first-class office buildings in the Princeton, New Jersey area.

5.3.16.

The rentals or other operating costs for equipment or machinery used in operating and maintaining the Building.

5.3.17.

Legal and accounting expenses necessary and incidental to the operation of the Building, excluding, however, any legal costs attributable to enforcement of Landlord’s rights under any leases affecting other tenants in the Building and any legal and administrative costs attributable to the organization and maintenance of Landlord.

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5.3.18.

The cost of repair or replacement of art decorations for the lobby or other public portions of the Building, including such repair or replacement of interior or exterior furniture installed in the Common Facilities of the Building.

5.3.19.

The Building’s allocable share of service, replacement, repair, maintenance and other charges assessed from time to time by the Carnegie Center Owners Association II, Inc., or any equivalent association, with respect to the operation of the 500 Series Complex.

5.4.

If Landlord shall make any Capital Expenditure as provided herein (including, without limitation, any repair or replacement treated as a Capital Expenditure under Section 5.3.14 hereof), the costs of such Capital Expenditure shall be included in Operational Expenses in the year of installation and in subsequent years amortized on a straight-line basis, over an appropriate period, not to exceed ten (10) years, in accordance with Generally Accepted Accounting Principles, plus interest payable on the unamortized principal amount of the Capital Expenditure calculated at the Base Rate.

5.5.

Notwithstanding anything in the Lease to the contrary, Operational Expenses shall not include expenditures for any of the following:

5.5.1.

The cost of any capital addition made to the Building of a type not specifically enumerated in Sections 5.3.14 and 5.3.15 herein.

5.5.2.

The costs incurred in preparing space for occupancy by a tenant, including without limitation any costs incurred in advertising, repairing, refurbishing, reconfiguring, restoring, painting or improving in any way such space.

5.5.3.

Repairs or other work occasioned by fire, windstorm or other insured casualty or hazard to the extent that Landlord actually receives proceeds of casualty insurance policies carried by the Landlord insuring the Building and/or the Common Facilities.

5.5.4.

Leasing commissions or legal fees incurred in leasing or procuring new tenants or extending existing leases.

5.5.5.

Repairs or rebuilding necessitated by condemnation.

5.5.6.

Depreciation and amortization of the Building, other than

(a) Capital Expenditures which under Generally Accepted Accounting Principles are expensed or regarded as deferred expenses; and

(b) Capital Expenditures required by law as described hereinabove.

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5.5.7.

The salaries and benefits of executive officers of Landlord and the management agent, if any, which shall be deemed salaries or compensation frees to supervisory and management employees other than and excepting the Building superintendents and/or the Building manager, whose salaries shall be included in Operational Expenses.

5.5.8.

Principal or interest on any mortgage indebtedness or other encumbrances on the Property, the Building or any portion thereof.

5.5.9.

Any payments required to be made under or in connection with any permitted ground lease.

5.5.10.

Any income or franchise taxes imposed on or measured by the net income of Landlord from the operation of the Building (except if in substitution for Real Estate Taxes as herein before provided in Section 5.2.4).

5.5.11.

Any factor for return of invested capital or profit; provided that nothing herein is intended to prevent Landlord from borrowing funds to operate the Building at an interest rate not in excess of the Base Rate.

5.5.12.

Any rent paid to Landlord respecting, or attributed to, the occupation of any space in the Building by Landlord, or the management agent of the Building.

5.5.13.

Any costs incurred due to any violation by Landlord or any tenant of Other Premises of the terms and conditions of any lease of space in the Building.

5.6.

Operational Expenses shall be reduced by the amounts of any reimbursement or credit received or receivable by Landlord with respect to an item of cost that is included in Operation Expenses.  There shall also be credited by Landlord in computing Landlord’s Expense Statement any items of expense included in this Section 5 for items furnished to other tenants of the Building without charge, but charged as part of Operational Expenses, which type of costs are being paid directly by Tenant in accordance with the terms and conditions of the within Lease.  Landlord further agrees with Tenant that:

5.6.1.

Landlord shall receive no mark up on any services or service contracts, included as part of Operational Expenses, greater than the cost of contracting for such services from independent contractors.

5.6.2.

Operational Expenses shall not include charges for services rendered or disproportionately rendered for the benefit of other tenants in the Building.

5.6.3.

To the extent that any Capital Expenditure or structural repair shall be financed and the cost thereof, including interest on any principal amount thereof, shall be included as part of Operational

Expenses, any sums paid by Tenant for Operational Expenses attributable to such component shall be strictly applied toward payment and reduction of such obligation.

5.7.

In the event that less than ninety-five percent (95%) of the Net

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Rentable Area of the Building is occupied by tenants at all times during any year, then Operation Expenses for such year shall be adjusted to include additional costs and expenses that Landlord reasonably determines would have been incurred, and that tenants customarily request, had ninety-five percent (95%) of the Net Rentable Area of the Building been occupied at all times during such year by tenants for whom Landlord is providing all utilities and services set forth by tenants for whom Landlord is providing all utilities and services set forth in Section 5 of this Lease.  In no event shall the total amount of all Operational Expenses passed through as Additional Rent to all tenants of the Building in any year exceed the actual Operational Expenses incurred by Landlord for such year.

5.8.

Tenant shall make estimated monthly payments to Landlord on account of the amount of Operational Expenses and Real Estate Taxes that are expected to be incurred during each calendar year.  Upon the commencement of the Term, and thereafter at the beginning of each Calendar year, Landlord will submit a statement to Tenant setting forth Landlord’s reasonable estimate of such amount and Tenant’s )Percentage of Landlord’s Estimate.  Tenant shall pay to Landlord on the first day of each month following receipt of Landlord’s Estimate, until Tenant’s receipt of the succeeding Landlord’s Estate, an amount equal to one-twelfth (1/12) of such share.

5.8.1.

If, during the course of any calendar year, Landlord shall determine that the Operational Expenses or Real Estate Taxes for the year will exceed the Landlord’s Estimate, then Landlord shall have the right to adjust Landlord’s Estimate and present a lump sum invoice for the months of the year which precede the revised estimate, and to advise Tenant of an adjustment in future monthly payments of Operational Expenses and Real Estate Taxes.  Such adjusted estimates shall not be made more frequently than once every six (6) months.

5.8.2.

Within approximately ninety (90) days after the end of each calendar year, Landlord shall submit a statement showing (a) Tenant’s Percentage of the amount of Operational Expenses and Real Estate Taxes actually incurred during the preceding calendar year, and (b) the aggregate amount of Tenant’s estimated Payments during such year (the “operational Expense and Real Estate Tax Statement”).  In the event there are Capital Expenditures, the Operational Expense and Real Estate Tax Statement shall include an explanation of the basis upon which the Capital Expenditure is being amortized,  If such statement indicates that the aggregate amount of such estimated payments exceeds Tenant’s actual liability, then Landlord shall issue a credit to Tenant in the offset against Tenant’s next payments of Basic Monthly Rent and Additional Rent.  Landlord, at its option., may pay in a lump sum  any such credit due to Tenant.  If such statement indicates that Tenant’s actual liability exceeds the aggregate amount of such estimated paymen5ts, then Tenant shall promptly p[ay the amount of such underpayment.  The Operational Expense and Real Estate Tax Statement shall become binding and conclusive if not challenged by Tenant within one hundred twenty (120) days after such statement is rendered.  If Tenant timely challenges such statement, (a) Tenant shall identify with as much specificity as is practicable the items in Landlord’s statement that Tenant is challenging, (b) Tenant shall promptly pay to Landlord the amount of any items not in dispute, to the extent such items exceed the estimated payments previously made by Tenant, and (c) Tenant shall retain an independent certified public accountant, subject

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to Landlord’s approval thereof (which shall not be unreasonably withheld), to perform an audit of the disputed items.  The determination of said accountant shall be binding and conclusive upon both of the parties; and the costs of said account shall be paid by Tenant if the accountant rejects Tenant’s challenges and by Landlord if the accountant sustains such challenges.  In the event that the accountant determines that any disputed amounts withheld by Tenant under Section 5.8.2(b) are owed, Tenant shall pay interest on such amount at the Base Rate.

5.9.

Should the Term of this Lease commence at any time other than the first day of a calendar year, or terminate at any time other than the last day of a calendar year, Operational Expenses and Real Estate Taxes shall be prorated.

5.10.

The mere enumeration of an item within the definitions of Operational Expenses and Capital Expenditures in this Section B shall not be deemed to create an obligation on the part of the Landlord to provide such item unless the Landlord is affirmatively required to provide such item elsewhere in this Agreement.

5.11.

It is Landlord’s intention to install an energy management system in Tenant’s Premises so that Tenant shall be responsible to pay for overtime use in excess of Regular Business Hours of electrical energy required for the Premises.  Tenant agrees that it will promptly pay as Additional Rent, as and when billed therefor by the Landlord, the amount of any expense which would otherwise fall within the definition of Operation Expenses, but which is specifically paid or incurred by the Landlord for operation and maintenance of the Building, the Common Facilities or the Property outside Regular Business Hours at the specific request of the Tenant or the amount of any expenditure incurred for maintenance or repair of damage to the Building, the Common Facilities, the Property, the Premises or the Other Premises caused directly or indirectly, in whole or in part by the gross negligence or intentional misconduct of the Tenant or any of its employees, other agents or Guests.  The cost for such overtime use by Tenant as hereinabove provided shall be an amount payable at the end of the month during the Term that is equal to Landlord’s actual cost to provide such electrical energy and other utilities to Tenant.

5.12.

All Rent shall be paid to Landlord at the address to which notices to Landlord are to be given or to such other party or to such other address as Landlord may designate from time to time by written notice to Tenant.  If Landlord shall at any time accept Rent after it shall become due and payable, such acceptance shall not excuse a delay upon subsequent occasions, or constitute or be construed as a waiver of any of Landlord’s rights hereunder.

5.13.

In the event that any business, rent or other taxes that are now or hereafter levied upon Tenant’s use or occupancy of the Premises are enacted, changed or altered so that any of such taxes are levied against Landlord, or the collection or payment of such taxes, Tenant shall pay any and all such taxes to Landlord as Additional Rent upon written demand from Landlord.  Notwithstanding any other provision to eh contrary, Tenant shall not be obligated to pay any taxes levied upon Landlord’s net or gross income.

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5.14.

Landlord shall have all the rights and remedies for the collection of Additional Rent as are available to Landlord for the collection of Basic Rent pursuant to the terms of this Lease.

6.

Preparation of t he Leased Premises -Tenant Allowance.

Landlord shall pay to Tenant $250,000.00 ("Tenant Allowance") on the Target Date, provided Tenant has paid all sums due Landlord on or before the Commencement Date.

7.

Option to Renew.

7.1.

If, prior to the date of exercise thereof, no Event of Default shall have occurred that the Tenant has not previously cured and if there has not been a History of Recurring Events of Default (whether or not previously cured), the Tenant shall have two (2) options (each, the "Option to Renew"), exercisable exclusively at the time and in the manner set forth below in Section 7.2 of this Agreement, to extend the Term for one additional period of five (5) years' duration. If the Option to Renew is properly exercised, the Renewal Term shall commence upon the end of the Expiring Term.

7.2.  

In the event the Tenant elects to exercise the then applicable Option to Renew, the Tenant shall give written notice (the "Renewal Notice") of exercise to the Landlord no later than twenty-four (24) months prior to the end of the then Expiring Term (the "Renewal Notice Date").

7.3.

The Basic Rent for the Renewal Term shall be established by one of the following methods, at Tenant's election:

7.3.1.

No less than one hundred twenty (120) days prior to the Renewal Notice Date, Tenant may give Landlord written notice of its interest in renewing the Lease. If such notice is given, Landlord and Tenant shall negotiate in good faith for sixty (60) days thereafter to determine the Market Rental Rate. If the parties are able to agree on the Market Rental Rate, the Basic Rent for the Premises during the Renewal Term shall be equal to ninety-five percent (95%) of the Market Rental Rate. If the parties are unable to agree on the Market Rental Rate as provided in this Section 7.3.1, then the Market Rental Rate shall be determined by a board of three (3) Master appraisers who are Members of the American Institute of Real Estate Appraisers, or equivalent  appraisal society, one (1) of whom shall be named by Landlord, one (1) by Tenant, and the two (2) so appointed shall select a third. Said board of appraisers shall each be licensed in-the State of New Jersey as Real Estate Appraisers, specializing in the field of commercial appraising of office buildings, having ten (10) years' experience, and recognized as ethical and reputable within their field. Landlord and Tenant agree to make their appointments promptly within ten (10) days after the expiration of the sixty (60) day period, or sooner if mutually agreed upon. The two (2) appraisers selected by Landlord and Tenant shall promptly select a third appraiser within fifteen (15) days after they both have been appointed. Each appraiser, within fifteen (15) days after the third appraiser is selected, shall submit in writing his or her determination of the Market Rental Rate to Landlord and Tenant. The Market Rental Rate shall be the mean of the two (2) closest Market Rental Rate determinations; provided, however,

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that if the highest and lowest appraisals are equidistant from the middle appraisal, the middle appraisal shall be deemed the Market Rental Rate. Landlord and Tenant shall each pay the fee of the appraiser selected by each and they shall share the payment of the fee of the third appraiser. If Tenant elects to determine the Market Rental Rate by the appraisal process set forth herein, the Basic Rent for the Renewal Term shall be equal to ninety-five percent (95%) of the Market Rental Rate established by the appraisal procedure.

7.3.2.

For purposes of this Section 7.3, "Market Rental Rate" shall mean the effective rental, expressed in dollars per rentable square foot, that would be received by landlords renting first-class office buildings in the Princeton, New Jersey, area comparable to the 500 Series Complex, projected to the commencement date of the Renewal Term (taking into account rent concessions and tenant allowances then available in the Princeton, New Jersey, market) and escalations thereof.

7.4.

In addition to the Basic Rent determined as above provided, Tenant shall be required to pay during the Renewal Term the Additional Rent and any other charges required to be paid by Tenant by this Agreement.

7.5

Upon determination of the Renewal Rent pursuant to this Section 7, Landlord and Tenant shall execute a further lease amendment in writing to reflect the annual Renewal Rent for the Premises.

8.

Use and Occupancy.

8.1.

The Tenant shall continuously occupy and use the Premises during the Term exclusively for general office and research purposes and not for opening for the public any operating banking facility or any lending facility of the type operated customarily by a bank, bank holding company, savings bank, savings and loan, consumer credit lender or similar institutional lender.

8.2.

In connection with the Tenant's use and occupancy of the Premises and use of the Common Facilities, the Tenant shall observe, and the Tenant shall cause the Tenant's employees, other agents and Guests to observe, each of the following:

8.2.1.

the Tenant shall not do, or permit or suffer the doing of, anything which might have the effect of creating a significantly increased risk of, or damage from, fire, explosion or other casualty;

8.2.2.

the Tenant shall not do, or permit or suffer the doing of, anything which would have the effect of (a) increasing any premium for any liability, property, casualty or excess coverage insurance policy otherwise payable by the Landlord, unless Tenant agrees to pay any such increase in premium as Additional Rent, or (b) making any such types or amounts of insurance coverage unavailable to the Landlord.

8.2.3.

to the extent they are not inconsistent with this Agreement, the Tenant and the Tenant's employees, other agents and Guests shall comply with the Building Rules and Regulations attached hereto as Exhibit B, and with any changes made therein by the Landlord if, with respect to any such

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changes, the Landlord shall have given notice of the particular changes to the Tenant and such changes shall not materially adversely affect the conduct of the Tenant's business in the Premises;

8.2 .4.

the Tenant and the Tenant's employees, other agents and Guests shall not create, permit or continue any Nuisance in or around Carnegie Center, the Premises, the Other Premises, the Building, the Common Facilities or the Property;

8.2.5.

the Tenant and the Tenant's employees, other agents and Guests shall comply with all Federal, state and local statutes, ordinances, rules, regulations and orders as they pertain to the Tenant's use and occupancy of the Premises, to the conduct of the Tenant's business and to the use of the Common Facilities, except that nothing herein shall require the Tenant to make any structural changes that may be required thereby that are generally applicable to the Building as a whole and not solely to Tenant's exclusive use;

8.2.6.

the Tenant and the Tenant's employees, other agents and Guests shall comply with the requirements of the Board of Fire Underwriters (or successor organization) and of any insurance carriers providing liability, property, casualty or excess insurance coverage regarding the Property, the Building, the Common Facilities or any portions thereof, any other improvements on the Property and Carnegie Center, except that nothing herein shall require the Tenant to make any structural or mechanical changes or Tenant Improvements changes that may be required thereby that are generally applicable to the Building as a whole and not solely to Tenant's exclusive use;

8.2.7.

the Tenant and the Tenant's employees, other agents and Guests shall not draw electricity in the Premises in excess of the rated capacity of the electrical conductors and safety devices including, without limiting the generality of the foregoing, circuit breakers and fuses, by which electricity is distributed to and throughout the Premises and, without the prior written consent of the Landlord in each instance, shall not connect any fixtures, appliances or equipment to the electrical distribution system serving the Building and the Premises other than typical professional office equipment such as, without limitation, minicomputers, microcomputers, typewriters, copiers, LAN systems, telecommunications equipment, Bernoulli systems, file servers, vending machines, word processors, laser printers, telephone systems, facsimile machines, controllers, UPS systems, coffee machines and tabletop microwave ovens, none of which, considered individually and in the aggregate, overall and per fused or circuit breaker protected circuit, shall exceed the above limits;

8.2.8.

on a timely basis the Tenant shall pay directly and promptly to the respective taxing authorities any taxes or impositions (other than Real Estate Taxes) charged, assessed or levied exclusively on the Premises or arising exclusively from the Tenant's use and occupancy of the Premises;

8.2.9.

the Tenant and the Tenant's employees, other agents and Guests shall not bring or discharge any substance (solid, liquid or gaseous), or conduct any activity, in or on Carnegie Center, the Property, the Building, the Common Facilities or the Premises that shall have been identified by any Federal, state or local statute [including, without limiting the generality of the

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foregoing, the Spill Compensation and Control Act ( N.J.S.A. 58:10-23.11 ), as they may be amended], ordinance, rules, regulation or order as toxic or hazardous to health or to the environment; and

8.2.10

the Tenant will not use or occupy the Premises for development, experimentation or production of toxic substances or for breeding of or experimentation on animals.

9.

Landlord's Building Services.

9.1.

T